Full text of Federal Reserve Bulletin : February 1979
The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
F E B R U A R Y 1979 FEDERAL RESERVE BULLETIN Domestic Financial Developments in the Fourth Quarter of 1978 Check Processing at Federal Reserve Offices Survey of Time and Savings Deposits, October 1978 A copy of the FEDERAL RESERVE BULLETIN is sent to each member bank without charge; member banks desiring additional copies may secure them at a special $10.00 annual rate. The regular subscription price in the United States and its possessions, and in Bolivia, Canada, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, Guatemala, Haiti, Republic of Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, El Salvador, Uruguay, and Venezuela is $20.00 per annum or $2.00 per copy; elsewhere, $24.00 per annum or $2.50 per copy. Group subscriptions in the United States for 10 or more copies to one address, $1.75 per copy per month, or $18.00 for 12 months. The BULLETIN may be obtained from the Division of Support Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551, and remittance should be made payable to the order of the Board of Governors of the Federal Reserve System in a form collectible at par in U.S. currency. (Stamps and coupons are not accepted.) VOLUME 65 • NUMBER 2 • FEBRUARY 1979 FEDERAL RESERVE BULLETIN Board of Governors of the Federal Reserve System Washington, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • Stephen H. Axilrod • John M. Denkler Janet O. Hart • James L. Kichline • Neal L. Petersen • Edwin M. Truman Michael J. Prell, Staff Director The FEDERAL RESERVE BULLETIN is issued monthly under the direction of the stafl publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. Direction for the art work is provided by Mack R. Rowe. Editorial support is furnished by the Economic Editing Unit headed by Mendelle T. Berenson. Table of Contents 87 DOMESTIC FINANCIAL THE FOURTH DEVELOPMENTS QUARTER OF IN 1978 The quarterly report to the Congress states that the Federal Reserve became more restrictive in supplying reserves to the banking system because of economic conditions and the expansion of the monetary aggregates in the third quarter. 97 CHECK PROCESSING A T FEDERAL RESER VE OFFICES Based on the Federal Reserve's May 1978 survey of its check-clearing function, the average dollar value of an interzone check is twice that of the more common locally deposited item; member banks deposit most of the checks; and funds are normally available the day after deposit. 104 SURVEY OF TIME AT COMMERCIAL AND SAVINGS BANKS, OCTOBER DEPOSITS 1978 Total time and savings deposits at insured commercial banks expanded more than 2Vi percent over the most recent survey period. 110 STAFF STUDY Summary of 4 'Tie-Ins between the Granting of Credit and Sale of Insurance by Bank Holding Companies and Other Lenders" presents the findings of a study of the existence and extent of tying between the granting of credit and the sale of insurance by retailers, bank holding companies, and other financial institutions. 112 INDUSTRIAL PRODUCTION Output rose an estimated 0.1 percent in January. 113 STATEMENTS TO CONGRESS Chairman G. William Miller states that the Federal Reserve approves H.R. 7, the Monetary Control Act of 1979, with certain modifications, before the House Committee on Banking, Finance and Urban Affairs, January 24, 1979. 118 Chairman MHler expresses the views of the Federal Reserve on the nation's economic condition and the need for continuing toward a balanced budget to slow inflation, before the House Committee on the Budget, January 25, 1979. 122 Governor Philip E. Coldwell points out that the Federal Reserve's budget for 1979 has been prepared in accordance with a policy of reducing resource expenditures while maintaining a high quality of service to the public, before the Senate Committee on Banking, Housing and Urban Affairs, January 26, 1979. 127 Chairman Miller presents the Federal Reserve's view of the nation's economic progress in annual hearings on the state of the economy, before the Joint Economic Committee of the U.S. Congress, January 30, 1979. 130 Governor Nancy H. Teeters describes seven recommendations of the Federal Reserve for the simplification of truth in lending, before the Senate Committee on Banking, Housing and Urban Affairs, February 2, 1979. 133 Governor Henry C. Wallich states that the Federal Reserve supports the extension of the authority of the Council on Wage and Price Stability to 1981, before the Senate Committee on Banking, Housing and Urban Affairs, February 8, 1979. 137 a range of 9 3 A to IOV2 percent. With regard to the objective for the rate within that range, the committee instructed the manager to be guided by ranges of tolerance for the annual rates of growth of M - 1 and M - 2 of 2 to 6 percent and 5 to 9 percent, respectively. H o w e v e r , the committee decided that the manager should respond more quickly to relatively high than to relatively low rates of growth in the aggregates. Specifically, the objective for the f u n d s rate was to be raised in an orderly fashion within its range if the two-month growth rates of M - l and M - 2 appeared to be significantly above the midpoints of the indicated ranges. On the other hand, the objective was to be lowered in an orderly fashion only if the two-month growth rates appeared to be approaching the lower limits of the indicated ranges. ANNOUNCEMENTS Issuance of statement about improvement of quality and public understanding of Federal Reserve regulations. Transfer of minutes of Federal Open Market Committee meetings to National Archives. Adoption of consumer affairs and civil rights compliance program for m e m b e r banks. Issuance of policy statement and revision of Regulation Y to implement the Change in Bank Control Act of 1978. (See Law Department.) Establishment of nationwide rating system for bank holding companies. Adoption of statement of policy concerning remote disbursement (abuse of the check collection system). On December 29, 1978, the committee modified the instruction to the manager to call for open market operations directed at maintaining the weekly average federal funds rate at about 10 percent or slightly above. Issuance of statement about the C o m m u nity Reinvestment Act by the four federal s u p e r v i s o r s of financial institutions responsible for enforcement. Revision of the money stock and related measures. Proposed statement of customer rights under the Right to Financial Privacy Act of 1978; proposed regulations to carry out the Depository Institution Management Interlocks Act; and proposed suspension of an amendment to Regulation Z concerning pledging of homes as security for open-end credit arrangements. Meeting of Consumer Advisory Council. 157 LAW DEPARTMENT A m e n d m e n t to Regulation Y, various rules and bank holding company and bank merger orders, and pending cases. A1 FINANCIAL AND BUSINESS STATISTICS A3 Domestic Financial Statistics A 4 6 Domestic Nonfinancial Statistics A54 International Statistics Changes in Board Staff. Admission of four banks to membership in the Federal Reserve System. A69 A70 145 RECORD OF POLICY FEDERAL OPEN ACTIONS MARKET OF THE COMMITTEE At the meeting on December 19, 1978, the committee agreed to instruct the manager to direct open market operations toward raising the federal f u n d s rate to 10 percent or slightly higher early in the period before the next regular meeting and subsequently to maintain the rate within GUIDE AND A72 TO TABULAR BOARD OPEN MARKET FEDERAL AND RELEASES OF GOVERNORS ADVISORY A73 PRESENTATION STATISTICAL AND COMMITTEE STAFF AND STAFF; COUNCILS RESERVE BANKS, BRANCHES, OFFICES A74 FEDERAL A76 INDEX A78 MAP RESERVE BOARD TO STATISTICAL OF FEDERAL RESERVE PUBLICATIONS TABLES SYSTEM Domestic Financial Developments in the Fourth Quarter of 1978 This report, which was sent to the Joint Economic Committee of the U.S. Congress, highlights the important developments in domestic financial markets during the fall and early winter. The pace of the nation's economic activity advanced considerably further during the fourth quarter, inflationary pressures remained strong, and early in the quarter the dollar continued under substantial downward pressure in foreign exchange markets. To control inflation and to help arrest the excessive depreciation of the dollar, monetary restraint was intensified. The rate of growth in bank reserves moderated in the fourth quarter and into early 1979, and the federal funds rate increased about P/2 percentage points from September to January. The discount rate was boosted a similar amount, including an increase of 1 percentage point initiated on November 1 as part of a joint Federal Reserve-Treasury program to support Interest rates NOTES: Percent per annum SHORT-TERM the dollar in foreign exchange markets. On that date, the Federal Reserve also announced a supplementary reserve requirement of 2 percentage points on large-denomination time deposits at member banks; this action was taken in an effort to curb the expansion of bank credit and to encourage borrowing by member banks from abroad, thereby strengthening the demand for dollar-denominated assets in Euromarkets. Short-term interest rates generally rose in line with the upward movements in "the federal funds and discount rates over the fourth quarter. The increases in Treasury bill rates, however, were held down somewhat by demands of foreign central banks that were investing the dollar proceeds of exchange market intervention. At the same time, rates on private short-term instruments were subject to especially strong upward pressures from substantial issuance of commercial paper and negotiable certificates of deposit (CDs); recently, these rates have declined somewhat from their year-end peaks. Monthly averages except for Federal Reserve discount rate and conventional mortgages (based on quotations for one day each month). Yields: U.S. Treasury bills, market yields on three-month issues; prime commercial paper, dealer ottering rates; conventional mortgages, rates on first mortgages in primary markets, unweighted and rounded to nearest 5 basis points, from Department of Housing and Urban Development; Aaa utility bonds, weighted averages of new publicly offered bonds rated Aaa, Aa, and A by Moody's Investors Service and adjusted to Aaa basis; U.S. government bonds, market yields adjusted to 20-year constant maturity by U.S. Treasury; state and local government bonds (20 issues, mixed quality), Bond Buyer. Federal Reserve Bulletin • February 1979 88 Reflecting the higher cost of funds, the bank prime rate was increased more than 2 percentage points, to 11% percent. Long-term rates moved about 1/2 of a percentage point higher during the fourth quarter, in response not only to the rise in short-term rates but also to the continuing high rate of inflation and the evidence of sustained strength in the economy. Stock prices fell sharply in late October, but reversed a portion of that decline over the balance of the quarter and in January as the dollar strengthened on foreign exchange markets and as corporations reported substantial increases in dividends and fourth-quarter earnings. Growth in M-1 slowed markedly in the fourth quarter and remained quite weak in January, reflecting in part shifts of funds out of demand deposits associated with the authorization of automatic transfers from savings accounts as well as the cumulative impact of higher interest rates on the demand for money. Growth in the interest-earning components of the broader measures of the money stock, M-2 and M-3, slowed substantially as the quarter progressed, although on average for the entire quarter their rates of expansion were little changed from the previous quarter. Time and savings deposits subject to fixed-rate ceilings declined, but sales of six-month money market certificates (MMCs) were quite strong, as was the issuance of large time deposits included in these aggregates. As a result of these somewhat disparate movements, all three major monetary aggre- Changes in selected monetary aggregates 1 Seasonally adjusted annual rate of change, in percent 1977 Item Member bank reserves2 Total Nonborrowed 1976 1977 1978 1978 Q4 Ql Q2 Q3 Q4 .6 .8 5.3 3.0 6.9 6.9 6.3 3.8 8.9 14.5 6.2 .6 8.6 6.6 3.1 5.4 5.8 12.6 10.9 12.7 7.1 10.2 7.9 9.3 9.8 11.7 10.1 11.7 7.3 5.3 8.5 9.4 10.5 10.5 7.4 6.6 7.9 10.1 10.4 11.5 6.6 5.0 7.0 8.1 10.2 10.0 9.2 7.2 8.4 8.4 10.6 9.8 8.1 6.0 9.9 10.4 10.1 10.5 4.4 2.5 1.1 9.4 9.4 10.3 Time and savings deposits at commercial banks—Total (excluding large negotiable CDs) Savings Other time Small time plus total savings 4 15.0 25.0 7.5 19.2 11.2 11.1 11.4 10.5 9.4 1.8 16.1 5.6 8.3 5.4 10.9 4.3 7 2 2.0 11.7 31 7.9 3.8 11.4 5.9 11.1 2.3 18.5 6.6 10.3 -.9 19.3 6.1 Deposits at thrift institutions 5 15.6 14.5 10.6 13.2 9.7 8.5 11.1 11.7 -19.1 -.8 16.4 14.8 8.0 10.8 14.5 12.3 23.1 22.7 17.3 14.8 6.6 5.4 1.2 4.5 8.4 5.5 1.8 5.2 6.6 3.6 3.8 .9 2.6 7.0 5.1 2.3 5.5 6.6 6.6 6.7 Concepts of money3 M-l M-l + M-2 M-3 M-4 M-5 MEMO (change in billions of dollars, seasonally adjusted): Large negotiable CDs at large banks All other large time deposits 6 Small time deposits Nondeposit sources of funds 7 1. Changes are calculated from the average amounts outstanding in each quarter. 2. Annual rates of change in reserve measures have been adjusted for changes in reserve requirements. 3. M-l is currency plus private demand deposits adjusted. M-l + is M-l plus savings deposits at commercial banks, NOW accounts at banks and thrift institutions, credit union share draft accounts, and demand deposits at mutual savings banks. M-2 is M-l plus bank time and savings deposits other than large negotiable CDs. M-3 is M-2 plus deposits at mutual savings banks and savings and loan associations and credit union shares. M-4 is M-2 plus large negotiable CDs. M-5 is M-3 plus large negotiable CDs. 4. Interest-bearing deposits subject to Regulation Q. 5. Savings and loan associations, mutual savings banks, and credit unions. 6. Total large time deposits less negotiable CDs at weekly reporting banks. 7. Nondeposit sources of funds include borrowings by commercial banks from other than commercial banks in the form of federal funds purchased, securities sold under agreements to repurchase, and other liabilities to own foreign branches (Eurodollar borrowings), loans sold to affiliates, loan repurchase agreements, borrowings from Federal Reserve Banks, and other minor items. Domestic Financial Developments, gates expanded in the fourth quarter at rates consistent with the long-run ranges set by the Federal Open Market Committee for the period from the third quarter of 1978 to the third quarter of 1979. For M-2 and M-3, these ranges were 6*/2 to 9 percent and IV2 to 10 percent, respectively. The growth of M - l , which the committee recognized would be affected by the introduction of automatic transfer services, was expected to fall within a range of 2 to 6 percent. Aggregate credit flows to nonfinancial sectors totaled around $390 billion at an annual rate in the fourth quarter, somewhat below the pace of the preceding three months. Public-sector borrowing declined, as the Treasury drew down its cash balances to finance a portion of the federal deficit and as bond issuance by state and local governments fell with a decrease in advance-refunding operations. Nonfinancial businesses stepped up their short- and intermediate-term borrowing, which more than offset a decline in offerings of long-term securities. Consumer credit expanded somewhat more rapidly than in the third quarter, and the volume of home mortgage financing also increased, spurred by greater lending at thrift institutions. MONETARY AND BANK AGGREGATES CREDIT Growth in M-l slowed markedly in the fourth quarter to an annual rate of 4V2 percent on a quarterly-average basis, down from an average of 8 percent over the first three quarters of the year. On a monthly basis, M-l was little changed on balance over the quarter, as moderate growth in October and December was about offset by a decline in November. The moderation in the growth of M-l occurred despite a pick-up in the pace of expansion of nominal gross national product, and thus the velocity of M - l rose at an annual rate of about 9VI percent in the fourth quarter, well above the 1XA percent rate of the preceding quarter. The principal cause for the slowdown in M - l growth apparently was the sustained rise over recent months in market interest rates, which encouraged the public to economize on non-in- Q4 1978 89 Changes in income velocitv of M-l and M-2 Seasonally adjusted annual rates. Money stock data are quarterly averages. terest-bearing assets. However, the slowing of growth in M - l during the fourth quarter and into early 1979 exceeded the amount implied by historical relationships among M - l , GNP, and interest rates. Some, but not all, of the greater slowdown can be explained by shifts of funds at commercial banks from demand deposits to household savings accounts eligible for automatic transfer services (ATS), authorized on November 1. Transfers to ATS savings accounts are estimated to have reduced growth in M - l for the quarter as a whole about 1 percentage point at an annual rate. By the end of December, more than a third of all commercial banks were offering ATS savings accounts, and the balances outstanding in such accounts were estimated to total more than $3 billion. Something over half of these balances were thought by the banks surveyed to have been shifted from demand deposit accounts. Despite transfers into ATS savings accounts, total savings deposits at commercial banks declined nearly 1 percent (annual rate) in the fourth quarter—the first quarterly decline since early 1970—as the spread between yields on Treasury bills and the maximum allowable yield on savings deposits reached a record AV2 percentage points by the end of the year. The 90 Federal Reserve Bulletin • February 1979 Treasury yield curves and deposit rate ceilings Percent per annum + Maximum yield on "money market" time deposits at thrift institutions. * Maximum yield on "money market" time deposits at commercial banks. Data reflect annual effective yields. Ceiling rates are yields derived from continuous compounding of the nominal ceiling rates. Market yield data are on an investment yield basis. weakening in savings flows was concentrated in accounts held by individuals and nonprofit institutions. With the drop in savings deposits, the newly defined monetary aggregate, M-1 + , grew at a rate of only 2Vi percent, down from 6 percent in the third quarter. M-l + , which has been defined as M-l plus all savings accounts at commercial banks and checkable deposits at thrift institutions, serves as a supplemental measure of transactions balances during the period of adjustment to ATS accounts. The slowdown in the rate of expansion of M-2 was more moderate than the deceleration in the narrower monetary aggregates; growth in total small-denomination time deposits picked up somewhat in the fourth quarter to an annual rate of 6V2 percent, while the rate of increase of large time deposits included in M-2 slowed only slightly. The stronger growth of small time deposits was attributable to large net inflows of funds to MMCs at commercial banks, the ceiling rate on which varies weekly with the rate set in auctions of six-month Treasury bills; the growth in these accounts amounted to $1314 billion, not seasonally adjusted, compared with $1V2 billion in the third quarter. Even with the maturing in December of more than $2 billion of MMCs issued by commercial banks in June, when such accounts were first authorized, banks maintained strong net gains in these deposits. Meanwhile, other small time deposits maturing in less than four years continued to decline during the fourth quarter, while small time deposits with longer maturities were essentially unchanged after having risen slowly over the preceding three months. Outflows from time accounts subject to fixed regulatory interest rate ceilings reflected further increases in market rates above such ceilings, which caused shifting of funds to MMCs as well as to market instruments. By the end of the year, MMCs accounted for more than 534 percent of all small-denomination time and savings deposits at commercial banks. Although a substantial portion of MMC balances undoubtedly represents deposits that would have been held in other types of commercial bank accounts, the MMC also has enabled banks to retain funds that might otherwise have been diverted to market instruments. The relative attractiveness to small savers of financial instruments ottering market rates of interest was evidenced by a rise in noncompetitive tenders for Treasury securities and a sharp increase in net sales of shares in money market mutual funds. Issuance of MMCs also rose at savings and loan associations and mutual savings banks, boosting deposit growth at thrift institutions in the fourth quarter to an annual rate of 113A percent on a quarterly-average basis, up from 11 percent the preceding quarter. As a result, expansion of M-3 fell only slightly on average from its pace in the third quarter. However, growth of thrift deposits slowed in each month of the quarter, dropping from almost 14 percent in September to an estimated 9!/2 percent in December. During the final three months of the year, thrift institutions attracted $28 billion of new MMCs compared with $181/2 billion in the third quarter. Like commercial banks, these institutions evidently had little difficulty rolling over maturing MMCs at prevailing rates in December, and by year-end MMCs accounted for more than 9 percent of total deposits at savings and loan associations and mutual savings banks. Domestic Financial Developments, In the face of reduced growth in the fourth quarter in the deposits included in the major monetary aggregates, banks stepped up their use of managed liabilities—both nondeposit sources of funds and large-denomination time deposits not subject to rate ceilings—in order to maintain rapid expansion of loan portfolios. Banks tapped nondeposit sources for $6% billion in the fourth quarter compared with $2XA billion in the preceding three months. These funds consisted largely of security repurchase agreements and federal funds purchased from nonbank sources. Gross Eurodollar borrowings from foreign branches also rose; but because banks increased claims on such branches by a like amount, the domestic banking system on balance acquired only a small amount of funds from foreign branches. Large banks issued $51/2 billion of negotiable CDs—not included in M-2—up from the net rise of $2l/z billion in the preceding three months. Total managed liabilities as a percent of net assets at large banks increased over the fourth quarter, nearing the previous peak reached in 1974. In addition to the traditional nondeposit sources of funds, on November 2 banks began to acquire Treasury note balances under the new tax-and-loan-account program. During the final two months of the year, balances in such accounts averaged more than $6 billion. Growth in total loans at commercial banks picked up slightly in the fourth quarter, primarily reflecting increased lending to consumers. The expansion of real estate loans nearly matched the strong pace of the previous two quarters, while that of business loans, which had held at the third-quarter pace in October and November, ceased in December. To help finance their loan expansion, banks allowed holdings of Treasury securities—particularly those maturing in one year or more—to fall sharply, while the growth of their portfolios of other securities moderated. Over all, the expansion of bank credit decelerated to an annual rate of 6 percent in the fourth quarter. BUSINESS FINANCE Both capital expenditures and internally generated funds at nonfinancial corporations increased slightly in the fourth quarter, leaving Q4 1978 91 the financing gap at about its third-quarter level. Businesses reduced their borrowing in bond markets in the fourth quarter but continued to make substantial use of mortgages as a source of long-term credit. Despite a reduction in the growth of business loans at commercial banks, total short- and intermediate-term business credit accelerated due to a sharp rise in issuance of commercial paper and a near-record increase in borrowing from finance companies. Much of the increase in finance company loans to businesses reflected automotive-related credit, including financing of dealer inventories of automobiles and retail sales of commercial vehicles. The reduced lending to business by commercial banks was accompanied by a cumulative increase of 2 percentage points in the prime rate during the October-December period, bringing the rate close to the record 12 percent set in 1974. In addition, data available for large banks indicate that nonprice loan terms and standards of creditworthiness tightened. Large banks reportedly also became less aggressive in the fourth quarter in granting below-prime loans and, in light of uncertainty surrounding future interest rates, in making fixed-rate loans. Components of bank credit Major categories of bank loans Change, billions of dollars TREASURY SECURITIES OTHER SECURITIES n . n n n TOTAL LOANS Q4 Q1 1977 Q2 Q3 1978 Q4 Q4 Q1 1977 Q2 Q3 1978 Q4 Seasonally adjusted. Total loans and business loans adjusted for transfer between banks and their holding companies, affiliates, subsidiaries, or foreign branches. 92 Federal Reserve Bulletin • February 1979 Business loans and shortand intermediate-term business credit Seasonally adjusted annual rate of change, in percent Business loans at banks 1 Period Total Excluding bank holdings of bankers acceptances Total short- and intermediate-term business credit 2 1975—Ql.. Q2.. Q3.. Q4.. -5.2 -8.7 -2.4 -7.4 -9.0 -2.9 -2.3 -4.4 -8.9 -.5 -3.9 1976—Ql.. Q2.. Q3.. Q4.. -6.9 1.6 5.3 10.6 -6.6 2.1 2.8 9.7 -1.2 5.9 2.3 12.8 1977—Q1.. Q2.. Q3.. Q4.. 11.2 12.8 11.2 11.7 13.3 12.9 10.4 12.6 14.6 16.1 10.4 16.4 1978—Ql.. ' 15.3 Q2.. 17.4 Q3.. 10.3 Q4.. 6.7 16.8 17.9 10.3 8.6 14.8 17.4 9.1 15.5 1. Based on data for last Wednesday of month, adjusted for outstanding amounts of loans sold to affiliates. 2. Short- and intermediate-term business credit is business loans at commercial banks excluding bank holdings of bankers acceptances plus nonfinancial company commercial paper and finance company loans to businesses measured from end of quarter to end of quarter. Gross offerings of bonds and stocks by both nonfinancial and financial corporations slowed to a seasonally adjusted annual rate of $41 billion, down from $57 billion in the third quarter and about in line with the low levels recorded in the first half of 1978. In the public bond market, offerings by industrial corporations declined from already moderate levels, as major corporations with relatively high bond ratings (Aa and above) refrained from offering new issues. Such firms appear to have been reluctant to issue call-protected, long-term debt at the relatively high nominal interest rates prevailing in 1978; instead, they relied heavily on short-term borrowing, further eroding their liquidity positions. While reducing their public bond offerings in the fourth quarter, public utilities, especially communications concerns, continued to account for a large portion of total new issues. Financial corporations, on the other hand, increased their public bond offerings moderately during the fourth quarter, mainly owing to a rise in sales of securities by finance companies. Private placements of corporate bonds, mostly issues of manufacturing and industrial concerns with ratings less than Aa, are estimated to have decreased somewhat from the relatively strong pace of other recent quarters. Nonetheless, the volume of bond issuance by lowerrated corporations remained sizable by historical standards, reflecting in part the availability of loanable funds at major institutional investors such as life insurance companies and pension funds, many of which traditionally purchase the securities of such corporations. In addition, the continued strength in issuance of privately placed corporate bonds may have been encouraged by the still relatively low risk premiums associated with these securities. The spread between lower-rated (Baa) and higherrated (Aaa) corporate bonds remained relatively narrow during the fourth quarter, despite the upward movement in long-term interest rates in 1978. Yields on corporate bonds increased appreciably, on balance, over the fourth quarter. New issues of Aaa-rated utility bonds yielded 9.55 percent in early January, almost 3/4 of a percentage point more than at the end of September. Nevertheless, corporate bond yields reGross offerings of new security issues Seasonally adjusted annual rates, in billions of dollars 1977 Type of security Corporate, total Bonds Publicly ottered Privately placed.. Stocks , Foreign State and local government p Preliminary, e Estimated. 1978 Q4 Ql Q2 Q3,Jf Q4< 59 43 24 19 16 39 32 16 16 7 46 36 19 17 10 57 45 28 17 12 41 33 19 14 8 5 5 12 6 5 46 44 50 53 43 Domestic Financial Developments, mained below their 1974 highs, in contrast to rates paid on long-term Treasury securities, which surpassed record highs early in the quarter. Stock prices generally declined in the fourth quarter, following the pronounced gains recorded earlier in the year. In late October, stock prices moved sharply lower in apparent reaction to further weakness in the foreign exchange value of the dollar, heightened uncertainty about the outlook for inflation and economic activity, and additional increases in interest rates. Following the announcement on November 1 of the joint Treasury-Federal Reserve program to stem the decline in the foreign exchange value of the dollar, stock prices stabilized and even reversed part of the decline recorded earlier in the quarter. Stock prices generally moved upward in early January, in large part due to the strengthening of the dollar in foreign exchange markets, the continued robust growth in economic activity, and the unexpected gains in profits and dividends reported by several major corporations. After a record expansion in the previous quarter, margin credit contracted in the fourth quarter—its first quarterly decline in four years. The decline was attributable in part to liquidation of stock holdings to meet margin calls in Q4 1978 93 the wake of the substantial drop in stock prices early in the quarter. The fall in stock prices and the increase in corporate earnings further depressed price-earnings ratios for most corporations from already low levels. As a result, total equity issuance declined markedly in the fourth quarter. GOVERNMENT FINANCE Gross bond sales by state and local governments declined significantly in the fourth quarter from the near-record level of the third quarter. The large decrease in the volume of tax-exempt offerings reflected a marked drop in advance refundings after September 1, the effective date of new Treasury Department regulations that reduced the attractiveness of these operations. The decline in such issues also may be attributable to the increased level of tax-exempt yields. State and local governments did, however, raise a larger volume of new capital over the period. As in the third quarter, sales of securities by various state and local housing authorities accounted for a sizable portion of the new issues. Property-casualty insurance companies and commercial banks continued to be the major purchasers of tax-exempt offerings. Federal government borrowing and cash balance Quarterly totals, not seasonally adjusted, in billions of dollars Item Treasury financing Budget surplus, or deficit { - ) . . . . . , . , . . . . . . . Off-budget deficit 1 Net cash borrowings, or repayments ( - ) Other means of financing2 Change in cash balance Federally sponsored credit agencies, net cash borrowings 3 1977 Q2 Q3 Q4 Ql Q2 Q3 Q4° -18.7 -4.3 17.6 2.7 -2.6 8.6 .1 -1.1 -.4 7.2 -12.2 -4.9 19.5 4 .4 2.84 -28.8 -1.3 20.7 2.6 -6.8 -25.8 -3.7 20.8 2.8 -5.9 14.0 -2.2 2.5 -3.2 11.1 -8.1 -3.1 15.1 1.0 4.9 -23.8 -.1 15.2 2.6 -6.1 .7 3.0 2.0 4.5 6.5 6.1 5.2 1. Includes outlays of the Pension Benefit Guaranty Corporation, Postal Service Fund, Rural Electrification and Telephone Revolving Fund, Rural Telephone Bank, Housing for the Elderly or Handicapped Fund, and Federal Financing Bank. All data have been adjusted to reflect the return of the ExportImport Bank to the unified budget. 2. Checks issued less checks paid, accrued items, and other transactions. 3. Includes debt of the Federal Home Loan Mortgage Cor- 1978 Ql 1.8 poration, Federal Home Loan Banks, Federal Land Banks, Federal Intermediate Credit Banks, Banks for Cooperatives, and Federal National Mortgage Association (including discount notes and securities guaranteed by the Government National Mortgage Association). 4. Includes $2.5 billion of borrowing from the Federal Reserve on September 30, which was repaid October 4 following enactment of a new debt ceiling bill. e Estimated. 94 Federal Reserve Bulletin • February 1979 Interest rates on state and local obligations rose appreciably in the fourth quarter. The Bond Buyer index of tax-exempt bond yields, at 6.58 percent in early January, was almost 1/2 of a percentage point above its level at the end of September. Treasury borrowing during the fourth quarter remained at about the third-quarter level of $15 billion (not seasonally adjusted), despite a relatively large increase in the budget deficit. In contrast with the third quarter, a significant portion of the deficit was financed in the fourth quarter by drawing down Treasury cash balances. Issuance of nonmarketable Treasury obligations picked up sharply in the fourth quarter despite the reduction in purchases of such securities by state and local governments associated with the decline in advance refunding operations. The pick-up reflected a substantial increase in acquisitions by foreign official accounts with the proceeds from dollar-support operations in foreign exchange markets. The Treasury also issued $1.6 billion of obligations denominated in German marks, sold mainly to German financial institutions, as part of the effort to stem the decline in the foreign exchange value of the dollar. In the open market, the Treasury continued to rely on coupon securities to meet its financing needs in the fourth quarter. During the four quarters of 1978, the outstanding supply of Treasury bills remained about unchanged, on balance, at $161 billion, while coupon issues increased almost $27 billion. However, most of the coupon issues had maturities of two to four years; as a result, the average maturity of privately held marketable Treasury debt, which had been three years and four months at the end of 1978, lengthened only five months during the year. In the fourth quarter, foreign official accounts also acquired a sharply increased volume of marketable Treasury issues; net purchases of these issues by all other investors were relatively small. Net borrowing by federally sponsored credit agencies, though less than the strong pace of the third quarter on a seasonally unadjusted basis, remained quite sizable during the fourth quarter. In contrast with the borrowing in the third quarter, the major proportion of this financing was long term. As in the preceding three quarters, most of the borrowing was related to activity of sponsored credit agencies in the residential mortgage market. The Federal National Mortgage Association and the Federal Home Loan Bank System both borrowed heavily during most of the quarter to obtain funds to be channelled to mortgage lenders, and to a lesser extent, to rebuild their holdings of liquid assets. The increase in Treasury bill rates over the fourth quarter was only slightly less than that in the federal funds rate. The pick-up in Treasury coupon yields, while generally in line with yield increases on private longer-term securities, remained well below the rise in shorter-term market rates. In consequence, the term structure of yields on Treasury securities continued to exhibit the steeply humped pattern that had emerged at the end of the third quarter, with the peak still centering on the 12-month maturity area. For maturities beyond five years, the curve remained essentially flat. The hump in the yield curve may have indicated market expectations of a turning point in late 1979 in the business and the interest rate cycles. MORTGAGE AND CONSUMER CREDIT Net mortgage lending moved higher during the quarter, exceeding even its previous peak in the fourth quarter of 1977. The flow of funds into residential mortgages picked up moderately, to its most rapid rate of the year. Commercial and other nonresidential mortgage lending continued at the relatively high pace of the third quarter, reflecting principally the sustained strength in commercial construction activity. Commercial banks maintained their mortgage lending in the fourth quarter at about the rapid pace recorded in the previous two quarters, and life insurance companies acquired substantial amounts of mortgages, as they had earlier in the year. The sustained strength in mortgage acquisitions by these diversified financial inter- Domestic Financial Developments, Net change in mortgage debt outstanding Seasonally adjusted annual rates, in billions of dollars 1977 1978 Q4 Q2 Q3 1 Q4e Change Ql Total 152 135 142 141 144 By type of property Residential Other1 117 100 35 35 105 103 37 38 106 38 37 48 7 10 8 31 36 52 7 9 6 34 By type of holder Commercial banks Savings and loans Mutual savings banks Life insurance companies FNMA2 and GNMA Other 32 62 8 9 •;* 41 27 54 7 6 6 35 36 52 6 9 13 26 1. Includes commercial and other nonresidential as well as farm properties. 2. Includes mortgage pools backing securities guaranteed by the Government National Mortgage Association, Federal Home Loan Mortgage Corporation, or Farmers Home Administration, some of which may have been purchased by the institutions shown separately. r Revised. e Estimated. * Less than $500 million. mediaries can be attributed in part to the continued robust demand for commercial and other nonresidential mortgages, for which they are major lenders, as well as to the relative attractiveness of mortgage yields. In addition, the reduced volume of private offerings of corporate bonds permitted insurance companies to channel increases in cash flows into mortgage markets. The bulk of the rise in mortgage lending in the fourth quarter occurred at savings and loan associations, in lagged response to the significant pick-up in deposit flows following the introduction of the money market certificate on June 1. Despite increased net sales of six-month money market certificates during the fourth quarter, deposit growth at savings and loan associations (measured on an end-of-period basis) slowed somewhat from the third-quarter pace, though it remained strong relative to deposit flows in the first half of the year. Even though deposit flows moderated during the quarter, savings and loans increased their mortgage lending by relying more heavily on borrowed funds and by reducing their liquidity. On a seasonally adjusted basis, these associations Q4 1978 95 increased the rate at which they were taking down advances from Federal Home Loan Banks in the fourth quarter. In addition, at insured savings and loans, the average liquidity ratio— cash and liquid assets divided by the sum of short-term borrowings and deposits—declined during the quarter for the first time since the introduction of the variable-ceiling certificates. However, the ratio remained significantly above the minimum liquidity requirement. The weakening in deposit growth also encouraged a leveling-off in mortgage commitments outstanding at these associations toward the year-end following a pick-up early in the quarter. Issuance of mortgage pass-through securities guaranteed by the Government National Mortgage Association (GNMA) increased further in the fourth quarter, while purchases by the Federal National Mortgage Association (FNMA) of government-underwritten home loans continued to decline somewhat. This pattern reflected in part the sustained positive spread between prices of GNMA-guaranteed, pass-through securities and prices available to originators of governDeposits at savings and loans Annual rate of change, perce 16 8 Q4 1977 Ql Q2 Q3 1978 0 Seasonally adjusted. Quarterly averages at annual rates. ment-guaranteed mortgages under outstanding FNMA mortgage purchase commitments. Combined, the volume of GNMA-guaranteed, passthrough security issues plus FNMA purchases of government-underwritten home loans increased significantly in the fourth quarter, to its highest level of the year. The average interest rate on new commitments at savings and loan associations for con- 96 Federal Reserve Bulletin • February 1979 ventional home mortgages with 80 percent loan-value ratios increased more than 1/2 of a percentage point in the fourth quarter, about in line with increases in other long-term interest rates. The rise in mortgage rates may be attributable in part to renewed supply pressures resulting from the slackening in deposit flows at thrift institutions in the face of continued robust demand for mortgage credit. Consumer installment credit outstanding expanded at an annual rate of just over 18 percent during the fourth quarter, slightly more than the strong expansion in the third quarter, but somewhat slower than that of the first half. The moderate increase in credit extensions during the fourth quarter was about offset by a pick-up in debt liquidations. Sales of autos at higher prices remained a significant factor in the growth of installment credit. Interest rates on automobile credit increased slightly over the quarter, and other credit terms, such as the average loan maturity at commercial banks and the downpayment requirements at finance companies, also continued to tighten. • 97 Check Processing at Federal Reserve Offices James M. Brundy, David B. Humphrey, and Myron L. Kwast of the Financial Studies Section, Division of Research and Statistics, prepared this article. In fulfilling its responsibilities for ensuring an efficient and effective payments mechanism for the nation, the Federal Reserve System operates a number of payments-mechanism facilities. These facilities include 48 check-processing centers that serve as regional and national clearinghouses for checks deposited at the Federal Reserve by commerc al banks. Federal Reserve Banks have acted as check clearinghouses since shortly after the enactment of the Federal Reserve Act in 1913. Today these Federal Reserve facilities provide the infrastructure for the national check-clearing system, ensuring the availability of a basic level of check-payments services nationwide. During 1977 the Federal Reserve Banks processed more than 13 billion commercial check items with a total dollar value in excess of $6.4 trillion. The clearing of paper checks represents only one of the payments-mechanism services provided by the Federal Reserve. Two others are a secure wire transfer service for the movement of funds between member banks, and the clearing of check-like deposit items electronically on behalf of automated clearinghouse (ACH) associations. More than 24 million wire transfers of funds, primarily bank-to-bank transactions, with a dollar value in excess of $48 trillion, were processed by the Federal Reserve System in 1977. ACH clearings totaled around $40 billion, represented by 106 million items. Although checks are now the predominant method of funds transfer used by the general public, ACH clearings are an innovative, potentially NOTE. Carol K. Keyt performed the data manipulations for this article. lower-cost, and rapidly growing substitute for check-clearing techniques. Among other purposes, the Federal Reserve check-clearing facilities were initially established to eliminate the practice of "nonpar b a n k i n g , " under which a percentage of the face value was deducted when a check was paid. Many banks sought to avoid these remittance charges and other fees; the result was that checks were collected through circuitous routes, making the national check-collection system slow and cumbersome. Nonpar banking was therefore thought to impede commerce and economic growth. Checks cleared by the Federal Reserve System must be paid at face value, and this requirement has contributed to the virtual disappearance of nonpar banking. 1 Checks to be cleared through the Federal Reserve initially reach a Federal Reserve office from a commercial bank in one of two ways. 2 First, member, and in some cases nonmember, banks may deposit items directly with a Federal Reserve office. 3 Second, member and nonmember banks may first send their checks to their correspondent banks, which, after some preliminary processing, deposit them with the 1 A more detailed overview of this issue is given in "Federal Reserve Operations in Payment Mecha- nisms: A Summary," FEDERAL RESERVE BULLETIN, vol. 62 (June 1976), pp. 481-89. The legal basis for Federal Reserve participation in check clearing is also presented. 2 For simplicity, direct U . S . government deposits are ignored, and indirect deposits, which pass through one or more correspondent banks, are shown here passing through only one bank. 3 Nonmember banks are permitted to deposit directly only items eligible for processing by regional checkprocessing centers (RCPCs); other check-processing services are provided indirectly to nonmember banks (and other financial institutions) through member correspondent banks. The RCPC program, begun in the early 1970s, was aimed at increasing the proportion of checks cleared on an overnight basis. 98 Federal Reserve Bulletin • February 1979 Check-clearing mechanism Federal Reserve. 4 Thus, the Federal Reserve acts as a correspondent bank for commercial banks. The check-clearing mechanism is illustrated schematically in the diagram above. If party B receives a check from party A, drawn on a local bank in the Dallas Federal Reserve Bank service area (zone), and deposits that check in the same local bank A.upon which it is drawn, the check will not enter clearing channels of either correspondent banks or the Federal Reserve. This transaction is represented by the dotted lines in the left half of the diagram. From the bank's point of view, the deposited check is drawn on itself, or " o n u s , " and no other bank need be involved. However, if parties A and B maintain accounts at two different Dallas banks, the item can be cleared in two ways. In the first, represented by solid lines in the diagram, bank B, which receives the deposited check drawn on bank A, participates in a local clearing arrangement in which banks A and B exchange checks drawn upon one another, posting them to accounts they hold with one another. In the second, shown by dashed lines, bank B redeposits 4 Because the Federal Reserve requires some preparatory work before accepting items for deposit, many smaller banks (both members and nonmembers) choose to obtain access to check-collection services through correspondent banks. the check at the local Federal Reserve Bank, which will clear the item by crediting the reserve account of bank B (or its agent), presenting the check for payment to bank A, and debiting that reserve account. These procedures concern locally deposited and locally cleared checks; these checks do not move between Reserve Banks. A similar sequence occurs when party C, whose bank is in New York, writes a check to party B. Party B deposits the check in Dallas bank B and again sets in motion one of two clearing arrangements: (1) bank B can send the check directly to the New York Federal Reserve Bank for collection (presentment) at bank C (creating an interzone "direct s e n d " item, represented by a solid line in the right half of the diagram); or (2) bank B can redeposit the check (now shown by a dotted line) with the Dallas Federal Reserve Bank which, in turn, sends it to the New York Federal Reserve Bank for presentment at bank C (creating an interzone deposit between Federal Reserve Banks). 5 In May 1978 the Federal Reserve conducted a comprehensive survey of the volume of items 5 Another method, bank B sending the check directly to bank C in New York, is rarely used. Only for checks written for exceptionally large amounts could the extra expense of this clearing method be offset by the interest earned during the few hours saved by this more rapid clearing procedure. Check Processing and the amount of funds cleared through its check-processing function. 6 Each of the 48 Federal Reserve check-processing offices reported the total number and dollar value of checks deposited by type of item and class of depositor. During May 1978, the system cleared a daily average of more than 51 million items, with a dollar value of nearly $22 billion. The results of the May 1978 survey are presented in tables 1 through 7. In the tables, deposits 6 May was selected as the survey month because previous studies had indicated that check data for April and May seem to be relatively free of seasonal distortions. See R . William Powers, " A Survey of Bank Check V o l u m e s , " Journal of Bank Research, vol. 6 (Winter 1976), pp. 245-56. at Federal Reserve 99 Offices at individual Reserve Banks and Branches and regional check-processing centers (RCPCs) have been aggregated to give national (system) totals and totals for each Federal Reserve District. LOCAL AND INTERZONE DEPOSITS Of the overall total, nearly two-thirds of the items deposited were local deposits (from banks and government agencies within a Federal Reserve office service area); the balance were interzone or interoffice deposits (from institutions outside the service area). As shown in table 1, column 3, for each of the 12 Federal Reserve Districts, local deposits accounted for 1. Number of items deposited at Federal Reserve Banks Daily average, May 1978 Number of items Federal Reserve District Percent of total Average annual growth in number, 1973-77 (percent) Local Interzone Local (1) (2) (3) (4) (5) Boston New York ... Philadelphia .. Cleveland Richmond Atlanta 2,830,287 3,137,136 1,724,773 1,927,710 2,571,922 4,779,040 1,334,394 2,661,396 808,632 1,477,808 1,882,581 1,334,578 68.0 32.0 45.9 39.9 43.4 42.3 8.4 Chicago St. Louis Minneapolis .. Kansas City .. Dallas San Francisco 5,470,145 1,712,159 1,752,448 3,184,980 1,751,441 1,742,520 2,817,603 1,097,163 751,430 1.448.909 1,494,405 1.725.910 32,617,742 18,834,809 System 54.1 68.1 Interzone 8.0 21.8 3.1 5.4 7.5 9.1 66.0 61.0 70.0 68.7 54.0 50.2 34.0 39.0 30.0 31.3 46.0 49.8 8.4 4.4 5.6 6.3 6.7 9.1 63.4 36.6 7.3 56.6 57.7 78.2 2. Dollar value of items deposited at Federal Reserve Banks Daily average, May 1978 Federal Reserve District Local deposits Total Average (thousands of dollars) (dollars) Interzone deposits Total Average (thousands (dollars) of dollars) Percent of total Local Interzone (1) (2) (3) (4) (5) (6) Boston New York Philadelphia Cleveland Richmond Atlanta 759,362 1,527,717 531,197 572,558 724,345 1,567,345 268 487 308 297 282 328 713,833 1,959,583 420,018 976,199 1,190,893 928,988 535 736 519 661 633 696 51.6 43.8 55.8 37.0 37.8 62.8 48.4 56.2 44.2 63.0 62.2 37.2 Chicago St. Louis Minneapolis Kansas City Dallas San Francisco 1,537,001 423,804 405,532 822,141 549,715 613,915 281 248 231 258 314 352 2,262,395 580,852 428,966 801,406 591,838 1,071,519 803 529 571 553 396 621 40.5 42.2 48.6 50.6 48.2 36.4 59.5 57.8 51.4 49.4 51.8 63.6 10,073,983 309 11,926,490 633 45.8 54.2 System 100 Federal Reserve Bulletin • February 1979 50 percent or more (up to 78 percent) of all items deposited at Federal Reserve offices. Federal Reserve offices in the Atlanta and San Francisco Districts experienced the highest growth in check volume from 1973 to 1977 (9 percent), while the Philadelphia District had the lowest (3 percent). Over all, system check volume grew at a 7 percent average annual rate for the period (column 5). Although more than 63 percent of the items deposited at Federal Reserve offices were local items (table 1, column 3), the dollar value of these items totaled less than 50 percent of the value of all deposits for eight Federal Reserve Districts (table 2, column 5): the average value of a locally deposited check, $309, is substantially less than the average value of checks deposited interzone, $633 (columns 2 and 4). The New York and Chicago Districts have the largest average dollar value for an interzone deposit item. CLASSES OF DEPOSITORS AND DEPOSIT ITEMS About 28 percent of all deposits are direct sends—that is, received from member banks in another Federal Reserve District (table 3, col- 3. Percentage distribution of number of items deposited at Federal Reserve Banks, by type of depositor1 Daily average, May 1978 Local deposits Federal Reserve District Member banks Interzone deposits Nonmember banks Government Federal Reserve offices Directsending banks Total (1) (2) (3) (4) (5) (6) Boston New York Philadelphia Cleveland Richmond Atlanta 50.6 52.3 63.2 52.7 41.3 58.6 17.2 1.6 2.6 2.8 16.1 18.2 0 0 2.3 0 0 0 7.3 9.0 6.0 10.2 7.1 6.5 24.7 36.9 25.5 34.1 34.3 15.2 100.0 100.0 100.0 100.0 100.0 100.0 Chicago St. Louis Minneapolis Kansas City Dallas San Francisco 58.7 56.7 54.6 68.1 48.7 34.7 6.9 3.3 14.8 .3 3.8 13.9 0 .9 0 .3 0 1.0 8.0 9.6 8.9 7.6 8.9 , 10.6 26.0 29.4 20.9 23.5 36.7 38.9 100.0 100.0 100.0 100.0 100.0 100.0 53.9 8.6 .3 8.1 28.3 100.0 System Details may not total 100.0 because of rounding and reporting errors by some banks. 4. Percentage distribution of number of items deposited at Federal Reserve Banks, by type of deposit1 Daily average, May 1978 Local deposits Federal Reserve District Interzone deposits Total RCPC City Country Going interzone Boston New York Philadelphia Cleveland Richmond Atlanta (1) 57.5 36.6 50.9 34.1 46.7 62.1 (2) 5.0 11.1 3.7 2.9 3.8 4.4 (3) 1.2 2.3 1.9 0.0 1.0 0 (4) 2.8 4.1 5.9 11.1 6.1 11.7 (5) 1.3 .1 5.7 8.4 .2 0 (6) 23.4 12.7 .1 27.7 36.9 16.0 (7) 5.4 31.6 12.5 15.7 4.4 5.8 (8) 3.3 1.5 19.3 0 .9 0 (9) 100.0 100.0 100.0 100.0 100.0 100.0 Chicago St. Louis Minneapolis Kansas City Dallas San Francisco 46.0 28.7 16.8 20.4 37.5 44.1 8.3 16.6 24.1 15.9 7.3 1.2 5.2 10.2 17.3 22.5 8.1 0 6.4 4.4 8.7 9.6 1.0 3.6 .1 1.1 3.1 .2 0 1.4 16.6 15.1 12.4 5.9 15.9 43.5 13.5 15.7 8.3 13.6 20.9 6.3 3.9 8.2 9.3 11.7 9.3 0 100.0 100.0 100.0 100.0 100.0 100.0 41.9 8.3 5.3 6.5 1.4 18.8 13.1 4.7 100.0 System 1 Details may not total 100.0 because of rounding. Unsorted RCPC City Country Check Processing umn 5). Federal Reserve offices also send items to other Federal Reserve offices, but these interzone deposits account for only about 8 percent of total deposits and less than one-third of all interzone deposits. Member banks account for 86 percent of all local deposits and 78 percent of all interzone deposits, for an average of 82 percent of total deposits made at Federal Reserve offices. Direct U.S. government deposits of checks at Federal Reserve banks are very small. Nonmember bank deposits, although restricted to RCPCs, account for 9 percent of total deposits. The distance of the institution upon which the deposited items are drawn from an RCPC or a district central city determines when the depositing bank will have use of the funds deposited at a Federal Reserve office. Table 4 shows the proportion of items deposited falling into various categories of " f u n d s availability." The funds-availability schedule established by the Federal Reserve for its check-clearing operations is closely related to the time it normally takes to process, transport, and present checks for payment at drawee financial institutions. "Regional check-processing center" and " c i t y " deposit items are drafts on financial at Federal Reserve Offices 101 institutions in the same locality as, respectively, the RCPCs and Federal Reserve offices; delivery is typically made by courier (under contract with the Federal Reserve). Due to their proximity to a Federal Reserve office, depositors of these items have overnight availability of funds if they meet cut-off times for deposits. Depositors of " c o u n t r y " items may have to wait one day or more before the Federal Reserve will credit their accounts and thus make funds available. Country items are drawn on institutions remote from a Federal Reserve office, and delivery may be made through the U.S. Postal Service. Locally deposited items going to another Federal Reserve office—items going interzone—also have funds availability deferred one day or more, depending upon whether they are drawn on city, RCPC, or country financial institutions. Interzone items are often transported between Federal Reserve offices by contract air carrier. Unsorted deposit items, the smallest category in table 4, have undergone the least predeposit processing. Currently, depositing institutions may not deposit more than 5,000 unsorted items each day at a Federal Reserve office. Of the various deposit categories in table 4, 5. Percentage distribution of number of items deposited at Federal Reserve Banks, by size of bank 1 Daily average, May 1978 Size of bank (de posits in millions of dollars) Federal Reserve District 100500 5001,000 More than 1,000 Nonbank depositors 2 Total 0-10 10-50 50100 Boston New York Philadelphia Cleveland Richmond Atlanta .6 .1 .2 .2 .4 1.6 8.7 3.4 2.9 7.7 11.2 15.9 9.4 3.8 3.2 6.8 4.7 11.0 27.3 17.8 10.4 16.9 21.0 29.0 8.0 23.7 18.8 19.3 16.5 14.6 38.4 41.8 55.9 38.9 38.0 19.9 7.6 9.4 8.6 10.2 8.2 8.0 100.0 100.0 100.0 100.0 100.0 100.0 Chicago St. Louis Minneapolis Kansas City Dallas San Francisco .6 .6 3.5 .2 .4 1.0 9.2 7.8 24.4 6.0 5.2 9.9 9.4 5.7 11.2 6.5 5.4 3.2 27.7 15.4 21.5 31.6 18.3 13.8 9.0 21.0 3.6 33.1 13.2 12.0 35.8 38.1 25.9 14.4 46.6 47.5 8.3 11.4 9.9 8.2 10.9 12.6 100.0 100.0 100.0 100.0 100.0 100.0 .7 9.2 7.0 22.4 16.1 35.8 8.8 100.0 System Memo Demand deposits held by commercial banks at other commercial banks as a percent of total "due to" deposits (member banks only, March 31, 1978) .1 .6 1.1 10.4 8.0 Details may not total 100.0 because of rounding. Includes deposits by Federal Reserve offices, government, and unidentified depositors. 79.9 0 100.0 102 Federal Reserve Bulletin • February 1979 R C P C items form the largest, accounting for 61 percent of all items deposited (both locally and interzone). The number of city items accounts for 21 percent of total check volume. SIZE CLASS OF BANK DEPOSITORS Not surprisingly, the largest banks (including the largest correspondent banks, measured by share of " d u e t o " deposits shown in the last line of table 5) account for the largest number of items deposited for the system as a whole. Among the districts, the only exceptions to this pattern occur in the Atlanta and Kansas City Districts, where intermediate-sized banks (those holding from $100 million to $1 billion in deposit liabilities) deposit the largest share of items. Nonbank depositors, including other Federal Reserve offices and government depositors, account for less than 9 percent of total deposits for the system. These and other details on deposits by size of bank appear in table 5. INTERDISTRICT CHECK FLOWS Federal Reserve District offices participate in interdistrict check-clearing operations in proportions that vary widely among the sending and receiving districts. At the lowest end of the scale, only 4.5 percent of the number of items (and 2.2 percent of the value of those items) sent from the San Francisco Federal Reserve District to the New York Federal Reserve offices were sent by Federal Reserve offices in the San Francisco District (table 6, row 2, column 12). Thus, 95.5 percent of the items came from direct-sending banks. 7 At the other end of the scale, 69.2 percent of the number of items (representing 32.9 percent of the dollar value) sent from the Minneapolis District to the Atlanta Federal Reserve offices were sent by Federal Reserve offices (row 6, column 9). In general, 7 The system reimburses banks for their direct-send transport costs up to the equivalent cost of first-class mail. 6. Percentage distribution of number and dollar value of interdistrict deposits at Federal Reserve offices sent by Federal Reserve offices 1 Daily average, May 1978 Receiving Federal Reserve uistrict Sendinjg Federal Reserve District Boston (1) 1. Boston 2. New York 3. Philadelphia 4. Cleveland 5. Richmond 6. Atlanta 7. Chicago 8. St. Louis 9. Minneapolis 10. Kansas City 11. Dallas 12. San Francisco 8.7 (3.6) 16.9 (5.1) 13.4 (4.7) 20.9 (7.3) 23.1 (10.6) 14.2 (4.7) 19.3 (6.5) 14.7 (•5) 27.4 (13.5) 20.0 (7.9) 23.2 (18.3) New York Philadelphia Cleveland Richmond St. Louis Minneapolis Kansas City Dallas San Francisco (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) 18.1 (6.4) 13.6 (5.0) 9.1 (5.3) 33.3 (10.9) 31.5 (10.1) 19.6 (6.5) 29.6 (22.3) 15.9 (9.0) 19.5 (12.7) 29.5 (30.8) 44.0 (35.4) 46.1 (25.3) 47.3 (40.3) 49.8 (33.0) 34.0' (14.9) 19.0 (5.2) 18.5 (4.9) 19.9 (6.0) 18.0 (4.6) 21.5 (5.9) 26.6 (5.3) 17.0 (17.2) 16.1 (9.0) 14.8 (12.1) 6.9 (6.2) 34.7 (30.9) 18.1 (12.9) 13.1 (11.3) 48.7 (32.0) 45.7 (19.0) 46.7 (20.9) 51.2 (38.7) 50.4 (22.7) 69.2 (32.9) 32.4 (23.0) 67.9 (41.1) 42.5 (31.5) 44.2 (25.3) 40.5 (24.3) 39.7 (24.1) 36.4 (19.5) 38.8 (22.1) 26.6 (13.8) 29.8 (15.2) 41.4 (26.9) 8.5 (3.5) 5.2 (1.3) 8.5 (2.2) 7.7 (2.7) 8.3 (2.2) 5.5 (1.6) 9.2 (2.4) 5.7 (2.6) 16.1 (13.2) 4.8 (1.6) 10.5 (4.6) 4.5 (2.2) 10.8 (3.7) 12.4 (4.9) 10.8 (5.0) 15.5 (8.4) 10.4 (4.6) 13.7 (3.7) 19.5 (33.3) 15.8 (14.5) 11.1 (5.1) 10.7 (3.3) 17.5 (2.7) 16.5 (3.8) 18.0 (2.5) 14.5 (.9) 15.5 (2.7) 29.5 (9.2) 14.9 (3.5) 14.9 (3.6) 8.8 (3.3) 14.2 (12.2) 12.4 (10.6) 22.9 (7.4) 11.5 (4.0) 14.0 (8.3) 12.2 (18.5) 11.9 (8.8) 13.2 (8.6) 19.5 (6.7) 28.3 (11.3) 55.9 (9.5) 26.9 (11.4) 32.6 (14.4) 47.5 (24.7) 47.8 (13.2) 46.5 (10.0) 41.7 (16.1) 21.3 (17.1) 35.8 (16.6) 42.0 (32.3) 32.0 (39.2) 46.7 (36.1) 36.6 (32.2) 24.9 (17.3) 1 The percentages for dollar value appear in parentheses. This table tells, for example, that 29.6 percent of the number of items (and 22.3 percent of the dollar value) sent from the Richmond District and received in the Boston District were sent by Richmond District Federal Reserve offices (row 1, Atlanta Chicago 52.2 (33.1) 37.4 (23.4) 64.4 (59.6) 62.3 (44.2) 52.5 (38.1) 33.4 (19.5) 21.6 (4.8) 19.0 (6.5) 17.7 (3.9) 20.5 (5.3) 11.5 (6.6) 30.7 (21.2) 24.5 (13.0) 21.4 (11-5) 31.7 (29.5) 64.1 (34.8) 67.8 (44.9) 30.9 (18.0) 33.1 (15.2) 25.1 (29.4) 18.6 (13.2) column 5). Thus, the balance, 70.4 percent of the items (and 77.7 percent of the dollar value), were from direct-sending banks. These data do not cover clearings outside the Federal Reserve System. Check Processing at Federal Reserve Offices 103 the Federal Reserve offices in the Dallas and San Francisco Districts participate least in sending checks from those districts to Federal Reserve offices in other districts, accounting on the average for 9 percent and 12 percent, respectively, of the items sent from their districts. The most active Federal Reserve offices, in general, are in the Atlanta and Minneapolis districts; they account for an average of 47 percent and 52 percent, respectively, of all the items sent from those districts. 8 In all but four cases the Federal Reserve percentage of the number of items sent is larger than its percentage of the dollar value of interdistrict deposits. Thus, the average dollar value of interdistrict checks from Federal Reserve offices is smaller than the average dollar value of interdistrict checks from direct-sending banks. Banks send relatively large checks directly because they can more than compensate for the greater check-processing costs of direct sending through more rapid availability of funds than the Federal Reserve provides. In 121 of the 132 interdistrict sending combinations in table 6, the share of items sent by direct-sending banks exceeds 50 percent of the total interdistrict deposits at Federal Reserve offices. reflects the proportion of demand deposits plus other 4 "checking" deposits at these institutions in each district. The impact of N O W accounts in New England (Boston District) and 4 'checking accounts" at mutual savings banks in New York State (New York District) is evident in table 7, which shows that those two districts have the largest proportions of nonbank presentee institutions. PRESENTMENTS SUMMARY FEDERAL RESERVE BY OFFICES Checks have to be physically presented to drawee financial institutions before payment is made and funds are transferred. For the system as a whole, 58 percent of all items presented for payment by Federal Reserve offices are presented to member banks, while 35 percent are presented to nonmember banks. These and other results of the survey concerning presentments by Federal Reserve offices are listed in table 7. Included under 4 ' O t h e r s " are items involving nonbank institutions: drafts on negotiable order of withdrawal (NOW) accounts in thrift institutions in New England and checks drawn on mutual savings banks in New York State. The distribution of items presented to member and nonmember banks by Federal Reserve Districts 8 These data show interdistrict deposits at Federal Reserve offices only. N o clearing outside the Federal Reserve System is included. 7. Percentage distribution of number of items presented for payment by Federal Reserve Banks, by type of presentee institution 1 Daily average, May 1978 Federal Reserve District NonMember member banks banks Others2 Total Boston New York Philadelphia Cleveland Richmond Atlanta 46.2 80.0 58.7 76.4 71.0 43.4 33.9 8.6 34.9 23.4 26.6 48.3 19.9 11.4 6.4 .3 2.5 8.3 100.0 100.0 100.0 100.0 100.0 100.0 Chicago St. Louis Minneapolis Kansas City Dallas San Fransisco 53.8 37.3 57.0 53.6 60.9 54.6 42.7 53.6 40.7 44.4 33.6 38.0 3.4 9.1 2.3 2.0 5.5 7.4 100.0 100.0 100.0 100.0 100.0 100.0 57.9 35.0 7.2 100.0 System 1 2 Details may not total 100.0 because of rounding. Includes items to thrift institutions and unclassified items. This article has presented some results of the Federal Reserve's May 1978 survey of its check-clearing function. While, by number, most checks cleared by the Federal Reserve are locally deposited items, the dollar value of interzone checks is the greater by far. T h u i , the average value of an interzone check is more than twice that of an item deposited and cleared locally. Member banks account for 82 percent of all checks deposited at the Federal Reserve. Also, funds from 82 percent of the items deposited are normally available the next day. Banks with total deposits of more than $1 billion deposit around 36 percent of all the checks submitted to the Federal Reserve, a proportion consistent with their position as major correspondent banks. Finally, interdistrict check flows suggest that the Federal Reserve is only one of many participants in the interdistrict processing of checks. • 104 Survey of Time and Savings Deposits at Commercial Banks, October 1978 David M. Lefever of the Board's Division of Research and Statistics prepared this article. Total time and savings deposits at insured commercial banks, not adjusted for seasonal variation, expanded more than 2Vi percent during the period from July 27 to October 25, 1978, up slightly from the 2 percent increase over the preceding survey quarter. 1 Despite further increases in market interest rates above regulatory ceilings, inflows of interest-bearing deposits subject to rate ceilings totaled more than $3^2 billion during the July-October period, near the average of $4 billion per quarter since April 1977. To help finance expansion in their loans, banks also raised $12 billion through the issuance of large-denomination ($100,000 or more) time deposits in the latest survey period. Net sales of large-denomination time deposits, which are not subject to interest rate ceilings, 1 Surveys of time and savings deposits (STSD) at all member banks were conducted by the Board of Governors in late 1965, in early 1966, and quarterly in 1967. In January and July 1967 the surveys also included data for all insured nonmember banks collected by the Federal Deposit Insurance Corporation (FDIC). Since the beginning of 1968 the Board of Governors and the FDIC have conducted the joint quarterly surveys to provide estimates for all insured commercial banks based on a probability sample of banks. The results of all earlier surveys have appeared in previous issues of t h e FEDERAL RESERVE BULLETIN f r o m 1 9 6 6 t o 1978, most recently November 1978. The current sample—designed to provide estimates of the composition of deposits—includes about 560 insured commercial banks. For details of the statistical methodology, see "Survey of Time and Savings Deposits, July 1976," in BULLETIN, vol. 63 (December 1976), pp. 986-1000. Detailed data for the current survey (formerly contained in appendix tables) are available on request from Publications Services, Division of Support Services, Board of Governors of the Federal Reserve System, Washington, D . C . 20551. had averaged $11 billion for the five preceding survey quarters. The growth of total small-denomination (less than $100,000) time and savings deposits reflected continued rapid inflows of the six-month money market certificates (MMCs). The ceiling rate on M M C s varies weekly with changes in the average auction yield on new issues of six-month Treasury bills. Although a substantial portion of these funds appears to have been shifted f r o m other types of bank deposits, the M M C s also attracted funds that otherwise would have been invested in market instruments. Savings and small-denomination time deposits excluding M M C s fell $5 billion, substantially more than the decrease of $l1/2 billion during the previous survey quarter. SAVINGS DEPOSITS During the July-October period, savings deposits at commercial banks, not seasonally adjusted, declined for the second straight survey quarter—the first declines since the survey of January 1970. The net outflow of savings deposits during the latest survey period, amounting to $400 million, was, however, substantially less than the net decline of $l!/2 billion in the previous period. The net outflow of savings deposits during the last two survey quarters reflected rising rates on alternative short-term instruments: Treasury securities, shares of money market mutual funds, and M M C s . By the end of October, the maximum allowable yield on savings deposits was more than 2Vi percentage points below rates on 90-day Treasury bills and money market mutual funds, and more than 3 3A percentage points below the effective yield on M M C s . Outflows of savings deposits were concen- Survey of Time and Savings Deposits trated in accounts held by individuals and domestic governmental units; deposits in these categories declined $850 million and $150 million, respectively. Meanwhile, businesses increased their holdings of savings deposits more than $550 million, after a modest decline during the previous survey quarter and virtually no net inflow over the preceding year. For each of the three major categories of savings deposits, a slightly larger proportion of banks paid the ceiling rate of interest in the October survey than in July. Nevertheless, the impact of these increases was so small that the average rate paid on all new issues of savings deposits, weighted by the amount of deposits outstanding, remained unchanged from the July survey at 4.93 percent. 105 SMALL-DENOMINA TION TIME DEPOSITS The outstanding level of interest-earning, small-denomination time deposits—consisting of all maturity categories, including MMCs, individual retirement accounts (IRAs), and Keogh accounts—rose $4 billion (not seasonally adjusted) during the July-October period to nearly $180 billion, following an increase of $3 billion in the previous quarter. During the survey period, the outstanding level of MMCs jumped $8% billion, compared with $5!/2 billion during the first two months following their introduction on June 1. Nearly all other categories of small time deposits maturing in less than six 1. Types of time and savings deposits held by insured commercial banks on survey dates, April 26, July 26, and October 25, 1978 Deposits Number of issuing banks Type of deposit, denomination, and original maturity Millions of dollars Apr. 26 July 26 Oct. 25 Percentage change Apr. 26 July 26 Oct. 25 Apr. 26July 26 July 26Oct. 25 Total time and savings deposits 14,339 14,338 14,299 564,410 576,366 591,754 2.1 2.7 Savings Issued to: Individuals and nonprofit organizations Partnerships and corporations operated for profit (other than commercial banks) Domestic governmental units All other 14,339 14,338 14,299 222,065 220,583 220,080 -.7 -.2 14,339 14,338 14,299 205,843 204,847 203,980 -.5 -.4 9,754 8,363 1,081 9,989 8,023 1,268 9,860 8,287 1,237 10,679 5,427 116 10,646 4,954 137 11,198 4,788 114 -.3 -8.7 17.8 5.2 -3.4 -16.9 9,434 9,364 9,329 2,549 2,770 2,992 8.7 8.0 9,102 10,427 5,381 13,838 IRA and Keogh Plan time deposits, 3 years or more Money market certificates, $10,000 or more, exactly 6 months 1 Other interest-bearing time deposits, less than $100,000 Issued to: Domestic governmental units 30 up to 90 days 90 up to 180 days 180 days up to 1 year 1 year and over Other than domestic governmental units 30 up to 90 days 90 up to 180 days 180 days up to 1 year 1 up to 2i/i years 2 2l/z up to 4 years 4 up to 6 years22 6 up to 8 years 8 years and over * 2 157.2 14,102 14,095 14,008 169,674 167,185 162,586 -1.5 -2.8 11,135 5,153 8,657 5,132 8,748 14,102 6,439 11,635 8,605 13,832 12,750 12,610 9,455 10,873 4,770 7,961 5,539 8,867 14,092 6,125 11,700 8,458 13,769 12,902 13,044 10,765 6,186 10,643 4,904 7,541 5,439 8,173 14,008 5,514 11,439 8,176 13,751 12,822 12,920 10,965 7,789 4,219 865 1,273 825 1,255 165,455 5,886 30,634 3,105 33,941 19,154 52,081 20,654 4,006 918 1,166 666 1,256 163,178 5,413 29,392 3,156 32,857 18,346 50,850 21,738 1,427 3,694 980 1,084 614 1,015 158,893 4,369 28,732 3,239 30,820 17,384 49,339 22,721 2,288 -5.0 6.2 -8.5 -19.3 0.0 -1.4 -8.0 -4.1 1.6 -3.2 -4.2 -2.4 5.2 -7.8 6.7 -7.0 -7.8 -19.2 -2.6 -19.3 -2.2 2.7 -6.2 -5.2 -3.0 4.5 60.3 11,369 11,531 11,789 164,616 174,048 185,907 5.7 6.8 Non-interest-bearing time deposits Less than $100,000 $100,000 or more 1,650 1,379 667 1,447 1,177 658 1,734 1,416 687 3,999 623 3,376 A,212 694 3,578 4,223 711 3,511 6.8 11.4 6.0 -1.2 2.5 -1.9 Club accounts (Christmas savings, vacation, or similar club accounts) 9,246 9,550 9,225 1,508 2,128 2,128 41.1 .0 Interest-bearing tijne deposits, $100,000 or more. 1 2 Issuance authorized beginning June 1, 1978. Excludes all IRA and Keogh Plan accounts with original maturity of 3 years or more. NOTE.—All banks that had either discontinued offering or never offered certain types of deposits as of the survey date are not counted as issuing banks. However, small amounts of deposits held at banks that had discontinued issuing certain types of deposits are included in the amounts outstanding. Details may not add to totals because of rounding. 106 Federal Reserve Bulletin • February 1979 2. Small-denomination time and savings deposits held by insured commercial banks on October 25, compared with July 26, 1978, by type of deposit, by most common rate paid on new deposits in each category, and by size of bank Deposit group, original maturity, and distribution of deposits by most common rate All banks Size of bank (total deposits in millions of dollars) All banks Less than 100 Oct. 25 July 26 Oct. 25 July 26 100 and over Oct. 25 July 26 Less than 100 Oct. 25 July 26 Oct. 25 July 26 100 and over Oct. 25 July 26 Amount of deposits (in millions of dollars). or percentage distribution Number of banks, or percentage distribution Savings deposits Individuals and nonprofit organizations Issuing banks 14,299 Distribution, t o t a l . . . 100 4.00 or less 4.0 8.3 4.01-4.50 4.51-5.00 87.6 Paying ceiling rate1... 87.6 Size of bank (total deposits in millions of dollars) 14,338 100 4.1 8.4 87.5 87.5 13,226 100 4.1 8.5 87.3 87.3 13,265 100 4.1 8.7 87.2 87.2 1,073 100 2.8 5.7 91.5 91.5 1,073 203,980 204,847 100 100 100 3.8 3.2 2.9 5.0 7.0 7.1 91.2 90.1 89.7 91.2 90.1 89.7 78,279 100 3.7 8.6 87.7 87.7 78,011 125,701 126,836 100 100 100 3.6 2.9 2.5 9.3 6.0 5.8 87.2 91.6 91.3 87.2 91.6 91.3 Partnerships and corporations Issuing banks Distribution, t o t a l . . . 4.00 or less 4.01-4.50 4.51-5.00 Paying ceiling rate1... 9,860 100 1.4 4.6 94.0 93.8 9,989 100 1.6 7.4 91.0 90.8 8,803 100 1.5 4.7 93.8 93.5 8,932 100 1.7 7.9 90.4 90.2 1,057 100 .9 3.4 95.7 95.7 1,057 100 .8 3.4 95.8 95.8 11,198 100 .4 3.8 95.8 95.7 10,646 100 .8 4.4 94.8 94.8 3,467 100 1.0 3.4 95.5 95.5 3,265 100 2.1 5.8 92.1 92.1 7,731 100 .2 4.0 95.9 95.9 7,381 100 .2 3.8 96.0 96.0 Domestic govt, units Issuing banks Distribution, t o t a l . . . 4.00 or less 4.01-4.50 4.51-5.00 Paying ceiling rate1... 8,287 100 2.3 7.5 90.2 89.9 8,023 100 2.4 9.5 88.1 88.1 7,552 100 2.5 8.1 89.4 89.1 7,293 100 2.6 10.1 87.3 87.3 735 100 .1 1.9 97.9 97.9 730 100 1 3.4 96.4 96.4 4,788 100 1.1 3.7 95.3 95.2 4,954 100 1.1 3.6 95.3 95.3 2,618 100 1.8 6.1 92.1 91.9 2,979 100 1.7 4.6 93.7 93.7 2,170 100 .2 • .8 99.1 99.1 1,976 100 .1 2.1 97.8 97.8 All other Issuing banks Distribution, t o t a l . . . 4.00 or less 4.01-4.50 4.51-5.00 Paying ceiling rate1... 1,237 100 12.7 6.7 80.7 80.7 1,268 100 13.6 19.0 67.4 67.4 1,102 100 13.9 7.5 78.6 78.6 1,106 100 15.3 21.8 62.9 62.9 135 100 22.4 162 100 22.0 114 100 2.3 2 137 100 21.6 35 100 5.2 2 104 100 21.0 98.0 98.0 97.7 97.7 98.4 98.4 () 79 100 1.0 2 97.6 97.6 94.8 94.8 33 100 3.2 .l 96.7 96.7 99.0 99.0 99.0 99.0 IRA and Keogh Plan time deposits, 3 years or more Issuing banks Distribution, total 6.00 or less 6.01-7.00 7.01-7.50 7.51-7.75 Paying ceiling ratei... 9,329 100 3.4 7.0 31.2 58.4 34.2 9,338 100 4.1 7.8 37.0 51.0 23.4 8,348 100 3.6 7.5 31.9 57.1 33.0 8,352 100 4.3 8.3 37.8 49.6 22.6 980 100 1.8 2.8 25.8 69.7 44.4 986 100 2.7 3.8 30.3 63.2 30.4 2,992 100 1.2 2.6 24.1 72.1 46.6 2,760 100 2.8 2.4 29.8 65.0 34.6 1,167 100 .9 3.6 28.6 66.8 39.1 1,090 100 2.0 3.2 38.7 56.1 29.4 1,825 100 1.3 1.9 21.2 75.5 51.4 1,669 100 3.3 1.8 24.0 70.9 38.0 Money market certificates, $10,000 or more, 6 months 3 10,182 Issuing banks 100 Distribution, total 1.9 7.25 or less 4.8 7.26-7.50 7.51-8.00 7.1 8.01-8.56 86.1 Paying ceiling rate1... 67.2 8,928 100 9.4 90.6 .0 .0 59.3 9,127 100 2.1 5.2 7.5 85.2 65.1 7,891 100 10.4 89.6 .0 .0 55.7 1,055 100 1 1.5 4.2 94.2 85.3 1,036 100 1.7 98.3 .0 .0 86.6 13,806 100 1.0 1.7 2.5 94.9 85.0 5,342 100 3.0 97.0 .0 •0 80.3 5,309 100 2.1 3.6 2.8 91.4 75.5 1,814 100 5.6 94.4 .0 .0 70.5 8,497 100 .2 .5 2.3 97.0 91.0 3,528 100 1.7 98.3 .0 .0 85.3 Time deposits less than $100,000 Domestic govt, units: 30 up to 90 days Issuing banks Distribution, t o t a l . . . 4.50 or less 4.51-5.00 5.01-5.50 5.51-8.00 Paying ceiling rate1... 4,904 100 .1 58.5 5.8 35.6 11.5 4,770 100 .7 50.2 14.8 34.3 .2 4,227 100 2 677 100 .8 69.8 5.1 24.3 16.2 676 100 1.6 65.5 6.6 26.2 1.1 980 100 .3 47.9 6.4 45.4 15.7 918 100 1.4 43.2 5.8 49.6 2 678 100 2 56.6 5.9 37.4 10.8 4,094 100 .6 47.6 16.1 35.7 2 43.5 7.8 48.7 9.3 495 100 .1 34.3 7.4 58.2 2 302 100 .8 57.8 3.2 38.2 29.9 423 100 2.9 53.7 4.0 39.5 2 90 up to 180 days Issuing banks Distribution, t o t a l . . . 4.50 or less 4.51-5.00 5.01-5.50 5.51-8.00 Paying ceiling rate1... 7,541 100 .1 11.5 70.8 17.6 3.4 7,921 100 .1 16.9 65.5 17.5 .2 6,708 100 2 7,085 100 2 1,084 100 .1 5.1 68.9 25.9 7.6 1,162 100 .1 13.9 62.8 23.3 .9 836 100 2 17.9 65.0 17.1 2 836 100 .7 8.2 70.2 20.9 1.4 727 100 2 11.8 70.9 17.3 2.5 833 100 .7 9.0 70.2 20.1 10.2 5.3 69.3 25.4 3.2 17.2 62.3 20.5 2 357 100 .2 4.7 68.1 27.0 16.7 326 100 .2 5.5 63.8 30.4 3.2 For notes see end of table. () () () () () () () () () () () () () () () () () () Survey of Time and Savings Deposits 107 TABLE 2—Continued All banks Deposit group, original maturity, and distribution of deposits by most common rate Size of bank (total deposits in millions of dollars) Less than 100 Oct. 25 July 26 Oct. 25 July 26 All banks 100 and over Oct. 25 July 26 Size of bank (total deposits in millions of dollars) Less than 100 Oct. 25 July 26 Oct. 25 July 26 100 and over Oct. 25 July 26 Amount of deposits (in millions of dollars), or percentage distribution Number of banks, or percentage distribution Time deposits, less than $100,000 (cont.) Domestic govt. units (cont.) 180 days up to 1 year Issuing banks Distribution, total — 4.50 or less 4.51-5.00 5.01 5.50 5.51 8.00 Paying ceiling rate1... 5,416 100 2 5,488 100 2 4,795 100 2 4,820 100 2 621 100 2 668 100 2 614 100 2 664 100 2 432 100 2 464 100 2 181 100 2 201 100 2 6.8 67.2 26.0 8.6 9.7 61.7 28.6 3.6 67.2 25.8 7.6 10.1 61.3 28.5 3.3 67.1 28.0 16.6 6.7 64.0 29.3 6.0 2.0 63.7 34.3 14.6 3.8 43.0 53.3 11.4 .7 65.9 33.5 8.0 38.6 59.4 11.2 5.0 58.6 36.4 30.5 7.8 53.2 39.0 12.0 1 year and over Issuing banks Distribution, total. . . 5.00 or less 5.01-5.50 5.51-6.00 6.01-8.00 Paying ceiling rate1... 8,170 100 1.3 4.0 58.0 36.7 3.7 8,685 100 1.1 3.3 64.2 31.4 1.3 7,376 100 1.0 4.0 57.8 37.2 3.0 7,872 100 .9 3.1 64.3 31.7 1.1 793 100 4.3 4.4 59.0 32.3 9.7 813 100 2.7 5.4 63.0 28.8 3.9 1,013 100 .6 2.2 55.4 41.8 10.9 1,245 100 .2 1.4 52.8 45.7 6.7 854 100 .1 1.8 56.9 41.2 8.5 939 100 .1 .7 60.0 39.1 5.7 159 100 3.2 4.5 47.4 44.9 23.9 306 100 .4 3.3 30.6 65.7 9.5 Other than domestic govt, units: 30 up to 90 days Issuing banks Distribution, total... 4.50 or less 4.51-5.00 Paying ceiling rate1... 5,514 100 .8 99.2 99.2 6,125 100 2.8 97.2 97.2 4,635 100 .7 99.3 99.3 5,247 100 3.0 97.0 97.0 879 100 1.3 98.7 98.7 878 100 1.7 98.3 98.3 4,346 100 1.4 98.6 98.6 5,384 100 4.5 95.5 95.5 902 100 2 100.0 100.0 () 1,119 100 .1 99.9 99.9 3,444 100 1.7 98.3 98.3 4,266 100 5.7 94.3 94.3 90 up to 180 days 11,439 Issuing banks 100 Distribution, total. . . .6 4.50 or less 4.6 4.51-5.00 94.7 5.01-5.50 94.2 Paying ceiling rate1... 11,700 100 .6 5.1 94.3 94.3 10,384 100 .7 4.9 94.4 93.9 10,656 100 .7 5.3 94.1 94.1 1,055 100 2 1,044 100 2 28,732 100 2 29,380 100 2 11,429 100 2 11,643 190 2 17,304 100 2 17,737 100 2 2.3 97.7 97.6 3.3 96.7 96.6 4.7 95.3 94.9 4.9 95.0 94.6 4.6 95.4 95.4 3.9 96.0 96.0 4.8 95.2 94.6 5.6 94.4 93.7 8,458 100 .6 4.2 95.2 95.2 7,296 100 .5 4.1 95.4 95.4 7,576 100 .4 4.3 95.3 95.3 880 100 2.0 2.3 95.6 95.6 882 100 1.9 3.2 94.9 94.9 3,229 100 .2 1.4 98.4 98.4 3,140 100 .2 .8 99.1 99.1 1,626 100 2 1,606 100 2 2.5 97.5 97.5 13,769 100 2 12,708 100 2 1,066 100 2 1,060 100 2 .4 99.6 98.2 1.1 98.9 97.6 30,819 100 .1 .6 99.3 99.0 32,788 100 2 2.0 98.0 98.0 () 98.1 98.0 12,684 100 .6 2.2 97.2 97.2 2 Vi up to 4 years 12,822 Issuing banks Distribution, total. . . 100 2.1 6.00 or less 97.9 6.01-6.50 97.7 Paying ceiling rate1... 12,902 100 1.9 98.1 97.1 11,768 100 2.2 97.8 97.8 11,853 100 1.9 98.1 97.1 1,054 100 1.3 98.7 96.8 1,049 100 1.7 98.3 97.4 4 up to 6 years 12,920 Issuing banks Distribution, total. . . 100 1.6 6.50 or less 10.0 6.51-7.00 88.4 7.01-7.25 88.2 Paying ceiling rate1... 13,044 100 .6 12.2 87.2 86.9 11,876 100 1.7 10.4 87.9 87.7 12,002 100 .5 12.7 86.8 86.6 1,043 100 .3 5.3 94.4 93.9 6 up to 8 years 10,965 Issuing banks Distribution, total... 100 1.5 7.00 or less 3.2 7.01-7.25 95.3 7.26-7.50 95.3 Paying ceiling rate1... 10,765 100 .6 4.8 94.6 94.5 9,950 100 1.6 3.2 95.2 95.2 9,766 100 .3 5.0 94.6 94.6 1,015 100 .4 3.7 95.9 95.3 180 days up to 1 year Issuing banks Distribution, total. . . 4.50 or less 4.51 5.00 5.01 5.50 Paying ceiling rate1... () 8,176 100 .6 3.9 95.5 95.5 1 up to 2 V4 years 13,751 Issuing banks 100 Distribution, total. . . .5 5.00 or less 2.0 5.01 5.50 97.4 5.51-6.00 97.3 Paying ceiling rate*... For notes see end of table. () ( 1.9 ) ( 7.0 ) () () (4.9 ) () () () () () () () () () () (2.0 ) () () () () () () .9 99.1 99.1 1,603 100 .3 .3 99.4 99.4 1,534 100 .3 .6 99.1 99.1 20,535 100 2 11,239 100 2 12,253 100 2 1.4 98.6 98.3 19,580 100 .2 .7 99.1 99.1 .7 99.3 99.3 .4 99.6 98.8 2.5 97.5 96.8 17,352 100 1.7 98.3 98.0 18,311 100 1.1 98.9 98.5 10,154 100 2.2 97.8 97.8 10,797 100 .9 99.1 98.9 7,198 100 1.0 99.0 98.3 7,514 100 1.5 98.5 98.0 1,043 100 1.7 7.3 91.0 90.5 49,260 100 .8 7.4 91.8 91.4 50,772 100 .9 9.3 89.8 89.6 27,196 100 1.2 10.2 88.7 88.2 27,895 100 .5 12.9 86.7 86.5 22,064 100 .4 4.0 95.6 95.3 22,877 100 1.3 5.0 93.7 93.3 998 100 3.3 2.6 94.1 93.2 22,667 100 .5 2.4 97.1 96.9 21,668 100 .5 1.6 97.9 97.8 10,046 100 .6 2.0 97.4 97.4 9,718 100 2 12,621 100 .4 2.8 96.8 96.5 11,950 100 .9 1.7 97.4 97.1 () () () () 1.4 98.6 98.6 () () 108 Federal Reserve Bulletin • February 1979 TABLE 2—Continued Size of bank (total deposits in millions of dollars) Deposit group, original maturity, and distribution of deposits by most common rate 100 and over Less than 100 Oct. 25 July 26 Size of bank (total deposits in millions of dollars) All banks All banks Oct. 25 July 26 Oct. 25 July 26 Number of banks, or percentage distribution Less than 100 Oct. 25 July 26 Oct. 25 July 26 100 and over Oct. 25 July 26 Amount of deposits (in millions of dollars), or percentage distribution Time deposits less than $100,000 (cont.) Other than domestic govt, units (cont.) 8 years and over 3 Issuing banks Distribution, total 7.25 or less 7.26-7.50 7.51-7.75 Paying ceiling rate1... 7,789 100 1.7 6.3 92.0 92.0 6,186 100 1.5 3.6 94.9 94.9 6,952 100 1.4 6.0 92.6 92.6 5,419 100 1.3 2.9 95.9 95.9 837 100 4.1 8.9 87.0 87.0 767 100 3.5 8.9 87.6 87.6 2,288 100 5.1 14.8 80.1 80.1 1,427 100 3.5 28.4 68.1 68.1 732 100 .2 3.0 96.8 96.8 315 100 .7 2.7 96.6 96.6 1,557 100 7.4 20.3 72.3 72.3 1,112 100 4.3 35.7 60.0 60.0 Club accounts Issuing banks Distribution, total 0.0D 0.01-4.00 4.01-4.50 4.51-5.50 9,225 100 44.0 16.2 6.9 32.8 9,550 100 48.3 14.6 7.6 29.5 8,438 100 45.6 16.4 6.9 31.1 8,735 100 50.2 14.7 7.6 27.5 787 100 27.2 14.7 6.4 51.6 815 100 28.5 13.6 7.0 50.9 2,096 100 19.1 13.4 8.7 58.8 2,121 100 24.8 15.3 12.8 47.2 892 100 27.0 21.2 6.5 45.3 912 100 36.5 19.6 13.3 30.7 1,204 100 13.3 7.6 10.3 68.8 1,209 100 16.1 12.0 12.3 59.6 1 See BULLETIN Table 1.16 on page A10 for the ceiling rates that existed at the time of each survey. 2 Less than .05 per cent. 3 Issuance authorized June 1, 1978. NOTE.—All banks that either had discontinued offering or had never offered particular types of deposits as of the survey date are not counted as issuing banks. Moreover, the small amounts of deposits held at banks that had discontinued issuing deposits are not included in the amounts outstanding. Therefore, the deposit amounts shown in Table 1 may exceed the deposit amounts shown in this table. The most common interest rate for each instrument refers to the stated rate per annum (before compounding) that banks paid on the largest dollar volume of deposit inflows during the 2-week period immediately preceding the survey date. Details may not add to totals because of rounding. years declined over the period, while those with longer maturities rose moderately. IRAs and Keogh accounts grew steadily, increasing $200 million to a level of almost $3 billion. Reflecting a diversion of deposits to MMCs, as well as the further rise in interest rates on alternative instruments above the regulatory ceiling rates, the outstanding level of small-denomination time deposits subject to fixed ceilings declined sharply. Outflows from such accounts totaled $4V2 billion, twice as large as the drop during the previous survey quarter. Among issues other than those to governmental units, there were substantial declines in all but one of the maturity categories under six years, suggesting that a large portion of MMC balances represents funds that were shifted from these accounts, particularly deposits with maturities of two and one-half years up to six years, which dropped $4Vi billion. However, the consistently popular deposits with original maturities of six years or more—including the new eight-year certificates authorized on June 1—continued to rise, albeit at a reduced pace. The net inflow to these accounts was almost $2 billion, about $500 million less than the increase in the previous survey period, and represented the smallest percentage increase for any survey quarter since introduction of the six-year certificate with a higher ceiling rate in 1974. Outstanding levels of all maturities of smalldenomination time deposits issued to governmental units, except those maturing from 30 up to 90 days, registered declines. Over all, such deposits declined $300 million during the survey quarter compared with a decrease of $200 million during the previous survey period. MMCs may have attracted a small amount of these funds; but the decline seems to have been due largely to a diversion to other instruments in response to the general rise in interest rates. Although banks may pay 8 percent on all time deposits issued to governments without regard to maturity, their offering rates are in general low because they are usually required to pledge securities against such accounts. In response to rising market rates of interest, a growing proportion of banks paid the maximum allowable rate on all categories of time deposits issued to governmental units. Survey of Time and Savings Deposits 109 3. Average of most common interest rates paid on various categories of time and savings deposits at insured commercial banks on October 25, 1978 Bank size (total deposits in millions of dollars) Type of deposit, holder, and original maturity All size groups Less than 20 20 up to 50 50 up to 100 100 up to 500 500 up to 1,000 1,000 and over Savings and small-denomination time deposits 5.72 5.82 5.88 5.75 5.71 5.64 5.59 Savings, total Individuals and nonprofit organizations Partnerships and corporations Domestic governmental units All other 4.93 4.92 4.98 4.97 4.95 4.94 4.93 5.00 4.94 5.00 4.93 4.92 4.94 4.96 4.48 4.85 4.84 4.99 4.94 5.00 4.95 4.95 4.99 5.00 4.99 4.91 4.90 4.98 4.99 5.00 4.94 4.94 4.97 4.99 5.00 IRA and Keogh Plan time deposits, 3 years or more 7.74 7.67 7.76 7.63 7.76 7.77 7.76 Money market certificates, exactly 6 months 8.46 8.07 8.38 8.52 8.51 8.51 8.54 Other time deposits in denominations of less than $100,000, total Domestic governmental units, total 30 up to 90 days 90 up to 180 days 180 days up to 1 year 1 year and over 6.53 6.14 6.10 5.85 6.12 6.51 6.42 6.04 6.10 5.75 5.88 6.40 6.62 6.15 6.12 5.52 6.30 6.50 6.59 6.36 6.15 6.09 6.78 6.70 6.54 6.04 6.32 5.79 5.95 6.44 6.51 6.43 6.13 6.56 6.39 6.83 6.45 6.38 5.93 6.52 6.84 6.96 6.53 4.98 • 5.47 5.49 5.99 6.48 7.22 7.49 7.66 6.45 5.00 5.47 5.48 5.99 6.44 7.19 7.48 7.73 6.63 5.00 5.50 5.50 6.00 6.50 7.21 7.50 7.75 6.60 5.00 5.45 5.49 6.00 6.49 7.23 7.49 7.71 6.55 4.97 5.50 5.47 6.00 6.49 7.23 7.49 7.70 6.51 4.94 5.50 5.49 6.00 6.50 7.24 7.50 7.57 6.45 5.00 5.44 5.50 5.99 6.49 7.23 7.49 7.61 3.77 3.19 3.26 3.22 3.89 3.56 4.56 Other than domestic governmental units, total 30 up to 90 days 90 up to 180 days 180 days up to 1 year 1 up to 2 Vi years 2Vi up to 4 years 4 up to 6 years 6 up to 8 years Over 8 years Club accounts1 1 Club accounts are excluded from all of the above categories. NOTE.—The average rates were calculated by weighting the most common rate reported on each type of deposit at each bank by the Together with the increase in rates paid on these governmental deposits, rates on small-denomination issues to nongovernmental entities rose in five of the eight categories. These developments, coupled with the rise in interest payments associated with MMCs and IRA and Keogh accounts, acted to raise the weightedaverage rate paid on all small-denomination time and savings deposits 7 basis points to 5.72 percent. OTHER TIME DEPOSITS Growth of bank assets, coupled with comparatively slow growth in deposits subject to interest rate ceilings, led banks to increase the out- amount of that type of deposit outstanding. All banks that had either discontinued offering or never offered particular types of deposit as of the survey date were excluded from the calculations for those specific types of deposits. standing volume of interest-bearing, large-denomination time deposits almost $12 billion, up from the $9L/Z billion increase of the previous survey. Large negotiable certificates of deposit at weekly reporting banks (not shown in the table) accounted for 50 percent of the total advance. Non-interest-bearing time deposits, principally escrow accounts and compensating balances held in conjunction with loans, decreased $50 million, following an increase of $275 million in the preceding period. Reflecting the seasonal pattern of deposit flows, the level of club accounts remained virtually unchanged at just over $2 billion. About 45 percent of the offering banks, holding a fifth of outstanding deposits, paid no interest on club accounts. 110 Federal Reserve Bulletin • February 1979 Staff Studies The staffs of the Board of Governors of the Federal Reserve System and of the Federal Reserve Banks undertake studies that cover a wide range of economic and financial subjects, and other staff members prepare papers related to such subjects. In some instances the Federal Reserve System finances similar studies by members of the academic profession. From time to time the results of studies that are of general interest to the professions and to others are summarized—or they may be printed in full—in this section of the FEDERAL RESERVE B U L L E T I N . STUDY SUMMARY TIE-INS BETWEEN THE GRANTING BANK Robert In all cases the analyses and conclusions set forth are those of the authors and do not necessarily indicate concurrence by the Board of Governors, by the Federal Reserve Banks, or by the members of their staffs. Single copies of the full text of each of the studies or papers summarized in the BULLETIN are available in mimeographed form. The list of Federal Reserve Board publications at the back of each BULLETIN includes a separate section entitled "Staff Studies" that lists the studies for which copies are currently available in mimeographed form. HOLDING OF CREDIT AND SALE OF INSURANCE COMPANIES AND OTHER A. Eisenbeis BY LENDERS and Paul R. Schweitzer—Staff, Board of Governors Prepared as a staff paper in the summer of 1978 This paper presents the findings of a study of the existence and extent of tying between the granting of credit and the sale of insurance by retailers, bank holding companies, and other financial institutions. It was requested by the Senate Committee on Banking, Housing and Urban Affairs. The study reports new data on insurance and credit activity obtained through two separate surveys—one of individual consumers and one of bank holding companies—and provides an analytical framework within which to assess the likelihood that tying is taking place. The theoretical framework implies that the existence of tying, either explicit or involuntary, will be manifested in a high proportion of joint purchases, in buyer perception of and resentment at being forced to make the purchase, and in supplier conduct that promotes tying. In the belief that buyer resentment would be strongest and most likely to generate complaints in those cases involving explicitly formal tying, the complaint files of the Federal Reserve System were canvassed. No complaints had been filed since 1970 alleging violation of section 106 of the Bank Holding Company Act by either consumers or businesses. The Federal Reserve's 1977 Consumer Credit Survey shows that 62.2 percent of the borrowers had purchased credit insurance. The lowest proportion of borrowers also purchasing insurance from the lender was at retailers and banks, 39.9 percent and 61.4 percent, respectively, while the highest was at finance companies, 74.8 percent. These relatively high penetration rates do not, however, appear to have resulted Staff from either explicit coercion or involuntary tying. Relatively few consumers responded that the insurance was "required" (16.4 percent) or even "strongly recommended" (8.8 percent); the lowest proportions were for retailers and banks. The absence of coercion is supported by the small proportion of customers who viewed credit life and disability insurance as a " b a d " service. Most regarded it as desirable and, more significantly, felt that its price was "about right" or even "inexpensive." The other survey sampled bank holding companies to gather information on policies, procedures, and organizational patterns in the selling of insurance. The reported penetration rates on credit-related property and casualty insurance appear significantly lower than would have been expected if tying were a widespread practice in the industry. Low penetration rates are also consistent with the respondents' policies and procedures, which do not seem to be conducive to tying arrangements. Solicitation for insurance is generally reported to be made after the credit is approved. Moreover, the prevalence of fixed salaries of insurance agents in large bank holding companies, as opposed to commissions, lessens the likelihood of coercive tying by these institutions. The survey of bank holding companies indi- Studies 111 cates higher penetration rates for credit life and disability insurance than for property and casualty insurance, but these latter rates show wider variation by lender group, type of loan, and location of company. In general, consumer loans, mortgage loans, and loans from finance company and bank subsidiaries have the higher median penetration rates. Again, patterns of conduct do not indicate extensive tying since credit insurance is typically offered after the credit is approved and, furthermore, most respondents advise the customer that insurance is not required. The results of the study suggest that explicit tying between the granting of credit and the sale of credit-related insurance is practically nonexistent and that implicit pressures brought by lenders on the borrowers are neither very strong nor widespread in the industry. A sizable minority of credit customers find it more convenient to place their property and casualty insurance with their lender than to search for alternative sources of insurance services. The proportion of people opting for joint purchases of credit and insurance rises greatly among those purchasing credit life and disability insurance, probably because the costs of premiums are small compared with costs of shopping around for other sources. • 112 Industrial Production Released for publication February 15 Industrial production in January edged up an estimated 0.1 percent following an increase of 0.7 percent in December. Output in January was affected somewhat by weather conditions. Production of materials was unchanged in January and output of products rose 0.2 percent. The January index, at 150.7 percent of the 1967 average, was 8.6 percent higher than the January 1978 level, which had been affected by strikes and weather. Output of consumer goods was little changed in January; production of home goods and consumer nondurable goods increased moderately while output of automotive products again declined sharply. Auto assemblies—at an annual rate of 8.9 million units—were about 4 percent below the 9.3-million-unit rate in December. Output of business equipment edged up slightly in January; this gain was limited by a sharp decline in the production of transit equipment, particularly truck production. The output of intermediate products continued to advance, reflecting a further rise in the production of construction supplies. Output of durable goods materials rose only slightly in January, with steel output declining 1967 == 100 Industrial production Total Products, total Final products Consumer goods Durable Nondurable Business equipment Intermediate products .. Construction supplies. Materials p Preliminary. 1978 sharply. Production of nondurable goods materials rose moderately, as the output of textile and chemical materials advanced. Production of energy materials dropped 0.7 percent, reflecting a decline in coal output; electric power generation continued to rise. F.R. indexes, seasonally adjusted. Latest figures: January. Auto sales and stocks include imports. Percentage change from preceding month to— 1979 1978 1979 Percentage change 1/78 to 1/79 Dec. p Jan.'' Dec. Jan. 150.5 150.7 .7 .5 .6 .5 .7 .1 8.6 148.7 145.5 150.7 161.9 146.2 168.4 160.7 160.3 153.3 149.0 145.7 150.8 161.1 146.7 168.5 161.4 161.2 153.3 .8 .8 .5 .4 .5 1.0 .5 .8 .5 .2 .3 .4 -.7 .9 .2 .4 .6 .7 .3 .3 .1 .8 -.1 .7 .6 .9 1.1 .4 .3 .4 .2 .4 .2 .6 .7 .8 .7 .6 .6 -.1 .9 .7 1.1 1.4 .5 .2 .1 .1 -.5 .3 .1 .4 .6 .0 7.6 8.0 6.3 10.0 4.9 10.4 6.5 8.0 10.1 ' Estimated. Aug. Sept. Oct. Nov. NOTE.—Indexes are seasonally adjusted. 113 Statements to Congress Statement by G. William Miller, Chairman, Board of Governors of the Federal Reserve System, before the Committee on Banking, Finance and Urban Affairs, U.S. House of Representatives, January 24, 1979. The nation's financial system has been undergoing rapid change in recent years, change that has altered the competitive environment in banking and other financial markets and complicated the Federal Reserve's ability to implement monetary policy. Nonmember depositary institutions have been growing much more rapidly than member banks. Transactions-type deposit accounts have become more widespread at thrift institutions. And, in general, competition among depositary institutions and between those institutions and the open market has become much more intense. This competition promotes efficiency in the financial system, and banks have been reassessing their costs and operations. Many, as a result, have become less willing to bear the high cost of cash reserve requirements associated with being a member of the Federal Reserve System. Thus, there has been a steady—and in recent years, an accelerating—decline in the proportion of bank deposits, especially transaction deposits, subject to federal reserve requirements. Moreover, the continued development of new transactions-type deposits at nonbank depositary institutions will further worsen this situation. DEVELOPMENTS WEAKEN MONETARY CONTROL It is essential that the Federal Reserve maintain adequate control over the monetary aggregates if the nation is to succeed in its efforts to curb inflation, sustain economic growth, and maintain the value of the dollar in international exchange markets. The attrition in deposits subject to reserve requirements set by the Federal Reserve weakens the linkage between member bank reserves and the monetary aggregates. As a larger and larger fraction of deposits at banks becomes subject to the diverse reserve requirements set by the 50 states rather than by the Federal Reserve and as more transactions balances reside at thrift institutions, the relationship between the money supply and reserves controlled by the Federal Reserve will become less and less predictable. Therefore, open market operations, the basic tool of monetary policy, are becoming less precise in their application. Our staff has attempted to assess the extent to which growth of deposits outside the Federal Reserve System would weaken the relationship between reserves and money. Their tentative results are shown in chart 1, which depicts the greater range of short-run variability in M - l and M-2, with a given level of bank reserves, that would develop as the percentage of deposits held outside the Federal Reserve rises. 1 As more and more deposits are held outside the system, this chart suggests that control of money through the reserve base becomes increasingly uncertain. USE OF RESERVE HAS BEEN REQUIREMENTS RESTRICTED With the proportion of banks subject to federal reserve requirements declining, the ability of the central bank to use changes in reserve requirements as a tool of monetary policy has been increasingly undermined. Changes in reserve ratios not only affect a smaller proportion 1 The attachments to this statement are available on request from Publications Services, Division of Support Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. 114 Federal Reserve Bulletin • February 1979 of deposits today than in the past, but the board also must weigh the potential impact of its actions on the membership problem—and hence on its ability to maintain monetary control over the longer run—each time it deliberates on the uses of this tool. Such concerns inhibit the board's freedom of action to conduct monetary policy. If reserve requirements were applied universally, as is proposed in H . R . 7, adjustments in reserve ratios to affect the availability of credit throughout the country, or to influence banks' efforts concerning particular types of deposits, may again become a more viable monetary instrument. Moreover, while open market operations in U.S. government securities provide the Federal Reserve with a powerful policy instrument, it is possible that conditions could develop in the future—such as a less active market for U.S. government securities in a period of reduced federal budgetary deficits— in which a more flexible adjustment of reserve requirements might be a desirable adjunct in efforts to control the monetary aggregates. As HAS BEEN THE DISCOUNT WINDOW The effectiveness of the Federal Reserve's administration of the discount window has been potentially compromised by recent developments. Membership attrition and the growth of transactions balances at nonbank depositary institutions have resulted in a shrinking proportion of the financial system having immediate access to the discount window on a day-to-day basis. The discount window, as the "lender of last r e s o r t , " provides the payments system with a basic liquidity back-up by assuring member banks the funds to meet their obligations. But, if the proportion of institutions having access to this facility continues to decline, individual institutions could be forced to make abrupt adjustments in their lending or portfolio policies, because they could not turn to the window to cushion temporarily the impacts of restrictive monetary policies. Risks that liquidity squeezes would result in bank failures could also increase. Thus, the Federal Reserve may find that its ability to limit growth in money and credit in order to curb inflation was being unduly impeded because the safety valve provided by the discount window was gradually losing its effective coverage. AND THE PAYMENTS FACES SYSTEM DETERIORATION The growth of transactions balances at institutions that do not have access to Federal Reserve clearing services also could lead to a deterioration of the quality of the nation's payments system. Reserve balances held at Federal Reserve Banks are the foundation of the payments mechanism because these balances are used for making payments and settling accounts between banks. Nonmember deposits at correspondent banks can serve the same purpose, but as more and more of the deposits used for settlement purposes are held outside the Federal Reserve, the banking system becomes more exposed to the risk that such funds might be immobilized if a large correspondent bank outside the Federal Reserve experienced substantial operating difficulties or liquidity problems. A liquidity crisis affecting such a large clearing bank could have widespread damaging effects on the banking system as a whole because smaller banks might become unable to use their clearing balances in the ordinary course of business. The Federal Reserve, of course, is not subject to liquidity risk and therefore serves, as the Congress intended, as a completely safe foundation for the payments mechanism. In sum, the major functions of the Federal Reserve System—to conduct monetary policy in the public interest, to provide back-up liquidity and flexibility to the financial system, and to assure a safe and efficient payments mechanism—all have been undermined by recent developments. These developments include, as I have noted earlier, attrition in Federal Reserve membership and the spreading of third-party payment powers to nonbank institutions. DECLINE IN SYSTEM MEMBERSHIP For more than 25 years there has been a continual decline in the proportion of commercial banks belonging to the Federal Reserve. The downward trend in the number of member banks Statements has been accompanied by a decline in the proportion of bank deposits subject to federal reserve requirements. As of mid-1978, member banks held less than 72 percent of total commercial bank deposits, down about 9 percentage points since 1970. Thus, more than one-fourth of commercial bank deposits—and over threefifths of all banks—are outside the Federal Reserve System. DUE TO THE EXCESSIVE COST OF MEMBERSHIP The basic reason for the decline in membership is the financial burden that membership entails. Most nonmember banks and thrift institutions may hold their required reserves in the form of earning assets or in the form of deposits (such as correspondent balances) that would be held in the normal course of business. Member banks, by contrast, must keep their required reserves entirely in nonearning form. The cost burden of Federal Reserve membership thus consists of the earnings that member banks forgo because of the extra amount of nonearning assets that they are required to hold. Of course, member banks are provided with services by Reserve Banks, but the value of these services is insufficient to close the earnings gap between member and nonmember banks. The board staff estimates that the aggregate cost burden to member banks of Federal Reserve membership exceeds $650 million annually, based on data for 1977, or about 9 percent of member bank profits before income tax. The burden of membership is not distributed equally across all sizes of member banks. According to staff estimates, the relative burden is greatest for small banks—exceeding 20 percent of profits for banks with less than $10 million in deposits. Further reductions of reserve requirements within existing statutory limits would do little to eliminate the burden for most classes of banks, especially for the smaller banks. INEQUITY BORNE OF COST BY MEMBER BURDEN BANKS The current regulatory structure is arbitrary and unfair because it forces member banks to bear to Congress 115 the full burden of reserve requirements. Only member banks must maintain sterile reserve balances; nonmember banks, which compete with members in the same markets for loans and deposits, and thrift institutions, which increasingly are competing in the same markets, do not face similar requirements. Thus, members are at a competitive disadvantage relative to other depositary institutions. Among the major countries in the free world, only in the United States has this legislated inequity been imposed on the commercial banking system. It is no wonder that member banks continue to withdraw from the Federal Reserve. SPREAD OF THIRD-PARTY PAYMENT POWERS At the same time, the spread of third-party powers to thrift institutions is further increasing the proportion of transactions balances outside the control of the Federal Reserve. Commercial banks' virtual monopoly on transactions accounts, maintained in the past because of their ability to offer demand deposits, is being eroded. Moreover, recent financial innovations have led to widespread use of interest-bearing transactions accounts at both nonbank depositary institutions and commercial banks. These developments have increased both the costs and competitive pressures on banks, no doubt compelling members to reevaluate the costs and benefits of membership and thus playing a significant role in membership withdrawals. The payments innovations since 1970 are well known to this committee, and include limited pre-authorized " b i l l - p a y e r " transfers as well as telephone transfers from savings accounts at banks and savings and loan associations, negotiable order of withdrawal (NOW) accounts at practically all depositary institutions in New England, credit union share drafts, automatic transfers from savings deposits, and the use of electronic terminals to make immediate transfers to and from savings accounts. Growth of these transactions-related, interest-bearing deposits has been most dramatic in recent years. For example, N O W accounts in New England have grown from practically zero in 1974 to 8 percent of household deposit bal- 116 Federal Reserve Bulletin • February 1979 ances in mid-1978, and one-third of these N O W deposits are at thrift institutions. The intense competition engendered by the introduction of N O W accounts has been accompanied by an acceleration of member bank attrition in New England to a rate well beyond that of the nation. This increase in member bank withdrawals is clearly not just coincidental. There is no sign that the intense competition will abate. Savings accounts authorized for automatic transfer have grown rapidly at commercial banks across the country since their introduction November 1; and in New York, N O W accounts, which were authorized November 10 for all depositary institutions in the state, have been increasing vigorously. In addition, the Federal Home Loan Bank Board has announced its intention to authorize savings and loan associations to oiler payment order accounts, or POAs, which are interest-bearing deposits that can serve many of the same functions as NOWs. These developments have caused the distinctions among banks and thrifts with respect to the " m o n e y n e s s " of their deposits to become increasingly blurred and have prompted the Federal Reserve to reevaluate its existing measures of the monetary aggregates and to consider possible readjustments to reflect the changing institutional environment. The most basic measure of transactions balances, M - l , clearly should include more than just currency and commercial bank demand deposits. And, the broader aggregates may be redefined to emphasize distinctions by type or function of deposit rather than by the institution in which the deposit is held. Changing the money measures to reflect economic reality, including the wider role played by depositary institutions other than member banks in the monetary system, would be complemented by legislation for universal reserve requirements. LEGISLATIVE IN THE RIGHT PROPOSALS POINT DIRECTION The Monetary Control Act of 1979, H.R. 7, introduced by the chairman of this committee, represents a constructive approach to improving monetary control and reducing the inequities in markets in which depositary institutions are competing. This bill proposes universal reserve requirements by establishing a reasonable set of reserve ratios applicable to all deposits at commercial banks and to transactions balances at thrift institutions. The definition of transactions accounts includes not only demand deposits but also the growing number of new third-party payments accounts. Such an approach puts all depositary institutions on an equal competitive basis in the market for transactions deposits and helps assure the continuation of a reserve structure needed for the efficient conduct of monetary policy. Under this legislation all commercial banks and thrift institutions with transactions accounts would have access to the Federal Reserve discount window. The Federal Reserve could then act as a "lender of last resort" to a broader class of depositary institutions and thereby enhance the overall safety and soundness of the depositary system, as well as providing more flexibility to financial institutions to respond to changing monetary policy. The bill also gives all depositary institutions access to Federal Reserve services. With the application of an appropriate pricing schedule for such services, this action should improve the efficiency of the payments mechanism, which underlies all of the nation's economic transactions. But I should emphasize that open access to system services, desirable as it may be, is only practicable if the so-called membership problem is resolved, as H.R. 7 does in principle. Without resolution of the membership problem, open access at an explicit price set for all institutions would only exacerbate the problem and lead to even greater reduction in the Federal Reserve's deposit coverage, since services would be available to nonmembers without bearing the burden of reserves. BUT CERTAIN H.R. 7 ARE MODIFICATIONS OF NECESSARY The various features of H.R. 7 redress much of the growing competitive inequity among financial institutions and provide a potentially improved framework for enhancing the implementation of monetary policy. However, as drafted, certain provisions of this legislation compromise the improvement in monetary con- Statements trol that universal reserve requirements could foster. First, the exemption from any reserve requirement of the first $50 million of transactions balances and the first $50 million of other deposits reduces somewhat from present levels the proportion of deposits subject to federal reserve requirements. More importantly, though, the rather complex procedure for indexing the exemption would mean that the proportion of deposits subject to direct Federal Reserve control could not increase over time. Hence, the board believes that the bill needs to be modified, and it has a proposal that will both enhance monetary control and preserve for all institutions the earnings protection of the exemption contained in the bill without increasing the cost to the Treasury from that associated with H.R. 7. PARTICIPATION EARNINGS IN FEDERAL FOR EXEMPTED RESERVE DEPOSITS The board's proposed modification involves establishment of an "earnings participation acc o u n t " at the Federal Reserve to be held against deposits exempted by H.R. 7 from reserve requirements. To reduce the recordkeeping burden, small institutions could be excluded from having to hold this account. This exclusion could amount to the first $10 million of transactions deposits at each institution and $10 million of other deposits at each commercial bank. For banks, with respect to all deposits, and for other depositary institutions, with respect to transactions deposits, their earnings participation account would be held against deposits above the $10 million exclusion and up to the amount of the $50 million exemption in H.R. 7. The size of this earnings participation account for each deposit category would equal the reserve ratio applicable to deposits in that category times the amount of deposit liabilities between $10 million and $50 million. To the extent that an institution holds vault cash in excess of its required reserves on nonexempt deposits, the size of the earnings participation account would be reduced correspondingly. This provision reduces the possibility that institutions would build up their excess reserves, which would tend to Congress 117 to increase the slippage between reserves and deposits and thereby diminish monetary control. In a comparison of the impacts of the board's proposal with H . R . 7 and with the current reserve system, the board's modification has the advantage of greatly increasing the proportion of commercial bank transactions deposits covered by an account at the Federal Reserve— from the present 73 percent to 94 percent. This would be accomplished even though the $10 million exclusion would mean that 45 percent of all commercial banks, as well as virtually all thrift institutions, would not be required to hold any account at the Federal Reserve. At the same time, the number of banks holding nonearning reserve balances at Federal Reserve Banks would be as low as under H . R . 7. The number would be sharply reduced from the current level of 5,664 to an estimated 656. Finally, the effect on bank earnings would be virtually the same under either H . R . 7 or the bill as modified by the board's proposal. The difference would be that under our proposal, banks would hold some assets in the form of the earnings participation account rather than as market investments or loans. The return on this account would be equivalent to the average return on the Federal Reserve's portfolio, which includes both short- and long-term securities. In some years this return might be higher than banks would earn on other assets—which are likely to be a combination of loans and liquid instruments—and in some years, less. On average, over time, there should be little difference. I would like to underline the advantage of bringing transactions-type deposits at thrift institutions under reserve requirements in this manner. It will be several years, at least, before any significant number of thrift institutions would actually have to hold nonearning reserves at the Federal Reserve. Currently, no savings and loan association or credit union has transactions deposits in excess of the $50 million exemption. Only eight mutual savings banks have transaction accounts in excess of the exemption, and each has vault cash considerably in excess of the reserve requirement that would apply to such deposits. In a listing of individual member and nonmember commercial banks and mutual savings 118 Federal Reserve Bulletin • February 1979 banks similar to that shown on pages 17 to 65 of the committee print, Description of the Monetary Control Bill, an asterisk indicates a bank added to the list by the board's proposal—that is, one with deposits above the excluded level but below the exempted level. These added banks would hold an earnings participation account (EPA) at the Federal Reserve, but they would not hold any nonearning required reserves balance at Reserve Banks because their deposits are below the exempted level. Banks without an asterisk were on the committee list before, and their nonearning reserve balance is affected exactly the same as in H.R. 7. The column entitled EPA shows the amount of the earnings participation account each institution would hold. If this column is zero, the bank at the end of 1977 had sufficient vault cash in excess of its required reserves so that it would have had no EPA. Thus, the additional institutions brought under Federal Reserve control would keep the earnings benefit of the exemption level proposed by H.R. 7, since they would participate in the Federal Reserve's earnings on the balances that they would be required to maintain in the EPA. Moreover, the cost to the Treasury would be no different under the board's proposal than under the proposed bill. Under the board's plan, the Federal Reserve would earn additional interest on the greater amount of balances that would be held at Reserve Banks, thereby offsetting the cost of the depositary institutions' EPAs. In sum, the board proposal would have the clear advantage of expanding significantly the coverage subject to reserve requirements, thereby enhancing the implementation of mone- Statement by G. William Miller, Chairman, Board of Governors of the Federal Reserve System, before the Committee on the Budget, U.S. House of Representatives, January 25, 1979. Mr. Chairman, members of this distinguished committee, I am pleased to be able to participate in these important hearings. It is my hope that tary policy. At the same time, it would sustain the earnings benefits of the exemption level for all depositary institutions—at no additional cost to the Treasury. Finally, exclusion of the first $10 million of transactions-type deposits and $10 million of other deposits from the earnings participation requirement would reduce the recordkeeping burden of the proposal, with relatively modest policy impact. The board has suggested a series of amendments to H.R. 7 that would implement the proposed modification. Another modification proposed by the board concerns affiliated institutions. Providing an exemption from required reserves of $100 million in deposits gives an incentive to banks to form new, affiliated commercial banking entities in lieu of branch offices in order to avoid the requirement to hold sterile reserves. A bank as large as $100 million would already enjoy many of the economies of scale associated with larger banking operations. Thus, the cost of creating new banks would be small relative to the benefit of avoiding reserve requirements. To eliminate this potential loophole, the board proposes that affiliated commercial banks be limited to a total exemption equal to the number of such institutions as of August 1, 1978, times the exemption levels specified in the bill. Mr. Chairman, I want to thank you for the opportunity to present the Federal Reserve's view on the Monetary Control Act of 1979. This bill deals constructively with issues of crucial importance to the long-run viability of the nation's central bank and to the health of our financial system. The problems are difficult, but considerable progress has been made in recent months toward achieving a solution that promotes the public interest. • by expressing the views of the Board of Governors of the Federal Reserve System on the nation's economic problems and prospects, I can be of some assistance to you as you frame the First Concurrent Budget Resolution for the 1980 fiscal year. The current economic expansion is nearing its fourth anniversary. This makes it quite venerable in comparison with past cyclical up- Statements swings—especially when one exempts from consideration those that have owed their longevity to the stimulus of war spending. More important, it has achieved this ripe age without losing its vitality. Although the growth of activity has slowed in the past year from its earlier very brisk pace, the gains have continued to exceed the trend rise of potential output and have produced sizable increases in employment. Real gross national product advanced 414 percent over the past four quarters, as compared with the 5V2 percent average annual rate of increase during the earlier stages of the expansion. Total employment rose 3.3 million during 1978—just slightly less than in the preceding year. This was enough to cut the overall rate of unemployment almost 1/2 percentage point to 5.9 percent despite continued rapid growth of the labor force. The progress of the past year has, in fact, appreciably narrowed the margin of unutilized resources in the economy. Utilization rates for industrial capacity have risen, and although by and large they remain below the peaks of some earlier cyclical upswings, there are some areas of tightness. Similarly, in labor markets the overall unemployment rate is still rather high by historical standards, but there is growing evidence of tautness in various sectors, and firms generally are finding it increasingly difficult to hire workers with needed skills. These developments are a normal accompaniment of economic expansion and to date have not reached toublesome dimensions. However, we certainly have arrived at a stage in which resource constraints could quickly become a serious problem if aggregate demand were permitted to grow faster than productive capacity. The importance of this consideration cannot be overstated because inflation is an urgent concern and a clear danger to the health of our economy. Even in the absence of excessive aggregate demand pressures last year, inflation accelerated markedly. The general level of prices rose about 8% percent, versus 6V2 percent in 1977. Special factors such as the influence of poor weather and the beef cycle on farm prices played a role in this disappointing performance, but there was also a broad intensification of price pressures across the economy associated with rising unit labor costs. Pay rates to Congress 119 increased somewhat faster, reflecting in part a hike in the federal minimum wage, and employers were confronted with bigger tabs for social security and unemployment insurance. With productivity virtually unchanged, unit labor costs rose about 9 percent in 1978, 2 percentage points more than in 1977. The worsening of U.S. price trends was a major cause of the dollar's weakness in foreign exchange markets last year. Although the program announced by the Treasury and the Federal Reserve on November 1 succeeded in strengthening the dollar, its average exchange value against other major currencies, on a tradeweighted basis, has registered a net decline of 15 percent since September 1977. This depreciation in turn is having a significant impact on domestic inflation, by raising import prices and reducing competitive restraints on the prices of domestically produced goods. The effect on the U.S. price level last year probably amounted to about 1 percent, and further inflationary effects will be felt this year and next. It is quite clear that last year we passed from a phase in the economic cycle when the focus of concern is properly the insurance of strong aggregate demand to one in which emphasis must be placed on the avoidance of inflationary excesses. The Federal Reserve had begun to assume a less accommodative stance in 1977, but the movement toward restraint accelerated in 1978. System resistance to inflated demands for money and credit was reflected in a substantial rise in market rates of interest. Yields on short-term market instruments generally rose 3 to 4 percentage points last year, while most long-term rates rose a percentage point or more. These are sizable increases and they brought many rates close to, and in a few cases slightly above, their 1974 peaks. However, this increase in interest rates did not occasion the wrenching of financial markets that has seriously disrupted economic activity on some past occasions. There are two reasons for this. One is that current interest rate levels are not extraordinary after allowance is made for the prevailing state of inflationary expectations. Nominal interest costs of 9 or 10 percent would have been a severe deterrent to credit-financed spending in periods when inflation was more subdued; bor- 120 Federal Reserve Bulletin • February 1979 rowers are much more willing to pay such rates, however, when they expect incomes and prices of goods to rise at paces comparable to those experienced recently. The second reason that we have avoided what is commonly characterized as a "credit crunch" is the structural changes that have occurred in the nation's financial markets. Among the most noteworthy of these is the action taken by the federal regulatory agencies last spring to ease the restriction on interest rates that depositary institutions may pay on time accounts. The new six-month money market certificate, whose ceiling varies weekly with Treasury bill rates, has provided banks and thrift institutions with an instrument that can compete effectively for savings even when i n v e s t rates on market securities are relatively high. Thus, we have not seen the disintermediation of loanable funds that might have abruptly curtailed the availability of credit—at any reasonable price—to homebuyers and other borrowers who are heavily reliant on the depositary institutions for financing. This is not to say that rising interest rates have been stripped of their impact on economic developments. The increase in rates last year contributed to a slowing in the growth of the monetary aggregates and to a reduction in aggregate credit flows to the nonfinancial sectors of the economy. In the process, monetary policy worked to moderate the expansion of economic activity. At the same time that the Federal Reserve was moving in the direction of restraint, the Congress and the administration were adjusting their fiscal plans to take account of the reality of unexpectedly rapid inflation. At this time last year, attention was being focused primarily on an expected need to provide stimulus to the economy in fiscal year 1979. The First Concurrent Budget Resolution specified a federal deficit of almost $60 billion—an increase over FY 1978. Subsequently, when it became evident that economic circumstances had changed, there was a significant shift in the direction of fiscal policy. This committee and its counterpart in the Senate are to be commended for their timely action in reducing the deficit in the Second Budget Resolution to $39 billion. The discussions now under way deal, of course, with the 1980 fiscal year. This period, commencing next October, seems quite distant in terms of our ability to project with precision the condition of the economy. We must, however, base our policy judgments on a tentative assessment of the likely trajectories of production, employment, and prices. There is a broad consensus that inflationary pressures are going to remain strong for some time and that governmental policies will have to be designed with containment of those pressures as a high priority. There is considerably less accord regarding prospects for economic activity. The Federal Reserve does not consider a recession desirable. " S t o p - g o " patterns of econ o m i c g r o w t h have d i s c o u r a g e d p r o d u c tivity-enhancing investment and brought no lasting relief from inflation. A policy directed at fostering a sustained, though modest, rise in economic activity in the period ahead offers the best hope of achieving progress toward the nation's economic goals. It is our assessment that conditions do, in fact, favor continued expansion. An examination of available indicators suggests that the economy currently is in reasonably good balance. The final quarter of 1978 was a strong one, with real GNP rising at an annual rate of about 6 percent and sizable gains being posted in employment and income. This momentum, coupled with the tax cut that takes effect this month, should impart considerable strength to final demand in the current quarter. It is to be expected that, as time passes, growth in consumer spending will moderate from its recent exuberant pace. The proportion of disposable personal income devoted to consumption has been exceptionally high of late, and with household debt burdens at record levels, consumers are likely to spend a little less freely in the year ahead. In the business sector, advance indicators of plant and equipment expenditures have given mixed signals. Surveys of spending plans point to somewhat smaller gains in outlays for this year than last, but data on actual orders and contracts have suggested a fairly robust investment demand. On balance, it appears reasonable to expect that capital outlays will continue to rise, with some upward revision in spending plans possible as confi- Statements dence in the sustainability of expansion is bolstered. Businessmen will likely maintain their cautious policies with respect to inventories, but stocks generally are lean and so there is little present danger of a recession-inducing effort to cut back inventories. Housing starts will probably begin to taper off soon from the high plateau of the past year, as the rise in mortgage interest rates affects housing demand. The decline in residential construction promises to be moderate by comparison with past building cycles, however, because of the strong underlying demands associated with demographic trends and because credit will remain generally available except, perhaps, where local usury ceilings are a barrier. Government purchases of goods and services probably will post only a small increase in 1979, as the national mood expressed in Proposition 13 and like measures suggests that public spending will not exhibit the buoyancy of past years. Finally, our trade balance should improve markedly, reflecting the impact of relatively faster economic growth abroad and the lagged eff ects of exchange-rate changes on both exports and imports. In all, real GNP expansion seems likely to persist at a modest pace over the course of 1979. Unemployment could well drift upward in such an environment, but at this time there is no foreseeable development of cumulative imbalances that will cause the economy to go into recession during this year. Any rise in unemployment implies social costs that one would wish to avoid. It is most certainly true as well that there are dangers that unanticipated shocks—from international or domestic sources—could cause the economy to slip into recession. But an effort to bolster aggregate demand through more expansive monetary or fiscal policies would be fraught with even greater perils. We simply cannot afford at this juncture to risk an intensification of inflationary pressures. A further acceleration of inflation—or even a significant reduction in confidence here or abroad in the government's commitment to gain control of the general price level—would set in motion forces that almost surely would lead eventually to a serious economic downturn. to Congress 121 The monetary and fiscal actions taken over the past year to slow inflation have only begun to exert their effects. The administration's wage-price standards and other anti-inflation initiatives can be successful only if they are backed up by macroeconomic policies of restraint. We must not despair because an inflation that has been woven into the fabric of the economy over the course of a decade has not been and cannot be brought to a halt within a short interval. This is a time for patience. We must find the courage to adhere for a sustained period to the course of policy we have charted. The implications for federal budgetary strategy are, I think, clear. From the standpoint of aggregate demand control, we must continue on a path toward a balanced budget. By moving as promptly in this direction as economic circumstances permit, undue reliance on monetary policy can be avoided and pressures on our financial markets can be minimized. The reduction in federal credit demands associated with a smaller deficit would release financial resources to the private sector. The dimensions of the Treasury's presence in the credit markets during recent years are inadequately recognized. In addition to the massive unified budget deficits that have been recorded year after year, the government has had to finance a growing range of off-budget activities. The federal off-budget agencies ran up a $10 billion deficit in FY 1978, and it appears that the figure for the current fiscal year will be at least as large. The consequences of this for Treasury borrowing are indicated in an attached chart. 1 Since the beginning of this decade, the outstanding Treasury debt has much more than doubled, absorbing billions of dollars of credit that could have been used productively in the private sector. Our chances of solving the problem of inflation would also be enhanced if we could slow the growth of federal spending and thereby reduce the size of the government sector in the economy. This would do much to improve the climate for private capital formation. The mod- 1 The attachments to this statement are available on request from Publications Services, Division of Support Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. 122 Federal Reserve Bulletin • February 1979 ification of our tax structure to encourage saving and investment would have a similar salutary effect. Our nation has paid a heavy price for its having given inadequate attention to the need for business investment. Our capital stock has not grown as rapidly as our labor force in recent years, and this has played a major role in the poor performance of productivity. Over the past five years, annual gains in output per hour in the nonfarm business sector have averaged less than 1 percent as compared to Wi percent in the preceding five years, and 2% percent during the first two decades of the postwar period. This slowdown has retarded the rise in living standards and has aggravated our inflation problem through its adverse impact on unit labor costs. We should set our sights on achieving substan- tially higher levels of business investment in the years ahead. The budgetary policies I have described imply a period of austerity. During this period, resources would be diverted from private consumption, and, at the federal level, new spending programs may have to be delayed and existing programs reexamined to ensure that they are meeting social needs effectively and economically. I believe that the American people are prepared to make this sacrifice in order to win the battle against inflation. They recognize that inflation is eating away at the foundations of our economic structure and imposing a cruel toll on those in our society who can least afford it. It is incumbent upon those of us in government to respond with prudent and realistic policies. • Statement by Philip E. Coldwell, Member, Board of Governors of the Federal Reserve System, before the Committee on Banking, Housing and Urban Affairs, U.S. Senate, January 26, 1979. 5.4 percent over estimated 1977 expenses. I am pleased to report that preliminary results for 1978 were $718 million or 5.3 percent above the year earlier. Similarly, the Reserve Banks reduced employment by 650 people compared with our budget estimate of a 486-person decline. All of this occurred despite an estimated 7 percent increase in the volume of measured activities and enlarged responsibilities in supervision and regulation. The Board of Governors' operating expenses estimated for 1978 were below the operating budget by $750,000 or 1.6 percent. Here again, volume increases and new programs were implemented by internal reallocations of personnel and funds. We estimate that unit costs of measurable production at the Reserve Banks declined sharply during 1978 despite the 8 percent inflation rate and rising labor costs. Such increases in productivity reflect the system-wide commitment to operational improvements and the intensified cost competition among the Reserve Banks. While the dramatic improvements of 1974-78 seem likely to slow in coming years, these are still some improvements, which we hope to realize in the period ahead. Mr. Chairman, on behalf of the Board of Governors of the Federal Reserve System, I am pleased to comply with your committee's request to testify on the Federal Reserve System's 1979 budget. In my closing remark last February at the 1978 hearings, I stated: " T h e Board believes that its review and budget processes have created an atmosphere of cost-consciousness that has resulted in better productivity, cost efficiency, service to the public, and ultimate savings to the tax-paying public." This testimony on the results for 1978 and the planned 1979 budgets of the Federal Reserve Banks and the Board of Governors, in our view, provides confirmation of that statement. 1978 EXPERIENCE You will recall that the 1978 Reserve Bank operating budgets were set at $722.2 million or Statements 1979 BUDGET FOR THE FEDERAL RESERVE BANKS The Board of Governors approved a budget of $754.0 million for the operating expenses of the Federal Reserve Banks in 1979, an increase of $36.0 million or 5.0 percent over estimated 1978 expenses, but this amount has been reduced by $1.3 million due to a recent decision on retiree benefits. The adjusted 4.8 percent increase in operating expenses compares with an average annual growth rate of 13.6 percent from 1970 through 1974; 7.5 percent from 1974 through 1977; and a 5.3 percent increase in 1978. Capital outlays are estimated to be $72.5 million in 1979, increasing $4.8 million from the 1978 estimate and providing primarily for data processing and data communications equipment; new building projects at Baltimore, Miami, and San Francisco, and renovations; high-speed currency equipment; and building machinery and equipment. Total outlays of funds (capital plus operating expenses adjusted for depreciation) are expected to reach $802.7 million, representing an increase of 4.4 percent over estimated 1978 outlays. In 1979, the Federal Reserve Banks anticipate operating with a staffing level of 23,161, a decrease of 489 employees or 2.1 percent from the 1978 estimated level, which was 650 employees or 2.7 percent below the 1977 level. During the five-year period beginning in 1974, employment has been reduced by 3,482, an average annual rate of decline of 2.8 percent. Productivity gains, adjusted to reflect the costs of substituting capital for labor, average 9.9 percent per annum from 1974 through projected 1979—a rate considerably higher than estimates for the private sector. The 1979 budget-year estimate of this productivity measure is 8.3 percent. Having reviewed the Federal Reserve Banks' expense and employment records, I would now like to describe the activities for this year by four groups of expenses, which represent the ongoing Federal Reserve Bank responsibilities expressed in terms of the broad categories of output generated by the system. These groups are on a fully costed basis, reflecting realloca- to Congress 123 tions from support and overhead services necessary to ensure the continuity and/or the efficiency of operations. Expenses for services to financial institutions and the public and those for services to the U.S. Treasury and government agencies constitute 75 percent and 11 percent, respectively, of the budgeted 1979 expenses. With a projected increase in volume from 1978 to 1979 of 6.9 percent, expenses for services to financial institutions and the public are projected to increase 4.8 percent or $26.0 million and expenses for services to the U.S. Treasury and government agencies are projected to increase 3.6 percent or $2.9 million. In these volume-related areas, unit costs are projected to decline 2.2 percent without adjusting for inflation. Services to financial institutions and the public primarily relate to the payments mechanism function and the cash function. During 1979, the production of payments services will be most affected by the promotion of the automated clearinghouse program. This program involves expanding automated payments as an alternative to paper checks. These automated payments will be faster, cheaper, and more reliable than paper entries. The major components of the,program will be to stimulate the growth of automated clearinghouse volume by working with the Treasury and the National Automated Clearing House Association to plan new programs and improved operating schedules and to improve system automated clearinghouse operations. Increased governmental electronic payments and increased private debit and credit transactions in 1979 are expected to raise substantially automated clearinghouse volume. Before leaving our plans for the payments system, I should mention something about Federal Reserve float, which has had an upward trend over the past few years, particularly in 1978. Part of this trend is due to the rising dollar volume of checks processed through the Federal Reserve—up about 57 percent since 1974. As this committee is aware, the Federal Reserve System has been concerned with reducing its operating costs, and this has involved a learning process to balance properly cost reductions, float, quality of service, and our regulatory and supervisory responsibilities. 124 Federal Reserve Bulletin • February 1979 The cash concentration and cash management practices of corporations interested in maximizing the time value of funds have increased the potential for exploiting the Federal Reserve's deferment schedule and its float. Remote disbursement is an abuse of the check collection system that the board is working to eliminate and you have been provided with a report on this matter. Another cause that has had an impact on system float, particularly during the past two years, is severe weather and its effect on the movement and clearing of checks. The system is very concerned with the causes and effects of its rising float and is taking steps to reduce it. I anticipate improvements in this area and believe that the system will be successful in reducing its float this year. In the cash function, the $1 coin will be introduced in 1979, and more high-speed currency equipment will become operational. The high-speed currency equipment will count the currency, detect counterfeit notes, sort mixed denominations, determine the fitness of notes, and destroy notes deemed unfit for circulation, all at the rate of about 50,000 notes per hour. Utilization of these machines will provide a better quality of currency to return to circulation, provide a greater degree of accuracy, and reduce the level of manual involvement. Services to the U.S. Treasury and government agencies are primarily concerned with savings bonds, other Treasury issues, and food stamp activities. Two developmental projects in this area are expected to be completed in 1979. Both relate to the marketing, safekeeping, and servicing of U.S. government securities. One project involves identifying future control safeguards and other operational factors that must be considered in transferring government securities among Federal Reserve Banks by automated means. These findings will be coordinated with those from other areas, such as funds transfers, in the final design specification for the Federal Reserve communications requirements in the 1980s. The second project involves the joint development and installation of computer programs by San Francisco, Kansas City, and St. Louis in order to automate the transferring of securities and the accounting for collateral. This pilot resource-sharing project is designed to achieve more cost reductions through joint planning, development, and implementation of transportable computer software. Expenses for activities involving supervision and regulation constitute 9 percent of the budgeted 1979 expenses and are expected to exceed the estimated 1978 level by $4.9 million or 7.8 percent. This area has been heavily impacted in recent years by the added responsibilities of consumer regulations, bank holding company supervision, and processing of holding company applications. In 1979 the workload will be further intensified due to the passage of the International Banking Act, the development and expansion of data surveillance systems, the added applications processing requirements established by the Community Reinvestment Act, and the implementation of various sections of the Financial Institutions Regulatory and Interest Rate Control Act. A major project expected to be completed in 1979 involves the review of all Federal Reserve regulations to determine the organizational scheme and framework within which all Federal Reserve regulations should be issued and to determine the extent to which they are meeting current policy goals. In addition, the review will require that we redraft all Federal Reserve regulations to incorporate changes in policy, format, and style. The expenses of the final expense group, monetary and economic policy, constitute 5 percent of the budgeted 1979 expenses and are expected to exceed the estimated 1978 level by $2.2 million or 6.0 percent. This service area provides economic information and analysis necessary for effective conduct of monetary policy and for bank regulatory policy decisions both at the district and system levels. During 1979, expanded programs will encompass evaluation of new market developments, research on various aspects of monetary control, and regional and local research, together with reviews of many statistical collection and reporting requirements. The adjusted $34.7 million increase in 1979 budgeted Federal Reserve Bank operating expenses over 1978 estimated expenses is primarily attributable to salaries and benefits, which account for 58 percent or $20.3 million of the total increase. Retirement and other ben- Statements efits expenses are expected to increase 7.4 percent due to increased contributions for both current-service and retired personnel. Current service benefits will increase due to higher rates for Social Security, group life insurance, and hospital and medical insurance, and due to the higher salary base. Salary expenses for officers and employees are budgeted to increase 4.3 percent, reflecting the planned 2.1 percent decrease in employment and a 6.5 percent increase in average salary per capita. This personnel compensation program is within the President's guidelines for wage and benefit increases. The Federal Reserve Banks' policy for salary programs is to set wage levels on the basis of salary movements within the respective communities. These movements are estimated through periodic surveys of salaries of both financial and nonfinancial corporations that represent major employers within each market. This broad-gauged reference is maintained in order that the Federal Reserve Banks can draw from a pool of workers with experience in several different industries. Increased equipment expenses represent 14 percent of the total budget increase with an increase in equipment depreciation, repairs, and maintenance being partially offset by a decrease in equipment rentals. The rise and fall in these expense categories reflect the transition from rental to owned equipment, equipment upgrading, and the acquisition of high-speed currency processing equipment. The increased cost of Federal Reserve currency accounts for another 13 percent of the advance in the total budget of the Federal Reserve Banks. This expense is largely beyond the control of the Federal Reserve Banks since the Bureau of Engraving and Printing sets the price for printing and the public demand determines the volume to be issued. Such costs are expected to increase more than $4 million over 1978, reflecting a higher unit price from the bureau and a larger demand for currency. Increases in building-related expenses include higher property depreciation, primarily reflecting completion of the new Richmond Federal Reserve Bank building. In addition, utility expenses are expected to increase due to higher rates. to Congress 125 The $1.7 million increase in postage and other shipping expenses reflects a 6.2 percent and a 1.5 percent increase, respectively. The relatively low increase in other shipping expenses is attributable to the pursuit of favorable contractual arrangements with carriers. There are recent developments, however, which may reverse these gains. Decisions by the Department of Labor with confirmation by the Department of Justice may force the system to comply with the Service Contract Act for all these services. Courts, in prior years, have held that Federal Reserve Banks were not agencies of the federal government for purposes of legislation of this kind. If this new position is sustained, we expect millions of dollars to be added to the cost of our transportation services since we will have to pay union scale wages, even in areas of the country where market alternatives are available at considerably lower prices. 1979 BOARD BUDGET OF FOR THE GOVERNORS The 1979 approved operating budget for the Board of Governors is $49.9 million, representing an increase of $2.9 million or 6.2 percent over 1978. This increase compares with the federal government's fiscal year 1979 budget increase of 9.3 percent over fiscal year 1978 and the projected fiscal year 1980 budget increase, which is 7.7 percent over fiscal year 1979. The board's 1979 year-end authorized position level is projected at 1,510, a reduction of 68 from the 1978 year-end authorized level of 1,578. Staffing projections in 1979 comply with the hiring constraints of the federal government. The significant reduction in authorized positions at the board will be accomplished by continuing improvements in productivity and efficiency and by eliminating or reducing low priority functions. In making these reductions in staff, the board is accepting some risk of reduced responsiveness to new tasks but feels this action is appropriate to government policy. The supervision and regulation of financial institutions, including their role in consumer affairs, is the only area of board responsibility 126 Federal Reserve Bulletin • February 1979 in which significant growth is expected in 1979. The resources allocated to this area will increase by 9.7 percent as we move to strengthen compliance review, and our ability to meet new requirements imposed by the Congress in the Community Reinvestment Act, the Financial Institutions Regulatory and Interest Rate Control Act (FIRA), and the International Banking Act. The resource impact of this legislation has not been completely assessed, and additional funding is likely to be required. For example, the Financial Institutions Regulatory Council established by FIRA has not been activated. Therefore, associated support requirements have not been determined and no budget provision has been made. A budget supplement probably will be needed to cover these costs. The increase in the board's operating budget mainly reflects a 5.5 percent increase in salaries, retirement, and employee insurance (excluding lump sum payments for retiree cost-of-living increases and cost of new legislative mandates). These personal services account for 80 percent of the board's operating budget. Nonpersonal services are being held to an increase of 1.5 percent. This low rate is attributable to: (1) savings in rentals resulting from a move of elements of the board's staff from rented to board-owned facilities, and (2) economy measures taken throughout the board's operations. The board's capital budget totals $1.2 million, representing a reduction from 1978 estimated capital outlays of $8.1 million. The funds in this capital budget were previously approved by the board to cover the renovation of the main board building and construction of additional offices in our annex building. Both projects will be completed in mid-1979. SUMMARY The system policy of reducing resource expenditures has been expressed and achieved through setting objectives, adapting established budgeting procedures to meet the organization's framework, and emphasizing operations improvements. The 1979 budget objective for the Federal Reserve Banks limited the increase in total expenses to 4.5 percent to 6.5 percent while providing for continued high quality in all system services and continued investment in improvement of system activities. The projected 4.8 percent increase in total expenses over the 1978 estimate conforms with the board-approved budget objective, which assumed total salary expenses would not exceed 5.0 percent system-wide, while employment would decline 1.5 percent. This assumption compares with a budgeted increase of 4.3 percent in total salary expenses and a decline of 2.1 percent in employment. Similarly, the board's 1979 budget was developed under tight constraints. The board established an initial 7.35 percent limitation on the increase in total operating costs over the 1978 estimated expense base, and a 5.5 percent limitation on the increase in personnel costs. Since the costs of continuing board operations at the 1978 resource level would have required an increase of more than 9 percent, the effect of these constraints is a marked reduction in resource levels below those of 1978. In the preparation of the 1979 budgets, the Federal Reserve Banks experimented with the use of zero-base budgeting in their planning and budgeting systems. While there were widely varying applications of zero-base budgeting, the consensus is that the process did assist the Reserve Banks in their 1979 planning processes by concentrating on the reevaluation of existing programs, reviewing program and resource alternatives, and redirecting resources between new initiatives and programs in place. During 1979 several Reserve Banks intend to integrate zero-base-budgeting concepts further into their management processes and to test the possibility of establishing a rotating zero-base review process. As with the 1978 budget, the board's divisions used zero-base-budgeting procedures to develop their program budgets, including data processing resource requirements. The zerobase decision packages were used as the basis for budget reviews conducted by staff and members of the board serving on various oversight committees. The effect of these reviews was to reduce already constrained budget re- Statements to Congress 127 quests by some $1.9 million and to eliminate 68 positions, bringing the projected 1979 authorized staffing down to near the 1974 level. In summary, the performance record of the Federal Reserve Banks and the Board of Governors in 1978 and their operating plans for 1979 indicate continued improvement in efficiency. While the volumes of existing services are ex- pected to rise approximately 7 percent and substantial new regulatory requirements face the system in 1979, further reductions in staff are anticipated and increases in expenses are expected to be held significantly below the rate of inflation. I can assure you, however, that the system firmly intends to maintain the high quality of services it provides to the public. Statement by G. William Miller, Chairman, Board of Governors of the Federal Reserve System, before the Joint Economic Committee of the U.S. Congress, January 30, 1979. 1/2 percentage point to just under 6 percent at the end of the year. The further expansion in economic activity last year appreciably reduced the margin of unutilized resources in the economy. Skilled workers were in increasingly short supply, and industrial capacity utilization rates moved closer to peaks reached in recent cycles. In these circumstances, the moderation in economic growth last year was a desirable development since a more rapid rate of expansion in aggregate demand could well have exacerbated our already serious inflationary problems. The general level of prices rose sharply in 1978, with the rate of inflation accelerating to about 83A percent compared with 6V2 percent in 1977. While the moderation in the pace of economic expansion and the lack of significant distortions in major sectors of the economy augur well for the economy's further expansion in the months immediately ahead, the longer-run performance of the economy will depend critically on our success in bringing down the rate of inflation. Containment of inflationary pressures in our domestic economy is also a major prerequisite for strengthening the dollar in foreign exchange markets while reducing our trade deficit. In 1978 the deficit was about $35 billion, on an international accounts basis, and the value of the dollar against major foreign currencies fell 17 percent over the first 10 months of the year. Since November 1, when new domestic monetary policy actions and dollar support measures were initiated, the dollar has risen about 7 percent. The vigorous implementation of the support program through cooperative exchange market Mr. Chairman, members of the Joint Economic Committee, I appreciate the opportunity to participate on behalf of the Federal Reserve Board in your annual hearings on the state of the economy. We find ourselves at an important juncture in our nation's economic progress, a time when patience and persistence are needed until the nation's anti-inflationary economic policies begin to achieve significant results. The current expansion in economic activity has now almost completed its fourth year—an impressive performance by historical standards. The rate of economic growth moderated somewhat in the past year, yet employment gains were exceptionally large, and major imbalances generally associated in the past with a maturing business expansion did not materialize. There were, however, a number of disturbing developments. In particular, the rate of inflation, already far too high, accelerated further; the foreign exchange value of the dollar declined substantially prior to November; and the level of consumer debt rose sharply. Outlays for business fixed investment grew strongly in 1978, and housing activity remained at a high level through the end of the year. Consumer spending, buttressed by further large increases in consumer credit, continued to provide support for the expansion. Total employment rose by more than 3 million persons during the year; although the labor force also increased rapidly, the unemployment rate declined about 128 Federal Reserve Bulletin • February 1979 intervention has been successful. The expansion of Federal Reserve swap arrangements and the marshalling of other resources have proved very useful in correcting the excessive decline of the dollar. However, the longer-run strength of the dollar will depend on reducing our domestic inflation, increasing our exports, and curbing our oil imports. Another worrisome aspect of our economy's performance has been our lagging rate of productivity growth. The poor performance of productivity has retarded the rise in living standards and aggravated the problem of inflation. There are many causes of this retarded growth, some of which hopefully reflect temporary developments, but tax policies that pay insufficient attention to investment incentives and government over-regulation must rank high among the contributing factors. In domestic financial markets, conditions have tightened considerably over the past year. Since the beginning of 1978, short-term interest rates have increased 3 to 4 percentage points; mortgage rates, about IV2 percentage points; and bond yields, about 1 percentage point. Despite higher interest rates, funds for creditworthy borrowers have remained in ample supply. The total volume of net funds raised in credit markets was lower in the second half of 1978 than in the first half, but total credit flows remained large as borrowing by households in the form of mortgages and installment credit continued to expand at a rapid rate. The acceleration of inflation over the past year has required major adjustments in economic policies. In the fiscal policy sphere there has been a dramatic movement toward tighter control over government spending and a related reduction in current and prospective federal deficits. The deficit specified for fiscal 1979 in the First Concurrent Budget Resolution was $60 billion, but this was cut to $39 billion in the Second Resolution. This very impressive reduction was a result of highly commendable actions by the President and the Congress that cut contemplated expenditures and moderated proposed tax reductions incorporated in the original financial plan for the year. More recently, President Carter has announced a budget for fiscal 1980 that would reduce the yearly deficit further—to $29 billion, by far the lowest level in six years. There seems to be widespread support for this initiative, and the prospects favor a further move toward budgetary balance in fiscal 1981 and actual balance by fiscal 1982, if not before. A second policy initiative in the fight against inflation was the administration's introduction on October 24 of a broad-based program calling for voluntary moderation in wage and price actions, the establishment of specific standards for wage and price increases, and the offer of various incentives for compliance. Past experience has suggested that incomes policies are of limited effectiveness in reducing the underlying rate of inflation. Yet, an incomes policy can play an important role in circumstances where more basic economic policies are being redirected in a vigorous way toward the containment of inflation. I am confident that most business and labor leaders will abide by the spirit of an incomes policy if they perceive that the administration, the Congress, and the Federal Reserve are truly determined to bring inflation under control. Monetary policy also moved toward increased restraint in the past year as the Federal Reserve sought to foster financial conditions that would contribute to a reduction of inflationary pressures while supporting continued moderate economic growth. Accelerating inflationary pressures were accompanied by rising demands for money and a tendency for the monetary aggregates to expand at rates that were widely viewed as excessive. In the circumstances, open market operations became progressively less accommodative in the provision of reserves, and the federal funds rate rose from around 6V2 percent in early January to about 10 percent recently. The discount rate was increased in a number of steps by 3L/Z percentage points during 1978, to 9Vi percent. These anti-inflation moves featured actions taken on November 1 in conjunction with the dollar-support program: the system announced an increase of 1 percentage point in the discount rate, imposed a supplementary reserve requirement of 2 percentage points on large-denomination time deposits, and further tightened reserve availability through its open market operations. Statements Growth in the narrowly defined money stock, M - l , slowed sharply in the final quarter of 1978. The cumulative impact of rising short-term interest rates has undoubtedly helped to restrain the growth of money. But recently the public has shown a tendency to economize more than might have been expected on their holdings of cash balances. Persistent high levels of shortterm rates and the availability of alternative transactions-type accounts, such as the new savings accounts with an automatic transfer feature, have probably caused many depositors to shift sizable amounts of funds out of demand deposits. Expansion in the broader measures of money, M-2 and M-3, also moderated late in the year, reflecting not only the sluggish performance of their M-l component but also the weakness in time and savings accounts subject to fixed-rate ceilings. Rising yields on competing market instruments tended to make such accounts increasingly less attractive as the year progressed. In contrast, time deposits paying interest rates competitive with those on market instruments have continued to attract sizable inflows of funds to banks and nonbank thrift institutions. The tightening of financial conditions has been accompanied by erosion of liquidity positions in various sectors of the economy. Mortgage and consumer debt burdens rose sharply in 1978 and the ratio of mortgage and consumer debt repayments to disposable income reached a record high. Borrowing by nonfinancial corporations was concentrated heavily in short- and intermediate-term liabilities, especially bank loans and commercial paper, and the ratio of short- to long-term business debt is now only slightly below the 1974 peak. Commercial banks have reduced their holdings of U.S. government securities and increased their use of interest-sensitive liabilities such as large-denomination CDs and security repurchase agreements. Savings and loan associations have borrowed a record amount from Federal Home Loan Banks. The reduced liquidity of many individuals, business concerns, and financial institutions is likely to exert a moderating influence on credit-financed expenditures. It should be emphasized that the much needed firming in credit market conditions has not been to Congress 129 accompanied by the severe strains and distortions associated with past periods of credit restraint. Current interest rate levels may be inhibiting some potential borrowers, which is the objective of credit restraint, but creditworthy borrowers continue to find funds available at prevailing rate levels. The housing market in particular has continued to attract a relatively abundant share of financing, though at rising interest rates. A key factor in this development was the introduction in June 1978 of new sixmonth money market certificates that have enabled depositary institutions to attract funds by paying prevailing market interest rates. In addition, housing has been supported by the lending activities of the Federal Home Loan Banks, the emergence of new mortgage-related securities, and the improvement of secondary markets for mortgages. The net increase in mortgage debt in the fourth quarter of 1978 was only a little below the record increase in the fourth quarter of 1977. Mr. Chairman, you have asked me to assess the economic outlook. The major threat to the economy is inflation and the concomitant expectations that dominate the setting of prices and wages. Thus, any weakening in our anti-inflationary resolve could seriously damage our domestic economy and have adverse implications for the external value of the dollar. Policies of fiscal and monetary restraint— together with the cooperation of business and labor in the administration's wage-price program—can achieve a gradual reduction in the rate of inflation, with progress becoming evident during 1979. While growth of output and employment is expected to slow this year, a recession is unlikely in the absence of outside disturbances to the economy. A moderate rate of economic growth is likely to avoid financial and economic dislocations, such as overinvestment in business inventories, which in turn could foster a recession later. The economy is already quite close to full employment and any new surge in demand must be prevented since it would only be translated into more inflationary pressures. Spending by consumers, a mainstay of our economic expansion since the spring of 1975, will probably continue to grow but at a reduced 130 Federal Reserve Bulletin • February 1979 pace in light of the increased consumer debt burdens noted earlier. Expenditures on new plant and equipment by businessmen seem likely to be well maintained and they may even increase more than is currently anticipated if visible progress is perceived in the fight against inflation. In the housing area, some decline from the current high level of activity seems probable as financial restraints exert a retarding influence on both builders and homebuyers. Nonetheless, the severely depressed conditions that have periodically affected this sector of the economy will most likely be avoided. Adequate financing for homes will continue to be available, thanks to the wide range of government support programs and the access of lending institutions to market sources of funds such as the new sixmonth certificates. Prospects for our trade balance in 1979 also seem to be brightening. In your letter inviting me to these hearings, Senator Bentsen, you have asked for comments on the appropriate mix of fiscal and monetary policies. In the area of monetary policy, the restraint that has been put in place is achieving welcome results in the form of a reduced rate of monetary expansion. As may be seen from the charts, the monetary aggregates have gener- Statement by Nancy H. Teeters, Member, Board of Governors of the Federal Reserve System, before the Committee on Banking, Housing and Urban Affairs, U.S. Senate, February 2, 1979. It is a pleasure for me to appear before this committee to testify on the important subject of truth in lending simplification. Since I have been appointed to chair the committee of the Board of Governors of the Federal Reserve System that has responsibility for consumer affairs, I look forward to working with you on this and other matters, and I anticipate a cooperative and constructive relationship. Before addressing the principal topic of this hearing, I would like to draw attention to a problem that has arisen regarding the recently enacted Right to Financial Privacy Act, which ally moved into the ranges set by the Federal Open Market Committee. 1 The Federal Reserve is determined to achieve a rate of monetary growth that is consistent with the objective of fostering a decline in the rate of inflation while encouraging moderate economic expansion. The Federal Reserve's task will be eased immensely if fiscal policy remains on the course outlined by the President. Large budget deficits tend to put upward pressure on interest rates as government demands compete with private demands for funds. It is therefore essential for the Congress to resist programs that lead to increased expenditures. A reduced federal deficit, including borrowings by off-budget agencies, would ease pressures on interest rates and allow the Federal Reserve to achieve its monetary growth objectives at lower interest rates than otherwise. A reduced budgetary deficit would also foster a financial environment that encourages greater business investment and would improve the prospects for a period of sustained economic growth and a moderate rate of inflation. • 1 The attachments to this statement are available on request from Publications Services, Division of Support Services, Board of Governors of the Federal Reserve S y s t e m , Washington, D . C . 2 0 5 5 1 . is Title XI of the Financial Institutions Regulatory and Interest Rate Control Act of 1978. Section 1104(d) of that law requires all institutions subject to the act to notify promptly all customers of their rights under the law, and directs the board to prepare a model statement of customer rights. Although the board does not have rulewriting authority under this law, we have been asked to provide guidance as to the meaning of this notification requirement. The act makes no distinction between active accounts and inactive and closed accounts. Thus, it appears that all accounts must receive the statement of customer rights. Not only would this notification requirement be extremely costly and burdensome, but a typical family would receive several identical statements. A Senate bill, S. 37, introduced by Chairman Proxmire, would repeal section 1 104(d). The Statements board's Consumer Advisory Council did not urge repeal of this section but adopted a resolution recommending that the statute be amended to require the statement to be delivered only at the time access is sought to a customer's records. The board has endorsed that recommendation. In so doing, the board was influenced by the fact that this amendment would get the information into the hands of customers at the time they need it. Turning now to simplification of truth in lending, the board continues to believe in the soundness of the basic concepts of S. 2802, which was passed by the Senate last session. The board supports enactment of S. 108 introduced by Chairman Proxmire. Common sense indicates that the act and, I should add, the regulation can and should be improved and simplified so that they will be more effective and less burdensome. The basic cost information most needed by consumers in shopping for credit should be emphasized, that is, the annual percentage rate, the total finance charge, and the payments schedule. Significant information that is less important for shopping purposes should be summarized, but with the details left to the contract. Information that detracts from basic information should appear elsewhere with a reference to its availability. The 1977 Consumer Credit Survey, which was funded by the Federal Deposit Insurance Corporation, the Comptroller of the Currency, and the Federal Reserve Board and conducted by the University of Michigan's Survey Research Center, reinforces the approach taken by S. 2802. The survey asked consumers what credit terms they would want to know when financing a car. The overwhelming majority responded that the annual percentage rate was the most important. At another point in the interview, respondents were given a list of the seven disclosures provided for in S. 2802 and were asked to rank their importance. The results show annual percentage rate, size of monthly payment, and finance charge to be far more important to consumers than other terms. In summary, the board believes that last session's simplification bill provides an excellent basis for the continued consideration of the simplification of truth in lending. to Congress 131 In addition to considering simplification of truth in lending during the last session, this committee favorably reported a bill to regulate the consumer aspects of electronic funds transfers. Many of the committee's recommendations were ultimately enacted as Title XX of the Financial Institutions Regulatory and Interest Rate Control Act of 1978. The portions of the act dealing with limitations on a consumer's liability for unauthorized transfers and for limitations on unsolicited distribution of electronic funds transfer cards go into effect this month. The rest of the act goes into effect in May 1980. The board has begun the process of writing regulations to implement the act. In the course of this process, we have become concerned that consumers will encounter unnecessary difficulty in understanding the rules provided by the new act and confuse them with the provisions of the Truth in Lending and Fair Credit Billing Acts, which govern credit-card and overdraft-type credit. Consumers will be particularly confused in cases when a single card will perform functions subject to the Fair Credit Billing Act (such as a credit purchase) and others subject to the Electronic Fund Transfer Act (for example, a cash withdrawal from an electronic terminal). In some cases, a single transaction may be subject to both acts; for example, a cash withdrawal from a terminal may debit the customer's checking account and access a line of credit at the same time. Even without these complex plans, consumers should not have to learn different rules for the pieces of plastic lying sideby-side in their wallets. In order to minimize consumer confusion, the board recommends that the acts be amended to provide one set of rules governing both credit and electronic funds transfer transactions except when compelling policy considerations dictate different treatment. These recommendations are based upon the assumption that consumers will be best served by one set of rules, which in time they will learn and use. The board's specific recommendations are as follows: 1. The Truth in Lending Act imposes a $50 limit on the liability of a credit-card holder when a card is lost or stolen. The Electronic Fund 132 Federal Reserve Bulletin • February 1979 Transfer Act has a $50, $500, and unlimited liability structure. The board recommends that there be a single set of rules governing liability for unauthorized use. The $50 limit of truth in lending is not sacred, and the concept of electronic funds transfer that culpable consumers should carry a heavier responsibility has appeal. Nonetheless, the approach of truth in lending is more protective of consumers and, we believe, will make electronic payment systems more acceptable to the public. Based upon the experience of credit-card issuers, who often do not impose even the $50 liability for credit-card loss, electronic funds transfer suppliers should not be materially harmed by this amendment. 2. Under the Fair Credit Billing Act, a consumer must write to the creditor in order to take advantage of the dispute resolution rules of the act. The Electronic Fund Transfer Act permits oral notice to the institution, although written confirmation can be required of the consumer. An informal board study indicates that less than 1 percent of consumers with questions about their bills follow the formal procedures of the Fair Credit Billing Act. Consumers usually telephone, and the lack of formality should not remove them from the protections of the act. The board recommends that the Fair Credit Billing Act be amended to incorporate the oral notice provision of the Electronic Fund Transfer Act. 3. When an error is alleged under the Electronic Fund Transfer Act, the institution must within 10 days either complete its investigation or provisionally recredit the consumer's account. When an error allegation is received under the Fair Credit Billing Act, the creditor must either resolve the dispute or send an acknowledgment within 30 days. The board recommends that both acts be amended to provide parallel timing requirements as follows: a. Under the Electronic Fund Transfer Act, require notice within 10 days informing the consumer of the correction or, if the institution believes no error occurred, a written explanation of the basis for that belief. In the alternative, require a written notice of the provisional recredit. b. Under the Fair Credit Billing Act, require notice to the consumer of the correction of the error within 10 days or a written explanation of why the creditor believes no error occurred. In the alternative, require a written notice that amounts in dispute need not be paid. The current time limits for resolving disputes are 45 days under the Electronic Fund Transfer Act and two billing cycles but not more than 90 days under the Fair Credit Billing Act. The board recommends that the Electronic Fund Transfer Act be amended to conform to the Fair Credit Billing Act so that both laws would require resolution within 90 calendar days. Lengthening the Electronic Fund Transfer Act limit will not hurt consumers because their funds will have already been provisionally recredited. 4. The board recommends that the annual notice of rights under the Electronic Fund Transfer Act and the semiannual notice of rights under the Fair Credit Billing Act be eliminated. In their stead, we recommend that periodic statements contain a summary notice disclosing the existence of the rights and informing persons how to obtain a complete explanation. Since it is normally information on periodic statements that triggers a dispute, we believe that consumers are better served by a short notice at the time a dispute arises than they are by a lengthy explanation once or twice a year. 5. The Truth in Lending Act prohibits the unsolicited issuance of credit cards, while the Electronic Fund Transfer Act permits the unsolicited issuance of cards provided they are not validated. Because many institutions are offering cards with both credit and electronic funds transfer features, the more competitive approach of the Electronic Fund Transfer Act may be frustrated by the absolute prohibition on unsolicited issuance by the Truth in Lending Act. One solution is to conform the Truth in Lending Act to the Electronic Fund Transfer Act to permit the unsolicited issuance of unvalidated credit cards. 6. Both the Electronic Fund Transfer Act and the Fair Credit Billing Act provide for " e r r o r " resolution procedures. The acts define mere requests for clarification or documentation as " e r r o r s . " The board recommends that the error definitions be amended to limit the concept to cases in which the consumer suspects a mistake or discrepancy. Institutions should not be put Statements to Congress 133 to the expense of complying with the error resolution procedures each time a consumer calls for information for business, tax, or other purposes. The board already has the authority to define additional errors by regulation and therefore can prevent any loopholes from developing. 7. Finally, the staff has received a number of inquiries from consumers and creditors asking whether the Fair Credit Billing Act permits creditors to impose charges for providing documentation or investigating errors. In some cases, these charges appear to be quite substantial, and in others they are open ended; for example, $5 per hour for an investigation. The board recommends that both the Fair Credit Billing Act and the Electronic Fund Transfer Act be amended to prohibit the imposition of such charges. While Regulation Z prohibits these charges when a customer's allegation of error proves correct, we believe that permitting these charges at all serves to discourage customers from exercising their right to assert errors. These seven recommendations and a few technical problems the board's staff has discovered in dealing with matters such as rulewriting authority could be included in the present bill or in a separate bill. In either case, the board believes it is important that the legal relationship between electronic funds transfers and the credit transactions be clarified and that the consumer be offered a rational, common-sense framework. I appreciate the opportunity to appear. The board commends this committee for its tenacity in dealing with this difficult subject. • Statement by Henry C. Wallich, Member, Board of Governors of the Federal Reserve System, before the Committee on Banking, Housing and Urban Affairs, U.S. Senate, February 8, 1979. of inflation moved up from 6V2 percent during 1977 to %lA percent last year. The acceleration of inflation occurred while product and labor markets were tightening. By the end of the year, the economy was operating at rates of capital and labor utilization that, although not quite as high as during the 1974 price surge, were nevertheless substantial. An intensification of cost pressures, accompanied by incipient excess demand, was the principal source of inflation in the past year. The sharp rise in production costs was the result of a combination of rapidly rising labor compensation and dismal productivity performance. Hourly compensation rose at a 93A percent annual rate during 1978—more than 2 percentage points faster than in 1977. A good deal of the acceleration from 1977 to 1978—perhaps about half—can be attributed directly to federally mandated increases in minimum wages and in social insurance taxes. Weak productivity growth exacerbated cost pressures, and as a result, unit labor costs accelerated sharply to a 9 percent rate during 1978 from just over 6 percent a year earlier. Such rapid acceleration in costs, being transmitted to prices, often leads to further acceleration of costs including wage demands. Mr. Chairman, members of this committee, 1 am pleased to present the views of the Board of Governors of the Federal Reserve System on extending the Council on Wage and Price Stability for two years. The council can play an important role in the fight against inflation, and the board supports extending the authority of the council to 1981. In the past year inflation has worsened considerably, and remains the nation's major economic problem. Over the four quarters of 1978, most general price measures rose about 9 percent—substantially faster than the 6V2 percent rate in 1977. To some extent the acceleration of inflation last year reflected a sharp run-up in farm prices, which are particularly vulnerable to temporary disturbances. A more troubling longer-run development in 1978, however, was the upward trend in prices that are more closely associated with movements in production costs. When food and energy prices are excluded from the gross business product deflator, this measure 134 Federal Reserve Bulletin • February 1979 Throughout the 1970s this chronic cycle of wage and price increases has been curtailed just briefly by downturns in activity, only to worsen again when the economy heated up. One important contributing factor in the spiral has been the sluggish performance of productivity in recent years. Over time, mechanisms have been developed in the labor market—either formally or informally—to ensure that wages kept pace with increases in the cost of living. As long as growth in labor productivity matched demands for higher wages, real income continued to grow without generating significant upward pressure on prices. In the 1970s, however, productivity increases faltered, and it now appears that, at least in the near term, the trend rate of productivity growth is likely to be only about half the nearly 3 percent trend over the two preceding decades. The recent low rate of productivity growth adds a more serious dimension to our inflation problem. Demands for the type of real income gains achieved a decade ago are inconsistent with current productivity trends. Pressures to achieve unrealistically large increases in real incomes in the face of slow productivity growth threaten to result in an escalation of inflation. Moreover, even if real-wage demands are brought into line with productivity, inflation will not automatically diminish. Forceful efforts additionally must be made to break into the vicious circle in which prices determine wages and wages determine prices. The main burden of the anti-inflation battle has fallen, and probably must continue to fall, on the monetary and fiscal authorities. The appropriate goal of monetary and fiscal policy in the coming year is to moderate the pace of current economic growth in order to alleviate the inflationary pressures brought on by strains on the nation's productive capacity. Recognizing this, the Federal Reserve has moved in the direction of monetary restraint, and the President has recommended a tighter rein on government spending. It is highly desirable not to place the entire burden of the fight against inflation on demand management. As our policies of restraint ease pressures from the demand side, an incomes policy such as the one pro- posed by the President last October can make an important contribution to unwinding the wage-price cycle. The program of voluntary wage and price guidelines set by the President is a direct attempt not only to halt the upward spiral of costs and prices but also to reduce the rates of increases in wages and prices significantly from current rates. In this regard, the guidelines are based on sound economic logic. They allow labor compensation to rise IV2 percent—7 percent for private payments plus 1/2 percent for federal payroll taxes. Assuming trend productivity growth of about 1 V2 percent, unit labor costs—a major factor in price determination from year to year—could drop, under the guidelines, to about 6 percent. If prices slowed down, following the guidelines, and if cost pressures diminished, real income gains would continue to be realized but at a significantly lower rate of inflation. Favoring the prospects of the wage-price restraint program is the fact that it has been undertaken in the face of an expected slowing of economic activity. Previous attempts to institute incomes policies, such as the Kennedy-Johnson guideposts, were rendered ineffective by a worsening of demand pressures. Business and labor leaders can be expected voluntarily to adopt moderation in setting wages and prices only if they are persuaded that the Federal Reserve, the President, and the Congress have committed monetary and fiscal policies to containing inflation. The Council on Wage and Price Stability has been given the task by the President to implement the voluntary guidelines program. This implementation has two parts: (1) translating the President's broad request for wage and price moderation into a set of specific standards and regulations and (2) monitoring actual setting of wages and prices in order to determine how firms and employee groups meet the standards. It is desirable that a single organization perform both tasks. This allows the knowledge gained in establishing standards for a vast array of industrial pricing and labor-management arrangements to be applied to fair and timely determinations of compliance. In addition, the council has the responsibility Statements to notify the public of its findings; this is an important function since the weight of public opinion can be a critical tool in building support for compliance with the program. These extensive tasks now are being performed by a staff of just over 100, and the President has proposed that the number be expanded to about 230. This increase, it seems fair to say, does not pose the threat of an unwieldly bureaucracy. Aside from the day-to-day task of administering the guidelines program, the council has an opportunity to gain insights into the complex machinery of wage and price determination. As the council's work proceeds, it will be able to identify sectors of the private economy that require special attention. One example to date has been the council's several reports on hospital charges and physicians' fees. Medical care costs have been a significant factor in exacerbating inflation for more than a decade. The council is charged as well with examining inflationary pressures that emanate from government activities. In recent years we have become increasingly aware that many government regulations that contribute to desirable social goals also may involve hidden costs, particularly in the form of higher prices. The council has the important function of injecting cost-consciousness into environmental, safety, and other standards that frequently and exten- to Congress 135 sively ignore costs and also of encouraging competition when regulation has weakened it. Finally, I would like to comment briefly on the real-wage insurance program that the President has proposed in conjunction with the guidelines program. Its purpose is to strengthen the guidelines program by encouraging acceptance of the 7 percent wage standard. It would do this by reducing the prospect of erosion of real incomes if actual inflation were to exceed 7 percent. Participating wage earners would receive a tax rebate of up to $600. This form of tax-oriented incomes policy should be more cost-effective when rising labor costs are the principal source of inflation. In such a situation, broad compliance with wage and price guidelines would hold down the rate of inflation. That would keep the cost of realwage insurance moderate. Unpredictable increases in prices, such as food or energy, could raise inflation rates even in the presence of wage restraint. In such a case, the cost of the program might mount excessively. Limits, therefore, have been proposed on the extent of compensation provided by the program in order to control the risk to the federal government of adding substantially to the deficit. Although a real-wage tax incentive may be difficult to design, it deserves serious consideration as one part of a broadly based anti-inflation effort. • 137 Announcements STATEMENT EXPANDED OF POLICY RULEMAKING REGARDING PROCEDURE The Federal Reserve Board on January 15, 1979, issued a policy statement expanding its rulemaking procedures to improve the quality and public understanding of its regulations. The principal elements of the procedures that the board will follow, with some exceptions, in developing new or revised Federal Reserve regulations include the following: Early involvement of the public, by such means as advance notice of rulemaking; identification of areas in which the board would particularly like comment; open conferences or informal public hearings; and direct solicitation of the views of interested persons or groups, with attention given to getting views from differing sources. Early involvement of designated members of the board. Staff preparation of a regulatory analysis, prior to proposals for rulemaking, that will describe the need for and purposes of a new or revised regulation; examine available alternative courses of action; estimate the possible economic impact and the burdens of compliance, recordkeeping, and reporting that would be involved, and indicate the reasons for the particular course of action selected. Staff presentation of a regulatory proposal to the board only after the designated board members are satisfied that the issues have been adequately considered at the staff level, that the proposal is understandable, and that it will impose no unnecessary burdens. Board consideration of regulatory proposals, ordinarily, at meetings open to public observation. Allowance of at least 60 days for public comment. Staff analysis of comment received and presentation of the analysis to designated board members. The board will consider a proposal for action only after the designated board members are satisfied that public comment has received full consideration. Final board action, ordinarily at an open meeting. The board's announcement of its action will discuss reasons for the action and the board's reasons for accepting or rejecting suggestions received from the public. Board publication of a descriptive semiannual agenda of regulations under development or review, and of the status of regulatory development projects already announced. Board review of each of its regulations at least once each five years. When delays occasioned by the new, lengthier rulemaking procedures would not be necessary or in the public interest, the board will adopt expedited procedures. Section 1 of the policy statement provides a number of examples of regulatory actions for which expedited procedures are appropriate. The new procedures do not apply to the formulation of monetary policy or to amendments of regulations required to implement monetary policy decisions of the Board of Governors or the Federal Open Market Committee. FOMC MINUTES The Federal Open Market Committee announced on January 18, 1979, that minutes of discussions and actions at its meetings during 1973 are now available for public inspection and are being transferred to the National Archives. These minutes are contained in approximately 1,384 pages of typed material. Their transfer has been arranged with the understanding that the National Archives will make them available for inspection by interested persons under its usual rules and procedures. Similar records for earlier years are already available at the National Archives on the same basis. Copies of the minutes for 1973 will also be made available later for inspection at the board's offices in Washington and at each Federal Reserve Bank and Branch, the same procedure followed for earlier records. Meanwhile, a work 138 Federal Reserve Bulletin • February 1979 copy is now available for inspection at the board's offices, and another at the Federal Reserve Bank of New York. The National Archives will furnish microfilm copies of the minutes for a fee. The minutes through 1972 are now available in this form, and those for 1973 will be available later. Release of the minutes since 1962 has presented special problems involving international financial relationships. A number of passages have been deleted from the minutes for 1962 through 1973, with a footnote in each case indicating the general nature or subject of the deleted matter. CONSUMER RIGHTS AFFAIRS COMPLIANCE AND CIVIL PROGRAM The Federal Reserve Board on February 8, 1979, announced an expanded and strengthened program to improve compliance by member banks with consumer protection laws and regulations for which the Congress has assigned responsibilities to the board. In March 1977 the board adopted an experimental, nationwide program of this kind. The program the board has now adopted, on a permanent basis, builds on what has been learned over the two years of operation of the previous compliance program; provides for additional staff resources, particularly in specialized consumer law bank examination; and gives added weight to civil rights compliance by banks. In issuing its consumer affairs and civil rights compliance program the board said: The Board believes that any type of discrimination prohibited by the civil rights laws is detrimental to the nation and to society. The Board is convinced that such discriminatory practices by banks are not only illegal but are not in the best interests of the banks, the communities they serve, or the individuals residing in those communities. The Board will investigate thoroughly each complaint of discrimination it receives regarding a State member bank as well as any indication of noncompliance revealed during an examination of a State member bank. In any instance of unlawful discrimination, the bank will be accountable for appropriate remedies and penalties as provided for in the applicable laws and will be required to take prompt action to correct the violation. As a key part of its compliance program, the board authorized continuation of the educa- tional-advisory service that the Federal Reserve Banks have been operating during the past two years. This involves visits by Federal Reserve examiners, at the request of a member bank, to educate the bank's personnel in consumer credit protection laws and regulations and in the responsibilities of banks under civil rights laws. From April 1977 through June 1978 personnel from Federal Reserve Banks conducted 1,224 educational-advisory service visits to member banks. 4 'This service presents the System with a unique opportunity and means by which to enhance its effectiveness in the area of consumer credit and civil r i g h t s , " the board said. The Reserve Banks reported that the service was well received and was regarded as a valuable means of instruction and as an effective tool to help banks help themselves to comply with their consumer credit protection and civil rights responsibilities. Other main elements of the Federal Reserve compliance program are: 1. Specialized consumer affairs and civil rights compliance examinations by specially trained examiners. 2. Dissemination of a compliance handbook intended particularly for the education of banks and for the use of examiners, but to be generally available. This will delineate the consumer laws and regulations to be complied with, describe examination and investigative procedures, and give instructions to examiners on how to proceed in initiating corrective action. 3. Adjustment of the frequency of special consumer affairs and civil rights examinations, so that state member banks with the highest ratings are examined less frequently and banks with lower ratings receive compliance examinations more frequently. 4. Continued development of an expert staff of Federal Reserve bank examiners, specializing in consumer affairs and civil rights law, trained mainly in schools conducted by the board. 5. Strengthened and specialized arrangements for handling complaints, with emphasis on investigative follow-up to complaints of a serious nature, such as those alleging unlawful discrimination in the extension of credit. 6. Operation of the compliance program through senior officials at Reserve Banks. A Announcements compliance section of the board's Division of Consumer Affairs will provide information and assistance to the compliance officers of the Reserve Banks, with the objective of providing high quality and uniform assistance to consumers throughout the nation. REGULATION AND Y: POLICY STATEMENT REVISION The Federal Reserve Board has adopted a policy statement and revised its Regulation Y (Bank Holding Companies) to implement the Change in Bank Control Act of 1978. 1 The new act requires persons acquiring control of a state member bank or a bank holding company to file a notice 60 days in advance with the board. The board can disapprove such proposed changes in control. The act becomes effective March 10, 1979. Changes in control due to acquisitions by bank holding companies and changes in control of insured banks resulting from mergers, consolidations, or other similar transactions are not covered by the act, since they are already subject to regulatory approval under other laws. Certain other exemptions from the prior notice requirements of the act, including notice of acquisition of control of foreign bank holding companies, are noted in the board's policy statement and regulation. In view of the early effective date of the act, the board issued its regulatory revision in final form, in order to avoid disruption of transactions that are in progress. However, the board invited comment on the regulation (by April 6, 1979) and said that it intends to adopt any needed amendments to its rules as soon as practicable. The board's policy statement on the Change in Bank Control Act outlines general procedures for compliance and summarizes the principal provisions of the act, the exemptions, and the procedures to be followed by the board in carrying out the act. The policy statement said that if the board disapproves a proposed change in control, it will 1. Title VI of the Financial Institutions Regulatory and Interest Rate Control Act of 1978. 139 notify the party seeking control within three days after its decision, giving its reason for disapproval. Otherwise, unless the period is extended as provided for in the act, the transaction may be completed 61 days after a Federal Reserve Bank receives a substantially complete notice. The Reserve Bank will notify acquiring parties of the date of receipt of such a notice. To facilitate transactions, the board may issue notice, after consultation with state banking authorities, that it does not intend to disapprove a proposed transaction. In deciding whether to disapprove a change in control, the board is required by the act to consider competitive effects, the financial condition of the person proposing the acquisition, and the competence, experience, and integrity of that person and of the proposed new management. The policy statement notes, further, that: The Act defines " c o n t r o l " as the power—directly or indirectly—to vote 25 percent or more of any class of voting securities, or to direct the management or policies of a bank holding company or bank. The Board has established the following presumptions of control—subject to rebuttal: Where an institution is subject to registration under Sec. 12 of the Securities Exchange Act of 1934, and the transaction would result in a person, or group acting in concert, having voting control of 10 percent or more of any class of the institution's voting stock. Where a transaction would result in a person, or group acting in concert, having 10 percent of any class of the voting stock of a State member bank or a bank holding company, and the acquiring person or group would be the largest shareholder in the institution. The regulation issued by the board formalizes the principal parts of the policy statement. It permits individuals to file current financial statements as part of their notice (the act requires organizations to file financial data for five fiscal years). The regulation also delegates authority to the Federal Reserve Banks to permit proposed acquisitions when there has been no objection, to extend the time (normally 60 days) the board may take to consider proposals, to determine whether notices provide all necessary information, and to settle disputes as to whether a 140 Federal Reserve Bulletin • February 1979 person proposing to acquire less than 25 percent of a bank holding company or state member bank should file advance notice. The regulation does not exempt from notice requirements proposed acquisitions of control of foreign-based bank holding companies, most of whose assets and revenues are in the United States. The board particularly requests comment on this aspect of the regulation. The other federal regulators of financial institutions are preparing similar policy statements and rules under the new act. BANK RATING HOLDING COMPANY SYSTEM The Federal Reserve Board on February 7, 1979, adopted a system for appraising and rating t the performance and financial condition of bank holding companies. The bank holding company rating system extends a program of intensified supervision of bank holding companies the Federal Reserve put into effect at the beginning of 1978. That program includes requirements for annual on-thespot inspections of most bank holding companies with consolidated assets greater than $300 million as well as the application to such companies of standardized examination criteria. Building on this supervisory program, the board adopted a system that will be used nationwide by the Federal Reserve to rate the strengths and weaknesses of parent bank holding companies and their bank and nonbank subsidiaries and to assess operational characteristics such as the organization's earnings, the adequacy of its capital, and its management. Each of these component aspects of the holding company will be given a rating of one to five, with one representing the best rating and five the lowest. The component ratings will then be combined into an overall financial composite rating, also on a scale of one (best) to five (lowest). In addition, holding companies will be given a separate rating on the ability and competence of the company's management. The bank holding company rating system adopted by the board is similar in concept to the uniform interagency system for rating banks adopted by the Federal Reserve, Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation in May 1978. REPORT ON REMOTE DISBURSEMENT The Federal Reserve Board on January 11, 1979, made public a statement of policy concerning the practice known as remote disbursement and announced a course of action intended to discourage such abuse of the check collection system. At the same time the board sent to the Congress a status report on Federal Reserve efforts to eliminate the practice. Remote disbursement involves arrangements between a bank and a customer (frequently a corporation) designed expressly to delay payment of the customer's checks. For example, in such an arrangement, a bank customer making most of its payments in Pennsylvania might make payments by checks drawn on a bank in Oregon. Recipients of these checks may suffer a delay in receiving credit in their accounts. The board has the following principal concerns with respect to remote disbursement: 1. It can expose both the bank involved and recipients of the remotely disbursed payments to risks of loss—that they may not be aware of—during the deliberately prolonged clearing time. 2. Consumers and small businesses—who may not be in a position to negotiate better payment terms—may be denied prompt access to funds due to them. 3. Remote disbursement could result in unsafe or unsound banking practices if the customer's funds at the remote disbursing bank are not sufficient to cover the customer's checks (that is, if settlement procedures between the customer and the bank are not on an "immediate f u n d s " or "collected b a l a n c e " basis). This would result in unsecured extensions of credit by the bank to the customer. Such extensions of credit might not be warranted as a matter of loan policy. In the case of small banks, such loans might exceed the legal limit for lending to any one customer. The board gave the following policy guidance: The board believes the banking industry has a public responsibility not to design, offer, Announcements promote or otherwise encourage the use of a service expressly intended to delay final settlement and which exposes payment recipients to greater than ordinary risks. The board is calling on the nation's banks to join in the effort to eliminate remote disbursement practices intended to obtain extended float. There is no intention to discourage corporate disbursement arrangements with banks that provide for improved control over daily cash requirements, provided that these arrangements do not result in the undesirable effects noted above. Banks should provide the cash management services needed by their customers through the use of payments methods that facilitate prompt funds availability to payment recipients and that protect banks from unnecessary risk. To provide incentives to banks to design and use payment methods that are in keeping with the public interest the board has adopted a plan consisting of the following actions: 1. Direct telephone or personal contacts between members of the Board of Governors or Reserve Bank Presidents and the chief executives of banks and bank holding companies believed to be offering remote disbursement services. To date these contacts have been very successful in obtaining voluntary bank action to terminate the practice. 2. Review by bank examiners of settlement procedures between banks and their customers. Bank examiners have been alerted and directed to pay particular attention to the check service offerings of banks to their customers. 3. Implementation of a late deposit " p a c k a g e sort" 2 option for check clearance at all Reserve offices. This option is intended to make it possible for banks around the nation to accelerate collection of checks drawn on remotely located collection points. 4. Consideration of the need, desirability, and feasibility of regulatory or legislative moves to designate remote disbursement as an unfair banking and business practice, to change the Federal Reserve credit availability schedule for 2. Package-sorted checks are checks sent to the Federal Reserve for collection, presorted and packaged by the name of the banks on which the checks are drawn. This simplifies and speeds check clearance by the Federal Reserve. 141 remotely disbursed checks, or to require final settlement for payments within normal collection times including limitation on the use of depository transfer checks."5 INFORMATION COMMUNITY ABOUT REINVESTMENT ACT The four federal supervisors of financial institutions responsible for enforcing the Community Reinvestment Act (CRA) on January 15, 1979, issued staff answers to the most frequently received inquiries about the act, the implementing regulations, and related examination procedures. 4 The agencies stated that the questions and answers developed by agency staffs should not be taken as official interpretations. Their purpose is solely to be helpful to financial institutions and to the public by providing useful background information. An accompanying statement signed by officials of the agencies provides financial institutions with policy guidance on the general manner in which they should address their responsibilities under C R A . The agency officials said: In carrying out their responsibilities under CRA, financial institutions should focus on the spirit of the legislation and try to avoid narrow, legalistic interpretations of the legislation or the regulations. The agencies believe that the financial institutions, relying on their own resources, are capable of complying with the requirements of the regulation. The statement added that while the agencies want to provide helpful information and guidance—and will issue further questions and answers in the future—they wish to keep official interpretations of CRA regulations to a minimum. The CRA became effective November 6, 1978. It is intended to encourage federally insured commercial banks, mutual savings banks, 3. A preauthorized check drawn on the customer's account in another bank. 4. The agencies are: the Federal Home Loan Bank Board (supervisor of savings and loan associations); the Comptroller of the Currency (supervisor of national banks); the Federal Deposit Insurance Corporation (supervisor of state-chartered banks that are not members of the Federal Reserve System and of mutual savings banks); the Federal Reserve Board (supervisor of state-chartered member banks). 142 Federal Reserve Bulletin • February 1979 and savings and loan associations to help meet the credit needs of their entire communities, including low- and moderate-income neighborhoods, while preserving the flexibility needed by financial institutions to operate safely and soundly. With respect to the staff questions and answers, the agencies said: Since the final regulations and examination procedures have been made public, a number of questions have been raised about them by financial institutions and individuals. In order to assist financial institutions in meeting their responsibilities under CRA and to increase public understanding . . . the staffs of the agencies have prepared the attached paper which presents the most common questions about the CRA regulation and examination procedures and the staffs' responses. The questions and answers provide staff guidance as to the meaning the agencies attach to key terms in the act and their implementing regulations, such as 4 'office," "local community," and " s m a l l " business or farm. They also address such subjects as the contents of the institutions' CRA statements that must be prepared to comply with CRA regulations, the availability of public comment files, and the way institutions should deal with the delineation of low- and moderate-income neighborhoods in their communities. MONEY STOCK 2. Money stock seasonal factors, 1979 Month or week July Annual Quarterly Ql Q2 Q3 Q4 Old Revised Old 7.2 7.3 8.0 6.2 9.9 7.6 4.5 6.6 9.2 8.1 4.4 6.9 7.9 8.9 7.5 Old Revised 8.5 9.1 9.4 7.0 8.4 9.9 7.7 7.7 7.8 10.1 9.8 8.1 8.4 10.4 9.4 Revised .9920 .9870 .9920 .9970 .9990 1.0030 1.0250 .9790 .9830 1.0130 .9800 .9960 .9990 1.0020 1.0070 1.0080 1.0080 1.0050 .9960 1.0020 1.0080 1.0060 1.0050 1.0030 1.0060 .9750 .9850 .9750 .9820 .9950 1.0080 1.0030 .9970 .9980 1.0070 1.0170 1.0040 .9890 .9930 1.0000 1.0050 1.0320 1.0030 .9980 .9940 .9940 .9900 .9920 1.0000 1.0010 .9980 .9970 .9930 .9910 .9920 1.0050 1.0200 1.0250 1.0100 1.0300 10 17 24 31 1.0060 1.0060 .9960 .9850 .9760 1.0760 1.0470 1.0360 1.0070 .9870 .9959 .9983 .9990 1.0000 1.0000 .9917 .9948 .9963 .9973 .9974 1.0379 1.0214 1.0042 .9951 .9895 Feb. 7 14 21 28 .9900 .9920 .9895 .9775 .9910 .9840 .9740 .9660 1.0005 1.0016 1.0025 1.0029 .9994 1.0016 1.0029 1,0036 .9839 .9779 .9707 .9679 Mar. 7 14 21 28 .9940 .9960 .9920 .9840 .9850 .9880 .9820 .9690 1,0050 1.0067 1.0073 1.0077 1.0063 1.0081 1.0086 1.0084 .9741 .9801 .9856 .9957 11 18 25 .9930 1.0090 1.0030 .9900 1.0050 1.0180 1.0290 1.0070 1.0104 1.0100 1.0075 1.0064 1.0094 1.0093 1.0059 1.0036 .9951 .9833 .9720 .9650 9 16 23 30 .9880 1.0075 1.0020 .9960 .9930 .9980 .9810 .9860 .9710 .9730 1.0060 1.0072 1.0083 1.0083 1.0088 1.0023 1.0040 1.0052 1.0060 1.0056 .9655 .9713 .9781 .9876 .9939 13 20 27 1.0050 1.0090 1.0030 .9935 .9950 1.0000 .9980 .9840 1.0079 1.0065 1.0036 1.0029 1.0055 1.0049 1.0025 1.0005 .9953 .9951 .9911 .9967 4 11 18 25 1.0090 1.0190 1.0110 1.0020 1.0140 1.0120 1.0110 .9920 1.0042 1.0040 1.0028 1.0026 1.0003 1.0002 .9997 .9999 .9989 .9919 .9892 .9903 8 15 22 29 .9960 1.0120 1.0080 1.0020 .9910 .9930 .9950 .9960 .9880 .9740 1.0016 .9998 .9982 .9971 .9969 1.0002 1.0015 1.0012 1.0009 1.0006 .9935 .9996 1.0029 1.0061 1.0108 Sept. 5 12 19 26 1.0030 1.0050 .9970 .9880 .9940 1.0000 1.0010 .9750 .9963 .9951 .9924 .9926 1.0001 .9995 .9972 .9964 1.0132 1.0158 1.0189 1.0247 Oct. 3 10 17 24 31 .9910 1.0090 1.0020 .9960 .9870 .9980 1.0050 1.0090 .9900 .9950 .9946 .9958 .9942 .9937 .9919 .9974 .9989 .9979 .9967 .9944 1.0314 1.0293 1.0250 1.0216 1.0202 Nov. 7 14 21 28 1.0050 1.0100 1.0080 1.0030 1.0120 1.0130 1.0000 .9920 .9905 .9894 .9903 .9897 .9936 .9932 .9931 .9924 1.0077 1.0062 1.0105 1.0140 12 19 26 1.0120 1.0190 1.0190 1.0260 1.0180 1.0230 1.0300 1.0280 .9909 .9923 .9915 .9925 .9922 .9921 .9905 .9901 1.0176 1.0249 1.0322 1.0366 July M-3 M-2 M-l Period NonMember member banks banks Certificates of deposit Weekly 1. Comparison of old and revised money stock growth rates, 1978 Annual rates of growth based on quarterly-average data; percent Time deposits other than CDs Monthly REVISION The money stock and related measures have been revised to incorporate the June 1978 benchmark adjustments for nonmember banks and revised seasonal factors. Table 1 shows rates of change for M - l , M-2, and M-3 measures for 1978. Monthly and Demand Currency deposits Announcements weekly M - l and M-2 seasonal factors for 1979 appear in table 2. Benchmark adjustments for M - l were minor, raising the level of the series $100 million in June 1978 and about the same amount at the end of the year. The benchmarking raised M-2 about $2.0 billion in June 1978 and more than $4.0 billion at the end of 1978. Seasonal revisions smoothed the quarterly and monthly data. M - l growth in April was lowered 3 percentage points and in November was raised about the same amount. Revisions for other months were smaller. The current revision also incorporates new seasonal factors for M-2 and M-3, but the changes had little impact on growth rates for these aggregates. Monthly and weekly data from 1959 to date are available from the Banking Section of the Board's Division of Research and Statistics. PROPOSED ACTIONS The Federal Reserve Board has proposed for public comment a statement setting forth the rights to privacy that customers of .financial institutions have, under a new statute, when a federal agency seeks financial information about them. The board asked for comment by February 16, 1979. The government agencies that supervise federally insured depositary institutions have proposed regulations to carry out the new Depository Institution Management Interlocks Act. 5 Public comment on the proposal should be received by March 5, 1979. The Federal Reserve Board on February 12, 1979, proposed suspension of a recent amendment of its Regulation Z (Truth in Lending) concerning the "cooling o f f " period for consumers who pledge their home as security for open-end credit arrangements. The board requested comment by April 16, 1979. 5. The agencies are: the Federal Home Loan Bank Board; the Federal Deposit Insurance Corporation; the National Credit Union Administration; the Comptroller of the Currency; and the Board of Governors of the Federal Reserve System. MEETING OF CONSUMER 143 ADVISORY COUNCIL The Consumer Advisory Council met on February 21 and 22, 1979, in Washington, D . C . The meeting, which was open to the public, dealt with proposed regulations on consumer liability for unauthorized use of credit and debit cards, truth in lending amendments connected with electronic fund transfers, the results of a recent survey of banking practices, and other matters. The council advises the Federal Reserve Board on its responsibilities regarding consumer credit legislation and regulation. CHANGES IN BOARD STAFF The Board of Governors has announced the temporary assignment of Edward T. Mulrenin, Assistant Controller, Office of the Controller, as Assistant Secretary of the Board, Office of the Secretary, effective March 1, 1979. Mr. Mulrenin replaces John M. Wallace, who has returned to the Federal Reserve Bank of Atlanta. The board has also announced the deaths of Thomas J. O'Connell, Counsel to the Chairman, Office of Board Members, and John E. Reynolds, Counselor, Division of International Finance. SYSTEM ADMISSION MEMBERSHIP: OF STATE BANKS The following banks were admitted to membership in the Federal Reserve System during the period January 16 through February 15, 1979: Florida Miami Oregon Junction City Texas Baytown Virginia Newport News Plaza Bank of Miami Tri-County Banking Company Citizens Bank and Trust Company of Baytown First City Bank of Newport News 145 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON DECEMBER 19, 1978 1. Domestic Policy Directive The information reviewed at this meeting suggested greater strength in economic activity than had been evident at the time of the C o m m i t t e e ' s meeting a month earlier; growth in output of goods and services in the current quarter now appeared to be somewhat faster than the annual rate of 3 . 4 per cent indicated for the third quarter by preliminary estimates of the C o m m e r c e Department. The rise in average prices, as measured by the fixed-weight price index for gross domestic business product, appeared to be close to the annual rate of 8.2 per cent estimated for the third quarter. Staff projections for the year ahead differed little f r o m those prepared a month earlier. They continued to suggest a gradual slowing in the growth of economic activity as the year progressed. The rise in average prices was projected to remain rapid during 1979 and the rate of unemployment to rise marginally. In N o v e m b e r , the index of industrial production advanced an estimated 0 . 7 per cent, somewhat more than the gains in the preceding 2 months but close to the average monthly increase since the beginning of the year. Nonfarm payroll e m p l o y m e n t grew substantially in November for the second consecutive month. In manufacturing also, a large increase in e m p l o y m e n t was registered for the second month in a row and the average workweek rose somewhat further. The u n e m p l o y m e n t rate was unchanged at 5 . 8 per cent, close to its low for the year. The dollar value of total retail sales expanded substantially in November and revised data indicated a sizable advance for October as well. Unit sales of new automobiles declined somewhat in November. Total housing starts were at an annual rate of 2 . 1 million units in both October and N o v e m b e r . Sales of new and existing singlefamily houses rose to new highs in October. A 146 Federal Reserve Bulletin • February 1979 The latest Department of Commerce survey of business plans, taken in late October and November, suggested that spending for plant and equipment would expand at an annual rate of nearly 16 per cent in the current quarter but at the markedly lower rate of about 8 per cent in the first half of 1979. The survey also indicated that in 1978 as a whole fixed investment outlays would be 12.7 per cent greater than in 1977. Manufacturers' new orders for nondefense capital goods advanced sharply in October, following sizable increases in other recent months. The index of average hourly earnings of private nonfarm production workers increased at an annual rate of 8.3 per cent over the first 11 months of 1978, nearly 1 percentage point above the rise during 1977. Average producer prices of finished goods rose substantially in November for the third consecutive month despite more moderate increases in producer prices of food products than in the two earlier months. In October, the consumer price index advanced at an annual rate of 9 per cent, and the rate of increase for the year to date—about 9 ¥2 per cent—was nearly 3 percentage points above that during 1977. In foreign exchange markets the trade-weighted value of the dollar against major foreign currencies fell sharply following the O P E C announcement on December 17 of a larger-than-anticipated increase in oil prices for 1979. Over the previous few weeks the dollar had declined slightly on balance. Nevertheless, at the time of this meeting it was still about 7 per cent above its low reached just prior to the November 1 announcement of the new program to strengthen the dollar. The U.S. trade deficit in October remained close to the annual rate recorded in the second and third quarters but well below that in the previous two quarters. The growth of total.credit at U.S. commercial banks was appreciably slower in November than in September and October. However, bank loans other than security loans continued to expand rapidly. To finance this expansion banks liquidated a sizable amount of security holdings and issued a substantial volume of large-denomination time deposits. Outstanding commercial paper of nonfinancial businesses rose considerably in November for the second consecutive month. The narrowly defined money supply ( M - l ) declined at an annual rate of about 4V2 per cent in November. The contraction reflected, Record of Policy Actions of FOMC among other things, the shifts of funds from demand deposits to savings deposits associated with the introduction of the automatic transfer service (ATS) and effects of the substantial rise in shortterm market interest rates since April. Meanwhile, growth of M-2 and M-3 slackened further. Sales of 6-month money market certificates at commercial banks and nonbank thrift institutions continued strong in November, but savings deposits and time deposits subject to interest rate ceilings contracted at commercial banks. Total inflows of funds to nonbank thrift institutions slowed in November after growing rapidly in the preceding 3 months; the rate of expansion was still considerably above that in the first half of the year. Over the first 11 months of the year, M - l , M - 2 , and M - 3 grew at annual rates of about 7 L A, SLA, and 9LA per cent, respectively. At its meeting on November 21, the Committee had agreed that early in the inter-meeting period System open market operations should be directed toward attaining a weekly-average Federal funds rate of about 9% per cent, slightly above the level prevailing at that time. Subsequently, the objective for the Federal funds rate was to be raised or lowered within the range of 9%. to 10 per cent. In setting a specific objective for the funds rate, the Manager of the System Open Market Account was to be guided mainly by a range of tolerance of 6 to 9V2 per cent for the annual rate of growth in M - 2 over the N o v e m b e r - D e c e m b e r period, provided that the rate of growth in M - l over the same period did not appear to exceed 5 per cent. Immediately following the November 21 meeting the Manager began to seek bank reserve conditions consistent with an increase in the weekly-average Federal funds rate to around 9% per cent. Incoming data during the inter-meeting period suggested initially that growth in M-2 would be well within the range specified by the Committee and that growth in M - l would be below 5 per cent. In subsequent weeks, newly available data led to progressively lower estimates of growth, and by the end of the first week in December the projections might, under normal circumstances, have called for a reduction in the objective for the Federal funds rate to 9% per cent. On December 8, however, the Committee approved a recommendation by the Chairman to instruct the Manager to continue aiming for a Federal funds rate of 97s per cent during 147 A 148 Federal Reserve Bulletin • February 1979 the period before the next regular meeting of the Committee, unless growth of the aggregates should appear to weaken significantly further. Most market interest rates rose further during the inter-meeting period, as financial markets seemed to react to indications of continued strength in business conditions, added evidence of intense inflationary pressures, and the O P E C announcement of a large increase in oil prices. Commercial banks raised the loan rate to prime business borrowers from 11 per cent to 11 Vi per cent during the period. In mortgage markets interest rates continued to rise. In the Committee's discussion of the economic situation and outlook, most members expressed little or no disagreement with the staff projection of a gradual slowing of the expansion during 1979 and of a slight rise in the unemployment rate. At the same time, however, the observation was made that the latest information provided contradictory indications of underlying trends in economic activity, and some members commented on the prospects for alternative courses of activity. The members continued to anticipate that average prices of goods and services would rise rapidly, and it was observed that the outlook for inflation had been worsened by the recent O P E C announcement of a substantial rise in oil prices during 1979. With respect to some of the economic information that had become available recently, it was suggested that the retail sales and employment statistics—and the apparent rate of growth in G N P in the current quarter—indicated underlying strength, while the behavior of the monetary aggregates so far in the fourth quarter could be symptomatic of current or near-term weakness in demands for goods and services. Similarly, the latest data on new orders for nondefense capital goods and on construction contract awards were strong, but according to the Commerce Department's survey of business plans, plant and equipment expenditures in the first half of 1979 would be weak. Concerning the over-all situation, it was suggested on the one hand that the current and prospective pace of growth in activity was too rapid, that output was beginning to press against the limits of capacity, and that inflationary pressures—which for a long time had been greater than generally projected—were still increasing. An alternative appraisal of the latest data was that the strength Record of Policy Actions of FOMC in the current quarter, especially in consumer spending, most likely was an aberration—similar to others during the past few years—and that economic activity was remarkably well balanced for the present stage of the expansion. It was also suggested, however, that the strength in demands and activity, although possibly persisting for a quarter or two, might culminate in a recession in the second half of 1979. At its meeting in October the Committee had agreed that from the third quarter of 1978 to the third quarter of 1979 growth of M - 2 and M - 3 within ranges of 6V2 to 9 per cent and IV2 to 10 per cent, respectively, appeared to be consistent with broad economic aims. M - l was expected to grow over that period within a range of 2 to 6 per cent, depending in part on the speed and extent of transfers from demand to savings deposits resulting from the introduction of ATS. The associated range for the rate of growth in commercial bank credit was 8V2 to 11 !/2 per cent. The Committee had also decided that growth of M - 1 + within a range of 5 to 7V2 per cent appeared to be generally consistent with the ranges of growth for the other monetary aggregates. It had been agreed that the longer-run ranges, as well as the particular aggregates for which such ranges were specified, would be subject to review and modification at subsequent meetings. In the discussion of policy for the period immediately ahead, most members of the Committee advocated some additional firming in money market conditions. A few members preferred to direct operations toward maintaining the money market conditions currently prevailing. No member recommended an easing in money market conditions per se, but one suggested that whether money market conditions were firmed or eased be determined altogether on the basis of the incoming evidence on the behavior of the monetary aggregates. Several reasons were advanced for some additional firming in money market conditions. Available economic data suggested that growth of output had not yet been slowed and that inflationary pressures remained intense. The strength of demands for bank loans and other credit seemed to provide a more reliable indication of underlying economic conditions than did the recent weakness of growth in the monetary aggregates. In any case, it was observed, weakness in monetary expansion following a long period of strong 149 A 150 Federal Reserve Bulletin • February 1979 growth could be accepted for a time. Some additional firming in money market conditions, moreover, would help to maintain public confidence in the program to moderate inflation and to support the foreign exchange value of the dollar. In support of the preference for maintaining prevailing money market conditions, rather than firming, it was observed that over the preceding 2 months the Committee had increased monetary restraint substantially. Because the evidence on current and prospective economic developments was conflicting, the Committee ought to pause and evaluate the effects of its recent actions before contemplating additional firming; if the unexpected shortfall in monetary expansion persisted, it might contribute to a recession. The uncertainties in the current situation also provided the grounds for the proposal to base the Committee's objective for money market conditions altogether on the incoming evidence on the behavior of the monetary aggregates: It was suggested that whether fundamental economic conditions were strong or weak would inevitably become evident in renewal of rapid monetary expansion or in continuation of sluggish expansion, leading in either case to appropriate objectives for money market conditions. At the conclusion of the discussion the Committee agreed to instruct the Manager to direct open market operations toward raising the Federal funds rate to 10 per cent or slightly higher early in the period before the next regular meeting and subsequently to maintain the rate within a range of 93A to IOV2 per cent. With regard to the objective for the rate within that range, the Committee instructed the Manager to be guided by ranges of tolerance for the annual rates of growth of M - l and M-2 of 2 to 6 per cent and 5 to 9 per cent, respectively. Thus, after a 2-month interruption, the Committee agreed to return to its practice of specifying a range rather than only an upper limit for M - l and of instructing the Manager to give approximately equal weight to the behavior of M - l and M - 2 in assessing the behavior of the aggregates; it did so because recent experience had suggested that the impact of ATS on the annual rate of growth of M - l could be estimated within fairly narrow limits. However, the Committee decided that the Manager should respond more quickly to relatively high than to relatively low rates of growth in the aggregates. Specifically, the objective for the funds rate was to be raised in an orderly fashion Record of Policy Actions of FOMC within its range if the 2-month growth rates of M - l and M - 2 appeared to be significantly above the midpoints of the indicated ranges. On the other hand, the objective was to be lowered in an orderly fashion only if the 2-month growth rates appeared to be approaching the lower limits of the indicated ranges. The next regular meeting of the Committee was scheduled for February 6, 1979, but it was understood that a telephone conference would be held in mid-January to consider whether supplementary instructions were needed. It was also understood that the Chairman would call upon the Committee to consider the need for supplementary instructions if significant inconsistencies appeared to be developing among the Committee's objectives or if, before midJanuary, the behavior of the monetary aggregates appeared to call for a reduction in the objective for the Federal funds rate toward the lower limit of its range. The following domestic policy directive was issued to the Federal Reserve Bank of New York: The information reviewed at this meeting suggests that in the current quarter real output of goods and services has picked up somewhat from the rate in the third quarter. In November, as in October, the dollar value of total retail sales expanded substantially. Industrial production and nonfarm payroll employment rose considerably further, and the unemployment rate remained at 5.8 per cent. Over recent months, broad measures of prices and the index of average hourly earnings have risen rapidly. The trade-weighted value of the dollar against major foreign currencies declined sharply following OPEC's announcement on December 17 of increased oil prices for 1979, after having declined slightly over the previous few weeks, but it remains substantially above the low reached just prior to the actions taken on November 1 to strengthen the dollar. The U.S. trade deficit in October was at about the rate recorded in the second and third quarters. M-l declined in November, only in part because of shifts of funds from demand deposits to savings deposits after the introduction of the automatic transfer service (ATS) at the beginning of the month. Over the first 11 months of 1978, M-l grew at an annual rate of about IVA per cent. Growth of M-2 and M-3 slackened further in November; they grew at rates of about 8LA and 9LA per cent, respectively, over the first 11 months of the year. Inflows of deposits to nonbank thrift institutions slowed in November, after having 151 A 152 Federal Reserve Bulletin • February 1979 grown rapidly in the preceding 3 months. Market interest rates in general have risen further in recent weeks. In light of the foregoing developments, it is the policy of the Federal Open Market Committee to foster monetary and financial conditions that will resist inflationary pressures while encouraging continued moderate economic expansion and contributing to a sustainable pattern of international transactions. At its meeting on October 17, 1978, in setting ranges for the monetary aggregates, the Committee recognized the uncertainties concerning the effects that the November 1 introduction of ATS would have on measures of the money supply, especially M-l. Against that background, the Committee agreed that appropriate monetary and financial conditions would be furthered by growth of M-2 and M-3 from the third quarter of 1978 to the third quarter of 1979 within ranges of 6V2 to 9 per cent and IV2 to 10 per cent, respectively. The narrowly defined money supply (M-l) was expected to grow within a range of 2 to 6 per cent over the period, depending in part on the speed and extent of transfers from demand to savings deposits resulting from the introduction of ATS. The associated range for bank credit is 8V2 to IIV2 per cent. Growth of M-1+ (M-l plus savings deposits at commercial banks and NOW accounts) in a range of 5 to IV2 per cent was thought to be generally consistent with the ranges of growth for the foregoing aggregates. These ranges are subject to reconsideration at any time as conditions warrant. In the short run, the Committee seeks to achieve bank reserve and money market conditions that are broadly consistent with the longer-run ranges for monetary aggregates cited above, while giving due regard to the program for supporting the foreign exchange value of the dollar, to developing conditions in domestic financial markets, and to uncertainties associated with the introduction of ATS. Early in the period before the next regular meeting, System open market operations are to be directed at attaining a weekly average Federal funds rate slightly above the current level. Subsequently, operations shall be directed at maintaining the weekly average Federal funds rate within the range of 93A to 1 0 p e r cent. In deciding on the specific objective for the Federal funds rate the Manager shall be guided mainly by the relationship between the latest estimates of annual rates of growth in the December-January period of M-1 and M-2 and the following ranges of tolerance: 2 to 6 per cent for M-l and 5 to 9 per cent for M-2. If, giving approximately equal weight to M-l and M-2, their rates of growth appear to be significantly above the midpoints of the indicated ranges, the objective for the funds rate shall be raised in an orderly fashion within its Record of Policy Actions of FOMC range; if their rates of growth appear to be approaching the lower limits of the indicated ranges, the funds rate shall be lowered in an orderly fashion within its range. If the rates of growth in the aggregates appear to be falling outside the limits of the indicated ranges at a time when the objective for the funds rate has already been moved to the corresponding limit of its range, the Manager will promptly notify the Chairman, who will then decide whether the situation calls for supplementary instructions from the Committee. Votes for this action: Messrs. Miller, Volcker, Baughman, Coldwell, Eastburn, Partee, Willes, and Winn. Votes against this action: Mrs. Teeters and Mr. Wallich. Mrs. Teeters dissented from this action because she believed that for the time being open market operations should be directed toward maintaining the money market conditions currently prevailing. In her view, the Committee should wait to evaluate the effects of the substantial firming in money market conditions of the past 2 months before contemplating any additional firming. Mr. Wallich dissented from this action because he favored a somewhat more restrictive policy posture than that adopted by the Committee. In his opinion, the underlying economic situation was still strong and the strength of demands was adding to inflationary pressures and expectations while interest rates were not high in real terms and were not exerting strong restraint. Subsequent to the meeting, on December 29, 1978, projections of growth in the monetary aggregates suggested that for the December-January period M - 2 would grow at an annual rate well below the lower limit of the 5 to 9 per cent range specified by the Committee and that M - l would grow at a rate in the lower portion of its range of 2 to 6 per cent. Since the meeting of the Committee on December 19 the Manager had been aiming for a Federal funds rate of about 10 per cent or slightly above, although Federal funds had been trading at higher levels in response to exceptional demands for excess bank reserves near the end of the year. The behavior of the aggregates would have called for a reduction in the objective for the funds rate toward the 93A per cent lower limit of its specified range. However, in view of uncertainties about the interpretation of the behavior of the aggre- 153 A 154 Federal Reserve Bulletin • February 1979 gates at this time, and against the background of domestic and international economic and market conditions, Chairman Miller recommended that the Manager be instructed to continue to aim for a Federal funds rate of 10 per cent or slightly above, pending a review of the situation in the telephone conference, tentatively planned for January 12. On December 29, 1978, the Committee modified the domestic policy directive adopted at its meeting of December 19, 1978, to call for open market operations directed at maintaining the weeklyaverage Federal funds rate at about 10 per cent or slightly above. Votes for this action: Messrs. Miller, Volcker, Baughman, Cold well, Eastburn, Partee, Mrs. Teeters, Messrs. Wallich, Willes, and Winn. Votes against this action: None. On January 12 the Committee held a telephone conference to review the situation and to consider whether supplementary instructions were needed. However, no change was made in the instruction to the Manager to continue to direct open market operations toward maintaining the weekly-average Federal funds rate at about 10 per cent or slightly above. 2. Authorization for Foreign Currency Operations Paragraph ID of the Committee's authorization for foreign currency operations authorizes the Federal Reserve Bank of New York, for the System Open Market Account, to maintain an over-all open position in all foreign currencies not to exceed $1.0 billion, unless a larger position is expressly authorized by the Committee. On November 1, 1978, an open position of $5 billion had been authorized. At the meeting on December 19, 1978, the Committee authorized an increase in this limit to $8 billion to provide further flexibility for Federal Reserve operations in the foreign exchange markets undertaken pursuant to the Committee's foreign currency directive. Votes for this action: Messrs. Miller, Volcker, Baughman, Cold well, Eastburn, Partee, Mrs. Teeters, Messrs. Wallich, Willes, and Winn. Votes against this action: None. Record of Policy Actions of FOMC Pursuant to an agreement with the Treasury under which the Federal Reserve would undertake to " w a r e h o u s e " foreign currencies—that is, to make spot purchases of foreign currencies and simultaneously to make forward sales of the same currencies at the same exchange rate—the Committee had agreed on December 14, 1978, to raise the amount that the Federal Reserve would be prepared to warehouse from billion to $13A billion equivalent of such foreign currencies. That action had been taken in view of the impending receipt by the Treasury of somewhat more than $1^2 billion dollars equivalent of German marks resulting from its first issuance of securities denominated in foreign currencies as one of the measures of the broad program announced on November 1 to strengthen the dollar. At this meeting the Committee agreed to raise the amount of eligible foreign currencies that the Federal Reserve would be prepared to warehouse to $5 billion. The Committee also agreed to warehouse such currencies for periods of up to 12 months; previously the agreement had provided that half of the authorized amount would be for periods of up to 6 months and half for periods of 12 months. These actions were taken in view of additional Treasury offerings of securities denominated in foreign currencies in prospect for early 1979. Votes for these actions: Messrs. Miller, Volcker, Baughman, Cold well, Eastburn, Partee, Mrs. Teeters, Messrs. Wallich, Willes, and Winn. Votes against these actions: None. 3. Authorization for Domestic Open Market Operations On January 15, 1979, Committee members voted to increase f r o m $3 billion to $5 billion the limit on changes between Committee meetings in System Account holdings of U . S . Government and Federal agency securities specified in paragraph 1(a) of the authorization for domestic open market operations, effective immediately, for the period ending with the close of business on February 6, 1979. Votes for this action: Messrs. Miller, Volcker, Baughman, Coldwell, Eastburn, Partee, Mrs. 155 A 156 Federal Reserve Bulletin • February 1979 Teeters, Messrs. Wallich, Willes, and Winn. Votes against this action: None. This action was taken on recommendation of the System Account Manager. The Manager had advised that large-scale sales of securities since the December meeting—required primarily to counter the effect on member bank reserves of an unusually and unexpectedly high level of float—had reduced the leeway for further sales to about $100 million. It appeared likely that additional sales would be required because current projections indicated a need for further reserve-absorbing operations over the coming weeks. Subsequently, Committee members voted to increase the limit specified in paragraph 1(a) by an additional $1 billion, to $6 billion, effective immediately, for the period ending with the close of business on February 6, 1979. Votes for this action: Messrs. Miller, Volcker, Baughman, Coldwell, Eastburn, Partee, Mrs. Teeters, Messrs. Wallich, Willes, and Winn. Votes against this action: None. This action was taken on recommendation of the Manager. On January 26 he had advised that, despite the C o m m i t t e e ' s action on January 15 to raise the inter-meeting limit to $5 billion, the leeway available for further sales would be only about $350 million as of the close of business on January 26. Since January 15, required reserves had been weaker than had been expected, and a decline of currency in circulation had provided reserves while float had remained high. Records of policy actions taken by the Federal Open Market Committee at each meeting, in the form in which they will appear in the Board's Annual Report, are released about a month after the meeting and are subsequently published in the BULLETIN. 157 Law Department Statutes, regulations, interpretations, and decisions AMENDMENTS RULES OF TO REGULATION REGARDING Y AND DELEGATION AUTHORITY The Board of Governors has adopted amendments to its Regulation Y and its Rules Regarding Delegation of Authority to implement the change in the Bank Control Act of 1978 and to establish certain exemptions and procedures. 1. Effective March 10, 1979, the title to Regulation Y is revised to read 4 'Part 225—Bank Holding Companies and Change in Bank Control" and section 225.1 of that Part is revised to read as follows: deposits held or controlled by it on the date on which it became, or is to become, a bank holding company, or such Reserve Bank as the Board may designate. With respect to notices filed and other actions taken under the Control Act, the term refers to the Federal Reserve Bank for institution to be acquired, as determined by the preceding sentence in the case of bank holding companies and by section 9 of the Federal Reserve Act in the case of State member banks. 2. Effective March 10, 1979, Regulation Y is amended by adding a new section, § 225.7, as follows: Section 225.7—Change Section 225.1— Authority, Scope, and Definitions (a) Authority and scope. This Part is issued by the Board of Governors of the Federal Reserve System under section 5(b) of the Bank Holding Company Act of 1956 ("the Act") (12 U.S.C. § 1844(b)) and section 7(j)(13) of the Federal Deposit Insurance Act, as amended by the Change in Bank Control Act of 1978 ("the Control Act"), (12 U.S.C. § 1817(j)(13)). Sections 225.2 through 225.6 of this Part implement the Act, and section 225.7 of this Part implements the Control Act. (b) Terms used in the Act. As used in this Part, the terms "bank holding company," " c o m p a n y , " " b a n k , " "subsidiary," and " B o a r d " have the same meanings as those given such terms in the Act. As used in section 225.7 of this Part, the term "person" has the meaning given it in the Control Act. (c) Federal Reserve Bank. The term "Federal Reserve Bank" as used in this Part with respect to action by, on behalf of, or directed to be taken by a bank holding company or other organization shall mean either the Federal Reserve Bank of the Federal Reserve district in which the operations of the bank holding company or other organization are principally conducted, as measured by total in Bank Control (a) Acquisitions of Control.14 Under the Control Act, acquisitions by a person or persons acting in concert of the power to vote 25 per cent or more of a class of voting securities of a bank holding company or State member bank, unless exempted, require prior notice to the Board. In addition, a purchase, assignment, transfer, pledge, or other disposition of voting stock through which any person will acquire ownership, control, or the power to vote ten per cent or more of a class of voting securities of a bank holding company or State member bank will be deemed to be an acquisition by such person of the power to direct that institution's management or policies if: (1) the institution has issued any class of securities subject to registration under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. § 781); or (2) immediately after the transaction no other person will own a greater proportion of that class of voting securities. Other transactions resulting in a person's control of less than 25 per cent of a class of voting shares of a bank holding company or State member bank 14 Control is defined in the Control Act as the power, directly or indirectly, to direct the management or policies, or to vote 25 per cent or more of any class of voting securities, of an institution. (12 U.S.C. § 1817(j)(8)(B)). A 158 Federal Reserve Bulletin • February 1979 would not result in control for purposes of the Act. An acquiring person may request an opportunity to contest the presumption established by this paragraph with respect to a proposed transaction. The Board will afford the person an opportunity to present views in writing or, where appropriate, orally before its designated representatives either at informal conference discussions or at informal presentations of evidence. (b) Notices. Section 265.3 of the Board's Rules of Procedure governs the submission of notices required by the Control Act, except that notices should be sent to the Federal Reserve Bank of the district in which the affected bank or bank holding company is located. Notice shall not be considered given unless information provided is responsive to every item specified in paragraph 6 of the Control Act (12 U.S.C. § 1817(j)(6)), or every item prescribed in the appropriate Board forms. With respect to personal financial statements required by paragraph 6 (B) of the Control Act, an individual acquirer may include a current statement of assets and liabilities, as of a date within 90 days of the notice, a brief income summary, and a statement of material changes since the date thereof, subject to the authority of the Federal Reserve Bank or the Board to require additional information. (c) Exempt transactions. The following transactions are not subject to the prior notice requirements of the Control Act: (1) the acquisition of additional shares of a bank holding company or State member bank by a person who continuously since March 9, 1979, held power to vote 25 per cent or more of the voting shares of that institution, or by a person who has acquired and maintained control of that institution after complying with the Control Act's procedures; (2) the acquisition of additional shares of a bank holding company or State member bank by a person who under paragraph (a) of this section would be deemed to have controlled that institution continuously since March 9, 1979, if: (i) the transaction will not result in that person's direct or indirect ownership or power to vote 25 per cent or more of any class of voting securities of the institution; or (ii) in other cases, the Board determines that the person has controlled the institution continuously since March 9, 1979; (3) the acquisition of shares in satisfaction of a debt previously contracted in good faith or through testate or intestate succession or bona fide gift, provided the acquirer advises the Federal Reserve Bank within thirty days after the acquisition and provides any information specified in paragraph 6 of the Control Act that the Reserve Bank requests; (4) a transaction subject to approval under section 3 of the Bank Holding Company Act or section 18 of the Federal Deposit Insurance Act; (5) a transaction described in sections 2(a)(5) or 3(a)(A) or (B) of the Bank Holding Company Act by a person there described; (6) a customary one-time proxy solicitation and receipt of pro-rata stock dividends; and (7) the acquisition of shares of a foreign bank holding company, as defined in section 225.4(g) of this Part, provided this exemption does not extend to the reports and information required under paragraphs 9, 10, and 12 of the Control Act (12 U.S.C. § 1817(j)(9), (10), and (12)). 3. Effective March 10, 1979, section 265.2(f) of Rules Regarding Delegation of Authority is amended by adding the following new subparagraph (38): ^ ^t % * ^ (38) Under the provisions of the Change in Bank Control Act of 1978 (12 U.S.C. § 1817(j)) and section 225.7 of this chapter (Regulation Y), with respect to a bank holding company or State member bank, to determine the informational sufficiency of notices and reports filed under the Act, to extend periods for consideration of notices, to determine whether a person who is or will be subject to a presumption described in section 225.7(a) of this chapter should file a notice regarding a proposed transaction, and, if all the following conditions are met, to issue a notice of intention not to disapprove a proposed change in control: (i) no member of the Board has indicated an objection prior to the Reserve Bank's action. (ii) all relevant departments of the Reserve Bank concur. (iii) if the proposal involves shares of a State member bank or a bank holding company controlling a State member bank, the appropriate bank supervisory authorities have indicated that they have no objection to the proposal, or no objection has been received from the appropriate bank supervisory authorities within the time allowed by the Act. Law Department (iv) no significant policy issue is raised by the proposal as to which the Board has not expressed its view. BANK AND HOLDING BANK ISSUED BY COMPANY MERGER THE BOARD ORDERS OF Orders Under Section 3 of Bank Holding Company GOVERNORS Act Catoosa Bancshares, Inc., Catoosa, Oklahoma Order Approving Formation of a Bank Holding Company Catoosa Bancshares, Inc., Catoosa, Oklahoma, has applied for the board's approval under section 3(a)(1) of the Bank Holding Company Act (12 U.S.C. § 1842(a)(1)), to become a bank holding company through the acquisition of 100 percent, less directors' qualifying shares, of the voting shares of 1st Bank of Catoosa, Catoosa, Oklahoma ("Bank"). Notice of the application, affording an opportunity for interested persons to submit comments and views, has been given in accordance with section 3(b) of the Act (43 Federal Register 53820 (1978)). The time for filing comments and views has expired, and the application and all comments received have been considered in light of the factors set forth in section 3(c) of the Act (12 U.S.C. § 1842(c)). Applicant is a nonoperating corporation with no subsidiaries, organized for the purpose of becoming a bank holding company through the acquisition of Bank, which has deposits of $9.0 million. 1 Upon acquisition of Bank, Applicant would control the 281st largest bank in Oklahoma, holding .07 percent of total deposits in commercial banks in the state. Bank is the 36th largest of 46 banks operating in the relevant banking market, which is the Tulsa RMA, and controls 0.28 percent of total market deposits. The purpose of the transaction is to facilitate the transfer of the ownership of Bank from individuals to a corporation controlled by the same individuals. Principal owners, officers, and directors of Applicant and Bank are also associated 1 Banking data as of December 31, 1977. 159 with two other banks and bank holding companies located in Bank's market. 2 The combined deposits of Bank and the affiliated banks total $81.7 million, which represents 2.54 percent of market deposits. This combined market share does not represent an adverse concentration of banking resources. Furthermore, Applicant's principal owners, officers, and directors were among the principal organizers of all three banks. While approval of the subject proposal would further solidify the existing relationship between Bank and the two affiliated banks and reduce the likelihood that Bank would become an independent competitor in the future, based upon the facts of record, including the size and rank in the market of the banks involved and the presence of other banking alternatives in the Tulsa banking market, it appears that consummation of this proposal would not result in any significant adverse effects upon competition in any relevant area. Thus, competitive factors are consistent with approval. Where principals of an applicant are engaged in operating a chain of one-bank holding companies, the board applies multibank holding company standards in assessing the financial and managerial resources and future prospects both of an applicant seeking to become a one-bank holding company and of its proposed subsidiary bank. Based upon such an analysis in this case, the financial and managerial resources and future prospects of Applicant, Bank and the affiliated banks and bank holding companies appear to be satisfactory. Applicant will incur no debt in its acquisition of Bank stock. Moreover, Applicant has committed to provide additional capital to Bank within 120 days following approval of this proposal. Therefore, considerations relating to banking factors in regard to this proposal are consistent with approval of the application. Although consummation of the proposal would result in no changes in the banking services offered by Bank, considerations relating to the convenience and needs of the community to be served are consistent with approval. It has been determined that consummation of this transaction would be consistent with the public interest and that the application should be approved. 2 Applicant's principals are associated with a proposed Oklahoma bank holding company, Security Bancshares, Inc., Tulsa, Oklahoma. The board approved the application by Security Bancshares, Inc., to acquire 100 percent, less directors' qualifying shares, of Security Bank, Tulsa, Oklahoma, on October 31, 1978. A 160 Federal Reserve Bulletin • February 1979 On the basis of the record, the application is approved for the reasons summarized above. The transaction shall not be made (a) before the thirtieth day following the effective date of this Order or (b) later than three months after the effective date of this Order, unless such period is extended for good cause by the Board of Governors or by the Federal Reserve Bank of Kansas City, pursuant to delegated authority. By order of the Secretary of the Board, acting pursuant to authority delegated from the Board of Governors, effective January 24, 1979. [seal] (Signed) G r i f f i t h L . G a r w o o d , Deputy Secretary of the Board. First City Bancorporation of Texas, Inc., Houston, Texas Order Approving Acquisition of Bank First City Bancorporation of Texas, Inc., Houston, Texas, a bank holding company within the meaning of the Bank Holding Company Act, has applied for the board's approval under section 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to acquire 100 percent of the voting shares (less directors' qualifying shares) of First City BankBear Creek, Harris County, Texas ("Bank"), a proposed new bank. Notice of the application, affording opportunity for interested persons to submit comments and views, has been given in accordance with section 3(b) of the Act. The time for filing comments and views 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 Act (12 U.S.C. § 1842(c)). Applicant, the second largest banking organization in Texas, controls 31 banking subsidiaries, with aggregate deposits of approximately $4.8 billion, representing 8 percent of total deposits in commercial banks in the state. 1 Since Bank is a proposed new bank, Applicant's acquisition of Bank would not cause any immediate increase in Applicant's share of deposits in commercial banks in Texas. Bank has received charter approval from the Department of Banking of the state of Texas and 1 All deposit data are as of December 31, 1977, and reflect bank holding company formations and acquisitions approved as of November 30, 1978. is to be located in an unincorporated community in Harris County, approximately 20 miles west of downtown Houston. Applicant ranks as the largest of 122 banking organizations in the Houston banking market, 2 with 13 subsidiary banks controlling 20.6 percent of total market deposits. Applicant's banking subsidiary closest to Bank is located approximately 13 miles northeast of Bank, outside of Bank's proposed service area. Since Bank is a proposed new bank, Applicant's acquisition of Bank would not eliminate any existing competititon, nor would it have any immediate effect upon Applicant's share of commercial bank deposits in the relevant market. While under some circumstances de novo expansion in a market by a leading organization within that market could reduce prospects for market deconcentration by preempting viable sites for de novo entry or expansion by other firms, Applicant's de novo expansion in the rapidly growing Houston banking market would have only a minimal impact upon market entry conditions. 3 From the facts of record, it appears that even after consummation of the proposal the market would remain attractive for de novo entry and that ample opportunities for market deconcentration will remain, through either foothold or de novo entry. Accordingly, based upon all the facts of record, including the growth of the Houston market, the large number of competing organizations therein, and the opportunities for market deconcentration, the Board concludes that approval of this application would not result in any adverse effects upon competition in any relevant area. The financial and managerial resources and future prospects of Applicant and its subsidiary banks are regarded as consistent with approval of this application. Bank, as a proposed de novo bank, has no financial or operating history; however, its prospects as a subsidiary of Applicant appear favorable. Accordingly, considerations relating to banking factors are consistent with approval of this application. The establishment of 2 The Houston banking market is approximated by the Houston Ranally Metropolitan Area ( " R M A " ) , which includes Harris County and portions of Brazoria, Fort Bend, Galveston, Liberty, and Montgomery Counties in Texas. 3 The Houston banking market experienced a population increase of 25.4 percent during the 1970-1978 period, and the population of the city of Houston increased by 18.4 percent. During the same period the population for the state of Texas increased by only 14.6 percent. It is also noted that the ratio of population-to-banking offices in the Houston banking market is 1.45 times the statewide average and per capita deposits in the market are 1.32 times the statewide average. Law Department Bank would provide a new and convenient fullservice banking alternative for the area's residents. Thus, considerations relating to the convenience and needs of the community to be served lend some weight toward approval of the application. Accordingly, it is the board's judgment that consummation of the transaction would be in the public interest and that the application should be approved. On the basis of the record, the application is approved for the reasons summarized above. The transaction shall not be made (a) before the thirtieth calendar day following the effective date of this Order, or (b) later than three months after that date, and (c) First City Bank-Bear Creek, Harris County, Texas, shall be opened for business not later than six months after the effective date of this Order. Each of the periods described in (b) and (c) may be extended for good cause by the board, or by the Federal Reserve Bank of Dallas, pursuant to delegated authority. By order of the Board of Governors, effective January 15, 1979. Voting for this action: Chairman Miller and Governors Wallich, Coldwell, Partee, and Teeters. [seal] (Signed) G r i f f i t h L . G a r w o o d , Deputy Secretary of the Board. Republic of Texas Corporation, Dallas, Texas Order Approving Acquisition of Bank Republic of Texas Corporation, Dallas, Texas, a bank holding company within the meaning of the Bank Holding Company Act, has applied for the board's approval under § 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to acquire all of the voting shares (less directors' qualifying shares) of the successor by merger to The First National Bank of Piano, Piano, Texas ("Bank"). The bank into which Bank is to be merged has no significance except as a means to facilitate the acquisition of the voting shares of Bank. Accordingly, the proposed acquisition of shares of the successor organization is treated herein as the proposed acquisition of the shares of Bank. Applicant presently controls 24.85 percent of the voting shares of Bank. Notice of the application, affording opportunity 161 for interested persons to submit comments and views, has been given in accordance with § 3(b) of the Act. The time for filing comments and views has expired, and the board has considered the application and all comments received, including those of the Comptroller of the Currency, in light of the factors set forth in § 3(c) of the Act (12 U.S.C. § 1842(c)). Applicant, the fourth largest banking organization in the state of Texas, has eighteen banking subsidiaries with aggregate deposits of $3,930 million, representing 6.46 percent of commercial bank deposits in the state. 1 Acquisition of Bank, one of the state's smaller banking organizations, would increase Applicant's share of commercial bank deposits in Texas by less than one-tenth of one percent. By Order dated October 25, 1973 (38 F.R. 30581), the board approved the application of Applicant to become a bank holding company through the direct acquisition of Republic National Bank of Dallas ("Republic Bank") and the indirect acquisition of 29.9 percent of the voting shares of Oak Cliff Bank & Trust Company, Dallas, Texas. In addition to its interest in Bank, Republic Bank at the time also owned indirectly between 5 and 24.99 percent of the shares of 20 other banks, 17 of which were in the Dallas banking market. 2 Applicant represented to the board that it would file separate applications for prior approval by the board for acquisition of additional shares in each of certain of those banks, and would divest completely its interests in others. In its Order the board stated that each such application filed by Applicant would be considered on its own merits in light of the statutory standards set forth in § 3 of the Act. Bank is the 31st largest banking organization in the Dallas banking market and holds deposits of $55.5 million, representing 0.3 percent of the total deposits held by commercial banks in the market. Applicant is already a significant competitor in the Dallas banking market. Applicant, with seven subsidiary banks, is the largest banking organization in that market and holds total deposits of $3,047.9 million, 3 representing 26.3 percent of the total deposits in commercial banks in the market. 1 All banking data are as of March 31, 1978. The Dallas banking market is approximated by the Dallas RMA. 3 This figure reflects bank holding company acquisitions and formations approved as of October 31, 1978. 2 A 162 Federal Reserve Bulletin • February 1979 While consummation of the proposal would appear to eliminate some existing competition inasmuch as Applicant and Bank operate in the same market, the board notes that Applicant, or its predecessor in interest, Republic Bank, has held 24.85 percent or more of the shares of Bank since 1956, and that the nature of this relationship is such that little, if any, meaningful competition presently exists between Bank and Applicant's subsidiary banks in the Dallas market. But for the history of the established relationship between Applicant and Bank, the effects on existing competition would be viewed as more serious, but viewed in light of that relationship the effects are only slight. Moreover, while Applicant is one of the largest organizations in the banking market, in view of the facts presented in the record of this application, the board does not regard the slight increase in concentration of market deposits as significant. Accordingly, the board concludes that the proposed acquisition of Bank by Applicant would not have significant adverse effects on competition. The financial and managerial resources of Applicant and its subsidiaries are regarded as satisfactory and their future prospects appear favorable. The financial and managerial resources and future prospects of Bank are also regarded as satisfactory, particularly in light of Applicant's commitment to provide Bank with additional capital. Therefore, considerations relating to banking factors are consistent with and lend some weight toward approval of the application. Upon consummation of the proposed acquisition, Applicant will assist Bank in developing programs to enable it to serve the banking needs of all sections of the city of Piano. In particular, Applicant intends to cause Bank to increase its commercial lending in order to help meet the general credit needs of the rapidly expanding Piano community. In addition, affiliation with Applicant will provide Bank's customers with access to credit life and credit accident and health insurance offered by a subsidiary of Applicant at rates below the state maximum rates currently charged by Bank. Thus, considerations relating to convenience and needs of the community to be served lend some weight toward approval of the application, and in the board's view, outweigh any slightly adverse effects on competition that might result from consummation of this proposal. Accordingly, it is the board's judgment that the proposed acquisition would be in the public inter- est and that the application should be approved. On the basis of the record, the application is approved for the reasons summarized above. The transaction shall not be made (a) before the thirtieth calendar day following the effective date of this Order or (b) later than three months after the effective day of this Order unless such period is extended for good cause by the board or by the Federal Reserve Bank of Dallas pursuant to delegated authority. By Order of the Board of Governors, effective January 26, 1979. Voting for this action: Chairman Miller and Governors Wallich, Partee, and Teeters. Absent and not voting: Governor Coldwell. [seal] (Signed) G r i f f i t h L . G a r w o o d , Deputy Secretary of the Board. Citizens Ban-Corporation, Rock Port, Missouri Order Denying Acquisition of Bank Citizens Ban-Corporation, Rock Port, Missouri, a bank holding company within the meaning of the Bank Holding Company Act, has applied for the board's approval under section 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to acquire 95.31 per cent of the voting shares of Farmers and Merchants Bank of Elmo ("Bank"), Elmo, Missouri. Notice of the application, affording opportunity for interested persons to submit comments and views, has been given in accordance with section 3(b) of the Act. The time for filing comments and views 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 Act (12 U.S.C. § 1842(c)). Applicant, a one-bank holding company, controls The Citizens Bank of Atchison County ("Rock Port"), Rock Port, Missouri. The acquisition of Bank would increase Applicant's share of total deposits in commercial banks in Missouri from 0.07 per cent to 0.11 per cent, and would not have an appreciable eff ect on the concentration of banking resources in the state. Bank, with deposits of $7.5 million, 1 is the fourth largest of six commercial banks in its bank- 1 All banking data are as of December 31, 1977. Law Department ing market. 2 Bank and Rock Port are located in separate banking markets, and consummation of this proposal would not eliminate any significant competition. Accordingly, competitive considerations are consistent with approval. Under the Bank Holding Company Act, the board is required to consider the financial and managerial resources of an applicant and its subsidiary banks. In the exercise of that responsibility, the board has indicated on previous occasions that it will closely examine the condition of an applicant to ensure that it will serve as a source of financial and managerial strength to its subsidiary banks. 3 The board finds that considerations relating to the financial resources of Applicant warrant denial of the application. The board has previously stated that less restrictive debt to equity standards can appropriately be applied to prospective onebank holding companies if the adverse effects associated with leverage are outweighed by public benefits in the case of transfers of ownership of small rural banks. However, the financial structure of a multi-bank holding company should be more conservative than that of a one-bank holding company. 4 In connection with this proposal, Applicant would incur acquisition debt of approximately $1.3 million, which Applicant proposes to service over a twelve-year period solely through earnings of its subsidiary banks. Neither Applicant nor any of its principals will have contributed any cash towards the purchase of Bank. Applicant's principals purchased Bank in February 1978 exclusively with debt, and Applicant would assume this debt in its entirety. Applicant may be able to retire its debt while maintaining a satisfactory capital position for its subsidiary banks, but capital ratios at both banks would decline below current ratios. Although by itself this decline would not necessarily constitute an adverse factor, it compounds Applicant's initial weak financial position, and Applicant's proposal would greatly limit its 163 ability to furnish additional capital if needed in response to unforeseen problems in its subsidiary banks. The Board has considered Applicant's managerial resources, which it regards as satisfactory. However, these managerial considerations do not outweigh the adverse financial factors, and therefore, considerations relating to the banking factors warrant denial of this application. As indicated above, the proposed acquisition is essentially a restructuring of the ownership interests of Bank and consummation of the proposal would not result in an immediate change in the service provided by Bank. Consequently, considerations relating to the convenience and needs of the community to be served are consistent with, but do not lend weight toward, approval of the application. On the basis of all the circumstances concerning this application, the board concludes that the banking considerations involved in the proposal present adverse factors bearing upon the financial resources and future prospects of Applicant and Bank. These adverse factors are not outweighed by any procompetitive effects or by benefits to the convenience and needs of the relevant community. Accordingly, it is the board's judgment that approval of the application would not be in the public interest and that the application should be denied. On the basis of the facts of record, the application is denied for the reasons summarized above. By order of the Board of Governors, effective January 19, 1979. V o t i n g for this action: C h a i r m a n M i l l e r and G o v e r nors W a l l i c h , C o l d w e l l , Partee, and T e e t e r s . [seal] (Signed) G r i f f i t h L . G a r w o o d , Deputy Secretary of the Board. Orders Under Section 4 of Bank Holding Company Act 2 The relevant banking market is approximated by Nodaway County, Missouri, and the southern one-third of Page County, Iowa. 3 Section 3(c) of the Act provides that the board must, in every case, consider, among other things, the financial and managerial resources of both the applicant company and the bank to be acquired. The board's action in this case is based on a consideration of such factors. See Board of Governors of the Federal Reserve System v. First Lincolnwood Corporation, 47 U . S . L . W . 4048 (December 11, 1978). 4 S e e Stuarco Oil Company, Inc., 6 1 FEDERAL RESERVE BULLETIN 1 7 8 , 1 7 9 ( 1 9 7 5 ) ; BHCo, Inc., 6 0 F E D E R A L RESERVE BULLETIN 123, 124 (1974). Alaska Bancorporation, Anchorage, Alaska Order Approving Retention and Acquisition of Voting Shares of Alaska Bancshares, Inc. Alaska Bancorporation, Anchorage, Alaska, a bank holding company within the meaning of the Bank Holding Company Act, has applied for the board's approval, under § 4(c)(8) of the Act (12 A 164 Federal Reserve Bulletin • February 1979 U.S.C. § 1843(c)(8)) and § 225.4(b)(2) of the board's Regulation Y (12 C.F.R. § 225.4(b)(2)), to retain its 89.6 percent interest in Alaska Bancshares, Inc., Anchorage, Alaska ("Bancshares"), and to acquire additional voting shares of Bancshares so that Bancshares will become a wholly owned subsidiary of Applicant. 1 Bancshares engages in the activity of acting as agent or broker for the sale of life and accident insurance and health insurance in connection with extensions of credit by its banking subsidiary, Alaska Statebank, Anchorage, Alaska ("Bank"). 2 Such activity has been determined by the board to be closely related to banking (12 C.F.R. § 225.4(a)(9)(ii)). Notice of the application, affording opportunity for interested persons to submit comments and views on the public interest factors, has been duly published (43 Federal Register 55820). The time for filing comments and views has expired, and the board has considered the application and all comments received in the light of the public interest factors set forth in § 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)). Applicant, a one-bank holding company, became a bank holding company as a result of the 1970 Amendments to the Act, by virtue of its control of the majority of the voting shares of Bank. Applicant acquired a total of 65 percent of the voting shares of Bancshares during 1969 and 1970. Pursuant to the provisions of section 4 of the Act, Applicant has until December 31, 1980, to divest these shares of Bancshares or, in 1 The shares which Applicant seeks permission to retain include 666.666 common shares acquired in December 1974 and 768 common shares acquired in June 1976, as well as 804 preferred shares acquired in December 1976, all of which acquisitions were in violation of section 4 of the Act. The board has examined all of the circumstances surrounding Applicant's acquisition of these shares, including Applicant's correspondence with the Federal Reserve Bank of San Francisco concerning the proposed acquisitions, and the fact that Bancshares was authorized to continue to engage in its nonbanking activities on the basis of permanent grandfather privileges pursuant to the proviso contained in section 4(a)(2) of the Act, and has concluded (hat the violations were inadvertent and of a technical nature. Furthermore, when advised of the violations, Applicant acted responsibly and cooperated fully with the Federal Reserve System in seeking to resolve the matter. Accordingly, the board has concluded that the violations are not so serious as to require denial of this application. 2 Bancshares is also engaged in impermissible real estate development activities, which Applicant has not applied for the board's approval to retain. Accordingly, pursuant to section 4(a)(2) of the Act, Applicant must divest its indirect interest in Bancshares' impermissible activities on or before December 31, 1980. the alternative, to apply to the board for approval to retain them. 3 Applicant is the fifth largest banking organization in Alaska by virtue of its control of Bank. Bank has deposits of $90.9 million, representing approximately 5.8 percent of the total deposits in commercial banks in the state. 4 Applicant does not engage in any other nonbanking activities. Bancshares conducts its credit life and credit accident and health insurance agency business solely in connection with extensions of credit by Bank. Bank has a total of eight branches, located in three relevant markets in Alaska, at which Applicant otters credit-related insurance. Inasmuch as Bancshares had been engaged in its insurance agency activities for some time prior to its acquisition by Applicant, and Applicant was not engaging in any insurance activities at that time, it appears that the acquisition of Bancshares by Applicant did not eliminate any existing or potential competition between the two. Accordingly, the board concludes that Applicant's acquisition of Bancshares did not have any adverse effects on competition in any relevant area, and that its retention of Bancshares, as well as proposed acquisition of additional shares, would not have any adverse competitive effects. Applicant's retention of Bancshares as its wholly owned subsidiary will ensure the continued availability of credit life and credit accident and health insurance to customers of Bank. Furthermore, there is no evidence in the record to indicate that consummation of the proposal would result in any undue concentration of resources, unfair competition, conflicts of interest or unsound banking practices. On the basis of the foregoing and other facts of record, the board concludes that the benefits to the public resulting from Applicant's acquisition of Bancshares outweigh any possible adverse effects that could have resulted from the 3 Section 4 of the Act provides, inter alia, that nonbanking activities acquired between June 30, 1968, and December 31, 1970, by a company which becomes a bank holding company as a result of the 1970 Amendments may not be retained beyond December 31, 1980, without prior board approval. In December 1972, the board determined that Bancshares was entitled to engage in its nonbanking activities on the basis of permanent grandfather privileges pursuant to the proviso of section 4(a)(2) of the Act, since these activities had been commenced by Bancshares before June 30, 1969, but noted that Applicant, which acquired Bancshares in July 1969, was not entitled to grandfather rights for such activities (59 FED- ERAL RESERVE B U L L E T I N 2 1 1 4 (1973)). Unless otherwise noted, all financial data are as of June 30, 1978. Law Department affiliation, and in the board's view approval of Applicant's retention of Company as a wholly owned subsidiary can reasonably be expected to continue to produce benefits to the public that would outweigh possible adverse effects. Based upon the foregoing and other considerations reflected in the record, the board has determined that the balance of the public interest factors the board is required to consider under § 4(c)(8) is favorable, and the application should be approved. Accordingly, the application is hereby approved. The acquisition shall be consummated no 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 San Francisco. This determination is subject to the conditions set forth in § 225.4(c) of Regulation Y 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 the provisions and purposes of the Act and the board's regulations and orders issued thereunder, or to prevent evasion thereof. By order of the Board of Governors, effective January 19, 1979. Voting for this action: Chairman Miller and Governors Wallich, Coldwell, Partee, and Teeters. [seal] (Signed) G r i f f i t h L . G a r w o o d , Deputy Secretary of the Board. F&M National Corporation, Winchester, Virginia Order Denying Retention of Winchester Credit Corporation and its wholly owned subsidiary, Rouss Finance Company F&M National Corporation, Winchester, Virginia, a bank holding company within the meaning of the Bank Holding Company Act, has applied for the board's approval under section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) of the board's Regulation Y (12 C.F.R. § 225.4(b)(2)) to retain all of the voting shares of Winchester Credit Corporation ("Winchester"), and its wholly owned subsidiary, Rouss Finance Company ("Rouss"), both of Winchester, Virginia. Winchester engages in commercial, mortgage, and consumer lending, as well as in- 165 stallment sales financing. Rouss engages in consumer lending. In addition, both Winchester and Rouss act as agent in the sale of credit life and credit accident and health insurance directly related to such extensions of credit. Such activities have been determined by the board to be closely related to banking (12 C.F.R. § 225.4(a)(1) and (9)). Notice of the application, affording opportunity for interested persons to submit comments and views on the public interest factors, has been duly published (43 Federal Register 38940). The time for filing comments and views 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 Act (12 U.S.C. § 1843(c)(8)). Applicant controls two banks and is the 14th largest banking organization in Virginia, controlling aggregate deposits of $150.2 million, representing 0.9 per cent of the total deposits in commercial banks in the state. 1 Winchester and Rouss have assets of $5.5 million and $0.6 million, respectively, as of May 31, 1978. Applicant became a bank holding company on December 31, 1970, as a result of the 1970 Amendments to the Act, by virtue of its control at that time of Farmers and Merchants National Bank, Winchester, Virginia ("Bank"). Applicant acquired all of the outstanding shares of Winchester and its wholly owned subsidiary, Rouss, on July 10, 1970. Pursuant to the provisions of section 4 of the Act, Applicant has until December 31, 1980, to divest itself of its interest in Winchester and Rouss or, in the alternative, to apply for and secure the Board's approval to retain such interest. In order to approve an application under section 4(c)(8) of the Act, the board must determine whether the activities of the company to be acquired or retained are "so closely related to banking or managing or controlling banks as to be a proper incident thereto." Where, as here, the activities of the subject company have been determined previously by regulation to be closely related to banking, the board is required to consider whether a bank holding company's operation of that company "can reasonably be expected to produce benefits to the public such as greater convenience, increased competition, or gains in 1 Banking data are as of March 31, 1978, unless otherwise indicated. A 166 Federal Reserve Bulletin • February 1979 efficiency, that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking practices." This statutory test requires a positive showing by an applicant that the public benefits of its proposal outweigh the possible adverse effects. The board regards the standards under section 4(c)(8) of the Act for retention of shares to be the same as the standards for a proposed acquisition. The relevant product market to be considered in evaluating the competitive effects of this proposal is the making of personal cash loans, and the board has previously determined that consumer finance companies compete with commercial banks in the area of personal loans. 2 At the time Applicant acquired Winchester and Rouss in 1970, Bank, which was then Applicant's sole banking subsidiary, was the largest of four banking organizations in the Winchester City/Frederick County banking market, 3 with deposits of $45.4 million, and controlled 19.8 percent of the market's personal cash loans. At that time, Winchester and Rouss, each of which had one office located in the same market as Bank, held assets of $1.1 million and $0.5 million, respectively, and controlled 2.3 percent and 1.2 percent, respectively, of the market's personal cash loans. Thus, in the aggregate, Applicant controlled 23.3 percent of the market's personal cash loans in 1970. By year-end 1977, Bank's market share had grown to 26.2 percent, while the market shares of Winchester and Rouss were 2.1 percent, and 1.7 percent, respectively. Thus, Applicant's market share of personal cash loans had increased to 30 percent by year-end 1977.4 The facts of record indicate that the acquisition of Winchester and Rouss by Applicant in 1970 eliminated a significant amount of existing competition in the relevant market and, as a result, Applicant has further increased its share of the market's personal cash loans. Accordingly, in the board's view, the adverse effects upon competition resulting from the acquisition by Applicant of Winchester and Rouss weigh against approval of this application. 2 See Bankers Trust Corporation (Public Loan Company), 5 9 FEDERAL RESERVE BULLETIN 6 9 4 3 (1973). The Winchester City/Frederick County banking market is comprised of the city of Winchester and the surrounding county of Frederick. 4 Applicant also engages in consumer lending through Peoples Loans, Incorporated, Luray, Virginia, a nonbank subsidiary located outside the relevant banking market, acquired on October 30, 1974, pursuant to board approval. As stated above, Applicant must bear the burden of showing that the benefits to the public that have resulted or will result from the application outweigh in the public interest the adverse effects. However, it appears from the facts of record that any public benefits stemming from the acquisition of Winchester and Rouss could have been achieved by Applicant on a de novo basis or through Bank without the elimination of two alternative sources of competition in the market. Based upon the foregoing and other considerations reflected in the record, the board has determined that the balance of the public interest factors the board is required to consider under section 4(c)(8) is not favorable. Accordingly, this application is denied. By order of the Board of Governors, effective January 12, 1979. Voting for this action: Chairman Miller and Governors Wallich, Coldwell, Partee, and Teeters. [seal] (Signed) G r i f f i t h L . G a r w o o d , Deputy Secretary of the Board. NCNB Corporation, Charlotte, North Carolina Order Approving Retention of NCNB Mortage Company NCNB Corporation, Charlotte, North Carolina, a bank holding company within the meaning of the Bank Holding Company Act, has applied for the board's approval, under section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) of the board's Regulation Y (12 C.F.R. § 225.4(b)(2)) to retain NCNB Mortgage Company, Charlotte, North Carolina ("Company"), a company that engages in the activities of mortgage banking, including originating, and servicing for its own account and the account of others, conventional and guaranteed residential, apartment, commercial, and industrial loans. Company also acts as agent for the sale of credit life insurance and credit accident and health insurance directly related to its extensions of credit. Such activities have been determined by the board to be closely related to banking (12 C.F.R. § 225.4(a)(1),(3), and (9)). 1 1 Company also engages, through six subsidiaries, in real estate development activities that are impermissible for a bank holding company. Under section 4(a)(2) of the Act, these Law Department Notice of the application, affording opportunity for interested persons to submit comments and views on the public interest factors, has been duly published (43 Federal Register 45644). The time for filing comments and views 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 Act (12 U.S.C. § 1843(c)(8)). Applicant, a one-bank holding company, became a bank holding company as a result of the 1970 Amendments to the Act by virtue of its control of North Carolina National Bank, Charlotte, North Carolina ("Bank"). Company was organized as a subsidiary of Applicant on December 6, 1968. Pursuant to the provisions of section 4 of the Act, Applicant has until December 31, 1980, to divest its interest in Company or, in the alternative, to apply to secure the board's approval to retain such interest. 2 The board regards the standards under section 4(c)(8) for retention of shares to be the same as the standards for a proposed acquisition of a 4(c)(8) activity. Applicant is the second largest banking organization in North Carolina by virtue of its control of Bank, which has deposits of $2.5 billion, representing 17.2 percent of the total deposits in commercial banks in the state. 3 In addition to engaging in mortgage banking and related insurance activities in North Carolina through Company, Applicant engages through subsidiaries in a variety of nonbanking activities, including consumer finance, mortgage banking outside of North Carolina, factoring, providing trust services, and acting as an investment advisor. Company was established by Applicant in 1968 to assume the mortgage banking business of Bank, including the assets of two small mortgage companies acquired by Bank in 1965 and 1967. While at the time of acquisition Bank also conducted mortgage business in the same markets as these two companies, activities may not be retained beyond December 31, 1980, and Applicant has committed to the board that it will discontinue these activities by divesting these subsidiaries by December 31, 1980. In addition, Company has four other subsidiaries engaged in nonbanking activities for which Applicant claims other exemptions under the Act. Accordingly, Applicant has not applied for the board's approval to retain such subsidiaries, and the board's action herein does not pertain to such subsidiaries. 2 Section 4 of the Act provides, inter alia, that nonbanking activities acquired between June 30, 1968, and December 31, 1970, by a company that becomes a bank holding company as a result of the 1970 Amendments may not be retained beyond December 31, 1980, without board approval. 3 All banking data are as of June 30, 1978. 167 from the information available, it does not appear that the effects of the acquisition on existing competition were significant. Company operates 17 offices in six markets in North Carolina, as well as Atlanta, Georgia, and Orlando, Florida. As of December 31, 1977, Company, with a real estate mortgage servicing portfolio of $722 million, ranked 58th among all mortgage companies in the United States. Company engages principally in the origination and servicing of 1-4 family residential mortgage loans in six local markets in North Carolina. In 1977 Company originated an aggregate of $93 million 1-4 family residential loans in North Carolina. Bank also engages in originating 1-4 family residential mortgages in the six North Carolina markets where Company is represented. However, in 1977 Company and Bank originated $94.8 million of 1 to 4 family residential mortgages in North Carolina, representing from 2.0 to 5.1 percent of such loans in the relevant markets where both Company and Bank operate, and a combined average of 3.9 percent of such loans. In view of the small market shares held by Bank and Company, Applicant cannot be regarded as dominant in the mortgage lending market in any relevant area. The board concludes, based on all the facts of record, that Applicant's acquisition did not have any significant adverse effects on competition in any relevant area. Furthermore, there is no evidence in the record indicating that the proposal would result in undue concentration of resources, unfair competition, conflicts of interests, unsound banking practices or other adverse effects. It appears that Applicant's acquisition of Company has produced benefits to the public such as greater efficiency in processing loans. In particular, Applicant has installed a new data processing system which has enabled Company to improve its mortgage servicing activities. In addition, Applicant has, through Company, actively participated in government programs designed to expand the availability of low and moderate income housing. These benefits to the public are consistent with approval of the subject application, and it is the board's view that approval of Applicant's retention of Company can reasonably be expected to continue to produce benefits to the public that would outweigh possible adverse effects. Based upon the foregoing and other considerations reflected in the record, the board has determined that the balance of the public interest A 168 Federal Reserve Bulletin • February 1979 factors the board is required to consider under § 4(c)(8) is favorable. Accordingly, the application is hereby approved. This determination is subject to the conditions set forth in § 225.4(c) of Regulation Y 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 the provisions and purposes of the Act and the board's regulations and orders issued thereunder, or to prevent evasion thereof. By order of the Board of Governors, effective January 12, 1979. Voting for this action: Chairman Miller and Governors Wallich, Coldwell, Partee, and Teeters. [seal] (Signed) G r i f f i t h L. G a r w o o d , Deputy Secretary of the Board. Certifications Under the Bank Holding Company Tax Act of 1976 Northwestern Financial Corporation, North Wilkesboro, North Carolina Prior Certification Pursuant to the Bank Holding Company Tax Act of 1976 [Docket No. TCR 76-170] Northwestern Financial Corporation, North Wilkesboro, North Carolina ("Northwestern"), has requested a prior certification pursuant to § 6158(a) of the Internal Revenue Code (the "Code"), as amended by § 3(a) of the Bank Holding Company Tax Act of 1976 (the "Tax Act"), that its proposed sale of all the 1,100,000 issued and outstanding shares of Northwestern Security Life Insurance Company, Phoenix, Arizona ("Company"), held by Northwestern, is necessary or appropriate to effectuate § 4 of the Bank Holding Company Act (12 U.S.C. § 1843) ("BHC Act"). The shares of Company are to be sold to The Central National Life Insurance Company of Omaha, Omaha, Nebraska, a subsidiary of Beneficial Corporation, Wilmington, Delaware ("Beneficial"), for $12,580,000 in cash. In connection with this request, the following information is deemed relevant for purposes of issuing the requested certification: 1 1 This information derives from Northwestern's correspondence with the board concerning its request for this certi- 1. Northwestern is a corporation organized under the laws of the state of North Carolina on January 10, 1969. On August 1, 1969, Northwestern acquired ownership and control of 99.8 percent of the outstanding voting shares of The Northwestern Bank, North Wilkesboro, North Carolina ("Bank"). 2. Northwestern became a bank holding company on December 31, 1970, as a result of the 1970 Amendments to the BHC Act, by virtue of its ownership and control at that time of more than 25 percent of the outstanding voting shares of Bank, and it registered as such with the board on November 26, 1971. Northwestern would have been a bank holding company on July 7, 1970, if the BHC Act Amendments of 1970 had been in effect on that date, by virtue of its ownership and control on that date of more than 25 percent of the voting shares of Bank. Northwestern currently owns and controls 99.8 percent of the outstanding voting shares of Bank. 3. Company is a wholly owned subsidiary of Northwestern acquired by merger on June 30, 1969. Since 1959 Company has engaged in the insurance business, and is currently engaged in the activity of underwriting all types of ordinary, term, group, and credit life insurance, a hospital benefit plan, and accident and health insurance. Northwestern owns and controls the 1,100,000 issued and outstanding shares of Company, all of which it acquired before July 7, 1970. 4. Northwestern did not file an application with the board, and did not otherwise obtain the board's approval pursuant to § 4(c)(8) of the BHC Act, to retain the shares of Company or engage in the activities carried on by Company. 2 5. On January 4, 1979, Northwestern concluded negotiations with Beneficial for a Stock Purchase Agreement providing for the sale of the shares of Company to a subsidiary of Beneficial for cash. Neither Beneficial nor any of its subsidiaries is indebted to Northwestern or its subsidiaries. fication, Northwestern's Registration Statement filed with the board pursuant to the BHC Act, and other records of the board. 2 Some or all of Company's activities may be among those activities that the board previously has determined to be closely related to banking under § 4(c)(8) of the BHC Act. However, in the absence of approval by the board of an application by Northwestern to retain Company, Northwestern may not retain the shares of Company beyond December 31, 1980. (Cf. Wachovia Corp., Docket No. TCR 76-132, 63 FEDERAL RESERVE B U L L E T I N 6 0 6 ( M a y 9 , 1977)). Law Department 6. No director, officer, or employee with policy making functions of Northwestern or any of its subsidiaries (including honorary and advisory directors) holds any such position with Beneficial or any subsidiary thereof. 7. Northwestern does not control in any manner the election of a majority of the directors, or exercise a controlling influence over the management or policies of Beneficial or its subsidiaries. On the basis of the foregoing information, it is hereby certified that: (A) Northwestern is a qualified bank holding corporation within the meaning of section 6158(F)(1) and section 1103(b) of the Code, and satisfies the requirements of section 1103(b); (B) the shares of Company proposed to be sold by Northwestern are "prohibited property" within the meaning of sections 6158(F)(2) and 1103(c) of the Code; and ORDERS APPROVED By the Board of UNDER BANK HOLDING 169 (C) the sale of the shares of Company by Northwestern is necessary or appropriate to effectuate § 4 of the BHC Act. This certification is based upon the representations made to the board by Northwestern and upon the facts set forth above. In the event the board should hereafter determine that facts material to this certification are otherwise than as represented by Northwestern, or that Northwestern has failed to disclose to the board other material facts, it may revoke this certification. By order of the Board of Governors acting through its General Counsel, pursuant to delegated authority (12 C.F.R. § 265.2(b)(3), effective January 8, 1979. [seal] COMPANY (Signed) G r i f f i t h L . G a r w o o d , Deputy Secretary of the Board. ACT Governors During January 1979, the Board of Governors approved the applications listed below. Copies are available upon request to Publications Services, Division of Support Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Applicant Capital Management, Inc., Lincoln, Nebraska Chenoa Corporation, Farmer City, Illinois Lockney Bancshares, Inc., Lockney, Texas Miles Service Corporation, Miles, Iowa Northwest Ohio Bancshares, Inc., Toledo, Ohio Palisade Bancshares, Inc., Palisade, Colorado South Plains Bancshares, Inc., Idalou, Texas T & C Bancorp, Inc., St. Joseph, Missouri Bank(s) Broken Bow Enterprises, Inc., Broken Bow, Nebraska Bank of Chenoa, Chenoa, Illinois First National Bank in Lockney, Lockney, Texas Miles Savings Bank, Miles, Iowa The Willard United Bank, Willard, Ohio The Palisade National Bank, Palisade, Colorado Idalou State Bank, Idalou, Texas Town and Country Bank, Quincy, Illinois Board action (effective date) 1/29/79 1/15/79 1/19/79 1/12/79 1/26/79 1/25/79 1/12/79 1/15/79 A 170 Federal Reserve Bulletin • February 1979 Section 4 Nonbanking company (or activity) Applicant Chenoa Corporation, Farmer City, Illinois By Federal Reserve Effective date To act as agent or broker for the sale of insurance directly related to extensions of credit by Bank 1/15/79 Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies of the orders are available upon request to the Reserve Banks. Section 4 Applicant Bank(s) CB & T Bancshares, Inc., Columbus, Georgia Security Bank and Trust Company of Albany, Albany, Georgia Community State Bank, Eau Claire, Wisconsin Central Wisconsin Bancshares, Inc., Wausau, Wisconsin ORDERS APPROVED UNDER BANK Applicant Central Bank of Northern Virginia, Bailey's Crossroads, Virginia Fidelity American Bank, Norfolk, Virginia United Jersey Bank, Hackensack, New Jersey MERGER Reserve Bank Effective date Atlanta 1/23/79 Chicago 1/15/79 ACT Bank(s) First Manassas Bank and Trust Company, Manassas, Virginia Fidelity American Bank, Eastern Shore, Parksley, Virginia United Jersey Bank/South Bergen, Carlstadt, New Jersey Reserve Bank Effective date Richmond 1/15/79 Richmond 1/25/79 New York 1/25/79 Law Department PENDING CASES INVOLVING THE BOARD OF 171 GOVERNORS Does not include suits against the Federal Reserve Banks in which the Board of Governors is not named a party. California Life Corporation v. Board of Governors, filed January 1979, U.S.C.A. for the District of Columbia. Hunter Holding Company v. Board of Governors, filed December 1978, U.S.C.A. for the Eighth Circuit. Consumers Union of the United States v. G. William Miller, et al., filed December 1978, U.S.D.C. for the District of Columbia. Commercial National Bank, et alv. Board of Governors, filed December 1978, U.S.C.A. for the District of Columbia. Ella Jackson et al., v. Board of Governors, filed November 1978, U.S.C.A. for the Fifth Circuit. Metro-North State Bank, Kansas City v. Board of Governors, filed October 1978, U.S.C. A. for the Eighth Circuit. Manchester-Tower Grove Community Organization/ACORN v. Board of Governors, filed September 1978, U.S.C.A. for the District of Columbia. Beckley v. Board of Governors, filed July 1978, U.S.D.C. for the Northern District of Illinois. Independent Bankers Association of Texas v. First National Bank in Dallas, et al., filed July 1978, U.S.C.A. for the Northern District of Texas. Mid-Nebraska Bancshares, Inc. v. Board of Governors, filed July 1978, U.S.C.A. for the District of Columbia. NCNB Corporation v. Board of Governors, filed June 1978, U.S.C.A. for the Fourth Circuit. United States League of Savings Associations v. Board of Governors, filed May 1978, U.S.D.C. for the District of Columbia. Citicorp v. Board of Governors, filed March 1978, U.S.C.A. for the Second Circuit. Security Bancorp and Security National Bank v. Board of Governors, filed March 1978, U.S.C.A. for the Ninth Circuit. Michigan National Corporation v. Board of Governors, filed January 1978, U.S.C.A. for the Sixth Circuit. Wisconsin Bankers Association v. Board of Governors, filed January 1978, U.S.C.A. for the District of Columbia. Vickars-Henry Corp. v. Board of Governors, filed December 1977, U.S.C.A. for the Ninth Circuit. Emch v. The United States of America, et al., filed November 1977, for the Eastern District of Wisconsin. Central Bank v. Board of Governors, filed October 1977, U.S.C.A. for the District of Columbia. Investment Company Institute v. Board of Governors, filed September 1977, U.S.D.C. for the District of Columbia. BankAmerica Corporation v. Board of Governors, filed May 1977, U.S.D.C. for the Northern District of California. BankAmerica Corporation v. Board of Governors, filed May 1977, U.S.C.A. for the Ninth Circuit. Roberts Farms, Inc. v. Comptroller of the Currency, et al., filed November 1975, U.S.D.C. for the Southern District of California. Florida Association of Insurance Agents, Inc. v. Board of Governors, and National Association of Insurance Agents, Inc. v. Board of Governors, filed August 1975, actions consolidated in U.S.C.A. for the Fifth Circuit. David R. Merrill, et al., v. Federal Open Market Committee of the Federal Reserve System, filed May 1975, U.S.D.C. for the District of Columbia. Bankers Trust New York Corporation v. Board of Governors, filed May 1973, U.S.C.A. for the Second Circuit. 1 Financial and Business Statistics CONTENTS Domestic Financial Statistics WEEKLY A3 Monetary aggregates and interest rates A4 Factors affecting member bank reserves A5 Reserves and borrowings of member banks A6 Federal funds transactions of money market banks POLICY COMMERCIAL BANKS Assets and Liabilities of— A20 All reporting banks A21 Banks in New York City A22 Banks outside New York City A23 Balance sheet memoranda A24 Commercial and industrial loans A25 Gross demand deposits of individuals, partnerships, and corporations INSTRUMENTS A8 Federal Reserve Bank interest rates A9 Member bank reserve requirements A10 Maximum interest rates payable on time and savings deposits at federally insured institutions A l l Federal Reserve open market transactions FEDERAL REPORTING RESERVE BANKS FINANCIAL MARKETS A25 Commercial paper and bankers acceptances outstanding A26 Prime rate charged by banks on short-term business loans A26 Terms of lending at commercial banks All Interest rates in money and capital markets A28 Stock market—Selected statistics A12 Condition and F.R. note statements A13 Maturity distribution of loan and security holdings A29 Savings institutions—Selected assets and liabilities MONETARY FEDERAL AND CREDIT AGGREGATES A13 Bank debits and deposit turnover A14 Money stock measures and components A15 Aggregate reserves and deposits of member banks A15 Loans and investments of all commercial banks COMMERCIAL BANK ASSETS AND LIABILITIES A16 Last-Wednesday-of-month series A17 Call-date series A18 Detailed balance sheet, June 30, 1978 FINANCE A30 Federal fiscal and financing operations A31 U.S. budget receipts and outlays A32 Federal debt subject to statutory limitation A32 Gross public debt of U.S. Treasury— Types and ownership A33 U.S. government marketable securities—Ownership, by maturity A34 U.S. government securities dealersTransactions, positions, and financing A35 Federal and federally sponsored credit agencies—Debt outstanding A2 Federal Reserve Bulletin • February 1979 SECURITIES MARKETS CORPORATE International AND FINANCE A 3 6 N e w security i s s u e s — S t a t e and local governments and corporations A 3 7 Open-end investment c o m p a n i e s — N e t sales and asset position A 3 7 Corporate profits and their distribution A 3 8 Nonfinancial c o r p o r a t i o n s — A s s e t s and liabilities A 3 8 Business expenditures on new plant and equipment A 3 9 D o m e s t i c finance c o m p a n i e s — A s s e t s and liabilities; business credit REAL ESTATE A 4 0 Mortgage markets A 4 1 Mortgage debt outstanding Statistics A 5 4 U . S . international transactions— Summary A 5 5 U . S . foreign trade A 5 5 U . S . reserve assets A 5 6 Foreign branches of U . S . b a n k s — Balance sheet data A 5 8 Selected U . S . liabilities to foreign official institutions REPORTED BY BANKS IN THE UNITED STATES A 5 9 Liabilities to foreigners A 6 1 Banks' o w n claims on foreigners A 6 2 Banks' o w n and d o m e s t i c customers claims on foreigners A 6 3 Banks' o w n claims on unaffiliated foreigners A 6 3 Liabilities to and claims on foreigners CONSUMER INSTALLMENT CREDIT SECURITIES A 4 2 Total outstanding and net change A 4 3 Extensions and liquidations FLOW OF FUNDS A 4 4 Funds raised in U . S . credit markets A 4 5 Direct and indirect sources of funds to credit markets Nonfinancial Statistics A 4 6 Nonfinancial business activity— Selected measures A 4 6 Output, capacity, and capacity utilization A 4 7 Labor force, e m p l o y m e n t , and unemployment A 4 8 Industrial p r o d u c t i o n — I n d e x e s and gross value A 5 0 Housing and construction A 5 1 Consumer and w h o l e s a l e prices A 5 2 Gross national product and income A 5 3 Personal i n c o m e and saving AND TRANSACTIONS A 6 4 Marketable U . S . Treasury bonds and n o t e s — F o r e i g n holdings and transactions A 6 4 Foreign official assets held at F . R . Banks A 6 5 Foreign transactions in securities REPORTED Domestic HOLDINGS BY NONBANKING THE UNITED CONCERNS IN STATES A 6 6 Short-term liabilities to and claims on foreigners A 6 7 Long-term liabilities to and c l a i m s on foreigners INTEREST AND EXCHANGE RATES A 6 8 Discount rates of foreign central banks A 6 8 Foreign short-term interest rates A69 Guide to Tabular Presentation and Statistical Releases Domestic Financial Statistics 1.10 A3 MONETARY AGGREGATES A N D INTEREST RATES 1978 1978 Item Ql Q2 Q4 Q3 Aug. Sept. Oct. Nov. Dec. Monetary and credit aggregates (annual rates of change, seasonally adjusted in per cent) 12 1 2 3 Member bank reserves Total Required Nonborrowed 4 5 6 7 Concepts of money1 M-l M-1 + M-2 M-3 8 9 10 11 Time and savings deposits Commercial banks: Total Savings Other time Thrift institutions 2 12 Total loans and investments at commercial banks 3 8.9 8.8 14.5 6.2 6.7 0.6 8.6 8.6 6.6 3.1 2.8 5.4 -5.0 -4.2 0.2 8.6 8.0 11.3 5.4 6.1 -0.9 -3.5 -5.3 13.5 6.1 6.1 1.3 6.6 5.0 7.0 8.1 9.2 7.2 8.4 8.4 8.1 6.0 9.9 10.4 4.4 2.5 7.7 9.4 8.5 7.2 11.6 11.5 13.8 12.1 13.0 13.4 1.7 0.8 6.5 8.9 -2.0 -4.9 4.7 6.7 1.7 -1.4 2.7 5.6 12.5 2.0 11.7 9.7 11.5 3.8 11.4 8.5 11.3 2.3 18.5 11.1 12.4 -0.9 19.2 11.7 10.9 4.8 21.2 11.3 12.7 9.7 14.8 14.0 8.5 -1.6 19.3 12.0 21.9 -9.6 24.5 9.8 5. J -7.5 12.0 9.7 10.1 14.9 10.8 7.7 5.1 9.7 9.8 6.7 1.1 1978 Ql Q2 1978 Q3 Q4 Sept. Oct. 1979 Nov. Dec. Jan. Interest rates (levels, per cent per annum) 13 14 15 16 Short-term rates 4 Federal funds Federal Reserve discount 5 Treasury bills (3-month market yield) 6 Commercial paper (90- to 119-day)6-7 6.76 6.46 6.39 6.76 7.28 6.78 6.48 7.16 8.09 7.50 7.31 8.03 9.58 9.09 8.57 9.83 8.45 7.83 7.85 8.39 8.96 8.26 7.99 8.98 9.76 9.50 8.64 10.14 10.03 9.50 9.08 10.37 10.07 9.50 9.35 10.25 17 18 19 Long-term rates Bonds: U.S. government8 State and local government^ Aaa utility (new issue)1® 8.19 5.65 8.70 8.43 6.02 8.98 8.53 6.16 8.94 8.78 6.28 9.23 8.47 6.09 8.86 8.69 6.13 9.17 8.75 6.19 9.27 8.90 6.51 9.28 8.98 6.47 9.54 9.23 9.58 9.80 10.12 9.80 9.95 10.10 '10.30 10.30 20 Conventional mortgages11 1 M-l equals currency plus private demand deposits adjusted. M-l + equals M-l plus savings deposits at commercial banks, NOW accounts at banks and thrift institutions, credit union share draft accounts, and demand deposits at mutual savings banks. M-2 equals M-l plus bank time and savings deposits other than large negotiable certificates of deposit (CDs). M-3 equals M-2 plus deposits at mutual savings banks, savings and loan associations, and credit union shares. 2 Savings and loan associations, mutual savings banks, and credit unions. 3 Quarterly changes calculated from figures shown in table 1.23. 4 Seven-day averages of daily effective rates (average of the rates on a given date weighted by the volume of transactions at those rates). 5 Rate for the Federal Reserve Bank of New York. 6 7 r Quoted on a bank-discount basis. Beginning Nov. 1977, unweighted average of offering rates quoted by five8 dealers. Previously, most representative rate quoted by these dealers. Market yields adjusted to a 20-year maturity by the U.S. Treasury. 9 Bond Buyer series for 20 issues of mixed quality. I o Weighted averages of new publicly offered bonds rated Aaa, Aa, and A by Moody's Investors Service and adjusted to an Aaa basis. Federal Reserve compilations. II Average rates on new commitments for conventional first mortgages on new homes in primary markets, unweighted and rounded to nearest 5 basis points, from Dept. of Housing and Urban Development. 12 Unless otherwise noted, rates of change are calculated from average amounts outstanding in preceding month or quarter. A4 DomesticNonfinancialStatistics • February 1979 1.11 FACTORS AFFECTING MEMBER BANK RESERVES Millions of dollars Monthly averages of daily figures Weekly averages of daily figures for weeks ending— Factors 1978 Nov. 1979 1978 1979 Dec. Jan.P Dec. 20 Dec. 27 Jan. 3 Jan. 10 Jan. 17 Jan. 24f Jan. 3If SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding.... 129,544 U.S. government securities1 Bought outright Held under repurchase agreement Federal agency securities Bought outright Held under repurchase agreement 2 3 4 5 6 7 8 9 10 11 Acceptances Loans Float Other Federal Reserve a s s e t s . . . . 12 Gold stock 13 Special Drawing Rights certificate account 14 Treasury currency outstanding 129,330 128,805 129,644 131,307 132,678 128,914 129,659 127,746 126,657 111,243 110,728 109,255 108,780 105,287 105,151 109,902 109,798 107,835 107,375 110,306 109,032 104,737 104,737 107,131 107,131 104,725 104,725 102,629 102,629 515 8,109 7,928 475 8,089 7,897 136 7,905 7,878 104 7,942 7,896 460 8,212 7,896 1,274 8,225 7,895 7,892 7,892 7,892 7,892 7,889 7,889 7,832 7,832 181 192 27 46 316 330 180 722 6,588 2,702 167 874 7,423 3,522 56 994 9,938 4,625 6 568 7,322 3,904 110 1,413 9,264 4,473 574 1,183 7,917 4,472 686 11,088 4,512 896 9,354 4,386 924 9,859 4,349 1,427 9,471 5.299 11,645 11,635 11,625 11,611 11,628 11,671 11,660 11,609 11,608 11,603 1,300 11,779 1,300 11,826 1,300 11,867 1,300 11,822 1,300 11,844 1,300 11,838 1,300 11,850 1,300 11,864 1,300 11,875 1.300 11,888 110,929 278 113,395 260 112,341 250 113,329 261 114,377 245 114,720 242 113,761 246 112,599 247 111,437 249 110,552 261 8,186 289 540 3,931 301 724 3,379 288 826 3,748 292 666 4,952 320 620 3,882 334 1,204 3,116 341 710 3,302 277 786 3,420 269 858 3,477 256 789 ABSORBING RESERVE FUNDS 15 Currency in circulation 16 Treasury cash holdings Deposits, other than member bank reserves with F.R. Banks: 17 Treasury 18 Foreign 19 Other2 20 21 Other F.R. liabilities and capital Member bank reserves with F.R. Banks 4,193 4,322 4,522 4,367 4,548 4,343 4,417 4,490 4,593 4,658 29,853 31,158 31,991 31,715 31,018 32,765 31,133 32,731 31,703 31,456 End-of-month figures 1979 1978 Wednesday figures 1979 1978 Nov. Dec. Jan.f Dec. 20 Dec. 27 Jan. 3 Jan. 10 Jan. 17 Jan. 24p Jan. 31f SUPPLYING RESERVE FUNDS 131,605 131,327 126,053 130,778 137,791 131,905 126,066 132,291 128,477 126,053 23 24 25 U.S. government securities1 Bought outright Held under repurchase agree- 113,305 113,305 110,562 109,478 101,279 101,279 107,104 107,104 111,639 109,583 106,896 106,755 102,833 102,833 102,373 102,373 105,724 105,724 101,279 101,279 26 27 28 Federal agency securities Bought outright Held under repurchase agree- 7,899 7,899 1,084 8,029 7,896 7,507 7,507 7,896 7,896 2,056 9,165 7,896 141 7,901 7,892 7,892 7,892 7,892 7,892 7,886 1,886 7,507 7,507 133 1,269 9 29 30 31 32 Acceptances Loans Float Other Federal Reserve a s s e t s . . . . 813 7,238 2,350 587 1,174 6,432 4,543 4,364 7,227 5,676 504 10,932 4,342 444 3,110 8,812 4,621 303 615 11,775 4,415 759 10,318 4,264 2,043 15,305 4,678 1,081 9,392 4,394 4,364 7,227 5,676 11,642 11,671 11,592 11,611 11,671 11,671 11,624 11,608 11,608 11,592 1,300 11,790 1,300 11,831 1,300 11,909 1,300 11,822 1,300 11,846 1,300 11,847 1,300 11,854 1,300 11,870 1,300 11,882 1,300 11,909 112,072 267 114,645 240 110,683 264 114,075 250 115,227 241 114,786 245 113,478 249 112,294 244 111,158 249 110,683 264 6,587 379 567 4,196 368 1,256 3,522 339 874 4,500 275 582 3,540 285 613 3,578 270 754 2,286 234 653 3,061 316 712 3,432 291 853 3,522 339 874 4,545 4,275 4,594 4,499 4,704 4,169 4,345 4,542 4,596 4,594 30,578 31,329 37,999 32,921 29,600 35,900 32,688 30,578 22 Reserve bank credit outstanding.... 33 34 Gold stock Special Drawing Rights certificate account 35 Treasury currency outstanding ABSORBING RESERVE FUNDS 36 Currency in circulation 37 Treasury cash holdings Deposits, other than member bank reserves with F.R. Banks: 38 Treasury 39 Foreign 40 Other2 41 42 Other F.R. liabilities and capital. .. Member bank reserves with F.R. Banks 1 31,919 31,152 Includes securities loaned—fully guaranteed by U.S. govt, securities pledged with F.R. Banks—and excludes (if any) securities sold and scheduled to be bought back under matched sale-purchase transactions. 2 Includes certain deposits of foreign-owned banking institutions voluntarily held with member banks and redeposited in full with Federal Reserve Banks. NOTE. For amounts of currency and coin held as reserves, see Table 1.12. Member Banks 1.12 RESERVES A N D BORROWINGS A5 Member Banks Millions of dollars Monthly averages of daily figures Reserve classification 1979 1978 1977 Dec. May June July Aug. Sept. Oct. Nov. Dec. Jan.? All member banks Reserves: At F.R. Banks Currency and coin Total held i Required Excess1 Borrowings at F.R. Banks: 2 6 Total 7 Seasonal 27,057 9,351 36,471 36,297 174 27,890 9,151 37,119 36,867 252 27,840 9,345 37,262 37,125 137 28,570 9,542 38,189 38,049 140 28,079 9,512 37,666 37,404 262 28,010 9,605 37,689 37,614 75 28,701 9,654 38,434 38,222 212 29,853 9,794 39,728 39,423 305 31,158 10,330 41,572 41,447 125 31,991 11,099 43,221 42,873 348 558 54 1,227 93 1,111 120 1,286 143 1,147 188 1,068 191 1,261 221 722 185 874 134 994 106 8 9 10 11 Large banks in New York City Reserves held Required Excess Borrowings2 6,244 6,279 -35 48 6,315 6,236 79 113 6,341 6,376 -35 54 6,606 6,581 25 129 6,334 6,290 44 58 6,182 6,251 -69 78 6,428 6,349 79 157 6,682 6,658 24 48 7,120 7,243 -123 99 7,677 7,690 -13 117 12 13 14 15 Large banks in Chicago Reserves held Required Excess Borrowings2 1,593 1,613 -20 26 1,697 1,669 28 19 1,668 1,670 -2 20 1,708 1,707 20 1,648 1,646 2 3 1,655 1,650 5 35 1,672 1,649 23 14 1,791 1,765 26 4 1,907 1,900 7 10 1,986 2,010 -24 22 16 17 18 19 Other large banks Reserves held Required Excess Borrowings2 13,993 13,931 62 243 14,106 14,079 27 500 14,250 14,225 25 536 14,553 14,569 -16 499 14,502 14,423 79 417 14,564 14,541 23 363 14,862 14,867 -5 408 15,547 15,447 100 194 16,446 16,342 104 276 16,873 16,930 -57 269 20 21 22 23 All other banks Reserves held Required Excess Borrowings2 14,641 14,474 167 241 15,001 14,883 118 595 15,003 14,854 149 501 15,322 15,192 130 638 15,182 15,045 137 669 15,288 15,172 116 592 15,472 15,357 115 682 15,708 15,553 155 476 16,099 15,962 137 489 16,253 16,243 10 586 1 2 3 4 5 Weekly averages of daily figures for weeks ending1979 1978 Nov. 29 Dec. 6 Dec. 13 Dec. 20 Dec. 27 Jan. 3 Jan. 10 Jan. 17 Jan. 24f Jan. 31f All member banks Reserves: At F.R. Banks Currency 1and coin Total held Required Excess1 Borrowings at F.R. Banks: 2 29 Total 30 Seasonal 31,416 9,785 41,283 41,130 153 31,328 10,056 41,465 41,138 327 30,139 10,843 41,063 40,911 152 31,715 10,006 41,802 41,565 237 31,018 10,258 41,357 41,412 -55 32,765 10,538 43,420 42,694 726 31,133 10,450 41,722 41,844 -122 32,731 11,991 44,860 44,456 404 31,703 11,169 42,996 42,991 5 31,456 11,025 42,608 42,278 330 792 180 698 150 591 131 568 131 1,413 131 1,183 119 686 93 896 98 924 105 1,427 114 31 32 33 34 Large banks in New York City Reserves held Required Excess Borrowings2 6,968 6,980 -12 31 7,300 7,236 64 7,122 7,130 -8 7,391 7,300 91 6,871 7,025 -154 330 7,933 7,734 199 143 7,204 7,360 -156 8,472 8,379 93 169 7,451 7,658 -207 14 7,292 7,345 -53 299 35 36 37 38 Large banks in Chicago Reserves held Required Excess Borrowings2 1,886 1,881 5 6 1,891 1,913 -22 1,862 1,867 -5 10 1,945 1,950 -5 6 1,883 1,849 34 29 1,964 1,944 20 9 1,959 1,955 4 3 2,261 2,224 37 1,845 1,941 -96 3 1,903 1,950 -47 90 39 40 41 42 Other large banks Reserves held Required Excess Borrowings2 16,323 16,255 68 236 16,206 16,093 113 176 16,174 16,133 41 193 16,383 16,377 6 106 16,391 16,439 -48 488 17,120 16,846 274 470 16,459 16,519 -60 241 17,545 17,488 57 234 17,054 17,001 53 199 16,722 16,748 -26 339 43 44 45 46 All other banks Reserves held Required Excess Borrowings2 16,106 16,014 92 519 16,068 15,896 172 522 15,905 15,781 124 388 16,083 15,938 145 456 16,212 16,099 113 566 16,403 16,170 233 561 16,100 16,010 90 442 16,582 16,365 217 493 16,257 16,391 -134 708 16,353 16,235 118 699 24 25 26 27 28 i Adjusted to include waivers of penalties for reserve deficiencies in accordance with board policy, effective Nov. 19, 1975, of permitting transitional relief on a graduated basis over a 24-month period when a nonmember bank merges into an existing member bank, or when a nonmember bank joins the Federal Reserve System. For weeks for which figures are preliminary, figures by class of bank do not add to total because adjusted data by class are not available, 2 Based on closing figures. A6 1.13 Domestic Financial Statistics • February 1979 FEDERAL F U N D S TRANSACTIONS Money Market Banks Millions of dollars, except as noted 1978, week ending— Type Dec. 6 Dec. 13 Dec. 20 1979, week ending— Dec. 27 Jan. 3 Jan. 10 Jan. 17 Jan. 24 Jan. 31 Total, 46 banks 1 2 3 Basic reserve position Excess reserves1 169 127 166 -40 331 -36 65 -11 46 62 81 1 590 226 79 211 42 439 15,823 17,468 15,421 15,136 14,813 17,623 17,052 15,248 12,928 -15,716 -17,422 -15,256 -15,765 -14,708 -17,737 -17,199 -15,301 -13,321 87.7 97.7 83.7 88.1 77.8 96.7 85.2 81.4 72.6 23,567 1,1 AA 5,965 23,265 5,797 4,952 23,624 8,203 6,135 22,886 7,750 5,854 23,480 8,667 6,329 24,357 6,734 5,421 23,953 6,901 5,471 22,400 7,152 5,315 20,855 7,927 6,370 17,602 1,778 18,313 845 17,489 2,068 17,032 1,896 17,151 2,339 18,936 1,313 18,482 1,429 17,085 1,836 14,485 1,558 3,833 1,831 2,002 5,153 1,590 3,564 3,857 1,226 2,631 4,606 1,865 2,740 3,062 1,679 1,382 5,101 1,232 3,869 3,114 1,146 1,968 3,988 1,414 2,573 4,697 1,336 3,361 -21 LESS: Borrowings at F.R. Banks Net interbank federal funds transactions EQUALS: Net surplus, or 4 5 deficit ( - ) : Amount Percent of average required reserves 9 10 Interbank federal funds transactions Gross transactions: Purchases Sales Two-way transactions2 Net transactions: Purchases of net buying banks.. . Sales of net selling banks 11 12 13 Related transactions with U.S. government securities dealers Loans to dealers3 Borrowing from dealers4 Net loans 6 7 8 8 banks in New York City 14 Basic reserve position Excess reserves1 48 37 128 -61 169 312 143 -37 47 -9 162 14 272 LESS: 15 16 Borrowings at F.R. Banks Net interbank federal funds transactions 2,529 4,136 2,816 3,134 4,214 4,145 4,226 2,480 2,050 -2,481 -4,099 -2,688 -3,507 -4,188 -4,182 -4,341 -2,503 -2,344 37.8 63.4 40.6 55.1 59.5 62.6 57.0 36.2 35.4 4,281 1,752 1,182 4,894 758 758 4,940 2,124 1,500 4,658 1,523 1,379 5,299 1,085 1,085 5,078 933 933 5,227 1,001 1,001 4,142 1,663 1,224 3,674 1,623 1,449 3,099 570 4,136 3,440 624 3,278 144 4,214 4,145 4,226 2,919 439 2,225 175 2,114 659 1,455 2,970 609 2,361 2,382 450 1,932 3,066 420 2,646 1,896 382 1,514 3,206 399 2,807 1,790 394 1,396 2,366 426 1,940 2,987 377 2,610 EQUALS : Net surplus, or 17 18 deficit ( - ) : Amount Percent of average required reserves Interbank federal funds transactions Gross transactions: 19 Purchases 20 Sales 21 Two-way transactions2 Net transactions: 22 Purchases of net buying banks.. 23 Sales of net selling banks 24 25 26 . Related transactions with U.S. government securities dealers Loans to dealers3 Borrowing from dealers4 Net loans 38 banks outside New York City 27 Basic reserve position Excess reserves1 121 91 38 21 163 1 18 -2 67 62 81 1 278 83 79 50 27 166 13,294 13,332 12,605 12,002 10,600 13,478 12,826 12,769 10,878 -13,235 -13,323 -12,567 -12,258 -10,520 -13,555 -12,858 -12,798 -10,977 116.5 117.2 108.3 106.3 88.7 116.2 102.3 107.7 93.6 19,286 5,992 4,783 18,371 5,039 4,194 18,684 6,079 4,635 18,229 6,227 4,475 18,182 7,582 5,245 19,279 5,801 4,488 18,726 5,900 4,470 18,258 5,489 4,092 17,182 6,304 4,921 14,503 1,208 14,177 845 14,049 1,444 13,754 1,752 12,937 2,339 14,791 1,313 14,256 1,429 14,166 1,397 12,260 1,383 1,718 1,172 547 2,183 981 1,202 1,475 lie 699 1,540 1,446 94 1,166 1,297 -131 1,895 833 1,062 1,324 752 572 1,622 989 633 1,710 959 751 LESS: 28 29 Borrowings at F.R. Banks Net interbank federal funds transactions EQUALS : Net surplus, or 30 31 deficit ( - ) : Amount Percent of average required reserves 35 36 Interbank federal funds transactions Gross transactions: Purchases Sales Two-way transactions2 Net transactions : Purchases of net buying banks... Sales of net selling banks 37 38 39 Related transactions with U.S. government securities dealers Loans to dealers3 Borrowing from dealers4 Net loans 32 33 34 For notes see end of table. Federal Funds 1.13 A7 Continued 1978, week ending— Type Dec. 6 Dec. 13 Dec. 20 1979, week ending— Dec. 27 Jan. 3 Jan. 10 Jan. 17 Jan. 24 Jan. 31 5 banks in City of Chicago 40 Basic reserve position Excess reserves1 19 15 -19 LESS: 41 42 Net interbank federal funds transactions 23 37 17 45 22 29 17 80 5,424 5,930 6,477 6,025 5,379 6,131 5,880 5,207 4,597 -5,405 -5,915 -6,497 -6,030 -5,341 -6,114 -5,835 -5,184 -4,661 304.1 341.6 355.2 348.9 293.3 333.9 278.1 284.9 255.1 7,030 1,606 1,606 7,082 1,153 1,153 7,704 1,226 1,189 7,183 1,158 1,101 6,746 1,368 1,290 7,309 1,179 1,136 7,168 1,288 1,218 6,708 1,501 1,428 6,123 1,525 1,505 5,424 5,930 6,515 38 6,083 58 5,456 77 6,173 42 5,950 69 5,280 73 4,618 20 216 354 -139 215 276 -60 300 160 140 259 417 -158 179 298 -119 266 4 262 213 58 155 179 9 171. 209 125 84 EQUALS: Net surplus, or 43 44 45 46 47 48 49 deficit ( - ) : Amount Percent of average required reserves Interbank federal funds transactions Gross transactions: Purchases Sales Two-way transactions2 Net transactions: Purchases of net buying banks... Sales of net selling banks Related transactions with U.S. government securities dealers Loans to dealers3 Borrowing from dealers4 52 Net loans 50 51 33 other banks 53 Basic reserve position Excess reserves1 LESS: 54 55 Borrowings at F.R. Banks Net interbank federal funds transactions 102 76 58 -2 126 -16 -27 -25 62 81 1 249 83 79 50 27 86 7,871 7,403 6,128 5,977 5,221 7,347 6,946 7,562 6,280 -7,830 -7,408 -6,071 -6,228 -5,178 -7,441 -7,023 -7,614 -6,316 81.7 76.9 62.1 63.5 51.6 75.7 67.0 75.7 63.8 12,256 4,385 3,177 11,289 3,886 3,041 10,981 4,853 3,446 11,045 5,068 3,374 11,436 6,215 3,954 11,970 4,623 3,352 11,558 4,612 3,252 11,550 3,987 2,663 11,059 A,119 3,417 9,079 1,208 8,248 845 7,534 1,406 7,671 1,694 7,482 2,262 8,618 1,271 8,306 1,360 8,886 1,324 7,642 1,362 1,503 818 685 1,968 705 1,263 1,175 616 559 1,281 1,029 252 987 999 -12 1,629 829 800 1,110 1,442 980 462 1,501 51 EQUALS: Net surplus, or 56 57 deficit ( - ) : Amount Percent of average required reserves 61 62 Interbank federal funds transactions Gross transactions: Purchases Sales Two-way transactions2 Net transactions: Purchases of net buying banks... Sales of net selling banks 63 64 65 Related transactions with U.S. government securities dealers Loans to dealers3 Borrowing from dealers4 Net loans 58 59 60 1 Based on reserve balances, including adjustments to include waivers of penalities for reserve deficiencies in accordance with changes in policy of 2the Board of Governors effective Nov. 19, 1975. Derived from averages for individual banks for entire week. Figure for each bank indicates extent to which the bank's average purchases and3 sales are offsetting. Federal funds loaned, net funds supplied to each dealer by clearing banks, repurchase agreements (purchases from dealers subject to resale), or other lending arrangements. 694 417 834 667 4 Federal funds borrowed, net funds acquired from each dealer by clearing banks, reverse repurchase agreements (sales of securities to dealers subject to repurchase), resale agreements, and borrowings secured by U.S. govt, or other securities. NOTE. Weekly averages of daily figures. For description of series, see August 1964 BULLETIN, pp. 944-53. Back data for 46 banks appear in the board's Annual Statistical Digest, 1971-1975, table 3. A8 1.14 Domestic Financial Statistics • February 1979 FEDERAL RESERVE BANK INTEREST RATES Per cent per annum Current and previous levels Loans to member banks Loans to all others under sec. 13, last par.4 Under sec. 10(b)2 Under sees. 13 and 13a1 Federal Reserve Bank Regular rate Rate on 1/31/79 Effective date Previous rate 91/2 91/2 91/2 91/2 91/2 91/2 91/2 91/2 91/2 91/2 91/2 91/2 11/2/78 11/1/78 11/2/78 11/2/78 11/2/78 11/3/78 11/2/78 11/2/78 11/1/78 11/2/78 11/2/78 11/2/78 81/2 81/2 81/2 81/2 81/2 81/2 81/2 81/2 81/2 81/2 81/2 81/2 Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco.... Rate on 1/31/79 10 10 10 10 10 10 10 10 10 10 10 10 Special rate 3 Effective date Previous rate 11/2/78 11/1/78 11/2/78 11/2/78 11/2/78 11/3/78 11/2/78 11/2/78 11/1/78 11/2/78 11/2/78 11/2/78 9 9 9 9 9 9 9 9 9 9 9 9 Rate on 1/31/79 Effective date Previous rate Rate on 1/31/79 Effective date 11/2/78 11/1/78 11/2/78 11/2/78 11/2/78 11/3/78 11/2/78 11/2/78 11/1/78 11/2/78 11/2/78 11/2/78 91/2 91/2 91/2 9% 9% 91/2 9% 91/2 9% 9% 91/2 91/2 12% 121/2 12% 121/2 121/2 121/2 121/2 12% 121/2 12% 12% 121/2 11/2/78 11/1/78 11/2/78 11/2/78 11/2/78 11/3/78 11/2/78 11/2/78 11/1/78 11/2/78 11/2/78 11/2/78 11% 11% 11% 11% 11% 11% 11% 11% 11% 11% 11% 11% Range (or level)— All F.R. Banks F.R. Bank of N.Y. 1976—Jan. 19 23 Nov. 22 26 5%-6 5% 51/4-5% 51/4 5% 5% 51/4 514 1977—Aug. 30 31 Sept. 2 Oct. 26 514-534 51/4-534 534 6 514 534 534 6 9 20 May 11 12 July 3 10 Aug. 21 Sept. 22 Oct. 16 20 Nov. 1 3 6-6% 6% 6%-7 7 7-71/4 71/4 73/4 8 8-8% 8% 8%-9% 9% 6% 6% 7 7 71/4 71/4 734 8 8% 8% 9% 9% In effect Jan 31, 1979 9% 9% IOI/2 IO1/2 IO1/2 IO1/2 IO1/2 IOI/2 IO1/2 IOI/2 IO1/2 IO1/2 IO1/2 IOI/2 Previous rate Range of rates in recent years5 Effective date In effect Dec. 31, 1970 1971—Jan. Feb. July Nov Dec. 8 15 19 22 29 13 19 16 23 11 19 13 17 24 1973—Jan. 15 Feb. 26 Mar. 2 Apr. 23 Range (or level)All F.R. Banks F.R. Bank of N.Y. 51/2 5V4-5V2 51/4 5V4 5% 5-5% 5% 5-5% 5 5% 5 4%-5 534 6 6 6% 5 5 7% 5 5 5 1974—Apr. 25, 30, Dec. 9, 71/2-8 8 734-8 734 714-734 714-734 71/4 634-7% 634 614-634 614 734 734 734 714 71/4 63/4 634 614 614 4V4 43/4 4% 4V2 5 5% 5% 51/2 16, 1975—Jan. 6 10, 24, Feb. 5, 7, Mar. 10 14 May 16 23 1 Discounts of eligible paper and advances secured by such paper or by U.S. government obligations or any other obligations eligible for Federal Reserve Bank purchase. 2 Advances secured to the satisfaction of the Federal Reserve Bank. Advances secured by mortgages on 1- to 4-family residential property are made at the section 13 rate. 3 Applicable to special advances described in section 201.2(e)(2) of Regulation A. 534 534-6 61/2 7 71/2 71/2 4*4-5 4 y4 41/2-434 41/2-4% 41/2 5-51/2 5% 5^-534 4. 11. 18. F.R. Bank of N.Y. 6-6i/ 2 43/4 5 1973—May Range (or level)— All F.R. Banks June 11. 15. July 2, Aug. 14. 23, 4V4 4 y4-5 5 Effective date 61/2 7 7-71/2 6-61/4 6 6 6 Effective date 1978—Jan. 4 Advances to individuals, partnerships, or corporations other than member banks secured by direct obligations of, or obligations fully guaranteed as to principal and interest by, the U.S. government or any agency thereof. 5 Rates under sees. 13 and 13a (as described above). For description and earlier data, see the following publications of the Board of Governors: Banking and Monetary Statistics, 1914-1941, Banking and Monetary Statistics, 1941-1970, Annual Statistical Digest, 1971-75, 1972-76, and 1973-77. Policy Instruments 1.15 A9 MEMBER BANK RESERVE REQUIREMENTS 1 Percent of deposits Requirements in effect January 31, 1979 Type of deposit, and deposit interval in millions of dollars Previous requirements Percent Effective date Percent Effective date Net demand: 2 0-2 7 10-100 100-400 Over 400 ny4 1234 161/4 12/30/76 12/30/76 12/30/76 12/30/76 12/30/76 m 10 12 13 16% 2/13/75 2/13/75 2/13/75 2/13/75 2/13/75 3 3/16/67 m 3/2/67 3/16/67 1/8/76 10/30/75 3ft 3 3 3/2/67 3/16/67 3/16/67 12/12/74 1/8/76 10/30/75 5 3 3 10/1/70 12/12/74 12/12/74 Time: 2 -3.4 Savings Other time:5 0-5, maturing in— 30-179 days 180 days to 4 years 4 years or more Over 5, maturing in— 30-179 days 180 days to 4 years 3 2 1 ft 6 2ft 1 Legal limits Net demand: Reserve city banks Other banks Time Borrowings from foreign banks 1 For changes in reserve requirements beginning 1963, see board's Annual Statistical Digest, 1971-1975 and for prior changes, see board's Annual Report for 1976, Table 13. 2 (a) Requirement schedules are graduated, and each deposit interval applies to that part of the deposits of each bank. Demand deposits subject to reserve requirements are gross demand deposits minus cash items in process of collection and demand balances due from domestic banks. (b) The Federal Reserve Act specifies different ranges of requirements for reserve city banks and for other banks. Reserve cities are designated under a criterion adopted effective Nov. 9, 1972, by which a bank having net demand deposits of more than $400 million is considered to have the character of business of a reserve city bank. The presence of the head office of such a bank constitutes designation of that place as a reserve city. Cities in which there are Federal Reserve Banks or branches are also reserve cities. Any banks having net demand deposits of $400 million or less are considered to have the character of business of banks outside of reserve cities and are permitted to maintain reserves at ratios set for banks not in reserve cities. For details, see the board's Regulation D. (c) Effective August 24, 1978, the Regulation M reserve requirements on net balances due from domestic banks to their foreign branches and on deposits that foreign branches lend to U.S. residents were reduced to zero from 4 percent and 1 percent, respectively. The Regulation D reserve requirement on borrowings from unrelated banks abroad was also reduced to zero from 4 percent. (d) Effective with the reserve computation period beginning Nov. 16, 1978, domestic deposits of Edge Corporations are subject to the same reserve requirements as deposits of member banks. 3 Negotiable order of withdrawal (NOW) accounts and time deposits such as Christmas and vacation club accounts are subject to the same requirements as savings deposits. 4 The average reserve requirement on savings and other time deposits must be at least 3 percent, the minimum specified by law. 5 Effective November 2, 1978, a supplementary reserve requirement of 2 percent was imposed on time deposits of $100,000 or more, obligations of affiliates, and ineligible acceptances. NOTE. Required reserves must be held in the form of deposits with Federal Reserve Banks or vault cash. A10 1.16 DomesticNonfinancialStatistics • February 1979 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions Percent per annum Commercial banks Type and maturity of deposit In effect Jan. 31, 1979 Percent 1 Savings 2 Negotiable 1order of withdrawal accounts 3 Money market time deposits of less than $100,0002 5 5 9 ( ) Other time (multiple- and singlematurity unless otherwise indicated) 3 30-89 days: 4 Multiple-maturity 5 Single-maturity 90 days to 1 year: Multiple-maturity Single-maturity 6 7 4 8 9 10 1 to 2 vears 2 to 2i/2 years4 i y 2 to 4 years4 11 12 13 4 to 6 years55 6 to 8 years 8 years or more5 14 Issued to governmental units (all maturities) Individual retirement accounts and Keogh (H.R. 10) plans6 15 5% Effective date 1/1/74 (10) ( ) 7/1/73 4% 7/1/73 61/2 7% 71/2 m 7/1/73 11/1/73 12/23/74 6/1/78 6/1/78 6/1/78 1094), and February 1968 (p. 167). A minimum of $1,000 is required for savings and loan associations, except in areas where mutual savings banks permit lower minimum denominations. This restriction was removed for deposits maturing in less than 1 year, effective Nov. 1, 1973. 5 $1,000 minimum except for deposits representing funds contributed to an Individual Retirement Account (IRA) or a Keogh (H.R. 10) Plan established pursuant to the Internal Revenue Code. The $1,000 minimum requirement was removed for such accounts in December 1975 and November 1976, respectively. 6 3-year minimum maturity. 7 July 1, 1973, for mutual savings banks; July 6, 1973, for savings and loan associations. 8 Oct. 1, 1966, for mutual savings banks; Jan. 21, 1970, for savings and loan associations. 9 Commercial banks, savings and loan associations, and mutual savings banks were authorized to offer money market time deposits effective June 1, 1978. The ceiling rate for commercial banks is the discount rate on most recently issued 6-month U.S. Treasury bills. The ceiling rate for savings and loan associations and mutual savings banks is V4 percent Effective date Percent 5*4 534 5Y4 ( n m 5 1/1/74 (10) ) (10) m 7 Va 9 ( ) (10) 5V4 6V2 63/4 11/1/73 71/2 73/4 9 (> (10) 4 1/21/70 1/21/70 1/21/70 ( ) ( ) 9 Effective date 8 5 ( ) 7/20/66 9/26/66 Percent (7) 9 1/21/70 9/26/66 5 Effective date Previous maximum 5V4 (9) 7/1/73 6 In effect Jan. 31, 1979 1/21/70 9 ( > FEDERAL RESERVE BULLETIN f o r O c t o b e r 1 9 6 2 (p. 1279), A u g u s t 1965 (p. Percent 41/2 1 For authorized states only. Federally insured commercial banks, savings and loan associations, cooperative banks, and mutual savings banks in Massachusetts and New Hampshire were first permitted to offer negotiable order of withdrawal (NOW) accounts on Jan. 1, 1974. Authorization to issue NOW accounts was extended to similar institutions throughout New England on Feb. 27, 1976, and in New York State on Nov. 10, 1978. 2 Must have a maturity of exactly 26 weeks and a minimum denomination of $10,000, and must be nonnegotiable. 3 For exceptions with respect to certain foreign time deposits see the 4 Previous maximum 7/1/73 9 Savings and loan associations and mutual savings banks (7) 5V4 1/21/70 (7) (7) s* 1/21/70 1/21/70 1/21/70 6 11/1/73 12/23/74 6/1/78 12/23/74 6/1/78 7/6/77 6/1/78 O1) 71/2 11/1/73 m m 12/23/74 (10) 7/6/77 higher than the rate for commercial banks. The most recent rates and effective dates are as follows: Dec. 28 Thrifts 9.580 9.830 Jan. 4 9.550 9.800 Jan. 11 9.443 9.693 Jan. 18 9.534 9.784 Jan. 25 9.475 9.725 1 0 11 No separate account category. Between July 1, 1973, and Oct. 31, 1973, there was no ceiling for certificates maturing in 4 years or more with minimum denominations of $1,000; however, the amount of such certificates thai an institution could issue was limited to 5 percent of its total time and savings deposits. Sales in excess of thatl amount, as well as certificates of less than $1,000, were limited to the 6 /z percent ceiling on time deposits maturing in 1 l /i years or more. Effective Nov. 1, 1973, ceilings were reimposed on certificates maturing in 4 years or more with minimum denominations of $1,000. There is no limitation on the amount of these certificates that banks can issue. NOTE. Maximum rates that can be paid by federally insured commercial banks, mutual savings banks, and savings and loan associations are established by the Board of Governors of the Federal Reserve System, the Board of Directors of the Federal Deposit Insurance Corporation, and the Federal Home Loan Bank Board under the provisions of 12 CFR 217, 329, and 526, respectively. The maximum rates on time deposits in denominations of $100,000 or more were suspended in mid1973. For information regarding previous interest rate ceilings on all types of accounts, see earlier issues of the FEDERAL RESERVE BULLETIN, the Federal Home Loan Bank Board Journal, and the Annual Report of the Federal Deposit Insurance Corporation. Policy Instruments 1.17 All FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1978 1976 Type of transaction 1977 1978 June Sept. Oct. Nov. Dec. 972 689 0 2,635 0 0 1,978 2,148 0 2,039 3,587 603 0 2,751 0 0 171 0 0 -241 - 1 , 5 4 4 0 0 168 0 563 0 73 0 -385 0 139 0 -778 0 0 0 705 0 Aug. July U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched salepurchase transactions) 1 2 3 Treasury bills: Gross purchases Gross sales Redemptions 4 5 6 7 Others within 1 year:1 Gross purchases Gross sales Exchange, or maturity shift Redemptions 8 9 10 1 to 5 years: Gross purchases Gross sales Exchange, or maturity shift 11 12 13 5 to 10 years: Gross purchases Gross sales Exchange, or maturity shift 1,048 0 1,572 14 15 16 Over 10 years: Gross purchases Gross sales Exchange, or maturity shift 17 18 19 All maturities:1 Gross purchases Gross sales Redemptions 14,343 8,462 5,017 16,628 13,725 2.033 4,395 0 0 1,184 3,017 0 0 4,499 - 5 , 1 7 0 2,500 0 135 0 -380 0 4,188 0 -178 631 0 467 0 0 241 424 0 -490 350 0 -563 507 0 385 628 0 -657 0 0 -705 758 0 584 1,526 0 2,803 176 0 -87 0 0 0 238 0 1,434 110 0 0 87 0 0 163 0 835 0 0 0 642 0 225 553 0 1,565 1,063 0 2,545 115 0 0 0 0 0 113 0 600 122 0 0 139 0 0 108 0 600 0 0 0 19,707 8,639 2 5,017 20,898 7,241 4,636 24,591 13,725 2,033 5,451 0 0 701 466 0 1,919 689 0 3,386 0 0 2,785 2,148 0 3,075 3,587 603 0 2,751 0 2 472 0 792 0 13,738 7,241 2,136 2 3,202 2,833 177 0 -2,588 -6,649 2 701 466 0 20 21 Matched sale-purchase transactions Gross sales Gross purchases 196,078 425,214 511,126 196,579 423,841 510,854 52,544 52,557 44,657 44,712 29,162 29,641 33,346 33,130 35,112 36,106 40,785 40,546 52,661 51,586 22 23 Repurchase agreements Gross purchases Gross sales 232,891 178,683 151,618 230,355 180,535 152,436 14,956 13,100 15,822 17,374 16,286 15,140 10,724 10,353 18,976 20,565 7,719 8,383 8,133 7,049 7,320 -1,261 2,854 3,540 43 - 2 , 0 1 7 -2,743 9,087 5,798 7,743 891 0 169 1,433 0 223 301 173 235 301 0 28 0 0 4 0 173 13 0 0 28 0 0 12 0 0 39 0 0 3 10,520 10,360 13,811 13,638 40,567 40,885 3,421 3,088 5,170 5,457 3,080 3,032 3,877 3,348 6,675 7,196 2,544 2,670 4,307 4,174 882 1,383 -426 606 -291 -138 501 -533 -165 130 31 Outrighttransactions.net 32 Repurchase agreements, net -545 410 -196 159 0 -366 0 747 0 -753 0 28 0 419 0 -479 0 -236 0 587 33 Net change in bankers acceptances -135 -37 -366 747 -753 28 419 -479 -236 587 34 Total net change in System Open Market Account 9,833 7,143 6,951 8,783 - 2 , 3 0 5 2,744 4,460 -969 -2,419 -2,026 24 Net change in U.S. government securities FEDERAL AGENCY OBLIGATIONS Outright transactions: Gross purchases Gross sales Redemptions Repurchase agreements: 28 Gross purchases 29 Gross sales 25 26 27 30 Net change in federal agency obligations BANKERS ACCEPTANCES 1 Both gross purchases and redemptions include special certificates created when the Treasury borrows directly from the Federal Reserve, as follows (millions of dollars): 1975, 3,549; 1976, none; Sept. 1977, 2,500. 2 In 1975, the system obtained $421 million of 2-year Treasury notes in exchange for maturing bills. In 1976 there was a similar transaction amounting to $189 million. Acquisition of these notes is treated as a purchase; the run-off of bills, as a redemption. NOTE. Sales, redemptions, and negative figures reduce holdings of the System Open Market Account; all otherfiguresincrease such holdings. Details may not add to totals because of rounding. A12 1.18 DomesticNonfinancialStatistics • February 1979 FEDERAL RESERVE BANKS Condition and F.R. Note Statements Millions of dollars End of month Wednesday 1979 Account Jan. 3 Jan. 10 1979 1978 Jan. 17 Jan. 24P Jan. 3If Nov. Dec. Jan.? Consolidated condition statement ASSETS 1 Gold certificate account 2 Special Drawing Rights certificate account 3 4 6 7 Loans: Member bank borrowings Other Acceptances: 1? 13 14 15 16 U.S. government securities Bought outright: Bills Other Total i 17 Total U.S. government securities 18 Total loans and securities 19 20 21 22 11,624 1,300 11,608 1,300 11,608 1,300 11,592 1,300 11,642 1,300 11,671 1,300 11,592 1,300 265 265 284 305 316 275 274 316 615 759 2,043 1,081 4,364 813 1,174 4,364 7,892 9 7,892 7,892 7,886 7,507 7,899 7,896 133 7,507 39,435 35,513 35,053 38,404 33,959 45,985 42,158 33,959 54,855 12,465 106,755 141 54,855 12,465 102,833 54,855 12,465 102,373 54,855 12,465 105,724 54,855 12,465 101,279 54,855 12,465 113,305 54,855 12,465 109,478 1,084 54,855 12,465 101,279 106,896 102,833 102,373 105,724 101,279 113,305 110,562 101,279 122,017 120,352 113,150 587 303 Federal agency obligations: 8 q 10 11,671 1,300 Cash items in process of collection Other assets: Denominated in foreign currencies2 All other 23 115,715 111,484 112,308 114,691 113,150 20,561 394 17,110 396 23,490 396 15,918 395 13,452 395 13,165 396 12,926 394 13,452 395 1,487 2,534 1,477 2,391 1,462 2,820 1,355 2,644 2,528 2,753 53 1,901 1,606 2,543 2,528 2,753 153,927 146,047 153,668 148,216 145,486 150,749 151,066 145,486 103,449 102,137 100,952 99,830 99,354 100,825 103,325 99,354 32,921 3,578 270 754 29,600 2,286 32,688 3,432 653 35,900 3,061 316 712 853 30,578 3,522 339 874 31,919 6,587 379 567 31,152 4,196 368 1,256 30,578 3,522 339 874 37,523 32,773 39,989 37,264 35,313 39,452 36,972 35,313 8,786 1,932 6,792 1,956 8,185 1,986 6,526 1,875 6,225 1,685 5,927 1,725 6,494 2,119 6,225 1,685 151,690 143,658 151,112 145,495 142,577 147,929 148,910 142,577 1,079 1,078 80 1,079 1,078 232 1,082 1,078 396 1,085 1,078 558 1,085 1,078 746 1,073 1,029 718 153,927 146,047 153,668 148,216 145,486 150,749 151,066 145,486 96,405 96,799 96,732 95,794 95,762 92,412 95,307 95,762 LIABILITIES 24 Federal Reserve notes Deposits: Member bank reserves 25 U.S. Treasury—General account 26 27 Other 28 29 30 Deferred availability cash items 31 Other liabilities and accrued dividends 32 Total liabilities 234 291 CAPITAL ACCOUNTS 33 34 35 Other capital accounts 36 Total liabilities and capital accounts 37 MEMO: Marketable U.S. govt, securities held in custody for foreign and intl. account 1,078 1,078 • 1,085 1,078 746 Federal Reserve note statement 38 39 40 41 42 F.R. notes outstanding (issued to Bank) Collateral held against notes outstanding: Gold certificate account Special Drawing Rights certificate account.... Eligible paper 43 112,878 113,078 113,493 113,806 113,618 112,445 112,836 113,618 11,671 1,300 536 99,371 11,624 1,300 672 99,482 11,608 1,300 1,568 99,017 11,608 1,300 924 99,974 11,592 1,300 2,726 98,000 11,642 1,300 692 98,811 11,671 1,300 907 98,958 11,592 1,300 2,726 98,000 112,878 113,078 113,493 113,806 113,618 112,445 112,836 113,618 1 Includes securities loaned—fully guaranteed by U.S. govt, securities pledged with Federal Reserve Banks—and excludes (if any) securities sold and scheduled to be bought back under matched sale-purchase transactions. 2 Beginning December 29, 1978, such assets are revalued monthly at market exchange rates, Reserve 1.19 FEDERAL RESERVE BANKS Banks A13 Maturity Distribution of Loan and Security Holdings Millions of dollars Wednesday Type and maturity 1979 Jan. 3 ! 2 3 4 Within 15 days 16 days to 90 days 6 7 8 Within 15 days 16 days to 90 days 91 days to 1 year End of month Jan. 10 617 585 32 91 Havs to 1 vear S Arrontanrcs 759 712 47 1978 Jan. 17 Jan. 24 2,047 2,023 24 Nov. 30 Jan. 31 812 767 45 4,364 4,334 30 1.081 i;o6i 20 1979 Dec. 31 1,172 1,142 30 Jan. 31 4,364 4,334 30 587 587 303 303 9 U.S. government securities 10 Within 15 days1 11 16 days to 90 days 12 91 days to 1 year 13 Over 1 year to 5 years 14 Over 5 years to 10 years 15 Over 10 years 106,896 3,323 18,033 28,358 31,790 14,717 10,675 102,833 4,129 12,605 28,916 31,791 14,717 10,675 102,373 2,311 14,717 28,162 31,791 14,717 10,675 105,724 2,914 18,325 27,302 31,791 14,717 10,675 101,279 3,961 14,369 25,980 31,577 14,717 10,675 113,305 4,467 20,315 31,523 31,608 14,717 10,675 110,562 4,297 19,800 29,465 31,608 14,717 10,675 101,279 3,961 14,369 25,980 31,577 14,717 10,675 16 Federal agency obligations 17 Within 15 days1 18 16 days to 90 days 19 91 days to 1 year 20 Over 1 year to 5 years 21 Over 5 years to 10 years 22 Over 10 years 7,901 9 507 1,388 3,676 1,511 810 7,892 56 451 1,388 3,676 1,511 810 7,892 73 434 1,388 3,676 1,511 810 7,886 17 494 1,369 3,685 1,511 810 7,507 16 507 1,188 3,475 1,511 810 7,899 135 438 1,292 3,686 1,488 860 8,029 217 482 1,286 3,723 1,511 810 7,507 16 507 1,188 3,475 1,511 810 1 Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements. 1.20 BANK DEBITS A N D DEPOSIT TURNOVER Debits are shown in billions of dollars, turnover as ratio of debits to deposit. Monthly data are at annual rates. Bank group, or type of customer 1975 1976 1978 1977 Aug. r Sept.' Debits to demand deposits 1 All commercial banks 2 Major New York City banks. . 3 Other banks 25,028.5 9,670.7 15,357.8 29,180.4 11,467.2 17,713.2 34,322.8 13,860.6 20,462.2 42,819.1 16.435.0 26.384.1 3 174.0 21.7 152.3 434.6 58.5 376.1 Nov. r Dec. (seasonally adjusted) 41,896.6 15,500.0 26,396.6 Debits to savings deposits 4 All customers 5 Business 1 6 Others 2 Oct.r 42,942.5 15,437.8 27,504.7 42.941.5 15.673.6 27,267.9 42,307.5 15.100.2 27.207.3 446.0 66.8 379.1 438.0 61.4 376.6 145.1 559.8 101.8 141.6 535.9 100.5 2.0 5.8 1.8 2.0 5.4 1.8 (not seasonally adjusted) 424.4 62.0 362.4 467.6 67.2 400.4 Demand deposit turnover 2 (seasonally adjusted) 7 All commercial banks 8 Major New York City banks.. 9 Other banks 105.3 356.9 72.9 116.8 411.6 79.8 129.2 503.0 85.9 146.5 577.6 100.0 Savings deposit turnover 10 All customers 11 Business 1 12 Others 1 Represents corporations and other profit-seeking organizations (excluding commercial banks but including savings and loan associations, mutual savings banks, credit unions, the Export-Import Bank, and federally sponsored lending agencies). 2 Represents accounts of individuals, partnerships, and corporations, and of states and political subdivisions. 3 Excludes negotiable order of withdrawal (NOW) accounts and special club accounts, such as Christmas and vacation clubs. 1.6 4.1 1.5 2.0 5.2 1.8 141.9 549.6 98.8 3 144.1 530.1 102.3 (not seasonally adjusted) 1.9 5.4 1.7 2.1 5.8 1.9 NOTE. Historical data—estimated for the period 1970 through June 1977, partly on the basis of the debits series for 233 SMS As, which were available through June 1977—are available from Publications Services, Division of Administrative Services, Board of Governors of the Federal Reserve System, Washington, D.D. 20551. Debits and turnover data for savings deposits are not available prior to July 1977. A14 1.21 DomesticNonfinancialStatistics • February 1979 MONEY STOCK MEASURES A N D COMPONENTS Billions of dollars, averages of daily figures Item 1975 Dec. r 1976 Dec. r 1977 Dec. r 1978 Dec. 1978 July' Aug. r Sept. r Oct. r Nov. r Dec. 361.1 589.4 866.2 1,474.7 954.8 1,563.2 361.6 589.8 870.9 1,485.6 959.6 1,574.2 361.0 587.4 874.3 1,493.9 969.7 1,589.3 361.5 586.7 876.3 1,500.9 973.0 1,597.5 Seasonally adjusted MEASURES i 1 2 3 4 5 6 M-l M-l + M-2 M-3 M-4 M-5 295.4 456.8 664.8 1,092.4 745.8 1,173.5 313.8 517.2 740.6 1,235.6 803.0 1,298.0 338.7 560.6 809.4 1,374.3 883.1 1,448.0 361.5 586.7 876.3 1,500.9 973.0 1,597.5 354.5 580.0 848.7 1,444.6 936.7 1,532.6 357.0 583.5 856.9 1,458.4 944.5 1,546.0 COMPONENTS 7 Currency Commercial bank deposits: 8 Demand 9 Time and savings 10 Savings 11 Negotiable CDs 2 12 Other time 73.8 80.8 88.6 97.5 93.2 93.9 95.2 95.8 96.6 97.5 221.7 450.3 160.7 81.0 208.6 233.0 489.2 202.1 62.4 224.7 250.1 544.4 219.7 73.7 251.0 264.1 611.4 220.0 96.6 292.8 261.3 582.2 222.8 88.0 271.4 263.0 587.5 223.7 87.6 276.2 265.9 593.7 225.5 88.5 279.6 265.8 597.9 225.2 88.6 284.1 264.4 608.7 223.4 95.4 289.9 264.1 611.4 220.0 96.6 292.8 13 Nonbank thrift institutions3 All .1 495.0 544.4 611.4 582.2 587.5 593.7 597.9 608.7 611.4 359.0 585.4 861.7 1,469.2 952.0 1,559.5 361.4 587.9 868.2 1,481.6 959.0 1,572.5 363.0 587.6 871.6 1,487.9 968.0 1,584.3 371.6 594.7 882.0 1,503.6 981.6 1,603.1 Not seasonally adjusted MEASURES 1 14 15 16 17 18 19 303.9 463.6 670.0 1,095.0 753.5 1,178.4 M-l M-l + M-2 M-3 M-4 M-5 322.6 524.2 745.8 1,238.3 810.0 1,302.6 348.2 568.0 814.9 1,377.2 890.8 1,453.2 371.6 594.7 882.0 1,503.6 981.6 1,603.1 356.3 583.7 851.4 1,450.2 938.8 1,537.6 354.4 580.9 853.8 1,455.5 941.8 1,543.5 COMPONENTS 20 Currency Commercial bank deposits: 21 Demand 22 Member 23 Domestic nonmember 24 Time and savings 25 Savings 26 Negotiable CDs 2 27 Other time 28 Other checkable deposits4 3 29 Nonbank thrift institutions 30 U.S. government deposits (all commerical banks) 1 69.0 75.1 82.1 90.1 93.9 94.2 94.9 95.6 97.2 99.1 222.2 159.7 58.5 416.7 134.5 90.5 207.1 228.8 162.8 62.6 449.6 159.1 83.5 222.9 240.5 169.4 67.5 487.4 200.2 64.3 249.0 258.1 177.5 76.2 542.6 111 .1 75.9 290.5 262.4 177.9 80.5 582.4 224.7 87.3 270.5 260.2 176.2 80.1 587.5 223.7 88.0 275.7 264.1 178.3 81.9 593.1 223.6 90.3 279.2 265.8 179.3 82.7 597.6 223.5 90.8 283.3 265.7 178.3 83.7 605.0 221.5 96.4 287.1 272.5 182.9 85.6 609.9 219.9 99.5 290.5 0.4 366.3 0.7 424.9 1.4 492.5 2.1 562.3 2.7 598.8 2.8 601.7 2.8 607.5 2.9 613.4 3.1 616.3 3.2 621.6 4.9 4.1 4.4 5.1 4.5 3.6 6.2 4.3 8.0 10.2 Composition of the money stock measures is as follows : M-l: Averages of daily figures for (1) demand deposits at commercial banks other than domestic interbank and U.S. government, less cash items in process of collection and Federal Reserve float; (2) foreign demand balances at Federal Reserve Banks; and (3) currency outside the Treasury, Federal Reserve Banks, and vaults of commercial banks. M-l + : M-l plus savings deposits at commercial banks, NOW accounts at banks and thrift institutions, credit union share draft accounts, and demand deposits at mutual savings banks. M2-: M-l plus savings deposits, time deposits open account, and time certificates of deposit (CDs) other than negotiable CDs of $100,000 or more at large weekly reporting banks. M-3: M-2 plus the average of the beginning- and end-of-month deposits of mutual savings banks, savings and loan shares, and credit union shares (nonbank thrift). M-4: M-2 plus large negotiable CDs. M-5: M-3 plus large negotiable CDs. 2 Negotiable time CDs issued in denominations of $100,000 or more by 3large weekly reporting commercial banks. Average of the beginning- and end-of-month figures for deposits of mutual savings banks, for savings capital at savings and loan associations, and4 for credit union shares. Includes NOW accounts at thrift institutions, credit union share draft accounts, and demand deposits at mutual savings banks. NOTE. Latest monthly and weekly figures are available from the board's 508 (H.6) release. Back data are available from the Banking Section, Division of Research and Statistics. NOTES TO TABLE 1.23: 1 Adjusted to exclude domestic commercial interbank loans. 2 Loans sold are those sold outright to 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. Prior to Aug. 28, 1974, the institutions included had been defined somewhat differently, and the reporting panel of banks was also different. On the new basis, both "Total loans" and "Commerical and industrial loans" were reduced by about $100 million. 3 Data beginning June 30, 1974, include one large mutual savings bank that merged with a nonmember commercial bank. As of that date there were increases of about $500 million in loans, $100 million in "Other" securities and $600 million in "Total loans and investments." As of Oct. 31, 1974, "Total loans and investments" of all commercial banks were reduced by $1.5 billion in connection with the liquidation of one large bank. Reductions in other items were: "Total loans," $1.0 billion (of which $0.6 billion was in "Commercial and industrial loans"), and "Other securities," $0.5 billion. In late November "Commercial and industrial loans" were increased by $0.1 billion as a result of loan reclassifications at another large bank. 4 Reclassification of loans reduced these loans by about $1.2 billion as 5of Mar. 31, 1976. Reclassification of loans at one large bank reduced these loans by about $200 million as of Dec. 31, 1977. NOTE. Data are for last Wednesday of month except for June 30 and Dec. 31; data are partly or wholly estimated except when June 30 and Dec. 31 are call dates. Monetary Aggregates 1.22 AGGREGATE RESERVES A N D DEPOSITS A15 Member Banks Billions of dollars, averages of daily figures 1978 1975 Dec. Item 1976 Dec. 1977 Dec. May June July Aug. Sept. Oct. Nov. Dec. Seasonally adjusted 1 Reserves1 2 Nonborrowed 3 Required 4 Deposits subject to reserve requirements2 5 Time and savings Demand: 6 Private 7 U.S. Government 34.67 34.54 34.40 504.2 336.8 34.89 34.84 34.61 528.6 354.1 36.10 35.53 35.91 568.6 386.7 37.27 36.06 37.05 591.5 405.1 37.63 36.53 37.45 595.8 407.4 38.11 36.80 37.92 600.5 410.8 37.93 36.79 37.77 602.7 413.0 38.21 37.15 38.02 607.0 416.8 38.38 37.10 38.22 608.9 418.3 39.75 39.05 39.53 616.9 427.5 41.27 40.40 41.04 616.7 429.4 164.5 2.9 171.5 3.0 178.5 3.5 183.6 2.7 184.6 3.8 186.1 3.6 186.5 3.3 186.2 4.0 187.2 3.5 187.0 2.3 185.1 2.3 Not seasonally adjusted 2 8 Deposits subject to reserve requirements 9 Time and savings Demand: 10 Private 11 U.S. Government 510.9 337.2 534.8 353.6 575.3 386.4 588.3 406.1 596.8 408.6 600.6 411.1 599.2 412.8 605.9 416.6 608.4 418.5 r 615.1 425.2 624.0 429.6 170.7 3.1 177.9 3.3 185.1 3.8 179.3 2.9 183.7 4.5 186.4 3.2 183.9 2.5 184.7 4.6 186.9 3.0 r 188.0 2.0 191.9 2.5 1 Series reflects actual reserve requirement percentages with no adjustment to eliminate the effect of changes in Regulations D and M. There are breaks in series because of changes in reserve requirements effective Dec. 12, 1974; Feb. 13, May 22, and Oct. 30, 1975; Jan. 8 and Dec. 30, 1976. In addition, effective Jan. 1, 1976, statewide branching in New York was instituted. The subsequent merger of a number of banks raised required reserves because of higher reserve requirements on aggregate deposits at these banks. 1.23 LOANS A N D INVESTMENTS 2 Includes total time and savings deposits and net demand deposits as defined by Regulation D. Private demand deposits include all demand deposits except those due to the U.S. govt., less cash items in process of collection and demand balances due from domestic commercial banks. NOTE. Back data and estimates of the impact qn required reserves and changes in reserve requirements are shown in Table 14 of the Board's Annual Statistical Digest, 1971-1975. All Commercial Banks Billions of dollars; last Wednesday of month except for June 30 and Dec. 31 1974 Dec. 313 Category 1978 1975 Dec. 31 1976 Dec. 31 1977 Dec. 31 July 26* Aug. 30* Sept. 27* Oct. 25* Nov. 29 * Dec. 31* Seasonally adjusted 1 Loans and investments1 2 Including loans sold outright 2 . . . . 691.1 695.9 721.8 726.2 785.1 788.9 870.6 875.5 940.7 945.3 944.6 949.3 952.4 957.0 960.9 964.8 966.5 970.2 967.3 971.1 3 4 5 6 Loans: Total Including loans sold outright 2 ... Commercial and industrial Including loans sold outright 2 ... 500.2 505.0 183.5 186.2 496.9 501.3 176.2 178.7 538.9 542.7 4179.7 4182.1 617.0 621.9 5201.4 5204.2 675.1 679.7 220.8 223.1 680.2 684.9 222.8 225.2 687.3 691.9 224.6 226.9 696.8 700.7 227.0 228.9 706.8 710.5 228.9 230.8 709.0 712.8 228.9 230.7 7 8 Investments: U.S. Treasury Other 51.1 139.8 80.1 144.8 98.0 148.2 95.6 158.0 100.6 165.0 97.9 166.5 97.2 167.9 95.2 168.9 90.3 169.4 88.4 169.9 Not seasonally adjusted 1 9 Loans and investments 10 Including loans sold outright2 705.6 710.4 737.0 741.4 801.6 805.4 888.9 893.8 936.6 941.2 942.0 946.7 951.4 956.1 958.4 962.3 969.3 973.0 987.6 991.4 11 12 13 14 Loans: Total i Including loans sold outright 2 ... Commercial and industrial Including loans sold outright 2 ... 510.7 515.5 186.8 189.5 507.4 511.8 179.3 181.8 550.2 554.0 4182.9 4185.3 629.9 634.8 5205.0 5207.8 675.6 680.2 220.9 232.2 681.0 685.7 221.7 224.1 688.6 693.3 223.9 226.2 696.6 700.5 226.5 228.4 707.2 710.9 228.9 230.8 723.9 727.7 233.0 234.8 15 16 Investments: U.S. Treasury Other 54.5 140.5 84.1 145.5 102.5 148.9 100.2 158.8 96.1 164.9 94.8 166.2 95.0 167.7 93.5 168.3 92.6 169.5 93.0 170.7 For notes see bottom of opposite page. A16 1.24 DomesticNonfinancialStatistics • February 1979 COMMERCIAL BANK ASSETS A N D LIABILITIES Last-Wednesday-of-Month Series Billions of dollars except for number of banks 19783 1977 Account Dec. Mar. Apr. May June July* Aug." Sept.? Oct.* Nov." Dec." All commercial 1 Loans and investments 2 Loans, gross Investments: 3 U.S. Treasury securities.. 4 Other 939.1 680.1 939.7 680.4 953.0 688.7 974.4 712.4 985.0 722.1 980.6 719.6 985.5 724.5 996.4 1,003.0 1,016.2 1,034.7 733.6 741.2 754.1 770.9 100.2 158.8 99.0 160.3 100.2 164.1 97.3 164.6 97.9 165.1 96.1 164.9 94.8 166.2 95.0 167.7 93.5 168.3 92.6 169.5 92.6 171.2 5 6 7 8 9 168.7 13.9 29.3 59.0 66.4 130.5 14.4 30.2 42.6 43.3 133.1 14.3 27.6 43.6 47.6 161.0 14.5 30.3 51.9 64.3 166.8 12.0 29.6 56.0 69.3 130.2 14.8 23.6 44.4 47.3 137.4 15.2 29.7 43.0 49.5 141.8 15.2 32.6 44.4 49.6 146.5 15.1 34.6 45.0 51.7 149.2 16.7 32.6 46.5 53.5 170.1 17.2 37.7 51.6 63.6 Cash assets Currency and coin Reserves with F.R. Banks... Balances with banks Cash items in process of collection.. 10 Total assets/total capital1 liabilities and 1,166.0 1,140.5 1,156.9 1,206.5 1,215.0 1,179.2 1,192.9 1,209.5 1,220.4 1,240.8 1,284.0 11 Deposits 939.4 899.8 915.5 952.9 965.7 932.3 937.7 949.9 952.3 959.0 993.1 12 13 14 Interbank U.S. government Other. 51.7 7.3 323.9 37.6 4.9 281.2 39.0 6.2 293.8 51.2 3.3 312.9 49.3 8.0 317.5 40.5 4.3 296.3 40.4 2.8 298.6 41.9 297.1 43.3 7.6 299.2 42.9 2.1 304.7 51.1 2.3 327.1 15 16 Interbank Other 9.8 546.6 9.0 567.1 9.0 567.5 9.4 576.1 10.2 580.8 10.3 580.9 10.7 585.2 11.6 588.3 11.1 591.2 11.8 597.6 12.4 600.3 17 Borrowings 18 Total capital accounts2 96.2 85.8 105.6 83.4 104.9 83.7 112.2 84.6 106.8 89.9 103.2 85.8 109.1 86.2 112.8 87.1 118.3 87.1 125.6 87.8 133.0 87.3 14,707 14,689 14,697 14,702 14,698 14,713 14,721 14,715 14,713 14,719 14,719 19 MEMO: Number of banks 11.0 Member 20 Loans and investments 21 Loans, gross Investments: 22 U.S. Treasury securities... 23 Other 675.5 494.9 668.6 490.5 676.8 495.3 693.8 514.3 699.7 519.6 695.8 517.6 698.9 520.3 706.9 527.0 713.4 533.9 724.3 544.6 739.5 558.3 70.4 110.1 68.2 109.9 68.8 112.7 66.9 112.7 67.4 112.7 65.7 112.5 65.3 113.3 65.4 114.5 64.1 115.3 63.5 116.2 63.6 117.6 24 25 26 27 28 Cash assets, total Currency and coin Reserves with F.R. Banks. . . Balances with banks Cash items in process of collection.. 134.4 10.4 29.3 30.8 63.9 104.8 10.6 30.2 22.9 41.2 106.5 10.5 27.6 22.7 45.7 130.7 10.6 30.3 28.1 61.7 133.8 8.7 29.6 29.1 66.5 104.2 10.8 23.6 24.3 45.4 111.2 11.1 29.7 22.9 47.6 115.4 11.1 32.6 24.0 47.7 118.6 11.1 34.6 23.2 49.7 121.3 12.3 32.6 25.1 51.4 140.2 12.7 37.7 28.6 61.2 29 Total assets/total capital 1 861.8 833.2 843.3 884.7 888.7 857.3 868.5 882.2 891.2 908.5 945.2 683.5 645.1 655.1 686.7 694.3 666.1 670.6 679.6 682.5 688.6 716.3 48.0 5.4 239.4 34.7 3.7 205.1 36.0 4.5 213.4 47.5 2.2 229.1 45.5 5.6 231.6 37.3 3.1 214.6 37.2 1.9 217.0 38.6 8.1 215.6 39.9 5.7 217.0 39.5 1.5 221.3 47.3 1.6 237.9 7.8 382.9 7.0 394.7 6.9 394.3 7.3 400.5 8.1 403.4 8.2 402.9 8.6 405.9 9.4 407.8 9.0 411.0 9.7 416.7 10.2 419.3 84.9 63.7 91.8 62.4 91.1 62.7 96.9 63.3 92.1 66.1 88.0 64.2 93.9 64.5 97.2 65.1 101.4 65.2 108.1 65.7 115.9 65.5 5,669 5,654 5,645 5,638 5,622 5,613 5,610 5,593 5,585 5,586 5,586 liabilities 30 Deposits Demand: 31 32 U.S. government 33 Other Time: 34 Interbank 35 Other 36 37 Borrowings Total capital accounts2 38 MEMO: Number of banks 1 and Includes items not shown separately. Effective Mar. 31, 1976, some of the item "reserve for loan losses" and all of the item "unearned income on loans" are no longer reported as liabilities. As of that date the "valuation" portion of "reserve for loan losses" and the "unearned income on loans" have been netted against "other assets," and against "total assets" as well. Total liabilities continue to include the deferred income tax portion of "reserve for loan losses." 2 Effective Mar. 31, 1976, includes "reserves for securities" and the contingency portion (which is small) of "reserve for loan losses." 3 Figures partly estimated except on call dates. NOTE. Figures include all bank-premises subsidiaries and other significant majority-owned domestic subsidiaries. Commercial banks: All such banks in the United States, including member and nonmember banks, stock savings banks, nondeposit trust companies, and U.S. branches of foreign banks. Member banks: The following numbers of noninsured trust companies that are members of the Federal Reserve System are excluded from member banks in tables 1.24 and 1.25 and are included with noninsured banks in table 1.25: 1976—December, 11; 1978—January, 12. Commercial Banks 1.25 COMMERCIAL BANK ASSETS A N D LIABILITIES All Call-Date Series Millions of dollars, except for number of banks Account 1977 1976 June 30 Dec. 31 Dec. 31 1978 1976 June 30 Dec. 31 Total insured 1 Loans: Gross Net Investments: U.S. Treasury securities Other 2 3 4 5 6 7 Total assets/total liabilities1 1977 June 30 1978 Dec. 31 June 30 National (all insured) 827,696 854,733 914,779 956,431 476,610 488,240 523,000 542,218 578,734 560,077 601,122 581,143 657,509 636,318 695,443 672,207 340,691 329,971 351,311 339,955 384,722 372,702 403,812 390,630 101,461 147,500 129,562 100,568 153,042 130,726 99,333 157,936 159,264 97,001 163,986 157,393 55,727 80,191 76,072 53,345 83,583 74,641 52,244 86,033 92,050 50,519 87,886 90,728 583,304 599,743 651,360 671,166 825,003 847,372 922,657 945,874 469,377 476,381 520,167 526,932 3,022 44,064 285,200 2,817 44,965 284,544 7,310 49,843 319,873 7,956 47,203 312,707 1,676 23,149 163,346 1,632 22,876 161,358 4,172 25,646 181,821 4,483 22,416 176,025 8,248 484,467 7,721 507,324 8,731 536,899 8,987 569,020 4,907 276,296 4,599 285,915 5,730 302,795 5,791 318,215 14 Borrowings 15 Total capital accounts 75,291 72,061 81,137 75,502 89,339 79,082 98,351 83,074 54,421 41,319 57,283 43,142 63,218 44,994 68,948 47,019 16 MEMO: Number of banks 14,397 14,425 14,397 14,381 4,735 4,701 4,654 4,616 8 Deposits Demand: 9 U.S. government 10 Interbank 11 Other Time: 12 Interbank 13 Other 1,003,970 1,040,945 1,129,712 1,172,772 State member (all insured) Insured nonmember 17 Loans and investments, gross Loans: 18 Gross 19 Net Investments: 20 U.S. Treasury securities 21 Other 22 Cash assets 144,000 144,597 152,514 157,464 207,085 221,896 239,265 256,749 102,277 99,474 102,117 99,173 110,243 107,205 115,736 112,470 135,766 130,630 147,694 142,015 162,543 156,411 175,894 169,106 18,849 22,874 32,859 19,296 23,183 35,918 18,179 24,091 42,305 16,886 24,841 43,057 26,884 44,434 20,631 27,926 46,275 20,166 28,909 47,812 24,908 29,595 51,259 23,606 23 189,579 195,452 210,442 217,384 231,086 245,748 267,910 284,221 24 149,491 152,472 163,436 167,403 206,134 218,519 239,053 251,539 429 19,295 52,204 371 20,568 52,570 1,241 22,346 57,605 1,158 23,117 55,550 917 1,619 69,648 813 1,520 70,615 1,896 1,849 80,445 2,315 1,669 81,131 2,384 75,178 2,134 76,827 2,026 80,216 2,275 85,301 956 132,993 988 144,581 973 153,887 920 165,502 17,310 13,199 19,697 13,441 21,736 14,182 23,167 14,670 3,559 17,542 4,155 18,919 4,384 19,905 6,235 21,384 1,023 1,019 1,014 1,005 8,639 8,705 8,729 8,760 Demand: 25 26 27 Interbank Other Time: Interbank Other 28 29 30 Borrowings 31 32 MEMO: Number of banks Total nonmember Noninsured nonmember 33 18,819 22,940 24,415 28,699 225,904 244,837 263,681 285,448 34 35 16,336 16,209 20,865 20,679 22,686 22,484 26,747 26,548 152,103 146,840 168,559 162,694 185,230 178,896 202,641 195,655 1,054 1,428 6,496 993 1,081 8,330 879 849 9,458 869 1,082 9,360 27,938 45,863 27,127 28,919 47,357 28,497 29,788 48,662 34,367 30,465 52,341 32,967 39 Total assets/total liabilities1 26,790 33,390 36,433 42,279 257,877 279,139 304,343 326,501 40 13,325 14,658 16,844 19,924 219,460 233,177 255,898 271,463 4 1,277 3,236 8 1,504 3,588 10 1,868 4,073 8 2,067 4,814 921 2,896 72,884 822 3,025 74,203 1,907 3,718 84,518 2,323 3,736 85,946 1,041 7,766 1,164 8,392 1,089 9,802 1,203 11,831 1,997 140,760 2,152 152,974 2,063 163,690 2,123 177,334 4,842 818 7,056 893 6,908 917 8,413 962 8,401 18,360 11,212 19,812 11,293 20,823 14,649 22,346 275 293 310 317 8,914 8,998 9,039 9,077 Loans: Gross Net Investments: 36 U.S. Treasury securities 37 Other 38 Cash assets Demand: 41 42 43 Other Time: 44 45 Other 46 47 Total capital accounts 48 MEMO: Number of banks 1 Includes items not shown separately. For Note see Table 1.24. A18 1.26 DomesticNonfinancialStatistics • February 1979 COMMERCIAL BANK ASSETS A N D LIABILITIES Detailed Balance Sheet, June 30, 1978 Millions of dollars, except for number of banks. Member banks1 Asset account 1 Cash bank balances, items in process 2 Currency and coin 3 Reserves with Federal Reserve Banks 4 Demand balances with banks in United States 5 Other balances with banks in United States... 6 Balances with banks in foreign countries 7 Cash items in process of collection 8 Total securities held—Book value 9 U.S. Treasury 10 Other U.S. government agencies 11 States and political subdivisions 12 All other securities 13 Unclassified total 14 15 16 17 18 19 Trading-account securities U.S. Treasury Other U.S. government agencies States and political subdivisions All other trading account securities Unclassified 20 21 22 23 24 Bank investment portfolios U.S. Treasury Other U.S. government agencies States and political subdivisions All other portfolio securities 25 Federal Reserve stock and corporate stock 26 Federal funds sold and securities resale agreement. 27 Commercial banks 28 Brokers and dealers 29 Others 30 Other loans, gross 31 LESS: Unearned income on loans 32 Reserves for loan loss 33 Other loans, net 34 35 36 37 38 39 40 41 42 43 44 Other loans, gross, by category Real estate loans Construction and land development Secured by farmland Secured by residential properties 1- to 4-family residences FHA-insured or VA-guaranteed Conventional Multifamily residences FHA-insured Conventional Secured by other properties Insured All commercial commercial banks banks Large banks Total New York City City of Chicago Other large2 All other 166,754 11,950 29,574 43,092 6,779 6,093 69,266 157,393 11,883 29,566 38,158 5,007 3,588 69,192 133,786 8,691 29,566 23,166 2,775 3,110 66,478 40,354 795 4,104 10,382 520 439 24,113 5,594 190 1,537 248 5 384 3,231 48,783 2,878 12,499 3,539 782 1,484 27,602 39,054 4,828 11,426 8,996 1,468 803 11,533 261,272 97,872 39,847 117,257 6,204 92 259,360 97,002 39,486 117,018 5,767 178,753 67,406 25,193 82,541 3,549 64 20,609 9,623 305 7,979 2,955 1,353 3,480 191 57,297 22,215 7,362 26,626 1,071 23 92,868 32,613 14,678 43,554 1,981 41 7,160 4,062 986 1,676 345 92 7,156 4,062 986 1,676 345 7,010 4,044 976 1,657 270 64 3,026 1,907 428 610 82 978 713 80 133 52 2,756 1,352 423 824 133 23 251 72 45 90 3 41 254,112 93,810 38,861 115,582 5,859 252,204 92,940 38,499 115,343 5,422 171,743 63,362 24,217 80,884 3,279 17,583 7,716 1,373 8,271 223 7,002 2,242 1,273 3,347 139 54,541 20,863 6,939 25,802 938 92,617 32,541 14,633 43,464 1,979 1,800 8,881 1,669 1,628 1,380 309 105 491 475 48,576 41,068 4,962 2,546 43,768 36,621 4,954 2,193 34,495 27,517 4,847 2,131 ,309 ,321 ,514 474 1,616 1,300 235 80 17,935 13,9Q6 2,528 1,411 10,636 9,899 569 167 673,615 16,142 7,293 650,180 651,675 7,150 628,439 485,054 10,768 5,680 468,606 76,423 620 1,297 74,506 25,479 104 325 25 049 184,099 3,521 2,155 178,424 199,053 6,524 1,902 190,628 192,877 23,658 131,891 17,684 3,565 76,832 72,964 6,430 66,534 3,869 327 3,541 33,810 9,629 2,391 23 4,891 4,209 519 3,690 683 2,678 630 110,293 104,952 7,496 97,457 5,341 399 4,941 50,719 192,609 23,639 8,189 110,113 104,793 7,423 97,370 5,320 395 4,926 50,667 49,324 8,586 405 28.984 27,608 3,395 24,213 1,376 87 1,289 11,349 70,260 6,076 3,129 41,531 39,816 2,474 37,342 1,714 96 1,619 19,523 11,483 2,114 702 2,931 240 5,496 6,567 403 14.985 4,369 1,307 2,648 775 5,886 2,706 1,896 3,630 67,555 2,873 654 265 596 245 1, 13 313 1,011 10,844 51,387 58,592 47,646 23,605 2,909 5,414 4,449 965 7,430 3,892 3,537 829 1,373 37,998 31,323 10,746 1,912 9,069 7,617 1,453 4,843 2,471 2,372 4,752 6,675 6,005 8,208 16,086 120 563 2,324 8 1,426 1,331 42 1,289 95 25 70 614 45 46 47 48 49 50 51 52 53 54 Loans to financial institutions REITs and mortgage companies Domestic commercial banks Banks in foreign countries Other depositary institutions Other financial institutions Loans to security brokers and dealers Other loans to purchase or carry securities Loans to farmers—except real estate Commercial and industrial loans 44,426 8,348 5,263 12,864 1,480 16,471 11,716 4,425 27,018 221,591 35,472 8,341 3,116 6,610 1,458 15,948 11,340 4,337 26,993 210,907 33,355 7,949 2,398 6,447 1,312 15,249 11,043 3,604 14,813 170,678 55 56 57 58 59 60 61 62 63 64 65 66 67 Loans to individuals Installment loans Passenger automobiles Residential repair and modernization Credit cards and related plans Charge-account credit cards Check and revolving credit plans Other retail consumer goods Mobile homes Other Other installment loans Single-payment loans to individuals All other loans 153,582 124,139 55,757 7,956 20,136 16,185 3,951 18,752 9,387 9,365 21,539 29,443 17,979 153,458 124,066 55,740 7,955 20,125 16,184 3,941 18,747 9,387 9,360 21,498 29,392 16,559 105,611 85.515 35,523 5,203 17,766 14.516 3,249 12,722 6,553 6,169 14,301 20,096 14,059 5,041 994 305 2,214 1,424 791 395 171 225 1,132 1,646 2,906 961,697 933,196 683,234 99,732 34,749 254,146 294,607 6,303 22,318 3,146 16,489 38,347 6,302 22,191 3,109 15,293 35,288 5,918 16,454 3,069 14,788 31,300 1,106 2,390 1,546 7,399 12,779 98 793 1,045 7,056 1,089 1,241 3,669 6,215 1,240 5,908 12,456 392 4,824 1,215,052 1,172,773 888,551 165,307 43,748 332,417 347,080 68 Total loans and securities, net 69 70 71 72 73 Direct lease financing Fixed assets—Buildings, furniture, real estate... Investment in unconsolidated subsidiaries Customer acceptances outstanding Other assets 74 Total assets 161 38,588 6,686 4,015 812 123 272 53 2,755 1,457 294 178 13,149 2,334 1,505 179 77 1,068 1,027 41 54 19 35 128 182 8,288 10,946 3,774 101 Commercial Banks 1.26 A19 Continued Member banks1 Liability or capital account 75 Demand deposits 76 Mutual savings banks 77 Other individuals, partnerships, and corporations 78 U.S. government 79 States and political subdivisions 80 Foreign governments, central banks, etc 81 Commercial banks in United States 82 Banks in foreign countries 83 Certified and officers' checks, etc All Insured commercial commercial banks banks Large banks Total New York City City of Chicago Other large2 All other Nonmember banks1 374,758 1,626 367,867 1,425 282,751 1,217 65,198 588 10,932 100,994 291 105,627 337 92,006 409 279,829 7,964 18,210 1,840 38,924 8,721 17,643 278,459 7,956 18,138 1,351 37,963 7,815 14,760 206,399 5,641 12,421 1,317 36,639 7,679 11,440 33,292 584 830 1,084 18,730 6,007 4,083 7,802 187 184 25 2,147 225 361 78,702 2,043 3,564 170 11,503 1,249 3,473 86,603 2,828 7,842 37 4,260 198 3,522 73,430 2,323 5,789 524 2,285 1,042 6,204 84 Time deposits 85 Accumulated for personal loan payments 86 Mutual savings banks 87 Other individuals, partnerships, and corporations 88 U.S. government 89 States and political subdivisions 90 Foreign governments, central banks, etc 91 Commercial banks in United States 92 Banks in foreign countries 365,015 90 292 353,571 90 275 257,007 72 263 37,850 15,695 93,735 115 37 90 109,727 71 20 108,008 18 29 287,380 989 56,273 10,171 7,968 1,853 280,154 989 55,928 7,429 7,352 1,354 202,808 793 38,077 7,193 6,645 1,156 29,149 82 1,672 4,184 1,917 730 12,118 39 1,261 1,201 911 128 72,205 421 16,031 1,684 3,113 190 89,336 251 19,113 123 705 108 84,572 195 18,195 2,979 1,323 697 93 Savings deposits 94 Individuals and nonprofit organizations 95 Corporations and other profit organizations.. 96 U.S. government 97 States and political subdivisions 98 Allother 226,026 210,453 10,807 62 4,501 204 224,436 209,067 10,787 62 4,486 35 154,577 144,198 7,431 53 2,863 31 10,945 10,150 504 2,758 2,612 137 55,474 51,865 3,091 16 494 9 85,401 79,572 3,699 36 2,087 7 71,449 66,255 3,376 9 1,638 172 99 Total deposits 965,799 945,875 694,335 113,992 29,385 250,204 300,755 271,464 93,179 46,947 13,356 32,876 13,586 1,738 17,125 33,773 88,903 43,727 13,289 31,887 9,448 1,733 15,925 22,062 83,003 41,154 12,325 29,524 9,112 1,425 15,419 19,126 20,103 7,773 3,199 9,132 3,398 233 8,014 5,911 8,989 5,904 1,897 1,188 179 28 1,095 1,106 40,575 21,697 5,686 13,192 4,243 698 5,916 8,051 13,336 5,780 1,543 6,013 1,292 465 394 4,057 10,176 5,793 1,030 3,352 4,473 313 1,705 14,647 1,125,200 1,083,946 302,779 100 Federal funds purchased and securities sold under agreements to repurchase 101 Commercial banks 102 Brokers and dealers 103 Others 104 Other liabilities for borrowed money 105 Mortgage indebtedness 106 Bank acceptances outstanding 107 Other liabilities 108 Total liabilities 109 Subordinated notes and debentures 110 Equity capital 111 Preferred stock 112 Common stock 113 Surplus 114 Undivided profits 115 Other capital reserves 116 Total liabilities and equity capital MEMO ITEMS: 117 Demand deposits adjusted2 Average for last 15 or 30 days: 118 Cash and due from bank 119 Federal funds sold and securities purchased under agreements to resell 120 Total loans 121 Time deposits of $ 100,000 or more 122 Total deposits 123 Federal funds purchased and securities sold under agreements to repurchase 124 Other liabilities for borrowed money 125 Standby letters of credit outstanding 126 Time deposits of $100,000 or more 127 Certificates of deposit 128 Other time deposits 129 Number of banks * 9 822,421 151,651 40,782 309,688 320,299 5,816 5,753 4,440 1,004 80 2,061 1,296 1,376 84,037 88 17,790 32,386 31,949 1,824 83,074 81 17,691 31,874 31,684 1,744 61,690 33 12,743 22,906 24,803 1,205 12,652 2,885 2,645 4,451 5,334 132 570 1,404 859 52 20,668 2 3,997 8,063 8,238 368 25,485 31 5,531 8,898 10,372 652 22,347 55 5,047 9,480 7,146 619 1,215,052 1,172,773 888,551 165,307 43,748 332,417 347,080 326,501 258,603 252,756 173,993 21,771 5,368 59,847 87,007 84,610 151,066 142,173 121,518 35,452 5,619 44,611 35,836 29,548 53,196 647,386 181,510 941,481 47,463 628,167 174,479 923,749 36,121 468,342 143,050 675,725 5,530 74,085 31,979 106,594 1,901 24,972 12,833 28,441 16,558 178,557 61,496 243,663 12,132 190,728 36,742 297,026 17,075 179,043 38,459 265,756 95,273 13,002 90,853 8,533 85,358 8,027 21,859 3,433 9,825 171 40,469 3,437 13,205 986 9,915 4,975 18,948 183,339 155,925 27,414 17,750 177,602 151,931 25,671 16,686 145,695 123,685 22,001 9,406 32,476 28,200 4,277 1,269 13,253 11,450 1,803 4,796 62,711 52,439 10,271 1,215 37,245 31,595 5,650 2,262 37,653 32,240 5,413 14,698 14,381 5,621 12 9 153 5,447 9,077 1 Member banks exclude and nonmember banks include 13 noninsured trust companies that are members of the Federal Reserve System. 2 Demand deposits adjusted are demand deposits other than domestic commercial interbank and U.S. government, less cash items reported as in process of collection. 273 16 NOTE. Data include consolidated reports, including figures for all bank-premises subsidiaries and other significant majority-owned domestic subsidiaries. Securities are reported on a gross basis before deductions of valuation reserves. Back data in lesser detail were shown in previous BULLETINS. A20 1.27 DomesticNonfinancialStatistics • February 1979 ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of £750 Million or More on December 31, 1977, Assets and Liabilities Millions of dollars, Wednesday figures 1978 Account Dec. 6 e 1 Cash items in process of collection 2 Demand deposits due from banks in the United States 3 All other cash and due from depositary institutions 4 Total loans and securities Securities U.S. Treasury securities Trading account Investment account, by maturity One year or less Over one through five years Over five years Other securities Trading account Investment account U.S. government agencies . . .. States and political subdivision, by maturity. One year or less Over one year Other bonds, corporate stocks and securities 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 Loans Federal funds sold1 To commercial banks To nonbank brokers and dealers in securities, Toothers Other loans, gross Commercial and industrial. . . . Bankers' acceptances and commercial paper All other U.S. addresses Non-U.S. addressees Real estate To individuals for personal expenditures. . . . To financial institutions Commercial banks in the U.S Banks in foreign countries Sales finance, personal finance companies, etc Other financial institutions To nonbank brokers and dealers in securities To others for purchasing and carrying securities2 To finance agricultural production Allother Less: Unearned income Loan loss reserve Other loans, net Lease financing receivables All other assets Total assets 44,260 58 59 60 61 62 63 64 65 66 67 68 69 70 71 52,100 454,702 35,443 35,714 35,773 35,902 60,854 61,702 61,747 61,691 16,573 16,387 130,662 78,916 20,349 131,801 21,905 132,150 Jan. 3P Jan. 10*' 54,830 44,287 46,233 15,112 14,445 14,145 13,122 33,854 458,040 30,336 453,052 36,357 450,897 33,453 447,922 35,533 3,112 32,421 8,805 19,503 4,114 63,564 2,420 61,144 11,909 46,037 7,706 38,332 35,102 3,272 31,830 8,361 19,370 4,099 63,914 2,658 61.256 11,897 46.257 7,772 38,486 35,778 3,989 31,789 8,283 19,304 4,203 63,669 2,562 61,107 11,656 46,399 7,708 38,692 35,710 4,209 31,501 8,173 19,160 4,168 63,697 2,283 61,414 11,928 46,485 7,645 38,839 3,198 3,102 3,052 3,001 27,380 19,454 5,510 2,416 341,526 133,896 25,775 16,789 5,979 3,006 338,262 132,057 24,076 15,814 6,025 2,237 337,401 132,060 22,608 16,621 4,276 1,712 335,972 131,795 4,351 129,545 123,477 3,628 128,432 122,428 6,004 81,191 58,941 3,504 128,291 122,147 6,143 81,490 59,278 Jan. 17»' Jan. 24P 39,735 79,505 79,835 80,664 58,663 3,442 128,614 122,672 5,942 81,061 58,689 3,498 9,662 3,110 9,018 3,309 8,978 3,065 8,510 6,068 2,805 8,851 2,633 9,053 3,029 9,451 3,297 9,976 8,223 15,006 8,129 15,179 8,602 15,163 8,818 8,112 15,234 15,969 8,445 8,237 15,926 8,516 7,919 15,802 7,725 7,893 15,433 7,659 2,129 4,421 2,149 4,416 2,173 4,445 2,172 4,511 600,047 605,144 615,785 630,331 2,202 4,584 15,828 5,618 4,345 331,562 4,803 66,188 632,828 2,232 4,574 14,842 5,645 4,356 328,262 4,886 66,938 613,945 2,279 4,535 14,662 5,678 4,348 327,374 5,074 65,588 618,295 2,302 4,465 14,081 5,708 4,356 325,907 5,119 63,845 603,197 180,086 644 129,449 4,437 939 27,943 7,030 1,969 7,523 255,031 76,490 71,192 188,345 676 131,530 4,818 192,637 698 135,620 4,854 964 33,213 182,347 128,858 4,737 1,632 31,054 6,785 1,035 7,387 259,444 77,866 72,320 184,556 754 133,133 5,024 1,054 1,713 7,156 255,109 76,494 71,270 203,164 1,004 144,472 5.291 978 34,122 7,711 1,646 7,941 258,104 77,869 72,394 6,651 1,234 7,888 259,224 77,446 72,068 169,066 671 122,167 4,969 1,107 25,299 6,728 1,481 6,643 260,066 76,968 71,561 4,367 814 42 178,615 140,973 22,545 474 7,276 4,530 903 41 180,234 141,967 23,131 484 7,528 4,536 962 48 181,578 142,452 23,396 488 7,769 4,427 907 44 181,777 142,528 23,610 495 7,781 4,450 914 42 183,098 143,524 23,898 485 7,772 7,347 7,125 73,380 7,473 75,773 7,363 76,819 7,418 74,569 2,552 142 6.292 8,217 316 2,910 8,497 1,532 3,811 7,388 432 5,736 8,610 41,933 591,234 42,684 571,970 43,593 576,924 43,418 561,896 41,594 41,975 41,371 41,301 Includes securities purchased under agreements to resell. Other than financial institutions and brokers and dealers. Includes securities sold under agreements to repurchase. 48,512 453,242 Residual (total assets minus total liabilities) . 1 2 3 45,198 444,042 4 72 Dec. 13* Dec. 20 e Dec. 27 445,536 Deposits Demand deposits. 177,965 778 Mutual savings banks Individuals, partnerships, and corporations. . 125,797 4,423 States and political subdivisions 1,015 U.S. government 30,316 Commercial banks in United States 6,390 Banks in foreign countries 1,321 Foreign governments and official institutions . 7,774 Certified and officers' checks 253,077 Time and savings deposits 76,762 Savings 71,420 Individuals and nonprofit organizations Partnerships and corporations operated for profit 4,485 Domestic governmental units 814 Allother 42 Time 176,315 Individuals, partnerships, and corporations.. 138,928 States and political subdivisions 22,447 U.S. government 524 6,828 Commercial banks in United States Foreign governments, official institutions, and banks 7,588 Federal funds purchased 3 76,556 Other liabilities for borrowed money Borrowings from Federal Reserve Banks. . 184 Treasury tax-and-loan notes All other liabilities for borrowed money. .. "9,906' Other liabilities and subordinated note and debentures Total liabilities 45 46 47 48 49 50 51 52 53 54 55 56 57 1979 2,682 30,691 7,860 1,546 8,390 255,079 76,268 71,035 4,432 826 41 178,541 140,724 22,734 472 7,129 4,353 840 40 178,811 140,894 7,482 78,047 7,491 75,424 74 ' 9,499 22,618 475 7,334 120 14,316 8,268 i6*022 860 28,818 4 This is not a measure of equity capital for use in capital adequacy analysis or for other analytic uses. Weekly Reporting Banks 1.28 A21 LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of £1 Billion or More on December 31, 1977 Assets and Liabilities Millions of dollars, Wednesday figures 1979 Dec. 6 6 1 Cash items in process of collection 2 Demand deposits due from banks in the United States 3 All other cash and due from depositary institutions 4 Total loans and securities Securities 5 U.S. Treasury securities 6 Trading account Investment account, by maturity One year or less Over one through five years Over five years Other securities Trading account Investment account U.S. government agencies States and political subdivision, by maturity. One year or less Over one year Other bonds, corporate stocks and securities 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 42,170 Dec. 13e Dec. 20 e Dec. 27 43,087 415,143 423,848 425,750 32,911 33,179 33,260 33,377 55,554 56,366 56,402 56,324 14,654 18,405 20,347 124,268 125,362 125,575 66 67 68 69 70 71 72 Includes securities purchased under agreements to resell. Other than financial institutions and brokers and dealers. Includes securities sold under agreements to repurchase. Jan. 17" Jan. 24" Jan. 31" 51,843 42,046 43,902 37,610 41,799 14,081 13,706 13,352 12,524 13,710 31,822 428,352 28,628 422,666 34,671 420,994 31,513 418,541 27,998 421,336 33,162 3,073 30,089 8,157 18,172 3,761 58,651 2,359 56,292 11,068 42,266 7,023 35,243 32,701 3,244 29,456 7,703 18,017 3,737 58,878 2,603 56,274 10,996 42,444 7,077 35,367 33,411 3,964 29,446 7,648 17,960 3,839 58,774 2,502 56,272 10,831 42,625 7,132 35,492 33,336 4,179 29,157 7,536 17,822 3,800 58,822 2,230 56,592 11,118 42,709 7,071 35,638 32,797 3,952 28,845 7,264 17,710 3,871 58,895 2,413 56,482 11,036 42,707 7,182 35,525 2,958 2,835 2,816 2,766 2,739 25,130 17,535 5,242 2,353 320,641 127,017 23,310 14,628 5,708 2,974 317,022 124,968 21,532 13,672 5,674 2,185 316,574 125,228 20,581 14,912 3,979 1,690 315,132 124,980 22,872 15,698 5,141 2,033 316,103 124,844 4,281 122,736 116,728 6,008 75,590 52,181 3,371 121,598 115,711 5,886 75,843 52,166 3,561 121,667 115,720 5,947 76,058 52,442 3,446 121,534 115,439 6,095 76,335 52,743 3,421 121,423 115,236 6,187 76,627 53,263 2,919 9,390 3,209 9,910 3,406 9,590 3,010 8,934 3,215 8,894 2,91 A 8,425 2,788 8,284 7,917 14,760 8,373 14,749 8,586 14,819 7,892 15,431 8,320 8,007 15,392 8,405 7,701 15,273 7,619 7,688 14,914 7,555 7,746 14,851 8,557 1,852 4,274 1,871 4,301 1,874 4,369 570,813 580,637 595,027 1,898 4,422 14,894 5,138 4,094 311,409 4,646 64,701 595,445 1,927 4,410 13,960 5,149 4,095 307,778 4,734 65,278 577,058 1,974 4,372 13,797 5,194 4,102 307,278 4,919 63,953 581,792 1,997 4,303 13,217 5,221 4,109 305,802 4,962 62,314 567,464 2,001 4,314 12,829 5,158 4,173 306,772 5,079 62,532 572,454 177,039 652 122,970 4,198 2,468 29,412 7,750 1,542 7,917 239,015 70,690 65,881 181,333 677 126,842 4,243 881 31,948 8,176 1,710 6,728 239,042 70,924 66,117 190,575 964 134,769 4,639 870 32,420 7,650 1,645 7,618 241,471 72,190 67,107 170,814 822 119,837 4,120 1,485 29,748 6,662 1,030 7,110 242,518 72,068 66,950 173,085 728 124,232 4,345 901 27,452 6,582 1,226 7,619 242,429 71,801 66,819 158,606 647 114,073 4,261 939 24,143 6,661 1,471 6,411 243,248 71,366 66,352 165,550 718 116,089 4,798 1,219 27,745 6,732 1,145 7,104 241,413 71,013 66,059 4,007 763 39 168,325 132,632 20,587 470 7,157 4,020 745 42 168,118 132,722 20,497 469 7,095 4,194 847 41 169,280 133,348 21,084 479 7,258 4,178 892 48 170,450 133,790 21,240 484 7,479 A,091 841 43 170,628 133,816 21,492 490 7,482 4,123 848 42 171,882 134,766 21,755 481 7,477 4,107 805 42 170,400 133,548 21,678 485 7,384 7,480 71,840 7,336 77,272 7,112 69,740 7,458 71,764 7,348 72,874 7,403 70,809 7,305 66,505 105 2,490 128 5,775 7,914 301 2,755 8,040 1,517 3,543 7,051 326 5,324 8,172 3,490 6,266 7,504 40,838 556,442 41,545 537,737 42,519 543,020 42,272 528,756 42,766 533,496 39,003 39,321 38,772 38,709 38,959 i 3 * 635 ''15*243' Residual (total assets minus total liabilities) 1 2 3 Jan. 10" 2,556 8,991 Deposits 169,181 167,075 Demand deposits. 617 Mutual savings banks 744 Individuals, partnerships, and corporations. 117,445 120,997 3,870 States and political subdivisions 3,898 854 U.S. government 913 26,704 Commercial banks in United States 28,967 6,953 6,330 Banks in foreign countries 1,965 1,317 Foreign governments and official institutions , 7,092 7,332 Certified and officers' checks 238,984 237,060 Time and savings deposits 70,898 71,141 Savings. 66,021 66,224 Individuals and nonprofit organizations Partnerships and corporations operated for 4,138 4,081 profit 737 755 Domestic governmental units 42 41 All other 165,919 168,086 Time Individuals, partnerships, and corporations.. 130,724 132,458 20,421 20,722 States and political subdivisions 519 467 U.S. government 6,678 6,968 Commercial banks in United States Foreign governments, official institutions, 7,577 7,471 and banks 72,904 74,592 Federal funds purchased3 Other liabilities for borrowed money 42 162 Borrowings from Federal Reserve Banks., Treasury tax-and-loan notes 9,' i25 All other liabilities for borrowed money. .. "9,' 520' Other liabilities and subordinated note and debentures Total liabilities 58 59 60 61 62 63 64 65 49,630 415,334 Loans Federal funds sold1 To commercial banks 14,788 To nonbank brokers and dealers in securities. To others Other loans, gross Commercial and industrial 124,348 Bankers' acceptances and commercial paper All other U.S. addresses Non-U.S. addressees Real estate To individuals for personal expenditures To financial institutions 2,724 Commercial banks in the U.S 8,788 Banks in foreign countries Sales finance, personal finance companies, 8,014 etc 14,590 Other financial institutions To nonbank brokers and dealers in securities. To others for purchasing and carrying 1,831 securities2 4,282 To finance agricultural production All other Less: Unearned income Loan loss reserve Other loans, net Lease financing receivables All other assets 565,564 Total assets 45 46 47 48 49 50 51 52 53 54 55 56 57 46,269 Jan. 3p 4 This is not a measure of equity capital for use in capital adequacy analysis or for other analytic uses. A22 1.29 DomesticNonfinancialStatistics • February 1979 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1978 Account Dec. 6 e 1 Cash items in process of collection 2 Demand deposits due from banks in the United States 3 All other cash and due from depositary institutions 15,362 1979 Dec. 13 * Dec. 20« Dec. 27 e 15,430 16,872 17,747 Securities 2 5 U.S. Treasury securities 6 Trading account2 7 Investment account, by maturity 8 One year or less 9 Over one through five years 10 Over five years 11 Other securities2 12 Trading account2 13 Investment account 14 U.S. government agencies 15 States and political subdivision, by maturity. 16 One year or less 17 Over one year 18 Other bonds, corporate stocks and securities. . Loans 19 Federal funds sold3 20 To commercial banks 21 To nonbank brokers and dealers in securities. 22 To others 23 Other loans, gross 24 Commercial and industrial 25 Bankers' acceptances and commercial 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 2,672 2,428 4,608 4,319 38,589 38,648 39,459 39,590 All other U.S. addressees Non-U.S. addressees Real estate 9,986 To individuals for personal expenditures. .. . To financial institutions Commercial banks in the U.S 1,064 Banks in foreign countries 3,834 Sales finante, personal finance companies, etc 3,002 Other financial institutions 4,466 To nonbank brokers and dealers in securities To others for purchasing and carrying securities4 365 To finance agricultural production 192 All other Less: Unearned income Loan loss reserve Other loans, net Lease financing receivables All other assets 5 Total assets 159,494 Deposits Demand deposits Mutual savings banks Individuals, partnerships, and corporations... States and political subdivisions U.S. government Commercial banks in United States Banks in foreign countries Foreign governments and official institutions. Certified and officers' checks Time and savings deposits Savings Individuals and nonprofit organizations Partnerships and corporations operated for profit Domestic governmental units All other Time Individuals, partnerships, and corporations. States and political subdivisions U.S. government Commercial banks in U.S Foreign governments, official institutions, and banks Federal funds purchased6 Other liabilities for borrowed money Borrowings from Federal Reserve Banks Treasury tax-and-loan notes All other liabilities for borrowed money Other liabilities and subordinated note and debentures Total liabilities Jan. 10f Jan. 17p Jan. 24p Jan. 31 p 17,369 16,675 15,990 13,594 15,975 7,679 8,515 8,040 7,894 8,627 9,222 98,468 6,883 95,885 10,048 95,087 8,558 94,899 7,620 96,429 6,485 1,119 4,653 712 6,306 958 4,653 696 6,183 837 4,606 739 5,892 750 4,419 723 5,844 650 4,447 748 11,267 1,376 9,220 1,832 7,388 671 11,196 1,376 9,180 1,783 7,397 641 11,243 1,375 9,215 1,817 7,398 652 11,290 1,426 9,215 1,750 7,465 648 11,258 1,405 9,205 1,732 7,473 648 4,886 3,444 1 ,035 406 77,828 39,336 4,643 2,962 1,041 640 75,719 38,000 4,288 2,782 981 525 75,363 37,876 5,105 3,912 988 204 74,605 37,643 6,419 4,779 1,281 358 74,912 37,404 1,980 37,356 35,061 2,294 10,178 7.294 1,295 36,705 34,416 2,289 10,210 7,294 1,380 36,496 34,285 2,212 10,217 7,265 1,199 36,444 34,257 2,187 10,245 7,262 964 36,440 34,091 2,349 10,293 7,274 10,022 10,057 10,121 948 3,966 1,102 4,316 1,356 4,760 1.295 4,327 1,094 4 008 1,224 3,903 1,158 3,546 1,010 3,497 2,913 4,538 3,117 4,592 3,326 4,530 3,127 4,427 4,635 3,174 4,455 4,529 3,034 4,452 4,055 2,938 4,407 4,281 3,017 4,404 4,823 366 193 368 201 369 195 162,046 165,982 170,412 366 192 2,650 662 1,336 75,830 490 32,141 165,370 364 193 2,399 649 1,331 73,739 489 32,941 161,388 401 194 2,739 657 1,333 73,373 497 32,103 161,764 403 190 2,532 660 1,333 72,612 489 32,427 157,861 411 200 2,579 639 1,364 72,908 492 32,026 161,169 54,709 420 28,400 442 101 16,201 4,575 1,068 3,502 50,578 9,331 8,695 55,123 326 29,256 395 131 14,638 5,060 1,726 3,591 50,872 9,343 8,701 60,048 353 30,112 455 676 17,143 5,897 1,258 4,153 51,004 9,288 8,664 61,379 376 30,700 463 104 19,050 6,364 1,444 2,876 50,772 9,310 8,690 60,277 584 33,192 430 139 15,838 5,490 1,366 3,238 50,808 9,414 8,761 56,648 516 28,753 403 305 18,244 4,705 786 2,936 51,224 9,556 8,890 55,770 418 30,029 464 194 15,380 4,712 962 3,611 51,349 9,537 8,890 52,242 373 28,512 426 279 13,712 4,767 1,181 2,992 51,913 9,516 8,846 56,103 427 29,397 518 224 16,645 4,924 770 3,197 50,996 9,486 8,842 460 160 16 41,246 31,703 2,051 52 2,829 454 170 18 41,528 31,947 2,014 55 2,925 440 168 16 41,716 32,084 1,981 52 3,080 444 162 14 41,461 31,980 1,941 52 3,022 461 182 11 41,394 31,915 1,862 48 3,139 460 189 16 41,668 31,860 1,908 42 3,287 449 185 12 41,812 32,041 1,890 40 3,329 450 209 11 42,397 32,432 1,899 40 3,402 438 196 9 41,510 31,741 1,817 35 3,375 4,612 20,105 4,587 22,550 4,519 20,009 4,466 20,888 4,430 19,805 4,570 19,344, 4,514 19,376 4,624 18,269 4,541 17,168 4,589 4,424 5,675 5,643 1,065 4,396 390 3,935 975 556 3,792 100 1,124 4,104 2,021 1,255 3,770 5,643 16,394 152,746 17,281 148,821 17,403 149,221 17,540 145,293 17,150 148,462 12,623 12,567 12,543 12,568 12,707 1,403 72 Residual (total assets minus total liabilities)7 1 Excludes trading account securities. 23 Not available due to confidentiality. Includes securities purchased under agreements to resell. 4 Other than financial institutions and brokers and dealers. Jan. 3f 5 6 7 Includes trading account securities. Includes securities sold under agreements to repurchase. This is not a measure of equity capital for use in capital adequacy analysis or for other analytic uses. Weekly 1.30 LARGE WEEKLY REPORTING COMMERCIAL BANKS Reporting Banks A23 Balance Sheet Memoranda Millions of dollars, Wednesday figures 1979 19781 Account Dec. 6 e Dec. 13 e Dec. 20 e Dec. 27 e Jan. 3p Jan. 10^ Jan. 17* Jan. 24p Jan. 31p Large weekly reporting banks with assets of $750 million or more 1 Total loans (gross) and investments adjusted 2 .. 434,950 2 338,653 2 Total loans (gross) adjusted 3 102,374 3 Demand deposits adjusted 434,854 337,437 106,006 439,718 342,198 106,460 439,294 341,700 106,360 445,050 345,952 113,234 443,154 334,138 105,374 441,802 342,354 108,451 438,301 338,894 102,924 440,604 341,606 101,932 Time deposits in accounts of $100,000 or more 4 Total 5 Negotiable CDs 6 Other time deposits 131,153 95,326 35,827 133,325 97,142 36,183 133,503 97,200 36,303 133,198 96,948 36,250 131,247 96,584 34,664 131,650 96,826 34,824 131,817 96,466 35,351 133,518 97,739 35,778 131,837 96,140 35,698 3,679 1,796 1,884 3,694 1,823 1,871 3,706 1,884 1,822 3,697 1,786 1,911 3,734 1,917 1,817 3,641 2,554 1,088 3,545 2,447 1,097 3,609 2,501 1,108 3,568 2,487 1,080 Loans sold outright to affiliates4 7 Total 8 Commercial and industrial 9 Other Large weekly reporting banks with assets of $1 billion or more 2 10 Total loans (gross) and investments adjusted . 11 Total loans (gross) adjusted 2 12 Demand deposits adjusted 3 406,927 318,461 95,025 407,070 317,525 98,536 411,682 322,020 98,890 411,295 321,594 98,874 416,643 324,830 105,442 414,272 322,694 97,536 413,403 321,218 100,831 409,985 317,826 95,914 412,182 320,489 94,786 Time deposits in accounts of $100,000 or more 13 Total 14 Negotiable CDs 15 Other time deposits 123,814 91,070 32,743 125,933 92,861 33,072 126,102 92,918 33,183 125,796 92,642 33,154 123,873 92,271 31,602 124,270 92,248 32,022 124,334 91,949 32,385 125,973 93,148 32,825 124,271 91,486 32,785 3,629 1,770 1,859 3,643 1,797 1,846 3,657 1,860 1,797 3,644 1,755 1,889 3,692 1,899 1,793 3,598 2,534 1,065 3,502 2,429 1,074 3,566 2,482 1,084 3,526 2,470 1,056 Loans sold outright to affiliates4 16 Total 17 Commercial and industrial 18 Other Large weekly reporting banks in New York City 19 Total loans (gross) and investments adjusted2- 5 2 20 Total loans (gross) adjusted 21 Demand deposits adjusted3 78,011 23,045 78,349 24,924 80,069 25,358 79,932 24,479 95,726 77,974 26,931 93,809 76,306 21,424 93,070 75,644 24,207 91,822 74,641 24,657 92,644 75,542 23,259 Time deposits in accounts of $100,000 or more 22 Total 23 Negotiable CDs 24 Other time deposits 36,296 29,214 7,082 36,545 29,463 7,082 36,714 29,632 7,082 36,470 29,394 7,076 36,237 29,137 7,100 36,645 29,489 7,156 36,815 29,596 7,220 37,314 30,113 7,201 36,422 29,139 7,282 1 Data revised to conform with new coverage basis for 1979. Data shown only for items that are conceptually comparable with those for 1979. 2 Exclusive of loans and federal funds transactions with domestic commercial banks. 3 All demand deposits except U.S. government and domestic banks less cash items in process of collection. 4 Loans sold are those sold outright to 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. 5 Excludes trading account securities. A24 DomesticNonfinancialStatistics • February 1979 1.31 LARGE WEEKLY REPORTING COMMERCIAL BANKS Commercial and Industrial Loans Millions of dollars Outstanding Industry classification Net change during— 1978 Nov. 29 Dec. 6 Dec. 13 1978 Dec. 20 Dec. 27 Q3 1978 Q4 Oct. Nov. Dec. 2 Total loans classified 1 Total 2 3 4 5 6 7 8 9 10 11 114,541 114,799 114,549 115,578 115,773 1,354 4,323 1,863 1,228 1,232 Durable goods manufacturing: Primary metals Machinery Transportation equipment Other fabricated metal products... Other durable goods 2,595 5,473 2,627 2,414 3,986 2,624 5,513 2,571 2,451 4,062 2,643 5,415 2,593 2,447 4,050 2,672 5,408 3,110 2,405 4,046 2,662 5,348 3,096 2,471 3,992 -66 -16 -52 69 136 -70 -40 349 -51 -53 -68 61 -159 -78 -79 -69 24 39 -30 20 67 -125 469 57 6 Nondurable goods manufacturing: Food, liquor, and tobacco Textiles, apparel, and leather Petroleum refining Chemicals and rubber Other nondurable goods 4,550 3,976 2,552 3,232 2,440 4,642 3,999 2,569 3,275 2,424 4,628 3,930 2,570 3,357 2,405 4,613 3,833 2,660 3,453 2,400 4,681 3,756 2,634 3,465 2,380 -101 240 -116 -101 213 527 -627 113 -3 -100 186 -110 -47 -173 -47 210 -297 78 -63 7 131 -220 82 233 -60 10,622 10,594 10,607 10,629 10,585 172 8 17 28 -37 1,793 9,530 8,939 5,520 1,774 5,545 5,106 14,422 1,859 9,502 8,855 5,494 1,782 5,587 5,040 14,509 1,870 9,443 8,711 5,515 1,748 5,586 5,031 14,484 1,872 9,433 8,557 5,469 1,772 5,741 5,035 14,750 1,952 9,367 8,412 5,494 1,765 5,940 5,098 14,749 -323 232 -80 53 68 89 118 520 208 195 218 32 841 -73 790 61 279 636 34 -20 245 -16 219 -12 79 109 -8 61 201 -49 244 159 -163 -527 -26 -9 395 -8 327 8,458 3,542 8,449 3,591 8,473 3,543 8,392 3,766 8,537 3,809 282 -149 501 697 257 210 165 220 79 267 5,445 5,407 5,500 5,562 5,580 166 861 455 271 135 45 -8 -18 142,103 1,390 5,394 12 Mining, including crude petroleum Trade: 13 Commodity dealers 14 Other wholesale 15 Retail 16 Transportation 18 Other public utilities 19 Construction 20 Services 21 All other domestic loans 22 Bankers acceptances 23 Foreign commercial and industrial loans MEMO ITEMS: 24 Commercial paper included in total classified loansi. ... 25 Total commercial and industrial loans of all large weekly reporting banks 62 140,658 140,655 140,557 141,829 1978 Aug. 30 Sept. 27 Oct. 25 -17 2,125 Dec. 27 Oct. Q4 Q3 1,445 1978 1978 Nov. 29 1,824 Nov. Dec. 3 "Term" loans classified 26 Total 52,618 53,019 53,762 54,861 55,481 1,726 2,463 743 1,099 620 27 28 29 30 31 Durable goods manufacturing: Primary metals Machinery Transportation equipment Other fabricated metal products.. Other durable goods 1,710 2,669 1,586 990 1,699 1,672 2,650 1,565 1,007 1,713 1,641 2,768 1,506 1,004 1,717 1,631 2,751 1,517 1,040 1,815 1,624 2,771 1,664 1,119 1,902 -34 74 145 13 35 -48 121 99 112 189 -31 118 -59 -3 4 -10 -17 11 36 98 -7 20 147 79 87 32 33 34 35 36 Nondurable goods manufacturing: Food, liquor, and tobacco Textiles, apparel, and leather Petroleum refining Chemicals and rubber Other nondurable goods 1,740 1,133 1,882 2,322 1,156 1,727 1,126 1,846 2,301 1,177 1,862 1,096 1,789 2,109 1,192 1,978 1,046 1,843 2,043 1,218 1,918 1,050 1,895 2,181 1,183 56 4 -101 -111 86 191 -76 49 -120 6 135 -30 -57 -192 15 116 -50 54 -66 26 -60 4 52 138 -35 7,757 7,862 7,852 7,930 7,937 102 75 -10 78 7 248 2,276 2,827 3,732 1,057 3,860 2,245 6,606 2,616 250 2,360 2,791 3,753 1,076 3,847 2,224 6,797 2,713 268 2,329 3,065 3,718 1,065 3,960 2,264 6,936 2,798 305 2,372 3,225 3,746 1,131 4,064 2,295 7,113 2,857 313 2,342 3,204 3,790 1,158 4,221 2,373 7,270 2,908 22 185 -43 15 67 318 107 307 393 63 -18 413 37 82 374 149 473 196 18 -31 274 -35 -11 113 40 139 85 37 43 160 28 66 104 31 177 59 8 -30 -21 44 27 157 78 157 51 2,507 2,562 2,823 2,941 2,658 86 96 261 118 -283 37 Mining, including crude petroleum and natural gas Trade: 38 Commodity dealers 39 Other wholesale 40 Retail 41 Transportation 42 Communication 43 Other public utilities 44 Construction 45 Services 46 All other domestic loans 47 Foreign commercial and industrial loans 1 2 Reported for the last Wednesday of each month. Includes "term" loans, shown below. 3 Outstanding loans with an original maturity of more than 1 year and all outstanding loans granted under a formal agreement—revolving credit or standby—on which the original maturity of the commitment was in excess of 1 year. Deposits and Commercial Paper 1.32 A25 GROSS D E M A N D DEPOSITS of Individuals, Partnerships, and Corporations Billions of dollars, estimated daily-average balances At commercial banks Type of holder 1 All holders, individuals, partnerships, and 2 Financial business 4 Consumer 6 Other 1974 Dec. 1975 Dec. 1976 Dec. 225.0 236.9 19.0 118.8 73.3 2.3 11.7 20.1 125.1 78.0 2.4 11.3 1978 1977 June Sept. Dec. Mar. June Sept. Dec. 250.1 253.8 252.7 274.4 262.5 271.2 278.8 294.6 22.3 130.2 82.6 2.7 12.4 25.9 129.2 84.1 2.5 12.2 23.7 128.5 86.2 2.5 11.8 25.0 142.9 91.0 2.5 12.9 24.5 131.5 91.8 2.4 12.3 25.7 137.7 92.9 2.4 12.4 25.9 142.5 95.0 2.5 13.1 27.8 152.7 97.4 2.7 14.1 At weekly reporting banks 7 All holders, individuals, partnerships, 8 Financial business 9 Nonfinancial business 12 Other and 1975 Dec. 1976 Dec. 1977 Dec. 124.4 128.5 15.6 69.9 29.9 2.3 6.6 17.5 69.7 31.7 2.6 7.1 NOTE. Figures include cash items in process of collection. Estimates of gross deposits are based on reports supplied by a sample of commercial 1.33 1978 June July Aug. Sept. Oct. Nov. Dec. 139.1 136.9 139.9 137.7 139.7 141.3 142.7 147.0 18.5 76.3 34.6 2.4 7.4 19.0 71.9 36.6 2.3 7.1 19.4 73.7 37.1 2.3 7.3 19.4 72.0 36.8 2.4 7.1 18.9 74.1 37.1 2.4 7.3 19.1 75.0 37.5 2.5 7.2 19.3 75.7 37.7 2.5 7.5 19.8 79.0 38.2 2.5 7.5 banks. Types of depositors in each category are described in the June 1971 BULLETIN, p. 466. COMMERCIAL PAPER A N D BANKERS ACCEPTANCES OUTSTANDING Millions of dollars, end of period Instrument 1975 Dec. 1976 Dec. 1978 1977 Dec. June July Aug. Sept. Oct. Nov. Dec. Commercial paper (seasonally adjusted) I Financial companies: 1 2 Dealer-placed paper: 2 Total 4 5 Directly-placed paper:3 Total Bank-related 48,459 53,025 65,209 74,536 74,900 73,960 76,988 77,152 80,504 83,817 6,202 1,762 7,250 1,900 8,871 2,132 10,327 2,442 10,617 2,633 10,868 2,935 11,470 2,622 10,921 2,868 11,455 3,231 12,280 3,521 31,374 6,892 32,500 5,959 40,496 7,102 47,315 9,585 46,594 10,030 45,510 9,634 47,791 10,383 48,030 10,925 50,010 11,478 51,625 12,314 10,883 13,275 15,842 16,894 17,689 17,582 17,727 18,201 19,039 19,912 32,145 33,700 Dollar acceptances (not seasonally adjusted) 7 Total 8 9 10 11 12 13 Held by: Accepting banks Own bills Bills bought Federal Reserve Banks: Own account Foreign correspondents Others Based on: 14 Imports into United States 15 Exports from United States 16 All other 18,727 22,523 r 28,289 27,579 28,319 27,952 30,579 7,333 5,899 1,435 10,442 8,769 1,673 10,434 8,915 1,519 7,502 6,520 983 7,244 6,345 899 7,048 6,131 917 7.647 6,461 1,186 8,379 7,012 1,366 1,126 293 991 375 954 362 625 568 633 556 557 9,975 10,715 13,904 20,160 19,766 20,638 19,748 21,644 4,992 4,818 12,713 r 6,378 r 7,578 6,906 13,805 7,415 6,565 13,599 7,885 6,558 13,876 7,957 6,350 13,644 8,575 6,665 15,339 3,726 4,001 11,000 r 1 Institutions engaged primarily in activities such as, but not limited to, 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. 25,450 5,863 13,209 r 8,082 r r 6,840 1,243 8,579 7,653 927 585 1 664 23,478 24,456 8,675 7,224 16,245 8,574 7,586 17,540 3 As reported by financial companies that place their paper directly with investors. 4 Includes public utilities and firms engaged primarily in activities such as communications, construction, manufacturing, mining, wholesale and retail trade, transportation, and services. A26 1.34 DomesticNonfinancialStatistics • February 1979 PRIME RATE CHARGED BY BANKS on Short-term Business Loans Per cent per annum Effective date Rate 1978—Jan. 10. May Effective date 9Vi 9V4 1978—Sept. 15 8% 8I/2 8% 5 26, June 16 30 9 Aug. 31. 9Va 28 10 Id/4 Oct. 13 27 101/2 Nov. 1 \oy n 4 l n/2 6 17 24 113/4 Dec. 26 1.35 Month Rate 1977—Apr . May. June. July. Aug.: Sept.. Oct... Nov Dec.. 6.25 6.41 6.75 6.75 6.83 7.13 7.52 7.75 7.75 1978—Mar. Apr. May June July. Aug. Sept. Oct.. Nov. Dec. 1978—Jan Feb 7.93 8.00 1979—Jan.. TERMS OF LENDING AT COMMERCIAL BANKS Item Month Average rate Survey of Loans Made, November 6-11, 1978 Size of loan (in thousands of dollars) All sizes 25-49 1-24 50-99 100-499 1,000 and over 500-999 Short-term commercial and industrial loans 1 2 3 4 Amount of loans (thousands of dollars) Number of loans Weighted-average maturity (months) Weighted-average interest rate (percent per annum) 5 Interquartile range1 Percent of amount of loans: 6 With floating rate 7 Made under commitment 9,533,752 143,729 3.0 735,419 105,705 2.9 493,312 15,165 2.7 595,003 9,331 2.7 1,867,088 11,360 3.1 680,499 1,105 3.4 5,162,431 1,063 3.1 11.37 11.44 11.73 11.43 11.19 11.73 11.53 10.92-12.10 10.38-13.29 10.50-12.75 10.37-12.62 10.76-12.25 10.25-11.73 11.00-11.85 27. 1 17.3 64.4 36.2 26.4 20.7 69.3 70.0 81.2 121,987 172 42.1 544,208 155 49.6 11.93 11.58 11.00-12.88 10.75-12.68 11.09 10.00-12.13 50.1 42.8 35.0 31.8 34.1 Long-term commercial and industrial loans 8 9 10 11 Amount of loans (thousands of dollars) Number of loans Weighted-average maturity (months) Weighted-average interest rate (percent per annum) 12 Interquartile range1 Percentage of amount of loans: 13 With floating rate 14 Made under commitment 1,177,815 18,903 43.2 288,653 17,174 30.6 11.38 10.47-12.50 11.41 10.47-12.40 61.2 60.8 40.1 42.3 222,967 1,403 44.4 68.4 40.3 62.8 69.1 69.0 77.1 Construction and land development loans 15 16 17 18 19 20 21 22 23 24 25 Amount of loans (thousands of dollars) Number of loans Weighted-average maturity (months) Weighted-average interest rate (percent per annum) Interquartile range1 Percentage of amount of loans: With floating rate Secured by real estate Made under commitment Type of construction: 1- to 4-family Multifamily Nonresidential 1,012,101 25,510 7.7 11.55 10.50-12.50 403,138 1,800 8.7 214,383 157 11.8 10.82 11.46 11.65 11.90 9.92-12.13 10.29-12.68 10.56-12.62 11.75-12.36 11.46 10.50-12.75 167,317 18,633 4.2 42.7 94.2 60.4 38.2 15.4 46.3 All sizes 19.8 89.1 66.3 86.9 1.0 12.1 111,087 3,155 4.0 18.9 95.8 88.7 85.5 1.5 13.0 10-24 1-9 116,176 1,766 5.5 23.9 95.2 31.7 32.5 3.3 64.2 25-49 51.4 94.7 70.9 24.5 17.5 57.9 59.6 95.4 52.8 14.0 27.6 58.4 50-99 100-249 250 and over Loans to farmers 26 27 28 29 30 31 32 33 34 35 Amount of loans (thousands of dollars) Number of loans Weighted-average maturity (months) Weighted-average interest rate (percent per annum) Interquartile range1 By purpose of loan: Feeder livestock Other livestock Other current operating expenses Farm machinery and equipment Other 949,031 58,275 7.4 134,907 36,846 7.5 186,760 12,625 8.9 169,744 5,009 8.0 156,770 2,386 6.4 10.36 9.50-10.80 9.94 9.20-10.47 9.98 9.20-10.50 9.91 9.24-10.38 10.25 9.73-10.50 10.23 10.80 10.27 10.29 10.72 9.74 9.81 9.87 10.12 10.34 9.82 10.03 9.83 10.51 "0.46 9.64 10.81 10.02 9.80 10.18 10.20 10.37 10.33 9.78 10.20 1 Interest rate range that covers the middle 50 percent of the total dollar amount of loans made. 2 Fewer than three sample loans. 171,536 1,198 8.0 129,314 211 4.7 10.66 11.69 9.99-11.57 10.47-12.69 10.15 11.40 11.03 10.76 10.96 11.74 12.33 11.42 ( ) 11.78 2 NOTE. For more detail, see the board's 416 (G.14) statistical release, The past data have been revised and are available from Publications Services, Division of Support Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Securities Markets 1.36 INTEREST RATES All Money and Capital Markets Averages, per cent per annum Instrument 1976 1977 1978 1978 Oct. Dec. Nov. 1979 1979, week ending— Jan. Jan. 6 Jan. 13 Jan. 20 Jan. 27 Feb. 3 Money market rates 1 Federal funds1 5.05 5.54 7.94 8.96 9.76 10.03 10.07 10.59 9.97 10.05 10.05 10.12 Prime commercial paper2-3 2 90- to 119-day 3 4- to 6-month 5.24 5.35 5.54 5.60 7.94 7.99 8.98 9.03 10.14 10.23 10.37 10.43 10.25 10.32 10.48 10.55 10.34 10.40 10.28 10.36 10.09 10.16 9.99 10.07 4 Finance company 3paper, directly placed, 3- to 6-month - 4 5.22 5.49 7.78 8.78 9.82 10.06 10.10 10.24 10.19 10.15 9.98 9.86 5 Prime bankers acceptances, 90-day 3 - 5 5.19 5.59 8.11 9.32 10.53 10.55 10.29 10.65 10.41 10.29 10.11 9.92 Large negotiable certificates of6 deposit 6 3-month, secondary market 5.26 5.58 8.20 9.14 10.72 10.72 10.51 10.88 10.71 10.49 10.44 10.20 7 Eurodollar deposits, 3-month7 5.57 6.05 8.74 10.12 11.51 11.62 11.16 11.81 11.46 11.21 11.05 10.65 4.98 5.26 5.52 5.27 5.53 5.71 7.19 7.58 7.74 7.99 8.55 8.45 8.64 9.24 9.20 9.08 9.36 9.44 9.35 9.47 9.54 9.34 9.45 9.61 9.30 9.50 9.61 9.44 9.56 9.61 9.34 9.44 9.46 9.28 9.34 9.31 4.989 5.266 5.265 5.510 7.221 7.572 8.132 8.493 8.787 9.204 9.122 9.397 9.351 9.501 9.388 9.550 9.316 9.443 9.411 9.534 9.289 9.475 9.324 9.376 8 9 10 11 12 U.S. government securities Bills:3- 8 Market yields: 3-month 6-month 1-year Rates on new issue: 9 3-month 6-month Capital market rates 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Government notes and bonds U.S. Treasury Constant maturities:10 1-year 2-year 3-year 5-year 7-year 10-year 20-year 30-year Notes and bonds maturing in— 11 3 to 5 years Over 10 years (long-term) State and local: 12 Moody's series Aaa Baa Bond Buyer series 13 Corporate bonds 14 Seasoned issues All industries By rating groups: Aaa Aa A Baa Aaa utility bonds: 15 New issue Recently offered issues Dividend/price ratio 33 Preferred stocks 34 Common stocks 6.77 7.18 7.42 7.61 7.86 6.09 6.45 6.69 6.99 7.23 7.42 7.67 8.34 8.34 8.29 8.32 8.36 8.41 8.48 8.49 9.14 8.85 8.62 8.61 8.64 8.64 8.69 8.67 10.01 9.42 9.04 8.84 8.80 8.81 8.75 8.75 10.30 9.72 9.33 9.08 9.03 9.01 8.90 8.88 10.41 9.86 9.50 9.20 9.14 9.10 8.98 8.94 10.51 9.93 9.58 9.30 9.21 9.14 8.99 8.96 10.51 9.92 9.60 9.30 9.22 9.15 9.01 8.98 10.50 9.91 9.59 9.26 9.21 9.16 9.03 8.98 10.31 9.80 9.42 9.10 9.06 9.04 8.95 8.89 10.13 9.62 9.15 8.94 8.93 8.94 8.89 8.85 6.94 6.78 6.85 7.06 8.30 7."89 8.61 8.07 8.97 8.16 9.23 8.36 9.36 8.43 9.46 8.44 9.46 8.47 9.43 8.46 9.27 8.39 9.02 8.32 5.66 7.49 6.64 5.20 6.12 5.68 5.52 6.27 6.03 5.53 6.18 6.13 5.59 6.65 6.19 5.91 6.76 6.51 5.95 7.14 6.47 6.05 7.50 6.58 6.00 7.30 6.50 6.00 7.00 6.48 5.75 6.75 6.30 5.70 7.00 6.22 9.01 8.43 9.07 9.20 9.40 9.49 9.65 9.64 9.65 9.67 9.65 9.60 8.43 8.75 9.09 9.75 8.02 8.24 8.49 8.97 8.73 8.92 9.12 9.45 8.89 9.07 9.26 9.59 9.03 9.24 9.48 9.83 9.16 9.33 9.53 9.94 9.25 9.48 9.72 10.13 9.26 9.48 9.67 10.15 9.26 9.49 9.70 10.17 9.28 9.50 9.73 10.15 9.24 9.47 9.78 10.10 9.19 9.43 9.72 10.07 8.48 8.49 8.19 8.19 8.96 8.97 9.17 9.13 9.27 9.27 9.28 9.41 9.54 9.51 9.51 9.55 9.54 9.57 9.45 9.41 7.97 3.77 7.60 4.56 8.25 5.28 8.29 5.11 8.43 5.45 8.84 5.39 8.79 5.29 8.83 5.33 8.86 5.28 8.89 5.25 8.74 5.24 8.65 5.33 5.88 1 Weekly figures are 7-day averages of daily effective rates for the week ending Wednesday; the daily effective rate is an average of the rates on a given day weighted by the volume of transactions at these rates. 2 Beginning Nov. 1977, unweighted average of offering rates quoted by five dealers. Previously, most representative rate quoted by those dealers. 3 Yields are quoted on a bank-discount basis. 4 Averages of the most representative daily offering rates published by finance companies for varying maturities in this range. 5 Average of the midpoint of the range of daily dealer closing rates offered for domestic issues. 6 Weekly figures (week ending Wednesday) are 7-day averages of the daily midpoints as determined from the range of offering rates; monthly figures are averages of total days in the month. Beginning Apr. 5, 1978, weekly figures are simple averages of offering rates. 7 Averages of daily quotations for the week ending Wednesday. 8 Except for new bill issues, yields are computed from daily closing bid prices. 9 Rates 10 are recorded in the week in which bills are issued. Yields on the more actively traded issues adjusted to constant maturities by the U.S. Treasury, based on daily closing bid prices. 11 Unweighted averages for all outstanding notes and bonds in maturity ranges shown, based on daily closing bid prices. "Long-term" includes all bonds neither due nor callable in less than 10 years, including a number of very low yielding "flower" bonds. 12 General obligations only, based on figures for Thursday, from Moody's Investors Service. 13 Twenty issues of mixed quality. 14 Averages of daily figures from Moody's Investors Service. 15 Compilation of the Board of Governors of the Federal Reserve System. Issues included are long-term (20 years or more). New-issue yields are based on quotations on date of offering; those on recently offered issues (included only for first 4 weeks after termination of underwriter price restrictions), on Friday close-of-business quotations. A28 1.37 DomesticNonfinancialStatistics • February 1979 STOCK MARKET Selected Statistics 1979 1978 Indicator 1976 1978 1977 July Aug. Sept. Oct. Nov. Dec. Jan. 53.69 58.72 42.49 38.09 55.73 55.76 61.31 43.69 38.79 57.59 Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31,1965 = 50). 4 Utility 54.45 60.44 39.57 36.97 52.94 53.76 58.30 43.25 39.23 56.74 53.67 57.84 41.07 40.91 55.23 54.61 59.35 44.74 39.28 57.97 58.53 64.07 49.45 40.20 63.28 58.58 64.23 50.19 39.82 63.22 56.40 61.60 46.70 39.44 60.42 52.74 57.50 41.80 37.88 54.95 6 Standard & Poor's Corporation (1941-43 = 10) i.. 102.01 98.18 96.11 97.19 103.92 103.86 100.58 94.71 96.10 99.70 7 American Stock Exchange (Aug. 31,1973 = 100). 101.63 116.18 144.56 149.87 162.52 170.95 160.14 144.17 149.94 159.26 20,936 2,514 28,591 3,922 27,074 3,496 37,603 5,526 33,612 5,740 31,020 4,544 24,505 3,304 24,622 3,430 27,988 3,150 8 9 Volume of trading (thousands of shares)2 New York Stock Exchange American Stock Exchange 21,189 2,565 Customer financing (end-of-period balances, in millions of dollars) 10 Regulated margin credit at brokers/dealers3 11 Margin stock4 12 Convertible bonds 13 Subscription issues 8,166 7,960 204 2 9,993 9,740 250 3 11,438 11,190 247 11,984 11,740 243 1 12,626 12,400 225 1 12,307 12,090 216 11,209 11,000 209 11,035 10,830 205 1 MEMO: Free credit balances at brokers® Margin-account Cash-account 585 1,855 640 2,060 710 2,295 795 2,555 825 2,655 885 2,465 790 2,305 835 2,510 14 15 Margin-account debt at brokers (percentage distribution, end of period) 16 Total 17 18 19 20 21 22 By equity class (in percent):7 Under 40 40-49 50-59 60-69 70-79 80 or more 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 12.0 23.0 35.0 15.0 8.7 6.0 18.0 36.0 23.0 11.0 6.0 5.0 13.0 34.0 25.0 14.0 8.0 6.0 12.0 34.0 23.0 16.0 9.0 6.0 15.0 36.0 23.0 13.0 7.0 6.0 47.0 20.0 15.0 8.0 5.0 5.0 32.0 27.0 20.0 10.0 6.0 5.0 33.0 28.0 18.0 10.0 6.0 5.0 Special miscellaneous-account balances at brokers (end of period) 23 Total balances (millions of dollars) 8.. Distribution by equity status (percent) 24 Net credit status Debit status, equity of— 25 60 percent or more 26 Less than 60 percent 8,776 9,910 41.3 43.4 47.8 10.9 44.9 11.7 Margin requirements (percent of market value)9 Effective date 27 Margin stocks 28 Convertible bonds 29 Short sales Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 70 50 70 80 60 80 65 50 65 55 50 55 65 50 65 50 50 50 1 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 Based on trading for a 5^-hour day. 3 Margin credit includes all credit extended to purchase or carry stocks or related equity instruments and secured at least in part by stock. Credit extended is end-of-month data for member firms of the New York Stock Exchange. In addition to assigning a current loan value to margin stock generally, Regulations T and U permit special loan values for convertible bonds and4 stock acquired through exercise of subscription rights. A distribution of this total by equity class is shown on lines 23-28. 5 Nonmargin stocks are those not listed on a national securities exchange and not included on the Federal Reserve System's list of over-thecounter margin stocks. At brokers, such stocks have no loan value. 6 Free credit balances are in accounts with no unfulfilled commitments to the brokers and are subject to withdrawal by customers on demand. 7 Each customer's equity in his collateral (market value of collateral less net debit balance) is expressed as a percentage of current collateral values. 8 Balances that may be used by customers as the margin deposit required for additional purchases. Balances may arise as transfers based on loan values of other collateral in the customer's margin account or deposits of cash (usually sales proceeds) occur. 9 Regulations G, T, and U of the Federal Reserve Board of Governors, prescribed in accordance with the Securities Exchange Act or 1934, limit the amount of credit to purchase and carry margin stocks that may be extended on securities as collateral by prescribing a maximum loan value, which is a specified percentage of the market value of the collateral at the time the credit is extended. Margin requirements are the difference between the market value (100 percent) and the maximum loan value. The term "margin stocks" is defined in the corresponding regulation. Regulation G and special margin requirements for bonds convertible into stocks were adopted by the Board of Governors effective Mar. 11, 1968. Thrift Institutions 1.38 SAVINGS INSTITUTIONS A29 Selected Assets and Liabilities Millions of dollars, end of period 1978 1975 1976 1977 Apr. Account May June July Aug. Sept. Oct. Nov. r Dec.* Savings and loan associations9 1 Assets 338,233 391,907 459,241 480,947 487,052 491,576 498,301 504,298 508,977 515,352 520,677 523,784 2 Mortgages 3 Cash and investment securities1 4 Other 278,590 323,005 381,163 397,284 402,305 407,965 411,956 416,677 420,971 425,236 429,420 432,922 5 Liabilities and net worth 338,233 391,907 459,241 480,947 487,052 491,576 498,301 504,298 508,977 515,352 520,677 523,784 6 Savings capital 7 Borrowed money 8 FHLBB 9 Other 285,743 335,912 386,800 399,550 401,930 408,586 411,660 413,972 420,405 423,050 425,207 431,102 39,873 40,711 42,950 37,219 38,595 34,270 35,730 32,759 27,840 31,904 20,634 19,083 17,524 15,708 19,945 22,692 23,323 24,875 26,151 27,363 28,632 29,456 30,052 32,052 10,659 10,898 10,417 9,856 9,579 9,963 9,395 9,212 9,436 7,895 3,375 3,110 9,911 6,840 10,937 11,386 11,632 11,540 11,422 11,222 11,165 11,315 10,734 5,128 9,958 8,074 9,506 12,186 14,239 10,046 11,972 13,906 10,676 12,832 14,666 6,949 11 Other 30,853 28,790 35,724 33,178 39,150 38,928 41,853 41,810 42,444 42,303 41,505 42,106 43,627 42,718 44,188 43,433 43,987 44,019 45,577 44,539 45,869 45,388 44,964 45,898 12 Net worth 2 19,779 21,998 25,184 26,370 26,738 27,042 27,399 27,779 28,079 28,432 28,808 29,040 13 MEMO : Mortgage loan commitments outstanding 3.. 10,673 14,826 19,875 23,398 23,939 22,927 22,393 22,047 21,648 21,503 20,738 18,734 Mutual savings banks 10 14 Assets 121,056 134,812 147,287 151,383 152,202 153,175 154,315 155,210 156,110 156,843 157,436 Loans: 77,221 Mortgage 4,023 Other Securities: 4,740 U.S. government 1,545 State and local government. 27,992 Corporate and other 4 2,330 Cash 3,205 Other assets n.a. 81,630 5,183 88,195 6,210 90,346 7,422 90,915 7,907 91,555 7,771 92,230 8,207 92,866 8,379 93,403 8,418 93,903 8,272 94,497 7,921 n.a. n.a. 5,840 2,417 33,793 2,355 3,593 5,895 2,828 37,918 2,401 3,839 5,670 2,915 39,146 1,940 3,945 5,491 2,994 39,225 1,798 3,873 5,304 3,008 39,427 2,163 3,946 5,269 3,025 39,639 2,029 3,915 5,210 3,098 39,592 2,080 3,985 5,172 3,180 39,639 2,293 4,006 5,105 3,190 39,651 2,735 3,988 5,035 3,307 39,679 3,033 3,962 n.a. n.a. n.a. n.a. n.a. 22 Liabilities 121,056 134,812 147,287 151,383 152,202 153,175 154,315 155,210 156,110 156,843 157,436 n.a. 23 24 25 26 27 28 29 30 109,873 122,877 134,017 136,931 137,307 138,709 139,128 139,308 140,816 141,026 141,155 109,291 121,961 132,744 135,349 135,785 137,089 137,430 137,690 139,068 139,422 139,697 69,653 74,535 78,005 78,170 78,273 77,321 76,116 75,578 75,423 74,124 72,398 39,639 47,426 54,739 57,179 57,512 59,768 61,313 62,112 63,645 65,298 67,299 1,458 1,619 1,604 1,272 1,521 582 916 1,582 1,747 1,620 1,698 5,040 5,411 3,292 5,246 2,884 4,152 4,481 3,969 4,570 2,755 4,636 10,654 10,725 10,777 10,870 10,414 10,497 10,551 9,052 9,978 10,301 8,428 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 15 16 17 18 19 20 21 Deposits Regular: 5 Ordinary savings Time and other Other Other liabilities General reserve accounts MEMO : Mortgage loan commitments outstanding 6 .. 4,823 n.a. 289,304 321,552 351,722 363,269 366,938 369,879 374,415 378,124 381,050 382,446 385,562 n.a. 19,711 17,942 19,563 19,757 13,758 19,553 19,638 19,330 19,489 19,401 19,447 5,368 5,155 5,183 4,934 4,736 5,315 5,156 5,087 5,206 4,984 5,006 5,594 5,884 6,035 4,508 6,051 6,001 6,235 5,923 5,915 5,943 5,925 6,980 8,524 8,539 4,514 8,187 8,481 8,320 8,542 8,368 8,474 8,516 135,317 157,246 175,654 184,917 187,126 188,500 192,112 194,620 196,152 195,883 197,615 107,256 122,984 141,891 150,419 152,267 153,812 156,207 157,888 159,972 161,347 162,835 28,061 34,262 33,763 34,498 34,859 34,688 35,905 36,732 36,180 34,536 34,780 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 99,190 100,040 100,596 101,602 102,365 103,161 104,106 11,537 11,540 11,562 11,538 11,583 11,693 11,707 28,431 28,649 28,843 29,067 29,290 29,521 29,818 21,165 21,749 21,855 21,734 22,022 22,431 22,605 n.a. n.a. n.a. n.a. 1,803 2,439 4,066 4,342 4,606 4,958 4,872 4,789 4,561 4,843 Life insurance companies i 31 Assets 32 33 34 35 36 37 38 Securities: Government United States7 State and local Foreign8 Business Bonds Stocks 39 40 41 42 Mortgages Real estate Policy loans Other assets 89,167 9,621 24,467 16,971 91,552 10,476 25,834 18,502 96,848 11,060 27,556 21,051 98,585 11,269 28,246 20,922 Credit unions 44 45 43 Total assets/liabilities and capital Federal State 38,037 20,209 17,828 45,225 24,396 20,829 54,084 29,574 24,510 56,827 31,255 25,572 58,018 31,925 26,093 59,381 32,793 26,588 59,152 32,679 26,473 60,141 33,315 26,826 61,277 34,058 27,219 60,909 33,718 27,191 61,465 34,093 27,372 62,595 34,681 27,914 46 Loans outstanding 47 Federal 48 State 28,169 14,869 13,300 34,384 18,311 16,073 42,055 22,717 19,338 44,133 23,919 20,214 45,506 24,732 20,11A 47,118 25,762 21,356 47,620 25,970 21,650 49,103 26,840 22,263 50,121 27,510 22,611 50,549 27,697 22,852 51,264 28,176 23,088 51,807 28,583 23,224 33,013 49 Savings 17,530 50 Federal (shares) 51 State (shares and deposits). 15,483 39,173 21,130 18,043 46,832 25,849 20,983 49,931 27,592 22,339 50,789 28,128 22,661 52,076 28,903 23,173 51,551 28,627 22,924 51,772 28,779 22,993 52,867 29,429 23,438 52,468 29,086 23,382 52,600 29,163 23,437 53,048 29,326 23,722 For notes see bottom of page A30. A30 1.39 DomesticNonfinancialStatistics • February 1979 FEDERAL FISCAL A N D FINANCING OPERATIONS Millions of dollars Calendar year Type of account or operation U.S. budget Receipts1 i Outlays 3 Surplus, or deficit Trust funds 2 4 Federal funds 5 1 2 6 7 ( —) Off-budget entities surplus, or deficit ( - ) Federal Financing Bank outlays... Other 3 U.S. budget plus off-budget, including Federal Financing Bank Surplus, or deficit (—) Financed by: Borrowing from the public 9 Cash and monetary assets (de10 crease, or increase ( —)) Other 4 11 8 Transition quarter (JulySept. 1976) Fiscal year 1977 Fiscal year 1978 1977 1978 1978 H2 HI H2 Oct. Nov. Dec. 81,772 94,742 -12,970 -1,952 -11,018 357,762 402,803 -45,041 7,833 -52,874 401,997 450,758 -48,761 12,693 -61,454 175,820 216,781 -40,961 4,293 -45,254 210,650 222,518 -11,870 4,334 -16,204 206,275 238,150 -31,875 11,755 -43,630 28,745 42,691 -13,946 1,626 -15,572 33,227 39,134 -5,907 1,293 -7,200 37,477 41,392 -3,915 1,833 -5,748 -2,575 793 -8,415 -269 -10,660 354 -6,663 428 -5,105 -790 -5,082 1,841 -975 171 -296 1,700 -1,178 453 -14,752 -53,725 -59,067 -47,196 -17,765 -35,117 -14,750 -4,503 -4 M0 18,027 53,516 59,106 40,284 23,374 30,308 6,484 5,236 3,533 -2,899 -373 -2,238 2,440 -3,023 2,984 4,317 2,597 -5,098 -511 3,381 1,428 7,082 1,184 3,485 -4,218 -2,323 3,430 17,418 13,299 4,119 19,104 15,740 3,364 22,444 16,647 5,797 12,274 7,114 5,160 17,526 11,614 5,912 16,291 4,196 12,095 15,545 15,467 78 16,291 4,196 12,095 16,291 4,196 12,095 MEMO ITEMS : 12 Treasury operating balance (level, end of period) 13 Federal Reserve Banks Tax and loan accounts 14 1 Effective June 1978, earned income credit payments in excess of an individual's tax liability, formerly treated as income tax refunds, are classified as outlays retroactive to January 1976. 2 Half years calculated as a residual of total surplus/deficit and trust fund surplus/deficit. 3 Includes Pension Benefit Guaranty Corp.; Postal Service Fund; Rural Electrification and Telephone Revolving Fund, Rural Telephone Bank; and Housing for the Elderly or Handicapped Fund until October 1977. 4 Includes public debt accrued interest payable to the public; deposit funds; miscellaneous liability (including checks outstanding) and asset accounts; seignorage; increment on gold; net gain/loss for U.S. currency valuation adjustment; net gain/loss for IMF valuation adjustment. SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. Government," Treasury Bulletin, and U.S. Budget, Fiscal Year 1978. NOTES TO TABLE 1.38 1 Holdings of stock of the Federal Home Loan Banks are included in "other assets." 2 Includes net undistributed income, which is accrued by most, but not all, associations. 3 Excludes figures for loans in process, which are shown as a liability. 4 Includes securities of foreign governments and international organizations and nonguaranteed issues of U.S. government agencies. 5 Excludes checking, club, and school accounts. 6 Commitments outstanding (including loans in process) of banks in New York State as reported to the Savings Banks Association of the State of New York. 7 Direct and guaranteed obligations. Excludes federal agency issues not guaranteed, which are shown in this table under "business" securities. 8 Issues of foreign governments and their subdivisions and bonds of the International Bank for Reconstruction and Development. 9 Data reflect benchmark revisions back to 1977. Data for June, July, and August 1978 have been revised. n Data for 1977 and the first 6 months of 1978 have been revised by the American Council of Life Insurance. NOTE. Savings and loan associations: Estimates by the FHLBB for all associations in the United States. Data are based on monthly reports of federally insured associations and annual reports of other associations. Even when revised, data for current and preceding year are subject to further revision. Mutual savings banks: Estimates of National Association of Mutual Savings Banks for all savings banks in the United States. Data are reported on a gross-of-valuation-reserves basis. Life insurance companies: Estimates of the American Council of Life Insurance for all life insurance companies in the United States. Annual figures are annual-statement asset values, with bonds carried on an amortized basis and stocks at year-end market value. Adjustments for interest due and accrued and for differences between market and book values are not made on each item separately but are included, in total, in "other assets." Credit unions: Estimates by the National Credit Union Administration for a group of federal and state-chartered credit unions that account for about 30 percent of credit union assets. Figures are preliminary and revised annually to incorporate recent benchmark data. Federal Finance 1.40 A31 U.S. BUDGET RECEIPTS A N D OUTLAYS Millions of dollars Calendar year Source or type Transition quarter (JulySept. 1976) Fiscal year 1977 Fiscal year 1978 1977 H2 1978 1978 HI H2 Oct. Nov. Dec. Receipts 1 All sources1 2 Individual income taxes, net 3 Withheld 4 Presidential Election Campaign Fund 5 Nonwithheld 6 Refunds 1 7 Corporation income taxes: 8 Gross receipts 9 Refunds 10 Social insurance taxes and contributions, net 11 Payroll employment taxes and contributions 2 12 Self-employment taxes and contributions 3 13 Unemployment insurance 14 Other net receipts 4 15 Excise taxes 16 Customs deposits 17 Estate and gift taxes 18 Miscellaneous receipts 5 81,772 357,762 401,997 175,820 210,650 206,275 28,745 33,227 37,477 38,800 32,949 157,626 144,820 180,988 165,215 82,911 75,480 90,336 82,784 98,854 90,148 15,922 15,032 16,609 16,268 16,066 15,454 1 6,809 958 37 42,062 29,293 39 47,804 32,070 1 9,397 1,967 36 37,584 30,068 3 10,777 2,075 1,104 214 533 192 830 219 9,808 1,348 60,057 5,164 65,380 5,428 25,121 2,819 38,496 2,782 28,536 2,757 2,436 752 1,541 493 10,769 382 25,760 108,683 123,410 52,347 66,191 61,064 7,805 11,923 7,716 21,534 88,196 99,626 44,384 51,668 51,052 6,595 9,762 7,059 269 2,698 1,259 4,014 11,312 5,162 4,267 13,850 5,668 316 4,936 2,711 3,892 7,800 2,831 369 6,727 2,917 722 488 1,662 499 174 483 4,473 1,212 1,455 1,612 17,548 5,150 7,327 6,536 18,376 6,573 5,285 7,413 9,284 2,848 2,837 3,292 8,835 3,320 2,587 3,667 9,879 3,748 2,691 4,260 1,635 621 477 602 1,712 646 460 829 1,597 594 386 732 Outlays 8 19 All types1 94,742 402,803 450,758 216,781 222,518 238,150 42,691 39,134 41,392 20 National defense 21 International affairs 22 General science, space, and technology 23 Energy 24 Natural resources and environment. 25 Agriculture 22,307 2,180 97,501 4,831 105,192 6,083 50,873 2,896 52,979 2,904 55,129 2,221 9,197 324 9,239 -47 9,450 339 1,161 794 2,532 584 4,677 4,172 10,000 5,526 4,721 6,045 11,022 7,618 2,318 2,395 2,487 4,959 2,353 2,362 4,461 6,119 4,854 367 821 878 949 412 792 889 1,372 407 747 1,125 1,681 1,391 3,306 -31 14,636 3,340 15,461 -946 7,723 3,291 8,758 2.124 1,695 41 1,414 309 1,374 26 Commerce and housing credit 27 Transportation 28 Community and regional development 29 Education, training, employment, and social services 30 Health 31 Income security1 32 Veterans benefits and services 33 Administration of justice 34 General government 35 General-purpose fiscal assistance— 36 Interest 6 37 Undistributed offsetting receipts 6 - 7 1,340 6,283 11,255 4,924 5,928 6,108 929 910 753 5,162 8,720 32,795 20,985 38,785 137,905 25,889 44,529 145,640 10,800 19,422 71,081 12,792 21,391 75,201 13,676 23,942 73,305 2,144 4,037 11,815 2,244 3,957 12,358 2,210 4,717 12,469 3,962 859 878 2,092 7,246 -2,567 18,038 3,600 3,357 9,499 38,092 -15,053 18,987 3,786 3,544 9,377 44,040 -15,772 9,864 1,723 1,749 4,926 19,962 -8,506 9,603 1,946 1,803 4,665 22,280 -7,945 9,545 1,973 2,111 4,385 24,110 -8,200 1,6 47 328 785 2,019 3,030 -397 1,667 392 196 160 3,850 -713 2,650 309 269 79 7,372 -4,870 1 Effective June 1978, earned income credit payments in excess of an individual's tax liability, formerly treated as income tax refunds, are classified as outlays retroactive to January 1976. 2 Old-age, disability and hospital insurance, and railroad retirement accounts. 3 Old-age, disability, and hospital insurance. 4 Supplementary medical insurance premiums, federal employee retirement contributions, and Civil Service retirement and disability fund. 5 Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts. 6 Effective September 1976, "Interest" and "Undistributed Offsetting Receipts" reflect the accounting conversion for the interest on special issues for U.S. government accounts from an accrual basis to a cash basis. 5,477 7 Consists of interest received by trust funds, rents and royalties on the Outer Continental Shelf, and U.S. government contributions for employee retirement. 8 For some types of outlays the categories are new or represent regroupings; data for these categories are from the Budget of the United States Government, Fiscal Year 1979; data are not available for half-years or for months prior to February 1978. Two categories have been renamed: "Law enforcement and justice" has become "Administration of justice" and "Revenue sharing and general purpose fiscal assistance" has become "General purpose fiscal assistance." In addition, for some categories the table includes revisions in figures published earlier. A32 1.41 DomesticNonfinancialStatistics • February 1979 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1977 1976 1978 Item Mar. 31 June 30 Sept. 30 729.2 747.8 758.8 780.4 718.9 564.1 154.8 738.0 585.2 152.7 749.0 587.9 161.1 771.5 603.6 168.0 10.3 8.5 1.8 10.2 8.4 1.8 9.9 8.1 1.8 9.8 8.0 1.8 8.9 7.4 1.5 675.6 700.0 720.1 739.1 750.2 772.7 718.3 1.7 737.3 1.8 748.4 1.8 770.9 1.8 752.0 752.0 752.0 798.0 Dec. 31 June 30 Sept. 30 Dec. 31 June 30 1 Federal debt outstanding 631.9 2 646.4 665.5 685.2 709.1 2 Public debt securities 3 Held by public 4 Held by agencies 620.4 470.8 149.6 634.7 488.6 146.1 653.5 506.4 147.1 674.4 523.2 151.2 698.8 543.4 155.5 11.5 9.5 2.0 11.6 29.7 1.9 12.0 10.0 1.9 10.8 9.0 1.8 621.6 635.8 654.7 6 7 Held by public Held by agencies 8 Debt subject to statutory limit Sept. 30 10 Other debt1 619.8 1.7 634.1 1.7 652.9 1.7 673.8 1.7 698.2 1.7 11 MEMO: Statutory debt limit 636.0 636.0 682.0 700.0 700.0 1 Includes guaranteed debt of government agencies, specified participation certificates, notes to international lending organizations, and District of Columbia stadium bonds. 2 Gross federal debt and agency debt held by the public increased 1.42 $0.5 billion due to a retroactive reclassification of the Export-Import Bank certificates of beneficial interest from loan asset sales to debt, effective July 1, 1975. NOTE. Data from Treasury Bulletin (U.S. Treasury Department). Types and Ownership GROSS PUBLIC DEBT OF U.S. TREASURY Billions of dollars, end of period Type and holder 1974 1975 1976 Sept. 1 Total gross public debt 2 3 4 5 6 7 8 9 10 11 12 By type: Interest-bearing debt Marketable Bills Notes Nonmarketable1 Convertible bonds 2 State and local government series Foreign issues 3 Savings bonds and notes 4 Government account series 13 Non-interest-bearing debt By holder:5 14 U.S. government agencies and trust funds... 15 16 17 18 19 20 21 22 23 24 25 Commercial banks Mutual savings banks Insurance companies Other corporations State and local governments Individuals: Other securities Foreign and international6 Other miscellaneous investors7 Nov. Oct. Dec. Jan. 492.7 576.6 653.5 718.9 771.5 776.4 783.0 789.2 790.5 491.6 282.9 119.7 129.8 33.4 208.7 2.3 .6 22.8 63.8 119.1 575.7 363.2 157.5 167.1 38.6 212.5 2.3 1.2 21.6 67.9 119.4 652.5 421.3 164.0 216.7 40.6 231.2 2.3 4.5 22.3 72.3 129.7 715.2 459.9 161.1 251.8 47.0 255.3 2.2 13.9 22.2 77.0 139.8 767.0 485.2 160.9 267.9 56.4 281.8 2.2 24.2 21.7 80.2 153.3 775.5 491.7 161.2 272.6 57.8 283.8 2.2 24.1 24.0 80.5 152.7 782.0 493.3 161.5 271.7 60.1 288.7 2.2 24.1 26.6 80.7 154.8 782.4 487.5 161.7 265.8 60.0 294.8 2.2 24.3 28.0 80.9 157.5 789.5 496.5 162.3 272.8 61.4 293.0 2.2 24.2 27.5 80.8 155.2 1.1 1.0 1.1 3.7 4.6 .9 1.0 6.8 1.0 138.2 80.5 139.1 89.8 147.1 97.0 154.8 102.5 168.0 114.8 166.3 115.3 167.4 113.3 271.0 55.6 2.5 6.2 29.2 349.4 85.1 4.5 9.5 20.2 34.2 409.5 103.8 5.9 12.7 27.7 41.6 461.3 101.4 5.9 15.1 22.7 55.2 488.3 95.3 5.4 15.1 21.5 67.8 494.7 94.3 5.4 15.3 21.0 67.1 502.3 93.5 5.3 15.1 20.9 69.1 63.4 21.5 67.3 24.0 72.0 28.8 76.7 28.6 79.8 29.4 80.2 29.6 80.5 29.8 58.8 22.8 66.5 38.0 78.1 38.9 109.6 46.1 121.0 52.9 122.5 54.3 132.4 55.8 11.0 1 Includes (not shown separately): Securities issued to the Rural Electrification Administration and to state and local governments, depositary bonds, retirement plan bonds, and individual retirement bonds. 2 These nonmarketable bonds, also known as Investment Series B Bonds, may be exchanged (or converted) at the owner's option for IVi percent, 5-year marketable Treasury notes. Convertible bonds that have been so exchanged are removed from this category and recorded in the notes category above. 3 Nonmarketable foreign government dollar-denominated and foreign currency denominated series. 4 Held almost entirely by U.S. government agencies and trust funds. 5 Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual holdings; data for other groups are Treasury estimates. 1979 1978 1977 n.a. n. a. 6 Consists of the investments of foreign balances and international accounts in the United States. Beginning with July 1974, the figures exclude non-interest-bearing notes issued to the International Monetary Fund. 7 Includes savings and loan associations, nonprofit institutions, corporate pension trust funds, dealers and brokers, certain government deposit accounts, and government sponsored agencies. NOTE. Gross public debt excludes guaranteed agency securities and, beginning in July 1974, includes Federal Financing Bank security issues. Data by type of security from Monthly Statement of the Public Debt of the United States (U.S. Treasury Department); data by holder from Treasury Bulletin. Federal Finance 1.43 U.S. GOVERNMENT MARKETABLE SECURITIES A33 Ownership, by maturity Par value; millions of dollars, end of period Type of holder 1976 1978 1977 Oct. 1976 Nov. Oct. All maturities 1 All holders 3 Federal Reserve Banks 9 Savings and loan associations 13 U.S. government agencies and trust funds 20 Savings and loan associations 22 All others 421,276 459,927 491,651 493,337 141,132 151,264 171,802 168,795 16,485 96,971 14,420 101,191 13,885 115,322 12,776 113,305 6,141 31,249 4,788 27,012 3,705 32,033 3,310 31,608 307,820 78,262 4,072 10,284 14,193 4,576 12,252 184,182 344,315 75,363 4,379 12,378 9,474 4,817 15,495 222,409 362,443 69,906 3,744 11,994 8,791 4,312 17,594 246,102 367,256 69,332 3,642 11,732 8,731 4,173 19,146 250,500 103,742 40,005 2,010 3,885 2,618 2,360 2,543 50,321 119,464 38,691 2,112 4,729 3,183 2,368 3,875 64,505 136,064 40,841 2,080 4,981 4,522 2,546 4,316 133,876 40,042 1,997 4,806 3,523 2,464 4,281 76,763 24 U.S. government agencies and trust funds 25 Federal Reserve Banks 27 Commercial banks 30 31 Nonfinancial corporations Savings and loan associations 33 All others 16,111 5 to 10 years 211,035 230,691 227,101 228,284 43,045 45,328 49,271 50,402 2,012 51,569 1,906 56,702 2,281 59,483 1,488 56,304 2,879 9,148 2,129 10,404 1,987 13,807 1,989 14,717 J57,454 31,213 1,214 2,191 11,009 1,984 6,622 103,220 172,084 29,477 1,400 2,398 5,770 2,236 7,917 122,885 165,337 19,116 845 1,788 3,725 1,563 7,202 131,097 170,492 19,342 863 1,799 4,686 1,540 8,366 133,895 31,018 6,278 567 2,546 370 155 1,465 19,637 32,795 6,162 584 3,204 307 143 1,283 21,112 33,476 7,354 543 2,970 361 131 1,595 20,521 33,695 7,408 507 2,894 292 90 1,557 20,946 10 to 20 years Bills, within 1 year 23 All holders Nov. 1 to 5 years Total, within 1 year 12 All holders 1978 1977 163,992 161,081 161,227 161,548 11,865 12,906 18,052 19,912 449 41,279 32 42,004 2 48,450 2 45,985 3,102 1,363 3,102 1,510 3,273 2,033 3,957 2,077 122,264 17,303 454 1,463 9,939 1,266 5,556 86,282 119,035 11,996 484 1,187 4,329 806 6,092 94,152 112,775 4,545 195 818 1,358 290 4,774 100,796 115,561 4,431 161 766 2,083 278 5,876 101,966 7,400 339 139 1,114 142 64 718 4,884 8,295 456 137 1,245 133 54 890 5,380 12,746 1,212 151 1,354 132 55 1,133 8,702 13,879 1,067 143 1,463 70 60 1,365 9,710 Over 20 years Other, within 1 year 34 All holders 47,043 69,610 65,874 66,736 14,200 19,738 25,425 25,944 35 U.S. government agencies and trust funds 36 Federal Reserve Banks 1,563 10,290 1,874 14,698 2,279 11,033 1,487 10,319 2,350 3,642 2,495 5,564 2,639 7,966 2,032 8,599 35,190 13,910 760 728 1,070 718 1,066 16,938 53,039 15,482 916 1,211 1,441 1,430 r \,825 28,733 52,561 14,571 650 970 2,368 1,273 2,428 30,301 54,931 14,911 702 1,033 2,603 1,262 2,490 31,929 8,208 427 143 548 55 13 904 6,120 11,679 578 146 802 81 16 1,530 8,526 14,820 1,383 118 900 51 17 3,347 9,003 15,314 1,473 131 770 159 17 3,577 9,186 38 39 40 Commercial banks Mutual savings banks Insurance companies 42 43 44 Savings and loan associations State and local governments All others NOTE. Direct public issues only. Based on Treasury Survey of Ownership from Treasury Bulletin (U.S. Treasury Department). Data complete for U.S. government agencies and trust funds and Federal Reserve Banks, but data for other groups include only holdings of those institutions that report. The following figures show, for each category, the number and proportion reporting as of Nov. 31, 1978: (1) 5,464 commercial banks 464 mutual savings banks, and 727 insurance companies, each about 80 percent; (2) 435 nonfinancial corporations and 485 savings and loan associations, each about 50 percent; and (3) 493 state and local governments, about 40 percent. "All others," a residual, includes holdings of all those not reporting in the Treasury Survey, including investor groups not listed separately. A34 1.44 DomesticNonfinancialStatistics • February 1979 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars Item 1 U.S. government securities. . 2 3 4 5 6 By maturity: Bills Other within 1 year 1-5 years 5-10 years Over 10 years 1975 1976 1978 1977 1978, week ending Wednesday— Oct. Nov. Dec. Nov. 8 Nov. 15 Nov. 22 Nov. 29 Dec. 6 Dec. 13 6,027 10,449 10,838 9,817 11,844 8,837 12,871 13,354 10,326 9,824 8,079 9,083 3,889 223 1,414 363 138 6,676 210 2,317 1,019 229 6,746 237 2,320 1,148 388 6,289 420 1,520 691 897 6,573 449 2,301 1,207 1,314 5,336 400 1,676 738 687 6,075 333 2,508 1,709 2,246 7,661 577 2,081 1,518 1,517 6,155 487 1,933 877 875 5,972 392 1,973 816 670 4,977 285 1,347 705 766 5,723 459 1,157 888 856 By type of customer: U.S. government securities dealers 8 U.S. government securities brokers 9 Commercial banks 10 All others i 885 1,360 1,267 983 908 954 949 1,045 937 664 666 923 1,750 1,451 1,941 3,407 2,426 3,257 3,709 2,295 3,568 4,052 1,404 3,377 5,321 1,834 3,780 3,303 1,514 3,066 5,927 1,920 4,075 5,754 2,115 4,440 4,850 1,502 3,038 4,124 1,630 3,406 3,547 1,255 2,612 3,648 1,437 3,075 11 Federal agency securities 1,043 1,548 1,729 2,029 2,208 2,325 2,123 2,514 2,060 1,979 2,300 2,313 7 1 Includes, among others, all other dealers and brokers in commodities and securities, foreign banking agencies, and the Federal Reserve System. Transactions are market purchases and sales of U.S. government securities dealers reporting to the Federal Reserve Bank of New York. Thefiguresexclude allotments of, and exchanges for, new U.S. government securities, redemptions of called or matured securities, or purchases or sales of securities under repurchase, reverse repurchase (resale), or similar contracts. NOTE. Averages for transactions are based on number of trading days in the period. 1.45 U.S. GOVERNMENT SECURITIES DEALERS Positions and Sources of Financing Par value; averages of daily figures, in millions of dollars Item 1975 1976 1978 1977 Oct. Nov. 1978, week ending Wednesday— Dec. Oct. 18 Oct. 25 Nov. 1 Nov. 8 Nov. 15 Nov. 22 Positions2 1 U.S. government securities. . 5,884 7,592 5,172 1,424 2,417 2,134 1,232 •1,177 2,018 2,904 2,548 1,894 2 3 4 5 6 4,297 265 886 300 136 6,290 188 515 402 198 4,772 99 60 92 149 1,739 462 -593 -207 23 1,958 60 -228 413 213 1,922 97 -73 211 -24 1,759 518 -888 -195 38 r 2,007 364 94 -279 -167 1,869 389 -35 536 144 1,880 181 -491 673 305 1,690 -110 -326 393 247 939 729 693 234 217 370 204 69 97 169 139 325 Bills Other within 1 year 1-5 years 5-10 years Over 10 years 7 Federal agency securities.... l,493 540 -660 - 2 r4 7 52 r Sources of financing3 8 All sources 9 10 11 12 Commercial banks: New York City Outside New York City... Corporations1 All others 6,666 8,715 9,877 10,430 11,396 11,918 10,426 10,275 11,071 11,811 10,881 11,355 1,621 1,466 842 2,738 1,896 1,660 1,479 3,681 1,313 1,987 2,423 4,155 385 2,105 2,396 5,543 347 2,032 3,007 6,010 638 2,210 2,890 6,179 234 2,278 2,530 5,384 460 1,811 2,632 5,371 139 2,244 2,503 6,184 825 1,896 2,890 6,201 348 1,930 3,051 5,553 304 2,134 3,000 5,916 1 All business corporations except commercial banks and insurance companies. 2 New amounts (in terms of par values) of securities owned by nonbank dealer firms and dealer departments of commercial banks on a commitment, that is, trade-date basis, including any such securities that have been sold under agreements to repurchase. The maturities of some repurchase agreements are sufficiently long, however, to suggest that the securities involved are not available for trading purposes. Securities owned, and hence dealer positions, do not include securities purchased under agreements to resell. 3 Total amounts outstanding of funds borrowed by nonbank dealer firms and dealer departments of commercial banks against U.S. government and federal agency securities (through both collateral loans and sales under agreements to repurchase), plus internal funds used by bank dealer departments to finance positions in such securities. Borrowings against securities held under agreement to resell are excluded where the borrowing contract and the agreement to resell are equal in amount and maturity, that is, a matched agreement. NOTE. Averages for positions are based on number of trading days in the period; those for financing, on the number of calendar days in the period. Federal Finance 1.46 FEDERAL A N D FEDERALLY SPONSORED CREDIT AGENCIES A35 Debt Outstanding Millions of dollars, end of period Agency 1 Federal and federally sponsored agencies 3 4 5 6 7 8 9 Defense Department12 3 Export-Import Bank Federal Housing Administration4 Government National Mortgage Association participation certificates5 Postal Service6 Tennessee Valley Authority United States Railway Association6 10 Federally sponsored agencies 11 Federal Home Loan Banks 12 Federal Home Loan Mortgage Corporation.. 13 Federal National Mortgage Association 15 16 17 18 Federal Intermediate Credit Banks Banks for Cooperatives Student Loan Marketing Association7 Other MEMO ITEMS : 19 Federal Financing Bank debt6*8 Lending to federal and federally sponsored agencies: 20 Export-Import Bank3 21 Postal Service6 22 Student Loan Marketing Association7 23 Tennessee Valley Authority 24 United States Railway Association6 25 26 27 Other lending:9 Farmers Home Administration Rural Electrification Administration Other 1975 1976 June July Aug. Sept. Oct. Nov. 97,680 103,325 109,924 120,387 122,638 123,297 125,397 127,468 129,139 19,046 1,220 7,188 564 21,896 1,113 7,801 575 r22,760 983 '8,671 581 r23,131 926 '8,603 606 '23,286 916 r 8.596 603 r22,505 906 '8,274 603 '23,139 897 '8,709 601 '23,279 897 '8,704 598 23,073 876 8,392 594 4,200 1,750 3,915 209 4,120 2,998 5,185 104 3,743 2,431 6,015 336 3,701 2,364 6,575 356 3,666 2,364 6,785 356 3,166 2,364 6,835 357 3,166 2,364 7,045 357 3,166 2,364 7,195 355 3,166 2,364 7,325 356 78,634 18,900 1,550 29,963 15,000 9,254 3,655 310 2 81,429 16,811 1,690 30,565 17,127 10,494 4,330 410 2 87,164 18,345 1,686 31,890 19,118 11,174 4,434 515 2 97,256 22,306 1,937 36,404 19,686 11,257 4,974 690 2 99,352 23,430 1,937 36,900 20,198 11,392 4,788 705 2 100,792 24,360 1,937 37,518 20,198 11,482 4,570 725 2 102,258 25,025 2,063 38,353 20,198 11,555 4,317 745 2 104,189 25,395 2,063 39,776 20,360 11,554 4,264 775 2 106,066 26,777 2,062 39,814 20,360 11,548 4,668 835 2 17,154 28,711 38,580 44,504 45,550 46,668 48,078 49,212 49,645 4,595 1,500 310 1,840 209 5,208 2,748 410 3,110 104 5,834 2,181 515 4,190 336 6,132 2,114 690 4,750 356 6,132 2,114 705 4,960 356 6,132 2,114 725 5,010 357 6,568 2,114 745 5,220 357 6,568 2,114 775 5,370 355 6,568 2,114 835 5,500 356 7,000 566 1,134 10,750 1,415 4,966 16,095 2,647 6,782 20,910 3,602 5,950 21,580 3,684 6,019 22,275 3,919 6,136 22,275 4,192 6,607 23,050 4,407 6,573 23,050 4,489 6,733 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 Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter. 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 prior to fiscal 1969 by the Government National Mortgage Association acting as trustee for the Farmers Home Administration; Department of Health, Education, and Welfare; Department of Housing and Urban Development; Small Business Administration; and the Veterans Administration. 6 Off-budget. 1978 1977 7 Unlike other federally sponsored agencies, the Student Loan Marketing Association may borrow from the Federal Financing Bank (FFB) since its obligations are guaranteed by the Department of Health, Education, and Welfare. 8 The FFB, which began operations in 1974, is authorized to purchase or sell obligations issued, sold, or guaranteed by other federal agencies. Since 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. 9 Includes FFB purchases of agency assets and guaranteed loans; the latter contain loans guaranteed by numerous agencies with the guarantees of any particular agency being generally small. The Farmers Home Administration item consists exclusively of agency assets, while the Rural Electrification Administration entry contains both agency assets and guaranteed loans. A36 DomesticNonfinancialStatistics • February 1979 1.47 NEW SECURITY ISSUES of State and Local Governments Millions of dollars Type of issue or issuer, or use 1 By type of issue: General obligation 2 3 4 Housing Assistance Administration 5 2 By type of issuer: 6 7 8 10 11 12 13 14 15 Special district and statutory authority Municipalities, counties, townships, school districts.... By use of proceeds: Other purposes 1977 1976 July Aug. r Sept. r Oct. r Nov. r Dec. 35,313 46,769 48,607 3,923 6,416 2,330 3,244 4,328 3,694 18,040 17,140 18,042 28,655 17,854 30,658 1,065 2,855 2,161 4,246 703 1,620 1,148 2,083 1,168 3,152 1,698 1,992 133 72 95 3 9 7 13 8 4 7,054 15,304 12,845 6,354 21,717 18,623 6.632 24,156 17,718 650 2,171 1,098 919 3,120 2,369 85 1,599 639 552 1,616 1,061 343 2,848 1,129 497 2,148 1,043 32,108 36,189 37,629 3,497 3,365 2,266 3,160 4,216 3,379 4,900 2,586 9,594 6,566 483 7,979 5,076 2,951 8,119 8,274 4,676 7,093 5,003 3,460 9,026 10,494 3,526 6,120 499 292 941 1,241 244 280 277 632 689 967 344 456 397 302 695 526 105 241 314 422 831 1,169 249 175 463 259 1,241 817 323 1,113 319 337 705 1,126 276 616 1 Par amounts of long-term issues based on date of sale. 2 Only bonds sold pursuant to the 1949 Housing Act, which are secured by contract requiring the Housing Assistance Administration to make annual contributions to the local authority. 1.48 1978 1978 SOURCE. Public Securities Association. NEW SECURITY ISSUES of Corporations Millions of dollars 1978 Type of issue or issuer, or use 1 1976 1975 1977 April May June July Aug. Sept. 53,619 53,488 54,205 3,285 4,035 5,215 4,226 3,311 3,832 2 Bonds 42,756 42,380 42,193 2,811 2,996 3,810 3,718 2,529 2,905 By type of offering: 3 Public 4 Private placement 32,583 10,172 26,453 15,927 24,186 18,007 1,958 853 1,719 1,277 1,744 2,066 2,177 1,541 1,497 1,032 1,610 16,980 2,750 3,439 9,658 3,464 6,469 13,264 4,372 4,387 8,297 2,787 9,274 12,510 5,887 2,033 8,261 3,059 10,438 534 421 291 505 35 1,027 837 314 244 885 714 1,105 562 225 815 344 761 675 417 235 768 326 1,296 485 414 115 521 546 448 823 454 135 912 205 375 10,863 11,108 12,013 474 1,039 1,405 508 782 927 3,458 7,405 2,803 8,305 3,878 8,135 235 239 390 649 586 819 57 451 157 625 800 1,670 1,470 2,237 1,183 24 6,121 776 771 1,265 1,838 418 6,058 1,379 1,054 15 183 28 238 41 90 366 245 38 429 5 320 167 167 40 31 27 76 236 148 354 6 75 426 1 All issues 5 6 7 8 9 10 By industry group: Manufacturing Commercial and miscellaneous Transportation Public utility Communication Real estate and financial 11 Stocks By type: 12 Preferred 13 Common 14 15 16 17 18 19 By industry group: M anufacturing Commercial and miscellaneous Transportation Public utility Communication Real estate and financial 6,235 1,002 488 1 Figures, which represent gross proceeds of issues maturing in more than 1 year, sold for cash in the United States, are principal amount or number of units multiplied by offering price. Excludes offerings of less than $100,000, secondary offerings, undefined or exempted issues as defined in the Securities Act of 1933, employee stock plans, investment 10 20 800 110 1,295 127 168 12 10 164 companies other than closed-end, intracorporate transactions, and sales to foreigners. SOURCE. Securities and Exchange Commission. Corporate Finance 1.49 OPEN-END INVESTMENT COMPANIES A37 Net Sales and Asset Position Millions of dollars 1978 Item 1977 1978 6,401 6,027 357 6,645 7,231 -586 487 757 -270 474 645 -181 638 882 -244 519 673 -154 463 607 -144 587 439 148 602 545 57 45,049 3,274 41,775 45,184 4,522 40,662 46,106 4,493 41,613 47,975 4,285 43,690 49,299 3,948 45,351 48,151 3,703 44,448 43,462 3,793 39,669 44,242 4,299 39,943 45,184 4,522 40,662 June July Oct. Sept. Aug. Nov. r Dec. INVESTMENT COMPANIES excluding money market funds 1 2 3 Sales of own shares1 Redemptions of own shares2 Net sales 4 5 6 Assets3 Cash position 4 Other 1 Includes reinvestment of investment income dividends. Excludes reinvestment of capital gains distributions and share issue of conversions from one fund to another in the same group. 2 Excludes share redemption resulting from conversions from one fund to 3another in the same group. Market value at end of period, less current liabilities. 1.50 4 Also includes all U.S. government securities and other short-term debt securities. NOTE. Investment Company Institute data based on reports of members, which comprise substantially all open-end investment companies registered with the Securities and Exchange Commission. Data reflect newly formed companies after their initial offering of securities. CORPORATE PROFITS A N D THEIR DISTRIBUTION Billions of dollars; quarterly data are at seasonally adjusted annual rates. Account 1975 1976 1977 1977 Ql 1978 Q2 Q3 Q4 Ql Q2 Q3 1 Profits before tax 120.4 155.9 173.9 164.8 175.1 177.5 178.3 172.1 205.5 205.4 2 Profits tax liability 3 Profits after tax 49.8 70.6 64.3 91.6 71.8 102.1 68.3 96.5 72.3 102.8 72.8 104.7 73.9 104.4 70.0 102.1 85.0 120.5 86.2 119.2 4 Dividends 5 Undistributed profits 31.9 38.7 37.9 53.7 43.7 58.4 41.5 55.0 42.7 60.1 44.1 60.6 46.3 58.1 47.0 55.1 48.1 72.4 50.1 69.1 89.2 127.9 97.1 150.8 106.0 164.4 102.0 157.0 105.0 165.1 107.6 168.2 109.3 167.4 111.3 166.4 113.3 185.7 115.4 184.5 6 Capital consumption allowances 7 Net cash flow SOURCE. Survey of Current Business (U.S. Department of Commerce.) A38 1.51 DomesticNonfinancialStatistics • February 1979 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, except for ratio 1976 1974 Account 1977 1978 1975 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 1 Current assets 734.6 756.3 823.1 842.0 856.4 880.3 900.1 924.2 953.5 992.4 2 3 4 5 6 73.0 11.3 265.5 318.9 65.9 80.0 19.6 272.1 314.7 69.9 86.8 26.0 292.4 341.4 76.4 80.8 26.8 304.1 352.1 78.3 83.1 22.1 312.8 358.8 79.6 83.4 21.5 326.9 367.5 81.0 94.2 20.9 325.7 375.0 84.3 88.5 20.9 338.3 389.7 86.8 90.9 19.7 356.8 399.1 87.0 91.4 18.6 377.8 415.5 89.0 7 Current liabilities 451.8 446.9 487.5 502.6 509.5 528.9 543.2 570.4 590.8 624.5 8 9 272.3 179.5 261.2 185.7 273.2 214.2 280.2 222.4 286.8 222.7 297.8 231.1 306.8 236.3 317.2 253.2 331.3 259.4 349.9 274.6 282.8 309.5 335.6 339.5 346.9 351.4 357.0 353.8 362.7 367.9 1.664 1.657 1.620 1.614 1.589 Cash U.S. government securities Notes and accounts receivable Inventories Other Notes and accounts payable Other 10 Net working capital 1.693 1.626 1.688 1 Ratio of total current assets to total current liabilities. 1.675 1.681 j SOURCE. Federal Trade Commission. NOTE. For a description of this series see "Working Capital of Nonfinancial Corporations" in the July 1978 BULLETIN, pp. 533-37. 1.52 BUSINESS EXPENDITURES on New Plant and Equipment Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1977 1977 Industry 1 All industries Manufacturing 2 Durable goods industries 3 Nondurable goods industries 4 5 6 7 8 9 10 11 Nonmanufacturing Mining Transportation: Railroad Air Other Public utilities: Electric Gas and other Communication Commercial and other1 1 2 | 1978 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 135.72 152.28 130.16 134.24 140.38 138.11 144.25 150.76 155.13 158.98 27.75 32.33 31.53 36.23 26.30 30.13 27.26 32.19 29.23 33.79 28.19 33.22 28.72 32.86 31.40 35.80 32.11 36.54 33.89 39.72 4.49 4.78 4.24 4.49 4.74 4.50 4.45 4.81 4.80 5.07 2.S2 i.63 2.55 328 2.45 2.27 2.71 1.62 2.96 2.57 1.43 2.96 3.20 1.69 1.96 2.80 1.76 2.32 3.35 2.67 2.44 3.09 2.08 2.23 3.64 2.97 2.37 3.05 2.08 2.05 21.57 4.21 15.43 22.95 24.49 4.48 21.19 4.16 14.19 22.67 21.14 4.16 15.32 22.73 21.90 4.32 16.40 23.14 22.05 4.18 15.82 23.27 23.15 4.78 17.07 24.76 23.83 4.62 18.18 24.71 25.04 4.22 } 43.44 25.94 4.28 42.90 Includes trade, service, construction, finance, and insurance. Anticipated by business. NOTE. Estimates for corporate and noncorporate business, excluding 1978 2 agriculture; real estate operators; medical, legal, educational, and cultural service; and nonprofit organizations. Source. Survey of Current Business (U.S. Dept. of Commerce). Corporate Finance 1.521 DOMESTIC FINANCE COMPANIES A39 Assets and Liabilities Billions of dollars, end of period 1973 1972 Account 1974 1975 1977 1976 1978 Q3 Q4 QL Q2 Q3 ASSETS 1 2 3 4 5 6 7 8 Accounts receivable, gross Consumer Business Total LESS: Reserves for unearned income and losses Accounts receivable, net Cash and bank deposits Securities All other 9 Total assets 31.9 27.4 59.3 7.4 51.9 2.8 .9 10.0 35.4 32.3 67.7 8.4 59.3 2.6 .8 10.6 36.1 37.2 73.3 9.0 64.2 3.0 .4 12.0 36.0 39.3 75.3 9.4 65.9 2.9 1.0 11.8 38.6 44.7 83.4 10.5 72.9 2.6 1.1 12.6 42.3 50.6 92.9 11.7 81.2 2.5 1.8 14.2 44.0 55.2 99.2 12.7 86.5 2.6 .9 14.3 44.5 57.6 102.1 12.8 89.3 2.2 1.2 15.0 47.1 59.5 106.6 14.1 92.6 2.9 1.3 16.2 49.7 58.3 108.0 14.3 93.7 2.7 1.8 17.1 65.6 73.2 79.6 81.6 89.2 99.6 104.3 107.7 112.9 115.3 5.6 17.3 7.2 19.7 9.7 20.7 8.0 22.2 6.3 23.7 5.4 25.7 5.9 29.6 5.8 29.9 5.4 31.3 5.4 29.3 4.3 22.7 4.8 4.6 24.6 5.6 4.9 26.5 5.5 4.5 27.6 6.8 5.4 32.3 8.1 5.4 34.8 13.7 6.2 36.0 11.5 5.3 38.0 12.9 6.6 40.1 13.6 6.8 41.3 15.2 LIABILITIES 10 Bank loans 11 Commercial paper Debt: 12 Short-term, n.e.c 13 Long-term, n.e.c 14 Other 15 Capital, surplus, and undivided profits 10.9 11.5 12.4 12.5 13.4 14.6 15.1 15.7 16.0 17.3 16 Total liabilities and capital 65.6 73.2 79.6 81.6 89.2 99.6 104.3 107.7 112.9 115.3 NOTE. Components may not add to totals due to rounding. 1.522 DOMESTIC FINANCE COMPANIES Business Credit Millions of dollars, seasonally adjusted except as noted Type Accounts receivable outstanding Nov. 30, 19781 Changes in accounts receivable during— Extensions Repayments 1978 1978 1978 Sept. Oct. Nov. Sept. Oct. Nov. Sept. Oct. Nov. 1 Total 61,699 -234 704 1,210 15,530 15,078 16,293 15,764 14,374 15,083 2 Retail automotive (commercial vehicles) 3 Wholesale automotive 4 Retail paper on business, industrial, and farm equipment 5 Loans on commercial accounts receivable... 6 Factored commercial accounts receivable.... 7 All other business credit 14,261 11,914 209 -506 214 103 229 591 1,202 6,119 1,237 6,171 1,260 6,946 993 6,625 1,023 6,068 1,031 6,355 16,551 4,048 2,629 12,296 -154 150 83 -16 160 -202 291 138 226 -49 209 4 1,198 3,454 1,584 1,973 1,041 3,233 1,543 1,853 1,159 3,310 1,776 1,842 1,352 3,304 1,501 1,989 881 3,435 1,252 1,715 933 3,359 1,567 1,838 i Not seasonally adjusted. A40 1.53 DomesticNonfinancialStatistics • February 1979 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1978 Item 1976 1977 1978 July Aug. Sept. Oct. Nov. Dec. Terms and yields in primary and secondary markets PRIMARY MARKETS 1 2 3 4 5 6 7 8 Conventional mortgages on new homes Terms:1 Amount of loan (thous. dollars) Loan/price ratio (percent) Maturity (years) Fees and charges (percent of loan amount)2. Contract rate (percent per annum) Yield (percent per annum): FHLBB series 3 HUD series4 48.4 35.9 74.2 27.2 1.44 8.76 54.3 40.5 76.3 27.9 1.33 8.80 62.6 45.9 75.3 28.0 1.39 9.30 61.9 45.3 75.3 28.2 1.40 9.34 63.6 46.4 75.3 28.0 1.43 9.45 64.6 46.7 74.1 27.8 1.36 9.50 66.8 48.6 74.4 28.0 1.37 9.60 65.1 47.5 74.4 27.9 1.40 9.63 68.1 49.6 75.1 28.1 1.49 9.76 8.99 8.99 9.01 8.95 9.54 9.68 9.57 9.80 9.70 9.80 9.73 9.80 9.83 9.95 9.87 10.10 10.02 10.30 8.82 8.17 7.96 8.04 8.08 8.98 9.92 9.16 9.78 8.95 9.78 '"9.04 9.93 '9.25 r 9.99 9.39 10.16 9.54 8.99 9.11 8.73 8.98 9.77 10.01 10.01 10.19 9.81 10.11 9.78 10.02 10.03 10.19 10.30 10.56 10.50 10.85 SECONDARY MARKETS 9 10 11 12 Yields (percent per annum): FHA mortgages (HUD series) 5 FNMA auctions:7 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION 13 14 15 16 17 18 19 20 Mortgage holdings (end of period) Total Mortgage transactions (during period) Sales Mortgage commitments:8 Contracted (during period) Outstanding (end of period) Auction of 4-month commitments to buy— Government-underwritten loans: Offered 9 Accepted Conventional loans: Offered 9 23 24 Accepted 21 22 32,904 18,916 9,212 4,776 3,606 86 34,370 18,457 9,315 6,597 43,311 21,243 10,544 11,524 39,409 19,763 10,457 9,189 40,325 20,034 10,535 9,752 41,189 20,325 10,575 10,289 41,957 20,625 10,565 10,767 42,590 20,929 10,535 11,126 43,311 21,243 10,544 11,524 r 12,303 5 945 1,230 1,132 1,053 920 974 n.a. n.a. n.a. 927 10,171 527 9,419 882 9,068 1,900 9,547 1,275 9,525 n.a. n.a. 4,780 '67 6,247 3,398 1,333 4,698 4,929.8 2,787.2 '7,974.1 '4,846.2 12,978 6,747.2 756.7 471.5 499.1 277.2 717.9 335.9 1,964.8 832.4 788.0 321.8 627.0 319.6 2,595.7 '5,675.2 1,879.2 '3,917.8 9,933.0 5,110.9 316.0 178.9 224.7 128.5 484.7 283.7 1,156.8 495.6 861.4 386.8 417.4 220.9 FEDERAL HOME LOAN MORTGAGE CORPORATION 25 26 27 28 29 30 31 Mortgage holdings (end of period)1 o Total FHA/VA Mortgage transactions (during period) Purchases Sales Mortgage commitments:11 Contracted (during period) 4,269 1,618 2,651 3,276 1,395 1,881 3,064 1,243 1,822 2,024 1,321 702 2,448 1,304 1,144 2,486 1,287 1,199 2,867 1,594 1,273 3,022 1,257 1,766 3,064 1,243 1,822 1,175 1,396 '3,900 '4,131 6,524 6,211 520 725 742 299 670 594 791 369 763 581 596 540 1,477 333 '5,546 1,063 7,451 1,410 737 2,055 838 2,142 760 2,130 547 1,716 706 1,617 455 1,410 1 Weighted averages based on sample surveys of mortgages originated by major institutional lender groups. Compiled by the Federal Home Loan Bank Board in cooperation with the Federal Deposit Insurance Corporation. 2 Includes all fees, commissions, discounts, and "points" paid (by the borrower or the seller) in order to obtain a loan. 3 Average effective interest rates on loans closed, assuming prepayment at the end of 10 years. 4 Average contract rates on new commitments for conventional first mortgages, rounded to the nearest 5 basis points; from Dept. of Housing and Urban Development. 5 Average gross yields on 30-year, minimum-downpayment, Federal Housing Administration-insured first mortgages for immediate delivery in the private secondary market. Any gaps in data are due to periods of adjustment to changes in maximum permissible contract rates. 6 Average net yields to investors on Government National Mortgage Association-guaranteed, mortgage-backed, fully-modified pass-through securities, assuming prepayment in 12 years on pools of 30-year FHA/VA mortgages carrying the prevailing ceiling rate. Monthly figures are unweighted averages of Monday quotations for the month. 7 Average gross yields (before deduction of 38 basis points for mortgage servicing) on accepted bids in Federal National Mortgage Association's auctions of 4-month commitments to purchase home mortgages, assuming prepayment in 12 years for 30-year mortgages. No adjustments are made for FN MA commitment fees or stock related requirements. Monthly figures are unweighted averages for auctions conducted within the month. 8 Includes some multifamily and nonprofit hospital loan commitments in addition to 1- to 4-family loan commitments accepted in FNMA's free market auction system, and through the FNMA-GNMA tandem plans. 91 0Mortgage amounts offered by bidders are total bids received. Includes participations as well as whole loans. 11 Includes conventional and government-underwritten loans. Real Estate Debt 1.54 A41 MORTGAGE DEBT OUTSTANDING Millions of dollars, end of period Type of holder, and type of property 1 All holders 2 1- to 4-family 3 Multifamily 4 Commercial 5 Farm 6 Major financial institutions 7 Commercial banks1 8 1- to 4-family 9 Multifamily 10 Commercial 11 Farm 12 13 14 15 16 Mutual savings banks 1- to 4-family Multifamily Commercial Farm 17 18 19 20 Savings and loan associations 1- to 4-family Multifamily Commercial 21 22 23 24 25 Life insurance companies 1- to 4-family Multifamily Commercial Farm 26 Federal and related agencies 27 Government National Mortgage Assn. 28 1-to 4-family 29 Multifamily 1973 1974 1975 1976 1978 1977 Q4 Ql Q2 Q3*> 682,321 416,211 93,132 131,725 41,253 742,512 449,371 99,976 146,877 46,288 801,537 490,761 100,601 159,298 50,877 889,327 556,557 104,516 171,223 57,031 1,023,417 656,116 111,804 189,829 65,668 1,052,307 675,514 114,202 194,545 68,046 1,090,234 701,392 116,793 201,054 71,004 1,128,398 727,096 119,422 208,017 73,863 505,400 119,068 67,998 6,932 38,696 5,442 542,560 132,105 74,758 7,619 43,679 6,049 581,193 136,186 77,018 5,915 46,882 6,371 647,650 151,326 86,234 8,082 50,289 6,721 745,011 178,979 105,115 9,215 56,898 7,751 764,614 184,423 108,699 9,387 58,407 7,930 792,762 193,223 113,886 9,816 61,194 8,327 819,264 202,423 119,308 10,283 64,107 8,725 73,230 48,811 12,343 12,012 64 74,920 49,213 12,923 12,722 62 77,249 50,025 13,792 13,373 59 81,639 53,089 14,177 14,313 60 88,104 57,637 15,304 15,110 53 89,800 58,747 15,398 15,401 54 91,535 59,882 15,900 15,698 55 93,511 61,175 16,243 16,037 56 231,733 187,078 22,779 21,876 249,301 200,987 23,808 24,506 278,590 223,903 25,547 29,140 323,130 260,895 28,436 33,799 381,163 310,686 32,513 37,964 392,479 319,910 33,478 39,091 407,964 332,532 34,779 40,633 420,947 343,114 35,907 41,926 81,369 20,426 18,451 36,496 5,996 86,234 19,026 19,625 41 ,256 6,327 89,168 17,590 19,629 45,196 6,753 91,555 16,088 19,178 48,864 7,425 96,765 14,727 18,807 54,388 8,843 97,963 14,476 18,851 55,426 9,210 100,040 14,129 18,745 57,463 9,703 102,383 13,929 18,945 59,309 10,200 46,721 4,029 1,455 2,574 58,320 4,846 2,248 2,598 66,891 7,438 4,728 2,710 66,753 4,241 1,970 2,271 70,006 3,660 1,548 2,112 72,014 3,291 948 2,343 73,991 3,283 922 2,361 77,919 3,523 989 2,534 30 31 32 33 34 Farmers Home Admin 1- to 4-family Multifamily Commercial Farm 1,366 743 29 218 376 1,432 759 167 156 350 1,109 208 215 190 496 1,064 454 218 72 320 1,353 626 275 149 303 1,179 202 408 218 351 618 124 102 104 288 668 135 110 112 311 35 36 37 Federal Housing and Veterans Admin. 1- to 4-family Multifamily 3,476 2,013 1,463 4,015 2,009 2,006 4,970 1 ,990 2,980 5,150 1,676 3,474 5,212 1,627 3,585 5,219 1,585 3,634 5,225 1,543 3,682 5,295 1,565 3,730 38 39 40 Federal National Mortgage Assn... . 1-to 4-family Multifamily 24,175 20,370 3,805 29,578 23,778 5,800 31,824 25,813 6,011 32,904 26,934 5,970 34,369 28,504 5,865 36,029 30,208 5,821 38,753 32,974 5,779 41,189 35,437 5,752 41 42 43 Federal Land Banks 1- to 4-family Farm 11,071 123 10,948 13,863 406 13,457 16,563 549 16,014 19,125 601 18,524 22,136 670 21,466 22,925 691 22,234 23,857 727 23,130 24, 758 819 23,939 44 45 46 Federal Home Loan Mortgage Corp.. 1- to 4-family Multifamily 2,604 2,446 158 4,586 4,217 369 4,987 4,588 399 4,269 3,889 380 3,276 2,738 538 3,371 2,785 586 2,255 1,856 399 2,486 1,994 492 47 Mortgage pools or trusts2 48 Government National Mortgage Assn. 49 1- to 4-family Multifamily 50 18,040 7,890 7,561 329 23,799 11,769 11,249 520 34,138 18,257 17,538 719 49,801 30,572 29,583 989 70,289 44,896 43,555 1,341 74,080 46,357 44,906 1,451 78,602 48,032 46,515 1,517 82,325 50,844 49,276 1,568 766 617 149 757 608 149 1,598 1,349 249 2,671 2,282 389 6,610 5,621 989 7,471 6,286 1,185 9,423 7,797 1,626 9,934 8,358 1,576 9,384 5,458 138 1 ,124 2,664 11,273 6,782 116 1,473 2,902 14,283 9,194 295 1,948 2,846 16,558 10,219 532 2,440 3,367 18,783 11,379 759 2,945 3,682 20,252 12,235 732 3,528 3,757 21,147 12,742 1,128 3,301 3,976 21,547 12,943 1,154 3,380 4,070 112,160 51 ,112 23,982 21,303 15,763 117,833 53,331 24,276 23,085 17,141 119,315 56,268 22,140 22,569 18,338 125,123 62,643 20,420 21,446 20,614 138,111 71,665 20,501 22,375 23,570 141,599 73,878 20,732 22,479 24,510 144,888 75,763 20,939 22,661 25,525 148,890 78,054 21,128 23,146 26,562 51 52 53 Federal Home Loan Mortgage Corp. 1- to 4-family Multifamily 54 55 56 57 58 Farmers Home Admin 1- to 4-family Multifamily Commercial Farm, 59 Individuals and others3 60 1- to 4-family 61 Multifamily 62 Commercial 63 Farm 1 Includes loans held by nondeposit trust companies but not bank trust departments. 2 Outstanding principal balances of mortgages backing securities insured or guaranteed by the agency indicated. 3 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 U.S. agencies for which amounts are small or separate data are not readily available. NOTE. Based on data from various institutional and government sources, with some quarters estimated in part by Federal Reserve in conjunction with the Federal Home Loan Bank Board and the Department of Commerce. Separation of nonfarm mortgage debt by type of property, if not reported directly, and interpolations and extrapolations where required, are estimated mainly by Federal Reserve. Multifamily debt refers to loans on structures of five or more units. A42 1.55 DomesticNonfinancialStatistics • February 1979 CONSUMER INSTALLMENT CREDIT 1 Total Outstanding, and Net Changej Millions of dollars Holder, and type of credit 1976 1977 1978 1978 July Aug. Sept. Oct. Nov. Dec. Amounts outstanding (end of period) 1 Total. 193,977 230,829 275,640 249,865 253,897 259,614 263,387 265,821 269,445 275,640 2 3 4 5 6 7 8 By major holder: Commercial banks Finance companies Credit unions Retailers2 Savings and loans Gasoline companies. .. Mutual savings banks., 93,728 38,919 31,169 19,260 6,246 2,830 1,825 112,373 44,868 37,605 23,490 7,354 2,963 2,176 136,189 54,309 45,939 24,876 8,394 3,240 2,693 124,080 48,637 41,936 21,813 7,764 3,185 2,450 126,619 49,502 42,355 21,828 7,793 3,309 2,491 129,622 50,558 43,499 22,093 7,947 3,354 2,541 131,403 51,280 44,325 22,302 8,055 3,416 2,606 132,702 51,984 44,635 22,464 8,177 3,276 2,583 133,908 53,099 45,305 23,006 8,291 3,173 2,663 136,189 54,309 45,939 24,876 8,394 3,240 2,693 9 10 11 12 13 14 By major type of credit: Automobile Commercial banks . . Indirect paper Direct loans Credit unions Finance companies.. 67,707 39,621 22,072 17,549 15,238 12,848 82,911 49,577 27,379 22,198 18,099 15,235 102,468 60,564 33,850 26,714 21,976 19,937 93,261 55,754 31,128 24,626 20,054 17,453 95,289 57,071 31,907 25,164 20,254 17,964 97,687 58,453 32,667 25,786 20,801 18,433 99,062 59,085 33,067 26,018 21,196 18,781 100,159 59,778 33,415 26,363 21,344 19,037 101,565 60,347 33,709 26,638 21,664 19,554 102,468 60,564 33,850 26,714 21,967 19,937 15 16 17 18 Revolving Commercial banks. . Retailers Gasoline companies. 17,189 14,359 2,830 39,274 18,374 17,937 2,963 47,051 24,434 19,377 3,240 40,001 20,135 16,681 3,185 40,553 20,566 16,678 3,309 41,629 21,314 16,961 3,354 42,420 21,935 17,069 3,416 42,579 22,165 17,138 3,276 43,523 22,724 17,626 3,173 47,051 24,434 19,377 3,240 19 20 21 22 23 Mobile home Commercial banks. Finance companies. Savings and loans.. Credit unions 14,573 8,737 3,263 2,241 332 15,141 9,124 3,077 2,538 402 16,042 9,553 3,152 2,848 489 15,532 9,386 3,065 2,634 447 15,663 9,483 3,085 2,644 451 15,799 9,539 3,101 2,696 463 15,910 9,591 3,114 2,733 472 15,925 9,548 3,127 2,775 475 16,017 9,572 3,150 2,813 482 16,042 9,553 3,152 2,848 489 24 25 26 27 28 29 30 Other Commercial banks Finance companies Credit unions Retailers Savings and loans Mutual savings banks. 94,508 31,011 22,808 15,599 19,260 4,005 1,825 93,503 35,298 26,556 19,104 5,553 4,816 2,176 110,079 41,638 31,220 23,483 5,499 5,546 2,693 101,071 38,805 28,119 21,435 5,132 5,130 2,450 102,392 39,499 28,453 21,650 5,150 5,149 2,491 104,499 40,316 29,024 22,235 5,132 5,251 2,541 105,995 40,792 29,385 22,657 5,233 5,322 2,606 107,158 41,211 29,820 22,816 5,326 5,402 2,583 108,340 41,265 30,395 23,159 5,380 5,478 2,663 110,079 41,638 31,220 23,483 5,499 5,546 2,693 Net change (during period) 3 31 Total. 21,647 35,278 45,066 4,207 3,466 3,632 3,680 3,374 4,099 4,400 32 33 34 35 36 37 38 By major holder: Commercial banks Finance companies Credit unions Retailers i Savings and loans Gasoline companies . ., Mutual savings banks. 10,792 2,946 5,503 1,059 1,085 124 138 18,645 5,948 6,436 2,654 1,111 132 352 24,058 9,441 8,334 1,386 1,041 276 530 2,387 624 797 234 57 20 88 2,100 671 513 144 10 -19 47 1,785 736 613 342 107 -1 50 1,714 847 639 328 94 9 49 1,617 863 644 115 127 16 -8 1,925 1,018 779 186 88 104 2,080 1,098 773 196 115 96 42 39 40 41 42 43 44 By major type of credit: Automobile Commercial banks. . Indirect p a p e r . . . . Direct loans Credit unions Finance companies.. 10,465 6,334 2,742 3,592 2,497 1,634 15,204 9,956 5,307 4,649 2,861 2,387 19,557 10,987 6,471 4,516 3,868 4,702 1,642 1,029 587 442 349 264 1,711 1,041 626 415 275 395 1,604 957 515 442 287 360 1,532 848 517 331 313 371 1,375 759 354 405 301 315 1,755 839 440 399 364 552 1,780 845 530 315 391 544 45 46 47 48 Revolving Commercial banks. . Retailers Gasoline companies. 2,170 2,046 124 6,248 4,015 2,101 132 7,776 6,060 1,440 276 955 601 334 20 600 498 121 -19 737 358 380 -1 622 380 233 9 346 337 -7 16 665 556 110 -1 869 610 163 96 49 50 51 52 53 Mobile home Commercial banks. Finance companies. Savings and loans.. Credit unions 140 70 -182 192 60 565 387 -189 297 70 897 426 74 310 87 70 50 1 12 7 83 65 11 2 5 79 20 7 46 6 72 31 6 27 8 25 -25 -2 46 6 75 19 15 34 7 71 21 11 30 9 54 55 56 57 58 59 60 Other Commercial banks Finance companies Credit unions Retailers Savings and loans Mutual savings banks. 8,872 2,342 1,494 2,946 1,059 893 138 13,261 4,287 3,750 3,505 553 814 352 16,836 6,585 4,665 4,379 -54 731 530 1,540 707 359 441 -100 45 88 1,072 496 265 233 23 8 47 1,212 450 369 320 -38 61 50 1,454 455 470 318 95 67 49 1,628 546 550 337 122 81 -8 1,604 511 451 408 76 54 104 1,680 604 543 373 33 85 42 1 The board's series cover most short- and intermediate-term credit extended to individuals through regular business channels, usually to finance the purchase of consumer goods and services or to refinance debts incurred for such purposes, and scheduled to be repaid (or with the option of repaying in two or more installments). 2 Includes auto dealers and excludes 30-day charge credit held by travel and entertainment companies. 3 Net change equals extensions minus liquidations (repayments, chargeoffs, and other credits); figures for all months are seasonally adjusted. NOTE. Total consumer noninstallment credit outstanding—credit scheduled to be repaid in a lump sum, including single-payment loans, charge accounts, and service credit—amounted to $64.3 billion at the end of 1978, $58.6 billion at the end of 1977, $54.8 billion at the end of 1976, and $50.9 billion at the end of 1975. Comparable data for Dec. 31, 1979 will be published in the February 1980 BULLETIN. A Consumer installment credit series have been revised from 1943. effective Dec. 7, 1978. Information is available from Mortgage and Consumer Finance Section, Division of Research and Statistics. Consumer Debt 1.56 CONSUMER INSTALLMENT CREDIT A43 Extensions and Liquidations A Millions of dollars 1978 Holder, and type of credit 1976 1977 1978 June July Aug. Extensions Sept. Oct. Nov. 2 211,028 254,071 298,574 25,565 25,022 25,669 25,536 25,785 26,214 2 3 4 5 6 7 8 By major holder: Commercial banks Finance companies Credit unions Retailers1 Savings and loans Gasoline companies. ., Mutual savings banks. 97,397 36,129 29,259 29,447 3,898 13,387 1,511 117,896 41,989 34,028 39,133 4,485 14,617 1,923 142,965 50,483 40,023 41,619 5,050 16,125 2,309 12,382 4,223 3,445 3,552 379 1,351 233 12,187 4,261 3,271 3,477 327 1,299 12,255 4,348 3,379 3,725 435 1,317 12,182 210 12,123 4,372 3,360 3,718 403 1,346 215 12,476 4,512 3,530 3,571 489 1,376 9 10 11 12 13 14 By major type of credit: Automobile Commercial banks. . Indirect paper Direct loans Credit unions Finance companies.. 63,743 37,886 20,576 17,310 14,688 11,169 75,641 46,363 25,149 21,214 16,616 12,662 88,986 53,028 29,336 23,692 19,486 16,472 7,595 4,541 2,505 2,036 1,667 1,387 7,652 4,639 2,554 2,085 1,629 1,384 7,744 4,660 2,562 2,098 1,632 1,452 7,542 4,479 2,519 1,960 1,641 1,422 7,501 4,345 2,384 1,961 1,643 1,513 7,787 4,503 2,422 15 16 17 18 Revolving Commercial banks. . Retailers Gasoline companies. 43,934 30,547 13,387 86,756 38,256 33,883 14,617 104,587 51,531 36,931 16,125 9.062 4,451 3,260 1,351 8,700 4,320 3,081 1,299 9,028 4,346 3.365 1,317 9,006 4,457 3,203 1,346 8,846 4,475 3,036 1,335 9,176 4,702 3,098 1,376 19 20 21 22 23 Mobile home Commercial banks. Finance companies. Savings and loans.. Credit unions 4,859 3,064 702 929 164 5,425 3,466 643 1,120 196 6,067 3,704 510 327 73 90 509 335 78 78 531 310 75 127 19 494 297 77 100 20 604 352 73 154 25 486 280 77 108 21 24 25 26 27 28 29 30 Other Commercial banks Finance companies Credit unions Retailers Savings and loans Mutual savings banks. 98,492 25,900 24,258 14,407 29,447 2,969 1,511 86,249 29,811 28,684 17,216 5,250 3,365 1,923 98,934 34,702 33,125 20,299 4,688 3,811 2,309 8,495 2,890 2,873 1,699 515 303 215 8,807 3,010 3,019 1,733 482 412 151 ,765 ,991 ,869 ,791 473 381 260 1 Total 886 1,239 238 20 8,398 3.063 2,763 1,758 292 289 233 200 18 8,161 2,893 2,799 1,624 396 249 200 8.366 2,939 2,821 1,728 360 308 210 4,605 3,401 3,518 566 1,335 151 260 2,081 1,718 1,566 Liquidations2 189,381 218,793 253,508 21,358 21,556 22,037 21,857 22,384 22,115 22,100 32 33 34 35 36 37 38 By major holder: Commercial banks Finance companies Credit unions Retailers i Savings and loans Gasoline companies. .. Mutual savings banks. 86,605 33,183 23,756 28,388 2,813 13,263 1,373 99,251 36,041 27,592 36,479 3,374 14,485 1,571 118,907 41,042 31,689 40,233 4,009 15,849 1,779 9,995 3,599 2,648 3,318 322 1,331 145 10,087 3,590 2,758 3,333 317 1,318 153 10,470 3,612 2,766 3,383 328 1,318 160 10,409 3,525 2,721 3,390 309 1,337 166 10,565 3,742 2,757 3,403 439 1,319 159 10,551 3,494 2,751 3,385 401 1,377 156 10,441 3,581 2,753 3,416 401 1,355 153 39 40 41 42 43 44 By major type of credit: Automobile Commercial banks . . Indirect paper. . .. Direct loans Credit unions Finance companies.. 53,278 31,552 17,834 13,718 12,191 9,535 60,437 36,407 19,842 16,565 13,755 10,275 69,429 42,041 22,865 19,176 15,618 11,770 5,953 3,512 1,918 1,594 1,318 1,123 5,941 3,598 1,928 1,670 1,354 989 6,140 3,703 2,047 1,656 1,345 1,092 6,010 3,631 2,002 1,629 1,328 1,051 6,126 3,586 2,030 1,556 1,342 1,198 6,032 3,664 1,982 1,682 1,354 1,014 6,053 3,598 1,921 1,677 1,347 1,108 45 46 47 48 Revolving Commercial banks. . Retailers Gasoline companies. 41,764 28,501 13,263 80,508 34,241 31,782 14,485 96,811 45,471 35,491 15,849 8,107 3,850 2,926 1,331 8,100 3,822 2,960 1,318 8,291 3,988 2,985 1,318 8,384 4,077 2,970 1,337 8,500 4,138 3,043 1,319 8,511 4,146 2,988 1,377 8,555 4,204 2,996 1,355 49 50 51 52 53 Mobile home Commercial banks. Finance companies. Savings and loans.. Credit unions 4,719 2,994 884 737 104 4,860 3,079 832 823 126 5,170 3,278 812 929 151 440 277 72 78 13 426 270 67 76 13 452 290 68 81 13 422 266 71 73 12 579 377 75 108 19 411 261 62 74 14 431 274 63 81 13 54 55 56 57 58 59 Other Commercial banks Finance companies Credit unions Retailers Savings and loans Mutual savings banks. 89,620 23,558 22,764 11,461 28,388 2,076 1,373 72,988 25,524 24,934 13,711 4,697 2,551 1,571 82,098 28,117 28,460 15,920 4,742 3,080 1,779 6,858 2,356 2,404 1,317 392 244 145 7,089 2,397 2,534 1,391 373 241 153 7,154 2,489 2,452 1,408 398 247 160 7,041 2,435 2,403 1,381 420 236 166 7,179 2,464 2,469 1,396 360 331 159 7,161 2,480 2,418 1,383 397 327 156 7,061 2,365 2,410 1,393 420 320 153 31 Total. 60 1 Includes auto dealers and excludes 30-day charge credit held by travel and entertainment companies. 2 Monthly figures are seasonally adjusted. A Consumer installment credit series have been revised from 1943, effective Dec. 7, 1978. Information is available from Mortgage and Consumer Finance Section, Division of Research and Statistics. A44 1.57 DomesticNonfinancialStatistics • February 1979 F U N D S RAISED IN U.S. CREDIT MARKETS Billions of dollars; quarterly data are at seasonally adjusted annual rates. Transaction category, or sector 1973 1974 1975 1976 1975 1977 HI 1976 H2 1977 1978 HI H2 HI H2 HI Nonfinancial sectors 1 Total funds raised 2 Excluding equities By sector and instrument: 3 U.S. government 4 Public debt securities 5 Agency issues and mortgages 6 All other nonfinancial sectors 7 Corporate equities 8 Debt instruments 9 Private domestic nonfinancial sectors. . 10 Corporate equities 11 Debt instruments 12 Debt capital instruments 13 State and local obligations.... 14 Corporate bonds Mortgages: 15 Home 16 Multifamily residential 17 Commercial 18 Farm 19 Other debt instruments 20 Consumer credit 21 Bank loans n.e.c 22 Open market paper 23 Other 203.8 196.1 188.8 184.9 208.1 198.0 272.5 261.7 340.5 337.4 177.5 167.0 238.9 229.2 259.6 245.9 285.6 277.5 302.2 301.0 378.9 373.8 371.4 371.3 8.3 7.9 .4 195.5 7.7 187.9 189.3 7.9 181.4 105.0 14.7 9.2 11.8 12.0 -.2 177.0 3.8 173.1 161.6 4.1 157.5 98.0 16.5 19.7 85.4 85.8 -.4 122.7 10.1 112.6 109.5 9.9 99.6 97.8 15.6 27.2 69.0 69.1 —. 1 203.5 10.8 192.6 182.8 10.5 172.3 126.8 19.0 22.8 56.8 57.6 -.9 283.8 3.1 280.6 271.4 2.7 268.7 181.1 29.2 21.0 78.3 79.1 -.8 99.2 10.5 88.7 89.1 10.3 78.8 93.7 11.1 34.5 92.5 92.6 —. 1 146.4 9.7 136.6 130.0 9.5 120.5 101.9 20.0 19.9 73.5 73.4 .1 186.0 13.6 172.4 168.5 13.3 155.2 117.8 19.3 22.2 64.5 64.9 -.3 221.0 8.1 213.0 197.2 7.7 189.5 135.9 18.7 23.5 42.6 43.1 -.6 259.6 1.2 258.5 252.1 .5 251.6 163.4 29.3 16.0 71.0 72.2 -1.2 307.9 5.1 302.8 290.7 4.9 285.8 198.9 29.0 26.0 58.8 59.7 -.9 312.6 .l 312.5 298.8 .9 297.9 182.7 29.0 18.4 46.4 10.4 18.9 5.5 76.4 23.8 39.8 2.5 10.3 34.8 6.9 15.1 5.0 59.6 10.2 29.0 6.6 13.7 39.5 11.0 4.6 1.8 9.4 -14.0 -2.6 9.0 63.7 1.8 13.4 6.1 45.5 23.6 3.5 4.0 14.4 96.4 7.4 18.4 8.8 87.6 35.0 30.6 2.9 19.0 33.9 .1 9.1 5.1 -14.9 2.2 -23.7 -1.9 8.5 45.1 -.1 12.9 4.1 18.6 16.6 -4.3 -3.2 9.5 56.9 .6 13.8 4.9 37.4 22.9 -2.7 5.6 11.6 70.5 3.1 12.9 7.3 53.6 24.3 9.6 2.4 17.3 88.5 6.4 14.2 8.9 88.2 35.7 34.0 3.5 15.0 104.2 8.4 22.6 8.7 86.9 34.4 27.2 2.4 23.0 91.4 9.7 24.5 9.8 115.2 44.8 47.1 5.2 18.1 24 25 26 27 28 29 189.3 13.2 80.9 9.7 12.8 72.7 161.6 15.5 49.2 7.9 7.4 81.8 109.5 13.2 48.6 8.7 2.0 37.0 182.8 18.5 89.9 11.0 5.2 58.2 271.4 25.9 139.6 14.7 12.6 78.7 89.1 8.8 37.1 8.5 -1.0 35.8 130.0 17.5 60.2 9.0 5.1 38.2 168.5 17.6 82.7 9.9 4.0 54.3 197.2 19.5 97.1 12.1 6.4 62.2 252.1 22.7 131.2 15.5 12.8 69.8 290.7 29.0 148.0 13.8 12.3 87.6 298.8 22.1 147.7 15.8 20.7 92.5 6.2 -.2 6.4 1.0 2.8 .9 1.7 15.3 -.2 15.6 2.1 4.7 7.3 1.5 13.2 .2 13.0 6.2 3.7 .3 2.8 20.7 .3 20.4 8.5 6.6 1.9 3.3 12.3 .4 11.9 5.0 1.6 2.4 3.0 10.0 .1 9.9 5.7 1.6 -.8 3.4 16.4 .2 16.2 6.8 5.9 1.4 2.2 17.5 .3 17.2 7.4 5.4 1.5 2.9 23.8 .3 23.5 9.7 7.9 2.4 3.6 7.5 .6 6.9 4.4 -3.2 2.7 3.1 17.2 .2 17.0 5.6 6.4 2.2 2.9 13.8 -.8 14.6 4.9 2.9 3.6 3.2 30 31 32 33 34 35 36 By borrowing sector State and local governments Households Farm Nonfarm noncorporate Corporate Foreign Corporate equities Debt instruments Bonds Bank loans n.e.c Open market paper U.S. government loans * Financial sectors 37 Total funds raised By instrument: U.S. government related Sponsored credit agency securities Mortgage pool securities Loans from U.S. government Private financial sectors Corporate equities Debt instruments Corporate bonds Mortgages Bank loans n.e.c Open market paper and RPs Loans from FHLBs 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 By sector: Sponsored credit agencies Mortgage pools Private financial sectors Commercial banks Bank affiliates Savings and loan associations Other insurance companies Finance companies REITs Open-end investment companies Money market funds 57.6 36.4 11.7 29.2 58.8 12.4 10.9 27.9 30.5 61.5 56.2 101.5 19.9 16.3 3.6 23.1 16.6 5.8 .7. 13.3 .3 13.0 2.1 -1.3 4.6 .9 6.7 13.5 2.3 10.3 .9 -1.9 .6 -2.5 2.9 2.3 -3.6 -.1 -4.0 18.6 3.3 15.7 - .4 10.6 1.0 9.6 5.8 2.1 -3.7 7.3 -2.0 26.3 7.0 20.5 -1.2 32.6 .6 32.0 10.1 3.1 12.9 3.1 9.2 .6 -2.0 .6 -2.6 4.0 3.1 -2.9 -5.4 -1.4 18.2 4.1 14.2 25.0 9.5 17.9 -2.3 36.5 .5 36.0 10.1 3.3 -2.3 21.4 3.4 40.1 24.1 16.0 9.7 -.2 10.0 6.4 1.5 -2.6 6.2 -1.5 19.0 2.6 17.2 — .7 11.5 2.3 9.2 5.2 2.7 -4.8 8.5 -2.5 27.5 4.4 23.1 14.4 4.3 14.2 1.6 11.5 1.1 — 1.8 .6 -2.4 1.9 1.4 -4.3 5.1 -6.5 28.7 .7 28.0 10.1 2.9 2.3 7.4 5.2 61.4 1.1 60.3 8.5 2.4 .4 35.0 14.1 36.4 17.3 5.8 13.3 -5.6 3.5 6.3 .9 6.0 .6 -.7 2.4 11.7 3.2 10.3 -1.9 -1.4 .3 -2.2 1.0 .6 -1.4 — 1 1.3 29.2 2.9 15.7 10.6 7.5 -.8 58.8 5.8 20.5 32.6 4.8 1.3 11.9 .9 16.9 -2.4 -1.0 .2 12.4 2.7 11.5 -1.8 3.9 .9 -7.2 .9 -2.2 -1.5 .8 2.6 10.9 3.8 9.2 -2.0 -6.7 -.3 2.7 1.0 3.4 -1.2 -1.0 1 27.9 4.0 14.2 9.7 9.0 -1.3 .1 .9 6.0 -2.1 -2.4 -.5 30.5 1.8 17.2 11.5 6.0 -.3 _ i '.9 6.9 -2.7 .4 .5 61.5 7.1 17.9 36.5 10.0 1.3 10.6 .9 17.4 -2.5 -.8 — .5 56.2 4.4 23.1 28.7 -.4 1.2 13.1 1.0 16.4 -2.2 -1.2 .9 101.5 24.1 16.0 61.4 12.2 5.8 19.6 1.0 18.7 -1.2 -.6 5.9 287.5 -2.4 15.8 274.1 91.9 19.3 36.1 77.7 22.9 .1 13.3 12.9 316.0 .4 9.9 305.7 84.3 18.7 38.4 96.4 24.3 12.6 13.3 17.7 363.7 -.8 2.5 362.0 70.0 29.3 30.5 121.2 35.7 28.4 27.6 19.2 435.0 -1.2 7.0 429.2 98.6 29.0 41.7 146.7 34.4 35.9 11.9 31.0 472.9 -.6 1.7 471.7 99.0 29.0 31.8 137.6 44.8 50.4 43.7 35.4 37.7 1.5 36.2 3.5 -1.2 8.9 17.8 7.2 57.6 16.3 3.6 37.7 14.1 2.2 6.0 .5 9.4 6.5 -1.2 * .9 6.4 -2.4 -1.0 * * * All sectors 61 Total funds raised, by instrument 62 Investment company shares 63 Other corporate equities 64 Debt instruments 65 U.S. government securities 66 State and local obligations 67 Corporate and foreign bonds 68 Mortgages 69 Consumer credit 70 Bank loans n.e.c 71 Open market paper and RPs 72 Other loans 261.4 -1.2 10.4 252.3 28.3 14.7 13.6 79.9 23.8 51.6 21.2 19.1 225.1 -.7 4.8 221.0 34.3 16.5 23.9 60.5 10.2 38.3 14.8 22.6 219.8 -.1 10.8 209.1 98.2 15.6 36.4 57.2 9.4 -13.9 -2.4 8.7 301.7 -1.0 12.9 289.8 88.1 19.0 37.2 87.1 23.6 6.4 13.3 15.3 399.4 -1.0 4.8 395.6 84.3 29.2 36.1 134.0 35.0 32.2 19.8 25.1 189.8 .8 10.3 178.8 91.5 11.1 42.1 49.4 2.2 -26.4 2.4 6.5 249.8 -1.0 11.3 239.5 104.9 20.0 30.7 65.0 16.6 -1.3 -7.3 10.9 Flow of Funds 1.58 A45 DIRECT A N D INDIRECT SOURCES OF F U N D S TO CREDIT MARKETS Billions of dollars, except as noted; quarterly data are at seasonally adjusted annual rates. 1976 1975 Transaction category, or sector 1 Total funds advanced in credit markets to nonfinancial sectors 2 3 4 5 6 7 8 9 10 11 By public agencies and foreign: Total net advances U.S. government securities Residential mortgages FHLB advances to S&Ls Other loans and securities Totals advanced, by sector U.S. government Sponsored credit agencies Monetary authorities Foreign Agency borrowing not included in line 1 . . Private domestic funds advanced 12 Total net advances 13 U.S. government securities 14 State and local obligations 15 Corporate and foreign bonds 16 Residential mortgages 17 Other mortgages and loans 18 19 20 21 22 23 LESS : F H L B a d v a n c e s Private financial intermediation Credit market funds advanced by private financial institutions Commercial banking Savings institutions Insurance and pension funds Other finance 24 Sources of funds 25 Private domestic deposits 26 Credit market borrowing 1973 1974 1975 1976 1977 1978 1977 HI H2 HI H2 HI H2 HI 337.4 167.0 229.2 245.9 277.5 301.0 373.8 371.3 196.1 184.9 198.0 261.7 34.1 52.6 44.3 54.5 85.4 51.9 36.7 49.7 59.3 69.3 101.6 102.9 9.5 8.2 7.2 9.2 11.9 14.7 6.7 19.4 22.5 16.2 -4.0 9.5 26.8 12.8 -2.0 16.9 40.2 20.4 4.3 20.5 31.2 16.8 -6.5 10.4 13.7 15.7 -1.4 8.7 24.4 11.8 -1.5 15.0 29.3 13.7 -2.5 18.8 27.2 20.0 3.4 18.6 53.2 20.9 5.2 22.4 42.6 22.9 14.1 23.4 2.8 21.4 9.2 .6 19.9 9.7 25.6 6.2 11.2 23.1 15.1 14.5 8.5 6.1 13.5 8.9 20.6 9.8 15.2 18.6 11.8 26.9 7.1 39.5 26.3 15.8 16.0 7.0 13.0 14.2 14.3 13.1 10.1 -.8 12.9 6.3 20.0 13.7 9.7 18.2 11.5 21.2 6.0 20.6 19.0 6.1 10.2 26.4 25.0 17.6 27.2 4.1 52.7 27.5 19.2 44.3 12.9 26.5 40.1 182.0 155.3 167.3 225.7 278.2 129.3 205.4 214.4 237.1 256.8 299.7 308.5 18.8 14.7 10.0 48.4 97.2 7.2 22.4 16.5 20.9 26.9 75.4 6.7 75.7 15.6 32.8 23.2 16.1 -4.0 61.3 19.0 30.5 52.7 60.4 -2.0 44.1 29.2 22.3 83.2 103.7 4.3 60.2 11.1 40.0 17.1 -5.7 -6.5 91.2 20.0 25.6 29.2 37.9 -1.4 67.5 19.3 28.6 45.6 51.9 -1.5 55.1 18.7 32.3 59.7 68.9 -2.5 42.8 29.3 17.2 74.9 96.0 3.4 45.4 29.0 27.3 91.6 111.5 5.2 56.4 29.0 21.7 78.0 137.4 14.1 165.4 126.2 119.9 191.2 249.6 101.2 138.7 174.4 207.9 241.1 258.0 279.8 86.5 36.9 23.9 18.0 64.5 26.9 30.0 4.7 27.6 52.0 41.5 -1.1 58.0 71.4 51.7 10.1 85.8 84.8 62.0 16.9 14.8 49.3 38.1 - . 9 40.5 54.6 44.9 -1.3 46.6 70.5 53.2 4.2 69.4 72.4 50.2 15.9 81.1 85.3 60.3 14.5 90.5 84.3 63.7 19.4 115.8 77.1 69.3 17.7 165.4 86.6 126.2 69.4 119.9 191.2 249.6 101.2 138.7 174.4 207.9 241.1 258.0 279.8 36.2 13.0 90.6 -2.5 121.5 9.6 136.0 32.0 89.9 -2.4 91.3 -2.6 108.3 10.0 134.6 9.2 127.0 36.0 145.0 28.0 119.4 60.3 78.2 .1 26.1 42.5 43.8 31.9 60.1 81.6 13.7 50.0 56.1 64.1 85.1 100.1 5.8 -1.0 18.4 19.4 16.8 -5.1 26.0 6.0 .9 -1.7 29.6 3.1 5.1 —. 1 34.8 20.3 11.6 4.3 48.0 17.8 -.5 -3.8 27.4 -9.4 2.4 .4 31.7 15.6 .7 2.3 35.8 17.2 9.5 -2.5 33.8 23.4 -1.8 45.5 33.7 22.4 10.4 50.4 1.9 2.1 - . 8 55.4 43.4 52.8 42.2 44.9 44.1 60.6 25.7 64.1 50.0 38.4 51.6 69.6 19.2 5.4 1.3 18.3 8.6 17.5 9.3 4.7 2.4 8.2 23.0 8.3 8.0 - . 8 6.4 19.6 6.8 2.1 4.1 11.5 24.6 9.1 1.1 9.5 16.2 6.0 5.8 10.7 -1.8 4.9 39.9 10.8 5.3 .2 7.8 25.0 7.6 2.9 4.8 9.7 14.1 6.0 1.3 3.4 13.5 14.1 8.2 .4 13.0 15.9 35.2 10.1 1.8 6.0 16.5 59.0 35.8 11.6 -2.5 28.6 17.6 38 Deposits and currency 39 Time and savings accounts 40 Large negotiable CDs 41 Other at commercial banks 42 At savings institutions 90.6 76.1 66.7 96.8 84.8 128.8 112.2 144.3 120.1 96.4 75.6 97.2 93.9 114.3 99.5 143.3 125.0 132.6 110.5 18.1 29.6 28.5 18.8 26.1 21.8 -14.1 39.4 59.4 -14.4 58.1 68.5 9.3 41.7 69.1 -27.8 40.5 62.9 -.3 38.2 56.0 -19.8 52.0 67.3 -9.1 64.3 69.8 -4.4 45.3 69.6 156.0 129.7 22.9 43 44 45 14.4 8.9 12.0 16.6 24.2 20.8 3.3 14.8 18.3 10.5 3.9 2.6 6.3 5.8 6.2 9.3 7.3 15.9 8.3 14.3 6.5 -2.6 5.9 8.9 6.0 9.6 8.6 143.4 117.8 141.6 172.9 204.9 122.1 161.3 164.3 20.8 25.3 31.1 16.0 20.2 27 28 29 30 31 Other sources Foreign funds Treasury balances Insurance and pension reserves Other, net Private domestic nonfinancial investors 32 Direct lending in credit markets 33 U.S. government securities 34 State and local obligations 35 Corporate and foreign bonds 36 Commercial paper 37 Other Money Demand deposits Currency 46 Total of credit market instruments, deposits and currency 47 48 75.7 129.5 110.9 38.2 68.7 11.5 44.5 54.9 22.1 26.3 18.6 16.5 5.6 15.3 11.0 8.5 10.1 181.6 184.2 225.6 218.5 21.4 23.0 27.2 27.7 Public support rate (in per cent) Private financial intermediation (in per cent) Total foreign funds 17.4 28.5 22.4 90.9 6.4 81.3 28.0 71.7 7.1 84.7 20.3 89.7 51.1 78.3 12.5 67.5 1.6 81.3 10.4 87.7 30.1 93.9 27.1 86.1 75.1 90.7 28.5 MEMO: Corporate equities not included above 50 Total net issues 51 Mutual fund shares 52 Other equities 53 Acquisitions by financial institutions 54 Other net purchases 9.2 -1.2 10.4 13.3 -4.1 4.1 -.7 4.8 5.8 -1.6 10.7 11.9 -1.0 12.9 12.5 -.7 3.8 -1.0 4.8 6.2 -2.4 11.1 .8 10.3 11.5 - . 4 10.3 -1.0 11.3 7.8 2.5 13.4 -2.4 15.8 13.1 .3 10.4 .4 9.9 12.0 -1.6 1.7 - . 8 2.5 6.1 -4.4 5.8 -1.2 7.0 6.3 -.5 1.1 - . 6 1.7 1.6 -.5 49 — l 10.8 9.7 1.0 NOTES BY LINE NUMBER. 1. 2. 6. 11. 12. 17. 25. 26. 28. Line 2 of p. A-44. Sum of lines 3-6 or 7-10. Includes farm and commercial mortgages. Credit market funds raised by federally sponsored credit agencies, and net issues of federally related mortgage pool securities. Included below in lines 3, 13, and 33. Line 1 less line 2 plus line 11. Also line 19 less line 26 plus line 32. Also sum of lines 27, 32, 39, and 44. Includes farm and commercial mortgages. Sum of lines 39 and 44. Excludes equity issues and investment company shares. Includes line 18. Foreign deposits at commercial banks, bank borrowings from foreign branches, and liabilities of foreign banking agencies to foreign affiliates. 29. Demand deposits at commercial banks. 30. Excludes net investment of these reserves in corporate equities. 31. Mainly retained earnings and net miscellaneous liabilities. 32. Line 12 less line 19 plus line 26. 33-37. Lines 13-17 less amounts acquired by private finance. Line 37 includes mortgages. 45. Mainly an offset to line 9. 46. Lines 32 plus 38, or line 12 less line 27 plus line 45. 47. Line 2/line 1. 48. Line 19/line 12. 49. Sum of lines 10 and 28. 50. 52. Includes issues by financial institutions. NOTE. Full statements for sectors and transaction types quarterly, and annually for flows and for amounts outstanding, may be obtained from Flow of Funds Section, Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. A46 2.10 Domestic Nonfinancial Statistics • February 1979 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1977 1976 Measure 1979 1978 1978? June July Aug. Sept. Oct. r Nov.f Dec.p Jan. e 129.8 137.1 145.1 144.9 146.1 147.1 147.8 148.7 149.5 150.5 150.7 2 3 4 5 6 7 Market groupings: Products, total Final, total Consumer goods Equipment Intermediate Materials 129.3 127.2 136.2 114.6 137.2 130.6 137.1 134.9 143.4 123.2 145.1 136.9 144.3 141.3 147.4 133.0 155.1 146.4 144.0 141.1 147.0 133.0 154.7 146.4 145.0 142.2 147.7 134.7 155.6 147.9 146.2 143.3 148.4 136.3 156.4 148.6 146.5 143.7 149.0 136.4 157.0 149.7 147.0 144.1 149.2 137.0 158.0 151.4 147.6 144.6 149.8 137.3 159.0 152.6 148.7 145.5 150.7 138.3 160.7 153.3 149.0 145.7 150.8 138.5 161.4 153.3 8 Industry groupings: Manufacturing 129.5 137.1 145.6 145.5 146.7 147.6 148.7 149.5 150.4 151.5 151.6 80.2 80.4 82.4 81.9 84.2 84.9 84.3 85.1 84.7 85.7 85.0 85.9 85.3 86.3 85.5 87.1 85.8 87.6 86.1 87.8 85.9 87.5 Capacity utilization (percent)1 10 Industrial materials industries 2 190.2 253.2 286.0 249.0 286.0 289.0 300.0 319.0 285.0 303.0 n.a. 12 Nonagricultural employment, total3 13 Goods-producing, total 14 Manufacturing, total 15 Manufacturing, production-worker 16 Service-producing 120.7 r 100.2 97.7 95.3 131.9 125.0 104.2 101.0 98.6 136.4 130.3 108.9 104.5 102.1 142.1 130.7 109.3 104.5 102.0 142.5 130.8 109.4 104.4 101.8 142.5 130.9 109.2 104.3 101.6 142.8 131.0 109.3 104.3 101.6 142.9 131.6 110.1 105.1 102.4 143.4 132.3 111.0 105.9 103.5 144.0 132.6 111.7 106.6 104.2 144.1 133.1 112.0 106.9 104.7 144.7 17 Personal income, total4 18 Wages and salary disbursements 19 Manufacturing r 220.4 189.3 177.1 244.0 230.1 198.6 272.5 257.5 223.5 270.6 256.9 222.3 274.4 259.2 224.9 276.3 260.0 224.5 278.4 262.0 226.4 282.2 266.1 230.3 285.0 268.8 234.5 288.0 271.1 236.8 n.a. n.a. n.a. 217.5 •-239.3 266.5 21 Retail sales s 203.5 224.4 247.9 246.3 244.9 251.7 253.5 257.5 262.0 265.3 266.3 Prices:6 22 Consumer7 23 Producer finished goods 8 170.5 170.3 181.5 180.6 n.a. n.a. 195.3 194.5 196.7 '196.0 197.8 195.3 199.3 196.9 200.9 199.7 202.0 200.6 202.9 202.4 n.a. n.a. 11 Construction contracts r 20 Disposable personal income 1 Ratios of indexes of production to indexes of capacity. Based on data from Federal Reserve, McGraw-Hill Economics Department, and Department of Commerce. 2 Index of dollar value of total construction contracts, including residential, nonresidential, and heavy engineering, from McGraw-Hill Informations Systems Company, F. W. Dodge Division. 3 The establishment survey data in this table have been revised to conform to the industry definitions of the 1972 Standard Industrial Classification (SIC) Manual and to reflect employment benchmark levels for March 1977. In addition, seasonal factors for these data have been revised, based on experience through May 1978. Based on data in Employment and Earnings (U.S. Department of Labor). Series covers employees only, excluding personnel in the Armed Forces. 4 Based on data in Survey of Current Business U.S. Department of Commerce). Series for disposable income is quarterly. 2.11 r 277.6 269.7 5 Based on Bureau of Census data published in Survey of Current Business (U.S. Department of Commerce). 6 Data without seasonal adjustment, as published in Monthly Labor Review (U.S. Department of Labor). Seasonally adjusted data for changes in the price indexes may be obtained from the Bureau of Labor Statistics, U.S. Department of Labor, 7 Beginning Jan. 1978, based on new index for all urban consumers. 8 Beginning with the November 1978 BULLETIN, producer price data in this table have been changed to the BLS series for producer finished goods. The previous data were producer prices for all commodities. NOTE. Basic data (not index numbers) for series mentioned in notes 3, 4, and 5, and indexes for series mentioned in notes 2 and 6 may also be found in the Survey of Current Business (U.S. Department of Commerce). Figures for industrial production for the last two months are preliminary and estimated, respectively. OUTPUT, CAPACITY, A N D CAPACITY UTILIZATION Seasonally adjusted 1978 1978 1978 Series Q2 Ql Q4 r Q3 Output (1967 = 100) Ql Q2 Q3 Q4 Capacity (percent of 1967 output) Ql Q2 Q3 Q4 r Utilization rate (percent) 1 Manufacturing 139.8 144.4 147.7 150.5 170.3 172.0 173.7 175.4 82.1 84.0 85.0 85.8 2 3 148.2 135.4 154.1 139.3 158.2 142.1 161.6 144.5 176.8 166.9 178.5 168.5 180.2 170.2 181.9 171.8 83.8 81.1 86.3 82.7 87.8 83.5 88.8 84.1 139.2 145.1 148.7 152.4 170.4 171.7 173.0 174.2 81.7 84.5 86.0 87.5 174.0 145.8 182.3 190.8 143.5 153.6 226.6 147.2 175.2 146.1 184.4 193.1 144.1 154.8 230.1 147.8 176.3 146.5 186.5 195.4 144.7 155.8 233.5 148.4 177.4 146.8 188.5 197.5 145.2 156.9 236.8 148.9 79.3 75.8 86.7 85.5 80.3 88.9 86.0 80.9 82.2 80.4 88.5 86.8 81.2 90.3 87.5 84.9 85.3 85.1 87.5 86.2 81.0 86.5 87.5 85.6 87.5 88.2 88.4 86.9 82.0 87.2 88.2 86.2 Primary processing Advanced processing 4 Materials 5 6 7 8 9 10 11 12 Durable goods Basic metal Nondurable goods Textile, paper, and chemical Textile Paper Chemical Energy 137.9 110.5 158.0 163.1 115.3 136.5 194.9 119.1 144.0 117.5 163.2 167.7 117.1 139.7 201.4 125.5 150.4 124.6 163.2 168.4 117.3 134.8 204.4 127.0 155.2 129.5 166.6 171.7 119.1 136.9 208.8 128.4 Labor Market 2.12 A47 LABOR FORCE, EMPLOYMENT, A N D UNEMPLOYMENT Thousands of persons; monthly data are seasonally adjusted. Exceptions noted. Category 1976 1977 1978 1978 July Aug. 1979 Sept. Oct. Nov. Dec. Jan. Household survey data 1 Noninstitutional population1 2 Labor force 1(including Armed Forces) 3 Civilian labor force Employment : 4 Nonagricultural industries2 5 Agriculture Unemployment: 6 Number 7 Rate (percent of civilian labor force) 8 Not in labor force 156,048 158,559 161,058 161,148 161,348 161,570 161,829 162,033 162,250 162,448 96,917 94,773 99,534 97,401 102,537 100,420 '102,738 '100,622 '102,785 '100,663 '103,097 '100,974 '103,199 '101,077 '103,745 '101,628 103,975 '101,867 104,277 102,183 84,188 3,297 87,302 3,244 91,031 3,342 '91,069 '3,377 '91,372 '3,351 '91,604 '3,406 '91,867 '3,374 '92,476 '3,275 92,468 3,387 93,068 3,232 7,288 6,855 6,047 '6,176 '5,940 '5,964 '5,836 '5,877 6,012 5,883 7.7 7.0 6.0 6.1 5.9 5.8 5.8 5.9 5.8 59,025 58,521 '58,630 '58,288 58,275 58,170 '87,036 '20,601 '903 4,368 '4,947 '19,701 '4,774 '16,270 15,472 87,248 20,723 905 4,395 4,963 19,680 4,792 16,312 15,478 *87,573 2*20,790 2*909 2*4,418 2*4,978 2*19,826 2*4,816 2*16,350 2*15,491 59,130 '58,410 '58,563 r 5.9 '58,473 Establishment survey data 9 Nonagricultural payroll employment3 10 Manufacturing 11 Mining 12 Contract construction 13 Transportation and public utilities. 14 Trade 15 Finance 16 Service 17 Government 79,382 18,997 779 3,576 4,582 17,755 4,271 14,551 14,871 82,256 19,647 809 3,833 4,696 18,492 4,452 15,249 15,079 P85,760 2*20,331 P 837 2*4,213 2*4,858 ^19,392 P4,676 2*15,976 2*15,478 1 Persons 16 years of age and over. Monthly figures, which are based on sample data, relate to the calendar week that contains the 12th day; annual data are averages of monthly figures. By definition, seasonality does not exist in population figures. Based on data from Employment and2 Earnings (U.S. Dept. of Labor). Includes self-employed, unpaid family, and domestic service workers. 3 Data include all full- and part-time employees who worked during, or received pay for, the pay period that includes the 12th day of the month, and exclude proprietors, self-employed persons, domestic servants, 86,033 20,302 882 4,317 4,827 19,469 4,690 15,989 15,557 86,149 20,278 887 4,298 4,846 19,523 4,707 16,074 15,536 86,163 20,286 887 4,298 4,855 19,546 4,719 16,127 15,445 4 86,573 20,436 893 4,341 4,922 19,632 4,737 16,169 15,443 unpaid family workers, and members of the Armed Forces. Data are adjusted to the February 1977 benchmark. Based on data from Employment and Earnings (U.S. Dept. of Labor). 4 The establishment survey data in this table have been revised to conform to the industry definitions of the 1972 Standard Industrial Classification (SIC) Manual and to reflect employment benchmark levels for March 1977. In addition, seasonal factors for these data have been revised, based on experience through May 1978. A48 2.13 Domestic Nonfinancial Statistics • February 1979 INDUSTRIAL PRODUCTION Indexes and Gross Value Monthly data are seasonally adjusted. Grouping 1967 portion 1978 averagep 1978 1977 Nov. Dec. Jan. 1 Total index 8 9 10 11 12 Consumer goods Durable consumer goods Automotive products Autos and utility vehicles Autos Auto parts and allied goods 13 14 15 16 17 Home goods Appliances, A/C, and TV Appliances and TV Carpeting and furniture Miscellaneous home goods 18 19 20 21 Nondurable consumer goods Clothing Consumer staples Consumer foods and tobacco 60.71 144.3 139.5 47.82 141.3 137.0 27.68 147.4 145.2 20.14 133.0 125.8 12.89 155.1 148.4 39.29 146.4 139.0 Oct. r Nov. Dec.33 Jan." 140.3 137.6 145.8 126.2 150.4 138.8 138.5 134.9 141.8 125.4 151.6 139.2 144.0 141.1 147.0 133.0 154.7 146.4 145.0 142.2 147.7 134.7 155.6 147.9 146.2 143.3 148.4 136.3 156.4 148.6 146.5 143.7 149.0 136.4 157.0 149.7 147.0 144.1 149.2 137.0 158.0 151.4 147.6 144.6 149.8 137.3 159.0 152.6 148.7 145.5 150.7 138.3 160.7 153.3 149.0 145.7 150.8 138.5 161.4 153.3 146.5 157.5 145.5 127.4 187.8 160.6 179.9 173.4 149.8 193.9 160.9 182.2 176.7 152.7 196.1 161.5 182.1 175.6 151.1 198.0 161.1 181.1 173.7 145.9 200.1 155.2 173.6 167.6 147.5 188.9 155.8 172.4 165.5 143.6 190.4 160.3 178.3 170.0 144.4 199.8 161.6 185.6 180.5 154.2 199.1 162.0 189.4 185.7 159.7 198.5 161.9 185.1 179.5 151.8 199.0 5.06 1.40 1.33 1.07 2.59 147.8 132.5 134.5 164.3 149.3 145.0 131.4 133.0 160.0 146.3 146.6 140.3 149.7 148.9 150.0 150.2 132.8 116.1 139.0 133.7 133.9 134.4 134.6 117.4 141.0 136.8 135.6 136.9 161.5 159.1 166.0 168.5 167.9 169.0 147.7 145.9 148.8 149.1 151.3 150.8 148.2 128.7 129.9 168.0 150.6 146.8 124.3 125.4 164.9 151.3 148.8 149.7 129.8 131.4 130.3 166.3 151.9 152.8 141.8 139.9 126.9 118.3 145.9 145.9 137.9 136.5 141.6 124.8 146.3 139.0 142.4 125.1 147.3 140.2 143.1 126.6 147.8 140.8 144.4 128.9 148.8 141.2 144.3 144.9 146.2 146.7 128.3 148.8 149.2 i 5 0 . 7 151.4 140.4 141.0 142.6 155.2 186.5 119.8 149.7 158.5 156.6 187.4 121.4 151.5 161.7 154.8 185.5 118.0 150.8 159.0 155.5 186.7 117.5 151.9 159.9 155.9 188.0 117.3 152.0 160.1 157.4 190.1 118.2 153.3 160.9 158.5 191.9 116.7 155.4 162.8 159.0 191.8 117.5 156.6 160.0 160.7 193.0 117.7 157.7 153.5 154.0 142.6 143.0 206.7 208.3 118.7 118.2 142.1 143.7 152.6 144.3 211.1 118.8 146.1 161.8 150.9 227.3 122.8 149.2 163.8 151.9 228.9 122.6 152.8 165.4 152.8 228.1 123.9 154.6 165.8 152.7 226.3 124.4 154.8 166.9 152.9 226.5 125.0 154.0 167.2 151.9 223.8 124.2 153.4 168.4 152.2 223.0 124.7 155.1 5.86 175.8 165.9 166.9 3.26 208.4 197.4 198.8 1.93 133.6 118.9 121.1 .67 138.7 147.8 144.5 162.2 198.5 111.1 131.4 174.4 206.9 132.3 137.3 177.5 210.6 134.9 138.5 179.9 180.8 182.9 212.2 214.1 215.1 138.5 138.6 142.6 141.3 142.0 143.2 79.7 84.6 85.9 19.79 142.8 141.2 4.29 126.4 15.50 H7.6 145.3 8.33 140.1 136.7 27 28 29 30 31 Equipment Business equipment Industrial equipment Building and mining equipment Manufacturing equipment Power equipment 12.63 161.9 6.77 149.9 1.44 223.5 3.85 121.9 1.47 151.0 Defense and space equipment Sept. 158.8 178.5 172.5 148.5 193.7 7.17 156.3 2.63 187.1 1.92 118.1 2.62 153.4 1.45 36 Aug. 7.89 2.83 2.03 1.90 .80 Nonfood staples Consumer chemical products Consumer paper products Consumer energy products Residential utilities Commercial transit, farm equipment... Commercial equipment Transit equipment Farm equipment July 100.00 145.1 139.3 139.7 138.8 144.9 146.1 147.1 147.8 148.7 149.5 150.5 150.7 22 23 24 25 26 32 33 34 35 June Index (1967 == 100) MAJOR MARKET 2 Products 3 Final products 4 Consumer goods 5 Equipment 6 Intermediate products 7 Materials 1978 7.51 84.5 155.1 186.9 118.5 149.9 155.6 79.3 79.5 87.1 87.1 86.7 168.5 153.1 223.2 125.6 156.2 185.1 187.0 186.2 215.3 216.0 217.4 147.5 151.2 146.2 145.8 149.0 87.2 87.6 88.4 Intermediate products 37 Construction supplies 38 Business supplies 39 Commercial energy products 6.42 6.47 1.14 Materials Durable goods materials Durable consumer parts Equipment parts Durable materials n.e.c Basic metal materials 20.35 4.58 5.44 10.34 5.57 146.9 137.2 136.5 159.0 147.2 143.4 132.3 120.4 107.9 138.7 135.7 149.2 134.3 110.3 138.2 145.4 148.7 150.4 133.0 138.7 142.0 142.2 148.7 157.4 161.7 162.9 134.9 141.8 144.7 147.6 110.2 118.2 121.7 125.4 152.1 144.8 164.6 148.7 126.7 154.0 10.47 7.62 1.85 1.62 4.15 162.8 167.8 117.1 136.9 202.5 155.4 159.3 117.8 132.2 188.6 155.3 159.3 117.3 130.2 189.5 155.0 160.7 114.9 135.0 191.4 164.1 168.8 118.0 139.9 202.9 162.5 168.3 117.1 135.1 204.0 162.7 167.0 116.0 131.5 203.7 164.4 170.0 118.7 137.7 205.5 165.7 167.3 171.0 172.4 118.7 119.4 137.3 137.6 207.6 209.8 166.7 167.3 171.7 172.5 119.3 135.7 209.1 1.70 1.14 8.48 4.65 3.82 160.6 132.8 125.0 112.6 140.2 156.7 128.5 123.0 111.6 136.9 154.4 129.9 118.7 103.0 137.7 150.4 123.6 122.2 105.2 142.8 162.8 135.0 127.5 116.1 141.4 155.4 135.7 127.9 116.7 141.6 161.8 134.8 127.0 115.4 141.3 161.1 131.8 126.0 111.8 143.4 163.4 134.5 128.0 115.9 142.7 165.6 135.5 128.5 117.3 142.1 165.9 134.1 128.6 127.7 116.8 142.9 9.35 137.5 136.5 137.5 130.2 12.23 134.9 132.3 129.7 132.5 3.76 157.2 153.2 154.5 155.8 8.48 125.0 123.0 118.7 122.2 138.3 135.9 154.6 127.5 138.0 136.4 155.6 127.9 139.2 136.1 156.7 127.0 140.3 135.9 158.3 126.0 139.1 137.6 159.3 128.0 138.6 138.2 160.2 128.5 140.2 140.6 138.7 138.0 161.1 128.6 127.7 40 41 42 43 44 45 46 47 48 49 Nondurable goods materials Textile, paper, and chemical materials. Textile materials Paper materials Chemical materials 50 51 52 53 54 Containers, nondurable Nondurable materials n.e.c Energy materials Primary energy Converted fuel materials 55 56 57 58 Supplementary groups Home goods and clothing Energy, total Products Materials For NOTE see opposite page. 153.1 146.5 148.3 149.2 152.1 153.5 154.7 155.6 157.0 158.1 160.3 161.2 157.1 150.1 152.6 153.8 157.0 157.6 158.2 158.4 159.2 159.8 161.1 166.2 160.9 165.6 165.5 163.0 164.1 167.4 169.9 168.8 168.6 169.0 140.3 154.9 156.7 147.3 147.4 148.5 166.0 167.6 170.1 150.5 151.6 153.4 128.2 129.1 131.2 156.9 147.5 171.6 153.3 Output 2.13 A49 Continued Grouping 1967 proportion SIC code 1978 average» 1977 Nov. Dec. 1978 Jan. 1978 June July Aug. 1979 r Dec.P Jan.e Sept. Oct. 142.1 124.1 162.3 184.4 144.1 144.0 144.2 143.4 127.6 127.3 127.0 124.0 162.4 162.7 163.4 165.0 184.1 Nov. Index (1967 = 100) MAJOR INDUSTRY 135.5 118.8 154.2 173.3 12.05 141.4 6.36 124.1 5.69 160.8 3.88 5 Manufacturing., 6 Nondurable.. 7 Durable 87.95 145.6 139.9 140.5 138.7 145.5 146.7 147.6 148.7 149.5 150.4 151.5 151.6 35.97 154.7 150.1 150.9 149.8 154.9 155.0 155.6 157.1 157.4 158.4 158.9 159.7 51.98 139.3 132.7 133.4 131.1 139.0 141.1 142.2 142.8 144.0 144.9 146.4 146.2 8 9 10 11 Mining Metal mining Coal Oil and gas extraction Stone and earth minerals. 12 13 14 15 16 Nondurable manufactures Foods Tobacco products Textile mill products... Apparel products Paper and products 17 18 19 20 21 22 23 24 25 Printing and publishing Chemicals and products... Petroleum products Rubber & plastic products. Leather and products Durable manufactures Ordnance, private & government. Lumber and products Furniture and fixtures Clay, glass, stone products 10 11, 12 13 14 .51 .69 4.40 .75 133.9 113.4 156.7 175.9 137.4 115.0 162.3 183.6 142.5 128.0 158.6 180.1 142.6 127.1 159.9 182.1 142.5 126.0 160.8 183.2 1 Mining and utilities., 2 Mining 3 Utilities 4 Electric 121.0 84.8 104.3 121.4 121.1 117.0 117.9 115.8 140.6 74.6 54.8 136.4 131.7 124.9 124.5 117.8 118.4 121.1 127.1 126.8 126.2 131.0 127.2 126.5 130.0 130.7 131.3 131.6 115.6 114.7 124.9 133.8 122.1 144.0 124.5 134.0 125.3 145.1 123.8 132.9 144.2 145.1 121.5 144.1 144.1 123.9 146.8 117.2 123.2 123.0 133.6 20 21 22 23 26 8.75 142.8 139.4 .67 117.5 2.68 140.0 141.6 3.31 125.1 3.21 144.5 137.8 140.4 120.6 143.7 125.8 138.6 139.3 113.4 137.1 118.6 139.9 141.8 122.7 140.4 126.8 148.0 142.9 120.8 141.0 124.5 140.5 144.0 118.6 139.5 127.2 141.9 144.4 120.6 142.2 130.9 142.3 143.2 119.0 142.1 130.6 145.8 27 28 29 30 31 4.72 7.74 1.79 2.24 .86 127.5 183.0 139.3 240.1 77.3 129.9 184.4 139.7 238.7 74.5 128.7 191.1 142.8 255.5 75.1 130.3 192.3 144.3 259.1 74.5 129.5 192.2 144.1 261.1 74.0 131.0 194.2 147.1 263.1 74.1 130.5 132.1 133.3 134.2 195.9 197.8 196.9 147.9 148.2 149.7 148.5 264.1 262.2 261.6 73.8 74.0 73.5 129.9 190.6 144.1 254.2 74.1 126.2 183.1 140.5 238.5 78.1 145.3 i47.i 19,91 24 25 32 3.64 73.7 74.1 73.8 72.3 74.7 75.2 75.2 74.3 73.9 73.6 74.2 1.64 138.8 137.5 138.1 138.5 138.7 138.1 136.9 139.2 141.2 142.5 145.3 1.37 154.7 146.0 146.6 146.4 156.2 158.1 159.0 160.7 160.9 157.6 156.6 2.74 159.2 152.8 152.1 152.2 159.8 158.8 159.5 160.9 162.1 166.3 168.0 146.0 74.6 26 27 28 29 30 Primary metals Iron and steel Fabricated metal products. Nonelectrical machinery... Electrical machinery 33 331, 2 34 35 36 6.57 4.21 5.93 9.15 8.05 119.1 113.2 142.6 155.6 154.2 111.2 104.3 135.8 149.7 146.0 111.0 107.4 117.5 103.8 99.5 114.5 136.4 136.9 142.3 151.7 150.1 154.6 147.3 144.0 154.1 123.0 119.0 144.0 156.1 157.9 126.0 120.9 145.8 157.3 156.9 127.9 123.2 146.3 158.7 158.3 131.8 126.7 148.1 161.4 161.8 128.9 31 32 33 34 35 Transportation equipment Motor vehicles & parts Aerospace & misc. trans, eq.. Instruments Miscellaneous mfrs 37 371 372-9 38 39 9.27 4.50 4.77 2.11 1.51 130.5 168.2 94.9 171.6 153.2 122.0 163.0 83.3 163.1 151.8 122.2 161.8 84.9 164.7 152.5 130.4 167.7 95.0 170.9 153.5 132.1 169.7 96.5 172.2 153.2 133.4 171.0 98.3 175.4 153.8 132.8 137.0 139.3 139.3 168.9 176.8 181.4 179.3 98.9 99.6 99.7 U 1.7 174.6 175.3 176.2 178.9 154.1 153.9 152.1 153.2 137.1 173.5 103.0 180.3 155.3 116.2 146.6 87.6 163.4 153.0 128.6 123.8 146.0 160.3 157.9 128.9 123.8 146.9 160.6 159.1 i 48.7 162.5 162.9 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 36 Products, total. Final 37 ™ • products Consumer goods. 38 Equipment 39 40 Intermediate products. . 1507.4 i390.9 1277.5 U13.4 609.3 469.1 324.0 145.1 591.3 457.3 320.0 137.3 1116.6 140.3 134.1 i 1972 dollars. NOTE. Published groupings include some series and subtotals not 594.7 458.7 320.4 138.2 582.0 445.1 311.2 133.9 608.9 468.9 323.0 146.0 610.3 469.6 323.4 146.4 135.9 136.7 140.3 140.7 613.3 472.2 324.7 147.5 613.6 471.8 324.4 147.7 141.4 141.9 621.3 478.8 328.1 150.6 625.9 482.2 331.0 151.2 628.9 630.6 483.8 484.6 331.8 332.1 151.8 152.3 142.6 143.8 145.3 146.3 shown separately. For description and historical data, see Industrial Production—1976 Revision (Board of Governors of the Federal Reserve System: Washington, D.C.), Dec. 1977. A50 2.14 Domestic Nonfinancial Statistics • February 1979 HOUSING A N D CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1976 1977 1978 1978 Item June July Aug. Sept. Oct. Nov.' Dec. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 2 1-family 3 2-or-more-family 1,296 894 402 18,133 12,265 5,861 1,658 1,078 581 1,821 1,123 698 1,632 1,035 597 1,563 1,020 543 1,731 1,092 639 1,719 1,127 592 1,724 1,114 610 1,680 1,158 522 4 Started 5 1-family 6 2-or-more-family 1,538 1,163 377 1,986 1,451 535 2,019 1,433 586 2,124 1,441 693 2,119 1,453 666 2,025 1,440 585 2,075 1,463 612 2,095 1,459 636 2,155 1,558 597 2,125 1,533 592 7 Under construction, end of period 8 1-family 9 2-or-more-family 1,147 655 492 1,442 829 613 n.a. n.a. n.a. 1,296 774 522 1,298 779 520 1,298 786 513 1,305 '782 '542 '1,322 '780 '523 1,305 782 523 n.a. n.a. n.a. 1,362 1,026 336 1,652 1,254 398 n.a. n.a. n.a. 1,890 1,344 546 1,943 1,289 654 1,967 1,364 603 1,971 1,447 524 1,842 1,397 445 1,812 1,324 488 n.a. n.a. n.a. 246 277 276 263 232 283 272 300 312 308 639 433 819 407 817 423 831 418 789 418 785 419 793 420 975 411 803 416 819 420 44.2 41.6 48.9 48.2 55.9 n.a. 56.7 54.8 56.1 '57.3 '58.3 58.7 n.a. 61.1 n.a. 48.1 54.4 62.7 63.2 62.9 63.0 '64.4 '65.8 66.3 67.6 3,002 3,572 3,905 3,780 3,890 4,080 3,950 4,290 4,350 4,160 38.1 42.2 42.9 47.9 48.7 55.1 48.4 55.1 49.4 56.5 50.3 57.5 50.2 57.7 50.1 57.3 50.7 57.4 50.9 58.1 10 Completed 11 1-family 12 2-or-more-family 13 Mobile homes shipped Merchant builder activity in 1-family units: Number sold Number for sale, end of 2period 1. Price (thous. of dollars) Median: Units sold Units for sale Average: Units sold 14 15 16 17 13 r EXISTING UNITS (1-family) 19 Number sold Price of units sold (thous. of dollars):2 20 Median 21 Average Value of new construction (millions of dollars) 4 CONSTRUCTION 22 Total put in place 148,778 172,552 201,538 206,314 210,192 208,724 209,227 '209,815 212,788 215,037 23 Private 24 Residential 25 Nonresidential, total Buildings: 26 Industrial 27 Commercial 28 Other 29 Public utilities and other 110,416 60,519 49,897 134,723 80,957 53,766 156,801 92,658 64,143 161,064 95,357 65,707 161,804 95,888 65,916 160,562 95,011 65,551 161,258 94,249 67,009 r 161,909 '93,568 68,341 164,875 95,401 69,474 168,001 96,819 71,182 7,182 12,757 6,155 23,803 7,713 14,789 6,200 25,064 10,763 18,308 6,661 28,411 11,335 19,246 6,761 28,365 11,170 19,463 7,036 28,247 12,043 18,835 6,721 27,952 12,634 18,926 6,686 28,763 12,627 19,410 6,667 29,637 12,529 20,294 6,877 29,774 13,286 20,777 6,952 30,167 38,312 1,521 9,439 3,751 23,601 37,828 1,517 9,280 3,882 23,149 44,737 2,181 8,627 3,697 23,503 45,249 1,358 10,338 3,508 30,045 48,388 1,493 9,833 4,989 32,073 43,162 1,520 11,427 5,231 29,984 47,970 1,615 10,862 5,660 29,833 '47,970 '1,426 11,428 3,851 31,211 47,913 1,431 n.a. n.a. n.a. 47,036 1,458 n.a. n.a. n.a. 30 Public 31 Military 32 Highway 33 Conservation and development. . 34 Other 3 1 2 3 4 Not at annual rates. Not seasonally adjusted. Beginning Jan. 1977 Highway imputations are included in Other. Value of new construction data in recent periods may not be strictly comparable with data in prior periods due to 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 Bureau in July 1976. NOTE. Census Bureau estimates for all series except (a) mobile homes which are private, domestic shipments as reported by the Manufactured Housing Institute and seasonally adjusted by the Census Bureau, and (b) sales and prices of existing units, which are published by the National Association of Realtors. All back and current figures are available from originating agency. Permit authorizations are for 14,000 jurisdictions reporting to the Census Bureau. Prices 2.15 A51 CONSUMER A N D PRODUCER PRICES Percentage changes based on seasonally adjusted data, except as noted. 12 months to— 3 months (at annual rate) to— Item 1977 Dec. 1978 Dec. 1 month to 1978 Mar. June 1978 Sept. Dec. Aug. Sept. Oct. Nov. Dec. Index level Dec. 1978 (1967 = 100)2 Consumer prices-$ 1 All items 6.8 9.0 9.3 11.4 7.8 7.9 .6 .8 .8 .5 .6 202.9 2 Commodities 3 Food 4 Commodities less food 5 Durable 6 Nondurable 6.1 8.0 4.9 4.7 4.9 8.9 11.8 7.7 9.2 5.7 9.3 16.4 6.1 8.7 3.1 11.2 20.4 7.2 9.0 5.5 6.3 3.0 7.8 8.3 7.3 9.1 7.8 10.1 11.1 7.0 .4 .3 .5 .5 .5 .7 .5 .9 .9 .8 .7 .8 .7 .8 .5 .6 .3 .8 .8 .6 .8 .8 .9 1.0 .7 194.2 219.4 181.3 181.2 180.0 7 Services 8 Rent 9 Services less rent 7 9 6.5 8.1 9.3 7.3 9.6 9.1 6.2 9.6 11.8 8.5 12.2 10.3 7.5 10.8 5.7 7.1 5.4 .8 .5 .9 .8 .8 .9 .8 .6 .8 .4 .7 .3 .2 .5 .2 219.2 169.5 228.2 6.3 6.4 9.2 8.5 8.5 12.4 8.1 8.0 12.2 9.3 9.9 14.5 9.1 8.3 14.7 7.8 7.7 8.8 .7 .6 1.0 .8 .7 1.3 .8 .8 1.2 .6 .6 .7 .6 .5 .3 198.6 196.0 239.5 10 11 12 Other groupings: All items less food All items less food and energy Homeownership Producer prices, formerly Wholesale prices 4 13 Finished goods 6.6 9.1 8.7 10.3 7.4 10.1 .3 .8 .9 .8 .8 202.4 14 15 16 17 6.4 6.6 6.1 7.2 9.5 11.9 8.3 8.0 9.5 16.8 5.3 7.1 10.6 11.4 10.5 9.1 7.5 4.9 8.8 7.0 10.8 15.3 8.4 8.8 .2 -.4 .5 .4 .9 1.5 .5 .5 1.0 1.9 .5 .5 .7 .7 .7 .9 .9 1.0 .8 .7 200.4 215.8 190.8 206.9 5.4 6.4 10.1 8.2 11.0 8.1 9.5 7.2 7.3 6.9 13.2 10.8 .5 .7 .9 .6 1.5 1.0 .8 .9 .7 .7 228.0 223.5 6.8 1.4 15.5 18.3 10.7 25.1 14.9 26.6 16.9 2.8 19.6 21.0 .1 .0 1.6 1.8 2.1 3.9 1.2 .9 1.2 304.6 224.7 Consumer Foods Excluding foods Capital equipment 18 Materials 19 Intermediate1 Crude: 20 Nonfood 21 Food 1 Excludes intermediate materials for food manufacturing and manufactured animal feeds. 2 Not seasonally adjusted. 3 Beginning Jan. 1978 figures for consumer prices are those for all urban consumers. 4 The Producer Price Index has been revised back to 1974. SOURCE. Bureau of Labor Statistics. A52 2.16 Domestic Nonfinancial Statistics • February 1979 GROSS NATIONAL PRODUCT A N D INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1976 1977 Account 1977 1978 P Q3 1978 Q4 Ql Q2 Q3 Q4 p Gross national product 1 By source: Personal consumption expenditures Durable goods Nondurable goods Services 2 3 4 5 6 7 8 9 10 11 12 Gross private domestic investment Fixed investment Nonresidential Structures Producers' durable equipment Residential structures Nonfarm 1,700.1 1,887.2 2,106.6 1,916.8 1,958.1 1,992.0 2,087.5 2,136.1 2,210.8 1,090.2 156.6 442.6 491.0 1,206.5 178.4 479.0 549.2 1,339.7 197.6 525.8 616.3 1,214.5 177.4 479.7 557.5 1,255.2 187.2 496.9 571.1 1,276.7 183.5 501.4 591.8 1,322.9 197.8 519.3 605.8 1,356.9 199.5 531.7 625.8 1,402.2 209.6 550.8 641.8 243.0 232.8 164.6 57.3 107.3 68.2 65.8 297.8 282.3 190.4 63.9 126.5 91.9 88.9 344.5 328.8 222.0 77.5 144.5 106.8 103.6 309.7 287.8 193.5 65.4 128.1 94.3 91.2 313.5 300.5 200.3 67.4 132.8 100.2 97.5 322.7 306.0 205.6 68.5 137.1 100.3 97.3 345.4 325.3 220.1 76.6 143.5 105.3 102.1 350.1 336.5 227.5 80.9 146.6 109.0 105.7 359.9 347.4 235.0 84.0 151.0 112.5 109.3 13 14 Change in business inventories Nonfarm 10.2 12.2 15.6 15.0 15.7 16.7 21.9 22.0 13.1 10.4 16.7 16.9 20.1 22.1 13.6 14.6 12.4 13.1 15 16 17 Net exports of goods and services Exports Imports 7.4 163.2 155.7 -11.1 175.5 186.6 -11.8 205.2 217.0 -7.0 180.8 187.8 —23.2 172.1 195.2 -24.1 181.7 205.8 -5.5 205.4 210.9 -10.7 210.1 220.8 -6.9 223.5 230.4 18 19 20 Government purchases of goods and services. . Federal State and local 359.5 129.9 229.6 394.0 145.1 248.9 434.2 154.0 280.2 399.5 146.8 252.7 412.5 152.2 260.3 416.7 151.5 265.2 424.7 147.2 277.6 439.8 154.0 285.8 455.6 163.4 292.2 1,689.9 760.3 304.6 455.7 778.0 161.9 1,871.6 832.6 341.3 491.3 862.8 191.8 2,090.9 917.5 376.3 541.2 962.9 226.2 1,894.9 844.7 346.5 498.2 875.3 196.8 1,945.0 859.6 347.4 512.2 893.6 204.9 1,975.3 861.8 351.2 510.6 926.4 203.8 2,067.4 912.2 375.8 536.4 952.0 223.4 2,122.5 927.3 380.1 547.2 973.7 235.0 2,198.4 968.6 398.0 570.6 999.4 242.8 10.2 5.3 4.9 15.6 8.4 7.2 15.7 11.5 4.2 21.9 11.9 10.0 13.1 6.3 6.8 16.7 14 8 1.9 20.1 10.8 9.3 13.6 10.2 3.4 12.4 10.1 2.4 1,271.0 1,332.7 1,385.1 1,343.9 1,354.5 1,354.2 1,382.6 1,391.4 1,412.2 By major type of product: Final sales, total Goods Durable Nondurable Services Structures 21 22 23 24 25 26 27 28 29 Change in business inventories Durable goods Nondurable goods 30 MEMO: Total GNP in 1972 dollars National income 31 Total 1,359,2 1,515.3 1,703.6 1,537.6 1,576.9 1,603.1 1,688.1 1,728.4 32 Compensation of employees 33 Wages and salaries 34 Government and government enterprises .. 35 Other 36 Supplement to wages and salaries 37 Employer contributions for social insurance 38 Other labor income 1,036.8 890.1 187.6 702.5 146.7 1,153.4 983.6 200.8 782.9 169.8 1,301.2 1,100.7 216.1 884.6 200.5 1,165.8 993.6 201.7 791.9 172.2 1,199.7 1,021.2 208.1 813.1 178.4 1,241.0 1,050.8 211.4 839.3 190.2 1,287.8 1,090.2 213.9 876.3 197.6 1,317.1 1,113.4 216.8 896.6 203.6 69.7 77.0 79.4 90.4 94.5 105.9 79.9 92.2 82.4 96.1 90.2 100.0 93.6 104.0 95.7 107.9 88.6 70.2 18.4 99.8 79.5 20.3 112.9 87.8 25.1 97.2 80.8 16.5 107.3 82.3 25.1 105.0 83.1 21.9 110.1 86.1 24.0 114.5 89.6 25.0 39 Proprietors' income1 40 Business and professional1 41 Farm1 42 Rental income of persons2 43 Corporate profits1 3 44 Profits before tax 45 Inventory valuation adjustment 46 Capital consumption adjustment 47 Net interest 22.5 22.5 23.4 22.4 22.7 22.8 22.2 24.3 127.0 155.9 -14.5 -14.4 144.2 173.9 -14.8 -14.9 160.0 202.4 -24.3 -18.1 154.8 177.5 -7.7 -15.0 148.2 178.3 -14.8 -15.3 132.6 172.1 -23.5 -16.1 163.4 205.5 -24.9 -17.2 165.2 205.4 -20.9 -19.3 84.3 95.4 106.1 97.3 99.0 101.7 104.6 107.4 1 With inventory valuation and capital consumption adjustments. With capital consumption adjustments. 2 3 For after-tax profits, dividends, etc., see Table 1.50. SOURCE. Survey of Current Business (U.S. Dept. of Commerce). National Income Accounts 2.17 A53 PERSONAL INCOME A N D SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1978 1977 1976 1977 1978*' Account Q3 Q4 Ql Q2 Q3 Q4f Personal income and saving 1,380.9 1,529.0 1,707.3 1,543.7 1,593.0 1,628.9 1,682.4 1 ,731.7 1,786.4 890.1 307.5 237.5 216.4 178.6 187.6 983.6 343.7 266.3 239.1 200.1 200.8 1,100.7 390.1 299 J 268.7 225.8 216.1 993.6 348.3 269.3 241.2 202.3 201.7 1,021.2 357.1 277.3 247.5 208.5 208.1 1,050.8 365.9 286.9 257.0 216.5 211.4 1,090.2 387.0 296.1 266.4 222.8 213.9 1,113.2 396.4 302.0 271.6 228.5 216.7 1,148.5 410.8 313.6 279.9 235.6 222.2 77.0 90.4 105.9 92.2 96.1 100.0 104.0 107.9 111.8 88.6 70.2 18.4 99.8 79.5 20.3 112.9 87.8 25.1 97.2 80.8 16.5 107.3 82.3 25.1 105.0 83.1 21.9 110.1 86.1 24.0 114.5 89.6 25.0 121.9 92.4 29.5 12 Rental income of persons2 22.5 22.5 23.4 22.4 22.7 22.8 22.2 24.3 24.4 13 Dividends 37.9 43.7 49.3 44.1 46.3 47.0 48.1 50.1 51.9 14 Personal interest income 126.3 141.2 158.9 143.6 146.0 151.4 156.3 161.7 166.3 15 Transfer payments 16 Old-age survivors, disability, and health insurance benefits 193.9 208.8 226.0 211.9 215.9 219.2 220.6 230.4 233.6 92.9 105.0 117.3 108.5 110.1 112.1 113.7 121.1 122.4 55.5 61.0 69.7 61.4 62.6 67.2 69.2 70.5 72.0 1,682.4 1 ,731.7 1,786.4 1 Total personal income 2 Wage and salary disbursements 3 Commodity-producing industries 4 Manufacturing......................... 6 7 Service industries Government and government enterprises 8 Other labor income Business and professional1 Farm 1 10 11 17 LESS: Personal contributions for social insurance 18 EQUALS: Personal income 1,380.9 1,529.0 1,707.3 1,543.7 1,593.0 1,628.9 196.5 226.0 256.2 224.6 233.3 237.3 249.1 263.2 275.0 20 EQUALS: Disposable personal income 1,184.4 1,303.0 1,451.2 1,319.1 1,359.6 1,391.6 1,433.3 1 ,468.4 1,511.4 21 LESS: Personal outlays 1,116.3 1,236.1 1,374.4 1,244.8 1,285.9 1,309.2 1,357.0 1 ,392.5 1,439.2 22 EQUALS : Personal saving 68.0 66.9 76.7 74.3 73.7 82.4 76.3 76.0 72.3 5,906 3,808 4,136 5.7 6,144 3,954 4,271 5.1 6,336 4,077 4,418 5.3 6,191 3,953 4,293 5.6 6,226 4,030 4,365 5.4 6,215 4,009 4,370 5.9 6,334 4,060 4,399 5.3 6,360 4,092 4,428 5.2 6,440 4,150 4,474 4.8 19 LESS: Personal tax and nontax payments.... MEMO ITEMS : 23 24 Per capita (1972 dollars): Gross national product Personal consumption expenditures 26 Saving rate (per cent) Gross saving 27 Gross private saving. 28 29 30 Personal saving Undistributed corporate profits1 Corporate inventory valuation adjustment.... 31 32 33 Capital consumption allowances: Corporate Noncorporate Wage accruals less disbursements 34 Government surplus, or deficit (—), national income and product accounts 35 Federal 36 State and local 270.7 290.8 320.4 310.7 304.3 305.4 319.9 325.7 68.0 24.8 -14.5 66.9 28.7 -14.8 76.7 26.7 -24.3 74.3 38.0 -7.7 73.7 28.0 -14.8 82.4 15.6 -23.5 76.3 30.3 -24.9 76.0 29.0 -20.9 111.5 66.3 120.9 74.3 132.5 122.6 75.9 124.6 77.9 127.4 79.9 130.5 82.8 134.7 84.4 -1.5 -29.4 27.8 -25.2 -56.4 31.2 -29.6 -58.6 29.0 -21.1 -48.1 29.6 -52.6 31.5 6.2 -23.6 29.8 .6 -22.8 23.4 241.7 243.0 -1.2 276.9 297.8 -20.9 319.7 344.5 -24.8 292.6 309.7 -17.1 279.5 313.5 -34.1 286.4 322.1 -36.3 326.6 345.4 -18.9 326.6 350.1 -23.5 4.2 4.7 7.1 4.8 2.2 .5 .4 -33.2 -53.8 20.7 -18.6 86.1 37 Capital grants received by the United States, net 38 Investment 39 Gross private domestic. 40 Net foreign 41 Statistical discrepancy. 1 2 With inventory valuation and capital consumption adjustments. With capital consumption adjustment. SOURCE. Survey of Current Business (U.S. Dept. of Commerce). A54 3.10 International Statistics • February 1979 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted. 1 Item credits or debits 1975 1977 1976 1978 1977 Q2 Ql Q4 Q3 1 Merchandise exports 2 Merchandise imports 3 Merchandise trade balance 2 . 107,088 98,041 9,047 114,694 124,047 -9,353 120,576 151,706 -31,130 31,009 38,277 -7,268 29,461 39,664 -10,203 30,664 41,865 -11,201 35,067 42,869 -7,802 4 Military transactions, net 5 Investment income, net 3 6 Other service transactions, net -876 12,795 2,095 312 15,933 2,469 1,334 17,507 1,705 467 4,609 583 5 3,813 482 210 4,877 538 592 4,583 842 7 Balance on goods and services3,4 23,060 9,361 -10,585 -1,609 -5,903 -5,576 -1,785 -1,721 -2,894 -1,878 -3,145 -1,932 -2,776 -490 -787 -473 -591 -504 -778 -536 -781 10 Balance on current account3. 11 Not seasonally adjusted3.. 18,445 4,339 -15,292 -2,886 -5,196 -6,967 -6,858 -3,102 -5,245 -6,382 -2,656 12 Change in U.S. government assets, other than official reserve assets, net (increase, —) -3,470 -4,213 -1,098 -838 -607 -2,530 8 Remittances, pensions, and other transfers 9 U.S. government grants (excluding military). 13 Change in U.S. official reserve assets (increase, —) 14 Gold 15 Special Drawing Rights (SDRs) 16 Reserve position in International Monetary Fund (IMF).. 17 Foreign currencies -466 -75 -78 -2,212 -240 -66 -3,679 -231 151 -294 302 -9 133 27 -118 -121 -896 -1,176 246 329 -29 42 47 -16 -62 -104 437 -4 -60 324 18 Change in U.S. private assets abroad (increase, —) 3 . -35,368 -43,865 -30,740 -5,668 -13,862 -14,386 -5,287 19 Bank-reported claims -13,532 -21,368 -11,427 -1,779 -8,750 -6,270 -503 20 21 22 23 24 Nonbank-reported claims Long-term Short-term U.S. purchase of foreign securities, net. U.S. direct investments abroad, n e t 3 . . . -7,557 -366 -991 -6,235 -14,244 -2,030 -1,700 5 25 -2,035 -1,725 -8,852 -5,398 -11,614 -12,215 1,389 205 1,184 -2,165 -3,113 -1,184 -279 -905 -731 -3,197 —2,222 25 Change in foreign official assets in the United States (increase, +) 26 U.S. Treasury securities 27 Other U.S. government obligations 28 Other U.S. government liabilities5 29 Other U.S. liabilities reported by U.S. banks 30 Other foreign official assets6 31 Change in foreign private assets in the United States (increase, + ) 3 -57 -2,165 -949 -4,945 267 80 187 -1,103 -3,948 6,907 4,408 905 1,647 -2,158 2,104 18,073 9,333 573 4,993 969 2,205 37,124 30,294 2,308 1,644 773 2,105 8,246 6,948 627 332 -163 502 15,543 12,900 973 390 909 371 15,760 12,965 117 804 1,456 418 -5,685 -5,728 211 -312 -493 637 8,643 18,897 13,746 6,005 4,522 2,336 6,090 32 U.S. bank-reported liabilities. 628 10,990 6,719 2,640 3,143 -314 1,836 33 34 35 36 U.S. nonbank-reported liabilities Long-term Short-term Foreign private purchases of U.S. Treasury securities, net Foreign purchases of other U.S. securities, net Foreign direct investments in the United States, net 3 319 406 257 590 -620 18 877 572 425 -242 667 495 38 457 -68 -87 -507 -958 451 2,590 2,503 2,603 2,783 1,284 4,347 563 2,869 3,338 1,251 513 1,012 -299 803 450 881 462 812 847 1,308 1,852 5,449 9,300 -927 -4,751 -2,229 1,602 2,276 3,798 8.830 5,449 9,300 -927 -2,522 -674 3,638 8.831 -607 5,259 -2,530 13,080 -231 35,480 151 7,914 15,153 246 14,956 329 -5,373 7,092 9,581 6,733 ,438 1,024 1,963 -2,838 2,207 373 194 31 71 75 57 37 38 39 Allocation of SDRs 40 Discrepancy 41 Owing to seasonal adjustments 42 Statistical discrepancy in recorded data before seasonal adjustment 160 248 316 -1 MEMO ITEMS: Changes in official assets: 43 U.S. official reserve assets (increase, —) 44 Foreign official assets in the United States (increase, + ) . 45 Changes in Organization of Petroleum Exporting Countries (OPEC) official assets in the Unites States (part of line 25 above) 46 Transfers under military grant programs (excluded from lines 1, 4, and 9 above) 1 Seasonal factors are no longer calculated for lines 13 through 46. Data are on an international accounts (IA) basis. Differs from the Census basis primarily because the IA basis includes imports into the U.S. Virgin Islands, and it excludes military exports, which are part of line3 4. Includes reinvested earnings of incorporated affiliates. 4 Differs from the definition of "net exports of goods and services" in the national income and product (GNP) account. The GNP definition 2 excludes certain military sales to Israel from exports and excludes U.S. government interest payments from imports. 5 Primarily associated with military sales contracts and other transactions arranged with or through foreign official agencies. 6 Consists of investments in U.S. corporate stocks and in debt securities of private corporations and state and local governments. NOTE. Data are from Bureau of Economic Analysis, Survey of Current Business (U.S. Department of Commerce). Trade and Reserve Assets 3.11 A55 U.S. FOREIGN TRADE Millions of dollars; monthly data are seasonally adjusted. 1978 Item 1976 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 115,156 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 121,009 -5,853 1977 r r 1978 121,150 143,575 July Aug. Sept. Oct. Nov. Dec. 12,126 11,793 12,469 13,429 13,011 13,262 13,148 147,685 172,026 13,723 14,779 14,090 15,120 15,138 15,207 15,189 —26,535 28,451 -1,597 -2,987 -1,621 -1,691 -2,127 -1,946 -2,040 NOTE. Bureau of Census data reported on a free-alongside-ship (f.a.s.) value basis. Effective January 1978, major changes were made in coverage, reporting, and compiling procedures. The internationalaccounts-basis data adjust the Census basis data for reasons of coverage and timing. On the export side, the largest adjustments are: (a) the addition of exports to Canada not covered in Census statistics, and (b) the exclusion of military exports (which are combined with other military transactions 3.12 June and are reported separately in the "service account"). On the import side, the largest single adjustment is the addition of imports into the Virgin Islands (largely oil for a refinery on St. Croix), which are not included in Census statistics. SOURCE. FT 900 "Summary of U.S. Export and Import Merchandise Trade" (U.S. Dept. of Commerce, Bureau of the Census). U.S. RESERVE ASSETS Millions of dollars, end of period 1978 Type 1975 1 Total 2 Gold stock, including Stabilization Fund 1 1976 1977 1979 July Aug. Sept. Oct. Nov. Dec. Jan .P 3 18,650 3 20,468 16,226 18,747 19,312 18,832 18,783 18,850 18,935 17,967 Exchange 11,599 11,598 11,719 11,693 11,679 11,668 11,655 11,642 11,671 11,592 3 Special Drawing Rights 2 2,335 2,395 2,629 2,860 2,885 2,942 3,097 1,522 31,558 32,661 4 Reserve position in International Monetary Fund 2,212 4,434 4,946 4,177 4,196 4,214 4,147 1,099 31,047 3 1,017 80 320 18 102 23 26 36 3,704 4,374 5,198 5 Convertible foreign currencies4 1 Gold held under earmark at F.R. Banks for foreign and international accounts is not included in the gold stock of the United States; see table 3.24. 2 Includes allocations by the International Monetary Fund (IMF) of SDR's as follows: $867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; and $710 million on Jan. 1, 1972; plus net transactions in SDRs. 3 Beginning July 1974, the IMF adopted a technique for valuing the SDR based on a weighted average of exchange rates for the currencies of 16 member countries. The U.S. SDR holdings and reserve position in the4 IMF also are valued on this basis beginning July 1974. Beginning November 1978, valued at current market exchange rates. A56 3.13 International Statistics • February 1979 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period Asset account 1975 1976 1978 1977 May 2 June July Aug. Sept. Oct. All foreign countries 1 Total, all currencies 2 3 4 Claims on United States Parent bank Other 5 6 7 8 9 Claims on foreigners Other branches of parent bank Banks Public borrowers1 Nonbank foreigners 10 Other assets 11 Total payable in U.S. dollars 12 13 14 Claims on United States Parent bank Other 15 16 17 18 19 Claims on foreigners Other branches of parent bank Banks Public borrowers1 Nonbank foreigners 20 Other assets 269,542 '274,937 176,493 219,420 258,897 259,442 271,696 6,743 3,665 3,078 7,889 4,323 3,566 11,623 7,806 3,817 8,727 4.863 3.864 10,891 6,750 4,141 9,254 5,096 4,158 163,391 34,508 69,206 5,792 53,886 204,486 45,955 83,765 10,613 64,153 238,848 55,772 91,883 14,634 76,560 241,774 52,713 91,912 21,139 76,010 251,783 55,357 96,638 22,654 77,134 250,700 55,236 94,659 r 23,288 '77,517 287,369 292,304 295,984 10,026 5,820 '4,206 14,976 10,693 '4,283 12,172 7,879 4,293 13,375 9,017 4,358 254,779 58,746 '92,803 '23,362 79,868 262,063 63,493 95,222 '23,896 '79,452 269,110 67,648 98,195 23,937 79,330 271,446 68,803 101,100 22,696 78,847 r 6,359 7,045 8,425 8,941 9,022 9,588 10,132 10,330 11,022 11,163 132,901 167,695 193,764 192,466 202,792 198,205 '200,787 212,063 210,938 218,266 6,408 3,628 2,780 7,595 4,264 3,332 11,049 7,692 3,357 8,035 A,1X2 3,323 10,107 6,580 3,527 8,473 4,906 3,567 9,221 '5,630 3,591 14,168 10,535 3,633 11,331 7,688 3,643 12,471 8,840 3,631 123,496 28,478 55,319 4,864 34,835 156,896 37,909 66,331 9,022 43,634 178,896 44,256 70,786 12,632 51,222 180,331 41,209 70,124 18,275 50,723 188,590 43,544 74,842 19,674 50,530 185,425 43,447 71,592 '20,291 r 50,095 187,038 46,326 '69,552 '20,263 50,897 193,457 50,880 71,892 '20,505 '50,180 194,877 52,887 72,641 20,290 49,059 200,788 54,986 76,429 19,367 50,006 2,997 3,204 3,820 4,100 4,095 4,307 4,528 4,438 4,730 5,007 r United Kingdom 21 Total, all currencies 22 23 24 Claims on United States Parent bank Other 25 26 27 28 29 Claims on foreigners Other branches of parent bank, Banks Public borrowers1 Nonbank foreigners 30 Other assets 31 Total payable in U.S. dollars 32 33 34 Claims on United States Parent bank Other 35 36 37 38 39 Claims on foreigners Other branches of parent bank. Banks Public borrowers1 Nonbank foreigners 40 Other assets 74,883 81,466 90,933 89,645 93,538 92,989 93,341 99,084 101,887 102,032 2,392 1,449 943 3,354 2,376 978 4,341 3,518 823 2,333 1,476 857 3,142 2,279 863 2,615 1,515 1,100 2,626 1,597 1,029 2,940 2,014 926 3,119 2,230 889 3,706 2,119 921 70,331 17,557 35,904 881 15,990 75,859 19,753 38,089 1,274 16,743 84.016 22.017 39,899 2,206 19,895 84,700 19,550 40,807 4,150 20,193 87,808 19,944 43,044 4,559 20,261 87,479 20,438 42,462 '4,637 '19,942 87,769 21,661 '40,350 '4,583 21,175 93,364 24,691 42,677 x '4,549 '21,447 95,774 26,422 44,020 4,695 20,637 95,220 26,077 44,287 4,237 20,619 2,159 2,253 2,576 2,612 2,588 2,895 2,946 2,ISO 2,994 3,106 57,361 61,587 66,635 63,565 67,016 65,452 64,457 70,008 70,209 71,761 2,273 1,445 828 3,275 2,374 902 4,100 3,431 669 2,163 1,452 711 2,870 2,178 692 2,321 1,386 935 2,337 1,483 854 2,598 1,895 703 2,877 2,187 690 3,475 2,727 748 54,121 15,645 28,224 648 9,604 57,488 17,249 28,983 846 10,410 61,408 18,947 28,530 1,669 12,263 60,277 16,406 28,324 3,254 12,293 63,043 17,025 30,686 3,525 11,807 61,938 17,438 29,455 '3,660 '11,385 60,907 18,305 '27,268 '3,544 11,790 66,242 20,934 29,859 '3,471 '11,978 66,132 21,377 29,680 3,586 11,489 67,031 21,491 30,480 3,227 11,833 967 824 1,126 1,125 1,103 1,193 1,213 1,168 1,200 1,255 Bahamas and Caymans 41 Total, all currencies 42 43 44 Claims on United States. Parent bank.. Other 45 46 47 48 49 Claims on foreigners Other branches of parent bank. Banks Public borrowers1 Nonbank foreigners 50 Other assets 51 Total payable in U.S. dollars. For notes see opposite page. 45,203 66,774 79,052 82,083 84,692 82,145 85,654 88,755 86,290 89,560 3,229 1,477 1,752 3,508 1,141 2,367 5,782 3,051 2,731 5,237 2,502 2,735 6,441 3,449 2,992 5,132 2,381 2,751 5,620 2,751 2,869 10,053 7,090 2,963 7,250 4,255 2,995 7,461 4,399 3,062 41,040 5,411 16,298 3,576 15,756 62,048 8,144 25,354 7,105 21,445 71,671 11,120 27,939 9,109 23,503 74,846 10,580 29,045 11,424 23,797 76,282 10,803 30,307 12,394 22,IIS 74,988 10,292 29,302 12,599 22,795 77,949 12,134 29,749 12,461 23,605 76,651 12,348 29,All 12,362 22,469 76,863 12,618 30,314 12,092 21,839 79,890 13,433 33,025 11,534 21,898 933 1,217 1,599 2,000 1,969 2,025 2,085 2,051 2,177 2,209 1 41,887 62,705 73,987 76,660 79,277 76,494 79,701 83,007 80,222 83,568 Overseas Branches 3.13 A57 Continued Liability account 1975 1976 1978 1977 May 2 June July Aug. Sept. Oct. 274,937 287,369 NOV.P All foreign countries 52 Total, all currencies 219,420 258,897 259,442 271,696 269,542 32,719 19,773 12,946 44,154 24,542 19,613 49,907 28,422 ( 9,003 X 12,482 50,534 25,199 10,371 14,964 51,583 27,722 8,608 15,253 r 52,437 r 179,954 44,370 83,880 25,829 25,877 206,579 53,244 94,140 28,110 31,085 202,232 50,368 87,567 29,776 34,521 213,670 53,547 93.413 31.414 35,296 209,810 53,788 88,364 31,831 35,827 213,978 56,955 89,234 31,455 36,334 53 54 55 56 To United States Parent bank Other banks in United States. Nonbanks 20,221 12,165 } 8,057 57 58 59 60 61 To foreigners Other branches of parent bank Banks Official institutions Nonbank foreigners 149,815 34,111 72,259 22,773 20,672 62 Other liabilities 63 Total payable in U.S. dollars r 176,493 6,456 6,747 8,163 7,303 7,492 8,149 135,907 173,071 198,572 196,746 207,117 202,407 292,304 295,984 49,325 24,590 10,064 r 14,671 51,509 27,619 8,365 15,525 56,994 31,793 9,089 16,112 228,733 61,599 r 97,629 33,077 r 36,428 231,115 65,104 95,955 32,237 37,819 229,266 65,802 94,094 31,213 38,157 r 28,923 7,659 15,855 r r 8,522 9,311 9,680 9,724 204,946 215,496 215,517 222,887 r 50,329 r r 47,171 23,640 9,724 13,807 49,276 26,684 8,011 14,581 55,083 30,964 8,818 15,301 163,626 49,978 r 63,271 27,358 r 23,019 161,505 52,052 58,911 26,332 24,210 162,828 53,370 58,831 25,442 25,185 64 65 66 67 To United States Parent bank Other banks in United States. Nonbanks 19,503 11,939 } 7,564 31,932 19,559 12,373 42,881 24,213 18,669 48,278 27,787 ( 8,704 X 11,787 48,820 24,477 10,078 14,265 49,668 26,951 8,286 14,431 68 69 70 71 72 To foreigners Other branches of parent bank Banks Official institutions Nonbank foreigners 112,879 28,217 51,583 19,982 13,097 137,612 37,098 60,619 22,878 17,017 151,363 43,268 64,872 23,972 19,251 144,758 40,099 57,871 25,124 21,664 154,513 42,682 62,434 26,587 22,810 148,630 42,852 56,273 26,843 22,662 150,474 45,620 55,285 26,178 23,391 73 Other liabilities 3,526 3,527 4,328 3,710 3,784 4,109 4,143 4,699 4,736 4,976 28,031 7,286 15,012 r United Kingdom 74,883 81,466 90,933 89,645 93,538 92,989 93,341 99,084 101,887 102,032 75 76 77 78 To United States Parent bank Other banks in United States. Nonbanks 5,646 2,122 } 3,523 5,997 1,198 4,798 7,753 1,451 6,302 6,758 1,636 ( 2,346 X 2,776 8,174 1,822 3,273 3,079 8,011 1,959 2,987 3,065 6,978 1,905 2,290 2,783 8,033 1,872 3,150 3,011 8,347 2,176 2,949 3,222 9,053 2,367 3,234 3,452 79 80 81 82 83 To foreigners Other branches of parent bank Banks Official institutions Nonbank foreigners 67,240 6,494 32,964 16,553 11,229 73,228 7,092 36,259 17,273 12,605 80,736 9,376 37,893 18,318 15,149 80.108 9,009 35,980 19,087 16,032 82,703 9,700 36,856 20,074 16,073 81,847 10,098 34,662 20,863 16,224 82,991 11,708 35,293 19,863 16,127 87,678 12,006 37,677 21,493 16,502 89,942 12,269 39,276 21,193 17,204 89,347 13,153 38.167 20,182 17,845 84 Other liabilities 1,997 2,241 2,445 2,779 2,661 3,131 3,372 3,373 3,598 3,632 65,671 64,926 70,227 71,158 72,812 74 Total, all currencies 85 Total payable in U.S. dollars 57,820 63,174 67,573 64,025 67,936 86 87 88 89 To United States Parent bank Other banks in United States. Nonbanks 5,415 2,083 [ 3,332 5,849 1,182 4,667 7,480 1,416 6,064 6,446 1,609 ( 2,281 ( 2,556 7,852 1,794 3,176 2,882 7,652 1,926 2,904 2,822 6,606 1,852 2,209 2,545 7,650 1,805 3,092 2,753 7,985 2,116 2,902 2,967 8,666 2,321 3,178 3,167 90 91 92 93 94 To foreigners Other branches of parent bank Banks Official institutions Nonbank foreigners 51,447 5,442 23,330 14,498 8,176 56,372 5,874 25,527 15,423 9,547 58,977 7,505 25,608 15,482 10,382 56,274 6,696 22,554 15,908 11,116 58,856 7,259 23,472 16,866 11,259 56,636 7,696 20,527 17,397 11,016 57,015 9,163 20,601 16,113 11,138 61,231 9,317 22,936 17,659 11,319 61,765 9,301 23,259 17,106 12,099 62,631 10,302 23,044 16,317 12,968 95 Other liabilities 959 953 1,116 1,305 1,228 1,383 1,305 1,346 1,408 1,515 Bahamas and Caymans 45,203 66,774 79,052 82,083 84,692 82,145 85,654 88,755 86,290 89,560 97 98 99 100 To United States Parent bank Other banks in United States Nonbanks 11,147 7,628 } 3,520 22,721 16,161 6,560 32,176 37,350 20,956 23,255 ( 5,625 11,220 X 8,470 35,185 19,078 5,514 10,593 37,041 21,755 4,587 10,699 39,532 23,187 4,509 11,836 r 34,378 18,410 5,511 r 10,457 35,679 20,179 4,418 11,082 40,561 24,013 4,857 11,691 101 102 103 104 105 To foreigners Other branches of parent bank. Banks Official institutions Nonbank foreigners 32,949 10,569 16,825 3,308 2,248 42,899 13,801 21,760 3,573 3,765 45,292 12,816 24,717 3,000 4,759 43,394 11,250 21,452 4,419 6,273 48,088 11,657 25,752 4,583 6,096 43,649 11,165 21,951 4,221 6,312 44,597 11,436 21,884 4,598 6,679 r 48,955 15,635 22,471 4,440 6,409 47,317 14,715 21,998 4,340 6,264 106 Other liabilities 1,106 1,154 1,584 1,339 1,419 1,455 1,525 96 Total, all currencies 107 Total payable in U.S. dollars 1 42,197 63,417 74,463 In May 1978 a broader category of claims on foreign public borrowers, including corporations that are majority owned by foreign governments, replaced the previous, more narrowly defined claims on foreign official institutions. 78,254 80,650 78,131 81,314 52,574 14,762 '27,372 4,468 '5,972 r l,803 1,656 1,682 84,317 81,323 84,878 2 In May 1978 the exemption level for branches required to report was increased, which reduced the number of reporting branches. A58 3.14 International Statistics • February 1979 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period Item 1975 1976 1978 1977 June July Aug. Sept. Oct. NOV.P DecJ] A. By type 1 Total i 2 Liabilities 2reported by banks in the United States 3 U.S. Treasury bills and certificates3 U.S. Treasury bonds and notes: 4 Marketable 5 Nonmarketable4 6 U.S. securities other than U.S. Treasury securities5 82,572 95,634 131,090 140,571 144,138 146,084 145,210 152,460 156,555 162,391 16,262 34,199 17,231 37,725 18,003 47,820 18,808 55,594 19,445 56,842 20,049 56,299 19,752 55,014 22,300 57,976 21,694 62,943 22.957 67,906 6,671 19,976 11,788 20,648 32,157 20,443 32,836 19,284 34,149 19,214 34,860 20,375 35,564 20,304 36,141 21,426 36,209 20.993 35.838 20,970 5,464 8,242 12,667 14,049 14,488 14,501 14,576 14,617 14,716 14,720 B. By area 7 Total 8 9 10 11 12 13 Western Europe1 Canada Latin America and Caribbean Asia Africa Other countries6 1 2 82,572 95,634 131,090 140,571 144,138 146,084 145,210 152,460 156,555 162,391 45,701 3,132 4,461 24,411 2,983 1,884 45,882 3,406 4,926 37,767 1,893 1,760 Includes the Bank for International Settlements. 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. 70,748 2,334 4,649 50,693 1,742 924 74,455 2,593 4,668 56,199 1,689 967 75,739 2,490 4,629 58,081 2,220 979 79,723 2,071 4,621 56,848 2,036 785 80,267 1,497 3,898 56,808 2,006 734 85,303 2,619 4,611 57.011 2,184 732 88,697 2,446 4,496 57,830 2,301 785 93,122 2,486 4,993 58,613 2,443 734 5 Debt securities of U.S. govt, corporations and federally sponsored agencies, and U.S. corporate stocks and bonds. 6 Includes countries in Oceania and Eastern Europe. NOTE. Based on Treasury Dept. data and on data reported to the Treasury Dept. by banks (including Federal Reserve Banks) and securities dealers in the United States. For a description of the changes in the International Statistics tables, see July 1978 BULLETIN, p. 612. Nonbank-reported 3.15 Data A59 LIABILITIES TO FOREIGNERS Reported by Banks in the United States Payable in U.S. dollars Millions of dollars, end of period 1975 Item 1976 1978 1977 June A. 7 Banks' custody liabilities4 8 U.S. Treasury bills and certificates 5 9 Other negotiable and readily transferable instruments6 10 Other and regional 12 Banks' own liabilities. 13 Demand deposits... 14 Time deposits1 15 Other 2 16 Banks' custody liabilities4 17 U.S. Treasury bills and certificates 18 Other negotiable6 and readily transferable instruments 19 Other 20 Official institutions8 21 22 23 24 25 26 27 28 Banks' own liabilities. Demand deposits... 1 Time deposits Other2 Banks' custody liabilities4 U.S. Treasury bills and certificates 5 Other negotiable6 and readily transferable instruments Other 29 Banks 9. 30 31 32 33 34 35 36 37 38 39 Banks' own liabilities Unaffiliated foreign banks. Demand deposits 1 Time deposits Other2 41 42 43 44 Banks' own liabilities. Demand deposits... 1 Time deposits Other2 45 46 47 Banks' custody liabilities4 U.S. Treasury bills and certificates Other negotiable6 and readily transferable instruments Other Oct. Nov.f Dec.f By holder and type of liability 16,803 11,347 18,996 11,521 60,671 17,189 11,635 6,477 25,369 61,429 17,953 11,921 6,876 24,679 63,931 16,104 12,634 7,238 27,955 68,488 17,204 12,503 6,697 32,085 71,102 17,557 12,279 9,756 31,511 75,166 18,264 12,514 8,645 35,744 77,773 19,202 12,287 9,766 36,518 37,414 40,744 48,906 75,255 57,126 75,864 57,629 76,601 57,264 75,596 56,665 79,482 59,077 83,255 63,434 88,469 68,434 15,506 2,623 15,512 2,722 16,691 2,646 16,057 2,874 17,619 2,786 17,424 2,397 17,501 2,535 3,274 2,942 2,678 2,823 3,406 2,929 2,225 2,617 480 265 119 97 1,017 257 116 644 808 142 97 569 767 144 99 523 336 133 116 87 417 153 102 161 916 330 94 492 2,462 922 1,662 228 2,014 368 2,639 1,036 2,593 403 1,809 183 1,701 201 1,537 3 1,432 1 1,645 1 1,603 1 2,189 1 1,625 1 1,499 1 65,822 74,402 76,286 76,348 74,766 80,267 84,329 90,608 8,453 2,611 1,981 3,862 9,422 3,473 2,277 3,673 9,085 2,643 2,595 3,848 9,455 3,307 2,563 3,585 11,474 3,046 2,399 6,030 10,820 3,414 2,345 5,060 11,683 3,388 2,331 5,963 65,949 55,594 66.864 56,842 67,263 56,299 65,311 55,014 68,793 57,967 73,510 62,635 78,925 67,650 9,857 498 9,498 524 10,326 638 9,703 594 10,616 210 10,768 107 11,105 170 43,363 42,921 45.532 50,410 51,379 55,241 56,962 38,824 13,454 10,164 1,255 2,035 38,358 13,680 10,240 1,321 2,110 41,028 13,073 9,229 1,390 2,454 45,640 13.555 9,713 1,618 2,223 46,425 14,914 10,156 1,552 3,206 50,440 14,696 10,068 1,735 2,893 52,142 15,624 11,238 1,481 2,904 25,369 24,679 27,955 32,085 31,511 35,744 36,518 4,540 300 4,562 269 4,504 296 4,771 307 4,955 381 4,801 371 4,819 300 2,355 1,885 2,416 1,877 2.381 1,828 2,534 1,930 2,447 2,126 2,528 1,902 2,417 2,103 14,736 15,218 15,407 15,829 15,502 16,008 16,625 16,056 4,304 7,546 12,914 4,149 8,281 484 12,631 3,983 8,208 441 13,009 4,090 8,552 368 12,627 4,039 8,222 365 12,867 4,222 8,213 432 13,490 4,628 8,331 531 13,031 4,246 8,379 406 240 2,304 310 2,776 290 2,819 301 2,875 308 3,141 326 3,135 245 3,024 282 1,757 237 2,165 320 2,339 179 2,218 349 2,367 448 2,503 387 2,480 262 9,428 9,385 9,964 9,822 10,977 10,803 10,895 5,699 5,714 139 148 290 205 231 139 2,554 2,701 706 50,461 54,956 2,644 3,423 3,394 2,321 3,528 1,797 34,199 37,725 47,820 29,330 7,534 1,873 37,174 9,104 2,297 335 10,100 3,248 4,823 119 12,814 4,015 6,524 325 49 MEMO: Negotiable time certificates of deposit held in custody for foreigners 1 Excludes negotiable time certificates of deposit, which are included in 2"Other negotiable and readily transferable instruments." Includes borrowings under repurchase agreements. 3 U.S. banks: includes amounts due to own foreign branches and foreign subsidiaries consolidated in "Consolidated Report of Condition" filed with bank regulatory agencies. Agencies, branches, and majorityowned subsidiaries of foreign banks: principally amounts due to head office or parent foreign bank, and foreign branches, agencies or whollyowned subsidiaries of head office or parent foreign bank. 4 Financial claims on residents of the United States, other than longterm securities, held by or through reporting banks. 5 Includes nonmarketable certificates of indebtedness (including those payable in foreign currencies through 1974) and Treasury bills issued to official institutions of foreign countries. Sept. 13,564 10,267 42,335 10,933 2,040 Own foreign offices3 Banks' custody liabilities4 U.S. Treasury bills and certificates Other negotiable6 and readily transferable instruments Other 40 Other foreigners. 48 Aug. 95,590 110,657 126,168 135,926 137,293 140,532 144,084 150,584 158,421 166,242 All foreigners. 2 Banks' own liabilities. 3 Demand deposits... 4 Time deposits1 5 Other 2 6 Own foreign offices3 11 Nonmonetary international organizations7 July 141 6 Principally bankers acceptances, commercial paper, and negotiable time certificates of deposit. 7 Principally the International Bank for Reconstruction and Development, and the Inter-American and Asian Development Banks. 8 Foreign central banks and foreign central governments and the Bank for International Settlements. 9 Excludes central banks, which are included in "Official institutions." NOTE. Data for time deposits prior to April 1978 represent short-term only. For a description of the changes in the International Statistics tables, see July 1978 BULLETIN, p. 612. A60 3.15 International Statistics • February 1979 Continued Item 1975 1978 1977 1976 June July B. Aug. Sept. Oct. Nov.*3 By area and country 1 Total 95,590 110,657 126,168 1 3 5 , 9 2 6 137,293 140,532 144,084 150,584 158,421 2 Foreign countries. 89,891 104,943 122,893 132,983 134,615 137,709 140,678 147,655 156,196 44,072 759 2,893 329 391 7,726 4,543 284 1,059 3,407 994 193 423 2,277 8,476 60,295 318 2,531 770 323 5,269 7,239 603 6,857 2,869 944 273 619 2,712 12,343 130 14,125 232 1,804 98 236 64,302 351 2,756 1,335 352 6,550 10,029 597 6,869 3,118 1,869 191 64,662 312 2,211 1,542 407 7,353 9,727 646 7,036 3,078 1,737 227 709 3,340 67,339 424 2,174 1,593 416 7,989 10,766 69,099 431 2,368 1,673 415 8,060 11,206 865 7,394 2,756 1,208 521 765 3,341 13,077 226 11,802 167 2,497 65 262 73,408 473 2,464 1,734 424 8,421 13,345 887 7,346 2,523 1,210 386 702 3,187 14,314 164 12,438 158 2,887 82 262 78,418 514 2,471 1,827 388 8,817 15,652 907 7,761 2,518 1,102 379 885 3,216 6,867 126 2,970 40 197 47,076 346 2,187 356 416 4.876 6,241 403 3,182 3,003 782 239 559 1,692 9,460 166 10,018 189 2,673 51 236 2,919 4,659 4,607 5,816 5,623 5,890 5,122 7,418 8,001 25 Latin America and Caribbean 26 Argentina 27 Bahamas 28 Bermuda 29 Brazil 30 British West Indies 31 Chile 32 Colombia 33 Cuba 34 Ecuador 3 35 Guatemala 36 Jamaica3 37 Mexico 38 Netherlands Antilles4 39 Panama 40 Peru 41 Uruguay 42 Venezuela 43 Other Latin America and Caribbean. 15,028 1,146 1,874 184 1,219 1,311 319 417 6 19,132 1,534 2,770 23,670 1,416 3,596 321 1,396 3,998 360 25,425 1,692 3,954 396 1,220 A,169 316 1,424 7 325 448 66 2,776 320 2.386 282 24,831 1,550 3,629 383 1,295 4,009 380 1,429 9 378 415 75 2,921 435 2,639 309 27,259 1,453 4,601 372 1,382 5,474 346 1,486 10 347 419 59 3,171 28,470 1,650 4,880 387 1,441 5,919 333 1,483 31,111 1,504 6,309 425 1,234 6,692 341 3,157 1,606 3,229 1,530 29,284 1,393 7,249 409 1,350 5,380 351 1,431 7 405 347 78 3,112 317 2,741 321 197 2,560 1,637 44 Asia. 45 China (Mainland) 46 China (Taiwan) 47 Hong Kong 48 India 49 Indonesia 50 Israel 51 Japan 52 Korea 53 Philippines 54 Thailand 55 Middle East oil-exporting countries5. 56 Other Asia 35,171 47 1,195 1,191 798 597 519 20,374 714 640 320 7,267 1,510 33,463 44 34,630 49 1,319 1,368 899 575 453 19,937 790 594 352 6,911 1,384 34,843 51 762 309 440 19,755 736 566 296 6,719 1,364 33,438 46 1,280 1,230 833 348 432 19,890 776 623 290 6,350 1,341 44 979 681 3,013 594 28 175 73 1,365 778 2,578 463 67 160 52 1,198 638 2,645 417 74 238 45 1,270 601 2,540 322 84 266 39 1,230 600 2,636 312 30 294 43 1,335 622 3 Europe., 4 Austria 5 Belgium-Luxembourg.. 6 Denmark 7 Finland 8 France 9 Germany 10 Greece 11 Italy 12 Netherlands 13 Norway 14 Portugal 15 Spain 16 Sweden 17 Switzerland 18 Turkey 19 United Kingdom 20 Yugoslavia 21 Other Western Europe1 22 U.S.S.R 23 Other Eastern Europe2, 24 Canada. 118 218 1,438 1.877 337 1,021 6 1,221 688 3.385 12,415 110 11,471 229 1,666 66 255 11,888 147 11,770 192 1,935 55 222 826 8,055 3,240 1.516 324 752 3,355 12,102 137 10,956 149 2,311 46 210 7 15,810 163 12,826 190 2,719 73 198 1,612 120 320 6 330 2,070 129 1,115 243 172 3,309 1,393 2,870 158 1,167 257 245 3,118 1,797 2,876 196 2,331 287 243 2,929 2,167 22,384 123 1,025 605 115 369 387 10,207 390 700 252 7,355 856 29,766 48 990 894 638 340 392 14,363 438 30,488 53 1,013 1,094 961 410 559 14,616 602 687 264 8,979 33,665 53 57 Africa 58 Egypt 59 Morocco 60 South Africa 61 Zaire 62 Oil-exporting countries6. 63 Other Africa 3,369 342 68 166 62 2,240 491 2,298 333 87 141 36 1,116 585 2,535 404 2,360 402 28 64 Other countries.. 65 Australia 66 All other 2,119 2,006 113 2,012 1,905 107 1,297 1,140 158 1,414 1,211 203 1,315 1,158 157 1,180 1,051 130 1,090 899 191 1,189 915 213 1,187 950 236 67 Nonmonetary international and regional organizations 5,699 5,714 3,274 2,942 2,678 2,823 3,406 2,929 2,225 5,415 188 5,157 267 290 2,752 278 245 2,311 395 236 2,027 411 241 2,157 437 228 2,339 799 269 1,789 856 284 1,033 870 323 68 69 70 International Latin American7 regional. Other regional 96 628 277 9,360 1,398 includes the Bank for International Settlements. Beginning April 1978, also includes Eastern European countries not listed in line 23. 2 Beginning April 1978 comprises Bulgaria, Czechoslovakia, German Democratic Republic, Hungary, Poland, and Romania. 1978 InClUded i n " ° t h e r L a t i n A m e r i c a a n d Caribbean" through March 4 5 Includes Surinam through December 1975. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and. United Arab Emirates (Trucial States). 1,250 66 174 39 1,155 698 220 1,053 1,085 899 330 476 19,020 748 595 297 7,894 1,213 226 Dec.f 218 288 2,628 311 185 3,208 1.517 1,262 1,211 369 368 57 3,101 352 2,396 323 210 3,696 1,496 7 348 357 43 3,413 368 2,808 337 211 3,550 1,553 1,247 1,189 843 439 469 21,355 750 578 279 6,381 1,256 6 7 Comprises Algeria, Gabon, Libya, and Nigeria. Asian, African, Middle Eastern, and European regional organizations, except the Bank for International Settlements, which is included in "Other Western Europe." NOTE. For a description of the changes in the International Statistics tables, see July 1978 BULLETIN, p. 612. Nonbank-reported 3.16 Data A61 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States Payable in U.S. Dollars Millions of dollars, end of period 1978 Area and country 1977 1976 1975 June July Aug. Sept. Oct. Nov.f Dec.*5 1 58,308 79,301 90,206 87,212 87,349 91,844 94,399 96,820 105,338 114,174 2 Foreign countries 58,275 79,261 90,163 87,180 87,313 91,806 94,360 96,779 105,292 114,118 11,109 35 286 104 180 1,565 380 290 443 305 131 30 424 198 199 164 5,170 210 76 406 513 14,776 63 482 133 199 1,549 509 279 993 315 136 88 745 206 379 249 7,033 234 85 485 613 18,114 65 561 173 172 2,082 644 206 1,334 338 162 175 722 218 564 360 8,964 311 86 413 566 16,249 105 731 145 182 1,891 787 204 965 383 217 126 706 219 685 309 7,270 320 153 319 534 15,762 116 634 129 190 1,813 689 190 1,078 436 210 140 669 244 631 313 6,961 300 165 305 548 16,829 107 823 146 216 2,523 632 125 1,027 405 163 105 714 290 1,013 305 6,933 280 125 343 553 18,301 95 949 147 221 2,786 742 126 1,016 379 263 99 770 325 871 305 7,827 306 128 370 575 19,327 111 1,052 160 232 2,752 808 161 1,355 494 238 106 929 348 781 293 8,065 293 147 387 617 3 Europe 4 Austria Belgium-Luxembourg 5 6 Denmark 7 Finland France 8 9 Germany 10 Greece 11 Italy 12 Netherlands 13 Norway 14 Portugal Spain 15 16 Sweden 17 Switzerland 18 Turkey 19 United Kingdom 20 Yugoslavia 21 Other Western Europe 1 22 U.S.S.R 23 Other Eastern Europe2 20,504 142 1,232 193 260 2,716 838 134 1,453 602 282 180 980 465 1,045 283 8,356 302 107 321 612 24,105 147 1,198 242 305 3,690 900 164 1,506 675 299 171 1,100 537 1,282 273 10,080 363 178 364 631 2,834 3,319 3,355 2,493 3,116 3,343 3,448 3,586 4,552 5,140 25 Latin America and Caribbean 26 Argentina 27 Bahamas 28 Bermuda 29 Brazil 30 British West Indies 31 Chile 32 Colombia 33 Cuba 34 Ecuador 3 35 Guatemala 36 Jamaica3 37 Mexico 38 Netherlands Antilles4 39 Panama 40 Peru 41 Uruguay 42 Venezuela 43 Other Latin America and Caribbean 23,863 1,377 7,583 104 3,385 1,464 494 751 14 252 38,879 1,192 15,464 150 4,901 5,082 597 675 13 375 45,850 1,478 19,858 232 4,629 6,481 675 671 10 517 4,822 140 1,372 933 42 1,828 1,293 4,909 224 1,410 962 80 2,318 1,394 46,974 1,572 19,643 145 4,599 6,872 745 648 1 546 83 49 5,068 206 2,278 918 52 2,337 1,212 49,469 1,566 22,172 194 4,858 6,885 809 690 1 560 115 44 5,004 198 1,625 928 56 2,515 1,250 50,397 1,690 20,031 141 5,252 8,397 742 727 1 646 79 46 5,007 230 2,280 966 51 2,745 1,367 49,267 1,447 19,208 352 5,596 7,170 832 793 3,745 72 1,138 805 57 1,319 1,302 45,990 1,556 18,725 145 4,659 7,412 745 615 1 562 90 53 4,865 212 1,901 930 53 2,240 1,227 621 85 45 4,927 212 2,480 945 63 3,105 1,386 54,342 1,698 23,541 141 6,137 6,432 862 936 4 681 89 49 5,255 242 2,531 931 58 3,367 1,388 56,257 2,258 21,096 189 6,147 9,160 962 990 2 694 92 42 5,361 270 3,060 887 58 3,449 1,541 44 Asia 45 China (Mainland) 46 China (Taiwan) 47 Hong Kong India 48 49 Indonesia 50 Israel Japan 51 52 Korea 53 Philippines 54 Thailand Middle East oil-exporting countries5 55 56 Other Asia 17,706 22 1,053 289 57 246 721 10,944 1,791 534 520 744 785 19,204 3 1,344 316 69 218 755 11,040 1,978 719 442 1,459 863 19,236 10 1,719 543 53 232 584 9,839 2,336 594 633 1,746 947 19,317 13 1,343 769 80 146 468 10,023 2,328 "680 711 1,575 1,181 18,326 5 1,193 698 46 139 445 9,779 1,937 641 725 1,551 1,167 18,918 31 1,177 666 73 125 504 9,876 1,925 743 693 1,951 1,155 18,994 8 1,241 705 76 152 544 10,205 1,930 730 633 1,656 1,113 21,358 10 1,285 1,368 66 144 555 10,568 1,788 732 734 2,097 2,012 22,691 6 1,356 1,385 46 188 719 11,997 1,741 717 758 2,181 1,599 25,408 35 1,421 1,572 54 143 871 12,697 2,233 677 753 3,112 1,840 1,933 123 8 657 181 382 581 2,311 126 27 957 112 524 565 2,518 119 43 1,066 98 510 682 2,136 70 38 1,054 79 383 512 2,133 79 36 1,036 79 340 563 2,267 62 42 1,058 79 459 566 2,158 67 38 1,022 82 406 544 2,219 56 40 990 161 438 534 2,163 68 36 906 162 439 551 2,234 107 82 860 180 449 556 830 700 130 772 597 175 1,090 905 186 995 828 167 1,002 836 167 980 835 145 1,063 894 168 1,023 879 145 1,040 894 147 974 872 102 33 40 43 31 36 38 39 41 45 56 24 Canada 57 Africa 58 Egypt Morocco 59 60 South Africa 61 Zaire 62 Oil-exporting countries6 63 Other 64 Other countries 65 Australia 66 All other 67 Nonmonetary international and regional organizations7 1 Includes the Bank for International Settlements. Beginning April 1978, also includes Eastern European countries not listed in line 23. 2 Beginning April 1978 comprises Bulgaria, Czechoslovakia, German Democratic Republic, Hungary, Poland, and Romania. 3 Included in "Other Latin America and Caribbean" through March 1978. 4 Includes Surinam through December 1975. 5 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). * 6 7 Comprises Algeria, Gabon, Libya, and Nigeria. Excludes the Bank for International Settlements, which is included in "Other Western Europe." NOTE. Data for period prior to April 1978 include claims of banks' domestic customers on foreigners. For a description of the changes in the International Statistics tables, see July 1978 BULLETIN, p. 612. A62 3.17 International Statistics • February 1979 BANKS' OWN A N D DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the United States Payable in U.S. Dollars Millions of dollars, end of period Type of claim 1975 1976 1978 1977 June 1 Total 58,308 79,301 90,206 July Aug. 96,184 Sept. Oct. Nov." Dec.p 103,515 2 Banks' own claims on foreigners 87,212 87,349 91,844 94,399 96,820 105,338 114,174 3 4 5 6 7 8 6,036 31,590 30,166 5,116 25,050 19,419 6,858 33,813 27,499 4,623 22,876 19,179 7,292 37,325 27,400 4,352 23,049 19,826 7,708 34,828 31,467 4,482 26,985 20,396 8,051 36,357 31,080 3,965 27,115 21,332 Foreign public borrowers Own foreign offices1 Unaffiliated foreign banks Deposits Other All other foreigners 9 Claims of banks' domestic customers2 10 11 Deposits Negotiable and readily transferable instruments 3 Outstanding collections and other claims 4 .... 12 8,973 389 5,467 5,756 6,176 13 MEMO: Customer liability on acceptances... 1 U.S. banks: includes amounts due from own foreign branches and foreign subsidiaries consolidated in "Consolidated Report of Condition" filed with bank regulatory agencies. Agencies, branches, and majorityowned subsidiaries of foreign banks: principally amounts due from head office or parent foreign bank, and foreign branches, agencies, or whollyowned subsidiaries of head office or parent foreign bank. 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 account of their domestic customers. 9,197 40,412 33,464 4,139 29,325 22,265 10,024 40,891 39,940 5,350 34,591 23,318 '9,116 r 500 3,694 4,889 '3,724 '4,892 11,995 '12,747 3 Principally negotiable time certificates of deposit and bankers acceptances. 4 Data for March 1978 and for period prior to that are outstanding collections only. NOTE. Beginning April 1978, data for banks' own claims are given on a monthly basis, but the data for claims of banks' domestic customers are available on a quarterly basis only. For a description of the changes in the International Statistics tables, see July 1978 BULLETIN, p. 612. Nonbank-reported 3.18 Data A63 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States Payable in U.S. Dollars Millions of dollars, end of period Maturity; by borrower and area 1978 Junef 1 Total By borrower: 4 All other foreigners Sept.? 55,128 59,516 43,682 2,919 40,763 46,684 3,640 43,044 5 6 7 Maturity of over 1 year 1 Foreign public borrowers. All other foreigners 11,445 3,162 8,283 12,832 3,928 8,904 8 9 10 11 12 13 By area: Maturity of 1 year or less1 Europe Canada. . Latin America and Caribbean Asia . . Africa All other2. . . 9,532 1,615 17,036 13,515 1,461 523 10,386 1,943 18,518 13,712 1,535 591 14 15 16 17 18 19 Maturity of over 1 year 1 Europe Canada .. Latin America and Caribbean Asia Africa . All other2 2,979 330 5,979 1,282 629 247 3,104 793 6,843 1,305 577 211 1 2 Remaining time to maturity. Includes nonmonetary international and regional organizations. 3.19 1979 1978 1979 Dec. Mar. June Sept. NOTE. The first available data are for June 1978. For a description of the changes in the International Statistics tables, see July 1978 BULLETIN, p. 612. LIABILITIES TO A N D CLAIMS ON FOREIGNERS Reported by Banks in the United States Payable in Foreign Currencies Millions of dollars, end of period 1978 Item 1974 1975 1976 1977 Mar. 1 Banks' own liabilities 2 Banks' own claims1 3 Deposits Other claims 4 5 Claims of banks' domestic customers2 1 2 766 1,276 669 607 Includes claims of banks' domestic customers through March 1978. 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 their domestic customers. 560 1,459 656 802 781 1,834 1,103 731 925 2,356 941 1,415 986 2,383 948 1,435 June? 1,704 3,153 1,290 1,863 809 Sept.P 1,981 3,530 1,386 2,144 446 NOTE. Data on claims exclude foreign currencies held by U.S. monetary authorities. For a description of the changes in the International Statistics tables, see July 1978 BULLETIN, p. 612. A64 3.20 International Statistics • February 1979 MARKETABLE U.S. TREASURY BONDS A N D NOTES Foreign Holdings and Transactions Millions of dollars Country or area 1976 1978 1978 1977 Jan.Dec.f June July Aug. Sept. Holdings (end of period) Nov. p Oct. Dec.f 4 1 Estimated totali... 15,799 38,640 40,658 41,148 41,573 42,212 43,622 43,847 44,928 2 Foreign countries1. 12,765 33,894 34,964 36,306 37,119 37,826 38,472 38,469 39,807 2,330 14 764 288 191 261 485 323 4 13,936 19 3,168 911 100 497 8,888 349 4 13,106 19 4,361 1,113 185 529 6,527 371 14,226 19 5,531 1,113 200 590 6,403 370 14,154 19 5,761 1,278 210 636 5,862 387 14,689 19 6,157 1,306 211 694 5,909 393 15,260 19 6,645 1,356 231 731 5,915 365 15,654 17,072 19 19 7,102 8,705 1,351 1,358 266 285 915 977 5,674 5,373 327 354 10 11 Europe1 Belgium-Luxembourg.. Germany1 Netherlands Sweden Switzerland United Kingdom Other Western Europe. Eastern Europe 12 Canada. 256 288 264 275 276 276 151 151 152 13 14 15 16 Latin America and Caribbean Venezuela Other Latin American and Caribbean. Netherlands Antilles 313 149 47 118 551 199 183 170 494 174 158 162 485 174 149 162 545 244 139 162 445 144 139 162 426 144 119 162 416 144 109 162 416 144 110 162 17 Asia Japan 9.323 2,687 18.745 6,860 20,605 9,616 20,831 9,927 21,647 10,791 21,919 11,096 21,938 11,560 543 362 491 491 491 491 691 691 691 11 4 -3 7 5 6 -3 -3 3,034 4,746 5,694 4,842 4,454 4,386 5,150 5,378 5,121 2,906 128 4,646 100 5,633 61 4,809 33 4,421 33 4,354 33 5,118 33 5,345 33 5,089 33 18 19 Africa 20 All other. 21 Nonmonetary international and regional organizations 22 23 International Latin American regional. * 21,560 21,478 11,483 11,528 Transactions (net purchases, or sales (—), during period) 8,096 22,843 6,287 1,271 490 425 639 1,410 225 - 1 , 0 8 1 5,393 21,130 5,912 599 1,342 813 706 646 - 3 -1,338 5,119 274 20,369 762 3,682 2,229 522 77 1,313 29 710 103 704 3 577 69 69 -72 -371 1,708 28 Nonmonetary international and regional organizations 2,704 1,713 376 671 -852 -387 -67 764 227 -256 MEMO: Oil-exporting countries 29 Middle East 2 30 Africa 3 3,887 221 4,451 -181 — 1 ,790 329 -185 -31 -401 200 -241 -1 -127 24 Total i 26 27 Official institutions Other foreign i 1 Includes U.S. Treasury notes publicly issued to private foreign residents. 2 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). 3 Comprises Algeria, Gabon, Libya, and Nigeria. 3.21 * * -85 * -31 * * 4 Estimated official and private holdings of marketable U.S. Treasury securities with an original maturity of more than 1 year. Data are based on a benchmark survey of holdings as of Jan. 31, 1971, and monthly transactions reports. Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign countries. FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS Millions of dollars, end of period Assets 1975 1976 1978 1977 July 1 Deposits Assets held in custody: 1 2 U.S. Treasury securities 3 Earmarked gold 2 353 352 60,019 16,745 66,532 16,414 1 Marketable U.S. Treasury bills, certificates of indebtedness, notes, and bonds ; and nonmarketable U.S. Treasury securities payable in dollars and inforeign currencies. 2 The value of earmarked gold increased because of the changes in par value of the U.S. dollar in May 1972 and in October 1973. 424 347 Aug. 309 Sept. 325 1979 Oct. 305 Nov. 379 Dec. 367 Jan P 338 91,962 101,696 102,902 102,699 107,934 112,434 117,126 116,961 15,988 15,594 15,572 15,553 15,548 15,525 15,463 15,448 NOTE. Excludes deposits and U.S. Treasury securities held for international and regional organizations. Earmarked gold is gold held for foreign and international accounts and is not included in the gold stock of the United States. Investment transactions 3.22 A65 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars Transactions, and area or country 1977 1976 1978 Jan.Dec.f 1978 June July Sept. Aug. Oct. Nov.f Dec.f U.S. corporate securities 2 3 4 5 6 7 8 9 10 n 12 13 14 15 16 17 Stocks Foreign purchases Foreign sales 20,069 17,698 2,055 1,936 1,305 1,296 2,676 2,370 119 9 2,661 2,416 139 9 336 256 68 -199 -100 340 1,006 40 291 22 152 613 1,233 49 619 -22 -584 1,218 39 -39 83 -18 -76 101 -6 -15 17 9 -52 50 324 155 1,803 119 7 -4 65 127 1,390 59 5 8 74 151 781 187 -13 3 -12 33 59 23 -3 -16 -35 69 -5 1 18.227 15,475 14,155 11,479 Net purchases, or sales (—) 2,753 Foreign countries 2,740 Europe France Germany Netherlands Switzerland United Kingdom Canada Latin America and Caribbean Middle East1 Other Asia Africa Other countries Nonmonetary international and regional organizations * * * 2,444 2,678 2,357 2,115 1,509 1,523 1,461 1,359 -235 241 -14 103 336 -235 244 -15 102 336 -152 9 -54 -22 -184 110 -33 2 24 7 -115 54 -91 -4 -30 7 -118 58 -10 1 8 6 -88 67 264 -36 263 -9 -22 74 -18 48 -134 35 -12 -1 117 1 120 35 5 -1 22 13 42 -4 2 2 6 -2 109 1 -2 38 16 4 15 -1 * -3 1 1 611 550 727 530 437 388 884 558 1,421 1,085 1 1 4c 13 15 -46 -21 Bonds2 18 Foreign purchases 19 Foreign sales 5,529 4,327 7,739 3,546 7,954 5,449 669 302 1,029 596 872 490 20 Net purchases, or sales (—) 1,202 4,192 2,505 367 433 383 61 197 49 326 21 Foreign countries 1,243 4,096 2,096 295 411 330 64 137 39 134 86 39 -49 -29 155 23 1,863 -34 -20 72 94 1,703 966 30 119 19 -100 936 157 -3 14 -7 5 154 387 13 18 11 -74 416 137 6 38 18 -20 80 -2 -5 19 43 89 -10 -12 -4 9 110 25 3 6 -1 9 9 152 17 10 -6 39 115 96 94 1,179 -165 -25 -21 141 64 1,695 338 -6 102 78 810 140 -1 1 6 2 91 39 14 -8 135 —116 24 17 99 52 16 11 -73 29 -5 13 —19 60 -1 -8 23 6 5 -21 -5 -41 96 409 22 23 24 25 26 27 Europe France Germany Netherlands Switzerland United Kingdom 28 29 30 31 32 33 Canada Latin America and Caribbean Middle East1 Other Asia Africa Other countries 34 Nonmonetary international and regional organizations • * * * * * 72 1 1 22 * * * * * * * * * -3 53 -3 60 10 192 Foreign securities 35 Stocks, net purchases, or sales (—) 36 Foreign purchases 37 Foreign sales 38 Bonds, net purchases, or sales (—) 39 Foreign purchases 40 Foreign sales 523 3,661 3,138 -61 247 308 10 333 323 51 382 331 -69 261 330 -19 299 318 163 360 197 -12 232 244 -8,774 -5,095 -3,892 4,932 8,040 10,996 13,706 13,134 14,888 -636 1,095 1,730 -291 921 1,212 -196 982 1,178 33 759 726 -677 941 1,618 -448 854 1,302 170 1,020 851 -323 1,937 2,259 41 Net purchases, or sales ( —) of stocks and bonds.. - 9 , 0 9 7 -410 2,255 2,665 -5,504 -3,369 -697 -281 -145 -36 -696 -285 157 42 Foreign countries 43 Europe 44 Canada 45 Latin America and Caribbean 46 Asia 47 Africa 48 Other countries -7,199 -3,947 -3,192 16 -850 -1,100 - 5 , 2 4 5 - 2 , 4 0 4 -3,237 203 -3 -80 412 -733 -97 -441 2 48 -416 -267 -146 -742 -220 -420 -68 192 -44 -182 -283 -171 -146 8 44 -25 7 -150 94 -161 -17 54 -123 3 -70 -86 -41 -12 69 _ i 1 -507 13 -747 -17 236 1 6 -305 -102 -246 16 21 1 4 116 102 -24 49 Nonmonetary international and regional organizations -1,898 45 2 5 34 -189 20 -1,557 1 Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). -177 * * 32 5 41 2 Includes state and local government securities, and securities of U.S. govt, agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. corporations organized to finance direct investments abroad. A66 3.23 International Statistics • February 1979 SHORT-TERM LIABILITIES TO A N D CLAIMS ON FOREIGNERS in the United States Reported by Nonbanking Concerns Millions of dollars, end of period 1977 Type, and area or country Sept. 1978 Dec. Mar. June 1977 3 Sept. * Sept. Dec. Liabilities to foreigners 1 By type: 2 Payable in dollars 3 4 5 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 Brazil Chile Claims on foreigners '8,361 8,792 9,645 '15,223 '16,221 '18,399 18,162 18,260 '6,386 r r 7,967 8,794 '14,120 ' 14,803 ' 16,636 825 851 7,109 857 7,477 801 884 '7,089 '2,317 19 126 16 11 170 226 78 107 180 12 12 74 41 257 97 '765 92 9 11 14 '7,695 '2,491 21 116 14 9 238 284 85 128 232 7 11 77 28 263 108 '735 90 10 24 12 '8,214 '2,820 26 171 23 12 273 335 108 104 253 9 7 94 37 '211 93 '937 82 8 15 23 8,661 2,993 26 167 22 3 302 356 82 156 220 18 25 105 38 282 92 962 84 18 19 17 451 504 530 524 16,598 16,291 ' 1,104 ' 1,418 ' 1,763 1,564 1,969 414 '690 '613 '805 '783 '980 673 890 804 1,165 9,521 '15,222 '16,220 '18,397 r 3,159 5,062 ' 5,764 r5,508 33 24 24 21 226 165 211 187 17 44 56 47 4 59 13 13 260 430 513 545 391 '450 '420 '395 71 41 52 42 188 387 '351 '381 222 161 166 184 23 '40 '40 38 11 34 69 27 110 387 307 408 91 117 117 51 308 220 146 '202 102 39 32 35 1,058 '2,479 '2,619 '2,795 76 20 20 24 17 33 25 15 27 44 62 55 25 96 135 121 18,160 5,273 28 155 40 53 533 436 40 451 192 45 54 376 78 285 29 2,338 27 24 37 51 18,258 5,887 25 172 34 50 622 534 44 400 175 42 34 351 80 346 31 2,818 23 28 33 45 566 r r 2,681 3,428 3,502 3,724 ' 1,353 53 '327 62 14 26 1,421 74 321 63 23 42 1,532 131 353 87 14 42 4,619 53 1,963 414 40 85 4,467 53 '2,019 '493 45 84 ' 5,943 53 '3,122 '482 40 80 6,001 61 3,081 479 37 79 103 12 13 4 '210 122 9 154 114 22 15 3 '216 118 25 209 169 12 22 5 '264 107 41 250 185 71 17 9 185 101 30 299 235 59 19 7 232 121 19 213 302 222 30 5 251 257 8 989 314 91 32 5 269 281 12 '768 312 175 30 6 306 268 24 '1,045 331 97 30 4 309 229 19 1,245 5,142 65 2,350 418 40 69 1 382 76 25 5 284 223 21 1,183 2,583 1 152 25 44 60 58 604 75 78 17 '1,469 '2,835 8 156 40 37 56 63 695 103 74 17 '1,588 ' 2,814 1 167 32 26 57 68 761 99 95 11 '1,498 3,008 1 170 30 10 59 59 807 107 107 27 1,631 3,517 4 176 61 23 49 68 865 103 157 43 1,968 2,398 12 139 73 42 '184 46 1,026 153 111 24 '587 '2,777 9 157 98 38 375 38 1,068 171 99 23 '702 ' 2,810 21 173 92 93 152 43 1,142 168 96 30 800 2,905 23 157 127 85 167 86 1,157 161 107 29 804 594 19 130 30 55 '360 603 25 148 36 57 338 661 34 145 34 56 391 340 '18 10 75 19 '218 * Netherlands Antilles Other Latin America r # * * Israel Japan Korea Philippines Thailand Other Asia 56 57 58 59 60 61 Africa Egypt Morocco South Africa Zaire Other Africa 588 45 105 29 48 361 '577 13 112 20 46 '380 62 63 64 Other countries Australia All other 111 93 18 93 75 18 104 89 14 111 97 14 85 72 14 154 215 147 132 125 NOTE. Reported by exporters, importers, and industrial and commercial concerns and other nonbanking institutions in the United States. r * * 44 45 46 47 48 49 50 51 52 53 54 55 r ' 1,201 40 '329 49 17 42 Peru Uruguay Venezuela 65 Nonmonetary international and regional organizations 2,649 '1,038 50 '248 76 13 24 Cuba China, (Mainland) China, (Taiwan) Hong Kong India Sept.p June '7,910 Canada Latin America Argentina Mar. '7,243 Payable in foreign currencies Deposits with banks abroad in reporter's name Other By area or country: 6 Foreign countries 7 Europe 8 Austria Belgium-Luxembourg 9 10 11 12 13 Germany Greece 14 Italy 15 16 Netherlands 17 Norway 18 Portugal 19 Sweden 20 Switzerland 21 22 Turkey 23 United Kingdom 24 25 Other Western Europe 26 U.S.S.R 27 Other Eastern Europe 1978 r r * r * r 2,970 22 144 85 85 185 47 1,379 133 94 32 '764 r * 386 '34 21 75 15 '241 402 31 22 71 11 '268 430 36 16 88 16 274 441 29 16 74 12 311 153 113 41 146 111 35 145 111 34 143 109 34 158 118 40 1 1 1 2 2 Data exclude claims held through U.S. banks and intercompany accounts between U.S. companies and their affiliates. Nonbank-reported Data 3.24 A67 Reported by Large Nonbanking Concerns in the United States SHORT-TERM CLAIMS ON FOREIGNERS Millions of dollars, end of period 1978 1974 Type and country 1975 1976 1977' June7" July' Aug. r Sept. ' Oct. Nov.** 1 Total 3,357 3,799 5,720 7,136 8,812 8,949 10,098 8,635 10,503 11,223 By type: 2 Payable in dollars 3 Deposits 4 Short-term investments 2,660 2,591 69 3,042 2,710 332 4,984 4,505 479 6,121 5,703 418 7,670 7,129 541 7,643 7,172 471 8,818 8,282 536 7,409 6,985 424 9,240 8,688 552 9,981 9,362 619 697 429 268 757 511 246 735 404 331 1,015 547 468 1,142 599 543 1,305 689 616 1,280 660 620 1,225 730 495 1,263 789 474 1,241 111 470 1,350 967 391 398 252 1,306 1,156 546 343 446 1,838 1,698 1,355 133 716 2,120 1,777 1,896 153 1,190 1,660 2,559 2,946 258 1,389 1,878 2,537 3,217 279 1,038 1,869 3,013 3,543 276 1,397 2.246 2,452 2.247 250 1,440 2,949 2,858 2,819 234 1,643 3,137 2,833 3,033 249 1,971 5 6 7 Payable in foreign currencies Deposits Short-term investments 1 . By country: United Kingdom Canada Bahamas Japan All other 8 9 10 11 12 1 Negotiable and other readily transferable foreign obligations payable on demand or having a contractural maturity of not more than 1 year from the date on which the obligation was incurred by the foreigner. 3.25 NOTE. Data represent the assets abroad of large nonbanking concerns in the United States. They are a portion of the total claims on foreigners reported by nonbanking concerns in the United States and are included in the figures shown in table 3.26. LONG-TERM LIABILITIES TO A N D CLAIMS ON FOREIGNERS in, the United States Reported by Nonbanking Concerns Millions of dollars, end of period 1978 1977 Area and country Sept. Mar. Dec. June 1977 Sept.** Sept. '3,331 r 2 Europe 3 Germany 4 Netherlands 5 Switzerland 6 United Kingdom r r 7 Canada 2,555 407 272 224 r l,237 r Mar. June Sept.35 3,175 '3,149 3,077 3,122 '4,719 '5,077 '5,143 5,067 5,007 2,425 255 287 241 ' 1,222 '2,498 295 292 241 '1,228 2,422 282 266 236 1,214 2,471 290 275 246 1,253 '833 '79 81 42 282 '864 '74 82 49 310 '937 '75 81 48 332 943 71 76 55 363 927 76 74 58 341 r 62 '58 56 65 1,462 1,776 1,792 1,811 1,779 8 Latin America 9 Bahamas 10 Brazil 11 Chile 12 Mexico 289 151 7 1 30 284 148 7 1 30 '248 142 6 1 '27 248 141 7 1 26 234 138 7 1 29 1,367 36 134 201 187 1,402 40 144 203 177 1,387 42 154 194 183 1,298 2 143 190 188 1,283 2 144 176 217 13 Asia 14 Japan 358 319 342 305 284 250 290 255 289 254 829 94 817 66 810 83 803 78 812 70 15 Africa 16 All other i 1 67 Dec. Claims on foreigners Liabilities to foreigners 1 Total 1978 3 2 2 2 3 165 161 156 154 149 59 60 60 60 61 63 59 60 59 56 Includes nonmonetary international and regional organizations. A68 3.26 International Statistics • February 1979 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Per cent per annum Feb. June July 33.0 Nov. 11.25 Jan. 8.0 July Argentina Austria... Belgium.. Brazil Canada.. Denmark. Country Month effective Per cent 18.0 4.5 6.0 1972 1978 1978 1978 1979 1977 Per cent France Germany, Fed. Rep. of. Italy Japan Mexico Netherlands 9.5 3.0 10.5 3.5 4.5 6.5 Country Month effective Aug. Dec. Sept. Mar. June Oct. 1977 1977 1978 1978 1942 1978 Per cent 7.0 6.5 1.0 12.5 5.0 United Kingdom Month effective Feb. July Feb. Nov. Oct. 1978 1978 1978 1978 1970 more than one rate applicable to such discounts or advances, the rate shown is the one at which it is understood the central bank transacts the largest proportion of its credit operations. NOTE. Rates shown are mainly those at which the central bank either discounts or makes advances against eligible commercial paper and/or government securities for commercial banks or brokers. For countries with 3.27 Rate on Jan. 31, 1979 Rate on Jan. 31, 1979 Rate on Jan. 31, 1979 Country FOREIGN SHORT-TERM INTEREST RATES Per cent per annum, averages of daily figures 1977 1976 Country, or type Aug. 1 Euro-dollars 2 United Kingdom 3 Canada 4 5 6 7 Oct. Nov. Dec. Jan. 6.03 8.07 7.47 8.74 9.18 8.52 8.48 9.42 8.77 9.12 9.29 9.08 10.12 10.44 9.68 11.51 12.00 10.37 11.62 12.28 10.44 11.16 12.61 10.87 4.19 1.45 7.02 8.65 4.30 2.56 4.73 9.20 3.67 0.74 6.53 8.10 3.64 0.67 6.27 7.39 3.67 0.58 6.91 7.40 3.90 0.24 11.23 7.37 3.81 0.20 8.86 7.06 4.09 0.22 10.25 6.59 3.85 0.05 8.69 6.55 16.32 10.25 7.70 14.26 6.95 6.22 11.40 7.14 4.75 11.75 7.09 4.64 10.94 7.24 4.51 10.99 8.55 4.44 11.17 9.19 4.78 11.24 9.28 4.76 11.12 8.93 4.52 over; and Japan, loans and discounts that can be called after being held over a minimum of two month-ends. NOTE. Rates are for 3-month interbank loans except for—Canada, finance company paper; Belgium, time deposits of 20 million francs and 3.28 Sept. 5.58 11.35 9.39 Germany Switzerland Netherlands France 8 Italy 9 Belgium 10 Japan 1979 1978 1978 FOREIGN EXCHANGE RATES Cents per unit of foreign currency Country/currency 1 2 3 4 5 Australia/dollar Austria/schilling Belgium/franc Canada/dollar Denmark/krone 1976 122.15 5.5744 2.5921 101.41 16.546 1977 1979 1978 1978 Aug. Sept. Oct. Nov. Dec. Jan. 110.82 6.0494 2.7911 94.112 16.658 114.41 6.8958 3.1809 87.729 18.156 115.41 6.9490 3.1834 87.690 18.171 115.29 7.0102 3.2207 85.739 18.411 116.87 7.4526 3.4503 84.546 19.584 114.53 7.1808 3.3389 85.244 19.025 114.15 7.2621 3.3637 84.763 19.063 114.04 7.3821 3.4276 84.041 19.487 24.913 20.344 43.079 11.406 174.49 24.337 22.218 49.867 12.207 191.84 24.381 22.998 50.084 12.483 194.06 24.586 22.909 50.778 12.445 195.95 25.454 23.767 54.430 12.643 200.75 24.932 22.958 52.508 12.458 196.08 24.957 23.178 53.217 12.174 198.61 25.252 23.570 54.056 12.185 200.53 6 7 8 9 10 25.938 Finland/markka 20.942 France/franc Germany/deutsche mark... 39.737 11.148 India/rupee 180.48 Ireland/pound 11 12 13 14 15 Italy/lira Japan/yen Malaysia/ringgit Mexico/peso Netherlands/guilder 16 17 18 19 20 New Zealand/dollar Norway/krone Portugal/escudo South Africa/rand Spain/peseta 99.115 18.327 3.3159 114.85 1.4958 96.893 18.789 2.6234 114.99 1.3287 103.64 19.079 2.2782 115.01 1.3073 105.42 19.018 2.2042 115.00 1.3344 105.58 19.189 2.1948 115.00 1.3605 107.37 20.325 2.2342 115.00 1.4317 105.41 19.736 2.1510 115.04 1.4051 105.45 19.574 2.1472 115.01 1.4085 105.64 19.730 2.1358 114.96 1.4293 21 22 23 24 Sri Lanka/rupee Sweden/krona Switzerland/franc : United Kingdom/pound... 11.908 22.957 40.013 180.48 11.964 22.383 41.714 174.49 6.3834 22.139 56.283 191.84 6.3926 22.523 60.013 194.06 6.3855 22.592 63.765 195.95 6.3757 23.349 65.117 200.75 6.4695 22.856 59.766 196.08 6.4700 22.808 59.703 198.61 6.4491 22.987 59.840 200.53 105.57 103.31 89.99 89.51 88.86 88.52 87.77 MEMO: 25 United States/dollar1 .12044 .33741 39.340 6.9161 37.846 .11328 .37342 40.620 4.4239 40.752 .11952 .53002 43.433 4.3758 46.203 .11782 .47981 43.210 4.3896 46.284 1 Index of weighted average exchange value of U.S. dollar against currencies of other G-10 countries plus Switzerland. March 1973 = 100. Weights are 1972-76 global trade of each of the 10 countries. Series revised as of August 1978. For description and back data, see "Index of .12050 .52656 43.603 4.3907 46.733 .12317 .54478 45.627 4.3904 50.017 86.04 .11857 .52066 45.415 4.3881 48.512 .11863 .51038 45.524 4.3950 49.120 .11955 .50571 45.487 4.4038 50.082 the Weighted-Average Exchange Value of the U.S. Dollar: Revision" on page 700 of the August 1978 BULLETIN. NOTE. Averages of certified noon buying rates in New York for cable transfers. 69 Guide to Tabular Presentation and Statistical Releases GUIDE TO TABULAR Symbols and c e P r Corrected Estimated Preliminary Revised (Notation appears on column heading when more than half of 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) General PRESENTATION Abbreviations 0 n.a. n.e.c. IPCs REITs RPs SMSAs Calculated to be zero Not available Not elsewhere classified Individuals, partnerships, and corporations Real estate investment trusts Repurchase agreements Standard metropolitan statistical areas Cell not applicable. Information 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) STATISTICAL List Published as well as direct obligations of the Treasury. "State and local government' 1 also includes municipalities, special districts, and other political subdivisions. In some of the tables details do not add to totals because of rounding. RELEASES Semiannually, with Latest Bulletin Anticipated schedule of release dates for individual releases Reference Issue December 1978 Page A-76 A 70 Federal Reserve Board of Governors G. William Chairman Miller, Henry C. W a l l i c h OFFICE OF BOARD Philip E. J. C h a r l e s MEMBERS OFFICE JOSEPH R. COYNE, Assistant to the Board KENNETH A. GUENTHER, Assistant to the Board JAY PAUL BRENNEMAN, Special Assistant to the Board FRANK O'BRIEN, JR., Special Assistant to the Board JOSEPH S. SIMS, Special Assistant to the Board DONALD J. WINN, Special Assistant to the Board C o l d w e l l Partee OF STAFF MONETARY AND DIRECTOR FINANCIAL POLICY STEPHEN H. AXILROD, Staff Director EDWARD C. ETTIN, Deputy Staff Director MURRAY ALTMANN, Assistant to the Board PETER M. KEIR, Assistant to the Board STANLEY J. SIGEL, Assistant to the Board NORMAND R. V. BERNARD, Special Assistant the Board DIVISION OF RESEARCH AND LEGAL FOR to STATISTICS DIVISION NEAL L. PETERSEN, General Counsel ROBERT E. MANNION, Associate General Counsel ALLEN L. RAIKEN, Associate General Counsel CHARLES R. MCNEILL, Assistant to the General Counsel OFFICE OF THE SECRETARY T h e o d o r e E . A l l i s o n , Secretary G r i f f i t h L . G a r w o o d , Deputy Secretary " J o h n M . W a l l a c e , Assistant Secretary R i c h a r d H . P u c k e t t , Manager, Regulatory Improvement Project DIVISION OF CONSUMER AFFAIRS JANET O. HART, Director NATHANIEL E. BUTLER, Associate JERAULD C. KLUCKMAN, Associate ANNE GEARY, Assistant Director DIVISION OF SUPERVISION Director Director BANKING AND REGULATION JOHN E. RYAN, Director fFREDERiCK C. SCHADRACK, Deputy Director FREDERICK R. DAHL, Associate Director Director WILLIAM W. WILES, Associate JACK M. EGERTSON, Assistant Director DON E. KLINE, Assistant Director ROBERT S. PLOTKIN, Assistant Director THOMAS A. SIDMAN, Assistant Director SAMUEL H. TALLEY, Assistant Director WILLIAM TAYLOR, Assistant Director :: On loan from the Federal Reserve Bank of Atlanta. tOn loan from the Federal Reserve Bank of New York. JAMES L. KICHLINE, Director JOSEPH S. ZEISEL, Deputy Director JOHN H. KALCHBRENNER, Associate Director JOHN J. MINGO, Senior Research Division Officer ELEANOR J. STOCKWELL, Senior Research Division Officer JAMES M. BRUNDY, Associate Research Division Officer ROBERT A. EISENBEIS, Associate Research Division Officer JARED J. ENZLER, Associate Research Division Officer J. CORTLAND G. PERET, Associate Research Division Officer MICHAEL J. PRELL, Associate Research Division Officer HELMUT F. WENDEL, Associate Research Division Officer ROBERT M. FISHER, Assistant Research Division Officer FREDERICK M. STRUBLE, Assistant Research Division Officer STEPHEN P. TAYLOR, Assistant Research Division Officer LEVON H. GARABEDIAN, Assistant Director DIVISION OF INTERNATIONAL FINANCE EDWIN M. TRUMAN, Director ROBERT F. GEMMILL, Associate Director GEORGE B. HENRY, Associate Director CHARLES J. SIEGMAN, Associate Director SAMUEL PIZER, Senior International Division Officer JEFFREY R. SHAFER, Associate International Division Officer DALE W. HENDERSON, Assistant International Division Officer LARRY J. PROMISEL, Assistant International Division Officer RALPH W. SMITH, JR., Assistant International Division Officer A 71 and Official Staff Nancy OFFICE STAFF H. Teeters OF OFFICE DIRECTOR FOR MANAGEMENT JOHN M. DENKLER, Staff Director ROBERT J. LAWRENCE, Deputy Staff Director JOSEPH W. DANIELS, SR., Director of Equal Employment Opportunity HARRY A. GUINTER, Program Director for Contingency Planning DIVISION OF DATA PROCESSING CHARLES L. HAMPTON, Director BRUCE M. BEARDSLEY, Associate Director UYLESS D . BLACK, Assistant Director GLENN L. CUMMINS, Assistant Director ROBERT J. ZEMEL, Assistant Director OF PERSONNEL DAVID L. SHANNON, Director JOHN R. WEIS, Assistant Director CHARLES W. WOOD, Assistant Director OFFICE OF THE CONTROLLER JOHN KAKALEC, Controller EDWARD T. MULRENIN, Assistant DIVISION DONALD E. OF SUPPORT Controller SERVICES ANDERSON,Director JOHN L. GRIZZARD, Associate Director WALTER W. KREIMANN, Associate Director JOHN D. SMITH, Assistant Director DIRECTOR RESERVE BANK DIVISION BANK OF FEDERAL EXAMINATIONS FOR ACTIVITIES WILLIAM H. WALLACE, Staff Director RESERVE AND BUDGETS ALBERT R. HAMILTON, Director CLYDE H. FARNSWORTH, JR., Associate Director CHARLES W. BENNETT, Assistant Director P. D. RING, Assistant Director RAYMOND L. TEED, Assistant Director DIVISION BANK DIVISION OF STAFF FEDERAL OF FEDERAL RESERVE OPERATIONS JAMES R. KUDLINSKI, Director WALTER ALTHAUSEN, Assistant Director BRIAN M. CAREY, Assistant Director HARRY A. GUINTER, Assistant Director LORIN S. MEEDER, Assistant Director A 72 Federal Reserve Bulletin • February 1979 FOMC and Advisory Councils FEDERAL OPEN MARKET COMMITTEE G. William Ernest Chairman Miller, T. B a u g h m a n Paul J. C h a r l e s Philip E. C o l d w e l l Nancy A. V o l c k e r , Vice Chairman Partee Henry H. T e e t e r s Mark D a v i d P. E a s t b u r n W i l l i s J. Secretary Assistant Secretary E d w a r d G . G u y , Deputy General Counsel R o b e r t E . M a n n i o n , Assistant General Counsel Stephen H. Axilrod, Economist J o s e p h B u r n s , Associate Economist J o h n M . D a v i s , Associate Economist Murray Norm and C. H. R. V. B e r n a r d , Alan R. H o l m e s , D. Scott Winn Associate Economist Associate Economist P e t e r M . K e i r , Associate Economist Economist J a m e s L . K i c h l i n e , Associate J o h n P a u l u s , Associate Economist E d w i n M . T r u m a n , Associate Economist J o s e p h S . Z e i s e l , Associate Economist Altmann, Peter Wallich Willes Richard G. Davis, Edward C. E t t i n , Manager, System Open Market Account Deputy Manager for Domestic Operations Deputy Manager for Foreign Operations Stern light, E. P a r d e e , FEDERAL ADVISORY COUNCIL R o g e r E. A n d e r s o n , S e v e n t h D i s t r i c t C l a r e n c e C. B a r k s d a l e , E i g h t h D i s t r i c t R i c h a r d H. V a u g h a n , N i n t h D i s t r i c t J. W . M c L e a n , T e n t h D i s t r i c t James D. B e r r y , E l e v e n t h D i s t r i c t C h a u n c e y E. S c h m i d t , T w e l f t h D i s t r i c t H e n r y S. W o o d b r i d g e , f i r s t d i s t r i c t W a l t e r B. W r i s t o n , s e c o n d d i s t r i c t W i l l i a m B. E a g l e s o n , Jr., t h i r d d i s t r i c t M e r l e E. G i l l i a n d , F o u r t h D i s t r i c t J. O w e n C o l e , F i f t h D i s t r i c t F r a n k A. P l u m m e r , S i x t h D i s t r i c t H e r b e r t V. P r o c h n o w , Secretary W i l l i a m J . K o r s v i k , Associate Secretary CONSUMER ADVISORY COUNCIL D. Warren, Los Marcia A. Hakala, Omaha R o l a n d E. B r a n d e l , San Francisco, California J a m e s L. B r o w n , Milwaukee, Wisconsin M a r k E. B u d n i t z , Boston, Massachusetts J o h n G. B u l l , Fort Lauderdale, Florida R o b e r t V. B u l l o c k , Frankfort, Kentucky C a r l F e l s e n f e l d , N e w York, New York J e a n A. F o x , Pittsburgh, Pennsylvania R i c h a r d H. H o l t o n , Berkeley, California Edna DeCoursey Johnson, Baltimore, Mary- land R i c h a r d F. K e r r , Cincinnati, Ohio R o b e r t J. K l e i n , N e w York, New York H a r v e y M. K u h n l e y , Minneapolis, Minnesota Ar igeles, William California, Nebraska, Vice Chairman Chairman P e r c y W. L o y , Portland, Oregon R. C. M o r g a n , El Paso, Texas F l o r e n c e M. R i c e , N e w York, New York Ralph J. R o h n e r , Washington, D. C. R a y m o n d J. S a u l n i e r , New York, New York Henry S. S c h e c h t e r , Washington, D. C. E. G. S c h u h a r i , Amarillo, Texas B l a i r C. S h i c k , Cambridge, Massachusetts T h o m a s R. S w a n , Portland, Maine Anne Gary Taylor, Alexandria, Virginia R i c h a r d A. V a n W i n k l e , Salt Lake City, Utah R i c h a r d D. W a g n e r , Simsbury, Connecticut M a r y W. W a l k e r , Monroe, Georgia A 73 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK, branch, or facility Zip Chairman Deputy Chairman President First Vice President BOSTON* 02106 Robert M. Solow Robert P. Henderson Frank E. Morris James A. Mcintosh NEW YORK* 10045 Robert H. Knight Boris Yavitz Frederick D. Berkeley Paul A. Volcker Thomas M. Timlen Buffalo 14240 John T. Keane PHILADELPHIA 19105 John W. Eckman Werner C. Brown David P. Eastburn Richard L. Smoot CLEVELAND* 44101 Willis J. Winn Walter H. MacDonald Cincinnati Pittsburgh 45201 15230 Robert E. Kirby Arnold R. Weber Lawrence H. Rogers, II G. Jackson Tankersley RICHMOND* 23261 E. Angus Powell Maceo A. Sloan I. E. Killian Robert E. Elberson Robert P. Black George C. Rankin Baltimore 21203 Charlotte 28230 Culpeper Communications and Records Center . 22701 ATLANTA Birmingham Jacksonville Miami Nashville New Orleans 30303 35202 32203 33152 37203 70161 CHICAGO* 60690 Detroit 48231 ST. LOUIS 63166 Little Rock Louisville Memphis 72203 40201 38101 MINNEAPOLIS 55480 Helena KANSAS CITY Denver Oklahoma City Omaha DALLAS El Paso Houston San Antonio 59601 64198 80217 73125 68102 75222 79999 77001 78295 SAN FRANCISCO 94120 Los Angeles Portland Salt Lake City Seattle 90051 97208 84125 98124 Vice President in charge of branch Robert E. Showalter Robert D. Duggan Jimmie R. Monhollon Stuart P. Fishburne Albert D. Tinkelenberg Clifford M. Kirtland, Jr. William A. Fickling, Jr. William H. Martin, Jr. Copeland D. Newbern Castle W. Jordan Cecelia Adkins Levere C. Montgomery Monroe Kimbrel Kyle K. Fossum Robert H. Strotz John Sagan Jordan B. Tatter Robert P. Mayo Daniel M. Doyle Armand C. Stalnaker William B. Walton G. Larry Kelley James F. Thompson Frank A. Jones, Jr. Lawrence K. Roos Donald W. Moriarty Stephen F. Keating William G. Phillips Patricia P. Douglas Mark H. Willes Thomas E. Gainor Harold W. Andersen Joseph H. Williams A. L. Feldman Christine H. Anthony Durward B. Varner Roger Guffey Henry R. Czerwinski Irving A. Mathews Gerald D. Hines A. J. Losee Gene M. Woodfin Pat Legan Ernest T. Baughman Robert H. Boy kin Joseph F. Alibrandi Cornell C. Maier Caroline L. Ahmanson Loran L. Stewart Wendell J. Ashton Lloyd E. Cooney John J. Balles John B. Williams Hiram J. Honea Charles B. East F. J. Craven, Jr. Jeffrey J. Wells George C. Guynn William C. Conrad John F. Breen Donald L. Henry L. Terry Britt John D. Johnson Wayne W. Martin William G. Evans Robert D. Hamilton Fredric W. Reed J. Z. Rowe Carl H. Moore Richard C. Dunn Angelo S. Carella A. Grant Holman Gerald R. Kelly * Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, 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. A 74 Federal Reserve Board Publications Available from Publications Services, Division of Administrative Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Where a charge is indicated, remittance should accompany request and be made payable to the order of the Board of Governors of the Federal Reserve System. Remittance from foreign residents should be drawn on a U.S. bank. (Stamps and coupons are not accepted.) THE B A N K CREDIT-CARD AND CHECK-CREDIT P L A N S . FEDERAL RESERVE SYSTEM—PURPOSES FUNCTIONS. 1 9 7 4 . 1 2 5 p p . AND A N N U A L REPORT. SURVEY OF CHANGES IN FAMILY FINANCES. FEDERAL RESERVE B U L L E T I N . Monthly. $20.00 per year or $ 2 . 0 0 each in the United States, its possessions, Canada, and Mexico; 10 or more of same issue to one address, $18.00 per year or $1.75 each. Elsewhere, $ 2 4 . 0 0 per year or $ 2 . 5 0 each. BANKING AND MONETARY STATISTICS, 1914-1941. (Reprint of Part 1 only) 1976. 682 pp. $5.00. BANKING AND MONETARY STATISTICS, 1941-1970. 1976. 1,168 pp. $15.00. A N N U A L STATISTICAL DIGEST, 1 9 7 1 - 7 5 . 1 9 7 6 . 3 3 9 p p . $4.00 per copy for each paid subscription to Federal Reserve Bulletin. All others, $ 5 . 0 0 each. A N N U A L STATISTICAL DIGEST, 1 9 7 2 - 7 6 . 1 9 7 7 . 3 8 8 p p . $10.00 per copy. 1978. 361 pp. $12.00 per copy. FEDERAL RESERVE CHART BOOK. Issued four t i m e s a year in February, May, August, and November Subscription includes one issue of Historical Chart Book. $ 7 . 0 0 per year or $2.00 each in the United States, its possessions, Canada, and Mexico. Elsewhere, $ 1 0 . 0 0 per year or $3.00 each. HISTORICAL CHART BOOK. Issued annually in Sept. Subscription to Chart Book includes one issue. $1.25 each in the United States, its possessions, Canada, and Mexico; 10 or more to one address, $1.00 each. Elsewhere, $1.50 each. CAPITAL MARKET DEVELOPMENTS. W e e k l y . $ 1 5 . 0 0 p e r year or $.40 each in the United States, its possessions, Canada, and Mexico; 10 or more of same issue to one address, $ 1 3 . 5 0 per year or $.35 each. Elsewhere, $20.00 per year or $ . 5 0 each. SELECTED INTEREST AND EXCHANGE R A T E S — W E E K L Y SERIES OF CHARTS. W e e k l y . $ 1 5 . 0 0 p e r y e a r or $.40 each in the United States, its possessions, Canada, and Mexico; 10 or more of same issue to one address, $13.50 per year or $.35 each. Elsewhere, $20.00 per year or $ . 5 0 each. THE FEDERAL RESERVE ACT, as a m e n d e d through D e - cember 1976, with an appendix containing provisions of certain other statutes affecting the Federal Reserve System. 307 pp. $2.50. REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM PUBLISHED INTERPRETATIONS OF THE BOARD OF GOV- ERNORS, as of June 30, 1978. $7.50. EDITION. 1977. 304 pp. $ 4 . 5 0 each; 10 or more to one address, $4.00 each. 1968. 321 pp. $ 1 . 0 0 each; 10 or more to one address, $.85 each. REPORT OF THE JOINT TREASURY-FEDERAL RESERVE STUDY OF THE U . S . GOVERNMENT SECURITIES MARKET. 1969. 48 pp. $.25 each; 10 or more to one address, $ . 2 0 each. JOINT TREASURY-FEDERAL RESERVE S T U D Y OF THE GOVERNMENT SECURITIES MARKET: STAFF S T U D - IES—PART 1. 1970. 86 pp. $ . 5 0 each; 10 or more to one address, $ . 4 0 each. PART 2. 1971. 153 pp. and PART 3. 1973. 131 pp. Each volume $1.00; 10 or more to one address, $.85 each. OPEN MARKET POLICIES AND OPERATING PROCED U R E S — S T A F F STUDIES. 1971. 2 1 8 pp. $2.00 each; 10 or more to one address, $1.75 each. A N N U A L STATISTICAL DIGEST, 1 9 7 3 - 7 7 . INDUSTRIAL P R O D U C T I O N — 1 9 7 6 1968. 102 pp. $ 1 . 0 0 each; 10 or more to one address, $.85 each. REAPPRAISAL OF THE MECHANISM. Vol. FEDERAL RESERVE DISCOUNT 1. 1 9 7 1 . 2 7 6 p p . Vol. 2 . 1 9 7 1 . 173 pp. Vol. 3. 1972. 220 pp. Each volume $3.00; 10 or more to one address, $ 2 . 5 0 each. T H E ECONOMETRICS OF PRICE DETERMINATION CON- FERENCE, October 30-31, 1970, Washington, D.C. 1972. 397 pp. Cloth ed. $ 5 . 0 0 each; 10 or more to one address, $ 4 . 5 0 each. Paper ed. $ 4 . 0 0 each; 10 or more to one address, $ 3 . 6 0 each. FEDERAL RESERVE STAFF S T U D Y : W A Y S TO MODERATE FLUCTUATIONS IN HOUSING CONSTRUCTION . 1972. 487 pp. $ 4 . 0 0 each; 10 or more to one address, $ 3 . 6 0 each. LENDING FUNCTIONS OF THE FEDERAL RESERVE BANKS. 1973. 271 pp. $ 3 . 5 0 each; 10 or more to one address, $ 3 . 0 0 each. IMPROVING THE MONETARY AGGREGATES ( R e p o r t o f t h e Advisory Committee on Monetary Statistics). 1976. 43 pp. $ 1 . 0 0 each; 10 or more to one address, $.85 each. A N N U A L PERCENTAGE RATE TABLES ( T r u t h in Lend- ing—Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each volume $1.00, 10 or more of same volume to one address, $.85 each. FEDERAL RESERVE MEASURES OF CAPACITY AND C A PACITY UTILIZATION. 1 9 7 8 . 4 0 p p . $ 1 . 7 5 e a c h , 10 or more to one address, $1.50. each. THE BANK HOLDING COMPANY MOVEMENT TO 1 9 7 8 : A COMPENDIUM. 1 9 7 8 . 2 8 9 p p . $ 2 . 5 0 e a c h , 10 or more to one address, $2.25 each. IMPROVING THE MONETARY AGGREGATES: STAFF PAPERS. 1978. 170 pp. $4.00 each, 10 or more to one address, $3.75 each. 1 9 7 7 CONSUMER CREDIT SURVEY. 1 9 7 8 . 1 1 9 p p . each. $2.00 Federal Reserve Board Publications A 75 Reprint CONSUMER EDUCATION PAMPHLETS (Short pamphlets suitable for classroom copies available without charge.) use. Multiple (Except for Staff Papers, Staff Studies, and some leading articles, most of the articles reprinted do not exceed 12 pages.) CONSUMER HANDBOOK TO CREDIT PROTECTION LAWS T H E EQUAL CREDIT OPPORTUNITY A C T AND . . . A G E T H E EQUAL CREDIT OPPORTUNITY A C T AND . . . CREDIT RIGHTS IN HOUSING THE EQUAL CREDIT OPPORTUNITY A C T AND . . . DOCTORS, LAWYERS, SMALL RETAILERS, AND OTHERS W H O M A Y PROVIDE INCIDENTAL CREDIT THE EQUAL CREDIT OPPORTUNITY A C T AND . WOMEN FAIR CREDIT BILLING A G U I D E TO FEDERAL RESERVE REGULATIONS H O W TO FILE A CONSUMER CREDIT COMPLAINT IF Y O U BORROW TO B U Y STOCK IF Y O U USE A CREDIT CARD TRUTH IN LEASING U . S . CURRENCY MEASURES OF SECURITY CREDIT. 1 2 / 7 0 . REVISION OF B A N K CREDIT SERIES. 1 2 / 7 1 . ASSETS AND LIABILITIES OF FOREIGN BRANCHES OF U . S . BANKS. 2 / 7 2 . B A N K DEBITS, DEPOSITS, AND DEPOSIT T U R N O V E R — REVISED SERIES. 7 / 7 2 , YIELDS ON N E W L Y ISSUED CORPORATE B O N D S . 9 / 7 2 . RECENT ACTIVITIES OF FOREIGN BRANCHES OF U . S . BANKS. 1 0 / 7 2 . REVISION OF CONSUMER CREDIT STATISTICS. 1 0 / 7 2 . O N E - B A N K HOLDING COMPANIES BEFORE THE 1 9 7 0 W H A T TRUTH IN LENDING M E A N S TO Y O U RATES ON CONSUMER INSTALMENT L O A N S . N E W SERIES FOR LARGE MANUFACTURING STAFF U.S. AMENDMENTS. 12/72. YIELDS ON RECENTLY OFFERED CORPORATE BONDS. 5/73. 9/73. CORPORA- TIONS. 10/73. STUDIES Studies and papers that are of general on economic interest. and financial subjects Summaries Only Printed in the Bulletin (Limited supply of mimeographed available upon request for single copies copies.) of full text STRUCTURE AND PERFORMANCE STUDIES IN BANKING: A SUMMARY AND EVALUATION, b y S t e p h e n A . Rhoades. Dec. 1977. 4 5 pp. A N ANALYSIS OF FEDERAL RESERVE ATTRITION SINCE 1960, by John T. Rose. Jan. 1978. 4 4 pp. PROBLEMS IN APPLYING DISCRIMINANT ANALYSIS IN CREDIT SCORING MODELS, b y R o b e r t A . E i s e n b e i s . Jan. 1 9 7 8 . 2 8 pp. EXTERNAL CAPITAL FINANCING REQUIREMENTS OF COMMERCIAL BANKS: 1 9 7 7 - 8 1 , b y G e r a l d A . H a n - weck and John J. Mingo. Feb. 1978. 34 pp. MORTGAGE BORROWING AGAINST EQUITY IN EXISTING HOMES: MEASUREMENT, GENERATION, AND IMPLICATIONS FOR ECONOMIC ACTIVITY, b y D a v i d F . Seiders. May 1978. 4 2 pp. THE BEHAVIOR OF MEMBER B A N K REQUIRED RESERVE RATIOS AND THE EFFECTS OF BOARD ACTION, 1 9 6 8 - 7 7 , by Thomas D. Simpson. July 1978. 39 pp. FOOTHOLD ACQUISITIONS AND B A N K MARKET STRUC- TURE, by Stephen A. Rhoades and Paul Schweitzer, July 1978. 8 pp. INTEREST RATE CEILINGS AND DISINTERMEDIATION, b y Edward F. McKelvey. Sept. 1978. 105 pp. T H E RELATIONSHIP BETWEEN RESERVE RATIOS AND THE MONETARY AGGREGATES UNDER RESERVES AND FEDERAL F U N D S RATE OPERATING TARGETS, by Kenneth J. Kopecky. Dec. 1978. 58 pp. TIE-INS BETWEEN THE GRANTING OF CREDIT AND SALES OF INSURANCE BY B A N K HOLDING COMPANIES AND OTHER LENDERS, b y R o b e r t A . E i s e n b e i s and Paul R. Schweitzer. Feb. 1978. 75 pp. Printed in Full in the Bulletin Staff Studies shown under "Reprints. " ENERGY SUPPLIES AND USES, Staff Economic Study by Clayton Gehman. 12/73. T H E STRUCTURE OF MARGIN CREDIT. 4 / 7 5 . N E W STATISTICAL SERIES ON L O A N COMMITMENTS AT SELECTED LARGE COMMERCIAL B A N K S . 4 / 7 5 . RECENT TRENDS IN FEDERAL B U D G E T POLICY. 7 / 7 5 . RECENT DEVELOPMENTS IN INTERNATIONAL FINANCIAL MARKETS. 10/75. M I N N I E : A SMALL VERSION OF THE M I T - P E N N - S S R C ECONOMETRIC MODEL, Staff Economic Study by Douglas Battenberg, Jared J. Enzler, and Arthur M. Havenner. 11/75. A N ASSESSMENT OF B A N K HOLDING COMPANIES, Staff Economic Study by Robert J. Lawrence and Samuel H. Talley. 1/76. INDUSTRIAL ELECTRIC POWER U S E . 1 / 7 6 . REVISION OF M O N E Y STOCK MEASURES. 2 / 7 6 . SURVEY OF FINANCE COMPANIES, 1 9 7 5 . 3 / 7 6 . REVISED SERIES FOR MEMBER B A N K DEPOSITS AGGREGATE RESERVES. 4 / 7 6 . INDUSTRIAL PRODUCTION—1976 R e v i s i o n . AND 6/76. FEDERAL RESERVE OPERATIONS IN PAYMENT M E C H A NISMS: A SUMMARY. 6 / 7 6 . RECENT GROWTH IN ACTIVITIES OF U . S . OFFICES OF BANKS. 10/76. N E W ESTIMATES OF CAPACITY UTILIZATION: M A N U FACTURING AND MATERIALS. 1 1 / 7 6 . B A N K HOLDING COMPANY FINANCIAL DEVELOPMENTS IN 1976. 4 / 7 7 . SURVEY OF TERMS OF B A N K L E N D I N G — N E W SERIES. 5/77. THE COMMERCIAL PAPER M A R K E T . 6 / 7 7 . CONSUMPTION AND FIXED INVESTMENT IN THE ECONOMIC RECOVERY ABROAD. 1 0 / 7 7 . RECENT DEVELOPMENTS IN TRANSACTIONS. 4 / 7 8 . U.S. INTERNATIONAL THE FEDERAL B U D G E T IN THE 1 9 7 0 ' s . 9 / 7 8 . SUMMARY MEASURES OF THE DOLLAR'S FOREIGN E X CHANGE V A L U E . 1 0 / 7 8 . SURVEY OF TIME AND SAVINGS DEPOSITS AT A L L COMMERCIAL B A N K S , JULY 1 9 7 8 . 1 1 / 7 8 . REDEFINING THE MONETARY AGGREGATES. 1 / 7 9 . 76 Index to Statistical Tables References are to pages A-3 through A-68 although ACCEPTANCES, bankers, 11, 25, 27 Agricultural loans, commercial banks, 18, 2 0 - 2 2 , 26 Assets and liabilities (See also Foreigners): Banks, by classes, 16, 17, 18, 2 0 - 2 3 , 29 Domestic finance companies, 39 Federal Reserve Banks, 12 Nonfinancial corporations, current, 38 Automobiles: Consumer instalment credit, 42, 43 Production, 48, 49 BANKERS balances, 16, 18, 20, 21, 22 (See also Foreigners) Banks for cooperatives, 35 Bonds (See also U.S. Government securities): New issues, 36 Yields, 3 Branch banks: Assets and liabilities of foreign branches of U.S. banks, 56 Liabilities of U.S. banks to their foreign branches, 23 Business activity, 46 Business expenditures on new plant and equipment, 38 Business loans (See Commercial and industrial loans) CAPACITY utilization, 46 Capital accounts: Banks, by classes, 16, 17, 19, 20 Federal Reserve Banks, 12 Central banks, 68 Certificates of deposit, 23, 27 Commercial and industrial loans: Commercial banks, 15, 18, 23, 26 Weekly reporting banks, 20, 21, 22, 23, 24 Commercial banks: Assets and liabilities, 3, 15-19, 2 0 - 2 3 Business loans, 26 Commercial and industrial loans, 24, 26 Consumer loans held, by type, 42, 43 Loans sold outright, 23 Number, by classes, 16, 17, 19 Real estate mortgages held, by type of holder and property, 41 Commercial paper, 3, 24, 25, 27, 39 Condition statements (See Assets and liabilities) Construction, 46, 50 Consumer instalment credit, 42, 43 Consumer prices, 46, 51 Consumption expenditures, 52, 53 Corporations: Profits, taxes, and dividends, 37 Security issues, 36, 65 Cost of living (See Consumer prices) Credit unions, 29, 42, 43 Currency and coin, 5, 16, 18 Currency in circulation, 4, 14 Customer credit, stock market, 28 DEBITS to deposit accounts, 13 Debt (See specific types of debt or securities) the prefix "A" is omitted in this index Demand deposits: Adjusted, commercial banks, 13, 15, 19 Banks, by classes, 16, 17, 19, 2 0 - 2 3 Ownership by individuals, partnerships, and corporations, 25 Subject to reserve requirements, 15 Turnover, 13 Deposits (See also specific types of deposits): Banks, by classes, 3, 16, 17, 19, 2 0 - 2 3 , 29 Federal Reserve Banks, 4, 12 Subject to reserve requirements, 15 Turnover, 13 Discount rates at Reserve Banks (See Interest rates) Discounts and advances by Reserve Banks (See Loans) Dividends, corporate, 37 EMPLOYMENT, 46, 47 Euro-dollars, 27 FARM mortgage loans, 41 Farmers Home Administration, 41 Federal agency obligations, 4, 11, 12, 13, 34 Federal and Federally sponsored credit agencies, 35 Federal finance: Debt subject to statutory limitation and types and ownership of gross debt, 32 Receipts and outlays, 30, 31 Treasury operating balance, 30 Federal Financing Bank, 30, 35 Federal funds, 3, 6, 18, 20, 21, 22, 27, 30 Federal home loan banks, 35 Federal Home Loan Mortgage Corp., 35, 40, 41 Federal Housing Administration, 35, 40, 41 Federal intermediate credit banks, 35 Federal land banks, 35, 41 Federal National Mortgage Assn., 35, 40, 41 Federal Reserve Banks: Condition statement, 12 Discount rates (See Interest rates) U.S. Government securities held, 4, 12, 13, 32, 33 Federal Reserve credit, 4, 5, 12, 13 Federal Reserve notes, 12 Federally sponsored credit agencies, 35 Finance companies: Assets and liabilities, 39 Business credit, 39 Loans, 20, 21, 22, 42, 43 Paper, 25, 27 Financial institutions, loans to, 18, 2 0 - 2 2 Float, 4 Flow of funds, 44, 45 Foreign: Currency operations, 12 Deposits in U.S. banks, 4, 12, 19, 20, 21, 22 Exchange rates, 68 Trade, 55 Foreigners: Claims on, 60, 61, 66, 67 Liabilities to, 23, 5 6 - 5 9 , 6 4 - 6 7 GOLD. Certificates, 12 Stock, 4, 55 Government National Mortgage Assn., 35, 40, 41 Gross national product, 52, 53 A165Federal Reserve Bulletin • February 1979 HOUSING, new and existing units, 50 INCOME, personal and national, 46, 52, 53 Industrial production, 46, 48 Instalment loans, 42, 43 Insurance companies, 29, 32, 33, 41 Insured commercial banks, 17, 18, 19 Interbank deposits, 16, 17, 20, 21, 22 Interest rates: Bonds, 3 Business loans of banks, 26 Federal Reserve Banks, 3, 8 Foreign countries, 68 Money and capital markets, 3, 27 Mortgages, 3, 4 0 Prime rate, commercial banks, 26 Time and savings deposits, maximum rates, 10 International capital transactions of the United States, 5 6 - 6 7 International organizations, 5 6 - 6 1 , 64—67 Inventories, 52 Investment companies, issues and assets, 37 Investments (See also specific types of investments): Banks, by classes, 16, 17, 18, 20, 21, 22, 29 Commercial banks, 3, 15, 16, 17, 18 Federal Reserve Banks, 12, 13 Life insurance companies, 29 Savings and loan assns., 29 LABOR force, 47 Life insurance companies (See Insurance companies) Loans (See also specific types of loans): Banks, by classes, 16, 17, 18, 2 0 - 2 3 , 29 Commercial banks, 3, 15-18, 2 0 - 2 3 , 24, 26 Federal Reserve Banks, 3, 4, 5, 8, 12, 13 Insurance companies, 29, 41 Insured or guaranteed by United States, 40, 41 Savings and loan associations, 29 MANUFACTURING: Capacity utilization, 46 Production, 46, 49 Margin requirements, 28 Member banks: Assets and liabilities, by classes, 16, 17, 18 Borrowings at Federal Reserve Banks, 5, 12 Number, by classes, 16, 17, 19 Reserve position, basic, 6 Reserve requirements, 9 Reserves and related items, 3, 4, 5, 15 Mining production, 49 Mobile home shipments, 50 Monetary aggregates, 3, 15 Money and capital market rates (See Interest rates) Money stock measures and components, 3, 14 Mortgages (See Real estate loans) Mutual funds (See Investment companies) Mutual savings banks, 3, 10, 2 0 - 2 2 , 29, 32, 33, 41 NATIONAL banks, 17, 19 National defense outlays, 31 National income, 52 Nonmember banks, 17, 18, 19 OPEN market transactions, 11 PERSONAL income, 53 Prices: Consumer and wholesale, 46, 51 Stock market, 28 Prime rate, commercial banks, 26 Production, 46, 48 Profits, corporate, 37 REAL estate loans: Banks, by classes, 18, 2 0 - 2 3 , 29, 41 Life insurance companies, 29 Mortgage terms, yields, and activity, 3, 40 Type of holder and property mortgaged, 41 Reserve position, basic, member banks, 6 Reserve requirements, member banks, 9 Reserves: Commercial banks, 16, 18, 20, 21, 22 Federal Reserve Banks, 12 Member banks, 3, 4, 5, 15, 16, 18 U.S. reserve assets, 55 Residential mortgage loans, 40 Retail credit and retail sales, 42, 43, 46 SAVING: Flow of funds, 44, 45 National income accounts, 53 Savings and loan assns., 3, 10, 29, 33, 41, 44 Savings deposits (See Time deposits) Savings institutions, selected assets, 29 Securities (See also U.S. Government securities): Federal and Federally sponsored agencies, 35 Foreign transactions, 65 New issues, 36 Prices, 28 Special Drawing Rights, 4, 12, 54, 55 State and local govts.: Deposits, 19, 20, 21, 22 Holdings of U.S. Government securities, 32, 33 New security issues, 36 Ownership of securities of, 18, 20, 21, 22, 29 Yields of securities, 3 State member banks, 17 Stock market, 28 Stocks (See also Securities): New issues, 36 Prices, 28 TAX receipts, Federal, 31 Time deposits, 3, 10, 13, 15, 16, 17, 19, 20, 21, 22, 23 Trade, foreign, 55 Treasury currency, Treasury cash, 4 Treasury deposits, 4, 12, 30 Treasury operating balance, 30 UNEMPLOYMENT, 47 U.S. balance of payments, 54 U.S. Government balances: Commercial bank holdings, 19, 20, 21, 22 Member bank holdings, 15 Treasury deposits at Reserve Banks, 4, 12, 30 U.S. Government securities: Bank holdings, 16, 17, 18, 20, 21, 22, 29, 32, 33 Dealer transactions, positions, and financing, 34 Federal Reserve Bank holdings, 4, 12, 13, 32, 33 Foreign and international holdings and transactions, 12, 32, 64 Open market transactions, 11 Outstanding, by type of security, 32, 33 Ownership, 32, 33 Rates in money and capital markets, 3, 27 Yields, 3 Utilities, production, 49 VETERANS Administration, 40, 41 WEEKLY reporting banks, 2 0 - 2 4 Wholesale prices, 46 YIELDS (See Interest rates) 78 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories T { vm x Minneapolis$ \l bP Detroit MftlI Chicago Omaha* jSa/t Lake City Kansas Louisvil City t. Louis UTcuW' tfichm?* 'harlot ^mphisSashjilU \Oklahoma City. )s ^ge/es Attle Rock Birminghai I® %lanta > Dallas® 12s*** Houston j San Antonio January 1978 SiSl®i®?! HAWAII BIHIB^WB 0 LEGEND — Q Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch Territories • Federal Reserve Branch Cities Board of Governors of the Federal Reserve System Federal Reserve Bank Facility