Full text of Federal Reserve Bulletin : December 1993
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VOLUME 79 •
NUMBER 12 •
DECEMBER 1993
FEDERAL RESERVE
BULLETIN
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D . C .
PUBLICATIONS COMMITTEE
Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood • Donald L. Kohn
• J. Virgil Mattingly, Jr. • Michael J. Prell • 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
1075 INTERSTATE BANKING: A STATUS
REPORT
All states except Hawaii now permit their
banks to be acquired by bank holding companies headquartered in some or all other states.
A few states allow banks to branch across
state lines. This article reports on the status
of interstate banking laws, compares interstate bank holding companies and interstate
branch banks as alternative means of bank
expansion, provides some data on interstate
banking organizations, and reviews the effect
of interstate banking on bank concentration.
1090 INDUSTRIAL PRODUCTION AND
CAPACITY UTILIZATION FOR
SEPTEMBER 1993
Industrial production increased 0.2 percent
in September; the revised index showed
gains of 0.1 percent in August and 0.2 percent in July. Utilization of total industrial
capacity, at 81.6 percent, has been essentially
unchanged since February.
1093 STATEMENTS TO THE CONGRESS
John P. LaWare, Member, Board of Governors, discusses the interstate banking and
insurance provisions of S.543, legislation
that would authorize interstate banking
nationwide through the acquisition of existing banks within a year after enactment and
would also permit national banks to engage
in insurance agency activities that are now
permissible for state banks; he says that the
Board supports legislation to remove restrictions on geographic expansion and to provide for insurance agency activites by banks
and bank holding companies, before the Senate Committee on Banking, Housing, and
Urban Affairs, October 5, 1993.
1098 Governor LaWare discusses the Board's
views on H.R.2600, the Business, Commercial, and Community Development Secondary Market Development Act, which has as
its objective to promote economic growth
and credit formation by facilitating the development of a secondary market for business,
commercial, and community development
debt and equity investments in the private
sector; he says that the Federal Reserve
shares this important objective, before the
Subcommittee on Economic Growth and
Credit Formation of the House Committee
on Banking, Finance and Urban Affairs,
October 7, 1993.
1100 Alan Greenspan, Chairman, Board of Governors, reviews the important issues raised by
recent legislative initiatives to alter the structure of the Federal Reserve System, including provisions that would change the status
of Reserve Bank presidents, broaden the
authority of the General Accounting Office
to audit the Federal Reserve, and mandate
additional disclosure of monetary policy
decisions and discussions; he says that in his
view it would be a mistake to legislate structural reform when, as in this case, compelling evidence of the need for change is
lacking, before the House Committee on
Banking, Finance and Urban Affairs, October 13, 1993.
1107 Chairman Greenspan provides his views on
the appropriate degree of disclosure by the
Federal Open Market Committee (FOMC);
he says that he firmly believes that a shift to
prompter disclosure of the substance of
FOMC deliberations will adversely affect the
discussions and decisions and therefore monetary policy itself, before the House Committee on Banking, Finance and Urban Affairs,
October 19, 1993.
1110 David W. Mullins, Jr., Vice Chairman, Board
of Governors, presents his views on the portion of H.R.28, the Federal Reserve System
Accountability Act, dealing with disclosure
of FOMC deliberations; he says that in his
view the current process works well and that
substantial changes in disclosure of these
deliberations would threaten the quality of
monetary policy decisions, before the House
Committee on Banking, Finance and Urban
Affairs, October 19, 1993.
1114 Lawrence B. Lindsey, Member, Board of
Governors, comments on provisions of
H.R.28 that pertain to the release of information on monetary policy and says that videotaping the meetings would probably reduce
the usefulness of them in that the give and
take in the discussion among policymakers
would be sharply reduced and more policy
discussions would tend to take place outside
FOMC meetings, before the House Committee on Banking, Finance and Urban Affairs,
October 19, 1993.
1111 Wayne D. Angell, Member, Board of Governors, presents his views on the accountability
of monetary policy, and says that the current
procedures regarding disclosure are on the
right track because they permit a careful
review of alternative policies while allowing
the Congress and the public to analyze both
the process by which decisions are reached
and the results, before the House Committee
on Banking, Finance and Urban Affairs,
October 19, 1993.
1115 Susan M. Phillips, Member, Board of Governors, presents her views on the reporting of
FOMC actions, with specific reference to
sections of H.R.28 that focus on maintaining
a record of the FOMC meetings; she says
that if a videotape or a literal transcript of
FOMC meetings were to be released, she
believes that many members would feel constrained to speak only from prepared statements, thereby losing the analytical approach
now used in building on each other's observations in a truly deliberative process, before
the House Committee on Banking, Finance
and Urban Affairs, October 19, 1993.
1112 Edward W. Kelley, Jr., Member, Board of
Governors, presents his views on H.R.28,
and says that the existing procedures for
release of FOMC decisions are responsive to
the public's right to be informed and that
there is complete accountability for results,
before the House Committee on Banking,
Finance and Urban Affairs, October 19,
1993.
1113 Governor LaWare comments on the intiatives in H.R.28 that are purportedly designed
to improve the accountability of the FOMC
for monetary policy and specifically on the
requirement for a full and timely accounting
of each FOMC meeting; he says that a verbatim transcript or a videotape recording of the
meetings of the FOMC might significantly
inhibit the free exchange of ideas, a problem
that would be heightened by the knowledge
that the matters under discussion are highly
sensitive for financial markets here and
around the world, before the House Committee on Banking, Finance and Urban Affairs,
October 19, 1993.
1116 The presidents of the twelve Federal Reserve
District Banks discuss maintaining records
of FOMC meetings, before the House
Committee on Banking, Finance, and Urban
' Affairs, October 19, 1993.
1127 Governor Lindsey discusses the Community
Reinvestment Act (CRA) and the current
efforts of the regulatory agencies to
strengthen and improve its administration; he
says that he is aware of the concern about
whether the Federal Reserve's enforcement
of the CRA has been vigorous enough and
that the Federal Reserve's goal is to ensure
that all citizens are being treated fairly,
before the Subcommittee on Consumer
Credit and Insurance of the House Committee on Banking, Finance and Urban Affairs,
October 21, 1993.
1132 Governor Angell speaks on the authority of
the General Accounting Office (GAO) to
audit Federal Reserve operations and the
changes to that authority that would be made
by H.R.28; he says that the GAO has broad
authority to audit most of the operations of
both the Federal Reserve Board and the Federal Reserve Banks and that expanding the
GAO's audit authority over the Federal
Reserve into areas that are now exempt
would be contrary to the public interest,
before the House Committee on Banking,
Finance and Urban Affairs, October 27,
1993.
1135 President McDonough, of the New York
Federal Reserve Bank, provides his views on
the provisions of H.R.28 that relate to the
audit of the Federal Reserve Banks by the
GAO in the context of the implications of the
proposal for the actions taken by the New
York Bank in implementing FOMC decisions and in carrying out activities for foreign accounts; he says that the current
authority of the GAO to audit the New York
Bank provides sufficient scope to address
many of the concerns that have been raised,
before the House Committee on Banking,
Finance and Urban Affairs, October 27,
1993.
1137 Governor Phillips presents the views of the
Board on issues of safety and soundness
associated with derivatives activities of banking organizations; she says that the Board
believes that it and the other banking supervisors have made significant progress in
strengthening policies relating to bank derivatives activities and have the authority necessary to address such issues as accounting and
financial reporting, before the House Committee on Banking, Finance and Urban
Affairs, October 28, 1993.
1143
ANNOUNCEMENTS
Issuance of warning on the use of questionable financial instruments.
Availability of revised Lists of OTC Margin
Stocks and of Foreign Margin Stocks.
Change in Board staff.
1145 LEGAL DEVELOPMENTS
Various bank holding company, bank service
corporation, and bank merger orders; and
pending cases.
A1 FINANCIAL AND BUSINESS
STATISTICS
These tables reflect data available as of
October 27, 1993.
A3 GUIDE TO TABULAR
PRESENTATION
A4 Domestic Financial Statistics
A44 Domestic Nonfinancial Statistics
A53 International Statistics
A69 GUIDE TO STATISTICAL
AND SPECIAL TABLES
RELEASES
A70 INDEX TO STATISTICAL TABLES
A 7 2 BOARD OF GOVERNORS AND STAFF
A74 FEDERAL OPEN MARKET COMMITTEE
AND STAFF; ADVISORY
COUNCILS
A76 FEDERAL RESERVE
PUBLICATIONS
BOARD
A78 SCHEDULE OF RELEASE DATES FOR
PERIODIC RELEASES
A80 INDEX TO VOLUME 79
A 9 4 MAPS OF THE FEDERAL
SYSTEM
RESERVE
A96 FEDERAL RESERVE BANKS, BRANCHES,
AND OFFICES
Interstate Banking: A Status Report
Donald T. Savage, of the Board's Division of
Research and Statistics, prepared this article.
In the late 1980s, about a decade after Maine
became the first state to permit some form of
interstate banking, thirty states had interstate bank
holding company laws in effect and another seven
had enacted laws that had not yet taken effect.
Fifty-one multistate bank holding companies were
in operation, but only 6 percent of domestic commercial banking assets were held by banks owned
by out-of-state bank holding companies.1
The picture has changed considerably over the
past several years. All states except Hawaii now
have interstate bank holding company laws in
effect, and several states have interstate branch
banking laws. The number of multistate bank holding companies has risen to 178 (as of June 30,
1993), and the share of domestic commercial banking assets held by out-of-state organizations has
increased to 21.3 percent (as of December 31,
1992).
This article reports on the status of interstate
banking laws, discusses the issues involved in the
choice between interstate bank holding companies
and interstate branch banking as alternative means
of geographic expansion, provides some data on
interstate banking organizations, and reviews the
effect of interstate banking on bank concentration.
HISTORICAL
BACKGROUND
Before 1956, federal laws and regulations did not
prohibit bank holding companies from owning subsidiary banks in more than one state, although both
federal and state laws did prohibit banks from
establishing branches across state lines. Despite the
lack of statutory barriers to the expansion of bank
1. The early stages of interstate banking were described in
Donald T. Savage, "Interstate Banking Developments," Federal
Reserve Bulletin, vol. 73 (February 1987), pp. 79-92.
holding companies across state lines, only nineteen
multistate bank holding companies were operating
in 1956.
The Bank Holding Company Act of 1956 introduced barriers to the interstate expansion of bank
holding companies. The Douglas Amendment to
the bill, introduced in floor debate, prohibits a
holding company from acquiring a bank outside its
home state unless the acquisition is specifically
permitted by the statutes of the home state of the
bank to be acquired. In 1956, no state had a statute
permitting bank acquisitions by out-of-state bank
holding companies; therefore, no new multistate
organizations could be formed.
Although it effectively prohibited new interstate
banking organizations, the Bank Holding Company
Act of 1956 did provide grandfather rights for the
nineteen existing multistate companies. Most of the
grandfathered companies were quite small; the four
largest together held 86 percent of the total deposits of the nineteen.
The 1956 act regulated only holding companies
that owned more than one bank. The smaller multibank, multistate companies chose to reorganize and
give up their grandfathered rights to operate in
more than one state so as to avoid the new federal
regulations being applied to multibank holding
companies. Over time, the number of grandfathered multistate bank holding companies decreased
to seven.
The states' option to allow bank acquisitions by
out-of-state holding companies, provided by the
Douglas Amendment, went unused until 1975. In
that year, a general revision of the Maine state
banking code made it possible for out-of-state bank
holding companies, beginning in 1978, to acquire
Maine banks. The Maine legislation was motivated
in large measure by a desire to attract new investment capital to the state. The law initially required
reciprocity: Bank holding companies headquartered in another state, Massachusetts, for example,
could acquire Maine banks only if bank holding
companies headquartered in Maine were allowed
1076
Federal Reserve Bulletin • December 1993
to acquire Massachusetts banks. Because of this
reciprocity requirement, no acquisitions of Maine
banks were possible until another state enacted a
statute allowing the acquisition of its banks by
Maine bank holding companies.
Other interstate banking statutes began appearing in the early 1980s, with Alaska, Massachusetts,
and New York passing laws that became effective
in 1982. Since then, all the remaining states except
Hawaii have enacted some form of interstate bank
holding company law.
Despite congressional consideration of various
changes in federal laws, the movement to interstate bank holding companies has largely been a
product of state action. However, after several
unsuccessful attempts to pass such legislation, the
Garn-St Germain Depository Institutions Act of
1982 amended the Bank Holding Company Act of
1956 to allow for the interstate acquisition of large
failed banks, regardless of state laws. This provision had been sought, especially by the federal
bank regulatory agencies, for many years. Its purpose was not to promote interstate banking, but
rather to increase the number of firms that would
be eligible to acquire a large failed bank. In many
states, the argument went, there would be few
potential buyers if one of the state's largest banks
were to fail; expanding the number of potential
purchasers would, supporters contended, lower the
cost of resolving the failure.
In February 1991, the U.S. Department of the
Treasury, as required by the Financial Institutions
Reform, Recovery and Enforcement Act of 1989,
produced a report to the Congress on reforming
and strengthening the banking system. The report,
Modernizing the Financial System: Recommendations for Safer, More Competitive Banks, recommended that three years after enactment of enabling legislation, bank holding companies be
allowed to acquire banks in all states, regardless of
state laws. Further, the report recommended that
national banks immediately be allowed to branch
into those states in which their parent holding
company could acquire a bank. The report also
recommended that state banks be given any necessary federal permission to branch across state lines,
and that the states retain control over branching
within states. Although many of the other proposals made in the report were included in the Federal
Deposit Insurance Corporation Improvement Act
of 1991, that act contained no provisions for the
deregulation of geographic expansion by banks and
bank holding companies.
Although the Congress has not made any major
changes in the federal statutes regarding branching
or bank holding company expansion since 1956,
the issue continues to be under active consideration. John R LaWare, member of the Board of
Governors of the Federal Reserve System, has in
recent months presented the Board's views on
various aspects of several interstate banking bills
before committees of both the U.S. Senate and the
U.S. House of Representatives.2
THE INTERSTATE BANK
COMPANY LAWS
HOLDING
The interstate bank holding company laws enacted
by the states and the District of Columbia since
1975 differ in several respects. The states' reasons
for passing the laws also vary.
The Forces of Change
Why did so many states decide to permit entry by
out-of-state bank holding companies, especially
considering that some of them still restricted
in-state branching and bank holding company
expansion? The events leading to passage of the
legislation in each state probably were unique to
that state. Several factors that may have played a
role in changing the opinions of bankers and state
legislators are identified below, but undoubtedly
the list is not exhaustive.
• In some states, legislators believed that interstate banking would lead to an inflow of investment capital.
• Large banks in major financial centers wanted
to expand geographically, but the states they
wanted to expand into required reciprocity; the
2. Statements before the Subcommittee on Financial Institutions
Supervision, Regulation and Deposit Insurance of the Committee
on Banking, Finance and Urban Affairs, U.S. House of Representatives, June 22, 1993, Federal Reserve Bulletin, vol. 79 (August
1993), pp. 772-77; and before the Committee on Banking, Housing
and Urban Affairs, U.S. Senate, October 5, 1993, appearing on
pp. 1093-97 of this issue.
Interstate Banking: A Status Report
changes in their home state laws accommodated
the wishes of the large banks. Elsewhere, the views
of large banks, which traditionally favored geographic expansion, came to outweigh the views
of smaller banks, which traditionally opposed
expansion.
• Many bankers, especially at medium-sized,
regional banks, believed that their banks could
survive and attain competitive operating cost levels
only by growing larger. Wanting to enhance their
banks' ability to compete, some states decided to
allow interstate banking.
• Interstate activity allows expansion into markets that may be considered more attractive than
markets within a bank's home state. Funds may
be less expensive than in the home state, or the
investment opportunities may promise higher
yields at lower risk or offer portfolio diversification. Many banks wanted the right to explore these
opportunities.
• Many banks wanted to be able to establish
offices throughout a market area made up of parts
of two or more states. Some wanted to follow their
customers to suburbs in adjacent states or to their
homes in popular retirement states.
• Some banking organizations may have argued
for interstate banking because they expected to be
acquired. For a bank that expects to be acquired
in a consolidation of the industry, there is an
advantage to increasing the number of potential
purchasers.
• In some states, imitation and "level playing
field" effects played a role as bankers argued that
to be competitive with banks in neighboring states,
they too had to have interstate banking rights.
• The views of some opponents of change were
countered by the argument that large out-of-state
companies would not enter the smaller local banking markets served by many of the small banks,
but instead would be competitors for the state's
large banks. In addition, some smaller banks
thought the out-of-state bankers would not know
the local market and would not be able to compete
as effectively as the banks that were being
acquired.
• Everyone in the industry increasingly recognized that interstate banking was occurring despite
laws prohibiting it. The proliferation of loan production offices, nonbank subsidiaries of bank holding companies, nonbank banks, and interstate thrift
1077
institutions, the widespread use of credit cards, and
the provision of financial services by nonfinancial
firms not subject to geographic limitations all made
the traditional restrictions on the geographic expansion of banks more difficult to explain and justify.
If so many financial services could be provided
across state lines by these various means, why
shouldn't deposit-taking institutions be allowed to
expand as well?
• Finally, many in the industry came to believe
that interstate banking was inevitable, and that the
banks in their states should be permitted to participate in the evolution to a new financial structure,
lest they be left behind.
Characteristics
of the Laws
Provisions of the interstate banking laws of fortynine states and the District of Columbia are listed
in table 1. Thirty-four states now allow acquisition
of banks in their state by holding companies headquartered in any other state. Many of these thirtyfour states at first allowed acquisition by holding
companies headquartered in only a limited number
of states; later, either on a predetermined "trigger"
date or by subsequent legislation, they began to
allow entry from all other states.
U'Twenty-one of the thirty-four states that allow
entry from all other states require reciprocal entry
rights for bank holding companies headquartered in
their state. For example, New York has a nationwide reciprocal interstate banking law; a bank
holding company headquartered in any other state
can acquire banks in New York if its home state
allows acquisition of that state's banks by New
York bank holding companies. Because not all
states allow entry by New York holding companies, not all holding companies can enter New
York. The thirteen states whose interstate banking
laws do not require reciprocity can be entered by
bank holding companies headquartered in any other
state, regardless of the law of the home state of the
entering holding company.
Fifteen states and the District of Columbia allow
entry only by bank holding companies headquartered in selected states within a region. Currently
defined regions range from areas as small as the six
adjacent states to areas as large as sixteen states
and the District of Columbia. All the states that
1078
1.
Federal Reserve Bulletin • December 1993
State legislation on interstate bank holding companies, November 1, 19931
State
Alabama
Alaska . .
Arizona .
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida .
Georgia
Idaho . . . .
Illinois . . .
Indiana . .
Iowa
Kansas . . .
Kentucky
Louisiana
Maine . . .
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Area covered and reciprocity requirement
Reciprocal, 13 states (AR, FL, GA, KY, LA,
MD, MS, NC, SC, TN, TX, VA, WV)
and DC
National, no reciprocity
National, no reciprocity
Reciprocal, 16 states (AL, FL, GA, KS, LA, MD,
MO, MS, NC, NE, OK, SC, TN, TX, VA,
WV) and DC
National, reciprocal
National, no reciprocity
National, reciprocal
National, reciprocal
Reciprocal, 11 states (AL, FL, GA, LA, MD,
MS, NC, SC, TN, VA, WV)
Reciprocal, 11 states (AL, AR, GA, LA, MD,
MS, NC, SC, TN, VA, WV) and DC
Reciprocal, 10 states (AL, FL, KY, LA, MD,
MS, NC, SC, TN, VA) and DC
National, no reciprocity
National, reciprocal
National, reciprocal
Reciprocal, 6 states (IL, MN, MO, NE, SD, WI)
Reciprocal, 6 states (AR, CO, IA, MO, NE, OK)
National, reciprocal
National, reciprocal
National, no reciprocity
Reciprocal, 14 states (AL, AR, DE, FL, GA, KY,
LA, MS, NC, PA, SC, TN, VA, WV)
and DC
National, reciprocal
National, reciprocal
Reciprocal, 16 states (CO, IA, ID, IL, IN, KS,
MI, MO, MT, ND, NE, OH, SD, WA, WI,
WY)
Reciprocal, 13 states (AL, AR, FL, GA, KY, LA,
MO, NC, SC, TN, TX, VA, WV)
State
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico . . .
New York
North Carolina 2
North Dakota ..
Ohio
Oklahoma
Oregon
Pennsylvania ..
Rhode Island . .
South Carolina
South Dakota .
Tennessee
Texas
Utah
Vermont
Virginia
Washington . .
West Virginia
Wisconsin . . .
Wyoming
Area covered and reciprocity requirement
Reciprocal, 8 states (AR, IA, IL, KS, KY, NE,
OK, TN)
Reciprocal, 7 states (CO, ID, MN, ND, SD, WI,
WY)
National, reciprocal
National, no reciprocity
National, no reciprocity
National, reciprocal
National, no reciprocity
National, reciprocal
Reciprocal, 13 states (AL, AR, FL, GA, KY, LA,
MD, MS, SC, TN, TX, VA, WV) and DC
National, reciprocal
National, reciprocal
National, no reciprocity for initital entry; after
initial entry, bank holding company must
be from state offering reciprocity or wait
4 years to expand
National, no reciprocity
National, reciprocal
National, reciprocal
Reciprocal, 12 states (AL, AR, FL, GA, KY, LA,
MD, MS, NC, TN, VA, WV) and DC
National, reciprocal
National, reciprocal
National, no reciprocity
National, no reciprocity
National, reciprocal
Reciprocal, 12 states (AL, AR, FL, GA, KY, LA,
MD, MS, NC, SC, TN, WV) and DC
National, reciprocal
National, reciprocal
Reciprocal, 8 states (IA, IL, IN, KY, MI, MN,
MO, OH)
National, no reciprocity
1. Not listed in the table is Hawaii, which has not enacted interstate bank
holding company legislation.
2. On July 1,1996, will become national, reciprocal.
SOURCE. Financial Structure Section, Division of Research and Statistics,
Board of Governors of the Federal Reserve System.
allow entry only by bank holding companies headquartered in a limited region require reciprocity for
their bank holding companies.
Although regions such as New England and the
southeast were initially thought of as interstate
compact areas, states in these regions did not
develop formal compacts or treaties among themselves. Instead, each state defined its region as it
thought best. Today, only states in the southeast are
a somewhat cohesive unit, generally allowing entry
from the other states in the region and generally
excluding entry from states outside the region.
Even within the southeast, however, the states
differ in their definition of "region." For example,
some of the states include Texas and Arkansas in
their region, but others do not. Also, some states
permit a holding company headquartered in their
region to enter only if a certain high percentage of
the holding company's deposits (in most cases,
80 percent) are in banks in states in the region.
With such a restriction, a state is able to prevent
entry by bank holding companies that are head-
quartered in its region but have more than a minor
part of their operations in states outside the region.
As the states have crafted their legislation, they
have placed a variety of other conditions on interstate banking activity.
• Many states restrict de novo entry. Out-ofstate bank holding companies may not enter these
states by forming a new bank, but must acquire a
bank that has been in existence for a certain period,
typically between three and six years. Although
few large bank holding companies have chosen to
enter new markets within their home state by forming a de novo bank, a desire to protect the franchise
value of existing bank charters has prompted many
states to erect barriers to the formation of new
banks by out-of-state holding companies.
• Eighteen states place a cap on the share of
state deposits that may be controlled by any single
banking organization (in most states, the cap
applies to in-state as well as out-of-state organizations). These restrictions were prompted by the
Interstate Banking: A Status Report
arguments of many opponents of interstate banking
that the entering out-of-state bank holding company would have major operating advantages over
local banking organizations or would use unfair
tactics to acquire an overwhelming share of the
state's deposits.
The cap on the share of state deposits that may
be held by any one organization ranges from as low
as 10 percent in Iowa to as high as 30 percent in
Minnesota. The base against which the cap is measured also differs among states: In some states the
cap is stated as a percentage of deposits at banks,
but in other states the base includes deposits at
thrift institutions and credit unions as well as banks.
• Some states promote specific forms of economic activity. For example, Delaware encourages
holding companies from other states to establish
banks in that state for the purpose of issuing credit
cards and processing credit card transactions. Many
of these special-purpose banks concentrate on their
defined purpose and do not compete generally with
local banks.
• A few states allow individual banks to "opt
out" of the interstate banking provisions, making
them ineligible for acquisition by an out-of-state
organization. In some cases, banks choosing to
avoid acquisition in this way are themselves not
allowed to acquire banks in other states.
• Some states differentiate between out-of-state
bank holding companies and foreign banking organizations. Foreign ownership of a full-service,
state-chartered commercial bank is prohibited in a
number of states. Other states require that a certain
percentage of the directors of a bank must be
citizens of the United States or impose requirements on foreign banks that are not applied to
banks chartered in the United States.
Although not all states allow nationwide entry
yet, the laws have become more permissive over
time. As more states allow entry from all states,
bank holding company expansion opportunities
increase. Treating each pair of states (and the District of Columbia) as a combination results in 2,550
possible two-state combinations (for example, Alabama entry into Alaska is one combination, and
Alaska entry into Alabama is a second). At this
time, entry is permitted in 1,570 (62 percent) of the
2,550 possible instances. The percentage would
increase significantly if the states in the southeast
1079
region were to allow nationwide entry. In mid1993, North Carolina established a mid-1996 date
for allowing nationwide entry; whether this change
will lead to similar action by other southeastern
states and to a breaking down of the regional
system is uncertain.
THE INTERSTATE BRANCHING LAWS
The likely final step in the geographic expansion of
banking will be interstate branch banking. Historically, both the federal government and the states
have prohibited interstate branch banking. However, eight states have enacted laws that permit
some degree of interstate branching for state nonmember banks (state-chartered banks that are not
members of the Federal Reserve System) (table 2).
The main reason the interstate branching laws have
been enacted is a belief among bankers that interstate branch banks could provide bank services at a lower cost than interstate bank holding
companies.
The process of deregulating interstate branch
banking will be different from that for interstate
bank holding companies. The Douglas Amendment
provided the states with the means of controlling
the expansion of interstate bank holding companies. However, the states do not have such wide
authority to control interstate expansion via branch
banking. The states can permit interstate branching
only by state-chartered banks that are not members
of the Federal Reserve System. The McFadden Act
of 1927 as amended, which sets the branching laws
for national banks and for state-chartered banks
that are members of the Federal Reserve System,
prohibits these banks from branching outside their
home state.
2.
State legislation on interstate branch banking,
November 1, 1993
State
Effective date
Alaska
Massachusetts
Nevada
January 1, 1994
Currently
Currently
New York
North Carolina
Currently
Currently
November 4, 1993
Currently
Currently
Rhode Island
Utah
Area covered
and reciprocity
requirement
National, reciprocal
National, reciprocal
Permitted in counties
with population
less than 100,000
National, reciprocal
National, reciprocal
National, reciprocal
National, reciprocal
National, no reciprocity
1080
Federal Reserve Bulletin • December 1993
If branching across state lines is to grow substantially, federal legislation granting interstate
branching powers to national banks and statechartered Federal Reserve System member banks
will be necessary. These banks typically are larger,
and have more branch offices, than state nonmember banks. At the end of 1992, 3,555 national
banks and 1,001 state member banks were in
operation; the average national bank had
$507.7 million in domestic banking assets and
7.9 branches, and the average state member
bank had $509.0 million in domestic banking
assets and 7.5 branches. In contrast, the averages
for the 6,873 insured state nonmember banks
were $120.6 million in domestic banking assets
and 2.7 branches. Because the nation's larger
banks, which have a greater propensity to
branch, are not state nonmember banks, interstate
branch banking is likely to be limited until the
McFadden Act is further amended or repealed—
unless banking organizations are willing to give up
their national charter or Federal Reserve System
membership.
A change in the McFadden Act could take one of
two courses. Under one approach, national banks
could be allowed to branch nationwide. Removal
of the McFadden Act's restrictions on national
bank branching would provide uniform branching
rights for all national banks, regardless of their
home state; state member banks would remain subject to the interstate branching restrictions imposed
by their home state. If national banks were permitted to branch across state lines, the states likely
would be pressured to provide equal opportunities
for state-chartered banks, and this pressure would
almost surely result eventually in changes in state
laws.
Alternatively, a change in the McFadden Act
could leave control over branching with the states,
as the Douglas Amendment left to the states the
decision about bank holding companies. This
option would follow the dual banking system's
approach to regulating branching within states.
National and state-chartered member banks would
be allowed to branch interstate to the same extent
that their home state allowed state nonmember
banks to branch, just as national and state member
banks are currently allowed to branch within a state
to the same extent that state-chartered nonmember
banks are allowed to branch within that state.
INTERSTATE EXPANSION:
WHICH APPROACH IS BEST?
Most of the benefits of interstate banking will be
achieved regardless of whether holding company
expansion across state lines or interstate branching
is ultimately the main vehicle for interstate expansion. Either way, interstate banking will increase
customer convenience and will enable banking
organizations to diversify their loan portfolios over
a wide geographic area. The removal of barriers to
entry into new banking markets will also help
promote and protect competition; the knowledge
that any other bank in the nation can, if it chooses,
enter its market area should serve as a significant
deterrent to anticompetitive practices on the part of
an existing bank.
The means by which these gains are to be
achieved have been discussed extensively. Many
observers believe that holding companies that own
more than one bank, whether within one state or in
multiple states, are merely a product of restrictions
on branch banking. By this line of thought, interstate bank holding companies serve only as a transition between a system that limits interstate banking and a full nationwide branch banking system.
Other observers believe that multibank holding
companies offer advantages and argue that such
companies would continue to exist even if full
interstate branch banking were permitted. Several
issues have emerged in the debate about the best
way to achieve interstate banking.
Customer
Service
The original issue in the discussion of the relative
merits of the two forms of interstate banking is that
of customer convenience. Although two banks may
be owned by the same holding company, they are
not "branches" of each other, and there are limits
on the services that one bank can provide to the
customers of the other. For example, a customer
moving from one state to another would most
likely need to move his or her account to the
subsidiary bank located in the new state of residence. Interstate branch banking would eliminate
that need; the customer would be able to obtain
services at any branch office of the bank. Opponents of branching, whether within one state or
Interstate Banking: A Status Report
across state lines, note that in this case only branch
office services would be available, instead of the
full line of services typically provided at the main
office of a bank.
The ability to provide customers with easy
access to cash from their account while they are
away from home was once a major argument for
allowing branching. This pressure for geographic
deregulation has been alleviated by the spread of
automated teller machine (ATM) networks that can
connect a consumer with his or her bank account
from machines all over the nation, and in a growing
number of foreign countries as well. Most likely,
no one bank would ever be able to provide a branch
office network comparable in size or coverage to
the major ATM networks. The development of
ATM networks has also reduced the magnitude of
one of the claimed advantages of banks that have
many branches; through ATM networks, a small
bank can provide customers with access to funds
over just as wide an area as can a large bank that
has many branches.
Cost of
Operation
Cost is a second issue in the debate about the best
approach to geographic expansion. Proponents of
interstate branching argue that it is much less
expensive to operate branches than to maintain a
large number of separately incorporated subsidiary banks. Branching should offer savings on
administrative costs because only one bank must be
examined and one set of regulatory reports filed,
and because the bank has only one board of
directors and one set of officers. Although a bank
holding company can centralize some operating
functions—such as personnel management and
training, data processing, and advertising—in the
parent organization, each bank is a separate legal
entity, and some functions must be performed at
each subsidiary.
Research findings raise questions about the claim
that the operating costs of branch banking organizations are indeed lower than those of multibank
holding companies. If one form of organization
were substantially less costly than an alternative
form, the difference would be reflected in profitability and long-run survival; the bank organized in
the less efficient manner would not be able to
1081
compete. The fact that, within states, some banks
choose the branching format while others choose
the multibank holding company format suggests
that there may be little cost difference between the
two approaches.
Even if there are cost differences between the
two formats, there may also be offsetting revenue
differences. The multibank format, though requiring separate boards of directors for each bank
owned by the holding company, may give the banking organization greater identification with the local
market; each bank is essentially a local bank rather
than a branch of an out-of-town bank. Likewise,
although multiple boards of directors must be paid,
the separate board may increase the bank's income
by bringing in new loan customers, and may lower
the bank's costs by providing information on the
local market that reduces loan losses.
Although questions concerning the least costly
means of providing interstate banking services are
interesting to researchers, different banking organizations may find different organizational structures
more efficient. Some organizations might choose to
have one bank with numerous branch offices in
many states. Others might choose to be multibank
holding companies having perhaps one bank in
each state and branches radiating from that bank. If
one form of organization were vastly superior to
others, the market would lead all banking organizations to adopt that structure. More likely, however,
cost differences are not significant across forms of
organization, and banks should be free to find the
structure that leads to the achievement of their
organizational goals. In the long run, a variety of
organizational structures probably would coexist.
Effect on Small
Banks
A third issue in the debate over interstate branch
banking versus interstate bank holding companies
is their potentially different impact on small banks.
Some small banks believe that requiring a new
organization to enter a community by opening a
full-service bank, rather than a branch, would
reduce the likelihood that the new organization
would be able to lower prices, cut services, and
drive out the small bank. However, this point of
view is undercut by the demonstrated ability of
many small banks to compete with large banks
1082
Federal Reserve Bulletin • December 1993
within their home state. Out-of-state banking organizations should pose no new problems. In addition, small banks typically earn a rate of return on
assets as high as, or higher than, that earned by
large banks, and there is no evidence that they are
any less competitive when they are competing with
a branch office than when they are competing with
a full-service bank.
Service to the Local
Community
Another issue in the debate is service to the local
community and the measurement of that service.
Community groups often argue that large banks
from outside the area drain funds from the local
community, collecting deposits but not extending
loans to local businesses and consumers. To an
extent, service to the local community is easier to
measure in the context of interstate bank holding
companies. Banks report on deposits held by individual branch offices once a year, but they are not
required to report loans originated on a branch
office basis. For that reason, monitoring of lending
at the local level (absent additional reporting
requirements) would be more difficult with branch
banking. In contrast, each bank owned by a holding
company must report quarterly on both its deposits
and its loans.
Funds flow into and out of communities according to the forces of supply and demand. Measuring
the flow is difficult because bank loans and investments can be local or nonlocal. For example, a
bank invests in its local community when it makes
loans to local businesses and consumers, but it
invests local deposits outside the market when it
purchases government securities or sells federal
funds.
Although the Community Reinvestment Act
requires banks to serve their community or communities, the market also plays a major role in this
cause. A bank or branch that does not serve its
community is likely to face competition from one
that provides better service. So long as new banking organizations are allowed to enter the market
and the costs of entry are low, the failure of existing banks to make worthwhile loans and to provide
other needed services to the community should
attract new banking institutions into the market.
New entry occurs via acquisition of an existing
bank, formation of a new branch, or the chartering
of a new bank. Since 1979, more than 3,500 new
banks have been chartered, though more than 5,000
existing banks have been absorbed by mergers; in
addition, more than 24,000 new branches have
been opened, while 10,500 existing branches have
been closed. These numbers suggest that the industry does respond to the needs of markets. If, as is
likely the case, entry via the opening of a new
branch is less costly than entry via the chartering of
a new bank, the achievement of community reinvestment objectives may be accomplished more
easily by lowering restrictions on branching.
The Dual Banking
System
Finally, the debate about the best way to achieve
interstate banking has implications for the preservation of the dual banking system. Many observers
believe that a bank with branches in more than one
state would be chartered as a national bank. If that
were the case, all the bank's branches would be
regulated by the federal authority, the Comptroller
of the Currency. If, on the other hand, a bank with
branches in more than one state were to be statechartered, it would be subject to regulation by each
of the states in which it had a branch. Although the
banking authorities of the various states could make
agreements as to how such an organization would
be examined and which state's regulations would
prevail, many issues would have to be resolved. An
individual bank, having a choice of regulators,
might find it less costly to deal with the national
bank regulators.
Although banks planning multistate branch networks might find it more efficient to be regulated as
national banks, the rate of formation of interstate
banks thus far suggests that relatively few large
multistate organizations will be formed. Because of
the apparent lack of significant scale economies, as
evidenced by direct studies of the subject as well as
the observed profitability of small banks, thousands
of banks will probably survive into the future.
Some of these institutions will likely choose to be
state-regulated banks, and the dual banking system
will continue.
In summary, several important issues will be
debated as policymakers continue to discuss potential changes in the geographic regulation of bank-
Interstate Banking: A Status Report
ing. The resolution of these issues will determine
the structure of the banking system of the future.
Regardless of the method of geographic expansion,
however, the current large number of financial
institutions and the evidence suggesting that
smaller institutions are surviving seem to ensure
that the U.S. banking system will continue to
be characterized by a large number of financial
institutions.
THE INTERSTATE BANKING
ORGANIZATIONS
This section turns from the issues involved in a
geographic restructuring of the banking system
to an examination of progress in the development
of interstate banking.
Interstate
Branch
Banking
The few state laws permitting interstate branch
banking have not yet been widely utilized. As
of June 30, 1992, 146 branches were being operated across the borders of states, territories, or
possessions, according to the Summary of Deposits, an annual survey conducted by the Federal
Deposit Insurance Corporation (FDIC) that
reports the amount of deposits each bank has at
each of its offices. These 146 branches represent
only a tiny fraction of the more than 56,000 branch
offices operated by commercial and savings banks
insured by the FDIC. Most of the 146 were
branches of U.S. banks headquartered in the United
States but operating branches in territories and
possessions of the United States (for example, a
branch on Guam of a bank headquartered in
California). Others were U.S. branches of banks
headquartered in a U.S. territory or possession
(for example, a New York branch of a Puerto Rican
bank).
Only 43 of the 146 branches were operating
across state lines. These branches exist as a result
of a variety of historical exceptions to the general
prohibitions: Some were grandfathered from earlier
periods, some were permitted as a means of resolving a bank failure or potential failure, and some are
branches of banks serving more than one military
installation.
Interstate Bank Holding
1083
Companies
Beyond the few interstate branches, the remaining
interstate banking activity is conducted through
multistate bank holding companies. As of June 30,
1993, 170 U.S. bank holding companies and
8 foreign bank holding companies owned banks in
more than one state. These 178 companies represent only 3.2 percent of the 5,509 bank holding
companies currently active in the United States.
Although many of these companies are major banking organizations, as suggested by their average
holdings of U.S. deposits of just over $8 billion, 71
of the 178 companies have domestic deposits of
less than $1 billion.
Many of the multistate bank holding
companies—111 of the 178—have subsidiary
banks in only two states, their home state and one
other state. Another 45 have banks in three or four
states, and 17 have subsidiaries in five to nine
states. Only 5 holding companies have subsidiary
banks in ten or more states, and 2 of these 5 were
among the grandfathered interstate bank holding
companies that had acquired some of their out-ofstate subsidiary banks before the Bank Holding
Company Act of 1956. Clearly, only a few banking
organizations have used the state interstate banking
laws to make significant progress toward becoming
truly nationwide banks.
EXTENT OF INTERSTATE
BANKING
Although the share of deposits held by out-of-state
bank holding companies nationwide has grown in
recent years, the record differs from state to state.
In some states, interstate banking activity is still
insignificant, but in others, nearly all deposits are
held by banks that are owned by out-of-state holding companies.
Share at the National
Level
The share of domestic commercial banking assets
controlled by interstate bank holding companies
has expanded substantially over time, though not as
rapidly as many observers, particularly the opponents of change, had expected. In February 1987,
6 percent of domestic banking assets were held by
1084
Federal Reserve Bulletin • December 1993
banks controlled by out-of-state bank holding companies, compared with 21.3 percent at the end of
1992. Looking at a different measure of activity, at
the end of June 1993, 22.8 percent of domestic
banking deposits were held by insured commercial
banks that were subsidiaries of out-of-state bank
holding companies.
The slower-than-expected increase in interstate
banking activity may be due to several factors. The
financial problems encountered by some of the
nation's largest banks during the period when many
states were enacting their interstate bank holding
company laws provide one explanation. Many of
the holding companies that had been expected to
expand rapidly did not have the resources to grow
at the anticipated rate. Therefore, as the condition
of the banking system continues to improve, additional interstate expansion can be expected.
Research on the post-acquisition performance of
bank holding companies provides another possible
explanation for the slower-than-expected growth in
interstate banking. Although some holding companies have been able to make numerous large acquisitions, integrate the new banks into their organizations, and in the process increase their profit rate,
studies of hundreds of mergers within and across
state boundaries suggest that, on average, mergers
do not increase the profitability or efficiency of the
combined firm. As noted earlier, studies have not
found the economies of scale that would require
firms to become very large in order to be competitive and profitable. Thus, smaller banks are not
under great pressure to be acquired; the vast majority can remain independent and still be profitable.
The slow growth of interstate banking may also
be explained by the fact that most acquisitions
must be negotiated. Only a relatively few bank
holding companies have publicly traded stock that
could be acquired in a hostile takeover. Therefore,
if the target firm does not want to be acquired, or is
not willing to accept the per share price offered by
the acquiring firm, the takeover attempt is usually
unsuccessful.
Share at the State
Level
State-by-state data reveal large differences among
states in the percentage of domestic banking deposits held by insured commercial banks that are sub-
3.
Share of domestic banking deposits held by insured
commercial banks owned by out-of-state bank
holding companies, by state, June 30, 19931
Percent
State
Share
Alabama
3.19
23.55
89.69
1.99
1.10
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
56.89
49.40
37.96
58.70
50.04
42.19
8.42
56.67
15.31
53.42
Kentucky
Louisiana
23.16
10.15
35.44
5.34
78.15
Maryland
Massachusetts ..
Michigan
Minnesota
Mississippi
24.60
29.81
3.58
3.15
2.18
Missouri
Montana
Nebraska
New Hampshire
.18
31.14
10.15
89.41
23.43
New Jersey
New Mexico . . .
New York
North Carolina .
North Dakota
21.12
32.93
6.46
.25
30.66
Ohio
Oklahoma
Pennsylvania . . .
Rhode Island :. . .
3.36
12.69
48.23
10.66
26.85
South Carolina .
South Dakota ..
Tennessee
Texas
Utah
64.15
52.96
29.46
53.01
27.45
Vermont
Virginia
Washington
West Virginia ..
Wisconsin
Wyoming
4.40
39.73
81.19
26.97
16.66
53.58
"
National average
11i fW
22.81
1. Based on Reports of Condition and Income for June 30, 1993, but
covers acquisitions approved and reported in the Federal Reserve Bulletin
through September 1993. Excludes data for foreign banks, except foreignowned bank holding companies that have bank subsidiaries in two or more
states; also excludes special-purpose banks, nonbank banks, and nondeposit
trust companies.
sidiaries of out-of-state bank holding companies. In
four states, more than 75 percent of domestic bank-
Interstate Banking: A Status Report
ing deposits are held by banks owned by out-ofstate holding companies (table 3). In nine states,
50 percent to 75 percent of deposits are under
out-of-state ownership; in twenty-five states,
10 percent to 50 percent; and in the remaining
thirteen states, less than 10 percent.
The states in which banks owned by out-of-state
holding companies hold more than 75 percent of
domestic banking deposits are Arizona, Maine,
Nevada, and Washington. Before they allowed
interstate banking, these four states had relatively
few banking organizations and relatively few large
banking organizations, and a relatively high percentage of deposits were held by the largest banks.
Thus, only a few acquisitions by out-of-state firms
were required to bring more than 75 percent of
banking deposits under out-of-state control.
Bank failures are another important factor
explaining levels of out-of-state ownership. In a
few states, most notably Texas, the relatively high
percentage of deposits held by out-of-state holding
companies (53 percent) is due in large part to the
failure of one or more major banking organizations
in the state and their subsequent acquisition by
out-of-state holding companies.
Several possible explanations can be offered for
the low percentages of out-of-state control of
deposits in some states. Some states may be viewed
as not particularly attractive for entry because of
their low income levels or low rates of economic
growth. Other states, such as New York, are home
to many very large banks; few out-of-state entrants
would be able to acquire one of these large banks
and gain a large share of the state's deposits.
Finally, in some of the states the largest banks hold
relatively small shares of total deposits; several of
the largest banks in those states could be acquired
without transferring a large percentage of total
deposits in the states to out-of-state firms.
Thirty-nine states (including the District of
Columbia) are home to at least one banking organization that has acquired an out-of-state subsidiary
(table 4). In most of these states, the ratio of
out-of-state deposits to total deposits held by the
state's multistate bank holding companies is not
particularly high. In a few states, such as Minnesota, North Carolina, Georgia, Rhode Island, and
Ohio, the state's multistate banking organizations
obtain a large share of their total deposits through
their out-of-state subsidiaries.
4.
1085
Multistate bank holding companies, by state,
Jupe 30, 1993
Number
Total
domestic
deposits
(billions of
dollars)
Share of total
domestic
deposits held
by out-of-state
subsidiary
banks
(percent)
5
4
5
1
1
30.72
4.99
183.75
15.58
3.67
26.85
20.84
35.01
46.98
13.35
2
7
1
1
14
32.35
38.66
4.87
5.37
58.43
3.49
60.87
1.64
48.79
13.18
5
3
5
3
7
6.22
.67
6.22
3.92
24.52
24.60
22.42
20.28
8.52
16.64
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
3
6
8
4
11
29.20
80.65
51.07
9.55
47.40
19.32
29.65
55.00
21.99
33.38
Nebraska
New Jersey
New Mexico
New York
North Carolina
8
7
2
11
7
3.81
52.88
3.35
243.25
166.40
12.31
29.80
43.02
23.70
74.23
1
10
1
1
7
1.05
126.09
.18
15.10
78.95
68.57
48.97
27.78
48.54
18.07
Rhode Island
South Carolina
South Dakota
Tennessee
Utah
1
1
1
5
2
31.41
.38
.23
11.84
8.37
83.06
65.79
13.04
8.07
32.38
Virginia
Washington
West Virginia
Wisconsin
4
2
5
6
24.84
1.11
2.70
19.73
22.95
10.81
10.44
23.18
State
Alabama
Arkansas
California
Connecticut
District of Columbia . . .
Florida
Hawaii
Idaho
Illinois
Indiana
Kentucky
Maryland
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
; •
:
SOURCES. Reports of Condition and Income, June 30, 1993, and NIC (the
Federal Reserve's National Information Center for Systemwide Structure and
Financial Information).
INTERSTATE BANKING
AND DEPOSIT CONCENTRATION
Critics of the concept of interstate banking have
argued that the removal of traditional barriers to
nationwide banking would result in a more concentrated banking system. Over time, they have maintained, the number of banks would decline and the
remaining banks would control an increasingly
large share of total banking system deposits. In this
more concentrated system, the users of bank
1086
Federal Reserve Bulletin • December 1993
services—consumers and businesses—would be
harmed because the few remaining firms would be
free to charge higher prices than would prevail in a
more competitive environment.
Banking concentration has been examined on a
number of levels. Nationwide concentration has
been of historical interest because of a concern
about the overall control of credit in the United
States that dates back to the earliest years of the
nation. Concentration at the state level has been
examined because, traditionally, banking organizations could expand only within the boundaries of
their home state. As these barriers are broken
down, the relevance of state concentration
decreases. Concentration at the local level is of
paramount concern because the local banking market is where most bank customers—such as households and small businesses—seek out financial
services. To the extent that these customers are
restricted to the local banking market, the preservation of unconcentrated markets that provide a
high level of competition for banking services is
critical.
In discussing banking concentration, especially
changes in concentration over time, it is important
to note that the concentration data reported in this
section are based on insured commercial banks.
The numbers do not capture any increase in financial activity by other depository and nondepository
institutions. To the extent that other institutions
perform financial services that were once the exclusive province of commercial banks, an increase in a
concentration ratio that is based solely on banking
will almost surely overstate the actual change in
financial concentration.
National
Concentration
At the national level, banking has become much
more concentrated over the period during
which interstate banks have been formed. The
increased concentration is particularly noticeable
for the nation's 100 largest insured commercial
banking organizations (as measured by volume of
deposits). For several decades, the percentage of
total domestic deposits held by the 100 largest
banking organizations hovered just below 50 percent (table 5). Now, that percentage is 64 percent.
The rise is a result of both interstate mergers asso-
5.
Shares of domestic commercial banking deposits held
by largest U.S. banking organizations, selected years,
1960-93 1
Percent
Year
Largest 10
Largest 25
Largest 50
Largest 100
1960
1965
1970
1975
1980
20.4
21.3
20.0
19.9
18.6
31.7
32.7
30.8
30.6
29.1
40.3
40.9
38.9
38.7
37.1
49.6
49.8
48.1
48.2
46.8
1985
1986
1987
1988
1989
17.0
17.6
18.1
19.2
19.9
28.5
29.6
31.1
33.2
34.1
40.5
42.4
44.1
47.5
48.1
52.6
55.6
57.4
59.9
60.5
1990
1991
1992
1993
20.0
22.7
24.1
25.0
34.9
37.5
39.2
40.4
48.9
49.6
51.7
53.1
61.4
61.3
62.6
64.0
1. Banking organizations are ranked by volume of domestic commercial
banking deposits. Rankings and shares for 1960-92 are as of December 31;
for 1993, as of June 30.
SOURCES. Reports of Condition and Income and NIC database.
ciated with the formation and growth of multistate
bank holding companies and large mergers in
which the merged banks were headquartered in the
same state.
The percentage of domestic deposits held by
the ten largest banking organizations has risen
more slowly. As recently as 1990, the ten
largest organizations held a smaller percentage of
deposits than they did in 1960. Over the past two
and one-half years, however, the ten largest banking organizations have increased their share of
deposits. This recent growth reflects several
events. Some of the fastest growing organizations have moved into the top ten, replacing banks
that were acquired by other bank holding companies or that, in spite of their size, were not able to
maintain their relative rank in a dynamic industry.
In addition, improvements in their financial condition removed a barrier to the expansion of some
major bank holding companies. Finally, mergers
occurred between some very large banking
organizations.
The relative importance of in-state and interstate
acquisitions in the increase in national concentration can be seen in data on turnover, over time,
among the 100 largest banking organizations.
Beginning with the largest 100 organizations as of
June 1985 and tracing these firms forward in
time, 49 had been acquired by mid-1993. Of the
49 firms, 34 were acquired by an out-of-state bank
Interstate Banking: A Status Report
holding company, while 15 were acquired by
another firm in their home state.
Concentration
at the State Level
Concentration at the state level has also increased
substantially. Table 6 gives data for 1980 and mid1993, by state, on the shares of domestic banking
deposits in the state held by the three largest banking organizations, individually and as a group. In
eleven states and the District of Columbia, the
three-firm share decreased; in the other states, the
share increased. The average of the state three-firm
concentration ratios increased from 42.0 percent in
1980 to 50.5 percent in June 1993.
Table 6 also identifies the banking organizations
among the largest three in each state that are owned
by out-of-state bank holding companies. In 1980,
these organizations were the subsidiaries of the
multistate bank holding companies that were grandfathered by the Bank Holding Company Act of
1956. By the end of June 1993, the number of
instances in which one or more of the three largest
firms were controlled by an out-of-state bank holding company had increased substantially.
Although in many states one or more of the
three largest banks are owned by out-of-state
bank holding companies, this does not mean that
concentration has increased as a result of interstate banking. It simply means that an out-of-state
owner has replaced the in-state owner of the bank;
the bank's share of state deposits has not necessarily changed. Thus, to the extent that out-of-state
firms have merely gained control of shares previously held by in-state firms, interstate banking
has not led to increased concentration at the state
level. Concentration in a state increases when the
out-of-state firm is able to increase the share of
state deposits held by its subsidiary, or when the
out-of-state firm subsequently acquires additional
banks in the state so as to increase its state share.
Evidence suggests that firms entering new markets
by acquiring large banks in the market are not, on
average, able to increase the market share of the
acquired bank.
The data in tables 3 and 6 appear to suggest a
positive relationship between the percentage of outof-state ownership and the level of state concentration. Many of the states where concentration is
1087
high also have a relatively high level of out-of-state
ownership. The high level of statewide concentration may have contributed to a high percentage of
out-of-state ownership, because in the highly concentrated states only a few acquisitions were necessary to bring a high percentage of the state's deposits under the control of out-of-state bank holding
companies.
Local Banking Market
Concentration
Most bank customers are concerned with competition at the local level, rather than the national or
state level. A large business might seek banking
services over a wide geographic area, but a household or small business typically does not search
the nation or the state for banking services. The
relevant banking market for the vast majority of
households and small businesses is a local banking
market.
The 1989 Survey of Consumer Finances demonstrated the importance of the local market to households.3 Nearly 96 percent of the households surveyed indicated that their primary financial institution was a local bank, thrift institution, or credit
union. Fewer than 20 percent of the households
reported using a nonlocal financial institution for
any services.
The importance of the local market for small
businesses was revealed by the 1988-89 National
Survey of Small Business Finances.4 The survey
concluded that the vast majority of small businesses rely on local firms for the bulk of their
financial needs. Only 20 percent of the firms surveyed reported using a financial institution located
thirty miles or more from the firm's home office.
Because households and small businesses rely so
heavily on local financial institutions, the local
banking market is generally considered the appropriate market for analysis under antitrust laws.
Although a more exact definition of the market is
3. Gergory E. Elliehausen and John D. Wolken, "Banking Markets and the Use of Financial Services by Households," Federal
Reserve Bulletin, vol. 78 (March 1992), pp. 169-81.
4. Gregory E. Elliehausen and John D. Wolken, "Banking Markets and the Use of Financial Services by Small and Medium-Sized
Businesses," Federal Reserve Bulletin, vol. 76 (October 1990),
pp. 801-17.
1088
6.
Federal Reserve Bulletin • December 1993
Shares of domestic commercial banking deposits held by largest banking organizations in state,
by state, 1980 and 19931
Percent
State
Largest
organization
Second largest
organization
Third largest
organization
Sum of
three largest
organizations
Change in
share for
three largest
organizations,
1980 to 1993
1980
1993
1980
1993
1980
1993
1980
1993
Alabama
Alaska
Arizona
Arkansas
California
15.3
30.9
42.1
6.7
35.1
18.3
42.3
31.5*
13.1
36.5
11.6
22.5
27.3*
3.2
12.9
17.6
25.5
25.0*
10.3
17.3
11.3
10.3
15.5
3.1
10.0
17.2
18.6*
21.7*
4.7
7.2
38.2
63.7
84.8
13.0
58.0
53.1
86.3
78.2
28.0
61.1
14.9
22.6
-6.6
15.0
3.1
Colorado
Connecticut
Delaware
District of Columbia
Florida
15.8
19.1
34.3
32.3
10.5
24.1*
32.3
16.2
33.1
26.1
15.3
18.7
21.8
28.4
9.2
16.6*
24.3*
15.5*
21.4*
17.9*
9.9
9.3
18.1
10.5
7.3
9.1*
9.4**
11.0*
12.7*
14.0*
41.1
47.1
74.1
71.2
27.0
49.7
66.1
42.6
67.2
58.0
8.6
19.0
-31.5
-4.0
31.0
Georgia
Hawaii
Idaho
Illinois
Indiana
16.5
38.6
36.6
16.8
6.4
13.6*
42.5
35.0
13.5
18.3*
11.9
32.5
26.0*
12.0
6.1
13.1
37.1
28.3*
7.1
11.7*
11.5
8.2**
11.6*
4.5
4.9
12.9*
9.3**
12.5*
5.2**
8.5*
39.8
79.2
74.2
33.3
17.4
39.5
88.9
75.8
25.8
38.5
-.3
9.7
1.6
-7.5
21.1
Iowa
Kansas
Kentucky
Louisiana
Maine
7.4*
4.7
9.5
6.7
18.4
12.3*
14.9
12.3*
15.1
32.3*
5.9
2.7
8.9
4.1
16.5
6.7*
4.1*
10.8*
12.1
28.3*
5.3
1.8
4.4
3.8
14.0
5.2
3.8
10.3
9.5
14.2*
18.6
9.1
22.8
14.6
48.9
24.1
22.8
33.4
36.6
74.8
5.4
13.7
10.6
22.0
25.9
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
20.9
23.9
15.4
26.1
12.1
19.2
23.8
19.9
25.6
16.2
13.3
12.6
11.6
24.8
10.9
12 9**
15.7
19.3
22.4
15.1
10.7
10.9
9.4
2.4
4.2
10.4
13.1*
14.6
2.6
8.6
44.9
47.5
36.4
53.3
27.2
42.4
52.7
53.8
50.5
39.9
-2.5
5.2
17.4
-2.8
12.6
Missouri
Montana
Nebraska
Nevada
New Hampshire
11.1
24.0*
7.8*
47.5*
15.5
21.9
16.9*
14.8
34.6*
23.4*
10.0
12.0*
6.5
22.4
11.7
12.2
11.0*
11.8
32.9*
18.7
8.5
5.9
5.1
13.6*
7.3
10.9
10.3
10.0*
9.6*
14.9
29.5
41.9
19.4
83.5
34.5
45.0
38.2
36.6
77.1
57.0
15.5
-3.7
17.2
-6.4
22.5
New Jersey
New Mexico
New York
North Carolina
North Dakota
8.5
23.1
15.3
19.9
16.2*
20.4**
25.1*
20.2
18.8
13.7*
8.4
11.9*
12.7
19.3
15.8*
11.2
14.7
15.1
18.4
10.7*
7.9
8.9
12.2
11.9
6.8*
10.5
12.7
14.0
6.3*
24.7
43.9
40.1
51.2
38.8
42.1
50.8
48.0
51.3
30.7
17.3
6.8
7.9
.1
-8.1
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
9.2
7.8
34.4
12.3
41.5
15.9
9.1
37.8
16.7
57.5
8.7
6.4
33.8*
6.3
25.1
14.9
7.0
24.9*
15.0
28.2*
7.1
4.7
7.8
4.7
24.0
14.5
4.8*
12.3*
8.7
8.3**
25.0
18.9
76.0
23.2
90.6
45.3
20.9
75.0
40.3
94.0
20.3
2.0
-1.0
17.1
3.4
South Carolina
South Dakota
Tennessee
Texas
Utah
19.1
23.0*
11.5
9.0
27.8
24.5*
26.7*
15.0
16.4*
31.5
13.4
17.0*
8.1
8.2
20.6
24.0*
18.3*
12.1
11.8*
23.6
12.8
3.2
7.9
8.1
11.2*
8.6*
4.4*
10.2*
10.0*
9.1*
45.4
43.2
27.5
25.3
59.6
57.0
49.5
37.2
38.2
64.2
11.7
6.2
9.7
12.9
4.6
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
17.2
13.7
37.0
3.8
13.3
16.0
27.0
16.4*
35.8*
14.3*
15.8
23.7*
13.2
10.8
18.7
2.6
8.3
12.9*
20.9
14.6
17.0*
14.2
13.4
7.9*
12.8
10.1
8.6*
1.8
7.0
9.7
15.4
12.3*
14.4*
7.7
10.5*
6.8
43.2
34.5
64.3
8.2
28.7
38.7
63.2
43.4
67.1
36.1
39.7
38.4
20.0
8.9
2.8
28.0
1. Banking organizations are ranked by volume of domestic commercial
banking deposits. Rankings and shares for 1980 are as of December 31; for
1993, as of June 30. Components may not sum to totals because of rounding.
necessary when an application for a specific bank
merger or bank holding company acquisition is
being reviewed, the local banking market is
11.0
11.0
-.3
* Out-of-state bank holding company.
** Foreign bank holding company.
SOURCES. NIC database and Reports of Condition and Income.
frequently approximated by a metropolitan statistical area, as defined by the federal government, or
by a nonmetropolitan county.
Interstate Banking: A Status Report
7.
Average share of domestic commercial banking
deposits held by the three largest banking
organizations in metropolitan statistical areas and
nonmetropolitan counties, 1976-92
Metropolitan statistical
areas
Nonmetropolitan
counties
1976
1977
1978
1979
68.5
67.9
67.4
66.8
90.0
89.9
89.9
89.7
1980
1981
1982
1983
1984
66.4
66.1
65.9
66.0
66.4
89.6
89.4
89.4
89.4
89.4
1985
1986
1987
1988
1989
66.7
67.5
67.7
67.8
67.5
89.5
89.5
89.5
89.7
89.7
1990
1991
1992
67.3
66.7
67.5
89.6
89.3
89.2
Year
lljfjgfff
SOURCE. Federal Deposit Insurance Corporation, Summary of Deposits,
1976-92.
These local banking markets have not, on average, become more concentrated over recent years
(table 7). In spite of the thousands of mergers that
have occurred, the average concentration in local
banking markets has remained remarkably stable
over time. Because many of the banks involved in
1089
mergers had not been competitors in the same local
banking market, their combination did not increase
local market concentration. In some cases in which
the merging banks were major competitors in
the same local market, divestitures were used to
limit the impact of the merger on local market
concentration.
SUMMARY
Nearly all states now have some form of law permitting interstate bank holding companies, some
have laws allowing interstate branch banking, and
more will be considering the liberalization of their
laws in coming years. The debate in the next few
years will likely focus on the relative merits of
interstate bank holding companies and interstate
branch banking as a means of geographic expansion. Today, however, there are still relatively few
interstate banking organizations. Although the
share of deposits owned by out-of-state bank holding companies has grown substantially, it is less
than many had predicted. Interstate banking has
contributed to an increase in the concentration
of deposits at the national level, but, thus far,
local banking markets have not become more
concentrated.
•
1090
Industrial Production and Capacity Utilization
for September 1993
Released for publication
October 15
Industrial production increased 0.2 percent in September; the revised index showed gains of 0.1 percent in August and 0.2 percent in July. The production of motor vehicles and parts rose nearly
4 percent last month, boosting output in the related
categories of durable consumer goods, transit
equipment, and durable goods materials. Utilities
output, which had risen sharply over the previous
three months because of the extreme weather, fell
back to a more normal level in September and
Industrial production indexes
Twelve-month percent change
1988
1989
1990
1991
1992
Twelve-month percent change
1993
1988
1989
1990
1991
1992
1993
Capacity and industrial production
Ratio scale, 1987 production = 100
— Total industry
Ratio scale, 1987 production = 100
— 140
Capacity
— Manufacturing
_»- 140
Capacity
120
120
^
100
Production
80
1
1
1
^_
y ^
1
1
1
1
100
Production
1
1
1
1
80
1
Percent of capacity
I
1
1
1
Percent of capacity
Total industry
Manufacturing
90
90
Utilization
^
i
1981
i
i
1983
—
Utilization
^
-
80
80
70
70
i
1985
1987
1989
1991
1993
1981
1983
1985
All series are seasonally adjusted. Latest series, September. Capacity is an index of potential industrial production.
1987
1989
I l l
1991
1993
1091
Industrial production and capacity utilization1
Industrial production, index, 1987=100
Percentage change
1993
Category
1993 2
Juner
July'
Aug. r
Sept. f
Total
110.5
110.7
110.9
111.0
Previous estimate
110.4
110.9
111.1
Major market groups
Products, total 3
Consumer goods . . .
Business equipment
Construction supplies
Materials
109.4
107.3
136.1
96.8
112.1
109.8
107.5
136.6
98.2
112.0
109.8
107.2
137.1
98.3
112.4
Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities
111.3
114.6
107.2
98.0
114.9
111.5
115.2
106.9
97.2
116.2
111.6
115.4
107.0
97.1
117.3
Juner
July1
Aug. 1
.2
.2
.1
.2
.4
.2
110.0
107.2
138.3
98.9
112.5
.1
.0
.5
-.9
.5
.4
.2
.4
1.5
.0
112.0
116.1
107.1
98.2
113.6
.0
-.2
.3
.7
2.5
.2
.6
-.3
-.8
1.1
Sept. i
.2
4.6
.0
-.3
.4
.1
.3
.2
.0
.8
.6
.1
4.4
2.7
10.6
6.4
4.8
.1
.1
.1
-.1
.9
.4
.6
.1
1.1
-3.1
4.9
7.3
1.8
1.1
2.2
MEMO
Capacity utilization, percent
1992
Average,
1967-92
Low,
1982
High,
1988-89
Sept. 1992
to
Sept. 1993
1993
Sept.
Juner
Julyr
Aug. r
Sept.P
Capacity,
percentage
change,
Sept. 1992
to
Sept. 1993
Total
81.9
71.8
84.8
7 93
81.5
81.6
81.6
81.6
1.6
Manufacturing
Advanced processing
Primary processing .
Mining
Utilities
81.2
80.7
82.2
87.4
86.7
70.0
71.4
66.8
80.6
76.2
85.1
83.3
89.1
87.0
92.6
78.4
77.0
81.7
86.5
84.5
80.6
78.9
84.5
87.9
86.6
80.6
79.0
84.6
87.3
87.5
80.6
78.9
84.7
87.2
88.3
80.8
79.1
84.7
88.3
85.4
1.8
2.2
.9
-.8
1.1
1. Data seasonally adjusted or calculated from seasonally adjusted
monthly data.
2. Change from preceding month.
reduced the output of nondurable consumer goods
and energy materials. The production of business
equipment and construction supplies rose again,
while the output of defense and space equipment
was curtailed further. At 111.0 percent of its 1987
annual average, total industrial production was
4.6 percent above its year-earlier level, but growth
in the third quarter was 1.8 percent at an annual
rate. Utilization of total industrial capacity, at
81.6 percent, has been essentially unchanged since
February.
When analyzed by market group, the data show
that the output of consumer goods excluding utilities and motor vehicles has changed little since
February. Over this period, the production of durables edged up, but the output of nondurables
declined, in part, because of weakness in clothing
output.
3. Contains components in addition to those shown,
r Revised,
p Preliminary.
In August and September, the production of business equipment other than motor vehicles grew an
average of about 0.4 percent per month, whereas it
grew at nearly twice that rate over the preceding
three months. The deceleration in growth was concentrated in information processing equipment and
industrial equipment. Even so, production of business equipment has grown more than 10 percent
over the past year; about half of this gain reflected
increased production of computers.
The output of materials, held down by the
decline in electricity generation, was about
unchanged last month. Along with the gains in
parts for motor vehicles and for computers, a
rebound in iron ore mining following the settlement of a strike boosted production of durable
goods materials. Output of nondurable materials
also rose, led by gains in textiles and chemicals.
1092
Federal Reserve Bulletin • December 1993
When analyzed by industry group, the data show
that manufacturing output increased 0.4 percent.
The rise in production of motor vehicles and parts
accounted for about one-half of the overall gain in
manufacturing. Output also grew significantly in
machinery, petroleum products, and constructionrelated industries such as lumber, but production of
steel and apparel fell.
The utilization of manufacturing capacity, at
80.8 percent, has changed little over the past
six months. The operating rate for advancedprocessing industries increased to 79.1 percent in
September but was still a bit below levels seen last
spring; apart from machinery and furniture, operating rates for most major industries remained below
their April levels. The rate for primary-processing
industries, at 84.7 percent, also was unchanged but
has risen since last spring; the only major industries that have not shown improvement over this
period are paper, fabricated metals, and rubber and
plastic products.
The production at mines rose 1.1 percent; the
iron ore strike ended, and coal output rose sharply
despite an ongoing strike.
•
1093
Statements to the Congress
Statement by John P. LaWare, Member, Board of
Governors of the Federal Reserve System, before the
Committee on Banking, Housing, and Urban Affairs,
U.S. Senate, October 5, 1993
I am pleased to appear on behalf of the Federal
Reserve Board to discuss the interstate banking and
insurance provisions of S.543 as approved by the
Senate in 1991. For many years, the Board has believed that full interstate banking would benefit bank
customers and lead to a stronger and safer banking
system, and it has supported the thrust of various
legislative initiatives to accomplish that goal. Similarly, the Board has long been on record in support of
legislation to update the nation's banking statutes to
allow banks to adapt to changes in the financial services marketplace and to better serve consumers. In
this context, we have consistently supported the provision of insurance activities by banks and bank holding companies. Thus, we support the provisions of
S.543, which would permit national banks to engage in
insurance agency activities permissible for state banks
but oppose other provisions that limit bank insurance
activities.
This morning, besides making some specific comments about the 1991 legislation, I would like to
explain the reasons for our support of interstate banking and provide information about the current status of
interstate activities. To assist the committee in its
deliberations, the appendixes to my statement provide
an up-to-date summary of state laws regarding interstate banking, a discussion of recent trends, and
several statistical tables providing information relevant to the issue. 1
NATIONWIDE
BANKING
It is perhaps best to start with the observation that
interstate banking is now a reality and has been for
some time. For years, banks—both domestic and
foreign—have maintained loan production offices outside their home states, have issued credit cards nationally, have made loans from their head offices to
1. The attachments to this statement are available from Publications
Services, Board of Governors of the Federal Reserve System, Washington, DC 20551.
borrowers around the nation and the world, have
solicited deposits throughout the country, have engaged in a trust business for customers domiciled
outside the banks' local markets, and—through bank
holding companies—have operated mortgage banking,
consumer finance, and similar affiliates without geographic restraint. Since the early 1980s, moreover,
individual states have modified their statutes to permit—under the Douglas Amendment to the Bank
Holding Company Act—out-of-state bank holding
companies to own banks within their jurisdiction.
Indeed, today only Hawaii prohibits bank ownership
by out-of-state bank holding companies.
Although state legislatures have supported interstate banking and more than one-fifth of domestic
banking assets are already held in banks controlled by
out-of-state bank holding companies, the Board believes that there is a need for congressional action. Our
dual banking system has a desirable genius for resisting government-imposed uniformity, but the large
number of significant differences among the states
impedes the interstate delivery of services to the
public and reduces the efficiency of the banking business. The differences in state laws are discussed in the
first appendix to this statement, but notable examples
include restrictions on the home state of banking
organizations allowed to enter some states, reciprocity
requirements in some other states, the prohibition of
de novo entry, and variable caps on the deposit shares
of new entrants in still other states. In short, the states
have made clear that they accept—and perhaps prefer—interstate banking, and their legislatures have
made interstate banking a substantial reality today, but
actions at the state level have resulted in a hodgepodge
of laws and regulations that permit interstate banking
but in an inefficient and high-cost manner.
Restrictions on both intra- and interstate banking
were imposed in an era in which commercial banks
were the dominant provider of financial services to
households and businesses. These restrictions were
clearly intended to limit competition and thereby insulate local banks from market pressures. Over time,
branching and other geographic restraints became part
of the totality of regulations designed to protect bank
profits through limitations on entry and deposit rate
competition. In recent years, however, banks have
seen their market position eroded by nonbank provid-
1094
Federal Reserve Bulletin • December 1993
ers of financial services that are not subject to banklike
regulation. Indeed, the unwinding of the historically
protected position of banks, such as the removal of
deposit rate ceilings, has proceeded on most fronts as
a lagged response to market developments that had
themselves been encouraged by those same restraints
on banks. Attempts to maintain antiquated geographic
restrictions will only protect inefficient banks, disadvantage users of bank services, particularly those like
small businesses that still have relatively few alternative sources of credit, encourage the entry of less
regulated nonbank competitors, and increase the potential stress on the safety net as the long-run viability
of banks is undermined.
Action to provide more uniform rules for interstate
banking would provide several public benefits. First,
reducing obsolete barriers to entry would increase
actual and potential competition in the provision of
financial services to those customers that for one
reason or another, have, at best, very limited access to
out-of-market banks, nonbank lenders, or the securities markets. Bank customers would benefit from the
resulting lower price's for credit, higher rates on their
deposits, and improved quality and easier access to
banking and related services. In addition, a significant
proportion of our citizens live in areas in which state
borders intersect; interstate banking would provide
households and businesses in these regions with significantly increased convenience in conducting their
banking business.
Second, greater opportunities for geographic diversification through interstate banking could help to
restore a level of stability to the banking system that
once was accomplished, in part, through protection of
local banks from competition. Although increased
competition from nonbanks has undermined the protection intended to be provided to banks through
controlled entry and geographic constraints, those
same restrictions have made it more difficult for banks
to diversify their risks and seek out new opportunities.
Thus, many banks operating in a region that has
experienced a local economic contraction have been
neither protected by limits on bank competition nor
able to avoid the disastrous effects of dependence on
one market for both deposits and loans. Being able to
cushion losses in one region with earnings in others
would make banks better able to contribute to the
recovery of their local economy, and more diversified
banks would expose the federal safety net to fewer
losses. Clearly, greater geographic diversification
would have provided more stability over the past
decade to banks operating in the agricultural areas of
the Midwest, the oil patch of the Southwest, and the
high tech and defense regions of N e w England and
California. In short, the elimination of geographic
restraints would provide an important tool in diversifying individual bank risk, providing for stability of the
banking system, and improving the flow of credit to
local economies under duress.
Third, interstate banking would facilitate the allocation of resources to regions that offer both safety and
higher returns and assist in the reduction of e x c e s s
banking capacity. The United States will continue to
be a dynamic economy with both expanding and
declining industries and expanding and temporarily
declining regions. Banks pinned by artificial geographic restrictions to local areas experiencing difficulties have no choice but to pull in their horns, as it
were, to protect their own viability. Only through
interbank credit extensions and loan participations can
they diversify their portfolio and make loans to borrowers unaffected by the depressed local economy. In
fact, many of these institutions no doubt tend to have
lower loan-to-deposit ratios, in part, because of their
inability to find bankable local credits. N o t e that,
given banks' long-run interest in geographic diversification, banking offices would still remain in regions
experiencing difficulty but would be in a stronger
position to finance local expansion when growth opportunities return.
COMMENTS ON
S.543
The benefits from removal of restrictions on geographic expansion could occur through either the
acquisition or de novo chartering of bank subsidiaries
of bank holding companies headquartered in another
state or through the establishment of branches of a
bank in another state. All of the interstate banking
laws enacted by the states provide for interstate banking through bank subsidiaries of bank holding companies, although some states permit interstate banking
through branches for state nonmember banks. S.543
would authorize interstate banking on a nationwide
basis through the acquisition of existing banks one
year after enactment. The Board strongly supports
such statutory change and would recommend that
the Congress authorize the interstate acquisition of
de novo banks as well. Authorizing de novo banking
should enhance competition in many markets, although we recognize that most expansion would occur
through acquisition. The Board also supports removing entirely the McFadden Act's restrictions on interstate branching for national and state member banks.
This would permit banking organizations to choose
between alternative combinations of subsidiary banks
and branches in the manner that best balances their
own perceived costs and benefits. S.543 takes the
intermediate step of requiring the states to individually
Statements
authorize interstate branching outside the holding
company structure. The Board believes that the positive experience with interstate banking, and the efficiencies that can be gained by some institutions
through branching, provide a compelling case for
authorizing interstate branching without further delay.
Moreover, this cautious approach to branching could
put independent banks at a competitive disadvantage
in branching against banks in holding companies.
A limited number of studies comparing the costs of
operating an interstate banking network with the costs
of operating a branching system have been done.
Those studies suggest that, on average, both delivery
systems have about the same cost structure. However,
this finding is not inconsistent with the view that for
some banks branching may have the lowest cost
structure. Indeed, as a matter of logic, the Board
believes that the cost savings from elimination of
separate boards of directors, separate management
teams, and separate capitalization for banks that could
be branches would be significant for some organizations. In any event, we believe that no good public
policy purpose is served by restraining the freedom of
choice of individual banking organizations that know
best what is the least cost operating structure for them.
We therefore support the provision of S.543 that
would permit interstate banking offices to be converted to branches should a banking organization
choose to do so.
We also support the bill's approach of extending
interstate branching powers only to those banks that
are at least adequately capitalized and adequately
managed (which we assume means having acceptable
supervisory ratings). In the Board's testimony during
the drafting of and debate about the Federal Deposit
Insurance Corporation Improvement Act of 1991, the
Board supported the principle of expanded activities
only for strongly capitalized banks. In drafting recent
regulations, the banking agencies have attempted,
when possible, to apply this principle. A policy that
rewards stronger banks is a desirable supplement to
the regulatory limits imposed on weaker banks. Provisions authorizing the regulators to approve interstate
combinations to improve the financial condition of
critically undercapitalized bank holding companies are
also desirable.
State supervisors would no doubt prefer interstate
operations through separate banks in each state because it is much easier for them to supervise the
activities of a single organization in their jurisdiction.
It seems to the Board, however, that the criterion of
ease of regulation for states is only one part of a
broader cost-benefit test. So long as safety and soundness are not compromised, efficiency and least cost are
far more important factors on which to base policy.
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1095
We support the solution to this problem proposed in
S.543. As we understand it, the state in which
branches of an out-of-state bank operate would negotiate a supervisory agreement with the bank's home
state supervisor that is acceptable to both states and to
the relevant primary federal regulator. Failure to reach
agreement would require the primary federal supervisor to conduct examinations without deferring to the
state authorities. Such an approach creates desirable
incentives for the states to reach reasonable accord.
When interstate banking is implemented through
bank subsidiaries, the bank in each state has all the
powers that go with its charter—national or state.
However, should interstate banking occur through
branches, legislation must clarify whether those
branches must limit their activities to those permitted
to banks chartered in their host state, to activities
permitted to banks in their home states, or—for national or state banks—to the powers granted to national banks. The issue of the powers that interstate
branches should be permitted to exercise requires
balancing several competing concerns, including preserving the dual banking system and creating incentives that could make certain types of bank charters
more attractive than others. We read the Senate bill as
attempting the balance by providing that interstate
branches of state-chartered banks may not engage in
any activities in the host state that are not permitted
for banks chartered by the host state, although national banks would retain the same powers in all
states. Under the bill, out-of-state branches of national
banks would be subject to the same state laws governing intrastate branching, consumer protection, fair
lending, and community reinvestment as apply to
national banks headquartered in that state.
I should note also that the Board supports permitting foreign banks to establish and operate interstate
branches on the same terms and conditions as apply to
national and state banks. The Board believes that the
provisions of S.543 that prohibit foreign banks from
opening new interstate branches except through an
insured subsidiary bank are not consistent with the
principle of national treatment and should be reviewed
to ensure that foreign banks receive parity of treatment in their interstate operations.
Whether interstate banking is achieved through
bank subsidiaries, bank branches, or both, and regardless of how powers are exported from the home state
to the branching host state, the arguments used by
those that oppose interstate banking must be carefully
reviewed.
The first concern is that interstate banking would
result in undue concentration—and ultimately higher
loan rates and lower deposit rates—as large out-ofstate banks drive small in-state banks out of business.
1096
Federal Reserve Bulletin • December 1993
In-state market evidence simply does not support this
contention. All of the relevant evidence indicates that
small banks generally survive entry by large out-ofmarket banks and are very frequently more profitable
than the entrant. Similar evidence indicates that new
large bank entrants to local markets, whether by
de novo or by acquisition, are able to expand market
share by only modest amounts, if at all.
In the 1970s, for example, when statewide branching
was authorized in New York State, several large New
York City banks sought an upstate presence by acquiring small banks in these markets. By the early 1980s,
the acquired banks had gained on average less than 1
percentage point in market share, with the largest gain
less than 3 percentage points. The acquired banks or
branches continue to have small market shares or they
have been sold to local banks, as the New York City
banks have exited the market. Experience in California
also illustrates the ability of small banks to remain
viable in the face of competition from much larger
organizations. California has permitted unrestricted
statewide branching since 1927, and several of the
state's banking organizations, most notably BankAmerica, have operated extensive branch networks for
years. In spite of these extensive branch banks, California continues to have many successful independent
banking organizations. For example, as of year-end
1992, there were 395 banking organizations in California of which 101 had less than $50 million in assets.
Interestingly, in the period 1981 through 1991, 311
de novo banks (almost 11 percent of the U.S. total of
de novo banks formed in those years) began operation
in this unlimited branching state.
Besides their difficulties in winning customers away
from existing banks, entrants by acquisition are often
soon confronted with competition from a de novo bank
organized by local citizens, at times led by the former
managers of the acquired bank. The potential for
entry—both de novo and by acquisitions by other
banks outside the market—plus evidence of continued
small bank success suggest that it is unlikely that there
would be consumer harm from interstate banking. It is
well to remember that since 1979, although more than
5,000 banks were absorbed by merger, about 3,500
new banks were chartered. In addition, although almost 10,500 branches were closed, 24,000 new ones
were opened in that period. The vast majority of local
banking markets in the United States are incredibly
dynamic and sensitive to consumer demand, and interstate banking seems likely to make them more so.
The concern that interstate banking would lead to
excessive concentration in local banking markets is
further mitigated by the fact that antitrust enforcement
in banking focuses on maintaining competitive local
markets. Concentration ratios have not increased in
local markets despite the substantial overall consolidation in banking in recent years. Local competition
has been maintained, in part, because many bank
mergers have been between firms operating in different
local markets. In addition, increased concentration
has been avoided by factors already noted: the antitrust laws, limited ability of new large banks to increase market share, and the continued vitality of
small local competitors.
The importance of local markets and the evidence of
little change in local market concentration suggest that
attempts to ensure competition through statewide or
national deposit caps are unnecessary at best and may,
in fact, be anticompetitive to the extent that they
prohibit entry. The Board would recommend deletion
of the imposition of statewide and national deposit
share caps.
Another concern of some is that new entrants will
vacuum up local deposits and channel them to out-ofmarket loans or that managers brought into local markets will be insensitive to, or have no authority to adjust
to, local demands. However, it is important to recall
that an insured bank must fulfill its Community Reinvestment Act (CRA) responsibilities in all the markets
in which it operates. Moreover, the ease of entry, just
discussed, should soften concerns that out-of-market
entrants will ignore local customers. If a local branch
does not meet both the deposit needs and credit demands of the community, it will not succeed and it will
attract a rival that will. In this context, the Board sees
no need for the provisions of S.543, which would
require the promulgation of regulations prohibiting the
establishment of branches for the purposes of deposit
production.
However, because the Board realizes that the expansion of nationwide banking raises several issues
regarding the impact on local community credit needs,
it supports provisions of S.543, which would amend
the CRA to require that performance of interstate
institutions be assessed on a statewide or metropolitan
area basis. This approach would maintain the concept
embodied in the CRA that insured banks should be
evaluated on overall performance without imposing
arbitrary or costly regulatory requirements at the level
of the individual branch and would, in the Board's
view, provide adequate information to determine that
an interstate institution is meeting community needs in
the markets it serves.
Finally, in considering the needs of local markets,
the Congress should consider the fact that large banks
have higher loan-to-deposit ratios than small banks.
This implies that large banks entering new markets
could make both more in-market loans and more
out-of-market loans. Many assume that most of the
loans would, in fact, be made outside the community.
Statements
However, as I noted, banks must both meet their CRA
requirements and service their customers to remain
competitive in the market. It should also be kept in
mind that small, independent banks also export funds:
They are relatively large lenders to other banks through
the federal funds and correspondent deposit markets
and purchase relatively more Treasury and out-ofmarket state and local bonds than do large banks.
LIMITATIONS ON BANK INSURANCE
ACTIVITIES
The committee has also requested the Board's views
of the insurance provisions included in S.543 as approved on the Senate floor. S.543 would permit national banks to engage in insurance agency activities in
states that permit state-chartered banks to conduct
these activities. In these states, national banks would
be subject to the same rules and limitations that govern
state banks that conduct insurance agency activities.
The bill would also prohibit any banking organization—state or national—located in a state that authorizes banks to sell insurance from selling insurance in
another state unless that state also had authorized the
sale of insurance by banking organizations.
Another provision of the bill would restrict the
authority of national banks to sell insurance in small
towns in which the state has not otherwise authorized
state banks to act as an insurance agent. The bill would
overrule the Office of the Comptroller of the Currency's current interpretation permitting national banks
to use small towns as a base for selling insurance
products broadly. Under the bill, national banks would
be restricted to selling insurance to residents, businesses, and workers within towns of 5,000 and within
a 7.5 mile radius of these towns.
An insurance provision of S.543 that was enacted as
part of the Federal Deposit Insurance Company Improvement Act prohibits state banks from engaging in
insurance underwriting activities other than underwriting credit-related insurance. The bill retains the general prohibitions on bank holding companies selling or
underwriting insurance and does not expand the limited exceptions to these prohibitions, which currently
limit bank holding companies primarily to credit-related insurance activities, certain grandfathered insurance activities, and insurance agency activities within
small towns.
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The Board has consistently supported the provision of insurance agency activities by banks and
bank holding companies and believes that increased
bank participation will enhance competition and improve customer convenience without adversely affecting safety and soundness. Thus, the Board sees
no argument on either competitive or risk-management grounds to retain or impose limitations on
insurance agency activities.
Several states already permit their state-chartered
banks to engage in insurance agency activities. The
Board supports the bill's provisions to amend the
National Bank Act to authorize national banks to
conduct insurance agency activities to the same
degree permitted for state banks in those states.
However, the proposed limitations on existing authority to conduct insurance agency activities outside the state in which the bank is headquartered and
the limitations on insurance activities in small towns
promise continuation of the fractured and anticonsumer rules that currently hobble the banking industry, stifle competition and innovation, and divert
resources toward legal and regulatory maneuvering.
Particularly in the context of today's debate over the
nature of appropriate regulation, little justification
exists for devising a system of artificial controls
based on the kind of statutory limits on population
and geography proposed in S.543.
It is also the position of the Board that insuranceunderwriting activities should be authorized for banking organizations so long as the activities are conducted in a separate holding company subsidiary.
Although certain types of insurance-underwriting activities pose more risk, those risks can be successfully
managed and insulated from the deposit insurance
fund through the umbrella of the holding company.
The Board sees no reason to prohibit insuranceunderwriting activities when they are conducted in a
holding company.
In sum, the Board believes that interstate banking
and branching and broader insurance authority would
provide wider household and business choices at better prices. These needed reforms would also
strengthen our nation's banking system by increasing
competitive efficiency, eliminating unnecessary costs
associated with the delivery of services, and encouraging the reduction of risk through geographic and
product diversification.
•
1098
Federal Reserve Bulletin • December 1993
Statement by John P. LaWare, Member, Board of
Governors of the Federal Reserve System, before the
Subcommittee on Economic Growth and Credit Formation of the Committee on Banking, Finance and
Urban Affairs, U.S. House of
Representatives,
October 7, 1993
I am here today to discuss the Federal Reserve
Board's views on the Business, Commercial, and
Community Development Secondary Market Development Act (H.R.2600). The objective of this legislation is to promote economic growth and credit formation by facilitating the development of a secondary
market for business, commercial, and community development debt and equity investments in the private
sector. The Federal Reserve shares this important
objective. Many businesses, particularly smaller businesses, have been encountering difficulties in obtaining credit. Moreover, there is a well-recognized need
for community development financing.
Securitization can confer benefits to financial organizations as well as the credit customers they serve, as
we have seen in other sectors of the credit markets in
which securitization of bank-generated loans is common. While borrowers in these sectors have benefited
from an increased availability of credit, banking organizations and other financial institutions have been
able to improve their liquidity and diversification of
risk. This experience suggests that similar salubrious
benefits could result from the development of a secondary market that would encourage the securitization
of loans to businesses and community development
projects. In this regard, the Federal Reserve favors the
approach of H.R.2600 of promoting securitization in
these sectors by relying on the private sector rather
than by creating a new governmental program that
would extend an explicit full faith and credit U.S.
government guarantee to achieve that end.
The bill's objective of providing additional sources
of credit to the business community is, we believe,
particularly important as it pertains to smaller businesses. Over the past two decades, such businesses
have become increasingly important to the U.S. economy. Most of the recent gains in employment are
largely attributable to industries that are dominated by
smaller businesses, such as retailing. In the aggregate,
the volume of business activity generated by small and
medium-sized firms accounts for approximately onehalf of the employment and receipts in the nonfinancial, nonfarm business sector. Clearly, the prospect
for the future growth and prosperity of our economy is
closely tied to the health and vigor of smaller businesses.
The bill's objective of enhancing the availability of
financial resources to community development enter-
prises is also of great importance. These enterprises
support projects—such as improving the stock of affordable housing and providing financing to minorityowned businesses—that are crucial to the economic
advancement of disadvantaged urban areas and distressed rural communities.
An important factor in the success of smaller firms
and community development projects is their ability to
acquire adequate credit accommodation. Historically,
the commercial banking system has been the primary
source of financing to smaller businesses, which have
few funding alternatives. Community development
programs also tend to rely on commercial banks for
financing.
As is well known, however, many smaller businesses and community development enterprises have
encountered difficulty in obtaining financing from depository institutions in recent years. These institutions, having experienced substantial loan-quality
problems—which stemmed from nearly a decade of
aggressive lending often on terms more liberal than
warranted by the credit standing of their borrowers—
significantly tightened their lending standards in the
late 1980s and early years of this decade. Recently,
with improving asset quality and profitability, banks
appear ready to begin increasing lending activity, as
indicated by our surveys. This development should
benefit the small business sector and community development programs. Nonetheless, given the importance of smaller businesses and community development enterprises to the well-being of our country,
innovations that can appropriately increase their access to financial resources would be most welcome.
I should note here that to promote greater availability of credit, the Federal Reserve and the other bank
supervisory agencies have recently implemented several initiatives designed to ensure that regulatory practices, or perceptions of regulatory procedures, do not
impede lending by banking institutions. Some of these
initiatives were designed particularly to benefit smaller
business borrowers and low-income and minority
neighborhoods, possibly through community development programs.
One such initiative was a program to allow banks to
establish a "basket" of loans that will be judged on the
basis of performance and not be criticized on the basis
of documentation deficiencies. Another important initiative is the agencies' proposal to increase from
$100,000 to $250,000 the threshold amount below which
real estate-related loans—including loans to businesses
that are collateralized by property—do not require
appraisals under Title XI of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989.
In addition, an interagency letter was issued giving
guidance on fair lending. The letter stressed the seri-
Statements
ous nature of violations of antidiscrimination laws and
included guidance on the steps that financial institutions can take to ensure compliance with relevant fair
lending statutes and regulations.
Given the importance of ensuring an adequate flow of
financial resources to businesses and community development enterprises, new means for promoting that end
should be sought, and, as H.R.2600 points out, securitization might serve that purpose. Banks and other
financial institutions have been active in the securitization of other types of loans, such as mortgages, and it is
possible that they could also be active in the pooling
and securitizing of business and community development loans. This activity is altogether appropriate for
banking organizations if it is done in a manner consistent with safe and sound banking practices.
Asset securitization consists of placing loans into a
pool and issuing securities that entitle the holders to
the proceeds of the principal and interest payments
flowing from the underlying loans. Bank lenders that
engage in securitization can benefit from improved
liquidity, enhanced fee income, and—if a true sale has
occurred resulting in the removal of the assets from
their balance sheets—less need for capital. On the
other hand, investors are able to purchase securities
that require no management of the underlying loans
and provide an attractive return for instruments that
bear little or no credit risk, depending upon the nature
of the credit enhancement.
Thus, securitized assets can offer improved diversification and a greater selection of risk and return
alternatives. Purchases of asset-backed securities may
be valuable to smaller banks that do not have the
capability of diversifying their portfolio geographically
or according to industrial sector.
The impressive growth in the residential mortgagebacked securities market and in the markets for securities based on auto loans and other consumer loans
has dramatically demonstrated the benefits that securitization has to offer. In view of these benefits, the
Federal Reserve believes that it is important to give
significant thought to all proposals designed to promote this activity and expand it to other types of assets
such as loans to businesses and community development enterprises.
Nonetheless, it should be recognized that the nature
of business and community development loans differs
significantly from the types of loans—such as residential mortgages and credit card receivables—that are
now being securitized. Although these latter types of
loans are relatively homogeneous, business and community development loans tend to be quite heterogeneous in nature, in part because of the differences
among the enterprises themselves. Moreover, the terms
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1099
of such loans tend to differ widely because they are
most often individually negotiated to suit each borrower's unique credit needs. As a result, these types of
loans have a wide range of maturities and repayment
terms, different degrees of documentation, and disparate amounts of information regarding the underlying
financial conditions of the obligors. The high degree of
heterogeneity among these loans greatly complicates
the ability to predict future cash flows that will be
produced by pools of even the highest credit quality.
Pools of business and community development
loans often also exhibit diversity with regard to credit
quality, which, coupled with diversity in documentation standards, greatly complicates the task of performing due diligence and reaching a judgment on the
overall quality of the pool. Finally, the lack of a
historical database on business loan performance that
is sufficiently broad and deep makes actuarial methods
of estimating loan losses extremely difficult.
Furthermore, community development loans may
manifest even more heterogeneity. These loans are
often quite large, entail extensions of credit to several
borrowers with different credit standings, and exhibit
complicated structures that may include public and
private sector involvement on several different levels.
For example, a single loan to a program for the
revitalization of several properties within a particular
neighborhood could involve several borrowers having
varying degrees of experience and financial capacity
and be supported by numerous state, federal, and
private assistance programs.
The heterogeneity of business and community development loans not only represents a hurdle to their
successful widespread securitization but also causes
securities markets to require substantial credit enhancements on pools of such loans. At the same time,
the special nature of business and community development loans makes it relatively difficult for banks to
accurately assess the riskiness of issuing such credit
enhancements. On the other hand, underwriting such
loans to have similar maturities, repayment schedules,
and yield could make them more homogeneous and,
thus, could facilitate their securitization. However,
these types of loans are often specifically tailored to
meet the unique needs of each borrower.
A standardized loan product would introduce inflexibility into the business lending process and could
preclude banks from extending credit to certain firms
and organizations because they do not fit the "mold."
In addition, the standardization of business and community development loans could increase the amount
of documentation needed to obtain such loans. In this
regard, it should be noted that since the advent of
securitization of residential mortgages, mortgage lend-
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Federal Reserve Bulletin • December 1993
ers have tended to require significantly more documentation to facilitate the sale of mortgages into the
secondary market. It is possible that rigid and inflexible underwriting standards and increased documentation requirements could actually curtail the amount of
available credit for businesses and for community
development.
Given the amount of innovation in the securitization
market over the past several years, we do not believe
that the hurdles to securitizing business and community development loans are insurmountable. As I mentioned earlier, this activity may be appropriate for
banking organizations if it is conducted in a safe and
sound banking manner. In our view, one of these
safeguards would require that adequate capital be
maintained against participating organizations' risk
exposure. In this regard, the banking agencies are
currently drafting proposals that are aimed at revising
the capital treatment of recourse arrangements, which
we believe, when finalized, should reduce any obstacles in our current capital rules that may be hindering
the securitization of business and community development loans.
Turning to the provisions of H.R.2600, I would
reiterate that the reliance on the private sector is the
preferable approach. However, we have concerns
about certain aspects of the legislation. We believe
that it would create a new regulatory structure for
secondary market facilitating organizations, or
SMFOs. These institutions would be certified by the
Treasury Department, which would also establish capital standards and loss reserve requirements, promulgate minimum operating standards and reporting requirements, and arrange for regulatory examinations.
These are traditional regulatory and supervisory functions, but under the legislation none of them would be
carried out by the agencies currently responsible for
the regulation and supervision of insured depository
institutions and consolidated banking organizations.
Thus, we believe that, with respect to financial
institutions that already are regulated by a federal
government agency such as the Federal Reserve, the
Federal Deposit Insurance Corporation, the Office of
the Comptroller of the Currency, and the Office of
Thrift Supervision, this legislation would create a
parallel regulatory structure that duplicates the work
of those agencies. As we have discussed with committee staff members, the Federal Reserve will continue
to work with the committee to address these issues.
As the Congress continues to consider ways to
facilitate securitization of business and community
development loans, we believe that the preferable
approach would be to fashion legislation directing the
primary federal regulatory agencies to develop appropriate standards. This legislation would enable
the agencies to address the securitization of such
loans in a manner that would be consistent with the
prudential framework for securitization more generally. We believe that such an approach is more likely
to promote economic efficiency and bank safety and
soundness. It also would avoid the rigidities that
result when technical and complex regulatory requirements are written into law. The agencies need
flexibility to be able to adjust the rules to later
experience in the market.
As I said earlier, we support the overall objectives
of H.R.2600. The bill places a reliance on the private
sector to develop the secondary market for business,
commercial, and community development loans, and
we find that aspect of the bill attractive. It is imperative that in attempting to facilitate the securitization of
these types of loans we avoid creating another government agency or increasing government liabilities by
extending additional government guarantees.
•
Statement by Alan Greenspan, Chairman, Board of
Governors of the Federal Reserve System, before the
Committee on Banking, Finance and Urban Affairs,
U.S. House of Representatives,
October 13, 1993
Reserve, and mandate additional disclosure of monetary policy decisions and discussions.
The appropriate role of a central bank in a democratic society is an important and controversial issue.
The performance of such an institution has profound
implications for the nation's economy and the people's
standard of living. Americans have pondered the question of the appropriate role and structure for the
central bank at length, beginning with the debate over
the First Bank of the United States, which George
Washington signed into existence in 1791.
Echoing the earlier discussions surrounding the
chartering of the First and Second Banks of the United
I appreciate this opportunity to discuss the important
issues raised by recent legislative initiatives to alter
the structure of the Federal Reserve System. I will
begin my remarks this morning by placing these issues
in some historical perspective before commenting specifically on provisions that would change the status of
Reserve Bank presidents, broaden the authority of the
General Accounting Office (GAO) to audit the Federal
Statements
States, extended debate and compromise preceded the
establishment of the Federal Reserve System. Much of
the focus of the debate was on the balance that should
be struck between public and private authorities in
governing the central bank.
In 1908, in response to the periodic financial crises
that had plagued the country in the latter part of the
nineteenth century and in the early years of the
twentieth century, a National Monetary Commission,
consisting entirely of members of the Congress, was
established by legislation. Four years later, the commission, in submitting its report to the Congress,
called for the creation of a National Reserve Association to provide stability to our financial system. Both
the commission's plan and an alternative, proposed by
President Woodrow Wilson, envisioned the central
bank as containing public and private elements. President Wilson's plan won the approval of the Congress
and established the Federal Reserve System as our
nation's central bank. Over the intervening years, the
Congress has initiated many reviews of the System's
structure but with rare exceptions has chosen to leave
the basic structure intact.
The major piece of legislation affecting the Federal
Reserve's organization since its inception in 1913 was
the Banking Act of 1935, which established the Federal Open Market Committee (FOMC) in its current
form as the central decisionmaking body for monetary
policy. When it was clear by the 1930s that the buying
and selling of securities by the Federal Reserve was a
crucial monetary policy instrument, there was again
debate in the Congress over whether it should be
carried out entirely by government appointees or
whether the Reserve Bank presidents, who were not
politically appointed, should share in that policymaking role. In the 1935 act, the Congress reaffirmed that
the Reserve Bank presidents should have a substantive voice in policy. They were granted five of the
twelve positions on the FOMC, while the seven members of the Board constituted the majority.
The wisdom of the Congress in setting up the
structure of the System has stood the test of time.
Federal District Court Judge Harold Greene, in commenting in 1986 on the constitutionality of the FOMC,
noted, "The current system[,]. . . the product of an
unusual degree of debate and reflection[,]. . . represents an exquisitely balanced approach to an extremely difficult problem."
The role of a central bank in a democratic society
requires a very subtle balancing of priorities between
the need for sound, farsighted monetary policy and the
imperative of effective accountability by policymakers. Accountability and control by the electorate are
vital; the nation cannot allow any instrument of government to operate unchecked. The central bank, just
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1101
like other governmental institutions in a democracy,
must ultimately be subject to the will of the people.
In this regard, the Federal Reserve's activities are
constantly scrutinized by this committee and others in
the Congress. The Federal Reserve Board reports
semiannually both to the House of Representatives
and to the Senate pursuant to the Humphrey-Hawkins
Act, and we regularly respond to other congressional
requests for testimony. We recognize our obligation to
do so and appreciate the importance of maintaining
open communication with the nation's elected representatives. We also provide a great deal of information
about our operations directly to the public. And we
consult frequently with those responsible for economic and financial policy in the Administration.
We have to be sensitive to the appropriate degree of
accountability accorded a central bank in a democratic
society. If accountability is achieved by putting the
conduct of monetary policy under the close influence
of politicians subject to short-term election-cycle pressures, the resulting policy would likely prove disappointing over time. That is the conclusion of financial
analysts, of economists, and of others who have
studied the experiences of central banks around the
globe, and of the legislators who built the Federal
Reserve.
The lure of short-run gains from gunning the economy can loom large in the context of an election cycle,
but the process of reaching for such gains can have
costly consequences for the nation's economic performance and standards of living over the longer term.
The temptation is to step on the monetary accelerator,
or at least to avoid the monetary brake, until after the
next election. Giving in to such temptations is likely to
impart an inflationary bias to the economy and could
lead to instability, recession, and economic stagnation. Interest rates would be higher, and productivity
and living standards lower, than if monetary policy
were freer to approach the nation's economic goals
with a longer-term perspective.
The recognition that monetary policies that are in
the best long-run interest of the nation may not always
be popular in the short run has led not only the United
States but also most other developed nations to limit
the degree of immediate control that legislatures and
administrations have over their central banks. More
and more countries have been taking actions to increase the amount of separation between monetary
policy and the political sphere.
In this nation, several aspects of the current setup
promote the central bank's distance from the political
fray. The fourteen-year terms of the governors on the
Federal Reserve Board are one of those elements, with
only two vacancies scheduled to occur during the four
years of any single presidential term. Once in office,
1102
Federal Reserve Bulletin • December 1993
those governors cannot be removed by the President
over a policy dispute. In addition, regional Reserve
Bank presidents—who are selected at some remove
from political channels—are included on the FOMC.
To prevent political pressure from being applied on
monetary policymakers via the power of the purse, the
Federal Reserve is not required to depend upon appropriated funds to meet its expenses.
H.R.28, The Federal Reserve System Accountability Act of 1993, would remove some of that insulation.
I would view the enactment of legislation of this type
as a major mistake. Provisions that, in effect, increase
political leverage on Federal Reserve decisionmaking
amount to assaults on the defenses that Congress has
consciously put in place to ensure the appropriate
degree of central bank independence. Weaken those
defenses, and, I firmly believe, the economy is at risk.
The Federal Reserve must be free to focus on advancing the nation's ultimate economic goals.
In an amendment to the Federal Reserve Act, the
Congress has charged the central bank with furthering
the goals of "maximum employment, stable prices,
and moderate long-term interest rates." To promote
those objectives, the Federal Reserve must take a
long-run perspective.
In that vein, as I have indicated to this committee on
previous occasions, the determination of the effectiveness of a federal agency has to be based, in the end, on
whether it has carried out the objectives the Congress
has set for it. In discharging its tasks over the years,
the Federal Reserve has faced a variety of challenges;
our economy has been buffeted by swings in fiscal
policy and by strong external forces, including oil
price shocks and wars. In often difficult economic
circumstances, the Federal Reserve has implemented
policies aimed at promoting the nation's economic
health. We have not always been entirely successful,
but we have learned from experience what monetary
policy can do and what it cannot do.
In my view, current Federal Reserve policy is
promoting conditions vital to maximizing the productive potential of the U.S. economy. Monetary policy
is, and will continue to be, directed toward fostering
sustained growth in economic output and employment.
As the nation's central bank, the Federal Reserve
stands at the nexus of monetary policy, supervisory
policy, and the payments system. Part of our task is to
minimize the risk of systemic crises while endeavoring
to implement a macroeconomic policy that supports
maximum sustainable economic growth. When, for
example, threats to the nation's financial system
loomed large in the wake of the 1987 stock market
crash, the Federal Reserve effectively contained the
secondary consequences of the crash with prompt but
prudent injections of liquidity and with constant consultations with depository institutions during the crisis. The bulk of our efforts in this area, however, of
necessity garners considerably less publicity, as it is
directed at ongoing efforts to fend off financial sector
problems before those problems emerge as full-blown
crises that could threaten American jobs and living
standards. Much of our success over the years, therefore, reflects crises that did not happen. In working
with other regulatory agencies, the Federal Reserve
has also brought its broad perspective to bear on
supervisory actions that could have had macroeconomic or monetary policy implications.
In practice, the central bank of the United States
works, and it works well. On paper, however, its
structure can appear unwieldy—an amalgam of regional and centralized authority and of public and
private interests. If we were constructing a central
bank for the United States now, starting from scratch,
would it be identical to the Federal Reserve System
described in current law? Perhaps not. But the Federal
Reserve has evolved to be well suited to today's policy
tasks.
One of the reasons why the Federal Reserve is
effective is that its basic structure has been in place for
a long time. The institution has been able to take that
framework as a given and to adapt and build on it
during decades of invaluable experience in the financial and economic setting of this country.
As the Federal Reserve has evolved over the years,
it has been permeated by a culture of competence and
dedication to public service. As a consequence, the
Federal Reserve has attracted highly skilled analysts,
technicians, and policymakers. Although we might
imagine a different initial structure for our central
bank, implementing a major change at this stage could,
for all intents and purposes, destroy the exceptionally
valuable culture that has evolved over time and that
continues to serve this nation well. And there is
always the risk that changing a complex organization,
even with the laudable goal of improving one or more
parts of it, may well have unforeseen and unfortunate
consequences elsewhere in the structure.
Nonetheless, the Federal Reserve recognizes that
an organization that does not appropriately respond to
changes in the environment in which it functions will
soon become ineffectual. Accordingly, the Federal
Reserve has suggested, initiated, and instituted several
measured changes over the years. When confronted
with a new development requiring change, we advocate change. For example, not long ago we recognized, as did this committee, an apparent weakness in
the way the discount window could be used in the case
of insured failing institutions, a condition that we had
rarely before experienced. We saw change as a con-
Statements
structive response, and, while we were prepared to
implement the change by adapting our regulations, we
cooperated with this committee, which chose to
amend our discount window procedures as part of the
Federal Deposit Insurance Corporation Improvement
Act of 1991.
I hope, and I expect, that the Federal Reserve will
continue to change but always prudently—in response
to clearly identified problems—and only for the better.
One area in which I see major need for change is the
inadequate pace at which women and minorities have
moved into the top echelons of the Federal Reserve.
We share your concerns in this regard and are working
diligently to improve opportunities for women and
minorities throughout the System.
In the remainder of my remarks this morning, I
would like to address three specific issues, under the
more general topic of Federal Reserve accountability.
These issues are, first, the status of the Reserve Bank
presidents on the FOMC, second the General Accounting Office's purview in auditing the Federal Reserve System, and, third, the disclosure of FOMC
deliberations and decisions.
THE STATUS OF RESERVE BANK
PRESIDENTS
The Federal Reserve Banks represent a unique blend
of the public and private sectors. I believe that those
who label the Reserve Bank presidents as representatives of the banking interests, as opposed to the public
interest, misunderstand the position of the presidents—and the Reserve Banks—in the Federal Reserve System.
The Federal Reserve Banks are instrumentalities of
the U.S. government organized on a regional basis.
They are in a tangible sense "owned" by the federal
government. The bulk of their net income is handed
over to the government each year. Their accumulated
surplus, were they to be liquidated, would revert to the
U . S . Treasury. And although a portion of the capital of
the Reserve Banks represents contributions by member commercial banks, those member banks are not
free to withdraw the capital, their dividends are fixed
by statute, and their capital stake in no way affords
them the usual attributes of control and financial
interest.
The member commercial banks do select the majority of the directors of their local Reserve Bank. But the
Federal Reserve Board chooses the remaining directors and, among those directors, designates a chairman and a deputy chairman. The directors, in turn,
select the Reserve Bank's president, but their selection is subject to the Board's approval.
to the Congress
1103
Those Reserve Bank presidents then receive topsecret clearances from our government and are subject
to the federal conflict-of-interest statute. They can be
removed by the Federal Reserve Board, and it is the
Board that sets their pay. Upon joining the FOMC,
they take an oath of office to uphold the Constitution
of the United States, and—uniformly in my experience—they are dedicated to the service of our country.
However, regardless of whether the presidents of
the Reserve Banks are viewed as more public than
private or more private than public, the real question
remains, Does their participation on the FOMC make
for better monetary policy? I can assure you that it
does.
The input of Reserve Bank presidents who reside in
and represent the various regions of the country has
been an extremely useful element in the deliberations
of the FOMC. By virtue of their day-to-day location
and their ongoing ties to regions and communities
outside of the nation's capital, the presidents see and
understand developments that we in Washington can
overlook. They consult routinely with a wide variety
of sources within their districts, drawing information
from manufacturing concerns, retail establishments,
agricultural interests, financial institutions, consumer
groups, labor and community leaders, and others.
Moreover, because their selection is apolitical, they
tend to bring different skills and perspectives to the
policymaking process.
The public and private and the regional makeup of
the Federal Reserve System was chosen by the Congress, in preference to a unitary public central bank,
only after long and careful debate. The system was
designed to avoid an excessive concentration of authority in federal hands and to ensure responsiveness
to local needs. Nonetheless, then as now, the operations of the Reserve Banks were placed under the
general supervision of the Board of Governors. When
the FOMC was given its current form in 1935, five
Reserve Bank presidents were placed on that committee, but their presence was outweighed by the seven
presidentially appointed members of the Board.
This blending of public and quasipublic institutions
has a long history in this country and has been
reaffirmed repeatedly in the Congress. Nonetheless,
the presence of Reserve Bank presidents on the
FOMC periodically resurfaces as an issue. This occurs
despite the long and successful history of the presidents' membership on the FOMC, which counters a
similarly lengthy history of claims that their participation would be detrimental to our nation. The involvement of quasigovernment officials in monetary policymaking has survived a series of challenges over the
years. It has survived the test of time. One must
1104
Federal Reserve Bulletin • December 1993
wonder why we would wish to tinker with a unique
partnership of the public and the private that has
worked well for more than half a century.
Some who agree that the Reserve Bank presidents
provide a unique perspective would nonetheless argue
that such input could still be obtained by reducing the
Reserve Bank presidents' role to an advisory one. I
doubt that, for two reasons. First, let us not delude
ourselves: Anyone permanently denied a vote sees his
or her influence diminish markedly. Not only would
the presidents' varied experiences and regional perspectives likely become less well reflected in policy
decisions, but their ability to solicit real-time information from their communities would be diminished as
well. Second, I believe that a fair number of my
colleagues who serve as presidents of the Reserve
Banks would have declined that office had voting
rights on the FOMC not attached to it. These people
do not lack for opportunities. If the Reserve Bank
presidents were denied votes, we could not attract
individuals of the same caliber to these jobs that we do
today. As a result, the advice received would be
adversely affected, and FOMC deliberations would be
less productive.
A different proposal would retain the Reserve Bank
presidents on the FOMC but would have them appointed by the President of the United States. Such a
proposal is not new: It was considered and rejected by
this committee as recently as 1976. The clearest drawback to this suggestion is one that I have already
mentioned, that is, the potential for increased partisanship that would erode the quality of policy, as the
central bank was drawn more closely into the ambit of
daily political concerns. In addition, however, such an
arrangement would create significant managerial problems for the Federal Reserve System as an organization.
Under current law, Reserve Bank presidents are
directly accountable to the Board for their performance in carrying out Systemwide policies in such
areas as bank supervision, payments systems responsibilities, and discount window administration. The
Board's ultimate defense against a Bank president who
is either incompetent or purposely obstructing the
effective implementation of System policy is its power
to remove that person from office.
If the heads of the Reserve Banks were instead
presidentially appointed, we presume that they could
be constitutionally removed only by the President. In
that circumstance, Systemwide coordination of policies and interbank cooperation could be seriously
impaired.
In sum, if the sole duty of Reserve Bank presidents
were to vote on the FOMC, granting the President of
the United States the power to appoint and remove
them would be unwise on only one count—that of
adversely affecting the conduct of the nation's monetary policy. However, Reserve Bank presidents also
run large organizations charged with such tasks as
collecting data, processing currency, operating the
book entry system, and auctioning Treasury bills. The
twelve Banks must operate as one in these various
areas, and the Congress has given the Board general
oversight of the Banks to ensure that they do. A
proposal that divested the Board of the power to
remove a Reserve Bank president from office would
subtly but significantly undermine the ability of the
Board to manage the Federal Reserve System.
SCOPE OF GAO
AUDITS
As you know, the passage in 1978 of the Federal
Banking Agency Audit Act made most of the operations of both the Federal Reserve Board and the
Federal Reserve Banks subject to review by the General Accounting Office. Since then, the GAO has
completed more than 100 reports on various aspects of
System operations, as well as numerous others that
involved us less directly. At present, the GAO has
roughly twenty-five audits of the Federal Reserve
under way and maintains several of its staff in residence at the Board and at selected Reserve Banks.
The GAO has free rein to audit the System, with the
explicit exemption of only three functions: Those are
deliberations, decisions, or actions on monetary policy
matters; transactions made under the direction of the
FOMC; and transactions with, or for, foreign official
entities. By excluding these areas, the 1978 act represented another effort to balance, on the one hand, the
public accountability of the Federal Reserve with, on
the other hand, its ability to perform its policy functions most effectively.
The benefits, if any, of broadening the GAO's authority into the monetary policy and FOMC areas
would be small, in part because a GAO audit would
tend to duplicate functions that are already performed.
With regard to purely financial audits, the Federal
Reserve Act already requires that the Board conduct
an annual financial examination of each Reserve Bank,
including open market and international operations.
And these exams are complemented by other Board
reviews of Reserve Bank effectiveness and efficiency,
as well as by comprehensive audits conducted by each
Reserve Bank's independent internal audit function.
To provide the Board with additional assurance of the
quality and comprehensiveness of the Board's audit
process, complete financial audits are currently being
conducted by nationally recognized independent accounting firms at Reserve Banks. Two such audits
Statements
were conducted this year. The results of these audits
to date have confirmed the integrity and quality of the
System's audit process. In addition, the Board itself is
audited annually by an independent public accounting
firm, and the results of those audits are furnished
regularly to the Congress.
More broadly, the Congress has, in effect, mandated
its own review of monetary policy by requiring semiannual monetary policy reports and by holding hearings. In addition, a vast and continuously updated
literature of expert evaluations of U . S . monetary
policy exists. In this environment, the contribution
that a GAO audit would make to the active public
discussion of the conduct of monetary policy is not
likely to outweigh the negatives.
Those negatives would include a potential compromising of Federal Reserve effectiveness, in part, because the change could peel away a layer of the central
bank's insulation from day-to-day political pressures.
Even what appears to be a very limited audit of the
efficiency of our operations could, in fact, turn into
pressure for a change in monetary policy itself as the
1978 act understood. For example, the question being
posed to Comptroller Bowsher in these hearings of
whether the magnitude of our open market operations
reflects unnecessary buying and selling of government
securities is a monetary policy question, not an efficiency question. The volume of transactions that the
Open Market Desk completes in carrying out the
FOMC's directive correlates directly with the substance of the policy in place.
GAO scrutiny of policy deliberations, discussions,
and actions could also impede the process of formulating policy. A free discussion of alternative policies
and possible outcomes is essential to minimize the
chance of policy errors. The prospect of GAO review
of formative discussions, background documents, and
preliminary conclusions could have an adverse effect
on the free interchange and consensus building that
leads to good policy.
Transactions made under the direction of the FOMC
primarily involve domestic monetary policy operations but also include foreign exchange operations.
Expanding GAO audit authority into this latter area
would risk impairing our sensitive working relations
with foreign central banks and governments. Important daily contacts and exchanges of information with
foreign monetary authorities now take place in a
candid and constructive atmosphere. The possibility
of a GAO audit of our foreign exchange operations
would reduce the willingness of foreign authorities to
share information with us and thereby would reduce
the effectiveness and efficiency of our operations. This
caution also applies to the third exempted area—
transactions with or for foreign entities; however,
to the Congress
1105
there the principal issue is one of sensitive proprietary
information about foreign governments, foreign central banks, and international organizations.
In sum, I believe that the current structure of
internal controls and audits and congressional review
strikes the right balance between public accountability
and policy effectiveness.
FOMC
DISCLOUSRE
The issue of fuller or more immediate disclosure of
FOMC discussions and decisions has been a controversial one historically. In the Congress, the financial
markets, and academia, this topic has been debated
repeatedly over the years. The FOMC itself has frequently reviewed policies and procedures in this area
and has revised its practices several times. At the
heart of this issue is, again, balance. The appropriate
degree of openness comes from striking the right
balance between the public's right to know and the
need for effective policymaking and implementation.
In a democratic society, all public policymaking
should be in the open, except when such a forum
impedes the primary function assigned to an institution
by law. Accordingly, the Federal Reserve makes its
decisions public immediately, except when doing so
could undercut the efficacy of policy or compromise
the integrity of the policy process. When we change
the discount rate or reserve requirements, those decisions are announced at once. When we establish new
ranges for money and credit growth, those ranges are
set forth promptly in our reports to the Congress. And
when the Congress requests our views, we come
before this committee and others to testify. Moreover,
we publish our balance sheet every week with just a
one-day lag, enabling analysts to review our operations in considerable detail.
What we do not disclose immediately are the implementing decisions with respect to our open market
operations. However, any changes in our objectives in
reserve markets are quickly and publicly signalled by
our open market operations. We publish a lengthy
record of the policy deliberations and decisions from
each FOMC meeting shortly after the next regular
meeting has taken place.
Nevertheless, the Federal Reserve has a reputation,
along with other central banks, of being secretive. I
suspect this is largely a result of the nature of a central
bank's mission. The operations of central banks have
a direct impact on financial and exchange markets;
therefore, these institutions often find themselves in
the position in which premature openness and disclosure could inhibit or even thwart the implementation
of their public purpose.
1106
Federal Reserve Bulletin • December 1993
Suppose, for example, a central bank that operated
by targeting the foreign exchange rate decided that it
might be appropriate to change the target rate at a
given point in the future. Or, to bring the discussion
closer to home, say that the central bank phrased its
policies in terms of contingency plans—that is, if a
given economic or financial event occurs, a particular policy action would ensue. If those decisions
were made public, markets would tend to incorporate
the changes immediately, preventing the policies
from being effectively carried out as planned.
More broadly, immediate disclosure of these types
of contingencies would tend to produce increased
volatility in financial markets, as market participants
reacted not only to actual Federal Reserve actions
but also to possible Federal Reserve actions. It is
often the case that the FOMC places a bias toward
change into its directive to the Open Market Desk,
without any change in instrument settings in fact
resulting. In such circumstances, the release of those
directives during the period in which they are in force
would only add to fluctuations in financial markets,
moving rates when no immediate change was intended.
As a consequence, a disclosure requirement would
impair the usefulness of the directives, as Committee
members, concerned about the announcement effect
of a directive biased either toward ease or tightening,
would tend to shy away from anything but a vote
of immediate change or of no change at the meeting.
An important element of flexibility in the current
procedures would be lost, which can scarcely serve
the public interest. Immediate disclosure of the
directive would change the nature of monetary policymaking, and it would not be a change for the
better.
Of course, our current policies on information
release are grounded on an assumption of confidentiality. Any unauthorized, premature release of
FOMC decisions is a very serious matter, and it
undermines our policies. Such leaks are abhorrent.
As I noted in my recent letter to you, leaks of FOMC
proceedings are clearly unfair to the public, potentially disruptive of the policymaking process, and
undoubtedly destructive of public confidence in the
Federal Reserve. We have taken steps that we believe will be effective to curb any further unauthorized release of information.
To repeat, as a general matter, public institutions
are obliged to conduct their business in open forums.
The Federal Reserve endorses this principle and adheres to it, except when doing so would prevent us
from fulfilling our fundamental mission of producing
sound public policy.
Holding open meetings of the FOMC or releasing a
videotape, audiotape, or transcript of them would so
seriously constrain the process of formulating policy
as to render those meetings nearly unproductive. The
candid airing of views, the forthright give and take,
and the tentative posing of new ideas would likely
disappear. Monetary policy would suffer, and the
economy with it.
In open forum, several important items currently
discussed at FOMC meetings simply could not be
mentioned. We would no longer have the benefit of
sensitive information from foreign central banks
and other official institutions or of proprietary information from private sector sources, as we could not
risk the publication of information given us in confidence.
Moreover, to avoid creating unnecessary volatility
in financial and exchange markets, the FOMC might
have to forgo explorations of the full range of policy
options. Our discussions would, in effect, become
self-censored to prevent the voicing of any views
that might prove unsettling to the markets. Even a
lag in releasing a verbatim record of the meetings
would not eliminate this problem but only attenuate
it. Unconventional policy prescriptions and ruminations about the longer-term outlook for economic
and financial market developments might never be
surfaced at meetings, for fear of igniting a speculative
reaction when the discussion was disclosed.
It has been averred that because the minutes we
release do not indicate which individuals voiced
which views at the meetings, the FOMC members
themselves escape accountability for their actions.
This is contrary to fact. The vote of each FOMC
member is recorded, by name, and the reasons for
that vote are also recorded. In the case of a dissent
from the majority, the reasoning behind the vote is
generally explained separately. In the case of a vote
cast with the majority, the members assure themselves that the minutes accurately reflect their views
and the reasons for voting as they did.
In both the Freedom of Information Act (FOIA)
and the Government in the Sunshine Act, the Congress explicitly recognized that types of information
and kinds of meetings should be protected from
dissemination to the public. Certain exemptions have
been provided in the FOIA for information that, for
example, is of a confidential financial nature and in
the Sunshine Act for meetings that would prompt
speculation in financial markets. In the exempted
areas, it was determined that information release
would not be in the public interest. As I have
indicated, I believe that the consequences of requiring the prompt release of a verbatim record of FOMC
meetings would most certainly not be in the nation's
best interest.
Statements
CONCLUSION
You have made it clear that, in your view, this
legislation does not represent an attempt to politicize
the Federal Reserve or to infringe on its independence.
I feel I must respond that, whatever its intent, legislation of this type would have precisely that deleterious
effect.
I take this legislative initiative seriously not only
because it would emanate from this committee but also
because of monetary policy's key position in the
nation's overall economic policy. At the flashpoint of
financial crisis, monetary policy, if mishandled, can
pose a threat to our economic system. And in this
century we have witnessed inflation—a monetary phe-
Statement by Alan Greenspan, Chairman, Board of
Governors of the Federal Reserve System, before the
Committee on Banking, Finance and Urban Affairs,
U.S. House of Representatives,
October 19, 1993
I appreciate this opportunity to provide my views on
the appropriate degree of disclosure by the Federal
Open Market Committee (FOMC).
The issue of fuller or more immediate disclosure of
FOMC discussions and decisions has been a controversial one historically. In the Congress, the financial
markets, and academia, this topic has been debated
repeatedly over the years. The FOMC itself has reviewed its policies and procedures in this area frequently and has revised its practices several times. At
the heart of this issue is balance: The appropriate
degree of openness comes from striking the right
balance between the public's right to know and the
need for effective policymaking and implementation.
In a democratic society, public policy decisions
should be in the open, except when exposure impedes
the primary function assigned to an institution by law.
Accordingly, the Federal Reserve makes its decisions
public immediately, except when doing so could undercut the efficacy of policy or compromise the integrity of the policy process. When we change the discount rate or reserve requirements, those decisions
are announced at once. When we establish new ranges
for money and credit growth, those ranges are set forth
promptly in our reports to the Congress. Moreover,
we publish our balance sheet every week with just a
one-day lag, enabling analysts to review our operations in considerable detail.
What we do not disclose immediately are the implementing decisions with respect to our open market
operations. However, any changes in our objectives in
to the Congress
1107
nomenon—turn virulent in too many nations around
the world. To a considerable degree, then, both the
earnestness with which we approach our task and the
unique position accorded the Federal Reserve in our
governmental structure derive from the potential for
just such dire consequences of monetary policy mismanagement.
In imposing significant change on the Federal Reserve System, we would run the risk of real damage to
the institution's effectiveness from unintended, adverse consequences. The Federal Reserve is not a
flawless institution. It is, however, a very good one. In
my view, it would be a mistake to legislate structural
reform when, as in this case, compelling evidence of
the need for change is lacking.
•
reserve markets are quickly and publicly signalled by
our open market operations. And w e publish minutes
of the policy deliberations and decisions from each
FOMC meeting shortly after the next regular meeting
has taken place. These minutes, a copy of which for
the meeting of February 1993 I have attached to this
statement, can run from fifteen to more than thirty
pages, presenting a comprehensive record of the economic factors and analysis and alternative policy approaches considered in reaching our decisions. 1
Nevertheless, the Federal Reserve, like other central banks, has a reputation for being secretive. I
suspect that this is largely a result of the nature of a
central bank's mission. The operations of central
banks have a direct impact on financial and foreign
exchange markets; therefore, these institutions often
find themselves in the position in which complete
openness and disclosure could inhibit, or even thwart,
the implementation of their public purpose.
Suppose, for example, a central bank that operated
by targeting the foreign exchange rate decided that it
might be appropriate to change the target rate at a
given point in the future. Or, to bring the discussion
closer to home, say that the central bank phrased its
policies in terms of contingency plans—that is, if
certain economic or financial conditions prevailed, a
particular action would be taken. If those decisions
were made public, markets would tend to incorporate
the changes immediately, preventing the policies from
being effectively carried out as planned.
More broadly, immediate disclosure of these types of
contingencies would tend to produce increased volatility in financial markets, as market participants reacted
1. See "Minutes of Federal Open Market Committee Meeting,"
Federal Reserve Bulletin, vol. 79 (May 1993), pp. 479-93.
1108
Federal Reserve Bulletin • December 1993
not only to actual Federal Reserve actions but also to
possible Federal Reserve actions. It is often the case
that the FOMC expresses a predisposition toward a
policy change in its directive to the Open Market Desk.
Such a predisposition, for example toward easing,
implies that the FOMC is more concerned about developments that would dictate an easing of policy rather
than a tightening and therefore wants to respond relatively promptly to information suggesting the need for
such action. We often express this predisposition without any change in instrument settings in fact resulting.
In such circumstances, the release of those directives
during the period in which they are in force would only
add to fluctuations in financial markets, moving rates
when no immediate change was intended.
As a consequence, a disclosure requirement would
impair the usefulness of the directives, as Committee
members, concerned about the announcement effect
of a directive biased either toward ease or tightening,
would tend to shy away from anything but a vote of
immediate change or of no change at the meeting. An
important element of flexibility in the current procedures would be lost, which can scarcely serve the
public interest. Immediate disclosure of the directive
would change the nature of monetary policymaking,
and it would not be a change for the better.
To repeat, as a general matter, it is desirable for
public institutions to conduct their business in the
open. The Federal Reserve endorses this principle and
adheres to it, except when doing so would prevent us
from fulfilling our fundamental mission of producing
sound public policy.
Holding open meetings of the FOMC or releasing a
videotape, audiotape, or transcript of them would so
seriously constrain the process of formulating policy
as to render those meetings nearly unproductive. The
candid airing of views, the forthright give and take,
and the tentative posing of new ideas likely would
disappear. Monetary policy would suffer and the economy with it.
Several important items currently discussed at
FOMC meetings simply could not be mentioned in
open forum. We would no longer have the benefit of
sensitive information from foreign central banks and
other official institutions or of proprietary information
from private sector sources, as we could not risk the
publication of information given us in confidence.
Moreover, to avoid creating unnecessary volatility
in financial and foreign exchange markets, the FOMC
might have to forgo explorations of the full range of
policy options. Our discussions would, in effect, become self-censored to prevent the voicing of any views
that might prove unsettling to the markets. Even a lag
in releasing a verbatim record of the meetings would
not eliminate this problem but only attenuate it. Un
conventional policy prescriptions and ruminations
about the longer-term outlook for economic and financial market developments might never be surfaced at
meetings, for fear of igniting a speculative reaction
when the discussion was disclosed.
Let me take a moment to describe more fully the
process followed at FOMC meetings to reach decisions on monetary policy. After staff presentations of
recent developments and emerging economic trends, a
roundtable discussion of all nineteen participants begins. The Reserve Bank presidents describe conditions
and developments within their districts, and both they
and the members of the Board of Governors go on to
evaluate the outlook for the U.S. economy. All members bring in, when relevant, international economic
and financial considerations. In light of this discussion,
we then consider whether the stance of monetary
policy needs to be adjusted, either immediately, or
possibly in the future under particular circumstances.
A considerable amount of free discussion and probing questioning by the participants of each other and of
key FOMC staff members takes place. In the wideranging debate, new ideas are often tested, many of
which are rejected. Ideas initiated by one participant
are frequently built upon by others. This type of
discourse is an invaluable ingredient of our policymaking process.
As I indicated before this committee last week, the
prevailing views of many participants change as evidence and insights emerge. This process has proved to
be a very effective procedure for gaining a consensus
around which a directive to the Open Market Desk can
be crafted. It could not function effectively if participants had to be concerned that their half-thoughtthrough, but nonetheless potentially valuable, notions
would soon be made public.
I fear in such a situation that the public record would
be a sterile set of bland pronouncements scarcely
capturing the necessary debates that are required of
monetary policymaking. A tendency would arise for
one-on-one premeeting discussions, with public meetings merely announcing already agreed-upon positions
or for each participant to enter the meeting with a final
position not subject to the views of others. Such a
record would be far less informative than the minutes
we currently publish.
It has been averred that, because the minutes we
release do not indicate which individuals voiced which
views at the meetings, the FOMC members themselves escape accountability for their actions. This is
contrary to fact. The vote of each FOMC member is
recorded, by name, and the reasons for that vote are
also recorded. In the case of a dissent from the
majority, the reasoning behind the vote is generally
explained separately. In the case of a vote cast with
Statements
the majority, the members review drafts of the minutes
to assure themselves that the record will accurately
reflect their views and the reasons for voting as they
did.
In both the Freedom of Information Act (FOIA) and
the Government in the Sunshine Act, the Congress
explicitly recognized that there were types of information and kinds of meetings that should be protected
from dissemination to the public. Certain exemptions
have been provided in the FOIA for information that,
for example, is of a confidential financial nature and in
the Sunshine Act for meetings that would prompt
speculation in financial markets. In the various exempted areas, it was determined that release of information would not be in the public interest. For similar
reasons, I believe that the consequences of requiring
the prompt release of a verbatim record of FOMC
meetings would most certainly not be in the nation's
best interest.
In your letter of invitation to this hearing, you also
posed several specific questions related to the maintenance of notes or records of FOMC meetings and to
the premature release of FOMC information. I would
like to turn now to the answers to those three questions.
At FOMC meetings, I take very brief, rough notes
on the views expressed by participants. These notes
assist me in keeping track of Committee sentiment as
the meeting progresses and thus in judging when a
consensus may be reached with respect to monetary
policy. After the meeting, the notes are kept in a
locked file cabinet along with other FOMC materials.
Others attending the FOMC meetings may also be
taking notes, and I am sure they will tell you about
them in their own responses. I have suggested to the
Reserve Bank presidents that they respond to your
questions regarding whatever records may be kept at
their own Banks; I will cover records made by the
Board staff" and, in particular, by the FOMC secretariat.
Some individual members of the Board staff take
handwritten notes and retain them to help them in
discharging their responsibilities. The meetings are
recorded electronically by the FOMC secretariat.
These audiotapes are used to assist in the preparation
of the minutes that are released to the public after the
subsequent meeting; thereafter, the tapes are recorded
over. In the process of putting together the minutes, an
unedited transcript is prepared from the tapes, as are
detailed notes on selected topics discussed in the
course of the meeting. These materials are generally
seen only by the staff members involved in preparing
the minutes, and the documents are kept under lock
and key by the FOMC secretariat.
With regard to your final query, on the release of
to the Congress
1109
information about FOMC meetings, I would again
state my strong view that any unauthorized release of
FOMC decisions is a very serious matter. Leaks of
FOMC proceedings are clearly unfair to the public,
potentially disruptive of the policymaking process,
and undoubtedly destructive of public confidence in
the Federal Reserve.
Any leaks that may have occurred were most
assuredly not orchestrated or directed by the FOMC.
A deliberate premature leak of information is repugnant. Our current policies that call for delayed release of information are in place for good reasons, as
I indicated previously. They are grounded on an
assumption of confidentiality; leaks undermine these
policies.
I suspect that, to an extent, what appear to be
deliberate leaks may instead represent something quite
different. In some cases, FOMC participants who
speak to the press may believe that they have revealed
nothing about recent monetary policy decisions, but
they may, in fact, have inadvertently provided enough
of a sense of the policy considerations to allow conclusions to be drawn, especially for experienced reporters speaking to several sources. This puts us in a
difficult situation. We should not reveal confidential
information about our decisions. At the same time, we
cannot, and should not, wall ourselves off entirely
from the media; it is our obligation to explain the broad
considerations that motivate monetary policy, to correct certain misimpressions, and to convey as much
information as possible, without roiling markets, creating inequities, or violating the trust of our colleagues.
The FOMC has discussed this issue extensively, and
we have taken several steps that we believe will curb
any further unauthorized release of information. We
have reemphasized the necessity of avoiding contact
with the press during the periods surrounding FOMC
meetings and of caution at other times. Moreover, it
has been made clear that any future leak from an
FOMC meeting will be followed up very aggressively—by a full investigation that will include gathering
sworn statements from all attendees.
As to whether I personally played a part in past
leaks of FOMC information, I can assure you that I
have never knowingly released to the press or to other
members of the public any information about the
results of an FOMC meeting before the formal, scheduled release. I would include one footnote to this
statement, however: From time to time, I have briefed
members of various administrations about the outcomes of FOMC meetings because that knowledge
could assist them in the formulation of government
policies for which they have responsibility. This qualification has not, however, been a relevant one over
1110
Federal Reserve Bulletin • December 1993
the past year or so, as the Federal Reserve has not
altered its instrument settings.
I trust the problem of leaks is behind us. If I am
wrong about this, the FOMC's policy on delayed
disclosure of decisions will have to be reevaluated.
Should we have to change our policy as a result, it
would be unfortunate, for I firmly believe that a shift to
prompter disclosure of the substance of our deliberations will adversely affect our discussions and decisions and therefore monetary policy itself.
•
Statement by David W. Mullins, Jr., Vice Chairman,
Board of Governors of the Federal Reserve
System,
before the Committee on Banking, Finance and Urban
Affairs, U.S. House of Representatives,
October 19,
1993
cussions would only serve to focus attention on the
sensational—the differences in opinion, the fears
about individual institutions, and the concerns about
worst-case scenarios—that normally have little consequence on net to the setting of policy and that would
distract people from more fundamental issues, almost
certainly heightening market volatility.
Secondly, and this is generalizing from a frustration
that I likely share with anyone who has sat in many
public meetings, the prospect of detailed and complete
exposure tends to cast a chill on some proceedings. A
speaker has to weigh the effects of every word, guarding against the possibility that subtle distinctions in
opinion or conditional speculations will be splashed
about the newspapers. One possible outcome of this
fear of unfortunate headlines is that the critical conduct of policy gets pushed onto the sidelines, where
fewer people can participate. The result could be less
public disclosure of the policy process. My chief
concern is that the quality of policymaking would
suffer, with adverse consequences for the nation. If
too many participants in a deliberative group speak to
the record rather than to each other, innovative ideas
do not get their due and the search for a consensus
settles too quickly on the status quo or the easiest,
though not the best, solutions.
I appreciate your invitation to report my views on that
portion of H.R.28, The Federal Reserve System Accountability Act, dealing with disclosure. I would like
to offer this committee a perspective that was gained
from my career both inside and outside the Beltway.
Before I arrived in Washington, I taught and conducted research in financial economics for more than a
decade. Many of my professional writings explored
the estimable ability of financial market participants to
absorb and interpret information and then reflect that
knowledge in market prices. As a policymaker in
Washington, serving in a variety of jobs at the Treasury and the Federal Reserve, I have been exposed to
the flow of confidential intelligence on the condition of
financial institutions, the settings of policy instruments, contingency plans for a wide array of conceivable emergencies, the views of other agencies, and the
operations of foreign official institutions. I have routinely participated in meetings with other officials and
staff members of the Federal Reserve, the Congress,
the Treasury, and banking and securities regulators, as
well as representatives of foreign governments and
international institutions. From this experience I
would respectfully offer three points.
First, what often makes news is not always informative. As the members of this panel are well aware,
part of the deliberative process is actually thinking out
loud. In my current role, whether in meetings of the
Board or the Federal Open Market Committee
(FOMC) or in less formal settings, I routinely engage
in dialogues with others who are concerned about the
nation's interest, exchanging views on possible policy
options, planning for contingencies that none of us
hope will happen but that must not catch us unprepared, and contemplating the market's reaction to
what we might do. Much of the job of a central banker
involves worrying about events that have a small
probability of occurrence but would impose large costs
on the financial system and the economy were they to
occur. Unfortunately, the public release of such dis-
Third, from my experience, the monetary policy
process is open where it counts. Our actions matter,
not just our deliberations. It is our actions that affect
interest rates and the economy, and those actions are
made public immediately. Changes in reserve conditions are transparent to the market by 11:30 a.m. on
the day of the change in the open forum of the financial
market. The reasons for the action are laid out in the
minutes of the meeting that are released just six weeks
later, and all votes are tallied and dissents explained.
Discount rate changes are also publicly announced. To
provide a broader overview to the Congress, the
Chairman of the Federal Reserve offers a semiannual
review to members of the Banking Committee and
their counterparts in the Senate encompassing recent
policy decisions, a summary of the economic forecasts
of members of the Board and Reserve Bank presidents, and plans for policy for the coming year. On a
more irregular schedule, members of the Board, Reserve Bank presidents, and officials of the Federal
Statements
to the Congress
1111
Reserve System often sit before committees of the
Congress to discuss aspects of monetary policy.
Meanwhile, System staff members produce a steady
stream of analyses of the economy and critiques of
policy that are published in the Federal
Reserve
Bulletin, Reserve Bank reviews, and the academic
press.
To sum up my views on the issue of disclosure, the
central concern is the quality of monetary policy
decisionmaking, which depends upon the effectiveness
of the FOMC deliberative process. I believe that a
substantial degree of confidentiality is necessary to
ensure the effectiveness of this deliberative process. It
is my view that, on the whole, the current process
works well and proposed substantial changes in disclosure of FOMC deliberations would threaten the
quality of monetary policy decisions, and therefore
such proposed changes would not, in my view, serve
the public interest.
With respect to the other information requested in
your letter of invitation, during FOMC meetings I do
occasionally note very rough summary observations,
which are subsequently kept in my locked confidential
files and are destroyed after approximately one year's
time. I also keep edited notes of some of my personal
oral interventions in the FOMC meetings in my locked
files. I have observed others present at FOMC meetings occasionally engaged in notetaking as well. As I
believe Chairman Greenspan plans to discuss, I am
aware that FOMC staff members do retain some
detailed, though edited, notes and rough transcripts
for use in preparation of FOMC minutes.
As for your third question, I do not know of any
case of willful or intentional leaking of confidential
FOMC information to the press or the public, although
I am aware that there has been confidential communication with appropriate senior administration officials.
Although all involved are very careful to avoid release
of confidential information, it is possible that leaked
stories may have resulted from inadvertence or skillful
inferences. In my view, it is imperative that we ensure
the confidentiality of FOMC information, and I can
assure the committee that we are making every effort
to do so.
•
Statement by Wayne D. Angell, Member, Board of
Governors of the Federal Reserve System, before the
Committee on Banking, Finance and Urban Affairs,
U.S. House of Representatives,
October 19, 1993
by exempting the budget of the Federal Reserve
System from congressional appropriations of funds.
But at the same time, the Congress has provided for
full accountability of monetary policy. As you know,
the Board of Governors is required to report to the
Congress on its monetary policy plans and objectives
twice each year. In hearings before this committee and
the corresponding body in the Senate, the Chairman of
the Board presents testimony on the monetary policy
report and responds fully to your questions on monetary policy. Federal Reserve policymakers also testify
as requested before this committee and other congressional committees about monetary policy and other
matters of interest, including a detailed accounting of
our expenditures.
Beyond the statutory requirements, the Federal
Reserve provides significant additional information to
the public about the conduct of monetary policy. In
particular, the Federal Open Market Committee
(FOMC) publishes minutes of each of its meetings.
These minutes summarize fully the discussion and
indicate the attendance at the meetings. They show the
results of all recorded votes, including statements that
explain dissenting votes. Significant decisions taken
by the FOMC should always be made on the basis of
recorded votes—in accord with an important principle
of accountability. Each member of the Committee is
afforded an opportunity to participate in the preparation of the minutes so that no individual or shared
I appreciate this opportunity to give you my views on
the accountability of monetary policy. As I have
indicated previously in correspondence with you, my
perspective is of one who throughout his career as an
elected and appointed official has been in favor of
opening government proceedings to the public and the
press. Our democracy demands that the actions of its
government be conducted "in the sunshine" to the
greatest extent possible to ensure that the process of
public policy formulation is appropriate and equitable;
it also demands that government agencies adopt the
very best policies. In some cases, there is a tradeoff
between these two objectives. As my statement will
explain, I believe the current legislative requirements
for monetary policy accountability and the Federal
Reserve's current policies regarding the provision of
monetary policy information strike a reasonable balance between these objectives.
Monetary policy is best formulated within a framework that provides an appropriate degree of insulation
from day-to-day political pressures while requiring full
accountability. The Congress gave the Federal Reserve some insulation, for example, by establishing
long terms for members of the Board of Governors and
1112
Federal Reserve Bulletin • December 1993
views are omitted. In my view, the minutes present an
accurate account of each FOMC meeting.
With regard to the timeliness of the release of such
minutes, as you know they are published shortly after
the following Committee meeting. It seems to me that
such a lag is appropriate. The immediate release of
information on the Committee's plans for contingencies could increase market volatility, particularly in
circumstances when the contingencies do not eventuate. Such volatility is unnecessary and could be especially counterproductive if concerns about possible
volatility deterred some members of the Federal Open
Market Committee from discussing such contingencies
or drove them to relying on implicit or behind-thescenes understandings. On balance, the market and
the public are better served by more detail and more
openness with delayed publication as compared with
the realistic alternative of less specificity that would
likely accompany earlier publication.
Similarly, I believe that provisions in the Federal
Reserve System Accountability Act (H.R.28) that
would require release of videotapes or transcripts of
Committee meetings would have deleterious consequences. In any setting, the recognition that one's
remarks will be reported verbatim will dampen participation of most members in the discussion. In the
context of monetary policy, such provisions likely
would cause many policymakers to be much less
willing to conjecture about future economic and financial developments, to explore alternative policies, or
to challenge others' views. Under those conditions,
discussions during FOMC meetings are less likely to
lead to appropriate policy decisions. The willingness
of individual members to explore verbally what may
seem to be low probability events may be the beginning of a new perspective that elicits more careful
watching and continued debate. The process of devel-
Statement by Edward W. Kelly, Jr., Member, Board of
Governors of the Federal Reserve System, before the
Committee on Banking, Finance and Urban Affairs,
U.S. House of Representatives,
October 19, 1993
Thank you for an opportunity to present my views on
H.R.28, the Federal Reserve System Accountability
Act of 1993. Pursuant to the request in the Chairman's
letter of invitation, I shall first answer, in order, the
three specific questions posed therein and then offer
my perspectives on the bill in the area of maintaining a
record of the Federal Open Market Committee
(FOMC) meetings.
oping a consensus view through an open contrarian
forum is essential if monetary policy is to lead toward
monetary stability.
For these reasons, I believe that the relevant provisions of H.R.28 would do little to make the monetary
policy process more transparent and, unfortunately,
would do much to make the conduct of monetary
policy less effective. In my view, our current procedures regarding disclosure are on the right track: They
permit a careful review of alternative policies while
allowing the Congress and the public to analyze both
the process by which our decisions are reached and
their results.
Besides soliciting my comments on the accountability of monetary policy, you also asked about notes or
records regarding FOMC meetings and about premature release of information pertaining to the discussion
at such meetings. It has been my practice to take
sketchy notes during the course of FOMC meetings;
the notes are kept, solely for my own use, in a locked
file cabinet in my office at the Federal Reserve. Others
may also take notes, but I have no information regarding the location and disposition, and I assume the
others will answer your question themselves. Some
years ago I became aware of the existence of rough
transcripts of the meetings when I was writing a
dissenting statement. The Secretary of the FOMC
made available to me a transcript of my statements,
and only my statements, from the previous meeting.
With regard to premature disclosure of confidential
FOMC information, over the years I have been troubled by the appearance in the press of information that
serves to give credence to conjecture and thereby
damages Federal Reserve credibility. I have no knowledge as to the source of such information.
Thank you again for the opportunity to testify on
this important subject.
•
Question 1: I have generated rough pencil notes of
my own thoughts, and summaries of the views of other
members as I understood them, at most meetings.
These notes reside in a locked file in my office.
Question 2: I would assume that various persons
present at the meetings prepare and keep notes and
records of their own, including the FOMC secretariat,
but I am unaware of specifically who does what in this
regard. Doubtless others will report on their own
activities.
Question 3:1 have no information whatsoever about
unauthorized or premature release of FOMC information.
Let me move on to comment on H.R.28, which
Statements
would require, among other things, complete release
of FOMC meeting proceedings within sixty days. I
must oppose this proposal.
It seems to me that the issue here is the reconciliation of two basic principles for conducting public
business in a democracy. The first is the obvious
requirement that public policy be generated to further
the public interest in the soundest possible way. The
second is that the public has the right to know what its
leaders are doing in the conduct of its business,
including how and why they are doing it. Although
these two principles can often be fully accommodated,
there are clearly cases wherein the second, fully
implemented, can potentially degrade the first. In such
cases, the overriding requirement is that public policy
must be of the highest possible quality.
The meetings of the FOMC are such a case. In these
meetings twelve voting members, augmented by the
seven additional Reserve Bank presidents, debate and
decide important public matters of monetary policy.
To work well, such arrangements must proceed in
private, where the participants may freely and easily
exchange perspectives and confidential information,
dispute, alter viewpoints, and work toward discovery
of common ground. In this manner, responsible public
Statement by John P. LaWare, Member, Board of
Governors of the Federal Reserve System, before the
Committee on Banking, Finance and Urban Affairs,
U.S. House of Representatives,
October 19, 1993
I am here with my Federal Open Market Committee
(FOMC) colleagues to comment on the initiatives in
H.R.28 that are purportedly designed to improve the
accountability of the Federal Open Market Committee
for monetary policy. Specifically, you have asked for
comment on the proposed requirement for a full and
timely accounting of each FOMC meeting.
I would strongly urge that the committee continue,
as in the past, to concentrate its appropriate oversight
efforts on the substance of monetary policy rather than
on the procedures by which it is determined. The
mandated Humphrey-Hawkins testimony, presented
twice a year and intensely scrutinized and analyzed by
the Congress and the media, provides a rather full
description of policy moves, historic economic performance, and future objectives for policy, expressed in
terms prescribed by the statute. It is perhaps the
fullest public accounting of monetary policy provided
by any central bank in the world.
I can honestly see no purpose to be gained by
publication of a verbatim transcript of the Federal
to the Congress
1113
policy is created. To expose this process to public
scrutiny would, in my view, very clearly introduce an
atmosphere that would be detrimental to the final
result. The quality of the final result, sound monetary
policy to undergird and support our economy, is the
most important of the interests in question. I believe
that H.R.28 would be counterproductive in this respect.
The requirement remains that the public be as
informed as possible in these matters and that those
involved in the process be accountable. I believe that
the existing procedures for release of FOMC decisions
are responsive to the public's right to be informed.
Concerning accountability, FOMC decisions are the
result of the votes of the participating members, and
each participant's vote is recorded and made public.
Affirmative votes are explained in the minutes as
released, and dissenting votes are accompanied by
individual explanations. Thus, there is complete accountability for results.
In summary, I feel that the public's interest in this
matter is best served by maintaining a system wherein
the process is confidential and the policy results are
made public in appropriate ways, with personal and
group accountability for such results.
•
Open Market Committee's deliberations and even less
purpose in a videotape record of the proceedings,
which might provide prime time competition for congressional committee hearings and speeches on the
floor of the House, which I do not believe have
particularly high ratings.
A verbatim transcript or a videotape recording of
the meetings of the Federal Open Market Committee
might significantly inhibit the members from the free
exchange of ideas, which presently characterizes our
meetings. We are, after all, human, and we all have a
certain amount of self-consciousness about being "on
stage," as we would certainly be under the suggested
protocol. This problem would be heightened by the
knowledge that the matters under discussion are
highly sensitive for financial markets here and around
the world. Consultation "in camera" gives the members of the Federal Open Market Committee the same
privileges of open communication and free exchange
enjoyed by juries. Importantly, it also gives the Committee members the same right to change their minds
as jurors enjoy. I cannot imagine how juries might
deliberate in the presence of a scribe or a tape recorder
or a video camera. I am sure that the quality of jury
decisions would be significantly changed. I am equally
sure that the process of developing monetary policy
1114
Federal Reserve Bulletin • December 1993
would suffer under such a regime of public performance.
I am much less concerned that the quality of policy
decisions would be adversely affected by a memorandum of discussion carefully edited to delete marketsensitive information provided on a confidential basis
and released on some delayed schedule, perhaps one
year after the meeting it described. Even there, some
behavioral change on the part of members of the
Federal Open Market Committee could be expected,
but I would not think it would be sufficient to significantly inhibit the deliberations of the Committee or
alter the course of policy.
Finally, the issue of the timely release of the directive for open market operations is a tricky one. On the
one hand, the market knows at 11:30 a.m. or so the
morning after the FOMC meetings whether there has
been a policy shift. This is almost immediately discernible from the way the Desk at the Federal Reserve
Bank of New York enters the market. So, from this
perspective, little is to be gained or lost from the
publication of FOMC decisions within a week, as
proposed under H.R.28. On the other hand, immediate release of the directive would probably discourage the use of asymmetric language in the directive
because asymmetry reflects the tilt of the Committee
either toward ease or tightening. Markets might react
Statement
by Lawrence
B. Lindsey,
Member,
Board of Governors of the Federal Reserve
System,
before the Committee
on Banking, Finance and
Urban Affairs, U.S. House of
Representatives,
October 19, 1993
I appreciate this opportunity to comment on provisions of the Federal Reserve System Accountability
Act (H.R.28) that pertain to the release of information
on monetary policy.
The Federal Reserve currently provides a great
deal of information to the public about the monetary
policymaking process both formally and informally.
We report to the Congress semiannually on our
objectives and plans for monetary policy, and we
provide additional testimony on request. We publish
a considerable volume of timely data on our monetary policy actions. In addition, we publish minutes
of each Federal Open Market Committee (FOMC)
meeting shortly after the following meeting. These
minutes fully summarize the discussion at Committee
meetings and are reasonably timely. Federal Reserve
officials frequently discuss the economic situation
and monetary policy in informal contacts with mem-
impulsively on such news, to no one's best interest
except speculators. And, internally, such a stricture
against asymmetric language would inhibit quick
intermeeting response to changing market conditions.
As to the three specific questions in your letter of
invitation:
1. I make no notes at FOMC meetings other than
brief bullet points to outline my own comments to
assure coherence. These, together with all analytical
materials supplied by the staff before the meeting, are
given by me to my executive assistant for destruction
as soon as the FOMC meeting adjourns.
2. I have no knowledge of notes or records made or
retained by other members of the Committee.
3. I have no knowledge of the source of the notorious "leaks" of FOMC information. Such leaks are
irresponsible and reprehensible. If they are unintentional, they reflect a naivete that should not be allowed
to lurk anywhere near the FOMC. If they are intentional, they should be punished to the full extent of
whatever remedies are available, no matter who the
culprit may be.
I appreciate the opportunity to participate in this
hearing and look forward to answering any further
questions the committee may have.
•
bers of the Congress and with members of the
Administration and their staffs. We publish numerous articles relating to monetary policy in System
publications.
Members of the Board and presidents of Federal
Reserve Banks have an obligation to the public to
explain their policy positions, and we often therefore
speak out through speeches and other forums, not
just on monetary policy but on economic policy more
generally. We go out into communities across the
nation, partly to understand the economic circumstances and concerns of all Americans but also to
articulate the Federal Reserve's position on the
economy. For example, I have visited the fine city of
San Antonio twice during my twenty-three months as
a Governor and have met with citizens from all walks
of life to listen to their needs and to explain our
mission. In fact, in virtually every city to which I
have travelled, more than thirty in all since becoming
a Governor, I have met with local business people,
bankers, and citizens to discuss the economy and its
direct impact on their businesses and daily lives. I
consider the process of carrying on a public dialogue
to be central to my responsibilities. There are no
Statements
to the Congress
1115
mysteries regarding my position or thinking. And I
believe the same is true of my colleagues.
In my view, the provisions of the proposed legislation directed at increasing the availability of information on monetary policy probably would suffer
from the law of unintended consequences. Videotaping FOMC meetings would likely reduce the usefulness of these meetings considerably. Participants
would hesitate to use hypothetical or speculative
examples to explain points because these examples
could be misinterpreted and cause unnecessary volatility in the financial markets. Information learned
from meetings and travels is often proprietary in
nature and thus could not be shared if the meetings
were taped. More generally, the give and take in the
discussion among policymakers would be sharply
reduced. Policy discussions would tend to take place
outside Committee meetings, and members of the
Board and Reserve Bank presidents would come into
meetings with preconceived views to a much greater
degree than is the case currently. Videotapes of these
meetings might, in fact, consist of nothing more than
prepared speeches by the Board members and Reserve Bank Presidents.
The ideas that arise in the current process of open,
candid discussion would no longer be produced at
Committee meetings and thus would not be reported in
FOMC minutes. Their loss would limit the flexibility
and give and take of the policy process and in so doing
produce the unintended consequence of actually reducing the net amount of publicly available informed
debate on monetary policy.
I am also skeptical that, on balance, immediate
release of the directive would be useful. Although
there may be some advantages, there are also costs.
Under current procedures, market participants and
others are able to recognize an actual shift in the
Federal Reserve's policy stance on the morning that
the change is implemented. Thus, an immediate verbal
statement on policy changes would provide no additional information to the market. A requirement to
publish information could be damaging in cases in
which policy contingencies are part of the FOMC
directive. In fact, increased market volatility could
potentially result because of market speculation.
Moreover, such a requirement could diminish the
Committee's ability to provide instructions to the
Federal Reserve Bank of New York to respond to
contingencies, potentially hobbling the Federal Reserve's ability to resolve financial crises.
Let me turn next to the three specific questions that
you posed in your letter of invitation to this hearing.
First, I do take very sketchy notes during FOMC
meetings to help organize my own comments. These
notes are discarded by me after each meeting. Second,
I believe that others will be describing their own
notetaking practices and that the Chairman will describe the notetaking process of the FOMC Secretariat. Finally, I have no information for the committee
on any premature release of FOMC confidential material.
In summary, I believe that there will always be a
tension between the benefits of an open and ongoing
public debate on economic policy and the benefits of
confidentiality. Although the current system is imperfect, it is probably better than resolving the current
tension in favor of either fuller openness or greater
confidentiality.
•
Statement by Susan M. Phillips, Member, Board of
Governors of the Federal Reserve System, before the
Committee on Banking, Finance and Urban Affairs,
U.S. House of Representatives,
October 19, 1993
monetary policy. This information gathering or economic monitoring is done through a variety of means—
advisory and consultative committees to the Board
and individual Reserve Banks, studies requiring specialized surveys or data gathering, financial reports
submitted to the Board as part of the regulatory
oversight process, Reserve Bank reports, and the
various analyses and studies undertaken as background for the Beige Book and staff FOMC documents. The cooperation received by the Federal Reserve System in this enormous task of economic
monitoring is no doubt attributable to the serious
manner, and in some cases the confidentiality, in
which business and economic information is treated by
the Board and the Reserve Banks. This cooperation
demonstrates considerable confidence in the FOMC's
processes and is likely bolstered by the unique quasi-
I am pleased to have the opportunity to appear before
this committee to present my views on the reporting of
Federal Open Market Committee (FOMC) actions,
with specific reference to sections of H.R.28, Federal
Reserve System Accountability Act of 1993, that focus
on maintaining a record of the FOMC meetings. I am
the newest member of the Board of Governors and am
therefore also a voting member of the FOMC.
Since joining the Federal Reserve Board, I have
been deeply impressed by the care and attention given
throughout the System to the incorporation of a broad
range of viewpoints in the development and conduct of
1116
Federal Reserve Bulletin • December 1993
public organizational structure of the Federal Reserve
System, carefully crafted by the Congress to contain
an inherent number of checks and balances, with the
private sector an integral part of the System.
The manner in which the Board and the FOMC
communicate with the markets and the public is crucial not only to maintain trust and confidence in the
nation's central bank but also to assist members of the
FOMC in gathering sufficient information to assess the
various trends in both the real and financial sectors of
the economy. The ability to receive and relay to the
FOMC confidential financial information is vital to a
full understanding of the complex U.S. economy. I
believe that releasing a literal transcription or videotape of the meetings would seriously inhibit members'
abilities to obtain and relate such information because
of its potential market sensitivity.
A videotape or transcript also could have other
harmful effects on the nature of discussions at FOMC
meetings. The structure of those meetings allows all
Board members and Bank presidents an opportunity to
present their views. These voting and nonvoting members come from very diverse backgrounds, representing different parts of the country and varying perspectives on the macroeconomy and the operation of
monetary policy. The process of explaining different
viewpoints and reconciling them requires significant
explanations and considerable give and take. Efforts
are made by members to compare and contrast their
particular regional or economic observations with
those of other members, rendering the use of complete
prepared statements extremely difficult. If a literal
transcript or videotape of FOMC meetings were to be
released, I believe many members would feel constrained to speak only from prepared statements,
thereby losing the analytical approach now used in
building upon each other's observations in a truly
deliberative process. Moreover, there would be reduced capability to reach a consensus, as members'
initial statements may limit their flexibility to adjust
their positions. The current approach to constructing
and releasing the minutes, which allows complete
recordation of the subjects discussed and views presented without specific attribution, contributes to this
analytical deliberative process. All members have an
opportunity to edit the minutes before the next meeting.
I review the draft to ensure that my own views are
adequately reflected in the minutes and make editorial
suggestions as appropriate. To assist in this process, I
take sporadic personal notes during some parts of the
FOMC meetings to remind myself of, for example,
economic conditions noted by other members and my
own positions on various issues. Those handwritten
notes are retained in my personal confidential files,
shared with no one. I presume other members will
comment on their own or their staff members' notes.
The preparation, circulation, and editing of the
minutes takes some time, but in any case the process is
complete before the next meeting. I know of no one
who shares this information with members of the
public or the press before its official release.
Earlier release of the minutes, or very rapid release of the Committee's decisions and directives,
would curtail the flexibility of the Committee's decisions. Those directives frequently contain or reference longer-run strategies the Committee wishes to
adopt, although the precise form those strategies
would take depends on subsequent economic developments. N o major market participant can announce
its future strategy without having an impact on the
market itself. Such announcements would be selfdefeating and would limit the Federal Reserve's
flexibilities and ability to affect the market when it
wishes to do so.
I hope these comments are helpful to the committee
in its deliberations. I would be pleased to respond to
additional questions.
•
Statement by Richard F. Syron, President,
Federal
Reserve Bank of Boston, before the Committee on
Banking, Finance and Urban Affairs, U.S. House of
Representatives,
October 19, 1993
made more public. However, the key issue to me is
what will provide the best policy for the people of the
United States and of the First District. I believe there
are difficult trade-offs between openness and the effectiveness of the deliberations that lead to monetary
policy. I would like to mention two specific reasons
that contribute to this trade-off.
Thank you for this opportunity to share my views on
maintaining a more extensive record of Federal Open
Market Committee (FOMC) meetings.
Being involved in the making of monetary policy is
a great honor and something in which I take deep
personal pride. Thus, from a purely personal perspective, I might welcome my views and positions being
First, I am concerned that a highly detailed accounting of FOMC deliberations, unless its release were
delayed several years, would impair the ability of the
FOMC to obtain and discuss confidential information
on individual companies and foreign central banks—
Statements
to the Congress
1117
information that is essential to conducting monetary
policy.
New England's experience in the recent recession is
a relevant case in point. The recession began earlier in
New England, and proportionately many more jobs
were lost in the region than in the rest of the country.
As a consequence, some problems surfaced in New
England before they emerged elsewhere.
For example, the difficulties experienced by New
England banks contributed to a "credit crunch" for
small and medium-sized businesses. These problems
were discussed at FOMC meetings and helped shape
policy. It would not have been possible to convey the
seriousness of the banking problems in New England,
the potential for reduced credit availability, and its
impact on the economy as a whole without reference
to individual borrowers and lenders. Yet to make such
information public would have violated confidences;
indeed, much information would never have been
volunteered, and our understanding of the problems
would have suffered greatly. Again, trade-offs are
involved: The more specific are the references in the
record of FOMC deliberations, the longer would be
the time lag required before disclosure if access to
valuable but confidential information on individual
companies is to be maintained and used.
Second, much of the discussion and economic
information disclosed in FOMC meetings pertains to
the valuation of assets priced continuously in world
financial markets. Fluctuations in asset values can
have a significant impact on the jobs of workers and
on the incomes of investors. Public disclosure of
preliminary and exploratory FOMC discussions
could generate unintended value changes that could
lead to harmful reactions and unnecessary volatility
in the economy.
In summary, the ultimate objective of monetary
policy is to promote the highest standard of living
possible for Americans. The policymaking process
should be as open as it can be, without diminishing our
ability to achieve that objective.
In regard to the three specific questions you posed,
I generally take rough, handwritten notes at FOMC
meetings; these notes are subsequently kept in a
locked drawer. Any notes taken by the senior economist accompanying me are also kept securely or
disposed of according to procedures governing confidential documents. Except for the Secretary's maintenance of Committee records, I have no direct information about how others may keep notes. I have no
information about individuals imparting information
about FOMC meetings before official release.
•
Statement by William J. McDonough, President, Federal Reserve Bank of New York, before the Committee
on Banking, Finance and Urban Affairs, U.S. House
of Representatives,
October 19, 1993
Manager of the Federal Reserve System Open Market Account with responsibility for the day-to-day
execution of FOMC decisions. In the hope of adding
some specialized value to the committee's consideration, I will direct my consideration to the market
effect of one aspect of H.R.28, release of the policy
decision of the FOMC within seven days as compared with the releases of the directive the Friday
after the subsequent meeting, that is, with a delay of
about seven weeks.
We all may have differing views either in general or
from time to time regarding the right direction of
monetary policy. But whatever these views, the actual
carrying out of monetary policy in the best interest of
the American people must involve flexibility. Why?
It is frequently the case that the right monetary
policy conclusion is not an immediate change in policy. On occasion, the FOMC decides that there should
be a tilt between meetings towards a shift in monetary
policy; that tilt may or may not result in an actual
policy change, depending on how circumstances in
the economy and in financial markets play out. The
present policy of releasing the minutes and the directive after the following meeting permits this flexibility
because by the time of release under the present
You invited me to appear before the committee to
present my independent views regarding the accounting of Federal Open Market Committee (FOMC) meetings. As you know, it is not possible for me to appear
at the hearings, but I submit herewith my views, as
well as the answers to three questions to me in your
letter of September 20.
I believe that the primary responsibility of the
Federal Open Market Committee is to develop and
carry out a monetary policy that contributes to sustained economic growth with price stability. Therefore, I address myself to the question before us guided
essentially by whether the present accounting of the
FOMC meetings is more or less supportive of that
responsibility than would be the case under the provisions proposed in the legislation being considered,
H.R.28.
Besides serving as president of the Federal Reserve Bank of N e w York and vice chairman of the
FOMC, I also bring to this consideration a period as
1118
Federal Reserve Bulletin • December 1993
policy, it is a clear fact whether policy has been
changed or not.
A person who has not spent much of his or her life
in these markets may say that nothing would be lost by
immediate disclosure. That is simply not so. I can
assure the committee, based on more than two decades of private sector experience in financial markets,
that the disclosure of an FOMC policy tilt would be
translated by the financial markets, in moments after
the release, to an execution of the policy shift. A
policy change that the FOMC thought might make
sense only if certain economic circumstances evolve
would become an executed policy as market participants acted instantly to either profit or avoid loss. In
other words, market participants would immediately
assume that the policy tilt would become reality and
protect themselves by immediately moving market
rates accordingly. With that being the case, the FOMC
would be deprived of the intermeeting flexibility that I
believe is essential for carrying out the optimum
monetary policy. The Committee would be convinced
that it could not choose a tilt, even if it thought a tilt
was the right decision. The FOMC would be left with
only the binary choice of maintaining present policy or
changing it immediately. Monetary policy is simply
too important to the good of the American people to
force it into that kind of arbitrary and inappropriate
straightjacket. The greater good of the best monetary
policy that the FOMC can devise and carry out must
be given priority over a great, but lesser, good of
immediately informing the public.
You asked that I also respond to three specific
questions included in your letter to me of September
20. I provided these answers as follows:
First, I have made no notes or records of the FOMC
meetings I have attended.
Second, an officer of the Open Market Function at
the New York Fed attends the FOMC meetings to
provide backup for the Manager for Domestic Operations. That officer prepares informal written notes
during the meeting that are not intended to be a record
of events but rather a guide to the officers of the
Federal Open Market Committee in the day-to-day
management of the account between meetings. These
notes are given very limited distribution within the
New York Fed: to the president, the first vice president, the general counsel, and the other System account officers, a total of about seven people. Recipients return the notes to the officer who has prepared
them, and they are immediately destroyed. N o file is
maintained.
Statement by Edward G. Boehne, President, Federal
Reserve Bank of Philadelphia, before the Committee
on Banking, Finance and Urban Affairs, U.S. House
of Representatives,
October 19, 1993
to speculate about the effects of alternative policies,
the general give and take among members, and the
ability to reach a consensus. The challenge is how to
maintain an effective deliberative process and still
achieve meaningful disclosure and accountability. I
believe that the FOMC's existing procedures provide a
workable balance between the need for a process that
allows for the formulation of an effective monetary
policy and the need for public disclosure and accountability.
I am pleased to testify on the provisions of section 4 of
H.R.28, the Federal Reserve System Accountability
Act of 1993, that involve public disclosure of Federal
Open Market Committee (FOMC) meetings.
Let me begin by saying that I take very seriously my
role in FOMC proceedings and have a natural bias
toward public disclosure and personal accountability.
I also take seriously the collective responsibility of the
FOMC to formulate the best possible monetary policy.
An essential ingredient in formulating the best possible
monetary policy is an effective deliberative process—
one that fosters the free flow of information, the ability
The research director of the New York Fed is my
principal adviser on monetary policy matters. He
attends the FOMC meetings and keeps handwritten
notes; these notes are not transcribed and are kept in
the Research Director's own files, not those of the
Research Group.
I have no personal knowledge of any other notes or
records that others may have made at FOMC meetings
or the release of FOMC meeting information before
the official release of that information.
As president of the Federal Reserve Bank of New
York, I appreciate this opportunity to address myself
to the committee. The Federal Reserve was created by
the Congress, and we are accountable to the American
people through the Congress as the people's elected
representatives. I hope that these comments are helpful to you in your deliberations.
•
Let me comment briefly on the specific provisions of
the bill. I believe that the FOMC already complies
with the provision of H.R.28 that requires that a
written copy of the minutes of each FOMC meeting be
made available to the public within sixty days of the
meeting. The FOMC currently releases minutes of its
meetings six to eight weeks after each meeting, which
Statements
is consistent with the bill's proposed sixty-day period.
For those who read them regularly, these minutes are
quite comprehensive. They include information about
current and prospective economic and financial conditions, the pros and cons of alternative policy actions,
the reasons why a majority favored a particular action,
plus comments, by name, of those members dissenting.
The minutes the Committee now releases are not as
detailed as the Memorandum of Discussion that was
released before 1976. But in my view the old memorandum had some disadvantages that hindered the
FOMC's deliberative process. I attended FOMC meetings in the early 1970s when the memorandum was still
being prepared. At those meetings, as I recall, members of the Committee tended to stick to their prepared
statements, and there was less give and take about
alternative views of the economy and policy options.
This occurred even though the memorandum was
released only with a long lag of five years. I believe
that the current arrangement of releasing the minutes
of the FOMC meeting in summary form—but much
more promptly than the memorandum—has served the
deliberative process well, while at the same time
providing relatively prompt public disclosure.
For the same reasons, I believe that the bill's
provisions to require a verbatim transcript or videotape of each meeting would impede the FOMC's
deliberative process. They would tend to lock members into prepared statements and reduce the give and
take of discussion. Innovative proposals could easily
be stifled. Members would be less willing to play
Statement by Jerry L. Jordan, President,
Federal
Reserve Bank of Cleveland, before the Committee on
Banking, Finance and Urban Affairs, U.S. House of
Representatives,
October 19, 1993
I welcome the opportunity to appear before you this
morning to discuss the release of information about the
meetings of the Federal Open Market Committee
(FOMC).
Before I respond to the three specific questions
raised in your letter of September 24, 1993, I would
like to address a general issue that I believe is highly
relevant.
The questions of what information to release and
when to release it must be answered in the context of
accountability for achieving clear, unambiguous objectives for monetary policy. If the FOMC is charged
with conflicting or unattainable objectives, discussions
about the appropriate timing and content of disclosure
to the Congress
1119
devil's advocate in proposing policy alternatives, and
the quality of monetary policy decisionmaking would
suffer accordingly.
With regard to the bill's proposal for public release
of the directive or other FOMC decisions within one
week, I believe that such a provision would not be
very helpful to the public. The directive is best read
along with minutes of the meeting. Indeed, the two are
currently released together within sixty days of each
meeting. To release the directive earlier is likely to
confuse, rather than clarify, people's perceptions of
the stance for monetary policy because they will not
have the full context in which the directive was
prepared. Consequently, I do not favor this provision
of the bill.
In your letter of invitation to appear today, you also
requested my comments on three other areas. Let me
now turn to those. First, during my tenure as president
of the Federal Reserve Bank of Philadelphia, which
began in 1981, I have not taken notes during FOMC
meetings. My economic adviser usually takes handwritten notes during meetings, which are then kept in
a locked file cabinet with other materials prepared for
each FOMC meeting. He uses these notes to identify
issues that should be investigated for future preFOMC economic briefings. And finally, I am aware, of
course, of news stories that have discussed the premature release of information about FOMC meetings.
I deplore such leaks. Security of FOMC information is
taken very seriously at the Federal Reserve Bank of
Philadelphia, and I do not have any direct knowledge
about how such leaks occurred.
•
could easily reflect misplaced priorities. The Congress
could best contribute to a clarification of the FOMC's
policy direction by enacting the Neal Resolution,
which specifies an ultimate goal of achieving the
highest sustainable rate of real economic growth
through the maintenance of purchasing power stability. The timing and content of disclosure become less
contentious issues in the presence of a credible framework for monetary policy.
Markets operate more efficiently with knowledge of
the collective thought process that generates Committee decisions. Such information allows people to deal
with uncertainties about how policy actions might
respond to unknowable future developments.
It takes some time to ensure members' agreement
on an accurate portrayal of a meeting and to remove
sensitive material. Thus, the minutes of a meeting,
describing the climate and substance of Federal Open
Market Committee decisionmaking, are released only
1120
Federal Reserve Bulletin • December 1993
after their formal acceptance, at the next regularly
scheduled meeting.
Meeting minutes are released through an orderly
process that guarantees equal access for everyone who
wants to receive them, simultaneously, at numerous
sites nationwide. In the interim before release, actions
in the open market are taken in accordance with a
publicly understood procedure. Within seconds of any
market action, electronic information services communicate the facts nationwide.
As a member of the Committee, I find it objectionable to see news stories that are not written on the
basis of the Committee's well-defined, orderly procedures for information security and release. I do not
condone the actions of individuals who unilaterally
release such information, even through inadvertence.
Chairman Greenspan indicated last week that measures have been taken to ensure that the procedures
adopted by the Committee are followed.
You have asked me to respond to three specific
questions. First, I do not take notes at an FOMC
meeting. At the first few meetings I attended in 1992,1
took a few notes during Committee meetings to remind
me later of issues raised in the course of discussion,
but soon decided that I did not need notes to remind
me of the important issues. If I want staff analyses of
theoretical or empirical issues in preparation for subsequent meetings, I discuss the issues with senior
policy advisers. All this is done in accordance with the
Committee's standard rules for maintaining confidential FOMC information. We adhere to a "need to
know" policy when relating information to research
economists conducting studies on policy issues. Second, I have not questioned any other participants in
FOMC meetings about the procedures they follow and
consequently am not aware of whether they keep
notes or records of the meetings. Finally, I have no
information about the premature disclosure of FOMC
meeting materials by anyone employed at the Federal
Reserve.
•
Statement by J. AlfredBroaddus,
Jr., President, Federal Reserve Bank of Richmond, before the Committee
on'Banking, Finance and Urban Affairs, U.S. House
of Representatives,
October 19, 1993
immediately after the meeting. It also signals, through
the symmetry or asymmetry of some of its language,
the most likely direction of any prospective changes in
policy during the period up to the next meeting.
Currently, the directive for a particular FOMC
meeting is released immediately after the next meeting
along with a record of policy actions. This record
provides a lengthy and thorough summary of the
discussion leading up to the Committee's policy decision. It indicates in considerable detail the views of
those supporting the decision and contains a full
explanation of any dissenting votes. It also lists by
name the Committee members voting for or against the
policy decision. As a long-time attendee at FOMC
meetings, I can attest that the record of policy actions
always conveys the content and flavor of the Committee's deliberations, as well as its specific decisions,
fully and accurately. In my view, the record fully
satisfies the need for the Committee to be accountable
to the public.
I am pleased to be here today to discuss the procedures that the Federal Open Market Committee
(FOMC) follows in recording policy information and
releasing it to the public. My views in this area are
based on two principles. First, these procedures
should enable us to make the best possible monetary
policy decisions. Second, in general we should release
as much information to the public on our policy
decisions as promptly as possible, provided such release does not compromise our ability to make sound
decisions. My views also reflect substantial experience
with the Committee. Although I have been in my
present position only since the beginning of the year, I
previously attended Committee meetings as an adviser
over a period of approximately twenty years.
At each FOMC meeting, the Committee reviews
current and prospective economic conditions, discusses current policy issues, and then decides on an
appropriate policy direction. This decision is communicated to the Trading Desk at the Federal Reserve
Bank of N e w York in a directive that instructs the
Desk to take actions in the money market that are
consistent with the desired policy direction. The directive is the Committee's primary policy document. It
contains the Committee's decision on whether to ease
or tighten reserve conditions or leave them unchanged
H.R.28 would change these procedures in two ways.
First, it would require that videotapes of FOMC
meetings be made and released along with verbatim
transcripts within sixty days. Second, it would require
that Committee decisions (that is, the directive) be
released within one week. Let me comment on each of
these changes.
FOMC Policy Discussions. My views on releasing
videotapes and verbatim transcripts of FOMC meetings have not changed since I responded to Chairman
Gonzalez on this issue earlier this year. I believe that
Statements
the prospect of a literal record, even if it were released
after a long period of time, inevitably would introduce
a self-consciousness into Committee proceedings that
would seriously inhibit the flow of information and
ideas. Members would almost certainly be reluctant to
speak and argue as freely and frankly as they do now
if they knew that their statements would be recorded
and released publicly. In sum, I believe that releasing
a literal record of Committee meetings in any form
would restrain Committee members in debate, undermine the deliberative process, and therefore risk lowering the quality of policy decisions.
Although I cannot support release of a videotape or
any other verbatim transcript of the FOMC meetings,
I do believe that there might be benefits from releasing
a nonliteral but relatively complete record of FOMC
proceedings similar to the "memorandum of discussion" that we prepared until 1976 if there were a long
and enforceable delay of the release. As I said in my
earlier letter, such a record would assist researchers
interested in monetary policy by helping them focus
more clearly on the issues that most concerned the
Committee at a particular meeting and by strengthening their appreciation of some of the more practical
aspects of formulating policy. Over a long period of
time it might also provide a clearer picture of the
evolution of the positions of various members of the
FOMC than is currently available, which some researchers might find useful.
I believe strongly that such a nonliteral record
should be released only after a delay of several years,
such as the five-year period in the case of the memorandum of discussion. Early release of even a nonliteral record like the memorandum could inhibit FOMC
discussion and reduce the quality of monetary policy
decisions. Consequently, I think it is essential that any
reinstitution of something like the memorandum of
discussion be accompanied by a legislative guarantee
that it would not be released prematurely.
FOMC Policy Decisions. The second change proposed in H.R.28 is to release the directive one week
after an FOMC meeting. Arguments can be made both
for and against this proposal. Earlier release would be
consistent with the general principle that we should
inform the public of policy decisions as soon as
possible. At the same time, I believe that early release
of the directive could well have announcement effects
that could create unnecessary volatility in interest
rates. The FOMC's policy decision at a particular
meeting is often conditional on economic data that
become available in the period after the meeting, and
the language of the directive frequently reflects this
conditional element. If the directive were released
to the Congress
1121
soon after the meeting, interest rates typically would
react immediately to any policy action contemplated in
the directive even though the actual policy action had
not yet been taken. If the action subsequently did not
take place, then the initial reaction of rates would be
reversed.
One can distinguish, of course, between the part of
the directive that announces the Committee's decision regarding any immediate policy actions and the
part that may predispose the Committee to undertake
a particular future action. It is the latter, conditional
part of the current directive that causes my concern
regarding financial volatility because it suggests a
direction in future policy that may or may not be
implemented subsequently. This problem could be
dealt with by removing the conditional language from
the directive. Doing so, however, could well reduce
the usefulness of the directive, both as a policy
instruction to the Trading Desk and as a focal point
for the Committee's deliberations. The Committee
would need to consider very carefully the potential
loss from changing the form of the directive before
making any such change.
Notes on FOMC Meetings. Let me respond now to
the specific questions raised in Chairman Gonzalez's
letter regarding my knowledge of notes made at
FOMC meetings. As I indicated earlier, I have attended FOMC meetings for a number of years, mostly
as the adviser to the president of the Richmond
Reserve Bank. While I was in this advisory position, I
took notes so I could serve the president more effectively. Monetary policy is a continuous process in
which particular issues, such as how to interpret the
behavior of the monetary aggregates, frequently recur
at subsequent meetings. Consequently, it is sometimes
helpful, in preparing for a meeting, to be able to review
the discussion of a particular issue at an earlier meeting. I used my notes for this purpose during my years
as an adviser. The notes were handwritten, were never
transcribed to typewritten or any other form, and were
not distributed to anyone. I have always kept these
notes in locked, confidential files. I should add that I
have taken only very partial notes since assuming my
current position at the beginning of the year. I now
rely on the notes taken by my adviser, who follows
exactly the same procedures I did.
I have only limited knowledge of notes or records
made by other FOMC participants and have not read
or used any such notes. Finally, I do not personally
know of any information that has been released by
anyone at the Federal Reserve Bank of Richmond or
elsewhere in the Federal Reserve to persons outside
the Federal Reserve before its official release.
•
1122
Federal Reserve Bulletin • December 1993
Statement by Silas Keehn, President, Federal Reserve
Bank of Chicago, before the Committee on Banking,
Finance and Urban Affairs, U.S. House of Representatives, October 19, 1993
As requested, let me briefly summarize my views on
the question of the appropriate recordkeeping and
public release of the deliberations of the Federal Open
Market Committee (FOMC).
As I stated in my letter of January 13 of this year to
the chairman of this committee, I fully support Chairman Greenspan's previously stated position on the
various proposals for maintaining and releasing a more
detailed record of the FOMC's deliberations. In my
view, the minutes of the FOMC, as they are currently
written, provide the right level of reporting and detail
necessary to communicate the current policy concerns
and actions of the Committee. The minutes explicitly
document the full range of policy arguments made
during the discussion, and when a member of the
Committee disagrees with the resulting consensus that
member's dissent becomes an integral part of the
public policy record.
Based on my participation in FOMC deliberations, I
believe that releasing more detailed minutes, most
especially a verbatim transcript of the meeting, without a significant delay would be counterproductive and
would impede the development of sound monetary
policy—first, by limiting the free flow of necessary
information into the policy process and second, by
hindering the consensus process so essential if policy
is to adequately reflect economic conditions in all
regions of the country.
As president of the Federal Reserve Bank of
Chicago, I have an important responsibility to convey to the FOMC the economic conditions of the
Seventh Federal Reserve District. To meet this responsibility, I and other senior members of our staff
maintain extensive contacts with District businesses
(large and small), community groups, and state and
local government officials. From these individuals we
are able to gather a wide array of highly significant
information about the District that cannot be derived
from the public data sources—information not only
about current economic conditions but also about
changes in business practices, future production,
labor negotiations, investment and hiring plans, and
a host of other issues that have important value to the
policy process.
This type of information is particularly important at
the present time. The economy is going through a very
different phase than any that we have experienced in
the past. Many of the economic indicators that have
been useful guideposts in developing policy in the past
are now proving unreliable. In such an environment, I
find the regional information derived from local contacts, both about the Seventh District and elsewhere in
the country, essential to the policy process. In the
context of these hearings, it is important to understand
that much of the information that these contacts provide is highly proprietary and very confidential in
nature. I have absolutely assured these contacts that
the source and nature of the data will not be divulged
in a way that they would find compromising. I have
never had anyone decline to speak with me about their
activities. If I could not provide such assurances, then
much of this significant information would not be
forthcoming and the development of monetary policy
would be impeded.
It is precisely this type of information about local
businesses, communities, and financial institutions
that demonstrates the value of the regional structure of
the Federal Reserve System and District representation on the FOMC. The impact of releasing such
information as part of the written record of the FOMC
without a significant delay would only result in the
exclusion of this vital information from the FOMC
policy discussion. In my view, this would not be in the
public interest, especially when the current system of
disclosure is able to convey an accurate description of
the key issues and arguments underlying the FOMC
decisions as well as record individual votes and dissenting positions. If it became necessary to prepare
more detailed minutes, then they should only be
released after a period of five years and with all
confidential information about individual corporations
excised, as well as confidential information about
foreign countries, foreign central banks, and international institutions.
As to the specific questions you asked us to address:
I prepare an outline of economic conditions in the
District, which forms the basis for my remarks at each
meeting of the FOMC. After the meeting, these notes
are kept secured in my office until the next meeting, at
which time I destroy them. I do not maintain notes on
the discussion that takes place at the meeting itself,
and Chairman Greenspan is in a better position to
describe the records that are kept by the FOMC
secretariat.
As to the premature release of information from the
FOMC meetings, I have not talked to the press or
other outside contacts nor to other Federal Reserve
officials who do not have authorized access to FOMC
information, and my only direct knowledge of such
premature releases arises from articles that I have seen
in various newspapers. I completely concur with
Chairman Greenspan that premature releases of this
type are highly inappropriate and totally unacceptable.
•
Statements
Statement by Thomas C. Melzer, President, Federal
Reserve Bank of St. Louis, before the Committee on
Banking, Finance and Urban Affairs, U.S. House of
Representatives,
October 19, 1993
I am pleased to appear before the committee today to
testify on section 4 of the Federal Reserve System
Accountability Act of 1993, entitled "Prompt Public
Disclosure of Open Market Committee Meetings." As
a creation of the Congress, the Federal Reserve System is fully accountable to the public for its monetary
policy actions. One way the Federal Reserve ensures
this accountability is by releasing information about its
policy decisions. The Federal Open Market Committee (FOMC) provides a full accounting of its actions in
its Minutes of the Federal Open Market Committee
(minutes).
The minutes contain all important information about
FOMC decisions, including the policy directive agreed
upon by the majority and the reasons underlying
policy decisions. Any significant differences among
those voting with the majority, as well as the views of
any dissenting members, are included in the document. The minutes are released upon their approval by
Committee members at the next FOMC meeting. The
public record thus contains the outcome of FOMC
deliberations and the policy views of each member of
the Committee.
I am not in favor of producing a further detailed
account of FOMC deliberations, either in the form of an
edited transcript, such as the "memorandum of discussion," verbatim minutes, or an audiotape or videotape.
Such a release would impede the deliberative process
and thereby impair policymaking. Arriving at appropriate policy often involves considerable give and take,
consensus building, and debate of alternative actions.
Because of the possibility that a particular statement
might be misunderstood or taken out of context, FOMC
members would be reticent to engage in the kind of
open discussion that leads to good policymaking if they
knew that all of their statements would be in the public
record. Furthermore, the release of verbatim minutes
or any other detailed record of deliberations would
discourage other parties from supplying the FOMC
with confidential information that is useful in determining appropriate policy.
Turning to the timing of the release of the FOMC
policy directives, I believe that immediate release of
the outcome of FOMC deliberations would interfere
to the Congress
1123
with the deliberative process and would lessen the
flexibility with which the Federal Reserve can respond
to changing economic conditions. If directives were
released immediately, the FOMC might be reluctant,
even if economic conditions warranted, to take a
timely subsequent action because of concern that such
action would add to the uncertainty in financial markets. In addition, the FOMC would be less inclined to
bias its directives toward ease or restraint, in effect,
limiting its policy options. Consequently, reaching a
consensus among FOMC members would be difficult
and might delay policy actions and add uncertainty to
financial markets.
Finally, let me turn to the specific questions that I
was asked to address in my statement.
• In response to your inquiry about my own notes or
records, I usually take some notes at FOMC meetings
for my personal use. They are not typed, copied, or
shared with anyone else and are maintained in a locked
file cabinet in my office.
• Your second question concerns my knowledge of
notes or records that others have made at FOMC
meetings. Although others who attend FOMC meetings sometimes appear to take notes, I am unaware of
their content, disposition, or location.
• In response to your third query, I have no knowledge about the release of information on FOMC meetings before its official release by the Federal Reserve.
To sum up, the Federal Open Market Committee is
committed to informing the public of its policies,
which ultimately must be judged by their results. The
Minutes of the Federal Open Market Committee fully
convey the relevant information about FOMC decisions and do so in a timely way. Thus, in my view,
little is to be gained by providing detailed minutes or
mechanical reproduction of FOMC deliberations because the adverse consequences of doing so are
potentially very great. In addition, the benefits of
immediate release of the policy directive would not
seem to outweigh the potential costs of doing so. By
inhibiting the frank exchange of views and possibly
reducing the willingness of the FOMC to take actions, public release of the details of Committee
deliberations or immediate release of the policy
directive could harm the policymaking process. Although the proposed changes intend to increase the
accountability of FOMC members, those specified in
H.R.28 may thus impede monetary policy performance.
•
1124
Federal Reserve Bulletin • December 1993
Statement by Gary H. Stern, President, Federal Reserve Bank of Minneapolis, before the Committee of
Banking, Finance and Urban Affairs, U.S. House of
Representatives,
October 19, 1993
I appreciate this opportunity to discuss issues related
to maintaining a record of Federal Open Market Committee (FOMC) meetings and procedures followed at
the Federal Reserve Bank of Minneapolis to handle
confidential monetary policy material. These matters
are indeed significant.
As I indicated in my January correspondence, I am
convinced that there is considerable value in our
current report of FOMC proceedings. As you know,
we release extensive minutes of each FOMC meeting
shortly after the subsequent meeting. The minutes
describe the discussion and the votes of individual
members. More specifically, they include an assessment of business conditions here and abroad, price
developments, and the performance of financial markets and monetary aggregates. They report the Committee's views of prospects for the economy and
frequently include information gleaned from personal
contacts in individual Federal Reserve Districts. The
minutes also report discussion of monetary policy
options as well as the decision ultimately reached by
the Committee, including dissents, if any, and the logic
underpinning the dissents.
In light of these minutes, I believe that the views of
the Committee members are known. In addition,
FOMC members reveal their policy positions in other
ways. Certainly, I take full responsibility for my
positions at FOMC meetings, and I have presented my
policy views in Federal Reserve Bank of Minneapolis
publications, among other places. (Two examples, one
from 1990 and one from 1993, are appended to this
document). 1 In addition, the Congress can at any time
ask us about our views, as the Senate Banking Committee did last March.
Thus, a good deal of information is available, in my
1. The attachments to this statement are available from the Federal
Reserve Bank of Minneapolis, Minneapolis, MN 55401.
Statement by Thomas M. Hoenig, President, Federal
Reserve Bank of Kansas City, before the Committee
on Banking, Finance and Urban Affairs, U.S. House
of Representatives,
October 19, 1993
My name is Thomas M. Hoenig, and I am president
of the Federal Reserve Bank of Kansas City. This
view, and I do not find merit in suggestions to
prepare and release, at any time, a literal record of
FOMC deliberations—through videotaping or other
vehicles. Three issues, in particular, concern me.
First, given the gravity of our responsibilities, I
believe it imperative that the quality of our deliberations be maintained. Open discussion of ideas, of
policy alternatives, and of significant potential risks
to the economy are critical to sound policymaking.
Second, some of the information we discuss is voluntarily provided on a confidential basis. Much of
this information would be lost if we have an obligation to respect anonymity and confidentiality. Third,
I believe that our procedures carefully balance the
need to provide information to the pubic with the
necessities of effective monetary policy. Even small
changes carry the considerable risk that they will
disturb, perhaps unknowingly and unintentionally,
this balance, with adverse consequences for financial
markets and economic performance.
As I indicated in my earlier correspondence, I
believe that there could be some merit in reintroducing
something like the "memorandum of discussion," a
very detailed, although edited, accounting of FOMC
discussions, provided that the confidentiality of such
material is assured for several years. As I see it, such
a document could be useful to historians and students
of monetary policy when they investigate the broad
context of policy decisions and the evolution of the
policymaking process.
Finally, in response to your specific inquiries about
confidentiality, I am unaware of any unauthorized
release of monetary policy information ever having
emanated from the Federal Reserve Bank of Minneapolis. My economic adviser and I leave highly
confidential material at the Board of Governors and
do not return with it to Minneapolis. I take limited
notes during the meeting, as does my adviser. All
notes and other materials are handled according to
strict guidelines, the essence of which is to limit their
distribution and access and assure proper disposal. A
copy of our Bank's procedure is appended to this
testimony.
•
Bank serves the Tenth Federal Reserve District,
which includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, the northern half of N e w Mexico,
and the western third of Missouri. I am pleased to
have the opportunity to express my views on the
disclosure of information from Federal Open Market
Committee (FOMC) meetings.
Statements
The Federal Reserve must be accountable for its
actions and has an obligation to disclose as much
information as possible about its deliberations and
decisions, subject to maintaining the highest possible
level of policy effectiveness. It is my belief that the
Federal Reserve's current disclosure policies achieve
these ends.
The current policies provide a detailed accounting of
FOMC deliberations and decisions. The minutes of
FOMC meetings are comprehensive. They document
the information considered during a meeting and the
decision of each voting member. Moreover, the minutes provide the rationale for the majority's decision
and include statements filed by members who dissent
from the majority. In addition, the Federal Reserve
reports regularly and frequently to the Congress, ensuring further that we are accountable for our monetary policy actions.
Current procedures foster an environment of open
and candid discussion among the members of the
FOMC. Valuable information from a variety of
sources is brought to the discussion, and some of it is
provided with the understanding that it be kept confidential. The give and take among members provides
an opportunity to clarify issues and allows the FOMC
to synthesize a range of views. Any proposals that
would impair this deliberative process, given current
procedures that ensure accountability, would compromise the quality and effectiveness of Federal Reserve
monetary policy.
Current procedures, in my opinion, also strike an
Statement by Robert D. McTeer, Jr., President, Federal Reserve Bank of Dallas, before the Committee on
Banking, Finance and Urban Affairs, U.S. House of
Representatives,
October 19, 1993
Thank you for your invitation to testify on H.R.28. As
requested, I will limit my testimony to the issue of
Federal Open Market Committee (FOMC) records,
although I do have opinions on other parts of H.R.28,
especially the part that puts me out of work.
I became president of the Federal Reserve Bank of
Dallas in February 1991, so I am a relative newcomer
both to the FOMC and to your great state of Texas. As
the bumper sticker says, "I wasn't born in Texas, but
I got there as soon as I could."
Before moving to Texas two and a half years ago, I
was with the Federal Reserve Bank of Richmond for
twenty-three years, the last eleven of which I served
as manager of its Baltimore Branch. I have partici-
to the Congress
1125
effective balance between timely disclosure and the
need for flexibility in the conduct of monetary policy.
These procedures, which provide for the release of the
minutes shortly after the subsequent meeting, allow
the FOMC to respond flexibly to various contingencies
over the intermeeting period. Earlier release of the
minutes would restrict this flexibility and could have
the unintended effect of contributing to market volatility.
With regard to the three specific questions posed to
me in Chairman Gonzalez's letter of September 24,
1993, my answers are as follows: First, I make brief
notes for my personal use during FOMC meetings.
Our Bank's research director also occasionally takes
notes. These notes are kept in locked files, as is other
confidential FOMC material. Second, I have observed
other participants taking notes during FOMC meetings, but I have no knowledge of their content or
disposition. Third, I have no information about the
release of information by anyone employed at the
Federal Reserve about FOMC meetings before the
official release of that information by the Federal
Reserve.
In closing, let me reiterate that I believe the FOMC
must be accountable for its actions, and I believe that
its current disclosure policies are appropriate and
effective in achieving this end. They provide the public
with comprehensive information about the FOMC's
decisions and deliberative process, and they enhance
the Federal Reserve's ability to pursue the nation's
objectives of economic growth and price stability. •
pated in FOMC meetings since 1991 but did not vote
until this year.
You asked us to respond to three specific questions
regarding notetaking in FOMC meetings. Regarding
my own practice, I do not take notes of the type I
assume you mean. I do a lot of reading and homework
before the meeting, and I go into the meeting with
some tentative ideas in mind. I doodle during our
discussion and occasionally write down a word or
phrase for reference when I speak. I do not write down
decisions because they are simple and easy to remember and come at the end of the meeting. My doodles
and notes would be of no use to traders or journalists.
I destroy them after the meeting and rely only on
official documents for future reference.
Regarding your second question, notes kept by
others, my impression is that most other FOMC members and staff members probably follow a pattern
similar to my own because all who are present pre-
1126
Federal Reserve Bulletin • December 1993
sumably have access to the official records and documents. At least, I have no knowledge to the contrary.
In answer to your third question, I have no information about the premature release of FOMC information by anyone at the Federal Reserve. Let me add
that, in my opinion, if someone wanted to leak valuable information about the Committee's decisions,
such notes would not be necessary nor even very
helpful. Although the decision process may be difficult, the decisions themselves are simple and easy to
remember. Let me comment briefly on other aspects
of meeting records. As a former economist, I have
some sympathy for the idea of immediate release of
the directive. Immediate releases of the decision
would eliminate any question of leaks or the appearance of leaks.
The practical problem with immediate release of the
directive is that not ail decisions are clear-cut decisions to ease, tighten, or remain unchanged. On occasion, the Committee votes to hold steady, pending
further information or developments, and wishes to
give the Chairman extra leeway to act on his own
before the next scheduled meeting. More often than
not, I believe, these "asymmetric directives" are not
acted on, but occasionally they are. To announce a
decision of "no change" without the proviso would be
misleading, and to announce it with the proviso would
likely cause the markets to react in a way not necessarily warranted by subsequent information.
Statement by Robert T. Parry, President,
Federal
Reserve Bank of San Francisco, before the Committee
on Banking, Finance and Urban Affairs, U.S. House
of Representatives,
October 19, 1993
As president of the Federal Reserve Bank of San
Francisco, one of my jobs is to contribute to Federal
Reserve policy deliberations with information and
ideas from my District. The Twelfth Federal Reserve
District is highly diverse: It is made up of nine western
states, which at present include three of the more
robust state economies in the country (Utah, Idaho,
and Nevada), and one of the weakest—California. In
fact, California has seen employment fall by 592,000
jobs (4.7 percent) since mid-1990.
With that introduction, I would like to express my
appreciation for this opportunity to discuss my views
on the disclosure of information about Federal Open
Market Committee (FOMC) meetings. I believe that
there should be a presumption that Federal Reserve
deliberations should be fully disclosed unless there is a
compelling reason not to do so. (I expressed this view
Given this dilemma, I believe that the current arrangement is best. Markets are able to discern the
immediate decision by watching the federal funds rate
the following morning, and we retain maximum flexibility to react to incoming data and changing circumstances without misleading anyone. Then as soon as
another meeting is behind us, we release the directive
that includes the prevailing circumstances, the rationale for the decision, and the identity of any dissenters
and their reasons for dissenting.
I, personally, have a greater problem with videotaping and verbatim transcripts of discussions than with
prompt release of decisions. I believe that videotaping
or verbatim transcripts, no matter when they are
released to the public, would diminish the quality of
our deliberations. My colleagues and I are willing to
listen to each other and adjust our initial leanings in the
interest of consensus building. We currently do not
posture for the record or for the camera. There is no
winning or losing the debate. There is no playing to the
gallery or to the folks back home. This, I am afraid,
would all change with videotaping or its equivalent.
I would much prefer present arrangements even
with more detail added, so long as the detail involves
the substance of the discussions and decisions rather
than the language used. I would also have no objection
to detailed minutes (not a verbatim transcript) being
released after a lengthy period, so long as the legal
obstacles to a decent delay could be overcome.
•
in my letter to you dated January 13, 1993.) However,
in the case of FOMC deliberations, such a compelling
reason exists. Given the importance of the decisions
being made, it is essential to ensure the effectiveness
of the decisionmaking process. To reach the best
possible policy decisions, it is important that there be
a free flow of information and ideas at each meeting.
Some of the information discussed at FOMC meetings is inherently confidential—for example, because it
pertains to individual firms and was obtained under a
promise of confidentiality, or, in some instances, because it pertains to confidential matters in other countries. Videotapes or verbatim records of our meetings
would severely limit the information that would be
brought into the decisionmaking process.
It is also important that members of the FOMC feel
free to advance their ideas in the context of a freely
flowing discussion. By the very nature of any productive discussion, some ideas are discarded or modified
in the process of reaching a consensus. Yet such
comments, which may include discussions at previous
meetings or collective institutional memories, could be
Statements
seriously misinterpreted if taken out of the full context. I am concerned that verbatim records or videotapes would inhibit the free flow of comments at our
meetings and, in the process, limit the effectiveness of
our policy discussions.
I have considered the merits of returning to detailed
nonverbatim minutes with attribution revealed after a
long delay, as was done until the mid-1970s. If it was
possible to ensure that such minutes would not be
made public for an extended period of time—say, five
years—after a meeting was held, many of my objections would be assuaged. Such records might have
value to researchers studying U.S. monetary policy.
However, I am skeptical that such delay in the release
of information could be guaranteed. Even the possibility of an early release of a transcript could hamper
the deliberations process at FOMC meetings. I might
also add that the preparation of such detailed minutes
would be very burdensome, and I am not convinced
that the social benefits would justify the costs.
Also, I believe that the minutes of FOMC meetings
that currently are made available provide an accurate
and thorough distillation of all the comments made by
me and my FOMC colleagues, while avoiding the
problems associated with direct attribution or a verbatim record. The current document accurately reflects
the issues and discussions leading to policy decisions
by clearly describing the views of the majority, as well
as contrary points raised in the discussion. Moreover,
members who dissent from the final decision of the
Committee explain their reasoning and are identified
by name in the minutes. The document covers expectations of policy over the period until the subsequent
meeting and normally is released a few days after that
subsequent meeting.
In your letter requesting me to attend this session,
you asked for information concerning notes or records
Statement by Lawrence B. Lindsey, Member, Board
of Governors of the Federal Reserve System, before
the Subcommittee on Consumer Credit and Insurance
of the Committee on Banking, Finance and Urban
Affairs, U.S. House of Representatives,
October 21,
1993
I appreciate the opportunity to appear before this
subcommittee to discuss the Community Reinvestment Act (CRA) and the current efforts of the agencies
to strengthen and improve its administration. This
statute has become an extremely important part of the
landscape of financial institution supervision in recent
years. Across our nation it has affected the relation-
to the Congress
1127
that I have made in connection with FOMC meetings I
have attended and any knowledge I have of notes that
others have made.
I do not take notes on what is said at FOMC
meetings. However, I do take into the meetings notes
concerning the comments I plan to make about the
national and Twelfth Federal Reserve District economies, about monetary policy, and occasionally about
special topics that are on the agenda for a particular
meeting. These "talking points" are stored in locked
files at the Federal Reserve Bank of San Francisco in
accordance with FOMC security procedures. My actual statements often diverge somewhat from my
notes, and I also make impromptu comments at each
meeting, for which I have no notes. I also take into
FOMC meetings a briefing book prepared by the
research department at the Bank. This book contains
analysis and forecasts of developments in the U.S.
economy, analysis of developments in the Twelfth
Federal Reserve District, occasionally discussions of
special topics related to FOMC issues, and analysis of
monetary policy issues and recommendations by my
staff members.
The director of research at the San Francisco Reserve Bank, and occasionally his alternate, take handwritten notes of comments made at FOMC meetings
when they attend as my adviser. These notes are for
their own use in directing FOMC policy analysis
within the research department. They are stored in
their locked files in the Federal Reserve Bank of San
Francisco in accordance with FOMC security procedures.
Finally, with respect to your question about "leaks"
of confidential FOMC information, I have never divulged any FOMC information to unauthorized persons
before the official release date, and I have no information concerning anyone else having done so.
•
ship between thousands of banks and thrift institutions
and their communities—particularly low- and moderate-income neighborhoods. Both large and small institutions have struggled with the law's demands. Local
groups have aggressively used the law—particularly in
the applications process—to prompt commitments for
increased lending to those who may have been overlooked before. The regulators have sought to enforce
the law fairly and fully in the face of the enormous
diversity that exists among America's communities
and its financial institutions.
The results of the CRA have seldom been to the full
satisfaction of either the covered institutions or community groups, and the President has directed that the
1128
Federal Reserve Bulletin • December 1993
agencies conduct a thorough reexamination of our
supervisory approach. This is a zero-based review that
will take into account the views of all affected parties.
In doing so, it is important to start from a common
understanding of the road we have traveled since the
statute was enacted in 1977.
IMPACT OF
CRA
Although the total impact of the CRA is very hard to
measure, I believe a fair assessment would have to
conclude that it has generally made many depository
institutions more responsive to the needs of their
communities. Of course, the level of effort has varied
widely among institutions. Certainly it has not cured
the disinvestment that plagues many of our cities. But
the CRA has, in my view, been very instrumental in
opening channels of communication between banks
and thrift institutions and previously underserved segments of their communities. N e w relationships have
been established with community groups and individuals, new products have been designed and marketed,
and many thousands of credit applications have been
taken from those who previously had no banking
relationship. Most important, I am convinced that
thousands of loans have been made throughout the
United States that would not have been made but for
the CRA. I have personally traveled to many communities and toured numerous projects that are now
helping to stabilize and revitalize communities as a
result of the CRA. In addition, numerous witnesses
from consumer and community organizations at hearings held recently have testified to the valuable contributions the CRA has made.
But exactly what is the overall level of that lending?
I do not know, and I suspect that no one does. The
community groups who track lending agreements with
institutions point to more than $30 billion in commitments for new credit. Many of these commitments
cover several years and therefore extend into the
future. Moreover, I know of no overall assessment of
the extent to which the commitments have been realized. Although formal commitments to community
groups get considerable media attention, I suspect that
most CRA-related activity goes on outside the high
profile negotiated agreements that receive so much
attention. My own belief is that the true impact of the
CRA has far exceeded any number derived strictly
from the formal commitments. If the figure is, for
example, double the committed amount, it is a formidable amount indeed, and this fact should not be
overlooked as w e evaluate the CRA's effectiveness.
Whatever the degree of new lending attributable to
the CRA, it has not been accomplished without nu-
merous problems, which I will refer to later. But
before doing that, an important point about the CRA is
often lost in the debate about its flaws. If this federal
statute has, in fact, had the considerable impact I have
described, it is important to note that this has been
accomplished without a huge appropriation of government dollars and without legions of bureaucrats to
administer the program. These matters, of course, are
very significant and topical—as current as the recently
announced campaign to "reinvent" government in
ways that emphasize these very characteristics.
The CRA established a national goal and put considerable power in both supervisory agencies and the
public to enforce it but left the details of how this goal
would be accomplished to local communities and
depository institutions. The CRA counted on the
unique economic needs, and the give and take in the
local social and political scene, to define the specifics
of the CRA program for each community. N o one in
Washington has yet been employed to decide how
much or what type of CRA lending should be made in
the individual communities you represent. To my way
of thinking, that has been a considerable strength of
the law. In any review of the CRA I believe that we
must acknowledge the value of this approach at the
same time that we search for improvements.
NEED FOR IMPROVEMENT
But all is not perfect, as you well know. The flexibility
that I have referred to has come with a price. Bankers
and many community groups alike complain that the
standards are too vague. Our own examiners would be
more comfortable as they go about their very difficult
job of assessing compliance if the rules of the game
were more precise. Despite the ever-increasing efforts
of the agencies over the years to define more specifically the various levels of performance used in our
rating system, we are constantly faced with questions
about "how much is enough," what loans get the CRA
credit, and exactly what "weight" different categories
of loans will receive. Living with the current uncertainty makes bankers nervous, community groups
dissatisfied with their ability to hold institutions accountable, and everyone involved concerned about
ensuring fair and consistent evaluations by the agencies. And believe me, no one would be happier than
those in my agency, who are charged with the day-today enforcement of the law, if we were "going by the
book."
Common agreement also appears that too much
emphasis has been placed on paperwork and process
as opposed to performance. There is undoubtedly
some truth to this despite the agencies' efforts to
Statements
ensure otherwise. But, it is important to keep in mind
that, in some sense, the focus on process is a natural
outgrowth of leaving the definition of an appropriate
level of performance up to the needs of the community
and the capacity of its institutions. Nevertheless, the
concern about focusing on paperwork rather than
results is widespread enough to require careful evaluation.
And, of course, there are other criticisms as well—
that the CRA is "too much stick and too little carrot"
and that we must search for more incentives to encourage good performance, that too many institutions
receive satisfactory or better ratings, and that either
too much or too little emphasis is given to the CRA in
the context of application processing. Suffice it to say
that there are numerous areas of controversy in which
improvements may be desirable.
Thus, we have what to me is a rather confusing
scene. On the one hand, we have an important national
program that appears to have stimulated considerable
lending and revitalization in low-income and minority
communities. And it has done so in a period of great
shortage of federal dollars and without the rules and
red tape that bedevil so many government efforts. On
the other hand, I know of no other regulatory area in
which there is such common agreement that all is not
right and that some "reform" is necessary. My overall
sense, however, is that in focusing so much on the
imperfections of the CRA, we may have lost sight of
its considerable benefits.
REVIEW
PROCESS
But surely we can do better. And, it was in response to
widespread concern that the CRA can be improved
that the President issued his charge to the agencies to
rethink their administration of this law. In the President's CRA reform request, he asked the agencies to
address several specific areas. These include the following:
• Developing new regulations and procedures that
replace paperwork and uncertainty with greater performance, clarity, and objectivity
• Developing a core of well-trained CRA examiners
• Working together to promote consistency, and
even-handedness, to improve public CRA performance evaluations, to institute more effective sanctions against financial institutions with consistently
poor performance, and to develop more objective,
performance-based CRA assessment standards that
minimize the compliance burden on financial institutions, while stimulating CRA performance.
As you are aware, we are presently working with the
other agencies to carry out the President's initiative.
to the Congress
1129
Working together is not new to us in this area. To
promote uniformity in the approach to the CRA, the
Board, along with the other banking and thrift regulatory agencies, has worked through the Federal Financial Institutions Examination Council (FFIEC) for
some time. For example, through the FFIEC the
agencies developed a common approach to the regulation, interagency CRA examination procedures, a
uniform format for CRA public disclosures, and other
regulatory material. We have a commitment to cooperation and uniformity, and I am confident that together we can meet the President's goals and that any
revision of CRA will be adopted on a common basis.
Initially, our focus has been on ensuring wide public
input. The agencies have held public CRA meetings
across the country to solicit comments on how to
improve the CRA process. We have heard the views of
more than 250 bankers, community groups, and small
business owners, as well as members of the general
public. From these meetings, we have been told what
is working with CRA, what is not working, and what
we need to consider to "fix" it. I can tell you that
many of the stories I have heard—from bankers, small
business owners, and community groups—have been
compelling. The stories, however, point up as many
differences in perspective among the various groups as
they do common concerns.
For example, although many may agree that it is
important to find new incentives to encourage better
CRA performance, there is great disagreement about
what they might be. Very understandably, banks that
have sought and achieved an "outstanding" rating
would like to see this rewarded with a "safe harbor"
from protests. Community groups, to put it mildly, do
not favor the idea. Although there is common concern
about paperwork, there is a growing recognition that
any movement toward more quantifiable standards
may require more, not less, data, and this is not a
happy thought for many. Likewise, concern about the
disproportionate burden on small institutions has
caused some to suggest an exemption for small institutions. Others find this untenable. The idea of more
precision in the requirements has widespread support,
but difficult and controversial issues arise when it
comes to defining what the specific numbers might be
or even the process by which they might be set.
Moreover, there is broadbased concern that in attempting to be precise, we may fall into the credit
allocation trap. In short, although there may be widespread agreement that the CRA requires some major
repairs, there is very little agreement about the appropriate fix.
At this point, we are still analyzing the information
we have collected, and it would be premature for us to
offer any proposals. The Board, along with the other
1130
Federal Reserve Bulletin • December 1993
agencies, will continue this process of assessing the
various arguments and concerns. I expect that a proposal will be published for additional public comment
in the next few weeks.
You have asked whether the statutory language will
permit the necessary reforms. There may or may not
be a constructive role for legislation at some point, but
it seems premature to make that judgment now. We
will be in a much better position to provide meaningful
thoughts on whether legislation is needed at a later
date.
FAIR LENDING
ENFORCEMENT
Finally, you have asked for information on the steps
that we have taken to ensure compliance with fair
lending laws.
Initially, let me say that no single consumer compliance issue is of more concern to the Board, and me
personally, than assuring that the credit-granting process is absolutely free of unfair bias.
Fairness in assessing credit applications, without
regard to race, sex, or other prohibited bases, is
absolutely essential in our country. Let no one have
any misunderstanding on the point. Racial discrimination, no matter how subtle—and whether intended or
not—cannot be tolerated. It robs the lending industry
and our economy of growth potential and harms both
individuals and society.
We have a coordinated approach to this issue at the
Federal Reserve that focuses both narrowly on examination for compliance with fair lending laws and more
broadly at trying to ensure that credit is made widely
available to low- and moderate-income areas of our
country—including those with substantial minority
populations. Our approach to fair lending issues is thus
a comprehensive one that goes beyond examinations.
It also involves an aggressive program to investigate
consumer complaints, provide consumer and creditor
education, and gain insight through research. Let me
describe each segment briefly.
In the research area, the study by the Federal
Reserve Bank of Boston is well known. In my view,
despite its shortcomings, that study has done more
than any other single effort to advance our understanding—and increase our concern—about fair lending in
the mortgage market. Other research pieces on Home
Mortgage Disclosure Act (HMDA) data, household
debt, credit shopping practices, the secondary market,
and other related subjects have also added to our
knowledge. Within the next few weeks we will be
releasing a comprehensive report to the Congress
comparing the risks and returns of lending in low
income, minority, and distressed neighborhoods, com-
pared with those in other communities. This too will
advance our knowledge of the problem and how to
help solve it.
With regard to examinations, the Board supervises
approximately 1,000 state member banks for compliance with fair lending laws. This supervision involves
consumer compliance examinations, consumer complaint investigations, and community affairs efforts.
The consumer compliance examinations are conducted by examiners at the Reserve Banks who are
specially trained in consumer affairs and civil rights
examination techniques. The Board and each of the
Reserve Banks also have staff members who deal with
consumer complaints. In addition, the System has a
substantial community affairs program, many of
whose activities help to advance fair lending. The
Board provides general guidance and oversight to
Reserve Banks in these areas.
The Board first established a specialized consumer
compliance examination program in 1977. Through it,
the twelve Reserve Banks conduct examinations of
state member banks to determine compliance with
consumer protection legislation by using a group of
specially trained examiners. The scope of these examinations specifically includes the Equal Credit Opportunity and Fair Housing Acts. From the beginning, the
examiners were instructed to place special emphasis
on violations involving potential discrimination of the
kind prohibited by those statutes.
The Federal Reserve System's consumer compliance examinations are scheduled at regular intervals
and are comprehensive. Each state member bank is
examined on a regular basis. An average of two-thirds
of state member banks are examined each year. In
general, examinations are scheduled every eighteen
months for a bank with a satisfactory record. A limited
number of banks with exceptional records can be
examined every two years. Those banks with less than
satisfactory records are to be examined every six
months or every year, depending on the severity of
their problems.
The examination procedures focus primarily on
comparing the treatment of members of a protected
class with other loan applicants. First, the bank's loan
policies and procedures are reviewed. This is done by
reviewing bank documents, as well as interviewing
loan personnel. During this phase, the examiner will
seek to determine, among other things, the bank's
credit standards. After the standards have been identified, the examiner will determine whether those
standards were, in fact, uniformly applied using a
sample of actual loan applicants. Special note will be
taken of applications received from minorities,
women, and others whom the laws were designed to
protect. This means that the examiner is looking at the
Statements
same information that the bank used to make its credit
decision, including credit history, income, and total
debt burden. If those standards appear not to have
been used, or not used consistently, this would be
discussed with lending personnel, and a more intensive investigation would typically be undertaken. Finally, an overall analysis of the bank's treatment of
applications from minorities, women, and others with
the characteristics described in the fair lending laws is
conducted to determine whether there are any patterns
or individual instances when such applicants were
treated less favorably than other loan applicants.
Another regular part of the examination includes
conversations with persons in the community who are
knowledgeable about local credit needs. The examiners will routinely ask about public perceptions of the
availability of credit to minorities and low- and moderate-income persons. This information may suggest
that a particular area of the bank needs additional
scrutiny and may provide insights into how the bank is
serving the credit needs of its local community, particularly those protected by the antidiscrimination
statutes. Violations found through the techniques described above require correction by the institution,
notification to the applicant, and referral to the Department of Justice in appropriate cases.
As you know, despite these efforts we have rarely
found evidence that we can be sure proves racial
discrimination. Consequently, we have been concerned about providing examiners with better tools to
help them get the job done. Recently, the Federal
Reserve System developed a computerized model for
using H M D A data in connection with the fair lending
portion of the examination. This model allows examiners to match minority and nonminority pairs of
applicants with similar credit characteristics, but different loan outcomes, for a more extensive fair lending
review. Once the pairs are selected, examiners pull the
credit files for the applicants to determine if discrimination played a part in the credit-granting process.
Although a comparison of minority and majority applicants has always been a part of the Federal Reserve's fair lending examination, we believe that this
computerized selection process will enable examiners
to focus their efforts and spend more time on the actual
fair lending review of loan files.
Besides this "micro" use of the H M D A data, the
Federal Reserve has developed, on behalf of the
Federal Financial Institutions Examination Council
(FFIEC), a computerized system for analyzing the
expanded data collected under the Home Mortgage
Disclosure Act. The system is extremely versatile and
allows the data to be segmented by demographic
characteristics such as race, gender, and income levels, or geographic boundaries. Examiners can now
to the Congress
1131
sort through vast quantities of data to focus attention
on specific lending markets and draw comparisons
between an individual H M D A reporter's performance
and that of all lenders in the area. With these capabilities, examiners can more readily determine whether a
bank is effectively serving all segments of its market,
including low- and moderate-income and minority
neighborhoods. We have been holding H M D A training
sessions on how to use this system around the country
for our examiners, as well as those from other agencies.
The Federal Reserve has also developed the capability to map by computer the geographic location of a
bank's lending products, including mortgage loans.
This mapping includes demographic information for
the bank's local community. We believe that this type
of analysis and presentation will enhance our ability to
assess a bank's CRA performance in meeting the
credit needs of its local community, including minority
areas. It should also be helpful in evaluating a bank's
geographic delineation of its local CRA service area to
ensure that it does not exclude low- and moderateincome neighborhoods.
CONSUMER COMPLAINT
PROGRAM
The Federal Reserve's consumer complaint program is
an important element in our overall effort to enforce
fair lending laws. The investigation procedures in this
regard provide special guidance with respect to complaints involving loan discrimination. Such complaints
can prompt an on-site investigation by Reserve Bank
personnel at the state member bank accused of discrimination. We have a referral agreement with the
Department of Housing and Urban Development
(HUD) for mortgage complaints, and we have referred
several complaints to that agency for further investigation. Like our examinations area, w e are devoting
considerable attention to strengthening our complaintprocessing system by increasing oversight, tightening
deadlines for investigation, assuring more personal
contact, and making the public more aware of our
procedures.
EDUCATIONAL
EFFORTS
We believe that education is an important part of our
coordinated approach. We have distributed a brochure
to all the institutions we supervise entitled Home
Mortgage Lending and Equal Treatment. The brochure identifies and cautions lenders about lending
standards and practices that may produce unintended
discriminatory effects. It focuses on race and includes
1132
Federal Reserve Bulletin • December 1993
examples of subtle forms of discrimination, such as
unduly conservative appraisal practices in minority
areas; property standards such as size and age, which
may exclude homes in minority and low-income areas;
and unrealistically high minimum-loan amounts. More
recently, a comprehensive booklet was published by
the Federal Reserve Bank of Boston entitled Closing
The Gap: A Guide To Equal Opportunity Lending. It
too has been widely circulated. It is another useful tool
for lenders that suggests adjustments in institutional
behavior to correct racially disparate loan practices
that may be occurring in spite of bank policies to the
contrary. We have also published a brochure, entitled
Home Mortgages:
Understanding
the Process
and
Your Right to Fair Lending, to inform consumers
about the mortgage application process and about their
rights under fair lending and consumer protection
laws.
COMMUNITY AFFAIRS
PROGRAM
The Board believes that the goal of ensuring fair
access to credit can also be advanced by focusing on
positive actions that a lender may take to address such
concerns. Consequently, through its Community Affairs program, the Federal Reserve conducts outreach,
education, and technical assistance activities to help
financial institutions and the public understand and
address community development and reinvestment
issues. We have increased resources devoted to Community Affairs activities at the Reserve Banks—now
staffed with more than fifty people—to enable the
Federal Reserve System to respond to the growing
number of requests for information and assistance
from banks and others on the Community Reinvestment Act, fair lending, and community development
topics. Efforts have been expanded to work with
financial institutions, banking associations, govern-
Statement by Wayne D. Angell, Governor, Board of
Governors of the Federal Reserve System, before the
Committee on Banking, Finance and Urban Affairs,
U.S. House of Representatives,
October 27, 1993
I am pleased to have this opportunity to speak on the
authority of the General Accounting Office (GAO) to
audit Federal Reserve operations and the changes to
that authority that would be made by H.R.28, "The
Federal Reserve System Accountability Act of 1993."
President McDonough is addressing the scope of GAO
mental entities, businesses, and community groups to
develop community lending programs that help finance
affordable housing, small and minority business, and
other revitalization projects. Overall the Reserve
Bank's Community Affairs program sponsors or cosponsors about a hundred programs a year involving
thousands of participants as a way to encourage economic development and ensure fair lending.
CONCLUSION
Our commitment to fair lending has been emphasized
by Chairman Greenspan and the heads of each of the
other federal financial institutions supervisory agencies in a letter to every bank and thrift institution in the
country. That letter dated May 27,1993, expressed the
agencies' concern that some minority consumers and
small business owners may be experiencing discriminatory treatment when trying to obtain credit. The
letter put the institutions on notice of our very serious
concern and urged financial institutions to aggressively
undertake lending programs. Various suggestions
were provided on how institutions could help ensure
fair lending.
In spite of these efforts, I am well aware of the
concern about whether our enforcement—indeed our
overall program—has been vigorous enough. I can
only assure you of our commitment to routing out
every instance of unfair treatment and helping to
ensure more opportunities for all our citizens. The
actions we are taking to augment our traditional examination techniques through new computer assisted
analysis should help us considerably. Moreover, our
many efforts to encourage and instruct banks in ways
to broaden their lending to low- and moderate-income
borrowers should provide more open access. It is my
goal and it is the goal of the Federal Reserve System to
ensure that all our citizens are being treated fairly. •
audit authority from the perspective of the Federal
Reserve Bank of N e w York.
At the outset, I would like to dispel the notion I have
frequently heard that the Federal Reserve is not subject to GAO audit. In 1978 the Federal Banking
Agency Audit Act gave the GAO broad authority to
audit most of the operations of both the Federal
Reserve Board and the Federal Reserve Banks. Since
then, the GAO has completed more than 100 reports
on various aspects of System operations, as well as
numerous other reports that involved us less directly.
At present, the GAO has roughly twenty-five audits of
Statements
the Federal Reserve under way and maintains several
of its staff in residence at the Board and at selected
Reserve Banks.
The GAO has free rein to audit the System, subject
to explicit exemptions for deliberations, decisions, or
actions on monetary policy matters, including discount window credit operations, reserves of member
banks, securities credit, interest on deposits and open
market operations; transactions made under the direction of the FOMC; transactions with, or for, foreign
central banks and governmental entities; and discussions or communications among or between members
of the Board and officers and employees of the Federal
Reserve System related to these matters and transactions. By excluding these areas, the act attempts to
balance the need for public accountability of the
Federal Reserve through GAO audits against the need
to insulate the central bank's monetary policy functions from short-term political pressures and the need
to ensure that foreign central banks and governmental
entities can transact business in U.S. financial markets
through the Federal Reserve on a confidential basis.
The precise line differentiating those specific operations of the Federal Reserve and activities that are
subject to GAO audit under the Banking Agency Audit
Act and those that are exempt from audit is difficult to
draw in the abstract. Over the years since the passage
of the act, the Federal Reserve has worked with the
GAO to define those limited areas that are not subject
to audit on a case-by-case basis in the context of
individual audits. In those cases, the Federal Reserve
has worked with the GAO to further the GAO's audit
objectives while honoring the statutory exemptions
designed to ensure the independent conduct of monetary policy and the confidentiality of foreign transactions. In the future, we will continue to work with the
GAO to address its concerns consistent with the
mandate of the act.
Expanding the GAO's audit authority over the Federal Reserve into the exempt areas would be contrary
to the public interest. Such an expansion could adversely affect Federal Reserve effectiveness in the
conduct of monetary policy. As the Banking Agency
Audit Act recognized, such a change could reduce the
central bank's insulation from day-to-day political
pressures. Even what appears to be a very limited
audit of the efficiency of monetary policy operations
could, in fact, turn into pressure for a change in
monetary policy itself. For example, the questions
posed to Comptroller Bowsher in connection with
these hearings as to whether the magnitude of our
open market operations reflects unnecessary buying
and selling of government securities are monetary
policy questions, not efficiency questions. The number
of transactions that the Open Market Desk completes
to the Congress
1133
in carrying out the FOMC's directive correlates directly with the substance of the policy in place.
Indeed, a comprehensive audit of these operations
would likely require a comparison of the actual results
of the operations with intended results.
GAO scrutiny of policy deliberations, discussions,
and actions could also impede the process of formulating policy. A free discussion of alternative policies
and possible outcomes is essential to minimize the
chance of policy errors. The prospect of GAO review
of formative discussions, background documents, and
preliminary conclusions could have an adverse effect
on the free interchange and consensus building that
leads to good policy.
Transactions made under the direction of the Federal Open Market Committee (FOMC) include foreign
exchange operations. The efficacy of these operations
is crucially dependent on confidentiality. Important
daily contacts and exchanges of information with
foreign monetary authorities are an integral part of
these operations. They now take place in a candid and
constructive atmosphere. The possibility of a GAO
audit of our foreign exchange operations would reduce
the willingness of foreign authorities to share information with us and would thereby reduce the effectiveness and efficiency of our operations, which are frequently coordinated with foreign authorities. This
caution also applies to the exemption for transactions
that the Federal Reserve carries out as agent for
foreign entities; however, there the principal issue is
one of sensitive proprietary information about foreign
governments, foreign central banks, and international
financial organizations.
The benefits, if any, of broadening the GAO's authority into the areas of monetary policy and transactions with foreign official entities would be small. With
regard to purely financial audits, the Federal Reserve
Act already requires that the Board conduct an annual
financial examination of each Reserve Bank. The
Federal Reserve places great importance on both the
Reserve Banks' internal audit responsibilities and the
Board's responsibilities for examination of Federal
Reserve Banks, in part, because it recognizes that its
ability to police Federal Reserve Bank operations is
critical to public and congressional confidence in the
Federal Reserve System.
The process of conducting annual financial audits is
reviewed by a public accounting firm to confirm that
the methods and techniques being employed are effective and that the program follows generally accepted
auditing standards applicable to the audit of Federal
Reserve Banks. These examinations are complemented by extensive Board oversight and supervision
of Federal Reserve Bank activities, including Board
operations reviews of Reserve Bank effectiveness and
1134
Federal Reserve Bulletin • December 1993
efficiency, as well as by comprehensive audits conducted by each Reserve Bank's independent internal
audit function. Oversight and supervision of Federal
Reserve Bank activities include review of Federal
Reserve Bank budgets and expenditures as well as
personnel and operating policies.
The Board's annual financial examinations of Federal Reserve Banks, operations reviews, and its oversight and supervision of Federal Reserve Bank activities specifically include examinations, operations
reviews, and oversight of open market and foreign
transactions. The annual financial examinations include review of all accounts for accuracy, compliance
with internal controls, and confirmation that balances
reflected on the books agree with the records of
account holders. Operations reviews for effectiveness
and efficiency of open market and foreign operations
are conducted by multidisciplinary teams, including
economists familiar with FOMC operations, and specialists in data and physical security, automation,
communication, accounting, and secondary market
trading and settlement. These operations reviews also
include the Federal Reserve Bank of New York's
internal audit attentions to the open market account.
Further, a private accounting firm audits the
Board's balance sheet, and the Board's Inspector
General audits the effectiveness and efficiency of
Board programs and operations under the Inspector
General Act of 1978 as amended.
The Board has continually reviewed its procedures
for examinations and oversight of Federal Reserve
activities. For example, recently the Board has contracted for independent private audits of two Federal
Reserve Banks (Kansas City and Cleveland) to provide an independent evaluation of the Reserve Banks'
control environments and the Board's examination
procedures and to determine the feasibility of substituting, from time to time, outside audits for financial
examinations by the Board's examiners. These audits
have indicated that previous financial examinations of
these Reserve Banks were at least as thorough as the
outside audits, that those Reserve Banks were well
controlled, and that financial controls may be regarded
as satisfactory from an audit perspective. Indeed these
audits have indicated that many policies are uniquely
applicable to Federal Reserve Banks and that in these
areas the Board's examiners have a significant advantage in auditing for Reserve Bank compliance.
The Board is strongly committed to ensuring that its
examinations, both internal and external, oversight
and supervision of the Federal Reserve Banks, as well
as its own internal audit function and external audits,
are as effective as possible and will continue to review
these functions with an eye to ensuring their future
effectiveness.
Finally, and more broadly, the Congress has, in
effect, mandated its own review of monetary policy by
requiring semiannual reports to the Congress on monetary policy under the Full Employment and Balanced
Growth Act of 1978 (also known as the HumphreyHawkins Act) and by holding hearings on various
monetary policy issues as they arise. In addition, there
is a vast and continuously updated body of literature
and expert evaluation of U.S. monetary policy. In this
environment, the contribution that a GAO audit would
make to the active public discussion of the conduct of
monetary policy is not likely to outweigh the disadvantages of expanding GAO audit authority in this
area.
In sum, we believe that the Board's supervision
and oversight of Federal Reserve Bank activities and
the Board's own audit functions have served the
public interest well, particularly in the area of confidentiality of monetary policy information. In this
regard, you have asked about the security checks on
personnel involved in the monetary policy process
and incidents of so-called insider trading by Federal
Reserve officials. Attendees at FOMC meetings are
now required to have "secret" or higher clearances,
and over the years, there have been only three
known incidents in which monetary policy information may have been used for private gain. In the first
instance, in October 1979, there were errors in the
deposit data reported by a large New York commercial bank. These errors were technical or clerical and
were not intentional on the part of the bank. The
Federal Reserve's screening procedures flagged the
data as possible errors, but the bank stated that the
numbers were correct as reported. The data therefore resulted in overstatements of the estimates of
the money supply published by the Board. Subsequent data submitted by the bank indicated that the
deposit data were indeed incorrect; as a result the
bank revised its deposit data and the money supply
figures were revised downward correspondingly. At
the request of the House Committee on Banking,
Finance and Urban Affairs, the Board conducted an
investigation to determine if any institution or individual had improperly profited from the errors.
To ensure objectivity in the investigation, the Board
engaged the services of a private law firm to conduct a
complete inquiry and prepare a report. That firm, with
the Board's concurrence, in turn, engaged a private
accounting firm to review trading activity. The report
concluded that neither the bank that had made the
reporting error nor persons connected with it, the
Board, or the Federal Reserve Bank of New York had
improperly and knowingly profited from the erroneous
estimates or revision of the erroneous money supply
estimates. Nor did the report find that any other
Statements
to the Congress
1135
institution or individual had improperly and knowingly
profited from that error.
Nevertheless the report did identify one transaction
that gave rise to an appearance of a conflict of interest
in which an officer of the Federal Reserve Bank of
New York who had knowledge of the impending
revision of the money supply data had purchased units
of a municipal bond fund immediately after the revised
data had become publicly available. That officer resigned from the Reserve Bank shortly thereafter.
In the second incident, in 1982, an ex-employee of
the Board managed to gain telephonic access to confidential money supply data stored in the Board's
computer system shortly after the employee had left
the Board to work for a private firm. This access was
identified quickly, and the matter was promptly referred to the Federal Bureau of Investigation. The
individual ultimately pleaded guilty to one count of
wire fraud and received one year's probation. Subsequently, additional security measures were implemented to prevent a recurrence of similar data security
violations.
In the third incident, in 1986, in connection with the
U.S. Attorneys' investigation of allegations of securities fraud and tax evasion by former principals of a
failed government securities dealer, the U.S. Attor-
ney's office contacted the Federal Reserve Bank of
New York concerning a former director of that Reserve Bank. After further investigation by both the
Reserve Bank and the U.S. Attorney's office, the U.S.
Attorney's office brought a criminal proceeding
against the former director. In 1989, the former director pleaded guilty to charges of bank fraud based on
the illegal disclosure of sensitive, and nonpublic information regarding changes in the discount rate and was
sentenced to a jail term, probation, and community
service. Again, Board and Reserve Bank procedures
were revised after this event to prevent a recurrence.
We believe that the paucity and nature of the
incidents that have occurred over the eighty-year
history of the Federal Reserve System are strong
evidence of the integrity of the monetary policy process of the Federal Reserve. Further, it is doubtful that
any of these incidents would have been prevented by a
broadened GAO audit authority.
For these reasons and the reasons stated previously,
we believe that enactment of the provisions of H.R.28
that would expand the GAO's audit authority by
removing the current exception for monetary policy
matters; transactions made under the direction of the
FOMC; and transactions with, or for, foreign official
entities would be counter to the public interest.
•
Statement by William J. McDonough, President, Federal Reserve Bank of New Yor/c, before the Committee
on Banking, Finance and Urban Affairs, U.S. House
of Representatives,
October 27, 1993
can be taken to further ensure the effectiveness of
GAO audits of the Bank, within the GAO's current
authority. In my opinion, that authority provides sufficient scope to address many of the concerns you
have asked me to discuss today.
I welcome the opportunity to appear before the committee today to provide my views on the provisions of
H.R.28, the Federal Reserve System Accountability
Act of 1993, which relate to the audit of Reserve Banks
by the Government Accounting Office. H.R.28 would
eliminate the exemptions in the Federal Banking
Agency Audit Act for foreign central banks and government transactions, monetary policy deliberations,
decisions, and actions, and Federal Open Market
Committee (FOMC) transactions. Governor Angell
will be addressing the concerns of the Board of Governors on this legislative proposal. I will focus on the
implications of the proposal for the actions taken by
the Federal Reserve Bank of New York in implementing FOMC decisions and carrying out activities for our
foreign accounts.
I want to comment on the scope of the current
exemption and to make clear to the committee my
appreciation and respect for the audit process. Also, I
would like to take this opportunity to note steps that
I believe that the elimination of the current exemption would interfere with the Federal Reserve's ability
to formulate and execute an optimal monetary policy.
It would introduce the unmistakable potential for
political influence; every movement and nuance of
policy would then have to be examined in light of that
potential. At the core of my concern is the fact that the
process by which we implement monetary policy is
inextricably entwined with the policy itself. For example, questions regarding the volume of open market
operations may appear on the surface to be questions
of efficiency. In fact, they relate to the policy intent to
avoid undue volatility in the markets. The idea that the
process of executing open market operations may be
audited without imposing judgments about the policy
itself is simply not realistic.
Simply put, optimal monetary policy is achieved
only when the public and the markets perceive no
short-term political influence. This issue is not new,
nor is it a new conclusion on my part. I have had
1136
Federal Reserve Bulletin • December 1993
plenty of opportunity to consider the import of the
exclusion of the GAO from auditing monetary policy
in my former role as manager of both the domestic and
foreign open market accounts. I have no doubt that the
potential for damage to a credible and effective monetary policy would be very real if the exclusion were to
be lifted. This potential for damage would clearly
outweigh any possible benefit to the public from GAO
audits of monetary policy operations.
I feel equally strongly about the impairment of our
policy implementation if the exclusion were to be lifted
on the foreign side. Foreign exchange intervention is
conducted not only in conjunction with the Treasury,
through the Exchange Stabilization Fund, which is
exempt from GAO audit, but also frequently with or
on behalf of foreign central banks and monetary authorities.
We hold a very large amount—more than $300
billion at present—of marketable U.S. government
securities, representing dollar reserves of these official
foreign entities. I cannot presume to gauge the response of all of these central bank governors and
finance ministers, but I can tell you with absolute
certainty that some number of them, and perhaps a
large number, would question the appropriateness of
their reserve activity being scrutinized by the GAO
and the Congress. This would almost certainly be
damaging to the relationships that are so central to
international monetary cooperation and, perhaps, to
the role of the dollar. Certainly, it would impair the
ability of the U.S. monetary authorities to conduct
their foreign exchange intervention policies on a coordinated basis with the same effectiveness and efficiency we enjoy today.
Having said that, I want to reiterate that I do not
have some sort of reflexive distaste for auditors or the
audit process. To the contrary, as someone who has
had managerial responsibility for large organizations in
both the public and private sectors, I have a keen
appreciation for the role of auditors and the improvements they bring to the table in the form of operational
quality and effectiveness.
I view auditors as an important asset for management. There is a long tradition at the Federal Reserve
of recognizing the value of independent oversight.
Indeed, I believe we subject ourselves to an extraordinarily rigorous series of performance and operational appraisals. Within each Reserve Bank an independent audit function reports directly to the board of
directors and performs comprehensive audits of all
aspects of that Bank's work.
At the N e w York Federal Reserve Bank, we have
had a constructive and positive relationship with the
GAO for almost fifteen years. We supply the GAO
permanent space in the Bank and have assigned staff
as liaison to assist them in the orderly completion of
their tasks. In addition, we take seriously their findings
and are responsive to their suggestions for improvements. Although I do not want to wax too poetic and
imply that we love their result of each and every audit,
I do want to make clear that we have a great appreciation for the role of auditors.
The conduct of Bank personnel with responsibility
for monetary policy matters is subject to the Bank's
rules of conduct, stringent standards regarding outside
financial interests, and potential conflicts stemming
from family and other personal relationships. The
GAO always has had full audit authority over Reserve
Banks' personnel policies and practices, disclosure
statements, and the like and, thus, has been able to
assure itself and the Congress of the ethical standards
and practices of all our employees.
We are not, however, resting on our laurels. There
are always ways to enhance the effectiveness of operations, and audits by GAO can contribute significantly
to that process. I plan to call Comptroller General
Bowsher from time to time to offer suggestions as to
how the GAO might be even more useful to the Bank.
I would now like to respond to matters raised in
Chairman Gonzalez's October 21 letter to me regarding our policy on meals and entertainment and our
ethics officer. As I have noted, there is no limitation on
the GAO that prevents its looking at our meals and
entertainment practices or policy. Moreover, we do
not impart information on monetary policy or our
foreign account relationships to any outsiders, at luncheons or elsewhere. To the contrary, we use meetings with knowledgeable people to gain information
about market conditions that is helpful in our monetary policy deliberations.
The chairman asked a question regarding the cost of
meals at expensive restaurants hosted by regulated
institutions. Because others paid for these approximately two dozen meals that were identified as having
occurred over a period of a year and a half, we do not
have that cost information. We are however, very
sensitive to the appearances of such things, and our
internal rules specifically caution against accepting
inappropriate entertainment, lavish meals, or frequent
meals from a particular institution. Further, we concluded that we do not have an adequate audit trail.
Therefore, we are about to issue a policy requiring that
all business meals paid by regulated institutions or
vendors be documented as to restaurant, purpose, and
attendees, to provide an audit trail for us, the Board of
Governors, and the GAO going forward.
Finally, as the chairman noted, we recently named
an ethics officer. That does not mean that this role was
not being previously performed within the Bank. That
function was fulfilled by the Bank's first vice presi-
Statements
to the Congress
1137
dent, its general counsel, and the personnel officers.
We concluded that we would focus those responsibilities in a single individual, a senior vice president of
the Bank. Since his appointment as ethics officer, he
has responded to inquiries from members of the
Bank's staff regarding ethics and conflict of interest
questions. He also has participated in redrafting our
rules of conduct, which should be concluded by yearend, and other documents that will be helpful to the
Bank's staff in their compliance with these rules. We
regard his efforts as a continuation and refinement of
the policies we have already put in place. As far as I
am concerned, GAO staff members have access to
those policies and procedures, and I look forward to
receiving GAO's input on them.
I appreciate this opportunity to participate in this
hearing and look forward to answering any further
questions the committee members may have.
•
Statement by Susan M. Phillips, Member, Board of
Governors of the Federal Reserve System, before the
Committee on Banking, Finance and Urban Affairs,
U.S. House of Representatives,
October 28, 1993
interest rate derivatives did not emerge until the early
1980s, but today these instruments are available and
actively used in all of the major financial centers in
North America, Europe, and Asia. Foreign exchange
contracts are also actively traded over the counter and
on exchanges in all the major financial centers, and
commodity-linked and equity-linked derivatives are
now widely available.
Thank you for this opportunity to present the views
of the Federal Reserve Board on safety and soundness issues associated with derivatives activities of
banking organizations. The Board believes that these
issues are important and is devoting substantial resources to improving understanding of derivatives
and to developing appropriate public policies for
these instruments. Today I shall begin by sharing
with you our perspective on the public benefits and
public policy concerns associated with the use of
derivatives by banks and by others. Then I shall
summarize the Board's strategy for addressing those
concerns and discuss the specific policy actions that
w e have taken and are planning to take to implement
that strategy.
PUBLIC BENEFITS AND PUBLIC
CONCERNS
POLICY
A derivative is a financial contract whose value is
derived from the values of one or more underlying
assets or reference rates or indexes of asset values.
Derivatives include standardized contracts that are
traded on futures and securities exchanges and also
customized, privately negotiated contracts known as
over-the-counter (OTC) derivatives. Both types of
derivatives have been in existence for hundreds of
years. In the United States, commodity futures exchanges date to the mid-nineteenth century, and foreign exchange forward contracts have been offered by
some U . S . banks since early this century.
Since around 1980, however, the scale, diversity,
and complexity of derivatives activities have increased
greatly. On the futures exchanges, interest rate derivatives, which were first introduced in the mid-1970s,
today account for more than half of total activity. OTC
The Board believes that the development of new
derivative products and the overall expansion of
derivatives activities have provided important
public benefits. The primary economic function of
derivatives is to transfer market risk, that is, the risk
of an adverse change in the price of an asset or a
portfolio of assets. The importance of this function
has increased, as competitive pressures have intensified in many economic sectors and interest rates,
exchange rates, and other asset prices have tended to
be quite volatile. In this environment, many financial
and nonfinancial businesses, federally sponsored
agencies, and state and local governments have
concluded that active management of their expoures to financial market risks is essential. They
recognize that such risks, if left unmanaged, can
jeopardize their ability to successfully perform their
primary economic functions. Because derivatives,
especially customized OTC derivatives, allow financial market risks to be adjusted more precisely and at
lower cost than is possible with other financial instruments, many entities have come to rely on such
contracts to achieve their risk management objectives.
At the same time, the Board recognizes that derivatives are complex instruments and that, if not clearly
understood and properly managed, their use can
threaten the safety and soundness of banks and other
users. To date, few institutions have suffered significant losses from derivatives activities, and no commercial bank has failed as a result of such activities.
But the potential clearly exists for an individual bank
or other institution to misuse derivatives in ways that
create risk exposures that could materially weaken its
1138
Federal Reserve Bulletin • December 1993
financial condition, either because of ignorance or
because of an imprudent attitude toward risk.
The Board is also concerned that derivatives activities could have implications for the stability of the
financial system. Whether derivatives have increased
or decreased systemic risk is still a subject of ongoing
review and analysis. Derivatives have fostered greater
awareness and understanding of risks and enhanced
methods of risk management. It is clear, however, that
derivatives activities have become a significant factor
in the overall risk profiles of some banks and other
financial intermediaries. Although these institutions
are still relatively f e w in number, they are among the
largest and most active in the financial and banking
markets. If one of them failed to manage its derivatives
activities prudently, its financial condition could be
weakened, and concern about its financial health could
jeopardize the smooth operation of financial markets.
More generally, derivatives have been a major factor
in tightening linkages among markets and potentially
altering the transmission of economic and financial
shocks. If a firm that was very active in these markets
came under extreme financial stress, regardless of the
source of its difficulties, the unwinding of its outstanding derivatives positions and related positions in other
financial markets could pose significant challenges
both to the firm and to regulatory authorities seeking
to contain the effects of its difficulties.
It is also clear that weaknesses in the financial
infrastructure for derivatives activities are a potential
source of systemic problems. In fact, the largest single
source of losses from derivatives activities to date
resulted from a court decision that invalidated derivatives contracts with certain local authorities in the
United Kingdom. In the United States, before the
passage of the Futures Trading Practices Act of 1992
and subsequent regulatory action by the Commodity
Futures Trading Commission (CFTC), the exchangetrading restriction of the Commodity Exchange Act
had raised serious concerns about the legal enforceability of many OTC derivatives contracts. Of remaining infrastructure problems, perhaps the most serious
relate to the legal enforceability of so-called netting
agreements for derivatives contracts, which still is
questionable in several important foreign jurisdictions.
A STRATEGY FOR ADDRESSING PUBLIC
CONCERNS
POLICY
The strategy that the Federal Reserve has pursued to
address concerns about the risks associated with derivatives activities has three basic elements. First, the
Board has used its banking supervisory authority to
attempt to ensure that the risks associated with the
derivatives activities of the institutions it regulates are
prudently managed and do not pose a threat to the
deposit insurance fund. Along with other banking
supervisors in the United States and abroad, the
Federal Reserve has worked to incorporate such risks
into regulatory minimum capital requirements. At the
same time, however, the Board's policies have emphasized the responsibility of a bank's senior management
for ensuring that risks of the institution's derivatives
activities are effectively controlled and are limited to
levels that do not pose a threat of seriously impairing
its capital. This emphasis reflects the Board's belief
that regulation cannot substitute for effective risk
management, especially in the case of activities as
complex and diverse as derivatives activities.
Second, the Federal Reserve has strongly encouraged private sector initiatives to foster sound risk
management of derivatives activities. Because banks
are not the only large-scale users of derivatives, concerns about risks to individual institutions and to the
financial system must extend to other entities, some of
which are not subject to prudential regulation by
banking supervisors or by other authorities. Private
sector initiatives offer the promise of strengthening
risk management practices of both regulated and unregulated entities in the United States and abroad.
Third, the Board has worked with users of derivatives, other regulators in the United States and abroad,
and legislators to strengthen the financial infrastructure for derivatives activities. To date, these efforts
have focused on legal enforceability issues. Further
efforts are needed, both on legal issues and on other
issues, notably accounting and financial reporting issues.
BANK REGULATORY
POLICIES
AND
SUPERVISORY
Before discussing the specific regulations and supervisory policies and procedures that the Federal Reserve
has implemented to address the risks of bank derivatives activities, several points about the extent and
nature of such activities should be noted. Most important, very few banking organizations make use of
derivatives. As of midyear, only 13 percent of U . S .
bank holding companies and just 8 percent of statechartered member banks reported any positions in
either exchange-traded or OTC derivative contracts.
Moreover, for the vast majority even of these banking organizations, exposures related to derivatives
activities do not appear significant relative to their
exposures from their other activities or relative to their
capital. In fact, most of these institutions appear to use
derivatives solely or at least primarily for hedging, that
Statements
is, to reduce the interest rate risks and other market
risks associated with their traditional portfolios of
loans, securities, and deposits. The use of derivatives,
especially OTC derivatives, by these institutions does
create credit exposures to counterparties. Analysis of
reported data indicates, however, that these credit
exposures tend to be quite small relative to credit
exposures from traditional activities.
By contrast, for at most a dozen or so very large
banks and bank holding companies, nearly all of which
have their headquarters in New York or Chicago,
derivatives activities have become a significant component of their overall risk profile. Like the other
banks, these banks use derivatives to hedge market
risks associated with more traditional activities, but by
far the largest share of their activity relates to their
role as "dealers" in OTC derivatives. These banks
compete with other large financial institutions in the
United States and abroad to meet demands from a
wide range of end users for customized derivatives
contracts to achieve specific risk management objectives. They also use derivatives (both exchange-traded
and OTC) as vehicles for proprietary trading, that is,
trading designed to profit from movements in absolute
or relative levels of interest rates, foreign exchange
rates, or other asset prices. Internal bank data gathered in the examination process suggest that the derivatives activities of these dealer banks have been
quite profitable and no serious losses have been incurred. Nonetheless, the magnitude and complexity of
the risks these banks manage quite naturally have been
a focus of concern for the Federal Reserve and other
banking supervisors.
A key element of the Board's efforts to strengthen
regulatory and supervisory policies relating to derivatives activities has been the incorporation of measures
of credit risks, market risks, and interest rate risks
associated with these activities into risk-based capital
requirements. Risk-based capital requirements for
credit exposures on OTC derivative contracts were
part of the original Basle Accord that was published in
1989. These requirements provide a methodology for
translating market values and notional amounts of
derivatives contracts into amounts that are comparable to credit exposures on balance sheet assets. It is
important to note that these "credit equivalent
amounts," which include both the current exposure to
loss from default of a counterparty and an estimate of
potential future increases in exposure, are a very small
fraction of the notional values. Nonetheless, for a few
of the largest U.S. bank holding companies these
credit equivalent amounts equal as much as 20 percent
to 35 percent of their balance sheet assets.
At the end of April, the Board made available for
public comment proposals by the Basle Supervisors
to the Congress
1139
Committee to revise the Basle Accord. The revisions
would recognize reductions in credit risk from use of
legally enforceable netting arrangements for derivatives contracts and would incorporate measures of
market risks on foreign exchange and traded debt and
equity positions, including derivatives positions. Implementation of the netting proposal would provide
incentives for wider use of netting agreements in legal
jurisdictions in which concerns about enforceability
have been addressed; it also would encourage efforts
to reduce legal uncertainty in the remaining jurisdictions, through legislation if necessary. With regard to
market risk, the treatment of derivatives is an integral
component of the proposal. Market risk would be
assessed on a portfolio basis, taking into account the
cash flows associated with both derivatives and the
underlying instruments.
The incorporation of risks associated with derivatives in risk-based capital requirements has required
banking regulators to set out rather complex and
detailed rules. Nonetheless, the rules arguably do not
fully capture the complexity and diversity of the risks
involved. In particular, the proposed treatment of
market risks on options positions is crude and may
need to be revised in light of public comments and
further analysis. More elaborate rules could be developed, but the added complexity would be burdensome
to banks and still might not fully capture the risks of
complex portfolios. These difficulties underscore a
point I made earlier—regulation simply cannot substitute for effective risk management, especially management of such complex activities. One potential solution to these difficulties is to allow banks to use their
own internal models to compute capital requirements
for market risk, subject to examiner review of the
models and in accordance with parameters set by
regulators. Indeed, the Basle supervisors have requested comment on the merits of such an approach to
assessing market risks on complex options portfolios
and on foreign exchange positions. Likewise, the
Federal Reserve and other U.S. bank regulators have
proposed the use of internal models, subject to examiner review, as a means of determining capital requirements for interest rate risk.
The on-site examination and evaluation of internal
risk management models, systems, and controls are
already the most important elements of our supervision and regulation of derivatives activities. Examiners assess the risk management systems and internal
controls in the banking organization's core trading and
derivatives activities and devote special attention to
new products and new approaches to risk management
and control. Accordingly, the Federal Reserve has
made the continuous updating and strengthening of
policies and procedures for on-site examination of
1140
Federal Reserve Bulletin • December 1993
derivatives activities a top priority. These efforts have
built on our many years of experience supervising
foreign exchange derivatives and on experience with
supervising merchant bank subsidiaries in London,
which were among the first entities to begin actively
trading OTC interest rate derivatives in the mid-1980s.
In fact, our first attempt to formalize examination
objectives and procedures for derivatives activities
was contained in a Merchant and Investment
Bank
Examination Manual, which was field tested in 1987
and published in 1988.
Just recently, Federal Reserve staff members, including examiners from the Federal Reserve Bank of
N e w York who have considerable experience with
bank derivatives activities, have completed an extensive effort to consolidate and enhance examination
procedures for derivatives activities and trading activities generally. The result is a new Trading
Activities
Examination Manual, which provides examiners with
procedures for evaluating a firm's organizational structure, front office and back office operations and systems, and its approaches to measuring and managing
market, credit, and liquidity risks associated with
derivatives. Examiners in each of the Reserve Banks
have begun field testing this new manual. When the
testing is complete, the Board will review the proposed manual and make revisions where necessary.
Of course, examiners need to be trained to make
effective use of these new materials. As with other
banking activities, examiner expertise in derivatives
activities is being developed through an apprenticeship
program that combines various types of formal education programs with on-the-job training under the supervision of senior examiners. The Federal Reserve
and the other bank regulatory agencies have been
working for some time to enhance the coverage of
derivatives activities in the core examination curriculum and have offered a variety of specialized courses,
conferences, and seminars on derivatives issues. The
Federal Reserve is also making special efforts to
ensure a sharing of expertise in examining derivatives
activities between Federal Reserve Districts in which
this activity is widespread and those in which it is just
developing.
Looking ahead, the Board believes that accounting
and financial reporting standards for bank derivatives
activities will require further attention from U.S. and
foreign regulators. The accounting profession in the
United States has not yet developed consistent accounting principles for derivatives activities, and there
is a diversity of accounting practice among major U . S .
banks. With respect to financial reporting of derivatives activities, U.S. banks already report more information than most foreign banks have been required or
have chosen to divulge. Nonetheless, expanded re-
porting requirements may be appropriate for U.S.
banks whose derivatives activities are a significant
element in their overall risk profile and profitability.
The Board believes that the Interagency Task Force
on Derivatives, which has recently been formed by
banking regulators, should focus on assisting other
existing interagency groups in resolving these accounting and reporting issues.
ENCOURAGEMENT AND SUPPORT FOR
PRIVATE-SECTOR
INITIATIVES
The Board believes that concerns about risks to individual institutions and systemic risks cannot be fully
addressed unless actions by regulators are complemented by private efforts to promote sound risk management. Users of derivatives are a broad and diverse
group. Of the leading derivatives dealers, only a
handful are U . S . banking organizations. Other leading
dealers in these highly competitive markets include
some U . S . securities firms and insurance companies
and many of the leading banks and securities firms in
Canada, France, Germany, Japan, Switzerland, the
United Kingdom, and other countries. Major end
users include a variety of regulated and unregulated
entities in the United States and many other countries.
Accordingly, the Board has encouraged and supported private sector initiatives to address risks in
derivatives activities. In particular, the Board believes
that the Global Derivatives Study, which was published recently by the Group of Thirty, holds considerable promise for strengthening the risk management
practices of a wide range of derivatives dealers and
end users. The study is a complete and lucid source of
information on the nature of derivatives activities and
the types of risks that such activities entail. Potentially
an even more important contribution of the study is
the practical guidance it provides on risk management.
This potential may not be realized, however, unless
concerted efforts are made to ensure implementation
of the recommended practices. A survey conducted as
part of the study revealed that significant numbers of
dealers and end users have not yet implemented the
recommended practices. Moreover, implementation of
some of the recommendations is not straightforward
and may be quite costly. Partly in response to concerns that Board members and other regulators expressed about prospects for implementation, the International Swaps and Derivatives Association (ISDA)
recently announced a set of new initiatives to foster
adoption of the report's recommendations by derivatives users. These initiatives include a follow-up survey of practices, conferences, and workshops, and
special efforts to reach end users through their trade
Statements
associations. The Board believes that further efforts of
this kind, whether by the Group of Thirty, ISDA, or
other groups, are highly desirable.
EFFORTS TO STRENGTHEN THE
INFRASTRUCTURE FOR DERIVATIVES
ACTIVITIES
The Board has worked with central banks in other
countries to develop a clearer understanding of the
implications of derivatives activities for systemic risk.
These efforts have culminated in publication by the
Bank for International Settlements of several reports.
In particular, a working group chaired by a Board staff
member prepared a Report on Recent Developments in
International Interbank Relations, which provides perhaps the most complete discussion of the systemic risk
issues. This report emphasized not only the importance
of sound risk management practices at individual institutions but also the need to strengthen the legal and
institutional infrastructure for derivatives activities.
As I have noted, in the United States, legislators,
regulatory authorities, and derivatives users already
have taken a series of steps to ensure the legal enforceability of netting agreements for derivatives. The
Board believes that the enforceability of such contracts is critical from a systemic risk perspective. If a
counterparty measures its credit exposure on a net
basis but the netting agreement is not enforceable, the
true exposure is the gross exposure. The counterparty
thus could face losses and liquidity pressures far larger
than expected and, perhaps, larger than could readily
be absorbed.
The latest effort to address enforceability concerns
was a far-reaching provision of the FDIC Improvement Act. This provision validated under U.S. law all
netting contracts between and among depository institutions, securities brokers or dealers, and futures
commission merchants. Furthermore, it authorized
the Federal Reserve Board to broaden the coverage to
other financial institutions if it determined that doing
so was appropriate to promote market efficiency or to
reduce systemic risk. In early May, the Board issued a
proposed rule that would broaden the definition of
financial institution to include all legal entities that are
large-scale dealers in the OTC derivatives markets.
Implementation of this proposal would eliminate uncertainty about the legal enforceability of netting
agreements between certain affiliates of securities
firms and insurance companies that are active dealers
in the OTC derivatives market and banks and other
entities that already meet the statutory definition of
financial institution. The Board is currently considering public comments on the proposal and plans to take
final action early next year.
to the Congress
1141
The Federal Reserve also has worked with the
Commodity Futures Trading Commission and the
Congress to eliminate the threat that OTC derivatives
contracts could be deemed unenforceable off-exchange futures contracts, an event that, were it to have
occurred, clearly could have caused systemic problems. The Futures Trading Practices Act of 1992
provided the CFTC with explicit authority to exempt
OTC derivatives from most provisions of the Commodity Exchange Act, including the exchange trading
restriction that had posed the threat. When the CFTC
moved promptly to utilize the new authority to eliminate the threat to OTC derivatives, the Board supported its action.
As I have indicated in discussing bank supervisory
issues, one area of the infrastructure that needs immediate attention is the development of consistent accounting and financial reporting standards for derivatives. The Federal Reserve and other banking
regulatory agencies plan to press ahead in developing
appropriate standards for U . S . banking organizations.
But, clearly it would be preferable for the Financial
Accounting Standards Board (FASB) to develop and
implement standards that would apply to all U . S .
firms. The Working Paper of the Accounting and
Reporting Subcommittee, which was included in the
Group of Thirty's Global Derivatives Study, discussed
some promising approaches to these issues that deserve further consideration by banking regulators and
by FASB. The F A S B and the banking regulators have
been discussing these issues but need to intensify
discussions with each other and with dealers and end
users of derivatives. Ultimately, it will be important to
work toward international harmonization of accounting and reporting standards for both regulated and
unregulated entities.
CONCLUSION
In conclusion, the Board believes that it has developed
a sound and appropriate strategy for addressing public
policy concerns about potential risks from derivatives
activities. The Federal Reserve and other banking
supervisors have made significant progress in strengthening policies relating to bank derivatives activities
and have the authority necessary to address such
issues as accounting and financial reporting. With
respect to other users of derivatives, at this time the
Board believes that official encouragement of private
sector initiatives is the most effective way of addressing public policy concerns about risks to individual
institutions and systemic risks. Nonetheless, the
Board continues to analyze these issues and plans to
1142
Federal Reserve Bulletin • December 1993
monitor carefully the progress of the private sector
initiatives and to consider carefully the results of the
study on OTC derivatives regulation that the CFTC
just recently completed. At the same time, regulatory
and supervisory programs related to derivatives activities of banking institutions will be reviewed frequently
as these instruments evolve and as banks' use of them
develops further.
•
1143
Announcements
ISSUANCE OF WARNING ON THE USE OF
QUESTIONABLE FINANCIAL
INSTRUMENTS
Federal regulators issued a warning on October 21,
1993, to financial institutions on the increased use
of questionable instruments in complex and possibly illegal schemes aimed at defrauding borrowers
and investors as well as banks.
The questionable instruments are known by such
names as "prime bank notes," "prime bank guarantees," and "prime bank letters of credit."
Staff members of the bank and thrift regulatory
agencies are unaware of the legitimate use of any
financial instrument known by these names and
cautioned financial institutions to be aware of the
potential dangers associated with any transactions
using this type of instrument.
AVAILABILITY OF REVISED LISTS
OF OTC MARGIN STOCKS AND
OF FOREIGN MARGIN
STOCKS
The Federal Reserve Board published on October 22, 1993, a revised list of over-the-counter
(OTC) stocks that are subject to its margin regulations. A l s o published was the List of Foreign Margin Stocks (Foreign List) for foreign equity securities that meet the criteria in Regulation T (Credit
by Brokers and Dealers).
The lists were effective November 8, 1993, and
supersede the previous lists that were effective
August 9 , 1 9 9 3 .
The Foreign List specifies those foreign equity
securities that are eligible for margin treatment at
broker-dealers. There are two additions to and four
deletions from the Foreign List, which n o w contains 2 9 9 foreign equity securities.
The changes that have been made to the revised
OTC List, which n o w contains 3,553 OTC stocks,
are as follows:
• T w o hundred t w e l v e stocks have been
included for the first time, 165 under National
Market System ( N M S ) designation.
• Eighteen stocks previously on the list have
been removed for substantially failing to meet the
requirements for continued listing.
• Twenty-nine stocks have been removed for
reasons such as listing on a national securities
exchange or involvement in an acquisition.
The OTC List is published by the Board for the
information of lenders and the general public. It
includes all over-the-counter securities designated
by the Board pursuant to its established criteria as
well as all OTC stocks designated as N M S securities for which transaction reports are required to be
made pursuant to an effective transaction reporting
plan. Additional OTC securities may be designated
as N M S securities in the interim between the
Board's quarterly publications and will be immediately marginable. The next publication of the
Board's list is scheduled for January 1994.
Besides NMS-designated securities, the Board
will continue to monitor the market activity of
other OTC stocks to determine which stocks meet
the requirements for inclusion and continued inclusion on the OTC List.
•
1145
Legal Developments
FINAL RULE—AMENDMENTS
G, T, U AND X
TO
REGULATIONS
The Board of Governors is amending 12 C.F.R. Parts
207, 220, 221 and 224, its Regulations G, T, U and X
(Securities Credit Transactions; List of Marginable
OTC Stocks; List of Foreign Margin Stocks). The List
of Marginable OTC Stocks (OTC List) is composed of
stocks traded over-the-counter (OTC) in the United
States that have been determined by the Board of
Governors of the Federal Reserve System to be subject to the margin requirements under certain Federal
Reserve regulations. The List of Foreign Margin
Stocks (Foreign List) is composed of foreign equity
securities that have met the Board's eligibility criteria
under Regulation T. The OTC List and the Foreign
List are published four times a year by the Board. This
documents sets forth additions to and deletions from
the previous OTC List and the Foreign List.
Effective November 8, 1993, accordingly, pursuant
to the authority of sections 7 and 23 of the Securities
Exchange Act of 1934, as amended (15 U.S.C. 78g and
78w), and in accordance with 12 C.F.R. 207.2(k) and
207.6 (Regulation G), 12 C.F.R. 220.2(u) and 220.17
(Regulation T), and 12 C.F.R. 221.2(j) and 221.7 (Regulation U), there is set forth below a listing of deletions
from and additions to the OTC List and the Foreign
List.
Deletions
Stocks
from
the List of Marginable
OTC
Stocks Removed for Failing Continued Listing
Requirements
All American Semiconductor, Inc.: Class A, Warrants
(expire 06-18-97)
American City Business Journals, Inc.: 6% convertible debentures
American Health Services Corp.: $.03 par common
Assix International, Inc.: $.001 par common
Fabri-Centers of America, Inc.: 6-lA% convertible
subordinated debentures
F.F.O. Financial Group, Inc.: $.10 par common
Genetics Institute Inc.: $4.00 convertible exchangeable preferred
N H D Stores, Inc.: $.10 par common
Perceptronics, Inc.: $.001 par common
Price/Stern/Sloan, Inc.: $.10 par common
Sahara Resorts: $.20 par common
Sciclone Pharmaceuticals Inc.: Warrants (expire
03-16-97)
Sierra Real Estate Equity Trust '84: N o par common
United Coasts Corporation: $.01 par common
Warehouse Club, Inc.: Warrants (expire 11-13-94)
Stocks Removed for Listing on a National
Securities Exchange or Being Involved in an
Acquisition
American National Petroleum Company: $.01 par
common
ATKM Metals Center Inc.: N o par common
Aztar Corporation: $.01 par common
Ballard Medical Products: $.10 par common
Centennial Savings Bank, FSB: $1.00 par common
Columbia Hospital Corporation: $.01 par common
Commerce Banc Corporation: $1.25 par common
Commonwealth Bancshares Corp.: $3.50 par common
Costar Corporation: $.10 par common
Crestar Financial Corporation: $5.00 par common
Cybertek Corporation: $.01 par common
Dahlberg, Inc.: $.10 par common
Bruno's Inc.: 6.5% convertible subordinated debentures
BTR Realty Inc.: $.01 par common
Enclean, Inc.: $.10 par common
Equitable of Iowa Companies: N o par common
Cimflex Tecknowledge Corporation: $.01 par common
Franklin First Financial Corp.: $.01 par common
1146
Federal Reserve Bulletin • December 1993
H D R Power Systems Inc.: $.01 par common
Home Intensive Care Inc.: $.01 par common
ICF Kaiser International Inc.: $.01 par common
La Petite Academy, Inc.: $.10 par common
National Community Banks, Inc.: $2.00 par common;
Series B, $2.00 par cumulative convertible preferred
Nay lor Industries, Inc.: $.01 par common
Perception Technology Corporation: $.10 par common
Pioneer Bancorp, Inc.: $1.00 par common
Pioneer Fed Bancorp, Inc.: $.01 par common
Preston Corporation: $1.00 par common
Protective List Corporation: $.50 par common
USA Waste Services, Inc.: $.01 par common
Vari-Care Inc.: $.01 par common
Village Financial Services Ltd.: $.01 par common
Additions
Stocks
to the List of Marginable
OTC
A Pea in the Pod, Inc.: $.01 par common
A + Communications, Inc.: $.01 par common
Actel Corporation: $.001 par common
Aetrium Incorporated: $.001 par common
Air Methods Corporation: $.06 par common
Allied Holdings Inc.: N o par common
American Oilfield Divers, Inc.: No par common
Antec Corporation: $.01 par common
APS Holding Corporation: Class A, $.01 par common
Aramed, Inc.: $.01 par common
Arbor Health Care Company: $.03 par common
Arethusa (Off-Shore) Limited: $.10 par common
Arrow Transportation Company: No par common
Asyst Technologies Inc.: N o par common
Atchison Casting Corporation: $.01 par common
Atlantic Coast Airlines, Inc.: $.02 par common
Baker, J., Inc.: 1% convertible subordinated debentures due 2002
Bank of Nashville, The: $6.00 par common
Benton Oil & Gas Company: $.01 par common
Best Power Technology, Incorporated: $.01 par common
Big Rock Brewery Ltd.: N o par common
Billy Blues Food Corporation: $.05 par common
Biosafety Systems, Inc.: $.01 par common
Broadcasting Partners Inc.: Class A, $.01 par common
Builders Transport, Incorporated: 8% convertible debentures due 2005
Cairn Energy USA, Inc.: $.01 par common
Capital Gaming International, Inc.: N o par common
Carolina First Corporation: Series 1993, 7.50% noncumulative convertible preferred
Casino & Credit Services, Inc.: $.001 par common;
Warrants (expire 08-10-98)
Casino Resource Corporation: $.01 par common;
Class A, Warrants (expire 09-15-96)
CB Bancorp, Inc. (Indiana): $.01 par common
Cencall Communications Corporation: $.001 par common
Central Garden & Pet Company: $.01 par common
Central Virginia Bankshares, Inc.: $2.50 par common
CFI Proservices, Inc.: N o par common
Checkmate Electronics, Inc.: $.01 par common
Churchill Downs Incorporated: No par common
Cobancorp, Inc. (Ohio): N o par common
Cobra Gulf Incorporated: $.001 par common
Commander Aircraft Company: $.50 par common
Commercial Bankshares Inc. (Florida): $.08 par common
Community First Bank (Florida): $2.00 par common
Complink, Ltd.: $.01 par common
Computer Concepts Corp.: $.0001 par common
Comstock Bank (Nevada): $.50 par common
Conductus, Inc.: $.0001 par common
Cornerstone Imagings, Inc.: $.01 par common
CSB Financial Corporation (Virginia): $.01 par common
Cygne Designs, Inc.: $.01 par common
Cyrix Corp.: $.004 par common
Dataware Technologies, Inc.: $.01 par common
Davco Restaurants, Inc.: $.001 par common
Diasonics Ultrasound, Inc.: $.01 par common
Discovery Zone Inc.: Liquid Yield Option Notes due
10-14-2013
Dual Drilling Company: $.01 par common
Elek-Tek, Inc.: $.01 par common
Envirofil Inc.: $.001 par common
EP Technologies, Inc.: $.01 par common
Equivest Finance, Inc.: $.05 par common
EV Environmental, Inc.: $.01 par common
Evans Systems, Inc.: $.01 par common
Excel Technology, Inc.: Class B, Warrants (expire
02-08-98)
Executone Information Systems, Inc.: Series A,
preferred
EZ Communications, Inc.: Class A, $.01 par common
FCB Financial Corporation: $.01 par common
FFW Corporation: $.01 par common
First Colonial Group, Inc. (Pennsylvania): $5.00 par
common
Legal Developments
First Federal Savings and Loan (Ohio): $.01 par common
First Midwest Financial, Inc.: $.01 par common
First Palm Beach Bancorp, Inc. (Florida): $.01 par
common
First Southeast Financial Corporation: $.01 par common
Founders Financial Corporation (Florida): $1.00 par
common
Futuremedia Public Limited Company: American Depositary Receipts; Warrants (expire 08-19-96)
Gartner Group Inc.: Class A, $.001 par common
General Atlantic Resources, Inc.: $.01 par common
Gensia, Inc.: Warrants (expire 12-31-96)
Govett & Company Limited: American Depositary
Receipts
Great American Management and Investment, Inc.:
$.01 par common
Great Central Mines, N.L.: American Depository Receipts
Great Wall Electronic International Ltd.: American
Depositary Receipts
Greenfield Industries, Inc.: $.01 par common
Grow Biz International, Inc.: N o par common
GTE California, Inc.: 4.5% 1956 cumulative preferred
Hariston Corporation: N o par common
Haven Bancorp Inc. (New York): $.01 par common
Hollinger, Inc.: N o par common
Hollywood Entertainment Corporation: N o par common
Home State Holdings, Inc.: $.01 par common
Hometown Buffet, Inc.: $.01 par common
Image Industries, Inc.: $.01 par common
Inbrand Corporation: $.10 par common
Independence Bancorp, Inc. (New Jersey): $1.00 par
preferred
Innodata Corporation: Warrants (expire 08-09-97)
INVG Mortgage Securities Corp.: $.01 par common
Invitro International: Warrants (expire 05-16-96)
IVI Publishing Inc.: $.01 par common
Johnstown America Industries Inc.: $.01 par common
K-Tel International, Inc.: $.01 par common
Kenetech Corporation: $.0001 par common
Kentucky Electric Steel Inc.: $.01 par common
Key Technology, Inc.: N o par common
Kurzweil Applied Intelligence, Inc.: $.01 par common
Lady Luck Gaming Corporation: $.001 par common
Lam Research Corporation: 6% convertible subordinated debentures due 2003
1147
Landry's Seafood Restaurants, Inc.: $.01 par common
Las Began Entertainment Network, Inc.: $.001 par
common
Laurel Bancorp, Inc. (Maryland): $.01 par common
LCI International, Inc.: 5% cumulative convertible
exchangeable preferred
Leader Financial Corporation: $1.00 par common
Level One Communications Incorporated: N o par
common
Lidak Pharmaceuticals: Class A, N o par common;
Class B, Warrants (expire 05-08-95); Class C, Warrants (expire 05-26-95)
Life Medical Sciences, Inc.: $.01 par common
Live Entertainment Inc.: Series B, N o par cumulative
preferred
Loewenstein Furniture Group, Inc.: $.01 par common
M-Systems Flash Disk Pioneers Ltd.: Ordinary
Shares, NIS $.001
Madge, N.V.: lg par common
Magnetech Corporation: $.000025 par ocmmon
Manugistics Group, Inc.: $.002 par common
Maxim Group, Inc., The: $.001 par common; Warrants (expire 09-30-98)
MDL Information Systems, Inc.: $.01 par common
Metrocall, Inc.: $.01 par common
Micro Component Technology Inc.: $.01 par common
Microprobe Corporation: $.001 par common; Warrants (expire 09-28-98)
Mid Ocean Limited: Class A, $.20 par ordinary shares
Milgray Electronics, Inc.: $.25 par common
Momentum Corporation: $1.00 par common
Monaco Coach Corporation: $.01 par common
Monarch Casino & Resort, Inc.: $.01 par common
Morgan Group, Inc., The: Class A, $.015 par common
Mountain Parks Financial Corporation: $.001 par common
MRS Technology, Inc.: $.01 par common
National Gypsum Company: $.01 par common; Warrants (expire 07-01-2000)
National Picture & Frame Company: $.01 par common
National R. V. Holdings Inc.: $.01 par common
National Record Mart, Inc.: $.01 par common
Netmanage, Inc.: $.01 par common
Network Solutions, Inc.: $.10 par common
Neurex Corporation: $.01 par common
North American Savings Bank (Missouri): $1.00 par
common
North American Watch Corporation: $.01 par common
North Coast Energy, Inc.: Series B, $.01 par cumulative preferred
N S D Bancorp, Inc.: $1.00 par common
1148
Federal Reserve Bulletin • December 1993
Octus, Inc.: No par common
OHSL Financial Corp.: $.01 par common
Old Lyme Holding Corporation: $.01 par common
Omega Environmental, Inc.: $.0025 par common
Omni Insurance Group, Inc.: $.01 par common
Oroamerica, Inc.: $.001 par common
Pairgain Technologies, Inc.: $.001 par common
Panhandle Royalty Company: Class A, $.10 par common
Park View Federal Savings Bank (Ohio): $.01 par
common
Performance Food Group Company: $.01 par common
Petsmart, Inc.: $.0001 par common
Philadelphia Consolidated Holding Company : N o par
common
Phillips & Jacobs, Incorporated: $.01 par common
Preferred Entertainment, Inc.: $.01 par common
Price Company, The: Convertible subordinated debentures due 2012
Price Reit, Inc., The: Series B, $.01 par common
Quickresponse Services, Inc.: N o par common
Redman Industries, Inc.: $.01 par common
Renal Treatment Centers, Inc.: $.01 par common
Revenue Properties Company Limited: N o par common
RFS Hotel Investors, Inc.: $.01 par common
RHNB Corporation: $2.50 par common
Rimage Corporation: $.01 par common
River Oaks Furnitures, Inc.: $.01 par common
Royal Grip, Inc.: $.001 par common
Rural/Metro Corporation: $.01 par common
Schuler Homes, Inc.: 6-1/2% convertible subordinated
debentures due 2003
Scientific Games Holding Corporation: $.001 par common
Servicios Financieros Quadrum, S.A.: American Depositary Receipts
SFX Broadcasting, Inc.: Class A, $.01 par common
Shuffle Master, Inc.: $.01 par common
Si Diamond Technology, Inc.: $.001 par common
Simmons Outdoor Corporation: $.01 par common
Speizman Industries, Inc.: $.10 par common
SPSS, Inc.: $.01 par common
Stant Corporation: $.01 par common
Starcraft Automotive Corporation: No par common
Starsight Telecast, Inc.: N o par common
Statesman Group, Inc., The: 6-1/4% convertible subordinated debentures due 2003
Steck-Vaughn Publishing Corporation: $.01 par common
Suburban Bancorporation, Inc. (Ohio): $.01 par common
Sudbury, Inc.: $.01 par common
Summa Four, Inc.: $.01 par common
Taro-Vit Industries Ltd.: Ordinary shares (NIS .0001
par common)
Thomas Group, Inc.: $.01 par common
Tinsley Laboratores, Inc.: N o par common
Triangle Pacific Corporation: $.01 par common
Ultratech Stepper, Inc.: $.001 par common
Uniflex, Inc.: $.10 par common
Union Bankshares Corporation: $5.00 par common
United International Holdings, Inc.: Class A, $.01 par
common
Urethane Technologies, Inc.: $.01 par common
Vaalco Energy, Inc.: $.10 par common
Valley Fashions Corporation: Class A, $.01 par common
Valuevision International, Inc.: $.01 par ocmmon
Victoria Financial Corporation: $.01 par common
Washington Mutual Savings Bank (Washington):
Series E, 7.6% N o par non-cumulative perpetual
preferred
Wellcare Management Group, Inc., The: $.01 par
common
Wonderware Corporation: $.001 par common
Zale Corporation: $.01 par common; Class A, Warrants (expire 07-29-98)
Zonagen, Inc.: $.001 par common
Additions to the List of Foreign Margin Stocks
Canadian Natural Resources Ltd.: N o par common
Nippon Paper Industries Co., Ltd.: ¥ 5 0 par common
Deletions from the List of Foreign Margin
Stocks
Jujo Paper Company Ltd.: ¥ 5 0 par common
Midland Bank PLC: Ordinary shares, par value 100 p
Rank Hovis McDougall PLC: Common, par value 25 p
Sanyo-Kokusaku Pulp Co., Ltd.: ¥ 5 0 par common
Legal Developments
FINAL RULE—AMENDMENT
TO RULES
REGARDING DELEGATION OF AUTHORITY
The Board of Governors is amending 12 C.F.R. Part
265, its Rules Regarding Delegation of Authority, to
grant individual waivers under the federal conflicts of
interest statute in cases in which the employee's
financial interest is not so substantial as to be likely to
affect the integrity of the employee's services to the
Board. This delegation of authority will reduce the
administrative burden of acting on such waiver requests.
Effective September 1, 1993, 12 C.F.R. Part 265 is
amended as follows:
Part 265—Rules
Authority
Regarding
Delegation
of
1. The authority citation for Part 265 continues to read
as follows:
Authority:
12 U . S . C . 248(i) and (k).
2. Section 265.6 is amended by adding paragraph (g) to
read as follows:
Section 265.6—Functions delegated to General
Counsel.
(g) Conflicts of interest waivers. To issue individual
conflicts of interest waivers under 18 U . S . C . 208(b)(1)
to employees and officials other than Board members.
ORDERS ISSUED UNDER BANK
COMPANY ACT
Orders Issued Under Section
Holding Company
Act
HOLDING
3 of the
the Acquisition
of a Bank
Holding
AmSouth Bancorporation, Birmingham, Alabama
("AmSouth"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC
Act"), has applied under section 3 of the BHC Act
(12 U . S . C . § 1842) to acquire all the voting shares of
Orange Banking Corporation ("Orange Corpora-
tion"), and thereby indirectly acquire Orange Bank
("Orange Bank"), both of Orlando, Florida. 1
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 39,815 (1993)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the factors set forth in section 3 of the
BHC Act.
AmSouth, with total consolidated assets of
$11.2 billion, controls subsidiary banks in Alabama,
Florida, Georgia, and Tennessee. 2 AmSouth is the
fifth largest commercial banking organization in Florida, controlling deposits of $2.2 billion, representing
1.9 percent of total deposits in commercial banks in
the state. 3 Orange Corporation is the 30th largest
commercial banking organization in Florida, controlling deposits of $318.8 million, representing less than 1
percent of total deposits in commercial banks in the
state. Upon consummation of this proposal, AmSouth
would remain the fifth largest commercial banking
organization in Florida, controlling deposits of $2.5
billion, representing 2.1 percent of total deposits in
commercial banks in the state. 4
AmSouth and Orange Corporation 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 in any relevant
banking market.
Convenience
and Needs
Considerations
In reviewing an application to acquire a depository
institution under the BHC Act, the Board must consider the convenience and needs of the communities to
be served, and take into account the records of the
relevant depository institutions under the Community
Reinvestment
Act
(12 U . S . C . § 2901
et
seq.)
("CRA"). The CRA requires the federal financial
Bank
AmSouth Bancorporation
Birmingham, Alabama
Order Approving
Company
1149
1. Upon consummation of this proposal, Orange Corporation will
merge into AmSouth and Orange Bank will merge into AmSouth's
subsidiary bank, AmSouth Bank of Florida, Pensacola, Florida. In
this regard, AmSouth has filed an application with the Federal Deposit
Insurance Corporation pursuant to the Bank Merger Act
(12 U.S.C. § 1828(c)) for approval of this bank merger.
2. Asset data are as of June 30, 1993.
3. State deposit data are as of June 30, 1993, and include acquisitions by AmSouth of Charter Banking Corp., St. Petersburg, Florida
(see AmSouth Bancorporation,
79 Federal Reserve Bulletin 951
(1993)), and Mid-State Federal Savings Bank, Ocala, Florida (see
AmSouth Bancorporation, 79 Federal Reserve Bulletin 981 (1993)).
4. The Board previously has determined that the interstate banking
statute of Florida permits an Alabama bank holding company to
acquire banking organizations in Florida. See SouthTrust
Corporation, 74 Federal Reserve Bulletin 56 (1988). Thus, consummation of
this transaction is not barred by section 3(d) of the BHC Act
(12 U.S.C. § 1842(d)).
1150
Federal Reserve Bulletin • December 1993
supervisory agencies to encourage financial institutions to help meet the credit needs of the local communities in which they operate, consistent with the
safe and sound operation of such institutions. To
accomplish this end, the CRA requires the appropriate
federal supervisory authority to "assess the institution's record of meeting the credit needs of its entire
community, including low- and moderate-income
neighborhoods, consistent with the safe and sound
operation of such institution," and to take that record
into account in its evaluation of bank holding company
applications. 5
In this regard, the Board has received comments
from the Southern Christian Leadership Conference
("Protestant") 6 critical of the record of AmSouth's
subsidiary bank, AmSouth Bank of Florida, Pensacola, Florida ("AmSouth Bank-Florida"), in meeting
the credit needs of African-American residents within
its delineated community. 7 In particular, Protestant
alleges that AmSouth Bank-Florida has not adequately
provided credit to the African-American community
for low- and middle-income housing or for the revitalization of business and residential districts. The Board
has carefully reviewed the CRA performance records
of AmSouth, Orange Corporation, and their subsidiary
banks, as well as the comments received, AmSouth's
responses to those comments, and all other relevant
facts of record in light of the CRA, the Board's
regulations, and the Statement of the Federal Finan-
5. 12 U.S.C. § 2903.
6. The Board also has received comments from the Alabama
Community Reinvestment Alliance ("ACRA") alleging that AmSouth
has not met the convenience and needs of low- and moderate-income
African-American residents in Jefferson County and Birmingham,
Alabama, and that AmSouth has not made direct investments in
inner-city neighborhoods. These comments were considered by the
Board in connection with AmSouth's acquisition of Charter Banking,
Corp., St. Petersburg, Florida. See 79 Federal Reserve Bulletin 951
(1993) ("Charter Banking Order'"). Based on all the facts of record,
and for the reasons discussed in the Charter Banking Order and in this
order, the Board does not believe that these comments warrant denial
of this proposal.
7. Protestant also asserts that AmSouth Bank-Florida has not
implemented an affirmative action program, does not employ any
African-American males, and that African-Americans are, on the
whole, under-represented at the bank. AmSouth has responded to
these allegations by stating that AmSouth Bank-Florida has an affirmative action program in place that has resulted in the employment of
African-Americans in several capacities at the bank. AmSouth also
indicates that 50 percent of the bank's 1993 management trainees are
African-Americans and that African-Americans serve on the bank's
advisory boards of directors in Pensacola and Panama City.
Because AmSouth Bank-Florida employs more than 50 people and
acts as an agent to sell or redeem U.S. savings bonds and notes, it is
required by Treasury Department and Department of Labor regulations to:
(1) File annual reports with the Equal Employment Opportunity
Commission; and
(2) Have in place a written affirmative action program which states
its intentions, efforts, and plans to achieve equal opportunity in the
employment, hiring, promotion, and separation of personnel.
cial Supervisory Agencies Regarding the Community
Reinvestment Act ("Agency CRA Statement"). 8
A. CRA Performance Examinations
The Agency CRA Statement provides that a CRA
examination is an important, and often controlling,
factor in the consideration of an institution's CRA
record, and that these reports will be given great
weight in the applications process. 9 The record in this
case indicates that all of AmSouth's subsidiary banks
have received "outstanding" or "satisfactory" ratings
during the most recent examinations of their CRA
performance. In particular, AmSouth's lead subsidiary
bank, AmSouth Bank, N . A . , Birmingham, Alabama,
received an "outstanding" rating for CRA performance from its primary regulator, the Office of the
Comptroller of the Currency ("OCC"), in October
1992, and AmSouth Bank-Florida received an "outstanding" CRA rating from the Federal Deposit Insurance Corporation ("FDIC") in January 1993. 10 In
addition, Orange Bank received a "satisfactory" CRA
rating from the FDIC in February 1993.
B. Other Aspects of CRA Performance
The Board has carefully reviewed the CRA performance record of AmSouth Bank-Florida, including its
most recent CRA examination and information the
bank is required to file under the Home Mortgage
Disclosure Act ("HMDA"), in light of the allegations
made by Protestant. In this regard, the most recent
CRA examination found no evidence of illegal discrimination or other illegal credit practices at AmSouth
Bank-Florida. This examination also found no evidence of any practices or procedures that would
discourage or attempt to discourage credit applications, and noted that AmSouth Bank-Florida's credit
extensions, applications, and denials reflected a reasonable penetration into all segments of its delineated
communities.
Lending and Investment Programs. In its most
recent CRA examination of AmSouth Bank-Florida,
the FDIC indicated that the bank's lending record is
"exceptional" and consistent with credit needs iden-
8. 54 Federal Register 13,742 (1989).
9. 54 Federal Registers
13,745 (1989).
10. AmSouth's other subsidiary banks have received the following
CRA ratings: AmSouth Bank of Tennessee, Nashville, Tennessee,
received a "satisfactory" rating from the FDIC in September 1992,
and AmSouth Bank of Walker County, Jasper, Alabama, received a
"satisfactory" rating from the FDIC in January 1991. AmSouth Bank
of Georgia, Summerville, Georgia, opened for business in February
1993, and has not yet been examined for CRA performance.
Legal Developments
tified within its delineated community. 11 In particular,
AmSouth Bank-Florida offers a variety of products
and services to attempt to meet the credit needs of
low- and moderate-income and minority communities. 12 For example, in July 1992, the bank introduced
a special mortgage loan program for borrowers making
80 percent or less of the median income in the community. This program, which provides 100 percent
financing for homes with a maximum purchase price of
$50,000, has resulted in the bank's extending 151 new
loans totalling $5.7 million. AmSouth Bank-Florida
also has developed the "Affordable Housing Program" designed to provide low-income housing within
its community.
A review of HMDA data filed by AmSouth BankFlorida shows an increase in the number of loan
applications received by the bank from AfricanAmericans and an increase in the number of loans
originated to African-Americans. In particular, 1992
HMDA data indicate that AmSouth Bank-Florida has
nearly tripled the number of loans extended to African-American residents in certain census tracts within
its delineated community as compared to 1991. At the
same time, the number of mortgage applications received by the bank from African-Americans in Florida
has significantly increased, as has AmSouth BankFlorida's ratio of loan originations to loan applications. 13
1151
proved by the Department of Housing and Urban
Development, and the Panama City branch has extended a loan to the Panama City Housing Authority
for the provision of low-income housing.
AmSouth Bank-Florida also participates in various
programs designed to provide credit to local small
businesses. For example, the bank's CRA examination indicates that it is an active participant in Community Equity Investment, Inc. ("CEII"), an organization which helps minority-owned businesses obtain
credit. AmSouth Bank-Florida, as an authorized Small
Business Administration ("SBA") lender, also had
extended 63 SBA-guaranteed loans totalling $9 million
as of January 1993. Additionally, as of April 1992,
AmSouth Bank-Florida had 1,055 business loans of
$100,000 or less outstanding, totalling $32.1 million.
C. Conclusion Regarding the Convenience and
Needs Factor
AmSouth Bank-Florida also has provided credit for
the construction or renovation of low-income rental
housing. For example, the bank has extended a loan to
a minority-owned developer to build low-income
apartment units in the Ft. Walton, Florida area.
AmSouth Bank-Florida also has provided financing to
a nonprofit developer to finance the purchase and
renovation of 90 low-income rental units. In addition,
the Ft. Walton branch of AmSouth Bank-Florida has
provided financing for low-income housing loans ap-
The Board has carefully considered the entire record
of the CRA performance of AmSouth, Orange Corporation, and their subsidiary banks, including the comments filed in this case by Protestant, in reviewing the
convenience and needs factors under the BHC Act.
Based on a review of the entire record of performance
by AmSouth, Orange Corporation, and their subsidiary banks, the Board believes that the record of
AmSouth, Orange Corporation, and their subsidiary
banks in helping to meet the credit needs of all
segments of the communities they serve, including
low- and moderate-income neighborhoods, are consistent with approval. 14 For these reasons, and on the
basis of all the facts of record, the Board concludes
that the convenience and needs considerations, including the CRA performance of AmSouth, Orange Corporation, and their subsidiary banks, are consistent
with approval of this application. 15
11. In addition, AmSouth Bank-Florida recently received an award
from the Escambia County, Florida, division of the National Association for the Advancement of Colored People (NAACP) for its efforts
in meeting local credit needs.
12. Protestant asserts that AmSouth Bank-Florida has not marketed
available credit products to African-Americans in its delineated community. In this regard, the most recent CRA examination for AmSouth Bank-Florida notes that the bank has developed marketing and
advertising programs to inform all segments of the bank's delineated
communities about available credit products and services.
13. Protestant asserts that AmSouth has allocated $35 million in
mortgage financing to minorities in four states and requests that
AmSouth account for disbursement of these funds. AmSouth denies
having made such a representation, and states that its $35 million
special low-income mortgage loan program, developed in mid-1992, is
designed to meet the credit needs of all low- and moderate-income
residents within its delineated communities, including, but not limited
to, minorities. Through this program, AmSouth Bank-Florida has
originated 217 loans, totalling $8.4 million, to low-income applicants
since mid-1992.
14. Protestant asserts that AmSouth Bank-Florida has not employed
African-American vendors or firms. AmSouth Bank-Florida indicates
that it recognizes the need to expand the use of minority vendors in
Florida and presently is taking steps to address this issue. While the
Board fully supports affirmative action programs designed to promote
equal opportunities for third-party contractors, the Board believes
that the bank's contracting practices are beyond the scope of factors
that may be assessed under the CRA.
15. ACRA has requested that the Board hold a public meeting or
hearing on this application. The Board is not required under section
3(b) of the BHC Act to hold a hearing on an application unless the
appropriate banking authority for the bank to be acquired makes a
timely written recommendation of denial of the application. In this
case, the Florida Comptroller has not recommended denial.
Generally, under the Board's rules, the Board may, in its discretion,
hold a public hearing or meeting on an application to clarify factual
issues related to the application, and to provide an opportunity for
testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The
Board has carefully considered this request. In the Board's view,
interested parties have had a sufficient opportunity to present written
1152
Other
Federal Reserve Bulletin • December 1993
Considerations
The Board also concludes that the financial and managerial resources and future prospects of AmSouth,
Orange Corporation, and their subsidiary banks, and
other supervisory factors the Board must consider
under section 3 of the BHC Act, are consistent with
approval.
Based on all the facts of record, the Board has
determined that this application should be, and hereby
is, approved. The Board's approval is specifically
conditioned upon compliance by AmSouth with all the
commitments made in connection with this application. For the purpose 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.
This acquisition shall not be consummated before
the thirtieth calendar day following the effective date
of this Order, or later than three months after the
effective date of this Order, unless such period is
extended for good cause by the Board or by the
Federal Reserve Bank of Atlanta, acting pursuant to
delegated authority.
By order of the Board of Governors, effective
October 18, 1993.
Voting for this action: Chairman Greenspan and Governors
Angell, Kelley, LaWare, Lindsey, and Phillips. Absent and
not voting: Governor Mullins.
JENNIFER J. JOHNSON
Associate
Secretary of the Board
Banc One Illinois Corporation
Springfield, Illinois
the Acquisition
of a Bank Holding
Banc One Corporation, Columbus, Ohio, and Banc
One Illinois Corporation, Springfield, Illinois (together
"Banc One"), bank holding companies within the
meaning of the Bank Holding Company Act ("BHC
Act"), have applied under section 3 of the BHC Act
(12 U.S.C. § 1842) to acquire Mid States Bancshares,
submissions, and have submitted substantial written 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 in this application, or
otherwise warranted in this case. Accordingly, the request for a public
meeting or hearing on this application is hereby denied.
Banc One and Mid States do not compete directly in
any relevant banking markets. 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 in any relevant banking
market.
Convenience
Banc One Corporation
Columbus, Ohio
Order Approving
Company
Inc. ("Mid States"), and thereby indirectly acquire
The First National Bank of Moline ("Moline Bank"),
both of Moline, Illinois. 1
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 41,090 (1993)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the factors set forth in section 3(c) of
the BHC Act.
Banc One, with total deposits of approximately
$59.2 billion, controls banking subsidiaries in Ohio,
Indiana, Michigan, Wisconsin, Illinois, Colorado,
Kentucky, West Virginia, Texas, Arizona, Utah, California, Oklahoma, and Nebraska. 2 Banc One is the
ninth largest commercial banking organization in Illinois, controlling deposits of $3.3 billion, representing
2.3 percent of the total deposits in commercial banks
in the state. Mid States is the 117th largest commercial
banking organization in Illinois, controlling deposits of
$165.2 million, representing less than 1 percent of the
total deposits in commercial banks in the state. Upon
consummation of this proposal, Banc One would remain the ninth largest commercial banking organization in Illinois, controlling 2.3 percent of the total
deposits in commercial banks in the state. 3
and Needs
Considerations
In acting on an application to acquire a depository
institution under the BHC Act, the Board must consider the convenience and needs of the communities to
be served, and take into account the records of the
relevant depository institutions under the Community
Reinvestment
Act
(12 U.S.C. § 2901 et
seq.)
("CRA"). The CRA requires the federal financial
1. Banc One proposes to merge Mid States and Banc One's
subsidiary, Banc One Illinois Corporation, with Banc One Illinois
Corporation surviving the merger.
2. State deposit data are as of June 30, 1993, and include acquisitions approved by the Board as of that date. The Board recently has
approved applications by Banc One to control banks in Oklahoma and
Nebraska. See Banc One Corporation, 79 Federal Reserve Bulletin
1055 (1993) ("Central Banking Order") and Banc One Corporation,
79 Federal Reserve Bulletin 1168 (1993) ("FirsTier Order").
3. The Board previously has determined that the interstate banking
statute of Illinois permits an Ohio bank holding company to acquire
banking organizations in Illinois. See Banc One
Corporation,
79 Federal Reserve Bulletin 519 (1993). Thus, consummation of this
transaction is not barred by section 3(d) of the BHC Act (12 U.S.C.
§ 1842(d)).
Legal Developments
supervisory agencies to encourage financial institutions to help meet the credit needs of the local communities in which they operate consistent with the safe
and sound operation of such institutions. To accomplish this end, the CRA requires the appropriate federal supervisory authority to "assess the institution's
record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of such institution," and to take that record into
account in its evaluation of applications. 4
In connection with this application, the Board has
received comments from the Black State Employees
Association of Texas, Inc. ("Protestant"), criticizing
the CRA performance of Banc One and Mid States.
Protestant generally alleges that Banc One, through its
subsidiary bank, Bank One Texas, N.A., Dallas,
Texas ("Bank"), has not complied with the spirit and
requirements of various laws and regulations designed
to prevent discrimination in bank credit practices,
including the CRA, in attempting to meet the credit
needs of the African-American and ethnic minority
communities in Dallas, Fort Worth, Irving and Grand
Prairie, all in Texas. 5
The Board has carefully reviewed the CRA performance records of Banc One and its subsidiary banks,
the comments received and Banc One's responses to
those comments, as well as all other relevant facts of
record, in light of the CRA, the Board's regulations,
and the Statement of the Federal Financial Supervisory Agencies Regarding the Community Reinvestment Act ("Agency CRA Statement"). 6
4. See 12 U.S.C. § 2903.
5. Specifically, Protestant alleges that:
(1) Bank has not developed a plan, or any lending, marketing and
outreach programs, to meet the credit needs of low- income
African-Americans and other minorities in these communities;
(2) Banc One has "redlined" these communities by not providing
bank branches or sufficient credit to individuals in these communities, as indicated by data Bank has filed under the Home Mortgage
Disclosure Act; and
(3) Bank has provided no technical assistance or other support to
individuals and organizations with an understanding of the credit
needs of these communities, such as African-American managers of
Bank, community groups, and consulting groups.
6. 54 Federal Register 13,742 (1989). The Board also has received
comments from the Coalition of Neighborhoods alleging that Banc
One and its subsidiary bank, Banc One Cincinnati, N . A . , Cincinnati,
Ohio, generally have not met the credit needs of minorities, women,
and low- and moderate-income individuals in the Cincinnati area.
These comments were considered by the Board in connection with
Banc One's acquisition of Central Banking Group, Inc., Oklahoma
City, Oklahoma. See Central Banking Order. Based on all the facts of
record, and for the reasons discussed in the Central Banking Order,
the FirsTier Order, and in this order, the Board does not believe that
these comments warrant denial of this proposal.
1153
A . Bank's Performance U n d e r the C R A
Examination Record for CRA Performance.
The
Board has carefully reviewed the CRA performance of
Bank in light of Protestant's comments, relevant reports of examination and data required to be filed
under the
Home
Mortgage
Disclosure
Act
("HMDA"). Initially the Board notes that the Office of
the Comptroller of the Currency ("OCC") determined
that Bank has a "satisfactory" record of meeting
community credit needs in an examination that was
completed on June 29, 1993. In this regard, the Agency
CRA Statement provides that a CRA examination is an
important and often controlling factor in the consideration of an institution's CRA record and that these
reports will be given great weight in the applications
process. 7
The most recent examination for CRA compliance
and performance of Bank found no evidence of illegal
discrimination. Examiners concluded that Bank affirmatively encourages credit applications from all segments of its delineated community, including low- and
moderate-income neighborhoods, for all types of
credit being offered. OCC examiners noted that Bank
is in substantial compliance with laws and regulations
that ensure fair lending practices, and that Bank recently initiated a "second-look process" that reviews
all minority mortgage and home improvement loan
applications that have been denied. In addition, Bank
has hired an independent consulting firm to ensure that
the lending practices at each of its branches is not
discriminatory.
Lending Programs. Bank offers a variety of credit
products and services designed to meet the credit
needs of low- and moderate-income and minority
neighborhoods within its delineated communities. In
this regard, the bank's most recent CRA examination
indicates that its total loan production in 1992 in lowand moderate-income census tracts was approximately $300 million, including more than 650 loans
totalling $28 million originated by Bank through its
Affordable Housing Lenders in Dallas, Austin, Fort
Worth, Houston, Midcities, and San Antonio. In 1992,
Bank also introduced the American Dream Mortgage
Program. Through this program, which provides flexible underwriting criteria, Bank extended $9.5 million
in 1992. Bank also offers a First Time Borrowers
program for individuals who have no established credit
history.
Bank has taken steps to assist in meeting the credit
needs of the African-American community in its
7. 54 Federal Register at 13,745 (1989). The Board also notes that
Moline Bank received an "outstanding" CRA rating from the OCC in
September 1990.
1154
Federal Reserve Bulletin • December 1993
service area. For example, Bank extended over 1,000
loans totalling over $10 million in the Dallas community of Southeast Oak Cliff in 1992. These loans
included mortgages, home-improvement, small business, and consumer loans. In addition, through its
relationship with the Voice of Hope organization,
Bank provided the financing necessary to construct
new housing units in a predominantly African-American section of West Dallas. Bank also has established relationships with other Dallas-based community groups, such as the Oak Cliff Development
Corporation and the Inner-city Community Development Corporation, who work in predominantly African-American communities. Similar relationships
with Rainbow Bridge and the Dallas West Interdenominational Ministerial Alliance have resulted in
new housing construction in South Dallas/Fair Park
and other West Dallas communities.
Marketing Efforts and Community Involvement. In
its most recent CRA examination of Bank, the OCC
indicated that the bank has implemented sound marketing and advertising programs to inform all segments
of its delineated communities about available credit
products and services. It is the responsibility of
Bank's statewide marketing department to develop
marketing programs that are targeted to various consumer segments. In this regard, Bank's marketing
program recently has targeted African-Americans,
Hispanics, small businesses, and low- and moderateincome individuals. Bank's marketing efforts in the
African-American community are directed by an
African-American advertising agency and include
print advertisements in the Minority Opportunity
News, a publication that focuses specifically on the
African-American market.
Bank's CRA examination also indicates that Bank
has established ongoing relationships with various
community groups to help address affordable housing
needs in inner-city communities in Texas. In this
regard, Bank communicates with the Voice of Hope
and the Dallas Affordable Housing Partnership, as
well as local and state government agencies, to better
understand community credit needs and to participate in local community development projects. Bank
also has an ongoing relationship with the Dallas
Urban League whereby Bank gives informational
seminars on home ownership and mortgage products
to targeted segments of the African-American community. In addition, through the Center for Housing
Resources ("CHR"), Bank provides technical assistance to non-profit housing and neighborhood community groups in Dallas. Bank also is holding home
improvement seminars in the Dalworth neighborhood of Grand Prairie.
Bank meets with small businesses in South Dallas in
order to assess and meet their financing needs. 8 These
community contacts have led to the development of a
variety of products and services for small businesses,
including the Flat Fee Small Business Checking Account and the Small Business Loan Center. 9 In addition, Bank's Texas Small Business Loan Kit and
Business Banking Guide help small business owners
assess their financial needs and in preparing loan
applications. To supplement this information, Bank's
Texas Small Business group sponsored over 60 seminars with over 3,000 participants in Dallas in 1992.
Bank's CRA examination states that Bank has established branches throughout its twenty-three delineated communities, including low- and moderateincome and minority neighborhoods, to attempt to
meet community credit needs. Moreover, the record in
this case indicates that Bank operates branches that
serve each of the communities identified by Protestant, including a branch on Martin Luther King Boulevard that Bank established in 1992 to address the
banking needs of low- and moderate-income neighborhoods in South Dallas.
B. Other Aspects of Banc One's CRA
Performance
In reviewing recent acquisitions by Banc One, the
Board has carefully considered the record of performance of Banc One and its various subsidiary banks
under the CRA. 10 The record in this case indicates that
all but two of Banc One's 78 subsidiary banks have
received either "outstanding" or "satisfactory" ratings
from their primary regulators in their most recent
examinations of their CRA performance, and that one
of these banks was assigned this rating prior to being
acquired by Banc One. 11 Additionally, Banc One's lead
subsidiary bank, Bank One Columbus, N.A., Columbus, Ohio, received an "outstanding" rating for CRA
performance from its primary regulator, the OCC, in
April 1993.
The Board is continuously reviewing Banc One's
CRA program and the effectiveness of this program in
addressing identified deficiencies in the CRA programs
8. In the Southern Dallas market, Bank's Small Business Lenders
have made over 1,350 calls on small businesses and others in the
business community since January 1992.
9. The Small Business Loan Center attempts to meet the special
credit needs of small businesses in a variety of ways, including offering
to process applications for credit of $100,000 or less within four days.
10. See, e.g., Banc One Corporation, 79 Federal Reserve Bulletin
524 (1993) ("Valley National Order"); Banc One
Corporation,
79 Federal Reserve Bulletin 872 (1993) ("Colorado Western Order");
and FirsTier Order.
11. See FirsTier Order p. 6 at note 14.
Legal Developments
in its subsidiary banks that are rated less than satisfactory. 12 In this regard, the record indicates that Banc
One has, to date, taken successful steps to correct any
of the identified weaknesses in the CRA programs of
its subsidiary banks. 13
C. Conclusion Regarding Convenience and
Needs Factor
The Board has carefully considered all the facts of
record, including the comments received, in reviewing
the convenience and needs factor under the BHC Act.
Based on a review of the entire record of performance
by Banc One, Mid States, and their subsidiary banks,
the Board believes that the efforts of Banc One, Mid
States, and their subsidiary banks to help meet the
convenience and needs of all segments of the communities they serve, including the credit needs of lowand moderate-income neighborhoods, are consistent
with approval of this proposal. 14
Other
Considerations
The Board concludes that the financial and managerial
resources, supervisory factors, and future prospects of
Banc One, Mid States, and their respective subsidiaries, are consistent with approval of this proposal.
Based on the foregoing and other facts of record, the
Board has determined that the application should be,
and hereby is, approved. The Board's approval is
specifically conditioned upon compliance with all of
the commitments made by Banc One in connection
with this application. For purposes of this action,
these commitments and conditions will both be considered conditions imposed in writing by the Board
12. See FirsTier Order at p. 16.
13. See FirsTier Order at pp. 16-17 (review of steps by Bank One
Cleveland, N . A . , Cleveland, Ohio to address its "needs to improve"
rating).
14. Protestant has requested that the Board hold a public meeting or
hearing on this application. The Board is not required under section
3(b) of the BHC Act to hold a hearing on an application unless the
appropriate banking authority for the bank to be acquired makes a
timely written recommendation of denial of the application. In this
case, the OCC has not recommended denial of this proposal.
Generally, under the Board's rules, the Board may, in its discretion,
hold a public hearing or meeting on an application to clarify factual
issues related to the application, and to provide an opportunity for
testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The
Board has carefully considered this request. In the Board's view,
interested parties have had a sufficient opportunity to present written
submissions, and have submitted substantial written 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 in this application, or
otherwise warranted in this case. Accordingly, the request for a public
meeting or hearing on this application is hereby denied.
1155
and, as such, may be enforced in proceedings under
applicable law.
This transaction shall not be consummated before
the thirtieth calendar day following the effective date
of this Order, or later than three months after the
effective date of this Order, unless such period is
extended for good cause by the Federal Reserve Bank
of Cleveland, acting pursuant to delegated authority.
By order of the Board of Governors, effective
October 18, 1993.
Voting for this action: Chairman Greenspan and Governors
Angell, Kelley, LaWare, Lindsey, and Phillips. Absent and
not voting: Governor Mullins.
J E N N I F E R J . JOHNSON
Associate
Secretary of the Board
Barnett Banks, Inc.
Jacksonville, Florida
Order Approving Acquisition of a Bank, Merger of
Banks, and Increase of Investment in Bank Premises
Barnett Banks, Inc., Jacksonville, Florida ("Barnett"), a bank holding company within the meaning of
the Bank Holding Company Act ("BHC Act"), has
applied under section 3(a)(3) of the BHC Act
(12 U.S.C. § 1842(a)(3)) to acquire all the voting
shares of The Citizens and Peoples National Bank of
Pensacola, Pensacola, Florida ("Citizens Bank"), a
wholly owned subsidiary bank of Bank South Corporation, Atlanta, Georgia. In addition, Barnett Bank of
West Florida, Pensacola, Florida ("West Florida
Bank"), a wholly owned, state member subsidiary
bank of Barnett, has applied under section 18(c) of the
Federal Deposit Insurance Act (12 U.S.C. § 1828(c))
("Bank Merger Act") to merge with Citizens Bank,
with West Florida Bank to be the surviving entity.
West Florida Bank has also applied to increase its
investment in bank premises pursuant to section 24A
of the Federal Reserve Act (12 U.S.C. § 371d).
Notice of the applications, affording interested persons an opportunity to submit comments, has been
given in accordance with the BHC Act, the Bank
Merger Act, and the Board's Rules of Procedure
(12 C.F.R. 262.3(b)). As required by the Bank Merger
Act, reports on the competitive effects of the merger
were requested from the United States Attorney General, the Office of the Comptroller of the Currency
("OCC"), and the Federal Deposit Insurance Corporation ("FDIC"). The time for filing comments has
expired, and the Board has considered the applications
and all comments received in light of the factors set
1156
Federal Reserve Bulletin • December 1993
forth in the BHC Act, the Bank Merger Act, and the
Federal Reserve Act.
Barnett, with total consolidated assets of
$38.2 billion, operates 34 subsidiary banks in Florida
and Georgia.1 Barnett is the largest commercial banking
organization in Florida, controlling deposits of
$31.8 billion, representing 26.8 percent of total deposits
in commercial banking organizations in the state. Citizens Bank is the 25th largest commercial banking
organization in Florida, controlling deposits of
$330.7 million, representing less than 1 percent of total
deposits in commercial banking organizations in the
state. 2
West Florida Bank and Citizens Bank compete
directly in the Pensacola banking market. 3 Barnett is
the second largest depository institution in the market,
controlling deposits of $369.7 million, representing
15.2 percent of total deposits in depository institutions
in the market ("market deposits"). 4 Citizens Bank is
the third largest depository institution in the market,
controlling deposits of $330.7 million, representing
13.6 percent of market deposits. Upon consummation,
Barnett would become the largest depository institution in the market, controlling total deposits of
$700.4 million, representing 28.9 percent of market
deposits. The Herfindahl-Hirschman Index ("HHI")
would increase by 415 points to 1662, and, therefore,
would not exceed the threshold standards in the Department of Justice's revised guidelines. 5
A number of other factors also indicate that this
proposal would not have a significantly adverse effect
on competition. For example, following consummation
of this proposal, fifteen competitors, including seven
large regional and super-regional commercial banking
organizations, would continue to serve the market. In
addition, the legal barriers to entry are low. Florida is a
1. Asset data are as of March 31, 1993.
2. State and market deposit data are as of June 30, 1992.
3. The Pensacola banking market is approximated by Escambia and
Santa Rosa Counties, both in Florida.
4. In this context, depository institutions include commercial banks
and savings banks. 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, major competitors of commercial
banks. See Midwest Financial Group, 75 Federal Reserve Bulletin 386
(1989); National City Corporation, 70 Federal Reserve Bulletin 743
(1984).
5. Under the revised Department of Justice Merger Guidelines,
49 Federal Register 26,823 (1984), a market in which the post-merger
HHI is between 1000 and 1800 is considered moderately concentrated.
The Department of Justice has informed the Board that a bank merger
or acquisition generally will not be challenged (in the absence of other
factors indicating anticompetitive effects) unless the post-merger HHI
is at least 1800 and the merger or acquisition increases the HHI by at
least 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 limited
purpose lenders and other non-depository financial entities.
member of the southeast regional interstate banking
compact, and permits the entry of bank holding companies from fourteen other states and the District of
Columbia. Since 1990, one thrift institution has made a
de novo entry, and four commercial banking organizations, including two large regional commercial banking
organizations, have entered the market by acquisition.
The Attorney General, the OCC, and the FDIC have
not objected to consummation of this proposal or
indicated that the proposal would have any significantly
adverse competitive effects.
Based on all the facts of record, and for the reasons
discussed above, the Board concludes that consummation of this proposal would not have a significantly
adverse effect on competition or the concentration of
banking resources in the Pensacola banking market or
any other relevant banking market. 6
The Board also concludes that the financial and
managerial resources, future prospects, and supervisory factors of Barnett and Citizens Bank are consistent
with approval of these applications. 7 In addition, the
Board has reviewed the convenience and needs factor
in light of comments filed in connection with these
applications, and has determined that considerations
relating to the convenience and needs of the communities to be served are consistent with approval. 8
6. In reviewing the competitive factors, the Board has carefully
considered a comment from an individual ("Commenter") alleging that
this proposal would adversely affect competition in Florida by increasing Barnett Bank's presence in the state. The Board continues to
believe that the appropriate banking market for reviewing the competitive effects of a proposed bank acquisition is local in nature. See, e.g.,
SouthTrust Corporation, 78 Federal Reserve Bulletin 710 (1992); First
Hawaiian, Inc., 11 Federal Reserve Bulletin 52 (1991); United States v.
Philadelphia National Bank, 374 U.S. 321 (1963). For the reasons
discussed above, the Board concludes that these comments do not raise
issues that would warrant denial of the proposal.
7. Commenter also generally alleges that Barnett has treated its
employees unfairly by over-compensating senior officers and eliminating positions through consolidation. The Board notes that Barnett
received no criticism of its salary or employment practices during its
most recent supervisory examination as of June 1992 or in previous
examinations. Based on all the facts of record, including reports of
examination and information collected in the examination process, the
Board does not believe that these comments warrant denial of this
application.
8. The Board also has considered Commenter's general assertion
that Barnett has a deficient record of lending to small businesses,
minorities, and lower-income customers, in light of its performance
under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.)
("CRA"). All Barnett subsidiary banks have received "satisfactory"
or "outstanding" evaluations for CRA performance in their most
recent examinations by their primary regulators. In addition, Bamett
has announced a five-year, $2 billion lending goal, beginning in 1993,
targeted to housing for low- and moderate-income families and credit
for small businesses owned by women and minorities. During the first
two quarters of 1993, Barnett made approximately $300 million of
loans in Florida as part of this effort. In light of all the facts of record,
including the CRA and supervisory examinations of Barnett and its
subsidiary banks, the Board does not believe that these comments
warrant denial of these applications.
Legal Developments
West Florida Bank also has applied under section
24A of the Federal Reserve Act (12 U.S.C. § 371d) to
increase its investment in bank premises. The Board
has considered the factors it is required to consider
when reviewing an application for increasing investment in bank premises and finds those factors to be
consistent with approval.
Based on the foregoing and other facts of record,
the Board has determined that the applications under
the BHC Act, the Bank Merger Act, and the Federal
Reserve Act should be, and hereby are, approved. 9
The Board's approval is specifically conditioned
upon compliance with all the commitments made by
Barnett in connection with these applications. For
purposes of this action, both the commitments and
conditions relied upon by the Board in reaching its
decision are commitments imposed in writing by the
Board in connection with its findings and decision,
and, as such, may be enforced in proceedings under
applicable law.
This transaction shall not be consummated before
the thirtieth calendar day following the effective date
of this Order, or later than three months 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 Atlanta, acting pursuant to
delegated authority.
By order of the Board of Governors, effective
October 25, 1993.
Voting for this action: Chairman Greenspan and Governors
Angell, Kelley, LaWare, and Phillips. Absent and not voting:
Governors Mullins and Lindsey.
J E N N I F E R J. JOHNSON
Associate
Secretary of the Board
9. Commenter has asked to participate in any public hearing or
meeting convened involving Barnett, and the Board has carefully
considered this request. The Board is not required under section 3 of
the BHC Act to hold a public hearing or meeting unless the OCC or the
state supervisory authority for the bank to be acquired does not
approve the proposal. In this case, the state supervisory authority for
the bank does not object to the proposal.
Generally, under the Board's rules, the Board may, in its discretion,
hold a public hearing or meeting on an application to clarify factual
issues related to the application and to provide an opportunity for
testimony, if appropriate. See 12 C.F.R. 262.3(e) and 262.25(d). In the
Board's view, Commenter has had ample opportunity to present
submissions, and has submitted substantial written comments that
have been considered by the Board. In light of these facts, the Board
has determined that a public hearing or meeting is neither necessary to
clarify the factual record in these applications nor otherwise warranted in this case. Accordingly, a public hearing or meeting on these
applications will not be convened.
1157
First Delta Corporation
Helena, Arkansas
Order Approving
the Acquisition
of a Bank
First Delta Corporation, Helena, Arkansas ("First
Delta"), a bank holding company within the meaning
of the Bank Holding Company Act ("BHC Act"), has
applied under section 3(a)(3) of the BHC Act
(12 U.S.C. § 1842(a)(3)) to acquire at least 75.2 percent of the voting shares of The Delta State Bank,
Elaine, Arkansas ("Bank").
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 43,897 (1993)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the factors set forth in section 3(c) of
the BHC Act.
First Delta, which operates one subsidiary bank,
First National Bank of Phillips County, Helena, Arkansas ("First National"), is the 54th largest commercial banking organization in Arkansas, controlling deposits of approximately $88.4 million, representing
less than 1 percent of total deposits in commercial
banking organizations in the state. 1 Bank is the 184th
largest commercial banking organization in the state,
controlling deposits of $1 million, representing less
than 1 percent of total deposits in commercial banking
organizations in the state. Upon consummation of this
proposal, First Delta will become the 53d largest
commercial banking organization in the state with
deposits of $89.4 million, representing less than 1 percent of total deposits in commercial banking organizations in the state.
First Delta and Bank compete directly in the Phillips
County, Arkansas, banking market. 2 First Delta is the
largest commercial banking organization, 3 controlling
deposits of $88.4 million, representing 35.5 percent of
total deposits in commercial banking organizations in
the market ("market deposits"). 4 Bank is the fourth
largest commercial banking organization in the market, controlling market deposits of $1 million, representing less than 1 percent of market deposits. Upon
consummation of this proposal, First Delta would
remain the largest commercial banking organization in
the market, controlling deposits of $89.4 million,
representing 35.9 percent of market deposits. The
1. Deposit data are as of June 30, 1992.
2. The Phillips County, Arkansas banking market is approximated
by Phillips County, Arkansas.
3. N o thrift institutions operate in the Phillips County, Arkansas,
banking market.
4. Market data are as of June 30, 1992.
1158
Federal Reserve Bulletin • December 1993
Herfindahl-Hirschman Index ("HHI") for the market
would increase by 29 points to 3345.5
The increase in market concentration, as measured
by the HHI, is relatively small and does not exceed the
Department of Justice merger guidelines. In addition,
three commercial banking organizations would remain
in the Phillips County banking market with comparable market shares, and each competitor in the market
would control over 30 percent of market deposits.
After considering the competition offered by other
commercial banking organizations in the market, the
relatively small increase in market share and market
concentration, and all other facts of record, the Board
concludes that consummation of the proposal would
not have a significantly adverse effect on competition
in the Phillips County banking market or any other
relevant banking market.
The Board also concludes that the financial and
managerial resources and future prospects of First
Delta, First National, and Bank are consistent with
approval. Convenience and needs considerations and
other supervisory factors that the Board is required to
consider under section 3 of the BHC Act also are
consistent with approval of this application.
Based on the foregoing and other facts of record, the
Board has determined that the application should be,
and hereby is, approved. The Board's approval of this
transaction is specifically conditioned upon compliance with the commitments given in connection with
this application. For the purposes of this action, the
commitments and conditions relied on in reaching this
decision are both considered to be conditions imposed
in writing by the Board and, as such, may be enforced
in proceedings under applicable laws. The transaction
approved in this Order shall not be consummated
before the thirtieth calendar day following the effective
date of this Order, or later than three months after the
effective date of this Order, unless such period is
extended for good cause by the Board or by the
Federal Reserve Bank of St. Louis, pursuant to delegated authority.
By order of the Board of Governors, effective
October 25, 1993.
5. Under the revised Department of Justice Merger Guidelines,
49 Federal Register 26,823 (June 29, 1984), a market in which the
post-merger HHI is above 1800 is considered highly concentrated. In
such markets, the Justice Department is likely to challenge a merger
that increases the HHI by more than 50 points. The Justice Department has informed the Board that a bank merger or acquisition
generally will not be challenged (in the absence of other factors
indicating anticompetitive effects) unless the post-merger HHI is at
least 1800 and the merger increases the HHI by at least 200 points. The
Justice Department has stated that the higher than normal threshold
for an increase in the HHI when screening bank mergers and acquisitions for anticompetitive effects implicitly recognizes the competitive effect of limited-purpose lenders and other non-depository financial entities.
Voting for this action: Chairman Greenspan and Governors
Angell, Kelley, LaWare, and Phillips. Absent and not voting:
Governors Mullins and Lindsey.
J E N N I F E R J. JOHNSON
Associate
Orders Issued Under Section
Holding Company
Act
Secretary of the Board
4 of the
Bank
Banc One Corporation
Columbus, Ohio
CoreStates Financial Corp
Philadelphia, Pennsylvania
PNC Financial Corp
Pittsburgh, Pennsylvania
Society Corporation
Cleveland, Ohio
Order Approving Applications to Conduct Certain
Activities
Data Processing and Other Nonbanking
Banc One Corporation, Columbus, Ohio ("Banc
One"), CoreStates Financial Corp, Philadelphia,
Pennsylvania ("CoreStates"), PNC Financial Corp,
Pittsburgh, Pennsylvania ("PNC"), and Society Corporation, Cleveland, Ohio ("Society") (collectively,
"Applicants"), bank holding companies within the
meaning of the Bank Holding Company Act ("BHC
Act"), have applied for the Board's approval under
section 4(c)(8) of the BHC Act (12 U.S.C.
§ 1843(c)(8)) and section 225.23(a) of the Board's
Regulation Y (12 C.F.R. 225.23(a)) to engage de novo,
through their joint venture corporation, Electronic
Payment Services, Inc., Wilmington, Delaware
("Company"), in certain nonbanking activities, including data processing and data transmission activities pursuant to section 225.25(b)(7) of Regulation Y.
Applicants currently provide data processing and
transmission services through Company to retail merchants using point-of-sale ("POS") terminals and to
banks who are members of Company's automated
teller machine ("ATM") network. 1 Applicants now
propose to offer through Company certain data processing and transmission services and electronic payment services that have not previously been consid-
1. On November 30, 1992, acting pursuant to delegated authority,
the Federal Reserve Banks of Cleveland and Philadelphia approved a
proposal by Applicants to form Company through the consolidation of
their respective ATM and POS networks.
Legal Developments
ered by the Board. In particular, Company proposes to
provide:
(1) Electronic Benefit Transfer Services. Data processing and transmission services required to permit
the delivery of governmental program benefits (such
as welfare payments and food stamps) through the
POS and ATM terminals of participating merchants
and banks ("Benefits services"). Under a Benefits
services system, a benefit recipient would be issued
a magnetically encoded card, similar to an ATM
card, which could be used to obtain access to a
government benefit account maintained on behalf of
the recipient.
(2) Stored Value Card Services. Data processing and
transmission services and electronic payment services related to stored value cards, which are cards
similar to credit or debit cards to which funds could
be credited through magnetic stripe or computer
chip technology. These services would be provided
in connection with both single- vendor stored value
card systems and multiple-vendor systems currently
in development.
(3) Electronic Data Interchange Services. The provision to retail merchants of data collected from
sales transactions processed at the merchants' POS
terminals ("Data services"). These data would relate to specific product purchases and customer
purchasing patterns, and could be used by the
merchants for inventory control, targeted marketing, and other purposes.
Applicants propose to engage in these activities
throughout the United States.
Notice of these applications, affording interested
persons an opportunity to submit comments, has been
published (57 Federal Register 44,571 (1992)). The
time for filing comments has expired, and the Board
has considered the applications and all comments
received in light of the factors set forth in section
4(c)(8) of the BHC Act.
Banc One, with $75.4 billion in,total consolidated
assets, is the eighth largest commercial banking organization in the United States, controlling $59.4 billion
in deposits. 2 Banc One operates subsidiary banks in
Ohio, Kentucky, Indiana, Michigan, Illinois, Wisconsin, Texas, Colorado, Arizona, California, Utah, and
West Virginia, and engages directly and through its
subsidiaries in a broad range of banking and permissible nonbanking activities.
CoreStates, with $23.6 billion in total consolidated
assets, is the 33d largest commercial banking organization in the United States, controlling $16.5 billion in
2. Asset and deposit data are as of June 30, 1993.
1159
deposits. CoreStates operates subsidiary banks in
Pennsylvania, New Jersey, and Delaware, and engages through its subsidiaries in a broad range of
banking and permissible nonbanking activities.
PNC, with $53.3 billion in total consolidated assets,
is the tenth largest commercial banking organization in
the United States, controlling $27.9 billion in deposits.
PNC operates subsidiary banks in Pennsylvania, Ohio,
Kentucky, Indiana, and Delaware, and engages directly and through its subsidiaries in a broad range of
banking and permissible nonbanking activities.
Society, with $26 billion in total consolidated assets,
is the 28th largest commercial banking organization in
the United States, controlling $16.6 billion in deposits.
Society operates subsidiary banks in Ohio, Indiana,
and Michigan, and engages directly and through its
subsidiaries in a broad range of banking and permissible nonbanking activities.
Closely Related to Banking Analysis
Section 4(c)(8) of the BHC Act provides that a bank
holding company may, with Board approval, engage in
any activity that the Board determines to be "so
closely related to banking or managing or controlling
banks as to be a proper incident thereto." An activity
may be deemed to be closely related to banking if it is
demonstrated that:
(1) Banks generally provide the proposed services;
or
(2) Banks generally provide services that are operationally or functionally so similar to the proposed
services as to equip them particularly well to provide the proposed services; or
(3) Banks generally provide services that are so
integrally related to the proposed services as to
require their provision in a specialized form. See
National Courier Association v. Board of Governors
of the Federal Reserve System, 516 F.2d 1229, 1237
(D.C. Cir. 1975).3
The Board has determined that certain data processing activities are closely related to banking and,
therefore, permissible for bank holding companies
under section 4(c)(8) of the BHC Act. Section
225.25(b)(7) of Regulation Y permits bank holding
companies to provide data processing and data transmission services, facilities, data bases, or access to
3. In addition, the Board may consider any other basis that may
demonstrate that the proposed activity has a reasonable or close
connection or relationship to banking or managing or controlling
banks. See Board Statement Regarding Regulation Y, 49 Federal
Register 806 (1984); Securities Industry Association
v. Board of
Governors of the Federal Reserve System, 468 U.S. 207, 210-11 n. 5
(1984).
1160
Federal Reserve Bulletin • December 1993
such services, facilities, or data bases by any technological means, so long as the data to be processed or
furnished are "financial, banking, or economic" in
nature. 4
Electronic Benefit Transfer Services. Under a Benefits services program, a benefit recipient would have
access to a benefit account maintained by a governmental agency or by the agency's transaction processor on behalf of the recipient. The account would
be credited by the agency or transaction processor
with the amount of benefits to which the recipient is
entitled, such as for welfare payments or food stamps.
The recipient would be issued a magnetic card, similar
to an ATM card, which could be used (i) at ATM
terminals to receive cash benefits from the account,
and (ii) at POS terminals to pay for food or other
in-kind entitlements, or to obtain cash benefits in the
account.
The proposed Benefits services would be provided
through Company's existing ATM and POS networks,
and, in general, the system would operate like existing
electronic fund transfer systems. As in the operation
of an ATM or POS network, Company's primary
activities would consist of processing and transmitting
access requests and payment authorizations entered
into the Benefits services system. In addition, Company may function as the transaction processor for one
or more governmental agencies. In this role, Company
would provide record maintenance and payment authorization services similar to those currently furnished to Company's financial institution customers. 5
These activities represent the electronic payment of
government benefits and are financial activities that
are operationally and functionally similar to the electronic payment and data processing services provided
by banks and bank holding companies in the operation
of ATM and POS networks. In particular, the proposed Benefits services involve the processing of
4. Regulation Y also requires that the services be provided pursuant
to a written agreement, and places certain limitations on the facilities
and hardware provided with the data processing services. See
of Data
Processing
12 C.F.R. 225.25(b)(7). See also Association
Service Organizations,
Inc. v. Board of Governors of the Federal
Reserve System, 745 F.2d 677 (D.C. Cir. 1984). Applicants have
represented that Company will provide the proposed services pursuant to a written agreement, and will provide facilities and hardware
within the limitations established by Regulation Y. The hardware to be
provided by Company consists of debit and credit access cards, the
ATM and POS terminals that will be used in delivering the proposed
services, and special terminals designed for use in a stored value card
system.
5. The eligibility of recipients of government benefits, and the
eligibility of items for purchase under the food stamp program and
other in-kind benefit programs, are currently decided by governmental
agencies, with individual merchants making determinations as to the
qualification of particular items at the point of sale. Company has
indicated that it does not propose at this time to furnish software for,
or provide other services relating to, any such determination of
eligibility.
access and authorization requests submitted to, and
electronic payments originating from, financial accounts on the same basis as transactions initiated with
traditional debit and credit cards. Based on the record,
the Board has concluded that the proposed Benefits
services constitute financial data processing and transmission activities, are closely related to banking, and
are permissible for bank holding companies under the
BHC Act.
Stored Value Card Services. Company proposes to
provide data processing and transmission services and
electronic payment services related to stored value
cards, which are cards similar to credit or debit cards
to which funds could be credited through magnetic
stripe or computer chip technology. Company's services would be provided in connection with both
"closed" and "open" stored value card systems.
"Closed systems" include both single-vendor stored
value card systems and systems designed for singlesite use, such as at a college or university. An "open
system", by contrast, refers to a multiple-vendor,
multiple-site stored value card system.
Closed Systems. Currently, open systems are in
developmental stages only, while closed systems are
in limited operation in the United States. In current
closed systems, in general, cash must be deposited in
a particular vendor's card-dispensing terminal, and the
card received from the terminal may be used only for
purchases from that specific vendor. The card itself is
disposable, and the only account reconciliation that
may be required would involve the vendor's own cash
receipts, the amount of funds debited from the cards at
turnstiles or other points of sale, and the amount of the
vendor's liabilities stored on outstanding cards. Company does not intend to play a role in the operation of
this basic type of closed system.
Company does propose to play a role in the development and operation of more complex closed systems. These systems would use a plastic card containing electronic technology such as a computer chip or
magnetic stripe to which funds could be credited, and
from which funds could be debited, for an indefinite
period of time. Company's primary activities would
include the performance of accounting functions in
such customer accounts, as well as the level of the
vendor's stored value liabilities. In this capacity, Company also would be responsible for settlement and
reconciliation of these customer and vendor accounts.
Company also would perform other functions, such as
embossing and issuing cards and arranging for funds
collection.
Closed systems also may be developed—for example, in a university setting—in which pre-paid accounts are maintained by the vendor or some central
party (in this example, the university) on behalf of a
Legal Developments
customer (in this case, a student or other member of
the university community). In such a system, value
could be placed on a stored value card either at a
cash-to-card machine or through a direct electronic
debit to one's pre-paid account. Such a direct debit
would be made at an ATM-type machine specially
adapted for that purpose ("value transfer machine").
Closed systems also may involve multiple vendors at a
single site. For example, in the university case, the
stored value cards could be used to pay charges at
locations such as student centers, cafeterias, bookstores, and copy machines. In each case, however,
Company's activities in connection with these more
complex closed systems would be essentially the same
as the accounting, settlement, and reconciliation functions and other activities described in the preceding
paragraph. In addition, Company may operate value
transfer machines used in these more complex closed
systems.
Open Systems. Applicants anticipate that stored
value cards eventually will operate in an open system
similar to a POS network, so that value stored on the
card could be used with a wide range of participating
vendors. Applicants expect that Company's principal
stored value card activities would involve the development and operation of such open systems.
In an open system, customers' debit cards would
hold an integrated computer chip or comparable technology capable of storing value for use in stored value
card transactions. Value could be placed on the card at
an ATM adapted to read and place value on the chip,
at a limited purpose ATM-type machine whose only
functions would be to add value to the chip and to
transfer stored value back to the customer's account,
or at a cash-to-card machine or other value transfer
device (collectively, "Value Terminals"). These
Value Terminals would be operated, in at least some
cases, by Company. Once value is placed on a card,
equivalent funds would be transferred to Company,
which would hold the funds for payment of stored
value card transactions. Stored value would leave the
chip when the customer purchases goods or services
either at a POS terminal (which may be operated by
Company) or at a vending machine, telephone booth,
mass transit turnstile, or other unmanned delivery
location (collectively, "Reader Terminals"), or when
the customer transfers funds back to an account at a
Value Terminal. Reader Terminals generally would be
off-line devices, not connected to Company's ATM or
POS networks. Instead of a direct electronic connection, a Reader Terminal would retain, for a period of
time, value representing the amount of customer purchases at the terminal. Then, at the vendor's convenience, Company, the vendor, or a third party would
collect value from the Reader Terminals using special
1161
ly-designed collection cards issued by Company. The
collection cards would then be submitted to Company
so that funds can be properly credited. Once these
transactions occur, Company would be responsible for
making settlement by transferring funds to the accounts of participating merchants and other appropriate parties.
Closely Related to Banking Analysis. The Board
believes that Company's activities in providing stored
value card services, in both closed and open systems,
are closely related to banking. These activities involve
processing debits and credits to the stored value cards,
and performing related accounting and settlement
functions. This aspect of the proposal is a data processing activity in which financial balances are maintained and adjusted at POS and other terminals as the
customer purchases various items, or adds value to the
card, and constitutes the processing of banking, financial, or economic data within the meaning of Regulation Y. In addition, aspects of Company's stored value
card services are functionally similar to the issuance
and sale of consumer payment instruments such as
travelers checks, which also are activities that banks
conduct and that the Board has previously determined
are closely related to banking within the meaning of
the BHC Act. 6 For these reasons, and based on the
record, the Board has concluded that Company's
proposed services in connection with stored value
cards, in either an open system or a closed system, are
closely related to banking.
Electronic Data Interchange Services. Company also
proposes to furnish retail merchants with data collected
from sales transactions consummated at the merchant's
place of business ("Data services"). 7 The data collected
and furnished would relate to specific items and quantities
of products purchased by the customer, as well as customer purchasing patterns over a period of time. The data
would be formatted so that it could be used by the
merchant for inventory control, targeted marketing, and
other purposes. Company's Data services generally
would be furnished to merchants as an adjunct to Company's POS transaction processing services, and would
be rendered through a retail merchant's POS terminals.
Company does not intend to offer Data services on an
independent basis. In addition, data collected by Company would be furnished only to the merchant that is party
to the underlying sales transaction: that is, Company does
not intend to provide such information to third parties.
6. See 12 C.F.R. 225.25(b)(12). See also Citicorp, 79 Federal
Reserve Bulletin 42 (1993).
7. Ordinarily, the sales transaction and the related payment would
be processed electronically through Company's POS network. However, Data services also could be furnished when cash payments are
tendered, through the use of a merchant proprietary card held by the
consumer.
1162
Federal Reserve Bulletin • December 1993
Company's Data services would be limited to capturing, formatting, and furnishing data collected from
sales transactions consummated at a particular merchant's place of business. In addition, the data collected would be furnished only to that merchant, and
only in accordance with the merchant's specific instructions. Company does not intend to provide software or render advice or provide other services associated with the marketing or other uses of the data. 8
Applicants do anticipate, however, that Company
could provide additional related functions, such as the
issuance at POS terminals of store coupons or credits
related to a merchant's marketing programs.
The Board believes that the sales data that would be
processed under the proposed Data services are financial
and economic data within the meaning of Regulation Y. In
1971, the Board determined that the processing of "banking, financial, or related economic data, such as performing payroll, accounts receivable or payable, or billing
services", was an activity closely related to banking and
therefore permissible for bank holding companies under
the BHC Act. In 1982, the regulatory standard was
expanded to include all types of economic data. This
includes the processing of microeconomic data, such as
data collected in the performance of accounts receivable
and payable functions and inventory and sales analyses.
On the basis of the record and these considerations, the
Board has concluded that Company's proposed Data
services, which involve the processing of financial and
sales data, are within the range of financial and economic
data processing activities contemplated by Regulation Y.
Other Enhanced ATM and POS Functions. Applicants
have stated that Company will place significant emphasis
on research relating to and the development and provision
of new and enhanced ATM and POS services. For this
reason, Applicants have requested authority for Company
to provide such new or enhanced services (in addition to
the activities discussed above) without further application, under a general authority to provide data processing
services pursuant to Regulation Y. The Board believes
that the enhanced functions that Applicants have specifically proposed, such as providing electronic access to
additional government benefit programs, and developing
the ability to cash checks, to allocate deposits, or to make
loan payments at an ATM, as well as bill paying services
and account maintenance functions such as check ordering, constitute the processing of banking, financial, or
economic data, and are permissible under the BHC Act. 9
8. In addition, Company will not furnish software that provides
broad-based marketing or demographic analysis.
9. Applicants have indicated that, in the future, Company may
develop other data processing and transmission services that are not
described in the applications, and are not discussed in this order.
Other
Considerations
In every case involving a nonbanking acquisition by a
bank holding company 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. 10 Based on all the facts of
record, the Board concludes that financial considerations
are consistent with approval of these applications. The
managerial resources of each of the Applicants also are
consistent with approval.
In order to approve these applications, the Board
also must find that the performance of the proposed
activities by Applicants through Company "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). The Board expects that the participation of Company in the market
for the proposed data processing and electronic payment services would increase the level of competition
among providers of those services. The Board also
anticipates that Company's proposed activities would
result in new products, improved service, greater
efficiencies, and increased convenience for consumers. In particular, the electronic delivery of government benefits offers opportunities for improving the
delivery service to recipients, maximizing the efficiency of operations at state agencies, and minimizing
costs for all parties. 11 The Board also notes that
services rendered in connection with stored value
cards would extend the benefits associated with electronic funds transfer systems to a greater range of
consumer transactions.
In addition, there is no evidence in the record that
consummation of the proposed activities would result
in any significantly adverse effects, such as undue
concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking
practices. 12 Accordingly, the Board has concluded
Applicants must consult with the Federal Reserve System before
commencing any new activity not described in this order to ensure
that the activity will satisfy the criteria set forth in the BHC Act and
Regulation Y, and to allow the Federal Reserve System an opportunity to consider whether a separate application should be reviewed in
any particular case.
10. 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).
11. Electronic Transfer of Government Benefits, 11 Federal Reserve
Bulletin 203 (1991).
12. In this regard, the Board notes that Applicants have committed
to provide to the Federal Reserve System data regarding the aggregate
balances being held by Company in connection with its stored value
card activities. The Board's approval is subject to compliance with
this commitment.
Legal Developments
that the balance of the public interest factors that it is
required to consider under section 4(c)(8) of the BHC
Act is favorable.
Based on all the facts of record, the Board has
determined that the applications should be, and hereby
are, approved. The Board's approval is specifically
conditioned on compliance with the commitments
made in connection with these applications and with
the conditions referred to in this order. The Board's
determination also is subject to all of the conditions set
forth in Regulation Y, including those in sections
225.4(d) and 225.23(b) of Regulation Y, and to the
Board's authority to require such modification or
termination of the activities of a bank holding company or any of its subsidiaries as the Board finds
necessary to ensure compliance with, and to prevent
evasion of, the provisions of the BHC Act and the
Board's regulations and orders issued thereunder. For
purposes of this action, these commitments and conditions are deemed to be conditions imposed in writing
by the Board in connection with its findings and
decision, and, as such, may be enforced in proceedings under applicable law.
This transaction shall not be consummated later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board, or by the Federal Reserve Bank of
Cleveland or the Federal Reserve Bank of Philadelphia, acting pursuant to delegated authority.
By order of the Board of Governors, effective
October 28, 1993.
Voting for this action: Chairman Greenspan and Governors
Angell, Kelley, LaWare, and Phillips. Absent and not voting:
Governors Mullins and Lindsey.
J E N N I F E R J . JOHNSON
Associate
Secretary of the Board
BankAmerica Corporation
San Francisco, California
Order Approving an Application to Engage in
Various Securities-Related
Activities
BankAmerica Corporation, San Francisco, California
("Applicant"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC
Act"), has applied under section 4(c)(8) of the BHC
Act (12 U.S.C. § 1843(c)(8)) and section 225.23 of the
In addition, the Board's approval is subject to the requirement that,
to the extent the proposed activities are subject to state or federal laws
relating to branching, deposit-taking and other matters, the activities
will be conducted in conformity with all such legal requirements.
1163
Board's Regulation Y (12 C.F.R. 225.23), to engage
de novo through its wholly owned subsidiary, BA
Securities, Inc., Seattle, Washington ("Company"),
in the following securities-related activities:
(1) Acting as agent in the private placement of all
types of securities, including providing related advisory services;
(2) Buying and selling all types of securities on the
order of investors as a "riskless principal"; and
(3) Providing securities brokerage and investment
advisory services, both separately and in combination. 1
Applicant would conduct the proposed activities
throughout the United States and the world. 2
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 35,003, 44,838 (1993)).
The time for filing comments has expired, and the
Board has considered the application and all comments received in light of the public interest factors set
forth in section 4(c)(8) of the BHC Act.
Applicant, with total consolidated assets of
$185.5 billion, is the second largest commercial bank-
1. In connection with this proposal, Applicant intends to transfer to
Company certain securities-related businesses and activities currently
being conducted by Applicant's lead bank, Bank of America National
Trust and Savings Association, San Francisco, California ("Bank").
In particular, Applicant proposes to transfer certain investment advisory and securities brokerage activities from Bank to Company.
Applicant also would transfer Bank's primary dealer activities to
Company.
Company also proposes to act as agent for Bank and other bank
affiliates with respect to loan syndications and securities brokerage
transactions in accordance with the servicing exemption of section
4(c)(1)(C) of the BHC Act and section 225.22(a) of the Board's
Regulation Y. See 12 U.S.C. § 1843(c)(1)(C); 12 C.F.R. 225.22(a).
Moreover, Company intends to enter into contracts with Bank,
whereby Bank would provide various legal, audit, premises and
equipment, bookkeeping, securities clearing, and other back office
support services. All inter-affiliate activities would be conducted in
accordance with sections 23A and 23B of the Federal Reserve Act,
and the conditions and limitations that the Board has imposed on bank
holding companies engaging in underwriting and dealing in bankineligible securities ("section 20 firewalls"). See 12 U.S.C. §§ 371c,
371c-l; Citicorp, et al„ 73 Federal Reserve Bulletin 473 (1987), ajfd
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).
Upon consummation of the proposal, Company also would act
under existing authority pursuant to sections 225.25(b)(1) and (b)(18)
of Regulation Y to make -and service loans and other extensions of
credit, and to act as a futures commission merchant ("FCM") in
executing and clearing exchange-traded financial contracts for Company's own account for hedging purposes. See 12 C.F.R. 225.25(b)(1),
(b)(18). Company would not act as an FCM for the accounts of
customers. Applicant has committed that Company will abide by the
Board's policy statement on trading derivatives for one's own account. See 12 C.F.R. 225.142.
2. Upon consummation of the proposal, Applicant intends to
transfer Company's principal place of business from Seattle, Washington, to San Francisco, California, and to establish branch offices in
Los Angeles, California; New York, New York; Atlanta, Georgia; and
Dallas, Texas.
1164
Federal Reserve Bulletin • December 1993
ing organization in the United States, and engages
directly and through subsidiaries in a broad range of
permissible nonbanking activities. 3 Company is engaged in limited bank-eligible and bank-ineligible securities underwriting and dealing activities permissible
under section 20 of the Glass-Steagall Act (12 U.S.C.
§ 377). 4 Company also is, and will continue to be, a
broker-dealer registered with the Securities and Exchange Commission ("SEC"), and a member of the
National Association of Securities Dealers, Inc.
("NASD"). Accordingly, Company is subject to the
recordkeeping, reporting, fiduciary standards, and
other requirements of the Securities Exchange Act of
1934 (15 U.S.C. § 78a et seq.), the SEC, and the
NASD.
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. Applicant has committed that Company
will not privately place registered securities, and will
only place securities with "institutional customers" as
that term is defined in section 225.2(g) of the Board's
Regulation Y (12 C.F.R. 225.2(g)).
"Riskless principal" is the term used in the securities business to refer to a transaction in which a
broker-dealer, after receiving an order to buy (or sell)
a security from a customer, purchases (or sells) the
security for its own account to offset a contemporaneous sale to (or purchase from) the customer. 6 "Riskless principal" transactions are understood in the
industry to include only transactions in the secondary
market. Thus, Applicant proposes that Company
would not act as a "riskless principal" in selling
securities at the order of a customer that is the issuer
of the securities to be sold, or in any transaction where
Company has a contractual agreement to place the
securities as agent of the issuer. Company also would
not act as a "riskless principal" in any transaction
involving a security for which it makes a market.
The Board previously has determined by order that,
subject to prudential limitations that address the potential for conflicts of interests, unsound banking
practices, and other adverse effects, the proposed
private placement and riskless principal activities are
closely related to banking as to be a proper incident
thereto within the meaning of section 4(c)(8) of the
BHC Act. 7 The Board also previously has determined
that acting as agent in the private placement of securities, and purchasing and selling securities on the
order of investors as a "riskless principal", do not
constitute underwriting and dealing in securities for
purposes of section 20 of the Glass-Steagall Act
(12 U.S.C. § 377), and that revenue derived from such
activities is not subject to the 10 percent revenue
limitation on bank-ineligible securities underwriting
and dealing. 8 Applicant has committed that Company
will conduct its private placement and "riskless principal" activities using the same methods and procedures, and subject to the same prudential limitations
established by the Board in Bankers Trust and J.P.
Morgan,9 including the comprehensive framework of
3. Asset and ranking data are as of June 30, 1993. Applicant's
subsidiary banks operate approximately 2,300 branches in 11 states,
excluding those branches that Applicant has agreed to divest in
connection with its merger with Security Pacific Corporation. See
BankAmerica Corporation, 78 Federal Reserve Bulletin 338 (1992).
Applicant acquired Company (formerly Security Pacific Securities,
Inc.) through this merger.
4. Company may underwrite and deal in municipal revenue bonds,
1-4 family mortgage-related securities, commercial paper, and
consumer-receivable-related securities. See Security Pacific Corporation, 73 Federal Reserve Bulletin 622 (1987); Chemical New York
Corporation, et al., 73 Federal Reserve Bulletin 731 (1987).
5. See 12 C.F.R. 225.25(b)(4) and (15).
6. See Securities and Exchange Commission Rule 10b-10. 17 C.F.R.
240.10b-10(a)(8)(i).
7. See J.P. Morgan & Company Incorporated, 76 Federal Reserve
Bulletin 26 (1990) V'J.P. Morgan"); Bankers Trust New York Corporation, 75 Federal Reserve Bulletin 829 (1989) ("Bankers Trust").
8 .Id.
9. Among the prudential limitations detailed more fully in Bankers
Trust and J.P. Morgan 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 only engage in transactions in the
secondary market, and not at the order of a customer that is the issuer
of the securities to be sold; will not act as "riskless principal" in any
Securities Brokerage and Investment
Activities
Advisory
The Board has previously determined by regulation
that the provision of securities brokerage and investment advisory services, either separately or in combination, are activities closely related to banking under
section 4(c)(8) of the BHC Act. 5 Applicant has committed that Company will engage in the proposed
securities brokerage and investment advisory activities in accordance with all the conditions and limitations placed on those activities as set forth in Regulation Y.
Private Placement
Activities
and "Riskless
Principal"
Legal Developments
restrictions designed to avoid potential conflicts of
interests, unsound banking practices, or other adverse
effects imposed by the Board in connection with
underwriting and dealing in securities. 10
Cross-Marketing
Activities
As part of this application, Applicant proposes to act,
through a wholly owned broker-dealer subsidiary of
Bank, BA Investment Services, Inc. ("BAIS"), as a
riskless principal or broker for customers in buying
and selling bank-eligible securities that Company underwrites or deals in. Applicant contends that this
activity is consistent with the section 20 firewall
("cross-marketing firewall") that prohibits bank and
thrift affiliates of a section 20 company from acting as
an agent for, or engaging in marketing activities on
behalf of, the underwriting company. Applicant proposes to have a broker-dealer subsidiary of its lead
bank cross-market only those securities that the bank
itself could underwrite or deal in, i.e., bank-eligible
securities.
One of the principal purposes of the section 20
firewalls is to ensure that the bank-ineligible securities
activities of a bank holding company are conducted in
a corporation over which affiliated banks have no
ownership, or financial or managerial control. Applicant has committed that Company would remain separately incorporated, capitalized, and funded, and
would be operationally distinct from its bank affiliates.
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 its foreign affiliates that
engage in securities dealing activities outside the United States and
will not act as "riskless principal" for registered investment company
securities. In addition, Company will not act as a "riskless principal"
with respect to any securities of investment companies that are
advised by Applicant or any of its affiliates. With regard to private
placement activities, Applicant has committed that Company will not
privately place registered investment company securities or securities
of investment companies that are advised by Applicant or any of its
affiliates.
10. In previous orders approving riskless principal activities, the
Board has relied on commitments by bank holding companies to
refrain from entering quotes for specific securities in the NASDAQ or
any other dealer quotation system in connection with riskless principal transactions. Bankers Trust, at 832. Applicant proposes that
Company, in acting as a riskless principal, may:
(i) enter bid or ask quotations; or
(ii) publish "offering wanted" or "bid wanted" notices on trading
systems other than an exchange or the NASDAQ.
In order to ensure that Company would not hold itself out as a market
maker with respect to securities for which it acts as riskless principal,
Applicant has committed that Company would not enter price quotations on different sides of the market for a particular security for two
business days. In other words, Company would not enter an "ask"
quote for two business days after entering a "bid" quote with respect
to the same security, and vice versa. The Board previously has
determined that these activities do not constitute underwriting and
dealing in securities for purposes of the Glass-Steagall Act. Dauphin
Deposit Corporation, 77 Federal Reserve Bulletin 672 (1991).
1165
There would be no employees in common between
Company and any of its bank affiliates or their subsidiaries. In addition, Company's arrangement to sell
bank-eligible securities through Bank or Bank's
broker-dealer subsidiary would not be an exclusive
arrangement; thus, Company also would sell its bankeligible securities both directly and through other
brokers, and Bank and its broker-dealer subsidiary
would sell bank-eligible securities underwritten or
dealt in by other broker-dealers. Moreover, Applicant
has committed that Company's role in underwriting or
dealing in the securities that are being brokered by its
national bank subsidiary will be fully disclosed to the
bank's brokerage customers, and that Company's brokerage transactions in such securities will be conducted on an arm's length basis. Based on the foregoing and all the facts of record, the Board has
determined that BAIS may act as a riskless principal
or broker for customers in buying and selling bankeligible securities that Company underwrites or deals
in. 11
Financial Factors, Managerial Resources,
Considerations
and Other
In order to approve this application, the Board is
required to determine that the performance of the
proposed activities by Applicant can reasonably be
expected to produce public benefits that outweigh
adverse effects under the proper incident to banking
standard of section 4(c)(8) of the BHC Act. In this
regard, 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 proposed transaction on these resources. 1 2 Based on the facts of this case, the Board
concludes that the financial considerations are consistent with approval of this application. The managerial
resources of Applicant also are consistent with approval.
Under the framework established in this and prior
Board decisions, consummation of this proposal is not
likely to result in any significantly adverse effects,
such as an undue concentration of resources, decreased or unfair competition, conflicts of interests, or
unsound banking practices. Moreover, the Board ex-
11. In 1990, the Board sought public comment on a proposal to
modify or remove the cross-marketing restriction as it applied to all
activities of a section 20 affiliate, including bank-ineligible underwriting activities. 55 Federal Register 28,295 (1990). Applicant's proposal
is narrower in scope than the Board's 1990 proposal, and would apply
only to bank-eligible securities. The Board notes that no comments
were received in opposition to Applicant's limited proposal, and one
comment was submitted in favor of the proposal.
12. 12 C.F.R. 225.24.
1166
Federal Reserve Bulletin • December 1993
pects that the de novo entry of Applicant into the
market for the proposed services in the United States
would provide added convenience to Applicant's customers, and would increase the level of competition
among existing providers of these services. Accordingly, the Board has determined that the performance
of the proposed activities by Applicant can reasonably
be expected to produce public benefits that would
outweigh possible adverse effects under the proper
incident to banking standard of section 4(c)(8) of the
BHC Act.
sider Applicant's proposal regarding the cross-marketing firewall. The proposal by Applicant raises issues
that, in my opinion, would be more appropriate for the
Board to consider in the context of a rulemaking. I,
therefore, would reserve judgment on this aspect of
the application.
October 18, 1993
Based on the foregoing and all the facts of record,
the Board has determined to, and hereby does, approve the application subject to all of the terms and
conditions set forth in this Order, and in the above
noted Board orders that relate to these activities. The
Board's determination is also subject to all the terms
and conditions set forth in Regulation Y, including
those in sections 225.4(d) and 225.23(b), and to the
Board's authority to require modification or termination of the activities of a bank holding company or any
of its subsidiaries as the Board finds necessary to
assure compliance with, and to prevent evasion of, the
provisions of the BHC Act, and the Board's regulations and orders issued thereunder. The Board's decision is specifically conditioned on compliance with all
the commitments made in connection with this application, including the commitments discussed in this
Order and the conditions set forth in the above noted
Board regulations and orders. These commitments and
conditions shall be deemed to be conditions imposed
in writing by the Board in connection with its findings
and decisions, and, as such, may be enforced in
proceedings under applicable law.
Order Approving an Application
"Riskless Principal"
Activities
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 San
Francisco, pursuant to delegated authority.
By order of the Board of Governors, effective
October 18, 1993.
Voting for this action: Chairman Greenspan and Governors
Angell, Kelley, LaWare, Lindsey, and Phillips. Absent and
not voting: Governor Mullins.
JENNIFER J. JOHNSON
Associate
Secretary of the Board
Irwin Financial Corporation
Columbus, Indiana
Irwin Financial Corporation, Columbus, Indiana
("Applicant"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC
Act"), has applied 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 through its subsidiary, Irwin Union Securities, Inc., Columbus, Indiana ("Company"), in buying
and selling all types of securities on the order of
investors as a "riskless principal."
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 41,091 (1993)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the public interest factors set forth in
section 4(c)(8) of the BHC Act.
Applicant, with total consolidated assets of approximately $693 million, is the 16th largest commercial
banking organization in Indiana, controlling approximately 1 percent of deposits in commercial banking
organizations in the state. 1 Applicant controls one
bank subsidiary in Indiana, and engages directly and
through subsidiaries in a broad range of permissible
nonbanking activities.
Company is registered with the Securities and Exchange Commission ("SEC"), and is a member of the
National Association of Securities Dealers, Inc.
("NASD"). Accordingly, Company is subject to the
recordkeeping, reporting, fiduciary standards, and
other requirements of the Securities Exchange Act of
1934 (15 U.S.C. § 78a et seq.), the SEC, and the
NASD.
"Riskless Principal"
Concurring Statement
of Governor
Activities
Angell
I would approve Applicant's proposal to engage in
private placement, riskless principal and other securities activities. However, I do not believe that this
application is a proper context for the Board to con-
to Engage in
"Riskless principal" is the term used in the securities
business to refer to a transaction in which a broker-
1. Asset, deposit, and ranking data are as of June 30, 1993.
Legal Developments
dealer, after receiving an order to buy (or sell) a
security from a customer, purchases (or sells) the
security for its own account to offset a contemporaneous sale to (or purchase from) the customer. 2 "Riskless principal" transactions are understood in the
industry to include only transactions in the secondary
market. Thus, Applicant proposes that Company
would not act as a "riskless principal" in selling
securities at the order of a customer that is the issuer
of the securities to be sold, or in any transaction where
Company has a contractual agreement to place the
securities as agent of the issuer. Company also would
not act as a "riskless principal" in any transaction
involving a security for which it makes a market.
The Board previously has determined by order that,
subject to prudential limitations that address the potential for conflicts of interests, unsound banking
practices, and other adverse effects, the proposed
riskless principal activities are so closely related to
banking as to be a proper incident thereto within the
meaning of section 4(c)(8) of the BHC Act. 3 The Board
also has previously determined that purchasing and
selling securities on the order of investors as a "riskless principal" does not constitute underwriting and
dealing in securities for purposes of section 20 of the
Glass-Steagall Act (12 U.S.C. § 377), and that revenue derived from such activities is not subject to the
10 percent revenue limitation on bank-ineligible securities underwriting and dealing. 4 Applicant has committed that Company will conduct its "riskless principal" 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, 5 including the comprehensive framework of restrictions designed to avoid potential conflicts of interests, unsound banking practices, or other
2. See Securities and Exchange Commission Rule 10b-10. 17 C.F.R.
240.10b-10(a)(8)(i).
3. See J.P. Morgan & Company Incorporated, 76 Federal Reserve
Bulletin 26 (1990) V'J.P. Morgan"); Bankers Trust New York Corporation, 75 Federal Reserve Bulletin 829 (1989) ("Bankers Trust").
4. Id.
5. Among the prudential limitations detailed more fully in Bankers
Trust and J.P. Morgan 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 only engage in transactions in the
secondary market, and not at the order of a customer that is the issuer
of the securities to be sold; will not act as "riskless principal" in any
transaction involving a security for which it makes a market; 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 its foreign affiliates that
engage in securities dealing activities outside the United States and
will not act as "riskless principal" for registered investment company
securities. In addition, Company will not act as a "riskless principal"
with respect to any securities of investment companies that are
advised by Applicant or any of its affiliates.
1167
adverse effects imposed by the Board in connection
with underwriting and dealing in securities.
Financial Factors, Managerial Resources,
Considerations
and Other
In order to approve this application, the Board is
required to determine that the performance of the
proposed activities by Applicant can reasonably be
expected to produce public benefits that outweigh
adverse effects under the proper incident to banking
standard of section 4(c)(8) of the BHC Act. In this
regard, 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 proposed transaction on these resources. 6
Based on the facts of this case, the Board concludes
that the financial considerations are consistent with
approval of this application. The managerial resources
of Applicant also are consistent with approval.
Under the framework established in this and prior
Board decisions, consummation of this proposal is not
likely to result in any significantly adverse effects,
such as an undue concentration of resources, decreased or unfair competition, conflicts of interests, or
unsound banking practices. Moreover, the Board expects that the de novo entry of Applicant into the
market for the proposed "riskless principal" services
in the United States would provide added convenience
to Applicant's customers, and would increase the level
of competition among existing providers of these services. Accordingly, the Board has determined that the
performance of the proposed activities by Applicant
could reasonably be expected to produce public benefits that would outweigh possible adverse effects
under the proper incident to banking standard of
section 4(c)(8) of the BHC Act.
Based on the foregoing and all the facts of record,
the Board has determined to, and hereby does, approve the application subject to all the terms and
conditions set forth in this Order, and in the above
noted Board orders that relate to these activities. The
Board's determination is also subject to all the terms
and conditions set forth in Regulation Y, including
those in section 225.4(d) and 225.23(b), and to the
Board's authority to require modification or termination of the activities of a bank holding company or any
of its subsidiaries as the Board finds necessary to
ensure compliance with, and to prevent evasion of, the
provision 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
6. 12 C.F.R. 225.24.
1168
Federal Reserve Bulletin • December 1993
commitments made in connection with this application, including the commitments discussed in this
Order and the conditions set forth in the above noted
Board regulations and orders. These commitments and
conditions shall be deemed to be conditions imposed
in writing by the Board in connection with its findings
and decisions, and, as such, may be enforced in
proceedings under applicable law.
This transaction shall not be consummated later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of
Chicago, acting pursuant to delegated authority.
By order of the Board of Governors, effective
October 4, 1993.
Voting for this action: Chairman Greenspan and Governors
Mullins, Angell, Kelley, LaWare, and Phillips. Absent and
not voting: Governor Lindsey.
J E N N I F E R J. JOHNSON
Associate
Secretary of the Board
Orders Issued Under Sections 3 and 4 of the
Bank Holding Company Act
Banc One Corporation
Columbus, Ohio
Banc One Beta Corporation
Columbus, Ohio
Order Approving Merger of Bank Holding
Companies and Acquisition of Banks
Banc One Corporation and Banc One Beta Corporation, both of Columbus, Ohio (together "Banc One"),
bank holding companies within the meaning of the
Bank Holding Company Act ("BHC Act"), have
applied under sections 3 and 4 of the BHC Act
(12 U.S.C. §§ 1842 and 1843) to acquire FirsTier Financial, Inc., Omaha, Nebraska ("FirsTier"), and
thereby indirectly acquire Firstier Bank, N.A.,
Omaha; Firstier Bank, N . A . , Lincoln; Firstier Bank,
N . A . , Scottsbluff; and Firstier Bank, N.A., Norfolk,
all in Nebraska. 1 Banc One also has applied under
1. Banc One proposes to merge FirsTier and Banc One Beta
Corporation with FirsTier surviving the merger. The surviving corporation will be renamed Banc One Nebraska Corporation. In connection with the proposed acquisition, Banc One also seeks approval to
acquire an option to purchase up to 18 percent of the voting shares of
FirsTier, which option will become moot upon consummation of the
proposed acquisition.
section 4(c)(8) of the BHC Act (12 U.S.C. § 1843) to
acquire the nonbanking subsidiaries of FirsTier. 2
Notice of the applications, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 39,026 (1993)). The
time for filing comments has expired, and the Board
has considered the applications and all comments
received in light of the factors set forth in sections 3(c)
and 4(c)(8) of the BHC Act.
Banc One, with total deposits of approximately
$59.2 billion, controls banking subsidiaries in Ohio,
Indiana, Michigan, Wisconsin, Illinois, Colorado,
Kentucky, West Virginia, Texas, Arizona, Utah, California, and Oklahoma. 3 Banc One does not currently
control any banks in Nebraska. FirsTier is the second
largest commercial banking organization in Nebraska,
controlling deposits of $2.3 billion, representing
11.8 percent of the total deposits in commercial banks
in the state. Upon consummation of this proposal,
Banc One would become the second largest commercial bank in Nebraska, controlling 11.8 percent of the
total deposits in commercial banks in the state.
Banc One and FirsTier do not compete directly in
any relevant banking market. 4 Based on all the facts of
record, the Board concludes that Banc One's acquisition of FirsTier and its subsidiary banks would not
result in any significantly adverse effects on competition in any relevant banking market.
Douglas Amendment
Analysis
Section 3(d) of the BHC Act, the Douglas Amendment, prohibits the Board from approving an application by a bank holding to acquire control of any bank
located outside of the bank holding company's home
state, unless such acquisition is "specifically autho-
2. Banc One has applied to acquire the following FirsTier nonbanking subsidiaries:
(1) Firstier Mortgage Company, Omaha, Nebraska, and thereby
engage in mortgage banking activities pursuant to section
225.25(b)(1) of the Board's Regulation Y;
(2) Firstier Insurance, Inc., Omaha, Nebraska, and thereby engage
in the sale of credit-related insurance in connection with extensions
of credit by affiliated banks, pursuant to section 225.25(b)(8)(i) of
Regulation Y; and
(3) Wyoming Trust & Management Co., Gillette, Wyoming, and
thereby engage in providing trust and asset management services
pursuant to section 225.25(b)(3) of Regulation Y.
3. State deposit data are as of June 30, 1993, and include acquisitions approved by the Board as of that date. The Board recently has
approved an application by Banc One to acquire banks in Oklahoma.
See Banc One Corporation, 79 Federal Reserve Bulletin 1055 (1993)
("Central Banking Order").
4. The Board has carefully considered a comment maintaining that
this proposal could result in anti-competitive effects in Nebraska.
Because this proposal represents Banc One's initial entry into Nebraska, the proposed acquisition of FirsTier will not increase market
concentration or eliminate any existing competition in any relevant
banking market in Nebraska.
Legal Developments
rized by the statute laws of the State in which such
bank is located, by language to that effect and not
merely by implication." 5 For purposes of the Douglas
Amendment, the home state of Banc One is Ohio. 6
This proposal represents the initial entry of an Ohio
bank holding company into Nebraska. In considering
this proposal, the Board has analyzed the interstate
banking statutes of Ohio and Nebraska, and has concluded that Banc One is authorized under the laws of
Nebraska to acquire the subsidiary banks of FirsTier. 7
Accordingly, the Board's approval of this proposal is
not prohibited by the Douglas Amendment. Approval
of the proposed transaction is conditioned, however,
upon Banc One receiving the necessary approval from
the Nebraska Director of Banking and Finance.
acquisition based on the CRA performance of both
Banc One and FirsTier. 9 The Board also has received
comments from The Main Street Business Association
("MSBA") generally critical of Banc One's corporate
CRA program and its record of lending to individuals
in cities throughout Ohio. 10
The Board has carefully reviewed the CRA performance records of Banc One and its subsidiary banks,
the comments received and Banc One's responses to
those comments, as well as all other relevant facts of
record, in light of the CRA, the Board's regulations,
and the Statement of the Federal Financial Supervisory Agencies Regarding the Community Reinvestment Act ("Agency CRA Statement"). 11
Record of Performance
Convenience
and Needs
Under the CRA
Considerations
In acting upon an application to acquire a depository
institution under the BHC Act, the Board must consider the convenience and needs of the communities to
be served, and take into account the records of the
relevant depository institutions under the Community
Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA").
The CRA requires the federal financial supervisory
agencies to encourage financial institutions to help meet
the credit needs of the local communities in which they
operate consistent with the safe and sound operation of
such institutions. To accomplish this end, the CRA
requires the appropriate federal supervisory authority
to "assess the institution's record of meeting the credit
needs of its entire community, including low- and
moderate-income neighborhoods, consistent with the
safe and sound operation of such institution," and to
take that record into account in its evaluation of applications. 8
In connection with these applications, the Board has
received a number of comments from public officials,
small businesses, and local community groups in Nebraska, expressing their support for the proposed
5. 12 U.S.C. § 1842(d).
6. 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 Neb. Rev. Stat. § 8-902.02 (1991); Ohio Rev. Code. Ann.
1101.05. Nebraska's interstate banking statute permits an out-of-state
bank holding company to acquire a bank in Nebraska provided that
the applicant's home state authorizes the acquisition or control of
banks in that state by a Nebraska bank or bank holding company
under conditions no more restrictive than those imposed by the laws
of Nebraska as determined by the Nebraska Director of Banking and
Finance. The Nebraska Director of Banking and Finance has indicated that the interstate statutes of Nebraska and Ohio are reciprocal,
and has preliminarily indicated that this proposal is permissible under
Nebraska banking law.
8. See 12 U.S.C. § 2903.
1169
The Board believes that in reviewing an application by
a bank holding company to acquire a bank under
section 3 of the BHC Act, the Board should look at the
entire record of performance of the applicant bank
holding company in meeting the convenience and
needs of the community, including the record of all its
subsidiary banks under the CRA. 12 In reviewing the
record of each institution under the CRA, the Agency
CRA Statement provides that a CRA examination is an
important and often controlling factor in the consideration of an institution's CRA record and that these
reports will be given great weight in the applications
process. 13 The record in this case indicates that all but
two of Banc One's 78 subsidiary banks have received
either "outstanding" or "satisfactory" ratings from
their primary regulators in their most recent examinations of their CRA performance, and that one of these
banks was assigned this rating prior to being acquired
by Banc One. 14 Additionally, Banc One's lead subsid-
9. The Board received comments from the Nebraska Community
Re-Investment Act Coalition ("Coalition") expressing concern about
Banc One's level of commitment to working with non-profit community groups in Nebraska. As a result of a meeting between Banc One
representatives and members of the Coalition, some members of the
Coalition have expressed their support for this proposal.
10. The Board also has received comments from the Coalition of
Neighborhoods alleging that Banc One and its subsidiary bank, Banc
One Cincinnati, N.A., Cincinnati, Ohio, generally have not met the
credit needs of minorities, women and low- and moderate-income
individuals in the Cincinnati area. These comments were considered
by the Board in connection with Banc One's acquisition of Central
Banking Group, Inc., Oklahoma City, Oklahoma. See Central Banking Order. Based on all the facts of record, and for the reasons
discussed in the Central Banking Order and in this Order, the Board
does not believe that these comments warrant denial of this proposal.
11. 54 Federal Register 13,742 (1989).
12. See, e.g., SunTrust Banks, Inc., 76 Federal Reserve Bulletin 542
(1990).
13. 54 Federal Register at 13,745 (1989).
14. The second rating of "needs to improve" was assigned to
Nicholas County Bank, Summersville, West Virginia ("Summersville
Bank"), at its most recent examination conducted by the Federal
1170
Federal Reserve Bulletin • December 1993
iary bank, Bank One Columbus, N.A., Columbus,
Ohio ("Bank One Columbus"), received an "outstanding" rating for CRA performance from the Office
of the Comptroller of the Currency ("OCC") in April
1993.15
A. CRA Performance of Banc One in
Inner-City Areas in Ohio
MSB A alleges that Banc One, along with its various
subsidiaries, has denied equal access to credit to
individuals residing in low- and moderate-income and
inner-city neighborhoods in Columbus, Cincinnati,
Cleveland, Mansfield, Youngstown, Dayton, Lima,
Akron, and Steubenville. The Board has carefully
reviewed the CRA performance record of Banc One's
subsidiary banks in Ohio in light of the allegations
made by the MSB A. In particular, the Board has
reviewed information relating to the CRA programs of
each of Banc One's subsidiary banks that service
communities the MSBA contends have been underserved by Banc One (the "Ohio Banks"), including
the most recent CRA examinations of each bank, and
information that each bank is required to file under the
Home Mortgage Disclosure Act ("HMDA").
The most recent examinations for CRA compliance
and performance of each of the Ohio Banks conducted
by each institution's primary regulator found no evidence of illegal discrimination or other illegal credit
practices. Examiners also found no evidence of any
practices or procedures which would discourage applications for available credit for any segment of the
delineated communities of the Ohio Banks. Moreover,
these examinations indicate that the geographic distribution of each institution's credit extensions, applications, and denials reflect reasonable penetration in all
segments of their delineated communities, including
low- and moderate-income areas. 16 The record also
Deposit Insurance Corporation ("FDIC") as of December 1991. The
Board also has considered information collected in the course of
certain ongoing examinations of subsidiary banks of Banc One.
15. All of FirsTier's subsidiary banks have received either "outstanding" or "satisfactory" ratings for CRA performance from the
OCC at their most recent examinations. FirsTier's lead subsidiary
bank, Firstier Bank, N.A., Omaha received an "outstanding" rating
from the OCC in December 1992; Firstier Bank, N . A . , Lincoln
received an "outstanding" rating from the OCC in December 1992;
Firstier Bank, N . A . , Scottsbluff received a "satisfactory" rating from
the OCC in September 1990; and Firstier Bank, N . A . , Norfolk
received an "outstanding" rating from the OCC in November 1988.
16. The most recent CRA examination of Bank One Cleveland,
N . A . , Cleveland, Ohio, noted weaknesses in the bank's geographic
distribution of housing-related lending throughout its entire delineated
community, particularly in low- and moderate-income census tracts.
Examiners indicated, however, that Bank One Cleveland is aware of
disparities that exist in the geographic distribution of its credit
extensions, and that Bank One Cleveland has taken certain steps to
improve its record of lending in low- and moderate-income areas.
indicates that Banc One's subsidiary banks have taken
steps to ensure that all loan applicants are handled in a
non-discriminatory manner.
Columbus. Banc One's lead subsidiary bank, Bank
One Columbus, participates in a variety of programs
designed to meet the credit needs of low- and
moderate-income and inner-city neighborhoods in
Columbus. For example, Bank One Columbus offers
direct and subsidized home-loan products through
both the Community Home Buyers Program and the
Ohio Housing Finance Agency First Time Homebuyers Program, in which Bank One Columbus extended
70 loans totalling $3.5 million from 1990-1992. Bank
One Columbus also participates in various government-sponsored loan programs. For the years 19901992, Bank One Columbus extended 209 FHA housing loans totalling $12.6 million, and 97 VA housing
loans totalling $6.7 million. Bank One Columbus also
participates in the Columbus Housing Partnership,
which has developed and financed over 550 homes
for low-income families. Furthermore, through its
Community Banking Group, Bank One Columbus
has extended approximately $674.5 million in local
consumer loans.
Bank One Columbus also addresses the needs of
local small businesses throughout the Columbus MSA.
In this regard, Bank One Columbus's Business Banking Group extended 1,709 commercial loans totalling
$171.6 million to local small businesses from 1991
through the first quarter of 1993. During this period,
Bank One Columbus also extended 1,627 small business loans totalling $61.5 million, $47 million of which
was generated by branches serving low- and moderateincome areas. The bank also participates in the Small
Business Administration's ("SBA") certified and preferred lender programs. Over the period 1990 through
1992, Bank One Columbus made 73 SBA loans totalling $8.7 million and, in partnership with another local
financial institution, produced start-up business loans
through an SBA loan program. Moreover, as part of
The City of Columbus Business Development Fund
and Neighborhood Revitalization Program, Bank One
Columbus extended eight loans for $617,000. Bank
One Columbus recently invested $23.5 million in local
bond issuances throughout its delineated community.
These investments provide financing for Columbus
urban development, local school districts, hospitals,
and for the State of Ohio's subsidized real estate
mortgage down-payment assistance program for firsttime homebuyers.
Cincinnati. Bank One Cincinnati, N.A. ("Bank One
Cincinnati"), has taken certain measures to increase
the availability of mortgage financing for low- and
moderate-income individuals, including hiring an officer specializing in affordable housing lending and
Legal Developments
developing the "Welcome Home" loan program. 17
This program is designed to facilitate home ownership
for low- and moderate-income individuals by reducing
down payment requirements and closing costs, eliminating mortgage guaranty insurance, and employing
flexible underwriting guidelines. As of June 30, 1993,
131 applications had been approved from low- and
moderate-income borrowers under this program, including 22 applications from African-American borrowers, for a total of approximately $7.8 million in
housing loans.
With respect to small business lending, Bank One
Cincinnati formed a Small Business Banking Division
in 1992 to promote lending to area firms with annual
sales of less than $2 million. During the first half of
1993, Bank One Cincinnati generated 71 applications
from low- and moderate-income neighborhoods, and
has made 30 of these loans. The bank also has introduced a revolving line of credit designed to meet the
needs of small business borrowers.
Mansfield. The most recent CRA examination of
Bank One Mansfield ("Bank One Mansfield"), conducted by the Federal Reserve Bank of Cleveland in
March 1992, indicates that the bank serves local community credit needs through various governmentguaranteed and internally-developed special loan programs. 18 From September 1990 through March 1992,
Bank One Mansfield extended $3.8 million through its
participation in the following loan programs: City of
Mansfield Revolving Loan Fund, FmHA loans, Ohio
Pooled Bond Program, Ohio energy action loans, small
business loans, student loans, FHA/VA loans, and
Withrow Linked Deposit Loans (loans designed to
stimulate small business development and job growth).
The examination also indicates that, in response to the
ascertained need for small business credit, Bank One
Mansfield has become active in creating credit opportunities for minority-owned small businesses within its
delineated community.
Youngstown. Bank One Youngstown, N.A. ("Bank
One Youngstown"), has introduced two new credit
products designed to service the credit needs of lowand moderate-income communities. 19 In October
1992, Bank One Youngstown introduced the "American Dream Program" which offers first mortgage loans
on more liberal credit terms to individuals with household incomes of less than $26,209 and who are purchasing houses with a maximum sales price of $40,000.
17. Banc One Cincinnati received a "satisfactory" rating for CRA
performance from the OCC in July 1993.
18. In this March 1992 examination, Bank One Mansfield received
an "outstanding" rating for CRA performance.
19. Banc One Youngstown received a "satisfactory" rating for
CRA performance from the OCC in April 1993.
1171
As of September 1993, 44 loans totalling $1.2 million
have been extended as part of this program.
In April 1993, Bank One Youngstown introduced
the Community Home Improvement Program
("CHIP") to provide home improvement financing to
low- and moderate-income individuals in its delineated
community. As of September 1, 1993, Bank One
Youngstown has extended seven loans totalling
$15,000 through this program. Bank One Youngstown
also participates in various lending programs sponsored by the State of Ohio, including the Withrow
Linked Deposit Program, the Ohio Energy Action
Loan Program, and the Ohio Mini-Loan Fund
(designed to provide an affordable financing alternative for low- and moderate-income individuals and
small businesses).
Dayton. Bank One Dayton, N.A. ("Bank One Dayton"), recently has developed several credit products
in response to ascertained community needs. 20 In
particular, Bank One Dayton provides credit for
affordable housing to low- and moderate-income individuals through its Sponsored Purchase Mortgage Program and through the extension of "Visionloans."
Bank One Dayton also recently has established the
Neighborhood Development Mortgage loan for firsttime homebuyers and the bank's Community Home
Buyer's Program features reduced down payment and
underwriting cost requirements for low- to moderateincome individuals.
Bank One Dayton is an active participant in the City
of Dayton Neighborhood Lending Program (designed
to make housing and home improvement loans available in low- and moderate-income neighborhoods),
Dayton's Home Purchase and Purchase-Rehab Program, and the Ohio Housing Finance Agency's Firsttime Homebuyer's Program, which offers belowmarket interest rates and reduced down payment
requirements. Bank One Dayton also extends
FHA/VA loans and is a certified SBA lender.
Lima. As part of its CRA program, Bank One Lima,
N.A. ("Bank One Lima"), has a formal program
designed to ascertain the credit needs of its delineated
community. 21 In this regard, Bank One Lima has
identified home improvement loans, purchase money
mortgages (especially for first-time home buyers), rehabilitation loans, and small business start-up and
working capital loans as some of the banking needs of
low- and moderate-income neighborhoods within its
delineated community.
20. Banc One Dayton received a "satisfactory" rating for CRA
performance from the OCC in June 1993.
21. Banc One Lima received an "outstanding" rating for CRA
performance from the OCC in March 1993.
1172
Federal Reserve Bulletin • December 1993
The most recent examination of its CRA performance indicates that, in response to these identified
needs, Bank One Lima has developed and marketed
several credit products. For example, the bank participates in the "Fix Up Lima Program," which provides
below-market interest rate loans for property improvement, and the Bank One Community Home Buyers
Program which provides special credit counselling and
low-money-down mortgages to low- and moderateincome individuals. The most recent CRA examination of Bank One Lima noted that the bank also has
appointed an officer to specialize and oversee the
bank's government loan program, including SBA, VA/
FHA, and FmHA loans.
Akron. The most recent CRA examination of Bank
One, Akron, N.A. ("Bank One Akron"), indicates
that the bank has a comprehensive program for ascertaining the credit needs of individuals within its delineated community. 22 In response to ascertained credit
needs, Bank One Akron established an affordable
housing lending department and developed the "OwnA-Home Program," an affordable housing loan product targeting low- and moderate-income individuals in
its delineated community. Through this program,
Bank One Akron extended 77 loans totalling $2.8 million in 1992.
Bank One Akron also extended 385 small business
loans totalling $31.9 million in 1992, and participates in
various government-sponsored loan programs such as
FHA/VA. In addition, Bank One Akron extends home
improvement loans through the Ohio Energy Action
Program, and extends credit to small businesses in
conjunction with the Akron Regional Development
Board.
Steubenville. In its most recent examination of Bank
One Steubenville, N.A. ("Bank One Steubenville"),
the OCC indicated that the bank's efforts to ascertain
the credit needs of its community, including low- and
moderate-income areas, are "excellent." 23 Bank One
Steubenville performed an extensive analysis of local
demographic data and reviewed the results of professionally generated market research data to develop an
understanding of its local community. In addition, the
bank performed a geocoding analysis of loans extended. Although this analysis showed no exclusionary lending patterns within its delineated community,
Bank One Steubenville developed two residential real
estate loan products designed to address the needs of
low- to moderate-income neighborhoods.
22. Banc One Akron received a "satisfactory" rating for CRA
performance from the OCC in February 1993.
23. Banc One Steubenville received a "satisfactory" rating for CRA
performance from the OCC in May 1992.
B. CRA Performance of Bank One Cleveland
MSBA also alleges that the "needs to improve" rating
assigned by the OCC to Bank One Cleveland, N.A.,
Cleveland, Ohio ("Bank One Cleveland"), in April
1993, indicates that there are deficiencies in the corporate CRA program of Banc One that have contributed to weaknesses in the CRA programs of its subsidiary banks, and that the present applications should
be denied because of these alleged deficiencies. The
Board has, in several recent cases, reviewed in detail
the corporate CRA policies of Banc One and found
those policies to be satisfactory. 24 The Board notes
that these policies have contributed to at least a
satisfactory CRA evaluation at nearly all of Banc
One's subsidiary banks.
The Board also has recognized the CRA performance deficiencies at Bank One Cleveland, and considered Banc One's proposals to address those deficiencies. In approving Banc One's acquisition of
Valley National Corporation, Phoenix, Arizona ("Valley National"), the Board required Banc One to submit to the Board, when delivered to the OCC, a copy
of its plan to address the deficiencies in the CRA
program of Bank One Cleveland, and to submit periodic reports on the progress of this plan. 25 The Board
believes that progress has been shown since the Valley
National acquisition to improve Bank One Cleveland's
CRA performance. For example, Bank One Cleveland
has introduced several new loan products designed to
meet the credit needs of low- and moderate-income
communities including:
(1) A home mortgage product with low down payment requirements and flexible underwriting criteria;
(2) A mortgage loan product that will cover both
acquisition costs and rehabilitation costs;
(3) A secured home-improvement loan product; and
(4) A mortgage loan for one-to-eight unit rental
properties.
Bank One-Cleveland also has recruited a new CRA
Officer, who reports directly to the chief executive
officer and board of directors of the bank. This CRA
Officer will coordinate the efforts of an expanded CRA
staff, including regional CRA coordinators, a community lending officer, and a low- and moderate-income
market analyst. In addition, Bank One-Cleveland has
reorganized its CRA Management Committee to in-
24. See Banc One Corporation, 79 Federal Reserve Bulletin 524
("Valley National Order"); Banc One Corporation, 79 Federal Reserve Bulletin 872 (1993)("Colorado Western Order"); and Central
Banking Order.
25. See Valley National Order.
Legal Developments
1173
elude members of the bank's senior management. The
Board will continue to monitor the progress of this
bank in improving its CRA program, including reviewing progress reports when they are submitted. 26
The Board believes that it is important that Bank
One Cleveland improve its record of performance
under the CRA, especially in light of the relative size
of this institution and its presence in the communities
in which it operates. At the same time, the Board
believes that the CRA performance of Banc One must
be considered in light of the performance of the entire
organization, including the satisfactory CRA performance of the other subsidiary banks, representing
approximately 95 percent of the assets controlled by
Banc One. For these reasons, and based on all the
facts of record, including the steps already taken by
Bank One Cleveland, the Board believes that, overall,
the CRA performance record of Banc One is consistent with approval of this proposal. Based on a review
of the entire record, including information provided by
the MSB A and other commenters, Banc One's responses to these comments, and relevant reports of
examination, the Board believes that the convenience
and needs considerations, including the CRA performance records of Banc One, FirsTier, and their subsidiary banks, are consistent with approval of these
applications. 27
must consider under section 3 of the BHC Act, also
are consistent with approval.
Banc One also has applied, pursuant to section 4 of
the BHC Act, to acquire the nonbanking subsidiaries
of FirsTier that engage in mortgage banking activities, the sale of credit-related insurance in connection with extensions of credit by affiliated banks, and
trust and asset management services. As noted
above, the Board previously has determined that
these activities are permissible for bank holding
companies under section 4(c)(8) of the BHC Act and
the Board's Regulation Y, 2 8 and Banc One proposes
to conduct these activities in accordance with the
Board's regulations. The record in this case indicates
that there are numerous providers of these nonbanking services, and there is no evidence in the record to
indicate that consummation of this proposal is likely
to result in any significantly adverse effects, such as
undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound
banking practices that would outweigh the public
benefits of this proposal. Accordingly, the Board has
determined that the balance of public interest factors
it must consider under section 4(c)(8) of the BHC Act
is favorable and consistent with approval of Banc
One's application to acquire FirsTier's nonbanking
subsidiaries.
Other
Conclusion
Considerations
The financial and managerial resources and future
prospects of Banc One, FirsTier, and their respective
subsidiaries, and other supervisory factors the Board
26. The FDIC has indicated to the Board that it recently conducted
a limited review of Summersville Bank's CRA program and procedures, and believes that this bank has strengthened its CRA program
and has addressed concerns raised by examiners at the 1991 examination. See Central Banking Order at note 13. The Board will continue
to monitor the progress of Banc One in addressing the problems in the
CRA program of Summersville Bank.
27. Several comments received by the Board during the processing
period requested that the Board hold a public meeting or hearing on
these applications. The Board is not required under section 3(b) of the
BHC Act to hold a hearing on an application unless the appropriate
banking authority for the bank to be acquired makes a timely written
recommendation of denial of the application. In this case, the OCC has
not recommended denial of this proposal.
Generally, under the Board's rules, the Board may, in its discretion,
hold a public hearing or meeting on an application to clarify factual
issues related to the application, and to provide an opportunity for
testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The
Board has carefully considered this request. In the Board's view,
interested parties have had a sufficient opportunity to present written
submissions, and have submitted substantial written 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 in these applications, or
otherwise warranted in this case. Accordingly, the request for a public
meeting or hearing on these applications is hereby denied.
Based on the foregoing and other facts of record, the
Board has determined that the applications should be,
and hereby are, approved. The Board's approval is
expressly conditioned upon compliance with all the
commitments made by Banc One in connection with
these applications. 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 determinations as to the nonbanking activities
are subject to all of the conditions in the Board's
Regulation Y, including those in sections 225.4(d) and
225.23(b)(3) (12 C.F.R. 225.4(d) and 225.23(b)(3)), and
to the Board's authority to require such modification
or termination of the activities of a holding company or
any of its subsidiaries as the Board finds necessary to
assure compliance with, or to prevent evasions of, the
provisions and purposes of the BHC Act and the
Board's regulations and orders issued thereunder.
28. See 12 C.F.R. 225.25(b)(1),(8)(i) and (3).
1174
Federal Reserve Bulletin • December 1993
The acquisition of FirsTier's subsidiary banks
shall not be consummated before the thirtieth calendar day following the effective date of this Order, and
the acquisition of FirsTier's subsidiary banks and
nonbanking subsidiaries shall not be consummated
later than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of
Cleveland, acting pursuant to delegated authority.
By order of the Board of Governors, effective
October 12, 1993.
Voting for this action: Chairman Greenspan and Governors
Angell, La Ware, and Phillips. Absent and not voting: Governors Mullins, Kelley, and Lindsey.
J E N N I F E R J. JOHNSON
Associate
Secretary
of the Board
ACTIONS TAKEN UNDER THE FEDERAL DEPOSIT
INSURANCE CORPORATION IMPROVEMENT ACT
By the Board
SouthTrust Corporation
Birmingham, Alabama
Order Approving
a Savings Bank
the Acquisition
of Two Branches
of
SouthTrust Corporation, Birmingham,
Alabama
("SouthTrust"), and SouthTrust of Florida, Inc.,
Jacksonville, Florida (collectively, "Applicants"),
propose to acquire certain assets and assume certain
liabilities of the Fernandina Beach and St. Augustine,
Florida, branch offices of Anchor Savings Bank, FSB,
Hewlett, N e w York ("Anchor"), by merging these
offices with SouthTrust Bank of Jacksonville, N . A .
("SouthTrust-Jacksonville"), a wholly owned national
bank subsidiary of SouthTrust of Florida, Inc. Applicants have requested the Board's approval of this
transaction pursuant to section 5(d)(3) of the Federal
Deposit Insurance Act (12 U . S . C . § 1815(d)(3) ("FDI
Act")), as amended by the Federal Deposit Insurance
Corporation Improvement Act of 1991 (Pub. L. N o .
102-242, § 501, 105 Stat. 2236, 2388-2392 (1991)). Section 5(d)(3) of the FDI Act requires the Board to
review any proposed merger between a Savings Association Insurance Fund member and any Bank Insurance Fund ("BIF") member if the acquiring or resulting institution is a BIF insured subsidiary of a bank
holding company, and, in reviewing these proposals,
to follow the procedures and consider the factors
set forth in Section 18(c) of the FDI Act.
(12 U.S.C. § 1828(c)) (the "Bank Merger Act"). 1 The
proposed transaction is also subject to review under
the Bank Merger Act by the Office of the Comptroller
of the Currency ("OCC"), the primary banking regulator for SouthTrust-Jacksonville.
Notice of the application, 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)). Reports on the competitive effects of the merger were
requested from the United States Attorney General,
the OCC, and the Federal Deposit Insurance Corporation. The time for filing comments has expired, and
the Board has considered the application and all
comments received in light of the factors set forth in
the Bank Merger Act and section 5(d)(3) of the FDI
Act.
SouthTrust, with consolidated assets of approximately $13.7 billion, controls 41 subsidiary banks in
Alabama, Florida, Georgia, North Carolina, South
Carolina, and Tennessee. 2 SouthTrust is the fifth largest depository institution 3 in Florida, controlling total
deposits of $1.3 billion, representing approximately
1 percent of total deposits in depository institutions in
the state. 4 The Fernandina Beach and St. Augustine
branches of Anchor collectively control deposits of
$52.4 million, representing less than 1 percent of total
deposits in depository institutions in Florida. Upon
consummation of the proposed transaction, SouthTrust would remain the fifth largest depository institution in Florida, controlling deposits of $1.4 billion,
representing approximately 1 percent of total deposits
in depository institutions in the state.
SouthTrust proposes to acquire Anchor branches in
the St. Johns County banking market and the Jacksonville Area banking market. SouthTrust and Anchor
compete directly only in the Jacksonville Area banking
1. 12 U.S.C. § 1815(d)(3)(E). These factors include considerations
relating to competition, financial and managerial resources, future
prospects of the existing and proposed institutions, and the convenience and needs of the communities to be served. 12 U.S.C.
§ 1828(c).
2. Asset data are as of June 30, 1993.
3. In this context, depository institutions include commercial banks,
savings banks, and savings associations. State and market share data
before consummation are based on calculations in which the deposits
of thrift institutions are included at 50 percent. The Board previously
has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See WM
Bancorp, 76 Federal Reserve Bulletin 788 (1990); National City
Corporation 70 Federal Reserve Bulletin 743 (1984). Because the
deposits of the Fernandina Beach and St. Augustine branch offices of
Anchor will be transferred to a commercial bank under this proposal,
those deposits are included at 100 percent in the calculation of
pro forma state and market share. See Norwest Corporation, 78
Federal Reserve Bulletin 452 (1992); First Banks, Inc., 76 Federal
Reserve Bulletin 669, 670 n.9 (1990).
4. State deposit data are as of June 30, 1992.
Legal Developments
market. 5 SouthTrust is the fifth largest depository
institution in that market, controlling deposits of
$216 million, representing approximately 3 percent of
total deposits in depository institutions in the market
("market deposits"). 6 The Fernandina Beach branch
office of Anchor is one of four Anchor branch offices
located in the Jacksonville Area banking market. It
controls deposits of $25.1 million, representing less
than 1 percent of market deposits. Upon consummation of this proposal, SouthTrust would control
$241.1 million in deposits, representing approximately
3.4 percent of market deposits. Anchor would remain
as a competitor in the market; the post-merger Herfindahl-Hirschman Index ("HHI") for this market would
be 2536, and would not appreciably increase as a result
of this transaction. 7
Based on all the facts of record in this case, including the fact that the number of competitors would
remain unchanged and there would be no significant
increase in market concentration in the Jacksonville
Area banking market, the Board concludes that consummation of this proposal would not have a significantly adverse effect on competition or the concentration of banking resources in this market. The Board
also concludes that consummation of this proposal
would not have a significantly adverse effect on competition in any other relevant banking market.
Convenience
and Needs
Considerations
In analyzing the convenience and needs factor, the
Board has carefully considered comments submitted
to the Board by the Alabama Community Reinvestment Alliance, Birmingham, Alabama ("Protestant").
Protestant alleges that SouthTrust has not met the
convenience and needs of low- and moderate-income
African-American residents in Jefferson County and
Birmingham, Alabama.
In assessing the impact of this proposal on the convenience and needs of the communities to be served, the
5. The Jacksonville Area banking market is defined as Baker, Clay,
Duval, and Nassau Counties and Ponte Vedra in St. Johns County, all
located in Florida, and the city of Folkston in Charlton County,
Georgia.
6. Market deposit data are as of June 30, 1992.
7. 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. In such markets, the Justice Department is likely to challenge
a merger that increases the HHI by more than 50 points. The Justice
Department has informed the Board that a bank merger or acquisition
generally will not be challenged (in the absence of other factors
indicating anticompetitive effects) unless the post-merger HHI is at
least 1800 and the merger increases the HHI by more than 200 points.
The Justice Department has stated that the higher than normal HHI
thresholds for screening bank mergers for anticompetitive effects
implicitly recognize the competitive effect of limited-purpose lenders
and other non-depository financial institutions.
1175
Board also has considered the record of performance of
SouthTrust under the CRA and the programs that SouthTrust has in place to serve community needs.
A. CRA Examinations
All of SouthTrust's subsidiary banks that have been
evaluated for CRA performance have received "outstanding" or "satisfactory" ratings from their primary
regulators in their most recent examinations for CRA
performance. SouthTrust's lead subsidiary bank,
SouthTrust Bank of Alabama, N.A., Birmingham,
Alabama ("SouthTrust-Alabama"), which includes
Birmingham and Jefferson County in its delineated
service area, received an "outstanding" rating for
CRA performance from the OCC in October 1991.
This rating reflects an improvement from the "satisfactory" rating received from the OCC in July 1989. In
addition, SouthTrust-Jacksonville received a "satisfactory" rating from the OCC in October 1992.
B. HMDA Data and Lending Practices
The Board has carefully reviewed data filed by SouthTrust-Alabama and its wholly owned subsidiaries,
SouthTrust Mortgage Corporation ("STMC") and
SouthTrust Mobile Services ("SMS"), under the
Home Mortgage Disclosure Act (12 U.S.C. § 2801
et seq.) ("HMDA") for the years 1990 through 1992.
These data indicate some disparities in approvals and
denials of loan applications according to racial group
and income status in the Birmingham Metropolitan
Statistical Area ("MSA"). 8 Because all banks are
obligated to adopt and implement lending practices
that ensure not only safe and sound lending, but also
equal access to credit by creditworthy applicants
regardless of race, the Board is concerned when the
record of an institution indicates disparities in lending
to minority credit applicants. The Board recognizes,
however, that HMDA data alone provide only a limited measure of any given institution's lending in its
community. The Board also recognizes that HMDA
data have limitations that make the data an inadequate
basis, absent other information, for conclusively determining whether an institution has engaged in illegal
discrimination on the basis of race or ethnicity in
making lending decisions.
None of the recent CRA performance examinations
for SouthTrust-Alabama found any evidence of illegal
discrimination or illegal credit practices. In addition,
the OCC recently performed a targeted fair lending
review of STMC's residential mortgage lending and
8. The Birmingham MSA includes Jefferson County, Alabama.
1176
Federal Reserve Bulletin • December 1993
found no indication of violations of any fair lending
laws. The OCC examiners reviewed all denied conventional mortgage applications and 75 percent of denied
government-insured mortgage applications received
from minorities during a 12-month period, and compared them to a large sample of approved non-minority
mortgage applications received during the same period. The OCC found no evidence of disparate treatment based on race or ethnicity. SouthTrust-Alabama
and STMC have also instituted a secondary review
process, pursuant to which a committee reviews the
file of every mortgage application recommended for
denial to insure that the recommendation is appropriate. Furthermore, the 1991 CRA examination of
SouthTrust-Alabama indicated that the geographic distribution of the bank's credit extensions, applications,
and denials reflected a reasonable penetration of all
segments of the local community, including low- and
moderate-income tracts.
The Board notes that SouthTrust-Alabama and its
subsidiary, STMC, have undertaken a number of
steps to increase their lending activities in low- and
moderate-income and minority areas in the Birmingham MSA. SouthTrust-Alabama has developed marketing programs to address lending weaknesses in two
communities with heavy concentrations of minority
residents. The programs include advertising in news
publications and on radio stations that target the
minority population living in those communities. In
addition, SouthTrust-Alabama has developed a Blueprint Loan program that offers home purchase and
home improvement products designed to meet the
specific housing needs of low- and moderate-income
individuals. The home purchase product has low
downpayment requirements, and both the home purchase and home improvement products offer financing
of closing costs and flexible underwriting criteria. The
Blueprint Loan program was initiated in April 1993. As
of September 1, 1993, SouthTrust-Alabama has approved 18 home purchase loans totalling $725,899,
and 34 home improvement loans totalling $143,000.
SouthTrust-Alabama, through STMC, also offers residential loans with more flexible lending criteria under
the Birmingham Residential Mortgage Plan. 9 As of
August 31, 1993, STMC has closed 31 loans totalling
$1.3 million under this program. 10
9. The Birmingham Residential Mortgage Plan was initiated by eight
lenders in the Birmingham area who committed to provide a total of
$25 million in residential mortgage loans under favorable lending
criteria. Loans made under this program offer reduced closing costs,
minimum downpayments of 3 percent, and underwriting criteria
similar to FHA loan requirements.
10. STMC is also a provider of FHA and VA home mortgage loans
in Alabama. In 1992, STMC originated 237 FHA/VA loans totaling
$15.6 million.
In addition, SouthTrust-Alabama and STMC actively participate in projects that support community
development activities in providing housing for lowand moderate-income individuals. In this regard,
STMC has committed to provide $300,000 in first
mortgage financing at favorable interest rates for the
purchase by eligible low- and moderate-income families of housing units being developed by Rosedale
Community Development Corporation. The housing
units are located in a low-income area of Birmingham.
In addition, STMC has allocated $350,000 for residential first mortgage loans to be used in conjunction with
downpayment funding provided through the City of
Birmingham to the Smithfield Neighborhood, Incorporation.11 SouthTrust-Alabama made a $900,000 investment in connection with the rehabilitation of a 64-unit,
multifamily project located in a low-income area of the
City of Birmingham. Subsequent to that investment,
the SouthTrust Community Reinvestment Corporation, a corporation established by SouthTrust, made a
firm commitment of $1 million for the development of
a multifamily housing project located in another lowincome area of the City of Birmingham. As further
evidence of its support for the community, SouthTrust-Alabama joined with eight banks to form a
Community Development Corporation which provides
financial assistance to small businesses which are
considered "disadvantaged" under the City of Birmingham's Disadvantaged Business Enterprise Program. SouthTrust-Alabama has committed to provide
29.6 percent of the $1.5 million to be spent each year
under this program. Loans totalling $4.5 million have
been made under this program.
C. Other Aspects of CRA Performance
SouthTrust-Alabama has in place many of the elements of an effective CRA program. The board of
directors of SouthTrust-Alabama has approved a comprehensive CRA policy that outlines goals, objectives,
and levels of responsibility and accountability for
management and employees of the bank. STMC has
implemented a formal community outreach program
which includes seminars on the availability and use of
mortgage loan products. In addition, STMC has a
housing specialist who meets with nonprofit and neighborhood associations in an effort to create products
that meet the credit needs of low- and moderateincome communities.
For the foregoing reasons, and based on all the facts
of record in this case, including Protestant's comments
11. Loans under this program offer flexible underwriting criteria and
special financing terms.
Legal Developments
and SouthTrust's response to these comments, the
Board concludes that convenience and needs considerations, including the records of SouthTrust, SouthTrust-Alabama and SouthTrust-Jacksonville under the
CRA, are consistent with approval of this application.
Other
Considerations
The Board also concludes that the financial and managerial resources and future prospects of SouthTrustJacksonville are consistent with approval of this application. Moreover, the record in this case shows that:
(1) The transaction will not result in the transfer of
any federally insured depository institution's federal
deposit insurance from one federal deposit insurance fund to the other ;
(2) Applicants and SouthTrust-Jacksonville currently meet, and upon consummation of the proposed transaction will continue to meet, all applicable capital standards; and
(3) The proposed transaction would comply with the
interstate banking provisions of the Bank Holding
Company Act (the "BHC Act") (12 U.S.C.
§ 1842(d)) if Anchor were a state bank that SouthTrust was applying to acquire directly. See
12 U . S . C . § 1815(d)(3). 12
1177
Based on the foregoing and all other facts of
record, the Board has determined that this application should be, and hereby is, approved. This approval is subject to SouthTrust-Jacksonville obtaining the OCC's approval for the proposed transaction
under the Bank Merger Act. The Board's approval of
this application also is conditioned upon Applicants'
compliance with the commitments made in connection with this application. For purposes of this action, the commitments and conditions relied on in
reaching this decision are conditions imposed in
writing by the Board and, as such, may be enforced
in proceedings under applicable law. This approval is
limited to the proposal presented to the Board by the
Applicants, and may not be construed as applying to
any other transaction.
This transaction may not be consummated before
the thirtieth calendar day after the effective date of this
Order, or later than three months after the effective
date of this Order, unless such period is extended by
the Board or the Federal Reserve Bank of Atlanta,
acting pursuant to delegated authority.
By order of the Board of Governors, effective
October 12, 1993.
Voting for this action: Chairman Greenspan and Governors
Angell, LaWare and Phillips. Absent and not voting: Governors Mullins, Kelley and Lindsey.
12. The Board previously has determined that the interstate banking
statute of Florida permits an Alabama bank holding company to
Corporation,
acquire banking organizations in Florida (see SouthTrust
74 Federal Reserve Bulletin 56 (1988)). Thus, consummation of this
transaction is not barred by section 3(d) of the BHC Act (12 U.S.C.
§ 1842(d)).
ACTIONS TAKEN
1991
JENNIFER J. JOHNSON
Associate
Secretary
of the
Board
UNDER THE FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF
By the Secretary of the Board
Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of
Governors of the Federal Reserve System, Washington, D.C. 20551.
Bank Holding Company
Acquired
Thrift
Southern National Corporation,
Lumberton, North Carolina
First Savings Bank,
Greenville, South
Carolina
Southern National Corporation,
Lumberton, North Carolina
First Savings Bank, Inc.,
Hickory, North
Carolina
Davidson Savings Bank,
Inc.,
Lexington, North
Carolina
Acquiring
Bank(s)
Southern National
Bank of South
Carolina,
Columbia, South
Carolina
Southern National
Bank of North
Carolina,
Lumberton, North
Carolina
Approval
Date
October 28, 1993
October 28, 1993
1178
Federal Reserve Bulletin • December 1993
By the Director of the Division of Banking Supervision and Regulation and the General Counsel of
the Board
Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of
Governors of the Federal Reserve System, Washington, D.C. 20551.
Acquired
Thrift
Bank Holding Company
Blue Ridge Bank, Inc.,
Martinsburg, West Virginia
First Citizens Bancshares
Company,
Marion, Arkansas
APPLICATIONS APPROVED
Shenandoah Federal
Savings Association,
Martinsburg, West
Virginia
Federal Savings Bank,
Rogers, Arkansas
Acquiring
Bank(s)
City Holding
Company,
Charleston, West
Virginia
Citizens Bank,
Marion, Arkansas
UNDER BANK HOLDING COMPANY
Approval
Date
October 15, 1993
October 19, 1993
ACT
By the Secretary of the Board
Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon
request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551.
Section 3
Applicant(s)
First Security Corporation,
Salt Lake City, Utah
First United Bancshares, Inc.,
El Dorado, Arkansas
Southern National Corporation,
Lumberton, North Carolina
Bank(s)
First National Financial Corporation,
Albuquerque, N e w Mexico
Commerce Financial Corporation,
Alma, Arkansas
Regency Bancshares, Inc.,
Hickory, North Carolina
Effective
Date
October 4, 1993
October 25, 1993
October 28, 1993
Section 4
Applicant(s)
First Bank System, Inc.,
Minneapolis, Minnesota
Bank(s)
FBS Information Services Corporation,
St. Paul, Minnesota
Effective
October 14, 1993
Legal Developments
APPLICATIONS APPROVED
By Federal Reserve
UNDER BANK HOLDING COMPANY
1179
ACT
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)
Anchor Financial Corporation,
Myrtle Beach, South Carolina
Boatmen's Bancshares, Inc.,
St. Louis, Missouri
FAB Acquisition Company,
St. Louis, Missouri
CBT Corporation,
Paducah, Kentucky
Centura Banks, Inc.,
Rocky Mount, North Carolina
Commerce Bancshares, Inc.,
Kansas City, Missouri
CBI-Kansas, Inc.,
Kansas City, Missouri
Community Bancshares, Inc.,
Blountsville, Alabama
CSB Bancorp, Inc.,
Walsh, Colorado
FEO Investments, Inc.,
Hoskins, Nebraska
GP F I N A N C I A L CORP.,
Flushing, N e w York
Heritage Bancshares Group, Inc.
Minneapolis, Minnesota
Klein Bancorporation, Inc.,
Chaska, Minnesota
Reserve
Bank
Bank(s)
Topsail State Bank,
Hampstead, North
Carolina
First Amarillo
Bancorporation, Inc.,
Amarillo, Texas
Pennyrile Bancshares,
Inc.,
Hopkinsville, Kentucky
Canton Interim Bank,
Canton, North Carolina
Firstbank Investment Co.,
Inc.,
Lawrence, Kansas
City and County Bank of
McMinn County,
Athens, Tennessee
The Colorado State Bank
of Walsh,
Walsh, Colorado
Elkhorn Valley Bank,
Norfolk, Nebraska
The Green Point Savings
Bank,
Brooklyn, N e w York
Geiger Corporation,
Minneapolis, Minnesota
Heritage Bancshares,
Inc.,
Minneapolis, Minnesota
R.O.M. Financial
Services, Inc.,
Chanhassen, Minnesota
Effective
Date
Richmond
October 15, 1993
St. Louis
September 29, 1993
St. Louis
October 5, 1993
Richmond
September 29, 1993
Kansas City
October 8, 1993
Atlanta
October 13, 1993
Kansas City
October 15, 1993
Kansas City
October 15, 1993
N e w York
October 12, 1993
Chicago
October 8, 1993
Minneapolis
September 28, 1993
1180
Federal Reserve Bulletin • December 1993
Section 3—Continued
Applicant(s)
Mabrey Bancorporation, Inc.
Okmulgee, Oklahoma
MNB Bancshares, Inc.,
Malvern, Arkansas
National City Bancshares, Inc.,
Evansville, Indiana
Olney Bancshares, Inc.,
Olney, Texas
Olney Bancorp of Delaware,
Inc.,
Olney, Texas
PCM Acquisition Group, Inc.,
Deerfield, Florida
The Peoples BancTrust
Company, Inc.,
Selma, Alabama
The Poca Valley Bankshares,
Inc.,
Walton, West Virginia
Smithdown Investments,
Lake Forest, Illinois
Texas Financial Bancorporation,
Inc.,
Minneapolis, Minnesota
First Bancorp, Inc.,
Denton, Texas
First Delaware Bancorp, Inc.,
Dover, Delaware
Whitman Bancorporation, Inc.,
Colfax, Washington
Reserve
Bank
Bank(s)
Effective
Date
Mabrey Insurance
Agency, Inc.,
Okmulgee, Oklahoma
Haskell Bancorporation,
Inc.,
Haskell, Oklahoma
Weleetka Bancorporation,
Inc.,
Weleetka, Oklahoma
First Sheridan
Bancshares, Inc.,
Sheridan, Arkansas
Sure Financial
Corporation,
Washington, Indiana
Graham National Bank,
Graham, Texas
Kansas City
September 24, 1993
St. Louis
October 1, 1993
St. Louis
October 14, 1993
Dallas
September 28, 1993
Florida First International
Bank,
Hollywood, Florida
CeeBee Corporation,
Prattville, Alabama
Atlanta
October 8, 1993
Atlanta
October 20, 1993
The Poca Valley Bank,
Walton, West Virginia
Richmond
October 18, 1993
Hinsdale Bank & Trust
Company,
Hinsdale, Illinois
First National Bank of
Grapevine,
Grapevine, Texas
Chicago
September 24, 1993
Dallas
October 8, 1993
Bank of Whitman,
Colfax, Washington
San Francisco
October 15, 1993
Legal Developments
1181
Section 4
Applicant(s)
Central Bancshares of the South,
Inc.,
Birmingham, Alabama
Central Bancshares of the South,
Inc.,
Birmingham, Alabama
Huntington Bancshares,
Incorporated,
Columbus, Ohio
Huntington Bancshares, Indiana,
Inc.,
Columbus, Ohio
Lena Spitzer Limited
Partnership,
Streeter, North Dakota
The Magnolia State Corporation,
Bay Springs, Mississippi
Mid-America Bancorp.,
Louisville, Kentucky
The Peoples Holding Company,
Fort Walton Beach, Florida
PNC Bank Corp.,
Pittsburgh, Pennsylvania
Security Capital Corporation,
Batesville, Mississippi
Security Richland
Bancorporation,
Miles City, Montana
The Toronto-Dominion Bank,
Toronto, Canada
Nonbanking
Activity/Company
First Federal Savings
Bank of Northwest
Florida,
Fort Walton Beach,
Florida
The Peoples Holding
Company,
Fort Walton Beach,
Florida
Huntington Federal
Savings Bank of
Illinois,
Chicago, Illinois
Helmuth Spitzer
Insurance,
Streeter, North Dakota
Jones County Finance
Company,
Laurel, Mississippi
Mid-America Bank,
Federal Savings Bank,
Pewee Valley,
Kentucky
Liberty Interim, F.S.B.,
Fort Walton Beach,
Florida
Sears Savings Bank, FSB,
Glendale, California
to engage de novo in
making loans
FirstWest Insurance, Inc.,
Miles City, Montana
Toronto-Dominion Capital
Markets USA, Inc.,
New York, New York
Reserve
Bank
Effective
Date
Atlanta
October 13, 1993
Atlanta
October 13, 1993
Cleveland
October 15, 1993
Minneapolis
October 6, 1993
Atlanta
October 8, 1993
St. Louis
October 6, 1993
Atlanta
October 13, 1993
Cleveland
October 8, 1993
St. Louis
September 30, 1993
Minneapolis
October 15, 1993
New York
October 15, 1993
1182
Federal Reserve Bulletin • December 1993
APPLICATIONS
APPROVED
By Federal Reserve
UNDER BANK MERGER
ACT
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)
Canton Interim Bank,
Canton, North Carolina
Fourth Financial Corporation,
Wichita, Kansas
Triangle Bank and Trust
Company,
Raleigh, North Carolina
Reserve
Bank
Bank(s)
Centura Bank,
Rocky Mount, North
Carolina
Western National
Bancorporation, Inc.,
Tulsa, Oklahoma
N e w East Bank of
Greenville,
Greenville, North
Carolina
N e w East Bank of N e w
Bern,
Effective
Date
Richmond
September 29, 1993
Kansas City
October 8, 1993
Richmond
September 27, 1993
N e w Bern, North
Carolina
N e w East Bank of
Goldsboro,
Goldsboro, North
Carolina
N e w East Bank of the
Cape Fear,
Fayetteville, North
Carolina
N e w East Bank of the
Albemarle,
Elizabeth City, North
Carolina
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.
Scott v. Board of Governors, N o . 930905843CV (Dist.
Ct., Salt Lake County, Utah, filed October 8, 1993).
Action against Board and others for damages and
injunctive relief for alleged constitutional and statutory violations caused by issuance of Federal Reserve notes.
Richardson v. Board of Governors, et al., N o . 93-C
836A (D. Utah, filed August 30, 1993). Action
against Board and others for damages and injunctive
relief for alleged constitutional and statutory violations caused by issuance of Federal Reserve notes.
On September 20, 1993, the Board filed a motion to
dismiss.
Kubany v. Board of Governors, et al., N o . 93-1428
(D. D . C . , filed July 9, 1993). Action challenging
Board determination under the Freedom of Infor-
Legal Developments
mation Act. The Board's motion to dismiss was
filed on October 15, 1993.
Bennett v. Greenspan, N o . 93-1813 (D. D.C., filed
April 20, 1993). Employment discrimination action.
Amann v. Prudential Home Mortgage Co., et al., N o .
93-10320 W D (D. Massachusetts, filed February 12,
1993). Action for fraud and breach of contract
arising out of a home mortgage. On April 17, 1993,
the Board filed a motion to dismiss.
Adams v. Greenspan,
N o . 93-0167 (D. D.C., filed
January 27,1993). Action by former employee under
the Civil Rights Act of 1964 and the Rehabilitation
Act of 1973 concerning termination of employment.
Sisti v. Board of Governors, No. 93-0033 (D. D.C.,
filed January 6, 1993). Challenge to Board staff
interpretation with respect to margin accounts. The
Board's motion to dismiss was granted on May 13,
1993. On June 3,1993, the petitioner filed a notice of
appeal. Cross-motions for summary disposition
were filed on August 13, 1993.
U.S. Check v. Board of Governors, N o . 92-2892 (D.
D.C., filed December 30, 1992). Challenge to partial
denial of request for information under the Freedom
of Information Act.
CBC, Inc. v. Board of Governors, N o . 92-9572 (10th
Cir., filed December 2, 1992). Petition for review of
civil money penalty assessment against a bank holding company and three of its officers and directors
for failure to comply with reporting requirements.
Oral argument is scheduled for November 8, 1993.
DLG Financial Corporation v. Board of Governors,
N o . 392 Civ. 2086-G (N.D. Texas, filed October 9,
1992). Action to enjoin the Board and the Federal
Reserve Bank of Dallas from taking certain enforcement actions, and seeking money damages on a
variety of tort and contract theories. On October 9,
1992, the court denied plaintiffs' motion for a temporary restraining order. On March 30, 1993, the
court granted the Board's motion to dismiss as to it,
and also dismissed certain claims against the Reserve Bank. On April 29, the plaintiffs filed an
amended complaint. The Board's motion to dismiss
the amended complaint was filed on May 17.
Zemel v. Board of Governors, No. 92-1056 (D. D.C.,
filed May 4, 1992). Age Discrimination in Employment Act case. The parties' cross-motions for summary judgment are pending.
Board of Governors v. Ghaith R. Pharaon, N o . 91CIV-6250 (S.D. N e w York, filed September 17,
1991). Action to freeze assets of individual pending
administrative adjudication of civil money penalty
assessment by the Board. On September 17, 1991,
the court issued an order temporarily restraining the
transfer or disposition of the individual's assets.
1183
FINAL ENFORCEMENT ORDERS ISSUED BY THE
BOARD OF GOVERNORS
Florida First International Bank
Hollywood, Florida
The Federal Reserve Board announced on October 5,
1993, the issuance of a Prompt Corrective Action
Directive by Consent against Florida First International Bank, Hollywood, Florida.
Sentry Bancorp, Inc.
Edina, Minnesota
The Federal Reserve Board announced on October 4,
1993, the issuance of Orders of Assessment of a Civil
Money Penalty against Sentry Bancorp, Inc., Edina,
Minnesota, and Robert J. Ziton, an officer and director
of Sentry Bancorp, Inc..
United Mizrahi Bank, Ltd.
Tel Aviv, Israel
The Federal Reserve Board announced on October 1,
1993, the joint issuance with the Federal Deposit
Insurance Corporation and the Superintendent of
Banks of the State of California of a Cease and Desist
Order against the United Mizrahi Bank, Ltd., Tel
Aviv, Israel, and the United Mizrahi Bank's branch in
Los Angeles, California.
The Federal Reserve Board also issued an Order of
Assessment of a Civil Money Penalty against the
United Mizrahi Bank.
TERMINATION OF ENFORCEMENT
ACTIONS
The Federal Reserve Board announced on October 8,
1993, the termination of the following enforcement
actions:
Bank of Boston Corporation
Boston, Massachusetts
Written Agreement dated September 3, 1991, terminated October 7, 1993.
Buffalo Bank
Eleanor, West Virginia
Written Agreement dated January 31, 1991, terminated
June 28, 1993. Cease and Desist Order dated
August 12, 1992, terminated June 28, 1993.
1184
Federal Reserve Bulletin • December 1993
Credit and Commerce American Holdings, N.V.
Netherlands Antilles
Consent Order dated February 1, 1991, terminated
June 23, 1993.
First American Corporation
Washington, D.C.
First American Bankshares, Inc.
Washington, D.C.
Written Agreement dated September 10, 1991, terminated June 23, 1993.
First State Bank of Maple Park
Maple Park, Illinois
Bruce Madden
Joe A. Pruess
Cease and Desist Order dated December 19, 1990,
terminated July 23, 1993.
Multibank Financial Corp.
Dedham, Massachusetts
Written Agreement dated February 28, 1992, terminated September 27, 1993.
Paonia Financial Services, Inc.
Paonia, Colorado
George J. Murphy, Jr.
Written Agreement dated September 21, 1993, terminated June 21, 1993.
Presidential Holdings, Inc.
Bourbonnais, Illinois
Joseph A. Ferante
James E. Malecha
Anthony J. Unruh
Written Agreement dated November 25, 1993, terminated August 5, 1993.
Society for Savings Bancorp, Inc.
Hartford, Connecticut
Written Agreement dated January 24,1992, terminated
September 27, 1993.
South Texas Bancshares, Inc.
Beeville, Texas
Written Agreement dated May 20, 1991, terminated
October 1, 1993.
State Bank and Trust of Colorado Springs
Colorado Springs, Colora
Cease and Desist Order dated April 14, 1992, terminated August 5, 1993.
WRITTEN AGREEMENTS
RESERVE BANKS
APPROVED BY
FEDERAL
Banco Boliviano Americana, S.A.
La Paz, Boliva
The Federal Reserve Board announced on October 26,
1993, the execution of a Written Agreement among the
Federal Reserve Bank of Atlanta, the Office of the
Comptroller of the State of Florida, Banco Boliviano
Americana, S.A., La Paz, Boliva, and Banco Boliviano Americana's agency in Miami, Florida.
1
Financial and Business Statistics
CONTENTS
WEEKLY REPORTING COMMERCIAL BANKS
A3 Guide to Tabular Presentation
Assets and liabilities
A22 Large reporting banks
A24 Branches and agencies of foreign banks
Domestic Financial Statistics
MONEY STOCK AND BANK CREDIT
FINANCIAL MARKETS
A4
A25 Commercial paper and bankers dollar
acceptances outstanding
A25 Prime rate charged by banks on short-term
business loans
A26 Interest rates—money and capital markets
A27 Stock market—Selected statistics
A5
A6
A7
Reserves, money stock, liquid assets, and debt
measures
Reserves of depository institutions, Reserve Bank
credit
Reserves and borrowings—Depository
institutions
Selected borrowings in immediately available
funds—Large member banks
FEDERAL FINANCE
POLICY INSTRUMENTS
A8 Federal Reserve Bank interest rates
A9 Reserve requirements of depository institutions
A10 Federal Reserve open market transactions
FEDERAL RESERVE BANKS
A l l Condition and Federal Reserve note statements
A12 Maturity distribution of loan and security
holdings
A28
A29
A30
A30
Federal fiscal and financing operations
U.S. budget receipts and outlays
Federal debt subject to statutory limitation
Gross public debt of U.S. Treasury—Types
and ownership
A31 U.S. government securities
dealers—Transactions
A32 U.S. government securities dealers—Positions
and financing
A3 3 Federal and federally sponsored credit
agencies—Debt outstanding
MONETARY AND CREDIT AGGREGATES
A13 Aggregate reserves of depository institutions
and monetary base
A14 Money stock, liquid assets, and debt measures
A16 Deposit interest rates and amounts outstanding—
commercial and BIF-insured banks
A17 Bank debits and deposit turnover
A18 Loans and securities—All commercial banks
COMMERCIAL BANKING INSTITUTIONS
A19 Major nondeposit funds
A20 Assets and liabilities, Wednesday figures
SECURITIES MARKETS AND
CORPORATE FINANCE
A34 New security issues—Tax-exempt state and local
governments and corporations
A35 Open-end investment companies—Net sales
and assets
A35 Corporate profits and their distribution
A35 Nonfarm business expenditures on new
plant and equipment
A36 Domestic finance companies—Assets and
liabilities, and consumer, real estate, and business
credit
2
Federal Reserve Bulletin • December 1993
Domestic Financial Statistics—Continued
REAL ESTATE
A37 Mortgage markets
A3 8 Mortgage debt outstanding
CONSUMER INSTALLMENT CREDIT
A39 Total outstanding
A39 Terms
FLOW OF FUNDS
A40
A42
A43
A44
Funds raised in U.S. credit markets
Summary* of financial transactions
Summary of credit market debt outstanding
Summary of financial assets and liabilities
Domestic Nonfinancial Statistics
A54 U.S. reserve assets
A54 Foreign official assets held at Federal Reserve
Banks
A55 Foreign branches of U.S. banks—Balance
sheet data
A57 Selected U.S. liabilities to foreign official
institutions
REPORTED BY BANKS
IN THE UNITED STATES
A57
A58
A60
A61
Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A61 Banks' own claims on unaffiliated foreigners
A62 Claims on foreign countries—Combined
domestic offices and foreign branches
REPORTED BY NONBANKING BUSINESS
ENTERPRISES IN THE UNITED STATES
SELECTED MEASURES
A45 Nonfinancial business activity—Selected
measures
A45 Labor force, employment, and unemployment
A46 Output, capacity, and capacity utilization
A47 Industrial production—Indexes and gross value
A49 Housing and construction
A50 Consumer and producer prices
A51 Gross domestic product and income
A52 Personal income and saving
A63 Liabilities to unaffiliated foreigners
A64 Claims on unaffiliated foreigners
SECURITIES HOLDINGS AND TRANSACTIONS
A65 Foreign transactions in securities
A66 Marketable U.S. Treasury bonds and
notes—Foreign transactions
INTEREST AND EXCHANGE RATES
International Statistics
SUMMARY STATISTICS
A67 Discount rates of foreign central banks
A67 Foreign short-term interest rates
A68 Foreign exchange rates
A53 U.S. international transactions—Summary
A54 U.S. foreign trade
A69 Guide to Statistical Releases and
Special Tables
3
Guide to Tabular Presentation
SYMBOLS AND
c
e
n.a.
n.e.c.
P
r
*
0
ATS
BIF
CD
CMO
FFB
FHA
FHLBB
FHLMC
FmHA
FNMA
FSLIC
G-7
GENERAL
ABBREVIATIONS
Corrected
Estimated
Not available
Not elsewhere classified
Preliminary
Revised (Notation appears on column heading
when about half of the figures in that column
are changed.)
Amounts insignificant in terms of the last decimal
place shown in the table (for example, less than
500,000 when the smallest unit given is millions)
Calculated to be zero
Cell not applicable
Automatic transfer service
Bank insurance fund
Certificate of deposit
Collateralized mortgage obligation
Federal Financing Bank
Federal Housing Administration
Federal Home Loan Bank Board
Federal Home Loan Mortgage Corporation
Farmers Home Administration
Federal National Mortgage Association
Federal Savings and Loan Insurance Corporation
Group of Seven
G-10
GNMA
GDP
HUD
IMF
IO
IPCs
IRA
MMDA
NOW
OCD
OPEC
OTS
PO
REIT
REMIC
RP
RTC
SAIF
SCO
SDR
SIC
SMSA
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
Negotiable order of withdrawal
Other checkable deposit
Organization of Petroleum Exporting Countries
Office of Thrift Supervision
Principal only
Real estate investment trust
Real estate mortgage investment conduit
Repurchase agreement
Resolution Trust Corporation
Savings Association Insurance Fund
Securitized credit obligation
Special drawing right
Standard Industrial Classification
Standard metropolitan statistical area
Veterans Administration
INFORMATION
In many of the tables, components do not sum to totals because
of rounding.
Minus signs are used to indicate (1) a decrease, (2) a negative
figure, or (3) an outflow.
"U.S. government securities" may include guaranteed issues
of U.S. government agencies (the flow of funds figures also
include not fully guaranteed issues) as well as direct obligations of the Treasury. "State and local government" also includes municipalities, special districts, and other political
subdivisions.
A4
Domestic Financial Statistics • December 1993
1.10
RESERVES, MONEY STOCK, LIQUID ASSETS, A N D DEBT MEASURES
Percent annual rate of change, seasonally adjusted 1
1992
1993
1993
Monetary or credit aggregate
Q4
Q3
May r
June r
July
Aug.
Sept.
1
1
2
3
4
Reserves of depository
Total
Required
Nonborrowed
Monetary base 3
5
6
7
8
9
Concepts of money, liquid assets, and debt4
Ml
M2
M3
L
Debt
Nontransaction
10 In M2
11 In M3 only6
Q2r
Ql r
institutions
25.8
25.3
27.1
12.6
9.3
8.7
9.5
9.1
10.8
12.4
10.6
9.8
12.4
12.3
10.9
11.5
36.5
39.5
35.5
13.8
5.1
7.0
3.8
10.9
9.4
5.7
8.1
9.5
9.7
12.8
7.5
11.5
16.7
14.1
15.3
15.2
16.8r
2.6
-,4r
1.4r
4.3
6.5
-1.9
-3.8
-2.3
3.8
10.5
2.2
2.5
3.4
4.6
13.2
3.3
1.3
n.a.
n.a.
27.3
10.5
8.6
9.5
4.8
7.2
2.5
.0
.7
6.2
13.6
2.0r
-,7r
-.4
5.4
10.5
1.7
.8
1.6
5.3
14.0
4.3
3.7
n.a.
n.a.
-3.1?
-5.4
-13.8
-1.4
4.1
-1.1
-9.0
3.3
-1.6
.4
-13.0
-3.2 r
-15.2 r
-2.1
-4.4
-.1
.6
components
Time and savings deposits
Commercial banks
Savings, including MMDAs
Small time
Large time •
Thrift institutions
15 Savings, including MMDAs
16 Small time' .
17 Large time '
12.9
-17.2
-20.0 r
1.6
-7.9
-20.0
4.6
-7.9
.2
5.4
-10.5
-8.7
14.0
-10.1
3.5
6.4
-10.2
-12.1
.8
-12.0 r
-i9.r
6.9
-10.7
3.1
5.4
-7.8
-7.1
8.7
-23.T
-10.8 r
-.2
-18.6
-15.5
.8
-10.5
-10.1
2.9
-12.5
-7.2
9.3
-8.7
-16.6
2.8
-12.3
-9.3
2.2r
-14.91"
-3.8 r
1.7
-11.1
-9.4
1.4
-13.1
.0
Money market mutual funds
18 General purpose and broker-dealer
19 Institution-only
-4.2
-19.4
-10.2
-14.1
-.7
.5
-.6
-12.6
17.7
14.4
-.7
-27.8
-l.lr
-18.8
-5.7
-10.5
-6.8
5.0
7.6
2.5
10.4
2.5
n.a.
n.a.
10.2
2.8
12.2
4.1
7.4
4.7
9.1
4.0
12
13
14
Debt components4
20 Federal
21 Nonfederal
6.7r
3.5r
1. Unless otherwise noted, rates of change are calculated from average
amounts outstanding during preceding month or quarter.
2. Figures incorporate adjustments for discontinuities, or "breaks," associated with regulatory changes in reserve requirements. (See also table 1.20.)
3. The seasonally adjusted, break-adjusted monetary base consists of (1)
seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally
adjusted currency component of the money stock, plus (3) (for all quarterly
reporters on the "Report of Transaction Accounts, Other Deposits, and Vault
Cash" and for all weekly reporters whose vault cash exceeds their required
reserves) the seasonally adjusted, break-adjusted difference between current vault
cash and the amount applied to satisfy current reserve requirements.
4. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the
vaults of depository institutions, (2) travelers checks of nonbank issuers, (3)
demand deposits at all commercial banks other than those owed to depository
institutions, the U.S. government, and foreign banks and official institutions, less
cash items in the process of collection and Federal Reserve float, and (4) other
checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW)
and automatic transfer service (ATS) accounts at depository institutions, credit
union share draft accounts, and demand deposits at thrift institutions. Seasonally
adjusted Ml is computed by summing currency, travelers checks, demand
deposits, and OCDs, each seasonally adjusted separately.
M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements
(RPs) issued by all depository institutions and overnight Eurodollars issued to
U.S. residents by foreign branches of U.S. banks worldwide, (2) savings (including MMDAs) and small time deposits (time deposits—including retaQ RPs—in
amounts of less than $100,000), and (3) balances in both taxable and tax-exempt
general-purpose and broker-dealer money market funds. Excludes individual
retirement accounts (IRAs) and Keogh balances at depository institutions and
money market funds. Also excludes all balances held by U.S. commercial banks,
money market funds (general purpose and broker-dealer), foreign governments
and commercial banks, and the U.S. government. Seasonally adjusted M2 is
computed by adjusting its non-Mi component as a whole and then adding this
result to seasonally adjusted Ml.
M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of
$100,000 or more) issued by all depository institutions, (2) term Eurodollars held
by U.S. residents at foreign branches of U.S. banks worldwide and at all banking
offices in the United Kingdom and Canada, and (3) balances in both taxable and
n.a.
n.a.
tax-exempt, institution-only money market funds. Excludes amounts held by
depository institutions, the U.S. government, money market funds, and foreign
banks and official institutions. Also excluded is the estimated amount of overnight
RPs and Eurodollars held by institution-only money market funds. Seasonally
adjusted M3 is computed by adjusting its non-M2 component as a whole and then
adding this result to seasonally adjusted M2.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper, and bankers acceptances, net of money
market fund holdings of these assets. Seasonally adjusted L is computed by
summing U.S. savings bonds, short-term Treasury securities, commercial paper,
and bankers acceptances, each seasonally adjusted separately, and then adding
this result to M3.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. Data are derived from the Federal
Reserve Board's flow of funds accounts. Data on debt of domestic nonfinancial
sectors are monthly averages, derived by averaging adjacent month-end levels.
Growth rates for debt reflect adjustments for discontinuities over time in the levels
of debt presented in other tables.
5. Sum of (1) overnight RPs and Eurodollars, (2) money market fund balances
(general purpose and broker-dealer), (3) savings deposits (including MMDAs),
and (4) small time deposits.
6. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S.
residents, and (4) money market fund balances (institution-only), less (5) a
consolidation adjustment that represents the estimated amount of overnight RPs
and Eurodollars held by institution-only money market funds. This sum is
seasonally adjusted as a whole.
7. Small time deposits—including retail RPs—are those issued in amounts of
less than $100,000. All IRA and Keogh account balances at commercial banks and
thrift institutions are subtracted from small time deposits.
8. Large time deposits are those issued in amounts of $100,000 or more,
excluding those booked at international banking facilities.
9. Large time deposits at commercial banks less those held by money market
funds, depository institutions, U.S. government and foreign banks and official
institutions.
Money Stock and Bank Credit
1.11
A5
RESERVES OF DEPOSITORY INSTITUTIONS A N D RESERVE BANK CREDIT 1
Millions of dollars
Factor
July
Average of
daily figures
Average of daily figures for week ending on date indicated
1993
1993
Aug.
Sept.
Aug. 18
Aug. 25
Sept. 1
Sept. 8
Sept. 15
Sept. 22
Sept. 29
SUPPLYING RESERVE F U N D S
1 Reserve Bank credit outstanding
U.S. government securities
2
Bought outright—System account
3
Held under repurchase agreements . . .
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements . . .
6 Acceptances
Loans to depository institutions
Adjustment credit
7
8
Seasonal credit
9
Extended credit
10 Float
11 Other Federal Reserve assets
354,700r
356,229
363,813
357,156
354,833
357,696
360,756
361,001
366,623
366,653
313,725
3,235
314,668
4,033
320,040
4,891
314,821
4,540
315,522
2,948
316,136
4,729
319,765
2,442
320,041
2,832
320,653
6,567
320,456
7,284
5,011
278
0
4,936
207
0
4,835
539
0
4,964
237
0
4,947
158
0
4,839
231
0
4,839
236
0
4,839
416
0
4,839
671
0
4,824
570
0
16
211
0
490
31,734
119
235
0
434
31,597
273
236
0
369
32,631
32
236
0
493
31,832
7
247
0
343
30,661
111
245
0
262
31,143
632
224
0
671
31,947
4
227
0
341
32,301
126
234
0
428
33,104
22
259
0
-13
33,250
12 Gold stock
13 Special drawing rights certificate account .
14 Treasury currency outstanding
11,057
8,018
21,731
11,057
8,018
21,780
11,056
8,018
21,843
11,057
8,018
21,778
11,057
8,018
21,793
11,056
8,018
21,808
11,056
8,018
21,822
11,056
8,018
21,836
11,056
8,018
21,850
11,056
8,018
21,864
346,485
414
348,213
385
351,133
378
348,801
386
348,223
386
348,405
383
351,317
383
352,124
377
350,871
374
350,368
377
6,266
222
5,764
230
9,633
230
5,675
238
5,970
186
5,544
186
5,949
222
5,117
276
16,981
181
10,104
209
6,186
274
6,097
281
6,117
329
6,095
294
6,159
268
6,117
282
6,117
328
6,102
319
6,082
336
6,169
334
9,232
9,423
9,640
9,403
9,387
9,662
9,964
9,548
9,448
9,565
27,372
28,047
23,274
30,465
Sept. 8
Sept. 15
Sept. 22
Sept. 29
ABSORBING RESERVE FUNDS
15 Currency in circulation
16 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
17 Treasury
18 Foreign
19 Service-related balances and
adjustments
20 Other
21 Other Federal Reserve liabilities and
capital
22 Reserve balances with Federal
Reserve Banks'
26,691
26,428
27,269
27,116
25,119
Wednesday figures
End-of-month figures
July
27,998
Aug.
Sept.
Aug. 18
Aug. 25
Sept. 1
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
U.S. government securities
2
Bought outright—System account
Held under repurchase agreements . . .
3
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements . . .
6 Acceptances
Loans to depository institutions
7
Adjustment credit
8
Seasonal credit
9
Extended credit
10 Float
11 Other Federal Reserve assets
352,092
359,057
369,482
359,567
354,757
359,676
362,683
363,513
385,116
366,583
314,614
0
316,985
4,790
319,357
6,296
315,117
7,675
315,630
2,825
315,426
6,570
321,238
2,274
320,070
3,601
320,287
22,036
319,344
7,594
4,964
0
0
4,839
70
0
4,804
2,146
0
4,964
170
0
4,839
184
0
4,839
781
0
4,839
95
0
4,839
1,866
0
4,839
1,506
0
4,804
1,621
0
11
223
0
460
31,819
7
229
0
720
31,417
2,680
239
0
939
33,022
38
243
0
429
30,931
6
252
0
292
30,727
6
226
0
139
31,688
3
216
0
2,112
31,906
10
231
0
375
32,520
74
248
0
1,123
35,004
7
262
0
-441
33,392
12 Gold stock
13 Special drawing rights certificate account .
14 Treasury currency outstanding
11,057
8,018
21,748
11,057
8,018
21,808
11,057
8,018
21,878
11,057
8,018
21,778
11,057
8,018
21,793
11,056
8,018
21,808
11,056
8,018
21,822
11,056
8,018
21,836
11,056
8,018
21,850
11,057
8,018
21,864
346,113
386
349,169
383
351,536
384
348,732
387
348,112
383
349,695
384
352,336
378
351,738
373
350,651
376
350,856
384
5,818
284
7,975
187
17,289
501
6,650
221
6,202
201
4,659
194
4,116
191
5,974
444
26,895
211
11,438
294
6,076
232
6,117
272
6,107
306
6,095
261
6,159
280
6,117
335
6,117
338
6,102
353
6,082
333
6,169
348
10,164
9,687
9,256
9,240
9,837
9,420
9,306
9,383
9,400
25,673
24,624
28,818
25,048
29,337
30,683
30,133
32,111
28,631
ABSORBING RESERVE FUNDS
15 Currency in circulation
16 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
17 Treasury
18 Foreign
19 Service-related balances and
adjustments
20 Other
21 Other Federal Reserve liabilities and
capital
22 Reserve balances with Federal
Reserve Banks 3
9,349
r
24,658
1. For amounts of cash held as reserves, see table 1.12.
2. Includes securities loaned—fully guaranteed by U.S. government securities
pledged with Federal Reserve Banks—and excludes securities sold and scheduled
to be bought back under matched sale-purchase transactions.
3. Excludes required clearing balances and adjustments to compensate for
float,
A6
Domestic Financial Statistics • December 1993
1.12
RESERVES A N D BORROWINGS
Depository Institutions 1
Millions of dollars
Prorated monthly averages of biweekly averages
Reserve classification
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks 2
Total vault cash 3
Applied vault cash
Surplus vault cash
Total reserves 6
Required reserves
Excess reserve balances at Reserve Banks . . .
Total borrowings at Reserve Banks
Seasonal borrowings
Extended credit 9
1990
1991
1992
Dec.
Dec.
Dec.
Mar.
Apr.
May
June
July
Aug.
Sept.
30,237
31,789
28,884
2,905
59,120
57,456
1,664
326
76
23
26,659
32,510
28,872
3,638
55,532
54,553
979
192
38
1
25,368
34,535
31,172
3,364
56,540
55,385
1,155
124
18
1
24,383
33,293
29,912
3,381
54,296
53,083
1,213
91
26
0
26,975
32,721
29,567
3,154
56,541
55,445
1,096
73
41
0
25,968
33,462
30,133
3,329
56,101
55,104
996
121
84
0
26,462
34,106
30,776
3,330
57,238
56,328
911
181
142
0
26,562r
34,535
31,189
3,347
57,750
56,661
1,089
244
210
0
26,564
34,516
31,203
3,313
57,767
56,815
952
352
234
0
27,279
35,217
31,863
3,355
59,142
58,050
1,092
428
236
0
1993
Biweekly averages of daily figures for weeks ending on date indicated
1993
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks
Total vault cash
Applied vault cash4
Surplus vault cash 5
Total reserves 6
Required reserves
Excess reserve balances at Reserve Banks . . .
Total borrowings at Reserve Banks 8
Seasonal borrowings
Extended credit 9
June 9
June 23
July 7
July 21
Aug. 4
Aug. 18
Sept. 1
Sept. 15
Sept. 29
Oct. 13
26,543
33,685
30,391
3,294
56,933
56,109
824
118
101
0
26,352
34,237
30,897
3,341
57,248
56,477
772
158
145
0
26,579
34,385
31,032
3,354
57,610
56,311
1,299
311
190
0
27,489
34,026
30,772
3,255
58,261
57,294
967
220
211
0
25,251r
35,354
31,883
3,471r
57,133r
56,021
1,112
232
222
0
26,939
34,869
31,483
3,386
58,422
57,673
750
431
227
0
26,564
33,879
30,693
3,187
57,257
56,136
1,121
305
246
0
27,719
35,332
31,999
3,333
59,718
58,845
874
544
226
0
26,846
35,157
31,781
3,377
58,626
57,322
1,305
321
247
0
27,891
35,805
32,275
3,530
60,166
59,046
1,120
420
222
0
1. Data in this table also appear in the Board's H.3 (502) weekly statistical
release. For ordering address, see inside front cover.
2. Excludes required clearing balances and adjustments to compensate for float
and includes other off-balance-sheet " a s - o f adjustments.
3. Total "lagged" vault cash held by depository institutions subject to reserve
requirements. Dates refer to the maintenance periods during which the vault cash
can be used to satisfy reserve requirements. The maintenance period for weekly
reporters ends sixteen days after the lagged computation period during which the
vault cash is held. Before Nov. 25,1992, the maintenance period ended thirty days
after the lagged computation period.
4. All vault cash held during the lagged computation period by "bound"
institutions (that is, those whose required reserves exceed their vault cash) plus
the amount of vault cash applied during the maintenance period by "nonbound"
institutions (that is, those whose vault cash exceeds their required reserves) to
satisfy current reserve requirements.
5. Total vault cash (line 2) less applied vault cash (line 3).
6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash
(line 3).
7. Total reserves (line 5) less required reserves (line 6).
8. Also includes adjustment credit.
9. Consists of borrowing at the discount window under the terms and conditions established for the extended credit program to help depository institutions
deal with sustained liquidity pressures. Because there is not the same need to
repay such borrowing promptly as with traditional short-term adjustment credit,
the money market impact of extended credit is similar to that of nonborrowed
reserves.
Money Stock and Bank Credit
1.13
SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE F U N D S
A7
Large Banks 1
Millions of dollars, averages of daily figures
1993, week ending Monday
Source and maturity
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 federal
agency securities
Brokers and nonbank dealers in securities
For one day or under continuing contract
For all other maturities
All other customers
For one day or under continuing contract
For all other maturities
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 2
Aug. 2
Aug. 9
Aug. 16
Aug. 23
Aug. 30
Sept. 6
Sept. 13
Sept. 20
Sept. 27
74,855
13,557
75,728
13,880
72,871
13,175
69,075
12,567
71,269
12,520
78,371
12,657
78,121
12,213
71,293
12,592
69,004
13,249
15,641
19,524
15,437
20,420
15,026
22,755
17,891
22,720
14,103
25,095
15,563
23,077
17,201
22,806
16,123
22,381
17,454
24,744
17,674
43,227
15,624
48,249
17,180
44,438
16,819
41,710
13,481
41,795
16,211
40,350
17,836
40,442
16,939
42,366
16,829
44,700
28,358
14,649
26,244
14,267
27,070
14,357
29,762
14,730
29,013
14,833
30,159
15,095
29,925
15,293
30,865
15,520
31,152
16,278
42,558
28,326
42,575
27,033
43,825
31,094
39,502
27,852
38,110
28,986
45,295
28,858
41,258
27,828
42,051
30,603
39,579
27,736
1. Banks with assets of $4 billion or more as of Dec. 31, 1988.
Data in this table also appear in the Board's H.5 (507) weekly statistical release.
For ordering address, see inside front cover.
2. Brokers and nonbank dealers in securities, other depository institutions,
foreign banks and official institutions, and U.S. government agencies.
A8
Domestic Financial Statistics • December 1993
1.14
FEDERAL RESERVE BANK INTEREST RATES
Percent per year
Current and previous levels
Adjustment credit1
Federal Reserve
Bank
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
On
10/28/93
Effective date
Previous rate
On
10/28/93
3
7/2/92
7/2/92
7/2/92
7/6/92
7/2/92
7/2/92
3.5
3.10
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco . . .
7/2/92
7/7/92
7/2/92
7/2/92
7/2/92
7/2/92
3
Extended credit 3
Seasonal credit2
3.10
3.5
Effective date
Previous rate
On
10/28/93
Effective date
Previous rate
10/28/93
10/28/93
10/28/93
10/28/93
10/28/93
10/28/93
3.15
3.60
10/28/93
10/28/93
10/28/93
10/28/93
10/28/93
10/28/93
3.65
10/28/93
10/28/93
10/28/93
10/28/93
10/28/93
10/28/93
3.15
3.60
10/28/93
10/28/93
10/28/93
10/28/93
10/28/93
10/28/93
3.65
Range of rates for adjustment credit in recent years 4
Effective date
In effect Dec. 31, 1977
1978—Jan.
May
July
Aug.
Sept.
Oct.
Nov.
9
20
11
12
3
10
21
22
16
20
1
3
Range (or
level)—
All F.R.
Banks
6
6-6.5
6.5
6.5-7
7
7-7.25
7.25
7.75
8
8-8.5
8.5
8.5-9.5
9.5
1979—July 20
Aug. 17
20
Sept. 19
21
Oct. 8
10
10
10-10.5
10.5
10.5-11
11
11-12
12
1980—Feb. 15
19
May 29
30
June 13
16
29
July 28
Sept. 26
Nov. 17
Dec. 5
12-13
13
12-13
12
11-12
11
10
10-11
11
12
12-13
F.R.
Bank
of
N.Y.
6
6.5
6.5
7
7
7.25
7.25
7.75
8
8.5
8.5
9.5
9.5
10
10.5
10.5
11
11
12
12
13
13
13
12
11
11
10
10
11
12
13
Effective
1981-—May
5
Nov. 7
6
Dec. 4
1982--July
-July 70
73
Aug. 7
3
16
?7
30
Oct. 17
13
Nov. 77
26
Dec. 14
15
17
13-14
14
13-14
13
12
F.R.
Bank
of
N.Y.
14
14
13
13
12
10.5
10-10.5
10
9.5-10
9.5
9-9.5
9
8.5-9
8.5-9
8.5
11.5
11.5
11
11
10.5
10
10
9.5
9.5
9
9
9
8.5
8.5
8.5-9
9
8.5-9
8.5
9
9
8.5
8.5
1985-—May 70
74
7.5-8
7.5
7.5
7.5
1986-—Mar. 7
10
Apr. 71
July 11
7-7.5
7
6.5-7
6
7
7
6.5
6
1984-—Apr.
—Apr.
<>
13
Nov. 71
76
Dec. 74
1. Available on a short-term basis to help depository institutions meet temporary needs for funds that cannot be met through reasonable alternative sources.
The highest rate established for loans to depository institutions may be charged on
adjustment-credit loans of unusual size that result from a major operating problem
at the borrower's facility.
2. Available to help relatively small depository institutions meet regular
seasonal needs for funds that arise from a clear pattern of intrayearly movements
in their deposits and loans and that cannot be met through special industry
lenders. The discount rate on seasonal credit takes into account rates on market
sources of funds and ordinarily is reestablished on the first business day of each
two-week reserve maintenance period; however, it is never less than the discount
rate applicable to adjustment credit.
3. May be made available to depository institutions when similar assistance is
not reasonably available from other sources, including special industry lenders.
Such credit may be provided when exceptional circumstances (including sustained deposit drains, impaired access to money market funds, or sudden
deterioration in loan repayment performance) or practices involve only a particular institution, or to meet the needs of institutions experiencing difficulties
adjusting to changing market conditions over a longer period (particularly at times
of deposit disintermediation). The discount rate applicable to adjustment credit
Range (or
level)—
All F.R.
Banks
11.5-12
11.5
11-11.5
11
Range (or
level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
1986—Aug. 21
22
5.5-6
5.5
5.5
5.5
1987—Sept. 4
11
5.5-6
6
6
6
1988—Aug. 9
11
6-6.5
6.5
6.5
6.5
1989—Feb. 24
6.5-7
7
7
7
Effective date
27
1990—Dec. 19
1991—Feb.
Apr.
May
Sept.
Nov.
Dec.
1992—July
1
4
30
2
13
17
6
7
20
24
2
7
In effect Oct. 28, 1993
6.5
6.5
6-6.5
6
5.5-6
5.5
5-5.5
5
4.5-5
4.5
3.5-4.5
3.5
6
6
5.5
5.5
5
5
4.5
4.5
3.5
3.5
3-3.5
3
3
3
3
3
ordinarily is charged on extended-credit loans outstanding less than thirty days;
however, at the discretion of the Federal Reserve Bank, this time period may be
shortened. Beyond this initial period, a flexible rate somewhat above rates on
market sources of funds is charged. The rate ordinarily is reestablished on the first
business day of each two-week reserve maintenance period, but it is never less
than the discount rate applicable to adjustment credit plus 50 basis points.
4. For earlier data, see the following publications of the Board of Governors:
Banking and Monetary Statistics, 1914-1941, and 1941-1970-, and the Annual
Statistical Digest, 1970-1979.
In 1980 and 1981, the Federal Reserve applied a surcharge to short-term
adjustment-credit borrowings by institutions with deposits of $500 million or more
that had borrowed in successive weeks or in more than four weeks in a calendar
quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7,
1980. A surcharge of 2 percent was reimposed on Nov. 17, 1980; the surcharge
was subsequently raised to 3 percent on Dec. 5, 1980, and to 4 percent on May 5,
1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981, and to 2
percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the
surcharge was changed from a calendar quarter to a moving thirteen-week period.
The surcharge was eliminated on Nov. 17, 1981.
Policy Instruments
1.15
A9
RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS 1
Type of deposit
Net transaction accounts3
1 $0 million-$46.8 million...
2 More than $46.8 million 4 ..
12/15/92
12/15/92
3
Nonpersonal time deposits^
12/27/90
4
Eurocurrency liabilities6. .
12/27/90
1. Required reserves must be held in the form of deposits with Federal Reserve
Banks or vault cash. Nonmember institutions may maintain reserve balances with
a Federal Reserve Bank indirectly on a pass-through basis with certain approved
institutions. For previous reserve requirements, see earlier editions of the Annual
Report or the Federal Reserve Bulletin. Under provisions of the Monetary
Control Act, depository institutions include commercial banks, mutual savings
banks, savings and loan associations, credit unions, agencies and branches of
foreign banks, and Edge Act corporations.
2. The Garn-St Germain Depository Institutions Act of 1982 (Public Law
97-320) requires that $2 million of reservable liabilities of each depository
institution be subject to a zero percent reserve requirement. The Board is to adjust
the amount of reservable liabilities subject to this zero percent reserve requirement each year for the succeeding calendar year by 80 percent of the percentage
increase in the total reservable liabilities of all depository institutions, measured
on an annual basis as of June 30. No corresponding adjustment is to be made in
the event of a decrease. On Dec. 15, 1992, the exemption was raised from $3.6
million to $3.8 million. The exemption applies in the following order: (1) net
negotiable order of withdrawal (NOW) accounts (NOW accounts less allowable
deductions); and (2) net other transaction accounts. The exemption applies only to
accounts that would be subject to a 3 percent reserve requirement.
3. Include all deposits against which the account holder is permitted to make
withdrawals by negotiable or transferable instruments, payment orders of withdrawal, and telephone and preauthorized transfers in excess of three per month
for the purpose of making payments to third persons or others. However, money
market deposit accounts (MMDAs) and similar accounts subject to the rules that
permit no more than six preauthorized, automatic, or other transfers per month,
of which no more than three may be checks, are not transaction accounts (such
accounts are savings deposits).
The Monetary Control Act of 1980 requires that the amount of transaction
accounts against which the 3 percent reserve requirement applies be modified
annually by 80 percent of the percentage change in transaction accounts held by
all depository institutions, determined as of June 30 each year. Effective Dec. 15,
1992, for institutions reporting quarterly, and Dec. 24, 1992, for institutions
reporting weekly, the amount was increased from $42.2 million to $46.8 million.
4. The reserve requirement was reduced from 12 percent to 10 percent on Apr.
2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions
that report quarterly.
5. For institutions that report weekly, the reserve requirement on nonpersonal
time deposits with an original maturity of less than 1V5 years was reduced from 3
percent to IVi percent for the maintenance period that began Dec. 13, 1990, and
to zero for the maintenance period that began Dec. 27, 1990. The reserve
requirement on nonpersonal time deposits with an original maturity of 1 Vi years
or more has been zero since Oct. 6, 1983.
For institutions that report quarterly, the reserve requirement on nonpersonal
time deposits with an original maturity of less than 1 Vi years was reduced from 3
percent to zero on Jan. 17, 1991.
6. The reserve requirement on Eurocurrency liabilities was reduced from 3
percent to zero in the same manner and on the same dates as was the reserve
requirement on nonpersonal time deposits with an original maturity of less than
1 Vi years (see note 4).
A10
1.17
D o m e s t i c Financial Statistics • D e c e m b e r 1993
FEDERAL RESERVE OPEN MARKET TRANSACTIONS 1
Millions of dollars
1993
Type of transaction
and maturity
1990
1991
1992
Feb.
Mar.
Apr.
May
June
July
Aug.
U . S . TREASURY SECURITIES
Outright transactions (excluding matched
transactions)
Treasury bills
Gross purchases
Gross sales
Exchanges
Redemptions
Others within one year
Gross purchases
Gross sales
Maturity shifts
Exchanges
Redemptions
One to five years
Gross purchases
Gross sales
Maturity shifts
Exchanges
Five to ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
More than ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
All maturities
Gross purchases
Gross sales
Redemptions
24,739
7,291
241,086
4,400
20,158
120
277,314
1,000
14,714
1,628
308,699
1,600
0
0
19,832
0
0
0
23,796
0
121
0
30,124
0
349
0
26,610
0
7,280
0
24,821
0
0
0
35,943
0
902
0
27,775
0
425
0
25,638
-27,424
0
3,043
0
24,454
-28,090
1,000
1,096
0
36,662
-30,543
0
0
0
2,892
-6,044
0
279
0
4,303
-2,602
0
244
0
1,950
-1,100
0
0
0
4,108
-4,013
0
0
0
4,002
-2,152
0
0
0
0
0
0
100
0
0
0
0
250
200
-21,770
25,410
6,583
0
-21,211
24,594
13,118
0
-34,478
25,811
0
0
-2,617
4,564
1,441
0
-4,303
2,602
2,490
0
-1,630
800
0
0
-3,652
3,245
0
0
-4,002
2,152
200
0
666
0
1,100
0
0
0
0
100
-2,186
789
1,280
0
-2,037
2,894
2,818
0
-1,915
3,532
0
0
-98
1,000
716
0
0
0
1,147
0
-320
300
0
0
-333
468
0
0
0
0
0
0
-666
0
500
0
0
0
0
0
-1,681
1,226
375
0
-1,209
600
2,333
0
-269
1,200
0
0
-177
480
705
0
0
0
1,110
0
0
0
0
0
-123
300
0
0
0
0
0
0
0
0
100
0
0
0
25,414
7,591
4,400
31,439
120
1,000
34,079
1,628
1,600
0
0
0
3,141
0
0
5,111
0
0
349
0
0
7,280
0
0
200
0
0
2,702
0
0
1,369,052
1,363,434
1,570,456
1,571,534
1,482,467
1,480,140
111,491
113,349
146,563
143,049
127,115
128,924
124,462
123,227
111,726
113,095
115,504
117,074
136,037
135,705
219,632
202,551
310,084
311,752
378,374
386,257
28,544
25,889
37,815
33,714
30,197
36,953
33,987
28,640
53,051
43,342
41,190
56,246
53,053
48,263
24,886
29,729
20,642
4,513
3,728
163
4,461
18,357
-13,286
7,160
0
0
183
0
5
292
0
0
632
0
0
85
0
0
101
0
0
28
0
0
41
0
0
22
0
0
366
0
0
125
41,836
40,461
22,807
23,595
14,565
14,486
1,107
832
1,811
1,519
197
764
2,105
2,105
2,968
2,019
3,479
4,428
2,485
2,415
35 Net change in federal agency obligations
1,192
-1,085
-554
190
191
-595
-41
927
-1,315
-55
36 Total net change in System Open Market
Account
26,078
28,644
20,089
4,703
3,918
-431
4,420
19,284
-14,601
7,105
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Matched transactions
25 Gross sales
26 Gross purchases
Repurchase agreements
27 Gross purchases
28 Gross sales
29 Net change in U.S. Treasury securities
FEDERAL AGENCY OBLIGATIONS
Outright transactions
30 Gross purchases
31 Gross sales
32 Redemptions
Repurchase agreements
33 Gross purchases
34 Gross sales
1. Sales, redemptions, and negative figures reduce holdings of the System Open
Market Account; all other figures increase such holdings.
Federal Reserve Banks
1.18
FEDERAL RESERVE B A N K S
All
Condition and Federal Reserve Note Statements 1
Millions of dollars
Account
Sept. 1
Sept. 8
Wednesday
End of month
1993
1993
Sept. 15
Sept. 22
Sept. 29
July 31
Aug. 31
Sept. 30
Consolidated condition statement
ASSETS
Gold certificate account
2 Special drawing rights certificate account
3
1
Loans
4 To depository institutions
5
6 Acceptances held under repurchase agreements
Federal agency obligations
7 Bought outright
8 Held under repurchase agreements
11,056
8,018
379
11,056
8,018
370
11,056
8,018
367
11,056
8,018
377
11,057
8,018
378
11,057
8,018
398
11,057
8,018
382
11,057
8,018
378
233
0
0
219
0
0
241
0
0
321
0
0
268
0
0
234
0
0
236
0
0
2,918
0
0
4,839
781
4,839
95
4,839
1,866
4,839
1,506
4,804
1,621
4,964
0
4,839
70
4,804
2,146
321,996
323,512
323,671
342,323
326,938
314,614
321,775
325,653
10 Bought outright2
11 Bills
1? Notes
Bonds
n
14 Held under repurchase agreements
315,426
152,377
125,211
37,838
6,570
321,238
154,164
128,297
38,778
2,274
320,070
152,9%
128,297
38,778
3,601
320,287
153,212
128,297
38,778
22,036
319,344
152,069
128,497
38,778
7,594
314,614
153,366
123,772
37,477
0
316,985
153,936
125,211
37,838
4,790
319,357
151,982
128,597
38,778
6,296
15 Total loans and securities
327,849
328,665
330,618
348,990
333,632
319,813
326,920
335,521
6,206
1,044
9,435
1,045
6,210
1,045
6,277
1,046
5,001
1,047
4,958
1,043
7,560
1,044
4,349
1,047
22,902
7,782
22,922
8,120
22,938
8,470
22,999
10,397
23,011
9,379
22,352
8,336
22,899
7,485
23,272
8,771
385,236
389,632
388,722
409,160
391,523
375,975
385,364
392,412
9 Total U.S. Treasury securities
16 Items in process of collection
17 Bank premises
Other assets
18 Denominated in foreign currencies
19 All other 4
20 Total assets
LIABILITIES
328,650
331,262
330,642
329,554
329,755
325,149
328,125
330,421
22 Total deposits
41,204
41,663
43,173
65,298
47,535
37,062
40,368
48,030
Depository institutions
7.4 U.S. Treasury—General account
25 Foreign—Official accounts
26 Other
36,017
4,659
194
335
37,018
4,116
191
338
36,402
5,974
444
353
37,860
26,895
211
333
35,455
11,438
294
348
30,725
5,818
284
232
31,931
7,975
187
272
29,934
17,289
501
306
5,545
2,408
7,287
2,460
5,600
2,351
4,925
2,387
4,833
2,418
4,415
2,369
6,707
2,408
4,275
2,460
377,807
382,671
381,767
402,163
384,541
368,995
377,608
385,186
3,318
3,054
1,058
3,318
3,054
589
3,328
3,054
574
3,329
3,054
613
3,331
3,054
598
3,299
3,054
628
3,317
3,054
1,385
3,331
3,054
842
385,236
389,632
388,722
409,160
391,523
375,975
385,364
392,412
326,229
325,559
328,957
333,061
332,545
316,176
332,238
330,479
21 Federal Reserve notes
73
77 Deferred credit items
28 Other liabilities and accrued dividends5
29 Total liabilities
CAPITAL ACCOUNTS
30 Capital paid in
31 Surplus
32 Other capital accounts
33 Total liabilities and capital accounts
MEMO
34 Marketable U.S. Treasury securities held in custody for
foreign and international accounts
Federal Reserve note statement
35 Federal Reserve notes outstanding (issued to Banks)
36 LESS: Held by Federal Reserve Banks
37 Federal Reserve notes, net
38
39
40
41
Collateral held against notes, net:
Gold certificate account
Special drawing rights certificate account
Other eligible assets
U.S. Treasury and agency securities
42 Total collateral
391,919
63,268
328,650
392,708
61,446
331,262
393,919
63,277
330,642
394,873
65,319
329,554
395,304
65,549
329,755
389,182
64,034
325,149
391,822
63,697
328,125
395,420
64,999
330,421
11,056
8,018
0
309,576
11,056
8,018
0
312,188
11,056
8,018
0
311,568
11,056
8,018
0
310,480
11,057
8,018
0
310,680
11,057
8,018
0
306,073
11,057
8,018
0
309,051
11,057
8,018
0
311,346
328,650
331,262
330,642
329,554
329,755
325,149
328,125
330,421
1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly
statistical release. For ordering address, see inside front cover.
2. Includes securities loaned—fully guaranteed by U.S. Treasury securities
pledged with Federal Reserve Banks—and excludes securities sold and scheduled
to be bought back under matched sale-purchase transactions.
3. Valued monthly at market exchange rates.
4. Includes special investment account at the Federal Reserve Bank of Chicago
in Treasury bills maturing within ninety days.
5. Includes exchange-translation account reflecting the monthly revaluation at
market exchange rates of foreign exchange commitments.
A12
1.19
DomesticNonfinancialStatistics • December 1993
FEDERAL RESERVE BANKS
Maturity Distribution of Loan and Security Holding
Millions of dollars
Type of holding and maturity
Wednesday
End of month
1993
1993
Sept. 30
Sept. 1
Sept. 8
Sept. 15
Sept. 22
Sept. 29
July 30
Aug. 31
1 Total loans
232
219
241
321
268
234
236
2,918
2 Within fifteen days'
3 Sixteen days to ninety days
4 Ninety-one days to one year
60
173
0
60
158
0
185
57
0
284
38
0
235
34
0
103
132
0
99
137
0
2,793
125
0
5 Total acceptances
0
0
0
0
0
0
0
0
6 Within fifteen days1
7 Sixteen days to ninety days
8 Ninety-one days to one year
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
9 Total U.S. Treasury securities
321,996
323,512
323,671
342,323
319,351
314,614
316,985
319,357
Within fifteen days 1
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
17,048
78,503
101,665
72,679
21,707
30,394
17,149
76,033
101,737
74,979
22,505
31,111
19,169
74,184
101,724
74,979
22,504
31,111
37,971
77,639
98,119
74,979
22,505
31,111
11,886
77,157
101,514
75,179
22,505
31,111
7,871
79,998
104,466
71,241
20,940
30,099
6,730
82,664
102,812
72,679
21,707
30,394
4,423
76,689
109,686
74,942
22,505
31,111
16 Total federal agency obligations
5,620
4,934
6,705
6,345
6,426
4,964
4,839
4,804
Within fifteen days1
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
781
439
1,461
2,150
647
142
95
704
1,197
2,150
647
142
1,901
694
1,172
2,198
599
142
1,761
474
1,172
2,198
599
142
1,841
555
1,102
2,187
599
142
101
747
1,087
2,156
732
142
302
439
1,142
2,168
647
142
220
550
1,102
2,187
599
142
10
11
12
13
14
15
17
18
19
20
21
22
1. Holdings under repurchase agreements are classified as maturing within
fifteen days in accordance with maximum maturity of the agreements.
Monetary and Credit Aggregates
1.20
A13
AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS A N D MONETARY BASE 1
Billions of dollars, averages of daily figures
1993
-
Item
1989
Dec.
1990
Dec.
1992
Dec.
1991
Dec.
Feb.
Total reserves 3
Nonborrowed reserves 4
Nonborrowed reserves plus extended credit 5
Required reserves
Monetary base 6
Apr.
May
June
July
Aug.
Sept.
56.88
56.76
56.76
55.88
364.77
57.12
56.94
56.94
56.21
368.07
57.57
57.32
57.32
56.48
370.98
58.03
57.68
57.68
57.08
374.53
58.84
58.42
58.42
57.75
379.27
Seasonally adjusted
ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS 2
1
2
3
4
5
Mar.
40.49
40.23
40.25
39.57
267.73
41.77
41.44
41.46
40.10
293.19
45.53
45.34
45.34
44.56
317.17
54.35
54.23
54.23
53.20
350.80
54.92
54.88
54.88
53.82
355.73
55.17
55.07
55.07
53.95
358.37
55.20
55.12
55.12
54.10
360.63
Not seasonally adjusted
6
7
8
9
10
Total reserves
Nonborrowed reserves
Nonborrowed reserves plus extended credit5
Required reserves
Monetary base 9
41.77
41.51
41.53
40.85
271.18
43.07
42.74
42.77
41.40
296.68
46.98
46.78
46.78
46.00
321.07
56.06
55.93
55.93
54.90
354.55
53.81
53.77
53.77
52.71
353.18
54.18
54.09
54.09
52.96
356.00
56.37
56.29
56.29
55.27
361.64
55.88
55.76
55.76
54.88
364.08
56.96
56.78
56.78
56.05
368.73
57.42
57.17
57.17
56.33
372.02
57.38
57.03
57.03
56.43
374.10
58.69
58.27
58.27
57.60
377.76
62.81
62.54
62.56
61.89
292.55
.92
.27
59.12
58.80
58.82
57.46
313.70
1.66
.33
55.53
55.34
55.34
54.55
333.61
.98
.19
56.54
56.42
56.42
55.39
360.90
1.16
.12
53.88
53.84
53.84
52.78
359.56
1.10
.05
54.30
54.20
54.20
53.08
362.59
1.21
.09
56.54
56.47
56.47
55.45
368.18
1.10
.07
56.10
55.98
55.98
55.10
370.46
57.24
57.06
57.06
56.33
375.19
.91
.18
57.75
57.51
57.51
56.66
378.48
1.09
.24
57.77
57.42
57.42
56.82
380.53
.95
.35
59.14
58.71
58.71
58.05
384.26
1.09
.43
NOT ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS 10
11
12
13
14
15
16
17
Total reserves 11
Nonborrowed reserves
Nonborrowed reserves plus extended credit5
Required reserves
Monetary base 12
Excess reserves
Borrowings from the Federal Reserve
1. Latest monthly and biweekly figures are available from the Board's H.3 (502)
weekly statistical release. Historical data and estimates of the impact on required
reserves of changes in reserve requirements are available from the Monetary and
Reserves Projections Section, Division of Monetary Affairs, Board of Governors
of the Federal Reserve System, Washington, DC 20551.
2. Figures reflect adjustments for discontinuities, or "breaks," associated with
regulatory changes in reserve requirements. (See also table 1.10)
3. Seasonally adjusted, break-adjusted total reserves equal seasonally
adjusted, break-adjusted required reserves (line 4) plus excess reserves (line 16).
4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally
adjusted, break-adjusted total reserves (line 1) less total borrowings of depository
institutions from the Federal Reserve (line 17).
5. Extended credit consists of borrowing at the discount window under
the terms and conditions established for the extended credit program to help
depository institutions deal with sustained liquidity pressures. Because there is
not the same need to repay such borrowing promptly as with traditional shortterm adjustment credit, the money market impact of extended credit is similar to
that of nonborrowed reserves.
6. The seasonally adjusted, break-adjusted monetary base consists of (1)
seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally
adjusted currency component of the money stock, plus (3) (for all quarterly
reporters on the "Report of Transaction Accounts, Other Deposits and Vault
Cash" and for all those weekly reporters whose vault cash exceeds their required
reserves) the seasonally adjusted, break-adjusted difference between current vault
cash and the amount applied to satisfy current reserve requirements.
7. Break-adjusted total reserves equal break-adjusted required reserves (line 9)
plus excess reserves (line 16).
8. To adjust required reserves for discontinuities that are due to regulatory
changes in reserve requirements, a multiplicative procedure is used to estimate
1.00
.12
what required reserves would have been in past periods had current reserve
requirements been in effect. Break-adjusted required reserves include required
reserves against transactions deposits and nonpersonal time and savings deposits
(but not reservable nondeposit liabilities).
9. The break-adjusted monetary base equals (1) break-adjusted total reserves
(line 6), plus (2) the (unadjusted) currency component of the money stock, plus (3)
(for all quarterly reporters on the "Report of Transaction Accounts, Other
Deposits and Vault Cash" and for all those weekly reporters whose vault cash
exceeds their required reserves) the break-adjusted difference between current
vault cash and the amount applied to satisfy current reserve requirements.
10. Reflects actual reserve requirements, including those on nondeposit liabilities, with no adjustments to eliminate the effects of discontinuities associated
with changes in reserve requirements.
11. Reserve balances with Federal Reserve Banks plus vault cash used to
satisfy reserve requirements.
12. The monetary base, not break-adjusted and not seasonally adjusted,
consists of (1) total reserves (line 11), plus (2) required clearing balances and
adjustments to compensate for float at Federal Reserve Banks, plus (3) the
currency component of the money stock, plus (4) (for all quarterly reporters on
the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all
those weekly reporters whose vault cash exceeds their required reserves) the
difference between current vault cash and the amount applied to satisfy current
reserve requirements. Since the introduction of changes in reserve requirements
(CRR), currency and vault cash figures have been measured over the computation
periods ending on Mondays.
13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14).
A14
1.21
DomesticNonfinancialStatistics • December 1993
MONEY STOCK, LIQUID ASSETS, A N D DEBT MEASURES 1
Billions of dollars, averages of daily figures
1993
It m
item
1989
Dec.
1990
Dec.
1991
Dec.
1992
Dec."
June 1
July"
Aug.
Sept.
Seasonally adjusted
1
2
3
4
i
Measures2
Ml
M2
M3
L
Debt
6
7
8
9
Ml components
Currency 3
Travelers checks
Demand deposits 5
Other checkable deposits 6
794.6
3,233.3
4,056.1
4,886.1
10,030.7r
827.2
3,345.5
4,116.8r
4,966.6
10,670. l r
899.3
3,445.8
4,168.1
4,982.3r
ll,141.9 r
1,026.6
3,494.9
4,162.5
5,039.5
11,718.6
1,073.1
3,510.9
4,167.5
5,070.2
11,972.0
1,085.3
3,516.8
4,165.1
5,068.4
12,025.9
1,094.8
3,521.9
4,167.9
5,075.2
12,079.5
1,107.6
3,534.5
4,180.7
n.a.
n.a.
222.7
6.9
279.8
285.3
246.7
7.8
278.2
294.5
267.2
7.8
290.5
333.8
292.3
8.1
340.8
385.2
306.8
8.0
360.5
397.8
309.6
7.9
365.7
402.2
312.6
7.8
370.7
403.8
316.4
7.8
376.5
406.9
2,438.7
822.8
2,518.3
771.3r
2,546.6
722.3
2,468.3
667.7
2,437.8
656.6
2,431.4
648.3
2,427.1
645.9
2,426.9
646.2
Commercial banks
12 Savings deposits, including MMDAs
13 Small time deposits 9
14 Large time deposits 10, 11
541.4
534.9
387.7
582.2
610.3
368,8r
666.2
601.5
341.3
756.1
506.9
288.1
769.0
488.7
276.0
769.5
483.8
271.6
773.9
479.5
272.3
777.4
476.4
270.7
Thrift institutions
15 Savings deposits, including
MMDAs
16 Small time deposits 9 .
17 Large time deposits 10
349.6
617.8
161.1
338.6
562.0
120.9
376.3
463.2
83.4
429.9
360.4
67.5
429.8
338.0
63.8
430.6
333.8
63.6
431.2
330.7
63.1
431.7
327.1
63.1
Money market mutual funds
18 General purpose and broker-dealer
19 Institution-only
317.4
108.8
350.5
135.9
363.9
182.1
342.3
202.3
336.2
198.1
335.9
195.0
334.3
193.3
332.4
194.1
2,247.6r
7,783.1r
2,490.7r
8,179.4r
2,763.8r
8,378. l r
3,068.4
8,650.2
3,207.9
8,764.1
3,227.8
8,798.1
3,252.2
8,827.4
Nontransaction
10 In M2*
11 In M3
components
Debt components
20 Federal debt
21 Nonfederal debt
n.a.
n.a.
Not seasonally adjusted
2
22
23
24
23
26
Measures
Msl8
M2
M3
L
Debt
27
28
29
30
Ml components
Currency
Travelers checks
Demand deposits 5
Other checkable deposits 6
811.5
3,245.1
4,066.4
4,906.0
10,026.5r
843.7
3,357.0
4,126.3
4,988.0
10,667.7r
225.3
6.5
291.5
288.1
249.5
7.4
289.9
296.9
2,433.6
821.3r
Commercial banks
33 Savings deposits, including MMDAs
34 Small time deposits .
35 Large time deposits 10,
1,045.7
3,509.1
4,174.6
5,064.0
11,717.2
1,072.6
3,506.5
4,162.6
5,057.1
11,937.8
1,084.1
3,513.3
4,158.6
5,050.4
11,984.5
1,088.4
3,514.7
4,165.7
5,062.4
12,040.4
1,099.3
3,520.8
4,168.0
n.a.
n.a.
269.9
7.4
302.9
336.3
295.0
7.8
355.2
387.7
307.4
8.2
359.4
397.5
311.0
8.4
365.4
399.1
312.8
8.4
367.4
399.8
314.8
8.2
373.0
403.3
2,513.2
769.3
2,541.5
720.1
2,463.4
665.5
2,434.0
656.1
2,429.2
645.3
2,426.3
651.0
2,421.5
647.1
543.0
533.8
386.9
580.1
610.5
367.7
663.3
602.0
340.1
752.3
507.7
287.1
772.3
486.9
277.5
772.2
483.7
271.2
774.5
479.6
273.4
775.3
477.1
271.1
Thrift institutions
36 Savings deposits, including MMDAs
37 Small time deposits 9
38 Large time deposits 10
347.4
616.2
162.0
337.3
562.1
120.6
374.7
463.6
83.1
427.8
360.9
67.3
431.6
336.8
64.1
432.1
333.8
63.6
431.6
330.8
63.4
430.5
327.6
63.2
Money market mutual funds
39 General purpose and broker-dealer
40 Institution-only
315.7
109.1
348.4
136.2
361.5
182.4
340.0
202.4
333.0
194.3
331.7
191.8
331.5
193.3
329.8
190.7
Repurchase agreements and Eurodollars
41 Overnight
42
77.5
178.4
74.7
158.3
76.3
130.1
74.8
126.2
73.5
140.6
75.7
140.7
78.3
141.8
81.3
142.4
2,491.3
8,176.3r
2,765.0
8,376.0"
3,069.8
8,647.4
3,188.9
8,748.9
3,201.8
8,782.7
3,229.4
8,810.9
Nontransaction
31 In M2
32 In M38
916.4
3,457.9
4,178.1
5,004.2
11,141.0"
components
Debt components
43 Federal debt
44 Nonfederal debt
Footnotes appear on following page.
2,247.5
7,779.0"
n.a.
n.a.
Monetary and Credit Aggregates
NOTES TO TABLE 1.21
1. Latest monthly and weekly figures are available from the Board's H.6 (508)
weekly statistical release. Historical data are available from the Money and
Reserves Projection Section, Division of Monetary Affairs, Board of Governors of
the Federal Reserve System, Washington, DC 20551.
2. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the
vaults of depository institutions, (2) travelers checks of nonbank issuers, (3)
demand deposits at all commercial banks other than those owed to depository
institutions, the U.S. government, and foreign banks and official institutions, less
cash items in the process of collection and Federal Reserve float, and (4), other
checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW)
and automatic transfer service (ATS) accounts at depository institutions, credit
union share draft accounts, and demand deposits at thrift institutions. Seasonally
adjusted Ml is computed by summing currency, travelers checks, demand
deposits, and OCDs, each seasonally adjusted separately.
M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements
(RPs) issued by all depository institutions and overnight Eurodollars issued to
U.S. residents by foreign branches of U.S. banks worldwide, (2) savings (including MMDAs) and small time deposits (time deposits—including retail RPs—in
amounts of less than $100,000), and (3) balances in both taxable and tax-exempt
general-purpose and broker-dealer money market funds. Excludes individual
retirement accounts (IRAs) and Keogh balances at depository institutions and
money market funds. Also excludes all balances held by U.S. commercial banks,
money market funds (general purpose and broker-deader), foreign governments
and commercial banks, and the U.S. government. Seasonally adjusted M2 is
computed by adjusting its non-Mi component as a whole and then adding this
result to seasonally adjusted M l .
M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of
$100,000 or more) issued by all depository institutions, (2) term Eurodollars held
by U.S. residents at foreign branches of U.S. banks worldwide and at all banking
offices in the United Kingdom and Canada, and (3) balances in both taxable and
tax-exempt, institution-only money market funds. Excludes amounts held by
depository institutions, the U.S. government, money market funds, and foreign
banks and official institutions. Also excluded is the estimated amount of overnight
RPs and Eurodollars held by institution-only money market funds. Seasonally
adjusted M3 is computed by adjusting its non-M2 component as a whole and then
adding this result to seasonally adjusted M2.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper, and bankers acceptances, net of money
A15
market fund holdings of these assets. Seasonally adjusted L is computed by
summing U.S. savings bonds, short-term Treasury securities, commercial paper,
and bankers acceptances, each seasonally adjusted separately, and then adding
this result to M3.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. Data are derived from the Federal
Reserve Board's flow of funds accounts. Debt data are based on monthly
averages. This sum is seasonally adjusted as a whole.
3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of
depository institutions.
4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. Travelers checks issued by depository institutions are included in
demand deposits.
5. Demand deposits at commercial banks and foreign-related institutions other
than those owed to depository institutions, the U.S. government, and foreign
banks and official institutions, less cash items in the process of collection and
Federal Reserve float.
6. Consists of NOW and ATS account balances at all depository institutions,
credit union share draft account balances, and demand deposits at thrift institutions.
7. Sum of (1) overnight RPs and overnight Eurodollars, (2) money market fund
balances (general purpose and broker-dealer), (3) savings deposits (including
MMDAs), and (4) small time deposits.
8. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S.
residents, and (4) money market fund balances (institution-only), less (5) a
consolidation adjustment that represents the estimated amount of overnight RPs
and Eurodollars held by institution-only money market funds.
9. Small time deposits—including retail RPs—are those issued in amounts of
less than $100,000. All IRAs and Keogh accounts at commercial banks and thrift
institutions are subtracted from small time deposits.
10. Large time deposits are those issued in amounts of $100,000 or more,
excluding those booked at international banking facilities.
11. Large time deposits at commercial banks less those held by money market
funds, depository institutions, U.S. government, and foreign banks and official
institutions.
A16
1.22
DomesticNonfinancialStatistics • December 1993
DEPOSIT INTEREST RATES A N D AMOUNTS OUTSTANDING
Commercial and BIF-insured saving banks 1
1993
Item
Jan.
Feb.
Mar.
Apr.
May r
June r
July r
Aug.
Sept.
Interest rates (annual effective yields)
INSURED COMMERCIAL BANKS
1 Negotiable order of withdrawal accounts . . .
2 Savings deposits 2
3.76
4.30
2.33
2.88
2.32
2.85
2.27
2.80
2.21
2.73
2.15
2.68
2.12
2.65
2.09
2.61
2.06
2.59
2.01
2.55
1.96
2.51
Interest-bearing time deposits with balances
of less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2Vi years
More than 2V5 years
4.18
4.41
4.59
4.95
5.52
2.90
3.16
3.37
3.88
4.77
2.86
3.13
3.35
3.88
4.72
2.81
3.08
3.29
3.83
4.59
2.75
3.03
3.22
3.74
4.52
2.72
2.99
3.19
3.66
4.47
2.70
2.97
3.18
3.64
4.47
2.68
2.97
3.19
3.65
4.44
2.67
2.97
3.18
3.64
4.43
2.66
2.96
3.17
3.63
4.40
2.63
2.92
3.12
3.56
4.28
8 Negotiable order of withdrawal accounts . . .
Y Savings deposits
4.44
4.97
2.45
3.20
2.40
3.17
2.37
3.14
2.32
3.05
2.25
2.98
2.20
2.93
2.13
2.88
2.09
2.83
2.07
2.80
2.01
2.73
Interest-bearing time deposits with balances
of less than $100,000, by maturity
10 7 to 91 days
11 92 to 182 days
12 183 days to 1 year
13 More than 1 year to 2Vt> years
14 More than 2Vi years
4.68
4.92
4.99
5.23
5.98
3.13
3.44
3.61
4.02
5.00
3.06
3.38
3.58
3.94
5.02
3.01
3.35
3.57
3.89
4.97
2.95
3.28
3.52
3.83
4.89
2.91
3.23
3.48
3.86
4.84
2.87
3.19
3.45
3.76
4.79
2.86
3.17
3.44
3.79
4.75
2.80
3.15
3.40
3.72
4.73
2.79
3.12
3.37
3.73
4.73
2.76
3.05
3.33
3.68
4.62
3
4
5
6
/
BIF-INSURED SAVINGS BANKS 3
Amounts outstanding (millions of dollars)
INSURED COMMERCIAL BANKS
15 Negotiable order of withdrawal accounts . . .
16 Savings deposits
17
Personal
18
Nonpersonal
244,637
652,058
508,191
143,867
286,541
738,253
578,757
159,496
277,271
733,836
579,701
154,135
279,944
742,952
585,189
157,764
287,811
747,809
591,388
156,422
280,073
745,038
586,863
158,175
283,860
753,452
591,231
162,221
287,555
754,790
592,545
162,245
284,496
757,716
593,448
164,268
287,675
761,919
593,318
168,601
286,046
758,627
592,003
166,624
Interest-bearing time deposits with balances
of less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2 V2 years
More than 2 Vi years
47,094
158,605
209,672
171,721
158,078
38,474
127,831
163,098
152,977
169,708
38,256
128,083
160,630
151,905
169,371
36,738
128,209
159,631
151,798
172,362
35,459
125,630
158,173
147,798
177,558
34,675
122,136
156,957
146,830
178,657
33,213
119,0%
157,559
144,330
179,761
31,743
114,846
156,549
144,804
179,297
30,803
112,497
156,431
143,605
180,983
30,017
109,603
155,074
141,377
181,762
30,307
107,778
153,059
140,086
184,375
147,266
147,350
147,069
146,841
148,515
147,463
146,450
146,549
146,234
145,624
144,965
9,624
71,215
68,638
2,577
10,871
81,786
78,695
3,091
9,858
79,271
76,337
2,934
9,821
79,649
76,634
3,016
10,199
77,390
74,430
2,961
9,876
76,970
74,077
2,893
10,000
77,352
74,376
2,976
10,313
77,495
74,569
2,926
10,457
78,390
75,049
3,341
10,468
78,387
75,153
3,234
10,459
78,196
74,992
3,204
4,146
21,686
29,715
25,379
18,665
3,867
17,345
21,780
18,442
18,845
3,541
16,088
20,627
17,524
18,461
3,468
15,857
20,301
17,387
18,759
3,201
14,468
19,074
16,842
18,564
3,167
14,328
18,778
16,433
18,646
3,103
14,129
18,520
16,155
18,725
3,022
13,808
18,427
15,972
18,989
2,871
13,773
18,454
16,250
19,229
2,928
13,525
18,143
16,200
19,331
2,886
13,261
17,798
16,160
19,610
23,007
21,713
21,320
21,260
20,089
19,969
19,861
19,855
19,920
19,802
19,766
19
20
21
22
23
24 IRA/Keogh Plan deposits
BIF-INSURED SAVINGS BANKS 3
25 Negotiable order of withdrawal accounts
26 Savings deposits 2
27
Personal
28
Nonpersonal
Interest-bearing time deposits with balances
of less than $100,000, by maturity
29 7 to 91 days
30
31
32
33
92 to 182 days
183 days to 1 year
More than 1 year to 2Vi years
More than 2 Vi years
34 IRA/Keogh Plan accounts
1. BIF, Bank Insurance Fund. Data in this table also appear in the Board's H.6
(508) Special Supplementary Table monthly statistical release. For ordering
address, see inside front cover. Estimates are based on data collected by the
Federal Reserve System from a stratified random sample of about 460 commercial
banks and 80 savings banks on the last Wednesday of each period. Data are not
seasonally adjusted and include IRA/Keogh deposits and foriegn currency denominated deposits. Data exclude retail repurchase agreements and deposits held in
U.S. branches and agencies of foreign banks.
2. Includes personal and nonpersonal money market deposits.
3. BIF-insured savings banks include both mutual and federal savings banks.
Monetary and Credit Aggregates
1.23
A17
BANK DEBITS A N D DEPOSIT TURNOVER 1
Debits are in billions of dollars; turnover is ratio of debits to deposits; monthly data are at annual rates
1993
Bank group, or type of customer
Feb.
4 Other checkable deposits 4
5 Savings deposits (including MMDAs)
Apr/
May r
June
July
Seasonally adjusted
DEBITS
Demand deposits3
1 All insured banks
2 Major New York City banks
3 Other banks
Mar.
277,157.5
131,699.1
145,458.4
277,758.0
137,352.3
140,405.7
315,806.1
165,572.7
150,233.5
331,126.3
176,683.2
154,443.1
331,026.3
166,866.6
164,159.7
324,638.7
163,540.1
161,098.6
306,642.9
155,495.0
151,147.9
335,248.5
170,062.9
165,185.6
330,562.7
166,870.0
163,692.7
3,349.0
3,483.3
3,645.5
3,266.1
3,788.1
3,331.3
3,601.4
3,363.3
3,572.6
3,562.8
3,524.7
3,523.3
3,284.7
3,436.1
3,620.9
3,637.4
3,390.6
3,665.9
797.8
3,819.8
464.9
803.5
4,270.8
447.9
832.4
4,797.9
435.9
817.3
4,525.8
421.9
811.3
4,129.1
446.6
792.3
4,120.9
435.4
722.8
3,852.9
393.7
791.3
4,197.5
431.1
777.1
4,291.2
423.5
16.5
6.2
16.2
5.3
14.4
4.7
12.6
4.5
12.5
4.8
12.5
4.7
11.2
4.5
12.3
4.7
11.5
4.8
DEPOSIT TURNOVER
Demand deposits3
6 All insured banks
7 Major New York City banks
8 Other banks
9 Other checkable deposits 4
10 Savings deposits (including MMDAs)
Not seasonally adjusted
DEBITS
Demand deposits3
11 All insured banks
12 Major New York City banks
13 Other banks
14 Other checkable deposits 4
15 Savings deposits (including MMDAs) . . . .
277,290.5
131,784.7
145,505.8
277,715.4
137,307.2
140,408.3
315,808.2
165,595.0
150,213.3
303,619.8
161,174.1
142,445.7
339,172.4
170,855.0
168,317.4
324,530.2
161,923.2
162,607.0
306,746.1
154,606.6
152,139.5
345,368.7
176,874.8
168,493.9
332,500.1
168,018.4
164,481.7
3,346.7
3,483.0
3,645.6
3,267.7
3,788.1
3,329.0
3,296.7
3,080.3
3,630.2
3,529.2
3,741.6
3,741.3
3,201.0
3,445.0
3,645.9
3,758.1
3,314.9
3,676.3
798.2
3,825.9
465.0
803.4
4,274.3
447.9
832.5
4,803.5
436.0
771.7
4,213.4
401.1
854.5
4,385.4
470.2
787.0
4,108.4
436.0
738.2
3,948.9
404.2
818.3
4,412.6
441.1
776.7
4,265.3
423.1
16.4
6.2
16.2
5.3
14.4
4.7
11.6
4.1
12.6
4.7
12.8
5.0
11.1
4.5
12.5
4.9
11.4
4.8
DEPOSIT TURNOVER
Demand deposits3
16 All insured banks
17 Major New York City banks
18 Other banks
19 Other checkable deposits 4
20 Savings deposits (including MMDAs)5
1. Historical tables containing revised data for earlier periods can be obtained
from the Banking and Money Market Statistics Section, Division of Monetary
Affairs, Board of Governors of the Federal Reserve System, Washington, DC
20551.
Data in this table also appear in the Board's G.6 (406) monthly statistical
release. For ordering address, see inside front cover.
2. Annual averages of monthly figures.
3. Represents accounts of individuals, partnerships, and corporations and of
states and political subdivisions.
4. Accounts authorized for negotiable orders of withdrawal (NOWs) and
accounts authorized for automatic transfer to demand deposits (ATSs).
5. Money market deposit accounts.
A18
1.24
DomesticNonfinancialStatistics • December 1993
LOANS A N D SECURITIES
All Commercial Banks 1
Billions of dollars, averages of Wednesday figures
1992
1993
Item
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May r
June 1
July r
Aug.
Sept.
Seasonally adjusted
1 Total loans, leases, and securities2 .
2 U.S. government securities
3 Other securities
4 Total loans and leases 2
5 Commercial and industrial . . . . .
Bankers acceptances held . . .
6
Other commercial and
7
industrial
U.S. addressees
8
9
Non-U.S. addressees 4
10 Real estate
11 Individual
12 Security
13 Nonbank financial
institutions
14 Agricultural
15 State and political
subdivisions
16 Foreign banks
17 Foreign official institutions
18 Lease-financing receivables . . . .
19 All other loans
2,926.0
2,932.4
2,937.6
2,935.3
2,943.9
2,960.2r
2,971.3r
r
2,992.5
3,016.0
3,038.6
3,047.2
3,058.1
647.3
178.8
2,099.8
600.8
7.5
651.4
177.3
2,103.8
600.5
7.9
657.1
176.0
2,104.6
597.6
7.7
656.5
174.5
2,104.4
598.0
7.3
666.2
176.4
2,101.3
596.7
8.4
680.3
178.8r
2,101.1
593. l r
8.5
691.3r
180.4r
2,099.6r
587.6r
8.5
693.9
181.0
2,117.7
590.7
9.1
704.5
179.7
2,131.8
592.3
9.0
708.2
181.2
2,149.2
591.2
9.6
714.6
182.1
2,150.6
590.6
10.0
720.2
182.2
2,155.7
587.5
9.2
593.3
582.6
10.7
890.7
355.8
64.7
592.6
582.3
10.3
892.5
355.4
64.2
589.9
580.2
9.7
892.4
355.5
64.8
590.7
581.2
9.6
890.8
358.4
63.5
588.3
578.8
9.5
890.1
361.9
62.8
584.5r
574.9r
9.7
892.0"
362.3
64.3
579.l r
570.0r
9.1
892.8rr
364. l
62.6
581.6
572.3
9.3
898.5
367.0
69.1
583.3
574.7
8.7
904.3
368.1
72.2
581.6
572.6
9.0
907.6
371.8
82.5
580.6
571.6
9.0
910.6
373.9
80.5
578.3
569.0
9.3
914.2
375.1
83.4
43.9
35.1
44.7
35.2
43.6
35.0
45.1
34.5
44.6
34.3
44.2
34.0
44.8
34.0
45.5
34.2
45.4
34.1
46.0
34.5
46.3
34.6
45.6
34.7
25.4
7.6
2.4
30.8
42.6
25.1
7.5
2.8
30.9
45.0
24.8
7.7
2.8
30.9
49.5
24.2
7.7
2.9
30.4
48.8
23.8
8.8
3.2
30.6
44.5
23.7
8.5
3.2
30.6
45.3
23.4
8.4
3.2
30.7
47.9r
23.5
8.5
3.1
31.0
46.5
23.6
8.7
3.3
31.3
48.7
23.7
9.2
3.3
31.7
47.9
23.6
9.6
3.2
31.8
45.8
23.2
8.8
3.5
31.9
47.7
Not seasonally adjusted
20 Total loans, leases, and securities2 .
2,925.2
2,939.0
2,947.4
2,937.4
2,946.7
2,963.9r
2,972.8r
2,987.4
3,015.7
3,026.8
3,038.8
3,054.9
21 U.S. government securities
22 Other securities
23 Total loans and leases 2
24 Commercial and industrial
25
Bankers acceptances held 3 . . .
Other commercial and
26
industrial
27
U.S. addressees 4 .
28
Non-U.S. addressees 4
29 Real estate
30 Individual
31 Security
32 Nonbank financial
institutions
33 Agricultural
34 State and political
subdivisions
35 Foreign banks
36 Foreign official institutions
37 Lease-financing receivables . . . .
38 All other loans
645.1
179.2
2,100.9
598.4
7.4
654.1
178.3
2,106.6
600.8
8.2
655.8
176.2
2,115.4
600.6
8.0
656.9
175.0
2,105.5
596.4
7.4
669.8
176.6
2,100.3
595.9
8.8
685.9"
178.6r
2,099.4
596.2r
8.6
693. l r
179.8r
2,099.9
590.6r
8.4
692.8
180.5
2,114.1
592.4
9.0
702.3
179.2
2,134.3
594.1
8.8
703.5
180.1
2,143.3
590.2
9.3
712.9
181.9
2,144.0
586.9
9.7
717.8
181.8
2,155.3
584.0
9.0
591.0
580.7
10.3
891.5
356.2
64.2
592.6
582.8
9.8
893.9
356.3
63.5
592.5
583.0
9.5
893.7
360.0
65.6
589.0
579.5
9.5
890.5
362.5
65.0
587.1
577.5
9.5
888.3
361.9
65.8
587,6r
578. l r
9.5
889.5r
359.8r
66.4
582.2r
573.0"
9.2
891.61
361.5r
66.0
583.4
574.2
9.2
898.6
365.2
65.9
585.3
575.8
9.5
904.6
366.2
71.5
580.8
571.5
9.3
907.9
369.4
78.3
577.2
568.0
9.2
911.4
373.4
77.5
575.0
565.8
9.2
915.0
376.8
81.4
43.5
36.1
45.0
35.2
45.6
34.8
45.3
33.6
44.5
32.9
43.91
32.7
44.2
33.2
44.9
33.8
46.0
34.6
45.7
35.4
46.1
35.8
45.0
36.1
25.5
7.8
2.4
30.8
44.4
25.2
7.8
2.8
30.8
45.4
24.8
8.2
2.8
30.9
48.6
24.0
7.8
2.9
30.8
46.6
23.7
8.6
3.2
30.8
44.6
23.7
8.2
3.2
30.8
45.0
23.4
8.1
3.2
30.8
47.4
23.5
8.3
3.1
31.0
47.3
23.6
8.5
3.3
31.3
50.7
23.6
9.2
3.3
31.4
48.9
23.6
9.3
3.2
31.6
45.3
23.4
9.0
3.5
31.7
49.4
1. All commercial banks include domestically chartered insured banks, U.S.
branches and agencies of foreign banks, New York state investment companies
majority owned by foreign banks, and Edge Act and agreement corporations
owned by domestically chartered foreign banks. Data are prorated averages of
Wednesday estimates for domestically chartered and foreign related institutions,
based on weekly reports of a sample of domestically chartered insured banks and
large branches and agencies and quarterly reports of all domestically chartered
insured banks and all agencies, branches, investment companies, and Edge Act
and agreement corporation engaged in banking.
2. Adjusted to exclude loans to commercial banks in the United States.
3. Includes nonfinancial commercial paper held.
4. United States includes the fifty states and the District of Columbia.
Commercial Banking Institutions
1.25
A19
MAJOR NONDEPOSIT F U N D S OF COMMERCIAL BANKS 1
Billions of dollars, monthly averages
1992
1993
Source of funds
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Seasonally adjusted
1 Total nondeposit funds
2 Net balances owed to related foreign offices ..
3 Borrowings from other than commercial banks
in United States 4
4 Domestically chartered banks
5 Foreign-related banks
303.9r
62.6
307.7r
67.3
311.4r
71.1
314.1"
74.2
317.4"
73.6
331.7"
79.5
344.0
89.5
341.8
84.0
354.3
87.2
378.8
101.4
389.8
115.9
401.3
120.7
r
r
r
239.9"
156.8"
83.1
243.9"
157.2"
86.6
252.2"
161.4"
90.8
254.5
167.1
87.4
257.8
167.5
90.3
267.1
176.2
90.9
277.4
186.7
90.7
273.9
184.1
89.8
280.6
188.4
92.2
241.3
155.4r
85.9
240.4
154.8r
85.6
240.3
155.9"
84.4
Not seasonally adjusted
6 Total nondeposit funds 2
306.2r
7 Net balances owed to related foreign offices ..
63.8
8 Domestically chartered banks
-13.4
9 Foreign-related banks
77.2
10 Borrowings from other than commercial banks
in United States 4
242.4rr
11 Domestically chartered banks
156.5
12
Federal funds and security RP
borrowings
153.0"
6
Other
13
3.6
14 Foreign-related banks 6
85.9
MEMO
Gross large time deposits
13 Seasonally adjusted
16 Not seasonally adjusted
U.S. Treasury demand balances at
commercial banks
17 Seasonally adjusted
18 Not seasonally adjusted
313.0"
68.9
-12.4
81.4
311.4r
75.2
-15.0
90.2
312.9"
76.8
-15.8
92.6
321.8"
75.4
-10.6
86.0
336.7"
80.2
-7.0
87.2
340.4
86.5
-9.4
96.0
346.6
86.1
-9.7
95.8
353.6
85.3
-15.3
100.6
372.5
98.1
-15.2
113.4
384.6
112.1
-13.6
125.7
395.6
118.4
-11.2
129.6
244.l r
159.2r
236.2r
154.9"
236.1"
153.7"
246.4"
159.0"
256.4"
164.3"
253.8
165.1
260.5
169.2
268.3
176.0
274.4
182.8
272.5
182.8
277.2
187.0
155.lr
4.1
84.8
151.0"
4.0
81.2
150.1"
3.6
82.4
155.8"
3.2
87.4
160.9"
3.3
92.2
161.6
3.5
88.7
165.4
3.8
91.4
172.1
3.8
92.3
178.6
4.3
91.6
178.7
4.0
89.7
182.6
4.4
90.2
375.7
374.9
371.3
371.1
366.5
365.5
359.9
358.0
358.4
358.0
355.7
356.5
355.0
354.2
356.3
357.9
352.6
354.1
344.6
344.2
339.7
340.8
335.4
335.8
21.5
21.9
20.7
16.5
20.4
19.5
25.6
33.1
23.6
29.5
18.8
17.4
24.2
20.3
19.1
20.3
26.1
26.5
30.1
25.6
29.4
23.8
24.3
28.8
1. Commercial banks are nationally and state-chartered banks in the fifty states
and the District of Columbia, agencies and branches of foreign banks, New York
State investment companies majority owned by foreign banks, and Edge Act and
agreement corporations owned by domestically chartered and foreign banks.
Data in this table also appear in the Board's G.10 (411) monthly statistical
release. For ordering address, see inside front cover.
2. Includes federal funds, repurchase agreements (RPs), and other borrowing
from nonbanks and net balances due to related foreign offices.
3. Reflects net positions of U.S. chartered banks, Edge Act corporations, and
U.S. branches and agencies of foreign banks with related foreign offices plus net
positions with own international banking facilities (IBFs).
4. Borrowings through any instrument, such as a promissory note or due bill,
given for the purpose of borrowing money for the banking business. This includes
borrowings from Federal Reserve Banks and from foreign banks, term federal
funds, loan RPs, and sales of participations in pooled loans.
5. Figures are based on averages of daily data reported weekly by approximately 120 large banks and on quarterly or annual data reported by other banks.
6. Figures are partly averages of daily data and partly averages of Wednesday
data.
7. Time deposits in denominations of $100,000 or more. Estimated averages of
daily data.
8. U.S. Treasury demand deposits and Treasury tax and loan notes at commercial banks. Averages of daily data.
A20
1.26
DomesticNonfinancialStatistics • December 1993
ASSETS A N D LIABILITIES OF COMMERCIAL BANKS 1
Wednesday figures
Millions of dollars
1993
Account
Aug. 4
Aug. 11
Aug. 18
Aug. 25
Sept. 1
Sept. 8
Sept. 15
Sept. 22
Sept. 29
3,204,820
849,654
683,627
166,027
47,544
31,726
2,897
12,922
2,307,622
154,377
2,153,244
591,639
910,746
74,520
836,226
372,122
278,738
212,413
29,555
30,545
30,975
80,123
41,214
284,023
3,182,857
847,402
681,024
166,378
44,931
29,252
2,831
12,849
2,290,525
148,046
2,142,478
589,170
912,608
74,520
838,088
371,702
268,999
206,202
30,699
32,701
28,768
73,299
40,735
281,279
3,185,357
849,265
683,530
165,734
48,856
32,206
2,947
13,703
2,287,236
147,786
2,139,450
587,628
909,808
74,653
835,155
373,618
268,397
209,816
30,602
33,018
29,593
75,033
41,570
275,690
3,166,924
843,317
678,576
164,742
44,491
28,180
2,724
13,587
2,279,116
142,063
2,137,053
583,457
909,991
74,662
835,329
374,071
269,534
203,215
27,708
33,405
29,403
72,042
40,658
271,449
3,208,336
852,285
686,597
165,688
48,092
31,484
2,929
13,679
2,307,959
154,923
2,153,036
584,295
913,913
74,793
839,120
375,171
279,658
245,502
31,973
32,989
33,477
107,350
39,714
275,510
3,190,241
852,837
687,391
165,446
46,601
30,186
2,868
13,547
2,290,803
145,568
2,145,234
579,810
915,396
74,755
840,641
374,475
275,553
230,370
33,294
33,585
32,556
89,924
41,012
282,104
3,226,220
855,140
689,114
166,026
46,701
30,626
2,711
13,363
2,324,379
158,140
2,166,239
585,574
915,884
74,799
841,085
376,374
288,408
245,790
31,776
33,812
35,701
104,076
40,425
280,847
3,187,847
855,801
690,288
165,513
44,546
28,704
2,815
13,028
2,287,500
136,332
2,151,167
584,828
912,665
74,778
837,888
377,421
276,253
211,764
34,400
33,445
28,847
75,062
40,010
271,188
3,200,916
850,057
684,415
165,642
47,166
30,807
2,727
13,632
2,303,693
145,262
2,158,431
585,726
915,920
74,860
841,060
378,993
277,792
221,957
31,828
33,898
31,380
83,476
41,374
275,011
3,701,255
3,670,338
3,670,863
3,641,587
3,729,348
3,702,715
3,752,857
3,670,798
3,697,883
2,520,742
791,838
3,593
39,413
748,832
773,168
614,213
341,524
524,520
17,805
506,715
365,490
2,503,524
776,399
2,998
36,238
737,163
776,633
612,142
338,350
512,355
21,407
490,948
362,701
2,486,856
770,731
2,927
36,820
730,985
769,418
610,928
335,778
519,993
17,689
502,304
371,153
2,478,736
763,156
2,897
38,685
721,575
768,047
609,552
337,981
500,525
19,180
481,345
369,495
2,546,143
831,726
5,880
44,750
781,097
771,584
611,121
331,712
520,737
24,817
495,920
370,263
2,532,645
811,387
3,056
42,613
765,717
778,572
610,347
332,339
503,276
10,561
492,715
371,167
2,570,122
854,312
26,299
46,655
781,359
773,510
609,177
333,123
524,039
12,531
511,508
363,409
2,470,501
767,444
3,956
37,350
726,138
766,761
607,183
329,112
534,563
34,553
500,010
369,877
2,491,559
791,887
3,284
38,939
749,663
764,202
606,940
328,532
534,156
35,277
498,879
379,360
3,410,752
3,378,580
3,378,001
3,348,756
3,437,144
3,407,088
3,457,570
3,374,940
3,405,075
290,503
291,759
292,861
292,832
292,205
295,627
295,287
295,858
292,808
ALL COMMERCIAL BANKING INSTITUTIONS 2
1
2
3
4
5
6
7
8
9
10
11
1?.
N
14
15
16
17
18
19
2.0
21
n
21
24
Assets
Loans and securities
Investment securities
U.S. government securities
Other
Trading account assets
U.S. government securities
Other securities
Other trading account assets
Total loans
Interbank loans
Loans excluding interbank
Commercial and industrial
Real estate
Revolving home equity
Other
Individual
All other
Total cash assets
Balances with Federal Reserve Banks
Cash in vault
Demand balances at U.S. depository institutions ..
Cash items
Other cash assets
Other assets
25 Total assets
26
27
28
29
10
31
32
33
34
35
36
37
Liabilities
Total deposits
Transaction accounts
Demand, U.S. government
Demand, depository institutions
Other demand and all checkable deposits
Savings deposits (excluding checkable)
Small time deposits
Time deposits over $100,000
Borrowings
Treasury tax and loan notes
Other
Other liabilities
38 Total liabilities
39 Residual (assets less liabilities)
3
Footnotes appear on following page.
Commercial Banking Institutions
1.26
ASSETS A N D LIABILITIES OF COMMERCIAL BANKS 1
Wednesday
A21
figures—Continued
M i l l i o n s o f dollars
Aug. 4
Aug. 11
Aug. 18
Aug. 25
Sept. 1
Sept. 8
Sept. 15
Sept. 22
Sept. 29
2,834,642
772,325
630,106
142,219
47,544
31,726
2,897
12,922
2,014,773
133,659
1,881,115
433,141
863,218
74,520
788,698
372,122
212,634
184,446
28,621
30,511
29,664
77,494
18,157
187,358
2,821,866
773,473
631,019
142,454
44,931
29,252
2,831
12,849
2,003,462
127,230
1,876,232
430,094
865,381
74,520
790,861
371,702
209,055
179,103
30,024
32,663
27,367
71,048
18,001
185,913
2,823,361
772,899
630,815
142,084
48,856
32,206
2,947
13,703
2,001,606
127,123
1,874,483
429,175
862,809
74,653
788,157
373,618
208,881
182,705
29,773
32,980
28,249
73,095
18,608
180,699
2,809,188
768,312
626,318
141,994
44,491
2,724
13,587
1,996,385
124,459
1,871,926
427,028
861,616
74,662
786,954
374,071
209,212
175,913
27,145
33,369
28,110
69,891
17,399
175,851
2,847,768
777,015
634,526
142,490
48,092
31,484
2,929
13,679
2,022,661
135,297
1,887,364
428,725
865,567
74,793
790,774
375,171
217,901
218,265
30,900
32,954
32,048
105,204
17,159
183,917
2,836,453
778,421
635,880
142,541
46,601
30,186
2,868
13.547
2,011,432
126,975
1,884,457
426,208
867,163
74,755
792,408
374,475
202,854
32,608
33.548
31,142
87,545
18,011
187,417
2,861,569
780,408
637,485
142,923
46,701
30,626
2,711
13,363
2,034,460
135,135
1,899,325
430,508
867,773
74,799
792,974
376,374
224,671
218,260
30,713
33,773
34,197
101,482
18,095
186,052
2,826,175
780,927
638,505
142,423
44,546
28,704
2,815
13,028
2,000,701
114,911
1,885,790
430,135
864,675
74,778
789,897
377,421
213,560
184,652
33,726
33,404
27,314
72,055
18,153
180,216
2,839,040
776,260
634,014
142,246
47,166
30,807
2,727
13,632
2,015,615
121,048
1,894,567
431,365
868,101
74,860
793,241
378,993
216,107
193,762
30,994
33,860
29,942
80,171
18,795
180,918
3,206,446
3,186,881
3,186,766
3,160,952
3,249,950
3,226,725
3,265,880
3,191,043
3,213,720
2,372,855
780,536
3,593
36,776
740,167
768,502
611,733
212,084
403,882
17,805
386,077
142,236
2,358,619
765,745
2,998
33,891
728,856
771,933
609,679
211,262
399,031
21,407
377,624
140,503
2,343,632
760,355
2,926
34,408
723,021
764,767
608,512
209,998
413,509
17,689
395,820
139,793
2,333,088
752,456
2,8%
36,320
713,240
763,392
607,101
210,140
393,298
19,180
374,118
144,765
2,404,960
820,050
5,878
42,255
771,917
766,984
608,681
209,245
411,656
24,817
386,839
144,160
2,391,976
800,068
3,056
40,014
756,998
773,959
607,926
210,023
399,918
10,561
389,357
142,234
2,426,497
841,930
26,294
44,185
771,451
768,910
606,749
208,908
406,304
12,531
393,773
140,823
2,328,555
754,542
3,955
34,933
715,653
762,247
604,764
207,003
429,043
34,553
394,490
140,617
2,347,370
778,126
3,283
36,256
738,587
759,739
604,550
204,955
431,447
35,277
3%, 170
145,125
2,918,973
2,898,152
2,896,934
2,871,150
2,960,775
2,934,127
2,973,623
2,898,215
2,923,942
287,473
288,729
289,832
289,802
289,175
292,598
292,257
292,828
289,778
DOMESTICALLY CHARTERED COMMERCIAL BANKS4
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
Assets
Loans and securities
Investment securities
U.S. government securities
Other
Trading account assets
U.S. government securities
Other securities
Other trading account assets
Total loans
Interbank loans
Loans excluding interbank
Commercial and industrial
Real estate
Revolving home equity
Other
Individual
All other
Total cash assets
Balances with Federal Reserve Banks
Cash in vault
Demand balances at U.S. depository institutions .
Cash items
Other cash assets
Other assets
64 Total assets
65
66
67
68
69
70
71
72
73
74
75
76
Liabilities
Total deposits
Transaction accounts
Demand, U.S. government
Demand, depository institutions
Other demand and all checkable deposits
Savings deposits (excluding checkable)
Small time deposits
Time deposits over $100,000
Borrowings
Treasury tax and loan notes
Other
Other liabilities
77 Total liabilities
78
Residual (assets less liabilities) 3
1. Excludes assets and liabilities of international banking facilities.
2. Includes insured domestically chartered commercial banks, agencies and
branches of foreign banks, Edge Act and agreement corporations, and New York
State investment corporations majority owned by foreign banks. Data are estimates
for the last Wednesday of the month based on a sample of weekly reporting
foreign-related and domestic institutions and quarter-end condition reports.
28,180
216,611
3. This balancing item is not intended as a measure of equity capital for use in
capital-adequacy analysis.
4. Includes all member banks and insured nonmember banks. Loans and
securities data are estimates for the last Wednesday of the month based on a
sample of weekly reporting banks and quarter-end condition reports.
A22
1.27
DomesticNonfinancialStatistics • December 1993
ASSETS A N D LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL B A N K S
Millions of dollars, Wednesday figures
1993
Account
Aug. 4
Aug. 11
Aug. 18
Aug. 25
Sept. 1
Sept. 8
Sept. 15
Sept. 22
Sept. 29
ASSETS
1 Cash and balances due from depository institutions
2 U.S. Treasury and government securities
3 Trading account
4 Investment account
5
Mortgage-backed securities'
All others, by maturity
One year or less
6
One year through five years
7
More than five years
8
9 Other securities
10 Trading account
11 Investment account
State and political subdivisions, by maturity
12
One year or less
13
14
More than one year
15
Other bonds, corporate stocks, and securities
16 Other trading account assets
106,925
302,136
28,975
273,161
87,578
103,659
300,574
26,640
273,934
87,353
107,047
304,744
29,432
275,312
86,800
101,589
2%,879
25,650
271,229
86,236
135,356
305,747
28,814
276,933
86,712
120,015
305,009
27,841
277,168
86,613
135,185
305,666
28,292
277,374
85,766
110,278
304,336
25,858
278,479
87,263
115,939
301,852
26,905
274,946
87,215
47,964
70,480
67,140
56,898
2,800
54,098
19,467
3,487
15,980
34,631
12,258
48,114
70,694
67,773
57,049
2,734
54,315
19,574
3,522
16,052
34,742
12,094
50,883
70,573
67,057
57,322
2,851
54,472
19,744
3,560
16,184
34,727
13,136
50,269
69,923
64,802
56,843
2,628
54,216
19,752
3,574
16,178
34,464
12,823
50,905
70,517
68,799
57,156
2,832
54,325
19,687
3,548
16,139
34,638
13,039
50,735
71,487
68,333
57,195
2,772
54,423
19,742
3,619
16,123
34,681
12,952
50,761
72,847
68,000
56,939
2,614
54,326
19,810
3,655
16,154
34,516
12,763
51,517
70,629
69,070
56,549
2,717
53,831
19,919
3,701
16,218
33,912
12,650
49,328
70,226
68,177
56,277
2,629
53,647
19,997
3,761
16,236
33,650
13,265
Federal funds sold2
To commercial banks in the United States
To nonbank brokers and dealers
To others 3
Other loans and leases, gross
Commercial and industrial
Bankers acceptances and commercial paper
All other
U.S. addressees
Non-U.S. addressees
Real estate loans
Revolving, home equity
All other
To individuals for personal expenditures
To financial institutions
Commercial banks in the United States
Banks in foreign countries
Nonbank financial institutions
For purchasing and carrying securities
To finance agricultural production
To states and political subdivisions
To foreign governments and official institutions
All other loans
Lease-financing receivables
LESS: Unearned income
Loan and lease reserve 5
Other loans and leases, net
Other assets
91,587
56,407
30,389
4,791
991,250
273,749
3,375
270,374
268,771
1,603
402,739
43,666
359,073
189,712
39,682
14,580
4,242
20,861
15,505
5,850
13,664
1,285
24,084
24,981
2,096
35,728
953,426
172,891
85,317
51,264
30,081
3,972
986,923
271,2%
3,388
267,908
266,279
1,629
404,323
43,717
360,606
189,495
37,074
13,823
2,516
20,735
15,966
5,831
13,688
1,336
22,956
24,959
2,104
35,794
949,026
170,625
87,870
53,219
30,338
4,314
983,851
270,334
3,417
266,916
265,284
1,632
401,720
44,164
357,556
190,486
36,082
13,865
2,168
20,049
16,271
5,803
13,707
1,142
23,379
24,927
2,053
35,782
946,015
167,281
86,848
52,207
30,391
4,250
981,326
268,378
3,283
265,095
263,514
1,581
400,307
44,138
356,169
191,122
35,588
13,504
2,415
19,669
17,428
5,778
13,679
1,210
22,890
24,946
2,048
35,761
943,517
162,849
93,973
57,861
31,779
4,333
991,789
270,071
3,308
266,763
265,181
1,582
403,003
44,220
358,782
191,526
37,361
13,580
2,869
20,912
18,955
5,802
13,587
1,285
25,183
25,017
2,031
35,743
954,015
169,057
86,414
49,600
31,7%
5,018
987,173
267,690
3,230
264,459
262,952
1,507
404,132
44,150
359,981
190,906
36,594
12,556
2,678
21,360
17,848
5,800
13,442
1,272
24,480
25,009
2,018
35,968
949,188
170,%2
102,655
60,424
36,209
6,022
993,324
271,234
3,190
268,045
266,529
1,515
403,841
44,173
359,668
191,707
35,691
12,207
2,500
20,984
19,6%
5,775
13,380
1,318
25,631
25,050
2,007
36,017
955,299
171,368
82,726
45,736
31,301
5,689
988,109
270,683
3,071
267,612
266,084
1,528
401,2%
44,050
357,246
192,364
35,964
13,510
2,304
20,149
17,590
5,736
13,448
1,259
24,698
25,071
2,055
35,924
950,130
166,586
87,655
52,365
29,664
5,626
995,412
271,309
2,829
268,480
266,958
1,522
403,254
44,090
359,164
193,458
36,949
13,365
2,414
21,170
19,294
5,7%
13,398
1,499
25,288
25,167
2,033
35,604
957,776
167,347
1,6%, 120
1,678,344
1,683,415
1,661,348
1,728,343
1,701,735
1,739,875
1,683,255
1,700,110
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45 Total assets
Footnotes appear on the following page.
Weekly Reporting Commercial
1.27
Banks
A23
ASSETS A N D LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued
Millions of dollars, Wednesday figures
Aug. 4
Aug. 11
Aug. 18
Aug. 25
Sept. 1
Sept. 8
Sept. 15
Sept. 22
Sept. 29
1,120,441
280,691
230,291
50,401
9,276
2,295
22,478
5,315
801
10,236
122,554
717,1%
693,335
23,861
18,932
2,694
1,922
313
1,111,225
274,039
228,027
46,012
8,374
1,821
20,248
5,289
716
9,564
119,861
717,325
693,365
23,960
19,044
2,705
1,898
312
1,102,743
274,219
225,372
48,848
8,815
1,763
21,249
4,608
721
11,691
119,366
709,158
685,488
23,670
19,069
2,671
1,614
317
1,094,028
269,278
221,587
47,691
8,390
1,806
22,670
5,182
627
9,016
117,887
706,863
682,%3
23,900
19,257
2,672
1,658
313
1,144,6%
312,046
253,265
58,781
9,857
3,954
27,578
5,084
632
11,677
122,574
710,076
686,727
23,349
18,863
2,633
1,544
308
1,128,826
291,209
239,411
51,798
7,952
1,866
24,929
5,451
689
10,911
123,429
714,188
691,110
23,078
18,919
2,317
1,514
328
1,163,389
330,484
255,717
74,767
9,242
20,438
28,668
5,503
629
10,288
123,601
709,305
686,906
22,399
18,262
2,310
1,494
333
1,090,582
272,075
223,077
48,998
8,932
2,882
20,960
5,760
618
9,845
118,063
700,444
678,149
22,2%
18,172
2,310
1,482
332
1,103,563
290,592
237,155
53,438
8,672
2,148
22,406
5,559
556
14,0%
117,095
695,875
673,866
22,009
18,185
1,991
1,502
330
312,968
0
15,094
297,874
307,224
0
18,417
288,807
319,779
30
15,400
304,349
301,370
0
16,524
284,846
317,547
0
21,442
2%, 105
307,965
0
9,165
298,800
312,500
0
10,881
301,619
328,700
0
29,860
298,840
329,202
0
30,306
298,8%
LIABILITIES
46 Deposits
47 Demand deposits
48
Individuals, partnerships, and corporations
49
Other holders
50
States and political subdivisions
51
U.S. government
52
Depository institutions in the United States . . .
53
Banks in foreign countries
54
Foreign governments and official institutions . .
55
Certified and officers' checks
56 Transaction balances other than demand deposits .
57 Nontransaction balances
58
Individuals, partnerships, and corporations
59
Other holders
60
States and political subdivisions
61
U.S. government
62
Depository institutions in the United States . . .
63
Foreign governments, official institutions, and banks .
64 Liabilities for borrowed money 5
65 Borrowings from Federal Reserve Banks
66 Treasury tax and loan notes
67 Other liabilities for borrowed money6
68 Other liabilities (including subordinated notes and
debentures)
69 Total liabilities
70 Residual (total assets less total liabilities)7
71
72
73
74
75
76
77
MEMO
Total loans and leases, gross, adjusted, plus securities
Time deposits in amounts of $100,000 or more
Loans sold outright to affiliates9
Commercial and industrial
Other
Foreign branch credit extended to U.S. residents'"...
Net owed to related institutions abroad
110,304
107,699
107,784
112,589
112,565
110,488
109,140
109,118
113,858
1,543,713
1,526,148
1,530,306
1,507,987
1,574,809
1,547,279
1,585,029
1,528,400
1,546,623
152,407
152,196
153,109
153,362
153,534
154,456
154,846
154,855
153,487
1,383,141
104,353
821
402
419
21,843
-18,439
1,376,870
103,481
816
401
415
21,653
-20,863
1,379,839
102,147
814
400
414
21,936
-18,220
1,369,008
102,265
814
400
414
21,552
-8,666
1,390,264
101,747
789
402
387
21,299
-14,014
1,386,586
102,128
786
402
384
21,825
-17,440
1,398,716
101,191
786
402
384
21,512
-16,447
1,385,123
99,057
786
402
385
21,303
-10,531
1,388,730
%,795
828
401
427
20,688
-9,715
1. Includes certificates of participation, issued or guaranteed by agencies of the
U.S. government, in pools of residential mortgages.
2. Includes securities purchased under agreements to resell.
3. Includes allocated transfer risk reserve.
4. Includes negotiable order of withdrawal accounts (NOWs), automatic transfer service (ATS), and telephone and preauthorized transfers of savings deposits.
5. includes borrowings only from other than directly related institutions.
6. Includes federal funds purchased and securities sold under agreements to
repurchase.
7. This balancing item is not intended as a measure of equity capital for use in
capital-adequacy analysis.
8. Excludes loans to and federal funds transactions with commercial banks in
the United States.
9. Affiliates include a bank's own foreign branches, nonconsolidated nonbank
affiliates of the bank, the bank's holding company (if not a bank), and nonconsolidated nonbank subsidiaries of the holding company.
10. Credit extended by foreign branches of domestically chartered weekly
reporting banks to nonbank U.S. residents. Consists mainly of commercial and
industrial loans, but includes an unknown amount of credit extended to other than
nonfinancial businesses.
NOTE. Data that formerly appeared in table 1.28, Assets and Liabilities of Large
Weekly Reporting Commercial Banks in New York City, can be obtained from the
Board's H.4.2 (504) weekly statistical release. For ordering address, see inside
front cover.
A24
1.28
DomesticNonfinancialStatistics • December 1993
LARGE WEEKLY REPORTING U.S. BRANCHES A N D AGENCIES OF FOREIGN B A N K S
Liabilities 1
M i l l i o n s of dollars, W e d n e s d a y
Assets and
figures
1993
Account
Aug. 4
Aug. 11
Aug. 18
Aug. 25
Sept. 1
Sept. 8
Sept. 15
Sept. 22
Sept. 29
ASSETS
1 Cash and balances due from depository
institutions
2 U.S. Treasury and government agency
securities
3 Other securities
4 Federal funds sold 1
5
To commercial banks in the United States . . .
6
To others 2
7 Other loans and leases, gross
8
Commercial and industrial
9
Bankers acceptances and commercial
paper
10
All other
11
U.S. addressees
12
Non-U.S. addressees
13
Loans secured by real estate
14
To financial institutions
Commercial banks in the United States..
15
16
Banks in foreign countries
17
Nonbank financial institutions
18
For purchasing and carrying securities
19
To foreign governments and official
institutions
20
All other
21 Other assets (claims on nonrelated parties) . .
18,578
18,029
18,057
18,157
18,0%
18,325
18,324
18,018
18,797
34,469
8,627
28,367
5,913
22,454
161,714
97,719
32,277
8,698
25,129
6,099
19,030
160,915
98,357
34,084
8,604
24,059
6,027
18,032
161,010
98,084
33,723
8,243
22,056
4,259
17,797
161,226
96,604
33,571
8,406
23,073
5,462
17,612
161,705
95,979
33,267
8,311
21,770
4,871
16,899
158,976
94,904
33,324
8,382
26,035
7,295
18,741
161,693
95,759
33,405
8,372
25,025
6,550
18,474
160,633
95,454
32,542
8,497
26,975
7,791
19,184
159,255
95,347
2,800
94,919
91,710
3,209
30,937
26,380
5,419
2,322
18,639
3,817
2,795
95,562
92,270
3,293
30,835
25,980
5,327
2,097
18,557
3,016
2,879
95,204
91,902
3,303
30,720
26,416
5,321
2,293
18,802
2,946
2,752
93,851
90,529
3,322
31,562
26,745
5,273
2,191
19,282
3,508
2,776
93,203
89,876
3,327
31,516
26,281
5,248
2,208
18,825
5,175
2,708
92,1%
88,835
3,360
31,500
25,094
5,253
2,202
17,640
4,099
2,664
93,095
89,742
3,353
31,403
25,629
5,411
2,288
17,930
5,371
2,616
92,838
89,506
3,332
31,301
25,157
5,219
2,051
17,887
5,070
2,466
92,881
89,565
3,316
31,226
23,545
5,628
1,946
15,971
5,233
395
2,467
32,268
390
2,337
32,062
411
2,433
31,352
412
2,394
31,113
435
2,319
31,060
418
2,959
31,814
467
3,065
31,553
472
3,178
30,764
497
3,407
32,466
309,383
302,055
302,468
300,233
299,435
297,234
304,327
299,665
302,511
95,274
4,395
93,629
4,083
93,261
4,008
94,332
4,163
90,944
4,589
90,850
4,530
92,160
4,991
91,297
5,230
93,056
5,706
3,290
1,105
90,879
3,097
985
89,546
3,161
847
89,253
3,301
863
90,169
3,403
1,186
86,355
3,712
818
86,320
3,856
1,135
87,169
3,878
1,351
86,068
4,260
1,445
87,350
62,969
27,911
61,237
28,309
61,017
28,236
62,124
28,045
59,466
26,888
60,054
26,267
61,263
25,906
60,438
25,629
60,570
26,780
87,563
51,458
82,716
46,956
77,645
41,105
78,555
40,473
80,645
41,844
76,788
38,064
86,750
48,182
78,680
39,112
76,345
38,009
16,309
35,149
36,106
13,249
33,707
35,760
9,770
31,335
36,540
12,960
27,513
38,081
13,633
28,211
38,801
11,291
26,774
38,723
19,563
28,619
38,568
9,475
29,638
39,568
12,027
25,982
38,336
6,892
29,214
31,202
6,321
29,439
29,389
6,7%
29,744
29,241
5,682
32,399
29,494
4,856
33,945
29,319
4,380
34,343
29,581
4,884
33,684
29,000
4,360
35,208
29,407
4,519
33,817
30,258
38 Total liabilities6
309,383
302,055
302,468
300,233
299,435
297,234
304,327
299,665
302,511
MEMO
39 Total loans (gross) and securities, adjusted 7 ..
40 Net owed to related institutions abroad
221,845
69,982
215,594
71,377
216,409
77,019
215,717
72,138
216,045
75,003
212,200
75,244
216,729
71,403
215,665
76,833
213,850
78,872
22 Total assets3
LIABILITIES
23 Deposits or credit balances owed to other
than directly-related institutions
24 Demand deposits 4
Individuals, partnerships, and
25
corporations
26
Other
27 Nontransaction accounts
28
Individuals, partnerships, and
corporations
29
Other
30 Borrowings from other than directlyrelated institutions . ,
31 Federal funds purchased
32
From commercial banks in the
United States
33
From others
34 Other liabilities for borrowed money
35
To commercial banks in the
United States
36
To others
37 Other liabilities to nonrelated parties
1. Includes securities purchased under agreements to resell.
2. Includes transactions with nonbank brokers and dealers in securities.
3. Includes net due from related institutions abroad for U.S. branches and
agencies of foreign banks having a net "due f r o m " position.
4. Includes other transaction deposits.
5. Includes securities sold under agreements to repurchase.
6. Includes net owed to related institutions abroad for U.S. branches and
agencies of foreign banks having a net " d u e t o " position.
7. Excludes loans to and federal funds transactions with commercial banks in
the United States.
Financial Markets
A25
1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
Year ending December
1993
Item
1988
1989
1990
1991
1992
Mar.
Apr.
May
June
July
Aug.
Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers
Financial companies'
Dealer-placed paper
Total
Bank-related (not seasonally
adjusted)
Directly placed paper4
4 Total
5 Bank-related (not seasonally
adjusted)
2
3
6 Nonfinancial companies
458,464
525,831
562,656
531,724
549,433
534,118
535,966
541,761
544,107
539,149
545,527
159,777
183,622
214,706
213,823
228,260
218,925
210,230
214,558
221,834
210,224
216,245
n.a.
172,093
1,248
5
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
194,931
210,930
200,036
183,379
172,813
171,959
175,384
174,558
171,479
170,192
43,155
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
150,794
158,733
157,189
103,756
n.a.
131,279
147,914
134,522
148,360
143,234
150,352
152,645
Bankers dollar acceptances (not seasonally adjusted)
7 Total
8
9
10
11
12
By holder
Accepting banks
Own bills
Bills bought from other banks
Federal Reserve Banks 7
Foreign correspondents
Others
By basis
13 Imports into United States
14 Exports from United States
15 All other
6
66,631
62,972
54,771
43,770
38,200
34,939
35,317
34,927
34,149
33,120
32,572
9,086
8,022
1,064
9,433
8,510
924
9,017
7,930
1,087
11,017
9,347
1,670
10,561
9,103
1,458
11,036
9,162
1,873
10,688
9,315
1,372
11,0%
9,786
1,310
11,568
10,236
1,333
11,422
10,140
1,282
12,370
10,663
1,707
1,493
56,052
1,066
52,473
918
44,836
1,739
31,014
1,276
26,364
1,108
22,795
909
23,720
690
23,141
613
21,%7
582
21,116
635
19,567
14,984
14,410
37,237
15,651
13,683
33,638
13,095
12,703
28,973
12,843
10,351
20,577
12,212
8,0%
17,893
11,129
7,304
16,506
10,746
7,629
16,942
10,274
7,809
16,844
10,066
7,650
16,433
10,149
7,673
15,299
10,422
7,534
14,616
1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales, personal, and mortgage financing; factoring, finance leasing, and other
business lending; insurance underwriting; and other investment activities.
2. Includes all financial-company paper sold by dealers in the open market.
3. Series were discontinued in January 1989.
4. As reported by financial companies that place their paper directly with
investors.
1.33 PRIME RATE CHARGED BY BANKS
5. Includes public utilities and firms engaged primarily in such activities as
communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.
6. Data on bankers dollar acceptances are gathered from approximately 100
institutions. The reporting group is revised every January.
7. In 1977 the Federal Reserve discontinued operations in bankers dollar
acceptances for its own account.
Short-Term Business Loans1
Percent per year
Average
rate
10.50
10.00
9.50
9.00
8.50
8.00
7.50
6.50
6.00
1990
1991
1992
10.01
8.46
6.25
1990—Jan. .
Feb.
Mar.
Apr.
May
June
July .
Aug.
Sept.
Oct.
Nov.
Dec.
10.11
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
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
Period
Average
rate
1991— Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
9.52
9.05
9.00
9.00
8.50
8.50
8.50
8.50
8.20
8.00
7.58
7.21
1992— Jan.
Feb.
Mar.
Apr.
May
6.50
6.50
6.50
6.50
6.50
Period
1992— June ..
July ...
Aug. ..
Sept. .
Oct. ..
Nov. .
Dec. ..
1993—
Feb. ..
July ...
Aug. ..
Sept. .
Oct.
size, based on the most recent Call Report. Data in this table also appear in the
Board's H.15 (519) weekly and G.13 (415) monthly statistical releases. For
ordering address, see inside front cover.
A26
1.35
DomesticNonfinancialStatistics • December 1993
INTEREST RATES
Money and Capital Markets
A v e r a g e s , percent p e r year; figures are a v e r a g e s o f b u s i n e s s d a y data u n l e s s o t h e r w i s e n o t e d
1993
1990
Item
1991
1993, week ending
1992
June
July
Aug.
Sept.
Aug. 27
Sept. 3
Sept. 10
Sept. 17
Sept. 24
MONEY MARKET INSTRUMENTS
1 Federal funds 1 - 2 - 3
2 Discount window borrowing 2,
5.69
5.45
3.52
3.25
3.04
3.00
3.06
3.00
3.03
3.00
3.09
3.00
2.98
3.00
3.08
3.00
2.99
3.00
3.03
3.00
3.12
3.00
8.15
8.06
7.95
5.89
5.87
5.85
3.71
3.75
3.80
3.19
3.25
3.38
3.15
3.20
3.35
3.14
3.18
3.33
3.14
3.16
3.25
3.11
3.14
3.27
3.14
3.16
3.27
3.12
3.13
3.22
3.14
3.15
3.24
3.15
3.16
3.26
8.00
7.87
7.53
5.73
5.71
5.60
3.62
3.65
3.63
3.12
3.16
3.16
3.08
3.12
3.15
3.08
3.13
3.16
3.07
3.09
3.11
3.03
3.11
3.15
3.07
3.11
3.13
3.05
3.09
3.10
3.07
3.09
3.11
3.08
3.09
3.11
7.93
7.80
5.70
5.67
3.62
3.67
3.16
3.28
3.12
3.26
3.10
3.23
3.07
3.17
3.08
3.20
3.08
3.18
3.06
3.16
3.08
3.18
3.08
3.17
8.15
8.15
8.17
5.82
5.83
5.91
3.64
3.68
3.76
3.13
3.21
3.36
3.10
3.16
3.34
3.09
3.14
3.32
3.09
3.12
3.24
3.09
3.14
3.27
3.09
3.13
3.26
3.08
3.11
3.22
3.09
3.12
3.26
3.10
3.11
3.24
8.16
5.86
3.70
3.21
3.17
3.14
3.08
3.13
3.11
3.06
3.08
3.06
7.50
7.46
7.35
5.38
5.44
5.52
3.43
3.54
3.71
3.07
3.20
3.39
3.04
3.16
3.33
3.02
3.14
3.30
2.95
3.06
3.22
3.00
3.10
3.24
2.99
3.09
3.21
2.96
3.06
3.18
2.96
3.07
3.24
2.93
3.06
3.26
7.51
7.47
7.36
5.42
5.49
5.54
3.45
3.57
3.75
3.10
3.23
3.40
3.05
3.15
3.42
3.05
3.17
3.30
2.%
3.06
3.27
3.02
3.12
3.30
3.02
3.11
n.a.
2.95
3.03
n.a.
2.98
3.06
n.a.
2.93
3.06
3.27
7.89
8.16
8.26
8.37
8.52
8.55
8.61
5.86
6.49
6.82
7.37
7.68
7.86
8.14
3.89
4.77
5.30
6.19
6.63
7.01
7.67
3.54
4.16
4.53
5.22
5.61
5.96
6.81
3.47
4.07
4.43
5.09
5.48
5.81
6.63
3.44
4.00
4.36
5.03
5.35
5.68
6.32
3.36
3.85
4.17
4.73
5.08
5.36
6.00
3.37
3.88
4.22
4.87
5.18
5.51
6.16
3.34
3.83
4.16
4.76
5.09
5.41
6.06
3.32
3.79
4.09
4.66
5.00
5.28
5.90
3.38
3.88
4.19
4.73
5.10
5.35
5.98
3.39
3.90
4.22
4.80
5.16
5.44
6.09
8.74
8.16
7.52
6.55
6.34
6.18
5.94
6.08
5.97
5.84
5.93
6.03
6.96
7.29
7.27
6.56
6.99
6.92
6.09
6.48
6.44
5.35
5.80
5.63
5.27
5.74
5.57
5.37
5.84
5.45
n.a.
n.a.
5.29
5.33
5.82
5.35
5.33
5.82
5.35
5.33
5.82
5.24
5.27
5.78
5.27
5.23
5.74
5.30
9.77
9.23
8.55
7.66
7.50
7.19
6.98
7.04
6.95
6.87
6.%
7.08
9.32
9.56
9.82
10.36
8.77
9.05
9.30
9.80
8.14
8.46
8.62
8.98
7.33
7.51
7.74
8.07
7.17
7.35
7.53
7.93
6.85
7.06
7.25
7.60
6.66
6.85
7.05
7.34
6.71
6.91
7.11
7.43
6.61
6.82
7.02
7.34
6.51
6.74
6.95
7.26
6.66
6.85
7.02
7.33
6.79
6.96
7.15
7.43
10.01
9.32
8.52
7.59
7.43
7.16
6.94
6.97
6.83
6.85
6.99
7.07
8.%
3.61
8.17
3.24
7.46
2.99
6.97
2.81
6.89
2.81
6.83
2.76
6.70
2.73
6.85
2.73
6.85
2.71
6.79
2.75
6.76
2.72
6.76
2.76
paper3,5,6
3
4
5
Commercial
1-month
3-month
6-month
6
7
8
Finance paper, directly
1-month
3-month
6-month
9
10
Bankers acceptances3-5*8
3-month
6-month
11
12
13
Certificates qf deposit,
marker'9
1-month
3-month
6-month
placed3,5,7
secondary
14 Eurodollar deposits, 3-month 3,10
18
19
20
U.S. Treasury bills
Secondary market ,5
3-month
6-month
1-year
Auction average • •
3-month
6-month
1-year
21
22
23
24
25
26
27
Constant
maturities12
1-year
2-year
3-year
5-year
7-year
10-year
30-year
13
16
17
8.10
6.98
U.S. TREASURY NOTES AND BONDS
Composite
28 More than 10 years (long-term)
STATE AND LOCAL NOTES AND BONDS
Moody's series13
29
30 Baa
31 Bond Buyer series
CORPORATE BONDS
32 Seasoned issues, all industries 15
33
34
35
36
Rating
Aaa
Aa
A
Baa
group
37 A-rated, recently offered utility bonds 16
MEMO
Dividend-price
ratio
38 Preferred stocks
39 Common stocks
1. The daily effective federal funds rate is a weighted average of rates on
trades through New York brokers.
2. Weekly figures are averages of seven calendar days ending on Wednesday
of the current week; monthly figures include each calendar day in the month.
3. Annualized using a 360-day year or bank interest.
4. Rate for the Federal Reserve Bank of New York.
5. Quoted on a discount basis.
6. An average of offering rates on commercial paper placed by several leading
dealers for firms whose bond rating is AA or the equivalent.
7. An average of offering rates on paper directly placed by finance companies.
8. Representative closing yields for acceptances of the highest-rated money
center banks.
9. An average of dealer offering rates on nationally traded certificates of
deposit.
10. Bid rates for Eurodollar deposits at 11:00 a.m. London time. Data are for
indication purposes only.
11. Auction date for daily data; weekly and monthly averages computed on an
issue-date basis.
12. Yields on actively traded issues adjusted to constant maturities. Source:
U.S. Treasury.
13. General obligations based on Thursday figures; Moody's Investors Service.
14. General obligations only, with twenty years to maturity, issued by twenty
state and local governmental units of mixed quality. Based on figures for
Thursday.
15. Daily figures from Moody's Investors Service. Based on yields to maturity
on selected long-term bonds.
16. Compilation of the Federal Reserve. This series is an estimate of the yield
on recently offered, A-rated utility bonds with a thirty-year maturity and five
years of call protection. Weekly data are based on Friday quotations.
17. Standard & Poor's corporate series. Preferred stock ratio is based on a
sample of ten issues: four public utilities, four industrials, one financial, and one
transportation. Common stock ratio is based on the 500 stocks in the price index.
NOTE. Data in this table also appear in the Board's H.15 (519) weekly and G.13
(415) monthly statistical releases. For ordering address, see inside front cover.
Financial Markets
1.36
STOCK MARKET
A27
Selected Statistics
1993
Indicator
1990
1991
1992
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Prices and trading volume (averages of daily figures)
Common stock prices (indexes)
1 New York Stock Exchange
(Dec. 31, 1965 = 50)
2
Industrial
3 Transportation
Utility
4
5
Finance
183.66
226.06
158.80
90.72
133.21
206.35
258.16
173.97
92.64
150.84
229.00
284.26
201.02
99.48
179.29
239.75
292.11
221.00
105.52
203.38
243.41
294.40
226.96
109.45
209.93
248.12
298.75
229.42
112.53
217.01
244.72
292.19
237.97
113.78
216.02
246.02
297.83
237.80
111.21
209.40
247.16
298.78
234.30
113.27
209.75
247.85
295.34
238.30
116.27
218.89
251.93
298.83
250.82
118.72
224.96
254.86
300.92
247.74
122.32
229.35
6 Standard & Poor's Corporation
(1941-43 = 10)1
335.01
376.20
415.75
435.40
441.76
450.15
443.08
445.25
448.06
447.29
454.13
459.24
7 American Stock Exchange
(Aug. 31, 1973 = 50?
338.32
360.32
391.28
402.75
409.39
418.56
418.54
429.72
436.13
434.99
444.75
454.91
156,359
13,155
179,411
12,486
202,558
14,171
266,011
17,184
288,540
18,154
251,170
16,150
279,778
15,521
255,843
20,433
250,230
17,753r
247,574
17,744r
247,324
19,352
261,770
18,889
Volume of trading (thousands of shares)
8 New York Stock Exchange
9 American Stock Exchange
Customer financing (millions of dollars, end-of-period balances)
10 Margin credit at broker-dealers
28,210
36,660
43,990
44,020
44,290
45,160
47,420
48,630
49,550
49,080
52,760
53,700
Free credit balances at brokers4
11 Margin accounts 5
12 Cash accounts
8,050
19,285
8,290
19,255
8,970
22,510
8,980
20,360
9,790
22,190
9,650
21,395
9,805
21,450
9,560
21,610
9,820
22,625
9,585
21,475
9,480
21,915
10,030
23,170
Margin requirements (percent of market value and effective date) 5
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. Effective July 1976, includes a new financial group, banks and insurance
companies. With this change the index includes 400 industrial stocks (formerly
425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40
financial.
2. On July 5,1983, the American Stock Exchange rebased its index, effectively
cutting previous readings in half.
3. Since July 1983, under the revised Regulation T, margin credit at brokerdealers has included credit extended against stocks, convertible bonds, stocks
acquired through the exercise of subscription rights, corporate bonds, and
government securities. Separate reporting of data for margin stocks, convertible
bonds, and subscription issues was discontinued in April 1984.
4. Free credit balances are amounts in accounts with no unfulfilled commitments to brokers and are subject to withdrawal by customers on demand.
5. New series since June 1984.
6. These requirements, stated in regulations adopted by the Board of Governors pursuant to the Securities Exchange Act of 1934, limit the amount of credit
that can be used to purchase and carry "margin securities" (as defined in the
regulations) when such credit is collateralized by securities. Margin requirements
Jan. 3, 1974
50
50
50
on securities other than options are the difference between the market value (100
percent) and the maximum loan value of collateral as prescribed by the Board.
Regulation T was adopted effective Oct. 15, 1934; Regulation U, effective May 1,
1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective Nov. 1,
1971.
On Jan. 1, 1977, the Board of Governors for the first time established in
Regulation T the initial margin required for writing options on securities, setting
it at 30 percent of the current market value of the stock underlying the option. On
Sept. 30, 1985, the Board changed the required initial margin, allowing it to be the
same as the option maintenance margin required by the appropriate exchange or
self-regulatory organization; such maintenance margin rules must be approved by
the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC
approved new maintenance margin rules, permitting margins to be the price of the
option plus 15 percent of the market value of the stock underlying the option.
Effective June 8, 1988, margins were set to be the price of the option plus 20
percent of the market value of the stock underlying the option (or 15 percent in the
case of stock-index options).
A28
1.38
D o m e s t i c Financial Statistics • D e c e m b e r 1993
FEDERAL FISCAL A N D FINANCING OPERATIONS
Millions of dollars
Fiscal year
Calendar year
Type of account or operation
1993
1991
U.S. budget1
1 Receipts, total
2 On-budget
3 Off-budget
4 Outlays, total
5 On-budget
6 Off-budget
7 Surplus or deficit ( - ) , total
8
On-budget
9 Off-budget
Source of financing (total)
10 Borrowing from the public
11 Operating cash (decrease, or increase ( - ) ) . . .
12 Other 1
MEMO
13 Treasury operating balance (level, end of
period)
14 Federal Reserve Banks
15 Tax and loan accounts
1992
1993
May
June
July
Aug.
Sept.
1,054,264
760,380
293,885
1,323,785
1,082,098
241,687
-269,521
-321,719
52,198
1,090,453
788,027
302,426
l,380,794rr
l,128,455
252,339r
-290,340 r
—340,428r
50,087r
1,153,175
841,241
311,934
1,408,122
1,142,110
266,012
-254,948
-300,869
45,922
132,021r
96,312r
35,709
123,930r
101,757r
22,174
8,091
-5,445
13,535
70,640r
44,518r
26,122
107,603rr
83,208
24,395
-36,%3
-38,690
1,727
128,568r
98,662r
29,906
117,469rr
103,475
13,994
11,099
-4,813
15,912
80,633r
57,146r
23,487
120,21 l r
%,245 r
23,%5
-39,577
-39,099
-478
86,741r
62,060r
24,681
109,8191r
84,953
24,867
—23,078r
-22,893 r
-186
127,469
98,609
28,860
119,168
91,039
28,130
8,300
7,570
730
276,802
-1,329
-5,952
310,918
-17,305
-3,273 r
248,619
6,283
46
5,464
-18,945
5,390
30,832
20,1%
-14,065
24,757
-40,288
4,432
1,055
32,447
6,075
54,301
-12,652
—18,571r
-9,346
-11,713
12,759
41,484
7,928
33,556
58,789
24,586
34,203
52,506
17,289
35,217
40,4%
7,273
33,223
20,300
5,787
14,514
60,588
28,386
32,202
28,141
5,818
22,324
40,793
7,975
32,818
52,506
17,289
35,217
1. In accordance with the Balanced Budget and Emergency Deficit Control Act
of 1985, all former off-budget entries are now presented on-budget. Federal
Financing Bank (FFB) activities are now shown as separate accounts under the
agencies that use the FFB to finance their programs. The act has also moved two
social security trust funds, (federal old-age survivors insurance and federal
disability insurance) off-budget. The Postal Service is included as an off-budget
item in the Monthly Treasury Statement beginning in 1990.
2. Includes special drawing rights (SDRs); reserve position on the U.S. quota
in the International Monetary Fund (IMF); loans to the IMF; other cash and
Apr.
monetary assets; accrued interest payable to the public; allocations of SDRs;
deposit funds; miscellaneous liability (including checks outstanding) and asset
accounts; seigniorage; increment on gold; net gain or loss for U.S. currency
valuation adjustment; net gain or loss for IMF loan-valuation adjustment; and
profit on sale of gold.
SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of
Receipts and Outlays of the U.S. Government and Office of Management and
Budget, Budget of the U.S. Government.
Federal
1.39
Finance
A29
U.S. BUDGET RECEIPTS A N D OUTLAYS 1
M i l l i o n s o f dollars
Calendar year
Fiscal year
1993
1991
Source or type
1992r
1993
H2
HI
July
Aug.
Sept.
RECEIPTS
1 AU sources
2 Individual income taxes, net
3
Withheld
4
Presidential Election Campaign Fund .
5
Nonwithheld
6
Refunds
Corporation income taxes
7
Gross receipts
8
Refunds
9 Social insurance taxes and contributions,
net
10
Employment taxes and
contributions
11
Self-employment taxes and
contributions
12
Unemployment insurance
13
Other net receipts
14
15
16
17
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts 5
1,090,453
1,153,175
519,165
560,318
540,472 r
593,200 r
80,633 r
86,741
127,469
475,964
408,352
30
149,342
81,760
509,680
430,427
28
154,772
75,546
234,939
210,552
246,938 r
215,591
10
39,284
7,937 r
255,556 r
210,066
25
113,482
67,468
37,483 r
36,396
2
2,759
1,668
39,440
36,751
55,653
31,991
33,296
8,910
236,576
198,868
20
110,995
73,308
3,928
1,235
25,579
1,918
117,951
17,680
131,548
14,027
54,016
8,649
61,682
9,403
58,022
7,219
69,044
7,198
3,848
1,154
2,422
479
25,909
1,398
413,689
428,300
186,839
224,569
192,599
227,177
32,284
36,657
37,768
385,491
396,939
175,802
208,110
180,758
208,776
30,156
31,447
36,908
24,421
23,410
4,788
20,604
26,556
4,805
3,306
8,721
2,317
20,434
14,070
2,389
3,988
9,397
2,445
16,270
16,074
2,326
104
1,709
419
0
4,810
400
4,231
413
447
45,569
17,359
11,143
26,459
48,057
12,577
18,239
24,429
8,694
5,507
13,390
22,389
8,146
5,701
10,658
23,456
9,497
5,733
ll,446 r
23,398
8,860
6,494
9,867
4,214
1,761
944
1,252
4,295
1,828
1,150
1,429
4,385
1,646
1,049
2,456
1,380,794
1,408,122
694,345
704,266
723,515'
673,328 r
120,211r
109,819
119,168
25,916
1,241
1,521
198
1,421
206
21,278
493
1,556
400
1,487
171
24,903
1,556
1,388
-276
1,907
205
-2,855
3,270
876
3,003
3,760
1,168
18,802
1
0
0
OUTLAYS
18 All types
19
20
21
22
23
24
National defense
International affairs
General science, space, and technology .
Energy
Natural resources and environment
Agriculture
298,350
16,107
16,409
4,499
20,025
15,205
290,590
17,175
17,055
4,445
20,088
20,257
147,669
7,691
8,472
1,698
11,130
7,418
147,065
8,540
7,951
1,442
8,594
7,526
155,501
9,911
8,521
3,109
ll,467 r
8,881
140,535
6,565
7,996
2.462
8,588
11,824
25
26
27
28
Commerce and housing credit
Transportation
Community and regional development . .
Education, training, employment, and
social services
10,118
33,333
6,838
-23,532
35,238
10,395
36,534
17,074
3,783
15,615
15,651
3,903
-7,694r
18,421r
4,540
-15,112
16,077
4,935
-2,014
3,250
962
45,250
48,872
21,114
23,767
21,026r
23,983
3,113
29 Health
30 Social security and Medicare
31 Income security
89,497
406,569
196,891
99,249
435,137 r
207,933
41,459
193,098
87,693
44,164
205,500
104,537
47,232 r
232,109
98,579 r
49,882
195,933
108,559
8,023
37,670
18,665
8,632
36,334
14,925
9,080
36,697
15,696
32
33
34
35
36
34,133
14,426
12,945
199,439
-39,280
35,715
14,983
13,039
198,870
-37,386
17,425
6,574
6,794
99,149
-20,436
15,597
7,435
5,050
100,161
-18,229
18,561
7,238 r
8,226 r
98,709*
-20,914
16,385r
7.463
5,205
99,635
-17,035
4,289
1,350
340
17,159
-3,094
2,063
1,122
848
17,473
-3,187
3,010
1,415
1,712
15,440
-5,823
Veterans benefits and services
Administration of justice
General government
Net interest 6
Undistributed offsetting receipts
1. Functional details do not sum to total outlays for calendar year data because
revisions to monthly totals have not been distributed among functions. Fiscal year
total for outlays does not correspond to calendar year data because revisions from
the Budget have not been fully distributed across months.
2. Old-age, disability, and hospital insurance, and railroad retirement accounts.
3. Old-age, disability, and hospital insurance.
4. Federal employee retirement contributions and civil service retirement and
disability hind.
4,326
5. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts.
6. Includes interest received by trust funds.
7. Consists of rents and royalties for the outer continental shelf and U . S .
government contributions for employee retirement.
SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of
Receipts and Outlays of the U.S. Government, and the U.S. Office of Management and Budget, Budget of the U.S. Government, Fiscal Year 1994.
A30
1.40
DomesticNonfinancialStatistics • December 1993
FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars, end of month
1991
1992
1993
Item
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
1 Federal debt outstanding
3,683
3,820
3,897
4,001
4,083
4,196
4,250
4,373
n.a. r
2 Public debt securities
3 Held by public
4 Held by agencies
3,665
2,746
920
3,802
2,833
969
3,881
2,918
964
3,985
2,977
1,008
4,065
3,048
1,016
4,177
3,129
1,048
4,231
3,188
1,043
4,352
3,252
1,100
4,412r
n.a. r
n.a. r
18
18
0
19
19
0
16
16
0
16
16
0
18
18
0
19
19
0
20
20
0
21
21
0
n.a. r
n.a."r
n.a.
3,569
3,707
3,784
3,891
3,973
4,086
4,140
4,256
4,316r
9 Public debt securities
10 Other debt 1
3,569
0
3,706
0
3,783
0
3,890
0
3,972
0
4,085
0
4,139
0
4,256
0
4,315r
o"
MEMO
11 Statutory debt limit
4,145
4,145
4,145
4,145
4,145
4,145
4,145
4,370
4,900"
5 Agency securities
6 Held by public
7 Held by agencies
8 Debt subject to statutory limit
1. Consists of guaranteed debt of U.S. Treasury and other federal agencies,
specified participation certificates, notes to international lending organizations,
and District of Columbia stadium bonds.
1.41
GROSS PUBLIC DEBT OF U.S. TREASURY
SOURCES. U.S. Department of the Treasury, Monthly Statement of the Public
Debt of the United States and Treasury Bulletin.
Types and Ownership
Billions of dollars, end of period
1992
Type and holder
1 Total gross public debt
2
3
4
5
6
7
8
9
10
11
12
13
14
By type
Interest-bearing
Marketable
Bills
Notes
Bonds
Nonmarketable 1
State and local government series
Foreign issues 2
Government
Public
Savings bonds and notes
Government account series3
Non-interest-bearing
By holder 4
15 U.S. Treasury and other federal agencies and trust funds
16 Federal Reserve Banks
17 Private investors
18 Commercial banks
19 Money market funds
20 Insurance companies
21 Other companies
22 State and local treasuries
Individuals
Savings bonds
23
24
Other securities
Foreign and international
25
Other miscellaneous investors
26
1989
1991
1993
1992
Q4
Q1
Q2
Q3
2,953.0
3,364.8
3,801.7
4,177.0
4,177.0
4,230.6
4,352.0
4,411.5
2,931.8
1,945.4
430.6
1,151.5
348.2
986.4
163.3
6.8
6.8
.0
115.7
695.6
21.2
3,362.0
2,195.8
527.4
1,265.2
388.2
1,166.2
160.8
43.5
43.5
.0
124.1
813.8
2.8
3,798.9
2,471.6
590.4
1,430.8
435.5
1,327.2
159.7
41.9
41.9
.0
135.9
959.2
2.8
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
4,173.9
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
4,227.6
2,807.1
659.9
1,652.1
480.2
1,420.5
151.6
37.0
37.0
.0
161.4
1,040.0
3.0
4,349.0
2,860.6
659.3
1,698.7
487.6
1,488.4
152.8
43.0
43.0
.0
164.4
1,097.8
2.9
4,408.6
2,904.9
658.4
1,734.2
497.4
1,503.7
149.5
42.5
42.5
.0
167.0
1,114.3
2.9
707.8
228.4
2,015.8
164.9
14.9
125.1
93.4
487.5
828.3
259.8
2,288.3
171.5
45.4
142.0
108.9
490.4
968.7
281.8
2,563.2
233.4
80.0
168.7
150.8
520.3
1,047.8
302.5
2,839.9
294.0"
79.4"
190.3
192.5
534.8
1,047.8
302.5
2,839.9
294.0"
79.4"
190.3
192.5
534.8
1,043.2
305.2
2,895.0
310.0"
77.7"
194.0
199.3
541.0"
1,099.8
328.2
2,938.4
322.0
75.8
198.0
206.1
546.0
117.7
98.7
392.9
520.7
126.2
107.6
458.4r
637.7r
138.1
125.8
491.8r
651.3r
157.3
131.9
549.2"
710.5"
157.3
131.9
549.2"
710.5r
163.6
134.1
564.4"
710.8"
166.5
136.4
567.5
720.0
1. Includes (not shown separately) securities issued to the Rural Electrification
Administration, depository bonds, retirement plan bonds, and individual retirement bonds.
2. Nonmarketable series denominated in dollars, and series denominated in
foreign currency held by foreigners.
3. Held almost entirely by U.S. Treasury and other federal agencies and trust
funds.
4. Data for Federal Reserve Banks and U.S. government agencies and trust
funds are actual holdings; data for other groups are Treasury estimates.
1990
n.a.
5. Consists of investments of foreign balances and international accounts in the
United States.
6. Includes savings and loan associations, nonprofit institutions, credit unions,
mutual savings banks, corporate pension trust funds, dealers and brokers, certain
U.S. Treasury deposit accounts, and federally sponsored agencies.
SOURCES. U.S. Treasury Department, data by type of security, Monthly
Statement of the Public Debt of the United States; data by holder, Treasury
Bulletin.
Federal Finance
1.42
U.S. GOVERNMENT SECURITIES DEALERS
A31
Transactions 1
Millions of dollars, daily averages
1993, week ending
1993
Item
June r
Julyr
Aug.
Aug. 4
Aug. 11
Aug. 18
Aug. 25
Sept. 1
Sept. 8
Sept. 15
Sept. 22
Sept. 29
IMMEDIATE TRANSACTIONS 2
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
By type of security
U.S. Treasury securities
Bills
Coupon securities, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 to 15 years
15 years or more
Federal agency securities
Debt, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 years or more
Mortgage-backed
Pass-throughs
All others 3 :
By type of counterparty
Primary dealers and brokers
U.S. Treasury securities
Federal agency securities
Debt
Mortgage-backed
Customers
U.S. Treasury securities
Federal agency securities
Debt
Mortgage-backed
44,236
38,518
39,177
38,473
36,552
38,359
43,128
39,068
41,911
43,125
45,908
44,651
44,070
39,730
19,269
15,950
41,112
38,413
21,192
17,907
50,523
39,718
26,988
27,557
43,909
35,633
25,006
24,005
53,289
33,711
29,867
28,833
50,165
42,549
28,630
32,315
57,205
44,158
23,261
26,059
44,119
41,199
27,482
24,553
44,623
44,681
28,220
25,125
55,450
50,829
30,835
25,866
53,332
49,365
22,532
22,962
47,456
51,469
25,102
19,735
7,228
624
428
6,647
605
712
8,361
512
650
7,993
478
743
7,431
440
651
8,001
575
612
9,537
517
639
8,778
540
640
7,256
790
756
8,084
450
779
7,887
584
391
10,687
864
689
17,002
2,949
19,563
3,266
18,926
3,079
14,078
2,486
23,813
2,850
24,340
3,106
15,200
2,842
14,345
4,070
22,011
3,493
28,261
4,066
18,158
2,121
16,316
3,273
100,173
97,390
114,324
103,464
116,099
117,729
120,938
107,725
111,771
129,147
128,459
117,580
1,147
8,852
1,073
10,157
1,554
9,462
1,518
6,141
1,454
11,519
1,548
12,741
1,727
7,832
1,497
7,318
1,487
9,210
1,245
12,866
1,361
9,445
1,751
8,015
63,082
59,751
69,638
63,562
66,153
74,289
72,873
68,695
72,789
76,958
65,639
70,834
7,134
11,099
6,891
12,672
7,968
12,544
7,697
10,424
7,068
15,145
7,640
14,705
8,966
10,211
8,461
11,097
7,315
16,294
8,069
19,461
7,501
10,833
10,488
11,575
FUTURES AND FORWARD
TRANSACTIONS
By type of deliverable security
U.S. Treasury securities
17 Bills
Coupon securities, by maturity
18 Less than 3.5 years
19 3.5 to 7.5 years
20 7.5 to 15 years
15 years or more
21
Federal agency securities
Debt, by maturity
Less than 3.5 years
22
3.5 to 7.5 years
23
7.5 years or more
24
Mortgage-backed
Pass-throughs
25
Others 3
26
3,189
2,511
1,906
1,960
1,250
2,289
1,999
2,090
2,637
3,364
2,080
1,980
1,931
1,943
2,990
9,228
2,055
1,382
2,751
11,588
2,264
2,062
3,398
14,008
1,675
2,234
3,516
12,656
2,334
1,106
2,901
11,841
2,190
1,603
3,640
14,207
2,367
2,274
3,810
15,604
2,582
3,435
3,112
15,486
2,197
3,075
3,198
12,076
2,562
2,174
3,155
14,267
2,997
2,388
3,409
15,204
1,406
1,359
2,626
11,387
222
54
84
86
105
23
80
124
35
64
128
94
137
50
19
65
192
4
28
161
7
104
81
82
63
59
33
71
133
22
212
123
44
271
47
6
23,647
1,463
23,296
2,026
24,157
2,093
20,286
1,487
30,715
2,135
24,255
1,929
20,778
2,430
22,966
2,281
25,088
1,221
36,462
1,863
22,545
2,647
22,621
1,917
1,002
1,512
622
903
3,062
869
722
1,209
3,075
1,241
801
1,019
2,503
1,205
739
982
2,758
1,218
438
571
799
687
913
2,324
1,252
872
1,229
2,472
1,513
744
536
3,033
1,940
1,217
1,103
4,472
2,149
486
998
3,446
1,659
975
847
3,804
1,484
903
724
3,564
600
533
598
496
591
499
572
842
942
855
685
786
OPTIONS TRANSACTIONS 5
27
28
29
30
31
By type of underlying security
U.S. Treasury, coupon
securities, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 to 15 years
15 years or more
Federal agency, mortgagebacked securities
Pass-throughs
1. Transactions are market purchases and sales of securities as reported to the
Federal Reserve Bank of New York by the U.S. government securities dealers on
its published list of primary dealers. Averages are based on the number of trading
days in the period. Immediate, forward, and futures transactions are reported at
principal value, which does not include accrued interest; options transactions are
reported at the face value of the underlying securities.
Dealers report cumulative transactions for each week ending Wednesday.
2. Transactions for immediate delivery include purchases or sales of securities
(other than mortgage-backed agency securities) for which delivery is scheduled in
five business days or less and "when-issued" securities that settle on the issue
date of offering. Transactions for immediate delivery of mortgage-backed agency
securities include purchases and sales for which delivery is scheduled in thirty business
days or less. Stripped securities are reported at market value by maturity of coupon or
corpus.
3. Includes such securities as collateralized mortgage obligations (CMOs), real
estate mortgage investment conduits (REMICs), interest-only securities (iOs),
and principal-only securities (POs).
4. Futures transactions are standardized agreements arranged on an exchange.
Forward transactions are agreements made in the over-the-counter market that
specify delayed delivery. All futures transactions are included regardless of time
to delivery. Forward contracts for U.S. Treasury securities and federal agency
debt securities are included when the time to delivery is more than five business
days. Forward contracts for mortgage-backed agency securities are included
when the time to delivery is more than thirty business days.
5. Options transactions are purchases or sales of put-and-call options, whether
arranged on an organized exchange or in the over-the-counter market, and include
options on futures contracts on U.S. Treasury and federal agency securities.
NOTE. In tables 1.42 and 1.43, "n.a." indicates that data are not published
because of insufficient activity.
Data for several types of options transactions—U.S. Treasury securities, bills;
Federal agency securities, debt; and federal agency securities, mortgage-backed,
other than pass-throughs—are no longer available because activity is insufficient.
A32
1.43
DomesticNonfinancialStatistics • December 1993
U.S. GOVERNMENT SECURITIES DEALERS
Positions and Financing 1
M i l l i o n s o f dollars
1993
1993, week ending
item
June
July
Aug.
Aug. 4
Aug. 11
Aug. 18
Aug. 25
Sept. 1
Sept. 8
Sept. 15
Sept. 22
Positions 2
NET IMMEDIATE POSITIONS3
By type of security
U.S. Treasury securities
1 Bills
Coupon securities, by maturity
2
Less than 3.5 years
3.5 to 7.5 years
3
7.5 to 15 years
4
15 years or more
5
Federal agency securities
Debt, by maturity
6
Less than 3.5 years
7
3.5 to 7.5 years
7.5 years or more
8
Mortgage-backed
9
Pass-throughs
All others
10
Other money market instruments
11
Certificates of deposit
Commercial paper
12
Bankers acceptances
13
4,999 r
5,394
8,508
7,443
7,501
6,089
13,636
7,234
3,332
7,222
12,628
10,982
-16,778
-10,050*
ll,817 r
9,704
-17,643
-5,042
10,367
7,631
-21,963
-1,200
6,931
6,092
-17,778
-4,628
5,103
8,607
-21,026
-1,023
4,778
5,828
-25,283
-582
9,028
11,797
-22,767
-394
6,348
4,760
-21,034
-781
8,895
8,450
-21,637
-927
10,688
-1,040
-23,757
-3,511
11,987
570
-21,007
-3,378
10,520
6,578 r
2,192 r
2,916 r
7,924
3,023
3,568
9,611
2,899
3,783
10,638
2,953
3,616
9,930
2,854
3,580
9,423
2,825
3,778
9,611
2,909
3,890
8,775
2,990
4,014
10,149
3,112
4,412
10,093
3,172
4,011
8,002
3,262
3,787
37,760
25,204
44,748
24,588
34,151
24,101
44,214
22,447
49,801
23,431
50,430
24,057
39,910
29,378
45,730
29,992
60,078
26,638
58,332
25,997
3,251
7,093
1,135
3,479
7,804
1,168
2,584
7,106
1,211
3,574
6,580
1,399
3,599
5,873
949
3,0%
8,627
931
2,910
6,646
1,097
2,518
10,216
1,016
2,621
7,351
1,051
36,731
26,354
3,280
6,950
1,048
2,673*
6,669*
1,114
FUTURES AND FORWARD POSITIONS5
14
15
16
17
18
19
20
21
22
23
24
By type of deliverable security
U.S. Treasury securities
Bills
Coupon securities, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 to 15 years
15 years or more
Federal agency securities
Debt, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 years or more
Mortgage-backed
Pass-throughs
All others
Certificates of deposit
-5,751
-6,396
-7,235
-5,230
-5,999
-10,144
-7,834
-5,920
-4,695
-6,187
-6,707
-3,212 r
3,432 r
2,013
-6,174 r
-1,787
4,012
4,208
-6,493*
-1,741
3,649
6,989
-8,172
-1,794
4,146
7,657
-7,044
-2,548
4,176
8,657
-8,375
-1,510
5,341
5,790
-9,372
-1,213
3,606
6,017
-9,159
-1,649
778
7,130
-6,138
-1,983
387
7,605
-8,249
-2,641
2,311
8,988
-7,281
-1,691
981
8,229
-6,%2
4
-72
33
-18
11
36
-11
-113
48
37
5
-3
-172
115
32
25
36
-9
44
-52
132
120
-56
30
187
94
16
83
-19
-91
-15,023 r -20,369
1,764
2,782
-149,595* -178,5%
-26,253
5,513
-198,937
-14,319
2,456
-178,774
-27,181
6,390
-206,357
-31,780
7,824
-202,067
-29,7%
5,574
-200,180
-22,547
3,759
-198,623
-31,821
3,980
-226,976
-48,895
7,335
-219,241
-45,603
10,297
-206,633
38
-33
85
Financing 6
Reverse repurchase agreements
25 Overnight and continuing
26 Term
221,171
370,986
244,345*
406,245*
246,671
400,077
259,418
417,217
248,234
435,607
259,657
379,%1
234,378
403,705
235,540
366,433
246,529
385,406
249,390
397,434
235,263
417,557
Repurchase agreements
27 Overnight and continuing
28 Term
410,307*
340,843*
452,885*
370,581*
468,541
371,613
468,663
376,215
449,937
408,875
493,309
349,947
462,812
386,980
467,950
332,424
475,861
339,056
489,909
360,260
470,579
389,234
Securities borrowed
29 Overnight and continuing
30 Term
129,101
41,518
128,685
46,807
134,639
45,868
131,003
45,232
133,048
46,163
136,8%
44,037
133,887
47,523
137,165
46,154
139,030
42,470
140,492
42,281
132,625
40,553
Securities loaned
31 Overnight and continuing
32 Term
4,774
639
' 5,355
773
5,760
981
5,776
790
5,634
864
5,219
1,062
5,449
1,057
6,891
1,061
5,735
1,136
6,330
1,612
7,869
1,799
Collateralized loans
33 Overnight and continuing
14,128
16,304
16,061
14,405
17,888
17,417
16,819
12,566
16,452
16,779
16,173
MEMO: Matched book 7
Reverse repurchase agreements
34 Overnight and continuing
35 Term
149,942
317,835
161,088
351,971*
166,820
342,286
170,341
357,002
164,772
375,482
178,568
322,989
159,176
347,003
162,073
310,758
160,205
332,579
169,168
340,953
162,151
358,656
Repurchase agreements
36 Overnight and continuing
37 Term
210,760*
256,609*
227,742*
278,162*
224,1%
274,942
235,648
285,124
224,628
308,755
240,968
253,082
210,005
285,973
213,048
241,341
222,078
246,361
223,808
262,542
212,838
288,254
1. Data for positions and financing are obtained from reports submitted to the
Federal Reserve Bank of New York by the U.S. government securities dealers on
its published list of primary dealers. Weekly figures are close-of-business Wednesday data; monthly figures are averages of weekly data.
2. Securities positions are reported at market value.
3. Net immediate positions include securities purchased or sold (other than
mortgage-backed agency securities) that have been delivered or are scheduled to
be delivered in five business days or less and "when-issued" securities that settle
on the issue date of offering. Net immediate positions of mortgage-backed agency
securities include securities purchased or sold that have been delivered or are
scheduled to be delivered in thirty business days or less.
4. Includes such securities as collateralized mortgage obligations (CMOs), real
estate mortgage investment conduits (REMICs), interest-only securities (IOs),
and principal-only securities (POs).
5. Futures positions reflect standardized agreements arranged on an exchange.
Forward positions reflect agreements made in the over-the-counter market that
specify delayed delivery. All futures positions are included regardless of time to
delivery. Forward contracts for U.S. Treasury securities and federal agency debt
securities are included when the time to delivery is more than five business days.
Forward contracts for mortgage-backed agency securities are included when the
time to delivery is more than thirty business days.
6. Overnight financing refers to agreements made on one business day that
mature on the next business day; continuing contracts are agreements that remain
in effect for more than one business day but have no specific maturity and can be
terminated without advance notice by either party; term agreements have a fixed
maturity of more than one business day.
7. Matched-book data reflect financial intermediation activity in which the
borrowing and lending transactions are matched. Matched-book data are included
in the financing breakdowns given above. The reverse repurchase and repurchase
numbers are not always equal because of the "matching" of securities of different
values or different types of collateralization.
NOTE. Data for futures and forward commercial paper and bankers acceptances and
for term financing of collateralized loans are no longer available because of insufficient
activity.
Federal Finance
1.44
FEDERAL A N D FEDERALLY SPONSORED CREDIT AGENCIES
A33
Debt Outstanding
Millions of dollars, end of period
1993
Agency
1989
1990
1991
1992
Mar.
1 Federal and federally sponsored agencies
2 Federal agencies
f
3 Defense Department
4 Export-Import Bank 2 ' 3
5 Federal Housing Administration
6 Government National Mortgage Association certificates of
participation
7 Postal Service
8 Tennessee Valley Authority
9 United States Railway Association
10 Federally sponsored agencies7
11 Federal Home Loan Banks
12 Federal Home Loan Mortgage Corporation
Association
13 Federal National Mortgage
14 Farm Credit Banks 8
15 Student Loan Marketing Association
16 Financing Corporation1®
17 Farm Credit Financial Assistance Corporation11
18 Resolution Funding Corporation 12
Apr.
July
June
May
411,805
434,668
442,772
483,970
494,656
0
0
0
0
35,664
7
10,985
328
42,159
7
11,376
393
41,035
7
9,809
397
41,829
7
7,208
374
42,051
7
6,749
259
42,619
7
6,749
263
42,738
7
6,749
271
42,218
7
6,258
283
44,656
7
6,258
97
0
6,445
17,899
0
0
6,948
23,435
0
0
8,421
22,401
0
0
10,660
23,580
0
0
10,440
24,5%
0
0
10,440
25,160
0
0
10,440
25,271
0
0
10,182
25,488
0
0
10,182
28,112
0
375,428
136,108
26,148
116,064
54,864
28,705
8,170
847
4,522
392,509
117,895
30,941
123,403
53,590
34,194
8,170
1,261
23,055
401,737
107,543
30,262
133,937
52,199
38,319
8,170
1,261
29,9%
442,141
114,733
29,631
166,300
51,910
39,650
8,170
1,261
29,9%
452,605
115,272
41,183
165,818
51,630
38,776
8,170
1,261
29,9%
459,749
117,363
47,903
165,135
51,210
38,209
8,170
1,261
29,9%
466,894
120,172
46,555
170,768
51,538
37,%7
8,170
1,261
29,9%
469,854
127,289
35,572
176,527
51,686
38,884
8,170
1,261
29,9%
477,838
125,448
42,291
180,730
51,698
37,801
8,170
1,261
29,9%
134,873
179,083
185,576
154,994
146,097
140,807
137,215
132,953
132,307
10,979
6,195
4,880
16,519
0
11,370
6,698
4,850
14,055
0
9,803
8,201
4,820
10,725
0
7,202
10,440
4,790
6,975
0
6,743
10,440
4,790
6,675
0
6,743
10,440
4,790
6,675
0
6,743
10,440
4,790
6,575
0
6,252
10,182
4,790
6,575
0
6,252
10,182
4,790
6,575
0
53,311
19,265
23,724
52,324
18,890
70,8%
48,534
18,562
84,931
42,979
18,172
64,436
42,979
17,966
56,504
41,629
18,008
52,522
40,379
17,970
50,318
39,729
17,895
47,530
39,129
17,883
47,4%
MEMO
19 Federal Financing Bank debt13
20
21
22
23
24
Lending to federal and
federally sponsored agencies
Export-Import Bank 3
Postal Service 6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association 6
Other lending14
25 Farmers Home Administration
26 Rural Electrification Administration
27 Other
1. Consists of mortgages assumed by the Defense Department between 1957
and 1963 under family housing and homeowners assistance programs.
2. Includes participation certificates reclassified as debt beginning Oct. 1,1976.
3. On-budget since Sept. 30, 1976.
4. Consists of debentures issued in payment of Federal Housing Administration
insurance claims. Once issued, these securities may be sold privately on the
securities market.
5. Certificates of participation issued before fiscal year 1969 by the Government
National Mortgage Association acting as trustee for the Fanners Home Administration, the Department of Health, Education, and Welfare, the Department of
Housing and Urban Development, the Small Business Administration, and the
Veterans' Administration.
6. Off-budget.
7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. Some data are estimated.
8. Excludes borrowing by the Farm Credit Financial Assistance Corporation,
shown on line 17.
9. Before late 1982, the Association obtained financing through the Federal
Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is
shown on line 22.
10. The Financing Corporation, established in August 1987 to recapitalize the
Federal Savings and Loan Insurance Corporation, undertook its first borrowing in
October 1987.
11. The Farm Credit Financial Assistance Corporation, established in January
1988 to provide assistance to the Farm Credit System, undertook its first
borrowing in July 1988.
12. The Resolution Funding Corporation, established by the Financial Institutions Reform, Recovery and Enforcement Act of 1989, undertook its first
borrowing in October 1989.
13. The FFB, which began operations in 1974, is authorized to purchase or sell
obligations issued, sold, or guaranteed by other federal agencies. Because FFB
incurs debt solely for the purpose of lending to other agencies, its debt is not
included in the main portion of the table in order to avoid double counting.
14. Includes FFB purchases of agency assets and guaranteed loans; the latter
are loans guaranteed by numerous agencies, with the amounts guaranteed by any
one agency generally being small. The Farmers Home Administration entry
consists exclusively of agency assets, whereas the Rural Electrification Administration entry consists of both agency assets and guaranteed loans.
A34
1.45
DomesticNonfinancialStatistics • December 1993
NEW SECURITY ISSUES
Tax-Exempt State and Local Governments
Millions of dollars
1993
Type of issue or issuer,
or use
1990
1 All issues, new and refunding1
1991
1992
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
120,339
154,402
215,191
18,285
28,920
20,956
27,178
28,529
21,603
21,258
21,555
By type of issue
2 General obligation
3 Revenue
39,610
81,295
55,100
99,302
78,611
136,580
6,%3
11,322
8,254
20,666
8,272
12,684
9,452
17,726
8,415
20,114
7,713
13,890
6,065
15,193
5,455
16,100
By type of issuer
4 State
2
5 Special district or statutory authority
6 Municipality, county, or township
15,149
72,661
32,510
24,939
80,614
48,849
25,295
129,686
60,210
3,485
10,146
4,654
2,139
19,804
6,977
1,463
9,923
9,570
2,910
15,441
8,827
3,562
18,132
6,835
2,944
10,043
8,616
2,319
10,632
8,307
2,758
11,321
7,476
103,235
116,953
120,272
4,775r
9,741r
4,941r
8,681r
11,208"
7,737
7,029
8,350
17,042
11,650
11,739
23,099
6,117
34,607
21,121
13,395
21,039
25,648
8,376
30,275
22,071
17,334
20,058
21,7%
5,424
33,589
1,264
131
423
618
69
2,131
1,482
2,111
538
1,556
765
3,264
833
699
806
942
134
1,971
1,5%
813
955
1,756
601
3,665
2,208
772
1,629
2,073
1,042
3,046
l,723 r
653r
922r
1,555
429
2,455
1,883
1,062
1,646
681
212
1,545
1,886
789
1,255
2,199
329
1,892
7 Issues for new capital
8
9
10
11
12
13
By use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
1. Par amounts of long-term issues based on date of sale.
2. Includes school districts.
1.46
N E W SECURITY ISSUES
SOURCES. Securities Data Company beginning January 1993;
Dealer's Digest before then.
Investment
U.S. Corporations
Millions of dollars
Type of issue, offering,
or issuer
1993
1990
1991
1992
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
1 All issues1
340,049
465,243
559,449
50,692
59,427
56,265r
40,654"
42,961"
65,574"
49,987
54,156
2 Bonds2
299,884
389,822
471,125
45,458
49,367
47,427'
34,403r
34,263"
55,780"
40,219
44,894
r
31,199"
n.a.
3,204
30,934"
n.a.
3,329
51,183"
n.a.
4,597"
37,569
n.a.
2,650
41,050
n.a.
3,845
By type of offering
3 Public, domestic
4 Private placement, domestic3
5 Sold abroad
188,848
86,982
23,054
286,930
74,930
27,%2
377,681
65,853
27,591
41,575
n.a.
3,884
47,084
n.a.
2,283
42,223
n.a.
5,203
51,779
40,733
12,776
17,621
6,687
170,288
86,628
36,666
13,598
23,945
9,431
219,750
81,998
42,869
9,979
48,055
15,394
272,830
9,393
3,074
316
4,282
3,019
25,374
8,150
2,268
248
5,624
2,890
30,187
8,137
2,695
1,067
7,058
3,270
25,201"
6,515"
2,194
123
5,767
2,015
17,788"
3,690
3,015
685
2,857
1,820
22,1%"
8,397"
2,505
948
5,849"
2,473
35,608"
2,448
5,491
607
5,687
2,331
23,654
6,278
2,331
723
3,212
2,979
29,372
12 Stocks2
40,175
75,424
88,325
5,234
10,060
8,838
6,251
8,698
9,794
9,768
9,262
By type of offering
13 Public preferred
14 Common
15 Private placement
3,998
19,442
16,736
17,085
48,230
10,109
21,339"
57,118r
9,867
1,112
4,122
n.a.
1,898
8,161
n.a.
1,647
7,191
n.a.
702
5,549
n.a.
3,124
5,574
n.a.
876
8,918
n.a.
2,113
7,655
n.a.
3,376
5,886
n.a.
5,649
10,171
369
416
3,822
19,738
24,111
19,418
2,439
3,474
475
25,507
22,723
20,231
2,595
6,532
2,366
33,879
722
1,688
65
310
0
2,438
2,616
2,021
64
350
0
5,009
1,741
2,488
336
743
7
3,522
1,387
1,564
250
412
30
2,579
1,413
2,836
111
753
279
3,307
1,982
2,025
168
893
65
4,660
1,810
2,505
114
495
n.a.
4,844
1,961
1,456
405
582
115
4,732
6
7
8
9
10
11
16
17
18
19
20
21
By industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
By industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
1. Figures represent gross proceeds of issues maturing in more than one year;
they are the principal amount or number of units calculated by multiplying by the
offering price. Figures exclude secondary offerings, employee stock plans,
investment companies other than closed-end, intracorporate transactions, equities sold abroad, and Yankee bonds. Stock data include ownership securities
issued by limited partnerships.
2. Monthly data cover only public offerings.
3. Monthly data are not available.
SOURCES. IDD Information Services, Inc., Securities Data Company, and the
Board of Governors of the Federal Reserve System.
Securities Market and Corporate Finance
1.47
A35
Net Sales and Assets 1
O P E N - E N D INVESTMENT COMPANIES
Millions of dollars
1993
Item
1991
1992
Jan.
Feb.
Mar.
Apr.
May
June r
Aug.
July
1 Sales of own shares2
463,645
647,055
71,607
60,676
69,080
66,766
60,504
68,373
72,503
73,294
2 Redemptions of own shares
3 Net sales
342,547
121,098
447,140
199,915
46,545
25,062
39,684
20,992
47,414
21,666
46,518
20,248
38,752
21,759
46,923
21,650
44,922
27,581
46,473
26,821
4 Assets4
808,582
1,056,310
1,082,653
1,116,784
1,154,445
1,178,663
1,219,863
1,255,377
1,284,842
1,344,261
5 Cash 5
6 Other
60,292
748,290
73,999
982,311
76,764
1,005,889
79,763
1,037,021
81,536
1,072,910
87,140
1,091,523
85,677
1,134,186
84,177
1,171,200
93,345
1,191,497
94,489
1,249,772
4. Market value at end of period, less current liabilities.
5. Includes all U.S. Treasury securities and other short-term debt securities.
SOURCE. Investment Company Institute. Data based on reports of membership,
which comprises substantially all open-end investment companies registered with
the Securities and Exchange Commission. Data reflect underwritings of new
companies.
1. Data on sales and redemptions exclude money market mutual funds but
include limited-maturity municipal bond funds. Data on asset positions exclude
both money market mutual funds and limited-maturity municipal bond funds.
2. Includes reinvestment of net income dividends. Excludes reinvestment of
capital gains distributions and share issue of conversions from one fund to another
in the same group.
3. Excludes sales and redemptions resulting from transfers of shares into or out
of money market mutual funds within the same fund family.
1.48
CORPORATE PROFITS A N D THEIR DISTRIBUTION
Billions of dollars; quarterly data at seasonally adjusted annual rates
1991r
1990r
Account
1991r
1992r
1993
1992r
Q3
Q4
Q1
Q2
Q3
Q4
Qlr
Q2
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
380.6
365.7
138.7
227.1
153.5
73.6
369.5
362.3
129.8
232.5
137.4
95.2
407.2
395.4
146.3
249.1
150.5
98.6
359.0
362.0
132.5
229.5
133.4
96.1
378.8
373.5
133.4
240.1
133.9
106.1
409.9
404.3
147.0
257.3
138.0
119.3
411.7
409.5
153.0
256.5
146.1
110.4
367.5
357.9
130.1
227.8
155.2
72.7
439.5
409.9
155.0
254.9
162.9
92.0
432.1
419.8
160.9
258.9
167.5
91.4
458.1
445.6
173.3
272.3
168.5r
103.9
7 Inventory valuation
8 Capital consumption adjustment
-11.0
25.9
4.9
2.2
-5.3
17.1
-3.0
.0
1.9
3.5
-4.6
10.2
-13.7
16.0
-7.8
17.4
4.9
24.7
-12.7
25.1
— 12.2r
24.7r
SOURCE. U.S. Department of Commerce, Survey of Current Business.
1.50
NONFARM BUSINESS EXPENDITURES
New Plant and Equipment
Billions of dollars; quarterly data at seasonally adjusted annual rates
1992
Industry
1991
1992
1993
19931
Ql
Q2
Q3
Q4
Ql
Q2
Q31
Q41
1 Total nonfarm business
528.39
546.60
585.20
534.85
541.41
547.40
559.24
564.13
579.79
598.91
597.98
Manufacturing
2 Durable goods industries
3 Nondurable goods industries
77.64
105.17
73.32
100.69
80.94
98.95
73.98
99.85
74.07
97.91
72.09
100.77
73.30
103.56
79.11
95.94
80.88
96.21
82.73
103.96
81.06
99.69
Nonmanufacturing
4 Mining
Transportation
5 Railroad
6
Air
7
Other
Public utilities
8
Electric
9 Gas and other
10 Commercial and other 2
10.02
8.88
9.29
8.92
9.20
8.98
8.47
8.89
9.10
9.65
9.52
5.95
10.17
6.54
6.67
8.93
7.04
6.57
7.25
9.16
6.63
8.76
6.44
6.32
9.65
7.19
6.70
9.69
7.52
7.04
7.60
6.97
6.00
7.30
9.17
6.00
6.54
9.04
7.17
8.35
8.90
7.09
6.82
9.53
43.76
22.82
246.32
48.22
23.99
268.84
52.11
23.54
297.39
46.11
22.89
261.27
48.35
24.29
264.46
48.17
24.01
269.46
49.57
24.50
278.24
49.92
23.59
284.21
50.51
24.04
297.46
54.81
23.06
300.26
53.20
23.46
307.62
1. Figures are amounts anticipated by business.
2. "Other" consists of construction, wholesale and retail trade, finance and
insurance, personal and business services, and communication.
SOURCE. U.S. Department of Commerce, Survey of Current Business.
A36
1.51
DomesticNonfinancialStatistics • December 1993
DOMESTIC FINANCE COMPANIES
Assets and Liabilities 1
Billions of dollars, end of period; not seasonally adjusted
1991
Account
1990
1991
1992
1993
1992
Q4
Ql
Q2
Q3
Q4
Ql
Q2
ASSETS
1 Accounts receivable, gross2
2 Consumer
i
Business
4 Real estate
492.3
133.3
293.6
65.5
480.6
121.9
292.9
65.8
482.1
117.1
296.5
68.4
480.6
121.9
292.9
65.8
475.6
118.4
290.8
66.4
476.7
116.7
293.2
66.8
473.9
116.7
288.5
68.8
482.1
117.1
296.5
68.4
469.6
111.9
289.6
68.1
469.3
111.3
290.7
67.2
57.6
9.6
55.1
12.9
50.8
15.8
55.1
12.9
53.6
13.0
51.2
12.3
50.8
12.0
50.8
15.8
47.4
15.5
48.1
15.8
7 Accounts receivable, net
8 All other
425.1
113.9
412.6
149.0
415.5
150.6
412.6
149.0
409.0
145.5
413.2
139.4
411.1
146.5
415.5
150.6
406.6
155.0
405.4
156.9
9 Total assets
539.0
561.6
566.1
561.6
554.5
552.6
557.6
566.1
561.6
562.3
31.0
165.3
42.3
159.5
37.6
156.4
42.3
159.5
38.0
154.4
37.8
147.7
38.1
153.2
37.6
156.4
34.1
149.8
29.5
144.5
n.a.
n.a.
37.5
178.2
63.9
63.7
n.a.
n.a.
34.5
191.3
69.0
64.8
n.a.
n.a.
37.8
195.3
71.2
67.8
n.a.
n.a.
34.5
191.3
69.0
64.8
n.a.
n.a.
34.5
189.8
72.0
66.0
n.a.
n.a.
34.8
191.9
73.4
67.1
n.a.
n.a.
34.9
191.4
73.7
68.1
n.a.
n.a.
37.8
195.3
71.2
67.8
n.a.
n.a.
41.9
195.1
74.2
66.6
n.a.
n.a.
44.9
195.1
81.3
67.1
539.6
561.2
566.1
561.2
554.6
552.7
559.4
566.1
561.7
562.4
June
July
Aug.
5 LESS: Reserves for unearned income
6
Reserves for losses
LIABILITIES AND CAPITAL
10 Bank loans
11 Commercial paper
12
13
14
15
16
17
Debt
Other short-term
Long-term
Owed to parent
Not elsewhere classified
All other liabilities
Capital, surplus, and undivided profits
18 Total liabilities and capital
1. Includes finance company subsidiaries of bank holding companies but not of
retailers and banks. Data are amounts carried on the balance sheets of finance
companies; securitized pools are not shown, as they are not on the books.
1.52
DOMESTIC FINANCE COMPANIES
2. Before deduction for unearned income and losses,
Consumer, Real Estate, and Business Credit1
Millions of dollars, amounts outstanding, end of period
1993
Type of credit
1990
1991
1992
Mar.
Apr.
May
Seasonally adjusted
1 Total
522,474
519,910
534,845
528,046
529,552
523,111
522,981
523,539
525,744
2 Consumer
3 Real estate 2
4 Business
160,468
65,147
2%,858
154,822
65,383
299,705
157,707
68,011
309,127
156,257
68,726
303,062
156,441
69,803
303,308
153,275
66,396
303,440
152,979
67,223
302,778
153,228
67,426
302,885
153,420
67,216
305,109
Not seasonally adjusted
5 Total
6 Consumer
7 Motor vehicles
8
Other consumer3
9
Securitized motor vehicles4
10 Securitized other consumer 4
11 Real estate 2
12 Business
13 Motor vehicles
14
Retail 5 ....
15
Wholesale6
16
Leasing
17 Equipment
18
Retail
19
Wholesale6
20
Leasing
21 Other business
22 Securitized business assets
23
Retail
24
Wholesale
25
Leasing
525,888
523,192
538,158
528,172
531,380
524,180
526,818
523,389
161,360
75,045
58,213
19,837
8,265
65,509
299,019
92,125
26,454
33,573
32,098
137,654
31,968
11,101
94,585
63,773
5,467
667
3,281
1,519
155,713
63,415
58,522
23,166
10,610
65,760
301,719
90,613
22,957
31,216
36,440
141,399
30,962
9,671
100,766
60,900
8,807
576
5,285
2,946
158,631
57,605
59,522
29,775
11,729
68,410
311,118
87,456
19,303
29,962
38,191
151,607
32,212
8,669
110,726
57,464
14,590
1,118
8,756
4,716
154,913
53,508
58,346
32,904
10,155
68,135
305,123
87,542
16,961
31,788
38,792
145,878
32,560
8,656
104,662
56,153
15,551
904
9,824
4,823
155,440
53,977
58,546
32,527
10,390
69,356
306,584
88,692
17,228
32,064
39,400
145,877
32,170
8,642
105,066
56,144
15,870
1,434
9,745
4,691
152,708
53,878
55,433
33,174
10,223
66,150
305,322
89,317
16,513
32,242
40,562
145,237
32,384
8,556
104,297
54,487
16,281
1,375
9,590
5,316
152,995
55,592
55,737
31,642
10,023
67,230
306,593
90,263
16,995
31,787
41,481
146,487
32,775
8,482
105,230
53,987
15,856
1,324
9,539
4,993
153,733
56,817
56,259
30,787
9,870
67,649
302,007
87,745
17,561
27,442
42,743
146,408
33,209
8,224
104,975
53,243
14,611
1,268
8,318
5,025
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
FRASER
balances are no longer carried on the balance sheets of the loan originator.
Digitized for
5. Passenger car fleets and commercial land vehicles for which licenses are
required.
6. Credit arising from transactions between manufacturers and dealers, that is,
floor plan financing.
7. includes loans on commercial accounts receivable, factored commercial
accounts, and receivable dealer capital; small loans used primarily for business or
farm purposes; and wholesale and lease paper for mobile homes, campers, and
travel trailers.
Real Estate
1.53
MORTGAGE MARKETS
A37
Mortgages on N e w Homes
Millions o f dollars e x c e p t a s n o t e d
1993
Item
1990
1991
1992
Mar.
Apr.
May
June
July
Aug.
Sept.
Terms and yields in primary and secondary markets
PRIMARY MARKETS
1
2
3
4
5
Terms1
Purchase price (thousands of dollars)
Amount of loan (thousands of dollars)
Loan-to-price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount) 2
Yield (percent per year)
1
6 Contract rate
7 Effective rate1,3
8 Contract rate (HUD series)
153.2
112.4
74.8
27.3
1.93
155.0
114.0
75.0
26.8
1.71
158.1
118.1
76.6
25.6
1.60
156.2
121.5
79.3
26.9
1.50
150.9
115.0
78.5
24.9
1.23
153.1
118.8
79.5
26.9
1.43
185.6
125.3
75.3
25.4
1.32
168.7
127.4
77.8
26.2
1.28
158.1
122.2
78.4
26.4
1.21
155.3
120.8
78.5
26.5
1.13
9.68
10.01
10.08
9.02
9.30
9.20
7.98
8.25
8.43
7.22
7.46
7.59
7.26
7.46
7.51
7.14
7.37
7.59
7.02
7.23
7.33
6.99
7.20
7.31
6.86
7.05
6.89
6.76
6.95
6.94
10.17
9.51
9.25
8.59
8.46
7.77
7.57
6.79
7.56
6.77
7.59
6.79
7.52
6.75
7.51
6.55
7.02
6.43
7.03
6.21
SECONDARY MARKETS
Yield (percent per year)
9 F H A mortgages (Section 203)5
10 GNMA securities 6
Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
11 Total
12
FHA/VA insured
13
Conventional
113,329
21,028
92,302
122,837
21,702
101,135
142,833
22,168
120,664
161,147
22,700
138,447
163,719
22,682
141,037
166,849
22,691
144,158
171,232
22,656
148,576
174,674
22,761
151,913
177,992
22,834
155,158
180,057
22,810
157,247
23,959
37,202
75,905
4,730
6,761
7,526
9,131
7,854
8,176
8,866
23,689
5,270
40,010
7,608
74,970
10,493
6,644
0
7,764
112
7,791
30
8,697
323
7,760
458
8,581
2,585
9,814
0
Mortgage holdings (end of period)*
17 Total
18
FHA/VA insured
19
Conventional
20,419
547
19,871
24,131
484
23,283
29,959
408
29,552
35,421
337
35,084
38,361
330
38,031
39,960
325
39,635
42,477
319
42,158
43,119
314
42,805
44,3%
324
44,072
46,858
323
46,536
Mortgage transactions
20 Purchases
21 Sales
75,517
73,817
99,965
92,478
191,125
179,208
12,587
10,286
15,885
13,807
18,842
17,532
21,529
18,968
19,700
18,631
19,636
18,008
18,372
16,230
102,401
114,031
261,637
21,103
20,731
18,908
28,831
21,722
17,085
16,495
Mortgage transactions
14 Purchases
Mortgage commitments
15 Issued 7
16 To sell 8
(during
(during
period)
period)
FEDERAL HOME LOAN MORTGAGE CORPORATION
Mortgage commitments
22 Contracted
(during
(during
period)
period)9
1. Weighted averages based on sample surveys of mortgages originated by
major institutional lender groups for purchase of newly built homes; compiled by
the Federal Housing Finance Board in cooperation with the Federal Deposit
Insurance Corporation.
2. Includes all fees, commissions, discounts, and "points" paid (by the
borrower or the seller) to obtain a loan.
3. Average effective interest rate on loans closed for purchase of newly built
homes, assuming prepayment at the end of ten years.
4. Average contract rate on new commitments for conventional first mortgages; from U.S. Department of Housing and Urban Development (HUD). Based
on transactions on the first day of the subsequent month.
5. Average gross yield on thirty-year, minimum-downpayment first mortgages insured by the Federal Housing Administration (FHA) for immediate
delivery in the private secondary market. Based on transactions on first day of
subsequent month.
6. Average net yields to investors on fully modified pass-through securities
backed by mortgages and guaranteed by the Government National Mortgage
Association (GNMA), assuming prepayment in twelve years on pools of thirtyyear mortgages insured by the Federal Housing Administration or guaranteed by
the Department of Veterans Affairs.
7. Does not include standby commitments issued, but includes standby commitments converted.
8. Includes participation loans as well as whole loans.
9. Includes conventional and government-underwritten loans. The Federal
Home Loan Mortgage Corporation's mortgage commitments and mortgage transactions include activity under mortgage securities swap programs, whereas the
corresponding data for F N M A exclude swap activity.
A38
1.54
DomesticNonfinancialStatistics • December 1993
MORTGAGE DEBT OUTSTANDING 1
Millions of dollars, end of period
1992
Type of holder and property
1989
1 All holders
By type of property
One- to four-family residences
Multifamily residences
Commercial
Farm
1990
1993
1991
Q2
Q3
Q4
Ql r
Q2P
3,549,290r
3,761,262r
3,922,980r
3,981,827r
4,019,409r
4,041,59©r
4,056,749
4,085,483
2,408,342r
r
r
2,856,601r
304,792r
r
2,911,354r
r
r
740,702
79,733r
301,957
726,273r
79,824r
2,953,464
294,959*
713,408r
79,759r
2,976,287
293,382
707,041
80,040
3,014,387
291,029
699,994
80,073
306,472
754,0001
80,476
2,615,344
309,326r
758,189r
78,403r
2,778,716r
306,392r
r
1,931,537
767,069
389,632
38,876
321,906
16,656
910,254
669,220
106,014
134,370
650
254,214
12,231
26,907
205,472
9,604
1,914,315
844,826
455,931
37,015
334,648
17,231
801,628
600,154
91,806
109,168
500
267,861
13,005
28,979
215,121
10,756
l,846,726r
876, IOC
483,623'
36,935r
337,095r
18,447r
705,367
538,358
79,881
86,741
388
265,258
11,547
29,562
214,105
10,044
l,803,836r
884,962r
493,199"
37,724r
334,488r
19,552r
659,624
508,545
74,788
75,947
345
259,250r
12,041r
29,226r
208,665r
9,318r
l,793,492r
891,445r
502,075r
38,757r
330,705r
19,908r
648,178
501,604
73,723
72,517
334
253,869r
ll,779 r
28,591r
204,132r
9,366r
l,769,267r
894,593r
507,830"
38,027r
328,854r
19,882
627,972
489,622
69,791
68,235
324
246,702r
ll,441 r
27,77C
198,2691
9,222r
1,751,941
890,672
506,976
37,596
326,128
19,972
617,141
480,398
70,656
65,755
332
244,128
11,316
27,466
196,100
9,246
1,758,285
910,867
526,394
37,840
326,033
20,600
608,528
473,949
69,408
64,837
334
238,890
11,071
26,871
191,852
9,095
22 Federal and related agencies
23 Government National Mortgage Association
24
One- to four-family
75
Multifamily
26 Farmers Home Administration4
77
One- to four-family
28
Multifamily
29
Commercial
Farm
30
31
Federal Housing and Veterans' Administrations
32
One- to four-family
Multifamily
33
34 Resolution Trust Corporation
35
One- to four-family
36
Multifamily
37
Commercial
38
Farm
39 Federal National Mortgage Association
40
One- to four-family
41
Multifamily
4?
Federal Land Banks
43
One- to four-family
44
Farm
45 Federal Home Loan Mortgage Corporation
46
One- to four-family
47
Multifamily
197,778
23
23
0
41,176
18,422
9,054
4,443
9,257
6,087
2,875
3,212
0
0
0
0
0
99,001
90,575
8,426
29,640
1,210
28,430
21,851
18,248
3,603
239,003
20
20
0
41,439
18,527
9,640
4,690
8,582
8,801
3,593
5,208
32,600
15,800
8,064
8,736
0
104,870
94,323
10,547
29,416
1,838
27,577
21,857
19,185
2,672
266,146
19
19
0
41,713
18,496
10,141
4,905
8,171
10,733
4,036
6,697
45,822
14,535
15,018
16,269
0
112,283
100,387
11,896
28,767
1,693
27,074
26,809
24,125
2,684
278,091
23
23
0
41,628
17,718
10,356
4,998
8,557
11,480
4,403
7,077
44,624
15,032
13,316
16,276
0
122,939
110,223
12,716
28,775
1,693
27,082
28,621
26,001
2,620
277,485
27
27
0
41,671
17,292
10,468
5,072
8,839
11,768
4,531
7,236
37,099
12,614
11,130
13,356
0
126,476
113,407
13,069
28,815
1,695
27,119
31,629
29,039
2,591
285,965
30
30
0
41,695
16,912
10,575
5,158
9,050
12,581
5,153
7,428
32,045
12,960
9,621
9,464
0
137,584
124,016
13,568
28,365
1,669
26,696
33,665
31,032
2,633
287,182
45
37
8
41,630
18,149
10,235
4,934
8,313
13,027
5,631
7,3%
27,331
11,375
8,070
7,886
0
141,192
127,252
13,940
28,536
1,679
26,857
35,421
32,831
2,589
299,214
45
38
7
41,669
18,313
10,197
4,915
8,245
12,945
5,635
7,311
21,973
8,955
6,743
6,275
0
151,513
137,340
14,173
28,592
1,682
26,909
42,477
39,905
2,572
48 Mortgage pools or trusts 5
49 Government National Mortgage Association
50
One- to four-family
51
Multifamily
52 Federal Home Loan Mortgage Corporation
53
One- to four-family
54
Multifamily
55 Federal National Mortgage Association
56
One- to four-family
57
Multifamily
58 Farmers Home Administration
59
One- to four-family
60
Multifamily
61
Commercial
6?
Farm
63 Private mortgage conduits
One- to four-family
64
65
Multifamily
66
Commercial
67
Farm
917,848
368,367
358,142
10,225
272,870
266,060
6,810
228,232
219,577
8,655
80
21
0
26
33
48,299
43,325
462
4,512
0
1,079,103
403,613
391,505
12,108
316,359
308,369
7,990
299,833
291,194
8,639
66
17
0
24
26
59,232
53,335
731
5,166
0
1,250,666
425,295
415,767
9,528
359,163
351,906
7,257
371,984
362,667
9,317
47
11
0
19
17
94,177
84,000
3,698
6,479
0
1,341,338
422,922
413,828
9,094
382,797
376,177
6,620
413,226
403,940
9,286
43
9
0
18
15
122,350
105,700
5,796
10,855
0
1,385,460
422,255
413,063
9,192
391,762
385,400
6,362
429,935
420,835
9,100
41
9
0
18
14
141,468
123,000
5,796
12,673
0
1,425,546
419,516
410,675
8,841
407,514
401,525
5,989
444,979
435,979
9,000
38
8
0
17
13
153,499
132,000
6,305
15,194
0
1,461,612
421,514
412,798
8,716
420,932
415,279
5,654
457,316
448,483
8,833
44
10
0
18
16
161,805
137,000
6,662
18,143
0
1,472,844
413,166
404,425
8,741
422,882
417,646
5,236
465,220
456,645
8,575
45
10
0
19
16
171,532
145,000
7,410
19,121
0
502,127r
318,782r
84,228r
83,272r
15,846
528,841r
348,547r
85,926r
80,636r
13,732r
559,442r
367,546r
83,778r
93,126r
14,992r
558,562r
368,068r
86,174r
89,456r
14,864r
562,971r
374,984r
85,942r
87,802r
14,243r
560,812r
372,613r
85,410"
88,217r
14,572r
556,015
367,072
85,561
88,077
15,304
555,140
367,378
85,947
86,941
14,874
2
3
4
5
By type of holder
6 Major financial institutions
7 Commercial banks 2
8
One- to four-family
Multifamily
9
10
Commercial
Farm
11
12 Savings institutions
n
One- to four-family
14
Multifamily
15
Commercial
16
Farm
17 Life insurance companies
18
One- to four-family
Multifamily
19
70
Commercial
Farm
21
68 Individuals and others 6
69 One- to four-family
Multifamily
70
71 Commercial
Farm
72
,
1. Based on data from various institutional and governmental sources; figures
for some quarters estimated in part by the Federal Reserve. Multifamily debt
refers to loans on structures of five or more units.
2. Includes loans held by nondeposit trust companies but not loans held by
bank trust departments.
3. Includes savings banks and savings and loan associations.
4. FmHA-guaranteed securities sold to the Federal Financing Bank were
reallocated from FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4
because of accounting changes by the Farmers Home Administration.
758,739
79,133r
5. Outstanding principal balances of mortgage-backed securities insured or
guaranteed by the agency indicated.
6. Other holders include mortgage companies, real estate investment trusts,
state and local credit agencies, state and local retirement funds, noninsured
pension funds, credit unions, and finance companies.
SOURCES. Based on data from various institutional and government sources.
Separation of nonfarm mortgage debt by type of property, if not reported directly,
and interpolations and extrapolations, when required, are estimated mainly by the
Federal Reserve. Line 64, from Inside Mortgage Securities.
Consumer Installment
1.55
Credit
A39
CONSUMER INSTALLMENT CREDIT 1
Millions of dollars, amounts outstanding, end of period
1993
Holder and type of credit
1990
1991
1992
Mar.
Apr.
r
May
r
June r
July
Aug.
Seasonally adjusted
1 Total
738,765
733,510
741,093
750,131r
752,193
750,293
752,428
757,465
761,093
2 Automobile
3 Revolving
4 Other
284,739
222,552
231,474
260,898
243,564
229,048
259,627
254,299
227,167
262,313r
259,661
228,157r
262,463
261,450
228,280
264,007
262,690
223,596
265,388
263,338
223,701
267,468
266,938
223,058
268,382
269,781
222,931
Not seasonally adjusted
752,883
749,052
756,944
743,133r
746,447
744,778
748,830
753,645
761,859
By major holder
Commercial banks
Finance companies
Credit unions
Retailers
Savings institutions
Gasoline companies
Pools of securitized assets
347,087
133,258
93,057
43,464
52,164
4,822
79,030
340,713
121,937
92,681
39,832
45,965
4,362
103,562
331,869
117,127
97,641
42,079
43,461
4,365
120,402
329,764
111,854
99,778
38,030
41,695
4,080
117,932r
332,266
112,523
101,534
38,218
40,275
4,280
117,351
333,415
109,311
103,019
38,681
39,210
4,486
116,656
335,592
111,330
104,781
38,813
37,250
4,567
116,497
339,948
113,076
106,027
39,043
36,485
4,668
114,398
344,040
111,864
108,095
39,688
35,919
4,728
117,525
By major type of credit3
13 Automobile
14 Commercial banks
15 Finance companies
16 Pools of securitized assets
284,903
124,913
75,045
24,620
261,219
112,666
63,415
28,915
259,964
109,743
57,605
33,878
259,945r
111,287
53,508r
36,085
260,857
111,121
53,977
36,262
262,860
112,700
53,878
36,431
265,345
114,901
55,592
34,701
267,646
116,729
56,817
33,673
270,090
118,130
55,247
35,569
17 Revolving
18 Commercial banks
19 Retailers
20 Gasoline companies
21 Pools of securitized assets
234,801
133,385
38,448
4,822
45,637
256,876
138,005
34,712
4,362
63,595
267,949
132,582
36,629
4,365
74,243
256,233
128,079
32,681
4,080
70,890
257,783
129,550
32,838
4,280
69,919
259,566
130,871
33,254
4,486
69,054
260,993
129,921
33,328
4,567
70,842
264,100
132,984
33,505
4,668
69,935
268,695
134,498
34,099
4,728
71,562
22 Other
23 Commercial banks
24 Finance companies
25 Retailers
26 Pools of securitized assets
233,178
88,789
58,213
5,016
8,773
230,957
90,042
58,522
5,120
11,052
229,031
89,544
59,522
5,450
12,281
226,955r
90,398
58,346
5,349
10,957r
227,807
91,595
58,546
5,380
11,170
222,352
89,844
55,433
5,427
11,171
222,491
90,770
55,737
5,485
10,954
221,899
90,235
56,259
5,538
10,790
223,073
91,412
56,616
5,589
10,394
5 Total
6
7
8
9
10
11
12
1. The Board's series on amounts of credit covers most short- and
intermediate-term credit extended to individuals that is scheduled to be repaid (or
has the option of repayment) in two or more installments.
Data in this table also appear in the Board's G.19 (421) monthly statistical
release. For ordering address, see inside front cover.
1.56
2. Outstanding balances of pools upon which securities have been issued; these
balances are no longer carried on the balance sheets of the loan originator.
3. Totals include estimates for certain holders for which only consumer credit
totals are available.
TERMS OF CONSUMER INSTALLMENT CREDIT 1
Percent per year except as noted
1993
Item
1990
1991
1992
Feb.
Mar.
Apr.
May
June
July
Aug.
INTEREST RATES
1
2
3
4
Commercial banks2
48-month new car
24-month personal
120-month mobile home
Credit card
Auto finance
5 New car
6 Used car
companies
11.78
15.46
14.02
18.17
11.14
15.18
13.70
18.23
9.29
14.04
12.67
17.78
8.57
13.57
12.38
17.26
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
8.17
13.63
12.00
17.15
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
7.98
13.45
11.53
16.59
12.54
15.99
12.41
15.60
9.93
13.80
10.32
13.90
9.95
13.21
9.61
12.74
9.51
12.61
9.45
12.55
9.37
12.46
9.21
12.48
54.6
46.0
55.1
47.2
54.0
47.9
54.3
49.0
54.6
49.0
54.5
48.9
54.4
48.9
54.6
49.0
54.7
49.0
54.9
49.0
87
95
88
%
89
97
91
98
90
98
90
98
91
98
91
98
91
98
91
99
12,071
8,289
12,494
8,884
13,584
9,119
13,849
9,457
14,013
9,641
14,021
9,731
14,146
9,829
14,296
9,912
14,430
9,996
14,324
10,054
OTHER TERMS3
Maturity (months)
7 New car
8 Used car
Loan-to-value ratio
9 New car
10 Used car
Amount financed (dollars)
11 New car
12 Used car
1. The Board's series on amounts of credit covers most short- and intermediate-term credit extended to individuals that is scheduled to be repaid (or has the
option of repayment) in two or more installments. Data in this table also appear in
the Board's G.19 (421) monthly statistical release. For ordering address, see
inside front cover.
2. Data are available for only the second month of each quarter,
3. At auto finance companies,
A40
1.57
DomesticNonfinancialStatistics • December 1993
F U N D S RAISED IN U.S. CREDIT MARKETS 1
Billions of dollars; quarterly data at seasonally adjusted annual rates
1992
1991
Transaction rateonrv nr sertnr
1988
1993
1989
Q4
Q1
Q2
Q3
Q4
Ql
Q2
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors ..
752.6
723.0
631.0
475.5
581.5
411.4
603.0
584.6
611.3
526.9
400.2
667.2
By sector and instrument
2 U.S. government
3 Treasury securities
4 Agency issues and mortgages
155.1
137.7
17.4
146.4
144.7
1.6
246.9
238.7
8.2
278.2
292.0
-13.8
304.0
303.8
.2
272.5
268.7
3.8
323.8
335.0
-11.2
352.9
352.5
.4
299.1
290.1
9.0
240.1
237.4
2.7
229.6
226.4
3.2
348.2
344.1
4.1
5 Private
597.5
576.6
384.1
197.3
277.5
138.9
279.2
231.8
312.1
286.8
170.7
319.0
6
7
8
9
10
11
12
13
14
15
16
By instrument
Tax-exempt obligations
Corporate bonds
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Consumer credit
Bank loans n.e.c
Commercial paper
Other loans
53.7
103.1
279.6
219.6
16.1
48.5
-4.6
50.1
44.7
11.9
54.3
65.3
73.8
269.1
212.5
12.0
47.3
-2.7
49.5
36.4
21.4
61.0
57.3
47.1
188.7
177.2
3.4
8.9
-.8
13.4
4.2
9.7
63.6
69.6
78.8
165.1
166.0
-2.5
.9
.7
-13.1
-46.8
-18.4
-37.8
65.7
67.3
120.0
176.0
-11.1
-45.5
.6
9.3
-4.7
8.6
11.2
77.6
60.2
145.2
176.5
.2
-28.6
-2.9
-10.7
-53.7
-5.0
-74.9
68.0
76.3
183.2
216.5
11.6
-46.9
2.0
-9.8
-43.6
2.5
2.6
76.6
77.8
71.0
111.6
-16.3
-24.6
.4
-14.7
27.3
-2.6
-3.5
75.8
61.3
135.0
203.3
-11.1
-57.6
.4
13.5
-24.3
9.3
41.5
42.4
53.7
90.9
172.7
-28.5
-53.0
-.3
48.2
22.0
25.4
4.2
62.1
75.0
95.8
126.2
-5.6
-26.0
1.1
20.0
-36.1
-24.2
-21.9
60.7
65.0
118.7
155.4
-10.6
-26.2
.1
30.7
35.9
34.8
-26.9
17
18
19
20
21
22
By borrowing sector
Household
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
State and local government
300.1
248.4
-10.0
57.2
201.3
48.9
276.7
236.3
.5
49.4
186.5
63.5
207.7
121.9
1.8
19.4
100.7
54.5
168.4
-33.4
2.4
-24.5
-11.3
62.3
215.9
2.2
.6
-39.5
41.0
59.4
193.8
-129.0
-4.6
-57.9
-66.5
74.0
202.9
14.2
2.1
-21.7
33.7
62.1
176.1
-11.2
3.2
-47.7
33.3
66.9
217.6
21.1
-.5
-37.5
59.1
73.5
267.0
-15.3
-2.5
-50.9
38.0
35.1
139.7
-39.9
-1.5
-28.8
-9.6
70.9
216.8
39.5
3.3
-36.6
72.8
62.7
23 Foreign net borrowing in United States
24 Bonds
23 Bank loans n.e.c
26 Open market paper
27 U.S. government loans
6.4
6.9
-1.8
8.7
-7.5
10.2
4.9
-.1
13.1
-7.6
23.9
21.4
-2.9
12.3
-7.0
13.9
14.1
3.1
6.4
-9.8
24.2
17.3
2.3
5.2
-.6
34.3
18.5
6.5
14.9
-5.6
1.9
4.9
1.5
-8.0
3.6
57.7
21.9
14.1
27.8
-6.1
37.8
20.3
3.9
13.1
.5
-.6
22.2
-10.3
-12.1
-.4
50.3
75.6
1.6
-21.7
-5.3
26.9
30.4
6.3
-.6
-9.2
28 Total domestic plus foreign
759.0
733.1
654.9
489.4
605.7
445.6
604.9
642.3
649.1
526.3
450.5
694.1
Financial sectors
29 Total net borrowing by financial sectors
239.9
213.7
193.5
150.4
209.8
190.5
167.6
204.6
294.8
172.2
148.7
121.2
119.8
44.9
74.9
.0
149.5
25.2
124.3
.0
167.4
17.1
150.3
-.1
145.7
9.2
136.6
.0
155.8
40.3
115.6
.0
150.4
32.6
117.9
-.1
126.8
11.5
115.3
.0
195.2
48.3
146.9
.0
169.3
67.7
101.6
.0
131.8
33.6
98.4
-.1
165.8
32.2
133.6
.0
62.6
68.7
-6.1
.0
34 Private
35 Corporate bonds
36 Mortgages
37 Bank loans n.e.c
38 Open market paper
39 Loans from Federal Home Loan Banks
120.1
49.0
.3
-3.8
54.8
19.7
64.2
37.3
.5
6.0
31.3
-11.0
26.1
40.8
.4
1.1
8.6
-24.7
4.6
56.8
.8
17.1
-32.0
-38.0
54.0
58.7
.0
-4.8
-.7
.8
40.1
73.7
1.2
3.8
-9.9
-28.6
40.8
28.6
-.4
22.0
1.1
-10.4
9.4
59.1
-1.5
-39.1
-14.8
5.8
125.5
73.0
.0
16.9
17.5
18.1
40.4
74.2
2.0
-19.2
-6.5
-10.1
-17.1
60.1
.9
-21.2
-75.5
18.6
58.6
53.6
.2
-10.6
-18.1
33.5
By borrowing sector
40 Government sponsored enterprises
41 Federally related mortgage pools
42 Private
43 Commercial banks
44 Bank affiliates
45 Funding corporations
46 Savings institutions
47 Credit unions
48 Life insurance companies
49 Finance companies
50 Mortgage companies
51 Real estate investment trusts (REITs)
52 Securitized credit obligation (SCO) issuers
44.9
74.9
120.1
-3.0
5.2
39.1
21.7
.0
.0
23.9
-6.2
1.8
37.6
25.2
124.3
64.2
-1.4
6.2
13.8
-15.1
.0
.0
27.4
3.0
1.3
28.9
17.0
150.3
26.1
-.7
-27.7
12.5
-30.2
.0
.0
24.0
-4.0
1.0
51.1
9.1
136.6
4.6
-11.7
-2.5
-13.6
-44.5
.0
.0
18.6
5.7
1.6
51.0
40.2
115.6
54.0
8.8
2.3
2.1
-6.7
.0
.0
-3.6
.1
.1
51.0
32.5
117.9
40.1
-9.5
7.0
-14.0
-34.0
.0
.0
39.0
1.9
3.3
46.5
11.5
115.3
40.8
3.2
10.9
16.1
-18.3
.0
.0
-35.6
27.5
1.7
35.3
48.3
146.9
9.4
5.5
-9.2
28.6
-5.4
.0
.0
-20.1
-35.3
.3
45.0
67.7
101.6
125.5
12.1
6.6
-5.7
11.2
.0
.2
21.2
14.4
.9
64.4
33.5
98.4
40.4
14.5
.8
-30.5
-14.4
.1
-.2
19.9
-6.4
-2.7
59.2
32.2
133.6
-17.1
5.4
21.1
-54.2
7.9
.0
.1
-33.1
-10.4
-1.4
47.5
68.7
-6.1
58.6
10.4
10.8
-5.7
18.3
.3
.6
-41.4
10.3
.7
54.3
30
31
32
33
By instrument
U.S. government-related
Government-sponsored enterprises securities
Mortgage pool securities
Loans from U.S. government
Flow of Funds
1.57
A41
F U N D S RAISED IN U.S. CREDIT MARKETS 1 —Continued
1991
Transaction category or sector
1988
1989
1990
1991
1992
1993
1992
Q4
Ql
Q2
Q3
Q4
Ql
Q2
All sectors
53 Total net borrowing, all sectors
998.8
946.8
848.4
639.8
815.5
636.2
772.5
847.0
943.9
698.5
599.2
815.2
54
55
56
57
58
59
60
61
274.9
53.7
159.0
280.0
50.1
39.2
75.4
66.6
295.8
65.3
116.0
269.6
49.5
42.3
65.9
42.4
414.4
57.3
109.2
189.1
13.4
2.4
30.7
31.8
424.0
69.6
149.6
165.8
-13.1
-26.6
-44.0
-85.6
459.8
65.7
143.3
120.1
9.3
-7.2
13.1
11.4
423.0
77.6
152.4
146.5
-10.7
-43.4
.0
-109.3
450.6
68.0
109.8
182.8
-9.8
-20.2
-4.5
-4.2
548.1
76.6
158.8
69.5
-14.7
2.3
10.3
-3.8
468.5
75.8
154.6
135.0
13.5
-3.4
39.9
60.0
372.0
42.4
150.1
93.0
48.2
-7.5
6.8
-6.5
395.3
62.1
210.8
96.7
20.0
-55.7
-121.4
-8.7
410.8
60.7
149.0
118.9
30.7
31.6
16.1
-2.6
U.S. government securities
Tax-exempt securities
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans
External corporate equity funds raised in United States
62 Total net share issues
63 Mutual funds
64 All other
65
Nonfinancial corporations
66
Financial corporations
67
Foreign shares purchased in United States
-98.6
-59.6
22.2
210.6
293.5
290.6
271.6
306.1
283.3
313.1
332.3
469.8
6.1
-104.7
-129.5
23.9
.9
38.5
-98.1
-124.2
8.8
17.2
67.9
-45.7
-63.0
9.9
7.4
150.5
60.1
18.3
11.2
30.7
215.4
78.2
26.8
20.8
30.6
208.9
81.7
48.0
10.0
23.7
174.4
97.2
46.0
22.1
29.1
240.7
65.3
36.0
18.2
11.2
223.3
60.0
223.0
90.1
14.0
28.6
47.5
263.8
68.5
27.0
9.5
31.9
357.5
112.3
32.0
30.0
50.3
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical
release, tables F.2 through F.5. For ordering address, see inside front cover.
11.0
14.2
34.8
A42
1.58
DomesticNonfinancialStatistics • December 1993
SUMMARY OF FINANCIAL TRANSACTIONS 1
Billions o f dollars e x c e p t a s n o t e d ; quarterly data at s e a s o n a l l y adjusted annual rates
1991
Transaction category or sector
1988
1989
1990
1991
1993
1992
1992
Q4
Ql
Q2
Q3
Q4
Ql
Q2
NET LENDING IN CREDIT MARKETS2
1 Total net lending in credit markets
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
Private domestic nonfinancial sectors
Households
Nonfarm noncorporate business
Nonfinancial corporate business
State and local governments
U.S. government
Foreign
Financial sectors
Government sponsored enterprises
Federally related mortgage pools
Monetary authority
Commercial banking
U.S. commercial banks
Foreign banking offices
Bank holding companies
Banks in U.S. affiliated areas
Private nonbank finance
Thrift institutions
Insurance
Life insurance companies
Other insurance companies
Private pension funds
State and local government retirement funds
Finance n.e.c
Finance companies
Mortgage companies
Mutual funds
Closed-end funds
Money market funds
Real estate investment trusts (REITs)
Brokers and dealers
Asset-backed securities (ABSs)
Bank personal trusts
998.8
946.8
848.4
639.8
815.5
636.2
772.5
847.0
943.9
698.5
599.2
815.2
196.1
170.3
3.1
5.7
17.1
-10.6
108.6
704.8
33.2
74.9
10.5
156.5
126.4
29.4
-.1
.8
429.7
114.8
199.0
104.0
29.2
29.2
36.6
115.9
38.1
-7.4
11.9
19.8
10.7
.9
-8.2
35.9
14.3
122.6
78.6
-.7
13.6
31.1
-3.1
84.4
742.9
-4.1
124.3
-7.3
177.2
146.1
26.7
2.8
1.6
452.9
-86.6
257.4
101.8
29.7
81.1
44.7
282.2
32.0
6.1
23.8
6.3
67.1
.5
96.3
27.7
22.4
162.8
140.1
-1.7
-5.3
29.6
33.7
82.1
569.9
16.4
150.3
8.1
125.1
94.9
28.4
-2.8
4.5
270.0
-153.3
181.6
94.4
26.5
17.2
43.5
241.7
28.4
-8.0
41.4
.0
80.9
-.7
34.9
49.9
14.8
-16.1
-49.7
-4.2
4.3
33.5
10.5
25.6
619.8
14.2
136.6
31.1
84.3
39.2
48.5
-1.5
-1.9
353.7
-123.0
234.3
83.2
32.3
85.3
33.5
242.3
-12.1
11.4
90.3
15.2
30.1
-1.0
49.0
49.0
10.4
69.1
40.2
-2.4
36.3
-5.0
-11.9
100.0
658.2
68.7
115.6
27.9
94.8
69.8
16.5
5.6
2.9
351.3
-59.9
166.1
82.4
12.7
38.9
32.2
245.2
1.7
.1
132.3
12.3
1.3
.6
40.2
48.6
8.0
-70.7
-123.3
-2.6
11.0
44.2
-20.0
41.3
685.6
24.9
117.9
16.9
120.4
56.9
64.9
.0
-1.5
405.5
-56.7
199.3
24.6
28.9
135.0
10.8
263.0
-28.0
3.9
137.9
13.5
44.6
-1.9
50.5
44.2
-1.8
136.6
119.3
-3.9
25.1
-3.9
15.2
94.4
526.3
92.7
115.3
28.5
85.1
76.3
-.5
7.1
2.2
204.8
-104.6
96.6
73.7
28.8
-33.8
27.8
212.8
-5.3
23.0
95.1
17.9
19.1
.3
-2.4
33.0
32.2
93.4
52.1
-2.7
36.8
7.2
-23.0
138.9
637.7
38.6
146.9
19.0
72.7
13.3
56.7
-.4
3.2
360.5
-76.3
188.3
66.9
16.4
77.0
28.0
248.5
-16.0
-38.5
171.1
9.4
10.0
2.6
73.0
45.2
-8.4
-43.4
-80.7
-2.0
46.5
-7.1
-26.7
79.3
934.7
73.0
101.6
15.7
148.0
123.5
5.2
16.4
3.0
596.3
-43.6
221.7
85.1
-2.8
103.9
35.6
418.2
4.0
28.9
138.6
8.7
4.7
-.3
180.3
62.6
-9.3
89.9
70.2
-1.0
36.9
-16.3
-13.1
87.6
534.2
70.5
98.4
48.3
73.3
66.0
4.8
-.6
3.0
243.7
-15.2
157.8
103.7
8.3
8.4
37.4
101.1
24.0
-12.8
124.5
13.1
-28.4
-.1
-90.2
53.6
17.3
-174.4
-144.7
-3.7
-18.5
-7.5
-24.1
74.6
723.1
15.8
133.6
44.5
86.4
100.4
-12.5
-4.3
2.9
442.8
-27.2
295.7
122.1
8.9
122.3
42.4
174.3
-34.0
-20.9
156.8
8.9
-65.0
2.9
79.5
47.0
-.9
-83.5
-93.7
-3.0
5.1
8.1
-27.8
92.4
834.2
144.1
-6.1
32.6
147.9
142.0
3.8
-.4
2.6
515.5
15.0
166.8
119.5
10.6
-9.1
45.9
333.8
-22.8
21.0
191.2
13.0
51.8
.9
14.7
49.5
14.4
998.8
946.8
848.4
639.8
815.5
636.2
772.5
847.0
943.9
698.5
599.2
815.2
4.0
.5
25.3
140.1
2.9
278.6
43.2
121.6
53.1
21.9
23.7
15.2
6.1
-104.7
3.0
89.6
5.3
-24.0
7.2
199.2
24.8
4.1
28.8
309.7
-16.5
284.8
6.1
100.4
13.9
90.1
77.8
-3.6
38.5
-98.1
15.6
59.4
2.0
-31.1
23.1
292.1
2.0
2.5
25.7
158.1
34.2
98.1
44.2
59.0
-65.7
70.3
-24.2
14.6
67.9
-45.7
3.5
32.1
-4.5
-35.5
21.5
98.2
-5.9
.0
25.7
358.8
-3.7
48.2
75.8
16.7
-60.8
41.2
-16.5
-8.2
150.5
60.1
51.4
-2.2
-8.5
-12.5
29.8
169.9
-1.6
-1.8
28.4
228.4
51.8
9.3
122.7
-60.8
-80.0
3.9
33.6
-10.2
215.4
78.2
4.2
57.9
7.7
-13.3
-7.5
203.9
-5.0
.5
19.2
419.6
10.3
48.5
102.8
8.7
-108.8
30.5
23.8
-8.4
208.9
81.7
118.0
-16.3
-3.3
12.9
10.8
256.4
3.5
.1
33.8
118.0
32.1
-.7
86.4
-40.1
-72.9
44.4
8.1
-26.6
174.4
97.2
-66.7
79.8
8.5
-21.9
40.2
103.2
-6.5
.3
22.7
191.6
39.4
4.6
108.2
-81.8
-109.9
27.5
103.7
-43.2
240.7
65.3
-4.9
56.5
6.1
7.1
20.2
284.8
-8.5
.2
27.3
301.3
82.9
175.3
201.2
-83.6
-52.9
-22.0
89.6
43.0
223.3
60.0
82.8
57.8
6.5
-39.6
-55.4
214.4
5.1
-7.7
29.8
302.9
52.8
-142.2
95.1
-37.7
-84.2
-34.1
-67.1
-14.2
223.0
90.1
5.5
37.5
9.9
1.3
-35.2
213.3
3.4
.3
51.4
371.7
12.7
-4.6
30.1
-157.8
-.6
-37.7
180.3
-18.8
263.8
68.5
39.7
28.6
9.7
-15.9
-10.1
255.9
-3.5
.4
41.0
196.9
47.2
272.7
233.7
-27.6
-19.8
66.8
17.2
2.4
357.5
112.3
37.4
42.5
6.6
-7.3
35.8
332.1
1,632.0
1,883.8
1,306.5
1,501.3
1,676.4
1,798.4
1,374.0
1,774.9
2,072.2
1,484.7
1,674.2
2,286.7
1.6
.8
-6.2
8.4
-3.2
-1.9
3.3
2.5
2.5
-13.1
2.0
8.1
.7
1.6
21.7
-88.2
-5.5
-14.1
11.3
13.8
25.0
-9.5
2.0
11.3
4.4
-11.7
44.6
-3.6
2.3
5.7
.1
-21.8
-11.8
6.1
-11.4
-2.1
-.1
-3.0
-29.6
6.3
47.3
-.2
-4.4
32.4
2.3
-77.8
.2
1.6
-31.5
.5
-23.6
-.6
26.2
5.2
.4
-32.1
-.2
-4.0
31.1
6.7
-15.2
-.1
16.6
66.7
.5
-7.6
-.4
8.2
-26.7
-7.6
-60.3
-.1
-18.2
84.1
7.0
-51.2
-.3
-5.3
45.5
23.8
10.7
-.1
-.6
21.4
3.7
40.0
-.1
9.3
136.6
-11.1
39.9
-.2
-2.3
2.2
24.4
-59.2
1,614.8
1,928.2
1,351.0
1,505.2
1,634.2
1,830.2
1,410.7
1,749.5
1,960.5
1,416.0
1,533.2
2,329.2
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
35 Net flows through credit markets
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
Other financial sources
Official foreign exchange
Treasury currency and special drawing rights
Life insurance reserves
Pension fund reserves
Interbank claims
Deposits at financial institutions
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Foreign deposits
Mutual fund shares
Corporate equities
Security credit
Trade debt
Taxes payable
Noncorporate proprietors' equity
Investment in bank personal trusts
Miscellaneous
56 Total financial sources
Floats not included in assets ( - )
57 U.S. government checkable deposits
58 Other checkable deposits
59 Trade credit
60
61
62
63
64
Liabilities not identified as assets ( - )
Treasury currency
Interbank claims
Security repurchase agreements
Taxes payable
Miscellaneous
65 Total identified to sectors as assets
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical
release, tables F.6 and F.7. For ordering address, see inside front cover.
2. Excludes corporate equities and mutual fund shares,
Flow of Funds
1.59
A43
SUMMARY OF CREDIT MARKET DEBT OUTSTANDING 1
Billions of d o l l a r s , e n d of p e r i o d
1991
Transaction category or sector
1989
1990
1991
1993
1992
1992
Q4
Ql
Q2
Q3
Q4
Ql
Q2
Nonfinancial sectors
1 Total credit market debt owed by
domestic nonfinancial sectors
10,054.3
10,692.0
11,160.6
11,742.1
11,160.6
11,285.2
11,422.7
11,576.1
11,742.1
11,817.8
11,973.8
By lending sector and instrument
2 U.S. government
Treasury securities
3
4
Agency issues and mortgages
2,251.2
2,227.0
24.2
2,498.1
2,465.8
32.4
2,776.4
2,757.8
18.6
3,080.3
3,061.6
18.8
2,776.4
2,757.8
18.6
2,859.7
2,844.0
15.8
2.923.3
2.907.4
15.9
2,998.9
2,980.7
18.1
3,080.3
3,061.6
18.8
3,140.2
3,120.6
19.6
3,201.2
3,180.6
20.6
5 Private
7,803.1
8,193.9
8,384.3
8,661.8
8,384.3
8,425.5
8,499.4
8,577.2
8,661.8
8,677.6
8,772.6
6
7
8
9
10
11
12
13
14
15
16
By instrument
Tax-exempt obligations
Corporate bonds
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Consumer credit
Bank loans n.e.c
Commercial paper
Other loans
1.004.7
961.1
3.512.8
2,380.5
304.3
747.6
80.5
799.5
750.8
107.1
667.0
1,062.1
1,008.2
3,715.4
2,580.6
305.5
750.8
78.4
813.0
747.8
116.9
730.6
1,131.6
1,086.9
3,880.4
2,746.6
303.0
751.7
79.1
799.9
701.0
98.5
685.9
1,197.3
1,154.2
4,000.4
2,922.6
291.9
706.2
79.8
809.2
696.3
107.1
697.1
1,131.6
1,086.9
3,880.4
2,746.6
303.0
751.7
79.1
799.9
701.0
98.5
685.9
1,145.5
1,106.0
3,917.2
2,791.7
305.9
740.0
79.6
777.6
686.3
110.4
682.4
1,163.7
1.125.4
3,940.9
2.825.5
301.8
733.8
79.7
776.9
694.7
112.0
685.8
1,186.4
1,140.8
3,979.0
2,880.7
299.0
719.4
79.8
784.5
686.8
108.2
691.6
1,197.3
1,154.2
4,000.4
2,922.6
291.9
706.2
79.8
809.2
696.3
107.1
697.1
1,209.9
1.173.0
4,015.4
2.945.1
290.5
699.7
80.0
793.9
683.9
114.6
686.9
1.224.0
1,189.2
4,051.2
2.990.1
287.8
693.2
80.1
804.5
693.8
125.0
684.9
17
18
19
20
21
22
By borrowing sector
Household
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
State and local government
3,371.4
3,615.7
134.4
1.199.6
2.281.7
816.1
3,594.8
3.728.5
134.9
1,219.0
2.374.6
870.5
3,762.7
3,688.7
134.8
1,192.3
2,361.6
932.8
3,976.0
3,693.5
135.4
1,152.9
2,405.3
992.2
3,762.7
3,688.7
134.8
1,192.3
2,361.6
932.8
3,782.6
3,697.6
133.1
1,186.1
2,378.5
945.3
3.836.6
3,701.8
136.4
1.175.7
2,389.7
961.0
3,898.7
3,695.5
137.1
1,163.4
2,394.9
983.1
3,976.0
3,693.5
135.4
1,152.9
2,405.3
992.2
3,979.4
3,691.2
132.8
1,144.6
2,413.9
1,007.0
4.043.2
3,707.8
136.0
1.137.3
2.434.5
1.021.6
261.2
285.1
298.9
313.8
298.9
288.7
304.7
312.9
313.8
324.8
333.2
94.1
21.4
63.0
82.7
115.4
18.5
75.3
75.8
129.5
21.6
81.8
66.0
146.9
23.9
77.7
65.4
129.5
21.6
81.8
66.0
130.8
22.0
70.5
65.5
136.2
25.5
77.4
65.6
141.3
26.5
80.7
64.4
146.9
23.9
77.7
65.4
165.8
24.3
72.3
62.5
173.4
25.9
72.1
61.8
10,315.5
10,977.1
11,459.5
12,055.9
11,459.5
11,573.9
11,727.4
11,889.0
12,055.9
12,142.6
12,307.0
23 Foreign credit market debt held in
United States
24
25
26
27
Bonds
Bank loans n.e.c
Open market paper
U.S. government loans
28 Total credit market debt owed by nonfinancial
sectors, domestic and foreign
Financial sectors
29 Total credit market debt owed by
financial sectors
By instrument
30 U.S. government-related
31 Government-sponsored enterprises
securities
32 Mortgage pool securities
33 Loans from U.S. government
34 Private
35 Corporate bonds
36 Mortgages
37 Bank loans n.e.c
38 Open market paper
39 Loans from Federal Home Loan Banks
40
41
42
43
44
45
46
47
48
49
50
51
52
By borrowing sector
Government-sponsored enterprises
Federally related mortgage pools
Private financial sectors
Commercial banks
Bank affiliates
Funding corporations
Savings institutions
Credit unions
Life insurance companies
Finance companies
Mortgage companies
Real estate investment trusts (REITs)..
Securitized credit obligation (SCO) issue
2,362.7
2,559.4
2,709.7
2,928.8
2,709.7
2,751.2
2,805.3
2,877.1
2,928.8
2,962.1
2,995.5
1,247.8
1,418.4
1,564.2
1,720.0
1,564.2
1,590.3
1,641.6
1,683.5
1,720.0
1,755.8
1,774.4
373.3
869.5
5.0
1,114.8
509.1
4.0
50.9
409.1
141.8
393.7
1,019.9
4.9
1,140.9
549.9
4.3
52.0
417.7
117.1
402.9
1,156.5
4.8
1,145.6
606.6
5.1
69.1
385.7
79.1
443.1
1,272.0
4.8
1,208.9
665.4
5.1
64.2
394.3
79.9
402.9
1,156.5
4.8
1,145.6
606.6
5.1
69.1
385.7
79.1
405.7
1,179.8
4.8
1,160.9
613.8
5.0
72.7
393.2
76.3
417.8
1,219.0
4.8
1,163.7
628.6
4.6
63.1
390.5
76.9
434.7
1,244.0
4.8
1,193.6
646.8
4.6
67.3
394.6
80.2
443.1
1,272.0
4.8
1,208.9
665.4
5.1
64.2
394.3
79.9
451.2
1,299.8
4.8
1,206.3
680.4
5.4
56.9
378.7
85.0
468.3
1,301.3
4.8
1,221.0
693.8
5.4
54.6
375.2
92.1
378.3
869.5
1,114.8
77.4
142.5
125.4
169.2
.0
.0
350.4
11.3
11.4
227.3
398.5
1,019.9
1,140.9
76.7
114.8
137.9
139.1
.0
.0
374.4
7.3
12.4
278.3
407.7
1,156.5
1,145.6
65.0
112.3
124.3
94.6
.0
.0
393.0
13.0
14.0
329.4
447.9
1,272.0
1,208.9
73.8
114.6
135.7
87.8
.0
.0
389.4
13.0
14.1
380.4
407.7
1,156.5
1,145.6
65.0
112.3
124.3
94.6
.0
.0
393.0
13.0
14.0
329.4
410.5
1,179.8
1,160.9
63.8
115.0
137.6
89.8
.0
.0
382.2
19.8
14.4
338.2
422.6
1,219.0
1,163.7
66.2
112.7
144.8
87.6
.0
.0
377.4
14.5
349.5
439.5
1,244.0
1,193.6
69.0
114.4
143.3
89.2
.0
.0
382.7
14.6
14.8
365.6
447.9
1,272.0
1,208.9
73.8
114.6
135.7
87.8
.0
.0
389.4
13.0
14.1
380.4
456.0
1,299.8
1,206.3
73.1
119.9
127.6
90.3
.0
.0
379.1
10.4
13.7
392.2
473.1
1,301.3
1,221.0
76.7
122.6
126.1
93.6
.1
.2
369.1
13.0
13.9
405.8
11.0
All sectors
53 Total credit market debt, domestic and foreign.
54
55
56
57
58
59
60
61
U.S. government securities
Tax-exempt securities
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans
12,678.2
13,536.5
14,169.3
14,984.7
14,169.3
14,325.1
14,532.7
14,766.1
14,984.7
15,104.7
15,302.5
3,494.1
1,004.7
1,564.3
3,516.8
799.5
823.0
579.2
896.5
3,911.7
1,062.1
1,673.5
3,719.7
813.0
818.3
609.9
928.4
4,335.7
1,131.6
1,823.1
3,885.5
799.9
791.7
565.9
835.8
4,795.5
1,197.3
1,966.4
4,005.6
809.2
784.5
579.0
847.2
4,335.7
1,131.6
1,823.1
3,885.5
799.9
791.7
565.9
835.8
4,445.2
1,145.5
1,850.5
3,922.2
777.6
780.9
574.1
829.0
4,560.1
1,163.7
1,890.2
3,945.5
776.9
783.3
579.9
833.0
4,677.6
1,186.4
1,928.9
3,983.6
784.5
780.6
583.6
841.0
4,795.5
1,197.3
1,966.4
4,005.6
809.2
784.5
579.0
847.2
4,891.2
1,209.9
2,019.1
4,020.7
793.9
765.2
565.5
839.2
4,970.9
1,224.0
2,056.4
4,056.6
804.5
774.3
572.3
843.6
1. Data in this table also appear in the Board's Z.l
release, tables L.2 through L.4. For ordering address,
(780) quarterly statistical
see inside front cover.
A44
1.60
DomesticNonfinancialStatistics • December 1993
SUMMARY OF FINANCIAL ASSETS A N D LIABILITIES 1
B i l l i o n s o f d o l l a r s e x c e p t a s n o t e d , e n d of p e r i o d
1991
Transaction category or sector
1989
1990
1991
1992
1993
1992
Q4
QL
Q2
Q3
Q4
QL
Q2
2
CREDIT MARKET DEBT OUTSTANDING
1 Total credit market 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
33
34
Private domestic nonfinancial sectors
Households
Nonfarm noncorporate business
Nonfinancial corporate business
State and local governments
U.S. government
Foreign
Financial sectors
Government-sponsored enterprises
Federally related mortgage pools
Monetary authority
Commercial banking
U.S. commercial banks
Foreign banking offices
Bank holding companies
Banks in U.S. affiliated areas
Private nonbank finance
Thrift institutions
Insurance
Life insurance companies
Other insurance companies
Private pension funds
State and local government retirement f u n d s . . .
Finance n.e.c
Finance companies
Mortgage companies
Mutual funds
Closed-end funds
Money market funds
Real estate investment trusts (REITs)
Brokers and dealers
Asset-backed securities (ABSs)
Bank personal trusts
12,678.2
2,096.4
1,326.8
56.5
181.2
531.9
205.4
778.7
9,597.7
355.4
869.5
233.3
2,647.4
2,371.9
242.3
16.2
17.1
5,491.9
1,475.4
2,320.7
1,022.0
317.5
590.2
390.9
1,695.9
468.6
22.6
307.2
37.1
291.8
8.4
142.9
219.3
198.0
13,536.5 14,169.3 14,984.7 14,169.3 14,325.1 14,532.7
14,766.1 14,984.7
15,104.7
15,302.5
2,246.8
1,454.6
54.9
175.8
561.5
239.1
897.5
10,153.1
371.8
1,019.9
241.4
2,772.5
2,466.7
270.8
13.4
21.6
5,747.4
1,324.6
2,473.7
1,116.5
344.0
607.4
405.9
1,949.1
497.0
14.6
360.2
37.1
372.7
7.7
177.9
269.1
212.9
2,212.2
1,371.7
48.1
199.5
592.9
239.2
1,014.3
11,300.3
446.3
1,244.0
285.2
2,928.2
2,560.0
328.9
17.5
21.8
6,396.6
1,141.3
2,843.3
1,264.7
386.9
729.4
462.2
2,412.0
477.8
29.3
557.5
61.3
408.8
7.4
289.6
353.3
226.9
2,280.8
1,426.1
48.3
216.4
590.0
235.1
1,030.4
11,438.5
466.4
1,272.0
300.4
2,951.6
2,575.7
335.8
17.5
22.5
6,448.1
1,137.3
2,874.1
1,282.0
389.0
731.5
471.6
2,436.6
486.6
26.1
582.8
64.6
404.1
7.4
267.1
366.7
231.2
2,228.3
1,389.6
47.0
204.5
587.3
229.5
1,040.5
11,606.5
464.1
1,299.8
303.6
2,960.9
2,594.6
326.7
16.4
23.3
6,578.0
1,127.9
2,953.0
1,317.3
391.2
762.3
482.2
2,497.1
473.7
20.8
626.6
66.9
404.5
8.1
287.0
378.4
231.0
2,189.6
1,342.3
46.3
209.8
591.1
223.4
1,063.6
11,825.9
499.2
1,301.3
318.2
3,001.8
2,633.8
328.2
15.9
23.9
6,705.4
1,132.7
2,999.9
1,352.3
393.8
760.0
493.7
2,572.8
473.5
26.1
674.7
70.1
404.0
8.3
290.6
390.8
234.6
14,766.1 14,984.7
15,104.7
15,302.5
2,205.8
1,380.0
50.7
180.1
595.1
247.0
936.2
10,780.3
397.7
1,156.5
272.5
2,856.8
2,506.0
319.2
11.9
19.7
6,096.7
1,197.3
2,708.0
1,199.6
376.3
692.7
439.4
2,191.5
484.9
25.9
450.5
52.4
402.7
6.8
226.9
318.1
223.3
2,280.8
1,426.1
48.3
216.4
590.0
235.1
1,030.4
11,438.5
466.4
1,272.0
300.4
2,951.6
2,575.7
335.8
17.5
22.5
6,448.1
1,137.3
2,874.1
1,282.0
389.0
731.5
471.6
2,436.6
486.6
26.1
582.8
64.6
404.1
7.4
267.1
366.7
231.2
2,205.8
1,380.0
50.7
180.1
595.1
247.0
936.2
10,780.3
397.7
1,156.5
272.5
2,856.8
2,506.0
319.2
11.9
19.7
6,096.7
1,197.3
2,708.0
1,199.6
376.3
692.7
439.4
2,191.5
484.9
25.9
450.5
52.4
402.7
6.8
226.9
318.1
223.3
2,211.7
1,389.1
49.3
180.0
593.3
251.2
959.8
10,902.4
419.9
1,179.8
271.8
2,864.5
2,517.3
313.3
13.6
20.2
6,166.5
1,168.6
2,736.4
1,222.3
383.5
684.2
446.3
2,261.5
479.5
31.7
478.8
56.8
424.0
6.8
226.3
326.3
231.3
2,219.0
1,381.1
48.7
192.6
596.6
246.3
994.5
11,072.9
429.0
1,219.0
282.6
2,887.6
2,525.2
328.2
13.1
21.0
6,254.8
1,150.5
2,788.0
1,243.6
387.6
703.4
453.3
2,316.2
480.5
22.1
522.0
59.2
413.5
7.5
244.6
337.6
229.2
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
35 Total credit market debt
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
Other liabilities
Official foreign exchange
Treasury currency and special drawing rights
certificates
Life insurance reserves
Pension fund reserves
Interbank claims
Deposits at financial institutions
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Foreign deposits
Mutual fund shares
Security credit
Trade debt
Taxes payable
Investment in bank personal trusts
Miscellaneous
54 Total liabilities
12,678.2
13,536.5 14,169.3 14,984.7 14,169.3 14,325.1 14,532.7
53.6
61.3
55.4
51.8
55.4
52.7
54.4
55.4
51.8
54.5
53.9
23.8
354.3
3,356.1
32.4
4,736.7
888.6
2,277.4
603.4
428.1
396.5
142.8
566.2
133.9
904.2
81.8
503.2
2,591.1
26.3
380.0
3,400.3
64.0
4,836.8
932.8
2,336.3
537.7
498.4
372.3
159.4
602.1
137.4
936.4
77.4
509.9
2,732.4
26.3
405.7
4,056.5
65.2
4,885.2
1,008.5
2,353.0
476.9
539.6
355.8
151.3
813.9
188.9
926.7
68.9
596.7
2,884.3
24.5
434.1
4,420.2
116.8
4,892.1
1,131.0
2,292.2
397.2
543.6
389.4
138.8
1,050.2
217.3
984.7
76.6
619.1
3,052.8
26.3
405.7
4,056.5
65.2
4,885.2
1,008.5
2,353.0
476.9
539.6
355.8
151.3
813.9
188.9
926.7
68.9
596.7
2,884.3
26.3
414.2
4,077.9
64.6
4,878.6
984.3
2,351.3
459.2
572.0
367.0
144.7
860.4
194.6
938.0
73.1
612.9
2,891.2
26.4
419.8
4,134.5
70.8
4,870.2
1,032.3
2,325.8
427.5
557.2
393.5
133.9
928.3
193.3
950.0
70.7
612.7
2,951.9
26.5
426.7
4,265.7
103.7
4,909.2
1,071.6
2,303.7
418.4
553.2
417.6
144.6
971.2
214.5
970.5
74.5
610.9
3,023.6
24.5
434.1
4,420.2
116.8
4,892.1
1,131.0
2,292.2
397.2
543.6
389.4
138.8
1,050.2
217.3
984.7
76.6
619.1
3,052.8
24.6
447.0
4,560.8
111.4
4,886.8
1,093.4
2,261.6
397.7
556.6
443.5
134.1
1,155.7
225.1
982.6
81.3
625.0
3,086.1
24.7
457.2
4,618.3
118.2
4,941.5
1,170.7
2,249.2
388.7
549.9
448.2
134.7
1,256.5
234.5
991.5
78.6
635.6
3,145.5
26,015.5 27,300.7 29,143.0 30,924.9 29,143.0 29,409.7
29,815.8 30,418.2 30,924.9 31,345.6 31,858.4
Financial assets not included in liabilities (+)
55 Gold and special drawing rights
56 Corporate equities
5 7 Household equity in noncorporate business
21.0
3,812.9
2,508.1
22.0
3,543.7
2,440.6
22.3
4,869.4
2,344.6
19.6
5,540.6
2,269.2
22.3
4,869.4
2,344.6
22.0
4,925.6
2,353.5
22.7
4,837.0
2,337.5
23.2
4,995.4
2,316.3
19.6
5,540.6
2,269.2
19.8
5,725.7
2,239.9
20.0
5,743.8
2,248.0
Floats not included in assets ( - )
58 U.S. government checkable deposits
59 Other checkable deposits
60 Trade credit
6.1
26.5
-148.6
15.0
28.9
-146.0
3.8
30.9
-144.1
6.8
32.5
-121.8
3.8
30.9
-144.1
.9
29.5
-142.7
1.4
32.6
-151.1
4.0
23.3
-144.0
6.8
32.5
-121.8
3.4
22.2
-129.5
3.5
22.1
-141.9
-4.3
-31.0
13.7
20.6
-210.7
-4.1
-32.0
-17.7
17.8
-213.4
-4.8
-4.2
-12.5
15.5
-254.6
-5.0
-8.4
18.6
28.5
-265.7
-4.8
-4.2
-12.5
15.5
-254.6
-4.9
-1.8
-4.8
10.4
-295.1
-4.9
-4.0
19.6
18.9
-293.7
-5.0
-4.3
33.6
24.0
-279.6
-5.0
-8.4
18.6
28.5
-265.7
-5.0
-5.2
67.1
27.9
-291.7
-5.1
-4.5
71.9
28.3
-295.7
61
62
63
64
65
Liabilities not identified as assets ( - )
Treasury currency
Interbank claims
Security repurchase agreements
Taxes payable
Miscellaneous
66 Total identified to sectors as assets
32,685.1 33,658.6 36,749.2 39,068.7 36,749.2 37,119.2 37,394.2 38,101.1 39,068.7 39,641.7 40,191.5
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical
release, tables L.6 and L.7. For ordering address, see inside front cover.
2. Excludes corporate equities and mutual fund shares,
Selected Measures
2.10
NONFINANCIAL BUSINESS ACTIVITY
A45
Selected Measures
Monthly data seasonally adjusted, and indexes 1987= 100, except as noted
1993
Measure
1990
1991
1992
Jan.
Feb.
Mar.
Apr.
May"
June"
July"
Aug.
Sept.
1 Industrial production1
106.0
104.1
106.5
109.3
109.9
110.1
110.4
110.2
110.5
110.7
110.9
111.0
Market groupings
? Products, total
3
Consumer goods
4
5
Equipment
6 Intermediate
7 Materials
105.5
107.0
103.4
112.1
101.2
106.8
103.1
105.3
102.8
108.9
96.5
105.5
105.6
108.2
105.2
112.7
97.6
107.9
108.5
111.9
107.6
118.1
98.2
110.4
109.2
112.4
108.5
118.0
99.3
110.9
109.5
112.7
108.6
118.7
99.6
110.9
109.6
112.8
108.1
119.7
100.0
111.5
109.3
112.5
107.3
119.9
99.7
111.6
109.4
112.7
107.3
120.4
99.4
112.1
109.8
113.0
107.5
120.8
100.2
112.0
109.8
113.0
107.2
121.3
100.1
112.4
110.0
113.3
107.2
122.2
100.0
112.5
Industry groupings
8 Manufacturing
106.1
103.7
106.9
109.9
110.5
110.8
111.4
111.3
111.3
111.5
111.6
112.0
9 Capacity utilization, manufacturing
(percent)
81.1
77.8
78.8
80.3
80.5
80.6
80.9
80.7
80.6
80.6
80.6
80.8
95.3
89.7
96. l r
100.0
95.0
94.0
94.0
91.0
104.0
98.0
99.0
101.0
11 Nonagricultural employment, total 4
17. Goods-producing, total
Manufacturing, total
13
Manufacturing, production workers . . .
14
15 Service-producing
16 Personal income, total
17 Wages and salary disbursements
Manufacturing
18
19 Disposable personal income
20 Retail sales6
107.3
101.2
100.6
100.2
109.8
122.9r
121.4r
113.4r
123.lr
120.2
106.2
96.6
97.1
96.3
109.3
127.6r
124.5r
113.7r
128.6r
121.3
106.4
94.9
95.8
95.3
110.0
135.3r
131.5r
117.8r
136.8r
127.2
107.1
93.2
94.4
94.3
111.6
137.4
131.4r
114.0r
138.9"
132.0
107.4
93.5
94.5
94.5
111.9
138.1"
131.6"
114.5"
139.6"
131.9
107.5
93.3
94.4
94.4
112.0
139.1"
131.6"
114.2"
140.8"
130.5
107.7
93.1
94.0
94.0
112.4
141.1"
135.7"
118.8"
142.5"
133.0
107.9
93.2
93.8
93.8
112.6
141.5
136.8
118.4
142.8
133.9
108.0
93.0
93.5
93.5
112.8
141.3
136.5
118.0
142.6
134.6
108.2
93.0
93.5
93.5
113.1
140.9
137.2
118.2
142.1
135.2
108.2
92.8
93.2
93.2
113.1
142.8
138.4
118.7
144.1
135.9
108.3
92.8
93.1
93.1
113.3
n.a.
n.a.
n.a.
n.a.
136.1
Prices7
71 Consumer (1982-84= 100)
22 Producer finished goods (1982=100)
130.7
119.2
136.2
121.7
140.3
123.2
142.6
124.2
143.1
124.5
143.6
124.7
144.0
125.5"
144.2
125.8
144.4
125.6
144.4
125.3
144.8
124.3
145.1
123.9
10 Construction contracts 3
1. A major revision of the industrial production index and the capacity
utilization rates was released in April 1990. See "Industrial Production: 1989
Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April
1990), pp. 187-204.
2. Ratio of index of production to index of capacity. Based on data from the
Federal Reserve, DRI McGraw-Hill, U.S. Department of Commerce, and other
sources.
3. Index of dollar value of total construction contracts, including residential,
nonresidential, and heavy engineering, from McGraw-Hill Information Systems
Company, F.W. Dodge Division.
4. Based on data from U.S. Department of Labor, Employment and Earnings.
Series covers employees only, excluding personnel in the armed forces.
5. Based on data from U.S. Department of Commerce, Survey of Current
Business.
2.11
6. Based on data from U.S. Department of Commerce, Survey of Current
Business.
7. Based on data not seasonally adjusted. Seasonally adjusted data for changes
in the price indexes can be obtained from the U.S. Department of Labor, Bureau
of Labor Statistics, Monthly Labor Review.
NOTE. Basic data (not indexes) for series mentioned in notes 4, 5,and 6, and
indexes for series mentioned in notes 3 and 7 can also be found in the Survey of
Current Business.
Figures for industrial production for the latest month are preliminary, and many
figures for the three months preceding the latest month have been revised. See
"Recent Developments in Industrial Capacity and Utilization," Federal Reserve
Bulletin, vol. 76 (June 1990), pp. 411-35. See also "Industrial Production Capacity
and Capacity Utilization since 1987," Federal Reserve Bulletin, vol. 79, (June
1993), p p .
590-605.
LABOR FORCE, EMPLOYMENT, A N D UNEMPLOYMENT
Thousands of persons; monthly data seasonally adjusted except as noted
1993
Category
1990
1991
1992
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
HOUSEHOLD SURVEY DATA
1 Noninstitutional population1
189,686
191,329
193,142
194,298
194,456
194,618
194,767
194,933
195,104
195,275
195,453
?
3
126,424
124,787
126,867
125,303
128,548
126,982
128,839
127,327
128,926
127,429
128,833
127,341
129,615
128,131
129,604
128,127
129,541
128,070
129,852
128,370
129,457
127,975
114,728
3,186
114,644
3,233
114,391
3,207
115,335
3,116
115,483
3,082
115,356
3,060
116,203
3,070
116,195
3,024
116,262
3,039
116,729
2,980
116,362
3,095
6,874
5.5
63,262
8,426
6.7
64,462
9,384
7.4
64,594
8,876
7.0
65,459
8,864
7.0
65,530
8,925
7.0
65,785
8,858
6.9
65,152
8,908
7.0
65,329
8,769
6.8
65,563
8,661
6.7
65,423
8,517
6.7
65,996
109,419
108,256
108,519
109,539
109,565
109,820
110,058
110,101"
110,338"
110,297
110,453
17,760"
595"
4,593"
5,709"
25,916"
6,604"
30,320"
18,841
17,712
592
4,591
5,693
25,903
6,601
30,370
18,835
17,694
597
4,5%
5,705
25,948
6,611
30,3%
18,906
Civilian labor force
Nonagricultural industries
Agriculture
Unemployment
Number
7
Rate (percent of civilian labor force)
8 Not in labor force
4
5
ESTABLISHMENT SURVEY DATA
9 Nonagricultural payroll employment3
10
11
1?
13
14
15
16
17
Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Government
19,117
709
5,120
5,793
25,774
6,709
27,934
18,304
18,455
689
4,650
5,762
25,365
6,646
28,336
18,402
18,192
631
4,471
5,709
25,391
6,571
29,053
18,653
1. Persons sixteen years of age and older, including Resident Armed Forces.
Monthly figures are based on sample data collected during the calendar week that
contains the twelfth day; annual data are averages of monthly figures. By
definition, seasonality does not exist in population figures.
2. Includes self-employed, unpaid family, and domestic service workers.
3. Includes all full- and part-time employees who worked during, or received
17,954
600
4,515
5,725
25,726
6,577
29,665
18,777
17,935
600
4,481
5,724
25,707
6,574
29,756
18,788
17,863
600
4,517
5,720
25,758
6,585
29,977
18,800
17,827
602
4,577
5,719
25,827
6,588
30,099
18,819
17,771"
596
4,574"
5,711"
25,861"
6,590"
30,175"
18,823"
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 1984 benchmark,
and only seasonally adjusted data are available at this time.
SOURCE. Based on data from U.S. Department of Labor, Employment and
Earnings.
A46
2.12
Domestic Nonfinancial Statistics • December 1993
OUTPUT, CAPACITY, A N D CAPACITY
UTILIZATION1
Seasonally adjusted
1992
Q4
1993
Ql
Q2
1992
Q3
Output (1987=100)
Q4
1992
1993
Ql
Q2
Q3
Capacity (percent of 1987 output)
1993
Q4
Ql
Q2r
Q3
Capacity utilization rate (percent) 2
1 Total industry
108.3
109.7
110.4
110.9
134.2
134.8
135.3
135.9
80.7
81.4
81.6
2 Manufacturing
108.7
110.4
111.3
111.7
136.6
137.2
137.8
138.5
79.6
80.5
80.8
80.7
Primary processing3
Advanced processing
104.7
110.6
106.4
112.3
107.2
113.2
107.9
113.5
126.6
141.3
126.8
142.1
127.1
142.9
127.4
143.7
82.7
78.3
83.9
79.0
84.3
79.2
84.7
79.0
5
6
7
8
9
10
11
12
13
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Nonelectrical machinery
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment .
110.8
98.5
101.5
105.0
96.7
132.4
124.0
111.4
113.6
99.7
105.0
109.1
99.3
137.1
127.1
120.6
114.8
97.3
104.8
109.1
98.8
144.2
129.6
117.6
115.6
99.4
105.9
111.1
98.6
149.0
132.7
111.6
142.6
112.5
125.0
129.9
118.2
162.1
152.6
154.5
143.4
112.6
124.9
129.8
118.1
163.7
154.1
155.8
144.1
112.7
124.9
130.0
117.9
165.5
155.7
156.8
144.9
112.9
124.9
130.1
117.7
167.3
157.3
157.7
77.7
87.6
81.2
80.8
81.8
81.7
81.2
72.1
79.2
88.5
84.1
84.1
84.1
83.8
82.5
77.4
79.7
86.3
83.9
84.0
83.8
87.1
83.2
75.0
79.8
88.0
84.8
85.4
83.8
89.1
84.3
70.7
97.7
95.7
93.2
91.4
135.8
135.7
135.5
135.4
72.0
70.5
68.8
67.5
14
15
16
17
18
19
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
106.1
105.2
107.9
116.9
106.6
104.2
106.5
106.2
110.0
116.9
111.7
104.2
107.0
106.1
113.1
118.3
113.1
103.9
107.0
107.2
113.4
118.5
129.6
116.9
122.5
144.4
129.5
115.9
130.1
117.1
122.9
145.4
130.5
115.7
130.6
117.3
123.3
146.3
115.4
82.1
90.1
88.4
81.4
82.8
89.7
82.2
90.8
89.8
80.9
86.2
89.9
82.3
90.6
92.0
81.4
86.7
89.8
81.9
91.4
92.0
81.0
103.2
129.1
116.7
122.1
143.5
128.8
116.2
89.4
97.9
114.7
114.3
96.5
116.0
115.2
97.2
113.8
114.7
97.5
115.7
116.6
112.0
131.8
128.5
111.7
132.2
129.0
111.5
132.5
129.4
111.3
132.9
129.9
87.4
87.1
89.0
86.3
87.8
89.3
87.2
85.9
88.6
87.6
87.1
89.7
1973
1975
Previous cycle2
High
Low
High
July r
Aug. r
Sept. p
3
4
20 Mining
21 Utilities
22 Electric
Low
Latest cycle3
1992
Low
Sept.
High
81.6
1993
Apr.
May
June r
Capacity utilization rate (percent)2
1 Total industry
99.0
82.7
87.3
71.8
84.8
78.3
79.3
81.7
81.5
81.5
81.6
81.6
81.6
2 Manufacturing
99.0
82.7
87.3
70.0
85.1
76.6
78.4
80.9
80.7r
80.6
80.6
80.6
80.8
Primary processing3
Advanced processing4
99.0
99.0
82.7
82.7
89.7
86.3
66.8
71.4
89.1
83.3
77.9
76.1
81.7
77.0
84.3
79.5
84.2r
79.3r
84.5
78.9
84.6
79.0
84.7
78.9
84.7
79.1
5
6
7
8
9
10
11
12
13
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Nonelectrical machinery
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment.
99.0
99.0
99.0
99.0
99.0
99.0
99.0
99.0
82.7
82.7
82.7
82.7
82.7
82.7
82.7
82.7
86.9
87.6
102.4
110.4
90.5
92.1
89.4
93.0
65.0
60.9
46.8
38.3
62.2
64.9
71.1
44.5
83.9
93.3
92.9
95.7
88.9
83.7
84.9
84.5
73.8
76.8
74.3
72.3
75.9
73.0
76.8
57.9
76.1
84.3
78.2
78.3
78.1
79.4
80.1
66.8
79.9
87.1
83.6
83.4
83.9
86.6
83.1
77.0
79.7 r
86.4
83.5r
83.2
83.9r
87.l r
83.3
75.3
79.4
85.5
84.6
85.3
83.6
87.5
83.3
72.7
79.7
87.8
84.5
86.0
82.2
88.7
84.4
70.0
79.6
87.6
85.3
85.7
84.8
89.0
84.3
69.8
80.0
88.6
84.4
84.4
84.5
89.5
84.4
72.4
99.0
82.7
81.1
66.9
88.3
78.1
72.7
69.5
69.1
67.7
67.8
67.6
67.2
14
15
16
17
18
19
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
99.0
99.0
99.0
99.0
99.0
99.0
82.7
82.7
82.7
82.7
82.7
82.7
87.0
91.7
94.2
85.1
90.9
89.5
76.9
73.8
82.0
70.1
63.4
68.2
86.8
92.1
94.9
85.9
97.0
88.5
80.4
78.7
86.0
78.5
75.5
84.2
81.7
90.1
89.9
80.6
85.4
86.8
82.3
89.0
92.2
81.2
87.7
90.1
82.2r
91.2
91.2r
81.3
85.7
89.6
82.3
91.4
92.8
81.7
86.7
89.9
81.9
91.8
91.9
81.0
85.0
88.6
81.9
91.0
92.2
81.0
81.9
91.5
91.9
80.9
88.5
91.1
99.0
99.0
99.0
82.7
82.7
82.7
96.6
88.3
88.3
80.6
76.2
78.7
87.0
92.6
94.8
86.8
83.4
87.4
86.5
84.5
86.6
86.4
86.4
88.6
87.2r
84.6r
88. l r
87.9
86.6
89.2
87.3
87.5
90.3
87.2
88.3
91.3
88.3
85.4
87.7
3
4
20 Mining
21 Utilities
22 Electric
1. Data in this table also appear in the Board's G.17 (419) monthly statistical
release. For ordering address, see inside front cover. For a detailed description of
the series, see "Recent Developments in Industrial Capacity and Utilization,"
Federal Reserve Bulletin, vol. 76 (June 1990), pp. 411-35. See also "Industrial
Production Capacity and Capacity Utilization Since 1987," Federal Reserve
Bulletin, vol. 79, (June 1993), pp. 590-605.
2. Capacity utilization is calculated as the ratio of the Federal Reserve's
seasonally adjusted index of industrial production to the corresponding index of
capacity.
3. Primary processing includes textiles; lumber; paper; industrial chemicals;
petroleum refining; rubber and plastics; stone, clay, and glass; and primary and
fabricated metals.
4. Advanced processing includes food, tobacco, apparel, furniture, printing,
chemical products such as drugs and toiletries, leather and products, machinery,
transportation equipment, instruments, miscellaneous manufacturing, and ordnance.
5. Monthly highs, 1978 through 1980; monthly lows, 1982.
6. Monthly highs, 1988-89; monthly lows, 1990-91.
Selected Measures
2.13
INDUSTRIAL PRODUCTION
A47
Indexes and Gross Value 1
Monthly data seasonally adjusted
Group
1987
proportion
1993
1992
1992
avg.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
Ma/
June r
July r
Aug. r
Sept.P
Index (1987 = 100)
MAJOR M A R K E T S
1 Total index
?
4
6
7
8
9
10
11
1?
11
14
If
16
17
18
19
70
71
22
71
74
?5
76
77
78
79
10
11
17
33
14
15
36
17
18
19
40
41
47
41
44
45
46
47
48
49
50
Final products
Consumer goods, total
Durable consumer goods
Automotive products
Autos and trucks
Autos, consumer
Trucks, consumer
Auto parts and allied goods...
Other
Appliances, A/C, and TV
Carpeting and furniture
Miscellaneous home goods . . .
Nondurable consumer goods
Foods and tobacco
Clothing
Chemical products
Paper products
Energy
Fuels
Residential utilities
Business equipment
Information processing and related ..
Office and computing
Transit
Other
Defense and space equipment
Oil and gas well drilling
Manufactured homes
Intermediate products, total
Construction supplies
Business supplies
Durable goods materials
Durable consumer parts
Equipment parts
Other
Basic metal materials
Nondurable goods materials
Pulp and paper materials
Chemical materials
Other
Primary energy
Converted fuel materials
100.0
106.5
106.2
107.5
108.4
108.9
109.3
109.9
110.1
110.4
110.2
110.5
110.7
110.9
111.0
60.8
46.0
26.0
5.6
2.5
1.5
.9
.6
1.0
3.1
.8
.9
1.4
20.4
9.1
2.6
3.5
2.5
2.7
.7
2.0
105.6
108.2
105.2
102.5
99.4
96.9
79.0
127.9
103.7
105.2
110.4
99.9
105.6
105.9
104.7
95.0
118.7
100.8
108.3
104.7
109.6
105.3
108.1
104.4
100.9
97.3
93.5
77.9
120.4
103.7
104.1
112.9
98.2
102.9
105.3
104.9
94.3
118.5
100.4
104.6
103.5
105.1
107.1
110.1
106.4
104.1
103.1
101.5
78.5
141.3
105.9
104.9
110.8
98.5
105.8
107.1
105.9
94.5
121.1
100.1
111.1
109.8
111.6
107.8
111.0
107.1
105.7
104.1
102.9
79.6
143.3
106.0
107.1
110.8
103.7
107.1
107.5
105.2
95.9
123.3
100.9
112.0
107.7
113.6
108.2
111.5
107.5
107.9
108.7
111.7
86.9
154.6
103.8
107.2
110.5
105.4
106.6
107.4
104.8
96.0
121.7
100.9
114.4
106.1
117.5
108.5
111.9
107.6
110.9
112.7
116.8
86.6
169.1
105.8
109.3
116.0
105.5
108.0
106.7
104.6
95.7
122.4
100.2
109.5
106.5
110.7
109.2
112.4
108.5
111.3
111.9
114.6
90.2
156.9
107.4
110.7
117.6
106.7
109.5
107.7
105.5
95.0
121.1
101.8
115.5
108.9
118.0
109.5
112.7
108.6
111.5
111.2
113.4
90.5
153.1
107.5
111.7
125.0
104.5
108.9
107.7
104.3
94.6
123.7
102.1
116.0
107.1
119.5
109.6
112.8
108.1
112.2
112.1
114.3
90.2
155.9
108.5
112.3
124.3
106.2
109.6
106.9
103.9
94.9
123.1
101.7
111.5
106.6
113.4
109.3
112.5
107.3
110.8
109.7
110.1
86.5
150.9
109.1
111.8
121.1
108.9
108.4
106.3
104.3
94.2
122.6
101.8
107.4
106.5
107.7
109.4
112.7
107.3
107.9
105.3
105.0
83.5
142.3
105.8
110.2
116.1
109.1
107.6
107.2
104.7
94.6
123.0
102.6
110.4
105.8
112.2
109.8
113.0
107.5
109.0
103.3
100.3
78.2
138.6
108.4
114.1
130.4
110.1
107.4
107.1
104.5
93.6
123.6
101.6
112.1
105.0
114.9
109.8
113.0
107.2
107.7
102.8
99.2
71.8
146.7
108.7
112.0
122.4
109.2
107.8
107.1
104.9
93.3
122.7
100.9
112.7
104.5
115.9
110.0
113.3
107.2
108.6
105.8
104.1
75.4
153.9
108.7
111.1
118.9
108.6
108.2
106.8
104.8
92.4
122.7
101.4
110.9
109.6
111.4
20.0
13.9
5.6
1.9
4.0
2.5
1.2
1.9
5.4
.6
.2
112.7
123.2
134.7
168.3
108.5
137.1
117.9
104.7
85.9
78.3
99.7
113.5
125.0
138.2
178.3
109.6
134.5
114.7
107.3
84.4
76.3
100.9
115.4
127.5
142.2
183.1
110.1
137.4
121.7
108.8
83.5
82.7
110.4
116.7
129.0
142.9
184.5
112.0
140.4
123.9
110.7
83.2
86.4
118.5
117.2
129.6
143.2
186.4
112.3
144.1
131.4
109.2
82.5
91.2
128.6
118.1
131.2
144.4
192.0
113.1
146.7
136.7
112.6
82.0
89.0
129.4
118.0
131.7
146.1
198.0
112.2
146.5
136.8
113.4
81.5
77.9
127.1
118.7
133.4
149.1
203.3
113.7
145.0
135.8
114.9
80.7
71.1
116.2
119.7
134.8
150.6
209.5
115.0
145.0
136.2
117.5
80.5
72.4
114.9
119.9
135.4
153.5
216.5
115.0
142.5
133.1
116.2
79.5
75.1
112.1
120.4
136.1
155.7
221.0
115.6
138.0
127.2
117.6
78.6
82.4
113.6
120.8
136.6
157.7
226.0
116.6
133.2
118.9
118.6
78.5
81.0
118.5
121.3
137.1
158.3
230.0
116.8
132.9
119.6
120.7
78.2
87.8
116.2
122.2
138.3
159.6
233.0
116.9
136.3
126.5
121.1
78.0
90.5
14.7
6.0
8.7
97.6
93.8
100.1
96.9
93.0
99.5
97.8
94.7
99.9
98.1
95.1
100.0
98.3
94.5
100.8
98.2
94.8
100.5
99.3
97.5
100.5
99.6
96.4
101.8
100.0
96.4
102.5
99.7
97.7
101.0
99.4
96.8
101.1
100.2
98.2
101.5
100.1
98.3
101.4
100.0
98.9
100.7
39.2
19.4
4.2
7.3
7.9
2.8
9.0
1.2
1.9
3.8
2.1
10.9
7.2
3.7
107.9
108.9
101.5
116.5
106.0
108.3
110.9
102.8
109.9
114.2
110.4
103.4
99.7
110.6
107.4
107.6
98.5
116.2
104.6
105.8
111.7
103.3
112.3
114.5
110.5
103.6
99.6
111.4
108.1
109.7
101.8
118.3
106.2
108.3
110.7
102.7
109.1
114.4
109.7
103.0
99.4
110.0
109.3
104.3
119.3
107.4
109.8
112.0
103.4
110.2
115.6
112.0
103.9
100.2
110.4
113.3
110.8
120.4
108.6
110.4
112.4
104.2
110.7
114.9
114.1
103.4
100.4
109.1
110.9
114.2
111.8
121.0
109.7
113.2
112.1
103.2
111.9
114.6
112.5
103.8
98.3
114.6
110.9
114.1
112.2
121.3
108.9
109.9
112.8
104.2
112.8
115.6
112.6
103.5
97.4
115.4
111.5
114.9
112.6
122.7
109.5
110.3
113.8
102.7
115.3
116.1
114.2
103.4
99.9
110.3
111.6
114.8
111.6
123.5
109.2
111.1
110.0
111.9
107.5
119.7
107.5
108.8
111.5
102.9
110.7
114.6
111.3
105.1
101.3
112.4
114.1
104.3
114.1
117.2
113.6
103.4
101.6
106.8
112.1
114.9
110.2
124.1
109.4
111.3
114.8
104.9
115.9
118.6
112.3
104.6
100.9
111.7
112.0
115.3
109.6
124.7
110.0
111.5
114.3
105.7
114.0
117.4
113.6
104.2
99.1
114.0
112.4
115.6
110.1
125.7
109.7
110.8
114.8
104.8
114.0
118.9
113.7
104.4
99.3
114.5
97.3
95.3
106.6
106.6
106.3
106.4
107.4
107.5
108.4
108.4
108.6
108.6
108.9
108.7
109.5
109.3
109.7
109.6
110.1
109.9
110.0
109.8
110.4
110.3
110.8
110.7
110.9
110.9
97.5
105.0
104.5
105.7
106.6
107.1
107.3
107.8
107.8
108.0
107.7
107.8
108.0
108.0
108.1
24.5
23.3
105.7
104.8
105.1
104.3
106.8
105.9
107.4
106.6
107.3
106.8
107.0
107.4
108.1
107.7
108.2
107.7
107.6
107.6
107.1
107.3
107.5
107.0
108.1
107.0
107.8
106.6
107.4
106.7
12.7
123.7
125.9
128.0
129.5
129.5
130.7
131.3
133.2
134.6
135.6
136.8
138.1
138.6
139.3
120.6
113.6
121.6
113.7
122.2
114.6
121.8
114.6
121.8
114.9
121.5
115.0
121.5
115.4
122.3
116.0
111.1
111.1
112.5
116.3
111.1
127.1
109.8
110.7
115.1
105.7
113.5
119.3
114.2
103.3
99.1
111.5
SPECIAL AGGREGATES
51 Total excluding autos and trucks
52 Total excluding motor vehicles and parts...
51 Total excluding office and computing
machines
54 Consumer goods excluding autos and
55 Consumer goods excluding energy
56 Business equipment excluding autos and
trucks
57 Business equipment excluding office and
computing equipment
58 Materials excluding energy
12.0
28.4
115.7
109.5
116.1
108.8
118.1
110.0
119.7
111.4
120.1
111.8
121.0
113.0
111.0 111.0
A48
2.13
Domestic Nonfinancial Statistics • December 1993
INDUSTRIAL PRODUCTION
Group
SIC
code 2
1987
proportion
Indexes and Gross Value 1 —Continued
1992
1992
avg.
Sept.
Oct.
Nov.
Dec
Jan.
Feb.
Mar.
Apr.
May r
June r
July r
Aug. r
Sept.?
Index (1987 = 100)
MAJOR INDUSTRIES
59 Total index
100.0
106.5
106.2
107.5
108.4
108.9
109.3
109.9
110.1
110.4
110.2
110.5
110.7
110.9
111.0
60 Manufacturing
61
Primary processing
62 Advanced processing
84.3
27.1
57.1
106.9
103.8
108.3
106.8
103.3
108.4
108.0
104.1
109.9
108.9
105.1
110.7
109.2
105.0
111.3
109.9
105.8
111.9
110.5
106.9
112.2
110.8
106.4
112.9
111.4
107.1
113.4
111.3
107.1
113.3
111.3
107.5
113.0
111.5
107.7
113.3
111.6
108.0
113.3
112.0
108.1
113.9
63
64
65
66
Durable goods
'"24
Lumber and p r o d u c t s . . .
25
Furniture and fixtures...
Clay, glass, and stone
32
products
33
Primary metals
331,2
Iron and steel
Raw steel
333-6,9
Nonferrous
Fabricated metal
34
products
Industrial and commercial
machinery and
35
computer equipment .
Office and computing
357
machines
36
Electrical machinery
Transportation
37
equipment
Motor vehicles and
371
parts
Autos and light
trucks
Aerospace and miscellaneous transportation equipment... 3 7 2 - 6 , 9
38
Instruments
39
Miscellaneous
46.5
2.1
1.5
108.1
96.4
99.0
108.1
94.7
100.5
109.8
97.8
100.4
110.9
99.8
102.3
111.8
98.0
103.9
112.9
99.3
105.2
113.8
101.8
106.0
114.1
98.0
107.3
115.0
98.1
108.8
114.9
97.4
108.4
114.6
96.5
109.5
115.2
99.1
111.1
115.4
98.9
111.2
116.1
100.1
110.4
2.4
3.3
1.9
.1
1.4
96.0
101.1
104.7
101.2
96.1
96.5
98.0
102.0
98.9
92.4
96.8
100.5
104.1
99.8
95.6
97.6
101.6
103.6
102.8
98.7
98.0
102.4
107.4
104.6
95.7
97.0
102.8
107.0
103.4
97.1
98.9
108.0
112.9
105.9
101.4
98.6
104.2
107.6
102.0
99.4
99.8
104.4
108.4
102.6
98.9
99.6
104.2
108.1
105.1
98.9
100.5
105.7
110.9
106.8
98.5
101.1
105.5
111.9
108.2
96.8
100.7
106.6
111.5
106.2
99.8
101.2
105.5
109.9
5.4
96.7
96.5
97.5
97.6
97.8
99.8
99.7
100.3
101.4
100.6
100.1
101.0
100.7
100.3
8.5
124.8
127.9
130.6
132.8
133.8
135.0
136.7
139.6
142.8
144.2
145.4
147.8
148.9
150.2
2.3
6.9
168.3
119.8
178.3
121.5
183.1
122.6
184.5
124.4
186.4
124.8
192.0
125.8
198.0
127.1
203.3
128.5
209.5
129.0
216.5
129.7
221.0
130.1
226.0
132.3
230.0
132.6
233.0
133.2
9.9
102.6
100.5
103.0
103.6
106.3
108.4
107.8
106.9
106.9
105.5
102.6
100.7
100.5
102.3
4.8
104.8
102.6
108.0
109.9
116.2
120.9
120.7
120.1
120.4
118.1
114.3
110.1
110.2
114.5
2.2
101.4
97.9
104.1
105.4
114.4
118.2
117.8
116.9
117.5
113.1
108.2
102.8
99.9
104.8
5.1
5.1
1.3
100.6
104.2
109.7
98.6
103.7
108.7
98.3
103.7
110.5
97.7
103.6
111.4
97.1
103.3
111.8
96.7
103.0
110.9
95.8
102.2
111.9
94.6
103.3
112.6
94.2
102.6
114.3
93.7
102.5
113.1
91.8
102.5
112.1
91.8
102.4
112.3
91.4
101.6
112.4
90.9
102.0
113.9
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 . . .
"20
21
22
23
26
27
28
29
37.8
8.8
1.0
1.8
2.3
3.6
6.5
8.8
1.3
105.4
106.0
99.2
104.7
92.3
108.2
95.0
115.0
102.0
105.2
105.6
101.7
105.1
91.5
109.5
94.1
115.2
101.1
105.8
106.8
102.4
103.5
91.7
107.3
94.5
116.2
105.3
106.4
106.4
101.9
106.0
92.9
108.2
94.2
117.7
103.9
106.0
106.2
96.1
106.0
92.7
108.3
94.7
116.7
103.4
106.4
105.9
100.5
106.9
93.1
108.6
94.7
116.8
103.2
106.4
106.9
99.3
106.2
92.5
110.4
94.0
116.2
104.7
106.6
106.7
92.4
105.4
92.1
111.1
94.7
117.6
104.7
106.9
106.7
90.2
104.2
92.0
113.1
95.6
117.8
104.3
106.9
106.7
92.1
106.9
91.2
112.1
94.7
118.1
103.6
107.2
107.1
89.1
107.1
91.1
114.2
94.5
119.1
103.9
106.9
106.7
92.0
107.6
90.7
113.2
93.8
118.3
102.4
107.0
107.1
92.9
106.7
90.6
113.7
93.2
118.6
102.1
107.1
107.0
94.1
107.4
89.6
113.4
93.3
118.7
105.1
30
31
3.2
.3
109.7
92.6
108.5
93.8
109.9
95.1
111.3
96.6
111.3
96.7
113.6
97.1
112.7
99.0
112.9
99.1
113.6
100.1
113.8
98.2
112.8
97.0
114.2
96.8
114.4
96.6
114.5
97.6
"lO
11,12
13
14
8.0
.3
1.2
5.8
.7
97.6
161.7
105.5
92.6
93.8
97.1
159.8
103.6
92.7
91.9
97.6
168.1
103.8
92.7
93.6
97.8
171.6
103.5
92.8
94.4
98.2
158.1
107.9
93.4
92.6
98.3
167.7
108.2
92.7
93.8
95.9
163.0
101.7
90.9
95.2
95.3
158.2
102.3
90.4
93.4
96.4
162.5
108.2
90.5
92.3
97.3
169.3
106.4
91.6
94.0
98.0
164.4
106.7
93.1
91.7
97.2
167.8
101.0
92.8
93.2
97.1
157.4
95.9
94.1
95.0
98.2
164.0
102.1
93.9
95.3
7.7
6.1
1.6
112.0
111.6
113.2
111.2
110.9
112.0
112.7
49i,3PT
492,3PT
112.6
113.2
114.7
114.1
117.3
116.8
116.4
118.2
112.8
112.9
112.4
117.5
116.5
121.4
117.8
116.3
123.3
114.4
114.5
113.9
112.1
114.0
104.9
114.9
115.6
112.2
116.2
117.2
112.6
117.3
118.6
112.6
113.6
114.0
112.4
79.5
107.0
107.1
108.0
108.8
108.8
109.3
109.8
110.2
110.8
110.9
111.1
111.6
111.7
111.9
81.9
105.1
104.8
105.9
106.7
107.0
107.6
108.0
108.1
108.6
108.3
108.1
108.2
108.2
108.6
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92 Mining
93
Metal
94
Coal
95
Oil and gas extraction
96
Stone and earth minerals . .
97 Utilities
98
Electric
99 Gas
993
SPECIAL AGGREGATES
100 Manufacturing excluding
motor vehicles and
parts
101 Manufacturing excluding
office and computing
machines
Gross value (billions of 1987 dollars, annual rates)
MAJOR MARKETS
102 Products, total
1,707.0 1,806.4 1,799.9 1,835.6 1,846.7 1,857.5 1,864.9 1,880.2 1,880.3 1,882.8 1,872.6 1,873.2 1,875.5 1,872.4 1,881.7
103 Final
104 Consumer goods
105 Equipment
106 Intermediate
1,314.6 1,420.1 1,415.7 1,448.1 1,457.1 1,466.8 1,476.4 1,485.7 1,484.3 1,485.6 1,477.9 1,477.5 1,477.7 1,475.2 1,485.3
905.1
866.6
913.0
928.4
936.3
931.6
940.0
949.4
946.1
943.6
936.1
935.5
936.0
931.7
936.4
507.1
510.6
448.0
519.7
525.5
530.5
536.5
536.3
538.2
541.9
541.8
541.9
541.7
543.5
548.9
386.4
392.5
384.2
387.4
390.7
389.6
388.4
394.5
396.0
397.3
394.7
397.1
395.7
397.8
396.4
1. Data in this table also appear in the Board's G.17 (419) monthly statistical
release. For ordering address, see inside front cover.
A revision of the industrial production index and the capacity utilization rates
was released in May 1993. See "Industrial Production, Capacity, and Capacity
Utilization since 1987," Federal Reserve Bulletin, vol. 79 (June 1993), pp. 590-605.
2. Standard industrial classification.
Selected Measures
2.14
A49
HOUSING A N D CONSTRUCTION
Monthly figures at seasonally adjusted annual rates except as noted
1992
Item
1990
1991
1993
1992
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Private residential real estate activity (thousands of units except as noted)
NEW UNITS
1,121
919
202
1,248
1,107
141
645
515
130
1,129
987
142
230
1,115
925
190
1,248
1,079
169
649
517
132
1,158
987
171
237
1,162
977
185
1,232
1,064
168
661
528
133
1,084
942
142
241
1,242
1,015
227
1,314
1,176
138
668
537
131
1,207
1,047
160
245
6891
271
629
274
647
274
636
277
616
288
125.0
146.6
127.0
148.4R
129.9
152.3
123.0
145.8
123.0
142.4
128.0
153.6
3,460
3,370
3,450
3,620
3,680
3,860
3,810
103.6
129.6
105.1
131.5
105.8
133.0
106.5
132.8
109.3
137.4
108.5
136.0
109.0
135.8
Permits authorized
7 One-family
Two-or-more-family
3
4 Started
One-family
Two-or-more-family
6
1
7 Under construction at end of period ..
One-family
8
9
Two-or-more-family
1 0 Completed
One-family
11
Two-or-more-family
1?
1 3 Mobile homes shipped
1,111
794
317
1,193
895
298
711
449
262
1,308
966
342
188
949
754
195
1,014
840
174
606
434
173
1,091
838
253
171
1,095
911
184
1,200
1,030
169
612
473
140
1,158
964
194
210
1,136
963
173
1,226
1,089
137
641
498
143
1,229
1,002
227
244
1,196
1,037
159
1,286
1,133
153
644
501
143
1,227
1,016
211
266
1,157
972
185
1,171
1,051
120
641
506
135
1,136
980
156
267
1,141
957
184
1,180
1,036
144
641
508
133
1,241
1,049
192
262
1,034
871
163
1,124
987
137
635
502
133
1,108
995
113
247
14
15
Merchant builder activity in
one-family units
Number sold
Number for sale at end of period1 . . .
535
321
507
284
610
265
615
262
662
265
603
266
597
268
602
270
16
17
Price of units sold (thousands
of dollars)2
Median
Average
122.3
149.0
120.0
147.0
121.3
144.9
128.9
147.2
126.0
146.2
118.0
138.9
129.4
149.4
18
Number sold
3,211
3,219
3,520
3,860
4,040
3,780
19
20
Price of units sold (thousands
of dollars)2
Median
Average
95.2
118.3
99.7
127.4
103.6
130.8
102.7
128.8
104.2
131.0
103.1
129.4
1
1,101
925
176
1,206
1,059
147
637
506
131
1,222
1,075
147
241
EXISTING UNITS (one-family)
Value of new construction (millions of dollars)3
CONSTRUCTION
21 Total put in place
442,142 403,439 436,043 449,269 455,239
451,271
453,820
454,465 449,054r
453,256
460,680
461,250
455,964
77 Private
73 Residential
74 Nonresidential
75
Industrial buildings
Commercial buildings
76
Other buildings
71
Public utilities and other
28
334,681 293,536
182,856 157,837
151,825 135,699
23,849 22,281
62,866 48,482
21,591 20,797
43,519 44,139
317,256 328,196 335,354
187,820 199,304 206,417
129,436 128,892 128,937
19,961
20,720
19,246
41,523 41,143 39,602
21,494
21,517 20,900
45,699 46,986 48,474
335,484
207,214
128,270
19,600
41,414
21,123
46,133
334,801 336,972 328,1501
205,730 205,519 197,317r
129,071 131,453 130,833r
20,484
22,152 19,458r
42,317
41,323 42,426r
21,564 21,484 22,568r
44,706 46,494 46,381r
332,231
198,380
133,851
20,091
42,428
23,293
48,039
335,028
200,4%
134,532
19,316
42,723
23,849
48,644
332,652
200,383
132,269
19,681
41,358
23,776
47,454
331,338
201,495
129,843
19,282
40,424
24,233
45,904
79 Public
30 Military
31 Highway
37 Conservation and development...
33 Other
107,461
2,664
32,108
4,557
68,132
118,784
2,502
34,929
5,918
75,435
119,885
2,394
33,411
8,144
75,936
115,786
2,621
30,648
5,732
76,785
119,019
2,703
33,009
6,688
76,619
117,493 120,904r
2,586
2,533r
33,413 34,534 r
5,875
7,112
74,382 77,962r
121,025
2,393
34,320
6,019
78,293
125,652
2,234
37,649
6,103
79,666
128,599
2,355
36,769
5,971
83,504
124,626
2,366
33,719
5,871
82,670
109,900
1,837
32,026
4,861
71,176
121,073
2,557
37,698
6,441
74,377
1. Not at annual rates.
2. Not seasonally adjusted.
3. Recent data on value of new construction may not be strictly comparable
with data for previous periods because of changes by the Bureau of the Census in
its estimating techniques. For a description of these changes, see Construction
Reports (C-30-76-5), issued by the Census Bureau in July 1976.
SOURCE. Bureau of the Census estimates for all series except (1) mobile homes,
which are private, domestic shipments as reported by the Manufactured Housing
Institute and seasonally adjusted by the Census Bureau, and (2) sales and prices
of existing units, which are published by the National Association of Realtors. All
back and current figures are available from the originating agency. Permit
authorizations are those reported to the Census Bureau from 17,000 jurisdictions
beginning in 1984.
A50
2.15
Domestic Nonfinancial Statistics • December 1993
CONSUMER A N D PRODUCER PRICES
Percentage changes based on seasonally adjusted data except as noted
Change from 12
months earlier
Item
Change from 3 months earlier
(annual rate)
1992
1992
Sept.
Change from 1 month earlier
1993
Index
level,
Sept
19931
1993'
1993
Sept.
Dec.
Mar.
June
Sept.
May
June
July
Aug.
Sept.
CONSUMER PRICES2
(1982-84=100)
1 All items
3.0
2.7
3.2
4.0
2.2
1.4
.1
.0
.1
.3
.0
145.1
2 Food
3 Energy items
4 All items less food and energy
5 Commodities
6
Services
1.8
2.2
3.3
2.5
3.6
1.9
-.7
3.2
1.5
4.0
1.4
1.9
3.8
1.5
4.7
2.6
3.1
4.3
4.6
4.4
1.4
-3.8
2.9
.6
4.1
1.7
-3.4
1.9
-.3
2.7
.4
-1.0
.2
.0
.3
-.4
-.2
.1
-.1
.2
.0
.0
.1
.0
.2
.3
-.5
.3
.3
.3
.1
-.4
.1
-.4
.2
141.1
105.2
152.9
135.1
163.1
7 Finished goods
8 Consumer foods
9 Consumer energy
10 Other consumer goods
11 Capital equipment
1.6
.5
2.1
2.2
1.5
.5
1.9
-1.6
-.3
1.7
-.3
3.3
-10.2
1.2
.6
4.3
-1.6
16.6
3.2
4.4
.6
1.3
-3.5
1.2
1.2
-2.5
4.6
-6.9
-6.4
1.2
.0
.0*
-,5r
.R
,IR
-,4r
- l . t fr
-,6
-,4r
.R
-.2
-.1
-1.0
.1
.1
-.6
.5
-.8
-1.7
.2
.2
.7
.0
.0
.0
123.9
125.6
79.5
136.0
130.3
Intermediate materials
12 Excluding foods and feeds
13 Excluding energy
1.1
1.2
.8
1.3
-2.1
-.3
5.7
4.7
.3
-.3
-.3
1.0
-.3r
-.2
.3
.0*
-.2
.1
.0
.2
.1
.0
117.0
124.0
Crude materials
14 Foods
15 Energy
16 Other
-.1
8.8
3.8
4.5
-10.6
6.5
5.1
-17.8
1.9
1.9
-10.1
24.3
-1.5
19.3
10.9
12.2
-27.6
-7.9
.5
4.2r
1.3r
-3.3r
-.R
.0*
1.2
-4.9
.6
1.6
-1.8
-2.6
.1
-1.2
.0
107.5
74.9
138.9
PRODUCER PRICES
(1982=100)
1. Not seasonally adjusted.
2. Figures for consumer prices are for all urban consumers and reflect a
rental-equivalence measure of homeownership.
SOURCE. U.S. Department of Labor, Bureau of Labor Statistics.
Selected Measures
2.16
A51
GROSS DOMESTIC PRODUCT A N D INCOME
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1993r
1992r
1990*
1991r
1992r
Q2
Q3
Q4
Ql
Q2
GROSS DOMESTIC PRODUCT
1 Total
5,546.1
5,722.9
6,038.5
5,991.4
6,059.5
6,194.4
6,261.6
6,327.6
By source
2 Personal consumption expenditures
3 Durable goods
4 Nondurable goods
5 Services
3,761.2
468.2
1,229.2
2,063.8
3,906.4
457.8
1,257.9
2,190.7
4,139.9
497.3
1,300.9
2,341.6
4,099.9
487.8
1,288.2
2,323.8
4,157.1
500.9
1,305.7
2,350.5
4,256.2
516.6
1,331.7
2,407.9
4.296.2
515.3
1.335.3
2,445.5
4,359.9
531.6
1,344.8
2,483.4
808.9
802.0
586.7
201.6
385.1
215.3
736.9
745.5
555.9
182.6
373.3
189.6
796.5
789.1
565.5
172.6
392.9
223.6
799.7
786.8
566.3
174.5
391.7
220.6
802.2
792.5
569.2
170.8
398.4
223.3
833.3
821.3
579.5
171.1
408.3
241.8
874.1
839.5
594.7
172.4
422.2
244.9
874.1
861.0
619.1
177.6
441.6
241.9
6.9
3.8
-8.6
-8.6
7.3
2.3
12.9
6.2
9.7
4.4
12.0
9.5
34.6
33.0
13.1
16.8
-71.4
557.1
628.5
-19.6
601.5
621.1
-29.6
640.5
670.1
-33.9
632.4
666.3
-38.8
641.1
679.9
-38.8
654.7
693.5
-48.3
651.3
699.6
-65.1
660.0
725.0
17 Government purchases of goods and services ..
18 Federal
19 State and local
1,047.4
426.5
620.9
1,099.3
445.9
653.4
1,131.8
448.8
683.0
1,125.8
444.6
681.2
1,139.1
452.8
686.2
1,143.8
452.4
691.4
1,139.7
442.7
697.0
1,158.6
447.5
711.1
By major type of product
20 Final sales, total
21 Goods
22
Durable
23
Nondurable
24 Services
25 Structures
5.539.3
2.178.4
933.6
1,244.8
2.849.5
511.5
5.731.6
2,227.0
934.3
1,292.8
3.032.7
471.9
6,031.2
2.305.5
975.8
1.329.6
3,221.1
504.7
5,978.6
2,278.4
963.2
1.315.1
3.196.2
504.0
6,049.9
2,308.6
978.4
1.330.2
3.239.3
501.9
6.182.5
2.365.6
1,008.3
1,357.3
3,296.1
520.8
6,227.1
2,362.9
1,003.5
1,359.3
3,341.8
522.4
6,314.5
2.395.0
1,037.8
1.357.1
3,388.1
531.5
6.9
-2.1
9.0
-8.6
-12.9
4.3
7.3
2.1
5.3
12.9
16.7
-3.8
9.7
5.7
4.0
12.0
-1.2
13.2
34.6
15.0
19.5
13.1
2.7
10.4
4,897.3
4,861.4
4,986.3
4,956.5
4,998.2
5,068.3
5,078.2
5,102.1
4,491.0
4,598.3
4,836.6
4,814.6
4,800.8
4,975.8
5,038.9
5,104.0
3,297.6
2,745.0
516.0
2,229.0
552.5
278.3
274.3
3,402.4
2,814.9
545.3
2,269.6
587.5
290.6
296.9
3.582.0
2.953.1
567.5
2,385.6
629.0
306.3
322.7
3,558.1
2,933.6
566.9
2,366.8
624.5
304.6
319.9
3.603.6
2.970.7
569.7
2,401.0
632.9
306.9
326.0
3,658.6
3,015.8
574.2
2,441.6
642.8
311.3
331.5
3.705.1
3,054.3
584.1
2.470.2
650.7
312.2
338.5
3.750.6
3.082.7
586.3
2,496.3
668.0
321.4
346.6
363.3
321.4
41.9
376.4
339.5
36.8
414.3
370.6
43.7
411.1
366.2
44.9
408.1
371.3
36.8
431.2
383.6
47.6
444.1
388.4
55.7
439.4
392.4
47.0
41 Rental income of persons 2
-14.2
-12.8
-8.9
-7.2
-18.5
-1.2
7.5
12.7
42 Corporate profits'
43 Profits before tax 3
44 Inventory valuation adjustment
45 Capital consumption adjustment
380.6
365.7
-11.0
25.9
369.5
362.3
4.9
2.2
407.2
395.4
-5.3
17.1
411.7
409.5
-13.7
16.0
367.5
357.9
-7.8
17.4
439.5
409.9
4.9
24.7
432.1
419.8
-12.7
25.1
458.1
445.6
-12.2
24.7
46 Net interest
463.7
462.8
442.0
440.8
440.1
447.7
450.1
443.2
6 Gross private domestic investment
7 Fixed investment
8
Nonresidential
9
Structures
10
Producers' durable equipment
11
Residential structures
12
13
Change in business inventories
Nonfarm
14 Net exports of goods and services
15 Exports
16 Imports
26 Change in business inventories
27 Durable goods
28 Nondurable goods
MEMO
29 Total GDP in 1987 dollars
NATIONAL INCOME
30 Total
31 Compensation of employees
32 Wages and salaries
33
Government and government enterprises . .
34
Other
35 Supplement to wages and salaries
36
Employer contributions for social insurance
37
Other labor income
38 Proprietors' income1
39 Business and professional1
40 Farm 1
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. U.S. Department of Commerce, Survey of Current Business.
A52
2.17
Domestic Nonfinancial Statistics • December 1993
PERSONAL INCOME A N D SAVING
B i l l i o n s o f current dollars e x c e p t as n o t e d ; quarterly data at s e a s o n a l l y adjusted annual rates
1993r
1992r
Account
1990r
1991r
1992r
Q2
Q3
Q4
Q2
Ql
PERSONAL INCOME AND SAVING
1 Total personal income
4,673.8
4,850.9
5,144.9
5,093.8
5,139.8
5,328.3
5,254.7
5,373.2
2 Wage and salary disbursements
3
Commodity-producing industries
2,745.0
745.7
555.6
635.1
848.3
515.9
2,815.0
738.1
557.2
648.0
883.5
545.4
2,973.1
756.5
577.6
682.0
967.0
567.5
2,933.6
750.0
571.2
672.2
944.6
566.9
2,970.7
751.6
573.3
682.5
966.8
569.7
3,095.8
783.3
602.0
709.9
1,028.4
574.2
2,974.3
740.7
559.7
682.9
966.6
584.1
3,082.7
765.1
580.3
709.1
1,022.2
586.3
274.3
363.3
321.4
41.9
-14.2
144.4
698.2
687.6
352.0
296.9
376.4
339.5
36.8
-12.8
127.9
715.6
769.9
382.3
322.7
414.3
370.6
43.7
-8.9
140.4
694.3
858.4
413.9
319.9
411.1
366.2
44.9
-7.2
136.0
696.0
852.4
412.0
326.0
408.1
371.3
36.8
-18.5
144.9
692.2
866.1
416.6
331.5
431.2
383.6
47.6
-1.2
152.3
694.5
877.4
420.8
338.5
444.1
388.4
55.7
7.5
157.0
695.4
894.4
433.1
346.6
439.4
392.4
47.0
12.7
157.8
693.1
905.5
435.0
7
Government and government enterprises
9 Proprietors' income 1
10
Business and professional 1
11
Farm 1
12 Rental income of persons 2
15 Transfer payments
16
Old-age survivors, disability, and health insurance benefits . . .
17
LESS: Personal contributions for social insurance
18 EQUALS: Personal income
224.9
237.8
249.3
248.1
249.8
253.3
256.6
264.5
4,673.8
4,850.9
5,144.9
5,093.8
5,139.8
5,328.3
5,254.7
5,373.2
623.3
620.4
644.8
634.6
642.8
670.7
657.1
681.0
20 EQUALS: Disposable personal income
4,050.5
4,230.5
4,500.2
4,459.2
4,497.0
4,657.6
4,597.5
4,692.2
21
LESS: Personal outlays
3,880.6
4,029.0
4,261.5
4,221.3
4,277.3
4,377.9
4,419.7
4,483.6
22 EQUALS: Personal saving
170.0
201.5
238.7
237.9
219.6
279.7
177.9
208.7
19,593.0
13,093.0
14,101.0
19,237.9
12,895.2
13,965.0
19,518.0
13,080.9
14,219.0
19,430.4
13,002.5
14,142.0
19,536.7
13,097.8
14,169.0
19,754.1
13,240.9
14,490.0
19,744.4
13,234.2
14,163.0
19,785.4
13,311.6
14,326.0
4.2
4.8
5.3
5.3
4.9
6.0
3.9
4.4
27 Gross saving
722.7
733.7
717.8
715.5
727.0
718.8
762.0
766.7
28 Gross private saving
861.1
929.9
986.9
987.7
1,016.5
969.4
1,024.8
988.3
29 Personal saving
30 Undistributed corporate profits 1
31 Corporate inventory valuation adjustment
170.0
88.5
-11.0
201.5
102.3
4.9
238.7
110.4
-5.3
237.9
112.6
-13.7
219.6
82.3
-7.8
279.7
121.7
4.9
177.9
103.7
-12.7
208.7
116.3
-12.2
368.2
234.5
383.2
242.8
396.6
261.3
391.5
245.7
410.3
304.3
396.5
251.5
402.2
261.0
405.2
258.1
-138.4
-163.5
25.1
-196.2
-203.4
7.3
-269.1
-276.3
7.2
-272.2
-279.9
7.8
-289.5
-290.7
1.2
-250.6
-264.2
13.5
-262.8
-263.5
.8
-221.5
-222.6
1.1
19
LESS: Personal tax and nontax payments
MEMO
Per capita (1987 dollars)
24 Personal consumption expenditures
25 Disposable personal income
26 Saving rate (percent)
GROSS SAVING
Capital consumption
allowances
33 Noncorporate
34 Government surplus, or deficit ( - ) , national income and
product accounts
35
Federal
36
State and local
37 Gross investment
730.4
743.3
741.4
739.1
742.7
750.9
796.5
778.7
38 Gross private domestic
39 Net foreign
808.9
-78.5
736.9
6.4
796.5
-55.1
799.7
-60.6
802.2
-59.4
833.3
-82.4
874.1
-77.6
874.1
-95.4
7.8
9.6
23.6
23.6
15.7
32.1
34.4
12.0
40 Statistical discrepancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
SOURCE. U.S. Department of Commerce, Survey of Current
Business.
Summary Statistics
3.10
U.S. INTERNATIONAL TRANSACTIONS
A53
Summary
Millions of dollars ; quarterly data seasonally adjusted except as noted 1
1992
1 Balance on current account
2 Merchandise trade balance
3
Merchandise exports
Merchandise imports
4
5 Military transactions, net
Other service transactions, net
6
7 Investment income, net
8
U.S. government grants
9 U.S. government pensions and other transfers
10 Private remittances and other transfers
11 Change in U.S. government assets other than official
reserve assets, net (increase, - )
1992
1991
Item credits or debits
Q2
Q3
Q4
Ql r
Q2P
-22,308
-29,309
111,530
-140,839
-145
14,769
-37
-3,242
-978
-3,366
-26,934
-34,388
113,125
-147,513
23
14,772
-275
-2,578
-975
-3,513
-91,861
-109,033
389,303
-498,336
-7,834
38,485
20,348
-17,434
-2,934
-13,459
-8,324
-73,802
416,937
-490,739
-5,851
51,733
13,021
24,073
-3,461
-14,037
-66,400
-96,138
440,138
-536,276
-2,751
59,163
6,222
-14,688
-3,735
-14,473
-18,253
-24,801
108,306
-133,107
-727
14,378
907
-3,234
-1,118
-3,659
-17,775
-27,612
109,493
-137,105
-617
15,898
1,703
-2,783
-940
-3,424
-23,687
-25,962
113,992
-139,954
-836
14,265
-806
-5,883
-846
-3,619
2,307
2,905
-1,609
-293
-305
-737
535
55
12 Change in U.S. official reserve assets (increase, - )
13 Gold
14 Special drawing rights (SDRs)
15 Reserve position in International Monetary Fund
16 Foreign currencies
-2,158
0
-192
731
-2,697
5,763
0
-177
-367
6,307
3,901
0
2,316
-2,692
4,277
1,464
0
-168
1
1,631
1,952
0
-173
-118
2,243
1,542
0
2,829
-2,685
1,398
-983
0
-140
720
0
-166
211
675
17 Change in U.S. private assets abroad (increase, - )
18 Bank-reported claims
19 Nonbank-reported claims
20 U.S. purchases of foreign securities, net
21 U.S. direct investments abroad, net
-44,280
16,027
-4,433
-28,765
-27,109
-68,643
3,278
1,932
-44,740
-29,113
-53,253
24,948
4,551
-47,961
-34,791
-9,866
4,050
1,294
-8,276
-6,934
-12,445
6,584
-3,214
-13,787
-2,028
-31,243
-3,481
1,132
-17,405
-11,489
-11,910
28,055
-4,774
-26,889
-8,302
-26,203
4,743
22 Change in foreign official assets in United States (increase, +) . .
23 U.S. Treasury securities
24 Other U.S. government obligations
25 Other U.S. government liabilities
26 Other U.S. liabilities reported by U.S. banks3
27 Other foreign official assets 5
34,198
29,576
667
2,156
3,385
-1,586
17,564
14,846
1,301
1,542
-1,484
1,359
40,684
18,454
3,949
2,542
16,427
21,008
-688
11,240
1,699
678
7,466
-75
-7,378
-323
912
864
-7,831
5,931
-7,379
874
943
11,219
274
10,929
1,039
710
-395
8,171
1,404
17,839
6,042
1,082
191
9,425
1,099
28 Change in foreign private assets in United States (increase, + ) . .
29 U.S. bank-reported liabilities
30 U.S. nonbank-reported liabilities
31 Foreign private purchases of U.S. Treasury securities, net
32 Foreign purchases of other U.S. securities, net
33 Foreign direct investments in United States, net
70,976
16,370
7,533
-2,534
1,592
48,015
65,875
-11,371
-699
88,895
18,609
741
36,893
30,274
2,378
23,442
-528
979
10,168
10,453
2,370
33,828
23,647
1,553
4,870
2,730
14,789
-18,862
2,057
13,599
9,394
8,601
20,453
-2,462
1,028
32,914
-1,171
-2,717
21,232
12,478
3,092
34 Allocation of special drawing rights
35 Discrepancy
36 Due to seasonal adjustment
37 Before seasonal adjustment
0
0
0
30,820
-15,140
-12,218
30,820
-15,140
-12,218
0
-17,502
653
-18,155
0
2,123
-6,754
8,877
0
15,280
1,222
14,058
0
8,948
5,814
3,134
0
14,070
816
13,254
MEMO
Changes in official assets
38 U.S. official reserve assets (increase, - )
39 Foreign official assets in United States, excluding line 25
(increase, +)
-2,158
5,763
3,901
1,464
1,952
1,542
-983
720
32,042
16,022
38,142
20,330
-8,242
4,988
11,324
17,648
1,707
-4,882
5,857
-2,113
3,051
2,336
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, 22-34, and 38-40.
2. Data are on an international accounts basis. The data differ from the Census
basis data, shown in table 3.11, for reasons of coverage and timing. Military
exports are excluded from merchandise trade data and are included in line 5.
3. Reporting banks include all types of depository institution as well as some
brokers and dealers.
18,826
35,144
23,975
-1,000
-228
-615
-20,180
-10,766
' -411
15,000
8,326
-940
4. Associated primarily with military sales contracts and other transactions
arranged with or through foreign official agencies.
5. Consists of investments in U.S. corporate stocks and in debt securities of
private corporations and state and local governments.
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis,
Survey of Current Business.
A54
3.11
International Statistics • December 1993
U.S. FOREIGN TRADE 1
Millions of dollars; m o n t h l y d a t a seasonally a d j u s t e d
1993
Item
1 Exports of domestic and foreign
merchandise, excluding grant-aid
shipments
2 General imports including merchandise
for immediate consumption
plus entries into bonded
warehouses
3 Trade balance
1990
393,592
1991
421,730
1992
448,164
Mar.
Apr.
May
June r
July r
Aug. p
36,928
38,895
38,479
38,930
37,639
37,109
38,212
495,311
488,453
532,665
44,832
49,347
48,660
47,306
49,698
47,534
47,925
-101,718
-66,723
-84,501
-7,904
-10,453
-10,182
-8,376
-12,058
-10,425
-9,713
1. Government and nongovernment shipments of merchandise between foreign
countries and the fifty states, including the District of Columbia, Puerto Rico, the
U.S. Virgin Islands, and U.S. Foreign Trade Zones. Data exclude (1) shipments
among the United States, Puerto Rico, the U.S. Virgin Islands, and other U.S.
affiliated insular areas, (2) shipments to U.S. Armed Forces and diplomatic
missions abroad for their own use, (3) U.S. goods returned to the United States by
its Armed Forces, (4) personal and household effects of travelers, and (5)
in-transit shipments. Data reflect the total arrival of merchandise from foreign
countries that immediately entered consumption channels, warehouses, or U.S.
Foreign Trade Zones (general imports). Import data are Customs value; export
data are F.A.S. value. Since 1990, data for U.S. exports to Canada have been
derived from import data compiled by Canada; similarly, in Canadian statistics,
Canadian exports to the United States are derived from import data compiled by
3.12
Feb.
the United States. Since Jan. 1, 1987, merchandise trade data have been released
forty-five days after the end of the month; the previous month is revised to reflect
late documents.
Data in this table differ from figures for merchandise trade shown in the U.S.
balance of payments accounts (table 3.10, lines 2 through 4) primarily for reasons
of coverage. For both exports and imports, a large part of the difference is the
treatment of military sales and purchases. The military sales to foreigners
(exports) and purchases from foreigners (imports) that are included in this table as
merchandise trade are shifted, in the balance of payments accounts, from
"merchandise trade" into the broader category "military transactions."
SOURCE. (U.S. Department of Commerce, Bureau of the Census), FT900, U.S.
Merchandise Trade.
U.S. RESERVE ASSETS
M i l l i o n s of d o l l a r s , e n d of p e r i o d
1993
Asset
1 Total
2 Gold stock, including Exchange
Stabilization Fund
3 Special drawing rights ,3
4 Reserve position in International
Monetary Fund
5 Foreign currencies
1992
May
June
July
Aug.
83,316
77,719
71,323
74,378
75,644
76,711
73,968
74,139
75,231
11,058
10,989
11,057
11,240
11,056
8,503
11,054
8,787
11,054
8,947
11,053
9,147
11,057
8,987
11,057
8,905
11,057
9,133
9,076
52,193
9,488
45,934
11,759
40,005
12,184
42,353
12,317
43,326
12,195
44,316
11,926
41,998
12,083
42,094
12,118
42,923
1. Gold held "under earmark" at Federal Reserve Banks for foreign and
international accounts is not included in the gold stock of the United States; see
table 3.13, line 3. Gold stock is valued at $42.22 per fine troy ounce.
2. Special drawing rights (SDRs) are valued according to a technique adopted
by the International Monetary Fund (IMF) in July 1974. Values are based on a
weighted average of exchange rates for the currencies of member countries. From
July 1974 through December 1980, sixteen currencies were used; since January
3.13
Apr.
Sept."
1981, five currencies have been used. U.S. SDR holdings and reserve positions in
the IMF also have been valued on this basis since July 1974.
3. Includes allocations of SDRs by the International Monetary Fund on Jan. 1
of the year indicated, as follows: 1970—$867 million; 1971—$717 million; 1972—
$710 million; 1979—$1,139 million; 1980—$1,152 million; 1981—$1,093 million;
plus net transactions in SDRs.
4. Valued at current market exchange rates.
FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS 1
M i l l i o n s of d o l l a r s , e n d of p e r i o d
1993
Asset
1990
1991
1992
Mar.
1 Deposits
Held in custody
2 U.S. Treasury securities
3 Earmarked gold
May
June
July
Aug.
Sept. p
369
968
205
317
221
193
286
284
357
501
278,499
13,387
281,107
13,303
314,481
13,686
326,486
12,989
339,396
12,924
345,060
12,854
343,672
12,829
343,378
12,756
356,671
12,686
358,860
12,562
1. Excludes deposits and U.S. Treasury securities held for international and
regional organizations.
2. Marketable U.S. Treasury bills, notes, and bonds and nonmarketable U.S.
Treasury securities payable at face value in dollars or foreign currencies.
Apr.
3. Held in foreign and international accounts and valued at $42.22 per fine troy
ounce; not included in the gold stock of the United States.
Summary Statistics
3.14
FOREIGN BRANCHES OF U.S. BANKS
A55
Balance Sheet Data 1
Millions of d o l l a r s , e n d of p e r i o d
1993
Account
1990
1991
1992
Feb.
Mar.
7
4
5
6
7
8
9
10
11
Claims on United States
Parent bank
Other banks in United States
Nonbanks
Claims on foreigners
Other branches of parent bank
Banks
Public borrowers
Nonbank foreigners
Other assets
12 Total payable in U.S. dollars
N
14
15
16
17
18
19
70
71
22
Claims on United States
Parent bank
Other banks in United States
Nonbanks
Claims on foreigners
Other branches of parent bank
Banks
Public borrowers
Nonbank foreigners
Other assets
May
June
July
Aug.
All foreign countries
ASSETS
1 Total payable in any currency
Apr.
542,545
554,127'
547,425r
544,497r
r
r
548,893"
562,590"
551,342
560,539
188,4%
148,837
13,296
26,363
312,449
135,003
72,602
17,555
87,289
55,980
176,487
137,695
12,884
25,908
303,934
111,729
81,970
18,652
91,583
68,578
166,798
132,275
9,703
24,820
318,071
123,256
82,190
20,756
91,869
57,676
172,776
139,642r
9,249
23,885
317,473r
115,991r
83,264r
19,934r
98,284
63,878r
172,132
139,016r
9,073
24,043
314,912
112,598
84,819"
19,005"
98,490
60,381
164,652r
129,121"
10,830
24,701
316,001r
109,966r
86,940"
18,577"
100,518r
63,844r
162,355"
127,126"
9,169
26,060
321,065"
111,314
88,188"
18,251
103,312
65,473"
176,025"
141,024"
9,498
25,503
316,533"
111,708
85,972"
18,183
100,670"
70,032"
163,793
127,474
8,993
27,326
316,989
105,095
88,648
17,687
105,559
70,560
166,817
130,865
9,457
26,495
325,948
108,071
90,008
18,364
109,505
67,774
379,479
364,078
365,824
361,729r
353,799r
345,053r
344,926"
355,298"
340,948
338,896
169,848
133,662
12,025
24,161
167,010
78,114
41,635
13,685
33,576
27,220
162,125
129,329
9,266
23,530
183,527
83,117
47,250
14,313
38,847
20,172
168,245r
137,122r
8,704
22,419
174,726
77,681
43,067
13,710
40,268
18,758r
167,535r
136,423r
8,336
22,776
170,338
75,871
41,266
13,068
40,133
15,926
160,120"
126,760"
10,168
23,192
169,360"
73,049
43,783r
12,537
39,991r
15,573r
156,418"
123,957"
8,209
24,252
170,475"
73,068
44,920"
12,244
40,243
18,033"
169,502"
137,711"
8,638
23,153
168,824"
73,014"
43,674"
12,049
40,087"
16,972"
155,387
124,072
8,270
23,045
167,183
70,293
44,262
11,951
40,677
18,378
157,538
127,028
8,475
22,035
164,318
68,567
42,378
11,999
41,374
17,040
r
556,925
180,174
142, %2
12,513
24,699
174,451
95,298
36,440
12,298
30,415
24,854
548,999
United Kingdom
23 Total payable in any currency
184,818
175,599
165,850
164,507
162,122
163,193"
165,044
173,158
167,046
172,710
74 Claims on United States
75
Parent bank
26
Other banks in United States
77
Nonbanks
28 Claims on foreigners
79 Other branches of parent bank
30
Banks
31
Public borrowers
32
Nonbank foreigners
33 Other assets
45,560
42,413
792
2,355
115,536
46,367
31,604
3,860
33,705
23,722
35,257
31,931
1,267
2,059
109,692
35,735
36,394
3,306
34,257
30,650
36,403
33,460
1,298
1,645
111,623
46,165
33,399
3,329
28,730
17,824
34,919
32,779
783
1,357
110,025r
41,317
36,206r
2,542
29,960
19,563r
34,989
31,719
892
2,378
106,944
39,466
34,914
2,531
30,033
20,189
33,353
29,605
757
2,991
108,%3r
39,450"
37,823r
2,513r
29,177r
20,877r
31,239
27,523
747
2,%9
111,830
41,458
37,282
2,420
30,670
21,975
37,038
33,059
1,006
2,973
109,528
40,130
36,848"
2,342
30,208"
26,592
34,032
29,184
808
4,040
107,799
37,164
38,543
2,341
29,751
25,215
35,491
30,612
877
4,002
114,150
39,778
40,332
2,606
31,434
23,069
34 Total payable in U.S. dollars
116,762
105,974
109,493
99,761r
94,870
95,612
97,431
100,422
%,200
93,739
34,508
32,186
1,022
1,300
66,335
34,124
17,089
2,349
12,773
8,650
32,929
31,559
428
942
60,695
28,856
16,800
1,883
13,156
6,137r
31,233
28,420
393
2,420
60,180
29,388
16,903
1,888
12,001
4,637
28,634
25,9%
326
2,312
61,742
30,753
17,073
1,808
12,108
7,055
34,110
31,265
533
2,312
60,479
30,287
16,658"
1,804
11,730"
5,833
30,573
27,580
300
2,693
58,944
27,814
17,590
1,744
11,796
6,683
31,753
28,938
308
2,507
56,603
27,713
15,466
1,832
11,592
5,383
35 Claims on United States
36
Parent bank
37 Other banks in United States
38
Nonbanks
39 Claims on foreigners
40
Other branches of parent bank
41
Banks
47
Public borrowers
43
Nonbank foreigners
44 Other assets
41,259
39,609
334
1,316
63,701
37,142
13,135
3,143
10,281
11,802
32,418
30,370
822
1,226
58,791
28,667
15,219
2,853
12,052
14,765
32,783
30,443
413
1,927
57,530
30,017
13,422
1,949
12,142
4,557
Bahamas and Cayman Islands
147,422
151,647r
149,351r
144,524r
r
r
142,737"
148,814"
140,256
140,172
46 Claims on United States
47
Parent bank
48
Other banks in United States
49 Nonbanks
50 Claims on foreigners
51
Other branches of parent bank
5?
Banks
53 Public borrowers
54
Nonbank foreigners
55 Other assets
112,989
77,873
11,869
23,247
41,356
13,416
16,310
5,807
5,823
7,971
115,430
81,706
10,907
22,817
45,229
11,098
20,174
7,161
6,7%
7,853
%,280
66,608
7,828
21,844
44,509
7,293
21,212
7,786
8,218
6,633
103,308
74,297r
7,892
21,119
40,821
7,311
17,440
7,422
8,648
7,518
101,171
73,325r
7,424
20,422
41,314
6,650
18,797
7,188
8,679
6,866
97,339"
67,700"
9,279
20,360
40,5% r
6,873
17,816r
6,690
9,217
6,589"
94,759"
66,035"
7,184
21,540
41,378"
6,999
18,527"
6,527
9,325
6,600"
101,941"
73,855"
7,651
20,435
40,437"
7,009
18,117"
6,334
8,977
6,436"
93,412
66,039
7,477
19,8%
39,609
6,772
17,688
6,185
8,964
7,235
93,661
67,055
7,360
19,246
39,588
7,226
16,863
6,102
9,397
6,923
56 Total payable in U.S. dollars
158,390
163,957
142,861
147,281r
145,NR
I40,016r
138,067"
143,732"
135,701
135,698
45 Total payable in any currency
162,316
168,512
1. Since June 1984, reported claims held by foreign branches have been
reduced by an increase in the reporting threshold for "shell" branches from $50
million to $150 million equivalent in total assets, the threshold now applicable to
all reporting branches.
A56
3.14
International Statistics • December 1993
FOREIGN BRANCHES OF U.S. BANKS
Balance Sheet Data 1 —Continued
1993
A
Feb.
LIABILITIES
Mar.
Apr.
May
June
July
Aug.
All foreign countries
57 Total payable in any currency
556,925
548,999
542,545
554,127'
547,425'
544,497'
548,893'
562,590'
551,342
560,539
58 Negotiable certificates of deposit (CDs) . .
59 To United States
Parent bank
60
Other banks in United States
61
Nonbanks
62
18,060
189,412
138,748
7,463
43,201
16,284
198,307
136,431
13,260
48,616
10,032
189,444
134,339
12,182
42,923
ll,871 r
184,627r
124,595r
12,373
47,659
11,596
187,572'
126,134'
13,306
48,132
13,748
176,747'
119,752'
11,952
45,043'
14,348
175,442'
117,207'
14,062
44,173'
14,154
186,374'
129,486'
13,514
43,374'
14,568
174,089
120,953
10,440
42,6%
14,604
172,074
118,724
9,561
43,789
63 To foreigners
Other branches of parent bank
64
Banks
65
66
Official institutions
Nonbank foreigners
67
68 Other liabilities
311,668
139,113
58,986
14,791
98,778
37,785
288,254
112,033
63,097
15,596
97,528
46,154
309,704
125,160
62,189
19,731
102,624
33,365
319,409r
119,601
70,086r
21,469
108,253r
38,220'
312,417
115,535
68,411
18,312
110,159
35,840
316,661
113,845
68,381
21,326
113,109
37,341'
322,140
115,189
69,323
22,271
115,357
36,963
318,956'
115,725
67,243'
22,466
113,522
43,106'
319,464
108,925
71,491
23,147
115,901
43,221
333,015
113,550
73,663
23,049
122,753
40,846
69 Total payable in U.S. dollars
383,522
370,710
368,773
363,528r
353,840'
344,532'
344,319'
357,116'
342,287
339,344
70 Negotiable CDs
71 To United States
Parent bank
72
Other banks in United States
73
Nonbanks
74
14,094
175,654
130,510
6,052
39,092
11,909
185,472
129,669
11,707
44,096
6,238
178,674
127,948
11,512
39,214
6,640
172,695r
117,700r
11,418
43,577
6,519
175,763'
119,524'
12,467
43,772'
7,062
164,38C
112,736'
11,282
40,362'
7,248
162,328'
110,161'
13,126
39,041'
8,138
172,708'
121,922'
12,862
37,924'
7,958
160,499
113,313
9,789
37,397
7,370
157,841
110,881
8,842
38,118
75 To foreigners
Other branches of parent bank
76
77
Banks
Official institutions
78
Nonbank foreigners
79
80 Other liabilities
179,002
98,128
20,251
7,921
52,702
14,772
158,993
76,601
24,156
10,304
47,932
14,336
172,189
83,700
26,118
12,430
49,941
11,672
170,527r
79,594
25,571
14,034
51,328 r
13,666
160,774
77,685
21,227
10,762
51,100
10,784
163,149
75,682
22,150
12,627
52,690
9,941
165,162
75,313
22,969
12,653
54,227
9,581
166,1301
75,783
23,440'
12,951
53,956
10,14C
163,567
72,900
23,631
12,868
54,168
10,263
165,055
72,467
24,522
12,031
56,035
9,078
United Kingdom
184,818
175,599
165,850
164,507'
162,122
163,193'
165,044
173,158
167,046
172,710
14,256
39,928
31,806
1,505
6,617
11,333
37,720
29,834
1,438
6,448
4,517
39,174
31,100
1,065
7,009
5,596 r
33,092
24,250
1,633
7,209
4,753
38,011
29,759
1,192
7,060
5,414
34,661
26,781'
1,110
6,770'
5,644
37,272
28,095
1,652
7,525
6,566
39,514
30,410
1,097
8,007
6,364
35,521
27,183
850
7,488
6,674
36,600
28,076
741
7,783
87 To foreigners
Other branches of parent bank
88
89
Banks
90
Official institutions
Nonbank foreigners
91
92 Other liabilities
108,531
36,709
25,126
8,361
38,335
22,103
98,167
30,054
25,541
9,670
32,902
28,379
107,176
35,983
25,231
12,090
33,872
14,983
110,285r
35,143
27,227
12,938
34,977r
15,534r
104,356
33,424
23,985
10,531
36,416
15,002
108,670
33,545
26,082
12,342
36,701
14,448'
106,834
31,437
27,184
11,752
36,461
15,294
106,725'
32,275
25,848'
12,139
36,463
20,353'
105,949
28,408
28,504
11,885
37,152
19,212
112,121
30,534
29,039
11,575
40,973
17,315
93 Total payable in U.S. dollars
81 Total payable in any currency
82 Negotiable CDs
83 To United States
84
Parent bank
Other banks in United States
85
Nonbanks
86
116,094
108,755
108,214
101,113'
95,892
94,159
96,152
98,465
93,360
92,066
94 Negotiable CDs
95 To United States
Parent bank
96
Other banks in United States
97
Nonbanks
98
12,710
34,697
29,955
1,156
3,586
10,076
33,003
28,260
1,177
3,566
3,894
35,417
29,957
709
4,751
4,444
28,874
23,097
1,097
4,680
3,765
33,552
28,405
707
4,440
4,214
30,170
25,315'
676
4,179'
4,392
32,457
26,631
1,311
4,515
5,462
34,523
28,747
847
4,929
5,197
30,669
25,753
637
4,279
4,890
31,579
26,600
476
4,503
99 To foreigners
100
Other branches of parent bank
Banks
101
Official institutions
102
Nonbank foreigners
103
104 Other liabilities
60,014
25,957
9,488
4,692
19,877
8,673
56,626
20,800
11,069
7,156
17,601
9,050
62,048
22,026
12,540
8,847
18,635
6,855
59,414r
20,516
10,359
9,967
18,572r
8,381
51,850
19,516
6,702
7,008
18,624
6,725
54,407
18,958
8,327
8,803
18,319
5,368
54,576
17,449
9,065
8,210
19,852
4,727
53,282'
17,691
8,305'
8,812
18,474
5,198'
52,336
16,198
8,347
8,720
19,071
5,158
51,256
16,063
7,666
8,042
19,485
4,341
Bahamas and Cayman Islands
105 Total payable in any currency
162,316
168,512
147,422
151,647'
149,351'
144,524'
142,737'
148,814'
140,256
140,172
106 Negotiable CDs
107 To United States
108
Parent bank
109
Other banks in United States
Nonbanks
110
646
114,738
74,941
4,526
35,271
1,173
130,058
79,394
10,231
40,433
1,350
111,861
67,347
10,445
34,069
1,142
111 ,201r
62,808r
10,059
38,334
1,713
110,875'
60,152'
11,492
39,231
1,692
106,560'
60,033'
10,291
36,236'
1,812
102,764'
57,082'
11,220
34,462'
1,535
109,128'
64,508'
11,567
33,053'
1,562
100,819
59,152
8,603
33,064
1,307
99,418
58,031
7,791
33,5%
44,444
24,715
5,588
622
13,519
2,488
35,200
17,388
5,662
572
11,578
2,081
32,556
15,169
6,422
805
10,160
1,655
37,690
18,056
7,967
1,036
10,631
1,614
35,369
18,015
6,476
858
10,020
1,394
34,773
17,462
6,219
905
10,187
1,499
36,146
18,626
6,123
1,052
10,345
2,015
36,563
18,927
6,382
1,025
10,229
1,588
35,866
18,104
6,954
897
9,911
2,009
37,808
19,103
7,766
836
10,103
1,639
157,132
163,789
143,150
147,347'
144,700'
139,406'
137,712'
143,846'
135,569
135,483
111 To foreigners
112
Other branches of parent bank
Banks
113
114
Official institutions
Nonbank foreigners
115
116 Other liabilities
117 Total payable in U.S. dollars
Summary Statistics
3.15
A57
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1993
Item
1 Total1
2
3
4
5
6
7
8
9
10
11
12
By type
Liabilities reported by banks in the United States
U.S. Treasury bills and certificates
U.S. Treasury bonds and notes
Marketable
Nonmarketable
U.S. securities other than U.S. Treasury securities 5
By area
Europe 1
Canada
Latin America and Caribbean
Asia
Africa
Other countries 6
1991r
1992'
Feb. r
Mar. r
Apr/
May r
June r
July r
Aug.P
360,530
398,672
413,185
410,078
413,660
424,298
427,399
426,695
436,657
38,396
92,692
54,823
104,596
66,464
113,594
63,079
113,547
62,814
113,293
69,199
120,194
72,552
119,860
67,116
128,843
68,540
136,488
203,677
4,858
20,907
210,553
4,532
24,168
203,209
4,592
25,326
202,593
4,622
26,237
205,302
5,431
26,820
201,878
5,417
27,610
201,118
5,451
28,418
196,238
5,487
29,011
196,990
5,453
29,186
171,317
7,460
33,554
139,465
2,092
6,640
191,708
7,920
40,015
152,142
3,565
3,320
201,930
7,886
42,457
154,019
3,866
3,025
189,804
9,326
44,464
158,017
3,919
4,546
187,899
8,302
49,145
159,860
3,782
4,670
193,673
8,899
48,130
164,947
3,782
4,865
193,378
8,297
48,524
169,389
3,621
4,188
188,892
8,808
53,763
168,867
2,844
3,519
191,866
8,075
55,275
174,678
3,109
3,652
1. Includes the Bank for International Settlements.
2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, negotiable time certificates of deposit, and borrowings under repurchase agreements.
3. Includes nonmarketable certificates of indebtedness (including those payable
in foreign currencies through 1974) and Treasury bills issued to official institutions
of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes
bonds and notes payable in foreign currencies; zero coupon bonds are included at
current value.
5. Debt securities of U.S. government corporations and federally sponsored
agencies, and U.S. corporate stocks and bonds.
6. Includes countries in Oceania and Eastern Europe.
SOURCE. Based on Treasury Department data and on data reported to the
Treasury Department by banks (including Federal Reserve Banks) and securities
dealers in the United States and on the 1984 benchmark survey of foreign portfolio
investment in the United States.
3.16
Reported by Banks in the United States 1
LIABILITIES TO, A N D CLAIMS ON, FOREIGNERS
Payable in Foreign Currencies
M i l l i o n s of d o l l a r s , e n d of p e r i o d
1993
1992
Item
1 Banks' liabilities
2 Banks' claims
3
Deposits
4
Other claims
5 Claims of banks' domestic customers
1989
67,835
65,127
20,491
44,636
3,507
1. Data on claims exclude foreign currencies held by U.S. monetary
authorities.
1990
70,477
66,7%
29,672
37,124
6,309
1991
75,129
73,195
26,192
47,003
3,398
Sept.
Dec.
Mar. r
June
84,162
72,165 r
28,074
44,091 r
3,987
72,7%
62,789
24,240
38,549
4,432
80,999
64,057
24,928
39,129
2,625
74,697
55,161
23,449
31,712
3,234
2. Assets owned by customers of the reporting bank located in the United
States that represent claims on foreigners held by reporting banks for the accounts
of the domestic customers.
A58
International Statistics • D e c e m b e r 1993
3.17 LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
Reported by Banks in the United States1
M i l l i o n s of d o l l a r s , e n d o f p e r i o d
1993
Item
1992r
1990
Feb. r
Mar. r
Apr. r
May r
June r
July
HOLDER AND TYPE OF LIABILITY
1 Total, all foreigners
759,634
756,066
811,371
816,438
799,660
792,760
793,584
821,911
819,783
2 Banks' own liabilities
3
Demand deposits
4
Time deposits
5
Other 3
6
Own foreign offices
577,229
21,723
168,017
65,822
321,667
575,374
20,321
159,649
66,305
329,099
607,556
21,824
160,476
93,824
331,432
607,718
22,310
148,482
105,047
331,879
587,716
21,572
143,9%
97,128
325,020
582,931
22,243
148,064
101,148
311,476
574,822
22,144
147,923
104,513
300,242
598,591
21,467
151,965
108,495
316,664
591,193
21,815
151,392
108,807
309,179
182,405
96,7%
180,692
110,734
203,815
127,644
208,720
135,298
211,944
137,059
209,829
138,014
218,762
144,129
223,320
144,059
228,590
153,365
17,578
68,031
18,664
51,294
21,974
54,197
20,721
52,701
22,303
52,582
21,539
50,276
24,515
50,118
30,056
49,205
26,455
48,770
5,918
4,540
36
1,050
3,455
8,981
6,827
43
2,714
4,070
9,350
6,951
46
3,214
3,691
11,538
8,884
47
2,321
6,516
9,295
6,037
1%
2,722
3,119
10,731
5,834
33
1,687
4,114
8,934
6,481
35
2,989
3,457
9,130
6,070
19
3,407
2,644
9,387
6,197
29
2,920
3,248
1,378
364
2,154
1,730
2,399
1,908
2,654
2,348
3,258
2,876
4,897
4,461
2,453
1,883
3,060
2,320
3,190
2,635
1,014
0
424
0
486
5
306
0
382
0
433
3
564
6
740
0
549
6
119,303
34,910
1,924
14,359
18,628
131,088
34,411
2,626
16,504
15,281
159,419
51,058
1,274
17,823
31,961
180,058
62,697
1,764
19,006
41,927
176,626
59,576
1,457
18,814
39,305
176,107
59,393
1,361
19,166
38,866
189,393
63,575
1,386
21,682
40,507
192,412
62,810
2,204
19,408
41,198
195,959
61,714
1,519
18,626
41,569
84,393
79,424
%,677
92,692
108,361
104,5%
117,361
113,594
117,050
113,547
116,714
113,293
125,818
120,194
129,602
119,860
134,245
128,843
4,766
203
3,879
106
3,726
39
3,648
119
3,411
92
3,284
137
5,480
144
9,602
140
5,297
105
540,805
458,470
136,802
10,053
88,541
38,208
321,667
522,265
459,335
130,236
8,648
82,857
38.731
329,099
547,988
476,785
145,353
10,168
90,368
44,817
331,432
532,148
464,562
132,683
10,974
78,991
42,718
331,879
521,961
452,894
127,874
10,485
74,331
43,058
325,020
512,921
446,694
135,218
10,883
79,592
44,743
311,476
503,421
436,547
136,305
11,386
76,439
48,480
300,242
525,513
459,617
142,953
9,918
83,143
49,892
316,664
517,384
450,380
141,201
10,713
84,751
45,737
309,179
82,335
10,669
62.930
7,471
71,203
11,087
67,586
9,2%
69,067
9,976
66,227
9,908
66,874
10,837
65,8%
10,546
67,004
10,627
5,341
66,325
5,694
49,765
7,555
52,561
6,682
51,608
7,946
51,145
7,349
48,970
7,397
48,640
7,741
47,609
9,049
47,328
93,608
79,309
9,711
64,067
5,530
93.732
74,801
9,004
57,574
8,223
94,614
72,762
10,336
49,071
13,355
92,694
71,575
9,525
48,164
13,886
91,778
69,209
9,434
48,129
11,646
93,001
71,010
9,966
47,619
13,425
91,836
68,219
9,337
46,813
12,069
94,856
70,094
9,326
46,007
14.761
97,053
72,902
9,554
45,095
18,253
14,299
6,339
18.931
8,841
21,852
10,053
21,119
10,060
22,569
10,660
21,991
10,352
23,617
11,215
24.762
11,333
24,151
11,260
6,457
1,503
8,667
1,423
10,207
1,592
10,085
974
10,564
1,345
10,473
1,166
11,074
1,328
11,973
1,456
11,560
1,331
7,073
7,456
9,111
9,4%
9,545
9,409
9,582
10,388
9,389
7 Banks' custodial liabilities 5
8
U.S. Treasury bills and certificates 6
9
Other negotiable and readily transferable
instruments
10
Other
11 Nonmonetary international and regional
organizations
Banks' own liabilities
Demand deposits
Time deposits 2
Other 3
12
13
14
15
16
17
18
19
Banks' custodial liabilities 5
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments
Other
20 Official institutions 9
21
Banks' own liabilities
22
Demand deposits
23
Time deposits
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
Own foreign offices 4
36
37
38
39
Banks' custodial liabilities 5
U.S. Treasury bills and certificates
Other negotiable and readily transferable
instruments
Other
40 Other foreigners
41
Banks' own liabilities
42
Demand deposits
43
Time deposits
44
Other 3
45
46
47
48
Banks' custodial liabilities 5
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments
Other
MEMO
49 Negotiable time certificates of deposit in custody for
foreigners
1. Reporting banks include all types of depository institution, as well as some
brokers and dealers.
2. Excludes negotiable time certificates of deposit, which are included in
" 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 Consolidated Report of Condition filed with bank
regulatory agencies. For agencies, branches, and majority-owned subsidiaries of
foreign banks, consists principally of amounts owed to head office or parent
foreign bank, and foreign branches, agencies, or wholly owned subsidiaries of
head office or parent foreign bank.
5. Financial claims on residents of the United States, other than long-term
securities, held by or through reporting banks.
6. Includes nonmarketable certificates of indebtedness and Treasury bills
issued to official institutions of foreign countries.
7. Principally bankers acceptances, commercial paper, and negotiable time
certificates of deposit.
8. Principally the International Bank for Reconstruction and Development, the
Inter-American Development Bank, and the Asian Development Bank. Excludes
"holdings of dollars" of the International Monetary Fund.
9. Foreign central banks, foreign central governments, and the Bank for
International Settlements.
10. Excludes central banks, which are included in "Official institutions."
Nonbank-Reported
3.17
Data
LIABILITIES TO FOREIGNERS Reported by Banks in the United States 1 —Continued
1993
Item
1990
1991
1992
Feb.
Mar.
Apr.
May
June
July
Aug. p
AREA
1
Total, all foreigners
759,634
756,066
811,371r
816,438r
799,660"
792,760"
793,584"
821,911"
819,783
843,093
r
804,900r
790,365r
782,029"
784,650"
812,781"
810,396
830,936
304,755R
1,942
19,729
2,835
2,049
32,457
18,934
758
10,701
11,702
2,521
2,508
497
17,233
1,902
40,227
2,862
105,513R
512
29,873
293,374"
1,256
19,475
1,536
2,297
31,712
16,069"
763
8,889
11,409
2,350
2,489
535
15,735
1,619
39,596
2,520
106,394
523
28,207
298,984
1,497
19,775
1,229
2,265
31,087
19,912
742
8,094
11,502
2,355
2,476
726
14,055
3,149
39,703
2,664
109,553
507
27,693
313,834
1,525
21,099
2,464
2,185
33,825
23,959
859
9,089
13,903
2,690
2,674
847
13,588
2,140
41,775"
2,761
106,638
510
31,303"
324,951"
1,496
21,817
3,088
2,580
33,744"
22,752
819
10,402
11,271
2,840
2,764
1,129
15,484
2,336
41,270"
2,497"
116,035
512
32,115"
322,868
1,415
20,805
3,983
2,873
33,%3
24,498
1,078
10,721
10,443
2,757
2,894
1,447
16,593
2,210
40,494
2,882
115,169
501
28,142
336,911
1,514
23,391
3,024
2,940
36,224
22,198
1,122
11,426
10,792
2,833
3,015
2,307
17,157
1,460
40,987
2,618
120,774
511
32,618
Foreign countries
753,716
747,085
802,021
3
4
5
6
7
8
9
10
11
1?
13
14
15
16
17
18
19
70
71
22
Europe
Austria
Belgium and Luxembourg
Denmark
254,452
1,229
12,382
1,399
602
30,946
7,485
934
17,735
5,350
2,357
2,958
119
7,544
1,837
36,690
1,169
109,555
928
13,234
249,097
1,193
13,337
937
1,341
31,808
8,619
765
13,541
7,161
1,866
2,184
241
11,391
2,222
37,238
1,598
100,292
622
12,741
308,423R
1,611
20,572
3,060
1,299
41,459
18,631
913 R
10,041
7,372
3,319
2,465
577
9,796
2,986
39,440
2,666
112,456R
504
29,256
23
Canada
2
France
Germany
Greece
Italy
Netherlands
Norway
Portugal
Russia
Spain
Sweden
Switzerland
Turkey
United Kingdom
Yugoslavia"
Other Europe and former U.S.S.R. 12
20,349
21,605
22,746
22,898
25,045"
22,303"
21,331
20,051"
22,264
23,900
Latin America and Caribbean
Argentina
Bahamas
Bermuda
Brazil
British West Indies
Chile
31
Colombia
37
Cuba
33
Ecuador
Guatemala
34
35
Jamaica
36
Mexico
Netherlands Antilles
37
38
Panama
39
Peru
Uruguay
40
Venezuela
41
Other
42
332,997
7,365
107,386
2,822
5,834
147,321
3,145
4,492
11
1,379
1,541
257
16,650
7,357
4,574
1,294
2,520
12,271
6,779
345,529
7,753
100,622
3,178
5,704
163,620
3,283
4,661
2
1,232
1,594
231
19,957
5,592
4,695
1,249
2,096
13,181
6,879
317,236R
9,477
82,288R
7,079
5,584
153,035R
3,035
4,580
3
993
1,377
371
19,456
5,205
4,177
1,080
1,955
11,387
6,154R
322,662R
10,608
87,863R
6,508
5,304
151,600"
3,420
4,417
3
889 R
1,311
279
21,196
4,870R
4,208R
1,045
2,061
10,989"
6,091R
319,872"
11,569"
83,633"
6,271"
5,462
152,448"
3,325
4,183
3
931"
1,382
309
21,762
4,222"
3,918"
995
1,815
11,452"
6,192"
317,876"
11,066"
81,763"
6,135
5,466"
148,628"
3,480"
4,360"
2
923"
1,352
293
24,896
4,537
4,135"
1,070
1,775"
11,517"
6,478"
303,630"
11,339"
80,333"
5,297
5,339"
138,9%"
3,520"
4,338"
2
956"
1,323
289
23,351
3,813"
4,054"
977
1,742"
11,644
6,317"
312,647"
11,289"
80,673
6,074"
4,936"
147,753"
3,552"
4,405"
3
924"
1,397
341
22,295
4,059"
3,747"
979
1,775"
12,242"
6,203"
311,950
14,120
73,401
6,%9
5,425
147,618
3,934
4,464
5
889
1,304
341
24,114
4,162
3,747
891
1,775
12,373
6,418
311,676
14,579
73,780
6,889
5,299
144,708
3,5%
4,383
5
860
1,315
364
24,813
5,491
3,657
898
1,822
12,782
6,435
43
136,844
120,462
143,561R
143,749"
140,519"
131,117"
134,032"
143,566"
143,337
147,755
2,421
11,246
12,754
1,233
1,238
2,767
67,076
2,287
1,585
1,443
15,829
16,965
2,626
11,491
14,269
2,418
1,463
2,015
47,069
2,587
2,449
2,252
15,752
16,071
3,202
8,379
18,509
1,396
1,480
3,775
58,466R
3,337R
2,275
5,582
21,446
15,714
3,007
9,102
19,543
1,377
1,460
3,373R
58,121R
3,471R
2,746
5,375
19,897
16,277
2,957
9,042
17,041
1,399
1,871
3,932"
57,014"
3,330"
2,774
5,342
19,718
16,099
3,527
8,884
16,353
989
1,464
3,765"
51,204"
3,584"
2,785
4,967
19,687
13,908
3,008
8,790
15,832
1,341
1,861
3,163"
54,462"
3,922"
2,458
5,377
19,272
14,546
2,885
9,638
16,212
1,312
2,132
2,764
62,784"
3,842"
2,933
5,233
20,325
13,506"
2,728
9,992
16,417
1,050
1,688
2,790
62,226
4,298
3,1%
5,830
18,407
14,715
3,292
9,477
15,832
1,220
1,582
2,705
68,049
3,873
2,648
6,058
19,139
13,880
4,630
1,425
104
228
53
1,110
1,710
4,825
1,621
79
228
31
1,082
1,784
5,884
2,472
76
190
19
1,346
1,781
6,361R
3,077
92
319
17
1,135
L,721 R
6,508
3,084
87
243
13
1,239
1,842
6,441"
2,938
151
246
14
1,294
1,798"
6,477"
2,922
144
198
16
1,368
1,829"
6,537"
2,784
181
265
15
1,332
1,960"
5,742
1,880
200
172
25
1,417
2,048
5,721
2,018
150
233
20
1,279
2,021
4,444
3,807
5,567
4,464
1,103
4,171
3,047
1,124
4,475
3,388
1,087
5,047
4,013
1,034
5,308
4,056
1,252
5,346
4,449
897
5,029"
4,235
4,078
3,253
4,973
3,892
1,081
8,981
9,350
6,485
7,434
11,538
8,857
10,731
7,590
5,388
1,181
1,315
1,415
501
1,738
943
9,295
6,251
2,021
1,023
74
75
76
77
78
79
30
44
45
46
47
48
49
50
51
57
53
54
55
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 13
Other
Africa
Egypt
Morocco
South Africa
Zaire
60
Oil-exporting countries 1
61
Other
62
56
57
58
59
63
64
65
Other
Australia
Other
637
66 Nonmonetary international and regional
67
68
69
International 15
Latin American regional 16
Other regional 17
5,918
4,390
1,048
479
11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia.
12. Includes the Bank for International Settlements and Eastern European
countries not listed in line 23. Since December 1992, includes all parts of the
former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia.
Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania.
13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
2,223
918
8,934
2,412
1,134
951"
9,130
5,612
2,318
1,200
982
9,387
5,828
2,077
1,482
12,157
8,159
2,737
1,261
14. Comprises Algeria, Gabon, Libya, and Nigeria.
15. Principally the International Bank for Reconstruction and Development,
Excludes "holdings of dollars" of the International Monetary Fund.
16. Principally the Inter-American Development Bank.
17. Asian, African, Middle Eastern, and European regional organizations,
except the Bank for International Settlements, which is included in "Other
Western Europe."
A59
A60
3.18
International Statistics • December 1993
BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States 1
Payable in U.S. Dollars
Millions of dollars, e n d of p e r i o d
1993
Area and country
1990
1991
1992
Feb.
Mar/
Apr. r
May r
June*
July*
Aug.?
1 Total, all foreigners
511,543
514,339
500,511R
498,439R
477,782
471,288
461,179
483,017
471,905
463,351
2 Foreign countries
506,750
508,056
495,429R
494,331R
474,460
468,871
459,497
480,937
470,598
461,399
113,093
362
5,473
497
1,047
14,468
3,343
727
6,052
1,761
782
292
530
2,668
2,094
4,202
1,405
65,151
1,142
1,095
114,310
327
6,158
686
1,907
15,112
3,371
553
8,242
2,546
669
344
1,970
1,881
2,335
4,540
1,063
60,395
825
1,386
123,999*
33 l r
6,404
707
1,419
14,803r
4,229
718
9,048
2,472r
356
325
3,147
2,772
4,929
4,722
%2
63,928r
569
2,158
124,650*
520r
5,886
785
1,226
14,650*
5,370
668
8,466
3,254*
750
494
3,154
4,158
5,155
4,971
1,041
61,375r
567
2,160
122,504
894
6,273
682
1,010
13,235
5,725
583
8,418
2,676
645
454
2,906
3,859
4,809
4,348
943
62,241
553
2,250
120,313
1,013
6,177
645
998
13,141
5,322
618
8,724
2,607
714
513
2,889
3,642
4,509
4,361
1,285
60,725
551
1,879
118,213
941
5,513
628
885
11,614
6,089
5%
8,218
3,278
676
593
3,080
3,441
4,229
4,735
1,508
59,703
550
1,936
122,356
1,080
5,955
721
1,225
11,818
6,236
564
9,250
2,764
789
670
3,045
3,607
4,062
4,123
1,584
62,639
548
1,676
124,472
587
6,127
835
1,007
11,832
7,746
509
8,053
3,260
823
710
2,799
5,117
5,131
5,193
1,492
60,825
547
1,879
118,494
691
6,554
693
724
11,486
6,765
508
8,839
3,078
944
803
2,591
4,184
4,273
5,634
1,549
55,233
547
3,398
16,091
15,113
14,155r
14,906r
r
3 Europe
4
Austria
5
Belgium and Luxembourg
6
Denmark
7
Finland
8
France
9 Germany
10 Greece
11
Italy
12 Netherlands
13 Norway
14 Portugal
15 Russia
16 Spain
17
Sweden
18 Switzerland
19 Turkey
20
United Kingdom
Yugoslavia 2
21
Other Europe and former U.S.S.R. 3
22
23 Canada
18,287
16,977
16,393
16,693
17,776
17,365
74 Latin America and Caribbean
25
Argentina
7,6 Bahamas
27
Bermuda
Brazil
28
29
British West Indies
30
Chile
31
Colombia
Cuba
32
33
Ecuador
34
Guatemala
35
Jamaica
36
Mexico
37 Netherlands Antilles
38
Panama
39
Peru
40
Uruguay
Venezuela
41
Other
42
231,506
6,967
76,525
4,056
17,995
88,565
3,271
2,587
0
1,387
191
238
14,851
7,998
1,471
663
786
2,571
1,384
246,137
5,869
87,138
2,270
11,894
107,846
2,805
2,425
0
1,053
228
158
16,567
1,207
1,560
739
599
2,516
1,263
218,133
4,958r
60,868r
5,934
10,774r
101,523r
3,397
2,750
0
884
262
162r
14,997r
1,379
4,654r
730
936
2,525
1,400
215,167r
4,869r
65,624r
2,851
10,513r
97,341r
3,795
2,819
0
845r
258r
164
15,990*
1,938
2,489*
708
844
2,485
l,634 r
205,7%
4,844
59,018
3,910
10,871
93,8%
3,638
2,807
0
819
274
168
15,115
2,105
2,721
650
846
2,558
1,556
202,149
3,931
59,418
5,609
10,815
88,975
3,552
2,786
0
807
269
161
15,534
1,971
2,491
691
787
2,495
1,857
197,039
3,942
56,188
3,089
10,710
89,853
3,718
2,876
0
770
256
165
14,967
2,354
2,440
675
778
2,542
1,716
212,642
4,066
59,979
4,319
12,319
97,307
3,675
2,847
1
771
266
184
15,300
3,011
2,549
657
904
2,803
1,684
208,231
4,842
56,832
8,578
10,842
91,566
3,898
2,886
0
732
240
182
15,685
3,172
2,532
651
807
3,001
1,785
208,098
4,740
56,266
7,160
10,926
93,924
3,7%
2,916
0
739
256
181
15,591
3,243
2,361
667
816
2,876
1,640
43
138,722
125,262
131,857r
132,080*
120,213
122,414
120,983
122,128
112,897
111,163
620
1,952
10,648
655
933
774
90,699
5,766
1,247
1,573
10,749
13,106
747
2,087
9,617
441
952
860
84,807
6,048
1,910
1,713
8,284
7,7%
906
2,046
9,673
529
1,189
820
79,189r
6,180
2,145
1,867
18,559 r
8,754
892
1,585
10,298
549
1,292
809
80,356r
6,753
1,842
1,737
17,775
8,192r
939
1,630
10,563
443
1,469
8%
67,887
6,938
1,713
1,678
19,048
7,009
1,388
1,670
9,215
549
1,432
1,057
71,681
7,048
1,645
1,794
17,909
7,026
881
1,561
10,420
489
1,386
814
71,908
7,152
1,521
1,763
17,937
5,151
1,898
1,840
9,747
438
1,504
777
71,327
7,421
1,402
1,865
17,437
6,472
860
1,549
10,637
470
1,283
733
62,501
7,587
1,357
2,006
16,946
6,968
638
1,585
9,390
439
1,290
792
64,837
7,245
1,250
2,018
15,917
5,762
56 Africa
Egypt
57
58
Morocco
59
South Africa
Zaire
60
Oil-exporting countries 5
61
Other
62
5,445
380
513
1,525
16
1,486
1,525
4,928
294
575
1,235
4
1,298
1,522
4,279r
186r
441
1,041
4
l,002 r
1,605
4,183r
291
403
1,030
3
1,108
1,348r
3,907
192
3%
1,011
3
1,140
1,165
3,767
151
3%
924
3
1,128
1,165
3,661
151
420
803
3
1,144
1,140
3,810
177
416
746
3
1,156
1,312
3,854
148
437
740
4
1,232
1,293
3,901
168
443
704
4
1,224
1,358
63 Other
64
Australia
Other
65
1,892
1,413
479
2,306
1,665
641
3,006r
2,262r
744
3,345
2,552
793
3,753
3,117
636
3,251
2,635
616
3,208
2,534
674
3,308
2,574
734
3,368
2,443
925
2,378
1,847
531
66 Nonmonetary international and regional
organizations 6
4,793
6,283
5,082
4,108
3,322
2,417
1,682
2,080
1,307
1,952
44
45
46
47
48
49
50
51
52
53
54
55
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
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 and Eastern European
countries not listed in line 23. Since December 1992, includes all parts of the
former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia.
Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania.
4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
5. Comprises Algeria, Gabon, Libya, and Nigeria.
6. Excludes the Bank for International Settlements, which is included in
"Other Western Europe."
Nonbank-Reported
3.19
BANKS' OWN A N D DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS
United States 1
Payable in U.S. Dollars
Data
Reported by Banks in the
Millions of dollars, end of period
Claim
1990
1991
1992r
Feb. r
Mar/
498,439
30,370
308,762
102,610
50,637
51,973
56,697
477,782
33,722
294,513
97,041
48,778
48,263
52,506
July7
Apr/
Ma/
June r
471,288
30,390
287,119
97,747
47,816
49,931
56,032
461,179
29,601
282,587
94,727
47,327
47,400
54,264
483,017
29,409
298,973
94,016
46,139
47,877
60,619
1 Total
579,044
579,683
560,549
2 Banks' claims
3 Foreign public borrowers
4 Own foreign offices 2
5 Unaffiliated foreign banks
6
Deposits
7
Other
8 All other foreigners
511,543
41,900
304,315
117,272
65,253
52,019
48,056
514,339
37,126
318,800
116,602
69,018
47,584
41,811
500,511
31,376
304,623
109,643
61,277
48,366
54,869
67,501
14,375
65,344
15,280
60,038
15,452
52,916
14,363
48,471
12,600
41,333
37,125
31,454
24,976
22,436
11,792
12,939
13,132
13,577
13,435
9 Claims of banks' domestic customers'
10 Deposits
11 Negotiable and readily transferable
instruments
12 Outstanding collections and other
claims
MEMO
13 Customer liability on acceptances...
14 Dollar deposits in banks abroad,
reported by nonbanking business
enterprises in the United States . .
530,698
8,974
44,638
40,297
471,905
32,579
280,121
92,895
44,713
48,182
66,310
8,121
33,604
36,801
36,425
32,962
33,814
29,686
foreign bank, and foreign branches, agencies, or wholly owned subsidiaries of
head office or parent foreign bank.
3. Assets held by reporting banks in the accounts of their domestic customers.
4. Principally negotiable time certificates of deposit and bankers acceptances.
5. Includes demand and time deposits and negotiable and nonnegotiable
certificates of deposit denominated in U.S. dollars issued by banks abroad. For
description of changes in data reported by nonbanks, see Federal Reserve
Bulletin, vol. 65 (July 1979), p. 550.
1. For banks' claims, data are monthly; for claims of banks' domestic customers, data are quarterly.
Reporting banks include all types of depository institution, as well as some
brokers and dealers.
2. For U.S. banks, includes amounts due from own foreign branches and
foreign subsidiaries consolidated in Consolidated Report of Condition filed with
bank regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists principally of amounts due from head office or parent
3.20
531,488
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
1993
1992
Maturity, by borrower and area 2
1 Total
2
3
4
5
6
7
8
9
10
11
17
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
Asia
Africa
All other 3
Maturity of more than one year
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other 3
1989
1990
Sept/
Dec/
Mar/
June p
238,123
206,903
195,302
187,468
195,560
182,873
183,271
178,346
23,916
154,430
59,776
36,014
23,762
165,985
19,305
146,680
40,918
22,269
18,649
162,573
21,050
141,523
32,729
15,859
16,870
155,074
17,905
137,169
32,394
13,333
19,061
163,775
17,809
145,966
31,785
13,279
18,506
152,673
21,210
131,463
30,200
12,220
17,980
154,704
17,941
136,763
28,567
11,252
17,315
53,913
5,910
53,003
57,755
3,225
4,541
49,184
5,450
49,782
53,258
3,040
5,272
51,835
6,444
43,597
51,059
2,549
7,089
55,819
5,926
45,411
40,664
2,183
5,071
53,707
6,096
50,398
45,726
1,784
6,064
55,292
7,890
45,141
37,895
1,680
4,775
54,431
8,011
48,605
38,812
1,715
3,130
4,121
2,353
45,816
4,172
2,630
684
3,859
3,290
25,774
5,165
2,374
456
3,878
3,595
18,277
4,459
2,335
185
6,624
3,222
15,291
4,872
2,107
278
5,367
3,282
15,312
5,034
2,380
410
4,896
3,117
14,567
5,054
2,130
436
4,546
2,877
13,812
4,795
2,048
489
1. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers.
1991
2. Maturity is time remaining to maturity,
3. Includes nonmonetary international and regional organizations.
A61
A62
3.21
International Statistics • December 1993
CLAIMS ON FOREIGN COUNTRIES
Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks 1
Billions of dollars, e n d of p e r i o d
1991
Area or country
1989
1993
1992
1990
June
Sept.
Dec.
Mar.
June
322.3
338.4
343.6
351.7r
Sept.
Dec.
Mar.
359.4r
346.0r
347.6r
363.0r
377.7r
r
r
137.4
6.2
15.3r
10.9
6.4
3.7
2.2
5.2
61.8r
6.7
18.9
r
133.9
5.6
15,3r
9.3
6.5
2.8
2.3
4.8
61.3 r
6.6
19.3r
r
143.6
6.1
13.6
9.9
6.7
3.7
3.0
5.3
66.3 r
8.6
20.4
149.7r
7.0
13.8
10.8
7.6
3.7
2.5
4.7 r
73.6 r
8.1
YJ.9
June
340.9
320.1
152.9
6.3
11.7
10.5
7.4
3.1
2.0
7.1
67.2
5.4
32.3
132.2
5.9
10.4
10.6
5.0
3.0
2.2
4.4
60.9
5.9
24.0
130.3
6.1
10.5
8.3
3.6
3.3
2.5
3.3
59.5
8.2
25.1
135.0
5.8
11.1
9.7
4.5
3.0
2.1
3.9
65.6
5.8
23.5
137.6
6.0
11.0
8.3
5.6
4.7
1.9
3.4
68.5
5.8
22.6
130.9*
5.3
10.0
8.4
5.4
4.3
2.0
3.2
64.8
6.5 r
21.1
136.2
6.2
ll^
8.8
8.0
3.3
1.9
4.6
65.9
6.7
18.7
13 Other industrialized countries
14 Austria
15 Denmark
16 Finland
17 Greece
18 Norway
19 Portugal
20
Spain
21
Turkey
22
Other Western Europe
23
South Africa
24
Australia
21.0
1.5
1.1
1.0
2.5
1.4
.4
7.1
1.2
1.0
2.0
1.6
22.9
1.4
1.1
.7
2.7
1.6
.6
8.3
1.7
1.2
1.8
1.8
21.3
1.1
1.2
.8
2.4
1.5
.6
7.1
1.9
1.1
1.8
2.0
22.1
1.0
.9
.6
2.3
1.4
.5
8.3
1.6
1.3
1.6
2.4
22.8
.6
.9
.7
2.6
1.4
.6
8.3
1.4
1.8
1.9
2.7
21.4r
.8
.8
.8
2.3
1.5
.5
7.7
1.2
1.5
1.8
2.3
25.5
.8
1.3
.8
2.8
1.7
.5
10.1
1.5
2.0
1.7
2.3
25.1
.7r
1.5
1.0
3.0
1.6
.5
9.8
1.5
1.5
1.7
2.3
24.0r
1.2
.9
.7
3.0
1.2
.4
9.0
1.3
1.7
1.7
2.9
25.5
1.2
.8
.7
2.8
1.8
.7
9.5
1.4
2.0
1.6
2.9
27.2
1.3
1.0
.9
3.1
1.8
.9
10.5
2.1 r
1.7r
1.3
2.5
25 OPEC 2
26
Ecuador
27
Venezuela
28
Indonesia
29 Middle East countries
30 African countries
17.1
1.3
7.0
2.0
5.0
1.7
12.8
1.0
5.0
2.7
2.5
1.7
14.0
.9
5.3
2.6
3.7
1.5
15.6
.8
5.6
2.8
5.0
1.5
14.5
.7
5.4
2.7
4.2
1.5
15.8
.7
5.4
3.0
5.3
1.4
16.2
.7
5.3
3.0
5.9
1.4
15.9
.7
5.4
3.0
5.4
1.4
16.1
.6
5.2
3.0
6.2
1.1
16.9
.6
5.3
3.1
6.7
1.1
15.9
.6
5.6
3.1
5.4
l.lr
31 Non-OPEC developing countries
77.5
65.4
64.4
64.7
63.9
69.7
68.1
72.8r
72. l r
74.3 r
76.51
6.3
19.0
4.6
1.8
17.7
.6
2.8
5.0
14.4
3.5
1.8
13.0
.5
2.3
4.6
11.6
3.6
1.6
14.3
.5
2.0
4.5
10.5
3.7
1.6
16.2
.4
1.9
4.8
9.6
3.6
1.7
15.5
.4
2.1
5.0
10.8
3.9
1.6
17.7
.4
2.2
5.1
10.6
4.0
1.6
16.3
.4
2.2
6.2
10.8
4.2
1.7
17.1
.5
2.5
6.6
10.8
4.4
1.8
16.0
.5
2.6
7.0
11.6
4.6
1.9
16.8
.4
2.6
6.6
12.3r
4.6 r
1.9
16.7r
.4
2.7 r
1 Total
2 G-10 countries and Switzerland
3
Belgium and Luxembourg
4
France
Germany
5
6
Italy
7
Netherlands
Sweden
8
9
Switzerland
10 United Kingdom
11 Canada
12 Japan
32
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other
39
40
41
42
43
44
45
46
47
Asia
China
Peoples Republic of China
Republic of China (Taiwan)
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia3
.3
4.5
3.1
.7
5.9
1.7
4.1
1.3
1.0
.2
3.5
3.3
.5
6.2
1.9
3.8
1.5
1.7
.6
4.1
3.0
.5
6.9
2.1
3.7
1.7
1.8
.4
4.1
2.8
.5
6.5
2.3
3.6
1.9
2.0
.3
4.1
3.0
.5
6.8
2.3
3.7
1.7
2.0
.3
4.8
3.6
.4
6.9
2.5
3.6
1.7
2.3
.3
4.6
3.8
.4
6.9
2.7
3.1
1.9
2.5
.3
5.0
3.6
.4
7.4
3.0
3.6
2.2
2.7
.7
5.2
3.2
.4
6.6
3.1 r
3.6
2.2
2.7
.6
5.3
3.1
.5
6.5
3.3
3.4
2.2
2.7
1.6
5.9
3.1
.4
6.9
3.7
2.9
2.4
2.6
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa 3
.4
.9
.0
1.0
.4
.8
.0
1.0
.4
.7
.0
.8
.4
.7
.0
.8
.4
.7
.0
.7
.3
.7
.0
.7
.5
.7
.0
.6
.3
.6
.0
.9
.2
.6
.0
1.0
.2
.5
.0
.8
.2
.6
.0
.9
52 Eastern Europe
53
Russia
54
Yugoslavia
55
Other
3.5
.7
1.6
1.3
2.3
.2
1.2
.9
2.1
.4
1.0
.7
1.8
.4
.8
.7
2.4
.9
.9
.7
2.9
1.4
.8
.6
3.0
1.7
.7
.6
3.1
1.8
.7
.7
3.1
1.9
.6
.6
2.9
1.7
.6
.7
3.2r
1.9
.6
.T
56 Offshore banking centers
57
Bahamas
58
Bermuda
59
Cayman Islands and other British West Indies
60
Netherlands Antilles
61
Panama 4
62
Lebanon
63
Hong Kong
64
Singapore
65
Other 3
38.4
5.5
1.7
9.0
2.3
1.4
.1
11.3
7.0
.0
44.7
2.9
4.4
11.7
7.9
1.4
.1
9.7
6.6
.0
50.2
6.8
4.2
14.9
1.4
1.3
.1
14.3
7.2
.0
54.6
6.7
7.1
13.8
3.9
1.3
.1
14.0
7.7
.0
54.2
11.9
2.3
15.8
1.2
1.4
.1
14.4
7.1
.0
15.3r
3.9
18.6r
1.0
1.6r
.1
14.0
8.5
.0
61.5r
58.4r
6.9 r
6.2
21.8r
1.1
.1
15.0
6.4
.0
54.6r
9.0 r
3.8
16.9r
.7
2.0 r
.1
15.2
6.8
.0
.1
13.8
6.5
.0
60.2r
9.6 r
4.1
17.6
1.6
2.0 r
.1
16.7
8.4
.0
57.8 r
6.9
4.5
\5.T
2.5
2.r
.1
16.8
9.3 r
.0
66 Miscellaneous and unallocated 6
30.5
39.9
40.0
44.4
48.0
47.8
48.6
36.8
39.7r
39.5r
47.3 r
1. The banking offices covered by these data are the U.S. offices and foreign
branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks.
Offices not covered include (1) U.S. agencies and branches of foreign banks, and
(2) foreign subsidiaries of U.S. banks. U.S. office data include other types of
U.S.-owned depository institutions as well as some types of brokers and dealers.
To minimize duplication, the data are adjusted to exclude the claims on foreign
branches held by a U.S. office or another foreign branch of the same banking
institution. The data in this table combine foreign branch claims in table 3.14 (the
sum of lines 7 through 10) with the claims of U.S. offices in table 3.18 (excluding
those held by agencies and branches of foreign banks and those constituting
claims on own foreign branches).
Since June 1984, reported claims held by foreign branches have been reduced
5.1
19.3r
.8
by an increase in the reporting threshold for "shell" branches from $50 million to
$150 million equivalent in total assets, the threshold now applicable to all
reporting branches.
2. Organization of Petroleum Exporting Countries, shown individually; other
members of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar,
Saudi Arabia, and United Arab Emirates); and Bahrain and Oman (not formally
members of OPEC).
3. Excludes Liberia.
4. Includes Canal Zone.
5. Foreign branch claims only.
6. Includes New Zealand, Liberia, and international and regional
organizations.
Nonbank-Reported
3.22
Data
A63
LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in
the United States 1
Millions of d o l l a r s , e n d of p e r i o d
1993
1992
Type of liability and area or country
1989
1990
1991
Mar.
June
Sept.
Dec.
Mar.
June p
1
38,764
46,043
43,453
44,193
44,109
45,184
43,144
44,111"
46,141
7 Payable in dollars
3 Payable in foreign currencies
33,973
4,791
40,786
5,257
38,061
5,392
38,735
5,458
37,616
6,493
36,792
8,392
35,739
7,405
36,074r
8,037r
36,602
9,539
By type
4 Financial liabilities
5 Payable in dollars
Payable in foreign currencies
6
17,879
14,035
3,844
21,066
16,979
4,087
21,872
17,760
4,112
22,185
17,957
4,228
21,756
16,714
5,042
23,281
16,546
6,735
22,047
15,700
6,347
22,840"
16,189"
6,651"
24,219
16,262
7,957
7 Commercial liabilities
8 Trade payables
Advance receipts and other liabilities
9
20,885
8,070
12,815
24,977
10,683
14,294
21,581
8,662
12,919
22,008
9,125
12,883
22,353
9,715
12,638
21,903
9,586
12,317
21,097
9,046
12,051
21,271"
9,873
11,398"
21,922
9,692
12,230
19,938
947
23,807
1,170
20,301
1,280
20,778
1,230
20,902
1,451
20,246
1,657
20,039
1,058
19,885"
1,386
20,340
1,582
11,660
340
258
464
941
541
8,818
10,978
394
975
621
1,081
545
6,357
11,805
217
2,106
682
1,056
408
6,329
12,349
174
1,997
666
1,025
355
7,238
12,728
194
2,324
634
979
490
7,244
13,767
256
2,785
738
980
627
7,580
12,530
434
1,608
740
606
569
7,910
12,995
299
1,610
751
639
503
8,632
14,355
268
2,295
781
690
554
9,112
10
11
1?
13
14
15
16
17
18
Payable in dollars
Payable in foreign currencies
By area or country
Financial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
19
70
71
77
73
74
75
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
77
78
29
Japan
Middle East oil-exporting countries
30
31
Oil-exporting countries
32
Allother 4
Commercial liabilities
33
Europe
Belgium and Luxembourg
34
35
France
36
Netherlands
37
Switzerland
38
United Kingdom
39
551
492
610
229
267
283
337
320
491
1,357
157
17
0
724
6
0
4,153
371
0
0
3,160
5
4
4,404
537
114
6
3,144
7
4
4,092
3%
114
8
2,960
7
4
3,373
343
114
10
2,232
8
4
3,462
220
115
18
2,408
12
5
3,515
349
114
19
2,342
12
6
3,624"
509"
114
18
2,307"
13
5
3,428
404
124
18
2,202
11
5
4,151
3,299
2
5,295
4,065
5
5,338
4,102
13
5,366
4,107
13
5,229
4,136
10
5,642
4,609
17
5,477
4,451
19
5,620"
4,648"
24
5,764
4,621
19
2
0
2
0
6
4
7
6
0
0
5
0
6
0
6
0
130
123
100
409
52
88
89
85
28
44
50
9,071
175
877
1,392
710
693
2,620
10,310
275
1,218
1,270
844
775
2,792
8,126
248
957
944
709
575
2,310
7,666
256
678
880
574
543
2,445
7,309
240
659
702
605
461
2,404
6,879
173
688
744
601
430
2,262
6,704
287
663
621
556
398
2,250
6,640"
143
669
613
666
532
2,135"
6,945
267
769
634
710
435
2,186
40
Canada
1,124
1,261
990
1,095
1,077
1,085
892
929
933
41
47
43
44
45
46
47
Latin America and Caribbean
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,224
41
308
100
27
323
164
1,672
12
538
145
30
475
130
1,352
3
310
219
107
304
94
1,701
13
493
230
108
375
168
1,803
8
409
212
73
475
279
1,496
3
338
115
85
322
125
1,586
6
293
203
57
444
130
1,620
18
437
107
87
385
167
1,814
6
356
225
16
659
163
48
49
50
Japan
Middle Eastern oil-exporting countries'2'5
7,550
2,914
1,632
9,483
3,651
2,016
9,330
3,720
1,498
9,890
3,549
1,591
10,439
3,537
1,778
11,006
3,909
1,813
10,787
3,994
1,792
10,840
4,007
1,723
10,965
3,723
1,771
51
52
Oil-exporting countries
886
339
844
422
713
327
644
253
775
389
675
335
556
295
574
236
603
315
1,030
1,406
1,070
1,012
950
762
572
668
662
53
Other 4
1. For a description of the changes in the international statistics tables, see
Federal Reserve Bulletin, vol. 65, (July 1979), p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
5. Revisions include a reclassification of transactions, which also affects the
totals for Asia and the grand totals.
A64
3.23
International Statistics • December 1993
CLAIMS ON UNAFFILIATED FOREIGNERS
the United States 1
Reported by Nonbanking Business Enterprises in
Millions of d o l l a r s , e n d of p e r i o d
1992
Type, and area or country
1989
1990
1993
1991
Mar.
June
Sept.
Dec.
Mar. r
June"
1 Total
33,173
35,348
42,233
40,899
41,037
38,345
38,039
44,811
40,849
2 Payable in dollars
3 Payable in foreign currencies
30,773
2,400
32,760
2,589
39,688
2,545
38,281
2,618
38,071
2,966
35,460
2,885
35,562
2,477
42,086
2,725
37,797
3,052
By type
4 Financial claims
5
Deposits
6
Payable in dollars
7
Payable in foreign currencies
Other financial claims
8
9
Payable in dollars
Payable in foreign currencies
10
19,297
12,353
11,364
989
6,944
6,190
754
19,874
13,577
12,552
1,025
6,297
5,280
1,017
25,264
17,290
16,415
875
7,974
7,094
880
24,289
16,262
15,076
1,186
8,027
7,305
722
24,037
15,056
13,717
1,339
8,981
8,277
704
21,311
12,436
11,353
1,083
8,875
7,868
1,007
21,041
12,615
11,826
789
8,426
7,688
738
25,823
16,463
15,407
1,056
9,360
8,634
726
21,480
11,598
10,682
916
9,882
8,985
897
11 Commercial claims
12 Trade receivables
13 Advance payments and other claims
13,876
12,253
1,624
15,475
13,657
1,817
16,969
14,244
2,725
16,610
14,044
2,566
17,000
14,538
2,462
17,034
14,330
2,704
16,998
14,711
2,287
18,988
16,924
2,064
19,369
16,939
2,430
14
15
13,219
657
14,927
548
16,179
790
15,900
710
16,077
923
16,239
795
16,048
950
18,045
943
18,130
1,239
8,463
28
153
152
238
153
7,496
9,645
76
371
367
265
357
7,971
13,724
13
314
335
385
591
11,445
14,243
12
279
285
727
682
11,669
13,225
25
788
377
732
780
8,789
11,433
16
811
319
767
602
7,915
9,514
8
776
399
537
507
6,130
10,162
6
905
364
544
478
6,833
9,407
13
774
377
499
460
6,350
16
17
18
19
20
21
22
Payable in dollars
Payable in foreign currencies
By area or country
Financial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
23
Canada
1,904
2,934
2,716
2,753
2,533
2,245
1,721
2,090
1,758
24
25
26
27
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
8,020
1,890
7
224
5,486
94
20
6,201
1,090
3
68
4,635
177
25
7,689
758
8
144
6,304
212
40
6,200
493
12
143
5,124
212
34
6,849
523
12
134
5,759
244
32
6,452
1,099
65
396
4,449
239
26
8,326
618
40
4%
6,530
286
29
9,553
320
79
592
8,101
235
23
6,612
697
258
590
4,558
270
24
31
32
33
Asia
Japan
Middle East oil-exporting countries
590
213
8
860
523
8
675
385
5
642
380
3
975
728
4
727
481
4
846
683
3
3,263
3,066
8
2,961
2,444
10
34
35
Africa
Oil-exporting countries
140
12
37
0
57
1
60
0
57
0
71
1
79
9
128
1
125
1
36
All other 4
180
195
403
391
398
383
555
627
617
6,209
242
964
696
479
313
1,575
7,044
212
1,240
807
555
301
1,775
7,935
192
1,542
940
643
295
2,084
7,842
181
1,560
933
646
323
2,082
8,087
255
1,561
905
666
394
2,169
7,742
172
1,739
870
588
294
1,973
7,442
184
1,392
880
541
260
1,799
8,274
167
1,397
939
724
426
2,282
8,770
170
1,452
964
555
441
2,506
37
38
39
40
41
42
43
Commercial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
44
Canada
1,091
1,074
1,109
1,115
1,058
1,105
1,192
1,186
1,285
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,184
58
323
297
36
508
147
2,375
14
246
326
40
661
192
2,562
11
263
418
41
801
202
2,544
11
272
364
45
865
206
2,653
9
291
438
32
829
251
3,113
7
245
395
43
942
302
2,827
18
237
336
39
837
317
3,381
18
195
820
17
963
336
3,376
16
239
780
42
876
310
52
53
54
Asia
Japan
Middle Eastern oil-exporting countries
3,570
1,199
518
4,127
1,460
460
4,558
1,878
621
4,343
1,782
635
4,456
1,786
609
4,300
1,793
511
4,649
1,850
677
5,289
2,148
769
5,029
1,824
659
55
56
Africa
Oil-exporting countries
429
108
488
67
418
95
418
75
422
73
430
60
540
78
453
75
507
97
57
Other 4
393
367
387
348
324
344
348
405
402
1. For a description of the changes in the international statistics tables, see
Federal Reserve Bulletin, vol. 65, (July 1979), p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
Securities Holdings and Transactions
3.24
A65
FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
1993
Transaction and area or country
1991
1993
1992
Jan.Aug.
Feb.
Mar.'
Apr. r
May r
June*
July r
Aug.P
23,094
22,308
24,310
23,467
24,439
25,042
26,111
23,687
U.S. corporate securities
STOCKS
1 Foreign purchases
2 Foreign sales
3 Net purchases or sales ( - )
4 Foreign countries
5
6
7
8
9
10
11
12
13
14
15
16
17
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Japan
Africa
Other countries
18 Nonmonetary international and
regional organizations
211,207
200,116
221,426r
226,548r
198,087
189,928
28,766*
25,995*
11,091
—5,122r
8,159
2,771r
2,446
-331
786
843
-603
2,424
10,522
r
—5,155
7,811
2,681r
2,289
-339
790
815
-650
2,397
53
9
-63
-227
-131
-352
3,845
2,177
-134
4,255
1,179
153
174
—4,913r
-1,350
-66r
-262
168
-3,301
1,407
2,203
-88
-3,943
-3,598
10
169
2,936
-255
811
-222
2,293
-646
-2,218
2,304
-306
5,054
1,292
29
12
2,269*
223
95*
-11
501
1,135
57
-235
-65
593
-624
27
35
972
-183
100
68
356
475
167
403
-13
763
250
2
-5
-650
-154
137
32
280
-1,140
91
246
7
2
-530
-48
13
-619
-86
6
35
50
-689
-132
509
56
910
452
10
56
415
-66
99
-91
178
195
-532
72
-22
1,073
230
20
-211
-185
45
76
-452
369
-73
-1,400
413
-133
632
626
-49
72
676
-9
202
133
354
-199
-128
591
-44
1,204
860
63
35
568
33
348
157
8
-4
28
47
27
25,216
23,264
20,817
15,765
19,325
15,514
24,091
16,825
22,738
20,730
22,288
16,475
90
27,061
24,615
25,123
25,454
BONDS2
153,096
125,637
214,922r
175,737*
173,866
142,592
22,184*
18,573*
21 Net purchases or sales ( - )
27,459
39,185r
31,274
3,611'
1,952
5,052
3,811
7,266
2,008
5,813
22 Foreign countries
27,590
38,069r
31,652
3,737r
2,088
5,073
3,843
7,229
2,018
5,807
23
24
25
26
27
28
29
30
31
32
33
34
35
13,112
847
1,577
482
656
8,931
1,623
2,672
1,787
8,459
5,767
52
-116
17,540*
1,203
2,480*
540
-579
12,526*
237
9,300
3,166
7,545
-450
354
-73
9,670
1,566
682
-135
-574
7,433
936
7,589
1,896
10,717
5,449
749
95
2,761*
311
54*
-133
-38
2,992*
145
437*
248
149
61
27
-30
31
75
-55
-178
11
-237
138
490
263
1,216
595
-10
-40
1,616
508
815
108
-239
975
291
632
463
2,082
991
0
-11
360
595
228
-7
-219
-303
20
1,262
115
2,062
940
21
3
2,710
-12
-241
-134
-56
3,033
397
1,770
202
2,089
863
2
59
-1,001
-76
2
11
172
-1,214
218
901
147
1,382
890
224
147
2,108
64
-207
317
-327
1,853
164
1,678
158
1,432
919
317
-50
-131
1,116
-378
-126
-136
-21
-32
37
-10
6
19 Foreign purchases
20 Foreign sales
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Japan
Africa
Other countries
36 Nonmonetary international and
regional organizations
Foreign securities
37 Stocks, net purchases or sales (~) 3
38
Foreign purchases
39
Foreign sales 3
40 Bonds, net purchases or sales ( - )
41
Foreign purchases
42
Foreign sales
-31,967
120,598
152,565
-14,828
330,311
345,139
-32,295*
150,037*
182,332*
-19,585*
486,238
505,823*
43 Net purchases or sales ( - ) , of stocks and bonds
-46,795
—51,880r
-80,829
-11,089*
-9,214
-6,942
44 Foreign countries
-46,711
-55,216*
-80,546
-ll,227r
-8,945
-7,221
45
46
47
48
49
50
-34,452
-7,004
759
-7,350
-9
1,345
-37,284*
-6,635
-3,881*
-6,654*
-2
-760
-58,863
-11,229
-2,461
-6,290
-192
-1,511
-6,663*
-5,028
25
546*
3
-110*
-3,098
-3,034
68
-2,481
-18
-382
-3,252
-818
-2,551
-531
-18
-51
-269
279
Europe
Canada
Latin America and Caribbean
Asia
Africa
Other countries
51 Nonmonetary international and
regional organizations
-84
3,336
1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait,
Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States).
2. Includes state and local government securities and securities of U.S.
government agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. corporations organized to finance direct investments
abroad.
-38,916
139,821
178,737
-41,913
494,180
536,093
-283
-1,561*
15,063*
16,624*
-9,528
56,046
65,574
138
-4,583
17,436
22,019
-4,631
70,132
74,763
-4,029
19,297
23,326
-2,913
55,766
58,679
-6,317
18,523
24,840
-7,528
70,377
77,905
-7,768
19,620
27,388
-10,608
68,779
79,387
-4,338
-13,845
-18,376
-9,570
-4,671
-13,907
-18,486
-9,641
-5,382
11
1,092
-185
-186
-21
-11,719
-1,277
421
-780
9
-561
-15,279
-2,557
-647
131
18
-152
-6,985
1,635
-1,064
-2,600
7
-634
333
62
110
71
-3,793
16,465
20,258
-545
58,771
59,316
-8,517
20,682
29,199
-1,053
75,764
76,817
3. In a July 1989 merger, the former stockholders of a U.S. company received
$5,453 million in shares of the new combined U . K . company. This transaction is
not reflected in the data,
A66
3.25
International Statistics • December 1993
MARKETABLE U.S. TREASURY BONDS A N D NOTES
Foreign Transactions
M i l l i o n s of d o l l a r s
1993
Country or area
1991
1993
1992
Jan.Aug.
Feb.
Mar.
Apr/
May"
June r
July"
Aug."
Transactions, net purchases or sales (—) during period 1
1 Estimated total
19,865
39,288
15,457
-1,273
6,581 r
4,232
-1,159
-5,710
-1,531
13,878
2 Foreign countries
19,687
37,935
14,516
-2,166
6,029"
4,393
-877
-5,955
-1,144
14,380
3
Europe
4
Belgium and Luxembourg
Germany
5
Netherlands
6
7
Sweden
Switzerland
8
United Kingdom
9
Other Europe and former U.S.S.R
10
11 Canada
8,663
523
-4,725
-3,735
-663
1,007
6,218
10,037
-3,019
19,625
1,985
2,076
-2,959
-804
488
24,184
-5,345
562
580
1,259
-12,183
-30
1,211
-2,243
15,940
-3,374
10,509
-382
45
-1,632
206
258
-455
183
1,013
82
-3,379"
640"
-2,757
66
-540
-1,569
742"
39"
2,490
1,518
-387
-1,382
731
-100
-719
2,659
716
1,386
-190
647
-3,396
108
649
108
2,948
-1,254
522
1,473
86
-1,100
-393
673
888
2,147
-828
133
-1,539
505
-2,918
524
32
-223
1,455
-914
2,270
3,679
-218
305
-34
293
-74
3,781
-374
324
12 Latin America and Caribbean
Venezuela
13
14
Other Latin America and Caribbean
Netherlands Antilles
15
16 Asia
Japan
17
18
19 Other
10,285
10
4,179
6,097
3,367
-4,081
689
-298
-3,222
539
-1,956
-1,805
23,517
9,817
1,103
-3,650
-2,452
384
-3,801
965
7,350
12,413
316
-1,787
445
179
-1,656
1,922
-1,032
804
-139
-1,140
-537
154
-471
-220
7,220"
3,457
-66
301
-2,020
74
1,096
-3,190
3,813
3,324
67
-371
-3,880
152
-1,863
-2,169
2,994
3,291
-2
-321
-1,419
5
711
-2,135
-5,687
-301
81
-536
-333
2
510
-845
-2,587
-980
116
929
6,787
-7
1,181
5,613
3,765
3,561
292
-467
178
-358
-72
1,353
1,018
533
941
-287
620
893
581
235
552
56
1
-161
-228
16
-282
-318
-17
245
402
106
-387
-321
-21
-502
-687
30
19,687
1,190
18,496
37,935
6,876
31,059
14,516
-13,563
28,079
-2,166
-4,364
2,198
6,029"
-616"
6,645"
4,393
2,709
1,684
-877
-3,424
2,547
-5,955
-760
-5,195
-1,144
-4,880
3,736
14,380
752
13,628
-6,822
239
4,317
11
-7,114
4
-1,855
0
811
0
114
-4
-1,070
0
-2,443
0
-1,261
0
-1,172
0
20 Nonmonetary international and regional organizations
International
21
22
Latin American regional
MEMO
23 Foreign countries
24
Official institutions
Other foreign 2
25
Oil-exporting countries
26 Middle E a s t 2
27 Africa 3
1. Official and private transactions in marketable U.S. Treasury securities
having an original maturity of more than one year. Data are based on monthly
transactions reports. Excludes nonmarketable U.S. Treasury bonds and notes
held by official institutions of foreign countries.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (TruciaJ States),
3. Comprises Algeria, Gabon, Libya, and Nigeria,
Interest and Exchange Rates
3.26
A67
DISCOUNT RATES OF FOREIGN CENTRAL BANKS 1
Percent per year
Country
Country
Month
effective
5.75
6.0
4.63
7.25
6.45
Austria..
Belgium .
Canada..
Denmark
France 2 ..
Oct.
Oct.
Oct.
Oct.
Oct.
1993
1993
1993
1993
1993
Germany...
Italy
Japan
Netherlands
1. Rates shown are mainly those at which the central bank either discounts or
makes advances against eligible commercial paper or government securities for
commercial banks or brokers. For countries with more than one rate applicable to
such discounts or advances, the rate shown is the one at which it is understood
that the central bank transacts the largest proportion of its credit operations.
3.27
Rate on Oct. 30, 1993
Rate on Oct. 30, 1993
Rate on Oct. 30, 1993
Country
Percent
Month
effective
5.75
8.0
1.75
5.25
Oct. 1993
Oct. 1993
Sept. 1993
Oct. 1993
Norway
Switzerland
United Kingdom
Percent
Month
effective
7.0
4.25
12.0
Oct. 1993
Oct. 1993
Sept. 1992
2. Since February 1981, the rate has been that at which the Bank of France
discounts Treasury bills for seven to ten days.
FOREIGN SHORT-TERM INTEREST RATES 1
P e r c e n t p e r y e a r , a v e r a g e s of daily
figures
1993
Type or country
1
2
3
4
5
6
7
8
9
10
Eurodollars
United Kingdom.
Canada
Germany
Switzerland
Netherlands
France
Italy
Belgium
Japan
1992
1990
8.16
14.73
13.00
8.41
8.71
8.57
10.20
12.11
9.70
7.75
5.86
11.47
9.07
9.15
8.01
9.19
9.49
12.04
9.30
7.33
3.70
9.56
6.76
9.42
7.67
9.25
10.14
13.91
9.31
4.39
1. Rates are for three-month interbank loans, with the following exceptions:
Canada, finance company paper; Belgium, three-month Treasury bills; and Japan,
CD rate.
Apr.
May
3.10
5.90
5.43
7.81
4.97
7.43
8.73
11.41
7.94
3.22
3.12
5.91
5.29
7.41
4.97
6.98
7.48
10.74
7.16
3.24
3.21
5.83
4.91
7.51
4.99
6.64
7.19
10.18
6.87
3.23
July
Aug.
Sept.
Oct.
3.17
5.88
4.48
7.12
4.62
6.45
7.72
9.42
7.12
3.22
3.14
5.79
4.58 r
6.49
4.56
6.27
7.45r
9.20
9.02r
3.02r
3.08
5.88
4.90
6.52
4.61
6.26
7.07
9.05
9.82
2.59
3.26
5.74
4.76
6.53
4.44
6.20
6.85
8.69
9.05
2.44
A68
3.28
International Statistics • December 1993
FOREIGN EXCHANGE RATES 1
C u r r e n c y units per dollar except as noted
1993
Country/currency unit
1
2
3
4
5
6
7
8
9
10
Australia/dollar 2
Austria/schilling
Belgium/franc
Canada/dollar
China, P.R./yuan
Denmark/krone
Finland/markka
France/franc
Germany/deutsche mark.
Greece/drachma
11
12
13
14
15
16
17
18
19
20
Hong Kong/dollar
India/rupee
Ireland/pound
Italy/lira
Japan/yen
Malaysia/ringgit
Netherlands/guilder
New Zealand/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 .
MEMO
31 United States/dollar 3
1990
1991
1992
June
July
Aug. r
Sept.
Oct.
78.069
11.331
33.424
1.1668
4.7921
6.1899
3.8300
5.4467
1.6166
158.59
77.872
11.686
34.195
1.1460
5.3337
6.4038
4.0521
5.6468
1.6610
182.63
73.521
10.992
32.148
1.2085
5.5206
6.0372
4.4865
5.2935
1.5618
190.81
69.859
11.305
33.044
1.2698
5.7392
6.1751
5.4847
5.4180
1.6071
218.12
67.492
11.637
34.009
1.2789
5.7504
6.3380
5.5674
5.5700
1.6547
225.45
67.788
12.071
35.483
1.2820
5.7756
6.6531
5.7852
5.8464
1.7157
234.77
67.736
11.920
35.985
1.3080
5.7906
6.8976
5.8315
5.9298
1.6944
237.64
65.167
11.402
34.847
1.3215
5.8015
6.6336
5.7868
5.6724
1.6219
232.56
66.100
11.540
35.674
1.3263
5.8013
6.6379
5.7554
5.7541
1.6405
237.93
7.7899
17.492
165.76
1,198.27
145.00
2.7057
1.8215
59.619
6.2541
142.70
7.7712
22.712
161.39
1,241.28
134.59
2.7503
1.8720
57.832
6.4912
144.77
7.7402
28.156
170.42
1,232.17
126.78
2.5463
1.7587
53.792
6.2142
135.07
7.7290
31.613
151.65
1,475.66
110.34
2.5661
1.8026
54.290
6.8027
151.89
7.7362
31.668
147.47
1,505.05
107.41
2.5696
1.8559
53.949
6.9986
157.63
7.7556
31.600
140.83
1,586.02
107.69
2.5672
1.9299
54.900
7.3179
167.87
7.7515
31.612
139.05
1,603.75
103.77
2.5514
1.9062
55.261
7.3579
173.27
7.7384
31.578
143.40
1,569.10
105.57
2.5475
1.8214
55.157
7.0829
166.28
7.7307
31.505
143.19
1,600.93
107.02
2.5478
1.8438
55.260
7.1755
169.60
1.8134
2.5885
710.64
101.96
40.078
5.9231
1.3901
26.918
25.609
178.41
1.7283
2.7633
736.73
104.01
41.200
6.0521
1.4356
26.759
25.528
176.74
1.6294
2.8524
784.58
102.38
44.013
5.8258
1.4064
25.160
25.411
176.63
1.6136
3.1787
803.19
121.30
47.965
7.3271
1.4504
25.978
25.234
154.77
1.6175
3.2408
805.91
127.11
48.073
7.4541
1.4769
26.267
25.214
150.82
1.6206
3.3518
809.58
134.93
48.643
7.9802
1.5147
26.682
25.331
149.55
1.6100
3.3660
811.94
138.51
48.750
8.0466
1.4966
26.950
25.191
149.14
1.5972
3.4135
811.84
130.54
48.854
8.0170
1.4182
26.931
25.1%
152.48
1.5735
3.3924
813.45
132.18
48.954
8.0195
1.4432
26.865
25.269
150.23
89.09
89.84
86.61
91.81
94.59
94.32
92.07
93.29
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
May
90.24
the 1972-76 average world trade of that country divided by the average world
trade of all ten countries combined. Series revised as of August 1978 (see Federal
Reserve Bulletin, vol. 64 (August 1978), p. 700).
A69
Guide to Statistical Releases and Special Tables
STATISTICAL RELEASES—List
Published Semiannually, with Latest Bulletin Reference
Anticipated schedule of release dates for periodic releases
SPECIAL TABLES—Quarterly
Issue
December 1993
Page
A78
Data Published Irregularly, with Latest Bulletin Reference
Title and Date
Issue
Page
Assets and liabilities of commercial banks
September 30, 1992
December 31, 1992
March 31, 1993
June 30, 1993
February
May
August
November
1993
1993
1993
1993
A70
A70
A70
A70
Terms of lending at commercial banks
November 1992
February 1993
May 1993
August 1993
February
May
August
November
1993
1993
1993
1993
A76
A76
A76
A76
Assets and liabilities of U.S. branches and agencies offoreign banks
September 30, 1992
December 31, 1992
March 31, 1993
June 30, 1993
February
May
August
November
1993
1993
1993
1993
A80
A80
A80
A80
Pro forma balance sheet and income statements for priced service operations
June 30, 1991
September 30, 1991
March 30, 1992
June 30, 1992
November
January
August
October
1991
1992
1992
1992
A80
A70
A80
A70
Assets and liabilities of life insurance companies
June 30, 1991
September 30, 1991
December 31, 1991
September 30, 1992
December
May
August
March
1991
1992
1992
1993
A79
A81
A83
A71
A70
Index to Statistical Tables
References are to pages A3-A68 although the prefix "A" is omitted in this index
ACCEPTANCES, bankers (See Bankers acceptances)
Agricultural loans, commercial banks, 22, 23
Assets and liabilities (See also Foreigners)
Banks, by classes, 20-23
Domestic finance companies, 36
Federal Reserve Banks, 11
Financial institutions, 28
Foreign banks, U.S. branches and agencies, 24
Automobiles
Consumer installment credit, 39
Production, 47, 48
BANKERS acceptances, 10, 23, 26
Bankers balances, 20-23. (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 35
Rates, 26
Branch banks, 24, 55
Business activity, nonfinancial, 45
Business expenditures on new plant and equipment, 35
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 46
Capital accounts
Banks, by classes, 20
Federal Reserve Banks, 11
Central banks, discount rates, 67
Certificates of deposit, 26
Commercial and industrial loans
Commercial banks, 18, 22
Weekly reporting banks, 22-24
Commercial banks
Assets and liabilities, 20-23
Commercial and industrial loans, 18, 20, 21, 22, 23, 24
Consumer loans held, by type and terms, 39
Deposit interest rates of insured, 16
Loans sold outright, 22
Nondeposit funds, 19
Real estate mortgages held, by holder and property, 38
Time and savings deposits, 4
Commercial paper, 25, 26, 36
Condition statements {See Assets and liabilities)
Construction, 45, 49
Consumer installment credit, 39
Consumer prices, 45, 46
Consumption expenditures, 52, 53
Corporations
Nonfinancial, assets and liabilities, 35
Profits and their distribution, 35
Security issues, 34, 65
Cost of living {See Consumer prices)
Credit unions, 39
Currency in circulation, 5, 14
Customer credit, stock market, 27
DEBITS to deposit accounts, 17
Debt {See specific types of debt or securities)
Demand deposits
Banks, by classes, 20-24
Demand deposits—Continued
Ownership by individuals, partnerships, and
corporations, 24
Turnover, 17
Depository institutions
Reserve requirements, 9
Reserves and related items, 4, 5, 6, 13
Deposits {See also specific types)
Banks, by classes, 4, 20-23, 24
Federal Reserve Banks, 5, 11
Interest rates, 16
Turnover, 17
Discount rates at Reserve Banks and at foreign central banks and
foreign countries {See Interest rates)
Discounts and advances by Reserve Banks {See Loans)
Dividends, corporate, 35
EMPLOYMENT, 45
Eurodollars, 26
FARM mortgage loans, 38
Federal agency obligations, 5, 10, 11, 12, 31, 32
Federal credit agencies, 33
Federal finance
Debt subject to statutory limitation, and types and ownership
of gross debt, 30
Receipts and outlays, 28, 29
Treasury financing of surplus, or deficit, 28
Treasury operating balance, 28
Federal Financing Bank, 28, 33
Federal funds, 7, 19, 22, 23, 24, 26, 28
Federal Home Loan Banks, 33
Federal Home Loan Mortgage Corporation, 33, 37, 38
Federal Housing Administration, 33, 37, 38
Federal Land Banks, 38
Federal National Mortgage Association, 33, 37, 38
Federal Reserve Banks
Condition statement, 11
Discount rates {See Interest rates)
U.S. government securities held, 5, 11, 12, 30
Federal Reserve credit, 5, 6, 11, 12
Federal Reserve notes, 11
Federally sponsored credit agencies, 33
Finance companies
Assets and liabilities, 36
Business credit, 36
Loans, 39
Paper, 25, 26
Financial institutions, loans to, 22, 23, 24
Float, 51
Flow of funds, 40, 42, 43, 44
Foreign banks, assets and liabilities of U.S. branches and
agencies, 23, 24
Foreign currency operations, 11
Foreign deposits in U.S. banks, 5, 11, 22, 23
Foreign exchange rates, 68
Foreign trade, 54
Foreigners
Claims on, 55, 57, 60, 61, 62, 64
Liabilities to, 23, 54, 55, 57, 58, 63, 65, 66
A71
GOLD
Certificate account, 11
Stock, 5, 54
Government National Mortgage Association, 33, 37, 38
Gross domestic product, 51
HOUSING, new and existing units, 49
INCOME, personal and national, 45, 51, 52
Industrial production, 45, 47
Installment loans, 39
Insurance companies, 30, 38
Interest rates
Bonds, 26
Consumer installment credit, 39
Deposits, 16
Federal Reserve Banks, 8
Foreign central banks and foreign countries, 67
Money and capital markets, 26
Mortgages, 37
Prime rate, 25
International capital transactions of United States, 53-67
International organizations, 57, 58, 60, 63, 64
Inventories, 51
Investment companies, issues and assets, 35
Investments (See also specific types)
Banks, by classes, 20, 21, 22, 23, 24
Commercial banks, 4, 18, 20-23
Federal Reserve Banks, 11, 12
Financial institutions, 38
LABOR force, 45
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 20-23
Commercial banks, 4, 18, 20-23
Federal Reserve Banks, 5, 6, 8, 11, 12
Financial institutions, 38
Insured or guaranteed by United States, 37, 38
MANUFACTURING
Capacity utilization, 46
Production, 46, 48
Margin requirements, 27
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 7
Reserve requirements, 9
Mining production, 48
Mobile homes shipped, 49
Monetary and credit aggregates, 4, 13
Money and capital market rates, 26
Money stock measures and components, 4, 14
Mortgages (See Real estate loans)
Mutual funds, 35
Mutual savings banks (See Thrift institutions)
NATIONAL defense outlays, 29
National income, 51
OPEN market transactions, 10
PERSONAL income, 52
Prices
Consumer and producer, 45, 50
Stock market, 27
Prime rate, 25
Producer prices, 45, 50
Production, 45, 47
Profits, corporate, 35
REAL estate loans
Banks, by classes, 18, 22, 23, 38
Terms, yields, and activity, 37
Type of holder and property mortgaged, 38
Repurchase agreements, 7, 19, 22, 23, 24
Reserve requirements, 9
Reserves
Commercial banks, 20
Depository institutions, 4, 5, 6, 13
Federal Reserve Banks, 11
U.S. reserve assets, 54
Residential mortgage loans, 37
Retail credit and retail sales, 39, 40, 45
SAVING
Flow of funds, 40, 42, 43, 44
National income accounts, 51
Savings and loan associations, 38, 39, 40. (See also SAIF-insured
institutions)
Savings banks, 38, 39
Savings deposits (See Time and savings deposits)
Securities (See also specific types)
Federal and federally sponsored credit agencies, 33
Foreign transactions, 65
New issues, 34
Prices, 27
Special drawing rights, 5, 11, 53, 54
State and local governments
Deposits, 22, 23
Holdings of U.S. government securities, 30
New security issues, 34
Ownership of securities issued by, 22, 23
Rates on securities, 26
Stock market, selected statistics, 27
Stocks (See also Securities)
New issues, 34
Prices, 27
Student Loan Marketing Association, 33
TAX receipts, federal, 29
Thrift institutions, 4. (See also Credit unions and Savings and
loan associations)
Time and savings deposits, 4, 14, 16, 19, 20, 21, 22, 23, 24
Trade, foreign, 54
Treasury cash, Treasury currency, 5
Treasury deposits, 5, 11, 28
Treasury operating balance, 28
UNEMPLOYMENT, 45
U.S. government balances
Commercial bank holdings, 20, 21, 22, 23
Treasury deposits at Reserve Banks, 5, 11, 28
U.S. government securities
Bank holdings, 20-23, 24, 30
Dealer transactions, positions, and financing, 32
Federal Reserve Bank holdings, 5, 11, 12, 30
Foreign and international holdings and
transactions, 11, 30, 66
Open market transactions, 10
Outstanding, by type and holder, 28, 30
Rates, 25
U.S. international transactions, 53-67
Utilities, production, 48
VETERANS Administration, 37, 38
WEEKLY reporting banks, 22-24
Wholesale (producer) prices, 45, 50
YIELDS (See Interest rates)
A72
Federal Reserve Board of Governors
and Official Staff
ALAN GREENSPAN, Chairman
DAVID W. MULLINS, JR., Vice Chairman
OFFICE OF BOARD
DIVISION OF INTERNATIONAL
MEMBERS
JOSEPH R. COYNE, Assistant
DONALD J. WINN, Assistant
WAYNE D . ANGELL
EDWARD W . KELLEY, JR.
to the Board
to the Board
THEODORE E. ALLISON, Assistant to the Board for Federal
Reserve System Affairs
LYNN S. FOX, Special Assistant to the Board
WINTHROP P. HAMBLEY, Special Assistant to the Board
BOB STAHLY MOORE, Special Assistant to the Board
DIANE E. WERNEKE, Special Assistant to the Board
EDWIN M. TRUMAN, Staff
LARRY J. PROMISEL, Senior Associate Director
CHARLES J. SIEGMAN, Senior Associate Director
DALE W. HENDERSON, Associate Director
DAVID H. HOWARD, Senior
Adviser
DONALD B. ADAMS, Assistant
Director
PETER HOOPER HI, Assistant
Director
KAREN H. JOHNSON, Assistant
Director
RALPH W. SMITH, JR., Assistant
LEGAL
FINANCE
Director
Director
DIVISION
J. VIRGIL MATTINGLY, JR., General
Counsel
SCOTT G. ALVAREZ, Associate General Counsel
RICHARD M. ASHTON, Associate General Counsel
OLIVER IRELAND, Associate General Counsel
KATHLEEN M. O'DAY, Associate General Counsel
OFFICE OF THE
SECRETARY
WILLIAM W . WILES,
Secretary
JENNIFER J. JOHNSON, Associate
Secretary
BARBARA R. LOWREY, Associate
Secretary
DIVISION OF BANKING
SUPERVISION AND REGULATION
RICHARD SPILLENKOTHEN,
Director
STEPHEN C. SCHEMERING, Deputy
DON E. KLINE, Associate
MICHAEL J. PRELL,
EDWARD C. ETTIN, Deputy
Director
WILLIAM R. JONES, Associate
Director
THOMAS D. SIMPSON, Associate
Director
LAWRENCE SLIFMAN, Associate Director
DAVID J. STOCKTON, Associate Director
MARTHA BETHEA, Deputy Associate Director
PETER A. TINSLEY, Deputy Associate Director
MYRON L. KWAST, Assistant
Director
PATRICK M. PARKINSON, Assistant
Director
MARTHA S. SCANLON, Assistant
Director
JOYCE K. ZICKLER, Assistant
JOHN J. MINGO,
Director
Adviser
LEVON H. GARABEDIAN, Assistant
Director
STATISTICS
Director
Director
(Administration)
Director
WILLIAM A . RYBACK, Associate
Director
FREDERICK M. STRUBLE, Associate Director
HERBERT A. BIERN, Deputy Associate Director
ROGER T. COLE, Deputy Associate Director
JAMES I. GARNER, Deputy Associate Director
HOWARD A. AMER, Assistant
Director
GERALD A . EDWARDS, JR., Assistant
Director
JAMES D. GOETZINGER, Assistant
Director
STEPHEN M. HOFFMAN, JR., Assistant
Director
LAURA M. HOMER, Assistant
Director
JAMES V. HOUPT, Assistant
Director
JACK P. JENNINGS, Assistant Director
MICHAEL G. MARTINSON, Assistant
Director
RHOGER H PUGH, Assistant
Director
SIDNEY M. SUSSAN, Assistant
Director
MOLLY S. WASSOM, Assistant
Director
DIVISION OF RESEARCH AND
DIVISION OF MONETARY
DONALD L . KOHN,
AFFAIRS
Director
DAVID E. LINDSEY, Deputy Director
BRIAN F. MADIGAN, Associate Director
RICHARD D. PORTER, Deputy Associate Director
NORMAND R.V. BERNARD, Special Assistant to the Board
DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS
GRIFFITH L . GARWOOD,
Director
GLENN E. LONEY, Associate
Director
DOLORES S. SMITH, Associate
Director
MAUREEN P. ENGLISH, Assistant
Director
IRENE SHAWN M C N U L T Y , Assistant
Director
SUSAN M . PHILLIPS
JOHN P. LAWARE
LAWRENCE B . LINDSEY
OFFICE OF
STAFF DIRECTOR
FOR
S. DAVID FROST, Staff
MANAGEMENT
DIVISION OF RESERVE BANK
AND PAYMENT SYSTEMS
CLYDE H . FARNSWORTH, JR.,
Director
WILLIAM SCHNEIDER, Special
Assignment:
Project Director, National Information Center
PORTIA W. THOMPSON, Equal Employment Opportunity
Programs Officer
Director
DAVID L. ROBINSON, Deputy Director (Finance and
Control)
CHARLES W. BENNETT, Assistant
Director
JACK DENNIS, JR., Assistant
Director
EARL G. HAMILTON, Assistant
DIVISION OF HUMAN
MANAGEMENT
DAVID L . S H A N N O N ,
RESOURCES
JOHN R. WEIS, Associate
Director
Director
Director
Director
LOUISE L. ROSEMAN, Assistant
FLORENCE M. YOUNG, Assistant
Director
ANTHONY V. DIGIOIA, Assistant
JOSEPH H. HAYES, JR., Assistant
Director
JEFFREY C. MARQUARDT, Assistant
JOHN H. PARRISH, Assistant
Director
OPERATIONS
Director
Director
OFFICE OF THE INSPECTOR
GENERAL
FRED HOROWITZ, Assistant Director
BRENT L. BOWEN, Inspector
OFFICE OF THE
DONALD L. ROBINSON, Assistant Inspector General
BARRY R. SNYDER, Assistant Inspector General
CONTROLLER
GEORGE E . LIVINGSTON,
Controller
STEPHEN J. CLARK, Assistant Controller (Programs and
Budgets)
DARRELL R. PAULEY, Assistant Controller (Finance)
DIVISION OF SUPPORT
SERVICES
GEORGE M. LOPEZ, Assistant
Director
ROBERT E . FRAZIER,
Director
DAVID L. WILLIAMS, Assistant Director
DIVISION OF INFORMATION
MANAGEMENT
STEPHEN R . MALPHRUS,
RESOURCES
Director
BRUCE M. BEARDSLEY, Deputy Director
MARIANNE M. EMERSON, Assistant Director
Po KYUNG KIM, Assistant Director
RAYMOND H. MASSEY, Assistant
EDWARD T. MULRENIN, Assistant
Director
Director
DAY W. RADEBAUGH, JR., Assistant Director
ELIZABETH B. RIGGS, Assistant
RICHARD C. STEVENS, Assistant
Director
Director
General
A74
Federal Reserve Bulletin • December 1993
Federal Open Market Committee
and Advisory Councils
FEDERAL OPEN MARKET
COMMITTEE
MEMBERS
A L A N GREENSPAN,
WILLIAM J. MCDONOUGH, Vice Chairman
Chairman
WAYNE D . ANGELL
EDWARD W . KELLEY, JR.
EDWARD G . BOEHNE
JOHN P. LAWARE
SUSAN M . PHILLIPS
SILAS KEEHN
LAWRENCE B . LINDSEY
GARY H . STERN
DAVID W . MULLINS, JR.
ROBERT D . MCTEER, JR.
ALTERNATE
J. ALFRED BROADDUS, JR.
JERRY L . JORDAN
ROBERT P. FORRESTAL
JAMES H . OLTMAN
MEMBERS
ROBERT T. PARRY
STAFF
DONALD L. KOHN, Secretary and
Economist
NORMAND R.V. BERNARD, Deputy
Secretary
JOSEPH R. COYNE, Assistant
Secretary
GARY P. GILLUM, Assistant
Secretary
J. VIRGIL MATTINGLY, JR., General
Counsel
ERNEST T. PATRIKIS, Deputy General Counsel
MICHAEL J. PRELL,
Economist
EDWIN M . TRUMAN,
Economist
RICHARD G. DAVIS, Associate
Economist
RICHARD W. LANG, Associate
Economist
DAVID E. LINDSEY, Associate
Economist
LARRY J. PROMISEL, Associate
Economist
ARTHUR J. ROLNICK, Associate
Economist
HARVEY ROSENBLUM, Associate
Economist
KARL A. SCHELD, Associate
Economist
CHARLES J. SIEGMAN, Associate
Economist
THOMAS D. SIMPSON, Associate
Economist
LAWRENCE SLIFMAN, Associate
Economist
JOAN E. LOVETT, Manager for Domestic Operations, System Open Market Account
PETER R. FISHER, Manager for Foreign Operations, System Open Market Account
FEDERAL ADVISORY
COUNCIL
E. B. ROBINSON, JR.,
President
JOHN B. MCCOY, Vice President
MARSHALL N. CARTER, First District
CHARLES S. SANFORD, JR., Second District
ANTHONY P. TERRACCIANO, Third District
JOHN B. MCCOY, Fourth District
EDWARD E. CRUTCHFIELD, JR., Fifth District
E.B. ROBINSON, JR., Sixth District
EUGENE A. MILLER, Seventh District
ANDREW B. CRAIG, III, Eighth District
JOHN F. GRUNDHOFER, Ninth District
DAVID A. RISMILLER, Tenth District
CHARLES R. HRDLICKA, Eleventh District
RICHARD M. ROSENBERG, Twelfth District
HERBERT V. PROCHNOW,
WILLIAM J. KORSVIK, Associate
Secretary
Secretary
A75
CONSUMER ADVISORY
COUNCIL
DENNY D. DUMLER, Denver, Colorado, Chairman
JEAN POGGE, Chicago, Illinois, Vice Chairman
BARRY A . ABBOTT, S a n F r a n c i s c o , C a l i f o r n i a
BONNIE GUITON, C h a r l o t t e s v i l l e , V i r g i n i a
JOHN R . ADAMS, P h i l a d e l p h i a , P e n n s y l v a n i a
JOYCE HARRIS, M a d i s o n , W i s c o n s i n
JOHN A . BAKER, A t l a n t a , G e o r g i a
GARY S . HATTEM, N e w Y o r k , N e w Y o r k
VERONICA E . BARELA, D e n v e r , C o l o r a d o
JULIA E . HILER, M a r i e t t a , G e o r g i a
MULUGETTA BIRRU, P i t t s b u r g h , P e n n s y l v a n i a
RONALD HOMER, B o s t o n , M a s s a c h u s e t t s
DOUGLAS D . BLANKE, St. P a u l , M i n n e s o t a
THOMAS L . HOUSTON, D a l l a s , T e x a s
GENEVIEVE BROOKS, B r o n x , N e w Y o r k
HENRY JARAMILLO, B e l e n , N e w M e x i c o
TOYE L . BROWN, B o s t o n , M a s s a c h u s e t t s
EDMUND MIERZWINSKI, W a s h i n g t o n , D . C .
CATHY CLOUD, W a s h i n g t o n , D . C .
JOHN V. SKINNER, I r v i n g , T e x a s
MICHAEL D . EDWARDS, Y e l m , W a s h i n g t o n
LOWELL N . SWANSON, P o r t l a n d , O r e g o n
MICHAEL FERRY, St. L o u i s , M i s s o u r i
MICHAEL W . TIERNEY, W a s h i n g t o n , D . C .
NORMA L . FREIBERG, N e w O r l e a n s , L o u i s i a n a
GRACE W . WEINSTEIN, E n g l e w o o d , N e w J e r s e y
LORI GAY, Los Angeles, California
JAMES L . WEST, T i j e r a s , N e w M e x i c o
DONALD A . GLAS, H u t c h i n s o n , M i n n e s o t a
ROBERT O . ZDENEK, G r e e n w i c h , C o n n e c t i c u t
THRIFT INSTITUTIONS ADVISORY
COUNCIL
DANIEL C. ARNOLD, Houston, Texas, President
BEATRICE D'AGOSTINO, Somerville, New Jersey, Vice President
WILLIAM A . COOPER, M i n n e a p o l i s , M i n n e s o t a
CHARLES JOHN KOCH, C l e v e l a n d , O h i o
PAUL L . ECKERT, D a v e n p o r t , I o w a
ROBERT MCCARTER, N e w B e d f o r d , M a s s a c h u s e t t s
GEORGE R . GLIGOREA, S h e r i d a n , W y o m i n g
NICHOLAS W. MITCHELL, JR., Winston-Salem, North Carolina
THOMAS J. HUGHES, M e r r i f i e l d , V i r g i n i a
STEPHEN W . PROUGH, I r v i n e , C a l i f o r n i a
KERRY KILLINGER, S e a t t l e , W a s h i n g t o n
THOMAS R . RICKETTS, T r o y , M i c h i g a n
A76
Federal Reserve Board Publications
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THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNCTIONS.
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ANNUAL REPORT.
ANNUAL REPORT: BUDGET REVIEW, 1 9 9 1 - 9 2 .
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REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL
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A N N U A L PERCENTAGE RATE TABLES ( T r u t h i n
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Consumer Handbook on Adjustable Rate Mortgages
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Series on the Structure of the Federal Reserve System
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A Consumer's Guide to Mortgage Lock-Ins
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Home Mortgages: Understanding the Process and Your Right
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BULLETIN
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1 6 1 . A REVIEW OF CORPORATE RESTRUCTURING ACTIVITY,
1980-90, by Margaret Hastings Pickering. May 1991.
21pp.
1 6 2 . EVIDENCE ON THE SIZE OF BANKING MARKETS FROM
MORTGAGE LOAN RATES IN TWENTY CITIES, b y S t e p h e n
A. Rhoades. February 1992. 11 pp.
1 6 3 . CLEARANCE AND SETTLEMENT IN U . S . SECURITIES MAR-
KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob,
Lauren Hargraves, Richard Mead, Jeff Stehm, and Mary
Ann Taylor. March 1992. 37 pp.
Staff Studies 1-145 are out of print.
1 4 6 . THE ROLE OF THE PRIME RATE IN THE PRICING OF
BUSINESS LOANS BY COMMERCIAL BANKS, 1 9 7 7 - 8 4 , b y
Thomas F. Brady. November 1985. 25 pp.
1 4 7 . REVISIONS IN THE MONETARY SERVICES (DIVISIA) INDEXES OF THE MONETARY AGGREGATES, b y H e l e n T. Farr
and Deborah Johnson. December 1985. 42 pp.
1 4 8 . THE MACROECONOMIC AND SECTORAL EFFECTS OF THE
ECONOMIC RECOVERY TAX ACT: SOME SIMULATION
1 6 4 . THE 1 9 8 9 - 9 2 CREDIT CRUNCH FOR REAL ESTATE, b y
James T. Fergus and John L. Goodman, Jr. July 1993.
20 pp.
1 6 5 . THE DEMAND FOR TRADE CREDIT: A N INVESTIGATION OF
MOTIVES FOR TRADE CREDIT USE BY SMALL BUSINESSES,
by Gregory E. Elliehausen and John D. Wolken. September 1993. 18 pp.
RESULTS, by Flint Brayton and Peter B. Clark. December
1985. 17 pp.
1 4 9 . THE OPERATING PERFORMANCE OF ACQUIRED FIRMS IN
BANKING BEFORE AND AFTER ACQUISITION, b y S t e p h e n
A. Rhoades. April 1986. 32 pp.
1 5 0 . STATISTICAL COST ACCOUNTING MODELS IN BANKING:
A REEXAMINATION AND AN APPLICATION, b y J o h n T.
Rose and John D. Wolken. May 1986. 13 pp.
1 5 1 . RESPONSES TO DEREGULATION: RETAIL DEPOSIT PRICING
FROM 1983 THROUGH 1985, by Patrick I. Mahoney, Alice
P. White, Paul F. O'Brien, and Mary M. McLaughlin.
January 1987. 30 pp.
1 5 2 . DETERMINANTS OF CORPORATE MERGER ACTIVITY:
A
REVIEW OF THE LITERATURE, by Mark J. Warshawsky.
April 1987. 18 pp.
1 5 3 . STOCK MARKET VOLATILITY, b y C a r o l y n D . D a v i s
and
Alice P. White. September 1987. 14 pp.
154.
T H E EFFECTS ON CONSUMERS AND CREDITORS OF
PROPOSED CEILINGS ON CREDIT CARD INTEREST RATES,
by Glenn B. Canner and James T. Fergus. October 1987.
26 pp.
1 5 5 . THE FUNDING OF PRIVATE PENSION PLANS, b y M a r k J.
Warshawsky. November 1987. 25 pp.
1 5 6 . INTERNATIONAL TRENDS FOR U . S . BANKS AND BANKING
MARKETS, by James V. Houpt. May 1988. 47 pp.
1 5 7 . M 2 PER U N I T OF POTENTIAL G N P AS AN ANCHOR FOR
THE PRICE LEVEL, by Jeffrey J. Hallman, Richard D.
Porter, and David H. Small. April 1989. 28 pp.
1 5 8 . THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIREMENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE
PRODUCTS, by Mark J. Warshawsky with the assistance of
Dietrich Earnhart. September 1989. 23 pp.
1 5 9 . N E W DATA ON THE PERFORMANCE OF NONBANK SUBSIDIARIES OF BANK HOLDING COMPANIES, b y N e l l i e L i a n g
and Donald Savage. February 1990. 12 pp.
1 6 0 . BANKING MARKETS AND THE USE OF FINANCIAL SERVICES BY SMALL AND MEDIUM-SIZED BUSINESSES, b y
Gregory E. Elliehausen and John D. Wolken. September
1 9 9 0 . 35 pp.
REPRINTS OF SELECTED BULLETIN ARTICLES
Some Bulletin articles are reprinted. The articles listed below
are those for which reprints are available. Most of the articles
reprinted do not exceed twelve pages. Limit often copies.
Recent Developments in the Bankers Acceptance Market. 1/86.
The Use of Cash and Transaction Accounts by American
Families. 2/86.
Financial Characteristics of High-Income Families. 3/86.
Prices, Profit Margins, and Exchange Rates. 6/86.
Agricultural Banks under Stress. 7/86.
Foreign Lending by Banks: A Guide to International and U.S.
Statistics. 10/86.
Recent Developments in Corporate Finance. 11/86.
Measuring the Foreign-Exchange Value of the Dollar. 6/87.
Changes in Consumer Installment Debt: Evidence from the
1983 and 1986 Surveys of Consumer Finances. 10/87.
Home Equity Lines of Credit. 6/88.
Mutual Recognition: Integration of the Financial Sector in the
European Community. 9/89.
The Activities of Japanese Banks in the United Kingdom and in
the United States, 1980-88. 2/90.
Industrial Production: 1989 Developments and Historical
Revision. 4/90.
Recent Developments in Industrial Capacity and Utilization.
6/90.
Developments Affecting the Profitability of Commercial Banks.
7/90.
Recent Developments in Corporate Finance. 8/90.
U.S. Exchange Rate Policy: Bretton Woods to Present. 11/90.
The Transmission Channels of Monetary Policy: How Have
They Changed? 12/90.
Changes in Family Finances from 1983 to 1989: Evidence from
the Survey of Consumer Finances. 1/92.
U.S. International Transactions in 1991. 5/92.
A78
ANTICIPATED
SCHEDULE
OF RELEASE DATES FOR PERIODIC
RELEASES—BOARD
OF THE FEDERAL RESERVE SYSTEM 1 (PAYMENT MUST ACCOMPANY REQUESTS)
Weekly Releases
Annual
rate
Approximate
release days
•
Aggregate Reserves of Depository Institutions and
the Monetary Base. H.3 (502) [1.20]
$15.00
Thursday
•
Actions of the Board: Applications and Reports
Received. H.2 (501)
$35.00
Friday
•
Assets and Liabilities of Insured Domestically
Chartered and Foreign Related Banking
Institutions. H.8 (510) [1.25]
$15.00
Monday
•
Factors Affecting Reserves of Depository
Institutions and Condition Statement of Federal
Reserve Banks. H.4.1 (503) [1.11]
$15.00
Thursday
OF
GOVERNORS
Date of period to which data
refer
Week ended previous
Wednesday
Week ended previous Saturday
Wednesday, three weeks earlier
Week ended previous
Wednesday
•
Foreign Exchange Rates. H.10 (512) [3.28]
$15.00
Monday
Week ended previous Friday
•
Money Stock, Liquid Assets, and Debt Measures.
H.6 (508) [1.21]
$35.00
Thursday
Week ended Monday of
previous week
•
Selected Borrowings in Immediately Available
Funds of Large Commercial Banks. H.5 (507)
[1.13]
$15.00
Wednesday
Week ended Thursday of
previous week
•
Selected Interest Rates. H.15 (519) [1.35]
$15.00
Monday
Week ended previous Saturday
•
Weekly Consolidated Condition Report of Large
Commercial Banks, and Domestic Subsidiaries.
H.4.2 (504) [1.26, 1.30]
$15.00
Friday
Wednesday, one week earlier
Monthly Releases
•
Consumer Installment Credit. G.19 (421) [1.55,
1.56]
$5.00
Fifth working day of
month
Second month previous
•
Debits and Deposit Turnover at Commercial Banks.
G.6 (406) [1.22]
$5.00
Twelfth of month
Previous month
•
Finance Companies. G.20 (422) [1.51, 1.52]
$ 5.00
Fifth working day of
month
Second month previous
•
Foreign Exchange Rates. G.5 (405) [3.28]
$5.00
First of month
Previous month
•
Industrial Production and Capacity Utilization. G.17
(419) [2.12, 2.13]
$15.00
Midmonth
Previous month
•
Loans and Securities at all Commercial Banks. G.7
(407) [1.23]
$5.00
Third week of month
Previous month
•
Major Nondeposit Funds of Commercial Banks.
G. 10 (411) [1.24]
$ 5.00
Third week of month
Previous month
•
Research Library—Recent Acquisitions. G. 15 (417)
Free of
charge
First of month
Previous month
•
Selected Interest Rates. G.13 (415) [1.35]
$ 5.00
First Tuesday of
month
Previous month
1. R e l e a s e dates are those anticipated or usually m e t . H o w e v e r , p l e a s e note that f o r s o m e releases there is n o r m a l l y a certain variability b e c a u s e of r e p o r t i n g or p r o c e s s i n g p r o c e d u r e s . M o r e o v e r , f o r all series u n u s u a l c i r c u m s t a n c e s m a y , f r o m t i m e to time, result in a release date b e i n g later
than anticipated.
T h e r e s p e c t i v e Bulletin tables that r e p o r t the d a t a are d e s i g n a t e d in brackets.
A79
Approximate
release days
Date of period to which data
refer
Quarterly Releases
Annual
rate
•
Agricultural Finance Databook. E. 15 (125)
$ 5.00
End of March,
June, September,
and December
•
Country Exposure Lending Survey. E. 16 (126)
$ 5.00
January, April,
July, and
October
•
Flow of Funds Accounts: Seasonally Adjusted
and Unadjusted. Z.l (780) [1.57,1.58]
$25.00
23rd of February,
May, August,
and November
•
Flow of Funds Summary Statistics. Z.7 (788)
[1.59, 1.60]
$ 5.00
15th of February,
May, August,
and November
•
Geographical Distribution of Assets and Liabilities
of Major Foreign Branches of U.S. Banks. E.l 1
(121)
$ 5.00
15th of March,
June, September,
and December
•
Survey of Terms of Bank Lending to Business. E.2
(111) [4.23]
$ 5.00
Midmonth of
March, June,
September, and
December
February, May, August, and
November
•
List of OTC Margin Stocks. E.7 (117)
Free of
charge
January, April,
July, and
October
February, May, August, and
November
January, April, July, and
October
Previous quarter
Previous quarter
Previous quarter
Previous quarter
Semiannual Releases
•
Balance Sheets for the U.S. Economy. C.9 (108)
$5.00
October and April
Previous year
•
Report on the Terms of Credit Card Plans. E.5
$ 5.00
March and August
January and June
$ 5.00
February
End of previous June
(115)
Annual Releases
•
Aggregate Summaries of Annual Surveys of
Securities Credit Extension. C.2 (101)
A80
Index to Volume 79
GUIDE TO PAGE REFERENCES IN MONTHLY ISSUES
Issue
January
February
March
April
May
June
Text
1- 76
77-166
167-250
251-378
379-568
569-648
"A" Pages
1-80
1-94
1-82
1-80
1-94
1-82
Index to
tables
70-71
84-85
72-73
70-71
84-85
70-71
The "A" pages consist of statistical tables and reference information.
Pages
1981 Financial Center Development Act, Delaware law .... 400
A Guide to HMDA Reporting, Getting it Right,
FFIEC publication
310
Accounting by Creditors for Impairment of a Loan,
Financial Accounting Standards Board Statement
No. 114
783
Agriculture, 1987 Census of
426
Agriculture, U.S. Department of
421, 432
Alaska Pipeline
454
American Bankers Association, study on regulatory
burden
264, 655
American Bar Association
256
American Council of Life Insurance
83
Ameritech
419
Angell, Wayne D.
Federal Reserve System Accountability Act, H.R.28,
statement
1111
General Accounting Office, statement on authority
1132
Annual Report, 79th, 1992, publication announcement
478
Annual Survey of Manufactures, U.S. Bureau
of the Census
590, 601
Annunzio-Wylie Anti-Money-Laundering Act
691
ARCO Oil Company
450
Articles
Anatomy of the medium-term note market
751
Community Reinvestment Act: Evolution and current
issues
251
Foreign Bank Supervision Enhancement Act of 1991 ....
1
Herfindahl-Hirschman index
188
Industrial production, capacity, and capacity utilization
since 1987
590
Interstate banking: A status report
1075
Monetary policy report to the Congress
167, 827
Profits and balance sheet developments at U.S.
commercial banks in 1992
649
Recent developments in the market for privately
placed debt
77
Recent trends in the mutual fund industry
1001
Reserve requirements: History, current practice,
and potential reform
569
Treasury and Federal Reserve foreign exchange
operations
11, 268, 674, 926
Issue
July
August
September
October
November
December
Text
649- 750
751- 826
827- 912
913-1000
1001-1074
1075-1184
"A" pages
1-80
1-94
1-80
1-80
1-94
1-94
Index to
tables
70-71
84-85
70-71
70-71
84-85
80-81
Statistical tables are indexed separately (see p. A80 of this issue).
Pages
Articles—Continued
U.S. branches and agencies of foreign banks:
A new look
U.S. international transactions in 1992
913
379
BAKER Hughes rig count
450
Bank of Credit and Commerce International, article
on foreign bank supervision
2
Bank credit data on diskette
790
Bank Enterprise Act of 1991
266
Bank Holding Company Act of 1956
Foreign Bank Supervision Enhancement Act, article
3
Interstate banking, article
1075
Orders issued under
215 Holding Co
813
A.N.B. Holding Company, Ltd
813
ABC Employee Stock Ownership Plan
548
Albrecht Financial Services, Inc
69
Algemene Maatschappij voor Nijverheidskrediet N.V.,
Antwerp, Belgium
816
Allendale Bancorp, Inc
813
Alpha-Omega Holding Company
548
AMBANC Corp
643
Amboy Bancorporation
71
AMCORE Financial, Inc
887
American Bancorp of Edmond, Inc
550
American Bancorp of Oklahoma, Inc
906
AmSouth Bancorporation
813, 951, 1149
AmTrade International Bank of Georgia
336
Anchor Financial Corporation
1179
Archer, Inc
548
Area Bancshares Corporation
69, 548
Associated Banc-Corp
745
Bailey Financial Corporation
1069
Banc Ed Corp
814
Banc One Beta Corporation
1168
Banc One Colorado Corporation
872
Banc One Corporation
156, 519, 524, 872,
1055, 1152, 1158, 1168
Banc One Illinois Corporation
1152
Banco Santander, S.A., Madrid, Spain
622
A81
Pages
Bank Holding Company Act of 1956—Continued
Orders issued under—Continued
Bancorp, Inc
988
BancWest Bancorp, Inc
814, 1069
BancWest, Inc
154
Bank Corporation of Georgia
745
Bank of Boston Corporation
793, 795
Bank of Montana System
550
Bank of Montreal, Montreal, Quebec, Canada
1049
Bank of New York Company, Inc
547, 814
Bank of Tokyo, Ltd., Tokyo, Japan
645
Bank South Corporation
716
BankAmerica Corporation
245, 1163
Bankers Trust New York Corporation
746
BANKFIRST Corporation, Inc
1069
Bankmont Financial Corp
1049
Banterra Corp
371
Barnett Banks, Inc
44, 800, 1155
Barnett Merger Corporation
245
BayBanks, Inc
547
BB&T Financial Corporation
342, 371, 909, 985, 989
BBS Corp
548
Big Bend Bancshares Corp
814
Birthright, Inc
814
BNMHC Acquisition Corporation
985
Boatmen's Bancshares, Inc
814, 1179
BOI Financial Corp
154
BOK Financial Corporation
643
Bourbonnais Bancorp, Inc
644
Bremer Financial Corporation
550, 988
Britton & Koontz Capital Corporation
816
Broadstreet, Inc
336
Brooke Corporation
156
Brooke Holdings, Inc
156
Button Gwinnett Bancorp, Inc
155
C.S.B. Bancshares, Inc
814
Caisse Nationale de Credit Agricole, Paris, France .... 747
Capital Bancorporation, Inc
31, 116
Carbon County Holding Company
985
Cardinal Bancshares, Inc
745
Carolina First Corporation
1071
Cashton Bancshares, Inc
644
Castle BancGroup, Inc
985
Castle Rock Bank Holding Company
985
CB Financial Corporation
118
CBI Security Corporation
548, 1069
CBI-Central Kansas, Inc
745
CBI-Kansas, Inc
155, 1179
CBT Corporation
1179
CCB Corporation
907
CCB Financial Corporation
370, 1069
Centennial Bank Holdings, Inc
155
Central Bancshares of the South, Inc
1071, 1181
Central Bancshares, Inc
645
Central Bankshares, Inc
745
Central Financial Corporation
907
Central Mortgage Bancshares, Inc
907
Centura Banks, Inc
69, 71, 814, 907, 909, 1179
Century Bancorp, Inc
548
Chambanco, Inc
989
Charter Bancshares, Inc
549
Chase Manhattan Corporation
547, 745
Chemical Banking Corporation
71, 131, 547,
719, 747, 989
Chemical Financial Corporation
907
Cherokee County Banshares, Inc
985
Cheshire Financial Corporation
989
Chico Bancorp, Inc
814
Chisholm Bancshares, Inc
69
Citicorp
42, 747
Citizens (U.K.) Limited, Edinburgh, Scotland
1060
Citizens Bancorp Investment, Inc
747
Citizens Bancorporation of New Ulm, Inc
69
Pages
Bank Holding Company Act of 1956—Continued
Orders issued under—Continued
Citizens Bancshares Company
370
Citizens Bancshares of El Reno, Inc
814
Citizens Bancshares of Woodville, Inc
243
Citizens Banking Corporation
986
Citizens Bankshares, Inc
245
Citizens Financial Group, Inc
1060
Citizens Holding Corporation
69
Citizens Holding Corporation and Bank ESOP
986
Citizens National Corporation
69
City Holding Company
69, 986
Clear Creek Bank Corp
548
CNB Bancshares, Inc
72, 644, 748, 1071
CNB Financial Corporation
155, 243
Columbia Banking System, Inc
907
Comerica Incorporated
31, 72, 155, 500
Commerce Bancshares, Inc
155, 548, 745, 1069, 1179
Commerce Bank Corporation
370
Commerzbank Aktiengesellschaft, Frankfurt am Main,
Federal Republic of Germany
961
Community Banc-Corp. of Sheboygan
989
Community Bancs of Oklahoma, Inc
986
Community Bancshares, Inc
1179
Community Bank Group, Inc
548
Community Bankers, Inc
989
Community Bankshares, Inc
705
Community First Bankshares, Inc
644, 1069
Community National Bank Corporation
986
Concord EFS, Inc
73
Consolidated Holding Company
156
Continental Bank Corporation
888
Continental Security Bancshares, Inc
986
CoreStates Financial Corp
157, 909, 1158
Corte Banc Corporation
986
Craco, Inc
548
Credit Commercial de France S.A., Paris, France
157
Credit Commercial de France, Paris, France
157
Crestar Financial Corporation
989
Crested Butte State Bank Holding Company
644
CSB Bancorp, Inc
1180
CTC Bancorp Inc
745
D Bancorp, Inc
986
Dai-Ichi Kangyo Bank, Ltd. Tokyo, Japan
131
Dairyland Bancorp, Inc
986
Dairyland Bank Holding Corporation
370
Dakota Company, Inc
986
Davis BanCorporation, Inc
644
Deutsche Bank AG, Frankfurt, Federal Republic of
Germany
133
DeWitt Bancorp, Inc
986
Dickinson Bancorporation, Inc
955
Dickinson Financial Corporation
548, 986
Dimeco, Inc
644
Donley County State Bank Holding Company
814
Drummond Banking Company
1069
Dunn County Bankshares, Inc
371
Early Bancshares, Inc
548
East Dubuque Bancshares, Inc
986
El Paso Bancshares, Inc
155
Elkhart Bancorporation, Inc
986
Employees Stock Ownership Plan and Trust of
Southwest Georgia Financial Corporation
243
Enevoldsen Management Company
986
Estes Park Bank Restated Employees Stock
Ownership 401(k) Plan and Retirement Trust
814
Eva Bancshares, Inc
504
Exchange National Bancshares, Inc
548
F & M Bancorporation
746
F & M National Corporation
815
F&A Financial Company
371, 988
F.N.B. Corporation
72, 1070
F.S.B. Properties, Inc., ESOP
244
A82
Federal Reserve Bulletin • December 1993
Pages
Bank Holding Company Act of 1956—Continued
Orders issued under—Continued
F.S.B., Inc
549
F.W.S.F. Corporation
907
1179
FAB Acquisition Company
Fairfield Bancshares, Inc
814
Fairmount Banking Company
69
Fairview Bancorporation, Inc
69
Farmers & Merchants Bancshares, Inc
549
Fanners & Traders Bancshares, Inc
745
Farmers National Bancshares, Inc
155
Farmers State Bancshares of Andrew County, Inc
644
Farmers State Corporation
987, 989
FBOP Corporation
370
FCFT, Inc
214
FCNB Corp
216
FEO Investments, Inc
1180
Fidelity Bancorp, Inc
370
Fifth Third Bancorp
909
Finger Interests Number One, Ltd
987
First Abilene Bankshares, Inc
371
First Alabama Bancshares, Inc
745, 989, 990
First American Corporation
987
First Bancorp of Louisiana, Inc
987
First Bancorp of Louisiana, Inc., Employee Stock
Ownership Plan Trust
987
First Bancorp, Inc
1181
First Bancorporation, Inc
814
First Bank System, Inc
50, 369, 534, 1179
First Breckinridge Bancshares, Inc
644
First Busey Corporation
155
First Chicago Corporation
747
First Citizens BancShares, Inc
990
First Colonial Bankshares Corporation
706
First Commercial Corporation
338, 506, 1068
First Community Bancorp, Inc
69
First Community Bancshares, Inc
987
First Community Financial Corporation
907
First Dakota Financial Corporation
70
First Delaware Bancorp, Inc
1181
First Delta Corporation
1157
First Fabens Bancorporation, Inc
155
First Fidelity Bancorporation
622
First Financial Bancorp
70
First Financial Corporation
877
First Hawaiian, Inc
966
First Independence Bancshares, Inc
509
First Insurance Finance Company
360
First Interstate BancSystem of Montana, Inc
745
First Linden Bancshares, Inc
644
First National Bancorp
745
First National Bank of Berryville Employee Stock
Ownership Trust
243
First National Bank of Boston
157
First National Bank of Sauk Centre Retirement
Savings Plan and Trust
243
First National Beatrice Corporation Employee Stock
Ownership Plan
814
First National of Nebraska, Inc
644, 1070
First Neighborhood Bancshares, Inc
644
First Rushmore Bancorporation, Inc
243
First Security Bancorp, Inc
987
First Security Corporation
643, 1069, 1179
First Sonora Bancshares, Inc
987
First Sonora Delaware Bancshares, Inc
987
First State Bancshares of DeKalb County, Inc
907
First State Bancshares, Inc
644
First Tennessee National Corporation
157
First Texas Bancorp, Inc
1071
First Trust Financial Corporation
814
First Union Corporation ... 72, 157, 232, 371, 709, 721, 990
First United Bancshares, Inc
1179
First United Bank Group, Inc
956
Pages
Bank Holding Company Act of 1956—Continued
Orders issued under—Continued
First Virginia Banks, Inc
815
First Western Corporation
70, 72
First Wilton Bancshares, Ltd
244
Firstar Corporation
907
FirstBank Holding Company of Colorado
643
FirstBank Holding Company of Colorado
Employee Stock Ownership Plan
643, 906, 1068
Firstbank Holding Company of Colorado
906
FirstPerryton Bancorp, Inc
644
Fleet Financial Group, Inc
68, 547
Florida Barnett Corporation
244
FMB Bancshares, Inc
907
FMSB Bancorp
817
FNB Financial Services, Inc., Employee Stock
Ownership Plan
987
FNB, Inc
987
FNBR Holding Corporation
644
FNS, Inc
815
Ford Bank Group Holdings, Inc
956
Ford Bank Group, Inc
956
Fort Bancorp, Inc
988
Fort Ridgely National Bancorporation, Inc
1070
Fortress Bancshares, Inc
1070
Fourth Financial Corporation
70, 155, 549, 645, 746
Frandsen Financial Corporation
70
Franklin Bancorp, Inc
155
GAB Bancorp
155
Garwin Bancorporation
371
Gaylord Bancorporation, Ltd
747
GBC Holdings, Inc
36
GFH Corp
746
GNB Bancorporation
54
Golden Plains Bankshares, Inc
68
GP FINANCIAL CORP
1180
Great Lakes Financial Resources, Inc., Employee
Stock Ownership Plan
70
Green-Top, Inc
549, 550
Guaranty Financial, M.H.C
748
Gulf Coast Bank Holding Company, Inc
815
H & H Holding Company
70
Hansen-Lawrence Agency, Inc
73
Harlingen Bancshares, Inc
156
Harris Financial, MHC
988
Hawkeye Bancorporation
549
HeartWay Bancorporation
988
Heritage Bancshares Group, Inc
1180
Heritage Financial Services, Inc
70
HN Bancshares of Delaware, Inc
156
HNB Holding Company, Inc
746
Holcomb Bancshares, Inc
988
Hollandale Capital Corporation
815
Hopeton Bancshares, Inc
244
Horizon Bancorp, Inc
370
HSBC Holdings BV, Amsterdam, The Netherlands .... 547
HSBC Holdings PLC, London, Great Britain
547
Huntington Bancshares Incorporated
141
Huntington Bancshares West Virginia, Inc
907
Huntington Bancshares,
Incorporated
733, 907, 1071, 1181
Huntington Bancshares, Indiana, Inc
1181
Illinois State Bancorp, Inc
645
Independent Bank Corporation
988
Independent Bankshares, Inc
907
Independent Financial Corp
907
Industrial Bank of Japan, Ltd., Tokyo, Japan
747
Industry Bancshares, Inc
988
Integra Financial Corporation
154
International Bancorporation
746
International Brotherhood of Boilermakers, Iron Ship
Builders, Blacksmiths, Forgers & Helpers
645
Index to Volume 79
Pages
Bank Holding Company Act of 1956—Continued
Orders issued under—Continued
Internationale Nederlanden Group N.V., Amsterdam,
The Netherlands
990
Intervest Bancshares Corporation
625
Irwin Financial Corporation
1166
ISB Bancshares, Inc
549
J.E. Coonley Company
907
J.P. Morgan & Co. Incorporated
747
Jewell County Bank
549
Key Bancshares of New York, Inc
218
KeyCorp
154, 218, 748
Killbuck Bancshares, Inc
70
Klein Bancorporation, Inc
1180
Kredietbank, N.V., Brussels, Belgium
816
Lansing Financial Corporation
907
Lena Spitzer Limited Partnership
1181
Lenawee Bancorp, Inc
746
LeRoy C. Darby, Inc
645
Liberty Bancorp, Inc
815, 988
Liberty National Bancorp, Inc
369, 1069
Lincoln Trail Bancshares, Inc
645
Lincolnshire Bancshares, Inc
550
LNB Acquisition Corp
369
Long-Term Credit Bank of Japan, Limited,
Tokyo, Japan
345, 347, 371, 816
Lucan Bancshares, Inc
244
M & F Bancshares, Inc
815
M & F Financial Corporation
815
Mabrey Bancorporation, Inc
1180
Magna Group, Inc
1070, 1071
Magnolia State Corporation
1181
Mansura Bancshares, Inc
37
Mark Twain Bancshares, Inc
244, 907
Marquette Bancshares, Inc
72, 907
MCB Financial Corporation
815
Mellon Bank Corporation
157, 626
Menomonie Financial Services, Inc
909
Mercantile Bancorporation, Inc
244
Merchants & Farmers Bancshares, Inc
1070
Merchants Holding Company
645, 746
Meridian Bancorp, Inc
220, 895, 1070
Metro Amored Courier, Inc
352
Metrocorp, Inc
352
Mid Am, Inc
72, 1070
Mid-America Bancorp
1181
Midland Capital Company
813
Midlothian State Bank Employee Stock Ownership
Trust
645
549
Midstate Bancorp, Inc
Midwest National Bancshares, Inc
549
Milk River Investments, Inc
70
Minnesota Banc Holding Company
70
Minowa Bancshares, Inc
746
Missoula Bancshares, Inc
988
MNB Bancshares, Inc
1180
Mobile National Corporation
744
Montgomery Bancshares, Inc
908
Mountain Bancshares, Inc
815
Mountain Parks Financial Corporation
909
Nashville Holding Company
746
National Bank of Indianapolis Corporation
1070
National City Bancshares, Inc
1180
National City Corporation
906
National Commerce Bancorporation
890
National Penn Bancshares, Inc
1070
National Westminster Bank PLC, London,
Great Britain
547
NationsBank Corporation
225, 549, 892, 969, 1053
NETEX Bancorporation
815
Newberry Bancorp, Inc
550
NJIC, Inc
746
Northeast Bancorp, Inc
908
A83
Pages
Bank Holding Company Act of 1956—Continued
Orders issued under—Continued
Northern Bankshares, Inc
990
Northern Trust Company
723
Northern Trust Corporation
370
Northome Bancshares, Inc
244
Norwest Colorado, Inc
71
Norwest Corporation
71, 73, 156, 157, 245,
517, 747, 817, 878, 1047, 1070
Nowata Bancshares, Inc
908
Old Kent Financial Corporation
371
Old National Bancorp
55, 124, 369, 813
Oliver Bancorporation, Inc
645
Olney Bancorp of Delaware, Inc
71, 1180
Olney Bancshares, Inc
71, 1180
OMNIBANCORP
244
Omnibank Corporation
156
ONBANCorp, Inc
39, 988
Oostburg Bancorp, Inc
815
Orchard Valley Financial Corporation
815
Osceola Insurance, Inc
548
Otto Bremer Foundation
550, 988
Overton Financial Corporation
339
Paloma Bancshares, Inc
908
Panhandle Bancshares, Inc
643
PCM Acquisition Group, Inc
1180
Peoples BancTrust Company, Inc
1180
Peoples Financial Corporation
815
Peoples Financial Services, Inc
157
Peoples Holding Company
1181
Peoples Mid-Illinois Corporation
156
Peotone Bancorp, Inc
550, 988
Pinnacle Banc Group, Inc
72
Pinnacle Bancorp, Inc
815, 816, 880
Pioneer Bancorporation
1070
PMI Acquisition Corporation
156
PNC Bank Corp
958, 990, 1181
PNC Financial Corp
156, 1158
Poca Valley Bankshares, Inc
1180
Prairie State Bancshares, Inc
244
Premier Acquisition Company
799
Premier Financial Services, Inc
799
Prestige Financial Corp
908
PSB Corporation
71
Quad City Holdings, Inc
816
Quick Bancorp, Inc
1070
R. Banking Limited Partnership
898
Random Lake Bancorp., Limited
156
Raton Capital Corporation
370
Redwood Empire Bancorp
72
Republic Bancorp, Inc
801
Republic Bancshares, Inc
816
Republic of New York Corporation
988
Rice Insurance Agency, Inc
883
Rio Bancshares Corporation
814
Rio Blanco Holding Company
712
Rio Blanco State Bank
712
River Forest Bancorp, Inc
816
River Valley Bancorp, Inc
988
RNYC Holdings Limited, Marina Bay,
City of Gibraltar
977, 988
Rockhold BanCorp
715
Rolla Holding Company, Inc
908
Royal Bank of Scotland Group, pic,
Edinburgh, Scotland
747, 1060
Royal Bank of Scotland, pic,
Edinburg, Scotland
747, 1060
Saban, S.A., Marina Bay, City of Gibraltar
977, 988
Sakura Bank Limited, Tokyo, Japan
728
SC Bancorp, Inc
550
Security Capital Corporation
1181
Security Richland Bancorporation
72, 1182
Smithdown Investments
1180
A84
Federal Reserve Bulletin • December 1993
Pages
Bank Holding Company Act of 1956—Continued
Orders issued under—Continued
Snyder Holding Corporation
988
Society Corporation
156, 157, 1158
South Dakota Bancotp, Inc
986
South Dakota Financial Bancorporation, Inc
986
South Plains Financial, Inc
908
Southeast Capital Corporation ESOP
908
Southern Bank Group, Inc
157
Southern National Corporation
985
SouthTrust Corporation
154, 885, 908
Southwest Bancorp, Inc
550
Southwest Bancshares, Inc
816
St. Stephen BanGroup, Inc
71
State First Financial Corporation
71
Story County Bancorporation
72
Stuart Kansas City Limited Partnership
746
Suburban Bancorp, Inc
816
Sumitomo Bank, Limited, Chuo-ku, Osaka, Japan
550
SunTrust Banks, Inc
369
Susquehanna Bancshares, Inc
908
Synder Holding Corporation
371
T R Financial Corp
746
TeamBanc, Inc
71
TeamBanc, Inc., E m p l o y e e s ' S t o c k Ownership Plan ..
Texas East BanCorp, Inc
Texas Financial Bancorporation, Inc
Toronto-Dominion Bank
Tower Bancshares, Inc
Trans Financial Bancorp, Inc
Twin River Financial Corporation
U B & T Holding Co
U.S. Trust Corporation
UJB Financial Corp
Union Bancorp, Inc
Union Planters Corporation
United Bankshares, Inc
United Missouri Bancshares, Inc
United Subsidiary, Inc
Upper Rio Grande Bank Corporation
Valentine Bancorporation
Valley Financial Corp
71
243
1181
1182
245
813
816
156
158, 909
371
989
156, 157, 158, 371
906
126, 244
244
244
989
746
Van Buren Bancorporation, Employee Stock
Ownership Plan
Van Diest Investment Company
VSB Bancorp, Inc
Wally Bancorp, Inc
Washington Investment Company
Watford City Bancshares, Inc
West Coast Bancorp, Inc
West River Holding Company, Inc
Westamerica Bancorporation
Western Bancshares, Inc
Whitaker Bancorp, Inc
Whitaker Bank Corporation of Kentucky
Whitman Bancorporation, Inc
Wilmington Trust Corporation
Wisconsin Bancshares, Inc
Wishek Bancorporation, Inc
Withee Bank Shares, Inc
Worthen Banking Corporation
Worthen Financial Corporation
Bank Holding Company Supervision Manual
Publication of December 1992 edition
Revision
Bank holding companies
Capital adequacy guidelines, issuance of final rule
Deferred tax asset reporting
Federal Deposit Insurance Corporation Improvement
Act of 1991, final rule to implement
Foreign Bank Supervision Enhancement Act of 1991,
final rule to implement
989
371
156
244
817
1070
817
71
510
908
990
990
1181
989
908
158
245
516
516
99
790
317
98
199
199
Pages
Bank holding companies—Continued
Futures Commission merchant activities, reduction
in prior approval requirements
695
Interagency policy statement regarding branch closings . 1037
Interstate banking, article
1075
Risk-based capital guidelines,
issuance of final rule
97, 110, 614
Bank lending trends, statement
609
Bank Merger Act
Orders issued under
1st Source Bank
237
Alice Bank of Texas
362
Banco Popular de Puerto Rico
748, 979
Bank of Montana
817
Bank of Neosho
158
Bank of New York
61
Bank of Woodward
646
158
Belcaro Bank
California Center Bank
748
Canton Interim Bank
1182
Centura Interim Bank
73
Chemical Bank
736
Colorado National Bank-Grand Junction
909
Commonwealth Bank
646
Community Bank and Trust Company
158
F & M Bank-Winchester
909
Fanners State Bank of Worden
73
Fifth Third Bank
246
First Florida Bank
246
First United Bank
158
Fourth Financial Corporation
1182
Granby Bancshares, Inc
158
Interim Bank
909
Jackson State Bank
240
KSB Bank
73
Meridian Bank
817
New Bank
910
Old Kent Bank
73
Premier Bank & Trust
991
SouthTrust Bank of West Florida
68, 547
Sulphur Springs State Bank
991
Sun Bank of Tampa Bay
910
Suntrust Banks, Inc
245
Triangle Bank and Trust Company
1182
Union Bank and Trust Company
910
Union Colony Bank
748
VectraBank
1071
Bank of Canada
585
Bank of England
584
Bank of Japan
585
Bank Secrecy Act
282, 468, 689, 690
Bank Secrecy Act, examinations
693
Bank's Small Business and Agricultural
Advisory Council
398, 410
BankAmerica
775
BankAmerica Corporation
259
Banking Act of 1935
1101
Banking Supervision Department, Cayman Islands
Government, in foreign banking, article
915
Basle Accord
4, 612, 661
Basle Committee on Banking Supervision
5, 474, 614
Basle Minimum Supervision Standards
6
Basle risk-based regulatory capital standards
392
BB&T Financial Corporation
278
Beaufort Sea
454
Bell Atlantic Corporation
401
Bell Helicopter
450
Bergstrom Air Force Base
450
Bethlehem Steel
401
Board of Governors (See also Federal Reserve System)
Consumer Advisory Council (See Consumer Advisory
Council)
Index to Volume 79
Pages
Board of Governors—Continued
Consumer and Community Affairs Division,
restructuring
18
Federal Open Market Committee (See Federal Open
Market Committee)
Litigation (See Litigation)
Policy statement on large-value fund transfers for
money laundering
97
Publications (See Publications in 1993)
Regulations (See Regulations)
Staff
Changes
Brown, MaryEllen A
937
Danker, Deborah
478, 1038
Division of Consumer and Community Affairs,
restructuring
18
English, Maureen P.
19
Hoffman, Stephen M„ Jr.
478
Loney, Glenn E
19
Madigan, Brian
478
McNulty, Irene Shawn
19
Porter, Richard
478
Robinson, Donald L
98
Smith, Dolores S
19
Studies (See Staff studies)
Statements to the Congress (See Statements to the
Congress)
Thrift Institutions Advisory Council, new member
appointments
96
Boehne, Edward G., President, Federal Reserve Bank of
Philadelphia
Economy in Philadelphia District, statement
399
Federal Open Market Committee, appropriate
disclosure, statement
1118
Boeing
446, 462
Boeing Helicopter
400
Branch Banking and Trust Company
278
Broaddus, J. Alfred, Jr., President, Federal Reserve
Bank of Richmond
Economy in Richmond District, statement
409
Federal Open Market Committee, appropriate
disclosure, statement
1120
Brown, MaryEllen A., retirement
937
Brunner, Allan D., article
649
Budget deficit, statement
471
Bureau of Economic Analysis
193
Business Outlook Survey, published by Federal Reserve
Bank of Philadelphia
402
Business, Commercial, and Community Development
Secondary Market Development Act, H.R.2600,
statement
1098
Businesses, small, credit availability to
392, 473, 929
C&S/SOVRAN Corporation
259
Canada, Bank of
585
Capital Adequacy Guidelines, final rule, issuance,
announcement
317
Capital Equivalency Report
4
Capital, changes in at commercial banks
660
Carey, Mark S., article
77
Carswell Air Force Base
450
Case
422
Cash Task Force, Working Group on Money Laundering .. 690
Caterpillar
419, 422
Cellular service increase
598
Census of Manufactures
604
Census, 1987 Agricultural
426
Census, U.S. Bureau of the
590, 601
Charles Schwab
452
Chase Field Naval Air Station
450
Chase Manhattan Corporation
277
A85
Pages
Check clearing and collection, same-day settlements,
announcement
788
Chevron Oil Company
450
Chicago Board of Trade
421
Chrysler Motor Company
421, 434, 595
Citicorp
277
Clean Air Act Amendments of 1990
429, 599
Closing the Gap, FRB Boston brochure
785
Commerce, U.S. Department of
451
Commercial and industrial loans of commercial banks
651
Commercial bank profits in 1992, article
649
Commercial Club of Chicago
419
Commodity Futures Trading Commission
464, 470
Community Affairs Program
288, 313
Community Development Corporations
682
Community Development Investments, publication
274
Community development corporations
Community Reinvestment Act
285
Statement
274
Community Investment Program, Federal Home Loan
Bank System
262
Community Reinvestment Act
Article
251
Community development activity
682
Efforts to strengthen administration
1020
Examinations process
935
Statements of status
285, 934, 1127
Compliance, equal opportunity, by bank holding
companies
311
Comptroller of the Currency, Office of the
2, 97, 252, 282,
307, 331, 467, 784, 1082
Congressional Budget Office
471
Consumer Advisory Council
Appointment nominations sought
788
Meetings
477, 695, 1037
Members, new appointments
197
Consumer Bankers Association
262
Consumer Complaint Program
313
Consumer Compliance Handbook
312
Consumer loans, commercial banks
653
Corrigan, E. Gerald, President, Federal Reserve Bank
of New York
Economy in New York District, statement
398
Resignation
197
Council of Great Lakes Governors
435
Council of Great Lakes Industries
419, 435
CRA Advanced Examination Techniques course
287
Crabbe, Leland E„ article
751
Credit
Availability, statement
279, 392
Crunch for real estate, staff study
676
Discrimination in mortgage lending, statement
307
Economically Disadvantaged, conference
313, 785
Small businesses, availability to
473, 929
Criminal Referral Report, amendment to change
regulations H, K, and Y
949, 1037
Cummins Engine
419, 422
Currency Transaction Reports
693
Customs Service, U.S
691
DANKER, Deborah
Promoted to Assistant Director, Division of
Monetary Affairs
Resignation
Decatur Federal Savings and Loan
Deere & Company
Defense, U.S. Department of
Deferred tax asset reporting
Denver International Airport
Depository institutions (See also specific types)
Reserve requirements
Depository Trust Company
478
1038
291
422
414
98
445
18, 27
90
A86
Federal Reserve Bulletin • December 1993
Pages
Depository Trust Corporation
763
Derivatives activities of banking organizations, statement .. 1137
Diamond-Star
421
Dickey, John W., foreign exchange articles
268, 674
Directors, Federal Reserve Banks and Branches, list
553
Directory: Bank Holding Company Community
Development Investments, publication
274
Diskettes, statistical data now available on
788
Donnelly
423
Douglas Amendment
1075, 1079
Dover Air Force Base
400
Dow Chemical
419, 423, 434
DuPont Inc
401
ECONOMY
In 1992
171
In 1993
831
Monetary policy, statement
292, 302
Statement on major tendencies (Chairman Greenspan) ... 193
Statements
Atlanta District
412
Boston District
395
Chicago District
418
Cleveland District
405
Dallas District
448
Kansas City District
444
Minneapolis District
440
New York District
398
Philadelphia District .,
399
Richmond District
409
San Francisco District
453
St. Louis District
436
Elliehausen, Gregory E., staff study
929
Energy, Department of
599
England, Bank of
584
English, Maureen P., appointed Assistant Director,
Division of Consumer and Community Affairs
19
English, William B., article
649
Equal Credit Opportunity Act
Community reinvestment
291
Compliance examinations
311
Fair lending practices
785
Euro-MTNs
766
European Bank for Reconstruction and Development
110
European currencies
12
FAIR Housing Act
Fannie Mae
Farmers & Merchants Bank of Long Beach
Farmers Holding Company
Federal Banking Agency Audit Act
Federal Bureau of Investigation
Federal Deposit Insurance Corporation
310, 311
263
260
277
1104
691
3, 96, 97, 252,
Federal Deposit Insurance Corporation Improvement
Act of 1991 (FDICIA)
Actions taken under
ABN AMRO Bank N.V., Amsterdam,
The Netherlands
153, 1068
ABN AMRO Holding, N.V., Amsterdam,
The Netherlands
153, 1068
ABN AMRO North America, Inc
153, 1068
AmSouth Bancorporation
67, 153, 981
BankAmerica Corporation
148
BB&T Financial Corporation
744,811
Blue Ridge Bank, Inc
1178
BOK Financial Corporation
67
Britton & Koontz Capital Corporation
811
Button Gwinnett Financial Corporation
983
California Bancshares, Inc
1067
Capital City Bank Group, Inc
67
Pages
Federal Deposit Insurance Corporation Improvement
Act of 1991 (FDICIA)—Continued
Actions taken under—Continued
CBT Corporation
739
CCB Financial Corporation
744
Central Bancshares of the South, Inc
546
CNB, Inc
1067
CoBancorp
983
Colonial BancGroup, Inc
67, 983
Commerce Bancorp
811
CoreStates Financial Corp
1067
Evergreen Bancshares, Inc
546, 1067
Fifth Third Bancorp
153
First Alabama Bancshares, Inc
67, 983
First Bank System, Inc
811
First Citizens Bancorp of Indiana
67
First Citizens Bancorporation of South Carolina, Inc. ..
67
First Citizens Bancshares Company
1178
First Citizens BancShares, Inc
642, 811, 983, 1067
First Community Bankshares, Inc
1067
First Interstate Bancorp
369
First of America Bank Corporation
153
First Staunton Bancshares, Inc
811
First Tennessee National Corporation
740
First Union Corporation
67, 153, 812
FirsTier Financial, Inc
744
Fishback Insurance Agency, Inc
153
Fourth Financial Corporation
67
Grenada Sunburst System Corporation
242
Heritage Financial Services
67
Independent Bank Corporation
812
IntetfCounty Bancshares, Inc
984
Lake Bancshares Corporation
812
LaSalle National Corporation
153, 1068
Liberty Holding Company, Inc
905
Merchants National Bank of Montgomery
1067
Mid Am, Inc
546, 640
Mid-Citco Incorporated
67
Mountain Holding Corporation
984
Old Kent Financial Corporation
68, 1067
Old Kent-Illinois, Inc
68
Pickens County Bancshares, Inc
642
PNC Bank Corp
1067
Pueblo Bancorporation, Inc
984
Shoreline Financial Corporation
812
Southern BancShares (N.C.), Inc
744, 812
Southern National Corporation
984, 1178
SouthTrust Corporation
812, 984, 1174
SouthTrust of Florida, Inc
812
State Financial Services Corporation
902
Stichting Administratiekantoor ABN AMRO Holding,
Amsterdam, The Netherlands
153, 1068
Stichting Prioriteit ABN AMRO Holding, Amsterdam,
The Netherlands
153, 1068
Summit Bancorporation
984
Synovus Financial Corp
984
Texas Bancshares, Inc
812
United Bancorp, Inc
68
United Carolina Bancshares Corporation
812
Valley National Bancorp
153
Wes-Tenn Bancorp, Inc
546
Capital adequacy guidelines, issuance of final rule
317
Credit availability statement
393
Credit availability to small businesses
474
Final rule to implement
199
Interstate banking, article
1076
Interstate banking, statement
774
Legislative effects on commercial banks
662
Limitations on interbank liabilities, Regulation F
96
Real estate lending standards, Regulation H
97
Regulation C, amendment
18, 27
Regulations H, and Y, amendment
331
Regulation Y, amendment
112
Index to Volume 79
Pages
Federal Deposit Insurance Corporation Improvement
Act of 1991 (FDICIA)—Continued
Regulatory burden
281, 467, 781
Federal Financial Institutions Examination Council
Community Reinvestment Act
253, 287
Credit discrimination in mortgage lending
307
Economically underserved neighborhoods, study
682
Regulatory burden study
281, 467
Reporting requirements for foreign banks
915
Training to detect money-laundering schemes
690
Federal Home Loan Bank System
262
Federal Home Loan Mortgage Corporation
263, 654
Federal National Mortgage Association
263, 654
Federal Open Market Committee
Federal Reserve System structure
1101
Meetings
Appropriate disclosure,
statements
1100, 1107, 1110, 1112, 1113,
1114, 1115, 1116, 1117,
1118, 1119, 1120, 1122,
1123, 1124, 1125, 1126
Minutes
479, 696, 859, 938, 1039
Policy actions, record
20, 100, 323
Federal Reserve Act
573, 1104
Orders issued under
Barnett Bank of Naples
1063
Farmers & Merchants Bank of Long Beach
365
Morgan Guaranty International Finance Corporation ..
66
Texas State Bank
633
Federal Reserve and Treasury foreign exchange operations
(See Foreign exchange operations)
Federal Reserve Banks
Atlanta, economy in district, statement
412
Board of Directors, Chairmen and Deputy Chairmen,
appointments
1036
Boston
Closing the Gap, brochure
785
Credit availability, statement
279
Credit issues for Native Americans, conference
313
Economy in New England, statement
395
Mortgage denial study
291, 308
Mortgage lending study, statement
314
Study to analyze compliance of mortgage lenders
785
Chicago, economy in district, statement
418
Cleveland, economy in district, statement
405
Dallas
Cash flow study
691
Economy in district, statement
448
Directors, list
553
Kansas City
Credit and the Economically Disadvantaged,
conference
313, 785
Economy in district, statement
444
Minneapolis, economy in district, statement
440
New York
Corrigan, E. Gerald, resignation as president
197
Credit issues for Native Americans, conference
313
Economy in district, statement
398
Government securities market, surveillance
464, 469
McDonough, William J., appointed president
856
Operating income, preliminary figures available
200
Philadelphia, economy in district, statement
399
Richmond, economy in district, statement
409
San Francisco, economy in district, statement
453
St. Louis, economy in district, statement
436
Federal Reserve Board (See Board of Governors)
Federal Reserve System (See also Board of Governors)
Creation of, in reserve requirements article
573
Initiatives to alter structure, statement
1100
Operating income, preliminary figures available
200
Postwar membership
575
A87
Pages
Federal Reserve System Accountability Act of 1993,
H.R.28, statements
1102, 1110, 1111,
1112, 1113, 1114, 1115
Federal Reserve System Working Group on Money
Laundering, activities
689
Federal Trade Commission
310
Fedgazette, Minneapolis Federal Reserve Bank's
newspaper
440
Fedwire, money laundering through
691
Fees (for Federal Reserve services to depository
institutions)
Check clearing and collection
Same-day check settlements, new service
788
Schedules for 1993
18
Feinman, Joshua N., article
569
Fergus, James T., staff study
676
Financial Accounting Standards Board
783
Financial Accounting Standards Board Statement no. 109 ..
98
Financial Crimes Enforcement Network, Department
of the Treasury
691
Financial developments in 1992
181
Financial Enforcement, Department of the Treasury
690
Financial Institutions Examination Council
98
Financial Institutions Reform, Recovery, and
Enforcement Act of 1989
Community Reinvestment Act
256
Credit availability, statement
393
Credit to small businesses, statement
475
Real estate appraisal requirements
682
Regulatory burden, statement
781
Financial instruments, warning on use of questionable
types, announcement
1143
Financial Markets Group
469
Financial needs of economically underserved
neighborhoods, statement
681
First Bank of the United States
1100
First Bank System
278
First Executive Corporation
86
First Interstate BancSystem
261
First Union Corporation
260
First Union Corporation of Florida
260
FirstBank of Illinois Company
277
Fleet Financial Group
778
Flooding in Midwest, actions to ease financial stress
856
Florida National Banks of Florida, Inc
260
Flow of funds data on diskette
789
Ford Motor Company
421, 434, 595
Foreign Bank Supervision Enhancement Act of 1991
Article
1
Changing legislation in foreign banking
914
Final rule to implement
199, 206
Foreign bank applications, new procedures
477
Interstate banking, statement
775
Proposed action for Regulation K
98
Foreign bank applications, new procedures
477
Foreign banks, U.S. branches and agencies, article
913
Foreign exchange operations, articles
11, 268, 674, 926
Foreign margin stocks, lists available
201, 203, 614, 615,
856, 867, 1143, 1145
Forrestal, Robert P., President and Chief Executive Officer,
Federal Reserve Bank of Atlanta, economy
in Atlanta District, statement
412
Freddie Mac
263
Freedom of Information Act
1106
Full Employment and Balanced Growth Act of 1978 (See
Monetary policy: Reports to the Congress)
Futures Commission merchant activities, reduction
in prior approval requirements
695
GARN-ST GERMAIN Depository
Institutions Act of 1982
578, 1076
A88
Federal Reserve Bulletin • December 1993
Pages
Garwood, Griffith L., article, Community Reinvestment
Act
251
GE Aerospace
400
General Accounting Office, statements
on authority
1100, 1132, 1135
General Agreement on Tariffs and Trade (NAFTA)
433
General Assistance program, State of Michigan
427
General Dynamics
450
General Motors Acceptance Corporation
752
General Motors Corporation
419, 421, 425, 595
Giddings & Lewis
422
Goodman, John L., Jr., staff study
676
Gore-Bronson Bancorp, Inc
260
Government in the Sunshine Act
1106
Government National Mortgage Association
653
Government Securities Act of 1986
470
Government securities market
Statement
464
Surveillance
469
Great Depression, The
574
Greene, Judge Harold
1101
Greene, Margaret L.( Senior Vice President and
Deputy Manager, Federal Reserve Bank of New York,
article
926
Greenspan, Alan
Budget deficit, statement
471
Credit availability to small businesses, statement
473
Economy and monetary policy, statements
292, 302, 849
Economy, major tendencies in, statement
193
Federal Open Market Committee meetings, appropriate
disclosure, statement
1107
Initiatives to alter structure of Federal Reserve,
statement
1100
Guardsman Auto Supply
423
Guide to the Flow of Funds Accounts, publication
695
"Guidelines for Disclosure of Written Evaluations
and Revised Assessment Rating System,"
issued by FFIEC
254
Guidelines for Real Estate Appraisal and
Evaluation Programs
496
H.R.2235, on nationwide interstate banking
H.R.28, Federal Reserve System
Accountability Act, statements
774
1110, 1111, 1112,
1113, 1114, 1115
H.R.459, Nationwide Banking and Branching Act
774
H.R.618
465
Helkie, William L., article
379
Herfindahl-Hirschman index, article
188
Herman-Miller
423
Hitachi
422
Hoenig, Thomas M., President, Federal Reserve
Bank of Kansas City
Economy in Kansas City District, statement
444
Federal Open Market Committee, appropriate
disclosure, statement
1124
Hoffman, Stephen M., Jr., appointed Assistant Director,
International Supervision, Division of Banking
Supervision and Regulation
478
Home Mortgage Disclosure Act
Community reinvestment
291
Computerized system developed to analyze data
287, 307
Data for 1990 and lending patterns
314
Housing and Community Development Act of 1992,
amendments to implement provisions
477, 495
Proposed amendment to Regulation C
98
Regulation C amendment, new exemption standard
27
Home Mortgage Lending and Equal Treatment,
FFIEC brochure
310
Home Mortgages: Understanding the Process and Your
Right to Fair Lending, FRB brochure
310
Pages
Home Ownership and Equity Protection Act of 1993,
statement
Humphrey-Hawkins Act (See Monetary policy:
Reports to the Congress)
Housing and Community Development Act of 1992
Community development lending, statement
Regulation C, amendment
Regulation DD, amendment
Regulation O, amendment
Housing and Urban Development,
U.S. Department of
27,
Hurricane Andrew
385, 413,
Hurricane Iniki
ILLINOIS Department of Commerce and
Community Affairs
Independent Bankers Association of America,
regulatory burden, study
Industrial production and capacity utilization
data on diskette
Industrial production and capacity
utilization, releases
684
684
477, 495
477, 498
621
310, 785
415, 416
385
427
264, 283
789
15, 93, 190, 271,
389, 606, 678, 769,
846, 931, 1013, 1090
Industrial production, capacity, and capacity
utilization since 1987, article
Industrial Roundtable
Interagency policy statement regarding branch closings,
announcement
Interagency Working Group on Market Surveillance
Interest income and expense, commercial banks
Interest on demand, amendment to Regulation Q to
extend deletion of advertising rules
International Banking Act of 1978
FBSEA final rule
Foreign bank supervision, article
Legislative changes
Orders issued under
Banco de Sabadell, S.A., Sabadell, Spain
Bank of Taiwan, Taipei, Taiwan
Banque Transatlantique, Paris, France
Chiao Tung Bank, Taipei, Taiwan
Citizens National Bank, Seoul, Korea
Coutts & Co., AG, Zurich, Switzerland
Korea First Bank, Seoul, Korea
Medium Business Bank of Taiwan, Taipei, Taiwan —
Singer & Friedlander, Ltd., London, England
TaipeiBank, Taipei City, Taiwan
United World Chinese Commercial Bank,
Taipei, Taiwan
International Finance Corporation
International Paper
International transactions, article
Interstate banking
Article
Statements
772, 777,
Interstate Banking Efficiency Act
Iowa Business Council
590
418
1037
464
659
499
206
1
914
366
541
900
543
805
636
1064
807
809
143
146
110
437
379
1075
1093
776
419
J.B. Hunt Transport Services
437
J.P. Morgan and Company
277
James River Corporation
437
Japan, Bank of
585
Japanese currencies
13
Joint Report on the Government Securities Market,
joint agency publication
464
Jordan, Jerry L., President, Federal Reserve Bank of
Cleveland
Economy in Cleveland district, statement
405
Federal Open Market Committee, appropriate
disclosure, statement
1119
Justice, U.S. Department of
188, 291, 308, 310, 692, 785
Index to Volume 79
Pages
KEANE, Frank, Foreign exchange article
926
Keehn, Silas, President, Federal Reserve Bank of Chicago
Economy in Chicago District, statement
418
Federal Open Market Committee, appropriate disclosure,
statement
1122
Kelly, Edward W., Jr., Federal Reserve System
Accountability Act, H.R.28, statement
1112
Kennecott Smelter
461
Komatsu
422
LABOR Statistics, U.S. Bureau of
604
LaWare, John P.
Bank lending trends, statement
609
Business, Commercial, and Community Development
Secondary Market Development Act, H.R.2600,
statement
1098
Credit discrimination in mortgage lending, statement .... 307
Federal Reserve System Accountability Act, H.R.28,
statement
1113
Interstate banking, statement
772, 1093
Mention in interstate banking article
1076
Money-laundering, efforts to control, statement
689
North American Free Trade Agreement, statement
1026
Regulatory burden, statements
281, 466, 781
Small Business Loan Securitization and Secondary
Market Enhancement Act, S.384, statement
1016
Legislation (See subject or specific name of act)
Life insurance companies, in private placements, article ...
77
Lindsey, Lawrence B.
Community Reinvestment Act, statements .... 285, 1020, 1127
Federal Reserve System Accountability Act,
H.R.28, statement
1114
Home Ownership and Equity Protection Act of 1993,
statement
684
Litigation
Final enforcement decisions issued by Board of Governors
Brooks, Preston J
992
CBC, Inc
247
First National Bank of Deport, N.A
992
Godfrey, Wesley Jr.
372
Knoerzer, John S
818
Metropolitan National Bank, N.A
821
O'Connell, Michael A
821
Owen, Tommie J
375, 376
Texas National Bank-Dallas
818
Vic Sather & Associates, Inc
160
Final enforcement orders issued by Board of Governors
Blackshear Bank
165
Bosshard Banco, Ltd
1072
CBC, Inc
74
Ciccarello, Arthur T.
551
Colonial Bancshares, Inc
911
Country Hill Bancshares, Inc
826
Country Hill Bank
749, 1072
Ditta, Sammy
1073
Dollar Savings and Trust Company
911
Farmers and Merchants Bank of Long Beach
165
First Pacific Bancorp, Inc
647
Florida First International Bank
1183
Gardner, J.D
1073
Geiger, Dan S
911
Greater Ohio River Company
165
Guardian Bank
551
Hagan, Charles W. Jr.
750
Haigh, George W.
1073
Harrison, John Ray
1073
Hornberger, Fred
1073
Industrial Bancshares, Inc
165
International Bancshares, Inc
911
Irausquin, Victor J. Vargas
826
Jawhary, Sayed, Luxembourg, Luxembourg
551
Joe R. Clarke III
249
A89
Pages
Litigation—Continued
Final enforcement orders—Continued
Lawrence, Gaylon M., Sr.
75
LeMaster, Frank P.
750
Miles, Randolph S
552
Mission Bancshares, Inc
165
One Security, Inc
165
Pacific Inland Bancorp
647
Piedmont Trust Bank
998
Purdy Bancshares, Inc
750
Sandquist Corporation
165
Sands, Leonard S., and Ada P.
750
Sentry Bancorp, Inc
1183
Silicon Valley Bancshares, Inc
647
Stout, Cynthia
552
Stuwe, Donald E
377
United Mizrahi Bank, Ltd., Tel Aviv, Israel
1183
Valley View Bancshares, Inc
165
Vickery, E.D
1073
Walker, Kenneth G
750
Pending cases involving the
Board of Governors
74, 159, 246, 372,
551, 646, 749, 818,
910, 991, 1072, 1183
Termination of enforcement actions
1184
Written agreements approved by Federal Reserve Banks
American Pacific Bank
911
Arrow Financial Corporation
647
Banco Boliviano Americana, S.A., La Paz, Boliva .... 1184
Britton Bancshares, Inc
1073
BSD Bancorp, Inc
377
Carney Bank
377
Citizens First Bancorp, Inc
647
Citizens State Bank and Trust Company
1073
Columbus Junction State Bank
75
Commerce Exchange Bank
998
Daingerfield Bancshares, Inc
250
Dollar Savings and Trust Company
911
First Bank of Berne
165
First Bank of Philadelphia
1073
Glendale Bancorporation
911
Heritage Bank
75
Khalid Bin Mahfouz, Saudi Arabia
75
Marin National Bancorp
552
Maryland Bankcorp, Inc
750
Missouri State Financial Corporation
826
NESB Corp
75
New East Bancorp
552
Ohio Bancorp
911
People's Mutual Holdings
75
Perry County Bancorp, Inc
647
Pitcairn Bancorp, Inc
165
PT Bank Niaga, Jakarta, Indonesia
250
Southeast Capital Corporation Employee Stock
Ownership Plan
1073
Sparta State Bank
998
Union State Bank
377
United Bank Corporation of New York
165
Wahoo State Bank
75
Loney, Glenn E., promotion to Assistant Director,
Division of Consumer and Community Affairs
19
MAASTRICHT Treaty
Machinery manufacturing since 1987, article
Mack, Phillip R., article
Market risk and bank capital, documents
Madigan, Brian, promoted to Associate Director,
Division of Monetary Affairs
Management and Budget, Office of
Manufacturing, developments since 1987, article
Marathon Oil Company
12
597
1001
614
478
200, 471
592
450
A90
Federal Reserve Bulletin • December 1993
Pages
Market Surveillance Function
469
Martin Marietta
400,411
Massachusetts Community and Banking Council
280
Mazda Corporation
421
McDonnell Douglas
438
McDonough, William J., President, Federal Reserve
Bank of New York
Appointed, announcement
856
Federal Open Market Committee, appropriate
disclosure, statement
1117
Foreign exchange articles
11, 268, 674
Government securities market surveillance, statement ... 469
McFadden Act
774, 1079, 1094
McGuire Air Force Base
400
McNulty, Irene Shawn, appointed Assistant Director,
Division of Consumer and Community Affairs
19
McTeer, Robert D., Jr., President, Federal Reserve
Bank of Dallas
Economy in Dallas district, statement
448
Federal Open Market Committee, appropriate
disclosure, statement
1125
Medicaid costs, State of Michigan
428
Medium-term note market, article
751
Melzer, Thomas C., President, Federal Reserve Bank of
St. Louis
Economy in St. Louis District, statement
436
Federal Open Market Committee, appropriate
disclosure, statement
1123
Member banks
Capital adequacy guidelines, issuance of final rule
317
Interagency policy statement regarding branch closings . 1037
Interstate banking, article
1075
Risk-based capital guidelines, issuance of final rule .. 614, 620
Mercantile Exchange
421
Merrill Lynch
452
Metropolitan Statistical Area designations,
announcement to continue 1992 designations
200
Michigan's Department of Commerce
427
Midwest flooding, actions to ease financial stress
856
Mines, Bureau of, Department of Energy
600
Mining, developments since 1987, article
598
Misback, Ann E., article
1
Mitsui Taiyo Kobe Bank Limited
259
Mobil Oil Company
450
Modernizing the financial system: Recommendations
for safer, more competitive banks, report
1076
Modine
422
Monetary aggregates, data on diskette
789
Monetary Control Act of 1980, reserve
requirements, article
578, 586
Monetary policy
Article
849
Reports to the Congress
167, 827
Money laundering
Efforts to control, statement
689
Large-value fund transfers, policy statement
97
Money Laundering Section, Department of Justice,
Criminal Division
692
Money stock data, revisions
317
Mortgage and consumer finance, data on diskette
789
Mortgage lending discrimination, Boston Reserve
Bank study
308
Mortgage lending patterns, statement on study by Boston
Reserve Bank
314
Motor vehicles, manufacturing since 1987
594
Moxham Bank Corporation
277
Mullins, David W., Jr.
Credit for small businesses, statement
392
Federal Reserve System Accountability Act,
H.R.28, statement
1110
Government securities market, statement
464
Mutual Benefit Life Insurance Company
86
Mutual fund industry, recent trends, article
1001
Pages
NATIONAL Association of Insurance Commissioners
85
National Association of Purchasing Management, Inc
601
National Association of Securities Dealers
465
National Bank Act
572, 1097
National bank notes
573
National Bureau of Economic Research
451
National Credit Union Administration
307
National Equity Fund
277
National Federation of Independent Business
473
National Market System
201, 614, 857, 1143
National Monetary Commission
1101
National Reserve Association
1101
National Survey of Small Business Finances, 1988-89
1087
Nationwide Banking and Branching Act, H.R.459
774
NCNB Corporation
259
Neal Amendment
411
Net transaction accounts
Three percent reserve requirement
18
New York Stock Exchange
465
Nordic Investment Bank
110
North American Electric Reliability Council
600
North American Free Trade Agreement
(NAFTA)
433, 447, 1026
Novell
461
Nucor
437
OHIO Equity Fund
277
Omnibus Budget Reconciliation Act of 1990
473
Organisation for Economic Co-operation and
Development
97
Other Red Estate Owned, loan category
783
Over-the-counter stocks, list of marginable .. 201, 203, 614, 615,
856, 867, 1143, 1145
PARRY, Robert T., President, Federal Reserve
Bank of San Francisco
Economy in San Francisco District, statement
Federal Open Market Committee, appropriate
disclosure, statement
Peoples Bank of Lakeland
Perry Bancshares, Inc
453
1126
261
278
Persian Gulf War
379, 386, 450, 596
Phillips Oil Company
Phillips, Susan M.
Derivatives activities of banking organizations,
statement
1137
Federal Reserve System Accountability Act,
H.R.28, statement
1115
Policy actions, Federal Open Market Committee,
record
20, 100, 323
Policy statement
Large-value fund transfers for money laundering
97
Porter, Richard, promoted to Deputy Associate
Director, Division of Monetary Affairs
478
Prime bank guarantees, warning announcement on use of .. 1143
Prime bank letters of credit, warning announcement
on use of
1143
Prime bank notes, warning announcement on use of
1143
Private placements, article on developments in
77
Production, industrial (See Industrial production
and capacity utilization)
Proposed actions
Capital adequacy guidelines, limitations of
deferred tax assets, February 11, 1993
317
Financial institution, expansion of definition,
May 13, 1993
695
Real estate appraisals, July 19, 1993
790
Regulation A, to implement section 142, FDICIA,
August 20, 1993
937
Regulation C, Home Mortgage Disclosure Act,
December 28, 1992
98
Index to Volume 79
Pages
Proposed actions—Continued
Regulation E, extension of provision to electronic
benefit transfer programs, February 8, 1993
317
Regulation H, uniform multiagency criminal
referral form, January 6, 1993
200
Regulation K
Foreign Bank Enhancement Act of 1991,
to implement, December 31, 1992
98
Uniform multiagency criminal referral form,
January 6, 1993
200
Regulation O, aggregate insider lending, May 7, 1993 ... 695
Regulation Y, uniform multiagency criminal referral
form, January 6, 1993
200
Regulation Z, revision, December 1, 1992
18
Prowse, Stephen D., article
77
Proxmire, Senator William A., in community
reinvestment article
251
Publications in 1993
79th Annual Report, 1992
478
Bank Holding Company Supervision Manual
99, 790
Community Development Investments in 1993
274
Directory: Bank Holding Company Community
Development Investments
274
Guide to the Flow of Funds Accounts
695
Market risk and bank capital documents, papers by
Basle Committee on Banking Supervision
614
Puget Sound
462
RADDOCK, Richard D., article
Rea, John D., article
Real estate
Appraisal guidelines, new procedures
Appraisals, interagency rule to amend regulations,
proposed action
Commercial bank loans
Lending standards, amendment to Regulation H
Loans, and regulatory burden
Regulations (Board of Governors, See also Rules)
Amendments and revisions
A, Extensions of Credit by Federal Reserve Banks
Proposed action to implement section 142,
FDICIA
C, Home Mortgage Disclosure
Housing and Community Development Act
of 1992, provisions
477,
Mortgage companies to disclose data on home
l e n d i n g activity
590
77
496
790
652
97
782
937
495
18
New exemption standard for nondepository
mortgage lenders
27
Proposed action on home lending activity
98
D, Reserve Requirements of Depository Institutions
Net transaction accounts, increase in with
3 percent reserve requirement
18, 27
F, Limitations on Interbank Liabilities
New regulation to implement interbank liability
provisions under FDICIA
96, 107
G, Securities Credit Transactions
OTC and foreign margin stocks,
list, revisions
201, 203, 614, 615,
856, 867, 1143, 1145
H, Membership of State Banking Institutions
in the Federal Reserve System
Additional bank names added to list of multilateral
institutions
110
Capital adequacy guidelines
331
Criminal Referral Report
949, 1037
Real estate appraisals, proposed action
790
Real estate lending standards, implementation
of uniform
97
Risk-based capital guidelines, amendment
620
K, International Banking Operations
Criminal Referral Report
949, 1037
A91
Pages
Regulations (Board of Governors, See also Rules)—
Continued
Amendments and revisions—Continued
K, International Banking Operations—Continued
Foreign Bank Supervision Enhancement Act
of 1991, final rule
5, 199, 206
Proposed actions, in article
98
O, Loans to Executive Officers, Directors, and
Principal Shareholders of Member Banks
Aggregate insider lending
621, 695
Federal Reserve Act responsibility
112
Q, Prohibition Against the Payment of Interest
on Demand
Advertising rules extended
499
T, Credit by Brokers and Dealers
OTC and foreign margin stocks,
list, revisions
201, 203, 614, 615,
856, 867, 1143, 1145
U, Credit by Banks for the Purpose of Purchasing or
Carrying Margin Stocks
OTC and foreign margin stocks,
856, 867, 1143, 1145
X, Borrowers of Securities Credit
OTC and foreign margin stocks,
856, 867, 1143, 1145
Y, Bank Holding Companies and Change in
Bank Control
Capital adequacy guidelines
331
Criminal Referral Report
949, 1037
Federal Deposit Insurance Corporation
Improvement Act, final rule
112, 199
Foreign Bank Supervision Enhancement Act
of 1991, final rule
5, 199, 206
Guidelines for real estate appraisals, new
procedures
496
Real estate appraisals, proposed action
790
Risk-based capital guidelines, amendment
620
Z, Truth in Lending
Preprinted form use, temporary exception
871
Regulatory provision, clarifications
496
CC, Availability of Funds and Collection of Checks
Conformity to Uniform Commercial Code,
amendment
114
DD, Truth in Savings
Housing and Community Development Act
of 1992, to implement changes
477, 498
Regulatory burden, statements
466, 781
Regulatory Uniformity Project
466
Reserve requirements
Graduated
577
History of, article
569
Lagged
577
Net transaction accounts increase for 3 percent
requirement
18, 27
Reserves of depository institutions data on diskette
790
Resolution Trust Corporation
Monetary policy statement
430
Statement on economic tendencies
195
Resolution Trust Corporation Refinancing, Restructuring,
and Improvement Act of 1991
Lending to economically underserved neighborhoods .... 682
Risk-based capital guidelines, amendment
97, 620
Revenue test for securities activities, alternative
method of adjustment
200
Reverse redlining
685
Rhoades, Stephen A., article
188
Riegle, Senator Donald W„ Jr.
307
Risk-based capital guidelines
Final rule issuance
614, 620
Modification on collateralized transactions
97
Standards
4
A92
Federal Reserve Bulletin • December 1993
Pages
Robinson, Donald L„ appointed Assistant Inspector
General, Office of Inspector General
Rocky Mountains
Rule 144A, relation to private placements, article
Rules of Procedure, publication requirements for
notice of applications
Rules Regarding Delegation of Authority
Conflicts of interest waivers
Federal Deposit Insurance Act, amendment
Rutledge, William L., Senior Vice President, Federal
Reserve Bank of New York, statement
98
445
77, 88
1047
1149
622
934
S.384, Small Business Loan Securitization and
Secondary Market Enhancement Act, statement
1016
S.543, interstate banking
1094
Salomon Brothers
464, 469
Same-day check settlements, announcement
788
Sasser, Jim, Senator, U.S. Senate, Committee on Banking,
Housing, and Urban Affairs
196
Savage, Donald T., article
1075
Sears Roebuck and Company
401, 419, 431
Section 20 companies, quarterly table of factors, release . . .
Securities
615
Commercial bank holdings
654
Government market, statement
464
Government, surveillance of market
469
Private placement, Rule 144A
90
Revenue test, alternative method of adjustment
200
Securities and Exchange Commission
77, 464, 469, 752
Securities Exchange Act of 1934
470
Security Pacific Corporation
259
Selected interest rate data on diskette
790
Semiconductors, increased use
598
Senior Loan Officer Opinion Survey, Bank Lending
Practices
651
Shell Oil Company
450
Small Business and Agricultural
Advisory Council
418, 431, 432, 435
Small Business Loan Securitization and Secondary
Market Enhancement Act, S.384, statement
1016
Small businesses
Credit availability, statement
392
Trade credit by, staff study
929
Smith, Dolores S.
Community Reinvestment Act, article
251
Promotion to Assistant Director, Division of Consumer
and Community Affairs
19
Special Counsel
692
Spillenkothen, Richard, financial needs of economically
underserved neighborhoods, statement
681
Staff studies
1989-92 Credit Crunch for Real Estate
676
Demand for Trade Credit: An Investigation of Motives
for Trade Credit Use by Small Businesses
929
Standard Industrial Classification, 1987
601
State bank notes
573
State member banks (See also Member banks)
Risk-based capital guidelines
97, 110
State, U.S. Department of
693
Statements to the Congress (including reports and letters)
Bank lending trends (Governor LaWare)
609
Budget deficit (Chairman Greenspan)
471
Business, Commercial, and Community Development
Secondary Market Development Act
(Governor LaWare)
1098
Community development corporations (Griffith L.
Garwood, Director, Division of Consumer
and Community Affairs)
274
Community Reinvestment Act
Governor Lindsey
285, 1020, 1127
William L. Rutledge, Senior Vice President, Federal
Reserve Bank of New York
934
Pages
Statements to the Congress—Continued
Credit availability
Low income communities (Richard F. Syron,
President, Federal Reserve Bank of Boston)
279
Small businesses
Chairman Greenspan
473
Vice Chairman Mullins
392
Credit discrimination in mortgage lending
(Governor LaWare)
307
Economy
Atlanta District (Robert P. Forrestal, President
and Chief Executive Officer, Federal
Reserve Bank of Atlanta)
412
Boston District (Richard F. Syron, President, Federal
Reserve Bank of Boston)
395
Chicago District (Silas Keehn, President, Federal
Reserve Bank of Chicago)
418
Cleveland District (Jerry L. Jordan, President, Federal
Reserve Bank of Cleveland)
405
Dallas District (Robert D. McTeer, Jr., President,
Federal Reserve Bank of Dallas)
448
Kansas City District (Thomas M. Hoenig, President,
Federal Reserve Bank of Kansas City)
444
Major tendencies (Chairman Greenspan)
193
Minneapolis District (Gary H. Stern, President,
Federal Reserve Bank of Minneapolis)
440
Monetary policy (Chairman Greenspan)
292, 302
New York District (E. Gerald Corrigan, President,
Federal Reserve Bank of New York)
398
Philadelphia District (Edward G. Boehne, President,
Federal Reserve Bank of Philadelphia)
399
Richmond District (J. Alfred Broaddus, Jr., President,
Federal Reserve Bank of Richmond)
409
San Francisco District (Robert T. Parry, President,
Federal Reserve Bank of San Francisco)
453
St. Louis District (Thomas C. Melzer, President,
Federal Reserve Bank of St. Louis)
436
Federal Open Market Committee, appropriate disclosure
Chairman Greenspan
1107
Boehne, Edward G., President, Federal Reserve
Bank of Philadelphia
1118
Broaddus, J. Alfred, Jr., President, Federal Bank of
Richmond
1120
Hoenig, Thomas M., President, Federal Reserve Bank
of Kansas City
1124
Jordan, Jerry L., President, Federal Reserve Bank of
Cleveland
1119
Keehn, Silas, President, Federal Reserve Bank
of Chicago
1122
McDonough, William J., President, Federal Reserve
Bank of New York
1117
McTeer, Robert D., Jr., President, Federal Reserve
Bank of Dallas
1125
Melzer, Thomas C., President, Federal Reserve Bank
of St. Louis
1123
Parry, Robert T., President, Federal Reserve Bank
of San Francisco
1126
Stern, Gary H., President, Federal Reserve Bank of
Minneapolis
1124
Syron, Richard F., President Federal Reserve Bank
of Boston
1116
Federal Reserve System Accountability Act, statements
Governor Angell
1111
Governor Kelly
1112
Governor LaWare
1113
Governor Lindsey
1114
Governor Phillips
1115
Vice Chairman Mullins
1110
Federal Reserve System, initiatives to alter structure
(Chairman Greenspan)
1100
Financial needs of economically underserved
neighborhoods (Richard Spillenkothen, Director,
Division of Banking Supervision and Regulation)
681
Index to Volume 79
Pages
Statements to the Congress—Continued
General Accounting Office, authority
Governor Angell
1132
William J. McDonough, President, Federal Reserve
Bank of New York
1135
Government securities market
Statement on (Vice Chairman Mullins)
464
Surveillance (William J. McDonough, Executive Vice
President, Federal Reserve Bank of New York)
469
Home Ownership and Equity Protection Act of 1993,
S.924 (Governor Lindsey)
684
Interstate banking
Governor LaWare
772
Richard F. Syron, President, Federal Reserve Bank of
Boston
777
Interstate banking (Governor LaWare)
1093
Monetary policy report to the Congress (Chairman
Greenspan)
167, 849
Money laundering, Federal Reserve's efforts to control
(Governor LaWare)
689
Mortgage lending patterns (Richard F. Syron, President,
Federal Reserve Bank of Boston)
314
North American Free Trade Agreement
(Governor LaWare)
1026
Regulatory burden (Governor LaWare)
281, 466, 781
Small Business Loans Securitization and Secondary
Market Enhancement Act (Governor LaWare)
1016
Statistical data, released on diskette
788
Steelcase
423
Stern, Gary H., President, Federal Reserve Bank of
Minneapolis
Economy in Minneapolis District, statement
440
Federal Open Market Committee, appropriate disclosure,
statement
1124
Stock market credit, over-the-counter stocks (See
Over-the-counter stocks, list of marginable; Foreign
stocks, list of marginable, and Regulations:
G, T, U, and X)
Study on Regulatory Burden, Federal Financial Institutions
Examination Council
466
Summary of Deposits, FDIC annual publication
1083
SunTrust Banks, Inc
261
Survey of Consumer Finances, 1989
1087
Survey of Plant Capacity, U.S. Bureau of the Census
590
Survey of Terms of Bank Lending, Federal Reserve
Board
652
Swiss National Bank
584
Syron, Richard F., President, Federal Reserve Bank
of Boston
Credit availability, statement
279
Economy in New England, statement
395
Federal Open Market Committee, appropriate disclosure,
statement
1116
Interstate banking, statement
777
Mortgage lending patterns, statement
314
System Open Market Account
A93
Pages
. 201
TABLES (For index to tables published monthly,
{see guide at top of page A80; for special tables
published during the year, see list on page A69.)
Taiyo Kobe Bank and Trust Company
259
654
Tax Reform Act of 1986
Tenth District Economic Advisory Council
447
Terrell, Henry S., article
913
Texas Instruments
450
Thrift Institutions Advisory Council, new member
appointments
96
Thrift Supervision, Office of
97, 252, 282, 307, 331, 467
Trade credit, use by small businesses, staff study
929
Training
CRA Advanced Examination Techniques
287
Expanded Educational, Informational, and Technical
Assistance activities
288
Treasury and Federal Reserve foreign
exchange operations, article
11, 268, 674, 926
Treasury, U.S. Department of the
3, 282, 394, 464,
468, 469, 693, 1076
Tri-County Community Development Corporation
277
Truth in lending, amendment to Regulation Z to clarify
provisions
496
Truth in Savings, Housing and Community
Development Act of 1992, implementation of
changes to
477, 498
Tyson Foods
437
U.S. branches and agencies of foreign banks, article
U.S. international transactions, article
Udell, Gregory F., article
Uniform Commercial Code, amendment to Regulation CC .
United Air Lines
Upjohn
Uruguay Round of General Agreement on Tariffs
and Trade
913
379
77
114
419
423
VOUGHT Aircraft
450
WAL-MART Stores
West Texas intermediate
Westinghouse
Whirlpool
Wisconsin Equity Fund
Wisconsin Strategic Development Commission
Wolken, John D., staff study
World War II
437
384
411
419
277
419
929
575
447
A94
Maps of the Federal Reserve System
l
9
BOSTON
MINNEAPOLIS®
"
2
7
CHICAGO
12
•
-
•
•
CLEVILAND
SAN FRANCISCO
10
•
4
KANSAS CITY
NEW YORK
PHILADELPHIA
a
•
RICHMOND
STY LOUIS
8
11
.
U.
5
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 R e s e r v e officially identifies Districts
by number and R e s e r v e Bank city ( s h o w n o n both
pages) and by letter ( s h o w n o n the facing page).
In the 12th District, the Seattle Branch serves
Alaska, and the San Francisco Bank serves Hawaii.
The S y s t e m serves c o m m o n w e a l t h s and territories as f o l l o w s : the N e w York Bank serves the
C o m m o n w e a l t h of Puerto R i c o and the U.S. Virgin
Islands; the San Francisco Bank serves American
S a m o a , Guam, and the C o m m o n w e a l t h of the
Northern Mariana Islands. T h e Board of Governors
revised the branch boundaries of the S y s t e m most
recently in D e c e m b e r 1991.
A95
2-B
1-A
3-C
5_E
4-D
Baltimore
Pittsburgh
{
/
J
Charlotte
• Cincinnati
Buffalo
MAB
CT
CT
NJ
V„
NY
NEW YORK
BOSTON
6-F
7-G
• Nashville
™ J\——
Birmingham,
AL \
8-H
m
WI
^
\
/
MS
LA
RICHMOND
CLEVELAND
PHILADELPHIA
GA
Jacksonville
• Memphis
IN
Littlf
Rock
m
Miami
*
ATLANTA
Louisville
Detroit •
it m
— —
[A
y
^
•
New Orleans
MI
CHICAGO
ST. LOUIS
9-1
• Helena
MINNEAPOLIS
10-J
12-L
WY
/ NF.
CO
•
Denver
-1
P R
Omaha •
^ MO
M
Oklahoma• City
OK
KANSAS CITY
11-K
Salt Lake City
• (
San Antonio!
DALLAS
Houston
•
• Los Angeles
SAN FRANCISCO
A96
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
Warren B. Rudman
Richard F. Syron
Cathy E. Minehan
NEW YORK*
10045
Ellen V. Futter
Maurice R. Greenberg
Joseph J. Castiglia
William J. McDonough
James H. Oltman
Buffalo
14240
James O. Aston
PHILADELPHIA
19105
Jane G. Pepper
James M. Mead
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.
Marvin Rosenberg
Robert P. Bozzone
RICHMOND*
23219
Anne Marie Whittemore
Henry J. Faison
Rebecca Hahn Windsor
Anne M. Allen
J. Alfred Broaddus, Jr.
Jimmie R. Monhollon
Edwin A. Huston
Leo Benatar
Donald E. Boomershine
Joan D. Ruffier
R. Kirk Landon
James R. TuerfF
Lucimarian Roberts
Robert P. Forrestal
Jack Guynn
Richard G. Cline
Robert M. Healey
J. Michael Moore
Silas Keehn
William C. Conrad
Robert H. Quenon
Janet McAfee Weakley
Robert D. Nabholz, Jr.
John A. Williams
Seymour B. Johnson
Thomas C. Melzer
James R. Bowen
Delbert W. Johnson
Gerald A. Rauenhorst
James E. Jenks
Gary H. Stern
Colleen K. Strand
Burton A. Dole, Jr.
Herman Cain
Barbara B. Grogan
Ernest L. Holloway
Sheila Griffin
Thomas M. Hoenig
Henry R. Czerwinski
Leo E. Linbeck, Jr.
Cece Smith
W. Thomas Beard, III
Judy Ley Allen
Erich Wendl
Robert D. McTeer, Jr.
Tony J. Salvaggio
James A. Vohs
Judith M. Runstad
Donald G. Phelps
William A. Hilliard
Gary G. Michael
George F. Russell, Jr.
Robert T. Parry
Patrick K. Barron
Baltimore
21203
Charlotte
28230
Culpeper Communications
and Records Center 22701
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans
30303
35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
Memphis
72203
40232
38101
MINNEAPOLIS
55480
Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
59601
64198
80217
73125
68102
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. Cerino1
Harold J. Swart1
Ronald B. Duncan1
Walter A. Varvel1
John G. Stoides1
Donald E. Nelson 1
FredR. Herr1
James D. Hawkins1
James T. Curry III
Melvyn K. Purcell
Robert J. Musso
Roby L. Sloan1
Karl W. Ashman
Howard Wells
John P. Baumgartner
John D. Johnson
Kent M. Scott
David J. France
Harold L. Shewmaker
Sammie C. Clay
Robert Smith, III1
Thomas H. Robertson
John F. Moore1
E. Ronald Liggett1
Andrea P. Wolcott
Gordon Werkema1
•Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; East Rutherford, New Jersey 07016; Jericho,
New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311;
Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202.
1. Senior Vice President.
Federal Reserve Statistical Releases
Available on the Commerce Department's
Economic Bulletin Board
The Board of Governors of the Federal Reserve
System makes some of its statistical releases available to the public through the U.S. Department of
Commerce's economic bulletin board. Computer
access to the releases can be obtained by sub-
scription. For further information regarding a
subscription to the economic bulletin board,
please call (202) 482-1986. The releases transmitted
to the economic bulletin board, on a regular basis,
are the following:
Reference
Number
Statistical release
Frequency of release
H.3
Aggregate Reserves
Weekly/Thursday
H.4.1
Factors Affecting Reserve Balances
Weekly/Thursday
H.6
Money Stock
Weekly/Thursday
H.8
Assets and Liabilities of Insured Domestically Chartered
and Foreign Related Banking Institutions
Weekly/Monday
H.10
Foreign Exchange Rates
Weekly/Monday
H.15
Selected Interest Rates
Weekly/Monday
G.5
Foreign Exchange Rates
Monthly/end of month
G.17
Industrial Production and Capacity Utilization
Monthly/midmonth
G.19
Consumer Installment Credit
Monthly/fifth business day
Z.7
Flow of Funds
Quarterly
Publications of Interest
FEDERAL RESERVE REGULATORY SERVICE
To promote public understanding of its regulatory
functions, the Board publishes the Federal Reserve
Regulatory Service, a three-volume looseleaf 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, A A, and BB, and
associated materials.
The Payment System Handbook deals with expedited funds availability, check collection, wire transfers, and risk-reduction policy. It includes Regulation
CC, Regulation J, the Expedited Funds Availability
Act and related statutes, the official Board commentary on Regulation CC, 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. All subscription requests must be accompanied
by a check or money order payable to the Board of
Governors of the Federal Reserve System. Orders
should be addressed to Publications Services, mail
stop 138, Board of Governors of the Federal Reserve
System, Washington, DC 20551.
U.S. MONETARY POLICY AND FINANCIAL MARKETS
U.S. Monetary Policy and Financial Markets by AnnMarie Meulendyke offers an in-depth description of
the way monetary policy is developed by the Federal
Open Market Committee and the techniques employed to implement policy at the Open Market Trading Desk. Written from her perspective as a senior
economist in the Open Market Function at the Federal
Reserve Bank of New York, Ann-Marie Meulendyke
describes the tools and the setting of policy, including
many of the complexities that differentiate the process
from simpler textbook models. Included is an account
of a day at the Trading Desk, from morning
information-gathering through daily decisionmaking
and the execution of an open market operation.
The book also places monetary policy in a broader
context, examining first the evolution of Federal
Reserve monetary policy procedures from their beginnings in 1914 to the end of the 1980s. It indicates how
policy operates most directly through the banking
system and the financial markets and describes key
features of both. Finally, the book turns its attention to
the transmittal of monetary policy actions to the U.S.
economy and throughout the world.
The book is $5.00 a copy for U.S. purchasers and
$10.00 for purchasers outside the United States. Copies are available from the Public Information Department, Federal Reserve Bank of New York, 33 Liberty
Street, New York, N Y 10045. Checks must accompany orders and should be payable to the Federal
Reserve Bank of New York in U S . dollars.
Publications of Interest
FEDERAL
RESERVE
CONSUMER
CREDIT
PUBLICATIONS
The Federal Reserve Board publishes a series of
pamphlets covering individual credit laws and topics,
as pictured below. The series includes such subjects
as how the Equal Credit Opportunity Act protects
w o m e n against discrimination in their credit dealings,
how to use a credit card, and how to resolve a billing
error.
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
Three booklets on the mortgage process are also
available: A Consumer's Guide to Mortgage
Lock-Ins,
A Consumer's Guide to Mortgage Refinancings, and
A Consumer's Guide to Mortgage Settlement
Costs.
These booklets were prepared in conjunction with the
Federal Home Loan Bank Board and in consultation
with other federal agencies and trade and consumer
groups.
Copies of consumer publications are available free
of charge from Publications Services, mail stop 138,
Board of Governors of the Federal Reserve System,
Washington, D C 20551. Multiple copies for classroom use are also available free of charge.
@FedFRASER