Full text of Federal Reserve Bulletin : April 2001
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Volume 87 • Number 4 • April 2001
Federal Reserve
BULLETIN
Board of Governors of the Federal Reserve System, Washington, D.C.
Table of Contents
foresee an implicit strengthening of activity after
the current rebalancing is over, although the
central tendency of their individual forecasts for
real GDP still shows a substantial slowdown,
on balance, for the year as a whole (Testimony
before the Senate Committee on Banking, Housing, and Urban Affairs, February 13, 2001).
183 FINANCIAL SERVICES USED BY SMALL
BUSINESSES: EVIDENCE FROM THE 1998
SURVEY OF SMALL BUSINESS
FINANCES
Using newly available data from the 1998 Survey of Small Business Finances, this article
offers preliminary findings regarding the characteristics of small businesses in the United States
and their use of credit and other financial services. The main goals of the survey are to provide information on credit accessibility for small
businesses, their use of financial services, and
the sources of those services. The survey also
provides a general-purpose database that can be
used to study small business financing. Preliminary findings suggest that although the financial
landscape has changed markedly since the previous survey in 1993, financing patterns and the
use of particular suppliers have not.
206 INDUSTRIAL PRODUCTION AND CAPACITY
UTILIZATION FOR FEBRUARY
2001
Industrial production fell 0.6 percent in February, its fifth consecutive monthly decline. At
146.0 percent of its 1992 average, industrial
production was 1.2 percent above its February
2000 level. The rate of capacity utilization for
total industry fell to 79.4 percent in February,
its sixth consecutive monthly decline, and is
2.7 percentage points below its 1967-2000
average.
209 TESTIMONY OF FEDERAL
OFFICIALS
RESERVE
Alan Greenspan, Chairman, Board of Governors, presents the Federal Reserve's semiannual
report on monetary policy and testifies that the
slowdown in the economy that began in the
middle of 2000 intensified, perhaps even to the
point of growth stalling out around the turn of
the year; against this background, the Federal
Open Market Committee reduced its targeted
federal funds rate Vi percentage point on two
occasions, to its current level of 5VI percent. He
testifies further that the members of the Board
of Governors and the Reserve Bank presidents
213 Chairman Greenspan presents the second testimony on the Board's monetary policy report and
states that although the sources of long-term
strength of our economy remain in place,
excesses built up in 1999 and early 2000 have
engendered a retrenchment that has yet to run its
full course. He testifies further that the retrenchment has been prompt, in part because new
technologies have enabled businesses to respond
more rapidly to emerging excesses, and that the
Federal Reserve has quickened the pace of
adjustment of its policy (Testimony before the
House Committee on Financial Services, February 28, 2001).
217
ANNOUNCEMENTS
Statement by Chairman Greenspan on the
renomination of Vice Chairman Ferguson to the
Board of Governors.
Statement by Vice Chairman Ferguson on his
renomination.
Amendments to Regulation E regarding disclosure of ATM fees.
Availability of Spanish-language consumer
resources on the Board's public web site.
Changes in Board staff.
Revisions to the money stock data.
224 MINUTES OF THE MEETING OF THE
FEDERAL OPEN MARKET
COMMITTEE
HELD ON DECEMBER 19, 2000
At this meeting, the Committee voted to maintain the existing stance of monetary policy,
keeping its target for the federal funds rate
at 6V2 percent. The Committee members also
agreed that the risks were weighted mainly
toward conditions that could generate economic
weakness in the foreseeable future.
231 LEGAL
DEVELOPMENTS
Various bank holding company, bank service
corporation, and bank merger orders; and pending cases.
A1 FINANCIAL AND BUSINESS STATISTICS
These tables reflect data available as of
February 26, 2001.
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
A70 FEDERAL RESERVE BOARD PUBLICATIONS
All MAPS OF THE FEDERAL RESERVE SYSTEM
A3 GUIDE TO TABULAR
PRESENTATION
A4 Domestic Financial Statistics
A42 Domestic Nonfinancial Statistics
A50 International Statistics
A74 FEDERAL RESERVE BANKS, BRANCHES,
AND OFFICES
PUBLICATIONS COMMITTEE
Lynn S. Fox, Chair • Jennifer J. Johnson • Karen H. Johnson • Donald L. Kohn • Stephen R. Malphrus
• J. Virgil Mattingly, Jr. • Dolores S. Smith • Richard Spillenkothen • Richard C. Stevens • David J. Stockton
The Federal Reserve Bulletin is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed
except in official statements and signed articles. It is assisted by the Economic Editing Section headed by S. Ellen Dykes, the Graphics Center under the direction
of Christine S. Griffith, and Publications Services supervised by Linda C. Kyles.
Financial Services Used by Small Businesses:
Evidence from the 1998 Survey
of Small Business Finances
Marianne P. Bitler, Alicia M. Robb, and John D.
Wolken, of the Board's Division of Research and
Statistics, prepared this article. Courtney Carter,
Doug Rohde, and Emily Rosenberg provided research
assistance.
Small businesses—firms having fewer than 500
employees—are an integral part of the U.S. economy.
They account for about half of private-sector output,
employ more than half of private-sector workers, and
provide about three-fourths of net new jobs each
year.1
Newly available data from the Survey of Small
Business Finances provide a detailed look at these
firms—their characteristics and their use of credit and
other financial services. The survey is the most
comprehensive source of such information; no other
source provides the breadth and detail of information for a nationally representative sample of small
businesses.
Since the first small business survey in 1987, the
financial landscape in which these firms operate has
changed markedly. Restrictions on interstate branching and banking have been relaxed, and certain financial institutions are now permitted to offer a wider
range of financial services. Technological innovations (such as the use of small-business credit-scoring
models) and structural changes in the financial services industry (such as consolidation of banking and
thrift institutions) have also contributed to the alteration. By comparing the newest survey data with
results from earlier surveys in 1987 and 1993, policymakers and researchers will be able to assess the
effects these marketwide changes may have had on
the use of financial services by small businesses and
on the competitive financial environment in which
they operate.2
1. U.S. Small Business Administration, Office of Advocacy, Small
Business FAQ, December 2000. For more information on small businesses' role in the economy, see U.S. Small Business Administration,
Office of Advocacy, 1998 State of Small Business, chap. 2 (http://
www.sba.gov/advo/stats/).
2. The earlier surveys were called National Surveys of Small
Business Finances. For more information about the 1987 survey, see
The latest survey gathered data for fiscal year 1998
from 3,561 firms selected to be representative of
small businesses operating in the United States in
December 1998.3 The data show that in 1998, as
in 1987 and 1993, most small businesses were very
small (nearly two-thirds had fewer than five employees) and most (nearly four-fifths) were located in
urban areas.4 Ownership characteristics had changed
somewhat since 1993—nearly 15 percent were
owned by minorities (up from nearly 12 percent in
1993), and more than 24 percent were owned by
women (up from nearly 21 percent in 1993).
Commercial banks continued to be the supplier
most commonly used by small businesses for financial services other than leasing, brokerage services,
and trust and pension services. Finance companies
and leasing companies were also important suppliers
of credit and financial management services, especially for the largest firms. The likelihood of using a
service increased with firm size, as did the likelihood
of using each type of supplier except thrifts and
family and individuals.
In the 1998 survey, 55 percent of small businesses
reported outstanding loans, capital leases, or lines of
credit at year-end, compared with 59 percent in the
1993 survey. Credit use increased strongly with firm
size: About 33 percent of the smallest firms had
outstanding loans, capital leases, or lines of credit,
compared with about 92 percent of the largest firms.
Gregory E. Elliehausen and John D. Wolken, "Banking Markets
and the Use of Financial Services by Small and Medium-Sized
Businesses," Federal Reserve Bulletin, vol. 76 (October 1990),
pp. 801-17. For more information about the 1993 survey, see Rebel A.
Cole and John D. Wolken, "Financial Services Used by Small Businesses: Evidence from the 1993 National Survey of Small Business
Finances," Federal Reserve Bulletin, vol. 81 (July 1995), pp. 629-67.
For more information on the earlier surveys, see the Board's public
web site (http://www.federalreserve.gov/pubs/oss/oss3/nssbftoc.htm).
3. Firms whose fiscal years ended between July 1 and December 31, 1998, reported data for fiscal year 1998; otherwise, firms
reported data for fiscal year 1999. For simplicity, results from the
1998 survey are referred to in this article as 1998 data.
4. The data cited in this article are weighted to adjust for differences in sampling and response rates. They reflect population rather
than sample measures. For further information on the survey process,
see the appendix.
184
Federal Reserve Bulletin • April 2001
Although the percentage of small businesses with
outstanding loans, capital leases, or lines of credit
was about the same in 1998 as in 1993, the types of
credit used changed somewhat over the intervening
period: The percentage that had outstanding vehicle
loans, equipment loans, trade credit, and other loans
declined somewhat, whereas the percentage that had
outstanding mortgages or used personal and business
credit cards for business purposes increased.
The 1998 data are still being edited and are therefore subject to revision. However, the descriptive
findings reported here are likely to be robust.5 Once
the data are final, the database will allow for rigorous
analysis that takes into account characteristics of
the businesses, their owners, and existing markets.
Researchers will be able to study many aspects of
small business finance, including, for example, how
the proximity of financial institutions affects the mix
of financial products the firm uses, which firm and
owner characteristics affect the ability of small businesses to obtain credit, and how lending patterns vary
with these characteristics.6
ECONOMIC AND FINANCIAL
ENVIRONMENT
SERVICES
The financial services industry and the economic
climate were considerably different in 1998 than
in 1993. Over the period between the surveys, the
intense consolidation activity that had begun early in
the decade reduced the number of financial institutions operating in the United States more than 20 percent.7 Indeed, three of the largest bank consolidations
to that point—BankAmerica and NationsBank, Wells
Fargo and Norwest, and Banc One and First Chicago
NBD—occurred in 1998. Cross-industry merger
activity was also strong over the period as the traditional boundaries between three important types of
firms that make up the financial services industry—
depository institutions, securities firms, and insurance companies—continued to erode. A notable
5. The remaining data editing work primarily involves imputing
missing values. Because the discussion in this article is based on
questions that were answered by the vast majority of respondents, the
statistics presented here, although based on preliminary data, will not
differ much from those based on final data. The differences reported in
this article are based only on the descriptive statistics presented.
Standard errors for the differences have not yet been calculated, so it
is uncertain whether the differences are statistically significant.
6. A final data set will be available to the public through the
Board's public web site by summer 2001 (http://www.federalreserve.
gov/pubs/oss/oss3/nssbftoc.htm).
7. The number of commercial banks and thrifts operating in the
United States declined from 13,090 in 1993 to 10,305 in 1998.
1.
M o s t important p r o b l e m f a c i n g small b u s i n e s s e s in 1 9 9 8 ,
distributed b y s i z e o f b u s i n e s s
Percent
Number of employees1
Problem
Competition (from larger,
international, or Internet
companies)
Quality of labor
Cost or availability of labor
Financing and interest rates
Government regulations and
red tape
Taxes
Other
9 or fewer
10-49
50-499
11.0
10.1
3.2
7.6
6.9
12.5
24.3
6.5
6.4
6.4
12.3
25.2
12.6
7.3
3.7
6.9
7.2
47.1
5.9
5.8
32.2
8.0
3.3
27.6
NOTE. In this and subsequent tables, unless otherwise noted, the data are
weighted to adjust for differences in sampling and response rates; the weighted
data reflect population rather than sample measures. See the appendix for more
information.
Also in this and subsequent tables, distributions may not sum to 100 percent
because of rounding or because, in a few cases, values for some variables are
missing.
1. Sum of number of owners working in the business and number of
employees (full- and part-time) working in the business.
example was the 1998 merger between Citicorp, a
bank holding company, and Travelers, an insurance
and securities firm.8
In 1998, the economy was in the seventh year of a
sustained economic expansion. Unemployment was
just under 5 percent, the consumer price index (CPI)
rose 1.6 percent, the gross domestic product (GDP)
grew 4.4 percent, and productivity in the business
sector increased 2.7 percent. In 1993, the economy
was in the early stages of an expansion following two
years of recession; unemployment was nearly 7 percent, the CPI and GDP each increased 2.7 percent,
and business-sector productivity grew just one-half
of 1 percent.9
According to the 1998 survey, labor issues (the
quality, cost, and availability of labor) were the greatest concern for small businesses, particularly among
the largest firms (table 1). Another commonly mentioned concern was competition from larger, international, or Internet firms. Other important problems—
although mentioned less often—were financing and
8. The diminishing separation among these three types of firms
culminated in passage in 1999 of the Financial Services Modernization Act, which removed most of the remaining barriers. See
Group of Ten, "Report on Consolidation in the Financial Sector"
(Paris: Organisation for Economic Co-operation and Development,
January 2001) (http://www.oecd.org/eco/Group-of-Ten/report-onconsolidation.htm).
9. Economic conditions in 1998 were much more similar to those
faced by the businesses surveyed in 1987, when the economy was
well into the 1 9 8 2 - 9 0 expansion. Council of Economic Advisors,
Economic Report of the President, January 2001 (http://w3.access.gpo.
gov/eop).
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances
interest rates, government regulations, taxes, and
poor sales.
The primary concerns of small businesses were
markedly different in 1993.10 In that survey, health
care and health insurance were cited most often,
followed by general U.S. business conditions—two
issues that received much less attention in 1998. The
other problems mentioned most frequently in 1993
were financing and interest rates; profits, cash flow,
expansion, and sales; and taxes.
CHARACTERISTICS OF SMALL BUSINESSES
Along with information on the availability and use of
credit and other financial services by small businesses, the 1998 Survey of Small Business Finances
collected information on firm characteristics, including number of employees; number of owners; organizational form; location; use of computers; standard
industrial classification; credit history; sex, race, and
ethnicity of the owner(s) with the majority share of
the firm; and income and balance sheet data.11 Also
collected was information on each firm's primary
owner (defined as the owner with the largest ownership share if the firm had more than one owner),
including age, education, experience in business,
ownership share, credit history, personal net worth,
home ownership, and home equity.
Business size is measured in three ways: number of
employees, fiscal year sales, and year-end assets. In
terms of employment, most small businesses in 1998
were very small: About 64 percent had fewer than
five employees, and just over 83 percent had fewer
than ten employees (table 2).12 In terms of sales and
assets, the businesses were similarly small: About
40 percent had fiscal year sales of less than $100,000,
and just over 61 percent had year-end assets of less
than $100,000. This general pattern is similar to
findings from the 1993 survey.
10. The questions were worded slightly differently. The 1998 survey asked, "What is the single most important problem facing your
business today?" and the 1993 survey asked, "What do you think will
be the most important issue affecting your firm over the next twelve
months?"
11. An important objective of the survey was to provide data to
examine credit access by different firm and owner characteristics,
including race and ethnicity. Because minority-owned businesses
constitute a small proportion of the population of small businesses,
the sample was designed to overrepresent minority-owned firms. As
a result, the sample included sufficient numbers of observations to
permit comparisons between minority-owned and other types of small
businesses. For details, see the appendix.
12. Number of employees includes owners working in the business
and both full- and part-time employees.
185
A business may organize as a corporation (S-type
or C-type), a partnership, or a sole proprietorship.13
In 1998, the most common organizational form for
small businesses was the sole proprietorship, accounting for nearly 50 percent of the firms. About 24 percent were organized as S corporations, about 20 percent as C corporations, and only 7 percent as
partnerships.
The primary activity of 43 percent of the businesses (as classified according to the standard industrial classification (SIC) system used by the U.S.
government) was business or professional services.
An additional 19 percent were in retail trade.
Just over 22 percent of the firms had been in
business under at least one of the current owners for
less than five years (firm age less than five years), and
another 23 percent had been in business five to nine
years. More than 22 percent had been in business
twenty years or more. Average firm age (not shown
in the table) was 13.3 years, slightly less than the
average firm age in 1993 of 14.5 years.
The firms were dispersed across the country, with
nearly 19 percent located in the Northeast, about
27 percent in the West, almost 22 percent in the
Midwest, and nearly 33 percent in the South. The
vast majority (nearly 80 percent) had their main
offices in urban areas, and the primary sales area for
nearly all firms (more than 95 percent) was the United
States.
Race, Ethnicity, and Sex of Majority
Owners
A firm was classified as being owned by individuals
of a specific race, ethnic group, or sex if more than
13. The organizational forms have different rules about liability
and taxes. Sole proprietors receive all the income from the business
and bear full liability for its obligations. Partnerships have more than
one owner; like sole proprietors, the owners receive all the income
from the business and, in general, are fully liable for its obligations.
Corporations are separate legal entities, and the owners' liability is
limited to the amount of their original equity investment. The primary
difference between the two types of corporations is how they are
taxed: S corporations are not subject to corporate income tax, whereas
C corporations are. S corporations are legally constrained to have
more than seventy-five shareholders, are restricted to one class of
stock, and must pass all firm income to the owners at the end of each
fiscal year. During the 1990s, two other organizational forms gained
legal status in many states: the limited liability corporation (LLC) and
the limited liability partnership (LLP). LLCs have many characteristics of partnerships but have the limited liability of corporations; LLPs
are partnerships in which an investor's liability is limited to his or her
initial investment. LLCs may file taxes as a partnership, a corporation,
or a sole proprietorship; LLPs may file taxes as a partnership or a
corporation. For this survey, LLCs and LLPs were classified according to how they chose to file their taxes. The 1998 data imply that in
the survey universe, 0.2 percent of the firms were LLCs and 1.8 percent were LLPs at year-end 1998.
186
2.
Federal Reserve Bulletin • April 2001
N u m b e r and proportion o f p o p u l a t i o n o f small b u s i n e s s e s
2.—Continued
in s u r v e y s a m p l e , distributed b y s e l e c t e d c a t e g o r y o f firm,
1998
Category
AH firms
MEMO:
1993 M
Number
in
sample1
Percentage
of
population
3,561
100.00
100.00
607
1,173
584
281
366
284
261
21.86
41.78
19.78
8.39
5.47
1.55
1.17
18.18
38.75
22.89
10.74
6.16
2.14
1.14
478
271
419
598
399
329
361
232
175
292
16.34
9.48
14.22
21.72
13.29
10.27
7.83
3.28
1.56
1.79
percentage
of
«
population 2
Census region of main office
Northeast
New England
Middle Atlantic
3
Number of employees
O-I
2-4
5 9
10-19
20-49
50-99
100-499
IFFREN'
1
Fiscal year sales
(thousands of dollars)
Less than 25
VJ!
25-49
50-99 IS
100-249
250-499
500-999
1,000-2,499
2,500-4,999
5,000-9,999
10,000 or more
End-ofyear assets
(thousands of dollars)
Less than 25
25-49
50-99
100-249
250-499
500-999
1,000-2,499
2,500-4,999
v..J
5,000 or more
Organizational form
Proprietorship
Partnership
S corporation
P corporation
Standard industrial classification
Construction and mining (10-19) .
Primary manufacturing (20-29) . . .
Other manufacturing (30-39)
Transportation (40-49)
Wholesale trade (50-51)
Retail trade (52-59)
Insurance agents and real estate
(60-69)
Business services (70-79)
1 Professional services (80-89)
1,007
360
413
498
302
253
279
159
257
G
10.94
8.50
12.52
24.68
15.72
11.85
8.36
3.56
1.96
1.91
34.72
12.57
13.94
15.86
8.74
5.99
4.22
1.54
1.51
49.35
6.95
23.87
19.83
43.22
8.01
20.33
28.44
376
172
217
144
247
704
11.87
3.66
4.68
3.72
7.15
18.95
14.18
3.90
4.16
2.77
8.46
21.70
213
832
650
6.48
24.83
18.46
7.09
21.15
16.59
25 or more
730
745
683
486
331
579
22.37
22.79
19.14
13.05
8.72
13.75
8
J?
14.74
28.46
19.16
14.40
8.68
14.55
1. Numbers are unweighted. For some categories, numbers in sample do not
sum to the sample total because some firms responded "Do not know" or
declined to respond.
2. The percentages reported here are final data and may differ slightly from
the preliminary data for 1993 reported in Cole and Wolken, "Financial Services
Used by Small Businesses," 1995.
50 percent of the firm was owned by such individuals. About 15 percent of small businesses in 1998
were minority-owned (that is, owned by nonwhite or
Hispanic individuals), compared with about 12 per
MEMO:
1993
percentage
of
population 2
595
155
440
18.90
5.21
13.69
22.31
6.94
15.37
East North Central
West North Central
770
485
285
21.80
14.56
7.24
24.13
15.96
8.17
South
South Atlantic
East South Central
West South Central
1,225
641
202
382
32.71
16.88
5.47
10.35
29.48
14.84
4.55
10.09
971
238
733
26.59
6.63
19.96
24.08
5.81
18.27
2,782
779
79.91
20.09
78.88
21.12
Three or more
2,839
379
341
87.75
8.55
3.63
84.35
10.73
4.92
Sales area
Primarily within U.S
International or global
3,355
204
95.43
4.51
Owners' participation
Owner management
Hired management
3,188
369
92.33
7.52
86.00
14.00
Race, ethnicity, and sex
of majority owners
Nonwhite or Hispanic
Non-Hispanic white
756
2,790
14.60
84.88
11.62
88.38
3,033
273
214
90.12
4.12
4.38
92.52
2.91
3.44
West
Mountain
Pacific
Years under current ownership
0-4
5-9
10-14
15-19
20-24
Percentage
of
population
1
29.24
13.96
14.30
17.63
10.45
6.35
4.61
1.80
1.66
1,429
226
1,019
887
Category
Number
in
sample'
Urbanization at main office
Rural
Number of offices
One
White
Black
Asian or Pacific Islander
American Indian or
Alaska Native
Non-Hispanic
Male
Ownership equally divided
by sex
24
0.81
1.13
260
3,292
5.59
94.10
4.27
95.73
796
2,609
24.32
71.88
20.61
73.92
147
3.67
5.47
3. Number of owners working in the business plus number of full- and
part-time employees. For the 1993 and 1987 surveys, the number of employees
was calculated as the sum of owners working in the business plus full-time
employees plus one-half of part-time employees; in the 1998 survey, no differentiation was made between full- and part-time employees. To make the data for
1998 and 1993 comparable, the 1993 numbers have been recalculated as the
sum of owners working in the business, full-time employees, and part-time
employees; therefore, the numbers presented here differ from those reported in
Cole and Wolken, "Financial Services Used by Small Businesses," 1995.
. . . Question not asked in 1993.
cent in 1993. Between 1993 and 1998, the proportion
of black-owned firms increased from about 3 percent
to about 4 percent. Over the same period, the proportion of Hispanic-owned firms increased from 4 percent to 6 percent and the proportion of Asian-owned
firms, from 3 percent to 4 percent. Ownership by
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances
3.
187
P e r c e n t a g e o f s m a l l b u s i n e s s e s that u s e d c o m p u t e r s , b y s e l e c t e d c a t e g o r y o f firm, 1 9 9 8
1. See table 1, note 1.
American Indians or Alaska Natives remained at
about 1 percent.14
The proportion of firms that were more than
50 percent owned by men declined somewhat, from
about 74 percent in 1993 to about 72 percent in 1998,
and the proportion that were more than 50 percent
owned by women rose from about 21 percent to
about 24 percent. The proportion equally owned by
men and women fell nearly 2 percentage points, to
4 percent.
The survey data suggest that female- and minorityowned firms share some characteristics that distinguish them from male- and white-owned firms
(table A.l). By all three measures of size, femaleand minority-owned firms appear to be smaller than
male- and white-owned firms. They also appear to be
younger, more likely to be sole proprietorships, and
less likely to be corporations. These differences are
similar to the findings in 1993. The differences in
organizational type may simply reflect that minorityowned and female-owned firms tend to be younger
and smaller than non-minority-owned and maleowned firms—and younger and smaller firms are
14. By U.S. government convention, race and ethnicity are separate
categories. Thus, firm owners can be Hispanic (or non-Hispanic) and
of any race. The 1998 survey asked about Hispanic ethnicity and race
in two separate questions. Firms were asked if the owner (for singleowner firms) or owners of more than 50 percent of the firm (for
multi-owner firms) were of Hispanic, Latino, or Spanish descent.
Firms answering "yes" were classified as Hispanic-owned. Firms
were then asked to specify the race of the owner (for single-owner
firms) or the races(s) of the owner(s) of more than 50 percent of the
firm (for multi-owner firms) from the following list: white; black;
Asian, including Native Hawaiian or other Pacific Islander; and
American Indian or Alaska Native. In this article, the category
minority-owned indicates ownership by individuals who are nonwhite
or Hispanic or both. The few firms reporting that their ownership
shares were equally split between minority and non-minority individuals were classified as non-minority-owned.
2. Firms were given a list of tasks and asked to check all that applied.
more likely to organize as sole proprietorships or
partnerships rather than as corporations.
Computer Use within the Firm
More than three-fourths of the firms used computers
in their businesses in 1998 (table 3) (this question
was not asked in the earlier surveys). Use varied
somewhat by size, with larger firms being more likely
than smaller firms to use computers. For example,
89 percent of firms with more than four employees
used computers for business purposes, compared with
71 percent of firms with four or fewer employees.
Similarly, 86 percent of firms with sales of $100,000
or more used computers, compared with 63 percent
with sales of less than $100,000. Firms used computers for a variety of purposes: 59 percent used them
to access the Internet; about 15 percent for banking;
and about 74 percent for inventory management or
bookkeeping.
TYPES OF FINANCIAL SERVICES
USED BY SMALL BUSINESSES
Businesses were asked which of thirteen financial
services they used at up to twenty different institutions.15 The services can be grouped into several
categories: liquid asset services (business checking
15. For this article, use of a financial service was measured by the
percentage of small businesses that used a specific type or source of
service. Data on use based on dollar amounts or numbers of accounts
will be available at a later date. However, previous analysis has shown
that conclusions based on dollar amounts, or on number of accounts,
are usually qualitatively very similar to conclusions based on the
188
Federal Reserve Bulletin • April 2001
or savings accounts); credit lines, loans, and capital
leases (lines of credit, mortgages, motor vehicle
loans, equipment loans, capital leases, and "other"
loans); and financial management services (transaction, cash-management, credit-related, brokerage, and
trust and pension services). Owner loans, credit cards,
and trade credit are discussed separately and are not
included in the tabulations for "any financial service," as no information was collected about the
providers of these financial services.
Any Financial Service
Nearly all small businesses (about 96 percent) used
at least one financial service in 1998, essentially the
same finding (97 percent) as in 1993 (table 4). In
general, use increased with firm size, and almost all
firms with five or more employees, or with sales or
assets of at least $250,000, used some financial service during the year. About 9 percent of firms with
fewer than two employees used no financial service
in 1998.
Proprietorships and partnerships were less likely
than corporations to use a financial service. The
difference may be due to the tendency of many
proprietorships and some partnerships to commingle
business and personal finances; for example, the owners may use personal savings and checking accounts
for business purposes.16 Also, young firms (less than
five years old), firms with single offices, and black-,
Hispanic-, and female-owned firms were less likely
than other firms to use a financial service.
Checking and Savings
Most small businesses (94 percent) had a checking
account at the end of 1998, the same percentage as
used any liquid asset account (checking or savings).17
percentages of firms using one or more service or source. See Rebel A.
Cole, John D. Wolken, and R. Louise Woodburn, "Bank and Nonbank
Competition for Small Business Credit: Evidence from the 1987 and
1993 National Surveys of Small Business Finances," Federal Reserve
Bulletin, vol. 82 (November 1996), pp. 983-95.
16. Respondents were asked to count as a business service any
personal account that was used at least 50 percent of the time for
business purposes. Most of the firms that reported using no financial
service were extremely small, and it is possible that those firms'
owners used personal accounts for business purposes, but did so less
than 50 percent of the time.
17. Checking accounts were defined as accounts with unlimited
check-writing privileges, including share draft accounts; money market accounts, including money market deposit accounts, were considered checking accounts only if they offered unlimited check-writing
privileges. Savings accounts were defined as passbook savings, credit
union share accounts, certificates of deposits, and other time deposits;
Because a checking account, including a share draft
account, is a vehicle for paying suppliers and depositing sales receipts, it is not surprising that the reported
use of "any service" (96 percent) nearly matches the
reported use of "any liquid asset account." The data
on business savings accounts, however, reveal some
interesting differences across firms. Having such an
account was highly correlated with firm size. For
example, about one-fifth of firms with fewer than ten
employees had a business savings account at the end
of 1998, compared with more than one-third of firms
with ten or more employees. White-owned firms were
the most likely to have a business savings account,
followed by Hispanic- and Asian-owned firms; blackowned firms were the least likely to have a business
savings account. Female-owned firms were more
likely than male-owned firms to have such an
account. Having such an account varied little by
industry.
Credit Lines, Loans, and Capital Leases
Overall, the incidence of credit lines, outstanding
loans, and outstanding capital leases declined
between year-end 1993 and year-end 1998 (from
59 percent of firms to 55 percent). Declines were
recorded for vehicle loans (which fell from 25 percent to 21 percent), equipment loans (15 percent to
10 percent), and "other" loans (13 percent to 10 percent).18 Capital leases were about as common in 1998
as in 1993, and the incidence of credit lines and
mortgages increased.
The slight increase in the percentage of firms with
lines of credit (28 percent in 1998 compared with
26 percent in 1993) may have been the result of an
increase in commercial banks' use of credit-scoring
models. Alternatively, the increase may have been
due to differences in the economic environment; as
noted earlier, in 1993 the economy was in the early
stages of an expansion following a period during
also considered savings accounts were money market accounts that
were limited in either the number or the amount of checks that could
be written. In comparison with small businesses, 91.5 percent of
households had some type of transaction account (checking account,
saving account, money market deposit account, money market mutual
fund, or call account at a brokerage) in 1998, according to the 1998
Survey of Consumer Finances. For more information, see Arthur B.
Kennickell, Martha Starr-McCluer, and Brian J. Surette, "Recent
Changes in U.S. Family Finances: Results from the 1998 Survey
of Consumer Finances," Federal Reserve Bulletin, vol. 86 (January
2000), pp. 1-29.
18. "Other" loans are any loans that could not be classified as
credit lines, capital leases, mortgages used for commercial purposes,
motor vehicle loans, or equipment loans (generally, unsecured term
loans).
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances
which a drop in commercial real estate values erased
equity against which many firms might have borrowed. The greater reliance on mortgages in 1998
(13 percent compared with 8 percent in 1993) may
reflect recovery of the commercial real estate market.
As with checking and savings accounts, the incidence of credit lines, loans, and capital leases
increased with firm size: More than 90 percent of the
largest firms (100-499 employees) had one of these
types of credit at the end of 1998, compared with
fewer than 50 percent of very small firms (fewer than
five employees). Corporations were more likely than
other types of firms to have credit lines, loans, and
capital leases. Firms in the services industries (business and professional) were generally less likely than
firms in other industries to have these types of credit,
perhaps because they require less inventory and
equipment.
The incidence of credit also varied somewhat with
firm age. The percentage of firms that had credit
lines, loans, or leases was smallest for those that
were less than five years old (51 percent), followed
by those that were more than twenty-five years old
(53 percent). The finding for the youngest firms is
consistent with the observation that depository institutions typically require that borrowers have several
years of financial history to qualify for credit.
The incidence of credit lines, loans, and capital
leases also varied somewhat with owner characteristics. At year-end 1998, fewer than 50 percent of
female-, black-, and Asian-owned firms had one of
these forms of credit, compared with roughly 55 percent of male- and white-owned firms. By specific
loan type, white-owned firms were generally more
likely than nonwhite-, Hispanic-, or female-owned
firms to have lines of credit, mortgages, vehicle loans,
and equipment loans. Black-owned firms were the
most likely to have capital leases and "other" loans.
Some of the differences by owner race, ethnicity, and
sex may be attributable to differences in firm characteristics, such as size. Attribution of these univariate
differences to owner race, firm size or age, or other
variables is a topic for additional research.19
Financial Management
services, trust and pension services, and brokerage
services.20 Fifty percent of small businesses used at
least one financial management service in 1998, compared with 37 percent in 1993. They were more likely
to use transaction and trust services in 1998, compared with 1993, and equally likely to use cashmanagement and brokerage services. The incidence
of credit-related services fell from about 5 percent of
firms in 1993 to only 3 percent in 1998, a decline
consistent with the overall decline in the incidence
of credit lines, loans, and capital leases described
earlier.
The most widely used financial management service in 1998, reported by about two-fifths of all firms,
was transaction services. Trust and pension services
were used by only about one in eight firms, and
cash-management services by only one in twenty. As
was the case for other financial services, the use of
financial management services increased with firm
size. For the smallest firms (as measured by number
of employees), only 34 percent used at least one
financial management service, and only a very small
percentage used any financial management service
other than transaction services. In contrast, about
85 percent of the largest firms used at least one
financial management service; the most commonly
used was transaction services, followed by cashmanagement services and trust and pension services.
Brokerage services were used mainly by the larger
firms, but by only about one in twelve.
A smaller proportion of proprietorships used financial management services relative to firms with other
organizational forms; they may have less need for
these services because they tend to be small and more
likely than other types of firms to commingle personal and business accounts.
Firms differed in their use of financial management
services by the minority status of and, to a somewhat
lesser extent, by the sex of the majority owners.
Black-, Hispanic-, and female-owned firms were less
likely than white-, non-Hispanic-, and male-owned
firms to use such services. Asian-owned firms were
the most likely to do so (more than two-thirds used at
least one financial management service in 1998). The
differences were due largely to differences in the use
Services
Financial management services include transaction
services, cash-management services, credit-related
19. For research on this topic using multivariate analysis, see, for
example, Ken S. Cavalluzzo, Linda C. Cavalluzzo, and John D.
Wolken, "Competition, Small Business Financing, and Discrimination: Evidence from a New Survey," Journal of Business
(forthcoming).
189
20. Transaction services cover the provision of paper money and
coins, the processing of credit card receipts, the collection of night
deposits, and wire transfers. Cash-management services include the
provision of sweep accounts, zero-balance accounts, lockbox services,
and other services designed to automatically invest liquid funds
in liquid, interest-bearing assets. Credit-related
services are the
provision of bankers acceptances, letters of credit, sales finance,
and factoring. Trust and pension services consist of the provision
of 401(k) plans, pension funds, business trusts, and securities
safekeeping.
190
4.
Federal Reserve Bulletin • April 2001
P e r c e n t a g e o f small b u s i n e s s e s using s e l e c t e d financial s e r v i c e s , by s e l e c t e d c a t e g o r y o f firm, 1 9 9 8
A. Any service; liquid asset accounts; and credit lines, loans, and capital leases
Liquid asset accounts 2
Category
Any
service1
Credit lines, loans, and capital leases
Any
Checking
Savings
Any
Credit
line
Mortgage
Vehicle
Equipment
Capital
lease
Other 3
96.18
97.03
94.43
96.21
94.04
95.81
22.20
24.35
55.09
59.13
27.71
25.71
13.29
7.83
20.55
25.28
10.18
14.84
10.59
10.25
9.92
12.74
Number of employees*
0-1
2-4
5-9
10-19
20-49
50-99
100-499
91.02
95.86
99.37
100.00
100.00
100.00
100.00
86.41
94.34
99.05
99.86
100.00
97.77
100.00
85.33
94.10
98.79
99.86
100.00
97.77
100.00
16.37
19.45
23.38
35.86
36.01
30.07
36.87
32.79
49.80
68.53
78.01
83.84
86.87
92.04
13.42
20.83
34.08
50.59
59.07
62.67
74.81
6.55
12.45
16.21
19.89
21.10
26.25
18.84
12.80
16.89
26.92
32.63
31.98
34.47
29.85
3.77
8.25
14.52
13.97
22.96
20.25
24.69
3.29
7.42
14.26
23.19
21.71
31.75
27.71
5.82
9.35
9.19
14.67
20.14
20.86
22.81
Fiscal year sales
(thousands of dollars)
Less than 25
25-49
50-99
100-249
250-499
500-999
1,000-2,499
2,500-4,999
5,000-9,999
10,000 or more
82.99
94.77
97.97
99.34
99.82
99.57
100.00
100.00
100.00
100.00
76.62
91.64
97.07
98.29
99.75
99.57
100.00
99.03
99.09
100.00
74.96
91.12
96.96
98.29
99.75
99.07
100.00
99.03
99.09
100.00
11.84
17.12
18.10
19.06
23.36
30.26
37.58
45.48
37.56
36.71
26.76
33.47
45.94
56.25
67.09
74.02
78.34
94.59
88.68
88.95
9.11
11.25
15.20
22.48
36.82
41.74
51.48
68.80
75.74
81.36
7.93
7.65
9.69
14.70
13.04
18.64
21.15
22.65
16.52
18.87
5.80
14.92
14.02
19.98
25.89
30.49
37.15
37.26
37.91
30.22
2.37*
3.70*
5.76
11.50
12.00
16.45
16.30
23.68
20.26
25.40
2.82*
2.36*
7.73
11.31
11.29
19.81
17.81
18.60
24.77
23.67
6.41
3.36*
8.96
10.29
11.31
10.44
17.79
12.40
22.35
17.62
End-of-year assets
(thousands of dollars)
Less than 25
25-49
50-99
100-249
250-499
500-999
1,000-2,499
2,500-4,999
5,000 or more
89.87
98.65
99.68
99.46
100.00
100.00
100.00
100.00
100.00
86.55
96.81
99.31
98.40
100.00
99.40
98.79
100.00
100.00
85.77
96.69
98.96
98.40
99.41
99.40
98.79
10Q.00
100.00
12.24
19.57
20.53
28.81
33.64
36.44
36.02
37.45
45.29
32.64
49.60
60.06
67.85
71.65
88.54
81.15
93.09
95.66
11.35
22.83
25.25
34.61
40.97
56.01
55.84
81.32
76.01
6.28
6.79
10.05
17.46
22.65
33.86
25.03
26.18
31.16
10.47
19.63
21.80
2642
28.90
33.70
33.48
31.71
38.77
4.77
6.27
9.70
15.55
12.41
18.32
20.69
20.78
30.75
5.23
8.21
10.30
12.67
13.97
21.23
18.87
34.42
22.26
5.00
643
12.26
13.50
11.57
19.72
13.65
17.00
17.22
Organizational form
Proprietorship
Partnership
S corporation
C corporation
93.16
95.37
99.85
99.58
89.94
95.24
99.56
99.15
89.16
95.24
99.56
99.15
18.23
18.75
24.68
30.33
45.66
61.18
65.00
64.50
18.51
27.69
37.89
38.35
12.44
19.07
13.91
12.65
16.11
19.43
25.32
26.23
7.13
13.10
12.41
14.05
6.52
12.92
14.75
14.90
8.20
9.54
11.53
12.38
97.11
95.49
94.15
98.60
99.12
96.84
96.13
92.87
91.98
98.23
96.71
95.85
96.04
92.87
91.98
98.23
96.71
95.75
20.63
19.79
23.79
23.56
21.36
18.45
66.76
56.49
60.15
62.13
64.28
54.11
31.98
32.10
35.87
29.70
47.26
25.19
12.07
8.66
6.85
10.85
12.15
17.45
38.15
16.31
1947
28.82
27.85
17.87
11.93
19.82
15.30
14.16
9.81
7.66
8.27
20.05
14.08
14.92
10.47
6.39
10.52
17.36
17.10
12.61
10.47
10.26
96.61
94.48
96.04
96.13
92.41
93.23
96.13
91.18
92.95
25.40
22.82
25.47
59.77
49.53
47.99
26.90
22.41
23.86
24.81
12.12
10.97
16.63
18.16
13.39
11.53
8.85
9.16
9.97
10.60
13.13
8.94
7.73
8.51
94.50
96.05
96.59
98.45
98.03
95.19
93.25
93.61
94.75
96.76
97.23
93.22
92.85
93.34
93.93
96.61
97.23
92.79
15.38
20.87
25.74
26.31
23.07
26.06
51.14
55.79
56.18
58.90
57.86
53.09
19.63
26.87
30.88
33.24
29.51
31.37
11.95
10.91
14.01
16.06
17.43
13.02
18.51
18.08
23.87
22.00
23.73
19.46
10.62
10.48
9.32
12.12
8.95
9.23
8.90
11.95
12.10
11.32
10.93
7.85
11.18
11.14
7.02
12.50
11.33
6.61
All firms, 1998
All firms, 1993
Standard industrial classification
Construction and mining (10-19) . . .
Primary manufacturing (20-29)
Other manufacturing (30-39)
Transportation (40-49)
Wholesale trade (50-51)
Retail trade (52-59)
Insurance agents and
real estate (60-69)
Business services (70-79)
Professional services (80-89)
Years under current ownership
0-4
5-9
10-14
15-19
20-24
25 or more
I
I
For notes, see end of table.
of transaction and trust and pension services, which
in turn were probably related to firm size and industrial classification.
Loans from Owners, Credit Cards,
and Trade Credit
In addition to using credit lines, loans, and leases,
many small businesses obtain financing by borrowing
from the firm's owners (owner loans), borrowing via
credit cards, or borrowing from suppliers of goods
and services (trade credit).
These alternative forms of credit are different from
credit lines, loans, and leases in a number of ways.
For example, owner loans are not arm's-length transactions, as are institutional loans, because the lender
owns some portion of the borrowing firm. The interest rates charged for credit card credit often exceed
the interest rates for other types of loans; moreover,
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances
191
4.—Continued
A.—Continued
Liquid asset accounts 2
Category
Any
service1
Credit lines, loans, and capital leases
Any
Checking
Savings
Any
Credit
line
Mortgage
Vehicle
Equipment
Capital
lease
Other 3
Census region of main office
Northeast
New England
Middle Atlantic
95.81
94.67
96.24
92.85
92.95
92.82
92.22
92.11
92.26
20.36
23.59
19.13
52.57
54.33
51.90
26.10
22.14
27.60
12.90
12.33
13.12
18.21
20.97
17.16
8.39
7.70
8.65
10.99
11.88
10.66
10.42
12.58
9.60
Midwest
East North Central
West North Central
96.48
96.54
96.36
95.04
95.58
93.96
94.64
94.98
93.96
23.47
22.88
24.66
59.19
57.45
62.70
29.19
28.15
31.29
15.48
14.53
17.38
21.74
22.22
20.77
11.52
10.99
12.58
9.45
10.99
6.37
10.70
10.74
10.62
South
South Atlantic
East South Central
West South Central
96.05
96.43
96.51
95.18
94.24
94.12
95.54
93.74
94.02
94.03
95.54
93.19
16.10
14.26
16.69
18.78
54.56
53.90
61.63
51.89
28.82
29.49
34.63
24.64
12.50
11.71
18.09
10.84
21.66
21.69
19.35
22.83
10.59
10.36
15.00
8.61
10.58
10.81
16.31
7.17
8.65
9.13
7.75
8.35
West
Mountain
Pacific
96.37
97.25
96.08
95.29
96.82
94.79
94.88
96.82
94.24
29.98
22.42
32.50
54.16
55.43
53.74
26.27
22.44
27.54
12.75
17.90
11.04
19.86
24.84
18.21
9.85
11.59
9.27
11.25
14.44
10.19
10.47
15.80
8.70
Urbanization at main office
Urban
Rural
96.45
95.12
94.76
93.13
94.34
92.86
22.30
21.82
54.00
59.42
27.81
27.28
11.16
21.76
20.41
21.09
9.57
12.61
10.97
9.07
8.97
13.67
95.68
100.00
99.13
93.75
99.37
99.13
93.37
98.77
99.13
21.10
30.89
28.76
52.74
67.60
81.61
25.43
41.08
51.22
12.65
16.42
21.75
19.74
24.23
30.36
9.09
19.22
15.30
9.78
14.79
19.20
9.28
12.17
20.26
Sales area
Primarily within U.S
International or global
96.10
97.81
94.42
94.60
94.01
94.60
22.19
22.88
55.13
53.46
27.29
36.65
13.60
6.92
20.66
17.09
10.30
7.29
10.45
12.67
9.90
10.04
Owners' participation
Owner management
Hired management
95.93
99.16
94.10
98.40
93.68
98.40
22.16
22.74
53.75
70.60
26.87
37.78
12.72
20.02
19.90
27.81
9.91
13.71
10.24
14.12
9.79
11.59
Race, ethnicity, and sex
of majority owners
Nonwhite or Hispanic
Non-Hispanic white
93.86
96.56
92.02
94.86
91.61
94.48
16.83
23.14
49.45
56.11
20.43
28.96
12.67
13.36
16.83
21.25
7.52
10.69
10.48
10.60
9.23
10.02
White
Black
Asian or Pacific Islander
American Indian or Alaska Native ..
96.37
91.33
97.50
92.67
94.67
88.39
96.20
92.67
94.31
87.24
95.92
92.67
22.95
13.22
17.90
10.71*
55.92
48.24
46.41
51.04*
28.49
18.64
22.54
16.83*
13.34
11.61
11.84
18.89*
20.99
14.56
16.35
32.78*
10.71
6.49
5.01
4.31*
10.52
13.77
8.39
11.89*
9.93
11.45
9.12
3.98*
Hispanic
Non-Hispanic
92.95
96.36
91.33
94.64
91.33
94.23
19.58
22.37
52.74
55.18
20.98
28.02
13.53
13.26
16.30
20.82
10.31
10.20
8.92
10.66
8.82
9.95
Female
Male
Ownership equally divided by sex ..
91.85
97.53
98.34
90.32
95.63
98.02
89.92
95.23
98.02
23.57
21.68
23.15
46.13
57.39
68.42
18.42
30.33
38.40
12.76
12.94
22.63
13.56
22.61
25.90
6.41
11.40
10.37
8.07
11.43
11.16
9.72
9.84
12.99
Number of offices
One
Two
Three or more
credit cards, unlike typical loans, provide a convenient means of paying bills and tracking expenses.
Trade credit is generally used in connection with the
purchase of goods and services from a specific supplier, whereas funds from credit lines, loans, and
leases are often available for general purposes and
are not restricted to purchases from a single supplier.
Also, when outstanding trade credit balances are not
repaid in a relatively short period, the finance charges
generally exceed those on other loans.
Loans from Owners
Of the small businesses that could have received
loans from owners (that is, those that were organized
as corporations or partnerships), 28 percent had such
loans in 1998, a slightly smaller percentage than in
1993.
Because they generally have fewer credit options,
smaller firms might seem more likely than larger
firms to borrow from their owners. This was not the
case in 1998. The incidence of owner loans did not
generally vary with firm size. For every size group
except firms with fewer than two employees, sales of
less than $50,000, or assets of less than $25,000,
more than 25 percent of firms had owner loans at
year-end 1998. For the smallest firms (by number of
employees), fewer than 18 percent had owner loans.
The information gathered by the survey regarding
size, capitalization, equity injections, and owner loans
will enable researchers to examine why the smallest
firms had the lowest incidence of this type of loan.
192
4.
Federal Reserve Bulletin • April 2001
P e r c e n t a g e o f s m a l l b u s i n e s s e s u s i n g s e l e c t e d financial s e r v i c e s , b y s e l e c t e d c a t e g o r y o f firm, 1 9 9 8 — C o n t i n u e d
B. Financial management services
Financial management services5
Category
Credit card
Trust
and
pension
Loan
from
owner 6
Personal
Business
4.34
4.37
12.62
10.52
28.12
30.91
45.18
40.72
33.31
28.83
60.33
63.81
2.67
3.21
4.90
8.63
8.94
8.80
7.95
5.60
9.01
12.49
24.78
32.81
45.08
50.51
1749
26.25
27.47
34.24
33.69
44.91
46.75
44.00
50.38
39.51
30.29
19.19
28.46
41.93
51.39
55.61
56.52
42.69
56.86
71.14
77.90
80.67
80.67
23.00
59.67
83.37
11.14
30.34
46.78
Transaction
Cash
management
Creditrelated
Brokerage
49.81
36.54
41.07
24.16
5.21
5.13
3.09
4.62
34.49
43.81
60.54
68.69
73.98
76.83
84.75
28.07
35.73
53.18
54.29
58.99
56.79
70.21
1.57*
2.75
4.00
11.94
16.61
26.95
50.83
1.42*
145
3.66
7.93
7.23
13.21
15.37
29.31
36.67
37.64
49.67
25.71
2.42*
31.24
32.24
.95*
.95*
.95*
.72*
39.90
2.23*
58.64
46.64
63.58
71.11
78.64
59.04
51.88
83.30
Any
AH firms, 1998
All firms, 1993
MEMO: Other credit
Trade
credit
Number of employees4
0-1
2-4
5-9
10-19
20-49
50-99
100-499
Fiscal year sales
(thousands of dollars)
Less than 25
25-49
50-99
100-249
250-499
500-999
1,000-2,499
2,500-4,999
5,000-9,999
10,000 or more
End-of-year assets
(thousands of dollars)
Less than 25
25^9
50-99
100-249
250-499
500-999
1,000-2,499
2,500-4,999
5,000 or more
Organizational form
Proprietorship
Partnership
S corporation
C corporation
Standard industrial classification
Construction and mining (10-19) . . .
Primary manufacturing (20-29)
Other manufacturing (30-39)
Transportation (40-49)
Wholesale trade (50-51)
Retail trade (52-59)
Insurance agents and
real estate (60-69)
Business services (70-79)
Professional services (80-89)
89.97
33.96
45.40
52.66
58.29
64.83
64.31
74.13
85.79
87.93
1.11*
2.84*
1.21*
4.41
5.16
4.98*
4.62
6.36
11.19
63.69
12.63
18.42
6.19
64.74
67.33
29.95
45.77
14.21
23.83
9.69
11.74
12.23
29.33
36.85
43.07
49.52
53.17
49.92
56.43
69.11
62.25
39.78
33.24
46.44
43.02
48.89
59.93
63.79
5.04
5.39
.91*
1.22*
4.57
5046
1.31*
.98*
3.65
5.96
6.75
7.69
16.89
37.03
52.27
1.94
3.83
9.31
8.89
3.96
2.83*
6.64
1.33*
4.00*
4.04
5.05
5.74
9.75
11.88
1540
17.27
11.23
13.69
14.53
34.98
29.26
24.79
22.39
62.09
5.00
9.08
11.98
14.55
14.75
20.55
45.52
21.35
43.22
26.00
33.22
31.08
49.80
46.71
59.78
29.37
23.13
34.67
42.24
30.03
32.35
41.78
43.95
29.22
33.85
36.54
49.33
42.97
57.48
65.31
75.30
68.11
80.59
21.63
28.45
46.55
48.12
50.85
57.82
33.35
43.18
36.00
77.29
59.16
7.63
8.90
15.68
8.39
5.39
5.77
8.43
4.20*
6.36*
5.04
3.26*
3.57*
6.01
3.65
38.45
47.19
53.07
26.03
40.75
36.64
46.59
48.75
53.22
51.42
52.05
49.03
40.22
40.71
44.02
40.79
43.90
37.20
7.93
4.25
4.97
10.42
1.69
22.69
31.72
27.30
48.10
35.25
25.38
26.53
49.04
13.10
30.45
30.57
8.36
11.96
19.23
8.42
27.61
45.49
4.13
2.15
18.76
5.63
29.66
28.36
3.23*
34.53
25.74
36.92
43.24
40.79
39.97
48.91
45.89
44.10
45.14
45.39
43.56
40.46
29.15
24.13
26.91
24.76
39.68
46.01
32.68
28.25
53.39
35.40
45.64
28.14
47.75
37.79
33.09
2.56*
1.45
.68*
7.19
11.32
9.29
24.54
2.71
2.37
3.03
2.17
2.92
4.62
5.76
11.92
14.17
31.66
31.64
23.54
6.95
18.44
29.47
4.72
7.14
14.40
16.27
22.44
3.50
54.30
63.01
75.85
80.15
79.86
72.10
76.58
5.73
7.03
46.60
20.75
27.11
31.90
33.21
2.90*
5.40
47.83
25.74
2.78
6.90
41.10
45.71*
43.06
44.04
54.45
62.68
67.66
1.48
6.42
17.77
26.19
29.12
30.08
31.86
26.82
12.82
27.49
37.70
45.43
62.83
4.47
4.48
27.49
44.70
42.92
43.90
21.36
51.84
47.59
41.50
45.37
10.81
15.18
5.78
35.71
52.83
53.83
50.14
58.53
57.92
55.63
.69*
.46*
2.75*
1.81*
5.57
6.13
36.02
28.76
77.27
67.46
70.57
73.82
78.88
80.00
71.74
71.08
73.23
78.19
44.15
68.46
63.64
34.62
59.14
49.57
Years under current ownership
0-4
5-9
10-14
15-19
20-24
25 or more
4.13
4.27
6.06
5.67
6.24
6.30
Credit Cards
Small businesses were somewhat more likely to use
credit cards in 1998 compared with 1993. The percentage using personal credit cards for business purposes increased from 41 percent to 45 percent, and
the percentage using business credit cards increased
from 29 percent to 33 percent.
3.99
2.60
441
25.40
46.30
41.86
45.07
41.52
36.52
33.65
31.15
54.11
59.74
62.04
63.94
67.56
60.91
Credit cards are a convenient means of making
payments and tracking expenses. Anecdotal evidence
suggests that many smaller and newer businesses also
use credit cards as a source of credit, even though it is
likely to be more costly than other forms of credit.
Lenders sometimes ration credit to high-risk firms.
Thus, firms just starting out and those having little
credit history may be perceived as high risk and may
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances
193
4.—Continued
B.—Continued
Financial management services 5
Category
Any
Transaction
Cash
management
Creditrelated
MEMO: Other credit
Brokerage
Credit card
Trust
and
pension
Loan
from
owner 6
Personal
Business
Trade
credit
Census region of main office
Northeast
New England
Middle Atlantic
48.22
53.59
46.18
36.52
42.04
34.42
3.92
4.43
3.73
2.21
2.36*
2.16
5.77
7.86
4.98
14.89
13.57
15.39
28.12
31.90
26.77
48.87
50.65
48.19
33.51
40.82
30.73
60.41
63.33
59.30
Midwest
East North Central
West North Central
52.95
54.38
50.07
42.63
45.10
37.66
6.86
7.07
6.42
3.77
2.63
6.04
4.44
4.40
4.51
16.42
17.01
15.25
28.38
29.80
25.10
42.20
41.04
44.52
30.86
32.57
27.43
64.27
65.82
61.16
South
South Atlantic
East South Central
West South Central
48.22
50.82
48.32
43.93
40.56
41.61
38.78
39.79
5.86
6.28
6.13
5.05
3.59
3.60
5.97*
2.30
3.93
4.87
3.83*
2.44*
10.38
10.81
11.23
9.24
25.73
28.32
22.54
22.12
41.15
42.10
41.95
39.18
34.36
35.89
34.29
31.90
58.77
60.13
65.81
52.82
West
Mountain
Pacific
50.33
50.31
50.34
43.64
45.03
43.18
3.96
5.10
3.58
2.53
3.21*
2.31
3.73
1.87*
4.35
10.66
8.99
11.21
31.32
30.55
31.67
49.95
52.05
49.26
33.87
34.77
33.57
58.97
61.68
58.06
Urbanization at main office
Urban
Rural
50.80
45.89
41.81
38.11
5.41
4.40
2.76
4.39
4.64
3.12
13.49
9.20
28.58
25.74
46.00
41.90
34.05
30.35
59.81
62.39
Number of offices
One
Two
Three or more
47.34
67.01
70.10
39.08
53.96
59.67
4.17
9.66
19.83
2.45
8.14
6.69
3.87
7.68
7.78
11.62
19.17
21.83
27.61
31.20
28.28
45.20
45.58
44.71
31.35
45.70
51.53
58.60
72.60
73.75
Sales area
Primarily within U.S
International or global
49.15
64.24
40.30
57.58
5.13
6.84
2.74
10.36
4.33
4.49
12.38
17.95
28.39
22.70
44.82
53.32
32.53
49.89
60.04
67.33
Owners' participation
Owner management
Hired management
48.59
64.41
40.17
51.98
4.79
10.47
3.00
4.22
4.36
4.09
11.72
23.20
28.02
28.74
46.03
35.05
32.92
37.96
59.45
71.05
Race, ethnicity, and sex
of majority owners
Nonwhite or Hispanic
Non-Hispanic white
46.84
50.30
41.04
41.04
2.75
5.66
3.07
3.10
2.54
4.62
8.65
13.38
27.64
28.24
45.17
45.16
28.20
34.21
50.98
62.16
White
Black
Asian or Pacific Islander
American Indian or Alaska Native ..
49.41
42.23
67.92
37.86*
40.36
36.70
62.83
25.97*
5.54
2.01*
2.86*
.32*
3.08
1.86*
4.03*
6.11*
4.49
1.92*
2.83
5.78*
12.97
8.75
10.33
15.16*
28.02
28.05
34.22
10.84
44.85
44.05
52.81
45.19*
. 33.97
28.78
26.94
19.97*
61.19
46.20
56.83
75.93*
Hispanic
Non-Hispanic
35.66
50.68
29.54
41.75
3.40*
5.33
2.60*
3.12
2.15*
4.48
6.66
13.02
22.80
28.46
41.75
45.39
28.95
33.57
46.37
61.24
Female
Male
Ownership equally divided by sex ..
46.98
50.37
55.88
39.91
41.17
44.91
1.64
3.52
4.04*
4.60
4.38
1.96*
9.75
13.68
10.97
30.39
27.41
28.69
46.71
44.77
42.21
28.21
34.64
41.12
51.81
63.07
61.97
3.00
5.67
10.58
1. Excludes owner loans, credit cards, and trade credit.
2. Checking accounts: Accounts with unlimited check-writing privileges,
including share draft accounts used for business purposes and owners' personal
checking accounts if used primarily for business purposes. Savings accounts:
Passbook savings accounts, credit union share accounts, certificates of deposit,
other time deposits, and money market accounts if they were limited in either
the number or the amount of checks that could be written.
3. Includes any loans that could not be classified as credit lines, capital
leases, mortgages used for commercial purposes, motor vehicle loans, or equipment loans (in general, any unsecured term loan).
4. See table 1, note 1.
5. Transaction services: The provision of paper money and coins, the processing of credit card receipts, the collection of night deposits, and wire transfers.
Cash-management services: The provision of sweep accounts, zero-balance
accounts, lockbox services, and other services designed to automatically invest
liquid funds in liquid, interest-bearing assets. Credit-related services: The provision of bankers acceptances, letters of credit, sales finance, and factoring.
Trust and pension services: The provision of 401(k) plans, pension funds,
business trusts, and securities safekeeping.
6. Percentage of partnerships and corporations using owner loans (excludes
proprietorships).
* Fewer than fifteen firms in this category reported using this service, too
small a nunber on which to base a reliable statistic.
therefore rely on credit cards as a substitute for other
types of loans.
The descriptive results are not entirely consistent
with these a priori expectations. The use of business
credit cards in 1998 did increase with firm size, but
the use of personal credit cards varied little with size,
except that the largest firms (those with more than
fifty employees or with sales or assets greater than
$2.5 million) were less likely than others to use
personal credit cards.21 Likewise, credit card use
did not vary systematically with firm age. Further
21. The amount charged in a typical month and the amount repaid
in the same month were also asked in the survey.
194
Federal Reserve Bulletin • April 2001
research is needed to determine the extent to which,
and the types of firms for which, credit card balances
may be a substitute for other types of credit.
Proprietorships were the most likely to use personal credit cards and the least likely to use business
credit cards. Insurance and real estate firms were the
least likely to use personal credit cards and, along
with firms in business services and retail trade, the
least likely to use business credit cards.
Trade Credit
Trade credit is extended when a supplier provides
goods and services at one point in time and collects
the charges at a later point. If the bills are not paid
promptly, trade credit becomes a form of financing.
Businesses use trade credit for both transaction and
financing purposes. Trade credit reduces the transactions costs that businesses would incur if they had to
make payment at the time of delivery, for example,
by making funds available for other uses. However,
most trade credit is extended for a very short period
(thirty or sixty days) and is always granted in connection with specific purchases. The interest rates
charged on overdue balances generally are quite high;
2 percent a month is not uncommon. Thus, it is
reasonable to expect that the firms using trade credit
for longer-term financing purposes are firms that
would have difficulty obtaining credit from other
sources.
Trade credit was used by 60 percent of small
businesses in 1998, an incidence of use that exceeds
that for all other financial services except checking.
In 1993, 64 percent of small businesses used the
service. Use generally increased with firm size;
except for the smallest firms, more than half the firms
in each size category used trade credit in 1998.
Black-, Hispanic-, and female-owned firms were less
likely than others to use the service; the differences in
use between these groups of firms and others were
similar to the differences in use between smaller and
larger firms.
The use of trade credit was most common among
firms in manufacturing, construction, and wholesale
and retail trade—industries for which nonlabor costs,
such as the costs of equipment and inventory, are
large relative to labor costs. Among industries for
which labor's share of costs is high, such as business
and professional services, trade credit use was somewhat less common, but it was still used by at least
half the firms. The firms least likely to use trade
credit were those whose principal activity involved
insurance and real estate or transportation.
The survey findings seem to suggest that trade
credit was used mainly for transactions purposes.
However, some firms undoubtedly used it for financing purposes; further research may help to determine
the characteristics of these firms.
SUPPLIERS OF FINANCIAL SERVICES
USED BY SMALL BUSINESSES
The suppliers of financial services to small businesses include financial institutions—depository
institutions (commercial banks and thrift institutions,
including savings associations, savings banks, and
credit unions) as well as nondepository institutions
(finance, leasing, mortgage, brokerage, and insurance
companies)—and nonfinancial sources (such as individuals, family members, other businesses, and government entities). The survey collected information
on the sources of checking and saving services; credit
lines, loans, and capital leases; and financial management services.22
In 1998, depository institutions and nonfinancial
sources were used by a slightly smaller share of the
small business population, and nondepository financial institutions by a slightly larger share, than in
1993 (table 5). Among depository institutions, commercial bank use was about the same, but thrift
use—despite the deregulation of thrift lending to
businesses—was somewhat lower, possibly reflecting
the decline in the number of thrift institutions nationwide. The decline in the use of thrifts was due to a
decline in the use of savings institutions; the use of
credit unions increased over the period, from 4 percent to 6 percent of firms.
Among nondepository financial institutions, the use
of leasing companies was somewhat less common
and the use of finance companies and "other" nondepository financial institutions (including mortgage
banking and insurance companies) was somewhat
more common relative to 1993. These changes are
consistent with the finding that the percentage of
small businesses that had outstanding mortgages
increased over the period between surveys.
Depository Financial
Institutions
Depository institutions provided at least one financial
service to about 95 percent of small businesses in
1998 (roughly the same percentage of small busi22. Information on the sources of trade credit, credit cards, and
owner loans was not collected.
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances
nesses that had a business checking or savings
account in 1998). Commercial banks were used by a
far larger percentage of firms (89 percent) than were
thrift institutions (savings institutions and credit
unions) (12 percent).23 In general, the percentage of
firms using commercial banks increased with firm
size; in contrast, the percentage using thrifts generally declined with firm size. Proprietorships, which
are generally the smallest firms, were less likely than
firms with other organizational forms to use commercial banks but were about twice as likely as corporations to use thrifts.
The use of thrift institutions declined between 1993
and 1998, from 15 percent to 12 percent of firms. As
in 1993, small businesses in New England were more
likely to use thrifts than were those in other parts of
the country, probably because of the relatively large
number of savings banks in New England.
Black-, Hispanic-, and female-owned firms were
less likely than non-Hispanic- and white-owned firms
to use commercial banks. Black- and female-owned
firms were more likely to use thrifts than were whiteand male-owned businesses. Asian-owned firms were
the most likely to use commercial banks and the least
likely to use thrifts compared with other ownership
groups.
Nondepository Financial
Institutions
Nondepository financial institutions were a source of
financial services for about one-third of small businesses in 1998, somewhat more than the fraction in
1993. The most commonly used source was finance
companies, followed by brokerage companies.
The use of each type of nondepository financial
supplier increased with firm size. About 72 percent of
small businesses with more than 100 employees used
at least one of these sources; about 30 percent used
finance companies and brokerage companies. Use of
nondepository financial institutions also differed by
organizational form and ranged from 24 percent of
proprietorships to 47 percent of C corporations. Proprietorships and partnerships were half as likely as
corporations to use brokerage companies.
The use of nondepository financial institutions
varied with the race, ethnicity, and sex of a firm's
owners. Female- and black-owned firms were the
least likely to use these sources. The differences
23. The percentage of firms that obtained financial services from
commercial banks might have been larger had the suppliers of credit
cards been included in the calculations, as many business and personal
credit cards are issued by commercial banks.
195
among groups were greatest in the use of brokerage
companies; for example, 11 percent of white-owned
businesses used brokerages, compared with 6 percent
of black-owned and Hispanic-owned firms. Femaleowned firms were less likely than male-owned firms
to use finance companies, brokerages, and leasing
companies.
Nonfinancial
Suppliers
About 12 percent of the small businesses used nonfinancial sources for financial services in 1998. About
6 percent used family and individuals and other businesses, and 1 percent used government sources.24
The use of nonfinancial sources did not consistently increase with firm size. For example, the percentage of firms using such sources increased with
employment for groups of firms with up to forty-nine
employees and with 1998 sales of up to $2,500,000.
For larger firms, the percentage using such sources
generally remained at the higher levels.
Individuals and family were used almost exclusively for credit lines, loans, and leases (table 6). It
was expected that the use of individuals or family
members as a source of financial services would be
most important for younger firms. These firms sometimes have difficulty borrowing from financial institutions, in part because financial institutions often
require that prospective borrowers provide several
years of financial statements with their loan applications. Nonfinancial sources, especially family members or other individuals familiar with prospective
borrowers, may be better positioned to evaluate creditworthiness and to monitor the financial condition of
younger firms. Alternatively, nonfinancial sources
may have lower credit standards than financial institutions. The survey results show that in 1998 the use
of family or individuals was most common among
firms younger than five years and among those that
had been operating for fifteen to nineteen years; it
was least common among firms that had been operating for more than twenty-five years. Thus, the expectation regarding firm age and the use of nonfinancial
sources is not entirely consistent with the descriptive
data from the survey. However, further analysis that
statistically controls for factors besides age could
lead to a different conclusion.
24. This figure may understate the true role of government in
providing financial services to small businesses. Many entities, such
as the U.S. Small Business Administration, provide credit guarantees,
which ensure repayment of small business loans made by institutional
lenders such as commercial banks and thrift institutions.
196
5.
Federal Reserve Bulletin • April 2001
P e r c e n t a g e o f s m a l l b u s i n e s s e s u s i n g s e l e c t e d suppliers o f financial s e r v i c e s , b y s e l e c t e d c a t e g o r y o f firm, 1 9 9 8
A. Any supplier, any financial institution, and depository institutions
Financial institution
Depository
Category
Any
supplier
Thrift
Any
Any
All firms, 1998
All firms, 1993
Commercial
bank
Any
Savings
institution
Credit
union
6.29
11.80
5.90
4.04
96.18
97.03
95.74
96.84
94.98
96.48
88.86
89.72
12.06
15.37
Number of employees1
0-1
2-4
5-9
10-19
20-49
50-99
100-499
91.02
95.86
99.37
100.00
100.00
100.00
100.00
89.85
95.50
99.37
100.00
100.00
97.94
100.00
88.67
94.77
98.50
99.79
100.00
97.42
100.00
79.40
88.09
93.90
97.33
98.06
93.23
98.20
13.46
11.93
13.29
10.57
7.33
9.38
6.39
5.07
6.20
8.57
4.60*
5.65
8.79
6.14*
840
5.96
4.89
5.98
1.68*
.90*
.38*
Fiscal year sales (thousands of dollars)
Less than 25
25-49
50-99
100-249
250-499
500-999
1,000-2,499
2,500-4,999
5,000-9,999
10,000 or more
82.99
94.77
97.97
99.34
99.82
99.57
100.00
100.00
100.00
100.00
81.52
94.77
97.58
98.83
99.82
99.57
100.00
99.03
100.00
100.00
80.64
93.67
96.85
97.59
99.47
99.44
99.09
98.89
100.00
99.80
68.32
85.80
88.47
92.58
96.40
96.16
96.89
97.43
100.00
97.23
14.75
13.08
11.81
12.60
9.72
12.47
11.00
9.30
5.78*
5.16*
4.33
5.80
6.34
7.64
4.62
8.70
6.99
8.43*
3.29*
5.16*
10.43
7.27
5.47
5.16
5.11
4.39
4.26*
1.06*
2.48*
.00*
End-of-year assets (thousands of dollars)
Less than 25
25-49
50-99
100-249
250-499
500-999
1,000-2,499
2,500-4,999
5,000 or more
89.87
98.65
99.68
99.46
100.00
100.00
100.00
100.00
100.00
89.12
98.65
98.93
99.20
100.00
100.00
99.24
100.00
100.00
88.35
97.00
98.29
98.80
99.34
100.00
9848
99.93
99.84
78.96
91.48
92.67
94.71
96.29
95.38
96.18
99.93
99.84
13.33
11.75
11.94
11.74
10.56
13.47
10.11
7.26*
3.58*
5.55
5.87
5.84
7.84
5.41
10.29
7.39
7.06*
3.58*
8.01
5.88
6.09
3.91
5.38
3.77*
2.72*
.20*
.00*
Organizational form
Proprietorship
Partnership
S corporation
C corporation
93.16
95.37
99.85
99.58
92.33
95.37
99.72
99.58
91.41
95.14
98.88
99.13
82.24
89.50
96.06
96.42
15.42
12.24
9.70
6.49
7.12
6.67*
6.05
4.39
8.53
5.58*
3.71
2.14
Standard industrial classification
Construction and mining (10-19)
Primary manufacturing (20-29)
Other manufacturing (30-39)
Transportation (40-49)
Wholesale trade (50-51)
Retail trade (52-59)
Insurance agents and real estate (60-69)
Business services (70-79)
Professional services (80-89)
97.11
95.49
94.15
98.60
99.12
96.84
96.61
94.48
96.04
96.91
94.14
94.15
98.60
98.88
96.34
96.02
94.13
95.33
96.51
94.11
93.47
98.60
98.51
95.92
96.02
92.44
94.51
88.07
89.50
89.90
93.85
95.72
92.64
93.79
83.16
87.24
15.26
12.27
4.11*
10.41
9.92
8.61
11.49
13.83
14.64
8.56
7.74*
2.72*
5.10*
5.98*
5.38
7.06
5.94
7.01
6.70
4.54*
1.39*
5.31*
3.94*
3.63
4.67*
7.90
7.82
Years under current ownership
0-4
5-9
10-14
15-19
20-24
25 or more
94.50
96.05
96.59
98.45
98.03
95.19
93.73
95.97
96.19
98.45
97.52
94.27
93.22
94.94
95.22
97.87
96.35
93.92
85.83
89.50
88.48
93.01
89.00
89.06
12.14
11.18
12.58
11.96
11.60
13.23
4.27
5.47
7.85
6.63
5.17
9.25
8.15
5.88
4.72
5.44
6.43
4.13
For notes, see end of table.
USE OF FINANCIAL SERVICES
BY SERVICE
SUPPLIERS,
The data reviewed thus far have examined separately
the use of financial services by firm characteristics
and the sources of financial services by firm type.
This section reports on the types of financial services
provided to small businesses by each type of financial
service supplier.
Suppliers of Checking and Savings Services
As in 1993, commercial banks dominated the provision of checking services to small businesses in 1998,
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances
197
5.—Continued
A.—Continued
Financial institution
Depository
Category
Any
supplier
Thrift
Any
Any
Commercial
bank
Any
Savings
institution
11.38
17.77
8.94
Credit
union
Census region of main office
Northeast
New England
Middle Atlantic
95.81
94.67
96.24
95.40
94.67
95.68
93.75
93.18
93.97
86.04
78.74
88.83
14.40
24.42
10.58
Midwest
East North Central
West North Central
96.48
96.54
96.36
96.23
96.54
95.62
95.71
95.76
95.62
88.01
86.18
91.67
13.62
15.96
8.91
South
South Atlantic
East South Central
West South Central
96.05
96.43
96.51
95.18
95.43
95.80
95.49
94.80
94.93
95.10
95.49
94.36
90.62
90.93
91.69
89.55
West
Mountain
Pacific
96.37
97.25
96.08
95.97
97.25
95.54
95.33
97.21
94.71
89.38
91.53
88.66
14.41
15.39
14.09
5.60
2.59*
6.60
9.20
12.80
8.00
Urbanization at main office
Urban
Rural
96.45
95.12
96.09
94.37
95.29
93.77
89.35
86.91
11.74
13.34
5.95
7.67
5.93
5.82
95.68
100.00
99.13
95.22
99.63
99.13
94.42
99.37
98.14
87.91
94.53
98.14
12.01
14.17
8.61
6.00
9.33
6.43
6.13
5.08
2.61*
Sales area
Primarily within U.S
International or global
96.10
97.81
95.70
96.54
94.97
95.13
88.98
86.08
12.08
11.80
6.26
7.14*
5.97
4.66*
Owners' participation
Owner management
Hired management
95.93
99.16
95.46
99.16
94.66
98.85
88.11
97.80
12.34
8.87
6.23
7.13
6.24
1.93*
Race, ethnicity, and sex of majority owners
Nonwhite or Hispanic
Non-Hispanic white
93.86
96.56
93.45
96.11
92.96
95.35
87.61
89.05
11.13
12.28
4.84
6.57
6.54
5.83
White
Black
Asian or Pacific Islander
American Indian or Alaska Native
96.37
91.33
97.50
92.67
95.88
91.33
97.50
92.67
95.14
90.74
96.93
92.67
88.85
85.41
94.36
77.48
12.24
13.99
7.30
15.19*
6.40
7.03
4.35*
3.98*
5.94
7.83
2.95*
11.21*
Hispanic
Non-Hispanic
92.95
96.36
91.88
95.96
91.05
95.25
85.23
89.08
11.25
12.14
3.47*
6.47
7.77
5.81
Female
Male
Ownership equally divided by sex
91.85
97.53
98.34
91.34
97.09
98.34
90.72
96.31
97.00
82.00
90.99
92.11
13.67
11.44
13.91
5.78
6.34
8.82*
8.15
5.20
5.10*
Number of offices
One
Two
Three or more
supplying these services to 86 percent of all firms
surveyed (table 6). Savings institutions and credit
unions were sources for fewer than 5 percent of
firms. No other single type of supplier provided more
than a trivial share of checking services. Commercial
banks were also the dominant supplier of savings
services, far outpacing the next most common providers (thrift institutions and brokerage firms).
Suppliers of Lines of Credit, Loans, and
Capital Leases
Commercial banks were also the most common supplier of lines of credit, loans, and capital leases in
7.77
7.29
6.44*
9.26
3.10
6.68*
1.74*
7.41
9.72
2.78*
6.20
6.24
6.13
3.17
3.67
4.83*
1.49*
4.65
3.72
1.61*
7.77
1998; about 39 percent of small businesses had a
credit line, loan, or capital lease from a commercial
bank at the end of 1998 (compared with 41 percent
of firms at the end of 1993). Nondepository financial institutions and family and individuals were
also important suppliers; in 1998, as in 1993, about
20 percent of firms obtained credit lines from or
had outstanding loan or capital lease balances with
nondepository financial institutions (specifically,
finance companies and leasing companies); 6 percent
had loans from family and individuals (compared
with 9 percent in 1993). Although suppliers other
than commercial banks were important sources of
credit, commercial banks were three times more
198
5.
Federal Reserve Bulletin • April 2001
P e r c e n t a g e o f s m a l l b u s i n e s s e s u s i n g s e l e c t e d suppliers o f financial s e r v i c e s , b y s e l e c t e d c a t e g o r y o f firm, 1 9 9 8 — C o n t i n u e d
B. Nondepository financial institutions and nonfinancial suppliers
Nondepository financial institution
Category
Nonfinancial supplier
Any
Finance
company
Brokerage
Leasing
company
Other
Any 2
Family
and
individuals
Other
businesses
Government
All firms, 1998
All firms, 1993
32.65
30.80
14.47
13.82
10.88
10.20
7.48
8.56
7.17
3.59
12.46
15.61
6.14
8.90
5.95
7.43
1.04
.64
Number of employees1
0-1
2-4
5-9
10-19
20-49
50-99
100-499
17.28
28.37
38.53
5346
57.69
60.01
71.66
6.78
13.54
17.02
21.41
25.59
27.29
30.38
5.84
8.75
12.44
17.43
23.94
21.45
32.58
3.37
4.64
10.22
17.80
12.12
23.02
23.42
3.95
5.81
8.91
11.02
13.28
17.00
17.32
9.04
10.02
13.59
20.40
25.45
18.85
18.50
3.95
5.90
6.15
8.66
12.93
6.88
4.63
4.82
4.12
6.88
10.46
11.82
9.28
12.87
45*
.62*
1.29*
2.05*
3.20*
3.29*
2.75*
Fiscal year sales (thousands of dollars)
Less than 25
25-49
50-99
100-249
250-499
500-999
1,000-2,499
2,500-4,999
5,000-9,999
10,000 or more
11.65
20.55
22.73
3248
39.53
42.86
57.28
60.07
70.25
70.95
4.90
8.41
10.08
15.81
14.93
19.99
25.47
30.76
25.66
30.84
2.27*
6.23*
4.76
11.33
14.49
11.26
23.14
20.85
28.05
41.20
1.44*
1.93*
5.29
7.41
7.93
14.84
12.77
18.26
13.49
17.49
3.26
5.40
4.33
6.13
8.97
11.33
9.82
11.96
18.63
19.34
9.46
6.21
9.36
13.36
12.52
16.84
19.68
17.17
20.13
15.94
5.19
2.92*
4.78
7.52
7.32
6.29
8.35
741
6.20*
4.82
3.87
3.03*
4.84
5.57
4.70
10.56
9.86
8.81
11.17
10.73
.54*
.26*
.51*
.91*
1.32*
.82*
3.34*
1.55*
3.72*
1.69*
End-of-year assets (thousands of dollars)
Less than 25
25-49
50-99
100-249
250-499
500-999
1,000-2,499
2,500-4,999
5,000 or more
17.02
25.51
36.14
41.55
43.99
54.74
57.01
64.62
68.01
7.90
12.29
16.23
18.09
18.16
23.15
23.82
25.90
30.11
4.45
9.69
11.23
12.11
15.22
21.25
22.76
36.86
29.87
3.61
4.25
7.98
9.45
10.89
16.26
1048
26.98
16.14
4.07
4.01
7.27
10.46
8.97
10.43
16.00
10.44
17.28
7.93
740
12.68
17.06
14.39
19.11
25.80
14.03
27.33
4.06
3.71
6.29
8.85
7.71
9.85
9.87
4.00*
5.80
3.57
3.57*
6.51
8.18
6.48
7.74
13.90
6.88
20.93
.37*
.10*
.21*
1.42*
1.89*
2.47*
3.47*
3.47*
2.46*
Organizational form
Proprietorship
Partnership
S corporation
C corporation
23.90
29.60
39.70
47.03
10.75
15.53
16.84
20.54
7.61
6.55
13.79
17.02
3.58
9.42
11.73
11.39
5.06
5.16*
7.65
12.56
10.86
9.00
13.98
15.85
5.68
2.74*
6.37
8.18
5.13
4.27*
7.43
6.82
.57*
1.98*
.93
2.03
31.12
31.79
37.88
34.83
42.10
28.71
18.06
12.04
11.46
19.38
19.18
13.15
10.87
6.93
15.79
6.90
13.24
5.50
3.52
13.00
9.59
7.55
9.66
4.21
4.50
6.54
8.97
8.65
10.87
1144
7.74
18.87
16.99
13.77
13.09
14.82
3.44
7.81
10.34
6.17*
7.19
5.53
4.35
12.14
5.13
7.61*
443
8.18
.92*
1.30*
1.76*
.02*
1.77*
1.93
29.88
29.31
38.24
13.90
13.38
13.77
10.79
8.33
19.38
7.43
9.06
8.87
4.68
5.59
5.50
12.63
12.33
10.41
8.33
6.90
4.94
4.98*
5.24
5.31
.00
.74*
.68*
28.33
33.84
37.13
34.33
30.81
30.81
13.72
14.55
16.37
13.50
14.02
13.67
5.78
9.00
12.97
13.65
12.57
15.81
6.64
10.44
843
7.29
5.80
3.61
7.70
6.34
8.56
7.65
6.76
5.65
13.55
10.63
11.53
13.67
15.43
11.51
7.84
6.44
4.95
7.19
5.93
3.42
5.33
3.74
6.51
6.83
7.17
7.99
.92*
.54*
.96*
1.38*
2.77*
.80*
Standard industrial classification
Construction and mining (10-19)
Primary manufacturing (20-29)
Other manufacturing (30-39)
Transportation (40-49)
Wholesale trade (50-51)
Retail trade (52-59)
Insurance agents and
real estate (60-69)
Business services (70-79)
Professional services (80-89)
Years under current ownership
04
5-9
10-14
15-19
20-24
25 or more
likely than finance companies, five times more likely
than leasing companies, and about six times more
likely than family or individuals to be the source of
these services for small businesses in 1998.
Credit lines were supplied almost exclusively by
commercial banks: About 25 percent of firms
obtained credit lines from commercial banks, compared with about 2 percent for the next most important source, finance companies. Vehicle loans were
obtained mainly from commercial banks (11 percent
of firms) and finance companies (about 8 percent).
Equipment loans were also obtained mainly from
these sources, with finance companies used at about
half the rate of commercial banks. The only type
of credit service that was not provided mainly by
commercial banks was capital leases, which were
twice as likely to be obtained from leasing companies
as from commercial banks or finance companies;
however, only about 11 percent of small businesses
had a capital lease in 1998. Finally, family and indi-
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances
199
5.—Continued
B.—Continued
Nondepository financial institution
Category
Nonfinancial supplier
Family
and
individuals
Other
businesses
Government
Any
Finance
company
Brokerage
Leasing
company
Other
Any 2
Census region of main office
Northeast
New England
Middle Atlantic
36.04
35.00
36.44
16.46
16.91
16.29
14.89
15.31
14.74
7.14
6.60
7.34
6.73
6.31
6.89
12.75
13.94
12.29
5.92
7.03*
5.50
6.41
6.71
6.29
.68*
.93*
.59*
Midwest
East North Central
West North Central
30.15
31.51
27.41
11.73
12.21
10.76
11.01
11.31
10.41
6.69
6.82
6.44
7.08
7.63
5.97
12.69
14.21
9.65
6.10
7.61
3.08*
6.16
6.59
5.30
1.20*
.79*
2.02*
South
South Atlantic
East South Central
West South Central
31.16
34.37
29.49
26.82
14.59
16.37
13.80
12.11
8.27
8.88
7.91
7.45
7.95
9.56
7.71
5.46
6.85
6.67
6.31
7.43
11.70
14.03
7.29
10.22
5.18
6.95
3.97*
2.94
5.90
6.58
2.49*
6.59
.96
.63*
1.66*
1.15*
West
Mountain
Pacific
34.13
29.71
35.60
15.17
13.17
15.83
11.12
8.11
12.12
7.79
6.55
8.20
7.96
6.82
8.33
13.02
17.54
11.51
7.50
8.89
7.04
5.54
7.38
4.93
1.26
3.60*
.49*
Urbanization at main office
Urban
Rural
34.32
26.01
15.16
11.75
11.98
6.49
8.16
4.77
7.48
5.93
12.00
14.33
5.84
7.34
6.08
5.46
.79
2.05
Number of offices
One
Two
Three or more
30.61
45.87
50.30
13.43
21.88
21.26
10.23
14.95
17.09
6.79
10.29
16.40
6.64
10.21
13.03
11.71
16.52
20.05
5.89
6.51
11.35
5.46
9.67
7.88
1.08
.47*
1.51*
Sales area
Primarily within U.S
International or global
32.19
41.47
14.21
18.94
10.82
12.31
7.31
10.13
6.76
16.04
12.35
13.56
6.16
5.29
5.81
8.10
1.05
.87*
Owners' participation
Owner management
Hired management
31.69
43.23
14.10
18.19
10.57
14.44
7.09
11.47
6.98
9.26
12.31
13.40
6.17
5.31
5.72
8.36
1.07
.71*
Race, ethnicity, and sex of majority owners
Nonwhite or Hispanic
Non-Hispanic white
30.91
32.88
14.17
14.54
7.09
11.55
7.56
7.41
9.00
6.85
13.47
12.31
8.05
5.85
5.01
6.15
1.08*
.99
White
Black
Asian or Pacific Islander
American Indian or Alaska Native
32.69
28.74
32.73
40.50*
14.49
15.03
12.58
22.55*
11.17
6.02
9.27
14.26*
7.45
7.89
6.13
8.67*
6.84
8.18
13.23
6.37*
12.37
16.57
12.59
4.31*
5.95
10.32
7.21*
3.98*
6.06
5.81
5.81*
.32*
1.03
1.29*
.22*
.32*
Hispanic
Non-Hispanic
30.40
32.74
13.70
14.51
5.63
11.23
7.87
7.39
7.15
7.20
13.57
12.39
8.29
6.03
4.73*
6.05
1.64*
.96
Female
Male
Ownership equally divided by sex
29.18
33.55
36.48
12.05
15.06
18.08
9.71
11.43
8.06
6.43
7.54
12.47
7.37
7.07
7.77*
12.29
12.56
9.81
6.07
6.06
6.12*
5.36
6.26
4.07*
1.22*
1.01
.56*
1. See table 1, note 1.
2. Includes a few sources for which the type could not be determined (fewer
than 1 percent of the sources identified by respondents).
* Fewer than fifteen firms in this category reported using this supplier, too
small a number on which to base a reliable statistic.
viduals provided "other" loans at about the same rate
as did commercial banks.
SUMMARY
Suppliers of Financial Management
Services
Commercial banks were the dominant supplier of
financial management services, serving about 38 percent of small businesses in 1998. Brokerages, the
second most common source of these services, were
used by about 10 percent of firms. Brokerages were
the leading provider of both brokerage services and
trust and pension services, and commercial banks
were the leading provider of transaction, cashmanagement, and credit-related services.
The 1998 Survey of Small Business Finances provides detailed information on the characteristics
of small businesses and on the types and sources
of credit and other financial services they use.
Although the discussion in this article is based on
descriptive statistics, the data suggest interesting
behavior patterns and differences in the use of credit
by small businesses. (Standard errors for the differences have not been calculated, so it is uncertain
whether these differences are statistically significant.)
The 1998 survey is the third in a series of surveys
of small businesses sponsored by the Board of Gov-
200
6.
Federal Reserve Bulletin • April 2001
P e r c e n t a g e o f small b u s i n e s s e s u s i n g s e l e c t e d suppliers o f financial s e r v i c e s , b y s e l e c t e d s e r v i c e , 1 9 9 8
Financial institution
Depository
Service
Any
supplier
Nondepository
Thrift
Any
Any
Commercial
bank
Any
Savings
Credit
institution i union
Any
Finance
company
Brokerage
Leasing
company
Other
14.47
10.88
7.48
7.17
Any
96.18
95.74
94.98
88.86
12.06
6.29
5.90
32.65
Liquid asset account1
Checking
Savings
94.43
94.04
22.20
94.12
93.73
21.91
93.58
93.19
20.56
86.67
86.30
17.84
8.89
8.06
3.08
4.66
4.28
1.08
4.26
3.80
1.99
3.18
1.31
2.10
Credit lines, loans, and
capital leases
Line of credit
Mortgage
Vehicle
Equipment
Capital lease
Other 2
55.09
27.71
13.29
20.55
10.18
10.59
9.92
51.36
27.04
11.68
20.11
8.89
9.58
5.02
41.96
25.61
10.16
13.16
5.91
2.65
4.45
38.88
24.70
8.82
11.30
5.36
2.40
4.22
4.87
1.15
1.42
2.07
.55
.25*
.24*
2.45
.74
1.18
.48
.28*
.16*
.10*
2.45
.41
.24*
1.59
.27*
.10*
.13*
20.11
2.21
1.85
8.59
3.37
7.63
.69
Financial management 3
Transaction
Cash-management
Credit-related
Brokerage
Trust and pension
49.81
41.07
5.21
3.09
4.34
12.62
48.10
39.75
5.09
3.02
4.18
11.65
40.25
37.24
4.73
2.47
.26
2.76
38.15
35.27
4.54
2.39
.25
2.71
3.00
2.78
.31*
.12*
.01*
.06*
1.51
1.41
.22*
.00*
.00*
.01*
1.52
1.39
.09*
.11*
.01*
.04*
17.29
5.60
.46
.67
4.05
9.27
.49
.26*
.28
12.62
1.64
.58
7.91
2.14
2.30
.37
2.90
1.64
.06*
.51
.11*
.76
2.58
.98
1.73
.00*
.00*
.00*
.16*
.07*
.10*
.31
.23*
.00*
.04*
.00*
.05*
.04*
7.37
.34*
.07*
.61
1.31
5.59
.05*
1.67
.14*
1.23
.07*
.00*
.02*
.24*
9.74
.49
.40
.00*
3.84
6.56
.42
.20*
.00*
.14*
.05*
.04*
5.68
3.62
.00*
.02*
.07*
2.14
For notes, see end of table.
ernors. Straightforward comparisons reveal some
remarkable similarities in the findings from the 1998
and 1993 surveys. In particular, commercial banks
continued in 1998 to be the dominant source of
financial services for small businesses, including
checking and savings accounts, loans of all types
except capital leases, and all financial management
services other than brokerage services and trust and
pension services.
Comparisons also reveal some changes over the
period between surveys. Minority- and femaleowned firms accounted for a larger proportion of
small businesses in 1998. The incidence of vehicle,
equipment, and "other" loans declined somewhat
over the period, while the incidence of lines of credit
and mortgages increased. Some of the differences
are undoubtedly due to differences in the economic
climate in which small businesses operated during
1993 and 1998.
Explaining the differences and, more fundamentally, understanding the factors that affect small business financing require a rigorous analytical framework that accounts for the financial characteristics of
borrowers and the markets in which they operate.
Although such analysis is beyond the scope of this
article, the final survey data will provide considerable opportunities for more formal and complete
analyses.
APPENDIX: SURVEY
METHODS
The 1998 Survey of Small Business Finances, conducted in 1999 and 2000 by the National Opinion
Research Center (NORC) for the Board of Governors, covered a nationally representative sample of
small businesses. The target population was U.S.
domestic for-profit, nonfinancial, nonsubsidiary, nonagricultural, nongovernmental businesses with fewer
than 500 employees that were in operation on December 31, 1998. The sample was drawn from the Dun &
Bradstreet Market Identifier file.25
The Market Identifier file is broadly representative
of all businesses in the United States (though it may
underrepresent many of the newest and smallest businesses). It has been estimated that the Dun & Bradstreet database covers approximately 93 percent of
full-time business activity.26
The 1998 Statistics of U.S. Businesses from the
U.S. Small Business Administration provides a comparison population (http://www.sba.gov/advo/stats/
data.html) for the population obtained from the
Dun & Bradstreet file. These data are compiled by
the U.S. Census Bureau and contain virtually the
25. Dun's Marketing Service, Dun & Bradstreet, Inc.
26. See Bruce Phillips and Bruce Kirchhoff, "Formation, Growth,
and Survival: Small Firm Dynamics in the U.S. Economy," Small
Business Economics, vol. 1 (1989), pp. 6 5 - 7 4 .
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances
6.—Continued
Nonfinancial supplier
Service
Any
Any
Liquid asset account1
Checking
Savings
12.46
.34*
.14*
.26*
Family
Other
and
individuals businesses
6.14
5.95
Government
1.04
.04*
.04*
.03*
.30*
.10*
.23*
.00*
.00*
.00*
Credit lines, loans, and
capital leases
Line of credit
Mortgage
Vehicle
Equipment
Capital lease
Other 2
9.82
.80
1.82
.45
1.42
1.17
5.23
6.11
.02*
1.29
.28*
.43*
.27*
4.15
3.13
.77
.25*
.14*
.88
.86
.55
1.04
.01*
.33
.00*
.11*
.03*
.58
Financial management 3 ..
Transaction
Cash-management
Credit-related
Brokerage
Trust and pension
3.25
2.07
.18*
.14*
.14*
.95
.31*
.26*
.03*
.07*
.01*
.02*
2.89
1.76
.15*
.07*
.14*
.93
.09*
.09*
.00*
.00*
.00*
.00*
1. See table 4, note 2.
2. See table 4, note 3.
3. See table 4, note 5.
* Fewer than fifteen firms reported using this supplier, too small a number on
which to base a reliable statistic.
entire universe of private-sector businesses with positive payroll, excluding farms (SIC 01-02), railroads
(SIC 40), the Postal Service (SIC 43), private households (SIC 88), and pension, health, and welfare
funds with at least 100 employees (SIC 6371). The
data show that about 61 percent of firms have fewer
than five employees (compared with 64 percent of the
survey population), 38 percent were in business and
professional services (compared with 43 percent),
and 21 percent were in retail trade (compared with
19 percent). In addition, about 83 percent were
located in urban areas (compared with about 80 percent) and 21 percent were in the Northeast, 23 percent in the Midwest, 32 percent in the South, and
23 percent in the West (compared with 19 percent,
22 percent, 33 percent, and 27 percent respectively).
Sampling was done according to a two-stage stratified random design. In the first stage, the sample was
stratified by number of employees, Census division, and urban/rural status. Because larger small
businesses (those with twenty or more employees)
account for a small proportion of the target population, those firms were sampled at a rate greater than
their proportion in the population to ensure a large
enough sample to permit comparisons with smaller
small businesses. A sample of nearly 40,000 firms
was selected in this first stage, representing 7.5 mil-
201
lion firms in the Market Identifier file; 27,000 completed the screening process, and nearly 20,000 were
determined to be part of the target population, representing about 5.3 million firms.27 Besides verifying
eligibility, the screening was designed to collect information on minority ownership (where a minorityowned firm was defined as one more than 50 percent
owned by individuals who are Hispanic, Latino, or of
Spanish descent; Asian, Native Hawaiian, or other
Pacific Islander; black; or American Indian or Alaska
Native), information not reliably available in the
Dun & Bradstreet file.28
In the second stage, the sample was stratified by
number of employees, Census division, urban/rural
status, and minority ownership (black, Asian, Hispanic, and "other"). Like relatively larger small businesses, minority-owned firms account for only a
small percentage of the population of small businesses but are of special interest to researchers and
policymakers. For these reasons, such firms were
oversampled to ensure that their numbers would be
sufficient to allow for statistical comparisons between
them and other firms.
Of the 20,000 firms determined to be part of the
target population, only 11,000 were asked to participate in the main interview (the second stage), as the
screened sample contained a surplus of small, nonminority-owned firms. Of these 11,000 firms, 3,561
completed the main interview, for a response rate of
33 percent.29 The results presented in this article have
been weighted to allow for different rates of sampling
and different rates of response. The estimates provided are representative of the eligible portion of the
Dun & Bradstreet frame.
Before the screening, firms were mailed a brochure
describing the survey. They were contacted by telephone and asked to complete a short computer-
27. Of the approximately 13,000 firms that did not complete the
screening process, about 6,000 declined to participate. Of the remainder, the majority could not be contacted for various reasons.
28. John D. Wolken, Catherine Haggerty, Karen Grigorian, and
Rachel Harter, "The 1998 Survey of Small Business Finances: Sampling and Level of Effort Associated with Gaining Cooperation from
Minority-Owned Businesses," paper presented at the International
Conference on Establishment Surveys II, June 2000, Buffalo, New
York (forthcoming in ICES II conference proceedings).
29. The response rate for the 1993 survey was 47 percent. The
decline in response rate is generally consistent with a decline in
response rates in many recent scientific surveys, including those of the
U.S. Census Bureau. There are several possible reasons for the lower
rate. Interviews were conducted several months after screening, allowing time for businesses to become defunct and also requiring that
businesses cooperate twice instead of once. Also, many of the main
interviews were completed near January 1, 2000, when many
businesses were busy and therefore less willing to participate.
202
A.l.
Federal Reserve Bulletin • April 2001
Characteristics o f small b u s i n e s s e s , distributed by s e l e c t e d c a t e g o r y o f firm, 1 9 9 8
Number of employees1
Majority owners
Category
All firms
All
firms
Nonwhite
or Hispanic
NonHispanic
white
Male
Female
0-1
2-4
5-19
20-49
50-499
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Number of employees1
0-1
2-4
5-9
10-19
20-49
50-99
100-499
21.86
41.78
19.78
8.39
5.47
1.55
1.17
20.78
48.17
18.36
7.46
3.82
1.08
.31
22.01
40.60
20.04
8.60
5.79
1.63
1.32
20.13
41.04
20.60
8.89
6.27
1.66
1.39
27.34
44.12
17.31
6.62
3.01
1.13
.46
100.00
Fiscal year sales
(thousands of dollars)
Less than 25
25-49
50-99
100-249
250-499
500-999
1,000-2,499
2,500-4,999
5,000-9,999
10,000 or more
16.34
9.48
14.22
21.72
13.29
10.27
7.83
3.28
1.56
1.79
20.84
10.66
19.19
18.43
14.16
8.04
4.98
2.00
.97
.46
15.42
9.24
13.46
22.20
13.17
10.71
8.37
3.52
1.68
2.02
12.98
8.38
14.16
22.58
14.19
11.00
8.83
3.77
1.89
2.11
26.85
12.97
1440
18.99
10.56
8.04
4.74
1.62
.55
.74
39.64
18.86
18.51
16.81
3.96
1.09*
.71*
End-of-year assets
(thousands of dollars)
Less than 25
25—49
50-99
100-249
250-499
500-999
1,000-2,499
2,500-4,999
5,000 or more
34.72
12.57
13.94
15.86
8.74
5.99
4.22
1.54
1.51
41.57
10.79
16.98
13.92
7.36
3.47
3.30
.72
.30
33.42
12.95
13.45
16.22
8.89
646
4.40
1.68
1.73
30.86
12.86
14.53
16.38
9.52
6.83
4.61
1.79
1.85
46.91
11.64
12.17
14.30
6.37
3.26
2.84
.78
.40
Organizational form
Proprietorship
Partnership
S corporation
C corporation
49.35
6.95
23.87
19.83
54.63
7.94
22.42
15.01
48.27
6.75
24.26
20.72
46.80
7.11
25.15
20.94
100.00
70.22
29.78
100.00
57.01
42.99
16.42
11.69
20.53
29.38
13.22
4.86
2.68
.32*
.33*
.20*
2.73
1.52*
5.46
20.22
23.18
24.48
15.16
4.90
.94*
1.32*
.26*
.18*
.54*
.94*
6.06
17.65
35.21
22.26
11.36
5.55
.99*
1.50*
1.15*
.66*
1.58*
5.02*
13.38
20.22
18.03
37.47
62.13
13.01
10.44
8.02
3.71
1.23*
.42*
.08*
40.46
15.77
15.71
16.42
5.84
2.77
1.70
.36*
.07*
13.92
10.51
16.64
22.77
16.46
10.86
5.19
1.28*
1.34*
3.15*
2.66*
7.10
12.60
12.88
22.54
26.00
8.09
4.47
5.41*
1.01*
.52*
5.13
5.40
10.15
19.62
20.96
31.36
57.53
6.48
19.75
16.25
82.72
1.17*
9.85
6.26
55.08
10.00
20.50
14.42
26.98
7.32
35.08
30.62
8.55
3.86
39.58
48.00
7.07*
8.96
40.77
43.20
.23*
.02*
Standard industrial classification
Construction and mining (10-19) . . .
Primary manufacturing (20-29)
Other manufacturing (30-39)
Transportation (40-49)
Wholesale trade (50-51)
Retail trade (52-59)
Insurance agents and
real estate (60-69)
Business services (70-79)
Professional services (80-89)
11.87
3.66
4.68
3.72
7.15
18.95
7.42
2.52
3.63
4.03
6.75
21.23
12.71
3.88
4.89
3.69
7.26
18.65
13.98
3.51
5.27
3.80
8.13
17.51
5.41
4.11
2.88
3.47
3.98
23.40
12.19
3.00
3.03
2.98
4.19
13.89
10.91
3.51
443
3.13
7.21
17.42
12.59
3.68
4.63
4.89
8.84
23.93
13.39
5.59
10.43
3.98
9.36
24.73
13.77
7.04
10.68
6.13
8.13
19.77
6.48
24.83
18.46
5.00
31.60
17.83
6.77
23.49
18.42
6.78
23.02
17.95
5.57
30.40
20.12
7.28
32.08
21.11
6.54
27.20
19.39
6.76
18.86
15.71
3.69*
13.85
14.97
1.81*
14.34
18.16
Years under current ownership
0-4
5-9
10-14
15-19
20-24
25 or more
22.37
22.79
19.14
13.05
8.72
13.75
29.71
24.45
20.59
10.50
6.37
8.38
21.01
22.45
18.97
13.55
9.10
14.71
20.36
21.68
19.30
13.42
9.60
15.45
28.46
26.34
18.74
11.98
5.99
8.48
27.62
24.06
17.89
10.45
7.41
12.44
24.62
24.08
19.70
11.26
7.97
12.15
17.56
21.24
20.21
16.42
9.95
1445
14.80
19.38
15.17
18.24
13.25
19.17
10.83
15.53
17.59
16.38
8.60
30.92
For notes, see end of table.
assisted telephone interview to verify their eligibility.
The screening interview took about five minutes. The
total time required by NORC to contact firms and
administer all interviews, whether completed or not,
averaged about thirty-nine minutes per completed
screening interview.30
30. For both the screening and the main interviews, the total time
per completed interview is the total number of interview hours for all
cases, whether the interview was completed or not, divided by the
number of completed cases.
Firms selected for the main interview were sent
further information about the survey and a customized worksheet to help them consult their records
before the interview. The worksheet requested financial data for the firm and information about the
financial services used by the firm and the sources of
those services. The worksheet differed according to
the firm's legal organizational form and directed
respondents to the appropriate lines on their tax
forms. The main interview, also a computer assisted
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances
203
A. 1.—Continued
Number of employees 1
Majority owners
Category
All
firms
Nonwhite
or Hispanic
NonHispanic
white
Male
Female
0-1
2-4
5-19
20-49
50-499
Census region of main office
Northeast
New England
Middle Atlantic
18.90
5.21
13.69
15.86
.97*
14.88
19.31
5.87
13.44
19.65
5.00
14.65
16.66
5.90
10.75
20.92
5.98
14.94
19.63
5.28
14.35
17.20
4.46
12.75
15.09
6.48
8.61
16.75
3.29
13.46
Midwest
East North Central
West North Central
21.80
14.56
7.24
10.44
7.23
3.21
23.77
15.79
7.98
22.28
15.27
7.02
20.37
12.41
7.96
19.51
12.84
6.68
22.00
14.45
7.55
22.36
15.91
6.45
26.61
16.11
10.50
21.42
12.67
8.75
South
South Atlantic
East South Central
West South Central
32.71
16.88
5.47
10.35
37.01
19.44
2.43
15.14
32.07
16.45
6.03
9.59
32.69
16.59
5.76
10.34
32.59
17.72
4.46
10.41
32.36
17.59
3.70
11.07
33.50
16.99
5.41
11.10
32.31
16.10
7.08
9.12
29.37
15.89
5.35
8.13
34.26
19.68
4.43
10.16
West
Mountain
Pacific
26.59
6.63
19.96
36.69
7.05
29.64
24.85
6.54
18.31
25.38
6.88
18.50
30.38
5.88
24.50
27.21
6.56
20.65
24.88
5.62
19.26
28.13
8.05
20.08
28.93
7.87
21.06
27.56
5.55
22.01
Urbanization at main office
Urban
Rural
79.91
20.09
89.63
10.37
78.19
21.81
79.80
20.20
80.33
19.67
81.91
18.09
78.86
21.14
79.42
20.58
80.37
19.63
84.33
15.67
Number of offices
One
Two
Three or more
87.75
8.55
3.63
89.18
7.37
3.45
87.51
8.76
3.64
86.47
9.21
4.22
91.87
6.51
1.62
96.58
2.89
.53*
91.10
7.66
1.24
84.40
10.85
4.50
66.67
20.19
13.14
42.52
20.67
36.81
Sales area
Primarily within U.S
International or global
95.43
4.51
93.63
6.37
95.76
4.16
95.20
4.71
96.13
3.87
95.76
4.24
95.31
4.69
96.17
3.66
94.11
5.58
89.69
10.31
Owners' participation
Owner management
Hired management
92.33
7.52
93.36
6.64
92.11
7.72
92.24
7.70
92.97
6.79
98.75
1.25*
94.46
5.44
87.04
12.59
85.77
14.23
75.85
24.15
Race, ethnicity, and sex
of majority owners
Nonwhite or Hispanic
Non-Hispanic white
14.60
84.88
100.00
100.00
14.18
85.25
15.90
83.72
13.88
85.48
16.83
82.48
13.38
86.30
10.20
89.80
7.49
92.20
White
Black
Asian or Pacific Islander
American Indian or Alaska Native ..
90.12
4.12
4.38
.81
35.79
28.21
29.97
5.58
90.70
3.77
4.14
.77
88.34
5.21
5.05
.95*
90.58
3.88
3.86
1.04*
88.39
5.34
4.49
1.02*
90.81
3.40
4.90
.52*
95.49
.55*
3.74
.22*
95.02
1.87
2.71
.10*
Hispanic
Non-Hispanic
5.59
94.10
38.29
61.51
100.00
5.78
93.85
5.03
94.85
5.27
94.59
6.47
92.96
4.78
95.06
5.68
94.32
2.88
97.12
Female
Male
Ownership equally divided by sex ..
24.32
71.88
3.67
26.48
68.48
4.90
23.98
72.41
3.49
100.00
95.14
4.86
30.42
68.86
.73*
25.68
69.89
4.33
20.67
74.46
4.66
13.36
80.89
5.64
14.26
82.07
2.97
100.00
telephone interview, took about forty minutes. However, the total time spent by NORC, including the
time spent trying to contact and convert nonrespondents, averaged nearly seven hours per completed
case. Most of the time it took to complete the interviews was spent establishing contact, setting appointments with business owners, reestablishing contact
when interviews were broken off by respondents, and
trying to persuade reluctant owners to complete the
interview.
The information collected from each business fits
into the following categories: demographics of the
firm and its primary owner; the firm's use of financial
services and the sources providing the services; applications for credit by the firm in the past three years;
balance sheet data; and recent credit history of the
firm and its owners. A public-use version of the data
set and a user's manual will be posted on the Federal Reserve Board's web site after completion of
data editing and other processing steps (www.
federalreserve.gov/pubs/oss/oss3/nssbftoc.htm).
•
204
A.l.
Federal Reserve Bulletin • April 2001
Characteristics o f s m a l l b u s i n e s s e s , distributed b y s e l e c t e d c a t e g o r y o f firm, 1 9 9 8 — C o n t i n u e d
Years under current ownership
Urbanizaton at main office
Organizational form
Category
0-9
10 or more
Urban
Rural
Proprietorship
Other
100.00
100.00
100.00
100.00
100.00
100.00
Number of employees
0-1
2-4
5-9
10-19
20-49
50-99
100-499
25.02
45.06
16.97
7.23
4.14
1.15
.43
19.27
39.04
22.08
9.37
6.59
1.87
1.78
22.40
41.23
19.53
8.46
5.51
1.61
1.25
19.69
43.98
20.77
8.08
5.35
1.29
.83
36.64
46.63
13.12
2.27
.95
.29*
.09*
7.46
37.06
26.26
14.34
9.88
2.76
2.21
Fiscal year sales (thousands of dollars)
Less than 25
25-49
50-99
100-249
250-499
500-999
1,000-2,499
2,500-4,999
5,000-9,999
10,000 or more
22.00
10.29
15.03
20.93
12.62
9.19
6.07
1.91
.59
1.18
11.71
8.80
13.61
22.36
13.80
11.10
9.32
4.43
2.36
2.29
15.85
9.55
14.05
21.50
13.61
10.58
7.87
3.10
1.73
1.96
18.25
9.21
14.93
22.59
12.02
9.01
7.69
4.02
.91
1.08
26.39
15.39
19.35
21.96
9.40
5.17
1.79
.10*
.10*
.11*
6.54
3.73
9.23
21.48
17.08
15.23
13.73
6.38
2.99
3.41
End-of-year assets (thousands of dollars)
Less than 25
25-49
50-99
100-249
250-499
500-999
1,000-2,499
2,500-4,999
5,000 or more
41.64
13.23
13.75
14.31
8.33
4.20
2.45
.75
.73
29.07
12.06
14.13
17.08
9.10
7.32
5.69
2.20
2.16
35.08
13.07
13.77
15.78
8.15
5.70
4.34
1.52
1.73
33.32
10.57
14.58
16.14
11.06
7.14
3.75
1.61
.66
49.34
12.51
14.38
13.16
5.67
2.25
1.25
.27*
.02*
20.48
12.62
13.50
1848
11.73
9.64
7.11
2.78
2.97
Organizational form
Proprietorship
Partnership
S corporation
C corporation
50.91
7.12
25.25
16.73
48.18
6.84
22.79
22.19
47.00
6.96
25.20
20.85
58.72
6.93
18.58
15.77
100.00
Standard industrial classification
Construction and mining (10-19)
Primary manufacturing (20-29)
Other manufacturing (30-39)
Transportation (40-49)
Wholesale trade (50-51)
Retail trade (52-59)
Insurance agents and real estate (60-69)
Business services (70-79)
Professional services (80-89)
10.14
3.40
4.75
4.32
6.67
21.13
5.15
26.97
17.24
13.35
3.88
4.64
3.24
7.47
17.20
7.51
23.08
19.48
11.27
3.57
4.66
3.90
7.53
17.19
6.65
24.90
20.15
14.30
4.00
4.75
2.98
5.62
25.94
5.81
24.57
11.74
12.61
3.18
3.00
2.24
3.92
19.49
5.40
29.48
20.47
11.16
4.12
6.32
5.16
10.30
18.42
7.53
20.31
16.50
35.02
23.88
15.94
25.16
22.32
23.78
20.02
12.83
8.61
12.26
22.56
18.83
15.65
13.94
9.14
19.67
22.86
23.72
19.39
11.75
8.18
14.04
21.90
21.87
18.91
14.32
9.24
13.47
All firms
1
Years under current ownership
0-4
5 9
10-14
15 19
20-24
25 or more
49.54
50.46
13.73
47.13
39.15
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances
A. 1.—Continued
Years under current ownership
Urbanizaton at main office
Organizational form
Category
Proprietorship
Other
10.52
4.29
6.23
18.91
5.47
13.45
18.89
4.97
13.92
19.40
13.92
5.48
31.34
17.09
14.25
20.30
12.82
7.48
23.25
16.25
7.01
30.82
14.77
5.60
10.44
31.21
17.21
3.99
10.01
38.65
15.57
11.39
11.69
31.12
14.16
5.12
11.84
34.26
19.54
5.82
8.90
26.79
6.66
20.13
26.46
6.57
19.88
28.38
5.89
22.49
19.49
9.56
9.93
29.67
5.94
23.72
23.60
7.30
16.30
Urbanization at main office
Urban
Rural
81.59
18.41
78.54
21.46
100.00
lOO.OO
76.10
23.90
83.63
16.37
Number of offices
One
Two
Three or more
89.44
7.91
2.60
86.41
9.10
4.49
87.43
8.70
3.78
89.00
7.98
3.02
93.19
5.65
1.16
82.45
11.38
6.03
Sales area
Primarily within U.S
International or global
94.47
5.53
96.30
3.67
94.94
5.00
97.38
2.54
96.86
3.14
94.04
5.84
Owners' participation
Owner management
Hired management
93.10
6.83
91.84
8.11
91.95
7.92
93.83
5.96
96.15
3.85
88.60
11.11
Race, ethnicity, and sex of majority owners
Nonwhite or Hispanic
Non-Hispanic white
17.51
81.68
12.24
87.46
16.37
83.04
7.54
92.17
16.16
83.01
13.08
86.69
White
Black
Asian or Pacific Islander
American Indian or Alaska Native
87.92
4.96
5.25
.98*
91.90
3.44
3.66
.68*
89.11
4.53
5.05
.64
94.13
2.47
1.70
1.50*
88.84
4.88
4.54
.90*
91.36
3.38
4.21
.73*
Hispanic
Non-Hispanic
6.64
92.84
4.74
95.12
6.45
93.23
2.18
97.54
6.15
93.43
5.04
94.75
Female
Male
Ownership equally divided by sex
29.51
66.52
3.83
20.11
76.30
3.55
24.44
71.79
3.67
23.82
72.28
3.70
28.34
71.66
20.39
72.11
7.25
0-9
10 or more
Urban
Census region of main office
Northeast
New England
Middle AUantic
16.98
5.31
11.67
20.46
5.15
15.31
21.01
5.45
15.56
Midwest
East North Central
West North Central
21.31
14.35
6.97
22.26
14.77
7.49
South
South Atlantic
East South Central
West South Central
34.91
19.41
5.34
10.16
West
Mountain
Pacific
1. See text table 1, note 1.
* Fewer than fifteen firms in this category reported this characteristic, too
small a number on which to base a reliable statistic.
. . . Not applicable.
Rural
205
206
Industrial Production and Capacity Utilization
for February 2001
Released for publication March 16
Industrial production fell 0.6 percent in February, its
fifth consecutive monthly decline. Manufacturing
output decreased 0.4 percent; it has fallen about
1V2 percent (not at an annual rate) since September.
Excluding motor vehicles and parts, manufacturing
output decreased 0.5 percent in February. Output at
utilities dropped back 2.3 percent, and production in
mining slipped 0.5 percent. At 146.0 percent of its
1992 average, industrial production was 1.2 percent
above its February 2000 level. The rate of capacity
145
125
105
85
Capacity utilization
Percent of capacity
85
80
75
70
1977
1979
1981
1983
1985
1987
12-month percent change
1991
1993
1995
1997
1999
2001
Percent of capacity
Industrial production
Total industrial production
Excluding high-tech industries
1
1
1995
1
t
1997
i
\
l
1999
l
2001
High-tech industries are defined as semiconductors and related electronic
components (SIC 3672-9), computers (SIC 357), and communications equipment (SIC 366).
Shaded areas are periods of business recession as defined by the NBER.
207
Industrial p r o d u c t i o n and c a p a c i t y utilization, February 2 0 0 1
Industrial production, index, 1992= 100
Percent change
Category
2001
2000
2000
1
r
Nov.
Dec/
Jan.
Total
148.2
147.7
146.8
1
2001'
Feb. 2000
to
Feb. 2001
Feb.P
Nov/
Dec/
Jan/
Feb.P
146.0
-.3
-.3
-.6
-.6
1.2
-.3
-.5
-.3
Previous estimate
148.2
147.4
147.0
Major market groups
Products, total2
Consumer goods
Business equipment
Construction supplies
Materials
136.3
122.4
200.6
141.6
169.9
136.3
122.8
199.4
141.5
168.4
135.6
121.7
198.6
141.6
167.1
134.9
121.2
198.1
140.3
166.0
.0
-.3
.3
-.5
-.7
.0
.4
-.6
.0
-.9
-.5
-.9
-.4
.0
-.8
-.5
-.5
-.3
-.9
-.6
.5
-1.3
6.0
-2.2
2.2
Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities
154.1
196.7
115.5
101.1
121.9
152.9
195.5
114.4
100.2
129.8
152.0
193.4
114.4
102.3
125.5
151.3
192.6
113.9
101.8
122.6
-.5
-.4
-.7
.9
1.6
-.8
-.6
-1.0
-.8
6.4
-.6
-1.1
.0
2.1
-3.3
-.4
-.4
-.5
-.5
-2.3
.9
3.4
-2.1
2.7
2.6
MEMO
Capacity utilization, percent
Feb.
Nov.r
Dec.'
Jan.1
Feb.p
Capacity,
percent
change,
Feb. 2000
to
Feb. 2001
85.4
82.0
81.4
80.8
80.1
79.4
4.5
85.7
84.2
88.3
88.0
92.6
81.2
79.4
85.2
84.9
91.1
80.5
79.7
82.8
87.3
90.7
79.5
79.2
81.1
86.7
96.3
78.7
78.8
79.7
88.6
92.8
78.1
78.4
78.8
88.2
90.4
4.9
2.6
8.5
-1.1
3.4
Average,
1967-00
Low,
1982
High,
Total
82.1
71.1
Manufacturing
Advanced processing
Primary processing .
Mining
Utilities
81.1
80.6
82.2
87.4
87.6
69.0
71.0
65.7
80.3
75.9
NOTE. Data seasonally adjusted or calculated from seasonally adjusted
monthly data.
1. Change from preceding month.
utilization for total industry fell to 79.4 percent
in February, its sixth consecutive monthly decline,
and is 2.7 percentage points below its 1967-2000
average.
MARKET
GROUPS
The index for consumer goods fell 0.5 percent in
February; the production of nondurables decreased
0.7 percent, while the output of durables rose 0.5 percent. The output of nondurable consumer goods was
pulled down by declines in the production of clothing, foods and tobacco, paper products, and energy
products. The production of consumer durables
rebounded a bit; a downturn in motor vehicle output
had contributed to a sharp drop-off during the previous four months
The output of business equipment slipped 0.3 percent in February. The index for industrial and other
equipment dropped 1.0 percent with declines in
machinery and construction equipment more than
offsetting a rise in farm equipment. The production of
2000
2001
2. Contains components in addition to those shown,
r Revised,
p Preliminary.
transit equipment, which had decreased considerably
in the previous two months, fell 0.8 percent because
of further cuts in the assembly of medium and heavy
trucks. The output of information processing equipment posted a relatively small gain of 0.7 percent.
The gains in this sector, which includes computers,
have slowed, on balance, in recent months.
The output of construction supplies fell 0.9 percent
in February after having been unchanged in the previous two months; the index is now 2.2 percent below
its year-ago level. The output of materials dropped
0.6 percent, with similar declines posted for both
durable and nondurable materials. Among durable
materials industries, the output of semiconductors
and related electronic components increased a modest 0.3 percent. However, the production of motorvehicle-related parts and materials posted another
large decline. Among nondurable materials, the output of textiles dropped 2.2 percent in February;
declines in the output of paper and chemicals essentially reversed gains posted in January. The index for
energy materials dropped 0.7 percent in February
after two months of little change.
208
Federal Reserve Bulletin • April 2001
INDUSTRY GROUPS
Manufacturing output declined 0.4 percent in February, with similar decreases in the production of durable and nondurable goods; the losses were widespread. Among durable goods industries, the largest
decreases came in stone, clay, and glass products,
fabricated metal products, industrial machinery other
than computers, and miscellaneous manufacturing.
The output of motor vehicles and parts, which had
fallen almost 22 percent (not at an annual rate)
between September and January, was little changed
in February. Among nondurables, a 1.3 percent rise
in petroleum refining was the only significant
increase.
The factory operating rate declined further in February, to 78.1 percent, which is 3.0 percentage points
below its 1967-2000 average and the lowest level
since late 1991. Capacity utilization in high-tech
industries (computers, communications equipment,
and semiconductors) dropped to 80.6 percent in Feb-
ruary, or 9.4 percentage points below its July 2000
peak. The utilization rate for primary-processing
industries fell 0.9 percentage point, to 78.8 percent,
while that for advanced-processing industries dipped
0.4 percentage point, to 78.4 percent. The operating
rate at utilities fell again, to 90.4 percent from
the high rate of 96.3 percent recorded in December.
The operating rate for mining declined slightly to
88.2 percent.
NEW RELEASE
FORMAT
Beginning with the February 16 issue, the G.17 statistical release has been redesigned. Special aggregates have been added. Although some detailed
industry data no longer appear in the regular release,
these series continue to be available on the Federal Reserve Board's public web site (www.
feder alreser ve. gov/releases/g 17).
•
209
Testimony of Federal Reserve Officials
Testimony by Alan Greenspan, Chairman, Board of
Governors of the Federal Reserve System, before the
Committee on Banking, Housing, and Urban Affairs,
US. Senate, February 13, 2001
I appreciate the opportunity this morning to present
the Federal Reserve's semiannual report on monetary
policy.
The past decade has been extraordinary for the
American economy and monetary policy. The synergies of key technologies markedly elevated prospective rates of return on high-tech investments, led to a
surge in business capital spending, and significantly
increased the underlying growth rate of productivity.
The capitalization of those higher expected returns
boosted equity prices, contributing to a substantial
pickup in household spending on new homes, durable
goods, and other types of consumption generally,
beyond even that implied by the enhanced rise in real
incomes.
When I last reported to you in July, economic
growth was just exhibiting initial signs of slowing
from what had been an exceptionally rapid and unsustainable rate of increase that began a year earlier.
The surge in spending had lifted the growth of the
stocks of many types of consumer durable goods and
business capital equipment to rates that could not
be continued. The elevated level of light vehicle
sales, for example, implied a rate of increase in the
number of vehicles on the road hardly sustainable
for a mature industry. And even though demand
for a number of high-tech products was doubling or
tripling annually, in many cases new supply was
coming on even faster. Overall, capacity in high-tech
manufacturing industries rose nearly 50 percent last
year, well in excess of its rapid rate of increase over
the previous three years. Hence, a temporary glut in
these industries and falling prospective rates of return
were inevitable at some point. Clearly, some slowing
in the pace of spending was necessary and expected if
the economy was to progress along a balanced and
sustainable growth path.
But the adjustment has occurred much faster than
most businesses anticipated, with the process likely
intensified by the rise in the cost of energy that has
drained business and household purchasing power.
Purchases of durable goods and investment in capital
equipment declined in the fourth quarter. Because
the extent of the slowdown was not anticipated by
businesses, it induced some backup in inventories,
despite the more advanced just-in-time technologies
that have in recent years enabled firms to adjust
production levels more rapidly to changes in demand.
Inventory-sales ratios rose only moderately; but
relative to the levels of these ratios implied by
their downtrend over the past decade, the emerging
imbalances appeared considerably larger. Reflecting
these growing imbalances, manufacturing purchasing
managers reported last month that inventories in the
hands of their customers had risen to excessively
high levels.
As a result, a round of inventory rebalancing
appears to be in progress. Accordingly, the slowdown
in the economy that began in the middle of 2000
intensified, perhaps even to the point of growth stalling out around the turn of the year. As the economy
slowed, equity prices fell, especially in the high-tech
sector, where previous high valuations and optimistic forecasts were being reevaluated, resulting in
significant losses for some investors. In addition,
lenders turned more cautious. This tightening of
financial conditions, itself, contributed to restraint on
spending.
Against this background, the Federal Open Market
Committee (FOMC) undertook a series of aggressive
monetary policy steps. At its December meeting, the
FOMC shifted its announced assessment of the balance of risks to express concern about economic
weakness, which encouraged declines in market
interest rates. Then on January 3, and again on January 31, the FOMC reduced its targeted federal funds
rate Vi percentage point, to its current level of
5>A percent. An essential precondition for this type of
response was that underlying cost and price pressures
remained subdued, so that our front-loaded actions
were unlikely to jeopardize the stable, low-inflation
environment necessary to foster investment and
advances in productivity.
The exceptional weakness so evident in a number
of economic indicators toward the end of last year
(perhaps in part the consequence of adverse weather)
apparently did not continue in January. But with
signs of softness still patently in evidence at the time
of its January meeting, the FOMC retained its sense
210
Federal Reserve Bulletin • April 2001
that the risks are weighted toward conditions that
may generate economic weakness in the foreseeable
future.
Crucial to the assessment of the outlook and the
understanding of recent policy actions is the role of
technological change and productivity in shaping
near-term cyclical forces as well as long-term sustainable growth.
The prospects for sustaining strong advances in
productivity in the years ahead remain favorable. As
one would expect, productivity growth has slowed
along with the economy. But what is notable is that,
during the second half of 2000, output per hour
advanced at a pace sufficiently impressive to provide
strong support for the view that the rate of growth of
structural productivity remains well above its pace of
a decade ago.
Moreover, although recent short-term business
profits have softened considerably, most corporate
managers appear not to have altered to any appreciable extent their long-standing optimism about the
future returns from using new technology. A recent
survey of purchasing managers suggests that the
wave of new on-line business-to-business activities
is far from cresting. Corporate managers more generally, rightly or wrongly, appear to remain remarkably
sanguine about the potential for innovations to continue to enhance productivity and profits. At least this
is what is gleaned from the projections of equity
analysts, who, one must presume, obtain most of
their insights from corporate managers. According to
one prominent survey, the three- to five-year average
earnings projections of more than a thousand analysts, though exhibiting some signs of diminishing in
recent months, have generally held firm at a very
high level. Such expectations, should they persist,
bode well for continued strength in capital accumulation and sustained elevated growth of structural productivity over the longer term.
The same forces that have been boosting growth in
structural productivity seem also to have accelerated
the process of cyclical adjustment. Extraordinary
improvements in business-to-business communication have held unit costs in check, in part by greatly
speeding up the flow of information. New technologies for supply-chain management and flexible manufacturing imply that businesses can perceive imbalances in inventories at a very early stage—virtually
in real time—and can cut production promptly in
response to the developing signs of unintended inventory building.
Our most recent experience with some inventory
backup, of course, suggests that surprises can still
occur and that this process is still evolving. Nonethe
less, compared with the past, much progress is evident. A couple of decades ago, inventory data would
not have been available to most firms until weeks had
elapsed, delaying a response and, hence, eventually
requiring even deeper cuts in production. In addition,
the foreshortening of lead times on delivery of capital
equipment, a result of information and other newer
technologies, has engendered a more rapid adjustment of capital goods production to shifts in demand
that result from changes in firms' expectations of
sales and profitability. A decade ago, extended backlogs on capital equipment meant a more stretched-out
process of production adjustments.
Even consumer spending decisions have become
increasingly responsive to changes in the perceived
profitability of firms through their effects on the value
of households' holdings of equities. Stock market
wealth has risen substantially relative to income in
recent years—itself a reflection of the extraordinary
surge of innovation. As a consequence, changes in
stock market wealth have become a more important
determinant of shifts in consumer spending relative
to changes in current household income than was the
case just five to seven years ago.
The hastening of the adjustment to emerging
imbalances is generally beneficial. It means that those
imbalances are not allowed to build until they require
very large corrections. But the faster adjustment process does raise some warning flags. Although the
newer technologies have clearly allowed firms to
make more informed decisions, business managers
throughout the economy also are likely responding to
much of the same enhanced body of information. As
a consequence, firms appear to be acting in far closer
alignment with one another than in decades past. The
result is not only a faster adjustment, but one that is
potentially more synchronized, compressing changes
into an even shorter time frame.
This very rapidity with which the current adjustment is proceeding raises another concern, of a different nature. While technology has quickened production adjustments, human nature remains unaltered.
We respond to a heightened pace of change and its
associated uncertainty in the same way we always
have. We withdraw from action, postpone decisions,
and generally hunker down until a renewed, more
comprehensible basis for acting emerges. In its
extreme manifestation, many economic decisionmakers not only become risk averse but attempt to disengage from all risk. This precludes taking any initiative, because risk is inherent in every action. In the
fall of 1998, for example, the desire for liquidity
became so intense that financial markets seized up.
Indeed, investors even tended to shun risk-free, pre-
Testimony of Federal Reserve Officials
viously issued Treasury securities in favor of highly
liquid, recently issued Treasury securities.
But even when decisionmakers are only somewhat
more risk averse, a process of retrenchment can
occur. Thus, although prospective long-term returns
on new high-tech investment may change little,
increased uncertainty can induce a higher discount of
those returns and, hence, a reduced willingness to
commit liquid resources to illiquid fixed investments.
Such a process presumably is now under way and
arguably may take some time to run its course. It is
not that underlying demand for Internet, networking,
and communications services has become less keen.
Instead, as I noted earlier, some suppliers seem to
have reacted late to accelerating demand, have overcompensated in response, and then have been forced
to retrench—a not-unusual occurrence in business
decisionmaking.
A pace of change outstripping the ability of people
to adjust is just as evident among consumers as
among business decisionmakers. When consumers
become less secure in their jobs and finances, they
retrench as well.
It is difficult for economic policy to deal with the
abruptness of a break in confidence. There may not
be a seamless transition from high to moderate to low
confidence on the part of businesses, investors, and
consumers. Looking back at recent cyclical episodes, we see that the change in attitudes has often
been sudden. In earlier testimony, I likened this
process to water backing up against a dam that is
finally breached. The torrent carries with it most
remnants of certainty and euphoria that built up in
earlier periods.
This unpredictable rending of confidence is one
reason that recessions are so difficult to forecast.
They may not be just changes in degree from a period
of economic expansion, but a different process engendered by fear. Our economic models have never been
particularly successful in capturing a process driven
in large part by nonrational behavior.
Although consumer confidence has fallen, at least
for now it remains at a level that in the past was
consistent with economic growth. And as I pointed
out earlier, expected earnings growth over the longer
run continues to be elevated. If the forces contributing to long-term productivity growth remain intact,
the degree of retrenchment will presumably be limited. Prospects for high productivity growth should,
with time, bolster both consumption and investment
demand. Before long in this scenario, excess inventories would be run off to desired levels.
Still, as the FOMC noted in its last announcement,
for the period ahead, downside risks predominate. In
211
addition to the possibility of a break in confidence,
we do not know how far the adjustment of the stocks
of consumer durables and business capital equipment
has come. Also, foreign economies appear to be
slowing, which could damp demands for exports; and
although some sectors of the financial markets have
improved in recent weeks, continued lender nervousness still is in evidence in other sectors.
Because the advanced supply-chain management
and flexible manufacturing technologies may have
quickened the pace of adjustment in production and
incomes and correspondingly increased the stress on
confidence, the Federal Reserve has seen the need to
respond more aggressively than had been our wont in
earlier decades. Economic policymaking could not,
and should not, remain unaltered in the face of major
changes in the speed of economic processes. Fortunately, the very advances in technology that have
quickened economic adjustments have also enhanced
our capacity for real-time surveillance.
As I pointed out earlier, demand has been depressed by the rise in energy prices as well as by the
needed slowing in the pace of accumulation of business capital and consumer durable assets. The sharp
rise in energy costs pressed down on profit margins
still further in the fourth quarter. About a quarter of
the rise in total unit costs of nonfinancial, non-energy
corporations reflected a rise in energy costs. The
12 percent rise in natural gas prices last quarter
contributed directly, and indirectly through its effects
on the cost of electrical power generation, about onefourth of the rise in overall energy costs for nonfinancial, non-energy corporations; increases in oil prices
accounted for the remainder.
In addition, a significant part of the margin squeeze
not directly attributable to higher energy costs probably has reflected the effects of the moderation in
consumer outlays that, in turn, has been due in part to
higher costs of energy, especially for natural gas.
Hence, it is likely that energy cost increases contributed significantly more to the deteriorating profitability of nonfinancial, non-energy corporations in the
fourth quarter than is suggested by the energy-related
rise in total unit costs alone.
To be sure, the higher energy expenses of households and most businesses represent a transfer of
income to producers of energy. But the capital investment of domestic energy producers, and, very likely,
consumption by their owners, have provided only
a small offset to the constraining effects of higher
energy costs on spending by most Americans. Moreover, a significant part of the extra expense is sent
overseas to foreign energy producers, whose demand
for exports from the United States is unlikely to rise
212
Federal Reserve Bulletin • April 2001
enough to compensate for the reduction in domestic
spending, especially in the short run. Thus, given the
evident inability of energy users, constrained by
intense competition for their own products, to pass on
much of their cost increases, the effects of the rise
in energy costs does not appear to have had broad
inflationary effects, in contrast to some previous episodes when inflation expectations were not as well
anchored. Rather, the most prominent effects have
been to depress aggregate demand. The recent decline
in energy prices and further declines anticipated by
futures markets, should they occur, would tend to
boost purchasing power and be an important factor
supporting a recovery in demand growth over coming
quarters.
ECONOMIC
PROJECTIONS
The members of the Board of Governors and the
Reserve Bank presidents foresee an implicit strengthening of activity after the current rebalancing is over,
although the central tendency of their individual forecasts for real GDP still shows a substantial slowdown, on balance, for the year as a whole. The central tendency for real GDP growth over the four
quarters of this year is 2 to 2Vi percent. Because this
average pace is below the rise in the economy's
potential, they see the unemployment rate increasing
to about 41/2 percent by the fourth quarter of this year.
The central tendency of their forecasts for inflation,
as measured by the prices for personal consumption expenditures, suggests an abatement to 13A to
2V4 percent over this year from 2xh percent over
2000.
GOVERNMENT DEBT REPAYMENT AND THE
IMPLEMENTATION OF MONETARY POLICY
Federal budget surpluses have bolstered national saving, providing additional resources for investment
and, hence, contributing to the rise in the capital
stock and our standards of living. However, the prospective decline in Treasury debt outstanding implied
by projected federal budget surpluses does pose a
challenge to the implementation of monetary policy.
The Federal Reserve has relied almost exclusively on
increments to its outright holdings of Treasury securities as the "permanent" asset counterpart to the
uptrend in currency in circulation, our primary liabil-
ity. Because the market for Treasury securities is
going to become much less deep and liquid if outstanding supplies shrink as projected, we will have to
turn to acceptable substitutes. Last year the Federal
Reserve System initiated a study of alternative
approaches to managing our portfolio.
At its late January meeting, the FOMC discussed
this issue at length, and it is taking several steps to
help better position the Federal Reserve to address
the alternatives. First, as announced on January 31,
the Committee extended the temporary authority, in
effect since late August 1999, for the Trading Desk at
the Federal Reserve Bank of New York to conduct
repurchase agreements in mortgage-backed securities
guaranteed by the agencies as well as in Treasuries
and direct agency debt. Thus, for the time being, the
Desk will continue to rely on the same types of
temporary open market operations in use for the past
year and a half to offset transitory factors affecting
reserve availability.
Second, the FOMC is examining the possibility of
beginning to acquire under repurchase agreements
some additional assets that the Federal Reserve Act
already authorizes the Federal Reserve to purchase.
In particular, the FOMC asked the staff to explore the
possible mechanisms for backing our usual repurchase operations with the collateral of certain debt
obligations of U.S. states and foreign governments.
We will also be consulting with the Congress on
these possible steps before the FOMC further considers such transactions. Taking such assets in repurchase operations would significantly expand and
diversify the assets our counterparties could post
in temporary open market operations, reducing the
potential for any impact on the pricing of privatesector instruments.
Finally, the FOMC decided to study further the
even longer-term issue of whether it will ultimately
be necessary to expand the use of the discount window or to request the Congress for a broadening of its
statutory authority for acquiring assets via open market operations. How quickly the FOMC will need
to address these longer-run portfolio choices will
depend on how quickly the supply of Treasury securities declines as well as the usefulness of the alternative assets already authorized by law.
In summary, although a reduced availability of
Treasury securities will require adjustments in the
particular form of our open market operations, there
is no reason to believe that we will be unable to
implement policy as required.
Testimony of Federal Reserve Officials
Testimony by Chairman Alan Greenspan, before the
Committee on Financial Services, U.S. House of Representatives, February 28, 2001
I appreciate the opportunity this morning to present
the Federal Reserve's semiannual report on monetary
policy.
The past decade has been extraordinary for the
American economy and monetary policy. The synergies of key technologies markedly elevated prospective rates of return on high-tech investments, led to a
surge in business capital spending, and significantly
increased the underlying growth rate of productivity.
The capitalization of those higher expected returns
boosted equity prices, contributing to a substantial
pickup in household spending on new homes, durable
goods, and other types of consumption generally,
beyond even that implied by the enhanced rise in real
incomes.
When I last reported to you in July, economic
growth was just exhibiting initial signs of slowing
from what had been an exceptionally rapid and unsustainable rate of increase that began a year earlier.
The surge in spending had lifted the growth of the
stocks of many types of consumer durable goods and
business capital equipment to rates that could not
be continued. The elevated level of light vehicle
sales, for example, implied a rate of increase in the
number of vehicles on the road hardly sustainable
for a mature industry. And even though demand
for a number of high-tech products was doubling or
tripling annually, in many cases new supply was
coming on even faster. Overall, capacity in high-tech
manufacturing industries rose nearly 50 percent last
year, well in excess of its rapid rate of increase over
the previous three years. Hence, a temporary glut in
these industries and falling prospective rates of return
were inevitable at some point. Clearly, some slowing
in the pace of spending was necessary and expected if
the economy was to progress along a balanced and
sustainable growth path.
But the adjustment has occurred much faster than
most businesses anticipated, with the process likely
intensified by the rise in the cost of energy that has
drained business and household purchasing power.
Purchases of durable goods and investment in capital
equipment declined in the fourth quarter. Because
the extent of the slowdown was not anticipated by
businesses, it induced some backup in inventories,
despite the more advanced just-in-time technologies
that have in recent years enabled firms to adjust
production levels more rapidly to changes in demand.
Inventory-sales ratios rose only moderately; but
relative to the levels of these ratios implied by
213
their downtrend over the past decade, the emerging
imbalances appeared considerably larger. Reflecting
these growing imbalances, manufacturing purchasing
managers reported last month that inventories in the
hands of their customers had risen to excessively
high levels.
As a result, a round of inventory rebalancing
appears to be in progress. Accordingly, the slowdown
in the economy that began in the middle of 2000
intensified, perhaps even to the point of growth stalling out around the turn of the year. As the economy
slowed, equity prices fell, especially in the high-tech
sector, where previous high valuations and optimistic forecasts were being reevaluated, resulting in
significant losses for some investors. In addition,
lenders turned more cautious. This tightening of
financial conditions, itself, contributed to restraint on
spending.
Against this background, the Federal Open Market
Committee (FOMC) undertook a series of aggressive
monetary policy steps. At its December meeting, the
FOMC shifted its announced assessment of the balance of risks to express concern about economic
weakness, which encouraged declines in market
interest rates. Then on January 3, and again on January 31, the FOMC reduced its targeted federal funds
rate ]/2 percentage point, to its current level of
51/2 percent. An essential precondition for this type of
response was that underlying cost and price pressures
remained subdued, so that our front-loaded actions
were unlikely to jeopardize the stable, low-inflation
environment necessary to foster investment and
advances in productivity.
With signs of softness still patently in evidence at
the time of its January meeting, the FOMC retained
its sense that downside risks predominate. The exceptional degree of slowing so evident toward the end of
last year (perhaps in part the consequence of adverse
weather) seemed less evident in January and February. Nonetheless, the economy appears to be on a
track well below the productivity-enhanced rate of
growth of its potential and, even after the policy
actions we took in January, the risks continue skewed
toward the economy's remaining on a path inconsistent with satisfactory economic performance.
Crucial to the assessment of the outlook and the
understanding of recent policy actions is the role of
technological change and productivity in shaping
near-term cyclical forces as well as long-term sustainable growth.
The prospects for sustaining strong advances in
productivity in the years ahead remain favorable. As
one would expect, productivity growth has slowed
along with the economy. But what is notable is that,
214
Federal Reserve Bulletin • April 2001
during the second half of 2000, output per hour
advanced at a pace sufficiently impressive to provide
strong support for the view that the rate of growth of
structural productivity remains well above its pace of
a decade ago.
Moreover, although recent short-term business
profits have softened considerably, most corporate
managers appear not to have altered to any appreciable extent their long-standing optimism about the
future returns from using new technology. A recent
survey of purchasing managers suggests that the
wave of new on-line business-to-business activities
is far from cresting. Corporate managers more generally, rightly or wrongly, appear to remain remarkably
sanguine about the potential for innovations to continue to enhance productivity and profits. At least this
is what is gleaned from the projections of equity
analysts, who, one must presume, obtain most of
their insights from corporate managers. According to
one prominent survey, the three- to five-year average
earnings projections of more than a thousand analysts, though exhibiting some signs of diminishing
in recent months, have generally held at a very high
level. Such expectations, should they persist, bode
well for continued strength in capital accumulation
and sustained elevated growth of structural productivity over the longer term.
The same forces that have been boosting growth in
structural productivity seem also to have accelerated
the process of cyclical adjustment. Extraordinary
improvements in business-to-business communication have held unit costs in check, in part by greatly
speeding up the flow of information. New technologies for supply-chain management and flexible manufacturing imply that businesses can perceive imbalances in inventories at a very early stage—virtually
in real time—and can cut production promptly in
response to the developing signs of unintended inventory building.
Our most recent experience with some inventory
backup, of course, suggests that surprises can still
occur and that this process is still evolving. Nonetheless, compared with the past, much progress is
evident. A couple of decades ago, inventory data
would not have been available to most firms until
weeks had elapsed, delaying a response and, hence,
eventually requiring even deeper cuts in production. In addition, the foreshortening of lead times
on delivery of capital equipment, a result of information and other newer technologies, has engendered
a more rapid adjustment of capital goods production to shifts in demand that result from changes
in firms' expectations of sales and profitability. A
decade ago, extended backlogs on capital equip
ment meant a more stretched-out process of production adjustments.
Even consumer spending decisions have become
increasingly responsive to changes in the perceived
profitability of firms through their effects on the value
of households' holdings of equities. Stock market
wealth has risen substantially relative to income in
recent years—itself a reflection of the extraordinary
surge of innovation. As a consequence, changes in
stock market wealth have become a more important
determinant of shifts in consumer spending relative
to changes in current household income than was the
case just five to seven years ago.
The hastening of the adjustment to emerging
imbalances is generally beneficial. It means that those
imbalances are not allowed to build until they require
very large corrections. But the faster adjustment process does raise some warning flags. Although the
newer technologies have clearly allowed firms to
make more informed decisions, business managers
throughout the economy also are likely responding to
much of the same enhanced body of information. As
a consequence, firms appear to be acting in far closer
alignment with one another than in decades past. The
result is not only a faster adjustment, but one that is
potentially more synchronized, compressing changes
into an even shorter time frame.
This very rapidity with which the current adjustment is proceeding raises another concern, of a different nature. While technology has quickened production adjustments, human nature remains unaltered.
We respond to a heightened pace of change and its
associated uncertainty in the same way we always
have. We withdraw from action, postpone decisions,
and generally hunker down until a renewed, more
comprehensible basis for acting emerges. In its
extreme manifestation, many economic decisionmakers not only become risk averse but attempt to disengage from all risk. This precludes taking any initiative, because risk is inherent in every action. In the
fall of 1998, for example, the desire for liquidity
became so intense that financial markets seized up.
Indeed, investors even tended to shun risk-free, previously issued Treasury securities in favor of highly
liquid, recently issued Treasury securities.
But even when decisionmakers are only somewhat
more risk averse, a process of retrenchment can
occur. Thus, although prospective long-term returns
on new high-tech investment may change little,
increased uncertainty can induce a higher discount of
those returns and, hence, a reduced willingness to
commit liquid resources to illiquid fixed investments.
Such a process presumably is now under way and
arguably may take some time to run its course. It is
Testimony of Federal Reserve Officials
not that underlying demand for Internet, networking,
and communications services has become less keen.
Instead, as I noted earlier, some suppliers seem to
have reacted late to accelerating demand, have overcompensated in response, and then have been forced
to retrench—a not-unusual occurrence in business
decisionmaking.
A pace of change outstripping the ability of people
to adjust is just as evident among consumers as
among business decisionmakers. When consumers
become less secure in their jobs and finances, they
retrench as well.
It is difficult for economic policy to deal with the
abruptness of a break in confidence. There may not
be a seamless transition from high to moderate to low
confidence on the part of businesses, investors, and
consumers. Looking back at recent cyclical episodes,
we see that the change in attitudes has often been
sudden. In earlier testimony, I likened this process to
water backing up against a dam that is finally
breached. The torrent carries with it most remnants of
certainty and euphoria that built up in earlier periods.
This unpredictable rending of confidence is one
reason that recessions are so difficult to forecast.
They may not be just changes in degree from a period
of economic expansion, but a different process engendered by fear. Our economic models have never been
particularly successful in capturing a process driven
in large part by nonrational behavior.
For this reason, changes in consumer confidence
will require close scrutiny in the period ahead, especially after the steep falloff of recent months. But for
now, at least, the weakness in sales of motor vehicles
and homes has been modest, suggesting that consumers have retained enough confidence to make longerterm commitments; and, as I pointed out earlier,
expected earnings growth over the longer run continues to be elevated. Obviously, if the forces contributing to long-term productivity growth remain intact,
the degree of retrenchment will presumably be limited. In that event, prospects for high productivity
growth should, with time, bolster both consumption
and investment demand. Before long in this scenario,
excess inventories would be run off to desired levels.
Higher demand should also facilitate the working-off
of a presumed excess of capital stock, though, doubtless, at a more modest pace.
Still, as the FOMC noted in its last announcement,
for the period ahead, downside risks predominate. In
addition to the possibility of a break in confidence,
we do not know how far the adjustment of the stocks
of consumer durables and business capital equipment
has come. Also, foreign economies appear to be
slowing, which could damp demands for exports; and
215
continued nervousness is evident in the behavior of
participants in financial markets, keeping risk spreads
relatively elevated.
Because the advanced supply-chain management
and flexible manufacturing technologies may have
quickened the pace of adjustment in production and
incomes and correspondingly increased the stress on
confidence, the Federal Reserve has seen the need to
respond more aggressively than had been our wont in
earlier decades. Economic policymaking could not,
and should not, remain unaltered in the face of major
changes in the speed of economic processes. Fortunately, the very advances in technology that have
quickened economic adjustments have also enhanced
our capacity for real-time surveillance.
As I pointed out earlier, demand has been depressed by the rise in energy prices as well as by the
needed slowing in the pace of accumulation of business capital and consumer durable assets. The sharp
rise in energy costs pressed down on profit margins
still further in the fourth quarter. About a quarter of
the rise in total unit costs of nonfinancial, non-energy
corporations reflected a rise in energy costs. The
12 percent rise in natural gas prices last quarter
contributed directly, and indirectly through its effects
on the cost of electrical power generation, about
one-fourth of the rise in overall energy costs for
nonfinancial, non-energy corporations; increases in
oil prices accounted for the remainder. In addition, a
significant part of the margin squeeze not directly
attributable to higher energy costs probably has
reflected the effects of the moderation in consumer
outlays that, in turn, has been due in part to higher
costs of energy, especially for natural gas. Hence, it
is likely that energy cost increases contributed significantly more to the deteriorating profitability of
nonfinancial, non-energy corporations in the fourth
quarter than is suggested by the energy-related rise in
total unit costs alone.
To be sure, the higher energy expenses of households and most businesses represent a transfer of
income to producers of energy. But the capital investment of domestic energy producers, and, very likely,
consumption by their owners, have provided only a
small offset to the constraining effects of higher
energy costs on spending by most Americans. Moreover, a significant part of the extra expense is sent
overseas to foreign energy producers, whose demand
for exports from the United States is unlikely to rise
enough to compensate for the reduction in domestic
spending, especially in the short run. Thus, given
the evident inability of energy users, constrained by
intense competition for their own products, to pass on
much of their cost increases, the rise in energy costs
216
Federal Reserve Bulletin • April 2001
does not appear to have had broad inflationary effects,
in contrast to some previous episodes when inflation
expectations were not as well anchored. Rather, the
most prominent effects have been to depress aggregate demand. The recent decline in energy prices and
further declines anticipated by futures markets,
should they occur, would tend to boost purchasing
power and be an important factor supporting a recovery in demand growth over coming quarters.
In summary, then, although the sources of longterm strength of our economy remain in place,
excesses built up in 1999 and early 2000 have engendered a retrenchment that has yet to run its full
course. This retrenchment has been prompt, in part
because new technologies have enabled businesses to
respond more rapidly to emerging excesses. Accordingly, to foster financial conditions conducive to the
economy's realizing its long-term strengths, the Federal Reserve has quickened the pace of adjustment of
its policy.
•
217
Announcements
CHAIRMAN GREENSPAN ON RENOMINATION OF
VICE CHAIRMAN FERGUSON TO BOARD OF
GOVERNORS
Federal Reserve Board Chairman Alan Greenspan
issued the following statement on March 5, 2001:
Roger Ferguson has been a distinguished and respected
member of the Federal Reserve Board, exercising sound
judgment and benefiting our work on a wide range of
domestic and international policy matters. I welcome his
nomination to another term on the Board.
VICE CHAIRMAN FERGUSON ON HIS
RENOMINATION TO BOARD OF GOVERNORS
Federal Reserve Board member Roger W. Ferguson, Jr. issued the following statement on March 5,
2001:
I am pleased that President Bush has announced his
intention to nominate me to a full term on the Federal
Reserve Board. My experience on the Board has been
enormously gratifying. I'm delighted to have the opportunity to continue my work with Chairman Greenspan and
our colleagues on the Board.
AMENDMENT TO REGULATION E REGARDING
DISCLOSURE REQUIREMENT FOR ATM FEES
The Federal Reserve Board published on March 1,
2001, a final rule amending Regulation E (Electronic
Fund Transfers) to implement provisions of the
Gramm-Leach-Bliley (GLB) Act requiring disclosure of automated teller machine (ATM) fees.
The GLB Act amended Regulation E by requiring
disclosure of fees imposed by ATM operators (sometimes referred to as "surcharges"). Many ATM
operators that impose such fees already disclose
information about the fee to satisfy existing Regulation E and ATM interchange network requirements.
Under the amendments to the GLB Act, an ATM
operator that imposes a fee on a consumer for an
electronic fund transfer (EFT) service is required to
provide notice of that fact in a prominent and conspicuous location on or at the ATM where the EFT is
initiated. Before the consumer is committed to com
pleting the transaction, the ATM operator must also
disclose that a fee will be imposed, together with the
amount of the fee, either on the ATM screen or on a
paper notice. No fee may be imposed unless proper
notice is provided and the consumer elects to complete the transaction. In addition, when the consumer
contracts for an EFT service, the financial institution
holding the consumer's account must provide initial
disclosures, including a notice that a fee may be
imposed by an ATM operator not holding the consumer's account or by any national, regional, or local
network used to complete the transaction. The revisions are effective immediately; compliance is mandatory as of October 1, 2001.
SPANISH-LANGUAGE CONSUMER RESOURCES
ON VEHICLE LEASING AND HOME MORTGAGES
The Federal Reserve Board on March 8, 2001,
announced two new Internet resources for Spanishspeaking consumers.
Consejos para arrendar un vehiculo: Guia del
consumidor {Keys to Vehicle Leasing: A Consumer
Guide) at www.federalreserve.gov/pubs/leasing/
guide_spanish.htm. The site provides an overview of
the most common type of vehicle lease used by the
automotive industry, a closed-end lease. The four key
messages of the consumer guide are the following:
• Arrendar un vehiculo es distinto a comprarlo.
(Leasing is different from buying.)
• Considere los costos al inicio, durante y al final
del contrato de arrendamiento. (Consider beginning,
middle, and end-of-lease costs.)
• Se puede comparar distintas ofertas de arrendamiento y negociar algunas de las condiciones. (Compare different lease offers and negotiate terms.)
• Conozca sus derechos y responsabilidades.
(Know your rights and responsibilities.)
A sample consumer leasing form (muestra del
formulario de arrendamiento para el consumidor) is
included so consumers can become more familiar
with the documents they will receive when leasing
a vehicle. An English-language version of the same
218
Federal Reserve Bulletin • April 2001
material is available at www.federalreserve.gov/pubs/
leasing/guide.htm.
Buscando la hipoteca mas favorable: Compare,
Verifique, Negocie (Looking for the Best Mortgage:
Shop, Compare, Negotiate) is available at www.
federalreserve. go v/pubs/mortgage/mortb_ 1 _spanish.
htm. The site describes how comparing and negotiating interest rates, fees, and other payment terms may
help consumers get the best financing and possibly
save thousands of dollars, whether the purpose is for
a home purchase, refinancing, or home equity loan.
The site outlines key steps to take in the mortgageshopping process:
• Obtenga informacion de varias fuentes de
credito. (Obtain information from several lenders.)
• Obtenga toda la informacion sobre los costos.
(Obtain all important cost information.)
• Negocie el trato mas favorable. (Negotiate for
the best deal.)
A mortgage-shopping worksheet (hoja de calculo
para prestamos hipotecarios) helps consumers compare different loans and different lenders to obtain the
best deal.
An English-language version of the material is
available at www.federalreserve.gov/pubs/mortgage/
mortb_l.htm.
Print copies of both the Spanish and English versions of Consejos para arrendar un vehiculo: Guia
del consumidor (Keys to Vehicle Leasing: A Consumer Guide) and Buscando la hipoteca mas favorable: Compare, Verifique, Negocie (Looking for the
Best Mortgage: Shop, Compare, Negotiate) are available by contacting the Federal Reserve Board, Publications Services, Mail Stop 127, Washington, DC
20551. Or phone 202-452-3245. The first 100 copies
are free of charge.
In conjunction, the Federal Interagency Task Force
on Fair Lending has also published in brochure form
the Spanish-language version of Looking for the Best
Mortgage: Shop, Compare, Negotiate (Buscando
la hipoteca mas favorable: Compare, Verifique,
Negocie).
The brochure notes that lenders and brokers may
offer different prices for the same loan to different
consumers, even if consumers have the same credit
qualifications. These different prices may result when
loan officers and brokers are allowed to keep some or
all of the difference between the lowest available
price and any higher price that the consumer agrees
to pay. The effect of this type of compensation
arrangement on the price of the loan is just one
reason why it is important for consumers to ask
questions about costs and negotiate for the best deal.
The brochure also contains a worksheet that consumers can use to compare costs while shopping. The
worksheet lists commonly charged fees and closing
costs, as well as useful questions consumers may ask
lenders when they shop for a loan.
The publication outlines common sources for home
loans and explains rates, points, and fees. The brochure highlights some of the laws that protect consumers from unfair lending practices. It also emphasizes that even consumers with past credit problems
should shop around and negotiate for the best deal.
Finally, the brochure includes a mortgage loan shopping form that consumers can use to record loan
quotes from two or more lenders or brokers for later
data comparison to help identify or negotiate the best
deal.
The members of the interagency task force are the
Department of Housing and Urban Development,
Department of Justice, Federal Deposit Insurance
Corporation, Federal Housing Finance Board, Federal Reserve Board, Federal Trade Commission,
National Credit Union Administration, Office of
Federal Housing Enterprise Oversight, Office of the
Comptroller of the Currency, and Office of Thrift
Supervision.
Single printed copies of the brochure are available free of charge upon request from the member
agencies. The brochure can also be printed from
the U.S. Consumer Gateway web site (http://
www.consumer.gov) and from the following agency
web sites:
• Department of Housing and Urban Development
(HUD): http://www.hud.gov. Or call HUD at 800767-7468.
• Department of Justice: http://www.usdoj.gov/crt/
housing/hcehome.html. Or contact Jane Dyer, U.S.
Department of Justice, Civil Rights Division, Housing and Civil Enforcement Section, P.O. Box 65998,
Washington, DC 20035. Phone: 202-514-4744.
• Federal Deposit Insurance Corporation (FDIC):
http://www.fdic.gov/publish/coaffpr.html. Or contact
the FDIC's Public Information Center, 801 17th
Street, NW, Room 100, Washington, DC 20434.
Phone: 800-276-6003 or 202-416-6940.
• Federal Housing Finance Board (FHFB): http://
www.fhfb.gov. Or contact the FHFB, 1777 F Street,
Washington, DC 20006. Or phone Roberta Youmans:
202-408-2581.
• Federal Trade Commission (FTC): http://
www.ftc.gov. Or write to the FTC's Consumer
Response Center, Room 130, 600 Pennsylvania
Announcements
Avenue, NW, Washington, DC 20580. Or phone
877-FTC-HELP (877-382-4357, toll-free); TDD
for the hearing impaired: 202-326-2502.
• National Credit Union Administration (NCUA):
http://www.ncua.gov. Or contact Bob Loftus, Director of Public Affairs, NCUA, 1775 Duke Street, Alexandria, VA 22314. Phone: 703-518-6330.
• Office of Federal Housing Enterprise Oversight:
http://www.ofheo.gov, under "Public Documents."
Or contact Stefanie Mullin, Deputy Associate Director for Public Affairs, 700 G Street, NW, Washington, DC 20552. Phone: 202-414-6922.
• Office of the Comptroller of the Currency
(OCC): http://www.occ.treas.gov. Or contact the
OCC, Communications, Mail Stop 3-2, 250 E Street,
SW, Washington, DC 20219. Phone: 202-874-4700.
• Office of Thrift Supervision (OTS): http://
www.ots.treas.gov. Or contact OTS, Publications,
1700 G Street, NW, Washington, DC 20552. Phone:
202-906-6410 (OTS Publications Hotline).
• Federal Consumer Information Center (FCIC):
http://www.pueblo.gsa.gov. Print copies of the brochure are also available at 50 cents per copy; write to
the FCIC, Pueblo, CO 81009.
CHANGES IN BOARD STAFF
The Board of Governors approved on February 12,
2001, the appointment of two new officers in the
Office of Board Members: Michelle A. Smith as
Assistant to the Board and John Lopez as Special
Assistant to the Board.
Michelle A. Smith, who joined the Board on February 20, will oversee the internal management of
the public affairs office and assist Board members
and officials in their communications activities.
Ms. Smith spent the last eight years at the Treasury
Department, most recently as the Assistant Secretary
for Public Affairs. She is a graduate of Baylor University, where she also earned a master's degree in
journalism.
John Lopez supports the Board's congressional
liaison program, which facilitates effective communication between the Board and the Congress. He
currently serves as the Congressional Liaison Assistant and worked previously as Senior Counsel to the
Domestic and International Monetary Policy Subcommittee of the House Banking Committee.
Mr. Lopez is a graduate of Princeton University and
received a law degree from the University of
Virginia.
The Board of Governors approved on February 12,
2001, a restructuring of the Division of Information
219
Technology (IT). In conjunction with the reorganization, the Board announced the following official
staff actions: the promotion of Raymond H. Massey
to associate director, a rotational assignment of
Tillena G. Clark to the Division of Reserve Bank
Operations and Payment Systems (RBOPS) as assistant director for Bank Planning and Control and
Federal Reserve Bank Financial Accounting, the
appointment of Susan F. Marycz to the official staff
as assistant director, and the appointment of
Wayne A. Edmondson to the official staff as assistant
director.
Mr. Massey will oversee three branches of the
division: Financial Systems, Telecommunications,
and Security, Systems & Data Center. He has previously managed many of the division's and FFIEC's
complex software projects as well as the IT infrastructure. Mr. Massey was appointed an assistant
director in 1990.
Ms. Clark will serve a rotational assignment in the
RBOPS Division from March 2001 through April
2002. She joined the Board in 1995 and currently
serves as the IT Division's chief financial officer; she
was appointed an assistant director in 1999. She will
complete work at the Stonier School of Banking in
June 2001.
Ms. Marycz will oversee the Telecommunications
Branch. She joined the Board in 1985 and has held
several management positions in the division. She is
responsible for planning, evaluation, and integration of new technologies for the Board's electronic
network services. Ms. Marycz holds a B.A. from
Millersville University and a B.S. from the University of Maryland. She is enrolled in the Stonier
School of Banking.
Mr. Edmondson will oversee the Consumer and
Community Affairs and FFIEC Systems Branch. He
joined the Board in 1984 and has managed many of
the Board's key information systems. Mr. Edmondson holds a B.A. from Morehouse College and a B.S.
from the University of Maryland. He will complete
work at the Stonier School of Banking in June 2002.
REVISION TO THE MONEY STOCK DATA
Measures of the money stock aggregates and components were revised in February 2001 to incorporate
the results of the annual benchmark and seasonal
factor review. Data in table 1.10 and table 1.21 in the
statistical appendix to the Federal Reserve Bulletin
reflect these changes beginning with this issue. For
2000, the revisions raised the annual growth rate of
M2 and M3 0.2 percentage point.
220
Federal Reserve Bulletin • April 2001
The benchmark incorporates revisions to vault cash
that reflect a new estimation method for credit unions
that do not file the Federal Reserve's deposit reports
either weekly or quarterly. The revisions begin in
April 1984, and the maximum absolute revision is
$1 billion. The benchmark also incorporates revised
historical data on the holdings of large time deposits
by money market mutual funds, an item that is subtracted from gross large time deposits when calculating the large time deposit component of M3. These
revisions begin in March 1980, and the maximum
absolute revision is about $43 billion. The revised
data also incorporate the receipt of historical information from other routine data flows.
Seasonally adjusted measures of the monetary
stock and components also incorporate revised seasonal factors produced from benchmarked data
through December 2000. The X-12-ARIMA procedure was used to derive monthly seasonal factors.
The monthly and weekly seasonal factors were
derived after excluding the estimated effects of the
century date change. These adjustments were made to
ensure that unusual movements around the century
date change did not influence the estimated seasonal
factors. The revisions to seasonal factors lowered M2
growth rates in the first two quarters of 2000 and
raised them in the last two quarters. The revisions to
seasonal factors also reduced the M3 growth rate in
the first quarter of 2000 but increased growth in the
final three quarters of the year.
Revised historical data are available in printed
form from the Monetary and Reserve Analysis Section, Mail Stop 72, Board of Governors of the Federal Reserve System, Washington, DC 20551. Phone:
202-452-3062. Complete historical data are released
each week in the H.6 statistical release on the Board's
web site (http://www.federalreserve.gov/releases/).
Current and historical data are also on the Economic
Bulletin Board of the U.S. Department of Commerce.
For paid electronic access to the bulletin board, call
STAT-USA at 1-800-782-8872 or 202-482-1986.
The benchmark in February 2001 is the last at the
annual frequency. Beginning in March 2001, benchmarks are conducted at a quarterly frequency in order
to provide more timely updates of published data.
The quarterly benchmark review incorporates revised
historical data for depository institutions and money
market mutual funds, data from the Call Reports filed
by depository institutions, and data on money market
mutual funds that began reporting data for the first
time during the quarter.
The review of seasonal factors for the monetary
aggregates will continue to be performed annually,
with the results released in early February.
•
1. Monthly seasonal factors used to construct Ml, January 2000-March 2002
Year and month
Currency
Demand deposits
1.0193
1.0242
1.0187
1.0204
1.0122
.9802
.9539
.9619
.9797
.9987
1.0194
1.0191
1.0066
.9729
.9836
1.0036
.9835
.9928
1.0054
.9995
.9942
1.0002
1.0169
1.0491
1.0104
.9919
.9998
1.0196
.9964
.9996
.9938
.9917
.9912
.9944
1.0004
1.0147
1.0158
.9981
1.0026
1.0196
.9984
1.0002
.9712
.9837
.9834
.9962
1.0041
1.0009
.9971
1.0003
1.0170
1.0481
1.0091
.9906
.9987
1.0177
.9961
1.0005
.9936
.9926
.9914
.9950
1.0014
1.0148
1.0158
.9978
1.0023
1.0199
.9987
.9984
.9695
.9861
1.0089
.9897
.9984
1.0159
.9978
1.0021
2000—January
February
March
April
May
June
July
August
September
October
November
December
.9965
.9972
.9998
1.0013
.9999
2001—January
February
March
April
May
June
July
August
September
October
November
December
.9959
.9972
1.0013
1.0013
.9986
.9969
.9972
1.0014
1.0086
1.0188
1.0254
1.0191
1.0211
1.0115
.9785
.9535
.9579
.9794
.9996
1.0213
1.0199
2002—January
February
March
.9956
.9971
1.0008
1.0202
1.0262
1.0193
1.0001
1.0014
.9981
.9974
.9975
1.0011
1.0099
1.0000
1.0009
1.0001
Other checkable deposits 1
Nonbank travelers
checks
Total
1.0001
1. Seasonally adjusted other checkable deposits at thrifts are derived as the difference between total other checkable deposits,
seasonally adjusted, and seasonally adjusted other checkable deposits at commercial banks.
j
At banks
1.0000
.9900
.9899
.9902
.9913
.9954
1.0090
1.0000
.9899
.9899
.9900
.9914
.9954
1.0091
Announcements
2.
M o n t h l y s e a s o n a l factors u s e d to construct M 2 and M 3 , January 2 0 0 0 - M a r c h 2 0 0 2
Savings and
MMDA
deposits1
Smalldenomination
time deposits1
Largedenomination
time deposits1
2000—January
February
March
April
May
June
July
August
September
October
November
December
.9991
.9948
1.0042
1.0167
.9972
1.0009
.9999
.9964
.9983
.9932
.9970
1.0033
1.0020
1.0031
1.0021
1.0004
.9970
.9952
.9976
.9987
1.0001
1.0015
1.0020
1.0004
2001—January
February
March
April
May
June
July
August
September
October
November
December
.9984
.9944
1.0046
1.0165
.9971
1.0016
.9991
.9962
.9988
.9926
.9968
1.0032
2002—January
February
March
.9986
.9941
1.0054
Year and month
Money market mutual funds
RPs
Eurodollars
1.0328
1.0343
1.0195
.9967
.9867
.9797
.9713
.9846
.9778
.9873
1.0050
1.0233
1.0000
1.0127
1.0089
.9927
1.0139
1.0099
.9985
.9983
.9910
.9859
.9978
.9916
1.0114
1.0077
1.0032
1.0017
1.0122
1.0012
.9861
.9891
.9877
.9926
.9959
1.0120
1.0108
1.0195
1.0287
1.0252
.9911
.9854
.9784
.9914
.9921
.9897
.9876
.9979
1.0335
1.0350
1.0199
.9955
.9858
.9786
.9731
.9860
.9793
.9872
1.0041
1.0216
.9983
1.0129
1.0080
.9908
1.0138
1.0126
.9997
.9989
.9924
.9866
.9959
.9910
1.0092
1.0057
1.0048
1.0029
1.0094
1.0025
.9883
.9892
.9890
.9940
.9969
1.0085
1.0118
1.0203
1.0293
1.0333
1.0350
1.0198
.9970
1.0121
1.0065
1.0080
1.0048
1.0059
In M2
In M3 only
.9899
.9999
1.0074
1.0069
1.0081
1.0040
.9979
.9935
.9938
.9957
1.0016
.9991
1.0092
1.0178
1.0270
1.0236
.9904
.9859
.9795
.9928
.9931
.9902
.9887
.9976
1.0018
1.0033
1.0026
1.0008
.9967
.9946
.9974
.9989
1.0003
1.0015
1.0020
1.0002
.9914
1.0006
1.0080
1.0069
1.0082
1.0044
.9975
.9942
.9932
.9946
1.0004
.9992
1.0015
1.0034
1.0029
.9923
1.0009
1.0084
1. Seasonal factors are applied to deposits data at both commercial banks and thrift institutions.
3.
221
W e e k l y s e a s o n a l factors u s e d to construct M l , D e c e m b e r 4, 2 0 0 0 - A p r i l 1, 2 0 0 2
Week ending
Currency
Other checkable deposits'
Nonbank travelers
checks
Demand deposits
Total
At banks
2000—December
4
11
18
25
1.0024
1.0057
1.0070
1.0183
1.0297
1.0247
1.0197
1.0148
1.0431
1.0087
1.0376
1.0586
1.0129
.9939
1.0033
1.0239
1.0019
.9872
1.0023
1.0208
2001—January
1
8
15
22
29
1.0114
1.0034
.9973
.9931
.9889
1.0100
1.0134
1.0168
1.0203
1.0238
1.1147
1.0179
.9922
.9822
.9890
1.0451
1.0206
1.0040
1.0020
1.0029
1.0376
1.0202
1.0107
1.0132
1.0139
February
5
12
19
26
.9951
.9980
.9985
.9958
1.0273
1.0262
1.0251
1.0241
.9747
.9662
.9680
.9772
1.0000
.9865
.9844
.9928
1.0045
.9945
.9933
1.0008
March
5
12
19
26
1.0004
1.0019
.9999
.9981
1.0230
1.0211
1.0191
1.0172
.9711
.9696
.9818
.9877
.9951
.9904
.9932
1.0021
.9983
.9944
.9988
1.0081
April
2
9
16
23
30
.9981
1.0046
1.0024
.9984
.9981
1.0153
1.0177
1.0202
1.0227
1.0253
1.0269
.9886
1.0056
1.0032
.9959
1.0225
1.0121
1.0173
1.0255
1.0151
1.0197
1.0115
1.0219
1.0328
1.0158
May
7
14
21
28
1.0031
1.0018
.9999
.9993
1.0202
1.0152
1.0102
1.0053
.9635
.9779
.9856
.9943
1.0007
.9884
.9915
.9985
.9984
.9928
.9962
1.0019
June
4
11
18
25
.9983
1.0033
1.0010
.9993
1.0004
.9897
.9792
.9689
.9948
.9821
.9898
.9941
1.0033
.9943
.9980
1.0018
1.0004
.9936
.9994
1.0045
July
2
9
16
23
30
1.0010
1.0064
1.0020
.9995
.9973
.9589
.9566
.9544
.9522
.9500
1.0387
1.0038
.9875
.9918
1.0205
1.0110
.9946
.9843
.9887
1.0005
1.0067
.9885
.9834
.9871
.9960
222
3.
Federal Reserve Bulletin • April 2001
W e e k l y s e a s o n a l factors u s e d to construct M l , D e c e m b e r 4 , 2 0 0 0 - A p r i l 1, 2 0 0 2 — C o n t i n u e d
Week ending
August
Currency
Other checkable deposits1
Nonbank travelers
checks
Demand deposits
Total
At banks
6
13
20
27
1.0015
1.0010
.9983
.9952
.9478
.9532
.9586
.9641
.9875
.9904
1.0068
1.0182
.9938
.9856
.9900
.9977
.9882
.9819
.9892
.9972
September 3
10
17
24
.9986
.9994
.9965
.9942
.9696
.9740
.9785
.9830
1.0103
.9896
.9897
.9904
.9995
.9916
.9866
.9890
.9943
.9860
.9881
.9914
1
8
15
22
29
.9946
1.0005
.9985
.9965
.9949
.9875
.9922
.9969
1.0016
1.0064
1.0147
.9780
.9893
1.0000
1.0216
.9973
.9906
.9863
.9927
1.0042
.9942
.9828
.9835
.9915
1.0018
November 5
12
19
26
.9992
1.0017
1.0001
1.0030
1.0113
1.0164
1.0216
1.0269
1.0002
1.0000
1.0201
1.0442
1.0006
.9948
.9994
1.0080
.9936
.9875
.9963
1.0043
December
3
10
17
24
31
1.0026
1.0049
1.0072
1.0141
1.0089
1.0322
1.0267
1.0213
1.0159
1.0106
1.0355
1.0114
1.0297
1.0543
1.1015
1.0125
.9993
1.0012
1.0193
1.0410
1.0025
.9920
.9985
1.0169
1.0338
7
14
21
28
1.0025
.9976
.9943
.9911
1.0141
1.0176
1.0211
1.0247
1.0255
.9928
.9875
.9901
1.0239
1.0062
1.0033
1.0043
1.0211
1.0128
1.0139
1.0151
February
4
11
18
25
.9955
.9981
.9978
.9952
1.0283
1.0272
1.0261
1.0250
.9751
.9600
.9666
.9760
.9987
.9857
.9846
.9925
1.0059
.9947
.9931
1.0003
March
4
11
18
25
.9999
1.0019
1.0006
.9991
1.0239
1.0218
1.0196
1.0175
.9762
.9726
.9843
.9906
.9921
.9893
.9924
1.0013
.9991
.9948
.9970
1.0062
1
.9995
1.0153
1.0138
1.0194
1.0178
October
2002—January
April
1. Seasonally adjusted other checkable deposits at thrifts are derived as the difference between total other checkable deposits,
seasonally adjusted, and seasonally adjusted other checkable deposits at commercial banks.
4.
W e e k l y s e a s o n a l factors u s e d to construct M 2 and M 3 , D e c e m b e r 4, 2 0 0 0 - A p r i l 1, 2 0 0 2
Week ending
Savings and
MMDA
deposits1
Smalldenomination
time deposits1
Largedenomination
time deposits1
Money market mutual funds
RPs
Eurodollars
1.0102
1.0316
1.0304
1.0288
.9936
1.0021
.9933
.9894
.9997
1.0056
1.0046
1.0118
.9972
.9868
.9827
.9934
.9992
1.0142
1.0166
1.0145
1.0081
1.0089
1.0369
1.0437
1.0486
.9789
.9831
1.0026
.9996
1.0062
1.0363
1.0190
1.0079
1.0051
1.0049
In M2
In M3 only
.9987
1.0022
1.0025
.9980
.9914
1.0003
.9995
1.0005
.9915
2000—December
4
11
18
25
1.0017
1.0090
1.0029
.9926
1.0014
1.0010
1.0004
.9997
2001—January
1
8
15
22
29
.9962
1.0242
1.0144
.9920
.9734
1.0002
1.0015
1.0018
1.0018
1.0020
February
5
12
19
26
.9914
.9976
.9940
.9887
1.0028
1.0033
1.0036
1.0035
.9895
.9976
1.0037
1.0055
1.0142
1.0176
1.0197
1.0242
1.0317
1.0378
1.0342
1.0372
1.0138
1.0195
1.0129
1.0069
.9959
1.0036
1.0071
1.0149
March
5
12
19
26
1.0125
1.0115
1.0041
.9898
1.0033
1.0030
1.0027
1.0020
1.0104
1.0115
1.0082
1.0043
1.0225
1.0287
1.0308
1.0304
1.0281
1.0310
1.0218
1.0177
1.0085
1.0158
1.0134
1.0065
1.0009
1.0041
1.0018
1.0133
April
2
9
16
23
30
1.0011
1.0287
1.0301
1.0105
.9960
1.0018
1.0021
1.0012
1.0002
.9993
1.0058
1.0090
1.0068
1.0058
1.0065
1.0296
1.0373
1.0352
1.0246
1.0027
.9968
1.0062
1.0083
.9886
.9789
.9914
.9871
.9909
.9887
.9965
1.0019
.9986
.9879
1.0075
1.0180
1.0000
Announcements
4.
223
W e e k l y s e a s o n a l factors u s e d to construct M 2 and M 3 , D e c e m b e r 4, 2 0 0 0 - A p r i l 1, 2 0 0 2 — C o n t i n u e d
Week ending
Savings and
MMDA
deposits'
Smalldenomination
time deposits1
Largedenomination
time deposits1
Money market mutual funds
In M2
RPs
Eurodollars
1.0011
In M3 only
1.0096
1.0049
.9940
.9862
.9986
.9976
.9963
.9952
1.0133
1.0113
1.0056
1.0044
.9915
.9910
.9904
.9921
.9799
.9864
.9894
.9883
1.0076
1.0119
1.0112
1.0203
.9978
1.0095
1.0279
18
25
1.0114
1.0142
1.0039
.9838
.9945
.9943
.9942
.9943
1.0044
1.0067
1.0070
1.0051
.9893
.9932
.9875
.9817
.9836
.9912
.9785
.9746
1.0231
1.0175
1.0149
1.0069
1.0126
1.0059
.9982
.9984
2
9
16
23
30
.9887
1.0154
1.0078
.9920
.9817
.9960
.9970
.9972
.9977
.9978
.9966
.9931
.9982
1.0009
.9979
.9738
.9773
.9781
.9791
.9796
.9627
.9712
.9777
.9741
.9725
1.0021
1.0009
.9975
.9987
1.0011
1.0011
6
13
20
27
1.0085
1.0040
.9943
.9810
.9982
.9985
.9989
.9991
.9977
.9963
.9923
.9914
.9843
.9910
.9934
.9953
.9734
.9864
.9893
.9945
1.0003
1.0061
.9957
.9937
.9863
.9820
.9849
1.0024
September 3
10
17
24
.9994
1.0124
1.0056
.9850
.9999
1.0002
1.0003
1.0002
.9933
.9925
.9920
.9941
.9922
.9967
.9960
.9899
.9836
.9877
.9851
.9735
.9984
.9960
.9965
.9912
.9908
.9818
.9894
.9872
October
1
8
15
22
29
.9865
1.0081
1.0044
.9876
.9761
1.0010
1.0019
1.0015
1.0013
1.0011
.9944
.9974
.9954
.9935
.9918
.9847
.9864
.9924
.9924
.9896
.9677
.9741
.9891
.9916
.9948
.9818
.9811
.9865
.9870
.9903
.9980
.9883
.9944
.9926
1.0011
November 5
12
19
26
1.0019
1.0022
.9964
.9835
1.0018
1.0023
1.0022
1.0019
.9961
1.0022
1.0024
1.0001
.9848
.9865
.9866
.9899
.9942
1.0042
1.0026
1.0096
.9944
.9957
.9966
.9967
.9912
.9908
.9951
1.0078
December
3
10
17
24
31
.9988
1.0100
1.0043
.9950
.9984
1.0013
1.0009
1.0002
.9997
.9997
.9997
1.0029
1.0036
.9992
.9909
.9905
.9981
1.0089
1.0255
1.0261
1.0237
1.0167
.9951
1.0004
.9957
.9854
.9808
.9990
.9977
1.0034
1.0085
1.0282
7
14
21
28
1.0236
1.0140
.9937
.9779
1.0008
1.0015
1.0015
1.0017
.9930
.9998
.9902
.9863
1.0000
1.0127
1.0172
1.0158
1.0097
1.0344
1.0418
1.0470
.9824
.9970
.9984
1.0038
1.0145
1.0075
1.0063
1.0086
February
4
11
18
25
.9919
.9981
.9942
.9867
1.0025
1.0033
1.0038
1.0037
.9926
.9979
1.0031
1.0037
1.0153
1.0192
1.0198
1.0241
1.0334
1.0377
1.0342
1.0365
1.0120
1.0178
1.0135
1.0073
.9965
1.0016
1.0053
1.0141
March
4
11
18
25
1.0050
1.0108
1.0055
.9949
1.0035
1.0033
1.0030
1.0024
1.0070
1.0107
1.0100
1.0067
1.0218
1.0286
1.0306
1.0318
1.0295
1.0308
1.0208
1.0184
1.0069
1.0129
1.0121
1.0058
1.0035
1.0014
1.0117
1
1.0014
1.0027
1.0068
1.0307
1.0010
.9933
1.0112
May
7
14
21
28
June
4
11
July
August
2002—January
April
1.0000
1.0010
.9958
1. Seasonal factors are applied to deposits data at both commercial banks and thrift institutions.
.9867
.9829
.9877
.9923
1.0000
224
Minutes of the Meeting of the
Federal Open Market Committee
Held on December 19, 2000
A meeting of the Federal Open Market Committee
was held in the offices of the Board of Governors of
the Federal Reserve System in Washington, D.C., on
Tuesday, December 19, 2000, at 9:00 a.m.
Present:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Greenspan, Chairman
McDonough, Vice Chairman
Broaddus
Ferguson
Gramlich
Guynn
Jordan
Kelley
Meyer
Parry
Mr. Hoenig, Ms. Minehan, Messrs. Moskow
and Poole, Alternate Members of the
Federal Open Market Committee
Messrs. McTeer, Santomero, and Stern, Presidents
of the Federal Reserve Banks of Dallas,
Philadelphia, and Minneapolis respectively
Mr. Kohn, Secretary and Economist
Mr. Bernard, Deputy Secretary
Ms. Fox, Assistant Secretary
Mr. Gillum, Assistant Secretary
Mr. Mattingly, General Counsel
Mr. Baxter, Deputy General Counsel
Ms. Johnson, Economist
Mr. Stockton, Economist
Mr. Beebe, Ms. Cumming, Messrs. Goodfriend,
Howard, Lindsey, Reinhart, Simpson, and
Sniderman, 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
Mr. Madigan, Associate Director, Division
of Monetary Affairs, Board of Governors
Messrs. Oliner, Slifman, and Struckmeyer, Associate
Directors, Division of Research and Statistics,
Board of Governors
Mr. Whitesell, Assistant Director, Division
of Monetary Affairs, Board of Governors
Ms. Low, Open Market Secretariat Assistant,
Division of Monetary Affairs, Board of
Governors
Mr. Lyon, First Vice President, Federal Reserve Bank
of Minneapolis
Ms. Browne, Messrs. Hakkio, Hunter, Kos,
Ms. Mester, Messrs. Rolnick and Rosenblum,
Senior Vice Presidents, Federal Reserve Banks
of Boston, Kansas City, Chicago, New York,
Philadelphia, Minneapolis, and Dallas
respectively
Messrs. Cunningham and Gavin, Vice Presidents,
Federal Reserve Banks of Atlanta and St. Louis
respectively
By unanimous vote, the minutes of the meeting of
the Federal Open Market Committee held on November 15, 2000, were approved.
The Manager reported on developments in domestic financial markets and on System open market
transactions in government securities and federal
agency obligations during the period November 15,
2000, through December 18, 2000. By unanimous
vote, the Committee ratified these transactions.
The Manager of the System Open Market Account
also reported on recent developments in foreign
exchange markets. There were no open market operations in foreign currencies for the System's account
in the period since the previous meeting.
The Committee then turned to a discussion of the
economic situation and outlook and the implementation of monetary policy over the intermeeting period
ahead.
The information reviewed at this meeting provided
evidence that economic activity, which had expanded
at an appreciably lower pace since midyear, might
have slowed further in recent months. Consumer
225
spending and business purchases of equipment and
software had decelerated markedly after having registered extraordinary gains in the first half of the year.
Housing construction, though still relatively firm,
was noticeably below its robust pace of earlier in the
year. With final spending rising at a reduced rate,
inventory overhangs had emerged in a number of
goods-producing industries, most visibly in the
motor vehicle sector. Manufacturing production had
declined as a consequence, and the rate of expansion
in employment had moderated further. Evidence on
core price inflation was mixed; by one measure, it
appeared to be increasing very gradually, in part
reflecting the indirect effects of higher energy costs,
but by another it had remained at a relatively subdued
level.
Growth in private nonfarm payroll employment
moderated a little further on balance in October and
November. Manufacturing payrolls changed little
over the two months, and job gains in the construction, retail trade, and services industries were smaller
than those of earlier in the year. By contrast, the pace
of hiring remained relatively brisk in the finance,
insurance, and real estate sectors. With growth in the
demand for labor slowing, initial claims for unemployment insurance continued to trend upward, and
the civilian unemployment rate edged up to 4 percent
in November, its average thus far this year.
Industrial production declined slightly in October
and November following a moderate third-quarter
increase that was well below the pace of expansion
recorded during the first half of the year. Utilities
output surged in November in response to unseasonably cold weather across much of the country while
mining activity changed little. In manufacturing,
motor vehicle output was scaled back further in
November, and there also were widespread declines
in industries not directly affected by conditions in the
motor vehicle sector. Although the production of
high-tech equipment was still trending up, growth
continued to slow from the extraordinarily rapid
increases of earlier in the year. The weakening of
factory output in November was reflected in a further
decline in the rate of capacity utilization in manufacturing to a point somewhat below its long-term
average.
Consumer spending appeared to be decelerating
noticeably further in the fourth quarter in an environment of diminished consumer confidence, smaller job
gains, and lower stock prices. Retail sales were down
somewhat on balance in October and November after
a substantial third-quarter increase; sales of light
vehicles dropped over the two months, and growth in
expenditures on other consumer goods slowed. Out
lays on services continued to grow at a moderate rate
through October (latest data).
Against the backdrop of declining interest rates
on fixed-rate mortgages, residential building activity
had leveled out since midyear, and October starts
remained at the third-quarter level. Sales of new
homes edged down in October, though they were still
slightly above their third-quarter level; sales of existing homes slipped somewhat in October but were
near the middle of their range over the past year. In
the multifamily sector, starts moved up slightly further in October, though they remained appreciably
below their elevated level during the first half of the
year. Continuing relatively low vacancy rates for
multifamily units suggested that the prospects for
additional construction were favorable.
Business investment in equipment and software
increased at a sharply lower, though still relatively
robust, rate in the third quarter, and information on
shipments of nondefense capital goods indicated
another moderate increase in business investment in
October. Shipments of communications, computing,
and office equipment were well above their thirdquarter averages, and shipments of non-high-tech
equipment turned up in October after having fallen
appreciably in earlier months. On the downside, sales
of medium and heavy trucks declined further over
October and November, and new orders for such
trucks remained weak. Investment in nonresidential
structures continued to rise briskly in October, and all
the major subcategories of construction put in place
were up substantially on a year-over-year basis. Market fundamentals, including rising property values
and low vacancy rates, suggested that further expansion of nonresidential building activity, particularly
office construction, was likely.
Inventory investment on a book-value basis picked
up in October from the third-quarter pace, and the
aggregate inventory-sales ratio edged up to its highest level in the past twelve months. In manufacturing,
sizable increases in stocks were led by large accumulations at producers of industrial and electrical
machinery. As a result, the stock-sales ratio for
manufacturing reached its highest level in a year;
advances in stock-sales ratios were widespread
among makers of durable goods while ratios
remained high for a number of categories of nondurable products. At the wholesale level, inventory accumulation inched up from its third-quarter rate, and
the sector's inventory-sales ratio was at the top of its
range for the past twelve months. Total retail stocks
rose in line with sales in October, and the inventorysales ratio for this sector also remained at the upper
end of its range over the past year.
226
Federal Reserve Bulletin • April 2001
The U.S. trade deficit in goods and services reached
a new record high in September and on a quarterly
average basis was up appreciably further in the third
quarter. The value of exports continued to grow
strongly in the latest quarter, led by advances in
exported machinery and industrial supplies. The
value of imports rose at an even faster rate than
exports, with increases in all major trade categories,
especially industrial supplies, semiconductors, and
services. Economic growth in the foreign industrial
countries slowed moderately in the third quarter, and
the available information suggested a further reduction in the fourth quarter. Economic expansion eased
in the euro area despite continued strong growth
of investment and exports, as consumer spending
appeared to be damped by earlier interest rate
increases and by the drain on spendable income of
higher prices for oil and imported goods more generally. In addition, weak consumption appeared to be
an important factor in continued sluggish economic
growth in Japan. Economic activity also decelerated
in some developing countries in the third quarter,
with recent indicators suggesting a slowdown in
expansion in many parts of East Asia.
Incoming data indicated that, on balance, price
inflation had picked up only a little, if at all. Consumer prices, as measured by the consumer price
index (CPI) on a total and a core basis, rose mildly in
October and November after a sizable September
increase, but on a year-over-year basis core CPI
prices increased noticeably more in the twelve
months ended in November than in the previous
twelve-month period. When measured by the personal consumption expenditure (PCE) chain-type
index, however, consumer price inflation was modest
in both October (latest data) and the twelve months
ended in October, with little change year over year.
At the producer level, core prices edged down on
balance in October and November; moreover, producer inflation eased somewhat on a year-overyear basis, though the deceleration was more than
accounted for by an earlier surge in tobacco prices
during the year ended in November 1999. With
regard to labor costs, average hourly earnings of
production or nonsupervisory workers increased in
November at the slightly higher rate recorded in
October. For the twelve months ended in October,
average hourly earnings rose somewhat more than in
the previous twelve months.
At its meeting on November 15, 2000, the Committee adopted a directive that called for maintaining
conditions in reserve markets consistent with an
unchanged federal funds rate of about 6V2 percent. In
taking that action, the members noted that despite
clear indications of a more moderate expansion in
economic activity, persisting risks of heightened
inflation pressures remained a concern, particularly
in the context of a gradual upward trend in core
inflation. In these circumstances, a steady monetary
policy was the best means to promote price stability
and sustainable economic expansion. While recognizing that growth was slowing more than had been
anticipated and that developments might be moving
in a direction that would require a shift to a balanced
risk statement, members agreed that such a change
would be premature. As a result, they agreed that the
statement accompanying the announcement of their
decision should continue to indicate that the risks
remained weighted mainly in the direction of rising
inflation.
Open market operations throughout the intermeeting period were directed toward maintaining the federal funds rate at the Committee's targeted level of
6V2 percent, and the average rate remained close to
the intended level. Against the background of deteriorating conditions in some segments of financial
markets, slower economic expansion, and public
comments by Federal Reserve officials about the
implications of those developments, market expectations about the future course of the federal funds rate
were revised down appreciably over the intermeeting
period, and market interest rates on Treasury and
private investment-grade securities declined somewhat over the intermeeting interval. The weaker outlook for economic growth, coupled with growing
market concerns about corporate earnings, weighed
down equity prices and boosted risk spreads on
lower-rated investment-grade and high-yield bonds.
Equity prices were quite volatile during the intermeeting period, and reflecting numerous dour reports
on corporate earnings and incoming information indicating slower growth in economic activity in the
United States, broad indexes of stock market prices
dropped considerably on balance over the intermeeting period.
In foreign exchange markets, the trade-weighted
value of the dollar edged lower on balance over the
intermeeting interval in terms of the currencies of a
broad group of U.S. trading partners. Among the
major foreign currencies, the dollar fell moderately
against the euro but moved up by a roughly comparable extent in terms of the yen. The dollar's decline
against the euro reflected a growing perception that
economic expansion in the euro area would cool
comparatively less than in the United States. Correspondingly, the slide of the yen seemed to be related
to weak economic data, stagnant business sentiment,
and political uncertainties in Japan. The dollar posted
Minutes of the Federal Open Market Committee
a small gain against an index of the currencies of
other important trading partners, largely reflecting
weaker financial conditions in some emerging
economies.
The broad monetary aggregates decelerated further
in November. The slowing growth of M2 in October
and November following strong expansion in August
and September apparently reflected the moderating
rates of increase in nominal income and spending in
recent months and perhaps some persisting effects of
the rise in opportunity costs earlier in the year. M3
growth slowed less than that of M2 in November, in
part because of stepped-up issuance of large time
deposits as banks reduced their reliance on funding
from overseas offices. The growth of domestic nonfinancial debt slowed in October (latest data), reflecting a larger further paydown of federal debt and a
reduced pace of private borrowing.
The staff forecast prepared for this meeting suggested that the economic expansion had slowed
considerably, to a rate somewhat below the staff's
current estimate of the growth of the economy's
potential output, but that it would gradually gain
strength over the next two years. The forecast anticipated that the expansion of domestic final demand
would be held back to some extent by the diminishing influence of the wealth effects associated with
past outsized gains in equity prices but also by the
relatively high interest rates and the somewhat stringent credit terms and conditions on some types of
loans by financial institutions. As a result, growth of
spending on consumer durables was expected to be
appreciably below that in recent quarters, and housing demand to be slightly weaker. Business fixed
investment, notably outlays for equipment and software, was projected to remain relatively robust;
growth abroad would support the expansion of U.S.
exports; and fiscal policy was assumed to continue its
moderate expansionary trend. Core price inflation
was projected to rise only slightly over the forecast
horizon, partly as a result of higher import prices but
also as a consequence of some further increases in
nominal labor compensation gains that would not be
fully offset by the expected growth of productivity.
In the Committee's discussion of current and prospective economic developments, members commented that recent statistical and anecdotal information provided clear indications of significant slowing
in the expansion of business activity and also pointed
to appreciable erosion in business and consumer confidence. The deceleration in the economy had
occurred from an unsustainably high growth rate in
the first half of the year, and the resulting containment in demand pressures on resources already had
227
improved the outlook for inflation. The question at
this juncture was whether the expansion would
remain near its recent pace or continue to moderate.
While the former still seemed to be the most likely
outcome, the very recent information on labor markets, sales and production, business and consumer
confidence, developments in financial markets, and
growth in foreign economies suggested that the risks
to the economy had shifted rapidly and perceptibly to
the downside. Concerning the outlook for inflation,
members commented that the upside risks clearly had
diminished in the wake of recent developments and
that, with pressures on resources likely to abate at
least a little, subdued inflation was a reasonable
prospect.
Weakening trends in production and employment
were most apparent in the manufacturing sector.
There were widespread anecdotal reports of production cutbacks, notably in industries related to motor
vehicles, and of associated declines in manufacturing
employment. However, many of the factory workers
losing their jobs were readily finding employment
elsewhere in what generally continued to be characterized as very tight labor markets across the country.
The softening in manufacturing reflected weak sales
and prompt efforts to limit unwanted buildups in
inventories. Even so, business contacts reported currently undesired levels of inventories in a range of
industries, not only in motor vehicles. In the aggregate, cutbacks in inventory investment or runoffs of
existing inventories accounted for a significant part
of the recent moderation in the growth of the overall
economy.
The slowing in the growth of consumer spending
that had prompted much of the backup in inventories
was evident from a wide variety of information,
including anecdotal reports from various parts of the
country. Consumer sentiment seemed to have deteriorated appreciably in recent weeks, though from a
very high level, and retail sales were widely indicated
to have softened after a promising spurt early in the
holiday season. Factors cited to account for the relatively sudden emergence of this weakness, and also
as possible harbingers of developments in coming
quarters, were the negative wealth effects of further
declines in stock market prices, the impact of very
high energy costs on disposable incomes, and some
increase in caution about the outlook for employment
opportunities and incomes. The extent to which such
developments would persist and perhaps foster more
aggressive retrenchment in consumer spending
clearly was uncertain, but the members nonetheless
anticipated that over time underlying employment
and income trends would be consistent with further
228
Federal Reserve Bulletin • April 2001
expansion in consumer expenditures, though at a
pace well below that of earlier in the year.
Growth in business expenditures for equipment
and software had moderated substantially in recent
months from very high rates of increase over an
extended period. The slowdown reflected a mix of
interrelated developments including flagging growth
in demand and tightening financial conditions in the
form of declining equity prices and stricter credit
terms for many business borrowers. The re-evaluation
of prospects was most pronounced in the high-tech
industries. The profitability of using and producing
such software and equipment had been overestimated
to a degree, and disappointing sales and a better
appreciation of risks had resulted in much slower
growth in production of such equipment and sharp
deterioration in the equity prices of high-tech companies. At the same time, nonresidential construction
activity appeared to have been well maintained in
many parts of the country, though there were reports
of softening in some regions and of some reductions
or delays in planned projects. Against this background, risks of further retrenchment in capital spending persisted, but to date there was no evidence to
suggest that the underlying pace of advances in technology and related productivity growth had abated.
Over time, further increases in productivity would
undergird continuing growth in demand for high-tech
equipment. In the nonresidential construction area,
members noted that high occupancy rates and high
rents were supportive elements in the construction
outlook.
With regard to the prospects for housing activity,
members provided anecdotal reports of some weakening in a number of regions, though homebuilding
was holding up well in others. Housing demand was,
of course, responding to many of the same factors
that were affecting consumer spending, including the
negative wealth effects of declining stock market
prices. On the positive side, further growth in
incomes and declines in mortgage rates were key
elements of underlying strength for the housing sector. On balance, housing construction at a pace near
current levels appeared to be a reasonable prospect in
association with forecasts of moderate growth in the
overall economy.
Growth in foreign economic activity likely would
continue to foster expansion in U.S. exports, though
members noted that there were signs of softer business conditions in some foreign nations. In addition,
members referred to some anecdotal evidence of
increasing concern among business contacts about
future prospects for exports of manufactured goods.
On the other hand, any depreciation in the foreign
exchange value of the dollar as the economy slowed
would help to bolster exports.
Against the backdrop of slowing economic growth,
core inflation had remained quiescent. Views regarding the outlook for inflation were somewhat mixed,
though all the members agreed that the risks of higher
inflation had diminished materially. Nonetheless,
some members noted that while recent anecdotal
reports pointed to a modest reduction in labor market
strains in some areas and industries, labor markets in
general were still very tight and likely would remain
taut relative to historical experience. In such circumstances, if structural productivity growth leveled out,
worker efforts to catch up to past increases in productivity could put pressures on labor compensation
costs. The latter could well be augmented by sharply
rising medical costs and by attempts to protect the
purchasing power of wages from the erosion caused
by the rise in energy prices. Further depreciation of
the dollar in relation to major foreign currencies
would add to import prices and domestic inflation
pressures. But there were also a number of reasons
for optimism about the outlook for consumer prices
over coming quarters. Growth in economic activity at
a pace somewhat below that of the economy's output
potential would lessen pressures on labor and other
resources from levels that had, in the past few years,
been associated with at most a small uptick in core
inflation. Indications that rapid growth in structural
productivity would persist and widespread reports
that strong competitive pressures in most markets
continued to inhibit business efforts to increase prices
in the face of rising costs also were favorable factors
in the outlook. Further declines in oil prices, as
evidenced by quotations in futures markets, would if
realized have effects not only on so-called headline
inflation but would help hold down core prices over
time. Despite previous increases in headline inflation,
survey and other measures of inflation expectations
continued to suggest that long-run inflation expectations had not risen and might even have fallen a bit of
late as the economy softened.
In the Committee's discussion of policy for the
intermeeting period ahead, all the members indicated
that they could support an unchanged policy stance,
consistent with a federal funds rate averaging about
6V2 percent. However, they also endorsed a proposal
calling for a shift in the balance of risks statement to
be issued after this meeting to express the view that
most members believed the risks were now weighted
toward conditions that could generate economic
weakness in the foreseeable future. In their evaluation of the appropriate policy for these changing
circumstances, the members agreed that the critical
Minutes of the Federal Open Market Committee
issue was whether the expansion would stabilize near
its recent growth rate or was continuing to slow. In
the view of almost all the members, the currently
available information bearing on this issue was not
sufficient to warrant an easing at this point. Much of
the usual aggregative data on spending and employment, although to be sure available only with a lag,
continued to suggest moderate economic expansion.
The information pointing to further weakness was
very recent and to an important extent anecdotal. As
a consequence, most of the members were persuaded
that a prudent policy course would be to await further
confirmation of a weakening expansion before easing, particularly in light of the high level of resource
utilization and the experience of recent years when
several lulls in the growth of the economy had been
followed by a resumption of very robust economic
expansion. Additional evidence of slowing economic
growth might well materialize in the weeks immediately ahead—from the regular aggregated monthly
data releases, but also from weekly readings on the
labor market and reports from businesses on the
strength of sales and production—and the members
agreed that the Committee should be prepared to
respond promptly to indications of further weakness
in the economy. Those few members who expressed
a preference for easing at this meeting believed that,
with unit labor costs and inflation expectations contained, enough evidence of further weakness already
existed to warrant an immediate action. Nonetheless,
they could accept a delay in light of prevailing uncertainties about the prospective performance of the
economy and the intention of the Committee to act
promptly in coming weeks, including the possibility
of an easing move early in the intermeeting period,
should confirming information on weakening trends
in the economy emerge.
With regard to the consensus in favor of moving
from an assessment of risks weighted toward rising
inflation to one that was weighted toward economic
weakness, with no intermediate issuance of a balanced risks assessment, some members observed that
such a change was likely to be viewed as a relatively
rapid shift by some observers. The revised statement
of risks, even though it would not be associated
with an easing move, could strengthen expectations
regarding future monetary policy easing to an extent
that was difficult to predict and could generate sizable
reactions in financial markets. At the same time, it
might raise questions about why the Committee did
not alter the stance of policy. Nonetheless, the Committee's reasons for not easing today were deemed
persuasive by most members, while shifting its statement about economic risks seemed clearly justified
229
by recent developments. In one view, even though
the risks of a weakening economy had increased, a
statement of balanced risks would be preferable
because further moderation in the expansion might
well fail to materialize.
At the conclusion of this discussion, the Committee voted to authorize and direct the Federal Reserve
Bank of New York, until it was instructed otherwise, to execute transactions in the System Account
in accordance with the following domestic policy
directive:
The Federal Open Market Committee seeks monetary
and financial conditions that will foster price stability and
promote sustainable growth in output. To further its longrun objectives, the Committee in the immediate future
seeks conditions in reserve markets consistent with maintaining the federal funds rate at an average of around
6V2 percent.
The vote also encompassed approval of the sentence below for inclusion in the press statement to be
released shortly after the meeting:
Against the background of its long-run goals of price
stability and sustainable economic growth and of the information currently available, the Committee believes that
the risks are weighted mainly toward conditions that may
generate economic weakness in the foreseeable future.
Votes for this action: Messrs. Greenspan, McDonough,
Broaddus, Ferguson, Gramlich, Guynn, Jordan, Kelley,
Meyer, and Parry. Votes against this action: None.
This meeting adjourned at 1:35 p.m. with the
understanding that the next regularly scheduled meeting of the Committee would be held on TuesdayWednesday, January 30-31, 2001.
TELEPHONE CONFERENCE MEETING
A telephone conference meeting was held on January 3, 2001, for the purpose of considering a policy
easing action. In keeping with the Committee's Rules
of Organization, the members at the start of the
meeting unanimously re-elected Alan Greenspan as
Chairman of the Federal Open Market Committee
and William J. McDonough as Vice Chairman. Their
terms of office were extended for one year until the
first meeting of the Committee after December 31,
2001. By unanimous vote, the Federal Reserve Bank
of New York was selected to execute transactions for
the System Open Market Account until the adjournment of the first meeting of the Committee after
December 31, 2001.
230
Federal Reserve Bulletin • April 2001
At its meeting on December 19, 2000, the Committee had contemplated the possibility that ongoing
economic and financial developments might warrant
a reassessment of the stance of monetary policy
before the next scheduled meeting in late January.
Information that had become available since the
December meeting tended to confirm that the economic expansion had continued to weaken. The
manufacturing sector was especially soft, reflecting
apparent efforts in a number of industries to readjust
inventories that were now deemed to be too high,
notably those related to motor vehicles. Retail sales
were appreciably below business expectations for the
holiday season despite some pickup in the latter half
of December, apparently largely induced by price
discounting, and sales of motor vehicles evidenced
significant further weakness as the month progressed.
Business confidence appeared to have deteriorated
further since the December meeting amid widespread
reports of reductions in planned production and capital spending. Elevated energy costs were continuing
to drain consumer purchasing power and were adding
to the costs of many business firms, with adverse
effects on profits and stock market valuations. Interacting with these developments were forecasts of
further declines in business profits over coming quarters. On the more positive side, housing activity
appeared to be responding to lower mortgage interest
rates, and on the whole nonresidential construction
activity seemed to be reasonably well maintained.
Moreover, while the expansion had weakened and
economic activity might remain soft in the near term,
the longer-term outlook for reasonably sustained economic expansion, supported by easier financial conditions and the response of investment and consumption to rising productivity and living standards, was
still quite good. Inflation expectations appeared to be
declining, with businesses continuing to encounter
marked and even increased resistance to their efforts
to raise prices. On balance, the information already in
hand indicated that the expansion clearly was weakening and by more than had been anticipated. In the
circumstances, prompt and forceful policy action
sooner and larger than expected by financial markets
seemed called for.
Against this background, all the members supported a proposal for an easing of reserve conditions
consistent with a reduction of 50 basis points in the
federal funds rate to a level of 6 percent. The Committee voted to authorize and direct the Federal
Reserve Bank of New York, until it was instructed
otherwise, to execute transactions in the System
Account in accordance with the following domestic
policy directive:
The Federal Open Market Committee seeks monetary
and financial conditions that will foster price stability and
promote sustainable growth in output. To further its longrun objectives, the Committee in the immediate future
seeks conditions in reserve markets consistent with a reduction in the federal funds rate to an average of around
6 percent.
The vote encompassed approval of the sentence
below for inclusion in the press statement to be
released shortly after the meeting:
Against the background of its long-run goals of price
stability and sustainable economic growth and of the information currently available, the Committee believes that
the risks are weighted mainly toward conditions that may
generate economic weakness in the foreseeable future.
Votes for this action: Messrs. Greenspan, McDonough,
Ferguson, Gramlich, Hoenig, Kelley, Meyer, Minehan,
Moskow, and Poole. Votes against this action: None.
Chairman Greenspan indicated that shortly after
this meeting the Board of Governors would consider
pending requests by several Federal Reserve Banks
to reduce the discount rate by 25 basis points. At the
time of this conference call meeting, no pending
requests for a 50 basis point reduction were outstanding, but the press release would indicate that the
Board would be prepared to consider requests for
further reductions of 25 basis points if they were
received.
Donald L. Kohn
Secretary
231
Legal Developments
FINAL RULE—AMENDMENT TO REGULATION A
The Board of Governors is amending 12 C.F.R. Part 201,
its Regulation A (Extensions of Credit by Federal Reserve
Banks; Change in Discount Rate), to reflect its approval of
a decrease in the basic discount rate at each Federal Reserve Bank. The Board acted on requests submitted by the
Boards of Directors of the twelve Federal Reserve Banks.
The amendments to Part 201 (Regulation A) were effective January 31, 2001. The rate changes for adjustment
credit were effective on the dates specified below:
Part 201—Extensions of Credit by Federal Reserve
Banks (Regulation A)
ATM operators that impose a fee for providing electronic
fund transfer services to post a notice in a prominent and
conspicuous location on or at the ATM. The operator must
also disclose that a fee will be imposed and the amount of
the fee, either on the screen of the machine or on a paper
notice, before the consumer is committed to completing the
transaction. In addition, when the consumer contracts for
an electronic fund transfer service, financial institutions are
required to provide initial disclosures, including a notice
that a fee may be imposed for electronic fund transfers
initiated at an ATM operated by another entity.
Effective March 9, 2001, 12 C.F.R. Part 205 is amended
as follows:
Part 205—Electronic Fund Transfers (Regulation E)
1. The authority citation for 12 C.F.R. Part 201 continues
to read as follows:
Authority:
12 U.S.C. 343 et seq., 347a, 347b, 347c, 347d,
348 et seq., 357, 374, 374a and 461.
2. Section 201.51 is revised to read as follows:
Section 201.51—Adjustment credit for depository
institutions.
The rates for adjustment credit provided to depository
institutions under section 201.3(a) are:
Federal Reserve Bank
Rate
Effective
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
January 31, 2001
January 31, 2001
January 31, 2001
January 31, 2001
January 31, 2001
January 31, 2001
January 31, 2001
February 1, 2001
January 31, 2001
February 1, 2001
January 31, 2001
January 31, 2001
1. The authority citation for Part 205 would continue to
read as follows:
Authority:
15 U.S.C. 1693-1693r.
2. Section 205.7 is amended by adding a new paragraph
(b)(l 1) to read as follows:
Section 205.7—Initial disclosures.
(b) Content of disclosures. * * *
(11) ATM fees. A notice that a fee may be imposed by
an automated teller machine operator as defined
in section 205.16(a)(1), when the consumer initiates an electronic fund transfer or makes a balance inquiry, and by any network used to complete the transaction.
3. A new section 205.16 is added to read as follows:
FINAL RULE—AMENDMENT TO REGULATION E
Section 205.16—Disclosures at automated teller
machines.
The Board of Governors is amending 12 C.F.R. Part 205,
its Regulation E, implementing the Electronic Fund Transfer Act. The revisions implement amendments to the act
contained in the Gramm-Leach-Bliley Act that require the
disclosure of certain fees associated with automated teller
machine (ATM) transactions. The amendments require
(a) Definition. Automated teller machine operator means
any person that operates an automated teller machine
at which a consumer initiates an electronic fund transfer or a balance inquiry and that does not hold the
account to or from which the transfer is made, or about
which an inquiry is made.
232
Federal Reserve Bulletin • April 2001
(b) General. An automated teller machine operator that
imposes a fee on a consumer for initiating an electronic fund transfer or a balance inquiry shall:
(1) Provide notice that a fee will be imposed for
providing electronic fund transfer services or a
balance inquiry; and
(2) Disclose the amount of the fee.
(c) Notice requirement. An automated teller machine operator must comply with the following:
(1) On the machine. Post the notice required by paragraph (b)(1) of this section in a prominent and
conspicuous location on or at the automated teller
machine; and
(2) Screen or paper notice. Provide the notice required by paragraphs (b)(1) and (b)(2) of this
section either by showing it on the screen of the
automated teller machine or by providing it on
paper, before the consumer is committed to paying
a fee.
(d) Temporary exemption. Through December 31, 2004,
the notice requirement in paragraph (c)(2) of this section does not apply to any automated teller machine
that lacks the technical capability to provide such
information.
(e) Imposition offee. An automated teller machine operator may impose a fee on a consumer for initiating an
electronic fund transfer or a balance inquiry only if
(1) The consumer is provided the notices required
under paragraph (c) of this section, and
(2) The consumer elects to continue the transaction or
inquiry after receiving such notices.
4. Under Appendix A, A-2 is amended by adding a new
paragraph (j) to read as follows:
Appendix A to Part 205—Model Disclosure Clauses
and Forms
A-2-Model Clauses for Initial Disclosures (Section
205.7(B))
(j) ATM fees (section 205.7(b)(l 1)). When you use an
ATM not owned by us, you may be charged a fee by the
ATM operator [or any network used] (and you may be
charged a fee for a balance inquiry even if you do not
complete a fund transfer).
5. In Supplement I to Part 205, the following amendments
would be made:
a. Under Section 205.7—Initial Disclosures, under Paragraph 7(b)(5)-Fees, paragraph 3. is revised;
b. Under Section 205.9-Receipts at Electronic Terminals;
Periodic Statements, under Paragraph 9(a)(1)-Amount,
paragraph 1. is revised and a new paragraph 2 is added;
and
c. A new Section 205.16—Disclosures at Automated
Teller Machines is added. The additions and revision
read as follows:
Supplement I to Part 205—Official Staff
Interpretations
Section 205.7—Initial Disclosures
7(b) Content of Disclosures
Paragraph 7(b)(5)-Fees
3. Interchange system fees. Fees paid by the accountholding institution to the operator of a shared or interchange ATM system need not be disclosed, unless they are
imposed on the consumer by the account-holding institution. Fees for use of an ATM that are debited directly from
the consumer's account by an institution other than the
account-holding institution (for example, fees included in
the transfer amount) need not be disclosed. (See section
205.7(b)(ll) for the general notice requirement regarding
fees that may be imposed by ATM operators and by a
network used to complete the transfer.)
Section 205.9—Receipts at Electronic Terminals;
Periodic Statements
Paragraph 9(a)(1)-Amount
1. Disclosure of transaction fee. The required display of a
fee amount on or at the terminal may be accomplished
by displaying the fee on a sign at the terminal or on the
terminal screen for a reasonable duration. Displaying
the fee on a screen provides adequate notice, as long as
a consumer is given the option to cancel the transaction
after receiving notice of a fee. (See section 205.16 for
the notice requirements applicable to ATM operators
that impose a fee for providing EFT services.)
2. Relationship between section 205.9(a)(1) and section
205.16. The requirements of sections 205.9(a)(1) and
205.16 are similar but not identical.
i. Section 205.9(a)( 1) requires that if the amount of the
transfer as shown on the receipt will include the fee,
then the fee must be disclosed either on a sign on or
at the terminal, or on the terminal screen. Section
205.16 requires disclosure both on a sign on or at
the terminal (in a prominent and conspicuous loca-
Legal Developments
tion) and on the terminal screen. Section 205.16
permits disclosure on a paper notice as an alternative to the on-screen disclosure.
ii. The disclosure of the fee on the receipt under section 205.9(a)(1) cannot be used to comply with the
alternative paper disclosure procedure under section
205.16, if the receipt is provided at the completion
of the transaction because, pursuant to the statute,
the paper notice must be provided before the consumer is committed to paying the fee.
iii. Section 205.9(a)(1) applies to any type of electronic
terminal as defined in Regulation E (for example, to
POS terminals as well as to ATMs), while section
205.16 applies only to ATMs.
Section 205.16—Disclosures at Automated Teller
Machines
16(b) General
233
quire Resource's subsidiary bank, Resource Trust Company, both in Minneapolis, Minnesota.1
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(66 Federal Register 798 (2001)). The time for filing
comments has expired, and the Board has considered the
proposal in light of the factors set forth in section 3 of the
BHC Act.
Schwab, with total consolidated assets of $35.5 billion,
is the 43rd largest commercial banking organization in the
United States, controlling less than 1 percent of the total
assets of insured commercial banks in the United States.2
Schwab, through U.S. Trust, operates depository institutions in California, Connecticut, the District of Columbia,
Florida, New Jersey, New York, Oregon, Pennsylvania,
and Texas.
Resource operates only in Minnesota. It controls
the 82nd largest depository institution in the state, with
$100.3 million in deposits, representing less than 1 percent
of total deposits in depository institutions in Minnesota.3
After consummation of the proposal, Schwab would remain the 43rd largest commercial banking organization
in the United States, with total consolidated assets of
$35.6 billion.
Paragraph 16(b)(1)
Interstate Analysis
1. Specific notices. An ATM operator that imposes a fee
for a specific type of transaction such as a cash withdrawal, but not a balance inquiry, may provide a general
statement that a fee will be imposed for providing EFT
services or may specify the type of EFT for which a fee
is imposed.
Section 3(d) of the BHC Act 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.4 For purposes of the BHC Act, the home state of
Applicants is New York, and Schwab proposes to acquire
Resource Trust Company, which is located in Minnesota.
All the conditions for an interstate acquisition enumerated
in section 3(d) are met in this case.5 In light of all the facts
ORDERS ISSUED UNDER BANK HOLDING COMPANY
ACT
Orders Issued Under Section 3 of the Bank Holding
Company Act
The Charles Schwab Corporation
San Francisco, California
U.S. Trust Corporation
New York, New York
Order Approving Acquisition and Merger of Bank
Holding Companies
The Charles Schwab Corporation ("Schwab") and its
wholly owned subsidiary, U.S. Trust Corporation ("U.S.
Trust"), each a bank holding company within the meaning
of the Bank Holding Company Act ("BHC Act") (together
"Applicants"), have requested the Board's approval under
section 3 of the BHC Act (12U.S.C. 1842) to acquire
Resource Companies, Inc. ("Resource"), and thereby ac
1. Applicants propose to merge Resource into U.S. Trust, with U.S.
Trust as the surviving corporation. In addition, Applicants propose to
merge Resource Trust Company into U.S. Trust Company, Greenwich, Connecticut ("UST-Connecticut"), with UST-Connecticut as
the surviving corporation. The merger of Resource Trust Company
and UST-Connecticut is subject to review by the Federal Deposit
Insurance Corporation ("FDIC") under the Bank Merger Act
(12 U.S.C. § 1828(c)).
2. All data used for purposes of calculating nationwide rankings are
as of September 30, 2000. All other banking data are as of June 30,
2000.
3. In this context, depository institutions include commercial banks,
savings banks, and savings associations.
4. See 12 U.S.C. § 1842(d). A bank holding company's home state
is the state in which the total deposits of all banking subsidiaries of
such company were the largest 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).
5. 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and (B).
Applicants meet the capital and managerial requirements established
under applicable law. Resource Trust Company has been in existence
and operated for the minimum period of time required by applicable
state law. On consummation, Schwab would control less than 10 percent of the total amount of deposits of insured depository institutions
in the United States. All other requirements under section 3(d) of the
BHC Act would be met on consummation of the proposal.
234
Federal Reserve Bulletin • April 2001
of record, the Board is permitted to approve the proposal
under section 3(d) of the BHC Act.
Competitive Considerations
Section 3 of the BHC Act prohibits the Board from approving a proposal that would result in a monopoly or be in
furtherance of a monopoly. The BHC Act also prohibits the
Board from approving a proposal that would substantially
lessen competition in any relevant banking market unless
the anticompetitive effects of the proposal in that banking
market 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.6
The proposal involves the acquisition of a bank in Minnesota, a state in which Applicants do not have banking
operations. Based on this and all the facts of record, the
Board concludes that consummation of the proposal would
not result in any significantly adverse effects on competition or on the concentration of banking resources in any
relevant banking market.
Financial and Managerial Considerations
The BHC Act requires the Board to consider the financial
and managerial resources and future prospects of the companies and banks involved in the proposal and certain other
supervisory factors. The Board has reviewed these factors
in light of all the facts of record, including supervisory
reports of examination, other confidential supervisory information assessing the financial and managerial resources
of the organizations, and financial information provided by
Applicants. The Board notes that Applicants and Resource
and their subsidiary banks currently are well capitalized
and are expected to remain so on consummation of the
proposal. Based on all the facts of record, the Board
concludes that the financial and managerial resources and
the future prospects of Applicants, Resource, 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.
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 depository
institutions by their appropriate Federal banking agencies.7
United States Trust Company of New York, New York,
New York ("UST-New York"), the lead depository institution of Applicants, received an "outstanding" rating at its
most recent CRA performance examination by the Federal
Reserve Bank of New York, as of April 3, 2000. USTConnecticut received a "satisfactory" rating from the
FDIC, as of February 23, 1998.8 Resource Trust Company
received an "outstanding" rating at its most recent CRA
performance examination by the FDIC, as of July 15, 1998.
The Board received comments from a single commenter
("Protestant") objecting to the proposal. Protestant asserted that neither Applicants' subsidiary depository institutions nor Resource Trust Company are serving the credit
needs of their communities, especially low- and moderateincome ("LMI") communities. Protestant also claimed that
the CRA performance examinations of Applicants' subsidiaiy depository institutions, particularly UST-Connecticut,
and Resource Trust Company are out-of-date and should not
be relied on to assess the CRA performance of the depository institutions. In addition, Protestant asserted that the
CRA performance examination of UST-Connecticut is inadequate because it does not assess the activities conducted
by UST-Connecticut at offices opened since its last examination, particularly the bank's Pennsylvania and District of
Columbia offices.
In assessing the convenience and needs factor in this
case, the Board has carefully considered all the facts of
record. As noted above, this includes review of the CRA
performance examinations of the depository institutions
involved in the proposal. In addition, the Board has considered confidential supervisory information provided by the
appropriate Federal banking agencies for the institutions
involved, and information provided by the Applicants on
the record of their depository institutions in meeting the
convenience and needs of their communities since their
last CRA performance examinations.
Convenience and Needs Factor
In acting on a proposal under section 3 of the BHC Act, the
Board is required to consider the effect of the proposal on
the convenience and needs of the communities to be
served. 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"). Accordingly, the Board has carefully considered
the effect of the proposed merger on the convenience and
needs of the communities to be served and the CRA
records of performance of the institutions involved in light
of all the facts of record.
6. See 12 U.S.C. § 1842(c).
7. The Interagency Questions and Answers Regarding Community
Reinvestment provides that an institution's most recent CRA performance evaluation is an important and often controlling factor in the
consideration of an institution's CRA record because it represents a
detailed evaluation of the institution's overall record of performance
under the CRA by its appropriate Federal banking agency. 65 Federal
Register 25,088 and 25,107 (2000).
8. The other subsidiary depository institutions of Applicants also
received "satisfactory" ratings at their most recent CRA performance
examinations. U.S. Trust Company of California, N.A., Los Angeles,
California, received a "satisfactory" rating from the Office of the
Comptroller of the Currency ("OCC"), as of July 19, 1999; U.S. Trust
Company of Florida Savings Bank, Palm Beach, Florida, received a
"satisfactory" rating from the Office of Thrift Supervision, as of
November 12, 1997; U.S. Trust Company of New Jersey, Princeton,
New Jersey, received a "satisfactory" rating from the FDIC, as of
April 27, 1999; and U.S. Trust Company of Texas, N.A., Dallas,
Texas, received a "satisfactory" rating from the OCC, as of June 25,
1997.
Legal Developments
The subsidiary depository institutions of Applicants and
Resource Trust Company are wholesale banking institutions that provide investment management, corporate trust,
financial and estate planning, fiduciary, and private banking services for institutions and high net worth individuals.
Each of the depository institutions involved in the proposal
has been designated a "wholesale bank" and has been
evaluated as such under the CRA regulations of the federal
banking agencies.9
Protestant questioned the appropriateness of the wholesale bank designations of the subsidiary depository institutions of Applicants and Resource Trust Company. Protestant asserted that UST-New York, UST-Connecticut, and
the other subsidiary depository institutions of Applicants
make a substantial volume of mortgage loans and hold
themselves out to the public as mortgage lenders and,
therefore, should not be accorded wholesale bank status
under the CRA.
The Board recently considered the wholesale bank designations of the subsidiary depository institutions of U.S.
Trust in response to comments submitted by Protestant in
connection with Schwab's application under the BHC Act
to acquire U.S. Trust.10 The initial determination of the
wholesale bank status of a depository institution is made
by the institution's appropriate Federal banking agency and
is reviewed by the agency during each CRA performance
examination of the institution. The Board gives great
weight to the determination made by examiners because
that review is made on-site and encompasses an evaluation
of all the activities of the institution by the agency charged
by the CRA with responsibility for assessing the CRA
performance of the institution. As noted above, examiners
reaffirmed the wholesale bank status of each depository
institution involved in the proposal at its most recent CRA
performance examination. The Board has also consulted
with the appropriate Federal banking agencies for depository institutions involved in the proposal concerning their
current status as wholesale banks. Based on this information, the Board has considered the CRA record of each
depository institution involved in the proposal pursuant to
the community development test appropriate for wholesale
banks. The Board has forwarded the comments of Protestant to the appropriate Federal banking agencies for the
depository institutions so that they can be considered in the
next examinations of the institutions.11
9. Designation as a wholesale bank requires the appropriate Federal
banking agency to evaluate a bank's record of CRA performance
under a separate "community development test." See, e.g., 12 C.F.R.
228.25(a). This test evaluates a wholesale bank on its record of
community development services, community development investments, and community development lending. See, e.g., 12 C.F.R.
228.25(c). The primary purpose of any service, investment, or loan
considered under the test must be "community development," which
is defined in terms of specific categories of activities that benefit LMI
individuals, LMI areas, or small businesses or farms. See, e.g.,
12 C.F.R. 228.12(h).
10. See The Charles Schwab Corporation, 86 Federal Reserve
Bulletin 494 (2000).
11. Protestant also maintained that Home Mortgage Disclosure Act
(12 U.S.C. § 2801 et seq.) ("HMDA") data for 1999 demonstrate
235
In its review of the convenience and needs factor under
the BHC Act, the Board has carefully considered the entire
record in this case. Based on all the facts of record, and for
the reasons discussed above, the Board concludes that
considerations relating to the convenience and needs factor, including the CRA performance records of the relevant
insured depository institutions, are consistent with approval of the 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.12 The Board's approval
is specifically conditioned on compliance by Applicants
with all the commitments and representations made in
connection with this application. For purposes of this action, the commitments and conditions relied on by the
Board in reaching its decision are deemed to be conditions
imposed in writing by the Board in connection with its
racial disparities in the loans made by Applicants and Resource. The
Board has recognized that HMDA data alone provide an incomplete
measure of an institution's lending in its community, and that these
data have limitations that make them an inadequate basis, absent other
information, for concluding that an institution has engaged in illegal
lending discrimination. The limitations of HMDA data are even
greater when, as in this case, the relevant institutions are not engaged
in the business of mortgage lending. For example, Resource Trust
Company originated only ten loans totaling $2.1 million from 1997
through 1999 that were reported under HMDA. In light of the limitations of HMDA data, particularly as applied to wholesale banks, the
Board has carefully reviewed other information, particularly examination reports that provide an on-site evaluation of compliance with the
fair lending laws by Applicants' subsidiary depository institutions and
Resource Trust Company. Examiners found no substantive violations
of antidiscrimination laws or other illegal credit practices at any of the
depository institutions involved in this proposal, and the Board incorporates those findings in this order. Protestant also requested that the
Board consider the HMDA data of the Applicants and Resource for
2000. However, these data are not required to be submitted until
March 1,2001.
12. Protestant also requested that the Board hold a public meeting or
hearing on the proposal. Section 3 of the BHC Act does not require
the Board to hold a 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 appropriate supervisory authorities.
Under its rules, the Board also may, in its discretion, hold a public
meeting or hearing on an application to acquire a bank if a meeting or
hearing is necessary or appropriate to clarify factual issues related to
the application and to provide an opportunity for testimony. 12 C.F.R.
225.16(e). The Board has carefully considered the request for a public
meeting or hearing in light of all the facts of record. In the Board's
view, the public has had ample opportunity to submit comments on
the proposal and, in fact, Protestant has submitted written comments
that have been carefully considered by the Board in acting on the
proposal. The Protestant's request fails to identify disputed issues of
fact that are material to the Board's decision and that may be clarified
by a public meeting or hearing. The Protestant's request also fails to
show why a public meeting or hearing is necessary for the proper
presentation or consideration of the Protestant's views. For these
reasons, and based on all the facts of record, the Board has determined
that a public meeting or hearing is not required or warranted in this
case. Accordingly, the request is hereby denied.
236
Federal Reserve Bulletin • April 2001
findings and decision and, as such, may be enforced in
proceedings under applicable law.
The acquisition of Resource shall not be consummated
before the fifteenth calendar day after the effective date of
this order, or later than three months after the effective date
of this order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of
San Francisco, acting pursuant to delegated authority.
By order of the Board of Governors, effective February 26, 2001.
Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Meyer and Gramlich. Absent and not voting:
Governor Kelley.
ROBERT DEV. FRIERSON
Associate Secretary of the Board
Firstar Corporation
Milwaukee, Wisconsin
U.S. Bancorp
Minneapolis, Minnesota
Order Approving Merger of Bank Holding Companies
Firstar Corporation ("Firstar"), 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 merge with
U.S. Bancorp and thereby acquire control of U.S. Bancorp's subsidiary banks, including its lead subsidiary bank,
U.S. Bank National Association, Minneapolis, Minnesota
("U.S. Bank"). 1 The resulting bank holding company
would be named U.S. Bancorp ("New U.S. Bancorp") and
have its headquarters also in Minneapolis.2
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(65 Federal Register 68,134 (2000)). The time for filing
comments has expired, and the Board has considered the
proposal and all comments received during the comment
period in light of the factors set forth in section 3 of the
BHC Act.
Firstar, with total consolidated assets of $74 billion, is
the 17th largest commercial banking organization in the
United States, controlling approximately 1.4 percent of
total banking assets of insured commercial banks in the
United States ("total U.S. banking assets").3 Firstar operates subsidiary banks in Arizona, Arkansas, Florida, Illi-
1. U.S. Bancorp's other subsidiary banks are U.S. Bank National
Association ND, Fargo, North Dakota ("U.S. Bank ND"); U.S. Bank
National Association MT, Billings, Montana ("U.S. Bank MT"); and
U.S. Bank National Association OR, Canby, Oregon ("U.S. Bank
OR").
2. Firstar and U.S. Bancorp also have requested the Board's approval to exercise options to purchase up to 19.9 percent of each
other's common stock if certain events occur. These options would
expire on consummation of the proposed merger.
3. Asset and ranking data are as of June 30, 2000.
nois, Indiana, Iowa, Kansas, Kentucky, Minnesota, Missouri, Ohio, Tennessee, and Wisconsin.
U.S. Bancorp, with total consolidated assets of $86 billion, is the 11th largest commercial banking organization
in the United States, controlling approximately 1.7 percent
of total US. banking assets. U.S. Bancorp operates subsidiary banks in 16 western and midwestern states.
On consummation of the proposal and after accounting
for the proposed divestitures discussed in this order, New
U.S. Bancorp would become the ninth largest commercial
banking organization in the United States, with total consolidated assets of $160 billion, representing approximately 3.1 percent of total U.S. banking assets.4 The combined organization would have a significant presence in the
Midwest and Northwest.
Interstate Analysis
Section 3(d) of the BHC Act 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 the bank holding company if certain conditions are
met. For purposes of the BHC Act, the home state of
Firstar is Wisconsin,5 and the subsidiary banks of U.S.
Bancorp are located in California, Colorado, Illinois, Idaho,
Iowa, Minnesota, Montana, Nebraska, Nevada, North Dakota, Oregon, South Dakota, Utah, Washington, Wisconsin, and Wyoming.6 The Board has reviewed the interstate
banking laws of each state in which Firstar would acquire
banking operations and consulted with the appropriate
banking regulator in each of those states regarding the
permissibility of the proposed transaction under applicable
state law.
All the conditions for an interstate acquisition enumerated in section 3(d) are met in this case. Firstar is adequately capitalized and adequately managed, as defined by
applicable law.7 In addition, the subsidiary banks of U.S.
Bancorp that Firstar would acquire in an interstate transaction have been in existence for the minimum period of time
required by applicable law.8 On consummation of the
4. Firstar and U.S. Bancorp are financial holding companies that are
engaged in various nonbanking activities in the United States and
abroad. Firstar intends to acquire the domestic nonbanking operations
of US. Bancorp in accordance with section 4(k)(4) of the BHC Act
and the post-transaction notice procedures of section 225.87 of Regulation Y. Firstar also has informed the Board that it intends to acquire
U.S. Bancorp's foreign nonbanking operations in accordance with
section 4(c)(13) of the BHC Act and the general consent provisions of
section 211.5 of the Board's Regulation K.
5. A bank holding company's home state is that state in which the
total deposits of all banking subsidiaries of the company were the
largest on the later of July 1, 1966, or the date on which the company
became a bank holding company. 12 U.S.C. § 1841(o)(4)(C).
6. For purposes of section 3(d), the Board considers a bank to be
located in the states in which the bank is chartered, headquartered, or
operates a branch.
7. See 12 U.S.C. § 1842(d)(1)(A).
8. See 12 U.S.C. § 1842(d)(1)(B). With the exception of U.S. Bank
ND, which was chartered in 1997 and primarily engages in credit card
operations, each subsidiary bank of U.S. Bancorp has been in existence for at least five years and, therefore, may be acquired without
Legal Developments
proposal and after accounting for the proposed divestitures,
New U.S. Bancorp and its affiliates 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, or the applicable percentage established by state
law, of total deposits in each state in which the insured
depository institutions of both Firstar and U.S. Bancorp are
located.9 All other requirements of section 3(d) would be
met on consummation of the proposal. Accordingly, based
on all the facts of record, the Board is permitted to approve
the proposed transaction under section 3(d) of the BHC
Act.
Competitive Considerations
Section 3 of the BHC Act prohibits the Board from approving a proposal that would result in a monopoly or would be
in furtherance of any attempt to monopolize the business of
banking in any relevant banking market. The BHC Act also
prohibits the Board from approving a proposed bank acquisition that substantially would lessen competition in any
relevant banking market, unless the Board finds that the
anticompetitive effects of the proposal clearly are outweighed in the public interest by the probable effect of the
proposal in meeting the convenience and needs of the
community to be served.10
Firstar and U.S. Bancorp compete directly in nine local
banking markets in four states.11 The Board has reviewed
carefully the competitive effects of the proposal in each of
these banking markets in light of all the facts of record,
including the number of competitors that would remain in
the markets, the relative share of total deposits in depository institutions controlled by Firstar and U.S. Bancorp in
the markets ("market deposits"),12 the concentration level
regard to any state age requirement. North Dakota law provides that
an out-of-state bank holding company may acquire a North Dakota
bank if a North Dakota holding company would be permitted to
acquire a bank in the acquiring bank holding company's home state
under the same circumstances. N.D. Cent. Code § 6-08.3.3-13. Thus,
the age requirement provisions of the interstate banking statute of the
acquirer's home state, in this case Wisconsin, effectively govern an
interstate acquisition of a North Dakota bank. Wisconsin's interstate
banking statute allows an out-of-state bank holding company to acquire a bank that has been in existence for fewer than five years, but it
requires the acquirer to divest any such bank within two years of the
acquisition. Wis. Stat. Ann. § 221.0901. The Commissioner of Banking and Financial Institutions for the State of North Dakota has
confirmed that Firstar's proposed acquisition of U.S. Bank ND is
consistent with North Dakota's interstate banking provisions if Firstar
divests the bank within two years of acquiring U.S. Bancorp. Firstar
has committed to divest the bank within that period.
9. See 12 U.S.C. § 1842(d)(2).
10. 12 U.S.C. § 1842(c)(1).
11. These banking markets are described in Appendix A.
12. Market share data are as of June 30, 1999, and are based on
calculations in which the deposits of thrift institutions, which include
savings banks and savings associations, are weighted 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, e.g., Midwest Financial Group, 75 Federal
Reserve Bulletin 386 (1989); National City Corporation, 70 Federal
Reserve Bulletin 743 (1984). Thus, the Board regularly has included
237
of market deposits and the increase in this level as measured by the Herfindahl-Hirschman Index ("HHI") under
the Department of Justice Guidelines ("DOJ Guidelines"), 13 and other characteristics of the markets.
A. Certain Banking Markets without Divestitures
Consummation of the proposal without divestitures would
be consistent with Board precedent and the DOJ Guidelines in eight banking markets.14 After consummation of
the proposal, two of these banking markets would remain
unconcentrated and two other banking markets would remain moderately concentrated as measured by the HHI.15
The remaining four markets without divestitures would be
highly concentrated as measured by the HHI, but the
increase in the HHI would be within the threshold levels
established by the DOJ Guidelines and Board precedent.16
B. The Minneapolis-St. Paul, Minnesota Banking Market
Consummation of the proposal without divestitures would
exceed the thresholds in the DOJ Guidelines in the
Minneapolis-St. Paul banking market. Firstar is the fourth
largest competitor in the Minneapolis-St. Paul banking
market, controlling deposits of $1.9 billion, representing
4.7 percent of market deposits.17 U.S. Bancorp is the largest competitor in the Minneapolis-St. Paul banking market,
controlling deposits of $13.4 billion, representing 32.4 percent of market deposits. To reduce the potential for adverse
competitive effects in this banking market, Firstar has
committed to divest 11 branches (the "divestiture branches") that account for approximately $718 million in deposits.18 Firstar has entered into a sale agreement with an
thrift deposits in the market share calculation on a 50-percent weighted
basis. See, e.g., First Hawaiian, Inc., 11 Federal Reserve Bulletin 52
(1991).
13. Under the DOJ Guidelines, 49 Federal Register 26,823 (1984),
a market is considered unconcentrated if the post-merger HHI is under
1000, moderately concentrated if the post-merger HHI is between
1000 and 1800, and highly concentrated if the post-merger HHI is
more than 1800. 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 effects of
limited-purpose lenders and other nondepository financial institutions.
14. These markets are Chicago and Rock Island-Davenport, Illinois;
Ames, Des Moines, Johnson, and Marengo, Iowa; Omaha-Council
Bluffs, Nebraska; and Milwaukee, Wisconsin. The effects of the
proposal on the concentration of banking resources in these markets
are described in Appendix B.
15. The unconcentrated markets are Chicago and Marengo, and the
moderately concentrated markets are Milwaukee and Rock IslandDavenport.
16. These markets are Ames, Des Moines, Johnson, and OmahaCouncil Bluffs.
17. Deposit data are as of June 30, 1999, and have been adjusted to
reflect subsequent mergers and acquisitions.
18. Firstar has committed to execute, before consummation of the
proposal, a sales agreement for the proposed divestiture with a pur-
238
Federal Reserve Bulletin • April 2001
existing competitor in the Minneapolis-St. Paul banking
market regarding the divestiture branches.19 On consummation of the proposal, and after accounting for the divestiture to the proposed purchaser, the combined organization
would become the largest competitor in the MinneapolisSt. Paul banking market. New U.S. Bancorp would control
deposits of $14.6 billion, representing approximately
35.4 percent of market deposits,20 and the HHI would
increase by 187 points to 2308.
Although 114 depository institutions compete in the
Minneapolis-St. Paul banking market, U.S. Bancorp and
Wells Fargo & Company, San Francisco, California
("Wells Fargo"), through their respective predecessor organizations, consistently have led the banking market since
at least I960.21 The Board previously has recognized the
unique structure of the Minneapolis-St. Paul banking market and has indicated that mergers involving one of the two
largest depository institutions in the market warrant close
review because of the size of these institutions relative to
other market competitors. The Board, therefore, has considered whether other factors mitigate the competitive
effects of the proposal or indicate that the proposal would
have a significantly adverse effect on competition in the
market.22
chaser determined by the Board to be competitively suitable and to
complete the divestiture within 180 days after consummation of the
proposal. Firstar further has committed that the divestiture will include at least $700 million in deposits in the Minneapolis-St. Paul
banking market as of the divestiture date. In addition, Firstar has
committed that, if it is unsuccessful in completing any divestiture
within 180 days of consummation, Firstar will transfer the unsold
branch(es) to an independent trustee that is acceptable to the Board
and will instruct the trustee to sell the branch(es) promptly to one
or more alternative purchasers acceptable to the Board. See
BankAmerica Corporation, 78 Federal Reserve Bulletin 338 (1992);
United New Mexico Financial Corporation, 77 Federal Reserve Bulletin 484 (1991).
19. Because of the structure of the Minneapolis-St. Paul banking
market, described herein, Firstar has committed that it will not sell any
branches to the second largest competitor in the market.
20. A commenter expressed concern that the Minneapolis-St. Paul
banking market already was highly concentrated and asserted that
Firstar's proposed divestitures in that market were inadequate to
address competitive concerns. The commenter contended that the
merger as structured violated antitrust laws. This commenter also
criticized Firstar for omitting the identity of the specific branches to be
divested from the public portion of its application, and asserted that
this omission impeded his ability to comment on the proposal's
competitive effects. The Board has concluded, however, that the
public information on the proposed divestitures that Firstar provided,
including the structural effects in the Minneapolis-St. Paul banking
market, was sufficient for interested persons to evaluate and comment
on the competitive effects of the proposal.
21. See, e.g., Norwest Corporation, 82 Federal Reserve Bulletin
580 (1996); First Bank System, Inc., 79 Federal Reserve Bulletin 50
(1993). Wells Fargo is the second largest competitor in the market,
controlling deposits of approximately $13 billion, representing
31.6 percent of market deposits. The third largest competitor controls
6 percent of market deposits, the fifth largest competitor controls
2.2 percent of market deposits, and the remaining competitors each
control less than 2 percent of market deposits.
22. The number and strength of factors necessary to mitigate the
competitive effects of a proposal depend on the level of and size of the
In this case, the Board believes that a number of factors
indicate that consummation of the proposed merger is not
likely to have a significantly adverse effect on competition
in the Minneapolis-St. Paul banking market. With the
proposed divestiture of at least $700 million in deposits,
the combined relative strength of the two largest competitors in the Minneapolis banking market would not increase
significantly.23 The sizable divestiture proposal also would
significantly strengthen the competitive position of the
proposed in-market competitor that has agreed to purchase
the divestiture branches.24
In addition, the record of de novo entry into the
Minneapolis-St. Paul banking market in the last five years
has been unprecedented when compared with other banking markets nationwide and confirms the attractiveness of
the Minneapolis-St. Paul banking market to new entry.
Since 1995, 35 depository institutions have entered the
market de novo by either chartering a new bank or establishing a new branch in the market. Of these de novo
entrants, 11 have entered the market since June 1999. In
addition, 11 depository institutions have expanded their
existing branch networks in the market.
Other factors indicate that the Minneapolis-St. Paul
banking market remains attractive for entry. From 1990 to
2000, the average increase in population for the
Minneapolis-St. Paul Metropolitan Statistical Area
("MSA") exceeded that of both the State of Minnesota and
the entire United States.25 In addition, for each year during
that same period, the unemployment rate in the
Minneapolis-St. Paul MSA was lower than that of Minnesota and the entire United States. Moreover, for the year
that ended on June 30, 1999, the percentage increase in
deposits in the Minneapolis-St. Paul MSA was more than
three times that of other MS As in Minnesota and more than
four times that of the entire United States.26
Based on all the facts of record and for the reasons
discussed above, the Board believes that competitive considerations in the Minneapolis-St. Paul banking market are
consistent with approval in this case. However, the Board
continues to have concerns about the structure of the
Minneapolis-St. Paul banking market and believes that
future mergers involving either of the two largest competitors in that banking market would warrant special consideration. The Board intends to scrutinize carefully any future
acquisition proposal that would increase the market share
increase in market concentration. See NationsBank
Corporation,
84 Federal Reserve Bulletin 129 (1998).
23. The combined market share percentage of the two largest
competitors would increase from 64 percent to 67 percent.
24. The acquirer of the divestiture branches would almost triple its
market share and would become the fourth largest competitor in the
Minneapolis-St. Paul banking market.
25. The population of the Minneapolis-St. Paul MSA increased by
13.4 percent, compared with an increase of 9.7 percent for the State of
Minnesota and 10.9 percent for the entire United States.
26. Deposits in the Minneapolis-St. Paul MSA increased by
16.9 percent, compared with an increase of 2 percent in the DuluthSuperior MSA, 3.3 percent in the St. Cloud MSA, and 5 percent in
the Rochester MSA. Deposits in the entire United States increased by
3.4 percent.
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of one of the two largest competitors in the MinneapolisSt. Paul banking market.
C. Views of Other Agencies and Conclusion
The Department of Justice also has conducted a detailed
review of the anticipated competitive effects of the proposal. The Department has advised the Board that, in light
of the proposed divestitures, the Department believes that
consummation of the proposal likely would not have a
significantly adverse effect on competition in any relevant
banking market.27 The Office of the Comptroller of the
Currency ("OCC") and the Federal Deposit Insurance
Corporation ("FDIC") have been afforded an opportunity
to comment and have not objected to consummation of the
proposal.
After carefully reviewing all the facts of record, including public comments on the competitive factors, and for
the reasons discussed in this order, the Board has concluded that consummation of the proposal likely would not
result in a significantly adverse effect on competition or on
the concentration of banking resources in any of the nine
banking markets in which Firstar and U.S. Bancorp compete directly or in any other relevant banking market.
Accordingly, based on all the facts of record and subject to
completion of the proposed divestitures, the Board has
determined that competitive factors are consistent with
approval of the proposal.
239
In evaluating financial factors in expansion proposals by
banking organizations, the Board consistently has considered capital adequacy to be especially important. The
Board notes that Firstar, U.S. Bancorp, and each of their
subsidiary banks are and on consummation of the proposal
would continue to be well capitalized, as defined in the
relevant regulations of federal banking agencies. The proposed acquisition is structured as an exchange of shares of
Firstar and U.S. Bancorp for shares of New U.S. Bancorp,
and neither Firstar nor New U.S. Bancorp would incur any
debt as a result of the transaction.29
The Board also has considered the managerial resources
of Firstar and U.S. Bancorp and the examination reports of
the federal financial supervisory agencies that supervise
these organizations, including their subsidiary banks.30
Firstar, U.S. Bancorp, and their subsidiary banks are well
managed, with appropriate risk management systems in
place.31 New U.S. Bancorp would select its senior management from the senior executives of Firstar and U.S. Bancorp, which would provide the combined organization with
officers that are experienced and knowledgeable in the
operations and markets of both companies.32 In addition,
the Board has considered Firstar's recent record of successfully integrating acquired organizations and remaining well
managed. Moreover, Firstar and U.S. Bancorp have indicated that they are devoting significant resources to address
all aspects of the merger process.
Financial, Managerial, and Other Supervisory Factors
Section 3 of the BHC Act requires the Board to consider
the financial and managerial resources and future prospects
of the companies and banks involved in the proposal and
certain other supervisory factors. The Board has carefully
considered these factors in light of all the facts of record,
including public comments, reports of examination and
other confidential supervisory information assessing the
financial and managerial resources of the organizations,
and other information provided by Firstar and U.S. Bancorp.28
27. To address concerns expressed by the Department of Justice,
Firstar also will divest branches in the Omaha-Council Bluffs banking
market. These branches are subject to the divestiture commitments
Firstar has made to the Board.
28. A commenter asserted that U.S. Bancorp had a poor record of
employment and third-party vendor development in the AfricanAmerican community. The commenter also expressed concern that
Firstar lent money to a company that allegedly has a history of
employment discrimination on the basis of race. The Board previously
has noted that neither the racial composition of management nor the
effect of a proposed transaction on employment in a community is
among the factors included in the BHC Act. See, e.g., Deutsche Bank
AG, 85 Federal Reserve Bulletin 509 (1999) ("Deutsche Bank
Order")-, Norwest Corporation, 84 Federal Reserve Bulletin 1088
(1998). Although the Board fully supports programs designed to
create and stimulate employment opportunities for all members of
society, the Board also considers the third-party contracting of U.S.
Bancorp to be beyond the scope of the BHC Act, the Community
Reinvestment Act, and other relevant banking statutes. See Deutsche
Bank Order.
29. A commenter indicated that the proposed merger was motivated
by the personal interests of the senior management officials at Firstar
and U.S. Bancorp, rather than by the interests of the shareholders of
those companies. The Board notes that the shareholders of Firstar and
U.S. Bancorp have the opportunity to vote on the proposed transaction
at the special meetings scheduled for shareholders.
30. Several commenters criticized Firstar's management for lobbying the Wisconsin legislature to amend the state's bankruptcy laws to
give bank liens for secured loans a preference in corporate bankruptcy
proceedings over wage claim liens filed by workers. The Board notes
that these commenters' contentions do not allege any illegal activity
or other action that would affect the safety and soundness of the
institutions. This matter also is outside the limited statutory factors
that the Board is authorized to consider when reviewing an application
under the BHC Act.
31. One commenter alleged that inadequate management at
U.S. Bancorp was evidenced by the enforcement action of the Securities and Exchange Commission ("SEC") and lawsuits by investors
against Piper Capital Management, Inc. ("PCM"), a nonbanking
subsidiary of U.S. Bancorp. The violations alleged by the SEC related
to PCM's investment advisory activities in connection with a registered investment company and occurred in 1994, before U.S.
Bancorp's acquisition of PCM in 1998. U.S. Bancorp has provided
detailed information about the steps both PCM and U.S. Bancorp have
taken since 1994 to resolve the issues raised by the SEC and investor
litigation.
32. One commenter cited press reports about the loss of personnel at
one of Firstar's nonbanking subsidiaries. According to these and other
press reports, Firstar has filed lawsuits against certain employees who
left this subsidiary, alleging breach of a noncompete clause. In evaluating the managerial factor, the Board has reviewed the current
managerial resources and future prospects of Firstar's entire organization, including the nonbank subsidiary cited by the commenter.
240
Federal Reserve Bulletin • April 2001
Based on all the facts of record, including confidential
reports of examination and other supervisory information,
the Board has concluded that considerations relating to the
financial and managerial resources of Firstar, U.S. Bancorp, and their respective banking subsidiaries are consistent with approval, as are the other supervisory factors that
the Board must consider under section 3 of the BHC Act.33
Convenience and Needs Considerations
In acting on a proposal under section 3 of the BHC Act, the
Board is required to consider the effects of the proposal on
the convenience and needs of the communities to be served
and take into account the records of the relevant depository
institutions under the Community Reinvestment Act
("CRA"). 34 The CRA requires the federal financial supervisory agencies to encourage financial institutions to help
meet the credit needs of local communities in which they
operate, consistent with safe and sound operation, and
requires the appropriate federal supervisory agency to take
into account an institution's record of meeting the credit
needs of its entire community, including low- and
moderate-income ("LMI") neighborhoods, in evaluating
bank expansion proposals. The Board has carefully considered the convenience and needs factor and the CRA performance records of the subsidiary depository institutions of
Firstar and U.S. Bancorp in light of all the facts of record,
including public comments received on the effect the proposal would have on the communities to be served by the
combined organization.
A. Summary of Public Comments
The Board received approximately 209 comments on the
proposal. Approximately 193 commenters supported the
proposal or commented favorably on Firstar's or U.S.
Bancorp's CRA-related activities. Many of these commenters commended Firstar for providing credit or other services to small businesses, sponsoring community development activities, participating in programs that provide
affordable housing and mortgage financing for LMI individuals, and providing support to nonprofit organizations.
Other commenters related their favorable experiences with
specific programs or services offered by Firstar or U.S.
Bancorp.
33. A commenter cited press reports that U.S. Bancorp had settled
claims alleging violations of consumer protection laws related to its
arrangement with telemarketing organizations for marketing nonfinancial products to consumers, including a claim brought by the Minnesota Attorney General. Based on these press reports, the commenter
asserted that U.S. Bancorp had violated such laws. U.S. Bancorp
discontinued the marketing arrangements and customer information
sharing practices at issue soon after commencement of the Attorney
General's action, settled the various claims, and was not convicted of
any offense in connection with the consumer protection law claims. In
addition, U.S. Bancorp has implemented various changes to its consumer banking policies and procedures to address heightened concerns over consumer privacy issues.
34. 12 U.S.C. § 2901 et seq.
A number of local government agencies involved in
community development also commented favorably on
their experiences with Firstar and U.S. Bancorp. In addition, a number of private organizations commended Firstar
and US. Bancorp for supporting the development of affordable housing for low-income individuals and individuals
with disabilities through loans, grants, and technical assistance. Other private organizations supported the proposal
based on Firstar's and U.S. Bancorp's records of financing
community development projects in neighborhoods with
predominantly LMI and minority residents, and their
records of financing businesses owned by women and
minorities ("women-owned businesses" and "minorityowned businesses") directly and through financial intermediaries. Some community-based organizations observed
that innovative products and services for LMI communities
were developed through partnerships with Firstar and U.S.
Bancorp.
Approximately 16 commenters either opposed the proposal, requested that the Board approve the merger subject
to conditions suggested by the commenter, or expressed
concerns about the records of Firstar, U.S. Bancorp, or both
in meeting the convenience and needs of the communities
they serve. Some commenters generally asserted that
Firstar and U.S. Bancorp had low and declining levels of
home mortgage, small business, and small farm lending,
particularly to LMI or minority individuals or in predominantly minority communities. Based on data submitted
under the Home Mortgage Disclosure Act ("HMDA"),
several commenters alleged that Firstar and U.S. Bancorp
engaged in disparate treatment of LMI and minority individuals in home mortgage lending.35 A commenter also
criticized the level of participation by Firstar and U.S.
Bancorp in government credit enhancement and guaranteed loan programs, particularly in Wisconsin. In addition,
commenters expressed concerns that the proposal would
result in branch closings, less lending and local decisionmaking in rural communities, or the termination or reduction of the affordable housing and community development
products and programs of Firstar and U.S. Bancorp.
Several commenters expressed concern about Firstar's
record of home mortgage lending to LMI or minority
individuals and in LMI or predominantly minority communities, particularly in Chicago, Illinois; Cleveland, Ohio;
St. Louis, Missouri; and Milwaukee, Wisconsin. Some
commenters criticized Firstar's level of small business
lending in LMI and predominantly minority communities
in Chicago. In addition, a commenter alleged that Firstar
provides a low level of banking services and reinvestment
in LMI communities in Cleveland.36 Another commenter
asserted that Firstar has reduced its banking services and
lending to rural LMI individuals and communities, particularly in Wisconsin. A commenter also expressed concerns
35. 12 U.S.C. § 2801 et seq.
36. This commenter also asserted that Firstar management has
failed to ascertain the financial resources needed in LMI and predominantly minority communities in Cleveland.
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regarding Firstar's record of closing branches in LMI and
predominantly minority communities.37
In addition, a commenter criticized U.S. Bancorp's
record of home mortgage and small business lending in
LMI and predominantly minority communities in Minneapolis. The commenter further expressed concern that US.
Bancorp's level of community development and affordable
housing investments was declining.38
B. CRA Performance Examinations
As provided in the CRA, the Board has evaluated the
convenience and needs factor in light of examinations by
the appropriate 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
appropriate federal supervisor.39
All Firstar's subsidiary banks received either "outstanding" or "satisfactory" ratings at the most recent examinations of their CRA performance. In particular, Firstar's
lead bank, Firstar Bank, National Association, Cincinnati,
Ohio ("Firstar Bank"), which now accounts for approximately 93 percent of the total consolidated assets of Firstar,
received a "satisfactory" rating at its most recent CRA
performance evaluation by the OCC, as of July 1998
("1998 Firstar Bank Evaluation").40 All U.S. Bancorp's
37. Several commenters opposed the proposal based on unfavorable
experiences with Firstar in particular loan transactions or business
dealings with the organization. The Board has reviewed these comments in light of the facts of record, including information provided
by Firstar. The Board has provided copies of these comments to the
appropriate federal supervisor of the subsidiary involved for its consideration.
38. One commenter alleged generally that U.S. Bancorp had a poor
record of philanthropy and marketing banking services in the AfricanAmerican community.
39. See Interagency Questions and Answers Regarding Community
Reinvestment, 65 Federal Register 25,088 and 25,107 (2000).
40. Firstar Bank formerly was named Star Bank, N.A. ("Star
Bank"), and was acquired by Firstar in 1998 through a merger with
Star Banc Corporation, Cincinnati, Ohio ("SBC"). See Firstar Corporation, 84 Federal Reserve Bulletin 1083 (1998)
{"Firstar/SBC
Order"). The most recent CRA performance evaluation for Firstar
Bank was the evaluation of Star Bank conducted by the OCC before
the merger. Firstar adopted SBC's CRA program. See Firstar/SBC
Order at 1084. Firstar has engaged in a number of other acquisitions,
such as the acquisition of Mercantile Bancorporation, St. Louis,
Missouri ("Mercantile"), and recently has merged and renamed various banks under the combined organization. See Firstar Corporation,
85 Federal Reserve Bulletin 738 (1999) ("Firstar/Mercantile Order").
Each of the banks that has been merged into Firstar Bank received at
least a "satisfactory" rating at the most recent CRA performance
evaluation by its appropriate federal financial supervisory agency.
Among these predecessor banks are Firstar Bank Illinois, Chicago,
Illinois, which received a "satisfactory" rating from the Federal
Reserve Bank of Chicago ("FRB Chicago"), as of June 1998;
Mercantile Bank, N.A., St. Louis, Missouri, which received a "satisfactory" rating from the OCC, as of June 1997; Firstar Bank Minnesota, N.A., St. Paul, Minnesota, which received a "satisfactory" rating
from the OCC, as of December 1997; Firstar Bank Wisconsin, Madi-
241
subsidiary banks also received either "outstanding" or
"satisfactory" ratings at the most recent examinations of
their CRA performance. In particular, U.S. Bank, which is
U.S. Bancorp's lead bank and now represents approximately 94 percent of the total consolidated assets controlled by US. Bancorp, received a "satisfactory" rating at
its most recent CRA performance evaluation by the OCC,
as of April 1998.41
Examiners found no evidence of prohibited discrimination or other illegal credit practices at any of the insured
depository institutions involved in this proposal and found
no violations of substantive provisions of the fair lending
laws.42 Examiners also reviewed the assessment areas delineated by the subsidiary banks of Firstar and U.S. Banson, Wisconsin, which received an "outstanding" rating from the
FRB Chicago, as of April 1997; and Firstar Bank Milwaukee, N.A.,
Milwaukee, Wisconsin, which received a "satisfactory" rating from
the OCC, as of November 1997. The other two current subsidiary
banks of Firstar include Firstar Bank Midwest, N.A. (formerly Mercantile Bank, Overland Park, Kansas), which received an "outstanding" rating in its most recent CRA performance evaluation by the
OCC, as of September 1998, and Firstar Bank U.S.A., N.A., Waukegan, Illinois ("Firstar USA"), which received a "satisfactory" rating
in its most recent CRA performance evaluation by the OCC, as of
November 1997.
41. In 1997, US. Bancorp was acquired by First Bank System, Inc.,
which retained the U.S. Bancorp name, and U.S. Bank was formerly
named First Bank National Association. U.S. Bancorp has acquired a
number of banks in recent years and has merged and renamed the
banks controlled by the combined organization. See First Bank System, Inc., 83 Federal Reserve Bulletin 689 (1997). All the banks that
have been merged into U.S. Bank have received at least a "satisfactory" rating at the most recent examinations of their CRA performance
by the appropriate federal financial supervisory agency. In addition,
U.S. Bank MT (formerly named First Bank Montana, N.A., Billings,
Montana), received a "satisfactory" rating from the OCC, as of July
1995. U.S. Bank ND (formerly named First Bank National Association, ND, Fargo, North Dakota), a limited-purpose credit card bank,
was chartered on July 31, 1997, and changed its name in March 1998.
The OCC has not rated its record of CRA performance to date. U S .
Bancorp's other subsidiary bank, U.S. Bank OR, is a limited-purpose
cash management bank that is not subject to the CRA.
42. One commenter contended that New Century Financial Corporation, Irvine, California ("New Century"), a nondepository mortgage
company, is a subsidiary of U.S. Bancorp and that it engages in
predatory lending by making subprime loans and imposing prepayment penalties more frequently than its competitors. The commenter
also alleged that New Century engages in a higher level of subprime
lending to African Americans in certain metropolitan areas than its
competitors. U.S. Bancorp has indicated that it currently does not own
or control, in the aggregate, 25 percent or more of the shares of New
Century, or otherwise control New Century. Consequently, New Century is not a subsidiary of U.S. Bancorp for purposes of the BHC Act.
The Board, however, has carefully considered these comments in light
of the relationships between New Century and U.S. Bancorp.
The Board has forwarded copies of the comments regarding New
Century to the Department of Housing and Urban Development
("HUD"), the Department of Justice, and the Federal Trade Commission, which have responsibility for fair lending law compliance by
nondepository companies like New Century. The Board also has
consulted with these agencies. In addition, the Board has considered
information submitted by U.S. Bancorp on New Century's consumer
lending practices, including the processes by which New Century
makes credit available to consumers, the compliance procedures established by New Century, the methodology employed by New Century
in setting risk-based interest rates, and the relationship of New Century with loan brokers and correspondents.
242
Federal Reserve Bulletin • April 2001
corp and did not report that these assessment areas were
unreasonable or arbitrarily excluded LMI areas.
In recent years, Firstar and U.S. Bancorp have acquired
other banking organizations and consolidated their subsidiary banks. The most recent CRA performance evaluations
of their respective subsidiary banks predate the current
structure of the organizations. Therefore, the Board also
has evaluated extensive information submitted by Firstar
and U.S. Bancorp about their CRA performance since the
dates of their most recent CRA performance evaluations.
C. Firstar's CRA Performance Record
Overview. Examiners commended Firstar Bank for its responsiveness to the credit needs in its assessment areas,
particularly the needs of LMI communities and borrowers.
Examiners reported that Firstar Bank offered a variety of
products and programs to assist in meeting the housingrelated credit needs of LMI individuals and communities.
Firstar has implemented its American Dream Home
Loan program, which offers portfolio mortgage loan products designed for LMI borrowers that feature more flexible
credit requirements, low down payments, and reduced interest rates and fees. Firstar represented that, in 1998 and
1999, it originated $68 million in loans under this program.
Firstar also has participated in a number of governmentsponsored home mortgage loan programs. Firstar stated
that, in 1999, it originated loans totaling approximately
$548.6 million under government mortgage programs, such
as those sponsored by the Federal Housing Authority
("FHA") and the Veterans Administration ("VA"). From
January through September 2000, Firstar reportedly made
loans totaling more than $372 million under these programs. Firstar stated that it also provided $83 million in
loans under programs sponsored by the Federal National
Mortgage Association ("FNMA"), the Federal Home
Mortgage Corporation ("FHMC"), and HUD, between
January 1998 and September 2000.
Examiners generally commended the distribution of
Firstar Bank's small businesses lending.43 Firstar reported
that, from January 1998 through 2000, it made small
business loans nationwide totaling more than $5.4 billion,
including more than $110 million in loans sponsored by
the Small Business Administration ("SBA") and more than
$46.6 million in loans sponsored by the Farm Service
Agency ("FSA"). 44
In addition, Firstar noted that, in 1998, it introduced a
five-year lending initiative (the "Star Bank Initiative"),
through which it intends to provide $5.5 billion for mortgage loans to LMI individuals and for small business and
small farm loans in LMI areas of Ohio and Kentucky.
Firstar represented that, since introducing the initiative, it
43. For example, examiners reported that the bank's geographic
distribution of small loans to businesses in the low-income communities in its Cincinnati assessment areas was excellent.
44. In this context, "small business loans" means loans with an
original principal amount of less than $1 million to businesses.
has lent $3.6 billion, including approximately $161 million
in small business loans to businesses in LMI census tracts.
Examiners commended Firstar Bank for the amount of
community development loans that the bank and its affiliates had originated. Examiners also determined that Firstar
Bank's qualified community development investments generally showed good responsiveness to the community development needs of its assessment areas.45
Firstar represented that, since its latest CRA evaluations,
it has maintained a high level of community development
activity in the communities it serves, participated in a
number of loan pools and equity funds to finance affordable housing and small business development, and provided financial support to organizations that engage in such
activities. For example, Firstar stated that, in 1999, it
originated more than $300 million in community development loans throughout its assessment areas. Firstar also
represented that, during the first six months of 2000,
it made qualified community development investments totaling more than $165 million, including more than
$120 million that were eligible for low-income housing tax
credits.
Examiners found that Firstar Bank provided a good level
of banking services in its assessment areas and that the
bank's delivery systems were accessible to all portions of
its assessment areas, including LMI areas. In addition, the
Department of the Treasury advised Firstar that, as of
October 2000, Firstar Bank was the largest institution in
the United States to implement successfully the Electronic
Transfer Account for recipients of federal government
payments at all its branch locations.
Chicago, Illinois. Firstar Bank Illinois, Chicago, Illinois
("Firstar IL"), which was merged into Firstar Bank in May
1999, received a "satisfactory" rating in its last CRA
performance evaluation by the FRB Chicago, as of June
1998 46 Examiners reported that Firstar IL demonstrated a
strong overall level of lending to LMI individuals and in
LMI areas.47 Although noting that the bank's level of
45. For example, during 1996 and 1997, Firstar Bank originated
16 community development loans, totaling $17.9 million in the Cincinnati MSA, most of which were dedicated to housing for LMI
individuals and families. During this time period, Firstar also made
qualified community development investments totaling $8.3 million in
this area.
46. Before that merger, Firstar IL served the Chicago MSA. Firstar
USA, a limited-purpose bank primarily engaged in retail consumer
lending, also is in the Chicago MSA. As noted, Firstar USA received a
"satisfactory" rating in its most recent CRA performance evaluation
by the OCC, as of November 1997. Examiners noted that Firstar USA
adequately provided qualified community development investments,
services, and loans in its assessment area, which included 14 LMI
census tracts out of a total of 32 census tracts.
47. A commenter alleged that Firstar has arbitrarily defined its CRA
assessment area in Chicago to exclude LMI communities. Although a
bank's assessment area delineation is not a separate criterion for CRA
performance, examiners review whether an institution's assessment
area meets regulatory requirements, including whether it arbitrarily
excludes LMI areas. In the 1998 CRA performance evaluation of
Firstar IL, examiners reviewed the bank's assessment area delineation
and concluded that the assessment area for Firstar IL complied with
applicable regulatory requirements. Firstar Bank recently expanded its
Legal Developments
HMDA-reportable lending in LMI census tracts in 1997
was lower than that of lenders in the aggregate, examiners
found that 20 percent of Firstar IL's HMDA-reportable
loans in LMI census tracts were in low-income census
tracts, compared with 10 percent of the HMDA-reportable
loans by lenders in the aggregate.
In 1999, Firstar Bank and Firstar USA originated
HMDA-reportable loans totaling more than $73 million to
LMI borrowers in the Chicago MSA, including more than
$13 million in loans to low- income borrowers. Firstar
stated that its home mortgage lending to LMI individuals
in the Chicago MSA, from January 1998 through 2000,
included approximately $2.5 million under its American
Dream Home Loan program and approximately $7.3 million through FNMA and FHMC loan programs.
Examiners determined that Firstar Bank was responsive
to the borrowing needs of small businesses in its Chicago
assessment areas. In addition, examiners found that Firstar
IL's level of small business lending in LMI census tracts in
its assessment areas had improved during the evaluation
period and generally was comparable with aggregate lending levels in 1997. Firstar stated that it originated more
than 4,600 small business loans, totaling $513 million, in
the Chicago MSA during 1998 through 2000. This included more than $48 million in small business loans in
LMI census tracts in the Chicago MSA.
Examiners noted that, during the evaluation period of the
1998 performance examination, Firstar IL actively sought
opportunities throughout the Chicago MSA to lend in
support of community development. From January 1996
through June 1998, Firstar IL originated 21 community
development loans totaling approximately $15 million. Of
this amount, approximately $8 million supported the development of affordable housing for LMI individuals and
approximately $6 million supported economic development activities to help revitalize or stabilize LMI census
tracts. Examiners also commended the community development investments of Firstar IL in Chicago, noting that
Firstar IL made community development investments totaling approximately $1.4 million from January 1996 through
June 1998.
Firstar has continued its active involvement in community development in the Chicago area. For example, Firstar
stated that since 1997 it has provided more than
$3.7 million in loans to organizations that provide multifamily affordable rental units and has invested more than
$500,000 in a Chicago neighborhood housing organization
that provides affordable housing opportunities to LMI families. In addition, Firstar has made a $1 million equity
investment in a minority-owned community bank and has
made significant deposits in a credit union that serves a
low-income neighborhood.
Cleveland, Ohio. Examiners evaluated Firstar Bank's
CRA performance record in the Cleveland-Lorain-Elyria
MSA ("Cleveland MSA"), as part of the 1998 Firstar Bank
assessment area in Chicago to include six counties in their entirety in
the Chicago MSA.
243
Evaluation. Examiners found that Firstar Bank's lending
performance was excellent in the Cleveland MSA, the
bank's largest market in Ohio. In particular, examiners
commended Firstar Bank for its home-purchase and small
business lending performance in the Cleveland MSA, especially for its distribution of home loans in LMI census
tracts and high level of lending to LMI individuals.
From January 1996 through December 1997, Firstar
Bank originated 37 percent of its home-purchase loans in
the Cleveland MSA in LMI census tracts, which was
significantly higher than the percentage of owner-occupied
housing units in LMI census tracts. Similarly, examiners
noted that Firstar Bank's origination of 40 percent of its
home-purchase loans in the Cleveland MSA to LMI borrowers compared favorably with the percentage of LMI
families in the general population of the Cleveland MSA.
Since the 1998 performance evaluation, Firstar has used
its various lending programs to increase its level of lending
to LMI borrowers and in LMI communities. In 1999,
Firstar Bank originated HMDA-reportable loans totaling
more than $39 million to LMI borrowers in the Cleveland
MSA, including more than $13 million in loans to lowincome borrowers. Firstar reported that, in 1999 and 2000,
the dollar amount of home mortgage loans it originated
under its American Dream Home Loan program in the
Cleveland MSA included $3.3 million to borrowers in LMI
census tracts and $6.9 million to LMI borrowers. In addition, Firstar represented that, from January 1998 through
2000, it provided a total of more than $70 million HMDAreportable loans to LMI individuals in the Cleveland MSA
through its Star Bank Initiative.
In the 1998 Firstar Bank Evaluation, examiners also
commended Firstar Bank for its distribution of small businesses loans in LMI census tracts in the Cleveland MSA.
In 1997, Firstar Bank originated 18 percent of its small
business loans in the Cleveland MSA to businesses in LMI
census tracts.
Since the 1998 Firstar Bank evaluation, Firstar has continued its efforts in making small business loans to businesses in LMI census tracts in the Cleveland MSA. Firstar
stated that, from January 1998 through 2000, it provided
more than $266 million in small business loans in the
Cleveland MSA. Approximately 20 percent of this amount,
measured by number and dollar amount, was made to
businesses in LMI census tracts. Firstar also reported that it
provided small business loans totaling $1.3 million under
SBA-sponsored loan programs in the Cleveland area in
1999, and that this amount increased to $27 million in
2000.
Examiners noted that Firstar Bank provided adequate
levels of community development lending in the Cleveland
MSA and commended the bank for its responsiveness to
community development needs through its investment
activity, which totaled approximately $2.4 million in 1997.
Since the 1998 Firstar Bank Evaluation, Firstar has
expanded its community development programs. Firstar
stated that, as part of the Star Bank Initiative, it provided
more than $27 million in community development loans
and more than $874,000 in grants to organizations in-
244
Federal Reserve Bulletin • April 2001
volved in community development activities in the Cleveland MSA during 1998, 1999, and 2000.
In the 1998 First Bank Evaluation, examiners also determined that Firstar Bank provided a good level of services
in the Cleveland MSA, including in LMI communities, and
that the bank's delivery systems were conveniently located
and accessible to all portions of the bank's assessment
area. Examiners also commended the bank's variety of
services, including its branch and full-service ATM network and its 24-hour telephone banking, bank-by-mail, and
Internet banking services. In particular, examiners noted
that 16 percent of the bank's branches were in LMI areas
and that the bank augmented the availability of branches
through the accessibility of its ATMs in LMI areas. Examiners also found that, during the evaluation period, Firstar
Bank's record of opening and closing branches in the
Cleveland MSA resulted in increased services in LMI
areas and to LMI individuals.
St. Louis, Missouri. The predecessor of Firstar Bank in
the St. Louis, Missouri-Illinois MSA ("St. Louis MSA")
was Mercantile Bank National Association, St. Louis, Missouri ("Mercantile Bank"), which Firstar acquired in
1999.48 As previously noted, Mercantile Bank received a
"satisfactory" rating in its most recent CRA performance
evaluation by the OCC, as of June 1997. In particular,
examiners commended Mercantile Bank for its very good
distribution of HMDA-reportable loans and small business
loans among borrowers of different income levels.
Examiners determined that Mercantile Bank's volume of
HMDA-reportable loans reflected a good responsiveness to
area credit needs. In 1995 and 1996, Mercantile Bank
originated or purchased more than $943 million in HMDAreportable loans, of which 26 percent were made to LMI
borrowers. Examiners noted that Mercantile Bank's distribution of government-sponsored home-purchase loans to
LMI borrowers represented 43 percent of all such loans it
made in 1996 and exceeded the percentage of LMI families
in the general population of the St. Louis MSA.
Since its acquisition of Mercantile Bank, Firstar has
continued a high level of home mortgage lending to LMI
borrowers in the St. Louis MSA. Firstar stated that, in
1999, it originated or purchased more than 2,500 HMDAreportable loans to LMI borrowers, totaling approximately
$91.8 million. During the first 10 months of 2000, Firstar
reported that it originated or purchased HMDA-reportable
loans to LMI borrowers in the St. Louis MSA, totaling
$89.8 million. Firstar also reported that, since Firstar's
acquisition of Mercantile, it has lent $2.7 million to borrowers in LMI census tracts and $2.4 million to minority
borrowers in the St. Louis MSA through its American
Dream Home Loan program. Under its Open Doors program, a home mortgage program designed for LMI borrowers that Mercantile Bank introduced in the St. Louis area,
Firstar Bank reported that it has lent $5.9 million to bor-
48. Firstar acquired Mercantile Bank in 1999 through a merger with
Mercantile Bancorporation and renamed the bank Firstar Missouri,
N.A. In 2000, Firstar merged the bank into Firstar Bank. See Firstar/
Mercantile Order.
rowers in LMI census tracts, $2.2 million to borrowers in
predominantly minority census tracts, and $13 million to
minority borrowers.
In 1999, Firstar announced the St. Louis Loan Initiative,
a five-year $7.6 billion lending program in the St. Louis
MSA to provide home mortgage loans to LMI individuals
and in LMI communities and small business loans to
businesses in LMI areas 49 Firstar represented that, through
November 2000, it has lent more than $1.7 billion in
connection with its St. Louis Loan Initiative, including
$91 million in HMDA-reportable loans to LMI individuals,
$23 million in HMDA-reportable loans to borrowers in
LMI census tracts, and $129 million in small business
loans.50
Examiners commended Mercantile Bank for its level of
community development lending, which totaled $7.9 million from May 1995 through June 1997. These loans
financed the construction and rehabilitation of affordable
housing for LMI families, promoted economic development through financing a construction loan for a business
that primarily serves LMI individuals, and helped fund
nonprofit organizations that provide community services
for LMI families.
Firstar has continued to provide a significant level of
community development lending. For example, in 1999
and 2000, Firstar Bank provided approximately $4.5 million in loans to a developer to construct low-income housing in St. Louis, and a loan of more than $5.4 million to a
not-for-profit organization to develop affordable, lowincome rental housing in St. Louis. In addition, Firstar
reported that it has made low-income housing tax credit
investments exceeding $27 million in the St. Louis MSA
since January 1998.
Milwaukee, Wisconsin. Before its merger into Firstar
Bank in October 1999, Firstar Bank Milwaukee, National
Association, Milwaukee, Wisconsin ("Firstar Milwaukee"), was Firstar's largest subsidiary bank in Wisconsin.
Firstar Milwaukee received a "satisfactory" rating in its
last CRA performance evaluation by the OCC, as of November 1997. Examiners found that Firstar Milwaukee was
responsive to the credit needs of all segments of its service
community. In particular, examiners commended the bank
for the level of its home mortgage and home improvement
lending in LMI census tracts. Examiners also commended
Firstar Milwaukee for making 38 percent of its consumer
loans to LMI borrowers in 1996, a level that exceeded the
percentage of LMI borrowers in the general population of
the bank's assessment area.
Since that performance evaluation, Firstar has continued
to strengthen its record of providing credit to LMI borrowers and in LMI communities. In 1999, Firstar originated
49. In 2000, Firstar also announced that this initiative would include
at least $10 million in mortgage loans and $10 million in small
business loans each year for five years in the LMI neighborhoods of
North St. Louis.
50. Firstar stated that approximately $7.5 million of the small
business loans were made to businesses in LMI census tracts in North
St. Louis.
Legal Developments
HMDA-reportable loans totaling approximately $52 million to LMI borrowers in the Milwaukee MSA, including
more than $12 million in loans to low-income borrowers.
Firstar reported that it also increased its level of homepurchase lending in LMI census tracts by approximately
40 percent during the last three years. Many of these
home-purchase loans were made through Firstar's American Dream Home Loan program. In 1999, Firstar reportedly made housing-related loans through this program in
the Milwaukee, Wisconsin MSA ("Milwaukee MSA"),
totaling $3.5 million to borrowers in LMI census tracts,
$5.8 million to LMI individuals, and $4.4 million to minority borrowers.51 Firstar stated that, in 2000, its housingrelated lending under this program included $6.3 million in
loans to borrowers in LMI census tracts, $9.1 million in
loans to LMI individuals, and $9.5 million in loans to
minority borrowers.52
Examiners commended Firstar Milwaukee for its lending to small businesses, including those in LMI census
tracts. Examiners noted that Firstar Milwaukee had introduced a small business line- of-credit program designed for
emerging small businesses trying to build a credit history,
and had originated small business credit lines totaling more
than $3.5 million under this program.
Firstar stated that its small business lending activity in
the Milwaukee MSA has remained strong since the evaluation. For example, Firstar reported that, in 1998, Firstar
Milwaukee originated small business loans totaling
$81.2 million. Firstar also stated that 17.5 percent of these
small business loans were made to businesses in LMI
census tracts compared with 12.5 percent of the small
business loans made by lenders in the aggregate. In 1999,
Firstar made small business loans totaling approximately
$38 million to businesses in LMI census tracts, including
more than $16 million in small business loans to businesses in low-income census tracts.
State of Wisconsin. Firstar Bank Wisconsin, Madison,
Wisconsin ("Firstar WI"), which was merged into Firstar
Bank in September 1999, received an "outstanding" rating
in its last CRA performance evaluation by the FRB Chicago, as of April 1997. The examiners commended Firstar
WI's responsiveness to the credit needs of LMI individuals
and communities and favorably characterized the distribution of the bank's housing-related loans to LMI borrowers
and in LMI census tracts. For example, examiners found
that the bank and its affiliates made approximately 21 percent of their housing-related loans to LMI borrowers and
51. Firstar stated that, in 1999, its housing-related lending in Wisconsin (including the Milwaukee MSA) under the American Dream
Home Loan program included $3.5 million in loans to borrowers in
LMI census tracts, $6.5 million in loans to LMI individuals, and
$4.6 million in loans to minority borrowers.
52. Firstar reported that its housing-related lending throughout
Wisconsin during 2000 included $7.8 million in loans to borrowers in
LMI census tracts, $13.5 million in loans to LMI borrowers, and
$11.8 million in loans to minority borrowers.
245
more than 10 percent of their housing-related loans to
borrowers in LMI census tracts.53
Firstar represented that it has maintained a strong record
of lending to LMI borrowers and in LMI communities. In
particular, Firstar stated that it has continued to provide a
high level of home-purchase financing and other HMDAreportable lending in its rural assessment areas in Wisconsin and that the dollar amount of home-purchase loans to
LMI individuals and in LMI communities in its rural
assessment areas has increased each year since 1998.54
The CRA performance evaluation of Firstar WI found
that the bank had a strong record of small business and
small farm lending in Wisconsin. Examiners noted that, in
1996, Firstar WI made more than 3,600 small business
loans and originated more than 230 small farm loans.
Examiners stated that approximately 500 of these small
business and farm loans, totaling approximately $42 million, were made in LMI areas. Firstar reported that, in
1998, Firstar WI originated small business loans in
amounts of $100,000 or less, totaling $83.5 million, in
Wisconsin.
In addition, the CRA performance evaluation concluded
that Firstar WI offered a variety of governmentally insured,
guaranteed, and subsidized loans to small businesses, small
farms, and LMI borrowers. For example, examiners noted
that, in 1996, Firstar WI originated SB A loans totaling
$35.4 million and FSA loans totaling $11.7 million. Examiners also commended the bank for participating in a HUD
lending program that offered nontraditional mortgage loans
on real property located on the Lac Courte Oreille Reservation where conventional mortgage lending was difficult
because of certain issues related to perfecting liens on real
property.
Firstar stated that, since the CRA performance evaluation, Firstar Bank has continued to participate actively in
various government-sponsored loan programs. For example, Firstar reported that it made SBA loans totaling
$21.7 million in Wisconsin (excluding the Milwaukee
MSA) in 1998 and 1999. Firstar also represented that
Firstar Bank has continued to participate in various lending
programs operated by the Wisconsin Housing and Economic Development Authority ("WHEDA"). Firstar reported that it originated housing-related and farm loans
under WHEDA programs that totaled $7.6 million in 1998,
$5.2 million in 1999, and $7.8 million in 2000.55
53. Firstar stated that 10 percent of its home mortgage loans in
1997, and 9 percent of its home mortgage loans in 1998, were made to
borrowers in LMI census tracts, which generally was consistent with
the percentage of home mortgage loans made by lenders in the
aggregate to borrowers in LMI census tracts.
54. Firstar reported that it provided $6.5 million in home-purchase
lending to borrowers in LMI census tracts and $13.3 million to LMI
individuals in 1998. By 2000, Firstar's lending level had increased
to $8.8 million in loans to borrowers in LMI census tracts and
$15.4 million in loans to LMI individuals in its rural assessment areas
in Wisconsin.
55. One commenter disagreed with the examiners' conclusions that
Firstar WI had a strong record of small farm lending, and expressed
concern about Firstar's commitment to small farm lending in Wisconsin, particularly to LMI borrowers or to small farms in LMI communi-
246
Federal Reserve Bulletin • April 2001
D. U.S. Bancorp's CRA Performance Record
Overview. As noted previously, U.S. Bancorp's lead bank
subsidiary, U.S. Bank (formerly First Bank, National Association) received a "satisfactory" rating in its most recent
CRA performance evaluation by the OCC, as of April
1998. In addition, the lead subsidiary bank of U.S. Bancorp
before the merger with First Bank System, United States
National Bank of Oregon, Portland, Oregon ("U.S.
National Bank"), received an "outstanding" rating in its
most recent CRA performance evaluation by the OCC, as
of April 1997. The combined organization adopted First
Bank System's affordable housing loan program and U.S.
Bancorp's small business lending program. As noted
above, the Board also has carefully reviewed data on the
lending activities of U.S. Bancorp's subsidiary banks after
the examination.
Examiners commented favorably on U.S. Bank's responsiveness to community lending needs and its distribution of
loans, particularly in LMI communities and to LMI individuals.56 Examiners noted that U.S. Bank demonstrated
excellent distribution of HMDA-reportable loans in LMI
geographies. For example, in six of U.S. Bank's nine
markets, U.S. Bank's percentage of loans made to borrowers in LMI census tracts exceeded 80 percent of the percentage of owner-occupied units in those census tracts. In
1996, U.S. Bank made almost 16,000 HMDA-reportable
loans nationwide, of which 15 percent were made to LMI
borrowers and 23 percent were made to borrowers in LMI
communities.
Examiners found that U.S. Bank originated or participated in a number of flexible lending programs. For exam-
ties. The commenter also expressed concern about Firstar's participation in government-sponsored programs like the WHEDA or the FSA
programs. The number of small farm loans originated by Firstar and
its subsidiaries in Wisconsin decreased by 43 percent from 1997 to
1998 and decreased by approximately 8 percent from 1998 to 1999.
Although Firstar's level of small farm lending has declined somewhat
in Wisconsin, Firstar has continued its high level of distribution of
small farm loans in LMI areas. Firstar reported that, in 1998, it
originated small farm loans in Wisconsin, totaling approximately
$11.4 million. In 1998, 64 percent of Firstar's small farm loans in
Wisconsin were made to borrowers in LMI census tracts. Similarly,
62.7 percent of Firstar's small farm loans in Wisconsin in 1999 were
made to borrowers in LMI census tracts. In 2000, Firstar made small
farm loans totaling at least $5.9 million in LMI census tracts in
Wisconsin.
Firstar represented that it continues to be committed to agricultural
lending in Wisconsin and to programs sponsored by WHEDA and the
FSA. For example, Firstar stated that it increased its level of originations under the WHEDA farm program by approximately 450 percent
from 1999 to 2000. It also participated in a number of FSA programs
in 2000. According to Firstar, it was the fourth largest agricultural
lender in the United States in 1999, with total agricultural loan
originations of more than $1 billion. Firstar stated that it continues to
employ local relationship managers with expertise in agricultural
lending who are available to process the most difficult agricultural
credits. Firstar added that it has implemented a simplified small loan
agricultural policy, featuring a streamlined application process for
loans under $100,000.
56. Examiners especially commended U.S. Bank for its CRA lending performance in Chicago, Illinois, and Denver, Colorado.
pie, the bank's Home Advantage Mortgage program provides a mortgage loan to LMI borrowers with a reduced
interest rate and includes funds for down payment assistance and financing for any property rehabilitation that
may be needed. In 1995 and 1996, U.S. Bank and its
affiliates made Home Advantage Mortgage loans totaling
more than $41 million. Examiners also noted that U.S.
Bank participated in a number of home lending programs
sponsored by state housing and finance agencies, such as
the Colorado Housing and Finance Authority ("CHFA")
and the Nebraska Investment Finance Authority
("NIFA").57
Since the CRA performance evaluations of U.S. Bank
and U.S. National Bank, U.S. Bank has continued to offer
the Home Advantage loans and has adopted U.S. National
Bank's flexible home lending program, Home Partners.
This program for LMI borrowers incorporates flexible
underwriting guidelines and down payments as low as
1 percent, without requiring private mortgage insurance.
US. Bank's level of lending under these programs has
increased in each of the last three years. U.S. Bancorp
stated that, in 1999, it originated loans under these programs totaling $81.9 million and that, in 2000, it increased
the total amount lent to more than $87 million.
Examiners of U.S. National Bank commended the bank
for responding aggressively to the needs of small businesses and participating in innovative small business loan
programs. U.S. National Bank developed the Commercial
Opportunity Loan Program to provide financing to womenowned and minority-owned businesses and to businesses in
economically distressed areas. The program provides flexible underwriting and collateral requirements. Examiners
noted that, from 1994 through 1996, U.S. National Bank
originated loans totaling $24 million under this program
and originated SBA loans totaling $31 million. Examiners
further commended U.S. National Bank for its excellent
distribution of small business loans in LMI areas. In 1996,
U.S. National Bank extended 22.4 percent of the total
number and 25.8 percent of the total dollar amount of its
small business loans to businesses in LMI census tracts.
Examiners also reported that U.S. Bancorp's distribution of
small business and small farm loans based on annual
revenues was good.
Since the CRA performance evaluations, U.S. Bancorp
has continued to provide a large number of small business
loans to businesses in LMI areas.58 U.S. Bancorp stated
that, from January 1998 through October 2000, it provided
57. The CHFA and NIFA programs offer mortgage loans with
below-market interest rates to LMI first-time homebuyers. Under
these programs, U.S. Bank provided loans totaling almost $3.5 million
in 1996. Examiners also noted the participation of U.S. National Bank
in the Oregon State Bond Mortgage Loan Program and found that,
from 1994 through 1996, U S . National Bank originated loans totaling
$19 million under this program.
58. A commenter criticized U.S. Bancorp's volume of farm lending.
U.S. Bancorp stated that it engaged in minimal farm lending, particularly outside certain northwestern states. Although the Board has
recognized that banks help to serve the banking needs of communities
by making a variety of products and services available, the CRA does
Legal Developments
more than 31,000 small business loans, totaling more than
$2 billion, to businesses in LMI areas nationwide.59
Examiners commended U.S. National Bank for its commitment to community development activities and determined that U.S. Bank had an adequate level of community
development loans and investments. Examiners noted that,
from 1994 through 1996, U.S. National Bank made community development loans and investments totaling more
than $143 million. During the same time period, examiners
reported that U.S. Bank made approximately $92.6 million
in community development loans.
U.S. Bancorp has increased its community development
lending and investment activity since the CRA performance evaluations. U.S. Bancorp stated that, from January
1998 through October 2000, U.S. Bank and U.S. Bank MT
made more than $526 million in CRA community development loans that facilitated the development of new affordable housing units. During this same period, U.S. Bancorp
and its subsidiaries reportedly made qualified community
development investments totaling more than $305 million,
including more than $217 million in low-income housing
tax credits.60
Minneapolis, Minnesota. Examiners commended U.S.
Bank's lending performance in the Minneapolis MSA,
noting that the geographic distribution of its HMDAreportable loans was excellent. Since its CRA performance
evaluation, U.S. Bank has continued to provide significant
levels of home mortgage lending in LMI communities in
the Minneapolis MSA. U.S. Bancorp reported that, from
January 1999 through October 2000, U.S. Bank originated
approximately $64 million in HMDA-reportable loans to
borrowers in LMI communities in the Minneapolis MSA,
including $9.8 million in loans under its Home Advantage
and Home Partnership programs and approximately
$10.5 million in loans sponsored by the FHA and the VA.
Examiners noted that U.S. Bank's distribution of its
small business and small farm loans to borrowers of different revenue levels was good, and that its level of small
business and small farm lending in LMI census tracts was
adequate. In 1996, U.S. Bank provided 14 percent of its
small business loans in the Minneapolis MSA to business
in LMI census tracts. U.S. Bancorp reported that, from
January 1998 through October 2000, U.S. Bank provided
more than $149 million in small business loans to businesses in LMI census tracts in the Minneapolis MSA,
not require an institution to provide any specific types of products and
services, such as farm loans, in its assessment area.
59. This represents 22.6 percent of the total number and 28.2 percent of the total dollar amount of U.S. Bancorp's small business loans.
60. U.S. Bancorp reported that its subsidiary, U.S. Affordable Housing Community Development Corporation ("U.S. Affordable Housing
CDC"), has facilitated the development of more than 5,000 affordable
housing units and currently has low-income tax-credit equity investment commitments of more than $370 million. Another subsidiary,
U.S. Bancorp Community Development Corporation, has invested
more than $21 million in various small business and economic development efforts since 1985. U.S. Bancorp also reported that, during
1999 and 2000, it made investments of more than $13.3 million in
mortgage-backed securities that support affordable housing for LMI
individuals and communities.
247
representing 15.8 percent of its total small business lending
in the Minneapolis MSA.
Examiners noted that, in the Minneapolis MSA during
1995 and 1996, U.S. Bank made $32 million in community
development loans and $11.3 million in qualified community development investments. These community development activities included a revolving $4 million loan to a
community development corporation that constructs and
rehabilitates owner-occupied, single-family residences for
LMI families, and investments of more than $7 million in
programs designed to provide affordable housing for LMI
individuals and communities.
U.S. Bancorp represented that, from January 1998
through October 2000, U.S. Bank made approximately
$50.1 million in community development loans in the
Minneapolis MSA, which facilitated the development of
more than 1,700 new affordable housing units. During this
time period, U.S. Bank also reportedly made $40 million in
qualified community development investments, including
investments in a project designed to provide living-wage
jobs to residents of a North Minneapolis LMI neighborhood and in an organization that provides venture capital to
minority-owned businesses in Minnesota.
State of Wisconsin. Examiners noted that U.S. Bank's
geographic distribution of HMDA-reportable loans and
small business and small farm loans in Wisconsin was
excellent. In 1996, 22 percent of U.S. Bank's HMDAreportable loans in Wisconsin were made in LMI census
tracts. This compared favorably to the 15 percent of owneroccupied units in Wisconsin that were located in LMI
census tracts. In 1996, U.S. Bank made 25 percent of its
HMDA-reportable loans in Wisconsin to LMI individuals.61
U.S. Bancorp represented that, from January 1998
through October 2000, U.S. Bank lent approximately
$6.2 million through its Home Advantage and Home Partnership loan programs. During this time period, U.S. Bank
also made other HMDA-reportable loans totaling approximately $10.2 million to borrowers in LMI census tracts in
Wisconsin.
Examiners noted that U.S. Bank adequately responded to
community needs in Wisconsin through its community
development loans and its significant level of qualified
community development investments. In 1995 and 1996,
U.S. Bank made ten community development loans in
Wisconsin totaling approximately $4.5 million, including
approximately $1.5 million in loans to a Milwaukee-based
organization that focuses on providing social and human
services to LMI women. In 1995 and 1996, U.S. Bank
made approximately $1.9 million in qualified community
development investments in Wisconsin.
U.S. Bancorp stated that, from January 1998 through
October 2000, U.S. Bank made community development
loans totaling $2.9 million that financed the development
61. In particular, examiners noted that, in 1996, U.S. Bank made
10 percent of its HMDA-reportable loans in Wisconsin to low-income
individuals, compared with 6 percent by lenders in the aggregate.
248
Federal Reserve Bulletin • April 2001
of almost 500 affordable housing units in LMI communities in Wisconsin. During the same time period, U.S. Bank
reportedly made $3.9 million in qualified community
development investments in Wisconsin.
E. HMDA Data
The Board also has considered the records of Firstar and
U.S. Bancorp in light of comments on HMDA data reported
by their subsidiaries.62 Data for 1998 and 1999 indicate
that Firstar's HMDA lending volume decreased in 1999.
However, this same pattern was evident for lenders in the
aggregate, reflecting the decline in home mortgage loan
demand during a period of rising interest rates. The data
show that some categories of Firstar's housing-related
lending to LMI and minority borrowers and in LMI and
predominantly minority communities were below the lending levels of HMDA-reporting lenders in the aggregate in
some of Firstar's CRA assessment areas, while in others it
exceeded the lending levels of those lenders. For instance,
during 1999 Firstar originated a lower percentage of
HMDA-reportable loans in LMI census tracts and to LMI
individuals in its Chicago assessment areas, while in its
Cleveland assessment area Firstar's percentage of HMDAreportable loans exceeded that of lenders in the aggregate
in these respects. Firstar's percentage of HMDA-reportable
loans to African-American applicants and to borrowers in
predominantly minority census tracts in its Nashville assessment area lagged the percentage for lenders in the
aggregate in 1999, while Firstar's percentage of home
mortgage originations to African Americans and to borrowers in predominantly minority census tracts in Cleveland
exceeded the percentage for those lenders. Firstar's denial
disparity ratios for African-American and Hispanic individuals generally were somewhat higher than the denial disparity ratios for that of lenders in the aggregate in its
assessment areas.63
The 1999 HMDA data for U.S. Bancorp in the MS As
reviewed indicate that U.S. Bancorp's percentage of
housing-related loans to minority individuals generally
approximated or exceeded the percentage achieved by
lenders in the aggregate. Moreover, U.S. Bancorp's denial
disparity ratios for African-American and Hispanic individuals generally were somewhat lower than the denial disparity ratios for lenders in the aggregate in the areas reviewed.
In addition, the data indicate that the percentage of U.S.
Bancorp's housing-related loans to LMI individuals and in
62. Commenters criticized Firstar's record of home mortgage lending to LMI and minority individuals or in LMI and predominantly
minority communities in the Chicago, Cleveland, Milwaukee, and
St. Louis MSAs. Commenters also criticized Firstar's record of home
mortgage lending to minority individuals in the Minneapolis and
Nashville MSAs. In addition, commenters criticized U.S. Bancorp's
record of home mortgage lending to minority applicants in the Denver
and Minneapolis MSAs, and to LMI and minority individuals and in
LMI and predominantly minority communities in the Milwaukee
MSA.
63. The denial disparity ratio compares the denial rate for minority
loan applicants with that for nonminority applicants.
LMI communities generally was comparable with or exceeded that of lenders in the aggregate.
The Board is concerned when the record of an institution
indicates disparities in lending and believes that all banks
are obligated to ensure that their lending practices are
based on criteria that ensure not only safe and sound
lending, but also equal access to credit by creditworthy
applicants regardless of their race or income level.64 The
Board recognizes, however, that HMDA data alone provide
an incomplete measure of an institution's lending in its
community because these data cover only a few categories
of housing-related lending. HMDA data, moreover, provide only limited information about the covered loans.65
HMDA data, therefore, have limitations that make them an
inadequate basis, absent other information, for concluding
that an institution has not assisted adequately in meeting its
community's credit needs or has engaged in illegal lending
discrimination.
Because of the limitations of HMDA data, the Board has
considered these data carefully in light of other information. As noted above, examiners found no evidence of
prohibited discrimination or other illegal credit practices at
any of the subsidiary banks of Firstar and U.S. Bancorp.
The record also indicates that Firstar and U.S. Bancorp
have taken a number of affirmative steps to ensure compliance with fair lending laws. Firstar has instituted a corporate fair lending review program, and independent tests are
periodically performed to verify that its subsidiary banks
are in compliance with the program.66 US. Bancorp has
established policies and procedures to ensure compliance
with all fair lending laws and regulations by conducting
underwriting reviews of all retail loan applications, performing periodic comparative file analyses, and presenting
a comprehensive fair lending training program. The Board
also has considered the HMDA data in light of Firstar's
and U.S. Bancorp's overall lending records, which show
64. One commenter alleged that U.S. Bancorp has indirectly supported predatory lending through the business relationships of U.S.
Bank with a number of subprime lenders that the commenter characterized as predatory lenders. According to the applicant, U.S. Bancorp's and Firstar's lending and trust affiliates have corporate loans to
non-affiliated subprime lenders and act as trustee, registrar, and/or
paying agent for securitization transactions. Some trust clients have
securitizations that may have subprime assets as collateral. Firstar and
US. Bancorp have represented that neither has a role, formal or
otherwise, in the lending practices and review processes of their loan
and trust customers nor has any knowledge of the lending practices
followed by the party originating the loans.
65. For example, the data do not account for the possibility that an
institution's outreach efforts may attract a larger proportion of marginally qualified applicants than other institutions attract and 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. HMDA data also may be incomplete and may not identify all
applicants with regard to income level, ethnicity, or other demographic factors.
66. Firstar's fair lending review program describes the underwriting
standards, training programs, and review procedures that are designed
to ensure compliance with all fair lending laws and regulations.
Legal Developments
that their subsidiary banks significantly assist in helping to
meet the credit needs of the communities served, including
LMI areas.
F. Branch Closings
Two commenters expressed concern about the effect of
possible branch closings that might result from this proposal. Firstar and U.S. Bancorp have provided the Board
with their branch closing policies, and the Board has considered the public comments about potential branch closings in light of all the facts of record, including information
provided by Firstar and U.S. Bancorp.
Firstar has indicated that it has no specific plans for any
branch closings or consolidations in connection with this
proposal. Firstar also indicated that it has not completed
the analysis necessary to determine which, if any, branch
closings or consolidations would be needed, and that it has
not made any final decisions about branch closings or
consolidations. Firstar has stated that any decisions to close
or consolidate branches would be made in accordance with
the interagency policy statement on branch closings and
would be attentive to the need for financial services in LMI
communities to be served by the combined organization.67
The Board has carefully considered the branch closing
policies of Firstar and U.S. Bancorp and their records of
opening and closing branches. The Board notes that the
branch closing policies of the subsidiary banks of Firstar
and US. Bancorp provide that the banks must review the
impact that each proposed branch closing would have on
the community and develop a plan to minimize any adverse
impact.
Examiners have reviewed the performance of Firstar's
subsidiary banks under the branch closing policy on several occasions. Examiners noted that changes in Firstar
Bank's branch locations did not adversely affect the availability of services in its assessment areas and that the bank
had opened branches in LMI communities in some assessment areas. In addition, the most recent CRA performance
evaluations of Firstar Bank's predecessors noted generally
that the bank's branch closings did not affect LMI communities in a materially adverse manner and concluded that
the banks' delivery systems were reasonably accessible to
LMI individuals and areas.68 Examiners also found that
U.S. Bank's delivery systems were reasonably accessible to
all portions of its assessment areas and that branch closures
67. Joint Policy Statement Regarding Branch Closings (64 Federal
Register 34,844 (1999).
68. Two commenters alleged that Firstar had a poor record of
closing branches in LMI and predominantly minority communities in
Illinois and Kentucky. In recent years Firstar has participated in a
number of bank mergers and acquisitions and is still in the process of
integrating the institutions involved in these transactions and reconfiguring its branch system. From 1999 to 2000, this process resulted in a
net loss (the number of opened branches minus the number of closed
branches) of 12 branches nationwide, but no reduction in the number
of branches in LMI census tracts. In Illinois and Kentucky, there has
been a net loss of one branch in a moderate-income neighborhood in
each state.
249
had not negatively affected customers residing in LMI
communities.
The Board expects that the subsidiary banks of New U.S.
Bancorp would continue to use a satisfactory branch closing policy for any branch closings that might result from
the proposed transaction. The Board also has considered
that federal banking law provides a specific mechanism for
addressing branch closings. Federal law requires an insured depository institution to provide notice to the public
and to the appropriate federal supervisory agency before
closing a branch.69 The Board also notes that the appropriate federal supervisor for each of Firstar's subsidiary banks
will, in the course of conducting CRA performance examinations, continue to review the branch closing record of
these banks.
G. Conclusion on Convenience and Needs
In reviewing the effects of the proposal on the convenience
and needs of the communities to be served, the Board has
carefully considered the entire record, including all the
information provided by commenters, Firstar, and U.S.
Bancorp, evaluations of the CRA performance of each of
Firstar's and U.S. Bancorp's insured depository institution
subsidiaries, and confidential supervisory information.
Based on all the facts of record and for the reasons
discussed above, the Board concludes that considerations
relating to the convenience and needs factor, including the
CRA performance records of the relevant depository institutions, are consistent with approval of the proposal.70
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.71 In reaching its con-
69. Section 42 of the Federal Deposit Insurance Act (12 U.S.C.
§ 183 lr-1), as implemented by the Joint Policy Statement Regarding
Branch Closings, requires that a bank provide the public with at least
30 days' notice and the appropriate federal supervisory agency 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 closing, consistent with the institution's written policy for
branch closings.
70. Firstar has represented that it would honor the existing CRA
commitments made by Firstar and U.S. Bancorp. Several commenters
requested that Firstar and U.S. Bancorp provide certain commitments
and answer certain questions, or that the Board impose specific
conditions. The Board notes that the CRA requires that, in considering
an acquisition proposal, the Board carefully review the actual performance records of the relevant depository institutions in helping to
meet the credit needs of their communities. Neither the CRA nor the
federal banking agencies' CRA regulations require depository institutions to make pledges concerning future performance under the CRA.
The Board also notes that future activities of New U.S. Bancorp's
subsidiary banks will be reviewed by the appropriate federal supervisors in future performance examinations, and their CRA performance
records will be considered by the Board in any subsequent applications by New U S . Bancorp to acquire a depository institution.
71. Several commenters requested that the Board hold a public
meeting or hearing on the proposal. Section 3(b) of the BHC Act does
250
Federal Reserve Bulletin • April 2001
elusion, the Board has considered all the facts of record in
light of the factors that it is required to consider under the
BHC Act and other applicable statutes.72 The Board's
approval is specifically conditioned on compliance by
Firstar with all the commitments made in connection with
the application, including the branch divestiture commitments discussed in this order. These commitments 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 the subsidiary banks of U.S. Bancorp
may not be consummated before the fifteenth calendar day
after the effective date of this order, and the proposal may
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
Minneapolis, acting pursuant to delegated authority.
By order of the Board of Governors, effective February 12, 2001.
Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley, Meyer, and Gramlich.
ROBERT DEV. FRIERSON
Associate Secretary of the Board
not require the Board to hold a public hearing on an application unless
the appropriate supervisory authority for the bank to be acquired
makes a timely written recommendation of denial of the application.
The Board has not received such a recommendation from the appropriate supervisory authorities.
Under its rules, the Board in its discretion also may hold a public
meeting or hearing on an application to acquire a bank if a meeting or
hearing is necessary or appropriate to clarify factual issues related to
the application and to provide an opportunity for testimony. 12 C.F.R.
225.16(e). The Board has considered carefully the commenters' requests in light of all the facts of record. In the Board's view, commenters have had ample opportunity to submit their views, and numerous
commenters have submitted written comments that have been considered carefully by the Board in acting on the proposal. The commenters' requests fail to demonstrate why their written comments do not
present their views adequately. For these reasons, and based on all the
facts of record, the Board has determined that a public meeting or
hearing is not required or warranted in this case. Accordingly, the
requests for a public meeting on the proposal are denied.
72. Several commenters requested that the Board delay action or
extend the comment period on the proposal. The Board has accumulated a significant record in this case, including reports of examination, supervisory information, public reports and information, and
considerable public comment. In the Board's view, for the reasons
discussed previously, commenters have had ample opportunity to
submit their views and, in fact, have provided substantial written
submissions that have been considered carefully by the Board in
acting on the proposal. Moreover, the BHC Act and Regulation Y
require the Board to act on proposals submitted under those provisions
within certain time periods. Based on a review of all the facts of
record, the Board has concluded that the record in this case is
sufficient to warrant Board action at this time and that a further delay
in considering the proposal, an extension of the comment period, or a
denial of the proposal on the grounds discussed above or for informational insufficiency is not warranted.
Appendix A
Banking Markets in which Firstar and U.S. Bancorp
Compete Directly
Illinois
Chicago
Cook, DuPage, and Lake Counties.
DavenportRock
Island
Rock Island County, excluding the
towns of Drury and Buffalo Prairie, in
Illinois; the towns of Colona, Edford,
Geneseo, Hanna, and Western in Henry
County, all in Illinois; and Scott County
and the town of Farmington in Cedar
County, all in Iowa.
Iowa
Ames
Boone and Story Counties and the towns
of Marion, Clear Lake, Ellworth, Scott,
Lyon, and Lincoln in Hamilton County.
Des Moines
Polk County and the town of Linn in
Warren County.
Johnson
Johnson County, excluding the town of
Jefferson; the northern portion of Washington County; and the town of Springdale in Cedar County.
Marengo
Iowa County and the southern portion of
Benton County.
Nebraska
Omaha-Council
Bluffs
Omaha-Council Bluffs Ranally Metro
Area ("RMA"); portions of Douglas
County, east of the Elkhora River that
are contiguous to the RMA, in Nebraska; and Pottawattamie County, excluding the eastern portion of the
county, in Iowa.
Minnesota
MinneapolisSt. Paul
Anoka, Hennepin, Ramsey, Washington, Carver, Scott, and Dakota Counties;
Lent, Chisago Lake, Shafer, Wyoming,
and Franconia Townships in Chisago
County, all in Minnesota; Blue Hill,
Baldwin, Orrock, Livonia, and Big Lake
Townships and the City of Elk River in
Sherburne County; Monticello, Otsego,
Buffalo, Frankfort, Rockford, and Franklin Townships in Wright County, all in
Minnesota; and Lanesburgh Township
in Le Sueur County, all in Minnesota;
and the Town of Hudson in St. Croix
County, Wisconsin.
Legal Developments
Wisconsin
Milwaukee
Des Moines
Firstar operates the fourth largest depository institution in the market, controlling
deposits of $475.5 million, representing approximately 8.8 percent of market deposits.
U.S. Bancorp operates the ninth largest depository institution in the market, controlling deposits of $137.4 million, representing approximately 2.5 percent of market
deposits. On consummation of the proposal,
Firstar would operate the second largest depository institution in the market, controlling deposits of $612.9 million, representing approximately 11.3 percent of market
deposits. The HHI would increase by 45
points to 1949.
Johnson
Firstar operates the second largest depository institution in the market, controlling
deposits of $330.4 million, representing approximately 22.8 percent of market deposits. U.S. Bancorp operates the 12th largest
depository institution in the market, controlling deposits of $10.5 million, representing
less than 1 percent of market deposits. On
consummation of the proposal, Firstar
would operate the second largest depository
institution in the market, controlling deposits of $340.9 million, representing approximately 23.6 percent of market deposits. The
HHI would increase by 33 points to 2309.
Marengo
Firstar operates the seventh largest depository institution in the market, controlling
deposits of $21.6 million, representing approximately 6.5 percent of market deposits.
U.S. Bancorp operates the 11th largest depository institution in the market, controlling deposits of $15.6 million, representing
approximately 4.7 percent of market deposits. On consummation of the proposal,
Firstar would operate the third largest depository institution in the market, controlling deposits of $37.2 million, representing
approximately 11.2 percent of market deposits. The HHI would increase by 61
points to 976.
Milwaukee RMA.
Appendix B
Banking Markets Consistent with DOJ Guidelines
without Divestitures
Illinois
Chicago
Firstar operates the 12th largest depository
institution in the market, controlling deposits
of $2 billion, representing approximately 1.5
percent of market deposits. U.S. Bancorp
operates the 36th largest depository institution
in the market, controlling deposits of $531.8
million, representing less than 1 percent of
market deposits. On consummation of the
proposal, Firstar would operate the ninth
largest depository institution in the market,
controlling deposits of $2.6 billion, representing approximately 1.8 percent of market
deposits. The HHI would increase by 1 point
to 838.
Rock Island- Firstar operates the second largest deposiDavenport tory institution in the market, controlling
deposits of $974.4 million, representing approximately 21.1 percent of market deposits. U.S. Bancorp operates the 32nd largest
depository institution in the market, controlling deposits of $700,000, representing less
than 1 percent of market deposits. On consummation of the proposal, Firstar would
operate the second largest depository institution in the market, controlling deposits of
$975.1 million, representing approximately
21.1 percent of market deposits. The HHI
would increase by 1 point to 1112.
Iowa
Ames
Firstar operates the second largest depository institution in the market, controlling
deposits of $186.9 million, representing approximately 14.5 percent of market deposits. U.S. Bancorp operates the 10th largest
depository institution in the market, controlling deposits of $25.3 million, representing
approximately 2 percent of market deposits.
On consummation of the proposal, Firstar
would operate the second largest depository
institution in the market, controlling deposits of $212.2 million, representing approximately 16.5 percent of market deposits. The
HHI would increase by 57 points to 1896.
251
Nebraska
OmahaCouncil
Bluffs
Firstar operates the seventh largest depository institution in the market, controlling
deposits of $229.7 million, representing approximately 2.7 percent of market deposits.
U.S. Bancorp operates the third largest depository institution in the market, controlling deposits of $1.2 billion, representing
approximately 14 percent of market deposits. On consummation of the proposal,
Firstar would operate the second largest de-
252
Federal Reserve Bulletin • April 2001
pository institution in the market, controlling deposits of $1.4 billion, representing
approximately 16.7 percent of market deposits. The HHI would increase by 75
points to 1901.1
Wisconsin
Milwaukee
Firstar operates the second largest depository
institution in the market, controlling deposits
of $4.8 billion, representing approximately
19.9 percent of market deposits. U.S. Bancorp operates the 17th largest depository institution in the market, controlling deposits of
$288.1 million, representing approximately
1.2 percent of market deposits. On consummation of the proposal, Firstar would operate
the second largest depository institution in
the market, controlling deposits of $5 billion,
representing approximately 21.1 percent of
market deposits. The HHI would increase by
48 points to 1348.
FleetBoston Financial Corporation
Boston, Massachusetts
Order Approving the Merger of Bank Holding
Companies
FleetBoston Financial Corporation ("FleetBoston"), a financial holding company within the meaning of the Bank
Holding Company Act ("BHC Act"), has requested the
Board's approval under the BHC Act (12 U.S.C. § 1841
et seq.) to merge with Summit Bancorp., Princeton ("Summit"), and thereby acquire Summit's subsidiary banks,
including its lead subsidiary bank, Summit Bank, Hackensack, both in New Jersey ("Summit-NJ"). 1 FleetBoston
also provided notice under section 25 of the Federal Reserve Act (12 U.S.C. § 601 ^ seq.) and the Board's Regulation K (12 C.F.R. 211) of its intention to acquire Summit
International Trade Finance Corp., also in Princeton
("Summit International"), an agreement corporation subsidiary of Summit-NJ.2
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
1. The proposal would be consistent with the DOJ Guidelines and
Board precedent without divestitures. However, as noted previously,
Firstar has agreed to divest branches in the Omaha- Council Bluffs
banking market to address concerns expressed by the Department of
Justice. After accounting for the proposed divestitures, Firstar would
operate the second largest depository institution in the market, controlling deposits of $1.4 billion, representing approximately 16.3 percent
of market deposits. The HHI would increase by 60 points to 1886.
1. FleetBoston also would acquire Summit's other subsidiary banks:
Summit Bank, Norwalk, Connecticut ("Summit-CT"); and Summit
Bank, Bethlehem, Pennsylvania ("Summit-PA").
2. In addition, FleetBoston has requested the Board's approval to
exercise an option to acquire up to 19.9 percent of Summit's voting
shares. The option would expire on consummation of the proposal.
(65 Federal Register 69,109 (2000)). The time for filing
comments has expired, and the Board has considered the
proposal and all comments received during the comment
period in light of the factors set forth in the BHC Act and
the Federal Reserve Act.
FleetBoston, with total consolidated assets of approximately $179 billion, is the eighth largest commercial banking organization in the United States.3 FleetBoston operates subsidiary banks in Connecticut, Florida, Maine,
Massachusetts, New Hampshire, New Jersey, New York,
and Rhode Island. FleetBoston operates the fourth largest
depository institution in New Jersey, controlling deposits
of $8.8 billion, representing approximately 6.3 percent of
total deposits in insured depository institutions in the state
("state deposits").4 In Connecticut, FleetBoston operates
the largest depository institution, controlling deposits of
$15 billion, representing approximately 25.5 percent of
state deposits.
Summit, with total consolidated assets of approximately
$39.5 billion, is the 27th largest commercial banking organization in the United States. Summit operates subsidiary
banks in Connecticut, New Jersey, and Pennsylvania. Summit operates the largest depository institution in New Jersey, controlling deposits of $20.8 billion, representing approximately 14.8 percent of state deposits. In Connecticut,
Summit operates the 12th largest depository institution,
controlling deposits of $909 million, representing approximately 1.6 percent of state deposits. In Pennsylvania, Summit operates the 10th largest depository institution, controlling deposits of $2.8 billion, representing approximately
1.5 percent of state deposits.
On consummation of the proposal and after accounting
for the proposed divestiture discussed in this order, Fleet
would become the seventh largest commercial banking
organization in the United States, with total consolidated
assets of approximately $218.6 billion. On consummation,
FleetBoston would become the largest banking organization in New Jersey, controlling deposits of $29.6 billion,
representing approximately 20.9 percent of state deposits.
In Connecticut, FleetBoston would control deposits of
$15.9 billion, representing approximately 27.1 percent of
state deposits.
Interstate Analysis
Section 3(d) of the BHC Act 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 the bank holding company if certain conditions are
met. For purposes of the BHC Act, the home state of
3. Asset data are as of September 30, 2000. National ranking data
are as of September 30, 2000, adjusted for transactions consummated
since that date.
4. State deposit and ranking data are as of June 30, 1999, and reflect
acquisitions as of October 2, 2000, for Connecticut, as of September 27, 2000, for New Jersey, and as of February 5, 2001, for
Pennsylvania. In this context, depository institutions include commercial banks, savings banks, and savings associations.
Legal Developments
FleetBoston is Rhode Island,5 and Summit's subsidiary
banks are located in Connecticut, New Jersey, and Pennsylvania.6
The Board may not approve a proposal subject to section
3(d) if, after consummation, the applicant would control
more than 10 percent of the total deposits of insured
depository institutions in the United States.7 In addition,
the Board may not approve a proposal if, on consummation
of the proposal, the applicant would control 30 percent or
more of the total deposits of insured depository institutions
in any state in which both the applicant and the organization to be acquired operate an insured depository institution, or such higher or lower percentage as established by
state law.8
On consummation of the proposal, FleetBoston would
control 2.8 percent of the total deposits of insured depository institutions in the United States.9 FleetBoston would
control less than 30 percent of total deposits held by
insured depository institutions in Connecticut and New
Jersey,10 and would not exceed the state deposit caps of
Connecticut or New Jersey.11
All other requirements of section 3(d) of the BHC Act
also are met. FleetBoston is adequately capitalized and
adequately managed, as defined by applicable law. In addition, Summit's subsidiary banks have been in existence for
the minimum age requirements established by applicable
state law.12 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
Section 3 of the BHC Act prohibits the Board from approving a proposal that would result in a monopoly or would be
in furtherance of an attempt to monopolize the business of
banking in any part of the United States. Section 3 also
5. A bank holding company's home state is that state in which the
total deposits of all banking subsidiaries of the company were the
largest 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. For purposes of section 3(d), the Board considers a bank to be
located in the states in which the bank is chartered, headquartered, or
operates a branch.
7. 12 U.S.C. § 1842(d)(2)(A). For this purpose, insured depository
institutions include all insured banks, savings banks, and savings
associations.
8. 12 U.S.C. § 1842(d)(2)(B)-(D).
9. Data as of June 30, 2000.
10. On consummation, FleetBoston would control 27.1 percent of
insured depository institution deposits in Connecticut and 20.9 percent
of insured depository institution deposits in New Jersey. FleetBoston
currently does not control an insured depository institution in Pennsylvania.
11. See Conn. Gen. Stat. Ann. § 36a-411 (West 2000) (30 percent);
N.J. Stat. Ann. § 17:9A-413 (West 2000) (30 percent). Pennsylvania
does not have a deposit cap that is applicable to the proposal.
12. 12 U.S.C. § 1842(d)(2)(A). See Conn. Gen. Stat. Ann. § 36a-411
(West 2000) (5 year minimum age requirement). Neither New Jersey
nor Pennsylvania has an age requirement that is applicable to the
proposal. The Board also has taken into account FleetBoston's record
of compliance with applicable state community reinvestment laws.
253
prohibits the Board from approving a proposal that would
substantially lessen competition in any relevant banking
market unless the anticompetitive effects of the proposal in
that banking market 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.13
The Board has reviewed carefully the competitive effects
of the proposal in the relevant banking markets in light of
comments received14 and all the facts of record. In particular, the Board has considered the number of competitors
that would remain in the markets, the relative shares of
total deposits in depository institutions in the markets
("market deposits") controlled by the companies involved
in this transaction,15 the concentration levels of market
deposits and the increase in these levels as measured by the
Herfindahl-Hirschman Index ("HHI") under the Department of Justice Merger Guidelines ("DOJ Guidelines"),
and other characteristics of the markets.16
FleetBoston and Summit compete directly in five banking markets. Consummation of the proposal without divestitures would be consistent with Board precedent and the
DOJ Guidelines in four of these markets.17 On consummation, three of these markets would remain moderately
13. 12 U.S.C. § 1842(c)(1).
14. Two commenters expressed concern that the proposal would
have anticompetitive effects in certain banking markets.
15. Market share data are as of June 30, 1999, and are based on
calculations that include the deposits of thrift institutions 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, e.g., Midwest Financial Group, 75 Federal
Reserve Bulletin 386 (1989); National City Corporation, 70 Federal
Reserve Bulletin 743 (1984). Thus, the Board has regularly included
thrift deposits in the calculation of market share on a 50-percent
weighted basis. See, e.g., First Hawaiian, Inc., 11 Federal Reserve
Bulletin 52(1991).
16. Under the DOJ Guidelines, 49 Federal Register 26,823 (1984),
a market is considered unconcentrated if the post-merger HHI is
below 1000, moderately concentrated if the post-merger HHI is between 1000 and 1800, and highly concentrated if the post-merger HHI
is above 1800. 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 eifects) 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 effects of
limited-purpose lenders and other nondepository financial institutions.
17. These markets are the Fairfield Area, Connecticut; Waterbury,
Connecticut; Metropolitan New York-New Jersey; and Philadelphia,
Pennsylvania-New Jersey banking markets. Definitions of these banking markets and the effects of the proposal on the concentration of
banking resources in these markets, are described in the Appendix.
One commenter expressed concern about the elimination of competition in Burlington, Camden, Gloucester, and Mercer Counties in New
Jersey. Burlington, Camden, and Gloucester counties are part of the
Philadelphia banking market. First Union Corp., 84 Federal Reserve
Bulletin 489 (1998). Mercer County is divided between the Philadelphia and the Metropolitan New York-New Jersey banking markets. Id.
and FleetBoston Financial Corp., 86 Federal Reserve Bulletin 751
(2000). As discussed in the Appendix, these markets would remain
unconcentrated or moderately concentrated after consummation, and
there are numerous competitors in these markets.
254
Federal Reserve Bulletin • April 2001
concentrated and one market would be unconcentrated as
measured by the DOJ Guidelines. Numerous banking competitors would remain in each of these markets.
In the Atlantic City, New Jersey, banking market, a
subsidiary bank of Summit is the largest insured depository
institution in the market, controlling deposits of $ 1 billion,
representing 27.8 percent of the deposits of insured depository institutions in the market ("market deposits").18 A
subsidiary bank of FleetBoston is the fourth largest insured
depository institution in the market, controlling deposits of
$370 million, representing 10 percent of market deposits.
Without any divestiture, the proposal would cause the HHI
in the market to increase by 557 points to 1,917.
In order to mitigate the potential anticompetitive effects
of the proposal in the Atlantic City market, FleetBoston
has committed to divest five branches in the market, with at
least $100 million in deposits, and the customer relationships associated with these branches.19 On consummation
and taking into account the effect of the proposed divestiture, the HHI for the market would increase by 161 points
to 1,517, and 16 competitors would remain in the market.
Consummation of the proposal would be consistent with
Board precedent and the DOJ Guidelines.
The Department of Justice has conducted a detailed
review of the proposal and advised the Board that, conditioned on completion of the proposed divestiture, consummation of the proposal would not be likely to have a
significantly adverse effect on competition in the Atlantic
City or any other relevant banking market. The Office of
the Comptroller of the Currency ("OCC") and the Federal
Deposit Insurance Corporation also have been afforded an
opportunity to comment and have not objected to consummation of the proposal.
18. The Atlantic City banking market is defined as Atlantic and
Cape May Counties, both in New Jersey. The Board received one
comment challenging the market definition of the Atlantic City banking market, but that comment did not provide any evidence to support
an alternative market definition. The Board has considered the comment, and has reviewed commuting data, commercial, and employment data and other information in defining the Atlantic City banking
market. Atlantic and Cape May Counties are linked by a major
highway that is the area's major north-south commuting thoroughfare.
Atlantic City is the regional commercial and employment center for
the area, and a substantial percentage of the Cape May County
workforce commutes to Atlantic County. After a review of these data
and other facts of record, the Board concludes that the Atlantic City
banking market should be defined as Atlantic and Cape May Counties,
New Jersey.
19. FleetBoston has committed to divest the greater of
(1) $100 million or (2) the amount of deposits in the branches as of the
date the branches are divested. FleetBoston has committed to execute
sales agreements for the proposed divestitures with a purchaser determined by the Board to be competitively suitable, prior to consummation of the proposal, and has committed to complete these divestitures
within 180 days of consummation of the proposal. FleetBoston also
has committed that, if it is unsuccessful in completing any divestiture
within 180 days of consummation, it will transfer the unsold offices to
an independent trustee that is acceptable to the Board and will instruct
the trustee to sell the offices promptly to one or more alternative
purchasers acceptable to the Board. See BankAmerica
Corporation,
78 Federal Reserve Bulletin 338 (1992); United New Mexico Financial Corporation, 77 Federal Reserve Bulletin 484 (1991).
After carefully reviewing all the facts of record, and for
the reasons discussed in this order, the Board concludes
that consummation of the proposal would not likely result
in a significantly adverse effect on competition or on the
concentration of banking resources in any of the banking
markets in which FleetBoston and Summit directly compete or in any other relevant banking market. Accordingly,
based on all the facts of record, and subject to completion
of the proposed divestitures and compliance with the related commitments, the Board has determined that competitive factors are consistent with approval of the proposal.
Managerial and Financial Considerations and Future
Prospects
Section 3(c) of the BHC Act requires the Board to consider
the financial and managerial resources and future prospects
of the companies and depository institutions involved in a
proposal and certain other supervisory factors. The Board
has carefully considered the financial and managerial resources and future prospects of FleetBoston, Summit, and
their respective subsidiary depository institutions, and other
supervisory factors in light of all the facts of record. As
part of that consideration, the Board has reviewed confidential reports of examination and other supervisory information received from the primary federal supervisors of
the organizations.
In evaluating financial factors in expansion proposals by
banking organizations, the Board consistently has considered capital adequacy to be especially important. FleetBoston, Summit Bancorp, and all of their subsidiary banks are
and on consummation of the proposal would remain well
capitalized, as defined in the relevant regulations of federal
banking agencies. The proposed acquisition is structured as
an exchange of shares, and FleetBoston would incur no
debt as a result of the transaction.
The Board also has considered the managerial resources
of FleetBoston and Summit and the federal financial supervisory agencies' examination records in supervising these
organizations, including their subsidiary banks. FleetBoston, Summit, and their subsidiary banks are well managed,
with appropriate risk management systems in place. The
Board also has considered the plans made by FleetBoston
to complete the proposed merger, including the managerial
resources available to FleetBoston and the experience
gained by FleetBoston in completing past mergers.20
20. The Board has received a comment from the Massachusetts
Commissioner of Banks stating that the office received a number of
complaints from customers during bank mergers and branch divestitures related to the 1999 merger of Fleet Financial Group, Inc. and
BankBoston Corp. to form FleetBoston. The comment suggested that
these complaints might indicate problems with FleetBoston's ability
to expand its operations without adversely affecting its existing customers. In response to this comment, the Board has obtained information from FleetBoston and the OCC, the federal banking agency
responsible for FleetBoston's subsidiary banks. FleetBoston believes
that most of the complaints concern branches that it was required to
divest in connection with its acquisition of BankBoston Corporation.
FleetBoston has informed the Board of the steps it has taken to resolve
Legal Developments
Based on this review and all of the facts of record, the
Board concludes that considerations relating to the financial and managerial resources and future prospects of FleetBoston, Summit, 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.
255
posal would result in FleetBoston increasing fees for products used by LMI individuals, and reducing basic banking
services provided to LMI individuals.24 Commenters also
express concerns about possible branch closures and contend that FleetBoston should be required to negotiate community reinvestment agreements pertaining to certain geographic areas in the assessment areas of the combined
organization.
Convenience and Needs Considerations
B. CRA Performance Examinations
Section 3 of the BHC Act requires the Board, in every case
involving the acquisition of a bank by a bank holding
company, to consider the effects of the proposal on the
convenience and needs of the communities to be served.
The Board has long held that this analysis includes a
review of performance under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA"). The CRA
requires the federal financial supervisory agencies to encourage financial institutions to help meet the credit needs
of the local communities in which they operate. To accomplish this end, the CRA requires the appropriate supervisory authority for an insured depository institution to "assess the institution's record of meeting the credit needs of
its entire community, including low- and moderate-income
neighborhoods, consistent with the safe and sound operations of such institution,"21 and requires that this record be
taken into account in the Board's evaluation of bank holding company applications involving the institution.22
A. Summary of Public Comments
The Board has reviewed the record of performance of the
subsidiary banks of FleetBoston and Summit in light of all
the facts of record, including timely comments received.
Based in part on their analyses of data filed under the
Home Mortgage Disclosure Act (12 U.S.C. § 2801 et seq.)
("HMDA"), several commenters criticize the records of
FleetBoston and Summit of serving minorities and lowand moderate-income ("LMI") communities and LMI individuals.23 In addition, commenters contend that the pro-
the most common disputes that have arisen after its recent acquisitions
and has an established process to respond to customers' complaints,
including those forwarded by the OCC to FleetBoston. FleetBoston
states that its employees have received special training in preparation
for integrating Summit into its operations, and that it is retaining
Summit's most popular checking account product to minimize problems for these customers.
21. 12 U.S.C. § 2903(1).
22. 12 U.S.C. §§ 2903(2), 2902(3)(F).
23. One commenter contends that FleetBoston has failed to adequately serve the needs of LMI individuals and communities under the
CRA because FleetBoston's subsidiary banks have discontinued the
deposit accounts of check cashing businesses. FleetBoston states that
in May 1999, it decided to discontinue customer relationships with
money transmitters, check cashers, and similar entities because of
concerns over costs required for FleetBoston to monitor such customers to ensure compliance with laws against money laundering and
similar illicit activity. The CRA does not require financial institutions
to provide any particular type of product or service to its customers.
As discussed, examiners found that FleetBoston's subsidiary banks
have served the LMI areas of their communities. FleetBoston also has
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 the appropriate 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
appropriate federal supervisor.25
FleetBoston was formed by the 1999 merger of BankBoston Corporation ("BankBoston") with and into Fleet
Financial Group, Inc. ("Fleet"), both in Boston, Massachusetts. Before their merger to form Fleet National Bank,
Boston, Massachusetts ("New Fleet Bank"), all Fleet's
subsidiary insured depository institutions received ratings
of "satisfactory" at their most recent examinations of CRA
performance26 and all BankBoston's subsidiary insured
depository institutions received ratings of "satisfactory" or
better as of their most recent examinations of CRA performance.27 FleetBoston's other subsidiary insured depository
institution, Fleet Bank (Rhode Island), N.A., Providence,
Rhode Island, which engages primarily in credit card operations, received a "satisfactory" CRA performance rating
taken steps to help provide checking accounts for underserved individuals.
24. One commenter has suggested that FleetBoston might be engaged in subprime lending that has an adverse effect on minority
borrowers. FleetBoston has stated that it currently conducts no lending
activities that are subject to the Home Ownership and Equity Protection Act (HOEPA), and that controls are in place to ensure that no
HOEPA-covered transactions are initiated.
25. The Interagency Questions and Answers Regarding Community
Reinvestment provide that a CRA examination is an important and
often controlling factor in the consideration of an institution's CRA
record. See 65 Federal Register 25,088 and 25,107 (2000).
26. Fleet's former lead subsidiary bank, Fleet National Bank, Providence, Rhode Island ("Fleet-RI"), and Fleet Bank, N.A., Jersey City,
New Jersey ("Fleet-NJ"), were examined by the OCC for CRA
performance, as of February 1998. Fleet Bank of New Hampshire,
Manchester, New Hampshire ("Fleet-NH"), and Fleet Bank of Maine,
Portland, Maine, were examined by the Federal Reserve Bank of
Boston for CRA performance, as of April 1998. Fleet Bank, F.S.B.,
Boca Raton, Florida, was examined by the Office of Thrift Supervision for CRA performance, as of April 1998.
27. BankBoston's lead subsidiary bank, BankBoston, N.A., Boston,
Massachusetts, received an "outstanding" CRA performance rating
from the OCC at its examination, as of March 1999. Bank of BostonFlorida, N.A., Boca Raton, Florida, received a "satisfactory" CRA
performance rating from the OCC at its examination, as of December
1996.
256
Federal Reserve Bulletin • April 2001
from the OCC at its most recent examination, as of March
2000.
Summit's lead subsidiary bank, Summit-NJ, which represents approximately 85 percent of the banking assets
controlled by Summit, received an "outstanding" CRA
performance rating from the Federal Reserve Bank of New
York at its most recent examination, as of October 1999
("1999 Summit-NJ Examination"). Summit's other subsidiary banks also received "outstanding" ratings at their
most recent examinations for CRA performance.28
C. FleetBoston's CRA Performance Record
In the past two years, the Board has reviewed the CRA
performance record of Fleet and FleetBoston in connection
with two large acquisition proposals.29 In both cases, the
Board received extensive public comment and the Board
carefully reviewed the records of the subsidiary banks
involved in light of the public comments, the applicant's
response to those comments, and supervisory reports. For
reasons set forth in detail in those orders, the Board concluded that the CRA performance records of Fleet and
FleetBoston, respectively, were consistent with approval of
the two proposals under the BHC Act. Many of the comments received in this case raise the same contentions and
arguments raised by commenters in previous cases. Consequently, the Board adopts and incorporates in this case the
relevant findings made in the two previous orders.
Fleet-RI. At the time of its February 1998 CRA performance examination, Fleet-RI operated in Massachusetts,
Connecticut, portions of upstate New York, and Rhode
Island.30 During 1996 and 1997, the bank made 53,305
HMDA-reported loans, totaling $4.4 billion, and 27,827
loans to small businesses in amounts less than $1 million
("small business loans"), totaling $4.2 billion, in its assessment area.
Examiners considered Fleet-RI's lending performance to
be particularly strong in home purchase lending. In every
state, and in most MSAs in its assessment area, the percentage of the bank's loans made in LMI census tracts was
higher than the percentage of owner-occupied housing in
28. Summit-PA received an "outstanding" CRA performance rating
from the Federal Reserve Bank of Philadelphia at its examination, as
of March 2000 ("2000 Summit-PA Examination"). Summit-CT received an "outstanding" CRA performance rating from the Federal
Deposit Insurance Corporation ("FDIC") at its examination, as of
August 1999.
29. See Fleet Financial Group, Inc., 85 Federal Reserve Bulletin
747 (1999) ("Fleet-BankBoston Order"); FleetBoston
Financial
Corp., 86 Federal Reserve Bulletin 751 (2000) ("North Fork Order").
In addition, the Board held a public meeting in connection with the
Fleet-BankBoston application.
30. At the time of its most recent CRA performance examination,
Fleet-RI owned several subsidiaries, including Fleet Mortgage Group,
Inc., Columbia, South Carolina ("Fleet Mortgage"), and Fleet Community Development Corporation, Providence, Rhode Island ("Fleet
CDC"), which engaged in community development lending and investments. Home mortgage loans by Fleet Mortgage and loans and
investments by Fleet CDC and Fleet-RI's affiliated banks that were
made in Fleet-RI's assessment area were considered by the OCC in its
examination of the bank's CRA performance.
these census tracts and higher than the percentage of such
loans made by lenders in the aggregate. At the time of the
CRA examination, the bank used several programs to
provide affordable home mortgage loans. For example,
Fleet-RI offered its proprietary affordable housing program, which featured reduced down payment requirements, flexible underwriting standards, and no mortgage
insurance requirement for borrowers unable to meet traditional secondary market credit standards. In addition, FleetRI was engaged in local partnership programs offered in
cooperation with organizations, such as the Association of
Community Organization for Reform Now, Neighborhood
Assistance Corporation of America, and Hartford Areas
Rally Together, that offered flexible underwriting standards
and extensive financial and homebuyer counseling.
Fleet-RI also offered several government-sponsored programs, such as Federal Housing Administration and Veterans Administration loan programs and the state-sponsored
Jumpstart program in Massachusetts, New York, and
Rhode Island,31 and participated in the Fannie Mae Community Home Buyers program, that featured reduced down
payment requirements, flexible underwriting standards, and
flexible financing of closing costs. Examiners noted favorably that the geographic distribution of Fleet-RI's consumer loans generally was consistent with population distribution.
For small business lending, examiners reported that
Fleet-RI was particularly active in Massachusetts and Connecticut, where the percentage of the bank's small business
loans in LMI census tracts was generally 3 to 4 percentage
points higher than the comparable percentage for lenders in
the aggregate. Examiners found that in New York, the
distribution of Fleet-RI's small business loans generally
corresponded to the distribution of businesses throughout
the assessment areas, and that there was good distribution
of small business loans to very small businesses in LMI
census tracts.32 Through the Fleet INCITY Business and
Entrepreneurial Services Group, Fleet-RI offered small
business loans featuring reduced documentation, flexible
underwriting, and no minimum loan amount in LMI areas.
Fleet CDC also supported small businesses through lowinterest loans, longer-term loans, and equity investments in
financial intermediaries and nonprofit organizations that
31. Under the Jumpstart program, Fleet-RI made 2,173 loans
in 1998, totaling $254.1 million; 1,950 loans in 1997, totaling
$202.7 million; and 3,338 loans in 1996, totaling $325.9 million.
32. One commenter criticized FleetBoston's HMDA and small
business lending in the Rochester MSA. FleetBoston acknowledges
that its share of HMDA-reportable loans in the MSA has declined, but
asserts that the decrease was due to the large increase in the number of
HMDA lenders in the MSA from 1995 to 1999. Although FleetBoston's HMDA lending to minority and LMI borrowers declined in the
Rochester MSA from 1995 to 1998, in 1999 the number of its loans
originated to African-American and Hispanic applicants increased.
The number and dollar volume of FleetBoston's small business loans
declined from 1997 through 1999 in the Rochester MSA. The number
and dollar amount of FleetBoston's small business loans in LMI
census tracts as percentages of FleetBoston's total small business
lending in 1999 in the Rochester MSA exceeded the percentages for
lenders in the aggregate.
Legal Developments
focused their efforts on small businesses in LMI areas.
Fleet-RI was an active lender through Small Business
Administration ("SBA") programs. Overall, Fleet was the
largest SBA lender in New England in 1997 and the second
largest in 1998. In the first six months of 1999, Fleet made
more small business loans under a new SBA express approval program than in all of 1998.
Examiners also judged Fleet-RI's performance in making community development investments to be particularly
strong. In 1996 and 1997, the bank made $253 million of
qualified investments and grants and committed to make an
additional $269 million. In 1997, Fleet-RI entered into an
agreement with Neighborhood Housing Services of America ("NHSA") to purchase up to $10 million in affordable
first and second mortgages and home improvement loans
originated and underwritten by NHSA's local affiliates in
the bank's assessment area. Fleet-RI also committed to
make grants of $1.4 million of working capital over three
years to NHSA's affiliated Neighbor Works Organizations
to support neighborhood revitalization and affordable housing development.
According to examiners, Fleet-RI's branch network,
ATMs, and its alternative delivery systems provided consistent service and reached consumers in all geographic areas,
and its products and services were designed to serve all
consumers, including LMI individuals. Approximately 600
companies participated in the bank's Workplace Banking
program, which provided basic banking services at reduced
cost to approximately 53,000 households. The program
was provided through branches, ATMs, and telephone
banking systems, thereby enhancing access to services for
certain predominantly minority communities. The bank
also offered seminars for first-time LMI homebuyers and
small business owners.33
D. Summit's CRA Performance Record
Summit-NJ. The 1999 Summit-NJ Examination concluded
that the overall lending activity of Summit-NJ reflected
excellent responsiveness to the credit needs of its northern
New Jersey assessment area and adequate responsiveness
to the credit needs of its southern New Jersey assessment
area. Summit-NJ originated 93 percent of its loans in its
assessment areas, and examiners found this lending to be
well distributed throughout those areas, in light of the
number of residents in these areas and the number of the
bank's branches. In northern New Jersey, where 80 percent
of its branches are located, Summit-NJ was a leader in total
lending activity, loan volume in LMI census tracts, number
of loans per dollar of assets, and loans made in LMI census
33. Two commenters express concern that FleetBoston would increase fees for banking products and services or eliminate or alter
banking products and services after consummation of the proposal.
FleetBoston offers a full range of affordable banking products and
services. Although the Board has recognized that banks help serve the
banking needs of communities by making basic services available at
nominal or no charge, the CRA does not require an institution to
provide any specific types of products or services or limit the fees it
charges for them.
257
tracts per dollar of assets. In southern New Jersey, SummitNJ's performance in these categories was found to be
adequate, generally in line with or slightly below that of
similarly situated financial institutions.
Summit-NJ's loan distribution was found to reflect good
penetration in its assessment areas, and examiners particularly commended the geographic distribution of the bank's
lending in the LMI census tracts in these areas.34 Examiners found Summit-NJ's multifamily lending to be responsive to the housing needs in its assessment areas and to be
evenly distributed in light of the population patterns in
those areas. The bank originated 86 multifamily loans
during the examination period,35 23 of which were made in
LMI census tracts. Those 23 loans represented 1,207 housing units, including 802 units that qualified as affordable
housing. Examiners also found that the overall distribution
of Summit-NJ's loans among individuals of different income levels and businesses with different revenues was
good throughout its assessment areas.
Examiners concluded that Summit-NJ had an excellent
level of community development lending. Summit-NJ's
community development lending commitments totaled
$197.4 million, which represented an increase of 139 percent over the amount during the previous examination
period, and included $88.2 million in support of affordable
housing initiatives that constructed or rehabilitated 1,479
affordable housing units in the bank's assessment areas.
Summit-NJ also lent $85.7 million for community service
initiatives, $11.3 million in support of economic development, and $12.2 million for revitalization and stabilization
activities.
Examiners found Summit-NJ to have an excellent level
of qualified community development investments and to
exhibit an excellent level of responsiveness to credit and
community development needs. Summit-NJ had a total of
$65.9 million of qualified investments, including
$65.1 million invested in community development organizations, and $859,000 in charitable grants and contributions to such organizations. This represented an increase
of 217 percent over Summit-NJ's qualified investments
during the previous examination period. The qualified investments made by Summit-NJ were noted for showing
excellent responsiveness to affordable housing development, which was a persistent community development
need in its assessment area. Examiners also found that
Summit-NJ made excellent use of complex investments,
34. One commenter asserts that Summit-NJ has failed to originate a
sufficient number of mortgages in Asbury Park, New Jersey, for the
period 1998-99. The commenter also contends that Summit-NJ has
not followed through on assurances, allegedly given by officers of the
bank to the commenter in a meeting in late 1999, that the bank would
increase its lending in Asbury Park. In reviewing the lending of
Summit-NJ in the Monmouth-Ocean, New Jersey Metropolitan Statistical Area ("MSA"), which includes Asbury Park, examiners concluded that the geographic distribution of the bank's lending in this
MSA was good, including the penetration of its home purchase
lending in LMI areas of the MSA.
35. The examination generally covered the period from October 1,
1997, to June 30, 1999.
258
Federal Reserve Bulletin • April 2001
such as low-income housing tax credits, in supporting
community development initiatives.
Summit-NJ was considered by examiners to be a leader
in providing community development services in its assessment areas. These services included sponsoring educational seminars for first- time homebuyers and small businesses, permitting Summit-NJ employees to serve as
directors or officers of community development organizations, and participating in the Affordable Housing Program
("AHP") of the Federal Home Loan Bank ("FHLB") of
New York. The AHP finances homeownership for households with incomes that are 80 percent or less of the area
median income, and finances rental housing in which
20 percent of the units will be occupied by tenants who
earn 50 percent or less of the area median. At the time of
the examination, Summit-NJ was overseeing 28 affordable
housing projects it had sponsored through the AHP.
Examiners concluded that Summit-NJ used delivery systems for its products and services that were reasonably
accessible to essentially all portions of its assessment area.
Of the 372 branches that Summit-NJ maintained at the
close of the examination period, 53 (14 percent) were in
LMI census tracts. Summit-NJ had 55 branches in supermarkets and all these branches offered third-party check
cashing and were open seven days a week. Ninety percent
of all the bank's branches had extended hours once a week.
Examiners noted that Summit-NJ offered a variety of alternative delivery systems, including ATMs, and banking by
telephone and home computer. Eight percent of SummitNJ's 388 ATMs (primarily those in supermarkets) offered a
check cashing feature, and 16 percent of the bank's ATMs
offered Spanish language transactions. Examiners also
found that Summit-NJ's record of opening and closing
branches had not adversely affected the accessibility of its
delivery systems, including those in LMI areas or to LMI
individuals. Examiners also did not identify any credit
practices of Summit-NJ that violated the substantive provisions of any antidiscrimination laws or regulations.
Summit-PA. The 2000 Summit-PA Examination found
that the bank had an excellent level of overall lending, and
that a substantial majority of its home mortgage, small
business, and unsecured consumer loans were made in its
assessment areas. In addition, the geographic distribution
of Summit-PA's lending, including home purchase, small
business, and consumer lending, was found to demonstrate
good penetration throughout its assessment areas, including LMI geographies. Examiners also found that the distribution of Summit-PA's lending among borrowers of different income levels was excellent, and, in particular, noted
that the bank was effective in reaching LMI borrowers in
its Philadelphia and Allentown-Bethlehem-Easton assessment areas.36 Summit-PA's small business lending in all its
36. One commenter criticizes Summit-PA for making too few home
purchase loans to LMI individuals in the Scranton/Wilkes-Barre/
Hazelton MSA, a portion of which is included in the bank's assessment area. Another commenter, based on the bank's 1998 CRA
examination, argues that the ScrantonAVilkes-Barre/Hazelton MSA
has not received an equitable share of Summit-PA's loans or invest-
assessment areas was considered to be consistent with the
bank's asset size, lending capacity, and business objectives.
Examiners considered Summit-PA's level of community
development lending to be outstanding and the bank to be a
leader in making community development loans and an
active participant in economic development initiatives.
Summit-PA's loans to community development organizations and initiatives totaled $51 million, and a substantial
number of those loans were made in the bank's Philadelphia and Allentown-Bethlehem-Easton assessment areas.
Summit-PA also made extensive use of innovative and
flexible lending practices to meet the credit needs of its
community, including home purchase, home improvement,
and business loan products designed to meet the credit
needs of LMI borrowers and small businesses. Summit-PA
participated in the FHLB of Pittsburgh's AHP by sponsoring eight affordable housing projects and overseeing the
distribution of $1.7 million in grant funds during the examination period.37 In addition, examiners concluded that
Summit-PA had a good record of serving the credit needs
of significantly disadvantaged areas and borrowers in its
assessment areas, while also encouraging the bank to continue to explore alternative ways to respond to these credit
needs, particularly in its Philadelphia assessment area.
Examiners found that Summit-PA had an excellent level
of qualified community development investments and provided some investments that were not routinely offered by
other financial institutions. Summit-PA also made extensive use of innovative and complex investments, such as
low-income housing tax credit projects, to support community development initiatives. The bank demonstrated an
excellent responsiveness to community credit and development needs, principally by investing in organizations that
promote affordable housing and economic development.
Examiners found that Summit-PA was a leader in providing community development services in its assessment
areas, primarily by offering affordable housing programs,
ments, particularly in LMI areas. During the examination period,
Summit-PA made 566 HMDA-reportable loans in this MSA, including 148 (26 percent) to LMI borrowers, and 52 (9 percent) in LMI
census tracts. The examiners did not consider the number of loans to
be inappropriate because only 8 percent of the owner-occupied housing in the MSA was in LMI census tracts. By contrast, 20 percent of
Summit-PA's small business loans in this MSA were made in LMI
census tracts. The percentage of Summit-PA's loans to businesses with
less than $1 million in revenues ("loans to small businesses") and
loans of less than $1 million to businesses ("small business loans") in
the MSA that were made in LMI areas exceeded the percentages for
lenders in the aggregate for every year from 1997 through 1999.
37. One commenter recommends withholding approval of the proposal until FleetBoston decides that the merged New Fleet Bank/
Summit-PA would maintain Summit-PA's membership in the FHLB
of Pittsburgh, or otherwise compensates the entities that the commenter believes would be harmed if New Fleet Bank is not a member.
New Fleet Bank, however, would be ineligible to be a member of the
FHLB of Pittsburgh because the bank would be based in Massachusetts. New Fleet Bank is a member of the FHLB of Boston and has
proposed to petition the FLHB of Boston to amend its policies to
accept applications for affordable housing programs from members
for projects outside that FHLB's district boundaries.
Legal Developments
technical assistance by bank employees to community development organizations, educational seminars for firsttime homebuyers, and deposit accounts designed for LMI
individuals. The examination also concluded that
Summit-PA used its branch network, ATMs, and Internet
and telephone banking systems to deliver services to its
customers. Examiners found that Summit-PA's branch system was accessible to essentially all portions of the bank's
assessment areas, and noted that 17 percent of the bank's
109 branches were in LMI geographies. Summit-PA had
126 ATMs at the time of the examination, and examiners
noted that several of the bank's ATMs offered Spanish
and/or Russian language transactions, particularly ATMs in
Philadelphia. Summit-PA's record of opening and closing
branches was not found to have affected the accessibility of
the bank's delivery systems. Since its previous CRA examination, Summit-PA had opened 42 additional branches
(23 of which were related to its September 1999 merger
with Prime Bank, Philadelphia, Pennsylvania), and closed
two branches. Neither of the closed branches was in an
LMI area.
Examiners found no credit practices of Summit-PA that
violated the substantive provisions of any antidiscrimination laws or regulations.
E. FleetBoston CRA Pledge
Two commenters request that the Board delay action on
this application until FleetBoston enters into a CRA agreement pertaining to portions of Pennsylvania. New Fleet
Bank has entered into a community development agreement with two organizations in New Jersey.
The CRA requires the Board, in considering a bank
holding company's application to acquire another bank
holding company, to review carefully the actual record of
past performance of the insured depository institutions
controlled by each bank holding company in helping to
meet the credit needs of their communities. Consistent with
this requirement, the Board previously has held that, for
approval of a proposal to acquire an insured depository
institution, an applicant must demonstrate a satisfactory
record of performance under the CRA without reliance on
plans or commitments for future action.38
The Board previously has noted that, although communications by depository institutions with community groups
provide a valuable method of assessing and determining
how an institution may best address the credit needs of the
community, neither the CRA nor the CRA regulations of
the federal financial supervisory agencies require depository institutions to enter into agreements with any organization.39 The Board notes that the future activities of FleetBoston, including any lending and community
development activities in which the subsidiary banks of the
38. See Totalbank Corp. of Florida, 81 Federal Reserve Bulletin
876 (1995); First Interstate Bank Systems of Montana, Inc., 77 Federal Reserve Bulletin 1007 (1991).
39. See Fifth Third Bancorp., 80 Federal Reserve Bulletin 838
(1994).
259
combined FleetBoston-Summit organization engage pursuant to CRA pledges and agreements, will be reviewed by
the appropriate federal supervisors of those institutions in
future CRA performance examinations. Those CRA performance records will be considered by the Board in any
future applications by FleetBoston to acquire a depository
institution.40
F. FleetBoston's HMDA Data
The Board has carefully considered the lending records of
FleetBoston and Summit in light of comments about
HMDA data reported by the organizations' subsidiaries.41
The Board has reviewed HMDA data from 1997 through
1999 for FleetBoston in five states and eight MS As and for
Summit in three states and two MSAs.
The HMDA data indicate that FleetBoston's originations
to African American applicants as a percentage of its total
originations (the "origination rate") was below the percentage for lenders in the aggregate (the "aggregate") in
some areas, and was above it in others. The HMDA data
for these years also indicate that FleetBoston's origination
rates for Hispanics were below the origination rates for the
aggregate in most states and MSAs examined, except for
the MSAs of Bridgeport, Connecticut MSA and Trenton,
New Jersey MSA. In addition, the HMDA data indicate
that FleetBoston's denial disparity ratios with respect to
minority applicants were generally equivalent to or better
than the aggregate's denial disparity ratios.42 The HMDA
data also indicate that Summit's origination rates to LMI
areas generally lagged the aggregate's origination rate of
HMDA-reportable loans to LMI areas. In the Scranton/
Wilkes-Barre/Hazelton MSA, Summit's origination rate to
LMI individuals was below the aggregate's origination rate
to LMI individuals for each year from 1997 through 1999.
In the Allentown-Bethlehem-Easton MSA in 1999, Summit's orgination rates to African Americans and to Hispanics were below the aggregate's origination rates.
The Board is concerned when an institution's record
indicates such disparities in lending and believes that all
banks are obligated to ensure that their lending practices
are based on criteria that ensure not only safe and sound
banking, but also equal access to credit by creditworthy
applicants, regardless of their race or income level. The
Board recognizes, however, that HMDA data alone provide
40. One commenter contends that FleetBoston is not making adequate progress in fulfilling a pledge made in connection with a
previous acquisition. This pledge was not a commitment made to the
Board and, therefore, is not enforceable by the Board.
41. Commenters criticize FleetBoston's record of home mortgage
lending to minority individuals in 15 MSAs. Commenters also criticize FleetBoston's lending to LMI and minority individuals or in
communities in the Rochester, New York MSA. In addition, Commenters criticize Summit's record of home mortgage lending to LMI
individuals in the Scranton/Wilkes-Barre/Hazelton MSA, and Summit's record of home mortgage lending to minority individuals in the
Allentown-Bethlehem-Easton MSA.
42. The denial disparity ratio compares the denial rate for minority
loan applicants with that for white applicants.
260
Federal Reserve Bulletin • April 2001
an incomplete measure of an institution's lending in its
community because the data cover only a few categories of
housing-related lending.43 HMDA data, moreover, provide
only limited information about the covered loans. HMDA
data, therefore, have limitations that make the data an
inadequate basis, absent other information, for concluding
that an institution has not adequately assisted in meeting its
communities' credit needs or has engaged in illegal discrimination in making lending decisions.
Because of the limitations of HMDA data, the Board has
carefully considered the data in light of other information,
including examination reports that provide an on-site evaluation of compliance by the subsidiary banks of FleetBoston and Summit with fair lending laws and the overall
lending and community development activities of the
banks, as well as fair lending examinations of Fleet Mortgage, which is a subsidiary of New Fleet Bank. Examiners
found no evidence of prohibited discrimination or illegal
credit practices at the subsidiary banks of FleetBoston or
Summit. Fleet Mortgage's fair lending policies, procedures, training programs, and internal monitoring programs were considered to be satisfactory.
The Board also considered the HMDA data in light of
the overall lending record of FleetBoston, including the
lending and other programs outlined above. As the discussion illustrates, FleetBoston and Summit have implemented
a variety of programs that help to meet the credit needs of
the community in the home mortgage lending area as well
as other areas of credit need, including, in particular, small
business loans and consumer credit.
G. Branch Closings
The Board has received comments that express concern
about branch closings that might result from consummation of the proposal, and about the criteria that the merged
organization might use to determine which branches to
close or consolidate. FleetBoston has estimated that
85 branches of the subsidiary banks of the merged organization might be closed as a result of the proposal. FleetBoston has indicated that this estimate is the result of a
preliminary analysis of the two organizations' branch structures that identified 97 cities or communities in which
FleetBoston and Summit banks both have branches.44
43. The data, for example, do not account for the possibility that an
institution's outreach efforts may attract a larger proportion of marginally qualified applicants than other institutions attract and 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.
44. As part of its community development agreement with New
Jersey Citizen Action and the Housing and Community Development
Network of New Jersey, New Fleet Bank has agreed not to close any
branches in LMI census tracts in 13 cities in New Jersey for four
years. In several other cities, New Fleet Bank has agreed not to close
any branch if the next closest branch is more than one-half mile away.
FleetBoston also has indicated that it does not currently plan to close
any branches in Pennsylvania as a result of the proposal.
The Board has carefully considered all the facts of
record concerning branch closings, including the branch
closing policy of New Fleet Bank and Fleet's record of
opening and closing branches. The Board notes that New
Fleet Bank's lbranch closing policy provides that the impact of any branch closing on the local community should
be considered as part of the branch closing process. This
includes an assessment of how local banking needs might
be addressed by other New Fleet Bank branches, a review
of comments from community leaders regarding the impact
of any proposed closure, and consideration of steps by the
bank to minimize any adverse impact. The policy is consistent with federal law, which requires an insured depository
institution to provide notice to the public and to the appropriate federal supervisory agency before closing a branch 45
In addition, the most recent CRA examination of BankBoston, N.A. noted that branch closings generally had not
adversely affected the accessibility of the bank's products
and services, particularly in LMI census tracts or to LMI
individuals. Examiners made similar findings with respect
to Summit Bank-NJ and Summit Bank-PA. The Board
expects that the subsidiary banks of the combined organization would continue to use a satisfactory branch closing
policy for any branch closings that might result from the
proposed transaction 46
H. Conclusion on Convenience and Needs
For the reasons discussed above, the record demonstrates
that FleetBoston and Summit have established records of
performance in helping to meet the convenience and needs
of the communities they serve. On balance, and based on a
review of the entire record, the Board concludes that convenience and needs considerations, including the records
of CRA performance by both organizations' subsidiary
depository institutions, are consistent with approval of the
proposal.
45. Section 42 of the Federal Deposit Insurance Act (12 U.S.C.
§ 1831r-l), as implemented by the Joint Policy Statement Regarding
Branch Closings (64 Federal Register 34,844 (1999)) ("Joint Policy
Statement"), requires that a bank provide the public with at least
30 days' notice and the appropriate federal supervisory agency 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 law does not authorize federal regulators to
prevent the closing of any branch.
46. One commenter criticizes Summit-PA for closing a branch in
Allentown, Pennsylvania, in 1997. The closure of this branch was
reviewed as part of the Federal Reserve Bank of Philadelphia's April
1998 CRA examination of Summit-PA. At that time, two other
branches remained open in Allentown, and examiners found that the
closure of that Allentown branch had not adversely affected the
accessibility of loan products and banking services to residents of
LMI areas or LMI individuals. The branch was closed in accordance
with Summit-PA's branch closing policy, which conformed to provisions of the Joint Policy Statement in effect at that time.
Legal Developments
Conclusion
Appendix
As required by section 25 of the Federal Reserve Act and
section 211.4(f) of the Board's Regulation K (12 C.F.R.
211.4(f)), FleetBoston also provided notice of its intention
to acquire Summit International, which is organized under
section 25A of the Federal Reserve Act. The Board concludes that all the factors it is required to consider under
the Federal Reserve Act and Regulation K are consistent
with approval of the notice.
Based on the foregoing and all the facts of record, the
Board has determined that the application and notice
should be, and hereby are, approved.47 The Board's approval is specifically conditioned on compliance by FleetBoston with all the commitments made in connection with
the proposal and with the conditions stated or referred to in
this order, including FleetBoston's divestiture commitments. For purposes of this action, the commitments and
conditions relied on by the Board in reaching its 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 shall not be consummated before the
fifteenth calendar day after 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 Boston, acting pursuant to delegated authority.
By order of the Board of Governors, effective February 12, 2001.
Banking Markets Without Divestitures
Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley, Meyer, and Gramlich.
ROBERT DEV. FRIERSON
Associate Secretary of the Board
47. The Board received two requests to hold a public meeting or
hearing on the proposal. Section 3(b) of the BHC Act does not require
the Board to hold a public hearing on an application unless the
appropriate supervisory authority for a bank to be acquired makes a
timely written recommendation of denial of the application. The
Board has not received such a recommendation from any of the
appropriate supervisory authorities.
Under its rules, the Board also may, in its discretion, hold a public
meeting or hearing on an application to acquire a bank if a meeting or
hearing is necessary or appropriate to clarify factual issues related to
the application and to provide an opportunity for testimony. 12 C.F.R.
225.16(e). The Board has considered carefully the hearing requests in
light of all the facts of record. In the Board's view, commenters have
had ample opportunity to submit their views, and, in fact, have
submitted written comments that have been considered carefully by
the Board in acting on the proposal. The requests fail to demonstrate
why their written comments do not present their views adequately and
fail to identify disputed issues of fact that are material to the Board's
decision and that would be clarified by a public meeting or hearing.
For these reasons, and based on all the facts of record, the Board has
determined that a public meeting or hearing is not required or warranted in this case. Accordingly, the requests for a public meeting or
hearing on the proposal are denied.
261
Fairfield Area banking market. The Fairfield Area market
is defined as the Connecticut portion of the Metropolitan
New York Ranally Metro Area ("RMA"), plus the towns
of Kent, Roxbury, Warren, and Washington in Litchfield
County in Connecticut. FleetBoston operates the largest
depository institution in the market, controlling deposits of
approximately $3.4 billion, representing 24 percent of market deposits. Summit operates the fifth largest depository
institution in the market, controlling deposits of approximately $898 million, representing 6.4 percent of market
deposits. On consummation of the proposal, FleetBoston
would control deposits of approximately $4.3 billion, representing 30.4 percent of market deposits. The HHI would
increase by 308 points to 1,560 and 37 competitors would
remain in the market.
Waterbury banking market. The Waterbury market is defined as the Waterbury RMA. FleetBoston operates the
fourth largest depository institution in the market, controlling deposits of approximately $230 million, representing
10.1 percent of market deposits. Summit operates the
13th largest depository institution in the market, controlling deposits of approximately $10 million, representing
less than 1 percent of market deposits. On consummation,
FleetBoston would operate the fourth largest depository
institution in the market, controlling deposits of approximately $240 million, representing 10.5 percent of market
deposits. The HHI would increase 9 points to 1,659 and
15 competitors would remain in the market.
Metropolitan New York-New Jersey banking market. The
Metropolitan New York-New Jersey market is defined as
New York City; Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, Sullivan, Ulster, and Westchester Counties in
New York; Bergen, Essex, Hudson, Hunterdon, Middlesex,
Monmouth, Morris, Ocean, Passaic, Somerset, Sussex,
Union, Warren, and portions of Mercer Counties in New
Jersey; Pike County in Pennsylvania; and Fairfield and
portions of Litchfield and New Haven Counties in Connecticut. FleetBoston operates the sixth largest depository
institution in the market, controlling deposits of approximately $23 billion, representing 5.3 percent of market
deposits. Summit operates the seventh largest depository
institution in the market, controlling deposits of approximately $18.2 billion, representing 4.2 percent of market
deposits. On consummation, FleetBoston would operate
the third largest depository institution in the market, controlling deposits of approximately $41.2 billion, representing 9.6 percent of market deposits. The HHI would increase 45 points to 931 and 296 competitors would remain
in the market.
Philadelphia banking market. The Philadelphia banking
market is defined as Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties in Pennsylvania; and Burlington, Camden, Gloucester, Salem Counties, and a portion
of Mercer County in New Jersey. FleetBoston operates the
23rd largest depository institution in the market, control-
262
Federal Reserve Bulletin • April 2001
ling deposits of approximately $293 million, representing
less than 1 percent of market deposits. Summit operates the
fourth largest depository institution in the market, controlling deposits of approximately $3.5 billion, representing
5.2 percent of market deposits. On consummation of the
proposal, FleetBoston would operate the fourth largest
depository institution in the market, controlling deposits of
approximately $3.8 billion, representing 5.7 percent of
market deposits. The HHI would increase by 4 points to
1,540 and 115 competitors would remain in the market.
Lea M. McMullan Trust
Shelbyville, Kentucky
Citizens Union Bancorp of Shelbyville, Inc.
Shelbyville, Kentucky
Order Approving Acquisition of a Bank
Lea M. McMullan Trust ("McMullan Trust") and its subsidiary, Citizens Union Bancorp of Shelbyville, Inc. (collectively, "CUB"), bank holding companies within the
meaning of the Bank Holding Company Act ("BHC Act"),
have requested the Board's approval under section 3 of the
BHC Act (12 U.S.C. § 1842(a)(3)) to acquire all the outstanding voting shares of Dupont State Bank, Dupont,
Indiana ("Dupont"). 1
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(65 Federal Register 80,864 (2000)). 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.
CUB operates two subsidiary banks in Kentucky. CUB is the
33rd largest commercial banking organization in Kentucky,
controlling approximately $210.9 million in deposits, representing less than 1 percent of total deposits in commercial
banking organizations in the state ("state deposits"). Dupont
is the 126th largest commercial banking organization in
Indiana, controlling approximately $16.9 million in deposits,
representing less than 1 percent of state deposits.2
Interstate Analysis
Section 3(d) of the BHC Act 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.3 For purposes of the BHC Act, the home state of
CUB is Kentucky, and CUB would acquire a bank in
Indiana. All the conditions for an interstate acquisition
1. McMullan Trust is a registered bank holding company that owns
35.6 percent of the voting stock of Citizens Union Bancorp.
2. State deposit and ranking data are as of June 30, 1999.
3. A bank holding company's home state is that state in which the
total deposits of all banking subsidiaries of such company were the
largest on the later of July 1, 1966, or on the date on which the
company became a bank holding company. 12 U.S.C. § 1841(o)(4)(C).
enumerated in section 3(d) are met in this case.4 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, Financial, and Managerial Considerations
CUB and Dupont do not compete directly in any banking
market. Based on all the facts of record, the Board concludes that consummation of the proposal would not have a
significant adverse effect on competition or on the concentration of banking resources in any relevant banking market.
The Board also has considered the financial and managerial resources and future prospects of CUB and its subsidiaries in light of all the facts of record, including a comment letter, reports of examination and other supervisory
information assessing the financial and managerial resources of the organizations, and information provided by
CUB.5 The Board notes that CUB and its subsidiaries are
well capitalized and are expected to remain so after consummation of the proposal. The Board also has considered
other aspects of the financial condition and resources of
CUB, its subsidiary banks, and Dupont, and the structure
of the proposed transaction. In addition, the Board has
reviewed the current managerial resources and future prospects of CUB's entire organization, including confidential
supervisory examination information. Based on these and
all the facts of record, including confidential reports of
examination, the Board has concluded that the financial
and managerial resources and the future prospects of CUB,
its subsidiary banks, and Dupont are consistent with approval, as are the other supervisory factors the Board must
consider under section 3 of the BHC Act.
Convenience and Needs Considerations
In acting on a proposal under section 3 of the BHC Act, the
Board is required to consider the effect of the proposal on
the convenience and needs of the community to be served
and to take into account the records of the relevant deposi4. See 12 U.S.C. §§ 1842(d)(1)(A) and (B), 1842(d)(2)(A) and (B).
CUB is adequately capitalized and adequately managed, as defined by
applicable law. In addition, on consummation of the proposal, CUB
would control less than 10 percent of the total amount of deposits of
insured depository institutions in the United States. The state law
requirements also are satisfied in this case. See Ind. Code Ann.
§ 28—2-16—17(f) and Ky. Rev. Stat. Ann. §§ 287.900(2) and (3). All
other requirements under section 3(d) of the BHC Act are met in this
case.
5. As part of its review, the Board carefully considered a comment
about the management of CUB and one of its subsidiary banks from a
former management official of CUB, who is a minority shareholder.
The commenter also alleged without supporting facts that CUB had
violated shareholders' rights. State law and federal securities law
generally govern the rights of shareholders in a bank holding company. The Board and the courts have generally found that matters
concerning the rights of shareholders are not among the factors that
the Board is entitled to consider under the BHC Act. See, e.g., First
National Bank Group, Inc., 84 Federal Reserve Bulletin 959 (1998)
(citing Western Bancshares, Inc. v. Board of Governors, 480 F.2d 749
(10th Cir. 1973)).
Legal Developments
tory institutions under the Community Reinvestment Act
("CRA"). 6 The Board has carefully considered the convenience and needs factor and the CRA performance records
of CUB's subsidiary banks and Dupont in light of all the
facts of record, including allegations that CUB has failed to
meet the need for credit and banking services in Shelby
County, Kentucky. Shelby County is in the assessment area
of CUB's largest subsidiary bank, Citizens Union Bank of
Shelbyville, Shelbyville, Kentucky ("Citizens"). Currently, Citizens' main office and four of its five branches
operate in Shelby County.
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 appropriate federal supervisor.7 Citizens received
an "outstanding" rating from its primary federal supervisor, the Federal Deposit Insurance Corporation ("FDIC"),
at its most recent evaluation for CRA performance, as of
March 29, 1999 ("1999 Citizens Evaluation"). First Farmers Bank and Trust Company, Owenton, Kentucky ("First
Farmers"), CUB's other subsidiary bank, and Dupont received "satisfactory" ratings from the FDIC at their most
recent evaluation for CRA performance.8 The reports of
examination of CUB's subsidiary banks and Dupont indicate that the examiners found no evidence of substantive
violations of the antidiscrimination laws.
In the 1999 Citizens Evaluation, examiners noted that
Citizens offered a full line of deposit and loan products,
including special loan products designed for first-time
homebuyers, small business owners, and small farmers
through various government-sponsored loan programs.
These included products through programs offered by the
Small Business Administration, the Farm Service Agency,
the Federal Housing Administration, and the Kentucky
Housing Corporation. Examiners also found that a majority
of Citizens' home mortgage and business loans were in the
bank's assessment area. In addition, examiners reported
that Citizens had a reasonable distribution of home mortgage loans to individuals of varying income levels and an
excellent record of consumer lending to low- and
moderate-income ("LMI") borrowers.
Examiners also commended Citizens for its community
development lending activities and determined that the
level of community development investments held by Citizens to address affordable housing and other credit needs
was outstanding. For example, examiners noted that Citizens served as the lead bank in a loan participation to
provide $500,000 in financing to purchase and redevelop
6. 12 U.S.C. § 2901 et seq.
7. The Interagency Questions and Answers Regarding Community
Reinvestment provides that an institution's most recent CRA performance evaluation is an 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
appropriate federal supervisor. 65 Federal Register 25,088 and 25,107
(2000).
8. First Farmers received a "satisfactory" rating, as of September 10, 1998, and Dupont received a "satisfactory" rating, as of January 6, 1997.
263
neglected houses in the downtown area of Shelbyville.
Examiners also reported that the bank financed a project to
help fund a hospital that cares for LMI families in Shelby
County. In addition, examiners noted that Citizens had
invested in nine low-income real estate tax credits for the
renovation or construction of LMI housing in Shelby and
Jefferson Counties, Kentucky.
In the 1999 Citizens Evaluation, examiners also noted
that the bank's delivery of services reflected an excellent
responsiveness to the needs of the community and that its
delivery systems were reasonably accessible to most areas
of the bank's assessment area.9 In addition, examiners
commended Citizens' employees for their involvement in
numerous organizations in the bank's assessment area to
help attract new businesses, promote the expansion of
existing businesses, provide housing for LMI residents, or
provide educational or other services to LMI individuals or
families.
The Board has considered carefully the entire record in
its review of the convenience and needs factor under the
BHC Act. Based on all the facts of record, including the
relevant CRA performance evaluations, the comment received, and information provided by CUB, the Board concludes that considerations relating to convenience and
needs, including the CRA performance records of the
banks involved in the proposal, are consistent with approval.
Conclusion
Based on all the facts of record, the Board has determined
that this application should be, and hereby is, approved.
The Board's approval is specifically conditioned on the
compliance by CUB with all the commitments made in
connection with the application. For purposes of this action, the commitments relied on by the Board in reaching
its 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 Dupont shall not be consummated
before the fifteenth calendar day after the effective date of
this order, and not 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
St. Louis, acting pursuant to delegated authority.
By order of the Board of Governors, effective February 12, 2001.
Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley, Meyer, and Gramlich.
9. Examiners noted that, at the time of the most recent CRA
evaluation, Citizens maintained a strong presence in Shelby County,
controlling 40 percent of the deposits in the county, which was the
largest share of any single financial institution. As noted, Citizens
currently has its main office and four out of five branch offices in
Shelby County.
264
Federal Reserve Bulletin • April 2001
ROBERT DEV. FRIERSON
Associate Secretary of the Board
Prosperity Banc shares, Inc.
Houston, Texas
Order Approving the Acquisition of a Bank Holding
Company
Prosperity Bancshares, Inc. ("Prosperity"), 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 merge with Commercial Bancshares, Inc., Houston,
Texas ("Commercial"), and thereby acquire Heritage
Bancshares, Inc., Wilmington, Delaware ("Heritage
Holdco"), a bank holding company that is a wholly owned
subsidiary of Commercial, and its subsidiary bank, Heritage Bank, Wharton, Texas.1
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(65 Federal Register 70,911 (2000)). The time for filing
comments has expired, and the Board has considered the
proposal in light of the factors set forth in section 3 of the
BHC Act.
Prosperity operates the 35th largest depository institution in Texas, controlling $519 million in deposits, which
represent less than 1 percent of total deposits in depository
institutions in the state.2 Commercial operates the
54th largest depository institution in Texas, controlling
$356 million in deposits. On consummation of this proposal, Prosperity would control the 23rd largest depository
institution in Texas, with deposits of $875 million, representing less than 1 percent of the total deposits in depository institutions in the state.
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 would be in furtherance of
any attempt to monopolize the business of banking. The
BHC Act also prohibits the Board from approving a proposed combination that would substantially lessen compe-
1. Under the proposal, Commercial would be merged into Prosperity, which would be the surviving corporation. Immediately following
that merger, Prosperity's wholly owned subsidiary, Prosperity Holdings, Inc., Wilmington, Delaware ("Prosperity Holdco"), which is
also a bank holding company, would be merged into Heritage Holdco.
Heritage Holdco would be the surviving corporation of this second
transaction. In addition, Heritage Bank, currently a state nonmember
bank subsidiary of Heritage Holdco, would be merged into First
Prosperity Bank, which is a subsidiary of Prosperity Holdco and
which would be the surviving corporation of this transaction. The
merger of Heritage Bank and First Prosperity Bank is subject to
review by the Federal Deposit Insurance Corporation ("FDIC") under
the Bank Merger Act (12 U.S.C. § 1828(c)).
2. All data are as of June 30, 2000. In this context, depository
institutions include commercial banks, savings banks, and savings
associations.
tition or tend to create a monopoly in any relevant banking
market, unless the Board finds 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.3
Prosperity and Commercial compete directly in two
banking markets in Texas, the Houston banking market and
the Wharton County banking market.4 The Board has carefully reviewed the competitive effects of the proposal in
each of these banking markets in light of all the facts of
record, including, among other market characteristics, the
share of total deposits in depository institutions ("market
deposits") controlled by each competitor in the markets,5
the concentration level of market deposits, and the increase
in this level as measured by the Herfindahl-Hirschman
Index ("HHI"). 6
Houston Banking Market
Consummation of the proposal in the Houston banking
market would be consistent with the DOJ Guidelines and
Board precedent.7 Prosperity operates the 51st largest depository institution in the market, controlling less than
1 percent of market deposits. Commercial operates the
26th largest depository institution in the market, controlling less than 1 percent of market deposits. On consummation of the proposal, Prosperity would operate the
20th largest depository institution in the market, controlling deposits of $330 million, representing less than 1
percent of market deposits. The HHI for the market would
increase 1 point to 869. The market would remain unconcentrated after consummation of the proposal, and numerous competitors would remain in the market.
3. 12 U.S.C. § 1842(c).
4. The Houston banking market is defined as the Houston Ranally
Metropolitan Area. The Wharton County banking market is defined as
Wharton County, Texas.
5. Market share data are based on calculations that take into account
the deposits of thrift institutions, which include savings banks and
savings associations, weighted 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, e.g.,
Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989);
National City Corporation, 70 Federal Reserve Bulletin 743 (1984).
Thus, the Board regularly has included thrift deposits in the calculation of market share at a weighting of 50 percent. See, e.g., First
Hawaiian, Inc., 11 Federal Reserve Bulletin 52 (1991).
6. Under the Department of Justice Merger Guidelines ("DOJ
Guidelines"), 49 Federal Register 26,823 (June 29, 1984), a market in
which the post-merger HHI is more than 1800 is considered to be
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 effects of limited-purpose lenders and other nondepository financial institutions.
7. Under the DOJ Guidelines, a market in which the post-merger
HHI is less than 1000 points is considered to be unconcentrated.
Legal Developments
Wharton County Banking Market
In the Wharton County banking market, consummation of
the proposal would increase the level of market concentration, as measured by the HHI, to levels that, according to
the DOJ Guidelines and Board precedent, exceed the
threshold for in-depth review of the transaction. Prosperity
operates the largest of the ten depository institutions in the
market, and controls deposits of 139.3 million, representing 25.3 percent of market deposits. Commercial operates
the third largest depository institution in the market, and
controls deposits of $69.4 million, representing 12.6 percent of market deposits. On consummation of the proposal,
Prosperity would operate the largest depository institution
in the market with deposits of $208.7 million, representing
37.9 percent of market deposits. The HHI for the market
would increase 639 points to 2,078.
The Board believes that a number of circumstances
mitigate the potential anticompetitive effects of the transaction.8 In considering the competitive effects of this proposal in the Wharton County banking market, the Board
has evaluated the presence of two savings associations
operating in the market and has concluded that deposits
controlled by the institutions should be weighted at
100 percent in market share calculations.9 Each of these
savings associations engages actively in commercial lending activities and offers a wide variety of business loan
products and other banking services. Accounting for the
revised weighting of these deposits, Prosperity would control 32.8 percent of market deposits, and the HHI would
increase 480 points to 1900 on consummation of the proposal.
The Board has also taken account of other market characteristics. For example, after consummation of the proposal, nine competitors would remain in the market. Two
competitors, in addition to Prosperity, would each control
more than 10 percent of market deposits and four others
would control between 5 and 10 percent of market deposits. In addition, the proximity of the Wharton County
banking market to the Houston banking market and other
factors make the Wharton County banking market an at-
8. As the Board has indicated in previous cases, in a market in
which the competitive effects of a proposal exceed the DOJ Guidelines, the Board will consider whether other factors tend to mitigate
the proposal's competitive effects. The number and strength of factors
necessary to mitigate the competitive effects of a proposal depend on
the level of market concentration and the size of the increase in market
concentration after consummation of the proposal. See NationsBank
Corporation, 84 Federal Reserve Bulletin 129 (1998).
9. The Board previously has indicated that, when analyzing the
competitive effects of a proposal, it may consider the competitiveness
of savings associations based on a deposit weighting greater than
50 percent if appropriate. See, e.g., Banknorth Group, Inc., 75 Federal
Reserve Bulletin 703 (1989). Of the two savings associations in the
Wharton County banking market, one maintains 7.7 percent and the
other maintains 4.6 percent of the loan assets in commercial loans.
This level of commercial lending at these institutions compares favorably with the national average of 3.8 percent of the loan assets in thrift
portfolios that are commercial loan holdings. See First Union Corporation, 84 Federal Reserve Bulletin 489 (1998).
265
tractive market for entry. The percentage increases in per
capita income and market deposits are more than the
average percentage increases in these categories for all
non-MSA counties in Texas. The attractiveness of entry
into the Wharton County banking market is also demonstrated by the de novo entry into the market of a depository
institution in May 2000. In addition, the market gained an
additional bank competitor in April 1999 when an out-ofmarket bank acquired a savings association operating in
the market.
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 Wharton County banking market or any
other relevant banking market. The FDIC has also not
objected to the proposal.
After carefully reviewing all the facts of record, and for
the reasons discussed in the order, the Board concludes that
consummation of the proposal would not likely result in a
significantly adverse effect on competition or on the concentration of banking resources in any of the banking
markets in which Prosperity and Commercial directly compete or in any other relevant banking market. Accordingly,
based on all the facts of record, the Board has determined
that the competitive factors are consistent with approval of
the proposal.
Other Considerations
The BHC Act 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
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 Prosperity. Based on all
the facts of record, the Board concludes that the financial
and managerial resources and the future prospects of Prosperity, Commercial, and their respective depository institutions, are consistent with approval, as are the other supervisory factors that the Board must consider under section
3 of the BHC Act. In addition, considerations relating to
the convenience and needs of the communities to be
served, including the records of performance of the institutions involved under the Community Reinvestment Act
(12 U.S.C. § 2901 et seq.), are consistent with approval of
the application.10
Conclusion
Based on the foregoing, and in light of all the facts of
record, the Board has determined that the application
10. First Prosperity Bank received a "satisfactory" rating from the
FDIC, as of March 1, 2000, and Heritage Bank received a "satisfactory" rating from the FDIC, as of July 1, 2000.
266
Federal Reserve Bulletin • April 2001
should be, and hereby is, approved. The Board's approval
is specifically conditioned on compliance by Prosperity
with all the commitments and representations made in
connection with this application. For purposes of this action, the commitments and conditions relied on by the
Board in reaching its 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 Commercial 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 Dallas, acting pursuant to delegated authority.
By order of the Board of Governors, effective February 5, 2001.
Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley, Meyer, and Gramlich.
ROBERT DEV. FRIERSON
Associate Secretary of the Board
Concurring Statement of Governor Meyer
I believe the proposed acquisition presents a close case
because it allows a very large change in the HHI of the
Wharton County banking market that will take the market
into the highly concentrated range based on the DOJ
Guidelines. I believe we should pay attention to the relations hip between the change in the HHI and the postmerger level of the HHI. For example, only modest mitigating factors would suffice when a modest change in the
HHI takes the post-merger level of the HHI into the highly
concentrated range. On the other hand, when a larger
change in the HHI brings about this result, I would expect
correspondingly more compelling mitigating factors. The
relationship between the change in the HHI and the postmerger level in this case is uncomfortably high and the
relative strength of the mitigating factors make this an
extremely close case.
Orders Issued Under Section 4 of the Bank Holding
Company Act
Great Southern Bancorp, Inc.
Springfield, Missouri
Order Approving the Acquisition of Shares of a Thrift
Holding Company
Great Southern Bancorp, Inc. ("Great Southern"), a financial holding company within the meaning of the Bank
Holding Company Act ("BHC Act"), has requested the
Board's approval under sections 4(c)(8) and 4(j) of the
BHC Act (12 U.S.C. § 1843(c)(8) and 18430)) and section
225.24 of the Board's Regulation Y (12 C.F.R. 225.24) to
own up to 20 percent of the voting shares of Guaranty
Federal Bancshares, Inc., Springfield, Missouri ("Guaranty"). Guaranty controls Guaranty Federal Savings Bank, a
federal savings bank. Great Southern expects that the percentage of its ownership interest in Guaranty will increase
largely as the result of the repurchase by Guaranty of
shares owned by other shareholders.
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(65 Federal Register 71,322 (2000)), and the time for filing
comments has expired. The Board has considered the notice and all comments received in light of the factors set
forth in section 4(j)(2) of the BHC Act.
Great Southern, with total consolidated assets of
$1.1 billion, operates the 12th largest depository institution
in Missouri, controlling deposits of approximately
$436.3 million, representing less than 1 percent of total
deposits in depository institutions in the state.1 Guaranty
controls the 67th largest depository institution in Missouri,
which has deposits of $70.4 million.
The Board previously has determined by regulation that
the ownership of a savings association by a bank holding
company is closely related to banking for purposes of
section 4(c)(8) of the BHC Act.2
Guaranty has objected to the increase in percentage
ownership interest by Great Southern. Guaranty has
adopted anti-takeover provisions designed to discourage a
takeover attempt not approved by Guaranty's board of
directors.3
Great Southern seeks the Board's approval to allow the
percentage of outstanding shares of Guaranty owned by
Great Southern to increase primarily as the result of stock
repurchases by Guaranty. Great Southern has indicated that
it does not intend to exercise control over Guaranty for
purposes of the BHC Act, and, in this connection, has
agreed to abide by certain commitments that the Board has
relied on in other cases to determine that an investing bank
1. Asset and state deposit data are as of June 30, 1999. In this
context, depository institutions include commercial banks, savings
banks, and savings associations.
2. 12 C.F.R. 225.28(b)(4).
3. Guaranty states that the current ownership interest by Great
Southern violates Guaranty's articles of incorporation, which Guaranty asserts would prohibit any person from acquiring more than
10 percent of Guaranty's shares, before December 2002. Guaranty's
articles of incorporation recognize shareholdings in excess of 10 percent under certain circumstances, and impose restrictions on the
voting rights of shareholders with more than a 10-percent ownership
interest. The courts have indicated that the Board must analyze all the
proposals under the BHC Act in light of the factors enumerated in the
BHC Act and may consider matters related to shareholders' rights
only to the extent those matters relate to the factors enumerated in the
BHC Act. See Western Bancshares, Inc. v. Board of Governors, 480
F.2d 749 (10th Cir. 1973). The questions whether the ownership of
more than 10 percent of the shares of Guaranty may be prohibited by
its articles of incorporation or whether the ownership of shares is
permissible and voting rights associated with those shares are restricted are questions of state corporate law, as is the question whether
Great Southern can be placed in violation of the articles of incorporation by stock redemptions made by Guaranty. The Board has analyzed
this proposal under the factors that the Board is required to consider
under the BHC Act.
Legal Developments
holding company would not be able to exercise a controlling influence over a depository institution for purposes of
the BHC Act.4
Based on these commitments and all other facts of
record, it is the Board's judgment that Great Southern
would not acquire control of Guaranty for purposes of the
BHC Act through consummation of this proposal.
The Board is required by section 4(j)(2)(A) of the BHC
Act to determine that the proposal "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."5
Competitive Considerations
As part of its consideration of the public interest factors
under section 4 of the BHC Act, the Board has considered
carefully the competitive effects of the proposal in light of
all the facts of record.6 Great Southern and Guaranty
compete directly in the Springfield, Missouri, banking market ("Springfield banking market").7 If this proposal were
considered an acquisition of control of Guaranty by Great
Southern, Great Southern would control the second largest
depository institution in the Springfield banking market,
representing approximately 14.4 percent of total deposits
in depository institutions in the market ("market deposits"). 8 The Herfindahl-Hirschman Index ("HHI") would
increase by 57 points to 952, and the market would remain
unconcentrated.9 Based on these and all other facts of
4. For example, Great Southern has committed not to exercise or
attempt to exercise a controlling influence over the management or
policies of Guaranty or any of its subsidiaries, and not to have any
employees or representatives of Great Southern serve as an officer,
employee, or agent of Guaranty. Great Southern also has committed
not to attempt to influence the dividend policies, loan decisions, or
operations of Guaranty or any of its subsidiaries. These commitments
were made in connection with the Federal Reserve System's approval
of Great Southern's request in April 1999 to acquire up to 15 percent
of the voting shares of Guaranty and are incorporated by reference.
5. 12 U.S.C. 1843(j)(2)(A).
6. See First Hawaiian, Inc., 79 Federal Reserve Bulletin 966
(1993).
7. The Springfield banking market consists of Christian, Green, and
Webster Counties, all in Missouri.
8. Market share data are as of June 30, 1999, and are based on
calculations in which the deposits of thrift institutions are included at
50 percent before consummation. 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 Board has
analyzed the competitive factors in this case as if Great Southern and
Guaranty were a combined entity, the deposits of Guaranty are included at 100 percent in the calculation of Great Southern's postconsummation share of market deposits. See Norwest
Corporation,
78 Federal Reserve Bulletin 452 (1992); First Banks, Inc., 76 Federal
Reserve Bulletin 669 (1990).
9. Under the revised Department of Justice Merger Guidelines,
49 Federal Register 26,823 (June 29, 1984), a market in which the
post-merger HHI is less than 1000 points is considered to be unconcentrated. The Department of Justice has informed the Board that a
bank merger or acquisition generally will not be challenged (in the
267
record, the Board concludes that consummation of the
proposal would not result in any significantly adverse
effects on competition or on the concentration of banking
resources in the Springfield banking market or any other
relevant banking market.
Financial, Managerial, and Supervisory Considerations
The Board also has carefully reviewed the financial and
managerial resources of Great Southern and Guaranty and
their respective subsidiaries and the effect the transaction
would have on such resources in light of all the facts of
record.
The Board has reviewed, among other things, confidential reports of examination and other supervisory information received from the primary federal supervisors of the
organizations. The Board has also considered the limited
relationship Great Southern proposes to have with Guaranty and the matters raised by Guaranty to the extent they
bear on the managerial resources of Great Southern. In
reviewing managerial resources, the Board consulted with
the OTS, which is the appropriate federal banking agency
for Guaranty. The OTS has indicated no objection to Board
approval of this notice. Based 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.
This proposal is designed to ensure that Great Southern's interest in Guaranty remains in compliance with the
BHC Act after Guaranty repurchases its shares, and consummation of the proposal would have minimal adverse
effects on concentration of resources, decreased or unfair
competition, conflicts of interests, or unsound banking
practices. Based on the foregoing and all the facts of
record, including consultations with OTS staff, and commitments made by Great Southern that prevent it from
exercising control over Guaranty, the Board has determined that consummation of the proposal can reasonably
be expected to produce benefits to the public that outweigh
any potential adverse effects of the proposal under the
standard of section 4(j)(2) 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. The Board's approval of the proposal is
specifically conditioned on compliance by Great Southern
with the commitments made in connection with this notice.
The Board's determination also is subject to the Board's
authority to require such modification or termination of the
activities of a holding company or any of its subsidiaries as
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 DOJ has stated that the higher than normal
HHI thresholds for screening bank mergers for anticompetitive effects
implicitly recognize the competitive effects of limited-purpose lenders
and other nondepository financial institutions.
268
Federal Reserve Bulletin • April 2001
the Board finds necessary to ensure 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 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 decisions 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 St. Louis, acting pursuant to
delegated authority.
By order of the Board of Governors, effective February 26, 2001.
Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Meyer and Gramlich. Absent and not voting:
Governor Kelley.
ROBERT DEV. FRIERSON
Associate Secretary of the Board
Orders Issued Under Sections 3 and 4 of the Bank
Holding Company Act
MetLife, Inc.
New York, New York
Order Approving Formation of a Bank Holding Company
and Determination on a Financial Holding Company Election MetLife, Inc. ("MetLife") has requested the Board's
approval under section 3 of the Bank Holding Company
Act ("BHC Act") (12 U.S.C. § 1842) to become a bank
holding company by acquiring all the shares of Grand
Bank, National Association, Kingston, New Jersey
("Bank"). 1 As part of its proposal to become a bank
holding company, MetLife has also filed with the Board an
election to become a financial holding company pursuant
to section 4(k) and (1) of the BHC Act (12 U.S.C. § 1843(k)
& (1)) and section 225.82 of the Board's Regulation Y
(12 C.F.R. 225.82).
Notice of the proposal under section 3 of the BHC Act,
affording interested persons an opportunity to submit com-
1. MetLife's principal subsidiary, Metropolitan Life Insurance Company, New York, New York ("Metropolitan Life"), converted from
mutual to stock organization in April 2000 (the "Demutualization").
As part of the Demutualization, MetLife established a policyholder
trust (the "Trust") to permit the administration of stockholder
accounts created through the conversion of Metropolitan Life to stock
form.
Based on the special circumstances regarding the formation, duration, voting rights and transferability of shares held by the Trust, the
Board has determined that the Trust, which currently holds the majority of the shares of MetLife, is not a "company" for purposes of the
BHC Act at the present time. The Board may revisit this determination if the facts at a later date indicate that the terms or operation of
the Trust have changed to cause the Trust to become in form more like
a company, or become a vehicle for exercising control over MetLife
or for conducting other activities.
ments, has been published (65 Federal Register 60,671
(2000)). 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.
MetLife, with total consolidated assets of $258 billion, is
an insurance and financial services firm engaged principally in the business of underwriting life and property and
casualty insurance.2 MetLife also engages in a variety of
other financial activities in the United States and internationally, including investment advisory and securities brokerage activities, and offers annuity, mutual fund, pension,
retirement, and other investment products and related services.
Bank, with total consolidated assets of $83.8 million, is
the 126th largest depository institution in New Jersey,
controlling deposits of approximately $51.9 million in the
state, representing less than 1 percent of the state's deposits.3
Factors Governing Board Review of Transaction
The BHC Act sets forth the factors that the Board must
consider when reviewing the formation of a bank holding
company or the acquisition of a bank. These factors are the
competitive effects of the proposal in the relevant geographic markets; 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, including the records of performance
under the Community Reinvestment Act (12 U.S.C. § 2901
et seq.) ("CRA") of the insured depository institutions
involved in the transaction; and the availability of information needed to determine and enforce compliance with the
BHC Act and other applicable federal banking laws.4
Competitive Considerations
Section 3 of the BHC Act prohibits the Board from approving a proposal that would result in a monopoly. The BHC
Act also prohibits the Board from approving a proposed
bank acquisition that would substantially lessen competition in any relevant banking market unless 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.5
The proposal involves the acquisition of a bank by
MetLife, which owns a limited-purpose trust company and
a variety of nonbanking companies but does not own a
2. Asset data for MetLife are as of September 30, 2000.
3. Asset data for Bank are as of September 30, 2000, and deposit
and ranking data are as of June 30, 2000.
4. In cases involving interstate bank acquisitions by bank holding
companies, the Board also must consider the concentration of deposits
nationwide and within relevant individual states, as well as compliance with the other provisions of section 3(d) of the BHC Act.
5. 12 U.S.C. § 1842(c)(1).
Legal Developments
commercial bank or savings association.6 Based on all the
facts of record, the Board concludes that consummation of
the proposal would not result in any significantly adverse
effects on competition or on the concentration of banking
resources in any relevant market. Accordingly, the Board
has determined that the competitive factors under section 3
of the BHC Act are consistent with approval of the proposal.
Financial and Managerial Considerations
The Board has carefully considered the financial and managerial resources and future prospects of the companies
and bank involved in the proposal, the effect the proposed
transaction would have on such resources, and other supervisory factors in light of all the facts of record. In evaluating the financial and managerial factors, the Board has
reviewed confidential examination and other supervisory
information evaluating the financial and managerial
strength of MetLife and its affiliates, including its regulated
subsidiaries, and of Bank.
The Board consistently has considered capital adequacy
to be an especially important aspect of the analysis of
financial factors.7 Bank and all the subsidiaries of MetLife
that are subject to regulatory capital requirements currently
exceed those relevant minimum regulatory capital requirements. In addition, Bank is currently well capitalized under
relevant federal guidelines. Other financial factors also are
consistent with approval.
The Board has carefully considered the managerial resources of MetLife and Bank in light of all the facts of
record, including confidential examination and other supervisory information, information submitted by state insurance regulators and enforcement authorities in response to
requests by the Board, and information provided by
MetLife regarding its existing and proposed risk management policies and procedures.8 Based on all the facts of
record, the Board concludes that considerations relating to
the financial and managerial resources and future prospects
of the organizations involved are consistent with approval.
6. MetLife owns MetLife Trust Company, N.A., Bedminster, New
Jersey ("MTC"), a limited-purpose trust company that is not a bank
for purposes of the BHC Act. See 12 U.S.C. § 1841(c).
7. See Chemical Banking Corporation, 82 Federal Reserve Bulletin
230(1996).
8. Two commenters urged the Board to consider recent settlements
that Metropolitan Life entered in connection with a class-action suit
and several administrative actions that state insurance regulators initiated following charges that Metropolitan Life agents employed deceptive practices in selling whole life insurance policies. These commenters, and another commenter, also noted a recent joint administrative
sanction from Florida and Georgia insurance regulators directed
against 29 insurance companies, including Metropolitan Life, concerning alleged racial discrimination in pricing small-value life insurance
policies that were sold in the 1950s and 1960s. The Board has
considered these matters in light of all the facts of record, including in
particular the comments of state insurance regulators and information
that MetLife provided about its compliance operations, such as enhancements that MetLife has made to its compliance program in
response to the problems identified in these investigations and lawsuits.
269
The Board notes further that a substantial proportion of
MetLife's activities are conducted in subsidiaries that are
subject to functional regulation by state insurance commissions or by the Securities and Exchange Commission
("SEC"). The Board will, consistent with the provisions of
section 5 of the BHC Act as amended by the GrammLeach-Bliley Act, rely heavily on the appropriate state
insurance regulators and the SEC for examination and
other supervisory information in fulfilling the Board's responsibilities as holding company supervisor.
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 received on the effect the proposal would have
on the communities to be served.
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 CRA. As
provided in the CRA, the Board evaluates the record of
performance of an institution in light of examinations by
the appropriate 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
appropriate federal supervisor.9
MetLife currently does not control an institution subject
to evaluation under the CRA. The Board has reviewed in
detail, however, the record of performance of Bank under
the CRA as well as information presented by MetLife
related to the convenience and needs factor.10 Bank received an overall rating of "satisfactory" from its primary
federal supervisor, the Office the Comptroller of the Currency ("OCC"), at its most recent evaluation for CRA
performance, as of February 2000. OCC examiners reviewed Bank under the CRA small bank performance
test,11 and MetLife has requested that the OCC continue to
evaluate Bank under that test after consummation of the
proposal.12 Based on all the facts of record, the Board
9. The Interagency Questions and Answers Regarding Community
Reinvestment ("CRA Q&A") provide that a CRA examination is an
important and often controlling factor in the consideration of an
institution's CRA record. See 65 Federal Register 25,088 and 25,107
(2000).
10. One commenter asked the Board to consider, as part of its
review of the convenience and needs factor, the actions of a MetLife
subsidiary in raising rents in an apartment complex in Waltham,
Massachusetts. Such actions by MetLife are, however, outside the
scope of the convenience and needs factor, which has been interpreted
consistently by the federal banking agencies, the courts, and Congress
to relate to the effect of a proposal on the availability and quality of
banking services in the community. See Wells Fargo & Company,
82 Federal Reserve Bulletin 445, 457 (1996).
11 .See 12 C.F.R. 25.26(a).
12. MetLife initially proposed that Bank be designated as a wholesale bank for CRA purposes.
270
Federal Reserve Bulletin • April 2001
concludes that considerations related to the convenience
and needs of the communities to be served are consistent
with approval.13
Conclusion Regarding Bank Acquisition
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.14 In reaching its conclusion, the Board has considered all the facts of record in
light of the factors the Board is required to consider under
the BHC Act and other applicable statutes. The Board's
approval is specifically conditioned on compliance by
MetLife with all the commitments made in connection
with the application. For the purpose of this action, the
commitments relied on by the Board in reaching its 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 transaction shall not be consummated before the
fifteenth calendar day after the effective date of this order,
or later than three months after the effective date of this
order, unless such periods are extended for good cause by
the Board or the Federal Reserve Bank of New York,
acting pursuant to delegated authority.
One commenter requested that the Board identify a larger CRA
assessment area for Bank to use after consummation of the proposal
than the one currently used. The appropriateness of Bank's designated
assessment area is, however, determined by the OCC as Bank's
primary federal supervisor.
13. One commenter requested that the Board require MetLife to
devote at least 2 percent of its assets to lending and investments in
low-income communities nationwide as a condition of approval of the
proposal. Although Bank's lending and investment in low-income
communities has been and will continue to be reviewed by the OCC in
assessing Bank's performance under the CRA, neither the CRA nor
the applicable regulations of the federal supervisory authorities require a bank or its affiliates to meet specific lending or investment
targets based on the size of the institution.
14. Two commenters requested that the Board hold a public meeting
or hearing on the proposal. Section 3(b) of the BHC Act does not
require the Board to hold a public hearing on an application unless the
appropriate supervisory authority for the bank to be acquired makes a
timely written recommendation of denial of the application. The
Board has not received such a recommendation from the appropriate
supervisory authority.
Under its rules, the Board also may, in its discretion, hold a public
meeting or hearing on an application to acquire a bank if a meeting or
hearing is necessary or appropriate to clarify factual issues related to
the application and to provide an opportunity for testimony. 12 C.F.R.
225.16(e). The Board has considered carefully the commenters' request in light of all the facts of record. In the Board's view, commenters have had ample opportunity to submit their views, and they did
submit written comments that have been considered carefully by the
Board in acting on the proposal. The commenters' requests fail to
demonstrate why their written comments do not present their views
adequately and fail to identify disputed issues of fact that are material
to the Board's decision that would be clarified by a public meeting or
hearing. For these reasons, and based on all the facts of record, the
Board has determined that a public meeting or hearing is not required
or warranted in this case. Accordingly, the requests for a public
meeting or hearing on the proposal are denied.
Financial Holding Company Declaration
MetLife also has filed with the Board an election to become a financial holding company pursuant to section 4(k)
and (1) of the BHC Act and section 225.82 of Regulation Y.
MetLife has certified that Bank and MTC are well capitalized and well managed, and has provided all the information required under Regulation Y.15
The Board has reviewed the examination ratings received by Bank under the CRA and other relevant examinations and information. Based on all the facts of record,
the Board has determined that this election to become a
financial holding company will become effective on consummation of the acquisition of Bank by MetLife, as long
as Bank and MTC continue to be well capitalized, well
managed, and Bank has at least a satisfactory CRA rating
on that date.
By order of the Board of Governors, effective February 12, 2001.
Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley, Meyer, and Gramlich.
ROBERT DEV. FRIERSON
Associate Secretary of the Board
UFJ Holdings, Inc. (In Formation)
Osaka, Japan
Order Approving Formation of a Bank Holding
Company and Acquisition of Nonbanking Companies
UFJ Holdings, Inc. (in formation) ("UFJ"), has requested
the Board's approval under section 3 of the Bank Holding
Company Act (12 U.S.C. § 1842) ("BHC Act") to become
a bank holding company by indirectly acquiring the U.S.
subsidiary banks of The Sanwa Bank, Limited, Osaka,
Japan ("Sanwa"), and The Tokai Bank, Limited, Nagoya,
Japan ("Tokai"). 1 UFJ also has requested the Board's
approval under sections 4(c)(8) and 4(j) of the BHC Act
(12 U.S.C. § 1843(c)(8) and 4(j)) and section 225.24 of the
Board's Regulation Y (12 C.F.R. 225.24) to acquire the
U.S. nonbanking subsidiaries of Sanwa and The Toyo Trust
and Banking Company, Limited, Tokyo, Japan ("Toyo"),
and thereby engage in certain permissible nonbanking activities.2
15. Although MTC is not a bank for purposes of the BHC Act, it is a
depository institution as defined in the Federal Deposit Insurance Act
and, therefore, MetLife must certify that MTC is well capitalized and
well managed as part of MetLife's election to become a financial
holding company. See 12 U.S.C. § 1813(c)(1), 1843(1)(1). As noted
above, MTC is not subject to CRA.
1. The U.S. subsidiary banks are Sanwa Bank California, San
Francisco, California ("Sanwa Bank"), and Tokai Bank of California,
Los Angeles, California ("Tokai Bank").
2. The nonbanking activities of Sanwa and Toyo for which UFJ has
sought Board approval under sections 4(c)(8) and 4(j) of the BHC Act
are listed in the Appendix.
Legal Developments
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(65 Federal Register 64,445 (2000). 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.
UFJ is a corporation that would be formed under the
laws of Japan to acquire Sanwa, Tokai, and Toyo.3 On
consummation of the proposal, UFJ would become the
second largest banking organization in Japan, with total
consolidated assets of $783 billion.4
Sanwa, with total consolidated assets of $429 billion, is
the fifth largest bank in Japan. In the United States, Sanwa
owns Sanwa Bank and operates branches in Los Angeles
and San Francisco, California; Chicago, Illinois; and New
York, New York; and representative offices in Houston,
Texas, and New York, New York.
Tokai, with total consolidated assets of $278 billion, is
the eighth largest bank in Japan. In the United States, Tokai
owns Tokai Bank and operates branches in Chicago, Illinois, and New York, New York; an agency in Los Angeles,
California; and representative offices in Florence, Kentucky, and New York, New York.
Toyo, with total consolidated assets of $76 billion, is the
17th largest bank in Japan. In the United States, Toyo
operates a representative office in New York, New York.
In addition, Sanwa, Tokai, and Toyo engage in a broad
range of permissible nonbanking activities in the United
States through subsidiaries.
Factors Governing Board Review of the Proposal
The BHC Act sets forth the factors that the Board must
consider when reviewing the formation of a bank holding
company or the acquisition of banks. These factors are the
competitive eifects of the proposal in the relevant geographic markets; the financial and managerial resources
and future prospects of the companies and banks involved
in the proposal; the convenience and needs of the community to be served, including the records of performance
under the Community Reinvestment Act (12 U.S.C. § 2901
et seq.) ("CRA") of the insured depository institutions
involved in the transaction; the availability of information
needed to determine and enforce compliance with the BHC
Act and other applicable federal banking law; and, in the
case of applications involving foreign banks, whether the
foreign banks involved are subject to comprehensive supervision and regulation on a consolidated basis by their home
country supervisor.5
3. The transaction would be effected through the exchange of
shares. UFJ's corporate existence would begin on its commercial
registration after consummation of the exchange of shares. See Japanese Commercial Code, art. 370.
4. All asset and ranking data are as of March 31, 2000, and are
based on exchange rates then applicable.
5. In cases, unlike this proposal, involving interstate bank acquisitions, the Board also must consider the concentration of deposits in
the United States and relevant individual states, and compliance with
other provisions of section 3(d) of the BHC Act.
271
The Board has considered these factors in light of a
record that includes information provided by UFJ, Sanwa,
Tokai, and Toyo; confidential supervisory and examination
information; and publicly reported financial and other information. The Board also has considered information collected from the primary home country supervisor of Sanwa,
Tokai, and Toyo, and from various federal and state agencies, including the California Department of Banking and
other relevant agencies.
Competitive Considerations
Section 3 of the BHC Act prohibits the Board from approving a proposal that would result in a monopoly. The BHC
Act also prohibits the Board from approving a proposed
bank acquisition that would substantially lessen competition in any relevant banking market unless 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.6
Sanwa and Tokai control banking operations that compete directly in the Los Angeles, Sacramento, San Diego,
and San Francisco-Oakland-San Jose banking markets, all
in California.7 In each of these markets, the HerfindahlHirschman Index ("HHI") would increase by 5 points or
less,8 UFJ would control less than 5 percent of total deposits in insured depository institutions in the market ("market
deposits"), and the banking market would remain unconcentrated or moderately concentrated with numerous competitors remaining in the market.9 Based on these and all
the facts of record, the Board concludes that consummation
6. 12 U.S.C. § 1842(c)(1).
7. The Los Angeles banking market includes the Los Angeles
Ranally Metropolitan Area ("RMA") and the towns of Rancho Santa
Margarita and Rosamond. The Sacramento banking market includes
the Sacramento RMA and the town of Cool. The San Diego banking
market includes the San Diego RMA and the town of Pine Valley. The
San Francisco-Oakland-San Jose banking market includes the
San Francisco-Oakland-San Jose RMA and the towns of Hollister,
Pescadero, Point Reyes Station, and San Juan Bautista.
8. Under the Revised Department of Justice Merger Guidelines,
49 Federal Register 26,823 (June 29, 1984), a market is considered
unconcentrated if the post-merger HHI is less than 1000 and moderately concentrated if the post-merger HHI is between 1000 and 1800.
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 eifects) 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 effects of limitedpurpose lenders and other nondepository financial entities.
9. Market share data are as of June 30, 1999. In the Los Angeles
banking market, the HHI would increase by 5 points to 979 and UFJ
would control 3.6 percent of market deposits. In the Sacramento
banking market, the HHI would increase by 1 point to 1197 and UFJ
would control 1.7 percent of market deposits. In the San Diego
banking market, the HHI would remain unchanged at 1207 and UFJ
would control less than 1 percent of market deposits. In the San
Francisco-Oakland-San Jose banking market, the HHI would remain
unchanged at 1495 and UFJ would control 1.3 percent of market
deposits.
272
Federal Reserve Bulletin • April 2001
of the proposal would not result in any significantly adverse effects on competition or on the concentration of
banking resources in these or any other relevant banking
markets.
Certain Supervisory Considerations
Under section 3 of the BHC Act, the Board may not
approve an application involving a foreign bank unless the
bank is "subject to comprehensive supervision or regulation on a consolidated basis by the appropriate authorities
in the bank's home country."10 The Board has determined
previously, in applications under the BHC Act, that certain
Japanese commercial banks, including Sanwa, were subject to comprehensive consolidated supervision by their
home country supervisor.11 In this case, the Board has
determined that Tokai and Toyo are supervised on substantially the same terms and conditions as other Japanese
banks reviewed by the Board. In addition, Japan's Financial Services Agency ("FSA") has supervisory authority
with respect to UFJ and its nonbanking subsidiaries. The
FSA may conduct inspections of UFJ and its subsidiaries
and require UFJ to submit reports about its operations on a
consolidated basis. The FSA also may review transactions
between UFJ and its subsidiaries and has authority to
require UFJ to take measures necessary to ensure the safety
and soundness of the UFJ organization. Based on all the
facts of record, the Board has concluded that Sanwa, Tokai,
and Toyo are subject to comprehensive supervision and
regulation on a consolidated basis by their home country
supervisor.
The BHC Act also requires the Board to determine that
the applicants have provided adequate assurances that they
will make available to the Board such information on their
operations and activities and those of their affiliates that the
Board deems appropriate to determine and enforce compliance with the BHC Act. The Board has reviewed the
restrictions on disclosures in jurisdictions where Sanwa,
Tokai, and Toyo have and UFJ would have material operations and has communicated with relevant government
authorities concerning access to information. UFJ has committed that, to the extent not prohibited by applicable law,
it will make available to the Board such information on the
operations of UFJ and any of its affiliates that the Board
deems necessary to determine and enforce compliance with
10. 12 U.S.C. § 1842(c)(3)(B). As provided in Regulation Y, the
Board determines whether a foreign bank is subject to consolidated
home country supervision under the standards set forth in Regulation K. 12 C.F.R. 225.13(a)(4). Regulation K provides that a foreign
bank may be considered subject to consolidated supervision if the
Board determines that the bank is supervised or regulated in such a
manner that its home country supervisor receives sufficient information on the worldwide operations of the foreign bank, including the
relationships of the bank to its affiliates, to assess the foreign bank's
overall financial condition and compliance with law and regulation.
12 C.F.R. 211.24(c)(l)(ii).
11. See Mizuho Holdings, Inc., 86 Federal Reserve Bulletin 776
(2000); The Sanwa Bank, Limited, 86 Federal Reserve Bulletin 54
(2000); The Fuji Bank, Limited, 85 Federal Reserve Bulletin 338
(1999).
the BHC Act and other applicable federal law. UFJ also
has committed to cooperate with the Board to obtain any
waivers or exemptions that may be necessary in order to
enable UFJ to make any such information available to the
Board. In light of these commitments and other facts of
record, the Board has concluded that UFJ has provided
adequate assurances of access to any appropriate information the Board may request. For these reasons, and based
on all the facts of record, the Board has concluded that the
supervisory factors it is required to consider under section
3 of the BHC Act are consistent with approval.
Financial, Managerial, and Convenience and Needs
Considerations
The Board also has considered carefully the financial and
managerial resources and future prospects of UFJ and the
banks involved in the proposal, the effect the proposed
transaction would have on such resources, and other supervisory factors in light of all the facts of record. The Board
has consulted with and considered the views regarding this
transaction of the home country supervisor for the banking
organizations involved. The Board notes that the proposal
is intended to enhance the overall financial strength and
future prospects of the combined organization. The transaction would occur through an exchange of shares, and
Sanwa, Tokai, and Toyo would issue no debt as part of the
transaction. UFJ's stated pro forma capital levels would
exceed the minimum levels that would be required under
the Basle Capital Accord, and its capital levels are considered equivalent to the capital levels that would be required
of a U.S. banking organization under similar circumstances.
In addition, the Board has reviewed supervisory information from the home country authorities responsible for
supervising Sanwa, Tokai, and Toyo concerning the proposal and the condition of the parties; confidential financial
information from Sanwa, Tokai, and Toyo; and reports of
examination from the appropriate federal and state supervisors of the affected organizations assessing the financial
and managerial resources of the organizations. Based on all
the facts of record, the Board has concluded that the
financial and managerial resources and future prospects of
the organizations involved in the proposal are consistent
with approval.
Sanwa Bank received an "outstanding" CRA performance rating from the Federal Deposit Insurance Corporation ("FDIC") at its most recent examination, as of August
1998. Tokai Bank also received an "outstanding" CRA
performance rating from the FDIC at its most recent examination, as of June 2000. Toyo has no operation in the
United States that is subject to examination under the
CRA.12 In light of all the facts of record, the Board has
12. Until recently, Toyo Trust Company of New York, New York,
New York ("Toyo Trust"), which performs trust company functions,
was an insured depository institution. Toyo Trust received an "outstanding" CRA performance rating from the FDIC at its last examination, as of September 1998.
Legal Developments
concluded that considerations relating to the convenience
and needs of the communities to be served, including the
records of performance of the relevant depository institutions under the CRA, are consistent with approval.
273
their bank-ineligible securities activities subject to the Operating Standards established for section 20 subsidiaries
("Operating Standards").16
Other Activities Approved by Regulation or Order
Nonbanking Activities
UFJ also has filed notices under section 4(c)(8) and 4(j) of
the BHC Act to acquire the U.S. nonbanking subsidiaries
of Sanwa and Toyo and to engage in the United States in
various permissible nonbanking activities. Sanwa engages
in bank-ineligible securities activities in the United States
through its section 20 subsidiary, Sanwa Universal Securities Co, L.L.C., New York, New York ("Sanwa Universal"). Sanwa Universal is and would continue to be registered as a broker-dealer with the Securities and Exchange
Commission ("SEC") under the Securities Exchange Act
of 1934 ("1934 Act"). 13 Accordingly, Sanwa Universal is
and would continue to be subject to the recordkeeping and
reporting obligations, fiduciary standards, and other requirements of the SEC and the 1934 Act.
Underwriting and Dealing in Bank-Ineligible Securities
The Board determined by order before November 12,
1999, that, subject to the prudential framework of limitations established in previous decisions to address the potential for conflicts of interests, unsound banking practices, or
other adverse effects, underwriting and dealing in bankineligible securities 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.14 The Board has permitted such
securities activities on the condition that the company
engaged in the activities derives no more than 25 percent
of its gross revenues from underwriting and dealing in
bank- ineligible securities over a two-year period.15 UFJ
has committed that it will conduct its bank-ineligible securities underwriting and dealing activities subject to the
25-percent revenue limitation and the limitations previously established by the Board. As a condition of this
order, UFJ and Sanwa Universal are required to conduct
13. 15 U.S.C. § 78a et seq.
14. See Canadian Imperial Bank of Commerce, et al., 76 Federal
Reserve Bulletin 158 (1990); J.P. Morgan & Co., Incorporated, et al.,
75 Federal Reserve Bulletin 192 (1989), aff'd sub nom. Securities
Industry Ass 'n v. Board of Governors of the Federal Reserve System,
900 F.2d 360 (D.C. Cir. 1990); Citicorp, et al., 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) (collectively, "Section 20
Orders").
15. See Section 20 Orders. 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
Bank-Ineligible Activities of Subsidiaries of Bank Holding Companies
Engaged in Underwriting and Dealing in Securities, 61 Federal
Register 68,750 (1996) (collectively, "Modification Orders").
The Board determined by regulation before November 12,
1999, that extending credit and engaging in activities related to extending credit; leasing activities; trust company
functions; providing financial and investment advisory services; providing securities brokerage, riskless principal,
private placement, futures commission merchant, and other
agency transactional services; and engaging in investment
transactions as a principal are closely related to banking for
purposes of section 4(c)(8) of the BHC Act.17 UFJ has
committed that it will conduct these activities in accordance with the Board's regulations and prior Board decisions relating to the activities.
In order to approve the notice, the Board also must
determine that the acquisition of the U.S. nonbanking subsidiaries of Sanwa, Tokai, and Toyo and the performance
of the proposed activities by UFJ 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.18
UFJ has indicated that the proposal would improve the
financial position and future business prospects of the
current banking and nonbanking subsidiaries of Sanwa,
Tokai, and Toyo. In addition, the proposal would make
available a broader range of services to customers of
Sanwa, Tokai, and Toyo.
The Board has carefully considered the competitive effects of the proposed transaction under section 4 of the
BHC Act.19 To the extent that Sanwa, Tokai, and Toyo
offer different types of nonbanking products, the proposal
would result in no loss of competition. Certain nonbanking
subsidiaries of Sanwa, Tokai, and Toyo compete, however,
in the market for providing trust company functions. The
market for this nonbanking activity is regional or national.
The record in this case also indicates that there are numerous providers of trust services and that the market for trust
services is unconcentrated. For these reasons, and based on
all the facts of record, the Board concludes that consummation of the proposal would have a de minimis effect on
competition.
The Board also believes that the conduct of the proposed
nonbanking activities within the framework established in
16. 12C.F.R. 225.200. Sanwa Universal may provide services that
are necessary incidents to the proposed underwriting and dealing
activities. Unless Sanwa Universal receives specific approval under
section 4(c)(8) of the BHC Act to conduct the incidental activities
independently, any revenues from such activities must be treated as
ineligible revenues subject to the Board's revenue limitation.
17. See 12 C.F.R. 225.28(b)(1), (2), (3), (5), (6), (7), and (8).
18. See 12 U.S.C. § 1843(j)(2)(A).
19. The Board approved previously the acquisition by Sanwa of up
to 32 percent of the voting shares of Toyo. See The Sanwa Bank,
Limited, 86 Federal Reserve Bulletin 54 (2000).
274
Federal Reserve Bulletin • April 2001
this order, prior orders, and Regulation Y is not likely to
result in adverse effects, such as undue concentration of
resources, decreased or unfair competition, conflicts of
interests, or unsound banking practices, that would not be
outweighed by the public benefits of the proposal, such as
increased customer convenience and gains in efficiency.
Accordingly, based on all the facts of record, the Board
has determined that the balance of public interest factors
that the Board must consider under the standard of section
4(j) of the BHC Act is favorable and consistent with
approval of the proposal.
proposal may not be consummated later than three months
after the effective date of this order, unless such period is
extended for good cause by the Board, or by the Federal
Reserve Bank of San Francisco, acting pursuant to delegated authority.
By order of the Board of Governors, effective February 5, 2001.
Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley, Meyer, and Gramlich.
R O B E R T DEV. FRIERSON
Associate Secretary of the Board
Conclusion
Appendix
Based on the foregoing, the Board has determined that the
transaction should be, and hereby is, 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 of the proposal extends only to activities
conducted within the limitations of those orders and this
order, including the Board's reservation of authority to
establish additional limitations to ensure that the activities
of UFJ are consistent with safety and soundness, avoidance
of conflicts of interests, and other relevant considerations
under the BHC Act. Underwriting and dealing in any
manner other than as approved in this order and the Section 20 Orders (as modified by the Modification Orders) is
not within the scope of the Board's approval and is not
authorized for UFJ or Sanwa Universal.
In reaching its conclusion, the Board has considered all
the facts of record in light of the factors that the Board is
required to consider under the BHC Act and other applicable federal statutes. The Board's approval is specifically
conditioned on compliance by UFJ with all the commitments made in connection with this application and notice,
including the commitments discussed in this order, and the
conditions set forth in the order and the above- noted
Board regulations and orders, and on the Board's receiving
access to information on the operations or activities of UFJ
and any of its affiliates that the Board determines to be
appropriate to determine and enforce compliance by UFJ
and its affiliates with applicable federal statutes. The
Board's approval of the nonbanking aspects of the proposal also is subject to all the 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. These commitments and conditions are deemed to be conditions imposed in writing by
the Board in connection with its findings and decision and,
as such, may be enforced in proceedings under applicable
law.
The acquisition of the subsidiary banks of Sanwa and
Tokai may not be consummated before the fifteenth calendar day after the effective date of this order, and the
Nonbanking Activities of Sanwa, Tokai, and Toyo in
which UFJ Proposes to Engage
(1) Extending credit and servicing loans, in accordance
with section 225.28(b)(1) of the Board's Regulation Y
(12 C.F.R. 225.28(b)(1));
(2) Activities related to extending credit, in accordance
with section 225.28(b)(2) of the Board's Regulation Y
(12 C.F.R. 225.28(b)(2));
(3) Providing leasing services, in accordance with section
225.28(b)(3) of the Board's Regulation Y (12 C.F.R.
225.28(b)(3));
(4) Performing trust company functions, in accordance
with section 225.28(b)(5) of the Board's Regulation Y
(12 C.F.R. 225.28(b)(5));
(5) Providing financial and investment advisory services,
in accordance with section 225.28(b)(6) of the Board's
Regulation Y (12 C.F.R. 225.28(b)(6));
(6) Providing securities brokerage, riskless principal, private placement, futures commission merchant, and
other agency transactional services, in accordance with
section 225.28(b)(7)(i)- (v) of Regulation Y (12 C.F.R.
225.28(b)(7)(i)-(v));
(7) Engaging in investment transactions as principal, in
accordance with section 225.28(b)(8) of Regulation Y
(12 C.F.R. 225.28(b)(8)); and
(8) Engaging in underwriting and dealing to a limited
extent in municipal revenue bonds, 1-4 family
mortgage-related securities, commercial paper, and
consumer receivable-related securities, as approved by
the Board in The Sanwa Bank, Limited, 76 Federal
Reserve Bulletin 568 (1990).
ORDERS ISSUED UNDER BANK MERGER ACT
Allfirst Bank
Baltimore, Maryland
Order Approving Establishment of Branches
Allfirst Bank, Baltimore, Maryland ("Allfirst"), a state
member bank, has given notice under section 9 of the
Federal Reserve Act ("Act") (12 U.S.C. § 321 et seq.), of
Legal Developments
its intention to establish branches at Central Avenue &
Campus Way South, Largo, Maryland; and Broadcast
Square Center, Broadcast Road & Papermill Road, Reading, Pennsylvania.
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published in
accordance with the Board's Rules of Procedure (12 C.F.R.
262.3(b)). The time for filing comments has expired, and
the Board has considered the notices and all comments
received in light of the factors specified in the Act.
Allfirst is the largest commercial banking organization in
Maryland, controlling deposits of approximately $11.6 billion, representing 34.6 percent of commercial banking
deposits in the state.1 Allfirst is a wholly owned subsidiary
of Allfirst Financial Inc., Baltimore, Maryland, and Allied
Irish Banks, P.L.C., Dublin, Ireland.
Community Reinvestment Act Considerations
In acting on an application to establish a branch, the Board
is required to take into account the bank's record under the
Community Reinvestment Act ("CRA"). 2 The CRA requires the federal financial supervisory agencies to encourage financial institutions to help meet the credit needs of
the local communities in which they operate, consistent
with their safe and sound operation, and requires the appropriate federal supervisory authority to assess the institution's record of meeting the credit needs of its entire
community, including low- and moderate-income ("LMI")
neighborhoods, in evaluating branch applications.
The Board has received a comment from the Maryland
Center for Community Development ("MCCD"), a statewide nonprofit organization, that criticizes Allfirst's record
of opening branches in Baltimore. MCCD alleges that
Allfirst has failed to serve the LMI areas of the city, and
that residents in these areas must obtain transportation to
reach a bank branch or use check cashing outlets when
seeking financial services. MCCD also encourages Allfirst
to establish alternative delivery systems to provide banking
services in low-income areas. Allfirst has responded that
most of its branches serve LMI neighborhoods and that it
has loaned more than $30 million to finance the construction of multifamily residences and approximately $10 million in equity investments to support affordable housing in
Baltimore. Allfirst also has represented that it has worked
successfully with community groups and nonprofit organizations to provide credit products and services in disadvantaged areas and to revitalize underserved communities in
its assessment area.
A. CRA Performance Examination
As provided in the CRA, the Board evaluates the performance of an institution in light of examinations by the
appropriate federal supervisors of the CRA performance
1. Deposit and state ranking data are as of June 30, 2000.
2. 12 U.S.C. § 2901 etseq.
275
record of the institution. 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 appropriate
federal supervisor.3 Allfirst received a "satisfactory" rating
at its most recent CRA examination by its then primary
federal supervisory agency, the Office of the Comptroller
of the Currency, as of October 1998.4
B. CRA Performance Record
Examiners found that Allfirst was responsive to the credit
needs of its assessment area, including the Baltimore Metropolitan Statistical Area ("Baltimore MSA").5 Examiners
commended Allfirst for its responsiveness to the credit
needs of borrowers of all income levels, including LMI
borrowers. For example, while LMI families accounted for
36 percent of all families in its assessment area, and
lenders in the aggregate made 25 percent of all their
housing-related loans to LMI families in 1997, Allfirst
made 40 percent of its housing-related loans to LMI families during this period.6 Allfirst also had a good record of
lending in LMI census tracts. Allfirst made 16 percent by
number and 13 percent by dollar volume of its housingrelated loans in LMI census tracts in its assessment area in
1997, compared with 14 percent and 9 percent, respectively, by lenders in the aggregate.7 In addition, Allfirst's
lending to small businesses in LMI census tracts exceeded
3. See Interagency Questions and Answers Regarding Community
Reinvestment, 64 Federal Register 23,618 and 23,641 (1999).
4. Allfirst, formerly The First National Bank of Maryland, converted from a national charter to a state charter in December 1998.
5. Allfirst's assessment area consists of all Maryland counties,
except Allegheny and Garrett Counties; Washington, D.C.; and
Arlington, Fairfax, and Loudoun Counties and the cities of Alexandria, Fairfax, and Falls Church in Virginia.
6. In the Baltimore MSA, LMI households accounted for 26 percent
of all households, and Allfirst made 34 percent of all its housingrelated loans in the MSA to LMI households during the CRA examination period, which covered all of 1997 and the first nine months of
1998 ("CRA examination period"). Allfirst also made 53 percent of
its home purchase mortgage loans in the Baltimore MSA to LMI
borrowers in 1997, and it made 62 percent of these loans to LMI
borrowers in the first nine months of 1998.
7. LMI census tracts accounted for 28 percent of all census tracts in
Allfirst's assessment area. Allfirst made 16 percent by number and
13 percent by dollar volume of its housing-related loans in the
Baltimore MSA in LMI census tracts in 1997, compared with 15 percent by number and 8 percent by dollar volume for lenders in the
aggregate. LMI census tracts accounted for 31 percent of all census
tracts in the Baltimore MSA. For the City of Baltimore, the area
addressed by MCCD in its comments, data collected under the Home
Mortgage Disclosure Act (12 U.S.C. § 2801 et seq.) for 1998 and 1999
indicate that Allfirst has maintained a similar record. Allfirst made
55 percent of its housing-related loans to borrowers in LMI census
tracts in 1998 and 55.2 percent in 1999, compared with 57.5 percent
and 60.1 percent by lenders in the aggregate during these periods.
LMI census tracts accounted for 72 percent of all census tracts in the
city and 70 percent of the total population of the city resided in these
areas.
276
Federal Reserve Bulletin • April 2001
the distribution of small business loans in these census
tracts by lenders in the aggregate.8
Allfirst was found by examiners to be an active community development lender. During the CRA examination
period, Allfirst extended 25 community development loans
and lines of credit, totaling $52.5 million, throughout
its assessment area. Seventeen of these loans, totaling
$41.6 million, were made in the Baltimore MSA. Allfirst
also made $8.6 million of qualified community development investments in its assessment area, and made commitments to invest an additional $30 million. These projects
included a commitment made in 1998 to invest $2.7 million, of which $1.5 million was funded during the CRA
examination period, to create an affordable elderly housing
facility in a moderate-income census tract in Baltimore
County, Maryland, and a commitment of $250,000 to a
nonprofit organization to help to purchase and renovate a
shopping center in a low-income area of the City of Baltimore.9 Qualified investments in the Baltimore MSA totaled
$2.6 million, which was a reasonable amount according to
examiners.
Allfirst's distribution of branches and ATMs was considered by examiners to be reasonable and to serve all incomelevel areas of its assessment area. Twenty-six percent of
Allfirst's branches and 29 percent of its nonbranch ATMs
were in LMI census tracts. Branch openings and closings
did not adversely effect accessibility by LMI individuals.
In the City of Baltimore, ten of Allfirst's 14 branches are in
LMI census tracts, and a bank branch operates within one
mile of each of the LMI neighborhoods identified by
MCCD in its comment. Examiners found that all branches
offered a common set of traditional banking products and
services.10 During the CRA examination period, Allfirst
also participated in 24 community development events in
8. In 1997, Allfirst made 21 percent by number and dollar volume of
its loans to small businesses in its assessment area to small businesses
located in LMI census tracts, compared with 17 percent by number
and dollar volume for lenders in the aggregate. Data collected after the
CRA examination period indicate that Allfirst has maintained this
level of performance in Baltimore. In 1998, Allfirst made 77.8 percent
by number of its loans to small businesses in the city to small
businesses located in LMI census tracts, compared with 67.2 percent
for lenders in the aggregate. In 1999, Allfirst made 78.8 percent of
these loans in LMI census tracts, compared with 65.7 percent for
lenders in the aggregate.
9. According to Allfirst, it has made $39.9 million of community
development loans after the CRA examination period, including
$18.4 million to finance the construction of 947 affordable housing
units in LMI areas in Baltimore.
10. Deposit products included a basic checking account that requires
no minimum balance and allows limited check writing for a nominal
fee; a direct deposit checking account that requires no minimum
balance, charges no monthly fee, and allows unlimited check writing;
and a checking account for customers over age 50 that requires a
minimum balance of $100 and charges no monthly fee.
Baltimore and surrounding counties to promote home ownership and small business development.
A fair lending review of Allfirst conducted during the
CRA examination period did not identify any violations of
antidiscrimination laws and regulations. Examiners stated
that the bank had an effective system in place to ensure
compliance with fair lending laws and regulations.
C. Conclusion on CRA Performance
The Board has considered carefully the entire record of
Allfirst's CRA performance, including MCCD's comments, Allfirst's response, Allfirst's most recent CRA performance examination, and supplemental information concerning Allfirst's housing-related lending and small
business lending. Based on all the facts of record, the
Board concludes that CRA considerations are consistent
with approval of the proposal.
Other Considerations
The Board also has concluded that the factors it is required
to consider under section 9 of the Act, including Allfirst's
financial condition, the general character of its management, and the proposed exercise of corporate powers, are
consistent with approval of these notices.11
Conclusion
Based on the foregoing and all the facts of record, the
Board has determined that the notices should be, and
hereby are, approved. The Board's approval is specifically
conditioned on Allfirst's compliance with all commitments
made in connection with the proposal. The commitments
and conditions relied on by the Board 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 Board's approval is subject to the establishment of
the proposed branches within one year of the date of this
Order, unless such period is extended by the Board or the
Federal Reserve Bank of Richmond, acting pursuant to
delegated authority, and to approval of the proposal by the
appropriate state authorities.
By order of the Board of Governors, effective February 5, 2001.
Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley, Meyer, and Gramlich.
ROBERT DEV. FRIERSON
Associate Secretary of the Board
11. 12 U.S.C. § 322
Legal Developments
277
INDEX OF ORDERS ISSUED OR ACTIONS TAKEN BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (
OCTOBER 1, 2000- DECEMBER 31, 2000)
Bulletin
Applicant
Merged or Acquired Bank or Activity
Date of Approval
Volume
and Page
Banco Itau S.A.,
Sao Paolo, Brazil
The Chase Manhattan Corporation,
New York, New York
To establish a representative office in
Miami, Florida
J.P. Morgan & Co. Incorporated,
New York, New York
Morgan Guaranty Trust Company of
New York, New York, New York
To establish a representative office in
New York, New York
Haven Bancorp, Inc.,
Westbury, New York
CFS Bank,
Woodhaven, New York
CFS Investments, Inc.,
Woodhaven, New York
Columbia Preferred Capital
Corporation,
Woodhaven, New York
The Pioneer Group, Inc.,
Boston, Massachusetts
Brenton Banks, Inc.,
Des Moines, Iowa
Brenton Bank,
Des Moines, Iowa
Brenton Savings Bank, FSB,
Ames, Iowa
First Security Corporation,
Salt Lake City, Utah
First Security Bank, National
Association,
West Covina, California
First Security Bank of Nevada,
Las Vegas, Nevada
First Security Bank of New Mexico
National Association,
Albuquerque, New Mexico
October 16, 2000*
86, 851
December 11, 2000
87,76
December 21, 2000
87,90
November 29, 2000
87, 30
October 23, 2000
86, 825
October 23, 2000
86, 828
October 10, 2000
86, 832
Euroclear Bank,
Brussels, Belgium
Queens County Bancorp, Inc.,
Flushing, New York
UniCredito Italiano S.p.A.,
Milan, Italy
Wells Fargo & Company,
San Francisco, California
Wells Fargo & Company,
San Francisco, California
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)
Elfective Date
Colorado Business Bancshares, Inc.,
Denver, Colorado
First Capital Bank of Arizona,
Phoenix, Arizona
February 15, 2001
278
Federal Reserve Bulletin • April 2001
APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT
By Federal Reserve Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to
the Reserve Banks.
Section 3
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
American Bancorporation,
Cedar Falls, Iowa
The Newburg Corporation,
Saint Ansgar, Iowa
Cedar Valley State Bank,
Saint Ansgar, Iowa
American National Bank,
Lincoln, Nebraska
GrandBanc, Inc.,
Rockville, Maryland
First Capital Bank of Arizona,
Phoenix, Arizona
Comanche National Bank,
Comanche, Texas
Chicago
February 16, 2001
Kansas City
January 31, 2001
Richmond
January 29, 2001
Kansas City
January 31, 2001
Dallas
January 4, 2001
CreditAmerica Savings Company,
Brainerd, Minnesota
American National Bank of Minnesota,
Brainerd, Minnesota
Century Bancorp, Inc.,
Thomasville, North Carolina
Home Savings, Inc., SSB,
Thomasville, North Carolina
First Bank & Trust, S.B.,
Paris, Illinois
Community Bank of Lemont,
Lemont, Illinois
Metro Bank,
Kenner, Louisiana
Oslo Bancorporation, Inc.,
Oslo, Minnesota
Valley State Bank of Oslo,
Oslo, Minnesota
The Egyptian State Bank,
Carrier Mills, Illinois
Minneapolis
February 5, 2001
Richmond
February 16, 2001
Chicago
February 16, 2001
Chicago
February 8, 2001
Atlanta
February 13, 2001
Minneapolis
February 6, 2001
St. Louis
February 6, 2001
MountainBank,
Hendersonville, North Carolina
Richmond
February 15, 2001
Park National Corporation,
Newark, Ohio
Security Banc Corporation,
Springfield, Ohio
Republic Bank & Trust Company of
Indiana,
Clarksville, Indiana
Cleveland
February 8, 2001
St. Louis
February 1, 2001
American National Corporation,
Omaha, Nebraska
Century Bancshares, Inc.,
Washington, D.C.
Colorado Business Bankshares, Inc..
Denver, Colorado
Comanche National Corporation,
Commanche, Texas
Comanche National Corporation of
Delaware,
Wilmington, Delaware
CreditAmerica Holding Company,
Brainerd, Minnesota
First Bancorp,
Troy, North Carolina
First BancTrust Corporation,
Paris, Illinois
First Capital Bankshares, Inc.,
Peoria, Illinois
Firstrust Corporation,
New Orleans, Louisiana
Frandsen Financial Corporation,
Forest Lake, Minnesota
Midwest Community Bancshares,
Inc.,
Marion, Illinois
MountainBank Financial
Corporation,
Hendersonville, North Carolina
Palm Beach National Holding
Company
Palm Beach Bank, Florida
Republic Bancorp, Inc.,
Louisville, Kentucky
Legal Developments
279
Section 3—Continued
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
Savings Bancorp, Inc.,
Circleville, Ohio
Security Bancshares, Inc.,
Witt, Illinois
Sierra Bancorp,
Porterville, California
Summit Bank Corporation,
Atlanta, Georgia
Thumb National Bank & Trust
Company Employee Stock
Ownership Plan and Trust,
Pigeon, Michigan
Savings Bank, Circleville, Ohio
Cleveland
January 24, 2001
Security National Bank,
Witt, Illinois
Bank of the Sierra,
Porterville, California
Global Commerce Bank,
Doraville, Georgia
Thumb Bancorp, Inc.,
Pigeon, Michigan
Thump National Bank and Trust
Company,
Pigeon, Michigan
The Community's Bank,
Bridgeport, Connecticut
K.B.J. Enterprises, Inc.,
Omaha, Nebraska
Covington First State Bancshares, Inc.,
Covington, Oklahoma
First State Bank,
Covington, Oklahoma
St. Louis
February 2, 2001
San Francisco
February 2, 2001
Atlanta
February 8, 2001
Chicago
February 1, 2001
New York
February 8, 2001
Kansas City
January 31, 2001
Kansas City
February 1, 2001
Urban Financial Group, Inc.,
Bridgeport, Connecticut
Viking Corporation,
Omaha, Nebraska
Waukomis Bancshares, Inc.,
Yukon, Oklahoma
Section 4
Applicant(s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
Boston Private Financial Holdings,
Inc.,
Boston, Massachusetts
Glacier Bancorp, Inc.,
Kalispell, Montana
E.R. Taylor Investments, Inc.,
Concord, New Hampshire
Boston
February 14, 2001
COAD Limited Partnership #2,
Missoula, Montana
COAD Limited Partnership #3,
Missoula, Montana
Highlands Bankshares Trust Company,
Petersburg, West Virginia
thinkorswim, Inc.,
Melbourne, Australia
Minneapolis
February 16, 2001
Richmond
February 1, 2001
Chicago
February 16, 2001
Chicago
February 8, 2001
Chicago
February 5, 2001
Philadelphia
January 26, 2001
Atlanta
February 8, 2001
New York
February 15, 2001
Highlands Bankshares, Inc.,
Petersburg, West Virginia
National Australia Bank Limited,
Melbourne, Australia
02-e Limited,
Melbourne, Australia
Northern Trust Corporation,
Chicago, Illinois
Northwest Suburban Bancorp, Inc.
Mount Prospect, Illinois
PSB Bancorp, Inc.,
Philadelphia, Pennsylvania
Regions Financial Corporation,
Birmingham, Alabama
Westdeutsche Landesbank
Gironzentrale,
Duesseldorf, Germany
myCFO, Inc.,
Mountain View, California
To engage in the activity of purchasing
loan participations from its subsidiary
banks
Jade Financial Corp.,
Feasterville, Pennsylvania
Morgan Keegan Inc.,
Memphis, Tennessee
Morgan Keegan Trust Company, F.S.B.,
Memphis, Tennessee
Boullioun Aviation Services, Inc.,
Bellevue, Washington
280
Federal Reserve Bulletin • April 2001
Sections 3 and 4
Applicant(s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
Alpha Financial Group, Inc.
Employee Stock Ownership Plan,
Toluca, Illnois
Alpha Financial Group, Inc.,
Minonk, Illinois
Alpha Community Bank,
Toluca, Illinois
Alpha Insurance Services, Inc.,
Washburn, Illinois
Gateway Bank & Trust Co.,
Elizabeth, North Carolina
Tehama Bancorp,
Red Bluff, California
Tehama Bank
Red Bluff, California
Bancorp Financial Services,
Sacramento, California
Chicago
February 8, 2001
Richmond
February 2, 2001
San Francisco
February 1, 2001
Gateway Financial Corporation,
Elizabeth City, North Carolina
Humboldt Bancorp,
Eureka, California
APPLICATIONS APPROVED UNDER BANK MERGER ACT
By Federal Reserve Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to
the Reserve Banks.
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
Security State Bank,
New Hampton, Iowa
SouthTrust Bank,
Birmingham, Alabama
Security State Bank,
Calmar, Iowa
Bayshore National Bank,
La Porte, Texas
Chicago
February 20, 2001
Atlanta
February 2, 2001
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.
Artis v. Greenspan, No. 01-CV-0400(ESG) (D.D.C., complaint
filed February 22, 2001. Employment discrimination action.
Dime Bancorp, Inc. v. Board of Governors 00-4249 (2d Cir.,
filed December 11, 2000). Petition for review of a Board
order dated September 27, 2000, approving the applications
of North Fork Corporation, Inc., Melville, New York, to
acquire control of Dime Bancorp, Inc. and to thereby acquire its wholly owned subsidiary, The Dime Savings Bank
of New York, FSB, both of New York, New York.
Nelson v. Greenspan, No. 99-215(EGS) (D.D.C., amended
complaint filed December 8, 2000). Employment discrimination action.
Howe v. Bank for International Settlements, No. OOCV12485
RCL (D. Mass., filed December 7, 2000). Action seeking
damages in connection with gold market activities and the
repurchase of privately-owned shares of the Bank for International Settlements.
Barnes v. Reno, No. 1:00CV02900 (D.D.C., filed December 4,
2000). Civil rights action.
El Bey v. United States, No. 00-5293 (D.C. Cir., filed
August 31, 2000). Appeal from district court order dismissing pro se action as lacking arguable basis in law. On
January 11, 2001, the court dismissed the appeal.
Trans Union LLC v. Board of Governors, et al., No. 00-CV2087(ESH) (D.D.C., filed August 30, 2000). Action under
Administrative Procedure Act challenging a portion of interagency rule regarding Privacy of Consumer Financial Information.
Sedgwick v. Board of Governors, No. 00-16525 (9th Cir., filed
August 7, 2000). Appeal of district court dismissal of action
under Federal Tort Claims Act alleging violation of bank
supervision requirements.
Individual Reference Services Group, Inc., v. Board of Governors, et al., No. 00-CV-1828 (ESH) (D.D.C., filed July 28,
2000). Action under Administrative Procedure Act challenging a portion of interagency rule regarding Privacy of
Consumer Finance Information.
Legal Developments
Reed Elsevier Inc. v. Board of Governors, No. 00-1289 (D.C.
Cir., filed June 30, 2000). Petition for review of interagency
rule regarding Privacy of Consumer Financial Information.
Bettersworth v. Board of Governors, No. 00-50262 (5th Cir.,
filed April 14, 2000). Appeal of district court's dismissal of
Privacy Act claims.
Albrecht v. Board of Governors, No. 00-CV-317 (CKK)
(D.D.C., filed February 18, 2000). Action challenging the
method of funding of the retirement plan for certain Board
employees.
Guerrero v. United States, No. CV-F-99-6771(OWW) (E.D.
Cal., filed November 29, 1999). Prisoner suit.
Artis v. Greenspan, No. 1:99CV02073 (EGS) (D.D.C., filed
August 3, 1999). Employment discrimination action.
281
Fraternal Order of Police v. Board of Governors, No.
1:98CV03116 (WBB)(D.D.C„ filed December 22, 1998).
Declaratory judgment action challenging Board labor practices. On February 26, 1999, the Board filed a motion to
dismiss the action.
Board of Governors v. Pharaon, No. 98-6101 (2d Cir., filed
May 4, 1998). Appeal and cross-appeal of district court
order granting in part and denying in part the Board's
motion for summary judgment seeking prejudgment interest
and a statutory surcharge in connection with a civil money
penalty assessed by the Board. On February 24, 1999, the
court granted the Board's appeal and denied the crossappeal, and remanded the matter to the district court for
determination of prejudgment interest due to the Board. On
January 29, 2001, the District Court approved a settlement
and terminated the action.
Al
Financial and Business Statistics
A3
GUIDE TO TABULAR
DOMESTIC
FINANCIAL
STATISTICS
Money Stock and Bank Credit
A4
A5
A6
Reserves, money stock, 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
A11 Maturity distribution of loan and security
holding
All
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
A3 2 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
All
Aggregate reserves of depository institutions
and monetary base
A13 Money stock 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
A3 6 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
All Federal debt subject to statutory limitation
DOMESTIC
NONFINANCIAL
STATISTICS
Selected Measures
A42
A42
A43
A44
A46
A47
A48
A49
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
2
Federal Reserve Bulletin • April 2001
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
A62 Foreign exchange rates
A63 GUIDE TO STATISTICAL
SPECIAL
RELEASES
TABLES
A64 INDEX TO STATISTICAL
TABLES
AND
A3
Guide to Tabular Presentation
SYMBOLS AND
c
e
n.a.
n.e.c.
P
r
*
0
ABS
ATS
BIF
CD
CMO
CRA
FAMC
FFB
FHA
FHLBB
FHLMC
FmHA
FNMA
FSA
FSLIC
GENERAL
ABBREVIATIONS
Corrected
Estimated
Not available
Not elsewhere classified
Preliminary
Revised (Notation appears on column heading
when about half of the figures in that column
are changed.)
Amounts insignificant in terms of the last decimal
place shown in the table (for example, less than
500,000 when the smallest unit given is millions)
Calculated to be zero
Cell not applicable
Asset-backed security
Automatic transfer service
Bank insurance fund
Certificate of deposit
Collateralized mortgage obligation
Community Reinvestment Act of 1977
Federal Agricultural Mortgage Corporation
Federal Financing Bank
Federal Housing Administration
Federal Home Loan Bank Board
Federal Home Loan Mortgage Corporation
Farmers Home Administration
Federal National Mortgage Association
Farm Service Agency
Federal Savings and Loan Insurance Corporation
G-7
G-10
GDP
GNMA
HUD
IMF
IOs
IPCs
IRA
MMDA
MSA
NOW
OCDs
OPEC
OTS
PMI
POs
REIT
REMICs
RHS
RP
RTC
SCO
SDR
SIC
VA
Group of Seven
Group of Ten
Gross domestic product
Government National Mortgage Association
Department of Housing and Urban
Development
International Monetary Fund
Interest only, stripped, mortgage-back securities
Individuals, partnerships, and corporations
Individual retirement account
Money market deposit account
Metropolitan statistical area
Negotiable order of withdrawal
Other checkable deposits
Organization of Petroleum Exporting Countries
Office of Thrift Supervision
Private mortgage insurance
Principal only, stripped, mortgage-back securities
Real estate investment trust
Real estate mortgage investment conduits
Rural Housing Service
Repurchase agreement
Resolution Trust Corporation
Securitized credit obligation
Special drawing right
Standard Industrial Classification
Department of Veterans Affairs
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
DomesticNonfinancialStatistics • April 2001
1.10
RESERVES, M O N E Y STOCK, AND DEBT MEASURES
Percent annual rate of change, seasonally adjusted 1
2000
2000
2001
Monetary or credit aggregate
Qi
Resen'es of depository
Total
Required
Nonborrowed
Monetary base
institutions2
1
2
3
4
Concepts
Ml
M2
M3
Debt
debt4
5
6
7
8
of money and
Nontransaction
9 In M 2 5
10 In M 3 only 6
Q2
Q3
Q4
Sept.
Oct.
Nov.
Dec.
Jan.
1.8
.1
2.4
4.5
-9.5
-5.9
-11.1
-3.9
-7.1
-7.4
-8.8
2.7
— 8.0
-9.8
-5.7
2.8
-2.5
-5.3
.6
3.3
-9.7
-10.8
-8.0
3.2
-3.0
-5.3
1.1
.3
-22.9
-27.5
-20.8
7.1
8.2
10.9
12.5
14.0
2.0
5.8
10.6
5.6
-1.8
6.4
9.0
6.1
-3.7
5.8
8.9
4.8
-2.7
6.7
7.1
4.0
-4.3
8.2
9.2
5.1
.7
5.6
4.6
2.8
-7.8
4.3
4.4
4.2
2.3
9.7
12.7
4.7
12.1
12.3
16.6
n.a.
7.0
22.6
8.9
15.3
8.6
16.4
9.4
8.3
11.9
11.4
7.1
2.1
7.9
4.5
11.9
19.7
12.4
26.4
2.5
9.4
20.2
7.8
13.2
17.1
11.8
10.5
11.5
12.0
5.7
2.4
19.4
4.9
-4.1
5.1
3.3
-8.2
10.5
7.0
4.8
16.4
8.6
26.2
13.1
4.6
27.8
-2.9
7.2
14.5
1.6
3.3
.4
3.2
11.2
20.8
.6
10.1
16.1
.0
10.0
14.5
4.2
10.2
22.6
-2.4
9.5
11.7
-8.2
5.6
1.2
2.1
13.8
37.0
17.6
23.0
13.3
18.0
4.2
29.4
12.6
18.7
12.6
28.8
13.3
10.2
9.2
12.9
19.6
24.7
21.4
52.4
20.2
39.8
11.1
15.6
8.2
.6
-3.5
9.1 r
2.3
19.3
-3.3
7.6
-14.5
3.1
-4.8
8.4
-7.5
9.6
-7.2
7.8
-7.9
6.8
-4.8
7.4
-10.0
5.8
-9.2
7.3
components
Time and savings
deposits
Commercial banks
Savings, including M M D A s
Small time 7
Large time 8 ' 9
Thrift institutions
14
Savings, including M M D A s
15
Small time 7
16
Large time 8
11
12
13
Money market mutual
17 Retail
18 Institution-only
funds
Repurchase agreements and
19 Repurchase agreements 1 0
20 Eurodollars 1 0
Debt
components4
21 Federal
22 Nonfederal
eurodollars
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 C a s h " 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:
M l : (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 M l is computed by summing currency, travelers checks, demand deposits, and
OCDs, each seasonally adjusted separately.
M2: M l plus (1) savings (including M M D A s ) , (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. 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 M l .
M3: M 2 plus (1) large-denomination time deposits (in amounts of $100,000 or more), (2)
balances in institutional money funds, (3) R P liabilities (overnight and term) issued by all
12.7
- I.9 r
-11.3
-17.6
-6.7
7.3
n.a.
n.a.
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 M 3 is calculated
by s u m m i n g large time deposits, institutional money f u n d balances, R P liabilities,
and eurodollars, each seasonally adjusted separately, and adding this result to seasonally
adjusted M2.
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. T h e data,
which are derived f r o m the Federal Reserve B o a r d ' 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 M M D A s ) , (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) R P 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
1.11
A5
RESERVES OF DEPOSITORY INSTITUTIONS A N D RESERVE BANK CREDIT 1
Millions of dollars
Average of
daily figures
Average of daily figures for week ending on date indicated
2000
2001
2000
2001
Jan. 24
Jan. 31
577,821
577,550
573,706
516,288
0
5)6,988
0
516,799
0
130
0
27,116
0
130
0
24,228
0
130
0
22,429
0
130
0
18,986
0
25
73
0
0
1,105
36,390
85
36
0
0
752
36,119
4
26
0
0
731
36,415
79
23
0
0
1,172
36,730
12
31
0
0
675
37,072
11,046
2,200
31,593
11,046
2,200
31,643
11,046
2,200
31,745
11,046
2,200
31,793
11,046
2,200
31,841
11,046
2,200
31,888
583,205
0
404
589,803
0
416
593,612
0
450
588,511
0
454
584,339
0
456
580,581
0
445
578,487
0
455
8,105
160
6,697'
222
18,581
5,840
4,340
103
7,237 r
258
18,417
8,578 r
5,312
156
7,428
1,054
17,884
9.812
4,795
108
6,956
179
17,982
4,356
6,529
106
6,632
199
18,265
6,333
7,078
85
6,947
267
18,248
8,985
8,903
110
6,578
277
18,198
5,832
Jan. 24
Jan. 31
Jan. 10
Jan. 17
590,821
578,350
512,158
0
514,112
0
130
0
40,939
0
41
112
0
0
1,182
35,494
11,046
2,343
31,543
584,006
0
452
6,682
104
6,843
305
18,124
6,520
Jan.
Dec. 20
Dec. 27
578,891 r
577,991
578,282
584,314
514,072
0
515,712
0
514,737
0
515,595
0
130
0
19,549
0
130
0
27,923
0
130
0
24,662
0
130
0
25,021
0
130
0
31,759
0
121
157
0
0
962
34,774
96
114
0
0
1,502'
35,054
43
32
0
0
873
36,539
295
121
0
0
2,975
35,002
11,046
3,200
31,286
11,046
2,652
31,528
11,046
2,200
31,800
576,006
0
289
584,582
0
403
5,093
86
6,767
234
17,529
7,589
5,758
115
6,959
355
18,401
7,543 r
Nov.
Dec.
568,061
512,368
0
Jan. 3
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
U.S. government securities 2
2
Bought outright—System account 3
3
Held under repurchase agreements
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements
6
Repurchase agreements—triparty 4
7
Acceptances
Loans to depository institutions
8
Adjustment credit
9
Seasonal credit
10
Special Liquidity Facility credit
11
Extended credit
12
Float
13
Other Federal Reserve assets
14 Gold stock
15 Special drawing rights certificate account
16 Treasury currency outstanding
ABSORBING RESERVE FUNDS
17 Currency in circulation
•,••••
18 Reverse repurchase agreements—triparty
19 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
20
Treasury
21
Foreign
22
Service-related balances and adjustments . .
23
Other
24 Other Federal Reserve liabilities and capital .
25 Reserve balances with Federal Reserve Banks'
Wednesday figures
End-of-month figures
Nov.
Dec.
Jan.
Dec. 20
Dec. 27
Jan. 3
Jan. 10
Jan. 17
575,908
593,092
573,194
579,269
597,301
581,870
579,624
578,853
589,511
573,194
512,327
0
511,703
0
516,018
0
514,539
0
515,491
0
513,278
0
515,478
0
516,778
0
518,441
0
516,018
0
130
0
27,270
0
130
0
43,375
0
130
0
18,920
0
130
0
25,710
0
130
0
43,985
0
130
0
30,475
0
130
0
27,875
0
130
0
22,520
0
130
0
33,000
0
130
0
18,920
0
6
130
0
0
2,096
33,949
33
77
0
0
901
36,873
5
30
0
0
1,536
36,555
5
120
0
0
3,541
35,225
21
96
0
0
1,828
35,750
10
49
0
0
2,158
35,771
7
25
0
0
-209
36,318
1
24
0
0
2,902
36,498
4
24
0
0
924
36,989
5
30
0
0
1,536
36,555
11,046
3,200
31,401
11,046
2,200
31,643
11,046
2,200
31,888
11,046
2,200
31,543
11,046
2,200
31,593
11,046
2,200
31,643
11,046
2,200
31,745
11,046
2,200
31,793
11,046
2,200
31,841
11,046
2,200
31,888
579,782
0
344
593,694
0
450
579,781
0
477
586,969
0
410
593,356
0
450
593,133
0
453
586,085
0
458
583,690
0
445
580,073
0
451
579,781
0
477
4,382
104
6,606
276
18.199
11,861
5,149
216
7,428
1,382
17,962
11,701
5,256
199
6,578
306
17,648
8,082
4,781
227
6,697 r
211
18,140
6,625
5,320
83
7,237 r
235
18,062
17,395 r
3,832
76
7,428
204
17,543
4,090
5,160
122
6,956
174
17,985
7,675
7,979
103
6,632
283
17,936
6,824
7,357
69
6,947
262
17,937
21,502
5,256
199
6,578
306
17,648
8,082
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
U.S. government securities 2
2
Bought outright—System account 3
3
Held under repurchase agreements
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements
6
Repurchase agreements—triparty 4
7
Acceptances
Loans to depository institutions
8
Adjustment credit
9
Seasonal credit
10
Special Liquidity Facility credit
11
Extended credit
12
Float
13
Other Federal Reserve assets
14 Gold stock
15 Special drawing rights certificate account
16 Treasury currency outstanding
ABSORBING RESERVE FUNDS
17 Currency in circulation
18 Reverse repurchase agreements—triparty
...
19 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
20
Treasury
21
Foreign
22
Service-related balances and adjustments . .
23
Other
24 Other Federal Reserve liabilities and capital .
25 Reserve balances with Federal Reserve Banks'
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.
3. Includes compensation that adjusts for the effects of inflation on the principal of
inflation-indexed securities.
4. Cash value of agreements arranged through third-party custodial banks. These agreements are collateralized by U.S. government and federal agency securities.
5. Excludes required clearing balances and adjustments to compensate for float,
A6
DomesticNonfinancialStatistics • April 2001
1.12
RESERVES AND BORROWINGS
Depository Institutions'
Millions of dollars
Prorated monthly averages of biweekly averages
Reserve classification
1 Reserve balances with Reserve Banks 2
2 Total vault cash 3
Applied vault cash 4
3
Surplus vault cash 5
4
Total reserves 6
6
Required reserves
Excess reserve balances at Reserve Banks 7
7
8 Total borrowing at Reserve Banks
Adjustment
9
10
Seasonal
11
Special Liquidity Facility 8
12
Extended credit 9
1998
1999
2000
2001
Dec.
Dec.
Dec.
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
9.026
44.294
36,183
8,111
45,209
43.695
1.514
117
101
15
0
0
5.263
60,619
36,392
24,227
41,655
40,348
1,307
320
179
67
74
0
7.160
45,120
31,381
13,739
38,541
37,215
1.325
210
99
111
0
0
6,582
45,473
33,086
12,387
39.668
38,600
1,068
570
60
510
0
0
6,875
45,319
32.611
12,708
39,486
38,471
1,014
579
25
554
0
0
6,829
44,807
32,429
12,378
39,257
38,155
1,102
477
50
427
0
0
6,782
45,178
32,072
13,106
38,854
37,725
1.129
418
119
299
0
0
7,157
44,546
31,632
12,914
38,789
37,587
1,202
283
124
159
0
0
7,160
45,120
31,381
13,739
38,541
37,215
1,325
210
99
111
0
0
7,195
47,506
32,605
14,902
39,800
38,547
1,252
73
39
34
0
0
2000
Biweekly averages of daily figures for two-week periods ending on dates indicated
2000
1
2
3
4
5
6
7
8
9
10
11
12
Reserve balances with Reserve Banks"
Total vault cash'
Applied vault cash 4
Surplus vault cash 5
Total reserves 6
Required reserves
Excess reserve balances at Reserve Banks 7
Total borrowing at Reserve Banks
Adjustment
Seasonal
Special Liquidity Facility 8
Extended credit 9
Oct. 4
Oct. 18
Nov. 1
Nov. 15
Nov. 29
Dec. 13
Dec. 27
Jan. 10
Jan. 24
Feb. 7
7.131
45,210
33.068
12.142
40,198
38.938
1,260
409
26
383
6,502
45,778
31,601
14,177
38,103
37,073
1.030
480
167
313
6,976
44,523
32,274
12,249
39,250
38,056
1.194
355
97
259
6,709
44,633
31,056
13.577
37,765
36.762
1,003
190
25
165
7,620
44,539
32,261
12,278
39,881
38,474
1,407
380
232
148
7,131
43,452
30,255
13,197
37,386
36,253
1,133
159
37
123
7,208
46.220
32.370
13,850
39,578
38,124
1,454
285
169
117
7,085
46,696
31,579
15,117
38,664
37,165
1,499
110
56
55
7,656
45,558
32,316
13,243
39,972
38,866
1,106
66
42
25
6.431
52,561
34,648
17,913
41,079
39,887
1,191
34
9
25
0
0
0
0
0
0
0
0
0
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 compensate for float and
includes other off-balance-sheet "as-of" adjustments.
3. Vault cash eligible to satisfy reserve requirements. It includes only vault cash held by
those banks and thrift institutions that are not exempt from reserve requirements. Dates refer
to the maintenance periods in which the vault cash can be used to satisfy reserve requirements.
4. All vault cash held during the lagged computation period by "bound" institutions (that
is, those whose required reserves exceed their vault cash) plus the amount of vault cash
applied during the maintenance period by "nonbound" institutions (that is, those whose vault
cash exceeds their required reserves) to satisfy current reserve requirements.
5. Total vault cash (line 2) less applied vault cash (line 3).
6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash
(line 3).
7. Total reserves (line 5) less required reserves (line 6).
8. Borrowing at the discount window under the terms and conditions established for the
Century Date Change Special Liquidity Facility in effect from October 1, 1999, through
April 7. 2000.
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
1.14
A7
FEDERAL RESERVE B A N K INTEREST RATES
Percent per year
C u r r e n t a n d p r e v i o u s levels
A d j u s t m e n t credit 1
Federal R e s e r v e
Bank
On
3/16/01
1/31/01
1/31/01
1/31/01
1/31/01
1/31/01
1/31/01
5.50
5.50
5.50
5.50
5.50
5.50
Chicago
St. L o u i s
Minneapolis .
Kansas City . .
Dallas
San Francisco
1/31/01
2/1/01
1/31/01
2/1/01
1/31/01
1/31/01
5.50
5.50
5.50
5.50
5.50
5.50
On
3/16/01
On
3/16/01
P r e v i o u s rate
..
.
..
..
Boston
N e w York .
Philadelphia
Cleveland .
Richmond .
Atlanta
Extended credit3
S e a s o n a l credit
R a n g e of rates f o r a d j u s t m e n t credit in recent y e a r s
R a n g e (or
level)—All
F.R. B a n k s
In effect D e c . 31, 1977
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
8.5
8.5-9.5
9.5
1979—July 20
A u g . 17
20
Sept. 19
21
8
Oct.
10
10
10-10.5
10.5
10.5-11
11
11-12
12
1978—Jan.
May
July
Aug.
Sept.
Oct.
Nov.
6
6.5
6.5
7
7
7.25
7.25
7.75
8
8.5
8.5
9.5
9.5
10
10.5
10.5
11
11
12
12
15
19
29
30
13
16
28
29
26
17
5
8
12-13
13
12-13
12
11-12
11
10-11
10
11
12
12-13
13
13
13
13
12
11
11
10
10
11
12
13
13
1981—May
5
Nov.
2
6
4
13-14
14
13-14
13
12
14
14
13
13
12
20
23
2
3
16
27
30
11.5-12
11.5
11-11.5
11
10.5
10-10.5
10
1980—Feb.
May
June
July
Sept.
Nov.
Dec.
Dec.
1982—July
Aug.
R a n g e (or
level)—All
F.R. B a n k s
F.R. B a n k
of
N.Y.
1982—Oct.
9.5-10
9.5
9-9.5
9
8.5-9
8.5-9
8.5
9.5
9.5
9
9
9
8.5
8.5
1984—Apr.
9
13
Nov. 21
26
Dec. 24
8.5-9
9
8.5-9
8.5
1985—May 20
24
7.5-8
7.5
7.5
7.5
7
10
Apr. 21
23
J u l y 11
A u g . 21
22
7-7.5
7
6.5-7
6.5
7
7
6.5
6.5
5.5-6
5.5
1987—Sept.
4
11
5.5-6
6
6
6
1988—Aug.
9
11
6-6.5
6.5
6.5
6.5
1989—Feb. 24
27
6.5-7
7
7
7
F.R. B a n k
of
N.Y.
11.5
11.5
11
11
10.5
10
10
12
13
Nov. 2 2
26
D e c . 14
15
17
1 9 9 4 — M a y 17
18
A u g . 16
18
Nov. 15
17
3-3.5
3.5
3.5-t
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
1 9 9 6 — J a n . 31
Feb.
5
5.00-5.25
5.00
5.00
5.00
1998—Oct.
15
16
Nov. 17
19
4.75-5.00
4.75
4.50-4.75
4.50
4.75
4.75
4.50
4.50
6
1999—Aug. 24
26
Nov. 16
18
4.50-4.75
4.75
4.75-5.00
5.00
4.75
4.75
4.75
5.00
5.5
5.5
2000—Feb.
5.00-5.25
5.25
5.25-5.50
5.50
5.50-6.00
6.00
5.25
5.25
5.50
5.50
5.50
6.00
5.75-6.00
5.50-5.75
5.50
5.00-5.50
5.00
5.75
5.50
5.50
5.00
5.00
5.00
5.00
1995—Feb.
1986—Mar.
6
2
4
M a r . 21
23
M a y 16
19
2001—Jan.
1 9 9 0 — D e c . 19
1991—Feb.
Apr.
May
Sept.
Nov.
Dec.
1992—July
6.5
1
4
30
2
13
17
6
7
20
24
6-6.5
6
5.5-6
5.5
5-5.5
5
4.5-5
4.5
3.5-4.5
3.5
2
7
3-3.5
3
1. A v a i l a b l e o n a s h o r t - t e r m b a s i s to h e l p d e p o s i t o r y institutions m e e t t e m p o r a r y n e e d s f o r
f u n d s that c a n n o t b e m e t t h r o u g h r e a s o n a b l e a l t e r n a t i v e sources. T h e h i g h e s t rate e s t a b l i s h e d
f o r loans to d e p o s i t o r y i n s t i t u t i o n s m a y b e c h a r g e d on a d j u s t m e n t credit loans of u n u s u a l size
that result f r o m a m a j o r o p e r a t i n g p r o b l e m at the b o r r o w e r ' s facility.
2. Available to h e l p relatively small d e p o s i t o r y institutions m e e t regular seasonal n e e d s f o r
f u n d s that arise f r o m a c l e a r p a t t e r n of i n t r a y e a r l y m o v e m e n t s in their d e p o s i t s and l o a n s a n d
that c a n n o t b e m e t t h r o u g h special i n d u s t r y lenders. T h e d i s c o u n t rate on seasonal credit t a k e s
into a c c o u n t rates c h a r g e d by m a r k e t s o u r c e s of f u n d s a n d ordinarily is r e e s t a b l i s h e d on the
first b u s i n e s s d a y of e a c h t w o - w e e k r e s e r v e m a i n t e n a n c e period; h o w e v e r , it is n e v e r less than
the d i s c o u n t rate a p p l i c a b l e to a d j u s t m e n t credit.
3. M a y b e m a d e a v a i l a b l e to d e p o s i t o r y institutions w h e n similar a s s i s t a n c e is not
r e a s o n a b l y a v a i l a b l e f r o m o t h e r s o u r c e s , i n c l u d i n g special i n d u s t r y lenders. S u c h credit m a y
be p r o v i d e d w h e n e x c e p t i o n a l c i r c u m s t a n c e s ( i n c l u d i n g s u s t a i n e d d e p o s i t drains, i m p a i r e d
a c c e s s to m o n e y m a r k e t f u n d s , or s u d d e n d e t e r i o r a t i o n in loan r e p a y m e n t p e r f o r m a n c e ) or
practices i n v o l v e only a p a r t i c u l a r institution, or to m e e t the n e e d s of institutions e x p e r i e n c i n g
difficulties a d j u s t i n g t o c h a n g i n g m a r k e t c o n d i t i o n s o v e r a l o n g e r p e r i o d (particularly at t i m e s
o f d e p o s i t d i s i n t e r m e d i a t i o n ) . T h e d i s c o u n t r a t e a p p l i c a b l e to a d j u s t m e n t credit ordinarily is
c h a r g e d on e x t e n d e d - c r e d i t l o a n s o u t s t a n d i n g less than thirty d a y s ; h o w e v e r , at the discretion
R a n g e (or
level)—All
F.R. B a n k s
Feb.
6
6
5.5
5.5
5
5
4.5
4.5
3.5
3.5
3
4
5
31
1
In effect Mar. 16, 2 0 0 1
3
3
of the F e d e r a l R e s e r v e B a n k , this t i m e p e r i o d m a y be s h o r t e n e d . B e y o n d this initial p e r i o d , a
flexible rate s o m e w h a t a b o v e rates c h a r g e d on m a r k e t s o u r c e s of f u n d s is c h a r g e d . T h e rate
ordinarily is r e e s t a b l i s h e d o n the first b u s i n e s s d a y of e a c h t w o - w e e k r e s e r v e m a i n t e n a n c e
period, but it is n e v e r less than the d i s c o u n t rate a p p l i c a b l e to a d j u s t m e n t credit plus 5 0 basis
points.
4. F o r earlier data, s e e the f o l l o w i n g p u b l i c a t i o n s of the B o a r d of G o v e r n o r s : Banking
and
Monetary
Statistics,
1914-1941,
a n d 1941-1970;
a n d the Annual Statistical
Digest,
19701979.
In 1980 and 1981, the F e d e r a l R e s e r v e a p p l i e d a s u r c h a r g e to s h o r t - t e r m a d j u s t m e n t - c r e d i t
b o r r o w i n g s by institutions w i t h d e p o s i t s of $ 5 0 0 m i l l i o n or m o r e that had b o r r o w e d in
s u c c e s s i v e w e e k s or in m o r e than f o u r w e e k s in a c a l e n d a r quarter. A 3 p e r c e n t s u r c h a r g e w a s
in e f f e c t f r o m Mar. 17, 1980, t h r o u g h M a y 7, 1980. A s u r c h a r g e of 2 p e r c e n t w a s r e i m p o s e d
on Nov. 17, 1980; the s u r c h a r g e w a s s u b s e q u e n t l y raised to 3 p e r c e n t on D e c . 5, 1980, a n d to
4 p e r c e n t on M a y 5, 1981. T h e s u r c h a r g e w a s r e d u c e d to 3 p e r c e n t etfective Sept. 22, 1981,
a n d to 2 percent e f f e c t i v e O c t . 12, 1981. As of O c t . 1, 1981, the f o r m u l a f o r a p p l y i n g the
s u r c h a r g e w a s c h a n g e d f r o m a c a l e n d a r q u a r t e r to a m o v i n g t h i r t e e n - w e e k period. T h e
s u r c h a r g e w a s e l i m i n a t e d on N o v . 17, 1981.
A8
DomesticNonfinancialStatistics • April 2001
1.15
RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS 1
Type of deposit
Net transaction accounts*
$0 million-$42.8 million 3 .
More than $42.8 million 4 .
12/28/00
12/28/00
3
Nonpersonal time deposits'
12/27/90
4
Eurocurrency liabilities 6 .. ,
12/27/90
1
2
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, 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
December 28, 2000, for depository institutions that report weekly, and with the period
beginning January 18, 2001, for institutions that report quarterly, the amount was decreased
from $44.3 million to $42.8 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 December 28, 2000, for depository institutions that report
weekly, and with the period beginning January 18, 2001, for institutions that report quarterly,
the exemption was raised from $5.0 million to $5.5 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 1.5 years was reduced from 3 percent to 1.5 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 1.5 years was reduced from 3
percent to zero on Jan. 17, 1991.
The reserve requirement on nonpersonal time deposits with an original maturity of 1.5
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 1.5 years (see note 5).
Policy Instruments
1.17
A9
FEDERAL RESERVE OPEN MARKET TRANSACTIONS 1
Millions of dollars
2000
Type of transaction
and maturity
1999
1998
2000
June
U.S. TREASURY
Matched
transactions
Gross purchases
Gross sales
28
29
Repurchase
agreements
Gross purchases
Gross sales
Aug.
Sept.
531
0
42,797
231
0
37,006
42,797
37,006
3,898
Nov.
Oct.
Dec.
SECURITIES2
Outright transactions (excluding
transactions)
Treasury bills
1
Gross purchases
7
Gross sales
3
Exchanges
4
For new bills
5
Redemptions
Others within one year
Gross purchases
7
Gross sales
Maturity shifts
9
Exchanges
10
Redemptions
O n e to five years
Gross purchases
11
12
Gross sales
13
Maturity shifts
14
Exchanges
Five to ten years
15
Gross purchases
16
Gross sales
17
Maturity shifts
18
Exchanges
More than ten years
19
Gross purchases
Gross sales
70
21
Maturity shifts
22
Exchanges
All maturities
Gross purchases
7.3
24
Gross sales
25
Redemptions
76
27
July
matched
3,550
0
450,835
450,835
2,000
8,676
0
0
477,904
477,904 '
464,218
464,218
0
6,297
11,895
0
46,062
—49,434
0
50,590
-53,315
1,429
2,676
12,901
0
-37,777
37,154
2,294
0
-5,908
7,439
4,884
0
-2,377
4,842
19,731
0
-44,032
42,604
4,303
0
-5,841
7,583
9,428
0
-717
3.139
0
0
1,825
0
24,522
44,008
44,008
4,188
33,718
33,718
8,809
0
62,025
1,875
0
4,672
5,152
-54,656
3,779
-3,109
0
-3,333
367
-7,396
887
4,902
3,438
1,284
2,770
0
0
7,040
779
0
38,142
38,142
2,656
2,507
0
45,182
45,182
1,021
716
0
0
580
0
0
0
0
8,663
-6,608
787
0
7,957
-7,012
734
0
14,482
0
706
0
2,259
0
2,508
0
-52,068
46,177
-4,672
3,109
-5,152
3,333
-3,439
5,418
2,385
0
0
0
-8,663
6,608
5,871
0
0
0
0
0
1,914
0
448
0
-6,801
6,585
0
0
0
0
-3,601
1,254
780
1,332
0
-5.997
509
0
39,428
39,428
1,145
1,420
0
0
0
0
1,045
0
0
5,737
0
0
0
510
0
771
0
0
0
0
-699
1,275
0
0
0
982
0
0
0
0
0
0
0
-1,261
0
0
0
4,929
3,745
5,833
1,151
500
727
547
0
-3,155
1,894
0
0
0
0
0
724
0
0
0
43,670
0
28,301
3,732
5,868
8,450
0
0
0
0
5,269
0
4,325
4,326
0
2,495
0
4,188
3,898
3,443
1,802
1,145
335,321
334,530
344,920
346,428
351,391
351,232
345,680
348,917
0
0
0
29,926
45,357
0
4,676
0
1,429
4,430,457
4,413,430
4,431,685
4,399,257
4,381,188
368,396
369,739
344,935
344,384
514,186
281,599
301,273
0
0
0
0
0
0
0
0
0
0
0
0
0
0
19,835
5,999
33,439
-1,800
1,150
3,999
1,219
-2,457
3,286
-637
0
0
0
0
4,434,358
30 Net change in U.S. Treasury securities
0
512,671
381,349
381,475
0
0
FEDERAL AGENCY OBLIGATIONS
31
37
33
Outright
transactions
Gross purchases
Gross sales
Redemptions
Net change in federal agency obligations
Reverse repurchase
3 7 Gross purchases
38 Gross sales
0
0
0
0
0
0
0
51
0
0
0
0
157
0
10
284,316
276,266
360,069
370,772
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
7,703
-10,859
-51
0
0
0
- 1 0
0
0
0
0
0
0
0
0
0
0
Repurchase
agreements
34 Gross purchases
3 5 Gross sales
36
0
0
0
25
322
0
0
0
0
0
0
agreements
Repurchase
agreements
3 9 Gross purchases
4 0 Gross sales
41 Net change in triparty obligations
42 Total net change in System Open Market Account . . .
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
304,989
890,236
987,501
70,850
70,315
66,485
164,349
75,925
47,265
46,230
66,080
67,285
64,428
62,308
87,125
79,295
95,470
79,365
0
140,640
-97,265
535
-9,440
1,035
-1,205
2,120
7,830
16,105
27,538
135,780
-63,877
-1,265
-8,290
5,034
4
-337
11,116
15,468
1. Sales, redemptions, and negative figures reduce holdings of the System Open Market
Account; all other figures increase such holdings.
0
2. Transactions exclude changes in compensation for the effects of inflation on the principal
of inflation-indexed securities.
A10
1.18
DomesticNonfinancialStatistics • April 2001
FEDERAL RESERVE BANKS
Condition and Federal Reserve Note Statements 1
Millions of dollars
End of m o n t h
Wednesday
Account
Jan. 3
Jan. 1 0
Jan. 1 7
2001
2000
2001
Jan. 2 4
Jan. 3 1
Nov. 3 0
Dec. 31
Jan. 3 1
Consolidated condition statement
ASSETS
1 G o l d certificate account
2 Special d r a w i n g rights certificate a c c o u n t
3
11,046
2,200
935
11,046
2,200
955
11,046
2,200
987
11,046
2,200
1,028
11,046
2,200
1,066
11,046
3,200
901
11,046
2,200
949
11,046
2,200
1,066
58
0
0
32
0
0
25
0
0
28
0
0
35
0
0
136
0
0
110
0
0
35
0
0
30,475
27,875
22,520
33,000
18,920
27,270
43,375
18,920
130
0
130
0
130
0
130
0
130
0
130
0
130
0
130
0
Loans
4 To depository institutions
5 Other
6 A c c e p t a n c e s held under r e p u r c h a s e a g r e e m e n t s
Triparty
Obligations
7 Repurchase agreements—triparty"
Federal agency
obligations3
8 B o u g h t outright
9 H e l d u n d e r repurchase a g r e e m e n t s
3
513,278
515,478
516,778
518,441
516,018
512,327
511,703
516,018
11 B o u g h t outright
1?
Bills
13
Notes
14
Bonds
15 Held under repurchase agreements
513,278
181,876
238,618
92,784
0
515,478
183,365
239,192
92,921
0
516,778
184,010
239,847
92,921
0
518,441
184,510
240,586
93,345
0
516,018
182,949
239,725
93,345
0
512,327
182,615
237,025
92,687
0
511,703
178,741
240,178
92,784
0
516,018
182,949
239,725
93,345
0
1 6 Total l o a n s a n d securities
543,941
543,516
539,453
551,598
535,103
539,863
555,318
535,103
13,884
1,461
8,148
1,462
15,495
1,463
8,815
1,463
10,023
1,467
5,237
1,440
7,105
1,461
10,023
1,467
15,672
18,732
15,680
19,184
15,688
19,401
15,695
19,860
15,495
19,673
15,348
17,083
15,670
19,766
15,495
19,673
607,871
602,190
605,734
611,706
596,072
594,118
613,514
596,072
562,879
0
555,753
0
553,329
0
549,711
0
549,436
0
549,627
0
563,450
0
549,436
0
16,169
20,334
21,990
36,366
21,182
20,621
25,792
21,182
12,058
3,832
76
204
14,878
5,160
122
174
13,624
7,979
103
283
28,678
7,357
69
262
15,420
5,256
199
306
15.858
4,382
104
276
19,045
5,149
216
1,382
15,420
5,256
199
306
11,280
4,091
8,118
4,139
12.479
4,079
7,692
4,023
7,806
3,960
5,672
4,590
6,310
4,170
7,806
3,960
594,419
588,345
591,877
597,792
582,384
580,510
599,723
582,384
6,997
6,188
267
6,999
6,189
658
7,000
6,190
667
7,011
6,298
605
7,014
6,265
409
7,076
2,679
3,853
6,997
6,794
0
7,014
6,265
409
607,871
602,190
605,734
611,706
596,072
594,118
613,514
596,072
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
1 0 Total U.S. Treasury s e c u r i t i e s
4
1 7 I t e m s in p r o c e s s of collection
18 Bank premises
Other
assets
1 9 D e n o m i n a t e d in f o r e i g n c u r r e n c i e s 5
2 0 All o t h e r 6
21
Total assets
LIABILITIES
2 2 Federal R e s e r v e notes
2
2 3 Reverse repurchase agreements—triparty
2 4 Total deposits
25
26
27
28
Depository institutions
U.S. T r e a s u r y — G e n e r a l a c c o u n t
Foreign—Official accounts
Other
7 9 D e f e r r e d credit items
3 0 Other liabilities and accrued d i v i d e n d s
31
Total liabilities
CAPITAL ACCOUNTS
3 ? Capital paid in
3 3 Surplus
34
O t h e r capital a c c o u n t s
35
Total liabilities a n d capital a c c o u n t s
MEMO
3 6 M a r k e t a b l e U.S. Treasury securities held in c u s t o d y for
f o r e i g n and international a c c o u n t s
Federal R e s e r v e note statement
751,176
188,297
562,879
750,186
194,433
555,753
749,177
195,848
553,329
748,172
198,461
549,711
746,920
197,484
549,436
756,527
206,900
549,627
751,714
188,264
746,920
197,484
563,450
549,436
41
4?
43
Collateral held against notes, net
G o l d certificate account
Special d r a w i n g rights certificate a c c o u n t
O t h e r eligible assets
U.S. T r e a s u r y a n d agency securities
11,046
2,200
5,750
543,883
11,046
2,200
0
542,508
11,046
2,200
655
11,046
2,200
0
11,046
2,200
1,122
536,465
535,068
11,046
2,200
0
550,205
11,046
2,200
1,122
539,428
11,046
3,200
0
535,381
535,068
44
Total collateral
562,879
555,753
553,329
549,711
549,436
549,627
563,450
549,436
3 7 Federal R e s e r v e notes outstanding (issued to B a n k s )
38
LESS: H e l d b y Federal R e s e r v e B a n k s
39
40
Federal R e s e r v e notes, net
1. S o m e of the data in this table also a p p e a r in the B o a r d ' s H.4.1 (503) weekly statistical
release. F o r ordering address, see inside f r o n t cover.
2. C a s h value of a g r e e m e n t s a r r a n g e d through third-party custodial banks.
3. F a c e v a l u e of t h e securities.
4. I n c l u d e s securities l o a n e d — f u l l y g u a r a n t e e d by U.S. Treasury securities pledged with
Federal R e s e r v e B a n k s — a n d includes c o m p e n s a t i o n that adjusts f o r the effects of inflation o n
the principal of inflation-indexed securities. E x c l u d e s securities sold and s c h e d u l e d to be
b o u g h t back under m a t c h e d s a l e - p u r c h a s e transactions.
5. Valued m o n t h l y at m a r k e t e x c h a n g e rates.
6. Includes special i n v e s t m e n t a c c o u n t at the Federal R e s e r v e B a n k of C h i c a g o in T r e a s u r y
bills maturing within ninety days.
7. Includes exchange-translation a c c o u n t reflecting the m o n t h l y revaluation at m a r k e t
e x c h a n g e rates of f o r e i g n e x c h a n g e c o m m i t m e n t s .
Federal Reserve Banks
1.19
FEDERAL RESERVE BANKS
All
Maturity Distribution of Loan and Security Holding
Millions of dollars
Wednesday
Type of holding and maturity
2001
2000
Dec. 27
End of month
Jan. 3
2001
2000
Jan. 10
Jan. 17
Jan. 24
Nov. 30
Dec. 31
Jan. 31
1 Total loans
117
58
33
25
28
136
110
35
2 Within fifteen d a y s '
3. Sixteen days to ninety days
4. 91 days to 1 year
110
7
0
28
31
0
13
20
0
25
0
0
0
0
0
86
50
0
96
14
0
30
5
0
515,491
513,278
515,478
516,778
518,441
512,327
511,702
516,018
19,889
110,832
125,620
132,792
55,461
70,896
17.020
113,973
124,691
131,235
55,462
70,897
14,881
116,369
125,924
131,501
55,907
70,897
20,094
112,438
125,287
131,501
56,561
70,897
22,272
111,129
124,918
132,160
56,750
71,212
4,706
119,433
130,868
131,745
54,682
70,893
18,053
108,961
125,539
132,792
55,461
70,896
20,921
112,430
124,617
130,088
56,750
71,212
130
130
130
130
130
130
130
130
0
0
0
30
0
0
0
0
0
130
0
0
0
0
0
130
0
0
0
0
0
130
0
0
0
0
0
130
0
0
0
0
0
30
100
0
0
0
0
130
0
0
0
0
0
130
0
0
5 Total U.S. Treasury securities 2
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
12 Total federal agency obligations
13
14
15
16
17
18
Within fifteen d a y s '
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
DomesticNonfinancialStatistics • April 2001
AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE 1
Billions of dollars, averages of daily figures
2000
Item
1997
Dec.
1998
Dec.
1999
Dec.
June
Total reserves 3
Nonborrowed reserves 4
Nonborrowed reserves plus extended credit 5
Required reserves
Monetary base 6
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
39.86
39.38
39.38
38.76
579.01
39.54
39.12
39.12
38.41
580.55
39.44
39.16
39.16
38.24
580.69
38.69
38.48
38.48
37.36
584.10
38.95
38.88
38.88
37.70
590.93
Seasonally adjusted
ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS2
1
2
3
4
5
2001
2000
Dec.
46.87
46.54
46.54
45.18
479.37
45.19
45.07
45.07
43.68
513.19
41.74
41.42
41.42
40.44
592.03
38.69
38.48
38.48
37.36
584.10
39.96
39.48
39.48
38.89
575.06
40.26
39.69
39.69
39.19
576.75
39.94
39.37
39.37
38.93
577.43
Not seasonally adjusted
6
7
8
9
10
Total reserves 7
Nonborrowed reserves
Nonborrowed reserves plus extended credit 5
Required reserves 8
Monetary base 9
48.01
47.69
47.69
46.33
484.98
45.31
45.19
45.19
43.80
518.27
41.89
41.57
41.57
40.58
600.63
38.58
38.37
38.37
37.26
590.20
39.24
38.76
38.76
38.18
574.55
39.70
39.13
39.13
38.63
577.19
39.52
38.94
38.94
38.50
576.60
39.29
38.82
38.82
38.19
576.79
38.90
38.48
38.48
37.77
578.34
38.83
38.55
38.55
37.63
582.36
38.58
38.37
38.37
37.26
590.20
39.80
39.72
39.72
38.54
591.41
47.92
47.60
47.60
46.24
491.79
1.69
.32
45.21
45.09
45.09
43.70
525.06
1.51
.12
41.66
41.33
41.33
40.35
607.94
1.31
.32
38.54
38.33
38.33
37.22
597.12
1.33
.21
39.22
38.74
38.74
38.15
581.44
1.06
.48
39.67
39.10
39.10
38.60
583.99
1.07
.57
39.49
38.91
38.91
38.47
583.34
1.01
.58
39.26
38.78
38.78
38.16
583.48
1.10
.48
38.85
38.44
38.44
37.73
585.07
1.13
.42
38.79
38.51
38.51
37.59
589.12
1.20
.28
38.54
38.33
38.33
37.22
597.12
1.33
.21
39.80
39.73
39.73
38.55
598.27
1.25
.07
NOT ADIUSTED FOR
CHANGES IN RESERVE REQUIREMENTS10
11
12
13
14
15
16
17
Total r e s e r v e s ' '
Nonborrowed reserves
Nonborrowed reserves plus extended credit 5
Required reserves
Monetary base 1 2
Excess reserves 1 3
Borrowings f r o m the Federal Reserve
1. Latest monthly and biweekly figures are available f r o m the B o a r d ' s H.3 (502) weekly
statistical release. Historical data starting in 1959 and estimates of the effect on required
reserves of changes in reserve requirements are available f r o m the Money and Reserves
Projections Section, Division of Monetary Aff airs, Board of Governors of the Federal Reserve
System, Washington, D C 20551.
2. Figures reflect adjustments for discontinuities, or "breaks," associated with regulatory
changes in reserve requirements. (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 1) less total borrowings of depository institutions f r o m 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. T h e 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 C a s h " 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
C a s h " 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 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
1.21
A13
MONEY STOCK A N D DEBT MEASURES 1
Billions of dollars, averages of daily figures
2000
Item
1997
Dec.
1998
Dec.
1999
Dec.
2001
2000
Dec.
Oct.
Nov.
Dec.
Jan.
1,091.3
4,945.7
7,090.4 r
18,253.9
1,102.3
4,996.5
7,188.4
n.a.
Seasonally adjusted
1
2
3
4
Measures2
Ml
M2
M3
Debt
5
6
7
8
Ml
components
Currency 3
Travelers checks 4
Demand deposits 3
Other checkable deposits 6
1,073.4
4,029.9
5,428.3
15,223.1
1,097.0
4,382.6
6,028.2
16,276.0
1,124.3
4,648.2
6,524.1
17,376.7
1,091.3
4,945.7
7,090.4 r
18,253.9
1,096.3
4.888.2
6,990.5
18,119.8
1,089.2
4,905.9
7,016.0
18,183.2
424.3
8.1
395.4
245.7
459.2
8.2
379.4
250.1
516.7
8.2
355.6
243.7
530.5
8.0
313.7
239.1
526.4
8.4
322.1
239.4
528.0
8.0
315.2
238.0
530.5
8.0
313.7
239.1
534.9
8.1
317.5
241.8
2,956.6
1,398.3
3,285.6
1,645.7
3,523.9
1,875.9
3,854.4
2,144.7
3,791.8
2,102.3
3,816.7
2,110.1
3,854.4
2,144.7
3,894.2
2,191.9
Commercial
banks
11 Savings deposits, including M M D A s
12 Small time deposits 9
13 Large time deposits 1 0 ' "
1,021.1
625.5
517.7
1,185.8
626.4
575.5
1,287.0
635.2
648.8
1,420.6
698.8
720.1
1,389.4
689.8
701.9
1,401.5
693.8
704.7
1,420.6
698.8
720.1
1,436.1
701.5
736.8
Thrift
institutions
14 Savings deposits, including M M D A s
15 Small time deposits 9
16 Large time deposits 1 0
376.8
342.9
85.5
414.1
325.8
88.7
449.3
320.9
91.3
452.7
347.0
103.7
456.7
342.7
102.6
455.8
345.4
103.6
452.7
347.0
103.7
453.5
351.0
106.9
Money market mutual
17 Retail
18 Institution-only
590.2
389.9
733.5
530.0
831.6
622.0
935.3
767.7
913.3
744.2
920.3
752.2
935.3
767.7
952.0
801.2
255.3
150.0
299.6
151.8
343.0
170.8
362.5
190.7 r
363.1
190.5
358.7
191.0
362.5
190.7 r
359.1
187.9
3,800.6
11,422.5
3,751.2
12,524.7
3,660.2
13,716.5
3,400.6
14,853.2
3,446.0
14,673.9
3,419.7
14,763.5
3,400.6
14,853.2
n.a.
n.a.
Nontransaction
9 In M 2 7
10 In M 3 only 8
components
funds
Repurchase agreements and
19 Repurchase agreements 1 2
20 Eurodollars 1 2
eurodollars
Debt
components
21 Federal debt
22 Nonfederal debt
Not seasonally adjusted
23
24
25
26
Measures2
Ml
M2
M3
Debt
27
28
29
30
Ml
components
Currency 3
Travelers checks 4
Demand deposits 5
Other checkable deposits 6
1,096.9
4,051.3
5,453.6
15,218.5
1,120.4
4,404.9
6,060.3
16,271.3
1,147.8
4,672.2
6,561.4
17,372.0
1,115.7
4,974.4 r
7,135.5 r
18,248.6
1,093.7
4,865.7
6,948.5
18.070.7
1,095.3
4,898.1
7,011.6
18,161.9
1,115.7
4,974.4 r
7,135.5 r
18,248.6
1,102.5
5,005.9
7,218.5
n.a.
428.1
8.3
412.4
248.2
463.3
8.4
395.9
252.8
521.5
8.4
371.2
246.6
535.8
8.1
329.1
242.6
525.1
8.4
322.2
238.1
528.6
8.2
320.5
238.1
535.8
8.1
329.1
242.6
532.7
8.2
317.6
244.1
2,954.4
1,402.3
3,284.5
1,655.4
3,524.5
1,889.2
3,858.8
2,161,0 r
3,772.0
2,082.8
3,802.8
2,113.5
3,858.8
2,161.0 r
3,903.3
2,212.7
Commercial
banks
33 Savings deposits, including M M D A s
34 Small time deposits 9
35 Large time deposits 1 0 , "
1,020.4
625.3
517.1
1,186.0
626.5
574.9
1,288.5
635.4
648.2
1,425.3
699.0
719.5
1,380.0
690.8 r
698.9 r
1,397.2
695. l r
705.8
1,425.3
699.0
719.5
1,433.8
702.7
730.5
Thrift
institutions
36 Savings deposits, including M M D A s
37 Small time deposits 9
38 Large time deposits 1 0
376.5
342.8
85.4
414.2
325.8
88.6
449.8
321.0
91.2
454.2
347.1
103.6
453.6
343.2
102.1
454.4
346.1
103.8
454.2
347.1
103.6
452.8
351.7
105.9
Money market mutual
39 Retail
40 Institution-only
589.4
397.0
731.9
541.9
829.7
636.9
933.1
785.6
904.4
734.7
909.9
755.9
933.1
785.6
962.3
828.1
250.5
152.3
295.4
154.5
339.5
173.4
359.4
193.0
358.0
189.1
357.9
190.2
359.4
193.0
358.5
189.6
3,805.8
11,412.7
3,754.9
12,516.3
3,663.1
13,709.0
3,403.7
14,844.9
3,395.5
14,675.3
3,401.3
14,760.7
3.403.7
14,844.9
Nontransaction
31 In M 2 7
32 In M 3 only 8
components
funds
Repurchase agreements and
41 Repurchase agreements'"
42 Eurodollars 1 2
eurodollars
Debt
components
43 Federal debt
44 Nonfederal debt
Footnotes appear on following page.
n.a.
n.a.
A14
DomesticNonfinancialStatistics • April 2001
N O T E S T O T A B L E 1.21
1. Latest monthly and weekly figures are available from the B o a r d ' 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 deht is as follows:
M l : (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 M l is computed by summing currency, travelers checks, demand deposits, and
OCDs, each seasonally adjusted separately.
M2: M l plus (1) savings deposits (including MMDAs), (2) small-denomination time
deposits (time deposits—including retail R P s — i n amounts of less than $100,000), and (3)
balances in retail money market mutual funds. Excludes individual retirement accounts
(IRAs) and Keogh balances at depository institutions and money market funds. Seasonally
adjusted M 2 is calculated by s u m m i n g savings deposits, small-denomination time deposits,
and retail money fund balances, each seasonally adjusted separately, and adding this result to
seasonally adjusted M l .
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, (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 M 3 is calculated by summing large time deposits,
institutional money f u n d balances, R P liabilities, and eurodollars, each seasonally adjusted
separately, and adding this result to seasonally adjusted M2.
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 enter-
prises or federally related mortgage pools) and the nonfederal sectors (state and local
governments, households and nonprofit organizations, nonfinancial corporate and n o n f a r m
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 f u n d s 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 N O W 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 M M D A s ) , (2) small time deposits, and (3) retail
money fund balances.
8. Sum of (1) large time deposits, (2) institutional money fund balances, (3) R P 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 IRAs and Keogh accounts at commercial banks and thrift institutions are
subtracted from small time deposits.
10. Large time deposits are those issued in amounts of $100,000 or more, excluding those
booked at international banking facilities.
11. Large time deposits at commercial banks less those held by money market funds,
depository institutions, the U.S. government, and foreign banks and official institutions.
12. Includes both overnight and term.
Commercial Banking Institutions—Assets and Liabilities
1.26
COMMERCIAL BANKS IN THE UNITED STATES
A15
Assets and Liabilities'
A. All commercial banks
Billions of dollars
Wednesday figures
Monthly averages
2000 r
2000
Account
Jan. r
July
Aug.
Sept.
2001
2001
Oct.
Nov.
Dec.
Jan.
Jan. 10
Jan. 17
Jan. 24
Jan. 31
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 2 . . .
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security 3
Other loans and leases
Interbank loans
Cash assets 4
Other assets 5
16 Total assets 6
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
4,792.6
1,268.6
812.7
455.9
3,523.9
1,010.2
1,491.3
104.3
1,387.0
496.7
143.2
382.5
218.9
293.1
375.6
5,081.0
1,317.4
820.7
496.7
3,763.6
1,073.6
1,615.1
119.2
1.495.9
520.1
151.4
403.4
239.9
271.9
396.4
5,124.9
1,321.7
814.7
507.0
3,803.2
1,081.1
1,626.5
120.4
1,506.1
529.1
157.9
408.5
245.9
271.7
400.3
5,174.2
1,333.1
809.7
523.4
3,841.1
1,080.8
1,638.1
122.1
1,516.0
533.1
178.4
410.6
237.3
269.3
402.7
5,148.5
1,310.3
794.7
515.5
3,838.2
1,080.0
1,635.8
125.4
1,510.4
533.1
176.6
412.7
247.9
267.7
418.0
5,160.7
1,302.8
784.7
518.1
3,857.9
1,081.4
1,647.2
127.0
1,520.2
536.6
178.1
414.7
247.2
255.3
407.5
5,223.5
1,335.2
786.5
548.6
3,888.4
1,090.3
1,653.8
128.5
1,525.4
538.0
186.5
419.8
252.8
267.1
407.4
5,263.2
1,356.3
787.4
569.0
3,906.8
1,105.6
1,652.6
129.5
1,523.0
540.6
184.2
423.9
270.3
274.6
422.1
5,267.3
1,364.9
789.5
575.4
3,902.4
1,100.2
1,652.3
129.2
1,523.1
537.7
187.1
425.1
264.4
273.9
425.1
5,250.4
1,354.0
785.4
568.6
3,896.5
1,104.2
1,648.1
129.3
1,518.7
540.9
178.5
424.8
257.0
285.1
419.8
5,259.2
1,351.1
783.3
567.7
3,908.2
1,112.5
1,652.1
129.6
1,522.5
541.7
179.8
422.1
286.2
264.9
425.1
5,276.4
1,354.2
788.6
565.7
3,922.1
1,111.0
1,658.6
130.1
1,528.5
541.8
187.5
423.3
276.8
276.5
421.9
5,620.9
5,927.9
5,980.7
6,021.1
6,020.1
6,0083
6,0873
6,165.9
6,166.7
6,148.0
6,170.8
6,187.1
3,492.3
645.7
2,846.6
844.5
2,002.1
1,138.2
359.6
778.6
227.2
291.0
3.725.1
611.4
3,113.7
921.4
2,192.3
1,222.3
390.3
832.0
261.9
298.6
3,752.2
616.6
3,135.5
930.9
2,204.6
1,229.3
389.6
839.7
269.7
318.2
3,769.5
608.9
3,160.6
920.3
2,240.3
1,222.5
374.2
848.3
269.2
340.3
3,784.4
612.5
3,171.8
914.8
2,257.1
1,213.6
370.2
843.4
251.9
349.8
3,772.1
597.8
3,174.3
911.8
2,262.5
1,209.9
365.8
844.1
241.5
350.0
3,848.7
597.1
3,251.7
929.2
2,322.5
1,241.4
392.1
849.3
224.3
348.4
3,891.7
607.0
3,284.7
943.2
2,341.5
1,270.7
403.3
867.3
223.0
367.7
3,895.3
584.0
3,311.3
954.1
2,357.2
1,258.2
406.0
852.1
228.9
380.0
3,911.0
612.5
3,298.5
947.5
2,351.0
1,236.4
390.8
845.5
219.2
377.1
3,858.8
611.1
3,247.8
936.3
2,311.5
1,291.5
406.1
885.5
222.8
357.7
3,891.9
631.1
3,260.7
932.4
2,328.4
1,299.9
407.9
892.0
217.9
362.5
5,148.6
5,507.9
5,569.4
5,601.4
5,599.7
5,573.5
5,662.8
5,753.0
5,762.4
5,743.7
5,730.9
5,1122
420.0
411.4
419.7
420.4
434.9
424.5
412.9
404.2
404.3
440.0
414.9
472.3
Not seasonally adjusted
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit 2 . . .
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Credit cards and related plans. .
Other
Security 3
Other loans and leases
Interbank loans
Cash assets 4
Other assets 5
46 Total assets 6
47
48
49
50
51
52
53
54
55
56
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
57 Total liabilities
58 Residual (assets less liabilities) 7
Footnotes appear on p. A21.
....
4,816.8
1,277.2
814.4
462.8
3,539.5
1,007.8
1,495.3
104.5
1,390.8
503.8
n.a.
n.a.
147.3
385.3
219.6
307.1
374.2
5,049.4
1,299.8
812.3
487.6
3,749.6
.1,068.8
1,611.4
119.3
1,492.1
516.6
197.0
319.6
148.5
404.3
235.9
262.5
395.7
5,096.1
1,308.9
805.8
503.2
3,787.1
1,070.8
1,626.5
120.6
1,506.0
528.0
205.1
322.9
152.8
409.0
235.9
259.4
398.5
5,160.8
1,327.7
801.6
526.1
3,833.0
1,076.7
1,638.5
122.8
1,515.7
533.9
209.0
324.9
171.6
412.3
231.1
264.9
401.1
5,162.0
1,314.6
789.6
525.0
3,847.4
1,080.8
1,641.5
125.9
1,515.6
530.8
205.6
325.2
180.4
413.8
241.7
268.7
410.8
5,191.4
1,317.6
787.2
530.4
3,873.8
1,085.5
1,655.1
127.5
1,527.7
535.6
209.3
326.3
180.4
417.1
252.1
263.3
404.5
5,257.0
1,344.9
788.3
556.6
3,912.1
1,092.9
1,659.1
128.9
1,530.1
543.9
218.5
325.4
190.7
425.6
260.2
286.1
407.2
5,287.0
1,365.7
789.0
576.7
3,921.3
1,103.0
1,656.7
129.8
1,526.9
546.8
219.3
327.5
188.6
426.3
271.3
288.3
420.6
5,292.3
1,375.8
791.3
584.5
3,916.5
1,096.3
1,657.6
129.5
1,528.1
544.1
218.1
326.0
191.1
427.5
267.2
274.3
419.8
5,281.2
1,363.8
787.2
576.5
3,917.4
1,101.3
1,655.4
129.7
1,525.6
547.4
219.9
327.5
184.3
429.1
261.5
321.6
417.4
5,270.8
1,357.6
783.6
574.0
3,913.2
1,107.1
1,654.7
129.9
1,524.8
547.7
219.6
328.1
182.4
421.2
279.7
269.4
417.9
5,296.8
1,364.2
792.0
572.2
3,932.6
1,109.3
1,660.0
130.3
1,529.7
547.0
217.8
329.2
193.1
423.4
276.3
276.8
427.4
5,658.8
5,882.5
5,927.7
5,9953
6,021.2
6,048.8
6,146.9
6,203.2
6,190.0
6,217.7
6,173.7
6,213.0
3,506.0
657.2
2,848.8
855.6
1,993.2
1,156.7
363.5
793.3
230.8
292.4
3,700.5
604.9
3,095.6
904.7
2,190.9
1,209.9
387.4
822.5
253.4
296.2
3,719.9
601.0
3,118.9
914.0
2,205.0
1,202.0
385.2
816.8
267.0
317.7
3,753.4
602.6
3,150.8
909.4
2,241.4
1,218.2
373.8
844.4
264.1
339.6
3,777.5
604.5
3,173.0
912.1
2,260.9
1,215.4
369.3
846.2
253.0
348.8
3,801.5
605.5
3,196.1
922.6
2,273.5
1,219.0
369.3
849.7
246.6
351.1
3,889.8
628.1
3,261.7
945.5
2,316.2
1,252.2
397.8
854.4
230.7
350.8
3,903.8
617.4
3,286.4
956.2
2,330.2
1,288.2
406.3
881.9
225.5
369.2
3,915.5
591.7
3,323.8
968.4
2,355.3
1,252.6
402.4
850.3
225.1
381.9
3,945.1
641.9
3,303.2
959.4
2,343.8
1,260.3
396.0
864.3
216.3
377.8
3,835.0
597.3
3,237.7
949.0
2,288.7
1,322.6
412.7
909.9
239.8
358.8
3.885.1
626.8
3,258.3
945.3
2,313.0
1,326.0
412.3
913.6
221.7
364.3
5,185.9
5,460.0
5,506.7
5,5753
5,594.7
5,6183
5,723.4
5,786.6
5,775.1
5,799.6
5,1562
5,797.0
472.9
422.5
421.1
420.0
426.5
430.5
423.4
416.6
414.9
418.0
4)7.5
416.0
A16
1.26
Domestic Financial Statistics • April 2001
COMMERCIAL BANKS IN THE UNITED STATES
Assets and Liabilities 1 —Continued
B. Domestically chartered commercial banks
Billions of dollars
Monthly averages
Account
2000 r
2000
Jan. r
Wednesday figures
July
Aug.
Sept.
2001
Oct.
Nov.
Dec.
2001
Jan.
Jan. 10
Jan. 17
Jan. 24
Jan. 31
Seasonally adjusted
Assets
1 Bank credit
7
Securities in bank credit
U.S. government securities
4
Other securities
Loans and leases in bank credit2
6
Commercial and industrial
7
Real estate
8
Revolving home equity
9
Other
in
Consumer
11
Security 3
17
Other loans and leases
n Interbank loans
14 Cash assets 4
15 Other assets 5
4,243.8
1,065.4
731.6
333.8
3,178.4
815.5
1,474.0
104.3
1,369.7
496.7
76.4
315.8
190.0
241.2
337.5
4,498.7
1,107.3
741.4
365.9
3,391.4
868.5
1,596.5
119.2
1,477.3
520.1
70.0
336.3
216.4
225.9
353.5
4,537.9
1,110.4
734.9
375.4
3,427.5
874.6
1,607.9
120.4
1,487.6
529.1
76.4
339.4
223.6
226.3
356.6
4,579.6
1,123.0
732.0
391.0
3,456.7
876.7
1,619.2
16 Total assets 6
4,953.7
5,233.7
3,113.3
634.9
2,478.3
475.0
2,003.3
960.2
339.8
620.4
191.4
219.1
3,335.0
17
18
19
70
71
77
24
75
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
1,497.1
533.1
84.5
343.1
213.7
223.5
358.7
4,566.7
1,116.5
724.5
392.0
3,450.3
878.3
1,617.6
125.4
1,492.3
533.1
75.0
346.2
220.9
224.3
376.5
4,584.3
1,117.2
718.1
399.1
3,467.1
879.5
1,628.4
127.0
1,501.4
536.6
75.3
347.3
220.5
215.5
367.6
4,624.1
1,132.2
718.6
413.5
3,492.0
885.1
1,635.0
128.5
1,506.6
538.0
80.4
353.4
226.0
225.8
371.6
4,649.1
1,149.9
720.8
429.1
3.499.3
893.3
1,634.0
129.5
1,504.5
540.6
73.9
357.5
241.2
230.2
385.1
4,654.9
1,153.1
721.4
431.7
3,501.8
891.5
1,633.8
129.2
1,504.6
537.7
80.5
358.2
233.1
228.1
388.5
4,645.5
1,150.3
720.3
430.1
3,495.1
892.8
1,629.5
129.3
1,500.2
540.9
73.2
358.7
230.2
240.7
383.8
4,642.9
1,147.1
716.5
430.6
3,495.7
896.1
1,633.4
129.6
1,503.8
541.7
69.2
355.4
255.7
221.1
388.6
4,651.9
1,150.0
723.0
427.0
3,501.9
895.2
1,639.9
130.1
1,509.8
541.8
68.6
356.5
248.1
232.4
383.2
5,282.8
5,313.5
5,326.8
5,325.9
5,384.3
5,441.7
5,441.0
5,436.3
5,444.0
5,451.4
2,734.9
544.9
2,190.0
1,019.3
369.2
650.1
243.7
223.9
3,357.4
605.8
2,751.6
549.5
2,202.2
1,028.9
372.4
656.5
246.4
242.8
3.382.5
599.1
2,783.4
545.8
2,237.7
1,005.5
354.2
651.3
245.0
260.4
3,401.7
602.0
2,799.7
545.3
2,254.4
992.0
350.7
641.3
235.3
269.3
3,391.0
587.2
2,803.8
543.9
2,259.8
984.9
345.8
639.2
235.4
275.3
3,465.1
586.7
2,878.4
559.2
2,319.2
998.7
367.4
631.3
226.3
275.7
3,500.4
596.7
2,903.8
563.2
2,340.6
1,025.4
375.4
649.9
218.3
290.0
3,496.1
573.4
2,922.8
567.7
2,355.1
1,011.7
374.8
636.9
232.0
300.1
3,514.2
602.4
2,911.8
561.5
2,350.2
1,003.0
368.3
634.7
216.9
300.0
3,472.6
600.5
2,872.1
560.4
2,311.7
1,049.1
380.7
668.4
210.9
282.8
3,510.0
621.3
2,888.7
560.4
2,328.3
1,041.0
377.0
664.0
208.8
282.1
4,483.9
4,821.9
4,875.5
4,893.3
4,898.4
4,886.6
4,965.8
5,034.0
5,040.0
5,034.0
5,015.4
5,041.9
469.8
411.9
407.2
420.2
428.5
439.3
418.5
407.7
401.0
402.3
428.6
409.5
600.1
122.1
Not seasonally adjusted
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
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
Credit cards and related plans. .
Other
Security 3
Other loans and leases
Interbank loans
Cash assets 4
Other assets 5
46 Total assets 6
47
48
49
50
51
52
53
54
55
56
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
57 Total liabilities
58 Residual (assets less liabilities) 7
Footnotes appear on p. A21.
....
316.8
190.7
253.1
334.7
4,478.0
1,096.8
734.0
362.8
3,381.2
866.2
1,592.9
119.3
1,473.6
516.6
197.0
319.6
67.3
338.1
212.5
218.3
354.8
4,518.9
1.103.4
727.7
375.8
3,415.5
866.9
1,608.2
120.6
1,487.6
528.0
205.1
322.9
71.1
341.2
213.7
215.5
355.6
4,567.1
1,117.5
726.1
391.5
3,449.5
872.7
1,619.9
122.8
1,497.0
533.9
209.0
324.9
77.8
345.3
207.4
220.0
357.9
4,571.4
1,113.4
719.8
393.6
3,458.1
877.7
1,623.0
125.9
1,497.1
530.8
205.6
325.2
79.4
347.1
214.7
224.5
370.1
4,601.0
1.121.3
719.3
402.1
3,479.6
880.3
1,636.3
127.5
1.508.9
535.6
209.3
326.3
78.4
349.0
225.4
221.0
364.6
4,646.6
1,137.8
719.2
418.6
3,508.8
883.7
1,640.3
128.9
1,511.4
543.9
218.5
325.4
84.2
356.7
233.3
241.3
369.3
4,663.8
1,154.2
721.8
432.4
3,509.6
889.1
1,637.9
129.8
1,508.0
546.8
219.3
327.5
77.7
358.2
242.2
242.0
382.0
4,670.1
1,158.1
722.1
436.0
3,512.0
885.5
1,638.9
129.5
1,509.3
544.1
218.1
326.0
84.7
358.8
235.9
226.0
381.2
4,666.3
1,154.9
721.1
433.8
3,511.4
888.4
1.636.5
129.7
1,506.8
547.4
219.9
327.5
78.0
361.1
234.8
274.8
379.8
4,649.1
1,150.1
717.1
433.0
3,499.0
890.2
1,635.8
129.9
1,506.0
547.7
219.6
328.1
71.8
353.4
249.2
224.0
380.2
4,663.4
1,154.6
726.1
428.5
3,508.8
892.5
1,641.1
130.3
1,510.8
547.0
217.8
329.2
73.0
355.2
247.6
231.9
387.0
4,980.1
5,202.8
5,241.9
5,290.1
5,319.1
5,349.8
5,427.3
5,466.3
5,450.0
5,492.1
5,438.8
5,466.0
3,120.1
646.3
2,473.8
480.6
1,993.2
978.8
343.7
635.1
192.7
218.8
3,319.2
593.7
2,725.5
536.8
2,188.7
1,006.9
366.4
640.5
236.1
223.1
3,337.1
590.2
2,746.9
544.1
2.202.8
1,001.7
368.0
633.7
243.8
242.8
3,372.7
592.3
2,780.5
541.3
2,239.2
1.001.3
353.9
647.4
240.6
3,417.2
594.7
2.822.5
551.2
2.271.3
994.0
349.3
644.8
239.0
275.3
3,497.3
617.2
2,880.1
566.1
2,314.0
1,009.4
373.1
636.4
227.7
276.0
3,504.4
607.0
2,897.4
569.4
2,328.0
1,042.9
378.4
664.5
218.7
289.6
3,508.6
581.0
2,927.6
574.4
2,353.1
1,006.1
371.1
635.0
260.1
3,399.2
593.8
2.805.4
546.8
2.258.7
993.9
349.8
644.1
236.3
268.9
300.4
3,541.5
631.6
2,909.9
568.3
2,341.6
1,027.0
373.5
653.5
212.8
299.1
3,439.6
586.9
2,852.7
566.2
2,286.5
1,080.2
387.3
692.8
224.9
282.0
3,494.4
616.9
2,877.4
566.6
2,310.8
1,067.1
381.5
685.7
212.2
281.6
4,510.4
4,785.3
4,825.4
4,874.7
4,898.2
4,925.5
5,010.4
5,055.6
5,041.3
5,080.3
5,026.7
5,055.4
469.7
417.5
416.5
415.4
420.9
424.2
416.9
410.7
408.7
411.7
412.1
410.7
4,260.1
1,070.0
732.8
337.3
3,190.1
811.5
1,477.9
104.5
1,373.3
503.8
n.a.
n.a.
80.1
226.1
Commercial Banking Institutions—Assets and Liabilities
1.26
COMMERCIAL BANKS IN THE UNITED STATES
A17
Assets and Liabilities 1 —Continued
C. Large domestically chartered commercial banks
Billions of dollars
Wednesday
Monthly averages
Account
2000 r
2000
Jan. r
July
Aug.
Sept.
2001
Oct.
Nov.
Dec.
figures
2001
Jan.
Jan. 10
Jan. 17
Jan. 24
Jan. 31
Seasonally adjusted
Assets
1 Bank credit
Securities in bank credit
?
U.S. government securities
4
Trading account
5
Investment account
6
Other securities
Trading account
7
8
Investment account
9
State and local government .
Other
Loans and leases in bank credit 2 . . .
11
Commercial and industrial
Bankers acceptances
13
Other
14
Real estate
16
Revolving home equity
Other
17
18
Consumer
Security 3
20
Federal f u n d s sold to and
repurchase agreements
with broker-dealers
Other
22
State and local government
Agricultural
23
24
Federal f u n d s sold to and
repurchase agreements
with others
25
All other loans
26
Lease-financing receivables
27 Interbank loans
Federal funds sold to and
28
repurchase agreements with
commercial banks
29
Other
30 Cash assets 4
31 Other assets 5
in
i?.
15
19
21
32 Total assets 6
33
34
35
36
37
38
39
40
41
42
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
43 Total liabilities
44 Residual (assets less liabilities) 7
Footnotes appear on p. A2 J.
90.9
1,941.9
586.6
1.0
585.7
816.9
78.0
739.0
230.8
63.2
2,540.0
578.7
362.2
23.8
338.4
216.5
102.5
113.9
25.9
88.1
1,961.3
589.7
.9
588.8
822.7
78.9
743.8
233.0
69.3
2,562.6
586.7
360.3
23.3
337.0
226.4
114.5
112.0
25.8
86.2
1,975.9
590.0
.9
589.1
823.7
77.8
746.0
234.1
77.5
2,539.0
576.9
354.1
21.2
333.0
222.7
112.7
110.1
26.1
83.9
1,962.1
589.3
.8
588.5
815.8
79.8
735.9
236.2
67.7
2,537.8
572.8
347.6
20.5
327.1
225.2
116.0
109.3
26.3
82.9
1,964.9
587.5
.9
586.7
818.5
81.0
737.5
237.8
68.0
2,556.4
580.8
350.8
29.1
321.7
230.0
122.0
108.0
26.7
81.3
1,975.6
592.4
.9
591.5
817.0
81.9
735.1
237.0
72.6
2,564.1
591.5
352.5
33.3
319.1
239.0
127.6
111.4
27.2
84.2
1,972.6
597.3
.8
596.5
813.4
82.2
731.2
236.2
66.4
2,573.4
594.1
352.0
36.4
315.6
242.1
133.3
108.8
27.3
81.5
1,979.3
596.1
.8
595.3
814.5
82.0
732.5
235.3
72.9
2,561.3
592.4
352.3
29.7
322.6
240.1
130.0
110.1
27.1
83.1
1.968.9
596.9
.9
596.0
810.0
82.1
727.9
236.0
65.6
2,556.4
588.6
349.6
29.8
319.8
239.0
125.8
113.2
27.2
86.0
1,967.8
600.1
.8
599.3
812.3
82.3
730.1
236.2
62.0
2,563.1
591.7
354.9
36.4
318.5
236.9
122.3
114.6
27.2
87.4
1,971.4
598.6
.8
597.8
816.9
82.5
734.4
237.0
61.0
49.9
20.3
12.2
9.3
44.6
18.6
12.4
9.5
50.7
18.6
12.5
9.6
58.2
19.3
12.6
9.4
49.1
18.6
12.6
9.4
50.0
17.9
12.6
9.5
56.1
16.5
12.4
9.7
49.0
17.4
12.6
9.8
55.9
16.9
12.7
9.7
47.7
17.9
12.6
9.8
44.1
17.9
12.6
9.8
43.4
17.5
12.7
9.8
11.9
76.8
118.1
131.5
12.9
84.4
125.0
142.6
14.1
84.3
126.1
141.0
16.2
85.5
126.7
131.5
16.9
85.5
128.6
137.0
19.0
83.0
129.0
140.8
20.9
84.4
129.0
140.4
25.7
83.0
128.2
153.6
27.7
82.4
128.1
147.1
26.4
83.6
128.1
143.5
23.6
83.1
128.1
168.5
24.5
82.6
128.3
159.0
54.9
76.5
149.3
238.2
74.7
67.9
145.1
243.2
66.9
74.1
145.1
246.9
57.2
74.3
142.0
249.5
58.3
78.7
142.5
263.3
61.5
79.3
137.4
259.4
64.1
76.3
144.3
257.2
77.3
76.4
146.3
264.1
71.6
75.6
143.7
263.0
65.8
77.7
154.5
266.2
94.9
73.6
140.8
264.7
80.6
78.4
147.4
263.2
2,8793
3,018.1
3,037.5
3,049.9
3,046.4
3,039.9
3,061.8
3,090.8
3,090.4
3,088.2
3,092.9
3,095.4
1,614.9
317.8
1,297.1
233.4
1,063.7
634.8
188.6
446.2
191.4
160.0
1.649.7
303.7
1,346.0
268.3
1,077.7
679.4
205.3
474.1
221.3
178.0
1,644.8
305.7
1,339.1
266.6
1,072.4
689.9
207.7
482.3
222.7
194.8
1,644.5
301.9
1,342.7
258.6
1,084.0
672.0
192.3
479.7
224.4
209.6
1,647.7
304.1
1,343.6
255.5
1,662.2
294.9
1,367.3
261.4
1,105.9
670.6
212.5
458.2
205.4
221.6
1,670.5
299.6
1,370.9
263.5
1,107.4
682.6
215.6
467.1
201.4
236.0
1,668.1
665.0
196.6
468.3
211.9
216.5
1,631.6
294.0
1,337.6
251.3
1,086.3
662.0
194.0
468.0
211.8
221.1
286.5
1,381.7
267.0
1,114.7
668.4
213.5
454.9
212.4
246.7
1,682.2
305.6
1,376.6
263.4
1,113.2
665.4
211.4
454.1
201.9
245.7
1,651.3
298.1
1,353.2
261.8
1,091.5
700.6
218.0
482.6
195.1
228.1
1,673.1
313.6
1,359.6
259.2
1,100.3
697.6
217.8
479.8
192.3
228.5
2,601.1
2,7283
2,752.2
2,750.5
2,741.0
2,726.5
2,759.9
2,790.6
2,795.5
2,795.2
2,775.1
2,791.6
278.2
289.8
285.3
299.4
305.4
313.4
301.9
300.3
294.8
293.0
317.8
303.8
2,395.4
556.4
361.6
20.5
341.0
194.8
81.5
113.3
24.4
89.0
1,839.0
559.3
1.0
558.3
759.7
66.9
692.8
221.5
70.2
2,522.4
580.5
366.3
24.4
341.9
214.2
97.2
117.0
26.1
1,088.1
A18
1.26
DomesticNonfinancialStatistics • April 2001
COMMERCIAL BANKS IN THE UNITED STATES
Assets and Liabilities 1 —Continued
C. Large domestically chartered commercial banks—Continued
Billions of dollars
Monthly averages
Account
2000 r
2000
Jan. r
Wednesday figures
July
Aug.
Sept.
2001
Oct.
Nov.
Dec.
Jan.
2001
Jan. 10
Jan. 17
Jan. 24
Jan. 31
Not seasonally adjusted
Assets
45 B a n k credit
Securities in bank credit
46
47
U.S. government securities
Trading account
48
49
Investment account
Mortgage-backed securities . .
50
Other
51
52
One year or less
53
One to five years
54
More than five years . . .
Other securities
55
Trading account
56
57
Investment account
State and local government . .
58
59
Other
60
Loans and leases in bank credit 2 . .
61
Commercial and industrial
62
Bankers acceptances
Other
63
64
Real estate
Revolving home equity
65
Other
66
67
Commercial
Consumer
68
Credit cards and related plans. .
69
Other
70
Security 3
71
Federal f u n d s sold to and
72
repurchase agreements
with broker-dealers . . . .
Other
73
74
State and local government . . . .
75
Agricultural
Federal funds sold to and
7b
repurchase agreements
with others
77
All other loans
78
Lease-financing receivables . . . .
79 Interbank loans
80
Federal funds sold to and
repurchase agreements
with commercial banks
Other
81
82 Cash assets 4
83 Other assets 5
84 Total assets
85
86
87
88
89
90
91
92
93
94
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From nonbanks in the U.S
Net due to related foreign offices . . .
Other liabilities
95 Total liabilities
96 Residual (assets less liabilities) 1
Footnotes appear on p. A21.
2,418.2
562.7
364.3
21.2
343.1
218.5
124.6
24.2
59.4
41.0
198.4
81.5
116.9
24.6
92.3
1,855.5
556.3
1.0
555.2
765.9
67.2
426.3
272.4
228.1
n.a.
n.a.
73.9
2,500.9
571.0
359.1
22.6
336.4
212.4
124.0
31.4
55.2
37.5
212.0
97.2
114.7
25.6
89.2
1,929.9
584.2
1.0
583.3
812.3
78.2
451.6
282.4
228.3
73.2
155.2
60.6
2,517.6
572.2
355.6
23.1
332.5
208.0
124.5
32.5
54.1
37.9
216.6
102.5
114.1
25.6
88.5
1,945.5
584.0
.9
583.1
820.2
79.2
456.9
284.1
231.2
74.3
156.9
64.0
2,545.7
582.7
355.2
22.6
332.7
208.4
124.3
33.2
53.7
37.4
227.5
114.5
113.0
25.7
87.3
1,963.0
587.6
.9
586.8
821.3
78.1
459.3
283.9
233.1
75.4
157.7
70.8
2,541.7
576.4
352.0
21.1
330.9
210.4
120.5
32.0
51.6
37.0
224.4
112.7
111.7
26.1
85.6
1,965.3
589.1
.8
588.2
817.7
80.1
453.2
284.4
234.2
76.5
157.7
72.1
2,553.9
578.6
350.6
21.8
328.8
210.8
118.1
32.6
49.9
35.6
228.0
116.0
112.0
26.6
85.4
1,975.4
589.8
.9
588.9
823.7
81.2
456.4
286.2
236.2
78.0
158.2
71.0
2,577.1
586.4
351.9
28.9
323.0
212.7
110.3
31.3
44.9
34.1
234.5
122.0
112.5
26.9
85.6
1,990.8
591.5
.9
590.6
823.0
82.1
454.8
286.1
239.7
82.3
157.5
76.4
2,585.7
597.2
355.3
34.5
320.8
219.0
101.8
31.4
38.4
32.0
241.9
127.6
114.3
27.5
86.8
1,988.5
594.4
.8
593.6
819.9
82.6
453.3
284.0
241.6
83.3
158.4
70.2
2,596.1
600.0
353.9
36.7
317.1
218.0
99.1
29.8
37.2
32.1
246.2
133.3
112.8
27.6
85.2
1,996.1
591.5
.8
590.6
823.2
82.5
456.7
284.0
241.1
83.5
157.5
77.1
2,587.6
597.9
354.6
31.6
323.0
220.6
102.4
31.4
38.8
32.1
243.3
130.0
113.3
27.3
86.0
1,989.7
593.8
.9
592.9
818.8
82.5
452.8
283.5
241.6
83.4
158.2
70.4
2,569.9
592.9
351.9
31.2
320.7
218.7
102.0
32.3
38.0
31.7
241.0
125.8
115.3
27.5
87.8
1,977.0
595.7
.8
594.9
816.9
82.6
450.4
283.8
241.5
82.9
158.7
64.6
2,584.3
599.1
360.8
38.5
322.3
220.1
102.2
32.6
37.8
31.8
238.3
122.3
116.0
27.4
88.6
1,985.2
597.4
.8
596.6
821.0
82.8
453.6
284.6
241.8
82.1
159.7
65.4
54.3
19.7
12.2
9.3
41.9
18.7
12.4
9.7
45.7
18.3
12.7
9.7
51.8
19.0
12.8
9.6
53.8
18.4
12.8
9.6
53.6
17.5
12.7
9.6
59.7
16.7
12.5
9.7
53.4
16.8
12.6
9.8
60.9
16.2
12.6
9.8
52.7
17.7
12.6
9.8
47.3
17.3
12.5
9.7
48.6
16.8
12.6
9.7
11.9
77.7
120.3
132.0
12.9
85.1
124.3
142.7
14.1
84.5
125.1
135.1
16.2
86.4
125.1
127.9
16.9
85.4
127.5
131.1
19.0
85.5
127.7
139.2
20.9
88.4
128.6
141.2
25.7
84.0
130.4
154.7
27.7
82.8
130.4
145.4
26.4
85.9
130.5
146.9
23.6
82.3
130.2
167.8
24.5
82.5
130.3
161.0
56.4
75.6
159.9
237.2
74.0
68.7
138.8
242.6
63.1
72.0
137.1
244.1
55.5
72.5
138.9
249.0
56.5
74.6
142.9
256.9
62.2
77.0
139.7
254.9
65.2
76.0
155.0
255.4
79.1
75.6
156.4
263.9
71.3
74.1
142.8
259.5
69.6
77.3
182.3
265.2
94.7
73.1
145.4
262.5
83.9
77.2
148.8
268.2
A912.5
2,989.9
2,998.3
3,025.7
3,037.3
3,052.0
3,092.1
3,123.7
3,107.1
3,145.0
3,108.6
3,125.1
1,626.3
327.5
1,298.8
239.0
1,059.8
655.0
193.1
461.9
192.7
160.0
1,639.2
299.9
1,339.3
260.2
1,079.1
664.5
200.0
464.5
213.7
178.0
1,629.1
294.6
1,334.5
261.3
1,073.2
659.6
200.4
459.2
220.1
194.8
1,636.8
297.2
1,339.6
254.1
1,085.4
661.9
188.4
473.6
220.0
209.6
1,642.3
298.3
1,344.0
257.0
1,087.0
663.9
193.1
470.8
212.8
216.5
1,644.8
297.7
1,347.1
258.6
1,088.5
669.0
196.5
472.5
215.3
221.1
1,685.2
314.0
1,371.3
268.3
1,103.0
677.2
215.5
461.7
206.8
221.6
1,681.5
308.3
1,373.2
269.7
1,103.5
702.7
219.8
482.9
201.9
236.0
1,682.2
290.2
1,391.9
273.7
1,118.2
671.9
214.0
457.9
206.4
246.7
1,710.0
328.0
1,382.0
270.2
1,111.8
690.3
216.9
473.5
197.8
245.7
1,639.3
292.9
1,346.4
267.5
1,078.8
730.4
224.0
506.3
209.1
228.1
1,672.1
313.9
1,358.2
265.4
1,092.8
724.4
223.4
501.0
195.8
228.5
2,634.0
2,695.4
2,703.6
2,728.3
2,7355
2,7503
2,790.9
2,822.1
2,807.1
2,843.8
2,806.8
2,820.8
278.6
294.6
294.7
297.4
301.9
301.7
301.3
301.6
300.0
301.3
301.7
304.3
Commercial Banking Institutions—Assets and Liabilities
1.26
COMMERCIAL BANKS IN THE UNITED STATES
A19
Assets and Liabilities 1 —Continued
D. Small domestically chartered commercial banks
Billions of dollars
Wednesday figures
Monthly averages
2000 r
2000
Account
Jan. r
July
Aug.
Sept.
2001
2001
Oct.
Nov.
Dec.
Jan.
Jan. 10
Jan. 17
Jan. 24
Jan. 31
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
Security 3
Other loans and leases
Interbank loans
Cash assets 4
Other assets 5
16 Total assets 6
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
1,848.5
509.1
370.0
139.0
1,339.4
256.2
714.3
37.4
677.0
275.2
6.2
87.5
58.5
91.9
99.4
1,976.3
526.8
375.1
151.6
1,449.5
281.9
779.5
41.3
738.3
289.3
6.7
92.0
73.8
80.8
110.4
1,997.9
531.7
372.7
159.0
1,466.2
284.9
785.2
41.5
743.8
296.1
7.1
92.9
82.6
81.2
109.7
2,017.1
536.3
371.7
164.6
1,480.8
286.7
795.4
44.3
751.1
299.0
7.1
92.6
82.2
81.5
109.3
2,027.8
539.6
370.3
169.3
1,488.2
289.0
801.8
45.5
756.3
296.9
7.3
93.1
83.9
81.8
113.3
2,046.6
544.3
370.5
173.9
1,502.2
292.0
809.9
45.9
763.9
298.8
7.4
94.2
79.7
78.1
108.1
2,067.7
551.4
367.8
183.6
1,516.3
292.7
818.0
46.5
771.5
300.9
7.8
96.9
85.6
81.5
114.4
2,085.1
558.4
368.3
190.1
1,526.6
295.9
820.6
47.3
773.3
304.4
7.6
98.2
87.5
84.0
121.0
2,081.5
559.0
369.3
189.6
1,522.5
295.4
819.3
47.2
772.1
302.4
7.7
97.7
85.9
84.4
125.5
2,084.2
557.9
368.0
189.9
1,526.3
295.9
819.5
47.2
772.3
305.0
7.6
98.3
86.8
86.2
117.7
2,086.5
558.5
366.9
191.6
1,527.9
296.0
821.1
47.3
773.7
305.5
7.2
98.2
87.2
80.3
123.9
2,088.8
558.3
368.1
190.1
1,530.5
296.6
823.0
47.6
775.4
304.7
7.6
98.6
89.0
85.0
120.0
2,074.4
2,215.7
2,2453
2,263.6
2,280.5
2,286.0
2322.5
2350.9
2350.7
2348.1
2,351.0
2356.1
1,498.3
317.2
1,181.2
241.6
939.6
325.5
151.2
174.3
0.0
59.1
1,685.3
296.4
1,388.9
276.6
1,112.3
340.0
164.0
176.0
22.4
45.9
1,712.6
300.0
1,412.6
282.8
1,129.7
339.0
164.7
174.2
23.7
48.1
1,738.0
297.2
1,440.8
287.1
1,153.6
333.5
161.9
171.6
20.6
50.8
1,754.0
297.8
1,456.2
289.8
1,166.4
327.1
154.1
173.0
23.4
52.8
1,759-4
293.3
1,466.1
292.6
1,173.5
322.9
151.8
171.1
23.7
54.2
1,802.9
291.8
1,511.1
297.8
1,213.2
328.0
154.9
173.1
20.9
54.1
1,829.9
297.1
1,532.8
299.7
1,233.1
342.7
159.9
182.9
16.8
54.0
1,828.0
286.9
1,541.1
300.7
1,240.4
343.3
161.3
182.0
19.7
53.5
1,832.0
296.8
1,535.2
298.1
1,237.1
337.5
156.9
180.6
15.0
54.3
1,821.3
302.5
1,518.8
298.7
1,220.2
348.5
162.7
185.8
15.7
54.7
1,836.9
307.8
1,529.1
301.2
1,228.0
343.4
159.3
184.2
16.4
53.5
1,882.9
2,093.6
2,1233
2,142.8
2,157.4
2J60.2
2,205.9
2,243.5
2,244.5
2,238.8
2,2403
2,2503
191.6
122.1
122.0
120.8
123.1
125.8
116.6
107.4
106.2
109.3
110.8
105.8
Not seasonally adjusted
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
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
Credit cards and related plans. .
Other
Security 3
Other loans and leases
Interbank loans
Cash assets 4
Other assets 5
46 Total assets 6
47
48
49
50
51
52
53
54
55
56
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
57 Total liabilities
58 Residual (assets less liabilities) 7
Footnotes appear on p. A21.
....
1,842.0
507.3
368.5
138.8
1,334.6
255.3
712.0
37.3
674.7
275.8
n.a.
n.a.
6.2
85.5
58.7
93.3
97.5
1.977.1
525.8
375.0
150.9
1,451.3
282.0
780.6
41.1
739.5
288.3
123.9
164.4
6.7
93.6
69.8
79.4
112.3
2,001.3
531.3
372.1
159.2
1,470.0
282.9
788.0
41.4
746.6
296.8
130.9
165.9
7.1
95.2
78.6
78.4
111.5
2,021.4
534.8
370.8
164.0
1,486.6
285.0
798.6
44.7
753.8
300.7
133.6
167.1
7.1
95.2
79.5
81.1
108.9
2,029.7
537.0
367.8
169.2
1,492.8
288.6
805.3
45.8
759.4
296.6
129.1
167.5
7.3
94.9
83.6
81.6
113.2
2,047.0
542.8
368.7
174.1
1,504.3
290.5
812.6
46.3
766.3
299.4
131.3
168.1
7.4
94.4
86.3
81.3
109.6
2,069.5
551.4
367.3
184.1
1,518.0
292.2
817.3
46.8
770.5
304.2
136.2
168.0
7.8
96.6
92.1
86.3
113.9
2,078.1
557.0
366.5
190.5
1,521.1
294.7
818.0
47.2
770.8
305.1
136.0
169.1
7.6
95.7
87.5
85.6
118.2
2,074.0
558.0
368.2
189.8
1,515.9
294.1
815.6
47.0
768.6
303.0
134.5
168.5
7.7
95.6
90.5
83.2
121.7
2,078.8
557.0
366.5
190.5
1,521.7
294.6
817.7
47.2
770.5
305.9
136.5
169.3
7.6
95.9
87.9
92.5
114.6
2,079.2
557.2
365.2
192.0
1,522.0
294.5
819.0
47.2
771.7
306.2
136.8
169.5
7.2
95.1
81.4
78.6
117.7
2,079.1
555.5
365.3
190.2
1,523.6
295.2
820.1
47.4
772.6
305.1
135.7
169.5
7.6
95.6
86.5
83.1
118.9
2,067.6
2^12.9
2,243.6
2,264.4
2,281.8
2,297.8
2335.1
2342.6
2,342.8
2,347.0
2330.2
2340.9
1,493.8
318.8
1,175.0
241.6
933.4
323.8
150.6
173.2
0.0
58.8
1,680.0
293.8
1,386.2
276.6
1,109.6
342.4
166.4
176.0
22.4
45.1
1,707.9
295.6
1,412.4
282.8
1,129.5
342.1
167.6
174.5
23.7
48.0
1,736.0
295.0
1,440.9
287.1
1,153.8
339.3
165.5
173.8
20.6
50.5
1,756.9
295.5
1,461.4
289.8
1,171.6
330.0
156.7
173.3
23.4
52.4
1,772.4
297.0
1,475.4
292.6
1,182.8
325.1
152.8
172.3
23.7
54.2
1,812.0
303.2
1,508.8
297.8
1,211.0
332.2
157.6
174.7
20.9
54.4
1,822.9
298.7
1,524.2
299.7
1,224.5
340.1
158.6
181.6
16.8
53.6
1,826.4
290.8
1,535.6
300.7
1,234.9
334.3
157.1
177.2
19.7
53.8
1,831.5
303.6
1.528.0
298.1
1,229.9
336.6
156.6
18&0
15.0
53.4
1,800.3
294.0
1,506.3
298.7
1,207.7
349.8
163.3
186.5
15.7
54.0
1,822.3
303.1
1,519.2
301.2
1,218.0
342.8
158.1
184.7
16.4
53.1
1,876.4
2,090.0
2,121.8
2,146.4
2,162.8
2,1753
2,219.5
2,233.5
2,234.2
2,236.6
2,219.9
2,234.6
191.2
122.9
121.8
118.1
119.0
122.5
115.6
109.1
108.7
110.5
110.3
106.3
A20
1.26
DomesticNonfinancialStatistics • April 2001
COMMERCIAL BANKS IN THE UNITED STATES
Assets and Liabilities 1 —Continued
E. Foreign-related institutions
Billions of dollars
Monthly averages
Account
2000 r
2000
Jan.
Wednesday
July
Aug.
Sept.
2001
Oct.
Nov.
Dec.
figures
2001
Jan.
Jan. 10
Jan. 17
Jan. 24
Jan. 31
Seasonally adjusted
1
2
3
4
5
6
7
8
9
10
11
12
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit 2 . . .
Commercial and industrial
Real estate
Security 3
Other loans and leases
Interbank loans
Cash assets 4
Other assets 5
13 Total assets 6
14
15
16
17
18
19
20
21
Liabilities
Deposits
Transaction
Nontransaction
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
22 Total liabilities
23 Residual (assets less liabilities) 7
548.7 r
203.2 r
81.1
122.1r
345.6
194.7
17.3r
66.8
66.8
29.0
51.8
38.0 r
582.3
210.1
79.3
130.8
372.3
205.1
18.7
81.4
67.1
23.5
45.9
42.8
587.0
211.3
79.7
131.5
375.7
206.5
18.6
81.5
69.1
22.2
45.4
43.7
594.5
210.1
77.7
132.5
384.4
204.1
18.9
93.9
67.5
23.6
45.8
44.0
667.2 r
694.2
698.0
379.0 r
10.7r
368.3
177.9
19.8r
158.2r
35.8 r
71.9 r
390.1
11.3
378.8
203.0
21.1
181.9
18.2
74.7
664.7 r
2.5 r
581.7
193.8
70.2
123.5
388.0
201.7
18.2
101.6
66.5
27.0
43.4
41.5
576.3
185.6
66.6
119.0
390.8
201.9
18.8
102.8
67.4
26.7
39.8
39.9
599.4
203.0
67.9
135.1
396.4
205.1
18.8
106.0
66.4
26.8
41.3
35.8
614.0
206.5
66.6
139.8
407.6
212.3
18.6
110.3
66.4
29.1
44.4
37.0
612.4
211.8
68.1
143.7
400.6
208.7
18.5
106.6
66.8
31.3
45.8
36.6
604.9
203.6
65.1
138.5
401.3
211.4
18.6
105.3
66.1
26.7
44.4
36.0
616.4
203.9
66.8
137.2
412.4
216.5
18.7
110.6
66.7
30.5
43.8
36.5
624.5
204.2
65.6
138.6
420.3
215.8
18.7
119.0
66.8
28.7
44.1
38.7
707.6
6933
682.4
703.0
724.1
725.6
711.7
726.9
735.7
394.8
10.9
383.9
200.3
17.2
183.1
23.3
75.4
387.0
9.8
377.2
217.0
20.0
197.0
24.2
79.9
382.7
10.6
372.1
221.6
19.5
202.1
16.6
80.6
381.1
10.6
370.5
225.0
20.0
204.9
6.0
74.7
383.6
10.3
373.3
242.7
24.7
218.0
-2.0
72.7
391.3
10.3
381.0
245.3
27.9
217.4
4.7
77.7
399.2
10.7
388.5
246.5
31.2
215.2
-3.1
79.9
396.8
10.1
386.7
233.4
22.5
210.9
2.3
77.1
386.2
10.5
375.7
242.4
25.3
217.1
12.0
74.9
381.9
9.8
372.0
258.8
30.9
228.0
9.2
80.4
686.0
693.8
708.0
701.4
686.8
697.1
718.9
722.4
709.7
7155
7303
8.2
4.2
-.5
-8.1
-4.4
5.9
5.2
3.2
2.0
11.4
5.4
,
Not seasonally adjusted
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
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 leases
Interbank loans
Cash assets 4
Other assets 5
4 0 Total assets 6
41
42
43
44
45
46
47
48
Liabilities
Deposits
Transaction
Nontransaction
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
49 Total liabilities
50 Residual (assets less liabilities)
7
....
556.6 r
201.2'
81.6
7.9
73.8
125.6r
81. r
44.5 r
349.4
196.2
17.5
67.2
68.5
29.0
54.0
39.5 r
571.4
203.0
78.2
12.0
66.2
124.8
80.6
44.2
368.4
202.6
18.4
81.2
66.2
23.5
44.3
40.9
577.2
205.5
78.1
13.8
64.3
127.4
82.0
45.4
371.7
203.8
18.4
81.7
67.8
22.2
43.9
42.9
593.7
210.2
75.6
14.1
61.4
134.7
90.4
44.2
383.5
204.1
18.7
93.7
67.0
23.6
44.9
43.2
590.5
201.2
69.8
11.8
58.1
131.4
89.3
42.2
389.3
203.1
18.5
101.0
66.7
27.0
44.2
40.7
590.4
196.3
68.0
10.8
57.1
128.3
86.7
41.6
394.2
205.2
18.8
102.0
68.1
26.7
42.3
40.0
610.4
207.1
69.1
11.7
57.4
138.0
89.2
48.8
403.3
209.2
18.7
106.5
68.9
26.8
44.8
37.9
623.2
211.5
67.2
11.1
56.1
144.3
94.5
49.8
411.7
213.9
18.8
110.9
68.2
29.1
46.4
38.5
622.2
217.7
69.2
10.3
58.9
148.5
96.7
51.8
404.5
210.7
18.7
106.4
68.7
31.3
48.3
38.6
614.9
208.9
66.1
10.6
55.5
142.7
93.0
49.7
406.0
212.9
18.8
106.3
68.0
26.7
46.8
37.6
621.7
207.5
66.5
11.3
55.2
141.0
92.7
48.3
414.2
216.9
18.9
110.6
67.7
30.5
45.5
37.7
633.4
209.6
65.9
11.9
53.9
143.7
95.4
48.3
423.8
216.7
18.9
120.0
68.2
28.7
44.9
40.3
678.7 r
679.6
68S.8
705.1
702.1
699.1
719.6
736.9
740.1
725.6
734.9
746.9
385.9
10.9
375.0
177.9
19.8r
158.2r
38. l r
73.6 r
381.3
11.2
370.1
203.0
21.1
181.9
17.3
73.1
382.9
10.8
372.0
200.3
17.2
183.1
23.2
74.9
380.6
10.3
370.3
217.0
20.0
197.0
23.5
79.5
378.2
10.7
367.5
221.6
19.5
202.1
16.7
79.9
384.3
10.8
373.6
225.0
20.0
204.9
7.6
75.9
392.5
10.9
381.6
242.7
24.7
218.0
3.0
74.8
399.4
10.4
389.0
245.3
27.9
217.4
6.8
79.5
406.9
10.7
396.2
246.5
31.2
215.2
-1.0
81.5
403.7
10.4
393.3
233.4
22.5
210.9
3.5
78.7
395.4
10.4
384.9
242.4
25.3
217.1
14.9
76.8
390.8
9.9
380.9
258.8
30.9
228.0
9.4
82.6
675.5 r
674.7
6813
700.6
696.5
692.8
713.0
731.0
733.8
7193
7295
741.6
3.2r
5.0
4.5
4.5
5.6
6.3
6.5
5.9
6.2
6.3
5.4
5.3
Commercial Banking Institutions—Assets and Liabilities
1.26
COMMERCIAL BANKS IN THE UNITED STATES
A21
Assets and Liabilities'—Continued
F. Memo items
Billions of dollars
Monthly averages
Account
2000 r
2000
Jan.
Wednesday
July
Aug.
Sept.
2001
Oct.
Nov.
Dec.
Jan.
figures
2001
Jan. 10
Jan. 17
Jan. 24
Jan. 31
Not seasonally adjusted
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
MEMO
Large domestically chartered banks,
adjusted for mergers
Revaluation gains on off-balance-sheet
items 8
Revaluation losses on off-balancesheet items 8
Mortage-backed securities 9
Pass-through
CMO, REMIC, and other
Net unrealized gains (losses) on
available-for-sale securities 1 0 . . . .
Off-shore credit to U.S. r e s i d e n t s ' ' . . . .
Securitized consumers loans 1 2
Credit cards and related plans
Other
Securitized business loans' 2
Small domestically
chartered
commercial banks, adjusted for
mergers
Mortgage-backed securities 9
Securitized consumer loans' 2
Credit cards and related plans
Other
Foreign-related
institutions
Revaluation gains on off-balancesheet items 8
Revaluation losses on off-balancesheet items 8
Securitized business loans 1 2
,
62.4
63.1
66.5
74.4
70.9
68.0
78.4
80.6
88.4
83.1
77.8
71.9
61.7
253.3
175.7r
11.(I
62.9
242.5
173.3
69.2
67.3
238.0
170.0
68.0
73.9
238.2
170.6
67.6
72.8
239.7
173.5
66.2
72.6
239.8
173.9
66.0
83.1
241.8
177.2
64.6
82.5
247.2
182.4
64.8
91.0
246.4
181.7
64.7
85.1
248.7
184.0
64.7
79.0
246.7
181.9
64.8
73.5
248.2
183.2
65.1
-13.2
23.2
n.a.
n.a.
n.a.
n.a.
-12.4
22.2
87.3
72.4
15.0
17.0
-6.0
22.1
86.6
72.0
14.6
16.2
-4.2
22.1
85.9
71.8
14.1
15.3
-8.4
22.3
80.8
67.2
13.6
15.2
-7.5
23.1
80.5
67.3
13.2
17.8
-5.3
23.4
82.2
68.6
13.6
18.6
-3.0
23.0
82.4
68.5
13.9
18.4
-3.4
23.2
82.6
68.5
14.1
18.5
-3.4
22.9
83.0
69.0
14.0
18.3
-3.1
23.0
82.1
68.2
13.9
18.2
-2.1
23.0
82.3
68.5
13.8
18.6
199.8r
n.a.
n.a.
n.a.
207.2
221.4
212.5
8.9
210.1
221.8
213.0
8.7
211.6
222.4
214.0
8.4
212.4
224.6
215.2
9.4
213.7
225.5
215.9
9.6
214.9
230.9
221.6
9.3
217.7
231.1
222.0
9.1
218.2
231.9
222.8
9.2
216.7
229.9
220.7
9.2
216.5
230.3
221.3
9.0
219.4
231.7
222.8
8.9
42.4 r
41.3
42.9
48.4
47.3
44.7
45.6
51.0
51.8
51.1
50.7
52.2
41.2 r
n.a.
38.2
23.9
40.2
23.7
45.1
23.1
44.7
23.0
41.0
22.8
41.7
23.1
47.5
23.2
48.3
23.3
47.5
23.4
46.3
23.2
49.9
22.9
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 U.S.
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. A 1 7 - 1 9 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 f r o m 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.
12. Total amount outstanding.
A22
1.32
DomesticNonfinancialStatistics • April 2001
COMMERCIAL PAPER A N D BANKERS DOLLAR ACCEPTANCES OUTSTANDING
A. Commercial Paper
Millions of dollars, seasonally adjusted, end of period
Year ending December
2000
Item
1 All issuers
2
3
Financial companies'
Dealer-placed paper, total 2
Directly placed paper, total 3
4 Nonfinancial companies
1996
1997
1998
1999
2000
July
Aug.
Sept.
Oct.
Nov.
Dec.
775,371
966,699
1,163,303
1,403,023
1,615,341
1,551,668
1,559,054
1,557,700
1,587,591
1,624,421
1,615,341
361,147
229,662
513,307
252,536
614,142
322,030
786,643
337,240
973,060
298,848
900,651
309,076
905,634
303,307
899,853
315,039
912,739
328,049
960,701
312,438
973,060
298,848
184,563
200,857
227.132
279,140
343,433
341,941
350,113
342,809
346,803
351,282
343,433
4
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.
B. Bankers Dollar Acceptances 1
Millions of dollars, not seasonally adjusted, year ending September2
Item
1 Total a m o u n t of reporting banks' acceptances in existence
2 A m o u n t of other banks' eligible acceptances held by reporting banks
3 Amount of own eligible acceptances held by reporting banks (included in item 1)
4 Amount of eligible acceptances representing goods stored in, or shipped between, foreign countries
(included in item 1)
1. Includes eligible, dollar-denominated bankers acceptances legally payable in the United
States. Eligible acceptances are those that are eligible for discount by Federal Reserve Banks;
that is, those acceptances that meet the criteria of Paragraph 7 of Section 13 of the Federal
Reserve Act (12 U.S.C. §372).
1.33
PRIME RATE CHARGED B Y BANKS
1997
1998
1999
2000
25,774
14,363
10,094
9,881
736
6,862
523
4,884
461
4,261
462
3,789
10,467
5,413
3,498
3,689
2. Data on bankers dollar acceptances are gathered f r o m approximately 40 institutions;
includes U.S. chartered commerical banks (domestic and foreign offices), U.S. branches and
agencies of foreign banks, and Edge and agreement corporations. The reporting group is
revised every year.
Short-Term Business Loans 1
Percent per year
Average
rate
Date of change
1998—Jan.
1
Sept. 30
Oct. 16
Nov. 18
8.50
8.25
8.00
7.75
1999—July
1
Aug. 25
Nov. 17
8.00
8.25
8.50
2000—Feb.
3
Mar. 22
May 17
8.75
9.00
9.50
2001—Jan.
Feb.
9.00
8.50
4
1
8.35
8.00
1999
2000
9.23
1998—Jan. .
Feb.
Mar.
Apr.
May
June
July .
Aug.
Sept.
Oct. .
Nov.
Dec
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.49
8.12
7.89
7.75
1. T h e prime rate is one of several base rates that banks use to price short-term business
loans. T h e 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
Average
rate
1999—Jan. .
Feb.
Mar.
Apr.
May
June
July .
Aug.
Sept.
Oct. .
Nov.
Dec.
7.75
7.75
7.75
7.75
7.75
7.75
8.00
8.06
8.25
8.25
8.37
8.50
2000—Jan. .
Feb.
Mar.
Apr.
May
June
July .
Aug.
Sept.
Oct. .
Nov.
Dec.
2001—Jan. .
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
1.35
INTEREST RATES
A23
Money and Capital Markets
Percent per year; figures are averages of business day data unless otherwise noted
2000
1998
Item
1999
2001
2000,
week
ending
2000
2001, week ending
Oct.
Nov.
Dec.
Jan.
Dec. 29
Jan. 5
Jan. 12
Jan. 19
Jan. 26
MONEY MARKET INSTRUMENTS
5.35
4.92
4.97
4.62
6.24
5.73
6.51
6.00
6.51
6.00
6.40
6.00
5.98
5.52
6.48
6.00
5.88
5.96
5.91
5.50
6.02
5.50
5.96
5.50
5.40
5.38
5.34
5.09
5.14
5.18
6.27
6.29
6.31
6.48
6.48
6.51
6.49
6.52
6.50
6.51
6.42
6.34
5.74
5.59
5.49
6.45
6.36
6.28
6.12
5.94
5.85
5.73
5.56
5.45
5.74
5.60
5.47
5.60
5.47
5.35
5.42
5.40
5.37
5.11
5.16
5.22
6.28
6.30
6.33
6.48
6.47
6.52
6.49
6.54
6.52
6.52
6.42
6.33
5.75
5.62
5.51
6.45
6.33
6.21
6.12
5.98
5.84
5.76
5.59
5.46
5.78
5.60
5.51
5.59
5.50
5.42
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.
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.
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.
5.39
5.30
5.24
5.30
6.23
6.37
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.
5.49
5.47
5.44
5.19
5.33
5.46
6.35
6.46
6.59
6.55
6.67
6.65
6.56
6.65
6.63
6.62
6.45
6.30
5.83
5.62
5.45
6.55
6.32
6.11
6.19
5.96
5.76
5.85
5.58
5.40
5.83
5.62
5.46
5.68
5.52
5.35
5.45
5.31
6.45
6.66
6.64
6.43
5.62
6.31
5.96
5.57
5.61
5.51
4.78
4.83
4.80
4.64
4.75
4.81
5.82
5.90
5.78
6.11
6.04
5.72
6.17
6.06
5.84
5.77
5.68
5.33
5.15
4.95
4.63
5.66
5.50
5.11
5.36
5.10
4.71
5.13
4.94
4.60
5.17
4.99
4.67
5.11
4.92
4.64
4.81
4.85
4.85
4.66
4.76
4.78
5.66
5.85
5.85
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.
5.05
5.13
5.14
5.15
5.28
5.26
5.72
5.58
5.08
5.43
5.49
5.55
5.79
5.65
6.20
5.87
6.11
6.26
6.22
6.16
6.20
6.03
6.23
5.94
6.01
5.91
5.85
5.78
5.84
5.74
6.04
5.80
6.09
5.88
5.79
5.70
5.78
5.72
5.98
5.78
5.60
5.35
5.26
5.17
5.28
5.24
5.64
5.49
4.81
4.76
4.77
4.86
5.13
5.16
5.65
5.54
5.34
5.12
5.06
4.98
5.16
5.10
5.58
5.44
4.89
4.78
4.77
4.80
5.04
5.01
5.54
5.42
4.79
4.72
4.73
4.81
5.07
5.08
5.61
5.50
4.85
4.80
4.81
4.85
5.14
5.19
5.65
5.54
4.83
4.79
4.81
4.94
5.23
5.29
5.75
5.64
5.69
6.14
6.41
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
4.93
5.14
5.09
5.28
5.70
5.43
5.58
6.19
5.71
5.46
6.22
5.59
5.38
6.17
5.54
5.11
5.85
5.22
4.99
5.76
5.10
5.07
5.79
5.14
5.00
5.74
5.09
4.90
5.70
5.00
4.96
5.74
5.10
5.10
5.85
5.20
6.87
7.45
7.98
7.95
7.90
7.65
7.55
7.59
7.52
7.55
7.55
7.60
40
41 Aa
47 A
43 Baa
6.53
6.80
6.93
7.22
7.05
7.36
7.53
7.88
7.62
7.83
8.11
8.36
7.55
7.81
8.11
8.34
7.45
7.75
8.09
8.28
7.21
7.48
7.88
8.02
7.15
7.38
7.75
7.93
7.15
7.40
7.83
7.97
7.09
7.33
7.72
7.94
7.13
7.36
7.75
7.95
7.14
7.38
7.75
7.90
7.21
7.44
7.80
7.95
MEMO
Dividend-price
ratio17
44 C o m m o n stocks
1.49
1.25
1.15
1.15
1.16
1.19
1.16
1.18
1.16
1.19
1.17
1.15
1
2 Discount window borrowing 2 , 4
paper3'5'6
Commercial
Nonfinancial
3
4
5
3-month
Financial
6
7
8
3-month
Commercial
9
1-month
10
3-month
6-month
11
P
13
14
(historical)3'5'8
acceptances3'5'9
6-month
Certificates
17
18
19
(historical)3,5'7
Finance paper, directly placed
1-month
3-month
6-month
Bankers
15
16
paper
of deposit,
secondary
market310
6-month
20 Eurodollar deposits, 3 - m o n t h 3 ' "
U.S. Treasury bills
Secondary market ' 5
71
23
1-year
Auction high 3 - 5 ' 1 2
74
75
26
1-year
U.S. TREASURY NOTES AND BONDS
maturities13
Constant
77
78
79
30
31
37
33
34
20-year
30-year
Composite
35 More than 10 years (long-term)
STATE AND LOCAL NOTES AND BONDS
series'4
Moody's
36
37 Baa
38 Bond Buyer series 1 5
CORPORATE BONDS
39 Seasoned issues, all industries' 6
Rating
group
NOTE. Some of the data in this table also appear in the Board's H.15 (519) weekly and
G. 13 (415) monthly statistical releases. For ordering address, see inside front cover.
1. The daily effective federal f u n d s rate is a weighted average of rates on trades through
New York brokers.
2. Weekly figures are averages of seven calendar days ending on Wednesday of the
current week; monthly figures include each calendar day in the month.
3. Annualized using a 360-day year or bank interest.
4. Rate for the Federal Reserve Bank of New York.
5. Quoted on a discount basis.
6. Interest rates interpolated f r o m data on certain commercial paper trades settled by the
Depository Trust Company. The trades represent sales of commercial paper by dealers or
direct issuers to investors (that is, the offer side). See Board's Commercial Paper w e b pages
(http://www.federalreserve.gov/releases/cp) for more information.
7. An average of offering rates on commercial paper for firms whose bond rating is A A or
the equivalent. Series ended August 29, 1997.
8. An average of offering rates on paper directly placed by finance companies. Series
ended August 29, 1997.
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 collected around 9:30 a.m. Eastern time. Data are for
indication purposes only.
12. Auction date for daily data; weekly and monthly averages computed on an issue-date
basis. On or after October 28, 1998, data are stop yields f r o m uniform-price auctions. Before
that, they are weighted average yields f r o m multiple-price auctions.
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; M o o d y ' s Investors Service.
15. State and local government general obligation bonds maturing in twenty years are used
in compiling this index. T h e twenty-bond index has a rating roughly equivalent to M o o d y s '
A l rating. Based on Thursday figures.
16. Daily figures f r o m M o o d y ' s Investors Service. Based on yields to maturity on selected
long-term bonds.
17. Standard & P o o r ' s corporate series. C o m m o n stock ratio is based on the 500 stocks in
the price index.
A24
1.36
DomesticNonfinancialStatistics • April 2001
STOCK MARKET
Selected Statistics
2000
Indicator
1998
2001
1999
May
June
July
Aug.
Sept.
Prices and trading volume (averages of daily
Oct.
Nov.
Dec.
Jan.
figures)
Common stock prices
(indexes)
1 N e w York Stock Exchange
(Dec. 31, 1965 = 50)
2
Industrial
3
Transportation
4
Utility
5
Finance
550.65
684.35
468.61
190.52
516.65
619.52
775.29
491.62
284.82
530.97
643.71
809.40
414.73
478.99
552.48
640.07
814.75
411.50
487.17
523.22
649.61
819.54
395.09
501.93
544.51
653.27
825.28
410.67
484.19
556.32
666.14
837.23
419.84
459.91
597.17
667.05
829.99
404.23
463.76
616.89
646.53
797.00
403.20
469.16
587.76
646.64
800.88
434.92
455.66
600.45
645.44
792.66
457.53
444.16
621.62
650.55
796.74
471.21
440.36
634.17
6 Standard & P o o r ' s Corporation
(1941—43 = 10)'
1,085.50
1,327.33
1,427.22
1,418.48
1,461.96
1,473.00
1,485.46
1,468.06
1,390.14
1,375.04
1,330.93
1,335.63
682.69
770.90
922.22
917.76
934.90
930.66
920.54
952.74
913.64
892.60
870.16
898.18
666,534
28,870
799,554
32,629
1,026,867
50,604
893,896
44,146
971,137
42,490
941,694
36,486
875,087
35,695
1,026,597
47,047
1,167,025
57,915
1,015,606
58,541
1,183,149
73,759
1,299,986
72,312
7 American Stock Exchange
(Aug. 31, 1973 = 50) 2
Volume of trading (thousands
8 N e w York Stock Exchange
9 American Stock Exchange
of
shares)
Customer financing (millions of dollars, end-of-period balances)
10 M a r g i n credit at broker-dealers'
Free credit balances
11 Margin accounts 5
12 Cash accounts
at
140,980°
228.530°
198,790°
240,660
247,200
244,970
247,560
250,780
233,376
219,110
198,790
197,110
40,250°
62,450 c
55,130 c
79,070°
100,680°
84,400°
66,170
73,500
64,970
74,140
71,730
74,970
68,020
72,640
70,959
74,766
83,131
73,271
96,730
74,050
100.680
84,400
90.380
80,470
brokers4
Margin requirements (percent of market value and effective date) 6
13 Margin stocks
14 Convertible bonds
15 Short sales
Mar. 11, 1968
June 8, 1968
May 6, 1970
Dec. 6, 1971
Nov. 24, 1972
70
50
70
80
60
80
65
50
65
55
50
55
65
50
65
1. 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), 4 0 public utility (formerly 60), and
4 0 financial.
2. On July 5, 1983, the American Stock Exchange rebased its index, effectively cutting
previous readings in half.
3. Since July 1983, under the revised Regulation T, margin credit at 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.
4. Free credit balances are amounts in accounts with no unfulfilled commitments to
brokers and are subject to withdrawal by customers on demand.
5. Series initiated in June 1984.
Jan. 3, 1974
50
50
50
6. 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 m a x i m u m 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
1.38
A25
FEDERAL FISCAL A N D FINANCING OPERATIONS
Millions of dollars
Calendar year
Fiscal year
Type of account or operation
2000
1998
1999
Aug.
U.S. budget'
1 Receipts, total
2
On-budget
Off-budget
3
4 Outlays, total
5
On-budget
6
Off-budget
7 Surplus or deficit ( - ) , total
On-budget
8
9
Off-budget
Source of financing (total)
10 Borrowing from the public
II Operating cash (decrease, or increase (—))
12 Other 2
MEMO
13 Treasury operating balance (level, end of
period)
14
Federal Reserve B a n k s
Tax and loan accounts
15
Sept.
Oct.
Nov.
Dec.
Jan.
1,721,798
1,305.999
415,799
1,652,224
1,335,948
316,604
69,246
-29,949
99,195
1,827,454
1,382,986
444,468
1,702,942
1,382,262
320.778
124,414
724
123,690
2,025,197
1,544,614
480,583
1,788,953
1,458,188
330,765
236,244
86,426
149,818
138,128
101,429
36,699
148,555
115,539
33,016
-10,427
-14,110
3,683
219,471
176,692
42,779
153,744
114,748
38,901
65,727
61,944
3,878
135,111
101,121
33,990
146,431
115,840
30,592
-11,321
-14,719
3,398
125,666
89,216
36,450
149,356
116,737
32,619
-23,690
-27,521
3.831
200.489
161,737
38,752
167.823
132,747
35,075
32,666
28,990
3,677
219,215
171,001
48,214
142,836
144,448
-1,613
76,379
26,553
49,827
-51,211
4,743
-22,778
-88,674
-17,580
-18,160
-222,672
3,799
-17,327
9,995
20,873
-20,441
-32,334
-39,479
6,086
-29,666
42,653
-1,666
41,325
-1,431
-16,204
-36,689
-9,632
13.655
-23,990
-45,761
-6,628
38,878
4,952
33,926
56,458
6,641
49,817
52,659
8,459
44,199
13,180
5,961
7,218
52,659
8,459
44,199
10,006
5,360
4,646
11,437
4,382
7,055
21,069
5,149
15,920
66,830
5,256
61,574
1. Since 1990, off-budget items have been the social security trust f u n d s (Federal Old-Age,
Survivors, and Disability Insurance) and the U.S. Postal Service.
2. Includes special d r a w i n g 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;
2001
2000
net gain or loss for U.S. currency valuation adjustment; net gain or loss for I M F loanvaluation adjustment; and profit on sale of gold.
SOURCE. M o n t h l y totals: U.S. Department of the Treasury, Monthly Treasury Statement of
Receipts and Outlays of the U.S. Government; fiscal year totals: U.S. Office of M a n a g e m e n t
and Budget, Budget of the U.S. Government when available.
A26
1.39
DomesticNonfinancialStatistics • April 2001
U.S. BUDGET RECEIPTS A N D OUTLAYS 1
Millions of dollars
Fiscal year
C a l e n d a r year
Source or type
1999
1999
2000
2000
2001
2000
HI
H2
HI
H2
Nov.
Dec.
Jan.
RECEIPTS
1 All s o u r c e s
2 Individual i n c o m e taxes, net
Withheld
3
4
Nonwithheld
5
Refunds
C o r p o r a t i o n i n c o m e taxes
6
G r o s s receipts
7
Refunds
8 Social insurance taxes and contributions, net . . .
9
E m p l o y m e n t taxes and c o n t r i b u t i o n s 2
10
U n e m p l o y m e n t insurance
11
Other net receipts 3
12
13
14
15
Excise taxes
C u s t o m s deposits
Estate and gift taxes
M i s c e l l a n e o u s receipts 4
1,827,454
2,025,200
966,045
892,266
1,089,760
952,939
125,666
200,489
219,215
879,480
693,940
308,185
122,706
1,004,500
780.397
358.049
134.046
481.907
351,068
240,278
109,467
425.451
372,012
68,302
14,841
550,208
388,526
281,103
119,477
458,679
395.572
77,732
14,628
60,489
62,855
2,320
4,686
83,485
78,133
6,468
1,116
135,702
84,319
52,713
1,330
216,324
31,645
611,833
580,880
26,480
4,473
235,655
28,367
652.900
620.447
27,641
4,763
106,861
17,092
324,831
306,235
16,378
2,216
110,111
13,996
292,551
280,059
10,173
2,319
119,166
13,781
353,514
333,584
17,562
2,368
123,962
15,776
310,122
297,665
10,097
2,360
4,292
2,245
51,383
48,536
2,431
416
53,192
1,886
53,559
52,932
260
367
7,778
2,066
64,214
62,259
1,596
359
70,414
18,336
27,782
34,929
68,900
19.900
29,000
42,800
31,015
8,440
14,915
15,140
34,262
10,287
14,001
19,569
33,532
9,218
15,073
22,83!
35,501
10,676
13,216
16,556
6,030
1,640
2,141
1,935
5,865
1,461
1,863
2,949
5,307
1,694
2,403
4,183
1,702,942
1,789,000
817,227
882,465
892,947
894,922
149,356
167,823
142,836
274,873
15,243
18,125
912
23,970
23,011
294.500
17,200
18.600
-1,100
25,000
36,600
134,414
6,879
9,319
797
10,351
9,803
149,573
8,530
10,089
-90
12,100
20,887
143,476
7,250
9,601
-893
10,814
11,164
147,651
11,902
10,389
-595
12,907
20,977
24,445
1,326
1,776
74
2,100
3,547
29,176
4,828
1,868
182
2,083
3,618
21,792
1,289
1,383
-378
1.708
3,870
2,649
42,531
11,870
3,200
46,900
10,600
-1,629
17,082
5,368
7,353
23,199
6,806
-2,497
21,054
5,050
4,408
25,841
5,962
-709
4,221
1,133
555
4,035
822
-943
3,323
722
OUTLAYS
16 All t y p e s
17
18
19
20
21
22
National d e f e n s e
International affairs
General science, space, and t e c h n o l o g y
Energy
Natural r e s o u r c e s and e n v i r o n m e n t
Agriculture
23
24
25
26
C o m m e r c e and h o u s i n g credit
Transportation
C o m m u n i t y and regional d e v e l o p m e n t
Education, training, e m p l o y m e n t , and
social services
56,402
59.400
29,003
27,532
31,234
29,263
5,014
6,122
5,660
27 Health
28 Social security and M e d i c a r e
29 I n c o m e security
141,079
580,488
237,707
154.500
606,500
247.900
69,320
261,146
126,552
74,490
295,030
113,504
75,871
306,966
133,915
81,413
307,473
113,212
13,111
51,481
18,950
12,975
54,224
23,882
14,087
50,633
18,473
30
31
32
33
34
43,212
25.924
15,771
229,735
-40,445
47.100
28,000
13,200
223,200
-42.600
20,105
13,149
6,641
116,655
-17,724
23,412
13,459
7,010
112,420
-22,850
23,174
13,981
6,198
115,545
-19,346
22,615
14,635
6,461
104,685
-24,070
3,644
2,741
1,134
18,916
-3,547
5,520
2,495
1,205
17,122
-2,889
2,101
2,602
707
19,575
-3,767
Veterans benefits and services
Administration of j u s t i c e
General g o v e r n m e n t
Net interest 5
U n d i s t r i b u t e d offsetting receipts 6
1. Functional details d o not s u m to total o u t l a y s f o r calendar year data b e c a u s e revisions to
m o n t h l y totals have not been distributed a m o n g functions. Fiscal year total f o r receipts and
outlays do not correspond to calendar y e a r data because revisions f r o m the Budget have not
b e e n fully distributed across months.
2. Old-age, disability, and hospital insurance, and railroad retirement accounts.
3. F e d e r a l e m p l o y e e r e t i r e m e n t c o n t r i b u t i o n s and civil s e r v i c e r e t i r e m e n t a n d
disability fund.
4. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts.
5. Includes interest received by trust f u n d s .
6. R e n t s a n d royalties f o r the outer continental shelf, U.S. g o v e r n m e n t contributions for
e m p l o y e e retirement, and certain asset sales.
SOURCE. Fiscal y e a r totals: U.S. Office of M a n a g e m e n t and Budget, Budget of the U.S.
Government,
Fiscal Year 2001\ m o n t h l y and h a l f - y e a r totals: U.S. D e p a r t m e n t of the Treasury, Monthly Treasury Statement of Receipts and Outlays of the U.S.
Government.
Federal Finance A25
1.40
FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars, end of month
2000
1999
1998
Item
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
1 Federal debt outstanding
5,643
5,681
5,668
5,685
5,805
5,802
5,714
5,702
5,690
2 Public debt securities
3
Held by public
Held by agencies
4
5,614
3,787
1,827
5,652
3,795
1,857
5,639
3,685
1,954
5,656
3,667
1,989
5.776
3,716
2,061
5,773
3,688
2,085
5,686
3,496
2,190
5,674
3,438
2,236
5,662
3,413
2,249
29
29
1
29
28
1
29
28
1
29
28
1
29
28
1
28
28
0
28
28
0
28
28
0
27
27
0
5 Agency securities
Held by public
6
Held by agencies
7
5,530
5,566
5,552
5,568
5,687
5,687
5,601
5,592
5,581
9 Public debt securities
10 Other debt 1
5,530
0
5,566
0
5,552
0
5,568
0
5,687
0
5,686
0
5,601
0
5,591
0
5,580
0
MEMO
11 Statutory debt limit
5,950
5,950
5.950
5,950
5,950
5,950
5,950
5,950
5,950
8 Debt subject to statutory 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 C o l u m bia stadium bonds.
1.41
GROSS PUBLIC DEBT OF U.S. TREASURY
SOURCE. U.S. Department of the Treasury, Monthly
United States and Treasury
Bulletin.
Statement
of the Public
Debt of the
Types and Ownership
Billions of dollars, end of period
2000
T y p e and holder
1 Total gross public debt
2
3
4
5
6
7
8
9
10
11
12
13
14
15
B\ tvpe
Interest-bearing
Marketable
Bills
Notes
Bonds
Inflation-indexed notes and b o n d s '
Nonmarketable"
State and local g o v e r n m e n t series
Foreign issues 3
Government
Public
Savings b o n d s and notes
G o v e r n m e n t account series 4
Non-interest-bearing
By
holder5
16 U.S. Treasury and other federal agencies and trust f u n d s
17 Federal Reserve B a n k s
18 Private investors
19
Depository institutions
Mutual f u n d s
20
21
Insurance companies
State and local treasuries 6
22
Individuals
Savings b o n d s
23
24
Pension f u n d s
25
Private
26
State and Local
Foreign and international 7
27
Other miscellaneous investors 6 , 8
28
1997
1999
2000
Ql
Q2
Q3
Q4
5,502.4
5,614.2
5,776.1
5,662.2
5,773.4
5,685.9
5,674.2
5,662.2
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
5,605.4
3,355.5
691.0
1,960.7
621.2
67.6
2,249.9
165.3
34.3
34.3
.0
180.3
1,840.0
8.8
5,766.1
3,281.0
737.1
1,784.5
643.7
100.7
2,485.1
165.7
31.3
31.3
.0
179.4
2,078.7
10.0
5,618.1
2,966.9
646.9
1,557.3
626.5
121.2
2,651.2
151.0
27.2
27.2
.0
176.9
2,266.1
44.2
5,763.8
3,261.2
753.3
1.732.6
653.0
107.4
2,502.6
161.9
28.8
28.8
.0
178.6
2,103.3
9.6
5,675.9
3,070.7
629.9
1,679.1
637.7
109.0
2,605.2
160.4
27.7
27.7
.0
177.7
2,209.4
10.1
5,622.1
2,992.8
616.2
1,611.3
635.3
115.0
2,629.3
153.3
25.4
25.4
.0
177.7
2,242.9
52.1
5,618.1
2,966.9
646.9
1,557.3
626.5
121.2
2,651.2
151.0
27.2
27.2
.0
176.9
2,266.1
44.2
1,655.7
451.9
3.414.6
300.3
321.5
176.6
239.3
1,826.8
471.7
3,334.0
237.3
343.2
144.5
269.3
2,060.6
477.7
3,233.9
246.3
348.6
125.3
266.8
2,085.4
501.7
3,182.8
235.1
338.9
124.0
257.2
2,190.2
505.0
2,987.4
219.7
318.6
120.9
256.4
2,235.7
511.4
2,936.2
n.a.
n.a.
n.a.
n.a.
186.5
359.4
142.5
216.9
1,241.6
589.5
186.7
374.4
157.8
216.6
1,278.7
498.8
186.5
384.5
171.3
213.2
1,268.8
407.1
185.3
385.9
174.8
211.1
1,273.9
382.5
184.6
384.5
175.5
209.0
1,248.9
253.8
184.7
n.a.
n.a.
n.a.
1,225.2
n.a.
1. The U S . Treasury first issued inflation-indexed securities 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 d e n o m i n a t e d 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 B a n k s and U.S. g o v e r n m e n t agencies and trust f u n d s are actual
holdings; data for other groups are Treasury estimates.
6. In March 1996, in a redefinition of series, fully defeased debt backed by nonmarketable
federal securities was r e m o v e d f r o m "Other miscellaneous investors" and added to "State and
local treasuries." The data s h o w n here have been revised accordingly.
1998
n.a.
n.a.
7. Includes nonmarketable foreign series treasury securities and treasury deposit funds.
Excludes treasury securities held under repurchase agreements in custody accounts at the
Federal Reserve Bank of N e w York.
8. Includes individuals, government-sponsored enterprises, brokers and dealers, bank
personal trusts and estates, corporate and noncorporate businesses, and other investors.
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
DomesticNonfinancialStatistics • April 2001
Transactions 1
U.S. GOVERNMENT SECURITIES DEALERS
Millions of dollars, daily averages
2000
2000, week ending
2001, week ending
Item
Nov.
Oct.
1
2
3
4
5
6
7
8
9
OUTRIGHT TRANSACTIONS2
By type of securityUS. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Inflation-indexed
Federal agency
Discount notes
C o u p o n securities, by maturity
O n e year or less
More than one year, but less than
or equal to five years
M o r e than five years
Mortgage-backed
By type of
counterparty
With interdealer broker
U.S. Treasury
Federal agency
Mortgage-backed
With other
13
U.S. Treasury
14
Federal agency
15
Mortgage-backed
10
11
12
Dec.
Dec. 6
Dec. 13
Dec. 2 0
Dec. 27
Jan. 3
Jan. 10
Jan. 17
Jan. 24
Jan. 31
26,999
33,213
33,972
44,451
28,399
30,087
29,272
46,063
31,026
31,192
25,294
28,501
139,243
67,524
1,987
116,403
62,146
1,033
142,810
80,454
1,441
200,827
95,819
1,420
140,926
90,414
1.563
136,050
89.936
1,527
97,687
45,923
907
138,635
70,178
2,034
233,089
108,729
5,306
167,473
88,749
2,310
184,622
83,347
2,387
169,233
97,040
51,052
52,139
54,545
56,732
48,781
52,063
58,338
63,200
53,350
66,652
61,610
67,509
1,411
1,082
1,094
1,821
1,980
1,415
1,962
2,292
1,225
1,246
2,800
793
1,324
12,597
11,659
80,367
9,936
7,450
80,031
10,987
12,455
77.576
17,403
14,019
90,154
11,269
17,255
123,014
9,880
13,377
68,876
6,012
6,324
30,729
10,168
7,280
54,267
21,825
17,020
144,559
13,689
10,642
114,402
13,104
13,583
104,151
13,901
12,505
60,919
102,544
10,680
26,882
92,335
8,654
23,812
117,395
11,965
26,775
152,034
13,370
29,402
114,749
13,645
37,557
123,851
13,157
26,804
77,852
7,330
13,004
117,676
11,240
22,031
178,968
18,578
44,970
139,148
11,889
30,924
135,431
12,816
30,977
137,738
12,066
21,504
133,209
65,710
53,485
120,459
61,966
56,219
141,282
67,843
50,801
190,483
76.763
60,752
146,553
65,076
85,457
133,748
64,125
42,072
95,936
65,636
17,725
139,234
70,633
32,236
199,182
74,862
99,589
150,575
81,895
83,479
160,220
76,273
73,174
158,446
83,173
39,415
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
FUTURES TRANSACTIONS3
By type of deliverable
security
16 U.S. Treasury bills
C o u p o n securities, by maturity
17
Five years or less
18
M o r e than five years
19 Inflation-indexed
Federal agency
20 Discount notes
C o u p o n securities, by maturity
21
O n e year or less
22
M o r e than one year, but less than
or equal to five years
23
M o r e than five years
24 Mortgage-backed
0
0
2,497
10,472
0
3,309
13,051
0
3,629
14,020
0
5,012
17.887
0
4,666
14,870
0
3,474
15,733
0
1,641
8,092
0
2,637
11,731
0
4,007
17,813
0
3,831
15,512
0
4,256
15,182
0
3,666
14,893
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
86
0
0
72
0
0
325
0
0
464
0
0
304
0
0
235
0
0
0
0
118
0
0
55
0
n.a.
n.a.
0
0
0
0
20
0
0
58
0
n.a.
OPTIONS TRANSACTIONS4
25
26
27
28
29
30
31
32
33
By type of underlying
security
U.S. Treasury bills
C o u p o n securities, by maturity
Five years or less
M o r e than five years
Inflation-indexed
Federal agency
Discount notes
C o u p o n securities, by maturity
O n e year or less
More than one year, but less than
or equal to five years
M o r e than five years
Mortgage-backed
0
0
0
0
0
0
0
0
0
0
0
0
1.217
3,829
0
1,548
3,619
0
1.380
4,111
0
1,361
3,105
0
1,940
5,870
0
1,317
4,757
0
1,265
2,419
0
407
3,491
0
1,628
6,201
0
1,553
4,420
0
754
3,853
0
902
3,590
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
102
1,189
n.a.
124
1,272
0
14
1,228
0
36
1,242
0
0
12
1,674
0
0
1,077
0
0
1.092
0
0
n.a.
2,105
n.a.
692
20
55
1,206
0
197
1,029
1. Transactions are market purchases and sales of securities as reported to the Federal
Reserve B a n k of N e w York by the U.S. g o v e r n m e n t 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 a m o n g 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 " w h e n - i s s u e d "
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.
n.a.
945
Forward transactions are agreements m a d e in the over-the-counter market that specify
delayed delivery. F o r w a r d contracts for U.S. Treasury securities and federal agency debt
securities are included w h e n 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 e x c h a n g e or in the over-the-counter market, and include options on futures
contracts on U.S. Treasury and federal agency securities.
NOTE, " n . a . " indicates that data are not published because of insufficient activity.
Federal Finance
1.43
U.S. GOVERNMENT SECURITIES DEALERS
A25
Positions and Financing 1
Millions of dollars
2001, week ending
2000, week ending
2000
Item
Oct.
Dec.
Nov.
Dec. 6
Dec. 13
Dec. 20
Dec. 27
Jan. 3
Jan. 10
Jan. 17
Jan. 24
NET OUTRIGHT POSITIONS3
1
2
3
4
5
6
7
8
9
By type of security
U.S.' Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Inflation-indexed
Federal agency
Discount notes
Coupon securities, by maturity
One year or less
More than one year, but less than
or equal to five years
More than five years
Mortgage-backed
4,172
6,870
15,431
25,627
24,064
7,224
7,857
12,648
11,859
6,987
12,609
-30,472
-17,380
3,125
-28,545
-11,005
3,015
-18,515
-13,463
1,713
-24,136
-11,230
1,560
-21,555
-14,317
1,872
-16,746
-13,971
1,867
-15,218
-14,071
1,709
-13,626
-13,363
1,400
-10,388
-10,442
4,458
-12,565
-10,434
3,628
-13,972
-9,383
3,733
33,428
29,599
31,098
34,622
30,133
28,910
32,335
29,166
29,422
33,806
31,531
16,088
16,590
16,245
15,876
16,878
16,970
17,187
15,160
17,826
17,686
7,293
5,114
14,596
6,499
4,163
12,297
10,167
3,742
13,939
7,357
6,157
13,899
6,048
5,626
14,803
5,520
6,217
20,050
6,757
6,649
17,785
6,822
8,113
16,521
6,942
6,255
13,052
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
13,990
5,672
1,978
14,541
7,057
4,043
12,132
n.a.
n.a.
NET FUTURES POSITIONS4
By type of deliverable
security
10 U.S.'Treasury bills
Coupon securities, by maturity
11
Five years or less
12
More than five years
13 Inflation-indexed
Federal agency
14 Discount notes
Coupon securities, by maturity
15
One year or less
16
More than one year, but less than
or equal to five years
17
More than five years
18 Mortgage-backed
0
1,921
-2,745
0
-252
-3,090
0
-657
-2,879
0
0
0
0
0
0
0
0
-1,232
0
0
-1,364
0
0
0
1,995
1,365
0
0
601
-1,608
0
-859
-4,660
0
-475
-6,726
0
2,870
-8,017
0
0
0
0
0
0
0
0
0
0
0
0
-269
0
0
-215
0
0
-68
0
0
-56
0
n.a.
-62
0
0
0
0
0
0
-344
1,043
0
1,248
1,021
0
1,421
1,294
0
1,634
1,100
0
-423
-3,901
0
20
-2,960
0
-495
-3,438
0
0
0
0
0
0
0
0
-521
0
0
-1,004
0
0
-740
0
0
-317
0
0
0
0
0
NET OPTIONS POSITIONS
19
20
21
22
23
24
25
26
27
By type of deliverable
security
U.S.'Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Inflation-indexed
Federal agency
Discount notes
Coupon securities, by maturity
One year or less
More than one year, but less than
or equal to five years
More than five years
Mortgage-backed
1,541
771
0
-1,768
-203
0
-684
-93
0
-1,229
-1,201
0
-283
-467
0
98
110
0
-1,594
378
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
41
208
3,895
-209
259
2,892
-528
533
2,031
-148
427
1,575
-597
378
2,767
-610
534
2,494
-629
664
2,691
-660
731
-537
-586
836
-207
-561
268
360
-448
383
2,357
Financing 5
Reverse repurchase
agreements
28 Overnight and continuing
29 Term
289,809
832,733
310,115
824,867
337,035
821,860
348,676
821,004
328,712
826,114
335,487
845,610
332,586
854,643
344,636
716,768
350,308
771,154
345,504
802,742
338,748
837,898
Securities
borrowed
30 Overnight and continuing
31 Term
289,467
117,801
271,420
123,967
263,010
137,491
257,697
132,603
261,575
135,102
263,144
138,700
266,023
142,393
267,982
138,307
279,724
132,370
273,126
128,726
267,133
128,360
2,228
n.a.
2,748
n.a.
2,848
n.a.
2,971
n.a.
2,742
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Repurchase
agreements
34 Overnight and continuing
35 Term
729,081
772,976
724,736
796,328
769,296
785,387
786,976
769,715
776,360
778,736
766,948
803,143
745,335
840,669
776,455
692,715
784,701
744,867
802,850
766,159
784,444
791,009
Securities
loaned
36 Overnight and continuing
37 Term
7,252
5,314
8,221
4,465
8,521
4,284
8,109
4,459
7,839
4,478
7,989
4,143
9,674
4,141
9,249
4,179
9,866
4,168
9,091
4,171
9,182
4,103
Securities
pledged
38 Overnight and continuing
39 Term
60,045
4,689
56,285
3,981
56,936
4,207
53,519
4,109
55,368
4,315
57,569
4,227
59,095
4,158
59,920
4,212
58,480
4,228
54,970
3,786
51,671
3,878
Collateralized
40 Total
27,796
26,695
25,778
30,783
24,367
26,876
20,426
28,184
26,103
25,033
26,837
Securities received as pledge
32 Overnight and continuing
33 Term
3,042
n.a.
loans
1. Data for positions and financing are obtained from reports submitted to the Federal
Reserve Bank of New York by the U.S. government securities dealers on its published list of
primary dealers. Weekly figures are close-of-business Wednesday data. Positions for calendar
days of 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 outright positions include immediate and forward positions. Net immediate positions include securities purchased or sold (other than mortgage-backed agency securities) that
have been delivered or are scheduled to be delivered in five business days or less and
"when-issued" securities that settle on the issue date of offering. Net immediate positions 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 less.
Forward positions reflect 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.
4. Futures positions reflect standardized agreements arranged on an exchange. All futures
positions are included regardless of time to delivery.
5. Overnight financing refers to agreements made on one business day that mature on the
next business day; continuing contracts are agreements that remain in effect for more than one
business day but have no specific maturity and can be terminated without advance notice by
either party; term agreements have a fixed maturity of more than one business day. Financing
data are reported in terms of actual funds paid or received, including accrued interest.
NOTE, "n.a." indicates that data are not published because of insufficient activity.
A30
1.44
DomesticNonfinancialStatistics • April 2001
FEDERAL A N D FEDERALLY SPONSORED CREDIT AGENCIES
Debt Outstanding
Millions of dollars, end of period
2000
Agency
1996
1 Federal and federally sponsored agencies
2 Federal agencies
Defense Department 1
3
4
Export-Import B a n k " 3
Federal Housing Administration 4
5
G o v e r n m e n t National Mortgage Association certificates of
6
participation 3
7
Postal Service 6
Tennessee Valley Authority
8
United States Railway Association 6
9
10 Federally sponsored agencies 7
11
Federal H o m e Loan Banks
12
Federal Home Loan Mortgage Corporation
Federal National Mortgage Association
13
14
Farm Credit Banks 8
Student Loan M a r k e t i n g A s s o c i a t i o n 9
15
Financing Corporation 1 0
16
Farm Credit Financial Assistance C o r p o r a t i o n "
17
Resolution Funding Corporation 1 "
18
MEMO
19 Federal Financing B a n k d e b t 1 ,
20
21
22
23
24
Lending to federal and federally sponsored
Export-Import Bank 3
Postal Service 6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association 6
Other
lending14
25 Farmers Home Administration
2b Rural Electrification Administration
11 Other
1997
1999
July
Aug.
Sept.
Oct.
925,823
1,022,609
1,296,477
1,616,492
1,726,016
1,763,089
1,776,334
29.380
6
1.447
84
27,792
6
552
102
26,502
6
n.a.
205
26,376
6
n.a.
126
26,094
6
n.a.
205
25,892
6
n.a.
210
25,993
6
n.a.
227
25,523
6
n.a.
237
n.a.
n.a.
27.853
n.a.
n.a.
n.a.
27,786
n.a.
n.a.
n.a.
26,496
n.a.
n.a.
n.a.
26,370
n.a.
n.a.
n.a.
76.088
n.a.
n.a.
n.a.
25,886
n.a.
n.a.
n.a.
25.987
n.a.
n.a.
n.a.
25,517
n.a.
896,443
263,404
156.980
331.270
60.053
44.763
8,170
1.261
29.996
994,817
313,919
169.200
369,774
63,517
37,717
8,170
1,261
29,996
1,269,975
382,131
287,396
460,291
63,488
35,399
8,170
1,261
29,996
1,590,116
529,005
360,711
547,619
68,883
41,988
8.170
1,261
29,996
1,699.922
565.037
399,370
579,448
69,757
44,223
8,170
1,261
29,996
1,737,197
572,836
412,656
595,117
70,139
44,113
8,170
1,261
29,996
1,750,341
580,579
406,936
607,000
71,055
42,423
8,170
1,261
29,996
1,777,824
576,689
422,960
615,463
71,345
48.988
8,170
1,261
29,996
58,172
49,090
44,129
42,152
38,143
38,040
42,837
41,280
agencies
557
1.431
n.a.
n.a.
n.a.
n.a.
18.325
16.702
21.714
13,530
14,898
20,110
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.
1998
4
T
4
T
4
T
T
i
n.a.
1
n.a.
1
n.a.
1
6,665
14,085
21,402
5,760
13,165
19,218
5,660
13,238
19,142
i
9,500
14,091
20,538
\
t
i
4
T
i
1
5,540
12,989
24,308
Nov.
n.a.
4
T
n.a.
1,807,600
580,957
429,617
633,100
71,667
50,016
?,170
1,261
29,996
n.a.
•
i
i
5,540
12,891
22,849
10. The Financing Corporation, established in August 1987 to recapitalize the Federal
Savings and Loan Insurance Corporation, undertook its first borrowing in October 1987.
U . T h e Farm Credit Financial Assistance Corporation, established in January 1988 to
provide assistance to the Farm Credit System, undertook its first borrowing in July 1988.
12. The Resolution Funding Corporation, established by the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989, undertook its first borrowing in October 1989.
13. The FFB, which began operations in 1974, is authorized to purchase or sell obligations
issued, sold, or guaranteed by other federal agencies. Because FFB incurs debt solely for the
purpose of lending to other agencies, its debt is not included in the main portion of the table to
avoid double counting.
14. Includes FFB purchases of agency assets and guaranteed loans; the latter are loans
guaranteed by numerous agencies, with the amounts guaranteed by any one agency generally
being small. The Farmers H o m e Administration 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
1.45
NEW SECURITY ISSUES
A31
Tax-Exempt State and Local Governments
Millions of dollars
2001
2000
Type of issue or issuer,
or use
1998
1999
2000
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
1 All issues, new and refunding'
262,342
215,427
180,403
20,208
12,827
15,284
15,598
18,035
18,079
15,348
11,255
By type of issue
2 General obligation
3 Revenue
87.015
175,327
73,308
142,120
64,475
115,928
8,581
11,628
4,256
8,572
5,194
10,090
6,888
8,710
5,871
12,163
5,044
13,036
5,060
10,288
6,256
4,999
By type of issuer
4 State
5 Special district or statutory authority 2
6 Municipality, county, or township
23,506
178,421
60,173
16,376
152,418
46,634
19,944
111,695
39,273
2,907
13,520
3.782
783
8,545
3,500
1,011
10,728
3,545
2,022
10,152
3,424
3,005
11,224
3,806
1,942
12,311
3,827
1,640
1,053
3,165
1,738
7,061
2,456
7 Issues for new capital
160,568
161,065
154,257
16,987
11,297
12,402
13,968
16,387
14,520
13,286
8,758
36,904
19,926
21,037
n.a.
8,594
42,450
36,563
17,394
15,098
n.a.
9,099
47,896
38.665
19,730
11,917
n.a.
7,122
47,309
4,465
1,093
1,141
n.a.
1,150
5,776
3,185
1,947
353
n.a.
632
2,543
3.630
1,979
1,409
n.a.
281
3,564
3,210
1,574
1,408
n.a.
387
5,243
3,492
2,575
1,272
n.a.
730
6,558
3,446
2.124
1,973
n.a.
500
3,787
2,919
1,381
1,307
n.a.
615
4,264
2,786
780
678
n.a.
63
3,013
8
9
10
11
12
13
By use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
1. Par amounts of long-term issues based on date of sale.
2. Includes school districts.
1.46
N E W SECURITY ISSUES
SOURCE. Securities Data Company
Digest before then.
beginning January
1990; Investment
Dealer's
U.S. Corporations
Millions of dollars
2000
Type of issue, offering,
or issuer
1998
1999
2000
May
June
July
Aug.
Sept.
Oct.
Nov.1"
Dec.
1 All issues'
1,128,491
1,072,866
944,414
62,939
100,615
65,511
82,752
94,492
62,466
95,595
63,594
2 Bonds"
1,001,736
941,298
809,497
58,233
92,742
57,476
69,875
88,102
53,345
84,094
58,713
923.771
77,965
818,683
122,615
684,662
124,835
45,986
12,247
75,271
17,471
40,753
16,723
56,133
13,742
73,516
14,586
47,415
5,930
76,383
7,712
57.189
1,525
n.a.
2,694
3,391
1,038
241
376
127
5,534
3,709
By type of offering
3 Sold in the United States
4 Sold abroad
MEMO
5 Private placements, domestic
n.a.
n.a.
By industry group
6 Nonfinancial
7 Financial
307,935
693,801
293,963
647,335
244,092
565,404
20,832
37,401
29,412
63,331
15,885
41,592
17,947
51,928
24,483
63,619
12,547
40,799
25,784
58,310
18,219
40,495
8 Stocks 3
205,605
217,868
134,917
4,706
7,873
8,035
12,877
6,390
9,121
11,501
2,665
By type of offering
9 Public
10 Private placement 4
126,755
78,850
131,568
86,300
134,917
n.a.
4,706
n.a.
7,873
n.a.
8,035
n.a.
12,877
n.a.
6,390
n.a.
9,121
n.a.
11,501
n.a.
2,665
n.a.
By industry group
11 Nonfinancial
12 Financial
74,113
52,642
110,284
21,284
118,369
16,548
4,522
184
6,521
1.352
7,773
262
8.645
4,232
6,205
185
8,278
843
10,794
707
2,146
519
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 olferings, employee stock plans, investment companies other than closedend, intracorporate transactions, and Yankee bonds. Stock data include ownership securities
issued by limited partnerships.
2. Monthly data include 144(a) olferings.
3. Monthly data cover only public offerings.
4. Data are not available.
SOURCE. Securities Data Company and the Board of Governors of the Federal Reserve
System.
A32
1.47
DomesticNonfinancialStatistics • April 2001
Net Sales and Assets 1
O P E N - E N D INVESTMENT COMPANIES
Millions of dollars
2000
Item
2001
2000 r
1999
July
June
Aug.
Sept.
Oct.
Dec. r
Nov.
Jan.
1 Sales of own shares"
1,791,894
2,279,315
181,866
166,815
179,890
159,809
169,071
143,412
170,255
208,194
2 Redemptions of own shares
3 Net sales 1
1,621,987
169,906
2,057,277
222,038
161,462
20,404
151,717
15,098
159,027
20.864
147,644
12,166
153,067
16,004
138,791
4,621
160,918
9,337
173,833
34,361
4 Assets 4
5,233,191
5,123,747
5,458,914
5,392,308
5,745,264
5,550,176
5,442,937
4,993,008
5,123,747
5,278,863
5 Cash 5
6 Other
219,189
5,014,002
277,386
4,846,361
259,241
5,199,673
258,472
5,133,836
261.967
5,483,298
280,192
5,269,984
302,682
5,140,255
300,133
4,692.875
277,386
4,846,361
280,477
4,998,386
4. Market value at end of period, less current liabilities.
5. Includes all U.S. Treasury securities and other short-term debt securities.
SOURCE. Investment Company Institute. Data based on reports of membership, which
comprises substantially all open-end investment companies registered with the Securities and
Exchange Commission. Data reflect underwritings of newly formed companies after their
initial offering of securities.
1. Data include stock, hybrid, and bond mutual funds and exclude money market mutual
funds.
2. Excludes reinvestment of net income dividends and capital gains distributions and share
issue of conversions from one fund to another in the same group.
3. Excludes sales and redemptions resulting from transfers of shares into or out of money
market mutual funds within the same fund family.
1.48
CORPORATE PROFITS A N D THEIR DISTRIBUTION
Billions of dollars; quarterly data at seasonally adjusted annual rates
1999
Account
1 Profits with inventory valuation and
capital consumption adjustment
2 Profits before taxes
3 Profits-tax liabilitv
4 Profits after taxes
5
Dividends
6
Undistributed profits
7 Inventory valuation
8 Capital consumption adjustment
SOURCE. U.S. Department of Commerce, Survey of Current
1.51
DOMESTIC FINANCE COMPANIES
1998
1999
2000
2000
Qi
Q2
Q3
Q4
Qi
Q2
Q3
Q4
815.0
758.2
244.6
513.6
351.5
162.1
856.0
823.0
255.9
567.1
370.7
196.4
n.a.
n.a.
n.a.
n.a.
397.0
n.a.
852.0
797.6
247.8
549.9
361.1
188.7
836.8
804.5
250.8
553.7
367.2
186.5
842.0
819.0
254.2
564.8
373.9
190.9
893.2
870.7
270.8
599.9
380.6
219.3
936.3
920.7
286.3
634.4
387.3
247.1
963.6
942.5
292.0
650.4
393.0
257.4
970.3
945.1
290.6
654.4
400.1
254.4
n.a.
n.a.
n.a.
n.a.
407.6
n.a.
17.0
39.9
-9.1
42.1
n.a.
33.6
11.4
42.9
-8.9
41.2
-19.7
42.7
-19.2
41.6
-25.0
40.6
-13.6
34.7
-4.5
29.7
n.a.
29.5
Business.
Assets and Liabilities'
Billions of dollars, end of period; not seasonally adjusted
1999
Account
1998
2000
2000
1999
Q2
Q3
Q4
QI
Q2
Q3
Q4
900. r
301.9'
455.7
142.4
915.3
296.1
471.1
148.1
ASSETS
711.7
261.8
347.5
102.3
811.5
279.8
405.2
126.5
915.3
296.1
471.1
148.1
756.5
269.2
373.7
113.5
776.3
271.0
383.0
122.3
811.5
279.8
405.2
126.5
848.7
285.4
434.6
128.8
884.4
294.1
454.1
136.2
56.3
13.8
53.5
13.5
59.9
14.7
53.4
13.4
54.0
13.6
53.5
13.5
54.0
14.0
57.1
14.4
58.8
14.2
59.9
14.7
7 Accounts receivable, net
8 All other
641.6
337.9
744.6
406.3
840.6
463.0
689.7
373.2
708.6
368.5
744.6
406.3
780.7
412.7
813.0
418.3
827.r
441.4
840.6
463.0
9 Total assets
979.5
1,150.9
1,303.7
1,062.9
1,077.2
1,150.9
1,193.4
1,231.3
1,268.4
1,303.7
26.3
231.5
35.1
227.9
35.6
235.2
25.1
231.0
27.0
205.3
35.1
227.9
28.5
230.2
32.5
221.3
35.4
215.6
35.6
235.2
61.8
339.7
203.2
117.0
123.8
397.0
222.7
144.5
145.8
464.1
280.4
142.6
65.4
383.1
226.1
132.2
84.5
396.2
216.0
148.2
123.8
397.0
222.7
144.5
145.1
412.0
247.6
130.1
137.1
445.4
259.3
135.6
144.3
465.5
269.2
138.3
145.8
464.1
280.4
142.6
979.5
1,150.9
1,303.6
1,062.9
1,077.2
1,150.9
1,193.4
1,231.3
1,268.4
1,303.6
I Accounts receivable, gross"
Consumer
2
3
Business
4
Real estate
5 LESS; Reserves for unearned income
Reserves for losses
6
LIABILITIES AND CAPITAL
10 Bank loans
11 Commercial paper
12
13
14
15
Debt
Owed to parent
Not elsewhere classified
All other liabilities
Capital, surplus, and undivided profits
16 Total liabilities and capital
1. Includes finance company subsidiaries of bank holding companies but not of retailers
and banks. Data are amounts carried on the balance sheets of finance companies; securitized
pools are not shown, as they are not on the books.
2. Before deduction for unearned income and losses. Excludes pools of securitized assets.
Securities Market and Corporate Finance
1.52
DOMESTIC FINANCE COMPANIES
A33
Owned and Managed Receivables'
Billions of dollars, amounts outstanding
2000
Type of credit
1998
1999
2000
July
Aug.
Sept.
Oct.
Nov.
Dec.
Seasonally adjusted
1 Total
875.8
993.9
1,145.0
1,089.1
1,094.1
1,112.1
l,134.9r
l,136.2r
1,145.0
2
3
4
352.8
131.4
391.6
385.3
154.7
453.9
439.3
174.7
531.0
405.9
167.5
515.8
411.1
169.0
514.1
419.7
170.9
521.6
437.3
174.4 r
523.2 r
439.8 r
176.6 r
519.7'
439.3
174.7
531.0
l,132.9r
l,137.9r
1,155.7
Consumer
Real estate
Business .
Not seasonally adjusted
5 Total
6
7
8
9
10
1 1
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
Consumer
Motor vehicles loans
Motor vehicle leases
Revolving"
Other 1
Securitized assets 4
M o t o r vehicle loans
M o t o r vehicle leases
Revolving
Other
Real estate
One- to four-family
Other
Securitized real estate assets 4
One- to f o u r - f a m i l y
Other
Business
M o t o r vehicles
Retail loans
Wholesale loans 5
Leases
Equipment
Loans
Leases
Other business receivables 6
Securitized assets 4
M o t o r vehicles
Retail loans
W h o l e s a l e loans
Leases
Equipment
Loans
Leases
Other business receivables 6
884.0
1,003.2
1,155.7
1,082.2
1,087.9
1,106.8
356.1
103.1
93.3
32.3
33.1
388.8
114.7
98.3
33.8
33.1
443.4
122.5
102.9
38.3
32.4
408.3
129.4
104.4
33.6
31.5
412.3
130.7
105.4
33.6
32.3
421.0
130.1
104.6
35.4
31.7
437.9
131.8
104.3
37.1
31.9
441,4 r
127.8
104.0
38.0 r
32.0
443.4
122.5
102.9
38.3
32.4
54.8
12.7
8.7
18.1
131.4
75.7
26.6
71.1
9.7
10.5
17.7
154.7
88.3
38.3
97.1
6.6
27.5
16.0
174.7
105.2
42.9
74.5
7.6
10.9
16.4
167.5
100.5
39.7
76.2
7.4
10.7
16.2
169.0
101.7
40.2
78.8
7.2
17.2
16.0
170.9
100.9
41.5
84.3
7.0
25.8
15.7
174.4 r
104.6
42. r
91.5
6.8
25.8
15.5
176.6 r
107.0
42.7 r
97.1
6.6
27.5
16.0
174.7
105.2
42.9
29.0
.1
396.5
79.6
28.1
32.8
18.7
198.0
50.4
147.6
69.9
28.0
1
459.6
87.8
33.2
34.7
19.9
221.9
52.2
169.7
95.5
24.7
1.9
537.7
95.2
31.0
39.6
24.6
267.3
56.2
211.1
108.6
27.1
.2
506.4
89.4
34.1
32.9
22.3
248.6
54.8
193.9
109.4
26.8
.2
506.7
89.6
34.3
32.6
22.7
250.0
54.3
195.8
108.3
26.5
1.9
514.9
94.1
34.8
35.5
23.7
256.7
55.8
200.9
104.9
25.7
1.9
520.6 r
95.9
34.7
37.5
23.7
259.4 r
56.1
203.3 r
103.7
25.0
1.9
519.9 r
93.3
32.3
37.3
23.8
259.3 r
54.7
204.6'
103.2
24.7
1.9
537.7
95.2
31.0
39.6
24.6
267.3
56.2
211.1
108.6
29.2
2.6
24.7
1.9
13.0
6.6
6.4
6.8
31.5
2.9
26.4
2.1
14.6
7.9
6.7
8.4
37.8
3.2
32.5
2.2
23.1
15.5
7.6
5.6
29.8
2.8
24.6
2.4
22.5
16.0
6.5
6.8
29.6
2.7
24.5
2.4
22.4
15.9
6.5
6.8
31.9
2.4
27.1
2.4
21.4
15.1
6.4
5.8
34.2
2.3
29.5
2.4
21.7
14.9
6.7
5.8
37.0
3.1
31.5
2.4
21.3
14.6
6.7
5.8
37.8
3.2
32.5
2.2
23.1
15.5
7.6
5.6
NOTE. This table has been revised to incorporate several changes resulting f r o m the
benchmarking of finance c o m p a n y receivables to the June 1996 Survey of Finance C o m p a nies. In that b e n c h m a r k survey, and in the monthly surveys that have followed, more detailed
b r e a k d o w n s have been obtained for some components. In addition, previously unavailable
data on securitized real estate loans are now included in this table. T h e new information has
resulted in s o m e reclassification of receivables a m o n g the three m a j o r categories (consumer,
real estate, and business) and in discontinuities in some component series between M a y and
June 1996.
Includes finance c o m p a n y subsidiaries of bank holding companies but not of retailers and
banks. Data in this table also appear in the B o a r d ' s G . 2 0 (422) monthly statistical release. For
ordering address, see inside front cover.
1. O w n e d receivables are those carried on the balance sheet of the institution. M a n a g e d
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 i n c o m e and losses. C o m p o n e n t s m a y not sum to totals
because of rounding.
2. Excludes revolving credit reported as held by depository institutions that are subsidiaries of finance companies.
3. Includes personal cash loans, mobile h o m e loans, and loans to purchase other types of
c o n s u m e r 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 loans on commercial accounts receivable, factored commercial accounts, and
receivable dealer capital; small loans used primarily for business or f a r m purposes; and
wholesale and lease paper for mobile homes, campers, and travel trailers.
A34
1.53
DomesticNonfinancialStatistics • April 2001
MORTGAGE MARKETS
Mortgages on N e w Homes
Millions of dollars except as noted
2000
Item
1999
2001
2000
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Terms and yields in primary and secondary markets
PRIMARY MARKETS
1
2
3
4
5
Terms'
Purchase price (thousands of dollars)
Amount of loan (thousands of dollars)
Loan-to-price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount)"
Yield (percent per year)
6 Contract rate 1
7 Effective rate 1 ' 3
8 Contract rate ( H U D series) 4
195.2
151.1
80.0
28.4
.89
210.7
161.7
78.7
28.8
.77
234.5
177.0
77.4
29.2
.70
235.8
178.3
77.7
29.3
.66
237.0
179.7
77.7
29.3
.68
241.9
182.5
77.1
29.2
.70
240.2
180.4
77.2
29.2
.69
247.2
184.2
76.2
29.2
.69
250.0
187.3
76.5
29.1
.73
238.7
181.6
78.2
29.4
.71
6.95
7.08
7.00
6.94
7.06
7.45
7.41
7.52
n.a.
7.41
7.51
n.a.
7.44
7.54
n.a.
7.41
7.52
n.a.
7.43
7.53
n.a.
7.36
7.47
n.a.
7.29
7.40
n.a.
7.09
7.20
n.a.
7.04
6.43
7.74
7.03
n.a.
7.57
n.a.
7.59
n.a.
7.44
n.a.
7.43
n.a.
7.30
n.a.
7.22
n.a.
6.83
n.a.
6.57
SECONDARY MARKETS
Yield (percent per year)
9 F H A mortgages (Section 203) 5
10 G N M A securities 6
Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION
11
12
13
Mortgage holdings (end of
Total
FHA/VA insured
Conventional
14
period)
523,941
610,122
561,045
60,397
568,187
574,087
55,318
468,623
61.539
623,950
62,970
500,648
514,126
586,756
60,329
526,427
610,122
61,539
548,583
60,150
508,037
598,951
60,694
380,745
538,257
548,583
560,980
Mortgage transactions purchased (during period)
188,448
195,210
154,231
15,128
13,352
11,501
18,444
17,322
17,193
20,598
15
16
Mortgage
Issued 7
To sell 8
193,795
1.880
187,948
163,689
16,143
693
17,435
268
15,287
11,786
16,660
436
14.253
5.900
20,120
1,436
27,325
766
1 /
18
19
Mortgage holdings (end of period f
Total
M1AA A insured
Conventional
255,010
785
254,225
324,443
385,693
354,020
365,198
372,819
3,332
3,517
358,107
3,530
361,668
3,321
369,498
385,693
3,332
382,361
391,679
3,307
382,361
2,858
351,162
357,002
2,903
361,624
1,836
322,607
267,402
239,793
233,031
174.043
10,912
166.901
10,539
16,056
15,558
21,748
250,565
21,189
16,195
15,614
19,402
18,823
24,313
22,277
15,658
15,364
281,899
228,432
169,231
10,803
17,468
19,481
17,915
20,012
21,780
18,685
commitments
(during
414,515
33.770
59,961
period)
236
676
FEDERAL HOME LOAN MORTGAGE CORPORATION
Mortgage
transactions
(during
22
Sales
Mortgage commitments contracted (during period)
9
1. Weighted averages based on sample surveys of mortgages originated by m a j o r 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 " p o i n t s " 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; f r o m 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, m i n i m u m - d o w n p a y m e n t first m o r t g a g e s insured
by the Federal Housing A d m i n i s t r a t i o n ( F H A ) for immediate delivery in the private
secondary market. Based on transactions on first day of subsequent m o n t h .
388,372
period)
20
21
354,099
6. Average net yields to investors on fully modified pass-through securities backed by
mortgages and guaranteed by the Government National Mortgage Association ( G N M A ) ,
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 H o m e Loan
Mortgage Corporation's mortgage commitments and mortgage transactions include activity
under mortgage securities swap programs, whereas the corresponding data for F N M A
exclude swap activity.
Real Estate
1.54
A3 5
MORTGAGE DEBT OUTSTANDING 1
Millions of dollars, end of period
1999
Type of holder and property
1996
1997
2000
1998
Q3
Q4
Qi
Q2
Q3 P
1 All holders
4,868,298 r
5,204,119 r
5,737,161 r
6,236,316 r
6,385,916 r
6,481,515 r
6,651,208 r
6,803,226
By type of property
? One to four-family residences
3 Multifamily residences
4 Nonfarm, nonresidential
5
3,718,683 r
288,837 r
773,643
87,134
3,973,692 r
302,29 l r
837,837 r
90,299
4,362,699 r
332,12 I r
945,836 r
96,506
4,698,263 r
360,939 r
1,075,719 r
101,395
4,793,966 r
374,596 r
1,114,392 r
102,962
4,853,759 r
382,386 r
1,141,622 r
103,748
4,977,879 r
392,595 r
1,174,687r
106,047 r
5,104,650
399,882
1,191,463
107,232
1,981.886
1,145,389
677,603
45,451
397,452
24.883
628,335
513,712
61,570
52,723
331
208,162
6,977
30,750
160,315
10,120
2,083,981 r
1,245,315
745,510
49,670
423,148
26,986
631,826 r
520,782 r
59,540
51.150
354
206,840
7,187
30,402
158,779
10,472
2,194,813
1,337,217
797,492
54,116
456,574
29,035
643,957
533,918
56,821
52,801
417
213,640
6,590
31,522
164,004
11,524
2,321,356
1,418,819
827,291
63,964
496,246
31,320
676,346
560,622
57.282
57,983
459
226,190
7,432
31,998
174.571
12,189
2,394,923
1,495,502
879,552
67,591
516,520
31,839
668,634
549,072
59,138
59,948
475
230.787
5,934
32,818
179,048
12,987
2,456,786
1,546,816
904,581
72.431
537.131
32,673
680,745
560,046
57,759
62,447
493
229,225
5,874
32,602
177,870
12,879
2,548,570 r
1,614,307
948,496
75,713
556,382
33,717
701,992
578,641
59,142
63,691
518
232,270 r
5,949 r
33,037 r
180,243 r
13,041 r
2,603,713
1,648,734
968,069
76,945
569,801
33,919
721,488
595,472
60,044
65,441
531
233,491
5,999
33,206
181,167
13,119
295,192
2
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
168,813
155,008
13.805
29,602
1,742
0
46,504
41,758
4,746
286,194
8
8
0
41,195
17.253
293,613
7
7
0
40,851
16.895
11,739
7,705
4,513
3,674
1,849
1,825
0
0
0
0
0
361
58 r
70 r
233 r
0
157,675
147,594
10,081
32,983
1,941
0
57,085
49,106
7,979
322,572
8
8
0
73,705
16,583
11,745
41,068
4,308
3,889
2,013
1,876
0
0
0
0
0
163
26 r
31 r
I05 r
0
153,172
142,982
10,190
34,217
2,013
0
55,695
44,010
11,685
322,352
7
7
0
73,871
16,506
11,741
41,355
4,268
3,712
1,851
1,861
0
0
0
0
0
152
25 r
29 r
98 r
0
151,500
141,195
10,305
34,187
2,012
0
56,676
44,321
12,355
332.868 r
7
7
0
72,896
16,435
11,729
40,554
4,179
3,845
1,832
2,013
0
0
0
0
0
72
12r
14r
46 r
0
153.507 r
142,478 r
11,029
34,830'
2,049 r
0
56,972
42,892
14,080
336,871
6
6
0
73,009
16,444
11,734
40,665
4,167
3,395
1,327
2,068
0
0
0
0
0
82
13
16
53
0
153,114
141,786
11,328
35,549
2,092
0
57,046
42,138
14,908
2,040,847 r
506,246
494,064
12,182
554,260
551,513
2,747
650,779
633,209
17,570
3
0
0
0
3
329.559
258,800
16,369
54,390
0
2,239,350'
536,879
523,225
13,654
579,385
576,846
2,539
709,582
687.981
21,601
2
0
0
0
2
413,502
316,400
21,591
75,511
0
2,589,800 r
537.446
522,498
14,948
646,459
643,465
2,994
834.517
804,204
30,313
1
0
0
0
571,378 r
412,700
34,329 r
124,348 r
0
2,891,187 r
569.038
552,670
16,368
738.581
735,088
3,493
938,484
903,531
34,953
0
0
0
0
0
645,083 r
455,276
40,935 r
148.872 r
0
2,954,784 r
582,263
565,189
17,074
749,081
744.619
4,462
960,883
924,941
35.942
0
0
0
0
0
662,557 r
462,600
42,628
I57,330 r
0
3,034,134 r
590,830 r
572,783 r
18,047
768,641
763.890
4,751
995,815
957,584
38,231
0
0
0
0
0
678,848 r
464,593 r
44.290 r
169,965 r
0
3,112,824
602,794
584,318
18,476
790,891
786,007
4.884
1,020,828
981,206
39,622
0
0
0
0
0
698,311
477,899
44,513
175,899
0
550,372 r
363,104 r
68,830 r
100,269
18,169
594,594 r
382,315 r
72,088 r
121,4I2 r
18,779
658,935 r
423,416 r
75,374 r
140,17 r
19,974
701,202 r
447,171 r
76,242 r
156,874 r
20,915 r
713,857 r
454,126 r
78,420 r
I60,093 r
21,217
735.6361"
469,801 r
80,219 r
I63,806 r
21,811 r
749,818
487,534
81,808
158,437
22,039
By type of holder
6 Major financial institutions
Commercial banks"
7
One to four-family
8
9
Multifamily
Nonfarm, nonresidential
Farm
Savings institutions'
13
One- to four-family
Multifamily
14
Nonfarm, nonresidential
16
Farm
17
Life insurance companies
One- to four-family
18
Multifamily
19
Nonfarm, nonresidential
70
Farm
21
in
11
i?
15
22 Federal and related agencies
73
Government National Mortgage Association
One to four-family
24
Multifamily
75
76
Farmers Home Administration 4
One- to four-family
77
78
Multifamily
79
Nonfarm, nonresidential
30
Farm
31
Federal Housing and Veterans' Administrations
One to four-family
37
Multifamily
33
Resolution Trust Corporation
.34
One- to four-family
35
Multifamily
36
Nonfarm, nonresidential
37
38
Farm
Federal Deposit Insurance Corporation
39
One- to four-family
40
Multifamily
41
Nonfarm. nonresidential
47
43
Farm
44
Federal National Mortgage Association
45
One- to four-family
46
Multifamily
Federal Land Banks
47
48
One- to four-family
49
Farm
50
Federal Home Loan Mortgage Corporation
51
One- to four-family
Multifamily
52
53 Mortgage pools or trusts 5
Government National Mortgage Association
54
55
One- to four-family
Multifamily
56
Federal Home Loan Mortgage Corporation
57
One to four-family
58
Multifamily
59
60
Federal National Mortgage Association
61
One- to four-family
Multifamily
62
63
Farmers Home Administration 4
64
One to four-family
Multifamily
65
66
Nonfarm, nonresidential
Farm
67
68
Private mortgage conduits
69
One- to four-family 6
70
Multifamily
Nonfarm, nonresidential
71
Farm
72
73 Individuals and others 7
74
One- to four-family
Multifamily
75
Nonfarm, nonresidential
76
Farm
77
11,720
7,370
4,852
3,811
1.767
2,044
0
0
0
0
0
724
117r
140r
467 r
0
161.308
149,831
11,477
30.657
1,804
0
48,454
42.629
5,825
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.
1
323,145
7
7
0
72,899
16,456
11,732
40,509
4,202
3,794
1,847
1,947
0
0
0
0
0
98
16r
19r
63 r
0
150,312
139,986
10,326
34,142
2,009
0
57,009
43,384
13,625
2,982,316 r
589,192 r
571,506 r
17,686
757,106
752,607
4,499
975,815
938,898
36,917
0
0
0
0
0
660,203'
455,623 r
43,268 r
161,3 3 2 r
0
719,268 r
456.285 r
79,326 r
162,289 r
21,368
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
DomesticNonfinancialStatistics • April 2001
CONSUMER CREDIT 1
Millions of dollars, amounts outstanding, end of period
2000
Holder and type of credit
1998
1999
2000
July
Aug.
Sept.
Oct.
Nov.
Dec.
Seasonally adjusted
1 Total
2 Revolving
3 Nonrevolving 2
1,301,023
1,393,657
1,533,800
1,470,768
1,484,081
1,492,934
1,509,568
1,522,000
1,533,800
560,504
740,519
595,610
798,047
663,000
870,800
638,406
832,363
645,121
838,961
649,297
843,637
656,666
852,902
662,800
862,200
663,000
870,800
Not seasonally adjusted
4 Total
1331,742
1,426,151
1,568,800
1,463,292
1,486,048
1,495,627
1,513,688
1,529,800
1,568,800
By major holder
Commercial banks
Finance companies
Credit unions
Savings institutions
Nonfinancial business
Pools of securitized assets 3
508,932
168,491
155,406
51,611
74,877
372,425
499,758
181,573
167,921
61,527
80,311
435,061
543,700
193,200
185,300
64,000
82,700
500,000
506,254
194,438
178,034
61,493
71,956
45,117
520,431
196,555
180,679
62,037
73,030
453,316
521,767
197,276
181,597
62,580
72,091
460,316
521,515
200,815
183,010
62,815
70,842
474,691
527,200
197,800
184,200
63,100
73,800
483,800
543,700
193,200
185,300
64,000
82,700
500,000
By major type of credit
11 Revolving
12
Commercial banks
13
Finance companies
14
Credit unions
15
Savings institutions
16
Nonfinancial business
17
Pools of securitized assets 3
586,528
210,346
32,309
19,930
12,450
39,166
272,327
623,245
189,352
33,814
20,641
15,838
42,783
320,817
692,800
218,100
38,252
22,191
16,862
42,504
354,683
630,633
194,496
33,565
20,476
15,745
36,078
330,273
641,298
204,016
33,558
20,796
16,036
36,669
330,223
645,820
202,362
35,405
20,783
16,327
35,817
335,126
654,678
201,874
37,148
20,804
16,505
34,484
343,313
664,300
206,100
37,957
21,276
16,684
36,430
345,817
692,800
218,100
38,252
22,191
16,862
42,504
354,683
18 Nonrevolving
19
Commercial banks
Finance companies
20
21
Credit unions
22
Savings institutions
23
Nonfinancial business
24
Pools of securitized assets 3
745,214
298,586
136,182
135,476
39,161
35,711
100,098
802,906
310,406
147,759
147,280
45,689
37,528
114,244
867,383
319,302
154,905
162,781
46,424
40,269
143,703
832,659
311,758
160,873
157,558
45,748
35,878
120,844
844,750
316,415
162,997
159,883
46,001
36,361
123,093
849,807
319,405
161,871
160,814
46,253
36,274
125,190
859,418
319,882
163,697
162,359
46,310
36,311
130,858
865,467
321,053
159,801
162,960
46,367
37,352
137,934
867,383
319,302
154,905
162,781
46,424
40,269
143,703
5
6
7
8
9
10
1. T h e Board's series on amounts of credit covers most short- and intermediate-term credit
extended to individuals, excluding loans secured by real estate. 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 motor vehicle loans, mobile home loans, and all other loans that are not
included in revolving credit, such as loans for education, boats, trailers, or vacations. These
loans may be secured or unsecured.
1.56
3. Outstanding balances of pools upon which securities have been issued; these balances
are no longer carried on the balance sheets of the loan originator.
4. Totals include estimates for certain holders for which only consumer credit totals are
available.
TERMS OF CONSUMER CREDIT 1
Percent per year except as noted
2000
Item
1998
1999
2000
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
INTEREST RATES
Commercial
banks2
1 48-month new car
2 24-month personal
8.72
13.74
8.44
13.39
9.34
13.90
n.a.
n.a.
n.a.
n.a.
9.62
13.85
n.a.
n.a.
n.a.
n.a.
9.63
14.12
n.a.
n.a.
Credit card plan
3 All accounts
4 Accounts assessed interest
15.71
15.59
15.21
14.81
15.71
14.91
n.a.
n.a.
n.a.
n.a.
15.98
15.35
n.a.
n.a.
n.a.
n.a.
15.99
15.23
n.a.
n.a.
Auto finance
5 New car
6 Used car
6.30
12.64
6.66
12.60
6.61
13.55
6.40
13.58
6.55
13.64
7.46
13.70
7.16
13.91
4.74
13.87
5.41 r
13.53
7.45
13.45
52.1
53.5
52.7
55.9
54.9
57.0
55.6
57.3
55.6
57.2
55.7
57.2
55.9
57.0
57.6
57.0
57.3
56.8
55.2
NC
92
99
92
99
92
99
92
99
92
100
92
100
91
100
93
100
93
100
91
NC
19,083
12,691
19,880
13,642
20,923
14,058
20,349
14,245
20,406
14,269
20,664
14,166
21,010
13,950
22,069
13,978
22,443
14,325
21,867
NC
companies
OTHER TERMS3
Maturity
7 New car
8 Used car
(months)
Loan-to-value
9 N e w car
10 Used car
ratio
Amount financed
New car
12 Used car
(dollars)
11
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
1.57
A37
FUNDS RAISED IN U.S. CREDIT MARKETS 1
Billions of dollars; quarterly data at seasonally adjusted annual rates
2000
1999
Transaction category or sector
1995
1996
1997
1998
1999
Q2
Q3
Q4
Ql
Q2
Q3
Q4
779.9
835.7
Nonfinancial sectors
l,089.5r
-98.5
-99.1
.6
-68.9'
-68.9'
.0
-34.0'
-34.0'
.0
-215.5
-213.5
-2.1
-414.0
-415.8
1.8
-219.5
-217.1
-2.4
-334.5
-333.3
-1.2
1,192.7'
1,038.3'
1,247.0'
1,123.5'
1,139.6'
1,385.4'
999.4
1,170.2
24.4
96.8
218.7
108.2
74.3
5012'
386.8'
20.8'
93.4'
6.2
67.6
37.4
68.2
229.9
82.7
71.2
608.9'
432.0'
40.2
131.2'
5.5
94.4
-2.6
56.8
287.6
24.0
2.3
608.9'
440.2'
33.0'
126.7'
9.0
61.4
49.8
71.3
202.8
112.3
79.2
655.4'
479.4
41.3'
127.6'
7.0
76.2
44.0
52.5
155.2
108.6
55.4
598.3'
397.1'
50.9'
147.9'
2.5
109.5
29.8'
8.9
186.2
131.9
153.3'
484.9'
344.1'
29.5'
104.4'
6.9
144.6'
110.4'
34.0
153.8
163.1
124.4'
662.6'
489.4'
44.7'
119.7'
8.9
137.2'
56.1
29.8
184.4
31.8
-2.5
577.0
429.6
31.3
110.7
5.3
122.9
-4.0
68.6
175.6
84.2
141.1
570.5
414.1
36.6
116.8
3.0
134.2
337.lr
388.2 r
266.5 r
115.6 r
6.2
56.1
479.1'
537.8 r
418.1'
112.0'
7.7
80.3
538.2'
602.1'
481.6'
115.3'
5.2
52.3
512.9'
481.8'
372.8'
107.2'
1.7
43.6
580.6'
613.9'
473.8'
131.6'
8.5
52.5
498.0'
591.9'
453.6'
132.7'
5.6
33.6
523.0'
612.8'
481.3'
116.5'
15.0'
3.8
638.9'
725.7'
592.4'
125.1'
8.3
20.8
552.2
423.5
309.1
109.3
5.1
23.6
576.0
533.9
404.5
117.6
11.7
60.3
88.4
11.3
67.0
9.1
1.0
71.8
3.7
61.4
8.5
-1.8
43.3
7.8
34.8
6.7
-6.0
25.3
16.3
14.2
.5
-5.7
-24.5
-27.5
.2
5.6
-2.8
77.3
41.1
44.0
-6.6
-1.1
17.6
33.6
-2.7
2.3
-15.5
118.0'
57.8'
45.7
15.4
-.9
-7.6'
12.0'
-27.4'
5.7
2.0
89.2
7.0
71.7
11.9
-1.5
47.8
50.1
-15.3
12.2
.8
819.7 r
876.3 r
l,107.1r
l,042.0r
963.9 r
869.0
883.5
711.lr
731.3 r
804.6 r
l,044.6r
l,121.5r
By sector and instrument
Federal government
Treasury securities
4
Budget agency securities and mortgages
144.4
142.9
1.5
145.0
146.6
-1.6
23.1
23.2
-.1
-52.6
-54.6
2.0
-71.2
-71.0
-.2
5 Nonfederal
566.7 r
586.3
781.5 r
l,097.2 r
18.1
-48.2
91.1
103.7
67.2
195.8 r
181.0'
6.1 r
7.r
1.6
138.9
-.9
2.6
116.3
70.5
33.5
275.7
242. l r
9.0 r
22.0 r
2.6
88.8
13.7
71.4
150.5
106.5
69.1
317.7 r
252.3
8.2 r
54.lr
3.2
52.5
363.5 r
254.7 r
227.5 r
24.3
2.9
-51.5
357.8 r
235.3 r
149. r
81.4
4.8
-6.8
78.5
13.5
57.1
8.5
-.5
789.6 r
7
8
9
in
ii
i?
n
14
H
16
By instrument
Commercial paper
Municipal securities and loans
Corporate bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Multifamily residential
Commercial
Consumer credit
By borrowing
17
18
19
7.0
71
22
sector
Nonfinancial business
Coiporate
Nonfarm noncorporate
Farm
State and local government
7.3 Foreign net borrowing in United States
74
Commercial paper
75
Bonds
76
Bank loans n.e.c
27
Other loans and advances
28 Total domestic plus foreign
l,087.9r
l,146.8r
939.8 r
915.3 r
l,255.4r
924.0 r
971.5 r
l,178.0r
1 Total net borrowing by domestic nonfinancial sectors . . .
Financial sectors
29 Total net borrowing by financial sectors
454.0 r
545.7 r
653.8 r
1,073.9
1,087.9
995.3
1,064.2
l,063.2r
617.7 r
817.5 r
733.2
1,079.0
By instrument
30 Federal government-related
31
Government-sponsored enterprise securities
32
Mortgage pool securities
Loans from U.S. government
33
204.2 r
105.9
98.3 r
.0
231.4 r
90.4
141,0 r
.0
212.9 r
98.4
114.6 r
.0
470.9
278.3
192.6
.0
592.0
318.2
273.8
.0
576.6
304.7
271.9
.0
651.6
407.1
244.5
.0
550.1'
367.9
182.2'
.0
248.6'
104.9
143.7'
.0
370.9'
248.9
122.1'
.0
503.5
278.1
225.4
.0
607.9
300.5
307.4
.0
34 Private
35
Open market paper
36
Corporate bonds
Bank loans n.e.c
37
38
Other loans and advances
39
Mortgages
249.8
42.7
195.9
2.5
3.4
5.3
314.4
92.2
173.8
12.6
27.9
7.9
440.9
166.7
210.5
13.2
35.6
14.9
603.0
161.0
296.9
30.1
90.2
24.8
495.9
176.2
221.8
-14.3
107.1
5.1
418.8
57.3
254.8
11.0
107.9
-12.3
412.6
89.9
179.5
-5.9
139.8
9.4
513.0
479.0
-21.0
-55.6
107.5
3.2
369.2
130.9
166.5
.3
64.4
7.0
446.6
77.4
230.7
5.4
123.1
10.0
229.7
65.2
195.9
-.7
-36.7
6.0
471.1
237.5
220.9
-12.7
19.1
6.4
22.5
2.6
-.1
-.1
105.9
98.3 r
142.4
50.2
-2.2
4.5
-5.0
34.9
13.0
25.5
.1
1.1
90.4
141.0 r
150.8
45.9
4.1
11.9
-2.0
64.1
46.1
19.7
.1
.2
98.4
114.6 r
202.2
48.7
-4.6
39.6
8.1
80.7
72.9
52.2
.6
.7
278.3
192.6
321.4
43.0
1.6
62.7
7.2
40.7
67.2
48.0
2.2
.7
318.2
273.8
234.0
62.4
.2
6.3
-17.2
92.2
61.5
59.2
1.4
3.0
304.7
271.9
301.5
90.5
5.1
-19.7
-18.3'
-65.3'
107.0
51.9
2.8
1.1
407.1
244.5
220.5
-17.2
-6.1
7.9
17.8'
27.0'
54.1
5.8
3.3
-4.4
367.9
182.2'
124.2
99.2
6.2
11.3
-37.3
250.6
72.4
40.6
-2.9
-.7
104.9
143.7'
166.0
52.3
-3.0
11.5
44.4
-11.4
113.2
59.1
.9
-1.1
248.9
122.1'
154.8
103.9
2.7
9.8
-.7
4.0
23.5
-23.4
1.1
-.3
278.1
225.4
155.6
96.9
-.3
-2.4
25.4
-46.4
31.1
32.5
1.0
-.7
300.5
307.4
298.8
46.8
1.0
10.4
-6.7
56.9
40
41
47
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
A38
1.57
Domestic Financial Statistics • April 2001
F U N D S R A I S E D I N U.S. C R E D I T M A R K E T S 1 — C o n t i n u e d
Billions of dollars; quarterly data at seasonally adjusted annual rates
1999
T r a n s a c t i o n c a t e g o r y or sector
1995
1996
1997
1998
2000
1999
Q2
Q3
Q4
Ql
Q2
Q3
Q4
2,170.3r
l,659.8r
l,781.4r
1,602.2
1,962.6
r
556.6
516.T
52.5
131.5
55.2
147.3
601.5r
109.5
199.8 r
-43.0r
34.0
357.2r
174.2
249.5r
612.6'
137.2 r
128.4
284.0
29.8
452.0
43.0
-40.7
583.0
122.9
283.6
273.4
68.6
381.2
83.6
161.0
576.9
134.2
All sectors
52 Total n e t b o r r o w i n g , all s e c t o r s
53
54
55
56
57
58
59
60
Open market paper
U.S. g o v e r n m e n t securities
M u n i c i p a l securities
Corporate and foreign bonds
B a n k loans n.e.c
O t h e r loans a n d a d v a n c e s
Mortgages
C o n s u m e r credit
l,243.7r
74.3
348.61
-48.2
344.1
114.7
70.1
201.r
138.9
l,365.4r
102.6
376.41"
2.6
357.0
92.1
62.5
283.5r
88.8
l,530.1r
184.1
236.0 1
71.4
422.4
128.2
102.8
332.6r
52.5
2,161.8r
193.1
418.3
96.8
550.4
145.0
158.5
532.0r
67.6
2,234.6r
229.9
520.7r
68.2
465.9
68.9
172.6
614.0r
94.4
l,910.7r
27.2
478.1
56.8
542.6
40.6
107.5
596.6r
61.4
2,319.6r
180.7
582.7'
71.3
426.3
99.8
217.9
664.8r
76.2
218.4
33.0r
8.9
398.4
147.7
216.9r
491.9r
144.6 r
F u n d s raised t h r o u g h m u t u a l f u n d s a n d c o r p o r a t e equities
61 Total net i s s u e s
62 C o r p o r a t e equities
Nonfinancial corporations
63
64
F o r e i g n shares p u r c h a s e d by U.S. r e s i d e n t s
65
Financial corporations
6 6 M u t u a l f u n d shares
X31.5
231.9
181.2
100.0
156.5
173.1r
124.5r
172.9r
410.7r
168.9r
208.1
-105.7
-16.0
-58.3
50.4
-8.1
147.4
-5.7
-69.5
82.8
-19.0
237.6
-83.9
-114.4
57.6
-27.1
265.1
-174.6
-267.0
101.2
-8.9
274.6
-31.8
-143.5
114.4
-2.8r
188.3
-39.3r
-338.4
284.4
14.7 r
212.4
-3.0r
-128.4
121.7
3.7 r
127.5
.R
104.6 r
62.8r
63.3
-21.4r
306.1
— 68.7r
-248.8
-51.7
-75.6
50.0
-26.1
259.8
-282.0
-350.8
71.5
-2.8
176.3
1. D a t a in this table a l s o a p p e a r in the B o a r d ' s Z . l (780) q u a r t e r l y statistical release, tables
F.2 t h r o u g h F.4. For o r d e r i n g a d d r e s s , see i n s i d e f r o n t cover.
-55.0
71.3
- 16.2 r
172.8
180. R
- . R
237.6
Flow of Funds
1.58
A39
S U M M A R Y OF FINANCIAL TRANSACTIONS1
Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates
2000
1999
T r a n s a c t i o n c a t e g o r y or sector
N E T L E N D I N G IN C R E D I T
1995
1996
1997
1998
1999
Q2
Q3
Q4
QI
Q2
Q3
Q4
MARKETS2
1 Total n e t l e n d i n g in c r e d i t m a r k e t s
l,243.7r
l,365.4r
l,530.1r
2,161.8r
2,234.6r
l,910.7r
2,319.6r
2,170.3r
l,659.8r
1,781.4
1,602.2
1,962.6
7 D o m e s t i c n o n f e d e r a l n o n f i n a n c i a l sectors
— 61.0r
34.5r
-8.8
4.7
—91.4
-.5r
273.9
l,031.2r
12.7
265.9
186.5
75.4
-.3
4.2
-7.6
16.2
-8.3
100.0
21.5
19.9 r
33.6
86.5
52.5
10.5
86.7
98.3r
120.6
49.9
-3.4
1.4
90.1
-15.7
79.5r
127.8 r
-10.2
-4.3
-33.7
-1.2'
414.4
878.7r
12.3
187.5
119.6
63.3
3.9
.7
19.9
25.5
-7.7
69.6
22.5
-4.r
37.3
88.8
48.9
4.7
84.2
141.0 r
120.5
18.4
8.2
-15.7
12.6 r
— 13.7 r
1.0 r
-12.7
-2.1
.1
5.1
311.3
l,227.5r
38.3
324.3
274.9
40.2
5.4
3.7
-4.7
16.8
-25.0
104.8
25.2
47.6r
63.8
87.5
80.9
-2.9
94.3
114.6 r
163.8
21.9
-9.1
20.2
14.9
50.4r
132.31"
-16.2'
14.0
.1
134.5
13.5
254.2
l,761.7r
21.1
305.2
312.0
-11.9
-.9
6.0
36.3
19.0
-12.8
76.9
20.4
56.4r
71.5
244.0
124.8
4.5
261.7
192.6
281.7
51.9
3.2
-5.1
6.8
1.6 r
264.5r
200.5r
19.lr
1.5
43.4
5.8
210.6
l,753.7r
25.7
308.2
317.6
-20.1
6.2
4.4
68.7
27.5
27.8
53.5
-4.2
45.0r
49.9
182.0
47.2
3.1
235.5r
273.8
215.8
94.9
.3
-2.6
-34.7'
136.3 r
360.2r
279.4r
-1.4
1.2
81.0
6.7
61.6
1,482.1'
59.8
166.6
259.4
-102.5
.4
9.2
85.3
32.7
27.8
68.2
26.7
68.7r
25.1
-67.0
117.2
3.1
251.7r
271.9
284.8
88.1
10.2
-2.2
- 135.9 r
99.4r
234.2r
242.8r
33.0r
.8
-42.4
11.2
385.3
l,688.9r
20.6
449.4
421.9
33.2
-12.4
6.6
58.1
27.5
27.8
36.8
-14.4
5.9 r
40.0
224.8
-13.0
3.1
275.9'
244.5
212.0
91.7
-12.1
-2.7
-6.1'
19.7 r
-8.8r
9.1'
-22.3r
1.4
2.4
- ! 1,7 r
138.7
2,052.2r
-42.2
548.7
457.7
42.0
42.6
6.3
20.2
18.8
27.8
30.7
-9.4
49.8r
58.2
354.5
-12.7
3.1
225.3r
182.2 r
94.4
114.4
12.3
-7.0
-30.5r
413.6r
-156.0r
-251.3r
90.4
2.6
2.3
6.5r
325.9r
1,483.4'
103.4
377.1
409.2
4.8
-42.2
5.4
50.2
35.6
18.9 r
57.2
-14.0
46.8r
55.3
208.8
-77.8
3.1
139.2 r
143.7 r
145.3
132.9
-6.0
-16.3
122.5 r
-42.6r
151.0
84.3
22.6
2.8
41.4
7.7
207.1
1,415.6
-3.9
484.6
505.6
-29.9
3.5
5.4
73.0
36.6
13.8
52.0
-18.1
24.7
20.7
-156.2
63.7
3.1
222.5
122.1
120.3
138.9
5.5
-2.5
38.1
176.8
-178.1
-186.6
3.7
3.8
1.0
4.5
195.0
1,580.8
27.3
369.3
332.8
30.9
-6.7
12.3
56.5
28.5
17.6
85.9
6.0
68.9
-32.1
244.9
46.3
3.1
158.9
225.4
120.4
81.4
-.5
-3.6
176.8
-100.2
-212.4
-219.4
-29.4
4.3
32.1
15.0
390.9
1,769.1
7.9
206.1
113.9
90.4
-3.3
5.1
43.0
25.4
.
18.1
79.7
6.3
21.4
8.5
299.4
72.2
3.1
264.5
307.4
269.9
43.4
2.0
-5.4
-52.9
149.2
l,243.7r
l,365.4r
l,530.1r
2,161.8r
2,234.6r
l,910.7r
2,319.6r
2,170.3r
l,659.8r
1,781.4
1,602.2
1,962.6
8.8
2.2
.7
35.3
10.0
-12.8
96.6
65.6
141.2
110.5
-16.0
147.4
127.5 r
26.7
45.8
158.7 r
6.2
6.4
34.6
505.4r
-6.3
-.5
,5 r
85.9
-51.6
15.7
97.2
114.0
145.4
41.4
-5.7
237.6
113.5 r
52.4
44.5
148.T
16.2
-5.3
-3.4
532. l r
.7
-.5
,5 r
108.9
-19.7
41.2
97.1
122.5
155.9
120.9
-83.9
265.1
132.lr
-8.7
-3.0
1.0'
86.5
17.6
151.4
44.7
130.6
249.1
169.7 r
-31.8
188.3
197.3 r
104.3 r
50.8
187.7 r
15.7 r
-7.1
— 8.0 r
749. lr
-5.4
.0
2.r
110.1
93.4
37.5
106.6
42.4
115.3
-80.7r
-39.3r
212.4
224.4r
128.2 r
42.1
199.0 r
47.3
-7.1
23.8r
1,436. l r
-8.5
-4.0
2.0r
69.4
-30.8
139.3
119.1
102.7
174.3
191.4 r
-3.0r
127.5
243.6r
29.1'
48.1
191.6'
A'
-7.2
-56.5r
534.8r
-7.0
-4.0
.0
52.7
-40.7
365.2
28.0
359.4
485.5
310.5r
1.5
.0
2.2r
258.5
,R
104.6R
59.3
201.2'
15.7
-49.9
-46.0
487.5 R
6.6
.0
.6'
2.0
-32.3
47.4
152.4
92.1
287.2
91.3
-174.6
274.6
29.0r
103.3
48.0
202.5r
12.0
-42.5
-41.4
841.6r
172.8
199.5 r
321.3r
57.6
177.3 r
16.8 r
-6.9
10.2 r
584.9r
306.1
228.2r
523.4r
49.8
217.6r
22.5r
-5.9r
-13.4'
701.5r
-8.8
-8.0
3.2
8.5
177.7
-65.0
130.3
108.4
48.2
130.4
-68.7
237.6
124.8
-99.8
59.7
220.4
31.6
-10.6
-2.4
1,105.4
.7
-4.0
4.2
-89.2
-61.3
49.2
238.5
141.5
241.9
238.2
-51.7
259.8
132.6
104.1
51.7
196.2
-6.0
-6.6
39.9
1,189.7
8.7
-4.0
.0
-80.0
-84.6
-49.4
298.8
64.9
402.8
-200.6
-282.0
176.3
100.5
14.4
55.6
129.3
19.3
-5.5
-18.2
1,063.7
2,744.3r
2,937.2r
3,249.7r
4,061.4r
4,519.7r
4,598.8r
4,183.4r
5,253.8r
4,544.7r
3,904.2
4,271.5
3,572.7
-.3
25.1
-3.1
25.7
21.1
— 166.0r
-A'
59.6
-3.3
2.4 r
23.1
-82.8r
-,2r
107.4
-19.9
63.2 r
28.0
— 84.7 r
-.1'
-6.4
3.4
61.3r
13.9
-56.4r
— ,7 r
66.5
3.5
30. r
3.2 r
—317.5 r
.6'
96.8
-4.8
— A'
25.0
— 101.4 r
.2'
21.3'
-7.0
133.2 r
3.0 r
—489.7 r
-2.2
92.5
-23.7
-225.9r
-6.4r
-157.6r
- 1.8 r
209.4r
24.4
561.2r
1.1'
-340.6r
-.7
-65.7
-4.3
27.6
7.4
-267.1
.9
-111.7
-18.3
119.3
-15.4
-38.6
-1.6
-132.1
68.5
-249.6
-9.9
21.7
-6.0
-3.8
.5
-4.0
—21.9'
-2.7
-3.9
-28.5r
2.6
-3.1
-40. r
-7.4
-.8
54.0r
-27.0
-.9
-64.6r
8.6
-.3
73.lr
-9.2
.0
161.7 r
28.7
.6
-2.9r
-2.6
1.5
-38.3
-2.0
1.9
-41.4
13.7
2.7
32.2
2,964.2r
3,190.9r
4,086.3r
4,688.9r
4,675.5r
4,434.9r
5,424.6r
4,058.0r
4,246.5
4,376.7
3,827.0
4
6
7
8
9
10
11
1?
N
14
15
16
17
18
19
7.0
71
7?
93
?4
?5
26
27
78
7.9
30
31
3?
33
Household
Nonfinancial corporate business
Nonfarm noncorporate business
State a n d local g o v e r n m e n t s
Federal government
Rest of the w o r l d
Financial sectors
M o n e t a r y authority
Commercial banking
U.S.-chartered b a n k s
F o r e i g n b a n k i n g offices in U n i t e d States
Bank holding companies
B a n k s in U.S.-affiliated a r e a s
S a v i n g s institutions
Credit u n i o n s
B a n k personal trusts a n d estates
Life insurance companies
Other insurance companies
Private pension f u n d s
State and local government retirement funds
Money market mutual funds
Mutual funds
Closed-end funds
Government-sponsored enterprises
F e d e r a l l y related m o r t g a g e p o o l s
A s s e t - b a c k e d securities issuers ( A B S s )
Finance companies
Mortgage companies
R e a l e s t a t e i n v e s t m e n t trusts ( R E I T s )
Brokers and dealers
Funding corporations
4.4
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
3 4 N e t flows t h r o u g h c r e d i t m a r k e t s
35
36
37
38
39
40
41
4?
43
44
45
46
47
48
49
50
51
52
53
54
Other
financial
sources
Official f o r e i g n e x c h a n g e
S p e c i a l d r a w i n g rights certificates
Treasury currency
Foreign deposits
Net interbank transactions
Checkable deposits and currency
S m a l l time a n d s a v i n g s d e p o s i t s
L a r g e time d e p o s i t s
M o n e y market fund shares
Security repurchase agreements
C o r p o r a t e equities
Mutual fund shares
Trade payables
S e c u r i t y credit
Life insurance reserves
Pension fund reserves
Taxes payable
I n v e s t m e n t in b a n k p e r s o n a l trusts
Noncorporate proprietors' equity
Miscellaneous
5 5 Total f i n a n c i a l s o u r c e s
56
57
58
59
60
61
Liabilities
not identified as assets
Treasury currency
Foreign deposits
N e t i n t e r b a n k liabilities
Security repurchase agreements
Taxes payable
Miscellaneous
( —)
Floats not included in assets ( —)
62 F e d e r a l g o v e r n m e n t c h e c k a b l e d e p o s i t s
63 O t h e r c h e c k a b l e d e p o s i t s
6 4 T r a d e credit
6 5 Total i d e n t i f i e d to s e c t o r s a s a s s e t s
14.1R
2,837.6r
111.0
1. D a t a in this table a l s o a p p e a r in the B o a r d ' s Z . 1 ( 7 8 0 ) quarterly statistical release, tables
F. 1 a n d F.5. F o r o r d e r i n g a d d r e s s , see inside f r o n t cover.
-71.1
-219.1
104.3
149.2
241.0
284. r
2. E x c l u d e s c o r p o r a t e e q u i t i e s a n d m u t u a l f u n d shares.
A40
1.59
DomesticNonfinancialStatistics • April 2001
SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1
Billions of dollars, end of period
1999
2000
Transaction category or sector
Q2
Q3
Q4
Ql
Q2
Q3
Q4
Nonfinancial sectors
1 Total credit market debt owed by
domestic nonfinancial sectors
By sector and instrument
2 Federal government
Treasury securities
3
4
Budget agency securities and mortgages
14,443.7 r
15,246.8 r
16,291.4 r
17,447.5 r
16,786.7 r
17,109.0 r
17,447.5 r
17,677.2 r
17,857.4 r
18,064.0
18,344.3
3,781.8
3,755.1
26.6
3,804.9
3.778.3
26.5
3.752.2
3.723.7
28.5
3,681.0
3,652.8
28.3
3,651.7
3,623.4
28.3
3,633.4 r
3,605.r
28.3
3,681.0
3.652.8
28.3
3,653.5
3,625.8
27.8
3,464.0
3,435.7
28.2
3,410.2
3,382.6
27.6
3,385.2
3,357.8
27.3
10,662.0 r
11,441.9'
12.539. l r
13,766.5'
13,135.0 r
13,475.6 r
13,766.5'
14.023.7'
14,393.5'
14,653.9
14,959.2
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
156.4
1,296.0
1.460.4
934.1
770.4
4.833. l r
3,719.0 r
278.4 r
748.6 r
87.1
1.211.6
168.6
1,367.5
1,610.9
1,040.5
839.5
5,150.8'
3,971.3 r
286.6 r
802.6 r
90.3
1,264.1
193.0
1,464.3
1.829.6
1,148.8
913.8
5,658.0 r
4,358.l r
307,4 r
896.0'
96.5
1.331.7
230.3
1,532.5
2.059.5
1,231.5
985.3
6,301.3 r
4,790. r
347.8 r
1.061.4'
102.0
1,426.2
232.4
1,510.0
1,970.0
1,178.5
956.0
5,947.8 r
4,563.8 r
324.8'
959.6 r
99.6
1,340.4
239.3
1,518.6
2,020.7
1,202.9
969.8
6,154.2 r
4,693.3 r
335. r
1,024.4 r
101.4
1,370.1
230.3
1,532.5
2,059.5
1,231.5
985.3
6,301.3'
4,790.1'
347.8'
1,061.4'
102.0
1,426.2
260.8
1,539.2
2.106.0
1,259.1
1,030.2'
6,412.4'
4,865.9'
355.2'
1,087.5'
103.7
1,416.0
296.8
1,551.6
2.144.5
1,307.2
1,059.0'
6,580.4'
4.990.6'
366.4 r
1.117.4'
106.0
1,454.0
307.0
1,550.3
2,190.6
1,311.6
1,063.6
6,735.2
5.108.6
374.2
1,145.1
107.3
1,495.6
278.4
1,567.8
2,234.5
1,334.2
1,100.4
6,875.0
5,209.4
383.3
1,174.3
108.0
1,568.8
17
18
19
20
21
22
By borrowing sector
Household
Nonfinancial business
Corporate
Nonfarm noncorporate
Farm
State and local government
5,222.5 r
4,376. l r
3,095.3'
1,130.9
149.9
1,063.4
5,559.9'
4,762.5 r
3,359.9 r
l,246.5 r
156.1
1.119.5
6,039.0 r
5,300.3 r
3,778.0 r
l,358.4 r
163.8
1,199.8
6,577.5'
5,936.8 r
4,294.0 r
1.473.8 r
169.0
1,252.1
6,260.7 r
5,636.0 r
4,062.0'
l,408.0 r
1,238.2
6,424.7 r
5,808.5 r
4.199.7'
1.440.2'
168.6
1,242.4
6,577.5'
5,936.8'
4,294.0'
1,473.8'
169.0
1,252.1
6,647.5'
6,118.9'
4,445.5
1.503.2'
170.2'
1.257.3
6.816.7'
6.311.0'
4,601.2'
1.534.5'
175.4'
1,265.7
6.985.8
6.405.0
4,667.0
1.561.1
176.9
1,263.1
7,169.1
6.510.8
4,740.8
1,590.9
179.1
1,279.3
23 Foreign credit market debt held in
United States
542.2
608.0
651.4
676.9
652.7
672.9
676.9
704.6
699.3 r
727.8
738.8
24 Commercial paper
25
26 Bank loans n.e.c
27 Other loans and advances
67.5
366.3
43.7
64.7
65.1
427.7
52.1
63.0
72.9
462.5
58.9
57.2
89.2
476.7
59.4
51.7
70.1
466.4
60.5
55.8
81.8
477.4
58.8
55.0
89.2
476.7
59.4
51.7
101.6
488.1
63.3
51.7
101.2
481.3'
64.7
52.1
109.8
499.2
67.7
51.2
120.9
495.4
70.7
51.8
5 Nonfederal
28 Total credit market debt owed by nonfinancial
sectors, domestic and foreign
14,985.9 r
15,854.7 r
16,942.8 r
18,124.4 r
166.1
17,439.4 r
17,781.9 r
18,124.4 r
18,381.8 r
18,556.7 r
18,791.9
19,083.1
Financial sectors
29 Total credit market debt owed by
financial sectors
4,824.5 r
5,445.2
6,519.1
7,607.0
7,073.3
7,346.8
7,607.0
7,744.3 r
7,964.4 r
8,160.1
8,430.8
30
31
32
33
34
35
36
37
38
39
By instrument
Federal government-related
Government-sponsored enterprise securities
Mortgage pool securities
Loans from U.S. government
Private
Open market paper
Corporate bonds
Bank loans n.e.c
Other loans and advances
Mortgages
2,608.2 r
896.9
1,711,3 r
.0
2,216.3
579.1
1,378.4
64.0
162.9
31.9
2,821.1
995.3
1,825.8
.0
2,624.1
745.7
1,555.9
77.2
198.5
46.8
3,292.0
1.273.6
2,018.4
.0
3,227.1
906.7
1,852.8
107.2
288.7
71.6
3,884.0
1,591.7
2.292.2 r
.0
3.723.0
1.082.9
2.074.6
92.9
395.8
76.7
3,580.7
1,398.0
2,182.7
.0
3,492.6
940.9
2,042.8
106.8
328.6
73.6
3,745.9
1.499.8
2,246.1
.0
3,601.0
963.4
2,091.1
105.2
365.4
75.9
3,884.0
1,591.7
2,292.2'
.0
3,723.0
1.082.9
2,074.6
92.9
395.8
76.7
3,940.1'
1.618.0
2.322.1'
.0
3,804.2
1,115.7
2,114.2
91.4
404.4
78.5
4,035.5
1,680.2
2,355.3'
.0
3,928.9
1,135.2
2,183.2
92.7
436.9
81.0
4,164.2
1,749.7
2,414.5
.0
3,995.9
1,151.6
2,239.3
92.5
430.2
82.5
4,316.7
1,824.8
2,491.9
.0
4,114.1
1,210.7
2,290.1
91.0
438.3
84.1
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 (REITs)
Funding corporations
113.6
150.0
140.5
.4
1.6
896.9
1,711.3 r
863.3
27.3
529.8
20.6
56.5
312.7
140.6
168.6
160.3
.6
1.8
995.3
1,825.8
1,076.6
35.3
554.5
16.0
96.1
373.7
188.6
193.5
212.4
1.1
2.5
1,273.6
2,018.4
1,398.0
42.5
597.5
17.7
158.8
414.4
230.0
219.3
260.4
3.4
3.2
1.591.7
2.292.2 r
1,632.0
25.3
659.9
17.8
165.1
506.6
202.7
205.5
241.6
1.8
4.0
1,398.0
2,182.7
1,539.9
30.2 r
639.2
17.8
160.3
449.7 r
224.2
211.8
255.4
2.5
4.3
1,499.8
2,246.1
1.599.1
34.6
628.5
16.3
162.2
462.0
230.0
219.3
260.4
3.4
3.2
1,591.7
2,292.2'
1,632.0
25.3
659.9
17.8
165.1
506.6
242.2
221.4
266.9
2.6
3.0
1,618.0
2,322.1'
1,665.8
36.4
670.7
17.1
167.9
510.1
265.4
229.3
280.7
2.9
2.7
1,680.2
2,355.3'
1,706.4
36.2
699.2
17.8
170.4
517.9
265.2
236.9
276.0
3.1
2.7
1,749.7
2,414.5
1,753.6
42.6
716.5
17.7
169.8
511.9
266 8
242.5
287.7
3.4
2.5
1,824.8
2,491.9
1,837.8
40.9
734.8
17.9
172.4
507.4
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
19,810.4 r
21,300.0 r
23,461.9 r
25,731.4 r
24,512.7 r
25,128.7 r
25,731.4 r
26,126.1 r
26,521.1 r
26,952.0
27,513.9
803.0
6,389.9 r
1,296.0
3,205.1
1,041.7
998.0
4,865. l r
1,211.6
979.4
6,626.0
1,367.5
3,594.5
1,169.8
1,101.0
5,197.7 r
1,264.1
1,172.6
7,044.3
1,464.3
4.144.9
1.314.9
1.259.6
5.729.6 r
1,331.7
1,402.4
7.565.0
1.532.5
4,610.8
1.383.8
1.432.7
6,378.0 r
1.426.2
1,243.3
7,232.4
1,510.0
4.479.2
1,345.7
1,340.3
6,021.4 r
1,340.4
1,284.5
7,379.2'
1,518.6
4,589.1
1,366.9
1,390.1
6.230.1'
1,370.1
1,402.4
7,565.0
1,532.5
4,610.8
1,383.8
1,432.7
6,378.0'
1,426.2
1,478.1
7,593.6'
1,539.2
4,708.3
1,413.7
1,486.3'
6,490.8'
1,416.0
1.533.3
7,499.4'
1.551.6
4,808.9'
1,464.6
1,548.0'
6,661.3'
1,454.0
1,568.3
7,574.4
1,550.3
4,929.0
1,471.7
1,545.0
6,817.7
1.495.6
1,610.0
7,701.8
1,567.8
5,019.9
1,495.9
1,590.5
6,959.1
1,568.8
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables
L.2 through L.4. For ordering address, see inside front cover.
Flow of Funds
A41
SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1
1.60
Billions of dollars except as noted, end of period
2000
1999
Transaction category or sector
1997
1996
1998
1999
Q2
Q3
Q4
QL
Q2
Q3
Q4
CREDIT MARKET DEBT OUTSTANDING2
1 Total credit market assets
?
4
6
Domestic nonfederal nonfinancial sectors
Household
Nonfinancial corporate business
Nonfarm noncorporate business
State and local g o v e r n m e n t s
7 Federal government
8 R e s t of the w o r l d
9
Monetary authority
11
Commercial banking
U.S.-chartered banks
15
16
17
18
19
70
71
77
74
75
30
31
37
33
25,731.4r
24,512.7r
25,128.7r
25,731.4r
26,126. lr
26,521.1r
26,952.0
27,513.9
3,032.R
2,119. lr
3,078.7'
3,413.3'
3,291.4'
3,413.3'
3,343.6'
2,302.5'
290.6'
37.5
2,191.8'
2,302.5'
290.6'
2.233.7'
288.9'
3,355.1'
2,224.0'
296.5'
3,317.0
2,031.9'
3,233.9'
2.133.6'
3,326.4
2,171.2
312.4
270.2
38.0
257.5
35.9
604.8
200.2
605.0
205.4R
B a n k s in U . S . - a f f i l i a t e d a r e a s
Savings institutions
37.8
928.5
305.3
207.0
232.0
1,657.0
491.2
Life insurance companies
Other insurance companies
Private pension funds
State a n d local g o v e r n m e n t
516.1
27.4
933.2
288.5
Credit unions
B a n k personal trusts and estates
retirement
funds
Mutual funds
Closed-end funds
Government-sponsored enterprises
Federally related mortgage pools
Asset-backed securities issuers ( A B S s )
Finance companies
Mortgage companies
Real estate investment trusts ( R E I T s )
1,751.1
627.0R
568.2
515.3
674.6R
632.0
634.3
820.2
721.9
901.1
101.1
807.9
98.3
902.2
1,825.8
1,711.3R
773.9
544.5
41.2
30.4
937.7
566.4
32.1
121,0R
50.6
182.6
166.7R
19,810.4r
21,300.0r
167.7
Brokers and dealers
Funding corporations
2,257.3
15,862.5R
431.4
4,031.9
3,450.7
475.8
22.0
34.1
Bank holding companies
Money market mutual funds
76
77
78
79
23,461.9r
2,974.7R
2,076.4R
393.1
3,707.7
3,175.8
F o r e i g n b a n k i n g o t f i c e s in U n i t e d S t a t e s
N
14
21,300.0r
1,926.6
14,651.5R
10
P
19,810.4r
271.5
35.9
739.4
219.1
2,539.8
17,624.3'
452.5
4,335.7
3.761.2
504.2
26.5
43.8
964.8
324.2
194.1
1,828.0
535.7
731.0'
703.6
782.8
258.0
2,678.0
19,382.0'
268.5
36.9
794.8
225.0
2,621.3
478.1
4,643.9
18,432.5'
485.1
4,383.4
4,078.9
484.1
3,847.6
465.7
32.7
25.1
48.3
1,033.4
351.7
45.0
222.0
1,886.0
531.6
775.9'
753.4
965.9
1,025.9
102.8
1,147.8
1,163.9
2,018.4
1,219.4
618.4
1,399.5
2,292.2'
35.3
45.5
189.4
1,011.4
341.0
208.0
1,869.6
537.5
762.0'
728.9
1,001.8
1,083.7
280.5'
37.1
781.9
260.7
2,718.1
18,858.5'
489.3
4,488.3
3,944.3
475.3
22.0
46.7
1,030.8
348.5
215.0
1,880.4
533.9
763.5'
738.9
1,049.7
37.5
782.8
258.0
2,678.0
19,382.0'
478.1
4.643.9
4,078.9
484.1
32.7
48.3
1,033.4
351.7
222.0
1,886.0
531.6
775.9'
753.4
1,147.8
1,083.0
105.1
1,073.1
105.9
1,268.5'
2.182.7
1,352.7
660.9
1,339.1'
2,246.1
1,409.8
678.2
1,399.5
2,292.2'
1,435.3
713.3
35.6
42.9
154.7'
35.6
45.3
158.8'
32.5
44.7
166.8'
35.6
42.9
154.7'
169.8'
305.8'
211.1'
214.9'
305.8'
23,461.9r
25,731.4r
24,512.7r
25,128.7r
25,731.4r
1,073.1
105.9
1,435.3
713.3
104.3
38.1
38.8
782.9
259.6
2.763.6'
795.8
261.6'
2.812.8'
19,759.3'
501.9
20,091.6'
505.1
4,847.4
4,295.4
4,725.0
4,171.3
482.0
22.1
478.1
23.0
49.6
1,044.5
51.0
1,061.7
359.0
226.7'
1.901.5
370.8
230.2'
1.913.4
528.0
787.6'
767.2
523.5
793.8'
772.4
1,159.4
1,217.1
1,053.7
106.7
1,426.6'
2,322.1'
1,463.9
747.0
34.1
2,182.1
301.5
39.8
793.7
262.7
2,862.0
20,510.3
511.5
4,931.0
4,368.2
487.5
21.3
54.0
1,080.9
378.6
234.6
1,936.5
525.0
811.0
764.4
1,212.5
1.073.9
107.4
1,088.1
108.2
1,483.8'
1,532.8
2,414.5
2,355.3'
1,495.8
780.6
35.5
38.2
1.534.3
795.5
35.4
40.8
802.0
266.4
2,957.7
20,963.3
511.8
5,003.1
4,419.3
508.1
20.5
55.3
1,089.1
383.2
239.1
1,954.7
526.6
816.4
766.5
1,297.1
1,099.2
109.0
1,602.9
2,491.9
1.611.2
812.4
35.9
37.3
243.5
334.6
36.0
225.8
306.7'
189.3
354.2'
26,126.1r
26,521.1'
26,952.0
27,513.9
44.9
3.2
46.1
2.2
23.2
770.3
23.2
750.3
200.3
1,385.7
198.5
1,413.7
2,864.2
38.8
201.1
351.6
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
34
Total credit m a r k e t debt
Other
liabilities
35 Official foreign e x c h a n g e
36 Special d r a w i n g rights certificates
37 Treasury currency
38
39
Foreign deposits
40
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
41
4?
43
44
45
46
Security credit
Life insurance reserves
Pension fund reserves
Liabilities
not identified
as assets
57 Treasury currency
58 Foreign deposits
59 Net interbank transactions
60 Security repurchase agreements
61 T a x e s p a y a b l e
L,809.3R
9.2
19.9'
50.1
6.2
50.9
8.2
20.9'
20.4'
694.9
22.1'
1,484.8
2,671.2
1,353.1
2,644.6
1,353.8
2,665.9
1,484.8
2.671.2
168.1
1,392.9
2,728.0
936.1
1.578.8
1,083.4'
4,553.4
809.0
1,393.5
957.1'
4,049.1
837.5
1,444.9
999.4'
936.1
1,578.8
1,083.4'
4,553.4
966.5
1,666.0
1,155.8
4,863.3
676.6'
783.9
803.7
799.9
676.6'
718.3
8,760.0'
783.9
9,747.7'
1,970.3
2,167.6'
167.2'
1,130.4
151.5
1,001.0
46.5
4.2
21.4'
790.4
725.8
204.5
1,333.4
913.7
49.4
6.2
20.9'
712.3
199.6
725.8
204.5
3,610.5
572.3
50.1
6.2
207.1
639.0
189.0
2,626.5
805.5
1,329.7
52.1
7.2
20.9'
586.5'
749.8
3,931.5
593.1'
756.2
9,294.3'
8,959.6'
9,747.7'
9,952.3'
2,030.8'
162.4
2,097.9'
167.5
1,019.0
7,448.5'
2,167.6'
167.2'
1,130.4
7,787.5'
2.198.3'
180.5'
1,163.0'
7,915.4'
61,507.5r
62,947.3r
6,349. L
7,237.9'
7,787.5'
1,061.0
7,431.5'
45,502.9r
50,097.8r
55,409.7r
61,507.5r
58,017.0r
58,395.6r
21.4
10,255.8
3,889.2
21.1
13,201.3
4,164.4
21.6
15,427.8
4,414.7
19,576.3
4,704.5
20.8
17,060.4
21.3
16,214.9
-6.R
437.0
-6.3'
538.3
-32.2
-6.4'
548.2
-27.0
172.9'
92.6
-1,889.8'
234.3'
102.0
-2,434.3'
R
21.4
4,548.9'
4,623.1
21.4
21.4
19,576.3
4,704.5
20,232.0
4,732.2
792.6'
215.9
1.409.7
2,738.8
987.4
1,627.1
2,790.9
1,025.9
1,697.8
1,185.1
4,759.6
780.5
809.4
1,238.6
4.815.0
9,869.2'
2,229.9'
10,021.9
805.8
822.3
1,052.1
1,812.3
1,196.5
4,432.8
812.1
823.5
9.847.5
2,314.1
180.0'
1,124.1'
2,269.9
184.1
1,122.3
8,164.1'
8,609.7
1,039.0
8,777.6
63,467.3r
64,783.9
65,103.6
21.5
19.258.1'
4,779.2'
21.4
19,066.7
4.835.0
21.6
17,168.8
4,915.7
184.1
(—)
Miscellaneous
63
64
Federal government checkable deposits
in assets
469.1
665.0
7,725.5R
1,941,4R
60.1
139.5
942.5
6,670.6R
123.8
871.3
62
included
713.4
1,042.5
822.4
2,989.4
358.1
610.6
6,582.4R
Financial
assets
not included
in liabilities
(+ )
54 G o l d and special d r a w i n g rights
55 C o r p o r a t e equities
5 6 H o u s e h o l d e q u i t y in n o n c o r p o r a t e b u s i n e s s
not
1,286.1
2,474.1
701.5
2,342.4
Total liabilities
Floats
19.3'
619.7
219.4
2,377.0
590.9
886.7
Trade payables
50 Taxes payable
51 I n v e s t m e n t i n b a n k p e r s o n a l t r u s t s
52 Miscellaneous
53
48.9
9.2
18.9R
521.7
240.8
1,244.8
Net interbank liabilities
47
48
49
53.7
9.7
-10.6
109.8'
76.9
-1,517.9'
-7.1'
615.0
-25.5
264.4'
95.3'
-2,884.0'
-6.6'
584.7
-10.6
291.6'
112.2
-2,673.2'
-6.6'
591.5
-13.2
325.0'
96.5'
-2,988.0'
-7.1'
615.0
-7.6'
667.4'
-7.9'
650.9'
-7.6
623.0
-25.5
264.4'
-13.9
411.3'
89.1'
-3,029.7'
-11.6
416.5'
103.0'
-3,035.6'
-17.6
445.3
93.7
-2,805.8
95.3'
-2,884.0'
-8.0
590.0
-4.1
379.0
96.2
-3,126.0
(— )
Other checkable deposits
65
Trade credit
66
Total identified to sectors as assets
-8.1
26.2
-1.6
30.1
171.8R
133.5'
60,380.0r
68,457.3r
-9.9
23.1
22.3
145.9'
22.1
19.2'
14.5
22.3
18.7
22.5
15.5
-2.3
24.0
36.2'
145.9'
94.7'
62.3'
51.5
133.3
87,593.4r
81,320.0r
81,209.2r
87,593.4r
89,709.3r
89,331.2r
90,316.8
89,127.7
94.5
76,743.2r
1. D a t a i n t h i s t a b l e a l s o a p p e a r i n t h e B o a r d ' s Z . l ( 7 8 0 ) q u a r t e r l y s t a t i s t i c a l r e l e a s e , t a b l e s
L.L a n d L . 5 . F o r o r d e r i n g a d d r e s s , s e e i n s i d e f r o n t c o v e r .
2.
-12.4
-10.2
-9.9
-6.5
Excludes corporate equities and mutual f u n d shares.
-5.2
-7.8
-3.9
A42
2.10
Domestic Nonfinancial Statistics • April 2001
NONFINANCIAL BUSINESS ACTIVITY
Selected Measures
Monthly data seasonally adjusted, and indexes 1992=100, except as noted
2001
2000
1998
Measure
1999
2000
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.?
134.0
139.6
147.5
147.2
147.9
147.6
148.6
149.0
148.7 r
148.2 r
147.4
147.0
127.2
129.3
118.4
147.1
121.0
145.7
131.2
133.3
120.8
153.8
125.1
154.5
136.2 r
138.8
123.0 r
166.0
128.8 r
167.9 r
135.5
137.5
123.5
163.1
129.4
168.4
136.0
138.3
124.2
164.3
129.0
169.4
135.8
138.1
122.9
166.3
128.7
169.0
136.6
139.2
123.8
167.9
128.8
170.5
136.7
139.3
123.8
168.3
128.6
171.3
136.3
138.8
122.7
169.1
128.7 r
171.r
136.4
139.0 r
122.7 r
169.8 r
128.4
169.6 r
135.9
138.5
122.4
169.0
127.8
168.4
135.0
137.7
121.0
169.4
127.0
168.7
138.2
144.8
153.6
153.1
153.8
153.7
154.6
155.1
154.9 r
154.0 r
152.4
152.3
81.3
80.5
81.3
81.9
82.0
81.6
81.7
81.7
81.2
80.4
79.2
78.9
10 Construction contracts 3
122.6 r
135.l r
140.6
137.0'
145.0 r
138.0 r
137.0 r
141.0 r
146.0"
138.0 r
138.0
145.0
11 Nonagricultural employment, total 4
12
Goods-producing, total
Manufacturing, total
13
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
123.5 r
103.0 r
99.0 rr
130.0
186.5
184.6
152.3
182.7
178.4
126.3 r
103.3 r
97.6 r
98.4 r
133.7 r
196.6
196.9
157.4
191.9
194.7
128.9
104.0
97.0
97.6
136.8
209.0
210.1
164.2
202.0
210.0
129.1
104.1
97.3
97.9
137.0
207.9
208.4
162.9
201.3
208.5
129.1
104.2
97.3
97.9
137.1
208.9
209.8
164.3
202.1
209.3
129.1
104.4
97.6
98.4
137.0
209.5
211.0
165.8
202.5
211.1
129.0
103.9
97.0
97.5
137.0
210.1
211.3
164.9
202.9
211.0
129.2
103.9
96.7
97.2
137.3
212.5
212.7
165.1
205.2
212.7
129.3
104.0
96.7
97.1
137.3
212.1
214.0
166.6
204.4
212.5
129.3
103.9
96.6
97.0
137.4
212.6
214.8
166.9
204.7
211.3 r
129.3
103.6
96.3
96.6
137.6
213.5
215.2
165.6
205.5
211.5
129.6
103.9
96.0
96.1
137.8
n.a.
n.a.
n.a.
n.a.
213.1
Prices''
21 Consumer ( 1 9 8 2 - 8 4 = 100)
22 Producer finished goods ( 1 9 8 2 = 1 0 0 )
163.0
130.7
166.6
133.0
172.2
138.0
171.5
137.3
172.4
138.6
172.8
138.6
172.8
138.2
173.7
139.4 r
174.0
140.0
174.1
139.9
174.0
139.7
175.1
141.2
1 Industrial production'
2
3
4
5
6
7
8
Market
groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
Industry
groupings
Manufacturing
2
9 Capacity utilization, manufacturing (percent) . .
100.0
1. Data in this table appear in the B o a r d ' s G.17 (419) monthly statistical release. T h e data
are also available on the B o a r d ' s web site, http://www.federalreserve.gov/releases/gl7. The
latest historical revision of the industrial production index and the capacity utilization rates
was released in December 2000. The recent annual revision is described in an article in the
March 2001 issue of the Bulletin. For a description of the methods of estimating 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, and the references cited therein. 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 f r o m the Federal
Reserve, U.S. Department of Commerce, and other sources.
2.11
3. Index of dollar value of total construction contracts, including residential, nonresidential, and heavy engineering, f r o m McGraw-Hill Information Systems Company, F.W. Dodge
Division.
4. Based on data from the 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 f r o m 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.
LABOR FORCE, EMPLOYMENT, A N D UNEMPLOYMENT
Thousands of persons; monthly data seasonally adjusted
2000
1998R
Category
1999R
June
HOUSEHOLD SURVEY
1
Civilian labor force
Employment
Agriculture
Unemployment
4
5
Rate (percent of civilian labor force)
6
Nonagricultural payroll e m p l o y m e n t 4
ESTABLISHMENT SURVEY
7
8
9
10
Manufacturing
Mining
Contract construction
Transportation and public utilities
11
1?
13
14
Finance
Service
Government
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
137.673
139,368
140,863
140,757
140,546
140,724
140,847
141,000
141,136
141,489
141,955
128,085
3,378
130.207
3,281
131,903
3,305
131,870
3,313
131,603
3,295
131,622
3,317
131,954
132,223
3,241
132,302
3,176
132.562
3,274
132,819
3,179
6,210
5,880
4.2
5,655
4.0
5.574
5,648
4.0
3.9
5,536
3.9
5,658
4.0
5,653
4.0
5,785
4.1
5,537
4.5
4.0
5,956
4.2
125,865
128,786
131,417
131,647
131,607
131,528
131,723
131,789
131,842 r
131,861
132,129
18,378
R
18,304
18,239
540
545
6,716
6,861
7,086
30,341
7,083
3,356
DATA
18.493
18,548
590
535
538
539
6,020
6,404
6,687
6,668
538
6,670
6.611
6,826
6,993
29,095
29,712
30,191
6,985
30,171
7,389
7.569
7,618
7,588
37,533
39,027
40,384
19,823
20,170
20,570
18,805
18,543
18,437
1. Beginning January 1994, reflects redesign of current population survey and population
controls f r o m 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.
July
DATA1
2
~>
3
2001
2000
18,432
18.380
18,360
537
539
542
6,720
7,037
6,745
6,734R
7,010
6,675
6,941
7,046
7,060
30,246
30,253
7,608
30,249
7,622
30,280
7,586
40,401
40,403
40,572
40,685
40,696
40,764
20.802
20,606
20,510
20,491
20,464
20.405 r
7.638
541
30,331R
7,647R
30,363
7,660
7,689
40,800
20,414
40,881
20,468
4. Includes all full- and part-time employees who worked during, or received pay for, the
pay period that includes the twelfth day of the month; excludes proprietors, self-employed
persons, household and unpaid family workers, and members of the armed forces. Data are
adjusted to the March 1992 benchmark, and only seasonally adjusted data are available at this
time.
SOURCE. Based on data f r o m U.S. Department of Labor, Employment and Earnings.
Selected Measures
A43
OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1
2.12
Seasonally adjusted
2000
2000
2000
Series
Ql
Q2
Q4 r
Q3
Output ( 1 9 9 2 = 1 0 0 )
Ql
Q2
Q3
Q4 r
Capacity (percent of 1992 output)
Ql
Q2
Q3
Q4 r
Capacity utilization rate (percent) 2
industry
144.4
147.1
148.4
148.1
176.1
178.1
180.1
182.1
82.0
82.6
82.4
81.3
2 Manufacturing
150.1
153.0
154.4
153.8
184.6
186.9
189.2
191.5
81.3
81.9
81.7
80.3
Primary processing 3
Advanced processing 4
173.5
137.3
178.6
139.0
180.3
140.3
178.7
140.0
203.0
172.7
206.9
174.1
211.2
175.2
216.0
176.2
85.4
79.5
86.4
79.8
85.4
80.1
82.7
79.5
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
186.7
122.4
136.1
135.0
137.4
242.2
476.7
171.8
192.9
120.3
137.0
136.1
138.2
249.4
535.1
175.9
196.7
117.0
133.4
130.5
137.0
257.3
581.1
170.8
196.4
113.0
126.6
121.2
133.0
261.3
607.9
159.6
228.5
147.0
153.0
152.8
153.2
296.3
552.1
207.0
233.3
147.5
153.3
153.1
153.4
304.5
591.7
208.2
238.3
147.9
153.4
153.4
153.4
311.1
639.1
209.2
243.6
148.4
153.5
153.6
153.4
317.3
694.1
210.1
81.7
83.3
88.9
88.4
89.7
81.7
86.3
83.0
82.7
81.6
89.4
88.9
90.1
81.9
90.4
84.5
82.5
79.1
87.0
85.1
89.3
82.7
90.9
81.7
80.6
76.1
82.5
78.9
86.7
82.3
87.6
75.9
93.7
92.9
93.5
94.7
130.7
130.7
130.4
130.2
71.7
71.1
71.7
72.8
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
116.3
104.0
117.6
124.8
141.6
116.0
116.7
103.3
117.9
125.8
140.9
118.3
116.2
99.8
114.0
125.4
137.6
117.3
115.3
94.4
114.9
124.5
134.1
115.8
143.8
124.4
136.9
161.9
151.5
123.2
144.1
123.9
137.2
163.0
151.6
123.2
144.4
123.3
137.5
164.1
151.9
123.2
144.6
122.8
137.9
164.8
152.3
123.1
80.9
83.6
85.8
77.1
93.5
94.1
80.9
83.4
85.9
77.2
93.0
96.0
80.5
80.9
82.9
76.4
90.5
95.3
79.7
76.9
83.3
75.6
88.1
94.0
99.4
117.4
120.5
100.0
100.6
121.0
123.9
100.1
120.7
124.3
125.5
128.0
116.7
131.2
129.5
116.5
132.3
130.9
116.3
133.4
132.3
115.8
134.5
133.8
85.2
89.5
93.1
85.8
91.2
94.9
86.6
90.7
93.7
86.4
93.3
95.6
1973
1975
Previous cycle 5
High
Low
High
1 Total
3
4
6
7
8
9
10
11
1?
13
14
15
16
17
18
19
70 Mining
Utilities
Electric
22
?1
Low
Latest cycle 6
High
Low
Jan.
2001
2000
2001
Aug.
Sept.
Oct.'
Nov. r
Dec. r
Jan. p
Capacity utilization rate (percent) 2
1 Total
industry
89.2
72.6
87.3
71.1
85.4
78.1
81.9
82.6
82.4
82.0
81.4
80.7
80.2
2 Manufacturing
88.5
70.5
86.9
69.0
85.7
76.6
81.2
81.7
81.7
81.2
80.4
79.2
78.9
91.2
87.2
68.2
71.8
88.1
86.7
66.2
70.4
88.9
84.2
77.7
76.1
85.1
79.4
85.4
80.2
85.2
80.2
84.5
79.9
82.8
79.7
81.0
78.8
80.5
78.6
63.9
60.8
45.1
37.0
73.1
75.5
73.7
71.8
74.2
81.6
83.7
89.2
88.3
90.4
82.6
78.1
86.3
84.5
88.5
82.7
78.9
87.3
86.0
89.0
81.7
77.5
84.1
80.6
88.2
80.8
75.9
82.9
79.3
87.1
79.4
75.1
80.5
76.8
84.8
78.7
74.2
79.9
76.3
84.2
72.3
75.0
55.9
81.4
85.1
83.6
82.9
90.8
83.1
83.1
90.2
83.8
83.0
88.5
79.7
82.4
87.4
76.2
81.7
86.9
72.0
81.1
86.3
67.1
3
4
Primarv processing 3
Advanced processing 4
5
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
89.2
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
60.1
84.6
93.6
92.7
95.2
89.3
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
78.4
67.6
81.9
66.6
87.3
79.2
71.8
71.7
70.7
71.9
73.3
73.2
73.6
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
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
80.8
83.2
85.8
77.2
95.3
92.3
80.5
80.6
82.3
76.7
89.1
95.5
80.3
79.9
82.6
76.3
89.8
95.4
80.4
78.6
85.0
76.4
90.5
94.6
79.9
75.5
83.2
75.7
87.7
94.9
78.8
76.6
81.6
74.6
86.0
92.6
78.9
76.1
81.8
74.5
83.9
92.4
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
84.5
90.0
93.6
86.9
91.5
95.3
86.4
91.0
93.9
86.3
89.5
93.1
86.2
92.1
95.1
86.6
98.3
98.6
88.5
92.2
95.0
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20 Mining
71 Utilities
Electric
22
1. Data in this table appear in the B o a r d ' s G. 17 (419) monthly statistical release. The data
are also available on the B o a r d ' s web site, http://www.federalreserve.gov/releases/gl7. T h e
latest historical revision of the industrial production index and the capacity utilization rates
was released in December 2000. The recent annual revision is described in an article in the
March 2001 issue of the Bulletin. For a description of the methods of estimating industrial
production and capacity utilization, see "Industrial Production and Capacity Utilization:
Historical Revision and Recent Developments," Federal Resen'e Bulletin, vol. 83 (February
1997), pp. 6 7 - 9 2 , and the references cited therein. 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 2001
INDUSTRIAL PRODUCTION
Indexes and Gross Value 1
Monthly data seasonally adjusted
2000
1992
Group
portion
2001
2000
avg.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept. r
Oct. r
Nov. r
Dec.
Jan. p
Index (1992 = 100)
MAJOR
MARKETS
100.0
147.5
143.6
144.3
145.2
146.3
147.2
147.9
147.6
148.6
149.0
148.7
148.2
147.4
147.0
2 Products
Final products
3
4
Consumer goods, total
Durable consumer goods
5
6
Automotive products
Autos and trucks
7
8
Autos, consumer
9
Trucks, consumer
10
Auto parts and allied goods . . . .
11
Other
Appliances, televisions, and air
12
conditioners
13
Carpeting and furniture
14
Miscellaneous h o m e goods
15
Nondurable consumer goods
16
Foods and tobacco
17
Clothing
Chemical products
18
Paper products
19
20
Energy
21
Fuels
Residential utilities
22
60.5
46.3
29.1
6.1
2.6
1.7
.9
.7
.9
3.5
136.2
138.8
123.0
160.7
153.0
166.9
114.0
221.6
131.4
167.1
133.3
135.1
122.1
162.9
156.9
171.4
116.5
228.2
134.3
167.6
134.2
135.9
122.8
162.6
154.8
169.0
116.3
223.7
132.5
169.1
134.4
136.0
122.2
162.1
155.3
170.3
115.1
227.3
131.9
167.7
135.3
137.2
123.2
164.7
157.6
173.7
118.5
230.7
132.7
170.6
135.5
137.5
123.5
163.8
157.9
175.7
119.7
233.7
130.6
168.5
136.0
138.3
124.2
164.4
157.8
174.8
118.1
233.2
131.6
169.8
135.8
138.1
122.9
158.7
149.4
160.5
113.6
209.8
131.6
166.7
136.6
139.2
123.8
160.0
153.8
169.8
120.3
221.8
129.1
165.2
136.7
139.3
123.8
162.8
156.7
172.7
120.5
227.1
132.1
167.7
136.3
138.8
122.7
157.3
148.0
159.1
107.8
212.0
130.2
165.4
136.4
139.0
122.7
154.4
143.6
153.0
103.0
204.3
128.2
164.0
135.9
138.5
122.4
152.0
138.7
144.1
94.3
194.7
129.1
164.0
135.0
137.7
121.0
147.7
132.1
132.9
99.0
169.8
128.9
162.0
1.0
.8
1.6
23.0
10.3
2.4
4.5
2.9
2.9
.8
2.1
332.5
129.6
120.4
114.2
110.7
84.9
136.9
111.1
116.7
112.9
118.6
328.3
129.2
122.7
112.7
110.3
86.3
132.9
109.1
113.1
108.4
115.1
336.1
129.7
122.7
113.5
110.6
87.5
133.5
109.6
116.2
111.0
118.5
332.3
128.3
122.1
112.9
110.8
87.2
134.9
108.3
110.7
114.9
107.4
341.1
131.8
122.7
113.6
110.9
87.5
136.5
108.2
113.6
112.1
113.8
334.6
130.8
121.6
114.1
110.3
86.8
138.5
109.0
116.0
113.1
117.1
348.2
130.1
120.5
114.8
110.8
85.1
139.3
111.6
117.0
113.4
118.5
322.3
131.5
121.3
114.5
111.0
85.6
137.4
112.4
114.9
112.6
115.6
325.0
128.6
119.7
115.2
111.4
84.2
139.4
112.4
117.1
113.1
119.0
340.5
131.9
118.1
114.7
110.5
83.1
138.4
112.4
118.4
115.8
119.1
332.5
129.8
117.5
114.5
110.4
82.7
139.0
113.8
115.5
113.0
116.2
334.8
125.4
117.1
115.0
110.6
83.2
138.4
112.5
119.7
115.5
121.6
338.3
126.4
115.6
115.1
109.5
82.0
137.7
111.8
126.0
111.5
134.8
327.5
125.5
115.4
114.3
109.5
82.5
138.1
112.5
119.0
111.6
123.0
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
166.0
194.2
312.3
1,157.6
144.5
127.7
145.6
145.7
76.2
131.8
116.5
158.7
185.2
284.8
979.1
140.4
130.9
153.8
138.6
77.1
121.1
138.5
159.8
187.0
289.2
1,019.5
142.1
130.6
154.2
138.5
75.9
124.6
133.8
161.3
188.9
293.5
1,044.0
142.2
131.5
154.0
142.9
76.0
126.7
131.7
162.8
191.1
298.8
1,062.0
142.9
131.3
156.5
146.7
75.5
126.7
127.2
163.1
191.6
302.5
1,087.8
143.4
129.0
153.9
145.8
75.5
130.3
122.9
164.3
192.8
307.0
1,130.8
143.8
130.1
152.9
142.8
76.3
130.8
121.9
166.3
195.0
313.9
1,182.8
144.4
127.6
141.5
148.1
77.9
136.2
116.8
167.9
197.8
322.1
1,229.0
147.7
126.8
142.8
144.8
76.1
137.1
115.5
168.3
199.5
327.2
1,264.1
146.5
127.7
144.2
149.3
73.7
132.8
109.3
169.1
200.0
332.3
1,286.4
146.9
121.6
131.4
154.2
75.3
136.5
98.8
169.8
200.4
336.7
1,305.0
146.9
121.8
130.4
148.8
77.0
138.9
90.9
169.0
199.3
336.8
1,318.3
145.5
117.4
122.0
153.4
77.2
139.1
88.0
169.4
198.9
340.7
1,335.6
146.1
113.6
113.8
149.0
78.4
149.4
89.5
Intermediate products, total
Construction supplies
Business supplies
14.2
5.3
8.9
128.8
143.0
120.4
127.8
142.6
119.0
128.9
143.4
120.3
129.5
144.6
120.6
129.3
144.4
120.4
129.4
143.1
121.3
129.0
143.4
120.5
128.7
143.8
119.8
128.8
142.7
120.6
128.6
143.1
120.0
128.7
142.3
120.7
128.4
140.9
121.0
127.8
139.5
120.8
127.0
138.8
120.0
37 Materials
38
Durable goods materials
Durable consumer parts
39
40
Equipment parts
41
Other
Basic metal materials
42
43
Nondurable goods materials
Textile materials
44
Paper materials
45
Chemical materials
46
47
Other
48
Energy materials
Primary energy
49
Converted fuel materials
50
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
167.9
227.7
165.1
479.2
134.5
128.5
113.8
97.8
115.8
117.1
112.8
103.4
98.0
114.6
162.0
213.4
164.3
404.2
135.3
130.7
116.2
100.4
118.2
119.7
114.6
102.6
97.2
113.9
162.4
215.4
163.2
416.6
134.8
128.8
115.3
101.9
116.7
118.6
113.0
102.1
96.2
114.6
164.7
220.0
164.9
434.2
135.9
131.1
115.6
102.2
118.1
118.6
113.5
102.5
97.7
112.3
166.1
222.7
162.2
451.9
135.7
131.9
115.2
101.1
118.7
118.1
112.6
103.5
98.8
113.0
168.4
227.6
169.9
466.8
135.9
130.8
115.7
100.9
117.5
119.8
112.4
103.3
98.3
113.7
169.4
230.3
165.7
486.2
135.9
130.7
115.2
101.7
118.1
118.4
112.3
103.1
98.4
112.4
169.0
230.5
158.3
499.9
135.3
128.5
113.9
97.9
114.9
117.0
113.7
102.9
98.7
110.8
170.5
233.8
168.3
505.7
134.7
127.5
112.8
99.3
112.8
116.8
110.2
104.2
98.9
115.1
171.3
235.7
169.0
512.1
135.5
129.2
112.7
95.9
113.8
116.3
112.0
104.3
98.5
116.6
171.1
235.0
168.5
515.9
133.7
125.9
113.4
94.0
117.2
115.9
114.0
103.9
97.8
117.2
169.6
233.1
161.9
522.4
131.9
124.4
110.6
89.3
113.5
113.8
111.1
104.5
98.2
118.7
168.4
230.6
155.4
530.2
128.8
121.0
108.8
88.9
109.2
111.4
112.4
105.8
99.2
120.7
168.7
231.2
149.0
542.1
129.2
120.3
108.8
88.6
111.1
110.9
111.8
106.0
100.4
117.7
97.1
95.1
147.2
146.3
143.0
142.2
143.8
143.0
144.8
143.9
145.7
144.9
146.7
145.8
147.5
146.5
147.5
146.9
148.4
147.4
148.7
147.7
148.8
147.8
148.4
147.7
147.9
147.3
147.7
147.4
98.2
27.4
26.2
140.5
120.6
123.8
137.2
119.5
123.2
137.8
120.3
123.5
138.6
119.6
123.6
139.6
120.5
124.4
140.4
120.7
124.4
141.0
121.5
125.0
140.5
120.9
123.9
141.4
121.3
124.5
141.6
121.2
124.4
141.2
120.7
123.6
140.7
121.0
122.9
140.0
121.1
121.6
139.5
120.2
121.1
12.0
200.1
188.9
190.8
193.1
195.2
196.1
197.6
201.5
204.5
206.3
208.5
209.1
209.0
209.6
12.1
29.8
158.4
188.5
153.6
180.8
154.4
181.5
155.7
184.6
157.4
186.0
157.3
189.3
157.6
190.7
158.6
190.3
160.3
191.8
161.2
193.0
161.2
192.8
161.3
190.4
160.0
188.1
159.3
188.4
1 Total index
23
24
25
26
27
28
29
30
31
32
33
34
35
36
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 .
Consumer
goods excluding energy
55
56 Business equipment excluding autos and
trucks
57 Business equipment excluding computer and
office equipment
58 Materials excluding energy
Selected Measures
2.13
INDUSTRIAL PRODUCTION
A45
Indexes and Gross Value 1 —Continued
Monthly data seasonally adjusted
Group
SIC
code
1992
proportion
2000
avg.
Apr.
May
July
Aug.
Nov. r
Sept.'
Index (1992 = 100)
MAJOR INDUSTRIES
100.0
147.5
143.6
144.3
145.2
146.3
147.2
147.9
147.6
148.6
149.0
148.7
148.2
147.4
147.0
85.4
26.5
58.9
153.6
178.0
139.3
149.2
171.9
136.8
149.9
173.0
137.1
151.3
175.5
137.9
152.2
177.1
138.5
153.1
178.7
139.1
153.8
180.1
139.4
153.7
179.4
139.5
154.6
180.3
140.5
155.1
181.2
140.8
154.9
181.1
140.5
154.0
178.8
140.4
152.4
176.2
139.2
152.3
176.3
139.0
" '24
25
45.0
2.0
1.4
193.4
118.2
142.9
185.1
122.9
138.9
186.3
122.3
140.7
188.9
121.9
139.3
191.0
121.6
140.7
193.0
120.5
143.0
194.6
118.7
141.9
194.7
118.6
142.6
196.9
115.5
143.8
198.4
116.8
146.6
197.6
114.8
147.2
196.7
112.7
145.1
194.9
111.5
144.6
194.4
110.3
143.9
32
33
331,2
331PT
333-6,9
34
2.1
3.1
1.7
.1
1.4
5.0
134.5
133.5
131.0
120.9
136.4
135.5
132.8
136.3
134.8
126.4
138.3
134.9
133.6
134.7
133.5
121.7
136.4
135.8
134.4
137.1
136.9
125.8
137.6
135.6
132.9
137.8
136.8
127.3
139.1
135.9
134.2
136.7
135.9
127.1
137.9
136.2
134.6
136.4
135.5
128.2
137.6
135.7
136.3
133.9
129.9
126.4
138.8
136.1
136.1
132.4
129.7
123.9
135.7
136.3
136.5
133.9
131.9
117.7
136.5
136.0
137.3
129.0
123.7
115.6
135.3
136.0
134.3
127.2
121.9
106.3
133.6
134.5
130.2
123.6
118.1
104.6
130.0
131.8
130.4
122.7
117.3
107.7
129.2
132.0
59 Total index
60 Manufacturing
Primary processing
61
62
Advanced processing
63
64
65
66
35
8.0
252.6
238.7
242.1
245.8
247.2
249.9
250.9
253.9
257.9
260.0
261.5
261.3
261.0
260.7
357
36
37
371
371PT
1.8
7.3
9.5
4.9
2.6
1,343.6
550.8
130.9
170.5
153.0
1,149.5
460.2
132.0
172.7
157.1
1,195.9
474.8
130.7
170.3
155.1
1,224.7
495.2
131.9
172.5
156.0
1,245.1
516.5
132.1
174.1
159.2
1,272.3
533.8
133.6
177.6
161.1
1,316.2
555.0
133.5
176.1
160.1
1,370.4
571.2
128.0
163.1
147.8
1,421.6
580.0
132.4
173.9
156.4
1,464.2
592.2
132.4
175.5
158.8
1,487.4
597.4
129.2
167.2
145.8
1,502.8
606.4
126.8
160.1
140.1
1,508.3
620.0
122.6
151.4
131.5
1,524.4
630.2
118.1
141.5
123.2
79
80
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
372-6,9
38
39
4.6
5.4
1.3
93.8
122.2
130.8
93.8
120.6
131.6
93.5
119.7
130.9
93.7
120.2
130.6
92.7
121.5
130.9
92.3
121.3
130.7
93.6
122.2
130.5
94.9
122.6
132.1
93.5
123.3
130.8
92.1
123.7
130.9
93.6
123.5
131.1
95.4
124.6
130.2
95.2
123.3
129.7
95.7
124.6
131.0
81
82
83
84
85
86
87
88
89
90
91
Nondurable goods
Foods
Tobacco products
Textile mil] products
Apparel products
Paper and products
Printing and publishing . . . .
Chemicals and products . . . .
Petroleum products
Rubber and plastic products .
Leather and products
"20
21
22
23
26
27
28
29
30
31
40.4
9.4
1.6
1.8
2.2
3.6
6.7
9.9
1.4
3.5
.3
116.9
114.6
95.3
100.1
91.6
116.1
110.0
128.3
117.0
142.2
69.7
116.0
113.3
99.8
103.6
93.4
117.5
108.9
124.8
113.7
143.2
72.1
116.3
114.1
97.4
103.8
94.3
117.4
108.9
124.9
115.5
143.2
71.4
116.6
114.9
94.3
104.4
94.1
117.8
109.7
124.9
118.9
143.0
70.6
116.7
114.7
95.6
104.4
94.6
118.4
109.1
125.2
117.2
143.5
70.0
116.7
114.2
95.3
102.6
93.0
116.5
109.9
126.3
118.9
142.6
70.5
116.7
114.9
93.8
103.1
91.2
118.8
109.1
125.9
118.8
143.5
69.3
116.3
115.0
95.8
101.4
92.0
114.9
110.0
124.8
117.0
144.4
70.0
116.3
115.1
96.6
99.4
90.7
113.3
110.4
125.9
117.6
142.1
68.8
116.0
114.6
94.5
98.4
89.5
113.7
110.9
125.4
117.4
141.9
69.8
116.3
114.8
93.7
96.7
89.2
117.1
111.6
125.8
116.5
141.3
68.6
115.5
115.0
93.1
92.7
89.1
114.8
111.2
124.8
116.8
138.9
68.5
114.0
113.3
94.2
93.9
87.5
112.6
110.1
123.0
114.0
136.3
67.0
114.2
113.3
95.2
93.1
87.9
113.0
110.4
123.0
113.7
137.9
67.4
'lO
12
13
14
6.9
.5
1.0
4.8
.6
99.9
96.8
108.9
95.0
126.1
98.6
101.3
106.8
93.5
124.9
99.1
99.1
102.6
94.0
131.7
100.4
99.7
110.1
94.6
133.4
99.9
98.8
112.6
94.0
130.4
99.6
95.7
112.2
94.3
123.9
100.4
97.5
113.6
94.8
127.7
100.5
92.9
110.3
95.7
124.4
101.0
95.8
109.3
96.3
125.0
100.4
99.3
107.0
95.7
123.7
100.1
96.3
110.2
95.1
124.6
99.9
93.6
108.6
95.4
120.5
100.2
93.0
106.1
96.2
118.4
102.3
92.9
110.7
98.2
119.5
491.3PT
492,3PT
7.7
6.2
1.6
121.0
124.0
111.2
117.8
120.8
106.8
119.5
121.0
113.1
114.7
119.7
98.3
118.7
122.8
104.4
121.6
125.2
108.7
121.7
124.8
110.5
119.1
121.1
111.0
122.1
126.1
108.4
121.7
124.7
110.5
120.0
124.2
105.8
123.8
127.3
111.5
132.6
132.4
129.6
124.7
128.0
112.8
80.5
152.6
147.9
148.7
150.1
151.0
151.7
152.6
153.2
153.5
153.9
154.3
153.8
152.6
153.1
83.6
145.4
141.9
142.3
143.6
144.4
145.2
145.8
145.4
146.2
146.5
146.2
145.4
143.7
143.6
1,048.5
1,097.8
1,140.2
1,193.1
1,248.0
1,281.6
1,310.3
1,334.8
1,361.0
1,393.6
1,424.7
67
68
69
70
71
72
73
74
75
76
77
78
92 Mining
Metal
93
94
Coal
95
Oil and gas extraction
96
Stone and earth minerals
97 Utilities
98
Electric
Gas
99
SPECIAL AGGREGATES
100 Manufacturing excluding motor
vehicles and parts
101 Manufacturing excluding
computer and office
equipment
102 Computers, communications
equipment, and
semiconductors
103 Manufacturing excluding
computers and
semiconductors
104 Manufacturing excluding
computers, communications
equipment, and
semiconductors
5.9
1,197.8
955.1
999.4
81.1
128.2
127.1
127.1
127.8
128.0
128.4
128.4
127.7
128.2
128.4
128.0
127.0
125.2
124.8
79.5
125.0
124.3
124.3
124.9
125.1
125.4
125.3
124.5
124.9
125.0
124.6
123.5
121.6
121.2
Gross value (billions of 1992 dollars, annual rates)
Major Markets
105 Products, total
2,001.9
2,860.5
2,828.5
2,846.9
2,853.1
2,868.9
2,872.7
2,883.5
2,865.7
2,882.9
2,889.1
2,867.4
2,866.0
2,847.3
2,813.1
106 Final
1,552.1
2,203.1
2,170.2
2,183.5
2,186.3
2,202.8
2,205.6
2,218.6
2,202.8
2,220.5
2,228.1
2,205.4
2,207.0
2,190.8
2,161.5
107
Consumer goods
108
Equipment
109 Intermediate
1,049.6
502.5
449.9
1,339.6
865.7
657.0
1,334.8
840.3
657.2
1,342.3
846.2
662.3
1,338.5
854.0
665.6
1,347.2
862.2
665.0
1,349.8
862.2
666.0
1,357.8
867.3
663.9
1,338.7
872.8
661.8
1,348.7
880.8
661.5
1,353.7
883.3
660.2
1,334.7
880.9
661.0
1,334.8
882.6
658.0
1,325.5
875.5
655.5
1,300.9
872.6
650.5
1. Data in this table appear in the Board's G.17 (419) monthly statistical release. The data
are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The
latest historical revision of the industrial production index and the capacity utilization rates
was released in December 2000. The recent annual revision is described in an article in the
March 2001 issue of the Bulletin. For a description of the methods of estimating 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, and the references cited therein. 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. Standard industrial classification.
A46
2.14
Domestic Nonfinancial Statistics • April 2001
HOUSING A N D
CONSTRUCTION
Monthly figures at seasonally adjusted annual rates except as noted
2000
Item
1998
1999
2000
Mar.
Apr.
May
June
July
Aug.
Oct. 1
Nov.1"
Dec.
1.518
1,157
361 r
1,537
1,226
31 l r
1,009
689
320 r
1,575'
l,273 r
302
231
1,546
1,191
355
1,529
1,232
297
1,011
691
320
1,546
1.212
334
213
1,598
1,183
415
1,564
1,233
331
1,006
685
321
1,589
1,293
296
196
1,507
1,158
349
1.568
1,304
264
1,008
687
321
1,551
1,260
291
176
Sept.
Private residential real estate activity (thousands of units except as noted)
NEW
UNITS
1 Permits authorized
One-family
Two-family or more
4 Started
5
One-family
6
Two-family or more
1
7 Under construction at end of period
8
One-family
9
Two-family or more
10 Completed
11
One-family
12
Two-family or more
13 Mobile homes shipped
2
3
Merchant builder activity in
one-family
units
14 Number sold
15 Number for sale at end of period'
Price of units sold
of dollars
16 Median
17 Average
1,612
1,188
425
1,617
1,271
346
971
659
312
1.474
1,160
315
374
1,664
1,247
417
1,667
1,335
332
993
679
314
1,636
1,307
329
348
1,570
1,181
389
1,594
1,263
330
978
658
320
1,606
1,282
324
250
1,597
1.238
359 r
1,630
1,327
303 r
1,031
706
325 r
1,728
1,375
353
287
1,559
1,164
395 r
1,652
1.310
342 r
1,029
703
326 r
1,660
1,354
306
271
1,511
1,150
36 r
1,591
1,258
333 r
1,023
697
326 r
1,705
1,377
328
265
1,528
1,127
401 r
1,571
1,227
344 r
1,024
696
328 r
1,545
1,222
323
262
1,511
1,117
394 r
1,527
1,201
326 r
1,020
691
329 r
1,531
1,216
315
251
1,486
1,140
346 r
1,519
1,229
290 r
1,016
692
324 r
1,612
1,266
346
249
886
300
907
326
906
312
947
321
865
305
875
308
827
312
914
311
860
313
924 r
309 r
940
312
900
316
1,034
308
152.5
181.9
160.0
195.8
168.5
206.4
165.7
205.3
163.1
207.5
165.0
200.1
159.9
197.7
168.6
202.4
165.0
200.4
171.5 r
208.4 r
176.0
215.0
174.0
212.1
158.6
208.1
4,959
5,198
5,057
5,170 r
4,910 r
5,190 r
5,220 r
4,800 r
5,240 r
5,210 r
5,100
5,330
4,980
128.4
159.1
133.3
168.3
139.0
176.2
134.7
171.5
136.1
173.3
137.6
176.0
140.2
178.9
143.3
177.7
143.2
183.0
141.6
178.6
138.6
176.9
139.5
176.5
139.7
178.5
(thousands
EXISTING UNITS (one-family)
18 Number sold
Price of units sold
of dollars
19 Median
20 Average
(thousands
Value of new construction (millions of dollars) 3
CONSTRUCTION
21
Total put in place
710,104
765,719
809,218
829,517
816,156
811,816
798,860
793,036
801,748
813,477
805,433
807,005
811,456
22
Private
Residential
Nonresidential
Industrial buildings
Commercial buildings
Other buildings
Public utilities and other
550,983
314,058
592,037
348,584
243,454
624,689
637,743
358,918
265,771
3 7 2 . 1 18
265,625
629,491
368.948
629,820
367,653
624,383
363,756
616,918
350,783
625,317
351,682
620,086
348,898
623,818
347,332
625,472
346,751
40,553
115,080
45,778
64,359
39,030
116.030
262,167
39,814
113,381
260,627
39,951
112,834
271,188
42,651
117,094
44,136
62,695
45,540
63,432
44,559
63,283
45,689
63,966
46,689
67,629
46,790
64,653
276,486
45,897
116,659
47,134
278,721
43,638
45,808
64,757
266,135
41,552
115,279
46,779
62,525
273,635
40,872
118,445
61,101
35,016
103,759
41,279
63,400
260,543
38,670
115,042
619,046
355,196
263,850
42,081
112,114
Public
Military
Highway
Conservation and development
Other
159,121
173,682
184,529
191.774
186,665
181,995
2,122
54,447
6,002
111,110
2,249
52,558
6,009
123,712
2,249
59,007
6,494
124,024
2,180
55,923
5,840
2,246
51,966
5,363
122,420
174,477
2,157
48,148
5.832
173,990
2,538
48,339
5,421
2,100
49,262
184,830
2,331
52,694
4,875
117,753
5,629
124,176
188,160
2,418
53,183
6,158
23
24
25
26
27
28
29
30
31
32
33
236,925
40,464
95,753
39,607
102,823
1. Not at annual rates.
2. Not seasonally adjusted.
3. Recent data on value of new construction may not be strictly comparable with data for
previous periods because of changes by the Bureau of the Census in its estimating techniques.
For a description of these changes, see Construction
Reports ( C - 3 0 - 7 6 - 5 ) , issued by the
Census Bureau in July 1976.
122,722
118,340
126,401
66,796
120,685
47,312
67.086
185,347
1,844
48,081
183,187
2,590
47,207
185,983
2,082
48,715
6,793
128,629
5,681
127,709
6,245
128,941
SOURCE. Bureau of the Census estimates for all series except (1) mobile homes, which are
private, domestic shipments as reported by the Manufactured Housing Institute and seasonally adjusted by the Census Bureau, and (2) sales and prices of existing units, which are
published by the National Association of Realtors. All back and current figures are available
from the originating agency. Permit authorizations are those reported to the Census Bureau
from 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 3 months earlier
(annual rate)
Change from 12
months earlier
Item
2001
2000
2000
2000
Jan.
2001
Jan.
Mar. r
CONSUMER
Change f r o m 1 month earlier
June 1
Sept.1"
Dec. r
Sept.
Oct.
Index
level,
Jan.
2001 1
Nov.
Dec.
Jan.
.2
.2
.6
175.1
.5
,3 r
.1
-.r
,2 r
.3
3.9
.3
.1
.4
170.9
132.5
183.5
144.8
205.7
,2 r
1.1
.8
3.8
.8
.3
141.2
138.4
101.9
156.5
140.2
PRICES2
(1982-84=100)
1
All items
7 Food
3 Energy items
4 All items less food and energy
Commodities
6
Services
PRODUCER
2.7
3.7
5.6
2.4
3.3
2.3
.5
.2
1.5
14.7
2.0
2.4
43.4
2.9
1.1
3.9
1.9
5.6
2.2
-.6
3.4
4.1
7.9
2.9
1.7
3.2
2.1
3.8
2.0
.0
3.2
.2
4.r
.3
.1
,5 r
3.0
2.9
17.8
2.6
.8
3.4
2.5
-.4
17.5
1.1
.4
4.8
2.5
21.6
2.4
1.3
7.9
2.7
53.1
.8
.9
2.3
3.3
6.5
1.3
1.5
2.0
-1.2
6.4
2.4
1.7
2.9
2.4
13.8
.3
.3
,7 r
.2
3.4 r
,3 r
,2 r
4.6
2.4
4.4
1.5
9.5
4.2
3.1
2.7
3.1
.3
1.2
-.6
.7
.0
-4.6
50.8
16.3
9.1
110.2
-7.4
15.0
84.9
9.9
-7.3
163.6
-11.9
-8.2
20.0
-8.8
36.0
64.0
-10.2
11.7R
-.1
.R
,4 R
.2
.1
- . R
,2 r
.3
,2 r
.3
PRICES
(1982=100)
Finished goods
Consumer foods
9
Consumer energy
10
Other consumer goods
11
Capital equipment
7
K
Intermediate
materials
12 Excluding foods and feeds
13 Excluding energy
materials
Crude
14 Foods
1 5 Energy
16 Other
1. Not seasonally adjusted.
2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence
measure of homeownership.
3.8 r
,8
r
-.r
.1
.3'
,8 r
,0 r
.0
.2
.0
-,lr
-.1
.2
.8
.0
.2
132.4
137.1
3.r
2.8'
-.6
1.3
-4.1
-2.3
3.4 r
14.8
,3 r
2.2
25.0
.5
105.3
193.4
138.7
.4
,7 r
1.6 r
- . R
-.4
,8 r
,2 R
.R
SOURCE. U.S. Department of Labor, Bureau of Labor Statistics.
A48
2.16
Domestic Nonfinancial Statistics • April 2001
GROSS DOMESTIC PRODUCT A N D
INCOME
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1999
Account
GROSS DOMESTIC
1998
1999
2000
2000
Q4
Qi
Q2
Q3
Q4
PRODUCT
1 Total
8,790.2
9,299.2
9,965.7
9,559.7
9,752.7
9,945.7
10,039.4
10,125.0
5,850.9
693.9
1.707.6
3,449.3
6.268.7
761.3
1.845.5
3.661.9
6,758.6
820.4
2,009.5
3,928.7
6,446.2
787.6
1,910.2
3,748.5
6,621.7
826.3
1,963.9
3,831.6
6,706.3
814.3
1,997.6
3,894.4
6,810.8
824.7
2,031.5
3.954.6
6,895.6
816.2
2.045.1
4,034.2
1,549.9
1,472.9
1.107.5
283.2
824.3
365.4
1,650.1
1.606.8
1.203.1
285.6
917.4
403.8
1,834.1
1,776.8
1.360.8
323.8
1,036.9
416.0
1,723.7
1.651.0
1,242.2
290.4
951.8
408.8
1,755.7
1,725.8
1,308.5
308.9
999.6
417.3
1,852.6
1,780.5
1,359.2
315.1
1,044.1
421.3
1.869.3
1,803.0
1,390.6
330.1
1.060.5
412.4
1,858.9
1.797.8
1,384.8
341.3
1,043.5
413.0
77.0
76.4
43.3
43.6
57.4
58.8
72.7
71.8
29.9
32.4
72.0
72.2
66.4
67.5
61.1
63.0
14 Net exports of goods and services
15
16
Imports
-151.5
966.0
1,117.5
-254.0
990.2
1.244.2
-370.4
1,099.0
1,469.4
-299.1
1,031.0
1,330.1
-335.2
1,051.9
1,387.1
-355.4
1,092.9
1,448.3
-389.5
1,130.8
1,520.3
-401.6
1,120.3
1,521.9
17 Government consumption expenditures and gross investment
Federal
18
State and local
1,540.9
540.6
1,000.3
1.634.4
568.6
1,065.8
1,743.4
595.4
1,148.0
1,688.8
591.6
1,097.3
1,710.4
580.1
1,1.30.4
1.742.2
604.5
1,137.7
1.748.8
594.2
1,154.6
1,772.2
603.0
1,169.2
Bx major txpe of
20 Final sales, total
21
22
Durable
23
Nondurable
24
Services
25
Structures
8.713.2
3,239.3
1,532.3
1,707.1
4,673.0
800.9
9.255.9
3,467.0
1,651.1
1.815.8
4.934.6
854.3
9,908.4
3,738.0
1,805.2
1,932.8
5,255.5
914.9
9,486.9
3,566.0
1,701.8
1,864.1
5.050.3
870.7
9.722.8
3,680.3
1,773.7
1,906.6
5,135.2
907.4
9,873.7
3,734.1
1,809.6
1,924.5
5,231.4
908.2
9,973.1
3,776.5
1,830.6
1,945.9
5.281.6
915.0
10,063.9
3,761.1
1,806.7
1,954.3
5,373.7
929.1
77.0
45.8
31.2
43.3
27.2
16.1
57.4
39.7
17.7
72.7
47.5
25.2
29.9
20.7
9.2
72.0
48.3
23.7
66.4
39.2
27.2
61.1
50.5
10.6
8,515.7
8,875.8
9,320.4
9,084.1
9,191.8
9,318.9
9,369.5
9,401.5
30 Total
7,038.1
7,469.7
n.a.
7,680.7
7,833.5
7,983.2
8,088.5
31 Compensation of employees
32
Wages and salaries
33
Government and government enterprises
34
Other
35
Supplement to wages and salaries
36
Employer contributions for social insurance
37
Other labor income
4,984.2
4,192.8
692.7
3,500.1
791.4
305.9
485.5
5.299.8
4.475.1
724.4
3.750.7
824.6
323.6
501.0
5,638.6
4,769.7
761.0
4,008.7
868.9
344.8
524.0
5,421.1
4,583.5
734.5
3,849.0
837.7
330.3
507.4
5,512.2
4,660.4
749.9
3,910.5
851.8
337.8
514.0
5,603.5
4,740.1
760.2
3,980.0
863.3
342.9
520.5
5,679.6
4,804.9
765.4
4,039.5
874.7
347.1
527.6
5,759.1
4,873.5
768.7
4,104.8
885.6
351.6
534.1
620.7
595.2
25.4
663.5
638.2
25.3
710.5
687.9
22.6
689.6
657.9
31.7
693.9
674.8
19.1
709.5
688.1
21.5
724.8
693.1
31.7
713.8
695.8
18.0
2
3
4
3
Bv source
Personal consumption expenditures
Durable goods
Nondurable goods
Services
6 Gross private domestic investment
7
Fixed investment
8
Nonresidential
9
Structures
Producers" durable equipment
10
II
Residential structures
12
13
Change in business inventories
Nonfarm
19
product
26 Change in business inventories
27
Durable goods
Nondurable goods
28
MEMO
29 Total G D P in chained 1996 dollars
NATIONAL
INCOME
38 Proprietors' income'
39
Business and professional 1
Farm'
40
n.a.
41 Rental income of persons"
135.4
143.4
140.4
146.2
145.6
140.8
138.1
136.9
42 Corporate profits'
43
Profits before tax 3
44
Inventory valuation adjustment
45
Capital consumption adjustment
815.0
758.2
17.0
39.9
856.0
823.0
-9.1
42.1
n.a.
n.a.
n.a.
33.6
893.2
870.7
-19.2
41.6
936.3
920.7
-25.0
40.6
963.6
942.5
-13.6
34.7
970.3
945.1
-4.5
29.7
n.a.
n.a.
n.a.
29.2
46 Net interest
482.7
507.1
n.a.
530.6
545.4
565.9
575.7
n.a.
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. U.S. Department of Commerce, Survey of Current Business.
Selected Measures
2.17
A49
PERSONAL INCOME A N D SAVING
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
2000
1999
Account
1998
1999
2000
Q4
Q2
QI
Q3
Q4
PERSONAL INCOME AND SAVING
1 Total personal income
7,391.0
7,789.6
8,281.0
7,972.3
8,105.8
8,242.1
8,349.0
8,427.1
2 Wage and salary disbursements
3
Commodity producing industries
4
Manufacturing
Distributive industries
6
Service industries
7
Government and government enterprises
4,190.7
1,038.6
756.6
949.1
1,510.3
692.7
4,470.0
1,089.2
782.4
1,020.3
1,636.0
724.4
4,769.1
1,153.1
815.9
1,107.1
1,748.1
760.8
4,578.3
1,111.2
795.1
1,049.4
1,683.2
734.5
4,660.4
1,130.9
802.8
1,070.9
1,708.6
749.9
4,740.1
1,147.1
813.1
1,095.7
1,737.2
760.2
4.804.9
1,161.4
821.4
1,118.1
1,760.1
765.4
4,870.9
1.172.9
826.3
1.143.6
1,786.5
767.9
485.5
620.7
595.2
25.4
135.4
351.1
940.8
983.0
578.0
501.0
663.5
638.2
25.3
143.4
370.3
963.7
1,016.2
588.0
524.0
710.5
688.0
22.6
140.1
396.6
1,033.7
1,067.7
622.4
507.4
689.6
657.9
31.7
146.2
380.2
989.0
1,027.4
592.8
514.0
693.9
674.8
19.1
145.6
386.9
1.011.6
1,046.9
607.9
520.5
709.5
688.1
21.5
140.8
392.6
1,031.3
1,066.1
624.3
527.6
724.8
693.1
31.7
138.1
399.7
1.042.9
1,074.2
627.2
533.9
713.8
695.8
17.9
136.0
407.2
1,049.2
1.083.6
630.4
8 Other labor income
9 Proprietors' income 1
10
Business and professional'
Farm'
11
12 Rental income of persons"
N Dividends
14 Personal interest income
15 Transfer payments
16
O l d - a g e survivors, disability, and health insurance benefits
17
LESS: Personal contributions for social insurance
18 EQUALS: Personal income
316.2
338.5
360.7
345.9
353.4
358.8
363.1
367.5
7,391.0
7,789.6
8,281.0
7,972.3
8,105.8
8,242.1
8,349.0
8,427.1
1,070.9
1,152.0
1,291.8
1,197.3
1,239.3
1,277.2
1,308.1
1,342.4
6,320.0
6,637.7
6,989.3
6,775.0
6,866.5
6,964.9
7,040.9
7,084.7
LESS: Personal outlays
6,054.7
6,490.1
6,998.4
6,674.1
6,855.6
6,944.3
7,054.7
7.138.9
22 EQUALS: Personal saving
265.4
147.6
-9.1
101.0
11.0
20.6
-13.8
-54.3
31,474.2
20,988.5
22,672.0
32,511.9 r
21,900.4 r
23,191.0
33,836.6
22,855.5
23,638.0
33,153.5
22,266.4
23,404.0
33.485.6
22,635.5
23,472.0
33.874.7
22,757.7
23,639.0
33,984.3
22,959.1
23,732.0
33,987.9
23,059.6
23,711.0
4.2
2.2
-.1
1.5
•2
.3
-.2
-.8
27 Gross saving
1,654.4
1,717.6
n.a.
1,746.3
1,777.0
1,844.5
1,854.7
n.a.
28 Gross private saving
1,375.7
1,343.5
n.a.
1,331.4
1,279.2
1,328.8
1,319.2
n.a.
79 Personal saving
30 Undistributed corporate profits'
31 Corporate inventory valuation adjustment
265.4
218.9
17.0
147.6
229.4
-9.1
-9.1
n.a.
n.a.
101.0
241.7
-19.2
11.0
262.7
-25.0
20.6
278.5
-13.6
-13.8
279.6
-4.5
-54.3
n.a.
n.a.
Capital consumption
3 ? Corporate
33 Noncorporate
624.3
265.1
676.9
284.5
739.3
301.0
694.8
288.7
711.5
294.1
731.1
298.7
750.0
303.3
764.8
307.8
278.7
137.4
88.4
49.0
141.3
99.5
41.7
374.1
217.3
92.8
124.4
156.8
106.8
50.0
n.a.
n.a.
99.8
n.a.
n.a.
116.8
n.a.
414.9
238.4
95.0
143.3
176.6
109.9
66.6
497.7
333.0
97.2
235.8
164.7
112.7
52.0
515.7
339.9
98.9
240.9
175.8
115.6
60.1
535.5
354.1
100.8
253.3
181.4
118.2
63.2
n.a.
n.a.
102.3
n.a.
n.a.
120.6
n.a.
41 Gross investment
1,629.6
1,645.6
1,678.5
1,699.3
1,771.9
1,752.8
47 Gross private domestic investment
43 Gross government investment
44 Net foreign investment
1,549.9
278.8
-199.1
1,650.1
308.7
-313.2
1,723.7
324.4
-369.6
1,755.7
334.2
-390.7
1,852.6
331.9
-412.5
1,869.3
333.6
-450.1
-24.8
-71.9
-67.8
-77.7
-72.5
-101.8
19
LESS: Personal tax and nontax payments
20 EQUALS: Disposable personal income
21
MEMO
Per capita (chained 1996 dollars)
->3 Gross domestic product
24 Personal consumption expenditures
25 Disposable personal income
26 Saving rate (percent)
GROSS
SAVING
allowances
34 Gross government saving
35
Federal
Consumption of fixed capital
36
37
Current surplus or deficit ( - ) , national accounts
38
State and local
39
Consumption of fixed capital
40
Current surplus or deficit ( —), national accounts
45 Statistical discrepancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
n.a.
1,832.9
336.4
n.a.
n.a.
SOURCE. U.S. Department of Commerce. Survey of Current
Business.
n.a.
1,854.0
345.9
n.a.
n.a.
A50
3.10
International Statistics • April 2001
U.S. INTERNATIONAL TRANSACTIONS
Summary
Millions of dollars; quarterly data seasonally adjusted except as noted1
1999
Item credits or debits
1 Balance on current account
?
Balance on goods and services
3
Exports
4
Imports
5
Income, net
6
Investment, net
7
Direct
8
Portfolio
9
Compensation of employees
Unilateral current transfers, net
10
11 Change in U.S. government assets other than official
reserve assets, net (increase, —)
1997
1998
-140,540
-105,932
936,937
-1,042,869
6,186
11,050
71,935
-60,885
-4,864
-40,794
2000
1999
Q3
Q4
Ql
Q2
Q3
-113,773
-96,503
274,657
-371,160
-4,518
-3,172
21,558
-24,730
-1,346
-12,752
-217,138
-166,898
932,977
-1,099,875
-6,211
-1,036
67,728
-68,764
-5,175
-44,029
-331,479
-264.971
956,242
-1,221,213
-18,483
-13,102
62,704
-75,806
-5,381
-48,025
-89,649
-72.718
241,969
-314,687
-5,535
-4,193
15,701
-19,894
-1.342
-11,396
-96,223
-76,280
249,653
-325,933
-5,683
-4,319
16,275
-20,594
-1,364
-14,260
-101,505
-85,117
255,977
-341,094
-4,364
-2,987
17,068
-20,055
-1,377
-12,024
-104,971
-88,598
265,969
-354,567
-4,103
-2,706
19,015
-21,721
-1,397
-12,270
68
-422
2,751
-686
3,711
-131
-574
110
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
-1,010
0
-350
-3,575
2,915
-6,783
0
-147
-5,119
-1,517
8,747
0
10
5,484
3,253
1,951
0
-184
2,268
-133
1,569
0
-178
1,800
-53
-554
0
-180
-237
-137
2,020
0
-180
2,328
-128
-346
0
-182
1,300
-1,464
17 Change in U.S. private assets abroad (increase, —)
18
Bank reported claims
Nonbank-reported claims
19
20
U.S. purchases of foreign securities, net
21
U.S. direct investments abroad, net
-487,998
-141,118
-122,888
-118,976
-105,016
-328,231
-35,572
-10,612
-135,995
-146,052
-441,685
-69,862
-92,328
-128,594
-150,901
-124,174
-11.259
-27,943
-41,420
-43,552
-120,162
-45,304
-24,428
-17,150
-33,280
-178,273
-55,511
-52,563
-27,236
-42,963
-93,870
18,320
-36,507
-38,196
-37,487
-76,968
-11,383
931
-30,428
-36,088
7.7 Change in foreign official assets in United States (increase, + )
23
U.S. Treasury securities
24
Other U.S. government obligations
25
Other U.S. government liabilities 2
26
Other U.S. liabilities reported by U.S. banks 2
27
Other foreign official assets 3
18,876
-6,690
4,529
-1,041
22,286
-208
-20,127
-9,921
6,332
-3,550
-9,501
-3,487
42,864
12,177
20,350
-3,255
12,692
900
12,191
12,963
1,835
-760
-2,032
185
27,495
5,122
6,730
89
14,427
1,127
22,015
16,198
8,107
-644
-2,577
931
6,346
-4,000
10,334
-781
-111
904
11,625
-9,001
14,272
-620
6,339
635
28 Change in foreign private assets in United States (increase, + )
29
U.S. bank-reported liabilities 4
30
U.S. nonbank-reported liabilities
Foreign private purchases of U.S. Treasury securities, net
31
32
U.S. currency flows
33
Foreign purchases of other U.S. securities, net
34
Foreign direct investments in United States, net
738,086
149,026
113,921
146,433
24,782
197,892
106,032
502,362
39,769
-7.001
48,581
16,622
218,075
186,316
710,700
67,403
34,298
-20,464
22,407
331,523
275,533
182,019
24,585
-8,085
9,639
4,697
95,620
55,563
157,072
19,618
792
-17,191
12,213
92,250
49,390
214,520
-8,824
58.061
-9,248
-6,847
132,416
48,962
238,803
46,943
24,038
-20,597
989
87,107
100,323
188,544
13,981
2,633
-12,642
757
118,882
64,933
350
-127,832
637
69,702
-3,500
11,602
-127,832
69,702
11,602
171
18,177
-9,739
27,916
-3,993
30,531
5.738
24,793
166
43,762
5,724
38,038
170
-47,924
-2,515
-45,409
165
-9,357
-9,691
334
35 Capital account transactions, net 5
36 Discrepancy
37
Due to seasonal adjustment
38
Before seasonal adjustment
MEMO
Changes in official assets
39 U.S. official reserve assets (increase, - )
40 Foreign official assets in United States, excluding line 25
(increase, + )
41 Change in Organization of Petroleum Exporting Countries official
assets in United States (part of line 22)
-1,010
-6,783
8,747
1,951
1,569
-554
2,020
-346
19,917
-16,577
46,119
12,951
27,406
22,659
7,127
12,245
12,124
-11,531
1,331
-783
-1,673
6,109
1,913
3,450
1. Seasonal factors are not calculated for lines 11-16, 18-20, 22-35, and 38-41.
2. Associated primarily with military sales contracts and other transactions arranged with
or through foreign official agencies.
3. Consists of investments in U.S. corporate stocks and in debt securities of private
corporations and state and local governments.
4. Reporting banks included all types of depository institutions as well as some brokers
and dealers.
5. Consists of capital transfers (such as those of accompanying migrants entering or
leaving the country and debt forgiveness) and the acquisition and disposal of nonproduced
nonfinancial assets.
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current
Business.
Summary Statistics
3.11
A51
U.S. FOREIGN TRADE'
Millions of dollars; monthly data seasonally adjusted
2000
Item
1998
1999
2000
June r
July r
Aug. r
Oct. r
Sept.1"
Dec.P
Nov.
1 Goods and services, balance
Merchandise
Services
-166,898
-246,854
79,956
-264,971
-345,559
80,588
-369,689
-449,468
49,779
-29,893
-36,929
7,036
-31,891
-38,591
6,700
-30,126
-36,751
6,625
-33,808
-39,396
5,588
-33,620
-39,955
6,335
-33,127
-39,125
5,998
-32,994
-39,176
6,182
4 Goods and services, exports
5
Merchandise
6
Services
932,977
670,324
262,653
956,242
684,358
271,884
1,068,397
773,304
295,093
91,265
66,445
24,820
89,632
65,073
24,559
92,845
67,950
24,895
92,631
67,813
24,818
91,105
66,323
24,782
90,557
65,848
24,709
89,820
64,925
24,895
7 Goods and services, imports
8
Merchandise
9
Services
1,099,875
917,178
182,697
1,221,213
1,029,917
191,296
1,438,086
1,222,772
215,314
-121,158
-103,374
-17,784
-121,523
-103,664
-17,859
-122,971
-104,701
-18,270
-126,439
-107,209
-19,230
-124,725
-106,278
-18,447
-123,684
-104,973
-18,711
-122,814
-104,101
-18,713
7
3
1. Data show monthly values consistent with quarterly figures in the U.S. balance of
payments accounts.
3.12
SOURCE. FT900, U.S. Department of Commerce, Bureau of the Census and Bureau of
Economic Analysis.
U.S. RESERVE ASSETS
Millions of dollars, end of period
2000
Asset
1997
1998
2001
1999
c
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.?
1 Total
69,954
81,761
71,516
66,516
65,333
66,256
65,257
65,523
67,647
67,542
66,486
2 Gold stock 1
3 Special drawing rights 2 ' 3
4 Reserve position in International Monetary
Fund 2
5 Foreign currencies 4
11,047 c
10,027
11,046 c
10,603
11,048 c
10,336
11,046
10,257
11,046
10,371
11,046
10,316
11,046
10,169
11,046
10,369
11,046
10,539
11,046
10,497
11,046
10,641
18,071
30,809
24,111
36,001
17,950
32,182
15,083
30,130
13,798
30,118
13,685
31,209
13,528
30,514
13,491
30,617
14,824
31,238
15,079
30,920
14,107
30,692
SDR holdings and reserve positions in the I M F 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 " u n d e r e a r m a r k " 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 m e m b e r countries. From July 1974 through December
1980, sixteen currencies were used; since January 1981, five currencies have been used. U.S.
3.13
FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE B A N K S '
Millions of dollars, end of period
2000
Asset
1997
1998
July
1 Deposits
Held in custody
2 U.S. Treasury securities"
3 Earmarked gold 3
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb. p
457
167
71
76
78
139
115
104
215
199
195
620,885
10,763
607,574
10,343
632,482
9,933
624,177
9,688
628,001
9,674
611,641
9,620
595,591
9,565
591,071
9,505
594,094
9,451
594,694
9,397
603,906
9,343
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.
2001
1999
3. Held in foreign and international accounts and valued at $42.22 per fine troy ounce; not
included in the gold stock of the United States.
A52
3.15
International Statistics • April 2001
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
2000
Item
1 Total 1
2
3
4
5
6
7
8
9
10
11
12
By type
Liabilities reported by banks in the United States'
U.S. Treasury bills and certificates 3
U.S. Treasury bonds and notes
Marketable
Nonmarketable 4
U.S. securities other than U.S. Treasury securities 5
By area
Europe 1
Canada
Latin America and Caribbean
Asia
Africa
Other countries
1998
1999
July
Aug.
Sept.
Oct.'
Nov.
Dec. p
759,928
806318
836,024 r
846,745 r
849,175 r
848,546 r
850,116
849,049
844,688
125,883
134,177
138,847
156.177
136,072
157,190
139,627
160,093
136,989
159,781
143,010
155,498
146,452
155,101
147,631
155,061
144,550
151,872
432,127
6,074
61,667
422,266
6,111
82,917
433,829 r
5,740
103,193
433,190 r
5,180
108,655
433,639 r
5,213
113,553 r
427,013 r
5,247
117,778 r
419,863
5,280
123,420
414,896
5,313
126,148
415,964
5,348
126,954
256,026
10,552
79,503
400,631
10,059
3,157
244,805
12,503
73,518
463,703
7,523
4,266
253,416
13,542
71,25 l r
485,343
7,850
4,622
257,712
13,728
73,350 r
487,417
8,656
5,882
255,635
12,692 r
76,353 r
490,110
8,707
5,678
257,498
12,821 r
77,548 r
486,890
8,466
5,323
264,131
12,632
77,526
481,344
8,323
6,160
262,099
11,744
78,742
481,094
8,012
7,358
253,492
12,394
76,812
488,080
8,115
5,795
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
June
LIABILITIES TO, A N D 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 1994 benchmark survey of foreign portfolio investment in the United
States.
Reported by Banks in the United States 1
Millions of dollars, end of period
1999
Item
1 Banks' liabilities
2 Banks' claims
Deposits
.3
4
Other claims
5 Claims of banks' domestic customers 2
1996
103,383
66,018
22.467
43,551
10,978
1. Data on claims exclude foreign currencies held by U.S. monetary authorities.
1997
117,524
83,038
28,661
54,377
8,191
2000
1998
101,125
78,162
45,985
32,177
20,718
Dec.
Mar.
June
Sept.
88,537
67,365
34,426
32,939
20,826
85,649
63,492
32,967
30,525
21,753
85,842
67,862
31,224
36,638
18,802
78,872
60,355
25,847
34,508
19,123
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.
Nonbank-Reported
3.17
LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
Data
A53
Reported by Banks in the United States1
Millions of dollars, end of period
2000
1998
Item
1999
2000
June
July
Aug.
Sept.
Oct.
Nov.
Dec.p
B Y HOLDER AND TYPE OF LIABILITY
1 Total, all f o r e i g n e r s
B a n k s ' o w n liabilities
D e m a n d deposits
T i m e deposits 2
4
Other3
O w n foreign offices 4
6
7
3
7 B a n k s ' custodial liabilities 5
8
U.S. Treasury bills and certificates 6
O t h e r negotiable and readily transferable
9
instruments 7
Other
10
11 N o n m o n e t a r y international and regional o r g a n i z a t i o n s 8
B a n k s ' o w n liabilities
12
13
D e m a n d deposits
14
Time deposits2
Other3
15
16
17
18
19
B a n k s ' custodial liabilities 5
U.S. T r e a s u r y bills and certificates 6
O t h e r negotiable and readily transferable
instruments7
Other
Official institutions 9
B a n k s ' o w n liabilities
D e m a n d deposits
Time deposits2
24
Other3
20
71
77
73
75
26
27
28
B a n k s ' custodial liabilities 5
U.S. T r e a s u r y bills and certificates 6
O t h e r negotiable and readily transferable
instruments7
Other
79 B a n k s 1 0
30
B a n k s ' o w n liabilities
31
Unaffiliated f o r e i g n b a n k s
37
D e m a n d deposits
33
Time deposits2
34
Other3
O w n f o r e i g n offices 4
35
36
37
38
39
B a n k s ' custodial liabilities 5
U.S. Treasury bills and certificates 6
O t h e r negotiable and readily transferable
instruments7
Other
4 0 Other foreigners
B a n k s ' o w n liabilities
41
47
D e m a n d deposits
Time deposits2
43
44
Other3
45
46
47
48
B a n k s ' custodial liabilities 5
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments7
Other
MEMO
4 9 N e g o t i a b l e time certificates of d e p o s i t in c u s t o d y f o r
foreigners
..
1347,837
1,408,740
1,523,372
1,451,491
1,480,318
1,444,482
1,453,627
l,511,130r
1,525,177
1,523,372
884,939
29,558
151,761
140,752
562,868
971,536
42,884
163,620
155,853
609,179
1,048,773
33,546
191,781
172,953
650,493
1,012,619
30,719
182,963
168,148
630,789
1,050,467
34,914
186,483
172,466
656,604
1,013,420
30,101
184,820
173,971
624,528
1,027,122
31,964
184,822
174,458
635,878
l,074,532r
29,500
185,459
194,628
664,945r
1,073,534
31,701
192,420
187,066
662,347
1,048,773
33,546
191,781
172,953
650,493
462,898
183,494
437,204
185,676
474,599
177,742
438,872
180,822
429,851
182,699
431,062
180,925
426,505
174,604
436,598r
173,984
451,643
173,896
474,599
177,742
141,699
137,705
132,617
118,911
144,858
151,999
124,670
133,380
120,624
126,528
119,212
130,925
120,296
131,605
129,753 r
132,861 r
132,453
145,294
144,858
151,999
11,883
10,850
172
5,793
4,885
15,276
14,357
98
10,349
3,910
12,281
11,878
41
6,264
5,573
21,366
20,924
34
12,545
8,345
16,689
16,294
30
10,305
5,959
14,630
14,377
26
9,062
5,289
15,658
15,404
19
7,627
7,758
17,104
16,751
48
5,925
10,778
17,074
16,676
30
6,542
10,104
12,281
11,878
41
6,264
5,573
1,033
636
919
680
403
252
442
432
395
371
253
217
254
223
353
215
398
249
403
252
397
0
233
6
149
2
10
0
21
3
26
10
26
5
138
0
147
2
149
2
260,060
80,256
3,003
29,506
47,747
295,024
97,615
3,341
28,942
65,332
297,660
97,052
3,950
35,638
57,464
293,262
88,392
2,887
33,696
51,809
299,720
92,739
4,063
34,641
54,035
296,770
90,985
4,573
32,009
54,403
298,508
95,049
5,213
36,679
53,157
301,553r
102,654 r
4,361
34,035 r
64,258r
302,692
102,110
4,702
35,335
62,073
297,660
97,052
3,950
35,638
57,464
179,804
134,177
197,409
156,177
200,608
153,010
204,870
157,190
206,981
160,093
205,785
159,781
203,459
155,498
198,899
155,101
200,582
155,061
200,608
153,010
44,953
674
41,182
50
47,360
238
47,611
69
46,363
525
45,644
360
47,660
301
43,753
45
44,828
693
47,360
238
885,336
676,057
113,189
14,071
45,904
53,214
562,868
900,379
728,492
119,313
17,583
48,140
53,590
609,179
981,552
789,052
138,559
15,532
67,498
55,529
650,493
926,262
755,644
124,855
14,543
58,095
52,217
630,789
955,206
792,072
135,468
17,508
60,703
57,257
656,604
921,181
754,093
129,565
11,959
62,841
54,765
624,528
927,099
762,392
126,514
12,918
59,958
53,638
635,878
963,606r
797,354r
132,409r
12,160
64,301r
55,948r
664,945r
973,539
794,924
132,577
12,834
68,828
50,915
662,347
981,552
789,052
138,559
15,532
67,498
55,529
650,493
209,279
35,359
171,887
16,796
192,500
15,919
170,618
13,081
163,134
12,657
167,088
12,251
164,707
10,667
166,252 r
9,972
178,615
10,285
192,500
15,919
45,332
128,588
45,695
109,396
35,104
141,477
34,657
122,880
34,018
116,459
33,893
120,944
32,679
121,361
3 4 , 2 6 LR
122,019 r
34,643
133,687
35,104
141,477
190,558
117,776
12,312
70,558
34,906
198,061
131,072
21,862
76,189
33,021
231,879
150,791
14,023
82,381
54,387
210,601
147,659
13,255
78,627
55,777
208,743
149,362
13,313
80,834
55,215
211,901
153,965
13,543
80,908
59,514
212,362
154,277
13,814
80,558
59,905
228,867
157,773
12,931
81,198
63,644
231,872
159,824
14,135
81,715
63,974
231,879
150,791
14,023
82,381
54,387
72,782
13,322
66,989
12,023
81,088
8,561
62,942
10,119
59,381
9,579
57,936
8,676
58,085
8,216
71,094
8,696
72,048
8,301
81,088
8,561
51,017
8,443
45,507
9,459
62,245
10,282
42,392
10,431
40,261
9,541
39,649
9,611
39,931
9,938
51,601
10,797
52,835
10,912
62,245
10,282
27,026
30,345
34,088
26,571
26,186
25,911
25,991
27,164
25,854
34,088
1. R e p o r t i n g b a n k s include all types of depository institutions as well as s o m e brokers and
dealers. E x c l u d e s b o n d s and notes of maturities longer than one year.
2. E x c l u d e s negotiable time certificates of deposit, w h i c h are included in " O t h e r negotiable and readily transferable i n s t r u m e n t s . "
3. Includes b o r r o w i n g u n d e r r e p u r c h a s e a g r e e m e n t s .
4. For U.S. banks, includes a m o u n t s o w e d to o w n f o r e i g n b r a n c h e s and f o r e i g n subsidiaries consolidated in quarterly C o n s o l i d a t e d R e p o r t s of C o n d i t i o n filed with bank regulatory
agencies. F o r agencies, branches, and m a j o r i t y - o w n e d subsidiaries of f o r e i g n b a n k s , consists
principally of a m o u n t s o w e d to the head office o r parent foreign bank, and to foreign
branches, agencies, or wholly o w n e d subsidiaries of the head office or parent foreign bank.
5. Financial c l a i m s on residents of the United States, other than long-term securities, held
by or t h r o u g h reporting b a n k s f o r f o r e i g n c u s t o m e r s .
6. Includes n o n m a r k e t a b l e certificates of i n d e b t e d n e s s a n d T r e a s u r y bills issued to official
institutions of foreign countries.
7. Principally b a n k e r s a c c e p t a n c e s , c o m m e r c i a l paper, a n d negotiable time certificates of
deposit.
8. Principally the International B a n k for R e c o n s t r u c t i o n and D e v e l o p m e n t , the InterA m e r i c a n D e v e l o p m e n t B a n k , and the A s i a n D e v e l o p m e n t B a n k . E x c l u d e s " h o l d i n g s of
d o l l a r s " of the International M o n e t a r y Fund.
9. Foreign central b a n k s , f o r e i g n central g o v e r n m e n t s , a n d the B a n k f o r International
Settlements.
10. E x c l u d e s central b a n k s , w h i c h are included in "Official institutions."
A54
3.17
International Statistics • April 2001
LIABILITIES TO FOREIGNERS Reported by Banks in the United States 1 —Continued
Payable in U.S. dollars
Millions of dollars, end of period
2000
Item
1998
1999
2000
June
July
Aug.
Sept.
Oct.
Nov.
Dec.p
AREA
5 0 Total, all f o r e i g n e r s
1,347,837
1,408,740
1,523,372
1,451,491
1,480,318
1,444,482
1,453,627
l,511,130r
1,525,177
1,523,372
51 F o r e i g n c o u n t r i e s
1,335,954
1,393,464
1,511,091
1,430,125
1,463,669
1,429,852
1,437,969
l,494,026r
1,508,103
1,511,091
427,375
3,178
42,818
1,437
1,862
44,616
21,357
2,066
7,103
10,793
710
3,236
2,439
15.781
3,027
50.654
4,286
181,554
233
30,225
441,810
2,789
44,692
2,196
1,658
49,790
24,753
3,748
6,775
8,143
1.327
2,228
5,475
10,426
4,652
63,485
7.842
172,687
286
28,858
449,144
2,724
33,401
3,001
1,412
37,840
35,535
2,013
5,079
7,485
2,305
2,404
19,020
7,801
6,498
74,732
7,548
169,476
276
30,594
442,979
2,709
31,219
3,444
1,395
42,095
28,938
2,772
6.739
8,783
2,150
2,376
11,879
9,935
5,430
57,361
8.472
184,205
276
32,801
476,570
3,239
33,282
3,521
1,751
42,379
26,484
2,917
5,700
12,313
2,337
2,169
14,960
8,829
5,100
76,255
8,341
194,017
277
32,699
451,531
2,783
31,281
3,689
1,618
42,723
25,893
3,455
5,566
13,087
1.636
2.144
14,252
8,791
5,992
77,578
7,999
170,705
277
32.062
459,595
2,541
29,828
3,429
1,512
39,693
26,212
3,331
5,959
10,311
3,501
2,244
15,970
8,421
6,209
88,276
8,173
171,867
275
31,843
480,968r
2,037
29,648r
3.001
1.418
41.736r
28,633r
3,445 r
5,594
14,450
4,102r
2,262r
17,260 r
9,270
6,247
97,15 lr
8,492
170,396 r
270
35,556r
469,232
2,671
32,389
3,531
1,874
43,534
27,084
3,344
5,521
13,283
5,159
2,379
20,022
6,900
7,36"'
86,154
4,525
169,534
279
33,687
449,144
2,724
33,401
3,001
1,412
37,840
35.535
2,013
5,079
7,485
2,305
2,404
19,020
7,801
6,498
74,732
7,548
169,476
276
30,594
52 Europe
53
Austria
54
Belgium and Luxembourg
55
Denmark
Finland
56
57
France
58
Germany
59
Greece
Italy
60
61
Netherlands
62
Norway
Portugal
63
64
Russia
Spain
65
66
Sweden
67
Switzerland
68
Turkey
United Kingdom
69
Yugoslavia' 1
70
71
O t h e r E u r o p e and other f o r m e r U . S . S . R . ' 2
72 Canada
7 3 Latin A m e r i c a and C a r i b b e a n
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
Peru
88
89
Uruguay
90
Venezuela
91
Other
92 Asia
China
93
Mainland
94
Taiwan
95
Hong Kong
India
96
97
Indonesia
98
Israel
99
Japan
K o r e a (South)
100
101
Philippines
102
Thailand
103
M i d d l e Eastern oil-exporting c o u n t r i e s 1 3
104
Other
105 A f r i c a
106
Egypt
107
Morocco
South A f r i c a
108
109
Zaire
Oil-exporting c o u n t r i e s 1 4
110
111
Other
112
113
114
Other
Australia
Other
115 N o n m o n e t a r y international and regional organizations . .
116
International 1 5
Latin A m e r i c a n r e g i o n a l 1 6
117
118
Other regional17
30.212
34,214
31,059
37,375
37,231
33,722
33,869
34,367
31,252
31,059
554,866
19,014
118,085
6,846
15,815
302.486
5,015
4,624
62
1,572
1,336
577
37,157
5,010
3,864
840
2,486
19,894
10,183
578,695
18,633
135,811
7,874
12,865
312,278
7,008
5,669
75
1,956
1,626
520
30,717
4,047
4.415
1.142
2,386
20,192
11,481
702,272
19,492
189,454
9,695
10,952
374,106
5,895
4,554
88
2.118
1,637
815
33,155
5,496
4,292
1,435
3,006
24,779
11,303
641,860
16,559
184,295
8,025
10,908
323,407
6,194
4.361
85
2,276
1,658
687
33.943
7,925
3.824
1,133
2,689
22,258
11,633
643.748
19,092
170,530
7,074
11.950
339,700
5,440
4,627
122
2,219
1,730
725
33,379
7.164
3.353
1,097
2,179
21.462
11,905
633,150
17,552
176,104
8,157
12,351
321.573
5.296
4,735
91
2.082
1,659
915
33,291
6,373
3,561
1,065
2,541
23,909
11,895
637,599
18,560
171.452
8,100
11,537
331,097
5,346
4,658
88
2.074
1,671
830
33,878
5,159
3,661
1,091
2,567
23,997
11,833
658,210r
18,746
180,951
8,730
10,204
340,926
5,105
4,945
92r
2,084
1,667
680
36,054
4,614
3,788
1,153
24,284r
1 l,675r
684,379
17,886
179.570
8,404
11,663
368,175
5,327
4.560
86
2,059
1,678
722
33,856
5,318
3,980
1,194
2,944
25,963
10,994
702,272
19,492
189,454
9,695
10,952
374,106
5.895
4,554
88
2,118
1,637
815
33,155
5,496
4,29'*
1.435
3,006
24.779
11,303
307,960
319,489
306,412
289,816
285,018
291,017
286,551
299,147r
301.595
306,412
13.441
12,708
20,900
5,250
8,282
7,749
168,563
12,524
3,324
7,359
15,609
32,251
12.325
13,603
27,701
7,367
6,567
7.488
159,075
12,988
3,268
6,050
21,314
41,743
16,538
17,690
26,768
4,532
8,524
8,055
150,434
7,967
2,430
3,129
23,760
36,585
10,000
13,584
23,638
5,613
7,341
6,124
153,649
10.349
2.003
3,529
18,578
35,408
9,385
13,156
25,675
5,712
7,342
5,794
147,549
8,618
1,649
3,900
22,195
34,043
11,769
14,675
26,749
5,547
7,318
5,951
146,382
8,819
1,679
3,504
21,968
36.656
11,830
15,140
26,583
5,838
7,310
7,132
142,782
9,043
1,822
3,330
21.851
33,890
13,719
18,^89
25,784
5,548
7,589
6.668
150,196
6,684
1,676
3,178
23,852
35,964r
15,835
17,630
25,924
5,173
8.375
6,538
149,679
6,689
2,334
3.477
23,732
36,209
16,538
17.690
26,768
4,532
8,524
8,055
150,434
7,967
2.430
3,129
23,760
36,585
8.905
1,339
97
1,522
5
3,088
2,854
9,468
2,022
179
1,495
14
2,914
2,844
10.836
2,622
139
1.011
4
4,052
3,008
8,729
1,966
149
601
6
3,405
2,602
9.739
1,780
118
792
5
4,258
2,786
9,607
1,615
109
708
7
4,470
2,698
9,821
1.544
112
842
5
4.499
2,819
9,663r
1.546
121
767
4
4,405
2,820 r
9,515
1,655
100
853
4
4,027
2,876
10,836
2,622
139
1,011
4
4,052
3,008
6,636
5,495
1,141
9.788
8,377
1,411
11,368
10,090
1.278
9,366
8.563
803
11,363
10,346
1,017
10,825
9,825
1,000
10,534
9,507
1,027
11,671
10,562
1,109
12,130
10,961
1,169
11,368
10,090
1,278
11,883
10.221
594
1,068
15,276
12,876
1,150
1,250
12.281
11,008
740
533
21,366
20,106
768
492
16,689
15,295
786
608
14,630
13,118
1,146
366
15,658
14.387
888
383
17,104
16,126
589
389
17,074
16,068
523
483
12,281
11,008
740
533
11. S i n c e D e c e m b e r 1992, has e x c l u d e d Bosnia, Croatia, and Slovenia.
12. I n c l u d e s the B a n k f o r International Settlements. S i n c e D e c e m b e r 1992, h a s
included all parts of the f o r m e r U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia.
13. C o m p r i s e s Bahrain, Iran, Iraq, K u w a i t , O m a n , Qatar, Saudi A r a b i a , and United A r a b
E m i r a t e s (Trucial States).
14. C o m p r i s e s Algeria, G a b o n , Libya, and Nigeria.
2,512
15. Principally the International Bank for R e c o n s t r u c t i o n and D e v e l o p m e n t . E x c l u d e s
" h o l d i n g s of d o l l a r s " of the International M o n e t a r y F u n d .
16. Principally the I n t e r - A m e r i c a n D e v e l o p m e n t B a n k .
17. Asian, African, M i d d l e E a s t e r n , and E u r o p e a n regional organizations, e x c e p t the B a n k
f o r International Settlements, which is included in " O t h e r E u r o p e . "
Nonbank-Reported
3.18
Data
A55
BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1
Payable in U.S. Dollars
Millions of dollars, end of period
2000
Area or country
1998
1999
2000
June
July
Aug.
Sept.
Oct.
Nov.
Dec. p
1 Total, all foreigners
734,995
793,139
894,579
827,178
829,845
796,497
840,425
862,67lr
864,863
894,579
2 Foreign countries
731,378
788,576
889,893
822,455
825,959
792,720
835,560
857,448 r
861,023
889,893
233,321
1,043
7,187
2,383
1,070
15,251
15,923
575
7,284
5,697
827
669
789
5,735
4,223
46,874
1,982
106,349
53
9,407
311,686
2,643
10,193
1,669
2,020
29,142
29,205
806
8,496
11,810
1,000
1,571
713
3,796
3,264
79,158
2,617
115,971
50
7,562
383,872
2,941
5,516
3,312
7,402
40,323
36,973
658
7,629
17,294
5,012
1,382
517
2,848
9,301
82,383
3,175
148,875
50
8,281
353,006
2,119
6,392
3,442
2,601
28,635
33,583
836
7,688
15,669
1,932
1,424
744
3,844
8,692
86,284
3,188
137,697
49
8,187
357,980
2,617
6,302
3,349
2,897
25,845
30,452
754
6,447
13,159
2,401
1.454
718
4,767
8,404
94,550
2,735
143,459
49
7,621
327,409
1,956
5,819
3,278
2,701
23,229
31,804
557
7,358
14,999
1,448
1,273
666
3,566
8,761
87,172
2,855
123,360
49
6,558
359,865
2,584
6,344
3,403
3,561
27,062
33,229
516
6,215
15,507
4,474
1.480
643
3,208
8,501
100,345
2,821
132,503
49
7,420
365,685 r
2,809
6,020
3.093
4,927
34,217 r
33,017
628 r
6,482
16,165
4,655
1,574
647
3,360
8,504
103,818 r
2,831
122,829
49
10,060 r
371,891
2,681
5,036
3,462
6,517
34,567
32,161
876
6,738
15,975
6,159
1,249
663
2,593
8,815
107,986
3,260
125,223
49
7,881
383,872
2,941
5,516
3,312
7,402
40,323
36,973
658
7,629
17,294
5,012
1,382
517
2,848
9,301
82,383
3,175
148,875
50
8,281
3 Europe
4
Austria
Belgium and Luxembourg
5
6
Denmark
Finland
7
8
France
9
Germany
in
Greece
Italy
11
Netherlands
V
Norway
n
14
Portugal
Russia
15
16
Spain
17
Sweden
Switzerland
18
Turkey
19
United Kingdom
?0
Yugoslavia 2
71
Other Europe and other former U.S.S.R. 3
22
47,037
37,206
40,068
42,606
40,420
37,934
37,610
38,639
39,283
40,068
342,654
9,552
96,455
5,011
16,184
153,749
8,250
6,507
0
1,400
1,127
239
21,212
6,779
3,584
3,275
1,126
3,089
5,115
355,168
10.894
99,066
8,007
16,987
167,189
6,607
4,524
0
760
1,135
295
17,899
5,982
3,387
2,529
801
3,494
5,612
378,821
11,546
96,999
9,343
20,567
189,100
5,816
4,370
0
635
1,246
355
17,431
5.801
2,935
2,808
675
3,520
5,674
334,463
10,729
83,524
6,285
17,902
164,969
6,213
3,797
0
613
1,235
291
17,066
6,502
3,063
2,458
620
3,471
5,725
334,855
10.660
76,477
6,906
18,199
172,232
6,070
3.909
0
610
1,215
299
16,426
6,652
2,981
2,488
649
3,357
5,725
338,764
10,597
78,896
4,684
18,555
175,936
5,985
3,953
3
607
1,277
305
16,840
5,804
2,882
2,487
777
3,410
5,766
347,550
10,840
83,126
6,265
19,061
178,744
5,954
3,850
0
623
1,226
337
16,849
5,770
2,781
2,697
728
3,390
5,309
357,575 r
11,166
83.523
8,426
20,202
184,812
5,756 r
3,846
0
639
1,245
379
16,723'
6,158
2,668
2,653
663
3,321
5,395
358,393
11,468
79,167
8,324
19,840
188,994
5,772
3,938
0
629
1,247
355
16,946
6,554
2,839
2,713
677
3,451
5,479
378,821
11,546
96,999
9,343
20,567
189,100
5,816
4,370
0
635
1,246
355
17,431
5,801
2,935
2,808
675
3,520
5,674
98,607
75,143
78,770
82,398
83,127
79,022
81.655
87,682 r
83,363
78,770
1,261
1,041
9,080
1,440
1,942
1,166
46,713
8,289
1,465
1,807
16,130
8,273
2.110
1,390
5,903
1.738
1,776
1,875
28,641
9,426
1,410
1,515
14,267
5,092
1,608
2,247
6,715
2,178
1,917
2,729
35,112
7,784
1,784
1,381
10,091
5,224
1,688
1,335
4,261
1,905
1,856
1,610
33,256
15,855
1,868
1,255
12,128
5,381
1,822
922
5,777
2,013
1,940
1,982
31,209
18,915
1,802
1,051
10,367
5,327
1.601
790
5,403
2,037
1,880
2,281
32,494
16,924
1,483
1,059
10,006
3,064
1,519
2,475
6,014
2,006
1,982
1,116
35,234
14,457
1,495
1,071
9,961
4,325
1,912
3,691
6,540
1,787
2,009
1,551
35.773
18,589
1,473
1,046
9,867 r
3,444
1,644
2,483
6,454
1,736
1,961
1,911
36,468
16,189
1,758
1,221
8,487
3,051
1,608
2,247
6,715
2,178
1,917
2,729
35,112
7,784
1,784
1,381
10,091
5,224
56 Africa
Egypt
57
58
Morocco
59
South Africa
6n
Zaire
61
Oil-exporting countries 5
Other
62
3,122
257
372
643
0
936
914
2,268
258
352
622
24
276
736
2,151
201
204
366
0
471
909
2,482
230
259
760
0
430
803
2,505
217
272
411
0
751
854
2,215
186
247
358
0
616
808
2,597
176
254
372
0
913
882
2,29 r
201
252
322
0
656
860 r
1,977
184
235
341
0
342
875
2,151
201
204
366
0
471
909
63 Other
Australia
64
Other
65
6,637
6,173
464
7,105
6,824
281
6,211
5,962
249
7,500
7,240
260
7,072
6,891
181
7,376
7,036
340
6,283
6,036
247
5,576
5,238
338
6,116
5,938
178
6,211
5,962
249
66 Nonmonetary international and regional organizations 6 . . .
3,617
4,563
4,686
4,723
3,886
3,777
4,865
5,223
3,840
4,686
23 Canada
? 4 Latin America and Caribbean
Argentina
Bahamas
77
Bermuda
78
Brazil
79
British West Indies
30
Chile
31
Colombia
37.
Cuba
33
Ecuador
34
Guatemala
35
Jamaica
36
Mexico
Netherlands Antilles
37
38
Panama
39
Peru
4n
Uruguay
Venezuela
41
Other
42
43 Asia
China
Mainland
44
45
Taiwan
Hong Kong
46
India
47
48
Indonesia
49
Israel
50
Japan
51
Korea (South)
52
Philippines
53
Thailand
54
Middle Eastern oil-exporting countries 4
Other
55
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.
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 2001
BANKS' OWN A N D DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS
Payable in U.S. Dollars
Reported by Banks in the United States 1
Millions of dollars, end of period
2000
Type of claim
1999
2000
June
July
Aug.
829,845
48.478
557,557
85,738
21,856
63.882
138,072
796,497
41,459
544,142
78,561
21,822
56,739
132.335
l,011,076r
Sept.
Oct.
Nov.
862,671
49,693
586,918
83.035
23,598
59,437
143,025
864,863
49.373
593,256
82,988
23,758
59,230
139,246
Dec.P
1 Total
875,891
944,937
1,085,295
2 B a n k s ' claims
Foreign public borrowers
3
4
O w n foreign offices 2
Unaffiliated foreign banks
5
Deposits
6
Other
7
All other foreigners
8
734,995
23,542
484,535
106,206
27,230
78,976
120,712
793,139
35,090
529,682
97,186
34,538
62,648
131,181
894,579
38,327
612.778
99.648
23,886
75,762
143,826
827,178
41,224
557.717
88,954
22,371
66.583
139,283
140.896
79,363
151.798
88,006
190.716
99,846
183,898 r
105,846 r
169,277
87,108
190,716
99,846
47,914
51,161
78.147
62.975
70,334
78.147
13,619
12.631
12,723
15,077
11,835
12,723
4,701
4,258
Claims of banks' domestic customers 3
Deposits
Negotiable and readily transferable
instruments 4
12
Outstanding collections and other
claims
9
10
11
1,009,702
840,425
40,436
576,452
87,276
23,765
63,511
136,261
1,085,295
894,579
38,327
612,778
99,648
23,886
75,762
143,826
MEMO
13 Customer liability on acceptances
14 Dollar deposits in banks abroad, reported by
nonbanking business enterprises in the
United States 5
4,520
4.553
4,258
5,055
39,978
31.125
53,153
44,139
46,337
55,293
57,784
53,848
55,899
53,153
principally of a m o u n t s due f r o m the head office or parent foreign bank, and f r o m foreign
branches, agencies, or wholly o w n e d 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 d e m a n d and time deposits and negotiab'^ and nonnegotiable certificates of
deposit d e n o m i n a t e d in U.S. dollars issued by banks abroad.
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 f r o m o w n foreign branches and foreign subsidiaries consolidated in quarterly Consolidated Reports of Condition tiled with bank regulatory
agencies. For agencies, branches, and m a j o r i t y - o w n e d subsidiaries of foreign banks, consists
3.20
r
BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS
Payable in U.S. Dollars
Reported by Banks in the United States'
Millions of dollars, end of period
1999
Maturity, by b o r r o w e r and area"
1996
1997
Dec.
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
By area
Maturity of one year or less
Europe
Canada
Latin A m e r i c a and Caribbean
Asia
Africa
All other 3
Maturity of more than one year
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other 3
Mar.
June
Sept.
258,106
276,550
250,418
267,082
262,173
273,139
263,500
211.859
15,411
196,448
46.247
6,790
39,457
205,781
12.081
193.700
70,769
8,499
62,270
186.526
13,671
172,855
63,892
9.839
54,053
187,894
22,811
165.083
79.188
12,013
67,175
181,050
23,436
157,614
81.123
12.852
68,271
185.927
24,850
161.077
87,212
15,905
71,307
174,809
23,647
151,162
88,691
16.236
72.455
55,690
8,339
103.254
38.078
1.316
5,182
58,294
9,917
97,207
33.964
2.211
4.188
68.679
10,968
81,766
18,007
1,835
5,271
80,842
7,859
69,498
21.802
1.122
6,771
79.638
8,408
62.923
23.002
957
6,122
75,561
7,344
66,140
29.091
1,520
6,271
69,486
8,225
65.918
23,874
1,594
5,712
6,965
2,645
24.943
9.392
1.361
941
13,240
2,525
42,049
10,235
1,236
1,484
14.923
3,140
33.442
10,018
1,232
1,137
22,951
3,192
39.051
11,257
1,065
1,672
23,951
3.127
39,714
11,612
965
1,754
25,404
3.323
42,427
12,549
924
2,585
27,550
3,261
41,166
13,131
895
2,688
1. Reporting banks include all types of depository institutions as well as some brokers and
dealers.
2000
1998
2. Maturity is time remaining until maturity.
3. Includes nonmonetary international and regional organizations.
Nonbank-Reported
3.21
CLAIMS ON FOREIGN COUNTRIES
Data
A57
Held by U.S. and Foreign Offices of U.S. Banks'
Billions of dollars, end of period
1996
2000
1999
1998
Area or country
1997
Sept.
Dec.
Mar.
June
Sept.
Dec.
Mar.
June
Sept.
645.8
721.8
1071.9
1051.6
981.9
930.4
930.4
934.5
949.4
989.6
952.9 r
228.3
11.7
16.6
29.8
16.0
4.0
2.6
5.3
104.7
14.0
23.7
242.8
11.0
15.4
28.6
15.5
6.2
3.3
7.2
113.4
13.7
28.6
240.0
11.7
20.3
31.4
18.5
8.4
2.1
7.6
100.1
15.9
23.9
217.7
10.7
18.4
30.9
11.5
7.8
2.3
8.5
85.4
16.8
25.4
208.9
15.6
21.6
34.7
17.8
10.7
4.0
7.8
56.2
15.9
24.6
224.0
16.2
20.7
32.1
16.4
13.3
2.6
8.3
74.7
17.1
22.6
208.2
15.7
20.0
37.4
15.0
11.7
3.6
8.8
52.3
17.9
25.7
232.3
14.3
29.0
38.7
18.1
12.3
3.0
10.3
68.2
16.3
22.1
278.5
14.2
27.1
37.3
20.0
17.1
3.9
10.1
107.8
17.5
23.5
320.0
13.8
32.6
31.5
20.8
16.1
3.5
13.8
144.3
18.3
25.4
286.9
13.0
29.1
37.8
18.8
17.6
4.3
10.9
118.7
18.7
18.1
1.3 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
66.1
1.1
1.5
.8
6.7
8.0
.9
13.3
2.7
4.9
2.0
24.0
65.5
1.5
2.4
1.3
5.1
3.6
.9
12.6
4.5
8.3
2.2
23.1
78.5
2.1
3.0
1.6
5.8
3.2
1.1
19.5
5.2
10.4
5.4
21.4
69.0
1.4
2.2
1.4
5.9
3.2
1.4
13.7
4.8
10.4
4.4
20.3
80.1
2.8
3.4
1.5
6.5
3.1
1.4
15.7
5.2
10.2
4.8
25.4
79.7
2.8
2.9
.9
5.9
3.0
1.2
16.6
4.9
10.3
4.7
26.6
71.7
3.0
2.1
.9
6.6
3.8
1.2
15.1
4.7
9.2
4.0
21.1
68.4
3.5
2.6
.9
6.0
3.3
1.0
12.1
4.8
6.8
3.8
23.5
62.8
2.6
1.5
.8
5.7
3.0
1.0
11.3
5.1
8.3
4.8
18.6
75.2
2.8
1.2
1.2
6.8
4.6
2.0
12.2
5.6
8.0
4.5
26.3
73.8 r
3.5
1.8
2.8
6.4
8.5
1.5
10.5
5.6
8.4
4.2 r
20.5
25 O P E C 2
26
Ecuador
27
Venezuela
28
Indonesia
29
Middle East countries
30
African countries
19.8
1.1
2.4
5.2
10.7
.4
26.0
1.3
2.5
6.7
14.4
1.2
26.0
1.2
3.1
4.7
16.1
.8
27.1
1.3
3.2
4.7
17.0
1.0
26.2
1.2
3.5
4.5
16.7
.4
26.2
1.1
3.2
5.0
16.5
.5
30.1
.9
3.0
4.4
21.4
.5
31.4
.8
2.8
4.2
23.1
.5
28.9
.7
3.0
3.9
21.1
.2
32.3
.7
2.9
4.1
24.0
.7
31.8
.6
2.9
4.4
22.7
1.2
1 Total
2 G-10 countries and Switzerland
Belgium and Luxembourg
3
France
4
5
Germany
6
Italy
Netherlands
7
8
Sweden
Switzerland
9
10
United Kingdom
11
Canada
12
Japan
130.3
139.2
140.4
143.4
146.4
148.6
144.6
149.4
154.8
158.3
149.6 r
32
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other
14.3
20.7
7.0
4.1
16.2
1.6
3.3
18.4
28.6
8.7
3.4
17.4
2.0
4.1
22.9
24.0
8.5
3.4
18.7
2.2
4.6
23.1
24.7
8.3
3.2
18.9
2.2
5.4
24.4
24.2
8.6
3.3
19.7
2.2
5.3
22.8
25.2
8.2
3.1
18.5
2.1
5.5
22.8
23.5
7.7
2.7
19.4
1.8
5.5
23.2
27.7
7.4
2.5
18.7
1.7
5.9
22.4
28.1
8.2
2.5
18.3
1.9
6.5
21.6
28.3
8.1
2.4
20.5
2.1
6.7
21.4
28.5
7.4
2.4
17.5
2.1
6.3
39
40
41
42
43
44
45
46
47
Asia
China
Mainland
Taiwan
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia
2.5
10.3
4.3
.5
21.5
6.0
5.8
5.7
4.1
3.2
9.5
4.9
.7
15.6
5.1
5.7
5.4
4.3
2.8
12.5
5.3
.9
13.1
5.0
4.7
5.3
3.1
3.0
13.3
5.5
1.1
13.7
5.6
5.1
4.7
2.9
5.0
11.8
5.5
1.1
13.7
5.9
5.4
4.5
3.0
5.3
12.6
6.7
2.0
15.3
6.0
5.7
4.2
2.8
3.3
12.3
7.0
1.0
16.0
6.1
5.8
4.0
2.9
3.6
12.0
7.7
1.8
15.2
6.1
6.2
4.1
2.9
4.6
12.6
7.9
3.3
17.4
6.5
5.3
4.3
2.6
3.8
12.6
8.2
1.5
21.2
6.8
5.3
4.0
2.5
3.4
12.8
5.8
1.1
21.0
6.9 r
4.7
3.9
2.3
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa 3
.7
.7
.1
.9
.9
.6
.0
.8
1.7
.5
.0
1.1
1.3
.5
.0
1.0
1.4
.5
.0
.9
1.4
.5
.0
1.0
1.3
.5
.0
1.0
1.4
.4
.0
1.0
1.4
.3
.0
.9
1.3
.3
.0
.9
1.1
.4
.0
,8 r
6.9
3.7
3.2
9.1
5.1
4.0
6.3
2.8
3.5
5.5
2.2
3.3
6.8
2.0
4.8
5.7
2.1
3.7
5.4
2.0
3.4
5.2
1.6
3.6
6.3
1.7
4.7
9.4
1.5
7.9
9.0 r
1.4
7.6
135.1
20.5
4.5
37.2
26.1
2.0
.1
27.9
16.7
.1
59.6
140.2
24.2
9.8
43.4
14.6
3.1
.1
32.2
12.7
.1
99.1
121.0
30.7
10.4
27.8
6.0
4.0
.2
30.6
11.1
.2
459.9
93.9
35.4
4.6
12.8
2.6
3.9
.1
23.3
11.1
2
495.1
83.0
22.0
3.9
13.9
2.7
3.9
.1
22.8
13.5
.2
430.4
66.0
10.4
5.7
7.2
1.3
3.9
.1
22.0
15.2
.1
380.2
79.1
18.2
8.2
6.3
9.1
3.9
.2
22.4
10.6
.2
391.2
59.9
13.7
8.0
1.3
1.7
3.9
.1
21.0
10.1
.1
387.9
42.0
2.4
7.3
.0
2.5
3.4
.1
22.2
4.1
.1
376.1
52.4
.5
6.3
5.1
2.6
3.3
.1
20.7
13.6
.1
342.1
50.6
.6
6.3
5.9
1.9
2.5
.1
20.6 r
12.7
.1
351.1
31 N o n - O P E C developing countries
52 Eastern Europe
53
Russia 4
54
Other
55 Offshore banking centers
56
Bahamas
57
Bermuda
58
Cayman Islands and other British West Indies
59
Netherlands Antilles
60
Panama 5
61
Lebanon
62
Hong Kong, China
63
Singapore
64
Other 6
65 Miscellaneous and unallocated 7
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
institutions 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 not 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.
2. Organization of Petroleum Exporting Countries, shown individually; other members of
O P E C (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United
Arab Emirates); and Bahrain and O m a n (not formally members of OPEC).
3. Excludes Liberia. Beginning March 1994 includes Namibia.
4. As of December 1992, excludes other republics of the former Sov iet Union.
5. Includes Canal Zone.
6. Foreign branch claims only.
7. Includes New Zealand, Liberia, and international and regional organizations.
A58
International Statistics • April 2001
3.22
LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in
the United States
Millions of dollars, end of period
1999
Type of liability, and area or country
1996
1997
2000
1998
June
Sept.
Dec.
Mar.
June
Sept.
1 Total
61,782
57,382
46,570
49,337
52,979
53,044
53,489
70,534
76,944
2 Payable in dollars
3 Payable in foreign currencies
39,542
22,240
41,543
15,839
36,668
9,902
36,032
13,305
36,296
16,683
37,605
15,415
35,614
17,875
47,864
22,670
51,751
25,193
By type
4 Financial liabilities
Payable in dollars
5
Payable in foreign currencies
6
33,049
11,913
21,136
26,877
12,630
14,247
19,255
10,371
8,884
25,058
13,205
11,853
27,422
12,231
15,191
27,980
13,883
14,097
29,180
12,858
16,322
44,068
22.803
21,265
49,895
26,159
23,736
7 Commercial liabilities
8
Trade payables
Advance receipts and other liabilities
9
28,733
12,720
16,013
30,505
10,904
19,601
27,315
10,978
16,337
24.279
10,935
13,344
25,557
12,651
12,906
25,064
12,857
12,207
24,309
12,401
11,908
26,466
13,764
12,702
27,049
14,218
12,831
10
11
Payable in dollars
Payable in foreign currencies
27,629
1,104
28,913
1,592
26,297
1,018
22,827
1,452
24,065
1,492
23,722
1,318
22,756
1,553
25,061
1,405
25,592
1,457
12
13
14
15
lb
17
18
By area ar country
Financial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
23,179
632
1,091
1.834
556
699
17,161
18,027
186
1,425
1,958
494
561
11.667
12,589
79
1,097
2,063
1,406
155
5,980
19,578
70
1,287
1,959
2,104
143
13,097
21,695
50
1,675
1,712
2,066
133
15,096
23,241
31
1,659
1,974
1,996
147
16,521
24,050
4
1,849
1,880
1,970
97
16,579
30,332
163
1,702
1,671
2,035
137
21,463
36,175
169
1,299
2,132
2,040
178
28,601
19
Canada
1,401
2,374
693
320
344
284
313
714
249
20
21
22
23
24
25
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,668
236
50
78
1,030
17
1
1,386
141
229
143
604
26
1
1,495
7
101
152
957
59
2
1,369
1
52
131
944
19
1
1,180
1
26
122
786
28
0
892
1
5
126
492
25
0
846
1
1
128
489
22
0
2,874
78
1,016
146
463
26
0
3,447
105
1,182
132
501
35
0
6,423
5,869
25
4,387
4,102
27
3,785
3,612
0
3,217
3,035
2
3,622
3,384
3
3,437
3,142
4r
3,275
2,985
4
9,453
6,024
5
9,320
4,782
7
38
0
60
0
28
0
29
0
31
0
28
0
28
0
33
0
48
0
340
643
665
545
550
98
668
662
656
9,767
479
680
1,002
766
624
4,303
10,228
666
764
1,274
439
375
4,086
10,030
278
920
1,392
429
499
3,697
8,718
189
656
1,143
432
497
2,959
9,265
128
620
1,201
535
593
3,175
9,262
140
672
1,131
507
626
3,071
8,646
78
539
914
648
536
2,661
9,293
178
711
948
562
565
2,982
9,470
155
727
1,023
424
647
3,034
27
28
29
30
31
32
33
34
35
36
37
38
39
Japan
Middle Eastern oil-exporting countries'
Africa
Oil-exporting countries"
All other
3
Commercial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
40
Canada
1.090
1,175
1,390
1,670
1,753
1,775
2,024
2,053
1,897
41
42
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,574
63
297
196
14
665
328
2,176
16
203
220
12
565
261
1,618
14
198
152
10
347
202
1,674
19
180
112
5
490
149
1,957
24
178
120
39
704
182
2,310
22
152
145
48
887
305
2,286
9
287
115
23
805
193
2,607
10
300
119
22
1,073
239
2,523
15
377
166
19
1,080
124
48
49
50
Asia
Japan
Middle Eastern oil-exporting countries'
13.422
4.614
2.168
14,966
4.500
3,111
12,342
3,827
2,852
10,039
2.753
2,209
10,428
2,689
2,618
9,886
2,609
2,551
9,681
2,274
2,308
10,965
2,200
3,489
11,221
2,069
3,720
51
52
Africa
Oil-exporting countries"
1,040
532
874
408
794
393
832
392
959
584
950
499
943
536
950
575
1,285
693
840
1,086
1,141
1,346
1,195
881
729
598
653
53
Other
3
1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
2. Comprises Algeria, Gabon, Libya, and Nigeria.
3. Includes nonmonetary international and regional organizations.
Nonbank-Reported Data
3.23
CLAIMS ON UNAFFILIATED FOREIGNERS
the United States
A59
Reported by Nonbanking Business Enterprises in
Millions of dollars, end of period
2000
1999
Type of claim, and area or country
1996
1997
1998
June
Sept.
Dec.
Mar.
June
Sept.
1 Total
65,897
68,128
77,462
63,884
67,566
76,669
84,266
80,725
94,806
2 Payable in dollars
3 Payable in foreign currencies
59,156
6,741
62,173
5,955
72,171
5,291
57,006
6,878
60,456
7,110
69,170
7,472
74,331
9,935
72,294
8,431
82,877
11,929
By type
4 Financial claims
Deposits
5
6
Payable in dollars
7
Payable in foreign currencies
8
Other financial claims
9
Payable in dollars
10
Payable in foreign currencies
37.523
21,624
20,852
772
15,899
12,374
3,525
36,959
22,909
21,060
1,849
14,050
11,806
2,244
46,260
30,199
28,549
1,650
16,061
14,049
2,012
31,957
13,350
11,636
1,714
18,607
14,800
3,807
33,877
15,192
13,240
1,952
18,685
15,718
2,967
40,231
18,566
16,373
2,193
21,665
18,593
3,072
47,798
23,316
21,442
1.874
24,482
19,659
4.823
44,303
17.462
15,361
2,101
26,841
22,384
4,457
58,303
30,928
27.974
2,954
27,375
20,541
6,834
11 Commercial claims
12
Trade receivables
13
Advance payments and other claims
28,374
25,751
2,623
31,169
27,536
3,633
31,202
27,202
4,000
31,927
27,791
4,136
33,689
29,397
4,292
36,438
32,629
3,809
36,468
31,443
5,025
36,422
31,277
5,145
36,503
31,533
4,970
14
15
Payable in dollars
Payable in foreign currencies
25,930
2,444
29,307
1,862
29,573
1,629
30,570
1,357
31,498
2,191
34,204
2,207
33,230
3,238
34,549
1,873
34,362
2,141
16
17
18
19
20
21
22
By area or country
Financial claims
Europe
Belgium and L u x e m b o u r g
France
Germany
Netherlands
Switzerland
United Kingdom
11,085
185
694
276
493
474
7,922
14,999
406
1,015
427
677
434
10,337
12,294
661
864
304
875
414
7,766
13,978
457
1,368
367
997
504
8,631
13,878
574
1,212
549
1,067
559
8,157
13,023
529
967
504
1,229
643
7,561
16,789
540
1,835
669
1,981
612
9,044
18,254
317
1,292
576
1,984
624
11,668
23,706
304
1,477
696
2,486
626
16,191
3,442
3,313
2,503
2,828
3,172
2,553
3,175
5,799
7,517
20,032
1,553
140
1,468
15,536
457
31
15,543
2,308
108
1,313
10,462
537
36
27,714
403
39
835
24,388
1,245
55
11,486
467
39
1,102
7,393
1,702
71
12,749
755
524
1,265
7,263
1,791
47
18,206
1,593
11
1,476
12,099
1,798
48
21,945
1,299
11
1,646
15,814
1,979
65
14,874
655
34
1,666
7,751
2,048
78
21,691
1,358
22
1,568
15,722
2,280
101
2,221
1,035
22
2,133
823
11
3,027
1,194
9
2,801
949
5
3,205
1,250
5
5,457
3,262
23 r
4,430
2,021
29
3,923
1,410
42
4,002
1,726
85
Africa
Oil-exporting countries 2
174
14
319
15
159
16
228
5
251
12
286
15
232
15
320
39
284
3
All other 3
569
652
563
636
622
706
1.227
1,133
1,103
10,443
226
1,644
1,337
562
642
2,946
12,120
328
1,796
1,614
597
554
3,660
13,246
238
2,171
1,822
467
483
4,769
12,961
286
2,094
1,660
389
385
4,615
14,367
289
2,375
1,944
617
714
4,789
16,389
316
2,236
1,960
1,429
610
5,827
16,118
271
2,520
2,034
1.337
611
5,354
15,928
425
2,692
1.906
1,242
563
4,929
16,481
393
2,924
2,143
1,310
682
5,198
23
Canada
24
25
26
77
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
31
32
33
Asia
Japan
Middle Eastern oil-exporting countries'
34
35
36
37
38
39
40
41
42
43
Commercial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
44
Canada
2,165
2,660
2,617
2,855
2,638
2,757
3,088
3,250
2,945
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
5,276
35
275
1,303
190
1,128
357
5,750
27
244
1,162
109
1,392
576
6,296
24
536
1,024
104
1,545
401
6,278
21
583
887
127
1,478
384
5,879
29
549
763
157
1,613
365
5,959
20
390
905
181
1,678
439
5,899
15
404
849
95
1,529
435
5,792
48
381
894
51
1,565
466
5,798
75
387
982
55
1,615
379
5?
53
54
Asia
Japan
Middle Eastern oil-exporting countries'
8,376
2,003
971
8,713
1,976
1,107
7,192
1,681
1,135
7,690
1,511
1,465
8,579
1,823
1,479
9,165
2,074
1,625
9,101
2,082
1,533
9,173
1,882
1,241
8,991
2,071
1,197
55
56
Africa
Oil-exporting countries"
746
166
680
119
711
165
738
202
682
221
631
171
716
82
766
160
895
392
57
Other 3
1,368
1,246
1,140
1,405
1,544
1,537
1,546
1,513
1,393
1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
2. Comprises Algeria, Gabon, Libya, and Nigeria.
3. Includes nonmonetary international and regional organizations.
A60
International Statistics • April 2001
3.24
FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
2000
Transaction, and area or c o u n t r y
1999
2000
2000
Jan.Dec.
June
July
Aug.
Sept.
Oct.
Nov.
Dec.p
U.S. c o r p o r a t e securities
STOCKS
1 Foreign p u r c h a s e s
2 Foreign sales
2,340,659
2,233,137
3,605,196
3,430,306
3,605,196
3,430,306
300,356
282,563
271,572
255,999
286,819
262,546
297,677
289,118
339,995
323,659
284,909
275,855
286,161
275,034
3 N e t p u r c h a s e s , or sales (—)
107,522
174,890
174,890
17,793
15,573
24,273
8,559
16,336
9,054
11,127
4 Foreign countries
107,578
174,903
174,903
17,823
15,563
24,249
8,603
16,338
9,068
11,145
98,060
3,813
13,410
8,083
5.650
42,902
-335
5,187
-1,066
4,445
5,723
372
915
164,656
5,727
31,752
4,915
11,960
58,736
5,956
-17,812
9,189
12,494
2,070
415
5
164,656
5,727
31,752
4,915
11,960
58,736
5,956
-17,812
9,189
12,494
2,070
415
5
14,853
-653
2,544
584
67
7,026
-46
1,898
4
870
439
54
190
13,349
1,292
371
554
1,702
6,460
-166
1,363
98
815
492
-124
228
15,678
575
2,670
594
1,114
7,098
1,267
4,907
908
1,789
568
2
-302
10,014
-565
643
792
780
5,163
-924
-3,406
52
2,707
2,467
-56
216
14,040
1,757
1,383
-135
488
6,283
194
-4,400
754
5,840
2,640
-27
-63
7,485
408
988
323
-598
3,210
1,477
-2,979
340
3,310
662
80
-645
10,779
40
777
1,691
-684
7,773
1,468
-2,759
277
1,451
1,615
-45
-26
-56
-11
-11
-30
10
24
-42
-2
-14
-18
19 Foreign p u r c h a s e s
2 0 Foreign sales
854,692
602,100
1,206,662
871,418
1,206,662
871,418
107,320 r
75,117
87,580
67,010
107.808
69,514
106,384
76,225
103,028
71,686
114,686
77,596
117,904
90,143
21 N e t p u r c h a s e s , or sales (—)
252,592
335,244
335,244
32,203r
20,570
38,294
30,159
31,342
37,090
27,761
22 F o r e i g n c o u n t r i e s
252,994
335,348
335,348
32,254r
20,482
38,215
30,161
31,356
37,224
27,759
140,674
1,870
7,723
2,446
4,553
106,344
6,043
58,783
1,979
42,817
17,541
1,411
1,287
179,706
2,216
4,067
1,130
3,833
140,152
13,287
59,443
2.076
78,280
38,842
938
1,618
179.706
2,216
4.067
1,130
3,833
140,152
13,287
59,443
2,076
78,280
38,842
938
1,618
19,378
159
897
-169
324
16,218
1,092
4,390
138 r
7,059
3,945
72
125
7,789
85
154
-575
1,003
4,003
943
4,743
264
6,601
3,320
10
132
21,618
334
1,185
850
757
15,909
1,965
3,829
54
10,562
5,664
37
150
17,058
-819
44
-818
333
15,950
811
6,338
-702
6,777
3,573
49
-170
16,965
347
433
848
350
12,503
897
5,018
-54
8,215
3,690
58
257
16,522
272
537
183
483
12,952
1,179
6,600
437
11,839
7,435
25
622
16,560
138
-78
275
-89
12,825
414
4,126
1,077
5,535
2,932
76
-29
-402
-70
-70
88
110
-2
-14
-134
2
10,270
148,930
138,660
267
92,182
91,915
3,002
153,024
150,022
-3,439
98,523
101,962
5,563
141,600
136,037
8,434
94,938
86,504
-3,195
135,417
138,612
-1,175
83,721
84,896
5
b
1
8
9
10
11
12
13
14
15
16
IV
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin A m e r i c a and C a r i b b e a n
M i d d l e East 1
O t h e r Asia
Japan
Africa
Other countries
18 N o n m o n e t a r y international a n d
regional o r g a n i z a t i o n s
BONDS 2
23
24
25
26
27
28
29
30
31
32
33
34
35
Europe
France
Germany
Netherlands
Switzerland
United K i n g d o m
Canada
Latin A m e r i c a and C a r i b b e a n
M i d d l e East 1
Other Asia
Japan
Africa
O t h e r countries
36 N o n m o n e t a r y i n t e r n a t i o n a l a n d
regional o r g a n i z a t i o n s
-51
F o r e i g n securities
37 Stocks, net purchases, or sales ( —)
38
Foreign purchases
39
F o r e i g n sales
4 0 B o n d s , net purchases, or sales ( —)
41
Foreign p u r c h a s e s
42
Foreign sales
4 3 N e t p u r c h a s e s , or sales ( - ) , of s t o c k s a n d b o n d s
44 Foreign countries
45
46
47
48
49
50
51
Europe
Canada
Latin A m e r i c a and Caribbean
Asia
Japan
Africa
O t h e r countries
5 2 N o n m o n e t a r y international a n d
regional o r g a n i z a t i o n s
15,640
1,177,303
1,161,663
-5,676
798.267
803,943
....
-9,253
1,802,870
1,812,123
-3,872
959,415
963,287
-9,253
1,802,870
1,812,123
-3,872
959,415
963,287
-14,970
136,467
151,437
-6,488
68,425
74,913
672
142,850
142,178
-2,812
74,803
77,615
9,964
-13,125
-13,125
2,460r
-21,458
-2,140
10,537
-437
13,997
-4,370
9,679
-13,262
-13,262
2,610r
-21,217
-1,986
10,361
-604
13,758
-3,951
59,247
-999
-4,726
-42,961
-43,637
710
-1,592
-23.632
-3.857
-15.108
26.039
21,912
947
2.349
-23,632
-3,857
-15,108
26,039
21,912
947
2,349
-2,091r
971r
2,055r
l,624r
3,165
-37
88
-23,431
255
-979
2,977
4,119
532
-571
-5,786
910
-892
3,159
1,478
-50
673
6,352
-1,126
604
3,880
2,082
49
602
-3,901
1,816
999
-47
-1,255
13
516
7,373
574
-521
5,742
2,067
-28
618
-4,452
-1,357
-205
1,872
1,824
-4
195
285
151
151
-241
-154
180
167
239
-419
1. C o m p r i s e s oil-exporting countries as f o l l o w s : Bahrain, Iran, Iraq, Kuwait, O m a n , Qatar,
Saudi Arabia, and U n i t e d A r a b E m i r a t e s (Trucial States).
-3,291r
152,855 r
156,146 r
5,751
82,953
77,202
-150
2. I n c l u d e s state a n d local g o v e r n m e n t securities and securities of U.S. g o v e r n m e n t
agencies and corporations. A l s o includes issues of n e w debt securities sold abroad by U.S.
corporations o r g a n i z e d to finance direct i n v e s t m e n t s abroad.
Securities Holdings and Transactions
3.25
MARKETABLE U.S. TREASURY BONDS AND NOTES
A61
Foreign Transactions1
Millions of dollars; net purchases, or sales (—) during period
2000
2000
Area or country
1999
2000
Jan.Dec.
June
July
Aug.
Sept.
Oct.
Nov.
Dec. p
1 Total estimated
-9,953
-53,791
-53,791
-17,932
-6,061
-114
-8,516
-3,038
-14,106
2 Foreign countries
-10,518
-53,330
-53,330
-17,597
-5,746
-117
-8,741
-3,223
-13,959
-9,904
-38,228
-81
2,285
2,122
1,699
-1,761
-20,232
-22,260
7,348
-50,705
73
-7,304
2,140
1,082
-10,326
-33,669
-2,701
-308
-50,705
73
-7,304
2,140
1,082
-10,326
-33,669
-2,701
-308
-9,935
252
609
-389
-47
-1,928
-9,243
811
226
-6,351
-138
-2,199
-584
114
-1,398
-4,372
2,226
-872
3,707
138
-36
91
56
-338
3,054
742
222
-1,284
-127
-1,738
836
214
-959
-1,865
2,355
1,417
-3,708
320
1,424
183
-118
-57
-3,793
-1,667
160
-10,991
53
-2,185
264
-104
-301
-6,035
-2,683
-1,173
-6,850
-96
-1,065
-1,622
328
64
-4,199
-260
-1,492
-7,523
362
1,661
-9,546
29,359
20,102
-3,021
1,547
-4,914
1,288
-11,581
5,379
1,639
10,580
-414
1,372
-4,914
1,288
-11,581
5,379
1,639
10,580
-414
1,372
-3,839
16
-4,748
893
-3,988
-2,660
-130
69
1,415
89
1,261
65
-488
672
4
546
245
45
61
139
-4,918
367
9
618
-4,979
314
-4,936
-357
-3,319
1,717
-139
-437
3,963
152
3,030
781
-4,688
1,608
-6
1,056
-507
251
-1,262
504
-1,289
4,445
-16
17
-245
300
-1,746
1,201
-458
-3,855
-44
-815
565
190
666
-461
-483
76
-461
-483
76
-335
-286
-9
-315
-333
-1
3
15
-10
225
391
1
185
39
28
-147
-146
-1
115
24
6
-10,518
-9,861
-657
-53,330
-6,302
-47,028
-53,330
-6,302
-47,028
-17,597
-1,412
-16,185
-5,746
-639
-5,107
-117
449
-566
-8,741
-6,626
-2,115
-3.223
-7,150
3,927
-13,959
-4,967
-8,992
-9,904
1,068
-10,972
2,207
0
3,483
0
3,483
0
859
0
267
0
217
0
-1,030
0
-724
0
-888
0
48
0
3
4
5
6
7
8
9
in
11
Europe
Belgium and Luxembourg
Germany
Netherlands
Sweden
Switzerland
United Kingdom
Other Europe and former U.S.S.R
Canada
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 Nonmonetary international and regional organizations
International
21
22
Latin American regional
MEMO
23 Foreign countries
24
Official institutions
25
Other foreign
Oil-exporting
countries
26 Middle E a s t 2
27 Africa 3
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.
-9,789
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
A62
3.28
International Statistics • April 2001
FOREIGN EXCHANGE RATES A N D INDEXES OF THE FOREIGN EXCHANGE VALUE OF THE U.S. DOLLAR 1
Currency units per U.S. dollar except as noted
2000
Sept.
Oct.
2001
Nov.
Dec.
Jan.
Feb.
E x c h a n g e Rates
COUNTRY/CURRENCY
UNIT
1 Australia/dollar 2
2 Austria/schilling
3 Belgium/franc
4 Brazil/real
5 Canada/dollar
6 China, P.R./yuan
7 Denmark/krone
8 European Monetary Union/euro 3
9 Finland/markka
10 France/franc
11 Germany/deutsche mark
12 Greece/drachma
62.91
12.379
36.31
1.1605
1.4836
8.3008
6.7030
n.a.
5.3473
5.8995
1.7597
295.70
64.54
n.a.
n.a.
1.8207
1.4858
8.2783
6.9900
1.0653
n.a.
n.a.
n.a.
306.30
58.15
n.a.
n.a.
1.8301
1.4855
8.2784
8.0953
0.9232
n.a.
n.a.
n.a.
365.92
55.21
n.a.
n.a.
1.8397
1.4864
8.2785
8.5849
0.8695
n.a.
n.a.
n.a.
389.67
52.80
n.a.
n.a.
1.8813
1.5125
8.2785
8.7276
0.8525
n.a.
n.a.
n.a.
398.29
52.18
n.a.
n.a.
1.9483
1.5426
8.2774
8.6992
0.8552
n.a.
n.a.
n.a.
397.94
54.66
n.a.
n.a.
1.9632
1.5219
8.2771
8.3059
0.8983
n.a.
n.a.
n.a.
379.58
55.52
n.a.
n.a.
1.9561
1.5032
8.2776
7.9629
0.9376
n.a.
n.a.
n.a.
n.a.
53.38
n.a.
n.a.
2.0060
1.5216
8.2771
8.1103
0.9205
n.a.
n.a.
n.a.
n.a.
H o n g Kong/dollar
India/rupee
Ireland/pound"
Italy/lira
Japan/yen
Malaysia/ringgit
Mexico/peso
Netherlands/guilder
New Zealand/dollar 2
Norway/krone
Portugal/escudo
7.7467
41.36
142.48
1.736.85
130.99
3.9254
9.152
1.9837
53.61
7.5521
180.25
7.7594
43.13
n.a.
n.a.
113.73
3.8000
9.553
n.a.
52.94
7.8071
n.a.
7.7924
45.00
n.a.
n.a.
107.80
3.8000
9.459
n.a.
45.68
8.8131
n.a.
7.7985
45.97
n.a.
n.a.
106.84
3.8000
9.362
n.a.
41.71
9.2331
n.a.
7.7977
46.43
n.a.
n.a.
108.44
3.8000
9.537
n.a.
40.01
9.3794
n.a.
7.7991
46.82
n.a.
n.a.
109.01
3.8000
9.508
n.a.
39.90
9.3524
n.a.
7.7991
46.78
n.a.
n.a.
112.21
3.8000
9.467
n.a.
42.97
9.0616
n.a.
7.7998
46.61
n.a.
n.a.
116.67
3.8000
9.769
n.a.
44.42
8.7817
n.a.
7.7999
46.56
n.a.
n.a.
116.23
3.8000
9.711
n.a.
43.45
8.9180
n.a.
Singapore/dollar
South Africa/rand
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
3 2 Thailand/baht
33 United Kingdom/pound"
34 Venezuela/bolivar
1.6722
5.5417
1,400.40
149.41
65.006
7.9522
1.4506
33.547
41.262
165.73
548.39
1.6951
6.1191
1.189.84
n.a.
70.868
8.2740
1.5045
32.322
37.887
161.72
606.82
1.7250
6.9468
1,130.90
n.a.
76.964
9.1735
1.6904
31.260
40.210
151.56
680.52
1.7406
7.1805
1,117.57
n.a.
78.731
9.6853
1.7586
31.198
41.992
143.36
690.39
1.7525
7.4902
1,131.10
n.a.
79.291
9.9930
1.7745
31.846
43.334
145.06
692.86
1.7478
7.6889
1,156.54
n.a.
80.381
10.0965
1.7779
32.433
43.791
142.58
695.77
1.7361
7.6439
1,216.94
n.a.
82.030
9.6604
1.6855
33.123
43.246
146.29
698.85
1.7380
7.7786
1.272.63
n.a.
85.833
9.4910
1.6305
32.673'
43.149
147.75
700.02
1.7435
7.8214
1.252.85
n.a.
87.136
9.7518
1.6686
32.330
42.665
145.25
703.36
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Indexes 4
NOMINAL
35 Broad (January 1 9 9 7 = 1 0 0 ) '
36 M a j o r currencies (March 1 9 7 3 = 100) 6
37 Other important trading partners (January
1 9 9 7 = 100) 7
116.48
95.79
116.87
94.07
119.93
98.34
121.53
100.65
123.27
102.24
124.21
103.08
123.28
101.26
123.14'
100.24
123.77
101.44
126.03
129.94
130.26
130.37
131.99
132.87
133.61
135.01'
134.52
REAL
38 Broad (March 1 9 7 3 = 100) 5
39 M a j o r currencies (March 1 9 7 3 = 100) 6
4 0 Other important trading partners (March
1973 = 100) 7
99.20 r
97.23 r
98.52 r
96.66 r
102.18'
102.85'
103.82'
105.56'
105.23
107.30'
105.73
108.12'
104.84'
106.17'
105.26'
105.93'
105.83
107.32
108.1 R
107.23 r
107.68'
108.02'
109.08'
109.20'
109.62'
110.93'
110.46
1. Averages of certified noon buying rates in N e w York for cable transfers. Data in this
table also appear in the B o a r d ' s G.5 (405) monthly statistical release. For ordering address,
see inside front cover.
2. U.S. cents per currency unit.
3. T h e euro is reported in place of the individual euro area currencies. By convention, the
rate is reported in U.S. dollars per euro. T h e bilateral currency rates can be derived f r o m the
euro rate by using the fixed conversion rates (in currencies per euro) as shown below:
E u r o equals
13.7603
40.3399
5.94573
6.55957
1.95583
.787564
Austrian schillings
Belgian francs
Finnish m a r k k a s
French francs
German marks
Irish pounds
1936.27
40.3399
2.20371
200.482
166.386
340.750
Italian lire
L u x e m b o u r g francs
Netherlands guilders
Portuguese escudos
Spanish pesetas
Greek drachmas
4. Starting with the February 2001 Bulletin, revised index values resulting f r o m the annual
revision of data that underlie the calculated trade weights are reported. For more information
on the indexes of foreign exchange value of the dollar, see Federal Reserve Bulletin, vol. 84
(October 1998), pp. 8 1 1 - 8 1 8 .
5. Weighted average of the foreign e x c h a n g e value of the U.S. dollar against the currencies
of a broad group of U.S. trading partners. T h e weight for each currency is c o m p u t e d as an
average of U.S. bilateral import shares f r o m and export shares to the issuing country and of a
measure of the importance to U.S. exporters of that c o u n t r y ' s trade in third country markets.
6. Weighted average of the foreign e x c h a n g e value of the U.S. dollar against a subset of
broad index currencies that circulate widely outside the country of issue. T h e weight for each
currency is its broad index weight scaled so that the weights of the subset of currencies in the
index sum to one.
7. Weighted average of the foreign e x c h a n g e value of the U.S. dollar against a subset of
broad index currencies that do not circulate widely outside the country of issue. T h e weight
for each currency is its broad index weight scaled so that the weights of the subset of
currencies in the index sum to one.
A63
Guide to Statistical Releases and Special Tables
STATISTICAL RELEASES—List Published Semiannually, with Latest Bulletin Reference
Anticipated schedule of release dates for periodic releases
Issue
December 2000
Page
A72
Issue
Page
May
August
November
February
2000
2000
2000
2001
A64
A64
A64
A64
May
August
November
February
2000
2000
2000
2001
A66
A66
A66
A66
May
August
November
February
2000
2000
2000
2001
A72
A72
A72
A72
August 2000
November 2000
February 2001
A76
A76
A76
September 1999
September 2000
A64
A64
September 1999
September 2000
A73
A73
September 1999
September 2 0 0 0
A76
A76
September 1999
September 2000
A79
A79
SPECIAL TABLES—Data Published Irregularly, with Latest Bulletin Reference
Title and Date
Assets and liabilities
of commercial
banks
December 31, 1999
March 31, 2000
June 30, 2000
September 30, 2000
Terms of lending at commercial
February 2000
May 2000
August 2000
November 2000
banks
Assets and liabilities of U.S. branches
December 31, 1999
March 31, 2000
June 30, 2000
September 30, 2000
and agencies
of foreign
banks
Pro forma balance sheet and income statements for priced service
March 31, 2000
June 30, 2000
September 30, 2000
operations
Residential
1998
1999
lending reported
Act
Disposition
1998
1999
of applications
Small loans to businesses
1998
1999
Community
1998
1999
development
under the Home Mortgage
for private
mortgage
Disclosure
insurance
and farms
lending reported under the Community
Reinvestment
Act
64
Federal Reserve Bulletin • April 2001
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
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, 4-6, 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
Euro, 62
FARM mortgage loans, 35
Federal agency obligations, 5, 9-11, 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, 5, 10, 11, 27
Federal Reserve credit, 5, 6, 10, 12
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, 37-41
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, 55-7, 59
Liabilities to, 51-4, 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
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
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)
A65
Loans (See also specific types)
Commercial banks, 15-21
Federal Reserve Banks, 5-7, 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, 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 and holder and property mortgaged, 35
Reserve requirements, 8
Reserves
Commercial banks, 15-21
Depository institutions, 4-6, 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, 37-41
National income accounts, 48
Savings deposits (See Time and savings deposits)
Savings institutions, 35, 36, 37-41
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 U.S. 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
federal,
26 also Credit unions and Savings
Thriftreceipts,
institutions,
4. (See
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 Banks 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)
66
Federal Reserve Bulletin • April 2001
Federal Reserve Board of Governors
and Official Staff
ALAN GREENSPAN, Chairman
ROGER W. FERGUSON, JR., Vice Chairman
EDWARD W . KELLEY, JR.
LAURENCE H . MEYER
OFFICE OF BOARD
DIVISION
MEMBERS
OF INTERNATIONAL
KAREN H . JOHNSON,
FINANCE
Director
LYNN S. FOX, Assistant to the Board
MICHELLE A. SMITH, Assistant to the Board
DONALD J. WINN, Assistant to the Board
WINTHROP P. HAMBLEY, Deputy Congressional
Liaison
JOHN LOPEZ, Special Assistant to the Board
BOB STAHLY MOORE, Special Assistant to the Board
ROSANNA PIANALTO-CAMERON, Special Assistant to the Board
DAVID W. SKIDMORE, Special Assistant to the Board
DIANE E. WERNEKE, Special Assistant to the Board
DAVID H. HOWARD, Deputy
Director
VINCENT R. REINHART, Deputy
Director
THOMAS A. CONNORS, Associate
Director
DALE W. HENDERSON, Associate
Director
RICHARD T. FREEMAN, Assistant
Director
WILLIAM L. HELKIE, Assistant
Director
STEVEN B. KAMIN, Assistant
Director
RALPH W. TRYON, Assistant
Director
LEGAL
DIVISION
DIVISION
J. VIRGIL MATTINGLY, JR., General Counsel
SCOTT G. ALVAREZ, Associate General Counsel
RICHARD M. ASHTON, Associate General Counsel
KATHLEEN M. O'DAY, Associate General Counsel
ANN E. MISBACK, Assistant General Counsel
SANDRA L. RICHARDSON, Assistant General Counsel
STEPHEN L. SICILIANO, Assistant General Counsel
KATHERINE H. WHEATLEY, Assistant General Counsel
OFFICE OF THE
JENNIFER J. JOHNSON,
SECRETARY
Secretary
ROBERT DEV. FRIERSON, Associate
Secretary
BARBARA R. LOWREY, Associate Secretary and
DIVISION
OF
SUPERVISION
BANKING
AND
Director
STEPHEN C. SCHEMERING, Deputy Director
HERBERT A. BIERN, Senior Associate
Director
ROGER T. COLE, Senior Associate
Director
WILLIAM A. RYBACK, Senior Associate
Director
GERALD A. EDWARDS, JR., Associate
Director
STEPHEN M. HOFFMAN, JR., Associate
Director
JAMES V. HOUPT, Associate
Director
JACK P. JENNINGS, Associate
Director
MICHAEL G. MARTINSON, Associate
Director
MOLLY S. WASSOM, Associate
Director
HOWARD A. AMER, Deputy Associate
Director
NORAH M. BARGER, Deputy Associate
Director
BETSY CROSS, Deputy Associate
Director
RICHARD A. SMALL, Deputy Associate
Director
DEBORAH P. BAILEY, Assistant
Director
BARBARA J. BOUCHARD, Assistant
Director
ANGELA DESMOND, Assistant
Director
JAMES A. EMBERSIT, Assistant
Director
CHARLES H. HOLM, Assistant
Director
H E I D I W I L L M A N N RICHARDS, Assistant
Director
WILLIAM G. SPANIEL, Assistant
Director
DAVID M. WRIGHT, Assistant
Director
S I D N E Y M . S U S S AN,
Adviser
WILLIAM C. SCHNEIDER, JR., Project
National Information
Center
AND
Director,
STATISTICS
Director
EDWARD C. ETTIN, Deputy
Director
DAVID WILCOX, Deputy
Director
WILLIAM R. JONES, Associate
Director
MYRON L. KWAST, Associate
Director
STEPHEN D. OLINER, Associate
Director
PATRICK M. PARKINSON, Associate
Director
LAWRENCE SLIFMAN, Associate
Director
CHARLES S. STRUCKMEYER, Associate
Director
MARTHA S. SCANLON, Deputy Associate
Director
JOYCE K. ZICKLER, Deputy Associate
Director
WAYNE S. PASSMORE, Assistant
Director
DAVID L. REIFSCHNEIDER, Assistant
Director
JANICE SHACK-MARQUEZ, Assistant
Director
A L I C E PATRICIA W H I T E , Assistant
REGULATION
RICHARD SPILLENKOTHEN,
Ombudsman
OF RESEARCH
D A V I D J. STOCKTON,
Director
GLENN B. CANNER, Senior Adviser
DAVID S. JONES, Senior Adviser
THOMAS D. SIMPSON, Senior Adviser
DIVISION
OF MONETARY
DONALD L. KOHN,
AFFAIRS
Director
DAVID E. LINDSEY, Deputy
Director
BRIAN F. MADIGAN, Associate
Director
RICHARD D. PORTER, Deputy Associate
Director
WILLIAM C. WHITESELL, Assistant
Director
NORMAND R.V. BERNARD, Special Assistant to the Board
DIVISION OF CONSUMER
AND COMMUNITY
AFFAIRS
DOLORES S . S M I T H ,
Director
GLENN E. LONEY, Deputy
Director
SANDRA F. BRAUNSTEIN, Assistant
Director
MAUREEN P. ENGLISH, Assistant
Director
ADRIENNE D. HURT, Assistant
Director
IRENE S H A W N M C N U L T Y , Assistant
Director
A67
EDWARD M . GRAMLICH
OFFICE OF
STAFF DIRECTOR
FOR
MANAGEMENT
DIVISION OF RESERVE BANK
AND PAYMENT
SYSTEMS
LOUISE L . ROSEMAN,
STEPHEN R. MALPHRUS, Staff
MANAGEMENT
Director
DIVISION
STEPHEN J. CLARK, Associate Director, Finance Function
DARRELL R. PAULEY, Associate Director, Human Resources
Function
CHRISTINE M. FIELDS, Assistant Director, Human Resources
Function
SHEILA CLARK, EEO Programs
Director
DIVISION
OF SUPPORT
ROBERT E . FRAZIER,
GEORGE M. LOPEZ, Assistant
DAVID L. WILLIAMS, Assistant
DIVISION
SERVICES
Director
Director
OF INFORMATION
RICHARD C . STEVENS,
TECHNOLOGY
Director
MARIANNE M. EMERSON, Deputy Director
MAUREEN T. HANNAN, Associate
Director
RAYMOND H. MASSEY, Associate
Director
GEARY L. CUNNINGHAM, Assistant
Director
WAYNE A. EDMONDSON, Assistant
Director
P o KYUNG KIM, Assistant
Director
SUSAN F. MARYCZ, Assistant
Director
SHARON L. MOWRY, Assistant
Director
DAY W. RADEBAUGH, JR., Assistant
Director
Director
PAUL W. BETTGE, Associate
Director
KENNETH D. BUCKLEY, Assistant
Director
TILLENA G. CLARK, Assistant
Director
JOSEPH H. HAYES, JR., Assistant
Director
JEFFREY C. MARQUARDT, Assistant
Director
EDGAR A. MARTINDALE, Assistant
Director
MARSHA REIDHILL, Assistant
Director
JEFF J. STEHM, Assistant
Director
OFFICE
OF THE INSPECTOR
BARRY R. SNYDER, Inspector
Director
OPERATIONS
GENERAL
General
DONALD L. ROBINSON, Deputy Inspector
General
68
Federal Reserve Bulletin • April 2001
Federal Open Market Committee
and Advisory Councils
FEDERAL OPEN MARKET
COMMITTEE
MEMBERS
A L A N GREENSPAN,
WILLIAM J. MCDONOUGH, Vice
Chairman
Chairman
ROGER W . FERGUSON, JR.
E D W A R D W . KELLEY, JR.
MICHAEL H . MOSKOW
E D W A R D M . GRAMLICH
LAURENCE H . MEYER
W I L L I A M POOLE
THOMAS M . HOENIG
CATHY E. MINEHAN
ALTERNATE
MEMBERS
JERRY L . JORDAN
A N T H O N Y M . SANTOMERO
ROBERT D . M C T E E R , JR.
GARY H . STERN
JAMIE B . STEWART, JR.
STAFF
JEFFREY C. FUHRER, Associate
Economist
CRAIG S. HAKKIO, Associate
Economist
DAVID H. HOWARD, Associate
Economist
WILLIAM C. HUNTER, Associate
Economist
DAVID E. LINDSEY, Associate
Economist
ROBERT H. RASCHE, Associate
Economist
VINCENT R. REINHART, Associate
Economist
LAWRENCE SLIFMAN, Associate
Economist
DONALD L. KOHN, Secretary and Economist
NORMAND R.V. BERNARD, Deputy
Secretary
LYNN S. FOX, Assistant
Secretary
GARY P. GILLUM, Assistant
Secretary
J. VIRGIL MATTINGLY, JR., General Counsel
THOMAS C. BAXTER, JR., Deputy General Counsel
K A R E N H . JOHNSON,
Economist
DAVID J. STOCKTON,
Economist
CHRISTINE M. CUMMING, Associate
Economist
PETER R. FISHER, Manager, System Open Market
FEDERAL ADVISORY
COUNCIL
D O U G L A S A . WARNER, III,
LAWRENCE K. FISH, Vice
President
President
ALAN G. MCNALLY, Seventh District
KATIE S. WINCHESTER, Eighth District
R. SCOTT JONES, Ninth District
CAMDEN R. FINE, Tenth District
RICHARD W. EVANS, JR., Eleventh District
LINNET F. DEILY, Twelfth District
LAWRENCE K. FISH, First District
DOUGLAS A. WARNER III, Second District
RONALD L. HANKEY, Third District
DAVID A. DABERKO, Fourth District
L. M. BAKER, JR., Fifth District
L. PHILLIP HUMANN, Sixth District
Account
JAMES A N N A B L E ,
WILLIAM J. KORSVIK,
Co-Secretary
Co-Secretary
A69
CONSUMER ADVISORY
COUNCIL
LAUREN ANDERSON, N e w Orleans, Louisiana, Chairman
DOROTHY BROADMAN, San Francisco, California, Vice Chairman
A N T H O N Y S . ABBATE, S a d d l e b r o o k , N e w J e r s e y
ANNE S. LI, Trenton, N e w Jersey
TERESA A . BRYCE, S t . L o u i s , M i s s o u r i
J. PATRICK LIDDY, C i n c i n n a t i , O h i o
MALCOLM B U S H , C h i c a g o , I l l i n o i s
OSCAR MARQUIS, Park Ridge, Illinois
M A N U E L CASANOVA, JR., B r o w n s v i l l e , T e x a s
JEREMY NOWAK, P h i l a d e l p h i a , P e n n s y l v a n i a
CONSTANCE K . CHAMBERLIN, R i c h m o n d , V i r g i n i a
ROBERT M. CHEADLE, Oklahoma City, Oklahoma
NANCY PIERCE, Kansas City, Missouri
MARTA RAMOS, San Juan, Puerto Rico
M A R Y E L L E N DOMEIER, N e w U l m , M i n n e s o t a
R O N A L D A . REITER, S a n F r a n c i s c o , C a l i f o r n i a
LESTER W . FIRSTENBERGER, E v a n s v i l l e , I n d i a n a
ELIZABETH RENUART, B o s t o n , M a s s a c h u s e t t s
JOHN C . GAMBOA, S a n F r a n c i s c o , C a l i f o r n i a
RUSSELL W . SCHRADER, S a n F r a n c i s c o , C a l i f o r n i a
EARL JAROLIMEK, Fargo, North Dakota
F R A N K TORRES, JR., W a s h i n g t o n , D i s t r i c t o f C o l u m b i a
WILLIE M . JONES, B o s t o n , M a s s a c h u s e t t s
G A R Y S . WASHINGTON, C h i c a g o , I l l i n o i s
M . D E A N KEYES, S t . L o u i s , M i s s o u r i
ROBERT L . W Y N N II, M a d i s o n , W i s c o n s i n
THRIFT INSTITUTIONS ADVISORY
COUNCIL
THOMAS S. JOHNSON, N e w York, N e w York,
MARK H. WRIGHT, San Antonio, Texas, Vice
TOM R. DORETY, Tampa, Florida
President
President
JAMES F. M C K E N N A , B r o o k f i e l d , W i s c o n s i n
R O N A L D S . ELIASON, P r o v o , U t a h
CHARLES C . PEARSON, JR., H a r r i s b u r g , P e n n s y l v a n i a
D. R. GRIMES, Alpharetta, Georgia
HERBERT M . S A N D L E R , O a k l a n d , C a l i f o r n i a
CORNELIUS D . M A H O N E Y , W e s t f i e l d , M a s s a c h u s e t t s
EVERETT STILES, Franklin, North Carolina
CLARENCE ZUGELTER, Kansas City, Missouri
KAREN L. MCCORMICK, Port Angeles, Washington
70
Federal Reserve Bulletin • April 2001
Federal Reserve Board Publications
For ordering
assistance,
write P U B L I C A T I O N S S E R V I C E S ,
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( 2 0 2 ) 7 2 8 - 5 8 8 6 . You may also use the publications
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on the
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site
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H o m e Mortgages: Understanding the Process and Your Right
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Keys to Vehicle Leasing (also available in Spanish)
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A71
STAFF STUDIES: Only Summaries
BULLETIN
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164.
Studies and papers on economic and financial subjects that are of
general interest. Requests to obtain single copies of the full text or
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Publications
Services.
THE
1989-92
CREDIT
CRUNCH
FOR
REAL
ESTATE,
by
James T. Fergus and John L. Goodman, Jr. July 1993.
20 pp.
167.
A SUMMARY OF MERGER PERFORMANCE STUDIES IN B A N K ING, 1 9 8 0 - 9 3 ,
PERFORMANCE"
A N D AN ASSESSMENT OF THE
AND
"EVENT
STUDY"
"OPERATING
METHODOLOGIES,
by Stephen A. Rhoades. July 1994. 37 pp.
1 7 0 . T H E COST OF IMPLEMENTING CONSUMER F I N A N C I A L R E G U -
Staff Studies 1-158, 161, 163, 165, 166, 168, and 169 are out
of print. Staff Studies 1 6 5 - 1 7 4 are available on line at
www.federalreserve.gov/pubs/staffstudies.
159.
N E W DATA ON THE PERFORMANCE OF N O N B A N K
LATIONS: A N A N A L Y S I S OF EXPERIENCE WITH THE T R U T H
IN SAVINGS ACT, by Gregory Elliehausen and Barbara R.
Lowrey. December 1997. 17 pp.
171.
T H E COST OF B A N K REGULATION: A R E V I E W OF THE E V I -
172.
U S I N G SUBORDINATED D E B T AS AN INSTRUMENT OF M A R -
DENCE, by Gregory Elliehausen. April 1998. 35 pp.
SUBSIDI-
ARIES OF B A N K H O L D I N G COMPANIES, b y N e l l i e L i a n g a n d
KET DISCIPLINE, by Study Group on Subordinated Notes
and Debentures, Federal Reserve System. December 1999.
6 9 pp.
Donald Savage. February 1990. 12 pp.
160.
BANKING
VICES
BY
MARKETS
SMALL
AND
AND
THE
USE
OF F I N A N C I A L
MEDIUM-SIZED
BUSINESSES,
SERby
Gregory E. Elliehausen and John D. Wolken. September
1990. 35 pp.
162.
EVIDENCE ON THE S I Z E OF B A N K I N G MARKETS FROM M O R T GAGE
LOAN
RATES
IN
TWENTY
Rhoades. February 1992. 11 pp.
CITIES,
by
Stephen
A.
173.
IMPROVING
PUBLIC
DISCLOSURE
IN
BANKING,
by
Study
Group on Disclosure, Federal Reserve System. March 2000.
3 5 pp.
1 7 4 . B A N K MERGERS A N D B A N K I N G STRUCTURE IN THE U N I T E D
STATES, 1980-98, by Stephen Rhoades. August 2000. 33 pp.
72
Federal Reserve Bulletin • April 2001
Maps of the Federal Reserve System
LEGEND
Both pages
• Federal Reserve Bank city
• Board of Governors of the Federal
Reserve System, Washington, D.C.
Facing page
• Federal Reserve Branch city
— Branch boundary
NOTE
The Federal Reserve officially identifies Districts by number and Reserve Bank city (shown on both pages) and by
letter (shown on the facing page).
In the 12th District, the Seattle Branch serves Alaska,
and the San Francisco Bank serves Hawaii.
The System serves commonwealths and territories as
follows: the New York Bank serves the Commonwealth
of Puerto Rico and the U.S. Virgin Islands; the San Francisco Bank serves American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands. The Board of
Governors revised the branch boundaries of the System
most recently in February 1996.
A73
1-A
2-B
3-C
4-D
5-E
Baltimore
Pittsburgh
NY
VTF
I
^
\ I
vr
Bullalo
MA
ci
RI
BOSTON
PA
/
/
™
6-F
*
WV
•Charlotte
NY
N E W YORK
MD
X
KY
PHILADELPHIA
M
CLEVELAND
RICHMOND
8-H
7-G
• Nashxille
KY
•
Birmingham
J
MO
AR
Jacksonville
LA
H
New Oilcans
^
Little /
Rock (
J
Louisville
~
MS
Mi.nni
ATLANTA
CHICAGO
ST
9-1
ND
• Helena
H
life-:
199HI
Ml
»
MINNEAPOLIS
10-J
12-L
WMMhmphHMHB
\[ \SKA
—
—
i
Oklahoma C'ii\
l\*land
OK
ISHHB
KANSAS CITY
NV
1
11-K
HAWAII
DALLAS
SAN FRANCISCO
TN
• Memphis
Louis
74
Federal Reserve Bulletin • April 2001
Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE B A N K
branch , or facility
Zip
Chairman
Deputy Chairman
President
First Vice President
BOSTON*
02106
William C. Brainard
William O. Taylor
Cathy E. Minehan
Paul M. Connolly
NEW YORK*
10045
Peter G. Peterson
Charles A. Heimbold, Jr.
Bal Dixit
William J. McDonough
Jamie B. Stewart, Jr.
Buffalo
14240
Barbara L. Walter1
PHILADELPHIA
19105
Charisse R. Lillie
Glenn A. Schaeffer
Anthony M. Santomero
William H. Stone, Jr.
CLEVELAND*
44101
Jerry L. Jordan
Sandra Pianalto
Cincinnati
Pittsburgh
45201
15230
David H. Hoag
Robert W. Mahoney
George C. Juilfs
Charles E. Bunch
RICHMOND*
23219
J. Alfred Broaddus, Jr.
Walter A. Varvel
Baltimore
Charlotte
21203
28230
Jeremiah J. Sheehan
Wesley S. Williams, Jr.
George L. Russell, Jr.
James F. Goodmon
John F. Wieland
Paula Lovell
Catherine Sloss Crenshaw
Julie K. Hilton
Mark T. Sodders
Whitney Johns Martin
Ben Tom Roberts
Jack Guynn
Patrick K. Barron
Arthur C. Martinez
Robert J. Darnall
Timothy D. Leuliette
Michael H. Moskow
William C. Conrad
Charles W. Mueller
Walter L. Metcalfe, Jr.
Vick M. Crawley
Roger Reynolds
Gregory M. Duckett
William Poole
W. LeGrande Rives
James J. Howard
Ronald N. Zwieg
Thomas O. Markle
Gary H. Stern
James M. Lyon
Terrence P. Dunn
Jo Marie Dancik
Kathryn A. Paul
Patricia B. Fennell
Gladys Styles Johnston
Thomas M. Hoenig
Richard K. Rasdall
H. B. Zachry, Jr.
Patricia M. Patterson
Beauregard Brite White
Edward O. Gaylord
Patty P. Mueller
Robert D. McTeer, Jr.
Helen E. Holcomb
Nelson C. Rising
George M. Scalise
William D. Jones
Nancy Wilgenbusch
H. Roger Boyer
Richard R. Sonstelie
Robert T. Parry
John F. Moore
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans
30303
35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
Memphis
72203
40232
38101
MINNEAPOLIS
55480
Helena
K A N S A S CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
59601
64198
80217
73125
68102
75201
79999
77252
78295
S A N FRANCISCO
94120
Los Angeles
Portland
Salt Lake City
Seattle
90051
97208
84125
98124
Vice President
in charge of branch
Barbara B. Henshaw
Robert B. Schaub
William J. Tignanelli 1
Dan M. Bechter 1
James M. McKee
Andre T. Anderson
Robert J. Slack
James T. Curry III
Melvyn K. Purcell 1
Robert J. Musso 1
David R. Allardice 1
Robert A. Hopkins
Thomas A. Boone
Martha Perine Beard
Samuel H. Gane
Carl M. Gambs 1
Kelly J. Dubbert
Steven D. Evans
Sammie C. Clay
Robert Smith III1
James L. Stull 1
Mark L. Mullinix 2
Raymond H. Laurence 1
Andrea P. Wolcott
Gordon R. G. Werkema 2
* 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
A75
Publications of Interest
FEDERAL RESERVE REGULATORY
SERVICE
To promote public understanding of its regulatory functions, the Board publishes the Federal Reserve Regulatory Service, a four-volume loose-leaf service containing all Board regulations as well as related statutes,
interpretations, policy statements, rulings, and staff
opinions. For those with a more specialized interest in
the Board's regulations, parts of this service are published separately as handbooks pertaining to monetary
policy, securities credit, consumer affairs, and the payment system.
These publications are designed to help those who
must frequently refer to the Board's regulatory materials. They are updated monthly, and each contains citation indexes and a subject index.
Requirements
The Monetary Policy and Reserve
Handbook contains Regulations A, D, and Q, plus
related materials.
The Securities Credit Transactions Handbook contains Regulations T, U, and X, dealing with extensions of credit for the purchase of securities, together
with related statutes, Board interpretations, rulings,
and staff opinions. Also included is the Board's list of
foreign margin stocks.
The Consumer and Community Affairs Handbook
contains Regulations B, C, E, G, M, P, Z, AA, BB, and
DD, and associated materials.
GUIDE TO THE FLOW OF FUNDS
ACCOUNTS
A new edition of Guide to the Flow of Funds Accounts
is now available from the Board of Governors. The new
edition incorporates changes to the accounts since the
initial edition was published in 1993. Like the earlier
publication, it explains the principles underlying the
flow of funds accounts and describes how the accounts
are constructed. It lists each flow series in the Board's
flow of funds publication, "Flow of Funds Accounts of
the United States" (the Z.l quarterly statistical release),
The Payment System Handbook deals with expedited
funds availability, check collection, wire transfers, and
risk-reduction policy. It includes Regulations CC, J, and
EE, related statutes and commentaries, and policy
statements on risk reduction in the payment system.
For domestic subscribers, the annual rate is $200 for
the Federal Reserve Regulatory Service and $75 for
each handbook. For subscribers outside the United
States, the price including additional air mail costs is
$250 for the service and $90 for each handbook.
The Federal Reserve Regulatory Service is also available on CD-ROM for use on personal computers. For a
standalone PC, the annual subscription fee is $300. For
network subscriptions, the annual fee is $300 for 1 concurrent user, $750 for a maximum of 10 concurrent
users, $2,000 for a maximum of 50 concurrent users,
and $3,000 for a maximum of 100 concurrent users.
Subscribers outside the United States should add $50
to cover additional airmail costs. For further information, call (202) 452-3244.
All subscription requests must be accompanied by a
check or money order payable to the Board of Governors of the Federal Reserve System. Orders should be
addressed to Publications Services, mail stop 127, Board
of Governors of the Federal Reserve System, Washington, DC 20551.
and describes how the series is derived from source
data. The Guide also explains the relationship between
the flow of funds accounts and the national income and
product accounts and discusses the analytical uses of
flow of funds data. The publication can be purchased,
for $20.00, from Publications Services, Board of Governors of the Federal Reserve System, Washington, DC
20551.
76
Federal Reserve Bulletin • April 2001
Federal Reserve Statistical Releases
Available on the Commerce Department's
Economic Bulletin Board
The Board of Governors of the Federal Reserve System makes some of its statistical releases available to
the public through the U.S. Department of Commerce's economic bulletin board. Computer access
to the releases can be obtained by subscription.
For further information regarding a subscription to
the economic bulletin board, please call (202) 4821986. The releases transmitted to the economic bulletin board, on a regular basis, are the following:
Reference
Number
Statistical
H.3
Aggregate Reserves
Weekly/Thursday
H.4.1
Factors Affecting Reserve Balances
Weekly/Thursday
H.6
Money Stock
Weekly/Thursday
H.8
Assets and Liabilities of Insured Domestically Chartered
and Foreign Related Banking Institutions
Weekly/Monday
H.10
Foreign Exchange Rates
Weekly/Monday
H.15
Selected Interest Rates
Weekly/Monday
G.5
Foreign Exchange Rates
Monthly/end of month
G.17
Industrial Production and Capacity Utilization
Monthly/midmonth
G.19
Consumer Installment Credit
Monthly/fifth business day
Z. 1
Flow of Funds
Quarterly
release
Frequency of release
@FedFRASER