Full text of Federal Reserve Bulletin : February 1988
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VOLUME 7 4 •
NUMBER 2 •
FEBRUARY 1988
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D . C .
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PUBLICATIONS COMMITTEE
Joseph R. Coyne, Chairman • Michael Bradfield • S. David Frost
• Griffith L. Garwood • Donald L. Kohn • Michael J. Prell • Edwin M. Truman
If; ft" ,
y,
The FEDERAL RESERVE BULLETIN is issued monthly under the direction of the staff publications committee. This committee is responsible for
opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Section headed by Mendelle T.
Berenson, the Graphic Communications Section under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles.
Table of Contents
79 STATE AND LOCAL
GOVERNMENT
FINANCE IN THE CURRENT
EXPANSION
The aggregate fiscal position of the state
and local government sector has deteriorated markedly during the current expansion, moving from a large surplus in the
operating and capital account in 1983 to
deficits in 1987.
89 INDUSTRIAL
PRODUCTION
Industrial production increased an estimated 0.4 percent in November.
106
ANNOUNCEMENTS
New members named to Consumer Advisory Council.
Appointment of new chairman of the Pricing Policy Committee.
Increase in net transaction accounts to
which 3 percent reserve requirement will
apply.
Operational changes to automated clearinghouse mechanism.
Amendment to Regulation T.
Amendment to Regulation Z.
91 STATEMENTS
TO
CONGRESS
Alan Greenspan, Chairman, Board of Governors, presents the views of the Board on
modernizing the U.S. financial system to
adapt it to the important changes in technology and competition that have already
transformed financial markets here and
abroad and suggests that the Glass-Steagall
Act be repealed insofar as it prevents bank
holding companies from being affiliated
with firms engaged in securities underwriting and dealing activities, before the Senate
Committee on Banking, Housing, and Urban Affairs, December 1, 1987.
103 Chairman Greenspan discusses the role of
commodity prices in the international coordination of economic policy and says that
he believes the Federal Reserve should not
be required to report to the Congress a
projected range for the movement of an
index of commodity prices, before the Subcommittees on Domestic Monetary Policy
and on International Finance, Trade and
Monetary Policy of the House Committee
on Banking, Finance and Urban Affairs,
December 18, 1987.
Approval of bank holding company application.
Extension of comment period on a program
to permit state member banks to amortize
losses on qualified agricultural loans.
Proposal for new regulation to carry out
provisions of the Expedited Funds Availability Act; proposal to amend Regulation Z
to require increased disclosures about home
equity lines of credit much earlier in the
credit-granting process.
Proposed revisions to official staff commentaries on Regulations B, E, and Z.
Admission of seven state banks to membership in the Federal Reserve System.
112 RECORD OF POLICY ACTIONS OF THE
FEDERAL OPEN MARKET
COMMITTEE
-A
At the FOMC meeting on November 3,
1987, all of the members indicated their
support of a directive that called for maintaining the degree of reserve pressure that
had been sought in recent days. The members recognized that the volatile conditions
in financial markets and related uncertainties in the business outlook might continue
to indicate the need for special flexibility in
the conduct of open market operations.
Such an approach to policy implementation
would depend in particular on the strength
of demands for liquidity stemming from
recent and prospective developments in financial markets. To the extent that the
functioning of those markets permitted a
return to more normal open market operations, the members indicated that somewhat lesser reserve restraint would be acceptable, while slightly greater reserve
restraint might be acceptable, depending on
the strength of the business expansion, indications of inflation, the performance of
the dollar in foreign exchange markets, with
account also taken of the behavior of the
monetary aggregates. The members believed that the outlook for monetary growth
over the months ahead was subject to unusual uncertainty, but the contemplated reserve conditions were thought likely to be
consistent with somewhat faster growth in
M2 and M3 than had been expected earlier;
such growth might center on annual rates of
around 6 to 7 percent for the period from
September through December. Largely reflecting the bulge in October, growth in Ml
in the fourth quarter as a whole was expected to be well above its average pace in
the previous several months. However, because of the very substantial uncertainty
that still surrounded the outlook for Ml, the
Committee decided to continue its practice
of not specifying a numerical expectation
for its growth. The members agreed that the
intermeeting range for the federal funds
rate, which provides a mechanism for initiating consultation of the Committee when
its boundaries are persistently exceeded,
should be reduced from 5 to 9 percent to 4
to 8 percent.
121 LEGAL
DEVELOPMENTS
Various bank holding company, bank service corporation, and bank merger orders;
and pending cases.
A l FINANCIAL
AND BUSINESS
STATISTICS
A3 Domestic Financial Statistics
A44 Domestic Nonfinancial Statistics
A53 International Statistics
A69 GUIDE TO TABULAR
PRESENTATION,
STATISTICAL RELEASES, AND SPECIAL
TABLES
A82 BOARD OF GOVERNORS
AND STAFF
A84 FEDERAL OPEN MARKET
COMMITTEE
AND STAFF; ADVISORY
COUNCILS
A86 FEDERAL RESERVE
PUBLICATIONS
BOARD
A89 INDEX TO STATISTICAL
TABLES
A91 FEDERAL RESERVE BANKS,
AND OFFICES
BRANCHES,
A92 MAP OF FEDERAL RESERVE
SYSTEM
State and Local Government Finance
in the Current Expansion
Laura S. Rubin of the Board's Division of Research and Statistics prepared this article. Sylvia
L. Lucas provided research assistance.
scribes the effects of the Tax Reform Act of 1986
on state and local governments, as well as recent
developments in municipal securities markets.
The state and local government sector has seen
enormous change during the current economic
expansion. The aggregate fiscal position has deteriorated markedly, moving from a large surplus
in the operating and capital account in 1983, the
first year of the expansion, to deficits in 1987.
Several factors are responsible for the fiscal
erosion. Construction spending surged earlier in
the expansion, financed in part with tax-exempt
debt raised in the capital markets. At the same
time, federal aid was reduced, and weakness in
the energy and agriculture sectors cut revenues
in major areas of the country.
Growth in construction outlays has abated in
recent quarters, easing fiscal strain; but, at the
same time, federal grants are not expected to rise
appreciably, and regional difficulties, while diminishing, remain. This article discusses developments in the state and local sector during the
economic expansion and the current fiscal position of these governments. The article also de-
THE FIRST HALF OF THE 1980S
The state and local sector was hit hard by backto-back recessions in 1980 and 1982 (table 1).
And, the sector recorded deficits in both those
years despite a marked contraction in the growth
of expenditures. The cyclical deterioration in
budgetary positions in the early 1980s was compounded by sharp reductions in federal grants,
which fell more than 10 percent in nominal terms
between the fourth quarter of 1980 and the first
quarter of 1982. The reaction was belt tightening,
in which employment declined for nearly two
years, a development unprecedented in the postwar history of the sector (chart 1). In addition,
during the recessionary period, real outlays for
construction continued the descent that had begun in 1969; by 1983, spending was barely half
the peak of 1968.
The cyclical expansion in economic activity
began in late 1982; but when budgets were
1. Fiscal developments in the state and local sector
Percent change except as noted1
Surplus
(deficit-) 2
(billions of
dollars)
Total
Taxes
Grants
1980
1981
1982
1983
1984
-.3
4.2
-1.8
4.4
19.8
10.6
5.8
6.5
10.0
9.6
11.1
10.3
7.9
12.4
9.7
9.3
-8.6
.0
1.8
12.0
1985
1986
1987
16.0
7.4
-5.03
7.2
5.8
6.0
7.3
7.1
7.8
7.7
-.9
.9
Period
«St
¥ws"
Receipts
j 1**'
••
1. Annual percent changes are measured from fourth quarter to
fourth quarter; data for 1987 are from fourth quarter 1986 to third
quarter 1987, at an annual rate.
Real purchases
Expenditures
Total
Construction
9.9
6.2
6.4
6.0
8.8
-.3
-1.3
.6
1.5
4.4
-5.3
-10.5
.0
-4.9
9.0
8.7
8.8
7.5
4.0
4.6
2.6
11.0
6.5
-2.0
2. Operating and capital accounts, excluding social insurance
funds.
3. Average of three quarters.
80
Federal Reserve Bulletin • February 1988
1. Employment and construction in the
state and local sector
2. Capital stock per capita, state and local sector
Thousands of 1982 dollars
Millions
^T 6
Employment
5
10
4
5
II 1 • 1 II • 111II11 H 11 1 H 11
1 RII 1 I 1 II I 1
Billions of 1982 dollars
Construction
60
40
1
I - N I I I I I I II • 1 II H MILL
1 I 11
1950
I960
1970
a 111 H
1980
20
I
1987
1946-86, annual data; 1987, employment is average of first three
quarters, construction is annual rate for first three quarters.
SOURCE. U.S. Department of Labor and U.S. Department of
Commerce.
planned and tax proposals were set forth during
the late winter and spring of 1983, most forecasters were expecting only moderate growth in the
economy and the outlook for many state and
local governments remained dismal. Sizable tax
increases were deemed necessary, and planswere made to slow outlays further. These policies, it was hoped, would produce balanced
budgets—perhaps even small surpluses—in the
year ahead. The surprise came from the strength
of the economic recovery. With retail sales, as
well as personal and corporate income, expanding more rapidly than anticipated, state and local
government tax receipts shot up more than 12
percent in 1983, the largest advance in 11 years;
total receipts, including grants, rose 10 percent.
At the same time, the growth in expenditures
slowed to 6 percent, and the sector reported a
sizable surplus in its operating and capital accounts, excluding social insurance funds, by the
second half of 1983.
With the improved fiscal stance and expectations of continued growth in receipts, state and
local governments began to address a perceived
need for increasing investment in the infrastructure. Together with normal depreciation and a
steadily growing population, the reduction in
I l i l M l l M i a i l l B l l l B I I I H I l l B l l l B I
1950
1960
1970
1980
1987
1948-86, annual data net of depreciation; 1987, staff estimate of
third-quarter data.
SOURCE. U.S. Department of Commerce.
spending on construction during the preceding 15
years resulted in a decline in the real net capital
stock per capita for the state and local sector by
1981, the first in the postwar period (chart 2).
With highways, sewers, and water supply facilities in need of repair and expansion, an apparent
gap existed between the actual stock of capital
and the desired stock. Dramatic events such as
the collapse of a major bridge in Connecticut in
June 1983 heightened public concern. Other issues began to surface. Birth rates turned around
in 1977, leading to a rise in the school-age population by 1984, and to the need to expand and
renovate the school system (chart 3). The surge
in homebuilding during the mid-1980s stimulated
construction of roads and sewers. Also, overcrowding in prisons forced many governments to
improve correctional facilities.
By 1984, many state and local governments
had embarked on sizable investment programs.
For the sector as a whole, growth in real outlays
3. State and local school construction
Billions of 1982 dollars
1965
1970
Millions
1975
Quarterly data.
SOURCE. U.S. Department of Commerce.
1980
1985 1987
State and Local Government Finance in the Current Expansion
for construction averaged nearly 9 percent annually between 1984 and 1986. Some of the largest
increases were in real spending for fire, police,
and, most important, corrections facilities. Real
expenditures on school construction, as well as
building of sewers and water supply systems,
also rose dramatically, while the increase in
spending on highways and roads was relatively
moderate. Overall, the upswing in construction
renewed the growth of the net real capital stock
of state and local governments; per capita, the
capital stock rose in 1986 for the first time since
i m
The turnaround in capital spending likely
would have been even stronger but for special
factors that clouded prospects for state and local
governments in the mid-1980s. These included
unusual economic stresses in certain regions of
the country and continuing and potential cuts in
federal grants. In addition, an overhaul of the
federal tax code under consideration at that time
raised many questions for state and local officials.
Regional
Stresses
During the 1980s, the financial situation varied
dramatically among state and local governments.
The regions confronting the greatest problems
were primarily those dependent on agriculture
and energy-related industries. Real net farm income fell 46 percent in 1980, and through 1986
remained below the levels typical of the 1960s
and 1970s. Profits and sales of agricultural equipment retailers were reduced as well. As a consequence, states and localities dependent on sales
and income tax receipts generated by these activities suffered.
However, the picture in the farm belt has
improved in the past two years for several reasons. First, federal government subsidies were
increased in 1986, adding substantially to net
farm income. Second, input costs have fallen off
in recent years, in part because oil prices and
interest rates have declined, and thus profit margins have widened for many farmers. As a result,
real net
-w«s lip substantially in
1986, and in 1987, it is estimated, it rose above its
previous high nine years earlier; and so tax
revenues in most farm states have trended up in
recent years, d
81
The energy states—Alaska, Louisiana, Montana, New Mexico, North Dakota, Oklahoma,
Texas, and Wyoming—have been heavily dependent on revenue from severance taxes, which are
based on the quantity or value of extracted
natural resources. Receipts from these taxes
have fallen substantially in recent years. For
example, the $10 per barrel drop in the price of
oil during the first half of 1986 was estimated to
have cost most of these states 5 to 10 percent of
total expected revenue. Secondary effects on
businesses\were?significant as well.
Oil prices, though recovered somewhat from
their lows in July 1986, are still depressed below
those that spurred the boom in local economies;
and budgetary pressures have continued to
squeeze government spending. All of the energy
states cut the budgets that had been enacted into
law in fiscal 1987; and several made cuts in fiscal
1986.
In contrast, throughout this period, New England, the West Coast, and the Mid-Atlantic
states enjoyed fiscal health. The economies of
the Great Lakes states grew steadily, if slowly,
during the expansion, as their budgetary positions strengthened after the recessions in the
early 1980s.
il {IT?: - * v.-
Federal
'
Grants
v
> ijOHJjiV-:.
Federal grants became a far less important
source of state and local revenue in the early
1980s, falling from a high of 23 percent of receipts
in the late 1970s to 19 percent in 1982. During the
economic expansion, federal aid did increase,
but more slowly than other sources of revenue;
and its share of state and local receipts fell, to
less than 16 percent in the third quarter of last
year (chart 4).
The tendency to reduce aid to state and local
governments reflected budgetary restraint at the
federal level. Among specific programs, general
revenue-sharing, which funneled about $4.5 billion per year of unrestricted funds to local governments during the first half of the 1980s, was
elijifiiated after fiscal 1986. ,'Axi^i^^/Xilikfi
cutback in the growth of grants for community
development, urban renewal, unemployment assistance, and education, all of which fell as a
percent of gross national product. In other areas,
82
Federal Reserve Bulletin • February 1988
4. Federal aid as a percentage of
state and local revenue
Percent
20
— 15
J .
111
"
10
m
1950
11 1 •
1 II 11 1 1 1 II I I1I III II I I I II II i l l
1960
1987
1970
1980
1946-86, annual data; 1987, third-quarter data.
SOURCE. U.S. Department of Commerce.
federal aid grew relative to GNP; in particular,
the growing concern about infrastructure stimulated a rise in highway grants.
Tax
Reform
Also influencing state and local decisionmaking
during the mid-1980s was the uncertainty about
tax reform and about its eventual consequences
for state and local finances, although it appears
that, on balance, the Tax Reform Act of 1986 will
have few negative repercussions for the sector.
One particularly worrisome possibility under
consideration in the mid-1980s was the elimination of the deductibility of state and local income,
sales, and property taxes in the computation of
taxable income for federal tax purposes. The
result, it was feared, would be pressure to reduce
state and local taxes, eventually necessitating
cutbacks in spending. In the end, the act eliminated only the deductibility of sales taxes, thus
blunting the effect on future tax receipts.
The base-broadening aspects of tax reform
increased both federal adjusted gross income and
federal taxable income. Thus collections were
expected to increase in the 35 states that link
their personal income taxes to one of those
aggregates. In contrast, income tax receipts were
expected to fall in those states—Rhode Island,
Nebraska, Vermont, and North Dakota—that
couple their personal tax codes to federal tax
liability, which reform was expected to curtail.
Without offsetting action, the net result of the
base-broadening provisions would have been an
added $6 billion in state personal income tax
collections in fiscal 1988, less than 1 percent of
total state and local receipts. But, now that plans
of most of the affected states are decided, it
appears that the "windfall" for the sector will be
largely forgone: many states have reduced tax
rates or increased personal exemptions and standard deductions, under political pressure to
maintain the revenue neutrality of federal tax
reform at the state level. Sixteen states—many of
them in the energy or farm belt—are retaining all
or a portion of their increase; but because they
are relatively small, their combined windfall is
quite modest, amounting to about $1 billion.
Thus the base-broadening aspect of tax reform
should have little net effect on the potential for
spending in the sector as a whole.
Tax reform also acted to curtail offerings of
municipal securities. On the supply side, the
definition of a public-purpose bond was narrowed, and issuance of private-purpose debt was
restricted. (See appendix A for a discussion of
these provisions.) These restrictions appear to
have hampered the sale of debt in the tax-exempt
market, the traditional source of funds for about
40 percent of state and local construction outlays. On the demand side, some traditional institutional participants now have less incentive to
invest in tax-exempt bonds; and the value of the
tax exemption to many high-income individuals
has fallen as a result of the reduction in the
highest income tax rates. Although the net effect
on demand has been cushioned by the elimination of many alternative tax-sheltered investments, the overall effect of reductions in both
demand for and offerings of tax-exempt securities appears to have been a decrease in relative
demand.
The Current Status of the
State and Local Sector
Boosted by the surge in outlays for construction
in the early years of the recovery, growth in total
real purchases by state and local governments
has averaged 3.5 percent per year during the
current economic expansion. This rate compares
with the virtual absence of growth during the
early 1980s and a 2.7 percent rate during the
1970s. But, during the past two years, receipts
have not kept pace with outlays. The deterioration in the fiscal position of the sector was
State and Local Government Finance in the Current Expansion
substantial in 1986, especially after taking account of special temporary inflows, which included the settlement of federal-state disputes on
energy-related matters as well as the acceleration
of the final revenue-sharing payment.
The weakening in the budgetary position of
state and local governments continued in 1987,
and by the third quarter the sector had registered
a deficit in its operating and capital accounts,
which excludes social insurance funds, for four
consecutive quarters. Information available
about state budgets indicates weakness in their
operating as well as capital accounts. In every
state except Vermont the general funds budget
must be balanced; in several cases a balanced
budget over a two-year period is the goal. The
general funds budget is the main operational
budget for state governments. On the expenditure side it includes compensation for employees
as well as outlays for nondurable goods, other
services, and debt service; but it typically does
not include spending for construction. During
fiscal year 1987, which ended June 30 in all but
four states, the cash balance for the general funds
budgets of all the states represented an unusually
small share of expenditures (table 2).
Facing the erosion of their general funds budgets, many states took action to forestall further
deterioration in their fiscal positions. Their first
recourse was to cut outlays from planned levels.
During fiscal 1987, 24 states cut their budgets,
with the majority of reductions in the 3 to 5
percent range. In most states, the governor can
effect such cuts without calling a special legisla2. Balances in state general funds, year-end,
fiscal years 1978-87 1
Year-end balance
(billions of dollars)
Balance as a percent of
expenditures
1978
1979
1980
1981
1982
8.9
11.2
11.8
6.5
4.5
8.6
8.7
9.0
4.4
3.0
1983
1984
1985
1986
1987e
2.0
5.6
8.0
5.4
3.5
1.3
3.3
4.3
2.6
1.6
Fiscal year
r
vmf
•> ,
OTgr
1. Does not include balances from budget stabilization funds, but
does carry over balance from previous year,
e Estimate.
SOURCE. National Association of State Budget Officers.
83
tive session; indeed, many of these reductions
were in train before the start of the legislative
sessions. Thirty-three states raised taxes, primarily during the regularly scheduled legislative
sessions of winter and spring 1987. (These tax
hikes do not include the adjustments made to
compensate for the effects of federal tax reform,
discussed earlier.) Almost all of the increases
were in general sales taxes and in excise taxes on
motor fuels, cigarettes, and alcoholic beverages,
the types of taxes preferred in recent years.
Many of the budget adjustments, both expenditure cuts and tax hikes, were in energy and farm
states.
Real purchases of goods and services by state
and local governments slowed during the two
middle quarters of calendar 1987, probably in
part because of the recent budget cuts. The
reduction in the pace of outlays was due to
weakness in real construction activity, which
declined in both quarters, as pressure in operating accounts spilled over into capital budgeting.
However, sihcfe September, Sending foi* Structures has picked up 4s r^al outlays for highways
and water supply facilities rose above the highs
recorded earlier in the year. In contrast, construction of schools said o&ef £tate and local
buildings, which include correctional facilities,
remained well below previous levels.
Unlike the deficits of postwar years up until
the late 1960s, those in the state and local sector
during the past year can be attributed only partly
to construction spending. Between 1948 and
1968, growth
in real construction outlays averaged 9 percent per year, and deceits wett>,recorded every year in the sector's combined operating and capital account. Construction
spending in nominal terms climbed from 17 percent of total expenditures in 1947 to 28 percent in
1956 and accounted for at least 23 percent
through 1968 (chart 5). In comparison, during the
mid-1980s, the share of construction spending
remained around 10 percent; and even though
nominal outlays for construction have fallen almost 2 percent over the past year, operating and
capital account deficits have persisted during the
same period. The current fiscal erosion thus
appears to be largely the result of an imbalance
between expenditures and receipts in operating
aceoilBtfc/ Qver, the past year*' a s ^ n s t n i c t i o n
84
Federal Reserve Bulletin • February 1988
5. Construction outlays and the
state and local budget position
Percent
Surplus or deficit of combined operating and capital accounts
1947-87, annual data; 1987, average of first three quarters at annual
rate.
rtr-
J?
: ! •
-
•
spending has fallen, outlays for goods and services other than compensation have increased
more rapidly relative to receipts than have total
expenditures. And, state and local governments
reacted to weakness in the general funds accounts by hiking taxes and cutting budgets in the
first half of 1987.
THE TAX-EXEMPT
• • :
r.
-T
BOND
MARKET
As noted above, the volume of tax-exempt bond
offerings has declined substantially since passage
of the Tax Reform Act of 1986 (chart 6). Issuance
had climbed steadily after 1981, surging to $214
billion in 1985 when many issuers rushed to beat
proposed legislative deadlines. All types of taxexempt issues contributed to the bulge in volume, which was caused by the effort to avoid a
variety of restrictions on public- and privatepurpose bonds as well as on advance refundings
that tax reform proposals in the House of Representatives would have imposed. In 1986, offerings fell back to $147 billion; issuance fluctuated
throughout the year in response to various legislative proposals and to the postponement of the
effective date of tighter restrictions on publicpurpose bonds.
Issuance of advance refunding bonds remained
relatively heavy between 1985 and the first quarter of 1987. Proceeds of advance refundings are
invested until they can be used to redeem bonds
sold earlier at higher interest rates. (For an
expanded discussion of refunding bonds, see
appendix B.) In 1985, sales of these bonds increased, partly in anticipation of proposals for
tax reform that would limit the number of times
an offering could be refunded in advance. But
even after the proposed effective starting date for
tax reform, January 1, 1986, and after passage of
the legislation, advance refundings continued
heavy. Falling interest rates during this period
seem to have been the primary motive for issuance of these bonds (chart 7). Consequently, it
was not surprising that offerings of tax-exempt
refunding bonds shrank when rates jumped more
than a percentage point in the second quarter of
1987. : >m
Tax-exempt bond issuance was near its 1986
pace in the winter of 1987, when offerings of
refunding bonds were still sizable. After that,
however, refunding volume fell off, so that total
7. Offerings of tax-exempt refunding bonds
6. Total offerings of tax-exempt bonds
Billions of dollars
1981
1983
1985
1987
Annual averages of monthly data.
SOURCE. Securities Data Co. and Public Securities Association.
Quarterly data at annual rates.
SOURCE. The Bond Buyer, Securities Data Co., and Public Securities Association.
State and Local Government Finance in the Current Expansion
issuance of tax-exempt bonds was below the
1983 rate during the remainder of the year. Most
of the reduction in offerings to raise new capital
apparently was due to the tightened restrictions
in tax reform. Some of the decline may have
reflected the intentions of state and local officials
to slow construction spending in the near term in
light of fiscal problems, despite the need for
expansion and renewal of the infrastructure. Incomplete data indicate that the volume of bonds
sold to raise funds for public-purpose construction projects—education, transportation, and
utilities—has declined sharply since 1985, although the provisions in tax reform affecting
these bonds were considerably less restrictive
than those on private-purpose securities.
Faced with the recent reduction in tax-exempt
bond issuance, the municipal finance industry
has undergone a retrenchment, including the
dismissal of many employees. Since mid-October
1987, more than a dozen investment banking
firms and commercial banks have announced
elimination or cutbacks of their municipal securities business. Along with the reduced volume,
volatile market conditions and thin underwriting
margins have been cited as reasons for the cutbacks.
Tax-Exempt
Bond
Rates
Interest rates on tax-exempt revenue bonds
peaked at a record 14.2 percent in January 1982,
and then declined to 7.0 percent in January 1987.
By the end of the year, rates stood about IV2
percentage points higher (chart 8). Interest rates
on tax-exempt bonds do not necessarily move in
tandem with those on taxable securities. Indeed,
the ratio between the two responds to institutional as well as cyclical factors (chart 9). For
example, during the recession years of the 1980s,
property and casualty insurance companies and
commercial banks—the major institutional investors in tax-exempt securities—reduced their purchases of tax-exempt securities as lower profits
lessened their need to shelter income (chart 10).
Without their participation, rates on tax-exempts
rose relative to rates on taxable securities.
Beginning in 1984, institutional factors, particularly changes in federal tax law, were felt in the
market for tax-exempts. Supply and rate pres
85
8. Municipal bond yields
Percent
.
'
..
.
•
10
1
1
1
1
1981
1
1
1983
1
1
<
1987
1985
Data are Bond Buyer monthly index of yields on 30-year revenue
bonds.
sures mounted in the second half of that year as
issuers came to market ahead of the restrictions
on bonds set forth in the Deficit Reduction Act of
1984. Similar reactions to deadlines in the Tax
Reform Act of 1986 pushed up the ratio of
tax-exempt yields to taxable yields in late 1985
and again in mid-1986. The rise in 1986 was
exacerbated by a reduction in the rate on 30-year
Treasury bonds between early spring and midAugust. The ratio then trended down until September 1987, largely in response to the sharp
curtailment of the supply of tax-exempt offerings.
The behavior of many of the traditional investors in the tax-exempt market has changed dramatically since the passage of tax reform. Commercial banks became steady net liquidators of
tax-exempt securities, after the 80 percent deduction for interest costs tied to purchasing and
carrying tax-exempt bonds was eliminated for
securities acquired on or after August 8,1986. On
the other hand, tax reform appears to have had
little effect on property and casualty insurance
companies. Indeed, when the industry returned
to profitability in 1986 after two years marked by
9. Ratio of tax-exempt yields to taxable yields1
Ratio
1.1
V
—
1
0
.9
.8
1
1
1
1981
1
1
1983
1
1
1985
1
1987
1. Ratio of the Bond Buyer index of yields on 30-year revenue
bonds to yields on 30-year Treasury bonds.
86
Federal Reserve Bulletin • February 1988
10. Purchases of state and local government
obligations by major market participants
Percent of total
• Mutual funds + Money market funds
Households
13 Commercial banks
• Property and casualty
insurance companies
9nn
problem with the prospect of an increase in
redemptions because municipal markets at the
long end are not very liquid. To position themselves better, most of the funds restructured their
assets to secure a larger cash position during the
spring, as many funds sold long-term tax-exempt
securities. After a brief period during the summer, when they expanded their assets, tax-exempt mutual funds again began to liquidate their
holdings.
Taxable Municipal
1981
1983
1985
1987
Annual data; 1987 is average of first three quarters at annual rate.
SOURCE. Flow of Funds Section, Division of Research and Statistics.
severe underwriting losses, its participation in
the tax-exempt market expanded.
The role of individual investors and the way in
which they invest in tax-exempt securities have
changed markedly in recent years. The popularity of tax-exempt mutual funds and unit investment trusts grew during the 1980s. These investments afforded individual investors access to the
tax-exempt market, which otherwise would have
been closed to them if they lacked the resources
or expertise to buy securities directly. Moreover,
in recent years, tax-exempt funds have afforded
individuals liquidity—for example, through transaction features such as check writing and exchange privileges with other mutual funds.
However, holdings of tax-exempt bond and
money market funds fell during the second quarter of 1987. According to some reports, part of
the decline was accounted for by diversions of
funds to meet the one-time enlargement in income tax payments. In addition, when interest
rates turned sharply upward, many investors
became uneasy and tried to liquidate their holdings. Most of the long-term funds were caught off
guard when redemptions quickened in the spring.
Because the municipal yield curve is so steep,
the opportunity cost of remaining fairly liquid is
quite high. Hence, during the years that interest
rates were falling and the value of principal was
rising, the funds found that their best strategy
was to keep as much of their portfolios as possible in longer-term securities. Doing so became a
Bonds
•
Starting virtually from zero, offerings of taxable
municipal securities grew during much of 1986,
and by the end of October nearly $4 billion of
taxable municipals had been sold. Almost all of
the offerings were bonds that would not have
qualified for tax-exempt status under the new tax
law. Issuance was predominantly for private
purposes: 60 percent was for housing, and
around 15 percent each was for agriculture and
development. Most of these taxable municipal
bonds were well received by the market; they
were purchased largely by investors that traditionally buy corporate bonds, such as pension
funds. More than half of the 1986 volume of
taxable municipals was accounted for by 10
offerings that were backed by guaranteed investment contracts (GICs), through which arbitrage
profits were ensured.
In the fall of 1986, analysts generally expected
a further rapid expansion of these offerings;
estimates of 1987 activity reached as high as $40
billion. But, in November 1986, issuance of GICbacked bonds was halted in the wake of difficulties at the leading underwriter of these securities. In November and December, when no
GlC-backed bonds were sold, about 22 taxable
issues came to market; many of them were under
$1 million. Most of the issues at year-end were
for economic development or for housing; many
were insured or backed by bank letters of credit,
and several were privately placed.
The problems of the GlC-backed bonds apparently thwarted the development of the taxable
municipal market: few offerings backed by GICs
were issued in 1987. Offerings of other taxable
municipal securities continued to be sold; total
issuance of taxable municipal securities in 1987
State and Local Government Finance in the Current Expansion
was estimated at a bare $3.8 billion. Several
announcements of arbitrage securities were
made—the proceeds of these securities were to
be reinvested in other taxable securities with the
intention of earning arbitrage profits—only to be
withdrawn. However, in the fourth quarter, actual sales of a planned $1 billion offering totaled
$250 million in notes and $600 million in commercial paper.
THE OUTLOOK
SECTOR
FOR THE STATE AND
LOCAL
The state and local sector as a whole is currently
experiencing fiscal weakness. An unusual number of states took action during fiscal 1987 to halt
the erosion of their budgetary positions, and
further adjustments by several governments are
already under way. Despite these adjustments,
budgetary pressures are likely to remain intense,
for these reasons:
• Federal aid to state and local governments is
not expected to rise appreciably in the near term.
In light of the appropriations and reconciliation
bills for fiscal year 1988 enacted in December
1987, grants are expected to be little changed in
real terms from the level in fiscal year 1987.
• Uncertainties regarding their own fiscal situations continue to plague the energy states. Although oil prices rose from their lows of 18
months ago, they have fallen back somewhat and
are still well below the peaks that were associated
with rapid economic expansion in the oil patch.
• The effects of the tax reform legislation on
the sector appear to have been a contraction in
offerings of tax-exempt bonds and a rise in relative costs. In 1987, the margin between the yields
on newly issued 30-year tax-exempt bonds and
on taxable bonds was almost Vi percentage point
APPENDIX A: TAX REFORM AND THE
MUNICIPAL BOND MARKET
Under tax reform, the definition of a publicpurpose obligation was narrowed. Generally, a
bond will lose its tax-exempt status if more than
10 percent of its proceeds benefit a private entity,
87
less than it was during the first half of the decade.
As a result, tax reform could mean higher construction costs for state and local governments
unless funds from sources such as tax revenue or
grants are available. Much still needs to be done
to modernize and expand the infrastructure, and
many of the fundamental factors affecting the
demand for further outlays have not changed.
The school-age population continues to grow, as
does the prison population. Eventually, an expansion of real spending on schools, roads, sewers, and prisons will likely be forthcoming.
In addition to the familiar worries about federal aid, oil prices, and tax reform, the future
path of tax receipts has reportedly concerned
some state and local officials. After the stock
market collapse last October slashed household
sector wealth, concern centered on the general
economic outlook and on prospects for consumer
spending. Any drop in retail sales means a drop
in receipts of state and local sales and excise
taxes; and other tax collections could be affected. At least one government has already
acted. In late October, New York City, affected
by the apparent contraction in the securities
industry as well as the general aspects of the
collapse, ordered a 90-day job freeze and suspended a pay raise for 4,000 city workers.
Planned outlays for repairs to streets, sewers,
and parks were curtailed. City officials, it was
reported, feared a reduction in revenue from
taxes based on personal income, business profits,
and real estate values.
The outlook for the budget position in the state
and local sector thus is very uncertain. Many of
the external factors point toward further deterioration in operating accounts. But, government
officials appear to be attentive to current events,
and they have shown resourcefulness in dealing
with fiscal imbalances.
compared with 25 percent under earlier law.
Among private-purpose issues, all industrial development bonds (IDBs) and housing bonds have
been placed under a set of state-by-state volume
caps, which limited issuance to about $21 billion
in 1986 and in 1987 and to less than $14 billion a
year thereafter. Issuance of these bonds was
88
Federal Reserve Bulletin • February 1988
estimated at around $55 billion, $60 billion, and
$75 billion in 1983, 1984, and 1985 respectively.
Single-family housing bonds are scheduled to be
eliminated after 1988, and the exemption for
small-issue IDBs that are intended for manufacturing purposes will end after 1989. (The exemption for commercial small-issue IDBs ended after
1986.) Moreover, bonds for industrial parks, pollution control, and parking, sports, convention,
and trade-show facilities lost their tax-exempt
status entirely. In contrast, bonds for private
exempt entities, such as nonprofit hospitals and
colleges, as well as IDBs for airports, docks, and
wharves, are still exempt and are not subject to
annual volume caps.
Under tax reform, all arbitrage earnings after
an initial six-month period have to be rebated to
the Treasury; previously, the arbitrage period for
public-purpose capital improvement bonds was
three years. In addition, the number of times a
bond can be refunded in advance has been limited.
The tax bill also weakened the incentives of
certain traditional institutional investors for holding tax-exempt securities. For acquisitions on or
after August 8,1986, commercial banks no longer
can take an 80 percent deduction for the interest
costs of purchasing and carrying tax-exempt
bonds; an exception is made for bonds of governmental units that reasonably expect to issue
no more than $10 million of public-purpose bonds
or bonds of private exempt entities within a
calendar year. The tax incentives for property
and casualty insurance companies to hold taxexempt bonds also were reduced. These institutional investors had been important participants
in the tax-exempt market: at the end of 1985,
commercial banks held about $230 billion in
tax-exempt debt, accounting for more than a
third of the total; property and casualty companies held 12 percent.
Another important provision of the tax reform
legislation included interest earned on newly
issued private-purpose tax-exempt debt, except
that of private exempt entities, in the calculation
of the alternative minimum tax for individuals
and corporations. In addition, interest on both
outstanding and future tax-exempt bonds held by
businesses has been included in the definition of
gross income for computation of the corporate
minimum tax. Previously, interest on tax-exempt
debt was not subject to any minimum tax.
APPENDIX
BONDS
before their maturity or next call date. Housing
and industrial development bonds may not be
refunded in advance. Current and advance refundings cannot be separated in the available
data on total refundings. However, qualitative
reports suggest that most of the refunding activity since 1982 was done "in advance" to take
advantage of lower interest rates. Historically,
total refundings have been closely associated
with movements in interest rates.
Proceeds of advance refunding bonds typically
are invested in SLGs (special nonmarketable
Treasury securities issued to state and local
governments). SLGs are convenient investments
for the proceeds of advance refunding bonds
because they are issued to yield a specified rate
of interest in accordance with Treasury arbitrage
regulations. Moreover, the maturities of SLGs
can be tailored to match those of the bonds to be
refunded.
•
B: TAX-EXEMPT
REFUNDING
Refunding bonds are long-term tax-exempt securities issued with the sole purpose of refinancing
outstanding bonds. Generally, refundings are undertaken to reduce debt-service costs, although
there are other reasons, such as a desire to
restructure debt. A significant cost saving typically accrues when the new issue bears a rate 2 to
3 percentage points below that on the outstanding bond.
"Current" refundings are used when outstanding bonds may be refinanced in the immediate
future, usually within 90 days of the sale of the
refunding bonds. All tax-exempt bonds may be
refinanced with current refundings. But, only
public-purpose tax-exempt bonds and those issued on behalf of private nonprofit institutions
may be refunded in "advance"—that is, well
89
Industrial Production
Released for publication December 14
Industrial production increased 0.4 percent in
November following an upward revised October
gain of 0.9 percent. In November, gains were
widespread with the exception of the motor
vehicle industry. At 132.5 percent of the 1977
average, total industrial production in November
was 5.4 percent higher than it was a year earlier.
In market groups, output of consumer goods
was about unchanged in November and, on balance, has changed little since August. Among
durables, auto assemblies in November were at
an annual rate of 7.1 million units, compared with
a rate of 7.3 million units in October. Production
of trucks for business and consumer use declined
as well. Output of home goods, after having
fallen sharply in September, rose 1.2 percent in
Ratio scale, 1977 = 100
1981
1983
1985
1987
All series are seasonally adjusted. Latest figures: November.
1981
1983
1985
1987
90
Federal Reserve Bulletin • February 1988
1977 = 100
Percentage change from preceding month
1987
1987
Group
Nov.
Oct.
July
Aug.
Sept.
Oct.
Nov.
Percentage
change,
Nov. 1986
to Nov.
1987
Major market groups
Total industrial production
132.0
132.5
1.2
.5
-.3
.9
.4
5.4
Products, total
Final products
Consumer goods
Durable
Nondurable
Business equipment..,
Defense and space —
Intermediate products..,
Construction supplies,
Materials
140.8
139.4
129.3
123.5
131.5
148.6
189.6
145.3
132.6
120.1
141.2
139.7
129.4
123.1
131.8
149.5
189.7
146.1
133.2
120.6
1.2
1.2
1.3
2.5
.9
i.O
.0
1.2
1.2
1.1
.3
.4
.4
.7
.3
.1
.2
.2
-.5
.7
-.5
-.5
-1.4
-2.4
-1.1
.4
.0
-.4
-.1
.1
1.1
1.3
1.4
4.3
.4
1.6
.3
.4
.2
.5
.3
.2
.1
-.3
.2
.6
.1
.6
.5
.5
5.3
5.1
3.6
4.8
3.1
7.7
2.3
5.8
4.7
5.6
.9
1.9
-.3
.1
2.4
.4
.4
.4
-.2
.6
5.7
5.9
5.4
4.3
4.3
Major industry groups
137.0
136.1
138.3
101.9
113.6
Manufacturing
Durable
Nondurable
Mining
Utilities
1.2
1.2
1.1
.0
1.6
137.5
136.6
138.8
101.6
114.3
.2
.2
.2
1.7
1.6
-.1
-.2
-.1
.8
-1.7
NOTE. Indexes are seasonally adjusted.
October and 0.5 percent in November, with the
gains in production of carpets and furniture and
appliances. Production of business equipment
continued to expand, growing 0.6 percent in
November. The increase primarily reflected continued strength in manufacturing equipment and
Total industrial production—Revisions
Estimates as shown last month and current estimates
Index (1977=100)
Month
August
September
October
November
Percentage change
from previous
months
Previous
Current
Previous
Current
131.0
130.9
131.7
131.2
130.9
132.0
132.5
.3
.0
.6
...
.5
-.3
.9
.4
commercial equipment; indeed, since turning up
sharply in the period from May to June, production in these categories has increased 8.3 percent
and 5.5 percent (not an annual rate) respectively.
Only transit equipment, which includes autos
and trucks, fell in November. Output of defense
and space equipment was little changed again.
Supplies for both construction and business
gained in November, which boosted the output
of intermediate products 0.6 percent. Materials
output rose 0.5 percent in both October and
November, which brought the gain over the year
to 5.6 percent.
In industry groups, manufacturing output rose
0.4 percent in November as both durables and
nondurables were up 0.4 percent. Mining output
declined 0.2 percent, but production by utilities
rose 0.6 percent.
91
Statements to Congress
Statement by Alan Greenspan, Chairman, Board
of Governors of the Federal Reserve System,
before the Committee on Banking, Housing, and
Urban Affairs, U.S. Senate, December 1, 1987.
I welcome this opportunity to present the Federal Reserve Board's views on modernizing our
financial system to adapt it to the important
changes in technology and competition that have
already transformed financial markets here and
abroad. Earlier this year, during its consideration
of the Competitive Equality Banking Act
(CEBA), this committee came to the conclusion
that the laws governing financial activities are in
need of major repairs and that there is an urgent
need for congressional action to this end. As I
read the record, this committee, and then the
Congress as a whole, accepted the task of reconciling the present outdated financial structure
with the realities of a changed marketplace for
financial services and pledged to move ahead
promptly to develop the necessary legislation.
The majority and minority leadership of this
committee have now taken a major step toward
fulfillment of this promise by putting before you,
with their full endorsement, a bill that addresses
what is perhaps the single most important anomaly that now plagues our financial system—the
artificial separation of commercial and investment banking. That bill—S. 1886, the Financial
Modernization Act of 1987—is also precedent
setting because it establishes a framework that
can be tested, and, if it proves adequate as we
expect it will, should serve as a foundation on
which to build more generally for the future.
I want to express the appreciation of the Board
to Chairman Proxmire and Senator Garn for
providing this committee with an excellent
framework on which to launch the necessary
reforms. In our view, we now have an historic
opportunity to put the financial system on a
sounder footing—perhaps a unique opportunity
to make it more responsive to consumer needs,
more efficient, more competitive in the world
economy, and, equally important, more stable.
At the same time, I would also like to thank
Senators Wirth and Graham for their most useful
contribution to the legislative effort now going
forward in this committee.
The Board has for some years taken the position that our laws regarding financial structure
need substantial revision. Developments have
eroded significantly the ability of the present
structure to sustain competition and safe and
sound financial institutions in a fair and equitable
way.
Recently, a great deal of attention has been
focused, in this committee and elsewhere, on
proposals to permit the affiliation of a broader
variety of financial and commercial organizations
with banks, while attempting to assure that affiliated banks are not adversely affected by this
relationship. Our own analysis of these useful
contributions leads us to the conclusion that they
have many positive elements that deserve continuing attention, but that it would be appropriate
at this time to concentrate on the specific proposal contained in the Financial Modernization
Act to repeal the Glass-Steagall Act.
It is our view that enactment of this legislation
would respond effectively to the marked changes
that have taken place in the financial marketplace
here and abroad, and would permit banks to
operate in areas in which they already have
considerable experience and expertise. Moreover, repeal of Glass-Steagall would provide
significant public benefits consistent with a manageable increase in risk.
Accordingly, we would suggest that the attention of the committee should focus on the GlassSteagall Act, and we recommend that this law
be repealed insofar as it prevents bank holding
companies from being affiliated with firms engaged in securities underwriting and dealing
activities. We would not recommend that you
address at this time the more generally compre-
92
Federal Reserve Bulletin • February 1988
hensive, but in some important ways more limited, approach taken in the very interesting proposals put forward in S. 1891 by Senators Wirth
and Graham, about which I will comment in
more detail at the conclusion of my testimony.
On the other hand, we very much prefer a full
repeal of Glass-Steagall to a piecemeal removal
of restrictions on underwriting and dealing in
specific types of securities such as revenue bonds
or commercial paper. This technique would artificially distort capital markets and prevent financial institutions from assuring benefits to customers by maximizing their competitive advantage in
particular markets of their choice.
REASONS FOR REPEAL OF THE
GLASS-STEAGALL
ACT
A very persuasive case has been made for adoption of the repeal proposal. It would allow lower
costs and expanded services for consumers
through enhanced competition in an area in
which additional competition would be highly
desirable. It would strengthen banking institutions, permitting them to compete more effectively at home and abroad in their natural markets for credit that have been transformed by
revolutionary developments in computer and
communications technology. It could be expected to result in attracting more equity capital
to the banking industry when more capital is
needed. In sum, the securities activities of banking organizations can provide important public
benefits without impairing the safety and soundness of banks if they are conducted by experienced managers, in adequately capitalized companies, and in a framework that insulates the
bank from its securities affiliates.
Evaluation
Criteria
In reaching these conclusions, we have been
guided by the principles set down in the Bank
Holding Company Act of 1970, which require the
Board to consider, in determining the appropriateness of new activities for bank holding companies, whether they will produce benefits to the
public such as greater convenience, increased
competition, or gains in efficiency. It also asks us
to evaluate whether these gains may be outweighed by possible adverse effects such as
undue concentration of resources, decreased or
unfair competition, conflicts of interest, or unsound banking practices.
These are the principles that the Congress has
set down to guide the evolution of the banking
system. They made good sense then and they
make good sense today. Over the years we have
interpreted these principles to be consistent with
our efforts to promote competitive and efficient
capital markets and to protect impartiality in the
granting of credit, to avoid the risk of systemic
failure of the insured depository system, and to
prevent the extension of the federal safety net to
nonbanking activities. In our view, achieving
these goals is fully consistent with permitting
bank holding companies to engage in securities
activities. In short, in my testimony today I will
outline why we believe that changes in the GlassSteagall Act should have major public benefits. I
will also explain why we believe that with the
right structure and careful implementation the
changes in the law that we support can be
accomplished without adverse effects.
Public
Benefits
The major public benefit of Glass-Steagall modification would be lower customer costs and
increased availability of investment banking
services, both resulting from increased competition and the realization of possible economies of
scale and scope from coordinated provision of
commercial and investment banking services.
We believe that the entry of bank holding companies into securities underwriting would, in
fact, reduce underwriting spreads and, in the
process, lower financing costs to businesses large
and small as well as to state and local governments. In addition, participation by bank holding
company subsidiaries in dealing in currently ineligible securities is likely to enhance secondary
market liquidity to the benefit of both issuers and
investors. These, we believe, are important public benefits that will assist in making our economy more efficient and competitive.
Studies of the market structure of investment
banking suggest that at least portions of this
industry are concentrated. The most recent evi-
Statements to Congress
dence in this regard is provided in the September
Report of the House Committee on Government
Operations, which presented data supporting its
conclusion that corporate securities underwriting
is highly concentrated. The five largest underwriters of commercial paper account for more
than 90 percent of the market; the five largest
underwriters of all domestic corporate debt
account for almost 70 percent of the market; and
the five largest underwriters of public stock issues account for almost half of the market.
I would emphasize that concentration per se
need not lead to higher consumer costs because
the possibility that new firms will enter a market
may be sufficient to achieve competitive prices.
However, it is just in this regard that the GlassSteagall Act is particularly constraining because
bank holding companies with their existing expertise in many securities activities and their
broad financial skills and industry network more
generally would be the most likely potential
competitors of investment banks if not constrained by law.
It is also important to emphasize that the
changes in the Glass-Steagall Act that we support would be likely to yield cost savings in local
and regional corporate underwriting and dealing
markets. At a minimum, local and regional firms
would acquire access to capital markets that is
similar not only to the access now available to
large corporations but also to that currently
available to municipalities whose general obligation bonds are underwritten by local banks.
Another area of substantial expected public
benefit is the encouragement of the free flow of
investment capital. Both we at the Board and the
Congress have stressed the importance of improving the capital ratios of banking organizations, and it can reasonably be assumed that
expansion of banking organizations into securities markets should make them more attractive
investments. Equally important, banks and securities firms would be free to deploy their capital
over a wider range of activities designed to serve
the public better.
Effect of Computer
Technology
and
Communication
There is another important reason why the Glass
93
Steagall Act should be changed. Developments
in computer and communications technology
have reduced the economic role of commercial
banks and enhanced the function of investment
banking. These permanent and fundamental
changes in the environment for conducting financial business cannot be halted by statutory prohibitions, and the longer the law refuses to recognize
that fundamental and permanent changes have
occurred, the less relevant it will be as a force for
stability and competitive fairness in our financial
markets. Attempts to hold the present structure in
place will be defeated through the inevitable loopholes that innovation forced by competitive necessity will develop, although there will be heavy
costs in terms of competitive fairness and respect
for law that are so critical to a safe and sound
financial system.
The significance of these technological developments is that the key role of banks as financial
intermediaries has been undermined. The heart
of financial intermediation is the ability to obtain
and use information. The high cost of gathering
and using facts in the past meant that banks and
other intermediaries could profit from their cumulative store of knowledge about borrowers by
making significantly more informed credit decisions than most other market participants. These
other market participants were thus obliged to
permit depository intermediaries to make credit
decisions in financial markets and therefore allow
bank credit to substitute for what would otherwise be their own direct acquisition of credit
market instruments.
Computer and telecommunications technology
has altered this process dramatically. The real
cost of recording, transmitting, and processing
information has fallen sharply in recent years,
lowering the cost of information processing and
communication for banks. But it has also made it
possible for borrowers and lenders to deal with
each other more directly in an informed way.
On-line data bases, coupled with powerful computers and wide-ranging telecommunication facilities, can now provide potential investors with
virtually the same timely credit and market information that was once available only to the intermediaries.
These developments mean that investors are
increasingly able to make their own evaluations
94
Federal Reserve Bulletin • February 1988
of credit risk, to deal directly with borrowers,
and, especially with the increasing institutionalization of individuals' savings, that creditors are
in a position to develop their own portfolios and
strategies to balance and hedge risk. Thus, the
franchise of bank intermediation, the core element of a bank's comparative advantage, and its
main contribution to the economic process—
credit evaluation and the diversification of risk—
have been made less valuable by this information
revolution. Examples of new financial products
that have resulted from this technological innovation and that challenge traditional bank loans
abound—the explosion in the use of commercial
paper, the rapid growth of mortgage-backed securities, and the recent development of consumer loan-backed securities or consumerreceivable-related securities. There are many
others. Our concern is that these changes in the
way that providers of credit utilize financial
intermediaries have reduced the basic competitiveness of banks and that the trend toward direct
investor-borrower linkages will continue.
Banks' Response to New
Conditions at Home and
Competitive
Overseas
Banks, of course, have not stood still while these
vast changes were taking place around them.
Indeed, they have responded to the technological
revolution by participating in it. Loan guarantees
and other off-balance-sheet arrangements, private placement of corporate debt, commercial
paper placement, loan participations and sales,
and interest rate and currency swaps are examples. Similarly, the foreign offices of U.S. banks
and their foreign subsidiaries and affiliates have
been actively engaging abroad in a wide variety
of securities activities. These include securities,
such as corporate debt and equity, that are
ineligible in the United States for banks to underwrite and deal, such as corporate debt and
equity. In the corporate debt market, for example, U.S. banks' foreign subsidiaries served lead
roles in underwritings approaching $17 billion in
1986, or about 10 percent of the volume of such
debt managed by the 50 firms most active in the
Eurosecurities market last year. These and other
essentially investment banking activities have
permitted banks to continue to service those
customers seeking to rely increasingly on securities markets—provided that the securities are
issued abroad. In their home market, banks
continue to be sharply limited by the Glass-Steagall Act in competing for the business of acting as
intermediaries in the process of investors providing credit to corporations, just at the time that the
new financial environment transformed by technological change has made such intermediation a
natural extension of the banking business.
The Need for
Reform
In short, the Congress should modify the financial structure to conform to these changes. If the
Congress does not act, but rather maintains the
existing barriers of the Glass-Steagall Act, banking organizations will continue to seek ways to
service customers who have increasingly direct
access to capital markets. But banking organizations are nearing the limits of their ability to act
within existing law; and spending real resources
to interpret outmoded law creatively is hardly
wise. Without the repeal of Glass-Steagall,
banks' share of credit markets is likely to decline—as it already has in our measures of shortand intermediate-term business credit. Society
would lose the existing expertise and infrastructure of banking and would bear the cost of the
redeployment of bank resources as personnel
and capital move to nonbanking organizations.
Instead, a soundly structured change in the law
will allow financial markets to serve us better by
lowering costs to users while strengthening financial institutions within a framework that will
protect the financial integrity of banks.
EVALUATION
EFFECTS
OF POSSIBLE
ADVERSE
The basic principles that I outlined at the outset
require us to take into account not only public
benefits but also possible adverse effects including unsound banking practices, which clearly
include the concept of excessive risk, conflicts of
interest, impairment of competition, and undue
concentration of resources. These concerns have
been heightened by the unprecedented decline in
Statements to Congress
the stock market that occurred on October 19,
1987, and the subsequent market volatility.
Effect of Stock Market
Developments
We had reached our decision to endorse repeal of
the Glass-Steagall Act before these events occurred. When we made our decision we had very
much in mind that there are risks involved in
underwriting and dealing in securities, and we
decided that we would recommend the necessary
changes only because we believe that a framework can be put in place that can assure that the
potential risks from securities activities can be
effectively managed. The events since October
19 have not altered our view that it is both
necessary to proceed to modernize our financial
system and that it is possible to do so in a way
that will maintain the safety and soundness of
depository institutions.
The preliminary evidence on the limited effects
of recent stock market events on securities firms
reinforces several conclusions drawn previously.
First, while securities activities are clearly risky,
the risks can be managed prudently. Second,
securities activities of bank holding companies
should be monitored and supervised in such a
way as to control the risk to an affiliated bank.
Third, the events of recent weeks highlight the
need to have capital adequate to absorb unexpected shocks and to maintain an institutional
and legal structure that minimizes the degree to
which securities underwriting and dealing risk
could be passed to affiliated banks.
Assessment
of Risk
Bank holding company examinations indicate
that U.S. banking organizations have generally
shown an ability to manage the inherent risks of
both their domestic and foreign securities activities in a prudent and responsible manner. Of all
the domestic bank failures in the 1980s, to our
knowledge none has been attributed to underwriting losses. Indeed, we are unaware of any
significant losses in recent years owing to underwriting of domestically eligible securities. For
that matter, research over the past 50 years
concludes, contrary to the view of the Congress
at the time, that bank securities activities were
95
not a cause of the Great Depression and that
banks with securities affiliates did not fail in
proportionately greater numbers than banks
more generally.
The investment banking experience of U.S.
banking organizations in foreign markets has
been favorable, and their operations have been
generally profitable in the last decade or so. This
is not to say that there have been no problems. In
the mid-1970s some large U.S. banks encountered problems with their London merchant bank
subsidiaries in connection with venture capital
investments and the development of the Eurobond market. More recently, in the post-Big
Bang era, U.S. banks' securities affiliates and
subsidiaries have shared in the transitional difficulties that arose in the London securities market. All of these problems appear to have been in
the nature of "start-up" difficulties rather than
long-term safety and soundness concerns. In
these situations, and even in the perspective of
the unprecedented stock market decline, risks
have been contained, and losses have been small
relative to the capital of the bank or the holding
company parent.
Finally, I would note that empirical studies
invariably find that underwriting and dealing are
riskier than the total portfolio of other banking
functions in the sense that the variability of
returns to securities activities exceeds that of the
returns to the combination of other banking
functions. It is also important to note, however,
that the average return to securities activities is
also usually found to exceed the average return
to the combination of other banking functions. In
addition, there is evidence of some potential for
limited diversification gains, or overall risk reduction, for banks being allowed increased securities powers.
The Congress adopted the Glass-Steagall Act
more than 50 years earlier because it believed
that banks had suffered serious losses as a result
of their participation in investment banking. The
Congress also thought that bank involvement in
the promotional aspects of the investment banking business would produce a variety of "subtle
hazards" to the banking system such as conflicts
of interest and loss of public confidence. In
answer to these concerns, we believe that the
risks of investment banking to depository insti-
96
Federal Reserve Bulletin • February 1988
tutions are containable, that the regulatory
framework established in the securities laws minimizes the impact of conflicts of interest, that the
federal safety net implemented through deposit
insurance and access to Federal Reserve credit
will avoid the potential for panic withdrawals
from banks if affiliated securities firms experience losses, and that banks can be effectively
insulated from their securities affiliates through
an appropriate structural framework.
As I have stressed, such an insulating framework can be established. I would now like to turn
to what we see as its major elements.
NEED FOR FIRE
WALLS
Fundamental to our recommendation on repeal
of Glass-Steagall, and to our assessment that
potential adverse effects of securities activities
are clearly manageable, is the view that securities activities can be conducted behind walls
designed to separate, insofar as possible, the
bank from the risks associated with the securities
activities. We see two major elements to an
approach toward developing a practical insulating structure:
1. The holding company structure should be
used to institutionalize separation between a
bank and a securities affiliate.
2. The resulting institutional fire walls should
be strengthened by limiting transactions, particularly credit transactions, between the bank and
a securities affiliate.
At the same time, and without impairing the
necessary separation, the structure should not be
so rigid as to prevent affiliated organizations from
providing the users of financial products with the
improved service and reductions in cost that can
come from the joint ownership of securities and
banking organizations. We believe that it is both
possible and desirable to accomplish both
goals—establishing fully adequate fire walls in a
context that achieves the economic benefits of
joint ownership.
It is here that we believe the Financial Modernization Act makes such a major contribution.
Using the holding company framework as a focus, it establishes a system of fire walls that we
believe is both workable and effective. Because
of the importance of these provisions, I would
like to examine them with you in some detail.
Importance
Framework
of the Holding
Company
S. 1886 would require that new securities activities made possible under this bill would have to
take place in a subsidiary of a bank holding
company and not in a bank or a direct subsidiary
of a bank. We believe that this is a sound
decision because it provides the best separation
that institutional arrangements can provide between a bank and a securities affiliate. In our
judgment, this is the most effective structure for
assuring that decisionmaking in securities firms is
not affected by the benefits of the federal safety
net, for minimizing the need for the regulatory
framework that is a necessary consequence of
maintaining the safety net, and, of course, for
avoiding risks to the safety net itself. Achieving
these goals is essential to any plans for permitting
broader ownership of banks and wider powers
for bank holding companies.
There has not been unanimous agreement on
this point, and I think it is important to examine
the advantages of the holding company approach.
First, there is an important legal reason. The
holding company mechanism takes maximum
advantage of the doctrine of corporate separateness—the legal rule that provides that a separately incorporated company normally is not held
liable for the actions of other companies even if
they are commonly owned or there is a parentsubsidiary relationship. However, because of the
direct ownership link between a bank and its
subsidiary, any breach of insulating walls is
much more likely to result in bank liability for the
actions of its security subsidiary because the line
of authority to direct operations runs from the
bank parent to that subsidiary. The same breach
in the wall between a bank holding company and
a securities affiliate, on the other hand, is much
less likely to involve the affiliated bank simply
because of the fact that there is no direct ownership link between the bank and the securities
affiliate.
Second, there is a vital point of accounting and
the resulting market perceptions of the health of
Statements to Congress
the bank. Any losses that may be incurred by the
securities firm owned directly by a bank would
be reflected in the balance sheets and income
statements of the bank under normal accounting
rules. That would not be the case if the holding
company owns the securities afliliate directly.
When a securities firm's losses are reflected
directly on the financial statements of the bank,
the market's evaluation of the health of the bank
will inevitably be adversely affected.
Third, it is difficult, if not impossible from a
practical standpoint, for a bank to avoid assuming responsibility and liability for the obligations
of its direct subsidiaries. Experience has shown
that the direct ownership link between a bank
and its subsidiaries creates a powerful public
perception that the condition of the bank is tied
to the condition and financial success of its
subsidiaries.
Fourth, separation of a bank and an affiliated
securities firm through a holding company helps
promote competitive equity. Securities activities
that are conducted directly within a depository
institution or in a subsidiary of a depository
institution are much more likely to benefit from
association with the federal safety net through
increased public confidence in securities offerings made by the insured banks and their subsidiaries than would be the case if these activities
were conducted in a holding company affiliate.
Similarly, the holding company technique would
be more effective in minimizing any competitive
advantage that banks would have in raising funds
because of their association with the federal
safety net and their ability to collect deposits.
Thus, we believe that the advantages of the
holding company structure are both self-evident
and overwhelming. Larger banking companies
that are most likely to be heavily involved in
securities activities should have no serious organizational problems with implementing this approach.
For the smaller banking firms that do not have
holding companies, the bill has two constructive
solutions. First, to ease the regulatory and cost
barriers to the establishment of holding companies, section 201 provides for expedited, almost
automatic, Board approval of applications to
form such holding companies, and section 202
allows such formations that are simply reorgani
97
zations without a change in ownership to be
exempt from securities act registration. Second,
the bill allows banks to continue to conduct
presently authorized securities activities and also
permits them to engage in underwriting municipal revenue bonds and brokerage of mutual
funds. We understand the Securities and Exchange Commission's (SEC's) concerns about
assuring that functional regulation prevails in this
area, and we believe that, consistent with appropriate exceptions for small banks, these problems are resolvable.
STRENGTHENING
FIRE WALLS
HOLDING
COMPANY
The second major element of the separateness
structure is to assure that the holding company
fire walls are not impaired by transactions between a bank and an affiliated securities firm,
with the consequence of the risks of securities
activities being passed on to an affiliated bank.
We believe that section 102 of S. 1886 is fully
adequate to do this essential strengthening job. It
clearly addresses the following key issues: (1)
interaffiliate credit transactions and guarantees;
(2) lending to support underwritten securities; (3)
officer and director interlocks; and (4) adequacy
of disclosure and other conflict of interest problems.
Prohibition on Lending
Securities
Affiliate
by a Bank to a
In reviewing these fire-wall-strengthening measures, we consider one of the most important and
difficult to be the prohibition on a bank being able
to lend to, or purchase assets from, its securities
affiliate. There are strong arguments on both
sides. In formulating our position on this issue,
we took into account the major advantages of a
straightforward prohibition on lending to securities affiliates, thus insulating the bank from the
risks of securities activities, and weighed against
it the benefits that could be achieved in terms of
better service to customers.
We also considered that rules now exist limiting the amount of credit that a bank can provide
to an affiliate and requiring that this lending be at
98
Federal Reserve Bulletin • February 1988
arms-length and adequately collateralized. Our
experience indicates, however, that these limitations, embodied in sections 23A and 23B of the
Federal Reserve Act, do not work as effectively
as we would like and, because of their complexity, are subject to avoidance by creative interpretation, particularly in times of stress.
On the other hand, we came to the conclusion
that a prohibition on an affiliated bank's loans to,
and purchases of assets from, its securities affiliate would sharply limit the transfer of the risk of
securities activities to the federal safety net. It
would also eliminate one of the key factors
viewed by the courts as justifying "piercing the
corporate veil" between the bank and its nonbank affiliates—that operations of the securities
affiliate are financed and supported by the resources of an affiliated bank. For these reasons,
and because of the desirability of having a clear
rule that is not subject to avoidance, we agree
with the provisions of section 102 that prohibit
banks from lending to, or purchasing assets from,
their securities affiliates except for collateralized
lending for intraday government securities clearing.
We also agree, as allowed by S. 1886, that a
securities affiliate should be free to borrow from
its holding company parent. The holding company is not protected by the federal safety net,
and competitive fairness requires that the parent
of a securities affiliate should be able to support
its affiliate in the same manner as the corporate
parents of investment firms that are unaffiliated
with banks.
Other Transaction
Limitations
For very similar reasons we agree, as provided in
section 102, that a bank should not be able to
guarantee, extend its letter of credit to, or otherwise support securities issued by a securities
affiliate. Allowing such practices would not only
raise the question of competitive fairness, but
also would permit a transfer of the risks of
securities activities to the federal safety net. This
section would also prevent, during the underwriting period and for 30 days thereafter, loans from
a bank affiliate to customers for the purpose of
buying securities underwritten by a securities
affiliate. Finally, it would stop loans from affil
iated banks to companies whose securities have
been underwritten by a securities affiliate for the
purpose of repaying interest or principal due on
such securities. We agree that these prohibitions
are essential to establishing sound fire walls.
Preventing
Disclosure
Conflicts
of
Interest—
Another major purpose of fire walls is to prevent
conflicts of interest that can impair confidence in
banking institutions. The disclosure requirements and other provisions of the securities laws
already have made an effective contribution to
dealing with this issue. Nevertheless, we welcome the strengthening of these already built-in
protections by the provisions of section 102,
which require, under rules established by the
SEC, a securities affiliate to disclose its relationship to an affiliated bank and to state plainly that
the securities it sells are not deposits and are not
insured by a federal agency.
Officer and Director
Interlocks
The prohibition in section 102 on officers and
directors of a securities affiliate serving at the
same time as an officer or director of any affiliated bank is also important in maintaining the
principle of corporate separateness and to avoiding conflicts of interest. For this reason we are
somewhat concerned about the complete exemption in this section from this limitation for banks
with total assets of $500 million or less. To permit
the operating efficiencies that smaller banks may
achieve from using common management officials without severely eroding the corporate separateness of the bank, we recommend that these
banking organizations be permitted to have interlocking officials with a securities affiliate, but be
required to maintain a majority of the board of
directors of the securities affiliate that are not
also directors of the banking organization.
Other Conflict of Interest
Safeguards
In addition, S. 1886 reinforces the requirements
of existing law by providing that a securities
affiliate cannot sell securities from its portfolio to
an affiliated bank at any time or place securities
Statements to Congress
with its trust accounts during an underwriting
period, or for 30 days thereafter. S. 1886 also
helps to assure objectivity when a securities
affiliate underwrites securities originated by an
affiliated bank by a requirement that those securities must be rated by an unaffiliated, nationally
recognized rating agency. Finally, we note with
approval that under the bill neither banks nor
their securities affiliates would be able to share
confidential customer information without the
customer's consent and that a bank cannot express an opinion on securities being sold by its
securities affiliate without disclosing that its affiliate is selling that security.
Capital
Adequacy
We believe that the fire walls that are established
by S. 1886 will substantially augment the existing
insulation of banks from affiliates that is now
provided by the Bank Holding Company Act.
Besides these measures, perhaps the best insulator is adequate capital for both banks and securities affiliates.
Accordingly, authority should be provided to
assure that holding companies owning banks and
securities companies should be adequately capitalized. Consequently, we fully support the provisions of section 102, which require that investments by bank holding companies in securities
firms should not be permitted if the investment
would cause the holding company to fall below
minimum capital requirements.
Moreover, to assure that a securities affiliate of
a banking organization is regulated as to capital
adequacy in the same manner as other securities
firms, section 102, in calculating the capital adequacy of a bank holding company that acquires a
securities firm, excludes from the holding company's capital and assets any resources of the
holding company that are invested in the capital
of the securities affiliate. We agree that the
investment of a holding company in its securities
subsidiary may be deducted from the capital of
the bank holding company in determining its
capital adequacy. Such deductions should include any asset of the holding company that is
considered capital in the securities subsidiary by
its functional regulator.
99
However, in calculating the regulatory capital
for the holding company, S. 1886 would deduct
from the assets of the holding company all loans
to the securities subsidiary, and thus the holding
company would not be required to hold capital to
support these assets. We feel that any advances
by a holding company to a securities affiliate that
are not considered capital by the functional regulator should not be deducted from the holding
company's assets and capital. Rather, they
should be supported by capital at the holding
company, just as advances to other subsidiaries
require capital support.
To do otherwise would be to promote unlimited leveraging in the holding company, thereby
weakening or eliminating the ability of the holding company to act as a source of strength to its
subsidiary banks. With this modification, section
102 would not only assure that the securities
affiliate broker-dealer will be regulated as to
capital adequacy by the SEC, but would also
have the beneficial effect of requiring a bank
holding company to maintain capital sufficient to
absorb losses suffered by the securities affiliate
without impairing the holding company's ability
to serve as a source of strength to its bank
subsidiaries. This result is consistent with the
provisions of section 102, which provide that the
Board can reject a notice to establish a securities
affiliate if it would be inconsistent with a bank
holding company's obligation to serve as a
source of strength to its subsidiary banks.
Support for Functional
Regulation
At this point, I believe it would be appropriate to
stress the full support of the Board for the
concepts of functional regulation incorporated
into S. 1886. We agree that a securities subsidiary of a bank holding company carrying out the
functions of a broker-dealer should be subject to
the net capital requirements of the SEC and
should, indeed, be regulated by that body once it
has been established.
As I have stressed, however, we do believe
that there is a proper role for regulation of a
company that owns a bank. As provided under
current law, a company that owns a bank should
have competent management, should be adequately capitalized, and should be open to review
100
Federal Reserve Bulletin • February 1988
in as unobtrusive a manner as is possible consistent with achieving these goals.
This position is consistent with our support for
the provisions of section 102, which exempt a
securities firm that owns a bank from normal
holding company capital and examination requirements if at least 80 percent of its assets and
revenues are derived from, or devoted to, securities activities. Even in this situation, S. 1886
does not ignore the importance of capital. If an
exempt company's bank falls below minimum
capital levels, the Board can require restoration
of minimal capital levels within 30 days, and in
the absence of compliance can order the termination of control within 180 days. In the context
of the situation in which a firm is overwhelmingly
a securities firm, this framework has our full
support. This is a unique provision that may, if it
works successfully, provide a precedent for developing the complex of measures that are
needed to allow broader ownership of banks and
to protect the federal safety net.
We also support minimizing regulatory burdens whenever possible. Accordingly, we endorse the provisions of Title II generally on
"Expedited Procedures" and, particularly, section 203 of the bill that speeds up the procedure
for holding company applications for approved
holding company activities by changing it into a
no-objection arrangement and by eliminating the
cumbersome requirements for formal hearings.
We also endorse the provisions of the bill that
allow the Board to take into account technological or other innovations in the provision of
banking or banking-related services in making
judgments on whether an activity is so closely
related to banking as to be a proper incident
thereto. We believe that these provisions, which
have had the Board's support for several years,
will reduce regulatory burdens and introduce
needed flexibility into the regulatory process.
COORDINATED
ACTIVITIES
With the strong system of fire walls that are
contained in S. 1886 in place, we believe it is
appropriate to allow the joint banking-securities
enterprise the opportunity to realize the efficiencies that may be achieved by combining
services that are functionally so closely linked.
After all, one of the major purposes of allowing
the affiliations that could be established by repealing Glass-Steagall is to permit, in a competitively neutral manner, the users of securities
services to benefit from a higher level of competition. Thus, in our view, the approach taken in
the bill of permitting use of similar names and
coordinated marketing of products is appropriate. We believe that a prohibition on these activities would produce only small gains for bank
insulation, but the losses to efficiency would be
high.
The requirement of separate names would be
artificial, particularly because securities law disclosure would, in any event, require an affiliate to
inform the users of its services of its association
with a banking enterprise. Similarly, as I pointed
out earlier, the market for securities is only an
extension of the market for other banking products and to deny a banking organization the
ability to sell both products would lose much of
the gains for the economy that we seek to
achieve through the association between the two.
Moreover, there would be no competitive unfairness in this arrangement since the broad relaxation of the Glass-Steagall requirements that is
proposed by S. 1886 would enable securities
firms to own banks as well as bank holding
companies to own securities affiliates.
The important point is whether these measures
would cause the risks of securities activities to be
passed on to banking institutions and to the
federal safety net. As I indicated, the Board
believes that the corporate separateness measures that we recommend, and that have been
adopted in S. 1886, should effectively deal with
these problems.
CONCENTRATION
OF
RESOURCES
The guidelines the Congress has established for
expansion of banking activities require a concern
for whether expansion of securities powers will
lead to a concentration of resources in the securities or banking industries. We believe that
repeal of Glass-Steagall should have the opposite
effect. As I have stressed today, it will increase
the number of viable competitors in both the
Statements to Congress
banking and securities industries, enhancing
competition in both. As a result, we doubt that
the Congress need go beyond the requirements of
the antitrust laws to anticipate a problem with
concentration of resources in the emerging financial services industry. However, because we see
as one of the major advantages to repeal to be an
expected increase in competition, and because
we could understand anxieties that this goal
might be impaired by a combination of the largest
banking and securities firms, the Board does not
oppose the limited provisions of section 102 of
S. 1886 aimed at preventing the largest banking
and securities organizations from consolidating.
COMMENTS ON S. 1891—THE
SERVICES OVERSIGHT ACT
FINANCIAL
The Financial Modernization Act deals with the
problems of our financial system by focusing on
the specific question of securities powers, an
area that is of great importance to the financial
system. While it sets up a framework that could
be used as a precedent for the consideration of
other products and services, it does not deal with
those issues at this time, leaving this question
open for further consideration in the future. We
believe that this is the right way to proceed at this
time.
A different approach has been taken by
S. 1891, the proposed Financial Services Oversight Act introduced by Senators Wirth and
Graham, which establishes a comprehensive
framework for the conduct of the financial services business in the United States. As a first step
toward this objective, the bill establishes a Financial Services Oversight Commission, with a
membership drawn from the banking agencies,
the SEC, the Commodity Futures Trading Commission, and the state insurance commissioners.
This broadly based Commission would have
three essential functions:
1. It would define the types of activities in
which bank holding companies, financial holding
companies, and commercial holding companies
could engage.
2. It would be charged with enforcing compliance with the regulations defining new activities.
101
3. It would establish minimum standards of
capital adequacy for financial holding companies
and their affiliates.
Fundamental to this approach is a broad expansion of the financial activities in which bank
holding companies may engage, including an
explicit repeal of the Glass-Steagall Act. The bill
also provides for the extension of a limited
degree of prudential regulation to financial holding companies, which are companies that include
affiliates that offer uninsured transaction accounts, to include capital adequacy standards as
well as reserve requirements. Also fundamental
to this concept is the separation of banking and
commerce by providing that a commercial holding company cannot own a bank that offers
federally insured deposits.
The third major element of the bill is the
establishment of a National Electronic Payments
Corporation for the purpose of operating a mixed
public-private corporation that would establish
and operate a national electronic payment system to facilitate large dollar transactions, including book-entry transfers of U.S. government
securities. The corporation would also be responsible for the establishment of standards for
utilization of this system and for improvements
in the technological capability and reliability of
the system as a whole. This enterprise, capitalized with funds from the Federal Reserve System
and by the private shareholders, would provide
for direct access to the system not only by banks,
but also by other financial organizations that
have transactions in funds and government securities of a magnitude sufficient to make their
participation as shareholders in the new corporation appropriate.
The Board finds this proposal to be a careful
and very thoughtful approach to the difficult
problems that this committee is attempting to
grapple with today. As Senator Wirth pointed out
in introducing S. 1891, the bill incorporates a
proposal made by President Gerald Corrigan of
the Federal Reserve Bank of New York, and thus
the Board is fully familiar with both its structure
and objectives.
Desirability
of Coordinated
Regulation
One of the proposals in the bill that we find to be
102 Federal Reserve Bulletin • February 1988
particularly useful is the provision on establishing a Financial Services Oversight Commission
to bring together the various regulatory interests
that affect our highly integrated financial mechanism. The need for greater regulatory coordination could not have been brought out more
clearly than in the recent stock market developments in which we saw the complex interactions
of securities, commodities, and banking markets.
Similarly, I have emphasized in my testimony
today that securitized products are a natural
extension of the market for banking activities,
but at this point it is also important to stress that
securities firms have undertaken many of the
activities that have been traditionally thought of
as unique to banking. Again, we have examples
in the news, such as bridge lending, but there are
many others as well, including foreign exchange
transactions and the offering of transaction accounts.
These overlaps in functions suggest not only
that rigid lines between providers of securities
and banking services are impractical but also that
more coordination of regulatory activities is
highly desirable. For example, as we seek to
establish a worldwide, risk-based capital system
for banking organizations that will apply capital
standards to a considerable variety of now offbalance-sheet activities, our ability to do so, and
the stability of markets, will be adversely affected if almost identical activities of securities
firms are not subject to the same type of capital
adequacy requirements. Thus, a broadly representative financial regulatory body with adequate
authority to coordinate financial regulation needs
careful consideration as the Congress makes the
essential changes necessary to adapt the financial
system to the new realities of competition and
technology. We urge that further thought should
be given to how this approach could be integrated with S. 1886.
institution. This format may be too rigid, and the
bill does not give the commission specific enough
instructions as to the basis for its decisions, nor
do we believe that it is possible now for the
Congress to write the needed comprehensive
instructions. For example, no guidance is provided on the fire walls to separate banking and
nonbanking activities that the Board considers to
be essential to an adequate framework for expanded activities of companies that own banks.
Rather, it seems to us that there are major
advantages to proceeding on an incremental basis starting with securities powers in which the
rationale for change has been clearly established.
In this way, we can have the benefits of change
while gaining experience with the systems that
are necessary to assure that this change is carried
out in a responsible and effective manner. As
conditions evolve over time, a more flexible
structure will allow both the Congress and the
regulators the opportunity to be more responsive
to the needs of customers and less dependent on
rigid formulas that may not be practical.
Concerns
Finally, I would like to note that S. 1886 does not
apply to savings and loan institutions or to their
holding companies. However, it would seem
appropriate that the framework that is being
developed by this committee for the proper conduct of securities activities to protect the federal
safety net, to prevent conflicts of interest, and to
assure competitive equality within a structure of
about the Authority
of the FSOC
We are concerned, however, about taking the
Financial Services Oversight Commission concept further at this time by establishing separate
categories of bank, financial, and commercial
holding companies, together with authority in the
commission to fix the activities of each type of
National Electronic
Payments
Corporation
Finally, we have given considerable thought to
the concept of a National Electronic Payments
Corporation. There is much to be said for its
emphasis on spurring technological improvements, on arrangements for liquidity reserves to
protect the integrity of that system, and on
limiting intraday overdrafts. However, we are
not sure that the mechanism proposed in the bill
is the most efficient and cost-effective way of
achieving its worthwhile goals. The issues that it
raises warrant further study.
APPLICATION OF S. 1886
TO SAVINGS AND LOAN
INSTITUTIONS
Statements to Congress
103
functional regulation should be equally applicable to these institutions. We understand, however, the concerns about the effect of these
rules on the possible willingness of securities
firms to put capital into troubled savings and
loan institutions at a time when the industry
and its regulators are attempting to deal with
large losses in a considerable number of institutions.
Thus, the Congress has to reconcile conflicting
public policy objectives—the need to deal with
present losses in a constructive way, and at the
same time to protect the future health of depository institutions when engaging in a new activity. I have no easy answers to this dilemma,
except to suggest that it be kept under review so
that this committee can work, in close consultation with the Federal Home Loan Bank Board,
on such ideas as transition periods, exceptions
for capitalization of large troubled institutions, or
other solutions that the legislative process is
uniquely capable of working out.
We commend this committee for its active role
in considering one of the most important issues
that now faces our financial markets. We
strongly recommend that you adopt legislation to
repeal the Glass-Steagall Act and to put in its
place a new framework allowing the affiliation of
banking organizations and securities firms as
provided in the Financial Modernization Act
proposed by Chairman Proxmire and Senator
Garn.
We also urge you to allow the moratorium on
banking activities contained in Title II of the Competitive Equality Banking Act to expire on March
1, 1988, as the law now provides. We believe that
these measures will ensure a more responsive,
competitive, and safe financial system.
•
Statement by Alan Greenspan, Chairman, Board
of Governors of the Federal Reserve System,
before the Subcommittees on Domestic Monetary Policy and on International Finance, Trade
and Monetary Policy of the Committee on Banking, Finance and Urban Affairs, U.S. House of
Representatives, December 18, 1987.
". . .the United States is prepared to consider
utilizing, as an additional indicator in the economic coordination process, the relationship
among our currencies and a basket of commodities, including gold. . . . We are proposing consideration of a commodity price indicator as an
analytical tool and an improvement to our indicator process, to be used in conjunction with
other measures of our economic performance. . . . "
I believe Secretary Baker was right to suggest
the possibly useful role an index of commodity
prices could play in an international context. He
was also right to emphasize that it would be a
technical supplement to existing procedures.
International policy discussions quite naturally
center on the adjustment of external imbalances
and the stability of exchange rates. These are
matters that simply cannot be addressed unilaterally. One country's deficit is someone else's
surplus. If the U.S. current account deficit is to
decline, the combined surplus of the rest of the
world must decline correspondingly.
Similarly, an exchange rate is the relative price
of two currencies. The currency of one country
cannot depreciate without the currency of another appreciating.
I welcome the opportunity to appear here this
morning to discuss the role of commodity prices
in the international coordination of economic
policy. The fact that the Subcommittees on Domestic Monetary Policy and on International
Finance, Trade and Monetary Policy are meeting
jointly on this topic I take to be symptomatic of
the impossibility of distinguishing between the
domestic and the international aspects of economic policy in today's financial environment.
Much attention in the press and elsewhere,
following Secretary Baker's speech at the annual
meeting of the World Bank and the International
Monetary Fund on September 30, has been focused on the possibility of adoption by the
United States of a commodity standard, perhaps
even a gold standard, to control its monetary
economic policy. But that is a misreading of
Secretary Baker's remarks. He said only that
104 Federal Reserve Bulletin • February 1988
We must not lose sight of the fact, however,
that—as important as these variables are—they
are not in themselves the ultimate objectives of
policy. Nor would the achievement of stable
exchange rates and balanced external positions
ensure a healthy world economy. It is conceivable, for example, that in the extreme, all nations
could be undergoing simultaneous domestic recession, even as external equilibrium prevails.
More germane to our discussion this morning is
the possibility that exchange rates could be stable in a world of rampant global inflation. To use
the jargon of the economics profession, relative
prices—including exchange rates—can be stable,
but the general price level can move up or down
unless it is anchored to something.
We need to make certain, as we seek stability
for the world economy, that we do not put in
place policies and procedures that foster a flight
from currencies generally. Prices of internationally traded commodities can provide useful information in identifying such a phenomenon. When
there is a flight from currency, the flight is toward
goods or commodities. This is not to say that
various measures of domestic wage and price
inflation in individual countries and other indicators of actual or potential pressures on resources
are not important also in analyzing global inflation. Indeed, such domestic measures of inflation
are already included among the indicators utilized in international reviews of the consistency
and compatability of economic policies.
It is important to note that rising commodity
prices expressed in dollars are not necessarily a
sign of global inflation. Commodity prices must
be rising in terms of all currencies if they are to
be taken as evidence of a problem of potential
global inflation. If the prices of a basket of
commodities are rising on average in terms of
one currency but falling in terms of other currencies, we can infer essentially only that there has
been a change in exchange rates. For example,
the Economist index of commodity prices, expressed in U.S. dollars, averaged 2.9 percent
higher in November this year than in October.
Over the same period, that index, expressed in
special drawing rights (SDRs), averaged 1.3 percent lower in November than in October. The
difference reflects the decline in the dollar over
that period of about 6 percent on average in
terms of the other currencies included in the SDR
basket. In this situation, it would not be appropriate to interpret the rise in dollar prices of
commodities as indicating a generalized flight
from all currencies.
We must also be wary of special factors that
may affect the prices of individual commodities
so strongly as to move overall commodity price
averages significantly in the short run. Especially
when the causes are of a transitory character—
for example, a temporary supply disruption—the
proper macroeconomic policy responses may
well be different from those appropriate to major
cyclical booms in commodity markets. For this
reason the coverage of any index used in the
international context should be broad.
Moreover, while a general rise or fall in the
prices of commodities, which are traded internationally, could indicate global inflation or deflation and in general may provide an earlier warning of potential inflation danger than measures
such as consumer or even wholesale prices, it
would have little to say about what policymakers
in any individual country should do. A much
broader range of information, relating not just
to the world economy but to the economic performance and prospects of each individual country, is necessary to disentangle the forces at
work and to determine appropriate courses of
action.
Let me discuss briefly the role of one particular
commodity, gold. The appeal of a more formal
role for gold in the monetary system, as I suggested in a statement to the Commission on the
Role of Gold in the Domestic and International
Monetary Systems in November 1981, is that it
would impose discipline not just on monetary
policy but on federal budget policy, as well.
Unlimited dollar conversion into gold would limit
the government's ability to issue dollar claims. If
you cannot finance deficits, you cannot create
them or sustain them. However, there are too
many practical problems associated with restoration of a gold standard, not the least of which is
the huge block of outstanding dollar claims in
world financial markets today, to make this a
useful avenue of development. I believe that the
conclusion of the Gold Commission remains
valid today, namely that ". . .under present circumstances, restoring a gold standard does not
Statements to Congress
appear to be a fruitful method for dealing with the
continuing problem of inflation."1
That judgment, however, is quite consistent
with the view that the price of gold should be
included along with prices of other commodities
as one indicator of global inflation or disinflation.
Gold is relevant and useful in that regard wholly
because of the historic and widespread perception of gold as an indicator of a flight from
currency. However, we must be careful not to
interpret every change in the price of gold as
meaning that. Like prices of other commodities,
we must consider whether it is changing in terms
of just some currencies or of all currencies.
Again, most if not all of the rise in the dollar price
of gold over the past couple of years simply
reflects the dollar's decline. As in the case of
other commodities, special demand or supply
factors need to be considered in connection with
the price of gold. Nevertheless, the fact remains
that a significant flight from currencies in general
without an increase in the price of gold in terms
of those currencies is unlikely.
CONCLUSION
The mandate for economic policy in the United
States and elsewhere should be to maintain the
maximum growth in real income and output that
is feasible over the long run. A necessary condition for accomplishing that important objective is
a stable price level, the responsibility for which
has traditionally been assigned in large part to the
central bank, in our case to the Federal Reserve.
In attempting to achieve our objectives, the
Federal Reserve must take into account and
respond to all factors that significantly affect the
1. See U.S. Department of the Treasury, Report to the
Congress of the Commission on the Role of Gold in the
Domestic and International Monetary Systems, vol. I (Treasury, March 1982), p. 17.
105
U.S. economy. Included in that category are
commodity prices. In affirming this, we should
distinguish between what we must evaluate, in a
technical sense, and what we do. In particular,
we should avoid any automatic policy response
to movements in commodity prices.
This view of the manner in which the Federal
Reserve should conduct policy is fully consistent, I believe, with our obligations under the
Full Employment and Balanced Growth Act of
1978. To respond to a question posed by Chairman Neal in his letter to me, I also believe that
the Federal Reserve should not be required to
report a projected range for the movement of an
index of commodity prices. Our reports to the
Congress currently include discussion of a broad
range of economic variables, and commodity
prices typically have been among them. Beyond
that, it would not make sense for us to cite a
range for some commodity price index besides
the ranges we report for the growth of money and
credit aggregates. The growth of money and
credit is much more directly influenced by our
actions than are commodity prices.
Moreover, information on market expectations
of commodity prices is already available in the
form of futures prices, and it would be neither
meaningful nor constructive for the Federal Reserve to add another view. Indeed, it is conceivable that such an action, if it were seen as having
policy content, might well perturb established
behavioral relationships in such a way as to
obscure or distort the information value of commodity prices.
Instead, it makes more sense for us to focus on
helping to achieve the long-run growth of the
economy and its precondition, stable prices.
Moreover, we should work with central banks
and finance ministries in other countries to enhance prospects for the sustainable growth of
the world economy. Those are difficult tasks, and
we would be foolish to ignore information, such
as is contained in commodity prices, that could
help us.
•
106
Announcements
NEW MEMBERS
NAMED
TO CONSUMER ADVISORY
COUNCIL
The Federal Reserve Board on December 14,
1987, named 11 new members to its Consumer
Advisory Council to replace those members
whose terms are expiring and designated a new
Chairman and Vice Chairman of the Council for
1988.
The Consumer Advisory Council was established by the Board in 1976, at the direction of
the Congress, to represent the interests of the
financial industry and consumers. The Council
advises and consults with the Board in the exercise of the Board's functions under the Consumer Credit Protection Act and on other consumer-related matters of interest to the Board.
The Council consists of 30 members whose
three-year terms are staggered.
Mr. Steven W. Hamm was designated as
Chairman to succeed Mr. Edward N. Lange, a
partner with the law firm of Davis, Wright, Todd,
Reise and Jones in Seattle, Washington. Mr.
Hamm is Administrator for the South Carolina
Department of Consumer Affairs. His term on
the Council runs through December 1988.
Mr. Edward J. Williams, Senior Vice President-Consumer Banking Group for Harris Trust
and Savings Bank in Chicago, Illinois, was
named Vice Chairman to succeed Mr. Hamm.
He will serve on the Council through December
1988.
The 11 new members, named for three-year
terms beginning January 1, are the following:
Naomi G. Albanese, Greensboro, North Carolina,
retired after 24 years as a professor of home economics at the University of North Carolina, Greensboro.
She has been active in a number of professional
societies and in community activities on the Board of
the Greater Greensboro Housing Foundation. In
1981-82, Dr. Albanese served as chairman of the
board of directors of the Federal Reserve Bank of
Richmond, Charlotte Branch. In 1974-75, she served
on the committee for consumer affairs of the President's Federal Energy Commission. Dr. Albanese is
currently on the boards of directors of Armstrong
World Industries, Inc., Duke Power Company, and
Jefferson-Pilot Corporation.
Stephen Brobeck, Washington, D.C., has been Executive Director of the Consumer Federation of America since 1980, after having previously served as a
board member and vice president. CFA is the nation's
largest consumer advocacy organization, representing
220 groups with more than 30 million members. He
was formerly president of Cleveland Consumer Action
and Cleveland Consumer Action Foundation, and
taught American Studies at Case Western Reserve
University. Mr. Brobeck frequently testifies before
congressional committees, and has co-authored two
books, The Bank Book and The Product Safety Book.
He serves on the boards of directors of the Institute for
Civil Justice, National Center for Financial Services,
Joint Council on Economic Education, Citizens for
Tax Justice, National Committee for Responsive Philanthropy, National Coalition for Consumer Education, Public Voice for Food and Health Policy, and the
Tele-Consumer Hotline.
Betty Tom Chu, Monterey, California, is Chairman
of the Board and CEO of Trust Savings Bank, a $150million-plus institution. She previously served as Deputy Counsel to the Los Angeles School District and
Deputy Corporations Commissioner for the State of
California. Ms. Chu was the founder, chairman, president, and managing officer of the nation's first Chinese-controlled, federal savings and loan. She is currently a member of the Federal Savings and Loan
Advisory Council. She is also a director of the California Savings and Loan League and former chairman
of the American League of Financial Institutions,
which represents minority savings and loan institutions in the nation.
Jerry D. Craft, Atlanta Georgia, is Senior Vice
President of First National Bank of Atlanta and has
been in banking since 1969. He joined First Atlanta in
1982 and currently has responsibility for First Retail
Electronic Services and Bankcard Division for the
American Bankers Association and is on the Board of
the Consumer Bankers Association. Mr. Craft has
been on the faculty of the Stonier Graduate School of
107
Banking and is involved in a variety of community
activities.
Donald C. Day, Boston, Massachusetts, is President
of N e w England Securities Corp., and has been with
New England Mutual Life Insurance Company since
1972. He was named Senior Vice President in 1981. He
is also Executive Vice President of New England
Mutual Funds. Mr. Day is a former vice chairman of
the District Business Conduct Committee of the National Association of Securities Dealers.
Robert A. Hess, Washington, D.C., has been President and General Manager since 1970 of the Wright
Patman Congressional Federal Credit Union, an $80
million credit union in Washington, D.C., serving the
Members of Congress and employees of the House of
Representatives. Mr. Hess is currently Chairman of
the National Association of Federal Credit Unions,
after having previously served as Treasurer, and has
been a Director-at-Large since 1980. He is a former
member of the board of directors of the International
Credit Union Association. His volunteer activities
have included more than 10 years on the boards of the
National Capitol Central Federal Credit Union and the
Metropolitan Area Credit Union Management Association. Mr. Hess served six years on the Washington
Area Credit Union Promotion Committee, which is
affiliated with the District of Columbia Credit Union
League, and currently serves on the League's Education Committee.
A.J. (Jack) King, Kalispell, Montana, is the Chairman and Executive Vice President of the Valley Bank
of Kalispell, a $58 million bank serving 10,000 residents in Northwestern Montana. He serves as Chairman and President of First Security Bank, also in
Kalispell. Mr. King was instrumental in a recent
community development project that brought both
jobs and revenues to the town and that resulted in a
new $18 million shopping center and motel complex
adjacent to the city center. He is currently involved in
a second community development project. Mr. King is
on the Executive Committee of the Independent Bankers Association of America and is a past president and
first chairman of the Association. He is also a past
president of the Montana Independent Bankers Association. Mr. King was appointed by the Governor of
Montana to two terms on the State Banking Board, a
board created by the state legislature to assist the
Bank Commissioner in the approval of state charters
for commercial banks. For three years, he served on
the Advisory Council for the School of Business at the
University of Montana.
William E. Odom, Dearborn, Michigan, is Chairman
of the Board of Ford Motor Credit Company. He
joined Ford Credit in 1966 as the Detroit district
manager and held progressively more senior management positions before becoming President in April
1986. In October 1987, he was elected Chairman of the
Board. Mr. Odom is interested in expanding the range
of financial services that Ford Credit offers to consumers. He is currently involved in developing a special
finance plan to extend credit to first-time auto buyers
and economically disadvantaged groups. He also plays
a principal role in special programs with the more than
125 black-owned Lincoln-Mercury dealerships. Mr.
Odom reviews all complaints received at the executive
office and has instituted a program to measure consumer satisfaction with credit services offered by the
company's 138-branch U.S. network. He is currently a
member of the Board of Trustees of the Joint Council
on Economic Education, a national organization that
sponsors economic education programs (kindergarten
through grade 12) throughout the nation.
Sandra Phillips, Pittsburgh, Pennsylvania, is Executive Director of the Oakland Planning and Development Corporation, a nonprofit community planning
and real estate development organization. OPDC grew
out of People's Oakland, which Ms. Phillips headed as
director, a community advocacy group that set longrange recommendations for development, together
with procedures for carrying them out. In the past
several years, OPDC has purchased and renovated a
former school to house very low-income elderly and
handicapped residents and an apartment building to
house chronic mentally ill residents. It has built 102
units of new housing for low- and moderate-income
homeowners, with another 64 units under construction. OPDC is a co-general partner in a joint venture
that is building a 430-car garage, a hotel, and an office
building, all in the Oakland community. Through the
OPDC, Ms. Phillips also has helped to build a strong
network of cooperation between the University of
Pittsburgh, several hospitals, and the Oakland community.
Ralph E. Spurgin, Columbus, Ohio, is President and
CEO of the Limited Credit Services, Inc., and has
responsibility for the credit operations of six subsidiaries including The Limited, Leraers, and Lane Bryant. He was previously with J.C. Penney Company,
Inc. for 20 years, where he last held the position of
General Credit Manager, Planning and Development.
Mr. Spurgin is currently a Director of the Credit
Management Division of the National Retail Merchants Association, after having served in various
capacities including Chairman of the Credit Bureau
Task Force.
Lawrence Winthrop, Portland, Oregon, is President
of the Consumer Credit Counseling Service of Oregon,
Inc. He is currently a trustee of the National Foundation for Consumer Credit and Executive Director of
108
Federal Reserve Bulletin • February 1988
the Associated Western Consumer Credit Counseling
Services. For 15 years Mr. Winthrop was with the J.C.
Penney Company as Regional Credit Manager for the
Pacific Northwest.
The other members of the Council are the
following (the date each term expires appears in
parentheses):
Edwin B. Brooks, Jr.
President
Security Federal Savings & Loan Association
(December 31, 1988)
Judith N. Brown
National Treasurer
American Association of Retired Persons
Edina, Minnesota
(December 31, 1989)
Elena Hanggi
President
Association of Community
Organizations for Reform N o w
Little Rock, Arkansas
(December 31, 1989)
Robert J. Hobbs
Senior Attorney
National Consumer Law Center
Boston, Massachusetts
(December 31, 1988)
Ramon E. Johnson
Professor of Finance
University of Utah
Salt Lake City, Utah
(December 31, 1989)
Michael S. Cassidy
Senior Vice President
Chase Manhattan Bank, N . A .
N e w York, New York
(December 31, 1988)
Robert W. Johnson, Ph.D.
Professor of Management
Director, Credit Research Center
Purdue University
West Lafayette, Indiana
(December 31, 1988)
Richard B. Doby
Bank Commissioner
State of Colorado
Denver, Colorado
(December 31, 1989)
John M. Kolesar
President
Ameritrust Development Bank
Cleveland, Ohio
(December 31, 1988)
Richard H. Fink
President
Citizens for a Sound Economy
Washington, D.C.
(December 31, 1989)
Alan B. Lerner
Senior Executive Vice President
Associates Corporation of North America
Dallas, Texas
(December 31, 1988)
Neil J. Fogarty
Attorney
Hudson County Legal Services
Jersey City, New Jersey
(December 31, 1988)
Richard L.D. Morse
Professor of Family Economics
Kansas State University
Manhattan, Kansas
(December 31, 1989)
Stephen Gardner
Assistant Attorney General
Consumer Protection Division
State of Texas
Dallas, Texas
(December 31, 1988)
Sandra R. Parker
Chairman, Banking Committee
Richmond United Neighborhoods
Richmond, Virginia
(December 31, 1988)
Kenneth A. Hall
President (South Division)
First United Bank
Picayune, Mississippi
(December 31, 1988)
Jane Shull
Director
Institute for the Study of Civic Values
Philadelphia, Pennsylvania
(December 31, 1988)
Announcements
APPOINTMENT OF CHAIRMAN OF
PRICING POLICY COMMITTEE
The Federal Reserve Board announced on December 23, 1987, the appointment of Silas
Keehn, President of the Federal Reserve Bank of
Chicago, as the Chairman of the Pricing Policy
Committee of the Federal Reserve System, effective January 1, 1988. Mr. Keehn has been a
member of the committee since January 1, 1987.
Mr. Keehn succeeds Edward G. Boehne, President of the Federal Reserve Bank of Philadelphia. Mr. Boehne had been Chairman of the
Pricing Policy Committee since July 1, 1984.
The committee has also appointed Gary H.
Stern, President of the Federal Reserve Bank of
Minneapolis, as a member of the committee to fill
the vacancy created by Mr. Boehne's departure
from the committee.
The committee is also composed of the following:
Governor Wayne D. Angell, Chairman of the
Federal Reserve Bank Activities Committee,
Federal Reserve Board; Henry R. Czerwinski,
First Vice President, Federal Reserve Bank of
Kansas City; William H. Wallace, First Vice
President, Federal Reserve Bank of Dallas; and,
Theodore E. Allison, Staff Director for Federal
Reserve Bank Activities, Federal Reserve
Board.
Jack Guynn, First Vice President, Federal
Reserve Bank of Atlanta, remains Executive
Director (but not a member) of the committee
through December 31, 1988.
The committee reviews policies and procedures related to the provision of Reserve Bank
priced services to depository financial institutions under the Monetary Control Act of 1980.
INCREASE IN RESERVABLE
TRANSACTION
ACCOUNTS AND LIABILITIES
The Federal Reserve on December 3, 1987, announced an increase in the net transaction accounts to which the 3 percent reserve requirement will apply in 1988 from $36.7 million to
$40.5 million.
The Board also increased the amount of a
depository institution's reservable liabilities that
109
are subject to a zero percentage reserve requirement from $2.9 million to $3.2 million of total
reservable liabilities.
Additionally, the Board increased the reporting cutoff level distinguishing weekly reporters
from quarterly reporters from $28.6 million to
$30.0 million of total deposits and other reservable liabilities.
These adjustments took effect beginning December 15, 1987.
The Board made the changes in accordance
with provisions of the Monetary Control Act.
The act requires the Board to amend its Regulation D (Reserve Requirements of Depository
Institutions) annually to increase the amount of
transaction accounts subject to a 3 percent reserve requirement. The annual adjustment must
be 80 percent of the annual percentage change in
the transaction accounts held by all depository
institutions. The growth in total net transaction
accounts of all depository institutions from June
30, 1986, to June 30, 1987, was 13.0 percent. The
statutory amount thus requires an increase of
$3.8 million over last year's amount to $40.5
million.
The Board is also required by the Garn-St
Germain Depository Institutions Act of 1982 to
amend Regulation D to adjust the amount of a
depository institution's total reservable liabilities
that are exempt from reserve requirements for
the upcoming year by 80 percent of any annual
percentage increase in total reservable liabilities
for all depository institutions. Growth in total
reservable liabilities was 12.6 percent from June
30, 1986, to June 30, 1987, requiring an increase
in the reserve requirement exemption to $3.2
million.
The Board is also increasing the reporting
cutoff level distinguishing weekly reporters from
quarterly reporters from $28.6 million to $30.0
million of total deposits and other reservable
liabilities. The cutoff level is indexed to 80 percent of the annual percentage increase in total
deposits and other reservable liabilities for all
depository institutions. The annual adjustment of
the cutoff level is computed as of June 30 of each
year. Institutions with total deposits and other
reservable liabilities below the reserve requirement exemption amount of $3.2 million are excused from reporting even on a quarterly basis if
110
Federal Reserve Bulletin • February 1988
their deposits can be estimated from other
sources.
OPERATIONAL CHANGES TO AUTOMATED
CLEARINGHOUSE
MECHANISM
The Federal Reserve Board has approved operational changes to the Reserve Banks' automated
clearinghouse (ACH) mechanism that are designed to reduce risk. These changes become
effective July 18, 1988.
The measures approved by the Board call for
uniform Reserve Bank procedures to monitor
ACH credit payments originated by institutions
experiencing financial difficulties. The procedures are designed to reduce the likelihood that
Reserve Banks would have to reserve ACH
credit payments should the institution originating
the credit payments fail before the transactions
are settled.
Earlier deadlines will be set for the return of
ACH debit transactions of $2,500 or more. In
1988 the new deadlines will be 8:00 p.m. (eastern
time) for nonautomated returns and the regular
night deposit deadlines for the automated returns. In addition, return information will be
taken by telephone for institutions that cannot
meet the new paper return-item deadlines; however, institutions will be charged $6,000 per
return item for this service.
If institutions that originate ACH credit payments are closed on the settlement day, the
institutions' reverse or clearing accounts will be
charged for the transactions as if they were open.
This policy will apply to both voluntary and
mandatory holidays because the institutions
making these payments are aware of their obligations one or two days before the settlement
date.
REGULATION
T:
AMENDMENT
The Federal Reserve Board announced on December 23, 1987, approval of an amendment to
Regulation T (Credit by Brokers and Dealers) to
enable broker-dealers to help employees exercise stock options awarded in connection with
their employment.
The principal effect of the amendment is to
provide a simplified method whereby brokers
and dealers may temporarily finance the acquisition of stock under employee stock option programs without violating the general principles of
Regulation T.
In general, the structure of a cash account does
not permit a person to pay for the purchase of a
security with the proceeds of its sale nor does the
structure of a margin account allow a withdrawal
of cash if the effect is to lower a customer's
equity in the account. The amendment, which is
effective January 25, 1988, will supersede these
provisions in Regulation T in this narrow area by
permitting the creditor to treat the receipt of an
exercise notice as if it were the stock itself.
REGULATION
Z.
AMENDMENT
The Federal Reserve Board has adopted an
amendment to its Regulation Z (Truth in Lending) that will require creditors to provide consumers with more extensive information about
the variable-rate feature of closed-end adjustable
rate mortgages (ARMs) that have maturities of
longer than one year and are secured by the
consumer's principal dwelling. The Board's final
rule becomes effective October 1, 1988, but creditors may comply immediately.
The Board's amendment requires creditors to
provide consumers with a more detailed description of the variable-rate feature. An historical
example that shows the effect that actual changes
in index values would have had on payments on
a $10,000 loan must be given to the consumer.
And, creditors must provide a statement of the
initial and maximum interest rates and payments
for a $10,000 loan originated at the most recent
interest rate shown in the historical example.
The amendment to the regulation also requires
that prospective borrowers be given an educational brochure about ARMs, either The Consumer Handbook on Adjustable Rate Mortgages
published by the Board and the Federal Home
Loan Bank Board, or a suitable substitute.
All of this information must be given to the
consumer at the time an application form is
provided or before the consumer pays a nonrefundable fee, whichever occurs earlier.
Announcements
BANK HOLDING
APPROVED
COMPANY
APPLICATION
The Federal Reserve Board announced on December 14, 1987, its approval of the application
of Bank of New England Corporation, Boston,
Massachusetts, to engage in (1) placing thirdparty commercial paper as agent; and (2) underwriting and dealing in certain municipal revenue
bonds, one- to four-family mortgage-related securities, commercial paper, and consumerreceivable-related securities through its wholly
owned subsidiary, BNE Capital Market Company, Boston, Massachusetts. In accordance
with Title II of the Competitive Equality Banking
Act of 1987, the Board has delayed the effective
date of its Order with respect to the proposed
underwriting and dealing activity.
EXTENSION
OF COMMENT
PERIOD
The Federal Reserve Board announced on December 11,1987, an extension to January 8,1988,
of the comment period on a program to permit
state member agricultural banks to amortize
losses on qualified agricultural loans.
The Board allowed the extension even though
its final rule regarding this matter became effective November 9, 1987, and information on amortized loans will appear on reports of condition
beginning December 31, 1987.
The program was created by Title VIII of the
Competitive Equality Banking Act of 1987.
PROPOSED
ACTIONS
The Federal Reserve Board issued for public
comment on December 3, 1987, a proposed new
regulation to carry out provisions of the Expedited Funds Availability Act.
Comment should be submitted to the Board by
February 8, 1988. Because of the lead time
needed by banks to comply with the new law, the
111
Board said it would be unable to extend the time
for comment beyond the 60-day period.
The Federal Reserve Board also issued for
public comment on December 22, 1987, a proposal to amend its Regulation Z (Truth in Lending), to require creditors to give consumers increased disclosures about home equity lines of
credit much earlier in the credit process. Comment is requested by February 8, 1988.
PROPOSED REVISIONS TO OFFICIAL STAFF
COMMENTARIES ON REGULATIONS B, E,
AND Z
The Federal Reserve Board issued for public
comment on December 10, 1987, proposed revisions to the official staff commentaries for three
of its consumer credit protection regulations,
Regulation B (Equal Credit Opportunity), Regulation E (Electronic Fund Transfers), and Regulation Z (Truth in Lending).
SYSTEM MEMBERSHIP:
STATE BANKS
ADMISSION
OF
The following state banks were admitted to membership in the Federal Reserve System during the
period December 1 through December 31, 1987:
Delaware
New Castle
Florida
Hollywood
Fidelity Bank
Delaware
Florida First
International Bank
Alachua. . .United Citizens Bank of Alachua
County
Pennsylvania
Berks County
Berks County Bank
Philadelphia
Princeton Bank
of Pennsylvania
Philadelphia County
Glendale Bank
of Pennsylvania
Virginia
Chesapeake
Bank of Hampton Roads
112
Record of Policy Actions of the
Federal Open Market Committee
MEETING HELD ON NOVEMBER
1. Domestic
Policy
3,1987
Directive
The economic information available at this meeting was reviewed in the context of the extraordinary developments in financial markets since the
Committee meeting on September 22. Over the
period, equity prices had fallen sharply and a
record drop in mid-October was accompanied by
falling interest rates and heightened preferences
for safety and liquidity. The economic effects of
such developments were not yet clear. At the
time of the meeting, data relating to nationwide
business activity were available only for the
period prior to the mid-October collapse in stock
prices. Such data showed that the economy had
expanded at a fairly brisk pace in the third
quarter; growth in the industrial sector was especially robust, spurred by a sharp pickup in
business investment and a further expansion in
exports. Prices continued to rise at a relatively
moderate rate in recent months, and even with
fairly strong labor demands and a considerably
reduced unemployment rate, wages accelerated
only slightly.
Industrial production rose somewhat further in
September after a large increase earlier in the
summer. In the third quarter as a whole, output
was up nearly 9 percent at an annual rate, with
large gains in most major groupings. Production
of business equipment was especially strong,
apparently reflecting improved foreign as well as
domestic demand for U.S. products. Materials
output also continued to strengthen, but auto
assemblies were reduced sharply in August and
September.
Labor demand, on balance, remained strong.
Nonfarm payroll employment rose again in September. Manufacturing employment posted a sizable rise in the third quarter, with widespread
gains across both durable and nondurable goods
industries. Job growth elsewhere, however, has
slowed; construction employment dropped in
September, and hiring in the finance, insurance,
and real estate grouping was damped in part by
slower mortgage originations. The civilian unemployment rate continued to edge down in September, touching 5.9 percent.
Retail sales declined somewhat in September,
but consumer spending rose substantially in the
third quarter, reflecting primarily an incentiveinduced increase in outlays on motor vehicles.
With the expiration of the incentives at the end of
September, sales of domestic autos dropped
sharply. Purchases of other goods were about
unchanged last quarter because of continued
softness in the demand for big-ticket items as
well as for most types of nondurables. However,
outlays for services rose appreciably.
Housing activity through September continued
to be limited by the effects of higher mortgage
interest costs and elevated rental vacancy rates.
Building permits were flat in September and,
although starts picked up to an annual rate of
1.67 million units, they remained well below the
pace of early this year.
Business fixed investment was strong in the
third quarter, paced by a surge in purchases of
computers, a bulge in purchases of motor vehicles, and a substantial increase in spending on
other types of equipment. Outlays on structures
also recorded a large rise, as petroleum drilling
activity expanded sharply, spending by public
utilities increased appreciably, and office construction firmed. The advance spending indicators available through September also pointed to
continued strength. Recent events in financial
markets were expected to lead to some reassessment of spending plans, but investment outlays
would be supported in the near term by projects
that were already under way.
113
Inventory investment was held down in the
third quarter by a sharp liquidation of stocks at
automobile dealers. Based on data available
through August, the level of stocks in other trade
categories rose somewhat further but generally
did not appear to be excessive in relation to
sales. In the manufacturing sector, the stronger
orders received since last spring contributed to
an increase in the pace of inventory accumulation that was fairly widespread by industry and
by stage of fabrication; nonetheless, inventorysales ratios in most industries remained low at
the end of August.
The U.S. merchandise trade deficit in JulyAugust was estimated to have been marginally
larger than in the second quarter on a seasonally
adjusted basis; both imports and exports rose
substantially over the two months. A surge in oil
imports, most of which went into domestic
inventories, accounted for about half of the
July-August rise in total imports. Nonagricultural exports continued to grow at a rapid pace,
with shipments of commercial aircraft showing
particular strength in July. Agricultural exports
also picked up markedly.
Indicators of business conditions in major foreign industrial countries generally suggested
somewhat faster economic expansion in the third
quarter than the weak average pace of the first
half of the year, while inflation abroad remained
low. In Japan, industrial production in the third
quarter was noticeably above the average level
for the first half of the year. The trade surplus
was down slightly in nominal terms in the third
quarter, and more substantially in real terms. At
the same time, consumer prices in Japan were
slightly above their year-earlier level, while
wholesale prices showed a smaller four-quarter
decline than in previous quarters. German industrial production rebounded significantly in August, after declines in the previous two months,
but the average level for July-August was still
below its year-earlier level. Consumer prices in
Germany in the third quarter were slightly above
their level of a year earlier. Output in the United
Kingdom continued to grow at a healthy pace,
while that in France and Italy slowed somewhat.
Increases in U.S. consumer prices have been
relatively moderate in recent months. The CPI
rose 0.2 percent in September, as retail energy
prices fell but food prices rose. Excluding food
and energy items, consumer prices have slowed a
bit recently from the average pace over the first
seven months of the year. Price increases for
finished goods at the producer level also have
remained moderate. However, prices for intermediate and crude materials (apart from food and
energy) have continued to rise substantially, reflecting the higher levels of industrial activity, the
lower exchange value of the dollar, and the
effects on petroleum-based products of earlier
increases in crude oil prices. Wage trends have
remained moderate, although increases in the
past few months have been slightly larger than
earlier in the year.
At its meeting on September 22, the Committee adopted a directive that called for maintaining
the degree of pressure on reserve positions that
had been sought since early September. The
members decided that somewhat greater or
somewhat lesser reserve restraint would be acceptable depending on indications of inflationary
pressures, the strength of the business expansion, developments in foreign exchange markets,
as well as the behavior of the monetary aggregates. Adjustment plus seasonal borrowing in the
first complete reserve maintenance period following the September meeting increased to a
daily average of about $725 million, boosted in
part by unusual borrowing related to Reserve
Bank computer problems. Apart from higher
levels around the quarter-end, federal funds
traded in a IVA to IVi percent range during that
maintenance period. Federal funds and other
interest rates subsequently rose through midOctober as market participants appeared to anticipate monetary tightening in an environment of
firmer policy abroad, concerns about the dollar,
and pessimism about the prospects for domestic
inflation.
After declining appreciably in the first half of
the month, stock prices plunged on October 19 in
chaotic trading. Most interest rates fell sharply.
The Committee held daily telephone conferences
in the last two weeks of October to assess the
extraordinary developments in financial markets.
The members agreed on the need to assure
adequate liquidity in a period of continuing volatility in domestic and international financial
114 Federal Reserve Bulletin • February 1988
markets, and in particular on the need to meet
promptly any unusual liquidity requirements of
the economic and financial system in this period.
They recognized that special flexibility in the
conduct of open market operations was called for
after the stock market collapse. Accordingly,
reserves were provided generously on a daily
basis, often at an atypically early hour. In the
process, operations were directed toward some
easing in reserve market conditions. The degree
of pressure that was sought on reserve positions
was reduced shortly after October 19 and again
late in the month, but actual operations continued to be guided by day-to-day developments.
Growth in nonborrowed reserves surged in late
October as open market operations accommodated substantially enlarged desires for excess
reserves and a large increase in required reserves
associated with a sharp rise in transactions deposits.
In addition to providing liquidity to the financial markets through open market operations, the
Federal Reserve assisted the Treasury market by
relaxing some of the constraints on its collateralized lending of Treasury securities to primary
dealers. Committee members agreed on a temporary suspension of the size limits imposed on
loans of securities to individual dealers and the
requirement that such loans not be related to
short sales.1
The federal funds rate dropped from above IVi
percent just before October 19 to 7 percent and
below immediately following the stock market
collapse; borrowing at the discount window averaged $525 million in the reserve maintenance
period ending October 21 and excess reserves
rose substantially, reflecting cautious reserve
management by depository institutions. During
the early part of the current reserve maintenance
period, federal funds traded mostly in a 7 to llA
percent range, but more recently the funds rate
moved below 7 percent after large injections of
reserves by the Desk. Borrowing in the current
reserve maintenance period was running well
below that in the previous period.
1. Secretary's note: The temporary liberalization of securities lending terms w a s terminated effective N o v e m b e r 19,
1987.
Equity prices fluctuated sharply after their
collapse on October 19, but most major stock
indexes have recovered to levels somewhat
above their October lows. Markets for fixedincome securities also were quite volatile after
mid-October, but yields fell substantially on balance, with rates on long-term Treasury and highgrade corporate bonds reversing much of their
runup since August. In recent days, bond markets generally have retained their earlier gains, as
market participants have appeared to reassess
the outlook for the economy, inflation, and monetary policy. In short-term markets, Treasury bill
rates have shown net declines of around WA
percentage points since mid-October, in association with the easing of reserve conditions as well
as increased demands for safe and liquid instruments, while rates on some private money market instruments have fallen somewhat less. In
general, pressures in financial markets appeared
to have moderated to some extent, although the
markets continued to be characterized by an
unusual degree of anxiety and uncertainty.
The dollar moved lower during the first half of
October, especially after the release of U.S.
trade data on October 14 intensified market concern over the failure of the U.S. current account
balance to improve. Though the dollar firmed
temporarily immediately following the worldwide stock market collapse and reports of Secretary Baker's meeting with German officials, by
the latter part of October the dollar again came
under downward pressure amid widespread
speculation that dollar exchange rates under the
Louvre accord would be allowed to adjust downward. In addition, interest rates in the United
States had dropped substantially relative to those
in other major industrial countries. Over the
entire intermeeting period, the dollar declined by
about AVi percent in terms of a weighted average
of other G-10 currencies.
The plunge in equity prices prompted moves to
short-term liquid assets, and growth of money,
especially Ml, appears to have accelerated in
October. Demand deposits rose sharply around
the time of the stock market collapse, perhaps
reflecting the huge increase in financial transactions associated with the market turmoil. M2
growth was bolstered as well by an increase in
assets of money market funds, which may have
Record of Policy Actions of the FOMC
been associated in part with shifts from equity
market funds. Even so, growth in M2 through
October was estimated to have remained well
below its long-run range. Expansion in M3 was
boosted by increases in the managed liabilities of
banks, partly to finance a sharp rise in security
loans. This aggregate has continued to increase
at about the lower bound of its range for the year.
Growth of nonfinancial debt has remained
around the middle of its long-run monitoring
range.
The staff projection suggested that the decline
in equity prices would lead to weaker economic
growth through the end of 1988 than was expected at the time of the September meeting. The
economy would be supported to an extent by the
decline in interest rates and the lower dollar.
However, the effects of these developments on
domestic demand and net exports were thought
likely to offset only part of the adverse impact of
sharply lower equity prices on consumers and
businesses. Consumption was expected to be
relatively subdued in the quarters immediately
ahead, reflecting the termination of automobile
sales incentive programs as well as stock market
developments, but to pick up later next year.
Real business fixed investment was projected to
grow at a slow pace given the outlook for sales.
Housing construction was likely to drop somewhat in the near term, but that decline was
forecast to be stemmed by lower mortgage rates.
The outlook for real net exports of goods and
services remained favorable, but with domestic
demands weaker, the unemployment rate probably would move up somewhat. Against this background, the projected increases in prices and
wages over the coming year were expected to be
somewhat less than previously expected. Nonetheless, some pickup in price pressures still
might be observed in association with sizable
increases in nonpetroleum import prices.
In the Committee's discussion of current and
prospective economic developments, the members focused on the potential effects of the recent
turbulence in financial markets. They generally
agreed that the sharp decline in stock prices and
the still unsettled conditions in financial markets
portended weaker growth in economic activity,
at least for the nearer term, but also a lower risk
of any substantial pickup in inflation. Members
115
stressed that, while the direction of the adjustment was clear, it still was too early to quantify
the impact of the recent disturbances in financial
markets. No data were available on the overall
performance of the economy since mid-October.
Most business contacts around the country reported little or no immediate changes in retail
sales activity or in business investment plans, but
uncertainties about prospective business conditions clearly had increased. A more cautious
attitude had emerged in the business community
and possibly also among consumers.
Members commented that the staff forecast of
somewhat reduced economic growth over the
next several quarters was a reasonable expectation, but one that presumed the return of confidence and more normal conditions in financial
markets. Accordingly, the risks of a different
outcome, notably in the direction of more weakness, were viewed as much greater than usual.
The prospects for satisfactory economic performance clearly depended on the restoration of
generally stable financial conditions that would in
turn foster the basic confidence that was needed
to sustain long-term investments in business capital and in the debt and equity markets. The
timing of such a development could not be predicted, but the members agreed that progress in
reducing the federal budget deficit could play a
key role by relieving market concerns and uncertainties. Indeed, recently renewed efforts to cut
the budget deficit had contributed to a marginal
reduction of tensions in key financial markets.
Despite the uncertainties that were involved, a
few members stressed that the outlook for sustained economic growth still could be viewed as
basically promising. Available data indicated an
appreciable momentum in the current expansion,
at least through the third quarter, and recent
declines in interest rates along with an increasing
ability of domestic firms to compete with foreign
producers constituted elements of strength in the
business picture. The view also was expressed
that both the financial and the nonfinancial sectors of the economy were better balanced than
earlier in the current business expansion. A less
optimistic view pointed to the possibility that
consumer and business spending might continue
to be inhibited by the negative impact of stock
price declines on wealth positions, the cost of
116 Federal Reserve Bulletin • February 1988
equity capital, and more generally on consumer
and business confidence. One member observed
that a recession could not be ruled out and
incoming data on the economy would need to be
scrutinized with special care for signs of greater
weakness than now were expected.
The members continued to view further improvement in real net exports as a key to sustaining moderate expansion in business activity, especially in the context of potentially weaker
domestic demands than had been anticipated
earlier. The prospects for continuing gains
seemed favorable, given the depreciation of the
dollar and indications of considerable improvements in the productivity of U.S. manufacturers.
Tending to support such an outlook were reports
from various parts of the country indicating that
many domestic firms were competing more effectively in export markets and with importers. At
the same time, some members commented that
improvement in the nation's nominal net export
position continued to be held back by the vigorous efforts of foreign firms to maintain market
shares at the expense of profit margins as their
own currencies appreciated in relation to the
dollar. As they had at earlier meetings, members observed that trade developments would
depend to an important extent on the economic performance of key foreign industrial
nations.
Turning to the prospects for wages and prices,
a number of members indicated that they saw in
recent developments a potential for somewhat
less inflation than they had anticipated earlier.
The large decline in stock prices had reduced
inflation expectations, and the weakening in the
outlook for economic growth implied less pressures on wages and prices. Other developments
that would tend to curb inflation included indications of ongoing improvement of labor productivity in manufacturing and the substantial slowdown in monetary growth this year. On the other
hand, reference also was made to pressures on
capacity in a number of industries, including
some that competed actively with foreign producers. A sizable further decline in the dollar,
should it occur, would exacerbate price and wage
pressures in those industries and in the economy
more generally.
At its meeting in July, the Committee reviewed
the basic policy objectives that it had set in
February for growth of the monetary and debt
aggregates in 1987 and established tentative objectives for expansion of those aggregates in
1988. For the period from the fourth quarter of
1986 to the fourth quarter of 1987, the Committee
reaffirmed the ranges established in February
that included growth of 5Yi to 8V2 percent for
both M2 and M3. Given developments through
mid-year, the Committee agreed that growth in
these aggregates around the lower ends of their
ranges might be appropriate, depending on the
circumstances. The monitoring range for expansion in total domestic nonfinancial debt also was
left unchanged at 8 to 11 percent for 1987. For
1988 the Committee agreed on tentative reductions of Vi percentage point to growth ranges of 5
to 8 percent for both M2 and M3. The Committee
also reduced the associated range for growth in
total domestic nonfinancial debt by Vi percentage
point to IVi to IOI/2 percent for 1988. With
respect to Ml, the Committee decided at the July
meeting not to set a specific target for the remainder of 1987 or to establish a tentative range for
1988. It was understood that all the ranges for
1988 were provisional and that they would be
reviewed early next year in the light of intervening developments. The issues involved with establishing a target for Ml would be carefully
reappraised at the beginning of 1988.
In the Committee's discussion of policy implementation for the weeks immediately ahead, the
members generally agreed on the basic desirability of directing open market operations toward
maintaining the easier conditions that had developed in money markets. This would involve
about the degree of pressure on reserve positions
that had been sought most recently. The members recognized that the still unsettled conditions
in financial markets and related uncertainties in
the economic outlook might continue to call for
the more flexible and accommodative approach
to policy that had characterized operations since
October 19. This approach implied giving more
weight than usual to money market conditions in
order to facilitate the return to a more normal
functioning of financial markets and to minimize
the chances that the Committee's intentions
would be misinterpreted. Such an approach also
could help to assure that shifting demands for
Record of Policy Actions of the FOMC
liquidity and reserves would be accommodated
without undesirable fluctuations in money market conditions. As financial markets continued to
stabilize, open market operations would be
phased into a more normal approach to policy
that was oriented more fully to a provision of
reserves keyed to pressures on reserve positions.
The transition would need to be executed with
a great deal of caution under the still sensitive market circumstances that were foreseen.
Committee members agreed that the lower
interest rates that had emerged since mid-October were needed to help offset the effects of the
sharp decline in stock prices. It was acknowledged that the interest rate reductions increased
the risks for the dollar in the foreign exchange
markets, particularly in the absence of similar
reductions abroad, but in the opinion of a number
of members those risks were manageable. Some
members expressed concern, however, that a
further substantial depreciation in the dollar, if it
were to materialize, would have seriously adverse consequences for domestic prices and interest rates and might indeed trigger another
crisis in domestic and international financial markets.
To the extent that market developments permitted a more normal focus on the implementation of a desirable degree of pressure on reserve
positions, attention might need to be given during
the intermeeting period to a possible adjustment
in such reserve conditions depending on economic and financial developments and the behavior of the monetary aggregates. All of the members could foresee possible adjustments in either
direction under alternative potential circumstances. However, in light of the uncertainties
that continued to dominate financial markets and
the risks that the recent developments could
depress business activity, nearly all believed that
policy implementation should remain especially
alert to developments that might call for somewhat easier reserve conditions.
In keeping with the Committee's usual approach, it was understood that any decision to
alter reserve objectives during the intermeeting
period should take account of the behavior of the
monetary aggregates. The members took note of
a staff analysis, which indicated that the uncer
117
tainty surrounding projections of monetary
growth was considerably greater than usual. In
particular, the extent to which heightened preferences for liquidity and substantial variations in
the volume of financial transactions might affect
future demand for money balances was difficult
to gauge. Moreover, it was hard to assess how
quickly the money markets and depository institutions would move to reestablish a more normal
structure of short-term market and deposit interest rates and in particular how fully the opportunity costs of holding money balances would be
adjusted in the period ahead. On the assumption
that conditions in financial markets would gradually return to more normal patterns but that
some residual of the heightened demands for
liquidity would remain, the reserve conditions
that were contemplated might be accompanied
by somewhat faster growth in M2 and M3 in the
current quarter than had occurred in the third
quarter. The members understood that such
growth implied expansion in M2 for the year that
would be well below the Committee's range and
growth in M3 that was close to the lower end of
its range. Growth in Ml continued to be particularly difficult to project in present circumstances, but a considerable slowing after the
October bulge was seen as likely over the balance of the quarter.
Given the Committee's current approach to
open market operations, the members anticipated that the federal funds rate would continue
to fluctuate generally in a fairly narrow band
close to recent levels. Nonetheless, most of the
members agreed that the usual, relatively wide
range to trigger a consultation should continue to
be set for the federal funds rate. A majority
favored a reduction in the range from the current
5 to 9 percent to 4 to 8 percent. While the
midpoint of the current range would be centered
approximately on the expected average trading
level, some members commented that a rise
toward 9 percent would have destabilizing effects
in the period ahead. Moreover, a 4 to 8 percent
range might be viewed as more in keeping with
the recent thrust in monetary policy and the
expectation that intermeeting adjustments, if
any, were likely to be in the direction of easier
reserve conditions.
At the conclusion of the Committee's discus-
118
Federal Reserve Bulletin • February 1988
sion, all of the members indicated their support
of a directive that called for maintaining the
degree of reserve pressure that had been sought
in recent days. The members recognized that the
volatile conditions in financial markets and related uncertainties in the business outlook might
continue to indicate the need for special flexibility in the conduct of open market operations.
Such an approach to policy implementation
would depend in particular on the strength of
demands for liquidity stemming from recent and
prospective developments in financial markets.
To the extent that the functioning of those markets permitted a return to more normal open
market operations, the members indicated that
somewhat lesser reserve restraint would be acceptable, while slightly greater reserve restraint
might be acceptable, depending on the strength
of the business expansion, indications of inflation, the performance of the dollar in foreign
exchange markets, with account also taken of the
behavior of the monetary aggregates. The members believed that the outlook for monetary
growth over the months ahead was subject to
unusual uncertainty, but the contemplated reserve conditions were thought likely to be consistent with somewhat faster growth in M2 and
M3 than had been expected earlier; such growth
might center on annual rates of around 6 to 7
percent for the period from September through
December. Largely reflecting the bulge in October, growth in Ml in the fourth quarter as a
whole was expected to be well above its average
pace in the previous several months. However,
because of the very substantial uncertainty that
still surrounded the outlook for Ml, the Committee decided to continue its practice of not specifying a numerical expectation for its growth. The
members agreed that the intermeeting range for
the federal funds rate, which provides a mechanism for initiating consultation of the Committee
when its boundaries are persistently exceeded,
should be reduced from 5 to 9 percent to 4 to 8
percent.
At the conclusion of the meeting the following
domestic policy directive was issued to the Federal Reserve Bank of New York:
The economic information available at this meeting
was reviewed against the backdrop of extraordinary
developments in financial markets in the period since
the previous Committee meeting on September 22.
Share prices in the stock market were down sharply.
Following a particularly large decline of stock prices in
mid-October, interest rates fell steeply and increases
that had occurred during the first part of the intermeeting period subsequently were more than reversed on
most types of debt obligations. Foreign exchange
markets were relatively calm over most of the intermeeting period, but the dollar came under significant
downward pressure late in the period.
In the third quarter economic activity had expanded
at a fairly brisk pace. Total nonfarm payroll employment rose further in September, with the manufacturing sector continuing to record relatively sizable gains.
The civilian unemployment rate edged down to 5.9
percent. Industrial production increased somewhat
further in September following large gains in other
recent months. Retail sales declined somewhat in
September, but consumer spending, bolstered by a
rise in auto sales, posted a large increase over the third
quarter. Business capital spending was strong in the
third quarter and forward indicators pointed to continuing gains. Housing starts were up in September but
were little changed in the third quarter from their
second-quarter average. The nominal U.S. merchandise trade deficit narrowed in August, but the JulyAugust average remained above the second-quarter
rate. The rise in consumer and producer prices was
relatively moderate in recent months following more
rapid increases earlier in the year.
Growth of the monetary aggregates appeared to
have strengthened in October, with some of the
strength reflecting heightened demands for transaction
balances and other liquid assets in the latter part of the
month. Even so, for 1987 through October, expansion
of M2 evidently moved closer to, but remained below,
the lower end of the range established by the Committee for the year, while growth of M3 was around the
lower end of its range. Expansion in total domestic
nonfinancial debt has remained on a more moderate
trend in recent months.
The Federal Open Market Committee seeks monetary and financial conditions that will foster reasonable
price stability over time, promote growth in output on
a sustainable basis, and contribute to an improved
pattern of international transactions. In furtherance of
these objectives the Committee agreed at its meeting
in July to reaffirm the ranges established in Februaryfor growth of 5V2 to 8V2 percent for both M2 and M3
measured from the fourth quarter of 1986 to the fourth
quarter of 1987. The Committee agreed that growth in
these aggregates around the lower ends of their ranges
may be appropriate in light of developments with
respect to velocity and signs of the potential for some
strengthening in underlying inflationary pressures,
provided that economic activity is expanding at an
acceptable pace. The monitoring range for growth in
Record of Policy Actions of the FOMC
total domestic nonfinancial debt set in February for the
year was left unchanged at 8 to 11 percent.
For 1988, the Committee agreed on tentative ranges
of monetary growth, measured from the fourth quarter
of 1987 to the fourth quarter of 1988, of 5 to 8 percent
for both M2 and M3. The Committee provisionally set
the associated range for growth in total domestic
nonfinancial debt at IV2 to IOV2 percent.
With respect to M l , the Committee recognized that,
based on experience, the behavior of that aggregate
must be judged in the light of other evidence relating to
economic activity and prices; fluctuations in Ml have
become much more sensitive in recent years to
changes in interest rates, among other factors. Because of this sensitivity, which has been reflected in a
sharp slowing of the decline in Ml velocity over the
first half of the year, the Committee again decided at
the July meeting not to establish a specific target for
growth in Ml over the remainder of 1987 and no
tentative range was set for 1988. The appropriateness
of changes in Ml this year will continue to be evaluated in the light of the behavior of its velocity, developments in the economy and financial markets, and
the nature of emerging price pressures. The Committee welcomes substantially slower growth of Ml in
1987 than in 1986 in the context of continuing economic expansion and some evidence of greater inflationary pressures. The Committee in reaching operational decisions over the balance of the year will take
account of growth in Ml in the light of circumstances
then prevailing. The issues involved with establishing
a target for Ml will be carefully reappraised at the
beginning of 1988.
In the implementation of policy for the immediate
future, the Committee seeks to maintain the degree of
pressure on reserve positions sought in recent days.
The Committee recognizes that the volatile conditions
in financial markets and uncertainties in the economic
outlook may continue to call for a special degree of
flexibility in open market operations, depending, in
particular, on demands for liquidity growing out of
recent or prospective developments in financial markets. Apart from such considerations, somewhat
lesser reserve restraint would, or slightly greater reserve restraint might, be acceptable depending on the
strength of the business expansion, indications of
inflationary pressures, developments in foreign exchange markets, as well as the behavior of the monetary aggregates. While the outlook for monetary
growth over the months ahead is subject to unusual
uncertainty, the contemplated reserve conditions are
119
expected to be consistent with growth in M2 and M3
over the period from September through December at
annual rates of about 6 to 7 percent, but more rapid
growth is possible should preferences for liquidity be
particularly strong. Over the same period, growth in
Ml is expected to be well above its average pace in the
previous several months. The Chairman may call for
Committee consultation if it appears to the Manager
for Domestic Operations that reserve conditions during the period before the next meeting are likely to be
associated with a federal funds rate persistently outside a range of 4 to 8 percent.
Votes for this action: Messrs. Greenspan, Corrigan, Angell, Boehne, Boykin, Heller, Johnson,
Keehn, Kelley, Ms. Seger, and Mr. Stern. Votes
against this action: None.
2. Authorization for Domestic
Market
Operations
Open
Effective November 4, 1987, the Committee approved a temporary increase of $3 billion, to $9
billion, in the limit between Committee meetings
on changes in System Account holdings of U.S.
government and federal agency securities specified in paragraph 1(a) of the Authorization for
Domestic Operations. The increase was effective
for the intermeeting period ending with the close
of business on December 16, 1987.
Votes for this action: Messrs. Greenspan, Corrigan, Angell, Boehne, Boykin, Heller, Johnson,
Keehn, Kelley, Ms. Seger, and Mr. Stern. Votes
against this action: None.
This action was taken on the recommendation
of the Manager for Domestic Operations. The
Manager had advised that the normal leeway of
$6 billion for changes in the System's Account
probably would not be sufficient over the intermeeting period because of seasonal increases in
currency in circulation and required reserves;
such increases could be enlarged even further if
current financial market tensions persisted.
121
Legal Developments
AMENDMENTS
TO REGULATIONS
D AND
Q
The Board of Governors is amending 12 C.F.R. Part
204, its Regulation D, and 12 C.F.R. Part 217, its
Regulation Q. The Board is amending Part 204 and
Part 217 by rescinding obsolete published interpretations of Regulation Q and by revising others to reflect
the expiration, on March 31, 1986, of the Depository
Institutions Deregulation Act of 1980 ("DIDA"), as
well as to clarify and simplify them. The Board is
preserving some of the revised interpretations by
reclassifying them as interpretations of Regulation D.
The Board is also making technical corrections to
Regulation D and to several interpretations in Regulation D by removing unnecessary references or by
incorporating clarifications that have been published
elsewhere.
Effective March 31, 1986, the Board amended its
Regulations D and Q to reflect the expiration of the
DID A. The expiration of the DID A and the amendments to Regulations D and Q eliminated rate ceilings
on the payment of interest on deposits and rendered
many of the Regulation Q interpretations obsolete.
The amendments to the interpretations of Regulations
D and Q hereby adopted are technical and conform the
surviving interpretations to the current Regulations D
and Q.
Effective December 31, 1987, 12 C.F.R. Part 204
and 12 C.F.R. Part 217 are amended as follows:
Part 204—Reserve Requirements of Depository
Institutions
Part 217—Interest on Deposits
1. The authority citation for 12 C.F.R. Part 204 continues to read as follows:
3. Section 204.2(a)(l)(v) is amended by removing
"four" and replacing it with "one and one-half'
where it refers to years.
4. Section 204.2(a)(l)(vii)(C) is amended by removing
"is not subject to federal interest rate ceilings,."
5. Section 204.122(b) is revised as follows:
Section 204.122—Secondary market activities
of International Banking Facilities
(b) Consistent with the Board's intent, IBFs may
purchase IBF-eligible assets 1 from, or sell such assets
to, any domestic or foreign customer provided that the
transactions are at arm's length without recourse.
However, an IBF of a U.S. depository institution may
not purchase assets from, or sell such assets to, any
U.S. affiliate of the institution establishing the IBF; an
IBF of an Edge or Agreement corporation may not
purchase assets from, or sell assets to, any U.S.
affiliate of the Edge or Agreement corporation or to
U.S. branches of the Edge or Agreement corporation
or to U.S. branches of the Edge or Agreement corporation other than the branch1 establishing the IBF; and
an IBF of a U.S. branch or agency of a foreign bank
may not purchase assets from, or sell assets to any
U.S. affiliates of the foreign bank or to any other U.S.
branch or agency of the same foreign bank. 2 (This
would not prevent an IBF from purchasing (or selling)
assets directly from (or to) any IBF, including an IBF
of an affiliate, or to the institution establishing the IBF;
such purchases from the institution establishing the
IBF would continue to be subject to Eurocurrency
reserve requirements except during the initial fourweek transition period.) Since repurchase agreements
are regarded as loans, transactions involving repurchase agreements are permitted only with customers
Authority: 12 U.S.C. §§ 248(a), 248(c), 371a, 371b,
461, 601, 611; 12 U.S.C. § 3105; 12 U.S.C. § 461.
2. The authority citation for 12 C.F.R. Part 217 continues to read as follows:
Authority: 12 U.S.C. §§ 248, 371, 371a, 371b, 461,
1828, 3105.
1. In order for an asset to be eligible to be held by an IBF, the
obligor or issuer of the instrument, or in the case of bankers'
acceptances, the customer and any endorser or acceptor, must be an
IBF-eligible customer.
2. Branches of Edge or Agreement corporations and agencies and
branches of foreign banks that file a consolidated report for reserve
requirements purposes (FR 2900) are considered to be the establishing
entity of an IBF.
122 Federal Reserve Bulletin • February 1988
who are otherwise eligible to deal with IBFs, as
specified in Regulation D.
6. Section 204.123 is amended by removing from its
first paragraph the sentence, "A parallel exemption in
Regulation Q . . . (12 C.F.R. 217.1(f)(1))."
7. Section 204.124(a) is amended by removing from
the sentence, "A parallel exemption in Regulation Q
. . . (12 C.F.R. 217.1(f)(2))."
8. Footnote 4 of section 204.2(c)(l)(iv)(E) is amended
by removing "217.126" and replacing it with
"204.125" and section 217.126 is redesignated as
section 204.125, and revised to read as follows:
AFRICA
African Development Bank.
Banque Centrale des Etats de l'Afrique Equatorial et
du Cameroun.
Banque Centrale des Etats d'Afrique del'Ouest.
Conseil de l'Entente.
East African Community.
Organisation Commune Africaine et Malagache.
Organization of African Unity.
Union des Etats de l'Afrique Centrale.
Union Douaniere et Economique de l'Afrique
Centrale.
Union Douaniere des Etats de l'Afrique de l'Ouest.
ASIA
S e c t i o n 2 0 4 . 1 2 5 — F o r e i g n , international, and
supranational entities w h o s e deposits are
exempt from reserves
The entities referred to in section 204.2(c)(l)(iv)(E)
are:
EUROPE
Bank for International Settlements.
European Atomic Energy Community.
European Coal and Steel Community.
The European Communities.
European Development Fund.
European Economic Community.
European Free Trade Association.
European Fund.
European Investment Bank.
LATIN AMERICA
Andean Development Corporation.
Andean Subregional Group.
Caribbean Development Bank.
Caribbean Free Trade Association.
Caribbean Regional Development Agency.
Central American Bank for Economic Integration.
The Central American Institute for Industrial Research and Technology.
Central American Monetary Stabilization Fund.
East Caribbean Common Market.
Latin American Free Trade Association.
Organization for Central American States.
Permanent Secretariat of the Central American General Treaty of Economic Integration.
River Plate Basin Commission.
Asia and Pacific Council.
Association of Southeast Asian Nations.
Bank of Taiwan.
Korea Exchange Bank.
MIDDLE EAST
Central Treaty Organization.
Regional Cooperation for Development.
9. Section 217.137 is redesignated as section 204.126,
and revised to read as follows:
S e c t i o n 2 0 4 . 1 2 6 — D e p o s i t o r y institution
participation in " F e d e r a l f u n d s " market
(a) Under section 204.2(a)(l)(vii)(A), there is an exemption from Regulation D for member bank obligations in nondeposit form to another bank. To assure
the effectiveness of the limitations on persons who sell
Federal funds to depository institutions, Regulation D
applies to nondocumentary obligations undertaken by
a depository institution to obtain funds for use in its
banking business, as well as to documentary obligations. Under section 204.2(a)(l)(vii) of Regulation D, a
depository institution's liability under informal arrangements as well as those formally embodied in a
document are within the coverage of Regulation D.
(b) The exemption in section 204.2(a)(l)(vii)(A) applies
to obligations owed by a depository institution to a
domestic office of any entity listed in that section (the
"exempt institutions"). The "exempt institutions"
explicitly include another depository institution, foreign bank, Edge or agreement corporation, N e w York
Investment (article XII) Company, the Export-Import
Bank of the United States, Minbanc Capital Corp.,
and certain other credit sources. The term "exempt
Legal Developments
institutions" also includes subsidiaries of depository
institutions:
(1) that engage in businesses in which their parents
are authorized to engage; or
(2) the stock of which by statute is explicitly eligible
for purchase by national banks.
(c) To assure that this exemption for liabilities to
exempt institutions is not used as a means by which
nondepository institutions may arrange through an
exempt institution to "sell" Federal funds to a depository institution, obligations within the exemption
must be issued to an exempt institution for its own
account. In view of this requirement, a depository
institution that "purchases" Federal funds should
ascertain the character (not necessarily the identity) of
the actual "seller" in order to justify classification of
its liability on the transaction as "Federal funds purchased" rather than as a deposit. Any exempt institution that has given general assurance to the purchasing
depository institution that sales by it of Federal funds
ordinarily will be for its own account and thereafter
executes such transactions for the account of others,
should disclose the nature of the actual lender with
respect to each such transaction. If it fails to do so, the
depository institution would be deemed by the Board
as indirectly violating section 19 of the Federal Reserve Act and Regulation D.
10. Section 217.138 is redesignated as section 204.127,
and revised to read as follows:
Section 204.127—Nondepository participation
in "Federal funds" market
(a) The Board has considered whether the use of
"interdepository institution loan participations"
("IDLPs") which involve participation by third parties other than depository institutions in Federal funds
transactions, comes within the exemption from
"deposit" classification for certain obligations owed
by a depository institution to an institution exempt in
section 204.2(a)(l)(vii)(A) of Regulation D. An IDLP
transaction is one through which an institution that has
sold Federal funds to a depository institution, subsequently "sells" or participates out that obligation to a
nondepository third party without notifying the obligated institution.
(b) The Board's interpretation regarding Federal funds
transactions (12 C.F.R. 204.126) clarified that a depository institution's liability must be issued to an exempt
institution described in section 204.2(a)(l)(vii)(A) of
Regulation D for its own account in order to come
within the nondeposit exemption for interdepository
liabilities. The Board regards transactions which result
in third parties gaining access to the Federal funds
123
market as contrary to the exemption contained in
section 204.2(a)(l)(vii)(A) of Regulation D regardless
of whether the nondepository institution third party is
a party to the initial transaction or thereafter becomes
a participant in the transaction through purchase of all
or part of the obligation held by the "selling" depository institution.
(c) The Board regards the notice requirements set out
in 12 C.F.R. 204.126 as applicable to IDLP-type transactions as described herein so that a depository institution "selling" Federal funds must provide to the
purchaser:
(1) notice of its intention, at the time of the initial
transaction, to sell or participate out its loan contract to a nondepository third party, and
(2) full and prompt notice whenever it (the "selling"
depository institution) subsequently sells or participates out its loan contract to a non-depository third
party.
11. Section 217.146 is redesignated as section 204.128,
and revised to read as follows:
Section 204.128—Deposits at foreign branches
guaranteed by domestic office of a depository
institution
(a) In accepting deposits at branches abroad, some
depository institutions may enter into agreements
from time to time with depositors that in effect guarantee payment of such deposits in the United States if
the foreign branch is precluded from making payment.
The question has arisen whether such deposits are
subject to Regulation D, and this interpretation is
intended as a clarification.
(b) Section 19 of the Federal Reserve Act which
establishes reserve requirements does not apply to
deposits of a depository institution "payable only at an
office thereof located outside of the States of the
United States and the District of Columbia"
(12 U.S.C. 371a; 12 C.F.R. 204.1(c)(5)). The Board
ruled in 1918 that the requirements of section 19 as to
reserves to be carried by member banks do not apply
to foreign branches (1918 Fed. Res. Bull. 1123). The
Board has also defined the phrase "Any deposit that is
payable only at an office located outside the United
States," in section 204.2(t) of Regulation D, 12 C.F.R.
204.2(t).
(c) The Board believes that this exemption from reserve requirements should be limited to deposits in
foreign branches as to which the depositor is entitled,
under his agreement with the depository institution, to
demand payment only outside the United States,
regardless of special circumstances. The exemption is
intended principally to enable foreign branches of U.S.
124 Federal Reserve Bulletin • February 1988
depository institutions to compete on a more nearly
equal basis with banks in foreign countries in accordance with the laws and regulations of those countries.
A customer who makes a deposit that is payable solely
at a foreign branch of the depository institution assumes whatever risk may exist that the foreign country
in which a branch is located might impose restrictions
on withdrawals. When payment of a deposit in a
foreign branch is guaranteed by a promise of payment
at an office in the United States if not paid at the
foreign office, the depositor no longer assumes this
risk but enjoys substantially the same rights as if the
deposit had been made in a U . S . office of the depository institution. To assure the effectiveness of Regulation D and to prevent evasions thereof, the Board
considers that such guaranteed foreign-branch deposits must be subject to that regulation,
(d) Accordingly, a deposit in a foreign branch of a
depository institution that is guaranteed by a domestic
office is subject to the reserve requirements of Regulation D the same as if the deposit had been made in
the domestic office. This interpretation is not designed
in any respect to prevent the head office of a U . S . bank
from repaying borrowings from, making advances to,
or supplying capital funds to its foreign branches,
subject to Eurocurrency liability reserve requirements.
12. Section 217.153 is redesignated as section 204.129,
and revised to read as follows:
S e c t i o n 2 0 4 . 1 2 9 — S e r i a l , sinking f u n d
r e d e m p t i o n , a n d a m o r t i z e d i s s u e s as capital
(a) Section 204.2(a)(l)(vii) contains several exceptions
which exclude certain liabilities from the definition of
"deposit." For a member bank, the exception in
section 204.2(a)(l)(vii)(C) means any liability that:
(1) Bears on its face, in bold face type, the following:
"This obligation is not a deposit and is not insured by the
Federal Deposit Insurance Corporation."
(2) is subordinated to the claims of the depositors;
(3) is unsecured and is ineligible as collateral for a
loan by the issuing bank and expressly states so on
its face;
(4) (i) Has an original maturity of at least seven
years or, in the case of a liability that provides for any type of scheduled repayments of
principal,
has
an
average
maturity 1
of
1. The "average maturity" of an obligation or issue repayable in
scheduled periodic payments shall be the weighted average of the
maturities of all such scheduled repayments.
at least seven years 2 and
(ii) provides that once any such repayment of
principal begins, all scheduled repayments shall
be made at least annually and the amount repaid
in each year is no less than in the prior year;
(5) is issued subject to a requirement that no repayment (other than a regularly scheduled repayment
already approved by the appropriate Federal bank
regulatory agency), including but not limited to a
payment pursuant to acceleration of maturity, may
be made without the prior written approval of the
appropriate Federal bank regulatory agency; 3 and
(6) is in an amount of at least $500.
(b) The appropriate Federal bank regulatory agency
may approve the issuance of an obligation that is less
than $500 if such lesser amount is necessary:
(1) to satisfy the preemptive rights of shareholders in
the case of a convertible debt obligation;
(2) to maintain a ratable unit offering to holders of
preemptive rights in the case of an obligation issued
exclusively as part of a unit including shares of stock
which are subject to such preemptive rights; or
(3) to satisfy shareholders' ratable claims in the case
of an obligation issued wholly or partially in exchange for shares of voting stock or assets pursuant
to a plan of merger, consolidation, reorganization,
or other transaction where the issuer will acquire
either a majority of such shares of voting stock or all
or substantially all of the assets of the entity whose
assets are being acquired; and has been approved by
the appropriate Federal bank regulatory agency as
an addition to the capital structure of the issuing
bank.
(c) The appropriate Federal bank regulatory agency
may approve the issuance of an obligation that is less
than $500 if such lesser amount is necessary to meet all
of the requirements in the preceding clause except the
maturity requirement or the requirement that scheduled repayments shall be in amounts at least equal to
those made in a previous year; and with respect to
which the appropriate Federal bank regulatory agency
has determined that exigent circumstances require the
issuance of such obligations without regard to the
provisions of this part; or was issued or publicly
offered before June 30, 1970, with an original maturity
of more than two years.
(d) Total outstanding capital notes should not exceed
50 percent of a State member bank's equity capital.
2. In a serial issue, the member bank may offer no note with a
maturity of less than five years.
3. For the purposes of this part, the "appropriate Federal bank
regulatory agency" is the Comptroller of the Currency in the case of
national bank and the Board of Governors in the case of a State
member bank.
Legal Developments
(e) The issuance must be consistent with the Board's
capital adequacy guidelines (Appendix A to Regulation Y, 12 C.F.R. Part 225.)
13. Section 217.157 is redesignated as section 204.130,
and revised to read as follows:
Section 204.130—Eligibility for NOW Accounts
(a) Summary. In response to many requests for rulings, the Board has determined to clarify the types of
entities that may maintain NOW accounts at member
banks.
(b) Individuals.
(1) Any individual may maintain a NOW account
regardless of the purposes that the funds will serve.
Thus, deposits of an individual used in his or her
business including a sole proprietor or an individual
doing business under a trade name is eligible to
maintain a NOW account in the individual's name or
in the " D B A " name. However, other entities organized or operated to make a profit such as corporations, partnerships, associations, business trusts, or
other organizations may not maintain NOW accounts.
(2) Pension funds, escrow accounts, security deposits, and other funds held under various agency
agreements may also be classified as NOW accounts
if the entire beneficial interest is held by individuals
or other entities eligible to maintain NOW accounts
directly. The Board believes that these accounts are
similar in nature to trust accounts and should be
accorded identical treatment. Therefore, such funds
may be regarded as eligible for classification as
NOW accounts.
(c) Nonprofit organizations.
(1) A nonprofit organization that is operated primarily for religious, philanthropic, charitable, educational, political or other similar purposes may maintain a NOW account. The Board regards the
following kinds of organizations as eligible for NOW
accounts under this standard if they are not operated
for profit:
(i) Organizations described in section 501(c)(3)
through (13), and (19) of the Internal Revenue
Code (26 U.S.C. (I.R.C. 1954) section 501(c)(3)
through (13) and (19));
(ii) Political organizations described in section 527
of the Internal Revenue Code (26 U.S.C. (I.R.C.
1954) section 527); and
(iii) Homeowners and condominium owners associations described in section 528 of the Internal
Revenue Code (26 U.S.C. (I.R.C. 1954) section
528), including housing cooperative associations
that perform similar functions.
125
(2) All organizations that are operated for profit are
not eligible to maintain NOW accounts at depository
institutions.
(3) The following types of organizations described in
the cited provisions of the Internal Revenue Code
are among those not eligible to maintain NOW
accounts:
(i) Credit unions and other mutual depository
institutions described in section 501(c)(14) of the
Internal Revenue Code (26 U.S.C. (I.R.C. 1954)
section 501(c)(14));
(ii) Mutual insurance companies described in section 501(c)(15) of the Internal Revenue Code
(26 U.S.C. (I.R.C. 1954) section 501(c)(15));
(iii) Crop financing organizations described in
section 501(c)(16) of the Internal Revenue Code
(26 U.S.C. (I.R.C. 1954) section 501(c)(16));
(iv) Organizations created to function as part of a
qualified group legal services plan described in
section 501(c)(20) of the Internal Revenue Code
(26 U.S.C. (I.R.C. 1954) section 501(c)(20)); or
(v) Farmers' cooperatives described in section
521 of the Internal Revenue Code (26 U.S.C.
(I.R.C. 1954) section 521).
(d) Governmental units. Governmental units are generally eligible to maintain NOW accounts at member
banks. NOW accounts may consist of funds in which
the entire beneficial interest is held by the United
States, any State of the United States, county, municipality, or political subdivision thereof, the District of
Columbia, the Commonwealth of Puerto Rico, American Samoa, Guam, any territory or possession of the
United States, or any political subdivision thereof.
(e) Funds held by a fiduciary. Under current provisions, funds held in a fiduciary capacity (either by an
individual fiduciary or by a corporate fiduciary such as
a bank trust department or a trustee in bankruptcy),
including those awaiting distribution or investment,
may be held in the form of NOW accounts if all of the
beneficiaries are otherwise eligible to maintain NOW
accounts. The Board believes that such a classification
should continue since fiduciaries are required to invest
even temporarily idle balances to the greatest extent
feasible in order to responsibly carry out their fiduciary duties. The availability of NOW accounts provides a convenient vehicle for providing a short-term
return on temporarily idle trust funds of beneficiaries
eligible to maintain accounts in their own names.
(f) Grandfather provision. In order to avoid unduly
disrupting account relationships, a NOW account
established at a member bank on or before August
31, 1981, that represents funds of a nonqualifying entity that previously qualified to maintain a NOW
account may continue to be maintained in a NOW
account.
126 Federal Reserve Bulletin • February 1988
14. Section 217.159 is redesignated as section 204.131,
and revised to read as follows:
Section 204.131—Participation by a depository
institution in the secondary market for its own
time deposits
(a) Background. In 1982, the Board issued an interpretation concerning the effect of a member bank's purchase of its own time deposits in the secondary market
in order to ensure compliance with regulatory restrictions on the payment of interest on time deposits, with
the prohibition against payment of interest on demand
deposits, and with regulatory requirements designed
to distinguish between time deposits and demand
deposits for federal reserve requirement purposes (47
FR 37,878, Aug. 27, 1982). The interpretation was
designed to ensure that the regulatory early withdrawal penalties in Regulation Q used to achieve these
three purposes were not evaded through the purchase
by a member bank or its affiliate of a time deposit of
the member bank prior to the maturity of the deposit.
(b) Because the expiration of the Depository Institutions Deregulation Act (Title II of Pub. L. 96-221) on
April 1,1986, removed the authority to set interest rate
ceilings on deposits, one of the purposes for adopting
the interpretation was eliminated. The removal of the
authority to set interest rate ceilings on deposits required the Board to revise the early withdrawal penalties which were also used to distinguish between
types of deposits for reserve requirement purposes.
Effective April 1, 1986, the Board amended its Regulation D to incorporate early withdrawal penalties
applicable to all depository institutions for this purpose (51 FR 9,629, Mar. 20, 1986). Although the new
early withdrawal penalties differ from the penalties
used to enforce interest rate ceilings, secondary market purchases still effectively shorten the maturities of
deposits and may be used to evade reserve requirements. This interpretation replaces the prior interpretation and states the application of the new early
withdrawal penalties to purchases by depository institutions and their affiliates of the depository institution's time deposits. The interpretation applies only to
situations in which the Board's regulatory penalties
apply.
(c) Secondary market purchases under the rule. The
Board has determined that a depository institution
purchasing a time deposit it has issued should be
regarded as having paid the time deposit prior to
maturity. The effect of the transaction is that the
depository institution has cancelled a liability as opposed to having acquired an asset for its portfolio.
Thus, the depository institution is required to impose
any early withdrawal penalty required by Regulation D
on the party from whom it purchases the instrument by
deducting the amount of the penalty from the purchase
price. The Board recognizes, however, that secondary
market sales of time deposits are often done without
regard to the identity of the original owner of the
deposit. Such sales typically involve a pool of time
deposits with the price based on the aggregate face
value and average rate of return on the deposits. A
depository institution purchasing time deposits from
persons other than the person to whom the deposit
was originally issued should be aware of the parties
named on each of the deposits it is purchasing but
through failure to inspect the deposits prior to the
purchase may not be aware at the time it purchases a
pool of time deposits that it originally issued one or
more of the deposits in the pool. In such cases, if a
purchasing depository institution does not wish to
assess an applicable early withdrawal penalty, the
deposit may be sold immediately in the secondary
market as an alternative to imposing the early withdrawal penalty.
(d) Purchases by Affiliates. On a consolidated basis, if
an affiliate (as defined in section 204.2(q) of Regulation
D) of a depository institution purchases a CD issued
by the depository institution, the purchase does not
reduce their consolidated liabilities and could be accomplished primarily to assist the depository institution in avoiding the requirements of the Board's Regulation D. Because the effect of the early withdrawal
penalty rule could be easily circumvented by purchases of time deposits by affiliates, such purchases
are also regarded as early withdrawals of the time
deposit, and the purchase should be treated as if the
depository institution made the purchase directly.
Thus, the regulatory requirements for early withdrawal penalties apply to affiliates of a depository
institution as well as to the institution itself.
(e) Depository institution acting as broker. The Board
believes that it is permissible for a depository institution to facilitate the secondary market for its own time
deposits by finding a purchaser for a time deposit that
a customer is trying to sell. In such instances, the
depository institution will not be paying out any of its
own funds, and the depositor does not have a guarantee that the depository institution will actually be able
to find a buyer.
(f) Third-party market-makers. A depository institution may also establish and advertise arrangements
whereby an unaffiliated third party agrees in advance
to purchase time deposits issued by the institution.
The Board would not regard these transactions as
inconsistent with the purposes that the early withdrawal penalty is intended to serve unless a depository
institution pays a fee to the third party purchaser as
compensation for making the purchases or to remove
Legal Developments
the risk from purchasing the deposits. In this regard,
any interim financing provided to such a third party by
a depository institution in connection with the institution's secondary market activity involving the institution's time deposits must be made substantially on the
same terms, including interest rates and collateral, as
those prevailing at the same time for comparable
transactions with other similarly situated persons and
may not involve more than the normal risk of repayment.
(g) Reciprocal arrangements. Finally, while a depository institution may enter into an arrangement with an
unaffiliated third party wherein the third party agrees
to stand ready to purchase time deposits held by the
depository institution's customers, the Board will regard a reciprocal arrangement with another depository
institution for purchase of each other's time deposits
as a circumvention of the early withdrawal penalty
rule and the purposes it is designed to serve.
15. Sections 217.101, 217.103, 217.105,
through 217.112, 217.114 through 217.121,
217.131 through 217.133, 217.135, 217.136,
through 217.141, 217.144, 217.150, 217.152,
217.156, 217.158, and 217.160 are removed.
217.106
217.124,
217.139
217.155,
16. Sections 217.113, 217.148, and 217.151 are redesignated as sections 217.601, 217.602, and 217.603,
respectively.
17. Section 217.134 is redesignated and revised as
section 217.301 as follows:
Section 217.301—Interest on time deposit
falling due on holiday
(a) After the date of "maturity" of any time deposit,
such deposit is a demand deposit, and no interest may
be paid thereon for any period subsequent to the date
of maturity unless the contract provides for an extension of up to 10 calendar days as per footnote 1 to
Regulation Q.
(b) The date on which an obligation is due and payable
is, of course, determined by the terms of the contract
subject to State law, and in most jurisdictions an
obligation falling due on a Saturday, Sunday or a
holiday comes due on the next succeeding business
day. Under Regulation Q, the "maturity" of a time
certificate is the day it is legally due and payable; and
the funds represented thereby do not become a demand deposit until after that date. Accordingly, where
a certificate by its terms falls due on a Saturday,
Sunday or a holiday and under State law is due and
payable on the next succeeding business day, this Part
217 would not preclude payment of interest on the
127
deposit until and including the day on which it is so
payable.
18. Section 217.147 is redesignated and revised as
section 217.302 as follows:
Section 217.302—Premiums on deposits
(a) Section 19(i) of the Federal Reserve Act and
section 217.3 of Regulation Q prohibits a member bank
from paying interest on a demand deposit. Premiums,
whether in the form of merchandise, credit, or cash,
given by a member bank to a depositor will be regarded as an advertising or promotional expense
rather than a payment of interest if:
(1) The premium is given to a depositor only at the
time of the opening of a new account or an addition
to, or renewal of, an existing account;
(2) no more than two premiums per account are
given within a 12-month period; and
(3) the value of the premium or, in the case of
articles of merchandise, the total cost (including
taxes, shipping, warehousing, packaging, and handling costs) does not exceed $10 for deposits of less
than $5,000 or $20 for deposits of $5,000 or more.
(b) The costs of premiums may not be averaged. The
member bank should retain sufficient supporting documentation showing that the total cost of a premium,
including shipping, warehousing, packaging, and handling costs, does not exceed the applicable $10/$20
limitations and that no portion of the total cost of any
premium has been attributed to development, advertising, promotional, or other expenses. A member
bank is not permitted directly or indirectly to solicit or
promote deposits from customers on the basis that the
funds will be divided into more than one account by
the institution for the purpose of providing more than
two premiums per deposit within a 12-month period.
19. Section 217.161 is redesignated and revised as
section 217.201 as follows:
Section 217.201—Repurchase agreements
involving shares of a money market mutual
fund whose portfolio consists wholly of United
States Treasury and Federal agency securities
Such a repurchase agreement is not a "deposit" for
purposes of Regulations D and Q. For the text of this
interpretation, see the interpretations of the Board's
Regulation D at 12 C.F.R. 204.124. A related interpretation also appears in Regulation H—Membership of
128
Federal Reserve Bulletin • February 1988
State Banking Institutions in the Federal Reserve
System at 12 C.F.R. 208.123.
*
AMENDMENT
*
*
*
TO REGULATIONS
*
F AND H
The Board of Governors is amending 12 C.F.R. Part
206, its Regulation F, and 12 C.F.R. Part 208, its
Regulation H, issued pursuant to section 12(i) of the
Securities Exchange Act of 1934, as amended ("1934
Act"). The amendment provides that State member
banks required by sections 12(b) and 12(g) of the 1934
Act ("registered State member banks") to file certain
information with the Board must do so on the forms
prescribed by the Securities and Exchange Commission ("SEC") for other entities subject to reporting
requirements under the 1934 Act. The amendment
rescinds the Board's present regulation dealing with
disclosures by registered State member banks under
the 1934 Act, Regulation F, and adds the new securities disclosure requirement to Regulation H, which
governs the activities of State member banks generally. The amendment will also permit, but not require,
a registered State member bank with no foreign offices
and total assets of $150 million or less to substitute the
financial statements from its quarterly report of condition filed with the Board (Federal Financial Institutions Examination Council Forms 033 or 034) for the
financial statements normally required on SEC Form
10-Q.
Effective for all filings submitted after January 1,
1988, the Board amends 12 C.F.R Part 206 and
12 C.F.R. Part 208 as follows:
Part 206—Removed and Reserved
Part 208—Membership of State Banking
Institutions in the Federal Reserve System
1. The authority citation for Part 208 is revised to read
as follows:
Authority: 12 U.S.C. §§ 248, 321-338, 486, 1814, 3907,
3909; 15 U.S.C. § 781(i).
2. Section 208.16 is added to read as follows:
Section 208.16—Reporting requirements for
State member banks subject to the Securities
Exchange Act of 1934
(a) Filing requirements. Except as otherwise provided
in this section, a State member bank the securities of
which are subject to registration pursuant to section
12(b) or section 12(g) of the Securities Exchange Act
of 1934 (the "1934 Act") (15 U.S.C. §§ 781(b) and (g))
shall comply with the rules, regulations and forms
adopted by the Securities and Exchange Commission
("Commission") pursuant to sections 12, 13, 14(a),
14(c), 14(d), 14(f) and 16 of the 1934 Act (15 U.S.C.
§§ 781, 78m, 78n(a), (c), (d), (f) and 78(p). The term
"Commission" as used in those rules and regulations
shall with respect to securities issued by State member
banks be deemed to refer to the Board unless the
context otherwise requires.
(b) Elections permitted of State member banks with
total assets of $150 million or less.
(1) Notwithstanding paragraph (a) of this section or
the rules and regulations promulgated by the Commission pursuant to the 1934 Act, a State member
bank that has total assets of $150 million or less as of
the end of its most recent fiscal year and no foreign
offices may elect to substitute for the financial
statements required by the Commission's Form
10-Q the balance sheet and income statement from
the quarterly report of condition required to be filed
by such bank with the Board under section 9 of the
Federal Reserve Act (12 U.S.C. § 324) (Federal
Financial Institutions Examination Council Forms
033 or 034).
(2) A State member bank may not elect to file
financial statements from its quarterly report of
condition pursuant to paragraph (1) if the amounts
reported for net income, total assets or total equity
capital in those statements, which are prepared on
the basis of federal bank regulatory reporting standards, would differ materially from such amounts
reported in financial statements prepared in accordance with generally accepted accounting principles
("GAAP").
(3) A State member bank qualifying for and electing
to file financial statements from its quarterly report
of condition pursuant to paragraph (1) in its Form
10-Q shall include earnings per share or net loss per
share data prepared in accordance with GAAP and
disclose any material contingencies as required by
Article 10 of the Commission's Regulation S-X (15
C.F.R. § 210.10-01), in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of Form 10-Q.
(c) Filing instructions, inspection of documents, and
nondisclosure of certain information filed.
(1) All papers required to be filed with the Board
pursuant to the 1934 Act or regulations thereunder
shall be submitted to the Division of Banking Supervision and Regulation, Board of Governors of the
Federal Reserve System, 20th Street and Constitution Avenue, N.W., Washington, D.C. 20551. Material may be filed by delivery to the Board, through
the mails, or otherwise. The date on which papers
are actually received by the Board shall be the date
Legal Developments
of filing thereof if all of the requirements with
respect to the filing have been complied with.
(2) N o filing fees specified by the Commission's
rules shall be paid to the Board.
(3) Copies of the registration statement, definitive
proxy solicitation materials, reports and annual reports to shareholders required by this section (exclusive of exhibits) will be available for public
inspection at the Board's offices in Washington,
D.C., as well as at the Federal Reserve Banks of
New York, Chicago, and San Francisco and at the
Reserve Bank in the district in which the reporting
bank is located.
(4) Any person filing any statement, report, or
document under the 1934 Act may make written
objection to the public disclosure of any information
contained therein in accordance with the procedure
set forth below:
(i) The person shall omit from the statement,
report, or document, when it is filed, the portion
thereof that the person desires to keep undisclosed (hereinafter called the confidential portion). The person shall indicate at the appropriate
place in the statement, report, or document that
the confidential portion has been so omitted and
filed separately with the Board.
(ii) The person shall file with the copies of the
statement, report, or document filed with the
Board:
(A) as many copies of the confidential portion,
each clearly marked
"CONFIDENTIAL
TREATMENT", as there are copies of the
statement, report, or document filed with the
Board. Each copy of the confidential portion
shall contain the complete text of the item and,
notwithstanding that the confidential portion
does not constitute the whole of the answer, the
entire answer thereto; except that in case the
confidential portion is part of a financial statement or schedule, only the particular financial
statement or schedule need be included. All
copies of the confidential portion shall be in the
same form as the remainder of the statement,
report, or document; and
(B) an application making objection to the disclosure of the confidential portion. Such application shall be on a sheet or sheets separate
from the confidential portion, and shall
(1) identify the portion of the statement, report, or
document that has been omitted,
(2) include a statement of the grounds of objection,
and
(3) include the name of each exchange, if any, with
which the statement, report, or document is filed.
The copies of the confidential portion and the appli
129
cation filed in accordance with this subparagraph
shall be enclosed in a separate envelope marked
"CONFIDENTIAL TREATMENT"
and addressed to Secretary, Board of Governors of the
Federal Reserve System, Washington, D.C. 20551.
(iii) Pending the determination by the Board on
the objection filed in accordance with this paragraph, the confidential portion will not be disclosed by the Board.
(iv) If the Board determines that the objection
shall be sustained, a notation to that effect will be
made at the appropriate place in the statement,
report, or document.
(v) If the Board determines that the objection shall
not be sustained because disclosure of the confidential portion is in the public interest, a finding
and determination to that effect will be entered
and notice of the finding and determination will be
sent by registered or certified mail to the person.
(vi) If the Board determines that the objection
shall not be sustained pursuant to paragraph
(c)(4)(v), the confidential portion shall be made
available to the public:
(A) 15 days after notice of the Board's determination not to sustain the objection has been
given as required by paragraph (c)(4)(v) of this
section, provided that the person filing the
objection has not previously filed with the
Board a written statement that he intends in
good faith to seek judicial review of the finding
and determination;
(B) 60 days after notice of the Board's determination not to sustain the objection has been
given as required by paragraph (c)(4)(v) of this
section and the person filing the objection has
filed with the Board a written statement that he
intends to seek judicial review of the finding and
determination but has failed to file a petition for
judicial review of the Board's determination; or
(C) upon final judicial determination, if adverse
to the party filing the objection.
(vii) If the confidential portion is made available to
the public, a copy thereof shall be attached to
each copy of the statement, report, or document
filed with the Board.
AMENDMENT
TO REGULATION
T
The Board of Governors is amending 12 C.F.R Part
220, its Regulation T, to permit broker-dealers to aid
in the exercise of company stock options owned by
employees of the company, its subsidiaries, or affiliates. In lieu of the securities to be received upon
exercise, the amendment will allow broker-dealers to
130 Federal Reserve Bulletin • February 1988
accept a fully endorsed employee stock option and
instructions to the issuer to deliver the securities to the
broker-dealer.
Effective January 25, 1988, the Board amends
12 C.F.R Part 220 as follows:
1. The authority citation for Part 220 continues to read
as follows:
Authority:
78w.
Part 226—Truth in Lending
1. The authority citation for 12 C.F.R. Part 226 continues to read as follows:
Authority: Sec. 105, Truth in Lending Act, as amended
by sec. 605, Pub. L. 96-221, 94 Stat. 170 (15 U.S.C.
1604 et seq.); sec. 1204(c), Competitive Equality
Banking Act, Pub. L. 100-86, 101 Stat. 552.
15 U.S.C. sections 78c, 78g, 78h, 78q, and
2. Section 226.17 is amended by revising paragraph
(b) to read as follows:
2. Part 220 is amended by adding a new paragraph (4)
to 220.3(e) to read as follows:
Section 220.3—General Provisions
(e) Receipt of funds or securities.
(4) A creditor may accept, in lieu of securities, a
properly executed exercise notice for a stock option
issued by the customer's employer and instructions
to the issuer to deliver the resulting stock to the
creditor. Prior to acceptance, the creditor must
verify that the issuer will deliver the securities
promptly and the customer must designate the account into which the securities are to be deposited.
Section 226.17—General Disclosure
Requirements
(b) Time of disclosures. The creditor shall make disclosures before consummation of the transaction. In
certain residential mortgage transactions, special timing requirements are set forth in § 226.19(a). In certain
variable-rate transactions, special timing requirements
for variable-rate disclosures are set forth in § 226.19(b)
and § 226.20(c). In certain transactions involving mail
or telephone orders or a series of sales, the timing of
disclosures may be delayed in accordance with paragraphs (g) and (h) of this section.
3. Section 226.18 is amended by revising footnote 43
and paragraph (f) to read as follows:
Section 226.18—Content of Disclosures
AMENDMENT
TO REGULATION
Z
The Board of Governors is amending 12 C.F.R. Part
226, its Regulation Z, to require creditors to provide
more information about the variable-rate feature of
closed-end adjustable-rate mortgages than is currently
required under Regulation Z. The amendments require
creditors to distribute to consumers an educational
booklet about adjustable-rate mortgages, and to provide a more detailed description of the variable-rate
feature, along with an historical example. The information must be provided at the time an application
form is given to the consumer or before the consumer
pays a nonrefundable fee, whichever is earlier. These
revisions are intended to address concerns regarding
the adequacy of information given to consumers applying for adjustable-rate mortgages and regarding the
creditor burden of duplicative federal regulations.
Effective December 28, 1987, but optional compliance until October 1, 1988, the Board amends
12 C.F.R. Part 226 as follows:
(f) Variable rate.
(1) If the annual percentage rate may increase after
consummation in a transaction not secured by the
consumer's principal dwelling or in a transaction
secured by the consumer's principal dwelling with a
term of one year or less, the following disclosures: 43
(i) The circumstances under which the rate may
increase.
(ii) Any limitations on the increase.
(iii) The effect of an increase.
(iv) An example of the payment terms that would
result from an increase.
(2) If the annual percentage rate may increase after
consummation in a transaction secured by the consumer's principal dwelling with a term greater than
one year, the following disclosures:
43. Information provided in accordance with §§ 226.18(f)(2) and
226.19(b) may be substituted for the disclosures required by paragraph
(f)(1) of this section.
Legal Developments
(i) The fact that the transaction contains a variable-rate feature.
(ii) A statement that variable-rate disclosures
have been provided earlier.
4. Section 226.22 is amended by redesignating footnote 45a as 45d.
5. Section 226.19 is revised to read as follows:
Section 226.19—Certain Residential Mortgage
and Variable-Rate Transactions
(a) Residential
mortgage
transactions
subject to
RES PA.
(1) Time of disclosure. In a residential mortgage
transaction subject to the Real Estate Settlement
Procedures Act (12 U.S.C. 2601 et seq.) the creditor
shall make good faith estimates of the disclosures
required by § 226.18 before consummation, or
shall deliver or place them in the mail not later than
three business days after the creditor receives the
consumer's written application, whichever is earlier.
(2) Redisclosure required. If the annual percentage
rate in the consummated transaction varies from the
annual percentage rate disclosed under § 226.18(e)
by more than Vs of 1 percentage point in a regular
transaction or more than lA of 1 percentage point in
an irregular transaction, as defined in § 226.22, the
creditor shall disclose the changed terms no later
than consummation or settlement.
(b) Certain variable-rate transactions.45a If the annual
percentage rate may increase after consummation in a
transaction secured by the consumer's principal dwelling with a term greater than one year, the following
disclosures must be provided at the time an application
form is provided or before the consumer pays a
non-refundable fee, whichever is earlier: 45b
(1) The booklet titled Consumer Handbook on Adjustable Rate Mortgages published by the Board
and the Federal Home Loan Bank Board, or a
suitable substitute.
(2) A loan program disclosure for each variable-rate
program in which the consumer expresses an inter-
45a. Information provided in accordance with variable-rate regulations of other federal agencies may be substituted for the disclosures
required by paragraph (b) of this section.
45b. Disclosures may be delivered or placed in the mail not later
than three business days following receipt of a consumer's application
when the application reaches the creditor by telephone, or through an
intermediary agent or broker.
131
est. The following disclosures, as applicable, shall
be provided:
(i) The fact that the interest rate, payment, or term
of the loan can change.
(ii) The index or formula used in making adjustments, and a source of information about the
index or formula.
(iii) An explanation of how the interest rate and
payment will be determined, including an explanation of how the index is adjusted, such as by the
addition of a margin.
(iv) A statement that the consumer should ask
about the current margin value and current interest rate.
(v) The fact that the interest rate will be discounted, and a statement that the consumer
should ask about the amount of the interest rate
discount.
(vi) The frequency of interest rate and payment
changes.
(vii) Any rules relating to changes in the index,
interest rate, payment amount, and outstanding
loan balance including, for example, an explanation of interest rate or payment limitations, negative amortization, and interest rate carryover.
(viii) An historical example, based on a $10,000
loan amount, illustrating how payments and the
loan balance would have been affected by interest
rate changes implemented according to the terms
of the loan program. The example shall be based
upon index values beginning in 1977 and be updated annually until a 15-year history is shown.
Thereafter, the example shall reflect the most
recent 15 years of index values. The example shall
reflect all significant loan program terms, such as
negative amortization, interest rate carryover,
interest rate discounts, and interest rate and payment limitations, that would have been affected
by the index movement during the period.
(ix) An explanation of how the consumer may
calculate the payments for the loan amount to be
borrowed based on the most recent payment
shown in the historical example.
(x) The maximum interest rate and payment for a
$10,000 loan originated at the most recent interest
rate shown in the historical example assuming the
maximum periodic increases in rates and payments under the program; and the initial interest
rate and payment for that loan.
(xi) The fact that the loan program contains a
demand feature.
(xii) The type of information that will be provided
in notices of adjustments and the timing of such
notices.
(xiii) A statement that disclosure forms are avail-
132 Federal Reserve Bulletin • February 1988
able for the creditor's other variable-rate loan
programs.
6. Section 226.20 is amended by adding paragraph (c)
to read as follows:
(b)(7) Pursuant to section 262.3(i) of this chapter
(Rules of Procedure) to determine whether or not to
grant a request for reconsideration or whether to
deny a request for stay of the effective date of any
action taken by the Board with respect to an action
as provided in that part.
Section 226.20—Subsequent Disclosure
Requirements
ORDERS
45c
(c) Variable-rate adjustments.
An adjustment to the
interest rate with or without a corresponding adjust
ment to the payment in a variable-rate transaction
(1) The current and prior interest rates.
(2) The index values upon which the current and
prior interest rates are based.
(3) The extent to which the creditor has foregone
any increase in the interest rate.
(4) The contractual effects of the adjustment, including the payment due after the adjustment is made,
and a statement of the loan balance.
(5) The payment, if different from that referred to in
paragraph (c)(4) of this section, that would be required to fully amortize the loan at the new interest
rate over the remainder of the loan term.
AMENDMENT
TO RULES
DELEGATION
OF
REGARDING
AUTHORITY
The Board of Governors is amending 12 C.F.R. Part
265, its Rules Regarding Delegation of Authority, to
authorize the Board's General Counsel to deny a
request for stay of the effective date of a Board order.
The Board itself would retain sole discretion to grant a
request for staff of the effectiveness of any decision.
Effective for any request for stay pending on December 28, 1987, or received thereafter.
Part 265—Rules Regarding Delegation of
Authority
1. The authority citation for 12 C.F.R. Part 265 continues to read as follows:
Authority: Sec. 11(K), 38 Stat. 261 and 80 Stat. 1314
(12 U.S.C. 248(k)).
2. Section 265.2(b)(7) is revised to read as follows:
45c. Information provided in accordance with variable-rate subsequent disclosure regulations of other federal agencies may be substituted for the disclosure required by paragraph (c) of this section.
COMPANY
ISSUED
UNDER
THE BANK
HOLDING
ACT
Orders Issued Under Section 3 of the Bank
Holding Company Act
Cardinal Bancorp II, Inc.
Washington, Missouri
Order Approving
Company
Formation of a Bank
Holding
Cardinal Bancorp II, Inc., Washington, Missouri
("Cardinal"), has applied for the Board's approval
under section 3(a)(1) of the Bank Holding Company
Act, as amended (12 U.S.C. § 1842(a)(1)) ("Act"), to
become a bank holding company by acquiring all of the
voting shares of United Bank of Union, Union, Missouri ("Bank").
Notice of the application, affording interested persons an opportunity to submit comments, has been
duly published (52 Federal Register 38,014 (1987)).
The time for filing comments has expired, and the
Board has considered the application and all comments received in light of the factors set forth in
section 3(c) of the Act.
Cardinal, a non-operating corporation with no subsidiaries, was organized for the purpose of becoming a
bank holding company by acquiring Bank, which holds
deposits of $92.8 million, representing less than one
percent of the deposits in commercial banking organizations in Missouri. 1 Several principals of Cardinal are
currently affiliated with two other commercial banking
organizations in Missouri. Upon consummation, Cardinal's principals would control less than one percent
of the deposits in commercial banks in the state.
Accordingly, consummation of the proposal would not
increase significantly the concentration of banking
resources in Missouri.
Cardinal's principals control the Bank of Washington,
which competes directly with Bank in the Washington,
1. All banking data are as of December 31, 1986.
Legal Developments
Missouri banking market. 2 Bank of Washington is the
largest commercial banking organization in the market,
controlling deposits of $111.8 million, representing approximately 22.8 percent of the total deposits in commercial banks in the market. Bank is the second largest
commercial banking organization in the market and
controls approximately 19.0 percent of the total deposits
in commercial banks in the market. Upon consummation, Cardinal's principals would control $204.6 million
in deposits, representing approximately 41.7 percent of
the deposits in commercial banks in the market. The
four-firm concentration ratio for the market is 70.3 percent, and the Herfindahl-Hirschman Index ("HHI") for
the market would increase by 863 points to 2355, upon
consummation of this proposal. 3
Although consummation of this proposal would eliminate some existing competition between Bank of Washington and Bank in the Washington banking market,
numerous other commercial banks, including offices of
some of the largest institutions in the state, would
continue to operate in the market after consummation of
this proposal. In addition, the Board has considered the
presence of thrift institutions in the banking market in its
analysis of this proposal. The Board previously has
indicated that thrift institutions have become, or have
the potential to become, major competitors of commercial banks. 4 Thrift institutions already exert a considerable competitive influence in the market as providers of
NOW accounts and consumer loans, and several are
engaged in the business of making commercial loans.
Based upon the number, size, market share and commercial lending activities of thrift institutions in the
market, the Board has concluded that thrift institutions
exert a significant competitive influence that mitigates
the anticompetitive effects of this proposal in the Wash-
2. The Washington, Missouri, banking market is approximated by
Franklin County, Missouri, excluding the communities of Pacific and
Berger, plus the community of Dutzow in Warren County, Missouri.
3. Under the revised Department of Justice Merger Guidelines (49
Federal Register 26,823 (June 29, 1984)), any market in which the
post-merger HHI is over 1800 is considered highly concentrated, and
the Department is likely to challenge a merger that increases the HHI
by more than 50 points unless other factors indicate that the merger
will not substantially lessen competition. The Department of Justice
has informed the Board that a bank merger or acquisition is not likely
to be challenged (in the absence of other factors indicating an
anticompetitive effect) unless the post-merger HHI is at least 1800 and
the merger increases the HHI by at least 200 points. The Justice
Department has stated that the higher than normal HHI thresholds for
screening bank acquisitions for anti-competitive effects implicitly
recognizes the competitive effects of limited purpose lenders and
other non-depository financial entities.
4. See, e.g, National City Corporation, 70 FEDERAL RESERVE
BULLETIN 743 (1984); NCNB
Bancorporation,
70 FEDERAL RESERVE
BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL
RESERVE BULLETIN 802 (1983); and First Tennessee National Corporation,
6 9 FEDERAL RESERVE BULLETIN 298 (1983).
133
ington banking market. 5 Accordingly, consummation of
this proposal would not substantially lessen competition
in any banking market.
The financial and managerial resources of Cardinal
and Bank are consistent with approval. Considerations
relating to the convenience and needs of the communities to be served are also consistent with approval.
Based on the foregoing and other facts of record, the
Board has determined that the application should be,
and hereby is, approved. The transaction shall not be
consummated before the thirtieth calendar day following the effective date of this Order, or later than three
months after the effective date of this Order, unless
such period is extended for good cause by the Board or
the Federal Reserve Bank of St. Louis, acting pursuant to delegated authority.
By order of the Board of Governors, effective December 21, 1987.
Voting for this action: Vice Chairman Johnson and Governors Seger, Angell, and Kelley. Absent and not voting:
Chairman Greenspan and Governor Heller.
WILLIAM W . WILES
[SEAL]
Secretary
of the
Board
Orders Issued Under Section 4 of the Bank
Holding Company Act
Bank of New England Corporation
Boston, Massachusetts
Order Approving Application to Underwrite and
Deal in Certain Securities to a Limited Extent and to
Place Commercial
Paper
Bank of N e w England Corporation, Boston, Massachusetts, a bank holding company within the meaning
of the Bank Holding Company Act, 12 U . S . C . § 1841
et seq. ("BHC Act"), has applied for the Board's
approval under section 4(c)(8) of the B H C Act and
section 225.21(a) of the Board's Regulation Y,
12 C.F.R. § 225.21(a), to engage through a wholly
owned subsidiary, B N E Capital Market Company
("Company"), in underwriting and dealing in, on a
limited basis, the following securities:
(1) municipal revenue bonds, including certain industrial development bonds;
(2) 1 - 4 family mortgage-related securities;
5. If 50 percent of the deposits controlled by thrift institutions were
included in the calculation of market concentration, Bank of Washington and Bank would control 18.9 percent and 15.7 percent of total
market deposits, respectively. The HHI would increase by 592 points
to 1669 upon consummation of the proposal.
134 Federal Reserve Bulletin • February 1988
(3) commercial paper; and
(4) consumer-receivable-related securities ("CRRs")
(collectively "bank-ineligible securities").1
Applicant has also applied to act as agent and
adviser to issuers of commerical paper and other
short-term promissory notes in connection with the
placement of such notes with institutional customers. 2
In addition, Applicant proposes to underwrite and deal
in securities that state member banks are permitted to
underwrite and deal in under section 16 of the Banking
Act of 1933 (the "Glass-Steagall Act") (12 U.S.C.
§§ 24 Seventh and 335) (hereinafter "bank-eligible
securities"), as permitted by section 225.25(b)(16) of
Regulation Y (12 C.F.R. § 225.25(b)(16)).
Applicant, with consolidated assets of $27.1 billion,
is the eighteenth largest banking organization in the
nation. It operates 13 subsidiary banks in Rhode
Island, Maine, Massachusetts and Connecticut and
engages in a broad range of permissible nonbanking
activities in the United States. 3
Notice of the application, affording interested parties an opportunity to submit comments, has been
given in accordance with section 3(b) of the BHC Act
(52 Federal Register 43,799 (1987)). The Board received two comments on the proposal. The Securities
Industry Association, a trade association of the investment banking industry, opposes the application for the
reasons stated in its earlier protests to similar applications by Citicorp, J.P. Morgan & Co. Incorporated and
Bankers Trust New York Corporation. The Bank
Capital Markets Association commented in favor of
the application.
The Board has previously determined that underwriting and dealing in bank-eligible securities is closely
related to banking under section 4(c)(8) of the BHC Act.
12 C.F.R. § 225.25(b)(16). In addition, the Board concludes that Company's performance of this activity may
reasonably be expected to result in public benefits which
would outweigh adverse effects under the proper incident to banking standard of section 4(c)(8) of the BHC
Act. Accordingly, Applicant may engage through Com-
1. Applicant proposes to conduct Company's underwriting and
dealing activity in these securities in the same manner and to the same
extent as previously approved by the Board in Citicorp, J.P. Morgan
& Co. Incorporated, Bankers Trust New York Corporation, 73 FEDERAL RESERVE BULLETIN 473 (1987) and Chemical
New York
Corpo-
ration, The Chase Manhattan Corporation, Bankers Trust New York
Corporation, Citicorp, Manufacturers Hanover Corporation, and
Security
Pacific
Corporation,
73 FEDERAL RESERVE BULLETIN 731
(1987).
2. Applicant proposes to conduct Company's commercial paper
placement activity in the same manner and to the same extent as
approved in Bankers Trust New York Corporation, 73 FEDERAL
RESERVE B U L L E T I N 1 3 8 ( 1 9 8 7 ) .
3. Asset data are as of June 30, 1987. Banking data are as of
September 30, 1987.
pany in underwriting and dealing in bank-eligible securities to the extent that state member banks are authorized
by section 16 of the Glass-Steagall Act.
On April 30, the Board approved applications by
Citicorp, J.P. Morgan and Bankers Trust to underwrite and deal in, through their bank-eligible securities
underwriting subsidiaries, 1-4 family mortgagebacked securities, municipal revenue bonds (and certain industrial development bonds) and (except for
Citicorp) commercial paper. 4 The Board concluded
that the underwriting subsidiaries would not be "engaged principally" in underwriting or dealing in securities within the meaning of section 20 of the GlassSteagall Act 5 provided they derived no more than 5
percent of their total gross revenues from underwriting
and dealing in the approved securities over any twoyear period and their underwriting and dealing activities did not exceed 5 percent of the market for each
particular type of security involved. The Board further
found that, subject to the prudential framework of
limitations established in those cases to address the
potential for conflicts of interest, unsound banking
practices or other adverse effects, the proposed underwriting and dealing activities were so closely related to
banking as to be a proper incident thereto within the
meaning of section 4(c)(8) of the BHC Act. On July 14,
the Board subsequently decided that underwriting and
dealing in CRRs is so closely related to banking as to
be a proper incident thereto within the meaning of
section 4(c)(8) of the BHC Act. 6
For the reasons set forth in the Board's Citicorp/
Morgan/Bankers Trust and Chemical Orders, the Board
concludes that Applicant's proposal to engage through
Company in underwriting and dealing in municipal revenue bonds, 7 1-4 family mortgage-related securities,
commercial paper and consumer-receivable-related securities would not result in a violation of section 20 of the
Glass-Steagall Act and is closely related and a proper
incident to banking within the meaning of section 4(c)(8)
of the BHC Act provided Applicant limits Company's
activities as provided in those Orders. Accordingly, the
4. CiticorplMorganlBankers Trust, supra. The Board subsequently
approved similar applications by a number of other bank holding
companies.
5. Section 20 of the Glass-Steagall Act (12 U.S.C. § 377) prohibits
the affiliation of a member bank with "any corporation . . . engaged
principally in the issue, flotation, underwriting, public sale, or distribution at wholesale or retail or through syndicate participation of
stocks, bonds, debentures, notes, or other securities . . . ."
6. Chemical, supra.
7. The industrial development bonds approved in those applications and for Applicant in this case are only those tax exempt bonds in
which the governmental issuer, or the governmental unit on behalf of
which the bonds are issued, is the owner for federal income tax
purposes of the financed facility (such as airports, mass commuting
facilities, and water pollution control facilities). Without further
approval from the Board, Company may underwrite or deal in only
these types of industrial development bonds.
Legal Developments
Board has determined to approve the underwriting application subject to all of the terms and conditions
established in the Citicorp/Morgan/Bankers Trust and
Chemical Orders. The Board hereby adopts and incorporates herein by reference the reasoning and analysis
contained in those Orders.
For the reasons set forth in the Board's Bankers
Trust commercial paper placement Order, the Board
concludes that Applicant's proposal to place commercial paper is also consistent with section 20 of the
Glass-Steagall Act and permissible for bank holding
companies under section 4(c)(8) of the BHC Act,
subject to the prudential limitations of that Order.
The Board's approval of this application extends
only to activities conducted within the limitations of
section 225.25(b)(16) of the Board's Regulation Y and
the CiticorplMorganlBankers
Trust, Chemical and
Bankers Trust Orders, including the Board's reservation of authority to establish additional limitations to
ensure that the subsidiary's activities are consistent
with safety and soundness, conflict of interest and
other relevant considerations under the BHC Act.
Underwriting and dealing in the approved securities in
any manner other than as approved in those Orders8 is
not within the scope of the Board's approval and is not
authorized for Company.
The Board's determination is subject to all of the
conditions set forth in the Board's Regulation Y,
including those in sections 225.4(d) and 225.23(b), and
to the Board's authority to require modification or
termination of the activities of the holding company or
any of its subsidiaries as the Board finds necessary to
assure compliance with the provisions and purposes of
the BHC Act and the Board's regulations and orders
issued thereunder, or to prevent evasion thereof.
The Board notes that Title II of the Competitive
Equality Banking Act of 1987 ("CEBA"), enacted on
August 10, 1987, prohibits the Board from authorizing a
bank holding company to engage in underwriting or
dealing in securities if that approval would require the
determination that the bank holding company would not
be engaged principally in such activities within the meaning of section 20 of the Glass-Steagall Act, unless the
effective date of the Order is delayed until the expiration
of a moratorium time period established under CEBA. 9
Accordingly, the Board has determined to delay the
effective date of this Order with respect to the proposed
8. Company may also provide services that are necessary incidents
to these approved activities. The incidental services should be taken
into account in computing the gross revenue and market share limits
on the underwriting subsidiaries' ineligible underwriting and dealing
activities, to the extent such limits apply to particular incidental
activities.
9. Pub. L. No. 100-86, §§ 201-02, 101 Stat. 552, 582 (1987).
135
underwriting and dealing in bank-ineligible securities
until the moratorium ends on March 1, 1988.
With respect to Applicant's proposed commercial
paper placement activity, the Board in Bankers Trust
ruled that commercial paper placement does not fall
within the terms of the Glass-Steagall Act provided
the activity is conducted within the prudential framework of conditions established by the Board in its
Bankers Trust Order. The Board's determination was
subsequently upheld by the Court of Appeals for the
District of Columbia Circuit and the U.S. Supreme
Court has declined to review the matter. 10 The moratorium in CEBA also covers "any securities activity
not legally authorized in writing prior to March 5,
1987." That provision, however, specifically exempts
"activities in which any bank holding company or
subsidiary or affiliate thereof . . . acts only as an
agent." Since commercial paper placement as proposed by Applicant is an agency activity, the Board
has determined not to delay the effective date of its
approval of that activity.
The Board has also concluded that Applicant's
proposed bank-eligible securities underwriting and
dealing activity does not fall within the terms of the
moratorium. In its CiticorplMorganlBankers
Trust Order, the Board determined that the structure and
Congressional intent of the Glass-Steagall Act make
clear that in light of the express authorization in
section 16 for member banks to underwrite bankeligible securities, the limitation of section 20 against a
member bank affiliate being engaged principally in
underwriting securities does not encompass bankeligible securities. 11 In addition, the Board had approved this activity in writing prior to March 5, 1987. 12
Accordingly, the Board has determined not to delay
the effective date of its approval for that activity.
The Board notes that the SIA has sought judicial
review in the U.S. Court of Appeals for the Second
Circuit of the CiticorplMorganlBankers
Trust Order to
which this Order pertains, as well as subsequent Board
Orders approving the bank-ineligible securities underwriting applications of a number of other bank holding
companies. The Board notes that the court has stayed
the effectiveness of these Board Orders pending judicial review. In light of the pendency of this litigation,
the Board has determined that this Order should be
stayed with respect to the bank-ineligible securities
underwriting and dealing activity for such time as the
stay of the prior decisions is effective.
10. Securities Industry Association v. Board of Governors, 807
F.2d 1052 (D.C. Cir. 1986), cert, denied, 55 U.S.L.W. 3849 (1987).
11. CiticorplMorganlBankers Trust, supra, at 478-481.
12. The Board added underwriting and dealing in bank-eligible
securities to its list of permissible nonbanking activities for bank
holding companies in 1984. 49 Federal Register 818 (1984).
136 Federal Reserve Bulletin • February 1988
By order of the Board of Governors, effective December 14, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Heller, and Kelley. Dissenting in
part: Governor Angell.
JAMES M C A F E E
[SEAL]
STATEMENT
CONCURRING
Associate
OF GOVERNOR
IN PART
Secretary
of the Board
ANGELL
AND DISSENTING
IN
PART
While I join the majority in approving Applicant's
proposal to place commerical paper, I regret I am
unable to join the majority in approving Applicant's
proposal to underwrite and deal in bank-ineligible
securities.
As I have stated previously, the regret reflects the
fact that, as a matter of policy, I support the idea that
affiliates of bank holding companies underwrite and
deal in commercial paper, municipal revenue bonds,
1 - 4 family mortgage-related securities and consumerreceivable-related securities, the activities involved in
the Board's decision. 1 Moreover, I agree generally
with the nature of the limitations placed upon the
activities in the Board decision, assuming the threshform
old question of their legality in the particular
proposed can be answered affirmatively.
My point of difference involves precisely that question of law. Section 20 of the Glass-Steagall Act
provides that no member bank may be affiliated with
any corporation engaged principally in the underwriting of stocks, bonds, debentures, notes or other securities. I believe the plain words of the statute, read
together with earlier Supreme Court and circuit opinions, as I understand them, indicate that government
securities are indeed "securities" within the meaning
of section 20. Consequently, it appears to me that the
application approved here, as a matter of law, involves
affiliations of member banks with corporations that are
in fact not only "principally engaged" in dealing and
underwriting in securities, but in fact would be wholly
engaged in such activities, thereby exceeding the
authority of law. 2
1. I have joined earlier decisions of the Board authorizing some of
these activities in non-securities affiliates.
2. Without elaborating on the legal debate reviewed in the Board's
Order, I wish to reiterate that I fully support earlier Board decisions
allowing the underwriting and dealing of government securities to take
place in an affiliate. My point of disagreement is whether that
authoritycan, in effect, be used to bootstrap securities activities that
Congress clearly wished to restrain or prohibit.
My point is not merely one of legal formalisms. The
interpretation adopted by the majority would appear to
make feasible, as a matter of law if not Board policy,
the affiliations of banks with some of the principal
underwriting firms or investment houses of the country. Such a legal result, I feel, is inconsistent with the
intent of Congress in passing the Glass-Steagall Act.
As the Board as a whole has repeatedly urged, the
plain and desirable remedy to this legal and substantive morass is a fresh Congressional mandate. I urge
the Congress to provide straightforwardly the authority for bank holding companies to conduct, with appropriate safeguards, the kinds of activities permitted
by the Board in its decision, the practical import of
which is confined to a relative handful of large bank
holding companies with substantial government securities operations.
December 14, 1987
Centerre Bancorporation
St. Louis, Missouri
Order Approving Acquisition of a Company
in Employee Benefits Consulting
Services
Engaged
Centerre Bancorporation, St. Louis, Missouri, a bank
holding company within the meaning of the Bank
Holding Company Act (12 U . S . C . § 1841 et seq.)
("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 225.23 of the Board's Regulation Y (12 C.F.R.
§ 225.23) to acquire through its subsidiary, Benefit
Plan Services, Inc., Maryland Heights, Missouri
("BPS"), substantially all the assets and assume certain liabilities of Reed Employee Benefit Services,
Inc., Maryland Heights, Missouri ("Company"), a
company engaged in employee benefits consulting
services.
Notice of the application, affording interested persons an opportunity to submit comments, has been
duly published (52 Federal Register 34,844 (1987)).
The time for filing comments has expired, and the
Board has considered the application and all comments received in light of the public interest factors set
forth in section 4(c)(8) of the Act.
Applicant, a bank holding company by virtue of its
ownership of 13 commercial banks in Missouri, controls total deposits of approximately $4 billion, representing 9.4 percent of the deposits in commercial
banks in Missouri. 1 Applicant also engages in certain
nonbanking activities, such as providing credit related
insurance and trust company and brokerage services.
1. Data are as of December 31, 1986.
Legal Developments
Company provides a full range of employee benefits
consulting services including design, implementation,
administration, communication, and other services
related to the establishment or enhancement of employee benefit plans. The Board has previously approved applications by bank holding companies, including Applicant, to provide such consulting
services. 2 Thus, the Board has concluded that the
activity of providing employee benefits consulting
services is closely related to banking.
In order to approve this application, the Board must
also find that the performance of the proposed activity
can reasonably be expected to produce benefits to the
public, such as greater convenience, increased competition, or gains in efficiency, that outweigh possible
adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of
interests, or unsound banking practices.
Both Company and BPS provide employee benefits
consulting services and conduct their business primarily in the St. Louis, Missouri, metropolitan area. The
market for such services is national in scope and is
characterized by relative ease of entry, which is reflected in the numerous existing and potential competitors for the provision of such services. In addition,
both Applicant's and Company's market shares are de
minimis, and the combined organization would remain
a relatively small provider of such services. Accordingly, the Board concludes that the proposal would not
have any significant adverse effect on existing competition in the relevant market.
There is no evidence in the record to indicate that
Applicant's proposed transaction would lead to any
undue concentration of resources, decreased or unfair
competition, unsound banking practices, or other adverse effects. Indeed, the combination of services
currently offered by Applicant's trust company subsidiary in tandem with BPS's employee benefits consulting activities should provide enhanced convenience for Company's customers and result in gains in
efficiency. 3 Public benefit factors, therefore, favor
approval of the proposal.
Based on the foregoing and all the facts of record,
the Board has determined that the balance of public
interest factors it is required to consider under section
4(c)(8) is favorable. The financial and managerial re-
2. See, e.g., Centerre Bancorporation,
73 FEDERAL RESERVE BULLETIN 365 (1987); BankVermont
Corporation,
72 FEDERAL RESERVE
BULLETIN 377 (1986); Norstar Bancorp, Inc., 72 FEDERAL RESERVE
BULLETIN 729 (1986).
3. Clients currently have the option to use any component of
Applicant's employee benefits consulting services individually as well
as the entire package of services, and Applicant has committed to
continue to avoid tying any employee benefits consulting services to
the purchase of the entire employee benefits package or to any other
service offered by Applicant or its subsidiaries.
137
sources of Applicant also are consistent with approval.
Accordingly, the application is hereby approved. This
determination is subject to the conditions set forth in
sections 225.4(d) and 225.23(b)(3) of the Board's Regulation Y, 12 C.F.R. §§ 225.4(d) and 225.23(b)(3). The
approval is also subject to the Board's authority to
require modification or termination of the activities of
the 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. This transaction shall not be
consummated later than three months after the effective date of this Order, unless such period is extended
for good cause by the Board or by the Federal Reserve
Bank of St. Louis, pursuant to delegated authority.
By order of the Board of Governors, effective December 7, 1987.
Voting for this action: Chairman Greenspan and Governors
Seger, Angell, and Kelley. Absent and not voting: Governors
Johnson and Heller.
JAMES M C A F E E
[SEAL]
Associate
Secretary
of the
Board
The Hongkong and Shanghai Banking
Corporation
Hong Kong
Kellet N.V.,
Curacao, Netherlands Antilles
HSBC Holdings B.V.
Amsterdam, The Netherlands
Marine Midland Banks, Inc.
Buffalo, New York
Order Approving Acquisition
Credit
Corporation
of Shares in Subaru
Marine Midland Banks, Inc., Buffalo, N e w York
("Marine Midland"), together with its parent companies, The Hongkong and Shanghai Banking Corporation, Hong Kong ("HSBC"); Kellet N . V . , Curacao,
Netherlands Antilles ("Kellet"); and H S B C Holdings
B.V., Amsterdam, The Netherlands ("Holdings"), all
bank holding companies within the meaning of the
Bank Holding Company Act (12 U . S . C . § 1841 etseq.)
("BHC Act"), have applied for the Board's approval
pursuant to section 4(c)(8) of the BHC Act (12 U . S . C .
§ 1843(c)(8)) and section 225.23(a)(1) of Regulation Y
(12 C.F.R. § 225.23(a)(1)) to acquire through its
wholly owned subsidiary, Marine Midland Automo-
138
Federal Reserve Bulletin • February 1988
tive Financial Corporation, 50 percent of the voting
shares of Subaru Credit Corporation, Buffalo, New
York ("Company"), a de novo joint venture. The
remaining 50 percent of Company's shares would be
owned by Subaru Financial Services, Inc., a wholly
owned captive finance company subsidiary of Subaru
of America, Inc., Cherry Hill, New Jersey
("Subaru").
Company would engage on a nationwide basis in
providing inventory financing of new and used Subaru
motor vehicles and other used motor vehicles for
Subaru dealers, retail financing of motor vehicle sales
originated by Subaru dealers, and working capital and
capital equipment financing for Subaru dealers. Company would also engage in financing of motor vehicles
lease operations of Subaru dealers in New York,
Illinois, Utah and Colorado. Company may also engage in leasing of motor vehicles by acquiring leases
originated by Subaru dealers. These activities have
been determined by the Board to be closely related to
banking and permissible for bank holding companies
(12 C.F.R. § 225.25(b)(1) and (5)).
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (52 Federal Register 34,716 (1987)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the public interest factors set forth in
section 4(c)(8) of the BHC Act.
HSBC, with total consolidated worldwide assets of
$91.7 billion, is the 31st largest banking organization in
the world. 1 Marine Midland's lead bank, Marine Midland Bank, N . A . , Buffalo, New York ("MM Bank"),
with total domestic deposits of $13.6 billion, is the
sixth largest commercial bank in the state of New
York. 2
HSBC, Kellet, Holdings and their subsidiaries other
than Marine Midland do not engage in motor vehicle
financing or leasing in the United States to any significant extent. Marine Midland and its subsidiaries do
engage in motor vehicle sales financing and motor
vehicle lease financing generally, but not in association
with any motor vehicle manufacturer or distributor.
Marine Midland originated approximately $2.8 billion
in dealer inventory financing, $1.8 billion in retail sales
financing, and $678 million in lease financing in 1986.
Subaru is a subsidiary of Fuji Heavy Industries,
Ltd. ("Fuji"), a diversified Japanese manufacturer
with sales of $4.3 billion in 1986. Fuji owns 49 percent
of the outstanding voting stock of Subaru with the
remaining 51 percent widely held. Fuji manufactures
1. Worldwide banking data are as of December 31, 1986.
2. New York banking data are as of June 30, 1987.
the Subaru motor vehicles that are marketed and
distributed by Subaru. Subaru had net sales of $1
billion in the first half of 1987 and controls approximately 2 percent of the U.S. market for automobile
sales. Subaru, through SFC and its subsidiary, Subaru
Leasing Corporation, engages in lease financing of
Subaru motor vehicles, originating $7.3 million in lease
financing in 1986. Subaru and its subsidiaries do not
engage to any significant extent in any other lending
activities.
Subaru and its subsidiaries currently do not compete
to any significant extent in the activities Company will
be engaged in. Applicants currently do not engage to
any significant extent in the sales financing or lease
financing of Subaru motor vehicles. Further, Marine
Midland through its subsidiaries other than Company
will continue to engage in motor vehicle financing
activities after consummation of this proposal, although it will not separately solicit new business from
Subaru dealers and customers. The proposed joint
venture, therefore, will not eliminate Marine Midland
or any other entity from competing in the motor
vehicle finance industry.
The motor vehicle finance industry is relatively
unconcentrated with numerous competitors nationwide. There are numerous banks, thrift institutions,
credit unions, captive and independent finance companies, and other entities engaged in extending motor
vehicle sales financing and lease financing in the
United States. Accordingly, consummation of this
proposal is not expected to result in any significant
adverse competitive effect, either on existing or potential competition, or in the concentration of resources
in the motor vehicle finance industry.
In the past, the Board has expressed concern that a
joint venture relationship such as this one, involving a
large banking organization and a large nonbanking
firm, could lead to a matrix of relationships that could
undermine the legally mandated separation between
banking and commerce. 3
However, Marine Midland points to several aspects
of its proposal which mitigate against this result.
Subaru and Marine Midland have signed an agreement
which provides that Company will not expand any new
activities without Marine Midland's knowledge and
consent as well as prior authorization from the Federal
Reserve System. The agreement does not place any
limits on the activities of Subaru or Marine Midland,
other than on the independent solicitation of business
from Subaru dealers by Marine Midland. Subaru and
3. Amsterdam-Rotterdam
LETIN 8 3 5 ( 1 9 8 4 ) .
Bank N.V.,
70 FEDERAL RESERVE BUL-
Legal Developments
Marine Midland do not currently have or expect to
have any other significant relationships.
Company and its activities are not significant in
comparison to the size and activities of Subaru or
Marine Midland. Formation of this joint venture is not
expected to create any conflicts of interest or adversely influence Marine Midland in any creditor relationship with Subaru. 4 Finally, Marine Midland has
stated that Company will observe the anti-tying provisions of the BHC Act Amendments of 1970 and that
Company will be treated as an affiliate for the purposes
of section 23A of the Federal Reserve Act.
Financial and managerial considerations are consistent with approval of this proposal. Moreover, there is
no evidence in the record that consummation of this
proposal would result in adverse effects, such as
unsound banking practices, unfair competition or undue concentration of resources.
Marine Midland states that Company will provide it
with increased revenues and a broader customer base.
Company also will provide Subaru dealers and customers with a more complete, readily available source
of financing. Marine Midland notes that Company will
benefit from Marine Midland's experience in the provision of financing to motor vehicle dealers and customers, and from Subaru's experience in establishing
dealerships and marketing motor vehicles. As a result,
Marine Midland states that Company will provide
financing to its customers in a convenient, efficient and
competitive manner, and more effectively than either
joint venture partner alone could provide.
Based upon the foregoing and all the facts of record,
the Board has determined that the balance of public
interest factors it is required to consider under section
4(c)(8) is favorable. Accordingly, the application is
hereby approved. This determination is subject to all
of the conditions set forth in the Board's Regulation Y,
including those in sections 225.4(d) and 225.23(b), and
to the Board's authority to require modification or
termination of the activities of the holding company or
any of its subsidiaries as the Board finds necessary to
assure compliance with the provisions and purposes of
the BHC Act and the Board's regulations and orders
issued thereunder, or to prevent evasion thereof. This
transaction shall not be consummated later than three
months after the effective date of this Order, unless
such period is extended for good cause by the Board,
or by the Federal Reserve Bank of New York, pursuant to delegated authority.
By order of the Board of Governors, effective December 9, 1987.
4. Indeed, the Board observes that Marine Midland's proposal is
similar to another joint venture previously approved by the Board,
Deutsche BankA.G., 6 5
FEDERAL RESERVE BULLETIN 4 3 6 ( 1 9 7 9 ) .
139
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, and Kelley. Absent and not voting:
Governor Heller.
JAMES M C A F E E
[SEAL]
Associate
Secretary
of the Board
MCorp
Dallas, Texas
Order Approving Acquisition
Company
of Data
Processing
MCorp, Dallas, Texas, and its wholly owned subsidiary, MCorp Financial, Inc., Wilmington, Delaware,
bank holding companies within the meaning of the
Bank Holding Company Act ("Act"), 12 U.S.C.
§ 1841 et seq. (collectively referred to as "Applicant"), have applied for the Board's approval pursuant to section 4(c)(8) of the Act (12 U.S.C.
§ 1843(c)(8)) and section 225.23(a) of the Board's
Regulation Y (12 C.F.R. § 225.23(a)), for Applicant's
subsidiary, MTech Corp, Irving, Texas, to acquire all
of the outstanding common stock of Westmoreland
Computer Services, Inc. ("Westmoreland"), Greensburg, Pennsylvania. Westmoreland engages in the
business of providing data processing and data transmission services, of the type permitted for bank holding companies under section 4(c)(8) of the Act and
section 225.25(b)(7) of the Board's Regulation Y
(12 C.F.R. § 225.25(b)(7)).
Notice of the application, affording interested persons an opportunity to submit comments, has been
duly published (52 Federal Register 18,608 (1987)).
The time for filing comments has expired, and the
Board has considered the application and all comments received in light of the public interest factors set
forth in section 4(c)(8) of the Act.
In view of the facts of record, the Board concludes
that Applicant's acquisition of Westmoreland would
not significantly affect competition in any relevant
market. Furthermore, there is no evidence in the
record to indicate that approval of this proposal would
result in undue concentration of resources, unfai:
competition, conflicts of interest, unsound banking
practices, or other adverse effects on the public interest. The Board notes that the acquisition will be made
by Applicant's data processing subsidiary, MTech
Corp., using its own resources. The acquisition is very
small, will not increase parent company leverage, and
is expected by Applicant to result in increased service
fee income. Accordingly, the Board has determined
that the balance of the public interest factors it must
consider under section 4(c)(8) of the Act is favorable
and consistent with approval of the application.
140 Federal Reserve Bulletin • February 1988
Based on the foregoing and other facts of record, the
Board has determined that the application should be,
and hereby is, approved. The acquisition shall not
occur later than three months after the effective date of
this Order, unless that period is extended for good
cause by the Board or by the Federal Reserve Bank of
Dallas, acting pursuant to delegated authority. Applicant's acquisition of Westmoreland is subject to all of
the conditions set forth in Regulation Y, including
sections 225.4(d) and 225.23(b) (12 C.F.R. §§ 225.4(d)
and 225.23(b)), and to the Board's authority to require
such modification or termination of activities of the
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 December 22, 1987.
Voting for this action: Vice Chairman Johnson and Governors Seger, Angell, and Kelley. Absent and not voting:
Chairman Greenspan and Governor Heller.
JAMES M C A F E E
[SEAL]
Associate
Secretary of the Board
Shorebank Corporation
Chicago, Illinois
Order Approving Application to Provide
Community Development Advisory and Related
Services
Shorebank Corporation, Chicago, Illinois ("Shorebank"), a bank holding company within the meaning
of the Bank Holding Company Act of 1956 (12 U.S.C.
§ 1841 et seq. ) (the "BHC Act"), has applied for the
Board's approval under section 4(c)(8) of the BHC Act
(12 U.S.C. § 1843(c)(8)) and section 225.23 of the
Board's Regulation Y (12 C.F.R. § 225.23) to engage
de novo through its subsidiary, Shorebank Advisory
Services, Inc., Chicago, Illinois ("SAS"), in providing
advisory and related services to both depository and
non-depository institutions for programs designed to
promote community welfare.
Notice of the application, affording interested persons an opportunity to submit comments on the proposal, has been published (52 Federal Register 45,247
(1987)). The time for filing comments has expired, and
the Board has considered the application and all
comments received in light of the factors set forth in
section 3(c) of the BHC Act (12 U.S.C. § 1842(c)).
Shorebank, a bank holding company by virtue of its
1973 acquisition of The South Shore Bank of Chicago,
Chicago, Illinois, has total assets of $145.5 million. 1
Shorebank also owns several community development
subsidiaries pursuant to section 225.25(b)(6) of Regulation Y (12 C.F.R. § 225.25(b)(6)). 2
Shorebank has established itself as a business-based
private sector organization committed to urban development. Shorebank's management has extensive
experience in community development and has secured support for its community development programs from religious, charitable and corporate organizations. As a result of Shorebank's success in
community development activities, Shorebank has received numerous requests from community development corporations, government agencies, financial institutions, and others for assistance in designing and
implementing economic development programs. Shorebank has been providing such assistance, receiving
only out-of-pocket expenses or a small honorarium.
With this application, Shorebank proposes to provide community development advice through SAS on
a fee-for-service basis to both depository and nondepository institutions, including non-profit community organizations and other public and private organizations. These services will be provided on a
national and an international basis for programs designed primarily to promote community welfare
through economic rehabilitation and development of
distressed low- and moderate-income communities.
In addition, SAS will coordinate the design and
implementation of the "Chicago initiative." The initiative will attempt to reestablish the small commercial
and industrial market economy in distressed communities. SAS will also provide ongoing advice regarding
financing proposals and management support services
on a fee-for-service basis, acting as a facilitator between investors and community
development
projects.
In order to approve this application, the Board must
determine:
(1) that the proposed activity is closely related to
banking; and
1. Banking data are as of August 31, 1987.
2. These subsidiaries are: City Lands Corp., Chicago, Illinois,
which was acquired to rehabilitate distressed real estate in Shorebank's primary service areas for the benefit of low- and moderateincome residents; The Neighborhood Institute and its wholly owned
subsidiary, TNI Development Corporation, both of Chicago, Illinois,
which provide a wide range of services, such as job placement and
training and the development of low- and moderate-income housing in
Shorebank's primary service areas; and The Neighborhood Fund,
Inc., Chicago, Illinois, which was created under section 301(d) of the
Small Business Investment Act of 1958 to make loans and equity
investments in small businesses owned by socially and economically
disadvantaged persons.
Legal Developments
(2) that the public benefits associated with the proposed activity outweigh any possible adverse effects.
The Board has not previously determined that the
provision of community development advice is closely
related to banking. The Board has, however, permitted bank holding companies to make debt and equity
investments in community development corporations
or projects (12 C.F.R. § 225.25(b)(6)), 3 and has permitted community development corporations to provide community development advice as part of their
other activities.
In determining if an activity is closely related to
banking under section 4(c)(8) of the BHC Act, the
Board has relied on guidelines established by the
federal courts. Under these guidelines, an activity may
be found to be closely related to banking if it is
demonstrated:
(1) that banks generally have, in fact, provided the
proposed services;
(2) that banks generally provide services that are
operationally or functionally so similar to the proposed services as to equip them particularly well to
provide the proposed services; or
(3) that banks generally provide services that are so
integrally related to the proposed activity as to
require their provision in a specialized form. 4
In this case, the record shows that Shorebank and its
subsidiary bank, as well as banks in general, do
provide services similar to those proposed here and
have developed expertise in the community development area.
Shorebank and its subsidiary bank, The South Shore
Bank of Chicago ("Bank"), historically have been
very active in community development. Upon acquiring Bank, Shorebank initiated an aggressive reinvestment program under which Bank extended $75.8 million in development loans through the end of 1986.5 In
3. The Board permitted investments in community development
corporations to allow bank holding companies to participate in community development activities based on their unique role in the
community. See 12 C.F.R. § 225.127 ("Bank holding companies possess a unique combination of financial and managerial resources
making them particularly suited for a meaningful and substantial role
in remedying our social ills.").
4. National Courier Association v. Board of Governors, 516 F.2d
1229 (D.C. Cir. 1975). However, the National Courier guidelines are
not the exclusive basis for finding a close relationship between a
proposed activity and banking. The Board has stated that in acting on
a request to engage in a new nonbanking activity, it will consider any
other factor that an applicant may advance to demonstrate a reasonable or close connection or relationship of the activity to banking. 49
Federal Register 794, 806 (1984); Securities Industry Association v.
Board of Governors, 468 U.S. 207, 210-11 n.5 (1984).
5. Development loans are defined as credits originated in the
Bank's primary service area that contribute to the community's
economic revitalization and that other banks would not make in the
ordinary course of business.
141
addition, Shorebank's nonbanking subsidiaries have
constructed or rehabilitated over 1000 units of low- or
moderate-income housing units. These subsidiaries
also have invested approximately $2 million in minority-owned small businesses and have managed a number of job training and other social service programs in
the South Shore community.
Further, banks in general have experience in the
community development area. Banks are required,
under the Community Reinvestment Act ("CRA"), to
meet the credit needs of their local communities,
including low- and moderate-income neighborhoods,
consistent with the safe and sound operation of the
bank. 6 As one aspect of their CRA obligation, many
banks have developed expertise in the area of community development. Therefore, the Board believes that
banks are particularly qualified to provide the proposed services. For these reasons, the Board concludes that the proposed activity is closely related to
banking.
With respect to the "proper incident" requirement,
section 4(c)(8) of the BHC Act requires the Board to
consider whether the performance of the activity by an
affiliate of a holding company "can reasonably be
expected to produce benefits to the public, such as
greater convenience, increased competition, or gains
in efficiency that outweigh possible adverse effects,
such as undue concentration of resources, decreased
or unfair competition, conflicts of interests, or unsound banking practices."
The proposal will result in public benefits because
the provision of advice by SAS will enable the organizations it advises to establish and maintain more
effective community development projects, particularly in low-income areas. Shorebank's personnel are
particularly skilled in creating and maintaining efficient
and effective community development projects, and
the utilization of such resources in advising other
organizations in community development activities
will allow many low-income areas to benefit from
Shorebank's expertise. Consummation of the proposal
is not likely to result in decreased or unfair competition, conflicts of interest, unsound banking practices,
concentration of resources, or other adverse
effects.
Based on the foregoing and all the facts of record,
the Board has determined that the balance of the
public interest factors it is required to consider under
section 4(c)(8) is favorable. Accordingly, the application is hereby approved. This determination is subject
to all of the conditions set forth in Regulation Y,
including sections 225.4(d) and 225.23(b), and to the
6. 12 U.S.C. § 2901 et seq. ; see also 12 C.F.R. § 228.
142 Federal Reserve Bulletin • February 1988
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 BHC Act and the Board's regulations and orders
issued thereunder, or to prevent evasion thereof.
The activity shall be commenced no later than three
months after the effective date of this Order, unless
such period is extended for good cause by the Board or
by the Federal Reserve Bank of Chicago, acting pursuant to delegated authority.
By order of the Board of Governors, effective December 21, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, and Kelley. Absent and not voting: Governors Angell and Heller.
JAMES M C A F E E
[SEAL]
Associate
Secretary of the Board
Orders Issued Under Sections 3 and 4 of the
Bank Holding Company Act
National Westminster Bank PLC
London, England
Nat We st Holdings Inc.
New York, New York
Order Approving Acquisition of a Bank Holding
Company and its Banking and Nonbanking
Subsidiaries
National Westminster Bank PLC, London, England,
and Nat West Holdings Inc., New York, New York
(together, "Applicants"), have applied for the Board's
approval under section 3 of the Bank Holding Company Act (12 U.S.C. § 1842) ("Act") to acquire all the
voting shares of First Jersey National Corporation,
Jersey City, New Jersey ("First Jersey"), and thereby
to acquire indirectly First Jersey's subsidiary banks:
The First Jersey National Bank, Jersey City ; The First
Jersey National Bank/Central, Trenton; The First Jersey National Bank South, Atlantic City; and The First
Jersey Bank/West, Denville; and First Jersey's bank
holding company subsidiary, First Jersey Fort Lee
Corporation, Jersey City, and its bank subsidiary, The
First Jersey National Bank/Fort Lee, Fort Lee, all in
New Jersey. 1 Applicants also have applied for the
1. Applicants will acquire First Jersey through the merger of NWH
Acquisition Corporation, a subsidiary of National Westminster Bancorp, Inc., Wilmington, Delaware ("Bancorp"), with First Jersey. In
connection with this proposal, Bancorp has applied to become a bank
Board's approval under section 4(c)(8) of the Act
(12 U.S.C. § 1843(c)(8)) to acquire: Tilden of Florida,
Inc., Fort Lauderdale, Florida, and thereby to engage
in commercial lending activities; and FJN Corporation, Jersey City, New Jersey, and thereby to engage
in leasing real property. 2 These activities are authorized for bank holding companies pursuant to the
Board's Regulation Y, 12 C.F.R. §§ 225.25(b)(1), (5).
Notice of the applications, affording opportunity for
interested persons to submit comments and views, has
been published (52 Federal Register 41,777 (1987)).
The time for filing comments has expired, and the
Board has considered the applications and all comments received in light of the factors set forth in
sections 3(c) and 4(c)(8) of the Act.
NatWest Holdings Inc., with approximately $6.6
billion in domestic deposits, is the eleventh largest
commercial banking organization in N e w York, controlling approximately 2.9 percent of total deposits in
commercial banks in New York. 3 First Jersey is the
fourth largest commercial banking organization in
New Jersey, with domestic deposits of approximately
$3.3 billion, controlling approximately 6.2 percent of
the total deposits in commercial banks in New Jersey.
Section 3(d) of the Act, the Douglas Amendment,
prohibits the Board from approving an application by a
bank holding company to acquire control of any bank
located outside of the holding company's home state, 4
unless such acquisition is "specifically authorized by
the statute laws of the State in which [the] bank is
located, by language to that effect and not merely by
implication." 12 U.S.C. § 1842(d). The New Jersey
interstate banking statute 5 contains a national reciprocal provision which permits an out-of-state bank holding company to acquire control of a bank located in
New Jersey if bank holding companies located in New
Jersey are permitted to acquire banks in the acquiring
bank holding company's home state on substantially
the same terms and conditions. The provision of N e w
Jersey law, however, is not effective until a number of
other states pass interstate banking legislation that is
reciprocal with New Jersey, including four of the ten
largest states in the United States in terms of domestic
holding company by acquiring the shares of First Jersey and National
Westminster Bank, USA, New York, New York ("Bank"), which is
now a subsidiary of Holdings. Further, Bancorp has provided notice
to the Board under 12 C.F.R. § 211.4(b)(3) of its intention to acquire
control of Bank's Edge Act corporation subsidiary, National Westminster USA International Bank, Miami, Florida.
2. In connection with this application, Bancorp also has applied to
acquire these nonbanking subsidiaries.
3. Banking data are as of June 30, 1986.
4. A bank holding company's home state is that state in which the
operations of the bank holding company's banking subsidiaries were
principally conducted on July 1, 1966, or the date on which the
company became a bank holding company, whichever is later.
5. N.J. Stat. Ann. § 17:9A-370 et seq. (West 1987).
Legal Developments
commercial bank deposits. New York law permits
New Jersey bank holding companies to acquire banks
in New York. 6 The New Jersey Commissioner of
Banking has determined that, as of January 1, 1988,
the national reciprocal provisions of New Jersey law
will become effective and that New York has enacted
legislation which permits New Jersey bank holding
companies to acquire banks in New York. The Commissioner also must make a specific determination
with regard to the proposal at issue here, but has not
yet done so. The Commissioner, however, has informed the Board that she anticipates making such a
determination subject to the January 1, 1988, effective
date.
Based on the foregoing factors and its own review of
the record, the Board has determined that the proposed acquisition is specifically authorized by the
statute laws of N e w Jersey, and thus Board approval is
not prohibited by the Douglas Amendment, subject to
the January 1, 1988, effective date of New Jersey's
national reciprocal interstate banking legislation and
the Commissioner's specific determination that the
proposal is consistent with the New Jersey interstate
banking statute. The Board's Order is specifically
conditioned on the Commissioner's favorable determination.
NatWest Holdings Inc. competes with First Jersey
in the Metropolitan New York - New Jersey banking
market. 7 NatWest Holdings Inc. is the ninth largest of
163 commercial banking organizations in the market,
with deposits of approximately $6.6 billion, controlling
approximately 2.7 percent of total deposits in commercial banks in the market. First Jersey is the sixteenth
largest commercial banking organization in the market, with deposits of approximately $2.4 billion, controlling approximately 1 percent of total deposits in
commercial banks in the market. Upon consummation, NatWest Holdings Inc. would be the eighth
largest commercial banking organization in the market, with deposits of approximately $9 billion, controlling approximately 3.7 percent of total deposits in
commercial banks in the market. The Metropolitan
New York - New Jersey market is considered unconcentrated, with a Herfindahl-Hirschman Index
("HHI") of 682. Upon consummation, the HHI would
increase by 5 points to 687. On the basis of the
foregoing, the Board concludes that consummation of
the proposal would not have a substantial adverse
6. N.Y. Banking Law § 142-b (McKinney 1987).
7. The Metropolitan New York - New Jersey market includes New
York City, Nassau, Orange, Putnam, Rockland, Suffolk, Sullivan, and
Westchester Counties in New York; Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset,
Sussex, Union, and Warren Counties in New Jersey; and parts of
Fairfield County in Connecticut.
143
competitive effect in the Metropolitan N e w YorkNew Jersey banking market.
The Board also has considered the effects of Applicants' proposal on probable future competition in
markets in which Applicants and First Jersey do not
compete. In light of the number of probable future
entrants into those markets, the Board concludes that
consummation of this proposal would not have a
significant adverse effect on probable future competition in any relevant banking market.
In evaluating this application, the Board has considered the financial resources of Applicants and the
effect on these resources of the proposed acquisition.
The Board has stated and continues to believe that
capital adequacy is an especially important factor in
the analysis of bank holding company proposals, particularly in transactions where a significant acquisition
is proposed. 8
In this regard, the Board expects that banking
organizations experiencing substantial growth internally and by acquisition, such as Applicants, should
maintain a strong capital position substantially above
the minimum levels specified in the Capital Adequacy
Guidelines, without significant reliance on intangibles,
particularly goodwill. 9 The Board will carefully analyze the effect of expansion proposals on the preservation or achievement of such capital positions.
The Board has reviewed this case in light of Applicants' capital position. The Board notes that Applicants have issued more than sufficient new equity
since mid-1986 to fund this acquisition, and that Applicants' pro forma tangible primary capital ratio will
be well above the minimum primary capital ratio under
the Board's Guidelines. The Board also notes that
although First Jersey's capital will be reduced through
the redemption of certain mandatory convertible debentures, Applicants will make an equity contribution
to First Jersey to replace a significant portion of this
capital. In addition, Applicants have committed to
contribute additional capital to First Jersey, if necessary to bring First Jersey's capital ratios to peer levels
by year-end 1988. The financial resources of Applicants and First Jersey are considered generally satisfactory. Accordingly, on the basis of the above considerations, the Board concludes that financial factors
are consistent with approval of the applications. Managerial factors, as well as convenience and needs
considerations, also are consistent with approval.
8. See e.g., Chase Manhattan Corporation, 70 FEDERAL RESERVE
BULLETIN 529 (1984); NCNB Corporation, 69 FEDERAL RESERVE
BULLETIN 49 (1983).
9. Capital Adequacy Guidelines, 50 Federal Register 16,057,
16,066-67 (April 24,
1985) (71 FEDERAL RESERVE B U L L E T I N
445
(1985)); National City Corporation, 70 FEDERAL RESERVE BULLETIN
743, 746 (1984).
144 Federal Reserve Bulletin • February 1988
As indicated earlier, Applicants also have applied,
pursuant to section 4(c)(8), to acquire the nonbanking
subsidiaries of First Jersey. Applicants operate nonbanking subsidiaries that compete with First Jersey in
the activities of financing automobile and equipment
leasing. The markets for these activities have numerous competitors, are regional or national in scope, and
both Applicants and First Jersey hold small market
shares. Accordingly, the Board concludes that this
proposal will not have any significant adverse effect
upon competition in any relevant market.
There is no evidence in the record to indicate that
approval of this proposal would result in undue concentration of resources, decreased or unfair competition, conflicts of interests, unsound banking practices,
or other adverse effects on the public interest. Accordingly, the Board has determined that the balance of
public interest factors it must consider under section
4(c)(8) of the Act is favorable and consistent with
approval of the applications to acquire First Jersey's
nonbanking subsidiaries and activities.
The Board also has considered the notice of Bancorp's proposed acquisition of control of National
Westminster USA International Bank, Miami, Florida, under the Edge Act. Based on the facts of record,
the Board has determined that disapproval of the
proposed investment is not warranted.
Based on the foregoing and other facts of record, the
Board has determined that the applications should be,
and hereby are, approved, subject to the January 1,
ORDERS
APPROVED
UNDER
BANK
HOLDING
1988, effective date of N e w Jersey's national reciprocal interstate banking statute and the Commissioner's
favorable determination. The acquisition of First Jersey shall not be consummated before the thirtieth
calendar day following the effective date of this Order,
or later than three months after the effective date of
this Order, unless such period is extended for good
cause by the Board or by the Federal Reserve Bank of
New York, acting pursuant to delegated authority.
The determinations as to Applicants' nonbanking activities are subject to all of the conditions contained in
Regulation Y, including those in sections 225.4(d) and
225.23(b)(3) (12 C.F.R. §§ 225.4(d) and 225.23(b)(3)),
and to the Board's authority to require such modification or termination of the activities of a holding company or any of its subsidiaries as the Board finds
necessary to assure compliance with 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 December 21, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, and Kelley. Absent and not voting: Governors Angell and Heller.
JAMES M C A F E E
[SEAL]
COMPANY
Associate
Secretary
of the Board
ACT
By Federal Reserve Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon
request to the Reserve Banks.
Section 3
. ..
Applicant
Abington Bancorp, Inc.,
Abington, Massachusetts
Albright Bancorp, Inc.,
Kingwood, West Virginia
American Interstate
Bancorporation, Inc.,
Omaha, Nebraska
r> w \
Bank(s)
Abington Savings Bank,
Abington, Massachusetts
Landmark Bank for Savings,
Whitman, Massachusetts
Albright National Bank of
Kingwood,
Kingwood, West Virginia
The First National Bank of Paullina,
Paullina, Iowa
Reserve
Effective
Bank
date
Boston
December 24, 1987
Richmond
December 11, 1987
Chicago
December 1, 1987
Legal Developments
145
Section 3—Continued
.
Applicant
Arrow Bank Corp.,
Glens Falls, N e w York
Associated Acquisition
Corporation,
Green Bay, Wisconsin
Associated Banc-Corp,
Green Bay, Wisconsin
Bank South Corporation,
Atlanta, Georgia
Blue Rapids Bancshares, Inc.,
Blue Rapids, Kansas
Boston Private Bancorp, Inc.,
Boston, Massachusetts
Capac Bancorp, Inc.,
Capac, Michigan
Chester County Bancshares, Inc.
II,
Henderson, Tennessee
Citizens Bancgroup Inc.,
Valley, Alabama
Citizens Bancorp of Delavan,
Inc.,
Delavan, Wisconsin
Commercial Bank Shares, Inc.,
Honea Path, South Carolina
Dominion Bankshares
Corporation,
Roanoke, Virginia
Dominion Bankshares
Corporation,
Roanoke, Virginia
Dominion Bankshares
Corporation,
Roanoke, Virginia
Duco Bancshares,
Villa Park, Illinois
FGC Holding Company,
Martin, Kentucky
FIH, L.P.,
Beverly Hills, California
FIH, Inc.,
Beverly Hills, California
First American Corporation,
Nashville, Tennessee
„ , , .
Bank(s)
Reserve
Bank
Effective
date
Saratoga National Bank and Trust
Company,
Saratoga Springs, New York
VALDERS BANCORPORATION,
Valders, Wisconsin
New York
December 23, 1987
Chicago
December 1, 1987
Associated Acquisitions
Corporation,
Green Bay, Wisconsin
Heritage Trust,
Conyers, Georgia
The State Bank of Blue Rapids,
Blue Rapids, Kansas
Boston Private Bank and Trust
Company,
Boston, Massachusetts
Capac State Savings Bank,
Capac, Michigan
Chester County Bank,
Henderson, Tennessee
Chicago
December 1, 1987
Atlanta
November 30, 1987
Kansas City
December 29, 1987
Boston
December 1, 1987
Chicago
December 15, 1987
St. Louis
November 30, 1987
Citizens National Bank of Shawmut,
Valley, Alabama
Citizens Bank of Delavan,
Delavan, Wisconsin
Atlanta
December 1, 1987
Chicago
December 1, 1987
The Commercial Bank,
Honea Path, South Carolina
Franklin First National Corporation,
Decherd, Tennessee
Richmond
December 30, 1987
Richmond
November 27, 1987
The Peoples National Bancorp, Inc., Richmond
Shelbyville, Tennessee
November 27, 1987
U N B Corporation,
Fayetteville, Tennessee
Richmond
November 27, 1987
Community Bank of Galesburg,
Galesburg, Illinois
First Guaranty Corporation,
Martin, Kentucky
First Interstate of Hawaii, Inc.,
Honolulu, Hawaii
Chicago
December 24, 1987
Cleveland
December 16, 1987
First Roane County Bancorp, Inc.,
Rockwood, Tennessee
Atlanta
San Francisco December 24, 1987
December 21, 1987
146
Federal Reserve Bulletin • February 1988
Section 3—Continued
Applicant
First Canyon Bancorporation,
Inc.,
Canyon, Texas
FIRST CICERO BANC
CORPORATION,
Oak Brook, Illinois
First Commercial Corporation,
Little Rock, Arkansas
First Delhi Corporation,
Delhi, Louisiana
First Liberty Bancorp, Inc.,
Washington, D.C
The First National Bank of
Bemidji Employee Stock
Ownership Plan and Trust,
Bemidji, Minnesota
First National Cincinnati
Corporation,
Cincinnati, Ohio
First Wachovia Corporation,
Winston-Salem, North Carolina
Heritage Racine Corporation,
Racine, Wisconsin
Herky Hawk Financial Corp.,
Hopkinton, Iowa
Hodco, Inc.,
Martin, South Dakota
Kansas State Financial
Corporation,
Wichita, Kansas
Klein Bancorporation, Inc.,
Chaska, Minnesota
Liberty National Bancorp, Inc.,
Louisville, Kentucky
CSB Bancshares, Inc.,
Louisville, Kentucky
Malta Banquo, Inc.,
Malta, Montana
McCamey Financial Corporation,
McCamey, Texas
Miami Corporation,
Chicago, Illinois
Boulevard Bancorp, Inc.,
Chicago, Illinois
Bank(s)
Reserve
Bank
Effective
date
First Canyon Bancshares, Inc.,
Canyon, Texas
Dallas
December 1, 1987
FIRST HARVEY BANC
CORPORATION,
Oak Brook, Illinois
LA GRANGE PARK BANC
CORPORATION,
Oak Brook, Illinois
First Security Corporation,
Harrison, Arkansas
Security Bancshares, Incorporated,
Monroe, Louisiana
First Liberty National Bank,
Washington, D.C.
First Bemidji Holding Company,
Bemidji, Minnesota
Chicago
December 17, 1987
St. Louis
November 27, 1987
Dallas
December 21, 1987
Richmond
December 2, 1987
Minneapolis
December 14, 1987
Aurora First National Bancorp,
Aurora, Indiana
Cleveland
December 10, 1987
North Georgia Bancshares, Inc.,
Canton, Georgia
Bank of Hay ward,
Hayward, Wisconsin
Citizens State Bank,
Hopkinton, Iowa
Blackpipe State Bank,
Martin, South Dakota
Central Financial Corporation,
Wichita, Kansas
Richmond
December 23, 1987
Chicago
November 27, 1987
Chicago
December 18, 1987
Minneapolis
December 30, 1987
Kansas City
November 27, 1987
Oakley Holding Company,
Buffalo, Minnesota
Indiana First National Bank,
Charlestown, Indiana
First Indiana Bank, National
Association,
Milltown, Indiana
First Security Bank of Malta,
Malta, Montana
McCamey Bancshares, Inc.,
McCamey, Texas
Keekins Financial Corporation,
Downers Grove, Illinois
Citizens National Bank of Downers
Grove,
Downers Grove, Illinois
Minneapolis
December 14, 1987
St. Louis
November 27, 1987
Minneapolis
December 17, 1987
Dallas
December 1, 1987
Chicago
December 4, 1987
Legal Developments
147
Section 3—Continued
.
Applicant
Midlantic Corporation,
Edison, New Jersey
National Bancshares Waupun,
Inc.,
Waupun, Wisconsin
NBM Bancorp, Inc.,
Montpelier, Ohio
Okawville Bancshares, Inc.,
Okawville, Illinois
Oxford Financial Corporation,
Elmhurst, Illinois
Peoples Bancorporation,
Rocky Mount, North Carolina
Pocahontas Bankshares
Corporation,
Bluefield, West Virginia
Princeton National Bancorp, Inc.,
Princeton, Illinois
Security Bancshares, Inc.,
Scott City, Kansas
Security State Bancshares, Inc.,
Charleston, Missouri
Sheridan National Agency,
Sheridan, Wyoming
Somerset Bancshares
Corporation, Inc.,
Somerset, Texas
Southeast Banking Corporation,
Miami, Florida
Southwest Financial Group of
Iowa, Inc.,
Red Oak, Iowa
The Sumitomo Bank, Limited,
Osaka, Japan
Suwannee Valley Bancshares, Inc.,
Chiefland, Florida
Union Planters Corporation,
Memphis, Tennessee
United New Mexico Financial
Corporation,
Albuquerque, New Mexico
UP Financial, Inc.,
Ashland, Wisconsin
Valley Bancshares, Inc.,
Grand Forks, North Dakota
~ , , .
Bank(s)
Reserve
^
Effective
date
Midlantic National Bank/Delaware,
Wilmington, Delaware
The National Bank of Waupun,
Waupun, Wisconsin
New York
December 1, 1987
Chicago
December 22, 1987
National Bank of Montpelier,
Montpelier, Ohio
Old Exchange National Bank,
Okawville, Illinois
Addison State Bank,
Addison, Illinois
Citizens National Bank,
Winston-Salem, North Carolina
The Bank of Oceana,
Oceana, West Virginia
Cleveland
December 24, 1987
St. Louis
November 24, 1987
Chicago
November 30, 1987
Richmond
December 22, 1987
Richmond
December 30, 1987
Chicago
December 21, 1987
Kansas City
December 17, 1987
St. Louis
December 2, 1987
Kansas City
November 30, 1987
Dallas
November 30, 1987
First City Bancorp, Inc.,
Gainesville, Florida
Houghton State Bank,
Red Oak, Iowa
Atlanta
December 29, 1987
Chicago
November 27, 1987
CPB, Inc.,
Honolulu, Hawaii
Bank of Florida, N.A.,
Chiefland, Florida
Bank of East Tennessee,
Knoxville, Tennessee
United Bancshares, Inc.,
Lubbock, Texas
San Francisco December 24, 1987
USA FIRSTRUST INC.,
Oglesby, Illinois
Security State Bank,
Scott City, Kansas
First Security State Bank,
Charleston, Missouri
The National Bank of
Caruthersville,
Caruthersville, Missouri
Sheridan National Bank,
Sheridan, Wyoming
Somerset National Bank,
Somerset, Texas
First National Bank in Ontonagon,
Ontonagon, Michigan
Valley Bank and Trust Company,
Grand Forks, North Dakota
Atlanta
December 17, 1987
St. Louis
December 10, 1987
Dallas
December 1, 1987
Minneapolis
December 28, 1987
Minneapolis
November 27, 1987
148
Federal Reserve Bulletin • February 1988
Section 3—Continued
Applicant
Bank(s)
Water Tower Bancorp, Inc.,
Chicago, Illinois
Westbank Financial Corporation,
Naperville, Illinois
Belmont National Bank of Chicago,
Chicago, Illinois
First Channahon Bancorp, Inc.,
Channahon, Illinois
Reserve
Bank
Effective
date
Chicago
December 1, 1987
Chicago
November 27, 1987
Section 4
Applicant
Amsterdam-Rotterdam Bank, N.V.,
Amsterdam, The Netherlands
Community Group, Inc.,
Jasper, Tennessee
First Bank System, Inc.,
Minneapolis, Minnesota
First National of Nebraska, Inc.,
Omaha, Nebraska
First N H Banks, Inc.,
Manchester, New Hampshire
Merchants National Corporation,
Indianapolis, Indiana
Quad County Bancshares, Inc.,
Viburnum, Missouri
Nonbanking
Company/Activity
portfolio management and
investment advisory services
Community Financial Corporation,
Chattanooga, Tennessee
First Trust Company, Inc.,
St. Paul, Minnesota
Data Management Products, Inc.,
Omaha, Nebraska
New England Acceptance
Corporation,
Keene, New Hampshire
retain the general insurance agency
activities of North Madison
Insurance Agency, Inc.,
Madison, Indiana
Viburnum Insurance Services, Inc.,
Viburnum, Missouri
Reserve
Bank
Effective
date
New York
December 29, 1987
Atlanta
November 23, 1987
Minneapolis
December 24, 1987
Kansas City
December 17, 1987
Boston
December 22, 1987
Chicago
December 3, 1987
St. Louis
December 3, 1987
Sections 3 and 4
Applicant
FV Inc.,
Bethlehem, Pennsylvania
United Jersey Banks,
Princeton, New Jersey
Bank(s)/Nonbanking
Company
First Valley Corporation,
Bethlehem, Pennsylvania
First Valley Corporation,
Bethlehem, Pennsylvania
Reserve
Bank
Effective
date
New York
December 23, 1987
New York
December 23, 1987
Legal Developments
ORDERS
APPROVED
UNDER
BANK
MERGER
149
ACT
By Federal Reserve Banks
Applicant
County Bank Corp.,
Lapeer, Michigan
First Trust and Savings Bank of
Kankakee,
Kankakee, Illinois
Valley Bank and Trust Company,
Grand Forks, North Dakota
ORDERS
APPROVED
Reserve
Bank
Bank(s)
UNDER
BANK
Lapeer County Bank & Trust Co.,
Lapeer, Michigan
First Trust and Savings Bank of
Bradley,
Bradley, Illinois
New Valley Bank,
Grand Forks, North Dakota
SERVICE
CORPORATION
Effective
date
Chicago
December 14, 1987
Chicago
November 27, 1987
Minneapolis
November 27, 1987
ACT
By Federal Reserve Banks
Applicant
SunTrust Service Corporation,
Orlando, Florida
PENDING
CASES
INVOLVING
Reserve
Bank
Bank(s)
SunTrust Banks, Inc.,
Atlanta, Georgia
THE BOARD
OF
Atlanta
Effective
date
December 22, 1987
GOVERNORS
This list of pending cases does not include suits against the Federal Reserve Banks in which the Board
of Governors is not named a party.
Industry Association
v. Board of Governors, No.
87-4161 (2d Cir., filed Dec. 15, 1987).
Independent Insurance Agents of America, Inc. v.
Board of Governors, No. 87-1686 (D.C. Cir., filed
Nov. 19,1987)
National Association of Casualty and Surety Agents,
et al., v. Board of Governors, No. 87-1644 (D.C.
Cir., filed Nov. 4, 1987).
Teichgraeber v. Board of Governors, No. 87-2505-0
(D. Kan., filed Oct. 16, 1987).
Securities Industry Association v. Board of Governors, No. 87-4135 (2d Cir., filed Oct. 8, 1987).
Independent Insurance Agents of America, Inc. v.
Board of Governors, No. 87-4118 (2d Cir., filed
Sept. 17, 1987).
Citicorp v. Board of Governors, No. 87-1475 (D.C.
Cir., filed Sept. 9, 1987).
Securities Industry Association v. Board of Governors, No. 87-4115 (2d Cir., filed Sept. 9, 1987)
Board of Trade of the City of Chicago, et al. v. Board
of Governors, No. 87-2389 (7th Cir., filed Sept. 1,
1987).
Barrett v. Volcker, No. 87-2280 (D.D.C., filed Aug.
17, 1987).
Northeast Bancorp v. Board of Governors,
87-1365 (D.C. Cir., filed July 31, 1987).
No.
National Association of Casualty & Insurance Agents
v. Board of Governors, Nos. 87-1354, 87-1355 (D.C.
Cir., filed July 29, 1987).
The Chase Manhattan Corporation v. Board of Governors, No. 87-1333 (D.C. Cir., filed July 20, 1987).
Securities
Industry
Association
v. Board of
Gover-
150 Federal Reserve Bulletin • February 1988
nors, Nos. 87-4091, 87-4093, 87-4095 (2d Cir., filed
July 1 and July 15, 1987).
Lewis v. Board of Governors, Nos. 87-3455, 87-3545
(11th Cir., filed June 25, Aug. 3, 1987).
Securities Industry Association v. Board of Governors, et al. No. 87-4041 and consolidated cases (2d
Cir., filed May 1, 1987).
Securities Industry Association v. Board of Governors, et al., No. 87-1169 (D.C. Cir., filed April 17,
1987).
Bankers Trust New York Corp. v. Board of Governors,
No. 87-1035 (D.C. Cir., filed Jan. 23, 1987).
Grimm v. Board of Governors, No. 87-4006 (2d Cir.,
filed Jan. 16, 1987).
Independent Insurance Agents of America, et al. v.
Board of Governors, Nos. 86-1572, 1573, 1576
(D.C. Cir., filed Oct. 24, 1986).
Independent
Community
Bankers Association
of
South Dakota v. Board of Governors, No. 86-5373
(8th Cir., filed Oct. 3, 1986).
Jenkins v. Board of Governors, No. 86-1419 (D.C.
Cir., filed July 18, 1986).
Securities Industry Association v. Board of Governors, No. 86-1412 (D.C. Cir., filed July 14, 1986).
CBC, Inc. v. Board of Governors, No. 86-1001 (10th
Cir., filed Jan. 2, 1986).
Myers, et al. v. Federal Reserve Board, No. 85-1427
(D. Idaho, filed Nov. 18, 1985).
Souser, et al. v. Volcker, et al., No. 85-C-2370, et al.
(D. Colo., filed Nov. 1, 1985).
Podolak v. Volcker, No. C85-0456, et al. (D. Wyo.,
filed Oct. 28, 1985).
Kolb v. Wilkinson, et al., No. C85-4184 (N.D. Iowa,
filed Oct. 22, 1985).
Farmer v. Wilkinson, et al., No. 4-85-CIVIL-1448 (D.
Minn., filed Oct. 21, 1985).
Kurkowski v. Wilkinson, et al., No. CV-85-0-916 (D.
Neb., filed Oct. 16, 1985).
Alfson v. Wilkinson, et al., No. A l - 8 5 - 2 6 7 (D. N . D . ,
filed Oct. 8, 1985).
Independent
Community
Bankers Association
of
South Dakota v. Board of Governors, No. 84-1496
(D.C. Cir., filed Aug. 7, 1985).
Urwyler, et al. v. Internal Revenue Service, et al., No.
85-2877 (9th Cir., filed July 18, 1985).
Wight, et al. v. Internal Revenue Service, et al., No.
85-2826 (9th Cir., filed July 12, 1985).
Brown v. United States Congress,
et al., No.
84-2887-6(IG) (S.D. Cal., filed Dec. 7, 1984).
Melcher v. Federal Open Market Committee,
No.
86-5692 (D.C. Cir., filed April 30, 1984).
A1
Financial and Business Statistics
CONTENTS
WEEKLY
Domestic
A19
A20
A21
ALL
MONEY
A3
A4
A5
A6
STOCK
Statistics
AND BANK
CREDIT
Reserves, money stock, liquid assets, and debt
measures
Reserves of depository institutions, Reserve
Bank credit
Reserves and borrowings—Depository
institutions
Selected borrowings in immediately available
funds—Large member banks
POLICY
A7
A8
A9
Financial
INSTRUMENTS
Federal Reserve Bank interest rates
Reserve requirements of depository institutions
Federal Reserve open market transactions
FEDERAL
RESERVE
AND
BANKS
CREDIT
AGGREGATES
A12 Aggregate reserves of depository institutions
and monetary base
A13 Money stock, liquid assets, and debt measures
A15 Bank debits and deposit turnover
A16 Loans and securities—All commercial banks
COMMERCIAL
BANKING
INSTITUTIONS
A17 Major nondeposit funds
A18 Assets and liabilities, last-Wednesday-of-month
series
COMMERCIAL
BANKS
Assets and liabilities
All reporting banks
Banks in N e w York City
Branches and agencies of foreign banks
Gross demand deposits—individuals,
partnerships, and corporations
FINANCIAL
MARKETS
A23 Commercial paper and bankers dollar
acceptances outstanding
A23 Prime rate charged by banks on short-term
business loans
A24 Interest rates—money and capital markets
A25 Stock market—Selected statistics
A26 Selected financial institutions—Selected assets
and liabilities
FEDERAL
FINANCE
A28
A29
A30
A30
A10 Condition and Federal Reserve note statements
A11 Maturity distribution of loan and security
holdings
MONETARY
REPORTING
Federal fiscal and financing operations
U.S. budget receipts and outlays
Federal debt subject to statutory limitation
Gross public debt of U.S. Treasury—Types and
ownership
A31 U.S. government securities dealers—
Transactions
A32 U.S. government securities dealers—Positions
and financing
A3 3 Federal and federally sponsored credit
agencies—Debt outstanding
SECURITIES
CORPORATE
MARKETS
AND
FINANCE
A34 N e w security issues—State and local
governments and corporations
A35 Open-end investment companies—Net sales and
asset position
A35 Corporate profits and their distribution
A36 Nonfinancial corporations—Assets and
liabilities
2
Federal Reserve Bulletin • February 1988
A36 Total nonfarm business expenditures on new
plant and equipment
A37 Domestic finance companies—Assets and
liabilities and business credit
A57 Selected U.S. liabilities to foreign official
institutions
REPORTED
REAL
ESTATE
A38 Mortgage markets
A39 Mortgage debt outstanding
CONSUMER
INSTALLMENT
CREDIT
A40 Total outstanding and net change
A41 Terms
OF
A42 Funds raised in U.S. credit markets
A43 Direct and indirect sources of funds to credit
markets
Nonfinancial
SELECTED
IN THE UNITED
BUSINESS
STATES
HOLDINGS
AND
TRANSACTIONS
Statistics
MEASURES
A44 Nonfinancial business activity—Selected
measures
A45 Labor force, employment, and unemployment
A46 Output, capacity, and capacity utilization
A47 Industrial production—Indexes and gross value
A49 Housing and construction
A50 Consumer and producer prices
A51 Gross national product and income
A52 Personal income and saving
International
BY NONBANKING
A63 Liabilities to unaffiliated foreigners
A64 Claims on unaffiliated foreigners
SECURITIES
Domestic
STATES
Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A61 Banks' own claims on unaffiliated foreigners
A62 Claims on foreign countries—Combined
domestic offices and foreign branches
ENTERPRISES
FUNDS
IN THE UNITED
A57
A58
A60
A61
REPORTED
FLOW
BY BANKS
Statistics
A65 Foreign transactions in securities
A66 Marketable U.S. Treasury bonds and notes—
Foreign transactions
INTEREST
AND EXCHANGE
RATES
A67 Discount rates of foreign central banks
A67 Foreign short-term interest rates
A68 Foreign exchange rates
A69 Guide to Tabular
Presentation,
Statistical Releases, and Special
Tables
S UMMAR Y ST A TISTICS
SPECIAL
A53
A54
A54
A54
A70 Assets and liabilities of commercial banks,
June 30, 1987
A76 Assets and liabilities of U.S. branches and
agencies of foreign banks, June 30, 1987
A80 Pro forma balance sheet and income statement
for priced service operations, September 30,
1987
U.S. international transactions—Summary
U.S. foreign trade
U.S. reserve assets
Foreign official assets held at Federal Reserve
Banks
A55 Foreign branches of U.S. banks—Balance sheet
data
TABLES
Money Stock and Bank Credit
A3
1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES
Monetary and credit aggregates
(annual rates of change, seasonally adjusted in percent) 1
Item
1987
1987
Q4
Q1
Q2
Q3
July
Aug.
Sept.
Oct.'
Nov.
24.3
22.8
25.3
11.0
16.4
16.5
18.5
11.3
8.0
8.4
5.4
6.8
-1.6
-.5
-.4
4.7
-2.2
6.9
4.7
5.7
.1
6.3
6.5
-1.0
4.0
-7.2
5.0
13.9
7.1
14.1
11.9
-10.1
-6.3
-3.7
8.3
17.0
9.3
8.3
8.4
12.5'
13.1
6.4
6.5
6.2'
10.4
6.4
2.3
4.3
3.2'
9.r
.0
3.1
4.9f
4.4'
8.2'
1.6
2.7
2.3'
-1.1'
6.8'
5.6
6.5
7.1'
8.2'
7.7'
.3
5.7
5.7'
8.4'
8.9'
15.0
7.2
8.0
10.4
9.4
-6.6
-.1
4.7
n.a.
n.a.
6.7
4.3
4.1
6.6'
.9
12.2'
4.3'
11.8r
3.1
.7'
6.9
9.3'
7.6'
5.5'
4.3
11.1
2.2
23.3
36.9
-10.7
.1
37.3
-4.9
9.7
24.1
-4.6
18.3
7.8
8.0
4.1
7.5
11.0
-4.6
9.5
6.6
.0
.0
6.2
-.4
-3.4
18.6
13.0
-3.4
25.4
23.8
23.2
-6.4
-7.0
27.3
-4.2
-9.5
25.9
1.0
-8.4
7.1
10.2'
10.7
2.0
12.5
9.6
8.5
12.1
13.5
-2.5
10.3'
17.2
-9.9
13.3
29.4
-22.1
25.2
27.2
11.8r
12.8r
8.8
12.2
9.8
10.1
8.8
9.2'
7.0
5.9
9.0'
5.7'
1.8'
8.4'
1.4'
8.8
7.4'
10.8
6.5
9.7'
9.7
3.9
11.1
10.4
n.a.
n.a.
-1.3
institutions2
1
2
3
4
Reserves of depository
Total
Required
Nonborrowed
Monetary base
5
6
7
8
9
Concepts of money, liquid assets, and debt4
Ml
M2
M3
L
Debt
Nontrgnsaction
10 In M2
11 In M3 only 6
1986
#
components
Time and savings deposits
Commercial banks
Savings'
Small-denomination time
Large-denomination time •
Thrift institutions
15
Savings'
16
Small-denomination time
17
Large-denomination time
12
13
14
Debt components4
18 Federal
19 Nonfederal
20 Total loans and securities at commercial banks
1. Unless otherwise noted, rates of change are calculated from average
amounts outstanding in preceding month or quarter.
2. Figures incorporate adjustments for discontinuities associated with the
implementation of the Monetary Control Act and other regulatory changes to
reserve requirements. To adjust for discontinuities due to changes in reserve
requirements on reservable nondeposit liabilities, the sum of such required
reserves is subtracted from the actual series. Similarly, in adjusting for discontinuities in the monetary base, required clearing balances and adjustments to
compensate for float also are subtracted from the actual series.
3. The monetary base not adjusted for discontinuities consists of total
reserves plus required clearing balances and adjustments to compensate for float
at Federd Reserve Banks plus the currency component of the money stock less
the amount of vault cash holdings of thrift institutions that is included in the
currency component of the money stock plus, for institutions not having required
reserve balances, the excess of current vault cash over the amount applied to
satisfy current reserve requirements. After the introduction of contemporaneous
reserve requirements (CRR), currency and vault cash figures are measured over
the weekly computation period ending Monday.
Before CRR, all components of the monetary base other than excess reserves
are seasonally adjusted as a whole, rather than by component, and excess
reserves are added on a not seasonally adjusted basis. After CRR, the seasonally
adjusted series consists of seasonally adjusted total reserves, which include
excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted
currency component of the money stock plus the remaining items seasonally
adjusted as a whole.
4. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults
of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits
at all commercial banks other than those due to domestic banks, the U.S.
government, and foreign banks and official institutions less cash items in the
process of collection and Federal Reserve float; and (4) other checkable deposits
(OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer
service (ATS) accounts at depository institutions, credit union share draft
accounts, and demand deposits at thrift institutions. The currency and demand
deposit components exclude the estimated amount of vault cash and demand
deposits respectively held by thrift institutions to service their OCD liabilities.
M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs)
issued by all commercial banks and overnight Eurodollars issued to U.S. residents
by foreign branches of U.S. banks worldwide, Money Market Deposit Accounts
(MMDAs), savings and small-denomination time deposits (time deposits—including retail RPs—in amounts of less than $100,000), and balances in both taxable and
tax-exempt general purpose and broker/dealer money market mutual funds.
Excludes individual retirement accounts (IRA) and Keogh balances at depository
institutions and money market funds. Also excludes all balances held by U.S.
commercial banks, money market funds (general purpose and broker/dealer),
foreign governments and commercial banks, and the U.S. government. Also
subtracted is a consolidation adjustment that represents the estimated amount of
demand deposits and vault cash held by thrift institutions to service their time and
savings deposits.
M3: M2 plus large-denomination time deposits and term RP liabilities (in
amounts of $100,000 or more) issued by commercial banks and thrift institutions,
term Eurodollars held by U.S. residents at foreign branches of U.S. banks
worldwide and at all banking offices in the United Kingdom and Canada, and
balances in both taxable and tax-exempt, institution-only money market mutual
funds. Excludes amounts held by depository institutions, the U.S. government,
money market funds, and foreign banks and official institutions. Also subtracted
is a consolidation adjustment that represents the estimated amount of overnight
RPs and Eurodollars held by institution-only money market mutual funds.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper and bankers acceptances, net of money
market mutual fund holdings of these assets.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. The source of data on domestic
nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt
data are based on monthly averages. Growth rates for debt reflect adjustments for
discontinuities over time in the levels of debt presented in other tables.
5. Sum of overnight RPs and Eurodollars, money market fund balances
(general purpose and broker/dealer), MMDAs, and savings and small time
deposits less the estimated amount of demand deposits and vault cash held by
thrift institutions to service their time and savings deposit liabilities.
6. Sum of large time deposits, term RPs, and Eurodollars of U.S. residents,
money market fund balances (institution-only), less a consolidation adjustment
that represents the estimated amount of overnight RPs and Eurodollars held by
institution-only money market mutual funds.
7. Excludes MMDAs.
8. Small-denomination time deposits—including retail RPs—are those issued
in amounts of less than $100,000. All IRA and Keogh accounts at commercial
banks and thrifts are subtracted from small time deposits.
9. Large-denomination time deposits are those issued in amounts of $100,000
or more, excluding those booked at international banking facilities.
10. Large-denomination time deposits at commercial banks less those held by
money market mutual funds, depository institutions, and foreign banks and
official institutions.
11. Changes calculated from figures shown in table 1.23.
A4
DomesticNonfinancialStatistics • February 1988
1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT
Millions of dollars
Monthly averages of
daily figures
Weekly averages of daily figures for week ending
1987
1987
Factors
Sept.
Oct.
Nov.
Oct. 14
Oct. 21
Oct. 28
Nov. 4
Nov. 11
Nov. 18
Nov. 25
240,591
241,841
240,088
236,547
242,444
248,500
241,728
239,709
241,638
239,081
214,298
211,468
2,830
8,399
7,623
776
0
956
774
16,164
11,068
5,018
17,981
214,787
210,822
3,965
8,747
7,601
1,146
0
959
751
16,597
11,084
5,018
18,028
214,695
213,706
989
7,956
7,567
389 '
0
610
866
15,961
11,084
5,018
18,102
210,880
210,880
0
7,623
7,623
0
0
902
707
16,435
11,086
5,018
18,018
215,059
210,168
4,891
8,860
7,607
1,253
0
1,111
879
16,535
11,086
5,018
18,032
220,197
210,726
9,471
10,165
7,567
2,598
0
751
494
16,893
11,086
5,018
18,046
214,534
210,151
4,383
9,208
7,567
1,641
0
603
364
17,020
11,085
5,018
18,073
213,563
212,218
1,345
7,968
7,567
401
0
516
602
17,059
11,084
5,018
18,089
215,319
214,381
938
8,090
7,567
523
0
605
1,595
16,029
11,085
5,018
18,101
215,088
215,088
0
7,567
7,567
0
0
681
686
15,059
11,083
5,018
18,115
217,718
459
218,734
470
223,078
471
218,958
475
219,087
472
218,978
469
220,254
468
222,257
474
223,539
474
223,662
472
10,585
248
8,828
259
3,755
299
3,281
208
12,191
251
13,822
298
7,367
270
3,958
316
3,836
261
3,325
279
1,930
390
2,029
402
2,063
374
1,943
350
1,926
385
1,960
391
2,072
436
1,945
328
2,017
346
1,845
336
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit
2
U.S. government securities'
3
Bought outright
Held under repurchase agreements..
4
5
Federal agency obligations
Bought outright
6
Held under repurchase agreements..
7
8
Acceptances
9
Loans
10 Float
11
Other Federal Reserve assets
12 Gold stock 2
13 Special drawing rights certificate account
14 Treasury currency outstanding
ABSORBING RESERVE FUNDS
15 Currency in circulation
16 Treasury cash holdings 2
Reserve Banks
17 Treasury
18 Foreign
19 Service-related balances and
adjustments
20
Other
21 Other Federal Reserve liabilities and
capital
22 Reserve balances with Federal
Reserve Banks
7,213
7,236
7,418
7,034
7,342
7,365
7,682
7,586
7,336
7,192
36,115
38,014
36,834
38,421
34,924
39,365
37,355
37,038
38,033
36,187
End-of-month figures
Wednesday figures
1987
1987
Sept.
Oct.
Nov.
Oct. 14
Oct. 21
Oct. 28
Nov. 4
Nov. 11
Nov. 18
Nov. 25
SUPPLYING RESERVE FUNDS
238,823
246,896
245,472
239,536
243,453
251,276
236,113
240,416
237,916
239,681
U.S. government securities 1
Bought outright
Held under repurchase agreements....
Federal agency obligations
Bought outright
Held under repurchase agreements....
Acceptances
Loans
Float
Other Federal Reserve assets
211,941
211,941
0
7,623
7,623
0
0
1,941
248
17,070
217,614
209,319
8,295
10,483
7,567
2,916
0
587
609
17,603
218,960
213,563
5,397
9,844
7,567
2,277
0
790
428
15,450
212,094
212,094
0
7,623
7,623
0
0
929
2,138
16,752
213,804
210,208
3,596
8,706
7,567
1,139
0
3,160
1,134
16,649
219,707
211,453
8,254
11,646
7,568
4,078
0
753
2,031
17,139
210,484
210,484
0
7,567
7,567
0
0
573
594
16,941
213,833
211,163
2,670
8,355
7,567
788
0
473
611
17,144
213,000
212,810
190
7,947
7,567
380
0
662
1,525
14,782
215,532
215,532
0
7,567
7,567
0
0
602
975
15,005
34 Gold stock 2
35 Special drawing rights certificate account..
36 Treasury currency outstanding
11,075
5,018
18,006
11,085
5,018
18,058
11,082
5,018
18,127
11,086
5,018
18,030
11,085
5,018
18,044
11,085
5,018
18,058
11,085
5,018
18,085
11,084
5,018
18,099
11,083
5,018
18,113
11,083
5,018
18,127
216,776
460
219,842
467
225,090
465
219,523
472
219,053
472
219,427
468
221,244
469
223,133
474
223,545
473
224,677
466
9,120
456
8,898
236
3,594
352
3,745
200
14,323
221
14,324
301
3,149
297
3,260
198
2,921
194
2,767
261
1,706
419
1,733
477
1,717
450
1,714
348
1,713
309
1,732
371
1,733
328
1,735
325
1,735
310
1,718
482
23 Reserve Bank credit
24
25
26
27
28
29
30
31
32
33
ABSORBING RESERVE FUNDS
37 Currency in circulation
38 Treasury cash holdings 2
Deposits, other than reserve balances, with
Federal Reserve Banks
39
Treasury
40
Foreign
41
Service-related balances and
adjustments
42
Other
43 Other Federal Reserve liabilities and
capital
44 Reserve balances with Federal
Reserve Banks
6,663
7,950
7,968
6,884
7,076
7,167
7,279
7,755
7,039
7,068
37,321
41,454
40,064
40,783
34,436
41,647
35,802
37,738
35,914
36,470
1. Includes securities loaned—fully guaranteed by U.S. government securities
pledged with Federal Reserve Banks—and excludes any securities sold and
scheduled to be bought back under matched sale-purchase transactions.
2. Revised for periods between October 1986 and April 1987. At times during
this interval, outstanding gold certificates were inadvertently in excess of the gold
stock. Revised data not included in this table are available from the Division of
Research and Statistics, Banking Section.
3. Excludes required clearing balances and adjustments to compensate for
float.
NOTE. For amounts of currency and coin held as reserves, see table 1.12.
Money Stock and Bank Credit
1.12 RESERVES AND BORROWINGS
A5
Depository Institutions
Millions of dollars
Monthly averages 8
Reserve classification
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks'
Total vault cash 2
Vault3
Surplus
Total reserves
Required reserves
Excess reserve balances at Reserve Banks
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
Extended credit at Reserve Banks
1984
1985
1986
1987
Dec.
Dec.
Dec.
Apr.
May
June
July
Aug.
Sept.
Oct.
21,738
22,313
18,958
3,355
40,696
39,843
853
3,186
113
2,604
27,620
22,953
20,522
2,431
48,142
47,085
1,058
1,318
56
499
37,360
24,071
22,199
1,872
59,560
58,191
1,369
827
38
303
37,807
23,353
21,587
1,767
59,393
58,566
827
993
120
270
36,466
23,693
21,873
1,820
58,339
57,260
1,079
1,035
196
288
36,309
24,380
22,475
1,905
58,784
57,594
1,190
776
259
273
36,110
24,631
22,728
1,903
58,838
58,078
761
672
283
194
35,616
24,649
22,745
1,904
58,361
57,329
1,032
647
279
132
36,685
24,860
23,128
1,732
59,813
59,020
793
940
231
409
37,249
25,596
23,857
1,739
61,106
59,977
1,128
948
189
449
Biweekly averages of daily figures for weeks ending
1987
11
12
13
14
15
16
17
18
19
20
1
Reserve balances with Reserve Banks
Total vault cash 2
Vault 5
Surplus . . . %
Total reserves
Required reserves
Excess reserve balances at Reserve Banks
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks ..
Extended credit at Reserve Banks
Aug. 26
Sept. 9
Sept. 23
Oct. 7
Oct. 21
Nov. 4
Nov. 18
Dec. 2
Dec. 16"
Dec. 30"
35,173
25,074
23,115
1,959
58,288
57,116
1,173
719
286
128
36,294
24,288
22,446
1,842
58,740
57,546
1,194
647
241
173
36,866
25,146
23,475
1,672
60,340
59,825
515
1,001
226
531
36,826
25,026
23,313
1,713
60,139
59,306
833
1,195
230
469
36,672
26,183
24,410
1,773
61,082
60,115
967
1,007
183
482
38,353'
25,174
23,464
1,710
61,817'
60,256
1,561'
677
169
390
37,525'
25,188
23,622'
1,566'
61,147'
60,665
492'
561
125
334
37,069
25,802
23,999
1,803
61,067
59,855
1,213
683
114
465
38,302
25,372
23,833
1,540
62,134
60,890
1,245
815
83
653
37,119
26,960
25,100
1,860
62,219
61,300
920
671
102
316
1. Excludes required clearing balances and adjustments to compensate for
float.
2. Dates refer to the maintenance periods in which the vault cash can be used
to satisfy reserve requirements. Under contemporaneous reserve requirements,
maintenance periods end 30 days after the lagged computation periods in which
the balances are held.
3. Equal to all vault cash held during the lagged computation period by
institutions having required reserve balances at Federal Reserve Banks plus the
amount of vault cash equal to required reserves during the maintenance period at
institutions having no required reserve balances.
4. Total vault cash at institutions having no required reserve balances less the
amount of vault cash equal to their required reserves during the maintenance
period.
5. Total reserves not adjusted for discontinuities consist of reserve balances
with Federal Reserve Banks, which exclude required clearing balances and
adjustments to compensate for float, plus vault cash used to satisfy reserve
requirements. Such vault cash consists of all vault cash held during the lagged
computation period by institutions having required reserve balances at Federal
Reserve Banks plus the amount of vault cash equal to required reserves during the
maintenance period at institutions having no required reserve balances.
6. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy
reserve requirements less required reserves.
7. Extended credit consists of borrowing at the discount window under the
terms and conditions established for the extended credit program to help
depository institutions deal with sustained liquidity pressures. Because there is
not the same need to repay such borrowing promptly as there is with traditional
short-term adjustment credit, the money market impact of extended credit is
similar to that of nonborrowed reserves.
8. Before February 1984, data are prorated monthly averages of weekly
averages; beginning February 1984, data are prorated monthly averages of
biweekly averages.
NOTE. These data also appear in the Board's H.3 (502) release. For address, see
inside front cover.
A6
DomesticNonfinancialStatistics • February 1988
1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS
Large Member Banks1
Averages of daily figures, in millions of dollars
1987 week ending Monday
Maturity and source
1
2
3
4
Federal funds purchased, repurchase agreements, and
other selected borrowing in immediately
available
funds
From commercial banks in the United States
For one day or under continuing contract
For all other maturities
From other depository institutions, foreign banks and
foreign official institutions, and United States government agencies
For one day or under continuing contract
For all other maturities
July 6 r
July 13
July 20
July 27
66,856
8,430
74,019
11,069
74,109
8,691
69,704
8,626
68,682
8,829
33,067
8,502
26,598
11,895
33,873
8,167
31,478
7,384
Aug. 3
Aug. 10
Aug. 17
68,983
9,624
72,747
9,252
71,952
8,970
31,316
7,122
32,783
7,206
32,923
6,753
32,524
6,517
Repurchase agreements on U.S. government and federal
agency securities in immediately available funds
Brokers and nonbank dealers in securities
For one day or under continuing contract
For all other maturities
All other customers
For one day or under continuing contract
For all other maturities
9,958
12,793
8,074
12,327
10,541
11,214
11,515
10,797
13,115
11,725
13,711
12,209
13,744
12,363
12,715
12,546
25,518
9,029
22,809
11,456
25,558
8,278
26,375
8,373
26,482
8,363
27,082
8,123
27,417
8,165
27,613
8,550
MEMO: Federal funds loans and resale agreements in immediately available funds in maturities of one day or
under continuing contract
9 To commercial banks in the United States
10 To all other specified customers
27,376
12,656
35,392
13,031
33,375
13,702
31,101
13,109
28,293
13,347
29,247
13,690
30,410
12,886
29,547
11,853
5
6
7
8
1. Banks with assets of $1 billion or more as of Dec. 31, 1977.
2. Brokers and nonbank dealers in securities; other depository institutions;
foreign banks and official institutions; and United States government agencies.
Policy Instruments
A7
1.14 FEDERAL RESERVE BANK INTEREST RATES
Percent per year
Current and previous levels
Extended Credit 2
Adjustment Credit
and
Seasonal Credit 1
Federal Reserve
Bank
On
12/31/87
Effective
Date
6
9/9/87
9/4/87
9/4/87
9/4/87
9/5/87
9/4/87
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco . . .
6
After 30 days of Borrowing 3
First 30 days of Borrowing
Previous
Rate
5
9/4/87
9/9/87
9/8/87
9/4/87
9/11/87
9/9/87
On
12/31/87
Effective
Date
Previous
Rate
On
12/31/87
Effective
Date
Previous
Rate
6
9/9/87
9/4/87
9/4/87
9/4/87
9/5/87
9/4/87
5 '/>
7.70
12/31/87
12/31/87
12/31/87
12/31/87
12/31/87
12/31/87
7.75
Vi
5'/!
9/4/87
9/9/87
9/8/87
9/4/87
9/11/87
9/9/87
6
5
Vi
7.70
12/31/87
12/31/87
12/31/87
12/31/87
12/31/87
12/31/87
Effective Date
12/17/87
12/17/87
12/17/87
12/17/87
12/17/87
12/17/87
12/17/87
12/17/87
12/17/87
12/17/87
12/17/87
12/17/87
7.75
Range of rates for adjustment credit in recent years 4
Effective date
In effect Dec. 31, 1977.
1978-—Jan. 9
20
May 11
12
July
3
10
Aug. 21
Sept. 22
Oct. 16
20
Nov. 1
3
1979-- J u l y 20
Aug. 17
20
Sept. 19
21
Oct. 8
10
15
19
May 29
30
June 13
16
1980-- F e b .
Range (or
level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
6
6 - 6 Vi
6
6!/2-7
7
7
7
6V2
7-71/4
7V4
m
8
8-8 W
SVi
9'/>
6V2
6V2
7V4
m
73/4
8
m
9Vl
9VI
10
10-10W
10
lOte
10^-11
11
11
12
12
IOV2 lOVi
11
11-12
12
12-13
13
12-13
12
11-12
11
13
13
13
12
11
11
Effective date
1980—July
28
29
Sept. 26
Nov. 17
Dec. 5
1981—May
Nov.
Dec.
5
8
2
6
4
1982—July
20
23
2
3
16
27
30
Oct. 12
13
Nov. 22
26
Dec. 14
15
17
Aug.
1. Adjustment credit is available on a short-term basis to help depository
institutions meet temporary needs for funds that cannot be met through reasonable alternative sources. After May 19, 1986, the highest rate established for loans
to depository institutions may be charged on adjustment credit loans of unusual
size that result from a major operating problem at the borrower's facility.
Seasonal credit is available to help smaller depository institutions meet regular,
seasonal needs for funds that cannot be met through special industry lenders and
that arise from a combination of expected patterns of movement in their deposits
and loans. A temporary simplified seasonal program was established on Mar. 8,
1985, and the interest rate was a fixed rate Vi percent above the rate on adjustment
credit. The program was re-established on Feb. 18, 1986 and again on Jan. 28,
1987; the rate may be either the same as that for adjustment credit or a fixed rate
Vi percent higher.
2. Extended credit is available to depository institutions, where similar assistance is not reasonably available from other sources, when exceptional circumstances or practices involve only a particular institution or when an institution is
experiencing difficulties adjusting to changing market conditions over a longer
period of time.
3. For extended-credit loans outstanding more than 30 days, a flexible rate
Range (or
level)—
All F.R.
Banks
10-11
10
11
12
12-13
13-14
14
13-14
13
12
1114-12
1
ll /!
11-llVt!
F.R.
Bank
of
N.Y.
10
10
11
12
13
1984—Apr.
14
14
13
13
12
1985—May 20
24
UVl
11V5
11
11
11
10-10W
10
10
IOV2 10W
10
9^-10
9V4
9 - 9 Yl
9
m~9
8i/>-9
SV2
Effective date
9V2
9
13
Nov. 21
26
Dec. 24
1986—Mar.
7
10
Apr. 21
July 11
Aug. 12
22
1987—Sept.
4
11
In effect December 31, 1987
Range (or
level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
8Vi>-9
9
8^-9
9
9
8
8
KVi
8>/2 m
lVi-% 7W.
IVi
V/i
1-lVi 1
1
1
6Vi
m-i
6
6
5'/>-6
5 Vi.
5 Vi
5 Vi
5Vi-6 6
6
6
6
6
9'/2
9
9
9
SV2
8VS
somewhat above rates on market sources of funds ordinarily will be charged, but
in no case will the rate charged be less than the basic discount rate plus 50 basis
points. The flexible rate is re-established on the first business day of each
two-week reserve maintenance period. At the discretion of the Federal Reserve
Bank, the time period for which the basic discount rate is applied may be
shortened.
4. For earlier data, see the following publications of the Board of Governors:
Banking and Monetary Statistics, 1914-1941, and 1941-1970; Annual
Statistical
Digest, 1970-1979.
In 1980 and 1981, the Federal Reserve applied a surcharge to short-term
adjustment credit borrowings by institutions with deposits of $500 million or more
that had borrowed in successive weeks or in more than 4 weeks in a calendar
quarter. A 3 percent surcharge was in effect from Mar. 17, 1980 through May 7,
1980. There was no surcharge until Nov. 17,1980, when a 2 percent surcharge was
adopted; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and
to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective
Sept. 22, 1981, and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981 the
formula for applying the surcharge was changed from a calendar quarter to a
moving 13-week period. The surcharge was eliminated on Nov. 17, 1981.
A8
DomesticNonfinancialStatistics • February 1988
1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1
Percent of deposits
Type of deposit, and
deposit interval 2
Depository institution requirements
after implementation of the
Monetary Control Act
Effective date
Net transaction accounts '
$0 million-$40.5 million
More than $40.5 million . . .
12/30/86
12/30/86
Nonpersonal time deposits5
By original maturity
Less than 1 Vi years
1 Vi years or more
10/6/86
10/6/83
Eurocurrency
All types
liabilities
1. Reserve requirements in effect on Dec. 31, 1987. Required reserves must be
held in the form of deposits with Federal Reserve Banks or vault cash. Nonmembers may maintain reserve balances with a Federal Reserve Bank indirectly on a
pass-through basis with certain approved institutions. For previous reserve
requirements, see earlier editions of the Annual Report and of the FEDERAL
RESERVE BULLETIN. Under provisions of the Monetary Control Act, depository
institutions include commercial banks, mutual savings banks, savings and loan
associations, credit unions, agencies and branches of foreign banks, and Edge
corporations.
2. The Garn-St Germain Depository Institutions Act of 1982 (Public Law
97-320) requires that $2 million of reservable liabilities (transaction accounts,
nonpersonal time deposits, and Eurocurrency liabilities) of each depository
institution be subject to a zero percent reserve requirement. The Board is to adjust
the amount of reservable liabilities subject to this zero percent reserve requirement each year for the succeeding calendar year by 80 percent of the percentage
increase in the total reservable liabilities of all depository institutions, measured
on an annual basis as of June 30. No corresponding adjustment is to be made in
the event of a decrease. On Dec. 15, 1987, the exemption was raised from $2.9
million to $3.2 million. In determining the reserve requirements of depository
institutions, the exemption shall apply in the following order: (1) net NOW
accounts (NOW accounts less allowable deductions); (2) net other transaction
accounts; and (3) nonpersonal time deposits or Eurocurrency liabilities starting
11/13/80
with those with the highest reserve ratio. With respect to NOW accounts and
other transaction accounts, the exemption applies only to such accounts that
would be subject to a 3 percent reserve requirement.
3. Transaction accounts include all deposits on which the account holder is
permitted to make withdrawals by negotiable or transferable instruments, payment orders of withdrawal, and telephone and preauthorized transfers in excess of
three per month for the purpose of making payments to third persons or others.
However, MMDAs and similar accounts subject to the rules that permit no more
than six preauthorized, automatic, or other transfers per month, of which no more
than three can be checks, are not transaction accounts (such accounts are savings
deposits subject to time deposit reserve requirements).
4. The Monetary Control Act of 1980 requires that the amount of transaction
accounts against which the 3 percent reserve requirement applies be modified
annually by 80 percent of the percentage increase in transaction accounts held by
all depository institutions, determined as of June 30 each year. Effective Dec. 29,
1987, the amount was increased from $36.7 million to $40.5 million.
5. In general, nonpersonal time deposits are time deposits, including savings
deposits, that are not transaction accounts and in which a beneficial interest is
held by a depositor that is not a natural person. Also included are certain
transferable time deposits held by natural persons and certain obligations issued
to depository institution offices located outside the United States. For details, see
section 204.2 of Regulation D.
Policy Instruments
A9
1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1
Millions of dollars
1987
Type of transaction
1984
1985
1986
Apr.
May
June
July
Aug.
Sept.
Oct.
U . S . TREASURY SECURITIES
Outright transactions (excluding matched
transactions)
1
2
J
4
Treasury bills
Gross purchases
Gross sales
Exchange
Redemptions
Others within 1 year
Gross purchases
Gross sales
Maturity shift
/
Exchange
8
9
Redemptions
5
B
1 to 5 years
10
Gross purchases
11 Gross sales
12 Maturity shift
13 Exchange
20,036
8,557
0
7,700
22,214
4,118
0
3,500
22,602
2,502
0
1,000
4,226
653
0
0
1,697
0
0
0
575
22
0
0
575
912
0
4,572
499
0
0
0
4,528
0
0
3,657
1,095
300
0
0
1,126
0
16,354
1,349
0
19,763
190
0
18,673
1,232
0
1,375
0
0
4,063
535
0
1,715
0
0
1,437
0
0
2,723
443
300
1,500
300
0
816
-20,840
0
-17,717
0
-20,179
0
-522
0
-1,336
0
-1,812
0
-613
0
-1,787
0
-917
-1,178
1,638
0
893
0
-17,058
16,984
3,642
0
-1,373
522
0
0
-1,804
1,111
1,394
0
-1,715
1,812
0
5
200
-1,397
613
0
-2,122
1,612
2,551
0
-1,500
917
1,178
0
312
0
0
0
0
0
0
-40
0
-601
100
619
0
0
0
-55
0
251
0
0
0
0
0
0
0
493
0
0
0
0
0
0
0
0
75
0
0
*
0
16,039
2,185
0
-17,459
13,853
5 to 10 years
14 Gross purchases
IS
Gross sales
Maturity shift
16
Exchange
17
536
300
-2,371
2,750
458
100
-1,857
2,184
236
0
-1,620
2,050
914
Over 10 years
18
Gross purchases
Gross sales
19
Maturity shift
20
Exchange
21
441
293
0
-447
1,679
158
-275
2,052
1,150
669
0
0
0
23,776
8,857
7,700
26,499
4,218
3,500
24,078
2,502
1,000
10,683
653
0
1,697
0
3,066
22
0
575
1,112
4,572
504
0
0
8,633
300
3,657
1,395
300
0
808,986
810,432
866,175
865,968
927,997
927,247
83,822
82,494
91,642
92,137
87,228
87,128
80,304
80,037
60,731
62,594
61,321
61,347
77,497
73,779
127,933
127,690
134,253
132,351
170,431
160,268
37,653
23,881
59,340
73,111
24,167
22,108
3,298
2,058
9,013
12,311
34,080
34,080
65,675
57,380
8,908
20,477
29,989
22,474
-11,580
5,002
-4,136
-931
4,702
5,673
0
0
0
162
0
0
398
0
0
37
0
0
0
0
0
0
0
59
0
0
0
0
256
0
0
0
56
11,509
11,328
22,183
20,877
31,142
30,522
9,265
5,908
16,071
19,428
3,907
2,910
929
996
2,369
3,298
7,174
7,174
18,523
15,607
-76
1,144
222
3,320
-3,357
997
-126
-929
0
2,860
-418
0
0
0
0
0
0
0
0
0
8,414
21,621
30,211
25,794
-14,936
5,999
-4,262
•1,861
4,702
8,533
-13,709
0
All maturities
22 Gross purchases
23 Gross sales
24 Redemptions
Matched transactions
25 Gross sales
26 Gross purchases
Repurchase agreements
27 Gross purchases
28 Gross sales
0
0
0
-3
0
-2,259
150
0
0
0
75
0
0
0
0
0
-761
0
0
2
29 Net change in U.S. government securities
FEDERAL AGENCY OBLIGATIONS
Outright transactions
30 Gross purchases
31 Gross sales
32 Redemptions
Repurchase agreements 2
33 Gross purchases
34 Gross sales
35 Net change in federal agency obligations
0
0
*
BANKERS ACCEPTANCES
36 Repurchase agreements, net
37 Total net change in System Open Market
Account
1. Sales, redemptions, and negative figures reduce holdings of the System Open
Market Account; all other figures increase such holdings. Details may not add to
totals because of rounding.
2. In July 1984 the Open Market Trading Desk discontinued accepting bankers
acceptances in repurchase agreements,
A10
DomesticNonfinancialStatistics • February 1988
1.18 FEDERAL RESERVE BANKS
Condition and Federal Reserve Note Statements1
Millions of dollars
Account
Oct. 28
Nov. 4
Wednesday
End of month
1987
1987
Nov. 11
Nov. 18
Nov. 25
Sept.
Oct.
Nov.
Consolidated condition statement
ASSETS
1 Gold certificate account
2 Special drawing rights certificate account
3
Loans
4 To depository institutions
5
Other
6 Acceptances held under repurchase agreements
Federal agency obligations
7
Bought outright
8
Held under repurchase agreements
U.S. Treasury securities
Bought outright
9
Bills
10
Notes
11
Bonds
12
Total bought outright
13 Held under repurchase agreements
14 Total U.S. Treasury securities
15 Total loans and securities
16 Items in process of collection
17 Bank premises
Other assets
18 Denominated in foreign currencies 3
19 All other 4
20 Total assets
11,085
5,018
455
11,085
5,018
456
11,084
5,018
449
11,083
5,018
450
11,083
5,018
443
11,075
5,018
449
11,085
5,018
461
11,082
5,018
446
753
0
0
573
0
0
473
0
0
662
0
0
602
0
0
1,941
0
0
587
0
0
790
0
0
7,568
4,078
7,567
0
7,567
788
7,567
380
7,567
0
7,623
0
7,567
2,916
7,567
2,277
104,998
78,844
27,611
211,453
8,254
219,707
103,878
78,994
27,612
210,484
0
210,484
104,362
79,189
27,612
211,163
2,670
213,833
105,894
79,154
27,762
212,810
190
213,000
108,497
79,274
27,761
215,532
0
215,532
105,785
78,544
27,612
211,941
0
211,941
102,863
78,844
27,612
209,319
8,295
217,614
106,457
79,345
27,761
213,563
5,397
218,960
232,106
218,624
222,661
221,609
223,701
221,505
228,684
229,594
7,870
694
7,337
698
8,028
698
8,144
643
6,571
697
7,532
688
7,197
698
4,901
698
8,071
8,374
8,217
7,980
8,034
8,412
7,854
6,285
7,864
6,444
8,038
8,344
8,268
8,637
8,064
6,688
273,673
259,415
264,384
261,086
261,821
262,649
270,048
266,491
LIABILITIES
202,292
204,084
205,956
206,354
207,459
199,680
202,712
207,873
22
23
24
25
43,379
14,324
301
371
37,535
3,149
297
328
39,473
3,260
198
325
37,649
2,921
194
310
38,188
2,767
261
482
39,027
9,120
456
419
43,187
8,898
236
477
41,781
3,594
352
450
26 Total deposits
58,375
41,309
43,256
41,074
41,698
49,022
52,798
46,177
5,839
2,807
6,743
2,599
7,417
2,792
6,619
2,746
5,596
2,720
7,284
2,386
6,588
3,134
4,473
2,985
269,313
254,735
259,421
256,793
257,473
258,372
265,232
261,508
2,017
1,873
470
2,021
1,873
786
2,023
1,873
1,067
2,026
1,853
414
2,032
1,853
463
2,009
1,873
395
2,019
1,873
924
2,032
1,873
1,078
33 Total liabilities and capital accounts
273,673
259,415
264,384
261,086
261,821
262,649
270,048
266,491
34 MEMO: Marketable U.S. Treasury securities held in
custody for foreign and international account
188,156
188,247
188,770
192,067
191,618
182,078
188,928
193,044
21 Federal Reserve notes
Deposits
To depository institutions
U.S. Treasury—General account
Foreign—Official accounts
Other
27 Deferred credit items
28 Other liabilities and accrued dividends
29 Total liabilities
CAPITAL ACCOUNTS
30 Capital paid in
31 Surplus
32 Other capital accounts
Federal Reserve note statement
35 Federal Reserve notes outstanding issued to bank
36
LESS: Held by bank
37
Federal Reserve notes, net
Collateral held against notes net:
38
Gold certificate account
39
Special drawing rights certificate account
40
Other eligible assets
41
U.S. Treasury and agency securities
253,666
51,374
202,292
253,834
49,750
204,084
254,111
48,155
205,956
254,473
48,119
206,354
254,458
46,999
207,459
252,932
53,252
199,680
253,538
50,826
202,712
254,499
46,626
207,873
11,085
5,018
0
186,189
11,085
5,018
0
187,981
11,084
5,018
0
189,854
11,083
5,018
0
190,253
11,083
5,018
0
191,358
11,075
5,018
0
183,587
11,085
5,018
0
186,609
11,082
5,018
0
191,773
42 Total coUateral
202,292
204,084
205,956
206,354
207,459
199,680
202,712
207,873
1. Some of these data also appear in the Board's H.4.1 (503) release. For
address, see inside front cover.
2. Includes securities loaned—fully guaranteed by U.S. Treasury securities
pledged with Federal Reserve Banks—and excludes securities sold and scheduled
to be bought back under matched sale-purchase transactions.
3. Valued monthly at market exchange rates.
4. Includes special investment account at the Federal Reserve Bank of Chicago
in Treasury bills maturing within 90 days.
5. Includes exchange-translation account reflecting the monthly revaluation at
market exchange rates of foreign-exchange commitments.
Federal Reserve Banks
All
1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holdings
Millions of dollars
Type and maturity groupings
Wednesday
End of month
1987
1987
Oct. 28
Nov. 4
Nov. 11
Nov. 18
Nov. 25
Sept. 30
Oct. 30
Nov. 30
1 Loans—Total
2
Within 15 days
3
16 days to 90 days
91 days to 1 year
4
753
715
38
0
573
517
56
0
473
423
50
0
662
629
33
0
602
585
17
0
1,941
1,878
61
2
587
525
62
0
790
765
25
0
5 Acceptances—Total
6
Within 15 days
7
16 days to 90 days
91 days to 1 year
8
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
219,707
19,528
51,179
66,894
42,513
14,764
24,829
210,484
10,027
47,698
70,014
43,152
14,764
24,829
213,833
9,591
51,502
69,995
43,152
14,764
24,829
213,000
11,289
45,820
72,139
44,056
14,717
24,979
215,532
13,426
49,133
69,221
44,056
14,717
24,979
211,941
12,767
49,795
67,296
42,435
14,819
24,829
217,614
13,609
51,679
70,220
42,513
14,764
24,829
218,960
9,805
52,165
72.716
44,580
14.717
24,977
11,646
4,218
757
1,474
3,574
1,407
216
7,567
0
902
1,469
3,574
1,407
215
8,355
895
794
1,583
3,460
1,407
216
7,947
727
579
1,558
3,460
1,407
216
7,567
240
619
1,668
3,437
1,387
216
7,623
359
602
1,446
3,615
1,321
280
10,483
3,056
757
1,474
3,574
1,407
215
9,843
2,527
568
1,621
3,524
1,387
216
9 U.S. Treasury securities—Total
10 Within 15 days'
11
16 days to 80 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
16 Federal agency obligations—Total
17 Within 15 days'
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
1. Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements.
A12
DomesticNonfinancialStatistics • February 1988
1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE
Billions of dollars, averages of daily figures
1987
Item
1983
Dec.
1984
Dec.
1985
Dec.
1986
Dec.
Apr.
May
June
July
Aug.
Sept.
Oct/
Nov.
Seasonally adjusted
ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS 1
1 Total reserves2
2
3
4
5
Nonborrowed reserves
Nonborrowed reserves plus extended credit
Required reserves
Monetary base
36.11
39.91
46.06
56.17
57.95
58.35
57.71
57.60
57.88
57.83
58.50
58.00
35.33
35.33
35.55
185.23
36.72
39.33
39.06
199.60
44.74
45.24
45.00
217.32
55.34
55.64
54.80
239.51
56.96
57.23
57.13
246.59
57.32
57.60
57.27
248.37
56.93
57.20
56.52
248.48
56.93
57.12
56.84
249.46
57.23
57.36
56.84
250.80
56.89
57.29
57.03
251.85
57.55
58.00
57.37
254.35
57.38
57.77
57.07
256.12
Not seasonally adjusted
6 Total reserves2
7
8
9
10
Nonborrowed reserves
Nonborrowed reserves plus extended credit
Required reserves
Monetary base 4
36.81
40.94
47.24
57.64
58.37
57.30
57.63
57.74
57.39
57.50
58.04
58.11
36.04
36.04
36.25
188.50
37.75
40.35
40.08
202.70
45.92
46.42
46.18
220.82
56.81
57.11
56.27
243.63
57.38
57.65
57.54
246.07
56.26
56.55
56.22
246.83
56.85
57.12
56.43
249.29
57.07
57.27
56.98
251.42
. 56.74
56.88
56.36
251.42
56.56
56.96
56.70
251.60
57.09
57.54
56.91
253.29
57.48
57.88
57.17
256.86
38.89
40.70
48.14
59.56
59.39
58.34
58.78
58.84
58.36
59.81
61.11
61.22
38.12
38.12
38.33
192.26
37.51
40.09
39.84
204.18
46.82
47.41
47.08
223.53
58.73
59.04
58.19
247.71
58.40
58.19
58.57
249.24
57.30
58.03
57.26
249.94
58.01
58.34
57.59
252.54
58.17
58.37
58.08
254.67
57.71
57.76
57.33
254.36
58.87
58.85
59.02
255.69
60.16
61.22
59.98
258.08
60.59
60.80
60.28
261.71
N O T ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS 5
11 Total reserves2
17
13
14
15
Nonborrowed reserves
Nonborrowed reserves plus extended credit
Required reserves
Monetary base
1. Figures incorporate adjustments for discontinuities associated with the
implementation of the Monetary Control Act and other regulatory changes to
reserve requirements. To adjust for discontinuities due to changes in reserve
requirements on reservable nondeposit liabilities, the sum of such required
reserves is subtracted from the actual series. Similarly, in adjusting for discontinuities in the monetary base, required clearing balances and adjustments to
compensate for float also are subtracted from the actual series.
2. Total reserves not adjusted for discontinuities consist of reserve balances
with Federal Reserve Banks, which exclude required clearing balances and
adjustments to compensate for float, plus vault cash held during the lagged
computation period by institutions having required reserve balances at Federal
Reserve Banks plus the amount of vault cash equal to required reserves during the
maintenance period at institutions having no required reserve balances.
3. Extended credit consists of borrowing at the discount window under the
terms and conditions established for the extended credit program to help
depository institutions deal with sustained liquidity pressures. Because there is
not the same need to repay such borrowing promptly as there is with traditional
short-term adjustment credit, the money market impact of extended credit is
similar to that of nonborrowed reserves.
4. The monetary base not adjusted for discontinuities consists of total reserves
plus required clearing balances and adjustments to compensate for float at Federal
Reserve Banks and the currency component of the money stock less the amount
of vault cash holdings of thrift institutions that is included in the currency
component of the money stock plus, for institutions not having required reserve
balances, the excess of current vault cash over the amount applied to satisfy
current reserve requirements. After the introduction of contemporaneous reserve
requirements (CRR), currency and vault cash figures are measured over the
weekly computation period ending Monday.
Before CRR, all components of the monetary base other than excess reserves
are seasonally adjusted as a whole, rather than by component, and excess
reserves are added on a not seasonally adjusted basis. After CRR, the seasonally
adjusted series consists of seasonally adjusted total reserves, which include
excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted
currency component of the money stock and the remaining items seasonally
adjusted as a whole.
5. Reflects actual reserve requirements, including those on nondeposit liabilities, with no adjustments to eliminate the effects of discontinuities associated with
implementation of the Monetary Control Act or other regulatory changes to
reserve requirements.
NOTE. Latest monthly and biweekly figures are available from the Board's
H.3(502) statistical release. Historical data and estimates of the impact on
required reserves of changes in reserve requirements are available from the
Banking Section, Division of Research and Statistics, Board of Governors of the
Federal Reserve System, Washington, D.C. 20551.
Monetary and Credit Aggregates
A13
1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES
Billions of dollars, averages of daily figures
1987
Item 1
1983
Dec.
1984
Dec.
1985
Dec.
1986
Dec.
Aug.
Sept.'
Oct.
751.1
2,862.8
3,603.9
4,253.0
8,038.1
751.3
2,876.0'
3,620.5'
4,282.2'
8,098.0'
760.7
2,892.8
3,643.9
4,317.5
8,161.5
756.6
2,892.3
3,658.4
n.a.
n.a.
194.5
7.0
294.1
255.6
196.2
7.0
300.4
257.2
198.4
7.0
295.7
255.6
July'
Seasonally adjusted
1 Ml
2 M2
M3
4 L
5 Debt
6
7
8
9
Ml components
Currency
Travelers checks
Demand deposits
Other checkable deposits
526.9
2,184.6
2,692.8
3,154.6
5,195.5
557.5
2,369.1
2,985.4
3,528.1
5,932.9
627.0
2,569.5
3,205.2
3,837.6
6,746.9
730.5
2,801.2
3,492.2
4,139.9
7,598.5'
148.3
4.9
242.3
131.4
158.5
5.2
248.3
145.5
170.6
5.9
272.2
178.3
183.5
6.4
308.3
232.2
193.2
6.9
296.4
254.6
1,657.7
508.2
1,811.5
616.3
1,942.5
635.7
2,070.7
691.0
2,111.7
741.1
2,124.7'
744.5'
2,132.0
751.2
2,135.7
766.1
10
11
Nontransactions components
In M26
In M3 only
12
13
Savings deposits 8
Commercial Banks
Thrift institutions
133.2
173.0
122.2
166.6
124.6
179.0
154.5
211.8
178.0
241.8
178.0
241.3
177.5
239.3
177.0
235.0
14
15
Small denomination time deposits 9
Commercial Banks
Thrift institutions
350.9
432.9
386.6
498.6
383.9
500.3
364.7
488.7
365.4
500.1
367.3
504.3
373.0
509.9
380.9
520.8
16
17
Money market mutual funds
General purpose and broker/dealer
Institution-only
138.2
43.2
167.5
62.7
176.5
65.1
207.6
84.1
212.2
83.4
215.5'
80.7
218.1
81.6
220.2
88.5
18
19
Large denomination time deposits 10
Commercial Banks
Thrift institutions
230.0
96.2
269.6
147.3
284.1
152.1
291.8
155.3
313.7
153.1
313.6
155.3
317.0
159.1
323.2
162.7
20
21
Debt components
Federal debt
Nonfederal debt
1,170.8
4,024.6
1,365.3
4,567.6
1,584.3
5,162.6
1,804.5'
5,794.0r
1,902.8
6,135.3
1,913.1'
6,184.9'
1,919.3
6,242.1
n.a.
n.a.
749.4
2,860.8
3,599.4
4,249.6
8,016.5
749.4
2,868.8'
3,615.2'
4,277.0'
8,081.9'
757.7
2,888.7
3,639.6
4,311.4
8,147.3
759.7
2,894.7
3,662.7
n.a.
n.a.
Not seasonally adjusted
?,?,
23
24
25
26
Ml
M2
M3
L
Debt
27
28
29
30
Ml components
Currency
Travelers checks
Demand deposits
Other checkable deposits
31
32
Nontransactions components
M26
M3 only 7
33
34
538.3
2,191.6
2,702.4
3,163.1
5,189.7
570.3
2,378.3
2,997.2
3,538.8
5,927.1
641.0
2,580.5
3,218.4
3,849.4
6,740.6r
746.5
2,814.7
3,507.5
4,153.3
7,591.7'
150.6
4.6
251.0
132.2
160.8
4.9
257.2
147.4
173.1
5.5
282.0
180.4
186.2
6.0
319.5
235.0
194.1
7.9
294.8
252.6
194.3
7.6
293.3
254.3
195.9
7.0
299.8
255.0
199.3
6.6
298.0
255.8
1,653.3
510.8
1,808.0
618.9
1,939.5
637.9
2,068.2
692.8
2,111.4
738.6
2,119.4'
746.4'
2,131.0
750.9
2,134.9
768.0
Money market deposit accounts
Commercial Banks
Thrift institutions
230.4
148.5
267.4
150.0
332.5
180.7
379.0
192.4
364.1
179.6
362.5
176.8
359.1
173.6
357.2
169.2
35
36
Savings deposits 8
Commercial Banks
Thrift institutions
132.2
172.4
121.4
166.2
123.9
178.8
153.8
211.8
178.2
240.0
177.9
239.2
178.3
239.4
177.3
235.9
37
38
Small denomination time deposits 9
Commercial Banks
Thrift institutions
351.1
433.5
386.7
499.6
383.8
501.5
364.4
489.8
366.8
499.3
369.0
503.6
374.0
511.1
381.5
522.2
39
40
Money market mutual funds
General purpose and broker/dealer
Institution-only
138.2
43.2
167.5
62.7
176.5
65.1
207.6
84.1
212.2
83.4
215.5'
80.7
218.1
81.6
220.2
88.5
41
42
Large denomination time deposits 10
Commercial Banks
Thrift institutions
231.6
96.3
271.2
147.3
285.6
151.9
293.2
154.9
313.1
153.2
314.9
155.7
318.3
159.5
324.0
162.8
43
44
Debt components
Federal debt
Nonfederal debt
1,170.2
4,019.5
1,364.7
4,562.4
1,583.7
5,156.9
1,804.0'
5,787.8'
1,887.7
6,128.8
1,900.2'
6,181.7'
1,909.8
6,237.5
For notes see following page.
n.a.
n.a.
A14
DomesticNonfinancialStatistics • February 1988
NOTES TO TABLE 1.21
1. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults
of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits
at all commercial banks other than those due to domestic banks, the U.S.
government, and foreign banks and official institutions less cash items in the
process of collection and Federal Reserve float; and (4) other checkable deposits
(OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer
service (ATS) accounts at depository institutions, credit union share draft
accounts, and demand deposits at thrift institutions. The currency and demand
deposit components exclude the estimated amount of vault cash and demand
deposits respectively held by thrift institutions to service their OCD liabilities.
M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs)
issued by all commercial banks and overnight Eurodollars issued to U.S. residents
by foreign branches of U.S banks worldwide, MMDAs, savings and smalldenomination time deposits (time deposits—including retail RPs—in amounts of
less than $100,000), and balances in both taxable and tax-exempt general purpose
and broker/dealer money market mutual funds. Excludes individual retirement
accounts (IRA) and Keogh balances at depository institutions and money market
funds. Also excludes all balances held by U.S. commercial banks, money market
funds (general purpose and broker/dealer), foreign governments and commercial
banks, and the U.S. government. Also subtracted is a consolidation adjustment
that represents the estimated amount of demand deposits and vault cash held by
thrift institutions to service their time and savings deposits.
M3: M2 plus large-denomination time deposits and term RP liabilities (in
amounts of $100,000 or more) issued by commercial banks and thrift institutions,
term Eurodollars held by U.S. residents at foreign branches of U.S. banks
worldwide and at all banking offices in the United Kingdom and Canada, and
balances in both taxable and tax-exempt, institution-only money market mutual
funds. Excludes amounts held by depository institutions, the U.S. government,
money market funds, and foreign banks and official institutions. Also subtracted
is a consolidation adjustment that represents the estimated amount of overnight
RPs and Eurodollars held by institution-only money market mutual funds.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper and bankers acceptances, net of money
market mutual fund holdings of these assets.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. The source of data on domestic
nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt
data are based on monthly averages.
2. Currency outside the U.S. Treasury, Federal Reserve Banks, and, vaults of
commercial banks. Excludes the estimated amount of vault cash held by thrift
institutions to service their OCD liabilities.
3. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. Travelers checks issued by depository institutions are included in
demand deposits.
4. Demand deposits at commercial banks and foreign-related institutions other
than those due to domestic banks, the U.S. government, and foreign banks and
official institutions less cash items in the process of collection and Federal
Reserve float. Excludes the estimated amount of demand deposits held at
commercial banks by thrift institutions to service their OCD liabilities.
5. Consists of NOW and ATS balances at all depository institutions, credit
union share draft balances, and demand deposits at thrift institutions. Other
checkable deposits seasonally adjusted equals the difference between the seasonally adjusted sum of demand deposits plus OCD and seasonally adjusted demand
deposits. Included are all ceiling free "Super NOWs," authorized by the
Depository Institutions Deregulation committee to be offered beginning Jan. 5,
1983.
6. Sum of overnight RPs and overnight Eurodollars, money market fund
balances (general purpose and broker/dealer), MMDAs, and savings and small
time deposits, less the consolidation adjustment that represents the estimated
amount of demand deposits and vault cash held by thrift institutions to service
their time and savings deposits liabilities.
7. Sum of large time deposits, term RPs, and term Eurodollars of U.S.
residents, money market fund balances (institution-only), less a consolidation
adjustment that represents the estimated amount of overnight RPs and Eurodollars held by institution-only money market funds.
8. Savings deposits exclude MMDAs.
9. SmnaD-denomination time deposits—including retail RPs—are those issued
in amounts of less than $100,000. All individual retirement accounts (IRA) and
Keogh accounts at commercial banks and thrifts are subtracted from small time
deposits.
10. Large-denomination time deposits are those issued in amounts of $100,000
or more, excluding those booked at international banking facilities.
11. Large-denomination time deposits at commercial banks less those held by
money market mutual funds, depository institutions, and foreign banks and
official institutions.
NOTE. Latest monthly and weekly figures are available from the Board's H.6
(508) release. Historical data are available from the Banking Section, Division of
Research and Statistics, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551.
Monetary and Credit Aggregates
A15
1.22 BANK DEBITS AND DEPOSIT TURNOVER1
Debits are shown in billions of dollars, turnover as ratio of debits to deposits. Monthly data are at annual rates.
1986
Bank group, or type of customer
Apr.
June
July
Aug.
Sept.
Seasonally adjusted
DEBITS TO
Demand deposits
All insured banks
1
Major New York City banks
2
3
Other banks
4 ATS-NOW accounts 4
5 Savings deposits
May
131,463.1
57,327.3
74,135.9
1,549.1
414.7
156,091.6
70,585.8
85,505.9
1,823.5
384.9
188,345.8''
91,397.3''
96,948.8''
2,182.5
403.5
217,797.2''
105,186.5'
112,610.7'
2,384.2'
508.1
217,397.2'
107,724.1'
109,673.1'
2,310.5
488.5
212,414.4'
103,027.6'
109,386.8'
2,417.6'
565.8'
219,501.3'
106,428.9'
113,072.3'
2,498.7
548.2
221,729.0'
109,062.5'
112,666.5'
2,333.1'
518.8'
219,174.5
105,161.2
114,013.3
2,343.0
523.6
441.0
1,837.2
277.8
15.3
3.3
500.3
2,196.9
305.7
15.8
3.2
556.5
2,498.2'
321.2
15.6
3.0
607.0
2,670.3'
352.6
13.8
3.0
598.5'
2,629.5'
340.3
13.3
2.8
601.6
2,671.6'
347.8
13.9
3.3
628.6
2,837.4'
362.8
14.3
3.1
623.3
2,718.2'
357.0
13.2
3.0
626.3
2,714.2
366.4
13.2
3.0
DEPOSIT TURNOVER
6
7
8
9
10
Demand deposits 3
All insured banks
Major New York City banks
Other banks
ATS-NOW accounts 4
Savings deposits
Not seasonally adjusted
DEBITS TO
Demand deposits
11 All insured banks
12 Major New York City banks
13 Other banks
14 ATS-NOW accounts 4
15 MMDA®
16 Savings deposits
131,450.6
57,282.4
74,164.2
1,552.2
862.3
415.2
156,052.3
70,559.2'
85,493.1
1,826.4
1,223.9
385.3
188,506.4'
91,500.0
97,006.6
2,184.6
1,609.4
404.1
228,142.6
111,399.0
116,743.5
2,564.0
2,175.9
563.3
208,310.0
101,203.2
107,106.7
2,262.9
1,851.2
483.7
221,038.4
106,171.3
114,867.0
2,466.9
1,987.9
565.2
228,764.2
111,157.7
117,606.5
2,466.0
2,002.7
576.5
214,145.9
103,822.8
110,323.1
2,226.4
1,752.7
524.2
216,710.3
104,234.0
112,476.2
2,408.9
1,833.2
518.6
441.1
1,838.6
277.9
15.4
3.5
3.3
499.9
2,196.3
305.6
15.8
4.0
3.2
556.7
2,499.1
321.2
15.6
4.5
3.0
634.8
2,825.8
364.9
14.4
5.8
3.3
584.0
2,556.8
337.8
13.2
5.1
2.8
625.0
2,801.5
363.8
14.3
5.4
3.3
651.7
2,928.4
375.7
14.3
5.5
3.3
612.5
2,721.9
354.2
12.8
4.8
3.0
621.2
2,751.0
361.7
13.7
5.1
3.0
DEPOSIT TURNOVER
17
18
19
20
21
22
Demand deposits 3
All insured banks
Major New York City banks
Other banks
ATS-NOW accounts 4
MMDA°
Savings deposits
1. These series have been revised to reflect new benchmark adjustments and
revised seasonal factors as well as some revisions of reported data. Historical
tables containing revised data for earlier periods may be obtained from the
Banking Section, Division of Monetary Affairs, Board of Governors of the
Federal Reserve System, Washington, D.C. 20551.
These data also appear on the Board's G.6 (406) release. For address, see inside
front cover.
2. Annual averages of monthly figures.
3. Represents accounts of individuals, partnerships, and corporations and of
states and political subdivisions.
4. Accounts authorized for negotiable orders of withdrawal (NOW) and accounts authorized for automatic transfer to demand deposits (ATS). ATS data are
available beginning December 1978.
5. Excludes ATS and NOW accounts, MMDA and special club accounts, such
as Christmas and vacation clubs.
6. Money market deposit accounts.
A16
DomesticNonfinancialStatistics • February 1988
1.23 LOANS AND SECURITIES
All Commercial Banks1
Billions of dollars; averages of Wednesday figures
1986
1987
Category
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Seasonally adjusted
1 Total loans and securities
2
2 U.S. government securities
3 Other securities
4 Total loans and leases 2
Commercial and industrial . . . . .
5
Bankers acceptances held . . .
6
7
Other commercial and
industrial
8
U.S. addressees 4
Non-U.S. addressees 4
9
10 Real estate
11 Individual
12
Security
13 Nonbank financial
institutions
14 Agricultural
15 State and political
subdivisions
16 Foreign banks
17 Foreign official institutions
18 Lease financing receivables
19 All other loans
2,089.8
2,118.3
2,119.7
2,126.2
2,147.3
2,160.6
2,167.1
2,169.5
2,189.0
2,206.7
2,225.8
2,223.4
309.9
196.9
1,583.0
541.4
6.4
316.3
190.2
1,611.8
554.1
6.8
315.2
193.8
1,610.7
553.8
6.8
314.3
195.5
1,616.4
551.7
6.2
315.8
197.2
1,634.3
553.9
6.5
320.1
197.6
1,642.9
555.9
6.8
316.9
198.5
1,651.7
558.0
6.8
319.8
196.9
1,652.8
555.5
6.7
328.6
194.9
1,665.5
555.6
7.5
331.7
194.6
1,680.4
560.5
7.5
332.3
194.3'
1,699.3
565.7
7.7
331.0
196.4
1,696.0
567.0
7.1
535.0
525.7
9.3
489.0
314.2
38.7
547.2
537.8
9.4
499.2
314.9
37.7
546.9
537.9
9.0
504.0
315.2
38.5
545.5
536.9
8.6
511.0
315.7
38.3
547.4
539.0
8.4
517.9
316.6
43.6
549.0
540.9
8.1
526.3
316.7
42.0
551.2
542.8
8.4
537.2
314.5
42.2
548.9
540.6
8.3
544.1
314.6
41.7
548.1
540.0
8.1
551.3
316.9
44.0
553.1
545.0
8.1
556.2
318.9
45.2r
558.0
550.0
7.9
564.3
320.4
46.4'
559.9
552.2
7.7
570.9
321.6
38.8
35.2
31.8
35.7
31.4
34.7
30.8
35.0
30.0
35.4
29.8
35.4
29.9
33.9
29.9
31.9
30.0
30.9
30.2
30.8
30.2
31.5
30.4
31.6
30.8
57.9
10.4
5.8
22.2
36.4
57.8
10.6
5.9
22.1
42.4
57.2
10.3
6.1
22.2
38.0
57.0
9.7
6.7
22.3
38.9
56.0
9.9
6.7
22.6
41.9
55.2
9.9
5.8
22.9
43.1
54.4
10.3
5.3
23.1
42.8'
53.2
9.4
5.2
23.2
44.0
52.6
9.5
5.1
23.3
46.1
52.5
9.8
5.1
23.8
47.3'
52.5'
lO^
5.4'
23.8
48.C
52.1
9.2
5.2
24.1
45.0
Not seasonally adjusted
20 Total loans and securities
2
21 U.S. government securities
22 Other securities
23 Total loans and leases 2
24
Commercial and industrial . . . .
25
Bankers acceptances held 3 ..
26
Other commercial and
industrial
27
U.S. addressees 4
28
Non-U.S. addressees
29
Real estate
30
Individual
31
Security
32
Nonbank financial
institutions
33
Agricultural
34
State and political
subdivisions
35
Foreign banks
36
Foreign official institutions
37
Lease financing receivables . . .
38
All other loans
2,105.2
2,123.7
2,121.6
2,127.8
2,148.4
2,157.9
2,166.8
2,164.5
2,180.5
2,204.2
2,216.1
2,224.2
308.3
198.1
1,598.7
544.3
6.7
314.6
193.7
1,615.4
552.4
6.7
318.9
194.1
1,608.6
551.7
6.7
317.2
194.4
1,616.2
554.5
6.2
317.7
195.2
1,635.4
556.5
6.4
319.7
196.8
1,641.4
557.5
6.7
317.4
197.1
1,652.4
559.1
6.9
321.0
194.8
1,648.7
554.6
6.7 r
327.5
195.3
1,657.7
552.7
7.4
330.4
195.5
1,678.2
559.3
7.6
328.4
194.8
1,692.9
563.0
7.5
330.3
196.9
1,697.0
566.6
7.2
537.6
528.8
8.8
489.9
317.8
41.0
545.8
537.1
8.7
499.3
317.9
39.4
545.0
536.3
8.7
503.1
314.7
37.5
548.3
539.9
8.4
509.8
313.3
38.6
550.0
541.6
8.4
516.7
314.4
45.1
550.8
542.5
8.3
525.4
314.8
42.0
552.3
543.7
8.6
536.8
313.2
43.0
547.8
539.0
8.8
544.3
313.5
40.9
545.3
536.8
8.5
551.5
316.7
41.5
551.7
543.3
8.4
557.3
319.8
43.6'
555.5
547.2
8.3
565.3
321.4
44.8'
559.4
551.0
8.4
572.1
322.7
39.0
36.3
31.5
35.7
30.7
33.8
29.9
33.8
29.1
34.8
29.1
34.9
29.7
34.0'
30.3
31.9
30.7
31.1
31.0
31.5
31.1
31.6'
31.1
32.1
30.9
57.9
10.9
5.8
22.2
41.2
57.8
10.7
5.9
22.4
43.1
57.2
10.5
6.1
22.4
41.5
57.0
9.7
6.7
22.5
41.2
56.0
9.5
6.7
22.7
43.9
55.2
9.6
5.8
22.9
43.6
54.4
10.0
5.3
23.2
43.2
53.2
9.4
5.2
23.1
42.0
52.6
9.3
5.1
23.2
42.9
52.5
10.0
5.1
23.6
44.4
52.5'
lo.y
5.4'
23.5
43.3'
52.1
9.3
5.2
23.8
43.3
1. These data also appear in the Board's G.7 (407) release.
2. Excludes loans to commercial banks in the United States.
3. Includes nonfinancial commercial paper held.
4. United States includes the 50 states and the District of Columbia.
Commercial Banking Institutions
A17
1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1
Monthly averages, billions of dollars
1986
1987
Source
Total nondeposit funds
Seasonally adjusted
Not seasonally adjusted
Federal funds, RPs, and other
borrowings from nonbanks
Seasonally adjusted
3
Not seasonally adjusted
4
5 Net balances due to foreign-related
institutions, not seasonally
adjusted
1
2
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
146.5
146.6
155.2
154.7
159.6
162.3
164.1
166.5
160.9
161.0
169.6
170.4
165.8
163. V
158.8
155.6
165.5r
165.6
177.0'
176.3
175.8
174.9'
173.0
174.6
165.5
165.7
171.0
170.5
171.6
174.3
170.4
172.7
171.3
171.4
169.6
170.4
167.7
165.0
166.5
163.3
166.9
167.0
166.0
165.4'
165.5'
164.5
166.3
167.9
-19.0
-15.7
-12.0
-6.3
-10.4
.0
-1.9
-7.8
-1.4'
10.9
10.3'
6.7
-30.6
73.3
42.7
-26.1
71.5
45.4
-23.8
68.3
44.5
-21.1
66.0
44.9
-23.0
70.5
47.5
-15.5
68.5
53.0
-15.5
67.1
51.5
-22.2
66.4
44.2
-17.7
64.5
46.8
-11.8
64.3
52.5
-14.7
68.1
53.4'
-17.0
70.8
53.8
11.5
70.9
82.5
10.4
75.1
85.5
11.8
72.9
84.7
14.8
71.1
85.9
12.6
72.7
85.3
15.5
75.5
91.0
13.6
77.2
90.8
14.5
77.2
91.7
16.3'
77.5
93.8
22.7
77.1
99.8
25.0
79.6
104.6
23.7
83.1
106.9
98.5
98.6
101.1
100.6
97.7
100.4
95.1
97.4
98.6
98.7
99.2
100.0
101.4
98.7
102.5
99.4
105.2
105.3
108.6
107.9
108.6
107.7
107.6
109.2
21.2
19.2
21.3
27.5
23.2
28.6
17.7
17.1
20.7
21.6
26.1
30.8
27.9
25.5
24.7
26.6
29.1
21.6
23.3
25.5
35.6
30.7
38.6
25.8
345.6
347.0
350.1
351.3
351.1
353.2
354.1
356.4
359.8
357.2
366.2
364.8
372.9
369.8
371.8
368.6
370.9
370.2
370.5
371.7
377.8
379.0
385.0
385.8
MEMO
6 Domestically chartered banks' net
positions with own foreign
branches, not seasonally
adjusted 4
7
Gross due from balances
8
Gross due to balances
9 Foreign-related institutions' net
positions with directly related
institutions, not seasonally
adjusted
10 Gross due from balances
11 Gross due to balances
Security RP borrowings
12 Seasonally adjusted®
13 Not seasonally adjusted
U.S. Treasury demand balances
14
Seasonally adjusted
15 Not seasonally adjusted
Time deposits, $100,000 or more 8
Seasonally adjusted
16
Not seasonally adjusted
17
1. Commercial banks are those in the 50 states and the District of Columbia
with national or state charters plus agencies and branches of foreign banks. New
York investment companies majority owned by foreign banks, and Edge Act
corporations owned by domestically chartered and foreign banks.
2. Includes seasonally adjusted federal funds, RPs, and other borrowings from
nonbanks and not seasonally adjusted net Eurodollars.
3. Other borrowings are borrowings on any instrument, such as a promissory
note or due bill, given for the purpose of borrowing money for the banking
business. This includes borrowings from Federal Reserve Banks and from foreign
banks, term federal funds, overdrawn due from bank balances, loan RPs, and
participations in pooled loans.
4. Averages of daily figures for member and nonmember banks.
5. Averages of daily data.
6. Based on daily average data reported by 122 large banks.
7. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at
commercial banks. Averages of daily data.
8. Averages of Wednesday figures.
A18
DomesticNonfinancialStatistics • February 1988
1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS
Last-Wednesday-of-Month Series1
Billions of dollars
1987
Account
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
2,284.8
482.2
296.1
186.1
26.4
1,776.3
160.1
1,616.2
551.1
499.9
317.0
248.3
2,279.4
484.7
298.8
185.9
29.0
1,765.6
156.7
1,608.9
551.5
503.5
314.7
239.2
2,279.2
486.2
299.5
186.7
25.2
1,767.8
154.3
1,613.5
555.3
510.7
313.1
234.4
2,306.2
492.5
305.1
187.5
23.3
1,790.3
151.8
1,638.5
555.5
519.0
315.2
248.9
2,318.9
495.4
307.0
188.4
21.4
1,802.1
160.4
1,641.7
558.2
527.4
314.8
241.3
2,313.4
493.2
303.4
189.8
20.2
1,800.0
150.9
1,649.1
558.0
539.1
312.6
239.5
2,324.3
497.7
308.2
189.4
20.4
1,806.2
157.5
1,648.7
551.8
547.3
314.5
235.2
2,342.2
501.7
312.7
189.0
20.0
1,820.5
162.5
1,658.0
551.6
552.7
317.2
236.6
2,368.8
502.6
312.7
189.9
19.5
1,846.7
158.3
1,688.3
564.6
559.1
321.0
243.6
2,396.9
504.1
314.9
189.2
19.7
1,873.1
174.2
1,698.9
564.1
566.6
322.5
245.6
2,385.2
508.6
316.6
192.0
20.3
1,856.3
163.0
1,693.3
566.2
572.9
322.8
231.4
214.4
33.4
23.7
74.5
206.3
28.4
23.5
71.4
203.8
31.1
22.9
68.1
209.7
29.8
24.0
74.5
230.8
37.9
25.1
81.3
213.1
33.8
24.2
74.4
207.1
32.8
24.4
68.6
209.3
37.6
24.6
65.6
221.6
33.3
24.4
81.3
222.0
38.6
24.9
78.8
213.5
34.1
24.0
75.8
34.0
48.8
33.0
50.1
32.7
49.0
33.9
47.5
37.2
49.3
31.1
49.7
31.6
49.6
31.4
50.0
32.6
50.0
32.9
46.8
33.5
46.2
A L L COMMERCIAL BANKING
INSTITUTIONS 2
1
2
3
4
5
6
7
8
9
10
11
12
Loans and securities
Investment securities
U.S. government securities
Other
Trading account assets
Total loans
Interbank loans
Loans excluding interbank
Commercial and industrial
Real estate
Individual
All other
13 Total cash assets
Reserves with Federal Reserve Banks.
14
15 Cash in vault
16 Cash items in process of collection . . .
17 Demand balances at U.S. depository
institutions
18 Other cash assets
201.3
201.1
202.1
204.0
208.7
203.8
189.0
190.7
200.6
192.4
193.2
20 Total assets/total liabilities and capital
2,700.5
2,686.8
2,685.2
2,719.9
2,758.3
2,730.4
2,720.4
2,742.2
2,791.0
2,811.2
2,791.8
21
22
23
24
25
26
27
1,898.3
577.8
532.3
788.2
432.7
188.0
181.5
1,895.5
569.2
535.9
790.3
425.6
184.6
181.2
1,899.6
568.8
539.7
791.2
414.9
188.7
181.9
1,919.5
590.7
535.1
793.6
422.7
195.2
182.5
1,939.1
596.9
538.6
803.6
435.6
200.3
183.3
1,923.4
578.2
535.0
810.1
428.3
201.3
177.4
1,924.6
573.7
536.0
814.9
424.0
201.1
170.7
1,926.4
572.6
535.2
435.1
209.2
171.4
1,968.4
610.7
532.7
825.0
424.6
225.0
172.9
1,967.4
596.5
529.2
841.7
443.6
226.9
173.3
1,970.1
590.4
528.5
851.2
428.5
220.3
173.0
314.5
320.1
316.7
318.9
320.6
315.8
322.6
326.3
326.6
328.8
331.0
194.1
193.7
194.7
196.9
196.1
197.6
195.5
195.4
195.5
194.9
197.9
2,136.7
461.5
286.8
174.8
26.4
1,648.8
134.3
1,514.5
475.5
493.2
316.7
229.2
2,130.3
463.3
289.2
174.1
29.0
1,638.0
130.5
1,507.5
474.1
497.0
314.4
221.9
2,121.7
463.6
289.4
174.2
25.2
1,632.9
124.1
1,508.8
474.6
504.1
312.7
217.4
2,146.9
470.0
295.2
174.8
23.3
1,653.6
124.2
1,529.3
473.5
512.0
314.9
229.0
2,156.2
471.5
296.7
174.8
21.4
1,663.3
128.6
1,534.7
475.3
520.3
314.5
224.7
2,151.9
469.8
294.0
175.9
20.2
1,661.8
121.5
1,540.4
471.7
532.1
312.3
224.3
2,157.7
473.8
298.4
175.4
20.4
1,663.5
122.9
1,540.6
466.0
539.9
314.2
220.6
2,174.9
478.1
302.7
175.3
20.0
1,676.9
129.5
1,547.4
464.7
544.9
316.8
221.0
2,191.8
478.2
302.1
176.1
19.5
1,694.1
124.8
1,569.3
471.1
551.1
320.6
226.4
2,215.2
480.4
304.8
175.6
19.7
1,715.1
133.1
1,582.0
471.9
558.9
322.2
229.0
2,210.7
484.6
305.9
178.7
20.3
1,705.8
129.6
1,576.3
473.4
564.9
322.5
215.6
196.6
31.2
23.6
74.0
188.9
27.1
23.5
71.0
186.5
29.7
22.8
67.7
192.5
27.2
24.0
74.0
213.2
35.9
25.0
80.9
195.3
32.1
24.1
73.9
189.1
31.4
24.4
68.1
190.1
36.2
24.6
65.1
201.4
31.0
24.4
80.7
205.1
36.5
24.9
78.2
196.6
31.5
23.9
75.4
32.2
35.6
31.1
36.4
31.1
35.2
31.9
35.4
35.1
36.2
29.3
35.9
29.8
35.4
29.8
34.4
30.6
34.7
31.1
34.4
31.8
33.9
19 Other assets
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
Residual (assets less liabilities)
818.6
MEMO
28 U.S. government securities (including
trading account)
29 Other securities (including trading account)
DOMESTICALLY CHARTERED
COMMERCIAL BANKS 3
30 Loans and securities
Investment securities
31
32
U.S. Treasury securities
Other
33
34
Trading account assets
35
Total loans
36
Interbank loans
37
Loans excluding interbank
38
Commercial and industrial
39
Real estate
Individual
40
41
All other
42 Total cash assets
Reserves with Federal Reserve Banks.
43
44
Cash in vault
45
Cash items in process of collection . . .
46
Demand balances at U.S. depository
institutions
47
Other cash assets
48 Other assets
49 Total assets/liabilities and capital
50
51
52
53
54
55
56
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
Residual (assets less liabilities)
141.5
144.0
143.4
144.4
143.1
134.4
121.8
121.5
135.9
131.1
124.4
2,474.8
2,463.2
2,451.5
2,483.8
2,512.5
2,481.5
2,468.7
2,486.5
2,529.1
2,551.3
2,531.7
1,840.8
569.4
530.3
741.1
341.7
114.0
178.3
1,838.2
561.3
533.9
743.0
336.1
110.8
178.1
1,840.7
560.5
537.7
742.5
319.1
113.0
178.8
1,857.1
582.2
533.1
741.8
328.2
119.1
179.4
1,876.5
588.4
536.6
751.4
337.1
118.8
180.2
1,861.5
569.7
533.0
758.8
328.6
117.1
174.3
1,863.9
565.6
533.9
764.4
321.1
116.1
167.6
1,864.7
564.3
533.0
767.3
335.8
117.6
168.3
1,906.3
602.0
530.6
773.7
326.5
126.5
169.8
1,905.3
587.8
527.0
790.5
346.7
129.1
170.2
1,908.5
581.9
526.2
800.3
324.5
128.8
169.9
1. Data have been revised because of benchmarking to new Call Reports and
new seasonal factors beginning July 1985. Back data are available from the
Banking Section. Board of Governors of the Federal Reserve System, Washington, D.C., 20551.
Figures are partly estimated. They include all bank-premises subsidiaries and
other significant majority-owned domestic subsidiaries. Loan and securities data
for domestically chartered commercial banks are estimates for the last Wednesday of the month based on a sample of weekly reporting banks and quarter-end
condition report data. Data for other banking institutions are estimates made for
the last Wednesday of the month based on a weekly reporting sample of
foreign-related institutions and quarter-end condition reports.
2. Commercial banking institutions include insured domestically chartered
commercial banks, branches and agencies of foreign banks, Edge Act and
Agreement corporations, and New York State foreign investment corporations.
3. Insured domestically chartered commercial banks include all member banks
and insured nonmember banks.
Weekly Reporting Commercial Banks
A19
1.26 ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of $1.4 Billion or More on
December 31, 1982, Assets and Liabilities
Millions of dollars, Wednesday figures
1987
Account
Sept. 30'
Oct. 7
Oct. 14r
Oct. 21 r
Oct. 28 r
Nov. 4
N o v . 11
N o v . 18
Nov. 25
105,260
100,096
117,946
98,677
111,358
104,047
106,338
100,794
99,175
1,015,743
1,010,425
1,012,098
1,030,451
1,025,873
1,028,725
1,019,353
1,019,937
1,013,391
3 U.S. Treasury and government agency
Trading acount
Investment account, by maturity
5
6
One year or less
7
Over one through five years
8
Over five years
9 Other securities
10
Trading account
11
Investment account
12
States and political subdivisions, by maturity
One year or less
13
Over one year
14
15
Other bonds, corporate stocks, and securities
16 Other trading account assets
115,592
13,848
101,744
16,930
45,402
39,413
67,910
2,943
64,'967
48,512
5,163
43,349
16,455
2,680
114,563
13,216
101,347
16,936
44,922
39,490
67,089
2,382
64,707
48,223
5,184
43,039
16,484
3,178
113,777
12,399
101,378
17,019
44,795
39,564
66,972
2,385
64,587
48,172
5,189
42,983
16,415
3,137
115,454
14,769
100,686
16,748
44,143
39,794
66,894
2,470
64,424
48,055
5,109
42,946
16,369
2,804
116,719
13,971
102,748
16,028
45,184
41,536
67,420
2,623
64,798
48,090
5,120
42,970
16,707
3,025
116,718
14,666
102,052
15,884
44,434
41,734
68,571
2,596
65,975
47,846
5,212
42,633
18,129
2,960
115,659
13,988
101,671
15,953
44,354
41,363
68,499
2,467
66,031
47,797
5,216
42,580
18,234
3,027
118,855
15,399
103,456
15,934
45,044
42,478
68,772
2,415
66,357
47,598
5,227
42,370
18,759
3,114
117,548
14,452
103,096
15,798
45,030
42,268
69,038
2,551
66,486
47,541
5,219
42,322
18,945
3,293
17 Federal funds sold 1
18
To commercial banks
19
To nonbank brokers and dealers in securities
20
To others
21 Other loans and leases, gross
22
Other loans, gross
Commercial and industrial
23
24
Bankers acceptances and commercial paper
25
Mother
26
U.S. addressees
27
Non-U.S. addressees
65,820
40,249
17,597
7,974
802,692
783,240
275,160
2,168
272,992
270,055
2,937
65,558
40,908
17,098
7,552
798,859
779,515
274,229
2,208
272,021
268,891
3,130
66,163
40,739
18,094
7,330
800,894
781,528
273,962
2,353
271,609
268,639
2,970
74,313
46,976
19,449
7,887
809,764
790,351
273,675
2,234
271,441
268,446
2,994
69,345
41,459
19,416
8,470
808,234
788,782
275,102
2,404
272,698
269,668
3,030
74,436
46,827
19,153
8,455
805,026
785,507
276,798
2,289
274,509
271,479
3,030
69,181
40,005
20,972
8,204
801,998
782,294
276,220
2,275
273,944
270,870
3,075
66,010
39,997
18,031
7,982
802,076
782,378
276,269
2,349
273,920
270,970
2,950
61,422
37,024
16,687
7,712
800,960
781,232
275,525
2,224
273,301
270,342
2,959
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
237,239
142,491
48,839
20,575
4,772
23,492
18,102
5,712
31,996
2,864
20,837
19,452
4,648
34,303
763,740
126,182
239,289
142,010
47,723
20,236
4,510
22,978
17,144
5,744
31,859
2,852
18,665
19,343
4,634
34,188
760,037
123,503
240,040
142,152
50,161
21,446
5,696
23,019
16,008
5,725
31,743
2,938
18,798
19,366
4,646
34,200
762,048
122,111
240,550
142,355
50,491
22,322
5,2%
22,873
23,103
5,681
31,570
2,881
20,044
19,413
4,647
34,132
770,985
123,447
240,543
142,845
51,581
22,751
5,566
23,264
19,102
5,645
31,444
2,997
19,524
19,452
4,670
34,200
769,364
126,269
241,075
142,706
51,281
22,363
5,289
23,628
14,679
5,601
31,474
2,888
19,004
19,519
4,650
34,336
766,040
127,920
241,844
142,753
50,954
22,669
4,770
23,514
12,650
5,504
31,366
2,840
18,164
19,705
4,655
34,356
762,987
125,709
242,695
142,460
50,672
21,992
4,970
23,710
12,417
5,578
31,461
2,844
17,981
19,698
4,573
34,318
763,185
124,367
242,971
142,419
49,692
22,038
4,314
23,341
12,488
5,508
31,301
2,813
18,514
19,728
4,519
34,352
762,089
119,818
1,247,184
1,234,024
1,252,156
1,252,575
1,263,500
1,260,693
1,251,400
1,245,098
1,232,384
239,982
185,352
6,119
3,112
27,232
6,872
973
10,320
60,381
526,427
488,776
25,812
816
10,240
784
247,698
1,148
21,129
225,422
94,837
216,661
168,810
4,862
2,748
24,315
6,118
840
8,968
62,050
531,056
493,346
25,527
802
10,562
819
255,208
980
19,312
234,916
90,483
237,516
185,431
4,999
1,918
27,651
7,291
976
9,250
61,455
530,994
493,398
25,693
811
10,289
802
253,770
580
18,870
234,320
89,227
225,531
176,590
5,490
1,410
25,272
6,654
966
9,150
60,995
532,822
495,671
25,662
620
10,082
786
263,055
2,720
22,928
237,407
91,034
230,393
178,306
5,335
2,078
24,378
7,174
922
12,200
60,121
533,798
496,297
25,569
795
10,347
790
264,120
275
22,857
240,988
95,977
234,023
180,167
5,493
4,581
24,947
6,928
810
11,098
62,477
535,335
498,289
25,345
773
10,095
833
258,036
345
14,033
243,658
91,392
223,223
175,482
5,138
1,461
25,261
6,445
848
8,587
61,824
535,937
499,040
25,159
748
10,165
825
259,410
260
20,490
238,660
90,896
224,986
173,831
5,346
3,852
24,798
6,604
651
9,906
61,228
536,628
499,500
25,088
764
10,452
824
250,943
369
16,626
233,948
91,522
217,828
171,901
5,601
2,190
23,154
6,467
755
7,761
60,792
535,801
498,327
25,357
832
10,451
834
245,592
330
16,895
228,366
93,555
1,169,326
1,155,458
1,172,961
1,173,437
1,184,410
1,181,263
1,171,291
1,165,307
1,153,568
77,858
78,566
79,194
79,138
79,091
79,430
80,109
79,791
78,816
993,870
807,688
165,103
1,687
1,243
445
227,138
988,102
803,273
168,960
1,716
1,249
467
227,240
988,759
804,873
168,519
1,791
1,333
458
227,175
999,932
814,779
170,013
1,799
1,333
466
226,879
1,000,534
813,369
171,715
1,736
1,271
466
224,979
998,521
810,272
172,558
1,708
1,248
459
224,734
995,690
808,504
172,507
1,718
1,263
455
224,752
996,838
806,097
172,799
1,778
1,321
456
224,872
993,200
803,321
172,866
1,862
1,402
460
223,779
1 Cash and balances due from depository institutions
2 Total loans, leases and securities, net
4
Real estate loans
To individuals for personal expenditures
To depository and financial institutions
Commercial banks in the United States
Banks in foreign countries
Nonbank depository and other financial institutions .
For purchasing and carrying securities
To finance agricultural production
To states and political subdivisions
To foreign governments and official institutions
Mother
Lease financing receivables
LESS: Unearned income
Loan and lease reserve
Other loans and leases, net
M other assets
44 Total assets
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
Demand deposits
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Depository institutions in United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Transaction balances other than demand deposits
Nontransaction balances
Individuals, partnerships and corporations
States and political subdivisions
U.S. government
Depository institutions in the United States
Foreign governments, official institutions and banks
Liabilities for borrowed money
Borrowings from Federal Reserve Banks
Treasury tax-and-loan notes
M other liabilities for borrowed money
Other liabilities and subordinated note and debentures . .
65 Total liabilities
66 Residual (total assets minus total liabilities) 3
67
68
69
70
71
72
73
MEMO
Total loans and leases (gross) and investments adjusted
Total loans and leases (gross) adjusted
Time deposits in amounts of $100,000 or more
Loans sold outright to affiliates—total 5
Commercial and industrial
Other
Nontransaction savings deposits (including MMDAs)
..
1. Includes securities purchased under agreements to resell.
2. Includes federal funds purchased and securities sold under agreements to
repurchase; for information on these liabilities at banks with assets of $1 billion or
more on Dec. 31, 1977, see table 1.13.
3. This is not a measure of equity capital for use in capital-adequacy analysis or
for other analytic uses.
4. Exclusive of loans and federal funds transactions with domestic commercial
banks.
5. 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.
A20
DomesticNonfinancialStatistics • February 1988
1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities
Millions of dollars, Wednesday figures except as noted
1987
Account
Sept. 30
1 Cash balances due from depository institutions
2 Total loans, leases and securities, net
1
Securities
3 U.S. Treasury and government agency
4
Trading account
5
Investment account, by maturity
6
One year or less
7
Over one through five years
Over five years
8
9 Other securities
10 Trading account
11
Investment account
12
States and political subdivisions, by maturity
13
One year or less
14
Over one year
15
Other bonds, corporate stocks and securities
16 Other trading account assets
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
Loans and leases
Federal funds sold
To commercial banks
To nonbank brokers and dealers in securities
To others
Other loans and leases, gross
Other loans, gross
Commercial and industrial
Bankers acceptances and commercial paper
All other
U.S. addressees
Non-U.S. addressees
Real estate loans
To individuals for personal expenditures
To depository and financial institutions
Commercial banks in the United States
Banks in foreign countries
Nonbank depository and other financial institutions
For purchasing and carrying securities
To finance agricultural production
To states and political subdivisions
To foreign governments and official institutions
All other
Lease financing receivables
LESS: Unearned income
Loan and lease reserve
Other loans and leases, net
All other assets
44 Total assets
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
Deposits
Demand deposits
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Depository institutions in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Transaction balances other than demand deposits
(ATS, NOW, Super NOW, telephone transfers)
Nontransaction balances
Individuals, partnerships and corporations
States and political subdivisions
U.S. government
Depository institutions in the United States
Foreign governments, official institutions and banks
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
65 Total liabilities
6
66 Residual (total assets minus total liabilities)
Oct. 7
Oct. 14
Oct. 21
Oct. 28
Nov. 4
Nov. 11
Nov. 18
Nov. 25
25,498r
26,184'
32,937'
24,212'
32,003'
25,488
26,426
23,107
22,068
218,125 R
212,569'
215,238'
225,445'
220,876'
219,018
214,596
214,864
210,656
0
0
14,003
1,950
4,666
7,387
0
0
16,491
13,528
944
12,584
2,963
0
0
0
13,863
1,912
4,573
7,378
0
0
16,520
13,567
921
12,646
2,953
0
0
0
13,975
1,982
4,570
7,424
0
0
16,480
13,558
929
12,629
2,922
0
0
0
13,874
1,922
4,377
7,574
0
0
16,444
13,526
874
12,652
2,918
0
0
0
14,486
1,427
4,442
8,618
0
0
16,518
13,510
863
12,647
3,008
0
0
0
14,141
1,441
4,216
8,483
0
0
16,572
13,482
788
12,694
3,090
0
0
0
13,821
1,469
4,122
8,230
0
0
16,657
13,453
795
12,659
3,203
0
0
0
14,368
1,517
4,640
8,212
0
0
16,736
13,355
786
12,568
3,381
0
0
0
13,718
1,498
4,663
7,557
0
0
16,753
13,291
775
12,515
3,462
0
29,068
12,688
10,674
5,706
174,296'
169,856r
59,370
475
58,894
58,474
421
44,675
21,202'
20,409
11,184
2,710
6,515
7,897
328
7,839
745
7,390
4,440'
1,424'
14,309
158,563'
57,093'
26,783
11,713
9,736
5,335
171,006'
166,558'
58,976
496
58,480
57,882
598
44,752
21,235'
19,568
10,876
2,516
6,176
6,986
320
7,847
734
6,139
4,448'
1,427'
14,176
155,403'
57,046'
27,532
11,369
11,359
4,804
172,901'
168,441'
59,111
550
58,561
58,084
477
44,680
21,345'
21,499
11,697
3,480
6,321
6,585
323
7,821
797
6,278
4,460
1,433'
14,217
157,250'
56,648'
32,036
14,353
12,364
5,319
178,677'
174,221'
58,055
456
57,599
57,138
462
44,677
21,426'
21,863
12,267
3,286
6,310
12,041
324
7,781
747
7,306
4,456
1,438'
14,149
163,090'
59,542'
28,582
11,572
11,472
5,538
176,911'
172,418'
59,197
441
58,756
58,249
507
44,457
21,484'
22,955
12,609
3,498
6,849
8,839
337
7,737
855
6,556
4,493
1,446'
14,176
161,290'
60,650'
31,439
14,259
11,826
5,354
172,495
167,986
59,181
438
58,742
58,214
529
44,501
21,522
21,852
11,770
3,287
6,795
5,882
331
7,721
742
6,254
4,509
1,438
14,190
156,866
61,352
29,539
11,479
12,850
5,209
170,239
165,726
58,562
380
58,182
57,635
547
44,644
21,596
21,738
12,156
2,784
6,798
4,394
324
7,697
638
6,132
4,512
1,444
14,216
154,579
58,613
30,165
14,241
10,959
4,965
169,145
164,656
57,841
411
57,430
56,957
473
44,850
21,139
21,475
11,733
2,968
6,774
4,794
342
7,770
664
5,781
4,489
1,365
14,186
153,594
60,326
26,826
11,953
9,992
4,881
168,903
164,383
56,954
358
56,596
56,142
455
44,940
21,266
21,306
11,923
2,460
6,923
5,037
300
7,745
625
6,210
4,520
1,348
14,196
153,359
56,001
300,716'
295,800'
304,824
309,199
313,530
305,858
299,635
298,296
288,726
65,610
44,795
890
547
8,159
5,642
837
4,740
55,632
37,682
831
476
6,845
4,991
699
4,108
62,241
43,303
766
269
6,588
6,170
844
4,300
61,314
42,725
861
196
7,187
5,532
843
3,971
66,510
44,896
991
314
7,040
5,773
788
6,709
63,618
44,225
879
870
6,118
5,623
671
5,232
56,801
39,952
1,066
261
5,871
5,226
703
3,722
60,251
40,612
889
717
7,116
5,303
517
5,098
54,185
38,671
791
367
5,715
5,223
587
2,831
8,012
99,769
91,017
6,686
53
1,629
383
64,145
410
4,736
58,999
40,559'
8,159
102,090
93,120
6,736
47
1,780
407
70,906
450
4,811
65,644
36,279'
8,034
101,897
92,734
6,956
54
1,759
394
74,108
0
4,830
69,278
35,350
8,025
101,635
92,362
6,990
68
1,832
382
78,348
2,400
5,840
70,108
36,691
7,888
102,270
93,095
6,895
70
1,832
378
75,705
0
5,792
69,913
38,192
8,073
101,446
92,300
6,794
67
1,870
415
70,652
0
3,283
67,369
38,767
8,094
101,376
92,527
6,530
55
1,876
388
73,380
0
5,007
68,372
36,398
8,002
101,404
92,574
6,542
57
1,844
388
69,556
0
4,222
65,334
35,763
7,932
101,097
92,342
6,481
56
1,833
385
64,759
0
4,327
60,432
37,632
278,096'
273,067'
281,630
286,013
290,565
282,557
276,049
274,976
265,606
22,620
22,733
23,194
23,186
22,966
23,301
23,586
23,321
23,120
209,986'
179,492'
36,891
205,583'
175,200'
38,952
207,822'
177,366'
38,628
214,411'
184,093'
38,832
212,317'
181,313'
38,751
208,618
177,905
38,448
206,620
176,142
38,397
204,441
173,336
38,361
202,325
171,854
38,016
MEMO
67 Total loans and leases (gross) and investments adjusted •
68 Total loans and leases (gross) adjusted
69 Time deposits in amounts of $100,000 or more
1. Excludes trading account securities.
2. Not available due to confidentiality.
3. Includes securities purchased under agreements to resell.
4. Includes trading account securities.
5. Includes federal funds purchased and securities sold under agreements to
repurchase.
6. Not a measure of equity capital for use in capital adequacy analysis or for
other analytic uses.
7. Exclusive of loans and federal funds transactions with domestic commercial
banks.
NOTE. These data also appear in the Board's H.4.2 (504) release. For address,
see inside front cover.
Weekly Reporting Commercial Banks
A21
1.30 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS1 Assets and
Liabilities
Millions of dollars, Wednesday figures
1987
1
2
3
4
5
6
7
8
9
10
Cash and due from depository institutions . .
Total loans and securities
U.S. Treasury and govt, agency securities..
Other securities.
Federal funds sold
To commercial banks in the United States
To others
Other loans, gross
Commercial and industrial
Bankers acceptances and commercial
paper
11
All other
12
U.S. addressees
13
Non-U.S. addressees
14
To financial institutions
15'
Commercial banks in the United States.
16
Banks in foreign countries
17
Nonbank financial institutions
18
To foreign govts, and official institutions .
19
F o r purchasing and carrying securities . . .
20
All other
21 Other assets (claims on nonrelated parties) .
22 Net due from related institutions
23 Total assets
24
Deposits or credit balances due to other
than directly related institutions
25
Transaction accounts and credit balances 3
26
Individuals, partnerships, and
corporations
27
Other
28
Nontransaction accounts
29
Individuals, partnerships, and
corporations
30
Other
31
Borrowings from other than directly
related institutions
32
Federal funds purchased 5
33
From commercial banks in the
United States
34
From others
35
Other liabilities for borrowed money
36
To commercial banks in the
United States
37
To others
38 Other liablities to nonrelated parties
39 Net due to related institutions
40 Total liabilities
Sept. 30
Oct. 7
Oct. 14
Oct. 21
Oct. 28
Nov. 4
Nov. 11
11,738
99,629^
7,318
8,029
7,196
5,691
1,505
77,086'
50,165
9,864
97,18c
7,389
8,019
7,298
5,858
1,440
74,474'
49,018
9,451
98,726'
7,330
7,958
9.041
7,744
1,297
74,397'
48,871
9,800
101,139'
7,441
7,853
10,787
8,900
1,887
75,058'
49,487
9,695
101,160'
6,946
7,753
12,234
10,399
1,835
74,227'
49,415
10,434
97,204
7,466
7,402
8,474
6,730
1,744
73,860
49,111
10,013
96,081
7,290
7,516
8,073
6,081
1,992
73,202
47,548
10,922
98,486
7,558
7,456
10,615
8,191
2,423
72,857
48,072
9,970
96,156
7,328
7,450
7,679
5,663
2,016
73,698
47,700
3,827
46,338
43,912
2,426
16,769
12,521
1,340
2,908
385
2,876
6,890'
28,795'
14,893
155,055'
3,876
45,142
42,756
2,386
16,485
12,230
1,196
3,059
395
1,685
6,892'
28,698'
15,746
151,489'
3,996
44,875
42,468
2,407
16,336
11,994
1,299
3.042
409
1,750
7,031'
28,495'
15,414
152,086'
3,912
45,575
43,150
2,425
15,798
11,292
1,465
3,041
387
2,505
6,881'
3,361
45,751
43,421
2,330
15,597
11,644
1,012
2,940
388
2,062
6,701
28,927
15,953
152,517
1,553
45,995
43.597
2,398
15,815
11,872
913
3,029
400
2,339
7,100
31,779
14,071
151,945
1,448
46,624
44,234
2,391
15,605
11,437
1,133
3,035
407
1,655
7,118
31,619
13,816
154,844
1,501
46,199
43,743
2,456
16,805
15,940
155,759'
3,916
45,499
43,120
2,379
15,360
11,304
1,117
2,938
385
2,287
6,781'
28,521'
14,019
153,395'
154,012
43,652
3,644
42,133
3,193
42,504
3,433
42,285
3,337
42,811
3,531
42,748
3,528
42,400
3,344
41,918
3,222
41,849
2,918
2,029
1,616
40,007
2,217
976
38,941
2,045
1,388
39,071
2,215
1,121
38,949
1,984
1,547
39,280
1,865
1,663
39,219
1,912
1,433
39,056
1,932
1,290
38,696
1,714
1,205
38,931
32,399
7,608
31,663
7,278
31,840
7,231
31,880
7,069
32,118
7,163
31,889
7,330
31,954
7,102
31,655
7,042
31,912
7,018
55,302
25,298'
56,947
27,583'
55,804
26,342'
58,085
27,968'
53,854
25.42C
56,494
27,448
54,296
25.598
57,872
28,195
58,463
27,249
13,630
30,004'
14,839
12,744'
29,364'
15,082
11,259'
29,462'
16,902
11,067'
30,116'
16,093
9,327'
28,434'
17,568
9,880
29,045
15,592
10,007
28,698
17,030
11,166
29,677
16,924
10,326
31,214
23,674
6,330'
32,498
23,603'
155,055'
23,001
6,362'
32,674
19,734'
151,489'
22,971
6,491'
32,563
21,214'
152,086'
23,297
6,819'
32,929
22,46C
155,759'
22,054
6,379'
33,127
23,603'
153,395'
22,742
6,303
33,004
20,272
152,517
22,672
6,027
32,830
22,417
151,945
23,826
5,851
32,928
22,124
154,844
24,298
6,916
33,016
20,683
154,012
81,417'
66,069'
79,092'
63,684'
78,987'
63,700'
80,947'
65,653'
79,457'
64,758'
78,829
63,960
78,128
63,322
78,857
63,843
77,804
63,026
11,668'
28,88c
MEMO
41 Total loans (gross) and securities adjusted 6 .
42 Total loans (gross) ajdusted
1. Effective Jan. 1, 1986, the reporting panel includes 65 U.S. branches and
agencies of foreign banks that include those branches and agencies with assets of
$750 million or more on June 30, 1980, plus those branches and agencies that had
reached the $750 million asset level on Dec. 31, 1984.
2. Includes securities purchased under agreements to resell.
3. Includes credit balances, demand deposits, and other checkable deposits.
12,688
1,093
3,024
403
1,738
7,052
31,805
16,081
4. Includes savings deposits, money market deposit accounts, and time deposits.
5. Includes securities sold under agreements to repurchase.
6. Exclusive of loans to and federal funds sold to commercial banks in the
United States.
A22
DomesticNonfinancialStatistics • February 1988
1.31 GROSS DEMAND DEPOSITS Individuals, Partnerships, and Corporations1
Billions of dollars, estimated daily-average balances, not seasonally adjusted
Commercial banks
Type of holder
1 All holders—Individuals, partnerships, and
corporations
2
3
4
5
6
Financial business
Nonfinancial business
Consumer
Foreign
Other
1987
1986
1982
Dec.
1983
Dec.
1984
Dec.
Dec. 3 ' 4
June
Sept.
Dec.
Mar.
June
Sept.
291.8
293.5
302.7
321.0
322.4
333.6
363.6
335.9
340.2
339.0
35.4
150.5
85.9
3.0
17.0
32.8
161.1
78.5
3.3
17.8
31.7
166.3
81.5
3.6
19.7
32.3
178.5
85.5
3.5
21.2
32.3
180.0
86.4
3.0
20.7
35.9
185.9
86.3
3.3
22.2
41.4
202.0
91.1
3.3
25.8
35.9
183.0
88.9
2.9
25.2
36.6
187.2
90.1
3.2
23.1
36.6
188.2
88.7
3.2
22.4
Weekly reporting banks
1986
1982
Dec.
7 All holders—Individuals, partnerships, and
corporations
8
9
10
11
12
Financial business
Nonfinancial business
Consumer
Foreign
1983
Dec.
1987
Dec.^ 4
June
Sept.
Dec.
Mar.
June
Sept.
144.2
146.2
157.1
168.6
168.5
174.7
195.1
178.1
179.3
179.1
26.7
74.3
31.9
2.9
8.4
24.2
79.8
29.7
3.1
9.3
25.3
87.1
30.5
3.4
10.9
25.9
94.5
33.2
3.1
12.0
25.7
93.1
34.9
2.9
11.9
28.9
94.8
35.0
3.2
12.8
32.5
106.4
37.5
3.3
15.4
28.7
94.4
36.8
2.8
15.5
29.3
94.8
37.5
3.1
14.6
29.3
96.0
37.2
3.1
13.5
1. Figures include cash items in process of collection. Estimates of gross
deposits are based on reports supplied by a sample of commercial banks. Types
of depositors in each category are described in the June 1971 BULLETIN, p. 466.
Figures may not add to totals because of rounding.
2. Beginning in March 1984, these data reflect a change in the panel of weekly
reporting banks, and are not comparable to earlier data. Estimates in billions of
dollars for December 1983 based on the new weekly reporting panel are: financial
business, 24.4; nonfinancial business, 80.9; consumer, 30.1; foreign, 3.1; other
9.5.
3. Beginning March 1985, financial business deposits and, by implication, total
gross demand deposits have been redefined to exclude demand deposits due to
1984
Dec. 2
thrift institutions. Historical data have not been revised. The estimated volume of
such deposits for December 1984 is $5.0 billion at all insured commercial banks
and $3.0 billion at weekly reporting banks.
4. Historical data back to March 1985 have been revised to account for
corrections of bank reporting errors. Historical data before March 1985 have not
been revised, and may contain reporting errors. Data for all commercial banks for
March 1985 were revised as follows (in billions of dollars): all holders, - . 3 ;
financial business, - . 8 ; nonfinancial business, - . 4 ; consumer, .9; foreign, .1;
other, - . 1 . Data for weekly reporting banks for March 1985 were revised as
follows (in billions of dollars): all holders, - . 1 ; financial business, - . 7 ; nonfinancial business, - . 5 ; consumer, 1.1; foreign, .1; other, - . 2 .
Financial Markets
A23
1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
1987
1982
Dec.
Instrument
1983
Dec.
1984
Dec.
1985
Dec.
1986
Dec.
May
July
June
Aug.
Sept.
Oct.
Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers
166,436
187,658
237,586
300,899
331,016
354,249
348,741
348,247
352,737
358,828
360,013
34,605
44,455
56,485
78,443
100,207
105,397
108,691
107,709
110,714
115,570
111,098
2,516
2,441
2,035
1,602
2,265
2,429
2,430
2,311
2,404
2,590
2,689
84,393
97,042
110,543
135,504
152,385
169,225
161,921
162,185
163,620
166,169
171,392
32,034
47,437
35,566
46,161
42,105
70,558
44,778
86,952
40,860
78,424
48,401
79,627
47,862
78,129
46,354
78,353
45,487
78,403
46,815
77,089
46,249
77,523
3
2
3
Financial companies
Dealer-placed paper
Total
Bank-related (not seasonally
Directly placed paper
4
Total
5
Bank-related (not seasonally
adjusted)
6 Nonfinancial companies
.
Bankers dollar acceptances (not seasonally adjusted) 7
7 Total
8
9
10
11
12
13
Holder
Accepting banks
Own bills
Bills bought
Federal Reserve Banks
Own account
Foreign correspondents
Others
Basis
14 Imports into United States
15 Exports from United States
16 All other
79,543
78,309
78,364
68,413
64,974
67,779'
69,622
68,495
68,645
68,771
71,891
10,910
9,471
1,439
9,355
8,125
1,230
9,811
8,621
1,191
11,197
9,471
1,726
13,423
11,707
1,716
11,201
9,569
1,631
11,234
9,661
1,573
10,664
9,630
1,035
10,870
9,905
965
10,521
9,400
1,121
10,856
9,742
1,114
1,480
949
66,204
418
729
67,807
0
671
67,881
0
937
56,279
0
1,317
50,234
0
1,547
55,032'
0
1,717
56,671
0
1,463
56,367
0
1,397
56,379
0
1,467
56,784
0
1,400
59,635
17,683
16,328
45,531
15,649
16,880
45,781
17,845
16,305
44,214
15,147
13,204
40,062
14,670
12,960
37,344
15,361
14,028
38,390'
16,179
14,161
39,281
17,431
14,659
36,405
17,087
14,967
36,590
17,198
15,046
36,527'
17,814
15,949
38,122
1. Effective Dec. 1,1982, there was a break in the commercial paper series. The
key changes in the content of the data involved additions to the reporting panel,
the exclusion of broker or dealer placed borrowings under any master note
agreements from the reported data, and the reclassification of a large portion of
bank-related paper from dealer-placed to directly placed.
2. Correction of a previous misclassification of paper by a reporter has created
a break in the series beginning December 1983. The correction adds some paper
to nonfinancial and to dealer-placed financial paper.
3. 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.
4. Includes all financial company paper sold by dealers in the open market.
5. As reported by financial companies that place their paper directly with
investors.
6. Includes public utilities and firms engaged primarily in such activities as
communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.
7. Beginning October 1984, the number of respondents in the bankers acceptance survey were reduced from 340 to 160 institutions—those with $50 million or
more in total acceptances. The new reporting group accounts for over 95 percent
of total acceptances activity.
1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans
Percent per annum
Effective Date
10.50
10.00
9.50
9.00
8.50
8.00
7.50
1987—Apr.
May
1
1
15
Sept. 4
Oct. 7
7?
Nov. 5
Rate
7.75
8.00
8.25
8.75
9.25
9.00
8.75
NOTE. These data also appear in the Board's H.15 (519) release. For address,
see inside front cover.
Month
Average
rate
1985—Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
10.61
10.50
10.50
10.50
10.31
9.78
9.50
9.50
9.50
9.50
9.50
9.50
1986—Jan
Feb
Mar
Apr
May
June
9.50
9.50
9.10
8.83
8.50
8.50
Month
July
Aug.
Sept.
Oct.
Nov.
Dec.
1987—Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.,
Nov.
A24
DomesticNonfinancialStatistics • February 1988
1.35 INTEREST RATES Money and Capital Markets
Averages, percent per year; weekly and monthly figures are averages of business day data unless otherwise noted.
1987
Instrument
1984
1985
1987, week ending
1986
Aug.
Sept.
Oct.
Nov.
Oct. 30
Nov. 6
Nov. 13
Nov. 20
Nov. 27
MONEY MARKET RATES
1 Federal funds 1,2
2 Discount widow bon-owing ' ,3
Commercial paper •
3
1-month
4
3-month
5
6-month
Finance paper, directly placed 4 '
6
1-month
7
3-month
8
6-month
Bankers acceptances •
9
3-month
10 6-month
Certificates of deposit, secondary market
11
1-month
1?
3-month
13 6-month
14 Eurodollar deposits^ 3-month 8
U.S. Treasury bills 5
Secondary market
15
3-month
16 6-month
17
1-year
„
Auction average
18 3-month
19 6-month
20
1-year
r
10.22
8.80
8.10
7.69
6.80
6.33
6.73
5.50
7.22
5.95
7.29
6.00
6.69
6.00
7.03
6.00
6.43
6.00
6.68
6.00
6.77
6.00
6.78
6.00
10.05
10.10
10.16
7.94
7.95
8.01
6.62
6.49
6.39
6.62
6.71
6.81
7.26
7.37
7.55
7.38
7.89
7.96
6.77
7.17
7.17
6.95
7.33
7.35
6.78
7.19
7.20
6.72
7.04
7.05
6.79
7.14
7.14
6.75
7.20
7.21
9.97
9.73
9.65
7.91
7.77
7.75
6.58
6.38
6.31
6.56
6.49
6.34
7.20
7.08
6.90
7.28
7.40
7.17
6.63
6.91
6.69
6.83
7.03
6.80
6.56
6.85
6.68
6.65
6.81
6.74
6.72
6.91
6.74
6.60
7.03
6.61
10.14
10.19
7.92
7.96
6.39
6.29
6.64
6.75
7.31
7.48
7.85
7.92
7.07
7.07
7.25
7.24
7.05
7.04
6.94
6.95
7.06
7.06
7.14
7.14
10.17
10.37
10.68
10.73
7.97
8.05
8.25
8.28
6.61
6.52
6.51
6.71
6.63
6.75
7.02
6.91
7.25
7.37
7.74
7.51
7.39
8.02
8.19
8.29
6.80
7.24
7.31
7.41
6.96
7.42
7.50
7.73
6.75
7.26
7.30
7.55
6.70
7.13
7.21
7.23
6.76
7.18
7.29
7.38
6.77
7.26
7.33
7.38
9.52
9.76
9.92
7.48
7.65
7.81
5.98
6.03
6.08
6.04
6.15
6.54
6.40
6.64
7.11
6.13
6.69
7.05
5.69
6.19
6.50
5.17
5.93
6.30
5.62
6.10
6.42
5.78
6.26
6.49
5.78
6.27
6.54
5.72
6.17
6.56
9.57
9.80
9.94
7.49
7.66
7.81
5.97
6.02
6.07
6.00
6.14
6.52
6.32
6.57
6.74
6.40
6.86
6.89
5.81
6.23
6.48
5.12
5.98
6.45
5.80
6.24
n.a.
5.74
6.24
n.a.
6.01
6.33
n.a.
5.70
6.11
6.48
10.89
11.65
11.89
12.24
12.40
12.44
12.48
12.39
8.43
9.27
9.64
10.13
10.51
10.62
10.97
10.79
6.46
6.87
7.06
7.31
7.55
7.68
7.85
7.80
7.03
7.75
8.03
8.32
8.59
8.76
n.a.
8.97
7.67
8.34
8.67
8.94
9.26
9.42
n.a.
9.59
7.59
8.40
8.75
9.08
9.37
9.52
n.a.
9.61
6.96
7.69
7.99
8.35
8.69
8.86
n.a.
8.95
6.73
7.60
8.01
8.38
8.71
8.90
n.a.
9.05
6.87
7.62
7.96
8.32
8.66
8.84
n.a.
8.95
6.96
7.67
7.96
8.30
8.64
8.80
n.a.
8.89
7.01
7.72
7.98
8.35
8.66
8.83
n.a.
8.92
7.02
7.76
8.05
8.41
8.77
8.95
n.a.
9.03
11.99
10.75
8.14
8.97
9.58
9.61
8.99
9.07
8.96
8.94
8.98
9.06
9.61
10.38
10.10
8.60
9.58
9.11
6.95
7.76
7.32
7.24
8.31
7.81
7.66
8.67
8.26
7.90
8.85
8.70
7.50
8.47
7.95
7.60
8.60
8.43
7.50
8.45
7.90
7.55
8.55
8.03
7.50
8.50
7.91
7.45
8.40
7.96
13.49
12.71
13.31
13.74
14.19
12.05
11.37
11.82
12.28
12.72
9.71
9.02
9.47
9.95
10.39
10.24
9.67
9.86
10.20
10.80
10.64
10.18
10.35
10.72
11.31
10.97
10.52
10.74
10.98
11.62
10.54
10.01
10.27
10.63
11.23
10.75
10.25
10.56
10.84
11.35
10.62
10.08
10.42
10.70
11.28
10.49
9.97
10.22
10.58
11.18
10.51
9.97
10.22
10.61
11.22
10.51
10.01
10.21
10.61
11.22
13.81
12.06
9.61
10.37
10.84
11.07
10.39
10.60
10.39
10.38
10.31
10.40
11.59
4.64
10.49
4.25
8.76
3.48
8.32
2.69
8.64
2.78
8.99
3.25
9.11
3.66
9.18
3.84
9.20
3.59
9.06
3.70
9.15
3.65
9.02
3.69
CAPITAL MARKET RATES
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
U.S. Treasury notes and bonds 11
Constant maturities
1-year
2-year
3-year
5-year
7-year
10-year
20-year
30-year
Composite
Over 10 years (long-term)
State and local notes and bonds
Moody's series 14
Aaa
Baa
Bond Buyer series
Corporate bonds
Seasoned issues 16
All industries
Aaa
Aa
A
Baa
A-rated, recently-offered utility
bonds 17
MEMO: Dividend/price ratio 18
39
Preferred stocks
40
Common stocks
1. Weekly and monthly figures are averages of all calendar days, where the
rate for a weekend or holiday is taken to be the rate prevailing on the preceding
business day. The daily rate is the average of the rates on a given day weighted by
the volume of transactions at these rates.
2. Weekly figures are averages for statement week ending Wednesday.
3. Rate for the Federal Reserve Bank of New York.
4. Unweighted average of offering rates quoted by at least five dealers (in the
case of commercial paper), or finance companies (in the case of finance paper).
Before November 1979, maturities for data shown are 30-59 days, 90-119 days,
and 120-179 days for commercial paper; and 30-59 days, 90-119 days, and
150-179 days for finance paper.
5. Yields are quoted on a bank-discount basis, rather than in an investment
yield basis (which would give a higher figure).
6. Dealer closing offered rates for top-rated banks. Most representative rate
(which may be, but need not be, the average of the rates quoted by the dealers).
7. Unweighted average of offered rates quoted by at least five dealers early in
the day.
8. Calendar week average. For indication purposes only.
9. Unweighted average of closing bid rates quoted by at least five dealers.
10. Rates are recorded in the week in which bills are issued. Beginning with the
Treasury bill auction held on Apr. 18, 1983, bidders were required to state the
percentage yield (on a bank discount basis) that they would accept to two decimal
places. Thus, average issuing rates in bill auctions will be reported using two
rather than three decimal places.
11. Yields are based on closing bid prices quoted by at least five dealers.
12. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields
are read from a yield curve at fixed maturities. Based on only recently issued,
actively traded securities.
13. Averages (to maturity or call) for all outstanding bonds neither due nor
callable in less than 10 years, including one very low yielding "flower" bond.
14. General obligations based on Thursday figures; Moody's Investors Service.
15. General obligations only, with 20 years to maturity, issued by 20 state and
local governmental units of mixed quality. Based on figures for Thursday.
16. Daily figures from Moody's Investors Service. Based on yields to maturity
on selected long-term bonds.
17. Compilation of the Federal Reserve. This series is an estimate of the yield
on recently-offered, A-rated utility bonds with a 30-year maturity and 5 years of
call protection. Weekly data are based on Friday quotations.
18. Standard and Poor's corporate series. Preferred stock ratio based on a
sample of ten issues: four public utilities, four industrials, one financial, and one
transportation. Common stock ratios on the 500 stocks in the price index.
NOTE. These data also appear in the Board's H. 15 (519) and G.13 (415) releases.
For address, see inside front cover.
Financial Markets
1.36 STOCK MARKET
A25
Selected Statistics
1987
Indicator
1984
1985
1986
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Prices and trading (averages of daily figures)
Common stock prices
1 New York Stock Exchange
(Dec. 31, 1965 = 50)
2
Industrial
3
Transportation
Utility
4
5
Finance
6 Standard & Poor's Corporation (1941-43
= 10)'
92.46
108.01
85.63
46.44
89.28
108.09
123.79
104.11
56.75
114.21
136.00
155.85
119.87
71.36
147.19
166.43
198.95
138.55
77.15
162.41
163.88
199.03
137.91
72.74
150.52
163.00
198.78
141.30
71.64
145.97
169.58
206.61
150.39
74.25
152.73
174.28
214.12
157.49
74.18
152.27
184.18
226.49
164.02
78.20
160.94
178.39
219.52
158.58
76.13
154.08
157.13
189.86
140.95
73.27
137.35
137.21
163.42
117.57
69.86
118.30
160.50
186.84
236.34
292.47
289.32
289.12
301.36
310.09
329.36
318.66
280.16
245.01
7 American Stock Exchange 2
(Aug. 31, 1973 = 50)
207.%
229.10
264.38
332.55
330.65
328.77
334.49
348.68
361.52
353.72
306.34
249.42
Volume of trading (thousands of shares)
8 New York Stock Exchange
9 American Stock Exchange
91,084
6,107
109,191
8,355
141,385
11,846
180,251
15,678
187,135
14,420
170,898
11,655
163,380
12,813
180,356
12,857
193,477
13,604
177,319
12,381
277,026
18,173
179,481
11,268
Customer financing (end-of-period balances, in millions of dollars)
10 Margin credit at broker-dealers 3
22,470
28,390
36,840
38,080
39,820
38,890
38,420
40,250
41,640
44,170
38,250
34,180
Free credit balances at brokers4
11 Margin-account 5
12 Cash-account
1,755
10,215
2,715
12,840
4,880
19,000
4,730
17,370
4,660
17,285
4,355
16,985
3,680
15,405
4,095
15,930
4,240
16,195
4,270
15,895
8,415
18,455
6,700
15,360
Margin requirements (percent of market value and effective date) 6
13 Margin stocks
14 Convertible bonds
15 Short sales
Mar. 11, 1968
June 8, 1968
May 6, 1970
Dec. 6, 1971
Nov. 24, 1972
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. Beginning July 5, 1983, the American Stock Exchange rebased its index
effectively cutting previous readings in half.
3. Beginning July 1983, under the revised Regulation T, margin credit at
broker-dealers includes credit extended against stocks, convertible bonds, stocks
acquired through exercise of subscription rights, corporate bonds, and government securities. Separate reporting of data for margin stocks, convertible bonds,
and subscription issues was discontinued in April 1984.
4. Free credit balances are in accounts with no unfulfilled commitments to the
brokers and are subject to withdrawal by customers on demand.
5. New series beginning June 1984.
6. These regulations, adopted by the Board of Governors pursuant to the
Securities Exchange Act of 1934, limit the amount of credit to purchase and carry
"margin securities" (as defined in the regulations) when such credit is collateralized by securities. Margin requirements on securities other than options are the
difference between the market value (100 percent) and the maximum loan value of
collateral as prescribed by the Board. Regulation T was adopted effective Oct. 15,
1934; Regulation U, effective May 1, 1936; Regulation G, effective Mar. 11, 1968;
and Regulation X, effective Nov. 1, 1971.
On Jan. 1, 1977, the Board of Governors for the first time established in
Regulation T the initial margin required for writing options on securities, setting
it at 30 percent of the current market-value of the stock underlying the option. On
Sept. 30,1985, the Board changed the required initial margin, allowing it to be the
same as the option maintenance margin required by the appropriate exchange or
self-regulatory organization; such maintenance margin rules must be approved by
the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC
approved new maintenance margin rules, permitting margins to be the price of the
option plus 15 percent of the market value of the stock underlying the option.
A26
DomesticNonfinancialStatistics • February 1988
1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities
Millions of dollars, end of period
1987
1986
Account
1984
1985
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Savings and loan associations
903,488
948,781
964,096
963,316
935,516
936,877
939,722
944,291
960,199' 949,107' 949,265r 955,254
2 Mortgage-backed securities
Cash and investment securities
4 Other
124,801
223,396
97,303
126,712
238,833
122,682
141,510
250,297
123,257
142,700
251,769
129,340
132,733
261,869
128,856
135,884
263,782
129,279
138,727
266,407
134,743
136,370
274,834
141,032' 140,620' 140,894' 144,058' 150,950
138,295' 138,152' 138,521' 137,323' 131,719
283,661' 285,426' 287,516' 292,737' 295,224
5 Liabilities and net worth
903,488
948,781
964,0%
963,316
935,516
936,877
939,722
944,291
960,199' 949,107' 949,265' 955,254
725,045
125,666
64,207
61,459
17,944
750,071
138,798
73,888
64,910
19,045
740,066
156,920
75,626
81,294
24,078
741,081
159,742
80,194
79,548
20,071
721,759
153,373
75,552
77,821
19,773
722,276
152,173
75,671
76,502
21,823
722,548' 716,798' 718,633' 715,662' 716,389' 717,259' 721,409
158,175 165,881 171,278' 175,409' 174,357' 178,642' 180,360
77,857
79,188
78,888' 79,546
80,848
76,469
78,583
99,512
81,706
88,024
92,695' 96,221' 95,469' 99,0%'
19,571' 20,677' 21,940'
19,157
18,958
20,870
22,621'
34,833
41,064
43,034
42,423
40,606
40,601
1 Assets
6 Savings capital
7 Borrowed money
8
FHLBB
9
Other
10 Other
11 Net worth 2
40,040
40,741
41,223'
39,60c
39,027'
38,595'
956,743
956,743
36,9%
FSLIC-insured federal savings banks
12 Assets
98,559
131,868
204,918
210,562
235,428
235,763
241,418
246,277
253,007
264,099
n Mortgages
14 Mortgage-backed securities
15 Other
57,429
9,949
10,971
72,355
15,676
11,723
112,117
28,324
19,266
113,638
29,766
19,034
136,770
33,570
15,769
136,489
34,634
16,060
138,882
36,088
16,605
140,854
37,500
17,034
144,581
39,371
17,200
150,421' 152,885'
40,992
42,712
17,936
17,547'
16 Liabilities and net worth
98,559
131,868
204,918
210,562
235,428
235,763
241,418
246,277
253,007
264,099
268,814' 272,087' 272,790
79,572
12,798
7,515
5,283
1,903
4,286
103,462
19,323
10,510
8,813
2,732
6,351
154,447
33,937
17,863
16,074
5,652
10,883
157,872
37,329
19,897
17,432
4,263
11,098
176,741
40,614
20,730
19,884
5,304
12,774
178,676
39,777
20,226
19,551
5,480
13,151
178,672
43,919
21,104
22,815
5,265
13,564
180,637
46,125
21,718
24,407
5,547
13,978
182,802
49,8%
22,788
27,108
6,044
14,272
189,998
53,239'
24,486
28,753
5,983
14,884
193,890 194,853
53,652' 55,660'
25,546
24,981
28,671' 30,114'
6,143
6,455
15,134'
15,123'
195,213
56,540
26,287
30,253
5,631
15,408
17
18
19
70
21
22
Savings capital
Borrowed money
FHLBB
Other
Other
Net worth
268,814' 272,087' 272,790
154,058'
43,531
17,779'
154,661
44,412
17,560
Savings banks
23 Assets
203,898
216,776
232,577
236,866
235,603
238,074
240,739
243,454
245,906
244,760
246,833
249,888
251,472
102,895
24,954
110,448
30,876
117,612
36,149
118,323
35,167
119,199
36,122
119,737
37,207
121,178
38,012
122,769
37,136
124,936
37,313
128,217
35,200
129,624
35,591
130,721
36,793
133,298
36,134
14,643
19,215
2,077
23,747
4,954
11,413
13,111
19,481
2,323
21,199
6,225
13,113
13,037
24,051
2,290
20,749
5,052
13,637
14,209
25,836
2,185
20,459
6,894
13,793
13,332
26,220
2,180
19,795
5,239
13,516
13,525
26,893
2,168
19,770
5,143
13,631
13,631
27,463
2,041
19,598
5,703
13,713
13,743
28,700
2,063
19,768
5,308
13,967
13,650
28,739
2,053
19,956
5,176
14,083
13,549
27,785
2,059
18,803
4,939
14,208
13,498
28,252
2,050
18,821
4,806
14,191
13,720
28,913
2,038
18,573
4,823
14,307
13,122
29,655
2,023
18,431
4,484
14,325
32 Liabilities
203,898
216,776
232,577
236,866
235,603
238,074
240,739
243,454
245,906
244,760
246,833
249,888
251,472
33 Deposits
34
Regular 3
Ordinary savings
35
Time
36
37
Other
38 Other liabilities
39 General reserve accounts
180,616
177,418
33,739
104,732
3,198
12,504
10,510
185,972
181,921
33,018
103,311
4,051
17,414
12,823
190,858
185,958
36,739
101,240
4,900
24,254
17,146
192,194
186,345
37,717
100,809
5,849
25,274
18,105
191,441
186,385
38,467
100,604
5,056
24,710
18,236
192,559
187,597
39,370
100,922
4,%2
25,663
18,486
193,693
188,432
40,558
100,8%
5,261
27,003
18,830
193,347
187,791
41,326
100,308
5,556
29,105
19,423
194,742
189,048
41,%7
100,607
5,694
30,436
19,603
193,274
187,669
42,178
100,604
5,605
30,515
19,549
194,549
188,783
41,928
102,603
5,766
31,655
19,718
195,895
190,335
41,767
105,133
5,560
32,467
20,471
1%,824
191,376
41,773
107,063
5,448
32,827
20,407
24
25
26
27
28
29
30
31
Loans
Mortgage
Other
Securities
U.S. government
Mortgage-backed securities . .
State and local government . .
Corporate and other
Cash
Other assets
Financial Markets
All
1.37—Continued
1986
Account
1984
1987
1985
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
n a.
Credit unions 4
40 Total assets/liabilities and capital.
93,036
118,010
145,653
147,726
149,383
149,751
153,253
154,549
156,086
160,644
41
42
63,205
29,831
77,861
40,149
94,638
51,015
95,483
52,243
96,801
52,586
96,753
52,998
98,799
54,454
99,751
54,798
100,153
55,933
104,150
56,494
62,561
42,337
20,224
84,348
57,539
26,809
73,513
47,933
25,580
105,963
70,926
35,037
84,635
53,877
30,758
131,778
87,009
44,769
86,137
55,304
30,833
134,327
87,954
46,373
85,984
55,313
30,671
135,907
89,717
46,130
85,651
54,912
30,739
136,441
89,485
46,956
86,101
55,118
30,983
138,810
91,042
47,768
87,089
55,740
31,349
140,014
92,012
48,002
87,765
55,952
31,813
141,635
97,189
49,248
90,912
58,432
32,480
148,283
96,137
52,146
n a.
n a.
Federal
State
43 Loans outstanding
44
Federal
45
State
46 Savings
47
Federal
48
State
Life insurance companies
49 Assets
50
51
52
53
54
55
56
57
58
59
60
Securities
Government
United States 5
State and local
Foreign
Business
Bonds
Stocks
Mortgages
Real estate
Policy loans
Other assets
722,979
825,901
925,475
937,551
948,665
961,937
978,455
978,455
985,942
995,576
1,005,592
1,017,018
63,899
42,204
8,713
12,982
359,333
295,998
63,335
156,699
25,767
54,505
63,776
75,230
51,700
9,708
13,822
423,712
346,216
77,496
171,797
28,822
54,369
71,971
83,736
57,533
11,988
14,215
490,091
399,986
90,105
190,243
31,759
54,222
75,424
84,640
59,033
11,659
13,948
492,807
401,943
90,864
193,842
31,615
54,055
80,592
84,923
59,596
11,245
14,082
504,582
408,788
95,794
194,213
31,718
53,832
79,397
88,003
62,724
11,315
13,964
514,328
415,004
99,324
194,935
32,003
53,806
78,842
90,337
65,661
10,860
13,816
519,766
417,933
101,833
195,743
31,834
53,652
82,105
89,711
64,621
11,068
14,022
522,097
420,474
101,623
197,315
32,011
53,572
83,749
89,554
64,201
11,208
14,145
528,789
425,788
103,001
198,760
32,149
53,468
83,222
87,279
61,405
11,485
14,389
537,507
432,095
105,412
200,382
32,357
53,378
84,390
88,199
62,461
11,277
14,461
555,423
448,146
107,277
201,297
32,699
53,338
85,420
89,924
64,150
11,190
14,584
551,701
442,604
109,097
202,241
32,992
53,330
57,126
1. Holdings of stock of the Federal Home Loan Banks are in "other assets."
2. Includes net undistributed income accrued by most associations.
3. Excludes checking, club, and school accounts.
4. Data include all federally insured credit unions, both federal and state
chartered, serving natural persons.
5. Direct and guaranteed obligations. Excludes federal agency issues not
guaranteed, which are shown in the table under "Business" securities.
6. Issues of foreign governments and their subdivisions and bonds of the
International Bank for Reconstruction and Development.
NOTE: Savings and loan associations: Estimates by the FHLBB for all
associations in the United States based on annual benchmarks for non-FSLICinsured associations and the experience of FSLIC-insured associations.
FSLIC-insured federal savings banks: Estimates by the FHLBB for federal
savings banks insured by the FSLIC and based on monthly reports of federally
insured institutions.
n.a.
Savings banks: Estimates by the National Council of Savings Institutions for all
savings banks in the United States and for FDIC-insured savings banks that have
converted to federal savings banks.
Credit unions: Estimates by the National Credit Union Administration for
federally chartered and federally insured state-chartered credit unions serving
natural persons.
Life insurance companies: Estimates of the American Council of Life Insurance
for all life insurance companies in the United States. Annual figures are annualstatement 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."
A28
Domestic Financial Statistics • February 1988
1.38 FEDERAL FISCAL AND FINANCING OPERATIONS
Millions of dollars
Calendar year
Type of account or operation
U.S. budget1
1 Receipts, total
On-budget
2
Off-budget
3
4 Outlays, total
On-budget
5
6
Off-budget
7 Surplus, or deficit ( - ) , toted
8 On-budget
Off-budget
9
Source of financing (total)
Borrowing from the public
Operating cash (decrease, or increase
(-k
12 O t h e r
10
11
Fiscal
year
1985
734,057
547,886
186,171
946,316
769,509
176,807
-212,260
-221,623
9,363
Fiscal
year
1986
Fiscal
year
1987
1987
June
July
Aug.
82,945
64,222
18,723
83,366
66,221
17,145
-420
-1,998
1,578
64,223
47,880
16,343
86,491
70,806
15,685
-22,268
-22,926
658
60,213
43,511
16,703
81,940
65,071
16,869
-21,727
-21,561
-166
Sept.
Oct.
Nov.
62,354
45,992
16,362
93,095
76,910
16,185
-30,741
-30,918
176
56,987
40,630
13,357
82,756
65,986
16,770
-25,769
-25,356
-414
769,091
568,862
200,228
990,231
806,733
183,498
-221,140
-237,871
16,731
854,143
640,741
213,402
1,002,147
808,315
193,832
-148,005
-167,575
19,570
197,269
236,187
150,070
9,655
-3,103
33,060
-8,060
27,282
23,603
13,367
1,630
-14,324
-723
-5,052
2,986
-6,966
-2,801
20,655
4,716
-3,219
-8,115
-13,800
6,590
-1,879
5,338
17,164
-14,998
17,060
4,174
12,886
31,384
7,514
23,870
36,436
9,120
27,316
40,072
13,774
26,298
19,417
5,365
14,052
22,635
3,764
18,872
36,436
9,120
27,316
38,315
8,898
29,416
21,151
3,595
17,556
92,410
73,755
18,656
77,140
60,497
16,643
15,270
13,257
2,013
MEMO
13 Treasury operating balance (level, end of
period)
14
Federal Reserve Banks
15 Tax and loan accounts
1. In accordance with the Balanced Budget and Emergency Deficit Control Act
of 1985, all former off-budget entries are now presented on-budget. The Federal
Financing Bank (FFB) activities are now shown as separate accounts under the
agencies that use the FFB to finance their programs. The act has also moved two
social security trust funds (Federal old-age survivors insurance and Federal
disability insurance trust funds) off-budget.
2. Includes SDRs; reserve position on the U.S. quota in the IMF; loans to
international monetary fund; other cash and monetary assets; accrued interest
payable to the public; allocations of special drawing rights; deposit funds;
miscellaneous liability (including checks outstanding) and asset accounts;
seigniorage; increment on gold; net gain/loss for U.S. currency valuation adjustment; net gain/loss for IMF valuation adjustment; and profit on the sale of gold.
SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S.
Government" and the Budget of the U.S. Government.
Federal Finance
A29
1.39 U.S. BUDGET RECEIPTS AND OUTLAYS
Millions of dollars
Calendar year
Source or type
Fiscal
year
1986
Fiscal
year
1987
1985
1986
1987
1987
H2
HI
H2
HI
Sept.
Oct.
Nov.
RECEIPTS
769,091
854,143
364,790
394,345
387,524
447,282
92,410
62,354
56,987
348,959
314,803
36
105,994
71,873
392,557
322,463
33
142,957
72,896
169,987
155,725
6
22,295
8,038
169,444
153,919
31
78,981
63,488
183,156
164,071
4
27,733
8,652
205,157
156,760
30
112,421
64,052
39,797
24,569
0
17,127
1,899
32,429
30,122
1
3,563
1,256
25,039
24,888
0
1,664
1,512
80,442
17,298
102,859
18,933
36,528
7,751
41,946
9,557
42,108
8,230
52,396
10,881
21,636
1,129
3,633
1,778
2,558
891
283,901
303,318
128,017
156,714
134,006
163,519
25,403
22,177
23,756
255,062
273,185
116,276
139,706
122,246
146,696
23,788
20,797
20,731
11,840
24,098
4,742
13,987
25,418
4,715
985
9,281
2,458
10,581
14,674
2,333
1,338
9,328
2,429
12,020
14,514
2,310
1,590
1,246
368
0
950
430
144
2,661
364
32,919
13,327
6,958
19,884
32,510
15,032
7,493
19,307
18,470
6,354
3,323
9,861
15,944
6,369
3,487
10,002
15,947
7,282
3,649
9,605
15,845
7,129
3,818
10,299
2,808
1,278
587
2,032
2,574
1,317
608
1,392
2,854
1,247
617
1,807
18 All types
990,231
1,002,147
487,201
486,058
505,448
502,983
77,140
93,095
82,756
19
20
21
22
23
24
National defense
International affairs
General science, space, and technology
Energy
Natural resources and environment
Agriculture
273,375
14,152
8,976
4,735
13,639
31,449
282,016
11,761
9,188
4,176
13,225
26,493
134,675
8,367
4,727
3,305
7,553
15,412
135,367
5,384
12,519
2,484
6,245
14,482
138,544
8,876
4,594
2,735
7,141
16,160
142,886
4,374
4,324
2,335
6,175
11,824
22,132
1,712
860
-197
1,157
1,383
25,928
1,004
1,118
499
1,336
5,177
21,366
65
867
316
1,121
3,139
25
26
27
28
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, social
services
4,823
28,117
7,233
5,235
26,228
5,334
644
15,360
3,901
860
12,658
3,169
3,647
14,745
3,494
4,893
12,113
3,108
-547
2,505
-602
1,625
2,306
742
585
2,304
450
1 All sources
2 Individual income taxes, net
3
Withheld
Presidential Election Campaign Fund
4
5
Nonwithheld
6
Refunds
Corporation income taxes
7
Gross receipts
8
Refunds
9 Social insurance taxes and contributions,
net
10 Employment taxes and
contributions 1
11
Self-employment taxes and
contributions
12 Unemployment insurance
13 Other net receipts
14
15
16
17
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts 4
OUTLAYS
30,585
28,721
14,481
14,712
15,287
14,182
2,178
2,455
3,045
29 Health
30 Social security and medicare
31 Income security
35,935
268,921
119,796
39,968
282,473
123,499
17,237
129,037
59,457
17,872
135,214
60,786
18,795
138,299
60,628
20,318
142,864
62,248
3,332
23,425
9,880
3,613
23,979'
10,241
3,744
23,153
9,595
32
33
34
35
36
37
26,356
6,603
6,104
6,431
136,008
-33,007
26,801
7,507
6,005
1,621
138,519
-36,622
14,527
3,212
3,634
3,391
67,448
-17,953
12,193
3,352
3,566
2,179
68,054
-17,193
14,447
3,360
2,786
2,886
65,816
-17,376
12,264
3,626
3,344
337
70,110
-18,104
2,168
766
379
428
10,284
-4,106
3,645
674
-231
241
11,431
-2,688
899
649
1,085
148
13,215
-2,990
Veterans benefits and services
Administration of justice
General government
General-purpose fiscal assistance
Net interest'
Undistributed offsetting receipts
1. Old-age, disability, and hospital insurance, and railroad retirement accounts.
2. Old-age, disability, and hospital insurance.
3. Federal employee retirement contributions and civil service retirement and
disability fund.
4. Deposits of earnings by Federal Reserve Banks and other miscellaneous
receipts.
5. Net interest function includes interest received by trust funds.
6. Consists of rents and royalties on the outer continental shelf and U.S.
government contributions for employee retirement.
SOURCES. U.S. Department of the Treasury, "Monthly Treasury Statement of
Receipts and Outlays of the U.S. Government," and the U.S. Office of Management and Budget, Budget of the U.S. Government, Fiscal Year 1988.
A30
Domestic Financial Statistics • February 1988
1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars
1985
1986
1987
Item
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
1 Federal debt outstanding
1,827.5
1,950.3
1,991.1
2,063.6
2,129.5
2,218.9
2,250.7
2,313.1
2,354.3
2 Public debt securities
3
Held by public
4
Held by agencies
1,823.1
1,506.6
316.5
1,945.9
1,597.1
348.9
1,986.8
1,634.3
352.6
2,059.3
1,684.9
374.4
2,125.3
1,742.4
382.9
2,214.8
1,811.7
403.1
2,246.7
1,839.3
407.5
2,309.3
1,871.1
438.1
2,350.3
1,893.1
457.2
4.4
3.3
1.1
4.4
3.3
1.1
4.3
3.2
1.1
4.3
3.2
1.1
4.2
3.2
1.1
4.0
3.0
1.1
4.0
2.9
1.1
3.8
2.8
1.0
4.0
3.0
1.0
5 Agency securities
6
Held by public
7
Held by agencies
1,823.8
1,932.4
1,973.3
2,060.0
2,111.0
2,200.5
2,232.4
2,295.0
2,336.0
9 Public debt securities
10 Other debt 1
1,822.5
1.3
1,931.1
1.3
1,972.0
1.3
2,058.7
1.3
2,109.7
1.3
2,199.3
1.3
2,231.1
1.3
2,293.7
1.3
2,334.7
1.3
11 MEMO: Statutory debt limit
1,823.8
2,078.7
2,078.7
2,078.7
2,111.0
2,300.0
2,300.0
2,320.0
2,800.0
8 Debt subject to statutory limit
1. Includes guaranteed debt of Treasury and other federal agencies, specified
participation certificates, notes to international lending organizations, and District
of Columbia stadium bonds.
1.41 GROSS PUBLIC DEBT OF U.S. TREASURY
SOURCES. Treasury Bulletin and Monthly
United States.
Statement
of the Public Debt of the
Types and Ownership
Billions of dollars, end of period
1986
Type and holder
1 Total gross public debt
2
3
4
5
6
7
8
9
10
11
12
13
By type
Interest-bearing debt
Marketable
Bills
Notes
Bonds
Nonmarketable 1
State and local government series
Foreign issues
Government
Public
Savings bonds and notes.
Government account series 3
14 Non-interest-bearing debt
15
16
17
18
19
20
21
22
23
24
25
26
By holder*
U.S. government agencies and trust funds
Federal Reserve Banks
Private investors
Commercial banks
Money market funds
Insurance companies
Other companies
State and local Treasurys
Individuals
Savings bonds
Other securities
Foreign and international
Other miscellaneous investors 6
1983
1985
1986
Q4
Q1
Q2
Q3
1,410.7
1,663.0
1,945.9
2,214.8
2,214.8
2,246.7
2,309.3
2,350.3
1,400.9
1,050.9
343.8
573.4
133.7
350.0
36.7
10.4
10.4
1,660.6
1,247.4
374.4
705.1
167.9
413.2
44.4
9.1
9.1
2,212.0
2,212.0
1,619.0
426.7
927.5
249.8
593.1
110.5
4.7
4.7
2,244.0
1,635.7
406.2
955.3
259.3
608.3
118.5
4.9
4.9
2,306.7
1,659.0
391.0
984.4
268.6
647.7
125.4
5.1
5.1
90.6
386.9
1,619.0
426.7
927.5
249.8
593.1
110.5
4.7
4.7
.0
90.6
386.9
2.8
403.1
211.3
.0
.0
70.7
231.9
73.1
286.2
1,943.4
1,437.7
399.9
812.5
211.1
505.7
87.5
7.5
7.5
.0
78.1
332.2
9.8
2.3
2.5
236.3
151.9
1,022.6
56.7
39.7
155.1
289.6
160.9
1,212.5
183.4
25.9
76.4
50.1
179.4
348.9
181.3
1,417.2
192.2
25.1
95.8
59.0
n.a.
71.5
61.9
166.3
259.8
74.5
69.3
192.9
360.6
79.8
75.0
212.5
n.a.
188.8
22.8
1. Includes (not shown separately): Securities issued to the Rural Electrification Administration; depository bonds, retirement plan bonds, and individual
retirement bonds.
2. Nonmarketable dollar-denominated and foreign currency-denominated series held by foreigners.
3. Held almost entirely by U.S. Treasury agencies and trust funds.
4. Data for Federal Reserve Banks and U.S. Treasury agencies and trust funds
are actual holdings; data for other groups are Treasury estimates.
1984
.0
1,602.0
232.1
28.6
106.9
68.8
n.a.
92.3
70.5 r
251.5
n.a.
93.0
391.4
95.2
421.6
2,347.8
1.676.0
378.3
1.005.1
277.6
671.8
129.0
4.4
4.4
.0
97.0
440.7
2.8
2.7
2.6
2.5
403.1
211.3
1,602.0
232.1
28.6
106.9
68.8
n.a.
407.5
196.4
1,641.4
232.0
438.1
212.3
1,657.7
237.1
20.6
n.a.
78.7
n.a.
457.2
211.9
1,682.6
250.5
n.a.
n.a.
80.2
n.a.
92.3
70.5 r
251.5
n.a.
.0
18.8
n.a.
73.4 r
n.a.
94.7
68.3 r
250.7 r
n.a.
.0
96.8
68.6 r
270. V
n.a.
98.5
70.4
268.4
n.a.
5. Consists of investments of foreign and international accounts. Excludes
non-interest-bearing notes issued to the International Monetary Fund.
6. Includes savings and loan associations, nonprofit institutions, credit unions,
mutual savings banks, corporate pension trust funds, dealers and brokers, certain
U.S. Treasury deposit accounts, and federally-sponsored agencies.
SOURCES. Data by type of security, U.S. Treasury Department, Monthly
Statement of the Public Debt of the United States; data by holder. Treasury
Bulletin.
Federal Finance
A31
Transaction1
1.42 U.S. GOVERNMENT SECURITIES DEALERS
Par value; averages of daily figures, in millions of dollars
1987
1987
Item
1
?
3
4
6
/
X
9
10
11
1?.
13
14
15
16
17
18
Immediate delivery 2
U.S. Treasury securities
By maturity
Bills
Other within 1 year
1-5 years
5-10 years
Over 10 years
By type of customer
U.S. government securities
dealers
U.S. government securities
brokers
All others 3
Federal agency securities
Certificates of deposit
Bankers acceptances
Commercial paper
Futures contracts
Treasury bills
Treasury coupons
Federal agency securities
Forward transactions
U.S. Treasury securities
Federal agency securities
1984
1985
1986
Sept.
Oct.
Nov.
Oct. 21
Oct. 28
Nov. 4
Nov. 11
Nov. 18
Nov. 25
52,778
75,331
95,445''
108,185
138,937
95,689
172,975
155,441
121,579
108,283
88,500
86,651
26,035
1,305
11,733
7,606
6,099
32,900
1,811
18,361
12,703
9,556
34,247r
2,115
24,667
20,456'
13,961
35,683
2,992
27,377
25,973
16,160
41,000
4,405
41,107
34,061
18,365
30,259
4,070
28,364
19,153
13,844
51,411
4,680
50,106
42,385
24,393
45,443
5,378
48,013
36,646
19,961
36,114
5,362
39,170
26,046
14,887
30,442
3,657
28,815
23,119
22,250
28,970
3,863
28,755
14,588
12,325
29,467
4,199
25,372
18,208
9,405
2,919
3,336
3,67C
2,560'
2,750'
1,894
2,765
2,581
2,614
1,977
1,381
2,308
25,580
24,278
7,846
4,947
3,243
10,018
36,222
35,773
11,640
4,016
3,242
12,717
49,558'
42,218
16,748'
4,355
3,272
16,660
64,384'
41,240
15,797
3,234
2,799
16,155
82,101'
54,085
18,586
4,927
3,362
19,394
55,448
38,346
17,919
3,392
2,727
16,007
101,567
68,642
21,460
4,922
3,466
20,631
90,832
62,029
20,205
5,142
3,320
18,752
72,254
46,711
19,531
4,105
3,168
18,138
63,613
42,693
18,552
3,782
2,482
15,780
51,658
35,461
19,382
3,100
2,740
17,453
47,509
36,834
18,085
3,329
2,997
15,776
6,947
4,533
264
5,561
6,085
252
3,311
7,175
16
2,748
11,981
1
4,056
11,462
8
2,774
8,489
2
7,183
13,892
2
4,072
11,876
30
3,464
9,926
8
2,315
10,920
3
2,419
6,326
0
3,226
7,719
0
1,364
2,843
1,283
3,857
1,876
7,831'
788
8,292
2,653
7,676
2,167
7,191
4,475
9,783
2,084
7,054
2,917
6,787
2,310
9,137
2,838
8,552
1,450
5,885
1. Transactions are market purchases and sales of securities as reported to the
Federal Reserve Bank of New York by the U.S. government securities dealers on
its published list of primary dealers.
Averages for transactions are based on the number of trading days in the period.
The figures exclude allotments of, and exchanges for, new U.S. Treasury
securities, redemptions of called or matured securities, purchases or sajes of
securities under repurchase agreement, reverse repurchase (resale), or similar
contracts.
2. Data for immediate transactions do not include forward transactions.
3. Includes, among others, all other dealers and brokers in commodities and
securities, nondealer departments of commercial banks, foreign banking agencies,
and the Federal Reserve System.
4. Futures contracts are standardized agreements arranged on an organized
exchange in which parties commit to purchase or sell securities for delivery at a
future date.
5. Forward transactions are agreements arranged in the over-the-counter
market in which securities are purchased (sold) for delivery after 5 business days
from the date of the transaction for Treasury securities (Treasury bills, notes, and
bonds) or after 30 days for mortgage-backed agency issues.
A32
DomesticNonfinancialStatistics • February 1988
1.43 U.S. GOVERNMENT SECURITIES DEALERS
Positions and Financing1
Averages of daily figures, in millions of dollars
1987
Item
1984
1985
1987
1986'
Sept.
Oct.
Nov.
Oct. 28
Nov. 4
Nov. 11
Nov. 18
Nov. 25
Positions
1
Net immediate 2
U.S. Treasury securities
5,429
7,391
12,912
-23,337
-15,440^
-6,978
-7,355'
-8,383
-5,399
-8,855
-5,637
2
3
4
5
6
Bills
Other within 1 year
1-5 years
5-10 years
Over 10 years
5,500
63
2,159
-1,119
-1,174
10,075
1,050
5,154
-6,202
-2,686
12,761
3,706
9,146
-9,505
-3,197
2,404
-760
-10,137
-8,100
-6,745
7,260''
-620
-4,938'
-8,724
-8,418
5,702
-565
1,637
-6,214
-7,538
12,428
-349
942r
-10,335
-10,041
9,606
-176
1,603
-10,139
-9,277
7,399
-333
3,120
-7,930
-7,655
4,388
-856
340
-5,516
-7,211
4,377
-613
2,282
-4,626
-7,058
7
8
9
10
Federal agency securities
Certificates of deposit
Bankers acceptances
Commercial paper
Futures positions
Treasury bills
Treasury coupons
Federal agency securities
Forward positions
U.S. Treasury securities
Federal agency securities
15,294
7,369
3,874
3,788
22,860
9,192
4,586
5,570
32,984
10,485
5,526
8,089
33,679
7,968
3,016
6,388
34,002
7,537
2,879
7,426
29,108
6,821
3,151
7,729
34,242
7,714
2,950
9,299
30,374
7,475
3,298
8,568
29,694
7,008
3,377
8,891
30,537
6,851
3,168
7,967
27,615
6,662
3,066
6,564
-4,525
1,794
233
-7,322
4,465
-722
-18,059
3,473
-153
-200
7,295
-96
2,492'
1,158
9,170
-90
2,320
8,815
-105
2,027
8,678
-98
1,042
9,150
-92
1,250
9,479
-88
594
9,334
-88
-1,643
-9,205
-911
-9,420
-2,144
-11,840
-191
-21,797
145
-18,489
l,096 r
-22,887 r
1,847
-20,153
2,465
-20,105
-120
-19,621
-1,605
-16,262
11
12
13
14
15
s.stw'
-100
229r
-22,78c
Financing 3
Reverse repurchase agreements 4
Overnight and continuing
Term
Repurchase agreements
18 Overnight and continuing
19 Term
16
17
44,078
68,357
68,035
80,509
98,954
108,693
139,783
164,707
131,194
164,441
n.a.
n.a.
126,850
171,642
124,236
166,221
117,222
172,200
n.a.
n.a.
n.a.
n.a.
75,717
57,047
101,410
70,076
141,735
102,640
182,494
125,741
177,013
123,372
n.a.
n.a.
175,048
131,033
171,557
125,755
145,276
158,025
n.a.
n.a.
n.a.
n.a.
1. Data for dealer positions and sources of financing are obtained from reports
submitted to the Federal Reserve Bank of New York by the U.S. Treasury
securities dealers on its published list of primary dealers.
Data for positions are averages of daily figures, in terms of par value, based on
the number of trading days in the period. Positions are net amounts and are shown
on a commitment basis. Data for financing are in terms of actual amounts
borrowed or lent and are based on Wednesday figures.
2. Immediate positions are net 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 (RPs). The maturities of some
repurchase agreements are sufficiently long, however, to suggest that the securities involved are not available for trading purposes. Immediate positions include
reverses to maturity, which are securities that were sold after having been
obtained under reverse repurchase agreements that mature on the same day as the
securities. Data for immediate positions do not include forward positions.
3. Figures cover financing involving U.S. Treasury and federal agency securities, negotiable CDs, bankers acceptances, and commercial paper.
4. Includes all reverse repurchase agreements, including those that have been
arranged to make delivery on short sales and those for which the securities
obtained have been used as collateral on borrowings, that is, matched agreements.
5. Includes both repurchase agreements undertaken to finance positions and
"matched book" repurchase agreements.
NOTE. Data on positions for the period May 1 to Sept. 30, 1986, are partially
estimated.
Federal Finance
1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES
A33
Debt Outstanding
Millions of dollars, end of period
1987
1984
Agency
1 Federal and federally sponsored agencies
2 Federal agencies
3 Defense Department
Export-Import Bank 2,3
4
5
Federal Housing Administration
Government National Mortgage Association participation
6
certificates
7
Postal Service
8 Tennessee Valley Authority
9
United States Railway Association 6
10 Federally sponsored agencies 7
11
Federal Home Loan Banks
12 Federal Home Loan Mortgage Corporation
13 Federal National Mortgage Association
14 Farm Credit Banks
15
Student Loan Marketing Association 8
16 Financing Corporation
1985
1986
May
June
July
Aug.
Sept.
Oct.
271,220
293,905
307,361
308,547
310,854
313,859
316,940
35,145
142
15,882
133
36,390
71
15,678
115
36,958
33
14,211
138
36,587
21
13,813
168
36,968
20
13,416
169
36,963
18
13,416
175
37,845
16
13,416
174
37,177
15
12,650
178
n.a.
2,165
1,337
15,435
51
2,165
1,940
16,347
74
2,165
3,104
17,222
85
1,965
3,104
17,431
85
1,965
3,718
17,595
85
1,965
3,718
17,586
85
1,965
4,603
17,586
85
1,965
4,603
17,766
0
237,012
65,085
10,270
83,720
72,192
5,745
n.a.
257,515
74,447
11,926
93,896
68,851
8,395
n.a.
270,553
88,752
13,589
93,563
62,478
12,171
n.a.
271,960
95,931
14,637
90,514
56,648
14,230
n.a.
273,886
99,680
12,097
91,039
56,648
14,422
n.a.
276,896
100,976
12,309
91,637
55,715
16,259
n.a.
279,095
102,422
14,150
91,568
55,408
15,547
n.a.
104,380
n.a.
92,618
55,276
16,389
n.a.
108,108
n.a.
94,298
55,854
16,220
600
145,217
153,373
157,510
157,331
157,506
157,302
158,117
157,252
n.a.
15,852
1,087
5,000
13,710
51
15,670
1,690
5,000
14,622
74
14,205
2,854
4,970
15,797
85
13,807
2,854
4,970
16,051
85
13,410
3,468
4,970
16,215
85
13,410
3,468
4,970
16,206
85
13,410
4,353
4,970
16,206
85
12,644
4,353
4,970
16,386
0
58,971
20,693
29,853
64,234
20,654
31,429
65,374
21,680
32,545
65,304
21,525
32,735
65,199
21,539
32,620
65,049
21,529
32,585
65,069
21,503
32,521
65,009
21,197
32,693
n.a.
MEMO
17 Federal Financing Bank debt
Lending to federal and federally
18
19
20
21
22
sponsored
Export-Import Bank 3
Postal Service
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association 6
Other Lending11
23 Farmers Home Administration
24 Rural Electrification Administration
25 Other
1. Consists of mortgages assumed by the Defense Department between 1957
and 1963 under family housing and homeowners assistance programs.
2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976.
3. 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 before 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.
7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. Some data are estimated.
n.a.
8. Before late 1981, the Association obtained financing through the Federal
Financing Bank (FFB).
9. The Financing Corporation, established in August 1987 to recapitalize the
Federal Savings and Loan Insurance Corporation, undertook its first borrowing in
October 1987.
10. 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.
11. 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.
A34
DomesticNonfinancialStatistics • February 1988
1.45 NEW SECURITY ISSUES
Tax-Exempt State and Local Governments
Millions of dollars
1987
Type of issue or issuer,
or use
1984
1
1985
1986
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
106,641
214,189
147,011
6,708
6,037
10,718
6,967
6,500
5,510
6,257
7,113
Type of issue
2 General obligation
3 Revenue
26,485
80,156
52,622
161,567
46,346
100,664
3,363
3,345
2,872
3,165
3,329
7,389
2,238
4,729
1,975
4,525
1,755
3,755
1,127
5,130
2,374
4,739
Type of issuer
4 State
5 Special district and statutory authority
6 Municipalities, counties, townships
9,129
63,550
33,962
13,004
134,363
66,822
14,474
89,997
42,541
419
4,665
1,624
1,002
3,019
2,017
1,138
6,453
3,127
834
3,951
2,182
398
4,508
1,594
535
3,712
1,263
385
4,668
1,204
431
4,103
2,579
7 Issues for new capital, total
94,050
156,050
83,490
3,117
3,848
7,552
4,478
5,084
4,340
4,095
6,120
Use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
7,553
7,552
17,844
29,928
15,415
15,758
16,658
12,070
26,852
63,181
12,892
24,398
16,948
11,666
35,383
17,332
5,594
47,433
786
98
360
364
91
1,308
789
194
518
454
204
1,689
1,554
705
1,313
1,082
498
2,399
773
647
823
465
469
1,301
869
226
424
903
1,630
1,033
653
311
491
647
412
1,826
480
168
590
896
683
1,278
808
327
981
1,651
178
2,175
1 All issues, new and refunding
8
9
10
11
12
13
1. Par amounts of long-term issues based on date of sale.
2. Includes school districts beginning April 1986.
1.46 NEW SECURITY ISSUES
SOURCES. Securities Data Company beginning 1986. Public Securities Association for earlier data. This new data source began with the November BULLETIN.
U.S. Corporations
Millions of dollars
Type of issue or issuer,
or use
1987
1984
1985
1986
Mar.
1 All issues1
155,741
2 Bonds2
133,113
Apr.
May
June
July
Aug.
Sept.'
Oct.
423,726
37,964'
23,735
19,969
28,446r
27,4ir
21,888'
29,293
20,360
203,500
355,293
28,154
r
19,518
13,431
22,094r
22,071r
17,685'
23,635
17,341
74,175
36,324
22,613
119,559
46,195
37,781
231,936
80,761
42,596
23,399
n.a.
4,755
17,634
n.a.
1,884
11,394
n.a.
2,037
20,564
n.a.
1,530
19,045'
n.a.
3,026
14,852
n.a.
2,833
21,975
n.a.
1,660
15,845
32,804
14,792
4,784
10,996
3,400
66,336
63,973
17,066
6,020
13,649
10,832
91,958
91,548
40,124
9,971
31,426
16,659
165,564
7,180
4,261
521
794
710
14,689
2,734
1,683
168
1,370
175
13,389
5,035
754
21
572
138
6,912
4,104
2,061
0
2,091
205
13,632
5,552
1,037
343
1,654
119
13,366'
3,343'
1,281
296
1,533
856
10,377'
3,506
1,479
25
1,702
930
15,992
2,673
1,131
263
975
1,384
10,916
12 Stocks3
22,628
35,515
68,433
9,810
4,217
6,538
6,352
5,340
4,203
5,658
3,019
Type
13 Preferred
14 Common
4,118
18,510
6,505
29,010
11,514
50,316
6,603
2,257
7,553
n.a.
526
3,691
n.a.
1,170
5,368
n.a.
1,202
5,150
n.a.
1,157
4,183
n.a.
906
3,297
n.a.
1,112
4,546
n a
236
2,783
4,054
6,277
589
1,624
419
9,665
5,700
9,149
1,544
1,966
978
16,178
15,027
10,617
2,427
4,020
1,825
34,517
2,016
2,366
299
907
57
4,165
653
2,203
230
297
18
816
1,066
1,516
3
374
200
3,379
1,438
1,353
492
329
199
2,541
1,046
879
379
472
294
2,270
370
996
0
85
277
2,475
858
807
11
529
75
3,378
667
656
40
51
107
1,498
Type of offering
3 Public, domestic
4 Private placement, domestic 3
5. Sold abroad
6
7
8
9
10
11
16
17
18
19
20
21
Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
239,015
1. Figures which represent gross proceeds of issues maturing in more than one
year, are principal amount or number of units multiplied by offering price.
Excludes secondary offerings, employee stock plans, investment companies other
than closed-end, intracorporate transactions, equities sold abroad, and Yankee
bonds. Stock data include ownership securities issued by limited partnerships.
1,496
2. Monthly data include only public offerings.
3. Data are not available on a monthly basis.
SOURCES. IDD Information Services, Inc., U.S. Securities and Exchange
Commission and the Board of Governors of the Federal Reserve System.
Securities Market and Corporate Finance
1.47 OPEN-END INVESTMENT COMPANIES
A35
Net Sales and Asset Position
Millions of dollars
1987
Item
1985
1986
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
INVESTMENT COMPANIES 1
1 Sales of own shares 2
222,670
411,751
40,378
42,857
28,295
28,637
27,970
26,455
24,834
25,990
2 Redemptions of own shares 3
3 Net sales
132,440
90,230
239,394
172,357
24,730
15,648
37,448
5,409
23,453
4,842
23,693
4,944
22,807
5,763
22,561
3,894
28,323
-3,489
34,597
-8,607
4 Assets4
251,695
424,156
506,752
502,487
500,634
516,866
531,022
539,171
521,007
456,422
5 Cash position 5
6 Other
20,607
231,088
30,716
393,440
37,090
469,662
43,009
459,478
39,158
461,476
41,467
475,099
41,587
489,435
40,802
498,369
42,397'
478,610'
40,929
415,493
5. Also includes all U.S. government securities and other short-term debt
securities.
1. Excluding money market funds.
2. 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.
3. Excludes share redemption resulting from conversions from one fund to
another in the same group.
4. Market value at end of period, less current liabilities.
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.
1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1985
Account
1 Corporate profits with inventory valuation and
capita! consumption adjustment
Profits before tax
Profits tax liability
Profits after tax
Dividends
Undistributed profits
2
3
4
5
6
7 Inventory valuation
8 Capital consumption adjustment
1984
1987
1986
1986
Q4
Q1
Q2
Q3
Q4
QI
Q2
Q3'
266.9
239.9
93.9
146.1
79.0
67.0
277.6
224.8
96.7
128.1
81.3
46.8
284.4
231.9
105.0
126.8
86.8
40.0
277.8
233.5
99.1
134.4
81.7
52.7
288.0
218.9
98.1
120.9
84.3
36.6
282.3
224.4
102.1
122.3
86.6
35.7
286.4
236.3
106.1
130.2
87.7
42.5
281.1
247.9
113.9
134.0
88.6
45.4
294.0
257.0
128.0
129.0
90.3
38.7
296.8
268.7
134.2
134.5
92.4
42.1
314.9
284.9
143.0
141.9
95.2
46.7
-5.8
32.8
-.8
53.5
6.5
46.0
-9.8
54.2
17.8
51.3
11.3
46.7
6.0
44.0
-8.9
42.1
-11.3
48.2
-20.0
48.0
-17.6
47.7
SOURCE. Survey of Current Business (Department of Commerce).
1985
A36
DomesticNonfinancialStatistics • February 1988
Assets and Liabilities1
1.49 NONFINANCIAL CORPORATIONS
Billions of dollars, except for ratio
1985
Account
1 Current assets
1980
1981
1982
1986
1984
1983
Q1
Q2
Q3
Q4
Q1
1,328.3
1,419.6
1,437.1
1,565.9
1,703.0
1,722.7
1,734.6
1,763.0
1,784.6
1,795.7
127.0
18.7
507.5
543.0
132.1
135.6
17.7
532.5
584.0
149.7
147.8
23.0
517.4
579.0
169.8
171.8
31.0
583.0
603.4
186.7
173.6
36.2
633.1
656.9
203.2
167.5
35.7
650.3
665.7
203.5
167.1
35.4
654.1
666.7
211.2
176.3
32.6
661.0
675.0
218.0
189.2
33.0
671.5
666.0
224.9
195.3
31.0
663.4
679.6
226.3
7 Current liabilities
890.6
971.3
986.0
1,059.6
1,163.6
1,174.1
1,182.9
1,211.9
1,233.6
1,222.3
8 Notes and accounts payable
9 Other
514.4
376.2
547.1
424.1
550.7
435.3
595.7
463.9
647.8
515.8
636.9
537.1
651.7
531.2
670.4
541.5
682.7
550.9
668.4
553.9
10 Net working capital
437.8
448.3
451.1
516.3
539.5
548.6
551.7
551.1
551.0
573.4
11 MEMO: Current ratio 2
1.492
1.462
1.459
1.487
1.464
1.467
1.466
1.455
1.447
1.469
2
3
4
5
6
Cash
U.S. government securities
Notes and accounts receivable
Inventories
Other
1. For a description of this series, see "Working Capital of Nonfinancial
Corporations" in the July 1978 BULLETIN, pp. 533-37. Data are not currently
available after 1986:1.
2. Ratio of total current assets to total current liabilities.
SOURCE. Federal Trade Commission and Bureau of the Census,
1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment A
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1986
Industry
1
Total nonfarm business
Manufacturing
2 Durable goods industries
3 Nondurable goods industries
4
5
6
7
8
9
10
Nonmanufacturing
Mining
Transportation
Railroad
Air
Other
Public utilities
Electric
Gas and other
Commercial and o t h e r
1985
1986
1988
Q1
Q3
Q4
Q1
Q2
Q3
Q4 1
QL2
387.13
379.47
390.57
376.21
375.50
386.09
374.23
377.65
393.13
417.25
427.97
73.27
80.21
69.14
73.56
71.85
76.01
68.56
73.62
69.42
70.01
69.87
74.20
70.47
70.18
68.76
72.03
71.78
75.78
76.40
86.05
78.41
86.27
15.88
11.22
11.18
11.29
10.14
10.31
10.31
11.02
11.64
11.74
11.86
7.08
4.79
6.15
6.66
6.26
5.89
6.15
6.53
6.42
6.70
5.87
5.83
7.02
5.78
6.01
6.41
6.84
6.25
5.55
7.46
5.97
5.77
5.72
6.19
6.21
5.91
7.05
7.08
7.03
6.48
7.66
8.35
6.92
36.11
12.71
150.93
33.91
12.47
160.38
31.65
12.88
167.89
33.77
12.66
157.91
33.81
12.00
161.31
33.78
12.34
166.08
30.85
12.75
160.70
31.13
12.35
164.69
31.31
13.58
169.87
33.32
12.84
176.29
31.65
13.72
183.15
• T r a d e and services are no longer being reported separately. They are included
in Commercial and other, line 10.
1. Anticipated by business.
1987
19871'
2. "Other" consists of construction; wholesale and retail trade: finance and
insurance; personal and business services; and communication.
SOURCE. Survey of Current Business (Department of Commerce).
Securities Markets and Corporate Finance
1.51 DOMESTIC FINANCE COMPANIES
A37
Assets and Liabilities
Billions of dollars, end of period
1986
1983
Account
1984
1987
1985
QL
Q2
Q3
Q4
QL
Q2
Q3
ASSETS
Accounts receivable, gross
Consumer
Business
Real estate
Total
83.3
113.4
20.5
217.3
89.9
137.8
23.8
251.5
113.4
158.3
28.9
300.6
117.2
165.9
29.9
312.9
125.1
167.7
30.8
323.6
137.1
161.0
32.1
330.2
136.5
174.8
33.7
345.0
133.9
182.8
35.1
351.8
138.0
189.0
36.9
363.9
144.4
188.7
38.3
371.5
Less:
5 Reserves for unearned income
6 Reserves for losses
30.3
3.7
33.8
4.2
39.2
4.9
40.0
5.0
40.7
5.1
42.4
5.4
41.4
5.8
40.4
5.9
41.2
6.2
42.8
6.6
7 Accounts receivable, net
8 All other
183.2
34.4
213.5
35.7
256.5
45.3
268.0
48.8
277.8
48.8
282.4
59.9
297.8
57.9
305.5
59.0
316.5
57.7
322.1
65.0
9 Total assets
217.6
249.2
301.9
316.8
326.6
342.3
355.6
364.5
374.2
387.1
18.3
60.5
20.0
73.1
20.6
99.2
19.0
104.3
19.2
108.4
20.2
112.8
22.2
117.8
17.3
119.1
17.2
120.4
16.2
123.5
11.1
67.7
31.2
28.9
12.9
77.2
34.5
31.5
12.5
93.1
40.9
35.7
13.4
101.0
42.3
36.7
15.4
105.2
40.1
38.4
16.0
109.8
44.1
39.4
17.2
115.6
43.4
39.4
21.6
118.4
46.3
41.8
24.4
121.5
48.3
42.3
26.9
128.0
48.7
43.8
217.6
249.2
301.9
316.8
326.6
342.3
355.6
364.5
374.2
387.1
1
2
3
4
LIABILITIES
10 Bank loans
11 Commercial paper
Debt
12 Other short-term
13 Long-term
14 All other liabilities
15 Capital, surplus, and undivided profits
16 Total liabilities and capital
NOTE. Components may not add to totals because of rounding.
1.52 DOMESTIC FINANCE COMPANIES
Business Credit
Millions of dollars, seasonally adjusted except as noted
Type
Accounts
receivable
outstanding
Oct. 31
19871
Changes in accounts
receivable
Extensions
Repayments
1987
1987
1987
Aug.
1 Total
2
3
4
5
6
7
8
9
10
Retail financing of installment sales
Automotive (commercial vehicles)
Business, industrial, and farm equipment
Wholesale financing
Automotive
Equipment
All other
Leasing
Automotive
Equipment
Loans on commercial accounts receivable and factored commercial accounts receivable
All other business credit
Oct.
Aug.
Sept.
Oct.
Aug.
Sept.
Oct.
193,597
1,400
1,754
4,337
29,862
30,294
30,929
28,282
28,540
26,592
32,507
24,431
1,206
65
-16
529
735
258
1,351
1,644
1,365
1,688
1,159
1,526
145
1,579
1,382
1,158
424
1,268
26,883
5,608
7,625
-1,572
73
152
-1,029
-1
223
3,485
249
-1,455
11,335
601
3,251
10,810
710
3,251
12,557
886
2,983
12,907
528
3,100
11,839
711
3,028
9,072
637
4,437
21,027
40,766
560
280
561
422
-197
188
1,086
1,403
1,340
952
1,117
1,245
526
1,123
779
530
1,314
1,057
18,472
16,278
331
306
248
817
704
369
7,712
1,298
8,488
1,690
8,241
1,215
7,382
992
8,240
873
7,537
846
These data also appear in the Board's G.20 (422) release. For address, see
inside front cover.
Sept.
1. Not seasonally adjusted,
A38
1.53
DomesticNonfinancialStatistics • February 1988
MORTGAGE MARKETS
Millions of dollars; exceptions noted.
1987
Item
1984
1985
1986
May
June
July
Aug.
Sept.
Oct.
Nov.
Terms and yields in primary and secondary markets
PRIMARY MARKETS
1
2
3
4
5
6
Conventional mortgages on new homes
Terms
Purchase price (thousands of dollars)
Amount of loan (thousands of dollars)
Loan/price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount) 2
Contract rate (percent per annum)
Yield (percent per year)
7 FHLBB series 3
8 HUD series
96.8
73.7
78.7
27.8
2.64
11.87
104.1
77.4
77.1
26.9
2.53
11.12
118.1
86.2
75.2
26.6
2.48
9.82
132.9
99.0
76.1
28.0
2.26
8.99
131.8
97.5
75.9
28.0
2.40
9.05
134.6
99.4
75.4
27.9
2.42
9.01
141.2
102.6
75.0
27.8
2.19
9.01
140.2
100.8
74.6
27.3
2.08
9.03
145.3r
106. r
75.(K
28.3 r
2.34'
8.86'
132.6
98.3
75.6
28.2
2.35
8.96
12.37
13.80
11.58
12.28
10.25
10.07
9.37
10.44
9.45
10.29
9.41
10.22
9.38
10.37
9.37
10.86
9.25'
10.87
9.35
n.a.
13.81
13.13
12.24
11.61
9.91
9.30
10.61
9.40
10.33
9.50
10.38
9.59
10.55
9.77
10.71
10.40
10.90
10.53
n.a.
9.96
SECONDARY MARKETS
Yield (percent per year)
9 FHA mortgages (HUD series) 5 ,
10 GNMA securities 6
Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
11 Total
12 FHA/VA-insured
13 Conventional
83,339
35,148
48,191
94,574
34,244
60,331
98,048
29,683
68,365
94,064
21,999
72,065
94,064
21,892
72,173
94,154
21,730
72,424
94,600
21,555
73,045
94,884
21,620
73,264
95,097
21,481
73,617
95,411
21,510
73,902
Mortgage transactions (during period)
14 Purchases
16,721
21,510
30,826
1,718
1,690
1,569
1,613
1,743
1,278
1,297
Mortgage
commitments7
15 Contracted (during period)
16 Outstanding (end of period)
21,007
6,384
20,155
3,402
32,987
3,386
1,726
4,410
1,745
4,448
2,373
5,071
2,276
5,690
1,842
5,627
1,566
5,046
2,899
5,845
9,283
910
8,373
12,399
841
11,559
13,517
746
12,771
12,442
688
11,754
12,598
694
11,903
12,834
684
12,150
12,924
679
12,245
12,940
672
12,269
21,886
18,506
44,012
38,905
103,474
100,236
7,995
7,767
7,864
7,447
7,252
6,831
5,031
4,723
4,297
4,160
n.a.
n.a.
32,603
48,989
110,855
7,182
7,330
5,611
4,506
3,507
FEDERAL H O M E LOAN MORTGAGE CORPORATION
Mortgage holdings (end of periodf
17 Total
18 FHA/VA
19 Conventional
Mortgage transactions (during period)
70 Purchases
21
9
Mortgage
commitments
22 Contracted (during period)
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) 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; from Department 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. Based on transactions on first day of subsequent month. Large
monthly movements in average yields may reflect market adjustments to changes
in maximum permissable 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 averages of Friday figures from the
Wall Street Journal.
7. 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.
8. Includes participation as well as whole loans.
9. Includes conventional and government-underwritten loans. FHLMC's mortgage commitments and mortgage transactions include activity under mortgage/
securities swap programs, while the corresponding data for FNMA exclude swap
activity.
Real Estate
A39
1.54 MORTGAGE DEBT OUTSTANDING1
Millions of dollars, end of period
1986
Type of holder, and type of property
1984
1985
1987
1986
Q3
Q4
QL
Q2
Q3
1 All holders
2,035,238
2,269,173
2,566,734
2,472,285
2,566,734
2,662,331
2,754,471
2,827,622
2 1- to 4-family
3 Multifamily
4 Commercial
5
1,318,545
185,604
419,444
111,645
1,467,409
214,045
482,029
105,690
1,666,421
246,984
556,569
96,760
1,607,857
237,754
527,163
99,511
1,666,421
246,984
556,569
96,760
1,712,109
257,286
599,384
93,552
1,778,306
266,383
617,627
92,155
1,830,432
272,757
633,167
91,266
1,269,702
379,498
196,163
20,264
152,894
10,177
1,390,394
429,196
213,434
23,373
181,032
11,357
1,507,289
502,534
235,814
31,173
222,799
12,748
1,464,924
474,658
228,593
28,623
204,996
12,446
1,507,289
502,534
235,814
31,173
222,799
12,748
1,560,403
519,474
243,518
29,515
233,234
13,207
1,607,771
544,381
255,672
30,496
244,385
13,828
1,646,764
563,553
264,983
30,995
253,261
14,314
709,718
528,791
75,567
104,896
464
156,699
14,120
18,938
111,175
12,466
23,787
760,499
554,301
89,739
115,771
688
171,797
12,381
19,894
127,670
11,852
28,902
777,312
558,412
97,059
121,236
605
193,842
12,827
20,952
149,111
10,952
33,601
772,175
557,938
94,227
119,406
604
185,980
12,985
20,802
140,841
11,352
32,111
777,312
558,412
97,059
121,236
605
193,842
12,827
20,952
149,111
10,952
33,601
810,099
557,234
103,791
148,274
800
195,743
12,903
20,934
151,420
10,486
35,087
826,110
569,594
105,871
149,842
803
200,382
12,745
21,663
155,611
10,363
36,898
840,251
580,605
107,629
151,213
804
204,632
12,745
21,863
159,811
10,213
38,328
158,993
2,301
585
1,716
1,276
213
119
497
447
166,928
1,473
539
934
733
183
113
159
278
203,800
889
47
842
48,421
21,625
7,608
8,446
10,742
159,505
887
48
839
457
132
57
115
153
203,800
889
47
842
48,421
21,625
7,608
8,446
10,742
199,509
687
46
641
48,203
21,390
7,710
8,463
10,640
196,514
667
45
622
48,085
21,157
7,808
8,553
10,567
191,561
654
44
610
42,978
18,111
7,903
6,592
10,372
4,816
2,048
2,768
87,940
82,175
5,765
52,261
3,074
49,187
10,399
9,654
745
4,920
2,254
2,666
98,282
91,966
6,316
47,498
2,798
44,700
14,022
11,881
2,141
5,047
2,386
2,661
97,895
90,718
7,177
39,984
2,353
37,631
11,564
10,010
1,554
4,966
2,331
2,635
97,717
90,508
7,209
42,119
2,478
39,641
13,359
11,127
2,232
5,047
2,386
2,661
97,895
90,718
7,177
39,984
2,353
37,631
11,564
10,010
1,554
5,177
2,447
2,730
95,140
88,106
7,034
37,362
2,198
35,164
12,940
11,774
1,166
5,268
2,531
2,737
94,064
87,013
7,051
35,833
2,108
33,725
12,597
11,172
1,425
5,175
2,435
2,740
94,884
87,901
6,983
34,93C
2,055'
32,875r
12,94C
11,570''
1,37c
44 Mortgage pools or trusts 6
45
Government National Mortgage Association
46
1- to 4-family
47
Multifamily
48
Federal Home Loan Mortgage Corporation
49
1- to 4-family
50
Multifamily
51
Federal National Mortgage Association
1- to 4-family
52
Multifamily
53
54
Farmers Home Administration
55
1- to 4-family
56
Multifamily
57
Commercial
58
Farm
332,057
179,981
175,589
4,392
70,822
70,253
569
36,215
35,965
250
45,039
21,813
5,841
7,559
9,826
415,042
212,145
207,198
4,947
100,387
99,515
872
54,987
54,036
951
47,523
22,186
6,675
8,190
10,472
529,763
260,869
255,132
5,J37
171,372
166,667
4,705
97,174
95,791
1,383
348
142
0
132
74
522,721
241,230
235,664
5,566
146,871
143,734
3,137
86,359
85,171
1,188
48,261
21,782
0
8,409
10,717
529,763
260,869
255,132
5,737
171,372
166,667
4,705
97,174
95,791
1,383
348
142
0
132
74
571,705
277,386
271,065
6,321
186,295
180,602
5,693
107,673
106,068
1,605
351
154
0
127
70
612,340
290,444
283,357
7,087
200,284
194,238
6,046
121,270
119,617
1,653
342
149
0
126
67
641,239r
302,016
294,647
7,369
208,350'
201,786'
6,564r
130,540
128,770
1,770
333
144
0
124
65
59 Individuals and others 7
60
1- to 4-family
Multifamily
61
67
Commercial
Farm
63
274,486
154,315
48,670
42,423
29,078
296,809
165,835
55,424
49,207
26,343
325,882
180,896
66,133
54,845
24,008
325,135
183,255
63,886
53,396
24,598
325,882
180,896
66,133
54,845
24,008
330,714
179,517
70,146
57,866
23,185
337,846
182,010
73,924
59,110
22,802
348,058
186,308
76,961
62,166'
22,623
6 Selected financial institutions
7
Commercial banks
8
1- to 4-family
9
Multifamily
10
Commercial
11
Farm
1?
13
14
IS
16
17
18
19
70
71
22
Savings institutions 3
1- to 4-family
Multifamily
Commercial
Farm
Life insurance companies
1- to 4-family
Multifamily
Commercial
Farm
Finance companies
23 Federal and related agencies
24
Government National Mortgage Association
75
1- to 4-family
76
Multifamily
27
Farmers Home Administration
28
1- to 4-family
79
Multifamily
30
Commercial
Farm
31
32
33
34
35
36
37
38
39
40
41
47
43
Federal Housing and Veterans Administration
1- to 4-family
Multifamily
Federal National Mortgage Association
1- to 4-family
Multifamily
Federal Land Banks
1- to 4-family
Farm
Federal Home Loan Mortgage Corporation
1- to 4-family
Multifamily
1. Based on data from various institutional and governmental sources, with
some quarters estimated in part by the Federal Reserve. Multifamily debt refers
to loans on structures of five or more units.
2. Includes loans held by nondeposit trust companies but not bank trust
departments.
3. Includes savings banks and savings and loan associations. Beginning 1987:1,
data reported by FSLIC-insured institutions include loans in process and other
contra assets.
4. Assumed to be entirely 1- to 4-family loans.
5. FmHA-guaranteed securities sold to the Federal Financing Bank were
reallocated from FmHA mortgage pools to FmHA mortgage holdings in 1986: 4,
because of accounting changes by the Farmers Home Administration.
6. Outstanding principal balances of mortgage pools backing securities insured
or guaranteed by the agency indicated.
7. Other holders include mortgage companies, real estate investment trusts,
state and local credit agencies, state and local retirement funds, noninsured
pension funds, credit unions, and other U.S. agencies.
A40
DomesticNonfinancialStatistics • February 1988
1.55 CONSUMER INSTALLMENT CREDIT1-4 Total Outstanding, and Net Change, seasonally adjusted
Millions of dollars
1987
Holder, and type of credit
1985
1986
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept/
Oct.
Amounts outstanding (end of period)
1 Total
522,805
577,784
579,591
579,913
583,595
583,276
587,821
591,175
596,182
602,607
606,346
By major holder
Commercial banks . . . .
Finance companies . . .
Credit unions
Retailers
Savings institutions . . .
Gasoline companies . . .
242,084
113,070
72,119
38,864
52,433
4,235
261,604
136,494
77,857
40,586
58,037
3,205
262,105
136,009
78,492
40,644
59,031
3,311
261,933
136,050
78,569
40,469
59,488
3,405
263,433
137,091
79,255
40,467
59,826
3,522
263,463
136,398
79,476
40,318
60,045
3,576
264,3%
138,038
80,585
40,287
60,983
3,532
265,085
138,745
81,492
40,364
61,910
3,580
265,893
140,689
82,486
40,391
63,080
3,643
269,155
142,648
83,340
40,482
63,279
3,703
270,936
143,118
84,207
40,848
63,546
3,691
By major type of credit
8 Automobile
9
Commercial banks ..
10 Credit unions
11 Finance companies..
12 Savings institutions .
208,057
93,003
35,635
70,091
9,328
245,055
100,709
39,029
93,274
12,043
246,064
101,688
39,347
92,780
12,249
246,290
101,528
39,386
93,032
12,344
247,663
101,781
39,730
93,738
12,414
247,578
102,189
39,841
93,089
12,459
250,130
102,810
40,396
94,270
12,654
250,980
102,829
40,851
94,455
12,846
254,013
103,382
41,349
96,193
13,089
257,470
104,662
41,777
97,900
13,130
259,0%
105,479
42,212
98,219
13,186
13 Revolving
14 Commercial banks ..
15 Retailers
16 Gasoline companies .
17 Savings institutions .
18 Credit unions
122,021
75,866
34,695
4,235
5,705
1,520
134,938
85,652
36,240
3,205
7,713
2,128
135,663
86,053
36,308
3,311
7,845
2,145
135,166
85,567
36,141
3,405
7,906
2,147
136,706
86,929
36,139
3,522
7,951
2,166
136,869
87,133
36,009
3,576
7,980
2,172
137,401
87,590
35,971
3,532
8,105
2,202
138,741
88,685
36,021
3,580
8,228
2,227
139,837
89,535
36,022
3,643
8,383
2,254
141,704
91,226
36,087
3,703
8,410
2,278
143,272
92,419
36,416
3,691
8,445
2,301
19 Mobile home
20
Commercial banks ..
21
Finance companies..
22
Savings institutions .
25,488
9,538
9,391
6,559
25,710
8,812
9,028
7,870
25,789
8,739
9,045
8,005
25,614
8,725
8,823
8,067
25,626
8,698
8,816
8,112
25,542
8,615
8,785
8,142
25,685
8,609
8,807
8,269
25,860
8,626
8,839
8,395
25,695
8,518
8,623
8,554
25,699
8,538
8.580
8.581
25,689
8,462
8,610
8,617
23 Other
24
Commercial banks ..
25
Finance companies..
26
Credit unions
27
Retailers
28
Savings institutions .
167,239
63,677
33,588
34,964
4,169
30,841
172,081
66,431
34,192
36,700
4,346
30,412
172,076
65,625
34,183
36,999
4,336
30,932
172,844
66,113
34,196
37,036
4,327
31,172
173,600
66,026
34,537
37,359
4,328
31,349
173,287
65,527
34,524
37,463
4,310
31,463
174,605
65,387
34,962
37,986
4,315
31,955
175,594
64,945
35,452
38,413
4,343
32,441
176,637
64,458
35,874
38,882
4,369
33,054
177,733
64,728
36,168
39,285
4,395
33,158
178,288
64,576
36,289
39,694
4,432
33,298
2
3
4
5
6
7
Net change (during period)
29 Total
76,622
54,979
1,013
322
3,682
-319
4,545
3,354
5,007
6,425
3,739
By major holder
Commercial banks
Finance companies
Credit unions
Retailers
Savings institutions
Gasoline companies
32,926
23,566
6,493
1,660
12,103
-126
19,520
23,424
5,738
1,722
5,604
-1,030
411
207
208
27
125
35
-172
41
77
-175
457
94
1,500
1,041
686
-2
338
117
30
-693
221
-149
219
54
933
1,640
1,109
-31
938
-44
689
707
907
77
927
48
808
1,944
994
27
1,170
63
3,262
1,959
854
91
199
60
1,781
470
867
366
267
-12
By major type of credit
36 Automobile
37
Commercial banks
Credit unions
38
39
Finance companies
40
Savings institutions
35,705
9,103
5,330
17,840
3,432
36,998
7,706
3,394
23,183
2,715
592
299
104
163
26
226
-160
39
252
95
1,373
253
344
706
70
-85
408
111
-649
45
2,552
621
555
1,181
195
850
19
455
185
192
3,033
553
498
1,738
243
3,457
1,280
428
1,707
41
1,626
817
435
319
56
41 Revolving
42
Commercial banks
43
Retailers
44
Gasoline companies
45
Savings institutions
46
Credit unions
22,401
17,721
1,488
-126
2,771
547
12,917
9,786
1,545
-1,030
2,008
608
747
658
31
35
16
6
-497
-486
-167
94
61
2
1,540
1,362
-2
117
45
19
163
204
-130
54
29
6
532
457
-38
-44
125
30
1,340
1,095
50
48
123
25
1,096
850
1
63
155
27
1,867
1,691
65
60
27
24
1,568
1,193
329
-12
35
23
47 Mobile home
48
Commercial banks
49
Finance companies
Savings institutions
50
778
-85
-405
1,268
222
-726
-363
1,311
-63
-48
-32
17
-175
-14
-222
62
12
-27
-7
45
-84
-83
-31
30
143
-6
22
127
175
17
32
126
-165
-108
-216
159
4
20
-43
27
-10
-76
30
36
51 Other
52
Commercial banks
Finance companies
53
54
Credit unions
55
Retailers
56
Savings institutions
17,738
6,187
6,131
616
172
4,632
4,842
2,754
604
1,736
177
-429
-262
-497
75
98
-4
65
768
488
13
37
-9
240
756
-87
341
323
1
177
-313
-499
-13
104
-18
114
1,318
-140
438
523
5
492
989
-442
490
427
28
486
1,043
-487
422
469
26
613
1,0%
270
294
403
26
104
555
-152
121
409
37
140
30
31
32
33
34
35
1. The Board's series cover most s h o r t - and intermediate-term credit extended to individuals that is scheduled to be repaid (or has the option of
repayment) in two or more installments.
2. More detail for finance companies is available in the G.20 statistical release,
3. Excludes 3 0 - d a y charge credit held by travel and entertainment companies,
4. All data have been revised.
Consumer Installment Credit
A41
1.56 TERMS OF CONSUMER INSTALLMENT CREDIT
Percent unless noted otherwise
1987
Item
1984
1985
1986
Apr.
May
June
July
Aug.
Sept.
Oct.
INTEREST RATES
1
2
3
4
6
Commercial banks 1
48-month new car 2
24-month personal
120-month mobile home 2
Credit card
Auto finance companies
New car
Used car
13.71
16.47
15.58
18.77
12.91
15.94
14.96
18.69
11.33
14.82
13.99
18.26
n.a.
n.a.
n.a.
n.a.
10.23
14.00
13.23
17.92
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
10.37
14.22
13.24
17.85
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
14.62
17.85
11.98
17.59
9.44
15.95
10.81
14.49
10.69
14.45
10.64
14.47
10.52
14.53
9.63
14.53
8.71
14.58
10.31
14.76
48.3
39.7
51.5
41.4
50.0
42.6
54.3
45.0
53.5
45.2
53.6
45.4
53.4
45.5
52.1
45.4
50.7
45.2
52.8
45.2
88
92
91
94
91
97
94
98
93
98
93
98
93
98
93
98
93
98
93
99
9,333
5,691
9,915
6,089
10,665
6,555
10,946
7,234
11,176
7,373
11,214
7,479
11,267
7,527
11,374
7,763
11,455
7,476
11,585
7,537
OTHER TERMS 3
7
8
9
10
11
12
Maturity (months)
New car
Used car
Loan-to-value ratio
New car
Used car
Amount financed (dollars)
New car
Used car
1. Data for midmonth of quarter only.
2. Before 1983 the maturity for new car loans was 36 months, and for mobile
home loans was 84 months.
3. At auto finance companies.
NOTE. These data also appear in the Board's G.19 (421) release. For address,
see inside front cover.
A42
DomesticNonfinancialStatistics • February 1988
1.57 FUNDS RAISED IN U.S. CREDIT MARKETS
Billions of dollars; half-yearly data are at seasonally adjusted annual rates.
1984
Transaction category, sector
1982
1983
1984
1985
1985
1987
1986
1986
HI
H2
HI
H2
HI
H2
HI
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors
388.9
550.2
753.9
854.8
833.4
717.3
790.4
722.7
986.8
676.9
989.9
568.3
By sector and instrument
2 U.S. eovernment
3 Treasury securities
4
Agency issues and mortgages
161.3
162.1
-.9
186.6
186.7
-.1
198.8
199.0
-.2
223.6
223.7
-.1
214.3
214.7
-.3
190.4
190.7
-.2
207.2
207.3
-.1
204.8
204.9
-.1
242.5
242.5
-.1
207.2
207.4
-.1
221.5
222.0
-.5
151.4
151.7
-.4
227.6
148.3
44.2
18.7
85.4
50.5
5.4
25.2
4.2
363.6
253.4
53.7
16.0
183.6
117.5
14.2
49.3
2.6
555.1
313.6
50.4
46.1
217.1
129.7
25.1
63.2
-.9
631.1
447.8
136.4
73.8
237.7
151.9
29.2
62.5
-6.0
619.0
445.0
35.4
121.7
298.0
199.4
33.0
73.9
-8.3
526.9
284.7
33.8
22.5
228.5
139.5
27.8
62.6
-1.4
583.3
342.5
67.0
69.8
205.7
119.9
22.4
63.8
-.4
518.0
350.4
67.0
62.2
221.2
139.2
25.0
59.5
-2.5
744.3
545.2
205.8
85.3
254.2
164.7
33.4
65.5
-9.5
469.6
363.4
-16.9
135.3
245.0
163.8
31.2
58.9
-8.9
768.4
546.7
87.7
108.1
350.9
234.9
34.8
88.9
-7.7
417.0
407.1
20.0
89.0
298.1
217.5
27.7
62.5
-9.6
5 Private domestic nonfinancial sectors
Debt capital instruments
6
Tax-exempt obligations
7
8
9
10
Home mortgages
11
Multifamily residential
Commercial
1?
Farm
13
14
15
16
17
18
Other debt instruments
Consumer credit
Bank loans n.e.c
Open market paper
Other
79.3
19.3
50.4
-6.1
15.8
110.2
56.6
23.2
-.8
31.3
241.5
90.4
67.1
21.7
62.2
183.3
94.6
38.6
14.6
35.5
164.0
65.8
66.5
-9.3
41.0
242.2
94.7
71.2
26.6
49.7
240.8
86.2
63.0
16.8
74.7
167.5
95.3
21.0
14.4
36.8
199.1
93.9
56.2
14.8
34.2
106.2
71.0
12.2
-13.1
36.2
221.8
60.6
120.8
-5.5
45.9
9.9
15.7
-40.2
4.5
29.9
19
70
71
7?
73
24
By borrowing sector
State and local governments
227.6
21.5
90.0
6.8
40.2
69.0
363.6
34.0
188.2
4.1
77.0
60.3
555.1
27.4
234.6
-.1
97.0
196.0
631.1
91.8
293.4
-13.9
93.1
166.7
619.0
46.4
279.9
-15.1
115.9
192.0
526.9
16.2
235.0
-.5
101.8
174.3
583.3
38.6
234.2
.4
92.2
217.8
518.0
56.3
259.8
-7.0
85.7
123.2
744.3
127.2
327.1
-20.8
100.5
210.3
469.6
3.1
232.8
-16.8
96.2
154.3
768.4
89.7
326.9
-13.3
135.5
229.7
417.0
28.6
224.0
-19.5
92.8
91.2
25 Foreign net borrowing in United States
76
77
Open market paper
78
U.S. government loans
29
16.0
6.6
-5.5
1.9
13.0
17.3
3.1
3.6
6.5
4.1
8.3
3.8
-6.6
6.2
5.0
1.2
3.8
-2.8
6.2
-6.0
9.0
2.6
-1.0
11.5
-4.0
36.1
1.3
-1.3
16.6
19.5
-19.4
6.3
-11.9
-4.3
-9.6
-5.8
5.5
-5.8
2.8
-8.2
8.2
2.1
.1
9.6
-3.7
21.5
6.2
1.5
19.1
-5.3
-3.5
-1.1
-3.5
3.9
-2.7
-12.6
-1.1
-3.5
-5.3
-2.8
30 Total domestic plus foreign
404.8
567.5
762.2
856.0
842.4
753.4
771.0
716.9
995.0
698.3
986.4
555.7
Nonfarm noncorporate
Corporate
Financial sectors
31 Total net borrowing by financial sectors...
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
By instrument
U.S. government Telated
Sponsored credit agency securities
Mortgage pool securities
Loans from U.S. government
Private financial sectors
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper
Loans from Federal Home Loan Banks
By sector
Sponsored credit agencies
Mortgage pools
Private financial sectors
Commercial banks
Bank affiliates
Savings and loan associations
Finance companies
REITs
CMO Issuers
90.3
99.3
151.9
199.0
291.1
153.0
150.7
175.1
222.8
238.8
343.4
317.5
64.9
14.9
49.5
.4
25.4
12.7
.1
1.9
9.9
.8
67.8
1.4
66.4
74.9
30.4
44.4
77.3
31.5
45.8
96.8
26.6
70.3
80.5
30.8
.4
.6
32.1
16.5
73.5
41.5
.4
.7
16.0
14.9
78.3
48.9
-.1
21.3
-7.0
77.0
36.2
.4
.7
24.1
15.7
174.3
13.2
161.4
-.4
116.8
68.7
.1
4.0
24.2
19.8
72.5
29.4
43.1
31.5
17.4
101.5
20.6
79.9
1.1
97.4
48.6
.1
2.6
32.0
14.2
2.3
14.6
12.5
106.3
14.6
89.5
2.2
116.5
48.3
.1
2.9
49.4
15.9
133.8
6.4
126.6
.8
105.0
70.9
.6
4.0
15.1
14.4
214.8
20.0
196.3
-1.5
128.6
66.5
-.5
4.0
33.4
25.2
180.2
7.8
171.8
.5
137.4
92.5
.2
-7.4
38.3
13.6
15.3
49.5
25.4
11.7
6.8
2.5
4.5
-.2
.2
1.4
66.4
31.5
5.0
12.1
-2.1
12.9
-.1
3.7
30.4
44.4
77.0
7.3
15.6
22.7
18.9
.1
12.4
21.7
79.9
97.4
-4.9
14.5
22.3
53.9
-.7
12.2
12.9
161.4
116.8
-3.6
4.6
29.3
50.2
-.3
36.7
29.4
43.1
80.5
19.8
20.4
22.0
8.2
.2
9.8
31.5
45.8
73.5
-5.3
10.8
23.3
29.6
.1
15.0
26.6
70.3
78.3
-4.7
10.2
14.2
49.7
-.6
9.5
16.8
89.5
116.5
-5.0
18.9
30.4
58.1
-.8
14.9
7.2
126.6
105.0
-2.7
-1.7
25.5
53.1
.6
30.2
18.5
196.3
128.6
-4.6
10.9
33.1
47.2
-1.3
43.3
8.3
171.8
137.4
4.4
21.6
30.7
27.2
-.2
53.7
1,217.8
937.1
1,329.8
873.2
346.6 340.2
205.8 - 1 6 . 9
135.7 212.4
254.2 245.6
93.9
71.0
17.7
59.2
21.0
73.7
48.6
46.1
437.8
87.7
173.5
350.4
60.6
121.3
31.7
66.9
331.0
20.0
180.5
298.3
15.7
-51.0
37.5
41.1
*
*
All sectors
51 Total net borrowing
495.1
666.8
914.1
52
53
54
55
56
57
58
59
225.9
44.2
38.0
85.4
19.3
46.7
5.7
30.0
254.4
53.7
36.5
183.6
56.6
26.7
26.9
28.4
273.8
50.4
86.1
217.4
90.4
61.1
52.0
82.9
U.S. government securities .
State and local obligations ..
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans
1,054.9 1,133.5
906.4
921.8
892.1
389.0
35.4
192.9
298.0
65.8
69.5
26.4
56.5
263.1
33.8
54.6
228.8
94.7
70.4
75.4
85.7
284.5
67.0
117.6
206.0
86.2
51.8
28.6
80.0
301.7
67.0
116.6
221.2
95.3
17.5
31.8
41.1
324.2
136.4
126.1
237.7
94.6
38.3
52.8
44.8
External corporate equity funds raised in United States
60 Total new share issues
25.8
61.8
-36.4
19.9
91.6
-47.9
-24.9
3.0
36.7
100.8
82.3
61.8
61
62
63
64
65
8.8
17.0
11.4
4.2
1.4
27.2
34.6
28.3
2.6
3.7
29.3
-65.7
-74.5
7.8
.9
85.7
-65.8
-81.5
12.0
3.7
163.3
-71.7
-80.8
8.3
.7
26.5
-74.4
-79.5
6.8
-1.6
32.2
-57.1
-69.4
8.8
3.5
64.2
-61.2
-75.5
11.2
3.1
107.1
-70.4
-87.5
12.8
4.3
155.5
-54.7
-68.7
7.5
6.6
171.1
-88.7
-92.7
9.1
-5.1
123.3
-61.5
-70.0
6.7
1.9
Mutual funds
All other
Nonfinancial corporations
Financial corporations
Foreign shares purchased in United States.
Flow of Funds
A43
1.58 DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS
Billions of dollars, except as noted; half-yearly data are at seasonally adjusted annual rates.
1984
Transaction category, or sector
1 Total funds advanced in credit markets to domestic
nonfinancial sectors
2
3
4
5
6
By public agencies and foreign
Total net advances
U.S. government securities
Residential mortgages
FHLB advances to savings and loans
Other loans and securities
1982
1983
1984
1985
1985
1986
1987
1986
HI
H2
HI
H2
HI
H2
HI
388.9
550.2
753.9
854.8
833.4
717.3
790.4
722.7
986.8
676.9
989.9
568.3
114.9
22.3
61.0
.8
30.8
114.0
26.3
76.1
-7.0
18.6
157.6
39.3
56.5
15.7
46.2
202.3
47.1
94.6
14.2
46.3
317.3
84.8
158.5
19.8
54.2
132.7
27.6
55.5
16.5
33.2
182.5
51.0
57.4
14.9
59.2
195.8
50.3
88.6
12.5
44.4
208.7
43.9
100.7
15.9
48.2
264.1
74.0
123.8
14.4
52.0
370.6
95.6
193.2
25.2
56.5
241.3
46.3
164.9
13.6
16.5
7
8
9
10
Total advanced, by sector
U.S. government
Sponsored credit agencies
Monetary authorities
Foreign
15.9
65.5
9.8
23.7
9.7
69.8
10.9
23.7
17.1
74.3
8.4
57.9
16.8
101.5
21.6
62.3
9.5
175.5
30.2
102.1
7.5
73.3
12.0
39.8
26.6
75.2
4.8
75.9
25.1
96.4
27.5
46.8
8.4
106.7
15.8
77.8
10.8
128.2
13.2
111.9
8.2
222.8
47.2
92.3
-4.1
167.7
10.8
66.9
11
12
Agency and foreign borrowing not in line 1
Sponsored credit agencies and mortgage pools
Foreign
64.9
16.0
67.8
17.3
74.9
8.3
101.5
1.2
174.3
9.0
72.5
36.1
77.3
-19.4
96.8
-5.8
106.3
8.2
133.8
21.5
214.8
-3.5
180.2
-12.6
Private domestic funds advanced
13 Total net advances
14 U.S. government securities
15
State and local obligations
16 Corporate and foreign bonds
17 Residential mortgages
18 Other mortgages and loans
19 LESS: Federal Home Loan Bank advances
354.8
203.6
44.2
14.7
-5.3
98.3
.8
521.3
228.1
53.7
14.5
55.0
162.4
-7.0
679.5
234.5
50.4
35.1
98.2
276.9
15.7
755.2
277.0
136.4
40.8
86.4
228.8
14.2
699.3
304.2
35.4
84.3
73.8
221.4
19.8
693.2
235.5
33.8
17.3
111.7
311.5
16.5
665.7
233.5
67.0
53.0
84.8
242.3
14.9
618.0
251.3
67.0
39.7
75.5
197.0
12.5
892.5
302.7
205.8
42.0
97.4
260.6
15.9
568.0
266.3
-16.9
100.8
71.3
161.0
14.4
830.6
342.2
87.7
67.8
76.4
281.8
25.2
494.6
284.7
20.0
61.6
80.3
61.6
13.6
Private financial intermediation
20 Credit market funds advanced by private financial
institutions
Commercial banking
21
22
Savings institutions
23
Insurance and pension funds
24
Other finance
274.2
110.2
22.9
96.6
44.5
395.8
144.3
135.6
100.1
15.8
559.8
168.9
150.2
121.8
118.9
579.5
186.3
83.0
156.0
154.2
726.1
194.7
105.8
175.9
249.6
587.5
192.2
167.0
148.3
80.0
532.1
145.5
133.5
95.3
157.8
483.8
143.3
54.5
139.4
146.5
675.2
229.4
111.4
172.5
161.9
638.9
117.2
94.5
170.6
256.7
813.2
272.3
117.2
181.2
242.4
485.1
49.9
85.7
213.3
136.2
25 Sources of funds
26
Private domestic deposits and RPs
27
Credit market borrowing
274.2
196.2
25.4
395.8
215.4
31.5
559.8
316.9
77.0
579.5
213.2
97.4
726.1
272.8
116.8
587.5
280.2
80.5
532.1
353.5
73.5
483.8
191.4
78.3
675.2
235.0
116.5
638.9
252.2
105.0
813.2
293.4
128.6
485.1
15.1
137.4
28
29
30
31
32
52.6
-31.4
6.1
106.0
-28.1
148.9
16.3
-5.3
109.7
28.2
165.9
5.4
4.0
118.6
37.9
268.9
17.7
10.3
141.0
99.9
336.4
12.4
1.7
152.5
169.8
226.8
10.9
-2.8
162.5
56.1
105.1
-.1
10.8
74.6
19.7
214.1
21.3
13.9
118.6
60.3
323.6
14.2
6.6
163.4
139.4
281.7
12.3
-4.2
138.6
134.9
391.1
12.5
7.6
166.4
204.6
332.6
41.8
-4.4
234.4
60.8
106.0
68.5
25.0
-5.7
18.2
157.0
99.3
40.3
-11.6
12.0
17.0
196.7
123.6
30.4
5.2
9.3
28.1
273.2
145.3
47.6
11.8
43.9
24.6
90.1
43.4
-.8
34.4
-4.8
17.9
186.2
162.8
10.4
-26.4
15.6
23.8
207.1
84.3
50.4
36.9
3.0
32.5
212.5
156.2
14.8
15.4
3.5
22.6
333.9
134.5
80.4
8.2
84.2
26.6
34.1
37.4
-68.7
68.1
-16.3
13.6
146.1
49.4
67.2
.8
6.7
22.1
146.9
69.9
21.7
39.0
7.7
8.5
39 Deposits and currency
40
Currency
41
Checkable deposits
42
Small time and savings accounts
43
Money market fund shares
44
Large time deposits
45
Security RPs
46
Deposits in foreign countries
205.5
9.7
18.0
136.0
33.5
-2.4
11.1
-.4
232.8
14.3
28.6
215.7
-39.0
-8.4
18.5
3.1
320.4
8.6
27.9
150.1
49.0
84.9
5.0
-5.1
223.5
12.4
41.4
139.1
8.9
7.2
16.6
-2.1
293.2
14.4
97.7
122.5
43.8
-9.3
18.3
5.9
286.8
13.7
26.0
129.0
24.5
92.0
8.7
-7.1
354.0
3.6
29.8
171.2
73.4
77.9
1.2
-3.1
198.3
15.9
14.6
161.5
10.6
-7.6
12.2
-9.0
248.7
8.8
68.2
116.7
7.1
21.9
21.1
4.9
262.0
10.7
79.9
115.4
46.9
10.0
-.9
324.4
18.2
115.5
129.5
40.6
-18.7
26.5
12.8
10.2
10.0
-28.5
33.9
-4.6
1.5
12.7
-14.9
47 Total of credit market instruments, deposits and
currency
311.5
389.9
517.1
496.7
383.3
473.0
561.1
410.7
582.6
296.0
470.5
157.1
48
49
50
Public holdings as percent of total
Private financial intermediation (in percent)
Total foreign funds
28.4
77.3
-7.7
20.1
75.9
40.0
20.7
82.4
63.3
23.6
76.7
80.1
37.7
103.8
114.5
17.6
84.7
50.7
23.7
79.9
75.8
27.3
78.3
68.1
21.0
75.6
92.0
37.8
112.5
124.2
37.6
97.9
104.9
43.4
98.1
108.7
MEMO: Corporate equities not included above
51 Total net issues
52, Mutual fund shares
53
Other equities
54 Acquisitions by financial institutions
55 Other net purchases
25.8
8.8
17.0
25.9
-.1
61.8
27.2
34.6
51.1
10.7
-36.4
29.3
-65.7
19.7
-56.1
19.9
85.7
-65.8
42.8
-22.9
91.6
163.5
-71.7
48.2
43.4
-47.9
26.5
-74.4
-.2
-47.7
-24.9
32.2
-57.1
39.7
-64.6
3.0
64.2
-61.2
58.8
-55.8
36.7
107.1
-70.4
26.8
10.0
100.8
155.5
-54.7
56.6
44.2
82.3
171.1
-88.7
39.7
42.6
61.8
123.3
-61.5
65.5
-3.6
Other sources
Foreign funds
Treasury balances
Insurance and pension reserves
Other, net
Private domestic nonfinancial investors
33 Direct lending in credit markets
34
U.S. government securities
35
State and local obligations
36
Corporate and foreign bonds
37
Open market paper
38
Other
*
NOTES BY LINE NUMBER
1. Line 1 of table 1.57.
2. Sum of lines 3 - 6 or 7-10.
6. Includes farm and commercial mortgages.
11. Credit market funds raised by federally sponsored credit agencies, and net
issues of federally related mortgage pool securities.
13. Line 1 less line 2 plus line 11 and 12. Also line 20 less line 27 plus line 33.
Also sum of lines 28 and 47 less lines 40 and 46.
18. Includes farm and commercial mortgages.
26. Line 39 less lines 40 and 46.
27. Excludes equity issues and investment company shares. Includes line 19.
29. Foreign deposits at commercial banks, bank borrowings from foreign
branches, and liabilities of foreign banking agencies to foreign affiliates, less
claims on forfeign affiliates and dedposits by banking in foreign banks.
30. Demand deposits and note balances at commercial banks.
*
31. Excludes net investment of these reserves in corporate equities.
32. Mainly retained earnings and net miscellaneous liabilities.
33. Line 13 less line 20 plus line 27.
34-38. Lines 14-18 less amounts acquired by private finance plus amounts
borrowed by private finance. Line 38 includes mortgages.
40. Mainly an offset to line 9.
47. Lines 33 plus 39, or line 13 less line 28 plus 40 and 46.
48. Line 2/Iine 1.
49. Line 20/line 13.
50. Sum of lines 10 and 29.
51. 53. Includes issues by financial institutions.
NOTE. Full statements for sectors and transaction types inflows and in 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.
A44
Domestic Nonfinancial Statistics • February 1988
2.10 NONFINANCIAL BUSINESS ACTIVITY
Selected Measures1
1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted.
1987
Measure
1984
1985
1986
Mar.
Apr.
May
June
July
Aug/
Sept/
Oct/
Nov.
1 Industrial production
121.4
123.8
125.1
127.4
127.4
128.2
129.1
130.6
131.2
130.9
132.0
132.5
Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
126.7
127.3
118.0
139.6
124.7
114.2
130.8
131.1
120.2
145.4
130.0
114.2
133.2
132.3
124.5
142.7
136.4
113.9
136.4
135.1
126.7
146.2
140.9
115.2
135.8
134.5
125.5
146.4
140.3
115.9
136.9
135.5
127.3
146.3
141.8
116.3
137.8
136.2
127.2
148.1
143.3
117.2
139.5
137.9
128.9
149.7
145.0
118.5
139.9
138.4
129.4
150.2
145.3
119.4
139.2
137.7
127.6
151.0
144.7
119.5
140.8
139.4
129.3
152.8
145.3
120.1
141.2
139.7
129.4
153.4
146.1
120.6
123.4
126.4
129.1
132.4
132.4
133.2
134.0
135.6
135.9
135.7
137.0
137.5
80.5
82.0
80.1
80.2
79.8
78.5
80.3
78.7
80.2
79.1
80.4
79.3
80.8
79.8
81.5
80.6
81.5
81.1
81.3
81.0
81.8
81.3
82.0
81.6
2
3
4
5
6
7
Industry
groupings
8 Manufacturing
Capacity utilization (percent) 2
9
Manufacturing
10
Industrial materials industries
11 Construction contracts (1982 = 100)
3
135.0
148.0
155.0
165.0
162.0
149.0
161.0
163.0
171.0
157.0
166.0
153.0
12
13
14
15
16
17
18
19
20
21
Nonagricultural employment, total
Goods-producing, total
Manufacturing, total
Manufacturing, production-worker
Service-producing
Personal income, total
Wages and salary disbursements
Manufacturing
Disposable personal income
Retail sales
114.6
101.6
98.4
94.1
120.0
193.4
185.0
164.6
193.5
179.0
118.3
102.4
97.8
92.6'
125.0
207.0
198.7
172.8
206.0
190.6
120.8
102.4
96.5
91.2
128.9
219.9
210.2
176.4
219.1
199.9
122.9
101.7
96.5
91.4
131.8
229.1
218.6
179.2
228.1
206.8
123.2
101.7
96.6
91.5
132.2
230.3
219.5
178.9
222.5
207.4
123.3
101.7
96.6
91.6
132.4
230.7
220.7
179.9
229.6
207.3
123.5
101.7
96.6
91.6
132.6
231.1
221.2
180.0
228.9
209.6
123.8
102.1
97.0
92.1
132.9
232.6
222.3
180.1
230.4 R
210.9
124.0
102.2
97.2
92.2
133.1
233.9
224.2
182.0
231.6
214.0
124.2
102.4
97.4
92.5
133.4
235.3
225.4
183.7
232.9
210.5
124.9
102.9
97.8
92.9
134.1
239.5
227.1
184.6
237.5
208.5
125.2
103.3
98.1
93.3
134.4
238.5
228.7
185.6
235.9
208.9
22
23
Prices 7
Consumer (1967 = 100)
Producer finished goods (1967 = 100) . . .
311.1
291.1
322.2
293.7
328.4
289.7
335.9
292.6
337.7
294.9
338.7
295.8
340.1
296.2
340.8
297.4 R
342.7
297.2
344.4
296.7
345.3
298.2
345.8
298.1
4
1. A major revision of the industrial production index and the capacity
utilization rates was released in July 1985. See " A Revision of the Index of
Industrial Production" and accompanying tables that contain revised indexes
( 1 9 7 7 = 1 0 0 ) t h r o u g h D e c e m b e r 1984 in t h e FEDERAL RESERVE BULLETIN, v o l . 71
(July 1985), pp. 487-501. The revised indexes for January through June 1985 were
shown in the September BULLETIN.
2. Ratios of indexes of production to indexes of capacity. Based on data from
Federal Reserve, McGraw-Hill Economics Department, Department of Commerce, and other sources.
3. Index of dollar value of total construction contracts, including residential,
nonresidential and heavy engineering, from McGraw-Hill Information Systems
Company, F. W. Dodge Division.
4. Based on data in Employment and Earnings (U.S. Department of Labor).
Series covers employees only, excluding personnel in the Armed Forces.
5. Based on data in Survey of Current Business (U.S. Department of Commerce).
6. Based on Bureau of Census data published in Survey of Current
Business.
7. Data without seasonal adjustment, as published in Monthly Labor Review.
Seasonally adjusted data for changes in the price indexes may be obtained from
the Bureau of Labor Statistics, U.S. Department of Labor.
NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5,and 6,
and indexes for series mentioned in notes 3 and 7 may also be found in the Survey
of Current Business.
Figures for industrial production for the last two months are preliminary and
estimated, respectively.
Selected Measures
A45
2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT
Thousands of persons; monthly data are seasonally adjusted. Exceptions noted.
1987
Category
1984
1985
1986
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
HOUSEHOLD SURVEY DATA
1 Noninstitutional population 1
178,602
180,440
182,822
184,597
184,777
184,941
185,127
185,264
185,428
185,575
185,737
2 Labor force (including Armed Forces) 1
3 Civilian labor force
115,763
113,544
117,695
115,461
120,078
117,834
121,588
119,335
122,237
119,993
121,755
119,517
122,194
119,952
122,564
120,302
122,128
119,861
122,625
120,361
122,883
120,616
Nonagricultural industries 2
Agriculture
Unemployment
6
Number
7
Rate (percent of civilian labor force)
8 Not in labor force
101,685
3,321
103,971
3,179
106,434
3,163
108,545
3,290
109,112
3,335
109,079
3,178
109,508
3,219
109,989
3,092
109,602
3,170
109,903
3,283
110,333
3,167
8,539
7.5
62,839
8,312
7.2
62,745
8,237
7.0
62,744
7,500
6.3
63,009
7,546
6.3
62,540
7,260
6.1
63,186
7,224
6.0
62,933
7,221
6.0
62,700
7,089
5.9
63,300
7,174
6.0
62,950
7,116
5.9
62,854
94,496
97,519
99,610
101,598
101,708
101,818
102,126
102,275
102,434'
102,970'
103,244
19,378
966
4,383
5,159
22,100
5,689
20,797
16,023
19,260
927
4,673
5,238
23,073
5,955
22,000
16,394
18,994
783
4,904
5,244
23,580
6,297
23,099
16,710
19,011
729
5,019
5,348
23,969
6,558
23,926
17,038
19,018
735
4,999
5,344
23,980
6,576
24,025
17,031
19,015
738
5,008
5,350
24,007
6,586
24,083
17,031
19,104
744
5,002
5,363
24,071
6,608
24,214
17,020
19,129
751
5,006
5,377
24,063
6,624
24,279
17,046
19,169''
759'
4,989'
5,416r
24,129'
6,629'
24,295'
17,048
19,245'
764'
5,044'
5,428'
24,230'
6,644'
24,411'
17,204'
19,314
760
5,078
5,455
24,233
6,659
24,499
17,246
4
5
ESTABLISHMENT SURVEY DATA
9 Nonagricultural payroll employment 3
10
11
12
13
14
15
16
17
Manufacturing
Mining
Contract construction
Transportation and public utilities
Finance
Service
Government
A46
2.12
Domestic Nonfinancial Statistics • February 1988
OUTPUT, CAPACITY, AND CAPACITY UTILIZATION
Seasonally adjusted
1986
1987
1987
1986
1986
1987
Series
Q4
Q1
Q2
Q3 R
Output (1977 = 100)
Q4
QL
Q2
Q3
Q4
Capacity (percent of 1977 output)
QL
Q2
Q3 R
Utilization rate (percent)
1
Total industry
125.9
126.9
128.2
130.9
158.7
159.5
160.4
161.3
79.4
79.5
79.9
81.2
2
3
Mining
Utilities
96.9
109.1
98.8
108.1
99.0
108.3
100.6
111.6
130.8
137.3
130.4
137.7
129.7
138.3
129.0
138.8
74.1
79.4
75.8
78.5
76.3
78.3
78.0
80.4
4
Manufacturing
130.4
131.6
133.2
135.7
163.4
164.5
165.6
166.7
79.8
80.0
80.5
81.4
5
6
Primary processing
Advanced processing
113.4
140.6
114.3
142.0
116.1
143.5
119.2
145.8
137.5
179.1
138.2
180.3
139.0
181.6
139.8
182.9
82.5
78.5
82.7
78.7
83.5
79.0
85.2
79.9
Materials
114.3
115.0
116.5
119.1
145.8
146.1
146.7
147.2
78.5
78.7
79.4
80.9
8
9
10
11
12
13
Durable goods
Metal materials
Nondurable goods
Textile, paper, and chemical ..
Paper
Chemical
120.7
75.4
120.3
120.9
137.0
120.3
121.4
74.7
121.2
122.3
136.4
122.9
122.9
77.0
124.0
125.1
137.7
125.3
125.5
83.6
128.2
130.5
144.5
130.7
162.2
113.4
140.4
139.6
139.7
145.0
162.3
110.6
142.9
142.4
142.8
148.8
163.1
110.0
143.8
143.4
143.9
149.8
163.9
109.4
144.7
144.4
145. V
150.9 R
74.7
67.7
84.7
85.4
96.7
81.4
74.8
67.5
84.8
85.9
95.5
82.6
75.4
70.0
86.2
87.2
95.7
83.6
76.6
76.4
88.6
90.4
99.6
86.3
14
Energy materials
97.8
98.3
98.7
100.0
121.6
120.3
120.2
120.1
81.2
81.7
82.1
83.3
Aug/
Sept/
Oct/
Nov.
7
Previous cycle
High
1
Low
Latest cycle
High
2
Low
1986
Nov.
1987
Mar.
Apr.
May
June
July
Capacity utilization rate (percent)
15
Total industry
88.6
72.1
86.9
69.5
79.2
79.7
79.6
79.9
80.3
81.1
81.4
81.0
81.5
81.7
16
17
Mining
Utilities
92.8
95.6
87.8
82.9
95.2
88.5
76.9
78.0
74.5
79.8
75.5
78.2
75.9
76.8
76.5
79.2
76.6
79.0
76.8
80.2
78.2
81.3
79.0
79.8
79.2
81.6
79.2
82.0
18
Manufacturing
87.7
69.9
86.5
68.0
79.6
80.3
80.2
80.4
80.8
81.5
81.5
81.3
81.8
82.0
19
20
Primary processing....
Advanced processing..
91.9
86.0
68.3
71.1
89.1
85.1
65.1
69.5
82.5
78.3
83.1
79.1
83.5
78.7
83.2
79.2
84.0
79.2
85.4
79.8
85.3
79.9
85.1
79.5
85.6
80.1
85.9
80.2
21
Materials
92.0
70.5
89.1
68.5
78.5
78.7
79.1
79.3
79.8
80.6
81.1
81.0
81.3
81.6
22
23
Durable goods
Metal materials ,,
91.8
99.2
64.4
67.1
89.8
93.6
60.9
45.7
74.6
68.6
75.2
68.7
75.0
68.8
75.1
69.7
75.9
71.5
76.5
73.9
76.6
77.5
76.7
77.9
77.5
81.1
77.7
80.7
24
Nondurable goods
91.1
66.7
88.1
70.7
83.9
84.8
86.5
86.2
86.1
88.4
88.6
88.7
87.9
88.1
92.8
98.4
92.5
64.8
70.6
64.4
89.4
97.3
87.9
68.8
79.9
63.5
84.4
96.5
79.9
85.8
94.6
82.2
87.5
95.1
83.9
87.1
95.7
83.9
87.1
96.3
83.1
90.0
100.5
85.1
90.5
99.9
86.4
90.7
98.4
87.4
89.9
97.3
87.1
90.2
94.6
86.9
94.0
82.3
82.1
80.8
81.3
82.1
82.8
82.4
84.0
83.5
83.7
84.4
25
Textile, paper, and
chemical
76
77
28
Energy materials
1. Monthly high 1973; monthly low 1975.
2. Monthly highs 1978 through 1980; monthly lows 1982.
NOTE. These data also appear in the Board's G.3 (402) release. For address, see
inside front cover.
Selected Measures
2.13 INDUSTRIAL PRODUCTION
A47
Indexes and Gross Value 4
Monthly data are seasonally adjusted
Groups
1977
proportion
1987
1986
1986
AVG.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug/
Sept.
Oct."
Nov/
Index (1977 = 100)
MAJOR MARKET
Total index
100.00
125.0
126.0
126.7
126.5
127.2
127.3
127.4
128.4
129.1
130.6
131.2
130.9
132.0
132.5
57.72
44.77
25.52
19.25
12.94
42.28
133.2
132.3
124.5
142.7
136.4
113.9
134.5
133.1
125.6
143.1
139.2
114.3
135.0
133.7
127.2
142.2
139.7
115.2
134.9
133.6
126.8
142.8
139.1
115.2
136.1
135.0
127.5
144.9
139.7
115.1
136.2
135.0
127.5
145.0
140.4
115.2
137.2
134.5
126.6
144.9
139.9
116.2
137.2
135.8
128.2
145.8
142.1
116.3
137.8
136.2
127.2
148.1
143.3
117.2
139.5
137.9
128.9
149.7
145.0
118.5
139.9
138.4
129.4
150.2
145.3
119.4
139.2
137.7
127.6
151.0
144.7
119.5
140.8
139.4
129.3
152.8
145.3
120.1
141.2
139.7
129.4
153.4
146.1
120.6
6.89
2.98
1.79
1.16
.63
1.19
3.91
1.24
1.19
.96
1.71
116.2
115.1
112.9
97.3
141.8
118.4
117.1
139.5
141.6
125.8
96.0
118.4
114.6
107.6
92.3
136.0
125.2
121.2
148.1
150.0
131.1
96.3
121.5
117.7
115.6
99.5
145.6
120.8
124.4
153.2
155.1
132.0
99.4
120.0
117.6
117.9
94.3
161.9
117.1
121.9
146.9
148.9
129.1
99.8
122.4
123.5
125.2
105.3
162.1
121.0
121.6
145.2
146.7
130.8
99.3
121.2
121.2
121.6
100.9
159.9
120.5
121.2
142.9
143.8
131.3
99.8
118.1
115.7
111.5
91.8
148.1
121.9
119.9
137.7
139.2
133.5
99.4
120.2
118.0
113.1
91.0
154.2
125.3
121.8
142.2
142.3
133.3
100.7
117.4
114.9
107.9
87.4
146.0
125.4
119.3
133.4
133.4
132.3
101.8
120.4
117.5
112.3
86.4
160.4
125.3
122.5
141.7
142.6
134.1
102.2
121.2
118.0
112.4
76.8
178.4
126.6
123.6
147.1
145.5
132.0
102.0
118.3
113.8
107.2
79.1
159.4
123.8
121.8
141.8
140.6
131.6
101.8
123.5
123.8
122.2
94.7
123.1
122.1
118.7
91.9
126.2
123.3
144.8
145.1
133.3
102.2
127.1
123.8
145.7
19 Nondurable consumer goods
Consumer staples
70
Consumer foods and tobacco
71
Nonfood staples
77
Consumer chemical products
71
Consumer paper products
74
75
Consumer energy
Consumer fuel
76
Residential utilities
27
18.63
15.29
7.80
7.49
2.75
1.88
2.86
1.44
1.42
127.5
97.0
134.1
131.9
136.5
161.2
147.4
105.7
92.8
128.3
135.0
132.6
137.4
161.0
151.5
105.5
91.7
119.6
129.4
136.0
133.9
138.2
163.1
150.1
106.4
92.2
120.8
129.2
135.9
132.9
139.0
165.9
149.4
106.3
95.0
117.8
129.4
135.9
134.0
137.9
164.7
147.8
105.7
92.5
119.2
129.8
136.5
134.8
138.2
165.7
147.5
105.8
94.1
117.7
129.8
136.4
134.4
138.5
164.7
148.9
106.5
94.5
118.7
131.1
137.7
135.6
139.9
165.9
152.9
106.4
92.1
121.0
130.9
137.6
136.0
139.2
164.4
153.1
105.9
91.9
120.2
132.1
138.9
137.2
140.6
165.7
153.8
108.0
92.7
123.6
132.5
139.2
137.4
141.2
167.4
153.9
107.7
91.4
124.3
131.0
137.7
137.1
138.4
163.6
153.0
104.6
91.6
117.7
131.5
138.2
137.2
139.3
162.2
153.4
108.0
92.1
131.8
138.7
Equipment
78 Business and defense equipment
79
Business equipment
Construction, mining, and farm
30
31
Manufacturing
37
Power
33
Commercial
Transit
34
35 Defense and space equipment
18.01 147.1
14.34 138.6
2.08 59.8
3.27 112.0
1.27 81.6
5.22 214.6
2.49 109.2
3.67 180.3
148.1
138.6
56.6
109.6
79.5
217.3
110.7
184.9
147.0
137.1
58.2
108.8
80.2
213.7
108.9
185.8
147.7
138.1
57.2
110.1
79.6
215.9
109.5
185.2
150.1
140.8
56.8
111.5
81.2
218.4
117.4
186.5
150.1
140.8
58.1
110.9
81.7
219.7
114.0
186.6
150.0
140.8
58.6
111.1
82.4
220.9
110.4
186.1
150.8
141.7
61.2
111.5
84.0
222.0
110.1
186.5
153.2
144.2
63.0
117.2
84.0
226.7
105.4
188.6
154.4
145.6
65.0
120.4
81.8
227.9
106.1
188.7
154.5
145.6
66.4
120.9
82.8
227.7
104.7
189.1
155.0
146.3
65.8
122.0
80.9
229.3
105.0
189.1
156.9
148.6
66.7
123.0
81.6
230.9
112.4
189.6
157.7
149.5
66.9
123.9
81.8
233.3
111.2
189.7
1
7 Products
3
Final products
Consumer goods
4
5
Equipment
6
Intermediate products
7 Materials
Consumer goods
8 Durable consumer goods
9
Automotive products
10
Autos and trucks
Autos, consumer
11
Trucks, consumer
1?
Auto parts and allied goods
N
14 Home goods
Appliances, A/C and TV
IS
Appliances and TV
16
Carpeting and furniture
17
Miscellaneous home goods
18
Intermediate products
36 Construction supplies
37 Business supplies
38
General business supplies
Commercial energy products
39
Materials
40 Durable goods materials
Durable consumer parts
41
Equipment parts
47
43
Durable materials n.e.c
Basic metal materials
44
139.8
5.95
6.99
5.67
1.31
124.7
146.4
150.6
128.3
126.8
149.7
153.7
132.4
127.9
149.8
154.3
130.3
128.3
148.3
153.3
126.8
128.4
149.4
154.1
128.8
128.5
150.5
155.2
130.3
127.3
150.5
155.5
129.0
128.3
153.8
158.2
135.0
131.5
153.4
158.5
131.1
133.1
155.2
160.5
132.3
132.5
156.3
161.0
135.8
132.4
155.2
160.5
132.1
132.6
156.2
161.7
132.3
133.2
20.50
4.92
5.94
9.64
4.64
119.7
98.5
153.9
109.4
80.0
120.4
98.0
154.5
110.7
82.1
120.7
98.8
154.2
111.2
80.3
120.5
99.0
154.0
110.8
79.2
121.5
100.0
155.6
111.5
80.3
121.8
98.9
155.8
112.6
80.8
122.2
96.2
157.1
114.1
81.8
121.6
95.2
156.0
113.9
81.9
124.0
99.2
158.3
115.5
83.6
125.2
98.5
159.3
117.7
86.6
125.5
99.6
159.5
117.9
90.4
125.9
98.8
160.2
118.6
90.9
127.5
99.5
162.1
120.5
93.8
128.0
99.0
163.2
121.0
94.0
45 Nondurable goods materials
46
Textile, paper, and chemical
materials
Textile materials
47
Pulp and paper materials
48
49
Chemical materials
Miscellaneous nondurable materials . . .
50
10.09
118.3
120.2
123.2
123.2
122.5
122.8
125.4
125.3
124.1
127.6
128.3
128.7
127.7
128.3
7.53
1.52
1.55
4.46
2.57
118.9
110.6
132.1
117.1
116.5
121.0
115.6
134.2
118.5
117.6
124.7
116.1
140.2
122.3
118.5
125.0
116.5
137.9
123.4
118.0
123.6
115.8
136.7
121.8
119.0
124.0
118.5
134.7
122.1
119.2
126.9
125.0
137.4
125.0
121.1
126.5
129.6
117.8
145.4
128.1
122.0
130.6
116.7
145.0
130.4
121.4
131.3
116.5
143.2
132.2
121.0
130.4
113.9
141.9
132.1
131.1
137.4
125.0
122.0
125.1
111.9
139.0
124.9
120.9
51 Energy materials
57
Primary energy
Converted fuel materials
53
11.69
7.57
4.12
99.9
105.5
89.6
98.7
104.8
87.6
98.8
105.1
87.3
98.9
104.1
89.4
97.6
102.6
88.5
97.0
101.5
88.9
97.5
102.3
88.7
99.3
103.6
91.4
99.4
104.0
91.0
99.0
102.5
92.5
100.9
104.6
94.1
100.2
104.6
92.2
100.4
104.0
93.8
101.2
A48
Domestic Nonfinancial Statistics • February 1988
2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value—Continued
1986
Groups
SIC
code
1987
1986
avg.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug/
Sept.
Oct."
Nov/
Index (1977 = 100)
MAJOR INDUSTRY
1 Mining and utilities
2
Mining
3
Utilities
4 Manufacturing
5
Nondurable
6
Durable
15.79
9.83
5.96
84.21
35.11
49.10
103.4
99.6
109.6
129.1
130.9
127.9
102.0
97.5
109.6
130.1
131.7
129.0
101.6
97.1
109.0
131.3
133.4
129.7
102.6
99.4
108.0
130.7
132.7
129.3
102.4
98.8
108.5
131.6
132.9
130.8
101.9
98.3
107.9
132.4
133.7
131.5
101.4
98.6
106.0
132.4
134.6
130.9
103.1
99.2
109.6
133.2
135.7
131.4
103.0
99.2
109.4
134.0
136.9
132.0
103.7
99.2
111.2
135.6
138.5
133.5
105.4
100.9
112.9
135.9
138.8
133.8
105.2
101.7
110.9
135.7
138.7
133.6
106.3
101.9
113.6
137.0
138.3
136.1
106.4
101.6
114.3
137.5
138.8
136.6
10
11.12
13
14
.50
1.60
7.07
.66
124.2
94.7
113.9
71.1
129.8
89.6
123.2
76.2
125.4
89.8
122.5
74.1
136.4
91.2
116.1
73.6
131.7
90.9
122.1
71.2
122.3
92.4
123.8
65.7
121.9
93.1
125.4
71.7
127.2
92.1
127.6
70.7
128.8
91.8
128.5
71.4
127.9
91.8
130.7
79.3
130.5
93.0
130.3
81.4
133.3
93.3
130.7
133.5
93.4
131.1
134.7
92.9
I
8
9
10
Mining
Metal
Coal
Oil and gas extraction
Stone and earth minerals
II
12
13
14
15
Nondurable
manufactures
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
20
21
22
23
26
7.96
.62
2.29
2.79
3.15
133.6
96.6
113.2
103.6
136.4
135.3
96.4
112.2
103.8
139.6
136.7
93.4
113.4
104.9
141.1
134.6
89.9
109.2
106.1
139.7
136.4
99.9
110.8
106.5
139.9
137.3
101.1
112.6
105.4
139.9
136.0
99.6
116.6
105.3
140.5
137.4
106.6
115.7
106.4
141.3
137.7
107.0
117.2
107.7
142.6
138.5
138.8
110.4
119.8
108.4
148.9
139.7
105.7
118.5
106.8
146.8
138.4
118.3
109.7
148.8
16
17
18
19
20
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastic products
Leather and products
27
28
29
30
31
4.54
8.05
2.40
2.80
.53
163.4
133.0
92.1
153.3
61.3
164.8
132.3
92.5
155.2
61.0
166.4
135.7
93.5
157.1
60.2
166.3
136.4
95.6
155.3
58.9
164.4
135.7
91.6
156.2
59.8
167.6
135.3
92.1
158.6
59.4
169.2
137.3
94.0
160.5
60.2
171.4
138.1
92.6
162.2
61.4
174.1
139.3
92.3
165.4
60.8
174.0
140.8
94.1
167.2
59.2
174.7
142.3
92.9
164.8
61.3
175.4
142.4
93.5
165.2
60.8
176.6
141.7
93.8
165.4
61.5
24
25
32
2.30
1.27
2.72
123.4
146.7
120.2
130.3
145.6
118.7
133.5
148.8
119.4
128.5
143.5
121.9
129.6
145.0
118.8
128.9
149.9
119.8
127.8
148.2
120.6
130.3
150.5
117.2
131.1
153.9
117.9
132.8
156.2
118.8
131.1
155.2
116.5
128.3
155.9
117.6
127.9
156.7
118.6
33
331.2
34
35
36
5.33
3.49
6.46
9.54
7.15
75.8
63.4
107.4
141.9
166.5
75.5
63.5
108.3
144.5
167.9
73.4
61.3
109.6
144.8
170.4
72.8
59.5
108.4
143.4
170.4
75.1
62.3
108.3
145.5
171.0
77.0
65.4
110.5
148.5
168.5
76.1
65.0
109.9
150.4
168.4
77.0
65.7
108.5
149.7
171.1
111.1 111.1
78.8
68.3
81.4
70.9
151.8
170.5
155.3
172.5
85.1
76.0
110.1
154.3
174.3
84.6
74.6
111.2
157.0
172.8
88.8
79.7
112.8
158.7
174.0
113.7
160.5
174.9
37
371
9.13
5.25
125.8
110.9
126.9
109.1
126.8
109.7
129.0
112.0
132.7
117.7
132.2
116.5
127.8
109.8
129.4
112.0
126.5
107.4
127.6
109.4
128.1
109.1
125.6
105.6
131.8
116.1
130.4
114.2
372-6.9
38
39
3.87
2.66
1.46
146.1
141.3
99.3
151.1
139.3
100.9
150.1
140.2
103.8
151.9
139.5
101.6
153.0
142.0
101.6
153.4
140.3
103.9
152.3
142.8
101.4
153.1
142.1
101.9
152.4
144.5
101.2
152.3
143.8
100.5
153.9
146.3
102.2
152.5
144.4
102.1
153.0
145.5
101.0
152.3
145.9
4.17
122.2
124.4
122.6
121.6
122.3
123.6
122.3
128.8
128.8
131.0
132.0
127.5
130.5
Durable
manufactures
21 Lumber and products
22 Furniture and fixtures
23 Clay, glass, stone products
24
25
26
27
28
Primary metals
Iron and steel
Fabricated metal products
Nonelectrical machinery
Electrical machinery
29 Transportation equipment
30
Motor vehicles and parts
31
Aerospace and miscellaneous
transportation equipment
32 Instruments
33 Miscellaneous manufactures
Utilities
34 Electric
117.9
144.4
177.0
92.8
89.5
Gross value (billions of 1982 dollars, annual rates)
MAJOR MARKET
35 Products, total
517.5 1 , 7 0 2 . 2 1 , 6 8 6 . 7 1 , 7 0 0 . 7 1 , 7 0 1 . 6 1 , 7 1 8 . 7 1 . 7 2 5 . 2 1 , 7 1 0 . 0 1 , 7 2 3 . 0 1 , 7 2 0 . 4 1 . 7 3 2 . 5 1 , 7 4 1 . 7 1,733.7 1,768.6 1 , 7 6 8 . 1
36 Final
37
Consumer goods
38
Equipment
39 Intermediate
405.7
272.7
133.0
111.9
1,314.5 1,296.6 1,307.3 1,310.9 1,329.2 1.330.3 1,316.5 1,324.7 1,320.1 1.326.6 1,334.9 1,328.9 1,360.1 1,359.1
853.8 846.5 857.1 860.0 865.3 868.1 857.1 862.8 855.1 863.2 866.4 855.9 876.3 876.6
458.2 450.0 450.2 450.9 463.9 462.2 459.4 461.9 465.0 463.5 468.5 473.0 483.8 482.6
387.6 390.2 393.4 390.7 389.5 394.9 393.6 398.4 400.3 405.9 406.8 404.8 408.5 409.0
• A major revision of the industrial production index and the capacity
utilization rates was released in July 1985. See " A Revision of the Index of
Industrial Production" and accompanying tables that contain revised indexes
( 1 9 7 7 = 1 0 0 ) t h r o u g h D e c e m b e r 1984 in t h e FEDERAL RESERVE BULLETIN, v o l . 71
(July 1985), pp. 487-501. The revised indexes for January through June 1985 were
shown in the September BULLETIN.
NOTE. These data also appear in the Board's G. 12.3 (414) release. For address,
see inside front cover.
Selected Measures
A49
2.14 HOUSING AND CONSTRUCTION
Monthly figures are at seasonally adjusted annual rates except as noted.
1987
Item
1984
1985
1986
Jan.
Feb.
Mar.
Apr.
May
June
July'
Aug/
Sept/
Oct.
Private residential real estate activity (thousands of units)
N E W UNITS
Permits authorized
1-family
2-or-more-family
1,682
922
759
1,733
957
777
1,750
1,071
679
1,652
1,085
567
1,676
1,204
472
1,719
1,150
569
1,598
1,058
540
1,493
1,009
484
1,517
1,039
478
1,487
993
494
1,502
1,023
479
1,502
992
510
1,463
977
486
4 Started
S
1-family
6
2-or-more-family
1,749
1,084
665
1,742
1,072
669
1,805
1,179
626
1,816
1,253
563
1,838
1,303
535
1,730
1,211
519
1,643
1,208
435
1,606
1,130
476
1,586
1,088
498
1,598
1,143
455
1,585
1,111
474
1,685
1,211
474
1,523
1,102
421
Under construction, end of period 1 .
1-family
2-or-more-family
9
1,051
556
1,063
539
1,074
1,089
1,070
1,061
1,059
1,053
1,049
1,054
1,051
609
480
1,085
618
476
467
623
446
621
524
583
490
1,096
621
494
441
620
439
623
430
625
424
631
423
418
1,652
1,703
1,726
1,107
1,689
1,141
1,830
1,621
1,601
619
548
1,148
682
1,158
463
1,101
500
1,698
1,120
627
1,072
631
1,756
1,120
1,956
1,025
13 Mobile homes shipped
296
Merchant builder activity in
1-family units
14 Number sold
15 Number for sale, end of period 1
1
2
3
7
8
10 Completed
11
1-family
2-or-more-family
12
Price (thousands of dollars)2
Median
16
Units sold
17
Units sold
633
1,666
1,574
1,536
578
1,067
599
1,106
468
1,102
434
231
245
233
244
238
641
359
671
359
675
361
658
361
672
359
637
1,217
739
284
244
242
231
228
227
222
639
358
688
350
748
361
712
358
740
358
720
358
733
359
649
355
80.0
84.3
92.2
98.5
95.2
98.4
96.5
104.9
109.0
105.0
106.8
106.9
106.0
97.5
101.0
112.2
122.1
121.3
119.5
118.1
126.6
135.8
128.6
128.5
133.9
123.9
2,868
3,217
3,566
3,480
3,690
3,680
3,560
3,770
3,500
3,430
3,410
3,450
3,570
72.3
85.9
75.4
90.6
80.3
98.3
82.1
85.0
100.1
104.3
85.6
104.9
85.0
105.0
85.2
106.3
85.2
106.0
86.2
107.6
85.1
105.3
85.1
106.2
84.8
106.3
EXISTING UNITS ( 1 - f a m i l y )
18 Number sold
Price of units sold (thousands of dollars)
19 Median
20 Average
Value of new construction 3 (millions of dollars)
CONSTRUCTION
21 Total put in place
328,643
355,995
388,815
384,716
401,644
388,303
396,222
396,680
397,191
398,465
402,872
410,874
410,616
22 Private
23
Residential
24
Nonresidential, total
Buildings
Industrial
2S
Commercial
26
Other
27
28
Public utilities and other
270,978
153,849
117,129
291,665
158,475
133,190
316,589
187,147
129,442
310,170
187,813
122,357
326,453
203,115
123,338
312,203
190,812
121,391
320,483
199,523
120,960
321,414
195,871
125,543
324,256
200,864
123,392
323,847
198,005
125,842
329,831
200,241
129,590
332,950
205,062
127,888
333,915
204,781
129,134
13,746
39,357
12,547
51,479
15,769
51,315
12,619
53,487
13,747
48,592
13,216
53,887
12,094
50,881
14,755
44,627
12,112
53,071
14,776
43,379
11,354
52,285
15,143
42,609
11,492
50,924
14,950
43,594
13,376
53,224
14,926
44,017
13,023
51,831
14,769
43,769
13,005
52,537
15,317
44,983
13,659
54,055
14,888
46,988
14,387
52,800
15,079
45,622
13,523
54,039
15,554
46,018
57,662
2,839
18,772
4,654
31,397
64,326
3,283
21,756
4,746
34,541
72,225
3,919
23,360
4,668
40,278
74,546
4,100
23,508
5,155
41,783
75,191
2,806
23,260
4,883
44,242
76,100
3,893
23,575
4,792
43,840
75,739
3,403
22,673
5,551
44,112
75,266
4,397
22,607
4,839
43,423
72,935r
4,352
21,704
5,498
41,381r
74,618
5,009
22,441
5,328
41,840
73,041
4,193
22,005
5,127
41,716
77,924
6,083
23,489
4,978
43,374
76,701
4,308
24,938
5,477
41,978
29 Public
30
Military
31
Highway
Conservation and d e v e l o p m e n t . . .
32
33
Other
1. Not at annual rates.
2. Not seasonally adjusted.
3. Value of new construction data in recent periods may not be strictly
comparable with data in prior periods because of changes by the Bureau of the
Census in its estimating techniques. For a description of these changes see
Construction Reports (C-30-76-5), issued by the Bureau in July 1976.
NOTE. Census Bureau estimates for all series except (1) mobile homes, which
are private, domestic shipments as reported by the Manufactured Housing
Institute and seasonally adjusted by the Census Bureau, and (2) sales and prices
of existing units, which are published by the National Association of Realtors. All
back and current figures are available from the originating agency. Permit
authorizations are those reported to the Census Bureau from 16,000 jurisdictions
beginning with 1978.
A50
2.15
Domestic Nonfinancial Statistics • February 1988
CONSUMER AND PRODUCER PRICES
Percentage changes based on seasonally adjusted data, except as noted
Change from 12
months earlier
Item
Change from 3 months earlier
(at annual rate)
1986
1986
Nov.
Change from 1 month earlier
1987
Index
level
Nov.
1987
(1967
= 100)1
1987
1987
Nov.
Dec.
Mar.
June
Sept.
July'
Aug.'
Sept.
Oct.
Nov.
CONSUMER PRICES 2
1 AU items
2
3 Energy items
4 All items less food and energy
5
Commodities
6
Services
1.3
4.5
2.5
6.2
4.6
3.6
.2
.5
.2
.4
.3
345.8
4.4
-19.6
3.8
1.3
5.2
3.2
9.3
4.4
3.9
4.6
4.1
-9.9
3.7
1.4
5.1
2.5
26.1
5.2
5.1
5.3
6.5
7.9
4.0
3.8
3.8
1.4
5.0
3.7
3.0
4.2
-.2
.1
.3
.3
.4
.0
1.7
.4
.1
.5
.5
-.5
.2
.3
.1
.4
-.9
.5
.5
.5
.1
.8
.3
.3
.3
335.1
373.5
347.0
276.6
423.5
-1.9
4.2
-37.8
3.0
2.2
2.5
.6
13.2
2.3
1.3
1.8
1.0
-12.5
4.4
3.4
4.3
-6.7
59.8
4.2
.4
3.9
12.7
5.5
-.2
1.2
2.7
-1.7
2.0
4.9
4.4
.2
-.3
1.7
.3
.1
.2
-1.2
2.6
.3
.3
.3
1.1
-3.7
.6
.7
-.2
-.1
-1.0
.0
-.4
.0
.3
-.8
.0
.1
298.1
284.9
513.5
268.7
314.3
-4.4
.2
5.4
4.7
-1.2
1.2
7.8
3.3
5.7
4.6
4.6
5.0
.6
.4
.5
.4
.0
.5
.5
.9
.4
.5
327.2
319.3
.1
-27.1
-.1
-.4
11.4
23.5
-2.7
-.5
8.5
-10.3
50.0
15.9
34.8
11.4
31.9
-6.2
6.1
37.1
-1.9
2.9
2.9
-.1
1.4
1.3
.5
-2.7
3.8
1.3
-1.7
4.1
-3.0
-1.1
.9
235.8
598.3
301.8
PRODUCER PRICES
7 Finished goods
8
Consumer foods
9
Consumer energy
Other consumer goods
10
11
Capital equipment
12 Intermediate materials 3
13 Excluding energy
14
15
16
Crude materials
Foods
Energy
Other
1. Not seasonally adjusted.
2. Figures for consumer prices are those for all urban consumers and reflect a
rental equivalence measure of homeownership after 1982.
3. Excludes intermediate materials for food manufacturing and manufactured
animal feeds.
SOURCE. Bureau of Labor Statistics.
Selected Measures
A51
2.16 GROSS NATIONAL PRODUCT AND INCOME
Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates.
1986
Account
1984
1985
1987
1986
Q3
Q4
Ql
Q2
Q3 R
GROSS NATIONAL PRODUCT
1
Total
3,772.2
4,010.3
4,235.0
4,265.9
4,288.1
4,377.7
4,445.1
4,524.0
2
3
4
5
By source
Personal consumption expenditures
Durable goods
Nondurable goods
Services
2,430.5
335.5
867.3
1,227.6
2,629.4
368.7
913.1
1,347.5
2,799.8
402.4
939.4
1,458.0
2,837.1
427.6
940.0
1,469.5
2,858.6
419.8
946.3
1,492.4
2,893.8
396.1
969.9
1,527.7
2,943.7
409.0
982.1
1,552.6
3,011.3
436.8
986.4
1,588.1
664.8
597.1
416.0
141.1
274.9
181.1
641.6
631.6
442.6
152.5
290.1
189.0
671.0
655.2
436.9
137.4
299.5
218.3
660.8
657.3
433.5
131.1
302.4
223.8
660.2
666.6
439.7
132.9
306.7
226.9
699.9
648.2
422.8
128.7
294.1
225.4
702.6
662.3
434.6
129.7
304.9
227.7
707.4
684.5
456.6
137.1
319.5
227.9
6
7
8
9
10
11
Gross private domestic investment
Fixed investment
Nonresidential
Structures
Producers' durable equipment
Residential structures
12
13
Change in business inventories
Nonfarm
67.7
60.5
10.0
13.6
15.7
16.8
3.5
-.9
-6.4
5.1
51.6
48.7
40.3
27.3
22.9
11.1
14
15
16
Net exports of goods and services
Exports
Imports
-58.9
383.5
442.4
-79.2
369.9
449.2
-105.5
376.2
481.7
-110.5
376.6
487.1
-116.9
383.3
500.2
-112.2
397.3
509.5
-118.4
416.5
534.8
-123.7
439.2
562.9
17
18
19
Government purchases of goods and services
Federal
State and local
735.9
310.5
425.3
818.6
353.9
464.7
869.7
366.2
503.5
878.5
371.2
507.3
886.3
368.6
517.7
896.2
366.9
529.3
917.1
379.6
537.6
929.0
382.1
546.9
20
21
22
23
24
25
By major type of product
Final sales, total
Goods
Durable
Nondurable
Services
Structures
3,704.5
1,581.3
681.5
899.9
1,813.9
376.9
4,000.3
1,637.9
704.3
933.6
1,969.2
403.1
4,219.3
1,693.8
726.8
967.0
2,116.2
425.0
4,262.4
1,703.6
735.8
967.8
2,136.6
425.7
4,294.6
1,698.9
737.3
961.6
2,160.0
429.3
4,326.0
1,738.7
747.0
991.7
2,212.0
426.9
4,404.8
1,763.5
756.7
1,006.8
2,252.2
429.4
4,501.1
1,798.3
785.7
1,012.6
2,289.3
436.4
26
27
28
Change in business inventories
Durable goods
Nondurable goods
67.7
40.2
27.5
10.0
7.3
2.7
15.7
4.8
10.9
3.5
-12.1
15.6
-6.4
-4.5
-1.9
51.6
35.2
16.5
40.3
22.1
18.2
22.9
-1.9
24.8
3,501.4
3,607.5
3,713.3
3,718.0
3,731.5
3,772.2
3,795.3
3,835.9
29 MEMO
Total GNP in 1982 dollars
NATIONAL INCOME
30
Total
3,028.6
3,229.9
3,422.0
3,438.7
3,471.0
3,548.3
3,593.3
3,659.0
31
32
33
34
35
36
37
Compensation of employees
Wages and salaries
Government and government enterprises
Other
Supplement to wages and salaries
Employer contributions for social insurance
Other labor income
2,213.9
1,838.8
346.1
1,492.5
375.1
192.2
182.9
2,370.8
1,974.7
372.3
1,602.6
396.1
203.8
192.3
2,504.9
2,089.1
394.8
1,694.3
415.8
214.7
201.1
2,515.1
2,097.9
397.7
1,700.2
417.2
214.9
202.3
2,552.0
2,128.5
403.8
1,724.7
423.5
219.1
204.4
2,589.9
2,163.3
412.2
1,751.1
426.6
220.0
206.7
2,623.4
2,191.4
418.1
1,773.3
432.0
222.5
209.5
2,663.5
2,226.5
424.2
1,802.3
437.0
225.9
211.1
38
39
40
Proprietors' income 1
Business and professional
Farm 1
234.5
204.0
30.5
257.3
227.6
29.7
289.8
252.6
37.2
292.5
256.2
36.3
297.8
261.2
36.6
320.9
269.7
51.3
323.1
275.8
47.3
322.7
282.1
40.6
41
Rental income of persons 2
8.5
9.0
16.7
17.2
18.4
20.0
18.9
17.3
42
43
44
45
Corporate profits 1
Profits before tax
Inventory valuation adjustment
Capital consumption adjustment
266.9
240.0
-5.8
32.7
277.6
224.8
-.7
53.5
284.4
231.9
6.5
46.0
286.4
236.3
6.0
44.0
281.1
247.9
-8.9
42.1
294.0
257.0
-11.3
48.2
296.8
268.7
-20.0
48.0
314.9
284.9
-17.6
47.7
46
Net interest
304.8
315.3
326.1
327.5
321.7
323.6
331.1
340.6
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. Survey of Current Business (Department of Commerce).
A52
Domestic Nonfinancial Statistics • February 1988
2.17 PERSONAL INCOME AND SAVING
Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted.
1987
1986
Account
1984
1985
1986
Q3
Q4
Q1
Q2
Q3'
PERSONAL INCOME AND SAVING
1 Total personal income
3,108.7
3,327.0
3,534.3
3,553.6
3,593.6
3,662.0
3,708.6
3,761.0
2 Wage and salary disbursements
3
Commodity-producing industries
Manufacturing
4
5
Distributive industries
6
Service industries
7
Government and government enterprises
1,838.6
577.6
439.1
442.8
472.1
346.1
1,974.9
609.2
460.9
473.0
520.4
372.3
2,089.1
623.3
470.5
497.1
573.9
394.8
2,097.9
622.8
470.0
498.6
578.8
397.7
2,128.5
628.4
474.5
504.7
591.6
403.8
2,163.3
632.9
477.2
511.5
606.7
412.2
2,191.4
635.0
479.0
518.9
619.3
418.1
2,226.1
641.8
485.1
526.3
633.9
424.2
182.9
234.5
204.0
30.5
8.5
75.5
444.7
456.6
235.7
192.3
257.3
227.6
29.7
9.0
76.3
476.5
489.7
253.4
201.1
289.8
252.6
37.2
16.7
81.2
497.6
518.3
269.2
202.3
292.5
256.2
36.3
17.2
82.1
498.1
523.6
272.4
204.4
297.8
261.2
36.6
18.4
82.9
496.8
526.6
273.5
206.7
320.9
269.7
51.3
20.0
84.5
499.8
533.7
278.0
209.5
323.1
275.8
47.3
18.9
86.3
506.3
541.5
282.3
211.1
322.7
282.1
40.6
17.3
88.7
520.0
545.8
284.4
8
9
10
11
12
13
14
Other labor income
Proprietors' income 1
Business and professional
Farm 1
Rental income of persons
Dividends
Personal interest income
16
Old-age survivors, disability, and health insurance benefits . . .
17
LESS: Personal contributions for social insurance
18 EQUALS: Personal income
132.7
148.9
159.6
160.1
161.8
166.7
168.4
170.7
3,108.7
3,327.0
3,534.3
3,553.6
3,593.6
3,662.0
3,708.6
3,761.0
440.2
485.9
512.2
515.3
532.0
536.1
578.0
565.7
20 EQUALS: Disposable personal income
2,668.6
2,841.1
3,022.1
3,038.2
3,061.6
3,125.9
3,130.6
3,195.3
21
LESS: Personal outlays
2,504.5
2,714.1
2,891.5
2,929.4
2,952.6
2,987.5
3,037.4
3,106.5
22 EQUALS: Personal saving
164.1
127.1
130.6
108.9
109.0
138.4
93.2
88.8
14,770.6
9,488.6
10,419.0
6.1
15,073.7
9,830.2
10,622.0
4.5
15,368.3
10,141.9
10,947.0
4.3
15,369.9
10,241.8
10,968.0
3.6
15,387.6
10,228.8
10,956.0
3.6
15,523.4
10,188.9
11,008.0
4.4
15,586.4
10,215.6
10,865.0
3.0
15,714.4
10,326.5
10,958.0
2.8
19
LESS: Personal tax and nontax payments
MEMO
Per capita (1982 dollars)
23
Gross national product
24
Personal consumption expenditures
25
Disposable personal income
26 Saving rate (percent)
GROSS SAVING
28
29
30
31
Gross private saving
Personal saving
Undistributed corporate profits
Corporate inventory valuation adjustment
Capital consumption
32 Corporate
34
35
allowances
Government surplus, or deficit ( - ) , national income and
product accounts
Federal
38 Gross private domestic
39 Net foreign
40 Statistical discripancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
568.5
531.3
532.0
516.2
515.3
554.3
551.3
559.3
673.5
164.1
94.0
-5.8
664.2
127.1
99.6
-.7
679.8
130.6
92.6
6.5
660.4
108.9
92.6
6.0
653.4
109.0
78.5
-8.9
683.8
138.4
75.6
-11.3
639.9
93.2
70.1
-20.0
649.0
88.8
76.8
-17.6
254.5
160.9
269.1
168.5
282.8
173.8
284.3
174.6
289.3
176.6
291.8
178.0
294.5
182.1
297.8
185.3
-105.0
-169.6
64.6
-132.9
-196.0
63.1
-147.8
-204.7
56.8
-144.1
-203.7
59.6
-138.1
-188.7
50.6
-129.5
-170.5
41.0
-88.6
-139.2
50.6
-89.7
-136.1
46.5
573.9
525.7
527.1
510.1
503.7
552.1
548.1
548.4
664.8
-90.9
641.6
-115.9
671.0
-143.9
660.8
-150.7
660.2
-156.5
699.9
-147.7
702.6
-154.5
707.4
-159.0
5.4
-5.6
-4.9
-6.1
-11.6
-2.2
-3.1
-10.9
SOURCE. Survey of Current Business (Department of Commerce).
Summary Statistics
3.10 U.S. INTERNATIONAL TRANSACTIONS
A53
Summary
Millions of dollars; quarterly data are seasonally adjusted except as noted. 1
1987
Item credits or debits
1 Balance on current account
2 Not seasonally adjusted
3
4
5
6
7
8
9
10
Merchandise trade balance 2
Merchandise exports
Merchandise imports
Military transactions, net
Investment income, net 3
Other service transactions, net
Remittances, pensions, and other transfers
U.S. government grants (excluding military)
11 Change in U.S. government assets, other than official
reserve assets, net (increase, - )
1984
1985
1986
Q3
Q4
Ql
Q2
Q3 P
-107,013
-116,394
-141,352
-36,583
-40,230
-37,977
-36,398
-36,784
-33,435
-41,190
-42,006
-43,378
-48,525
-112,522
219,900
-332,422
-1,942
18,490
1,138
-122,148
215,935
-338,083
-3,338
25,398
-1,005
-144,339
224,361
-368,700
-3,662
20,844
1,463
-37,115
56,534
-93,649
-815
5,339
342
-38,595
57,021
-95,616
-495
4,492
759
-38,757
56,992
-95,749
-37
5,500
-387
-39,558
60,097
-99,655
29
1,577
-146
-39,832
65,263
-105,095
-443
-267
95
-3,637
-8,541
-4,079
-11,222
-3,885
-11,772
-875
-3,459
-1,151
-2,987
-1,017
-2,086
-865
-2,227
-872
-2,059
232
-5,476
-2,831
-1,920
-1,454
225
-177
12 Change in U.S. official reserve assets (increase, —)
13 Gold
14 Special drawing rights (SDRs)
15 Reserve position in International Monetary Fund
16 Foreign currencies
-3,130
-3,858
312
280
132
1,956
3,419
32
-979
-995
-1,156
-897
908
-3,869
-246
1,500
-942
163
508
-391
-31
283
-171
335
3,255
-210
-120
76
606
1,274
17 Change in U.S. private assets abroad (increase, - ) 3
18 Bank-reported claims
19 Nonbank-reported claims
20 U.S. purchase of foreign securities, net
21 U.S. direct investments abroad, net 3
-13,685
-11,127
5,019
-4,756
-2,821
-24,711
-1,323
1,361
-7,481
-17,268
-94,374
-59,039
-3,986
-3,302
-28,047
-23,304
-18,878
685
620
-5,731
-32,351
-31,800
170
3,113
-3,834
13,352
25,686
-1,163
-1,345
-9,826
-18,137
-15,685
2,603
384
-5,439
-29,467
-21,249
22 Change in foreign official assets in the United States
(increase, +)
23 U.S. Treasury securities
24 Other U.S. government obligations
25 Other U.S. government liabilities
26 Other U.S. liabilities reported by U.S. banks
27 Other foreign official assets 5
2,987
4,690
13
586
555
-2,857
-1,140
-838
-301
823
645
-1,469
34,698
34,515
-1,214
1,723
554
15,551
12,167
-276
999
2,963
-302
1,003
4,572
-117
-607
-2,435
-410
13,953
12,145
-1,381
3,611
-360
10,070
11,084
256
-1,504
547
-313
359
1,200
714
-506
-425
-624
28 Change in foreign private assets in the United States
(increase, +) 3
U.S. bank-reported liabilities
U.S. nonbank-reported liabilities
Foreign private purchases of U.S. Treasury securities, net
Foreign purchases of other U.S. securities, net
Foreign direct investments in the United States, net3
99,481
33,849
4,704
23,001
12,568
25,359
131,012
41,045
-450
20,433
50,962
19,022
178,689
77,350
-2,791
8,275
70,802
25,053
54,040
30,360
57,428
34,604
1,035
-3,074
12,269
12,594
12,802
-13,614
1,761
-1,570
18,499
7,726
39,494
14,823
1,526
-2,211
15,870
9,486
67,650
48,872
29
30
31
32
33
34 Allocation of SDRs
35 Discrepancy
36 Owing to seasonal adjustments
37
Statistical discrepancy in recorded data before seasonal
adjustment
0
0
0
0
-80
609
17,074
6,077
0
0
-62
0
0
0
407
-165
-930
-7,288
-2,832
12,669
8,941
0
26,837
0
0
0
0
0
17,920
23,947
-8,530
-4,153
11,750
3,904
-5,504
2,652
6,521
-2,009
4,572
-5,177
26,837
17,920
23,947
-4,377
7,846
-8,156
8,530
9,749
0
MEMO
Changes in official assets
U.S. official reserve assets (increase, - )
Foreign official assets in the United States (increase, +)
excluding line 25
40 Change in Organization of Petroleum Exporting Countries
official assets in the United States (part of line 22
above)
41 Transfers under military grant programs (excluded from
lines 4, 6, and 10 above)
38
39
-3,130
-3,858
312
280
132
1,956
3,419
32
2,401
-1,963
32,975
14,552
1,610
15,334
11,574
865
-4,504
-6,709
-8,508
-3,023
-5,195
-2,901
-2,651
-1,681
153
46
101
19
53
26
10
1. Seasonal factors are not calculated for lines 6, 10, 12-16, 18-20, 22-34, and
38-41.
2. Data are on an international accounts (IA) basis. Differs from the Census
basis data, shown in table 3.11, for reasons of coverage and timing. Military
exports are excluded from merchandise data and are included in line 6.
3. Includes reinvested earnings.
4. Primarily associated with military sales contracts and other transactions
arranged with or through foreign official agencies.
5. Consists of investments in U.S. corporate stocks and in debt securities of
private corporations and state and local governments.
NOTE. Data are from Bureau of Economic Analysis, Survey of Current Business
(Department of Commerce).
A54
International Statistics • February 1988
3.11 U.S. FOREIGN TRADE1
Millions of dollars; monthly data are not seasonally adjusted.
1987
Item
1
EXPORTS of domestic and foreign
merchandise excluding grant-aid
shipments, f.a.s. value
2
GENERAL IMPORTS including
merchandise for immediate
consumption plus entries into
bonded warehouses, c.i.f. value . . . .
3
Trade balance
1984
223,976
1985
218,815
1986
226,808
Apr.
May
June
July
Aug.
Sept.
Oct.
20,496
20,784
21,126
21,008
20,222
20,986
21,752
346,364
352,463
382,964
33,459
34,822
36,838
37,483
35,905
35,062
39,383
-122,389
-133,648
-156,156
-12,963
-14,039
-15,711
-16,475
-15,683
-14,076
-17,631
1. The Census basis data differ from merchandise trade data shown in table
3.10, U.S. International Transactions Summary, for reasons of coverage and
timing. On the export side, the largest adjustment is the exclusion of military sales
(which are combined with other military transactions and reported separately in
the "service account" in table 3.10, line 6). On the import side, additions are made
for gold, ship purchases, imports of electricity from Canada, and other transac-
tions; military payments are excluded and shown separately as indicated above.
As of Jan. 1, 1987 census data are released 45 days after the end of the month.
Total exports and the trade balance reflect adjustments for undocumented exports
to Canada.
SOURCE. FT900 "Summary of U.S. Export and Import Merchandise Trade"
(Department of Commerce, Bureau of the Census).
3.12 U.S. RESERVE ASSETS
Millions of dollars, end of period
1987
Type
1
Total
2 Gold stock, including Exchange Stabilization Fund 1
3
Special drawing rights2,3
4
Reserve position in International Monetary Fund
5
Foreign currencies 4
1984
1985
1986
May
June
July
Aug.
Sept.
Oct.
Nov/
34,934
43,186
48,511'
45,913
45,140
44,318
45,944
45,070
46,200
46,779
11,096
11,090
11,064
11,070
11,069
11,069
11,068
11,075
11,085
11,082
5,641
7,293
8,395
8,904
8,856
8,813
9,174
9,078
9,373
9,937
11,541
11,947
11,730
11,517
11,313
10,964
11,116
10,918
11,157
11,369
6,656
12,856
17,322'
14,422
13,902
13,472
14,586
13,999
14,585
14,391
1. Gold held under earmark at Federal Reserve Banks for foreign and international accounts is not included in the gold stock of the United States; see table
3.13. Gold stock is valued at $42.22 per fine troy ounce.
2. Beginning July 1974, the IMF adopted a technique for valuing the SDR based
on a weighted average of exchange rates for the currencies of member countries.
From July 1974 through December 1980, 16 currencies were used; from January
1981, 5 currencies have been used. The U.S. SDR holdings and reserve position
in the IMF also are valued on this basis beginning July 1974.
3. Includes allocations by the International Monetary Fund of SDRs as follows:
$867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 million on Jan. 1,
1972; $1,139 million on Jan. 1, 1979; $1,152 million on Jan. 1, 1980; and $1,093
million on Jan. 1, 1981; plus transactions in SDRs.
4. Valued at current market exchange rates.
3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS1
Millions of dollars, end of period
1987
Assets
1984
1985
1986
May
1 Deposits
Assets held in custody
2 U.S. Treasury securities
3 Earmarked gold3
July
Aug.
Sept.
Oct.
Nov/
267
480
287
319
318
261
294
456
236
351
118,000
14,242
121,004
14,245
155,835
14,048
175,849
14,031
176,657
14,034
171,269
14,010
179,484
14,022
179,097
14,015
182,072
13,998
187,767
13,965
1. Excludes deposits and U.S. Treasury securities held for international and
regional organizations.
2. Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable U.S.
Treasury securities payable in dollars and in foreign currencies.
June
3. Earmarked gold and the gold stock are valued at $42.22 per fine troy ounce,
Earmarked gold is gold held for foreign and international accounts and is not
included in the gold stock of the United States.
Summary Statistics
A55
3.14 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data1
Millions of dollars, end of period
1987
Apr.
May
June
July
Aug.
Sept.
Oct."
All foreign countries
1 Total, all currencies
2 Claims on United States
Parent bank
3
Other banks in United States
4
5
Nonbanks
6 Claims on foreigners
Other branches of parent bank
7
Banks
8
9
Public borrowers
Nonbank foreigners
10
11 Other assets
453,656
458,012
456,628
485,343
487,599'
475,188
470,391
473,540
489,840
517,463
113,393
78,109
13,664
21,620
320,162
95,184
100,397
23,343
101,238
119,706
87,201
13,057
19,448
315,676
91,399
102,960
23,478
97,839
114,563
83,492
13,685
17,386
312,955
96,281
105,237
23,706
87,731
128,723'
94,422'
15,33C
18,971'
321,344
93,669
114,997
22,892
89,786
127,009
92,194'
17,048'
17,767'
328,280
101,309
114,101
23,295
89,575
123,400
89,376'
15,981'
18,043'
319,546
101,326'
107,747
22,59C
87,883
123,687
89,793'
14,303'
19,591'
314,078
96,582
110,124
21,412
85,960
124,759
89,958'
14,705'
20,096
314,747
97,988
108,088
21,537
87,134
137,201
101,618
15,929
19,654
319,355
103,277
108,415
21,278
86,385
135,576
96,805
17,826
20,945
345,950
115,514
118,270
21,633
90,533
20,101
22,630
29,110
35,276'
32,31c
32,242
32,626
34,034
33,284
35,937
12 Total payable in U.S. dollars
350,636
336,520
317,487
329,456'
336,414'
329,499
322,300
322,286
340,686
350,738
13 Claims on United States
14 Parent bank
15 Other banks in United States
16 Nonbanks
17 Claims on foreigners
18 Other branches of parent bank
19 Banks
Public borrowers
20
Nonbank foreigners
21
111,426
77,229
13,500
20,697
228,600
78,746
76,940
17,626
55,288
116,638
85,971
12,454
18,213
210,129
72,727
71,868
17,260
48,274
110,620
82,082
12,830
15,708
195,063
72,197
66,421
16,708
39,737
122,932
92,468'
13,521'
16,943'
192,360
66,916
69,244
16,639
39,561
121,551'
90,159'
15,412'
15,980'
201,450'
75,014
69,525
16,812
40,099'
118,411
87,54C
14,669'
16,202'
198,465
75,771
67,287
16,271
39,136
118,563
87,779'
12,794'
17,99C
190,590
72,515
65,673
15,062
37,340
118,964
87,844'
12,816'
18,304
189,958
73,327
64,106
15,115
37,410
131,667
99,759
13,922
17,986
195,073
77,699
64,506
14,942
37,926
129,018
94,616
15,627
18,775
207,892
85,654
68,920
14,890
38,428
10,610
9,753
11,804
14,164'
13,413'
12,623
13,147
13,364
13,946
13,828
22 Other assets
United Kingdom
23 Total, all currencies
144,385
148,599
140,917
149,998
154,371
146,678
149,760
148,039
149,836
163,511
24 Claims on United States
Parent bank
25
Other banks in United States
26
27
Nonbanks
28 Claims on foreigners
Other branches of parent bank
29
30
Banks
Public borrowers
31
Nonbank foreigners
32
27,675
21,862
1,429
4,384
111,828
37,953
37,443
5,334
31,098
33,157
26,970
1,106
5,081
110,217
31,576
39,250
5,644
33,747
24,599
19,085
1,612
3,902
109,508
33,422
39,468
4,990
31,628
31,001
25,315
1,564
4,122
111,113
29,936
42,961
4,964
33,252
34,427
28,935
1,507
3,985
112,997
33,412
41,241
5,234
33,110
30,859
25,944
1,194
3,721
107,407
32,641
37,745
4,684
32,337
32,694
27,288
1,537
3,869
108,732
31,241
41,219
4,617
31,655
31,377
25,627
1,585
4,165
108,293
30,794
40,082
4,761
32,656
32,581
27,128
1,349
4,104
108,562
33,334
38,390
4,725
32,113
33,336
27,142
1,870
4,324
120,649
37,962
42,929
4,881
34,877
33 Other assets
34 Total payable in U.S. dollars
35 Claims on United States
Parent bank
36
Other banks in United States
37
Nonbanks
38
39 Claims on foreigners
40
Other branches of parent bank
41
Banks
Public borrowers
42
Nonbank foreigners
43
44 Other assets
4,882
5,225
6,810
7,884
6,947
8,412
8,334
8,369
8,693
9,526
112,809
108,626
95,028
99,398
104,622
97,672
99,170
96,510
99,736
105,534
26,868
21,495
1,363
4,010
82,945
33,607
26,805
4,030
18,503
32,092
26,568
1,005
4,519
73,475
26,011
26,139
3,999
17,326
23,193
18,526
1,475
3,192
68,138
26,361
23,251
3,677
14,849
29,066
24,689
1,192
3,185
66,257
22,339
24,962
3,712
15,244
32,542
28,228
1,157
3,157
68,469
25,921
23,263
3,785
15,500
29,252
25,286
950
3,016
64,676
25,409
21,355
3,470
14,442
31,076
26,661
1,294
3,121
64,024
23,827
22,975
3,400
13,822
29,519
24,853
1,309
3,357
63,265
23,155
22,646
3,473
13,991
30,791
26,423
1,105
3,263
64,561
25,600
21,522
3,377
14,062
31,252
26,282
1,504
3,466
69,836
28,370
22,941
3,426
15,099
2,996
3,059
3,697
4,075
3,611
3,744
4,070
3,726
4,384
4,446
Bahamas and Caymans
45 Total, all currencies
46 Claims on United States
Parent bank
47
Other banks in United States
48
Nonbanks
49
50 Claims on foreigners
Other branches of parent bank
51
Banks
52
Public borrowers
53
54
Nonbank foreigners
55 Other assets
56 Total payable in U.S. dollars
146,811
142,055
142,592
146,954
141,832'
142,170
140,512
139,986
151,909
156,752
77,296
49,449
11,544
16,303
65,598
17,661
30,246
6,089
11,602
74,864
50,553
11,204
13,107
63,882
19,042
28,192
6,458
10,190
78,048
54,575
11,156
12,317
60,005
17,296
27,476
7,051
8,182
78,903'
52,756'
12,702'
13,445'
62,293
16,562
30,310
7,247
8,174
73,445
46,463'
14,552'
12,43c
63,089
15,775
31,417
7,304
8,593
72,541
45,891'
13,684'
12,966'
65,280
18,873
30,987
7,025
8,395
72,772
46,256'
11,824'
14,692'
63,027
17,493
30,372
7,046
8,116
72,558
45,697'
12,097'
14,764
62,336
18,228
29,160
6,873
8,075
81,679
53,668
13,518
14,493
65,619
18,698
31,690
6,987
8,244
83,187
53,093
14,721
15,373
68,710
18,936
35,020
7,017
7,737
3,917
3,309
4,539
5,758'
5,298'
4,349
4,713
5,092
4,611
4,855
141,562
136,794
136,813
138,961'
133,482'
135,323
131,636
130,985
142,385
145,674
1. Beginning with June 1984 data, reported claims held by foreign branches
have been reduced by an increase in the reporting threshold for "shell" branches
from $50 million to $150 million equivalent in total assets, the threshold now
applicable to all reporting branches.
A56
International Statistics • February 1988
3.14 Continued
Liability account
1986
Apr.
May
June
July
Aug.
Sept.
All foreign countries
57 Total, all currencies
453,656
458,012
456,628
485,343
487,599'
475,188
470,391
473,540
489,840
517,463
58 Negotiable CDs
59 To United States
60
Parent bank
61
Other banks in United States
62
Nonbanks
37,725
147,583
78,739
18,409
50,435
34,607
155,538
83,914
16,894
54,730
31,629
151,632
82,561
15,646
53,425
33,155
152,875
74,884'
17,16y
60,822'
34,360
149,970
74,324'
17,134'
58,512'
31,776
150,115
78,152'
16,814'
55,149'
32,993
143,434
71,543'
15,005'
56,886'
33,648
141,067
73,52C
15,289'
52,258'
35,724
152,889
79,690
17,214
55,985
36,723
156,620
79,614
18,878
58,128
63 To foreigners
64
Other branches of parent bank
65
Banks
66
Official institutions
67
Nonbank foreigners
68 Other liabilities
247,907
93,909
78,203
20,281
55,514
20,441
245,939
89,529
76,814
19,520
60,076
21,928
253,775
95,146
77,809
17,835
62,985
19,592
278,022
94,590
92,704
21,293
69,435
21,291
284,308'
101,769'
90,338'
23,058
69,143'
18,961
274,061
100,826
81,229
22,264
69,742
19,236
274,407
95,376
87,734
21,528
69,769
19,557
278,888
97,908
87,449
21,016
72,515
19,937
280,651
103,921
85,512
20,116
71,102
20,576
303,052
111,191
98,098
20,235
73,528
21,068
69 Total payable in U.S. dollars
367,145
353,712
336,406
340,584
347,312'
340,985
334,218
333,673
352,135
361,788
70 Negotiable CDs
71 To United States
72
Parent bank
73
Other banks in United States
74
Nonbanks
35,227
143,571
76,254
17,935
49,382
31,063
150,162
80,888
16,264
53,010
28,466
143,650
78,472
14,609
50,569
29,505
141,641
68,206'
15,711'
57,724'
30,763
141,151
69,839'
15,968'
55,344'
27,929
141,667
74,009'
15,602'
52,056'
28,781
134,731
66,874'
13,895'
53,962'
29,634
132,061
68,740'
14,086'
49,235'
31,120
142,838
74,413
15,797
52,628
32,117
145,351
74,136
17,323
53,892
75 To foreigners
76
Other branches of parent bank
77
Banks
78
Official institutions
79
Nonbank foreigners
80 Other liabilities
178,260
77,770
45,123
15,773
39,594
10,087
163,583
71,078
37,365
14,359
40,781
8,904
156,806
71,181
33,850
12,371
39,404
7,484
161,216
67,278
39,111
14,318
40,509
8,222
167,762'
74,764'
36,231'
16,068
40,699'
7,636
163,505
74,202
31,812
15,985
41,506
7,884
162,766
70,911
35,250
15,806
40,799
7,940
163,728
72,620
35,104
15,527
40,477
8,250
169,343
78,036
35,202
14,209
41,896
8,834
175,519
80,840
40,078
13,323
41,278
8,801
United Kingdom
81 Total all currencies
144,385
148,599
140,917
149,998
154,371
146,678
149,760
148,039
149,836
163,511
82 Negotiable CDs
83 To United States
84
Parent bank
85
Other banks in United States ,
86
Nonabnks
34,413
25,250
14,651
3,125
7,474
31,260
29,422
19,330
2,974
7,118
27,781
24,657
14,469
2,649
7,539
29,311
23,936
13,170
2,205
8,561
30,226
26,204
15,145
2,273
8,786
27.511
24.512
14,745
2,109
7,658
28,590
24,347
14,010
2,021
8,316
29,363
22,197
13,234
1,875
7,088
31,451
22,462
13,357
2,073
7,032
32,523
22,829
12,212
2,407
8,210
87 To foreigners
88
Other branches of parent bank
89
Banks
90
Official institutions
91
Nonbank foreigners
92 Other liabilities
77,424
21,631
30,436
10,154
15,203
7,298
78,525
23,389
28,581
9,676
16,879
9,392
79,498
25,036
30,877
6,836
16,749
8,981
87,381
22,421
37,562
8,871
18,527
9,370
89,760
26,367
35,282
10,004
18,107
8,181
86,041
25,350
32,036
9,748
18,907
8,614
87,942
23,572
35,647
9,241
19,482
8,881
87,750
23,379
34,414
9,670
20,287
8,729
86,813
26,094
31,681
10,387
18,651
9,110
98,215
29,718
38,502
10,248
19,747
9,944
117,497
112,697
99,707
101,793
106,093
100,031
101,593
99,459
102,325
108,420
33,070
24,105
14,339
2,980
6,786
29,337
27,756
18,956
2,826
5,974
26,169
22,075
14,021
2,325
5,729
27,189
21,144
12,352
2,021
6,771
28,345
23,474
14,528
2,027
6,919
25,695
21,850
14,252
1,899
5,699
26,397
21,689
13,399
1,776
6,514
27,264
19,573
12,608
1,694
5,271
28,776
19,528
12,609
1,883
5,036
29,991
18,780
11,244
2,105
5,431
56,923
18,294
18,356
8,871
11,402
3,399
51,980
18,493
14,344
7,661
11,482
3,624
48,138
17,951
15,203
4,934
10,050
3,325
49,708
14,367
19,498
5,786
10,057
3,752
51,116
18,430
15,555
7,214
9,917
3,158
49,089
17,654
13,566
7,283
10,586
3,397
50,294
16,171
16,330
7,203
10,590
3,213
49,484
15,565
15,767
7,872
10,280
3,138
50,386
17,994
14,359
8,060
9,973
3,635
55,209
20,018
17,786
7,115
10,290
4,440
139,986
93 Total payable in U.S. dollars
94 Negotiable CDs
95 To United States
96
Parent bank
97
Other banks in United States .
98
Nonbanks
99 To foreigners
100
Other branches of parent bank
101
Banks
102
Official institutions
103 Nonbank foreigners
104 Other liabilities
Bahamas and Caymans
105 Total, all currencies
146,811
142,055
142,592
146,954
141,832'
142,170
140,512
151,909
156,752
106 Negotiable CDs
107 To United States
108 Parent bank
109
Other banks in United States ,
110
Nonbanks
615
102,955
47,162
13,938
41,855
610
103,813
44,811
12,778
46,224
847
105,248
48,648
11,715
44,885
883
107,545
43,120'
13,601'
50,824'
1,092
101,695
39,826'
13,411'
48,458'
1,067
103,007
43,288'
13,382'
46,337'
1,119
99,240
39,842'
11,989'
47,409'
975
97,244
40,889'
12,276'
44,079'
886
107,245
45,890
13,564
47,791
890
111,925
48,793
14,857
48,275
111 To foreigners
112 Other branches of parent bank
113
Banks
114
Official institutions
115
Nonbank foreigners
116 Other liabilities
40,320
16,782
12,405
2,054
9,079
2,921
35,053
14,075
10,669
1,776
8,533
2,579
34,400
12,631
8,617
2,719
10,433
2,097
36,491
13,891
9,452
2,937
10,211
2,035
36,836'
13,354'
9,900'
3,072
36,004
14,023
7,943
3,185
10,853
2,092
37,988
14,803
9,395
3,263
10,527
2,165
39,437
16,465
9,514
2,935
10,523
2,330
41,277
16,925
10,395
1,786
12,171
2,501
42,147
17,032
11,587
2,113
11,415
1,790
117 Total payable in U.S. dollars . . . .
143,582
138,322
138,774
140,974
136,843'
137,763
135,376
134,354
145,354
149,274
io,5i(y
2,209
Summary Statistics
A57
3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1987
Item
1 Total
2
3
4
5
6
7
8
9
10
11
12
1
By type
Liabilities reported by banks in the United States
U.S. Treasury bills and certificates 3
U.S. Treasury bonds and notes
Marketable
Nonmarketable
U.S. securities other than U.S. Treasury securities
By area
Western Europe 1
Canada
Latin America and Caribbean
Other countries 6
1985
1986
Apr.
May
June
July
Aug.
Sept.
Oct/
178,380
211,782
236,137
236,439
238,418
232,193
237,629r
238,920
250,899
26,734
53,252
27,868
75,650
33,034
84,640
31,896
81,553
31,754
80,663
31,391
73,435
29,593r
78,210
31,310
75,701
36,781
78,819
77,154
3,550
17,690
91,368
1,300
15,596
102,019
1,300
15,144
106,465
1,300
15,225
110,184
700
15,117
112,435
500
14,432
115,047
300
14,479
116,407
300
15,202
118,860
300
16,139
74,447
1,315
11,148
86,448
1,824
3,199
88,623
2,004
8,372
105,868
1,503
5,412
106,171
3,922
9,295
109,842
1,284
5,621
108,677
3,482
7,923
109,464
1,628
5,265
111,405
3,502
7,519
108,654
1,405
5,933
107,695
3,559
7,918
105,495
1,590
5,937
106,873r
4,189
8,710
109,484
1,837
6,537''
107,833
4,529
8,558
109,339
1,619
7,042
115,337
5,152
9,048
113,830
1,474
6,056
1. Includes the Bank for International Settlements.
2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, negotiable time certificates of deposit, and borrowings under repurchase agreements.
3. Includes nonmarketable certificates of indebtedness (including those payable
in foreign currencies through 1974) and Treasury bills issued to official institutions
of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes
bonds and notes payable in foreign currencies.
5. Debt securities of U.S. government corporations and federally sponsored
agencies, and U.S. corporate stocks and bonds.
6. Includes countries in Oceania and Eastern Europe.
NOTE. Based on Treasury Department data and on data reported to the
Treasury Department by banks (including Federal Reserve Banks) and securities
dealers in the United States.
3.16 LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Banks in the United States
Payable in Foreign Currencies1
Millions of dollars, end of period
1986
Item
1 Banks' own liabilities
2 Banks' own claims
5 Claims of banks' domestic customers'
1983
5,219
7,231
2,731
4,501
1,059
1. Data on claims exclude foreign currencies held by U.S. monetary authorities.
2. Assets owned by customers of the reporting bank located in the United
1984
8,586
11,984
4,998
6,986
569
1987
1985
15,368
16,294
8,437
7,857
580
Dec.
Mar.
June
Sept.
29,556
25,920
13,923
11,997
2,507
36,905
32,613
14,077
18,536
2,012
36,083
32,884
10,935
21,949
889
45,221
41,047
15,849
25,198
996
States that represent claims on foreigners held by reporting banks for the accounts
of the domestic customers.
A58
International Statistics • February 1988
3.17 LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
Reported by Banks in the United States
Millions of dollars, end of period
1987
Holder and type of liability
1984
1985
1986
Apr.
May
June
July
Aug.
Sept.
Oct.''
1 All foreigners
407,306
435,726
539,238
553,980
557,735
541,039
542,849
550,310
583,915
605,739
2 Banks' own liabilities
3
Demand deposits
4
Time deposits'
5
Other 2 .
Own foreign offices 3
6
306,898
19,571
110,413
26,268
150,646
341,070
21,107
117,278
29,305
173,381
406,075
23,788
131,691
41,462
209,134
413,735
22,350
131,794
47,986
211,605
417,889
23,223
132,973
47,718
213,975
401,903
23,219
133,186
41,512
203,986
409,547
20,598
134,209
43,294
211,446
410,949
22,117
137,561
41,168
210,103
445,987
21,112
148,322
48,438
228,116
463,903
23,197
152,202
53,003
235,501
100,408
76,368
94,656
69,133
133,163
90,392
140,245
97,928
139,846
95,959
139,135
93,688
133,302
88,193
139,361
92,705
137,928
89,747
141,836
91,619
18,747
5,293
17,964
7,558
15,417
27,354
14,590
27,727
15,790
28.098
16,371
29,076
15,632
29,477
15,259
31,397
16,042
32,139
15,881
34,336
11 Nonmonetary international and regional
organizations7
4,454
5,821
5,272
8,230
5,199
3,979
5,660
5,332
7,802
3,864
12 Banks' own liabilities
13 Demand deposits
14
Time deposits 1
15
Other 2
2,014
254
1,267
493
2,621
85
2,067
469
3,423
199
2,066
1,158
6,636
334
3,094
3,207
3,535
106
944
2,486
2,489
72
%7
1,451
2,081
76
584
1,420
2,498
44
807
1,647
4,631
80
1,340
3,211
1,950
144
1,076
730
16 Banks' custody liabilities4
17
U.S. Treasury bills and certificates
18 Other negotiable and readily transferable
instruments 6
19 Other
2,440
916
3,200
1,736
1,849
259
1,594
428
1,664
440
1,490
266
3,579
2,339
2,834
1,635
3,171
1,793
1,914
285
1,524
0
1,464
0
1,590
0
1,152
14
1,224
0
1,224
0
1,240
0
1,193
6
1,378
0
1,624
6
7 Banks' custody liabilities4
8
U.S. Treasury bills and certificates 5
9
Other negotiable and readily transferable
instruments 6
10 Other
20 Oflficial institutions 8
86,065
79,985
103,518
117,675
113,449
112,416
104,826
107,803
107,012
115,601
21 Banks' own liabilities
22
Demand deposits
23
Time deposits 1
24
Other 2
19,039
1,823
9,374
7,842
20,835
2,077
10,949
7,809
25,376
2,267
11,009
12,100
30,060
1,829
12,277
15,954
29,034
2,089
11,277
15,668
28,364
1,745
13,042
13,577
28,221
1,711
13,540
12,970
26,297
1,907
13,556
10,834
27,611
1,799
14,073
11,739
33,562
1,867
16,144
15,551
25 Banks' custody liabilities4
26
U.S. Treasury bills and certificates
27
Other negotiable and readily transferable
instruments 6
28
Other
67,026
59,976
59,150
53,252
78,142
75,650
87,614
84,640
84,415
81,553
84,052
80,663
76,605
73,435
81,505
78,210
79,401
75,701
82,038
78,819
6,966
84
5,824
75
2,347
145
2,819
154
2,715
147
3,141
248
2,950
220
3,151
144
3,540
160
2,995
225
29 Banks
9
248,893
275,589
350,637
350,635
359,093
346,818
355,782
357,868
388,730
407,011
' 225,368
74,722
10,556
47,095
17,071
150,646
252,723
79,341
10,271
49,510
19,561
173,381
310,400
101,266
10,303
64,516
26,447
209,134
311,654
100,049
9,782
64,296
25,970
211,605
319,495
105,520
10,808
67,725
26,986
213,975
305,679
101,693
10,298
67,097
24,299
203,986
313,948
102,501
8,588
67,280
26,634
211,446
314,867
104,765
9,901
69,021
25,843
210,103
344,991
116,875
9,781
77,798
29,296
228,116
360,583
125,083
11,359
80,209
33,514
235,501
36 Banks' custody liabilities4
37
U.S. Treasury bills and certificates
38
Other negotiable and readily transferable
instruments 6
39
Other
23,525
11,448
22,866
9,832
40,237
9,984
38,981
9,545
39,598
9,774
41,139
9,066
41,834
9,142
43,000
9,100
43,739
9,206
46,427
9,273
7,236
4,841
6,040
6,994
5,165
25,089
4,090
25,346
4,213
25,611
5,611
26,462
5,850
26,841
5,320
28,581
5,221
29,312
5,735
31,419
40 Other foreigners
67,894
74,331
79,810
77,441
79,994
77,825
76,582
79,308
80,371
79,263
41 Banks' own liabilities
42
Demand deposits
43
Time deposits
44
Other 2
60,477
6,938
52,678
861
64,892
8,673
54,752
1,467
66,876
11,019
54,099
1,757
65,385
10,404
52,126
2,854
65,825
10,220
53,027
2,578
65,371
11,104
52,081
2,185
65,298
10,223
52,805
2,270
67,286
10,264
54,177
2,845
68,754
9,452
55,110
4,192
67,808
9,827
54,773
3,208
7,417
4,029
9,439
4,314
12,935
4,500
12,056
3,315
14,169
4,192
12,454
3,694
11,284
3,276
12,022
3,761
11,617
3,046
11,455
3,242
3,021
367
4,636
489
6,315
2,120
6,529
2,212
7,638
2,340
6,395
2,366
5,592
2,415
5,594
2,667
5,904
2,668
5,527
2,686
10,476
9,845
7,4%
8,134
8,694
7,356
6,313
6,458
6,501
6,666
30 Banks' own liabilities
31
Unaffiliated foreign banks
32
Demand deposits
33
Time deposits
34
Other
35
Own foreign offices 3
45 Banks' custody liabilities4
46
U.S. Treasury bills and certificates
47
Other negotiable and readily transferable
instruments 6
48
Other
49 MEMO: Negotiable time certificates of deposit in
custody for foreigners
1. Excludes negotiable time certificates of deposit, which are included in
"Other negotiable and readily transferable instruments."
2. Includes borrowing 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 majority-owned subsidiaries of
foreign banks: principally amounts due to head office or parent foreign bank, and
foreign branches, agencies, or wholly owned subsidiaries of head office or parent
foreign bank.
4. Financial claims on residents of the United States, other than long-term
securities, held by or through reporting banks.
5. Includes nonmarketable certificates of indebtedness and Treasury bills
issued to official institutions of foreign countries.
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. Data exclude "holdings of
dollars" of the International Monetary Fund.
8. Foreign central banks, foreign central governments, and the Bank for
International Settlements.
9. Excludes central banks, which are included in "Official institutions."
Bank-Reported Data
A59
3.17 Continued
1987
1984
Area and country
1985
1986
Apr.
May
June
July
Aug/
Sept.
Oct."
1 Total
407,306
435,726
539,238
553,980
557,735
541,039
542,849
550,310
583,915
605,739
2 Foreign countries
402,852
429,905
533,965
545,750
552,536
537,059
537,190
544,978
576,113
601,875
153,145
615
4,114
438
418
12,701
3,358
699
10,762
4,731
1,548
597
2,082
1,676
31,740
584
68,671
602
7,192
79
537
164,114
693
5,243
513
496
15,541
4,835
666
9,667
4,212
948
652
2,114
1,422
29,020
429
76,728
673
9,635
105
523
180,491
1,181
6,729
482
580
22,862
5,752
700
10,875
5,600
735
699
2,407
884
30,533
454
85,284
630
3,322
80
702
192,008
1,058
7,906
425
942
27,457
6,779
603
11,338
5,880
567
660
2,244
1,251
26,533
833
91,742
526
4,572
32
659
207,149
921
9,335
459
909
27,870
10,619
643
11,726
5,442
571
607
2,194
1,496
26,869
378
102,261
429
3,849
37
532
204,713
974
9,558
425
616
27,955
8,024
691
11,943
5,367
502
704
2,322
1,296
27,852
455
99,682
433
5,208
36
671
204,810
795
9,154
486
497
25,481
7,105
667
10,032
5,104
562
586
2,103
1,235
24,735
365
107,978
459
6,282
550
632
203,848
1,066
9,754
576
545
27,003
7,715
636
7,667
5,461
593
700
2,287
1,412
28,235
514
102,501
491
6,016
45
630
213,724
1,281
10,460
590
517
27,899
6,417
690
8,409
6,106
663
684
2,526
1,640
27,334
398
109,268
519
7,673
51
600
234,042
1,171
10,738
703
580
28,255
8,250
738
10,249
6,693
1,179
724
2,683
2,894
27,032
2,388
121,205
508
7,350
87
617
3 Europe
Austria
4
Belgium-Luxembourg
5
6
Denmark
Finland
7
8
France
Germany
9
10 Greece
11 Italy
12 Netherlands
13 Norway
14 Portugal
Spain
15
16 Sweden
17 Switzerland
18 Turkey
19 United Kingdom
Yugoslavia
20
Other Western Europe 1
21
22
U.S.S.R
Other Eastern Europe
23
:...
16,059
17,427
26,345
25,306
24,522
21,914
21,232
22,556
26,052
25,727
153,381
4,394
56,897
2,370
5,275
36,773
2,001
2,514
10
1,092
896
183
12,303
4,220
6,951
1,266
1,394
10,545
4,297
167,856
6,032
57,657
2,765
5,373
42,674
2,049
3,104
11
1,239
1,071
122
14,060
4,875
7,514
1,167
1,552
11,922
4,668
209,184
4,757
73,619
2,922
4,325
70,919
2,054
4,285
7
1,236
1,123
136
13,745
4,916
6,886
1,163
1,537
10,439
5,114
207,228
4,412
72,102
2,181
3,619
69,426
2,255
4,353
6
1,045
1,165
149
15,104
5,797
7,111
1,086
1,533
10,592
5,289
204,694
4,786
69,428
2,594
3,960
70,354
2,034
4,289
6
1,093
1,167
189
13,955
5,171
7,341
1,095
1,507
10,292
5,432
195,058
4,795
66,325
2,172
3,673
65,297
1,972
4,363
8
1,121
1,123
158
13,857
5,183
7,131
1,137
1,504
10,164
5,078
199,107
5,123
62,518
2,317
3,783
72,229
2,035
4,431
8
1,090
1,110
146
14,160
5,291
6,988
1,145
1,536
10,082
5,105
201,433
5,074
62,461
2,270
3,960
73,257
2,560
4,449
7
1,101
1,086
171
14,549
5,338
7,130
1,200
1,485
10,146
5,186
214,314
4,674
71,490
2,244
4,376
78,116
2,248
4,180
7
1,097
1,072
156
14,265
5,218
7,187
1,203
1,492
9,824
5,466
217,925
5,075
73,305
2,437
4,071
79,255
2,191
4,166
12
1,115
1,053
140
14,328
5,305
7,466
1,202
1,493
9,868
5,442
71,187
72,280
108,806
112,296
107,774
106,737
102,971
106,999
111,396
115,249
1,153
4,990
6,581
507
1,033
1,268
21,640
1,730
1,383
1,257
16,804
12,841
1,607
7,786
8,067
712
1,466
1,601
23,077
1,665
1,140
1,358
14,523
9,276
1,476
18,902
9,390
674
1,547
1,892
47,410
1,141
1,866
1,119
12,352
11,036
1,889
19,461
9,367
527
1,460
1,305
53,381
1,178
1,427
1,118
11,363
9,821
1,842
17,331
9,365
569
1,243
1,084
50,434
1,343
1,312
1,180
10,860
11,209
1,737
16,346
9,122
714
1,774
1,229
49,494
1,397
1,222
1,144
11,448
11,111
1,744
16,436
8,595
572
1,404
928
46,722
1,410
1,148
1,096
11,676
11,241
2,011
15,377
9,015
902
1,541
1,036
49,872
1,388
1,208
1,190
12,676
10,783
1,773
15,197
8,637
771
1,435
1,105
52,944
1,714
1,152
1,118
14,043
11,506
1,699
18,299
9,242
606
1,336
2,170
53,180
1,576
1,330
1,275
13,659
10,877
57 Africa
58
Egypt
59
Morocco
60
South Africa
61
Zaire
Oil-exporting countries 4
62
Other
63
3,396
647
118
328
153
1,189
961
4,883
1,363
163
388
163
1,494
1,312
4,021
706
92
270
74
1,519
1,360
3,732
871
101
288
39
1,212
1,221
4,003
1,052
86
198
74
1,267
1,326
3,759
1,011
106
188
58
1,111
1,286
4,018
1,113
75
229
64
1,275
1,262
4,194
1,158
74
227
69
1,331
1,335
4,012
1,118
81
199
81
1,178
1,356
3,928
1,104
70
280
71
1,081
1,323
64 Other countries
65
Australia
All other
66
5,684
5,300
384
3,347
2,779
568
5,118
4,196
922
5,181
4,293
888
4,394
3,589
805
4,878
4,113
765
5,052
4,333
718
5,948
5,019
929
6,616
5,641
974
5,004
4,011
994
67 Nonmonetary international and regional organizations
International 5
68
Latin American regional
69
Other regional 6
70
4,454
3,747
587
120
5,821
4,806
894
121
5,272
4,086
1,033
154
8,230
6,966
845
420
5,199
3,717
994
488
3,979
2,577
1,047
356
5,660
4,200
1,075
384
5,332
3,819
1,070
443
7,802
6,086
1,126
591
3,864
2,393
1,155
316
24 Canada
25 Latin America and Caribbean
Argentina
26
27
Bahamas
Bermuda
28
Brazil
29
British West Indies
30
Chile
31
Colombia
32
Cuba
33
34
Ecuador
35
Guatemala
36 Jamaica
37
Mexico
38
Netherlands Antilles
Panama
39
40
Peru
Uruguay
41
Venezuela
42
Other
43
44 Asia
China
Mainland
45
Taiwan
46
Hong Kong
47
India
48
Indonesia
49
Israel
50
Japan
51
52
Korea
Philippines
53
Thailand
54
Middle-East oil-exporting countries 3
55
Other
56
1. Includes the Bank for International Settlements and Eastern European
countries that are not listed in line 23.
2. Comprises Bulgaria, Czechoslovakia, the German Democratic Republic,
Hungary, Poland, and Romania.
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
5. Excludes "holdings of dollars" of the International Monetary Fund.
6. Asian, African, Middle Eastern, and European regional organizations,
except the Bank for International Settlements, which is included in "Other
Western Europe."
A60
International Statistics • February 1988
3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States
Payable in U.S. Dollars
Millions of dollars, end of period
1987
1984
Area and country
1985
1986
Apr.
May
June
July
Aug.
Sept.
Oct/
1 Total
400,162
401,608
444,265
439,509
438,135
432,208
423,424
428,052r
447,103
461,420
2 Foreign countries
399,363
400,577
441,244
434,240
437,304
430,076
421,396
425,182r
442,584
458,858
99,014
433
4,794
648
898
9,157
1,306
817
9,119
1,356
675
1,243
2,884
2,230
2,123
1,130
56,185
1,886
596
142
1,389
106,413
598
5,772
706
823
9,124
1,267
991
8,848
1,258
706
1,058
1,908
2,219
3,171
1,200
62,566
1,964
998
130
1,107
107,446
728
7,498
688
947
11,356
1,820
648
9,038
3,299
654
739
1,492
1,945
3,049
1,543
58,337
1,836
540
345
944
108,052
746
8,542
546
1,116
10,817
1,379
460
7,536
3,030
683
615
1,977
2,414
2,905
1,559
59,876
1,763
648
375
1,065
116,501
669
9,920
541
1,036
12,075
1,508
457
8,329
2,946
776
641
2,107
2,614
3,593
1,623
64,001
1,803
493
357
1,012
114,132
758
9,792
716
1,035
12,036
1,548
456
8,404
5,744
774
659
1,848
2,330
2,611
1,785
59,748
1,755
559
582
993
108,093
698
10,239
614
1,037
11,673
2,009
433
6,784
4,429
830
645
1,830
2,287
2,464
1,753
56,565
1,764
647
420
974
104,732'
785
9,550
878
1,031
12,530
l,333 r
375
6,407r
3,078'
803
667
1,945
2,473
2,664
1,757r
54,687'
1,742
548
521
958r
105,657
684
9,591
747
1,266
12,781
1,483
406
6,541
3,247
722
638
2,204
2,752
2,612
1,689
54,469
1,741
619
549
915
111,128
930
10,333
818
1,089
14,345
2,046
430
7,425
3,975
799
570
1,859
2,531
2,825
1,564
55,759
1,784
549
473
1,025
3 Europe
4
Austria
5 Belgium-Luxembourg
Denmark
6
Finland
7
8
France
Germany
9
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
U.S.S.R
22
Other Eastern Europe
23
24 Canada
16,109
16,482
20,958
20,177
19,294
18,450
18,596
18,441
21,525
21,402
207,862
11,050
58,009
592
26,315
38,205
6,839
3,499
0
2,420
158
252
34,885
1,350
7,707
2,384
1,088
11,017
2,091
202,674
11,462
58,258
499
25,283
38,881
6,603
3,249
0
2,390
194
224
31,799
1,340
6,645
1,947
960
10,871
2,067
208,832
12,104
59,342
418
25,703
46,306
6,562
2,826
0
2,449
140
198
30,660
1,039
5,436
1,661
940
11,112
1,938
209,524
12,129
62,634
740
26,006
43,592
6,412
2,686
9
2,381
120
189
30,125
1,175
5,771
1,601
957
11,086
1,910
204,272
12,335
58,314
592
25,690
44,355
6,321
2,650
9
2,372
115
184
30,055
1,045
4,730
1,599
962
11,044
1,900
201,887
12,256
56,463
300
25,493
43,782
6,328
2,649
0
2,354
109
182
30,293
1,344
4,977
1,565
950
10,956
1,884
200,885
12,158
53,034
387
25,992
44,755
6,500
2,743
0
2,396
107
268
31,141
1,083
4,633
1,567
949
11,306
1,868
202,602r
12,22l r
55,940'
359
26,586
43,486'
6,510
2,784
0
2,384
105
202
30,696'
992
4,616
1,549
966
11,366
1,839
214,657
11,857
65,286
328
26,050
47,512
6,469
2,729
0
2,367
124
198
30,542
1,041
4,579
1,479
946
11,308
1,840
217,255
12,106
64,140
423
25,747
51,715
6,374
2,731
0
2,443
131
191
30,093
1,232
4,420
1,457
961
11,198
1,892
66,316
66,212
96,070
88,738
89,534
87,903
86,515
91,901'
93,253
100,417
710
1,849
7,293
425
724
2,088
29,066
9,285
2,555
1,125
5,044
6,152
639
1,535
6,797
450
698
1,991
31,249
9,226
2,224
845
4,298
6,260
787
2,678
8,307
321
723
1,635
59,620
7,182
2,217
578
4,122
7,901
1,360
3,278
7,779
314
627
1,509
54,300
5,352
2,121
461
4,496
7,142
1,175
3,592
7,727
379
657
1,459
55,167
6,076
2,064
540
3,697
7,001
993
3,301
7,658
429
677
1,450
55,097
5,314
2,109
552
3,808
6,514
929
2,487
7,495
416
639
1,413
54,596
4,954
2,211
565
3,914
6,897
919
2,772
6,556
565
624
1,450
61,544'
4,589
2,148
545
4,315
5,875
894
2,980
6,891
539
621
1,591
60,121
4,583
2,126
452
4,848
7,607
548
4,219
6,888
562
591
1,331
65,777
4,983
2,082
443
5,063
7,930
57 Africa
Egypt
58
Morocco
59
South Africa
60
61
Zaire
62
Oil-exporting countries
Other
63
6,615
728
583
2,795
18
842
1,649
5,407
721
575
1,942
20
630
1,520
4,650
567
598
1,550
28
694
1,213
4,800
574
565
1,578
41
801
1,241
4,876
585
566
1,598
43
840
1,246
4,707
599
563
1,506
39
818
1,184
4,705
572
568
1,479
38
866
1,182
4,739
586
603
1,497
35
862
1,156
4,702
541
582
1,504
40
888
1,147
5,376
538
605
1,546
38
1,531
1,118
64 Other countries
Australia
65
All other
66
3,447
2,769
678
3,390
2,413
978
3,289
1,944
1,345
2,949
2,065
884
2,828
1,897
931
2,996
1,980
1,016
2,601
1,693
908
2,766
1,686
1,080
2,791
1,834
957
3,280
2,034
1,246
800
1,030
3,021
5,268
830
2,132
2,029
2,870'
4,519
2,562
25 Latin America and Caribbean
Argentina
26
Bahamas
27
Bermuda
28
Brazil
29
British West Indies
30
31
Chile
Colombia
32
Cuba
33
Ecuador
34
35
Guatemala 3
Jamaica 3
36
Mexico
37
38
Netherlands Antilles
Panama
39
Peru
40
41
Uruguay
42
Venezuela
Other Latin America and Caribbean
43
44 Asia
China
45
Mainland
Taiwan
46
Hong Kong
47
India
48
Indonesia
49
Israel
50
51
Japan
Korea
52
53
Philippines
Thailand
54
Middle East oil-exporting countries 4
55
Other Asia
56
67 Nonmonetary international and regional
organizations 6
f
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, the German
Democratic Republic, Hungary, Poland, and Romania.
3. Included in "Other Latin America and Caribbean" through March 1978.
4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
5. Comprises Algeria, Gabon, Libya, and Nigeria.
6. Excludes the Bank for International Settlements, which is included in
"Other Western Europe."
Nonbank-Reported
Data
3.19 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the
United States1
Payable in U.S. Dollars
Millions of dollars, end of period
1987
Type of claim
1984
1985
1986
Apr.
May
June
July
Aug/
Sept.
Oct."
1 Total
433,078
430,489
478,187
439,509
438,135
465,267
423,424
428,052
481,029
461,420
2
3
4
5
6
7
8
400,162
62,237
156,216
124,932
49,226
75,706
56,777
401,608
60,507
174,261
116,654
48,372
68,282
50,185
444,265
64,112
211,615
122,715
57,484
65,232
45,823
439,509
66,942
207,042
120,926
57,450
63,476
44,599
438,135
62,788
203,682
127,155
61,659
65,495
44,511
432,208
63,512
199,273
125,148
60,447
64,701
44,275
423,424
64,778
189,797
123,888
59,655
64,233
44,961
428,052
65,620
197,529
121,881
56,882
64,999
43,021
447,103
66,907
210,330
127,061
59,744
67,317
42,805
461,420
64,691
219,678
133,493
62,882
70,611
43,559
32,916
3,380
28,881
3,335
33,922
4,413
33,059
3,474
33,925
3,218
23,805
19,332
24,044
21,384
22,071
5,732
6,214
5,465
8,202
8,636
37,103
28,487
25,631
23,731
21,778
40,714
38,102
42,129
Banks' own claims on foreigners
Foreign public borrowers
Own foreign offices
Unaffiliated foreign banks
Deposits
Other
All other foreigners
9 Claims of banks' domestic customers 3 ...
11 Negotiable and readily transferable
12 Outstanding collections and other
13 MEMO: Customer liability on
Dollar deposits in banks abroad,
reported by nonbanking business
enterprises in the United States 5 . . . .
45,521
44,860
38,046
40,203
40,627
39,442
n.a.
3. 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.
4. Principally negotiable time certificates of deposit and bankers acceptances.
5. Includes demand and time deposits and negotiable and nonnegotiable
certificates of deposit denominated in U.S. dollars issued by banks abroad. For
description of changes in data reported by nonbanks, see July 1979 BULLETIN,
p. 550.
1. Data for banks' own claims are given on a monthly basis, but the data for
claims of banks' own domestic customers are available on a quarterly basis only.
2. 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 majority-owned subsidiaries of
foreign banks: principally amounts due from head office or parent foreign bank,
and foreign branches, agencies, or wholly owned subsidiaries of head office or
parent foreign bank.
3.20 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States
Payable in U.S. Dollars
Millions of dollars, end of period
1986
Maturity; by borrower and area
1 Total
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
By borrower
Maturity of 1 year or less 1
Foreign public borrowers
All other foreigners
Maturity over 1 year 1
Foreign public borrowers
All other foreigners
By area
Maturity of 1 year or less 1
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other 2
Maturity of over 1 year
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other 2
1. Remaining time to maturity.
1983
1984
1987
1985
Dec.
Mar.
June
Sept."
243,715
243,952
227,903
231,433
226,760
235,320
235,360
176,158
24,039
152,120
67,557
32,521
35,036
167,858
23,912
143,947
76,094
38,695
37,399
160,824
26,302
134,522
67,078
34,512
32,567
159,790
24,723
135,068
71,643
39,898
31,745
155,239
23,496
131,743
71,521
40,718
30,803
166,260
23,290
142,970
69,060
39,465
29,594
164,941
26,901
138,039
70,419
39,782
30,637
56,117
6,211
73,660
34,403
4,199
1,569
58,498
6,028
62,791
33,504
4,442
2,593
56,585
6,401
63,328
27,966
3,753
2,791
61,346
5,845
56,174
29,291
2,882
4,252
58,001
5,559
54,321
30,969
3,148
3,240
68,141
5,552
55,326
30,875
2,980
3,385
61,732
5,653
58,023
32,064
2,877
4,591
13,576
1,857
43,888
4,850
2,286
1,101
9,605
1,882
56,144
5,323
2,033
1,107
7,634
1,805
50,674
4,502
1,538
926
6,851
1,930
56,415
4,120
1,539
787
6,764
1,873
56,540
4,151
1,630
564
6,422
1,631
55,524
3,340
1,522
621
6,805
1,577
55,097
3,535
1,612
1,793
2. Includes nonmonetary international and regional organizations.
A61
A62
International Statistics • February 1988
3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks1-2
Billions of dollars, end of period
1985
Area or country
1983
1986
1987
1984
Sept.
Dec.
Mar.
June
Sept.
Dec.
Mar.
June
Sept.
433.9
405.7
394.9
391.9
393.7
390.3
389.8
390.0
399.3r
388.3r
392.2
167.8
12.4
16.2
11.3
11.4
3.5
5.1
4.3
65.3
8.3
29.9
148.1
8.7
14.1
9.0
10.1
3.9
3.2
3.9
60.3
7.9
27.1
152.0
9.5
14.8
9.8
8.4
3.4
3.1
4.1
67.1
7.6
24.3
148.5
9.3
12.3
10.5
9.8
3.7
2.8
4.4
64.6
7.0
24.2
156.9
8.4
13.8
11.3
8.5
3.5
2.9
5.4
68.8
6.4
28.0
160.1
9.0
15.1
11.5
9.3
3.4
2.9
5.6
69.2
6.9
27.2
158.9
8.5
14.7
12.5
8.1
3.9
2.7
4.8
70.3
6.1
27.4
157.6
8.4
13.8
11.7
9.0
4.6
2.4
5.5
71.9
5.4
25.0
165.1
9.1
13.4
12.8
8.6
4.4
3.0
5.8
74.3
5.2
28.5
158.8
8.5
12.6
11.3
7.5
7.3
2.4
5.7
72.4
4.6
26.4
156.4
8.2
13.8
10.6
6.7
4.8
2.7
5.4
71.9
4.7
27.7
13 Other developed countries
14
Austria
15
Denmark
16 Finland
17 Greece
18 Norway
19 Portugal
20
Spain
21
Turkey
22
Other Western Europe
23
South Africa
24
Australia
36.0
1.9
3.4
2.4
2.8
3.3
1.5
7.1
1.7
1.8
4.7
5.4
33.6
1.6
2.2
1.9
2.9
3.0
1.4
6.5
1.9
1.7
4.5
6.0
32.0
1.7
2.1
1.8
2.8
3.4
1.4
6.1
2.1
1.7
3.3
5.6
30.4
1.6
2.4
1.6
2.6
2.9
1.3
5.8
1.9
2.0
3.2
5.0
31.6
1.6
2.5
1.9
2.5
2.7
1.1
6.5
2.3
2.4
3.2
4.9
30.7
1.7
2.4
1.6
2.6
3.0
1.1
6.4
2.5
2.1
3.1
4.2
29.5
1.7
2.3
1.7
2.3
2.7
1.0
6.7
2.1
1.6
3.1
4.1
26.1
1.7
1.7
1.4
2.3
2.4
.8
5.8
2.0
1.4
3.1
3.5
26.0
1.9
1.7
1.4
2.1
2.2
.9
6.3
1.9
1.4
3.1
3.2
25.7
1.8
1.6
1.5
2.0
2.2
.8
6.0
2.1
1.5
3.1
3.1
26.9
1.9
1.6
1.4
1.9
2.4
.8
7.4
1.9
1.7
3.0
2.9
25 OPEC countries 3
26
Ecuador
27
Venezuela
28
Indonesia
29
Middle East countries
30
African countries
28.4
2.2
9.9
3.4
9.8
3.0
24.9
2.2
9.3
3.3
7.9
2.3
22.7
2.2
9.0
3.1
6.2
2.3
21.6
2.1
8.9
3.0
5.5
2.0
20.7
2.2
8.7
3.3
4.7
1.8
20.6
2.1
8.8
3.0
5.0
1.7
20.0
2.2
8.7
2.8
4.6
1.7
19.6
2.2
8.6
2.5
4.5
1.7
20.4
2.1
8.7
2.4
5.5
1.7
19.2
2.1
8.7
2.2
4.5
1.7
19.3
2.1
8.5
2.0
5.1
1.7
1 Total
2 G-10 countries and Switzerland
3
Belgium-Luxembourg
4
France
5 Germany
6
Italy
7
Netherlands
Sweden
8
9
Switzerland
10 United Kingdom
11 Canada
12 Japan
31 Non-OPEC developing countries
110.8
111.8
107.8
105.1
103.9
102.0
100.0
99.7
100.2
100.1
97.3
32
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other Latin America
9.5
23.1
6.4
3.2
25.8
2.4
4.2
8.7
26.3
7.0
2.9
25.7
2.2
3.9
8.9
25.5
6.6
2.6
24.4
1.9
3.5
8.9
25.6
7.0
2.7
24.2
1.8
3.4
8.9
25.8
7.0
2.3
24.1
1.7
3.3
9.2
25.5
7.1
2.2
24.0
1.6
3.3
9.3
25.4
7.2
2.0
24.0
1.5
3.3
9.5
25.3
7.1
2.1
23.9
1.5
3.1
9.6
25.6
7.3
2.0
23.9
1.4
3.0
9.5
24.5
7.2
2.0
25.3
1.4
2.9
9.3
24.6
7.1
2.0
24.7
1.2
2.8
39
40
41
42
43
44
45
46
47
Asia
China
Mainland
Taiwan
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia
.3
5.2
.9
1.9
11.2
2.8
6.1
2.2
1.0
.7
5.1
.9
1.8
10.6
2.7
6.0
1.8
1.1
1.1
5.1
1.1
1.5
10.4
2.7
6.0
1.7
.9
.5
4.5
1.2
1.6
9.4
2.4
5.7
1.4
1.0
.6
4.3
1.2
1.3
9.5
2.2
5.6
1.3
.9
.6
3.7
1.3
1.6
8.7
2.0
5.7
1.1
.8
.6
4.3
1.3
1.4
7.3
2.1
5.4
1.0
.7
.4
4.9
1.2
1.5
6.7
2.1
5.4
.9
.7
.9
5.5
1.7
1.4
6.3
1.9
5.4
.9
.6
.6
6.6
1.7
1.3
5.6
1.7
5.4
.8
.8
.3
5.9
1.9
1.3
5.1
1.6
5.4
.7
.7
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa 4
1.5
.8
.1
2.3
1.2
.8
.1
2.1
1.0
.9
.1
2.0
1.0
.9
.1
1.9
.9
.9
.1
1.9
.9
.9
.1
1.7
.7
.9
.1
1.6
.7
.9
.1
1.6
.6
.9
.1
1.4
.6
.9
.1
1.3
.6
.8
.1
1.3
52 Eastern Europe
53
U.S.S.R
54
Yugoslavia
55
Other
5.3
.2
2.4
2.8
4.4
.1
2.3
2.0
4.6
.2
2.4
1.9
4.2
.1
2.2
1.8
4.0
.3
2.0
1.7
4.0
.3
2.0
1.7
3.4
.1
1.9
1.4
3.2
.1
1.7
1.4
3.1
.1
1.6
1.3
3.4
.3
1.7
1.4
3.4
.5
1.7
1.3
56 Offshore banking centers
57
Bahamas
58
Bermuda
59
Cayman Islands and other British West Indies
60
Netherlands Antilles
61
Panama
62
Lebanon
63
Hong Kong
64
Singapore
65
Others 6
68.9
21.7
.9
12.2
4.2
5.8
.1
13.8
10.3
.0
65.6
21.5
.9
11.8
3.4
6.7
.1
11.4
9.8
.0
58.8
16.6
.8
12.3
2.3
6.1
.0
11.4
9.4
.0
65.4
21.4
.7
13.4
2.3
6.0
.1
11.5
9.9
.0
60.1
21.4
.7
11.4
2.3
4.4
.1
11.5
8.5
.0
56.2
17.1
.5
13.0
2.3
4.2
.1
9.5
9.3
.0
60.9
19.9
.4
13.2
1.9
5.1
.1
10.5
9.7
.0
64.0
22.3
.7
14.5
1.8
4.1
.1
11.2
9.4
.0
66.V
24. l r
.8
13.6
1.7
5.4
.1
11.5
8.8
.0
63. or
19.8r
.6
15.0
1.3
5.3
.1
12.5
8.4
.0
67.4
26.4
.6
13.2
1.2
5.3
.1
12.3
8.3
.0
66 Miscellaneous and unallocated 7
16.8
17.3
17.3
16.9
16.4
16.8
17.2
19.8
18.6
18.1
21.4
1. The banking offices covered by these data are the U.S. offices and foreign
branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks.
Offices not covered include (1) U.S. agencies and branches of foreign banks, and
(2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are
adjusted to exclude the claims on foreign branches held by a U.S. office or another
foreign branch of the same banking institution. The data in this table combine
foreign branch claims in table 3.14 (the sum of lines 7 through 10) with the claims
of U.S. offices in table 3.18 (excluding those held by agencies and branches of
foreign banks and those constituting claims on own foreign branches).
2. Beginning with June 1984 data, reported claims held by foreign branches
have been reduced by an increase in the reporting threshold for "shell" branches
from $50 million to $150 million equivalent in total assets, the threshold now
applicable to all reporting branches.
3. This group comprises the Organization of Petroleum Exporting Countries
shown individually, other members of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait,
Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates), and Bahrain and
Oman (not formally members of OPEC).
4. Excludes Liberia.
5. Includes Canal Zone beginning December 1979.
6. Foreign branch claims only.
7. Includes New Zealand, Liberia, and international and regional organizations.
Nonbank-Reported
Data
A63
3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the
United States1
Millions of dollars, end of period
1986
Type, and area or country
1983
1984
1987
1985
June
Sept.
Dec.
Mar.
June'
1 Total
25,346
29,357
27,685
25,126
26,117
25,478
27,020
28,295
2 Payable in dollars
3 Payable in foreign currencies
22,233
3,113
26,389
2,968
24,296
3,389
21,440
3,686
22,278
3,839
21,759
3,719
21,611
5,408
23,833
4,463
By type
4 Financial liabilities
5
Payable in dollars
Payable in foreign currencies
6
10,572
8,700
1,872
14,509
12,553
1,955
13,460
11,257
2,203
11,808
9,717
2,091
13,219
10,947
2,272
12,140
9,782
2,358
12,997
10,397
2,600
13,513
10,635
2,878
7 Commercial liabilities
8
Trade payables
Advance receipts and other liabilities . .
9
14,774
7,765
7,009
14,849
7,005
7,843
14,225
6,685
7,540
13,318
5,670
7,648
12,899
5,723
7,175
13,338
6,357
6,981
14,023
6,813
7,210
14,782
7,116
7,666
13,533
1,241
13,836
1,013
13,039
1,186
11,723
1,595
11,331
1,567
11,977
1,361
11,215
2,808
13,198
1,585
6,728
471
995
489
590
569
3,297
7,560
329
857
434
745
620
4,254
7,126
390
686
280
635
505
4,333
8,625
424
501
319
708
537
5,705
7,917
245
644
270
704
615
5,148
8,258
205
742
368
693
678
5,312
9,212
257
807
305
669
703
6,209
10
11
12
13
14
15
16
17
18
Payable in dollars
Payable in foreign currencies
By area or country
Financial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
5,742
302
843
502
621
486
2,839^,
19
Canada
764
863
839
367
362
399
431
441
20
21
22
23
24
25
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,596
751
13
32
1,041
213
124
5,086
1,926
13
35
2,103
367
137
3,184
1,123
4
29
1,843
15
3
2,463
854
14
27
1,426
30
3
2,283
842
4
28
1,291
18
5
1,964
614
4
32
1,163
22
3
2,369
669
0
26
1,545
30
3
1,747
398
0
22
1,223
29
5
27
28
29
Asia
Japan
Middle East oil-exporting countries 2 .
1,424
991
170
1,777
1,209
155
1,815
1,198
82
1,735
1,264
43
1,881
1,446
3
1,792
1,377
8
1,869
1,459
7
2,046
1,666
7
30
Africa
19
0
14
0
12
0
12
0
4
2
1
1
3
1
1
0
27
41
50
104
63
67
67
66
3,245
62
437
427
268
241
732
4,001
48
438
622
245
257
1,095
4,074
62
453
607
364
379
976
3,817
58
358
561
586
284
864
4,367
75
370
637
613
361
1,138
4,457
100
340
722
493
385
1,301
4,383
85
278
589
372
484
1,287
4,972
111
419
593
339
557
1,370
1,841
31
32
33
34
35
36
37
38
39
40
Oil-exporting countries 3
All other 4
Commercial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
1,975
1,449
1,367
1,312
1,389
1,350
1,252
41
42
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,473
1
67
44
6
585
432
1,871
7
114
124
32
586
636
1,088
12
77
58
44
430
212
1,242
10
294
45
35
235
488
846
37
172
43
45
197
207
873
32
129
59
48
211
215
1,075
28
296
81
88
182
223
1,032
13
244
88
64
159
203
48
49
50
Asia
Japan
Middle East oil-exporting countries 2 '
6,741
1,247
4,178
5,285
1,256
2,372
6,046
1,799
2,829
5,273
2,100
1,985
4,807
2,136
1,492
5,020
2,047
1,668
5,681
2,437
1,931
5,921
2,480
1,870
51
52
Africa
Oil-exporting countries 3
553
167
588
233
587
238
567
215
585
176
622
196
520
170
523
166
53
All other 4
921
1,128
982
1,053
982
977
1,014
1,083
1. For a description of the changes in the International Statistics tables, see
July 1979 BULLETIN, p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
5. Revisions include a reclassification of transactions, which also affects the
totals for Asia and the grand totals.
A64
International Statistics • February 1988
3.23 CLAIMS ON UNAFFILIATED FOREIGNERS
United States1
Reported by Nonbanking Business Enterprises in the
Millions of dollars, end of period
1986
Type, and area or country
1984
1983
1987
1985
June
Sept.
Dec.
Mar.
June'
1 Total
34,911
29,901
28,760
33,851
34,007
33,292
33,778
31,279
2 Payable in dollars
3 Payable in foreign currencies
31,815
3,096
27,304
2,597
26,457
2,302
31,669
2,182
31,302
2,706
30,771
2,521
30,716
3,062
28,180
3,099
By type
4 Financial claims
5
Deposits
Payable in dollars
6
7
Payable in foreign currencies
8
Other financial claims
9
Payable in dollars
Payable in foreign currencies
10
23,780
18,496
17,993
503
5,284
3,328
1,956
19,254
14,621
14,202
420
4,633
3,190
1,442
18,774
15,526
14,911
615
3,248
2,213
1,035
24,709
21,401
20,846
555
3,308
2,287
1,021
24,795
18,986
18,422
565
5,808
4,435
1,374
23,461
18,018
17,461
556
5,444
4,089
1,354
24,192
18,142
17,315
827
6,050
4,700
1,350
21,540
15,398
14,214
1,183
6,143
4,868
1,275
11 Commercial claims
12 Trade receivables
13 Advance payments and other claims
11,131
9,721
1,410
10,646
9,177
1,470
9,986
8,696
1,290
9,142
7,802
1,341
9,213
8,030
1,183
9,831
8,680
1,151
9,586
8,579
1,007
9,739
8,696
1,043
14
15
10,494
637
9,912
735
9,333
652
8,537
606
8,445
767
9,220
611
8,701
886
9,098
641
6,488
37
150
163
71
38
5,817
5,762
15
126
224
66
66
4,864
6,812
10
184
223
61
74
6,007
10,144
11
257
148
17
167
9,328
10,501
67
418
129
44
138
9,478
8,759
41
138
111
86
182
7,957
9,342
15
172
163
69
74
8,496
9,814
6
154
92
75
95
9,192
16
17
18
19
20
21
22
Payable in dollars
Payable in foreign currencies
By area or country
Financial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
23
Canada
24
25
26
27
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
31
32
33
34
35
36
37
38
39
40
41
42
43
5,989
3,988
3,260
4,422
3,970
4,063
3,873
3,329
10,234
4,771
102
53
4,206
293
134
8,216
3,306
6
100
4,043
215
125
7,846
2,698
6
78
4,571
180
48
9,258
3,315
17
75
5,402
176
42
9,438
2,807
19
105
6,060
173
40
9,208
2,624
6
73
6,078
174
24
9,548
3,945
3
71
5,128
164
23
7,539
2,572
6
103
4,349
167
22
Asia
Japan
Middle East oil-exporting countries 2
764
297
4
961
353
13
731
475
4
776
499
2
715
365
2
1,323
1,001
11
1,205
941
11
785
445
10
Africa
Oil-exporting countries 3
147
55
210
85
103
29
89
25
84
18
85
28
84
19
58
9
159
117
21
20
86
22
140
16
3,670
135
459
349
334
317
809
3,801
165
440
374
335
271
1,063
3,533
175
426
346
284
284
898
3,304
131
391
418
230
228
674
3,385
126
415
405
184
233
853
3,665
133
395
441
200
215
926
3,612
143
411
444
163
193
1,012
3,808
136
434
530
182
186
1,040
All other
4
Commercial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
44
Canada
829
1,021
1,023
965
950
919
909
922
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,695
8
190
493
7
884
272
2,052
8
115
214
7
583
206
1,753
13
93
206
6
510
157
1,611
24
148
193
29
323
181
1,687
29
132
207
23
316
192
1,880
28
158
236
48
391
224
1,797
11
130
211
22
415
157
1,757
14
126
200
14
326
190
52
53
54
Asia
Japan
Middle East oil-exporting countries 2
3,063
1,114
737
3,073
1,191
668
2,982
1,016
638
2,574
845
622
2,487
792
600
2,653
862
509
2,604
914
467
2,613
945
454
55
56
Africa
Oil-exporting countries 3
588
139
470
134
437
130
450
170
469
168
494
135
431
141
378
123
286
229
257
237
234
220
233
261
57
All other
4
1. For a description of the changes in the International Statistics tables, see
July 1979 BULLETIN, p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
Securities Holdings and Transactions
A65
3.24 FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
1987
Transactions, and area or country
1985
1987
1986
Jan.Oct.
Apr.
May
June
July
Aug.
Sept.
Oct. p
U.S. corporate securities
STOCKS
1
2
Foreign purchases
Foreign sales
81,995
77,054
148,101
129,382
221,545
195,611
20,735
17,390
19,632
15,956
18,682
17,054
23,645
21,883
24,774
24,554
22,464
19,433
30,206
27,779
3
Net purchases, or sales ( - )
4,941
18,719
25,933
3,345
3,676
1,628
1,763
220
3,031
2,427
4
Foreign countries
4,857
18,927
25,873
3,282
3,711
1,673
1,749
117
2,942
2,413
5
6
7
8
9
10
11
12
13
14
15
16
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Africa
Other countries
2,057
-438
730
-123
-75
1,665
356
1,718
238
296
24
168
9,559
459
341
936
1,560
4,826
817
3,030
976
3,876
297
373
10,140
1,844
259
1,028
1,154
4,876
815
1,920
-841
13,084
118
637
1,060
332
-101
124
306
211
252
36
21
1,790
59
65
1,474
123
118
120
351
670
48
363
-90
1,686
45
185
669
107
-155
232
-206
671
-238
290
-26
1,009
-30
-1
717
66
-96
153
-80
635
255
387
-913
1,290
-14
27
81
-69
28
135
-325
125
-21
188
-255
171
16
-63
1,303
-15
-12
79
-435
761
-46
157
135
1,242
20
132
138
58
381
-40
294
-625
238
-513
558
2,014
7
-30
17
Nonmonetary international and
regional organizations
84
-208
60
62
-36
-45
14
102
90
15
BONDS2
18
19
Foreign purchases
Foreign sales
86,587
42,455
123,149
72,499
93,135
67,263
9,857
6,559
8,963
6,823
10,364
8,305
9,407
6,509
7,027'
5,638'
8,652
4,844
9,125
7,245
20
Net purchases, or sales (—)
44,132
50,650
25,872
3,297
2,140
2,060
2,898
1,389'
3,809
1,880
21
Foreign countries
44,227
49,803
25,817
3,107
2,270
1,968
2,889
l,548 r
3,769
1,871
22
73
74
75
76
77
78
29
30
31
37
33
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Africa
Other countries
40,047
210
2,001
222
3,987
32,762
190
498
-2,648
6,091
11
38
39,323
389
-251
387
4,529
33,902
548
1,468
-2,961
11,270
16
139
21,131
242
1
284
1,894
18,725
1,115
2,216
-440
1,889
23
-27
2,833
-22
-121
47
50
2,809
161
123
62
-73
1
0
1,682
7
-29
38
182
1,544
23
254
59
252
7
-6
2,204
43
80
37
105
1,795
49
-4
-128
-169
8
8
2,346
65
116
-65
247
1,913
87
305
-166
300
1
15
1,616'
26
-22
44
306'
1,317'
-8
44'
-14
-93
-17
20
3,140
-37
-56
116
166
2,819
47
624
-87
52
-6
-1
930
55
-98
36
136
1,020
305
513
42
65
24
-9
34
Nonmonetary international and
regional organizations
-95
847
55
190
-130
92
9
40
10
-159
Foreign securities
35
36
37
Stocks, net purchases, or sales ( - )
Foreign purchases
Foreign sales
-3,941
20,861
24,803
-1,912
48,787
50,699
-285
81,695
81,980
-1,174
7,124
8,297
636
8,016
7,379
-257
8,778
9,035
-11
8,583
8,593
-373'
8,674'
9,047
448
8,657
8,208
1,995
12,768
10,774
38
39
40
Bonds, net purchases, or sales ( - )
Foreign purchases
Foreign sales
-3,999
81,216
85,214
-3,356
166,786
170,142
-4,102
168,136
172,238
-581
19,020
19,601
-1,117
20,049
21,166
2,281
25,799
23,518
-586
16,314
16,900
-235'
12,292'
12,527'
-668
12,923
13,591
-2,807
17,842
20,649
41
Net purchases, or sales ( - ) , of stocks and bonds
-7,940
-5,268
-4,387
-1,755
-481
2,024
-597
-608'
-220
-813
42
Foreign countries
-9,003
-6,352
-4,946
-1,889
-499
1,980
-323
-1,202'
-540
-46
43
44
45
46
47
48
Europe
Canada
Latin America and Caribbean
-9,887
-1,686
1,797
659
75
38
-17,893
-875
3,484
10,858
52
-1,977
-9,829
-3,714
496
8,943
77
-919
-2,704
-3
259
637
8
-86
-1,990
-418
204
1,692
20
-8
-31
-489
106
2,513
6
-124
-568
-596
-62
1,079
5
-182
-890'
-484
83'
224
5
-140
-504
-263
-20
82
14
150
-944
-275
-152
1,333
16
-25
49
Nonmonetary international and
regional organizations
1,063
1,084
559
135
18
44
-274
594
320
-767
Africa
Other countries
1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait,
Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States).
2. Includes state and local government securities, and securities of U.S.
government agencies and corporations. Also includes issues of new debt securi-
ties sold abroad by U.S. corporations organized to finance direct investments
abroad.
A66
International Statistics • February 1988
3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES
Foreign Transactions
Millions of dollars
1987
Country or area
1985
1987
1986
Jan.Oct.
Apr.
May
June
July
Aug.
Sept.
Oct."
Transactions, net purchases or sales ( - ) during period 1
1 Estimated total 2
29,208
20,117
17,550
-2,985
-281
12,279
878
1,110
758
-934
2 Foreign countries 2
28,768
21,220
19,740
-1,405
3,731
8,646
3,680
2,787
939
-5,193
4,303
476
1,917
269
976
773
-1,810
1,701
0
-188
17,056
349
7,670
1,283
132
329
4,681
2,613
0
881
16,461
787
10,353
-903
0
2,737
-241
3,749
-22
3,136
375
-35
1,106
-22
32
652
-1,089
-230
-40
703
1,695
4
1,417
352
-166
413
-524
198
1
37
3,640
58
1,534
111
-183
585
617
913
5
413
4,519
54
1,516
204
76
512
1,115
1,042
0
654
-1,007
366
780
-254
-153
-688
-431
-631
4
378
-937
-25
130
-50
-156
-99
-1,001
258
5
203
-789
128
31
-707
4
-617
-469
841
0
-389
4,315
248
2,336
1,731
19,919
17,909
112
308
926
-95
1,129
-108
1,345
-22
-54
1,067
-2,314
114
-1,636
-792
111
-2,901
-36
1,715
-30
14
-176
133
-2,880
-2,561
-15
442
-381
11
-302
-90
2,136
-541
11
233
780
-17
-514
1,311
3,531
4,199
-18
300
-673
-4
15
-684
-671
-597
20
-168
-675
30
-49
-656
4,318
1,839
-24
-204
-29
55
-155
72
1,767
799
3
-68
52
-63
-227
341
-5,332
-5,272
2
1,263
442
-436
18
-1,102
-1,430
157
-2,190
-1,074
3
-1,580
-1,342
0
-4,013
-3,147
0
3,633
3,515
3
-2,802
-2,875
0
-1,677
-1,722
0
-180
111
-10
4,258
4,319
0
28,768
8,135
20,631
21,220
14,214
7,010
19,740
27,492
-7,753
-1,405
2,489
-3,894
3,731
4,447
-715
8,646
3,719
4,927
3,680
2,251
1,428
2,787
2,612
175
939
1,360
-421
-5,193
2,453
-7,645
-1,547
7
-1,529
5
-2,583
18
-120
0
636
0
-857
1
112
0
329
0
-509
0
-695
-1
3 Europe 2
4
Belgium-Luxembourg
5 Germany
Netherlands
6
7
Sweden
8
Switzerland 2
9
United Kingdom
10 Other Western Europe
Eastern Europe
11
12 Canada
13 Latin America and Caribbean
14
Venezuela
15 Other Latin America and Caribbean
16 Netherlands Antilles
17
18 Japan
19
20 All other
21 Nonmonetary international and regional organizations
22
International
23
Latin American regional
Memo
24 Foreign countries 2
25
Official institutions
26
Other foreign 2
27
28
Oil-exporting countries
Middle East 3
Africa 4
1. Estimated official and private transactions in marketable U.S. Treasury
securities with an original maturity of more than 1 year. Data are based on
monthly transactions reports. Excludes nonmarketable U.S. Treasury bonds and
notes held by official institutions of foreign countries.
2. Includes U.S. Treasury notes publicly issued to private foreign residents
denominated in foreign currencies.
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
Interest and Exchange Rates
A67
3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS
Percent per annum
Rate on Nov. 30, 1987
Rate on Nov. 30, 1987
Rate on Nov. 30, 1987
Country
Country
Percent
Month
effective
3.5
7.25
49.0
8.48
7.0
Jan. 1987
July 1987
Mar. 1981
Nov. 1987
Oct. 1983
Austria..
Belgium .
Brazil . . .
Canada..
Denmark
Country
France
Germany, Fed. Rep. of.
Italy
Japan
Netherlands
1. As of the end of February 1981, the rate is that at which the Bank of France
discounts Treasury bills for 7 to 10 days.
2. Minimum lending rate suspended as of Aug. 20, 1981.
NOTE. Rates shown are mainly those at which the central bank either discounts
Percent
Month
effective
8.0
3.0
12.0
2.5
4.0
Nov. 1987
Jan. 1987
Aug. 1987
Feb. 1987
Nov. 1987
Norway
Switzerland
,
United Kingdom'
Venezuela
Percent
Month
effective
8.0
3.0
June 1983
Nov. 1987
8.0
Oct. 1985
or makes advances against eligible commercial paper and/or government commercial banks or brokers. For countries with more than one rate applicable to
such discounts or advances, the rate shown is the one at which it is understood the
central bank transacts the largest proportion of its credit operations.
3.27 FOREIGN SHORT-TERM INTEREST RATES
Percent per annum, averages of daily figures
1987
Country, or type
1
2
3
4
5
6
7
8
9
10
1984
1985
1986
May
June
July
Aug.
Sept.
Oct.
Nov.
Eurodollars
United Kingdom
Canada
Germany
Switzerland
10.75
9.91
11.29
5.96
4.35
8.27
12.16
9.64
5.40
4.92
6.70
10.87
9.18
4.58
4.19
7.25
8.79
8.22
3.73
3.63
7.11
8.85
8.40
3.67
3.77
6.87
9.17
8.61
3.83
3.60
6.91
9.95
9.11
3.93
3.55
7.51
10.12
9.32
3.98
3.51
8.29
9.92
9.12
4.70
4.03
7.41
8.87
8.70
3.92
3.65
Netherlands
France
Italy
Belgium
Japan
6.08
11.66
17.08
11.41
6.32
6.29
9.91
14.86
9.60
6.47
5.56
7.68
12.60
8.04
4.96
5.11
8.09
10.15
7.13
3.77
5.15
8.18
10.67
6.78
3.71
5.21
7.83
10.92
6.54
3.74
5.27
7.88
11.96
6.55
3.71
5.31
7.85
12.36
6.56
3.77
5.63
8.15
11.85
6.84
3.89
4.99
8.66
11.36
6.93
3.90
NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate.
A68
International Statistics • February 1988
3.28 FOREIGN EXCHANGE RATES
Currency units per dollar
1987
1984
Country/currency
1
2
3
4
5
6
Australia/dollar 1
Austria/schilling
Belgium/franc
Canada/dollar
China, P.R./yuan
Denmark/krone
7
8
9
10
11
12
13
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
Hong Kong/dollar
India/rupee
Ireland/punt 1
14
15
16
17
18
19
20
Italy/lira
Japan/yen
Malay sia/ringgit
Netherlands/guilder
New Zealand/dollar 1
Norway/krone
Portugal/escudo
21
22
23
24
25
26
27
28
29
30
Singapore/dollar
South Africa/rand 1
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
United Kingdom/pound 1
1985
1986
June
July
Aug.
Sept.
Oct.
Nov.
87.937
20.005
57.749
1.2953
2.3308
10.354
70.026
20.676
59.336
1.3658
2.9434
10.598
67.093
15.260
44.662
1.3896
3.4615
8.0954
71.79
12.793
37.712
1.338
3.7314
6.8555
70.79
12.996
38.329
1.3262
3.7314
7.0179
70.72
13.041
38.528
1.3256
3.7314
7.1279
72.68
12.765
37.657
1.3154
3.7314
6.9893
71.12
12.674
37.494
1.3097
3.7314
6.9262
68.60
11.843
35.190
1.3167
3.7314
6.4962
6.0007
8.7355
2.8454
112.73
7.8188
11.348
108.64
6.1971
8.9799
2.9419
138.40
7.7911
12.332
106.62
5.0721
6.9256
2.1704
139.93
7.8037
12.597
134.14
4.4281
6.0739
1.8189
136.06
7.8080
12.837
147.25
4.4882
6.1530
1.8482
139.313
7.8090
13.01
144.99
4.5017
6.1934
1.8553
140.63
7.8091
13.085
144.18
4.3954
6.0555
1.8134
138.40
7.8035
12.993
147.54
4.3570
6.0160
1.8006
138.61
7.8077
12.995
148.72
4.1392
5.7099
1.6821
132.42
7.7968
12.972
158.08
1756.10
237.45
2.3448
3.2083
57.837
8.1596
147.70
1908.90
238.47
2.4806
3.3184
49.752
8.5933
172.07
1491.16
168.35
2.5830
2.4484
52.456
7.3984
149.80
1316.50
144.55
2.5078
2.0490
58.686
6.7147
142.12
1337.96
150.29
2.5414
2.0814
59.644
6.7632
144.51
1344.18
147.33
2.5361
2.0903
58.923
6.7911
145.57
1310.86
143.29
2.5189
2.0413
63.352
6.6505
142.94
1302.58
143.32
2.5308
2.0267
64.031
6.6311
142.82
1238.89
135.40
2.4989
1.8931
61.915
6.4233
136.84
2.1325
69.534
807.91
160.78
25.428
8.2706
2.3500
39.633
23.582
133.66
2.2008
45.57
861.89
169.98
27.187
8.6031
2.4551
39.889
27.193
129.74
2.1782
43.952
884.61
140.04
27.933
7.1272
1.7979
37.837
26.314
146.77
2.1176
49.41
818.39
126.33
29.171
6.3482
1.5085
31.226
25.779
162.88
2.1183
48.52
811.81
126.97
29.405
6.4466
1.5365
31.114
26.041
160.90
2.1082
48.16
811.87
125.57
29.643
6.4898
1.5364
30.290
25.926
159.96
2.0924
48.86
810.07
121.34
29.902
6.3844
1.5029
30.151
25.765
164.46
2.0891
48.79
808.47
118.60
30.347
6.3560
1.4940
30.036
25.783
166.20
2.0444
50.67
802.30
113.26
30.519
6.0744
1.3825
29.813
25.495
177.54
138.19
143.01
112.22
97.78
99.36
99.43
97.23
96.65
91.49
MEMO
31 United States/dollar 2
1. Value in U.S. cents.
2. Index of weighted-average exchange value of U.S. dollar against the
currencies of 10 industrial countries. The weight for each of the 10 countries is the
1972-76 average world trade of that country divided by the average world trade of
all 10 countries combined. Series revised as of August 1978 (see FEDERAL
RESERVE BULLETIN, v o l . 6 4 , A u g u s t 1978, p . 700).
3. Currency reform.
NOTE. Averages of certified noon buying rates in New York for cable transfers.
Data in this table also appear in the Board's G.5 (405) release. For address, see
inside front cover.
A69
Guide to Tabular Presentation,
Statistical Releases, and Special Tables
GUIDE
TO TABULAR
PRESENTATION
Symbols and Abbreviations
c
e
p
r
*
Corrected
Estimated
Preliminary
Revised (Notation appears on column heading when
about half of the figures in that column are changed.)
Amounts insignificant in terms of the last decimal place
shown in the table (for example, less than 500,000
when the smallest unit given is millions)
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
General 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) as well as direct
STATISTICAL
obligations of the Treasury. "State and local government"
also includes municipalities, special districts, and other political subdivisions.
In some of the tables details do not add to totals because of
rounding.
RELEASES
List Published Semiannually, with Latest Bulletin Reference
Anticipated schedule of release dates for periodic releases
SPECIAL
Issue
Page
December 1987
A77
July
July
October
February
May
August
November
February
February
May
September
January
November
February
A70
A76
A70
A70
A76
A70
A70
A76
A70
A70
A70
A70
A74
A80
TABLES
Published Irregularly, with Latest Bulletin Reference
Assets and liabilities of commercial banks, September 30, 1986
Assets and liabilities of commercial banks, December 31, 1986
Assets and liabilities of commercial banks, March 31, 1987
Assets and liabilities of commercial banks, June 30, 1987
Assets and liabilities of U.S. branches and agencies of foreign banks, December 31, 1986
Assets and liabilities of U.S. branches and agencies of foreign banks, March 31, 1987
Assets and liabilities of U.S. branches and agencies of foreign banks, June 30, 1987
Assets and liabilities of U.S. branches and agencies of foreign banks, September 30, 1987
Terms of lending at commercial banks, November 1986
Terms of lending at commercial banks, February 1987
Terms of lending at commercial banks, May 1987
Terms of lending at commercial banks, August 1987
Pro forma balance sheet and income statements for priced service operations, June 30, 1987
Pro forma balance sheet and income statements for priced service operations, September 30,1987 .
Special tables begin
on next page.
1987
1987
1987
1988
1987
1987
1987
1988
1987
1987
1987
1988
1987
1988
A70
Special Tables • February 1988
4.20 DOMESTIC AND FOREIGN OFFICES, Insured Commercial Bank Assets and Liabilities1-2
Consolidated Report of Condition, June 30, 1987
Millions of dollars
Banks with domestic
offices only 8
Banks with foreign offices 5 - 7
Item
Tota
Total
1 Total assets 6
2 Cash and balances due from depository institutions
3
Cash items in process of collection, unposted debits, and currency
4
Cash items in process of collection and unposted debits and coin
5
Currency and coin
Balances due from depository institutions in the United States
6
7
Balances due from banks in foreign countries and foreign central banks
8
Balances due from Federal Reserve Banks
Foreign
Domestic
Over 100
2,869,992
1,664,274
431,356
1,286,327
797,552
408,166
338,994
237,889
79,642
n.a.
n.a.
35,253
102,321
20,673
122,047
1,764
n.a.
n.a.
21,336
98,779
169
115,842
77,879
66,441
11,438
13,917
3,542
20,504
65,457
27,311
18,945
8,366
23,010
5,456
9,680
35,648
1
n.a.
n.a.
8,692
13,927
1
t
11,909
n.a.
MEMO
9
Under 100
Noninterest-bearing balances due from commercial banks in the United
States (included in balances due from depository institutions in the U.S.)
|
|
n.a.
1
2,315,740
1,261,820
n.a.
n.a.
698,926
354,994
486,260
194,859
25,896
168,963
171,087
120,314
293,742
n.a.
n.a.
101,795
61,115
40,680
954
815
139
100,841
60,300
40,541
106,550
64,198
42,352
85,398
n.a.
n.a.
61,625
n.a.
126,648
1,737
124,911
65,870
n a.
31,601
9,079
52,989
292
52,697
40,076
15,318
105
34
830
0
830
24,112
1,007
31,496
9,045
52,158
292
51,867
15,964
14,310
17,213
25,138
47,070
724
46,346
17,467
17,139
12,811
n.a.
26,590
721
25,868
8,326
6,591
34,192
3,250
12,068
24,759
8
1,000
23,105
3,242
11,068
1,654
2,375
14,764
328
967
7,360
133,010
1,758,113
14,990
1,743,125
46,544
112
1,696,470
64,054
1,044,900
6,623
1,038,279
35,265
108
1,002,907
203
226,091
2,097
223,996
n.a.
n.a.
n.a.
63,851
818,810
4,526
814,284
n.a.
n.a.
n.a.
43,823
497,631
5,712
491,918
7,898
3
484,017
25,133
215,582
2,654
212,928
3,381
0
209,547
550,481
17,275
66,526
n a.
n a.
n.a.
260,761
4
1
n.a.
i
t
60,333
22,560
4,653
33,120
1
n.a.
i
t
29,704
1,016
243
28,445
243,487
75,623
1,525
92,436
8,707
65,195
30,629
21,544
4,409
4,676
194,536
30,208
3,779
91,186
5,924
63,440
5,320
4,352
797
170
95,184
7,760
8,492
51,919
1,943
25,069
874
n.a.
n.a.
n.a.
42 Loans to finance agricultural production and other loans to farmers
43 Commercial and industrial loans
44
To U.S. addressees (domicile)
45
To non-U.S. addressees (domicile)
46 Acceptances of other banks
47
U.S. banks
30,786
580,620
n.a.
n.a.
3,382
n.a.
n.a.
5,581
404,356
306,077
98,279
1,182
472
711
390
110,637
15,829
94,808
410
10
400
5,190
293,718
290,248
3,470
772
462
311
6,612
128,029
127,478
550
1,148
n.a.
n.a.
18,593
48,236
n.a.
n.a.
1,053
n.a.
n.a.
49 Loans to individuals for household, family, and other personal expenditures
(includes purchased paper)
50
Credit cards and related plans
51
Other (includes single payment and installment)
317,544
80,128
237,416
142,229
43,283
98,946
11,628
n.a.
n.a.
130,601
n.a.
n.a.
129,355
34,800
94,555
45,960
2,045
43,915
55,706
2,124
53,582
124,867
n.a.
n.a.
n.a.
n.a.
34,473
621
33,852
112,324
39,200
73,124
n.a.
n.a.
602
0
602
50,870
36,171
14,699
n.a.
n.a.
33,871
621
33,250
61,454
3,029
58,425
16,594
41,831
18,670
1,306
17,364
9,992
250
9,742
2,042
7,700
2,563
197
2,366
2,552
n.a.
n.a.
n.a.
n.a.
28,200
38,770
43,285
10,248
2,444
37,752
n.a.
4,410
78,348
23,663
37,953
22,225
4,287
1,778
37,358
n.a.
2,954
58,011
4,575
17,466
1
T
1
n.a.
19,088
20,488
n.a.
n.a.
n.a.
n.a.
39,310
n.a.
n.a.
3,970
562
13,726
3,282
618
373
n.a.
1,299
13,307
568
255
7,334
2,679
47
21
n.a.
157
7,030
10 Total securities, loans and lease financing receivables, net
11 Total securities, book value
12
U.S. Treasury securities and U.S. government agency and corporation
obligations
13
U.S. Treasury securities
14
U.S. government agency and corporation obligations
15
All holdings of U.S. government-issued or guaranteed certificates of
participation in pools of residential mortgages
16
Mother
17
Securities issued by states and political subdivisions in the United States
18
Taxable
19
Tax-exempt
20
Other securities
22
23
25
26
27
28
29
30
31
All holdings of private certificates of participation in pools of
residential mortgages
All other
Federal funds sold and securities purchased under agreements to resell
Total loans and lease financing receivables, gross
LESS: Unearned income on loans
Total loans and leases (net of unearned income)
LESS: Allowance for loan and lease losses
LESS: Allocated transfer risk reserves
EQUALS: Total loans and leases, net
Total loans, gross, by category
32 Loans secured by real estate
33
Construction and land development
34
Farmland
36
Multifamily (5 or more) residential properties
37
Nonfarm nonresidential properties
38 Loans to depository institutions
39
To commercial banks in the United States
40
To other depository institutions in the United States
41
To banks in foreign countries
52 Obligations (other than securities) of states and political subdivisions in the U.S.
(includes nonrated industrial development obligations)
53
Taxable
56
57
58
62
63
64
65
66
Loans to foreign governments and official institutions
Other loans
Loans for purchasing and carrying securities
Premises and fixed assets (including capitalized leases)
Other real estate owned
Investments in unconsolidated subsidiaries and associated companies
Customers' liability on acceptances outstanding
Net due from own foreign offices, Edge and agreement subsidiaries, and IBFs . . .
n.a.
1
t
Commercial Banks
4.20
A71
Continued
Banks with domestic
offices only 5
Banks with foreign offices 3 ' 4
Total
Foreign
Total
Domestic
Over 100
Under 100
69 Total liabilities, limited-life preferred stock, and equity capital
2,869,992
1,664,274
n. a.
797,552
408,166
70 Total liabilities'
71
Limited-life preferred stock
2,697,761
84
1,584,158
67
430,944
n.a.
1,206,623
n.a.
740,722
15
372,881
2
72 Total deposits
Individuals, partnerships, and corporations
73
74
U.S. government
75
States and political subdivisions in the United States
76
Commercial banks in the United States
77
Other depository institutions in the United States
78
Banks in foreign countries
79 Foreign governments and official institutions
80 Certified and official checks
81 All other 8
2,231,734
,206,941
335,320
178,964
1
871,621
769,715
3,288
38,095
33,663
5,181
8,431
1,866
11,381
661,474
599,307
1,989
39,885
11,348
2,964
173
210
5,603
363,318
330,859
785
25,819
1,838
1,367
n.a.
n.a.
2,620
31
318,645
258,464
2,418
8,649
24,983
3,917
7,821
1,012
11,381
200,862
175,362
1,483
9,723
6,792
1,812
79
6
5,603
99,169
88,014
605
6,868
508
545
n.a.
n.a.
2,620
10
256,344
197,951
2,410
6,871
24,983
3,917
7,821
1,011
11,381
132,642
111,489
1,458
5,423
6,788
1,795
77
6
5,603
552,977
511,251
870
29,446
8,680
916
7,764
1,264
610
5
605
855
460,612
423,945
506
30,162
4,556
739
3,817
1,151
94
14
79
203
55,378
48,615
588
2,501
506
538
n.a.
n.a.
2,620
10
264,149
242,845
179
18,950
1,331
n.a.
n.a.
822
n.a.
n.a.
n.a.
n.a.
21
20,275
n.a.
123
124
125
126
127
128
Holdings of commercial paper included in total loans, gross
Total individual retirement accounts (IRA) and Keogh plan accounts
Total brokered deposits
Total brokered retail deposits
Issued in denominations of $100,000 or less
Issued in denominations greater than $100,000 and participated out by the
broker in shares of $100,000 or less
Savings deposits
Money market deposit accounts (MMDAs)
Other savings deposits (excluding MMDAs)
Total time deposits of less than $100,000
Time certificates of deposit of $100,000 or more
Open-account time deposits of $100,000 or more
All NOW accounts (including Super NOW)
Total time and savings deposits
224,217
n.a.
91,996
37,859
17,170
n.a.
68,516
172,146
MEMO
129
130
131
132
133
134
135
35,348
12,052
n.a.
1
33,481
671
122,205
n a.
92 Demand deposits (included in total transaction accounts)
93 Individuals, partnerships, and corporations
94
U.S. government
95
States and political subdivisions in the United States
96
Commercial banks in the United States
97
Other depository institutions in the United States
98
Banks in foreign countries
99 Foreign governments and official institutions
100 Certified and official checks
101 M o t h e r
102 Total nontransaction accounts
103 Individuals, partnerships, and corporations
104 U.S. government
105 States and political subdivisions in the United States
106 Commercial banks in the United States
107
U.S. branches and agencies of foreign banks
108
Other commercial banks in the United States
109 Other depository institutions in the United States
110 Banks in foreign countries
111
Foreign branches of other U.S. banks
112
Other banks in foreign countries
113 Foreign governments and official institutions
114 All other
Federal funds purchased and securities sold under agreements to repurchase..
Demand notes issued to the U.S. Treasury
Other borrowed money
Banks liability on acceptances executed and outstanding
Notes and debentures subordinated to deposits
Net due to own foreign offices, Edge and agreement subsidiaries, and I B F s . . .
All other liabilities
Total equity capital 9
n.a.
1I
82 Total transaction accounts
83 Individuals, partnerships, and corporations
84
U.S. government
85
States and political subdivisions in the United States
86 Commercial banks in the United States
87 Other depository institutions in the United States
88 Banks in foreign countries
89 Foreign governments and official institutions
90
Certified and official checks
91
All other
115
116
117
118
119
120
121
122
n.a.
n.a.
176,395
n.a.
73,774
37,465
14,635
n.a.
54,002
80,049
594
n.a.
30, 898
7,181
n.a.
n.a.
n.a.
n.a.
175,801
20,946
42,876
30,284
n.a.
14,098
n.a.
n.a.
44,522
4,567
17,293
374
2,166
n.a.
10,327
56,814
3,301
757
930
21
368
n.a.
4,187
35,283
1,320
663
657
32,361
24,305
4,807
923
1,033
31,663
4,159
2,384
1,384
n.a.
15,864
646
487
402
n a.
Footnotes appear at the end of table 4.22
13,789
n.a.
n.a.
Quarterly averages
136 Total loans
137 Obligations (other than securities) of states and political subdivisions
in the United States
138 Transaction accounts in domestic offices (NOW accounts, ATS accounts, and
telephone and preauthorized transfer accounts)
Nontransaction accounts in domestic offices
139 Money market deposit accounts (MMDAs)
140 Other savings deposits
141 Time certificates of deposit of $100,000 or more
142 All other time deposits
143 Number of banks
1
n.a.
256
n a.
3,883
1,000
85
169,945
72,288
133,849
148,910
27,984
57,975
615,277
131,982
68,107
171
85,024
4,020
65,213
528,832
57,234
34,697
128,682
41,942
1,595
41,815
307,941
796,030
482,201
208,809
34,850
18,587
n.a.
64,099
69,562
43,533
171,653
71,838
146,273
157,808
133,699
68,100
84,357
174,496
57,887
34,174
42,165
129,523
2,355
11,178
n.a.
A72
Special Tables • February 1988
4.21 DOMESTIC OFFICES, Insured Commercial Banks with Assets of $100 Million or more or with foreign offices1-2-3
Consolidated Report of Condition, June 30, 1987
Millions of dollars
Members
Item
Total
1
2 Cash and balances due from depository institutions
3 Cash items in process of collection and unposted debits
4 Currency and coin
5 Balances due from depository institutions in the United States
6 Balances due from banks in foreign countries and foreign central banks
7 Balances due from Federal Reserve Banks
8 Total securities, loans and lease financing receivables, (net of unearned income)
9 Total securities, book value
10 U.S. Treasury securities
11 U.S. government agency and corporation obligations
12
All holdings of U.S. government-issued or guaranteed certificates of
participation in pools of residential mortgages
13
All other
14 Securities issued by states and political subdivisions in the United States
15
16 Tax-exempt
17 Other domestic securities
18
All holdings of private certificates of participation in pools of residential mortgages
19
All other
20
Foreign securities
Nonmembers
Total
National
State
2,083,879
1,693,550
1,330,636
362,914
390,329
181,299
85,386
19,804
36,927
8,997
30,184
152,240
78,278
16,366
25,177
6,975
25,444
118,443
61,059
13,490
20,734
5,382
17,778
33,797
17,219
2,876
4,443
1,593
7,666
29,059
7,108
3,438
11,750
2,022
4,740
1,753,926
1,409,815
1,120,544
289,272
344,110
340,050
124,498
82,892
260,092
95,389
62,297
203,827
76,590
50,592
56,266
18,799
11,705
79,958
29,109
20,595
48,709
34,183
99,228
1,016
98,212
31,449
5,617
25,832
1,982
40,267
22,030
78,530
626
77,904
22,167
4,547
17,620
1,709
31,947
18,645
58,216
520
57,696
17,943
2,805
15,138
486
8,320
3,385
20,314
107
20,208
4,224
1,742
2,482
1,223
8,443
12,153
20,698
390
20,308
9,282
1,070
8,213
273
107,674
89,478
66,425
23,053
18,195
1,316,441
10,239
1,306,202
1,067,999
7,754
1,060,245
856,221
5,930
850,291
211,778
1,824
209,953
248,441
2,484
245,957
438,022
105,830
5,304
183,622
14,631
128,635
25,896
5,206
4,846
11,802
335,661
86,424
3,598
137,999
11,478
96,162
22,447
4,936
4,763
9,399
285,229
70,861
3,154
118,475
10,000
82,740
17,507
3,695
2,631
8,365
50,432
15,563
445
19,524
1,478
13,422
4,940
1,242
2,132
1,034
102,362
19,406
1,705
45,624
3,154
32,473
3,449
270
83
2,403
421,747
417,726
4,020
348,867
345,153
3,714
271,191
268,215
2,977
77,675
76,938
737
72,880
72,573
307
1,920
801
380
1,382
683
274
1,260
617
264
122
67
10
538
118
106
41 Loans to individuals for household, family, and other personal expenditures
(includes purchased paper)
42 Loans to foreign governments and official institutions
43 Obligations (other than securities) of states and political subdivisions in the United States
44
45
46
47
Loans for purchasing and carrying securities
48
259,956
3,279
52,541
1,927
50,614
68,167
18,636
49,530
210,316
3,123
44,030
1,358
42,672
62,288
16,793
45,495
171,620
2,247
32,955
1,194
31,761
42,895
10,037
32,859
38,696
876
11,075
164
10,911
19,393
6,757
12,636
49,640
156
8,510
568
7,942
5,878
1,843
4,035
49
50
51
52
23,058
29,789
39,310
118,866
20,786
28,922
36,151
102,572
16,626
19,751
27,852
71,898
4,161
9,172
8,299
30,674
2,271
866
3,159
16,293
21 Federal funds sold and securities purchased under agreements to resell
22 Total loans and lease financing receivables, gross
23
LESS: Unearned income on loans
24 Total loans and leases (net of unearned income)
25
26
27
28
29
30
31
32
33
34
Total loans, gross, by category
Loans secured by real estate
Construction and land development
1-4 family residential properties
Multifamily (5 or more) residential properties
Nonfarm nonresidential properties
Loans to commercial banks in the United States
Loans to other depository institutions in the United States
Loans to banks in foreign countries
Loans to finance agricultural production and other loans to farmers
35 Commercial and industrial loans
36 To U.S. addressees (domicile)
37 To non-U.S. addressees (domicile)
38 Acceptances of other banks 10
39 Of U.S. banks
Of foreign banks
40
Lease financing receivables
Customers' liability on acceptances outstanding
Net due from own foreign offices, Edge and agreement subsidiaries, and IBFs
Remaining assets
Commercial Banks
4.20
A73
Continued
Members
Item
Nonmembers
Total
Total
National
State
53 Total liabilities and equity capital
2,083,879
1,693,550
1,330,636
362,914
390,329
54 Total liabilities7
1,947,345
1,585,449
1,245,975
339,473
361,897
55 Total deposits
Individuals, partnerships, and corporations
56
57 U.S. government
58 States and political subdivisions in the United States
59 Commercial banks in the United States
60
Other depository institutions in the United States
61
Banks in foreign countries
62
Foreign governments and official institutions
63 Certified and official checks
1,533,095
1,369,022
5,277
77,980
45,011
8,145
8,603
2,076
16,985
1,212,467
1,077,728
4,434
59,428
40,616
6,558
8,053
1,689
13,963
971,256
867,315
3,839
49,837
31,361
4,987
4,032
792
9,097
241,211
210,413
595
9,590
9,255
1,572
4,022
897
4,866
320,628
291,294
843
18,552
4,395
1,586
550
387
3,021
64 Total transaction accounts
65 Individuals, partnerships, and corporations
66
67
States and political subdivisions in the United States
68 Commercial banks in the United States
69 Other depository institutions in the United States
70 Banks in foreign countries
71
Foreign governments and official institutions
72 Certified and official checks
519,507
433,826
3,901
18,371
31,775
5,729
7,900
1,018
16,985
425,176
349,005
3,292
14,926
30,332
5,060
7,636
960
13,963
330,475
275,536
2,768
11,983
23,246
3,618
3,770
457
9,097
94,700
73,469
524
2,943
7,086
1,442
3,866
503
4,866
94,331
84,821
610
3,445
1,443
670
264
59
3,021
73 Demand deposits (included in total transaction accounts)
74
Individuals, partnerships, and corporations
75
76
States and political subdivisions in the United States
77
Commercial banks in the United States
78
Other depository institutions in the United States
79
Banks in foreign countries
80
Foreign governments and official institutions
Certified and official checks
81
388,986
309,439
3,868
12,294
31,770
5,711
7,897
1,017
16,985
325,043
253,482
3,261
10,367
30,328
5,045
7,634
959
13,963
246,446
195,272
2,740
8,265
23,242
3,603
3,767
456
9,097
78,597
58,210
521
2,103
7,086
1,441
3,866
503
4,866
63,942
55,957
607
1,927
1,442
666
264
58
3,021
1,013,589
935,196
1,376
59,608
13,236
1,655
11,581
2,415
704
19
685
1,058
787,292
728,723
1,143
44,502
10,284
1,073
9,211
1,499
417
13
405
730
640,781
591,779
1,072
37,854
8,115
1,022
7,093
1,369
262
8
254
335
146,510
136,944
71
6,647
2,169
51
2,118
130
155
5
151
394
226,297
206,474
233
15,107
2,952
582
2,370
917
286
7
280
328
220,323
25,512
60,169
30,658
2,166
14,098
75,422
199,561
23,466
52,604
29,790
1,284
10,944
66,277
154,401
17,441
36,502
20,600
1,154
8,204
44,621
45,160
6,025
16,101
9,191
130
2,740
21,655
20,762
2,047
7,565
868
882
3,155
9,145
136,534
108,101
84,661
23,441
28,432
1,690
64,024
28,464
7,191
2,308
1,288
49,688
23,504
5,497
1,209
1,159
41,064
19,783
4,438
1,090
129
8,624
3,721
1,060
119
403
14,336
4,960
1,694
1,099
4,884
4,289
3,348
941
595
301,928
140,395
305,327
233,934
32,004
123,188
1,144,110
238,774
108,675
228,680
182,655
28,507
94,500
887,424
193,266
85,180
193,343
149,771
19,222
78,764
724,810
45,508
23,495
35,337
32,884
9,286
15,735
162,614
63,154
31,720
76,647
51,279
3,497
28,689
256,686
1,278,231
53,437
1,037,382
44,993
828,189
33,181
209,193
11,812
240,849
8,444
133,660
103,283
84,417
18,866
30,377
119
120
305,352
139,938
230,630
332,304
241,294
108,269
179,925
252,363
195,652
85,547
146,993
207,758
45,642
22,723
32,933
44,605
64,058
31,669
50,705
79,941
122
2,611
1,504
1,271
233
1,107
8? Total nontransaction accounts
83 Individuals, partnerships, and corporations
84
85 States and political subdivisions in the United States
86 Commercial banks in the United States
87
U.S. branches and agencies of foreign banks
Other commercial banks in the United States
88
89 Other depository institutions in the United States
90 Banks in foreign countries
91
Foreign branches of other U.S. banks
Other banks in foreign countries
92
93 Foreign governments and official institutions
94
95
%
97
98
99
100
Federal funds purchased and securities sold under agreements to repurchase
Demand notes issued to the U.S. Treasury
Banks liability on acceptances executed and outstanding
Notes and debentures subordinated to deposits
Net due to own foreign offices, Edge and agreement subsidiaries, and IBFs
101
MEMO
102 Holdings of commercial paper included in total loans, gross
103 Total individual retirement accounts (IRA) and Keogh plan accounts
104
105
106 Issued in denominations of $100,000 or less
107 Issued in denominations greater than $100,000 and participated out by the broker in shares
of $100,000 or less
Savings deposits
108 Money market deposit accounts (MMDAs)
109
110 Total time deposits of less than $100,000
111 Time certificates of deposit of $100,000 or more
112 Open-account time deposits of $100,000 or more
113 All NOW accounts (including Super NOW accounts)
114 Total time and savings deposits
Quarterly averages
115
116 Obligations (other than securities) of states and political subdivisions in the United States
117 Transaction accounts (NOW accounts, ATS accounts, and telephone preauthorized
Nontransaction accounts
Money market deposit accounts (MMDAs)
Other savings deposits
Time certificates of deposit of $100,000 or more
121 All other time deposits
118
Footnotes appear at the end of table 4.22
A74
Special Tables • February 1988
4.22 DOMESTIC OFFICES, Insured Commercial Bank Assets and Liabilities12-3
Consolidated Report of Condition, June 30, 1987
Millions of dollars
Members
Nonmembers
Item
Total
6
National
State
2,492,045
1,865,670
1,471,731
393,939
626,375
216,948
23,944
34,528
158,476
168,199
18,131
19,804
130,264
131,859
14,940
16,376
100,543
36,340
3,191
3,427
29,721
48,749
5,813
14,724
28,212
2,112,301
1,560,052
1,243,308
316,744
552,249
460,364
292,788
125,818
1,737
124,081
41,757
6,583
35,174
132,807
1,532,022
12,893
1,519,130
308,274
191,313
89,250
889
88,361
27,711
4,971
22,739
101,253
1,159,438
8,913
1,150,525
243,186
154,428
67,034
734
66,301
21,724
3,116
18,608
76,325
930,664
6,867
923,797
65,088
36,885
22,216
155
22,060
5,987
1,856
4,131
24,928
228,773
2,045
226,728
152,090
101,476
36,568
848
35,719
14,047
1,612
12,435
31,554
372,584
3,980
368,604
533,206
113,590
13,796
235,542
16,575
153,704
375,799
89,923
6,516
160,273
12,268
106,819
317,906
73,714
5,496
136,459
10,648
91,589
57,892
16,209
1,019
23,814
1,620
15,230
157,408
23,667
7,280
75,269
4,307
46,885
36,822
30,396
469,983
2,972
32,670
16,058
370,358
1,875
24,316
13,594
288,742
1,682
8,354
2,463
81,616
193
4,152
14,338
99,625
1,097
305,916
55,104
2,124
52,981
73,998
23,626
29,809
39,310
132,987
230,125
45,057
1,438
43,619
66,495
21,002
28,933
36,151
108,486
187,795
33,818
1,262
32,556
46,013
16,797
19,758
27,852
76,806
42,330
11,239
176
11,063
20,482
4,204
9,175
8,299
31,680
75,790
10,048
686
9,362
7,503
2,624
876
3,159
24,501
38 Total liabilities and equity capital
2,492,045
1,865,670
1,471,731
393,939
626,375
39 Total liabilities7
2,320,226
1,742,869
1,375,168
367,701
577,357
41
42
43
44
45
46
Individuals, partnerships, and corporations
U.S. government
States and political subdivisions in the United States
Commercial banks in the United States
Other depository institutions in the United States
Certified and official checks
1,896,414
1,699,881
6,062
103,798
46,850
9,511
19,605
10,711
1,365,438
1,217,433
4,780
69,310
41,736
7,269
15,154
9,761
1,0%,984
982,186
4,131
58,005
32,174
5,598
10,053
4,840
268,454
235,246
649
11,305
9,562
1,671
5,101
4,921
530,975
482,448
1,282
34,489
5,114
2,242
4,451
950
48 Total transaction accounts
49
Individuals, partnerships, and corporations
50
U.S. government
51
States and political subdivisions in the United States
52
Commercial banks in the United States
53
Other depository institutions in the United States
54 Certified and official checks
55
All other
618,676
521,840
4,506
25,240
32,282
6,274
19,605
8,928
467,043
386,207
3,559
17,475
30,684
5,363
15,154
8,600
365,025
306,333
2,997
14,096
23,424
3,890
10,053
4,229
102,019
79,875
562
3,379
7,260
1,472
5,101
4,371
151,633
135,632
947
7,765
1,598
911
4,451
328
56 Demand deposits (included in total transaction accounts)
57
Individuals, partnerships, and corporations
444,363
358,054
4,456
14,795
32,277
6,249
19,605
8,924
349,080
274,477
3,522
11,302
30,680
5,345
15,154
8,597
266,189
212,610
2,963
9,039
23,421
3,874
10,053
4,226
82,891
61,867
559
2,263
7,260
1,472
5,101
4,371
95,283
83,577
934
3,493
1,597
904
4,451
327
1,277,738
1,178,042
1,556
78,559
14,567
3,238
1,783
898,395
831,225
1,221
51,835
11,052
1,907
1,161
731,960
675,854
1,134
43,909
8,750
1,708
611
166,436
155,372
87
7,926
2,302
199
550
379,342
346,816
334
26,724
3,515
1,331
622
1 Total assets
2 Cash and balances due from depository institutions
3
Currency and coin
4
Noninterest-bearing balances due from commercial banks
Other
5
6 Total securities, loans, and lease financing receivables (net of unearned income)
7
8
9
10
11
12
13
14
15
16
17
18
Total securities, book value
U.S. Treasury securities and U.S. government agency and corporation obligations
Securities issued by states and political subdivisions in the United States
Taxable
Tax-exempt
Other securities
All holdings of private certificates of participation in pools of residential mortgages
All other
Federal funds sold and securities purchased under agreements to resell
Total loans and lease financing receivables, gross
LESS: Unearned income on loans
Total loans and leases (net of unearned income)
Total loans, gross, by category
19 Loans secured by real estate
20
Construction and land development
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
1-4 family residential properties
Multifamily (5 or more) residential properties
Nonfarm nonresidential properties
Loans to depository institutions
Loans to finance agricultural production and other loans to farmers
Commercial and industrial loans
Acceptances of other banks
Loans to individuals for household, family, and other personal expenditures
(includes purchased paper)
Obligations (other than securities) of states and political subdivisions in the United States . . . .
Nonrated industrial development obligations
Other obligations (excluding securities)
All other loans
Lease financing receivables
Customers' liability on acceptances outstanding
Net due from own foreign offices, Edge and agreement subsidiaries, and IBFs
Remaining assets
59
60
61
62
63
States and political subdivisions in the United States
Commercial banks in the United States
Other depository institutions in the United States
Certified and official checks
All other
65
Individuals, partnerships, and corporations
67
68
69
70
States and political subdivisions in the United States
Commercial banks in the United States
Other depository institutions in the United States
All other
Commercial Banks
4.22
A75
Continued
Members
Nonmembers
Total
Item
Total
National
State
223,623
26,269
61,098
30,679
2,534
14,098
79,609
201,317
23,818
53,172
29,801
1,359
10,944
67,964
155,771
17,722
36,858
20,607
1,220
8,204
46,006
45,547
6,0%
16,314
9,194
140
2,740
21,957
22,306
2,451
7,927
878
1,175
3,155
11,645
171,819
122,801
96,563
26,238
49,018
79 Assets held in trading accounts 10
U.S. Treasury securities
80
81
U.S. government agency corporation obligations
82
Securities issued by states and political subdivisions in the United States
83 Other bonds, notes and debentures
84
Certificates of deposit
85 Commercial paper
86
Bankers acceptances
87
Other
21,305
9,155
4,609
3,017
490
690
135
1,957
703
20,917
9,116
4,600
3,008
490
670
135
1,923
692
12,346
4,687
2,344
2,236
295
587
132
1,278
523
8,571
4,429
2,255
772
195
83
3
645
169
388
39
9
9
0
20
0
34
11
88 Total individual retirement accounts (IRA) and Keogh plan accounts
89 Total brokered deposits
90 Total brokered retail deposits
91
Issued in denominations of $100,000 or less
92
Issued in denominations greater than $100,000 and participated out by the broker in
shares of $100,000 or less
79,888
29,110
7,679
2,710
56,039
23,833
5,759
1,413
46,316
20,042
4,645
1,255
9,724
3,791
1,115
158
23,849
5,278
1,919
1,297
4,969
4,346
3,389
957
622
359,161
175,092
434,009
275,876
33,599
165,003
1,452,050
264,037
123,214
279,630
202,418
29,096
111,677
1,016,358
214,003
96,848
234,894
166,519
19,696
93,006
830,795
50,034
26,366
44,736
35,900
9,400
18,670
185,563
95,124
51,878
154,379
73,457
4,503
53,327
435,692
1,487,040
1,126,072
900,599
225,473
360,968
177,193
121,017
99,112
21,905
56,176
363,239
174,113
272,795
461,827
266,877
122,552
199,661
303,571
216,706
97,001
163,798
249,554
50,172
25,551
35,863
54,017
%,362
51,561
73,135
158,255
13,789
5,790
4,693
1,097
7,999
71
72
73
74
75
76
77
Federal funds purchased and securities sold under agreements to repurchase
Demand notes issued to the U.S. Treasury
Other borrowed money
Banks liability on acceptances executed and outstanding
Notes and debentures subordinated to deposits
Net due to own foreign offices, Edge and agreement subsidiaries, and IBFs
Remaining liabilities
78 Total equity capital 9
MEMO
93
94
95
96
97
98
99
Savings deposits
Money market deposit accounts (MMDAs)
Other savings deposits
Total time deposits of less than $100,000
Time certificates of deposit of $100,000 or more
Open-account time deposits of $100,000 or more
All NOW accounts (including Super NOW)
Total time and savings deposits
Quarterly averages
100 Total loans
101 Transaction accounts (NOW accounts, ATS accounts, and telephone and preauthorized
transfer accounts)
102
103
104
105
Nontransaction accounts
Money market deposit accounts (MMDAs)
Other savings deposits
Time certificates of deposit of $100,000 or more
All other time deposits
'
106 Number of banks
1. Effective Mar. 31, 1984, the report of condition was substantially revised
for commercial banks. Some of the changes are as follows: (1) Previously, banks
with international banking facilities (IBFs) that had no other foreign offices were
considered domestic reporters. Beginning with the Mar. 31, 1984 call report these
banks are considered foreign and domestic reporters and must file the foreign and
domestic report of condition; (2) banks with assets greater than $1 billion have
additional items reported; (3) the domestic office detail for banks with foreign
offices has been reduced considerably ; and (4) banks with assets under $25 million
have been excused from reporting certain detail items.
2. The " n . a . " for some of the items is used to indicate the lesser detail
available from banks without foreign offices, the inapplicability of certain items to
banks that have only domestic offices and/or the absence of detail on a fully
consolidated basis for banks with foreign offices.
3. All transactions between domestic and foreign offices of a bank are
reported in "net due f r o m " and "net due to." All other lines represent
transactions with parties other than the domestic and foreign offices of each bank.
Since these intraoffice transactions are nullified by consolidation, total assets and
total liabilities for the entire bank may not equal the sum of assets and liabilities
respectively, of the domestic and foreign offices.
4. Foreign offices include branches in foreign countries, Puerto Rico, and in
U.S. territories and possessions; subsidiaries in foreign countries; all offices of
Edge act and agreement corporations wherever located and IBFs.
5. The 'over 100' column refers to those respondents whose assets, as of June
30 of the previous calendar year, were equal to or exceeded $100 million. (These
respondents file the FFIEC 032 or FFIEC 033 call report.) The 'under 100' column
refers to those respondents whose assets, as of June 30 of the previous calendar
year, were less than $100 million. (These respondents filed the FFIEC 034 call
report.)
6. Since the domestic portion of allowances for loan and lease losses and
allocated transfer risk reserve are not reported for banks with foreign offices, the
components of total assets (domestic) will not add to the actual total (domestic).
7. Since the foreign portion of demand notes issued to the U.S. Treasury is not
reported for banks with foreign offices, the components of total liabilities (foreign)
will not add to the actual total (foreign).
8. The definition of 'all other' varies by report form and therefore by column
in this table. See the instructions for more detail.
9. Equity capital is not allocated between the domestic and foreign offices of
banks with foreign offices.
10. Components of assets held in trading accounts are only reported for banks
with total assets of $1 billion or more; therefore the components will not add to the
totals for this item.
A76
Special Tables • February 1988
4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 1987
Millions of dollars
All states 2
Item
1 Total assets4
Total
including
IBFs
New York
IBFs
only3
Total
including
IBFs
California
IBFs
only 3
Total
including
IBFs
Illinois
IBFs
only 3
Total
including
IBFs
IBFs
only 3
445,097
226,218
328,375
180,183
66,891
30,442
28,122
9,744
2 Claims on nonrelated parties
3 Cash and balances due from depository institutions
4 Cash items in process of collection and unposted
debits
5 Currency and coin (U.S. and foreign)
6 Balances with depository institutions in United States
7
U.S. branches and agencies of other foreign banks
(including their IBFs)
8
Other depository institutions in United States
(including their IBFs)
y Balances with banks in foreign countries and with
foreign central banks
10
Foreign branches of U.S. banks
11
Other banks in foreign countries and foreign central
banks
12 Balances with Federal Reserve Banks
407,472
110,537
188,423
91,994
301,608
92,035
149,650
75,982
60,228
10,612
26,234
9,981
28,122
6,276
9,438
5,035
690
25
58,793
0
n.a.
44,272
663
18
47,483
0
n.a.
35,084
4
2
6,709
0
n.a.
6,150
10
2
3,811
0
n.a.
2,669
50,823
41,602
40,774
32,728
6,259
5,991
3,292
2,590
7,970
2,670
6,709
2,357
450
159
519
80
48,617
2,209
47,722
2,151
41,665
1,929
40,897
1,887
3,840
87
3,831
86
2,389
157
2,366
151
46,409
2,412
45,571
n.a.
39,736
2,206
39,010
n.a.
3,754
56
3,745
n.a.
2,232
64
2,215
n.a.
13 Total securities and loans
239,019
88,810
164,492
67,444
39,364
15,249
20,303
4,113
32,743
6,740
9,088
n.a.
26,480
6,366
6,920
n.a.
4,069
151
1,814
n.a.
1,166
138
254
n.a.
14 Total securities, book value
15 U.S. Treasury
16 Obligations of U.S. government agencies and
corporations
1/
Other bonds, notes, debentures and corporate stock
(including state and local securities)
3,375
n.a.
3,325
n.a.
22,629
9,088
16,789
6,920
3,879
1,814
1,028
254
18 Federal funds sold and securities purchased under
agreements to resell
19 U.S branches and agencies of other foreign banks . . . .
20 Commercial banks in United States
21 Other
15,599
9,105
3,237
3,257
2,846
940
782
1,125
14,298
8,275
2,987
3,035
2,536
752
778
1,005
579
378
79
122
178
110
0
69
325
198
31
96
70
20
0
50
206,476
201
206,275
79,816
93
79,723
138,131
119
138,012
60,580
56
60,524
35,366
71
35,295
13,473
37
13,435
19,143
6
19,137
3,858
0
3,858
11,195
64,927
33,912
30,579
3,333
105
46,213
17,465
16,746
719
4,585
47,682
24,028
21,241
2,787
71
32,010
10,319
9,812
508
2,737
11,872
7,036
6,651
385
29
9,904
5,220
5,056
164
1,805
3,936
2,556
2,462
94
0
3,185
1,844
1,797
47
171
30,844
1,172
29,672
5,370
19
28,729
1,129
27,600
715
126
23,528
895
22,632
3,364
9
21,681
853
20,828
617
10
4,826
248
4,579
843
0
4,684
247
4,437
57
25
1,355
29
1,326
797
0
1,341
29
1,312
28
101,367
79,258
22,108
827
238
589
17,721
116
17,605
21
0
21
62,345
44,511
17,834
743
184
559
14,826
104
14,723
15
0
15
17,921
15,267
2,654
42
30
12
2,217
13
2,204
0
0
0
12,043
11,568
475
17
1
16
369
0
369
6
0
6
16,652
14,769
14,411
12,831
1,252
1,210
299
270
3,792
2,346
28
244
3,145
1,856
28
182
594
105
0
56
20
228
0
0
42,317
29,388
19,280
10,108
4,772
n.a.
n.a.
n.a.
30,784
20,442
11,335
9,106
3,689
n.a.
n.a.
n.a.
9,673
8,013
7,233
780
826
n.a.
n.a.
n.a.
1,218
610
582
29
220
n.a.
n.a.
n.a.
12,929
37,625
4,772
37,794
10,342
26,767
3,689
30,533
1,660
6,663
826
4,208
608
0
220
306
37,625
n.a.
26,767
n.a.
6,663
n.a.
n.a.
37,794
n.a.
30,533
n.a.
4,208
n.a.
52 Total liabilities4
445,097
226,218
328,375
180,183
66,891
30,442
28,122
9,744
53 Liabilities to nonrelated parties
390,595
204,362
301,755
165,151
60,124
27,088
15,981
6,642
22 Total loans, gross
23
Less: Unearned income on loans
24
Equals: Loans, net
Total loans, gross, by category
25 Real estate loans
26 Loans to depository institutions
2V Commercial banks in United States (including IBFs) .
28
U.S. branches and agencies of other foreign banks .
29
Other commercial banks in United States
30 Other depository institutions in United States
(including IBFs)
31
Banks in foreign countries
32
Foreign branches of U.S. banks
33
Other banks in foreign countries
34 Other financial institutions
35 Commercial and industrial loans
36
U.S. addressees (domicile)
37
Non-U.S. addressees (domicile)
38 Acceptances of other banks
39 U.S. banks
40
Foreign banks
41 Loans to foreign governments and official institutions
(including foreign central banks)
42 Loans for purchasing or carrying securities
(secured and unsecured)
43 All other loans
44 All other assets
45
Customers' liability on acceptances outstanding
46
U.S. addressees (domicile)
47
Non-U.S. addressees (domicile)
48
Other assets including other claims on nonrelated
parties
49 Net due from related depository institutions 5
50
Net due from head office and other related depository
institutions 5
51
Net due from establishing entity, head offices,
and other related depository institutions 5
39
n.a.
0
0
n.a.
n.a.
306
U.S. Branches and Agencies
4.30
All
Continued
Millions of dollars
All states 2
Item
54 Total deposits and credit balances
55
Individuals, partnerships, and corporations
56
U.S. addressees (domicile)
57
Non-U.S. addressees (domicile)
58
Commercial banks in United States (including IBFs) .
59
U.S. branches and agencies of other foreign banks .
Other commercial banks in United States
60
61
Banks in foreign countries
62
Foreign branches of U.S. banks
Other banks in foreign countries
63
64
Foreign governments and official institutions
(including foreign central banks)
65
All other deposits and credit balances
66
Certified and official checks
67 Transaction accounts and credit balances
(excluding IBFs)
68 Individuals, partnerships, and corporations
U.S. addressees (domicile)
69
Non-U.S. addressees (domicile)
70
71 Commercial banks in United States (including IBFs) .
72
U.S. branches and agencies of other foreign banks .
Other commercial banks in United States
73
74
Banks in foreign countries
75
Foreign branches of U.S. banks
76
Other banks in foreign countries
77 Foreign governments and official institutions
(including foreign central banks)
78 All other deposits and credit balances
79 Certified and official checks
80 Demand deposits (included in transaction accounts
and credit balances)
81 Individuals, partnerships, and corporations
82
U.S. addressees (domicile)
83
Non-U.S. addressees (domicile)
84 Commercial banks in United States (including IBFs) .
85
U.S. branches and agencies of other foreign banks .
Other commercial banks in United States
86
87 Banks in foreign countries
88
Foreign branches of U.S. banks
89
Other banks in foreign countries
Foreign governments and official institutions
90
(including foreign central banks)
91 All other deposits and credit balances
92 Certified and official checks
93 Non-transaction accounts (including MMDAs,
excluding IBFs)
94 Individuals, partnerships, and corporations
95
U.S. addressees (domicile)
96
Non-U.S. addressees (domicile)
97 Commercial banks in United States (including IBFs) .
98
U.S. branches and agencies of other foreign banks .
99
Other commercial banks in United States
100 Banks in foreign countries
Foreign branches of U.S. banks
101
102
Other banks in foreign countries
103 Foreign governments and official institutions
(including foreign central banks)
104 All other deposits and credit balances
105 IBF deposit liabilities
106 Individuals, partnerships, and corporations
107
U.S. addressees (domicile)
108
Non-U.S. addressees (domicile)
109 Commercial banks in United States (including IBFs) .
110
U.S. branches and agencies of other foreign banks .
111
Other commercial banks in United States
112 Banks in foreign countries
113
Foreign branches of U.S. banks
114
Other banks in foreign countries
115 Foreign governments and official institutions
(including foreign central banks)
116 All other deposits and credit balances
For notes see end of table.
Total
excluding
IBFs
New York
IBFs
only 3
Total
excluding
IBFs
California
IBFs
only 3
Total
excluding
IBFs
57,901
44,596
34,596
10,000
8,581
4,422
4,158
2,012
243
1,769
162,990
14,512
186
14,326
55,013
47,046
7,967
83,478
7,846
75,633
48,399
35,963
29,004
6,959
7,947
3,911
4,036
1,936
243
1,694
146,204
10,789
179
10,610
48,440
41,273
7,167
77,239
6,774
70,466
1,814
1,717
532
1,186
36
6
31
17
0
17
854
1,126
732
9,937
49
n.a.
796
1,107
649
9,687
48
n.a.
11
4
30
6,327
3,665
2,124
1,541
650
82
568
771
23
748
n.a.
5,452
2,991
1,731
1,260
645
81
564
722
23
699
n.a.
174
135
89
45
0
0
0
6
0
6
Illinois
IBFs
only 3
Total
excluding
IBFs
9,306
439
0
439
4,723
4,307
417
4,090
686
3,404
2,952
2,376
2,185
191
553
489
64
2
0
2
53
0
3
2
17
n.a.
n. a.
216
193
189
4
1
0
0
2
0
2
350
159
732
301
144
649
2
1
30
3
1
17
4,916
3,108
1,802
1,306
58
11
47
604
2
602
4,248
2,634
1,521
1,113
54
11
43
555
2
554
99
61
33
27
0
0
0
6
0
6
203
180
176
4
1
0
0
2
0
2
n.a.
n a.
n. i.
290
124
732
241
115
649
2
0
30
3
1
17
51,574
40,931
32,472
8,459
7,931
4,340
3,590
1,241
220
1,021
42,948
32,972
27,274
5,698
7,302
3,830
3,472
1,215
220
994
1,641
1,583
443
1,140
36
6
30
11
0
11
2,736
2,183
1,996
187
552
489
63
0
0
0
n.a.
495
964
504
967
n.a.
n.a.
162,990
14,512
186
14,326
55,013
47,046
7,967
83,478
7,846
75,633
9,937
49
n a.
n. a.
9
3
146,204
10,789
179
10,610
48,440
41,273
7,167
77,239
6,774
70,466
9,687
48
n. i.
IBFs
only 3
3,069
60
0
60
1,425
1,140
285
1,567
317
1,250
17
0
n.a.
n.a.
n.a.
n.a.
0
1
9,306
439
0
439
4,723
4,307
417
4,090
686
3,404
53
0
n.a.
3,069
60
0
60
1,425
1,140
285
1,567
317
1,250
17
0
A78
Special Tables • February 1988
4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 1987'—Continued
Millions of dollars
All states 2
Item
117
118
119
170
121
1??
123
174
M
176
177
128
129
130
131
132
133
134
Federal funds purchased and securities sold under
agreements to repurchase
U.S. branches and agencies of other foreign banks . . .
Other commercial banks in United States
Other
Other borrowed money
Owed to nonrelated commercial banks in United States
(including IBFs)
Owed to U.S. offices of nonrelated U.S. banks
Owed to U.S. branches and agencies of
nonrelated foreign banks
Owed to nonrelated banks in foreign countries
Owed to foreign branches of nonrelated U.S. banks . .
Owed to foreign offices of nonrelated foreign b a n k s . . .
Owed to others
Total
including
IBFs
California
New York
Total
including
IBFs
IBFs
only 3
Total
including
IBFs
IBFs
only 3
Illinois
Total
including
IBFs
IBFs
only 3
IBFs
only 3
40,620
11,889
11,414
17,317
87,979
3,085
1,406
251
1,428
34, 188
30,332
7,729
7,423
15,180
46,945
1,607
599
110
98
14,302
7,369
2,777
2,852
1,740
31,975
1,339
706
137
496
15,914
2,292
1,120
888
285
6,636
88
55
0
33
3,299
59,146
26,720
13,531
2,648
31,133
16,650
3,693
986
22,699
7,485
8,723
1,1 0 8
3,437
1,823
580
86
32,425
19,513
2,863
16,650
9,320
10,883
18,852
2,640
16,212
2,105
14,482
9,390
1,222
8,168
6,423
2,707
8,779
1,002
7,777
1,830
15,214
6,933
1,262
5,671
2,344
7,315
6,926
1,262
5,664
265
1,614
2,741
273
2,468
459
495
2,709
273
2,436
10
All other liabilities
Branch or agency liability on acceptances executed
and outstanding
Other liabilities to nonrelated parties
41,106
3,799
29,875
3,038
9,660
529
1,032
185
31,304
9,801
n.a.
21,776
8,098
n.a.
3,038
8,581
1,079
n.a.
3,799
529
611
420
Net due to related depository institutions 5
Net due to head office and other related
depository institutions 5
Net due to establishing entity, head office, and other
related depository institutions 5
54,502
21,856
26,620
15,032
6,767
3,354
12,141
54,502
n.a.
26,620
n.a.
6,767
n.a.
12,141
n a.
n.a.
21,856
n.a.
15,032
n.a.
3,354
n.a.
3,102
n a.
185
3,102
MEMO
135
136
137
138
139
140
141
147.
143
Non-interest bearing balances with commercial banks
in United States
Holding of commercial paper included in total loans
Holding of own acceptances included in commercial
and industrial loans
Commercial and industrial loans with remaining maturity
of one year or less
Predetermined interest rates
Floating interest rates
Commercial and industrial loans with remaining maturity
of more than one year
Predetermined interest rates
Floating interest rates
2,415
576
12
2,219
396
12
0
98
79
2,753
1,619
839
145
55,742
35,066
20,676
31,256
18,391
12,865
11,141
8,399
2,742
7,953
5,181
2,772
45,613
15,111
30,502
n.a.
31,077
9,373
21,704
n.a.
6,779
3,182
3,598
n. a.
0
43
84
4,089
1,834
2,256
n.a.
U.S. Branches and Agencies
4.30
A79
Continued
Millions of dollars
All states 2
Item
144 Components of total nontransaction accounts,
included in total deposits and credit balances of
nontransactional accounts, including IBFs
145 Time CDs in denominations of $100,000 or more
146 Other time deposits in denominations of $100,000
or more
147 Time CDs in denominations of $100,000 or more
with remaining maturity of more than
12 months
Total
excluding
IBFs
New York
Total
excluding
IBFs
IBFs
only 3
67,879
39,636
8,725
19,518
1
All states 2
Total
including
IBFs
148 Market value of securities held
149 Immediately available funds with a maturity greater than
one day included in other borrowed money
n a.
8,109
1
18,112
Total
including
IBFs
IBFs
only 3
1,616
1,120
New York
IBFs
only3
Total
excluding
IBFs
312
184
Total
including
IBFs
n a.
J
238
509
IBFs
only 3
Total
including
IBFs
10,626
27,986
8,540
3,780
1,700
1,160
n.a.
28,765
n.a.
21,192
n.a.
2,723
1. Data are aggregates of categories reported on the quarterly form FFIEC 002,
"Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign
Banks." Details may not add to totals because of rounding. This form was first
used for reporting data as of June 30, 1980, and was revised as of December 31,
1985. From November 1972 through May 1980, U.S. branches and agencies of
foreign banks had filed a monthly FR 886a report. Aggregate data from that report
were available through the Federal Reserve statistical release G . l l , last issued on
July 10, 1980. Data in this table and in the G . l l tables are not strictly comparable
because of differences in reporting panels and in definitions of balance sheet
items.
2. Includes the District of Columbia.
3. Effective December 1981, the Federal Reserve Board amended Regulations
D and Q to permit banking offices located in the United States to operate
International Banking Facilities (IBFs). As of December 31, 1985, data for IBFs
are reported in a separate column. These data are either included in or excluded
from the total columns as indicated in the headings. The notation " n . a . " indicates
122
n a.
1
Illinois
33,933
227
IBFs
only 3
3,007
2,259
California
IBFs
only 3
Total
excluding
IBFs
53,814
499
IBFs
only 3
59,094
32,873
n a.
Illinois
California
IBFs
only 3
254
n.a.
49
that no IBF data are reported for that item, either because the item is not an
eligible IBF asset or liability or because that level of detail is not reported for
IBFs. From December 1981 through September 1985, IBF data were included in
all applicable items reported.
4. Total assets and total liabilities include net balances, if any, due from or due
to related banking institutions in the United States and in foreign countries (see
footnote 5). On the former monthly branch and agency report, available through
the G . l l statistical release, gross balances were included in total assets and total
liabilities. Therefore, total asset and total liability figures in this table are not
comparable to those in the G . l l tables.
5. "Related banking institutions" includes the foreign head office and other
U.S. and foreign branches and agencies of the bank, the bank's parent holding
company, and majority-owned banking subsidiaries of the bank and of its parent
holding company (including subsidiaries owned both directly and indirectly).
6. In some cases two or more offices of a foreign bank within the same
metropolitan area file a consolidated report.
A80
Special Tables • February 1988
4.31 Pro forma balance sheet for priced services of the Federal Reserve System
Millions of dollars
September 30, 1987
Item
Short-term assets1
Imputed reserve requirement on clearing balances
Investment in marketable securities
Receivables
Materials and supplies
Prepaid expenses
Net items in process of collection
217.3
1,593.7
54.6
5.1
8.2
688.8
219.1
108.7
3.1
14.0
Total long-term assets
Total assets
Short-term liabilities
Clearing balances and balances arising from early credit
of uncollected items
Short-term debt
345.0
313.5
2,912.6
2,610.9
2,233.1
64.2
2,567.7
1.2
104.9
Total long-term liabilities
Total liabilities
Equity
Total liabilities and equity3
Details may not add to totals because of rounding.
1. Short-term assets. The accounts "imputed reserve requirement on clearing
balances" and "investment in marketable securities" reflect the Federal Reserve's treatment of clearing balances that depository institutions maintain on
deposit with the Reserve Banks. For balance sheet and income statement
presentation, clearing balances are reported in a manner comparable to the way
correspondent banks report compensating balances that respondent institutions
hold with them: These respondent balances are subject to a reserve requirement
established by the Federal Reserve, which must be satisfied either with vault cash
or with nonearning balances maintained at a Reserve Bank. Following this model,
clearing balances maintained with Reserve Banks for priced-service purposes are
subject to imputed reserve requirements. Therefore, a portion of the clearing
balances held with the Federal Reserve is classified on the asset side of the
balance sheet as required reserves and is reflected in a manner similar to vault
cash and due-from-bank balances normally shown on a correspondent bank's
balance sheet. The remainder of clearing balances is assumed to be available for
investment. For these purposes, the Federal Reserve assumes that all such
balances are invested in three-month Treasury bills.
The amount of "net items in the process of collection'' represents float as of the
balance sheet date and is the difference between the value of items in the process
of collection (including checks, coupons, securities, wire transfers, and automated clearinghouse (ACH) transactions) and the value of deferred-availability
items. The cost base for providing services that must be recovered under the
Monetary Control Act includes the cost of float incurred by the Federal Reserve
during the period valued at the federal funds rate. Conventional accounting
procedures would call for inclusion on a balance sheet of the gross amount of
2,297.3
195.2
114.5
3.8
2,499.8
67.9
Total short-term liabilities
Long-term liabilities
Obligations under capital leases
Long-term debt
213.4
1,564.6
51.9
5.2
7.0
455.1
2,567.7
Total short-term assets
Long-term assets2
Premises
Furniture and equipment
Leases and leasehold improvements
Prepaid pension costs
September 30, 1986
2,297.3
1.6
99.2
106.1
100.8
2,673.7
2,398.1
238.9
212.8
2,912.6
2,610.9
items in the process of collection and of deferred-availability items. However,
because the gross amounts have no implications for income, costs, or the private
sector adjustment factor (PSAF), and because the inclusion of these amounts
could lead to distortions and misinterpretations of the assets employed in the
provision of priced services that must be financed, only the net amount is shown.
That amount represents the assets that involve a financing cost.
2. Long-term assets. Long-term assets reflected on the balance sheet have been
allocated to priced services using a direct determination basis. That method uses
the Federal Reserve's Planning and Control System to ascertain directly the value
of assets used solely in priced service operations, and to apportion the value of
jointly used assets between priced and nonpriced services. In addition, an
estimate of the assets of the Board of Governors directly involved in the
development of priced services is included in long-term assets in the premises
account.
The category "long-term assets" also includes an allocation of prepaid pension
costs associated with priced services. The Federal Reserve Banks implemented
Financial Accounting Standards Board Statement No. 87—Employers' Accounting for Pensions, effective January 1, 1987. In accordance with the statement's
terms, the Reserve Banks recognized a credit to expenses and an increase in this
long-term asset account.
3. Liabilities and equity. A matched-book capital structure for those assets that
are not "self-financing" has been used to determine the liability and equity
amounts. Short-term assets are financed with short-term debt. Long-term assets
are financed with long-term debt and equity in a proportion equal to the ratio of
long-term debt and equity of the bank holding companies used in the PSAF model.
A81
4.32 Pro forma income statement for priced services of the Federal Reserve System1
Millions of dollars
Nine months ending September 30
Quarter ending September 30
Item
1987
1987
1986
1986
Income2
Services provided to depository institutions
163.8
156.7
484.3
465.4
Expenses3
Production expenses
127.9
124.1
375.3
368.0
35.8
32.6
109.0
97.5
Income from operations
4
Imputed costs
Interest on float
Interest on debt
Sales taxes
FDIC insurance
6.9
4.0
1.6
.4
22.9
Income from operations after imputed costs
Other income and expenses5
Investment income
Earnings credits
12.9
31.5
28.9
2.6
25.5
Income before income taxes
Imputed income taxes 6
Net income
86.0
317.5
101.6
206.6
23.0
26.6
25.2
1.4
24.5
35.7
15.5
10.0
5.5
1.1
86.9
83.9
3.0
76.3
32.0
65.5
73.3
86.2
80.1
6.1
71.5
8.7
9.2
25.9
26.9
15.3
50.4
44.6
7.3
6.8
22.0
20.5
Details may not add to totals because of rounding.
1. The income statement reflects income and expenses for priced services.
Included in these amounts are imputed float costs, imputed financing costs, and
income related to clearing balances.
2. Income. Income represents charges to depository institutions for priced
services. This income is realized through one of two methods: direct charges to
an institution's account, or charges against accumulated earnings credits. Income
includes charges for per-item fees, fixed fees, package fees, explicitly priced float,
account maintenance fees, shipping and insurance fees, and surcharges.
3. Production expenses. Production expenses include direct, indirect, and
other general administrative expenses of the Federal Reserve Banks for providing
priced services. Included in this amount in 1987 is the reduction in expenses
because of implementation of Financial Accounting Standards Board Statement
No. 87 (see note 2, table 4.31). Also included are the expenses of the staff of the
Board of Governors working directly on the development of priced services,
which in both years amounted to $0.4 million in the third quarter and $1.3 million
in the first nine months.
4. Imputed costs. Imputed float costs represent the value of float to be
recovered, either explicitly or through per-item fees, during the period. Float
costs cover float incurred on checks, book-entry securities, noncash collection,
ACH transactions, and wire transfers.
The following table reports the Federal Reserve's daily average float performance and float recovery for the third quarter of 1987 in millions of dollars:
755.5
43.8
711.7
9.5
17.2
12.1
5.0
1.4
16.9
Targeted return on equity 6
Total float
Unrecovered float
Float subject to recovery
Sources of float recovery
Income on clearing balances
As of adjustments
Direct charges
Per-item fees
3.9
3.3
1.9
.4
In the table, unrecovered float includes float generated in providing services to
government agencies or in other central bank services. Float recovered through
income on clearing balances represents increased investable clearing balances as
a result of reducing imputed reserve requirements through the use of a CIPC
deduction for float when calculating the reserve requirement; this income then
reduces float required to be recovered through other means. As of adjustments to
the institution's reserve or clearing balance, or valuing the float at the federal
funds rate and billing the institution directly, are ways of recovering midweek
closing float and interterritory check float from depositing institutions. The float
recovered through per-item fees is valued at the federal fiinds rate and has been
added to the cost base subject to recovery in the third quarter of 1987.
Also included in imputed costs is the interest on debt assumed necessary to
finance priced-service assets and the sales taxes and FDIC insurance assessment
that the Federal Reserve would have paid had it been a private business firm.
5. Other income and expenses. The category " O t h e r income and e x p e n s e s " is
comprised of income on clearing balances and the cost of earnings credits granted
to depository institutions on their clearing balances. Income on clearing balances
represents the average coupon-equivalent yield on three-month Treasury bills
applied to the total clearing balance maintained, adjusted for the effect of reserve
requirements on clearing balances. Expenses for earnings credits are derived by
applying the average federal funds rate to the required portion of clearing
balances, and are adjusted for the net effect of reserve requirements on clearing
balances.
6. Income taxes and return on equity. Imputed income taxes are calculated at
the effective tax rate derived from a model consisting of the 25 largest bank
holding companies.
The targeted return on equity represents the after-tax rate of return on equity
based on the bank holding company model that the Federal Reserve would have
earned had it been a private business firm.
A82
Federal Reserve Board of Governors
Chairman
Vice Chairman
M A R T H A R . SEGER
M A N U E L H . JOHNSON,
WAYNE D . ANGELL
OFFICE OF BOARD
MEMBERS
DIVISION
ALAN GREENSPAN,
JOSEPH R.
Assistant to the Board
Assistant to the Board
F O X , Special Assistant to the Board
M O O R E , Special Assistant to the Board
COYNE,
DONALD J. W I N N ,
LYNN
BOB
SMITH
STAHLY.
LEGAL
DIVISION
General Counsel
J R . , Deputy General Counsel
R I C H A R D M . A S H T O N , Associate General Counsel
O L I V E R I R E L A N D , Associate General Counsel
R I C K I R . T I G E R T , Assistant General Counsel
M A R Y E L L E N A . B R O W N , Assistant to the General Counsel
MICHAEL
BRADFIELD,
OF INTERNATIONAL
FINANCE
Staff Director
Senior Associate Director
C H A R L E S J . S I E G M A N , Senior Associate Director
D A V I D H . H O W A R D , Deputy Associate Director
R O B E R T F . G E M M I L L , Staff Adviser
D O N A L D B . A D A M S , Assistant Director
P E T E R H O O P E R I I I , Assistant Director
K A R E N H . J O H N S O N , Assistant Director
R A L P H W . S M I T H , J R . , Assistant Director
EDWIN
M .
TRUMAN,
LARRY J. PROMISEL,
J. VIRGIL MATTINGLY,
DIVISION
WILLIAM W .
SECRETARY
Secretary
Associate Secretary
Associate Secretary
WILES,
BARBARA R.
LOWREY,
JAMES MCAFEE,
DIVISION OF
CONSUMER
AND COMMUNITY
AFFAIRS
Director
Assistant Director
E L L E N M A L A N D , Assistant Director
D O L O R E S S . S M I T H , Assistant Director
GRIFFITH
GLENN
E.
L.
GARWOOD,
LONEY,
OF
SUPERVISION
BANKING
AND
REGULATION
Staff Director
Deputy Director1
D O N E . K L I N E , Associate Director
F R E D E R I C K M . S T R U B L E , Associate Director
W I L L I A M A . R Y B A C K , Deputy Associate Director
S T E P H E N C . S C H E M E R I N G , Deputy Associate Director
R I C H A R D S P I L L E N K O T H E N , Deputy Associate Director
H E R B E R T A . B I E R N , Assistant Director
J O E M . C L E A V E R , Assistant Director
A N T H O N Y C O R N Y N , Assistant Director
J A M E S I . G A R N E R , Assistant Director
J A M E S D . G O E T Z I N G E R , Assistant Director
M I C H A E L G . M A R T I N S O N , Assistant Director
R O B E R T S . P L O T K I N , Assistant Director
S I D N E Y M . S U S S A N , Assistant Director
L A U R A M . H O M E R , Securities Credit Officer
WILLIAM
FRANKLIN
TAYLOR,
D.
DREYER,
1. On loan from the Federal Reserve Bank of Chicago.
STATISTICS
Director
Deputy Director
J A R E D J . E N Z L E R , Associate Director
T H O M A S D . S I M P S O N , Associate Director
L A W R E N C E S L I F M A N , Associate Director
E L E A N O R J . S T O C K W E L L , Associate Director
M A R T H A B E T H E A , Deputy Associate Director
P E T E R A . T I N S L E Y , Deputy Associate Director
M A R K N . G R E E N E , Assistant Director
M Y R O N L . K W A S T , Assistant Director
S U S A N J . L E P P E R , Assistant Director
M A R T H A S . S C A N L O N , Assistant Director
D A V I D J . S T O C K T O N , Assistant Director
J O Y C E K . Z I C K L E R , Assistant Director
L E V O N H . G A R A B E D I A N , Assistant Director
(Administration)
C.
DIVISION
DIVISION
AND
MICHAEL J. PRELL,
EDWARD
OFFICE OF THE
OF RESEARCH
ETTIN,
OF MONETARY
AFFAIRS
Director
Deputy Director
B R I A N F . M A D I G A N , Assistant Director
R I C H A R D D . P O R T E R , Assistant Director
N O R M A N D R . V . B E R N A R D , Special Assistant to the Board
DONALD
DAVID E.
L.
KOHN,
LINDSEY,
OFFICE OF THE INSPECTOR
BRENT L.
BOWEN,
GENERAL
Inspector General
A83
and Official Staff
H . ROBERT H E L L E R
E D W A R D W . K E L L E Y , JR.
OFFICE OF
STAFF DIRECTOR
FOR
OFFICE OF STAFF DIRECTOR
FOR
FEDERAL RESERVE BANK
ACTIVITIES
MANAGEMENT
Staff Director
Assistant Staff Director
P O R T I A W . T H O M P S O N , Equal Employment Opportunity
Programs Officer
S. DAVID
FROST,
EDWARD
T.
THEODORE
E.
DIVISION
DAVID
OF
L.
PERSONNEL
Director
Assistant Director
W O O D , Assistant Director
SHANNON,
CHARLES W .
OFFICE OF THE
STEPHEN
CONTROLLER
Controller
Assistant Controller (Programs
LIVINGSTON,
J. CLARK,
and Budgets)
DARRELL R.
DIVISION
ROBERT E.
L.
Assistant Controller (Finance)
OF SUPPORT
SERVICES
Director
Assistant Director
W I L L I A M S , Assistant Director
FRAZIER,
GEORGE M .
DAVID
PAULEY,
LOPEZ,
OFFICE OF THE EXECUTIVE
INFORMATION
RESOURCES
ALLEN
E.
BEUTEL,
STEPHEN R.
DIVISION
DIRECTOR
FOR
MANAGEMENT
Executive Director
Associate Director
MALPHRUS,
OF HARDWARE
AND
SOFTWARE
SYSTEMS
Director
Assistant Director
E L I Z A B E T H B . R I G G S , Assistant Director
R O B E R T J . Z E M E L , Assistant Director
BRUCE M .
BEARDSLEY,
THOMAS C. JUDD,
DIVISION OF APPLICATIONS
STATISTICAL
SERVICES
WILLIAM R.
DAY
W .
Director
Assistant Director
S T E V E N S , Assistant Director
W E L C H , Assistant Director
JONES,
RADEBAUGH,
RICHARD C.
DEVELOPMENT
ATRICIA A .
Digitized for PFRASER
RESERVE
J R . , Director
Associate Director
D A V I D L . R O B I N S O N , Associate Director
C . W I L L I A M S C H L E I C H E R , J R . , Associate Director
C H A R L E S W . B E N N E T T , Assistant Director
J A C K D E N N I S , J R . , Assistant Director
E A R L G . H A M I L T O N , Assistant Director
J O H N H . P A R R I S H , Assistant Director
L O U I S E L . R O S E M A N , Assistant Director
F L O R E N C E M . Y O U N G , Adviser
CLYDE
WEIS,
GEORGE E.
Staff Director
DIVISION OF FEDERAL
BANK
OPERATIONS
H .
FARNSWORTH,
ELLIOTT C.
JOHN R.
ALLISON,
MULRENIN,
AND
MCENTEE,
84
Federal Reserve Bulletin • February 1988
Federal Open Market Committee
FEDERAL
OPEN
MARKET
COMMITTEE
MEMBERS
ALAN GREENSPAN,
WAYNE D.
EDWARD G.
ROBERT H .
Chairman
E.
ANGELL
H.
BOEHNE
ROBERT
MANUEL H.
BOYKIN
SILAS
EDWARD
HELLER
GARY H .
KEEHN
ROBERT P. BLACK
ROBERT P. FORRESTAL
ROBERT T.
THOMAS M .
W.
MARTHA R.
JOHNSON
ALTERNATE
PARRY
GERALD CORRIGAN,
Vice Chairman
KELLEY, JR.
SEGER
STERN
MEMBERS
W.
LEE
HOSKINS
TIMLEN
STAFF
Secretary and Staff Adviser
Assistant Secretary
R O S E M A R Y R . L O N E Y , Deputy Assistant Secretary
M I C H A E L B R A D F I E L D , General Counsel
E R N E S T T . P A T R I K I S , Deputy General Counsel
E D W I N M . T R U M A N , Economist (International)
P E T E R F O U S E K , Associate Economist
R I C H A R D W . L A N G , Associate Economist
DONALD L.
KOHN,
NORMAND R.V.
BERNARD,
PETER D.
ADVISORY
CROSS,
Manager for Domestic Operations, System Open Market Account
Manager for Foreign Operations, System Open Market Account
COUNCIL
III, Seventh District
Eighth District
D E W A L T H . A N K E N Y , JR., Ninth District
F . P H I L L I P S G I L T N E R , Tenth District
G E R A L D W . F R O N T E R H O U S E , Eleventh District
P A U L H A Z E N , Twelfth District
First District
Second District
S A M U E L A . M C C U L L O U G H , Third District
T H O M A S H . O ' B R I E N , Fourth District
F R E D E R I C K D E A N E , JR., Fifth District
B E N N E T T A . B R O W N , Sixth District
J. TERRENCE MURRAY,
CHARLES
WILLARD C. BUTCHER,
DONALD
LINDSEY,
MICHAEL J. PRELL,
STERNLIGHT,
SAM Y.
FEDERAL
Associate Economist
Associate Economist
A R T H U R J . R O L N I C K , Associate Economist
H A R V E Y R O S E N B L U M , Associate Economist
K A R L A . S C H E L D , Associate Economist
C H A R L E S J . S I E G M A N , Associate Economist
T H O M A S D . S I M P S O N , Associate Economist
DAVID E.
HERBERT V.
PROCHNOW,
T.
N.
FISHER,
BRANDIN,
SECRETARY
WILLIAM J. KORSVIK, ASSOCIATE
SECRETARY
A85
and Advisory Councils
CONSUMER
ADVISORY
COUNCIL
STEVEN W .
EDWARD
Columbia, South Carolina, Chairman
Chicago, Illinois, Vice Chairman
WILLIAMS,
Greensboro, North Carolina
Washington, D.C.
E D W I N B . B R O O K S , JR., Richmond, Virginia
J U D I T H N. B R O W N , Edina, Minnesota
M I C H A E L S . C A S S I D Y , New York, New York
B E T T Y T O M C H U , Monterey, California
J E R R Y D. C R A F T , Atlanta, Georgia
D O N A L D C. D A Y , Boston, Massachusetts
R I C H A R D B. D O B Y , Denver, Colorado
R I C H A R D H . F I N K , Washington, D.C.
N E I L J. F O G A R T Y , Jersey City, New Jersey
S T E P H E N G A R D N E R , Dallas, Texas
K E N N E T H A. H A L L , Picayune, Mississippi
E L E N A G. H A N G G I , Little Rock, Arkansas
NAOMI
G.
HAMM,
J.
ALBANESE,
STEPHEN BROBECK,
THRIFT INSTITUTIONS
ADVISORY
JAMIE J. JACKSON,
S.
M.
CZARNECKI,
Hattiesburg, Mississippi
Phoenix, Arizona
T H O M A S A. K I N S T , Hoffman Estates, Illinois
R A Y M A R T I N , Los Angeles, California
J O E C. M O R R I S , Emporia, Kansas
DUNCAN,
BETTY GREGG,
HESS,
ROBERT J. HOBBS,
COUNCIL
GERALD
ROBERT
Washington, D.C.
Boston, Massachusetts
R A M O N E. J O H N S O N , Salt Lake City, Utah
R O B E R T W. J O H N S O N , West Lafayette, Indiana
A . J . ( J A C K ) K I N G , Kalispell, Montana
J O H N M. K O L E S A R , Cleveland, Ohio
A L A N B. L E R N E R , Dallas, Texas
R I C H A R D L. D. M O R S E , Manhattan, Kansas
W I L L I A M E. O D O M , Dearborn, Michigan
S A N D R A R. P A R K E R , Richmond, Virginia
S A N D R A P H I L L I P S , Pittsburgh, Pennsylvania
J A N E S H U L L , Philadelphia, Pennsylvania
R A L P H E. S P U R G I N , Columbus, Ohio
L A W R E N C E W I N T H R O P , Portland, Oregon
ROBERT A.
Houston, Texas, President
Honolulu, Hawaii, Vice President
W. M O S M I L L E R , Baltimore, Maryland
M. P A V L I S K A , Arlington, Massachusetts
L O U I S H. P E P P E R , Seattle, Washington
W I L L I A M G. S C H U E T T , Milwaukee, Wisconsin
D O N A L D B. S H A C K E L F O R D , Columbus, Ohio
JOSEPH
JANET
A86
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THE
FEDERAL
TIONS.
ANNUAL
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1984.
120
SYSTEM—PURPOSES
AND
FUNC-
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Consumer and Community Affairs Handbook. $75.00 per
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THE
POLICY
$13.50 each.
SERVE SYSTEM.
1974-78.
1981.
1982.
1983.
1984.
1985.
1986.
SELECTED
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Limit of 50 copies
The Board of Directors' Opportunities in Community Reinvestment
A87
The Board of Directors' Role in Consumer Law Compliance
Combined Construction/Permanent Loan Disclosure and
Regulation Z
Community Development Corporations and the Federal Reserve
Construction Loan Disclosures and Regulation Z
Finance Charges Under Regulation Z
How to Determine the Credit Needs of Your Community
Regulation Z: The Right of Rescission
The Right to Financial Privacy Act
Signature Rules in Community Property States: Regulation B
Signature Rules: Regulation B
Timing Requirements for Adverse Action Notices: Regulation B
What An Adverse Action Notice Must Contain: Regulation B
Understanding Prepaid Finance Charges: Regulation Z
Closing the Loan: A Consumer's Guide to Mortgage Settlement Costs
Refinancing Your Mortgage
A Consumer's Guide to Lock-Ins
by Bonnie E. Loopesko. November
1983. Out of print.
VESTIGATION,
134.
SMALL
EMPIRICAL
INTERVENTION:
MODELS
A
OF
REVIEW
EXCHANGE
OF THE
MARKET
LITERATURE,
by
Ralph W. Tryon. October 1983. 14 pp. Out of print.
135.
SMALL
EMPIRICAL
INTERVENTION:
MODELS
OF
EXCHANGE
MARKET
APPLICATIONS TO CANADA,
GERMA-
by Deborah J . Danker, Richard A.
Haas, Dale W. Henderson, Steven A. Symansky, and
Ralph W. Tryon. April 1985. 27 pp. Out of print.
NY,
136.
AND JAPAN,
T H E EFFECTS OF FISCAL POLICY ON THE U . S .
ECONO-
MY, by Darrell Cohen and Peter B. Clark. January
1984. 16 pp. Out of print.
137.
THE
IMPLICATIONS
FINANCIAL
FOR
BANK
DEREGULATION,
MERGER
POLICY
INTERSTATE
OF
BANKING,
FINANCIAL
SUPERMARKETS,
by Stephen A.
Rhoades. February 1984. Out of print.
AND
138.
ANTITRUST
LINES,
LAWS,
AND THE
JUSTICE
DEPARTMENT
GUIDE-
LIMITS OF CONCENTRATION
CAL B A N K I N G M A R K E T S ,
IN
LO-
by James Burke. June 1984.
14 pp. Out of print.
139.
SOME IMPLICATIONS OF FINANCIAL INNOVATIONS
IN
by Thomas D. Simpson and
Patrick M. Parkinson. August 1984. 20 pp.
THE
140.
Summaries Only Printed in the
STAFF STUDIES:
Bulletin
Studies and papers on economic and financial subjects that
are of general interest. Requests to obtain single copies of
the full text or to be added to the mailing list for the series
may be sent to Publications Services.
UNITED
STATES,
GEOGRAPHIC
MARKET
DELINEATION:
by John
1984. 38 pp. Out of print.
THE
141.
LITERATURE,
A
REVIEW
OF
Wolken. November
D.
A COMPARISON OF DIRECT DEPOSIT AND CHECK
PAY-
by William Dudley. November 1984.
15 pp. Out of print.
MENT
142.
COSTS,
MERGERS
BANKS,
AND
ACQUISITIONS
1960-83, by Stephen
BY
COMMERCIAL
Rhoades. December
A.
1984. 30 pp. Out of print.
Staff Studies 115-125 are out of print.
143.
COMPLIANCE
THE
COSTS
ELECTRONIC
AND
CONSUMER
FUND
TRANSFER
BENEFITS
ACT:
OF
RECENT
by Frederick J. Schroeder. April
1985. 23 pp. Out of print.
SURVEY EVIDENCE,
114.
MULTIBANK
DENCE
HOLDING
ON
COMPANIES:
COMPETITION
AND
RECENT
EVI-
PERFORMANCE
IN
144.
by Timothy J. Curry and John T.
Rose. Jan. 1982. 9 pp.
126.
DEFINITION AND MEASUREMENT OF EXCHANGE
127.
U.S.
EXPERIENCE
WITH
EXCHANGE
MARKET
JANUARY-MARCH
1975, by Margaret
Greene. August 1984. 16 pp. Out of print.
U.S.
EXPERIENCE
WITH
VENTION: SEPTEMBER
EXCHANGE
MARKET
1977-DECEMBER
145.
L.
INTER-
1979, b y
146.
U.S.
EXPERIENCE
WITH
EXCHANGE
MARKET
INTER-
147.
EFFECTS
OF
EXCHANGE
RATE
VARIABILITY
TERNATIONAL TRADE AND OTHER ECONOMIC
ON
IN-
148.
CALCULATIONS OF PROFITABILITY FOR U . S .
DEUTSCHE
MARK
TIME-SERIES
TWEEN
STUDIES
EXCHANGE
REVIEW
OF THE
OF
RATES
AND
RELATIONSHIP
INTERVENTION:
AND
LITERATURE,
133.
RELATIONSHIPS
VENTION,
AND
AMONG
EXCHANGE
INTEREST RATES:
AN
THE
ROLE
INTER-
EMPIRICAL
IN-
A
THE
ON
SOURCE
OF
BANK
INCOME
CONSUMERS,
PRIME
RATE
IN T H E
IN
BY C O M M E R C I A L
PRICING
OF
THE
MONETARY
BANKS,
SERVICES
INDEXES OF THE MONETARY
AGGREGATES,
THE
SECTORAL
MACROECONOMIC
AND
THE OPERATING PERFORMANCE
BANKING
STATISTICAL
A
(DIVISIA)
EFFECTS
SOME
OF
SIMULA-
BEFORE
AND
OF ACQUIRED
AFTER
FIRMS
ACQUISITION,
by
COST
ACCOUNTING
REEXAMINATION
AND
MODELS
AN
IN
BANK-
APPLICATION,
by
John T. Rose and John D. Wolken. May 1986. 13 pp.
151.
RESPONSES
PRICING
RATES,
OF
LOANS
REVISIONS
ING:
A
by
AS
IMPACT
Stephen A. Rhoades. April 1986. 32 pp.
BE-
Kenneth Rogoff. October 1983. 15 pp.
CHARGES
THEIR
IN
150.
THE
TECHNIQUES
149.
DOLLAR-
Jacobson. October 1983. 8 pp.
132.
by
by Flint Bray ton and Peter B. Clark.
December 1985. 17 pp.
by Laurence R.
INTERVENTION,
LAWS,
TION RESULTS,
BLES:
131.
SERVICE
AND
THE ECONOMIC RECOVERY TAX ACT:
VARIA-
A R E V I E W O F T H E L I T E R A T U R E , by Victoria S .
Farrell with Dean A. DeRosa and T. Ashby McCown.
January 1984. Out of print.
OPPORTUNITY
by Helen
T. Farr and Deborah Johnson. December 1985. 42 pp.
L. Greene. August 1984. 36 pp.
130.
CREDIT
CONLEND-
1977-84.
by Thomas F. Brady. November 1985. 25 pp.
1981, by Margaret
VENTION: OCTOBER I98O-OCTOBER
EQUAL
BUSINESS
Mar-
garet L. Greene. October 1984. 40 pp. Out of print.
129.
AND
IN
by Glenn B .
Canner and Robert D. Kurtz. August 1985. 31 pp. Out
of print.
INTER-
VENTION:
128.
ING
COSTS FOR
THE TRUTH
Gregory E. Elliehausen and Robert D. Kurtz. May
1985. 10 pp.
MAR-
K E T I N T E R V E N T I O N , by Donald B . Adams and Dale
W. Henderson. August 1983. 5 pp. Out of print.
SCALE E C O N O M I E S IN C O M P L I A N C E
SUMER CREDIT REGULATIONS:
BANKING MARKETS,
TO
FROM
DEREGULATION:
1983
THROUGH
RETAIL
DEPOSIT
1985, by Patrick I.
Mahoney, Alice P. White, Paul F. O'Brien, and Mary
M. McLaughlin. January 1987. 30 pp.
A88
152.
DETERMINANTS OF CORPORATE MERGER ACTIVITY:
REVIEW
OF
THE
LITERATURE,
by Mark
J.
A
War-
shawsky. April 1987. 18 pp.
153.
154.
S T O C K M A R K E T V O L A T I L I T Y , by Carolyn D. Davis
and Alice P. White. September 1987. 14 pp.
THE
EFFECTS
PROPOSED
ON
CONSUMERS
CEILINGS
ON
AND
CREDIT
CREDITORS
CARD
by Glenn B . Canner and James
October 1987. 783 pp.
RATES,
155.
THE
FUNDING
OF
INTEREST
T.
OF PRIVATE PENSION PLANS,
Fergus.
by Mark
J. Warshawsky. November 1987. 25 pp.
REPRINTS
OF BULLETIN
ARTICLES
Most of the articles reprinted do not exceed 12 pages.
Limit of 10 copies
Foreign Experience with Targets for Money Growth. 10/83.
Intervention in Foreign Exchange Markets: A Summary of
Ten Staff Studies. 11/83.
A Financial Perspective on Agriculture. 1/84.
Survey of Consumer Finances, 1983. 9/84.
Bank Lending to Developing Countries. 10/84.
Survey of Consumer Finances, 1983: A Second Report.
12/84.
Union Settlements and Aggregate Wage Behavior in the
1980s. 12/84.
The Thrift Industry in Transition. 3/85.
A Revision of the Index of Industrial Production. 7/85.
Financial Innovation and Deregulation in Foreign Industrial
Countries. 10/85.
Recent Developments in the Bankers Acceptance Market.
1/86.
The Use of Cash and Transaction Accounts by American
Families. 2/86.
Financial Characteristics of High-Income Families. 3/86.
Prices, Profit Margins, and Exchange Rates. 6/86.
Agricultural Banks under Stress. 7/86.
Foreign Lending by Banks: A Guide to International and
U.S. Statistics. 10/86.
Recent Developments in Corporate Finance. 11/86.
U.S. International Transactions in 1986. 5/87.
Measuring the Foreign-Exchange Value of the Dollar. 6/87.
Changes in Consumer Installment Debt: Evidence from the
1983 and 1986 Surveys of Consumer Finances. 10/87.
A89
Index to Statistical Tables
References are to pages A3-A81 although the prefix "A" is omitted in this index
ACCEPTANCES, bankers (See Bankers acceptances)
Agricultural loans, commercial banks, 19, 20
Assets and liabilities {See also Foreigners)
Banks, by classes, 18-20, 70-75
Domestic finance companies, 37
Federal Reserve Banks, 10
Federal Reserve System, 80-81
Financial institutions, 26
Foreign banks, U.S. branches and agencies, 21, 76-79
Nonfinancial corporations, 36
Automobiles
Consumer installment credit, 40, 41
Production, 47, 48
BANKERS acceptances, 9, 23, 24
Bankers balances, 18-20, 70, 72, 74 (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 34
Rates 24
Branch banks, 21, 55, 76-79
Business activity, nonfinancial, 44
Business expenditures on new plant and equipment, 36
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 46
Capital accounts
Banks, by classes, 18, 71, 73, 75
Federal Reserve Banks, 10
Central banks, discount rates, 67
Certificates of deposit, 24
Commercial and industrial loans
Commercial banks, 16, 19, 70, 72, 74, 76
Weekly reporting banks, 19-21
Commercial banks
Assets and liabilities, 18-20
Commercial and industrial loans, 16, 18, 19, 20, 21, 70-75
Consumer loans held, by type, and terms, 40, 41
Loans sold outright, 19
Nondeposit funds, 17
Number, by classes, 71, 73, 75
Real estate mortgages held, by holder and property, 39
Time and savings deposits, 3
Commercial paper, 23, 24, 37
Condition statements (See Assets and liabilities)
Construction, 44, 49
Consumer installment credit, 40, 41
Consumer prices, 44, 50
Consumption expenditures, 51, 52
Corporations
Nonfinancial, assets and liabilities, 36
Profits and their distribution, 35
Security issues, 34, 65
Cost of living (See Consumer prices)
Credit unions, 26, 40. (See also Thrift institutions)
Currency and coin, 18, 70, 72, 74
Currency in circulation, 4, 13
Customer credit, stock market, 25
DEBITS to deposit accounts, 15
Debt (See specific types of debt or securities)
Demand deposits
Banks, by classes, 18-21, 71, 73, 75
Demand deposits—Continued
Ownership by individuals, partnerships, and
corporations, 22
Turnover, 15
Depository institutions
Reserve requirements, 8
Reserves and related items, 3, 4, 5, 12
Deposits (See also specific types)
Banks, by classes, 3, 18-20, 21, 71, 73, 75
Federal Reserve Banks, 4, 10
Turnover, 15
Discount rates at Reserve Banks and at foreign central
banks and foreign countries (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 35
EMPLOYMENT, 45
Eurodollars, 24
FARM mortgage loans, 39
Federal agency obligations, 4, 9, 10, 11, 31, 32
Federal credit agencies, 33
Federal finance
Debt subject to statutory limitation, and types and
ownership of gross debt, 30
Receipts and outlays, 28, 29
Treasury financing of surplus, or deficit, 28
Treasury operating balance, 28
Federal Financing Bank, 28, 33
Federal funds, 6, 17, 19, 20, 21, 24, 28
Federal Home Loan Banks, 33
Federal Home Loan Mortgage Corporation, 33, 38, 39
Federal Housing Administration, 33, 38, 39
Federal Land Banks, 39
Federal National Mortgage Association, 33, 38, 39
Federal Reserve Banks
Condition statement, 10
Discount rates (See Interest rates)
U.S. government securities held, 4, 10, 11, 30
Federal Reserve credit, 4, 5, 10, 11
Federal Reserve notes, 10
Federal Reserve System
Balance sheet for priced services, 80
Condition statement for priced services, 81
Federal Savings and Loan Insurance Corporation insured
institutions, 26
Federally sponsored credit agencies, 33
Finance companies
Assets and liabilities, 37
Business credit, 37
Loans, 40, 41
Paper, 23, 24
Financial institutions
Loans to, 19, 20, 21
Selected assets and liabilities, 26
Float, 4, 81
Flow of funds, 42, 43
Foreign banks, assets and liabilities of U.S. branches and
agencies, 21, 76-79
Foreign currency operations, 10
Foreign deposits in U.S. banks, 4, 10, 19, 20
Foreign exchange rates, 68
Foreign trade, 54
Foreigners
Claims on, 55, 57, 60, 61, 62, 64
Liabilities to, 20, 54, 55, 57, 58, 63, 65, 66
A90
GOLD
Certificate account, 10
Stock, 4, 54
Government National Mortgage Association, 33, 38, 39
Gross national product, 51
HOUSING, new and existing units, 49
INCOME, personal and national, 44, 51, 52
Industrial production, 44, 47
Installment loans, 40, 41
Insurance companies, 26, 30, 39
Interest rates
Bonds, 24
Consumer installment credit, 41
Federal Reserve Banks, 7
Foreign central banks and foreign countries, 67
Money and capital markets, 24
Mortgages, 38
Prime rate, 23
International capital transactions of United States, 53-67
International organizations, 57, 58, 60, 63, 64
Inventories, 51
Investment companies, issues and assets, 35
Investments (See also specific types)
Banks, by classes, 18, 19, 20, 21, 26
Commercial banks, 3, 16, 18-20, 39, 70
Federal Reserve Banks, 10, 11
Federal Reserve System, 80-81
Financial institutions, 26, 39
LABOR force, 45
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 18-20
Commercial banks, 3, 16, 18-20, 70, 72, 74
Federal Reserve Banks, 4, 5, 7, 10, 11
Federal Reserve System 80-81
Financial institutions, 26, 39
Insured or guaranteed by United States, 38, 39
MANUFACTURING
Capacity utilization, 46
Production, 46, 48
Margin requirements, 25
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 6
Reserve requirements, 8
Mining production, 48
Mobile homes shipped, 49
Monetary and credit aggregates, 3, 12
Money and capital market rates, 24
Money stock measures and components, 3, 13
Mortgages (See Real estate loans)
Mutual funds, 35
Mutual savings banks, (See Thrift institutions)
NATIONAL defense outlays, 29
National income, 51
OPEN market transactions, 9
PERSONAL income, 52
Prices
Consumer and producer, 44, 50
Stock market, 25
Prime rate, 23
Producer prices, 44, 50
Production, 44, 47
Profits, corporate, 35
REAL estate loans
Banks, by classes, 16, 19, 20, 39, 72
Real estate loans—Continued
Financial institutions, 26
Terms, yields, and activity, 38
Type of holder and property mortgaged, 39
Repurchase agreements, 6, 17, 19, 20, 21
Reserve requirements, 8
Reserves
Commercial banks, 18, 71
Depository institutions, 3, 4, 5, 12
Federal Reserve Banks, 10
U.S. reserve assets, 54
Residential mortgage loans, 38
Retail credit and retail sales, 40, 41, 44
SAVING
Flow of funds, 42, 43
National income accounts, 51
Savings and loan associations, 26, 39, 40, 42. (See also
Thrift institutions)
Savings banks, 26, 39, 40
Savings deposits (See Time and savings deposits)
Securities (See specific types)
Federal and federally sponsored credit agencies, 33
Foreign transactions, 65
New issues, 34
Prices, 25
Special drawing rights, 4, 10, 53, 54
State and local governments
Deposits, 19, 20
Holdings of U.S. government securities, 30
New security issues, 34
Ownership of securities issued by, 19, 20, 26
Rates on securities, 24
Stock market, selected statistics, 25
Stocks (See also Securities)
New issues, 34
Prices, 25
Student Loan Marketing Association, 33
TAX receipts, federal, 29
Thrift institutions, 3. (See also Credit unions and Savings
and loan associations)
Time and savings deposits, 3, 13, 17, 18, 19, 20, 21, 71, 73,
75
Trade, foreign, 54
Treasury cash, Treasury currency, 4
Treasury deposits, 4, 10, 28
Treasury operating balance, 28
UNEMPLOYMENT, 45
U.S. government balances
Commercial bank holdings, 18, 19, 20
Treasury deposits at Reserve Banks, 4, 10, 28
U.S. government securities
Bank holdings, 18-20, 21, 30, 70, 72, 74
Dealer transactions, positions, and financing, 32
Federal Reserve Bank holdings, 4, 10, 11, 30
Foreign and international holdings and transactions, 10,
30, 66
Open market transactions, 9
Outstanding, by type and holder, 26, 30
Rates, 24
U.S. international transactions, 53-67
Utilities, production, 48
VETERANS Administration, 38, 39
WEEKLY reporting banks, 19-21
Wholesale (producer) prices, 44, 50
YIELDS (See Interest rates)
A91
Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE BANK, Chairman
branch, or facility
Zip
Deputy Chairman
President
First Vice President
BOSTON*
02106
George N. Hatsopoulos
Richard N. Cooper
Frank E. Morris
Robert W. Eisenmenger
NEW YORK*
10045
John R. Opel
To be announced
Mary Ann Lambertsen
E. Gerald Corrigan
Thomas M. Timlen
Buffalo
14240
John T. Keane
PHILADELPHIA
19105
Nevius M. Curtis
Peter A. Benoliel
Edward G. Boehne
William H. Stone, Jr.
CLEVELAND*
44101
Charles W. Parry
John R. Miller
Owen B. Butler
James E. Haas
W. Lee Hoskins
William H. Hendricks
Robert A. Georgine
Hanne Merriman
Gloria L. Johnson
G. Alex Bernhardt
Robert P. Black
Jimmie R. Monhollon
Bradley Currey, Jr.
Larry L. Prince
Roy D. Terry
E. William Nash, Jr.
Sue McCourt Cobb
Condon S. Bush
Sharon A. Perlis
Robert P. Forrestal
Jack Guynn
Robert J. Day
Marcus Alexis
Richard T. Lindgren
Silas Keehn
Daniel M. Doyle
Robert L. Virgil, Jr.
H. Edwin Trusheim
James R. Rodgers
Raymond M. Burse
Katherine H. Smythe
Thomas C. Melzer
James R. Bowen
Michael W. Wright
John A. Rollwagen
Marcia S. Andersen
Gary H. Stern
Thomas E. Gainor
Warren H. Ross
Irvine O. Hockaday, Jr.
Fred W. Lyons, Jr.
James C. Wilson
Patience S. Latting
Kenneth L. Morrison
Roger Guffey
Henry R. Czerwinski
Bobby R. Inman
Hugh G. Robinson
Peyton Yates
Walter M. Mischer, Jr.
Robert F. McDermott
Robert H. Boykin
William H.Wallace
Robert F. Erburu
Carolyn S. Chambers
Richard C. Seaver
Paul E. Bragdon
Don M. Wheeler
Carol A. Nygren
Robert T. Parry
Carl E. Powell
Cincinnati
Pittsburgh
45201
15230
RICHMOND*
23219
Baltimore
21203
Charlotte
28230
Culpeper Communications
and Records Center 22701
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans
30303
35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
Memphis
72203
40232
38101
MINNEAPOLIS
55480
Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
59601
64198
80217
73125
68102
75222
79999
77252
78295
SAN FRANCISCO
94120
Los Angeles
Portland
Salt Lake City
Seattle
90051
97208
84125
98124
Vice President
in charge of branch
1
Charles A.Cerino
Harold J. Swart1
Robert D. McTeer, Jr.11
Albert D. Tinkelenberg
John G. Stoides1
1
Delmar Harrison
Fred R. Herr1
James D. Hawkins11
Patrick K. Barron
Donald E. Nelson
Henry H. Bourgaux
Roby L. Sloan1
John F. Breen
James E. Conrad
Paul I. Black, Jr.
Robert F. McNellis
Enis Alldredge, Jr.
William G. Evans
Robert D. Hamilton
Tony J. Salvaggio1
Sammie C. Clay
Robert Smith, IIP
Thomas H. Robertson
John F. Hoover1 2
Thomas C. Warren
Angelo S. Carella1
E. Ronald Liggett'
Gerald R. Kelly1
*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.
1. Senior Vice President.
2. Executive Vice President.
A92
The Federal Reserve System
Boundaries of Federal Reserve Districts and Their Branch Territories
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LEGEND
Boundaries of Federal Reserve Districts
®
Federal Reserve Bank Cities
Boundaries of Federal Reserve Branch
Territories
*
Federal Reserve Branch Cities
Federal Reserve Bank Facility
Q
Board of Governors of the Federal Reserve
System
@FedFRASER