Full text of Federal Reserve Bulletin : August 1996
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VOLUME 8 2 •
NUMBER 8 •
AUGUST 1 9 9 6
FEDERAL RESERVE
BULLETIN
B O A R D OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D . C .
PUBLICATIONS COMMITTEE
Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood • Donald L. Kohn
• J. Virgil Mattingly, Jr. • Michael J. Prell • Richard Spillenkothen • Edwin M. Truman
The Federal Reserve Bulletin is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed
except in official statements and signed articles. It is assisted by the Economic Editing Section headed by S. Ellen Dykes, the Graphics Center under the direction of
Peter G. Thomas, and Publications Services supervised by Linda C. Kyles.
Table of Contents
7 0 1 MONETARY
POLICY
REPORT
practices on behalf of the Federal Reserve and
says that the continuing growth in bank sales of
mutual funds and other uninsured investments
necessitates a commitment on the part of the
banking industry and bank supervisors to the
principle that effective disclosure of risks is in
the best interest of the customer and the banking organization, before the Subcommittee on
Capital Markets, Securities and GovernmentSponsored Enterprises of the House Committee
on Banking and Financial Services, June 26,
1996.
TO THE
CONGRESS
The U.S. economy performed well in the first
half of 1996. After rising only fractionally in the
fourth quarter of 1995, real gross domestic
product posted a solid gain over the first half
of 1996, providing a considerable lift to job
growth. Moreover, the underlying trend of prices
still appears to have been well contained: Over
the past twelve months, the consumer price
index excluding food and energy items has risen
23/4 percent—near the lower end of the narrow
range that has prevailed since early 1994. Looking ahead, the members of the Federal Open
Market Committee anticipate that economic
activity will grow more moderately, on average,
in coming quarters and that the unemployment
rate will remain around the level it has averaged
over the past year and a half.
7 1 7 INDUSTRIAL PRODUCTION
UTILIZATION FOR JUNE
AND
1996
CAPACITY
Industrial production increased 0.5 percent in
June, to 125.7 percent of its 1987 average, after
a downward revised gain of 0.5 percent in May.
Industrial capacity utilization rose 0.1 percentage point in June, to 83.2 percent.
7 2 0 STATEMENTS
TO THE
CONGRESS
Griffith L. Garwood, Director, Division of Consumer and Community Affairs, Board of Governors, comments on issues concerning the
coverage of electronic benefit transfer (EBT)
programs under the Electronic Fund Transfer
Act (EFTA) and the Board's Regulation E and
says that coverage of EBT programs by the
EFTA and Regulation E is appropriate under the
law as it currently exists so that all citizens,
regardless of the source of their electronic transactions, are covered essentially by the same
rules, before the Subcommittee on Financial
Institutions and Consumer Credit of the House
Committee on Banking and Financial Services,
June 19, 1996.
723 Edward W. Kelley, Jr., member, Board of Governors, discusses the supervision of bank sales
727
ANNOUNCEMENTS
Reappointment of Alan Greenspan as Chairman
of the Board of Governors.
Appointment of Alice M. Rivlin as a member of
the Board of Governors and as Vice Chair.
Appointment of Laurence H. Meyer as a member of the Board of Governors.
Issuance of an Investment Scheme Advisory
about the proliferation of illegal "prime bank"
financial instruments and scams.
Modification of prudential limitations established by the Board for the "riskless principal"
activities of bank holding companies.
Proposal to simplify and update the requirements of Regulation D.
Issuance of a report on the combined statement
of condition of the Federal Reserve Banks.
Publication of the June 1996 update of the Bank
Holding Company Supervision Manual.
7 3 1 LEGAL
DEVELOPMENTS
Various bank holding company, bank service
corporation, and bank merger orders; and pending cases.
7 7 8 MEMBERSHIP
GOVERNORS
SYSTEM,
OF THE BOARD
OF THE FEDERAL
OF
RESERVE
1913-96
List of appointive and ex officio members.
7 8 0 COMBINED FINANCIAL STATEMENTS
THE FEDERAL RESERVE
BANKS
OF
These financial statements were prepared by an
independent accounting firm and certify the
combined statement of condition of the Federal
Reserve Banks as of the end of 1995 together
with related statements of income and changes
in capital.
A 1 FINANCIAL
AND BUSINESS
STATISTICS
These tables reflect data available as of
June 26, 1996.
A 3 GUIDE
TO TABULAR
PRESENTATION
A4 Domestic Financial Statistics
A42 Domestic Nonfinancial Statistics
A50 International Statistics
A 6 3 GUIDE
TO STATISTICAL
SPECIAL
RELEASES
AND
TABLES
A 6 8 INDEX
TO STATISTICAL
A 7 0 BOARD
OF GOVERNORS
TABLES
AND
STAFF
A 7 2 FEDERAL OPEN MARKET COMMITTEE
STAFF; ADVISORY
COUNCILS
A 7 4 FEDERAL
A 7 6 MAPS
RESERVE
BOARD
OF THE FEDERAL
A 7 8 FEDERAL RESERVE
AND
OFFICES
PUBLICATIONS
RESERVE
BANKS,
AND
SYSTEM
BRANCHES,
Monetary Policy Report to the Congress
Report submitted to the Congress on July 18, 1996,
pursuant to the Full Employment and Balanced
Growth Act of 19781
MONETARY
ECONOMIC
POLICY
AND
THE
inflationary forces to intensify would ultimately disrupt the growth process. The Federal Reserve recognizes that its contribution to promoting the optimal
performance of the economy involves containing the
rate of inflation and, over time, moving toward price
stability.
OUTLOOK
The U.S. economy performed well in the first half of
1996. In early February, when the Federal Reserve
prepared its last report on monetary policy, there was
some concern about the strength and durability of the
current economic expansion: The economy was operating at a relatively high level of resource utilization,
but it was not exhibiting a great deal of forward
momentum. As the year has unfolded, however, economic activity has proved quite robust. After rising
only fractionally in the fourth quarter of 1995, real
gross domestic product posted a solid gain over the
first half of 1996, providing a considerable lift to job
growth. Looking ahead, the members of the Federal
Open Market Committee (FOMC) anticipate that economic activity will grow more moderately, on average, in coming quarters and that the unemployment
rate will remain around the level it has averaged over
the past year and a half.
Although overall consumer price inflation was
boosted by higher energy prices during the first half
of the year, the underlying trend of prices still appears
to have been well contained. Over the past twelve
months, the consumer price index excluding food and
energy items has risen 23/4 percent—near the lower
end of the narrow range that has prevailed since early
1994. Moreover, the deflator for personal consumption expenditures on items other than food and energy
derived from data reported in the national income
and product accounts (NIPA) has continued to show a
slowing trend.
The combination of brisk growth and favorable
underlying inflation so far this year has, of course,
been welcome. Nonetheless, mounting pressures on
resources are apparent in some segments of the
economy—most notably in the labor market—and
these pressures must be monitored closely. Allowing
1. The charts for the report are available on request from Publications Services, Mail Stop 127, Board of Governors of the Federal
Reserve System, Washington, DC 20551.
Monetary Policy, Financial Markets, and the
Economy over the First Half of 1996
Information available around the turn of the year
suggested that the economy had downshifted after
posting a strong gain in the third quarter of 1995. The
growth of final demand appeared to have slowed,
reflecting importantly a deceleration of consumer
spending. In addition, hesitant growth abroad and a
strengthening in the foreign exchange value of the
dollar relative to the levels prevailing at mid-1995
were seen as limiting the prospects for further growth
in exports. The slowdown in the growth of final
demand had given rise to inventory buildups in
some industries; in turn, the production cutbacks
undertaken in response to those buildups were having
a further damping effect on economic activity. Meanwhile, data on prices and wages suggested that inflation performance continued to be fairly satisfactory—
indeed, better than many members of the FOMC had
expected as of midyear 1995. To keep the stance of
monetary policy from becoming effectively more
restrictive owing to the slowdown in inflation in the
second half of last year and to promote sustainable
growth, the Committee eased the stance of policy in
December 1995 and again at the end of January 1996,
bringing the federal funds rate down a half percentage point in total, to 5XA percent.
Most participants in financial markets were unsurprised by these policy adjustments, given the economic backdrop. Moreover, they anticipated that
there would be scope for additional easing steps in
the coming months. Thus, between mid-December
and the end of January, interest rates on Treasury
securities generally moved lower, especially at short
and intermediate maturities, and stock price indexes
edged higher on balance. The dollar strengthened
slightly on net against the currencies of the other
Group of Ten (G-10) countries, reflecting, in part,
702
Federal Reserve Bulletin • August 1996
disappointing news about the pace of activity in
Europe and consequently larger declines in interest
rates there than in the United States.
The underlying trends in the economy early in the
year were obscured to a degree by extraordinarily
adverse weather that affected a significant part of the
country. Through the course of the next few months,
however, it became increasingly clear that the economy had regained vitality. Consumer spending
perked up after a lackluster holiday season and was
only temporarily depressed by the severe winter.
Business demand for equipment proved quite strong,
as did housing demand. The strengthening in sales
facilitated businesses' efforts to control their inventories, and as that situation improved, industrial
production rebounded smartly. Overall employment
growth was brisk, and by June the unemployment
rate reached its lowest level in six years.
Inflation during the first half of the year was generally well behaved. Energy prices surged, mainly in
response to a run-up in the world price of oil, and bad
news about grain crops raised the prospect of higher
food prices down the road. However, price inflation
for consumer items other than food and energy held
steady or moved a bit lower. Labor costs presented a
mixed picture. The increase in total hourly compensation over the first three months of the year, as
measured by the employment cost index (ECI), was
in line with its recent moderate trend. However,
within total compensation, the wage and salary component of the ECI surged in the first quarter, and
further signals of wage acceleration came from a
more rapid increase in average hourly earnings in the
second quarter.
Against the backdrop of stronger activity but subdued inflation trends, the Federal Reserve made no
adjustments to its policy stance after January. With
economic activity more clearly on the upswing, however, and prospects for a breakthrough on the federal
budget seeming to fade, intermediate- and long-term
interest rates reversed course in February and trended
up over subsequent months. Since the end of December, the yield on the thirty-year Treasury bond has
increased about 1 percentage point, on net, while the
yield on the five-year note has risen about VA percentage points over the same period. The rate on
three-month bills has edged up only slightly. Despite
the backup in bond yields, major stock-price indexes
rose considerably further through the first half of the
year; most of those gains were erased in late June and
the first half of July, however, as company reports
raised questions about the pace of earnings growth.
The rise in bond yields has boosted the dollar in
foreign exchange markets; since mid-April, the dollar
has generally traded against an average of the currencies of the other major industrial countries about
4 percent above its level at the end of December.
During the first half of the year, credit remained
easily available to most household and business
applicants. Interest rate spreads on private debt over
Treasury securities remained narrow. In response to
the recent increase in delinquencies on credit card
accounts, many banks have tightened their standards
for approval of new accounts, but this appears to
have only partially reversed a marked relaxation of
such standards earlier this decade, and banks overall
remain aggressive in the pursuit of new borrowers,
especially business clients. The debt of all domestic
nonfinancial sectors combined expanded at about a
43/4 percent annual pace, placing this aggregate near
the middle of its monitoring range. M2 and M3 are
currently near the 5 percent and 6 percent upper
boundaries of their respective growth ranges, in line
with the FOMC's expectation as of last February. In
contrast to the experience of the early 1990s, growth
in the monetary aggregates relative to nominal gross
domestic product has been broadly in line with historical relationships, given the structure of interest
rates.
Economic
Projections
for 1996 and
1997
As noted previously, the members of the Board of
Governors and the Reserve Bank presidents, all of
whom participate in the deliberations of the Federal
Open Market Committee, generally think it likely
that economic activity will return to a moderate
growth path in the second half of 1996 and in 1997
after the larger gains in the first half of this year. The
resulting increase in real GDP over 1996 as a whole
would be in the range of 2Vi percent to 23/4 percent,
somewhat above the forecasts in the February report
on monetary policy. For 1997, the central tendency of
the forecasts spans a range of 13A percent to 2 XA percent. The civilian unemployment rate, which averaged around 5V2 percent in the second quarter of
1996, is expected to stay near this level through the
end of this year and perhaps to edge higher during
1997.
Economic activity clearly retains considerable
momentum. The trend in final demand is positive,
and inventories appear to be well aligned with the
current pace of sales—perhaps even a bit lean.
Accordingly, the members of the FOMC recognize
the possibility that growth could remain elevated a
while, with the potential for putting greater pressure
on resources. Nonetheless, most members think that
Monetary Policy Report to the Congress
703
some slowing from the rapid growth pace recorded,
on average, in the first half is the most likely outcome. Housing construction and other interestsensitive activity should be restrained to some degree
by the rise in long-term interest rates over the past
several months. And although some of the lagging
economies abroad are expected to perform better this
year, there are still concerns about the solidity of that
acceleration and the associated lift to U.S. exports. In
addition, growth in real business fixed investment
appears to be tapering off, although spending will
likely remain buoyant because of the rapid rate of
product innovation and dramatic price declines in the
computer area. Consumer spending is also expected
to grow less rapidly in coming quarters. Household
wealth has been boosted substantially by the run-up
in stock prices over the past year and a half, but
for many households, debt burdens have risen significantly in recent years and may represent a constraint
on purchases of big-ticket items.
Most members of the FOMC expect the rise in the
consumer price index over the four quarters of 1996
to be in the range of 3 percent to 3lA percent, about
VA percentage point higher than they predicted last
winter. The projected increase in the consumer price
index is also somewhat larger than that recorded in
1995. However, that step-up would mainly reflect
developments in the food and energy sectors, which
are likely to add to overall inflation in 1996 after
having damped it in 1995. Apart from these volatile
sectors, inflation has remained in check so far this
year despite high levels of resource utilization and
reports that tightness in some parts of the labor
market is placing upward pressure on wages. Assuming no further adverse shocks to food and energy
prices, and in the context of the Federal Reserve's
intent to keep trend inflation well contained, the
Committee believes that overall CPI inflation should
recede. Accordingly, the central tendency of the
FOMC's forecasts shows CPI inflation dropping back
to the range of 23A percent to 3 percent in 1997.
The Committee's inflation projections incorporate
the technical improvements the Bureau of Labor
Statistics is making to the CPI in 1996 and 1997;
they are expected to shave a little from inflation in
both years. The Committee also recognizes that the
remaining biases in the CPI are not negligible and
may not be stable over time. Thus, it will continue to
monitor a variety of alternative measures of price
change as it attempts to gauge progress toward the
long-run goal of price stability.
The Administration has just released its midyear
update to its economic and budgetary projections. Its
forecasts for real growth and inflation in 1996 and
1997 are broadly in line with the central tendencies of
the forecasts of Federal Reserve policymakers.
1.
Money and Debt Ranges for 1996 and
E c o n o m i c projections for 1996 and 1997
1997
Percent
Federal Reserve governors
and Reserve Bank presidents
Administration
Indicator
n.nn.
Range
Central
tendency
1996
Change, fourth
quarter
to fourth
quarter1
Nominal G D P
Real G D P
Consumer price index 2
..
43/4-5%
21/2-3
3-3'/4
5-51/2
254-2*4
3 - 3 V*
5.0
2.6
3.2
5V*-53A
About 5Vi
5.6
Average level,
fourth
quarter
Civilian unemployment
At its meeting earlier this month, the Committee
reaffirmed the ranges for 1996 growth of money and
debt that it had established in February: 1 percent to
5 percent for M2, 2 percent to 6 percent for M3, and
3 percent to 7 percent for the debt of the domestic nonfinancial sectors. In addition, the Committee
set provisional growth ranges for 1997 at the same
levels.
In setting the ranges for M2 and M3, the Committee intended to communicate its expectation as to the
growth of these monetary aggregates that would
1997
Change, fourth
quarter
to fourth
quarter1
Nominal G D P
Real GDP
Consumer price index 2
2.
..
Average level,
fourth quarter
Civilian unemployment
rate
4-51/2
V/Z-2V2
21/2-3'/4
414-5
P/4-2'/4
2^/4-3
5.1
2.3
2.8
5V4-6
5>/2~53/4
5.7
1. Change from average for fourth quarter of preceding year to average for
fourth quarter of year indicated.
2. All urban consumers.
R a n g e s f o r g r o w t h of m o n e t a r y a n d d e b t a g g r e g a t e s
Percent
Aggregate
M2
M3
Debt'
1995
1996
Provisional for
1997
1-5
2-6
3-7
1-5
2-6
3-7
1-5
2-6
3-7
NOTE. Change from average for fourth quarter of preceding year to average
for fourth quarter of year indicated.
1. Monitoring range for debt of domestic nonfinancial sectors.
704
Federal Reserve Bulletin • August 1996
result under conditions of approximate price stability,
assuming that the aggregates exhibit the same trends
relative to nominal spending that prevailed for many
years until the early 1990s and that seem to have
reemerged after an intervening period of marked
deviation. Based on that reemergence and on Committee members' expectations for the growth of
nominal GDP in 1996 and 1997, the Committee
anticipates that both M2 and M3 will probably finish
near the upper boundaries of their respective ranges
each year. The Committee expects that the debt of the
domestic nonfinancial sectors will remain near the
middle of its monitoring range in 1996 and 1997. In
light of the rapid pace of technological change and
innovation still occurring in the financial sector—and
the attendant uncertainty about the future behavior of
the aggregates—the Committee will continue to rely
on a wide range of other information in determining
its policy stance.
ECONOMIC
IN
AND FINANCIAL
DEVELOPMENTS
1996
Economic activity has increased substantially thus far
this year. Real gross domestic product grew at an
annual rate of about 2lA percent in the first quarter of
1996, and the available data point to a much larger
increase in the second quarter. The increases in activity have been facilitated by generally supportive
financial conditions: Although long-term interest
rates have risen considerably on net since early 1996,
intermediaries have continued to supply credit to
most borrowers on favorable terms, and interest rate
spreads on corporate securities over Treasury securities have remained narrow. In the foreign exchange
markets, the dollar has appreciated, on average,
against the currencies of the other major industrial
countries.
Economic
Developments
The Household Sector
After a sluggish performance in late 1995, spending
by households has picked up noticeably this year.
Consumer expenditures increased about V/i percent
at an annual rate in real terms in the first quarter and
appear to have posted another sizable gain in the
second quarter. In addition, according to indexes such
as those compiled by the Survey Research Center
at the University of Michigan and the Conference
Board, consumer sentiment has generally been rela
tively upbeat. In the real estate market, sales of new
single-family dwellings have posted an average level
well above that of last year, thus encouraging builders to boost housing starts.
Outlays for durable goods have continued to be the
strongest component of spending, extending the longstanding uptrend in the share of durables in total real
consumption. Declining relative prices and the availability of innovative products have continued to lift
demand for home electronic equipment and software
products. In addition, sales of light motor vehicles,
bolstered by relatively generous incentives and perhaps by the cash freed up by the surge in mortgage
refinancings last winter, averaged a healthy 15 million unit annual rate in the first half of 1996.
After a lackluster performance in 1995, real outlays for nondurable goods have also risen this year;
the average level of these expenditures in April and
May was nearly 3 percent at an annual rate above that
recorded in the fourth quarter. Meanwhile, spending
on services has remained on a moderate uptrend, with
short-run variations reflecting the effects of weather
on household energy use.
Consumer spending has been supported by brisk
gains in wage and salary income associated with
the better pace of hiring this year. However, other
components of before-tax income, taken together,
have risen less rapidly than they did in 1995, and
gains in after-tax income were restrained by largerthan-usual tax bills (final payments less refunds) this
spring. Accordingly, the level of the personal saving
rate in May was somewhat below that recorded in
late 1995, although fragmentary data suggest that
saving rose sharply in June. In any event, taking a
longer perspective, spending and income have grown
at roughly similar rates over the past few years, and
the saving rate has generally fluctuated in a fairly
narrow band between 4 percent and 5 percent since
1993—a low level historically.
The recent developments in financial markets may
have had an important influence on the spending
decisions of individual households. In particular,
households holding large stock portfolios have
enjoyed sizable increases in wealth over the past year
and a half, which may be inducing them to consume
greater fractions of their incomes than they would
otherwise. At the same time, a growing number of
households are apparently finding it difficult to meet
their debt-service obligations, judging from the
appreciable rise in delinquency rates on consumer
loans in recent years. In addition, it is possible that
job insecurity and longer-run concerns about retirement income have caused many households to raise
their targets for asset accumulation. However, the
Monetary Policy Report to the Congress
relative stability of the saving rate over the past few
years suggests that the net effect of these factors
on overall consumption—at least to date—has been
limited.
Residential construction has, on the whole, been
robust this year. Private housing starts averaged
nearly 1.5 million units at an annual rate through
June, a pace appreciably above that in 1995. In
addition, the volume of shipments of mobile homes
("manufactured housing"), which has doubled over
the past five years, now stands around 350,000 units
at an annual rate, the highest level since 1974.
In the single-family sector, starts and sales of new
homes were surprisingly firm in the face of severe
weather in early 1996, and they moved still higher in
the second quarter. Moreover, the regular survey of
the National Association of Homebuilders continued
to indicate solid demand through early July, and the
Mortgage Bankers Association reported that loan
applications for home purchases remained brisk
through midyear.
Relative to the lows reached in early 1996, the rate
on thirty-year conventional fixed-rate home mortgages has risen nearly 1 Vi percentage points and has
been fluctuating around 8'/4 percent in recent weeks.
However, a number of factors seem to have cushioned the effects of these higher mortgage rates. In
particular, rates on adjustable-rate mortgages have
risen only about half as much as have those on
thirty-year fixed-rate loans. Also, house prices have
firmed somewhat, which may have raised confidence
in the investment value of residential real estate and
thus contributed to the recent rise in the homeownership rate, which is now at its highest level since the
early 1980s. Probably more important in this regard,
however, is the trend in the affordability of housing.
One simple measure of affordability is the monthly
mortgage payment on a new home having a given set
of attributes, divided by average monthly household
income. Despite the increase in mortgage rates this
year, this measure suggests that the cash-flow burden
of homeownership is still only modestly above the
lows of the past thirty years.
Construction of multifamily housing averaged
about 300,000 units at an annual rate in the first half
of 1996, a rate somewhat above that in 1995 but
a fairly low one historically. Market conditions vary
geographically, but the rental vacancy rate for the
nation as a whole seems to have tilted back up, after
generally trending down between mid-1993 and mid1995. Also, the absorption rate, which measures the
percentage of apartments that are rented within three
months of their completion, edged back down in
1995 after several years of increases.
705
The Business Sector
Developments in the business sector were quite
favorable in the first half of 1996. After decelerating
in 1995, real business fixed investment rose at a
\2Vi percent annual rate in the first quarter of 1996,
with sizable advances for both equipment and structures. And, although real investment appears to have
decelerated again in the second quarter, it probably
posted an appreciable gain. Over the past four years,
real investment has grown around 8 percent per year,
on average, and now stands at a level that implies
quite substantial growth in the capital stock. The
updating of capital and the increase in capital per
worker are key to lifting productivity growth and
living standards.
Outlays for producers' durable equipment rose at
an annual rate of about 14 percent in real terms in the
first quarter, after a IVi percent rise over the course of
1995. As has been true throughout the expansion,
much of the first-quarter growth was in real outlays
for computers and other information-processing
equipment; such investment received particular
impetus from extensive price cutting in virtually all
segments of the computer market and from a push
to acquire the state-of-the-art equipment needed
to take full advantage of popular new software and
opportunities for information transfer. However,
incoming orders data and recent anecdotal reports
suggest that the growth in real outlays for computers
may be slowing. Meanwhile, demand for other types
of capital equipment, which had softened in 1995,
firmed somewhat in the first quarter.
In the nonresidential construction area, real investment continued to expand in the first quarter. However, the monthly data suggest that outlays softened
in the second quarter, an occurrence that is consistent
with the downturn in contracts—a forward-looking
indicator of construction outlays—since late 1995.
Trends within the construction sector have been
divergent. In the office sector, the modest recovery
that seemed to be under way appears to have waned
even though vacancy rates have continued to fall and
transactions prices have continued to rise. Outlays
dropped noticeably in the fourth quarter of 1995 and
the first quarter of 1996, and preliminary data suggest
that they remained at a fairly low level in the second
quarter. In contrast, spending for commercial structures other than office buildings, which has been
rising briskly since 1992, continued to advance
through the first quarter—although further gains may
be limited by an emerging excess of retail space in
some parts of the country and the recent leveling out
of transactions prices. Elsewhere, outlays for indus-
706
Federal Reserve Bulletin • August 1996
trial construction, which had moved up over 1994
and the first half of 1995, have been nearly flat over
the past few quarters, while construction of hotels
and motels, which account for less than 10 percent of
structures outlays, has boomed.
Investment in nonfarm business inventories slowed
dramatically in the fourth quarter of 1995 after running at a fairly rapid pace over much of last year, and
it nearly ceased in the first quarter of 1996 as motor
vehicle stocks plummeted. Automotive stocks had
risen appreciably over the second half of 1995, and
some reduction was in train even before a March
strike at General Motors curbed production; with
the strike, dealer stocks were drawn down sharply.
In addition, although firms outside motor vehicles
apparently made considerable progress in rectifying
inventory imbalances in late 1995, many continued to
restrain production in response to continued weak
orders in early 1996; producers of household durables and textiles are notable examples.
Inventory investment evidently rebounded in the
second quarter, mainly because motor vehicle stocks
stabilized as sales and production returned to
rough balance. Outside of motor vehicles, stocks
accumulated moderately, on balance, in April and
May. As of May, inventory-sales ratios for all major
sectors were noticeably below their levels in late
1995; the decline in the ratio for retailers was especially steep.
Economic profits of all U.S. corporations continued
to surge in the first quarter, extending the steep climb
that began in the early 1990s. The strength in profits
in recent quarters has been attributable in large part to
robust earnings growth at domestic financial institutions and a rebound in profits at foreign subsidiaries
of U.S. corporations. In the domestic nonfinancial
corporate sector, the profit share—pretax profits
divided by the sector's GDP—has been hovering
around 10 percent since mid-1994, after having risen
appreciably over the preceding few years; its current
level is similar to the levels attained in the mid-1980s
but well below the highs of the 1960s and 1970s.
About half of the increase in the sector's profit share
since the early 1990s has reflected a reduction in net
interest expenses.
The Government Sector
Although the nation continues to grapple with the
prospect of growing federal budget deficits in the
years ahead, the incoming news on the budget for
fiscal 1996 has been extremely favorable. The deficit
in the unified budget over the first eight months of the
fiscal year—the period from October to May—was
only $109 billion, $27 billion less than during the
comparable period of fiscal 1995. The improvement
in the deficit primarily reflected exceptionally rapid
growth in receipts; outlays continued to rise at about
the same pace as had been recorded, on average, over
the preceding four years. If present trends continue,
the fiscal 1996 deficit, when measured as a percentage of nominal GDP, will be the smallest since 1979.
Federal receipts in the first eight months of fiscal
1996 were 8 percent higher than in the same period a
year earlier; the rise was considerably greater than
that of nominal GDP. Boosted by the upswing in
business profits, corporate taxes have been increasing
at double-digit rates since fiscal 1993, and that path
has extended into fiscal 1996. Individual income
taxes have also risen sharply this year; little information is available on the factors behind the surge in
individual payments, but it may have resulted, at least
in part, from capital gains realizations associated
with the strong performance in financial markets last
year.
In total, federal outlays in the first eight months of
fiscal 1996 were 4 percent higher than during the
corresponding period of fiscal 1995. Outlay growth
was damped by the reductions in discretionary
domestic spending implied by this year's appropriations legislation. However, expenditures for "mandatory" programs continued to rise rapidly, and net
outlays for deposit insurance were less negative than
in 1995 (that is, insurance premiums and the proceeds from net sales of thrift assets declined). In
addition, net interest payments increased moderately,
reflecting the growth in the stock of outstanding
federal debt.
Federal expenditures on consumption and
investment—the part of federal spending included
directly in GDP—increased at an annual rate of about
6 percent in real terms in the first quarter of 1996
after declining about 13 percent in the fourth quarter
of 1995. In part, real spending rose in the first quarter
because the government shutdowns that occurred during the budget crisis depressed real spending less in
the first quarter than in the fourth. Even so, given the
enacted appropriations, the first-quarter increase was
almost surely a transitory spike.
The fiscal position of states and localities has been
relatively stable in the aggregate over the past few
years. As measured in the NIPA, the surplus (net of
social insurance funds) in the sector's operating
accounts has fluctuated in the range of $30 billion to
$40 billion (annual rate) since the beginning of 1994;
it stood around the middle of that range in the first
Monetary Policy Report to the Congress
quarter. On the whole, these governments are in
considerably better shape than they were in the early
1990s. Even so, the sector remains under pressure to
balance rising demand for services—especially in
education, corrections, and health care—against the
public desire for tax relief.
Real expenditures on consumption and gross
investment—the part of state and local spending
included directly in GDP—declined somewhat in the
first quarter of 1996. However, the decrease reflected
primarily the effects of the unusually adverse winter
weather, and spending appears to have rebounded in
the second quarter. State and local employment
posted a respectable gain, on net, over the first six
months of the year. In addition, outlays for construction rose about 3V2 percent in real terms over the year
ending in the first quarter, reflecting higher spending
on highways and schools; monthly construction data
through May suggest that spending rose substantially
in the second quarter.
Receipts of state and local governments rose about
4 percent in nominal terms over the year ending in
the first quarter, about matching the rise in nominal
GDP. The sector's own-source general receipts,
which comprise income, corporate, and indirect
business taxes, rose about 1 percentage point faster,
with solid gains in all major components. Federal
grants have changed little, on net, over the past
four quarters.
The External Sector
The nominal trade deficit in goods and services widened from its low fourth-quarter level of $78 billion
at an annual rate to $97 billion in the first quarter of
1996, slightly less than the deficit of $105 billion for
1995 as a whole. The current account deficit stood at
$142 billion (annual rate) in the first quarter, about
the same as the figure for 1995 as a whole. In April,
the trade deficit increased from the average level for
the first quarter.
After expanding very slowly during the second
half of 1995, the quantity of U.S. imports of goods
and services rose about 10 percent at an annual rate
in the first quarter, and preliminary data for April
show another sizable increase. The rebound in
imports largely reflected the strengthening of U.S.
economic activity. In addition, non-oil import prices
have declined somewhat since last fall, after having
risen sharply in late 1994 and early 1995. A turnaround in imported automotive vehicles, consumer
goods, and non-oil industrial supplies, following
707
more than six months of declines, accounted for most
of the increase in imports during the first four months
of 1996.
The quantity of U.S. exports of goods and services
expanded at a 2 percent annual rate during the first
quarter; it also appears to have expanded at about this
pace in April. The somewhat subdued pace of export
growth so far this year reflects, in part, a bunching of
shipments, particularly of machinery, that resulted in
an unusually strong increase in exports in the fourth
quarter of last year.
Trends in economic activity have varied across the
major foreign industrial countries so far in 1996. In
Japan, economic recovery appears to have taken hold,
although the underlying pace of real GDP growth is
clearly less than the nearly 13 percent annual rate
reported for the first quarter; the first-quarter growth
rate was boosted, in part, by a temporary surge in
government spending and measurement practices
associated with the leap year.2 In Canada, growth
remained subdued in the first quarter as real GDP
rose only 1 lA percent at an annual rate despite much
stronger growth in domestic demand; indicators for
the second quarter suggest some strengthening.
Economic performance so far this year in Europe
has been mixed. In Germany, real GDP declined
another IV2 percent at an annual rate in the first
quarter, largely because severe weather caused a substantial contraction in construction spending; preliminary data suggest that construction activity rebounded
in the second quarter with the return to more normal
weather. In contrast, French real GDP expanded
nearly 5 percent at an annual rate in the first quarter,
supported by a very sizable rebound in consumption
as well as leap-year effects; strikes during the fourth
quarter of last year depressed economic activity and
contributed to a decline in private consumption
spending. Indicators for the second quarter suggest
that output growth moderated from its first-quarter
pace. In the United Kingdom, real GDP grew at an
annual rate of IV2 percent during the first quarter,
somewhat more slowly than during the second half of
1995. On the policy front, most European countries
are seeking to rein in their fiscal deficits during 1996
and 1997, in part to comply with the criterion in the
Maastricht Treaty that countries participating in the
third stage of the European Monetary Union, now
scheduled to begin on January 1, 1999, not have
excessive fiscal deficits. As a reference value, the
2. Although the statistical agencies in many countries take the
number of working days in the quarter into account when seasonally
adjusting data, the statistical agencies in Japan, France, and Italy
among the G-10 countries do not make working-day adjustments.
708
Federal Reserve Bulletin • August 1996
treaty specifies that deficits greater than 3 percent of a
country's GDP are excessive, but it also provides
scope for accepting deficits above that level in some
circumstances.
In Mexico, robust growth of real GDP in the first
quarter extended the recovery in economic activity
that began in the second half of 1995. Through June,
the Mexican trade balance remained roughly stable
at the level reached toward the end of last year
after having improved markedly over the course of
1995. Argentina also appears to be emerging from
the steep declines in output experienced during the
first half of 1995, while Chile continues to enjoy
steady growth. Activity in Brazil has begun to expand
again in recent months, following a sharp contraction
in mid-1995.
Economic growth in our major Asian trading partners (other than Japan) appears to have picked up
again this year after slowing noticeably during the
second half of 1995 from the extremely rapid rates
recorded in 1994 and the first half of 1995. The
recent pickup in activity was associated with an easing of monetary policy in some of these countries in
the second half of last year and the early part of this
year. In China, output appears to have expanded
during the first quarter at around the 10 percent
annual rate recorded in 1995, with a pickup in consumption spending compensating for weaker growth
in the external sector.
Consumer price inflation generally stayed low in
the major foreign industrial countries and declined
or remained moderate elsewhere. In Japan, prices in
the second quarter, on average, were slightly above
their year-earlier levels because of the effects of yen
depreciation on import prices; this upturn followed a
year of deflation. In western Germany, inflation
slowed through June to only about 1 lA percent. Inflation in Italy remained higher than in the other major
foreign industrial countries but slowed to below
4 percent through June. In Canada, inflation also
moved down further this year, to about IV2 percent in
May.
Inflation trends in Latin America have been mixed.
In Mexico, the twelve-month change in consumer
prices diminished to about 32 percent in June, compared with a reading of 52 percent for the twelve
months ending in December 1995. Consumer price
inflation has also declined further in Brazil and
remained low in Argentina. In contrast, prices have
picked up in Venezuela in response to the depreciation of its currency associated with the adoption of a
program of macroeconomic stabilization. In Asia,
inflation has decreased so far in 1996 in China and
remained moderate to low elsewhere.
Labor Market Developments
Labor demand was strong over the first half of 1996.
Growth in nonfarm payroll employment exhibited
considerable month-to-month variability but averaged a hefty 235,000 per month. In addition, the
civilian unemployment rate remained low, holding in
the narrow range around 5V2 percent that has prevailed since late 1994.
Employment gains were fairly broadly based over
the first half of the year. The services sector, which
now accounts for nearly 30 percent of nonfarm employment, continued to be a mainstay of job growth,
showing increases of nearly 120,000 per month, on
average, over the first half. Within services, growth
in employment in business services remained rapid,
with large gains at computer and data processing
firms as well as at temporary help agencies, and
employment in health services trended up further.
In addition, construction payrolls rose a brisk 30,000
per month, on average—an annual rate of about
7 percent. Elsewhere, payrolls at wholesale and retail
trade establishments continued to increase at about
the same pace as that in 1995, and employment in the
finance, insurance, and real estate category picked up
after having been nearly flat over 1994 and 1995.
Developments in manufacturing were uneven but
showed some improvement in the second quarter. As
1996 started, firms were still adjusting employment
to the slower path of output that had been evident
since early 1995, and payrolls—especially at firms
producing nondurable goods—were reduced further.
In the past three months, manufacturing employment
has held fairly steady, buoyed by the pickup in industrial activity, and the average factory workweek,
which had contracted appreciably in 1995, trended up
through June.
For the nonfarm business sector as a whole, productivity rose at an annual rate of about 2 percent in
the first quarter of 1996, echoing the acceleration in
output. However, productivity had posted an outright
decline in the fourth quarter of 1995; all told, productivity rose about 1 percent over the year ending in the
first quarter of 1996, in line with the average pace
this decade. In the manufacturing sector, productivity
rose 41/4 percent over the past year, although the
reported increase was probably overstated because
firms in this sector have been relying increasingly on
workers supplied by temporary help firms, who are
counted as service industry employees rather than as
manufacturing employees in the establishment survey of the Bureau of Labor Statistics.
Labor force participation has remained sluggish
this year. The participation rate, which measures the
Monetary Policy Report to the Congress
percentage of the working-age population that is
either employed or looking for work, did retrace the
dip that occurred in late 1995. But taking a longer
perspective, the overall participation rate (adjusted
for the redesign of the household survey in 1994) has
changed little, on net, since 1989 after rising fairly
steadily from the mid-1960s to the late 1980s. The
flattening reflects mainly a marked deceleration in
women's participation, owing both to a leveling off
in the percentage of women who are in the labor
force for at least part of a given year and slower
growth in the average number of weeks they spend in
the labor force that year. Moreover, with the average
number of weeks these women spend in the labor
force having risen to a level only slightly below the
average for men, a significant rebound in participation does not seem very likely over the near term.
The sluggishness in participation tends to restrain the
growth of potential output unless it is offset by a
better productivity performance or by faster growth
in the working-age population—neither of which has
yet been in evidence.
Despite the tightness in labor markets in recent
quarters, the broad trends in hourly compensation
appear to have held fairly steady. The employment
cost index for private industry—a measure that
includes wages and benefits—rose at an annual rate
of about 3 percent over both the first three months
of 1996 and over the twelve months ending in
March; the ECI had also increased about 3 percent
over the twelve months ending in March 1995. Compensation growth has continued to be damped by a
marked deceleration in employer-paid benefits—
especially payments for medical insurance, which
have been restrained by the slowing in medical care
costs, the switch in insurance arrangements from
traditional indemnity plans to health maintenance
organizations and other managed care plans, and
changes in the provisions of health plans (including greater sharing of health care costs by employees). On the whole, wages also seem to have been
held in check, although the most recent data may
be hinting at some acceleration. Notably, the wage
and salary component of the ECI rose sharply in
the first quarter; although the data are volatile
and the first-quarter figure likely overstates current
wage trends, the twelve-month change in the series
moved up to 3lA percent, nearly Vi percentage
point larger than the increases in the preceding two
years. Separate data on average hourly earnings of
production or nonsupervisory workers also show a
recent acceleration in wages; the twelve-month
change in this series moved up to about V/2 percent
in June.
709
Price Developments
The underlying trend of prices has remained favorable this year—notably, the CPI excluding food and
energy rose at an annual rate of 23A percent over the
first six months of the year, near the lower end of the
narrow range than has been evident since early 1994.
Developments in food and energy markets boosted
overall inflation, however, and the total CPI rose at an
annual rate of 3V2 percent over the first half; this
pattern was the reverse of that seen in 1995, when a
small drop in energy prices, combined with only a
modest increase in food prices, held the rise in the
total CPI to just 2V2 percent. Meanwhile, the producer price index for finished goods rose about
23A percent over the twelve months ending in June;
excluding food and energy, the PPI rose 1V2 percent,
a bit less than over the preceding year.
Consumer energy prices picked up around the turn
of the year and rose at an annual rate of about
12 percent, on net, over the first six months of 1996.
With crude oil stocks drained by strong worldwide
demand for heating oil and weather-related supply
disruptions in the North Sea and elsewhere, the
spot price of West Texas intermediate (WTI) soared
from around $18 per barrel, on average, in the second
half of 1995 to a high of around $25 per barrel in
mid-April; the WTI price has since retraced much
of that run-up. Reflecting the surge in crude oil
prices, retail prices of refined petroleum products
rose sharply through May, on balance. However, they
fell markedly in June, and private surveys of gasoline
prices imply a further decrease in early July.
Retail food prices rose at an annual rate of about
4 percent over the first six months of 1996, somewhat
above the pace of the preceding few years. At the
farm level, prices of grains and other commodities
rose to exceptionally high levels as adverse crop
conditions in some parts of the country exacerbated
an already tight stock situation. For some foods—
notably, dairy products, cereals and bakery products,
poultry, and pork—the pass-through tends to occur
relatively rapidly, and retail prices of such items have
already risen appreciably. Beef prices fell through
May as producers sold off herds in response to higher
feed costs and poor range conditions; they turned
around in June and will likely rise further over the
next several quarters as the selloff of breeding stock
will eventually lead to tighter supplies.
Price increases for consumer goods other than food
and energy slowed to 1 percent at an annual rate
over the first half of 1996, after averaging about
1V2 percent per year over the preceding three years.
Increases in goods prices have been restrained, in
710
Federal Reserve Bulletin • August 1996
part, by the uptrend in the dollar since mid-1995,
which has helped to damp import prices. In addition,
with the operating rate in the manufacturing sector
having fallen to about its long-term average, pressure
from the materials side has been limited. Indeed, the
PPI for intermediate materials (excluding food and
energy) actually fell a bit over the past twelve
months, after having risen IVi percent over the
preceding year. Looking ahead, however, the latest
report from the National Association of Purchasing
Managers suggests that vendor performance deteriorated markedly in June, a development that could
portend some firming of prices of materials and supplies over the near term.
Prices of non-energy services rose 33/4 percent at
an annual rate over the first half, about the same
as the rise over 1995 as a whole. Airfares accelerated significantly in the first half. However, shelter
costs increased less rapidly than they had in 1995,
and prices of medical care continued to decelerate;
over the six months ending in June, the CPI for
medical care services rose at an annual rate of only
about 3j/4 percent, roughly 1 percentage point below
the 1995 pace. Moreover, there is some evidence
that the CPI may be understating the recent slowing in medical care inflation, in part because it
does not fully capture the discounts negotiated
between medical providers and insurers, including
managed care plans. The price measure used to
deflate consumer expenditures on medical care in the
NIPA better reflects such factors; it rose less than
2 percent over the year ending in the first quarter of
1996 after having risen AVi percent over the preceding year.
Judging from the various surveys of consumers
and forecasters, expectations of near-term CPI inflation deteriorated slightly in the first half of 1996.
Notably, although both the University of Michigan
and the Conference Board had reported a noticeable
drop in their one-year-ahead measures in the second
half of 1995, that improvement was not sustained in
1996; the recent monthly readings have bounced
around, but the June results from both surveys were
similar to those recorded, on average, in the first half
of 1995. In contrast, longer-run inflation expectations, which have presumably been less affected by
the recent news in food and energy markets, have
held fairly steady. Smoothing through the monthly
data, the University of Michigan's measure of
expected CPI inflation over the next five to ten years
has not changed much since late 1994, and the survey
of professional forecasters conducted by the Federal
Reserve Bank of Philadelphia during the second quarter of 1996 produced the same expectation for the
succeeding ten years as that in the survey taken in the
fourth quarter of 1995.
Financial
Developments
Credit
Financial conditions in the first half of 1996 supported the pickup in the growth of spending. For the
most part, lenders continued to pursue credit applicants aggressively as reflected, for example, in narrow spreads of interest rates on corporate securities
over those on Treasury securities. The debt of domestic nonfinancial sectors increased about 43A percent
at an annual rate from the fourth quarter of 1995
through May of this year, a pace that was a bit slower
than last year but still sufficient to place the level of
this aggregate in the middle of its monitoring range
for 1996.
The Government Sector. Federal debt outstanding
increased about 4 percent at an annual rate over the
first half of 1996, a shade below the average rate of
increase last year. The impasse over the debt ceiling
disrupted the timing and size of some Treasury auctions but did not alter the longer-term trajectory of
federal debt.
The pattern of net borrowing by state and local
governments in the past several years has been
heavily influenced by their efforts to retire debt issued
at relatively high interest rates in the mid-1980s.
They have pursued these efforts through a strategy of
advance refunding: In the early 1990s, when bond
yields were seen as especially favorable, state and
local governments issued new debt, even before call
provisions on the older bonds could be exercised, and
placed the proceeds in escrow accounts. As it became
possible to do so, the issuing governments began
calling the older debt, using the contents of the
escrow accounts to complete the transactions. Reflecting these retirements, the amount of state and
local government debt outstanding declined about
4 percent per year in 1994 and 1995. This process is
still in train but evidently on a smaller scale; available information suggests that state and local government debt outstanding declined only marginally during the first half of this year.
The Household Sector. The pace of borrowing by
households appears to have moderated somewhat
from the elevated rates of 1994 and 1995, but it
remains substantial. In particular, consumer credit
expanded at a 9Vi percent annual rate from the fourth
Monetary Policy Report to the Congress
quarter of 1995 through May of this year, a rate that
was down from \4Vi percent over the four quarters of
1995. Mortgage debt actually expanded somewhat
more rapidly during the first quarter than in 1995
(VA percent at an annual rate versus 6V2 percent),
and available indicators suggest that growth during
the second quarter dropped back only to about last
year's pace. The recent backup in mortgage rates,
which only began in February, has had little effect on
borrowing thus far and might even have increased it
temporarily by accelerating transactions.
The rapid growth in household debt during the
past few years has resulted in a sizable increase in
the estimated ratio of scheduled payments of principal and interest to disposable personal income. This
measure of debt-servicing burden has trended up over
the past two years, and as of the first quarter of 1996,
was approaching—but still short of—the levels
attained toward the end of the last business cycle
expansion.
Several other recent indicators suggest that some
households are experiencing financial strains. For
example, the Consolidated Report of Condition and
Income shows that the delinquency rate on creditcard receivables at commercial banks has increased
significantly in recent quarters, retracing about onethird of the improvement that took place during the
first few years of the current economic expansion.
The delinquency rate on auto loans at the finance
companies affiliated with the major manufacturers
moved up sharply beginning about two years ago and
since late last year has hovered around historically
high levels. Anecdotal evidence suggests that the rise
in both credit card and auto-loan delinquency rates
reflects a strategy to liberalize lending standards as
part of an overall marketing effort. The auto loan
delinquency rate has also been boosted a bit by the
increased prevalence of leasing. Lease customers tend
to be better credit risks than the average conventional
borrower, and the shift toward leasing has had the
effect of skimming the more financially secure car
buyers and thus degrading somewhat the remaining
pool of people financing their purchases through conventional loan contracts.
The personal bankruptcy rate also surged to a new
high this year. The extent to which this development
reflects mounting financial difficulties of households
is clouded, however, by changes in federal law (effective at the start of 1995) that may have increased the
attractiveness of bankruptcy by increasing the value
of assets that can be protected from liquidation in
bankruptcy proceedings. The "cost" of bankruptcy to
households has also been effectively lowered by the
greater willingness of lenders to extend credit to
711
riskier borrowers—even those with a previous bankruptcy on their records.
Other indicators are less suggestive of a deterioration in the financial condition of households. For
example, the delinquency rate for mortgage loans
sixty days or more past due at all lenders is near its
lowest level in two decades, while the rate on closedend consumer loans—despite having moved up over
the past eighteen months—remains low by historical
standards. Moreover, the aggregate balance sheet of
the household sector clearly is in very good shape;
owing in large part to the surge in equity prices over
the past year and a half, the ratio of household net
worth to disposable personal income moved up into
record territory recently.
Apparently in response to the recent run-up in
delinquency and charge-off rates on consumer loans,
banks have selectively tightened their standards for
consumer lending. These actions reversed steps taken
earlier in the decade, when many card issuers
increased the growth of their credit card receivables
by offering accounts to customers who previously
would have been denied credit. The belief was that
more sophisticated credit-scoring techniques would
control risks adequately, but it appears that some
"adverse selection" occurred and that the uptick in
delinquencies has been larger than at least some
banks had planned. About 20 percent of the respondents in the Federal Reserve's most recent survey of
senior loan officers reported having tightened standards for approving applications for credit cards, and
10 percent reported tightening standards for other
consumer loans. Notwithstanding the recent tightening of standards, supply conditions for loans from
banks to consumers still appear accommodative.
The Business Sector. The debt of nonfinancial
businesses also appears to have expanded somewhat
less rapidly during the first half of 1996 than it did
last year. In part, the moderation in borrowing can be
traced to the behavior of the financing gap for incorporated nonfinancial enterprises—the excess of their
capital expenditures (including inventory investment)
over their internally generated funds. During 1995,
this gap narrowed quite substantially, reflecting
strong profits and a marked reduction in inventory
investment. Available indications are that the gap has
remained small this year.
External funding for business spending has been
in plentiful supply thus far this year. One piece of
evidence on this point is that interest rate spreads on
investment-grade bonds have edged down slightly
since the beginning of the year. Additionally, spreads
on high-yield bonds have declined markedly and
712
Federal Reserve Bulletin • August 1996
are as low as they have been in at least a decade.
Also, supply conditions for loans from banks to businesses continue to look quite favorable. According to
the Federal Reserve's most recent survey of bank
lending officers, standards for approval of commercial and industrial loans were about unchanged from
January to May of this year, and terms on such loans
were eased on net. Surveys by the National Federation of Independent Business indicate that small businesses have not faced difficulty getting credit, and
stories abound of new small-business lending programs of banks.
Gross offerings of long-term bonds by nonfinancial
corporations have been running about in line with last
year's pace. However, the mix of issuers has shifted
somewhat, reflecting the changing structure of rates.
Late last year and early this year, investment-grade
corporations were issuing a hefty volume of bonds to
pay down commercial paper and to refinance existing
long-term debt. As the rates on investment-grade
bonds increased this year, issuance of such debt
dropped off. Rates on high-yield bonds moved up
less, however, and issuers of those bonds continued
to offer new debt at a rapid pace.
Gross issuance of equity shares by nonfinancial
corporations has been exceedingly strong this year.
Indeed, total offerings in each of the three months of
the second quarter set successive monthly records.
This activity has been fueled by initial public offerings and other equity issuance by relatively young
companies. Share retirements by nonfinancial corporations have also been very heavy. Announced stock
buybacks by such firms in both the first and second
quarters ran at $28 billion per quarter—the fastest
pace since the late 1980s. On net, available information suggests that nonfinancial corporations retired
even more equity during the first half of 1996 than
they had in 1995.
Share retirements and merger activity have generated much less issuance of debt recently than they did
in the 1980s. Recent share repurchases have been
undertaken mostly by companies seeking to return
the excess cash on their balance sheets to stockholders. And recent mergers and acquisitions have mainly
been accomplished through stock swaps between
companies in similar lines of business, rather than the
leveraged transactions commonplace in the 1980s. In
line with the limited extent of debt financing, the
mergers executed thus far in 1996 have resulted in
little net change in bond ratings—again in marked
contrast to the experience of the 1980s.
Depository Intermediation. The growth of credit
provided by depository institutions slowed sharply in
the fourth quarter of last year and first quarter of this
year, and commercial bank credit—a component of
total depository credit for which more recent data are
available—slowed further in the second quarter. The
share of thrift institutions in total depository credit
has continued to decline in recent quarters. This
long-standing trend may have been given additional
impetus last summer by the opening up of a differential between the premium rates paid by banks and
thrifts for their deposit insurance; this differential has
reduced the cost of funds for banks relative to the
cost of funds for thrift institutions.
The reduction and subsequent elimination of the
deposit insurance premium for financially sound
banks probably played a role in shifting bank funding
toward deposits. During the first half of 1996, banks
increased their deposit liabilities more rapidly than
their nondeposit liabilities—a contrast from the preceding few years when banks relied disproportionately for their funding on nondeposit sources, including borrowing from their foreign offices.
The Monetary Aggregates
The increased reliance on deposit sources of funding
by banks has helped support the growth of the broad
money aggregates of late. Between the fourth quarter
of last year and June of this year, M3 expanded at an
annual rate of about 6 percent, putting it at the upper
boundary of its annual growth cone. As in 1995, the
growth in M3 this year was led by those components
not included in M2. In the aggregate, these components increased about 11 percent at an annual rate
between the fourth quarter of last year and June of
this year, only moderately below the 1995 average
pace of W/2 percent. Institution-only money-market
mutual funds increased about 18 percent at an annual
rate over this period. This component of the money
stock increased especially rapidly during the first
three months of the year. Often, the yields on these
funds lag changes in short-term market interest rates,
making them particularly attractive investments when
short-term market rates are declining, as they were
around the turn of the year when the Federal Reserve
eased policy.
M2 increased 43A percent at an annual rate between
the fourth quarter of 1995 and June of this year,
leaving it near the upper boundary of its growth
range. For many years before the early 1990s, the
velocity of M2 (defined as the ratio of nominal GDP
to M2) moved roughly in tandem with the opportunity cost of holding M2—that is, the interest earnings forgone by holding M2 assets rather than market
Monetary Policy Report to the Congress
instruments such as Treasury bills. This relationship
implied that M2 tended to move in proportion to
nominal GDP, except as it was influenced by changes
in the opportunity cost of holding it. When the opportunity cost rose, owners of M2 tended to economize
on their holdings, driving up the velocity of M2.
Beginning around the early 1990s, however, this
historical relationship began to break down. Indeed,
in 1991 and 1992, the velocity of M2 rose sharply
even as the opportunity cost of holding M2 declined.
A number of reasons for this development have been
adduced, including the unusually steeply sloped yield
curve and very low level of short-term interest rates,
which helped to attract the public out of liquid balances and into more readily available long-term
mutual funds; the credit crunch at banks and the
resolution of troubled thrift institutions, which reduced the aggressiveness with which these institutions sought retail deposits; and household balancesheet restructuring, which entailed in part repayment
of loans out of liquid money balances. The divergent
movement of the velocity of M2 and its opportunity
cost continued until the end of 1992. More recently,
the variables have once again been moving essentially in parallel. In light of the rapid ongoing pace of
innovation and technological change in financial services, however, it is impossible to know whether the
new parallel movement of velocity and the opportunity cost will persist.
Ml declined about VA percent at an annual rate
during the first half of 1996, just as it had done over
the four quarters of 1995. The recent sluggish behavior of Ml reflects the ongoing spread of so-called
sweep programs, under which idle reservable deposits are "swept" into money-market-deposit accounts
(MMDAs). (The appendix provides additional information on sweep accounts.) Estimates based on
initial amounts swept suggest that Ml would have
expanded at about a 7 percent annual rate during the
first half of 1996 in the absence of these programs.
Another factor contributing to the recent weakness in
Ml has been the growth of currency, which has been
sluggish by the standards of the early 1990s. Foreign
demand for currency apparently has tailed off somewhat. In large part, the slackening in net foreign
demand owes to substantial reflows from Argentina
and Mexico, where earlier worst-case fears about the
stability of the financial system have not been realized. Reflows from Western Europe and Asia have
also been significant, but net shipments to the former
Soviet Union remain sizable. On the whole, demand
for the new $100 bill has been substantial, but this
has not had any detectable effect on the stock of
currency outstanding.
713
The sluggish growth of currency has held down
expansion of the monetary base to only about 2 percent at an annual rate thus far this year. The other
restraint on the growth of the base has been the
turnaround in the behavior of required reserves. After
surging at double-digit rates in 1992 and 1993,
required reserves have been on a downward trend,
and at an increasing rate. Thus far this year, required
reserves have contracted about 7V2 percent at an
annual rate. The emergence of this trend is perhaps
the most direct consequence of the spread of sweep
programs. Absent such programs, required reserves
probably would have increased about 10 percent over
the same period, owing to strong growth in demand
deposits. Continued spread of sweep programs could
affect the federal funds market, perhaps leading to
greater volatility like that experienced in early 1991
following the elimination of reserve requirements on
nontransactions deposits. Thus far, such instabilities
have not been realized, but the Federal Reserve is
monitoring the situation carefully.
Interest Rates, Equity Prices,
and Exchange Rates
Interest Rates. Interest rates on Treasury securities rose over the first half of 1996, with the most
pronounced increases occurring for intermediate-term
securities. Between the end of December 1995 and
the middle of July, the rate on three-month bills
increased somewhat less than lA percentage point, the
rate on five-year notes rose about VA percentage
points, and the rate on thirty-year bonds rose about
1 percentage point. Despite these increases, nominal
Treasury rates overall continued to be relatively low
by the standards of the past twenty years.
The spread between interest rates on investmentgrade private bonds and those on comparablematurity Treasury securities remained narrow during
the first half of the year. In particular, the average
spread on Baa-rated industrial bonds over thirty-year
Treasury bonds continued to fluctuate near where it
has been for the past several years and well below the
levels typical of the 1980s. The spread on investmentgrade utility bonds continued to drift upward, but this
appeared to reflect the market's increasing perception
that some firms in that industry might become riskier
as a result of deregulation and new competitive pressures. The rate spread on high-yield bonds over the
comparable Treasury notes narrowed sharply, reversing the upward drift of 1995, and returning this
measure to the low end of its range over the past
decade. The continuing low level of spreads on most
714
Federal Reserve Bulletin • August 1996
investment-grade securities, as well as the marked
decline of the spread on high-yield securities,
appeared to reflect in part market participants'
increasing confidence in the durability of the economic expansion and consequent optimism about the
creditworthiness of corporate borrowers.
Equity Prices. Share prices have fallen in recent
weeks, most notably those of "high-tech" companies
whose ability to maintain steep earnings trajectories
has come into question. On net, though, broad indexes of equity prices have held steady or moved up
slightly since the end of 1995. As of July 16, the
S&P 500 composite index of stock prices had
increased 2 percent thus far this year, while the
NASDAQ index had returned to its beginning-of-year
level. Even this performance has been impressive,
given that it occurred in the face of appreciable
upward movement in long-term interest rates.
Exchange Rates. Since mid-April, the weightedaverage value of the dollar in terms of the other G-10
currencies has generally been about 4 percent above
its level at the end of December, although the dollar
has moved down somewhat in mid-July. When compared with an index of currencies from a somewhat
broader group of U.S. trading partners, the dollar has
appreciated 3 percent since December after adjustment for changes in relative consumer prices. The
dollar has risen on balance about 4 percent in terms
of the German mark and about 6 percent in terms of
the Japanese yen.
The dollar has been supported by perceptions of a
disparity in the performance of the U.S. economy
relative to that of many of our major trading partners
and the resulting expectations for the course of relative interest rates. Specifically, while data suggesting
robust growth in the United States caused interest
rates to rise, questions remained about the strength of
expansions in a number of other industrial countries,
particularly in Europe. Average long-term (ten-year)
interest rates in the other G-10 countries have risen
only slightly, about 20 basis points, since the end of
December. With U.S. rates rising substantially more
than that, the appreciation of the dollar over this
period is consistent with the shift in the long-term
interest differential in favor of the dollar. In addition,
the dollar was lifted to an extent against the yen by
data early in the year showing that the Japanese
external surpluses were narrowing.
Despite a weak output performance, long-term
interest rates in Germany have risen about 50 basis
points, with much of that increase coming during the
first quarter. Long-term interest rates have actually
fallen since the end of last year in some European
countries, such as France and Italy, where political
and economic policy uncertainties have been reduced. In Japan, long-term interest rates have risen
about 30 basis points, on balance. Short-term market
interest rates abroad are generally lower than they
were at the end of last year. German short-term
market rates are down nearly 50 basis points, while
rates in France are down more than 100 basis points
and those in the United Kingdom are down 70 basis
points. Official lending rates have been reduced by
the central banks in Germany, France, the United
Kingdom, and several other European countries in
1996. In Japan, short-term market interest rates
remain near the historically low levels reached during
the second half of 1995 as the Bank of Japan's
official rates have been unchanged. Stock markets
in the foreign G-10 countries have risen 3 percent to
15 percent since the end of December, except in the
United Kingdom, where stock prices, on balance, are
about unchanged.
The Mexican peso traded during the first half of
1996 in a range somewhat stronger than that which
prevailed at the end of 1995. Mexican twenty-eightday treasury bill (cetes) rates have declined from
nearly 50 percent in December to around 30 percent
as the rate of inflation has fallen. The economic
positions of Mexican households and firms have
improved since early 1995, but problems in the financial system remain, as evidenced by increasing
amounts of nonperforming loans at banks. Stock
prices have risen, on balance, about 5 percent in peso
terms since December, buoyed by the interest rate
declines and evidence of recovery in the Mexican
economy.
The pace at which private foreigners acquired U.S.
assets increased markedly in the first quarter.
Although private net purchases of U.S. Treasury securities were small, there were large increases in the
private holdings of U.S. government agency bonds
and U.S. corporate bonds, as U.S. corporations issued
heavily in the Eurobond market. In addition, direct
investment capital inflows surged to almost $30 billion in the first quarter, reflecting a pickup in foreign
acquisitions of U.S. firms. Together, these gross
inflows totaled nearly $80 billion, roughly twice the
U.S. current account deficit for the quarter. U.S. net
purchases of foreign stocks and bonds were also
sizable in the first quarter, with net purchases of
foreign stocks from Japan particularly large. U.S.
direct investment abroad slowed somewhat between
the fourth quarter of 1995 and the first quarter of
1996 but remained near the record pace for all of last
year. In April and May, private foreign interest in
Monetary Policy Report to the Congress
U.S. securities continued to be strong while U.S.
investor interest in foreign stocks cooled somewhat
from the strong first-quarter pace.
Foreign official holdings in the United States
increased about $52 billion in the first quarter of 1996
after a record $110 billion rise in 1995. These
increases reflected both intervention to support the
foreign exchange value of the dollar by certain industrial countries and substantial reserve accumulation
by several developing countries. Data for April and
May indicated continued increases in official holdings in the United States but on a much more modest
scale.
APPENDIX:
SWEEPS
TRANSACTION
OF
S w e e p s of transaction deposits into savings accounts
Billions of dollars
Period
1994
January
February
April
July
September
October
November
December
1995
January
February
RETAIL
June
July
DEPOSITS
In January 1994, depository institutions began implementing sweep programs for retail customers.3 In
such programs, balances in household transaction
accounts (typically NOW accounts, but also some
demand deposits, both of which are included in M l )
are swept into savings deposits, which are part of the
non-Mi portion of M2. Such sweeps shift deposits
from reservable (transactions) accounts to nonreservable (savings) accounts without impairing depositors'
ability to access the funds for transactions purposes.
Depositories have an incentive to establish these programs because reserves held at the Federal Reserve
earn no interest. Retail sweep programs reduce
reported reserves, the monetary base, and Ml. They
have no effect on M2, because both transactions and
savings accounts are in M2.
Retail sweep programs have been established either
as daily sweeps or as weekend sweeps. Under a daily
sweep, a depositor's transaction balances above a
target level are shifted each night into a special
savings account created for the purpose. If debits
threaten to reduce the remaining transaction account
balances below zero, enough funds are transferred
back from the savings account to reestablish the
target level of transaction balances. Because only six
transfers are allowed out of a savings account within
a statement month, on the sixth transfer, the entire
3. S w e e p a c c o u n t s f o r b u s i n e s s c u s t o m e r s o f b a n k s b e c a m e w i d e s p r e a d in t h e m i d - 1 9 7 0 s . T h e y i n v o l v e s w e e p s o f d e m a n d d e p o s i t s
into repurchase agreements or other m o n e y market instruments w h o s e
m i n i m u m sizes are too large to a c c o m m o d a t e households.
3.
715
September
December
Monthly averages of
initial amounts
Cumulative total
5.3
2.2
.0
.0
.0
.0
.0
.0
1.5
.6
.3
.0
5.3
7.5
7.5
7.5
7.5
7.5
7.5
7.5
9.0
9.6
9.9
9.9
.0
.0
.0
.0
5.0
7.3
.6
4.6
5.9
7.7
4.3
9.2
9.9
9.9
9.9
9.9
14.9
22.2
22.8
27.4
33.3
41.0
45.3
54.5
13.7
7.0
6.4
7.8
8.4
68.2
75.2
81.6
89.4
97.8
1996
February
May
NOTE. Figures are the estimated total of transaction account balances initially
swept into savings accounts owing to the introduction of new sweep programs.
Monthly totals are averages of daily data.
Regular monthly updates of initial amounts swept may be obtained by
email by sending an email address along with a phone number to
sweeps-frb@frb.gov.
Those without access to email may request data by
calling (202) 872-7577.
savings balance is returned to the transaction account.
Alternatively, in a weekend sweep program, all
affected transaction account balances are swept
into the special purpose savings account over the
weekend and then returned on Monday. Some
"weekend sweep" programs undertake sweeps on
certain holidays as well.
No information is available on the current amounts
of transaction balances that are being swept into
savings accounts. The Federal Reserve has obtained
data from depositories only on the initial amounts
swept on the date each program was established. The
table, which is updated and made available to the
public on an ongoing basis, shows that the initial
amounts swept under programs implemented through
May 1996 have cumulated to $98 billion. With a
marginal reserve requirement of 10 percent on
most of these balances, the cumulative reduction of
required reserves attributable to the initial amounts
swept has been nearly $10 billion.
(Table 4 appears on the following
page.)
716
4.
Federal Reserve Bulletin • August 1996
G r o w t h of m o n e y a n d d e b t
Percent
Ml
M2
M3
Domestic
nonfinancial debt
Year1
1980
1981
1982
1983
1984
7.5
5.4 (2.5 2 )
8.8
10.3
5.4
8.7
9.0
8.8
11.8
8.1
9.6
12.4
9.7
9.5
10.8
9.5
10.2
9.8
11.9
14.6
1985
1986
1987
1988
1989
12.0
15.5
6.3
4.3
.6
8.6
9.2
4.2
5.7
5.2
7.7
9.0
5.9
6.3
4.0
14.4
13.3
10.0
8.8
7.9
1990
1991
1992
1993
1994
4.1
7.9
14.3
10.5
2.4
4.1
3.1
1.8
1.4
.6
1.8
1.2
.6
1.0
1.6
6.8
4.6
4.7
5.2
5.2
-1.8
4.0
5.9
5.6
-.1
-.5
-1.5
-5.1
1.0
3.8
6.9
4.1
4.5
6.3
7.9
4.5
5.4
7.1
4.9
4.7
-2.7
-.5
5.9
4.1
7.2
5.3
4.7
n.a.
Period
1995
Quarter (annual
1995:1
2
3
4
3
rate)
1996:1
2
1. From average for fourth quarter of preceding year to average for fourth
quarter of year indicated.
2. Adjusted for shifts to NOW accounts in 1981.
3. From average for preceding quarter to average for quarter indicated.
717
Industrial Production and Capacity Utilization
for June 1996
Released for publication
July 16
Industrial production increased 0.5 percent in June
after a downward revised gain of 0.5 percent in
May. The output of consumer durables, business
equipment, construction supplies, and materials
advanced nearly 1 percent or more. After a relatively
hot May, however, the production of nondurable
consumer goods fell as electricity output slackened.
At 125.7 percent of its 1987 average, total industrial
production in June was 3.5 percent higher than it
was in June 1995. For the second quarter, industrial
production increased at a seasonally adjusted annual
rate of 5.6 percent, up from 3.0 percent in the first
quarter; the recovery in the output of motor vehicles
and parts after the General Motors strike in March
accounted for the acceleration.
Industrial production indexes
Twelve-month percent change
Twelve-month percent change
10
Materials
Products
1990
1992
1991
1994
1993
1995
1996
1990
1991
1992
1993
1994
1995
1996
Capacity and industrial production
Ratio scale, 1987 production = 100
— Total industry
C a p a c i t y ^ —
Ratio scale, 1987 production = 1 0 0
140
— Manufacturing
Capacity
_
•
—
120
-
Production
120
100
100
Production
80
1
1
1
1
1
1
1
1
1
1
1
1
1
80
1
1
1
1
1
Percent of capacity
Percent of capacity
Manufacturing
Total industry
90
Utilization
Utilization
80
70
I
1982
1984
I
I
1986
I
I
1988
I
1990
J
1992
I
1994
L
1996
J
1982
1984
1986
All series are seasonally adjusted. Latest series, June. Capacity is an index of potential industrial production.
140
I
L
1988
1990
1992
1994
1996
718
Federal Reserve Bulletin • August 1996
Industrial production and capacity utilization, J u n e 1996
Industrial production, index, 1 9 8 7 = 1 0 0
Percentage change
1996
Category
1996 1
June 1995
to
June 1996
Mar.r
Apr/
May'
June?
Mar/
Apr/
May r
Junef
Total
123.6
124.5
125.1
125.7
-.5
.7
.5
.5
3.5
Previous estimate
123.6
124.4
125.3
-.5
.7
.7
Major market groups
Products, total 2
Consumer goods
Business equipment
Construction supplies
Materials
120.0
115.3
162.7
111.5
129.1
120.7
115.8
166.4
109.5
130.2
121.1
116.1
166.5
110.6
131.2
121.5
116.2
168.3
111.5
132.3
-.6
-1.1
-1.3
2.0
-.2
.6
.5
2.3
-1.7
.9
.3
.2
.1
.9
.8
.3
.0
1.0
.9
.8
3.0
1.2
8.5
4.0
4.3
Major industry
Manufacturing
Durable
Nondurable
Mining
Utilities
125.2
135.6
113.6
101.1
128.0
126.5
138.4
113.4
100.5
126.0
126.9
139.0
113.6
101.0
129.2
127.6
140.4
113.6
102.5
127.6
-.9
-1.4
-.2
3.2
1.1
1.1
2.0
-.2
-.5
-1.6
.3
.4
.1
.5
2.6
.6
1.0
.1
1.5
-1.3
3.5
6.8
-.6
1.5
5.4
groups
Capacity utilization, percent
1995
Average,
1967-95
Low,
1982
June
Total
Apr. r
May r
June?
83.1
83.2
3.9
82.0
80.4
85.7
91.7
93.3
4.4
5.1
2.6
-.1
1.3
71.8
84.9
83.5
82.6
82.9
82.6
82.9
83.2
81.4
80.7
82.6
87.4
86.9
70.0
71.4
66.8
80.6
76.2
85.2
83.5
89.0
86.5
92.6
82.7
80.8
87.0
90.2
89.7
81.3
79.6
85.3
90.3
94.0
81.8
80.4
85.3
89.9
92.4
81.8
80.2
85.6
90.3
94.6
NOTE. Data seasonally adjusted or calculated from seasonally adjusted
monthly data.
1. Change from preceding month.
Industrial capacity utilization rose 0.1 percentage
point in June, to 83.2 percent.
When analyzed by market group, the data show
that the output of consumer goods was unchanged in
June, with a 1.6 percent increase in the production of
durable consumer goods offset by a 0.4 percent
decrease in the output of the much larger consumer
nondurables category. The increase in the output of
durables resulted from roughly equal gains in automotive products and other durable goods; most of the
increase in the latter reflected a jump in the output of
appliances. About half of the decline in the production of consumer nondurables resulted from the drop
in the residential use of electricity. The output of
paper products, gasoline, and food also decreased.
The production of business equipment rose 1.0 percent, bolstered by sizable gains in both information
processing equipment and transit equipment. The
1.7 percent increase in the output of information
processing equipment was led by another large gain
in the output of office and computing equipment, but
Mar.1
82.1
Previous estimate
Manufacturing
Advanced processing
Primary processing .
Mining
Utilities
1996
High,
1988-89
2. Contains components in addition to those shown,
r Revised,
p Preliminary.
the output of other components of this group, including communications equipment, copiers, and measuring instruments also advanced strongly. Increases in
auto and light truck assemblies and in aircraft manufacturing boosted the output of transit equipment,
although cuts in heavy and medium truck assemblies
partly offset those gains. The production of industrial
equipment was unchanged for a second month, and
the output of other equipment edged up; production
in both groups has fallen off after having peaked in
February. The output of defense and space equipment, pushed down by a strike at an aircraft manufacturer, more than reversed its 0.7 percent increase in
May.
The output of construction supplies rose 0.9 percent for a second month. The production of durable
goods materials grew 1 percent, with strength
throughout the components of this group, including
semiconductors, computer parts, basic metals, and
the parts used to make motor vehicles. The output of
nondurable materials edged up; a drop in paper partly
Industrial Production and Capacity Utilization
offset gains in textiles, chemicals, and containers.
The production of energy materials rose, despite the
drop in electricity output, because of gains in natural
gas and crude oil extraction, as well as an increase in
coal mining.
When analyzed by industry group, the data show
that manufacturing output advanced 0.6 percent after
a gain of half that size in May. Gains were widespread among industries in durable manufacturing;
the only easing was in the output of furniture and
fixtures, which had increased 2.2 percent in May.
Production increased more than 1 percent for computers, electrical machinery, steel, and motor vehicles
and parts. The output of nondurables rose 0.1 percent, the same amount as in May. Although output
advanced in most of the industries within nondurable
manufacturing, the declines in the output of foods
and paper and products offset most of the gains. After
an increase in May, the production in mining rose
1.5 percent; the output at utilities fell a similar
amount.
The strength in durables and the weakness in nondurables continue their patterns of the past year or
more; the output of durables has risen 6.8 percent
since June 1995, and the production of nondurables
has declined 0.6 percent over the same period. Utilities have also shown solid gains during the past year,
rising 5.4 percent. Utility output grew about l3/4 percent per year, on average, between 1977 and 1995.
The factory operating rate advanced 0.2 percentage
point in June, to 82.0 percent, the same level as in the
fourth quarter of 1995. Utilization rates increased for
both advanced- and primary-processing industries,
with most industries showing increases in operating
rates. The rate for iron and steel rose more than
1 percentage point, while the rates for leather and
products, tobacco, motor vehicles and parts, and textile mill products rose more than Vi percentage point.
The largest decrease in utilization came in paper and
products, where the operating rate fell 0.9 percentage
point. The utilization rate for mining increased
1.4 percentage points; although the rate for utilities
fell 1.3 percentage points, it remains more than 6 percentage points above its 1967-95 average.
This release and the history for all series published here are available on the Internet at the
Board of Governors' World Wide Web site,
http://www.bog.frb.fed.us.
1996
REVISION
ANNOUNCEMENT
During the fourth quarter of 1996, the Federal
Reserve will publish a revision of its measures of
industrial production, capacity utilization, and indus
719
trial use of electric power. The revision of IP and
capacity will both incorporate updated source data
for recent years and feature a change in the method of
aggregating the indexes. From 1977 onward, the
value-added proportions used to weight individual
series will be updated annually rather than quinquennially. In addition, the production and capacity
indexes will be rebased so that 1992 actual output
equals 100.
The aggregate IP indexes will be constructed with
a superlative index formulation similar to that introduced by the Bureau of Economic Analysis in its
December 1995 revision of the National Income and
Product Accounts. At present, the aggregate IP
indexes are computed as linked Laspeyres indexes,
with the weights updated every five years. Because of
the rapid fall in the relative price of computing power,
that periodic updating of weights is too infrequent to
provide reliable estimates of current changes in output and capacity. With the publication of the revision,
we will update our value-added proportions annually
and use a Fisher index-number methodology. This
new superlative index formulation will be applied to
all aggregates of IP, capacity, and gross value of
product.
The regular updating of source data for IP will
include the introduction of annual data from the 1994
Annual Survey of Manufactures of the Bureau of the
Census.
The statistics on the industrial use of electric power
will be revised back to 1972. These revisions stem
from three basic sources. First, the new figures incorporate more complete reports received from utilities
for the past few years. Second, an updated panel of
reporters on cogeneration will be fully integrated into
our survey of electric power use. Third, the levels of
the monthly electric power series for manufacturing
industries will be benchmarked to indexes derived
from data published in the Census Bureau's annual
surveys and censuses of manufactures. These indexes
will also be revised so that 1992 electric power usage
equals 100.
The revised data will be available at the Board's
World Wide Web site. The data will also be available
on diskettes from the Board of Governors of the
Federal Reserve System, Publication Services, 202452-3245. The revised data will also be available
through the Economic Bulletin Board of the Department of Commerce; for information call 202-4821986. In addition to the data currently provided, the
time series of implicit prices necessary for a user to
aggregate IP and capacity under the new methodology will be provided. For information on the plans
for these revisions, call 202-452-3151.
720
Statements to the Congress
Statement by Griffith L. Garwood, Director, Division
of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, before the
Subcommittee on Financial Institutions and Consumer Credit of the Committee on Banking and
Financial Services, U.S. House of Representatives,
June 19, 1996
The Board of Governors of the Federal Reserve System appreciates this opportunity to comment on
issues concerning the coverage of electronic benefit
transfer (EBT) programs under the Electronic Fund
Transfer Act (EFTA) and the Board's Regulation E.
Under amendments to Regulation E adopted by the
Board in February 1994, EBT programs are subject
to modified Regulation E requirements scheduled to
take effect on a mandatory basis on March 1, 1997.
This hearing will examine the potential impact of
applying Regulation E to these programs, particularly
the potential costs of compliance with the rules that
limit a recipient's liability for unauthorized transfers.
I will discuss coverage of EBT programs under the
EFTA, which the Board is responsible for implementing; address the states' concern that the costs of
complying with Regulation E could impede the
development of EBT programs; and make some
comments about legislative proposals.
Government agencies have developed EBT programs in which recipients use plastic cards and personal identification numbers (PINs) to access food
stamp benefits at point-of-sale (POS) terminals in
food stores and cash benefits at either automated
teller machines (ATMs) or at POS terminals. The
Board supports the nationwide effort to provide
public benefits—such as social security, food stamps,
and Aid to Families with Dependent Children—to
citizens electronically.
The electronic transfer of benefits offers numerous
advantages over paper-based delivery systems, both
for recipients and for program agencies. For recipients, these advantages include faster access to benefits, greater convenience in terms of times and locations for obtaining benefits, improved security
because funds may be accessed as needed, lower
costs because recipients avoid check-cashing fees,
and greater privacy and dignity. For agencies, EBT
programs offer a single, integrated system that can
more efficiently deliver benefits for both state and
federal programs by reducing the cost of benefit
delivery, facilitating the management of program
funds, and helping to reduce fraud.
As EBT programs developed in the early 1990s,
the Board considered whether, and in what manner,
Regulation E ought to apply. The objective was to
provide legal certainty so that agencies could make
informed decisions about developing or expanding
programs. The EFTA, enacted in 1978, provides the
basic framework that establishes the rights and
responsibilities of participants in electronic payment
systems. The Congress directed the Board to prescribe regulations implementing the law and to
demonstrate—to the extent practicable—that the consumer protection of the regulation outweighs the
compliance costs necessary to provide this protection.
Transfers covered by the act and Regulation E
include transfers initiated through ATMs, point-ofsale terminals, telephone bill-payment systems, or
home banking programs. The act and regulation
restrict the unsolicited issuance of ATM cards and
other access devices. They provide for disclosure of
the terms and conditions of an EFT service, limitations on consumer liability for unauthorized transfers,
error resolution, and documentation of transfers
through terminal receipts and periodic statements.
Under the EFTA, the Board has a broad mandate to
determine coverage when electronic services are
offered by entities other than traditional financial
institutions. Section 904(d) of the act provides that if
EFT services are made available to consumers by a
person other than a financial institution holding a
consumer's account, the Board shall ensure that the
act's provisions are made applicable to such persons
and services. It was under this mandate that the
Board considered whether, and how, government
agencies that offer EBT programs should be required
to comply.
The legislative history of the EFTA provided guidance on the Board's authority to determine if particular services should be covered by the act. Under
section 904(c), rules issued by the Board "may contain such classifications, differentiations, or other
provisions—as in the judgment of the Board are
necessary or proper to effectuate the purposes of this
title, [or] to prevent circumvention or evasion
721
thereof. . . ." In discussing section 904(c), a Senate
Banking Committee report stated that "since no one
can foresee EFT developments in the future, regulations would keep pace with new services and assure
that the act's basic protections continue to apply."1
In February 1993, the Board proposed amendments
to Regulation E providing modified coverage of EBT
programs. In February 1994, the Board adopted final
amendments. In adopting the amendments, the Board
noted that the act's legislative history, the language
of the act and regulation, and the strong similarity of
EBT systems to other EFT services supported coverage of EBT programs under the act and regulation.
From a public viewpoint, an EBT program functions
much like a checking account with direct deposit of
government benefits and ATM and POS services
available to access the benefits.
The Board considered the arguments presented by
governments and agencies on why Regulation E
ought not to apply. Agencies suggested, for example,
that it was inappropriate for Regulation E to apply
because government agencies differ from privatesector financial institutions in a number of ways
related to how compliance costs can be borne.
Despite these arguments, the Board determined that
all consumers using EFT services are entitled to
receive substantially the same protections under the
EFTA and Regulation E and that this includes recipients of government benefits. Thus, the Board's rules
provide benefit recipients much the same rights that
are available to other users of electronic payment
mechanisms and apply to government agencies
requirements that are largely equivalent to those that
govern private-sector EFT services. In essence, the
Board rejected the idea of treating benefit recipients
differently from other citizens by denying them the
rights and protections of the Electronic Fund Transfer
Act.
To facilitate compliance, the Board made certain
modifications to Regulation E as it would apply to
EBT. Under the rules that go into effect next March,
modified requirements apply to EBT programs that
recognize their special characteristics. First, an
agency must disclose a recipient's liability for unauthorized transfers, the types of transfers the recipient
may make, a notice about error resolution procedures, and certain fees that may be imposed; generally, EBT programs provide training for benefit
recipients that includes written disclosures. Second,
an agency must document EFTs through receipts at
1. Fair Fund Transfer Act, Senate Report 95-915, 95 Cong. 2 Sess.
(GPO, 1978).
ATMs and POS terminals; EBT programs generally
use existing payment systems or dedicated terminals,
and both provide receipts. To address the cost concerns of program agencies, the Board provided an
exception from the periodic statement requirement
under certain circumstances. Instead of sending
monthly statements, EBT programs may provide
account balance information by telephone or at a
terminal and a written account history upon request.
The purpose of this modification was to eliminate
paper. The attached chart summarizes the applicable
provisions.2
To enable states that are interested in EBT to test
and implement their programs, the Board delayed the
date of mandatory compliance with the final rule to
March 1, 1997. The Board approved the delay in
response to a request made by the Federal EBT Task
Force and endorsed by the Vice President. The task
force—which represents all the major federal agencies with benefit programs—has been working
toward a nationwide system for the electronic delivery of government benefits. The task force asked for
the three-year delay so that, in cooperation with the
states, the agencies could take the necessary measures for implementing EBT programs in compliance
with Regulation E.
The Board was, and remains, aware of the states'
concern that the costs of complying with Regulation E could impede the development of EBT programs. Before adopting the final rule, the Board
specifically solicited comment on the operational and
cost impacts of coverage, particularly in the areas of
liability for unauthorized transfers and error resolution. In its proposal, the Board stated that any comments opposing application of Regulation E on the
basis of cost should be supported by substantial and
persuasive data. While many states submitted cost
estimates in response to the proposal, the Board was
not persuaded that a case had been made for exempting programs from Regulation E.
Today, many states continue to assert that the application of Regulation E would make EBT prohibitively expensive, primarily because of the rules that
limit the recipient's liability for unauthorized transfers. Generally, Regulation E limits liability to $50 if
the recipient notifies the agency within two business
days of learning of the loss or theft of the card. States
express concern that potential losses from fraud and
misuse could force them to discontinue EBT pro-
2. The attachment to this statement is available from Publications
Services, Mail Stop 127, Board of Governors of the Federal Reserve
System, Washington, DC 20551.
722
Federal Reserve Bulletin • August 1996
grams when compliance with Regulation E becomes
mandatory next March.
Without minimizing the states' concern, it is
important not to overstate the risks. Regulation E
does not mandate an automatic replacement of benefits when a claim of lost or stolen funds is made by a
consumer. The agency will investigate the claim,
consider the available evidence, and make a determination about whether a transfer was unauthorized or
was made by the recipient or by someone to whom
the recipient furnished access. If it turns out that a
recipient has given a family member or someone else
access to benefits, the recipient is fully liable for
transfers. And although an agency may not routinely
reject a claim because the recipient has filed a claim
previously, the agency could factor in previous claims
and losses by the recipient in deciding whether to
honor a claim of unauthorized use.
The Board recognizes that there are legitimate
concerns about the need to control for fraudulent
claims. But there are means that an agency may adopt
to help minimize fraudulent claims that do not conflict with Regulation E, means that exist today in the
paper-based system. For example: the agency could
put recipients on restricted issuance (such as crediting the recipient's benefits biweekly, rather than
monthly); restrict the sites at which the recipient
could receive benefits; or appoint a representative
payee. The agency could also place the recipient on a
paper back-up system. Although these limitations
may be desirable only in certain circumstances, such
measures are possible approaches for dealing with
recipients who misuse the EBT system.
Since 1994, states have had an opportunity to
develop effective management controls and operating
rules to control the cost of compliance with Regulation E. This has provided a chance to find other
practical solutions to the liability exposure. In addition, the Department of Agriculture has carried out
test programs that should provide useful data about
the actual costs of coverage.
The Board is aware of the various bills that would
exempt EBT programs from the EFTA. The "Personal Responsibility and Work Opportunity Act of
1995," H.R.4, which was passed by the Congress and
vetoed by the President, would have exempted EBT
programs that distribute needs-tested benefits and are
established or administered by states or localities.
Other bills remain under consideration.
Whether these legislative proposals to exempt EBT
programs from the EFTA are wise is obviously a
decision for the Congress should it choose to amend
the law, and the Board would not object to such
action. However, the Board offers one observation. If
an exemption is granted, limited to a particular category of EBT programs (such as needs-tested programs administered at the state and local level) without applying to EBT programs across the board,
varying rules for different government benefit programs would result. This could make it very difficult
to implement the multipurpose, one-card, unified
national delivery system envisioned by the Congress
and by the federal government. Either the federal and
state programs would have to issue separate cards or
they would have to explain to recipients how and
why different rules apply depending on the source of
the funds.
In conclusion, the Board believes that coverage of
EBT programs by the EFTA and Regulation E is
appropriate under the law as it currently exists. The
EFTA provides that all consumers using electronic
fund transfer services have certain rights and responsibilities in connection with the transfer of their
funds. Thus, the rule extends to benefit recipients the
same rights that are available to other users of electronic payment services. The rule applies to government agencies requirements and responsibilities
equivalent to those that apply to private-sector EFT
services. Therefore all citizens, regardless of the
source of their electronic transactions, are covered by
essentially the same rules.
The Board also believes that it should be possible
to implement EBT programs in conformity with
Regulation E and EFTA and at the same time maintain the integrity of the programs and their accountability for public funds. But to the extent that it is
necessary to balance the consumer protection
afforded by the EFTA against concern about the
potential effect of the law's compliance costs on the
nationwide delivery of EBT, the Congress may wish
to reexamine the scope of the law's coverage.
Today's hearing provides a very useful forum for that
examination, and we appreciate the opportunity to
participate.
Statements to the Congress
Statement by Edward W. Kelley, Jr., Member of the
Board of Governors of the Federal Reserve System,
before the Subcommittee on Capital Markets, Securities and Government-Sponsored Enterprises, Committee on Banking and Financial Services, U.S. House
of Representatives, June 26, 1996
It is a pleasure to appear before this subcommittee to
discuss the supervision of bank sales practices on
behalf of the Federal Reserve. The recent publication
of various survey results has focused attention on the
performance of the banking and securities industries
in educating customers about the critical differences
between FDIC-insured deposits and uninsured investment products sold on bank premises.
The Board has a long history of concerns about
possible customer confusion between insured deposit
instruments and uninsured investment products sold
on bank premises. We have worked and continue to
work diligently to minimize customer confusion
through a number of supervisory and educational
initiatives. These initiatives include coordination
among the banking agencies to formulate clear and
comprehensive guidelines governing the conduct of
sales programs for nondeposit investment products
offered on bank premises; the development of
detailed examination procedures covering all aspects
of sales of nondeposit products; and the development
and implementation of an ambitious, multifaceted
education program for consumers and for banks. We
also have developed a productive relationship with
the National Association of Securities Dealers
(NASD) that includes the coordination of examinations of bank-affiliated broker-dealers and the sharing of examination information in appropriate circumstances. Finally, the banking agencies and the
securities self-regulatory organizations have been
working together to extend the same professional
qualification standards found in the securities industry to bank sales personnel.
Before discussing these matters in more detail, I
believe it would be helpful to discuss briefly the
continuing growth of the banking industry's sale of
mutual funds and other nondeposit investment products that has occurred since early 1994, when the
Board last testified on this subject.
MUTUAL FUND SALES
It is estimated that there were $3.1 trillion of mutual
funds outstanding as of April 1996, up about 50 percent from year-end 1994. Of this amount, bank proprietary funds accounted for about $420 billion, about
723
60 percent of which were money market funds. As
you can see, the banking industry's share of total
mutual funds outstanding is relatively small, particularly when money market funds are excluded.
With respect to sales volume, excluding money
market funds, banks sold about $32 billion of equity
and debt funds in 1995, up from $29 billion in 1994.
These uninsured investment products—whose prices
are most susceptible to changes in interest rates and
other market factors—generate the most concern that
customers understand they could lose the principal
that they invested. Over the years, the banking agencies have consistently sought to protect and educate
customers who might incorrectly believe that such
investments are insured deposit instruments.
INTERAGENCY STATEMENT
In February 1994, the banking agencies jointly issued
an Interagency Statement on the Retail Sales of Nondeposit Investment Products. The interagency statement calls for banks selling such products on their
premises to intensify their disclosure efforts to advise
retail customers that the investments are not deposits
insured by the FDIC, are not guaranteed by the bank,
and are subject to the risk of loss of principal. These
three disclosures are quite similar to those that have
been required by the Federal Reserve since 1972,
when it issued interpretations of Regulation Y pertaining to bank holding company sales of uninsured
investment instruments such as commercial paper.
Banks were required to provide disclosures that were
intended to enhance customer awareness and minimize the mistaken notion that an investment product
purchased on bank premises was the same as an
insured deposit.
The interagency statement also formalized the
agencies' expectation that sales of investment products would take place in an area of the lobby distinctly separate from teller windows and other locations where deposits could be made. Moreover,
advertisements and account statements that contain
information about both insured deposits and uninsured investment products must separate the information and provide the three disclosures I mentioned
earlier. Appropriate standards for training, compensation, suitability, and supervision also were discussed.
Finally, the interagency statement addressed the
relationship between banks and third parties that sell
investment products on bank premises—by far the
most typical scenario, because approximately 87 percent of all sales on bank premises occur through
broker-dealers.
724
Federal Reserve Bulletin • August 1996
EXAMINATION
PROCEDURES
Shortly after issuing the interagency statement, the
Federal Reserve developed detailed examination procedures for use in state member banks that sell mutual
funds to retail customers. The procedures are
intended to enhance the supervision of these activities and to ensure bank compliance with the guidelines contained in the interagency statement. The
procedures focus on the adequacy of disclosure, the
physical separation of securities sales from deposittaking activities, and other procedures intended to
avoid customer confusion and ensure customer
protection.
In the two years since implementation, our examiners have found that banks generally have procedures
in place that comply with the guidelines in the interagency statement. In some cases, examiners have
identified material deficiencies in sales programs and
instructed that they be corrected. Although the Federal Reserve is prepared to initiate an enforcement
action against any bank found to operate a sales
program in a manner not consistent with principles of
safety and soundness, in each case in which problems
were discovered the bank responded promptly. In
some cases this included a temporary suspension of
sale activities until deficiencies were corrected. We
have also found many banks to be proactive in their
efforts to operate investment sales programs in a safe
and sound manner, and our staff answers frequent
inquiries concerning compliance with the requirements of the interagency statement.
NASD
COORDINATION
In January 1995, the banking agencies entered into an
Agreement in Principle with the NASD to coordinate
the supervision and examination of bank-affiliated
broker-dealers between the NASD and the banking
agencies. In the interest of functional supervision and
to avoid duplicative efforts to supervise and examine
entities subject to the legal jurisdiction of both the
NASD and the banking agencies, arrangements were
made to share examination schedules, coordinate
examinations, and share pertinent findings relevant to
the retail securities sales activities of such firms.
Pursuant to the agreement, the Federal Reserve has
worked closely with the NASD on several occasions
to address supervisory issues arising from the examination of a state member bank and an affiliated
broker-dealer that conducts retail sales activities on
the bank's premises. While the Federal Reserve has
addressed the issues with the bank to seek corrective
action in response to the problems, the NASD has
addressed the matter with the affiliated broker-dealer,
thereby ensuring that all parties to the business activity are responding to the supervisors' collective
concerns.
Most important, we have established effective lines
of communication and a cooperative working relationship with the NASD. We think that this relationship has made our supervisory programs more
effective.
NASD
PROPOSED
RULEMAKING
In late 1994, the NASD proposed new rules governing sales of securities on bank premises by member
firms. The Federal Reserve worked with NASD staff
and provided extensive comments on the proposal,
many of which were incorporated into its revised
rule. The NASD also relied on the expertise of the
many commenters as well as on the advice of a newly
created committee of bank-affiliated broker-dealers
and third-party providers that sell through banks. The
result is that the NASD's proposed rule now is generally consistent with the interagency statement with
respect to the important issues of separation and
disclosure. We informally have communicated with
NASD representatives on issues, such as use of confidential information, that need additional clarification.
The extensive communication in connection with this
rulemaking demonstrates the commitment of both the
industry and the regulators to achieve consistency in
rules and guidelines governing this area. Our goal is
to maximize the benefits and minimize the burdens
resulting from our joint jurisdiction in this area.
BANKING AGENCIES'
ON PROFESSIONAL
PROPOSED
RULEMAKING
QUALIFICATIONS
The staff of the banking agencies is nearing completion of a proposed rule to establish a professional
qualifications program for banks selling securities to
retail customers that closely follows securities industry requirements. We believe the establishment of
professional qualification requirements is in the best
interests of the banking industry and of consumers.
Briefly, the proposed rule would require bank
employees to take and pass a securities industry
professional qualification examination before beginning to sell securities to retail customers. This will
ensure that bank securities representatives are appropriately trained and educated as required by the interagency statement and will enhance the ability of
Statements to the Congress
banks to serve their retail securities customers.
Continuing education requirements, such as those
required of broker-dealers and their employees, also
would be imposed to ensure continued familiarity
with industry practices, securities issues, and regulatory requirements. Finally, bank sales personnel
would be subject to a registration process under
which employment and certain disciplinary and
customer complaint information could be accessed
by members of the public. The banking agencies are
working with the NASD to arrange for the NASD's
new Central Registration Depository to maintain
registration information filed with the banking
agencies.
In our discussions with the trade organizations and
industry participants, we have encountered strong
support for the proposed rule. We will encourage the
banking industry to participate by commenting on the
proposal as the banking agencies work closely with
the securities self-regulatory organizations to bring
this proposal to fruition.
MARKET
TRENDS
SURVEY
The FDIC recently released the results of its market
trends survey, which show that some banks and securities firms selling on bank premises need to improve
their efforts to advise customers of the risks associated with nondeposit investment products. We agree.
While there have been various consumer surveys that
have shown an increasing awareness among the
investing public that mutual funds and other investment products purchased at banks are not FDICinsured, more can be done. For those investors who
do not understand the risks associated with the lack
of F D I C i n s u r a n c e , point-of-sale d i s c l o s u r e s r e m a i n
important. In this regard, the Federal Reserve is
working closely with the other federal banking agencies to promote disclosure by banks through the
examination process, promote greater consumer
understanding through education, and promote professional qualification standards for bank sales personnel. We also will continue to work with the NASD
to obtain further improvements in disclosure by
broker-dealers selling securities on banks premises.
As I noted earlier, approximately 87 percent of all
securities sold on bank premises are through sales
representatives of NASD-registered broker-dealers.
EDUCATION
INITIATIVES
In an effort to help bank customers understand that
not all products sold at banks are insured by the
725
federal government, the Federal Reserve launched a
multidimensional, national education program
designed to deliver this message to consumers. In
addition to the interagency statement, for the past
eighteen months the Federal Reserve has been
engaged in an intensive education program aimed at
both retail customers and bankers. Mutual Funds:
Understand the Risks, as the program is known, is
quite comprehensive. It includes material for both a
consumer seminar presentation and a banker compliance program; a video that can be used by bankers
and other professionals in their dealings with retail
customers; and compliance checklists to help bankers
operate in a manner that complies with the interagency statement.
The goal of the consumer seminar program is to
help retail customers understand the differences
between insured deposits and uninsured investments;
the goal of the banker education program is to
increase compliance with the interagency statement,
which in turn will help inform and protect customers.
The program has been well received and has been
discussed in numerous publications. The American
Bankers Association has featured the program in its
newsletter and has broadcast the video on its Skylink
System.
To date, seventy consumer seminars and fortyseven banker training programs have been held
around the country, reaching more than 7,500
consumers—including a seminar in Spanish to an
audience in Puerto Rico—and nearly 1,400 bankers.
Materials have been distributed to another 3,150 consumers via exhibits and town meetings sponsored by
the Securities and Exchange Commission. Nearly
10,000 copies of the video, more than 7,000 copies
of the compliance checklists, and approximately
1,500 copies of the consumer outreach package have
been distributed. The materials have been shared
with federal and state regulators and are available
from the Board. Selected materials have been translated into Spanish.
These seminars and educational initiatives appear
to work. A comparison of knowledge levels before
and after a consumer seminar indicates that individuals seem to have a better understanding of the
risks associated with nondeposit investment products: 91 percent know these products are not
FDIC-insured, compared with 65 percent before the
seminar; 87 percent know these products carry the
risk of loss of principal, compared with 72 percent
before the seminar. Bankers who attended our training sessions report that they feel better able to
comply with the interagency statement, especially
with respect to disclosure and the physical separation
726
Federal Reserve Bulletin • August 1996
of the investment sales area from deposit-taking
activities.
We intend to do more. We have completed a video
public service announcement that will be distributed
this summer to 145 stations in the top forty national
television markets. Materials for the bankers training
program are currently being updated, and we hope to
initiate another round of banker education programs
soon.
CONCLUSION
The continuing growth in bank sales of mutual funds
and other uninsured investments necessitates a com-
mitment on the part of the banking industry and bank
supervisors to the principle that effective disclosure
of risks is in the best interest of the customer and the
banking organization. Banks can best ensure that
their sales staffs are operating in a manner consistent
with this objective if they develop comprehensive
training programs and effectively monitor compliance with policies and procedures governing sales of
nondeposit products. The Federal Reserve will continue to seek ways to strengthen its educational and
supervisory programs to promote compliance with
the guidelines in the interagency statement so that
bank customers are served in a safe and sound
manner consistent with principles of customer
protection.
•
727
Announcements
ALAN
GREENSPAN:
AS CHAIRMAN
REAPPOINTMENT
OF THE BOARD
OF
GOVERNORS
ALICE M. RIVLIN:
APPOINTMENT
AS A MEMBER OF THE BOARD OF
AND AS VICE CHAIR
GOVERNORS
LAURENCE H. MEYER: APPOINTMENT
AS A MEMBER
OF THE BOARD
OF
GOVERNORS
On February 22, 1996, President Clinton announced
his intention to reappoint Alan Greenspan as Chairman of the Board of Governors and to nominate
Alice M. Rivlin as a member of the Board of Governors and Vice Chair, and Laurence H. Meyer as a
member of the Board of Governors. The three
appointments were confirmed by the Senate on
June 20, and the oaths of office were administered as
follows: Dr. Greenspan on June 21, Dr. Meyer on
June 24, and Dr. Rivlin on June 25. A formal
swearing-in ceremony was held on June 25 for
Dr. Greenspan, with Secretary of the Treasury Robert
Rubin administering the oath of office.
The text of President Clinton's announcement
follows:
The President. Good afternoon. As we seek to sustain
economic growth there is no more important institution in
our country than the Federal Reserve. Its decision can help
determine whether businesses can borrow and grow,
whether families can buy a home, and whether our financial system is sound. Its independence and its professionalism are an important safeguard for our economy.
Over the past three years, my administration has had a
respectful and productive relationship with the Federal
Reserve. During this time, we have done our job to help
grow this economy, first by cutting our deficit in half, and
secondly, by increasing important investments in education, technology and defense conversion.
The Fed, in turn, has done its job making independent
and professional judgments on monetary policy. Together
our efforts have helped to create a climate for sustained
economic growth—the lowest combination of unemployment, inflation and mortgage rates in 27 years. This relationship has worked.
Today I am pleased to announce my decision, first, to
reappoint Alan Greenspan as the Chairman of the Federal
Reserve Board. He brings his years of experience as a
prominent economist and, I might add, a leading Republican, and a career capped by eight years of service as the
Chairman of the Federal Reserve. During his tenure he has
inspired confidence and for good reason. He has worked
with our administration to safeguard the stability of global
financial markets, recognizing that today even temporary
difficulties in one corner of the globe can have far-reaching
effects in another. And more importantly, his decisions
have helped us to work toward a period of sustained
economic growth.
I'm also proud to announce my intention to nominate
two distinguished economists to join Chairman Greenspan
at the Fed. First, I am nominating Dr. Alice Rivlin as the
Vice Chair of the Federal Reserve Board.
As a founding director of the Congressional Budget
Office, a Senior Fellow at Brookings Institution, and President of the American Economics Association, she is one of
our nation's foremost experts on how to keep the economy
growing. And as my Director of the Office of Management
and Budget, she has been my strong right arm as we have
cut wasteful spending and moved toward a balanced
budget.
I have come to deeply value her independence. She
always calls it as she sees it. And I know from working
with her for three years that her ultimate test is how the
decisions we make affect the lives and future of ordinary
American citizens.
Alice Rivlin has the right combination of mind and heart
to serve our country well as the Vice Chair of the Federal
Reserve. I will miss her, and I appreciate her willingness to
take on this new responsibility.
For the position of Member of the Federal Reserve
Board I am today nominating Laurence Meyer. Dr. Meyer
is a professor of economics at Washington University. He
is renowned as one of our nation's leading economic
forecasters. This year he received the annual award as the
most accurate forecaster among blue-chip economists, an
award he also won in 1993. Because of that, his economic
forecasts are closely listened to at both OMB and CBO.
Now, that is no small feat. (Laughter.)
He consults widely for American businesses, and his
judgment and experience will serve our nation well at the
Federal Reserve.
If we all continue to do our part and the Federal Reserve
continues to be strong, forthright, and resolute, we can
create a climate for sustained growth and prosperity for the
American people for years to come. I look forward to
working with these nominees, and I hope the Senate will
give them speedy and favorable consideration.
Thank you, Mr. Greenspan. Alice, Dr. Meyer, thank you
very much.
Q. Do you have any guarantees from the Senate,
Mr. President?
The President. I don't know that there are any guarantees left in this old world, but I feel quite confident that this
team of people will be confirmed.
Q. Mr. President, do you think these three people will be
able to engage in the kind of debate you were talking about
in New York last week?
728
Federal Reserve Bulletin • August 1996
The President. I do. And I feel good about it. After all,
what should our objective be? Our objective should be to
achieve the maximum sustainable economic growth in our
country consistent with not letting inflation get out of hand.
And the Fed can't do that alone. The rest of us have to do
our part, too.
I think balancing the budget is an important part of it. I
think bringing the benefits of education and technology to
all the members of the work force who are stuck in
stagnant wages now is a very important part of it. I think
creating incentives to invest in the areas where there aren't
enough jobs of any kind, in the inner cities and the rural
areas, is an important part of it—that's what our empowerment zone meeting today is about. And I think paying
some special attention to all those people who have been
downsized and trying to devise ways that will speed their
reentry into the job market at appropriate levels is an
important part of it.
So no one can do this job alone, but I think that the truth
is that we're entering a new economy and it's a subject that
ought to be open to honest debate. I was encouraged by the
comments that Chairman Greenspan made in his two
appearances before the Congress in the last couple of days.
And I feel good about this group of distinguished Americans being in the positions for which I have nominated
them.
Q. Thank you, Mr. President.
The President. Thank you.
Q. Can we ask Dr. Rivlin a question?
The President. Sure.
Q. What level of growth would you like to see,
Dr. Rivlin? (Laughter.) And Dr. Meyer as well if you
could.
Dr. Rivlin. A sustainable level consistent with low inflation. (Laughter.)
Q. Dr. Rivlin, could we ask, have you had a change of
heart? Didn't you indicate just recently that you weren't
really interested in this job?
Dr. Rivlin. Yes, I did. (Laughter.)
Q. Is the President persuasive or—
The President. I haven't lost all my powers of persuasion. (Laughter.) Battered and bloody though I may be,
I can still, once in a while, make a good argument.
(Laughter.)
Thank you.
The Press. Thank you.
ISSUANCE OF INVESTMENT SCHEME ADVISORY
The Federal Reserve Board on June 11, 1996, issued
an Investment Scheme Advisory alert cautioning the
public about the continued proliferation of illegal
"prime bank" financial instruments and scams.
This Investment Scheme Advisory updates an
October 1993 interagency alert concerning fraudulent
"prime bank" financial instruments and investment
programs that supposedly invest in them.
The advisory also states that, contrary to statements in some of the written materials used by individuals involved with the fraudulent schemes, the
Federal Reserve does not, among other things, autho-
rize, sanction, or oversee any investment programs or
plans involving "prime bank" products. The Federal
Reserve also does not license traders in "prime bank"
instruments or have agents abroad to sell or redeem
such financial instruments.
MODIFICATION OF PRUDENTIAL LIMITATIONS
ON RISKLESS PRINCIPAL TRANSACTIONS
The Federal Reserve Board announced on June 11,
1996, the modification of the prudential limitations
established by the Board for the "riskless principal"
activities of bank holding companies. Bank holding
companies that previously have received Board
approval to conduct riskless principal transactions
may engage in this activity subject to the modified
framework of limitations.
PROPOSED ACTION
The Federal Reserve Board on June 27, 1996,
requested public comment on a proposal to simplify
and update the requirements of its Regulation D
governing the reserve requirements of depository
institutions. Comments should be received by
August 16.
ISSUANCE OF A REPORT ON THE COMBINED
STATEMENT OF CONDITION OF THE FEDERAL
RESERVE BANKS
The Federal Reserve Board issued on July 2, 1996, a
report by an independent accounting firm certifying
the combined statement of condition of the Federal
Reserve Banks as of the end of 1995 together with
related statements of income and changes in capital.
This was the first financial audit of the combined
financial statements of the Reserve Banks performed
by an independent accounting firm, in this case by
Coopers & Lybrand. The certified financial statements and footnotes appear in this issue of the
Bulletin on pages 780-89.
Audits of each Reserve Bank have long been conducted by each Bank's general auditor and by the
Board's financial examiners. This is the first year that
the System has issued independently audited combined Reserve Bank financial statements and footnotes similar to those provided in the private sector.
Other audits of the Board and Reserve Banks are
conducted by the General Accounting Office and the
Board's Inspector General.
Announcements
PUBLICATION OF THE JUNE 1 9 9 6 UPDATE
OF THE BANK HOLDING
COMPANY
SUPERVISION
MANUAL
The June 1996 update of the Bank Holding Company
Supervision Manual, Supplement No. 10, has been
published. The inspection guidance dealing with
mortgage banking nonbank subsidiaries of bank holding companies has been substantially revised. This
revision provides supervisory guidance regarding
oversight by a company's board of directors and
senior management; activities comprising loan production, marketing, servicing, and administration;
and issues relating to mortgage-servicing rights, financial analysis, and intercompany transactions.
The update also includes inspection guidance on
rating the adequacy of risk management processes
729
and internal controls. In addition, the Manual
includes new or revised summaries of certain nonbanking activities that have been approved by Board
order—including Futures Commission Merchants,
Section 20 companies, futures (and options thereon)
involving financial and nonfinancial commodities,
and related advisory services. The sections for Regulation O (Loans to Executive Officers, Directors, and
Principal Shareholders of Member Banks) and intercompany transactions have been changed to incorporate the new definition of unimpaired capital and
surplus. A more detailed list of changes is included in
the revision package.
The public may obtain the Manual and the updates
(including pricing information) from Publications
Services, Mail Stop 127, Board of Governors of the
Federal Reserve System, Washington, DC 20551. •
731
Legal Developments
FINAL RULE-AMENDMENT
TO REGULATION
S
The Board of Governors is amending 12 C.F.R. Part 219,
Subpart A of its Regulation S (Reimbursement for Providing Financial Records; Recordkeeping Requirements for
Certain Financial Records), which implements the requirement.,under the Right to Financial Privacy Act ("RFPA")
that the Board establish the rates and conditions under
which payment shall be made by a government authority to
a financial institution for assembling or providing financial
records pursuant to RFPA. These amendments update the
fees to be charged and streamline the subpart generally.
Effective July 12, 1996, 12 C.F.R. Part 219 is amended
as follows:
Part 219—Reimbursement for Providing Financial
Records; Recordkeeping Requirements for Certain
Financial Records (Regulation S)
Subpart A—Reimbursement to Financial Institutions
for Providing Financial Records
1. The authority citation for Subpart A continues to read as
follows:
Authority: 12 U.S.C. 3415
2. Subpart A is amended by revising sections 219.2 through
219.6 to read as follows:
Section 219.2—Definitions.
For the purposes of this subpart, the following definitions
shall apply:
Customer means any person or authorized representative of
that person who uses any service of a financial institution,
or for whom a financial institution acts or has acted as a
fiduciary in relation to an account maintained in the person's name. Customer does not include corporations or
partnerships comprised of more than five persons.
Financial institution means any office of a bank, savings
bank, card issuer as defined in section 103 of the Consumers Credit Protection Act (15 U.S.C. 1602(n)), industrial
loan company, trust company, savings association, building
and loan, or homestead association (including cooperative
banks), credit union, or consumer finance institution, located in any State or territory of the United States, the
District of Columbia, Puerto Rico, Guam, American Samoa, or the Virgin Islands.
Financial record means an original or copy of, or information known to have been derived from, any record held
by a financial institution pertaining to a customer's relationship with the financial institution.
Government authority means any agency or department
of the United States, or any officer, employee or agent
thereof.
Person means an individual or a partnership of five or
fewer individuals.
Section 219.3—Cost reimbursement.
(a) Fees payable. Except as provided in section 219.4, a
government authority, or a court issuing an order or subpoena in connection with grand jury proceedings, seeking
access to financial records pertaining to a customer shall
reimburse the financial institution for reasonably necessary
costs directly incurred in searching for, reproducing or
transporting books, papers, records, or other data as set
forth in this section. The reimbursement schedule for a
financial institution is set forth in Appendix A to this
section. If a financial institution has financial records that
are stored at an independent storage facility that charges a
fee to search for, reproduce, or transport particular records
requested, these costs are considered to be directly incurred
by the financial institution and may be included in the
reimbursement.
(b) Search and processing costs. (1) Reimbursement of
search and processing costs shall cover the total amount
of personnel time spent in locating, retrieving, reproducing, and preparing financial records for shipment. Search
and processing costs shall not cover analysis of material
or legal advice.
(2) If itemized separately, search and processing costs
may include the actual cost of extracting information
stored by computer in the format in which it is normally
produced, based on computer time and necessary supplies; however, personnel time for computer search may
be paid for only at the rates specified in Appendix A to
this section.
(c) Reproduction costs. The reimbursement rates for reproduction costs for requested documents are set forth in
Appendix A to this section. Copies of photographs, films,
computer tapes, and other materials not listed in Appendix
A to this section are reimbursed at actual cost.
(d) Transportation costs. Reimbursement for transportation
costs shall be for the reasonably necessary costs directly
incurred to transport personnel to locate and retrieve the
requested information, and to convey such material to the
place of examination.
732
Federal Reserve Bulletin • August 1996
Appendix A to Section
Schedule
219.3—Reimbursement
Reproduction:
Photocopy, per page
Paper copies of microfiche, per frame
Duplicate microfiche, per microfiche
Computer diskette
$.25
$.25
$.50
$5.00
Search and Processing:
Clerical/Technical, hourly rate
Manager/Supervisory, hourly rate
$11.00
$17.00
(j) General Accounting Office requests. Financial records
sought by the General Accounting Office pursuant to an
authorized proceeding, investigation, examination, or audit
directed at a government authority.
(k) Federal Housing Finance Board requests. Financial
records or information sought by the Federal Housing
Finance Board (FHFB) or any of the Federal home loan
banks in the exercise of the FHFB's authority to extend
credit to financial institutions or others.
(1) Department of Veterans Affairs. The disclosure of the
name and address of any customer to the Department of
Veterans Affairs where such disclosure is necessary to, and
used solely for, the proper administration of benefits programs under laws administered by that Department.
Section 219.4—Exceptions.
Section 219.5—Conditions for payment.
A financial institution is not entitled to reimbursement
under this subpart for costs incurred in assembling or
providing financial records or information related to:
(a) Security interests, bankruptcy claims, debt collection.
Any financial records provided as an incident to perfecting
a security interest, proving a claim in bankruptcy, or otherwise collecting on a debt owing either to the financial
institution itself or in its role as a fiduciary.
(b) Government loan programs. Financial records that are
necessary to permit the appropriate government authority
to carry out its responsibilities under a government loan,
loan guaranty or loan insurance program.
(c) Nonidentifiable information. Financial records that are
not identified with or identifiable as being derived from the
financial records of a particular customer.
(d) Financial supervisory agencies. Financial records disclosed to a financial supervisory agency in the exercise of
its supervisory, regulatory, or monetary functions with
respect to a financial institution.
(e) Internal Revenue summons. Financial records disclosed
in accordance with procedures authorized by the Internal
Revenue Code.
(f) Federally required reports. Financial records required
to be reported in accordance with any federal statute or rule
promulgated thereunder.
(g) Government civil or criminal litigation. Financial
records sought by a government authority under the Federal Rules of Civil or Criminal Procedure or comparable
rules of other courts in connection with litigation to which
the government authority and the customer are parties.
(h) Administrative agency subpoenas. Financial records
sought by a government authority pursuant to an administrative subpoena issued by an administrative law judge in
an adjudicatory proceeding subject to 5 U.S.C. 554, and to
which the government authority and the customer are
parties.
(i) Investigation of financial institution or its noncustomer.
Financial records sought by a government authority in
connection with a lawful proceeding, investigation, examination, or inspection directed at the financial institution in
possession of such records, or at an entity that is not a
customer as defined in section 219.2 of this part.
(a) Direct costs. Payment shall be made only for costs that
are both directly incurred and reasonably necessary to
provide requested material. Search and processing, reproduction, and transportation costs shall be considered separately when determining whether the costs are reasonably
necessary.
(b) Compliance with legal process, request, or authorization. No payment may be made to a financial institution
until it satisfactorily complies with the legal process, the
formal written request, or the customer authorization.
When the legal process or formal written request is withdrawn, or the customer authorization is revoked, or where
the customer successfully challenges disclosure to a grand
jury or government authority, the financial institution shall
be reimbursed for the reasonably necessary costs incurred
in assembling the requested financial records prior to the
time the financial institution is notified of such event.
(c) Itemized bill or invoice. No reimbursement is required
unless a financial institution submits an itemized bill or
invoice specifically detailing its search and processing,
reproduction, and transportation costs. Search and processing time should be billed in 15-minute increments.
Section 219.6—Payment procedures.
(a) Notice to submit invoice. Promptly following a service
of legal process or request, the court or government authority shall notify the financial institution that it must submit
an itemized bill or invoice in order to obtain payment and
shall furnish an address for this purpose.
(b) Special notice. If a grand jury or government authority
withdraws the legal process or formal written request, or if
the customer revokes the authorization, or if the legal
process or request has been successfully challenged by the
customer, the grand jury or government authority shall
promptly notify the financial institution of these facts, and
shall also notify the financial institution that it must submit
an itemized bill or invoice in order to obtain payment of
costs incurred prior to the time of the notice to the financial
institution receives this notice.
Legal Developments
Section 219.7—[Removed]
3. Section 219.7 is removed.
ORDERS ISSUED UNDER BANK HOLDING
COMPANY
ACT
Orders Issued Under Section 3 of the Bank Holding
Company Act
Bank of Boston Corporation
Boston, Massachusetts
Order Approving Acquisition
Company
of a Bank Holding
Bank of Boston Corporation ("Bank of Boston"), a bank
holding company within the meaning of the Bank Holding
Company Act ("BHC Act"), has requested the Board's
approval under section 3 of the BHC Act (12 U.S.C.
§ 1842) to acquire The Boston Bancorp ("Bancorp") and
thereby indirectly acquire its wholly owned subsidiary,
South Boston Savings Bank ("Savings Bank"), all in Boston, Massachusetts. 1
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 11,639 (1996)). The time for filing
comments has expired, and the Board has considered the
application and all comments received in light of the
factors set forth in section 3(c) of the BHC Act. 2
Bank of Boston, with consolidated assets of approximately $47.4 billion, operates subsidiary banks in Massachusetts, Connecticut, Florida, and Rhode Island, and a
special purpose bank in Maine that provides cash management services. Bank of Boston is the largest commercial
banking organization in Massachusetts, controlling deposits of $15.4 billion, representing approximately 15.2 percent in total deposits in commercial banks or thrift institu-
1. Bank of Boston proposes to acquire Bancorp by merging its
wholly owned subsidiary, BancBoston Merger Co., into Bancorp with
Bancorp to be the surviving company. After consummation of this
proposal, Bank of Boston would merge Savings Bank with and into its
wholly owned subsidiary bank, The First National Bank of Boston
("FNBB"). The Office of the Comptroller of the Currency ( " O C C " )
has approved this merger under the Bank Merger Act (12 U.S.C.
§ 1828(c)). Bank of Boston also has requested Board approval to
acquire options for up to 19.9 percent of Bancorp's stock.
2. The Board received comments from an individual ("Protestant")
contending, without providing any supporting evidence, that acquisitions of small institutions by large bank holding companies have a
number of adverse effects, including decreased competition, increased
risk of failure to the banking system, increased collusion to set fees for
banking products and services, and higher fees for fewer services to
customers, particularly small businesses. The Board has carefully
considered these comments in light of all the facts of record, including
supervisory information and examination reports, in the Board's evaluation of the competitive effects of this proposal, and in its consideration of the financial and managerial resources of the companies
involved, the future prospects of these companies and the effect of the
proposal on the convenience and needs of the community served.
733
tions ("depository institutions") in Massachusetts. 3
Bancorp is the tenth largest commercial banking organization in Massachusetts, controlling $1.4 billion of deposits,
representing approximately 1.3 percent of total deposits in
depository institutions in the state. On consummation of
the proposal, Bank of Boston would remain the largest
commercial banking organization in Massachusetts, controlling $16.8 billion of deposits, representing approximately 16.5 percent of total deposits in depository institutions in Massachusetts.
Competitive
Considerations
The BHC Act prohibits the Board from approving an
application under section 3 of the BHC Act if the proposal
would result in a monopoly, or if the proposal would
substantially lessen competition in any relevant market,
unless such anticompetitive effects are clearly outweighed
in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served. Bank of Boston and Bancorp compete
directly in the Boston banking market. 4
Bank of Boston is the second largest depository institution in the market, controlling deposits of approximately
$12.2 billion, representing approximately 18.3 percent of
total deposits in depository institutions in the market
("market deposits"). 5 Savings Bank is the tenth largest
depository institution in the market, controlling deposits of
$1.4 billion, representing approximately 1 percent of market deposits. On consummation of this proposal, Bank of
Boston would become the largest depository institution
in the market, controlling deposits of approximately
$13.6 billion, representing approximately 20.1 percent of
market deposits. The market would remain moderately
concentrated as measured by the Herfindahl-Hirschman
Index ("HHI"), and numerous competitors would remain
in the market. 6
3. Asset data are as of December 31, 1995. State deposit data are as
of June 30, 1995.
4. The Boston banking market is approximated by the Boston RMA
and the towns of Greenville, Lyndeborough, Mason, and New Ipswich
in Hillsborough County, all in New Hampshire.
5. Market share data are as of June 30, 1995, and are based on
calculations in which the deposits of thrift institutions are included at
50 percent. The Board previously has indicated that thrift institutions
have become, or have the potential to become, significant competitors
of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin
788 (1990); National City Corporation, 70 Federal Reserve Bulletin
743 (1984). 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).
Because the deposits of Savings Bank would be controlled by a
commercial banking organization after consummation of the proposal,
they have been included at 100 percent in the calculation of market
shares for Bank of Boston after consummation of this proposal. See
Norwest Corporation, 78 Federal Reserve Bulletin 452 (1992).
6. The HHI for the Boston banking market would increase by
55 points to 1090. Under the revised Department of Justice Merger
Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in
which the post-merger HHI is between 1000 and 1800 is considered to
be moderately concentrated. The Justice Department has informed the
734
Federal Reserve Bulletin • August 1996
The Board sought comments from the Department of
Justice ( " D O J " ) on the competitive effects of this proposal, and DOJ advised the Board that the proposal is not
likely to have a significantly adverse effect on competition
in any relevant banking market. 7 In light of all the facts of
record, and for the reasons discussed above, the Board
concludes that consummation of the proposal is not likely
to have a significantly adverse effect on competition or on
the concentration of banking services in the Boston banking market or any other relevant market.
Other BHC Act Factors
The BHC Act also requires the Board to consider the
factors specified in section 3 in light of all the facts of
record presented by an application. Those factors include
considerations relating to the financial and managerial resources and future prospects of the institutions involved as
well as other supervisory factors, and the convenience and
needs of the community to be served.
The Board has carefully considered the financial and
managerial resources and future prospects of Bank of Boston and Bancorp, and their respective subsidiaries, and
other supervisory factors in light of all the facts of record.
These facts include supervisory reports of examination
assessing the financial and managerial resources of the
organizations, confidential financial information provided
by Bank of Boston and the relative size of the two institutions. Bank of Boston would incur no additional debt in
connection with this proposal and has sufficient financial
and managerial resources to effect this transaction without
impairing those resources. After consummation of this
proposal, moreover, all of Bank of Boston's subsidiary
banks would remain well capitalized. Based on these and
all the facts of record, the Board concludes that all the
supervisory factors under the BHC Act weigh in favor of
approving this proposal.
A. Convenience and Needs Factor
The Board has long held that consideration of the convenience and needs factor should include a review of the
records of the relevant depository institutions under the
Community Reinvestment Act (12 U.S.C. § 2901 et seq.)
("CRA"). As provided in the CRA, the Board has evaluated this factor in light of examination by the primary
federal supervisor of the CRA performance records of the
relevant institutions. The institution's most recent CRA
Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive
effects) unless the post-merger HHI is at least 1800 and the merger
increases the HHI by more than 200 points. The Justice Department
has stated that the higher than normal HHI thresholds for screening
bank mergers for anticompetitive effects implicitly recognizes the
competitive effect of limited-purpose lenders and other nondepository
financial entities.
7. Protestant presented no facts to indicate that Bank of Boston or
Bancorp have colluded with any other party to set fees in violation of
federal antitrust laws.
performance evaluation is a particularly important consideration in the applications process because it represents a
detailed on-site evaluation of the institution's overall
record of performance under the CRA by its primary
federal supervisor. 8 In addition, the Board considers an
institution's policies and practices for compliance with
applicable fair lending laws. The Board also takes into
account information on an institution's lending activities
that assist in meeting the credit needs of low- and
moderate-income neighborhoods, including programs and
activities initiated since the most recent CRA performance
examination.
Performance Examinations. All of Bank of Boston's
subsidiary banks received a rating of "satisfactory" or
"outstanding" in their most recent examinations for CRA
performance by their primary federal supervisors. FNBB,
which would survive the merger with Savings Bank, received an "outstanding" rating in its most recent examination for CRA performance by its primary supervisor, the
OCC, as of December 19, 1994 ("1994 Examination").
Record of Performance by FNBB. The 1994 Examination found that FNBB had initiated a number of successful
strategies to help address identified housing and small
business credit needs and that the volume of residential
mortgage, housing rehabilitation and small business loans
originated and purchased was significant throughout the
bank's community. 9 Overall, credit extensions and loan
applications reflected a reasonable geographic distribution
in each of the bank's communities, including low- and
moderate-income areas. No evidence of prohibited discriminatory or other illegal credit practices was noted in the
examination. Examiners also commended FNBB for its
leadership in working with government sponsored loan
programs for affordable housing and small business, 10 and
its high level of participation in community development
and redevelopment projects. 11
8. The Board notes that the Statement of the Federal Financial
Supervisory Agencies Regarding the Community Reinvestment Act
provides that a CRA examination is an important and often controlling
factor in the consideration of an institution's CRA record and that
reports of these examinations will be given great weight in the
applications process. 54 Federal Register at 13,745.
9. Protestant asserts that consolidation of the banking industry has
substantially impaired the ability of small businesses to negotiate with
banks, thereby making them vulnerable to high bank fees. The record
indicates that FNBB has taken steps designed to provide special
services to assist small businesses with their banking needs. FNBB
formed a Small Business Banking Department in 1993, for example,
and introduced the "Business Focus Account" with overdraft protection and other special features. The bank also expanded its lending to
small businesses through its "Credit Initiative Program" and features
a simplified small business loan application.
10. FNBB participates in loan programs sponsored by the Small
Business Administration ("SBA") and was the largest SBA lender in
Massachusetts in 1994. FNBB also participates in other programs that
promote small business lending such as the Massachusetts Business
Development Corporation and the Economic Development Individual
Corporation.
11. The record does not support Protestant's allegation about excessive fees. The record indicates that Bank of Boston has an established
record of providing a full range of banking services in its delineated
Legal Developments
FNBB's efforts to ascertain the credit needs of its community include contacts with community-based organizations and a review of demographic data in designing products to meet those needs. Examiners also noted that FNBB
uses effective marketing strategies that include marketing
and advertising programs to reach residents in low- and
moderate-income areas.
Conclusion on Convenience and Needs Factor. As discussed above, the Board has carefully reviewed the relevant CRA examination information, the programs and policies implemented by the relevant institutions, comments
and concerns raised by Protestant, and other facts of record
in its consideration of the effect of this transaction on the
convenience and needs of the community. Based on this
review, the Board concludes that convenience and needs
considerations are consistent with approval of this application.
Conclusion
Based on the foregoing and all other facts of record, the
Board has determined that the application should be, and
hereby is, approved. 12 The Board's approval is expressly
conditioned on Bank of Boston's compliance with all the
commitments made in connection with this application.
The commitments and conditions relied on by the Board in
reaching this decision shall be deemed to be conditions
imposed in writing by the Board in connection with its
findings and decision, and, as such, may be enforced in
proceedings under applicable law.
The transaction 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
communities, including substantial lending services and offers a range
of retail banking services. Examiners noted, for example, that FNBB
offers a "First Step" product line with low-cost services including, a
low-fee checking account that waives fees for individuals over
65 years of age, and under certain other circumstances. First Step also
includes a basic savings account with no minimum balance, no charge
for check cashing, and a monthly fee, which may be waived for
individuals older than 65 or younger than 18. The record does not
support the conclusion that the fees charged by Bank of Boston for
checking accounts or other banking services are based in any way on a
factor prohibited by law.
12. Protestant requested notification of any public meeting or hearing on this application but did not request that such a meeting or
hearing be held as provided in the Board's Rules of Procedure.
12 C.F.R. 262.3(e).
The Board notes that a hearing is required under section 3(b) of the
BHC Act only if the appropriate supervisory authority for the bank to
be acquired makes a timely written recommendation of denial. No
supervisory agency has recommended denial of the proposal. Generally, under the Board's Rules of Procedure, the Board may, in its
discretion, hold a public hearing or meeting on an application to
clarify factual issues related to the application and to provide an
opportunity for testimony, if appropriate. 12 C.F.R. 262.3(e) and
262.25(d). All interested parties have had an opportunity to present
their views and Protestant has submitted comments that have been
considered by the Board. On the basis of all the facts of record, the
Board has determined that a public meeting or hearing is not necessary to clarify the factual record of the application, or otherwise
warranted in this case.
735
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 June 3,
1996.
Voting for this action: Chairman Pro Tempore Greenspan and
Governors Lindsey, Phillips, and Yellen. Absent and not voting:
Governor Kelley.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Community Bancshares of Marysville, Inc.
Marysville, Kansas
Order Approving Acquisition
of a Bank
Community Bancshares of Marysville, Inc., Marysville,
Kansas ("Community"), a bank holding company within
the meaning of the Bank Holding Company Act ("BHC
Act") has applied for the Board's approval under section 3
of the BHC Act to acquire Community State Bank,
Hanover, Kansas ("Bank"). 1
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 15,263 (1996)). The time for filing
comments has expired, and the Board has considered the
application and all comments received in light of the
factors set forth in section 3(c) of the BHC Act.
Community is the 47th largest banking organization in
Kansas controlling $101.1 million in deposits, representing
less than 1 percent of total deposits in commercial banks in
Kansas. 2 Bank is the 226th largest banking organization in
Kansas, with $21.3 million in deposits, representing less
than 1 percent of total deposits in commercial banking
organizations in Kansas. On consummation of this proposal, Community would become the 35th largest banking
organization in Kansas, controlling deposits of $122.4 million, representing less than 1 percent of total deposits in
commercial banking organizations in the state.
1. On consummation of the proposal, Community would merge
Bank into its subsidiary bank, Citizens State Bank, Marysville, Kansas
( " C S B " ) . This transaction requires approval under the Bank Merger
Act (12 U.S.C. § 1828(c)) by the Federal Deposit Insurance Corporation, the primary federal supervisor of CSB.
2. All banking data are as of June 30, 1995. Market shares data are
based on calculations in which the deposits of thrift institutions are
included at 50 percent. The Board previously has indicated that thrift
institutions have become, or have the potential to become, significant
competitors of commercial banks. See Midwest Financial Group, 75
Federal Reserve Bulletin 386 (1989); National City Corporation, 70
Federal Reserve Bulletin 143 (1984). Thus, the Board regularly has
included thrift deposits in the calculation of market share on a 50percent weighted basis. See, e.g., First Hawaiian, Inc., 11 Federal
Reserve Bulletin 52 (1991).
736
Federal Reserve Bulletin • August 1996
Community and Bank compete directly in the MarshallWashington County, Kansas, banking market. 3 In the
Marshall-Washington County banking market, Community
is the largest depository institution in the market, controlling deposits of $101.1 million, representing 28.7 percent
of total deposits in commercial banks in the market ("market deposits"). Bank is the fourth largest depository institution in the market, controlling $21.3 million in deposits,
representing 6.0 percent of total market deposits. On consummation of the proposal, Community would remain
the largest depository institution in the market with
$122.4 million in deposits, representing 34.7 percent of
market deposits. The Herfindahl-Hirschman Index
("HHI") would increase by 347 points to 1848 as a result
of the proposed transaction. 4
The Board notes that the HHI levels are only guidelines
that are used by the Board, the Department of Justice, and
the other banking agencies to help identify cases in which a
more detailed competitive analysis is appropriate to assure
that the proposal would not have a significantly adverse
effect on competition in any relevant market. A proposal
that fails to pass the HHI market screen may, nonetheless,
be approved because other information may indicate that
the proposal would not have a significantly adverse effect
on competition. In this case, the Department of Justice has
reviewed the proposal and advised the Board that consummation of the proposal is not likely to have any significantly adverse competitive effects in the MarshallWashington County banking market and any other relevant
banking market.
Other facts indicate that the market concentration as
measured by the HHI tends to overstate the competitive
effects of this proposal in the Marshall-Washington County
banking market. Thirteen commercial bank competitors
and one thrift institution would remain in this sparsely
populated, rural market after consummation of this proposal. Two of the commercial bank competitors would
each have more than 10 percent of market deposits. Kansas
law, moreover, permits Kansas banks to branch statewide. 5
Accordingly, based on all the facts of record, the Board
concludes that consummation of the proposal would not
result in a significantly adverse effect on competition in
any relevant market.
3. The Marshall-Washington County, Kansas, banking market consists of all of Marshall and Washington Counties, in Kansas, except
the town of Clifton.
4. Under the revised Department of Justice Merger Guidelines
(49 Federal Register 26,823 (June 29, 1984)), a market in which the
post-merger HHI is over 1800 is considered to be concentrated. The
Justice Department has informed the Board that a bank merger or
acquisition generally will not be challenged (in the absence of other
factors indicating anti-competitive effects) unless the post-merger
HHI is at least 1800 and the merger increases the HHI by 200 points.
The Justice Department has stated that the higher than normal HHI
thresholds for screening bank mergers for anti-competitive effects
implicitly recognize the competitive effect of limited-purpose lenders
and other non-depository financial entities.
5. Kan. Stat. Ann. § 9-1111(b) (Supp. 1995).
The Board concludes that the financial and managerial
resources and future prospects of the organizations involved in the proposal are consistent with approval as are
the other supervisory factors the Board must consider
under section 3 of the BHC Act. 6 In addition, considerations relating to the convenience and needs of the communities to be served are consistent with approval of the
application. 7
Based on the foregoing and all the facts of record, the
Board has determined that the proposal should be, and
hereby is, approved. The commitments and conditions
relied on by the Board in reaching this decision are deemed
to be conditions imposed in writing by the Board in connection with its findings and decision, and, as such, may be
enforced in proceedings under applicable law.
The transactions shall not be consummated before the
fifteenth calendar day following the effective date of this
order, and the transactions 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 Kansas City, acting pursuant to delegated authority.
By order of the Board of Governors, effective June 17,
1996.
6. Protestants have requested that the Board hold a public hearing
on the application. Section 3(b) of the BHC Act does not require the
Board to hold a hearing on an application unless the appropriate
supervisory authority of the bank to be acquired makes a timely
written recommendation of denial of the application. In this case, the
Board has not received such a recommendation. Generally, under the
Board's Rules of Procedure, the Board may, in its discretion, hold a
public hearing on an application to clarify factual issues related to the
application and to provide an opportunity for testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). Protestants have had an opportunity to present written submissions, and have submitted written
comments that have been considered by the Board. Protestants' request fails to demonstrate why their written submissions do not
adequately present their allegations or why a public hearing is otherwise warranted in this case. Based on all the facts of record, the Board
has determined that a public hearing is not necessary to clarify the
factual record in this application and is not warranted in this case.
Accordingly, Protestants' request for a public hearing is denied.
7. The Board carefully considered letters and a petition opposing the
proposal from a number of residents in Barnes, Kansas (collectively
"Protestants"), a town in the north central part of the state with a
population of 150. Protestants object to Community's plans to close
Bank's branch in Barnes following the merger of Bank with CSB.
This branch is the only financial institution currently operating in
Barnes. CSB has responded that its full-service branch in Waterville,
Kansas, which is approximately six miles from Barnes, would continue to provide banking services to the residents of Barnes as part of
its primary service area. This branch also offers direct-deposit and
bank-by-mail services.
The Board notes that in connection with the proposal Bank has
already contracted to sell the branch building in Barnes to another
bank and that purchasing bank has agreed to open a branch at the
Barnes location. In light of these facts, it appears that the convenience
and needs of the community, including banking services to the residents of Barnes, would continue to be served after consummation of
the proposal.
Legal Developments
Voting for this action: Governors Kelley, Lindsey, Phillips, and
Yellen. Absent and not voting: Chairman Pro Tempore Greenspan.
JENNIFER J . JOHNSON
Deputy Secretary of the Board
Croghan Bancshares, Inc.,
Fremont, Ohio
Order Approving the Acquisition of a Bank Holding
Company, the Merger of Banks, and the Establishment
Branches
Croghan Bancshares, Inc., Fremont, Ohio, ("Croghan"), a
bank holding company within the meaning of the Bank
Holding Company Act ("BHC Act"), has requested the
Board's approval under section 3 of the BHC Act
(12 U.S.C. § 1842) to acquire Union Bancshares Corp.
("Union"), and thereby indirectly acquire its wholly
owned subsidiary bank, Union Bank and Savings Company, ("Union Bank"), both in Bellevue, Ohio. 1 Croghan's
subsidiary bank, The Croghan Colonial Bank, Fremont,
Ohio ("Croghan Bank"), a state member bank, also has
requested Board approval under section 18(c) of the Federal Deposit Insurance Act (12 U.S.C. § 1828(c)) (the
"Bank Merger Act"), and section 9 of the Federal Reserve
Act (12 U.S.C. § 321) to merge with Union Bank and
establish branches at the current locations of Union Bank's
branches. 2
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 15,946 (1996)) and given in accordance with the Bank Merger Act and the Board's Rules of
Procedure (12 C.F.R. 262.3(b)). As required by the Bank
Merger Act, reports on the competitive effects of the
merger were requested from the United States Attorney
General ("Department of Justice"), the Office of the
Comptroller of the Currency ("OCC"), and the Federal
Deposit Insurance Corporation ("FDIC"). The time for
filing comments has expired, and the Board has considered
the proposal and all comments received in light of the
factors set forth in section 3(c) of the BHC Act, the Bank
Merger Act, and section 9 of the Federal Reserve Act.
Croghan is the 71st largest commercial banking organization in Ohio, controlling deposits of approximately
$205.9 million, representing less than 1 percent of total
deposits in commercial banks or thrift institutions ("depository institutions") in Ohio. 3 Union is the 148th largest
commercial banking organization in Ohio, controlling approximately $81.9 million in deposits, representing less
1. Croghan proposes to acquire Union by merging its wholly owned
subsidiary, Croghan Acquisition Corp., into Union, with Union as the
surviving company. Union would be dissolved after the merger of
Croghan Bank and Union Bank.
2. Croghan Bank would establish branches at the following Union
Bank locations: One Union Square, Bellevue; 114 N. Sandusky Street,
Bellevue; and 100 S. Main Street, Clyde; and 11 Monroe Street,
Monroeville, all in Ohio.
3. State deposit data are as of June 30, 1995.
than 1 percent of total deposits in depository institutions in
the state. On consummation of the proposal, Croghan
would become the 54th largest commercial banking organization in Ohio, controlling $287.8 million in deposits,
representing less than 1 percent of total deposits in depository institutions in Ohio.
Competitive
of
737
Considerations
Croghan and Union compete directly in the Fremont, Ohio,
banking market ("Fremont banking market"). 4 Croghan is
the largest commercial banking organization in the Fremont banking market, controlling deposits of approximately $205.9 million, representing approximately
40.2 percent of total deposits in depository institutions in
the market ("market deposits"). 5 Union is the 10th largest
commercial banking organization in the market, controlling deposits of approximately $7.6 million, representing
1.5 percent of market deposits. On consummation of the
proposal, Croghan would remain the largest commercial
banking organization in the market, controlling deposits of
approximately $213.5 million, representing approximately
41.7 percent of market deposits, and the HerfindahlHirschman Index ( " H H I " ) for the Fremont banking market
would increase by 119 points to 2326. 6 This increase in
market concentration as measured by the HHI would not
exceed the Department of Justice Merger Guidelines. The
Board notes, moreover, that ten competitors would remain
in the Fremont banking market. Four of these competitors
are among the largest commercial banking organizations in
Ohio, and three of the competitors would each have more
than 11 percent of market deposits. In addition, Ohio law
permits statewide branching. 7 The Department of Justice
has reviewed the proposal and advised the Board that
consummation of the proposal would not likely have any
4. The Fremont banking market is approximated by Sandusky
County, Ohio, excluding the areas of the Woodville Township and the
City of Bellevue.
5. Market share data are as of June 30, 1995, and are based on a
calculation in which the deposits of thrift institutions are included at
50 percent. The Board previously has indicated that thrift institutions
have become, or have the potential to become, significant competitors
of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin
788 (1990); National City Corporation, 70 Federal Reserve Bulletin
743 (1984). Thus, the Board has regularly included thrift deposits in
the calculation of market share on a 50-percent weighted basis. See,
e.g., First Hawaiian Inc., 77 Federal Reserve Bulletin 52 (1991).
6. Under the revised Department of Justice Merger Guidelines,
49 Federal Register 26,823 (June 29, 1984), a market in which the
post-merger HHI is above 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 postmerger 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 recognizes the competitive effect of limitedpurpose lenders and other nondepository financial entities.
7. Ohio Rev. Code Ann. § 1111.03 (Anderson 1988).
738
Federal Reserve Bulletin • August 1996
isignificantly adverse competitive effects in the Fremont
banking market or any other relevant banking market. 8
Based on these and all of the facts of record, the Board
concludes that consummation of the proposal is not likely
to have a significantly adverse effect on competition or the
concentration of banking services in the Fremont banking
market or any other relevant market. In light of all the facts
of record, the Board also concludes that the financial and
managerial resources and future prospects of Croghan and
Union and their respective subsidiaries are consistent with
approval, as are supervisory factors the Board must consider under the BHC Act, the Bank Merger Act, and the
Federal Reserve Act. In addition, considerations relating to
the convenience and needs of the community to be served
are consistent with approval.
For these reasons, and in light of all the other facts of
record, the Board has determined that the applications
should be, and hereby are, approved. The Board's approval
is expressly conditioned on Croghan's compliance with all
the commitments made in connection with the applications. The commitments relied on by the Board in reaching
this decision shall be deemed to be conditions imposed in
writing by the Board in connection with its findings and
decision, and, as such, may be enforced in proceedings
under applicable law.
The transactions 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 Cleveland,
acting pursuant to delegated authority.
By order of the Board of Governors, effective June 10,
1996.
Voting for this action: Chairman Pro Tempore Greenspan, and
Governors Lindsey, Phillips, and Yellen. Absent and not voting:
Governor Kelley.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
First Commerce Banks of Florida, Inc.
Winter Haven, Florida
Order Approving the Acquisition of a Bank
First Commerce Banks of Florida, Inc., Winter Haven
("First Commerce"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC Act"),
has requested the Board's approval under section 3 of the
BHC Act (12 U.S.C. § 1842) to acquire all the voting
shares of Prime Bank of Central Florida, Titusville, both in
Florida ("Prime Bank"). 1
8. The OCC and FDIC also have not objected to the proposal.
1. First Commerce proposes to merge Prime Bank into Prime
Successor Bank, an interim Florida state-chartered bank, with Prime
Successor Bank surviving the merger. Prime Successor Bank would
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 9459 (1996)). The time for filing
comments has expired, and the Board has considered the
application and all comments received in light of the
factors set forth in section 3 of the BHC Act.
First Commerce is the 91st largest commercial banking
organization in Florida, controlling deposits of approximately $103.9 million, representing less than 1 percent of
total deposits in commercial banks in the state. Prime Bank
is the 177th largest commercial banking organization in
Florida, controlling deposits of approximately $46.4 million, representing less than 1 percent of total deposits in
commercial banking organizations in the state. On consummation of this proposal, First Commerce would become the
63d largest commercial banking organization in Florida,
controlling approximately $150.3 million in deposits, representing less than 1 percent of total deposits in commercial banking organizations in the state. 2
Competitive
Considerations
The Board is prohibited from approving an application
under section 3 of the BHC Act if the proposal would
result in a monopoly, or if the proposal would substantially
lessen competition in any relevant market unless such
anticompetitive effects are clearly outweighed in the public
interest by the probable effect of the transaction in meeting
the convenience and needs of the community to be served.
First Commerce and Prime Bank do not compete in any
banking market. Based on all the facts of record, the Board
concludes that consummation of this proposal would not
result in any significantly adverse effect on competition or
on the concentration of banking resources in any relevant
banking market.
Other Factors under the BHC Act
A. Supervisory Factors
The BHC Act also requires the Board to consider the
financial and managerial resources and future prospects of
the companies and banks involved, the convenience and
needs of the community to be served, and certain other
supervisory factors.
The Board has carefully considered the financial and
managerial resources and future prospects of First Commerce, its subsidiary bank, and Prime Bank, as well as
other supervisory factors in light of all the facts of record.
These facts include supervisory reports of examination
assessing the financial and managerial resources of the
organizations and confidential financial information pro-
be renamed Prime Bank of Central Florida. The Florida Department of
Banking and Finance approved the merger of Prime Bank with Prime
Successor Bank on May 29, 1996, conditioned on the receipt of all
required approvals and compliance with other filing requirements
under Florida law.
2. State deposit data are as of December 31, 1995.
Legal Developments
vided by First Commerce. Based on these and all other
facts of record, the Board concludes that all the supervisory
factors under the BHC Act, including financial and managerial resources, weigh in favor of approving this proposal.
B. Convenience and Needs Factor
The Board long has held that consideration of the convenience and needs factor includes a review of the records of
the relevant depository institutions under the Community
Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA").
As provided in the CRA, the Board has evaluated this
factor in light of examinations by the primary federal
supervisor of the CRA performance records of the relevant
institutions.
The Board also has carefully considered comments from
The Fair Housing Continuum, Inc., Cocoa, Florida ("Protestant"), contending that Prime Bank does not adequately
ascertain, or assist in meeting, the credit needs of communities with predominately low- to moderate-income
("LMI") and minority residents. 3 Protestant also alleges,
on the basis of data filed under the Home Mortgage Disclosure Act (12 U.S.C. § 2801 et seq.) ("HMDA"), that Prime
Bank illegally discriminates in its mortgage lending. 4 In
addition, Protestant alleges that Prime Bank opens
branches only in neighborhoods with predominately nonminority residents.
First Commerce states that it intends to continue Prime
Bank's current CRA program and would review and monitor this program after consummation of the proposal. First
Commerce believes that Prime Bank will benefit from the
collective resources of First Commerce, including additional lending resources and CRA experience, and has
3. Protestant also maintains that Prime Bank initiates but does not
complete community development projects, and has not completed
two projects involving the City of Titusville and one involving Habitat
for Humanity ("Habitat"). Prime Bank has provided documentation
from the City of Titusville that confirmed Prime Bank's participation
in its housing incentive plan. This submission stated that the delays in
implementing a new home buyers program were not related to any
action or lack of action by Prime Bank. Prime Bank also noted that it
presented several real estate proposals to Habitat that were declined
for reasons involving zoning issues or because Habitat had surplus
real estate inventory at the time.
4. Protestant has filed a housing discrimination complaint with the
Department of Housing and Urban Development ( " H U D " ) , alleging
that Prime Bank engaged in lending practices that discriminate on the
basis of race and national origin. This complaint is in the initial stages
of investigation by HUD and no finding of illegal discrimination has
been made against Prime Bank. Moreover, under the Fair Housing Act
(42 U.S.C. § 3601 et seq.), HUD has jurisdiction to determine
whether Prime Bank is in compliance with fair lending laws and to
adjudicate Protestant's complaint. The Board previously has noted
that its limited jurisdiction under the specific statutory factors set forth
in the BHC Act does not authorize the Board to adjudicate disputes
between a commenter and an applicant or target institution that arise
under a statute administered and enforced by another agency. On the
other hand, substantiated improper actions may be considered by the
Board in light of all facts of record of an application under the factors
in the BHC Act or in the context of the Board's supervisory authority
over its regulated banking organizations. See Norwest
Corporation,
82 Federal Reserve Bulletin 580 (1996).
739
stated that it is committed to assuring that all of its subsidiary banks maintain satisfactory or outstanding CRA ratings.
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 the institution's primary federal supervisor.5 In addition, the Board considers an institution's policies and practices for compliance with applicable fair lending laws. The Board also takes into account information on
an institution's lending activities that assist in meeting the
credit needs of LMI neighborhoods, including programs
and activities initiated since the institution's most recent
CRA performance examination.
Performance Examinations. First Commerce's subsidiary bank, First Commerce Bank of Polk County, Winter
Haven, Florida ("First Commerce Bank"), received a "satisfactory" rating from its primary federal supervisor, the
Federal Deposit Insurance Corporation ("FDIC"), in its
most recent examination for CRA performance as of October 1995 ("First Commerce Bank Examination"). 6 Prime
Bank also received a "satisfactory" rating from the FDIC
at its most recent examination for CRA performance as of
April 1994 ("Prime Bank Examination").
Performance Record of First Commerce Bank. The First
Commerce Bank Examination stated that the bank's community delineation was reasonable and did not exclude any
LMI neighborhoods. Examiners found that First Commerce Bank solicited loan applications from all segments
of the community and that First Commerce Bank had not
engaged in illegal credit practices or practices that discouraged applications for any type of credit. Examiners also
found that extensions of credit, applications, withdrawals,
and denials were sufficiently distributed throughout First
Commerce Bank's delineated community. In addition, examiners noted that employees of First Commerce Bank
received training regarding fair lending and antidiscrimination laws, and that the board of directors reviewed geocoding data to ensure that applications were
received from all areas of First Commerce Bank's delineated community. Examiners also noted that First Commerce Bank advertised in newspapers and other publications that are distributed throughout the community. First
Commerce Bank's branch offices were considered by examiners to be readily accessible to all members of the
community.
5. The Board notes that the Statement of the Federal Financial
Supervisory Agencies Regarding the Community Reinvestment Act
provides that a CRA examination is an important and often controlling
factor in the consideration of an institution's CRA record and that
reports of these examinations will be given great weight in the
applications process. 54 Federal Register 13,742, 13,745 (1989).
6. First Commerce received approval from the Federal Reserve
Bank of Atlanta to acquire First Mercantile National Bank, Longwood, Florida, in May 1996. First Mercantile National Bank received
a "satisfactory" rating from the Office of the Comptroller of the
Currency in its most recent examination for CRA performance as of
September 1993.
740
Federal Reserve Bulletin • August 1996
First Commerce Bank engages in several lending and
community development programs to help meet the credit
needs of its community, including LMI neighborhoods. For
example, First Commerce Bank extended four loans in
connection with the Affordable Housing Program of the
City of Winter Haven, and also extended an interest-free
line of credit to the Habitat for Humanity, which assists in
the construction of affordable housing for low-income families throughout First Commerce Bank's community. Examiners also found that First Commerce Bank's officers
and directors were involved in a variety of community
organizations, including the Auburndale Redevelopment
Committee, the Lakeland Housing Authority, and the Minority Lending Advisory Council.
Performance Record of Prime Bank. Prime Bank is a
small banking organization with assets of $53 million and
deposits of less than $50 million. Accordingly, it is unable
to originate a large number of mortgages for its own
portfolio. Prime Bank, however, originates and processes
mortgages through a number of government loan programs
that are designed to increase credit availability in its community, including loans for LMI residents, such as the
Federal Housing Administration ("FHA"), Veterans Administration ("VA"), and the Farmers Home Administration programs. 7 The Prime Bank Examination noted Prime
Bank's participation in the Brevard County Housing Authority Bond Program ("Bond Program"), which is designed to benefit first-time LMI home buyers. As part of
the Bond Program, Prime Bank originates VA and FHA
loans. The record indicates that from 1991 through 1994,
Prime Bank originated FHA and VA loans totalling more
than $9 million for the Bond Program. Prime Bank states
that, in 1995, it originated approximately $2.5 million in
Bond Program loans, most of which were FHA and VA
loans. Examiners also found that Prime Bank is actively
involved in local community development and redevelopment projects. For example, Prime Bank has agreed to
provide home purchase financing for a new subdivision
development that will provide housing for 32 low-income
families.
The Prime Bank Examination found that the bank maintained contact with government officials and community
leaders in an effort to determine the credit needs within
Prime Bank's community. In addition, examiners noted
that Prime Bank had ongoing contact with community
development organizations. The Prime Bank Examination
also concluded that Prime Bank effectively advertised its
residential loans and other credit products throughout the
local community, including LMI neighborhoods. 8 In addition, examiners noted that Prime Bank's branch offices are
7. Prime Bank also is a Federal National Mortgage Associationapproved lender and servicer.
8. Prime Bank advertises its banking products in local newspapers
and on local radio. Prime Bank also has sponsored several continuing
education seminars for local realtors on conventional loans, FHA, VA,
and other loan programs designed to meet the credit needs of LMI
individuals.
centrally located and reasonably accessible to all segments
of the delineated community.
The Board has carefully reviewed HMDA data for Prime
Bank in light of Protestant's comments. 9 These data indicate that the number and percentage of applications from
and loans to individuals in LMI census tracts increased
between 1993 and 1995. In addition, Prime Bank's percentage of applications from and loans to African-American
applicants increased during this same period and is comparable to or exceeds the representation of AfricanAmericans in Prime Bank's service community. The percentage of loans that Prime Bank made to LMI applicants
also increased from 1994 to 1995. Moreover, the Prime
Bank Examination found that the bank's 1993 HMDA data
disclosed a reasonable penetration of the various census
tracts that comprise its delineated community, including
LMI neighborhoods.
The HMDA data, however, also reflect disparities in the
rate of denials by racial group. The Board is concerned
when the record of an institution indicates disparities in
lending to minority applicants, and believes that all banks
are obligated to ensure that their lending practices are
based on criteria that assure not only safe and sound
lending, but also equal access to credit by creditworthy
applicants regardless of race. The Board recognizes, however, that HMDA data alone provide an incomplete measure of an institution's lending in its community because
these data cover only a few categories of housing-related
lending and provide limited information about the covered
loans. 10 HMDA data, therefore, have limitations that make
the data an inadequate basis, absent other information, for
concluding that an institution has engaged in illegal discrimination in lending.
The Prime Bank Examination, which, as noted, included
a review of Prime Bank's 1993 HMDA data, found no
evidence of illegal discrimination or other prohibited credit
practices. In addition, examiners noted that Prime Bank's
loan policies and procedures revealed no practices designed to discourage applications for credit, and found no
substantive violations of fair lending laws or HMDA reporting requirements. Moreover, Prime Bank indicates that
it has established a loan review program to assure that
9. Protestant contends that Prime Bank defines its service area to
exclude potential minority borrowers. The Board believes that an
assessment of an institution's delineated community can be most
elfectively considered in an on-site examination by the institution's
primary federal supervisor and that such an examination provides a
better opportunity to consider whether an institution's delineated
community reflects illegal discrimination in light of all the institution's lending activities. See North Fork Bancorporation, 82 Federal
Reserve Bulletin 338 (1996). The Prime Bank Examination found that
Prime Bank's delineated community was reasonable and did not
arbitrarily exclude any areas, particularly LMI areas.
10. For example, these data 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.
Legal Developments
applicants receive equal treatment and are not denied credit
on a prohibited basis.
Conclusion Regarding Convenience and Needs Factor.
As discussed above, the Board has carefully reviewed the
relevant CRA examination information, the programs implemented by the relevant institutions, the policies in place
to ensure fair lending, relevant HMDA and other lending
data, comments and concerns raised by Protestant, and
other facts of record in its consideration of the effect of this
transaction on the convenience and needs of the community. Based on this review, the Board concludes that convenience and needs considerations, including the records of
performance of First Commerce and Prime Bank, are consistent with approval of this application.
Conclusion
Based on the foregoing and all the facts of record, the
Board has determined that the application should be, and
hereby is, approved. 11 The Board's approval of the proposal is conditioned on compliance by First Commerce
with the commitments made in connection with this application. The commitments and conditions relied on by the
Board in reaching this decision shall be deemed to be
conditions imposed in writing by the Board in connection
with its findings and decision, and, as such, may be enforced in proceedings under applicable law.
The acquisition shall not be consummated before the
fifteenth calendar day following the effective date of this
order, or later than three months after the effective date of
this order, unless such period is extended for good cause by
the Board or the Federal Reserve Bank of Atlanta, acting
pursuant to delegated authority.
By order of the Board of Governors, effective June 5,
1996.
11. Protestant requests that the Board hold a public hearing or
meeting on this proposal to permit oral presentations on the application and Protestant's comments. Section 3(b) of the BHC Act does not
require the Board to hold a public hearing or meeting on an application unless the appropriate supervisory authority for the bank to be
acquired makes a timely written recommendation of denial. In this
case, neither the FDIC nor any state supervisory authority has recommended denial.
Under the Board's rules, the Board may, in its discretion, hold a
public hearing or meeting on an application to clarify factual issues
and to provide an opportunity for testimony, if appropriate. 12 C.F.R.
262.3(e) and 262.25(d). The Board has carefully considered Protestant's request in light of all the facts of record. Protestant has had
ample opportunity to submit its views, and has, in fact, made written
submissions that have been considered by the Board in acting on this
application. Protestant does not indicate what, if any, additional views
would be expressed at a public hearing or meeting, or why Protestant's written submissions do not adequately present its views. Based
on all the facts of record, the Board has determined that a public
hearing or meeting is not necessary to clarify the factual record in this
application, or otherwise warranted in this case. Accordingly, Protestant's request for a public hearing or meeting on this application is
hereby denied.
741
Voting for this action: Chairman Pro Tempore Greenspan and
Governors Kelley, Lindsey, Phillips, and Yellen.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Flathead Holding Company of Bigfork
Bigfork, Montana
Order Approving Acquisition
of Shares of a Bank
Flathead Holding Company of Bigfork, Bigfork ("Flathead"), a bank holding company within the meaning of the
Bank Holding Company Act ("BHC Act"), has requested
the Board's approval under section 3 of the BHC Act
(12 U.S.C. § 1842) to acquire up to 23.4 percent of the
voting shares of Bank West, N.A., Kalispell, both in Montana ("Bank West").
Notice of this proposal, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 15,483 (1996)). 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.
Flathead is affiliated with Mountain Bank System, Inc.,
Whitefish, Montana ("MBS"), through common ownership.1 Together, Flathead and MBS are the 14th largest
depository institution in Montana, controlling approximately $108 million in deposits, representing approximately 1.5 percent of total deposits in depository institutions in the state. 2 BankWest, with total consolidated assets
of approximately $40.9 million, is the 48th largest depository institution in Montana, controlling approximately
$32.5 million in deposits, representing less than 1 percent
of total deposits in depository institutions in the state. On
consummation of this proposal, Flathead and MBS collectively would become the 12th largest depository institution
in Montana, controlling deposits of $140 million, representing approximately 2 percent of the total deposits in
depository institutions in the state.
Flathead proposes to acquire less than 25 percent of the
voting shares of BankWest, which is not a normal acquisition for a bank holding company. Nonetheless, the requirement in section 3(a)(3) of the BHC Act that the Board's
approval be obtained before a bank holding company acquires more than 5 percent of the voting shares of a bank
suggests that Congress contemplated the acquisition by
bank holding companies of between 5 and 25 percent of
the voting shares of a bank or a bank holding company. 3
The Board has indicated that acquisitions of less than a
1. MBS controls Mountain Bank, Whitefish ("Mountain Bank"),
and Valley Bank of Belgrade, Belgrade, both in Montana.
2. Asset and deposit data are as of March 31, 1996. In this context,
depository institutions include commercial banks, savings banks, and
savings associations.
3. Asset and deposit data are as of March 31, 1996. In this context,
depository institutions include commercial banks, savings banks, and
savings associations.
742
Federal Reserve Bulletin • August 1996
25-percent voting interest may nevertheless permit a bank
holding company to exercise a controlling influence over
the management and policies of another bank holding
company. 4
On consummation of the proposal, Flathead would be
the largest shareholder of BankWest and would have the
ability to elect at least one member to BankWest's board of
directors. Flathead has indicated, moreover, that it might,
from time to time, exercise a controlling influence over the
management or polices of BankWest if, in its view, circumstances would warrant such action. Based on all the facts of
record, the Board concludes that Flathead would have the
ability to exercise a controlling influence over the management or policies of BankWest and thereby would control
BankWest for purposes of the BHC Act. 5
Competitive
Considerations
The BHC Act provides that the Board may not approve a
proposal submitted under section 3 of the Act if the proposal would result in a monopoly or if the effect of the
proposal may be substantially to lessen competition in any
relevant market unless the Board finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the
transaction in meeting the convenience and needs of the
community to be served. In evaluating the competitive
effects of this proposal, the Board has carefully considered
BankWest's contentions that consummation of this proposal would result in significantly adverse effects on competition for banking services, particularly for small business loans, and that the relevant geographic banking market
is smaller than the market defined by the Federal Reserve
Bank of Minneapolis ("Reserve Bank").
A. Relevant Product Market
The Board has long held that the product market for
evaluating bank mergers and acquisitions is the cluster of
products and services offered by banking institutions, 6 and
the Supreme Court has emphasized that it is the cluster of
products and services that, as a matter of trade reality,
makes banking a distinct line of commerce. 7 According to
4. See McLeod Bancshares, Inc., 73 Federal Reserve Bulletin 724
(1987); Hudson Financial Associates, 72 Federal Reserve Bulletin
150(1986).
5. Flathead has acknowledged that, if the Board deems Flathead to
control BankWest, Flathead must serve as a source of financial and
managerial strength to BankWest and would be subject to crossguarantee liability provisions of the Federal Deposit Insurance Corporation Act in connection with any default by or insurance fund
assistance to BankWest. See 12 C.F.R. 225.4(a); 12 U.S.C.
§ 1815(e)(1).
6. See Chase Manhattan Corporation, 81 Federal Reserve Bulletin
883 (1995); The Bank of New York Company, Inc., 74 Federal Reserve
Bulletin 257, 261 (1988).
7. United States v. Philadelphia National Bank, 374 U.S. 321, 357
(1963) ("U.S. v. Philadelphia National"). Accord United States v.
Connecticut National Bank, 418 U.S. 656 (1974); United States v.
the Court, this clustering facilitates the convenient access
to these products and services and vests the cluster with
economic significance beyond the individual products and
services that constitute the cluster. 8 Other courts have
followed this position. 9 In addition, a study conducted by
Board staff supports the conclusion that customers continue to seek to obtain this cluster of services. 10 After
carefully considering all the facts of record in light of
relevant Board and judicial precedents, the Board concludes that the appropriate product market in this case is
the cluster of banking products and services.
B. Definition of Relevant Banking Market
The Board and the courts have found that the relevant
banking market for analyzing the competitive effect of a
proposal must reflect commercial and banking realities and
should consist of the local area where the banks involved
offer their services and where local customers can practicably turn for alternatives. 11 Flathead and MBS compete
directly with BankWest in the Kalispell banking market, an
area that is approximated by Flathead and Lincoln Counties and the Bigfork-Swan River and Poison Divisions of
Lake County, all in Montana ("Kalispell Banking Market"). In reaching this conclusion, the Board has carefully
considered BankWest's argument that the relevant geographic market for this proposal should be limited to
Flathead County.
Kalispell, with a population of 11,917, is a regional trade
center in Flathead County. 12 In 1992, the Board considered
whether Lincoln County and Flathead County are in the
same banking market. The Board noted at that time that a
number of considerations indicated an economic integra-
Phillipsburg National Bank, 399 U.S. 350 (1969) ("U.S. v. Phillipsburg").
8. U.S. v. Phillipsburg, 399 U.S. at 361.
9. See United States v. Central State Bank, 621 F.Supp. 1276 (W.D.
Mich. 1985), aff'dper curiam, 817 F.2d 22 (6th Cir. 1987).
10. See Gregory E. Elliehausen and John D. Walken, Banking
Markets and the Use of Financial Services by Small and MediumSized Businesses, 76 Federal Reserve Bulletin 726 (1990). For a
discussion of this study, see First Hawaiian, Inc., 77 Federal Reserve
Bulletin 52(1991).
11. Protestant maintains that the relevant geographic market for
analyzing the competitive effects of this proposal should be limited to
the areas included in the delineated service areas of the subsidiary
banks of Flathead and its affiliate, MBS. The Board believes that a
bank's delineated community under the Community Reinvestment
Act does not necessarily represent the appropriate geographic market
for analyzing the competitive effects of a proposal. The geographic
market for analyzing competitive effects takes into account the presence of other banks, access by the bank's customers to competitors of
and reasonable substitutes for the bank, and economic or demographic
factors that contribute to competition. See St. Joseph Valley Bank, 68
Federal Reserve Bulletin 673 (1982). The key question to be considered in making this selection "is not where the parties to the merger
do business or even where they compete, but where, within the area of
competitive overlap, the effect of the merger on competition will be
direct and immediate." U.S. v. Philadelphia National, 374 U.S. at 357;
US. v. Phillipsburg, 399 U.S. at 364-65.
12. Population data are based on 1990 data from the United States
Department of Commerce, Bureau of the Census ("Census Bureau").
Legal Developments
tion of Kalispell and the rest of Flathead County with
Lincoln County and the northern part of Lake County, both
of which are adjacent to Flathead County, and supported
the conclusion that Lincoln County and the northern part of
Lake County are part of the Kalispell Banking Market. 13
Kalispell has continued to develop as a regional trade
center and the number of health care and commercial
facilities in Kalispell that are available to residents in the
region has increased. 14 A recent survey by the Reserve
Bank indicates that merchants in Kalispell regularly advertise in newspapers with substantial circulation in Lincoln
County and northern Lake County. Commuting data also
support the inclusion of northern Lake County in the
Kalispell Banking Market. 15
Banking data also indicate that the relevant banking
market should include Lincoln County. For example, approximately 18 percent of the loan accounts in Flathead's
affiliate bank, Mountain Bank, and approximately 9.4 percent of Mountain Bank's deposit accounts were held by
Lincoln County residents. 16 In addition, recent interviews
conducted by Reserve Bank staff with members of the
Chambers of Commerce in the towns of Libby and Eureka
in Lincoln County indicated that depository institutions in
those towns ensure that interest rates for deposits and loans
are competitive with the rates for depository institutions in
Flathead County. These interviews also indicated that small
business owners in Lincoln County considered Flathead
County banks as feasible alternatives to banks in Libby and
Eureka.
Based on all the facts of record, and for the reasons
stated, the Board concludes that the relevant banking market within which to evaluate the competitive effects of this
proposal is the Kalispell Banking Market, which includes
Flathead County, Lincoln County, and the northern part of
Lake County.
13. These considerations included Kalispell's designation as a "second level trading center" by the Bureau of Business and Economic
Research at the University of Montana in Missoula ("Bureau of
Business"), the availability of hospitals and the region's only airport
in Kalispell, the number of stores in Kalispell and Lincoln County
residents shopping in Kalispell, and the limited number of banking
facilities in Lincoln County. See Glacier Bancorp, Inc., 78 Federal
Reserve Bulletin 713 (1992). These factors also were applicable to the
northern part of Lake County and supported its inclusion in the
Kalispell Banking Market.
14. The Bureau of Business has indicated that Kalispell has become
a more influential regional trade center since 1992. In addition,
Kalispell's population has grown approximately 16 percent between
1990 and 1994, including a 6 percent increase from 1992 to 1994.
15. 1990 data from the Census Bureau indicate that 18.6 percent of
the Lake County workforce commutes to jobs in Flathead County.
16. Flathead also has indicated that residents of Lake County hold a
significant number of loan and deposit accounts at its subsidiary bank,
Flathead Bank of Bigfork, Bigfork, Montana, which is located approximately 2.5 miles from the border of Lake County.
743
C. Competitive Eifects in the Kalispell Banking
Market
Flathead and MBS collectively are the fourth largest depository institution in the Kalispell Banking Market, controlling deposits of approximately $85 million, representing
approximately 11.4 percent of the total deposits in depository institutions in the market ("market deposits"). 17 BankWest is the eighth largest depository institution in the
market, controlling deposits of approximately $32.5 million, representing approximately 4.4 percent of market
deposits. On consummation of this proposal, Flathead and
MBS would become the second largest depository institution in the Kalispell Banking Market, controlling deposits
of approximately $117 million, representing approximately
15.8 percent of market deposits. The market, as measured
by the Herfindahl-Hirschman Index ("HHI"), would remain moderately concentrated, and the HHI would increase by 100 points to 1474 as a result of this transaction. 18 This increase would not exceed the threshold
standards in the Department of Justice Merger Guidelines
("Merger Guidelines"). In addition, ten depository institution competitors would remain in the Kalispell Banking
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 Kalispell Banking Market or any other
relevant banking market. 19 In light of all the facts of
record, the Board concludes that consummation of the
proposal would not result in any significantly adverse
effects on competition or the concentration of banking
resources in the Kalispell Banking Market, or any other
relevant banking market. 20
17. Market share data are as of March 31, 1996. These data are
based on calculations in which the deposits of thrift institutions are
included at 50 percent. The Board has previously indicated that thrift
institutions have become, or have the potential to become, significant
competitors of commercial banks. See Midwest Financial Group, 75
Federal Reserve Bulletin 386 (1989); National City Corporation, 70
Federal Reserve Bulletin 743 (1984).
18. Under the revised Merger Guidelines, 49 Federal Register
26,823 (June 29, 1984), a market in which the post-merger HHI is
between 1000 and 1800 is considered to be moderately concentrated
and a market above 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 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 effect of limitedpurpose lenders and other non-depository financial entities.
19. The Office of the Comptroller of the Currency ( " O C C " ) and the
Federal Deposit Insurance Corporation ( " F D I C " ) also have not objected to the proposal.
20. The Board also notes that, if Flathead County alone were
considered to be the relevant banking market, the HHI increase (175
points to 1860) based on the cluster of banking services would not
exceed the threshold limits in the Merger Guidelines. In addition, the
threshold limits in the Merger Guidelines would not be exceeded by
744
Other
Federal Reserve Bulletin • August 1996
Factors
The Board has carefully reviewed the financial and managerial resources and future prospects of Flathead, MBS and
BankWest, and their subsidiary banks, in light of all the
facts of record, including comments from BankWest and
relevant supervisory reports of examination. 21 The Board
notes that Flathead and its affiliated banks and BankWest
are in satisfactory financial condition and would remain so
after consummation of the proposal. In addition, reports of
examination assessing the managerial resources of Flathead and MBS indicate this factor is consistent with approval.
Based on all the facts of record, including comments
received and supervisory information, and for the reasons
discussed above, the Board concludes that considerations
related to the financial and managerial resources and future
prospects of Flathead, MBS, and BankWest, and their
subsidiary banks, are consistent with approval, as are other
supervisory factors the Board must consider. 22 Considerations relating to the convenience and needs of the commuthis proposal in the Kalispell Banking Market if small business loans
were considered as a separate product market. Thus, assuming that the
relevant banking market is Flathead County alone and the relevant
banking product is small business loans—assumptions that the Board
rejects for the reasons discussed above—the Board does not believe
this transaction would have a significantly adverse effect on competition in light of all the facts of record. For example, five commercial
banking organization competitors would remain in Flathead County to
serve a relatively small population. Four of those competitors each
would hold more than 10 percent of the small business loans outstanding in Flathead County. In addition, the presence of Kalispell in this
area makes Flathead County an attractive market for entry, and
Montana banks are permitted to branch statewide without limitation.
21. BankWest contends that this proposal would weaken Flathead's
financial condition and render Flathead unable to serve as a source of
financial strength to BankWest. BankWest also maintains that an
Order of Prohibition by the FDIC against a principal shareholder of
Flathead and Mountain Bank presents adverse considerations. The
shareholder's voting shares in both organizations have been transferred to independent trustees with the approval of the FDIC and the
Federal Reserve System in order to prevent the shareholder from
participating directly or indirectly in the management or control of
these organizations. Recent inspection and examination reports indicate that the shareholder has not exercised or attempted to exercise a
controlling influence over the management and policies of Flathead or
Mountain Bank.
22. BankWest contends that this proposal would violate the Depository Institution Management Interlocks Act (12 U.S.C. § 3201)
("Interlocks Act") because Flathead would be able to elect at least
one director to the bank's board of directors and an affiliate bank is
located in the same community as BankWest. Under the Interlocks
Act and the Board's Regulation L (12 C.F.R. 212 et seq.), the
prohibition against interlocking management officials for banks located in the same community does not apply to institutions that are
affiliates. As noted above, Flathead would be considered to control
BankWest after consummation of the proposal, thereby making Flathead and BankWest affiliates. Accordingly, a management official
interlock between Flathead and BankWest would not be prohibited
under the Interlocks Act. Another commenter has objected to Flathead's direct solicitation of BankWest shareholders to purchase shares
instead of directing such offers to the bank's board of directors. There
is no legal or regulatory prohibition under applicable law against
direct offers to purchase shares of a bank or bank holding company, as
long as there are no material misstatements or omissions.
nities to be served also are consistent with approval of this
application.
Conclusion
Based on all the facts of record, the Board has determined
that this application should be, and hereby is, approved. 23
The Board's approval is specifically conditioned on compliance by Flathead with all the commitments made in
connection with this application. For the purpose of this
action, the commitments and conditions relied on by the
Board in reaching its 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 proposed acquisition of BankWest's voting shares
shall not be consummated before the fifteenth calendar day
following 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 by
the Reserve Bank, acting pursuant to delegated authority.
By order of the Board of Governors, effective June 24,
1996.
Voting for this action: Chairman Greenspan and Governors Kelley,
Lindsey, Phillips, and Yellen. Abstaining from this action: Governor
Meyer.
W I L L I A M W. W I L E S
Secretary of the Board
23. BankWest also has requested a formal hearing in connection
with this proposal to permit the bank the opportunity to present
evidence, to challenge the representations made by Flathead, and to
obtain information from Flathead on the disputed issues in this case,
including information on the principal shareholder's shares held by
the voting trust and the effects of the proposal in the relevant product
and geographic markets. 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. In this
case, the Board has not received such a recommendation from the
OCC, BankWest's primary federal supervisor.
Under its rules, the Board may, in its discretion, hold a public
hearing or meeting on an application to clarify factual issues related to
the application and to provide an opportunity for testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The Board has carefully
considered BankWest's request in light of all the facts of record. In the
Board's view, BankWest has had ample opportunity to submit its
views, and has in fact submitted materials that have been considered
by the Board in acting on this application. BankWest's request fails to
demonstrate why its substantial written submissions do not adequately
present its allegations or why a public hearing or meeting is otherwise
warranted in this case. After a careful review of all the facts of record,
moreover, the Board has concluded that BankWest disputes the weight
that should be accorded to, and the conclusions that may be drawn
from, the facts of record or disputes facts that are not material to the
Board's decision. For these reasons, and based on all the facts of
record, the Board has determined that a public hearing or meeting is
not necessary to clarify the factual record in the application, and is not
warranted in this case. Accordingly, BankWest's request for a public
hearing or meeting is denied.
Legal Developments
R & G Financial Corporation
Hato Rey, Puerto R i c o
Order Approving the Formation of a Bank Holding
Company
R&G Financial Corporation, Hato Rey ("Applicant"), has
applied for 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 acquiring
88.1 percent of the voting shares of R-G Premier Bank of
Puerto Rico, Hato Rey ("Bank"), both in Puerto Rico.
Applicant also has requested the Board's consent under
section 4(c)(13) of the BHC Act and section 211.5(c) of the
Board's Regulation K (12 C.F.R. 211.5(c)) to acquire all
the voting shares of R&G Mortgage Corporation, Hato
Rey, Puerto Rico ("Company"), and thereby engage in
home mortgage lending and servicing activities in Puerto
Rico.
Notice of the proposal, aifording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 15,070 (1996)). The time for filing
comments has expired, and the Board has considered the
application and all comments received in light of the
factors set forth in section 3(c) of the BHC Act.
Bank is the 12th largest commercial banking organization in Puerto Rico, controlling total deposits of
$479.6 million, representing 2.2 percent of total deposits in
commercial banks in the commonwealth. 1 The proposal
represents a reorganization of his ownership interest by the
principal shareholder of Bank and would not result in the
acquisition of any additional banking assets. Based on all
the facts of record, the Board concludes that the proposal
would not result in any significantly adverse effects on
competition or concentration of banking resources in any
relevant banking market.
The BHC Act also requires the Board to consider the
financial and managerial resources and future prospects of
Applicant, Bank, and Company, the convenience and needs
of the community to be served, and certain other supervisory factors. 2 The Board has carefully considered all these
factors in light of all the facts of record, including reports
of examination and other supervisory information from the
bank's primary federal supervisor. Based on these and
other facts of record, the Board concludes that all the
factors the Board is required to consider under section 3 of
the BHC Act are consistent with approval of the proposal.
Applicant also has applied under section 4(c)(13) of the
BHC Act and section 211.5(c) of Regulation K for the
Board's prior consent to acquire all the voting shares of
Company. Company engages in home mortgage lending
and servicing activities in Puerto Rico and, under section
4(c)(13) and Regulation K, is deemed to operate outside
the United States. The Board has considered all the factors
specified in section 4(c)(13) and Regulation K and, based
1. Deposit data are as of June 30, 1995.
2. See 12 U.S.C. § 1842(c)(2) and (3).
745
on all the facts of record, finds these factors to be consistent with approval. 3
Based on the foregoing and all the facts of record, the
Board has determined that the application and request for
consent should be, and hereby are, approved. The Board's
approval is specifically conditioned on compliance with all
the commitments made in connection with the application
and request for consent. The commitments and conditions
relied on by the Board in reaching this decision are deemed
to be conditions imposed in writing by the Board in connection with its findings and decision and, as such, may be
enforced in proceedings under applicable law.
The acquisition of Bank 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 New
York, acting pursuant to delegated authority. The acquisition of Company shall not be consummated later than one
year after the effective date of this order, unless such period
is extended for good cause by the Board.
By order of the Board of Governors, effective June 17,
1996.
Voting for this action: Governors Kelley, Lindsey, Phillips, and
Yellen. Absent and not voting: Chairman Pro Tempore Greenspan.
JENNIFER J. J O H N S O N
Deputy Secretary of the Board
U n i o n Planters Corporation
M e m p h i s , Tennessee
Order Approving the Acquisition
of a Bank
Union Planters Corporation, Memphis, Tennessee ("Applicant"), a bank holding company within the meaning of the
Bank Holding Company Act ("BHC Act"), has requested
the Board's approval under section 3 of the BHC Act
(12 U.S.C. § 1842) to acquire all the voting shares of
Eastern National Bank, Miami, Florida ("Bank"). 1
Notice of this proposal, affording interested persons an
opportunity to submit comments, has been published
(60 Federal Register 56,151 (1995)). 2 The time for filing
3. See 12 C.F.R. 211.5(c). Although these activities also are permissible under the Board's Regulation Y (12 C.F.R. 225.25(b)(1)), Applicant is not required to obtain approval under Regulation Y because the
Board is approving this acquisition under Regulation K. See
12 C.F.R. 225.22(g).
1. Applicant proposes to merge its de novo subsidiary bank, Eastern
Interim National Bank, Miami, Florida, with and into Bank. The
Office of the Comptroller of the Currency ( " O C C " ) has approved this
merger pursuant to section 18(c) of the Federal Deposit Insurance Act
(12 U.S.C. § 1828(c)). Bank's name would be changed to Union
Planters Bank of Florida, N.A., Miami, Florida.
2. Comments from the Mid-South Peace and Justice Center, Memphis, Tennessee ("Protestant"), maintain that two typographical errors
in the newspaper notice published in Memphis require republication.
The name of Bank and the street address of Applicant were misspelled
746
Federal Reserve Bulletin • August 1996
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.
Applicant, with total consolidated assets of $11.3 billion,
operates subsidiary banks in Arkansas, Kentucky, Louisiana, Missouri, Mississippi, and Tennessee, and thrifts in
Alabama and Tennessee. 3 Applicant is the fourth largest
commercial banking organization in Tennessee, controlling
deposits of $4.8 billion, representing approximately
9.2 percent of the total deposits in commercial banking
organizations in Tennessee. Bank, with total consolidated
assets of $266.9 million, is the 35th largest commercial
banking organization in Florida, controlling deposits of
$233.8 million, representing less than 1 percent of total
deposits in commercial banking organizations in Florida.
Competitive
Interstate
Other Factors under the BHC Act
Analysis
Section 3(d) of the BHC Act, as amended by Section 101
of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, allows the Board to approve a proposal
by a bank holding company to acquire control of a bank
located in a state other than the home state of such bank
holding company, if certain conditions are met. For purposes of the BHC Act, the home state of Applicant is
Tennessee, and Applicant would acquire a bank in Florida. 4 The conditions for an interstate acquisition under
section 3(d) are met in this case. 5 In view of all the facts of
record, the Board is permitted to approve this proposal
under section 3(d) of the BHC Act.
in this notice. As required by the Board's Rules of Procedure and
Regulation Y, notice of the proposal was published correctly in the
Federal Register and in a newspaper of general circulation in Miami,
Florida, where Bank is located. See 12 C.F.R. 262.3(b) and 225.14(b).
In light of the minor nature of the errors, the fact that the names of
Applicant and Bank were correctly spelled in the newspaper notices
published in the respective cities where these institutions are located
and in the Federal Register, and the fact that the misspellings did not
mask the identity or location of Applicant or Bank, the Board concludes that notice was sufficient to provide interested parties the
opportunity to comment on the proposal, as evidenced by Protestant's
submissions, and that republication of the notice in Memphis is not
warranted in light of all the facts of record.
3. Asset and deposit data are as of December 31, 1995.
4. 12 U.S.C. § 1842(d). Pub. L. No. 103-328, 108 Stat. 2338 (1994).
A bank holding company's home state is that state in which the
operations of the bank holding company's banking subsidiaries were
principally conducted on July 1, 1966, or the date on which the
company became a bank holding company, whichever is later.
5. 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and (B).
Applicant's subsidiary banks are adequately capitalized and adequately managed. Bank has been in existence and continuously operated for the minimum periods of time required under Florida law. In
addition, on consummation of this proposal, Applicant 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 of the total amount of deposits of insured depository
institutions in Florida.
Considerations
The BHC Act prohibits the Board from approving an
application under section 3 of the BHC Act if the proposal
would result in a monopoly, or if the proposal would
substantially lessen competition in any relevant banking
market, unless such anticompetitive effects are clearly outweighed in the public interest by the probable effect of the
transaction in meeting the convenience and needs of the
community to be served. Applicant and Bank do not compete directly in any relevant banking market. Based on all
the facts of record, the Board concludes that consummation
of this proposal would not result in any significantly adverse effects on competition or on the concentration of
banking resources in any relevant banking market.
The BHC Act also requires the Board to consider the
financial and managerial resources and future prospects of
the companies and banks involved, the convenience and
needs of the community to be served, and certain other
supervisory factors.
A. Supervisory Factors
The Board has carefully considered the financial and managerial resources and future prospects of Applicant, its
subsidiaries, and Bank, as well as other supervisory factors
in light of all the facts of record. 6 These facts include
supervisory reports of examination assessing the financial
and managerial resources of the organizations and confidential financial information provided by Applicant. 7
6. The Venezuelan Superintendent of Banks and Other Financial
Institutions ("Superintendent") has requested the Board to delay the
sale or transfer of shares of Bank to Applicant until alleged claims
regarding ownership of Bank's stock arising from prior stock transfers
can be resolved. The Superintendent has taken no legal action in or
outside the United States to adjudicate its alleged claims regarding the
ownership of Bank's stock, and no such claims have been substantiated to date. In reviewing applications under section 3 of the BHC
Act, the Board is limited to considering the specific factors set forth in
the BHC Act, and the Board has carefully considered the effects of
this proposal under the factors specified in the BHC Act. See Western
Bancshares, Inc. v. Board of Governors, 480 F.2d 749 (10th Cir.
1973). For example, the Board has reviewed the potential impact of
such claims on the financial resources of Applicant. The limited
jurisdiction granted to the Board to review applications under the
BHC Act does not authorize the Board to adjudicate such claims.
Moreover, processing of this application has been delayed beyond the
time periods provided under the procedures in Regulation Y, and
Applicant has informed the Board that the contract to purchase Bank
terminates on June 30th unless Applicant receives Board action and
all appropriate waiting periods have expired. Based on all the facts of
record, and for the reasons discussed above, the Board concludes that
the record is sufficient to act on the proposal and that a delay is not
warranted under the facts presented.
7. Protestant also contends that an action filed under the Racketeer
Influenced and Corrupt Organizations Act (18 U.S.C. § 1961) in
connection with the sale of securitized automobile receivables by
three nonbank subsidiaries of Applicant on behalf of a third party
raises adverse managerial considerations. In 1991, a federal jury in
Legal Developments
Based on all the facts of record, the Board concludes that
all the supervisory factors under the BHC Act, including
financial and managerial resources, weigh in favor of approving this proposal.
B. Convenience and Needs Factor
The Board has long held that consideration of the convenience and needs factor includes a review of the records of
the relevant depository institutions under the Community
Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA").
As provided in the CRA, the Board has evaluated this
factor in light of examinations by the primary federal
supervisor of the CRA performance records of the relevant
institutions.
The Board also has carefully considered comments from
Protestant criticizing Applicant's record of performance
under the CRA in meeting the credit needs of minority
individuals and low- and moderate-income communities in
Memphis, Tennessee, and contending that Applicant's
management is insensitive to such credit needs. In addition, Protestant alleges that data filed under the Home
Mortgage Disclosure Act ("HMDA") (12 U.S.C. § 2801)
indicate that Applicant's lead bank, Union Planters
National Bank, Memphis, Tennessee ("UPNB"), illegally
discriminates in its lending activities and compares unfavorably to other banks operating in the Memphis community.8 Protestant also generally references comments it submitted in connection with prior applications, which include
criticisms regarding Applicant's record of providing services at its branches and Applicant's branch closing policies.
An institution's most recent CRA performance evaluation is a particularly important consideration in the applications process because it represents a detailed on-site evaluation of the institution's overall record of performance
under the CRA by its primary federal supervisor. 9 In addition, the Board considers an institution's policies and practices for compliance with applicable fair lending laws. The
Board also takes into account information on an institution's lending activities that assist in meeting the credit
needs of low- and moderate-income neighborhoods, in-
this action found that Applicant's subsidiaries were civilly liable,
under RICO, for losses that a savings association sustained after
purchasing these instruments from the subsidiaries in 1988 and 1989.
Applicant's subsidiaries settled the case and have ceased engaging in
this activity. Moreover, corrective actions and operational controls to
ensure compliance with relevant laws have been implemented by
Applicant and found to be sufficient after review in subsequent examinations by the Federal Reserve Bank of St. Louis.
8. Protestant also contends that Applicant should present a plan to
community groups for redevelopment of low- and moderate-income
neighborhoods in Memphis.
9. The Board notes that the Statement of the Federal Financial
Supervisory Agencies Regarding the Community Reinvestment Act
provides that a CRA examination is an important and often controlling
factor in the consideration of an institution's CRA record and that
reports of these examinations will be given great weight in the
applications process. 54 Federal Register 13,742, 13,745 (1989).
1A1
eluding programs and activities initiated since its most
recent CRA performance examination.
Performance Examinations. All of Applicant's subsidiary banks and thrifts that have been examined for CRA
performance received "outstanding" or "satisfactory" ratings from their primary federal supervisors in their most
recent examinations. In particular, UPNB received a "satisfactory" CRA performance rating from its primary federal
supervisor, the OCC, at its most recent examination as of
October 1994 ("1994 Examination"). The 1994 Examination found no evidence of prohibited discrimination or
other illegal credit practices. Moreover, examiners found
no evidence of practices intended to discourage applications for the types of credit listed in the bank's CRA
statements. 10 Bank received a "satisfactory" rating for
CRA performance from the OCC as of September 1994.
Previous Review of CRA Record. The Board has reviewed Applicant's CRA performance record in light of
substantially similar comments submitted by Protestant in
connection with two recent applications filed by Applicant. " In these cases, the Board carefully considered UPNB's CRA performance record, including HMDA data,
lending activities, marketing and outreach activities, 12 services provided at branches, and branch closing policies.
For the reasons discussed in detail in the Capital Order and
the First State Order, which are hereby incorporated by
reference, the Board concluded that the convenience and
needs factor, including the CRA performance record of
Applicant, was consistent with approval of acquisitions
under the BHC Act.
Conclusion on Convenience and Needs Factor. In this
case, the Board has carefully considered the entire record
in its review of the convenience and needs factor under the
BHC Act. Based on all the facts of record, including
information provided by Protestant and Applicant, CRA
performance examinations and other information from Applicant's primary federal supervisors, and the previous
reviews of Applicant's CRA record described in the Capital Order and the First State Order, the Board concludes
10. Protestant notes that several individuals have described instances in which Applicant's subsidiary banks may have illegally
denied credit to minority borrowers. The Board has referred these
comments to the appropriate federal supervisor of the institutions,
which has sufficient regulatory authority to address these situations if
the individuals can substantiate their allegations to the agency.
11. See Union Planters Corporation, 82 Federal Reserve Bulletin
78 (1996) ("Capital Order"); and Union Planters Corporation, 81
Federal Reserve Bulletin 800 (1995) ("First State Order").
12. Protestant contends that the absence of African-American loan
officers in Applicant's newspaper advertisements indicates a focus on
affluent, nonminority customers and an insensitivity to the credit
needs of the African-American community. Applicant responds that it
advertises credit products in newspapers and radio stations owned by
minorities that focus on communities with predominantly minority
residents throughout the Memphis community, and uses minority
actors in numerous newspaper and television advertisements. In addition, the 1994 Examination found that UPNB's marketing program is
effective and designed to inform all segments of its delineated community of the availability of credit products and services, and that UPNB
advertises its credit products and services throughout its delineated
community.
748
Federal Reserve Bulletin • August 1996
that the efforts of Applicant and Bank to help meet the
credit needs of all segments of the communities served,
including low- and moderate-income neighborhoods and
minority residents, are consistent with approval. 13 In this
light, the Board concludes that convenience and needs
considerations, including the CRA performance records of
the companies and banks involved in this proposal, are
consistent with approval.
Conclusion
Based on the foregoing and all other facts of record, the
Board has determined that the application should be, and
hereby is, approved. 14 The Board's approval is specifically
conditioned on compliance by Applicant with all commitments made in connection with this application as well as
the conditions discussed in this order and in the abovereferenced orders. For purposes of this action, these commitments and conditions will both be considered conditions imposed in writing and, as such, may be enforced in
proceedings under applicable law.
The acquisition shall not be consummated before the
fifteenth 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 St. Louis, acting pursuant to delegated authority.
By order of the Board of Governors, effective June 5,
1996.
Voting for this action: Chairman Pro Tempore Greenspan and
Governors Kelley, Lindsey, Phillips, and Yellen.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
13. Protestant's comments also reiterate allegations regarding the
ineffective enforcement of the CRA by federal supervisors and certain
management misconduct at a Mississippi state bank acquired by
Applicant in 1994. These matters were considered in the Capital
Order and the First State Order. The Board also has referred Protestant's comments regarding the state bank to the Federal Deposit
Insurance Corporation, the primary federal supervisor of the bank, for
investigation and appropriate supervisory action if these allegations
can be substantiated.
14. Protestant alleges that the election of only one African-American
director to UPNB's board of directors indicates illegal employment
discrimination. Applicant responds that this director, who successfully
manages one of the largest churches in Memphis and is influential
throughout the community, was elected to provide additional insight
and diversity to UPNB's board of directors. Applicant and UPNB are
required under the regulations of the Department of Labor to file
annual reports with the Equal Employment Opportunity Commission
( " E E O C " ) , and the EEOC has jurisdiction to investigate and determine whether companies are in compliance with federal equal employment laws. The Board has noted that unsubstantiated allegations of
improper actions under a statute administered by another federal
agency is beyond the scope of the Board's review under the factors
specified in the BHC Act. On the other hand, substantiated improper
actions may be considered by the Board in light of all the facts of
record of an application under the BHC Act's factors or in the context
of the Board's general supervisory authority over its regulated banking organizations. See Norwest Corporation, 82 Federal Reserve
Bulletin 580 (1996).
Orders Issued Under Section 4 of the Bank Holding
Company Act
The Bank of New York Company, Inc.
New York, New York
Order Approving a Notice to Engage in Certain
Nonbanking Activities
The Bank of New York Company, Inc., New York, New
York ( " B N Y " ) , a bank holding company within the meaning of the Bank Holding Company ( " B H C " ) Act, has
requested the Board's approval under section 4(c)(8) of the
BHC Act (12 U.S.C. § 1843(c)(8)) and section 225.23 of
the Board's Regulation Y (12 C.F.R. 225.23) to engage
de novo in the following nonbanking activities through its
indirect wholly owned subsidiary, BNY Capital Markets,
Inc., New York, New York ("Company"):
(1) Making, acquiring and servicing loans and other
extensions of credit, pursuant to section 225.25(b)(1) of
Regulation Y (12 C.F.R. 225.25(b)(1));
(2) Providing investment and financial advisory services, pursuant to section 225.25(b)(4) of Regulation Y
(12 C.F.R. 225.25(b)(4));
(3) Providing discount and full-service securities brokerage services, pursuant to section 225.25(b)(15) of Regulation Y (12 C.F.R. 225.25(b)(15));
(4) Underwriting and dealing in obligations of the United
States, general obligations of states and their political
subdivisions, and other obligations in which state member banks may underwrite and deal under 12 U.S.C.
§§ 335 and 24(7) ("bank-eligible securities"), pursuant
to section 225.25(b)(16) of Regulation Y (12 C.F.R.
225.25(b)(16));
(5) Underwriting and dealing in, to a limited extent,
certain municipal revenue bonds (including certain unrated and "private ownership" municipal revenue
bonds), 1^1 family mortgage-related securities, consumer receivable-related securities, and commercial paper (collectively, "bank-ineligible securities"); and
(6) Acting as agent in the private placement of all types
of securities, and buying and selling all types of securities on the order of customers as a "riskless principal."
Company currently is a subsidiary of BNY's principal
bank subsidiary, The Bank of New York, New York, New
York ("Bank of New York"). 1 Company would engage in
the proposed activities worldwide following a reorganization in which Company would become a subsidiary of
BNY's wholly owned nonbank subsidiary, BNY Capital
Markets Holdings, Inc., New York, New York.
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 19,627 (1996)). The time for filing
comments has expired, and the Board has considered the
1. Company currently engages in limited private placement and
financial advisory activities.
Legal Developments
notice and all comments received in light of the factors set
forth in section 4(c)(8) of the BHC Act.
BNY, with total consolidated assets of approximately
$54 billion, is the 14th largest banking organization in the
United States. 2 BNY operates commercial bank subsidiaries in New York, New Jersey, and Connecticut, and engages, through other subsidiaries, in various permissible
nonbanking activities. Company is registered as a brokerdealer with the Securities and Exchange Commission
( " S E C " ) under the Securities Exchange Act of 1934
(15 U.S.C. § 78a et seq.) and is a member of the National
Association of Securities Dealers, Inc. ("NASD"). Accordingly, Company is subject to the recordkeeping and reporting obligations, fiduciary standards, and other requirements
of the Securities Exchange Act of 1934, the SEC, and the
NASD.
Activities Approved by Regulation
As noted above, Company proposes to engage in lending,
investment and financial advisory, securities brokerage,
and bank-eligible securities underwriting and dealing activities that have all been determined by regulation to be
closely related to banking for purposes of section 4(c)(8) of
the BHC Act. 3 BNY has committed that Company will
conduct these activities in accordance with the limitations
set forth in Regulation Y and the Board's orders relating to
these activities. 4
Underwriting and Dealing in Bank-Ineligible
Securities
The Board has determined 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—the proposed
activities of underwriting and dealing in bank-ineligible
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. 5 BNY has committed that Company will
conduct these underwriting and dealing activities using the
2. Asset and ranking data are as of December 31, 1995.
3. See 12 C.F.R. 225.25(b)(1), (b)(4), (b)(15) and (b)(16).
4. To address the potential conflicts of interests arising from Company's conduct of both full-service brokerage activities and bankineligible securities underwriting and dealing activities, BNY has
committed that Company will inform its brokerage customers at the
commencement of the relationship that, as a general matter, Company
may be a principal or may be engaged in underwriting with respect to,
or may purchase from an affiliate, those securities for which brokerage
and advisory services are provided. In addition, at the time any
brokerage order is taken, Company will inform brokerage customers
(usually orally) whether Company is acting as agent or principal with
respect to a security. Confirmations sent to customers also will state
whether Company is acting as agent or principal. See PNC Financial
Corporation, 75 Federal Reserve Bulletin 396 (1989); Bankers Trust
New York Co., 74 Federal Resen>e Bulletin 695 (1988).
5. See Citicorp, 73 Federal Reserve Bulletin 473 (1987) ("Citicorp"), aff'd sub nom. Securities Industry Ass'n v. Board of Governors of the Federal Reserve System, 839 F.2d 47 (2d Cir.), cert,
denied, 486 U.S. 1059 (1988), as modified by Order Approving
749
same methods and procedures and subject to the same
prudential limitations established by the Board in the Section 20 Orders. 6
The Board has also previously concluded that underwriting and dealing in "private ownership" industrial development bonds that qualify as "exempt facility bonds" under
section 142 of the Internal Revenue Code ("Code") 7 is a
permissible activity under section 4(c)(8) of the BHC Act. 8
BNY will conduct this activity according to the prudential
limitations set forth in the Section 20 Orders. 9
BNY proposes to have two director interlocks between
Company and its affiliated banks. The interlocking directors would not be officers of the affiliated banks and would
represent less than a majority of the board of directors of
Company and the affiliated banks. The directors also would
not have authority to conduct the day-to-day business of
the affiliated banks or to handle individual transactions.
The Board previously has permitted the type of limited
Modifications to Section 20 Orders, 75 Federal Reserve Bulletin 751
(1989) (collectively, "Section 20 Orders").
6. BNY has requested that the Board permit The Bank of New York
Capital Markets Ltd. United Kingdom ( " B N Y U K " ) , a foreign subsidiary of the Bank of New York established under section 25(a) of the
Federal Reserve Act (12 U.S.C. § 615(c)), to market the structured
finance and loan syndication services of Company to overseas issuers
and investors. The Board previously has permitted Regulation K
subsidiaries of domestic banks, subject to certain conditions, to market the services and securities of their section 20 affiliates. See
BankAmerica Corporation, 80 Federal Reserve Bulletin 1104 (1994);
Letter from Jennifer J. Johnson, Deputy Secretary of the Board, to
Marjorie E. Gross, Chemical Banking Corp. (Mar. 29, 1995). BNY
has committed that BNY UK will engage in these activities subject to
the conditions and restrictions previously relied on by the Board in
approving such cross-marketing activities.
7. See 26 U.S.C. § 142.
8. See Bank South Corporation, 81 Federal Reserve Bulletin 1116
(1995) ("Bank South"). In addition to the private ownership bonds
discussed in Bank South, BNY proposes that Company be permitted
to underwrite and deal in, to a limited extent, private ownership bonds
that are issued for the following traditional government services:
airports, docks and wharves, mass commuting facilities, and highspeed intercity rail facilities, all of which qualify as "exempt facility
bonds" under the Code. Under the Code, exempt facility bonds are
issued to finance the acquisition or construction of facilities that
provide certain types of traditional government services.
9. In connection with its proposal to underwrite and deal in unrated
municipal revenue bonds, including unrated public ownership and
"private ownership" industrial development bonds, BNY has committed that Company will not underwrite any unrated municipal revenue
bond until Company conducts an independent credit review to determine that the securities are of investment grade quality and that no
single issue of unrated municipal revenue bonds, including unrated
public ownership and "private ownership" industrial development
bonds, underwritten by Company would exceed $7.5 million. BNY
also has provided other commitments previously relied upon by the
Board in authorizing a section 20 company to underwrite and deal in,
to a limited extent, unrated municipal revenue bonds. See Letter
Interpreting Section 20 Orders, 81 Federal Reserve Bulletin 198
(1995). In addition, BNY has committed that Company will not
underwrite or deal in unrated municipal revenue bonds until BNY
submits and Board staif reviews the credit evaluation packages that
Company will use to determine that unrated municipal revenue bonds
are of investment grade quality.
750
Federal Reserve Bulletin • August 1996
director interlocks proposed by BNY. 10 The Board expects
BNY to ensure that the framework established pursuant to
the Section 20 Orders will be maintained in all other
respects.
The Board has determined that the conduct of the securities underwriting and dealing activities proposed by BNY
is consistent with section 20 of the Glass-Steagall Act
(12 U.S.C. § 377), provided that the company engaged in
the underwriting and dealing activities derives no more
than 10 percent of its total gross revenue from underwriting and dealing in bank-ineligible securities over any twoyear period. 11 BNY has committed that Company will
conduct its bank-ineligible securities underwriting and
dealing activities subject to the 10-percent revenue test
established by the Board in previous orders. 12
Private Placement
Act. 13 The Board also has determined that acting as agent
in the private placement of securities does not constitute
underwriting and dealing in securities for purposes of
section 20 of the Glass-Steagall Act, and that revenue
derived from these activities is consequently not subject to
the 10-percent revenue limitation on bank-ineligible securities underwriting and dealing. 14
BNY has committed that Company will conduct its
private placement activities using the same methods and
procedures, and subject to the same prudential limitations
established by the Board in Bankers Trust and J.P. Morgan,
including the comprehensive framework of restrictions imposed by the Board in connection with underwriting and
dealing in bank-ineligible securities, which were designed
to avoid potential conflicts of interests, unsound banking
practices, and other adverse effects. 15
Activities
Riskless Principal
Private placement involves the placement of new issues of
securities with a limited number of sophisticated purchasers in a nonpublic offering. A financial intermediary in a
private placement transaction acts solely as an agent of the
issuer in soliciting purchasers and does not purchase the
securities and attempt to resell them. Securities that are
privately placed are not subject to the registration requirements of the Securities Act of 1933 and are offered only to
financially sophisticated institutions and individuals and
not to the public. Company would not privately place
registered securities and would place securities only with
customers that qualify as accredited investors.
The Board has determined by order that, subject to
prudential limitations that address the potential for conflicts of interests, unsound banking practices, or other
adverse effects, the proposed private placement activities
are so closely related to banking as to be a proper incident
thereto within the meaning of section 4(c)(8) of the BHC
10. See Bank South Corporation, 79 Federal Reserve Bulletin 346
(1993).
11. See Section 20 Orders. Compliance with the 10-percent revenue
limitation shall be calculated in accordance with the method stated in
J.R Morgan & Co. Inc., 75 Federal Reserve Bulletin 192 (1989), as
modified by the Order Approving Modifications to the Section 20
Orders, 75 Federal Reserve Bulletin 751 (1989), the Order Approving
Modifications to the Section 20 Orders, 79 Federal Resen>e Bulletin
226 (1993), and the Supplement to Order Approving Modifications to
Section 20 Orders, 79 Federal Reserve Bulletin 360 (1993). The
Board notes that BNY has not adopted the Board's alternative
indexed-revenue test to measure compliance with the 10-percent limitation on bank-ineligible securities activities, and, absent such election, BNY would continue to employ the Board's original 10-percent
revenue test.
12. Company also may engage in activities that are necessary
incidents to the proposed underwriting and dealing activities, provided
that they are treated as part of the bank-ineligible securities activities.
Unless Company receives specific approval under section 4(c)(8) of
the BHC Act to conduct the activities independently, any revenues
from the incidental activities must be counted as ineligible revenues
subject to the 10-percent revenue limitation.
Activities
"Riskless principal" is the term used in the securities
business to refer to a transaction in which a broker-dealer,
after receiving an order to buy (or sell) a security for a
customer, purchases (or sells) the security for its own
account to offset a contemporaneous sale to (or purchase
from) the customer. 16 A broker-dealer acting as a riskless
principal is not obligated to buy (or sell) a security for its
customer until after the broker-dealer executes the offsetting purchase (or sale) for its own account. The Board
previously has concluded that, subject to certain conditions, riskless principal activities do not constitute the
underwriting, public sale, or distribution of securities for
purposes of the Glass-Steagall Act. 17 BNY has committed
that Company would comply with these conditions, as
listed in Appendix A. As a SEC registered broker-dealer,
Company also will conduct its riskless principal activities
in accordance with federal securities laws and regulations.
In Bankers Trust, the Board also determined that riskless
principal activities are closely related to banking within the
meaning of section 4(c)(8) of the BHC Act.
In order to approve this notice, the Board must consider
whether the activities proposed are a proper incident to
banking, that is whether the activities proposed "can reasonably be expected to produce benefits to the public, such
as greater convenience, increased competition, or gains in
efficiency, that outweigh possible adverse effects, such as
undue concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking prac-
13. See J.P. Morgan & Co. Inc., 76 Federal Reserve Bulletin 26
(1990) ("J.P. Morgan")-, Bankers Trust New York Corporation, 75
Federal Reserve Bulletin 829 (1989) ("Bankers Trust").
14. See Bankers Trust.
15. Among the prudential limitations discussed more fully in Bankers Trust and J.P. Morgan, BNY has committed that Company will not
privately place registered investment company securities or securities
of investment companies that are sponsored or advised by BNY or any
of its affiliates. In addition, Company will make no general solicitation
or general advertising for securities it places.
16. See SEC Rule 10b-10(a)(8)(i) (17 C.F.R. 240.10b-10(a)(8)(i)).
17. J.P. Morgan; Bankers Trust.
Legal Developments
tices." 18 In reaching the conclusion that riskless principal
activities were a proper incident to banking in Bankers
Trust, the Board relied on commitments that the applicant
in that case would conduct its riskless principal activities
subject to many of the prudential limitations established by
the Board with respect to bank-ineligible securities underwriting and dealing ("Underwriting Conditions"). 19
BNY proposes in this case that Company be permitted to
act as a riskless principal without subjecting this activity to
the Underwriting Conditions. The Board sought public
comment on BNY's proposal seeking relief from the Underwriting Conditions in connection with the conduct of its
riskless principal activities. See 61 Federal Register 19,627
(1996). The Board received no comments on this aspect of
the proposal.
In Bankers Trust, the Board concluded that riskless
principal transactions conducted in accordance with the
conditions proposed by BNY do not constitute securities
underwriting or dealing and are essentially equivalent to
brokerage transactions. 20 Because securities brokerage
transactions do not raise the potential for conflicts of
interest, unsound banking practices or other adverse effects
that may be presented by bank-ineligible securities underwriting and dealing activities, the Board has not required
bank holding companies to conduct securities brokerage
activities in compliance with the Underwriting Conditions. 21 For the reasons set forth below and based on the
Board's experience in supervising riskless principal activities, the Board concludes that riskless principal transactions conducted in accordance with the conditions discussed in this order also do not present the types of
concerns that the Underwriting Conditions are designed to
address.
The Underwriting Conditions seek to prevent the conflicts of interest and other potential adverse effects that may
arise because an underwriting subsidiary bears principal
and reputational risks with respect to the bank-ineligible
securities in which it underwrites and deals and to prevent
the transfer of the risks associated with the underwriting
subsidiary's bank-ineligible securities activities to its affiliated banks and thrifts. Because an underwriting subsidiary
is engaged in bank-ineligible securities activities, the Underwriting Conditions also seek to separate, both operationally and in the public's mind, the underwriting subsidiary
from its bank and thrift affiliates. In addition, the Underwriting Conditions seek to prevent unfair competition in
bank-ineligible securities activities by prohibiting the lending affiliates of an underwriting subsidiary from disclosing
18. 12 U.S.C. § 1843(c)(8).
19. Bankers Trust at 834.
20. See Bankers Trust at 834. The SEC also has stated that riskless
principal transactions are functionally equivalent to agency transactions. See Exchange Act Rel. No. 33,743, reprinted in [1993-1994
Transfer Binder] Fed. Sec. L. Rep. (CCH) H 85,326 (March 9, 1994);
Exchange Act Rel. No. 21,708, reprinted in [1984-1985 Transfer
Binder] Fed. Sec. L. Rep. (CCH) ^ 83,734 (Feb. 4, 1985).
21. See 12 C.F.R. 225.25(b)(15); see also BankAmerica Corporation, 69 Federal Reserve Bulletin 105 (1983).
751
confidential customer information to the underwriting subsidiary (and vice-versa) without the customer's consent. 22
As noted above, riskless principal activities have been
carefully defined to distinguish these activities from securities underwriting and dealing activities. These definitional
limitations ensure that Company's riskless principal transactions will be customer-driven and that Company will not
bear principal or reputational risk with respect to the securities that it purchases (or sells) as a riskless principal. 23
Accordingly, BNY and its affiliates would not face the type
of conflicts of interests sought to be addressed by the
Underwriting Conditions. In addition, because banks themselves may engage in riskless principal activities, 24 it does
not appear necessary to retain limitations that separate
operationally the riskless principal activities of a subsidiary
from its bank or thrift affiliates.
BNY proposes to conduct Company's riskless principal
activities in accordance with the limitations established by
the Board for the full-service securities brokerage activities
of bank holding companies. These limitations require that
Company make certain disclosures to its customers 25 and
prohibit Company and its affiliates from sharing any confidential information concerning their respective customers
without the consent of the customer. 26
Based on its experience in monitoring and examining
riskless principal activities conducted by bank holding
companies since 1989, the Board has determined that riskless principal activities, when conducted in accordance
with the federal securities laws and the definitional limitations and customer disclosure requirements in Appendix A,
are not securities underwriting or dealing activities and are
not likely to give rise to the potential adverse effects that
the Underwriting Conditions are designed to address. For
these reasons, and based on all the facts of record, including the commitments made by BNY, the Board has determined to grant BNY's request to conduct riskless principal
activities without applying the Underwriting Conditions
listed in Appendix B to the conduct of that activity. 27 This
does not affect the applicability of the Underwriting Conditions to the private placement, or the underwriting, dealing,
and other bank-ineligible securities activities conducted by
Company.
22. See Citicorp at 500.
23. Although Company's customer (or counterparty) may fail to pay
for securities purchased or fail to deliver securities sold in a riskless
principal transaction, the Board previously has determined that this
risk, which is similar to the risk incurred in brokerage transactions,
does not transform a riskless principal transaction into a transaction
for Company's own account. See Bankers Trust at 833.
24. See OCC Interp. Ltr. No. 626, reprinted in [1993-1994 Transfer
Binder] Fed. Banking L. Rep. (CCH) f 83,508 (July 7, 1993).
25. See 12 C.F.R. 225.25(b)(15)(ii). These limitations are included
in Appendix A.
26. Id.
27. The Board has today determined to grant relief from these
conditions to other bank holding companies conducting riskless principal activities. See Order Revising the Limitations Applicable to
Riskless Principal Activities, 82 Federal Reserve Bulletin 759 (1996).
752
Federal Reserve Bulletin • August 1996
Other Considerations
Banking Standard
Regarding the Proper Incident to
As part of the Board's evaluation of the proper incident to
banking factors, the Board considers the financial and
managerial resources of the notificant and its subsidiaries
and the effect the transaction would have on such resources. 28 Based on all the facts of record, the Board concludes
that financial and managerial considerations are consistent
with approval of the notice.
As noted above, BNY has committed that Company will
conduct its bank-ineligible securities underwriting and
dealing activities in accordance with the prudential framework established by the Board's Section 20 Orders. Under
the framework and conditions established in this order and
the Section 20 Orders, the Board concludes that Company's proposed limited conduct of bank-ineligible securities
underwriting and dealing activities is not likely to result in
significantly adverse effects, such as undue concentration
of resources, decreased or unfair competition, conflicts of
interest, or unsound banking practices. Similarly, the Board
finds no evidence that Company's private placement and
other activities—conducted under the framework and conditions established in this order—would likely result in any
significantly adverse effects. The Board expects, moreover,
that the de novo entry of Company into the market for the
proposed services would provide added convenience to
BNY's customers, would lead to improved methods of
meeting customer financing needs, and would increase the
level of competition among existing providers of these
services. The Board also expects that Company's performance of the private placement and financial advisory
activities, in which BNY currently engages to a limited
extent, will lead to greater efficiencies within the BNY
corporate system and thereby permit BNY to provide better services to its customers. Accordingly, the Board has
determined that the performance of the proposed activities
by BNY can reasonably be expected to produce public
benefits that outweigh possible adverse effects under the
proper incident to banking standard of section 4(c)(8) of
the BHC Act.
Based on all the facts of record, and subject to the
commitments made by BNY, as well as the terms and
conditions set forth in this order and in the Board orders
noted above, the Board has determined that the notice
should be, and hereby is, approved. Approval of the proposal is specifically conditioned on compliance by BNY
and Company with the commitments made in connection
with the notice and the conditions referenced in this order
and the above-cited Board regulations and orders. The
Board's determination also is subject to all the terms and
conditions set forth in Regulation Y, including those in
sections 225.7 and 225.23(g) (12 C.F.R. 225.7 and
225.23(g)), and to the Board's authority to require modifi-
28. See 12 C.F.R. 225.24; see also The Fuji Bank, Ltd., 75 Federal
Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal
Reserve Bulletin 155 (1987).
cation or termination of the activities of a bank holding
company or any of its subsidiaries as the Board finds
necessary to assure compliance with, and to prevent evasion of, the provisions of the BHC Act and the Board's
regulations and orders issued thereunder. In approving the
proposal, the Board has relied on all the facts of record and
all the representations and commitments made by BNY.
These commitments and conditions shall be deemed to be
conditions imposed in writing by the Board in connection
with its findings and decisions, and may be enforced in
proceedings under applicable law.
This transaction shall not be consummated later than
three months after the effective date of this order, unless
such period is extended for good cause by the Board or the
Federal Reserve Bank of New York, acting pursuant to
delegated authority.
By order of the Board of Governors, effective June 10,
1996.
Voting for this action: Chairman Pro Tempore Greenspan and
Governors Lindsey, Phillips and Yellen. Absent and not voting: Governor Kelley.
JENNIFER J . J O H N S O N
Deputy Secretary of the Board
Appendix A
BNY has committed that Company would comply with the
following conditions with respect to its riskless principal
activities:
(1) Company will engage in riskless principal transactions
only in the secondary market.
(2) Company will not act as riskless principal in selling
bank-ineligible securities at the order of a customer that is
the issuer of the securities or in any transaction where
Company has a contractual agreement to place the securities as agent of the issuer.
(3) Company will not engage in any riskless principal
transaction for any bank-ineligible security carried in its
inventory.
(4) Company will not engage in riskless principal transactions on behalf of any U.S. affiliate that engages in bankineligible securities underwriting and dealing, or any foreign affiliate that engages in securities dealing activities
outside the United States.
(5) Company will not act as a riskless principal in any
transaction involving a bank-ineligible security for which
Company or an affiliate makes a market.
(6) Neither Company nor its affiliates will hold themselves
out as making a market in the bank-ineligible securities
that Company buys and sells as riskless principal, nor enter
quotes for specific bank-ineligible securities in any dealer
quotation system in connection with Company's riskless
principal transactions; except that Company and its affiliates may enter bid or ask quotations, or publish "offering
wanted" or "bid wanted" notices on trading systems other
than NASDAQ or an exchange, if Company or the affiliate
Legal Developments
does not enter price quotations on different sides of the
market for a particular security for two business days.
(That is, Company or its affiliate must wait at least two
business days after entering a "bid" quotation on a security before entering an "ask" quotation with respect to the
same security, and vice-versa.)
(7) Company will not act as riskless principal for registered
investment company securities or for any securities of
investment companies that are advised by BNY or any of
its affiliates.
(8) Company will maintain specific records, including
records time-stamped in accordance with SEC requirements, that clearly identify all riskless principal transactions.
(9) Because BNY proposes to provide riskless principal
services in combination with investment advisory services,
Company will prominently disclose in writing to its customers that:
(a) Company is solely responsible for its contractual
obligations and commitments;
(b) Company is not a bank and is separate from any
affiliated bank; and
(c) The securities sold, offered, or recommended by
Company are not insured by the FDIC and are not
obligations of, or endorsed or guaranteed in any way by,
any bank (unless this is the case).
These disclosures must be made before Company provides
any riskless principal or advisory services to a customer,
and the disclosure in clause (a) also must be made by
Company in its customer account statements. The disclosures may be provided orally so long as written disclosures
are provided to the customer immediately thereafter. In
addition, Company and its affiliates will not share any
confidential information concerning their respective customers without the consent of the customer. See 12 C.F.R.
225.25(b)(15)(ii).
Appendix B
BNY hereby is relieved from the following Underwriting
Conditions with respect to Company's riskless principal
activities:
(1) Neither BNY nor any subsidiary shall directly or indirectly extend credit, issue or enter into a stand-by letter of
credit, asset purchase agreement, indemnity, guarantee,
insurance or other facility that might be viewed as enhancing the creditworthiness or marketability of ineligible securities purchased (or sold) as a riskless principal by Company.
(2) Neither BNY nor any subsidiary (other than Company)
shall knowingly extend credit to a customer directly or
indirectly secured by, or for the purpose of purchasing, any
ineligible security that Company purchases (or sells) as a
riskless principal.
(3) Neither BNY nor any of its subsidiaries may, directly or
indirectly, extend credit to issuers of ineligible securities
753
purchased (or sold) as riskless principal by Company for
the purpose of the payment of principal, interest or dividends on such securities, except that BNY and its subsidiaries may extend credit to an issuer of securities purchased
(or sold) as riskless principal by Company for purposes of
paying the principal on the securities, provided that at least
three years has elapsed since the date of Company's purchase (or sale) and the credit extension meets prudent and
objective credit standards.
(4) BNY shall adopt appropriate procedures, including
maintenance of necessary documentary records, to assure
that any extension of credit by it or any of its subsidiaries
to issuers of ineligible securities purchased (or sold) as
riskless principal by Company are on an arm's length basis
for purposes other than payment of principal, interest or
dividends on the issuer's ineligible securities being purchased (or sold) as riskless principal by Company.
(5) The requirements relating to credit extensions to issuers
noted in paragraphs
above also shall apply to extensions of credit to parties that are the major users of projects
that are financed by industrial revenue bonds.
(6) BNY's affiliated banks and thrifts may not express an
opinion on the value or the advisability of the purchase or
sale of ineligible securities that are purchased (or sold) as
riskless principal by Company unless the bank or thrift
affiliate notifies the customer that Company is purchasing
(or selling) the security.
(7) Neither BNY nor its bank, thrift or trust or investment
advisory subsidiaries shall purchase, as a trustee or in any
other fiduciary capacity, for accounts over which they have
investment discretion, ineligible securities that are purchased (or sold) as riskless principal by Company unless
such purchase is specifically authorized under the instrument creating the fiduciary relationship, by court order, or
by the law of the jurisdiction under which the trust is
administered.
(8) Neither BNY nor any of its subsidiaries shall purchase
as principal ineligible securities that are sold as a riskless
principal by Company. 1
(9) Company may only purchase (or sell) as riskless principal ineligible securities issued by (or representing interests
in, or secured by, obligations of) affiliates if the securities
are:
(a) Rated by an unaffiliated, nationally recognized statistical rating organization;
1. As noted above, BNY has committed that Company will conduct
its riskless principal activities in accordance with the limitations set
forth in Appendix A. These limitations prohibit Company from engaging in riskless principal transactions on behalf of any foreign affiliate
that engages in securities dealing activities outside the United States,
or any U.S. affiliate that engages in bank-ineligible securities underwriting and dealing. In addition, these limitations prohibit Company
from purchasing or selling as riskless principal any bank-ineligible
security that Company holds in its inventory. Because BNY proposes
to engage in riskless principal through its section 20 affiliate, the
structural limitations contained in the Underwriting Conditions continue to apply to that subsidiary.
754
Federal Reserve Bulletin • August 1996
(b) Issued or guaranteed by FNMA, FHLMC, or GNMA
(or represent interests in securities issued or guaranteed
by FNMA, FHLMC, or GNMA); or
(c) Purchased from or sold to sophisticated institutions.
Caisse Nationale de Credit Agricole, S.A.
Paris, France
Order Approving a Notice to Engage in Various
Nonbanking Activities Through a Joint Venture
Caisse Nationale de Credit Agricole, S.A., Paris, France
( " C N C A " ) , a foreign banking organization subject to the
Bank Holding Company Act ( " B H C Act"), has requested
the Board's approval under section 4(c)(8) of the BHC Act
(12 U.S.C. § 1843(c)(8)) and section 225.23 of the Board's
Regulation Y (12 C.F.R. 225.23) to engage through
CALFP (US), Inc., New York, New York ( " C o m p a n y " ) , a
joint venture, in the following nonbanking activities:
(1) Providing securities brokerage services pursuant to
section 225.25(b)(15) of Regulation Y;
(2) Providing investment advisory services pursuant to
section 225.25(b)(4) of Regulation Y;
(3) Providing foreign exchange advisory and transactional services pursuant to section 225.25(b)(17) of Regulation Y;
(4) Acting as agent in the private placement of securities, and providing related advisory services;
(5) Acting as riskless principal in the purchase and sale
of all types of securities on behalf of customers;
(6) Acting as broker and agent and providing advisory
services with respect to interest rate and currency swaps
and swap derivative products, and swaps, swap derivative products and over-the-counter options linked to
certain commodities, stock, bond or commodity indices,
a hybrid of interest rates and such commodities or indices, a specially tailored basket of securities selected by
the parties, or particular equity securities; and
(7) Providing advisory services, including discretionary
portfolio management services, with respect to futures
and options on futures on financial and nonfinancial
commodities.
Company would only provide these services to institutional
customers, as defined in section 225.2(g) of Regulation Y
(12 C.F.R. 225.2(g)), and has proposed to conduct these
activities worldwide.
Company is an indirect subsidiary of Credit Agricole
Lazard Financial Products Bank, London, England
( " C A L F P Bank"), and Credit Agricole Lazard Financial
Products Limited, London, England ( " C A L F P Holding"). 1
CNCA owns 75 percent of the capital of CALFP Holding,
1. CALFP Holding is the parent company of CALFP Bank, a U.K.
company licensed as a bank in the United Kingdom. CALFP Bank
intends to hold its investment in Company through a U.K. holding
company whose sole function would be to hold the shares of Company.
and Three Houses Investment Company, Limited, London,
England ("Three Houses"), owns the remaining 25 percent. 2 Three Houses is controlled by Lazard Freres & Co.,
L.L.C., New York, New York; Lazard Freres et Cie, Paris,
France; and Lazard Brothers & Co., Limited, London,
England (collectively, "Lazard Freres"). Lazard Freres
provides a wide array of advisory and brokerage services,
and underwrites and deals in all types of debt and equity
securities.
Notice of this proposal, affording interested persons an
opportunity to submit comments, has been published
(60 Federal Register 62,092 and 63,527 (1995)). The time
for filing comments has expired, and the Board has considered the proposal and all comments received in light of the
factors set forth in section 4(c)(8) of the BHC Act.
CNCA, with total consolidated assets equivalent to approximately $334.2 billion, is the 15th largest banking
organization in the world, and the largest banking organization in France. 3 In the United States, CNCA operates
branches in Chicago, Illinois, and New York, New York;
and maintains representative offices in San Francisco, California, and Houston, Texas. CNCA also engages directly
and through subsidiaries in permissible nonbanking activities in the United States and abroad.
Company is, and will continue to be, a broker-dealer
registered with the Securities and Exchange Commission
( " S E C " ) under the Securities Exchange Act of 1934
(15 U.S.C. § 78a et seq.), and is a member of the National
Association of Securities Dealers, Inc. ( " N A S D " ) . Accordingly, Company is subject to the record-keeping and reporting obligations, fiduciary standards, and other requirements
of the Securities Exchange Act of 1934, the SEC, and the
NASD. 4
Private Placement
and Riskless Principal
Activities
The Board previously has determined that the proposed
private placement 5 and riskless principal 6 activities are so
2. CNCA and Three Houses have equal voting rights in CALFP
Holding. Three Houses has an option to acquire additional voting
shares of CALFP Holding that could raise its interest in CALFP
Holding to 50 percent.
3. Asset data are as of December 31, 1995.
4. CNCA does not expect Company to conduct its business in such
a way as to require it to register as a commodity trading advisor
("CTA") under the Commodity Exchange Act (7 U.S.C. § 1 et seq.),
or as an investment adviser under the Investment Advisers Act of
1940(15 U.S.C. § 80b-1 et seq.).
5. Private placement involves the placement of new securities with a
limited number of sophisticated purchasers in a nonpublic offering. A
financial intermediary in a private placement transaction acts solely as
an agent for the issuer in soliciting purchasers, and does not purchase
the securities and attempt to resell them. Securities that are privately
placed are not subject to the registration requirements of the Securities
Act of 1933, and are offered only to financially sophisticated institutions and individuals and not to the public. Company would not
privately place registered securities, and would only place securities
with customers who qualify as accredited investors.
6. "Riskless principal" is the term used in the securities business to
refer to a transaction in which a broker-dealer, after receiving an order
to buy (or sell) a security from a customer, purchases (or sells) the
Legal Developments
closely related to banking within the meaning of section
4(c)(8) of the BHC Act, provided that the activities are
conducted within the prudential framework of limitations
established in previous decisions to address the potential
for conflicts of interests, unsound banking practices, and
other adverse effects. 7 The Board also previously has determined that acting as agent in the private placement of
securities, and purchasing and selling securities on the
order of customers as riskless principal, do not constitute
underwriting or dealing in securities for purposes of section 20 of the Glass-Steagall Act, when conducted in the
manner established by prior orders, and, accordingly, that
revenues derived from these activities are not subject to the
10-percent revenue limitation on bank-ineligible securities
underwriting and dealing activities. 8 CNCA has committed
that Company will conduct its private placement and riskless principal activities using the same methods and procedures, and subject to the same prudential limitations, as
were established by the Board in J.P. Morgan and Bankers
Trust.9 These methods, procedures, and prudential limitations include the comprehensive restrictions designed to
avoid potential conflicts of interests, unsound banking
practices, and other adverse effects imposed by the Board
in cases involving underwriting and dealing in bankineligible securities.
security for its own account to offset a contemporaneous sale to (or
purchase from) the customer. See Securities and Exchange Commission Rule 10b-10. 17 C.F.R. 249.10b-10(a)(8)(i). Riskless principal
transactions are understood in the industry to include only transactions
in the secondary market.
7. 12 U.S.C. § 1843(c)(8). See J.P. Morgan & Company Incorporated, 76 Federal Reserve Bulletin 26 (1990) ("J.P. Morgan")-, and
Bankers Trust New York Corporation, 75 Federal Reserve Bulletin
829 (1989) ("Bankers Trust").
8. See Bankers Trust at 831-833. The term "bank-ineligible securities" refers to all types of debt and equity securities that a bank may
not underwrite or deal in directly under the Glass-Steagall Act
(12 U.S.C. §§ 24(7) and 335).
9. Among the prudential limitations detailed more fully in J.P.
Morgan and Bankers Trust are that Company will maintain specific
records that will clearly identify all riskless principal transactions, and
that Company will not engage in any riskless principal transactions for
any securities carried in its inventory. When acting as a riskless
principal, Company will engage only in transactions in the secondary
market, and not at the order of a customer that is the issuer of the
securities to be sold; will not act as riskless principal in any transaction involving a security for which it makes a market; and will not
hold itself out as making a market in the securities that it buys and
sells as a riskless principal. Moreover, Company will not engage in
riskless principal transactions on behalf of any foreign affiliates that
engage in securities dealing activities outside the United States, and
will not act as riskless principal for registered open-end investment
company securities. In addition, Company will not act as a riskless
principal with respect to any securities of investment companies that
are advised by CNCA or any of its affiliates. With respect to private
placement activities, CNCA has committed that Company will not
privately place registered investment company securities or securities
of investment companies that are sponsored or advised by CNCA or
any of its affiliates.
Other
755
Activities
The Board previously has determined that a bank holding
company may act as broker or agent and provide advisory
services with respect to various swap transactions, including commodity and index swaps based on a specially
tailored basket of securities selected by the parties. 10 The
Board also previously has determined by regulation or
order that a bank holding company may provide securities
brokerage services, investment advisory services, foreign
exchange advisory and transactional services, and advisory
services with respect to futures and options on futures on
financial and nonfinancial commodities. 11 CNCA has committed that Company will conduct its activities in accordance with the limitations set forth in Regulation Y, the
Board's orders, and related interpretations.
Proper Incident to Banking
Standard
In order to approve this proposal, the Board also must
determine that the proposed activities are a proper incident
to banking, that is, that the proposal "can reasonably be
expected to produce benefits to the public, such as greater
convenience, increased competition, or gains in efficiency,
that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition,
conflicts of interests, or unsound banking practices." 12
As part of its review of these factors, the Board considers the financial and managerial resources of the notificant
and its subsidiaries and the effect the transaction would
have on such resources. 13 The Board notes that CNCA's
capital ratios satisfy applicable risk-based capital standards
established under the Basle Accord, and are considered
equivalent to the capital levels that would be required of a
U.S. banking organization. Based on all the facts of record,
the Board concludes that financial and managerial considerations are consistent with approval of this proposal.
The Board previously has expressed concern that joint
ventures not lead to a matrix of relationships between
10. See Swiss Bank Corporation, 81 Federal Reserve Bulletin 185,
190 (1995). CNCA proposes that Company also act as broker or agent
with respect to swaps and swap derivative products linked to particular equity securities. Company would not own or take possession of
any of the underlying securities, nor would it act as act as principal or
counter-party in any such transaction. The Board believes that this
activity is operationally and functionally similar to the swaps activities previously approved by the Board and, therefore, the activity is
permissible for bank holding companies.
11. 12 C.F.R. 225.25(b)(4), (15), and (17); Credit Suisse, 81 Federal Reserve Bulletin 803 (1996) (providing futures-related discretionary portfolio management services); J.P. Morgan & Company Incorporated, 80 Federal Reserve Bulletin 151 (1994) (providing futuresrelated advisory services with respect to contracts on nonfinancial
commodities); and Security Pacific Corporation, 1A Federal Reserve
Bulletin 820 (1988) (providing futures-related advisory services without registering as a CTA).
12. 12 U.S.C. § 1843(c)(8).
13. See 12 C.F.R. 225.24; see also The Fuji Bank, Limited, 75
Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73
Federal Reserve Bulletin 155 (1987).
756
Federal Reserve Bulletin • August 1996
co-venturers that could break down the legally mandated
separation of banking and commerce. 14 The Board has
stated that this concern is particularly acute where the joint
venture involves a relationship between a bank holding
company and a securities firm, and the potential exists for
the mingling of permissible and impermissible securities
activities. 15 In this case, CNCA would engage in the proposed activities in a manner consistent with previously
approved joint venture proposals and has made a number
of commitments similar to those the Board has relied on in
prior joint venture cases intended to separate the activities
of a bank holding company and the joint venture from the
impermissible activities of a securities co-venturer. 16 These
include a commitment that CNCA and Lazard Freres conduct their business on an arm's-length, non-preferential
basis with no solicitation of business for, nor referral of
customers to, each other, and that CNCA not invest in, or
nominate directors of, Lazard Freres in the United States.
For the reasons discussed above, and in reliance on all
the commitments made in connection with this proposal
and the conditions discussed in this order, the Board believes that the proposal is not likely to result in decreased
or unfair competition, conflicts of interests, unsound banking practices, undue concentration of resources, or other
adverse effects. The Board expects, moreover, that the
entry of Company into the market for the proposed services would provide added convenience to CNCA's customers, and would increase the level of competition among
existing providers of these services. Accordingly, the Board
has determined that the performance of the proposed activities by Company can reasonably be expected to produce
public benefits that outweigh possible adverse eifects under
the proper incident to banking standard of section 4(c)(8)
of the BHC Act.
Conclusion
Based on the foregoing and all the facts of record, including the commitments discussed above and all commitments
made in connection with this proposal, the Board has
determined to, and hereby does, approve this proposal
subject to all the terms and conditions set forth in this
order, and in the above-referenced regulations and orders
that relate to the proposed activities. The Board's determination also is subject to all the terms and conditions set
forth in the Board's Regulation Y, including those in sections 225.7 and 225.23(g) (12 C.F.R. 225.7 and 225.23(g)),
and to the Board's authority to require such modification or
termination of the activities of a bank holding company or
any of its subsidiaries as the Board finds necessary to
assure compliance with, and to prevent evasion of, the
14. See, e.g., The Maybaco Company and Equitable
Bancorporation, 69 Federal Reserve Bulletin 375 (1983).
15. See Amsterdam-Rotterdam
Bank, N.V., 70 Federal
Reserve
Bulletin 835 (1984); The Chuo Trust and Banking Company, Limited,
78 Federal Reserve Bulletin 446 (1992) ("Chuo Trust").
16. See Banque Nationale de Paris, 80 Federal Reserve Bulletin
638 (1994); Chuo Trust.
provisions of the BHC Act and the Board's regulations and
orders issued thereunder. The Board's decision is specifically conditioned on compliance with all the commitments
made in connection with this proposal, including the commitments discussed in this order and in the above-noted
Board regulations and orders. These commitments and
conditions shall both be deemed to be conditions imposed
in writing by the Board in connection with its findings and
decision, and, as such, may be enforced in proceedings
under applicable law.
This transaction shall not be consummated later than
three months after the effective date of this order, unless
such period is extended for good cause by the Board or by
the Federal Reserve Bank of Chicago, acting pursuant to
delegated authority.
By order of the Board of Governors, effective June 10,
1996.
Voting for this action: Chairman Pro Tempore Greenspan and
Governors Lindsey, Phillips, and Yellen. Absent and not voting:
Governor Kelley.
JENNIFER J . J O H N S O N
Deputy Secretary of the Board
Union Planters Corporation
Memphis, Tennessee
Order Approving the Acquisition
Association
of a Savings
Union Planters Corporation, Memphis, Tennessee ("Applicant"), a bank holding company within the meaning of the
Bank Holding Company Act ("BHC Act"), has requested
the Board's approval under section 4(c)(8) of the BHC Act
(12 U.S.C. § 1843(c)(8)) and section 225.23 of the Board's
Regulation Y (12 C.F.R. 225.23) to acquire all the voting
shares of Franklin Financial Group, Inc., and thereby acquire Franklin Federal Savings Bank ("FFSB"), both of
Morristown, Tennessee, and engage in the operation of a
savings association pursuant to section 225.25(b)(9) of
Regulation Y (12 C.F.R. 225.25(b)(9)). 1
Notice of this proposal, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 18,145 (1996)). The time for filing
comments has expired, and the Board has considered the
proposal and all comments received in light of the factors
set forth in section 4(c)(8) of the BHC Act.
Applicant, with total consolidated assets of $11.3 billion,
operates subsidiary banks in Alabama, Arkansas, Ken-
1. Applicant also would acquire the subsidiaries of FFSB:
(1) Colonial Loan Association, Morristown, Tennessee, and thereby
make, acquire, and service loans pursuant to section 225.25(b)(1) of
Regulation Y (12 C.F.R. 225.25(b)(1)); and
(2) Franklin Insurance Group, Inc., Morristown, Tennessee, and
thereby act as agent in the sale of insurance directly related to
extensions of credit pursuant to section 225.25(b)(8)(i) and (ii) of
Regulation Y (12 C.F.R. 225.25(b)(8)(i) and (ii)).
Legal Developments
tucky, Louisiana, Mississippi, Florida, and Tennessee. 2 Applicant is the third largest commercial banking organization in Tennessee, controlling $4.9 billion in deposits,
representing approximately 8.9 percent of total deposits in
depository institutions in the state. 3 FFSB, with total consolidated assets of $125 million is the 74th largest depository institution in Tennessee, controlling $108 million in
deposits, representing less than 1 percent of total deposits
in depository institutions in the state. On consummation of
the transaction, Applicant would remain the third largest
commercial banking organization in Tennessee, controlling
deposits of $5.0 billion, representing approximately
9.1 percent of total deposits in depository institutions in the
state.
Proposed
Activities
The Board has determined that the operation of a savings
association by a bank holding company is closely related to
banking for purposes of section 4(c)(8) of the BHC Act. 4
The Board requires savings associations acquired by bank
holding companies to conform their direct and indirect
activities to those that are permissible for bank holding
companies under section 4(c)(8) of the BHC Act and
Regulation Y. Applicant has committed to conform all
activities of FFSB to those requirements. 5 The Board also
has determined by regulation that the proposed lending and
credit-related insurance activities are closely related to
banking within the meaning of section 4(c)(8) of the BHC
Act. 6 Applicant has committed to conduct these activities
subject to the limitations in Regulation Y.
Under section 4(c)(8) of the BHC Act, the Board is
required to consider whether a proposal is likely to result in
any significantly adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts
of interests, or unsound banking practices. Applicant and
FFSB compete directly in the Morristown, Tennessee,
banking market. 7 Consummation of this proposal would
not result in concentration levels in this market that would
exceed the threshold standards of market concentration as
measured by the Herfindahl-Hirschman Index ("HHI")
2. All data are as of June 30, 1995, and are adjusted to reflect
acquisitions by Applicant consummated through January 26, 1996.
3. In this context, depository institutions include commercial banks,
savings banks, and savings associations.
4. See 12 C.F.R. 225.25(b)(9).
5. Applicant has committed that all impermissible real estate activities will be divested or terminated within two years of consummation
of the proposal, that no new impermissible projects or investments
will be undertaken during this period, and that capital adequacy
guidelines will be met, excluding specified real estate investments.
Applicant also has committed that any impermissible securities or
insurance activities conducted by FFSB will cease on or before
consummation.
6. See 12 C.F.R. 225.25(b)(1) and (b)(8)(i) and (ii).
7. The Morristown, Tennessee, banking market is approximated by
Hamblen and Grainger Counties, minus the town of Blaine in Grainger
County, and the towns of Baneberry, Jefferson City, Jefferson Estates,
Leadvale, Talbot, and White Pine in Jeiferson County, all in Tennessee.
757
under the Department of Justice merger guidelines. 8 After
considering the relatively small change in concentration as
measured by the HHI, Applicant's share of total deposits in
depository institutions 9 in the market ("market share"), the
number of competitors that would remain in this market,
and all other facts of record, the Board concludes that
consummation of this proposal would not result in any
significantly adverse effects on competition or on the concentration of banking resources in the Morristown, Tennessee, banking market, or any other relevant banking market.
Record of Performance
Reinvestment Act
under the
Community
In acting on a proposal to acquire a savings association
under section 4(c)(8) of the BHC Act, the Board reviews
the records of the relevant depository institutions under the
Community Reinvestment Act (12 U.S.C § 2901 et seq.)
("CRA"). 1 0 As provided in the CRA, the Board has evaluated this factor in light of examinations by the primary
federal supervisor of the CRA performance of the relevant
institutions.
The Board also has carefully considered comments from
The Mid-South Peace and Justice Center, Memphis, Tennessee ("Protestant"), criticizing the record of performance of Applicant under the CRA in meeting the credit
needs of minority individuals and low- and moderateincome communities in Memphis, Tennessee, and contending that Applicant's management is insensitive to such
8. On consummation of the proposal, the HHI would increase 249
points to 1418. Under the revised Department of Justice Merger
Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in
which the post-merger HHI is between 1000 and 1800 is considered
moderately concentrated. The Justice Department has informed the
Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive
effects) unless the post-merger HHI is at least 1800 and the merger
increases the HHI by more than 200 points. The Justice Department
has stated that the higher than normal HHI thresholds for screening
bank mergers for anticompetitive effects implicitly recognize the
competitive effect of limited-purpose lenders and other non-depository
financial entities.
9. Market share data before consummation are based on calculations
in which the deposits of thrift institutions are included at 50 percent.
The Board previously has indicated that thrift institutions have become, or have the potential to become, significant competitors of
commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin
743 (1984). Because the deposits of FFSB would be transferred to a
commercial bank under this proposal, those deposits are included at
100 percent in the calculation of Applicant's pro forma market share.
See Norwest Corporation, 78 Federal Reserve Bulletin 452 (1992);
First Bank, Inc., 76 Federal Reserve Bulletin 669, 670 n.9 (1990).
10. The Board previously has determined that the CRA by its terms
generally does not apply to applications by bank holding companies to
acquire nonbanking companies under section 4(c)(8) of the BHC Act.
The Mitsui Bank, Ltd., 76 Federal Reserve Bulletin 381 (1990). The
Board also has stated that, unlike other companies that may be
acquired by bank holding companies under section 4(c)(8) of the BHC
Act, savings associations are depository institutions, as that term is
defined in the CRA, and thus acquisitions of savings associations are
subject to review under the express terms of the CRA. Norwest
Corporation, 76 Federal Reserve Bulletin 873 (1990).
758
Federal Reserve Bulletin • August 1996
credit needs. 11 The Board has reviewed Applicant's CRA
performance record in light of substantially similar comments that were submitted by Protestant in connection with
recent applications filed by Applicant. 12
An institution's most recent CRA performance evaluation is a particularly important consideration in the applications process because it represents a detailed on-site evaluation of the institution's overall record of performance
under the CRA by its primary federal supervisor. 13 In
addition, the Board considers an institution's policies and
practices for compliance with applicable fair lending laws.
The Board also takes into account information on an institution's lending activities that assist in meeting the credit
needs of low- and moderate-income neighborhoods, including programs and activities initiated since its most
recent CRA performance examination.
All of Applicant's subsidiary banks and thrifts that have
been examined for CRA performance received "outstanding" or "satisfactory" ratings from their primary federal
supervisors in their most recent examinations. Applicant's
lead bank, Union Planters National Bank, Memphis, Tennessee ("UPNB"), received a "satisfactory" CRA performance rating from its primary federal supervisor, the Office
of the Comptroller of the Currency ("OCC"), at its most
recent examination as of October 1994 ("1994 Examination"). 14 The 1994 Examination found no evidence of
prohibited discrimination or other illegal credit practices. 15
Moreover, examiners found no evidence of practices intended to discourage applications for the types of credit
11. Protestant cites the failure by Applicant to close its offices in
observance of Martin Luther King Day as an example of management's insensitivity to African Americans. Applicant states that its
holiday closing policy is designed to coincide with the holidays on
which essentially all of its customers are closed for business, namely
New Year's Day, Independence Day, Thanksgiving Day, and Christmas Day, and to provide banking services to its customers on all other
nationally recognized holidays. Applicant's employees may be approved to take two additional holidays under this policy.
12. See Union Planters Corporation, 82 Federal Reserve Bulletin
745 (1996) (acquisition of Eastern National Bank) ("Eastern National
Order"); Union Planters Corporation, 82 Federal Reserve Bulletin 78
(1996); and Union Planters Corporation, 81 Federal Reserve Bulletin
800 (1995) (collectively, "the Union Planters Orders").
13. The Board notes that the Statement of the Federal Financial
Supervisory Agencies Regarding the Community Reinvestment Act
provides that a CRA examination is an important and often controlling
factor in the consideration of an institution's CRA record and that
reports of these examinations will be given great weight in the
applications process. 54 Federal Register 13,742, 13,745 (1989).
14. Protestant requests that the Board review the 1995 data filed by
UPNB under the Home Mortgage Disclosure Act (12 U.S.C. § 2801)
("HMDA"). HMDA data for 1995 are preliminary and have not been
released to the public by the banking agencies. However, these data
indicate decreases in the denial ratios for applications received from
low- and moderate-income census tracts compared to high income
census tracts, and for applications received from African Americans
compared to nonminorities, from 1994 to 1995.
15. Protestant indicates, based on the experience of an unidentified
housing developer, that delays in processing mortgage loan applications from low- and moderate-income customers at the Whitehaven
branch of UPNB may have been racially motivated. The Board has
referred these comments to the primary federal supervisor of the bank,
the OCC, for review and consideration.
listed in the bank's CRA statements. FFSB also received a
"satisfactory" rating for CRA performance from its primary federal supervisor, the Office of Thrift Supervision,
as of October 1994.
The Board has reviewed Applicant's CRA performance
record in light of all the facts of record, including information provided by Protestant and Applicant, CRA performance examinations and other information from Applicant's primary federal supervisors, and the previous
reviews of Applicant's CRA record that have included
consideration of HMDA data, lending activities, marketing
and outreach activities, services provided at branches, and
branch closing policies, as more fully described in the
Union Planters Orders and incorporated herein by reference. Based on all the facts of record, the Board concludes
that the efforts of Applicant and FFSB to help meet the
credit needs of all segments of the communities served,
including low- and moderate-income neighborhoods and
minority residents, are consistent with approval. 16
Other
Considerations
In order to approve this proposal, the Board also must
determine that the proposed activities are a proper incident
to banking, that is, that the proposal "can reasonably be
expected to produce benefits to the public, such as greater
convenience, increased competition, or gains in efficiency,
that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition,
conflicts of interests, or unsound banking practices." 17
16. Protestant reiterates allegations of certain management misconduct at a Mississippi state bank that was acquired by Applicant in
1994. Protestant requests the Board to delay action on all proposals by
Union Planters until these matters are resolved. The Board has previously considered these allegations and referred the matter to the
primary federal supervisor of the state bank involved, the Federal
Deposit Insurance Corporation, for review and consideration. Based
on all the facts of record, and in light of applicable processing time
frames prescribed by the BHC Act and the Board's Regulation Y, the
Board believes that the record is sufficient to act on this proposal and
that delay of consideration of this application is not warranted.
17. 12 U.S.C. § 1843(c)(8). Protestant contends that allegations in
pending lawsuits filed against Applicant raise adverse considerations
for the convenience and needs of the public if Applicant is permitted
to engage in the sale of credit-related insurance as agent. These
allegations involve the forced placement of collateral insurance, a
provision in the loan agreement that allows a lender to obtain insurance for its collateral at the borrower's expense if coverage lapses.
Protestant maintains, for example, that Applicant should not be permitted to extend credit and simultaneously sell credit-related insurance.
Applicant states that the pending lawsuits in Mississippi are based
principally on activities conducted by a state-chartered bank before it
was acquired by Applicant. These activities have been terminated.
Applicant also denies that any improper activities have occurred, and
there has been no adjudication of wrongdoing by Applicant in the
pending actions. The Board notes, moreover, that Applicant may not
require a borrower to purchase credit-related insurance from Applicant as a condition or requirement of obtaining an extension of credit
from any affiliate of Applicant under applicable anti-tying restrictions.
See 12 U.S.C. §§ 1972 and 1464(q); 12 C.F.R. 225.7.
Legal Developments
As part of its review of these factors, the Board has
considered the financial and managerial resources of Applicant, FFSB, and their respective subsidiaries and the effect
the transaction would have on such resources. 18 Based on
all the facts of record, the Board concludes that financial
and managerial considerations are consistent with approval
of this proposal. 19
For the reasons discussed above, and in reliance on all
the commitments made in connection with this proposal,
and the conditions discussed in this order, the Board concludes that the proposal is not likely to result in decreased
or unfair competition, conflicts of interests, unsound banking practices, undue concentration of resources, or other
adverse effects. The Board expects, moreover, that the
acquisition of FFSB by Applicant would provide added
convenience to FFSB's customers. In particular, FFSB
would be able to offer its customers additional products
and services that are currently offered by Applicant and its
subsidiaries, including discount brokerage services, investment products, credit card services, trust services, and
management advice. Accordingly, the Board has determined that this proposal can reasonably be expected to
produce public benefits that outweigh any adverse effects
under the proper incident to banking standard of section
4(c)(8) of the BHC Act.
Conclusion
Based on all the facts of record, including commitments
made to the Board by Applicant in connection with this
proposal, the Board has determined that this proposal
should be, and hereby is, approved. The Board's approval
is specifically conditioned on compliance by Applicant
with all commitments made in connection with this proposal and on Applicant receiving all necessary federal and
state approvals.
The Board's determination is subject to all the conditions in the Board's Regulation Y, including those in sections 225.7 and 225.23(g)(3) (12 C.F.R. 225.7 and
225.23(g)(3)), and to the Board's authority to require such
modification or termination of the activities of a holding
company or any of its subsidiaries as the Board finds
necessary to assure compliance with, or to prevent evasion
of, the provisions and purposes of the BHC Act and the
18. See 12 C.F.R. 225.24; see also The Fuji Bank, Limited, 75
Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73
Federal Reserve Bulletin 155 (1987).
19. Protestant contends that a suspension in processing Applicant's
application to acquire Eastern National Bank, Miami, Florida
( " B a n k " ) , raises adverse managerial considerations about the extent
of the due diligence review of the transaction by Applicant. As
discussed in the Eastern National Order, the Venezuelan Superintendent of Banks and other Financial Institutions requested the Board to
delay action on the proposal by Applicant to acquire Bank until
alleged claims against the selling parties regarding ownership of
Bank's stock could be resolved. For the reasons discussed fully in the
Eastern National Order, the Board found the statutory factors related
to the acquisition of Bank, in that case, to be satisfied and approved
the proposal.
759
Board's regulations and orders issued thereunder. The commitments and conditions relied on by the Board in reaching
this decision are deemed to be conditions imposed in
writing by the Board in connection with its findings and
decision, and, as such, may be enforced in proceedings
under applicable law.
The transaction shall not be consummated later than
three months following the effective date of this order,
unless such period is extended for good cause by the Board
or by the Federal Reserve Bank of St. Louis, acting pursuant to delegated authority.
By order of the Board of Governors, effective June 10,
1996.
Voting for this action: Chairman Pro Tempore Greenspan and
Governors Lindsey, Phillips, and Yellen. Absent and not voting:
Governor Kelley.
JENNIFER J . J O H N S O N
Deputy Secretary of the Board
Order Revising the Limitations Applicable
Principal Activities
to Riskless
In 1989, the Board first authorized a bank holding company to engage in buying and selling all types of securities
on the order of customers as a "riskless principal." 1 "Riskless principal" is the term used in the securities business to
refer to a transaction in which a broker-dealer, after receiving an order to buy (or sell) a security for a customer,
purchases (or sells) the security for its own account to
offset a contemporaneous sale to (or purchase from) the
customer. A broker-dealer acting as a riskless principal is
not obligated to buy (or sell) a security for its customer
until after the broker-dealer executes the offsetting purchase (or sale) for its own account.
The Board has carefully defined riskless principal activities and has imposed several limitations designed to distinguish riskless principal activities from securities underwriting and dealing. 2 In Bankers Trust, the Board concluded
that riskless principal activities conducted in accordance
with these limitations do not constitute the underwriting,
public sale, or distribution of securities for purposes of
section 20 of the Glass-Steagall Act (12 U.S.C. § 377).
The Board also concluded that riskless principal activities
are closely related to banking for purposes of section
4(c)(8) of the Bank Holding Company ( " B H C " ) Act
(12 U.S.C. § 1843(c)(8)). In determining that the conduct
of riskless principal activities is a proper incident to banking, the Board relied on the applicant's commitment to
conduct its riskless principal activities in accordance with
many of the prudential limitations ("Underwriting Conditions") established by the Board in connection with approvals authorizing bank holding companies to underwrite
1. See Bankers Trust New York Corporation, 75 Federal Reserve
Bulletin 829 (1989) ("Bankers Trust"); see also J.P. Morgan &
Company, Inc., 76 Federal Reserve Bulletin 26 (1990).
2. These limitations are set forth in Appendix A.
760
Federal Reserve Bulletin • August 1996
and deal in securities in which state member banks may not
underwrite or deal ("bank-ineligible securities").
In connection with a proposal considered today by a
bank holding company to engage in riskless principal activities, the Board has reviewed the continued appropriateness
of applying the Underwriting Conditions to the conduct of
riskless principal activities. In that case, the Board determined, based on its experience in monitoring and examining the conduct of riskless principal activities by bank
holding companies, that the Underwriting Conditions were
not necessary to address identifiable adverse effects. Accordingly, the Board permitted the bank holding company
to engage in riskless principal transactions through a nonbank subsidiary without conducting this activity in accordance with the Underwriting Conditions. 3 The riskless
principal activities must be conducted in accordance with
the limitations set forth in Appendix A, which are designed
to distinguish riskless principal activities from securities
underwriting and dealing activities.
In reaching its decision, the Board noted that riskless
principal transactions are essentially equivalent to securities brokerage transactions and must be conducted in compliance with the federal securities laws. 4 Bank holding
companies are not required to conduct securities brokerage
activities in accordance with the Underwriting Conditions.
The Board concluded that the definitional limitations set
forth in Appendix A would ensure that riskless principal
transactions would be customer-driven and that the bank
holding company would not bear principal or reputational
risk with respect to the securities that it would purchase (or
sell) as a riskless principal. 3 To ensure that customers are
informed, the bank holding company agreed that, if it
provides riskless principal services in combination with
advisory services, it would provide its customers the disclosures established by the Board for the full-service brokerage activities of bank holding companies. 6
In light of the Board's decision today in the application
by The Bank of New York Company, Inc., the Board has
determined to grant identical relief to other bank holding
companies previously approved to conduct riskless principal activities pursuant to section 4(c)(8) of the BHC Act.
Accordingly, for the reasons discussed in this order and in
the BNY Order, the Board hereby determines that bank
holding companies that have been authorized by the Board
to engage in riskless principal activities pursuant to section
4(c)(8) of the BHC Act may conduct these activities without applying the Underwriting Conditions set forth in Appendix B to the conduct of these activities, provided that
3. See The Bank of New York Company, Inc., 82 Federal Reserve
Bulletin 748 (1996) ("BNY Order"). Notice of the bank holding
company's proposal was published in the Federal Register in accordance with the Board's rules. See 61 Federal Register 19,627 (May 2,
1996). The Board received no comments on the proposal.
4. See Bankers Trust.
5. The Board also noted that banks may engage in riskless principal
transactions on behalf of their customers. See OCC Interp. Ltr. No.
626, reprinted in [1993-1994 Transfer Binder] Fed. Banking L. Rep.
(CCH) % 83,508 (July 7, 1993).
6. See 12 C.F.R. 225.25(b)(15)(ii).
the bank holding company continues to comply with the
limitations set forth in Appendix A. This action does not
relieve bank holding companies that conduct riskless principal activities through subsidiaries that also engage in
bank-ineligible securities underwriting and dealing activities or private placement activities from complying with
the Underwriting Conditions or any other condition established by the Board with respect to those activities, including conditions that limit a subsidiary's relationships with
its affiliates. In addition, this action does not grant relief
from any other conditions or commitments.
By order of the Board of Governors, effective June 10,
1996.
Voting for this action: Chairman Pro Tempore Greenspan and
Governors Lindsey, Phillips and Yellen. Absent and not voting: Governor Kelley.
JENNIFER J . J O H N S O N
Deputy Secretary of the Board
Appendix A
(1) The bank holding company subsidiary authorized to
engage in riskless principal activities ("Company") may
engage in riskless principal transactions only in the secondary market.
(2) Company may not act as riskless principal in selling
bank-ineligible securities at the order of a customer that is
the issuer of the securities or in any transaction where
Company has a contractual agreement to place the securities as agent of the issuer.
(3) Company may not engage in any riskless principal
transaction for any bank-ineligible security carried in its
inventory.
(4) Company may not engage in riskless principal transactions on behalf of any U.S. affiliate that engages in bankineligible securities underwriting and dealing, or any foreign affiliate that engages in securities dealing activities
outside the United States.
(5) Company may not act as a riskless principal in any
transaction involving a bank-ineligible security for which
Company or an affiliate makes a market.
(6) Neither Company nor its affiliates may hold themselves
out as making a market in the bank-ineligible securities
that Company buys and sells as riskless principal, nor enter
quotes for specific bank-ineligible securities in any dealer
quotation system in connection with Company's riskless
principal transactions; except that Company and its affiliates may enter bid or ask quotations, or publish "offering
wanted" or "bid wanted" notices on trading systems other
than NASDAQ or an exchange, if Company or the affiliate
does not enter price quotations on different sides of the
market for a particular security for two business days.
(That is, Company or its affiliate must wait at least two
business days after entering a "bid" quotation on a security before entering an "ask" quotation with respect to the
same security, and vice-versa.)
Legal Developments
761
(7) Company may not act as riskless principal for registered investment company securities or for any securities
of investment companies that are advised by the bank
holding company or any of its affiliates.
(8) Company will maintain specific records, including
records time-stamped in accordance with SEC requirements, that clearly identify all riskless principal transactions.
(9) If the bank holding company provides riskless principal
services in combination with investment advisory services,
the bank holding company will prominently disclose in
writing to its customers that:
(a) The bank holding company is solely responsible for
its contractual obligations and commitments;
(b) The bank holding company is not a bank and is
separate from any affiliated bank; and
(c) The securities sold, offered, or recommended by the
bank holding company are not insured by the FDIC and
are not obligations of, or endorsed or guaranteed in any
way by, any bank (unless this is the case).
issuers of ineligible securities purchased (or sold) as
riskless principal by the Riskless Principal Subsidiary
for the purpose of the payment of principal, interest or
dividends on such securities, except that the bank holding company and its subsidiaries may extend credit to an
issuer of securities purchased (or sold) as riskless principal by the Riskless Principal Subsidiary for purposes of
paying the principal on the securities, provided that at
least 3 years has elapsed since the date of the Riskless
Principal Subsidiary's purchase (or sale) and the credit
extension meets prudent and objective credit standards.
(4) The bank holding company shall adopt appropriate
procedures, including maintenance of necessary documentary records, to assure that any extension of credit
by it or any of its subsidiaries to issuers of ineligible
securities purchased (or sold) as riskless principal by
Riskless Principal Subsidiary are on an arm's length
basis for purposes other than payment of principal, interest or dividends on the issuer's ineligible securities
being purchased (or sold) as riskless principal by Riskless Principal Subsidiary.
These disclosures must be made before the bank holding
company provides any riskless principal or advisory services to a customer, and the disclosure in clause (a) also
must be made by the bank holding company in its customer
account statements. The disclosures may be provided orally
so long as written disclosures are provided to the customer
immediately thereafter. In addition, Company and its affiliates will not share any confidential information concerning
their respective customers without the consent of the customer. See 12 C.F.R. 225.25(b)(15)(ii).
(5) The requirements relating to credit extensions to
issuers noted in paragraphs
above also shall apply to
extensions of credit to parties that are the major users of
projects that are financed by industrial revenue bonds.
(6) The bank holding company's affiliated banks and
thrifts may not express an opinion on the value or the
advisability of the purchase or sale of ineligible securities that are purchased (or sold) as riskless principal by
Riskless Principal Subsidiary unless the bank or thrift
affiliate notifies the customer that Riskless Principal
Subsidiary is purchasing (or selling) the security.
(7) Neither the bank holding company nor its bank, thrift
or trust or investment advisory subsidiaries shall purchase, as a trustee or in any other fiduciary capacity, for
accounts over which they have investment discretion,
ineligible securities that are purchased (or sold) as riskless principal by Riskless Principal Subsidiary unless
such purchase is specifically authorized under the instrument creating the fiduciary relationship, by court order,
or by the law of the jurisdiction under which the trust is
administered.
(8) Neither the bank holding company nor any of its
subsidiaries shall purchase as principal ineligible securities that are sold as a riskless principal by Riskless
Principal Subsidiary. 2
(9) The Riskless Principal Subsidiary may only purchase
(or sell) as riskless principal ineligible securities issued
Appendix B
Bank holding companies are hereby relieved from the
following Underwriting Conditions in connection with the
conduct of riskless principal activities:
(1) Neither the bank holding company nor any subsidiary shall directly or indirectly extend credit, issue or
enter into a stand-by letter of credit, asset purchase
agreement, indemnity, guarantee, insurance or other facility that might be viewed as enhancing the creditworthiness or marketability of ineligible securities purchased (or sold) as a riskless principal by Riskless
Principal Subsidiary. 1
(2) Neither the bank holding company nor any subsidiary (other than the Riskless Principal Subsidiary) shall
knowingly extend credit to a customer directly or indirectly secured by, or for the purpose of purchasing, any
ineligible security that the Riskless Principal Subsidiary
purchases (or sells) as a riskless principal.
(3) Neither the bank holding company nor any of its
subsidiaries may, directly or indirectly, extend credit to
I. "Riskless Principal Subsidiary" refers to any nonbank subsidiary
of a bank holding company authorized to engage in riskless principal
activities under section 4(c)(8) of the BHC Act.
2. As noted above, a bank holding company may rely on the relief
provided by this order only if the bank holding company conducts its
riskless principal activities in accordance with the limitations set forth
in Appendix A. These limitations prohibit a bank holding company
subsidiary from engaging in riskless principal transactions on behalf
of any foreign affiliate that engages in securities dealing activities
outside the United States, or any U.S. affiliate that engages in bankineligible securities underwriting and dealing. In addition, these limitations prohibit a bank holding company subsidiary from purchasing
or selling as riskless principal any bank-ineligible security that the
subsidiary holds in its inventory.
762
Federal Reserve Bulletin • August 1996
by (or representing interests in, or secured by, obligations of) affiliates if the securities are:
(a) Rated by an unaffiliated, nationally recognized statistical rating organization;
(b) Issued or guaranteed by FNMA, FHLMC, or GNMA
(or represent interests in securities issued or guaranteed
by FNMA, FHLMC, or GNMA); or
(c) Purchased from or sold to sophisticated institutions.
The following limitations on the conduct of riskless
principal activities are relieved only with respect to those
bank holding company subsidiaries that engage in riskless
principal and securities brokerage activities, but that do not
engage in bank-ineligible securities underwriting and dealing or private placement activities. 3
(10) There will be no officer, director, or employee interlocks between Riskless Principal Subsidiary and any of the
bank holding company's bank or thrift subsidiaries. The
Riskless Principal Subsidiary will have separate offices
from any affiliated bank or thrift.
(11) The Riskless Principal Subsidiary will provide each of
its customers with a special disclosure statement describing
the difference between the Riskless Principal Subsidiary
and its bank and thrift affiliates and pointing out that an
affiliated bank or thrift could be a lender to an issuer and
referring the customer to the disclosure documents for
details. Riskless Principal Subsidiary also should disclose
any material lending relationship between the issuer and a
bank or lending affiliate of Company as required under the
securities laws. 4
(12) No bank or thrift affiliate of a Riskless Principal
Subsidiary will act as agent for, or engage in marketing
activities on behalf of, the Riskless Principal Subsidiary. In
this regard, prospectuses and sales literature relating to
securities being purchased (or sold) by Riskless Principal
Subsidiary as riskless principal may not be distributed by a
bank or thrift affiliate, nor should any such literature be
made available to the public at any offices of any such
affiliate, unless specifically requested by a customer.
(13) The bank holding company shall assure that no bank
or thrift subsidiary shall, directly or indirectly, extend
credit in any manner to a Riskless Principal Subsidiary or a
subsidiary thereof; or issue a guarantee, acceptance, or
letter of credit, including an endorsement or standby letter
of credit, for the benefit of Riskless Principal Subsidiary or
a subsidiary thereof.
(14) No bank or thrift affiliate of bank holding company
shall, directly or indirectly, for its own account, purchase
financial assets of Riskless Principal Subsidiary or a subsidiary thereof or sell such assets to Riskless Principal
3. As discussed above, this order does not relieve a bank holding
company authorized to engage in bank-ineligible securities underwriting and dealing or private placement activities from any of the
conditions established by the Board with respect to the conduct of
those activities, including any of the limitations that apply generally to
the subsidiary conducting those activities.
4. The disclosures required to be made in the conduct of riskless
principal activities are listed in Appendix A.
Subsidiary or any subsidiary thereof. This limitation shall
not apply to the purchase and sale of U.S. Treasury securities or direct obligations of the Canadian federal government that are not subject to repurchase or reverse repurchase agreements between Riskless Principal Subsidiary
and its bank and thrift affiliates.
Orders Issued Under Sections 3 and 4 of the Bank
Holding Company Act
Firstar Corporation
Milwaukee, Wisconsin
Firstar Corporation of Minnesota
Bloomington, Minnesota
Order Approving the Acquisition
Companies
of Bank
Holding
Firstar Corporation, Milwaukee, Wisconsin ( " F C M " ) , and
its wholly owned subsidiary, Firstar Corporation of Minnesota, Bloomington, Minnesota (together, "Firstar"), both
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) to acquire Jacob Schmidt Company
("Jacob"), and its subsidiary, American Bancorporation,
Inc. ("American"), 1 both in St. Paul, and thereby indirectly
acquire American's subsidiary banks: American Bank,
N.A. and American Commercial Bank, both in St. Paul;
American Bank Lake City, Lake City; and American Bank
Moorhead, Moorhead, all in Minnesota. 2 In addition,
Firstar has requested the Board's approval under section
4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and section 225.23(a) of the Board's Regulation Y (12 C.F.R.
225.23(a)) to acquire all the voting shares of American's
wholly owned nonbank subsidiaries. 3
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 13,496 (1996)). The time for filing
1. Jacob currently owns approximately 51 percent of the voting
shares of American. Firstar has entered into agreements to purchase
the remaining voting share interest in American from the other shareholders.
2. The Office of the Comptroller of the Currency ( " O C C " ) has
approved Firstar's application under section 18(c) of the Federal
Deposit Insurance Act (12 U.S.C. § 1828(c) (the Bank Merger Act), to
merge American Bank and Commercial Bank with and into Firstar
Bank of Minnesota, N.A., Minneapolis, Minnesota. Firstar intends to
sell Lake City Bank and Moorhead Bank.
3. Firstar would acquire American Credit Corporation, St. Paul,
Minnesota, and thereby engage in asset-based lending pursuant to
section 225.25(b)(l)(iv) of Regulation Y (12 C.F.R. 225.25(b)(l)(iv)).
In addition, Firstar would acquire Lake City Agency, Inc., Lake City,
Minnesota, which engages in insurance agency activities pursuant to
section 225.25(b)(8)(iv) of Regulation Y (12 C.F.R. 225.25(b)(8)(iv)).
Firstar also would acquire two inactive nonbank subsidiaries of American, First Agency of Barnesville, Barnesville, and Glasser-American
Mortgage Company, St. Paul, both in Minnesota, and has committed
not to engage in activities through these subsidiaries without the prior
approval of the Federal Reserve System.
Legal Developments
comments has expired, and the Board has considered this
proposal and all comments received in light of the factors
set forth in sections 3 and 4(c)(8) of the BHC Act.
Firstar, with total consolidated assets of $19.2 billion,
operates subsidiary banks in Arizona, Illinois, Iowa, Minnesota, and Wisconsin. 4 Firstar is the third largest banking
or thrift organization ("depository institution") in Minnesota, controlling deposits of approximately $1.6 billion,
representing approximately 3.2 percent of total deposits in
depository institutions in the state. 5 American is the sixth
largest depository institution in Minnesota, controlling deposits of $953 million, representing approximately
1.9 percent of total deposits in depository institutions in the
state. On consummation of this proposal, Firstar would
remain the third largest depository institution in Minnesota, controlling deposits of $2.5 billion, representing approximately 5.1 percent of total deposits in depository
institutions in the state.
Interstate
Analysis
Section 3(d) of the BHC Act, as amended by Section 101
of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, 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 a
bank holding company, if certain conditions are met. For
purposes of the BHC Act, the home state of Firstar is
Wisconsin, and Firstar would acquire banks in Minnesota. 6
The conditions for an interstate acquisition under section
3(d) are met in this case. 7 In view of all the facts of record,
the Board is permitted to approve this proposal under
section 3(d) of the BHC Act.
Competitive
Considerations
Firstar and American compete directly in the MinneapolisSt. Paul, Minnesota banking market ("Minneapolis-St.
Paul banking market"). 8
4. Asset data are as of December 31, 1995.
5. State deposit data are as of December 31, 1995.
6. Pub. L. No. 103-328, 108 Stat. 2338 (1994). A bank holding
company's home state is that state in which the operations of the bank
holding company's banking subsidiaries were principally conducted
on July 1, 1966, or the date on which the company became a bank
holding company, whichever is later.
7. See 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and
(B). Firstar is adequately capitalized and adequately managed. American's banks have been in existence and continuously operated for the
minimum period of time required under Minnesota law. In addition,
upon consummation of this proposal, Firstar 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 of
the total amount of deposits in Minnesota, as required by law.
8. The Minneapolis-St. Paul banking market is approximated by all
of Anoka, Hennepin, Ramsey, Washington, Carver, Scott, and Dakota
Counties in Minnesota; Lent, Chisago Lake, Shafer, Wyoming and
Franconia townships in Chisago County, Minnesota; Blue Hill,
Orrock, Livonia, and Big Lake Townships and the City of Elk River in
Sherburn County, Minnesota; Monticello, Otsego, Bulfalo, Frankfort,
763
Firstar operates the third largest depository institution in
the market, and controls deposits of approximately
$1.6 billion, representing approximately 5.9 percent of
total deposits in depository institutions in the market
("market deposits"). 9 American operates the fifth largest
depository institution in the market, and controls deposits
of approximately $778.5 million, representing approximately 2.9 percent of market deposits.
On consummation of this proposal, Firstar would remain
the third largest depository institution in the market, controlling deposits of $2.4 billion, representing approximately 8.8 percent of market deposits. The change in
market concentration, as measured by the HerfindahlHirschman Index ("HHI"), would not exceed the threshold
levels in the Department of Justice merger guidelines. 10 In
addition, numerous competitors would remain in this market. Based on all the facts of record, the Board concludes
that consummation of this proposal would not result in any
significantly adverse effect on competition or concentration
of banking resources in the Minneapolis-St.Paul banking
market or any other relevant banking market.
Other Factors Under the BHC Act
The BHC Act also requires the Board to consider the
convenience and needs of the community to be served, the
financial and managerial resources and future prospects of
the companies and banks involved, and certain other supervisory factors.
In its consideration of the convenience and needs factor,
the Board has carefully reviewed comments from the Fair
Lending Coalition, Inc. ("Protestant"), which maintain
that the closing of the Teutonia Avenue branch in Milwaukee by Firstar Bank Milwaukee, N.A., Milwaukee, Wisconsin ("Milwaukee Bank") in April 1996, adversely af-
Rockford, and Franklin Townships in Wright County, Minnesota;
Lanesburgh Township in Le Sueur County, Minnesota; and the Town
of Hudson in St. Croix County, Wisconsin.
9. Market data are as of December 31, 1995. Market share data are
based on calculations in which the deposits of thrift institutions are
included at 50 percent. The Board previously has indicated that thrift
institutions have become, or have the potential to become, significant
competitors of commercial banks. See WM Bancorp, 76 Federal
Reserve Bulletin 788 (1990); 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, First Hawaiian Inc., 77 Federal Reserve Bulletin
52 (1991).
10. On consummation of this proposal, the HHI would increase by
34 points to a level of 1866. Under the revised Department of Justice
Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a
market in which the post-merger HHI is above 1800 is considered to
be highly concentrated. The Justice Department has informed the
Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive
effects) unless the post-merger HHI is at least 1800 and the merger
increases the HHI by more than 200 points. The Justice Department
has stated that the higher than normal HHI thresholds for screening
bank mergers for anticompetitive effects implicitly recognize the
competitive effect of limited-purpose lenders and other non-depository
financial entities.
764
Federal Reserve Bulletin • August 1996
fected access to banking services for African Americans
and elderly persons residing in this low- to moderateincome area. Protestant also requests that the Board investigate whether the branch closing fostered racial and economic segregation in Milwaukee. The Board has
considered these comments carefully in light of the limited
scope of the Board's authority under the BHC Act and the
Community Reinvestment Act (12 U.S.C. § 2901 et seq.)
("CRA") and all the facts of record, including the bank's
"outstanding" rating at its most recent examination for
performance under the CRA, as of October 1995, by its
primary federal supervisor, the OCC ("OCC examination"), and the branch closing information filed by Milwaukee Bank with the OCC under the Joint Agency Policy
Statement on Branch Closings and section 42 of the Federal Deposit Insurance Act (12 U.S.C. § 1831r-l) ("FDIC
Act").
The OCC examination found that the branch closing
policy for Milwaukee Bank was satisfactory and noted no
materially adverse effects from branch closings in low- to
moderate-income neighborhoods during the examination
period. The branch closing policy required the bank to
study the economic impact of any proposed branch closing
on the community served by the branch, to solicit input
from the community, and to consider whether alternative
financial facilities were available to the affected customers
before deciding to close the Teutonia Avenue branch.
Firstar has indicated, moreover, that this branch was closed
because the bank's lease was not renewed. Marketing
studies conducted by Firstar over a five-month period
showed that 80 percent of the customers that used the
Teutonia Avenue branch also used one or more of the
bank's other branches, and 64 percent of the branch's
customers that responded to a telephone survey stated that
another branch of Firstar could conveniently serve their
banking needs. Firstar has three branches, and seven other
depository institution maintain branches, within three miles
of the Teutonia Avenue branch.
Firstar does not propose to close any branches of the
depository institution subsidiaries of American in connection with this proposal. Based on all the facts of record,
including the comments by Protestant, and for the reasons
discussed above, the Board concludes that convenience
and needs considerations are consistent with approval. For
these reasons, the Board also concludes that the facts of
record do not support Protestant's request to delay action
on this application in order to conduct a special investigation.
In light of all the facts of record, the Board also concludes that the financial and managerial resources and
future prospects of Firstar and Jacob, and their respective
subsidiaries, are consistent with approval, as are the other
supervisory factors the Board must consider under section 3 of the BHC Act.
Firstar also has requested Board approval, pursuant to
section 4(c)(8) of the BHC Act, to acquire the nonbanking
subsidiaries of American. The Board previously has determined by regulation or order that these activities are closely
related to banking for purposes of section 4(c)(8) of the
BHC Act. Firstar has committed that it will conduct these
activities in accordance with the Board's regulations and
orders approving these activities for bank holding companies.
In order to approve this proposal, the Board also must
determine that the performance of the proposed nonbanking activities "can reasonably be expected to produce
benefits to the public . . . that outweigh possible adverse
effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests or
unsound banking practices," 12 U.S.C. § 1843(c)(8). In every case under section 4 of the BHC Act, the Board
considers the financial condition and resources of the applicant and its subsidiaries and the effect of the transaction on
these resources. 11 Based on all the facts of record, the
Board has concluded that financial and managerial considerations are consistent with approval.
The Board also concludes that this proposal would enable Firstar to provide greater convenience and improved
service to Firstar's customers and to customers of American's nonbanking subsidiaries. The record in this case
indicates that there are numerous providers of these nonbanking services, and there is no evidence in the record to
indicate that consummation of this proposal is likely to
result in any significantly adverse effects, such as undue
concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices
that would outweigh the public benefits of this proposal.
Accordingly, the Board has determined that the balance of
public interest factors it must consider under section 4(c)(8)
of the BHC Act is favorable and consistent with approval
of the notice to acquire American's nonbanking subsidiaries.
Conclusion
Based on the foregoing, including the commitments made
to the Board by Firstar in connection with this application
and notice, and in light of all the facts of record, the Board
has determined that the application and notice should be,
and hereby are, approved. 12 The Board's approval is specif11. See 12 C.F.R. 225.24. See also The Fuji Bank Limited, 75
Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73
Federal Reserve Bulletin 155 (1987).
12. Protestant requests that the Board hold a public hearing or
public meeting on the adverse effects of closing the Teutonia Avenue
branch. Section 3(b) of the BHC Act does not require the Board to
hold a public hearing or meeting on an application unless the appropriate supervisory authority for the bank to be acquired makes a timely
written recommendation of denial of the application. In this case, the
Board has not received such a recommendation from any state or
federal supervisory authority. Under its rules, the Board may, in its
discretion, hold a public hearing or meeting on an application to
clarify factual issues related to the application and to provide an
opportunity for testimony, if appropriate. 12 C.F.R. 262.3(e) and
262.25(d). The Board has carefully considered Protestant's request in
light of all the facts of record. In the Board's view, Protestant has had
ample opportunity to submit its views, and has, in fact, submitted
materials that have been considered by the Board in acting on this
application. Protestant's request fails to demonstrate why its substantial written submissions do not adequately present its allegations or
Legal Developments
ically conditioned on compliance by Firstar with all the
commitments made in connection with the proposal. The
Board's determinations on the proposed nonbanking activities also are subject to all the conditions set forth in
Regulation Y, including those in sections 225.7 and
225.23(b)(3) of Regulation Y (12 C.F.R. 225.7 and
225.23(b)(3)), and to the Board's authority to require such
modification or termination of the activities of a bank
holding company or any of its subsidiaries as the Board
finds necessary to ensure compliance with, and to prevent
evasion of, the provisions of the BHC Act and the Board's
regulations and orders issued thereunder. For purposes of
this action, the commitments and conditions relied on by
the Board in reaching this decision are deemed to be
conditions imposed in writing by the Board in connection
with its findings and decision, and, as such, may be enforced in proceedings under applicable law.
The acquisition of American's subsidiary banks shall not
be consummated before the fifteenth calendar day following the effective date of this order, and this 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 Chicago, acting pursuant to delegated authority.
By order of the Board of Governors, effective June 24,
1996.
Voting for this action: Chairman Greenspan and Governors Kelley,
Lindsey, Phillips, and Yellen. Abstaining from this action: Governor
Meyer.
WILLIAM W . W I L E S
Secretary of the Board
ORDERS ISSUED UNDER BANK MERGER
ACT
West One Bank, Idaho
Boise, Idaho
Order Approving the Merger of Banks and
of Bank Branches
Establishment
West One Bank, Idaho, Boise ("West One"), a state member bank, has requested the Board's approval under section
18(c)
of
the
Federal
Deposit
Insurance
Act
why a public hearing or meeting is otherwise warranted in this case.
Protestant participated in several meetings that were held by Firstar on
the closing of the Teutonia Avenue branch. In addition, section 42 of
the FDIC Act also provides a mechanism for interested persons to
request a public meeting regarding a branch closing at the time the
closing is announced and Protestant did not avail himself of this
opportunity. After a careful review of all the facts of record, the Board
has concluded that Protestant disputes the weight that should be
accorded to, and the conclusions that may be drawn from, the facts of
record, or disputes facts that are not material to the Board's decision.
For these reasons, and based on all the facts of record, the Board has
determined that a public hearing or meeting is not necessary to clarify
the factual record in the application, and is not warranted in this case.
Accordingly, Protestant's request for a public hearing or meeting is
denied.
765
(12 U.S.C. § 1828(c)) (the "Bank Merger Act") to merge
with U. S. Bank of Idaho, National Association, Coeur
D'Alene, both in Idaho ("U.S. Bank"), with West One
surviving the merger. West One also has requested the
Board's approval under section 9 of the Federal Reserve
Act (12 U.S.C. § 321) to establish branches at the current
locations of the U.S. Bank branches. 1
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been given in accordance with the Bank Merger Act and the Board's Rules of
Procedure (12 C.F.R. 262.3(b)). As required by the Bank
Merger Act, reports on the competitive effects of the
merger were requested from the United States Attorney
General, the Office of the Comptroller of the Currency
("OCC"), and the Federal Deposit Insurance Corporation.
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 the Bank Merger Act and
section 9 of the Federal Reserve Act.
West One and U.S. Bank are wholly owned subsidiaries
of U. S. Bancorp, Portland, Oregon ("U.S. Bancorp").
U.S. Bancorp, with total consolidated assets of $31.9 billion, is the largest commercial banking organization in
Idaho, controlling deposits of approximately $3.4 billion,
representing 37.8 percent of the total deposits in commercial banking organizations in Idaho. 2
The Bank Merger Act prohibits the Board from approving a proposal under the Act if the proposal would result in
a monopoly or if the proposal would substantially lessen
competition in any relevant banking market unless such
anticompetitive effects are clearly outweighed in the public
interest by the probable effect of the transaction in meeting
the convenience and needs of the community to be served.
The proposal represents a corporate reorganization of
U.S. Bancorp's existing banking operations in Idaho. Based
on all the facts of record, consummation of the proposal
would not have any significantly adverse effects on competition or the concentration of banking resources in any
relevant banking market.
The Bank Merger Act also requires the Board to consider the financial and managerial resources and future
prospects of the banks involved. The Board has carefully
reviewed these factors in light of all the facts of record,
including comments received from several individuals
("Commenters"), and relevant reports of examination and
other supervisory information from federal supervisory
agencies. Based on all the facts of record, the Board
concludes that these factors are consistent with approval of
the proposal. 3 Considerations relating to the convenience
1. The locations of the branches that West One proposes to establish
are listed in the Appendix.
2. Asset data are as of December 31, 1995. Deposit data are as of
June 30, 1995.
3. Commenters maintain that their pending legal actions against
West One have not been properly disclosed in the proposal or to
shareholders, and that their claims adversely affect the financial resources of the bank. These lawsuits are based on allegations that relate
to Commenters' loan transactions with West One that resulted in
766
Federal Reserve Bulletin • August 1996
and needs of the community, also required to be reviewed
under the Bank Merger Act, are consistent with approval.
The Board also has considered the factors it is required
to consider when reviewing a proposal to establish
branches under section 9 of the Federal Reserve Act
(12 U.S.C. § 321 et seq.), and has determined that those
factors are consistent with approval of the establishment of
West One branches at the present sites of the U.S. Bank
branch offices.
Based on the foregoing and all the facts of record, the
Board has determined that these applications should be,
and hereby are, approved. 4 The Board's approval of the
proposal is conditioned on compliance with the commitments made in connection with these applications. For
purposes of this action, the commitments and conditions
relied on in reaching this decision are both conditions
imposed in writing by the Board and, as such, may be
enforced in proceedings under applicable law.
The merger of U.S. Bank and West One may not be
consummated before the fifteenth calendar day following
foreclosure proceedings by the bank more than ten years ago. The
Board notes that Commenters litigated their claims in courts that had
the authority to provide Commenters with appropriate remedies, if
improper actions could have been substantiated. Trial and appellate
courts have not granted relief to Commenters. U.S. Bancorp, the only
shareholder of West One, is aware of these legal actions. The Board
has considered the effect of these claims on the financial resources of
West One in light of reports of examination and other information
about the financial strength of the bank and its parent holding company.
One Commenter also contends that from 1984 through 1987, West
One misreported its allowance for loan and lease losses. West One
was a nationally chartered institution before it became a state member
bank in 1992. The Board has consulted with the OCC, the primary
federal supervisor of West One at that time, and has provided a copy
of Commenter's allegations to the OCC. In addition, the Board has
considered West One's record for accuracy in its reports since it
became a state member bank. The Board also notes that the same
allegations of misreporting by West One were considered by the
Securities and Exchange Commission ( " S E C " ) in connection with
U.S. Bancorp's acquisition of West One Bancorp in 1995, and the
SEC determined that the allegations did not warrant investigation
under the securities laws.
4. Commenters have requested that the Board hold a public hearing
or meeting on issues raised by their comments. Neither the Bank
Merger Act nor section 9 of the Federal Reserve Act provide for
public hearings or meetings on an application. Under the Board's
Rules of Procedure, however, the Board may, in its discretion, hold a
public hearing or meeting on an application to clarify factual issues
related to the application and to provide an opportunity for testimony,
if appropriate. 12 C.F.R. 262.3(e). The Board notes that Commenters
have had ample opportunity to submit their views and have, in fact,
submitted comments on these applications. The requests fail to demonstrate why the written submissions do not adequately present commenters' allegations or why a public hearing or meeting is otherwise
warranted in the case. For these reasons, and based on all the facts of
record, the Board has determined that a public hearing or meeting is
not necessary to clarify the factual record in the proposal and are not
warranted in this case. Accordingly, Commenters' request for a public
hearing or meeting is denied.
Commenters have also requested that the Board delay acting on the
proposal until their allegations are investigated. Based on all the facts
of record, and for the reasons previously discussed, the Board concludes that a delay is not warranted and that the record is sufficient to
act on the proposal.
the effective date of this order, and this proposal may not
be consummated later than three months after the effective
date of this order, unless such period is extended 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 June 17,
1996.
Voting for this action: Governors Kelley, Lindsey, Phillips, and
Yellen. Absent and not voting: Chairman Pro Tempore Greenspan.
JENNIFER J . J O H N S O N
Deputy Secretary of the Board
Appendix
Locations of branches of U.S. Bank to be established
West One:
Coeur D'Alene
301 North 3rd Street
Coeur D'Alene, Idaho 83816
Eight & Bannock Branch
802 West Bannock
Boise, Idaho 83702
Bryden Avenue Financial
(Supermarket location)
332 Thain Road
Lewiston, Idaho 83501
Silver Lake Mall Branch
123 West Hanley Avenue
Coeur D'Alene, Idaho 83814
Meridian Branch
132 East Fairview
Meridian, Idaho 83642
Post Falls Branch
709 East Seltice Way
Post Falls, Idaho 83854
Caldwell Branch
2615 East Cleveland Blvd.
Caldwell, Idaho 83602
Appleway Financial Market
West 225 Apple Way
Coeur D'Alene, Idaho 83814
Westpark Towne Plaza Branch
675 North Milwaukee Avenue
Boise, Idaho 83704
Vista Avenue Branch
1103 Vista Avenue
Boise, Idaho 93705
by
Legal Developments
Colverdale McMillan Branch
12195 West McMillan Road
Boise, Idaho 83704
ORDERS ISSUED
UNDER FEDERAL
RESERVE
ACT
Iowa State Bank
Hull, Iowa
Order Approving Establishment
of a Branch
Iowa State Bank, Hull, Iowa ("Bank"), a state member
bank, has requested the Board's approval under section 9
of the Federal Reserve Act (12 U.S.C. § 321 et seq.) to
establish a branch at 1101 Main Street, Hull, Iowa. 1
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published in
accordance with the Board's Rules of Procedure. The time
for filing comments has expired, and the Board has considered the application and all comments received in light of
the factors set forth in section 9 of the Federal Reserve Act.
Bank, with total assets of $33.9 million, 2 is a wholly
owned subsidiary of Vogel Bancshares, Inc., Orange City,
Iowa ("Vogel Bancshares"). Bank operates in the Sioux
County, Iowa, banking market, which includes the towns
of Hull and Sheldon. 3
The Board has carefully reviewed the factors it is required to consider in proposals to establish a branch under
the Federal Reserve Act. 4 Based on all the facts of record,
the Board concludes that these factors, including the financial condition of Bank, the general character of its management, and the proposed exercise of corporate powers, are
consistent with approval and the purposes of section 9 of
the Federal Reserve Act. 5 The Board also concludes that
Bank's efforts to meet the credit needs of its entire commu-
1. Bank proposes to relocate its main office from Hull to Sheldon,
Iowa, 16 miles away, and to retain the Main Street location in Hull as
a full-service branch. The Iowa Superintendent of Banking has approved the proposed relocation to Sheldon and the establishment of a
branch in Hull.
2. Asset data are as of March 31, 1996.
3. The banking market is approximated by Sioux County and Floyd,
Carroll, Baker, and Caledonia townships in O'Brien County, Iowa.
4. See 12 U.S.C. § 322.
5. The Board has carefully considered comments from two banks in
Sheldon contending that the town is unable to support an additional
competitor and that Bank's proposal would adversely affect the safety
and soundness of the commercial banks that currently serve the town.
The Board notes that there is no evidence of record to indicate that
this proposal would have an adverse effect on the safety and soundness of Bank or Vogel Bancshares. In addition, the number of competitors in the Sioux County banking market would remain the same, and
the residents of Sheldon would have the benefit of an additional
provider of banking services. The increase in competition under these
circumstances is a positive aspect of the proposal. Based on all the
facts of record, the Board concludes that these comments do not raise
adverse considerations under the statutory factors the Board is required to consider under the Federal Reserve Act.
767
nity, including low- and moderate-income neighborhoods,
are consistent with approval. 6
Based on the foregoing and all other facts of record, the
Board has determined that this notice should be, and hereby
is, approved. The Board's approval is specifically conditioned on Bank's compliance with all commitments made
in connection with the application. 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 Hull office shall be in operation as a branch no later
than one year after the effective date of this order, unless
such period is extended for good cause shown by the Board
or by the Federal Reserve Bank of Chicago, acting pursuant to delegated authority.
By order of the Board of Governors, effective June 24,
1996.
Voting for this action: Chairman Greenspan and Governors Kelley,
Lindsey, Phillips and Yellen. Abstaining from this action: Governor
Meyer.
WILLIAM W. WILES
Secretary of the Board
Korea Long Term Credit Bank
Seoul, Korea
Order Approving Establishment
of a Branch
Korea Long Term Credit Bank, Seoul, Korea ("Bank"), a
foreign bank within the meaning of the International Banking Act (the "IBA"), has applied under section 7(d) of the
IBA (12 U.S.C. § 3105(d)) to establish a state-licensed
branch in New York, New York. The Foreign Bank Supervision Enhancement Act of 1991 ("FBSEA"), which
amended the IBA, provides that a foreign bank must obtain
the approval of the Board to establish a branch in the
United States.
Notice of the application, affording interested persons an
opportunity to submit comments, has been published in a
newspaper of general circulation in New York, New York
(The New York Times, February 28, 1996). The time for
filing comments has expired, and all comments have been
considered.
Bank, with assets of $27.5 billion, 1 is primarily engaged
in wholesale banking, providing a broad range of financial
services to private business enterprises. Shares of Bank are
widely held, and no individual shareholder owns more than
10 percent of any class of the voting securities of Bank. In
Korea, Bank operates 34 branches and has seven nonbank
subsidiaries involved in activities such as investment bank-
6. Bank received a "satisfactory" rating from the Federal Reserve
Bank of Chicago under the Community Reinvestment Act in its most
recent examination, as of July 25, 1995.
1. Data are as of December 31, 1995, unless otherwise noted.
768
Federal Reserve Bulletin • August 1996
ing, credit card operations, consumer lending, factoring,
equipment rental, and investment management and advisory services. Bank's foreign operations include bank subsidiaries in London and Hong Kong, branches in Tokyo
and the Cayman Islands, and representative offices in Hong
Kong, Singapore, New York, and China.
Bank proposes to upgrade its New York representative
office to a state-licensed branch that would engage in a
variety of activities, including trade finance, lending,
deposit-taking, and fund management. Bank does not engage directly or indirectly in any nonbanking activities in
the United States and would be a qualifying banking organization within the meaning of Regulation K (12 C.F.R.
211.23) after establishing the proposed branch.
Bank has received preliminary approval from Korea's
Ministry of Finance and Economy (the "Ministry") to
establish the proposed branch, subject to approval of the
branch by the relevant U.S. authorities.
In order to approve an application by a foreign bank to
establish a branch in the United States, the IBA and Regulation K require the Board to determine that the foreign
bank applicant engages directly in the business of banking
outside of the United States and has furnished to the Board
the information it needs to assess the application adequately. The Board must also determine that the foreign
bank is subject to comprehensive supervision or regulation
on a consolidated basis by its home country supervisor
(12 U.S.C. § 3105(d)(2); 12 C.F.R. 211.24(c)(1)). The
Board may also take into account additional standards set
forth in the IBA and Regulation K (12 U.S.C. § 3105(d)(3)(4); 12 C.F.R. 211.24(c)).
Bank engages directly in the business of banking outside
of the United States through its banking operations in
Korea. Bank also has provided the Board with the information necessary to assess the application through submissions that address the relevant issues.
Regulation K provides that a foreign bank will be considered to be subject to comprehensive supervision or
regulation on a consolidated basis if the Board determines
that the bank is supervised and regulated in such a manner
that its home country supervisor receives sufficient information on the bank's worldwide operations, including the
relationship of the bank to any affiliates, to assess the
overall financial condition of the bank and its compliance
with law and regulation. 2 In making its determination
2. In assessing this standard, the Board considers, among other
factors, the extent to which the home country supervisors:
(i) Ensure that the bank has adequate procedures for monitoring and
controlling its activities worldwide;
(ii) Obtain information on the condition of the bank and its subsidiaries and offices through regular examination reports, audit reports,
or otherwise;
(iii) Obtain information on the dealings with and relationship between the bank and its affiliates, both foreign and domestic;
(iv) Receive from the bank financial reports that are consolidated on
a worldwide basis, or comparable information that permits analysis
of the bank's financial condition on a worldwide consolidated basis;
and
under this standard, the Board has considered the following
information.
Bank is licensed in Korea under the Long Term Credit
Bank Law of 1980 and is currently the only long-term
credit bank in Korea. The Long Term Credit Bank Law
grants the Ministry primary supervisory authority over
long-term credit banks and sole authority in Korea to grant
a license to, or to authorize the establishment of a branch
of, a long-term credit bank. The Ministry cooperates with
the Office of Bank Supervision and Examination of the
Bank of Korea (the " O B S E " ) in supervising Bank, in
recognition of the OBSE's expertise in banking supervisory matters arising from its responsibilities in relation to
commercial banks. 3
Bank is required to submit a number of periodic reports
to the Ministry and the OBSE, and the Ministry may
request any other information concerning Bank's business
that it deems appropriate. Bank must provide the Ministry
with annual consolidated financial statements covering its
worldwide operations. Other required reports include annual risk-based capital reports, semi-annual bank-only financial statements, quarterly statements on foreign exchange dealings, and monthly reports covering topics such
as classification of unsecured loans, funding, and investment and trust activities. The Ministry reviews the reports
submitted directly by Bank or indirectly through the OBSE
and is kept apprised of Bank's operations through regular
and frequent contacts with Bank's senior management.
In addition, the Ministry conducts regular and special
on-site examinations of Bank, often in conjunction with the
OBSE. The Ministry's general examination policy is to
conduct on-site examinations of Bank once a year, although the Ministry may waive the on-site examination for
a given year. Each annual on-site examination includes the
head office and approximately 10 percent of Bank's randomly selected branches. These examinations generally
cover matters such as capital adequacy, asset quality, compliance with applicable law, and the adequacy of internal
controls and record-keeping practices. Whenever it is
deemed necessary, the Ministry also conducts special onsite examinations of Bank regarding specific matters or
specific branch offices.
The Ministry's supervisory authority extends to all nonbank business conducted by Bank through its domestic
subsidiaries. Several of these subsidiaries also are subject
(v) Evaluate prudential standards, such as capital adequacy and risk
asset exposure, on a worldwide basis.
These are indicia of comprehensive, consolidated supervision; no
single factor is essential and other elements may inform the Board's
determination.
3. Commercial banks are licensed in Korea under the General
Banking Act rather than the Long Term Credit Bank Law and are
subject to the primary supervisory authority of the OBSE. The Board
has previously determined, in connection with applications by Korean
commercial banks, that these banks were subject to home country
supervision on a comprehensive, consolidated basis. See Donghwa
Bank, 81 Federal Reserve Bulletin 744 (1995); Cho Hung Bank, 81
Federal Reserve Bulletin 475 (1995); KorAm Bank, 80 Federal Reserve Bulletin 184 (1994).
Legal Developments
to regulation by other Korean governmental agencies. In
addition, Bank is prohibited by law from making a loan in
an amount equal to or greater than 25 percent or more of its
capital and surplus to any single person or entity. The
Ministry monitors Bank's proposals regarding loans to
affiliates.
Under Korea's Foreign Exchange Control Law, Bank's
international operations are supervised by the OBSE pursuant to authority delegated to it by the Ministry. The Ministry may obtain supervisory information from the other
Korean supervisory authorities, which directly oversee
Bank's domestic affiliates.
The Ministry has various enforcement powers over
Bank. The Ministry may suspend all or part of Bank's
business if it finds that Bank has violated any provision of
applicable Korean law or has engaged in acts contrary to
the public interest. In addition, an officer or director of
Bank who knowingly submits false information in reports
to the Ministry or who hinders the Ministry's supervision
of Bank may be subject to fine or imprisonment.
Based on all the facts of record, the Board has determined that Bank is subject to comprehensive supervision
and regulation on a consolidated basis by its home country
supervisors.
The Board has taken into account the additional standards set forth in section 7 of the IBA and in Regulation K.
(See 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)).
As noted above, Bank has received preliminary authority
from the Ministry to establish the state-licensed branch,
subject to approval of the proposed branch by the relevant
U.S. authorities.
Bank must comply with risk-based capital standards
adopted by Korea. 4 Bank's capital is in excess of the
minimum levels that would be required by the Basle Capital Accord and is considered equivalent to capital that
would be required of a U.S. banking organization. Managerial and other financial resources of Bank are also considered consistent with approval, and Bank appears to have
the experience and capacity to support the proposed
branch. Bank has established controls and procedures for
the proposed branch in order to ensure compliance with
applicable U.S. law, as well as controls and procedures for
its worldwide operations generally.
Bank has committed to make available to the Board such
information on the operations or activities of Bank and any
of its affiliates that the Board deems necessary to determine
and enforce compliance with the IBA, the Bank Holding
Company Act of 1956, as amended, and other applicable
federal law. The Board has reviewed the restrictions on
disclosure in Korea and has communicated with the appropriate authorities regarding access to information. To the
extent that the provision of such information may be pro-
4. As of January 1, 1996, all Korean banking institutions, including
Bank, have been required to maintain a capital adequacy ratio of at
least 8 percent in conformance with the minimum standards required
by the Basle Capital Accord. Bank is currently in full compliance with
these standards.
769
hibited or impeded by law, Bank has committed to cooperate with the Board in obtaining any consents or waivers
that might be required from third parties for disclosure. In
addition, subject to certain conditions, the Ministry and the
OBSE may share information on Bank's operations with
other supervisors, including the Board. In light of these
commitments and other facts of record, and subject to the
condition described below, the Board has concluded that
Bank has provided adequate assurances of access to any
necessary information the Board may request.
On the basis of all the facts of record, and subject to the
commitments made by Bank, as well as the terms and
conditions set forth in this order, the Board has determined
that Bank's application to establish a state-licensed branch
should be, and hereby is, approved. 5 Should any restrictions on access to information on the operations or activities of Bank or any of its affiliates subsequently interfere
with the Board's ability to determine the safety and soundness of Bank's U.S. operations or the compliance by Bank
or any of its affiliates with applicable federal law, the
Board may require termination of any of Bank's direct or
indirect activities in the United States. Approval of this
application also is conditioned specifically on compliance
by Bank with the commitments made in connection with
this application and with the conditions in this order. The
commitments and conditions referred to above are conditions imposed in writing by the Board in connection with
its decision and may be enforced in proceedings under
12 U.S.C. § 1818 or 12 U.S.C. § 1847 against Bank, its offices, or its affiliates.
By order of the Board of Governors, effective June 24,
1996.
Voting for this action: Chairman Greenspan and Governors Kelley,
Lindsey, Phillips, and Yellen. Abstaining from this action: Governor
Meyer.
WILLIAM W . W I L E S
Secretary of the Board
ORDERS ISSUED UNDER INTERNATIONAL
BANKING
ACT
National Bank of Canada
Montreal, Canada
Order Approving Establishment
of Representative
Offices
National Bank of Canada, Montreal, Canada ("Bank"), a
foreign bank within the meaning of the International Banking Act ("IBA"), has applied under section 10(a) of the
IBA (12 U.S.C. § 3107(a)) to establish representative of-
5. The Board's authority to approve the establishment of the proposed branch parallels the continuing authority of the state of New
York to license offices of a foreign bank. The Board's approval of this
application does not supplant the authority of the state of New York,
and its agent, the New York State Banking Department, to license the
proposed branch of Bank in accordance with any terms or conditions
that the state of New York may impose.
770
Federal Reserve Bulletin • August 1996
fices in Denver, Colorado; Boca Raton, Florida; Baltimore,
Maryland; Boston, Massachusetts; Southfield, Michigan;
Charlotte, North Carolina; Cincinnati, Ohio; Cleveland,
Ohio; Pittsburgh, Pennsylvania; Memphis, Tennessee; and
Richmond, Virginia. The Foreign Bank Supervision Enhancement Act of 1991 ("FBSEA"), which amended the
IBA, provides that a foreign bank must obtain the approval
of the Board to establish a representative office in the
United States.
Notice of the application, affording interested persons an
opportunity to submit comments, has been published in the
following newspapers of general circulation: The Denver
Post, February 26, 1996; The Miami Herald, February 26,
1996; The Baltimore Sun, February 26, 1996; The Boston
Globe, February 26, 1996; The Detroit Free Press, February 26, 1996; The Charlotte Observer, February 26, 1996;
The Cincinnati Enquirer, February 26, 1996; The Cleveland Plain Dealer, February 26, 1996; The Pittsburgh
Post-Gazette, February 26, 1996; The Memphis Commercial Appeal, February 26, 1996; and The Richmond TimesDispatch, February 26, 1996. The time for filing comments
has expired, and all comments have been considered.
Bank, with total consolidated assets of approximately
$36 billion, 1 is the sixth largest bank in Canada, providing
wholesale and retail financial services to customers
throughout Canada. The shares of Bank are publicly traded
and widely held, with no shareholders owning more than
10 percent of Bank.
Bank operates 644 domestic branches and 14 international offices, including branches, representative offices
and banking and financial subsidiaries in Europe, Asia, and
the Caribbean. In the United States, Bank operates
branches in New York, New York, and Chicago, Illinois;
agencies in Atlanta, Georgia, and Los Angeles, California;
representative offices in Buffalo, New York, and Dallas,
Texas; and a regional administrative office in New York,
New York. Bank also wholly owns a savings bank subsidiary in Pompano Beach, Florida, and a nonbanking subsidiary engaged in permissible activities. 2
Bank's primary purpose for establishing the proposed
representative offices is to market the products and services
of Bank, solicit loan business for Bank, and serve as a
liaison between the head office in Montreal and potential
and existing customers in the states served by the representative offices. The proposed representative offices would
not solicit deposits for Bank; would not have authority to
make any business decisions for Bank; and would not have
authority to contract in the name of Bank.
In acting on an application to establish a representative
office, the IBA and Regulation K provide that the Board
shall take into account whether the foreign bank engages
1. Asset data are as of October 31, 1995.
2. National Canada Finance Corporation ( " N C F C " ) , New York,
New York, which engages in asset-based lending to middle market
companies, operates 13 offices in the United States. The proposed
representative offices would share premises with NCFC. Bank has
stated that the proposed representative offices would not represent nor
provide services to NCFC.
directly in the business of banking outside of the United
States and has furnished to the Board the information it
needs to assess the application adequately. The Board also
shall take into account whether the foreign bank and any
foreign bank parent is subject to comprehensive supervision or regulation on a consolidated basis by its home
country supervisor (12 U.S.C. § 3105(d)(2); 12 C.F.R.
211.24). 3 The Board may also take into account additional
standards as set forth in the IBA and Regulation K
(12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)).
In this case, with respect to the issue of supervision by
home country authorities, the Board has considered the
following information. Bank is supervised and regulated
by the Office of the Superintendent of Financial Institutions
("OSFI"). The OSFI is responsible for the prudential
supervision and regulation of federally regulated financial
institutions. The Board has previously determined, in connection with an application involving another Canadian
bank, Bank of Montreal, Montreal, Canada ("BOM"), that
BOM was subject to home country supervision on a consolidated basis. 4 Bank is supervised by the OSFI on the
same terms and conditions as BOM. Based on all the facts
of record, the Board has determined that Bank is subject to
comprehensive supervision and regulation on a consolidated basis by its home country supervisors.
The Board also has taken into account the additional
standards set forth in section 7 of the IBA (See 12 U.S.C.
§ 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)). The OSFI has
approved the establishment of the proposed representative
offices.
With respect to the financial and managerial resources of
Bank, taking into consideration Bank's record of operations in its home country, its overall financial resources,
and its standing with its home country supervisors, the
Board has also determined that financial and managerial
factors are consistent with approval of the proposed representative offices. Bank appears to have the experience and
capacity to support the proposed representative offices and
also has established controls and procedures for the proposed representative offices to ensure compliance with U.S.
law.
3. In assessing this standard, the Board considers, among other
factors, the extent to which the home country supervisors:
(i) Ensure that the bank has adequate procedures for monitoring and
controlling its activities worldwide;
(ii) Obtain information on the condition of the bank and its subsidiaries and offices through regular examination reports, audit reports,
or otherwise;
(iii) Obtain information on the dealings with and relationship between the bank and its affiliates, both foreign and domestic;
(iv) Receive from the bank financial reports that are consolidated on
a worldwide basis, or comparable information that permits analysis
of the bank's financial condition on a worldwide consolidated basis;
and
(v) Evaluate prudential standards, such as capital adequacy and risk
asset exposure, on a worldwide basis.
These are indicia of comprehensive, consolidated supervision. No
single factor is essential and other elements may inform the Board's
determination.
4. See Bank of Montreal, 80 Federal Reserve Bulletin 925 (1994).
Legal Developments
Finally, with respect to access to information about
Bank's operations, the Board has reviewed the restrictions
on disclosure in relevant jurisdictions in which Bank operates and has communicated with relevant government authorities about access to information. Bank has committed
to make available to the Board such information on the
operations of Bank and any affiliate of Bank that the Board
deems necessary to determine and enforce compliance with
the IBA, the BHC Act, as amended, and other applicable
federal law. To the extent that the provision of such information may be prohibited by law, Bank has committed to
cooperate with the Board to obtain any necessary consents
or waivers that might be required from third parties for
disclosure. In addition, subject to certain conditions, the
OSFI may share information on Bank's operations with
other supervisors, including the Board. In light of these
commitments and other facts of record, and subject to the
condition described below, the Board concludes that Bank
has provided adequate assurances of access to any necessary information the Board may request.
On the basis of all the facts of record, and subject to the
commitments made by Bank, as well as the terms and
conditions set forth in this order, the Board has determined
that Bank's application to establish the representative offices should be, and hereby is, approved. Should any restrictions on access to information on the operations or
activities of Bank and its affiliates subsequently interfere
with the Board's ability to obtain information to determine
APPLICATIONS
APPROVED
By the Secretary
UNDER BANK HOLDING
COMPANY
771
and enforce compliance by Bank or its affiliates with
applicable federal statutes, the Board may require termination of any of the Bank's direct or indirect activities in the
United States. Approval of this application is also specifically conditioned on Bank's compliance with the commitments made in connection with the application, and with
the conditions in this order. 5 The commitments and conditions referred to above are conditions imposed in writing
by the Board in connection with its decision, and may be
enforced in proceedings under 12 U.S.C. § 1818 or
12 U.S.C. § 1847 against Bank, its offices, and its affiliates.
By order of the Board of Governors, effective June 10,
1996.
Voting for this action: Chairman Pro Tempore Greenspan and
Governors Lindsey, Phillips, and Yellen. Absent and not voting:
Governor Kelley.
JENNIFER J . JOHNSON
Deputy Secretary of the Board
5. The Board's authority to approve the establishment of the proposed representative office parallels the continuing authority of the
various state banking departments to license offices of foreign banks.
The Board's approval of this application does not supplant the authority of these states, and their agents, the state banking departments, to
license the proposed representative offices of Bank in accordance with
any terms or conditions that these states may impose.
ACT
of the Board
Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to
the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551.
Section 3
Applicant(s)
Bank(s)
Effective Date
Boatmen's Bancshares, Inc.,
St. Louis, Missouri
Canadian Bancshares, Inc.,
Canadian, Texas
First State Bank of Canadian,
Canadian, Texas
Union National Bancorp,
Liberty, Indiana
The Union County National Bank of Liberty,
Liberty, Indiana
Boulder Bancorporation,
Boulder, Colorado
The Bank of Boulder,
Boulder, Colorado
Twentieth Bancorp, Inc.,
Huntington, West Virginia
June 5, 1996
First Merchants Corporation,
Muncie, Indiana
First National of Nebraska, Inc.
Omaha, Nebraska
First National of Colorado,
Omaha, Nebraska
Horizon Bancorp, Inc.,
Beckley, West Virginia
June 11, 1996
June 21, 1996
June 28, 1996
772
Federal Reserve Bulletin • August 1996
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
Acadiana Bancshares, Inc.,
Lafayette, Louisiana
Associated Banc-Corp.,
Green Bay, Wisconsin
Associated Illinois Banc-Corp.,
Chicago, Illinois
LBA Savings Bank,
Lafayette, Louisiana
Mid-America National Bancorp, Inc.,
Chicago, Illinois
Mid-America National Bank of
Chicago,
Chicago, Illinois
The Middle Tennessee Bank,
Columbia, Tennessee
Owen-Curtiss State Bank,
Owen, Wisconsin
Atlanta
May 23, 1996
Chicago
May 23, 1996
Atlanta
June 7, 1996
Commercial Bancorp of Georgia, Inc.,
Lawrenceville, Georgia
Commercial Bank of Georgia,
Lawrenceville, Georgia
Southern Banking Corporation,
Orlando, Florida
Southern Bank of Central Florida,
Altamonte Springs, Florida
Klickitat Valley Bank,
Goldendale, Washington
Commerce Bank of Virginia,
Richmond, Virginia
Atlanta
May 23, 1996
Atlanta
May 31, 1996
San Francisco
May 29, 1996
Richmond
June 4, 1996
Community Bank Delavan,
Delavan, Wisconsin
Community State Bank,
Algoma, Wisconsin
First Community Bank,
Orange City, Florida
Chicago
May 29, 1996
Chicago
June 5, 1996
Atlanta
June 7, 1996
ANB Financial Corporation,
Kennewick, Washington
National Bank of York County,
Rock Hill, South Carolina
The First National Bank of
Christiansburg,
Christiansburg, Virginia
Fort Brooke Bank,
Brandon, Florida
Jackson Bancorporation, Inc.,
Fairmont, Minnesota
Bank Midwest, Minnesota Iowa, N.A.,
Fairmont, Minnesota
Sheridan State Bank,
Sheridan, Illinois
San Francisco
June 17, 1996
Richmond
June 14, 1996
Richmond
May 29, 1996
Atlanta
June 6, 1996
Chicago
June 18, 1996
Chicago
June 19, 1996
Brookwood Group, L.R,
Columbia, Tennessee
Central Wisconsin Bancorporation,
Inc.,
Colby, Wisconsin
The Colonial BancGroup, Inc.,
Montgomery, Alabama
The Colonial BancGroup, Inc.,
Montgomery, Alabama
Columbia Bancorp,
The Dalles, Oregon
Community Bankshares
Incorporated,
Petersburg, Virginia
Delavan Bancshares, Inc.,
Delavan, Wisconsin
F&M Bancorporation,
Kaukauna, Wisconsin
First Community Bank Holding
Corporation,
Orange City, Florida
First Hawaiian, Inc.,
Honolulu, Hawaii
First National Corporation,
Orangeburg, South Carolina
FNB Corporation,
Christiansburg, Virginia
Fort Brooke Bancorporation,
Brandon, Florida
Goodenow Bancorporation,
Okoboji, Iowa
Granville Bancshares, Inc.,
Granville, Illinois
Chicago
June 4, 1996
Legal Developments
Section 3—Continued
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
Hills Bancorporation,
Hills, Iowa
Alliance Bancorporation,
Lisbon, Iowa
Trimpe's, Inc.,
Lisbon, Iowa
Lisbon Bank and Trust Company,
Lisbon, Iowa
Horizon Bancorp,
Michigan City, Indiana
Chicago
June 6, 1996
Chicago
June 14, 1996
New York
June 7, 1996
Atlanta
May 30, 1996
Atlanta
May 30, 1996
Kansas City
June 18, 1996
Atlanta
May 23, 1996
Dallas
May 30, 1996
Dallas
May 30, 1996
Palm Beach National Bank and Trust
Company,
North Palm Beach, Florida
First McKinney Bancshares, Inc.,
McKinney, Texas
First Bank,
McKinney, Texas
Prairieland Bancorp, Inc.,
Bushnell, Illinois
Atlanta
June 19, 1996
Dallas
May 30, 1996
Chicago
June 13, 1996
Farmers Deposit Bancorp,
Eminence, Kentucky
CitNat Bancorp,
Urbana, Ohio
Citizens National Bank of Urbana,
Urbana, Ohio
Port Neches Bancshares, Inc.,
Port Neches, Texas
Cleveland
June 6, 1996
Cleveland
May 30, 1996
Dallas
May 29, 1996
Horizon Bancorp Employee Stock
Ownership Plan,
Michigan City, Indiana
HUBCO, Inc.,
Mahwah, New Jersey
Independent Bancshares, Inc.,
Powder Springs, Georgia
Key Florida Bancorp, Inc.,
Bradenton, Florida
Lindoe, Inc.,
Ordway, Colorado
Newnan Holdings, Inc.,
Newnan, Georgia
Outsource Capital Group, Inc.,
Lubbock, Texas
Outsource Delaware Capital Group,
Inc.,
Dover, Delaware
Palm Beach National Holding
Company,
North Palm Beach, Florida
Piano Bancshares, Inc.,
Piano, Texas
Piano Bancshares of Delaware, Inc..
Dover, Delaware
Prairieland Employees Stock
Ownership Plan,
Bushnell, Illinois
Premier Financial Bancorp, Inc.,
Georgetown, Kentucky
Security Banc Corporation,
Springfield, Ohio
Southeast Texas Bancshares, Inc.,
Beaumont, Texas
Lafayette American Bank and Trust
Company,
Bridgeport, Connecticut
Independent Bank & Trust Company,
Powder Springs, Georgia
Liberty National Bank,
Bradenton, Florida
Pueblo Bancorporation, Inc.,
Pueblo, Colorado
Southside Financial Group, Inc.,
Fayetteville, Georgia
Citizens Bank & Trust of Fayette
County,
Fayetteville, Georgia
Outsource Delaware Capital Group,
Inc.,
Dover, Delaware
First Bank & Trust Company,
White Deer, Texas
First Bank & Trust Company,
White Deer, Texas
773
774
Federal Reserve Bulletin • August 1996
Section 3—Continued
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
State National Bancshares, Inc.
Lubbock, Texas
State National Bancshares of Delaware,
Inc.,
Dover, Delaware
State National Bank of West Texas,
Lubbock, Texas
State National Bank of West Texas,
Lubbock, Texas
Dallas
June 14, 1996
Dallas
June 14, 1996
Comerica Bank-Illinois,
Franklin Park, Illinois
Chicago
May 29, 1996
Gateway State Bank,
Clinton, Iowa
Savanna Bancorp, Inc.,
Savanna, Illinois
Savanna State Bank,
Savanna, Illinois
East Des Moines National Bank,
Des Moines, Iowa
Vancouver Bancorp,
Vancouver, Washington
Hartford-Carlisle Savings Bank,
Carlisle, Iowa
XIT Delaware, Inc.,
Dover, Delaware
Security State Bank,
Littlefield, Texas
Security State Bank,
Littlefield, Texas
Chicago
June 6, 1996
Chicago
June 4, 1996
San Francisco
May 22, 1996
Chicago
May 31, 1996
Dallas
June 12, 1996
Dallas
June 12, 1996
Applicant(s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
Anita Bancorporation,
Atlantic, Iowa
The Bank of Nova Scotia,
Toronto, Ontario, Canada
Barnett Banks, Inc.,
Jacksonville, Florida
To engage in making and servicing
loans
Scotia Capital Markets (USA) Inc.,
New York, New York
Barnett Community Development
Corporation,
Jacksonville, Florida
To engage in making and servicing
loans
Chicago
May 29, 1996
New York
June 11, 1996
Atlanta
June 7, 1996
Chicago
May 23, 1996
State National Bancshares of
Delaware, Inc.,
Dover, Delaware
Stichting Prioriteit ABN AMRO
Holding,
Amsterdam, The Netherlands
Stichting Administratiekantoor ABN
AMRO Holding,
Amsterdam, The Netherlands
ABN AMRO Holding N.V.,
Amsterdam, The Netherlands
ABN AMRO Bank N.V.,
Amsterdam, The Netherlands
ABN AMRO North America, Inc.,
Chicago, Illinois
Thomson Investment Company, Inc.,
Savanna, Illinois
Van Diest Investment Company,
Ankeny, Iowa
West Coast Bancorp,
Lake Oswego, Oregon
Wildcat, Inc.,
Cedar Rapids, Iowa
XIT Bancshares, Inc.,
Littlefield, Texas
XIT Delaware, Inc.,
Dover, Delaware
Section 4
Boscobel Bancorp, Inc.,
Boscobel, Wisconsin
Legal Developments
Section 4—Continued
Applicant(s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
Community Bancshares, Inc.,
Joseph, Oregon
Community Bank System, Inc.,
Dewitt, New York
D & D Bancshares, Inc.,
Mount Auburn, Iowa
HSBC Holdings pic,
London, England
HSBC Holdings BV,
Amsterdam, The Netherlands
Newnan Holdings, Inc.,
Newnan, Georgia
Norwest Corporation,
Minneapolis, Minnesota
Norwest Financial Services, Inc.,
Des Moines, Iowa
Norwest Corporation,
Minneapolis, Minnesota
Outsource Capital Group, Inc.,
Lubbock, Texas
Outsource Delaware Capital Group,
Inc.,
Dover, Delaware
Tattnall Bancshares, Inc.,
Reidsville, Georgia
VCR Bancorporation Ltd.,
Carlisle, Iowa
Citizens Title and Escrow Service, Inc.,
Enterprise, Oregon
Mayer Management Co., Inc.,
Utica, New York
To engage de novo in making and
servicing loans
HSBC Futures, Inc.,
New York, New York
San Francisco
June 12, 1996
New York
June 4, 1996
Chicago
May 24, 1996
New York
June 7, 1996
Atlanta
May 23, 1996
Minneapolis
May 23, 1996
Real Estate Financial,
Palm Harbor, Florida
Outsource Lease, Inc.,
Lubbock, Texas
Rail Mortgage Corporation,
Lubbock, Texas
Minneapolis
June 14, 1996
Dallas
May 30, 1996
Reidsville Insurance Agency, Inc.,
Reidsville, Georgia
To engage de novo in the making and
servicing of loans
Atlanta
June 18, 1996
Chicago
June 7, 1996
Applicant(s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
Center Bancorp, Inc.,
Union, New Jersey
Union Center Interim National Bank,
Union, New Jersey
Lehigh Savings Bank, S.L.A.,
Union, New Jersey
Northern Illinois Financial Corporation,
Wauconda, Illinois
Premier Insurance Services, Inc.,
Warren, Illinois
New York
May 29, 1996
Chicago
May 24, 1996
To engage in operating a savings
association
Aman Collection Service, Inc.,
Aberdeen, South Dakota
Sections 3 and 4
Grand Premier Financial, Inc.,
Wauconda, Illinois
775
776
Federal Reserve Bulletin • August 1996
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
Adams Bank & Trust,
Ogallala, Nebraska
Adams Savings & Loan Association
of Chappell,
Chappell, Nebraska
The Bank,
Manawa, Wisconsin
Essex Savings Bank, F.S.B.,
Virginia Beach, Virginia
Household Bank, f.s.b.,
Prospect Heights, Illinois
Kansas City
May 29, 1996
Chicago
June 12, 1996
Richmond
May 30, 1996
Chicago
May 29, 1996
Baylake Bank,
Sturgeon Bay, Wisconsin
Centura Bank,
Rocky Mount, North Carolina
Harris Trust and Savings Bank,
Chicago, Illinois
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.
Interamericas Investments, Ltd. v. Board of Governors, No.
96-60326 (5th Cir., filed May 8, 1996). Petition for review
of order imposing civil money penalties and cease and
desist order in enforcement case.
Kuntz v. Board of Governors, No. 96-1137 (D.C. Cir., filed
April 25, 1996). Petition for review of a Board order dated
March 25, 1996, approving an application by CoreStates
Financial Corp., Philadelphia, Pennsylvania to acquire Meridian Bancorp, Inc., Reading, Pennsylvania. The Board's
motion to dismiss was filed on June 3, 1996.
Kuntz v. Board of Governors, No. 96-1079 (D.C. Cir., filed
March 7, 1996). Petition for review of a Board order dated
February 7, 1996, approving applications by The Fifth
Third Bank, Cincinnati, Ohio, and The Fifth Third Bank of
Columbus, Columbus, Ohio, to acquire certain assets and
assume certain liabilities of 25 branches of NBD Bank,
Columbus, Ohio. Petitioner has moved to consolidate the
case with Kuntz v. Board of Governors, No. 95-1495. On
April 8, 1996, the Board filed a motion to dismiss the
action.
Henderson v. Board of Governors, No. 96-1054 (D.C. Cir.,
filed February 16, 1996). Petition for review of a Board
order dated January 17, 1996, approving the merger of First
Citizens BancShares, Inc., Raleigh, North Carolina, with
Allied Bank Capital, Inc., Sanford, North Carolina. Petitioners' motion for a stay was denied on March 7, 1996.
Research Triangle Institute v. Board of Governors, No.
L96CV00102 (M.D.N.C., filed February 12, 1996). Contract dispute. On May 3, 1996, the Board filed a motion to
dismiss the action. In re: Subpoena Duces Tecum, Misc. No.
96-MS-43(TPJ) (D. D.C., filed February 7, 1996). Motion
to enforce a subpoena issued to the Board seeking, among
other things, bank examination material. The action was
dismissed by stipulation on May 16, 1996.
Inner City Press!Community on the Move v. Board of Governors, No. 96-4008 (2nd Cir., filed January 19, 1996). Petition for review of a Board order dated January 5, 1996,
approving the applications and notices by Chemical Banking Corporation to merge with The Chase Manhattan Corporation, both of New York, New York, and by Chemical
Bank to merge with The Chase Manhattan Bank, N.A., both
of New York, New York. Petitioners' motion for an emergency stay of the transaction was denied following oral
argument on March 26, 1996. The case has been consolidated for oral argument and decision with Lee v. Board of
Governors, No. 95^4134 (2d Cir.).
Hotchkiss v. Board of Governors, No. 3:96CV7033 (N.D.
Ohio, filed January 19, 1996). Appeal of order of bankruptcy court granting Board's motion for summary judgment in adversary proceeding challenging dischargeability
of Board consent order. On June 21, 1996, appellant filed a
notice of voluntary dismissal.
Menick v. Greenspan, No. 95-CV-01916 (D. D.C., filed October 10, 1995). Complaint alleging sex, age, and handicap
discrimination in employment.
Kuntz v. Board of Governors, No. 95-1495 (D.C. Cir., filed
September 21, 1995). Petition for review of Board order
dated August 23, 1995, approving the applications of The
Fifth Third Bank, Cincinnati, Ohio, to acquire certain assets
and assume certain liabilities of 12 branches of PNC Bank,
Ohio, N.A., Cincinnati, Ohio, and to establish certain
branches. The Board's motion to dismiss was filed on
October 26, 1995.
Lee v. Board of Governors, No. 95^-134 (2nd Cir., filed
August 22, 1995). Petition for review of Board orders dated
July 24, 1995, approving certain steps of a corporate reorganization of U.S. Trust Corporation, New York, New York,
and the acquisition of U.S. Trust by Chase Manhattan
Legal Developments
Corporation, New York, New York. On September 12,
1995, the court denied petitioners' motion for an emergency
stay of the Board's orders. The Board's brief was filed on
April 16, 1996.
Beckman v. Greenspan, No. 95-35473 (9th Cir., filed May 4,
1995). Appeal of dismissal of action against Board and
others seeking damages for alleged violations of constitutional and common law rights. The appellants' brief
was filed on June 23, 1995; the Board's brief was filed on
July 12, 1995.
Board of Governors v. Scott, Misc. No. 95-127 (LFO/PJA) (D.
D.C., filed April 14, 1995). Application to enforce an administrative investigatory subpoena for documents and testimony. On August 3, 1995, the magistrate judge issued an
order granting in part and denying in part the Board's
application. On September 18, 1995, the intervenor moved
for reconsideration of a portion of the magistrate's ruling.
On May 6, 1996, the court denied the motion for reconsideration. The intervenors' notice of appeal was filed May 31,
1996.
Money Station, Inc. v. Board of Governors, No. 95-1182
(D.C. Cir., filed March 30, 1995). Petition for review of a
Board order dated March 1, 1995, approving notices by
Bank One Corporation, Columbus, Ohio; CoreStates Financial Corp., Philadelphia, Pennsylvania; PNC Bank Corp.,
Pittsburgh, Pennsylvania; and KeyCorp, Cleveland, Ohio,
to acquire certain data processing assets of National City
Corporation, Cleveland, Ohio, through a joint venture subsidiary. On April 23, 1996, the court vacated the Board's
order. The Board's petition for rehearing and suggestion for
rehearing in banc was filed on June 7, 1996.
In re Subpoena Duces Tecum, Misc. No. 95-06 (D.D.C., filed
January 6, 1995). Action to enforce subpoena seeking predecisional supervisory documents sought in connection with
an action by Bank of New England Corporation's trustee in
bankruptcy against the Federal Deposit Insurance Corporation. The Board filed its opposition on January 20, 1995.
Oral argument on the motion was held July 14, 1995.
Board of Governors v. Pharaon, No. 91-CIV-6250 (S.D. New
York, filed September 17, 1991). Action to freeze assets of
individual pending administrative adjudication of civil
79
money penalty assessment by the Board. On September 17,
1991, the court issued an order temporarily restraining the
transfer or disposition of the individual's assets.
FINAL ENFORCEMENT
OF
ORDERS ISSUED BY THE BOARD
GOVERNORS
Gary S. Missner
New York, New York
The Federal Reserve Board announced on June 11, 1996,
the issuance of a combined Cease and Desist Order and
Assessment of a Civil Money Penalty against Gary S.
Missner, a former employee of BT Securities Corporation,
New York, New York, a subsidiary of Bankers Trust New
York Corporation, New York, New York.
TERMINATION OF ENFORCEMENT
ACTIONS
The Federal Reserve Board announced on June 3, 1996,
the termination of the following enforcement actions:
Bank of White Sulphur Springs
White Sulphur Springs, West Virginia
Written Agreement dated February 28, 1992—terminated
May 10, 1996.
Bank Bumiputra Malaysia Berhard
Kuala Lumpur, Malaysia
Written Agreement dated April 26,
May 13, 1996.
1991—terminated
Dyer F&M Bancshares
Dyer, Tennessee
Cease and Desist Order dated January
terminated May 3, 1996.
14,
1994—
778
Membership of the Board of Governors
of the Federal Reserve System, 1913-96
APPOINTIVE
MEMBERS
Name
1
Federal Reserve
District
Date of initial
oath of office
Charles S. Hamlin
Boston
Aug. 10, 1914
Paul M. Warburg
Frederic A. Delano
W.P.G. Harding
Adolph C. Miller
New York
Chicago
Atlanta
San Francisco
Aug.
Aug.
Aug.
Aug.
Albert Strauss
Henry A. Moehlenpah .
Edmund Piatt
David C. Wills
John R. Mitchell
Milo D. Campbell
Daniel R. Crissinger
George R. James
Edward H. Cunningham
Roy A. Young
Eugene Meyer
Way land W. Magee
Eugene R. Black
M.S. Szymczak
J.J. Thomas
Marriner S. Eccles
New York
Chicago
New York
Cleveland
Minneapolis
Chicago
Cleveland
St. Louis
Chicago
Minneapolis
New York
Kansas City
Atlanta
Chicago
Kansas City
San Francisco
Oct. 26, 1918
Nov. 10, 1919
June 8, 1920
Sept. 29, 1920
May 12, 1921
Mar. 14, 1923
May 1, 1923
May 14, 1923
May 14, 1923
Oct. 4, 1927
Sept. 16, 1930
May 18, 1931
May 19, 1933
June 14, 1933
June 14, 1933
Nov. 15, 1934
Joseph A. Broderick
John K. McKee
Ronald Ransom
Ralph W. Morrison
Chester C. Davis
Ernest G. Draper
Rudolph M. Evans
James K. Vardaman, Jr.
Lawrence Clayton
Thomas B. McCabe ....
Edward L. Norton
Oliver S. Powell
Wm. McC. Martin, Jr. .
A.L. Mills, Jr
J.L. Robertson
C. Canby Balderston ...
Paul E. Miller
Chas. N. Shepardson ...
G.H. King, Jr
George W. Mitchell
J. Dewey Daane
Sherman J. Maisel
Andrew F. Brimmer
William W. Sherrill
Arthur F. Burns
John E. Sheehan
Jeffrey M. Bucher
Robert C. Holland
Henry C. Wallich
Philip E. Coldwell
New York
Cleveland
Atlanta
Dallas
Richmond
New York
Richmond
St. Louis
Boston
Philadelphia
Atlanta
Minneapolis
New York
San Francisco
Kansas City
Philadelphia
Minneapolis
Dallas
Atlanta
Chicago
Richmond
San Francisco
Philadelphia
Dallas
New York
St. Louis
San Francisco
Kansas City
Boston
Dallas
Feb. 3, 1936
Feb. 3, 1936
Feb. 3, 1936
Feb. 10, 1936
June 25, 1936
Mar. 30, 1938
Mar. 14, 1942
Apr. 4, 1946
Feb. 14, 1947
Apr. 15, 1948
Sept. 1, 1950
Sept. 1, 1950
April 2, 1951
Feb. 18, 1952
Feb. 18, 1952
Aug. 12, 1954
Aug. 13, 1954
Mar. 17, 1955
Mar. 25, 1959
Aug. 31, 1961
Nov. 29, 1963
Apr. 30, 1965
Mar. 9, 1966
May 1, 1967
Jan. 31, 1970
Jan. 4, 1972
June 5, 1972
June 11, 1973
Mar. 8, 1974
Oct. 29, 1974
10,
10,
10,
10,
1914
1914
1914
1914
Other dates and information relating
to membership 2
Reappointed in 1916 and 1926. Served until
Feb. 3, 1936.3
Term expired Aug. 9, 1918.
Resigned July 21, 1918.
Term expired Aug. 9, 1922.
Reappointed in 1924. Reappointed in 1934 from the
Richmond District. Served until Feb. 3, 1936.3
Resigned Mar. 15, 1920.
Term expired Aug. 9, 1920.
Reappointed in 1928. Resigned Sept. 14, 1930.
Term expired Mar. 4, 1921.
Resigned May 12, 1923.
Died Mar. 22, 1923.
Resigned Sept. 15, 1927.
Reappointed in 1931. Served until Feb. 3, 1936.4
Died Nov. 28, 1930.
Resigned Aug. 31, 1930.
Resigned May 10, 1933.
Term expired Jan. 24, 1933.
Resigned Aug. 15, 1934.
Reappointed in 1936 and 1948. Resigned May 31, 1961.
Served until Feb. 10, 1936.3
Reappointed in 1936, 1940, and 1944. Resigned
July 14, 1951.
Resigned Sept. 30, 1937.
Served until Apr. 4, 1946.3
Reappointed in 1942. Died Dec. 2, 1947.
Resigned July 9, 1936.
Reappointed in 1940. Resigned Apr. 15, 1941.
Served until Sept. 1, 1950.3
Served until Aug. 13, 1954.3
Resigned Nov. 30, 1958.
Died Dec. 4, 1949.
Resigned Mar. 31, 1951.
Resigned Jan. 31, 1952.
Resigned June 30, 1952.
Reappointed in 1956. Term expired Jan. 31, 1970.
Reappointed in 1958. Resigned Feb. 28, 1965.
Reappointed in 1964. Resigned Apr. 30, 1973.
Served through Feb. 28, 1966.
Died Oct. 21, 1954.
Retired Apr. 30, 1967.
Reappointed in 1960. Resigned Sept. 18, 1963.
Reappointed in 1962. Served until Feb. 13, 1976.3
Served until Mar. 8, 1974.3
Served through May 31, 1972.
Resigned Aug. 31, 1974.
Reappointed in 1968. Resigned Nov. 15, 1971.
Term began Feb. 1, 1970. Resigned Mar. 31, 1978.
Resigned June 1, 1975.
Resigned Jan. 2, 1976.
Resigned May 15, 1976.
Resigned Dec. 15, 1986.
Served through Feb. 29, 1980.
779
Federal Reserve
District
Name
Philip C. Jackson, Jr.
J. Charles Partee
Stephen S. Gardner ..
David M. Lilly
G. William Miller ...
Nancy H. Teeters
Emmett J. Rice
Frederick H. Schultz
Paul A. Volcker
Lyle E. Gramley
Preston Martin
Martha R. Seger
Wayne D. Angell
Manuel H. Johnson .
H. Robert Heller
Edward W. Kelley, Jr.
Alan Greenspan
John P. LaWare
David W. Mullins, Jr.
Lawrence B. Lindsey
Susan M. Phillips
Alan S. Blinder
Janet L. Yellen
Laurence H. Meyer .
Alice M. Rivlin
Chairmen 4
Charles S. Hamlin
W.P.G. Harding
Daniel R. Crissinger
Roy A. Young
Eugene Meyer
Eugene R. Black
Marriner S. Eccles
Thomas B. McCabe
Wm. McC. Martin, Jr.
Arthur F. Burns
G. William Miller
Paul A. Volcker
Alan Greenspan
Ex- OFFICIO
Atlanta
Richmond
Philadelphia
.Minneapolis
San Francisco
Chicago
New York
Atlanta
Philadelphia
Kansas City
San Francisco
Chicago
Kansas City
Richmond
San Francisco
Dallas
New York
Boston
St. Louis
Richmond
Chicago
Philadelphia
San Francisco
St. Louis
Philadelphia
Date of initial
oath of office
July 14, 1975
Jan. 5, 1976
Feb. 13, 1976
June 1, 1976
Mar. 8, 1978
Sept. 18, 1978
June 20, 1979
July 27, 1979
Aug. 6, 1979
May 28, 1980
Mar. 31, 1982
July 2, 1984
Feb. 7, 1986
Feb. 7, 1986
Aug. 19, 1986
May 26, 1987
Aug. 11, 1987
Aug. 15, 1988
May 21, 1990
Nov. 26, 1991
Dec. 2, 1991
June 27, 1994
Aug. 12, 1994
June 24, 1996
June 25, 1996
Aug. 10, 1914-Aug. 9, 1916
Aug. 10, 1916-Aug. 9, 1922
May 1, 1923-Sept. 15, 1927
Oct. 4, 1927-Aug. 31, 1930
Sept. 16, 1930-May 10, 1933
May 19, 1933-Aug. 15, 1934
Nov. 15, 1934-Jan. 31, 19485
Apr. 15, 1948-Mar. 31, 1951
Apr. 2, 1951-Jan. 31, 1970
Feb. 1, 1970-Jan. 31, 1978
Mar. 8, 1978-Aug. 6, 1979
Aug. 6, 1979-Aug. 11, 1987
Aug. 11, 1987—6
Other dates and information relating
to membership 2
Resigned Nov. 17, 1978.
Served until Feb. 7, 1986.3
Died Nov. 19, 1978.
Resigned Feb. 24, 1978.
Resigned Aug. 6, 1979.
Served through June 27, 1984.
Resigned Dec. 31, 1986.
Served through Feb. 11, 1982.
Resigned August 11, 1987.
Resigned Sept. 1, 1985.
Resigned April 30, 1986.
Resigned March 11, 1991.
Served through Feb. 9, 1994.
Resigned August 3, 1990.
Resigned July 31, 1989.
Reappointed in 1990.
Reappointed in 1992.
Resigned April 30, 1995.
Resigned Feb. 14, 1994.
Term expired Jan. 31, 1996.
Vice Chairmen4
Frederic A. Delano
Paul M. Warburg
Albert Strauss
Edmund Piatt
J.J. Thomas
Ronald Ransom
C. Canby Balderston
J.L. Robertson
George W. Mitchell
Stephen S. Gardner
Frederick H. Schultz
Preston Martin
Manuel H. Johnson
David W. Mullins, Jr.
Alan S. Blinder
Alice M. Rivlin
Aug. 10, 1914-Aug. 9, 1916
Aug. 10, 1916-Aug. 9, 1918
Oct. 26, 1918-Mar. 15, 1920
July 23, 1920-Sept. 14, 1930
Aug. 21, 1934-Feb. 10, 1936
Aug. 6, 1936-Dec. 2, 1947
Mar. 11, 1955-Feb. 28, 1966
Mar. 1, 1966-Apr. 30, 1973
May 1, 1973-Feb. 13, 1976
Feb. 13, 1976-Nov. 19, 1978
July 27, 1979-Feb. 11, 1982
Mar. 31, 1982-Apr. 30, 1986
Aug. 4, 1986-Aug. 3, 1990
July 24, 1991-Feb. 14, 1994
June 27, 1994-Jan. 31, 1996
June 25, 1996-
MEMBERS1
Secretaries of the Treasury
W.G. McAdoo
Carter Glass
David F. Houston
Andrew W. Mellon
Ogden L. Mills
William H. Woodin
Henry Morgenthau Jr
Dec. 23, 1913-Dec. 15, 1918
Dec. 16, 1918-Feb. 1, 1920
Feb. 2, 1920-Mar. 3, 1921
Mar. 4, 1921-Feb. 12, 1932
Feb. 12, 1932-Mar. 4, 1933
Mar. 4, 1933-Dec. 31, 1933
Jan. 1, 1934-Feb. 1, 1936
1. Under the provisions of the original Federal Reserve Act, the Federal
Reserve Board was composed of seven members, including five appointive
members, the Secretary of the Treasury, who was ex-officio chairman of the
Board, and the Comptroller of the Currency. The original term of office was ten
years, and the five original appointive members had terms of two, four, six,
eight, and ten years respectively. In 1922 the number of appointive members was
increased to six, and in 1933 the term of office was increased to twelve years.
The Banking Act of 1935, approved Aug. 23, 1935, changed the name of the
Federal Reserve Board to the Board of Governors of the Federal Reserve System
and provided that the Board should be composed of seven appointive members;
that the Secretary of the Treasury and the Comptroller of the Currency should
continue to serve as members until Feb. 1, 1936; that the appoint-
Comptrollers of the Currency
John Skelton Williams
Feb. 2, 1914-Mar. 2, 1921
Daniel R. Crissinger
Mar. 17, 1921-Apr. 30, 1923
Henry M. Dawes
May 1, 1923-Dec. 17, 1924
Joseph W. Mcintosh
Dec. 20, 1924-Nov. 20, 1928
J.W. Pole
Nov. 21, 1928-Sept. 20, 1932
J.F.T. O'Connor
May 11, 1933-Feb. 1, 1936
ive members in office on the date of that act should continue to serve until Feb. 1,
1936, or until their successors were appointed and had qualified; and that
thereafter the terms of members should be fourteen years and that the
designation of Chairman and Vice Chairman of the Board should be for a term of
four years.
2. Date after words "Resigned" and "Retired" denotes final day of service.
3. Successor took office on this date.
4. Chairman and Vice Chairman were designated Governor and Vice
Governor before Aug. 23, 1935.
5. Served as Chairman Pro Tempore from February 3, 1948, to April 15,
1948.
6. Served as Chairman Pro Tempore from March 3, 1996, to June 20, 1996.
780
Combined Financial Statements
of the Federal Reserve Banks
The financial statements of the Federal Reserve Banks were audited by Coopers &
Lybrand, independent public accountants, for the year ended December 31, 1995
I Coopers
I &Lybrand
Coopers & Lybrand L.L.R
a professional
firm
R E P O R T OF I N D E P E N D E N T A C C O U N T A N T S
To the Board of Governors of The Federal Reserve System
and the Board of Directors of The Federal Reserve Banks:
We have audited the accompanying combined statement of condition of The
Federal Reserve Banks (the "Reserve Banks") as of December 31, 1995, and the related
statements of income and changes in capital for the year then ended. These financial
statements are the responsibility of the Reserve Banks' management. Our responsibility
is to express an opinion on the financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurances about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
As discussed in Note 3, the combined financial statements were prepared in
conformity with the accounting principles, policies, and practices established by the
Board of Governors of The Federal Reserve System. These principles, policies, and
practices, which were designed to meet the specialized accounting and reporting needs
of The Federal Reserve System, are set forth in the Financial Accounting Manual for
Federal Reserve Banks and constitute a comprehensive basis of accounting other than
generally accepted accounting principles.
In our opinion, the financial statements referred to above present fairly, in all
material respects, the combined financial position of the Reserve Banks at December 31,
1995, and combined results of their operations for the year ended, on the basis of
accounting described in Note 3.
This report is intended solely for the information and use of the Board of
Governors of The Federal Reserve System and the Boards of Directors and management
of The Federal Reserve Banks, and should not be used for any other purpose.
Washington, D.C.
March 22, 1996
781
FEDERAL RESERVE BANKS
C O M B I N E D S T A T E M E N T OF C O N D I T I O N
December 31, 1995
(in millions)
ASSETS
Gold certificates
Special drawing rights certificates
Coin
Items in process of collection
Loans to depository institutions
U.S. government and federal agency securities, net
Investments denominated in foreign currencies
Accrued interest receivable
Bank premises and equipment, net
Other assets
Total assets
$ 11,050
10,168
425
4,769
135
396,491
21,099
4,101
1,646
1,271
$451,155
LIABILITIES AND CAPITAL
LIABILITIES
Federal Reserve notes outstanding, net
Deposits
Depository institutions
U.S. Treasury, general account
Other deposits
Deferred credit items
Interest on Federal Reserve notes due U.S. Treasury
Accrued benefit cost
Other liabilities
Total liabilities
$400,935
29,611
5,979
669
4,538
650
672
169
443,223
CAPITAL
Capital paid-in
Surplus
Total capital
Total liabilities and capital
The accompanying notes are an integral part of these financial statements.
3,966
3,966
7,932
$451,155
782
Federal Reserve Bulletin • August 1996
FEDERAL RESERVE BANKS
COMBINED STATEMENT OF INCOME
for the year ended December 31, 1995
(in millions)
Interest income
Interest on U.S. government securities
Interest on foreign currencies
Interest on loans to depository institutions
Total interest income
$23,826
784
11
24,621
Other operating income
Income from services
Reimbursable services to government agencies
Foreign currency gains, net
Government securities gains, net
Other income
739
221
1,005
6
56
Total other operating income
2,027
Operating expenses
Salaries and other benefits
Occupancy expense
Equipment expense
Cost of unreimbursed Treasury services
Assessments by Board of Governors
Other expenses
1,226
165
243
38
532
452
Total operating expenses
2,656
Income before cumulative effect of accounting change
Cumulative effect of change in accounting principle
Net income prior to distribution
Distribution of net income
Dividends paid to member banks
Transferred to surplus
Payments to U.S. Treasury
23,992
(89)
$23,903
$
231
283
23,389
$23,903
The accompanying notes are an integral part of these financial statements.
Combined Financial Statements of the Federal Reserve Banks
783
FEDERAL RESERVE BANKS
COMBINED S T A T E M E N T OF C H A N G E S IN C A P I T A L
for the year ended December 31, 1995
(in millions)
Balance at December 31, 1994
( 7 3 . 6 7 million shares)
Net income transferred
to surplus
Net change in capital stock
issued (5.66 million shares)
Balance at December 31, 1995
( 7 9 . 3 3 million shares)
Capital
paid-in
Surplus
Total
capital
$3,683
$3,683
$7,366
283
283
283
283
$3,966
$3,966
$7,932
The accompanying notes are an integral part of thesefinancialstatements.
NOTES TO COMBINED FINANCIAL STATEMENTS OF THE FEDERAL RESERVE BANKS, DECEMBER 3 1 ,
1995
( 1 ) ORGANIZATION AND BASIS OF PRESENTATION
Board of Directors
The twelve Federal Reserve Banks (Reserve Banks) are part of
the Federal Reserve System (System) created by Congress under
the Federal Reserve Act of 1913 (Federal Reserve Act) which
established the central bank of the United States. The Reserve
Banks are federal instrumentalities chartered by the federal government and possess a unique set of governmental, corporate, and
central bank characteristics. Other major elements of the System
are the Board of Governors of the Federal Reserve System (Board
of Governors), the Federal Open Market Committee, and the
Federal Advisory Council. The Reserve Banks are not subject to
federal or state income taxes.
Although the Reserve Banks are chartered as independent
organizations overseen by the Board of Governors, the Reserve
Banks work jointly to carry out their statutory responsibilities.
The majority of the assets, liabilities, and income of the Reserve
Banks is derived from central bank activities and responsibilities
with regard to monetary policy and currency. For this reason, the
accompanying combined set of financial statements for the twelve
independent Reserve Banks is prepared, adjusted to eliminate
interdistrict accounts and transactions.
The Federal Reserve Act specifies the composition of Reserve
Bank boards of directors. Each board is composed of nine members serving three-year terms: three directors, including those
designated as Chairman and Deputy Chairman, are appointed by
the Board of Governors; and six directors are elected by member
banks. Of the six elected by member banks, three represent the
public and three represent member banks. Member banks are
divided into three classes according to size. Member banks in
each class elect one director representing member banks and one
representing the public. In any election of directors, each member
bank receives one vote, regardless of the number of shares of
Reserve Bank stock it holds.
Corporate Structure
The Reserve Banks serve twelve Federal Reserve Districts nationwide. In accordance with the Federal Reserve Act, each Reserve
Bank has a corporate structure with supervision and control
exercised by a Board of Directors chosen partly by nomination
and election by member banks and partly by the Board of Governors. Banks that are members of the System include all national
banks and any state-chartered bank that elects to become a
member.
( 2 ) OPERATIONS AND SERVICES
The System performs a variety of services and operations. Functions include formulating and conducting monetary policy; participating actively in the payments mechanism, including large-dollar
transfers of funds, automated clearing house operations, and check
processing; distribution of coin and currency; fiscal agency functions for the U.S. Treasury and certain federal agencies; serving as
the federal government's bank; providing short-term loans to
depository institutions; serving the consumer and the community
by providing educational materials and information regarding
consumer laws; supervising bank holding companies and state
member banks; and administering other regulations of the Board
of Governors. The Board of Governors' operating costs are funded
through assessments on the Reserve Banks.
784
Federal Reserve Bulletin • August 1996
( 3 ) SIGNIFICANT ACCOUNTING POLICIES
(B) Special Drawing Rights Certificates
In carrying out various responsibilities as the n a t i o n ' s central
bank, the Reserve B a n k s participate in activities that result in
income, particularly interest i n c o m e f r o m securities held in the
S y s t e m O p e n M a r k e t A c c o u n t ( S O M A ) . T h e i n c o m e is incidental
to the Reserve B a n k s ' public responsibilities and does not motivate activities or policy decisions. Specialized accounting principles f o r entities with the unique p o w e r s and responsibilities of
the n a t i o n ' s central bank h a v e not been formulated by the Financial A c c o u n t i n g Standards Board. T h e Board of G o v e r n o r s has
d e v e l o p e d specialized accounting principles and practices that it
believes are appropriate f o r the significantly different nature and
f u n c t i o n of a central bank as c o m p a r e d to the private sector. T h e s e
accounting principles and practices are generally d o c u m e n t e d in
the Financial Accounting Manual for Federal Reserve Banks (the
Financial Accounting Manual), which is published by the B o a r d
of G o v e r n o r s . All Reserve B a n k s are required to adopt and apply
accounting policies and practices that are consistent with the
Financial Accounting Manual. T h e financial statements have been
prepared in a c c o r d a n c e with the Financial Accounting
Manual.
Differences exist b e t w e e n the policies of the System and generally
accepted accounting principles ( G A A P ) . The primary difference
is the presentation of all security holdings at amortized cost rather
than at the fair value presentation requirements of G A A P .
A c c o u n t i n g policies and practices f o r U.S. g o v e r n m e n t and federal agency securities and investments denominated in foreign
currencies are f u r t h e r described in note 3(D). In addition, the
Board of G o v e r n o r s and the R e s e r v e Banks have elected not to
include a Statement of C a s h Flows, as the liquidity and cash
position of the Reserve B a n k s are not of primary concern to the
shareholders and other users of these financial statements. Other
information regarding the Reserve Banks' activities is provided,
or m a y b e derived f r o m , the Statements of Condition, Income, and
C h a n g e s in Capital. T h e r e f o r e , a Statement of Cash F l o w s would
not provide any additional useful information. There are n o other
significant differences b e t w e e n the policies outlined in the Financial Accounting Manual and GAAP. The preparation of financial
statements in conformity with the Financial Accounting
Manual
requires m a n a g e m e n t to m a k e estimates and assumptions that
affect the reported a m o u n t s of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial
statements and the reported a m o u n t s of i n c o m e and expenses
during the reporting period. Actual results could differ f r o m those
estimates. Unique accounts and significant accounting policies are
explained below.
Special d r a w i n g rights ( S D R s ) are issued by the International
M o n e t a r y F u n d (the F u n d ) to its m e m b e r s in proportion to each
m e m b e r ' s quota in the F u n d at the time of issuance. S D R s serve
as a supplement to international monetary reserves and m a y b e
transferred f r o m o n e national monetary authority to another.
U n d e r the law providing f o r U.S. participation in the S D R system,
the Secretary of the U.S. Treasury is authorized to issue S D R
certificates, s o m e w h a t like gold certificates, to the Reserve B a n k s .
At such time, equivalent a m o u n t s in dollars are credited to the
account established f o r the U.S. Treasury, and Reserve B a n k s '
S D R certificate account is increased. T h e R e s e r v e B a n k s are
required to purchase S D R s , at the direction of the U.S. Treasury,
f o r the purpose of financing S D R certificate acquisitions or f o r
financing e x c h a n g e stabilization operations.
(A) Gold Certificates
T h e Secretary of the Treasury is authorized to issue gold certificates to the System to monetize gold held by the U.S. Treasury.
P a y m e n t f o r the gold certificates by the Reserve Banks is m a d e by
crediting equivalent a m o u n t s in dollars into the account established f o r the U.S. Treasury. T h e s e gold certificates held by the
Reserve B a n k s are required to b e backed by the gold of the U.S.
Treasury. T h e U.S. Treasury may reacquire the gold certificates at
any time, and the Reserve B a n k s must deliver them to the U.S.
Treasury. At such time, the U.S. T r e a s u r y ' s account is charged
and the Reserve B a n k s ' gold certificate account is lowered. The
value of gold f o r purposes of backing the gold certificates is set by
law at $ 4 2 % a fine troy ounce.
(C) Loans to Depository Institutions
T h e Depository Institutions Deregulation and M o n e t a r y Control
Act of 1980 provides that all depository institutions that maintain
reservable transaction accounts or nonpersonal time deposits, as
defined in Regulation D issued by the B o a r d of Governors, h a v e
b o r r o w i n g privileges at the discretion of the Reserve B a n k s .
Borrowers execute certain lending agreements and deposit sufficient collateral before credit is extended. L o a n s are evaluated f o r
collectibility, and currently all are considered collectible and fully
collateralized. If any loans w e r e d e e m e d to be uncollectible, an
appropriate reserve would b e established. Interest is recorded on
the accrual m e t h o d and is charged at the discount rate established
at least every fourteen days by the Boards of Directors of the
Reserve Banks, subject to review by the Board of Governors.
However, Reserve B a n k s retain the option to i m p o s e a surcharge
a b o v e that rate in certain circumstances.
(D) U.S. Government and Federal Agency Securities and
Investments Denominated in Foreign Currencies
T h e Federal O p e n M a r k e t C o m m i t t e e ( F O M C ) is c o m p o s e d of
m e m b e r s of the Board of Governors, the president of the Federal
Reserve B a n k of N e w York ( F R B N Y ) , and, on a rotating basis,
f o u r other Reserve B a n k presidents. T h e F O M C has designated
the F R B N Y to execute o p e n market transactions on its behalf. T h e
F O M C establishes policy regarding open market operations, oversees these operations, and issues authorizations and directives to
the F R B N Y for its execution of transactions. Authorized transaction types include direct purchases and sales of securities, m a t c h e d
s a l e - p u r c h a s e transactions, and the purchase of securities u n d e r
a g r e e m e n t s for repurchase. T h e s e transactions are conducted in
U.S. g o v e r n m e n t and federal agency securities.
Specifically, the F R B N Y provides or absorbs reserve deposits
of depository institutions by purchasing or selling g o v e r n m e n t
securities respectively in the o p e n market. W h i l e the application
of current market prices to the securities currently held by the
Reserve B a n k s may result in values substantially a b o v e or b e l o w
their carrying values, these unrealized c h a n g e s in value would
h a v e no necessary effect on the quantity of reserves available to
the banking system or on the prospects f o r f u t u r e Reserve B a n k
earnings or capital.
In addition to conducting outright sales and purchases of securities, F R B N Y is also authorized by the F O M C to enter into
matched s a l e - p u r c h a s e transactions. T h e s e are generally overnight transactions in w h i c h F R B N Y sells a security and buys it
Combined Financial Statements of the Federal Reserve Banks
back the next day at the rate specified at the commencement of the
transaction. These transactions are accounted for as separate sale
and purchase transactions. At December 31, 1995, matched salepurchase transactions involving U.S. government securities with a
par value of $12.3 billion were outstanding.
In addition to authorizing and directing operations in the
domestic securities market, the FOMC authorizes and directs the
FRBNY to execute operations in foreign exchange markets for
major currencies and to invest the resulting balances, to the extent
possible, in assets with maturities of twelve months or less.
Balances and changes in balances arise from transactions to
counter disorderly conditions in exchange markets and other
needs specified by the FOMC in carrying out the System's central
bank responsibilities.
The above activities result in income for the Reserve Banks.
Although the resulting portfolio generates interest income and the
transactions can result in gains or losses when holdings are sold
prior to maturity, decisions regarding the securities and foreign
currencies, including their purchase and sale, are motivated by
monetary policy objectives rather than profit. Accordingly, earnings and any gains or losses resulting from the sales of such
currencies and securities are incidental to the open market operations and do not motivate its activities or policy decisions.
In order to ensure the effective conduct of open market operations, the FOMC authorizes the Reserve Banks to lend U.S.
government securities held in SOMA to U.S. government securities dealers and to banks participating in U.S. government securities clearing arrangements conducted through a Reserve Bank,
under such instructions as the FOMC may specify from time to
time. At December 31, 1995, U.S. government securities with a
par value of $1.1 billion were loaned. These securities-lending
transactions are fully collateralized by other U.S. government
securities. It is the FOMC's policy to take possession of the
collateral in amounts in excess of the market values of the
securities loaned. The market values of the collateral and the
securities loaned are monitored by the Reserve Banks on a daily
basis, with additional collateral obtained as necessary. The securities lent continue to be carried in SOMA. Income earned by the
Reserve Banks on securities-lending transactions is reported as
"Other income."
In accordance with the Federal Reserve Act, and as further
explained in note 3(F), all domestic securities and investments
denominated in foreign currencies are available as collateral for
net Federal Reserve notes outstanding. At December 31, 1995,
securities with a par value of $379.7 billion were pledged as
collateral.
(E) Bank Premises and Equipment
Bank premises and equipment are stated at cost less accumulated
depreciation. Depreciation is calculated on a straight-line basis
over estimated useful lives of assets ranging from two to fifty
years. New assets, major alterations, renovations, and improvjments are capitalized at cost as additions to the asset accounts.
Maintenance, repairs, and minor replacements are charged to
operations in the year incurred.
(F) Federal Reserve Notes
Federal Reserve notes are the circulating currency of the United
States. These notes are issued through the various Federal Reserve
agents to the Reserve Banks upon deposit with such agents of
certain classes of collateral security, typically U.S. government
785
securities. These notes are identified as issued to a specific
Reserve Bank. The Federal Reserve Act provides that the collateral security tendered by the Reserve Bank to the Federal Reserve
agent must be equal to the sum of the notes applied for by such
Reserve Bank. The collateral value is equal to the par value of the
securities tendered. The Board of Governors may, at any time, call
upon a Reserve Bank for additional security to adequately collateralize the Federal Reserve notes. To satisfy the obligation to
provide sufficient collateral for its outstanding Federal Reserve
notes, the Reserve Banks have entered into an agreement that
provides that certain assets of the Reserve Banks are jointly
pledged as collateral for the Federal Reserve notes of all Reserve
Banks. In the event that this collateral is insufficient, the Act
provides that Federal Reserve notes become a first and paramount
lien on all the assets of the Reserve Banks. Finally, as obligations
of the United States, Federal Reserve notes are backed by the full
faith and credit of the U.S. government. The Federal Reserve
notes outstanding, net account represents Federal Reserve notes
reduced by cash held in the vaults of the Reserve Banks.
(G) Capital Paid-in
The Federal Reserve Act requires that each member bank subscribe to the capital stock of the Reserve Bank in an amount equal
to 6 percent of the capital and surplus of the member bank. As a
member bank's capital and surplus changes, its holdings of the
Reserve Bank's stock must be adjusted. Member banks are those
state-chartered banks that choose to join the System and all
national banks. Currently, only one-half of the subscription is
paid-in and the remainder is subject to call. These shares are
nonvoting with a par value of $100. They may not be transferred
or hypothecated.
By law, each member bank is entitled to receive an annual
dividend of 6 percent on the paid-in capital stock. This cumulative
dividend is paid semiannually. A member bank is liable for
Reserve Bank liabilities up to twice the par value of stock subscribed by it.
(H) Surplus
The Board of Governors requires Reserve Banks to maintain a
surplus equal to the amount of capital paid-in as of December 31
of the prior year. This amount is intended to provide additional
capital and reduce the possibility that the Reserve Banks would be
required to call on member banks for additional capital. Reserve
Banks are required by the Board of Governors to transfer to the
U.S. Treasury excess earnings, after providing for the costs of
operations, payment of dividends, and reservation of an amount
necessary to equate surplus with capital paid-in, as payment of
interest on Federal Reserve notes outstanding. In the event of
losses, payments to the U.S. Treasury are suspended until such
losses are recovered through subsequent earnings. Weekly payments to the U.S. Treasury vary significantly.
(I) Cost of Unreimbursed Treasury Services
Reserve Banks are required by the Federal Reserve Act to serve as
fiscal agents and depositories of the United States. By statute, the
Department of the Treasury is permitted, but not required, to pay
for these services. The costs of providing fiscal agency and
depository services to the Treasury Department that have been
billed but will not be paid are reported as the "Cost of unreimbursed Treasury services."
786
Federal Reserve Bulletin • August 1996
(J) Accounting Change
Effective January 1, 1995, the Financial Accounting Manual was
changed to require that Reserve Banks use the accrual method of
accounting to recognize the obligation to provide benefits to
former or inactive employees consistent with Statement of Financial Accounting Standards (SFAS) No. 112, "Employers'
Accounting for Postemployment Benefits." Prior to 1995, the
Reserve Banks recognized costs for postemployment benefits
when paid. The cumulative effect of this change in accounting for
benefits was recognized by the Reserve Banks as a one-time
charge to expense of $54.8 million. Additionally, the Reserve
Banks recognized an increase in 1995 operating expenses of
approximately $4.7 million, net of a one-time credit of $1.5 million that reflects the effect of a special early retirement benefit
offered by one District during 1995.
Effective January 1, 1995, the Reserve Banks also began accruing a liability for employees' rights to receive compensation for
future absences consistent with SFAS No. 43, "Accounting for
Compensated Absences." Prior to 1995, the Reserve Banks recognized these costs when paid. The cumulative effect of this change
in accounting for compensated absences was recognized by the
Reserve Banks as a one-time charge to expense of $19.3 million.
Ongoing operating expenses for the year ended December 31,
1995, were not materially affected by the change in accounting for
these costs.
Effective January 1, 1995, the Reserve Banks began recognizing impairment losses consistent with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of." Prior to 1995, the Reserve Banks did
not recognize impairment losses. The cumulative effect of this
change in accounting for impairment losses was recognized as a
one-time charge to expense of $14.5 million. The impairment loss
represented the impairment in value of certain bank buildings.
Fair value of the buildings was based on management's estimate
of market value. The impairment recognized was a result of
management's intention to relocate and resulted from structural
defects and asbestos. An additional impairment loss was recognized during 1995, as discussed in note 6.
(4) U.S. GOVERNMENT AND FEDERAL AGENCY
SECURITIES
Securities bought outright and held under repurchase agreements
are held in the SOMA at the FRBNY. These securities are
recorded at cost on a settlement-date basis, adjusted for the
amortization of premiums and accretion of discounts. Interest
income is recorded on the accrual method and is reported as
"Interest on U.S. government securities." Gains and losses resulting from sales of securities are determined by the specific identification method and are reported as "Government securities gains,
net."
Securities held at December 31, 1995, that were bought outright were as follows (in thousands):
Par value
Federal agency
U.S. Treasury
Bills
Notes
Bonds
$
2,633,995
183,115,712
151,013,150
44,068,604
Total par value
380,831,461
Unamortized premiums
Unaccreted discounts
4,508,183
(3,477,093)
$381,862,551
Securities held under repurchase agreements at December 31,
1995, were as follows (in thousands):
Par value
Federal agency
U.S. Treasury
$ 1,100,000
12,762,000
Total par value
13,862,000
Unamortized premiums
Unaccreted discounts
902,643
(136,641)
$14,628,002
The maturities of investment securities held at December 31,
1995, that were bought outright were as follows (in thousands):
Par value
Maturities of
securities held
Within 15 days
16 days to 90 days
91 days to 1 year
Over 1 year to 5 years
Over 5 years to 10 years
Over 10 years
Total
U.S.
government
securities
$
Federal
agency
obligations
7,580,018
93,738,368
123,216,569
85,272,558
31,469,096
36,920,857
$ 240,000
474,000
527,295
840,950
526,750
25,000
$378,197,466
$2,633,995
The maturities of all repurchase agreements are fifteen days or less.
(5)
INVESTMENTS D E N O M I N A T E D IN FOREIGN
CURRENCIES
The FRBNY, on behalf of the Reserve Banks, holds foreign
currency deposits and government debt instruments denominated
in foreign currencies with foreign central banks and the Bank for
International Settlements. Investments denominated in foreign
currencies are limited to maturities of one year or less and are
accounted for at cost on a settlement date basis, adjusted for
amortization of premiums and accretion of discounts. Foreign
currency-denominated assets of the Reserve Banks are revalued
monthly at current market exchange rates in order to report these
assets in U.S. dollars, with any gains or losses reported as "Foreign currency gains, net." Interest income is recorded on the
accrual basis and is reported as "Interest on foreign currencies."
These investments are guaranteed as to principal and interest by
the foreign governments or are contracts with the central banks or
the Bank for International Settlements.
During 1995, the FRBNY was authorized to hold balances of,
and to have outstanding spot and forward contracts to receive or
to deliver, the following foreign currencies:
Combined Financial Statements of the Federal Reserve Banks
Austrian schillings
Belgian francs
Canadian dollars
Danish kroner
Pounds sterling
French francs
German marks
Italian lire
Japanese yen
Mexican pesos
Netherlands guilders
Norwegian kroner
Swedish kroner
Swiss francs
In addition, at the direction of the FOMC, the FRBNY is
authorized to maintain reciprocal currency arrangements (F/X
swaps) for SOMA for periods up to a maximum of twelve months
with the following foreign central banks:
Foreign central bank
Austrian National Bank
National Bank of Belgium
Bank of Canada
National Bank of Denmark
Bank of England
Bank of France
German Federal Bank
Bank of Italy
Bank of Japan
Bank of Mexico
Netherlands Bank
Bank of Norway
Bank of Sweden
Swiss National Bank
Bank for International Settlements:
Dollars against Swiss francs
Dollars against authorized European currencies
other than Swiss francs
Amount of arrangement
(millions of dollars
equivalent)
$ 250
1,000
2,000
250
3,000
2,000
6,000
3,000
5,000
6,000'
500
250
300
4,000
600
1,250
1
The swap arrangement with the Bank of Mexico consisted of a regular
$3 billion line and a special temporary $3 billion line. The special line expired
on January 31, 1996. As of December 31, 1995, the Bank of Mexico had
$650 million outstanding under its facility; however, this amount was repaid in
January 1996.
In connection with its foreign currency activities, the FRBNY,
on behalf of the Reserve Banks, enters into contracts that may
involve off-balance-sheet market risk and credit risk because they
may represent contractual commitments involving future settlement. The credit risk is controlled through credit approvals, limits,
and daily monitoring procedures.
Foreign exchange contracts are contractual agreements between
two parties to exchange specified currencies, at a specified price,
on a specified date. Spot foreign contracts normally settle two
days after the trade date, whereas the settlement date on forward
contracts is negotiated between the contracting parties but will
extend beyond two days from the trade date. FRBNY generally
enters into spot contracts, with any forward contracts generally
limited to the second leg of a swap/warehousing transaction. As of
December 31, 1995, the Reserve Banks had no open foreign
exchange contracts except as noted below.
An F/X swap arrangement is a renewable, short-term reciprocal
currency arrangement, generally for up to one year, between two
parties, the FRBNY, on behalf of the Reserve Banks, and an
authorized foreign central bank, who agree to exchange their
currencies up to a prearranged maximum amount and for an
agreed upon period of time. These arrangements give the Federal
Reserve temporary access to the foreign currencies that it needs
for intervention operations to support the dollar or give the partner
foreign central bank temporary access to dollars it needs to
support its own currencies. Drawings under the F/X swap arrangements can be initiated by either the FRBNY or the partner foreign
central banks. The F/X swaps are structured so that the party
787
initiating the transaction (the drawer) bears the exchange rate risk
upon maturity. The FRBNY will generally invest the foreign
currency received under an F/X swap in interest-bearing instruments. As of December 31, 1995, there was an open F/X swap of
$650 million, which was drawn at the direction of a foreign
central bank. Interest income on the resulting foreign currency
holdings is accrued and reported as "Interest on foreign currencies." Unrealized gains and losses on revaluation of the resulting
currency holdings are reported as a component of "Other assets,"
since there is no exchange rate risk to FRBNY at maturity of the
F/X swap.
The FOMC has an agreement to "warehouse" foreign currencies for the U.S. Treasury and the Exchange Stabilization Fund
(ESF). This is an arrangement under which the FOMC agrees to
exchange, at the request of the Treasury, U.S. dollars for foreign
currencies held by the Treasury or ESF over a limited period of
time. The purpose of the warehousing facility is to supplement the
U.S. dollar resources of the Treasury and ESF for financing
purchases of foreign currencies and related international operations. As of December 31, 1995, this facility was $20 billion, with
nothing outstanding.
( 6 ) B A N K PREMISES AND EQUIPMENT
A summary of bank premises and equipment at December 31,
1995, is as follows (in millions):
Bank premises
Land
Buildings
Building machinery and equipment
Construction in progress
Less accumulated depreciation
Bank premises, net
Furniture and equipment
Less accumulated depreciation
$
167
883
231
129
1,410
284
$1,126
$1,192
672
Furniture and equipment, net
$ 520
Bank premises and equipment, net
$1,646
Depreciation expense for the year ended December 31,1995 was
$180 million.
Bank premises and equipment include the following amounts
for leases that have been capitalized (in millions):
Bank premises and equipment
Accumulated depreciation
$92.5
29.0
Capitalized leases, net
$63.5
Certain of the Reserve Banks lease unused space to outside
tenants. Those leases have terms ranging from one to fifteen
years. Rental income from such leases was $16 million in 1995.
Future minimum lease payments under agreements existing at
December 31, 1995, were (in thousands):
1996
1997
1998
1999
2000
Thereafter
$12,953
11,846
10,366
9,225
8,953
19,227
$72,570
During 1995, one Reserve Bank recognized impairment losses
of $16.3 million on the value of bank buildings. Fair value of the
buildings was based on appraised value. The impairment was
788
Federal Reserve Bulletin • August 1996
recognized as a result of m a n a g e m e n t ' s intention to relocate and
resulted f r o m a general decline in real estate values in the area in
w h i c h the buildings w e r e located. This loss is included on the
Statement of I n c o m e as a c o m p o n e n t of " O t h e r expenses."
(7)
tributed by the participating employers, and net pension costs f o r
the period is the required contribution f o r the p e r i o d .
Following is a reconciliation between the p l a n ' s f u n d e d status
and amounts included in the Reserve B a n k s ' balance sheet at
D e c e m b e r 31, 1995 (in millions):
COMMITMENTS
At D e c e m b e r 31, 1995, the Reserve Banks were obligated under
noncancelable leases f o r premises and e q u i p m e n t with terms,
including renewal options, ranging f r o m one to approximately
twenty-eight years. T h e s e leases provide for increased rentals
based u p o n increases in real estate taxes, operating costs, or
selected price indices.
Rental expense u n d e r operating leases f o r certain operating
facilities, warehouses, data processing, and office e q u i p m e n t
(including taxes, insurance, and maintenance w h e n included in
rent), net of sublease rentals, w a s $ 6 4 million in 1995. Certain of
the Reserve B a n k s ' leases h a v e options to renew.
Future m i n i m u m rental p a y m e n t s under capital leases and noncancelable operating leases, net of sublease rentals with terms of
one year or more, at D e c e m b e r 31, 1995, were (in thousands):
1996
1997
1998
1999
2000
Thereafter
Amounts representing interest
Present value of net minimum
lease payments
Accumulated benefit obligation
Vested
Nonvested
Total
Plan assets at fair value, primarily listed stocks and bonds
Less: Actuarial present value of projected benefit obligation
$ 1,679
91
$ 1,770
$ 3,628
(2,130)
Plan assets in excess of projected benefit obligation
1,498
Less: Unrecognized net transition obligation
Unrecognized net gain
Unrecognized prior service cost
Prepaid pension cost
272
606
(156)
$
776
Costs were projected using a 7 percent discount rate. T h e rate
of compensation increase used w a s 5 percent per year and a
9 percent long-term rate of return on plan assets w a s assumed.
The c o m p o n e n t s of the net pension credit f o r 1995 are s h o w n
below (in millions):
Operating
Capital
$18,121
8,087
16,518
14,987
14,375
23,924
$ 4,681
3,878
1,337
122
Service costs—benefits earned during the year
Interest cost on projected benefit obligation
Actual return on plan assets
Net amortization and deferral
Cost of special termination benefits
$
$96,012
$10,018
Net pension (credit)
$(119)
653
$ 9,365
T h e Reserve B a n k s had the following other material c o m m i t ments and long-term obligations at D e c e m b e r 31, 1995:
Contractual c o m m i t m e n t s and long-term obligations totaling
$258.2 million through 1999 f o r the land, construction, relocation, and other costs related to new buildings. A s of
D e c e m b e r 31, 1995, $70.1 million of this amount w a s
recognized.
Contractual c o m m i t m e n t s totaling $81.3 million through 1996 for
the purchase of high-speed currency processing machines.
( 8 ) RETIREMENT AND THRIFT PLANS
49
133
(842)
537
4
T h e net periodic cost f o r 1995 is based on a discount rate of
8.75 percent, average c o m p e n s a t i o n increase rate of 5.5 percent,
and expected long-term rate of return on assets of 9 percent.
E m p l o y e e s of the Reserve B a n k s m a y also participate in the
Federal Reserve S y s t e m ' s Thrift Plan. U n d e r the Thrift Plan,
e m p l o y e e s m a y contribute a percentage of their salaries u p to a
m a x i m u m 19 percent limit as prescribed by the Internal R e v e n u e
Service. M a t c h i n g contributions by the Reserve B a n k s are based
on a fixed percentage of each e m p l o y e e ' s basic contributions.
Currently, the Reserve B a n k s m a t c h 80 percent of the first 6 percent of salary contributed by the employee. T h e Reserve B a n k s '
Thrift Plan contributions totaled $38 million in 1995.
( 9 ) POSTRETIREMENT AND POSTEMPLOYMENT
BENEFITS OTHER T H A N PENSIONS
Substantially all of the Reserve B a n k s ' employees participate in
the Retirement Plan f o r E m p l o y e e s of the System. T h e S y s t e m ' s
plan is a defined benefit plan w h i c h covers employees of the
R e s e r v e Banks, the Board of Governors, and the Plan Administrative Office. Benefits are based on length of service and level of
compensation. F R B N Y acts as the plan sponsor. T h e prepaid
pension cost is reported as a c o m p o n e n t of Other assets. T h e
prepaid pension cost includes a m o u n t s related to Board of Governors participation in the plan.
Contributions to the S y s t e m ' s plan are actuarially determined
and fully f u n d e d by participating employers at amounts prescribed
by the Plan Administrator (with the exception of a mandatory
contribution of 7 percent of salary by employees of the Board of
Governors). N o separate accounting is maintained of assets con-
In addition to the Reserve B a n k s ' defined benefit retirement plan,
e m p l o y e e s w h o have met certain age and length-of-service requirements are eligible f o r both medical benefits and life insurance coverage during retirement. The retiree medical plan is
contributory and provides benefits to retirees, their covered dependents, and beneficiaries. T h e life insurance plan is noncontributory and covers retirees only.
T h e Reserve B a n k s f u n d benefits payable u n d e r the medical
and life insurance plans as due. T h e Reserve B a n k s use a January
1 m e a s u r e m e n t date. T h e following is a reconciliation b e t w e e n the
p l a n ' s f u n d e d status and the amounts recognized in the Reserve
B a n k s ' c o m b i n e d balance sheet as of D e c e m b e r 31, 1995, (in
millions):
Combined Financial Statements of the Federal Reserve Banks
Accumulated postretirement benefit obligation
Retirees and covered spouses
Actives eligible to retire
Other actives and disabled
Total accumulated postretirement benefit obligation
Unamortized net transition obligation
Unrecognized net loss
Unrecognized prior service cost
Accrued postretirement benefit cost
$303.0
54.8
238.5
596.3
0.0
(61.7)
77.4
$612.0
Costs f o r the Reserve B a n k s were projected using a 7 percent
discount rate and the f o l l o w i n g health care cost trend rates. T h e
initial trend rate f o r medical costs f o r 1996 is 10 percent f o r
retirees over sixty-five and f o r retirees under sixty-five with the
ultimate trend rate decreasing to 5.5 percent by 2004. C h a n g i n g
the a s s u m e d health care cost trend rates by 1 percentage point in
each year would c h a n g e the accumulated postretirement benefit
obligation at D e c e m b e r 31, 1995, b y approximately $111.5 million, and the aggregate service and interest cost c o m p o n e n t s of net
periodic postretirement benefit cost recognized as of D e c e m b e r 31
by approximately $12.0 million.
T h e following is a s u m m a r y of the c o m p o n e n t s of net periodic
postretirement cost f o r the year ended D e c e m b e r 31, 1995 (in
millions):
Service cost
Interest cost of accumulated benefit obligation
Net amortization and deferral
Cost of special termination benefits
Net periodic cost
$13.0
42.5
(5.1)
.6
$51.0
789
The R e s e r v e B a n k s began using the accrual method of accounting to recognize the obligation to provide benefits to f o r m e r or
inactive e m p l o y e e s , consistent with S F A S 112, " E m p l o y e r s
A c c o u n t i n g f o r P o s t e m p l o y m e n t Benefits," effective January 1,
1995. Benefits include medical and dental insurance, survivor
income, disability i n c o m e , and those w o r k e r s ' c o m p e n s a t i o n
expenses self-insured by individual R e s e r v e B a n k s . Costs were
projected using the same discount and health care trend rates as
w e r e used f o r p r o j e c t i n g postretirement costs. T h e accrued
p o s t e m p l o y m e n t benefit costs recognized by the R e s e r v e B a n k s at
D e c e m b e r 31, 1995, w e r e $59.6 million. This cost is included as a
c o m p o n e n t of A c c r u e d benefit cost on the Statement of Condition.
Net periodic costs of $13.6 miilion w e r e inciuded in 1995 operating expenses.
(10)
CONTINGENCIES
The Reserve B a n k s are involved in certain legal actions and
claims arising in the ordinary course of business. A l t h o u g h it is
difficult to predict the ultimate o u t c o m e of these actions, in
m a n a g e m e n t ' s opinion, based on discussions with counsel, the
aforementioned litigation and claims will be resolved without
material adverse effect on the financial position of the Reserve
B a n k s or results of operations.
1
Financial and Business Statistics
A3
GUIDE
TO TABULAR
DOMESTIC
FINANCIAL
STATISTICS
Money Stock and Bank Credit
A4
A5
A6
A6
Federal Finance
PRESENTATION
Reserves, money stock, liquid assets, and debt
measures
Reserves of depository institutions, Reserve Bank
credit
Reserves and borrowings—Depository
institutions
Selected borrowings in immediately available
funds—Large member banks
A25
A26
A27
A27
Federal fiscal and financing operations
U.S. budget receipts and outlays
Federal debt subject to statutory limitation
Gross public debt of U.S. Treasury—
Types and ownership
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
Policy Instruments
A7
A8
A9
Federal Reserve Bank interest rates
Reserve requirements of depository institutions
Federal Reserve open market transactions
Federal Reserve Banks
A10 Condition and Federal Reserve note statements
A l l Maturity distribution of loan and security
holdings
Monetary and Credit Aggregates
A12 Aggregate reserves of depository institutions
and monetary base
A13 Money stock, liquid assets, and debt measures
A15 Deposit interest rates and amounts outstanding—
commercial and BIF-insured banks
A16 Bank debits and deposit turnover
A31 New security issues—Tax-exempt state and local
governments and corporations
A32 Open-end investment companies—Net sales
and assets
A32 Corporate profits and their distribution
A33 Domestic finance companies—Assets and
liabilities, and consumer, real estate, and business
credit
Real Estate
A34 Mortgage markets
A35 Mortgage debt outstanding
Consumer Installment Credit
A36 Total outstanding
A36 Terms
Flow of Funds
Commercial Banking Institutions
All
Assets and liabilities, Wednesday figures
Weekly Reporting Commercial Banks—
Assets and liabilities
A19 Large reporting banks
A21 Branches and agencies of foreign banks
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
DOMESTIC
NONFINANCIAL
STATISTICS
Selected Measures
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
A42 Nonfinancial business activity—
Selected measures
A42 Labor force, employment, and unemployment
A43 Output, capacity, and capacity utilization
A44 Industrial production—Indexes and gross value
A46 Housing and construction
A47 Consumer and producer prices
2
Federal Reserve Bulletin • August 1996
DOMESTIC
NONFINANCIAL
STATISTICS-
CONTINUED
Selected
A48 Gross domestic product and income
A49 Personal income and saving
Summary
Securities
Statistics
U.S. international transactions—Summary
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
by Banks in the United
A52
A53
A55
A56
States
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
Holdings
and
Transactions
A60 Foreign transactions in securities
A61 Marketable U.S. Treasury bonds and
notes—Foreign transactions
STATISTICS
A50
A51
A51
A51
Reported
Business
States
A58 Liabilities to unaffiliated foreigners
A59 Claims on unaffiliated foreigners
Measures—Continued
INTERNATIONAL
Reported by Nonbanking
Enterprises in the United
Interest and Exchange
Rates
A61 Discount rates of foreign central banks
A61 Foreign short-term interest rates
A62 Foreign exchange rates
A 6 3 GUIDE
TO STATISTICAL
SPECIAL
TABLES
SPECIAL
TABLE
RELEASES
AND
A64 Terms of lending at commercial banks, May 1996
A 6 8 INDEX
TO STATISTICAL
TABLES
3
Guide to Tabular Presentation
SYMBOLS
c
e
n.a.
n.e.c.
p
r
*
0
. . .
ATS
BIF
CD
CMO
FFB
FHA
FHLBB
FHLMC
FmHA
FNMA
FSLIC
G-7
GENERAL
AND
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
Automatic transfer service
Bank insurance fund
Certificate of deposit
Collateralized mortgage obligation
Federal Financing Bank
Federal Housing Administration
Federal H o m e Loan Bank Board
Federal H o m e Loan Mortgage Corporation
Farmers H o m e Administration
Federal National Mortgage Association
Federal Savings and Loan Insurance Corporation
Group of Seven
G-10
GNMA
GDP
HUD
IMF
10
IPCs
IRA
MMDA
MSA
NOW
OCD
OPEC
OTS
PO
REIT
REMIC
RP
RTC
SAIF
SCO
SDR
SIC
VA
Group of Ten
Government National Mortgage Association
Gross domestic product
Department of Housing and Urban
Development
International Monetary Fund
Interest only
Individuals, partnerships, and corporations
Individual retirement account
Money market deposit account
Metropolitan statistical area
Negotiable order of withdrawal
Other checkable deposit
Organization of Petroleum Exporting Countries
Office of Thrift Supervision
Principal only
Real estate investment trust
Real estate mortgage investment conduit
Repurchase agreement
Resolution Trust Corporation
Savings Association Insurance Fund
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 g o v e r n m e n t " also includes municipalities, special districts, and other political
subdivisions.
A4
DomesticNonfinancialStatistics • August 1996
1.10
RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES
Percent annual rate of change, seasonally adjusted1
1995
1996
1996
Monetary or credit aggregate
Q3
Q4
Q1
Jan.
Feb.
Mar.
Apr.
May
-7.5
-6.6
-8.2
5.8
-1.5
-2.5
-2.4
1.7
-6.9
-7.7
-6.4
2.7
-7.9
-8.5
-6.5
1.5
-16.1
-21.0
-11.5
.4
-16.4
-2.7
-16.3
-4.1
19.2
13.2
19.6
8.8
-11.7
-11.6
-13.2
-.7
-20.5
-15.4
-21.3
1.0
-.4
3.8
6.3
7.3
7.0
-1.5
6.9
8.0
9.1
4.6
-5.1
4.1 r
4.5 r
5.9
4.5
-2.7
5.9 r
1.2'
5.\'
5.4 r
-6.1
4.8
7.4 r
4.0 r
5.3 r
-2.0
5.4 r
10.0 r
4.4 r
1.1'
10.0
11.1'
11.0'
12.5
4.3 r
-3.1
2.0 r
1.8 r
4.5
4.8
-6.6
-1.6
3.5
n.a.
n.a.
5.8
16.9
10.9
12.1
8.3 r
6.3
9.1'
12.5'
9.7
17.9 r
8.6'
28.5 r
12.4 r
8.3 r
4.2 r
.9'
.6
23.1
-6.5
20.4
13.6
9.0
11.0
13.0 r
13.1
4.8 r
19.4
22.6
2.5 r
8.8
28.2
5.0 r
-6.3
16.5
- 1.2 r
19.7
25.2
-4.5r
27.4 r
8.8
-3.5r
8.5 r
4.1
-2.3
19.2
-14.5
23.5
16.7
-7.3
4.r
13.7
-2.8
5.0 r
8.0
-.3
—2.4 r
6.2
-3.0
— 8.7 r
16.0
6.0
.3'
1.6
5.7
-8.7r
-9.5
14.3
- 1.7 r
1.6
4.9
-2.7
-9.5
14.2
30.5
36.9
27.6
16.5
10.3
14.7
27.9
9.0
18.0
15.6
69.2
32.6
21.6
7.4
18.6
-5.0
9.4
-14.6
-6.7
1.3
15.7 r
45.9
56.6'
11.7
11.3 r
-13.5
- 34.9 r
-7.8r
25.6 r
5.4
7.6
4.6
4.7
2.3
5.3
2.1'
6.3 r
-2.0'
1.9'
1.6'
1.0'
11.2'
1.9'
3.0
5.5
Q2
1
2
3
4
Reserves of depository
Total
Required
Nonborrowed.
Monetary base
5
6
7
8
9
Concepts
Ml
M2
M3
L
Debt
of money, liquid assets, and
Nontransaction
10 In M 2 5
11 In M 3 only 6
12
13
14
15
16
17
institutions2
debt4
components
Time and savings
deposits
Commercial banks
Savings, including M M D A s
Small time 7
Large time 8 , 9
Thrift institutions
Savings, including M M D A s
Small time 7
Large time 8
Money market mutual
18 Retail
19 Institution-only
funds
Repurchase agreements and
20 Repurchase agreements 1 0
21 Eurodollars 1 0
Debt
components4
22 Federal
23 Nonfederal
-3.2
-10.3
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 " b r e a k s , " 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 " R e p o r t 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.
M 2 : 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 f u n d s (money funds with minimum initial investments of less than
$50,000). Excludes individual retirement accounts (IRAs) and Keogh balances at depository
institutions and money market funds. Seasonally adjusted M 2 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 f u n d s (money funds with minimum initial investments of
$50,000 or more), (3) R P 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
2.7
-13.0
91.9
16.3
n.a.
n.a.
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 M 2 .
L: M 3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury
securities, commercial paper, and bankers acceptances, net of money market f u n d holdings of
these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, short-term
Treasury securities, commercial paper, and bankers acceptances, each seasonally adjusted
separately, and then adding this result to M3.
Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial
sectors—the federal sector (U.S. government, not including government-sponsored enterprises or federally related mortgage pools) and the nonfederal sectors (state and local
governments, households and nonprofit organizations, nonfinancial corporate and 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 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 f u n d 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 I R A 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
RESERVES O F DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT 1
Millions of dollars
Average of
daily figures
Average of daily figures for week ending on date indicated
Apr.
May
Apr. 17
Apr. 24
May 1
May 8
377,309
2,398
378,891
4,566
380,178
1,983
379,270
5,830
380,152
2,559
417
2,492
180
2,442
503
10
10
57
33
614
31,025
M a y 15
M a y 22
6,126
379,507
529
380,618
1,405
379,272
727
380,634
2,315
2,491
22
2,491
266
2,444
179
2,444
99
2,444
2
2,444
876
24
106
4
24
179
36
21
64
22
78
27
92
26
113
315
31,857
517
31,054
397
32,094
140
32,431
-10
31,968
932
31,937
867
31,832
393
30,143
11,053
10,168
24,221
11,052
10,168
24,281
11,051
10,168
24,343
11,053
10,168
24,278
11,052
10,168
24,292
11,052
10,168
24,306
11,051
10,168
24,320
11,051
10,168
24,334
11,051
10,168
24,348
415.770
297
418,246
312
419,977
276
419,308
319
417,635
319
416,902
292
418,248
306
419,385
265
419,663
265
5,610
7,318
187
5,938
370
12,813
18,709
5,714
196
6,188
362
12,885
16,771
7,655
189
5,800
363
12,950
19,047
8,251
6,053
366
12,898
21,632
8,709
177
6,055
381
12,664
15,048
6,537
189
6,001
368
12,705
18,721
5,673
185
6,037
381
12,930
15,961
365
12,929
17,932
May 8
M a y 15
M a y 22
SUPPLYING RESERVE FUNDS
1 Reserve B a n k credit outstanding
U.S. g o v e r n m e n t securities 2
2
Bought o u t r i g h t — S y s t e m account
3
Held under repurchase agreements
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements
6
Acceptances
Loans to depository institutions
7
A d j u s t m e n t credit
8
Seasonal credit
9
Extended credit
10
Float
11
Other Federal Reserve assets
12 Gold stock
13 Special drawing rights certificate account
14 Treasury currency outstanding
415,263
421,821
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
ABSORBING RESERVE FUNDS
15 Currency in circulation
16 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
17
Treasury
18
Foreign
19
Service-related balances and adjustments . .
20
Other
21 Other Federal Reserve liabilities and capital ..
22 Reserve balances with Federal Reserve B a n k s '
186
5,992
394
13,022
18,515
End-of-month
180
Wednesday
figures
Apr. 17
Apr. 24
May 1
5,127
224
6,006
figures
Apr.
May
415,996
416,892
420,961
427,165
418,328
423,609
377,056
3,896
381,806
381,346
5,704
379,827
13,412
380,316
17,544
379,571
3,701
380,121
6,392
380,134
5,089
380,661
7,903
2,526
1,000
2,444
2,428
1,350
2,491
152
2,491
1,820
2,444
1,250
2,444
2,444
15
2,444
1,867
34
9
21
71
21
71
21
148
78
51
80
23
103
18
124
28
31,447
821
31,728
-341
30,318
336
32,532
302
33,691
-17
32,060
5,190
32,298
573
29,948
62
30,529
11,053
10,168
24,250
11,052
10,168
24,306
11,051
10,168
24,376
11,053
10,168
24,278
11,052
10,168
24,292
11,052
10,168
24,306
11,051
10,168
24,320
11,051
10,168
24,334
11,051
10,168
24,348
422,332
265
419,404
319
417,793
316
417,918
313
419,742
265
420,381
265
421,021
264
11,042
3,757
6,055
360
12,559
14,268
6,237
300
13,148
20,358
15,668
224
5,800
358
12,755
19,758
7,837
210
6,053
370
12,771
36,455
11,967
187
6,055
414
12,239
15,534
5,877
173
6,001
361
12,779
27,508
4,079
229
6,037
376
12,712
19,803
4,906
175
6,006
353
12,805
23,648
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
U.S. government securities 2
2
Bought o u t r i g h t — S y s t e m account
3
Held under repurchase agreements
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements
6
Acceptances
Loans to depository institutions
7
A d j u s t m e n t credit
8
Seasonal credit
9
Extended credit
10
Float
11
Other Federal Reserve assets
12 Gold stock
13 Special drawing rights certificate account
14 Treasury currency outstanding
0
0
0
0
0
0
0
0
436,292
0
1
34
0
0
0
0
0
620
0
0
0
0
0
0
ABSORBING RESERVE FUNDS
15 Currency in circulation
16 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve B a n k s
17
Treasury
18
Foreign
19
Service-related balances and adjustments . .
20
Other
21 Other Federal Reserve liabilities and capital ,
22 Reserve balances with Federal Reserve Banks'
416,261
314
7,021
191
5,928
348
12,714
18,690
166
160
1. A m o u n t s of cash held as reserves are shown in table 1.12, line 2.
2. Includes securities l o a n e d — f u l l y guaranteed by U.S. g o v e r n m e n t securities pledged
with Federal Reserve B a n k s — a n d excludes securities sold and scheduled to be bought back
under matched sale-purchase transactions.
3. Excludes required clearing balances and adjustments to compensate for float.
A5
A6
DomesticNonfinancialStatistics • August 1996
1.12
RESERVES AND BORROWINGS
Depository Institutions 1
Millions of dollars
Prorated monthly averages of biweekly averages
Reserve classification
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks"
Total vault cash 3
Applied vault cash 4
Surplus vault cash 5
Total reserves 6
Required reserves
Excess reserve balances at Reserve Banks 7
Total borrowings at Reserve Banks 8
Seasonal borrowings
Extended credit 9
1993
1994
1995
Dec.
Dec.
Dec.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
29,374
36,818
33,484
3,334
62,858
61,795
1,063
82
31
0
24.658
40,378
36,682
3,696
61,340
60.172
1,168
209
100
0
20,440
42,117
37,460
4,657
57,900
56.622
1,278
257
40
0
20,066
40,576
36,332
4,244
56,397
55,454
943
204
73
0
20,440
42,117
37,460
4,657
57,900
56,622
1,278
257
40
0
17,763
44,790
39,170
5,620
56,934
55,449
1,485
38
7
0
16,792
42,205
36,957
5,248
53,749
52,898
851
35
7
0
18,426
40,968
36,458
4,510
54,884
53,747
1,137
21
10
0
19,181
40,967
36,688
4,278
55,869
54,750
1,120
91
34
0
16,752
41,229
36.393
4,836
53,145
52,274
871
127
105
0
1995
1996
Biweekly averages of daily figures for two week periods ending on dates indicated
1996
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks*
Total vault cash 3
Applied vault cash 4
Surplus vault cash"
Total reserves 6
Required reserves
Excess reserve balances at Reserve Banks 7
Total borrowings at Reserve Banks 8
Seasonal borrowings
Extended credit 9
Jan. 31
Feb. 14
Feb. 28
Mar. 13
Mar. 27
Apr. 10
Apr. 24
May 8
May 22
June 5
15,055
46,042
39,626
6,416
54,681
53,356
1,326
16
5
0
15.546
44,132
38.455
5,677
54,001
53,288
713
24
7
0
17,938
40,326
35,468
4,858
53,406
52,436
970
47
8
0
18,192
41,536
36,845
4,691
55,037
53,926
1,111
15
8
0
18,492
40,438
36,011
4,428
54,502
53,346
1,156
20
12
0
18,954
40,977
36,767
4,210
55,721
54,567
1,154
47
16
0
20,331
40,478
36,417
4,061
56,748
55,629
1,119
122
30
0
16,876 r
42,089
37,190
4,900
54,065 r
53,002
l,063 r
92
71
0
16,946
40,901
36,091
4,810
53.037
52,201
836
129
103
0
16,339
40,976
36,156
4,820
52,495
51,741
754
156
138
0
1. Data in this table also appear in the B o a r d ' 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 " a s - o f " adjustments.
3. Total " l a g g e d " vault cash held by depository institutions subject to reserve
requirements. Dates refer to the maintenance periods during which the vault cash may be used
to satisfy reserve requirements. The maintenance period for weekly reporters ends sixteen
days after the lagged computation period during which the vault cash is held. Before Nov. 25,
1992, the maintenance period ended thirty days after the lagged computation period.
4. All vault cash held during the lagged computation period by " b o u n d " institutions (that
is, those whose required reserves exceed their vault cash) plus the amount of vault cash
applied during the maintenance period by " n o n b o u n d " institutions (that is, those whose vault
cash exceeds their required reserves) to satisfy current reserve requirements.
1.13
5. Total vault cash (line 2) less applied vault cash (line 3).
6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash
(line 3).
7. Total reserves (line 5) less required reserves (line 6).
8. Also includes adjustment credit.
9. Consists of borrowing at the discount window under the terms and conditions established for the extended credit program to help depository institutions deal with sustained
liquidity pressures. Because there is not the same need to repay such borrowing promptly as
with traditional short-term adjustment credit, the money market effect of extended credit is
similar to that of nonborrowed reserves.
SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS
Large Banks'
Millions of dollars, averages of daily figures
1996, week ending Monday
Source and maturity
Apr.
1
2
3
4
5
6
7
8
Federal funds purchased, repurchase agreements, and other
selected
borrowings
From commercial banks in the United States
For one day or under continuing contract
For all other maturities
From other depository institutions, foreign banks and official
institutions, and U.S. government agencies
For one day or under continuing contract
For all other maturities
Repurchase agreements on U.S. government and
agency
securities
Brokers and nonbank dealers in securities
For one day or under continuing contract
For all other maturities
All other customers
For one day or under continuing contract
For all other maturities
1
Apr.
8
Apr.
15
Apr.
22
Apr.
29
83,135
13,693
93,383
15,245
90.606
13,622
87,706
15,649
81,920
17,657
20,235
20,089
23.383
24,078
17,583
17,066
17.877
18,141
24,315
14.939
28,287
33.927
21,031
32,227
35,665
14.188
34.918
18.634
59.288
23,208
May.
6
90,634
May.
13
May.
20
May.
27
17.658
90,281
18,091
87,271
17,719
83,461
18,158
19,054
19,876
26,513
22,613
21,793
19,418
21,270
21,738
21,868
23,296
19,212
37,802
16,707
40,479
19,490
20,268
44,427
24,202
21,354
41,910
38,923
40,445
36,844
34,546
35,314
36,149
37.594
38,331
39,166
13,684
13,150
13,962
13,732
14,125
14,259
14,130
65,123
64.862
64,377
68,117
74,721
68,708
65,644
65,153
27,200
26.093
25,851
26,548
29,922
26,396
26,432
25,647
federal
MEMO
Federal funds loans and resale agreements in immediately
available funds in maturities of one day or under
continuing
contract
9 To commercial banks in the United States
10 To all other specified customers"
1. Banks with assets of $4 billion or more as of Dec. 31, 1988.
Data in this table also appear in the B o a r d ' s H.5 (507) weekly statistical release. For
ordering address, see inside front cover.
2. Brokers and nonbank dealers in securities, other depository institutions, foreign banks
and official institutions, and U.S. government agencies,
Policy Instruments
1.14
A7
FEDERAL RESERVE BANK INTEREST RATES
Percent per year
Current and previous levels
On
7/5/96
On
7/5/96
Previous rate
Boston
New York. . . .
Philadelphia . .
Cleveland
Richmond. . . .
Atlanta
2/1/96
1/31/96
1/31/96
1/31/96
2/1/96
1/31/96
Chicago
St. Louis
Minneapolis . .
Kansas City . .
Dallas
San Francisco.
2/1/96
2/5/96
1/31/96
2/1/96
1/31/96
1/31/96
Extended credit
Seasonal credit"
Adjustment credit
Federal Reserve
Bank
On
7/5/96
Effective date
7/5/96
7/5/96
7/5/96
7/5/96
Range of rates for adjustment credit in recent years
Range (or
level)—All
F.R. Banks
F.R. Bank
of
N.Y.
9
20
May 11
1V
3
July
10
Aug.
Sept. •>•>
Oct. 16
?0
Nov. 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
6.5
6.5
7
7
7.25
7.25
7.75
8
8.5
8.5
9.5
9.5
1979—July 20
Aug. 17
->0
Sept. 19
10
10-10.5
10.5
10.5-11
11
11-12
12
1981—Nov.
In effect Dec. 31, 1977
1978—Jan.
>\
Oct.
8
10
15
19
79
May
<0
June 13
16
July 98
1980—Feb.
>9
Sept. 96
Nov. 17
Dec. 5
1981—May
5
8
Range (or
level)—All
F.R. Banks
10
10.5
10.5
11
11
12
12
12-13
13
12-13
12
11-12
11
10-11
10
11
12
12-13
13
13-14
13
13
14
13
12
11
11
10
10
11
12
13
13
14
14
Dec.
2
6
4
1982—July 20
23
Aug. 2
3
16
27
30
Oct. 12
13
Nov. 22
26
Dec. 14
15
17
1984—Apr.
11.5-12
11.5
11-11.5
11
10.5
10-10.5
10
9.5-10
9.5
9-9.5
9
8.5-9
8.5-9
8.5
13
13
12
11.5
11.5
11
11
10.5
10
10
9.5
9.5
9
9
9
8.5
8.5
8.5-9
9
8.5-9
8.5
8
1985—May 20
24
7.5-8
7.5
7.5
7.5
1986—Mar.
7-7.5
7
6.5-7
6.5
7
7
6.5
6.5
7
10
Apr. 21
23.
July 11
Aug. 21
22
1987—Sept.
4
11
6
9 ... .
11
6-6.5
6.5
6.5
6.5
1989—Feb. 24 . . . .
27 . . . .
6.5-7
7
7
7
1988—Aug.
1990—Dec. 19 . . . .
1991—Feb.
1...
4 ...
Apr. 30 . . .
May 2 . . .
Sept. 13
17
Nov. 6 . . .
8.5
8.5
6
5.5-6
5.5
5.5
5.5
5.5-6
6
6
6
.
.
.
.
.
1 ....
Dec. 20 . . . .
24 . . . .
6.5
6.5
6-6.5
6
5.5-6
5.5
5-5.5
5
4.5-5
4.5
3.5^.5
3.5
6
6
5.5
5.5
5
5
4.5
4.5
3.5
3.5
2 ... .
3-3.5
3
3
3
1994—May 17
18
Aug. 16
18
Nov. 15
17 . . . .
3-3.5
3.5
3.5—4
4
1992—July
9
13
Nov. 21
26
Dec. 24
1. Available on a short-term basis to help depository institutions meet temporary needs for
funds that cannot be met through reasonable alternative sources. The highest rate established
for loans to depository institutions may be charged on adjustment credit loans of unusual size
that result from a m a j o r operating problem at the borrower's facility.
2. Available to help relatively small depository institutions meet regular seasonal needs for
funds that arise from a clear pattern of intrayearly movements in their deposits and loans and
that cannot be met through special industry lenders. The discount rate on seasonal credit takes
into account rates charged by market sources of funds and ordinarily is reestablished on the
first business day of each two-week reserve maintenance period; however, it is never less than
the discount rate applicable to adjustment credit.
3. May be made available to depository institutions when similar assistance is not
reasonably available from other sources, including special industry lenders. Such credit may
be provided when exceptional circumstances (including sustained deposit drains, impaired
access to money market funds, or sudden deterioration in loan repayment performance) or
practices involve only a particular institution, or to meet the needs of institutions experiencing
difficulties adjusting to changing market conditions over a longer period (particularly at times
of deposit disintermediation). T h e discount rate applicable to adjustment credit ordinarily is
charged on extended-credit loans outstanding less than thirty days; however, at the discretion
13-14
13
12
Range (or
level)—All
F.R. Banks
F.R. Bank
of
N.Y.
1 ....
4.75
3.5
3.5
4
4
4.75
4.75
4.75-5.25
5.25
5.25
5.25
1996—Jan. 31
Feb. 5 . . . .
5.00-5.25
5.00
5.00
5.00
In effect July 5, 1996
5.00
5.00
1995—Feb.
1 ....
9 ... .
4-4.15
of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a
flexible rate somewhat above rates charged on market sources of funds is charged. The rate
ordinarily is reestablished on the first business day of each two-week reserve maintenance
period, but it is never less than the discount rate applicable to adjustment credit plus 50 basis
points.
4. For earlier data, see the following publications of the Board of Governors: Banking and
Monetary Statistics, 1914-1941,
and 1941-1970;
and the Annual Statistical Digest.
19701979.
In 1980 and 1981, the Federal Reserve applied a surcharge to short-term adjustment-credit
borrowings by institutions with deposits of $500 million or more that had borrowed in
successive weeks or in more than four weeks in a calendar quarter. A 3 percent surcharge was
in effect from Mar. 17, 1980, through May 7, 1980. A surcharge of 2 percent was reimposed
on Nov. 17, 1980; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and to
4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981,
and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the
surcharge was changed from a calendar quarter to a moving thirteen-week period. The
surcharge was eliminated on Nov. 17, 1981.
A8
DomesticNonfinancialStatistics • August 1996
1.15
RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS 1
Requirement
Type of deposit
1
Net transaction
accounts2
$0 million-$52.0 million 3
1. R e q u i r e d reserves must be held in the f o r m of deposits with Federal R e s e r v e B a n k s
or vault cash. N o n m e m b e r institutions may m a i n t a i n reserve balances with a Federal
R e s e r v e B a n k indirectly, o n a p a s s - t h r o u g h basis, with certain a p p r o v e d institutions. For
p r e v i o u s reserve requirements, see earlier editions of the Annual Report or the Federal
Reserve
Bulletin.
U n d e r the M o n e t a r y C o n t r o l Act of 1980, depository institutions
include c o m m e r c i a l banks, mutual savings banks, savings and loan associations, credit
unions, agencies and branches of f o r e i g n 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, money market deposit accounts ( M M D A s ) and similar accounts
subject to the rules that permit no more than six preauthorized, automatic, or other transfers
per month (of which no more than three may be by check, draft, debit card, or similar order)
are savings deposits, not transaction accounts.
3. T h e 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 Dec. 19, 1995, the amount was decreased from $54.0
million to $52.0 million.
Under the G a r n - S t 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
Percentage of
deposits
Effective date
3
10
12/19/95
12/19/95
0
12/27/90
0
12/27/90
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. N o
corresponding adjustment is m a d e in the event of a decrease. T h e exemption applies only to
accounts that would be subject to a 3 percent reserve requirement. Effective Dec. 19, 1995,
the exemption was raised f r o m $4.2 million to $4.3 million.
4. The reserve requirement was reduced f r o m 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 '/2 years was reduced from 3 percent to 1 l /l 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 1Vi years was reduced f r o m 3
percent to zero on Jan. 17, 1991.
The reserve requirement on nonpersonal time deposits with an original maturity of 1 l/l
years or more has been zero since Oct. 6, 1983.
6. The reserve requirement on Eurocurrency liabilities was reduced f r o m 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 [/2 years (see note 5).
Policy Instruments
A9
1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS'
Millions of dollars
1996
1995
Type of transaction
and maturity
1993
1994
1995
Oct.
U.S. TREASURY
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Dec.
Jan.
Feb.
Mar.
Apr.
SECURITIES
Outright transactions (excluding
transactions)
Treasury bills
Gross purchases
Gross sales
Exchanges
Redemptions
Others within one year
Gross purchases
Gross sales
Maturity shifts
Exchanges
Redemptions
One to five years
Gross purchases
Gross sales
Maturity shifts
Exchanges
Five to ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
More than ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
All maturities
Gross purchases
Gross sales
Redemptions
matched
Matched
transactions
25 Gross purchases
26 Gross sales
Repurchase
agreements
27 Gross purchases
28 Gross sales
29 Net change in U.S. Treasury securities
FEDERAL AGENCY
Nov.
17,717
0
332,229
0
17,484
0
376,277
0
10,932
0
398,487
900
1,350
0
29,397
900
4,271
0
39,057
0
0
0
31,535
0
0
0
31,476
0
0
0
39,332
0
0
0
30,556
0
88
0
32,218
0
1,223
0
31,368
-36,582
0
1,238
0
0
-21,444
0
390
0
0
0
0
0
0
1,745
-2,049
0
0
0
6,108
-4,937
0
390
0
0
0
0
0
0
2,048
-3,287
1,228
0
0
2,746
-7,575
0
0
0
0
0
0
35
0
3,511
-4,824
787
10,350
0
-27,140
0
9,168
0
-6,004
17,801
4,966
0
0
0
0
0
-1,745
2,049
0
0
-5,292
3,237
2,317
0
0
0
0
0
-2,048
3,287
0
0
-1,908
5,175
0
0
0
0
1,899
0
3,511
4,824
4,168
0
0
0
3,818
0
-3,145
2,903
1,239
0
0
0
0
0
0
0
400
0
-816
1,700
0
0
0
0
0
0
0
0
0
0
-818
1,500
0
0
0
0
479
0
0
0
3,457
0
0
0
3,606
0
-918
775
3,122
0
0
0
0
0
0
0
0
0
0
0
1,884
0
0
0
0
0
0
0
0
0
-20
900
0
0
0
0
1,065
0
0
0
36,915
0
767
35,314
0
2,337
20,649
0
2,376
1,350
0
1,385
4,671
0
0
4,591
0
0
0
0
1,228
0
0
0
0
0
0
3,566
0
787
1,475,941
1,475,085
1,700,836
1,701,309
2,197,736
2,202,030
216,755
213,161
226,340
228,419
227,858
228,071
260,425
259,186
274,290
275,979
251,623
251,086
253,482
251,510
475,447
470,723
309,276
311,898
331,694
328,497
28,825
32,980
44,569
39,876
34,325
28,546
16,040
28,802
6,230
6,230
31,602
27,706
48,869
50,345
41,729
29,882
17,175
-597
7,285
10,157
-12,751
-1,689
4,433
3,274
0
0
774
0
0
1,002
0
0
1,303
0
0
83
0
0
120
0
0
58
0
0
0
0
0
0
0
0
108
0
0
82
35,063
34,669
52,696
52,696
36,851
36,776
3,740
3,605
3,763
3,973
2,888
1,788
9,793
10,893
765
765
5,640
4,640
2,372
3,372
-380
-1,002
-1,228
52
-330
1,042
-1,100
0
892
-1,082
41,348
28,880
15,948
-545
6,955
11,199
-13,851
-1,689
5,325
2,192
OBLIGATIONS
Outright
transactions
30 Gross purchases
31 Gross sales
32 Redemptions
Repurchase
agreements
33 Gross purchases
34 Gross sales
35 Net change in federal agency obligations
36 Total net c h a n g e in System O p e n M a r k e t A c c o u n t . . .
1. Sales, redemptions, and negative figures reduce holdings of the System Open Market
Account; all other figures increase such holdings.
A10
1.18
DomesticNonfinancialStatistics • August 1996
FEDERAL RESERVE BANKS
Condition and Federal Reserve Note Statements'
Millions of dollars
Account
May
1
May
8
Wednesday
End of month
1996
1996
May
15
May
22
May
29
Mar.
31
Apr.
30
May
31
Consolidated condition statement
ASSETS
1
2
Gold certificate account
Special drawing rights certificate account
3
11,051
10,168
538
11,053
10,168
579
11,052
10,168
574
11,051
10,168
552
161
43
93
155
0
0
0
0
0
0
0
0
2,444
1,867
2,428
2,526
2,444
2,428
850
1,000
0
1,350
11,051
11,052
10,168
574
11,051
10,168
11,051
10,168
579
575
10,168
569
92
0
101
0
126
0
142
0
0
0
0
0
2,444
1,250
2,444
620
2,444
15
6
Loans
To depository institutions
Other
Acceptances held under repurchase agreements
7
8
Federal agency
obligations
Bought outright
Held under repurchase agreements
9
Total U.S. T r e a s u r y securities
383,272
386,513
385,223
388,564
385,154
380,952
381,806
387,050
379,571
183,026
380,121
183,576
380,134
380,661
184,116
381,789
185,244
150,102
46,443
150,102
46,443
150,102
46,443
150,102
150,102
377,056
183,202
148,885
381,806
185,262
150,102
381,346
184,801
150,102
13
14
Bought outright*
Bills
Notes
Bonds
Held under repurchase agreements
44,969
46,443
6,392
5,089
46,443
7,903
46,443
3,701
3,365
3,896
0
46,443
5,704
15
Total l o a n s a n d securities
387,058
389,678
387,808
393,017
388,593
384,521
384,343
390,983
16
Items in process of collection
Bank premises
6,450
1,158
11,677
1,161
6,268
1,171
5,388
8,200
1,170
4,197
1,150
8,452
1,158
4,007
1,171
19,706
19,713
11,344
19,721
19,985
19,705
19,561
9,306
19,729
9,585
19,737
11,131
9,693
10,333
10,760
9,538
447,297
455,372
446,068
450,678
449,151
441,986
446,211
447,032
394,498
396,265
396,887
397,505
400,169
392,903
394,236
398,773
34,285
40,424
30,924
35,245
28,579
32,301
31,975
30,901
21,716
34,013
26,241
29,811
22,660
20,407
26,685
11,967
187
414
5,877
173
4,079
229
4,906
191
11,042
166
3,757
160
361
376
175
353
5,381
180
357
24,740
7,021
348
360
300
6,275
4,064
5,904
5,545
4,226
5,123
4,217
4,069
7,441
4,153
4,261
4,061
4,210
4,542
440,523
433,534
437,713
438,426
4,154
4
5
10
11
1?
17
18
19
Other assets
Denominated in foreign currencies 3
All other 4
20
Total assets
21
Federal Reserve notes
183,589
1,171
LIABILITIES
22
Total deposits
26
Depository institutions
U.S. Treasury—General account
Foreign—Official accounts
Other
27
28
Deferred credit items
Other liabilities and accrued dividends 5
23
24
25
29
Total liabilities
30
31
32
Capital paid in
Surplus
Other capital accounts
33
Total liabilities a n d c a p i t a l a c c o u n t s
34
Marketable U.S. Treasury securities held in custody for
foreign and international accounts
CAPITAL
4,328
7,622
439,122
446,921
437,583
442,091
4,023
4,020
3,966
4,050
3,966
469
4,100
3,966
521
4,100
3,966
562
4,037
3,966
449
4,023
3,957
465
518
3,960
492
447,297
455,372
446,068
450,678
449,151
441,986
446,211
447,032
549,259
551,297
553,043
550,963
553,973
550,496
550,662
556,832
507,928
514,098
ACCOUNTS
3,957
195
MEMO
Federal Reserve note statement
114,102
114,435
116,120
513,943
113,774
506,144
113,404
113,241
113,691
115,325
394,498
396,265
396,887
397,505
400,169
392,903
394,236
398,773
38
11,052
11,051
11,051
11,051
11,051
11,053
11,052
11,051
39
10,168
10,168
10,168
10,168
10,168
10,168
10.168
10,168
0
0
375,046
0
375,668
0
0
0
0
373,278
376,286
378,950
371,682
373,017
0
377,554
394,498
396,265
396,887
397,505
400,169
392,903
394,236
398,773
35
36
37
Federal Reserve notes outstanding (issued to Banks)
LESS: Held by Federal Reserve Banks
Federal Reserve notes, net
Collateral held against notes, net
Gold certificate account
Special drawing rights certificate account
4f Other eligible assets
4 1 U.S. Treasury and agency securities
42
Total c o l l a t e r a l
507,902
510,367
1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly statistical
release. For ordering address, see inside front cover.
2. Includes securities loaned—fully guaranteed by U.S. Treasury securities pledged with
Federal Reserve Banks—and excludes securities sold and scheduled to be bought back under
matched sale-purchase transactions.
511,322
513,625
3. Valued monthly at market exchange rates.
4. Includes special investment account at the Federal Reserve Bank of Chicago in Treasury
bills maturing within ninety days.
5. Includes exchange-translation account reflecting the monthly revaluation at market
exchange rates of foreign exchange commitments.
Federal Reserve Banks
1.19
FEDERAL RESERVE BANKS
All
Maturity Distribution of Loan and Security Holding
Millions of dollars
Type of holding and maturity
May 1
Wednesday
End of month
1996
1996
May 8
May 15
M a y 22
May 29
Mar. 31
Apr. 3 0
M a y 31
1 Total l o a n s
92
101
126
142
161
43
92
156
2 Within fifteen days'
3 Sixteen days to ninety days
36
56
37
64
52
74
135
7
148
12
36
7
59
33
75
80
4 Total U.S. T r e a s u r y securities
383,349
386,513
385,223
388,564
385,154
377,056
381,806
381,346
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
21,349
87,527
111,381
91,995
32,299
38,721
20,117
89,053
114,327
91,995
32,299
38,721
19,563
84,416
117,906
91,676
32,941
38,721
23,838
86,962
114,426
91,676
32,941
38,721
20,249
92,031
109,536
91,676
32,941
38,721
8,963
99,039
109,875
89,228
32,151
37,801
15,945
91,464
111,381
91,995
32,299
38,721
2,926
98,950
116,114
91,694
32,941
38,721
11 Total f e d e r a l a g e n c y o b l i g a t i o n s
3,694
3,064
2,459
4,311
3,278
2,526
2,443
2,428
12
13
14
15
16
17
1,250
685
731
512
492
25
620
841
575
512
492
25
31
845
575
512
472
25
2,215
513
575
512
472
25
1,222
473
575
512
472
25
280
569
600
526
527
25
154
685
577
512
492
25
372
473
575
512
472
25
5
6
7
8
9
10
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.
NOTE. Total acceptances data have been deleted f r o m this table because data are no longer
available.
A12
1.20
DomesticNonfinancialStatistics • August 1996
AGGREGATE RESERVES O F DEPOSITORY INSTITUTIONS AND MONETARY BASE 1
Billions of dollars, averages of daily figures
1996
1995
1992
Dec.
Item
1993
Dec.
1994
Dec.
1995
Dec.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
55.61
55.57
55.57
54.12
435.17
54.85
54.81
54.81
54.00
433.67
55.73
55.71
55.71
54.59
436.86
55.18
55.09
55.09
54.06
436.60
54.24
54.11
54.11
53.37
436.95
Seasonally adjusted
A D J U S T E D FOR
C H A N G E S IN R E S E R V E
1
2
3
4
5
REQUIREMENTS2
Total reserves 3
Nonborrowed reserves 4
Nonborrowed reserves plus extended credit 5
Required reserves
Monetary base 6
54.37
54.24
54.24
53.21
351.24
60.52
60.44
60.44
59.46
386.88
59.36
59.16
59.16
58.20
418.72
56.36
56.11
56.11
55.09
435.01
56.84
56.59
56.59
55.76
432.74
56.33
56.13
56.13
55.39
433.21
56.36
56.11
56.11
55.09
435.01
Not seasonally adjusted
6
7
8
9
10
Total reserves 7
Nonborrowed reserves
Nonborrowed reserves plus extended credit 3
Required reserves 8
Monetary base 9
56.06
55.93
55.93
54.90
354.55
62.37
62.29
62.29
61.31
390.59
61.13
60.92
60.92
59.96
422.51
58.02
57.76
57.76
56.74
439.03
56.56
56.31
56.31
55.48
431.60
56.57
56.37
56.37
55.63
433.22
58.02
57.76
57.76
56.74
439.03
56.95
56.91
56.91
55.47
436.01
53.80
53.77
53.77
52.95
430.29
54.97
54.95
54.95
53.84
434.85
56.00
55.90 r
55.90 r
54.88
437.07 r
53.30
53.17
53.17
52.43
436.08
56.54
56.42
56.42
55.39
360.90
1.16
.12
62.86
62.78
62.78
61.80
397.62
1.06
.08
61.34
61.13
61.13
60.17
427.25
1.17
.21
57.90
57.64
57.64
56.62
444.45
1.28
.26
56.40
56.15
56.15
55.32
436.34
1.08
.25
56.40
56.19
56.19
55.45
438.19
.94
.20
57.90
57.64
57.64
56.62
444.45
1.28
.26
56.93
56.90
56.90
55.45
441.96
1.49
.04
53.75
53.72
53.72
52.90
436.26
.85
.04
54.88
54.86
54.86
53.75
440.75
1.14
.02
55.87
55.78
55.78
54.75
442.91
1.12
.09
53.15
53.02
53.02
52.27
442.11
.87
.13
N O T A D J U S T E D FOR
C H A N G E S IN R E S E R V E R E Q U I R E M E N T S 1 0
11
12
13
14
15
16
17
Total reserves' 1
Nonborrowed reserves
Nonborrowed reserves plus extended credit 5
Required reserves
Monetary base 1 2
Excess r e s e r v e s ' 3
Borrowings f r o m the Federal Reserve
1. Latest monthly and biweekly figures are available from the Board's H.3 (502) weekly
statistical release. Historical data starting in 1959 and estimates of the effect on required
reserves of changes in reserve requirements are available from the Money and Reserves
Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve
System, Washington, 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 from the
Federal Reserve (line 17).
5. Extended credit consists of borrowing at the discount window under the terms and
conditions established for the extended credit program to help depository institutions deal
with sustained liquidity pressures. Because there is not the same need to repay such
borrowing promptly as with traditional short-term adjustment credit, the money market effect
of extended credit is similar to that of nonborrowed reserves.
6. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally
adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency
component of the money stock, plus (3) (for all quarterly reporters on the " R e p o r t 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 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 " R e p o r t 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 n o
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 " R e p o r t 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 the introduction of contemporaneous reserve requirements in February
1984, currency and vault cash figures have been measured over the computation periods
ending on Mondays.
13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14).
Monetary and Credit Aggregates
1.21
A13
MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES 1
Billions of dollars, averages of daily figures
1996
Item
1992
Dec.
1993
Dec.
1994
Dec.
1995
Dec.
Mar. r
Apr.
May
1,117.3
3,693.9 r
4,642.9 r
5,725.lr
14,015.6 r
1,126.6
3,729.9
4,685.5
5,784.5
14,066.2
1,123.7
3,736. l r
4,692.4 r
5,806.1
14,122.6
1,117.5
3,731.1
4,705.9
n.a.
n.a.
Feb.
Seasonally adjusted
1
2
3
4
5
Measures2
Ml
M2
M3
L
Debt
6
7
8
9
Ml
components
Currency 3
Travelers checks 4
Demand deposits'
Other checkable deposits 6
1,124.9
3,662.6 r
4,576.0 r
5,685.5'
13,871.3
1,024.4
3,438.7
4,187.3
5,075.8
11,881.7
1,128.6
3,494.1
4,249.6
5,164.5
12,516.4
1,148.7
3,509.4
4,319.7
5,303.7
13,153.2
292.9
8.1
339.1
384.2
322.4
7.9
384.3
414.0
354.9
8.5
382.4
402.9
373.2
8.9
389.8
353.0
373.3
8.9
397.4
337.8
375.2
8.9
407.1
335.4
375.9
8.9
406.3
332.6
377.0
8.7
409.7
322.1
2,414.3
748.6
2,365.4
755.6
2,360.7
810.3
2,537.7 r
913.4
2,576.6 r
949.0 r
2,603.3
955.6
2,612.4 r
956.3 r
2,613.6
974.7
Commercial
hanks
12 Savings deposits, including M M D A s
13 Small time deposits 9
14 Large time deposits' 0 , "
754.1
509.3
286.6
785.0
470.4
272.3
751.9
505.4
298.7
775.0
578.5 r
342.4
804.1
580.3 r
346.2
821.0
578.1
354.1
827.0
576.4 r
356.6'
829.8
575.3
362.3
Thrift
institutions
15 Savings deposits, including M M D A s
16 Small time deposits 9
17 Large time deposits' 0
433.0
361.9
67.1
433.8
317.6
61.5
397.0
318.2
64.8
359.5
359.6 r
75.0
360.4
357.r
76.1
362.1
354.5
75.5
366.4
354.0 r
75.6
367.9
353.2
75.0
Money market mutual
18 Retail
19 Institution-only
356.0
199.8
358.7
197.9
388.1
183.7
465.1
227.2
474.7
243.9
487.6
248.3
488.7
245.6
487.4
243.5
128.1
66.9
157.5
66.3
180.8
82.3
177.6
91.2
186.2
96.4 r
184.1
93.6
182.9'
95.6'
196.9
96.9
3,068.6
8,813.1
3,328.3
9,188.1
3,497.6
9,655.6
3,644.6
10,226.7
3,661.7 r
10,353.9 r
3,696.0
10,370.2
3,705.2
10,417.4
n.a.
n.a.
1,115.9
3,722.7
4,675.4
5,785.3
14,023.9
1,130.0
3,749.0'
4,697.3'
5,811.7
14,052.9
1,104.3
3,716.6
4,690.8
n.a.
n.a.
Nontransaction
10 In M 2 7
11 In M 3 only 8
components
funds
Repurchase agreements and
20 Repurchase a g r e e m e n t s ' 2
21 Eurodollars' 2
Eurodollars
Debt
components
22 Federal debt
23 Nonfederal debt
Not seasonally adjusted
Measures2
24 M l
25 M 2
26 M 3
1,150.7
3,682.3 r
4,597. l r
5,715.0 r
13,858.0
1,046.0
3,455.1
4,205.3
5,103.1
11,883.2
1,153.7
3,514.1
4,271.3
5,194.2
12,509.3
1,174.2
3,529.8
4,341.5
5,333.2
13,145.8
295.0
7.8
354.4
388.9
324.8
7.6
401.8
419.4
357.5
8.1
400.1
408.4
376.1
8.5
407.9
358.1
370.8
8.5
388.3
336.0
374.3
8.6
397.5
335.5
375.8
8.6
406.1
339.5
377.5
8.6
399.5
318.7
2,409.1
750.2
2,360.4
757.1
2,355.6
811.7
2,531.5 r
914.8
2,570.8 r
949.6 r
2,606.8
952.7
2,619.0'
948.3'
2,612.3
974.2
Commercial
banks
35 Savings deposits, including M M D A s
36 Small time deposits 9
37 Large time deposits 1 0 , "
752.9
507.8
286.2
784.3
468.2
272.1
751.6
502.5
298.5
775.0
574.5 r
342.3
798.9
579.4 r
344.7
819.0
579.3
352.6
826.0
578.3'
353.9'
827.8
577.4
364.6
Thrift
institutions
38 Savings deposits, including M M D A s
39 Small time deposits 9
40 Large time d e p o s i t s ' 0
432.4
360.9
67.0
433.4
316.1
61.5
396.9
316.4
64.8
359.5
357.1'
75.0
358.1
356.4 r
75.8
361.2
355.3
75.2
365.9
355.2'
75.0
367.0
354.5
75.5
Money market mutual
41 Retail
42 Institution-only
355.1
201.1
358.3
199.4
388.2
185.5
465.4
229.4
478.0
249.6
492.1
248.7
493.5
242.8
485.5
241.1
127.2
68.7
156.6
67.6
179.6
83.4
176.1
91.9
183.5
96. l r
182.3
94.0
182.3'
94.3'
197.2
95.7
3,069.8
8,813.4
3,329.5
9,179.8
3,499.0
9,646.8
3,645.9
10,212.1
3,655.5 r
10,310.3 r
3,698.1
10,325.8
28 Debt
29
30
31
32
MI
components
Currency 3
Travelers checks 4
Demand deposits 5
Other checkable deposits 6
Nontransaction
33 In M 2 7
34 In M 3 only 8
1,103.6
3,674.4 r
4,624. l r
5,714.2 r
13,965.8 r
components
funds
Repurchase agreements and
43 Repurchase agreements' 2
44 Eurodollars' 2
Eurodollars
Debt
components
45 Federal debt
4 6 Nonfederal debt
Footnotes appear on following page.
3,697.6
10,355.3
n.a.
n.a.
A14
DomesticNonfinancialStatistics • August 1996
N O T E S T O TABLE 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 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 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 f u n d s (money funds with minimum initial investments of less than $50,000). Excludes individual retirement accounts (IRAs) and Keogh
balances at depository institutions and money market funds. Seasonally adjusted M2 is
calculated by summing savings deposits, small-denomination time deposits, and retail money
fund balances, each seasonally adjusted separately, and adding this result to seasonally
adjusted M1.
M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more)
issued by all depository institutions, (2) balances in institutional money funds (money funds
with minimum initial investments of $50,000 or more), (31 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 fund balances, RP
liabilities, and Eurodollars, each seasonally adjusted separately, and adding this result to
seasonally adjusted M2.
L: M 3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury
securities, commercial paper, and bankers acceptances, net of money market fund holdings of
these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, short-term
Treasury securities, commercial paper, and bankers acceptances, each seasonally adjusted
separately, and then adding this result to M 3 .
Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial
sectors—the federal sector (U.S. government, not including government-sponsored enterprises or federally related mortgage pools) and the nonfederal sectors (state and local
governments, households and nonprofit organizations, nonfinancial corporate and nonfarm
noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and
corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data,
which are derived from the Federal Reserve Board's flow of 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 f u n d 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.
Monetary and Credit Aggregates
1.22
DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING
Commercial and BIF-insured saving banks 1
1996 r
1995
1993
Dec.
A15
1994 r
Dec.
Sept.
Oct.
Nov.
Dec. r
Jan.
Feb.
Mar.
Apr.
May
Interest rates (annual effective yields) 2
INSURED COMMERCIAL
BANKS
1 Negotiable order of withdrawal accounts
2 Savings deposits 3
3
4
5
6
7
Interest-bearing
time deposits with balances
less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2 Vi years
More than 2Vl years
BIF-INSURED SAVINGS
1.96
2.92
1.92
3.13 r
1.91
3.11
1.93
3.13
1.91
3.10
1.90
3.01
1.91
2.98
1.85
2.91
1.89
2.91
1.88
2.89
2.65
2.91
3.13
3.55
4.28
3.79
4.45
5.12
5.74
6.30
4.10
4.75
5.13
5.32
5.59
4.11
4.75
5.15
5.31
5.56
4.13
4.74
5.11
5.27
5.49
4.10
4.68
5.02
5.17
5.40
4.02
4.57
4.91
5.03
5.26
3.99
4.45
4.79
4.89
5.10
4.02
4.49
4.83
4.94
5.19
4.01
4.51
4.86
5.03
5.28
3.99
4.51
4.89
5.11
5.36
1.87
2.63
1.94
2.87
2.00
2.95
1.98
2.96
1.94
2.99
1.91
2.98
1.85
2.95
1.84
2.92
1.83
2.86
1.84
2.85
1.82
2.84
2.81
3.02
3.31
3.67
4.62
3.80
4.89
5.52
6.09
6.42
4.27
5.07
5.35
5.52
5.73
4.32
5.05
5.31
5.51
5.68
4.43
5.02
5.28
5.47
5.64
4.43
4.95
5.18
5.33
5.46
4.38
4.86
5.06
5.22
5.34
4.26
4.77
4.91
5.10
5.24
4.37
4.76
4.89
5.15
5.24
4.42
4.77
4.91
5.23
5.32
4.49
4.83
4.96
5.25
5.38
of
BANKS4
8 Negotiable order of withdrawal accounts
9 Savings deposits 3
10
11
12
13
14
1.86
2.46
Interest-bearing
time deposits with balances
less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2 x/i years
More than 2Vl years
of
Amounts outstanding (millions of dollars)
INSURED COMMERCIAL
BANKS
15 Negotiable order of withdrawal accounts
16 Savings deposits 3
1/
Personal
Nonpersonal
18
19
20
21
22
23
Interest-bearing
time deposits with balances
less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2 x/i years
More than 2 '/> years
253,568
746,351
585,762
160,589
258,175
745,936 r
585,896 r
160,040 r
257,098 r
753,139 r
588,995
164,144'
248,417
776,466
615,113
161,353
245,749
768,071
612,321
155,750
242,930
784,035
623,110
160,925
218,604
827,666
661,919
165,748
228,736
805,431
640,003
165,428
208,932
839,656
670,277
169,379
29,362
109,050
145,386
139,781
180,461
32,218
96,461
163,282
164,499
192,632
29,794
92,250
189,663 r
204,869
201,006
29,906 r
93,390 r
187,727 r
206,579
199,47 l r
31,093 r
95,513 r
184.7041"
208,315 r
199,389 r
32,170
93,941
183,834
208,601
199,002
33,783
95,350
184,046
212,394
199,254
35,719
97,219
184,095
210,493
198,922
35,377
97,141
186,158
208,915
198,980
34,076
96,064
190.045
208,277
197,797
33,417
96,272
193,043
207,849
196,558
144,011
144,092
150,298
150,101 r
149,647 r
150,067
150,366
149,965
150,496
150,586
150,089
11,191
80,376
77,263
3,113
10,698
68,223
65,396
2,826
10,884
67,726
64,519
3,207
10,789
67,732
64,432
3,300
11,088
68,345
64,932
3,413
11,918
68,643
65,366
3,277
11,139
66,702
63,377
3,325
11,597
67,614
64,524
3,090
11,703
67,276
64,208
3,068
11,492
66,808
63,559
3,249
11,744
67,715
64.199
3,516
2,746
12,974
17,469
16,589
20,501
2,068
10,867
17,484
16,964
20,339
1,656
10,757
23,654
26,558
22,251
1,691
10,790
24,006
26,678
22,411
1,819
11,394
24,833
27,149
22,552
2,001
12,140
25,686
27,482
22,866
2,009
12,334
26,304
26,582
22,449
2,131
13,247
26,863
26,945
21,819
2,140
13,477
26,534
25,934
22,646
2,179
13,911
27,265
25,684
22,526
2,345
13,934
28,079
25,422
22,638
19,791
18,376
21,029
21,042
21,23 l r
21,408
20,827
20,845
20,615
20,553
20,543
BANKS4
25 Negotiable order of withdrawal accounts
26 Savings deposits 3
Personal
27
Nonpersonal
28
29
30
31
32
33
304,901
737,081
580,449
156,633
of
24 IRA and Keogh plan deposits
BIF-INSURED SAVINGS
305,237
767,035
598,276
168,759
Interest-bearing
time deposits with balances
less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2'/? years
More than l'/2 years
34 IRA and Keogh plan accounts
of
1. BIF, Bank Insurance Fund. Data in this table also appear in the Board's H.6 (508)
Special Supplementary Table monthly statistical release. For ordering address, see inside
front cover. Estimates are based on data collected by the Federal Reserve System from a
stratified random sample of about 425 commercial banks and 75 savings banks on the last day
of each month. Data are not seasonally adjusted and include IRA and Keogh deposits and
foreign currency-denominated deposits. Data exclude retail repurchase agreements and deposits held in U.S. branches and agencies of foreign banks.
2. As of October 31, 1994, interest rate data for N O W accounts and savings deposits
reflect a series break caused by a change in the survey used to collect these data.
3. Includes personal and nonpersonal money market deposits.
4. Includes both mutual and federal savings banks.
A16
1.23
Domestic Financial Statistics • August 1996
BANK DEBITS AND DEPOSIT TURNOVER1
Debits are in billions of dollars; turnover is ratio of debits to deposits; monthly data are at annual rates
1996
1995
Bank group, or type of deposit
1993 2
Nov.
Oct.
4 Other checkable deposits 4
5 Savings deposits (including M M D A s ) 5
Jan.
Feb.
Mar.
Seasonally adjusted
DEBITS
Demand
deposits3
1 All insured banks
2
Major N e w York City banks
3
Other banks
Dec.
334,784.1
171,224.3
163,559.7
369,029.1
191,168.8
177,860.3
397,649.3
201,161.4
196,487.9
413,927.0
210,336.6
203,590.4
409,460.9
204,484.0
204,976.9
397,538.3
203,977.5
193,560.8
430,522.2 r
229,379.9
201,142.2'
447,959.6 r
238,537.8
209,421.7 r
422,702.6
224,066.4
198,636.2
3,481.5
3,497.4
3,798.6
3,766.3
4,207.4
4,507.8
4,690.4
5,328.6
4,891.5
5,679.4
4,595.5
5,703.6
4,960.5 r
6,025.9 r
5,034.7
6,397.2 r
5,024.1
6,340.6
785.9
4,198.1
424.6
817.4
4,481.5
435.1
874.1
4,867.3
475.2
907.5
5,269.7
489.2
905.5
5,222.3
496.3
852.7
5,069.7
454.4
917.1
5,368.0
471.4
950.8
5,852.3
486.6
881.0
5,608.2
451.6
11.9
4.6
12.6
4.9
15.4
6.1
18.0
7.1
19.1
7.5
18.6
7.4
20.8
7.7
21.6
8.1
22.1
7.8
DEPOSIT TURNOVER
Demand
deposits3
6 All insured banks
Major
New
York City banks
7
8
Other banks
9 Other checkable deposits 4
10 Savings deposits (including M M D A s ) 5
Not seasonally adjusted
DEBITS
Demand
deposits3
11 All insured banks
12
Major N e w York City banks
Other banks
13
14 Other checkable deposits 4
15 Savings deposits (including M M D A s ) 5
334,899.2
171,283.5
163,615.7
369,121.8
191,226.0
177,895.7
397,657.8
201.182.6
196,475.3
413,547.6
212,506.0
201,041.7
398,219.1
202,744.5
195,474.6
411,802.7
210,780.0
201,022.7
429,314.0 r
227,293.7
202,020.3 r
414,903.0 r
222,007.5
192,895.5 r
442,983.8
236,954.2
206,029.6
3,481.7
3,498.3
3,795.6
3,764.4
4,202.6
4,500.8
4,565.4
5,075.1
4,566.6
5,388.7
4,784.8
6,013.9
5,385.9
6,299.2 r
4,638.6 r
5,790.4 r
5,072.7
6,503.7
786.1
4,197.9
424.8
818.2
4,490.3
435.3
874.6
4,873.1
475.4
895.4
5,292.2
476.7
860.5
5,046.6
462.5
847.5
4,900.9
453.9
895.6
5,109.7
464.5
901.1
5,427.5
459.8
947.0
6,060.5
480.6
11.9
4.6
12.6
4.9
15.3
6.1
17.7
6.8
17.8
7.1
19.0
7.8
22.0
8.1
19.9
7.3
22.2
8.0
DEPOSIT TURNOVER
Demand
deposits3
16 All insured banks
17
Major N e w York City banks
Other banks
18
19 Other checkable deposits 4
20 Savings deposits (including M M D A s ) 5
1. Historical tables containing revised data for earlier periods can be obtained from the
Publications Section, Division of Support Services, Board of Governors of the Federal
Reserve System, Washington, D C 20551.
Data in this table also appear in the Board's G.6 (406) monthly statistical release. For
ordering address, see inside front cover.
2. Annual averages of monthly figures.
3. Represents accounts of individuals, partnerships, and corporations and of states and
political subdivisions.
4. As of January 1994, other checkable deposits (OCDs), previously defined as automatic
transfer to demand deposits (ATSs) and negotiable order of withdrawal ( N O W ) accounts,
were expanded to include telephone and preauthorized transfer accounts. This change
redefined O C D s for debits data to be consistent with O C D s for deposits data.
5. Money market deposit accounts.
Commercial Banking Institutions
1.26
A17
ASSETS AND LIABILITIES OF COMMERCIAL BANKS 1
Billions of dollars
Wednesday figures
Monthly averages
Account
1995
May
1996 r
1995
Nov.
Dec.
Jan.
Feb.
A L L COMMERCIAL
Mar.
1996
Apr.
May
May 8
May 15
May 22
May 29
Seasonally adjusted
B A N K I N G INSTITUTIONS
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
Interbank loans 4
Cash assets 5
Other assets 6
16 Total assets 7
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 nonbanks in the U.S
Net due to related foreign offices
Other liabilities 8
27 Total liabilities
28 Residual (assets less liabilities) 9
3,491.4'
985.7 r
710.7 r
275.0 r
2,505.7
687.8
1,043.8
77.2
966.6
472.9
88.3
213.0
185.6
210.5
223. l r
3,593.1'
gsgxf
714.5
274.5 r
2,604.1
713.6
1,078.1
78.8
999.3
492.9
86.9
232.5'
196.4
216.2
230.9'
3,605.1'
990.7'
710.8
279.8'
2,614.5'
716.6
1,079.3
79.1
1,000.2
495.7
83.7
239.2
196.8
223.7
239.6'
3,631.6
990.1
702.9
287.2
2,641.5
722.5
1,086.2
79.7
1,006.6
500.4
84.9
247.4
204.0
233.1
237.0
3,642.4
995.8
715.8
280.0
2,646.7
725.5
1,089.3
79.9
1,009.4
500.5
85.7
245.6
194.2
219.1
242.6
3,633.5
979.7
705.2
274.5
2,653.7
723.1
1,094.2
79.8
1,014.3
503.6
85.1
247.8
205.4
215.7
241.6
3,649.4
978.6
704.9
273.7
2,670.8
728.5
1,095.8
80.0
1,015.8
506.2
85.6
254.7
212.2
221.6
243.5
3,653.8
985.5
713.5
272.0
2,668.3
732.7
1,095.7
79.8
1,015.9
503.8
81.8
254.2
212.1
218.6
243.8
3,655.2
982.8
715.2
267.6
2,672.4
731.5
1,095.4
79.7
1,015.8
503.6
87.8
254.0
213.8
223.1
245.9
3,650.6
988.7
715.6
273.1
2,661.9
734.5
1,096.1
79.7
1,016.4
502.6
74.6
254.2
215.8
221.6
244.2
3,661.7
986.7
713.4
273.3
2,675.0
734.6
1,096.0
79.6
1,016.3
502.7
85.6
256.1
208.4
222.0
241.4
3,648.2
985.4
712.7
272.7
2,662.9
730.6
1,095.2
79.7
1,015.5
504.8
78.7
253.5
209.1
209.6
238.8
4,053.r
4,180.1 r
4,208.7'
4,249.0
4,241.8
4,239.5
4,269.9
4,271.6
4^81.4
4,275.4
4,276.8
4,249.1
2,570.6
786.7
1,784.0
391.6
1,392.3
677.5
185.3
492.2
241.1'
222.8 r
2,642.1
768.2
1,873.9
423.3
1,450.6
674.7
198.5
476.2
263.5'
228.4'
2,659.2
773.9
1,885.3
421.3
1,464.0
690.5'
198.4
492.2
262.6'
238.7'
2,687.3
783.4
1,903.9
421.7
1,482.1
705.3
208.2
497.1
270.1
231.1
2,681.0
766.6
1,914.4
425.8
1,488.5
691.4
195.5
495.9
276.5
234.4
2,701.5
768.4
1,933.1
428.3
1,504.8
687.2
207.7
479.5
261.4
225.6
2,717.4
771.9
1,945.5
432.5
1,513.0
707.7
209.9
497.8
254.4
233.6
2,716.7
758.4
1,958.2
439.2
1,519.1
707.1
209.5
497.6
255.8
222.8
2,709.5
757.5
1,952.0
434.6
1,517.4
726.1
212.6
513.5
268.2
221.4
2,737.3
778.0
1,959.2
438.4
1,520.8
704.8
213.5
491.4
237.8
227.3
2,714.6
754.6
1,960.1
439.6
1,520.5
702.2
204.8
497.5
265.6
219.2
2,703.0
743.3
1,959.7
443.4
1,516.3
699.6
206.0
493.5
255.1
218.2
3,712.1 r
3,808.6'
3,851.0"
3,893.8
3,8833
3,875.7
3,913.1
3,902-3
3,925.2
3,907.1
3,901.7
3,875.8
341.6 r
371.5'
357.7'
355.2
358.5
363.8
356.8
369.3
356.1
368.3
375.1
373.2
Not seasonally adjusted
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit 2 . . .
Commercial and industrial
Real estate
Revolving h o m e equity
Other
Consumer
Security 3
Other
Interbank loans 4
Cash assets 5
Other assets 6
44 Total assets 7
45
46
47
48
49
50
51
52
53
54
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From nonbanks in the U.S
Net due to related foreign offices
Other liabilities 8
55 Total liabilities
56 Residual (assets less liabilities)'
Footnotes appear on following page.
3,489.8'
991.4'
712.2'
279.2'
2,498.5
692.7
1,041.0
77.1
963.9
471.3
83.8
209.7
179.9
208.4
223.7'
3,599.4'
m f f
712.9
275.0'
2,611.5
711.9
1,083.8
79.3
1,004.5
493.7
88.3'
233.8
199.6
220.3
230.4'
3,612.9'
980.9'
706.2
274.7'
2,632.0'
714.7
1,084.0
79.2
1,004.9
501.5
87.6
244.C
209.2
238.4
239.3'
3,622.5
977.9
697.6
280.3
2,644.6
719.6
1,086.0
79.5
1,006.5
505.0
86.8
247.3
213.0
240.6
237.7
3,634.1
990.9
711.2
279.6
2,643.3
723.6
1,086.2
79.4
1,006.8
501.1
88.7
243.7
196.1
219.9
242.0
3,627.8
984.2
709.6
274.7
2,643.6
727.0
1,088.6
79.1
1,009.5
499.3
85.0
243.7
203.2
208.5
240.1
3,650.5
983.9
711.0
272.9
2,666.6
734.4
1,091.9
79.4
1,012.5
503.4
86.4
250.4
209.2
216.1
241.0
3,650.7
989.9
714.3
275.6
2,660.8
738.2
1,092.7
79.7
1,013.0
502.1
77.7
250.2
205.5
216.0
244.8
3,657.8
992.6
718.1
274.5
2,665.2
739.0
1,092.3
79.6
1,012.8
501.7
83.2
249.0
207.4
214.4
249.6
3,649.5
992.6
715.9
276.7
2,656.9
739.9
1,093.6
79.7
1,013.9
501.2
71.5
250.6
208.5
217.0
245.0
3,649.1
987.6
713.1
274.5
2,661.5
738.9
1,092.1
79.5
1,012.6
501.2
80.0
249.3
198.5
206.3
237.2
3,644.6
988.0
711.9
276.1
2,656.6
735.2
1,092.3
79.6
1,012.7
503.2
74.6
251.4
204.3
226.2
242.2
4,045.0 r
4,193.1 r
4,243.1'
4,257.2
4,235.5
4,222.8
4,260.2
4,260.2
4,272.4
4,263.2
4,234.5
4,260.7
2,560.2
774.4
1,785.8
396.5
1,389.3
676.2
183.0
493.2
244.3'
225.1'
2,658.0
781.7
1,876.3
424.3
1,452.0
683.7
200.6'
483.1
262.6'
230.4'
2,690.4
809.2'
1,881.2
420.3
1,461.0
695.2
211.4'
483.8'
263.8'
233.8'
2,694.0
795.1
1,898.9
418.8
1,480.1
692.2
215.2
477.0
277.2
232.9
2,672.0
759.5
1,912.6
426.4
1,486.1
685.4
197.2
488.2
278.2
234.8
2,687.8
753.6
1,934.2
429.8
1,504.4
678.7
202.7
476.0
262.1
227.1
2,714.3
770.9
1,943.4
432.4
1,511.0
693.3
208.6
484.7
254.7
229.9
2,706.3
746.0
1,960.3
444.6
1,515.7
704.5
206.6
497.9
258.3
225.4
2,697.5
743.3
1,954.2
439.6
1,514.7
718.7
208.8
509.9
263.6
226.0
2,725.3
765.2
1,960.1
443.7
1,516.4
700.6
209.6
491.1
244.0
229.9
2,678.4
717.8
1,960.5
446.2
1,514.3
699.4
199.6
499.8
271.3
219.6
2,713.0
750.5
1,962.4
449.1
1,513.4
698.9
205.6
493.3
260.6
221.6
3,705.8'
3,834.7'
3,883.1 r
3,896.4
3,870.5
3,855.7
3,892.3
3,894.5
3,905.7
3,899.8
3,868.7
3,894.1
360.9
365.0
368.0
365.7
366.6
363.4
365.7
366.5
339.2
358.4
m a
367.1
A18
1.26
DomesticNonfinancialStatistics • August 1996
ASSETS AND LIABILITIES OF COMMERCIAL BANKS 1 —Continued
Billions of dollars
Monthly averages
Account
1995
May
1996 r
1995
Nov.
Wednesday
Dec.
Jan.
Feb.
DOMESTICALLY CHARTERED
Mar.
figures
1996
Apr.
May
May 8
May 15
May 22
May 29
Seasonally adjusted
COMMERCIAL BANKS
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
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
Interbank loans 4
Cash assets 5
Other assets 6
72 Total assets 7
73
74
75
76
77
78
79
80
81
82
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 8
83 Total liabilities
84 Residual (assets less liabilities) 9
3,079.3
858.3 r
645.5 r
2X2.1'
2,221.1
515.4
1,005.3
77.2
928.1
472.9
53.4
174.1
161.7
183.0
169.8
3,162.6
854.5
647.4
207.0
2,308.1
534.9
1,041.1
78.8
962.2
492.9
53.5
185.7
169.1
186.2
177.7
3,176.4
855.0
643.9
211.1
2,321.4
535.2
1,043.0
79.1
963.9
495.7
56.2
191.2r
173.7
193.6
184.4
3,197.8
854.6
640.1
214.5
2.343.1
540.1
1,051.0
79.6
971.3
500.4
55.6
196.1
182.2
202.0
182.6
3,196.3
853.3
643.3
210.0
2,343.0
540.5
1,055.0
79.8
975.2
500.5
52.3
194.7
173.5
189.8
186.0
3,197.6
843.8
635.5
208.3
2,353.8
540.6
1,060.9
79.8
981.1
503.6
51.5
197.2
184.6
188.3
186.6
3,209.3
842.2
635.0
207.1
2,367.1
544.8
1,062.6
80.0
982.6
506.2
53.2
200.4
191.2
195.5
188.6
3,211.7
846.0
637.4
208.6
2,365.8
549.0
1,062.6
79.8
982.9
503.8
50.8
199.5
190.8
192.5
188.4
3,215.2
846.4
639.5
207.0
2,368.8
549.0
1,062.5
79.7
982.8
503.6
54.4
199.2
194.3
196.7
192.0
3,213.4
850.1
640.1
210.0
2,363.3
550.4
1,063.2
79.7
983.5
502.6
47.6
199.6
198.8
196.1
187.5
3,213.4
845.5
636.5
209.0
2,367.9
549.5
1,062.5
79.6
982.9
502.7
53.0
200.2
188.3
195.4
185.3
3,206.3
844.1
635.8
208.3
2,362.2
547.6
1,062.1
79.7
982.4
504.8
48.6
199.0
181.2
183.4
184.1
3,537.1
3,639.1
3,671.7
3,707.7
3,689.1
3,700.5
3,727.7
3,726.8
3,741.6
3,739.2
3,725.8
3,6983
2,411.4
777.1
1,634.3
246.0
1,388.3
560.1
163.2
396.9
86.3
143.8
2,473.6
758.3
1,715.3
267.7
1,447.6
565.7
178.7
387.0
89.6
148.1
2,491.9 r
763.4
1,728.4
270.1
1,458.3
577.5 r
179.9r
397.6
91.0
155.3r
2,523.4
772.7
1,750.7
272.1
1,478.6
591.0
186.7
404.3
93.0
153.5
2,516.2
756.0
1,760.2
273.9
1,486.4
573.7
176.0
397.7
90.5
155.7
2,533.6
758.6
1,775.0
272.5
1,502.5
575.4
187.2
388.2
81.2
149.8
2,547.9
761.4
1,786.5
274.8
1,511.7
588.3
186.7
401.6
84.6
157.9
2,544.0
747.5
1,796.6
278.6
1,518.0
582.1
186.0
396.1
87.9
150.5
2,539.9
746.4
1,793.5
277.3
1,516.2
602.4
191.1
411.4
95.8
152.0
2,565.1
766.9
1,798.2
278.9
1,519.3
577.2
185.0
392.2
83.7
153.7
2.542.2
743.7
1,798.5
279.2
1,519.3
575.3
181.8
393.5
93.7
147.5
2,526.9
732.5
1,794.4
278.9
1,515.6
577.4
186.1
391.3
82.3
144.3
331.6
3,277.0
3,315.7
3,360.9
3,336.0
3,339.9
3378.6
3,364.6
3390.2
3379.7
3358.7
3330.9
335.5
362.1
356.0
346.8
353.1
360.6
349.1
362.1
351.4
359.4
367.1
367.4
Not seasonally adjusted
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
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
Interbank loans 4
Cash assets 5
Other assets 6
100 Total assets 7
101
102
103
104
105
106
107
108
109
110
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 8
111 Total liabilities
112 Residual (assets less liabilities) 9
3,080.4
862.1
647.6 r
214.5 r
2,218.3
520.4
1,002.7
77.1
925.6
471.3
52.1
171.9
155.9
181.5
169.8
3,172.3
855.3
646.6
208.8
2,317.0
533.9
1,046.5
79.3
967.3
493.7
55.4
187.4
173.2
190.7
176.3
3.182.4
848.5
640.2'
208.4
2,333.9
533.2
1,047.7
79.2
968.6
501.5
56.9
194.5
184.7
208.5
183.7
3,186.1
843.6
632.9
210.7
2,342.5
537.0
1,050.8
79.5
971.3
505.0
54.0
195.7
189.9
209.8
183.5
3,188.3
849.4
639.3
210.2
2,338.9
539.7
1,051.7
79.4
972.4
501.1
53.3
193.0
177.2
191.7
184.9
3,190.5
847.2
638.7
208.5
2,343.3
543.7
1,055.2
79.1
976.1
499.3
51.6
193.5
183.2
181.5
185.9
3,212.1
847.5
640.8
206.6
2,364.7
550.7
1,059.1
79.4
979.7
503.4
54.1
197.3
189.0
190.6
187.8
3,212.2
849.3
639.0
210.3
2,362.9
554.5
1,059.7
79.7
980.1
502.1
49.6
196.9
184.0
190.2
188.6
3,219.0
852.5
642.0
210.5
2,366.6
556.3
1,059.4
79.5
979.8
501.7
53.1
196.1
188.1
188.7
194.2
3,214.9
853.1
641.7
211.4
2,361.8
556.0
1,060.7
79.6
981.1
501.2
46.9
196.9
191.2
192.0
187.5
3,207.6
846.5
637.6
208.9
2,361.0
554.2
1,058.9
79.5
979.4
501.2
50.9
195.8
177.5
180.4
181.1
3,206.4
846.3
636.4
210.0
2,360.1
552.2
1,059.5
79.6
979.9
503.2
47.2
198.0
176.0
200.0
186.6
3,530.7
3,655.8
3,702.6
3,712.8
3,685.5
3,6843
3,723.0
3,7183
3,733.2
3,728.9
3,689.9
3,712.5
2,399.3
765.4
1,634.0
248.7
1.385.2
560.6
162.3
398.4
91.8
145.0
2,488.5
771.8
1,716.8
267.4
1,449.3
576.8
181.2
395.6
88.4
149.8r
2,522.1
798.3
1,723.8
265.8
1,458.1
584.0'
191.8'
392.2
89.3
153.3
2,529.2
784.3
1,744.9
269.4
1,475.5
581.7
193.7
388.0
92.9
154.2
2.507.5
748.8
1,758.7
275.3
1,483.4
572.5
178.5
394.0
92.3
154.1
2,519.5
743.9
1,775.5
273.0
1,502.6
567.5
182.1
385.5
84.5
151.6
2,547.1
760.9
1,786.2
276.2
1,510.0
573.0
186.3
386.7
85.0
156.0
2,532.3
735.8
1,796.5
281.8
1,514.7
581.3
184.9
396.4
93.2
152.0
2,527.5
733.1
1,794.5
280.8
1,513.7
593.2
188.4
404.8
97.6
154.2
2,552.5
754.9
1,797.6
282.1
1.515.5
576.5
183.8
392.8
87.7
154.8
2,504.2
707.8
1,796.4
283.0
1,513.4
576.9
179.8
397.1
101.5
147.6
2,534.2
740.0
1,794.2
281.8
1,512.4
579.3
186.1
393.2
91.3
147.1
3,196.7
3303.4
3348.8
3358.0
3326.4
3323.1
3361.0
3358.7
3372.6
3371.5
3330.2
3352.0
334.0
352.4
353.8
354.8
359.1
361.2
361.9
359.6
360.6
357.4
359.7
360.5
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; New York State investment companies, 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.
2. Excludes federal funds sold to, reverse repurchase agreements with, and loans to
commercial banks in the United States.
3. Consists of reserve repurchase agreements with broker-dealers and loans to purchase
and carry securities.
4. Consists of federal funds sold to, reverse repurchase agreements with, and loans to
commercial banks in the United States.
5. Includes vault cash, cash items in process of collection, demand balances due f r o m
depository institutions in the United States, balances due from Federal Reserve Banks, and
other cash assets.
6. Excludes the due-from position with related foreign offices, which is included in lines
2 5 , 5 3 , 81, and 109.
7. Excludes unearned income, reserves for losses on loans and leases, and reserves for
transfer risk. Loans are reported gross of these items.
8. Excludes the due-to position with related foreign offices, which is included in lines 25,
53, 81, and 109.
9. This balancing item is not intended as a measure of equity capital for use in capital
adequacy analysis.
Weekly Reporting Commercial Banks
1.27
A19
ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS
Millions of dollars, Wednesday figures
1996
Account
M a y 15
May 22
Apr. 3
Apr. 10
Apr. 17
Apr. 2 4
May 1
May 8
May 29
113,267
282.446
22,237
260.209
113,268
113,019
286,488
24,467
262,021
112,767
117,100
283,560
21,686
261,874
113,273
127,447
281,055
19,411
261,644
114,323
117,760
281,287
19,002
262,285
116,027
118.673
283.773
21,981
261,792
115,626
119,831
284,139
23,863
260,276
116,562
111,182
280,103
22,017
258,086
116,001
123,090
279,703
22.965
256,737
115,604
36,039
61.755
49,147
118.950 r
1,840
64,181
18,978
4,222
14,756
45,203
52,929
37.568
62,575
49,112
119,879'
1,911
63,792
18,955
4,220
14.735
44.838
54,176'
36,182
63,577
48,843
118,988'
1,542
63,425
19,019
4,205
14,814
44,406
54,021
35,363
63,498
48,460
119,007'
1,641
63,411
19,065
4,219
14,847
44,346
53.955'
35,950
62,094
48,215
123,995
2,014
63,385
18,931
4,074
14,857
44,454
58,596
35,602
62,703
47,860
123.802
1,830
63,387
18,800
4,037
14,762
44,588
58,584
33,392
62,682
47,641
124,607
2.481
63,557
18,789
4,016
14,773
44,768
58,570
32,722
61,815
47,547
122,294
1,123
63,397
18,815
4,032
14,784
44,581
57,775
33,337
60,835
46,961
123,354
1,237
63,411
18,829
4,019
14,811
44,582
58,706
111,299
72.837
32,078
6.384
l,290.073r
356.920r
1.618
355,302'
352.601'
2,702
506,887
47.014
459,873
247,995'
73.287'
40,666'
3,033
29,588
14,187
6,518
10,470'
1.123
27,918
44,767
1.764
33,250
1,255,059'
149,526'
116,084
81,396
28,716
5,973
1.293,902'
357.048'
1,603
355,446'
352,765'
2,681
508,717
47.033
461.684
248.359'
74,462'
41,144'
3,900
29,418
14.894
6,575
10,407'
1.323
26,697
45,420
1.812
33,062
1,259,027'
148,647'
114,112
75,435
33,823
4,854
1,296,727'
359,959'
1,458
358.501'
355,762'
2,739
508,812
47,967
460,845
249,404'
73,059'
40,950'
3,021
29,088
15.122
6,587
10,415'
1,237
26,563
45,569
1,813
33,049
1,261.866'
148,091'
118.498
79.263
35.032
4.203
1,297.023'
359.721'
1.431
358.289'
355.551'
2,738
507,879
48,191
459.688
249,929'
73,539
41,242
3,510
28.787
15,795
6,645
10,317
1,095
26,397
45,706
1,808
32.968
1,262,246'
141,600'
125,734
87,062
34,525
4,146
1.302,723
363,620
1,501
362,119
359,354
2,765
505.936
48,776
457,161
250,460
73,852
42,580
4.104
27,168
15,864
6,697
10,188
1,124
29,080
45,903
1,805
33,117
1,267.801
147,023
121,656
83,777
33,468
4,412
1,297,559
361,247
1,489
359,758
356,983
2,775
506,170
48,095
458,075
250,763
74,151
42,332
3,813
28,006
14,031
6,762
10,260
1,080
26,628
46,467
1.869
33,228
1,262.462
148,727
119,912
87,610
26,860
5,443
1,295.867
360,797
1,432
359,365
356,543
2,822
505,496
48,102
457,393
249,981
72,666
42,673
2,877
27,116
14,517
6,814
10,359
1,117
27,507
46,614
1,877
33,181
1,260,809
150,537
112,698
78,385
28,966
5,348
1,293,845
359,063
1,373
357,690
354,877
2,812
503,691
47,996
455,695
250,345
71,717
41.619
3,532
26,566
16,614
6,902
10,507
1,096
27,202
46,707
1,880
33,087
1,258,878
143,923
106,695
74,940
26,801
4,953
1,296,182
356,880
1,418
355.462
352,687
2,775
504.185
48,046
456,139
251.739
74,426
43,517
3,780
27,129
15,015
6,913
10,461
1,086
28,597
46,880
1,865
33,033
1,261,284
143,349
2,030,547r
2,043,145r
2,043,717r
2,049,854r
2,063,598
2,059,092
2,059,836
2,029,078
2,037,475
ASSETS
1 C a s h a n d b a l a n c e s d u e f r o m d e p o s i t o r y institutions
2 U.S. T r e a s u r y a n d g o v e r n m e n t securities
Trading account
3
Investment account
4
M o r t g a g e - b a c k e d secu rities'
5
All others, by m a t u r i t y
O n e y e a r or less
6
O n e y e a r t h r o u g h five vears
7
M o r e than five vears
8
9 O t h e r securities
Trading account
in
Investment account
11
State a n d local g o v e r n m e n t , bv m a t u r i t y
12
O n e y e a r or less
13
M o r e than o n e y e a r
14
O t h e r b o n d s , c o r p o r a t e stocks, a n d securities
15
O t h e r trading a c c o u n t assets
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
F e d e r a l f u n d s sold"
To c o m m e r c i a l b a n k s in the U n i t e d States
To n o n b a n k b r o k e r s a n d d e a l e r s in securities
To others1
O t h e r loans and leases, gross
C o m m e r c i a l and industrial
B a n k e r s a c c e p t a n c e s and c o m m e r c i a l p a p e r
All other
U.S. a d d r e s s e e s
Non-U.S. a d d r e s s e e s
Real estate loans
Revolving, home equity
All other
To individuals for personal e x p e n d i t u r e s
To depository and financial institutions
C o m m e r c i a l b a n k s in the U n i t e d States
B a n k s in foreign c o u n t r i e s
Nonbank depository and other financial institutions
F o r p u r c h a s i n g and c a r r y i n g securities
To finance agricultural p r o d u c t i o n
To states and political s u b d i v i s i o n s
To foreign g o v e r n m e n t s and official institutions
All other loans
L e a s e - f i n a n c i n g receivables
LESS: U n e a r n e d i n c o m e
L o a n and lease reserve"
O t h e r loans and leases, net
All other assets
45 Total assets
F o o t n o t e s a p p e a r on the f o l l o w i n g page.
A20
1.27
DomesticNonfinancialStatistics • August 1996
ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued
Millions of dollars, Wednesday figures
1996
Account
Apr.
Apr.
3
10
Apr.
17
Apr.
24
May
1
May
8
May
15
May
22
May
29
LIABILITIES
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
Deposits
Demand deposits
Individuals, partnerships, and corporations
Other holders
States and political subdivisions
U.S. government
Depository institutions in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Transaction balances other than demand deposits 4
Nontransaction balances
Individuals, partnerships, and corporations
Other holders
States and political subdivisions
U.S. government
Depository institutions in the United States
Foreign governments, official institutions, and banks
1,236,948R
315,277R
270,698
44,579R
8,128
2,258
21,446R
4,977
621
7,149
86,892
834,779
807,932'
26,847'
22,981
2.037'
1,524'
..
67
68
Liabilities for borrowed money 5
Borrowings from Federal Reserve Banks
Treasury tax and loan notes
Other liabilities for borrowed m o n e y 6
Other liabilities (including subordinated notes and debentures) . . .
69
Total liabilities
70
Residual (total assets less total liabilities) 7
64
65
66
305
392,692'
0
11,355
381,337'
1,232,452'
311,202'
267,244
1,236,517'
316,236'
269,122
1,212,132
302,621
254,789
43,958'
8,690
47,113'
8,123
2,493
19,894'
5,403
665
6,813
1,231,923
322,658
1,215,696
301,096
47,832
8,820
274,400
48,258
9,802
258,201
42,896
8,264
5,178
20,939'
4,567
6,535
19,640
5,279
3,136
21,798
5,042
640
7,666
578
6,979
82,854
663
7,818
1,731
20,457
5,293
594
86,267
834,984
89,990
830,291
826,658
807,935'
27,048'
803,515'
26,775'
797,958'
28,699'
22,367
2,558'
22,325
4,032'
2,039'
23,073
2,265'
1,406'
305
1,537'
312
406,785'
398,615'
0
5,921
400,864'
373,821'
0
24,794
303
416,631'
0
26,456
207,175'
208,103'
212,936'
390,175'
224,582'
l,836,815r
l,847,340r
l,848,068r
l,853,345r
193,732'
195.805'
195,649'
1,689,264'
119,407
1,693,813'
118,241
1,697,002'
119,119
196,509
1,236,930
323,033
275,727
47,306
8,914
3,075
22,383
5,443
1,202,246
294,104
1,221,291
315,572
252,379
267,838
47,734
41,725
8,303
1,739
19,637
5,004
8,535
1,470
24,101
5,546
776
6,557
691
6,800
590
6,452
80,823
828,442
80,250
834,349
76,766
837,131
799,310
29,132
22,872
804,613
29,736
23,441
807,569
29,562
71,437
836,705
806,910
833,687
804,219
29,468
23,225
4,019
23,261
4,042
29,795
23,478
4,014
1,941
1,948
311
4,040
1,884
306
1,966
310
4,040
1,958
411,525
421,002
0
24,225
0
14,238
406,764
406,865
0
7,306
72,032
318
319
405,250
0
406,709
3,648
2,782
0
3,355
227,195
403,217
220,868
402,468
225,742
403,354
213,297
1,863,893
1,864,663
1,833,238
1,841,296
194,909
195,199
195,173
195,840
196,178
1,704,096
121,537
1,700,680
123,988
1,694,243
125,319
1,688,936
125,591
1,687,476
124,714
1,080
268
812
1,056
268
1,048
268
1,032
268
789
27,113
93,087
780
28,057
83,508
1,039
268
771
387,300
225,242
1,868,689
MEMO
71
72
73
74
75
76
77
Total loans and leases, gross, adjusted, plus securities 8
Time deposits in amounts of $100,000 or more
Loans sold outright to affiliates 9
Commercial and industrial
Other
Foreign branch credit extended to U.S. residents 1 0
Net owed to related institutions abroad
1,116
268
848
26,901
71,204'
1,106
268
838
27,107
67,716'
1. Includes certificates of participation, issued or guaranteed by agencies of the U.S.
government, in pools of residential mortgages.
2. Includes securities purchased under agreements to resell.
3. Includes allocated transfer risk reserve.
4. Includes negotiable order of withdrawal (NOWs) and automatic transfer service (ATS)
accounts, and telephone and preauthorized transfers of savings deposits.
5. Includes borrowings only from other than directly related institutions.
6. Includes federal f u n d s purchased and securities sold under agreements to repurchase.
7. This balancing item is not intended as a measure of equity capital for use in capitaladequacy analysis.
1,695,077'
122,439
1,098
268
829
1,088
268
820
27,861
73,346'
27,837
95,160'
27,527
91,145
27,880
97,840
765
28,262
87,464
8. E x c l u d e s loans to and federal f u n d s transactions with c o m m e r c i a l b a n k s in the
United States.
9. Affiliates include a b a n k ' s own foreign branches, nonconsolidated nonbank affiliates of
the bank, the b a n k ' s holding company (if not a bank), and nonconsolidated nonbank
subsidiaries of the holding company.
10. Credit extended by foreign branches of domestically chartered weekly reporting banks
to nonbank U.S. residents. Consists mainly of commercial and industrial loans, but includes
an unknown amount of credit extended to other than nonfinancial businesses.
Weekly Reporting Commercial Banks
1.28
A21
LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS
Assets and Liabilities
Millions of dollars, Wednesday figures
1996
Account
Apr. 3
Apr. 10
Apr. 17
16,273
15,855
15,506
Apr. 24
May 1
May 8
May 15
May 22
May 29
ASSETS
1 Cash and balances due from depository
institutions
2 U.S. Treasury and government agency
securities
3 Other securities
4 Federal f u n d s sold'
To commercial banks in the United States
5
6
To others 2
7 Other loans and leases, gross
Commercial and industrial
9
Bankers acceptances and commercial paper .
All other
10
U.S. addressees
11
12
Non-U.S. addressees
Loans secured by real estate
13
14
Loans to depository and financial
institutions
Commercial banks in the United States
15
Banks in foreign countries
16
Nonbank financial institutions
17
18
For purchasing and carrying securities
19
To foreign governments and official
institutions
20
All other
21 Other assets (claims on nonrelated parties)
22 Total assets 3
15,133
15,613
15,215
15,727
15,991
44,960
44,864 r
31,479
6,907
24,573
183,795 r
121,761 r
5,154
116,607 r
110,229 r
6,378
20,224 r
44,910 r
45,378 r
28,065
8,634
19,431
185,495 r
121,027 r
5,162
115,865 r
109,674 r
6,191
20,380 r
47,839
44,309
28,785
7,079
21,706
185,595
119,407
4,735
114,671
108,344
6,327
20,322
49,834
42,792
26,813
6,889
19,923
183,506
118,350
4,792
113,558
107,269
6,288
20,374
48,825
43,770
21,056
5,720
15,337
185,905
119,599
4,787
114,812
108,613
6,199
20,389
49,549
43,888
25,291
7,242
18,049
187,250
119,906
4,756
115,150
108,953
6,197
20,612
49,983
44,567
27,644
10,570
17,075
187,162
119,734
4,912
114,823
108.625
6,197
20.533
31,001 r
2,548
3,110
25,343 r
4,952
30,110
2,244
3,051
24,815
4,862
31,676
2,560
3,120
25,997
5,134
33,165
2,138
3,271
27,755
5,668
33,279
2,171
3,089
28,018
4,517
33,939
2,466
3,328
28,145
4,608
34,024
2,627
3,008
28,389
5,325
34,482
2,895
3,021
28,567
5,036
621
4,372
37,119 r
582
4,228
37,752 r
689
4,247
37,413 r
605
4,610
37,080 r
575
4,462
38,649
585
4,423
39,085
584
4,687
40,867
601
4,685
39,636
596
4,684
39,469
384,801 r
387,305 r
393,819 r
392,324 r
395,636
393,997
394,132
397,039
401,131
105,656
3,996
3,119
877
101,660
72,501
29,159
101,344
3,936
3,217
719
97,408
69,256
28,153
105,173
4,036
3,311
725
101,137
72,258
28,879
108,433
4,216
3,481
735
104,217
74,789
29,428
108,436
4,202
3,481
721
104,234
75,123
29,110
108,354
4,253
3,422
831
104,100
74,808
29,293
109,334
4,203
3,550
652
105,131
77,091
28,040
111,375
4,104
3,510
594
107,271
79,368
27,903
112,528
4,355
3,573
783
108,172
79,222
28,951
74,049
47,698
12,094
35,604
26,351
4,357
21,994
59,469 r
76,140
45,281
9,753
35,528
30,859
4,251
26,608
62,373 r
82,875
52,877
12,657
40,220
29,998
4,328
25,670
62,623 r
75,963
44,693
8,762
35,931
31,270
4,543
26,727
60,354 r
88,351
55,066
16,175
38,890
33,285
4,068
29,218
60,558
85,024
50,405
10,602
39,804
34,619
4,221
30,398
60,368
83,075
49,206
13,804
35,402
33,869
4,201
29,667
62,440
82,707
46,632
8,888
37,744
36,075
4,472
31,604
60,571
79,485
45,657
8,760
36,897
33,828
4,100
29,728
61,855
384,801 r
387,305 r
393,819 r
392,324 r
395,636
393,997
394,132
397,039
401,131
291,141 r
112,983 r
292,272 r
115,670 r
295,949 r
107,347 r
292,655 r
111,749 r
297,312
102,966
293,884
103,897
291,371
100,790
296,109
106,688
295,893
110,949
46,342 r
42,660 r
24,361
5,248
19,113
185,40l r
122,743 r
5,163
117,580 r
11 l,364 r
6,216
20,207 r
46,785
43,614 r
26,693
7,100
19,593
184,827 r
121,945 r
5,429
116,516 r
110,362 r
6,154
20,226 r
30,564
2,376
3,061
25,127
4,937
r
15,572
r
LIABILITIES
23 Deposits or credit balances owed to other
than directly related institutions
24 Demand deposits 4
Individuals, partnerships, and corporations . . . .
25
26
Other
27 Nontransaction accounts
28
Individuals, partnerships, and corporations . . . .
29
Other
30 Borrowings from other than directly
related institutions
31 Federal funds purchased'
32
From commercial banks in the United States . .
33
From others
34 Other liabilities for borrowed money
To commercial banks in the United States
35
36
To others
37 Other liabilities to nonrelated parties
38 Total liabilities 6
MEMO
39 Total loans (gross) and securities, adjusted 7
40 Net owed to related institutions abroad
1. Includes securities purchased under agreements to resell.
2. Includes transactions with nonbank brokers and dealers in securities.
3. For U.S. branches and agencies of foreign banks having a net " d u e f r o m " position,
includes net due f r o m related institutions abroad.
4. Includes other transaction deposits.
5. Includes securities sold under agreements to repurchase.
6. For U.S. branches and agencies of foreign banks having a net " d u e t o " position,
includes net owed to related institutions abroad.
7. Excludes loans to and federal f u n d s transactions with commercial banks in the United
States.
A22
DomesticNonfinancialStatistics • August 1996
1.32
COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
1995
Year ending December
1996
Item
1992
1991
1994
1993
1995
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers
528,832
545,619
555,075
595,382
674,927
669,661
674,927
685,797
687,669
695,201
710,749
Financial companies'
2
Dealer-placed paper 2 , total
3
Directly placed paper 3 , total
212,999
182,463
226,456
171,605
218,947
180,389
223,038
207,701
275,814
210,853
276,222
213,578
275,814
210,853
288,368
208,166
293,313
208,046
292,533
208,880
303,567
211,833
4 Nonfinancial companies 4
133,370
147,558
155,739
164,643
188,260
179,861
188,260
189,264
186,310
193,788
195,349
Bankers dollar acceptances (not seasonally adjusted)"
5 Total
6
7
8
9
10
By holder
Accepting banks
Own bills
Bills bought from other banks
Federal Reserve Banks 6
Foreign correspondents
Others
By basis
11 Imports into United States
12 Exports from United States
13 All other
43,770
38,194
32,348
29,835
11,017
9,347
1,670
10,555
9,097
1,458
12,421
10,707
1.714
11,783
10,462
1,321
1,739
31,014
1,276
26,364
725
19,202
410
17.642
12,843
10,351
20,577
12,209
8,096
17,890
10,217
7,293
14,838
10,062
6,355
13,417
1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales,
personal, and mortgage financing; factoring, finance leasing, and other business lending:
insurance underwriting; and other investment activities.
2. Includes all financial-company paper sold by dealers in the open market.
3. As reported by financial companies that place their paper directly with investors.
4. Includes public utilities and firms engaged primarily in such activities as communications, construction, manufacturing, mining, wholesale and retail trade, transportation, and
services.
1.33
PRIME RATE CHARGED BY BANKS
29,242
5. Data on bankers dollar acceptances are gathered from approximately 100 institutions.
The reporting group is revised every January. Beginning January 1995, data for Bankers
dollar acceptances will be reported annually in September.
6. In 1977 the Federal Reserve discontinued operations in bankers dollar acceptances for
its own account.
Short-Term Business Loans'
Percent per year
Date of change
1993
Jan
1
.. .
6.00
24
19
17
16
15
6.25
6.75
7.25
7.75
8.50
1995—Feb.
1
July
7
Dec 20
9.00
8.75
8.50
1996—Feb.
8.25
1994—Mar.
Apr.
May
Aug.
Nov.
Period
Rate
1
Average
rate
1993
1994
1995
6.00
7.15
8.83
1993—Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
1. The prime rate is one of several base rates that banks use to price short-term business
loans. The table shows the date on which a new rate came to be the predominant one quoted
by a majority of the twenty-five largest banks by asset size, based on the most recent Call
Period
1994—Jan
Feb
Mar
Apr.
May
June
July
Aug
Sept
Oct
Dec
Average
rate
6.00
6.00
6.06
6.45
6.99
7.25
7.25
7.51
7.75
7.75
8.15
8.50
Period
1995—Jan
Feb
Mar.
Apr
May
June
July
Aug
Sept
Oci
Average
rate
Dec
8.50
9.00
9.00
9.00
9.00
9.00
8.80
8.75
8.75
8.75
8.75
8.65
1996—Jan
Feb
Mar
. Apr
May
June
8.50
8.25
8.25
8.25
8.25
8.25
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
M o n e y and Capital Markets
Percent per year; figures are averages of business day data unless otherwise noted
1996
Item
MONEY MARKET
1993
Commercial
1-month
3-month
6-month
6
7
8
Finance paper, directly
1-month
3-month
6-month
II
Mar.
Apr.
May
May 3
M a y 10
M a y 17
M a y 24
May 31
3.02
3.00
4.21
3.60
5.83
5.21
5.22
5.00
5.31
5.00
5.22
5.00
5.24
5.00
5.30
5.00
5.22
5.00
5.26
5.00
5.22
5.00
5.19
5.00
3.17
3.22
3.30
4.43
4.66
4.93
5.93
5.93
5.93
5.29
5.15
4.99
5.39
5.31
5.26
5.40
5.39
5.38
5.38
5.39
5.42
5.40
5.40
5.41
5.40
5.40
5.44
5.38
5.38
5.40
5.36
5.37
5.40
5.38
5.38
5.41
3.12
3.16
3.15
4.33
4.53
4.56
5.81
5.78
5.68
5.20
5.00
4.77
5.29
5.18
5.04
5.31
5.28
5.20
5.29
5.29
5.23
5.29
5.29
5.21
5.31
5.29
5.24
5.28
5.28
5.23
5.28
5.27
5.23
5.27
5.28
5.24
3.13
3.21
4.56
4.83
5.81
5.80
5.07
4.91
5.21
5.17
5.28
5.28
5.29
5.31
5.29
5.31
5.30
5.33
5.28
5.30
5.27
5.29
5.30
5.33
3.11
3.17
3.28
4.38
4.63
4.96
5.87
5.92
5.98
5.23
5.15
5.03
5.31
5.29
5.30
5.34
5.36
5.42
5.32
5.36
5.47
5.33
5.36
5.46
5.33
5.37
5.49
5.31
5.36
5.45
5.31
5.35
5.45
5.31
5.36
5.47
3.18
4.63
5.93
5.14
5.28
5.36
5.36
5.36
5.38
5.36
5.34
5.35
3.00
3.12
3.29
4.25
4.64
5.02
5.49
5.56
5.60
4.83
4.77
4.69
4.96
4.96
5.06
4.95
5.06
5.23
5.02
5.12
5.33
5.00
5.10
5.33
5.00
5.12
5.35
5.01
5.11
5.28
5.04
5.12
5.27
5.04
5.14
5.39
3.02
3.14
3.33
4.29
4.66
5.02
5.51
5.59
5.69
4.87
4.79
4.64
4.96
4.96
4.98
4.99
5.08
5.17
5.02
5.12
5.31
5.00
5.08
5.30
5.02
5.14
n.a.
5.02
5.14
n.a.
5.03
5.11
n.a.
5.03
5.14
5.32
3.43
4.05
4.44
5.14
5.54
5.87
6.29
6.59
5.32
5.94
6.27
6.69
6.91
7.09
7.49
7.37
5.94
6.15
6.25
6.38
6.50
6.57
6.95
6.88
4.94
5.03
5.14
5.38
5.64
5.81
6.30
6.24
5.34
5.66
5.79
5.97
6.19
6.27
6.74
6.60
5.54
5.96
6.11
6.30
6.48
6.51
6.98
6.79
5.64
6.10
6.27
6.48
6.66
6.74
7.11
6.93
5.63
6.08
6.24
6.46
6.65
6.74
7.13
6.96
5.67
6.14
6.33
6.55
6.74
6.82
7.21
7.02
5.59
6.04
6.21
6.42
6.60
6.68
7.05
6.87
5.59
6.03
6.20
6.41
6.57
6.65
7.02
6.84
5.70
6.17
6.34
6.55
6.69
6.77
7.09
6.93
6.45
7.41
6.93
6.28
6.72
6.94
7.08
7.10
7.17
7.03
6.99
7.07
5.38
5.83
5.60
5.77
6.17
6.18
5.80
6.10
5.95
5.24
5.59
5.43
5.33
5.72
5.79
5.62
5.94
5.94
5.75
5.97
5.98
5.72
6.00
6.06
5.85
5.89
6.08
5.79
5.87
5.96
5.70
6.10
5.87
5.70
6.01
5.94
7.54
8.26
7.83
7.27
7.65
7.80
7.91
7.94
8.01
7.86
7.82
7.89
7.22
7.40
7.58
7.93
7.46
7.97
8.15
8.28
8.63
8.29
7.59
7.72
7.83
8.20
7.86
6.99
7.16
7.31
7.63
7.31
7.35
7.52
7.68
8.03
7.75
7.50
7.68
7.83
8.19
7.90
7.62
7.77
7.94
8.30
8.02
7.65
7.80
7.97
8.33
8.22
7.72
7.87
8.04
8.40
8.01
7.57
7.72
7.90
8.25
7.92
7.53
7.68
7.85
8.20
7.90
7.61
7.75
7.92
8.27
8.08
2.78
2.82
2.56
2.22
2.22
2.24
2.21
2.21
2.26
2.20
2.17
2.22
placed3'^'1
Bankers
acceptances3'5'8
3-month
6-month
Certificates of deposit,
1-month
3-month
6-month
secondary
market3'9
14 Eurodollar deposits, 3 - m o n t h 3 1 0
18
19
20
U.S. Treasury bills
Secondary market 3 ' 5
3-month
6-month
1-year
Auction a v e r a g e 3 ' 5 ' "
3-month
6-month
1-year
21
22
23
24
25
26
27
28
Constant
1-year
2-year
3-year
5-year
7-year
10-year
20-year
30-year
15
16
17
Feb.
paper3'^b
3
4
5
12
13
1996, week ending
1995
INSTRUMENTS
1 Federal funds '' 2 ' 3
2 Discount window borrowing"' 4
9
10
1994
U.S. TREASURY NOTES AND BONDS
maturities''
Composite
29 More than 10 years (long-term)
STATE AND LOCAL NOTES AND BONDS
Moody's
series13
30 Aaa
31 Baa
32 Bond Buyer series 1 4
CORPORATE
BONDS
33 Seasoned issues, all industries 1 5
34
35
36
37
38
Rating
group
Aaa
Aa
A
Baa
A-rated, recently offered utility bonds 1 6
MEMO
Dividend-price
ratio11
39 C o m m o n stocks
1. T h e 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 for bank interest.
4. Rate for the Federal Reserve Bank of N e w York.
5. Quoted on a discount basis.
6. A n average of offering rates on commercial paper placed by several leading dealers for
firms w h o s e bond rating is A A or the equivalent.
7. A n average of offering rates on paper directly placed by finance companies.
8. Representative closing yields for acceptances of the highest-rated money center banks.
9. A n average of dealer offering rates on nationally traded certificates of deposit.
10. Bid rates for Eurodollar deposits at approximately 11:00 a.m. London time. Data are
for indication purposes only.
11. Auction date for daily data; weekly and monthly averages computed on an issue-date
basis.
12. Yields on actively traded issues adjusted to constant maturities. Source: U.S. Department of the Treasury.
13. General obligation bonds based on Thursday figures; M o o d y ' s Investors Service.
14. State and local g o v e r n m e n t 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 '
A1 rating. Based on Thursday figures.
15. Daily figures from M o o d y ' s Investors Service. Based on yields to maturity on selected
long-term bonds.
16. Compilation of the Federal Reserve. This series is an estimate of the yield on recently
offered, A-rated utility bonds with a thirty-year maturity and five years of call protection.
Weekly data are based on Friday quotations.
17. Standard & 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.
NOTE. S o m e of the data in this table also appear in the B o a r d ' s H.15 (519) weekly and
G. 13 (415) monthly statistical releases. For ordering address, see inside front cover.
A24
1.36
DomesticNonfinancialStatistics • August 1996
STOCK MARKET
Selected Statistics
1995
1994
1993
Indicator
1996
1995
Sept.
Nov.
Oct.
Jan.
Dec.
Prices and trading volume (averages of daily
Feb.
Mar.
Apr.
May
figures)
Common stock prices
(indexes)
1 New York Stock Exchange
(Dec. 31, 1965 = 50)
2
Industrial
Transportation
3
4
Utility
5
Finance
249.71
300.10
242.68
114.55
216.55
254.16
315.32
247.17
104.96
209.75
291.18
367.40
270.14
114.61
238.48
310.41
390.42
295.54
114.67
260.72
311.78
389.63
291.16
123.59
265.12
317.58
398.66
300.06
119.49
266.12
327.90
412.11
303.53
173.95
273.36
329.22
413.05
300.43
127.09
274.96
346.46
435.92
315.29
135.51
290.97
346.73
439.55
324.77
122.83
290.44
347.50
441.99
326.42
122.44
287.92
354.84
452.63
334.66
124.86
290.43
6 Standard & P o o r ' s Corporation
( 1 9 4 1 - 4 3 = 10)'
451.63
460.42
541.72
578.77
582.92
595.53
614.57
614.42
649.54
647.07
647.17
661.23
438.77
449.49
498.13
547.64
530.26
529.93
538.01
540.48
562.34
565.69
580.60
600.93
263.374
18.188
290.652
17,951
345,729
20.354 r
352,184
25,422
365.108
17,672 r
360,199
16,724
384,310
21,085
416,048
21,069
434,607
27,107
426,198
22.988
419,941
24,886
404,184
28,127
7 American Stock Exchange
(Aug. 31, 1973 = 5 0 ) :
Volume of trading (thousands
X New 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 c r e d i t at b r o k e r - d e a l e r s 3
Free credit balances
11 Margin accounts 5
12 Cash accounts
at
60,310
61,160
76,680
77,076
75,005
77,875
76,680
73,530
77,090
78,308
81,170
86,100
12,360
27,715
14,095
28,870
16,250
34,340
14,806
29,796
14.753
29,908
15,590
30,340
16.250
34,340
14,950
32,465
15,840
34,700
15.770
33,113
15,780
33,100
16,890
33,760
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), 40 public utility (formerly 60). and
40 financial.
2. On July 5, 1983, the American Stock Exchange rebased its index, effectively cutting
previous readings in half.
3. Since July 1983, under the revised Regulation T, margin credit at 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.
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
Jan. 3, 1974
50
50
50
collateralized by securities. Margin requirements on securities other than options are the
difference between the market value (100 percent) and the maximum loan value of collateral
as prescribed by the Board. Regulation T was adopted effective Oct. 15, 1934; Regulation U,
effective May 1. 1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective
Nov. 1, 1971.
On Jan. 1, 1977, the Board of Governors for the first time established in Regulation T the
initial margin required for writing options on securities, setting it at 30 percent of the current
market value of the stock underlying the option. On Sept. 30, 1985, the Board changed the
required initial margin, allowing it to be the same as the option maintenance margin required
by the appropriate exchange or self-regulatory organization; such maintenance margin rules
must be approved by the Securities and Exchange Commission. Effective Jan. 31, 1986, the
SEC approved new maintenance margin rules, permitting margins to be the price of the option
plus 15 percent of the market value of the stock underlying the option.
Effective June 8, 1988, margins were set to be the price of the option plus 20 percent of the
market value of the stock underlying the option (or 15 percent in the case of stock-index
options).
Federal Finance
1.38
A25
FEDERAL FISCAL AND FINANCING OPERATIONS
Millions of dollars
Fiscal year
Calendar year
Type of account or operation
1995
1993
U.S. budget1
1 Receipts, total
2
On-budget
3
Off-budget
4 Outlays, total
5
On-budget
6
Off-budget
7 Surplus or deficit (—), total
8
On-budget
9
Off-budget
Source of financing (total)
10 Borrowing from the public
11 Operating cash (decrease, or increase ( - ) )
12 O t h e r 2
1994
1996
1995
Dec.
Jan.
Feb.
Mar.
Apr.
May
1,153,535
841,601
311,934
1,408,675
1,142,088
266,587
-255,140
-300,487
45,347
1,257,737
922,711
335,026
1,460,841
1,181,469
279,372
-203,104
-258,758
55,654
1,355,213
1,004,134
351,079
1,519,133
1,230,469
288,664
-163,920
-226,335
62,415
138,271
110,322
27,949
132,984
121,753
11,232
5,286
-11,431
16,717
142,922
110,615
32,307
123,647
98,057
25,591
19,274
12,558
6,716
89,349
60,912
28,437
133,644
105,711
27,933
-44,295
-44,799
504
89,011
56,677
32,334
136,286
108,365
27,921
-47,275
-51,688
4,413
203,386
160,774
42,612
130,993
105,131
25,862
72,393
55,643
16,750
90,044
60,106
29,938
143,342
114,486
28,856
-53,298
-54,380
1,082
248,594
6,283
429
184,998
16,564
1,542
171,288
-2,007
-5,361
-18,358
5,610
7,462
-4,747
-16,959
2,432
47,022
6,297
-9,024
39,189
9,283
-197
-35,466
-26,449
-10,478
20,633
43,809
-11,144
52,506
17,289
35,217
35,942
6,848
29,094
37,949
8,620
29,329
20,495
5,979
14,515
37,454
8,210
29,243
31,157
5,632
25,525
21,874
7,021
14,853
48,323
11,042
37,281
4,514
3,757
757
MEMO
13 Treasury operating balance (level, end of
period)
14
Federal Reserve Banks
15
Tax and loan accounts
1. Since 1990, off-budget items have been the social security trust funds (federal old-age
survivors insurance and federal disability insurance) and the U.S. Postal Service.
2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the
International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets;
accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous
liability (including checks outstanding) and asset accounts; seigniorage; increment on gold;
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. Monthly 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 Management
and Budget, Budget of the U.S. Government.
A26
1.39
DomesticNonfinancialStatistics • August 1996
U.S. BUDGET RECEIPTS AND OUTLAYS 1
Millions of dollars
Fiscal year
Calendar year
Source or type
1994
1994
1995
1996
1995
HI
H2
HI
H2
Mar.
Apr.
May
RECEIPTS
1 All s o u r c e s
2 Individual income taxes, net
3
Withheld
4
Nonwithheld
Refunds
5
Corporation income taxes
6
Gross receipts
7
Refunds
8 Social insurance taxes and contributions, net . . .
9
Employment taxes and contributions 2
10
Unemployment insurance
11
Other net receipts 3
12
13
14
15
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts 4
1,257,737
1,355,213
652,235 r
625,556"
710,542
656,402'
89,011
203,386
90,044
543,055
459,699
160,363 r
11,011'
590,244
499,927
175,786
85,538
275,052
225,387
111,929'
68,325
273,315'
240,063'
42,029'
8,787'
307,498
251,398
132,001'
75,959'
292,393
256,916
43,100
10,058
22,523
41,834
5,790
25,118
107,513
38,930
89,392
20,822
29,914
45,399
6,352
21,850
154,205
13,820
461,475
428,810
28,004
4,661
174,422
17,418
484,473
451,045
28,878
4,550
80,535 r
6,932'
248,301
228,715 r
17,301
2,284
78,393'
7,747'
220,140'
206,615'
11,177
2,349
92,132
10,399
261,837
241,557'
18,001
2,279'
88,302
7,518
224,269
211,323
10,702
2,247
17,793
2,332
41,763
41,086
258
419
26,912
1,975
60,588
56,615
3,628
346
3,647
1,077
48,676
38,104
10,155
417
55,225
20,099
15,225
22,274
57,484
19,301
14,763
31,944
26,443 r
9,499 r
8,196'
11,141'
30,178'
11,041'
7,067'
13,169'
27,452
8,848'
7,425'
15,750'
30,014
9,849
7,718
11,374
4,133
1,528
1,137
2,467
4,577
1,388
2,704
1,680
4,113
1,427
1,415
1,929
OUTLAYS
16 All t y p e s
1,460,841
1,519,133
710,620
752,151
760,824
752,511
136,286
130,993
143,342
17
18
19
20
21
22
National defense
International affairs
General science, space, and technology
Energy
Natural resources and environment
Agriculture
281,642
17,083
16,227
5,219
21,064
15,046
272,066
16,434
16,724
4,936
22,105
9,773
133,844
5,800
8,502
2,237
10,111
7,451
141,885
11,889
7,604
2,923
11,911
7,623
135,678'
4,797'
8,611
2,357
10,272
4,040
132,954
6,994
8,810
2,203
12,633
3,062
22,479
1,391
1,381
131
1,592
-62
22,725
988
1,534
17
1,660
-249
26,609
1,165
1,584
216
1,757
-175
23
24
25
26
C o m m e r c e and housing credit
Transportation
Community and regional development
Education, training, employment, and
social services
-5,118
38,066
10,454
-14,441
39,350
10,641
-4,962
16,739
4,571
-4,270
21,835
6,283
-13,937
18,192'
5,043'
-4,412
19,931
6,085
-1,443
2,864
1,007
-1,741
2,864
1,026
256
3,324
826
46,307
54,263
19,262
27,450
25,875'
24,894
4,301
4,014
3,961
27 Health
28 Social security and Medicare
29 Income security
107,122
464,312
214,031
115,418
495,701
220,449
53,195
232,777
109,080
54,147
236,817
101,806
58,917'
251,975
117,347'
57,078
251,387
104,078
10,317
43,239
25,927
10,458
44,216
21,417
11,201
46,727
21,407
30
31
32
33
34
37,642
15,256
11,303
202,957
-37,772
37,938
16,223
13,835
232,173
-44,455
16,686
7,718
5,084
99,844
-17,308
19,761
7,753
7,355
109,434
-20,066
19,268
8,053'
5,795'
116,169
-17,632
18,684
8,117
7,621
119,350
-26,994
3,300
1,341
766
20,244
-2,490
2,974
1,585
-25
20,463
-2,932
5,254
1,683
180
20,359
-2,991
Veterans benefits and services
Administration of justice
General government
Net interest 5
Undistributed offsetting receipts 6
1. Functional details do not sum to total outlays for calendar year data because revisions to
monthly totals have not been distributed among functions. Fiscal year total for receipts and
outlays do not correspond to calendar year data because revisions from the Budget have not
been fully distributed across months.
2. Old-age, disability, and hospital insurance, and railroad retirement accounts.
3. Federal 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 service retirement and
disability f u n d .
4. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts.
5. Includes interest received by trust funds.
6. Rents and royalties for the outer continental shelf, U.S. government contributions for
employee retirement, and certain asset sales.
SOURCE. Fiscal year totals: U.S. Office of Management and Budget, Budget of the U.S.
Government, Fiscal Year 1997; monthly and half-year totals: U.S. Department of the Treasury, Monthly Treasury Statement of Receipts and Outlays of the U.S. Government.
Federal Finance
1.40
A27
FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars, end of month
1994
1995
1996
Item
Sept. 3 0
D e c . 31
4,978
5,001
5,017
5,153
4,951
3,635
1,317
4,974
3,653
1,321
4,989
3,684
1,305
5,118
n.a.
n.a.
27
27
0
27
27
0
28
28
0
36
n.a.
n.a.
4,775
4,861
4,885
4,900
5,030
4,774
0
4,861
0
4,885
0
4,900
0
5,030
0
4,900
4,900
4,900
5,500
June 30
Sept. 3 0
1 F e d e r a l debt o u t s t a n d i n g
4,602
4,673
4,721
4,827
4,891
2 P u b l i c d e b t securities
3
H e l d by p u b l i c
4
H e l d by a g e n c i e s
4,576
3,434
1,142
4,646
3,443
1,203
4,693
3,480
1,213
4,800
3,543
1,257
4,864
3,610
1,255
26
26
0
28
27
0
29
29
0
27
27
0
27
26
0
4,491
4,559
4,605
4,711
4,491
0
4,559
0
4,605
0
4,711
0
4,900
4,900
4,900
4,900
4,900
5 A g e n c y securities
6
H e l d by public
7
Held by agencies
8 Debt subject to statutory limit
9 P u b l i c d e b t securities
10 O t h e r d e b t 1
D e c . 31
M a r . 31
M a r . 31
June 30
Mar. 31
MEMO
11 Statutory d e b t limit
1. C o n s i s t s of g u a r a n t e e d d e b t of U.S. T r e a s u r y a n d other f e d e r a l a g e n c i e s , s p e c i f i e d
participation certificates, n o t e s to international l e n d i n g o r g a n i z a t i o n s , a n d District of C o l u m bia s t a d i u m b o n d s .
1.41
GROSS PUBLIC DEBT O F U.S. TREASURY
SOURCE. U.S. D e p a r t m e n t of the T r e a s u r y , Monthly
United States a n d Treasury
Bulletin.
Statement
of the Public
Debt
of the
Types and Ownership
Billions of dollars, end of period
1995
Type and holder
1 Total gross public debt
2
3
4
5
6
7
8
9
10
11
12
13
14
By type
Interest-bearing
Marketable
Bills
Notes
Bonds
Nonmarketable1
State a n d local g o v e r n m e n t series
F o r e i g n issues 2
Government
Public
Savings bonds and notes
G o v e r n m e n t account series3
Non-interest-bearing
By holder 4
15 U.S. T r e a s u r y a n d o t h e r f e d e r a l a g e n c i e s a n d trust f u n d s
16 F e d e r a l R e s e r v e B a n k s
17 P r i v a t e investors
18
Commercial banks
19
Money market funds
20
Insurance companies
21
Other companies
22
State a n d local t r e a s u r i e s 5 , 6
Individuals
Savings bonds
23
24
O t h e r securities
25
Foreign and international7
26
Other miscellaneous investors6'8
1992
1994
1996
1995
Q2
Q3
Q4
Q1
4,177.0
4,535.7
4,800.2
4,988.7
4,951.4
4,974.0
4,988.7
5,117.8
4,173.9
2,754.1
657.7
1,608.9
472.5
1,419.8
153.5
37.4
37.4
.0
155.0
1,043.5
3.1
4,532.3
2,989.5
714.6
1,764.0
495.9
1,542.9
149.5
43.5
43.5
.0
169.4
1,150.0
3.4
4,769.2
3,126.0
733.8
1,867.0
510.3
1,643.1
132.6
42.5
42.5
.0
177.8
1,259.8
31.0
4,964.4
3,307.2
760.7
2,010.3
521.2
1,657.2
104.5
40.8
40.8
.0
181.9
1,299.6
24.3
4,947.8
3,252.6
748.3
1,974.7
514.7
1,695.2
121.2
41.4
41.4
.0
180.1
1,322.0
3.6
4,950.6
3,260.5
742.5
1,980.3
522.6
1,690.2
113.4
41.0
41.0
.0
181.2
1,324.3
23.3
4,964.4
3,307.2
760.7
2,010.3
521.2
1,657.2
104.5
40.8
40.8
.0
181.9
1,299.6
24.3
5,083.0
3,375.1
811.9
2,014.1
534.1
1,707.9
96.5
40.4
40.4
.0
183.0
1,357.7
34.8
1,047.8
302.5
2,839.9
294.4
79.7
197.5
192.5
579.3
1,153.5
334.2
3,047.4
322.2
80.8
234.5
213.0
631.9
1,257.1
374.1
3,168.0
290.1
67.6
240.1
226.5
521.4
1,304.5
391.0
3,294.9
285.0
71.3
252.0
288.8
420.0
1,316.6
389.0
3,245.0
298.0
58.7
248.6
227.7
470.9
1,320.8
374.1
3,279.5
289.0
64.2
250.5
224.1
422.9
1,304.5
391.0
3,294.9
285.0
71.3
252.0
288.8
420.0
157.3
131.9
549.7
657.5
171.9
137.9
623.0
632.3
180.5
150.7
688.6
802.5
185.0
162.7
861.8
768.3
182.6
161.6
784.1
812.8
183.5
162.4
848.1
834.8
185.0
162.7
861.8
768.3
1. I n c l u d e s (not s h o w n s e p a r a t e l y ) securities issued t o the Rural Electrification A d m i n i s t r a tion, d e p o s i t o r y b o n d s , r e t i r e m e n t p l a n b o n d s , a n d individual r e t i r e m e n t b o n d s .
2. N o n m a r k e t a b l e series d e n o m i n a t e d in dollars, a n d series d e n o m i n a t e d in f o r e i g n c u r rency h e l d by f o r e i g n e r s .
3. H e l d a l m o s t entirely by U.S. T r e a s u r y a n d o t h e r f e d e r a l a g e n c i e s a n d trust f u n d s .
4 . D a t a f o r F e d e r a l R e s e r v e B a n k s a n d U.S. g o v e r n m e n t a g e n c i e s a n d trust f u n d s are actual
h o l d i n g s ; d a t a f o r other g r o u p s are T r e a s u r y e s t i m a t e s .
5. I n c l u d e s state a n d local p e n s i o n f u n d s .
6. In M a r c h 1996, in a r e d e f i n i t i o n of series, f u l l y d e f e a s e d d e b t b a c k e d by n o n m a r k e t a b l e
f e d e r a l securities w a s r e m o v e d f r o m " O t h e r m i s c e l l a n e o u s i n v e s t o r s " a n d a d d e d to " S t a t e a n d
local t r e a s u r i e s . " T h e d a t a s h o w n h e r e h a v e b e e n r e v i s e d accordingly.
1993
n.a.
7. C o n s i s t s of i n v e s t m e n t s of f o r e i g n b a l a n c e s a n d i n t e r n a t i o n a l a c c o u n t s in the U n i t e d
States.
8. I n c l u d e s s a v i n g s a n d l o a n a s s o c i a t i o n s , n o n p r o f i t institutions, credit u n i o n s , m u t u a l
s a v i n g s b a n k s , c o r p o r a t e p e n s i o n trust f u n d s , d e a l e r s a n d b r o k e r s , certain U S . T r e a s u r y
deposit accounts, and federally sponsored agencies.
SOURCE. U.S. T r e a s u r y D e p a r t m e n t , d a t a by t y p e of security, Monthly Statement
of the
Public Debt of the United States; d a t a by holder, Treasury
Bulletin.
A28
1.42
DomesticNonfinancialStatistics • August 1996
U.S. GOVERNMENT SECURITIES DEALERS
Transactions 1
Millions of dollars, daily averages
1996
1996, week ending
Item
OUTRIGHT
By type of
counterparty
With interdealer broker
U.S. Treasury
Federal agency
Mortgage-backed
With other
U.S. Treasury
9
10
Federal agency
11
Mortgage-backed
6
7
8
12
13
14
15
16
17
18
19
20
21
Apr.
Apr. 3
Apr. 10
Apr. 17
Apr. 24
May 1
May 8
May 15
May 22
65,579
56,391
55,901
70,854
57,295
52,787
50,364
54,108
46,741
46,521
40,748
50,427
102,533
44,926
30,480
33,798
102,601
39,363
30,338
24,402
86,613
43,591
35,186
28,855
108,826
60,332
28,211
53,716
94,074
52,906
30,051
42,084
83,123
46,403
28,324
23,317
92,097
38,724
28,629
23,526
May 29
125,757
67,611
26,759
40,755 r
107,071
49,903
27,395 r
42,087 r
97,390
41,998
28,936
34,788'
89,934
40,022
26,832
44,091'
100,814
41,521
20,583
47,964
148,665
1,107
14,640 r
124,458
671
15,597 r
112,758
795
11,326'
111,975
586
15,704'
115,861
648
13,976'
114,531
697
12,030
112,998
1,046
8,046
107,725
907
8,614
126,461
616
18,088
113,545
824
13,906
98,482
710
8,543
104,682
474
10,361
110,281
25,652
26,114 r
88,907
26,725 r
26,490 r
82,531
28,141
23,461'
88,835
26,246
28,387'
83,768
19,935
33,987'
85,715
29,783
21,768
79,331
29,291
16,356
76,586
34,279
20,240
89,438
27,595
35,628
79,956
29,227
28,178
71,792
27,615
14,774
76,566
28,155
13,165
TRANSACTIONS3
By type of deliverable
security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed
OPTIONS
Mar.
TRANSACTIONS2
By type of security
1 U.S. Treasury bills
Coupon securities, by maturity
Five years or less
2
3
More than five years
4 Federal agency
5 Mortgage-backed
FUTURES
Feb.
346
487
369
212
541
302
581
131
426
859
96
256
2,269
17,420
0
0
2,055
14,824
0
0
1,203
11,717
0
0
1,216
10,186
0
0
1,435
12,738
0
0
1,443
14,023
0
0
1,031
10,297
0
0
876
10,736
0
0
1,645
17,060
0
0
1,532
12,218
0
0
1,327
10,771
0
0
1,598
10,765
0
0
TRANSACTIONS4
By type of underlying
security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed
0
0
0
0
0
0
0
0
0
0
0
0
2,730
4,580
0
1,341
2,775
3,073
0
1,125
1,582
3,773
0
1,110
2,213
3,117
0
1,250
1,376
3,712
0
1,401
1,585
4,669
0
979
1,408
3,625
0
1,116
1,526
3,391
0
868
1,328
4,099
0
1,565
3,217
3,982
0
1,417
2,640
4,878
0
625
2,126
2,987
0
541
1. Transactions are market purchases and sales of securities as reported to the Federal
Reserve Bank of New York by the U.S. government securities dealers on its published list of
primary dealers. Monthly averages are based on the number of trading days in the month.
Transactions are assumed evenly distributed among the trading days of the report week.
Immediate, forward, and futures transactions are reported at principal value, which does not
include accrued interest; options transactions are reported at the face value of the underlying
securities.
Dealers report cumulative transactions for each week ending Wednesday.
2. Outright transactions include immediate and forward transactions. Immediate delivery
refers to purchases or sales of securities (other than mortgage-backed federal agency securities) for which delivery is scheduled in five business days or less and " w h e n - i s s u e d "
securities that settle on the issue date of offering. Transactions for immediate deliveiy of mortgagebacked agency securities include purchases and sales for which delivery is scheduled in thirty business
days or less. Stripped securities are repotted at market value by maturity of coupon or corpus.
Forward transactions are agreements m a d e in the over-the-counter market that specify
delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt
securities are included when the time to delivery is more than five business days. Forward
contracts for mortgage-backed agency securities are included when the time to delivery is
more than thirty business days.
3. Futures transactions are standardized agreements arranged on an exchange. All futures
transactions are included regardless of time to delivery.
4. Options transactions are purchases or saleo of put and call options, whether arranged on
an organized exchange or in the over-the-counter market, and include options on futures
contracts on U.S. Treasury and federal agency securities.
NOTE, " n . a . " indicates that data are not published because of insufficient activity.
Major changes in the report form filed by primary dealers induced a break in the dealer data
series as of the week ending July 6, 1994.
Federal Finance
1.43
U.S. GOVERNMENT SECURITIES DEALERS
A29
Positions and Financing 1
Millions of dollars
1996
1996, week e n d i n g
Mar.
Feb.
Apr.
Apr. 3
Apr. 10
Apr. 17
Apr. 24
May 1
May 8
M a y 15
M a y 22
Positions"
NET OUTRIGHT
POSITIONS3
By type of security
1 U.S. T r e a s u r y bills
C o u p o n securities, by maturity
2
F i v e years or less
3
M o r e than five years
4 Federal a g e n c v
Mortgage-backed
NET FUTURES
6
/
8
9
10
II
12
13
14
15
20.889
17,119
44.826
24.141
12,884
7.229
11,554
12,031
16,296
14,951
6,296
7.771
-14,139
-24,377
-27.702
23,424
40,161
25,754
36,887
26,566
32,583
4,387
-26.494
24,016
31.979
8,709
-31.028
25,682
31,757
4.651
-28.372
23.995
33,353
12,474
-25,451
27,192
32,930
6,523
-26,268
31,139
32,543
6,242
-25,003
28.135
30,376
1,796
-23,338
23,321
35,251
-462
-22,041
24,464
35,657
-2,582
-2.842
-3,560
-3.298
-2,626
-2,685
-4,636
-4,547
-4.610
-4,898
-4,563
-587
-9.037
0
0
623
1.073
-4,285
0
346
-5,215
1.222
-3,418
0
1.132
-6.664
788
-5,351
0
0
0
0
0
1.062
-2.783
0
0
1,267
-2,466
0
1,419
-1,462
0
401
-4,541
0
0
POSITIONS4
By type of deliverable
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
Federal agency
Mortgage-backed
NET OPTIONS
8,316
11,937
-4.361
0
0
0
0
0
0
0
POSITIONS
By type of deliverable
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
Federal agency
Mortgage-backed
0
0
0
0
0
0
0
0
0
0
0
5
2,706
1,381
177
0
4,949
1,542
1,081
0
4,435
2,257
2.377
0
3.662
1.720
1.946
0
4,896
1,796
572
0
4,275
1.250
727
0
4,144
1,023
429
0
4,808
691
-1,491
-307
688
4,570
676
-1,366
0
3.688
0
3,052
0
0
3,603
Financing5
Reverse repurchase
agreements
l b O v e r n i g h t and continuing
17 Term
264,559r
424,730
258,213 R
435.402
256.694
467.590
249,264 r
425,695
273,465
445,217
264.387
475.409
239,1 10
490,874
252,381
478,354
245,232
499,560
271,735
416,344
252.858
448,774
Securities
borrowed
18 Overnight and continuing
19 Term
166,781
65,051
172,347
66,212
166,490
67,330
164,068
65,146
170,460
64,465
166,267
67,651
163,797
69,072
166,473
69,357
168,222
69,339
175,434
62,296
178.128
62,976
1,878
126
4,477
65
3,275
53
3,910
92
4,377
53
3,532
81
2,529
31
2,241
27
2,063
39
2,487
29
2,446
41
Repurchase
agreements
22 O v e r n i g h t and continuing
2 3 Term
562,396
387,953
557.094
393,406
577.949
399,259
562,672
374,236
594,664
377,959
600.073
392.801
554,265
425,905
567,907
413,066
560.778
426,042
577,866
357,241
564,022
392,652
Securities
loaned
24 O v e r n i g h t and continuing
25 Term
4,714
2,409
5,202
2.362
4,728
2,611
4.909
2,270
4,852
n.a.
4,592
n.a.
4.589
2,217
4,812
3.242
4,803
3,223
4,579
3,086
4,769
n.a.
Securities
pledged
O v e r n i g h t and continuing
27 Term
33,230
7,230
40.936
8,343
37.160
8.518
36,223
8,148
36,552
8,088
38,533
8,837
37,322
8,831
36,547
8.465
36,965
8,025
41,397
6,738
43,031
6,163
Collateralized
loans
28 O v e r n i g h t and continuing
29 Term
30 Total
n.a.
n.a.
14,667
n.a.
n.a.
12.176
n.a.
n.a.
n.a.
n.a.
14,555
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
14,052
14,443
15,108
15,317
10,638
n.a.
n.a.
13,316
n.a.
n.a.
12,567
n.a.
n.a.
12,697
MEMO: M a t c h e d b o o k 6
Securities
in
31 O v e r n i g h t and continuing
32 Term
253,15lr
426,056r
239,030*
433,86 lr
244,480
464,018
243,714 r
424,355
253,469
437,701
248,186
471.000
231,552
486,355
245,137
480,346
236,730
488,139
259,949
407,901
250,282
437,150
Securities
out
33 O v e r n i g h t and continuing
34
333,340
330,450
328,321
338.096
348,557
349,263
339,129
323,134
364,716
324,955
359,919
345,158
328,711
374,859
344,315
365,614
341,079
372,213
345,621
303,369
334,007
332,831
Securities received as pledge
20 O v e r n i g h t and continuing
21 Term
26
1. D a t a for positions and financing are obtained f r o m reports submitted 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. Weekly figures are c l o s e - o f - b u s i n e s s W e d n e s d a y data. Positions for calendar
days of the report week are a s s u m e d to be constant. Monthly averages are based on the
n u m b e r of calendar days in the m o n t h .
2. Securities positions are reported at m a r k e t value.
3. N e t outright positions include i m m e d i a t e and f o r w a r d positions. Net immediate positions include securities purchased or sold (other than m o r t g a g e - b a c k e d agency securities) that
have b e e n delivered or are s c h e d u l e d to be delivered in five business d a y s or less and
" w h e n - i s s u e d " securities that settle on the issue date of offering. Net immediate positions for
m o r t g a g e - b a c k e d agency securities include securities purchased or sold that have been
delivered or are scheduled to be delivered in thirty business days or less.
F o r w a r d positions reflect a g r e e m e n t s m a d e in the over-the-counter market that specify
d e l a y e d delivery. Forward contracts for U.S. Treasury securities and federal agency debt
securities are included when the time to delivery is m o r e than five business days. Forward
contracts for m o r t g a g e - b a c k e d agency securities are included w h e n the time to delivery is
m o r e than thirty business days.
4. Futures positions reflect standardized a g r e e m e n t s arranged on an e x c h a n g e . All futures
positions are included regardless of time to delivery.
5. Overnight financing refers to a g r e e m e n t s m a d e on o n e business day that mature on the
next business day; continuing contracts are a g r e e m e n t s that remain in effect f o r m o r e than one
business day but have n o specific maturity and can be terminated without a d v a n c e notice by
either party; term a g r e e m e n t s have a fixed maturity of m o r e than one business day. Financing
data are reported in t e r m s of actual f u n d s paid or received, including accrued interest.
6. M a t c h e d - b o o k data reflect financial intermediation activity in w h i c h the b o r r o w i n g and
lending transactions are m a t c h e d . M a t c h e d - b o o k data are included in the financing breakd o w n s given above. T h e reverse repurchase and repurchase n u m b e r s are not always equal
because of the " m a t c h i n g " of securities of different values or different types of collateralization.
NOTE, " n . a . " indicates that data are not published because of insufficient activity.
M a j o r c h a n g e s in the report f o r m tiled by primary dealers induced a break in the dealer data
series as of the week e n d i n g July 6, 1994.
A30
1.44
DomesticNonfinancialStatistics • August 1996
FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES
Debt Outstanding
Millions of dollars, end of period
1996
1995
1992
Agency
1993
1994
1995
Nov.
1 F e d e r a l a n d f e d e r a l l y s p o n s o r e d agencies
2 Federal agencies
3
Defense Department 1
4
Export-Import Bank 2 ' 3
Federal Housing Administration 4
5
Government National Mortgage Association certificates of
6
participation 5
Postal Service 6
7
8
Tennessee Valley Authority
United States Railway Association 6
9
10 Federally sponsored agencies 7
Federal Home Loan Banks
11
Federal H o m e Loan Mortgage Corporation
1?
n
Federal National Mortgage Association
14
Farm Credit Banks 8
15
Student Loan Marketing A s s o c i a t i o n 9
Financing Corporation 10
16
Farm Credit Financial Assistance C o r p o r a t i o n "
17
Resolution Funding Corporation 1 "
18
n.a.
n.a.
Dec.
n.a.
Jan.
n.a.
Feb.
483,970
570,711
738,928
41.829
7
7.208
374
45.193
6
5.315
255
39,186
6
3,455
116
37,347
6
2,050
97
39.207
6
2.512
93
37,347
6
2,050
97
37,273
6
2,050
31
31,986
6
2,050
35
n.a.
10.660
23,580
n.a.
n.a.
9,732
29,885
n.a.
n.a.
8,073
27,536
n.a.
n.a.
5.765
29,429
n.a.
n.a.
7.265
29.331
n.a.
n.a.
5,765
29,429
n.a.
n.a.
5,765
29,421
n.a.
n.a.
300
29.595
n.a.
442,141
114.733
29,631
166,300
51,910
39,650
8,170
1.261
29.996
523,452
139.512
49,993
201,112
53,123
39.784
8,170
1,261
29,996
699,742
205,817
93,279
257,230
53,175
50,335
8,170
1,261
29,996
807.264
243.194
119,961
299,174
57,379
47,529
8.170
1.261
29,996
791.660
239.034
115,603
289.768
56.694
50,535
8.170
1,261
29.996
807,264
243,194
119,961
299,174
57,379
47,529
8,170
1,261
29.996
799,547
234,664
120,868
297,657
58,659
47,673
8,170
1,261
29,996
808,398
233,404
123,777
304,159
57,536
49,495
8,170
1,261
29,996
154,994
128,187
103,817
78,681
81,693
78,681
78,512
68,037
7.202
10.440
4.790
6.975
n.a.
5,309
9.732
4,760
6.325
n.a.
3,449
8.073
n.a.
3,200
n.a.
2,044
5,765
n.a.
3,200
n.a.
2,506
7,265
n.a.
3,200
n.a.
2,044
5,765
n.a.
3,200
n.a.
2,044
5,765
n.a.
3,200
n.a.
2,044
300
n.a.
n.a.
n.a.
42,979
18.172
64.436
38,619
17.578
45.864
33.719
17.392
37.984
21,015
17,144
29,513
21.015
17.141
30,566
21.015
17,144
29,513
21,015
17,026
29,462
21,015
17,040
27,638
Mar.
n.a.
n.a.
815,523
239,253
124,278
306,815
59,428
• 45,723
8,170
1,261
29,996
MEMO
19 F e d e r a l F i n a n c i n g B a n k d e b t 1 3
2(1
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 H o m e Administration
26 Rural Electrification Administration
27 Other
agencies
1. Consists of mortgages assumed by the Defense Department between 1957 and 1963
under family housing and homeowners assistance programs.
2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976.
3. 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 f r o m the FFB, which is shown on line 22.
n.a.
10. The Financing Corporation, established in August 1987 to recapitalize the Federal
Savings and Loan Insurance Corporation, undertook its first borrowing in October 1987.
11. The Farm Credit Financial Assistance Corporation, established in January 1988 to
provide assistance to the Farm Credit System, undertook its first borrowing in July 1988.
12. The Resolution Funding Corporation, established by the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989, undertook its first borrowing in October 1989.
13. The FFB, which began operations in 1974, is authorized to purchase or sell obligations
issued, sold, or guaranteed by other federal agencies. Because FFB incurs debt solely for the
purpose of lending to other agencies, its debt is not included in the main portion of the table to
avoid double counting.
14. Includes FFB purchases of agency assets and guaranteed loans; the latter are loans
guaranteed by numerous agencies, with the amounts guaranteed by any one agency generally
being small. The Farmers Home Administration entry consists exclusively of agency assets,
whereas the Rural Electrification Administration entry consists of both agency assets and
guaranteed loans.
Securities Market and Corporate Finance
1.45
NEW SECURITY ISSUES
A31
Tax-Exempt State and Local Governments
Millions of dollars
1996
1995
Type of issue or issuer,
or use
1993
1994
1995
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
1 All issues, n e w a n d r e f u n d i n g '
279,945
153,950
143,101
13,898
16,839
16,978
11,545
11,598
15,244
13,199
14,991
By type of issue
2 General obligation
3 Revenue
90,599
189,346
54,404
99,546
55,737
86,555
6,184
7,714
6,194
10,645
5,489
11,489
6,074
5,471
2,063
9,535
4,846
10,398
5,083
8,116
5,476
9,515
By type of issuer
4 State
5 Special district or statutory authority 2
6 Municipality, county, or township
27,999
178,714
73,232
19,186
95,896
38,868
14,215
91,419
36,658
1,825
8,155
3,918
1,491
10,736
4,612
951
11,678
4,349
1,630
7,052
2,863
695
7,820
3,083
904
10,141
4,199
926
9,571
2,702
2,807
9,824
2,360
91,434
105,972
94,412
7,868
11,415
11,070
6,517
6,383
10,621
9,487
9,594
16,831
9,167
12,014
13,837
6,862
32,723
21,267
10,836
10,192
20,289
8,161
35,227
24,926
11,887
9,618
18,612
6,566
26,518
1,785
367
1,780
1,716
227
1,993
3,377
1,469
554
2,177
650
3,188
2,968
1,178
1,664
1,614
1,325
2,321
2,065
573
439
935
322
2,183
2,226
359
582
904
110
2,202
1,847
1,417
892
2,715
785
2,965
2,142
682
592
1,669
751
3,651
2,442
778
1,368
1,764
302
2,940
beginning
January
7 Issues f o r n e w capital
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
NEW SECURITY ISSUES
SOURCE.
Securities
Data
Dealer's Digest before then.
Company
1993;
Investment
U.S. Corporations
Millions of dollars
1996
1995
Type of issue, offering,
or issuer
1993
1994
1995
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
1 All issues'
769,088
583,240
n.a.
57,262
52,112
55,349
40,149
47,394 r
60,715 r
54,524 r
44,978
2 Bonds2
646,634
498,039
n.a.
49,905
43,452
47,568
34,619
42,643 r
51,560 r
47,356 r
32,500
By type of offering
3 Public, domestic
4 Private placement, domestic"
5 Sold abroad
487,029
121,226
38,379
365,222
76,065
56,755
408,806
n.a.
76,910
43,137
n.a.
6,768
36,692
n.a.
6,760
43,336
n.a.
4,232
32,219
n.a.
2,399
33,882 r
n.a.
8,761
44,904
n.a.
6,656 r
40,612 r
n.a.
6,744
27,000
n.a.
5,500
88,160
58,559
10,816
56,330
31,950
400,820
43,423
40,735
6,867
13,322
13,340
380,352
42,950
37,139
5,727
11,974
18,158
369,769
3,284
2,607
908
911
2,829
39,365
3,397
3,532
187
1,241
2,389
32,706
4,017
4,178
225
485
3,333
35,330
3,205
3,099
1,240
685
648
25,742
3,809 r
2,151
664
1,821
748
33,450 r
2,472
2,601
584 r
955
2,691
42,258
3,210
3,852
57
678
1,873
37,686 r
2,210
3,064
120
471
535
26,100
122,454
85,155
n.a.
7,357
8,660
7,781
5,530
4,756 r
9,160 r
7,393 r
12,478
18,897
82,657
20,900
12,570
47,828
24,800
1,035
6,322
n.a.
836
7,824
n.a.
2,210
5,571
n.a.
890
4,640
n.a.
2,167
2,589 r
n.a.
3,258
5,902 r
n.a.
967
6,426 r
n.a.
2,000
10,478
n.a.
22,271
25,761
2,237
7,050
3,439
61,004
17,798
15,713
2,203
2,214
494
46,733
2,383
2,801
32
190
47
1,905
1,815
4,628
39
60
0
2,118
2,209
3,274
97
36
0
2,166
681
2,632
156
322
0
1,739
295 r
2,52 r
38
115
200
1,588
l,543 r
2,659 r
141
809
122
3,719 r
2.036 r
3,577 r
232 r
319
100 r
1,130
3,966
4,112
37
149
144
4,070
6
7
8
9
10
11
By industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
12 S t o c k s 2
By type of offering
13 Public preferred
14 C o m m o n
15 Private placement 3
16
17
18
19
20
21
By industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
10,964
57,809
n.a.
1. Figures represent gross proceeds of issues maturing in more than one year; they are the
principal amount or number of units calculated by multiplying by the offering price. Figures
exclude secondary offerings, employee stock plans, investment companies other than closedend, intracorporate transactions, equities sold abroad, and Yankee bonds. Stock data include
ownership securities issued by limited partnerships.
2. Monthly data cover only public offerings.
3. Monthly data are not available.
SOURCE. Beginning July 1993, Securities Data Company and the Board of Governors of
the Federal Reserve System.
A32
DomesticNonfinancialStatistics • August 1996
1.47
O P E N - E N D INVESTMENT COMPANIES
Net Sales and Assets'
Millions of dollars
1995
Item
1994
1996
1995
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
1 Sales of o w n s h a r e s 2
841,286
871,415
68,694
72,730
70,499
94,719
112,332
90,370
93,856
101,847
2 Redemptions of own shares
3 Net sales 3
699,823
141,463
699,497
171,918
54,473
14,221
56,174
16,556
52,727
17,772
67,945
26,774
75,354
36,978
60,398
29,972
65,748
28,108
81,008
20,839
1,550,490
2,067,337
1,962,817
1,963,496
2,032,958
2,067,337
2,143,185
2,181,711
2,212,517 r
2,292,722
121,296
1,429,195
142,572
1,924,765
127,446
1,835,371
133,653
1,829,843
141,489
1,891,470
142,572
1,924,765
150,772
1,992,414
144,520
2,037,191
142,697
2,069,820
148,794
2,143,928
4 Assets 4
5
5 Cash
6 Other
1. Data on sales and redemptions exclude money market mutual funds but include
limited-maturity municipal bond funds. Data on asset positions exclude both money market
mutual f u n d s and limited-maturity municipal bond funds.
2. Includes reinvestment of net income dividends. Excludes reinvestment of capital gains
distributions and share issue of conversions f r o m one fund to another in the same group.
3. Excludes sales and redemptions resulting f r o m transfers of shares into or out of money
market mutual funds within the same fund family.
1.48
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 C o m p a n y Institute. Data based on reports of membership, which
comprises substantially all o p e n - e n d investment companies registered with the Securities and
Exchange Commission. Data reflect underwritings of newly formed companies after their
initial offering of securities.
CORPORATE PROFITS AND THEIR DISTRIBUTION
Billions of dollars; quarterly data at seasonally adjusted annual rates
1994
Account
1 Profits with inventory valuation and
capital consumption adjustment
2 Profits before taxes
3 Profits-tax liability
4 Profits after taxes
5
Dividends
6
Undistributed profits
7 Inventory valuation
8 Capital consumption adjustment
SOURCE. U.S. Department of Commerce, Survey of Current
1993
1994
1995
1996
1995
Q2
Q3
Q4
Qi
Q2
Q3
Q4
Qi
464.5
464.3
163.8
300.5
197.3
103.3
526.5
528.2
195.3
332.9
211.0
121.9
588.6
600.8
218.7
382.1
227.4
154.7
531.5
523.2
192.8
330.4
208.8
121.7
549.8
547.5
203.4
344.1
212.5
131.6
568.9
570.4
213.5
356.8
218.5
138.3
559.6
594.1
217.3
376.8
221.7
155.1
561.1
588.4
214.2
374.1
224.6
149.6
614.9
609.6
224.5
385.1
228.5
156.6
618.6
611.0
218.7
392.3
234.7
157.6
652.0
649.0
233.4
415.6
239.9
175.7
-6.6
6.7
-13.3
11.6
-28.1
15.9
-9.8
18.1
-16.5
18.8
-22.8
21.3
-51.9
17.4
-42.3
15.0
-9.3
14.6
-8.8
16.5
— 17.4 r
20.4 r
Business.
Securities Markets and Corporate Finance
1.51
DOMESTIC FINANCE COMPANIES
A3 3
Assets and Liabilities'
Billions of dollars, end of period; not seasonally adjusted
1994
Account
1994
1993
1995
1995
Q2
Q3
Q4
QI
Q2
Q3
Q4
ASSETS
1 Accounts receivable, gross 2
2
Consumer
Business
3
4
Real estate
482.8
116.5
294.6
71.7
551.0
134.8
337.6
78.5
614.6
152.0
375.9
86.6
511.3
124.3
313.2
73.8
524.1
130.3
317.2
76.6
551.0
134.8
337.6
78.5
568.5
135.8
351.9
80.8
586.9
141.7
361.8
83.4
594.7
146.2
362.4
86.1
614.6
152.0
375.9
86.6
50.7
11.2
55.0
12.4
63.2
14.1
51.9
12.1
51.1
12.1
55.0
12.4
58.9
12.9
62.1
13.7
61.2
13.8
63.2
14.1
7 Accounts receivable, net
8 All other
420.9
170.9
483.5
183.4
537.3
210.7
447.3
174.6
460.9
177.2
483.5
183.4
496.7
194.6
511.1
198.1
519.7
198.1
537.3
210.7
9 Total assets
591.8
666.9
748.0
621.9
638.1
666.9
691.4
709.2
717.8
748.0
25.3
159.2
21.2
184.6
23.1
184.5
23.3
171.2
21.6
171.0
21.2
184.6
21.0
181.3
21.5
181.3
21.8
178.0
23.1
184.5
42.7
206.0
87.1
71.4
51.0
235.0
99.5
75.7
62.3
284.7
106.2
87.2
44.7
219.6
89.9
73.2
50.0
228.2
95.0
72.3
51.0
235.0
99.5
75.7
52.5
254.4
102.5
79.7
57.5
264.4
102.1
82.5
59.0
272.1
102.4
84.4
62.3
284.7
106.2
87.2
591.8
666.9
748.0
621.9
638.1
666.9
691.4
709.2
717.8
748.0
5 LESS; Reserves for unearned income
6
Reserves for losses
LIABILITIES AND CAPITAL
10 Bank loans
11 Commercial paper
12
13
14
15
Debt
O w e d to parent
Not elsewhere classified
All other liabilities
Capital, surplus, and undivided profits
16 Total liabilities a n d c a p i t a l
1. Includes finance company subsidiaries of bank holding companies but not of retailers
and banks. Data are amounts carried on the balance sheets of finance companies; securitized
pools are not shown, as they are not on the books.
1.52
DOMESTIC FINANCE COMPANIES
2. Before deduction for unearned income and losses,
Consumer, Real Estate, and Business Credit'
Millions of dollars, amounts outstanding, end of period
19 96
1995
Type of credit
1993
1995
Nov.
Dec.
Jan.
Feb.
Mar.'
Apr.
Seasonally adjusted
1 Total
2 Consumer
3 Real estate 2
4 Business
546,103 r
615,618 r
691,616 r
687,894 r
691,616 r
696,099 r
700,977 r
702,925
707,741
160,227 r
72,043 r
313,833 r
176,085 r
78,910 r
360,624 r
198,861 r
87,077 r
405,678 r
196,773 r
87,550 r
403,57 l r
198,861 r
87,077 r
405,678'
200,162'
88,084'
407,853'
202,548'
88,188'
410,241'
203,280
89,502
410,144
205,184
89,943
412,614
Not seasonally adjusted
5 Total
6 Consumer
Motor vehicles
7
8
Other consumer 3
Securitized motor vehicles 4
9
10
Securitized other consumer 4
11 Real estate 2
12 Business
Motor vehicles
13
14
Retail 5
Wholesale 6
15
Leasing
16
Equipment
17
Retail
18
19
Wholesale 6
Leasing
20
21
Other business 7
22
Securitized business assets 4
23
Retail
24
Wholesale
Leasing
25
550,751
620,975
697,340
687,944
697,340
697,312
701,576 r
705,173
710,154
162,770
56,057
60,396
36,024
10,293
71,727
316,254
95,173
18,091
31,148
45,934
145,452
35,513
8,001
101,938
53,997
21,632
2,869
10,584
8,179
178,999
61,609
73,221
31,897
12,272
78,479
363,497
118,197
21,514
35,037
61,646
157,953
39,680
9,678
108,595
61,495
25,852
4,494
14,826
6,532
202,101
70,061
81,988
33,633
16,419
86,606
408,633
133,277
25,304
36,427
71,546
177,297
48,843
10,266
118,188
65,363
32,696
4,723
21,327
6,646
198,072
68,167
78,926
34,394
16,585
87,672
402,200
129,708
24,564
33,519
71,625
173,183
44,194
10,889
118,100
66,678
32,631
4,974
21,208
6,449
202,101
70,061
81,988
33,633
16,419
86,606
408,633
133,277
25,304
36,427
71,546
177,297
48,843
10,266
118,188
65,363
32,696
4,723
21,327
6,646
201,774
71,420
81,186
32,128
17,040
88,495
407,043
132,062
25,906
34,198
71,958
175,984
48,737
9,260
117,987
66,643
32,354
4,467
21,130
6,757
202,108
73,312
81,214
30,364
17,218
88,520
410,948'
132,153
26,591
33,386
72,176
176,461'
48,660
8,914
118,887'
68,070
34,264
4,252
23,460
6,552
202,337
72,129
79,779
31,093
19,336
89,056
413,780
133,621
26,663
33,910
73,048
177,285
48,696
9,213
119,376
69,497
33,377
4,067
22,622
6,688
203,532
73,810
79,489
30,476
19,757
89,975
416,647
133,892
27,346
32,155
74,391
178,507
47,913
9,663
120,931
69,193
35,055
4,367
24,327
6,361
1. Includes finance company subsidiaries of bank holding companies but not of retailers
and banks. Data are before deductions for unearned income and losses. Data in this table also
appear in the Board's G.20 (422) monthly statistical release. For ordering address, see inside
front cover.
2. Includes all loans secured by liens on any type of real estate, for example, first and junior
mortgages and home equity loans.
3. Includes personal cash loans, mobile home loans, and loans to purchase other types of
consumer goods such as appliances, apparel, general merchandise, and recreation vehicles.
4. Outstanding balances of pools upon which securities have been issued; these balances
are no longer carried on the balance sheets of the loan originator.
5. Passenger car fleets and commercial land vehicles for which licenses are required.
6. Credit arising from transactions between manufacturers and dealers, that is, floor plan
financing.
7. Includes loans on commercial accounts receivable, factored commercial accounts, and
receivable dealer capital; small loans used primarily for business or farm purposes; and
wholesale and lease paper for mobile homes, campers, and travel trailers.
A34
1.53
DomesticNonfinancialStatistics • August 1996
MORTGAGE MARKETS
Mortgages on New Homes
Millions of dollars except as noted
1996
1995
Item
1993
1994
1995
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
Terms and yields in primary and secondary markets
PRIMARY
1
2
3
4
5
MARKETS
Terms1
Purchase price (thousands of dollars)
Amount of loan (thousands of dollars)
Loan-to-price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount)*
Yield (percent per year)
6 Contract rate 1
7 Effective rate 1 , 3
8 Contract rate ( H U D series) 4
SECONDARY
163.1
123.0
78.0
26.1
1.30
170.4
130.8
78.8
27.5
1.29
175.8
134.5
78.6
27.7
1.21
178.6
136.4
78.9
27.7
1.22
181.7
140.9
79.1
27.6
1.21
179.2
135.8
77.3
27.7
1.07
181.7
143.2
80.3
27.8
1.24
184.5
141.5
77.8
26.4
1.3(1
175.2
133.2
78.4
27.1
1.17
179.5
137.6
79.3
27.2
1.16
7.03
7.24
7.37
7.26
7.47
8.58
7.65
7.85
8.05
7.27
7.46
7.46
7.20
7.40
7.30
7.15
7.32
7.23
7.00
7.20
7.56
7.25
7.49
7.97
7.57
7.76
8.22
7.61
7.80
8.34
7.46
6.65
8.68
7.96
8.18
7.57
7.51
7.01
7.52
6.82
7.11
6.71
7.57
6.85
8.09
7.40
8.52
7.63
8.57
7.81
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
Mortgage holdings (end of
11 Total. .
12
FHA/VA insured
13
Conventional
ASSOCIATION
period)
190,861
23,857
167,004
222.057
27,558
194,499
253.51 1
28,762
224.749
249,928
28,901
221,027
253.511
28.762
224.749
255.619
28,622
226,997
257.970
28.502
229.468
262.014
28,744
233.270
263.809
29.132
234,677
267,330
30,442
236.888
14 Mortgage transactions purchased (during period) . . .
92,037
62,389
56,598
6.148
6,243
4,810
5.371
7.681
5.339
6,720
Mortgage
15 Issued 7
16 To sell 8
92,537
5,097
54.038
1.820
56.092
360
6.038
10
4,765
0
5.750
3
7,013
0
6.293
29
5,599
0
5.228
13
55,012
321
54,691
72,693
276
72,416
107.424
267
107.157
102.997
271
102.726
107.424
267
107.157
111,143
226
110.917
114,793
223
114,570
117,420
220
117.200
119,520
216
119,304
121.058
212
120,846
229,242
208,723
124,697
117,110
98,470
85,877
9,989
9,011
13,108
11,712
13.357
11.624
10,891
9.733
11.9X4
1 1.384
12,740
11.958
12,385
11.904.
274,599
136.067
118,659
11,339
14,609
12,765
10.378
14.520
13.009
11.075
commitments
(during
period)
FEDERAL HOME LOAN MORTGAGE
CORPORATION
Mortgage holdings (end of period f
17 Total
18
FHA/VA insured
19
Conventional
Mortgage transactions
20 Purchases
21 Sales
(during
period)
22 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; from U.S.
Department of Housing and Urban Development (HUD). Based on transactions on the first
day of the subsequent month.
5. Average gross yield on thirty-year, m i n i m u m - d o w n p a y m e n t first mortgages insured
by the Federal Housing Administration ( F H A ) for immediate delivery in the private
secondary market. Based on transactions on first day of subsequent m o n t h .
6. Average net yields to investors on fully modified pass-through securities backed by
mortgages and guaranteed by the Government National Mortgage Association (GNMA),
assuming prepayment in twelve years on pools of thirty-year mortgages insured by the
Federal Housing Administration or guaranteed by the Department of Veterans Affairs.
7. Does not include standby commitments issued, but includes standby commitments
converted.
8. Includes participation loans as well as whole loans.
9. Includes conventional and government-underwritten loans. The Federal Home Loan
Mortgage Corporation's mortgage commitments and mortgage transactions include activity
under mortgage securities sw ap programs, whereas the corresponding data for FN MA
exclude swap activity.
Real Estate
1.54
A3 5
MORTGAGE DEBT OUTSTANDING 1
Millions of dollars, end of period
1996
1995
Type of holder and property
1992
1994
1993
Qi
Q2
Q3
Q4
Qlp
1 All h o l d e r s
4,092,984
4,268,420 r
4,473,100 r
4,515,854"
4,584,566'
4,663,864"
4,715,884
4,773,998
By type of property
One- to tour-tamilv residences
3 Multit'amily residences
4 Commercial
5
3.037,408
274,234
700,604
80.738
3,227.134 r
270.796
689.296
81,194
3,430,023 r
275.303 r
684.803
82,971
3,465.065'
276,398
690,988
83,403
3.524,378'
280,390
695,947
83,850
3,593,966'
284,238'
701,241'
84.420
3,634,698
288,090
708,467
84,629
3,682,610
292,448
713,751
85,189
1,769.187
894,513
507.780
38,024
328,826
19,882
627,972
489.622
69,791
68,235
324
246,702
11,441
27,770
198,269
9,222
1,767.835
940,444
556,538
38.635
324,409
20,862
598,330
469,959
67,362
60,704
305
229,061
9.458
25,814
184,305
9,484
1,815,810
1,004,280
611.697
38,916
331,100
22,567
596,199
477.499
64.400
54.011
289
215,332
7.910
24,306
173,539
9,577
1,841,815
1,024.854
625.378
39,746
336,795
22,936
601,777
483,625
63,778
54,085
288
215.184
7,892
24,250
173,142
9,900
1,868.175
1,053,048
648,705
40,593
340,176
23,575
599,745
482,005
64,404
53,054
282
215,382
7,911
24,310
173,565
9,596
1,895,285
1.072,780
662,126
43,003
343,826
23,824
604,614
489,150
63,569
51,604
291
217,892
8,006
24,601
175,643
9,643
1,890,539
1,080,373
663,588
43,846
349,109
23,829
596,789
482.765
61.926
51.809
288
213,377
7,833
24,070
171,855
9,619
1,895,878
1,087,174
666,306
45,201
351,736
23,931
595,903
484,020
60,494
51,089
299
212,801
7,815
24,013
171,445
9,528
286.263
30
30
0
41,695
16,912
10.575
5,158
9,050
12,581
5,153
7,428
32.045
12,960
9,621
9,464
0
0
0
0
0
0
137,584
124,016
13.568
28.664
1.687
26,977
33,665
31,032
2,633
327,014 r
22
15
7
41,386
15.303
10.940
5,406
9.739
12,215
5,364
6.851
17.284
7,203
5,327
4,754
0
14,112
2,367
1,426
10,319
0
166,642
151,310
15,332
28,460
1.675
26.785
46,892 r
44,345 r
2,547
319.401'
6
6
0
41,781
13,826
11,319
5,670
10,966
10,964
4,753
6,211
10,428
5,200
2,859
2,369
0
7,821
1,049
1,595
5.177
0
178.059
162,160
15,899
28,555
1,671
26.885
41.786 r
38,956 r
2,830
317,753'
15
15
0
41.857
13.507
11,418
5,807
11,124
10.890
4,715
6.175
9,342
4,755
2,494
2.092
0
6,730
840
1,310
4,580
0
177,615
161.780
15,835
28,065
1,651
26.414
43.239 r
40,105'
3,134
315,722'
7
7
0
41.917
13,217
11.512
5,949
11,239
10,098
4.838
5,260
6,456
2,870
1.940
1,645
0
6,039
731
1,135
4,173
0
178,462
162,674
15,788
28,005
1,648
26,357
44,738'
41.477'
3,261
319,923'
2
2
0
41,858
12,914
11,557
6,096
11,291
9,535
4,918
4,617
4,889
2,299
1,420
1,170
0
5,015
618
722
3,674
0
182,229
166,393
15,836
28,151
1.656
26,495
48,243'
44,809'
3.434
320,828
2
2
0
41.791
12,643
11,617
6,248
11,282
9,809
5,180
4,629
1.864
691
647
525
0
4,303
492
428
3,383
0
183,782
168,122
15,660
28,428
1,673
26,755
50,849
46,997
3,852
322,131
2
2
0
41,594
12,327
11,636
6,365
11,266
8,439
4,228
4,211
0
0
0
0
0
5,553
1.848
560
3,145
0
183,531
167,895
15.636
28,891
1,700
27,191
54,120
50,058
4,062
1,434,264
419,516
410,675
8.841
407,514
401.525
5.989
444,979
435,979
9,000
38
8
0
17
13
162,217
140,718
6,305
15,194
0
1,564.57 l r
414.066
404,864
9,202
447,147 r
442,612 r
4.535
495,525
486,804
8,721
28
5
0
13
10
207.806
173,635
8,701
25,469
0
l,718,297 r
450,934
441,198
9,736
490,85 l r
487,725 r
3,126
530.343
520,763
9,580
19
3
0
9
7
246.1501"
194,45 l r
14,925
36,774
0
1,731,468'
454,401
444,632
9,769
492,194'
489,114'
3,080
533,262
523,903
9,359
14
2
0
7
5
251.597'
198,040'
15,743
37.814
0
1,759,091'
457,101
446,855
10,246
498,216'
495,182'
3,034
543,669
533,091
10,578
13
i
0
6
5
260,093'
202,718'
17,281
40,094
0
1,795,041'
463,654
453,114
10,540
503.370'
500.417'
2,953
559.585
548,400
11,185
12
5
5
268,420'
207,679'
18,903
41,838
0
1,853,613
472,298
461,453
10,845
515,051
512,238
2,813
582,959
569,724
13,235
11
2
0
5
4
283,294
214,635
21,279
47,380
0
1,895,309
475,823
464,644
11,179
524,326
521,721
2,605
599,546
585,527
14,019
10
1
0
5
4
295,604
220,022
24,477
51,104
0
603,270
447,871
64,688
75,441
15.270
609,000 r
455,676 r
65.397
73,917
14.009
619,592'
461.157'
69,601'
76.153
12.681
624,819'
465,111'
70,305
76,667
12,736
641,578'
480,447'
71,050'
77,284
12,796
653,615'
491,463'
71,897'
77,384'
12,872
650,904
486,660
73,243
78,152
12,850
660,680
494,495
74,354
78,861
12,970
B\ type of holder
6 Major financial institutions
Commercial b a n k s 7
X
One- to four-familv
9
Multifamilv
Commercial
10
1 1
Farm
Savings institutions
12
One- to four-familv
13
14
Multifamilv
Commercial
15
Farm
16
17
Life insurance companies
18
One- to tour-family
19
Multit'amily
20
Commercial
21
Farm
22 Federal and related agencies
Government National Mortgage Association
23
24
One- to four-familv
Multit'amily
25
26
Farmers Home Administration 4
One- to four-familv
27
Multifamilv
28
Commercial
29
30
Farm
Federal Housing and Veterans' Administrations
31
One- to four-family
32
33
Multifamilv
34
Resolution Trust Corporation
One- to four-familv
35
Multit'amily
36
37
Commercial
38
Farm
39
Federal Deposit Insurance Corporation
40
One- to four-familv
41
Multit'amily
Commercial
42
43
Farm
44
Federal National Mortgage Association
One- to four-family
45
46
Multifamilv
Federal Land Banks
47
48
One- to four-familv
49
Farm
50
Federal Home Loan Mortgage Corporation
51
One- to four-family
52
Multit'amily
53 Mortgage pools or trusts'
54
Government National Mortgage Association
55
One- to four-family
56
Multit'amily
57
Federal Home Loan Mortgage Corporation
58
One- to four-family
59
Multit'amily
60
Federal National Mortgage Association
61
One- to four-family
Multifamily
62
Farmers Home Administration 4
63
64
One- to four-family
Multifamily
65
66
Commercial
67
Farm
68
Private mortgage conduits
69
One- to four-family
Multifamily
70
71
Commercial
72
Farm
73 Individuals and others 6
74
One- to four-familv
Multifamily
75
76
Commercial
77
Farm
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
F m H A mortgage pools to F m H A mortgage holdings in 1986:Q4 because of accounting
changes by the Farmers Home Administration.
5. Outstanding principal balances of mortgage-backed securities insured or guaranteed by
the agency indicated.
6. Other holders include mortgage companies, real estate investment trusts, state and local
credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and
finance companies.
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.
A36
1.55
DomesticNonfinancialStatistics • August 1996
CONSUMER INSTALLMENT CREDIT 1
Millions of dollars, amounts outstanding, end of period
1995 r
Holder and type of credit
1993'
1994 r
1996 r
1995 r
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
Seasonally adjusted
1 Total
844,118
966,457
1,103,164
1,094,352
1,103,164
1,113,509
1,124,253
1,133,642
1,140,181
2 Automobile
3 Revolving
4 Other 2
279,786
287,011
277,321
317,182
339,337
309,939
351,052
413,894
338,218
347,234
407,381
339,737
351,052
413,894
338,218
352,461
419,030
342,018
354,810
425,778
343,666
356,310
431,196
346,136
359,507
438,460
342,214
Not seasonally adjusted
5 Total
863,924
990,247
1,131,747
1,101,356
1,131,747
1,123,813
1,121,348
1,123,315
1,129,433
By major holder
Commercial banks
Finance companies
Credit unions
Savings institutions
Nonfinancial business 3
Pools of securitized assets 4
399,683
116,453
101,634
37,855
77,229
131,070
462,923
134,830
119,594
38,468
86,621
147,811
507,414
152,624
131,939
40,106
85,061
214,603
495,978
147,093
130,940
40,505
77,948
208,892
507,414
152,624
131,939
40,106
85,061
214,603
502,400
152,606
131,257
40,000
80,733
216,817
500,140
154,365
130,839
40,000
78,138
217,866
499,762
151,749
130,837
40,000
76,681
224,286
504,652
153,299
131,873
39,999
73,765
225,845
By major type of credi?
12 Automobile
13
Commercial banks
14
Finance companies
15
Pools of securitized assets 4
281,538
122,000
56,057
39,561
319,715
141,895
61,609
36,376
354,260
149,094
70,626
44,616
351,029
147,995
68,167
44,691
354,260
149,094
70,626
44,616
351,969
148,186
71,420
42,569
352,583
147,703
73,312
41,755
352,634
148,455
72,129
42,868
355,073
150,455
73,810
40,596
16 Revolving
1/
Commercial banks
18
Nonfinancial business 3
19
Pools of securitized assets 4
302,201
149,920
50,125
80,242
357,307
182,021
56,790
96,130
435,674
210,298
53,525
147,934
410,493
197,088
48,536
141,934
435,674
210,298
53,525
147,934
426,024
200,080
50,520
151,640
424,657
198,886
48,613
153,390
425,823
196,836
47,416
157,690
431,733
201,858
44,526
161,185
20 Other
21
Commercial banks
22
Finance companies
23
Nonfinancial business 3
24
Pools of securitized assets 4
280,185
127,763
60,396
27,104
11,267
313,225
139,007
73,221
29,831
15,305
341,813
148,022
81,998
31,536
22,053
339,834
150,895
78,926
29,412
22,267
341,813
148,022
81,998
31,536
22,053
345,820
154,134
81,186
30,213
22,608
344,108
153,551
81,053
29,525
22,721
344,858
154,471
79,620
29,265
23,728
342,627
152,339
79,489
29,239
24,064
6
7
8
9
10
11
1. The Board's series on amounts of credit covers most short- and intermediate-term credit
extended to individuals that is scheduled to be repaid (or has the option of repayment) in two
or more installments. Data in this table also appear in the B o a r d ' s G.19 (421) monthly
statistical release. For ordering address, see inside front cover.
2. Comprises mobile home loans and all other installment loans that are not included in
automobile or revolving credit, such as loans for education, boats, trailers, or vacations. These
loans may be secured or unsecured.
1.56
3. Includes retailers and gasoline companies.
4. Outstanding balances of pools upon which securities have been issued; these balances
are no longer carried on the balance sheets of the loan originator.
5. Totals include estimates for certain holders for which only consumer credit totals are
available.
TERMS OF CONSUMER INSTALLMENT CREDIT 1
Percent per year except as noted
1995
Item
1993
1994
1996
1995
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
INTEREST RATES
Commercial
banks2
1 48-month new car
2 24-month personal
8.09
13.47
8.12
13.19
9.57
13.94
n.a.
n.a.
9.36
13.80
n.a.
n.a.
n.a.
n.a.
9.12
13.63
n.a.
n.a.
Credit card plan
3 All accounts
4 Accounts assessed interest
n.a.
n.a.
15.69
15.77
16.02
15.79
n.a.
n.a.
15.81
15.71
n.a.
n.a.
n.a.
n.a.
15.82
15.41
n.a.
n.a.
n.a.
Auto finance
5 N e w car
6 Used car
9.48
12.79
9.79
13.49
11.19
14.48
10.89
14.06
10.84
13.98
10.52
13.83
9.74
13.27
9.86
13.28
9.77
13.19
9.64
13.26
54.5
48.8
54.0
50.2
54.1
52.2
54.6
52.3
54.5
52.2
53.6
51.8
51.8
52.2
52.3
52.1
51.8
52.0
51.5
51.8
91
98
92
99
92
99
92
99
92
99
92
99
92
99
91
98
91
98
91
99
14,332
9,875
15,375
10,709
16,210
11,590
16,430
11,883
16,583
12,012
17,034
12,152
16,698
12,059
16,627
11,990
16,520
11,934
16,605
12,024
companies
OTHER
Maturity
7 N e w car
8 Used car
TERMS1
(months)
Loan-to-value
9 N e w car
10 Used car
ratio
Amount financed
11 N e w car
12 Used car
(dollars)
1. The B o a r d ' s series on amounts of credit covers most short- and intermediate-term credit
extended to individuals that is scheduled to be repaid (or has the option of repayment) in two
or more installments. Data in this table also appear in the Board's G.19 (421) monthly
statistical release. For ordering address, see inside front cover.
2. Data are available for only the second month of each quarter,
3. At auto finance companies,
Flow of Funds
1.57
F U N D S R A I S E D I N U.S. C R E D I T
A37
MARKETS1
Billions of dollars; quarterly data at seasonally adjusted annual rates
1995 r
1994
Transaction category or sector
1991
1996
1992
Q4
Q3
Ql
Q2
880.4
888.3
Q3
Q4
Ql
578.2
863.5
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial s e c t o r s . . . .
By sector and instrument
? U.S. government
Treasury securities
Budget agency issues and mortgages
4
481.7
R
R
543.0
628.5
R
618.9
R
732.9
587.6
R
634.8
R
584.8
278.2
292.0
-13.8
304.0
303.8
.2
256.1
248.3
7.8
155.9
155.7
.2
144.4
142.9
1.5
135.6
132.8
2.9
150.1
155.7
-5.7
266.8
268.0
-1.2
202.8
201.2
1.6
65.8
65.4
.4
42.4
37.2
5.1
288.7
291.0
-2.3
203.5 r
239.0 r
372.3 r
463.1 r
588.5
452.0 r
484.7 r
613.6
685.6
519.1
535.9
574.8
i?
n
14
15
16
By instrument
Municipal securities
Corporate bonds
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Consumer credit
Bank loans n.e.c
Commercial paper
Other loans and advances
87.8
78.8
158.4
173.6
-5.5
-10.0
.4
- 13.7r
-40.9
-18.4
-48.5
30.5
67.6
130.9
187.6
-10.4
-47.8
1.4
5.0 r
-13.7
8.6
10.1
74.8
75.2
157.2
187.9
-6.0
-25.0
.5
61.5 r
3.8
10.0
-10.2
-29.3
23.3
194.3 r
202.4 r
1.3
-11.1
1.8
124.9 r
73.l r
21.4
55.4
-41.3
73.3
237.5
204.7
11.0
20.1
1.7
142.9
103.0
18.1
54.9
-58.4
15.4
205.5 r
210.3 r
5.6
-12.7
2.2
133.8 r
92. r
28.5 r
35.1
-53.8
6.2
210.6 r
216.8 r
-4.2
-3.4
1.4
141.8 r
16.1'
30.7 r
72.4
-45.8
53.0
222.5
196.8
2.7
21.2
1.7
138.3
152.5
12.3
80.8
-4.3
98.4
239.6
207.2
14.2
16.3
1.8
156.9
96.8
39.1
59.1
-107.4
59.8
290.5
256.8
13.7
17.7
2.3
158.5
76.8
13.9
27.1
-7.6
82.0
197.4
157.8
13.6
25.2
.8
118.2
86.0
7.2
52.7
-6.4
58.9
285.4
250.1
15.6
17.4
2.2
121.7
52.8
37.9
24.5
17
18
19
?o
?i
22
By borrowing sector
Household
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
State and local government
183.81
-61.9
2.1
-11.0
-53.0
81.6
198.41
19.5
1.3
-16.0
34.1
21.1
249.l r
61.0
2.0
7.0
52.0
62.3
362.2 r
144.3
2.8
12.1
129.3
-43.4
383.5
250.6
2.0
35.9
212.7
-45.7
385.3 r
132.r
2.4
8.8
120.9 r
-65.4
392.4 1
160.8 r
-2.0
16.5
146.3'
-68.5
358.6
300.1
.9
51.3
247.9
-45.1
393.0
303.6
3.6
34.4
265.6
-11.1
448.1
181.5
4.3
29.8
147.4
-110.6
334.5
217.4
-.8
28.2
190.0
-16.0
387.7
190.7
.9
29.3
160.5
-3.7
14.8
15.0
3.1
6.4
-9.8
22.6
15.7
2.3
5.2
-.6
68.8
81.3
.7
-9.0
-4.2
-20.3
7.1
1.4
-27.3
-1.6
67.7
46.5
8.5
13.6
-.8
19.6
20.8
4.7
-8.1
2.2
33.5
27.7
-.5
5.9
.4
61.4
13.5
8.1
37.9
1.9
40.4
49.9
5.6
-11.1
-4.0
94.1
52.1
8.2
30.9
2.9
75.1
70.6
11.9
-3.4
-4.1
36.9
45.4
8.7
-13.8
-3.3
5 Private
7
8
in
II
?4
75
26
27
Foreign net borrowing in United States
Bonds
Bank loans n.e.c
Commercial paper
Other loans and advances
28 Total domestic plus foreign
496.5
R
R
565.6
697.3
R
598.6
R
800.7
607.2
R
668.3
R
941.8
928.8
273.1
436.1
653.3
900.4
490.0
580.4
313.6
678.9
Financial sectors
29 Total net borrowing by financial sectors
30
31
3?
33
34
35
36
37
38
39
By instrument
U.S. government-related
Government-sponsored enterprise securities
Mortgage pool securities
Loans from U.S. government
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper
Other loans and advances
By borrowing sector
40 Government-sponsored enterprises
41 Federally related mortgage pools
47 Private financial sectors
43
Commercial banks
Bank holding companies
44
Funding corporations
45
Savings institutions
46
47
Credit unions
48
Life insurance companies
49
Finance companies
Mortgage companies
50
51
Real estate investment trusts (REITs)
5?
Brokers and dealers
Issuers of asset-backed securities (ABSs)
53
155.6
R
240.0
R
145.7
9.2
136.6
.0
155.8
40.3
115.6
.0
9.8 r
69.9 r
.5
8.8
-32.0
-37.3
84.2 r
82.7 r
.6
2.2
-.7
-.6
9.1
136.6
9.8 r
-10.7
-2.5
-6.5
-44.7
.0
.0
17.7
-2.4
1.2
3.7
54.0 r
40.2
115.6
84.2 r
7.7
2.3
13.2
-7.0
.0
.0
-1.6
8.0
.3
2.7
58.5 r
291.L
R
467.9
R
444.9
428.7
R
536.8
R
164.2
80.6
83.6
.0
288.6 r
176.9
116.5 r
—4.8
205.1
106.9
98.2
.0
250.3 r
152.1
98.3 r
.0
321.2 r
249.0
12.2'
.0
89.4
62.9
26.4
.0
192.1
127.2
64.9
.0
221.4
101.5
119.9
.0
317.5
136.1
181.4
.0
147.2
37.4
109.8
.0
126.91"
179.2r
117.5 r
9.8
-12.3
41.6
22.6
239.8
185.5
5.3
3.0
42.6
3.4
178.3 r
103.9 r
12.0
-11.7
41.3
32.8
215.6 r
84.9 r
4.9
1.9
85.9
38.1
183.7
167.5
5.2
-3.0
38.5
-24.5
244.0
182.3
5.2
21.2
34.0
1.3
268.6
208.1
5.2
7.1
43.3
4.9
262.9
184.0
5.6
-13.4
54.7
32.0
166.4
136.2
5.5
7.6
22.6
-5.5
80.6
83.6
126.9 r
4.6
8.8
2.9
11.3
172.1
116.5 r
179.2 r
9.9
10.3
24.2
12.8
.3
50.2
-11.5
13.7
.5
68.5 r
152.1
98.3 r
178.3 r
23.9
11.5
47.3
14.8
.5
.0
16.3
-7.0
18.8
-7.6
59.8 r
249.0
12.2'
215.6 r 4.1
16.0
11.1
36.1
.2
1.3
57.3
1.1
6.3
19.3
62.8 r
62.9
26.4
183.7
6.3
16.3
61.5
-18.9
-.3
.0
83.1
-7.4
5.2
-29.5
67.6
127.2
64.9
244.0
18.2
20.8
21.7
-7.2
-.1
.1
57.2
14.8
5.2
-.1
113.2
101.5
119.9
268.6
8.8
28.2
52.1
5.1
.1
-.1
6.5
4.0
5.2
136.1
181.4
262.9
-.9
-7.8
-7.3
31.5
.0
-.4
59.6
-20.0
6.0
7.7
194.5
37.4
109.8
166.4
-4.8
-25.8
26.6
10.9
.2
106.9
98.2
239.8
8.1
14.4
32.0
2.6
-.1
-.1
51.6
-2.1
5.4
-5.0
133.0
i2o.r
3.6
-13.0
-6.2
22.4
.2
.2
.0
3.4
12.0
83.3 r
.2
2.1
156.5
-.1
2.5
50.0
.7
5.9
-31.8
132.2
A38
1.57
DomesticNonfinancialStatistics • August 1996
FUNDS RAISED IN U.S. CREDIT MARKETS'—Continued
1994
Transaction category or sector
1992
1993
1994
1996
1995'
1995'
Q3
Q4
Qi
Q2
Q3
Q4
QI
All sectors
54 Total net b o r r o w i n g , all s e c t o r s
652.1 r
805.6 r
988.4 r
l,066.5r
1,245.6
1,035.9'
l,205.2r
1,214.8
1,364.9
1,169.0
1,233.7
1,214.0
55
56
57
58
59
60
61
62
424.0
87.8
163.6 r
158.9
— 13.7 r
—29.1
-44.0
-95.6
459.8
30.5
166.0 r
131.5
5.0 r
-9.3
13.1
8.9
420.3
74.8
276.6 r
160.8
61.5 r
— 8.5
— 5.1
8.0
449.3'
-29.3
147.9'
204.1'
124.9'
62.2'
35.7
71.7
349.5
-41.3
305.3
242.8
142.9
114.5
74.3
57.5
386.0'
-58.4
140.1'
217.5'
133.8'
85.1'
61.7'
70.2
471.3'
-53.8
118.8'
215.5'
141.8'
78.1'
122.5'
111.0
356.2
-45.8
234.0
227.7
138.3
157.6
88.8
58.1
394.9
-4.3
330.6
244.8
156.9
123.7
61.9
56.5
287.2
-107.4
320.0
295.7
158.5
92.1
88.1
34.9
359.9
-7.6
336.7
202.9
118.2
84.5
58.5
80.6
435.9
-6.4
240.5
290.9
121.7
69.0
46.6
15.7
U.S. government securities
Municipal securities
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans and advances
Funds raised through mutual f u n d s and corporate equities
63 Total net s h a r e issues
209.4
294.9
442.1
150.8
159.3
113.2
-81.1
40.0
156.7
196.1
244.3
273.4
64 Mutual funds
65 Corporate equities
66
Nonfinancial corporations
67
Financial corporations
68
Foreign shares purchased by U.S. residents
147.2
62.2
18.3
13.3
30.7
209.1
85.8
27.0
28.1
30.7
323.7
118.4
21.3
36.6
60.5
128.9
21.9
-44.9
24.1
42.7
173.9
-14.7
-74.2
12.3
47.2
129.7
-16.4
-50.0
10.5
23.1
-12.6
-68.5
-118.0
16.3
33.2
78.5
-38.5
-60.0
8.7
12.8
173.3
-16.6
-71.3
17.7
37.0
195.3
.7
-92.8
9.7
83.9
248.6
-4.3
-72.8
13.3
55.3
290.9
-17.6
-118.0
11.5
89.0
1. Data in this table also appear in the B o a r d ' s Z . l (780) quarterly statistical release, tables
F.2 through F.5. For ordering address, see inside front cover.
Flow of Funds
1.58
SUMMARY OF FINANCIAL
A39
TRANSACTIONS1
Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates
1995 r
1994
Transaction category or sector
1991
1992
1993
1994
1996
1995 r
Q3
Q4
Qi
Q2
Q3
Q4
Qi
NET LENDING IN CREDIT MARKETS 2
1 T o t a l n e t l e n d i n g in c r e d i t m a r k e t s
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
Private d o m e s t i c nonfinancial sectors
Households
N o n f a r m n o n c o r p o r a t e business
Nonfinancial corporate b u s i n e s s
State and local g o v e r n m e n t s
U.S. g o v e r n m e n t
Rest of the world
Financial sectors
G o v e r n m e n t sponsored enterprises
Federally related m o r t g a g e p o o l s
M o n e t a r y authority
C o m m e r c i a l banking
U.S. chartered b a n k s
Foreign banking offices in United States
Bank holding c o m p a n i e s
B a n k s in U.S. affiliated areas
F u n d i n g corporations
T h r i f t institutions
Life insurance c o m p a n i e s
O t h e r insurance c o m p a n i e s
Private pension f u n d s
State and local government retirement funds
Finance c o m p a n i e s
Mortgage companies
Mutual f u n d s
Closed-end funds
M o n e y market mutual f u n d s
Real estate investment trusts ( R E I T s )
Brokers and dealers
A s s e t - b a c k e d securities issuers ( A B S s )
Bank personal trusts
652.1r
805.6r
988.4r
l,066.5r
1,245.6
l,035.9r
l,205.2r
1,214.8
1,364.9
1,169.0
1,233.7
1,214.0
105.21"
29.0 r
-5.3
30.7
50.8
10.5
13.3
523.T
15.1
136.6
31.1
80.8
35.7
48.5
-1.5
-1.9
8.2
-146.1
86.5
30.0
35.4
41.1
-9.2
11.2
80.1
12.8
32.7
-.7
17.5
50.0 r
10.0
87.9 r
81.7 r
-.1
27.8
-21.5
-11.9
98.2
631.5
68.8
115.6
27.9
95.3
69.5
16.5
5.6
3.7
17.7
-61.3
78.5
6.7
41.1
23.0
7.5
.1
126.2
18.2
4.7
1.1
-1.3
53.7 r
8.0
65.6 r
52.2 r
.6
9.1 r
3.7
-18.4
128.3
812.8
90.2
83.6
36.2
-84.8
51.5
1.0
-3.5
-133.7
-21.3
271.7
1,080.0
94.7
98.2
12.7
266.3
186.6
75.4
4.7
6.2
8.7
98.7
21.4
61.3
21.4
63.6
-3.4
52.5
5.8
86.5
1.8
90.1
112.3
-18.8
213.4 r
292.3 r
.7
31.3'
-117.0
-11.3
137.5
696.3 r
121.9 r
98.3 r
29.7
183.4
155.6
22.9
2.7
2.2
—43.4 r
53.8
89.5
25.3
42.5
-11.1
63.8 r
-14.0
-29.3
-13.6
57.7
5.5
-21.9
50.6 r
7.7
221.8'
343.4'
.9
53.2'
-169.7
-24.4
210.9
790.8 r
171,4 r
12.2'
30.0
174.5
174.2
-5.6
-2.4
8.3
-4.2r
32.4
79.4
30.4
74.7
36.6
81.7 r
2.1
-70.4
-10.0
53.9
.2
-8.0
42.6r
1.4
35.3
170.8
.5
-41.1
-94.9
149.6
-9.8
.0
2.4
-19.4'
-1.7
100.9
27.7
45.9
19.8
-9.0
.0
159.5
11.0
20.4
.6
14.8
80.8 r
9.5
258.9 r
304.7 r
.7
48.lr
-94.6
-24.2
134.4
697.4'
119. r
116.5 r
31.5
163.4
148.1
11.2
.9
3.3
-27.4
34.9
66.3
24.9
47.0
29.0
68.2
-22.9
-7.1
-5.5
30.0
4.7
-44.2
61,9 r
7.1
241.2
951.6
28.2
26.4
16.3
343.1
183.4
158.8
-1.5
2.4
39.8
28.2
132.4
19.2
58.9
62.4
92.5
-14.4
-15.1
3.5
53.1
1.8
30.5
55.5
-10.8
-142.3
-77.2
1.1
39.5
-105.7
-24.3
326.1
1,205.3
97.5
64.9
20.8
315.6
222.4
83.9
5.3
4.0
-3.5
9.7
131.2
21.7
57.2
3.2
65.7
29.9
21.5
6.4
135.2
1.8
146.2
100.9
-20.6
-54.9
203.2
1.1
-50.2
-209.0
-23.9
358.0
889.8
61.5
119.9
-11.1
248.9
227.5
24.1
-9.6
7.0
5.5
43.6
77.0
21.8
50.5
6.8
43.7
7.3
52.0
8.4
33.2
1.8
-1.8
144.6
-23.7
-177.3
-90.7
1.2
37.6
-125.3
-23.9
161.7
1,273.1
191.7
181.4
24.7
157.7
112.9
35.0
4.6
5.2
-17.0
-46.8
54.3
22.8
78.5
13.2
52.7
-36.4
151.5
5.0
124.6
1.9
185.6
148.0
-20.2
-133.6
-103.6
1.2
52.7
-83.9
-24.6
327.6
1,044.5
42.3
109.8
14.3
130.7
85.9
51.1
-5.3
-.9
154.9
-2.1
122.1
22.2
77.8
87.3
56.7
1.7
62.9
-1.2
170.1
1.9
-101.1
112.2
-18.1
652.1 1 "
805.6r
988.4r
l,066.5r
1,245.6
l,035.9r
l,205.2r
1,214.8
1,364.9
1,169.0
1,233.7
1,214.0
-5.9
.0
.0
25.7
198.2
-3.4
86.3
1.5
-58.5
41.6
-16.5
-26.5
147.2
62.2
51.4
31.0
-7.4r
,5 r
16.1
278.2 r
-1.6
-2.0
.2
27.3
238.6
49.4 r
113.5
-57.2
-73.2
4.5
43.1
-3.5
209.1
85.8
4.6
46.6
9.7 r
16.7 r
— 7.1
280.5 r
.8
.0
.4
35.2
247.3
50.5 r
117.3
-70.3
-23.5
20.2
71.2
-18.5
323.7
118.4
61.4
54.4 r
5.2 r
1.6
364.6 r
-5.8
.0
.7
34.0
248.0
89.7 r
-9.7
-40.0
19.6
43.3
78.3
45.8
128.9
21.9
-.1
111.0'
3.2 r
22.6 r
18.8
236.8 r
8.8
2.2
.6
49.9
258.5
10.1
-12.5
96.5
65.6
142.3
110.7
5.8
173.9
-14.7
26.7
106.0
1.3
38.7
-47.7
461.9
.2
.0
.8
67.7
238.0
4.1
-66.0
-51.8
84.0
56.4
86.0
28.1
129.7
-16.4
-59.3
91.2'
10.2'
46.0r
23.6
264.8 r
-8.6
.0
.7
21.6
293.4
99.9 r
-40.5
-46.9
36.5
86.5
51.9
97.9
-12.6
-68.5
37.1
149.4 r
4.2 r
23.1'
11.9
303.4 r
17.8
.0
.7
54.0
302.5
-13.6
42.8
18.1
116.8
59.9
161.8
39.2
78.5
-38.5
-10.7
113.6
15.3
26.9
-44.3
327.2
10.3
.0
.7
49.9
310.7
25.2
133.5
112.0
69.2
233.5
130.7
90.6
173.3
-16.6
30.8
30.5
-4.3
33.5
-45.6
505.1
9.0
8.6
.8
29.9
223.0
-43.2
-151.5
142.2
76.3
121.2
85.1
-63.8
195.3
.7
35.4
183.2
4.0
48.6
-63.9
347.6
-1.9
.0
.0
66.0
197.7
71.8
-75.0
113.6
.3
154.8
65.2
-42.8
248.6
-4.3
51.3
96.8
-9.8
45.7
-37.1
667.6
-2.1
.0
.0
56.0
301.5
-80.9
51.7
174.7
52.0
225.6
-31.6
-32.0
290.9
-17.6
80.3
129.7
9.5
53.1
-47.3
466.0
l,473.9r
l,790.4r
2,351.7r
2,113.5r
2,730.1
l,979.2r
2,245.7r
2,482.9
3,237.8
2,357.5
2,842.3
2,893.5
.7
1.6
13.2
-16.3
-3.9
12.7
3.5
-3.5
-44.1
-24.3
-4.2
-107.3
17.8
-3.9
-71.6
142.2
-.3
-13.2
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
33 N e t flows t h r o u g h c r e d i t m a r k e t s
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
Other financial sources
Official f o r e i g n e x c h a n g e
Special d r a w i n g rights certificates
Treasury currency
L i f e insurance reserves
Pension f u n d reserves
Interbank c l a i m s
C h e c k a b l e deposits and currency
Small time and s a v i n g s deposits
L a r g e time deposits
M o n e y m a r k e t f u n d shares
Security r e p u r c h a s e a g r e e m e n t s
Foreign deposits
Mutual f u n d shares
C o r p o r a t e equities
Security credit
Trade payables
Taxes payable
N o n c o r p o r a t e proprietors' equitv
Investment in bank personal trusts
Miscellaneous
54 T o t a l f i n a n c i a l s o u r c e s
3.4r
Floats not included in assets ( —)
55 U.S. g o v e r n m e n t c h e c k a b l e deposits
56 O t h e r checkable deposits
57 T r a d e credit
-13.1
4.5
36.1
11.3
-1.5
-1.3
—6.6 r
-4.8
-2.8
-7.8r
-6.0
-3.8
-14.8
7.4
-3.3
12.6 r
—44.0r
Liabilities not identified as assets
T r e a s u r y currency
Interbank c l a i m s
Security repurchase a g r e e m e n t s
Foreign deposits
T a x e s payable
Miscellaneous
-.6
26.2
-9.5
-24.0
-2.2r
9.1'
-.2
-4.9
3.6
-2.8
11.9 r
-A'
-.2
4.2
34.3
~1.0'
11. l r
-126.T
-.2
-2.7
31.5 r
36.9
8.6 r
-138.7r
-.5
-3.1
11.0
-1.5
8.7
-29.8
-.2
10.1
-53.5r
39.5
10.8
—44.3 r
-1.7
86.7 r
55.7 r
— .9'
-107.3 1 "
.8
64.4
45.6
-8.9
-230.6
-.4
8.2
-47.3
81.6
31.6
-36.9
-.3
7.6
39.6
-93.6
10.8
-4.8
-1.0
-29.1
-12.7
-39.5
1.4
153.1
-.9
12.4
-76.7
-41.5
-24.0
123.3
l,446.8r
l,769.3r
2,444.9r
2,193.7r
2,769.8
2,000.1r
2,284.2r
2,522.7
3,208.3
2,442.4
2,905.9
2,958.8
58
59
60
61
62
63
-3.7
79.5
( —)
64 T o t a l i d e n t i f i e d t o s e c t o r s a s a s s e t s
1. Data in this table also a p p e a r in the B o a r d ' s Z. 1 (780) quarterly statistical release, tables
F.6 a n d F.7. For ordering address, see inside front cover.
-24.4
-2.3
-.2
-.2
2. Excludes corporate equities and m u t u a l f u n d shares.
A40
1.59
DomesticNonfinancialStatistics • August 1996
SUMMARY OF CREDIT MARKET DEBT OUTSTANDING 1
Billions of dollars, end of period
1994
1995'
1996
tyyz
Q4
Q3
QI
Q2
Q3
Q4
QI
Nonfinancial sectors
1 Total c r e d i t m a r k e t d e b t owed by
domestic nonfinancial sectors
ll,894.5r
12,537.8'
13,163.0 r
13,895.9
12,965.8 r
13,163.0'
13,339.3
13,548.4
13,707.8
13,895.9
14,072.1
By sector and instrument
2 U.S. government
Treasury securities
3
4
Budget agency issues and mortgages
3,080.3
3,061.6
18.8
3,336.5
3,309.9
26.6
3,492.3
3,465.6
26.7
3,636.7
3,608.5
28.2
3,432.3
3,404.1
28.2
3,492.3
3,465.6
26.7
3,557.9
3,531.5
26.4
3,583.5
3,556.7
26.8
3,603.4
3,576.5
26.9
3,636.7
3,608.5
28.2
3,717.2
3,689.6
27.6
5 Private
8,814.2 r
9,201.3'
9.670.7'
10,259.2
9,533.6'
9,670.7'
9,781.4
9,964.9
10,104.4
10,259.2
10,354.9
6
/
8
9
10
11
12
13
14
15
16
By instrument
Municipal securities
Corporate bonds
Mortgages
H o m e mortgages
Multifamily residential
Commercial
Farm
Consumer credit
Bank loans n.e.c
Commercial paper
Other loans and advances
1,302.8
1,154.5
4,088.7
3,037.4
272.5
698.1
80.7
802.4'
672.2
107.1
686.5
1.377.5
1,229.7
4,260.0
3.227.6
267.8
683.4
81.2
863.9'
676.0
117.8
676.3
1.348.2
1,253.0
4,454.4'
3,430.0'
269.1
672.3
83.0
988.8'
749.0'
139.2
738.0
1,307.0
1,326.3
4,691.8
3,634.7
280.2
692.4
84.6
1,131.7
852.0
157.4
792.9
1,362.6
1,251.5
4,400.5'
3,374.6'
270.2
673.1
82.6
933.9'
724.9'
138.7
721.6
1,348.2
1,253.0
4.454.4'
3,430.0'
269.1
672.3
83.0
988.8'
749.0'
139.2
738.0
1,335.4
1,266.3
4.495.8
3,465.1
269.8
677.6
83.4
989.3
782.8
149.8
762.0
1,331.7
1,290.9
4,563.2
3,524.4
273.3
681.6
83.9
1,029.7
810.6
162.9
775.8
1,309.9
1,305.8
4.641.2
3,594.0
276.8
686.1
84.4
1,077.5
825.6
163.3
781.2
1,307.0
1,326.3
4,691.8
3,634.7
280.2
692.4
84.6
1,131.7
852.0
157.4
792.9
1,304.1
1,341.0
4,748.6
3,682.6
284.1
696.7
85.2
1,123.3
861.9
173.2
802.7
1/
18
19
20
21
22
By borrowing
sector
Household
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
State and local government
4,021.4'
3.696.8
136.3
1,122.9
2,437.6
1,095.9
4,272.9'
3,770.3
138.3
1,129.9
2,502.0
1,158.2
4,634.7'
3,921.1
141.2
1.142.0
2,638.0
1.114.8
5,018.3
4.171.8
143.2
1,178.0
2.850.7
1,069.1
4,515.1'
3,885.6
143.1
1,137.4
2,605.0
1,132.8
4,634.7'
3,921.1
141.2
1,142.0
2,638.0
1,114.8
4,676.5
4,002.7
138.9
1,154.5
2,709.2
1,102.2
4,784.1
4,084.0
142.8
1,163.3
2,777.8
1,096.8
4,908.0
4,122.3
144.9
1,170.4
2,807.0
1,074.1
5,018.3
4,171.8
143.2
1,178.0
2,850.7
1,069.1
5,063.2
4,224.8
140.9
1,185.0
2,898.9
1,066.9
23 F o r e i g n c r e d i t m a r k e t d e b t held in
United States
313.1
381.9
361.6
429.4
352.4
361.6
376.8
387.6
409.9
429.4
438.5
24
25
26
27
146.2
23.9
77.7
65.3
227.4
24.6
68.7
61.1
234.6
26.1
41.4
59.6
281.1
34.6
55.0
58.7
227.6
26.3
39.9
58.6
234.6
26.1
41.4
59.6
237.9
28.2
50.9
59.8
250.4
29.6
48.1
59.5
263.4
31.6
55.8
59.0
281.1
34.6
55.0
58.7
292.4
36.8
51.5
57.8
13,716.1
13,935.9
14,117.7
14,325.3
14,510.7
Bonds
Bank loans n.e.c
Commercial paper
Other loans and advances
28 Total credit m a r k e t debt owed bv nonfinancial
sectors, domestic and foreign
12,207.6'
12,919.7 r
13,524.6'
14,325.3
13,318.3'
13,524.6 r
Financial secto
29 Total credit m a r k e t debt owed by
financial sectors
30
31
32
33
34
35
36
37
38
39
By instrument
U.S. government-related
Government-sponsored enterprises securities
Mortgage pool securities
Loans from U.S. government
Private
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper
Other loans and advances
Bv borrowing sector
40 Government-sponsored enterprises
41 Federally related mortgage pools
42 Private financial sectors
43
Commercial banks
44
Bank holding companies
Funding corporations
45
46
Savings institutions
47
Credit unions
Life insurance companies
48
49
Finance companies
50
Mortgage companies
51
Real estate investment trusts (REITs)
52
Brokers and dealers
53
Issuers of asset-backed securities (ABSs)
3,025.0'
3,321.5'
3,794.6 r
4,242.1
3,656.2 r
3,794.6 r
3,861.4
3,971.8
4,093.9
4,242.1
4,317.1
1,720.0
443.1
1,272.0
4.8
1,305.1'
738.4'
5.4
80.5
394.3
86.6
1,884.1
523.7
1,355.6
4.8
1,437.4'
858.5'
8.9
67.6
393.5
108.9
2,172.7'
700.6
1,472.1'
.0
1.621.9'
973.5'
18.7
55.3
442.8
131.6
2,377.8
807.5
1,570.3
.0
1.864.3
1.158.9
24.0
58.3
488.1
135.0
2.093.3'
638.3
1,454.9'
.0
1,563.0'
949.5'
17.5
53.4
420.5
122.0
2,172.7'
700.6
1,472.1'
.0
1,621.9'
973.5'
18.7
55.3
442.8
131.6
2,196.2
716.3
1,479.9
.0
1,665.2
1,012.3
20.0
53.4
454.1
125.4
2,247.1
748.1
1,499.0
.0
1,724.7
1,056.4
21.3
58.4
462.8
125.7
2,300.1
773.5
1,526.6
.0
1,793.8
1,110.2
22.6
60.3
473.6
127.0
2,377.8
807.5
1,570.3
.0
1,864.3
1,158.9
24.0
58.3
488.1
135.0
2,416.6
816.9
1,599.7
.0
1,900.6
1,189.6
25.4
59.1
492.8
133.6
447.9
1,272.0
1,305.1'
80.0
114.6
161.6
88.4
.0
.0
390.4
30.2
13.9
21.7
404.3'
528.5
1,355.6
1,437.4'
84.6
123.4
169.9
99.6
.2
.2
390.5
30.2
17.4
33.7
487.6'
700.6
1.472.1'
1,621.9'
94.5
133.6
199.3
112.4
.5
.6
440.7
18.7
31.1
34.3
556.1'
807.5
1,570.3
1,864.3
102.6
148.0
233.9
115.0
.4
.5
492.3
16.6
36.5
29.3
689.1
638.3
1,454.9'
1,563.0'
92.6
129.6
200.6
103.4
.4
.3
420.9
18.5
29.5
29.4
537.7'
700.6
1,472.1'
1,621.9'
94.5
133.6
199.3
112.4
.5
.6
440.7
18.7
31.1
34.3
556.1'
716.3
1,479.9
1.665.2
95.0
137.7
221.0
107.7
.4
.6
456.7
16.9
32.4
26.9
570.0
748.1
1,499.0
1,724.7
99.9
142.9
229.9
105.9
.3
.6
467.2
20.6
33.7
26.8
596.8
773.5
1,526.6
1,793.8
102.0
150.0
240.0
107.2
.4
.6
471.9
21.6
35.0
27.4
637.8
807.5
1,570.3
1,864.3
102.6
148.0
233.9
115.0
.4
.5
492.3
16.6
36.5
29.3
689.1
816.9
1,599.7
1,900.6
100.5
141.6
244.6
117.8
.4
1.1
499.8
16.8
38.0
21.4
718.8
All sectors
54 Total credit m a r k e t debt, domestic a n d foreign. . . .
55
56
5/
58
59
60
61
62
U.S. government securities
Municipal securities
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans and advances
15,232.6 r
16,241.2 r
17,319.2 r
18,567.4
16,974.5 r
17,319.2'
17,577.5
17,907.8
18,211.5
18,567.4
18,827.8
4,795.5
1,302.8
2,039.0'
4,094.1
802.4'
776.6
579.0
843.1
5.215.8
1,377.5
2,315.6'
4,269.0
863.9'
768.2
580.0
851.1
5.665.0'
1,348.2
2,461.0'
4,473.1'
988.8'
830.4'
623.5
929.1
6,014.6
1,307.0
2,766.3
4,715.9
1,131.7
944.9
700.4
986.6
5,525.6'
1.362.6
2,428.6'
4,418.0'
933.9'
804.5'
599.2
902.2
5,665.0'
1,348.2
2,461.0'
4,473.1'
988.8'
830.4'
623.5
929.1
5,754.1
1,335.4
2,516.5
4,515.9
989.3
864.4
654.7
947.2
5,830.6
1,331.7
2,597.7
4,584.6
1,029.7
898.6
673.8
961.0
5,903.5
1,309.9
2,679.5
4,663.9
1,077.5
917.4
692.7
967.1
6,014.6
1,307.0
2,766.3
4,715.9
1,131.7
944.9
700.4
986.6
6,133.8
1,304.1
2,823.1
4,774.0
1,123.3
957.8
717.6
994.2
1. Data in this table also appear in the B o a r d ' s Z. 1 (780) quarterly statistical release, tables
L.2 through L.4. For ordering address, see inside front cover.
1.60
Flow of Funds
A41
1995 r
1996
SUMMARY O F FINANCIAL ASSETS AND LIABILITIES 1
Billions of dollars except as noted, end of period
1994
Transaction category or sector
CREDIT MARKET DEBT
1995 r
Q3
Q4
Q1
Q2
Q3
Q4
Qi
OUTSTANDING2
1 Total credit m a r k e t assets
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
1994
1992
Private d o m e s t i c nonfinancial sectors
Households
Nonfarm noncorporate business
Nonfinancial c o r p o r a t e b u s i n e s s
State and local g o v e r n m e n t s
U.S. g o v e r n m e n t
Rest of the world
Financial sectors
G o v e r n m e n t - s p o n s o r e d enterprises
Federally related m o r t g a g e p o o l s
M o n e t a r y authority
Commercial banking
U.S. chartered b a n k s
Foreign b a n k i n g offices in United States
Bank holding companies
B a n k s in U.S. affiliated areas
F u n d i n g corporations
T h r i f t institutions
L i f e insurance c o m p a n i e s
O t h e r insurance c o m p a n i e s
Private pension f u n d s
State and local government retirement funds
Finance companies
Mortgage companies
Mutual funds
Closed-end funds
M o n e y market mutual f u n d s
Real estate investment trusts ( R E I T s )
B r o k e r s and dealers
A s s e t - b a c k e d securities issuers ( A B S s )
B a n k personal trusts
15,232.6r
16,241.2r
17,319.2r
18,567.4
16,974.5r
17,319.2r
17,577.5
17,907.8
18,211.5
18,567.4
18,827.8
2,671.6 r
l,618.5r
38.1
257.8
757.2
235.0
1,022.8
11,303.2 r
457.8
1,272.0
300.4
2,948.6
2,571.9
335.8
17.5
23.4
162.5
1,134.5
1,309.1
389.4
571.7
417.5
496.4
60.5
566.4
67.7
408.6
8.1
122.7
378.0 r
231.5
2,730. r
l,658.9r
38.8
271.5 r
760.8
230.7
1,146.6
12,133.8 r
548.0
• 1,355.6
336.7
3,090.8
2,721.5
326.0
17.5
25.8
149.2 r
1,132.7
1,420.6
422.7
617.6
437.3
482.8
60.4
725.9
78.6
429.0
8.6
137.5
458.8 r
240.9
3,019.3 r
l,993.9r
39.5
319.7 r
666.3
206.5
1,255.7
12,837.7 r
667. r
l,472.1r
368.2
3,254.3
2,869.6
337.1
18.4
29.2
129.5 r
1,167.6
1,487.0
446.4
664.6
466.3
551.0
37.5
718.8
73.1
459.0
13.3
93.3
520.7 r
248.0
2,930.4
2,041.3
40.4
316.1
532.5
185.2
1,527.5
13,924.3
761.8
1,570.3
380.8
3,520.6
3,056.1
412.6
18.0
33.8
138.3
1,176.3
1,585.7
471.9
725.9
487.7
614.6
34.1
771.3
78.9
545.5
15.1
183.4
632.9
229.2
2,900.6 r
l,857.7r
39.3
295.3 r
708.3
212.6
1,240.7
12,620.6 r
624.3 r
1,454.9 r
356.8
3,203.9
2,822.3
335.5
19.0
27.1
130.2 r
1,160.4
1,470.7
439.1
645.9
454.3
524.1
37.0
741.8
75.6
437.9
13.3
95.3
507.3 r
247.7
3,019.3 r
l,993.9r
39.5
319.7 r
666.3
206.5
1,255.7
12,837.7 r
667. r
l,472.1r
368.2
3,254.3
2,869.6
337.1
18.4
29.2
129.5 r
1,167.6
1,487.0
446.4
664.6
466.3
551.0
37.5
718.8
73.1
459.0
13.3
93.3
520.7r
248.0
2,984.8
2,013.6
39.6
291.0
640.6
203.2
1,324.4
13,065.2
673.5
1,479.9
367.1
3,327.8
2,906.5
373.6
18.0
29.8
140.8
1,173.4
1,523.1
451.8
679.3
480.7
568.5
33.9
719.3
74.0
480.6
13.8
101.0
531.5
245.3
2,935.1
1,974.3
39.9
302.8
618.1
197.1
1,402.6
13,372.9
698.6
1,499.0
375.7
3,409.8
2,963.7
396.0
19.3
30.8
137.4
1,177.4
1,557.1
458.5
693.6
482.1
586.9
41.4
724.8
75.6
508.0
14.2
137.5
555.2
240.2
2,942.2
2,048.3
40.2
290.4
563.4
191.2
1,493.1
13,585.1
714.0
1,526.6
370.6
3,474.2
3,023.7
401.1
16.9
32.5
143.1
1,188.9
1,575.5
464.4
706.2
481.8
594.7
43.2
739.2
77.7
505.7
14.7
137.0
593.2
234.2
2,930.4
2,041.3
40.4
316.1
532.5
185.2
1,527.5
13,924.3
761.8
1,570.3
380.8
3,520.6
3,056.1
412.6
18.0
33.8
138.3
1,176.3
1,585.7
471.9
725.9
487.7
614.6
34.1
771.3
78.9
545.5
15.1
183.4
632.9
229.2
2,858.6
2,001.8
40.7
306.6
509.4
179.0
1,617.8
14,172.5
771.7
1,599.7
379.6
3,541.4
3,068.8
422.3
16.7
33.6
174.9
1,174.6
1,619.2
478.1
745.3
508.2
623.3
34.5
791.7
78.6
595.6
15.6
158.2
657.6
224.7
15,232.6r
16,241.2r
17,319.2r
18,567.4
16,974.5r
17,319.2r
17,577.5
17,907.8
18,211.5
18,567.4
18,827.8
51.8
8.0
16.5
433.0
4,055.1
138.5 r
5,050.2
1,134.4
2,293.5
415.2
539.5
399.9
267.7
992.5
217.7
995.1
79.7
660.6
4,785.2r
53.4
8.0
17.0
468.2
4,471.6
189.3
5,154.9
1,251.7
2,223.2
391.7
559.6
471.1
257.6
1,375.4
279.0
l,049.4r
84.9 r
691.3
5,165.2 r
53.2
8.0
17.6
502.2
4,693.9
280.0'
5,296.0
1,242.0
2,183.3
411.2
602.9
549.4
307.1
1,477.3
279.0
l,160.5r
88.0 r
699.4
5,397.3 r
63.7
10.2
18.2
552.1
5,499.6
290.7
5,704.4
1,229.5
2,279.7
476.9
745.3
660.1
312.9
1,852.8
305.6
1,266.5
89.3
767.4
5,769.9
55.5
8.0
17.5
496.8
4,677.0
250.1
5,212.4
1,205.0
2,199.1
402.6
578.7
548.1
278.9
1,515.8
263.9
l,099.8r
87.1 r
701.1
5,373.0 r
53.2
8.0
17.6
502.2
4,693.9
280.0 r
5,296.0
1,242.0
2,183.3
411.2
602.9
549.4
307.1
1,477.3
279.0
l,160.5r
88.0 r
699.4
5,397.3 r
64.1
8.0
17.8
515.7
4,895.7
273.0
5,389.5
1,193.9
2,200.1
441.1
634.0
603.4
316.9
1,553.3
269.5
1,159.8
94.3
719.7
5,459.7
67.1
8.0
18.0
528.1
5,095.4
265.9
5,572.4
1,246.3
2,222.4
456.2
678.5
629.3
339.6
1,661.0
277.9
1,174.2
89.2
739.7
5,537.2
65.1
10.2
18.2
535.6
5,318.1
267.4
5,615.3
1,200.4
2,255.6
477.4
702.7
655.6
323.6
1,782.0
286.2
1,217.3
91.9
758.6
5,626.9
63.7
10.2
18.2
552.1
5,499.6
290.7
5,704.4
1,229.5
2,279.7
476.9
745.3
660.1
312.9
1,852.8
305.6
1,266.5
89.3
767.4
5,769.9
62.1
10.2
18.2
566.1
5,745.6
266.2
5,799.1
1,183.8
2,336.4
490.6
816.9
666.5
304.9
2,004.8
318.3
1,269.7
94.2
781.6
5,836.4
40,757.9
36,732.4r
37,271.6r
37,997.6
38,941.9
39,804.3
40,757.9
41,600.4
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
Other
liabilities
Official foreign e x c h a n g e
Special d r a w i n g rights certificates
Treasury currency
L i f e insurance reserves
Pension f u n d reserves
Interbank c l a i m s
D e p o s i t s at financial institutions
C h e c k a b l e deposits and currency
Small time and savings deposits
Large time deposits
M o n e y market f u n d shares
Security repurchase a g r e e m e n t s
Foreign deposits
M u t u a l f u n d shares
Security credit
Trade payables
Taxes payable
I n v e s t m e n t in b a n k personal trusts
Miscellaneous
32,716.4r
35,248.7r
37,271.6r
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
56 H o u s e h o l d equity in n o n c o r p o r a t e b u s i n e s s
19.6
5.462.9
2,458.3
20.1
6,278.5
2,476.3
21.1
6,293.4
2,564.6
22.1
8,345.4
2,657.7
21.0
6,228.7
2,550.9
21.1
6,293.4
2,564.6
22.7
6,835.8
2,576.7
22.9
7,393.0
2,607.0
22.1
8,013.8
2,619.3
22.1
8,345.4
2,657.7
22.1
8,820.5
2,669.9
Floats not included in assets ( - )
57 U.S. g o v e r n m e n t c h e c k a b l e deposits
58 O t h e r c h e c k a b l e deposits
5 9 T r a d e credit
6.8
42.0
- 2 5 1 . LR
5.6
40.7
-251.4'
3.4
38.0
-260.1'
3.1
34.2
-274.9
1.2
30.6
-323.2r
3.4
38.0
-260.1r
4.2
33.3
-297.1
2.0
35.7
-315.8
.6
27.3
-331.3
3.1
34.2
-274.9
.0
29.6
-356.1
Liabilities
not identified as assets
T r e a s u r y currency
I n t e r b a n k claims
Security repurchase a g r e e m e n t s
F o r e i g n deposits
T a x e s payable
Miscellaneous
-4.9
-9.3
43.0
217.6
25.2 r
—514.5 r
-5.1
-4.7
77.3
218.4 r
26.8 r
-667.2r
-5.4
-6.5
108.8 r
258.7
25.0 r
-830.5r
-5.8
-9.0
119.8
257.2
33.7
-859.2
-5.3
-3.4
100.7 r
241.3
22.8 r
-688.2r
-5.4
-6.5
108.8 r
258.7
25.0 r
-830.5r
-5.4
-2.7
132.9
270.1
10.0
-892.2
-5.5
-2.9
114.5
290.5
25.6
-878.5
-5.6
.1
136.4
267.1
28.7
-884.9
-5.8
-9.0
119.8
257.2
33.7
-859.2
-6.0
-2.5
108.7
246.8
13.5
-896.0
41,102.3r
44,583.2r
46,819.3r
52,483.9
46,156.5r
46,819.3r
48,179.7
49,699.2
51,221.1
52,483.9
53,975.0
5 3 T o t a l liabilities
60
61
62
63
64
65
(-)
66 T o t a l i d e n t i f i e d t o s e c t o r s a s a s s e t s
1. D a t a in this table also a p p e a r in the B o a r d ' s Z. 1 (780) quarterly statistical release, tables
L . 6 and L.7. F o r ordering address, see inside f r o n t cover.
2. E x c l u d e s corporate equities and m u t u a l f u n d shares.
A42
2.10
Domestic Nonfinancial Statistics • August 1996
NONFINANCIAL BUSINESS ACTIVITY
Selected Measures
Monthly data seasonally adjusted, and indexes 1987=100, except as noted
1996 r
1995
1993
1994
1995
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
1 Industrial production
111.5
118.1
121.9
122.8
122.2
122.6
122.8
122.5
124.2
123.6
124.4
125.3
Market
groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
110.0
112.7
109.5
117.5
101.8
113.8
115.6
118.3
113.7
125.3
107.3
122.0
118.3
121.4
115.1
131.4
109.0
127.4
119.4
122.6
116.0
133.1
109.5
128.1
118.3
121.3
114.9
131.5
109.2
128.1
118.8
121.9
115.9
131.4
109.3
128.4
119.2
122.1
115.7
132.3
110.1
128.4
118.6
121.9
114.6
133.7
108.5
128.5
120.7
124.5
116.6
137.3
109.3
129.4
120.0
123.5
115.3
136.7
109.4
129.2
120.9
124.9
116.1
139.3
108.7
129.8
121.6
125.6
116.5
140.4
109.4
131.0
112.3
119.7
123.9
124.9
124.4
124.5
124.8
124.5
126.2
125.2
126.5
127.2
80.6
83.3
83.0
82.8
82.2
8-2.0
81.9
81.4
82.3
81.3
81.9
82.0
105.0 r
114.2
118.0 r
120.0
120.0
121.0
116.0 r
119.0
113.0
124.0
124.0
120.0
108.6 r
94.3
94.8
95.3
112.9
141.3
136.0
119.3
142.4
134.7
112.0 r
95.6
95.1
97.4
116.3
148.3
142.6
125.0
149.2
144.8
115.0 r
98.2
96.9
98.3
119.5
157.4
150.5
129.3
157.8
152.2
115.4 r
98.0 r
96.9 r
98.4 r
120.9 r
158.8
152.0
129.6
159.3
153.4
115.5 r
97.9
96.1'
98.1'
121.r
159.6
153.0
129.5
160.0
153.0
115.6 r
97.8
96.6 r
98.0 r
121.3 r
160.1
152.9
129.5
160.6
154.3
115.9 r
91.9'
96.1'
98.1'
121.6'
161.1
153.7
129.8
161.7
155.3
115.8
97.7
96.4
97.7
121.6
161.2
153.4
128.4
161.7
155.3
116.3
98.3
96.5
97.8
122.1
162.5
155.1
129.8
162.8
158.6
116.5
98.1
96.2
97.4
122.3
163.2
155.8
129.1
163.4
159.3
116.6
98.1
96.2
97.4
122.5
164.0
156.6
131.0
162.5
159.0
117.0
98.2
96.2
97.4
122.9
n.a.
n.a.
n.a.
n.a.
160.2
144.5
124.7
148.2
125.5
152.4
127.9
153.2
127.9
153.7
128.7
153.6
128.7
153.5
129.1
154.4
129.4
154.9
129.4
155.7
130.2
156.3
130.8
156.6
131.0
2
3
4
5
6
7
Industry
groupings
8 Manufacturing
9 Capacity utilization, manufacturing (percent)*
10 Construction contracts
3
11 Nonagricultural employment, total 4
12
Goods-producing, total
13
Manufacturing, total
14
Manufacturing, production workers
15
Service-producing
16 Personal income, total
17
Wages and salary disbursements
18
Manufacturing
19
Disposable personal income 5
20 Retail sales 5
Prices6
21 Consumer ( 1 9 8 2 - 8 4 = 1 0 0 )
22 Producer finished goods ( 1 9 8 2 = 1 0 0 )
1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For
the ordering address, see the inside front cover. The latest historical revision of the industrial
production index and the capacity utilization rates was released in N o v e m b e r 1995. See "A
Revision to Industrial Production and Capacity Utilization, 1991-95," Federal
Reserve
Bulletin, vol. 82 (January 1996), pp. 16-25. For a detailed description of the industrial
production index, 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, DRI McGraw-Hill, U.S. Department of Commerce, and other sources.
3. Index of dollar value of total construction contracts, including residential, nonresidential, and heavy engineering, from McGraw-Hill Information Systems Company, F.W. Dodge
Division.
4. Based on data from U.S. Department of Labor, Employment and Earnings. Series covers
employees only, excluding personnel in the armed forces.
2.11
5. Based on data from U.S. Department of Commerce, Survey of Current
Business.
6. Based on data not seasonally adjusted. Seasonally adjusted data for changes in the price
indexes can be obtained from the U.S. Department of Labor, Bureau of Labor Statistics,
Monthly Labor
Review.
NOTE. Basic data (not indexes) for series mentioned in notes 4 and 5, and indexes for series
mentioned in notes 3 and 6, can also be found in the Sun>ey of Current
Business.
Figures for industrial production for the latest month are preliminary, and many figures for
the three months preceding the latest month have been revised. See " R e c e n t Developments in
Industrial Capacity and Utilization," Federal Reserve Bulletin, vol. 76 (June 1990), pp.
4 1 1 - 3 5 . See also "Industrial Production Capacity and Capacity Utilization since 1987,"
Federal Reserve Bulletin, vol. 79 (June 1993), pp. 5 9 0 - 6 0 5 .
LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT
Thousands of persons; monthly data seasonally adjusted
1995 r
Category
HOUSEHOLD SURVEY
1993
ESTABLISHMENT SURVEY
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Finance
Service
Government
128,040
131,056
132,304
132,473
132,471
132,352
132,903
133,018
133,655
133,361
133,910
116.232
3,074
119,651
3,409
121,460
3,440
121,810
3,434
121,739
3,323
121,656
3,325
121,698
3,529
122,143
3,519
122,664
3,487
122,726
3,368
122,971
3,491
8,734
6.8
7,996
6.1
7,404
5.6
7,229
5.5
7,409
5.6
7,371
5.6
7,677
5.8
7,355
5.5
7,504
5.6
7,266
5.4
7,448
5.6
110,525
113,423
116,597
117,749
117,899
118,136
118,070
118,579
118,737
118,900
119,248
18,003
611
4,642
5,787
25,675
6,712
30,278
18,817
18,064
604
4,916
5,842
26,362
6,789
31,805
19,041
18,406
579
5,244
6,194
27,156
6,948
32,788
19,282
18,378
573
5,200
6,212
27,728
6,859
33,460
19,339
18,353
569
5,211
6,233
27,778
6,871
33,546
19,338
18,367
570
5,223
6,249
27,832
6,887
33,661
19,347
18,309
569
5,234
6,254
27,780
6,894
33,694
19,336
18,332
573
5,349
6,270
27,869
6,919
33,902
19,365
18,282
574
5,340
6,289
27,891
6,932
34,035
19,394
18,278
574
5,351
6,288
27,970
6,940
34,100
19,399
18,284
575
5,379
6,305
28,022
6,960
34,281
19,442
DATA
6 Nonagricultural payroll employment4
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.
1996 r
1995
DATA1
Civilian labor force 2
Employment
2
Nonagricultural industries- 1
3
Agriculture
Unemployment
4
Number
5
Rate (percent of civilian labor force)
1
7
8
9
10
11
12
13
14
1994
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 from U.S. Department of Labor, Employment and Earnings.
Selected Measures
2.12
A43
OUTPUT, CAPACITY, AND CAPACITY UTILIZATION 1
Seasonally adjusted
1995
1996
1995
1995
1996
1996
Series
Q2
Q3
Q4
Qlr
121.4
2 Manufacturing
123.3
122.3
124.1
122.5
Q4
Q3
QI
Capacity (percent of 1987 output)
Output ( 1 9 8 7 = 1 0 0 )
1 Total i n d u s t r y
Q2
123.4
124.6
125.3
145.0
148.7
147.7
146.3
150.2
151.9
149.1
153.5
Q2
Q3
Q4
Qir
Capacity utilization rate (percent) 2
83.7
83.6
82.9
83.0
82.6
82.0
82.8
81.6
86.1
80.3
85.2
80.2
3
Primary processing
Advanced processing 4
117.7
126.0
117.1
127.5
117.1
128.1
116.6
129.4
134.3
155.6
135.2
157.5
136.1
159.5
136.9
161.5
87.6
81.0
86.6
80.9
5
6
7
8
9
10
11
12
13
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Industrial machinery and equipment
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment . . .
131.4
102.9
119.1
121.9
115.1
174.4
171.2
140.5
133.0
104.6
118.2
121.3
113.9
178.9
178.4
140.7
134.2
105.8
118.8
121.3
115.3
186.8
182.9
140.5
136.0
104.6
118.6
122.6
113.1
195.6
186.4
132.6
159.2
118.7
128.1
132.4
122.5
200.5
199.0
174.4
161.7
119.8
128.8
132.9
123.3
206.1
206.3
176.8
164.2
120.9
129.5
133.5
124.0
212.0
213.9
179.2
166.7
121.7
130.3
134.4
124.8
218.1
221.8
181.3
82.5
86.7
92.9
92.1
94.0
87.0
86.0
80.6
82.3
87.3
91.8
91.3
92.4
86.8
86.5
79.6
81.7
87.5
91.8
90.9
93.0
88.1
85.5
78.4
81.6
85.9
91.0
91.2
90.7
89.7
84.0
73.2
88.7
86.9
79.0
83.9
130.9
130.1
129.3
128.6
67.7
66.8
61.1
65.2
14
15
16
17
18
19
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
114.4
113.7
121.2
124.0
122.9
108.0
114.3
110.9
119.5
124.6
118.3
109.2
113.9
109.4
118.1
126.4
123.1
107.7
113.5
106.5
114.4
127.0
126.9
109.6
137.1
130.4
131.7
154.7
133.8
116.2
137.7
131.6
132.8
155.6
135.4
116.4
138.4
132.8
133.9
156.5
137.1
116.6
139.0
133.7
134.9
157.5
138.6
116.8
83.5
87.2
92.0
80.2
91.9
92.9
83.0
84.3
90.0
80.1
87.3
93.8
82.3
82.4
88.2
80.7
89.7
92.4
81.6
79.7
84.8
80.6
91.6
93.9
100.7
120.7
120.4
100.2
124.7
125.0
98.2
124.1
123.7
98.7
126.7
126.4
112.0
134.8
132.1
111.9
135.2
132.5
111.9
135.6
133.0
111.9
136.0
133.4
89.9
89.5
91.1
89.5
92.3
94.3
87.8
91.5
93.1
88.2
93.2
94.8
1973
1975
Previous cycle 5
High
Low
High
3
4
20 Mining
21 Utilities
22
Electric
Low
Latest cycle 6
High
Low
1996
1995
May
Dec.
Jan.
Feb. r
Mar/
Apr.
Mayp
83.2
Capacity utilization rate (percent) 2
1 Total i n d u s t r y
89.2
72.6
87.3
71.8
84.9
78.0
83.7
82.9
82.4
83.3
82.6
82.9
2 Manufacturing
88.9
70.8
87.3
70.0
85.2
76.6
82.8
81.9
81.4
82.3
81.3
81.9
82.0
92.2
87.5
68.9
72.0
89.7
86.3
66.8
71.4
89.0
83.5
77.9
76.1
87.8
80.8
86.0
80.2
85.4
79.7
84.9
81.1
85.2
79.6
85.0
80.5
85.2
80.6
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
88.8
90.1
100.6
105.8
92.9
68.5
62.2
66.2
66.6
61.3
86.9
87.6
102.4
110.4
90.5
65.0
60.9
46.8
38.3
62.2
84.0
93.3
92.8
95.7
88.7
73.7
76.1
74.2
72.0
75.2
82.3
85.7
93.3
93.0
93.7
81.7
88.1
92.6
91.8
93.5
81.3
84.8
93.5
95.6
90.7
82.5
84.8
89.8
88.9
91.0
81.0
88.1
89.6
89.1
90.2
82.3
89.6
90.5
90.1
91.1
82.5
88.9
90.2
88.6
92.1
96.4
87.8
93.4
74.5
63.8
51.1
92.1
89.4
93.0
64.9
71.1
44.5
84.0
84.9
85.1
71.8
77.0
56.6
87.1
86.0
79.6
88.8
84.4
78.4
88.8
83.2
75.0
89.9
85.1
77.9
90.3
83.8
66.7
89.8
83.0
79.1
90.0
83.0
79.3
77.0
66.6
81.1
66.9
88.4
78.8
67.6
61.5
63.8
65.5
66.3
66.7
66.9
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
87.9
92.0
96.9
87.9
102.0
96.7
71.8
60.4
69.0
69.9
50.6
81.1
87.0
91.7
94.2
85.1
90.9
89.5
76.9
73.8
82.0
70.1
63.4
68.2
86.7
92.1
94.8
85.9
97.0
88.5
80.3
78.8
86.7
79.0
74.8
84.6
83.5
87.1
93.0
80.2
91.9
92.4
82.1
81.2
88.1
80.6
89.6
93.3
81.4
78.0
85.3
80.8
90.8
93.3
81.9
79.4
84.1
80.7
91.3
94.3
81.6
81.6
85.0
80.2
92.6
94.0
81.2
78.9
85.1
79.7
81.2
79.4
85.8
79.5
94.3
93.6
94.4
95.6
99.0
88.4
82.5
82.7
96.6
88.3
88.3
80.6
76.2
78.7
86.5
92.6
94.8
86.1
83.1
86.7
89.7
90.6
91.7
87.7
92.2
93.1
86.8
92.4
94.2
87.6
93.1
94.9
90.4
93.9
95.2
89.2
92.1
93.7
89.2
94.8
97.3
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Primary processing 3
Advanced processing 4
20 Mining
21 Utilities
22
Electric
1. Data in this table also appear in the B o a r d ' s G.17 (419) monthly statistical release. For
the ordering address, see the inside front cover. The latest historical revision of the industrial
production index and the capacity utilization rates was released in November 1995. See "A
Revision to Industrial Production and Capacity Utilization, 1991-95," Federal
Reserve
Bulletin, vol. 82 (January 1996), pp. 16—25. For a detailed description of the industrial
production index, 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 • August 1996
INDUSTRIAL PRODUCTION
Indexes and Gross Value 1
Monthly data seasonally adjusted
_roup
1992
proportion
1995
1996
1995
avg.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb. r
Mar/
Apr.
Mayp
Index (1987 = 100)
MAJOR
MARKETS
1 Total i n d e x
2 Products
Final products
3
4
Consumer goods, total
Durable consumer goods
6
Automotive products
7
Autos and trucks
8
Autos, consumer
9
Trucks, consumer
Auto parts and allied goods
10
Other
11
Appliances, televisions, and air
12
conditioners
13
Carpeting and furniture
14
Miscellaneous home goods
Nondurable consumer goods
15
Foods and tobacco
16
17
Clothing
18
Chemical products
Paper products
19
Energy
20
Fuels
21
22
Residential utilities
100.0
121.9
121.3
121.4
121.5
122.7
122.8
122.2
122.6
122.8
122.5
124.2
123.6
124.4
125.3
60.6
46.3
28.6
5.6
2.5
1.6
.9
.7
.9
3.0
118.3
121.4
115.1
124.2
130.7
131.4
103.1
181.7
127.8
118.6
117.5
120.6
114.1
121.6
127.1
127.4
99.4
177.1
125.0
116.7
117.9
121.1
114.8
122.3
129.1
129.5
99.2
183.6
126.8
116.3
118.0
121.2
114.6
121.4
125.3
123.9
101.0
163.9
126.6
118.1
119.2
122.4
115.9
124.0
130.7
132.0
100.6
188.2
126.6
118.1
119.4
122.6
116.0
125.8
132.9
133.1
102.6
187.7
130.8
119.6
118.3
121.3
114.9
123.4
128.5
128.6
100.2
179.1
126.7
118.9
118.8
121.9
115.9
124.9
130.5
129.8
100.2
182.8
130.2
119.9
119.2
122.1
115.7
126.3
132.8
132.1
99.5
190.6
132.7
120.5
118.6
121.9
114.6
120.3
125.9
124.1
92.8
180.4
128.1
115.5
120.7
124.5
116.6
125.1
133.1
133.5
99.7
194.4
130.7
118.1
120.0
123.5
115.3
119.3
120.3
111.1
77.0
173.1
137.3
118.4
120.9
124.9
116.1
126.0
134.5
135.9
104.1
192.7
130.0
118.5
121.6
125.6
116.5
126.4
135.2
135.9
107.1
187.0
132.3
118.7
.7
.8
1.5
23.0
10.3
2.4
4.5
2.9
2.9
.9
2.1
135.5
105.8
118.2
112.9
111.3
94.8
131.3
106.6
116.5
108.8
119.6
131.2
103.0
118.1
112.4
111.5
96.7
127.3
106.5
115.8
108.2
119.0
131.4
101.8
118.0
113.1
113.1
94.6
128.6
106.3
115.8
108.8
118.7
132.2
107.9
117.4
113.0
112.8
93.6
128.6
107.6
116.1
108.2
119.4
135.8
104.4
118.0
113.9
111.8
93.9
132.6
106.7
122.3
108.4
128.2
139.4
106.9
117.8
113.7
111.6
93.4
134.0
107.3
119.0
111.4
122.2
140.1
105.6
116.9
112.9
111.1
92.9
135.7
106.6
113.1
107.3
115.4
145.3
104.1
117.6
113.8
110.9
91.5
135.0
108.4
121.1
108.2
126.6
141.9
107.4
118.3
113.2
110.6
89.7
136.5
106.3
119.5
108.6
124.1
132.2
101.1
116.2
113.3
110.6
88.2
138.1
104.9
121.0
108.6
126.1
137.5
103.4
117.7
114.5
112.0
90.3
138.1
106.0
122.6
111.8
127.2
135.9
107.2
116.9
114.4
112.2
89.0
136.8
105.8
123.8
112.2
128.7
139.9
104.4
117.0
113.7
112.2
88.7
134.6
106.3
121.3
112.2
125.1
137.6
105.0
118.0
114.1
111.9
88.6
134.8
107.0
124.8
113.0
129.8
23
24
25
26
27
28
29
30
31
32
33
Equipment
Business equipment
Information processing and related
Computer and office equipment
Industrial
Transit
Autos and trucks
Other
Defense and space equipment
Oil and gas well drilling
Manufactured h o m e s
17.7
13.7
5.7
1.4
4.0
2.6
1.2
1.4
3.3
.6
.2
131.4
155.7
198.1
373.5
127.5
136.3
140.1
123.2
65.9
87.1
152.7
130.8
154.3
193.9
362.1
126.5
139.6
137.8
122.7
66.8
90.5
148.3
131.2
155.1
196.0
363.2
126.2
140.3
139.5
122.6
66.8
86.8
149.6
131.6
155.7
197.2
371.7
127.1
139.8
139.9
122.6
66.5
88.4
148.6
132.9
157.5
201.0
379.6
129.1
138.0
141.3
122.2
66.1
89.5
155.9
133.1
158.2
203.0
390.0
128.7
137.9
143.3
123.3
65.2
88.3
158.0
131.5
156.5
206.5
402.9
128.6
122.3
135.7
120.9
64.4
83.5
158.9
131.4
156.9
208.1
417.8
129.1
119.6
134.2
121.4
62.9
83.1
161.8
132.3
158.4
209.4
431.7
129.5
124.5
135.3
121.7
62.0
83.8
164.4
133.7
160.5
213.3
442.9
129.6
128.1
129.1
122.1
61.6
85.1
158.1
137.3
164.8
220.5
463.3
131.3
133.2
136.0
123.5
63.1
89.7
157.8
136.7
163.0
222.8
481.0
130.5
120.4
113.6
122.5
64.0
96.3
168.2
139.3
166.4
225.5
495.4
130.1
135.3
140.0
122.3
63.8
100.6
170.7
140.4
167.7
229.3
506.5
130.6
134.2
138.6
121.0
64.0
104.3
34
35
36
Intermediate products, total
Construction supplies
Business supplies
14.3
5.3
9.0
109.0
108.2
109.6
108.2
106.6
109.4
108.2
107.2
109.1
108.5
107.3
109.5
109.4
107.0
111.0
109.5
108.4
110.3
109.2
108.3
109.9
109.3
108.7
109.9
110.1
110.5
110.0
108.5
107.2
109.6
109.3
109.3
109.5
109.4
111.0
108.5
108.7
110.4
107.9
109.4
110.7
108.7
37 Materials
38
Durable goods materials
Durable consumer parts
39
40
Equipment parts
41
Other
Basic metal materials
42
Nondurable goods materials
43
44
Textile materials
45
Paper materials
Chemical materials
46
Other
47
48
Energy materials
49
Primary energy
Converted fuel materials
50
39.4
20.8
4.0
7.5
9.2
3.1
8.9
1.1
1.8
3.9
2.1
9.7
6.3
3.3
127.4
141.5
138.5
163.0
126.2
125.7
119.8
109.2
120.5
124.4
116.5
106.6
101.9
116.0
127.2
139.8
135.9
160.3
125.6
125.5
122.2
112.8
125.6
126.2
116.9
107.2
102.3
116.9
126.8
139.7
135.8
161.7
124.5
123.5
120.4
109.0
121.0
125.2
117.4
107.2
103.0
115.5
126.8
140.2
133.9
164.4
124.4
124.9
118.9
102.6
123.9
124.4
113.8
107.5
102.3
118.1
128.1
142.3
138.4
167.1
124.9
123.1
118.8
109.2
120.4
123.1
114.6
108.5
101.4
122.8
128.1
144.1
139.8
169.1
126.8
127.0
117.8
106.2
117.0
123.3
115.1
105.8
101.2
115.0
128.1
143.9
138.6
169.4
126.5
124.3
118.7
107.3
121.4
122.9
114.6
105.5
101.7
113.1
128.4
145.3
140.1
171.0
127.9
128.1
116.6
104.8
114.3
122.7
114.1
105.7
100.8
115.4
128.4
144.8
139.3
170.8
127.2
126.6
117.4
103.3
115.2
121.9
118.9
106.0
101.0
116.2
128.5
145.8
140.6
171.7
128.2
125.7
115.7
100.3
113.4
121.8
115.2
105.9
100.6
116.6
129.4
147.3
141.1
176.3
127.8
123.7
116.1
101.8
113.4
121.3
117.1
106.1
101.3
115.5
129.2
145.7
132.3
177.3
127.4
124.2
116.2
103.1
112.9
121.6
116.4
108.3
104.0
117.0
129.8
147.7
142.3
177.9
127.1
123.5
116.1
100.8
113.3
121.6
117.1
106.7
102.1
115.8
131.0
149.1
143.9
180.2
127.7
123.3
116.4
102.6
114.9
121.0
116.9
108.1
103.3
117.8
97.2
95.2
121.5
120.9
121.0
120.5
121.1
120.5
121.2
120.7
122.3
121.7
122.4
121.8
121.9
121.3
122.3
121.7
122.5
121.9
122.4
121.9
123.8
123.3
123.9
123.7
124.0
123.4
124.9
124.3
98.2
27.0
25.7
118.2
114.0
114.9
117.8
113.3
113.9
117.8
113.9
114.7
117.8
114.0
114.5
118.9
114.8
115.1
118.9
114.9
115.7
118.1
114.0
115.1
118.4
115.0
115.3
118.5
114.7
115.3
118.0
114.0
113.9
119.5
115.5
115.9
118.7
115.6
114.3
119.4
114.8
115.5
120.1
115.2
115.5
12.5
157.0
155.8
156.5
157.2
158.9
159.5
158.4
159.0
160.5
163.5
167.5
167.9
168.9
170.5
12.2
29.7
133.0
134.9
132.5
134.4
133.2
133.8
133.2
133.7
134.4
135.1
134.3
136.1
131.6
136.2
130.8
136.6
131.3
136.4
132.6
136.6
135.5
137.8
132.3
136.7
134.7
138.1
135.1
139.1
SPECIAL
AGGREGATES
51 Total excluding autos and trucks
52 Total excluding motor vehicles and parts
53 Total excluding computer and office
equipment
54 Consumer goods excluding autos and trucks .
55 Consumer goods excluding energy
56 Business equipment excluding autos and
trucks
57 Business equipment excluding computer and
office equipment
58 Materials excluding energy
Selected Measures
2.13
INDUSTRIAL PRODUCTION
Indexes and Gross Value 1 —Continued
1992
proportion
SIC Z
code
Group
A45
1995
avg.
May
June
July
Aug.
Sept
Feb/
Mar.1"
Apr.
Mayp
Index (1987 = 100)
MAJOR
INDUSTRIES
100.0
121.9
121.3
121.4
121.5
122.7
122.8
122.2
122.6
122.8
122.5
124.2
123.6
124.4
125.3
85.4
26.6
58.9
123.9
117.6
126.8
123.2
117.9
125.7
123.3
117.1
126.3
123.3
116.9
126.3
124.2
116.6
127.8
124.9
117.8
128.2
124.4
117.0
127.9
124.5
117.1
128.0
124.8
117.3
128.4
124.5
116.7
128.2
126.2
116.3
131.0
125.2
116.9
129.1
126.5
116.9
131.1
127.2
117.4
131.8
" ' 24
25
45.0
2.0
1.4
132.5
104.5
111.6
131.1
101.7
110.8
131.5
103.0
111.3
131.5
103.7
111.1
133.2
103.7
110.9
134.4
106.2
112.0
133.5
105.7
110.9
134.3
104.8
109.8
134.8
106.9
109.3
134.9
103.1
109.3
137.5
103.3
110.5
135.7
107.4
108.7
138.6
109.5
109.0
139.7
108.8
111.2
2.1
3.1
1.7
.1
1.4
5.0
104.1
119.2
122.4
114.7
114.8
113.9
104.1
119.5
123.0
113.0
114.8
113.7
103.8
117.5
119.2
112.9
114.9
113.7
103.2
118.3
119.3
111.5
116.5
112.4
103.0
115.4
117.7
114.2
111.9
114.3
103.8
121.0
127.0
118.6
113.2
115.1
104.5
115.7
115.1
111.3
115.8
114.0
104.9
120.8
126.1
116.4
113.8
114.5
104.3
120.0
122.7
118.0
116.2
115.0
105.5
121.5
128.1
113.9
113.0
115.6
104.1
117.1
119.5
112.5
113.6
117.0
103.0
117.1
120.2
114.9
112.8
116.0
104.3
118.6
121.9
112.9
114.1
115.8
104.6
118.4
120.3
.
32
33
331,2
331PT
333-6,9
34
35
8.0
177.8
174.6
174.4
176.0
179.5
181.3
183.8
186.5
190.1
191.9
196.1
198.7
199.6
202.1
1.8
7.2
9.5
4.8
2.5
373.5
174.9
113.3
141.9
131.3
362.1
171.1
113.2
138.8
127.3
363.2
173.0
113.4
139.7
129.2
371.7
175.7
111.6
136.7
124.3
379.6
178.7
114.1
142.1
131.6
390.0
180.8
114.1
143.3
132.8
402.9
182.4
109.3
139.7
128.4
417.8
183.6
108.6
140.7
129.6
431.7
182.8
109.7
141.2
131.5
442.9
182.4
108.3
135.5
123.5
463.3
.
.
.
357
36
37
371
371PT
188.7
112.1
141.1
132.8
481.0
188.0
102.9
121.3
109.9
495.4
188.5
114.3
144.3
135.5
506.5
190.8
114.8
145.0
135.8
372-6,9
38
39
4.7
5.4
1.3
85.8
110.7
122.7
88.5
109.6
122.3
88.1
110.9
123.1
87.6
110.2
121.4
87.2
111.4
122.4
85.9
111.3
122.9
80.0
111.4
122.2
77.7
111.5
123.3
79.4
109.7
123.5
82.2
111.0
122.1
84.2
113.4
124.0
85.2
113.0
124.0
85.5
112.7
122.7
85.7
113.7
122.5
40.5
9.4
1.6
1.8
2.2
3.6
6.8
9.9
1.4
3.5
114.4
115.9
89.3
113.6
97.5
122.4
99.0
124.0
107.4
138.2
83.0
114.3
116.1
96.4
110.4
95.5
119.9
98.6
124.4
108.6
137.8
81.2
114.3
115.3
99.1
109.9
94.8
121.3
99.0
124.0
109.0
137.7
78.7
114.3
115.5
91.3
112.4
94.5
118.6
100.5
124.4
108.5
138.7
80.8
114.4
115.5
90.2
110.5
94.5
118.5
99.8
125.3
110.0
139.8
80.5
114.3
115.4
88.2
111.1
93.3
119.7
98.9
126.7
106.9
139.7
79.7
113.7
114.8
88.9
108.9
92.4
116.2
99.3
126.0
107.4
140.3
78.2
113.8
114.8
88.4
108.3
91.5
98.8
126.5
108.9
139.3
76.8
113.1
114.8
87.1
104.1
89.2
114.9
97.9
127.1
108.9
139.0
75.6
113.8
116.0
90.9
106.2
90.9
113.5
98.7
127.1
110.2
139.7
77.1
113.6
115.8
91.7
109.3
89.6
114.9
96.8
.3
114.3
115.3
90.2
112.6
95.7
119.8
99.4
125.0
108.3
139.4
81.3
109.9
140.6
76.6
113.2
115.8
93.1
105.7
90.2
115.3
96.4
126.1
110.3
138.0
75.4
113.4
115.9
90.1
106.6
90.4
116.6
96.6
126.0
109.6
140.1
75.3
6.9
.5
1.0
4.8
.6
99.9
169.3
112.9
91.9
112.3
100.5
164.3
110.8
93.4
111.1
101.0
166.8
112.2
93.6
111.9
100.7
172.2
117.0
91.9
113.5
100.0
172.1
109.7
92.4
111.6
100.0
170.8
116.2
91.2
113.1
98.2
178.3
112.3
89.2
112.4
98.3
175.9
109.5
90.1
110.9
98.1
172.8
108.5
90.1
112.4
97.1
159.5
103.3
90.8
108.9
98.0
157.1
108.0
90.2
117.2
101.1
166.0
114.8
92.7
117.5
99.8
160.5
109.5
92.6
114.0
99.8
158.3
111.9
92.5
111.9
7.7
122.0
122.1
121.7
122.1
121.2
125.5
121.0
121.2
120.6
122.7
122.2
124.5
128.8
130.0
124.3
122.7
122.7
122.4
121.6
125.4
123.7
113.6
125.6
125.5
125.6
127.1
125.6
125.3
132.5
125.1
123.9
129.9
126.6
1.6
126.3
131.1
126.6
129.4
130.3
125.8
80.6
122.8
122.2
122.3
122.5
123.1
123.8
123.4
123.6
123.9
123.9
125.4
125.4
125.5
126.1
83.7
119.5
118.9
119.1
118.9
119.8
120.3
119.6
119.6
119.7
119.3
120.7
119.4
120.6
121.1
59 Total index
60 Manufacturing
61
Primary processing
Advanced processing
62
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
81
82
83
84
85
86
87
88
89
90
91
Nondurable goods
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
Printing and publishing
Chemicals and products . . . .
Petroleum products
Rubber and plastic products .
Leather and products
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
92 Mining
93
Metal
94
Coal
Oil and gas extraction
95
96
Stone and earth minerals
97 Utilities
Electric
98
99
Gas
" ' 20
21
22
23
26
27
28
29
30
31
10
12
13
14
491,493PT
492.493PT
6.1
123.6
118.2
126.6
126.6
127.9
115.6
116.8
SPECIAL AGGREGATES
100 Manufacturing excluding motor
vehicles and parts
101 Manufacturing excluding office
and computing m a c h i n e s . . .
Gross value (billions of 1992 dollars, annual rates)
MAJOR MARKETS
102 Products, total
2,002.9
2,245.6
2,231.5
2,239.1
2,238.8
2,257.8
2,268.1
2,240.3
2,255.8
2,265.7
2,248.9
2,293.1
2,268.4
2,303.8
2,312.8
103 Final
Consumer goods
104
Equipment
105
106 Intermediate
1,552.2
1,033.4
518.8
450.7
1,748.7
1,130.5
618.3
1,737.4
1,122.3
615.1
494.0
1,745.6
1,128.4
617.1
493.5
1,743.2
1,124.0
619.2
495.6
1,760.5
1,135.7
624.8
497.3
1,768.2
1,141.1
627.1
499.9
1,741.9
1,125.1
616.7
498.4
1,756.8
1,139.3
617.5
499.0
1,761.9
1,139.0
622.9
503.8
1,753.0
1,124.7
628.4
495.9
1,794.2
1,148.4
645.8
498.8
1,767.0
1,803.7
1,128.9
1,146.7
638.1
657.0
500.1
1,811.9
1,150.0
661.9
500.9
496.9
1. Data in this table also appear in the B o a r d ' s G.17 (419) monthly statistical release. For
the ordering address, see the inside front cover. The latest historical revision of the industrial
production index and the capacity utilization rates was released in N o v e m b e r 1995. See "A
Revision to Industrial Production and Capacity Utilization, 1 9 9 1 - 9 5 , " Federal
Reserve
501.3
Bulletin, vol. 82 (January 1996), pp. 16-25. For a detailed description of the industrial
production index, 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 • August 1996
HOUSING AND
CONSTRUCTION
Monthly figures at seasonally adjusted annual rates except as noted
1996 r
1995
item
iyy.5
iyy4
iyyo
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
1,378
1,056
322
1,453
1,146
307
803
569
234
1,403
1,113
290
352
1,417
1,087
330
1,514
1,183
331
800
565
235
1,328
1,052
276
341
1,423
1.097
326
1,439
1,163
276
819
582
237
1,390
1,112
278
364
1,459
1,115
344
1,505
1,201
304
832
592
240
1,334
1,063
271
378
Private residential real estate activity (thousands of units except as noted)
NEW
1
2
3
4
5
6
7
8
9
10
11
12
13
UNITS
Permits authorized
One-family
Two-family or more
Started
One-family
Two-family or more
Under construction at end of period'
One-family
Two-family or more
Completed
One-family
Two-family or more
Mobile homes shipped
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
1,199
987
213
1,288
1,126
162
680
543
137
1,193
1,040
153
254
1,372
1,068
303
1,457
1.198
259
762
558
204
1,347
1,160
187
304
l,332 r
997
335
1,354
1,076
278
776
547
229
1,313
1,066
247
340
l,358 r
1,017 r
34 r
1,450
1,125
325
762
539
223
1,332
1,034
298
337
l,379 r
1,046 r
333 r
1,401
1.135
266
772
547
225
1,247
1,019
228
344
l,427 r
l,079 r
348 r
1,401
1,130
271
783
555
228
1,267
1,009
258
352
l,393 r
l,050 r
343 r
1,351
1,109
242
781
560
221
1,320
1,039
281
354
l,450 r
l,073 r
377 r
1,458
1,129
329
790
562
228
1,360
1,081
279
355
l,487 r
1,123 r
364 r
1,425
1,150
275
800
569
231
1,225
1,003
222
352
666
293
670
337
665
372
782
344
707
349
684
350
673
360
679
368
683
372
743
370
786
357
727
368
776
370
126.1
147.6
130.4
153.7
133.4
157.6
131.0
154.2
134.9
162.0
130.0
155.6
135.2
156.2
137.0
160.7
138.6
165.6
131.9
155.3
139.5
164.1
137.0
162.0
138.7
173.7
3.800
3,946
3,801
3.970
4,050
4,090
4,070
4,000
3,870
3,720
3,940
4,200
4,200
106.5
133.1
109.6
136.4
112.2
138.4
116.0
142.5
117.6
144.5
114.8
140.2
113.2
138.7
114.3
139.5
113.9
138.7
114.8
141.2
114.0
138.7
115.7
140.1
116.5
141.9
(thousands
EXISTING UNITS ( o n e - f a m i l y )
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 p u t in place
464,504
506,904
526,597
528,673
528,397
535,106
534,488
531,710
535,143
540,566
531,344
544,012
551,744
22 Private
23
Residential
24
Nonresidential
25
Industrial buildings
26
Commercial buildings
2/
Other buildings
28
Public utilities and other
339,161
210,455
128,706
19,533
42,627
23,626
42,920
376,566
238,884
137,682
21,121
48,552
23,912
44,097
383,887
236,114
147,773
24,154
55,159
23,990
44,470
384,307
231,002
153,305
24,399
57.015
24.525
47.366
385,653
233,982
151,671
24,202
55,709
24,015
47,745
386,960
237,618
149,342
24,096
55.079
23,962
46,205
388,882
237,741
151,141
24,964
56,472
24,547
45,158
386,666
239,427
147,239
24,579
55,482
23,753
43,425
390,266
241,950
148,316
24,153
57,596
24,033
42,534
392,738
241,565
151,173
25,125
56,185
24,511
45,352
390,450
242,029
148,421
23,746
55,301
24,438
44,936
397,832
247,877
149,955
23,458
56,624
24,849
45,024
403,479
251,332
152,147
23,370
57,636
25,516
45,625
29 Public
30
Military
31
Highway
32
Conservation and development
Other
33
125,342
2,454
37,431
5.978
79,479
130,337
2,319
39,882
6,228
81,908
142,713
2,905
42,221
6,316
91,271
144,366
3,124
44,274
6,603
90,365
142,744
3,010
42,902
6,769
90,063
148,146
3,090
42,942
6,469
95,645
145,606
2,527
44,351
5,191
93,537
145,044
3,195
43,361
6,048
92,440
144,877
3,216
43,914
5,823
91,924
147,828
3,176
43,735
5,618
95,299
140,894
3,225
46,483
5,187
85,999
146,180
2,608
45,377
5,668
92,527
148,265
2,917
44,941
5,108
95,299
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.
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
CONSUMER AND PRODUCER
A47
PRICES
Percentage changes based on seasonally adjusted data except as noted
Change from 3 months earlier
(annual rate)
Change from 12
months earlier
Item
Index
level,
May
1996 1
1996
1996
May
June
CONSUMER
1996
1995
1995
May
Change from 1 month earliei
Sept.
Dec.
Mar.
Jan.
Feb.
Mar.
Apr.
May
PRICES2
(1982-84=100)
1
3.2
2.9
3.5
1.6
2.4
4.0
.4
.2
.4
.4
.3
156.6
2.5
6.2
2.7
1.5
3.2
3.6
5.8
3.0
.9
4.3
2.7
-10.5
2.8
2.0
3.0
1.9
1.9
2.2
1.7
2.5
3.2
15.8
3.5
2.6
3.4
.1
1.9
.3
.4
.3
.1
.4
.2
-.1
.3
.6
1.4
.3
.4
.2
.3
3.2
.1
-.1
.3
.1
4
3.3
3.3
3.1
1.5
3.8
1.1
.2
.0
.3
152.0
112.9
165.1
141.7
178.4
2.2
1.1
5.5
2.1
1.8
2.3
2.6
5.0
1.7
1.4
1.3
-2.5
1.5
2.9
1.8
1.6
8.8
-10.2
2.3
1.8
4.4
4.4
10.8
3.4
2.9
2.5
.3
17.8
.3
-.3
.2
— ,4 r
2.4 1
- . R
.4
-.3
2.8
.0
.2
-.1
.0
-.6
.1
-.1
131.0
131.3
84.4
144.1
138.4
7.4
7.9
.0
-1.0
3.9
4.2
-.6
1.5
-.6
-2.9
-1.0
-3.2
-9.2
-1.4
19.2
27.9
15.9
-12.5
4.0
14.6
3.9
34.8
-21.0
-17.6
20.8
33.9
-18.4
-3.8
38.1
-10.2
"S
PRODUCER
PRICES
(1982=100)
7
R
q
10
11
Intermediate
.1
.1
.R
— .3 r
-A'
-,3r
.1
-.2
.3
-.2
.2
.2
126.0
134.2
-,4r
1.1'
-,2r
-,6r
-5.0r
— .7 r
.1
5.9
-1.8
4.0
10.9
-.5
6.3
-3.8
-.3
127.4
83.9
158.0
materials
P
13
Crude
M
15
16 Other
- . R
.5
.6
2.4
.1
-.1
-,2r
materials
1. Not seasonally adjusted.
2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence
measure of homeownership.
SOURCE. U.S. Department of Labor, Bureau of Labor Statistics.
A48
2.16
Domestic Nonfinancial Statistics • August 1996
GROSS DOMESTIC PRODUCT AND INCOME
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1995
Account
GROSS DOMESTIC
By source
Personal consumption expenditures
Durable goods
Nondurable goods
Services
2
3
4
6
/
8
y
10
11
13
Gross private domestic investment
Fixed investment
Nonresidential
Structures
Producers' durable equipment
Residential structures
Change in business inventories
Nonfarm
16
Net exports of goods and services
Exports
Imports
17
18
19
Government consumption expenditures and gross investment
Federal
State and local
14
15
20
21
22
23
24
2B
26
2/
28
By major type of
Final sales, total
Goods
Durable
Nondurable
Services
Structures
1994
1996
1995
QI
Q2
Q3
Q4
Qi r
PRODUCT
Total
1
12
1993
6,550.2
6,931.4
7,245.8
7,147.8
7,196.5
7,298.5
7,340.4
7,417.8
4,454.1
4,960.0
615.8
1,491.4
4,992.3
612.8
1,494.8
5,062.7
625.2
2,852.8
2,884.7
2,914.9
1,064.0
1,046.2
1,068.9
1,070.7
749.7
204.0
769.0
208.4
530.7
4,698.7
580.9
4,924.3
606.4
4,836.3
593.0
4,908.7
604.0
1,368.9
2,554.6
1,429.7
2,688.1
1,486.1
2,831.8
1,471.6
2,771.7
1,486.9
2,817.9
1,065.3
1,028.2
1,072.0
1,050.3
1,074.8
1,013.9
723.6
1,016.3
734.4
197.6
1,036.6
746.3
871.1
1,014.4
850.5
598.8
171.8
954.9
667.2
180.2
427.0
251.7
487.0
287.7
538.8
289.8
194.5
529.0
290.4
20.6
26.8
59.5
48.0
37.0
39.6
-64.9
-96.4
660.0
724.9
722.0
818.4
1,289.9
738.5
199.7
1,522.6
536.8
281.9
202.5
543.8
290.3
545.7
296.5
560.6
301.7
58.1
60.8
34.0
36.1
38.2
41.5
17.8
19.9
-1.7
2.7
-102.3
-106.6
-122.4
-100.8
804.5
906.7
778.6
885.1
796.9
919.3
812.5
913.3
-79.3
829.9
-97.5
832.2
1,314.7
1,358.5
1,346.0
1,359.9
522.1
767.8
516.3
798.4
516.7
841.7
519.9
826.1
6,529.7
6.871.8
7,208.8
7,089.7
2,400.9
2,534.2
1.085.9
1,448.3
3,742.4
2,660.3
1,144.9
1,515.4
2,617.3
1,013.8
1,387.2
909.2
929.7
1,364.5
1,363.5
1,383.7
522.6
837.3
516.7
847.7
507.8
855.7
518.6
865.1
7,162.5
2,642.3
7,260.3
2,684.5
7,322.6
2,697.1
1,134.0
1,508.3
1,162.5
1,522.1
1,164.5
1,532.6
7,419.6
2,749.1
1,191.4
3,904.5
615.7
3,943.2
632.6
3,983.1
642.3
34.0
product
3,920.9
1,118.6
1,498.7
3,852.6
595.3
627.6
619.8
20.6
59.5
15.7
4.9
31.9
27.7
37.0
34.9
58.1
54.4
2.2
3.7
28.5
5.4
38.2
29.2
9.1
27.3
-9.4
-14.0
6,383.8
6,604.2
6,739.0
6,701.6
6,709.4
6,768.3
6,776.5
6,812.7
3,581.7
547.0
Change in business inventories
Durable goods
Nondurable goods
17.8
1,557.7
4,019.1
651.4
-1.7
12.3
MEMO
29
Total G D P in c h a i n e d 1992 d o l l a r s
NATIONAL
INCOME
30
Total
5,194.4
5,495.1
5,799.2
5,697.7
5,738.9
5,849.2
5,911.1
6,001.4
31
32
Compensation of employees
Wages and salaries
Government and government enterprises
Other
Supplement to wages and salaries
Employer contributions for social insurance
Other labor income
3,809.4
4,008.3
3,255.9
602.5
2,653.4
4,209.1
4,178.9
3,393.3
619.6
4,235.9
3,442.3
624.1
4,280.2
4,325.7
3,419.7
621.7
4,141.6
3,363.0
616.3
2,746.6
778.6
2,773.6
785.6
2,818.2
793.7
3,480.1
626.9
2,853.2
3,521.6
634.0
2,797.9
789.5
402.2
365.5
424.0
360.8
417.7
363.6
422.0
367.8
425.9
369.8
430.2
450.9
415.9
478.3
449.3
474.7
447.1
29.0
479.6
451.5
28.1
486.7
454.9
35.0
472.0
443.5
28.5
33
34
35
36
37
3.095.2
584.2
2,511.0
714.2
333.3
380.9
752.4
350.2
800.1
2,887.6
804.1
375.0
429.1
40
Proprietors' income 1
Business and professional 1
Farm 1
41
Rental income of persons 2
102.5
116.6
122.2
120.6
121.6
120.9
125.8
126.9
42
43
44
464.5
464.3
-6.6
6.7
526.5
528.2
-13.3
11.6
588.6
600.8
-28.1
15.9
559.6
594.1
-51.9
17.4
561.1
588.4
-42.3
15.0
614.9
609.6
-9.3
14.6
618.6
611.0
-8.8
45
Corporate profits 1
Profits before tax 3
Inventory valuation adjustment
Capital consumption adjustment
16.5
652.0
649.0
-17.4
20.4
46
Net interest
398.1
392.8
401.0
403.9
402.6
397.8
399.7
397.3
38
39
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
420.0
388.1
32.0
27.6
31.8
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. U.S. Department of C o m m e r c e , Survey of Current
Business.
499.5
461.1
38.4
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
1996
1995
Account
1993
1995
1994
Q2
QI
Q4
Q3
Qlr
PERSONAL INCOME AND SAVING
1 Total personal income
5,479.2
5,750.2
6,101.7
5,995.5
6,061.9
6,135.6
6,213.9
6,288.4
2 W a g e a n d salary d i s b u r s e m e n t s
Commodity-producing industries
3
4
Manufacturing
D i s t r i b u t i v e industries
6
S e r v i c e industries
7
G o v e r n m e n t and government enterprises
3,090.6
781.3
593.1
698.4
1,026.6
584.2
3,241.1
825.0
621.3
739.3
1,074.3
602.5
3,419.7
858.7
642.8
787.9
1,151.3
621.7
3,361.6
856.2
643.4
768.8
1,120.2
616.3
3,393.3
855.0
640.5
778.6
1,140.0
619.6
3,442.3
859.9
642.9
795.4
1,162.8
624.1
3,481.5
863.5
644.5
808.9
1,182.2
626.9
3,520.2
866.2
643.0
821.6
1,198.4
634.0
Other labor income
Proprietors' income1
Business and professional'
Farm'
R e n t a l i n c o m e of p e r s o n s
Dividends
P e r s o n a l interest i n c o m e
15 T r a n s f e r p a y m e n t s
16
O l d a g e s u r v i v o r s , disability, a n d h e a l t h i n s u r a n c e b e n e f i t s
380.9
420.0
388.1
32.0
102.5
186.8
647.3
910.7
444.4
402.2
450.9
415.9
35.0
116.6
199.6
661.6
956.3
472.9
424.0
478.3
449.3
29.0
122.2
214.8
714.6
1,022.6
507.4
417.7
472.0
443.5
28.5
120.6
209.5
701.9
1,002.4
497.6
422.0
474.7
447.1
27.6
121.6
212.2
713.9
1,016.8
505.1
425.9
479.6
451.5
28.1
120.9
215.8
717.5
1,029.9
510.7
430.2
486.7
454.9
31.8
125.8
221.7
725.2
1,041.4
516.1
429.1
499.5
461.1
38.4
126.9
226.6
724.2
1,063.0
529.9
17
259.6
278.1
294.5
290.2
292.7
296.2
298.8
301.0
6,213.9
6,288.4
8
9
10
11
12
13
14
LESS: P e r s o n a l c o n t r i b u t i o n s f o r social i n s u r a n c e
5,479.2
5,750.2
6,101.7
5,995.5
6,061.9
6,135.6
689.9
731.4
794.3
770.0
801.5
798.4
807.2
824.9
2 0 EQUALS: D i s p o s a b l e p e r s o n a l i n c o m e
4,789.3
5,018.8
5,307.4
5,225.5
5,260.4
5,337.2
5,406.7
5,463.5
21
LESS: P e r s o n a l o u t l a y s
4,572.9
4,826.5
5,066.7
4,972.2
5,049.0
5,104.6
5,140.9
5,214.7
2 2 EQUALS: P e r s o n a l s a v i n g
216.4
192.4
240.8
253.3
211.4
232.6
265.8
248.8
24,724.1
16,807.4
18,075.0
25,332.7
17,150.5
18,320.0
25,613.7
17,402.2
18,757.0
25,559.1
17,280.4
18,672.0
25,540.2
17,391.6
18,634.0
25,695.9
17,465.4
18,794.0
25,668.7
17,477.5
18,926.0
25,747.1
17,592.7
18,988.0
4.5
3.8
4.5
4.8
4.0
4.4
4.9
4.6
27 G r o s s s a v i n g
938.4
1,055.9
1,141.6
1,110.5
1,092.3
1,155.7
1,207.9
1,207.5
2 8 G r o s s private s a v i n g
964.5
1,006.0
1,062.5
1,039.9
1,007.3
1,076.1
1,126.6
1,123.6
29 Personal saving
30 Undistributed corporate profits'
31 C o r p o r a t e i n v e n t o r y v a l u a t i o n a d j u s t m e n t
216.4
103.4
-6.6
192.4
120.2
-13.3
240.8
142.5
-28.1
253.3
120.6
-51.9
211.4
122.3
-42.3
232.6
162.0
-9.3
265.8
165.2
-8.8
248.8
178.7
-17.4
Capital consumption
32 C o r p o r a t e
33 N o n c o r p o r a t e
417.0
223.1
441.0
237.7
454.0
225.2
444.4
220.2
451.3
222.4
456.9
224.7
463.6
233.4
465.6
229.1
-26.1
-186.5
68.2
-254.7
160.5
65.6
94.9
49.9
-119.3
70.6
-189.9
169.2
69.4
99.7
79.1
-88.8
73.8
-162.6
167.9
72.9
95.0
70.5
-99.9
73.5
-173.3
170.4
71.4
99.0
85.0
-86.3
74.2
-160.5
171.3
72.3
99.0
79.6
-87.7
73.8
-161.6
167.3
73.4
93.9
81.3
-81.1
73.8
-154.9
162.4
74.3
88.1
83.9
-82.2
73.2
-155.5
166.1
75.1
91.0
41 G r o s s i n v e s t m e n t
993.5
1,087.2
1,146.1
1,146.7
1,113.9
1,150.7
1,173.0
1,168.0
42 Gross private domestic investment
4 3 Gross government investment
44 Net foreign investment
871.1
210.6
-88.2
1,014.4
212.3
-139.6
1,065.3
221.9
-141.1
1,072.0
219.1
-144.4
1,050.3
223.7
-160.1
1,074.8
224.7
-148.9
1,064.0
220.1
-111.0
1,068.9
228.8
-129.8
55.1
31.3
4.5
36.2
21.6
-5.0
-34.9
-39.5
18 EQUALS: P e r s o n a l i n c o m e
19
LESS: P e r s o n a l tax a n d n o n t a x p a y m e n t s
MEMO
Per capita (chained 1992
dollars)
23 Gross domestic product
24 Personal consumption expenditures
25 D i s p o s a b l e p e r s o n a l i n c o m e
26 S a v i n g rate ( p e r c e n t )
GROSS SAVING
allowances
34 Gross government saving
35
Federal
36
C o n s u m p t i o n of fixed capital
C u r r e n t s u r p l u s or deficit ( - ) , n a t i o n a l a c c o u n t s
37
38
State a n d local
39
C o n s u m p t i o n of fixed capital
C u r r e n t s u r p l u s or deficit ( - ) , national a c c o u n t s
40
45 Statistical d i s c r e p a n c y
1. W i t h i n v e n t o r y v a l u a t i o n a n d capital c o n s u m p t i o n a d j u s t m e n t s .
2. W i t h capital c o n s u m p t i o n a d j u s t m e n t .
SOURCE. U.S. D e p a r t m e n t of C o m m e r c e , Survey
of Current
Business.
A50
3.10
International Statistics • August 1996
U.S. I N T E R N A T I O N A L T R A N S A C T I O N S
Summary
Millions of dollars; quarterly data seasonally adjusted except as noted 1
1995 r
Item credits or debits
1 Balance on current account
2
Merchandise trade balance 2
3
Merchandise exports
4
Merchandise imports
Military transactions, net
Other service transactions, net
6
7
Investment income, net
8
U.S. government grants
y
U.S. government pensions and other transfers
10
Private remittances and other transfers
n
Change in U.S. government assets other than official
reserve assets, net (increase, - )
1994 r
1993 r
1996
1995 r
-99,936
-132,609
456,832
-589,441
881
59.690
9.742
-16.823
-4,081
-16,736
-148.405
-166.121
502.463
-668.584
1.963
59.779
-4.159
-15.816
-4.544
-19.506
-148,154
-173,424
575,940
-749,364
3,585
64,775
-8,016
-10.959
-3,420
-20,696
Q1
Q2
Q3
Q4
Qlp
-39,054
-44,923
138,551
-183.474
628
14.780
-900
-2.846
-758
-5.035
-40,976
-47,927
142,983
-190,910
859
15,244
-862
-2.381
-967
-4,942
-37.688
-42.548
144.984
-187,532
1,120
17.093
-4,361
-2,933
-964
-5,095
-30.435
-38.026
149.422
-187.448
978
17.657
-1.890
-2,799
-731
-5,624
-35,588
-42,738
150.019
-192,757
628
17,758
-395
-4,340
-1,026
-5.475
-342
-341
-280
-154
-179
252
-199
52
12 Change in U.S. official reserve assets (increase, - )
13
Gold
14
Special drawing rights (SDRs)
Reserve position in International Monetary Fund
15
16
Foreign currencies
-1.379
0
-537
-44
-797
5.346
0
-441
494
5.293
-9,742
0
-808
-2,466
-6.468
-5,318
0
-867
-526
-3,925
-2.722
0
-156
-786
-1,780
-1.893
0
362
-991
-1.264
191
0
-147
-163
501
17
0
-199
-849
1,065
17 Change in U.S. private assets abroad (increase, —)
18
Bank-reported claims 3
iy
Nonbank-reported claims
U.S. purchases of foreign securities, net
20
21
U.S. direct investments abroad, net
-192.889
29.947
1,581
-146.253
-78,164
-155.700
-8.161
-32.804
-60.270
-54.465
-297,834
-69.146
-34.219
-98,960
-95.509
-56.275
-29.114
-4,537
-7.571
-15.053
-105.398
-41,236
-22,904
-23,011
-18.247
-37,954
8,476
7,500
-35,839
-18,091
-98.206
-7,272
-14.278
-32,539
-44,117
-55.801
4,510
-33.492
-26.819
72,153
48,952
4.062
1,713
14.841
2,585
40.253
30.745
6.077
2.344
3.560
-2.473
109,757
68,813
3.734
1,082
32.862
3,266
21,822
10.132
1,126
-331
10,630
265
37.380
25.208
1,326
235
7.662
2.949
39,186
20.489
518
-71
18.478
-228
11.369
12.984
764
1,249
-3.908
280
51,582
55.600
52
-195
-3.664
-211
178,843
20.859
10,489
24.381
80.092
43,022
245.123
111.842
-7.710
34,225
57.006
49.760
314,705
25,283
34.578
99.340
95,268
60,236
69.173
3,860
9,076
29,969
15,480
10,788
78.041
10.200
7.285
30.368
20.496
9.692
79.630
-21,542
6.945
37,269
31.971
24.987
87,860
32.765
11,272
1.734
27.321
14,768
47,234
-29.449
0
43,550
0
13.724
0
31.548
43,550
13.724
31.548
0
9.806
6.519
3,287
0
33,854
-266
34.120
0
-41,533
-7,407
-34.126
0
29,420
1.153
28.267
0
-7.496
6.365
-13.861
22 Change in foreign official assets in United States (increase, + )
U.S. Treasury securities
23
Other U.S. government obligations
24
Other U.S. government liabilities 4
25
2b
Other U.S. liabilities reported bv U.S. banks 3
27
Other foreign official assets 5
28 Change in foreign private assets in United States (increase, + )
29
U.S. bank-reported liabilities 3
30
U.S. nonbank-reported liabilities
31
Foreign private purchases of U.S. Treasury securities, net
Foreign purchases of other U.S. securities, net
32
33
Foreign direct investments in United States, net
34 Allocation of special drawing rights
35 Discrepancy
36
Due to seasonal adjustment
3/
Before seasonal adjustment
11,734
35.437
29.512
MEMO
Changes in official assets
38 U.S. official reserve assets (increase. - )
Foreign official assets in United States, excluding line 25
(increase, + )
-1.379
5.346
-9.742
-5,318
— 2 722
-1,893
191
17
70,440
37.909
108.675
22.153
37.145
39.257
10,120
51,777
-3,717
-1.529
3.959
-412
-341
6.147
-1.435
-1,417
3Y
40 Change in Organization of Petroleum Exporting Countries official
assets in United States (part of line 22)
1. Seasonal factors are not calculated for lines 12-16. 18-20, 2 2 - 3 4 , and 38-40.
2. Data are on an international accounts basis. The data differ from the Census basis data,
shown in table 3.11, for reasons of coverage and timing. Military exports are excluded from
merchandise trade data and are included in line 5.
3. Reporting banks include all types of depository institutions as well as some brokers and
dealers.
4. Associated primarily with military sales contracts and other transactions arranged with
or through foreign official agencies.
5. Consists of investments in U.S. corporate stocks and in debt securities of private
corporations and state and local governments.
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current
Business.
Summary Statistics
3.11
A51
U.S. FOREIGN TRADE 1
Millions of dollars; monthly data seasonally adjusted
1995 r
Item
1993'
1994 r
1996
1995 r
Oct.
Nov.
Dec.
Jan. r
Feb/
Mar.
Apr. p
1 G o o d s and services, balance
Merchandise
2
3
Services
-72,037
-132,607
60,570
-104,381
-166,123
61,742
-105,064
-173,424
68,360
-6,902
-13,109
6,207
-6,098
-12,324
6,226
-6,399
-12,601
6.202
-9,686
-15,505
5,819
-6,654
-12,784
6,130
-8,012
-14,450
6,438
-8,629
-14,656
6,027
4 Goods and services, exports
5
Merchandise
6
Services
642,953
456,834
186,119
698,301
502,462
195,839
786,529
575,939
210,590
67,534
49,528
18,006
67,997
49,777
18,220
68,088
50,120
17,968
66,493
48,645
17,848
69,163
50,883
18,280
69,277
50,490
18,787
69,941
51,670
18,271
7 G o o d s and services, imports
8
Merchandise
9
Services
-714,990
-589,441
-125,549
-802,682
-668,585
-134,097
-891,593
-749,363
-142,230
-74,436
-62,637
-11,799
-74,095
-62,101
-11,994
-74,487
-62,721
-11,766
-76,179
-64,150
-12,029
-75,817
-63,667
-12,150
-77,289
-64,940
-12,349
-78,570
-66,326
-12,244
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
1995
Asset
1 Total
2 Gold stock, including Exchange
Stabilization Fund 1
3 Special drawing rights
4 Reserve position in International Monetary
Fund"
5 Foreign currencies 4
1992
1993
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
Mayp
71,323
73,442
74,335
86,224
85,755
85,832
82,717
84,270
84,212
83,710
83,469
11.056
8,503
11,053
9,039
11,051
10,039
11,051
10,949
11,050
11,034
11,050
11,037
11,052
10,778
11,053
11,106
11,053
11,049
11,052
10,963
11,052
11,037
11,759
40,005
11,818
41,532
12,030
41,215
14.700
49,524
14,572
49,099
14,649
49,096
14,312
46,575
14,813
47,298
15,249
46,861
15,117
46,578
15,227
46,153
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 member countries. From July 1974 through December
1980, sixteen currencies were used; since January 1981, five currencies have been used. U.S.
3.13
1996
1994
SDR holdings and reserve positions in the IMF also have been valued on this basis since July
1974.
3. Includes allocations of SDRs by the International Monetary Fund on Jan. 1 of the year
indicated, as follows: 1970—$867 million; 1971—$717 million; 1972—$710 million; 1979—
$1,139 million; 1980—$1,152 million; 1981—$1,093 million: plus net transactions in SDRs.
4. Valued at current market exchange rates.
FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS 1
Millions of dollars, end of period
1996
1995
Asset
1992
1993
1994
Oct.
1 Deposits
Held in custody
2 U.S. Treasury securities 2
3 Earmarked gold 3
Dec.
Jan.
Feb.
Mar.
Apr.
Mayp
205
386
250
275
194
386
165
209
191
166
160
314,481
13,118
379,394
12,327
441,866
12,033
507,075
11,709
522,950
11,702
522,170
11,702
532,776
11,702
559,741
11,689
573,435
11,590
573,924
11,445
578,608
11,339
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.
Nov.
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 • August 1996
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1996
1995
Item
1 Total 1
2
3
4
5
6
By type
Liabilities reported by banks in the United States
U.S. Treasury bills and certificates
U.S. Treasury bonds and notes
Marketable
Nonmarketable 4
U.S. securities other than U.S. Treasury securities 5
1994
1993
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr. p
482,915
520,934 r
618,072 r
632,860r
630,645r
644,570r
670,229r
682,470 r
686,645
69,721
151,100
73,386
139,571 r
108,235 r
157,277
109,646 r
171,366
107,128 r
168,534
103,919'
173,949
103,242 r
191,188
103,512 r
198,382
110,447
186,638
212,237
5,652
44,205
254,059
6,109
47,809
291,948
6,407
54,205
291,033
6,449
54,366
293,684
6,491
54,808
306,299
6,120
54,283
314,980
6,159
54,660
319,728
6,199
54,649
327,981
6,236
55,343
207,034
15,285
55,898
197,702
4,052
2,942
215,374
17,235
41,492
236,824
4,180 r
5,827
222,003
20,355
61,694 r
305,025
4,761
4,232
228,180
19,535
62,474 r
311,638
6,086
4,945
222,184
19,473
66,720 r
310,966
6,296
5,004
223,569
19,078
70,28 l r
320,512
6,924
4,204
231,389
18,850
70,497 r
338,999 r
6,574
3,918
242,589 r
20,846
72,557 r
335,006
6,584
4,886
241,161
20,878
70,503
341,360
7,388
5,353
By area
7
8
9
10
11
12
Canada
Latin America and Caribbean
Africa
Other countries
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
LIABILITIES TO, AND CLAIMS ON, FOREIGNERS
Payable in Foreign Currencies
Venezuela, beginning December 1990, 30-year maturity issue; Argentina, beginning April
1993, 30-year maturity issue.
5, Debt securities of U.S. government corporations and federally sponsored agencies, and
U.S. corporate stocks and bonds.
SOURCE. Based on U.S. Department of the Treasury data and on data reported to the
department by banks (including Federal Reserve Banks) and securities dealers in the United
States, and on the 1989 benchmark survey of foreign portfolio investment in the United
States.
Reported by Banks in the United States 1
Millions of dollars, end of period
1995
Item
1 B a n k s ' liabilities
2 Banks' claims
Deposits
3
4
Other claims
5 Claims of banks' domestic customers 2
1992
72,796
62,799
24,240
38,559
4,432
1. Data on claims exclude foreign currencies held by U.S. monetary authorities.
1993
78,259
62,017
20,993
41,024
12,854
1996
1994
89,284
60,689
19,661
41,028
10,878
June
Sept.'
Dec.
Mar.
106,621
77,138
28,909
48,229
10,244
102,147
69,508
25,712
43,796
6,624
112,556 r
74,874
22,688
52,186
6,145
109,620
69,548
22,220
47,328
6,064
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 States 1
Millions of dollars, end of period
1996
1995
Item
1993
1994
1995
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.P
BY HOLDER AND TYPE OF LIABILITY
1 Total, all f o r e i g n e r s
926,672
l,014,808r
l,095,603r
1,098,512
1,104,705
l,095,603r
l,094,332r
l,097,342r
1,096,389
1,096,416
2 Banks' own liabilities
3
Demand deposits
4
Time deposits 2
5
Other 3
6
O w n foreign offices 4
626,919
21,569
175,106
111,971
318,273
718,440
23,386
186,512
112,984
395,558
749,483 r
24,460 r
193,238
139,247 r
392,538
762,723
23,161
202,532
146,456
390,574
755,089
23,114
193,884
154,115
383,976
749,483 r
24.460 1
193,238
139,247 r
392,538
743,153'
22,182
198,513
141,963'
380,495
728,352'
23,507
192,152'
149,000'
363,693'
725,768
23,852
193,121
138,334
370,461
731,691
24,410
191,770
146,597
368,914
299,753
176,739
296,368 r
162,908'
346,120
197,341
335,789
188,575
349,616
201,845
346,120
197,341
351,179
203,478
368,990
223,395
370,621
228,705
364,725
217,106
36,289
86,725
42,532
90,928
52,246
96,533
47,911
99,303
49,969
97,802
52,246
96,533
46,973
100,728
43,404
102,191
40,483
101,433
44,707
102,912
10,936
5,639
15
2,780
2,844
8,606
8,176
29
3,298
4,849
1 l,039 r
10,347 r
21
4,656
5,670 r
10,294
8,466
77
3,901
4,488
9,794
8,339
33
3,631
4,675
9,476
8,558
16
3,527
5,015
11,216
10,390
28
3,979
6,383
5,297
4,275
430
281
692
350
1,828
1,342
1,455
962
692
350
994
764
795
555
918
564
826
426
1,022
0
149
0
341
1
486
0
493
0
341
1
230
0
230
10
298
56
400
0
220,821
64,144
1,600
21,653
40,891
212,957 r
59,935
1,564
23,511
34,860
275,662 r
83,18 l r
2,098
31,120 r
49,963
265,512 r
83,997'
1,646
30,794 r
51,557
281,012 r
85,681 r
1,690
30,757 r
53,234
275,662 r
83,181 r
2,098
31,120 r
49,963
277,868'
85,040'
1,522
28,069'
55,449
294,430'
84,077'
1,655
29,861'
52,561'
301,894
88,055
1,423
31,877
54,755
297,085
91,032
1,679
35,810
53,543
156,677
151,100
153,022 r
139,57 l r
192,481
168,534
181,515
157,277
195,331
171,366
192,481
168,534
192,828
173,949
210,353
191,188
213,839
198,382
206,053
186,638
5,482
95
13,245
206
23,603
344
24,000
238
23,610
355
23,603
344
18,532
347
18,138
1,027
14,970
487
19,065
350
592,171
478,755
160,482
9,718
105,262
45,502
318,273
678,367 r
563,466
167,908
10,633
111,171
46,104
395,558
687,620 r
564,045 r
171,507 r
ll,756r
103,687 r
56,064
392,538
698,949 r
575,518 r
184,944 r
11,341
114,24 l r
59,362
390,574
687,285'
561,985 r
178,009 r
11,232
105,27 l r
61,506
383,976
687,620'
564,045 r
171,507'
11,756'
103,687'
56,064
392,538 .
682,872'
554,643'
174,148'
10,247
110,515'
53,386
380,495
666,209'
536,903'
173,210'
10,948
104,309'
57,953
363,693'
663,190
536,108
165,647
11,453
101,117
53,077
370,461
661,499
533,978
165,064
11,905
96,810
56,349
368,914
113,416
10,712
114,901 r
ll,251r
123,575
15,869
123,431
16,429
125,300
16,687
123,575
15,869
128,229
15,992
129,306
17,947
127,082
15,967
127,521
16,801
17,020
85,684
14,505
89,145
13,035
94,671
9,754
97,248
13,070
95,543
13,035
94,671
13,590
98,647
12,094
99,265
11,864
99,251
10,699
100,021
102,744
78,381
10,236
45,411
22,734
114,878 r
86,863
11,160
48,532
27,171
121,282
91,910
10,585
53,775
27,550
123,757
94,742
10,097
53,596
31,049
126,614
99,084
10,159
54,225
34,700
121,282
91,910
10,585
53,775
27,550
122,970
93,842
10,383
55,544
27,915
125,646'
97,110'
10,861
54,503'
31,746'
121,829
93,047
10,960
56,600
25,487
126,616
96,291
10,798
55,171
30,322
24,363
10,652
28,015 r
11,805 r
29,372
12,588
29,015
13,527
27,530
12,830
29,372
12,588
29,128
12,773
28,536
13,705
28,782
13,792
30,325
13,241
12,765
946
14,633
1,577
15,267
1,517
13,671
1,817
12,796
1,904
15,267
1,517
14,621
1,734
12,942
1,889
13,351
1,639
14,543
2,541
17,567
17,895
9,099
10,290
9,837
9,099
10,479
10,544
10,005
8,306
7 Banks' custodial liabilities 5
8
U.S. Treasury bills and certificates 6
9
Other negotiable and readily transferable
instruments 7
10
Other
11 Nonmonetary international and regional organizations 8 . . .
12
Banks' own liabilities
13
Demand deposits
14
Time deposits 2
Other 3
15
16
17
18
19
Banks' custodial liabilities 5
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments 7
Other
20 Official institutions 9
21
Banks' own liabilities
22
Demand deposits
Time deposits 2
23
24
Other 3
25
26
27
28
Banks' custodial liabilities 5
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments 7
Other
29 Banks 1 0
30
Banks' own liabilities
31
Unaffiliated foreign banks
32
Demand deposits
33
Time deposits 2
34
Other 3
35
O w n foreign offices 4
36
37
38
39
Banks' custodial liabilities 5
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments 7
Other
40 Other foreigners
41
Banks' own liabilities
42
Demand deposits
Time deposits 2
43
44
Other 3
45
46
47
48
Banks' custodial liabilities 5
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments 7
Other
MEMO
49 Negotiable time certificates of deposit in custody for
foreigners
1. Reporting banks include all types of depository institutions as well as some brokers and
dealers. Excludes bonds and notes of maturities longer than one year.
2. Excludes negotiable time certificates of deposit, which are included in " O t h e r negotiable and readily transferable instruments."
3. Includes borrowing under repurchase agreements.
4. For U.S. banks, includes amounts owed to own foreign branches and foreign subsidiaries consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory
agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists
principally of amounts owed to the head office or parent foreign bank, and to foreign
branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank.
5. Financial claims on residents of the United States, other than long-term securities, held
by or through reporting banks for foreign pustomers.
1 l,039 r
10,347 r
21
4,656
5,670 r
10,622'
9,628'
30
4,385
5,213'
11,057'
10,262'
43
3,479'
6,740'
6. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official
institutions of foreign countries.
7. Principally bankers acceptances, commercial paper, and negotiable time certificates of
deposit.
8. Principally the International Bank for Reconstruction and Development, the InterAmerican Development Bank, and the Asian Development Bank. Excludes "holdings of
dollars" of the International Monetary Fund.
9. Foreign central banks, foreign central governments, and the Bank for International
Settlements.
10. Excludes central banks, which are included in "Official institutions."
A54
3.17
International Statistics • August 1996
LIABILITIES TO FOREIGNERS Reported by Banks in the United States 1 —Continued
1995
Item
1993
1996
1995R
1994
Oct.
Nov.
Dec.
1,098,512
1,104,705
l,095,603r
1,088,218
1,094,911
l,084,564
r
376,427
4,887
25,192
3,177
2,419
43,134
26,362
2,033
10,251
384,013
4,755
28,357
3,418
2,315
40,415
26,798
2,265
10,759
15,317
1,287
2,718
8,979
10,809
3,720
41,178
4,010
148,384
362,786
3,537
24,842
2,921
2,831
39,204
Jan.
Feb.
Mar.
l,094,332r
l,097,342r
l,096,389r
1,096,416
1,083,710
l,086,285r
l,086,913r
1,085,200
375,642
3,477
27,572
2,787
2,203
41,364
24,854
1,714
10,178
12,397
915
2,529
8,798
19,548
3,943
36,805
4.453
146,669
145
25.291
Apr."
AREA
5 0 T o t a l , all f o r e i g n e r s
51
52
53
54
53
56
37
58
39
60
61
62
63
64
63
66
6/
68
69
70
/I
Foreign countries
Austria
B e l g i u m and L u x e m b o u r g
Denmark
Finland
France
Germany
Greece
Italy
Netherlands
Norway
Portugal
Russia
Spain
Sweden
Switzerland
Turkey
United Kingdom
Yugoslavia 1 1
Other Europe and other former U.S.S.R.12
72
Canada
73
Latin A m e r i c a a n d C a r i b b e a n
Argentina
Bahamas
Bermuda
Brazil
British W e s t Indies
Chile
Colombia
Cuba
Ecuador
Guatemala
Jamaica
Mexico
Netherlands Antilles
Panama
74
/3
76
II
78
19
80
81
82
83
84
83
86
8/
88
89
90
91
Uruguay
Venezuela
Other
92
93
94
93
96
97
98
99
100
101
102
103
104
China
P e o p l e ' s R e p u b l i c of C h i n a
R e p u b l i c of C h i n a ( T a i w a n )
Hong Kong
India
Indonesia
Israel
Japan
Korea (South)
Philippines
Thailand
Middle Eastern oil-exporting countries13
Other
926,672
l,014,808r
l,095,603r
915,736
r
l,084,564
r
377,911
1,917
28,670
4,517
1,872
40,316
26,685
1,519
11,759
16,096
2,966
3,366
2,511
20,496
2,738
41,560
3,227
133,993
372
33,331
390,710R
3,588
21.877
2,884
1,436
44,36 lr
27,109
1,393
10,885
16,033
2,338
2.846
2,726
14.675
3,094
40,515
3,341
163,795R
245
27,769
362,786
3,537
24,842
2,921
2,831
39,204
24,035
2,011
20,235
24,768
l,006,202
10.875
13,724
1,394
2,761
7,950
10,012
3,245
43,627
4,124
139,127
177
26,389
26,373R
R
362,238
14,477
73,820
8,117
5,301
193,699
3,183
3,171
33
880
1,207
410
28,019
4,686
3,582
929
1,611
12,786
6,327
423,830
17,203
104,002
8,424
14,933
1,048
2,902
7,338
13,467
2,035
42,588
4,067
147.448
210
22,936
35,378
171
28,358
27,450
9.145
229,599'
3,127R
4,615
13
875
1,121
529
12,227R
5,217
4.551
900
1,597
13,985R
6,700
440,216
12,236
94,991
4,897
23,797
239,083
2,825
3,666
8
1,315
1,275
481
24,555
4,672
4,265
974
1,835
11,810
7,531
439,920
11.539
96,287
6,589
27,366
236,053
2,574
3,399
13
1,311
1,068
430
20,894
5,349
4.561
897
1,856
12,642
7,092
436,580
13,031
87,719
6,561
27,364
144,527
154,334R
240,775
222,967
4,011
10,627
17,132
1,114
1,986
10,066
9,844
17,104R
2.338
1.587
5,157
62.98 lr
5.124
33,750
11,714
20,304
3,373
2,708
4,073
109,193
5,782
4,435
61,466
4,913
2,035
2.714
6,137
6,466
15,822
14,849
15,482
15,471
24,035
2,011
10,875
13,724
1,394
2,761
7,950
10,012
3,245
43,627
4,124
139,127
177
26,389
26,373R
440,216
12,236
94,991
27,434
27,360R
26,749
433,725R
11,985
88,09 R
5,035
21,489R
240,630R
2,815
3,846
7
1,274
431,101
14,117
85,910
4,262
20,107
239,269
2,838
3,990
57
1,265
1,085
516
23,330
5,272
3,889
1,081
1,748
14,244
R
24,555
4,672
4,265
974
1,835
11,810
7,531
227.438R
2,772
3,890
7
1,201
L,075 R
495
23,899
4,461
4,166R
1,092
1,726
12,611
232,222
240,775
238,175
249,447R
241,944R
237,820
22,341
10,729
21,893
3,010
2,174
3,812
104,566
5,368
29,875
11,365
20,287
3,272
2,485
4.090
105,546
5,593
33,750
11,714
20,304
3,373
2,708
4,073
109,193
5,782
35,733
12.311
20,307
3,263
2,011
4,348
106,728
5,092
32,200
12,955
22,286
3.527
2,349
5,780
3,089
12,279
15,582
18,928
2,839
10,458
17,350
18,427
2,880
12,144
2,394
13,121
14,417
18,450
25,861
14,953
18,479
3,752
2,627
5.450
111,654
5,860
2,463
18,447
3,089
12,279
15,582
18,928
24,430
15,513
20,187
3,990
2,169
5,344R
117,313R
5,875R
2,336
7,641
2,136
104
7,211
1,948
7,793
1,907
7,641
7,679
2,136
66
739
10
1.797
2,855
934
4
1,544
2,715
60
1,206
9
1,826
2,785
104
739
10
1,797
2,855
1,848
99
1,217
11
1.774
2,730
16,238
4,897
23,797
239,083
2,825
3,666
8
1,315
1,275
481
6,524R
1,879
97
433
9
1,343
2,163'
112 O t h e r
Australia
113
114
Other
4,192
3,308
884
6.036
5,142
894
6,773
5.644
1,129
6,315
5,007
1,308
6,853
5,758
1,095
6,773
5,644
1,129
10,936
6,851
3,218
867
8,606
7.537
613
456
11.039 r
9,300r
893
846
10,294
8,458
552
1,284
9,794
8,470
ll,039r
9,300r
893
846
28,625
233,383
2,978
3,713
7
1,236
1,058
500
23,643
4,448
4,030
1,025
1,799
12,662
7,499
240,353
2,696
3,443
8
1,307
1,210
447
20,993
5,644
4,287
916
1.912
11,622
7,067
2,208
99
451
12
1,303
2,560
11. S i n c e D e c e m b e r 1992, h a s e x c l u d e d B o s n i a , Croatia, and S l o v e n i a .
12. I n c l u d e s the B a n k f o r I n t e r n a t i o n a l S e t t l e m e n t s . S i n c e D e c e m b e r 1992, h a s
i n c l u d e d all p a r t s of the f o r m e r U.S.S.R. ( e x c e p t R u s s i a ) , a n d B o s n i a , Croatia, a n d S l o v e n i a .
13. C o m p r i s e s B a h r a i n , Iran, Iraq, K u w a i t , O m a n , Qatar, S a u d i A r a b i a , a n d U n i t e d A r a b
E m i r a t e s (Trucial States).
14. C o m p r i s e s A l g e r i a , G a b o n , L i b y a , a n d N i g e r i a .
370,572R
2,848R
25,584R
2,876
1,768
41,330R
25,229R
1,966
11,475
12,839R
L,034R
2,843
9,321
18,976
2,256
39,083
4,103
144,129
143
22,769R
422,029
11,764
91,203
4,702
21,761
6,633
115 N o n m o n e t a r y international a n d r e g i o n a l o r g a n i z a t i o n s . . .
International15
116
Latin A m e r i c a n r e g i o n a l 1 6
117
Other regional17
118
374,048
2,996
27,182
3,861
2,409
41,099
24,695
2,063
12,468
12,173
1,246
2,931
9,180
11,589
2,813
42,010
4,559
146,985
163
23,626
435,703
13,524
96,850
4,633
22,715
105 A f r i c a
Egypt
Morocco
107
108
South Africa
109
Zaire
Oil-exporting countries14
110
Other
111
106
368,325
3,437
24,881
2,979
2,421
39,697
25,988
1,998
9,616
11,350
1,067
3,055
7,858
11,838
2,555
40.806
4,350
152,654
163
21,612
371
953
1,166'
113,36 l r
5,607
2,366
1,060R
503
24,574R
4,402
4,026R
962R
1,908
13,255R
7,863'
12,158
8,121
13,389
13.491
13,741R
22,136
18,888
12,905
14,895
18,921
7,818
2,375
52
7,089
2,057
7,832
2,002
65
114
8
1,968
2,750
413r
9r
1,706
2,839
1,001
8
1,904
2,803
5.203
4,326
877
5,509
4,503
1,006
6,223
5,239
984
6,056
4,896
1,160
10,622'
9,639r
349
634
1 l,057r
10,023 r
292r
742
9,476
7,938
758
780
11,216
9,932
422
862
665
15. P r i n c i p a l l y the International B a n k f o r R e c o n s t r u c t i o n a n d 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 I n t e r n a t i o n a l 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. A s i a n , A f r i c a n , M i d d l e E a s t e r n , and E u r o p e a n r e g i o n a l o r g a n i z a t i o n s , e x c e p t the B a n k
f o r International S e t t l e m e n t s , w h i c h is i n c l u d e d 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 States 1
Payable in U.S. Dollars
Millions of dollars, end of period
1996
1995
Area or country
1993
1994
1995
Oct.
1 Total, all f o r e i g n e r s
2 Foreign countries
3 Europe
4
Austria
Belgium and Luxembourg
5
6
Denmark
Finland
7
8
France
9
Germany
10
Greece
11
Italy
12
Netherlands
13
Norway
14
Portugal
15
Russia
16
Spain
Sweden
17
18
Switzerland
19
Turkey
United Kingdom
20
21
Yugoslavia 2
22
Other Europe and other former U.S.S.R. 3
Nov.
Dec.
Jan.
Feb.
Mar,
Apr.P
483,242
526,341 r
522,636 r
533,891 r
526,34lr
522,929 r
516,195 r
525,176
521,174
486,092
478,651
524,410
r
r
r
r
r
513,416 r
521,362
518,458
123,741
412
6,532
382
594
11,822
7,724
691
8,834
3,063
396
834
2,310
3,717
4,254
6.605
1,301
62,013
473
1,784
123,380
692
6,738
1,129
512
12,146
7,608
604
6,043
2,959
504
938
973
3,530
4,098
5,746
878
66,846
265
1,171
130,316
565
7,599
403
1,055
14,799
8,864
449
5,364
5,051
665
888
660
2,166
2,060
7,074
785
67,388
147
4,334
138,574
773
8,519
599
1,313
13,161
8,774
603
4,838
4,722
1,408
743
775
4,041
2,151
4,016
707
78,040
118
3,273
137,429
792
5,778
398
1,782
13,732
9,260
507
5,855
5,553
1,016
773
868
5,420
2,056
4,841
810
73,175
120
4,693
134,650
1,083
8,611
293
1,305
11,488
8,647
622
5,696
6,264
793
889
741
5,349
3,514
6,374
973
68,576
208
3,224
488,497
520,978
131,519
880
7,103
634
1,916
14,807
8,081
404
5,530
4,592
1,457
1,036
696
3,162
2,642
6,335
830
69,015
233
2,166
532,470
131,660
639
10,691
602
1,097
15,259
8,431
378
5,390
4,909
1,376
862
949
3,191
2,362
5,925
926
66,911
237
1,525
524,410
130,316
565
7,599
403
1,055
14,799
8,864
449
5,364
5,051
665
888
660
2,166
2,060
7,074
785
67,388
147
4,334
520,627
133,923
683
8,365
541
1,397
12,253
8,072
555
5,010
4,305
1,098
853
678
3,811
2,315
4,613
732
75,147
481
3,014
18,617
18,490
16,095 r
17,810 r
17,000 r
16,095 r
15,680 r
13,824 r
13,395
17,339
24 Latin America and Caribbean
25
Argentina
26
Bahamas
27
Bermuda
28
Brazil
29
British West Indies
30
Chile
31
Colombia
32
Cuba
Ecuador
33
34
Guatemala
35
Jamaica
Mexico
36
37
Netherlands Antilles
38
Panama
39
Peru
40
Uruguay
41
Venezuela
42
Other
225,238
4,474
63,353
8,901
11,848
99,319
3,643
3,181
0
681
288
195
15,879
2,683
2,894
657
969
2,910
3,363
223,523
5,844
66,410
8,481
9,583
95,741
3,820
4,004
0
682
366
258
17,749
1,396
2,198
997
503
1,831
3,660
257,399
6,439
59,258
5,718
13,297
123,914
5,024
4,550
0
825
457
323
18,028
9,229
3,018
1,829
466
1,661
3,363
251,325
6,003
55,788
5,537
13,334
123,700
4,660
4,593
0
846
385
289
16,657
9,233
2,846
1,501
441
1,826
3,686
266,635
6,090
60,030
8,096
12,983
129,472
4,775
4,516
0
847
424
285
16,826
12,048
3,049
1,577
434
1,695
3,488
257,399
6,439
59,258
5,718
13,297
123,914
5,024
4,550
0
825
457
323
18,028
9,229
3,018
1,829
466
1,661
3,363
257,146
6,185
60,284
5,011
13,252
122,759
4,996
4,622
0
841
439
299
17,114
11,043
2,845
1,762
422
1,575
3,697
248,554
6,057
63,311
4,742
13,915
108,833
4,593
4,492
0
842
461
362
17,167
12,973
2,820
1,928
463
1,572
4,023
252,724
6,214
65,628
4,829
13,817
113,236
4,559
4,547
0
977
465
332
16,951
10,902
2,612
1,936
623
1,559
3,537
245,773
6,206
54,496
5,031
14,270
118,566
4,653
4,523
0
959
473
335
17,193
8,728
2,503
2,129
579
1,375
3,754
43
111,775
107,079
115,406
114.575
11 l,438 r
115,406
108,989
106,987
111,265
114,590
3,405
1,625
15,320
1,796
1,479
642
54,543
16,922
779
2,972
7,300
7,807
23 C a n a d a
China
People's Republic of China
Republic of China (Taiwan)
Hong Kong
India
Indonesia
Israel
Japan
Korea (South)
Philippines
Thailand
Middle Eastern oil-exporting countries 4
Other
2,271
2,625
10,828
589
1,527
826
60,032
7,539
1,410
2,170
15,115
6,843
836
1,448
9,161
994
1,470
688
59,151
10,286
662
2,902
13,748
5,733
1,023
1,713
12,895
1,846
1,678
739
61,308
14,136
1,350
2,597
9,639
6,482
1,241
1,595
12,539
1,924
1,623
886
61,878
13,357
673
2,568
9,963
6,328
1,069
1,484
10,713
1,823
l,578 r
728
60,522
14,115
789
2,538
9,604
6,475
1,023
1,713
12,895
1,846
1,678
739
61,308
14,136
1,350
2,597
9,639
6,482
1,014
1,407
13,254
1,864
1,458
668
55,897
14,501
814
2,397
8,053
7,662
1,351
1,404
13,867
1,859
1,478
683
55,077
15,454
779
3,256
6,410
5,369
2,439
1,729
15,545
1,869
1,604
665
52,771
17,242
1,202
3,061
7,145
5,993
56 Africa
57
Egypt
58
Morocco
59
South Africa
60
Zaire
61
Oil-exporting countries 5
62
Other
3,861
196
481
633
4
1,129
1,418
3,050
225
429
671
2
856
867
2,727
210
514
465
1
552
985
2,783
224
457
604
1
586
911
2,732
268
433
462
1
578
990
2,727
210
514
465
1
552
985
2,798
208
514
483
1
589
1,003
2,879
237
561
520
1
526
1,034
2,884
247
585
567
1
516
968
2,743
225
594
493
1
501
929
63 Other
64
Australia
65
Other
2,860
2,037
823
3,129
2,186
943
2,467
1,622
845
2,966
2,095
871
3,005
1,969
1,036
2,467
1,622
845
2,091
1.822
269
2,598
2,243
355
3,665
2,645
1,020
3,363
2,620
743
66 Nonmonetary international and regional organizations 6 . . .
2,405
4,591
1,931
1,658
1,421
1,931
2,302
2,779 r
3,814
2,716
44
45
46
47
48
49
50
51
52
53
54
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 " O t h e r Europe."
A56
3.19
International Statistics • August 1996
BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS
Payable in U.S. Dollars
Reported by Banks in the United States 1
Millions of dollars, end of period
1995 r
Type of claim
1993
1996
1995 r
1994
Oct.
Nov.
522,636
20,878
303,573
103,947
47,103
56,844
94,238
533,891
19,368
308,664
99,555
42,905
56,650
106,304
Dec.
Jan. r
Feb. r
522,929
23,148
300,730
97,238
35,520
61,718
101,813
516,195
24,365
290,691
98,137
37,565
60,572
103,002
Mar.
1 Total
575,818 r
599,521
649,108
2 Banks' claims
3
Foreign public borrowers
4
Own foreign offices 2
Unaffiliated foreign banks
5
6
Deposits
7
Other
8
All other foreigners
488,497
29,228
285,510
100,865
49,892
50,973
72,894
483,242
23,416
283,183
109,228
59,250
49,978
67,415
526,341
22,522
303,902
98,700
37,343
61,357
101,217
87,32 l r
41.734
116,279
64,829
122,767
58,519
122,767
58,519
125,891
68,800
31,186
36,008
44,161
44,161
39,274
14.40T
15,442
20,087
20,087
17,817
7.920 r
8,427
8.410
8,410
9,026
29.150
32,796
30,717
9 Claims of banks' domestic customers 3
10
Deposits
11
Negotiable and readily transferable
instruments 4
12
Outstanding collections and other
claims
MEMO
13 Customer liability on acceptances
14 Dollar deposits in banks abroad, reported by
nonbanking business enterprises in the
United States 5
33,828
31,355
30,717
27,830
525,176
27,668
293,465
101,620
41,609
60,011
102,423
35,042
32,777
521,174
25,111
294,167
99,686
37,621
62,065
102,210
n.a.
principally of amounts due from the head office or parent foreign bank, and from foreign
branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank.
3. Assets held by reporting banks in the accounts of their domestic customers.
4. Principally negotiable time certificates of deposit, bankers acceptances, and commercial
paper.
5. Includes demand and time deposits and negotiable and nonnegotiable certificates of
deposit denominated in U.S. dollars issued by banks abroad.
1. For banks' claims, data are monthly; for claims of banks' domestic customers, data are
for quarter ending with month indicated.
Reporting banks include all types of depository institution as well as some brokers and
dealers.
2. For U.S. banks, includes amounts due from own foreign branches and foreign subsidiaries consolidated in quarterly Consolidated Reports of Condition tiled with bank regulatory
agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists
3.20
651,067
649,108
526,341
22,522
303,902
98,700
37,343
61,357
101.217
Apr. p
BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS
Payable in U.S. Dollars
Reported by Banks in the United States 1
Millions of dollars, end of period
1995
Maturity, by borrower and area"
1 Total
2
3
4
5
6
7
8
9
10
11
1?
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 America and Caribbean
Africa
All other 3
Maturity of more than one year
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other 3
1992
1993
June
Sept.
Dec/
Mar. p
195,119
202,566
200,042
220,289 r
216,966 r
222,338
231,724
163,325
17,813
145,512
31,794
13,266
18,528
172,662
17,828
154,834
29,904
10,874
19,030
168,331
15,435
152,896
31,711
7,838
23,873
186,312
15,822 r
170,490 r
33,977 r
7,892
26,085 r
178,666
14,192 r
164,474 r
38,300 r
8,220
30,080 r
176,177
15,015
161,162
46,161
7,506
38,655
191,916
19,574
172,342
39,808
8,110
31,698
53,300
6,091
50,376
45,709
1,784
6,065
57,413
7,727
60,490
41,418
1,820
3,794
55,742
6,690
58,877
39,851
1,376
5,795
60,323
7,838
68,630
43,945
1,447
4,129
52,045
7,135
71,319
42,536
1,261
4,370
53,897
6,089
72,397
40,133
1,272
2,389
56,631
4,966
84,407
40,212
1,302
4,398
5,367
3,287
15,312
5,038
2,380
410
5,310
2,581
14,025
5,606
1,935
447
4,203
3,505
15,717
5,318
1,583
1,385
4,240
3,685
17,557
6,058 r
1,389
1,048
4,594
3,57 l r
20,224
7,373
1,389
1,149
4,885
2,731
27,807
8,023
1,429
1,286
6,827
2,563
19,546
8,467
1,474
931
1. Reporting banks include all types of depository institutions as well as some brokers and
dealers.
1996
1994
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 1
Billions of dollars, end of period
1992
1996
1995
1994
Area or country
1993
Mar.
June
Sept.
Dec.
Mar.
June
Sept.
Dec.
Mar. p
540.9 r
525.0 r
526.3 r
549.7 r
568.8
10.2
19.8
31.2
10.6
3.5
3.1
5.7
89.4 r
10.5
25.9
201.6 r
9.4 r
19.3
29.8 r
10.7
4.3
3.0
6.2
85.9 r
11.1
22.1
196.6 r
10.7 r
17.4 r
27.2 r
12.6
4.r
2.7
6.3 r
79.8
11.9
24.0
203.7 r
13.5 r
19.2
26.8 r
11.5
3.4 r
2.7
6.3 r
82.4 r
9.4
28.5
201.3
10.5
17.9
31.5
13.1
3.0
3.2
5.2
84.8
9.2
22.9
344.7
407.7
475.7 r
484.8 r
485.7 r
495.6 r
131.3
,0 r
15.3
9.1
6.5
,0 r
2.3
4.8
59.7
6.3
18.8
161.8
7.4
12.0
12.6
7.7
4.7
2.7
5.9
84.3
6.9
17.6
177.8 r
7.9 r
16.6
29.7
15.6
3.8
2.9
4.5
69.4 r
7.8
19.6
172.4 r
8.6
18.6
24.7
14.0
3.4
3.0
5.4
64.0 r
9.9
20.7
182.2 r
9.6
20.7
24.0
11.6
3.4
2.6
5.5
78.1 r
10.2
16.5
189.9 r
7.0
19.1
24.7
11.8
3.6
2.7
5.1
85.2 r
10.0
20.7
13 Other industrialized countries
Austria
14
Denmark
15
Finland
16
Greece
17
Norway
18
Portugal
19
Spain
20
Turkey
21
22
Other Western Europe
South Africa
23
Australia
24
24.0
1.2
.9
.7
3.0
1.2
.4
8.9
1.3
1.7
1.7
2.9
25.6
.4
1.0
.4
3.2
1.7
.8
9.9
2.1
2.6
1.1
2.3
42.0 r
1.0
1.0 r
1.0
3.7 r
1.6
1.2
13.2
2.4
3.1
1.2
12.7
42.5 r
1.0
1.1
.8
4.6
1.6
1.1
12.6
2.1
2.8
1.2
13.7
42.5 r
1.0
,9 r
.8
4.2 r
1.6
1.0
14.0
1.8
1.0
1.2
15.0
45.0 r
1.1
1.3
.9
4.4 r
2.0
1.2
13.6
1.6
2.7
1.0
15.4
43.9 r
.9
1.7
1.1
4.8 r
2.4
1.0
14.1
1.4
2.5
1.5
12.6
43.lr
.7
1.1
.5
4.9 r
1.8
1.2
13.3
1.4
2.6
1.4
14.3
50.0 r
1.2
1.8
.7
5.0 r
2.3
1.9 r
13.3
1.9 r
3.0
1.3
17.4
50.0
.9
2.6
.8
5.6 r
3.2
l.3 r
11.6
1.8 r
4.7
1.2
16.4
60.7
1.2
3.1
.7
5.5
2.1
1.6
17.5
1.9
3.8
1.7
21.7
25 O P E C 2
Ecuador
26
Venezuela
27
Indonesia
28
Middle East countries
29
African countries
30
15.8
.6
5.2
2.7
6.2
1.1
17.4
.5
5.1
3.3
7.4
1.2
22.9
.6
4.6
3.4
13.2
1.1
21.6
.5
4.4
3.2
12.4
1.1
21.6 r
.4
3.9
3.3
13.0
1.1
23.8 r
.5
3.7
3.8
15.0
,8 r
19.5
.5
3.5
4.0
10.7
.7
20.2 r
.7
3.5
4.1
11.4
.5 r
22.4 r
.7
3.0
4.4
13.6 r
.6
22.r
.7
2.7
4.8 r
13.3
.6
21.1
.8
2.9
4.7
12.3
.5
31 N o n - O P E C developing countries
72.6
83.1
94.5 r
94.7 r
93.1'
95.9 r
98.4 r
103.6
104.0 r
112.5 r
116.2
6.6
10.8
4.4
1.8
16.0
.5
2.6
7.7
12.0
4.7
2.1
17.8
.4
3.1
8.7
12.7
5.1
2.r
19.0
.6
2.9
9.8
12.0
5.1
2.4
18.6
.6
2.7
10.5
9.3
5.5
2.4
19.8
.6
2.8
11.2
8.4
6.1
2.6
18.4
.5
2.7
11.4
9.2
6.4
2.6
17.8
.6
2.4
12.3
9.9 r
7.1
2.6
17.6
.8
2.6
10.9
13.6 r
6.4
2.9
16.3
.7
2.6
12.9
13.7 r
6.8
2.9
17.3
.8
2.8
12.7
17.2
6.4
2.9
16.1
.9
3.1
.7
5.2
3.2
.4
6.6
3.1
3.6
2.2
3.1
2.0
7.3
3.2
.5
6.7
4.4
3.1
3.1
3.1
.8
7.6
3.4
.4
14.1
5.2
3.4
3.0
3.1
.8
7.1
3.7
.4
14.3
5.2
3.2
3.3
3.2
1.0
6.9
3.9
.4
14.4
3.9
2.9
3.5
3.4
1.1
9.2
4.2
.4
16.2
3.1
3.3
2.1
4.7
1.1
8.5
3.8
.6
16.9
3.9
3.0
3.3
4.9
1.4
9.0
4.0
.7
18.7
4.1
3.6
3.8
3.5
1.7
9.0
4.4
.5
18.0
4.3
3.3
3.9
3.7
1.8
9.4
4.4
.5
19.1
4.4
4.1
4.9
4.5
3.3
9.7
4.7
.5
19.4
4.7
3.9
5.2
4.3
.2
.6
.0
1.0
.4
.7
.0
.8
.3 r
.8
.0
1.1
,4 r
.7
.0
1.0
.3
.7
.0
.9
.3
.6
.0
.8
.4
.6
.0
.7
.4
.9
.0
.6
.4
,8 r
.0
.7
.4
.7
.0
.9
.2
.7
.0
.7
3.1
1.9
.6
.6
3.2
1.6
.6
.9
3.8
1.6
.5
1.6
3.2
1.3
.5
1.4
3.0
1.1
.5
1.5
2.7
.8
.5
1.4
2.3
.7
.4
1.2
1.8
.4
.3
1.0
3.4
.6
.4
2.3
4.2
1.0
.3
2.8
6.2
1.4
.3
4.5
56 Offshore banking centers
Bahamas
57
Bermuda
58
Cayman Islands and other British West Indies
59
Netherlands Antilles
60
Panama 6
61
Lebanon
62
Hong Kong
63
Singapore
64
Other'
65
58.1
6.9
6.2
21.5
1.1
1.9
.1
13.9
6.5
.0
73.0
10.9
8.9
18.0
2.6
2.4
.1
18.7
11.2
.1
78.5 r
13.7
8.8
17.8
3.4
2.0
.1
19.7
13.0
.0
80.5 r
13.3
6.5
23.8
2.5
2.0
.1
21.8
10.6
.0
77.r
13.8
6.0
21.5
1.7
1.8 r
.1
20.3
11.8
.0
71.3'
10.3
8.4
19.9
1.3
1.3
.1
19.9
10.1
.1
84.3 r
12.5
8.6
19.4
.9
1.1
.1
22.4 r
i9.r
.0
82.1
8.4
8.3
23.7
2.4
1.3
.1
23.1
14.8
.0
85.9 r
12.6
6.1
23.4
5.5
1.2 r
.1
23.7
13.3
.1
99.5 r
11.5 r
6.3
32.1
9.9
1.4
.1
25.1
13.1
.1
100.2
13.4
5.3
28.5
10.7
1.1
.1
25.6
15.4
.1
8
66 Miscellaneous and unallocated
39.7
43.4
55.9
69.6 r
65.7 r
66.6 r
82.2 r
72.3 r
63.9 r
57.4 r
62.5
1 Total
2 G - 1 0 countries and Switzerland
Belgium and L u x e m b o u r g
3
France
4
Germany
5
6
Italy
Netherlands
7
Sweden
8
9
Switzerland
United Kingdom
10
Canada
11
12
Japan
32
33
.34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
Latin
America
Argentina
Brazil
Chile
Colombia
Mexico
*
Other
Asia
China
People's Republic of China
Republic of China (Taiwan)
Korea (South)
Malaysia
Philippines
Thailand
Other Asia
Africa
Egypt
Morocco
Other Africa 3
52 Eastern Europe
Russia 4
53
Yugoslavia 5
54
Other
55
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.
2io.rr
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 Soviet Union.
5. As of December 1992, excludes Croatia, Bosnia and Hercegovinia, and Slovenia.
6. Includes Canal Zone.
7. Foreign branch claims only.
8. Includes New Zealand, Liberia, and international and regional organizations.
A58
International Statistics • August 1996
3.22
LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in
the United States
Millions of dollars, end of period
1994
Type of liability, and area or country
1992
1993
1995
1994
Sept.
Dec.
Mar.
June
Sept.
Dec. p
1 Total
45,511
50,597
54,309
57,630
54,309
50,187
49,973
47,673
46,494
2 Payable in dollars
3 Payable in foreign currencies
37,456
8,055
38,728
11,869
38,298
16,011
41,879
15,751
38,298
16,011
35,903
14,284
34,281
15,692
33,908
13,765
33,949
12,545
By type
4 Financial liabilities
Payable in dollars
6
Payable in foreign currencies
23,841
16,960
6,881
29,226
18,545
10,681
32,954
18,818
14,136
36,440
22,558
13,882
32,954
18,818
14,136
29,775
16,704
13,071
29,282
15,028
14,254
26,237
13,872
12,365
24,287
12,949
11,338
7 Commercial liabilities
8
Trade payables
9
Advance receipts and other liabilities
21,670
9,566
12,104
21,371
8,802
12,569
21,355
10,005
11,350
21,190
9,550
11,640
21,355
10,005
11,350
20,412
9,844
10,568
20,691
10,527
10,164
21,436
10,061
11,375
22,207
11,013
11,194
10
11
Payable in dollars
Payable in foreign currencies
20,496
1,174
20,183
1,188
19,480
1,875
19,321
1,869
19,480
1,875
19,199
1,213
19,253
1,438
20,036
1,400
21,000
1,207
12
13
14
(5
16
17
18
By area or country
Financial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
13,387
414
1,623
889
606
569
8,610
18,810
175
2,539
975
534
634
13,332
21,703
495
1,727
1,961
552
688
15,543
25,288
661
2,241
1,467
648
633
18,323
21,703
495
1,727
1,961
552
688
15,543
17,541
612
2,046
1,755
633
883
10,764
18,223
778
1,101
1,589
530
1,056
12,138
16,401
347
1,365
1,670
474
948
10,518
15,622
369
999
1,974
466
895
10,138
19
Canada
20
21
22
23
24
23
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
27
28
29
30
31
32
33
34
33
36
37
38
39
Japan
Middle Eastern oil-exporting countries'
Africa
Oil-exporting countries 2
All other 3
Commercial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
544
859
629
618
629
1,817
893
797
632
4,053
379
114
19
2,850
12
6
3,359
1,148
0
18
1,533
17
5
2,034
101
80
207
998
0
5
1,977
121
15
7
1,173
15
5
2,034
101
80
207
998
0
5
2,065
135
149
58
1,068
10
5
1,950
81
138
58
1,030
3
4
1,904
79
144
111
930
3
3
1,829
68
152
57
898
12
2
5,818
4,750
19
5,956
4,887
23
8,403
7,314
35
8,405
7,248
31
8,403
7,314
35
8,156
7,182
27
8,023
7,141
25
6,947
6,308
25
5,988
5,436
27
6
0
133
123
135
123
133
123
135
123
156
122
151
122
149
122
150
122
33
109
50
19
50
40
42
39
66
7,398
298
700
729
535
350
2,505
6,827
239
655
684
688
375
2,039
6,773
241
728
604
722
327
2,444
6,868
287
744
552
674
391
2,350
6,773
241
728
604
722
327
2,444
6,642
271
642
482
536
327
2,848
6,776
311
504
556
448
432
2,902
7,263
349
528
660
566
255
3,351
7,700
331
481
767
500
413
3,568
40
Canada
1,002
879
1,037
1,068
1,037
1,235
1,146
1,219
1,040
41
42
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,533
3
307
209
33
457
142
1,658
21
350
214
27
481
123
1,857
19
345
161
23
574
276
1,783
6
200
147
33
672
189
1,857
19
345
161
23
574
276
1,368
8
260
96
29
356
273
1,836
3
397
107
12
420
204
1,607
1
219
143
5
357
175
1,740
1
205
98
56
416
221
10,594
3,612
1,889
10,980
4,314
1,534
10,741
4,555
1,576
10,370
4,128
1,663
10,741
4,555
1,576
10,151
4,110
1,787
9,978
3,531
1,790
10,275
3,475
1,647
10,421
3,315
1,912
48
49
50
Japan
Middle Eastern oil-exporting countries'
51
32
Africa
Oil-exporting countries 2
568
309
453
167
428
256
468
264
428
256
463
248
481
252
589
241
619
254
53
Other 3
575
574
519
633
519
553
474
483
687
1. Comprises Bahrain, Iran, Iraq, Kuwait, O m a n , 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
1995
1994
Type of claim, and area or country
1992
1993
1994
Sept.
Dec.
Mar.
June
Sept.
Dec. p
1
45,073
49,159
57,888
54,833
57,888
52,218
58,051
53,424
52,483
2 Payable in dollars
3 Payable in foreign currencies
42,281
2,792
45,161
3,998
53,805
4,083
50,460
4,373
53,805
4,083
48,425
3,793
54,138
3,913
49,696
3,728
48,687
3,796
By type
4 Financial claims
Deposits
5
6
Payable in dollars
Payable in foreign currencies
7
8
Other financial claims
9
Payable in dollars
10
Payable in foreign currencies
26,509
17,695
16,872
823
8,814
7,890
924
27,771
15,717
15,182
535
12,054
10,862
1,192
33,897
18,507
18,026
481
15,390
14,306
1,084
32,236
19,118
18,502
616
13,118
11,903
1,215
33,897
18,507
18,026
481
15,390
14,306
1,084
29,606
17,115
16,458
657
12,491
11,275
1,216
34,574
22,046
21,351
695
12,528
11,370
1,158
29,891
17,974
17,393
581
11,917
10,689
1,228
27,398
15,133
14,654
479
12,265
10,976
1,289
11 Commercial claims
12
Trade receivables
Advance payments and other claims
13
18,564
16,007
2,557
21,388
18,425
2,963
23,991
21,158
2,833
22,597
19,825
2,772
23,991
21,158
2,833
22,612
20,415
2,197
23,477
21,326
2,151
23,533
21,409
2,124
25,085
22,973
2,112
14
15
Payable in dollars
Payable in foreign currencies
17,519
1,045
19,117
2,271
21,473
2,518
20,055
2,542
21,473
2,518
20,692
1,920
21,417
2,060
21,614
1,919
23,057
2,028
16
17
18
19
20
21
22
By area or country
Financial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
9,331
8
764
326
515
490
6,252
7,299
134
826
526
502
530
3,585
7,936
86
800
540
429
523
4,649
8,914
115
931
413
503
777
5,023
7,936
86
800
540
429
523
4,649
7,630
146
808
527
606
490
4,040
7,927
155
730
356
601
514
4,790
7,840
160
753
301
522
530
4,924
7,609
193
803
436
517
498
4,303
23
Canada
24
25
26
27
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
Africa
Oil-exporting countries 2
36
37
38
39
40
41
42
43
All other 3
Commercial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
1,833
2,032
3,581
3,812
3,581
3,848
3,705
3,526
2,851
13,893
778
40
686
11,747
445
29
16,224
1,336
125
654
12,699
872
161
19,536
2,424
27
520
15,228
723
35
16,608
1,121
52
411
13,694
691
31
19,536
2,424
27
520
15,228
723
35
16,109
940
37
528
13,531
583
27
21,159
2,355
85
502
17,013
635
27
15,345
1,552
35
851
11,816
487
50
14,500
1,965
81
830
10,393
554
32
864
668
3
1,657
892
3
1,871
953
141
2,176
661
19
1,871
953
141
1,504
621
4
1,235
471
3
2,160
1,404
4
1,579
871
3
83
9
99
1
373
0
197
0
373
0
141
9
138
9
188
6
276
5
505
460
600
529
600
374
410
832
583
8,451
189
1,537
933
552
362
2,094
9,105
184
1,947
1,018
423
432
2,377
9,540
213
1,881
1,027
311
557
2,556
8,810
178
1,766
883
331
538
2,505
9,540
213
1,881
1,027
311
557
2,556
8,947
199
1,790
977
324
556
2,388
9,200
218
1,669
1,023
341
612
2,469
8,862
224
1,706
997
338
438
2,479
9,822
231
1,830
1,070
452
520
2,655
44
Canada
1,286
1,781
1,988
1,906
1,988
2,010
2,003
1,971
1,950
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
3,043
28
255
357
40
924
345
3,274
11
182
460
71
990
293
4,117
9
234
612
83
1,243
348
3,963
34
246
471
49
1,137
388
4,117
9
234
612
83
1,243
348
4,140
17
208
695
55
1,106
295
4,370
21
210
777
83
1,109
319
4,359
26
245
745
66
1,026
325
4,348
30
272
897
79
985
285
52
53
54
Asia
Japan
Middle Eastern oil-exporting countries'
4,866
1,903
693
6,014
2,275
704
6,982
2,655
708
6,679
2,591
617
6,982
2,655
708
6,200
1,911
689
6,516
2,011
707
6,826
1,998
775
7,307
1,868
974
55
56
Africa
Oil-exporting countries 2
554
78
493
72
454
67
447
61
454
67
468
71
478
60
544
74
654
87
57
Other 3
364
721
910
792
910
847
910
971
1,004
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
3.24
International Statistics • August 1996
FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
1996
Transaction, and area or country
1994
1995
1996
1995
Jan.Apr.
»
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr. p
U.S. corporate securities
STOCKS
1 Foreign purchases
2 Foreign sales
350,593
348,716
462,884
451,709
204,159
196,253
41,492
42,860
41,937
39,071
46,479
44,372
43,574
41,948
52,260 r
51,083 r
55,280
54,450
53,045
48,772
1,877
11,175
7,906
-1,368
2,866
2,107
1,626
l,177r
830
4,273
1,867
11,380
7,934
-1,328
2,877
2,109
1,623
l,306r
876
4,129
6,714
-201
2,110
2,251
-30
840
-1,160
-2,111
-1,142
-1,234
1,162
29
771
4,847
-1,099
-1,837
3,507
-2,283
8,001
-1,517
5,814
-337
2,503
-2,725
2
68
3,687
328
462
1,125
1,381
-284
1,125
2,697
-831
1,185
660
-69
140
1,647
-54
5
528
449
878
-74
-2,920
-8
61
56
-17
-17
954
-58
-131
230
227
543
405
1,361
-63
342
-406
-26
-96
1,028
-382
-11
373
191
1,277
-175
219
148
883
1,231
-1
7
1,954
164
239
660
639
-165
645
-487
-507
-40
94
6
52
-1,072
-161
-37
20
-441
-223
518
2,694 r
-285
-336
-131
-62
-151
1,376
661
86
208
566
-242
-90
-318
-33
-291
-749
-44
276
1,429
-336
174
237
617
346
52
808
-6
1,852
1,446
31
-37
10
-205
-28
-40
-11
-2
3
-129
-46
144
289,586
229,665
293,030
206,951
122,765
85,140
26,424
19,199
31,642
20,741
21,698
21,117
26,591
17,726
32,759
23,608
39,308
25,113
24,107
18,693
21 Net p u r c h a s e s , o r sales ( - )
59,921
86,079
37,625
7,225
10,901
581
8,865
9,151
14,195
5,414
22 F o r e i g n c o u n t r i e s
59,036
86,533
37,543
7,293
10,948
553
8,823
9,230
14,107
5,383
23 Europe
24
France
25
Germany
Netherlands
26
Switzerland
28
United Kingdom
29 Canada
30 Latin America and Caribbean
31 Middle East 1
3 2 Other Asia
Japan
33
34 Africa
35 Other countries
37,065
242
657
3,322
1,055
31,642
2,958
5,442
771
12,153
5,486
-7
654
69,815
1,143
5,806
1,463
494
57,220
2,569
6,141
1,869
5,659
2,250
234
246
24,515
2,608
3,021
403
-212
16,643
847
8,556
-393
4,349
1,045
30
-361
6,418
732
113
204
148
4,599
139
-61
-246
1,126
645
-223
140
9,759
101
894
219
101
6,999
20
1,426
188
-705
-899
240
20
1,309
137
236
101
-381
925
181
-848
187
-293
-904
86
-69
5,624
839
-26
156
56
3,854
104
2,096
-194
1,272
338
-16
-63
8,968
314
1,859
365
-86
6,280
235
-713
-334
1,161
336
-40
-47
5,976
670
467
-66
-38
4,245
149
7,140
13
831
245
37
-39
3,947
785
721
-52
-144
2,264
359
33
122
1,085
126
49
-212
885
-454
82
-68
-47
28
42
-79
88
31
3
Net p u r c h a s e s , o r sales ( - )
4 Foreign countries
5 Europe
6
France
Germany
7
Netherlands
8
9
Switzerland
10
United Kingdom
11 Canada
12 Latin America and Caribbean
13 Middle East 1
14 Other Asia
15
Japan
16 Africa
1 7 Other countries
18 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 organizations
BONDS2
19 Foreign purchases
20 Foreign sales
21
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 organizations
Foreign securities
37 Stocks, net purchases, or sales ( - )
38
Foreign purchases
39
Foreign sales
4 0 Bonds, net purchases, or sales ( - )
41
Foreign purchases
42
Foreign sales
4 3 N e t p u r c h a s e s , o r sales (—), of s t o c k s a n d b o n d s
-48,071
386,106
434,177
-9,224
848,368
857,592
....
-50,786
345,498
396,284
-47,159
889,143
936,302
-29,115
144,801
173,916
-11,779
354,041
365,820
-5,769
29,382
35,151
-7,580
76,889
84,469
-1,725
30,307
32,032
-6,235
78,563
84,798
-6,830
32,366
39,196
-3,923
80,310
84,233
-6,432
33,481
39,913
-4,472
84,508
88,980
-5,704r
37.457 r
43,161 r
-1,304
95,095
96,399
-10,341
36,117
46,458
-6,115
93,239
99,354
-6,638
37,746
44,384
112
81,199
81,087
-57,295
-97,945
-40,894
-13,349
-7,960
-10,753
-10,904
-7,008r
-16,456
-6,526
44 F o r e i g n c o u n t r i e s
-57,815
-97,140
-40,747
-13,240
-7,882
-10,812
-10,935
—6,883 r
-16,460
-6,469
45 Europe
4 6 Canada
47 Latin America and Caribbean
48
49
Japan
5 0 Africa
51 Other countries
-3,516
-7,475
-18,334
-24,275
-17,427
-467
-3,748
-47,905
-7,871
-7,071
-34,049
-25,070
-327
83
-12,817
-3,957
-4,714
-16,990
-9,194
-707
-1,562
-7,249
1,311
-3,883
-2,511
-849
5
-913
-4,609
-494
-184
-2,001
-1,388
19
-613
-6,033
-14
-802
-4,389
-3,685
-44
470
-3,973
-2,649
-3
-4,685
-3,427
-96
471
—2,451 r
-59r
— 1,03 l r
—2,557
— 1,592
-161
-624r
-4,584
-1,863
-2,582
-5,755
-3,225
-436
-1,240
-1,809
614
-1,098
-3,993
-950
-14
-169
520
-805
-147
-109
-78
59
31
4
-57
52 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 organizations
1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar,
Saudi Arabia, and United Arab Emirates (Trucial States).
-125
2. Includes state and local government securities and securities of U.S. government
agencies and corporations. Also includes issues of new debt securities sold abroad by U.S.
corporations organized to finance direct investments abroad.
Securities Holdings and Transactions/Interest and Exchange Rates
3.25
MARKETABLE U.S. TREASURY BONDS AND NOTES
A61
Foreign Transactions'
Millions of dollars; net purchases, or sales (—) during period
1996
1995
1996
1994
Area or country
1995
Jan.Apr.
Nov.
Oct.
Dec.
Feb.
Jan.
Mar.
Apr. p
1 Total e s t i m a t e d
78,801
133,991
52,965
4,819
15,307
-9,454
14,008
15,451
7,017
16,489
2 Foreign countries
78,637
133,552
54,165
4,650
14,936
-9,016
13,703
16,192
6,406
17,864
38,542
1,098
5,709
1,254
794
481
23,365
5,841
3,491
50,000
591
6,136
1,891
358
-472
34,778
6,718
252
29,277
509
6,005
-2,573
1,416
1,554
11,140
11,226
5,531
-4,608
-25
2,831
160
92
174
-5,965
-1,875
-1,864
821
81
52
833
-30
-568
1,309
-856
-43
-1,120
171
452
381
-285
-664
-4,377
3,202
208
7,281
149
1,385
807
-45
76
1,167
3,742
1,867
8,462
-120
1,829
354
803
84
1,644
3,868
1,863
4,075
81
958
-1,597
372
65
2,262
1,934
35
9,459
399
1,833
-2,137
286
1,329
6,067
1,682
1,766
-10,383
-319
-20,493
10,429
47,317
29,793
240
-570
48,609
-2
25,152
23,459
32,319
16,863
1,464
908
-8,580
-275
8,186
-16,491
26,955
10,513
976
6
17,453
-92
3,033
14,512
-6,879
-10,115
501
47
13,496
232
3,723
9,541
-107
1,316
458
311
3,762
61
4,710
-1,009
-11,843
-5,695
252
-275
-2,648
-142
8,922
-11,428
6,920
2.619
515
-232
-2,931
-93
-1,896
-942
8,616
3,069
-100
282
-4,985
-44
-2,696
-2,245
6,941
2,443
311
29
1,984
4
3,856
-1,876
4,478
2,382
250
-73
164
526
-154
439
9
261
-1,200
135
-1,295
169
2
185
371
368
-43
-438
-347
-115
305
210
-45
-741
-308
-254
611
647
12
-1,375
-414
-1,008
78,637
41,822
36,815
133,552
39,625
93,927
54,165
34,297
19,868
4,650
5,705
-1,055
14,936
-915
15,851
-9,016
2,651
-11,667
13,703
12,615
1,088
16,192
8,681
7,511
6,406
4,748
1,658
17,864
8,253
9,611
-38
0
3,075
2
1,454
1
-624
0
-826
0
-1,085
0
-658
0
122
1
1,127
0
863
0
3
4
5
6
7
8
9
10
11
Europe
Belgium and Luxembourg
Germany
Netherlands
Sweden
Switzerland
United Kingdom
Other Europe and former U.S.S.R
Canada
1?
13
14
15
16
17
18
19
Latin America and Caribbean
Venezuela
Other Latin America and Caribbean
Netherlands Antilles
Japan
Africa
Other
20 Nonmonetary international and regional organizations
International
?1
22
Latin American regional
MEMO
23 Foreign countries
74
Official institutions
Other foreign
25
Oil-exporting
countries
?6 Middle East"
27
1. Official and private transactions in marketable U.S. Treasury securities having an
original maturity of more than one year. Data are based on monthly transactions reports.
Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign
countries.
3.26
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
DISCOUNT RATES OF FOREIGN CENTRAL BANKS'
Percent per year, averages of daily figures
Rate on June 30, 1996
Rate on June 30, 1996
Country
Country
Month
effective
Apr.
Apr.
Apr.
Apr.
June
2.5
2.5
5.0
3.25
3.6
Austria..
Belgium. .
Canada. .
Denmark
France 2 . ,
1996
1995
1996
1996
1996
1. Rates shown are mainly those at which the central bank either discounts or makes
advances against eligible commercial paper or government securities for commercial banks or
brokers. For countries with more than one rate applicable to such discounts or advances, the
rate shown is the one at which it is understood that the central bank transacts the largest
proportion of its credit operations.
3.27
2.5
9.0
.5
2.5
1.5
Germany . . .
Italy
Japan
Netherlands .
Switzerland .
2. Since February 1981, the rate has been that at which the Bank of France discounts
Treasury bills for seven to ten days.
FOREIGN SHORT-TERM INTEREST RATES'
Percent per year, averages of daily figures
1995
Type or country
1
2
3
4
5
6
7
8
9
10
Eurodollars
United Kingdom
Canada
Germany
Switzerland
Netherlands
France
Italy
Belgium
Japan
1993
3.18
5.88
5.14
7.17
4.79
6.73
8.30
10.09
8.10
2.96
1994
4.63
5.45
5.57
5.25
4.03
5.09
5.72
8.45
5.65
2.24
5.93
6.63
7.14
4.43
2.94
4.30
6.43
10.43
4.73
1.20
1. Rates are for three-month interbank loans, with the following exceptions: Canada,
finance company paper; Belgium, three-month Treasury bills; and Japan, C D rate.
1996
1995
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
5.64
6.42
5.91
3.82
1.94
3.58
5.47
10.58
3.74
.52
5.40
6.31
5.58
3.51
1.65
3.20
4.56
10.05
3.47
.55
5.14
6.13
5.22
3.26
1.61
3.00
4.29
9.90
3.23
.61
5.28
6.02
5.23
3.25
1.68
3.09
4.14
9.82
3.25
.60
5.36
5.97
5.03
3.22
1.68
2.83
3.87
9.60
3.23
.61
5.36
6.03
4.82
3.19
1.99
2.61
3.78
8.88
3.19
.62
5.46
5.80
4.87
3.29
2.53
2.81
3.84
8.73
3.23
.57
A62
3.28
International Statistics • August 1996
FOREIGN EXCHANGE RATES'
Currency units per dollar except as noted
1996
Country/currency unit
1
2
3
4
5
6
7
8
9
10
Australia/dollar*
Austria/schilling
Belgium/franc
Canada/dollar
China, P.R./yuan
Denmark/krone
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
11
12
13
14
15
16
17
18
19
20
Hong Kong/dollar
India/rupee
Ireland/pound 2
Italy/lira
Japan/yen
Malaysia/ringgit
Netherlands/guilder
N e w Zealand/dollar 2
Norway/krone
Portugal/escudo
21
22
23
24
25
26
27
28
29
30
Singapore/dollar
South Africa/rand
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
United Kingdom/pound 2
1993
1994
1995
Jan.
Feb.
Mar.
Apr.
May
June
67.993
11.639
34.581
1.2902
5.7795
6.4863
5.7251
5.6669
1.6545
229.64
73.161
11.409
33.426
1.3664
8.6404
6.3561
5.2340
5.5459
1.6216
242.50
74.073
10.076
29.472
1.3725
8.3700
5.5999
4.3763
4.9864
1.4321
231.68
74.171
10.296
30.081
1.3669
8.3384
5.6618
4.4510
5.0117
1.4635
240.91
75.557
10.321
30.115
1.3752
8.3338
5.6749
4.5532
5.0440
1.4669
242.21
77.136
10.391
30.371
1.3656
8.3495
5.7074
4.6066
5.0583
1.4776
241.54
78.566
10.580
30.902
1.3592
8.3583
5.9414
4.7288
5.1049
1.5048
242.00
79.700
10.782
31.502
1.3693
8.3479
5.9160
4.7541
5.1855
1.5324
243.27
79.122
10.755
31.433
1.3658
8.3424
5.8941
4.6710
5.1787
1.5282
241.75
7.7357
31.291
146.47
1,573.41
111.08
2.5738
1.8585
54.127
7.1009
161.08
7.7290
31.394
149.69
1,611.49
102.18
2.6237
1.8190
59.358
7.0553
165.93
7.7357
32.418
160.35
1.629.45
93.96
2.5073
1.6044
65.625
6.3355
149.88
7.7329
35.812
158.18
1,584.87
105.75
2.5563
1.6388
66.195
6.4275
151.90
7.7323
36.595
158.10
1,570.00
105.79
2.5487
1.6424
67.495
6.4103
152.49
7.7325
34.485
157.21
1,562.43
105.94
2.5417
1.6540
68.079
6.4277
152.93
7.7345
34.320
156.51
1,565.60
107.20
2.5113
1.6805
68.242
6.4901
154.51
7.7363
35.025
156.29
1,556.71
106.34
2.4936
1.7135
68.571
6.5748
157.54
7.7404
35.100
158.31
1,542.30
108.96
2.4967
1.7120
67.650
6.5376
157.40
1.6158
3.2729
805.75
127.48
48.211
7.7956
1.4781
26.416
25.333
150.16
1.5275
3.5526
806.93
133.88
49.170
7.7161
1.3667
26.465
25.161
153.19
1.4171
3.6286
772.82
124.64
51.047
7.1406
1.1812
26.495
24.921
157.85
1.4211
3.6413
787.13
123.38
53.874
6.7405
1.1818
27.406
25.298
152.88
1.4115
3.7420
780.12
123.65
53.716
6.8775
1.1967
27.485
25.250
153.60
1.4095
3.9293
781.31
124.39
53.748
6.7318
1.1959
27.400
25.251
152.71
1.4082
4.2130
780.42
125.49
54.163
6.7141
1.2180
27.188
25.290
151.60
1.4074
4.3679
780.86
127.97
54.868
6.7984
1.2539
27.352
25.289
151.52
1.4090
4.3519
798.45
128.87
55.529
6.6807
1.2579
27.674
25.354
154.16
84.25
86.23
86.41
86.57
87.46
88.28
88.16
MEMO
31 United States/dollar 3
93.18
91.32
1. Averages of certified noon buying rates in New York for cable transfers. Data in this
table also appear in the Board's G.5 (405) monthly statistical release. For ordering address,
see inside front cover.
2. Value in U.S. cents.
3. Index of weighted-average exchange value of U.S. dollar against the currencies of ten
industrial countries. The weight for each of the ten countries is the 1972-76 average world
trade of that country divided by the average world trade of all ten countries combined. Series
revised as of August 1978 (see Federal Reserve Bulletin, vol. 64 (August 1978), p. 700).
63
Guide to Statistical Releases and Special Tables
STATISTICAL RELEASES—List Published
Semiannually,
with Latest Bulletin
Reference
Issue
Anticipated schedule of release dates for periodic releases
SPECIAL TABLES—Data Published
Irregularly,
June 1996
with Latest Bulletin
Reference
Title and Date
Assets and liabilities
Issue
of commercial
of U.S. branches and agencies
of foreign
Pro forma balance sheet and income statements for priced service
of life insurance
lending reported
November
February
May
August
1995
1996
1996
1996
A68
A68
A68
A64
October
November
February
May
1995
1995
1996
1996
A68
A72
A72
A72
August
October
January
July
1995
1995
1996
1996
A76
A72
A68
A64
December
May
August
March
1991
1992
1992
1993
A79
A81
A83
A71
September 1995
A68
companies
June 30, 1991
September 30, 1991
December 31, 1991
September 30, 1992
1994
A70
A70
A70
A68
operations
March 31, 1995
June 30, 1995
September 30, 1995
March 31, 1996
Residential
1993
1993
1994
1994
banks
March 31, 1995
June 30, 1995
September 30, 1995
December 31, 1995
Assets and liabilities
August
November
February
May
banks
August 1995
November 1995
February 1996
May 1996
Assets and liabilities
Page
banks
March 31, 1993
June 30, 1993
September 30, 1993
December 31, 1993
Terms of lending at commercial
Page
A72
under the Home Mortgage
Disclosure
Act
A64
4.23
Special Tables • August 1996
TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 6-10, 19961
Commercial and industrial loans
Type and maturity
of loan
Amount of
loans
(thousands of
dollars)
size
(thousands of
dollars)
Weighted
average
maturity 2
Days
Loan rate (percent)
Loans
secured
by
collateral
(percent)
Loans made
under
commitment
(percent)
6.37
6.18
7.06
15.1
9.0
37.4
82.4
79.0
94.8
12.1
7.53
6.85
8.12
48.6
38.7
57.2
86.7
87.1
86.3
6.9
10.4
3.8
7.24
5.94
7.85
47.4
18.3
61.0
56.9
33.9
67.7
4.8
9.1
2.9
Weighted
average
effective 3
Participation loans
(percent)
ALL BANKS
1 Overnight 6
8,721
2 One month or less (excluding overnight)
Fixed rate
3
4
Floating rate
11,628,749
9,131,845
2,496,904
1,031
3,109
299
5 More than one month and less than one
year
6
Fixed rate
7
Floating rate
13,696,214
6,405,619
7,290,596
191
263
154
8 Demand 7
9
Fixed rate
10
Floating rate
14,525,096
4,619,674
9,905,422
350
1,237
263
11 Total s h o r t - t e r m
56,742,099
449
6.76
30.7
70.5
12 Fixed rate (thousands of dollars)
13
1-99
14
100-499
15
500-999
16
1,000-4,999
17
5,000-9,999
18
10,000 or more
37,021,716
363,323
467,930
659,429
4,338,235
4,192,103
27,000,695
1,122
14
197
685
2,236
6,644
21,730
22
138
99
65
42
38
13
6.17
9.54
8.31
7.34
6.71
6.55
5.92
16.9
82.3
68.9
55.1
29.8
28.7
10.3
66.4
51.7
69.4
80.3
73.6
62.8
7.9
6.6
8.3
4.6
19 Floating rate (thousands of dollars)
20
1-99
21
100-499
500-999
22
23
1,000-4,999
24
5,000-9,999
25
10,000 or more
19,720,383
1,788,525
3,401,205
1,538,485
4,247,062
1,991,186
6,753,920
211
25
200
655
2,106
6,647
24,059
117
173
7.85
9.64
9.10
8.69
7.88
7.08
6.75
56.5
81.1
76.4
71.2
53.3
43.4
42.4
78.0
88.2
90.1
89.9
84.2
83.4
61.1
4.4
1.4
4.9
6.6
5.1
6.7
3.2
125
95
151
166
165
114
97
64
81.1
5.7
4.0
6.1
26 Total long-term
9,793,519
300
7.96
56.5
72.7
27 Fixed rate (thousands of dollars) . .
28
1-99
29
100-499
30
500-999
31
1,000 or more
2,323,557
239,945
383,381
177,088
1,523,143
173
22
206
665
4,037
7.91
9.68
8.85
7.97
7.39
57.2
93.5
84.9
55.0
44.8
64.4
32.4
34.5
49.8
78.6
15.6
4.7
8.9
15.4
19.1
32 Floating rate (thousands of dollars)
33
1-99
34
100-499
35
500-999
36
1,000 or more
7,469,963
327,790
1,098,232
627,999
5,415,941
389
28
208
655
4,935
7.97
9.62
8.99
8.63
7.59
56.3
85.8
81.3
71.8
47.7
75.4
74.0
88.3
88.5
71.3
6.5
3.2
7.1
11.6
6.0
Loan rate (percent)
Days
LOANS M A D E BELOW
Effective
Nominal
PRIME1"
6
37 Overnight
38 One month or less (excluding overnight)
39 More than one month and less than one
year
40 Demand 7
16,528,837
10,761,821
11,037
3,797
5.91
6.12
5.74
5.95
10.9
10.1
60.0
82.0
3.1
5.8
8,812,694
8,625,015
691
2,267
6.52
5.99
6.34
5.88
34.0
33.2
88.9
37.5
8.9
5.2
41 Total s h o r t - t e r m
44,728,367
2,141
42 Fixed rate
43 Floating rate
35,423,032
9,305,335
3,465
873
6.02
6.38
5.86
6.20
14.0
40.7
65.9
69.4
5.4
5.0
44 Total long-term
4,937,917
824
45 Fixed rate
46 Floating rate . . .
1,382,264
3,555,652
507
6.63
6.69
6.46
6.52
34.9
38.6
67.9
60.6
20.6
1.7
Footnotes appear at the end of the table.
Financial
4.23
Markets
TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 6-10, 1996'—Continued
Commercial and industrial loans—Continued
Type and maturity
of loan
Amount of
loans
(thousands of
dollars)
Average size
(thousands of
dollars)
Weighted
average
maturity 2
Days
LARGE
Loan rate (percent)
Loans
secured
by
collateral
(percent)
Loans made
under
commitment
(percent)
Participation loans
(percent)
6.27
6.18
6.63
13.2
9.3
29.6
86.6
84.1
97.1
5.9
3.8
14.7
7.19
6.82
7.63
42.0
36.2
49.0
91.6
90.5
92.8
7.8
11.4
3.6
Weighted
average
effective 3
Standard
BANKS
1 Overnight 6
12,857,346
11,265
2 One month or less (excluding overnight)
Fixed rate
3
4
Floating rate
9,097,408
7,357,538
1,739,870
2,592
7,053
705
5 More than one month and less than one
year
6
Fixed rate
7
Floating rate
8,443,491
4,598,409
3,845,082
765
2,507
418
8 Demand 7
Fixed rate
9
10
Floating rate
11,627,780
4,368,228
7,259,552
561
3,095
376
6.93
5.85
7.58
40.8
15.9
55.8
48.4
31.4
58.7
5.1
9.6
2.5
11 Total s h o r t - t e r m
42,026,025
1,155
6.54
25.9
70.9
5.2
5.5
2.2
10.8
6.8
6.8
5.0
4.4
1.1
3.8
5.9
5.9
7.8
3.4
76
124
12 Fixed rate (thousands of dollars)
13
1-99
14
100-499
15
500-999
16
1,000-4,999
17
5,000-9,999
18
10,000 or more
29,159,556
43,684
171,520
348,287
2,965,152
3,503,268
22,127,646
5,373
33
230
695
2,274
6,735
21,688
18
94
70
53
38
32
12
6.13
8.32
7.63
7.25
6.77
6.54
5.95
15.1
72.9
68.5
49.5
31.9
26.4
10.0
69.5
73.1
88.4
81.9
80.4
74.7
66.9
19 Floating rate (thousands of dollars)
20
1-99
21
100-499
22
500-999
23
1,000-4,999
24
5,000-9,999
25
10,000 or more
12,866,469
651,580
1,640,954
833,081
2,498,922
1,445,855
5,796,077
415
32
203
668
2,137
6,787
27,524
90
161
146
150
101
81
55
7.47
9.48
9.01
8.55
7.52
7.00
6.74
50.2
76.4
73.3
65.4
47.6
41.6
41.7
74.1
86.7
90.1
90.8
82.9
81.0
60.3
26 Total long-term
5,444,213
769
7.86
55.7
88.8
11.8
27 Fixed rate (thousands of d o l l a r s ) . .
28
1-99
29
100-499
30
500-999
31
1,000 or more
1,016,549
16,917
65,170
86,571
847,891
906
31
228
685
5,040
6.89
8.83
8.38
7.86
6.64
38.6
79.0
73.3
69.1
32.0
81.4
59.7
71.1
81.2
82.6
29.0
1.0
10.5
29.1
31.0
32 Floating rate (thousands of dollars)
33
1-99
34
100-499
35
500-999
36
1,000 or more
4,427,664
91,502
530,070
394,793
3,411,299
743
41
220
675
4,578
8.59
7.87
59.6
74.8
72.1
61.1
57.1
90.5
88.9
95.3
93.1
89.6
7.8
5.8
6.7
7.9
8.1
8.6
Loan rate (percent)
Days
LOANS M A D E BELOW
Effective'
Nominal
PRIME10
12,638,649
8,714,304
12,557
6,756
5.90
6.13
5.73
5.95
9.4
10.7
66.2
86.2
3.0
5.8
6,372,214
7,850,723
2,913
3,361
6.54
5.96
6.35
5.85
31.4
32.0
91.0
31.8
9.1
5.5
41 Total s h o r t - t e r m
35,575,891
5,217
6.08
42 Fixed rate
43 Floating rate
28,240,286
7,335,604
7,396
2,444
6,03
6,30
68.8
64.6
5.5
4.7
37 Overnight 6
38 One month or less (excluding overnight)
39 More than one month and less than one
year
40 D e m a n d '
44 Total long-term
2,689,074
2,236
45 Fixed rate
46 Floating rate . . .
786,859
1,902,215
1,871
2,431
Footnotes appear at the end of the table.
18.7
5.87
6.13
13.0
40.6
82.4
6.44
42
6.24
6.77
6.10
6.57
30.1
52.9
80.2
83.4
32.0
2.7
A65
A66
4.23
Special Tables • August 1996
TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 6-10, 1996'—Continued
Commercial and industrial loans—Continued
Type and maturity
of loan
Amount of
loans
(thousands of
dollars)
Average size
(thousands of
dollars)
Weighted
average
maturity 2
Days
OTHER
Loan rate (percent)
Loans
secured
by
collateral
(percent)
Loans made
under
commitment
(percent)
6.74
6.18
8.04
22.1
7.9
55.4
67.2
57.7
89.5
5.1
4.6
8.07
6.94
8.66
59.1
45.3
66.3
78.8
78.2
79.1
5.3
7.8
4.0
8.48
7.44
8.58
73.7
60.1
75.0
91.1
77.4
92.4
3.6
.2
3.9
Weighted
average
effective 3
Participation loans
(percent)
BANKS
1 Overnight 6
4,034,693
5,072
2 One month or less (excluding overnight)
3
Fixed rate
4
Floating rate
2,531,341
1,774,307
757,033
326
937
129
5 More than one month and less than one
year
6
Fixed rate
7
Floating rate
5,252,723
1,807,209
3,445,514
8 Demand 7
9
Fixed rate
10
Floating rate
2,897,316
251,446
2,645,870
11 Total s h o r t - t e r m
167
141
181
140
108
144
6.1
14,716,073
164
7.37
44.4
69.1
4.4
12 Fixed rate (thousands of dollars)
13
1-99
14
100-499
15
500-999
16
1,000-4,999
17
5,000-9,999
18
10,000 or more
7,862,159
319,639
296,410
311,143
1,373,083
688,835
4,873,049
285
13
182
675
2,156
6,217
21,925
37
141
115
76
50
61
18
6.33
9.70
8.70
7.44
6.60
6.61
5.78
23.5
83.6
69.1
61.4
25.2
40.1
4.5
11.6
55.0
48.8
58.4
78.4
82.5
68.1
44.1
4.6
4.7
6.2
15.8
2.7
19 Floating rate (thousands of dollars)
20
1-99
21
100-499
22
500-999
23
1,000-4,999
24
5,000-9,999
25
10,000 or more
6,853,914
1,136,945
1,760,251
705,404
1,748,140
545,331
957,843
110
22
197
641
2,064
6,303
13,655
152
176
177
179
131
139
8.56
9.73
9.19
8.85
8.39
7.30
6.82
68.4
83.8
79.4
78.1
61.4
48.3
46.9
85.4
89.1
90.0
88.8
86.0
89.9
66.1
4.2
1.6
5.9
7.4
4.1
3.8
2.4
.6
26 Total long-term
4,349,306
170
8.08
57.6
52.6
27 Fixed rate (thousands of dollars) . .
28
1-99
29
100-499
30
500-999
31
1,000 or more
1,307,008
223,028
318,211
90,518
675,252
106
22
201
647
3,230
8.70
9.75
8.95
8.08
8.33
71.7
94.6
87.3
41.4
60.9
51.2
30.4
27.1
19.7
73.6
5.2
5.0
8.6
2.3
4.2
32 Floating rate (thousands of dollars)
33
1-99
34
100-499
35
500-999
36
1,000 or more
3,042,299
236,288
568,162
233.206
2,004,643
230
24
198
624
5,690
7.81
9.74
9.09
51.5
90.0
89.9
89.8
31.6
53.2
68.3
81.8
80.7
40.2
4.6
2.2
7.4
17.8
2.5
Loan rate (percent)
Days
Effective3
LOANS M A D E BELOW
PRIME10
6
37 Overnight
38 One month or less (excluding overnight)
39 More than one month and less than one
year
40 Demand 7
3,890,187
2,047,517
7,922
1,326
2,440,480
774,292
231
527
41 Total s h o r t - t e r m
9,152,476
42 Fixed rate
43 Floating rate
7,182.746
1,969,730
44 Total long-term
2,248,842
45 Fixed rate
46 Floating rate . . .
595,405
1,653.437
Footnotes appear at the end of the table.
Nominal 8
12
139
5.94
6.10
5.77
5.92
15.7
7.5
39.9
63.9
3.4
5.7
6.48
6.31
6.30
6.14
40.6
45.3
83.5
94.8
8.4
54.6
87.0
4.9
6.3
51.7
34.3
5.5
.5
2.8
5.98
1,121
257
31
112
6.01
6.67
5.84
6.48
18.0
41.2
7.14
6.60
6.94
6.45
41.2
22.2
27.2
258
666
Financial Markets
4.23
A67
TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 6-10, 1996'—Continued
NOTES
1. The survey of terms of bank lending to business collects data on gross loan extensions
made during the first full business week in the mid-month of each quarter by a sample of 340
commercial banks of all sizes. A sample of 250 banks reports loans to farmers. The sample
data are blown up to estimate the lending terms at all insured commercial banks during that
week. The estimated terms of bank lending are not intended for use in collecting the terms of
loans extended over the entire quarter or residing in the portfolios of those banks. Construction and land development loans include both unsecured loans and loans secured by real
estate. Thus, some of the construction and land development loans would be reported on the
statement of condition as real estate loans and the remainder as business loans. Mortgage
loans, purchased loans, foreign loans, and loans of less that $1,000 are excluded f r o m the
survey. As of September 30, 1990 assets of most of the large banks were at least $7.0 billion.
For all insured banks, total assets averaged $275 million.
2. Average maturities are weighted by loan size; excludes demand loans.
3. Effective (compounded) annual interest rate calculated from the stated rate and other
terms of the loans and weighted by loan size.
4. The chances are about two out of three that the average rate shown would differ by less
than the amount of the standard error f r o m the average rate that would be found by a complete
survey of lending at all banks.
5. The rate used to price the largest dollar volume of loans. Base pricing rates include the
prime rate (sometimes referred to as a b a n k ' s " b a s i c " or " r e f e r e n c e " rate); the federal
funds
rate; domestic money market rates other than the federal funds rate; foreign money market
rates; and other base rates not included in the foregoing classifications.
6. Overnight loans mature on the following business day.
7. Demand loans have no stated date of maturity.
8. Nominal (not compounded) annual interest rate calculated f r o m the stated rate and other
terms of the loans and weighted by loan size.
9. Calculated by weighting the prime rate reported by each bank by the volume of loans
reported by that bank, summing the results, and then averaging over all reporting banks.
10. The proportion of loans made at rates below the prime may vary substantially from the
proportion of such loans outstanding in banks' portfolios.
68
Index to Statistical Tables
References are to pages A3-A67 although the prefix "A" is omitted in this index
ACCEPTANCES, bankers (See Bankers acceptances)
Agricultural loans, commercial banks, 19, 20
Assets and liabilities (See also Foreigners)
Banks, by classes, 17—21
Domestic finance companies, 33
Federal Reserve Banks, 10
Financial institutions, 25
Foreign banks, U.S. branches and agencies, 21
Automobiles
Consumer installment credit, 36
Production, 44, 45
Deposits (See also specific types)
BANKERS acceptances, 10, 11, 19-22, 23
Bankers balances, 17-21. (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 31
Rates, 23
Branch banks, 21
Business activity, nonfinancial, 42
Business loans (See Commercial and industrial loans)
FARM mortgage loans, 35
Federal agency obligations, 5, 9, 10, 11, 28, 29
Federal credit agencies, 30
Federal finance
Debt subject to statutory limitation, and types and ownership
of gross debt, 27
Receipts and outlays, 25, 26
Treasury financing of surplus, or deficit, 25
Treasury operating balance, 25
Federal Financing Bank, 30
Federal funds, 6, 19, 20, 21, 23, 25
Federal Home Loan Banks, 30
Federal Home Loan Mortgage Corporation, 30, 34, 35
Federal Housing Administration, 30, 34, 35
Federal Land Banks, 35
Federal National Mortgage Association, 30, 34, 35
Federal Reserve Banks
Condition statement, 10
Discount rates (See Interest rates)
U.S. government securities held, 5, 10, 11, 27
Federal Reserve credit, 5, 6, 10, 11
Federal Reserve notes, 10
Federally sponsored credit agencies, 30
Finance companies
Assets and liabilities, 33
Business credit, 33
Loans, 36
Paper, 22, 23
Financial institutions, loans to, 19, 20, 21
Float, 5
Flow of funds, 37-41
Foreign banks, assets and liabilities of U.S. branches and
agencies, 20, 21
Foreign currency operations, 10
Foreign deposits in U.S. banks, 5, 20
Foreign exchange rates, 62
Foreign trade, 51
Foreigners
Claims on, 52, 55, 56, 57, 59
Liabilities to, 20, 51, 52, 53, 58, 60, 61
CAPACITY utilization, 43
Capital accounts
Banks, by classes, 17
Federal Reserve Banks, 10
Central banks, discount rates, 61
Certificates of deposit, 23
Commercial and industrial loans
Commercial banks, 19, 20
Weekly reporting banks, 19-21
Commercial banks
Assets and liabilities, 17-21, 64-67
Commercial and industrial loans, 17-21
Consumer loans held, by type and terms, 36
Deposit interest rates of insured, 15
Loans sold outright, 20
Real estate mortgages held, by holder and property, 35
Terms of lending, 64-67
Time and savings deposits, 4
Commercial paper, 22, 23, 33
Condition statements (See Assets and liabilities)
Construction, 42, 46
Consumer installment credit, 36
Consumer prices, 42
Consumption expenditures, 49, 50
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
DEBITS to deposit accounts, 16
Debt (See specific types of debt or securities)
Demand deposits
Banks, by classes, 17-21
Ownership by individuals, partnerships, and
corporations, 20, 21
Turnover, 16
Depository institutions
Reserve requirements, 8
Reserves and related items, 4, 5, 6, 12
Banks, by classes, 4, 17—21
Federal Reserve Banks, 5, 10
Interest rates, 15
Turnover, 16
Discount rates at Reserve Banks and at foreign central banks and
foreign countries (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 32
EMPLOYMENT, 42
Eurodollars, 23
GOLD
Certificate account, 10
Stock, 5, 51
Government National Mortgage Association, 30, 34, 35
Gross domestic product, 48
HOUSING, new and existing units, 46
INCOME, personal and national, 42, 48, 49
Industrial production, 42, 44
Installment loans, 36
69
Insurance companies, 27, 35
Interest rates
Bonds, 23
Commercial banks, 64-67
Consumer installment credit, 36
Deposits, 15
Federal Reserve Banks, 7
Foreign central banks and foreign countries, 61
Money and capital markets, 23
Mortgages, 34
Prime rate, 22
International capital transactions of United States, 50-61
International organizations, 52, 53, 55, 58, 59
Inventories, 48
Investment companies, issues and assets, 32
Investments (See also specific types)
Banks, by classes, 17-21
Commercial banks, 4, 17-21
Federal Reserve Banks, 10, 11
Financial institutions, 35
LABOR force, 42
Life insurance companies {See Insurance companies)
Loans (See also specific types)
Banks, by classes, 17—21
Commercial banks, 17-21
Federal Reserve Banks, 5, 6, 7, 10, 11
Financial institutions, 35
Insured or guaranteed by United States, 34, 35
MANUFACTURING
Capacity utilization, 43
Production, 43, 45
Margin requirements, 24
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 6
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, 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, by classes, 19, 20, 35
Terms, yields, and activity, 34
Type of holder and property mortgaged, 35
Repurchase agreements, 6
Reserve requirements, 8
Reserves
Commercial banks, 17
Depository institutions, 4, 5, 6, 12
Federal Reserve Banks, 10
U.S. reserve assets, 51
Residential mortgage loans, 34
Retail credit and retail sales, 36, 42
SAVING
Flow of funds, 37-41
National income accounts, 48
Savings institutions, 35, 36, 37
Savings deposits (See Time and savings deposits)
Securities (See also specific types)
Federal and federally sponsored credit agencies, 30
Foreign transactions, 60
New issues, 31
Prices, 24
Special drawing rights, 5, 10, 50, 51
State and local governments
Deposits, 19, 20
Holdings of U.S. government securities, 27
New security issues, 31
Ownership of securities issued by, 19, 21
Rates on securities, 23
Stock market, selected statistics, 24
Stocks (See also Securities)
New issues, 31
Prices, 24
Student Loan Marketing Association, 30
TAX receipts, federal, 26
Thrift institutions, 4. (See also Credit unions and Savings
institutions)
Time and savings deposits, 4, 13, 15, 17-21
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, 17-21
Treasury deposits at Reserve Banks, 5, 10, 25
U.S. government securities
Bank holdings, 17-21, 27
Dealer transactions, positions, and financing, 29
Federal Reserve Bank holdings, 5, 10, 11, 27
Foreign and international holdings and
transactions, 10, 27, 61
Open market transactions, 9
Outstanding, by type and holder, 27, 28
Rates, 23
U.S. international transactions, 50-62
Utilities, production, 45
VETERANS Administration, 34, 35
WEEKLY reporting banks, 17-21
Wholesale (producer) prices, 42, 47
YIELDS (See Interest rates)
70
Federal Reserve Board of Governors
and Official Staff
A L A N GREENSPAN,
ALICE M . RIVLIN,
OFFICE
OF BOARD
Chairman
Vice Chair
EDWARD W . KELLEY, JR.
LAWRENCE B . LINDSEY
DIVISION
MEMBERS
OF INTERNATIONAL
FINANCE
JOSEPH R. COYNE, Assistant to the Board
DONALD J. WINN, Assistant to the Board
THEODORE E. ALLISON, Assistant to the Board for Federal
Reserve System Affairs
LYNN S. FOX, Deputy Congressional
Liaison
WINTHROP P. HAMBLEY, Special Assistant to the Board
BOB STAHLY MOORE, Special Assistant to the Board
DIANE E. WERNEKE, Special Assistant to the Board
PORTIA W. THOMPSON, Equal Employment
Opportunity
Programs
Adviser
EDWIN M . TRUMAN, Staff Director
LARRY J. PROMISEL, Senior Associate
Director
CHARLES J. SIEGMAN, Senior Associate
Director
DALE W. HENDERSON, Associate
Director
DAVID H. HOWARD, Senior Adviser
DONALD B. ADAMS, Assistant
Director
THOMAS A. CONNORS, Assistant
Director
PETER HOOPER III, Assistant
Director
KAREN H. JOHNSON, Assistant
Director
CATHERINE L. MANN, Assistant
Director
RALPH W. SMITH, JR., Assistant
Director
LEGAL
DIVISION
DIVISION
J. VIRGIL MATTINGLY, JR., General Counsel
SCOTT G. ALVAREZ, Associate General Counsel
RICHARD M. ASHTON, Associate General Counsel
OLIVER IRELAND, Associate General Counsel
KATHLEEN M. O'DAY, Associate General Counsel
ROBERT DEV. FRIERSON, Assistant General Counsel
KATHERINE H. WHEATLEY, Assistant General Counsel
OFFICE
OF THE
WILLIAM W . WILES,
SECRETARY
Secretary
JENNIFER J. JOHNSON, Deputy
Secretary
BARBARA R. LOWREY, Associate Secretary
and
DIVISION
OF
BANKING
SUPERVISION
AND
REGULATION
RICHARD SPILLENKOTHEN,
Director
STEPHEN C. SCHEMERING, Deputy
Director
WILLIAM A. RYBACK, Associate
Director
Director
HERBERT A. BIERN, Deputy Associate
ROGER T. COLE, Deputy Associate
Director
JAMES I. GARNER, Deputy Associate
Director
HOWARD A. AMER, Assistant
Director
GERALD A. EDWARDS, JR., Assistant
Director
STEPHEN M . HOFFMAN, JR., Assistant
Director
JAMES V. HOUPT, Assistant
Director
JACK P. JENNINGS, Assistant
Director
MICHAEL G. MARTINSON, Assistant
Director
RHOGER H PUGH, Assistant
Director
SIDNEY M . SUSSAN, Assistant
Director
MOLLY S. WASSOM, Assistant
Director
WILLIAM SCHNEIDER, Project Director,
National Information
Center
Ombudsman
OF RESEARCH
MICHAEL J. PRELL,
AND
STATISTICS
Director
EDWARD C. ETTIN, Deputy
Director
DAVID J. STOCKTON, Deputy
Director
MARTHA BETHEA, Associate
Director
WILLIAM R. JONES, Associate
Director
MYRON L. KWAST, Associate
Director
PATRICK M. PARKINSON, Associate
Director
THOMAS D. SIMPSON, Associate
Director
LAWRENCE SLIFMAN, Associate
Director
MARTHA S. SCANLON, Deputy Associate
Director
PETER A. TINSLEY, Deputy Associate
Director
FLINT BRAYTON, Assistant
Director
DAVID S. JONES, Assistant
Director
STEPHEN A. RHOADES, Assistant
Director
CHARLES S. STRUCKMEYER, Assistant
Director
ALICE PATRICIA W H I T E , Assistant
Director
JOYCE K. ZICKLER, Assistant
Director
JOHN J. MINGO, Senior Adviser
G L E N N B . CANNER,
DIVISION
Adviser
OF MONETARY
DONALD L . KOHN,
AFFAIRS
Director
DAVID E. LINDSEY, Deputy
Director
BRIAN F. MADIGAN, Associate
Director
RICHARD D. PORTER, Deputy Associate
Director
VINCENT R. REINHART, Assistant
Director
NORMAND R.V. BERNARD, Special Assistant to the Board
DIVISION
OF
CONSUMER
AND COMMUNITY
GRIFFITH L . GARWOOD,
AFFAIRS
Director
GLENN E. LONEY, Associate
Director
DOLORES S. SMITH, Associate
Director
MAUREEN P. ENGLISH, Assistant
Director
IRENE SHAWN M C N U L T Y , Assistant
Director
71
SUSAN M . PHILLIPS
LAURENCE H . MEYER
JANET L . YELLEN
OFFICE OF
STAFF DIRECTOR
S. DAVID FROST, Staff Director
SHEILA CLARK, EEO Programs
DIVISION
DIVISION OF RESERVE BANK
AND PA YMENT
SYSTEMS
FOR MANAGEMENT
OF HUMAN
CLYDE H . FARNSWORTH, JR.,
RESOURCES
Director
JOHN R. WEIS, Associate
Director
JOSEPH H. HAYES, JR., Assistant
Director
FRED HOROWITZ, Assistant
Director
OFFICE
OF THE
CONTROLLER
GEORGE E . LIVINGSTON,
Controller
STEPHEN J. CLARK, Assistant Controller (Programs and
DARRELL R. PAULEY, Assistant Controller
(Finance)
DIVISION
OF SUPPORT
ROBERT E . FRAZIER,
SERVICES
Director
GEORGE M . LOPEZ, Assistant
DAVID L. WILLIAMS, Assistant
Director
Director
DIVISION OF INFORMATION
MANAGEMENT
STEPHEN R . MALPHRUS,
RESOURCES
Director
MARIANNE M . EMERSON, Assistant
Director
P o KYUNG KIM, Assistant
Director
RAYMOND H. MASSEY, Assistant
Director
EDWARD T. MULRENIN, Assistant
Director
DAY W. RADABAUGH, JR., Assistant
Director
ELIZABETH B. RIGGS, Assistant
Director
RICHARD C. STEVENS, Assistant
Director
Director
DAVID L. ROBINSON, Deputy Director (Finance and
LOUISE L. ROSEMAN, Associate
Director
CHARLES W. BENNETT, Assistant
Director
JACK DENNIS, JR., Assistant
Director
EARL G. HAMILTON, Assistant
Director
JEFFREY C. MARQUARDT, Assistant
Director
JOHN H. PARRISH, Assistant
Director
FLORENCE M . YOUNG, Assistant
Director
Director
MANAGEMENT
DAVID L . SHANNON,
OPERATIONS
Budgets)
OFFICE OF THE INSPECTOR
GENERAL
BRENT L. BOWEN, Inspector
General
DONALD L. ROBINSON, Assistant Inspector
General
BARRY R. SNYDER, Assistant Inspector
General
Control)
72
Federal Reserve Bulletin • August 1996
Federal Open Market Committee
and Advisory Councils
FEDERAL OPEN MARKET
COMMITTEE
MEMBERS
A L A N GREENSPAN,
WILLIAM J. M C D O N O U G H , Vice
Chairman
EDWARD G . B O E H N E
LAWRENCE B . LINDSEY
ALICE M . RIVLIN
JERRY L . JORDAN
ROBERT D . M C T E E R , JR.
GARY H . STERN
EDWARD W . KELLEY, JR.
LAURENCE H . MEYER
JANET L . YELLEN
Chairman
SUSAN M . PHILLIPS
ALTERNATE
MEMBERS
J . ALFRED BROADDUS, JR.
MICHAEL H . MOSKOW
JACK G U Y N N
ROBERT T. PARRY
ERNEST T . PATRIKIS
STAFF
and
Economist
DAVID E . LINDSEY, Associate
NORMAND R . V . BERNARD, Deputy
Secretary
FREDERIC S . MISHKIN, Associate
D O N A L D L . K O H N , Secretary
JOSEPH R . COYNE, Assistant
GARY P. GILLUM, Assistant
THOMAS C . BAXTER, JR., Deputy
E D W I N M . TRUMAN,
ARTHUR J . ROLNICK, Associate
Secretary
J . VIRGIL MATTINGLY, JR., General
M I C H A E L J. PRELL,
LARRY J. PROMISEL, Associate
Secretary
Counsel
General
Counsel
Economist
RICHARD W . L A N G , Associate
PETER R . FISHER, Manager,
FEDERAL ADVISORY
Economist
Economist
CHARLES J. SIEGMAN, Associate
Economist
THOMAS D . SIMPSON, Associate
Economist
DAVID J. STOCKTON, Associate
Economist
Economist
Economist
HARVEY ROSENBLUM, Associate
M A R K S . SNIDERMAN, Associate
Economist
Economist
System
Open
Market
Economist
Economist
Account
COUNCIL
RICHARD G . TILGHMAN,
President
FRANK V. CAHOUET, Vice
President
WILLIAM M . CROZIER, JR., F i r s t D i s t r i c t
ROGER L . FITZSIMONDS, S e v e n t h D i s t r i c t
WALTER V. SHIPLEY, S e c o n d D i s t r i c t
THOMAS H . JACOBSEN, E i g h t h D i s t r i c t
WALTER E . DALLER, JR., T h i r d D i s t r i c t
RICHARD M . KOVACEVICH, N i n t h D i s t r i c t
FRANK V. CAHOUET, F o u r t h D i s t r i c t
CHARLES E . NELSON, T e n t h D i s t r i c t
RICHARD G . TILGHMAN, F i f t h D i s t r i c t
CHARLES T. DOYLE, E l e v e n t h D i s t r i c t
CHARLES E . RICE, S i x t h D i s t r i c t
WILLIAM F. Z U E N D T , T w e l f t h D i s t r i c t
HERBERT V. PROCHNOW, Secretary
JAMES ANNABLE,
WILLIAM J. KORSVIK,
Emeritus
Co-Secretary
Co-Secretary
73
CONSUMER ADVISORY
COUNCIL
KATHARINE
W. M C K E E , Durham, North Carolina, Chairman
Richmond, Virginia, Vice Chairman
JULIA M . SEWARD,
S. AMADOR, LOS Angeles, California
R. BUTLER, Riverwoods, Illinois
ROBERT A. COOK, Baltimore, Maryland
ALVIN J . COWANS, Orlando, Florida
ELIZABETH G . FLORES, Laredo, Texas
HERIBERTO FLORES, Springfield, Massachusetts
EMANUEL FREEMAN, Philadelphia, Pennsylvania
DAVID C. FYNN, Cleveland, Ohio
ROBERT G . GREER, Houston, Texas
KENNETH R. HARNEY, Chevy Chase, Maryland
GAIL K . HILLEBRAND, San Francisco, California
TERRY JORDE, Cando, North Dakota
FRANCINE JUSTA, New York, New York
EUGENE I. LEHRMANN, Madison, Wisconsin
RICHARD
THOMAS
THRIFT INSTITUTIONS ADVISORY
DAVID
T. LOUIS, Brooklyn, New York
N. L U N D , Falmouth, Maine
RONALD A. PRILL, Minneapolis, Minnesota
LISA RICE-COLEMAN, Toledo, Ohio
JOHN R . RINES, Detroit, Michigan
MARGOT SAUNDERS, Washington, D.C.
A N N E B. SHLAY, Philadelphia, Pennsylvania
REGINALD J . SMITH, Kansas City, Missouri
GEORGE P. SURGEON, Arkadelphia, Arkansas
GREGORY D. SQUIRES, Milwaukee, Wisconsin
JOHN E . TAYLOR, Washington, D.C.
LORRAINE VANETTEN, Troy, Michigan
THEODORE J . WYSOCKI, JR., Chicago, Illinois
LILY K. YAO, Honolulu, Hawaii
ERROL
WILLIAM
COUNCIL
E. L E E BEARD, Hazleton, Pennsylvania, President
F. HOLLAND, Burlington, Massachusetts, Vice President
C. BURKHOLDER, Houston, Texas
T. CROWLEY, JR., Milwaukee, Wisconsin
GEORGE L. ENGELKE, JR., Lake Success, New York
DOUGLAS A. FERRARO, Englewood, Colorado
BEVERLY D . HARRIS, Livingston, Montana
Irwindale, California
C. SCULLY, Chicago, Illinois
RONALD W. STIMPSON, Memphis, Tennessee
LARRY T. WILSON, Raleigh, North Carolina
WILLIAM W. ZUPPE, Spokane, Washington
BARRY
CHARLES R . RINEHART,
MICHAEL
JOSEPH
74
Federal Reserve Board Publications
For ordering assistance, write PUBLICATIONS SERVICES,
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1994. 157 pp.
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Consumer Handbook on Adjustable Rate Mortgages
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Federal Reserve Banks
Organization and Advisory Committees
A C o n s u m e r ' s G u i d e to M o r t g a g e L o c k - I n s
A C o n s u m e r ' s Guide to Mortgage Settlement Costs
A C o n s u m e r ' s G u i d e to M o r t g a g e R e f i n a n c i n g s
H o m e M o r t g a g e s : U n d e r s t a n d i n g the P r o c e s s a n d Your R i g h t
to Fair L e n d i n g
H o w to F i l e a C o n s u m e r C o m p l a i n t
Making Deposits: W h e n Will Your M o n e y Be Available?
M a k i n g S e n s e of S a v i n g s
S H O P : T h e C a r d You P i c k C a n S a v e You M o n e y
W e l c o m e to t h e F e d e r a l R e s e r v e
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A b o u t H o m e E q u i t y L i n e s of C r e d i t
75
STAFF STUDIES: Only Summaries Printed in the
BULLETIN
Studies and papers on economic and financial subjects that are of
general interest. Requests to obtain single copies of the full text or
to be added to the mailing list for the series may be sent to
Publications Services.
Staff Studies 1 - 1 5 7 are out of print.
1 5 8 . T H E ADEQUACY AND CONSISTENCY OF MARGIN REQUIREMENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE
PRODUCTS, b y M a r k J . W a r s h a w s k y w i t h t h e a s s i s t a n c e o f
Dietrich Earnhart. S e p t e m b e r 1989. 23 pp.
1 5 9 . N E W DATA ON THE PERFORMANCE OF NONBANK SUBSIDIARIES OF BANK HOLDING COMPANIES, b y N e l l i e L i a n g a n d
D o n a l d S a v a g e . F e b r u a r y 1 9 9 0 . 12 p p .
1 6 0 . BANKING MARKETS AND THE USE OF FINANCIAL SERVICES BY SMALL AND M E D I U M - S I Z E D BUSINESSES, b y
Gregory E. Elliehausen and J o h n D. Wolken. September
1990. 35 pp.
1 6 1 . A R E V I E W OF CORPORATE RESTRUCTURING ACTIVITY,
1980-90, by Margaret Hastings Pickering. M a y
1991.
21 pp.
1 6 2 . EVIDENCE ON THE S I Z E OF BANKING MARKETS FROM M O R T GAGE LOAN RATES IN T W E N T Y CITIES, b y S t e p h e n A .
R h o a d e s . F e b r u a r y 1 9 9 2 . 11 p p .
1 6 3 . CLEARANCE AND SETTLEMENT IN U . S . SECURITIES M A R KETS, b y P a t r i c k P a r k i n s o n , A d a m G i l b e r t , E m i l y G o l l o b ,
Lauren Hargraves, Richard M e a d , Jeff Stehm, and M a r y
A n n Taylor. M a r c h 1992. 37 pp.
1 6 4 . T H E 1 9 8 9 — 9 2 CREDIT C R U N C H FOR R E A L ESTATE, b y
J a m e s T . F e r g u s a n d J o h n L . G o o d m a n , Jr. J u l y 1 9 9 3 .
20 pp.
1 6 5 . T H E D E M A N D FOR TRADE CREDIT: A N INVESTIGATION OF
MOTIVES FOR TRADE CREDIT U S E BY SMALL BUSINESSES, b y
Gregory E. Elliehausen and John D. Wolken. September
1 9 9 3 . 18 p p .
1 6 6 . T H E ECONOMICS OF THE PRIVATE PLACEMENT M A R K E T , b y
M a r k Carey, Stephen Prowse, John Rea, and Gregory Udell.
January 1994. I l l pp.
1 6 7 . A SUMMARY OF MERGER PERFORMANCE STUDIES IN B A N K ING, 1 9 8 0 - 9 3 , AND AN ASSESSMENT OF THE " O P E R A T I N G
PERFORMANCE" AND " E V E N T S T U D Y " METHODOLOGIES,
by Stephen A. R h o a d e s . July 1994. 37 pp.
1 6 8 . T H E ECONOMICS OF THE PRIVATE EQUITY M A R K E T , b y
George W. Fenn, Nellie Liang, and Stephen Prowse. N o v e m ber 1995. 6 9 pp.
1 6 9 . B A N K MERGERS AND INDUSTRYWIDE STRUCTURE, 1 9 8 0 - 9 4 ,
by Stephen A. Rhoades. February 1996. 32 pp.
76
Maps of the Federal Reserve System
MINNEAPOLIS
*
•
TETON
pm
TO
1 2
cJom
CHI.CAUUH
F FRANCISCO
1 0
I i i i i l i i i i i
CANSAS CITY
M
J1
• • NEW YORK
CLEVELAND
PHILADELPHIA
•
JPt
ST. LOUIS
RICHMOND
5
8
6
11
•
ATLANTA
A
•
DALLAS
ALASKA
HAWAII
LEGEND
Both
pages
• Federal Reserve Bank city
• Board of Governors of the Federal
Reserve System, Washington, D.C.
Facing
page
• Federal Reserve Branch city
—
Branch boundary
NOTE
The Federal Reserve officially identifies Districts by number
and Reserve Bank city (shown on both pages) and by letter
(shown on the facing page).
In the 12th District, the Seattle Branch serves Alaska,
and the San Francisco Bank serves Hawaii.
The System serves commonwealths and territories as
follows: the New York Bank serves the Commonwealth
of Puerto Rico and the U.S. Virgin Islands; the San
Francisco Bank serves American Samoa, Guam, and the
Commonwealth of the Northern Mariana Islands. The
Board of Governors revised the branch boundaries of the
System most recently in December 1991.
77
1-A
2-B
4-D
3-C
5-E
Baltimore md
v</
l
CT
li.
VT
NH
MA
Buffalo
•Cincinnati
Bj
•Charlotte
I
S
NY
cr
sc
NEW YORK
BOSTON
CLEVELAND
PHILADELPHIA
7-G
6-F
RICHMOND
8-H
•Nashville
Birmingham
_
•
Detroit •
^
•.
...
Louisville
A- ; IN
f,
-TN
Jacksonville
LA
•Memphis
Little)
Rock ( MS
H,
New Orleans
J
Miami
ATLANTA
ST. LOUIS
CHICAGO
9-1
MINNEAPOLIS
12-L
10-J
WY
1 NB
Omaha*
CO
Denver
ALASKA
WA
Seattle
1
MM
Oklahoma City
Pwtland
OK
OR
)
KANSAS CITY
ID
NV~7
11-K
rx
•
MM
B
?l Paso
)
Salt l a k e City
LA
w
""^Xtlcaiston
•Los Angeles
• A ?
San Antomo
HAWAII
AZ
DALLAS
SAN FRANCISCO
78
Federal Reserve Banks, Branches,
and Offices
FEDERAL RESERVE BANK
branch, or facility
Zip
Chairman
Deputy Chairman
President
First Vice President
BOSTON*
02106
Jerome H. Grossman
William C. Brainard
Cathy E. Minehan
Paul M. Connolly
NEW YORK*
10045
John C. Whitehead
Thomas W. Jones
Joseph J. Castiglia
William J. McDonough
Ernest T. Patrikis
Buffalo
14240
Carl W. Turnipseed 1
PHILADELPHIA
19105
Donald J. Kennedy
Joan Carter
Edward G. Boehne
William H. Stone, Jr.
CLEVELAND*
44101
Jerry L. Jordan
Sandra Pianalto
Cincinnati
Pittsburgh
45201
15230
A. William Reynolds
G. Watts Humphrey, Jr.
John N. Taylor, Jr.
John T. Ryan III
RICHMOND*
23219
J. Alfred Broaddus, Jr.
Walter A. Varvel
Baltimore
Charlotte
Culpeper
21203
28230
22701
Claudine B. Malone
Robert L. Strickland
Michael R. Watson
James O. Roberson
Hugh M. Brown
Daniel E. Sweat, Jr.
Donald E. Boomershine
Joan D. Ruffier
R. Kirk Landon
Paula Lovell
Lucimarian Roberts
Jack Guynn
Patrick K. Barron
Robert M. Healey
Lester H. McKeever, Jr.
vacancy
Michael H. Moskow
William C. Conrad
John F. McDonnell
Susan S. Elliott
Janet M. Jones
John A. Williams
John V. Myers
Thomas C. Melzer
W. LeGrande Rives
J e a n D . Kinsey
David A. Koch
Lane W. Basso
Gary H. Stern
Colleen K. Strand
Herman Cain
A. Drue Jennings
Peter I. Wold
Barry L. Eller
LeRoy W. Thorn
Thomas M. Hoenig
Richard K. Rasdall
Cece Smith
Roger R. Hemminghaus
Patricia Z. Holland-Branch
Issac H Kempner III
Carol L. Thompson
Robert D. McTeer, Jr.
Helen E. Holcomb
Judith M. Runstad
James A. Vohs
Anita E. Landecker
Ross R. Runkel
Gerald R. Sherratt
George F. Russell, Jr.
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
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
59601
64198
80217
73125
68102
75201
79999
77252
78295
SAN FRANCISCO
94120
Los Angeles
Portland
Salt Lake City
Seattle
90051
97208
84125
98124
Vice President
in charge of branch
Charles A. Cerino 1
Harold J. Swart 1
William J. Tignanelli 1
Dan M. Bechter 1
Julius Malinowski, Jr. 2
James M. Mckee 1
Fred R. Herr 1
James D. Hawkins 1
James T. Curry III
Melvyn K. Purcell
Robert J. Musso
David R. Allardice 1
Robert A. Hopkins
Thomas A. Boone
John P. Baumgartner
John D. Johnson
Carl M. Gambs 1
Kelly J. Dubbert
Harold L. Shewmaker
Sammie C. Clay
Robert Smith, III 1
James L. Stull 1
Mark Mullinix 1
Raymond H. Laurence 1
Andrea P. Wolcott
Gordon Werkema 3
* Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; East Rutherford, New Jersey 07016; Jericho,
New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311;
Des Moines, Iowa 50306; Indianapolis, Indiana 46204; Milwaukee, Wisconsin 53202; and Peoria, Illinois 61607.
1. Senior Vice President.
2. Assistant Vice President.
3. Executive Vice President
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.
The Monetary Policy and Reserve Requirements
Handbook contains Regulations A, D, and Q, plus
related materials.
The Securities Credit Transactions Handbook contains Regulations G, 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 are the Board's list
of marginable OTC stocks and its list of foreign margin
stocks.
The Consumer and Community Affairs Handbook
contains Regulations B, C, E, M, Z, AA, BB, and DD,
and associated materials.
GUIDE
TO THE FLOW OF FUNDS
ACCOUNTS
A recent Federal Reserve publication, Guide to the Flow
of Funds Accounts, explains in detail how the U.S.
financial flow accounts are prepared. The accounts,
which are compiled by the Division of Research and
Statistics, are published in the Board's quarterly Z.l
statistical release, "Flow of Funds Accounts, Flows and
Outstandings." The Guide updates and replaces Introduction to Flow of Funds, published in 1980.
The 670-page Guide begins with an explanation of
the organization and uses of the flow of funds accounts
and their relationship to the national income and
product accounts prepared by the U.S. Department of
Commerce. Also discussed are the individual data
series that make up the accounts and such proce-
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 diskette 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.
dures as seasonal adjustment, extrapolation, and
interpolation.
The balance of the Guide contains explanatory tables
corresponding to the tables of financial flows data that
appeared in the September 1992 Z.l release. These
tables give, for each data series, the source of the data or
the methods of calculation, along with annual data for
1991 that were published in the September 1992 release.
Guide to the Flow of Funds Accounts is available for
$8.50 per copy from Publications Services, Board of
Governors of the Federal Reserve System, Washington,
DC 20551. Orders must include a check or money order,
in U.S. dollars, made payable to the Board of Governors
of the Federal Reserve System.
Publications of Interest
FEDERAL RESERVE
CONSUMER
CREDIT
PUBLICATIONS
The Federal Reserve Board publishes a series of pamphlets covering individual credit laws and topics, as
pictured below.
Three booklets on the mortgage process are available:
A Consumer's Guide to Mortgage Lock-Ins, A Consumer's Guide to Mortgage Refinancings, and A Consumer's
Guide to Mortgage Settlement Costs. These booklets
were prepared in conjunction with the Federal Home
Loan Bank Board and in consultation with other federal
agencies and trade and consumer groups. The Board
also publishes the Consumer Handbook to Credit Protection Laws, a complete guide to consumer credit protections. This forty-four-page booklet explains how to
shop and obtain credit, how to maintain a good credit
rating, and how to dispute unfair credit transactions.
A Consumer's
Guide to
Mortgage
Lock»ins
Shop . . . The Card You Pick Can Save You Money is
designed to help consumers comparison shop when
looking for a credit card. It contains the results of the
Federal Reserve Board's survey of the terms of credit
card plans offered by credit card issuers throughout the
United States. Because the terms can affect the amount
an individual pays for using a credit card, the booklet
lists the annual percentage rate (APR), annual fee, grace
period, type of pricing (fixed or variable rate), and a
telephone number for each card issuer surveyed.
Copies of consumer publications are available free
of charge from Publications Services, Mail Stop 127,
Board of Governors of the Federal Reserve System,
Washington, DC 20551. Multiple copies for classroom
use are also available free of charge.
Quid* to
Costs
Business
Credit
for Women,
Minorities, and
Small B u s i n e s s e s
SHOP
The Card You Pick
Can Save You Money
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 release
Frequency of release
H.3
Aggregate Reserves
Weekly/Thursday
H.4.1
Factors Affecting Reserve Balances
Weekly/Thursday
H.6
Money Stock
Weekly/Thursday
H.8
Assets and Liabilities of Insured Domestically Chartered
and Foreign Related Banking Institutions
Weekly/Monday
H.10
Foreign Exchange Rates
Weekly/Monday
H.15
Selected Interest Rates
Weekly/Monday
G.5
Foreign Exchange Rates
Monthly/end of month
G.17
Industrial Production and Capacity Utilization
Monthly/midmonth
G.19
Consumer Installment Credit
Monthly/fifth business day
Z.7
Flow of Funds
Quarterly
@FedFRASER