Full text of Federal Reserve Bulletin : February 1993
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VOLUME 7 9 • NUMBER 2 • FEBRUARY 1993 FEDERAL RESERVE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D . C . PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood • Donald L. Kohn • J. Virgil Mattingly, Jr. • Michael J. Prell • Edwin M. Truman The Federal Reserve Bulletin is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Section headed by S. Ellen Dykes, the Graphics Center under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles. Table of Contents 77 RECENT DEVELOPMENTS IN THE MARKET FOR PRIVATELY PLACED DEBT The market for privately placed debt has undergone major changes in the past three years. Life insurance companies, the principal buyers of privately placed bonds, have significantly reduced their purchases of debt securities issued by below-investment-grade borrowers. In addition, the adoption of Rule 144A in 1990 by the Securities and Exchange Commission has spawned a new market for private debt that is very similar to the public corporate bond market. This article gives an overview of the private placement market and discusses these two developments. 93 INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION Industrial production rose 0.4 percent in November; with the increase of 0.5 percent in October, the rise has more than offset the declines of late summer. Total industrial capacity utilization rose another 0.2 percentage point in November, to 78.9 percent. 96 ANNOUNCEMENTS Appointment of new members to the Thrift Institutions Advisory Council. Issuance of new Regulation F. Adoption of final amendments and guidelines to Regulation H. Modifications of risk-based capital guidelines on certain collateralized transactions. Amendment to risk-based capital guidelines for state member banks and bank holding companies. Issuance of policy statement on the use of large-value fund transfers for money laundering. Reporting of deferred tax assets by bank holding companies. Proposal to amend Regulation C; proposed amendment to Regulation K. Change in Board staff. Publication of revised Bank Holding Company Supervision Manual. 100 RECORD OF POLICY ACTIONS OF THE FEDERAL OPEN MARKET COMMITTEE At its meeting on November 17, 1992, the Committee adopted a directive that called for maintaining the existing degree of pressure on reserve positions and that included some bias toward possible easing during the intermeeting period. Accordingly, in the context of the Committee's long-run objectives for price stability and sustainable economic growth, and giving careful consideration to economic, financial, and monetary developments, slightly greater monetary restraint might be acceptable or slightly lesser monetary restraint would be acceptable during the intermeeting period. Two of the members expressed a strong preference for a symmetric directive with regard to possible intermeeting policy adjustments, while another was firmly persuaded of the desirability of an immediate increase in reserve availability to strengthen the growth of M2. The reserve conditions contemplated at this meeting were expected to be consistent with growth in M2 and M3 at annual rates of about 3'/2 and 1 percent respectively over the three-month period from September through December. 107 LEGAL DEVELOPMENTS Various bank holding company, bank service corporation, and bank merger orders; and pending cases. A1 FINANCIAL AND BUSINESS STATISTICS These tables reflect data available as of December 28, 1992. A 3 GUIDE TO TABULAR PRESENTATION A4 Domestic Financial Statistics A44 Domestic Nonfinancial Statistics A53 International Statistics A69 GUIDE TO STATISTICAL RELEASES AND SPECIAL TABLES A84 INDEX TO STATISTICAL TABLES A86 BOARD OF GOVERNORS AND STAFF A88 FEDERAL OPEN MARKET COMMITTEE AND STAFF; ADVISORY COUNCILS A 9 0 FEDERAL RESERVE PUBLICATIONS BOARD A92 MAPS OF THE FEDERAL RESERVE SYSTEM A94 FEDERAL RESERVE BANKS, BRANCHES, AND OFFICES Recent Developments in the Market for Privately Placed Debt This article was prepared by Mark S. Carey, Stephen D. Prowse, and John D. Rea, of the Board's Division of Research and Statistics, and Gregory F. Udell, who was a visiting economist in the division and is now at the Stern School of Business, New York University. Dana Cogswell and William Gerhardt provided research assistance. The market for privately placed debt has undergone major changes in the past three years. Life insurance companies, the principal buyers of privately placed bonds, have significantly reduced their purchases of debt securities issued by belowinvestment-grade borrowers. In addition, the adoption of Rule 144A in 1990 by the Securities and Exchange Commission has spawned a new market for private debt that is similar to the public corporate bond market. These changes have focused attention on a market that normally receives little publicity because private issuers need not publicly disclose information about themselves or their transactions. Private placements are securities that are exempt from registration with the Securities and Exchange Commission (SEC) by virtue of being issued in transactions that involve no public offerings. (Although "private placements" may be either debt or equity securities, in this article, the term refers only to privately placed debt.) In keeping with the absence of a public offering, private placements are typically offered only to a limited number of wellinformed investors, usually institutions, which also generally do not disclose information about their transactions. The private placement market has long been a significant source of long-term, fixed-rate funds for U.S. corporations. Since 1990, however, below- NOTE. This article is based on a forthcoming staff study by the same authors, "The Economics of the Private Placement Market." investment-grade borrowers have found the availability of funds in the private market to be sharply reduced, as life insurance companies have confined their acquisitions almost exclusively to investmentgrade bonds. This change in the composition of their purchases has occurred because of public concern about the quality of insurers' assets and because of a regulatory reclassification in 1990 of many private placements from investment grade to speculative grade. The reluctance of insurance companies to lend to riskier borrowers, coupled with the failure of other institutions to fill the void, has shut off many medium-sized companies' supply of long-term debt financing. Because any significant return of insurance companies to this segment of the market depends on an improvement in the quality of their other assets, the availability of credit in the below-investment-grade segment of the private market may continue to be limited for some time. The change induced in the private market by Rule 144 A has occurred during the same period but is much different in nature. Rule 144A allows large, sophisticated institutions—defined as qualified institutional buyers (QIBs)—to trade private placements freely among themselves. Relying on the rule, securities firms have begun for the first time to underwrite some new issues, distributing them to QIBs. (Before the adoption of Rule 144A, the conditions under which private placements could be resold effectively prevented the underwriting of private securities.) The advent of underwritten offerings has created a market segment that has many characteristics of the public corporate bond market. This market segment differs significantly from the traditional private market, and it has proved especially attractive to foreign corporations, which can avoid the disclosure requirements of a public offering while still enjoying many of the benefits of the public market. Though the 144A market is still developing and small in size, it could 78 Federal Reserve Bulletin • February 1993 be a major step toward the integration of U.S. and foreign bond markets. 1. Gross issuance of publicly offered and privately placed bonds by nonfinancial corporations, 1975-91 Billions of dollars OVERVIEW OF THE PRIVATE DEBT The private placement market has characteristics in common with both the bank loan and the public bond markets. All three markets are important sources of funds for U.S. corporations. But, as in the bank loan market, borrowers in the private placement market tend to be less well known companies that require lenders to engage in extensive due diligence and loan monitoring. As in the public bond market, private placements are securities, and their issuance is very often assisted by an agent, who provides many of the services performed by underwriters of public bonds. Size of the Market The private placement market is an important source of credit market funds for U.S corporations. Between 1986 and 1991, for example, gross issuance of private placements by nonfinancial corporations averaged $65 billion per year, or nearly 75 percent of that in the public market (table l). 1 In 1988 and 1989, private issuance actually exceeded public issuance, as the financing of acquisitions and employee stock ownership plans boosted private offerings (chart 1). Public issuance surged in 1991, however, partly reflecting the refinancing of outstanding debt, whereas private issuance 1. Gross issuance of publicly offered and privately placed bonds by nonfinancial corporations, 1975—91 Billions of dollars, annual rate Type of bonds Public 1975-80 1981-85 1986-91 21.0 14.7 35.6 19.8 87.6 64.8 SOURCE. Federal Reserve Board and IDD Information Services. 1. Data for gross issuance of private placements are from IDD Information Services, which obtains the data from a survey of investment banks and commercial banks serving as agents in placing the securities. Data for private placements that do not involve an agent are not included. Consequently, reported totals probably understate gross issuance of private placements. A Public bonds MARKET / \ / / — 100 75 / /— / - Y 1 1 50 / Private placements — 1 1 1975 1 1 1 1980 1 1 1 1 1 1985 1 1 1 1 1 25 1 1990 SOURCE. Federal Reserve Board and IDD Information Services. fell. The punitive prepayment penalties normally attached to privately placed debt make refinancing unattractive to issuers even when interest rates are falling. Comparisons of gross issuance of private placements and public bonds tend to overstate the relative importance of the private market as a source of corporate financing because private bonds generally have shorter maturities than public bonds. The median average life of private placements is between six and seven years, whereas that of public bonds is around ten years. Nonetheless, in terms of issues outstanding at year-end 1991, private placements of nonfinancial corporations stood at $250 billion. For comparison, outstandings of public bonds issued by nonfinancial corporations were $800 billion; bank loans to such corporations were $530 billion; and finance company loans to nonfinancial corporations were $150 billion.2 Borrowers The typical borrower in the private placement market is a medium-sized corporation. Large firms tend to issue in the public bond market, and small firms generally borrow only in the bank loan mar- 2. Outstandings of public bonds of nonfinancial corporations are the sum of bonds rated by Moody's Investors Service and publicly issued medium-term notes. Private placements are estimated by subtracting the figure for public bonds from outstandings of all corporate bonds reported in the flow of funds accounts. Data for bank loans and finance company loans are from the flow of funds accounts. Recent Developments in the Market for Privately Placed Debt ket. For a sample of nonfinancial corporations, the median value of assets for those borrowing in the private market was $0.5 billion in 1989, whereas the median for those borrowing in the public market was $1.5 billion. Because issuers are smaller in the private market, issue sizes are also smaller on average than in the public market: Nearly twothirds of the number of all private placements in 1989 were between $10 million and $100 million, whereas more than 85 percent of the public issues were in excess of $100 million (chart 2). For the same year, the median issue size of private placements was $34 million, and the median for public bonds was $150 million. An interaction among issue size, issuing costs, and yields is often thought to be the major reason that medium-sized firms tend to offer their securities in the private rather than in the public market. Issuance costs are lower for a private placement than for a public offering, in part because the issuer does not have to incur the considerable expense of registering the issue with the SEC. Also, most private placements, especially the smaller issues, are not underwritten and thus typically have lower distribution expenses than do public bonds, which are almost always underwritten. In contrast, for those few public and private issues that are of comparable size and quality, yields are generally higher on private placements than on public bonds. The total cost of borrowing for comparable medium-sized issues is thus generally lower in the private market because any higher coupon rate that must be paid there is offset by lower fixed costs of issuance. Total costs for comparable large issues 2. Distribution of private placements and public bonds by size of issue, 1989 Percent of number of issues Private • Public • - — 50 - _ 1 ! — 1 Less than 1 1,1 J 1 , * j • 1-10 10-100 100-250 More than 250 Size of issue, millions of dollars SOURCE. Federal Reserve Board and IDD Information Services. 79 are generally lower in the public market because fixed costs are a smaller percentage of large issues. According to market participants, the break-even point between the two markets is at issue sizes between $75 million and $100 million. Issue size, however, is not the main reason that medium-sized companies borrow in the private rather than in the public market. A more important reason is that lenders must perform extensive credit evaluations of such companies before loans can be extended to them. In any credit transaction, public or private, the lender must determine the financial condition and prospects of the borrower. For large, well-known companies, this task is facilitated by the ready availability of information from many sources. In contrast, for other, less well known companies, a lender cannot obtain information as easily and must collect the necessary information on its own. Moreover, the lender must continue in this effort after the credit is extended in order to adequately monitor the borrower's ability to make timely payments of interest and principal. Because of the information problems that less well known companies present to lenders, they are sometimes referred to as information-problematic borrowers. As a general rule, investors in securities sold in the public bond market are not staffed to analyze information-problematic borrowers, whereas lenders in the private placement market are capable of performing this type of credit analysis. A negative correlation between company size and the degree of informational problems accounts for the differences in the typical sizes of companies borrowing in the private and public markets. Thus, even if total costs for small issues were not lower in the private market, most medium-sized companies would not have access to the public market because of the information problems they pose for lenders. Small firms are typically even more informationproblematic than medium-sized firms. Small firms are seldom able to issue long-term, straight, unsecured debt because the credit risk involved in lending to them cannot be reliably evaluated over a long term. They thus borrow mainly in shorterterm markets, principally the bank loan market, rather than in the private market. Because banks are willing to lend to more information-problematic borrowers, their credit evaluation and monitoring organizations are typically even more extensive than those of insurance companies. 80 Federal Reserve Bulletin • February 1993 Issuance costs are also a factor tending to exclude small businesses from the private debt market. The fixed fees involved in placing debt privately make very small issues uneconomical, especially in comparison to bank loans. Furthermore, most buyers of private placements have little interest in small issues. Consequently, few private placements are less than $10 million in size. Although information-problematic borrowers are generally not large firms, many large corporations have issued in the private market. Such companies normally issue straight debt in the public bond market but turn to the private market for complex transactions. In these cases, the transactions themselves, rather than the borrowers, are difficult to evaluate. Examples of such transactions are project financings, capitalized equipment leases, joint ventures, and new forms of asset-backed securities. Apart from information problems, other special circumstances can lead large corporations to use the private market. A corporation may wish to issue debt quickly or to maintain confidentiality by avoiding the disclosures required for a public offering, or it may wish to include customized features, such as delayed disbursements of funds, in the terms of the offering. Besides being able to accommodate informationproblematic and specialized transactions, the private placement market offers borrowers the opportunity to establish relationships with lenders. The primary disadvantages of private placements in borrowers' eyes are the restrictive covenants and stiff prepayment penalties typically found in private debt contracts. These penalties effectively eliminate a borrower's option to cut interest costs by refinancing debt when market interest rates otherwise would permit. Lenders The major lenders in the private placement market are among those financial intermediaries that specialize in lending to information-problematic borrowers. A financial intermediary is a financial institution that raises funds through the issuance of its own debt or equity and then reinvests the proceeds in financial assets. The types of financial intermediaries and their specializations vary widely. However, those in the private placement market have in common a capacity to evaluate and monitor complex credit transactions. These intermediaries can provide borrowers in the private placement market with more favorable terms than would be available in the public market partly because of their expertise and partly because they are large enough to buy significant fractions of any issue. If many investors each provided only a small part of each borrower's loan, as is typical in the public market, every investor would have to perform costly credit evaluations, and the costs would be passed on to the borrowers. Total costs are reduced when only a few intermediaries lend to information-problematic borrowers because only a few must perform credit evaluations. The major investors in private placements are life insurance companies. At year-end 1991, they held $212 billion of private placements.3 Holdings are highly concentrated: The top five holders of private placements have almost 40 percent of the industry total, and the top twenty hold nearly 70 percent.4 Life insurance companies invest primarily in unsecured, fixed-rate private placements; in keeping with the longer-term nature of their liabilities, the average lives of private placements they purchase are mainly between three and fifteen years (chart 3). Insurance companies prefer private placements falling in the lower end of the investment-grade range of credit ratings (rated A and BBB or the equivalent). For example, at the end of 1991, 37 percent of insurance companies' holdings were rated BBB (chart 4), and the majority of the 46 percent carrying a higher rating were rated A. Before 1990, insurance companies also purchased substantial quantities of below- 3. This figure includes private placements of both financial and nonfinancial corporations but only those held in the general accounts of insurance companies. No' estimate for those held in separate accounts is available. At year-end 1991, corporate and government bonds in separate accounts totaled $67 billion. For comparison, corporate and government bonds in general accounts totaled $810 billion at year-end 1991, of which $212 billion were private placements. 4. The top five holders of private placements hold only 25 percent of the general account assets of all insurance companies, while the top twenty hold 49 percent of all general account assets. The proportion of assets that are privately placed debt securities is naturally larger for these companies: The proportion of private placements in their general account assets is 25.4 percent for the top five and 22.7 percent for the top twenty, but only 9.6 percent for the rest of the industry. Recent Developments in the Market for Privately Placed Debt 3. Distribution of average lives of fixed-rate private placement commitments measured as a percentage of the total value of new private commitments by major life insurance companies, January 1990-July 1992 81 4. Distribution of credit ratings of private placements held by life insurance companies, 1991 SOURCE. National Association of Insurance Commissioners. SOURCE. American Council of Life Insurance. investment-grade private bonds, especially those BB-rated bonds falling just short of investment grade. Life insurance companies are drawn to private placements by their favorable risk-return ratio. Yields on private placements are generally higher than those on comparable public bonds, the higher yield reflecting both the lack of liquidity of private bonds and a return to the more intensive credit analysis required by investors in the private market.5 Credit risk is controlled through covenants that may limit the operations of the borrowers. For example, covenants may restrict the incurrence of additional debt, require the maintenance of a minimum level of net worth or a minimum ratio of cash flow to interest expenses, limit cash payouts to shareholders, or restrict the sale of assets. Violations of covenants serve as a warning that the financial condition of the borrower may be deteriorating.6 Depending on the circumstances of a covenant violation, the lenders may either temporarily waive a covenant, renegotiate the terms of the 5. The insurance companies are able to profit from any illiquidity premium because they hold most private placements to maturity. 6. Many violations of covenants are not associated with deterioration of financial condition. Often a borrower whose condition has not deteriorated will wish to make investments or acquisitions that are forbidden by covenants. In such circumstances, the borrower will attempt to negotiate a waiver of the covenant by the lender. security, or require immediate repayment of principal if the borrower is unable to remedy the violation. The restrictiveness of covenants is inversely related to the credit quality of the borrower. There can also be a trade-off between restrictiveness and the yield on the security. Finally, covenants tend to be more numerous and more restrictive in private placements than in public bonds, partly because of the information-problematic nature of borrowers in the private market. The smaller number of investors in private placements also makes negotiation after violations of covenants more manageable. Life insurance companies attempt to match the duration of their investments in private placements to the duration of their liabilities. Private placements provide flexibility in this regard because maturities and sinking-fund provisions can be tailored to meet specific needs. In addition, private placements are seldom prepaid because they have strong call protection. In 1991, for example, almost 20 percent of the private bonds purchased by the largest life companies were noncallable. Another 70 percent had prepayment provisions that not only enable the insurance companies to replace any redeemed bonds at no reduction in interest income but that also require issuers to pay a penalty in the event of prepayment. Consequently, the primary reason a borrower prepays a private placement is to escape the confines of restrictive covenants. The most important investors in private placements other than insurance companies have been finance companies and pension funds. Finance companies specialize in the highest-risk private 82 Federal Reserve Bulletin • February 1993 placements and, consequently, usually require collateral and equity features such as warrants or options to convert bonds to equity. Most investments in private placements by finance companies are held by only about a half dozen large firms. Similarly, only a handful of pension funds are active investors in private placements. Most pension funds are geared primarily toward investing in public bonds and have not built up staff to perform the credit analysis and monitoring that is required of investors in private placements. Origination, Negotiation, and Distribution Most issuers of private placements enlist the services of an agent, typically an investment bank or commercial bank, for advice and assistance in selling the securities. Initially, the agent helps the issuer to prepare an offering memorandum, which contains information about the issuer's business, financial condition, and prospects, and a term sheet, which contains the proposed terms of the offering. Both are sent to prospective investors, which use them to make a preliminary evaluation of the issuer's credit quality and to negotiate the final terms of the offering. Once the terms have been agreed upon, investors then verify the portrait of the issuer's business operations and financial condition painted by the offering memorandum. An investor's analysis at this stage typically includes an on-site visit to the company. From start to finish, a routine transaction takes four to six weeks to complete. In distributing the securities, agents typically operate on a "best-efforts" basis. In contrast to an underwriter, an agent is under no obligation to purchase the securities, so the issuer is not guaranteed funds. The use of a best-efforts distribution mechanism reflects primarily the economics of placing the debt of information-problematic borrowers: The risk associated with the failure to place an issue is so great that such borrowers find bearing it themselves less costly than hiring an underwriter to bear it for them. Until the adoption of Rule 144A, underwriting was also effectively precluded because an underwriting might constitute a public offering. Some issuers choose not to use an agent and instead place their securities directly with inves- tors. In most cases, such direct placements are sold to lenders with which the issuer has had a previous borrowing relationship, although a few insurance companies also solicit and originate new business. One advantage of a direct placement is the saving of the agent's fee. Also, if the direct placement follows a previous transaction between the same parties, investors may be able to offer better terms and faster execution. Nonetheless, even among repeat borrowers in the private market, direct placements constitute only a minority of offerings. Agents have better information than issuers about market conditions and investors' preferences, and they are experienced negotiators. Issuers thus generally can achieve lower borrowing costs by using agents, even taking into account their fees. Relationship to Other Markets The private placement market is most frequently compared with the public bond market, primarily because the debt instruments issued in both markets are securities. Despite this similarity, the private placement market has much more in common with the bank loan market, even though their debt instruments are different. Borrowers in both the bank loan and private placement markets are information-problematic, and lenders in both markets are financial intermediaries specializing in credit evaluation and monitoring. Consequently, the typical medium-sized borrower in the private placement market generally views a bank loan as the closest alternative to a private placement. A given borrower, however, would not find bank loans and private placements to be perfect substitutes, because the characteristics of financings available in the two markets typically differ. Bank loans have short and intermediate maturities, generally of no more than seven years; in contrast, private placements are intermediate to long term in maturity. Bank loans normally carry floating rates and can be prepaid at par, whereas private placements are usually fixed-rate securities with substantial prepayment penalties.7 The differences in matu- 7. The significance of the difference in types of interest rates is lessened somewhat by the availability of interest rate swaps. Swaps are costly, however, especially for many information-problematic borrowers. Recent Developments in the Market for Privately Placed Debt rities and types of rate prevalent in the two markets largely reflect differences in the duration of bank and life insurance company liabilities. Because of the differences in maturities between bank loans and private placements, borrowers generally view the two forms of credit as competitive only for maturities of three to seven years. A borrower planning to raise funds in this range of maturities will compare the total cost of bank loans and private placements and base its decision on both the price and nonprice terms of the instruments.8 Differences in maturities across the bank loan and private placement markets also influence the characteristics of the average borrower and the terms of the average loan. As noted, it is difficult to evaluate the credit risk of very informationproblematic firms, which are typically small, over the long term. Thus smaller, more-informationproblematic firms are much more frequently found in the bank loan market. Because the average borrower in the bank loan market is more informationproblematic, the average bank loan has more and tighter covenants than the average private placement. THE CREDIT CRUNCH Since the middle of 1990, issuers of belowinvestment-grade securities have encountered a sharp contraction in the availability of credit in the private placement market. Interest rate spreads on these securities have risen significantly, indicating that the reduction in supply has been larger than any decline in credit demand associated with the weak economy. This situation has been termed a credit crunch because it has resulted mainly from a greater reluctance of life insurance companies to assume below-investment-grade credit risk. The sources of this reluctance have been the threat of redemptions by liability holders (policyholders and others), asset-quality problems, and regulatory changes. 8. This choice, as noted above, is relevant only for mediumsized firms. Small firms typically do not have access to the private placement market because they are too information-problematic. 83 2. Gross issuance of private placements by nonfinancial corporations, 1989-911 Billions of dollars except as noted Type of issuance Below-investment-grade ... 1989 1990 1991 54.7 6.6 49.9 8.1 42.9 3.8 12.1 16.2 8.9 MEMO Ratio of below-investmentgrade to total (percent) .. 1. Excludes restructuring-related issues in excess of $250 million and issues to finance employee stock ownership plans. SOURCE. IDD Information Services. Issuance and Yields Evidence of reduced credit availability can be seen both in the volume of issuance of belowinvestment-grade private placements and in spreads between yields on investment-grade and belowinvestment-grade private bonds. Gross issuance by below-investment-grade, nonfinancial corporations fell more than 50 percent in 1991, a much steeper drop than that by investment-grade corporations (table 2).9 As a percentage of gross offerings, below-investment-grade issuance declined from 16 percent in 1990 to 9 percent in 1991. Although data for 1992 are not yet available, preliminary information suggests that the low volume of lowgrade issuance persisted last year. Information available since 1990 from a survey of major life insurance companies by the American Council of Life Insurance (ACLI) confirms the decline in gross issuance of low-grade private placements and points to a significant restructuring in the composition of life insurers' holdings of private placements.10 Although total commitments to purchase private placements remained roughly constant from early 1990 through mid-1992, the proportion of below-investment-grade issues dropped sharply in the middle of 1990 and declined further in the second half of 1991 (chart 5). Over 9. Gross issuance excludes offerings to finance employee stock ownership plans (ESOPs) and restructurings. Underlying developments are more evident with their exclusion, as both were heavy in 1989 but fell off sharply in 1990 and 1991. 10. Respondents to the survey hold approximately two-thirds of all private placements in the general accounts of life insurance companies. 84 Federal Reserve Bulletin • February 1993 5. N e w commitments to purchase below-investmentgrade private placements as a percentage of total new commitments by major life insurance companies, 1990-921 6. Yield spreads on privately placed corporate bonds, 1 9 9 0 - 9 2 : Q 2 [ Percent Difference between BB spread and BBB spread 1990 1991 250 19922 1. Data are semiannual. 2. 1992:H2 is July at a semiannual rate. SOURCE. American Council of Life Insurance. 200 150 the entire period, the share of below-investmentgrade securities in total commitments fell from 15 percent to 3 percent. The reduced rate of gross purchases indicated by the survey is also evident in insurance companies' holdings of below-investment-grade securities. Holdings of such securities at all life insurers fell 11 percent in 1991, while holdings of investment-grade securities rose nearly 12 percent. As a result, speculative-grade private bonds as a percentage of all private placements in insurance company portfolios declined from 19.8 percent in 1990 to 16.4 percent in 1991. The low rates of commitments to purchase below-investment-grade private issues reported in the 1992 ACLI surveys suggest that the insurance industry pared holdings further last year. Accompanying the decline in gross issuance and outstandings has been a sharp increase in yield spreads on below-investment-grade private placements. According to market reports, before 1990 the difference between yields on BB (below investment grade) private placements and BBB (investment grade) private placements, otherwise having comparable terms, was about 100 basis points; since then, the difference has been as high as 250 basis points. Although data are unavailable for periods before 1990, the relative movement in yields on private bonds rated BB and BBB is 1. Data are quarterly weighted averages. SOURCE. American Council of Life Insurance. confirmed in the spreads reported in the ACLI survey (chart 6).11 During the first half of 1990, the spread between yields on BB private placements and comparable Treasury securities was about 300 basis points, compared with 190 basis points on BBB private placements. From that point, the spread on BB bonds moved up to almost 425 basis points in the second quarter of 1991, although in the second quarter of 1992 it retreated to around 350 basis points. During the same period, the BBB spread drifted down to 180 basis points. Similarly, 11. Care must be used in interpreting the reported spreads. Although they are transaction prices, they do not reflect a standardized security. The nonprice terms of private placements can differ widely for bonds carrying the same credit rating, and the terms affect the yields. For example, in early 1992, the difference in spreads between the highest-risk BB issue and the lowest-risk BB issue reportedly was as much as 150 basis points. Under normal circumstances, averaging spreads within a rating category produces a representative spread for that rating. However, as most of the BB bonds issued since mid-1990 probably were at the least risky end of that risk range, the increase in the BB spread shown in chart 6 likely understates the actual increase. Recent Developments in the Market for Privately Placed Debt the spread on A-rated private placements varied little over the past three years.12 Sources of the Credit Crunch The combination of a decline in gross issuance of below-investment-grade private placements and an increase in spreads over Treasuries since mid-1990 is consistent with a decrease in the supply of loanable funds to this sector. Although the demand for funds surely declined with the falloff in general economic activity during the period, the increase in spreads in this market segment indicates that a much greater reduction occurred in the supply of funds. A contraction in supply, however, does not necessarily imply a credit crunch, as credit availability can decrease and lending terms tighten for many reasons, sifch as an increase in the riskiness of borrowers. In general, a credit crunch occurs when, for a given price of credit, lenders substantially reduce the volume of credit provided to a group of borrowers whose risk is essentially unchanged. That is, a credit crunch is caused by a reduction in lenders' willingness to make risky investments or by a "flight to quality" by lenders. A credit crunch always involves a reduction in the supply of credit; it does not necessarily involve an increase in interest rates paid by borrowers, because a reduction in the volume of lending may be accomplished by nonprice rationing. This definition of a credit crunch does not include a reduction in supply that is a response to a recession or an economic slowdown. In such circumstances, the riskiness of borrowers normally increases. Lenders demand compensation either in the form of higher interest rates or tighter nonprice terms of loans. Although borrowers may characterize such a reduction in credit supply as a credit crunch, such a characterization is not appropriate 12. In the public high-yield bond market, spreads increased sharply from mid-1989 through 1990 but have since fallen significantly, although they remain above the levels that prevailed in early 1989. Issuance of public junk bonds stopped almost completely during 1990 and most of 1991 but surged in 1992 to the second highest level ever. Thus, experience in the public junk bond market has been significantly different from that in the market for belowgrade private debt. 85 because the decrease in credit is a normal response of lenders to changing economic conditions.13 A credit crunch can occur for several reasons. It may result from actions taken by regulators that affect lenders' ability or incentive to assume certain risks. It may also result from internal developments at lending institutions, such as unexpectedly large loan losses, that cause portfolio rebalancings involving greater conservatism in lending. For lenders that are financial intermediaries, a credit crunch may result from concerns of liability holders about the intermediaries' financial condition. The ability of intermediaries to raise funds to support their investment activity may be adversely affected in such circumstances, leading to their adoption of more conservative investment strategies to restore public confidence. All these reasons appear to have played a role in the withdrawal of life insurance companies from the below-investment-grade sector of the private placement market. The regulatory change, which was adopted by the National Association of Insurance Commissioners (NAIC) in June 1990 and became effective at the end of that year, introduced finer distinctions in the NAIC's credit ratings of corporate bonds, including private placements. Under the old rating system, many securities, especially public bonds, with credit quality equivalent to BB or B received an investment-grade rating. To correct this shortcoming, the NAIC adopted a rating system with categories more closely aligned with those in the public market (table 3). Although insurers' actual holdings were probably little changed, the reclassification resulting from the new system caused insurers' reported holdings of below-investment-grade bonds, both private and public, to rise from 15 percent of total bond holdings to 21 percent between 1989 and 1990. The level of reported holdings of high-yield bonds jumped more than 40 percent. 13. Some economic theories and empirical studies suggest that a significant amount of nonprice rationing of credit occurs even during normal times and that this rationing becomes much more extensive during economic downturns as borrower risk increases. The increase in nonprice rationing is sometimes referred to as a credit crunch. Such a mechanism may have operated to reduce credit availability in the private market during the period of interest here, but it is different and probably less important in explaining recent experience in the below-investment-grade segment of the private market than the reduction in lenders' willingness to bear risk. 86 3. Federal Reserve Bulletin • February 1993 NAIC credit ratings NAIC rating designation Equivalent ratingagency designation Old system1 Yes No* No** No AAA to B BB, B CCC or lower In or near default New system 2 1 2 3 4 5 6 AAA to A BBB BB B CCC or lower In or near deafult 1. The asterisks appended to the "No" ratings are part of the rating designation. 2. Effective December 31, 1990. SOURCE. Securities Valuation Office, National Association of Insurance Commissioners. The sudden appearance of a much increased percentage of below-investment-grade securities on the balance sheets of life insurance companies focused the attention of policyholders and other holders of insurance company liabilities on the composition of insurers' bond holdings. As evidence of increased public sensitivity, a recent study found that stock prices of insurance companies with high concentrations of junk bonds were adversely affected in early 1990 by the publicity surrounding the financial problems of First Executive Corporation, whose insurance units subsequently failed because of losses on junk bonds. In contrast, stock prices of insurance companies with little exposure to junk bonds were not affected.14 The public's greater sensitivity to the quality of life insurance companies' assets discouraged many insurers from purchasing lower-quality private placements out of fear that they might lose insurance business to competitors with lower proportions of below-investment-grade bonds in their portfolios.15 High proportions of poorly performing commercial mortgages in insurance company portfolios are 14. See George Fenn and Rebel Cole, "Announcement of AssetQuality Problems and Stock Returns: The Case of Life Insurance Companies," in Proceedings of the 28th Annual Conference on Bank Structure and Competition (Federal Reserve Bank of Chicago, 1992), pp. 818-42. 15. Another regulatory change raised reserves held against some below-investment-grade bonds and lowered reserves on bonds rated A or higher. Also, the time allowed to reach the mandatory reserve levels was shortened. Of the two regulatory changes, the new structure of ratings likely had the greater effect on insurance companies' willingness to hold below-investment-grade bonds because many companies had sufficient reserves to meet the fully phased-in standards. another factor causing the reduced availability of credit to below-investment-grade borrowers. Commercial mortgages make up 25 percent of general account assets at the twenty largest insurance companies, which include most of the major participants in the private placement market. Additional exposure to commercial real estate risk comes from direct real estate investments, which at many life insurance companies consist primarily of real estate-related limited partnerships. Delinquency and foreclosure rates on these commercial real estate investments have risen sharply over the past two years, as the press has widely reported. These problems have further heightened public awareness of the financial problems of life insurance companies and have thus added to the pressure on those with significant holdings of commercial real estate loans to shift out of all lower-quality assets. Also, because even sound commercial real estate loans have turned out to be riskier than anticipated at the time they were made, life insurance companies have shifted investments toward high-quality assets. A final development pressuring insurance companies to restrict purchases of below-investmentgrade private placements has been the concern of credit rating agencies about the lack of liquidity of private placements, especially below-investmentgrade ones. This concern appears to be a consequence of the July 1991 collapse of Mutual Benefit Life Insurance Company, which lacked the liquidity needed to meet heavy redemptions by policyholders. Driven by a fear of being downgraded, insurance companies have sought more liquidity in their bond portfolios by concentrating on highergrade credits, which are more readily sold in the secondary market. The individual importance of these three factors as causes of the credit crunch is hard to isolate, although all three certainly contributed. They are, however, interrelated. For example, the new NAIC rating system probably would have had a much smaller effect if insurance companies had not experienced problems with commercial real estate loans. Furthermore, the new rating system, combined with the failure of First Executive, served to focus public attention on the potential riskiness of below-investment-grade private placements. In any case, the main impetus behind the credit crunch has been a perception by life insurance companies that Recent Developments in the Market for Privately Placed Debt liability holders might lose confidence in them and redeem insurance policies, annuities, and guaranteed investment contracts. Outlook and Alternative Sources of Credit As a group, life insurance companies are not likely to resume investing in below-investment-grade private placements at pre-1990 levels until their asset problems have improved and public concern about the health of the industry has diminished appreciably. As this improvement hinges mainly on a recovery of the commercial real estate market, many analysts expect that insurers will remain reluctant to provide funds to the low-grade sector of the private market for the foreseeable future. This prospect has already led some insurers to cut staff and fo reduce resources devoted to credit evaluation and monitoring. If the cutbacks become widespread, the long-run ability of the insurance industry to supply credit to medium-sized, belowinvestment-grade companies could be severely impaired. Risk-based capital standards, which become effective at the end of 1993, could reinforce the reluctance of insurance companies to buy belowinvestment-grade securities. The new standards are aimed at measuring the prudential adequacy of insurers' capital as a means of distinguishing between weakly capitalized and strongly capitalized companies. To this end, insurance companies will report the ratios of their book capital to levels of capital that are adjusted for risk. As an insurer's ratio falls progressively below one, successively stronger regulatory actions will be triggered. In the current environment, most insurers will probably attempt to achieve ratios in excess of one. One way insurers can raise their risk-based capital ratios is to shift into low-risk assets. In this regard, below-investment-grade securities carry risk weights much higher than those on investmentgrade bonds and even commercial mortgages. Over time, however, as the financial condition of insurance companies improves and public concern about their health recedes, insurers will be more inclined to consider risk-adjusted returns in reaching investment decisions and thus may allocate a greater proportion of assets to higher-risk categories, such as below-investment-grade bonds. 87 Despite the almost three-year absence of insurance companies from the below-investment-grade sector and the persistence of high spreads, other institutions have not picked up much of the slack. New lenders must bear the costs of investment in credit analysis capabilities. Startup costs may account for the failure of pension funds to fill the gap, even though their demands for long-term, fixed-rate investments appear to make them natural investors in private placements. Few funds currently have the staff of credit analysts needed to support significant lending in the belowinvestment-grade private market. Most pension funds also are reluctant to make long-term investments in a market with which they are unfamiliar. Another way for pension funds as well as others not currently investing in private placements to enter the market is through managed investment funds. Although several funds have been formed in the past two years, they are not likely to expand to a scale sufficient to fill the void left by the insurance companies, in part because pension fund managers are reportedly reluctant to invest even indirectly in a market with which they are unfamiliar. Insurance companies, which would be the primary source of the managerial resources necessary for operation of managed private placement funds, have thus far not set up funds on a large scale, even though some companies currently have excess capacity to analyze and monitor lower-quality credits. Some of them are unwilling to make a longterm commitment of resources to this effort because they expect to eventually resume investing in below-investment-grade private placements for their own accounts. Also, most institutional investors expect insurance companies acting as investment managers to purchase some of the securities for their own accounts. Such a requirement lessens the incentive to establish managed funds because of insurers' current aversion to purchasing belowinvestment-grade bonds. Nor have other institutions appreciably stepped up their lending in the below-investment-grade sector of the private market. Finance companies' participation has traditionally been in the highest-risk segment of the market, a segment in which life insurance companies are not generally active. Insurers typically made unsecured loans, mainly to the highest-quality speculative-grade borrowers. In contrast, finance companies specialize in secured 88 Federal Reserve Bulletin • February 1993 lending, normally with equity features attached. Thus, the risk-return profile of the typical insurance company borrower does not suit finance companies, nor would such borrowers generally find finance companies' terms attractive. Confronted with few opportunities to borrow in the private market, below-investment-grade companies have turned to various alternatives. Some have elected to borrow from banks, even though bank loans are imperfect substitutes for private placements because of their shorter maturities and floating interest rates. By doing so, these companies have forgone the opportunity to refinance shorterterm debt with longer-term private placements, and some have also found that banks have significantly tightened terms. Other low-rated companies have issued equity, taking advantage of favorable stock market conditions in 1991 and early 1992. In some cases, the improved financial condition resulting from equity injections has raised issuers' credit ratings to investment grade, giving them renewed access to the private bond market.16 The public junk bond market, despite its revival in the latter half of 1991, has not been a source of funds for the typical below-investment-grade private issuer, which is generally too small and too complex a credit for the public market. EFFECT OF RULE 144A ON THE PRIVATE PLACEMENT MARKET The adoption of Rule 144A by the SEC in April 1990 paved the way for the development of a new market for private debt that is much more like the public bond market than the older or traditional private placement market.17 Rule 144A permits unrestricted secondary trading of private placements among sophisticated institutional investors, designated in the rule as qualified institutional buyers (QIBs). As a general matter, sellers of outstand- 16. Some analysts have suggested that a new rating system for private placements recently introduced by Standard and Poor's (S&P) may permit some marginal companies to achieve an investment-grade rating. In contrast to many other rating schemes, S&P's new system considers covenant protection in assigning a rating. 17. Rule 144A applies to both debt and equity securities; however, the discussion deals only with debt securities. ing private placements must take steps to ensure that the sales do not indirectly constitute a public offering, which would violate the basis for the exemption from registration with the SEC. Under Rule 144A, QIBs are not viewed as being a part of the public, and thus they can freely trade private placements among themselves. This treatment of QIBs made it clear that securities firms could underwrite new issues of private placements, as long as the securities were sold to QIBs. Before the adoption of Rule 144A, private placements were not underwritten, as the underwriters' sales of the securities to investors might have been interpreted as a public distribution. In the aftermath of Rule 144A, securities firms have begun to underwrite private placements on a firm commitment basis, sparking the development of the new 144A market. More specifically, the ability to underwrite private placements means that for the first time debt can be distributed in the private market much as it has been in the public market. Consequently, "public-like" borrowers with a desire to avoid public registration now have an alternative to both the public market and the traditional private market. The emergence of the 144A market thus bridges a gap between the public and private markets, providing a more efficient means for large borrowers that do not have the informational problems of the typical issuer of private debt to issue in the private market. The SEC's purposes in adopting Rule 144A were twofold. One purpose was to increase market liquidity. The other was to draw more foreign issuers to the private placement market by increasing liquidity and thus lowering the differential between private and public interest rates. Foreign companies had not been frequent issuers in public markets primarily because they found the registration requirements expensive and burdensome, especially the stipulation that financial statements be reconciled with generally accepted accounting principles in the United States.18 Although foreign companies have long been able to bypass these obstacles by issuing debt in the private market, 18. Despite appearances, the burden of registration and disclosure requirements may not be as great as perceived by many potential foreign issuers. See Charles E. Engros, Jr., "United States Private Placements," (client memorandum, Lord Day & Lord, Barrett Smith, New York, N.Y., January 1992), pp. 5-9. Recent Developments in the Market for Privately Placed Debt they had not done so to any great extent, in part because of the higher yields on private placements. The negotiation of terms and frequent inclusion of restrictive covenants in private debt also made the private market unattractive to foreign companies. The SEC justified the removal of the resale restrictions on trades between QIBs on the grounds that the Congress had never considered sophisticated, institutional investors to need the protection offered by the registration of securities. Rather, the purpose of registration was to protect unsophisticated, individual investors. The SEC therefore concluded that if secondary transactions involved only sophisticated investors, such transactions would not constitute a public distribution and thus could be carried out without restriction.19 As defined in Rule 144A, QIBs are financial institutions, corporations, and partnerships owning and investing qn a discretionary basis at least $100 million in securities.20 The scope of this definition is broad enough to include life insurance companies, pension funds, investment companies, foreign and domestic banks, master and collective bank trusts, and savings and loan associations. Besides meeting the securities test, banks and savings and loans must have net worth of at least $25 million, a condition imposed by the SEC because it believed that securities holdings alone did not necessarily reflect the appropriate degree of investor sophistication for institutions having insured deposits.21 In contrast to other institutional investors, broker-dealers must own only $10 million of securities to qualify as a QIB. The SEC opted for the lower level to avoid excluding a significant number of broker-dealers that were actively participating in the private market.22 19. U.S. Securities and Exchange Commission, SEC Docket, 42 (November 1988), pp. 97-102. 20. Bank deposit notes and certificates of deposit, loan participations, repurchase agreements, and currency and interest rate swaps are excluded. When Rule 144A was adopted, the SEC also excluded U.S. government and agency securities, but amendments to the rule in October 1992 removed this exclusion. 21. U.S. Securities and Exchange Commission, "Resale of Restricted Securities; Changes to Method of Determining Holding Period of Restricted Securities under Rules 144 and 145: Final Rule, Rule Amendments and Solicitation of Comments" (April 23, 1990), pp. 17-20. 22. SEC, "Resale of Restricted Securities," p. 21. 89 Besides requiring that transactions be confined to QIBs, Rule 144A stipulates that three other conditions must be met. First, to ensure the availability of a minimal amount of information, an issuer must provide buyers with copies of its recent financial statements and basic information about its business. Second, when issued, privately placed securities must not be of the same class as any of the issuer's securities already traded on a U.S. stock exchange or on the NASDAQ system. This requirement is intended to prevent the development of an institutional market in publicly traded securities. Third, the seller of 144A securities must take "reasonable steps" to inform the buyer that the sale is occurring pursuant to Rule 144A. Size of the 144A Market The 144A market is still developing and consequently is small compared with the traditional private market and, especially, the public bond market. In 1991, the first full year Rule 144A was in place, gross issuance of 144A securities was $17 billion, representing about 20 percent of the volume in the traditional market (table 4). 23 Offerings were up significantly from roughly $2 billion in 1990, but, of course, the rule was in effect only for part of that year, and time was required to bring issues to market after its adoption. Preliminary press reports suggest that the volume of issuance perhaps doubled during the first half of 1992; in contrast, non-144A issuance was down significantly during that period.24 23. These data include all securities issued using the documentation for a financing pursuant to Rule 144A. As a consequence, both underwritten and non-underwritten private placements are included in the data. Unfortunately, the two cannot be separated, although it is the underwritten securities that primarily constitute the new 144A market. Market estimates of underwritten offerings for 1991 go as high as more than $3 billion. See Michael Vachon, "Underwritten Issues Could Spur Expansion of the Rule 144A Market," Investment Dealers' Digest, vol. 58 (January 6, 1992), pp. 13-14. The pace of underwritten offerings was reportedly much faster in 1992, with one estimate placing the volume during the first half of 1992 at $2.5 billion. See Victoria Keefe, "Underwritten 144A Deals Surge," Corporate Financing Week, vol. 18 (August 31, 1992), pp. 1 and 10. 24. Michael Vachon, "Too Much Cash, Too Few Deals," Investment Dealers' Digest, vol. 58 (August 31, 1992), pp. 23-24. 90 4. Federal Reserve Bulletin • February 1993 Gross issuance of debt in public and private markets, 1989-91 Billions of dollars Market 1989 ,990 135 20 Public bonds 189 9 llipi ^ ,991 2 * 17 6 95 16 76 13 204 15 307 20 Rule 144A private placements .. By foreign issuers Traditional private placements .. By foreign issuers | * Less than $500 million. SOURCE. IDD Information Services. Characteristics of 144A Securities Underwritten offerings of 144A securities now have many of the features of publicly offered bonds. The terms and documents generally conform to the standards used in the public market; in particular, the bonds have "public style" covenants, which are fewer in number and considerably less restrictive than those found in many traditional private placements. Many components of issuance costs are the same as those in a public offering, although the issuer does avoid the considerable expense associated with public registration. Underwritten 144A securities also have two credit ratings, are not highly structured, and are usually transferred through the book-entry system operated by the Depository Trust Company. In many instances, offering memoranda have been styled to be similar to prospectuses used in public offerings. This procedure has been followed primarily as a part of the underwriters' efforts to market the private placements to traditional public-market investors, such as mutual funds, pension funds, and groups within insurance companies that invest in public bonds.25 The average size of underwritten private placements has been comparable to that of public offerings. Finally, the terms of the securities are not negotiated with investors but are set before the offering. Despite the similarity to public bonds, underwritten 144A securities as a group still differ from public bonds, especially with regard to liquidity, and thus their yields on average contain a pre- 25. See Vachon, "Too Much Cash," pp. 23-24. mium.26 In the first year of the market, the premium was reported to be about the same as that on traditional private placements. Recent reports suggest, however, that the liquidity of 144A securities has increased and that the premium has decreased as major dealers have allocated capital and traders to making markets for 144A securities.27 Foreign Issuers Thus far, foreign issuance has made up a much larger proportion of the 144A market than it has of either the traditional private or public bond markets. Of the $16.7 billion of 144A offerings in 1991, foreign companies or their U.S. subsidiaries were responsible for about one-third (table 4). In contrast, foreign issuers placed only 16 percent of offerings in the traditional private market, and only 7 percent of public offerings were foreign related. Preliminary data for the first half of 1992 suggest that foreign issuance likely made up an even larger share of the 144A market last year.28 Several factors appear to lie behind foreign use of the 144A market. One is that the adoption of Rule 144A itself served to publicize the already existing advantages of the private placement market to foreign companies. The effect of the rule has thus been to alter foreigners' perception that all offerings in the United States were subject to excessive regulatory burdens. Moreover, since adoption of the rule, investment banks have devoted more effort to bringing foreign issuers into the private market. A second factor boosting foreign issuance has been the low level of yields in the United States relative to European countries. The 1992 increase in foreign issuance in the public bond market to a record level attests to the yield advantage of U.S. 26. Some additional reasons for the premium are that lenders typically demand a slightly higher rate from foreign issuers and also from first-time issuers. 27. See Keefe, "Underwritten 144A Deals Surge," p. 10. 28. The foreign share of the 144A market could be higher than indicated because the data do not always list U S . subsidiaries of foreign corporations as foreign issuers. Other sources of information, in fact, give foreign issuers a larger share of the 144A market. See Moody's Investors Service, "Recent Developments in the 144A Private Placement Market: A Rating Agency Perspective," Moody's Special Comment (New York, N.Y., February 1992) and U.S. Securities and Exchange Commission, "Staff Report on Rule 144A" (September 30, 1991). Recent Developments in the Market for Privately Placed Debt markets. A final factor is that the premium in yields on foreign bonds issued in the private market has reportedly declined. Domestic Issuers Although foreign use of the 144A market has received considerable attention, domestic issuance has also been significant. In 1991, U.S. companies accounted for about two-thirds of the volume, and they likely maintained their presence in 1992. Domestic issuers in the 144A market typically are larger companies with special circumstances that preclude issuing in the public bond market. In some cases, the companies are not registered with the SEC and do not want to incur the time and expense required to register securities. Among these are private companies that, in the past, have borrowed in the traditional private market but now find more favorable pricing and terms in the 144A market. Also included are unregistered subsidiaries of publicly registered parents that are issuing debt in the subsidiaries' names. In other cases, companies with outstanding public securities have turned to the 144A market to protect the confidentiality of the specific circumstances leading to the borrowing, or they have highly structured transactions that are more easily accommodated in the private market. As these examples imply, unless special circumstances are involved, borrowing costs generally are lower in the public bond market. Investors In the first year and a half after the adoption of Rule 144A, life insurance companies made up the largest single group of investors in 144A private placements, purchasing nearly 75 percent of all nonconvertible debt, according to estimates compiled by the SEC. The second largest group of buyers during this period was mutual funds, accounting for a little more than 10 percent of the volume of nonconvertible debt.29 More recently, 29. At the time Rule 144A was adopted, the SEC took deliberate steps to foster the participation of mutual funds in the 144A market. One change permitted a family of mutual funds to aggregate the holdings of all its funds in determining its eligibility as a qualified 91 mutual funds have reportedly invested more, whereas the share of life insurance companies has diminished.30 The changing role of mutual funds and life insurance companies is consistent with press reports that buyers of 144A securities are increasingly those that have traditionally invested primarily in public bonds, such as mutual funds and those groups in insurance companies that specialize in purchasing public bonds.31 The 144A market is attractive to public-market investors because it offers corporate bonds that are similar to public issues and because it offers bonds issued by foreign corporations. In addition, yields are higher on 144A private placements than those on comparable public issues, although, as noted, this premium exists mainly to compensate investors for the lesser liquidity and other unique characteristics of private placements. Despite these favorable aspects of 144A securities, pension funds, one of the largest groups of investors in public bonds, have not been significant buyers of 144A securities. Their absence from the 144A market may result from restrictions on their ability to purchase foreign securities, as well as from the lack of familiarity of many fund managers with the private placement market and the significance of Rule 144A. Also, the SEC initially excluded bank trusts from its definition of qualified institutional buyers. In October 1992, however, the SEC amended the definition to include trusts managing employee benefit plans, which may increase the participation of pension funds. In contrast to the interest shown by publicmarket investors in the 144A market, buyers of traditional private placements are unlikely to find this market attractive. The comparative advantage of traditional investors is credit analysis and credit monitoring, neither of which are required to the same extent in the 144A market or in the public market. Market liquidity is of less value to them because they are generally buy-and-hold investors. institutional buyer. Also, a fund's board of directors was permitted to determine whether 144A securities were liquid and thus not subject to the 10 percent limit on fund holdings of illiquid securities that was then in place. (The limit has since been raised to 15 percent.) Before this authorization, mutual funds were required to classify all private placements as illiquid securities. 30. "Fund Managers Petition SEC for Share of the 144A Wealth," Private Placement Reporter (August 10, 1992), p. 6. 31. Vachon, "Too Much Cash," p. 23.stors. 92 Federal Reserve Bulletin • February 1993 Prospects Further development and growth of the 144A market appear likely because it has filled a gap in U.S. capital markets. The public corporate bond market serves large, well-known borrowers that do not require lenders to perform extensive credit analyses, whereas the traditional private market serves less well known, medium-sized borrowers that require extensive credit analysis. Before the adoption of Rule 144A, no market was able to accommodate large issuers wishing to avoid public registration but not requiring extensive credit analysis by lenders. These issuers, whether domestic or foreign, were left with no choice (in U.S. markets) but to accept the terms of the private market, which included a relatively large yield premium over public bond rates. The 144A market bridges the gap between the public and traditional private markets and, in this sense, is a new bond market. Whether the need for such a market extends much beyond current levels of activity is an open question. There is little prospect that the medium-sized, informationproblematic firms that issue in the traditional mar- ket will move to the 144A market. Such firms must borrow from a financial intermediary with the capacity to undertake substantial credit analysis. Moreover, they may not want their issues to be liquid because significant covenants are often included in traditional private placements, and issuers prefer that such debt remain in the hands of the original lenders in case the covenants must be renegotiated. The greatest potential for the 144A market perhaps lies in its use by foreign issuers inasmuch as they represent the largest group of borrowers without any previous satisfactory alternative in the United States. If foreign issuance expands significantly, then Rule 144A could prove instrumental in further integrating world capital markets as well as in improving the competitive position of U.S. markets. Borrowing by large, domestic corporations with specialized requirements seems to offer much less potential, as such situations are relatively rare for most large corporations. Nonetheless, some analysts expect that the public and 144A bond markets will eventually converge, with yields and terms being comparable in the two markets. • 93 Industrial Production and Capacity Utilization Released for publication December 109.7 percent of its 1987 annual average, total industrial production in November was 1.5 percent above its year-ago level. Total industrial capacity utilization rose another 0.2 percentage point in November, to 78.9 percent. When analyzed by market group, the data show that the November rise in the output of durable consumer goods, led by gains in motor vehicles 16 Industrial production rose 0.4 percent in November; with the increase of 0.5 percent in October, the rise has more than offset the declines of late summer. The most significant increases in the broadly based November advance were in nondurable materials and information processing equipment. At Industrial production indexes Twelve-month percent change 1987 1989 1988 1990 1991 Twelve-month percent change 1992 1987 1988 1989 1990 1991 1992 Capacity and industrial production Ratio scale, 1987 production = 100 Ratio scale, 1987 production = 100 140 — Manufacturing Capacity 140 ' 120 100 120 - = Production 80 1 1 1 1 1 1 1 1 — 80 I Percent of capacity 1 1 1 Percent of capacity Manufacturing Total industry 90 Utilization 90 Utilization 80 80 70 J 1980 I I 1982 100 1984 1986 I I 1988 1990 1992 70 1 1980 1 1 1982 1 i 1984 i i 1986 All series are seasonally adjusted. Latest series, November. Capacity is an index of potential industrial production. i i 1988 i i 1990 i 1992 94 Federal Reserve Bulletin • February 1993 Industrial production and capacity utilization Industrial production, index, 1987=100' Percentage change Category 1992 19922 r r r Aug/ Sept. Oct. NOV.P Aug. 109.7 r r Sept. Oct. -.2 -.3 .5 -.3 -.2 .3 Total 109.1 108.8 109.3 Previous estimate 109.0 108.7 109.0 Major market groups Products, total Consumer goods Business equipment Construction supplies Materials 109.8 110.8 125.9 98.5 108.1 109.3 110.3 125.3 96.8 108.0 110.1 111.0 126.7 97.8 108.1 110.4 111.3 127.4 98.4 108.6 .2 .4 1.2 -.1 -.8 -.4 -.4 -.4 -1.8 -.1 Major industry groups Manufacturing Durable Nondurable Mining Utilities 110.1 109.2 111.3 98.8 108.8 109.7 108.2 111.6 98.8 109.1 110.3 109.2 111.6 98.9 108.6 110.8 109.7 112.2 99.5 107.9 -.1 .1 -.4 -1.7 -.5 -.4 -.9 .2 .0 .3 NOV.P .4 1.5 .7 .6 1.1 1.1 .1 .3 .3 .6 .6 .5 1.3 1.2 4.6 2.6 1.8 .6 1.0 .0 .1 -.5 .5 .4 .5 .6 -.6 2.0 1.8 2.3 -.1 -2.8 MEMO Capacity utilization, percent 1992 1991 Average, 1967-91 Low, 1982 High, 1988-89 Nov. 1991 to Nov. 1992 Nov. Aug. Sept.' Oct.' NOV.P Capacity, percentage change, Nov. 1991 to Nov. 1992 Total 82.1 71.8 85.0 79.3 78.8 78.5 78.7 78.9 2.1 Manufacturing Advanced processing Primary processing . Mining Utilities 81.4 81.0 82.3 87.4 86.7 70.0 71.4 66.8 80.6 76.2 85.1 83.6 89.0 87.2 92.3 78.2 77.1 80.8 86.8 85.9 77.9 76.3 81.7 86.1 83.6 77.4 75.9 81.3 86.1 83.8 77.7 76.2 81.6 86.2 83.3 77.9 76.2 82.4 86.7 82.8 2.4 2.9 1.1 .1 1.0 1. Seasonally adjusted. 2. Change from preceding month. and furniture, was 0.3 percent; the increase in the production of nondurable consumer goods was also 0.3 percent. The output of business equipment grew 0.6 percent in November. Within business equipment, the production of information processing equipment rose nearly 1 percent, after an increase of 1.7 percent in October, as the output of computers continued to climb. The manufacture of industrial equipment also posted noticeable gains in November, while the production of defense and space equipment continued to drop. The overall output of transit equipment fell; a continued decline in the production of commercial aircraft and equipment more than offset increases in the output of vehicles for business use. The production of construction supplies advanced again, a move partly reflecting gains in the output of lumber. Materials output grew 0.5 percent in November; the production of nondurable goods materials jumped 1.6 per r Revised, p Preliminary. cent, with notable gains in the output of paper, textiles, and chemicals. When analyzed by industry group, the data show that output in manufacturing increased 0.5 percent in November; the October growth rate was 0.6 percent. Factory utilization rose 0.2 percentage point in November, to 77.9 percent, a level about the same as the levels in the second and third quarters. Gains in operating rates over the past two months have been the strongest in primary processing industries, where utilization has increased more than 1 percentage point since September. Utilization rates for lumber and products, petroleum products, primary metals, rubber and plastics products, fabricated metal products, and primary processing chemicals have all increased nearly 1 percentage point or more. In the past two months, utilization at advanced processing industries has increased 0.3 percentage point: The Industrial Production and Capacity Utilization rates for motor vehicles and parts, miscellaneous manufactures, nonelectrical machinery, furniture and fixtures, and advanced processing chemicals have posted gains of 1 percent or more since September, but utilization rates in printing and pub- 95 lishing and in the aerospace industry have fallen sharply. In November, output at mines, boosted by gains in oil and gas well drilling, rose 0.6 percent. Production at utilities declined 0.6 percent. • 96 Announcements APPOINTMENT OF NEW MEMBERS TO THE THRIFT INSTITUTIONS ADVISORY COUNCIL Stephen W. Prough, President and CEO, Western Financial Savings Bank, Irvine, California. The Federal Reserve Board announced on December 18, 1992, the names of eight new members of its Thrift Institutions Advisory Council (TIAC) and designated a new president of the council for 1993. The council is an advisory group made up of twelve representatives from thrift institutions. The panel was established by the Board in 1980 and includes representatives of savings and loan associations, savings banks, and credit unions. The council meets at least four times each year with the Board of Governors to discuss developments relating to thrift institutions, the housing industry, mortgage finance, and certain regulatory issues. Daniel C. Arnold, Director of the Farm and Home Financial Corporation, Houston, Texas, will serve as president for 1993, and Beatrice D'Agostino, Chairman, President, and CEO, New Jersey Savings Bank, Somerville, New Jersey, will serve as vice president. The eight new members, named for two-year terms that began January 1, 1993, are the following: The other members of the council are the following: William A. Cooper, Chairman, and CEO, TCF Bank Savings FSB, Minneapolis, Minnesota Paul L. Eckert, Chairman and President, Citizens Federal Savings Bank, Davenport, Iowa George R. Gligorea, Chairman, President, and CEO, First Federal Savings Bank, Sheridan, Wyoming Richard D. Jackson, Vice Chairman and CEO, Georgia Federal Bank FSB, Atlanta, Georgia Kerry Killinger, Chairman, President, and CEO, Washington Mutual Savings Bank, Seattle, Washington Charles John Koch, President and CEO, Charter One Bank FSB, Cleveland, Ohio Robert McCarter, Chairman and CEO, New Bedford Institution for Savings, New Bedford, Massachusetts Thomas J. Hughes, President, Navy Federal Credit Union, Merrifield, Virginia Thomas R. Ricketts, Chairman, President, and CEO, Standard Federal Bank, Troy, Michigan. ISSUANCE OF NEW REGULATION F The Federal Reserve Board issued in final form on December 17, 1992, a new Regulation F (Limitations on Interbank Liabilities). The final rule implements the interbank liability provisions under section 308 of the Federal Deposit Insurance Corporation Improvement Act of 1991. The final rule generally requires banks, savings associations, and branches of foreign banks with deposits insured by the Federal Deposit Insurance Corporation to develop and implement prudential policies and procedures to evaluate and control exposure to their correspondent banks. The rule also establishes a regulatory limit to require that a bank ordinarily limit its overnight credit exposure to an individual correspondent that is less than "adequately capitalized" to not more than 25 percent of the exposed bank's total capital. No express regulatory limits are provided for credit exposure to correspondents that are at least "adequately capitalized," although such exposure is subject to prudential policies and procedures. The final rule provides for an extended transition for implementation of the rule. The requirements for prudential policies and procedures go into effect on June 19, 1993. The regulatory limit on credit exposure to an individual correspondent is phased in, with the limit set at 50 percent of the exposed banks's capital for a one-year period beginning on 97 June 19, 1994, and reduced to 25 percent as of June 19, 1995. Additional information on the final rule, including a summary of comments, the Regulatory Flexibility Analysis, and the Competitive Impact Analysis, will be published in the Federal Register. Copies of this material are available on request. ADOPTION OF FINAL AMENDMENTS AND GUIDELINES TO REGULATION H The Federal Reserve Board on December 23,1992, announced adoption of final amendments and guidelines to Regulation H (Membership of State Banking Institutions in the Federal Reserve System) to implement uniform real estate lending standards as mandated by section 304 of the Federal Deposit Insurance Corporation Improvement Act of 1991. The amendments prescribe standards for extensions of credit secured by liens on real estate or made for the purpose of financing permanent improvements to real estate. The standards were developed in consultation with the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation. The uniform regulations become effective March 19, 1993. MODIFICATIONS OF RISK-BASED CAPITAL GUIDELINES ON CERTAIN COLLATERALIZED TRANSACTIONS The Federal Reserve Board on December 23, 1992, announced adoption of modifications to its riskbased capital guidelines affecting the treatment of certain collateralized transactions. The revised guidelines for state member banks and bank holding companies lower the risk weight assigned to such transactions to a level more commensurate with the minimal risks involved. The revision lowers the risk weight from 20 percent to zero for certain transactions that are collateralized by cash and central government securities of the Organisation for Economic Co-operation and Development, including U.S. government agency securities, provided that the transactions meet specified criteria. The change is consistent with international bank capital standards. This rule was effective December 30, 1992. AMENDMENT TO RISK-BASED CAPITAL GUIDELINES FOR STATE MEMBER BANKS AND BANK HOLDING COMPANIES The Federal Reserve Board on December 23, 1992, issued an interim rule amending the risk-based capital guidelines for state member banks and bank holding companies to lower from 100 percent to 50 percent the risk weight on loans to finance the construction of one-family to four-family residences that have been presold. The interim rule amends the Board's Regulation H (Membership of State Banking Institutions in the Federal Reserve System) and Regulation Y (Bank Holding Companies and Change in Bank Control) and was effective December 29, 1992. The interim rule will be reviewed by the Board after the receipt of public comments. Public comments were requested by January 27, 1993. The interim rule implements section 618(a) of the Resolution Trust Corporation Refinancing, Restructuring, and Improvement Act of 1991. ISSUANCE OF POLICY STATEMENT ON THE USE OF LARGE-VALUE FUND TRANSFERS FOR MONEY LAUNDERING The Federal Reserve Board issued on December 23, 1992, a policy statement to address the problem of the use of large-value fund transfers for money laundering. The statement encourages financial institutions to include, when possible, complete information on the sender and recipient of large payment orders, including those sent through Fedwire, CHIPS, and SWIFT. Board action followed adoption of the statement by the Federal Financial Institutions Examination Council. 98 Federal Reserve Bulletin • February 1993 REPORTING OF DEFERRED TAX ASSETS BY BANK HOLDING COMPANIES The Federal Reserve Board announced on December 23, 1992, that, for regulatory purposes, bank holding companies should report deferred tax assets in accordance with Financial Accounting Standards Board Statement no. 109, "Accounting for Income Taxes" (FASB 109) beginning in the first quarter of 1993.1 The Board also indicated that the application of FASB 109 will be permitted in regulatory reports of bank holding companies for December 31,1992, subject to the guidance specified below. The Board intends to issue for public comment in the near future proposed amendments to its risk-based and leverage capital guidelines for state member banks and bank holding companies that pertain to the treatment of deferred tax assets in computing the capital positions of these institutions. These actions are being taken by the Board to provide for the treatment of net deferred tax assets for bank holding companies consistent with provisions set forth by the Federal Financial Institutions Examination Council for federally supervised banks and thrift institutions (insured depositories). On December 8, the council decided that insured depositories should begin to follow FASB 109 in 1993. In addition, the council stated that insured depositories could adopt the standard for their December 1992 regulatory reports, subject to the limitation that the amount reported not exceed the limit for net deferred tax assets that it is recommending to the federal banking and thrift agencies to incorporate into their regulatory capital standards. The recommendations offered by the council to the agencies are the following: 1. Net deferred tax assets that are dependent on an institution's future taxable income should be limited for regulatory capital purposes to the amount that can be realized within one year of a 1. Deferred tax assets generally arise from temporary differences, that is, items that are reported differently for tax and financial statement purposes. A typical temporary difference arises from the treatment of loan losses. quarter-end report date or 10 percent of tier 1 capital, whichever is less. 2. No limit for regulatory capital purposes should be placed on deferred tax assets that can be realized from taxes paid in prior carryback years. The Board has under review a proposal of its staff to seek public comment on a limitation on deferred tax assets for capital purposes for state member banks and bank holding companies, as recommended by the council. In view of this and the council's action, the Board strongly urges bank holding companies to place the same limitation on the amount of deferred tax assets recorded in their regulatory reports filed with the Federal Reserve for the December 31, 1992, reporting date, if they choose the option of adopting FASB 109 for that period. PROPOSED ACTIONS The Federal Reserve Board issued for public comment on December 28, 1992, a proposal to amend Regulation C, which carries out the Home Mortgage Disclosure Act, to incorporate new statutory provisions. Comments on the proposal were requested by January 29, 1993. The Federal Reserve Board on December 31, 1992, also issued for public comment a proposed amendment to its Regulation K (International Banking Operations) to implement section 202(a) of the Foreign Bank Supervision Enhancement Act of 1991. Comments should be received by March 5, 1993. CHANGE IN BOARD STAFF The Board announced on January 4, 1993, the appointment of Donald L. Robinson as Assistant Inspector General for Investigations in the Office of Inspector General. Mr. Robinson has been with the Federal Reserve's Office of Inspector General since 1987. He has had twenty years of experience as a trained criminal investigator and manager of investigative functions. He holds a B.S. from the American University and is a certified fraud examiner. Announcements PUBLICATION OF THE REVISED BANK HOLDING COMPANY SUPERVISION MANUAL A revised edition of the Bank Holding Company Supervision Manual has been published by the Board and is now available for purchase by the public. The Manual has been prepared for use by Federal Reserve examiners in the supervision, regulation, and inspection of bank holding companies and their subsidiaries. Copies are available to the public at a price of $50.00 each from Publications Services, mail stop 138, Board of Governors of the Federal Reserve System, Washington, DC 20551. This fee is applicable to both new and existing subscribers. There will be a separate charge for future updates. The revised edition includes updates through December 1992. Included are changes resulting 99 from the Federal Deposit Insurance Corporation Improvement Act of 1991 and discussions of such new topics as environmental liability, options and other derivative financial contracts, and the sale of uninsured annuities. Also included are interpretations of and changes made to the risk-based capital guidelines, credit-supported and asset-backed commercial paper, real estate appraisal and evaluation programs, higher residual value leasing, fullservice securities brokerage, and expanded financial advisory nonbanking activities approved in 1992. Provided with the Manual is a detailed description of these and other changes made to the content and structure of it since the previous update. The Manual has also been reorganized and reduced to a six-by-nine-inch page format for ease of handling. It has been updated at various times since its original publication in 1980. • 100 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON NOVEMBER 17, 1992 1. Domestic Policy Directive The information reviewed at this meeting suggested that economic activity had been expanding at a moderate pace. Consumer spending had picked up somewhat, business purchases of capital equipment continued to rise at a brisk pace, and housing demand had increased moderately since midyear. At the same time, part of these demands were being met through higher imports, and recent gains in industrial production and employment had been limited. Incoming data on wages and prices had been mixed but suggested on balance a continuing trend toward lower inflation. Total nonfarm payroll employment rose slightly in October after declining in August and September. Substantial job gains were recorded in the services industries, especially in health services and the cyclically sensitive business services, and employment in construction rebounded from a September decline. In manufacturing, the number of jobs declined further in October, although total hours worked were unchanged as the drop in employment was offset by an increase in overtime. Government employment continued to contract, reflecting the end of a federally funded summer jobs program and early retirements by postal workers. Initial claims fell somewhat during October, and the civilian unemployment rate edged down to 7.4 percent. Industrial production rose somewhat further in October following a modest increase in the third quarter. Much of the October gain reflected a sharp rise in light truck assemblies, but there was another sizable advance in the manufacture of office and computing equipment. Elsewhere, the production of consumer goods other than motor vehicles and parts had changed little in recent months, and the output of defense and space equipment remained on a downward trend in October. Utilization of industrial capacity edged higher in October but was still near its 1991 low. Retail sales increased appreciably in September and October, led by a substantial rise in sales at automotive dealers. Sales at general merchandisers, apparel outlets, furniture and appliance stores, and building materials and supplies centers also were up noticeably over the two months. Housing starts rose significantly in August and then edged up further in September to their highest level since March. Sales of new homes had increased on balance over recent months, and the inventory of new homes for sale in September had reached its lowest level since 1983. Real outlays for producers' durable equipment posted another strong increase in the third quarter. A sharp advance in outlays for computing equipment outweighed a dropoff in aircraft purchases from an unsustainably high level in the second quarter. Purchases of items other than aircraft and computing equipment rose at a rapid rate in the third quarter, and recent data on orders for such goods pointed to additional growth in the near term. Expenditures for nonresidential construction, which had fluctuated within a narrow range earlier in the year, dropped sharply in the third quarter. Office construction registered the largest decline, but other commercial and industrial building also fell considerably. Business inventories rose only slightly in September, but over the third quarter as a whole stocks grew at the same rate as in the second quarter. In manufacturing, stocks were drawn down in September, retracing a sizable portion of the runup that had occurred in August. In most manufacturing industries, inventory-to-shipments ratios in September were at or near the bottom of their recent ranges. Wholesale inventories rose modestly in the third quarter, and the stocks-to-sales ratio in September was at the low end of the range posted over 101 the past year. At the retail level, inventories rebounded in September from an August decline, leaving the inventory-to-sales ratio for the retail sector unchanged from the second quarter. The nominal U.S. merchandise trade deficit widened sharply in August; for July and August combined, the deficit was somewhat larger than its average rate in the second quarter. The value of exports was little changed from the second quarter, but the value of imports increased appreciably. Most of the increase in imports was in capital goods, especially computers, and consumer goods. Recent indicators suggested that economic activity in the major foreign industrial countries had remained sluggish in the third quarter. A recovery seemed to have gotten under way in Canada, but the economies of most European countries and Japan evidenced little if any forward impetus, and the downturn that began in western Germany in the second quarter appeared to have persisted into the third quarter. Producer prices of finished goods edged up in October, reflecting a slight increase in food prices and a further sharp advance in prices of energy products. Excluding the finished food and energy components, producer prices declined slightly, and for the twelve-month period ended in October, this measure of prices increased considerably less than it had in the comparable year-earlier period. At the consumer level, prices of nonfood, non-energy goods and services advanced more rapidly in October than in other any month since March. Over the twelve months ended in October, however, the rise in this index of consumer prices was considerably smaller than that recorded in the year-earlier period. Increases in labor costs, measured by the total hourly compensation of private industry workers, slowed further in the third quarter, and both the wage and benefits components of this index had increased substantially less over the four quarters that ended in September than in the preceding four quarters. At its meeting on October 6, the Committee adopted a directive that called for maintaining the existing degree of pressure on reserve positions and that included a marked bias toward possible easing during the intermeeting period. Accordingly, the directive indicated that in the context of the Committee's long-run objectives for price stability and sustainable economic growth, and giving careful consideration to economic, financial, and monetary developments, slightly greater reserve restraint might be acceptable or slightly lesser reserve restraint would be acceptable during the intermeeting period. The contemplated reserve conditions were expected to be consistent with growth in M2 and M3 at annual rates of about 2 percent and 1 percent respectively over the three-month period from September through December. Open market operations during the intermeeting period were directed toward maintaining the existing degree of pressure on reserve positions. The emergence of more favorable indications regarding the performance of the economy and the continued more rapid expansion of money and credit were seen as obviating the need to implement an easing in reserve conditions that had been contemplated as a strong possibility under the directive issued at the October 6 meeting. Several small technical decreases were made during the intermeeting period to expected levels of adjustment plus seasonal borrowing to reflect the usual pattern of diminishing needs for seasonal credit. Actual borrowing averaged close to expected levels over the three reserve maintenance periods completed since the October meeting. Early in the intermeeting period, the federal funds rate exhibited some of the firmness that had prevailed over most of the previous period, but subsequently it averaged close to expected levels. Most other interest rates increased appreciably over the intermeeting period. At the beginning of the period, rates generally incorporated an expected near-term easing of monetary policy. Subsequently, when an easing move was not forthcoming and when concerns about fiscal stimulus increased amid some signs of firmer economic activity and increasing money and credit demands, market interest rates rose for all maturities. The largest increases were in intermediate maturities, which were especially affected by expectations of additional federal borrowing and of a stronger economy that would stimulate rising private credit demands over the next few years. Expectations of firmer economic growth also boosted stock prices appreciably over the period. With interest rates rising in the United States and falling abroad, the trade-weighted value of the dollar in terms of the other G-10 currencies rose very substantially over the intermeeting period. 102 Federal Reserve Bulletin • February 1993 Declines in interest rates in foreign countries were widespread, reflecting signs of greater economic weakness as well as actual or prospective easing in monetary policies abroad. The dollar was particularly robust against European currencies but advanced only moderately against the yen. M2 growth strengthened somewhat in October from its pace in the two previous months. The acceleration of M2 growth reflected more rapid expansion of its transaction components that appeared to be associated in part with the lagged effect of earlier declines in market interest rates and opportunity costs and the heavy pace of mortgage refinancing activity. M3 grew more slowly in October partly owing to reduced needs for managed liabilities in conjunction with somewhat weaker expansion in bank credit. Through October, both broad aggregates were estimated to have grown at rates a little below the lower ends of the ranges established for the year by the Committee. The staff projection prepared for this meeting suggested a continuing expansion in economic activity. Growth was expected to pick up gradually over 1993 to a rate that, although quite moderate by past cyclical standards, would be sufficient to reduce the margins of unemployed labor and capital resources. The recent backup in long-term interest rates and the appreciation of the dollar in foreign exchange markets would exert some restraining influence over the next several quarters. Continuing cautiousness on the part of consumers facing uncertain job and income prospects would tend to hold down gains in consumption for some period ahead. But, as further progress was made in improving household balance sheets and employment growth gradually resumed, consumer spending would strengthen. Additional gains in outlays for business equipment were expected over coming quarters as firms sought to meet increasing demand for goods and to respond to competitive pressures by modernizing product lines and achieving laborcost savings. The projection pointed to sluggish export demand in light of sustained economic weakness abroad. While recognizing the possibility of a stimulative fiscal initiative in 1993, the staff retained for this forecast the assumption employed in several previous forecasts that fiscal policy would remain mildly restrictive owing in large part to a substantial decline in defense spending. The persisting slack in resource utilization over the forecast horizon was expected to be associated with additional progress in reducing inflation. In the Committee's discussion of current and prospective economic developments, the members indicated that they were encouraged by the somewhat more positive tone in the latest economic reports and by the signs of improving business and consumer confidence. The expansion appeared to have gathered somewhat more upward momentum than many had anticipated earlier, though a number of members commented that relatively slow economic growth was likely to persist over the nearer term. The outlook beyond the next quarter or two was subject to considerable uncertainty and indeed to both upside and downside risks. The advent of a new Administration and a new Congress early next year made fiscal policy especially hard to predict. Members observed that indications of some improvement in overall domestic demands, should they persist, might well generate considerable strengthening in production activity as businesses attempted to maintain or build up their currently lean inventories. On the other hand, the recent appreciation of the dollar and the signs of growing weakness in major foreign economies could have adverse implications for demands for goods produced in the United States. On balance, moderate but sustained growth in overall economic activity was seen as a likely prospect, though the gains probably would be uneven both in terms of their timing and the sectors of the economy that would be affected. Against this background, the members generally continued to view further progress toward price stability as a reasonable expectation and an important element in enabling the expansion to be sustained. In their review of developments in key sectors of the economy, the members generally agreed that while the evidence of a strengthening business expansion was still quite limited and much of it was still anecdotal, there were growing indications of improving business and consumer confidence. Some members cautioned that changing attitudes alone could not be relied on as harbingers of a more satisfactory economic performance, as experience in recent years made clear, but the improved financial condition of many business firms, households, and lending institutions provided a further basis for optimism. A good deal of progress already had been made toward reducing debt burdens, and Record of Policy Actions of the Federal Open Market Committee the retarding effects of balance sheet adjustments on current spending seemed likely to lessen over the forecast horizon. Moreover, despite many lingering problems, the general health of the banking industry had improved markedly and there were spreading reports of greater efforts by banks to find creditworthy borrowers. At the same time, the members saw signs that demands for bank loans might be picking up a bit from very depressed levels. The latest data on retail sales and anecdotal reports from many parts of the country suggested some improvement in consumer spending. There were widespread reports of increasing optimism among retailers regarding the outlook for sales during the holiday season. Sales of automobiles and trucks appeared to be rising. The members nonetheless generally continued to view the outlook for consumer spending with considerable caution. Consumers remained concerned about job prospects against the background of continuing downsizing and restructuring activities by many business firms. Ongoing efforts to reduce debt burdens also seemed to be exerting a retarding effect on consumer spending. Against this background, the upturn in consumer confidence indicated by a recent survey could prove to be relatively fragile and short-lived. On balance, a strengthening trend in consumer spending, though to a relatively moderate pace by past business recovery standards, was still expected to provide major support for a sustained economic expansion. Since the stimulus from the consumer sector coincided with relatively lean inventories, its effects might well be reinforced for a time by business efforts to build their inventories. Business spending for equipment also appeared likely to remain fairly robust, given a moderate expansion in sales and the improving financial condition of many businesses. The housing sector was viewed as another potential, though limited, source of stimulus over the forecast horizon. There were reports of improving home sales and home construction activity in many parts of the country, including some otherwise depressed areas, and many business contacts also were seeing better demand for construction materials and home furnishings. On the negative side, nonresidential construction remained weak across much of the nation, and further reductions in construction activity were 103 likely as major projects were completed. However, nonresidential construction was being maintained or even trending higher in a few areas and appeared to have bottomed out in others. The rise in natural gas prices had spurred drilling activity in recent months, but some members commented that the outlook for significant further gains in that industry was not promising. Many of the members stressed that the external sector constituted a major source of downside risk for the economy. The economic prospects for major foreign economies appeared to have deteriorated recently, and given the appreciation of the dollar, net exports might well worsen further over the next several quarters. The possible failure of ongoing trade negotiations would further dampen the outlook for U.S. trade. For the present, anecdotal reports from around the country on export sales were mixed, with such sales still well maintained in some industries and areas but slowing in others. The outlook for fiscal policy constituted a major source of uncertainty; while the enactment of some fiscal policy measures now appeared to be increasingly likely, there was no reliable way to predict their overall size, specific provisions, or the timing of their effects. For now, the downtrend in federal government purchases of goods and services constituted a sizable negative in the forecast of aggregate demands. In particular, the cutbacks in defense expenditures were having a major effect on local economies in several parts of the country. Any new fiscal initiatives might well contain some stimulative elements designed to provide a boost to a relatively slow economic expansion. However, the delays usually encountered in enacting such legislation together with the subsequent lags before much of the effects were felt in the economy implied continued fiscal drag during the quarters immediately ahead; moreover, the propensity for financial markets to raise interest rates in anticipation of fiscal policy stimulus might also damp spending for some period. Some members saw a risk that much of the fiscal stimulus would be felt at a time when economic activity might already be gaining considerable momentum. Turning to the outlook for inflation, members commented that despite a disappointing report on consumer prices for October, the disinflationary trend still appeared to be well established. In the view of most members, the outlook for relatively 104 Federal Reserve Bulletin • February 1993 subdued pressures on resources over the forecast horizon together with the slow growth over an extended period in broad measures of money augured well for further progress toward price stability. Members were continuing to observe strong competitive pressures in local markets, and business contacts were still emphasizing the stout resistance that they encountered when they tried to raise prices to widen profit margins or to pass along rising costs. Most businessmen currently saw and anticipated little or no inflation in their own industries. Consumers also remained highly price conscious. At the same time, however, there seemed to be a widespread view in the business community and among consumers that at some point the rate of inflation was likely to rise appreciably from its recent level, and such expectations tended to have adverse repercussions in long-term debt markets and to create tensions in wage negotiations and other price-setting activities. Members noted that current inflationary expectations had been built up over a period of many years and an extended period of reduced inflation probably would be required before they disappeared. At this meeting, the Committee had a preliminary discussion of the ranges for monetary growth in 1993 that it had established on a tentative basis at the meeting on June 30-July 1,1992. The ranges in question had been set at 2Vi to 6Vi percent for M2 and 1 to 5 percent for M3 and were unchanged from those adopted for 1992. While there had been considerable sentiment at midyear in favor of lowering the ranges, a majority of the members had concluded then that uncertainties about the prospective relationship between the monetary aggregates and nominal spending argued for caution in making any changes. The information since midyear had confirmed the persistence of sizable increases in the velocity of M2 and M3. A recent staff study had provided some reasons for this unusual behavior, and staff analysis pointed to a strong probability that velocity would rise again next year. During the discussion, the members generally agreed that developments since mid-1992 had reinforced the case for some reduction in the 1993 range for M2, and they indicated that they probably would support proposals for a lower range. Such a reduction would be a technical adjustment intended to take account of the atypical strength in velocity. Some noted that a lower range also would be seen as underscoring the desire of the Committee to avoid any pickup in inflation should the expansion gain momentum and indeed as promoting further progress toward price stability, thereby establishing a sounder basis for sustained growth in the economy at its highest potential. The ranges would be voted on in February before their scheduled announcement to the Congress, and by that time more information would be available to gauge the prospective behavior of M2 during 1993. In the Committee's discussion of policy for the intermeeting period ahead, a majority of the members indicated a preference for maintaining unchanged conditions in reserve markets, but several others believed that some easing would be a more appropriate policy. Members who supported a steady policy course emphasized the growing if still tentative indications of a strengthening economy—including the pickup in money and credit growth—and the apparent upturn in business and consumer confidence. Some also cited the increased prospects of fiscal policy measures that were likely to provide some net stimulus to the economy over the intermediate term. Members who preferred to ease monetary policy at this time referred to what they viewed as an unsatisfactory outlook for economic activity, and some stressed the desirability of taking prompt action to promote sustained growth in the broader monetary aggregates within the Committee's ranges. Members who favored an immediate easing also endorsed coupling such a policy move with a reduction at this time in the tentative M2 range for 1993 in order to emphasize the Committee's commitment to noninflationary economic growth. In the course of the discussion, the members took account of a staff analysis that suggested some moderation in the growth of M2 over the remainder of the year, assuming unchanged conditions in reserve markets. While M2 growth on a quarterly average basis was expected to be stronger in the current quarter than in the previous two quarters, expansion for the year as a whole was still projected to fall a little below the Committee's annual range. Some members commented that an important policy objective would be to prevent M2 growth from faltering—such a development might parallel a similar pause in the economy—as it had earlier in the current expansion. On the other hand, Record of Policy Actions of the Federal Open Market Committee some members noted the persisting increases in M2 velocity. They remarked that the level of short-term interest rates together with the very rapid expansion in Ml and reserves pointed to an adequate availability of liquidity in the economy and thus suggested that current monetary policy already was appropriately stimulative and properly positioned to support the projected strengthening in economic activity. Indeed, in one view, continued rapid expansion in the narrrow measures of money and reserves, if allowed to continue, would be a matter of increasing concern with respect to the longer-run implications for inflation. In the Committee's discussion of possible adjustments to policy during the intermeeting period, many of the members expressed a preference for a directive that did not bias potential adjustments in either direction. In this view, the expansion was on a reasonably solid footing, the risks to the expansion were now fairly evenly balanced, and a steady policy course should be maintained in the absence of unanticipated developments with significant implications for the economic outlook. Other members, while encouraged by recent economic developments, wanted to bias the directive toward ease, though without the strong presumption of some potential easing that had been associated with the previous directive. They observed that the economy was still expanding at a relatively subdued pace, inflation was on a downward track, and given the earlier tendency for the recovery to weaken, they believed that the Committee should react relatively promptly to indications, including any downturn in money growth, that the economy might again be falling short of a moderate growth path. Most of the members who preferred to ease immediately indicated that they could accept an unchanged directive that was biased toward ease, and such a directive also was acceptable to many members who favored a symmetrical directive. At the conclusion of the Committee's discussion, all but three of the members indicated their acceptance of a directive that called for maintaining the existing degree of pressure on reserve positions and that would include some bias toward possible easing during the intermeeting period. Two of the members expressed a strong preference for a symmetric directive with regard to possible intermeeting policy adjustments, while another was firmly persuaded of the desirability of an immediate 105 increase in reserve availability to strengthen the growth of M2. Accordingly, in the context of the Committee's long-run objectives for price stability and sustainable economic growth, and giving careful consideration to economic, financial, and monetary developments, the Committee decided that slightly greater monetary restraint might be acceptable or slightly lesser monetary restraint would be acceptable during the intermeeting period. The reserve conditions contemplated at this meeting were expected to be consistent with growth in M2 and M3 at annual rates of about V/2 and 1 percent respectively over the three-month period from September through December. At the conclusion of the meeting, the following domestic policy directive was issued to the Federal Reserve Bank of New York: The information reviewed at this meeting suggests that economic activity has been expanding at a moderate pace. Total nonfarm payroll employment was up slightly in October after declining in the previous two months, and the civilian unemployment rate edged down to 7.4 percent. Industrial production rose somewhat in October. Retail sales increased considerably in September and October. There was some strengthening in residential construction activity over the summer months. Outlays for business equipment have continued to increase, and recent data on orders for nondefense capital goods point to further growth in the near term; expenditures for nonresidential construction have remained weak. The nominal U.S. merchandise trade deficit widened somewhat in July-August from its average rate in the second quarter. Recent data on wages and prices have been mixed but suggest on balance a continuing trend toward lower inflation. Most interest rates have increased appreciably since the Committee meeting on October 6. In foreign exchange markets, the trade-weighted value of the dollar in terms of the other G-10 currencies rose very substantially over the intermeeting period. M2 has expanded at a moderate pace since midsummer, with all of its growth stemming from its Ml component, while M3 grew slowly. Through October, both aggregates were estimated to have grown at rates a little below the lower ends of the ranges established by the Committee for the year. The Federal Open Market Committee seeks monetary and financial conditions that will foster price stability and promote sustainable growth in output. In furtherance of these objectives, the Committee at its meeting on June 30-July 1 reaffirmed the ranges it had established in February for growth of M2 and M3 of 2Vi to 6V2 percent and 1 to 5 percent respectively, measured from the fourth quarter of 1991 to the fourth quarter of 1992. The Committee anticipated that developments contributing to 106 Federal Reserve Bulletin • February 1993 unusual velocity increases could persist in the second half of the year. The monitoring range for growth of total domestic nonfinancial debt also was maintained at AVi to 8V2 percent for the year. For 1993, the Committee on a tentative basis set the same ranges as in 1992 for growth of the monetary aggregates and debt, measured from the fourth quarter of 1992 to the fourth quarter of 1993. The behavior of the monetary aggregates will continue to be evaluated in the light of progress toward price level stability, movements in their velocities, and developments in the economy and financial markets. In the implementation of policy for the immediate future, the Committee seeks to maintain the existing degree of pressure on reserve positions. In the context of the Committee's long-run objectives for price stability and sustainable economic growth, and giving careful consideration to economic, financial, and monetary developments, slightly greater reserve restraint might or slightly lesser reserve restraint would be acceptable in the intermeeting period. The contemplated reserve conditions are expected to be consistent with growth of M2 and M3 over the period from September through December at annual rates of about 3Vi and 1 percent, respectively. time was needed to evaluate the effects of prior monetary policy actions, and they were concerned that the adoption of a more stimulative policy over the near term might well establish a basis for greater inflation later. Mr. Melzer was concerned that rapid growth in total bank reserves, the monetary base, and Ml over the past two years might already have laid a foundation for accelerating nominal GDP growth and a reversal of the disinflationary trend. In addition, he noted that policy errors can easily be made at this stage of the business cycle. In an economic expansion, efforts to resist increases in the federal funds rate through large reserve injections eventually lead to higher inflation and higher nominal interest rates. Votes for this action: Messrs. Greenspan, Corrigan, Angell, Hoenig, Kelley, Lindsey, Mullins, Ms. Phillips, and Mr. Syron. Votes against this action: Messrs. Jordan, LaWare, and Melzer. The Committee approved a temporary increase of $3 billion, to a level of $11 billion, in the limit on changes between Committee meetings in System Account holdings of U.S. government and federal agency securities. The increase amended paragraph 1(a) of the Authorization for Domestic Open Market Operations and was effective for the intermeeting period ending with the close of business on December 22, 1992. Mr. Jordan dissented because he preferred taking immediate action to increase the availability of bank reserves sufficiently to raise M2 growth to a pace more consistent with the Committee's annual range. Because desirable M2 expansion in line with the Committee's objectives would be likely to fall within a lower range next year, he would announce concurrently a reduction in the 1993 range to make clear that near-term action to increase M2 expansion was not an abandonment of the long-term objective of noninflationary monetary growth. Messrs. LaWare and Melzer dissented because they did not want to bias the directive toward possible easing during the intermeeting period. In their view, recent developments pointed to a strengthening economy, and they favored a steady policy that was not predisposed to react to nearterm weakness in economic or monetary data. More 2. Authorization for Domestic Open Market Operations Votes for this action: Messrs. Greenspan, Corrigan, Angell, Hoenig, Jordan, Kelley, LaWare, Lindsey, Melzer, Mullins, Ms. Phillips, and Mr. Syron. Votes against this action: None. The Manager of the System Open Market Account advised the Committee that the current leeway of $8 billion for changes in System Account holdings might not be sufficient to accommodate the potentially large need to add reserves over the intermeeting period ahead to meet an anticipated seasonal bulge in the demand for currency and required reserves. • 107 Legal Developments FINAL RULE—REGULATION F The Board of Governors is publishing a new 12 C.F.R. Part 206, its Regulation F (Interbank Liabilities). The final rule implements section 308 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA), which requires the Board to prescribe standards to limit the risks posed by exposure of insured depository institutions to other depository institutions. The final rule applies to banks, savings associations, and branches of foreign banks with deposits insured by the Federal Deposit Insurance Corporation (FDIC). The final rule generally requires insured banks, savings associations, and branches of foreign banks, referred to collectively as "banks," to develop and implement internal prudential policies and procedures to evaluate and control exposure to the depository institutions with which they do business, referred to as "correspondents.'' The rule also establishes a general "limit" stated in terms of the exposed bank's capital, for overnight "credit exposure" to an individual correspondent, as defined in the rule. Under the rule, a bank ordinarily should limit its credit exposure to an individual correspondent to an amount equal to not more than 25 percent of the exposed bank's total capital, unless the bank can demonstrate that its correspondent is at least "adequately capitalized." No limit is specified by the rule for credit exposure to correspondents that are at least "adequately capitalized," but a bank is required to establish and follow its own internal policies and procedures with regard to exposure to all correspondents, regardless of capital level. The final rule provides for a thirty-month transition period after the effective date for full implementation of the rule. Banks must have in place the internal policies and procedures required by the rule on June 19, 1993. The regulatory limit on credit exposure to correspondents that a bank cannot demonstrate are at least "adequately capitalized" will be phased in, with the limit set at 50 percent of the exposed bank's capital for a one-year period beginning on June 19, 1994, and reduced to 25 percent as of June 19, 1995. Effective December 19, 1992, 12 C.F.R. Part 206 is added to read as follows: Part 206—Limitations on Interbank Liabilities Section Section Section Section Section Section Section 206.1—Authority, purpose, and scope. 206.2—Definitions. 206.3—Prudential standards. 206.4—Credit exposure. 206.5—Capital levels of correspondents. 206.6—Waiver. 206.7—Transition provisions. Authority: Section 308 of Pub. L. 102-242, 105 Stat. 2236, 12 U.S.C. 371b-2. Section 206.1—Authority, purpose, and scope. (a) Authority and purpose. This part (Regulation F, 12 C.F.R. Part 206) is issued by the Board of Governors of the Federal Reserve System (Board) to implement section 308 of the Federal Deposit Insurance Corporation Improvements Act of 1991 (Act), 12 U.S.C. 371b-2. The purpose of this part is to limit the risks that the failure of a depository institution would pose to insured depository institutions. (b) Scope. This part applies to all depository institutions insured by the Federal Deposit Insurance Corporation. Section 206.2—Definitions. As used in this part, unless the context requires otherwise: (a) Bank means an insured depository institution, as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813), and includes an insured national bank, state bank, District bank, or savings association, and an insured branch of a foreign bank. (b) Commonly-controlled correspondent means a correspondent that is commonly controlled with the bank and for which the bank is subject to liability under section 5(e) of the Federal Deposit Insurance Act. A correspondent is considered to be commonly controlled with the bank if: (1) 25 percent or more of any class of voting securities of the bank and the correspondent are owned, directly or indirectly, by the same depository institution or company; or 108 Federal Reserve Bulletin • February 1993 (2) Either the bank or the correspondent owns 25 percent or more of any class of voting securities of the other. (c) Correspondent means a U.S. depository institution or a foreign bank, as defined in this part, to which a bank has exposure, but does not include a commonly controlled correspondent. (d) Exposure means the potential that an obligation will not be paid in a timely manner or in full. "Exposure" includes credit and liquidity risks, including operational risks, related to intraday and interday transactions. (e) Foreign bank means an institution that: (1) Is organized under the laws of a country other than the United States; (2) Engages in the business of banking; (3) Is recognized as a bank by the bank supervisory or monetary authorities of the country of the bank's organization; (4) Receives deposits to a substantial extent in the regular course of business; and (5) Has the power to accept demand deposits. (f) Primary federal supervisor has the same meaning as the term "appropriate Federal banking agency" in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)). (g) Total capital means the total of a bank's Tier 1 and Tier 2 capital under the risk-based capital guidelines provided by the bank's primary federal supervisor. For an insured branch of a foreign bank organized under the laws of a country that subscribes to the principles of the Basle Capital Accord, "total capital" means total Tier 1 and Tier 2 capital as calculated under the standards of that country. For an insured branch of a foreign bank organized under the laws of a country that does not subscribe to the principles of the Basle Capital Accord, "total capital" means total Tier 1 and Tier 2 capital as calculated under the provisions of the Accord. (h) U.S. depository institution means a bank, as defined in section 206.2(a) of this part, other than an insured branch of a foreign bank. Section 206.3—Prudential standards. (a) General. A bank shall establish and maintain written policies and procedures to prevent excessive exposure to any individual correspondent in relation to the condition of the correspondent. (b) Standards for selecting correspondents. (1) A bank shall establish policies and procedures that take into account credit and liquidity risks, including operational risks, in selecting correspondents and terminating those relationships. (2) Where exposure to a correspondent is significant, the policies and procedures shall require periodic reviews of the financial condition of the correspondent and shall take into account any deterioration in the correspondent's financial condition. Factors bearing on the financial condition of the correspondent include the capital level of the correspondent, level of nonaccrual and past due loans and leases, level of earnings, and other factors affecting the financial condition of the correspondent. Where public information on the financial condition of the correspondent is available, a bank may base its review of the financial condition of a correspondent on such information, and is not required to obtain non-public information for its review. However, for those foreign banks for which there is no public source of financial information, a bank will be required to obtain non-public information for its review. (3) A bank may rely on another party, such as a bank rating agency or the bank's holding company, to assess the financial condition of or select a correspondent, provided that the bank's board of directors has reviewed and approved the general assessment or selection criteria used by that party. (c) Internal limits on exposure. (1) Where the financial condition of the correspondent and the form or maturity of the exposure create a significant risk that payments will not be made in full or in a timely manner, a bank's policies and procedures shall limit the bank's exposure to the correspondent, either by the establishment of internal limits or by other means. Limits shall be consistent with the risk undertaken, considering the financial condition and the form and maturity of exposure to the correspondent. Limits may be fixed as to amount or flexible, based on such factors as the monitoring of exposure and the financial condition of the correspondent. Different limits may be set for different forms of exposure, different products, and different maturities. (2) A bank shall structure transactions with a correspondent or monitor exposure to a correspondent, directly or through another party, to ensure that its exposure ordinarily does not exceed the bank's internal limits, including limits established for credit exposure, except for occasional excesses resulting from unusual market disturbances, market movements favorable to the bank, increases in activity, operational problems, or other unusual circumstances. Generally, monitoring may be done on a retrospective basis. The level of monitoring required depends on: (i) The extent to which exposure approaches the bank's internal limits; Legal Developments (ii) The volatility of the exposure; and (iii) The financial condition of the correspondent. (3) A bank shall establish appropriate procedures to address excesses over its internal limits. (d) Review by board of directors. The policies and procedures established under this section shall be reviewed and approved by the bank's board of directors at least annually. Section 206.4—Credit exposure. (a) Limits on credit exposure. (1) The policies and procedures on exposure established by a bank under section 206.3(c) of this part shall limit a bank's interday credit exposure to an individual correspondent to not more than 25 percent of the bank's total capital, unless the bank can demonstrate that its correspondent is at least adequately capitalized, as defined in section 206.5(a) of this part. (2) Where a bank is no longer able to demonstrate that a correspondent is at least adequately capitalized for the purposes of section 206.4(a) of this part, including where the bank cannot obtain adequate information concerning the capital ratios of the correspondent, the bank shall reduce its credit exposure to comply with the requirements of section 206.4(a)(1) of this part within 120 days after the date when the current Report of Condition and Income or other relevant report normally would be available. (b) Calculation of credit exposure. Except as provided in sections 206.4(c) and (d) of this part, the credit exposure of a bank to a correspondent shall consist of the bank's assets and off-balance sheet items that are subject to capital requirements under the capital adequacy guidelines of the bank's primary federal supervisor, and that involve claims on the correspondent or capital instruments issued by the correspondent. For this purpose, off-balance sheet items shall be valued on the basis of current exposure. The term "credit exposure" does not include exposure related to the settlement of transactions, intraday exposure, transactions in an agency or similar capacity where losses will be passed back to the principal or other party, or other sources of exposure that are not covered by the capital adequacy guidelines. (c) Netting. Transactions covered by netting agreements that are valid and enforceable under all applicable laws may be netted in calculating credit exposure. (d) Exclusions. A bank may exclude the following from the calculation of credit exposure to a correspondent: (1) Transactions, including reverse repurchase agreements, to the extent that the transactions are secured by government securities or readily market 109 able collateral, as defined in paragraph (f) of this section, based on the current market value of the collateral; (2) The proceeds of checks and other cash items deposited in an account at a correspondent that are not yet available for withdrawal; (3) Quality assets, as defined in paragraph (f) of this section, on which the correspondent is secondarily liable, or obligations of the correspondent on which a creditworthy obligor in addition to the correspondent is available, including but not limited to: (i) Loans to third parties secured by stock or debt obligations of the correspondent; (ii) Loans to third parties purchased from the correspondent with recourse; (iii) Loans or obligations of third parties backed by stand-by letters of credit issued by the correspondent; or (iv) Obligations of the correspondent backed by stand-by letters of credit issued by a creditworthy third party ; (4) Exposure that results from the merger with or acquisition of another bank for one year after that merger or acquisition is consummated; and (5) The portion of the bank's exposure to the correspondent that is covered by federal deposit insurance. (e) Credit exposure of subsidiaries. In calculating credit exposure to a correspondent under this part, a bank shall include credit exposure to the correspondent of any entity that the bank is required to consolidate on its Report of Condition and Income or Thrift Financial Report. (f) Definitions. As used in this section: (1) Government securities means obligations of, or obligations fully guaranteed as to principal and interest by, the United States government or any department, agency, bureau, board, commission, or establishment of the United States, or any corporation wholly owned, directly or indirectly, by the United States. (2) Readily marketable collateral means financial instruments or bullion that may be sold in ordinary circumstances with reasonable promptness at a fair market value determined by quotations based on actual transactions on an auction or a similarly available daily bid- and ask-price market. (3) (i) Quality asset means an asset: (A) That is not in a nonaccrual status; (B) On which principal or interest is not more than thirty days past due; and (C) Whose terms have not been renegotiated or compromised due to the deteriorating financial condition of the additional obligor. (ii) An asset is not considered a "quality asset" if 110 Federal Reserve Bulletin • February 1993 any other loans to the primary obligor on the asset have been classified as "substandard," "doubtful," or "loss," or treated as "other loans specially mentioned" in the most recent report of examination or inspection of the bank or an affiliate prepared by either a federal or a state supervisory agency. Section 206.5—Capital levels of correspondents. (a) Adequately capitalized correspondents.l For the purpose of this part, a correspondent is considered adequately capitalized if the correspondent has: (1) A total risk-based capital ratio, as defined in paragraph (e)(1) of this section, of 8.0 percent or greater; (2) A Tier 1 risk-based capital ratio, as defined in paragraph (e)(2) of this section, of 4.0 percent or greater; and (3) A leverage ratio, as defined in paragraph (e)(3) of this section, of 4.0 percent or greater. (b) Frequency of monitoring capital levels. A bank shall obtain information to demonstrate that a correspondent is at least adequately capitalized on a quarterly basis, either from the most recently available Report of Condition and Income, Thrift Financial Report, financial statement, or bank rating report for the correspondent. For a foreign bank correspondent for which quarterly financial statements or reports are not available, a bank shall obtain such information on as frequent a basis as such information is available. Information obtained directly from a correspondent for the purpose of this section should be based on the most recently available Report of Condition and Income, Thrift Financial Report, or financial statement of the correspondent. (c) Foreign banks. A correspondent that is a foreign bank may be considered adequately capitalized under this section without regard to the minimum leverage ratio required under paragraph (a)(3) of this section. (d) Reliance on information. A bank may rely on information as to the capital levels of a correspondent obtained from the correspondent, a bank rating agency, or other party that it reasonably believes to be accurate. (e) Definitions. For the purposes of this section: (1) Total risk-based capital ratio means the ratio of qualifying total capital to weighted risk assets. 1. As used in this part, the term "adequately capitalized" is similar but not identical to the definition of that term as used for the purposes of the prompt corrective action standards. See, e.g., 12 C.F.R. Part 208, Subpart B. (2) Tier 1 risk-based capital ratio means the ratio of Tier 1 capital to weighted risk assets. (3) Leverage ratio means the ratio of Tier 1 capital to average total consolidated assets, as calculated in accordance with the capital adequacy guidelines of the correspondent's primary federal supervisor. (f) Calculation of capital ratios. (1) For a correspondent that is a U.S. depository institution, the ratios shall be calculated in accordance with the capital adequacy guidelines of the correspondent's primary Federal supervisor. (2) For a correspondent that is a foreign bank organized in a country that has adopted the riskbased framework of the Basle Capital Accord, the ratios shall be calculated in accordance with the capital adequacy guidelines of the appropriate supervisory authority of the country in which the correspondent is chartered. (3) For a correspondent that is a foreign bank organized in a country that has not adopted the risk-based framework of the Basle Capital Accord, the ratios shall be calculated in accordance with the provisions of the Basle Capital Accord. Section 206.6—Waiver. The Board may waive the application of section 206.4(a) of this part to a bank if the primary federal supervisor of the bank advises the Board that the bank is not reasonably able to obtain necessary services, including payment-related services and placement of funds, without incurring exposure to a correspondent in excess of the otherwise applicable limit. Section 206.7—Transition provisions. (a) Beginning on June 19, 1993, a bank shall comply with the prudential standards prescribed under section 206.3 of this part. (b) Beginning on June 19, 1994, a bank shall comply with the limit on credit exposure to an individual correspondent required under section 206.4(a) of this part, but for a period of one year after this date the limit shall be 50 percent of the bank's total capital. FINAL RULE—AMENDMENTS HAND Y TO REGULATIONS The Board of Governors is amending 12 C.F.R. Parts 208 and 225, its Regulations H and Y (Capital and Capital Adequacy Guidelines), for state member banks and bank holding companies to include the European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC), and the Legal Developments Nordic Investment Bank (NIB) in the list of named multilateral lending institutions that are eligible for a 20 percent risk weight. This modification would conform the Board's risk-based capital guidelines more closely to interpretive guidance adopted by the other G-10 countries that are signatories to the Basle Accord. Effective December 22, 1992, 12 C.F.R. Parts 208 and 225 are amended as follows: Part 208—Membership of State Banking Institutions in the Federal Reserve System 111 agencies and claims on, and the portions of claims guaranteed by, the International Bank for Reconstruction and Development (World Bank), the International Finance Corporation, the Interamerican Development Bank, the Asian Development Bank, the African Development Bank, the European Investment Bank, the European Bank for Reconstruction and Development, the Nordic Investment Bank, and other multilateral lending institutions or regional development banks in which the U.S. government is a shareholder or contributing member.* * * 1. The authority citation for part 208 is revised to read as follows: Authority: Sections 9, 11(a), 11(c), 19, 21, 25, and 25(a) of the Federal Reserve Act, as amended (12 U.S.C. 321-338, 248(a), 248(c), 461, 481-486, 601 and 611, respectively); sections 4, 13(j), and 18(o) of the Federal Deposit Insurance Act, as amended (12 U.S.C. 1814, 1823(j), and 1828(o), respectively); section 7(a) of the International Banking Act of 1978 (12 U.S.C. 3105); sections 907-910 of the International Lending Supervision Act of 1983 (12 U.S.C. 3906-3909); sections 2, 12(b), 12(g), 12(i), 15B(c) (5), 17, 17A, and 23 of the Securities Exchange Act of 1934 (15 U.S.C. 78b, 781(b), 781(g), 781(i), 78o-4(c) (5), 78q, 78q-l, and 78w, respectively); section 5155 of the Revised Statutes (12 U.S.C. 36) as amended by the McFadden Act of 1927; and sections 1101-1122 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3310 and 3331-3351). 2. Appendix A to part 208 is amended by revising the second sentence of the second paragraph in III.C.2 to read as follows: APPENDIX A TO PART 208—CAPITAL ADEQUACY GUIDELINES FOR STATE MEMBER BANKS: RISK-BASED MEASURE Uj * * * (2 * * * 2. * * * In addition, this category also includes claims on, and the portions of claims that are guaranteed by, U.S. government-sponsored32 32. For this purpose, U.S. government-sponsored agencies are defined as agencies originally established or chartered by the federal government to serve public purposes specified by the U.S. Congress but whose obligations are not explicitly guaranteed by the full faith and credit of the U.S. government. These agencies include the Federal Part 225—Bank Holding Companies Change in Bank Control and 1. The authority citation for part 225 is revised to read as follows: Authority: 12 U.S.C. 1817(j) (13), 1818(b), 1828(o), 183li, 1843(c) (8), 1844(b), 1972(1), 3106, 3108, 3907, 3909, 3310, 3331-3351, and section 306 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (Pub. L. 102-242, 105 Stat. 2236 (1991)). 2. Appendix A to part 225 is amended by revising the second sentence of the second paragraph in III.C.2 to read as follows: APPENDIX A TO PART ADEQUACY GUIDELINES COMPANIES: RISK-BASED 225—CAPITAL FOR BANK HOLDING MEASURE UJ * * * £ * ** 2. * * * In addition, this category also includes claims on, and the portions of claims that are guaranteed by, U.S. government-sponsored 35 Home Loan Mortgage Corporation (FHLMC), the Federal National Mortgage Association (FNMA), the Farm Credit System, the Federal Home Loan Bank System, and the Student Loan Marketing Association (SLMA). Claims on U.S. government-sponsored agencies include capital stock in a Federal Home Loan Bank that is held as a condition of membership in that Bank. 35. For this purpose, U.S. government-sponsored agencies are defined as agencies originally established or chartered by the federal government to serve public purposes specified by the U.S. Congress but whose obligations are not explicitly guaranteed by the full faith and credit of the U.S. government. These agencies include the Federal Home Loan Mortgage Corporation (FHLMC), the Federal National Mortgage Association (FNMA), the Farm Credit System, the Federal Home Loan Bank System, and the Student Loan Marketing Association (SLMA). Claims on U.S. government-sponsored agencies in- 112 Federal Reserve Bulletin • February 1993 agencies and claims on, and the portions of claims guaranteed by, the International Bank for Reconstruction and Development (World Bank), the International Finance Corporation, the Interamerican Development Bank, the Asian Development Bank, the African Development Bank, the European Investment Bank, the European Bank for Reconstruction and Development, the Nordic Investment Bank, and other multilateral lending institutions or regional development banks in which the U.S. government is a shareholder or contributing member.* * * FINAL RULE—AMENDMENT TO REGULATION O The Board of Governors is amending 12 C.F.R. Part 215, its Regulation O (Loans to Executive Officers, Directors, and Principal Shareholders of Member Banks; Loans to Holding Companies and Affiliates) to implement recent amendments to section 22(h) of the Federal Reserve Act, contained in the Housing and Community Development Act of 1992. The revision will provide that loans to a holding company parent and its affiliates are not subject to Regulation O inasmuch as these transactions are governed by section 23A of the Federal Reserve Act. Effective December 17, 1992, 12 C.F.R. Part 215 is amended as follows: Part 215—Loans to Executive Officers, Directors, and Principal Shareholders of Member Banks 1. The authority citation for part 215 is revised to read as follows: Section 215.2—Definitions (1)(1) Principal shareholder means a person (other than an insured bank) that directly or indirectly, or acting through or in concert with one or more persons, owns, controls, or has the power to vote more than 10 percent of any class of voting securities of a member bank or company. Shares owned or controlled by a member of an individual's immediate family are considered to be held by the individual. (2) A principal shareholder of a member bank includes: (i) A principal shareholder of a company of which the member bank is a subsidiary, and (ii) A principal shareholder of any other subsidiary of that company. (3) A principal shareholder of a member bank does not include a company of which a member bank is a subsidiary. FINAL RULE—AMENDMENT TO REGULATION The Board of Governors is amending 12 C.F.R. Part 225, its Regulation Y (Bank Holding Companies and Change in Bank Control) to implement certain regulatory improvements contained in sections 202(d) and 210 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA). The final rule specifies additional factors that the Federal Reserve System must consider in acting on applications by bank holding companies to acquire banks under section 3 of the Bank Holding Company Act. The intended effect of the amendment is to conform the Board's regulations to the statutory changes. Effective February 4, 1993, 12 C.F.R. Part 225 is amended as follows: Authority: Sections ll(i), 22(g) and 22(h), Federal Reserve Act (12 U.S.C. 248(i), 375a, 375b(7)), 12 U.S.C. 1817(k)(3) and 1972(2)(F)(vi), and section 955 of the Housing and Community Development Act of 1992 (Pub. L. 102-550, 106 Stat. 3895 (1992)). Part 225—Bank Holding Companies Change in Bank Control Subpart A—Loans by Member Banks to Their Executive Officers, Directors, and Principal Shareholders Section 225.2—Definitions. 2. Section 215.2 is amended by revising paragraph (1) to read as follows: elude capital stock in a Federal Home Loan Bank that is lield as a condition of membership in that Bank. Y and 1. Section 225.2 is amended by revising the text of paragraph (k) as follows: (k)(l) Controlling shareholder means a person that owns or controls, directly or indirectly, 25 percent or more of any class of voting securities of a bank or other company. (2) Principal shareholder means a person that owns or controls, directly or indirectly, 10 percent or more of any class of voting securities of a bank or Legal Developments other company, or any person that the Board determines has the power, directly or indirectly, to exercise a controlling influence over the management or policies of a bank or other company. 113 conditions imposed by, the Board in connection with prior applications. 3. Section 225.31 is amended by revising paragraph (d)(2)(ii) to read as follows: 2. Section 225.13 is amended by revising paragraphs (a) and (b)(2) to read as follows: Section 225.13—Factors considered in acting on bank applications. (a) Prohibited anticompetitive transactions. As specified in section 3(c) of the BHC Act, the Board may not approve any application under this subpart if: (1) The transaction would result in a monopoly or would further any combination or conspiracy to monopolize, or to attempt to monopolize, the business of banking in any part of the United States; (2) The effect of the transaction may be substantially to lessen competition in any section of the country, tend to create a monopoly, or in any other manner be in restraint of trade, unless the Board finds that the transaction's anticompetitive effects are clearly outweighed by its probable effect in meeting the convenience and needs of the community; (3) The applicant has failed to provide the Board with adequate assurances that it will make available such information on its operations or activities, and the operations or activities of any affiliate of the applicant, that the Board deems appropriate to determine and enforce compliance with the BHC Act and other applicable federal banking statutes, and any regulations thereunder; or (4) In the case of an application involving a foreign bank, the foreign bank is not subject to comprehensive supervision or regulation on a consolidated basis by the appropriate authorities in its home country, as provided in section 211.24(c)(l)(ii) of the Board's Regulation K (12 C.F.R. 211.24(c)(l)(ii)). (b) Other factors. In deciding applications under this subpart, the Board also considers the following factors with respect to the applicant, its subsidiaries, any banks related to the applicant through common ownership or management, and the bank or banks to be acquired: (2) Managerial resources. The competence, experience, and integrity of the officers, directors, and principal shareholders of the applicant, its subsidiaries, and the banks and bank holding companies concerned; their record of compliance with laws and regulations; and the record of the applicant and its affiliates of fulfilling any commitments to, and any Section 225.31—Control proceedings. * * * (2) * * * (ii) Shares controlled by company and associated individuals. A company that, together with its management officials or controlling shareholders (including members of the immediate families of either as defined in 12 C.F.R. 226.2(k)), owns, controls, or holds with power to vote 25 percent or more of the outstanding shares of any class of voting securities of a bank or other company controls the bank or other company, if the first company owns, controls, or holds with power to vote more than 5 percent of the outstanding shares of any class of voting securities of the bank or other company. 4. Appendix B is amended by revising footnote 1 to read as follows: APPENDIX B TO PART 225—CAPITAL ADEQUACY GUIDELINES FOR BANK HOLDING COMPANIES AND STATE MEMBER BANKS: LEVERAGE MEASURE The guidelines will apply to bank holding companies with less than $150 million in consolidated assets on a bank-only basis unless: (1) The holding company or any nonbank subsidiary is engaged directly or indirectly in any nonbank activity involving significant leverage, or (2) The holding company or any nonbank subsidiary has outstanding significant debt held by the general public. Debt held by the general public is defined to mean debt held by parties other than financial institutions, officers, directors, and controlling shareholders of the banking organization or their related interests. 114 Federal Reserve Bulletin • February 1993 FINAL RULE—AMENDMENT TION CC TO REGULA- The Board of Governors is amending 12 C.F.R. Part 229, its Regulation CC (Availability of Funds and Collection of Checks) to conform the Uniform Commercial Code (UCC) citations in Regulation CC and its Commentary to the 1990 version of Articles 3 and 4 of the UCC, as approved by the National Conference of Commissioners on Uniform State Laws and the American Law Institute, and to a recent realignment in Federal Reserve check processing regions. The amendments will provide updated cross-references between Regulation CC and the latest version of the UCC and update the routing numbers in the appendices to the regulation. Effective January 5, 1993, 12 C.F.R. Part 229 is amended as follows: 1. The authority citation for part 229 continues to read as follows: Authority: 12 U.S.C. 4001 et seq. 2. In section 229.2, in the second sentence of paragraph (cc) "U.C.C. 4-202(2)" is revised to read "UCC 4-202(b)". 3. In Appendix A to part 229, under the heading "SECOND FEDERAL RESERVE DISTRICT," the numbers appearing directly under the subheading "Head Office" are transferred in numerical order under the subheading "Jericho Office" and the subheading "Head Office" is removed. 4. In Appendix B-2 to part 229, the headings "New York" and "Jericho" and their corresponding entries are removed from the table. 5. In Appendix E under the Commentary to section 229.2, in the first sentence of the second paragraph of paragraphs (f) and (g), "U.C.C. 4-104(l)(c)" is revised to read "UCC 4-104(a)(3)"; in the second sentence of paragraph (j), "U.S.C. 3-410, 3-411" is revised to read "UCC 3-409"; in the first sentence of the third paragraph of paragraph (k), "U.C.C. 3-120" is revised to read "UCC 4-106(a)"; the first sentence of the last paragraph of paragraph (bb) is revised as set forth below; and in the fourth sentence of paragraph (cc), "U.C.C. 4-202(2)" is revised to read "UCC 4-202(b)". APPENDIX E TO PART 229—[AMENDED] Section 229.2—Definitions. (bb) Qualified returned check. * * * A qualified returned check need not contain the elements of a check drawn on the depositary bank, such as the name of the depositary bank. * * * 6. In Appendix E under the Commentary to section 229.11, in the fourth sentence of the last paragraph of paragraph (b) under the heading " Time Period Adjustment for Withdrawing Cash", "U.C.C. 4-107" is revised to read "UCC 4-108". 7. In Appendix E under the Commentary to paragraph (a) of section 229.14, in the fourth sentence of the first paragraph of footnote 3, "U.C.C. 4-211 and 4-213" is revised to read "UCC 4-214 and 4-215". 8. In Appendix E under the Commentary to section 229.19, in the last sentence of the last paragraph of paragraph (e), "U.C.C. 4-213(l)(a)" is revised to read "UCC 4-215(a)(l)". 9. In Appendix E under the Commentary to section 229.30: a. In paragraph (a), the last two sentences of the seventh from the last paragraph are removed; two new sentences are added to the end of the fifth from the last paragraph as set out below; in footnote 4, "U.C.C. 4-202(3)" is revised to read "UCC 4-202(c)"; in the third sentence of the sixth from the last paragraph, "U.C.C. 3-418 and 4-213(1)" is revised to read "UCC 3-418(c) and 4-215(a)"; the third from the last paragraph (numbered 1) is removed; the second from the last and the last paragraphs (numbered 2 and 3) are redesignated as 1 and 2, respectively; in newly-redesignated paragraph 1, "Section 4-301(4)" is revised to read "Section 4-301(d)"; and in newly-redesignated paragraph 2, "Section 4-301(1)" is revised to read "Section 4-301(a)"; b. In paragraph (b), in the last sentence of the last paragraph, "U.C.C. 4-207" is revised to read "UCC 4-208"; and c. In paragraph (f), in the first sentence of the second paragraph, "U.C.C. 4-301(1)" is revised to read "UCC 4-301(a)". APPENDIX E TO PART 229—[AMENDED] Legal Developments Section 229.30—Paying Bank's Responsibility for Return of Checks * * * Also, a paying bank is not responsible for failure to make expeditious return to a party that has breached a presentment warranty under UCC 4-208, notwithstanding that the paying bank has returned the check. (See Commentary to section 229.33(a).) 10. In Appendix E under the Commentary to section 229.31: a. In paragraph (a), in the second sentence of the fifth from the last paragraph, "U.C.C. 4-202(3)" is revised to read "UCC 4-202(c)"; the third from the last paragraph (numbered 1) is removed; the second from the last and the last paragraphs (numbered 2 and 3) are redesignated as 1 and 2, respectively; in newly-redesignated paragraph 1, "Section 4-202(2)" is revised to read "Section 4-202(b)"; and in newly-redesignated paragraph 2, "Section 4-212(1)" is revised to read "Section 4-214(a)"; b. In paragraph (b), in the first sentence of the third paragraph, "U.C.C. 4-202(2)" is revised to read "UCC 4-202(b)"; and c. In paragraph (c), in the first sentence of the last paragraph, "U.C.C. 4-212(1)" is revised to read "UCC 4-214(a)". 11. In Appendix E under the Commentary to section 229.32, in the fourth sentence of the first paragraph of paragraph (a), "U.C.C. 3-504(2)" is revised to read "UCC 3-111"; and in the second sentence of the second paragraph of paragraph (b), "U.C.C. 4-107" is revised to read "UCC 4-108". 12. In Appendix E under the Commentary to section 229.33, in the second from the last sentence of the last paragraph of paragraph (a), "U.C.C. 4-207(1)" is revised to read "UCC 4-208"; and in the last sentence of the last paragraph, "U.C.C. 4-207(1) and 4-302" is revised to read "UCC 4-208 and 4-302". 13. In Appendix E under the Commentary to section 229.35: a. In paragraph (a), the second sentence of the sixth paragraph is revised to read "(See UCC 4-207(a) and 4-208(a).)"; b. In paragraph (b), in the seventh sentence of the fifth paragraph, "U.C.C. 4-213(1) and 4-302" is revised to read "UCC 4-215(a) and 4-302"; in the eighth sentence of the fifth paragraph, "U.C.C. 4-211(2) and (3) and 4-213(3)" is revised to read "UCC 4-213 and 4-215(d)"; in the tenth sentence of the fifth paragraph, "U.C.C. 4-211, 4-212, and 4-213" is revised to read "UCC 4-213, 4-214, and 4-215"; in the first and second sentences of the 115 second from the last paragraph (numbered 1), "Section 4-212(1)" is revised to read "Section 4-214(a)"; and the last paragraph (numbered 2) is revised as set out below; and c. In paragraph (c), in the second sentence "U.C.C. 4-201(2)" is revised to read "UCC 4-201(b)". APPENDIX E TO PART 229—[AMENDED] Section 229.35—Indorsements (b) * * * 2. Section 3-415 and related provisions (such as section 3-503), in that such provisions would not apply as between banks, or as between the depositary bank and its customer. 14. In Appendix E under the Commentary to section 229.36: a. In paragraph (b), in the fourth sentence of the third paragraph (numbered 1), "U.C.C. 4-204(3)" is revised to read "UCC 4-204(c)"; in the fourth sentence of the seventh paragraph (numbered 3), "U.C.C. 3-504(2)" is revised to read "UCC 3-111"; and in the last paragraph, "U.C.C. 3-504(2)(c)" is revised to read "UCC 3-111"; b. In paragraph (c), the third sentence is revised as set out below; and c. In paragraph (d), in the fifth sentence, "U.C.C. 4-213(b) or (d)" is revised to read "UCC 4-215(a)(2) or (3)". APPENDIX E TO PART 229—[AMENDED] Section 229.36—Presentment and Issuance of Checks (c) * * * This process has the potential to improve the efficiency of check processing, and express provision for truncation and electronic presentment is made in UCC 4-110 and 4-406(b). * * * * * * * * 15. In Appendix E under the Commentary to section 229.37, before the parenthetical in the second sentence in the first paragraph, "U.C.C. 4-103(1)" is revised to 116 Federal Reserve Bulletin • February 1993 read "UCC 4-103(a)"; and in the first sentence in the second paragraph, "U.C.C. 4-103(2)" is revised to read "UCC 4-103(b)". 16. In Appendix E under the Commentary to section 229.38: a. In paragraph (a), in the third sentence in the second paragraph, "U.C.C. 4-103(5) and 4-202(3)" is revised to read "UCC 4-103(e) and 4-202(c)"; b. In paragraph (b), in the last sentence "sections 4-213 and 4-302" is revised to read "sections 4-215 and 4-302" ; and c. In paragraph (e), the second sentence is revised to read as follows: APPENDIX E TO PART 229—[AMENDED] Section 229.38—Liability (e) * * * It adopts the standard of UCC 4-109(b). 17. In Appendix E under the Commentary to section 229.39, in the introductory text "U.C.C. 4-214" is revised to read "UCC 4-216". Capital is the 12th largest commercial banking organization in Missouri, controlling deposits of $503.8 million, representing less than 1 percent of the total deposits in commercial banking organizations in the state.1 Magna Bank is the 36th largest commercial banking organization in Missouri, controlling deposits of $150.6 million, representing less than 1 percent of the total deposits in commercial banking organizations in the state. Upon consummation of this proposal, Capital would become the ninth largest commercial banking organization in Missouri, controlling deposits of $654.4 million, representing approximately 1.24 percent of the total deposits in commercial banking organizations in the state. Capital and Magna Bank do not compete directly in any relevant banking market. Based on all the facts of record, the Board believes that consummation of this proposal would not result in any significantly adverse effects on competition in any relevant banking market. Considerations relating to the financial and managerial resources and future prospects of Capital and its subsidiary banks and Magna Bank, and other supervisory factors the Board is required to consider under section 3 of the BHC Act, also are consistent with approval of this application. Convenience and Needs Considerations Statement by the Board of Governors of the Federal Reserve System Regarding the Application by Capital Bancorporation, Inc. to acquire Magna Bank of Southern Missouri In reviewing this application, the Board also is required to consider the convenience and needs of the community to be served and take into account the record of performance of Capital and its subsidiary banks, as well as Magna Bank, under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA"). 2 The Board notes that four of Capital's five subsidiary banks, representing approximately 87 percent of Capital's assets, have received satisfactory ratings from their primary regulators in their most recent examinations for CRA performance. 3 However, one of Capital's subsidiary banks, Capital Bank By order dated November 30, 1992, the Board approved the application of Capital Bancorporation, Inc., Cape Girardeau, Missouri ("Capital"), pursuant to section 3 of the Bank Holding Company Act ("BHC Act") (12 U.S.C.§ 1842) to acquire the voting shares of Magna Bank of Southern Missouri, Ozark, Missouri ("Magna Bank"). Notice of the application, affording interested parties an opportunity to submit comments, has been published (57 Federal Register 28,871 (1992)). 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. 1. Deposit data are as of June 30, 1991. 2. The CRA requires the appropriate federal supervisory authority to "assess the institution's record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of such institution," and to take this record into account in its evaluation of bank holding company applications. 12 U.S.C. § 2903. 3. The following banks, including Capital's lead bank, all received satisfactory ratings at their most recent examinations for CRA performance: Capital Bank of Cape Girardeau County, Cape Girardeau, Missouri (Federal Deposit Insurance Corporation ("FDIC") — July 26, 1991); Capital Bank of Columbia, Columbia, Missouri (FDIC — December 11, 1990); Capital Bank of Sikeston, Sikeston, Missouri (FDIC — October 11, 1990); and Capital Bank of Perryville, N.A., Perryville, Missouri (Office of the Comptroller of the Currency — September 30, 1988). Magna Bank received a satisfactory rating for CRA performance from the FDIC on December 14, 1991. ORDERS ISSUED UNDER BANK COMPANY ACT HOLDING Orders Issued Under Section 3 of the Bank Holding Company Act Legal Developments and Trust Company of Clayton, Clayton, Missouri ("Clayton Bank"), controlling approximately 13 percent of Capital's assets, received two consecutive less than satisfactory examination ratings for CRA performance in 1991 and 1992 from its primary regulator, the FDIC. 4 The Board has carefully reviewed these examinations and the CRA performance of Capital and its subsidiary banks, as well as Magna Bank, in light of the CRA, the Board's regulations, and the jointly issued Statement of the Federal Financial Supervisory Agencies Regarding the Community Reinvestment Act ("Agency CRA Statement"). 5 The Board previously has stated that applicants should address their CRA responsibilities and have the necessary policies in place and working well before they file an application.6 In this regard, actions taken by Capital and Clayton Bank to improve the CRA performance of Clayton Bank have been carefully considered in this application. In response to the 1991 examination, Clayton Bank initiated several measures to address the deficiencies in its CRA performance. Examiners found in the 1992 examination that these steps resulted in improvement in Clayton Bank's CRA program, and upgraded Clayton Bank's CRA rating to a "needs to improve" record of meeting community credit needs. In assigning this rating, the FDIC noted that the lack of management and personnel resources and the limited amount of time since the 1991 examination hindered the bank's ability to implement all needed improvements. In this regard, the record in this case indicates that in the past few years, Clayton Bank has devoted significant resources to addressing financial problems identified by examiners. Although these efforts have resulted in improvement in the bank's financial condition, Bank management's emphasis on financial concerns limited its ability to fully implement programs designed to strengthen the bank's CRA program. In response to the 1992 examination, Capital's board of directors has approved various additional measures designed to improve its oversight of the CRA programs of Clayton Bank and its other subsidiary banks. Clayton Bank also has implemented, and has committed to implement, various measures to improve and address identified weaknesses in its CRA program. 4. Clayton Bank's CRA performance was rated "substantial noncompliance" by the FDIC as of May 1991, and "needs to improve" as of April 1992. 5. 54 Federal Register 13,742 (1989). 6. First Interstate BancSystem of Montana, Inc., 77 Federal Reserve Bulletin 1007 (1991); Agency CRA Statement, 54 Federal Register at 13,743. 117 These steps include: (1) Hiring more personnel to administer CRA activities; (2) Commencing a call program targeting small businesses in its delineated community; (3) Implementing a home improvement loan program and advertising this program in local newspapers; and (4) Meeting with groups representing low- and moderate-income individuals in the bank's delineated community. Clayton Bank also has committed to allocate a total of $2 million over the next three years for loans to qualified low-and moderate-income borrowers. To improve its system of tracking the geographic extension of credit applications, extensions and denials, the bank replaced its system of geocoding this information by zip code with a geocoding-by-census tract system. Additionally, Clayton Bank has taken certain steps to increase its participation in community development activities, including purchasing $1 million of street improvement bonds for the City of Brentwood, Missouri, a city located within Clayton Bank's revised service area. The Board believes that, on balance, the initiatives implemented by Capital and Clayton Bank since the 1991 and 1992 examinations, and the steps that these organizations have committed to take, are sufficient to address the weaknesses in Clayton Bank's record of CRA performance. These steps were developed in consultation with FDIC examiners. The Board recognizes that the record compiled in this application points to areas that continue to require improvement in the CRA performance of Clayton Bank. Capital has implemented effective CRA programs at its other subsidiary banks, as reflected in the CRA examination reports of these institutions, and the Board believes that Capital and Clayton Bank have taken strong steps to ensure that the deficiencies in Clayton Bank's record of CRA performance will be redressed. The Board expects Capital and Clayton Bank to implement fully the CRA initiatives and commitments discussed in this Order and contained in its application. Based on all of the facts of record, including the commitments made by Capital and Clayton Bank in this case, the Board concludes that convenience and needs considerations, including the CRA performance records of Capital and its subsidiary banks and Magna Bank, are consistent with approval of this application. Capital's progress in implementing these initiatives and commitments will be monitored by the Federal Reserve Bank of St. Louis and in connection with future applications to expand its deposit-taking facilities. Based on the foregoing and other facts of record, the 118 Federal Reserve Bulletin • February 1993 Board has determined that the application should be, and hereby is, approved. The Board's approval of this transaction is specifically conditioned upon compliance with the commitments made by Capital and Clayton Bank in connection with this application. The commitments and conditions relied upon by the Board in reaching its decision are both considered commitments imposed in writing by the Board in connection with its findings and decision and, as such, may be enforced in proceedings under applicable laws. This approval is also conditioned upon Capital receiving all necessary Federal and state approvals. December 16, 1992 J E N N I F E R J . JOHNSON Associate Secretary of the Board Dissenting Statement of Governors Kelley and LaWare The Board's precedent requires that the CRA policies of an applicant and its subsidiary banks must be in place and working well when an application is considered. In this case, Clayton Bank's CRA policies and programs have been found to be unsatisfactory in the last two consecutive CRA performance examinations by its primary regulator. Although both Capital and Clayton Bank have initiated policies and programs to address these deficiencies, several of these initiatives were not put in place until well after this application had been filed, and the effect of these initiatives in improving Clayton Bank's CRA performance has not been adequately demonstrated on the record before the Board. For these reasons, we do not believe that the record of CRA performance at this time is sufficient to conclude that the policies of Capital and Clayton Bank are working well, and on this basis, we would deny the application. December 16, 1992 CB Financial Corporation Jackson, Michigan Order Approving Acquisition of a Bank Holding Company CB Financial Corporation, Jackson, Michigan ("CB Financial"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has applied under section 3(a)(3) of the BHC Act (12 U.S.C. § 1842(a)(3)) to acquire First of Charlevoix Corporation, Charlevoix, Michigan ("FCC"), through an interim company, CB Charlevoix Corporation, that will merge with and into FCC with FCC as the surviving company. 1 Notice of the application, affording interested persons an opportunity to submit comments, has been published (57 Federal Register 29,081 (1992)). 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. CB Financial is the 16th largest commercial banking organization in Michigan, controlling three subsidiary banks with total deposits of $535.1 million, representing less than 1 percent of total deposits in commercial banking organizations in the state. 2 FCC is the 107th largest commercial banking organization in Michigan, controlling deposits of $39 million, representing less than 1 percent of total deposits in commercial banking organizations in the state. Upon consummation of this proposal, CB Financial would remain the 16th largest banking organization in Michigan, controlling deposits of $574.1 million, representing less than 1 percent of total deposits in commercial banking organizations in the state. Definition of the Relevant Banking Market The BHC Act provides that the Board may not approve a proposal submitted under section 3 of the BHC Act if the proposal would result in a monopoly or the effect of the proposal may be substantially to lessen competition in any relevant market. In evaluating the competitive factors in this case, the Board has carefully considered the comments of Resources Planning Corporation ("RPC"). 3 RPC argues that the relevant geographic market for analyzing the competitive effects of this proposal should be limited to the City and Township of Charlevoix, Michigan ("Charlevoix"), and that consummation of this proposal would substantially lessen competition for banking services in Charlevoix. 4 RPC relies principally on a 1. Following this acquisition, CB Financial will seek the necessary regulatory approval to merge FCC into CB Financial and thereafter to merge FCC's sole subsidiary, First State Bank of Charlevoix, Charlevoix, Michigan ("FSB"), into CB Financial's subsidiary bank, Charlevoix County State Bank, also in Charlevoix, Michigan ("CCSB"). 2. State banking data are as of June 30, 1992. 3. RPC has also sought to enjoin this proposal in state court under the Michigan antitrust statutes. In this suit, RPC maintained that the relevant geographic market was Charlevoix, or in the alternative, Charlevoix County. The court dismissed RPC's claim, and RPC has appealed this judgment. See Charlevoix Investment Company, et al. v. First of Charlevoix Corporation, Case No. 92-343-25-CK (May 29, 1992) (Circuit Court for Charlevoix County). 4. CCSB and FSB, subsidiary banks of CB Financial and FCC, respectively, are both located in Charlevoix, Michigan. RPC argues Legal Developments consultant's study conducted during a two-day visit to the Charlevoix area in May 1992.5 This study concludes that Charlevoix's unique character as a summer resort divided by a drawbridge in the center of town, and the distances between Charlevoix and surrounding population centers indicate that local customers have no reasonable alternative for banking services except depository institutions located in Charlevoix. The Board and the courts have found that the relevant banking market for analyzing the competitive effect of a proposal must reflect commercial and banking realities and must consist of the local area where the banks involved offer their services and where local customers can practicably turn for alternatives. 6 The Board has considered all the facts in this case, including the comments and information provided by RPC and other commenters 7 and a study conducted by the Federal Reserve Bank of Chicago ("Reserve Bank"), and concludes that the relevant geographic market to evaluate the competitive effects of this proposal is defined as: Charlevoix County; Emmet County (excluding Bliss, Carp Lake, and Wawatam Townships); Burt, Mentor, Tuscarora, and Wilmot Townships in Cheboygan County; and Banks Township in Antrim County, all in Michigan (the "Petoskey banking market"). The Reserve Bank conducted an extensive investigation of the Petoskey banking market including conducting telephone surveys of customers for banking services, and reviewed data regarding commuting, traffic patterns, and banking transactions. In September 1992, the Reserve Bank also conducted a four-day field study of the Charlevoix area. This study included trips to surrounding populations centers, interviews with local bankers and businessmen, and assessments that this proposal would permit CB Financial to own two of the four banks and savings associations (together "depository institutions") located in Charlevoix and thereby control approximately 90 percent of the total deposits held by depository institutions in Charlevoix. 5. RPC has also provided statements from another consultant agreeing with the conclusion that the proposal would have a significantly adverse effect on competition in Charlevoix and stating that any definition of the relevant geographic market as being larger than Charlevoix would not provide a realistic basis for assessing the competitive consequences of this proposal on small business lending in the market. For reasons explained in previous decisions, the Board continues to believe that the competitive analysis of bank expansion proposals should be based on the availability of the cluster of banking services to a range of customers in the local banking market. See, e.g., First Hawaiian, Inc., 77 Federal Reserve Bulletin 52 (1991). See also United States v. Philadelphia National Bank, 374 U.S. 321 (1963). 6. See St. Joseph Valley Bank, 68 Federal Reserve Bulletin 673, 674 (1982). 7. The Board received comments from individuals in the Charlevoix area who believe that the proposal would result in monopolistic market power that would have the effect of increasing prices for banking services, decreasing hours of operation, reducing available banking services, and discouraging other competitors from entering the market. 119 of commercial advertising activities. The results of this investigation and other analysis indicate that the relevant geographic market for purposes of analyzing the competitive effects of this proposal extends beyond the geographic boundaries of Charlevoix to include the area defined above as the Petoskey banking market. The Petoskey banking market is anchored by four small towns located in Charlevoix and Emmet Counties: Petoskey (population of 6,056), Charlevoix (population of 3,116), East Jordan (population of 2,240), and Boyne City (population of 3,478).8 A number of geographic and commercial factors tie these towns together with Charlevoix. For example, Charlevoix is located only 16 miles from Petoskey, the largest population center in the area, and is connected to Petoskey by a major, well-maintained federal highway. 9 The Reserve Bank's study found that this highway provided convenient access to Petoskey, with travel time averaging approximately 20 minutes and varying only slightly depending on the time of day. In addition, local residents indicated that travel to Petoskey was not unduly difficult even during the drawbridge's peak operating times during the summer vacation season because the opening of the drawbridge is predictable and avoidable.10 Moreover, residents commented that the peak tourist season in this area lasts only about two months and the bridge opens less frequently during the rest of the year. 11 Travel time from Charlevoix to Boyne City is approximately 25 minutes and approximately 20 minutes from Petoskey to Boyne City. East Jordan is even closer to Charlevoix, with travel time of approximately 15 minutes. Petoskey is the largest community in the banking market and is the location of the area's two largest employers, who employ more than 1800 workers, 12 as well as numerous other relatively sizable employers. Data indicate that there is a considerable amount of commuting from Charlevoix County to places of employment in Emmet County. 13 In addition, the largest 8. Population data are based on 1990 Census Bureau information. 9. Charlevoix is located between Lake Michigan to the northwest and Lake Charlevoix to the east. Petoskey is northeast of Charlevoix and connected by federal highway U.S. 31, which has a posted speed limit of 55 miles per hour. 10. The drawbridge divides the town approximately in half and primarily affects travel north to Petoskey by individuals in the southern part of Charlevoix. 11. During July and August, the population of Charlevoix increases from 3,116 to over 20,000. 12. Northern Michigan Hospital, with more than 1,200 employees, is one of two regional medical centers in Michigan. Boyne USA Resorts employs approximately 600 workers in Emmet County. 13. Commuting data for 1980 indicate that 14.3 percent of the overall labor force in Charlevoix County commutes to work in Emmet County, and that 9.3 percent of these workers commute from Charlevoix to Emmet County. More than half of the Charlevoix workers commuting to Emmet County (4.9 percent) work in Petoskey. Commuting data for 1990 reflect no significant change in these 120 Federal Reserve Bulletin • February 1993 employers in Charlevoix County are in East Jordan and Boyne City. 14 Data on traffic patterns collected by the Michigan Department of Transportation show a significant amount of road travel between Charlevoix and Petoskey, indicating accessibility and the economic integration between Charlevoix and Petoskey. Despite the fact that these two towns are small, traffic counts at three locations between Charlevoix and Petoskey indicate that approximately 10,000 vehicles pass daily between these two towns. In addition, Petoskey has been designated as a Rand McNally Basic Trading Center for the area that includes Emmet, Charlevoix, Cheboygan, and Otsego Counties, because Petoskey is a town which serves as a center for shopping goods purchased by residents of that area. 15 This Trading Center designation is based on a determination that consumers in this area ordinarily travel to Petoskey to purchase retail goods. Banking data also confirm that consumers in Charlevoix regularly rely on providers of goods and services throughout the Petoskey banking market as reasonable alternatives to the providers in Charlevoix. For example, check-clearing data from the subsidiary banks of CB Financial and FCC in Charlevoix show that a substantial number of checks cleared at both banks were for transactions outside Charlevoix, with nearly 20 percent of these transactions occurring in Petoskey. Residents of Charlevoix and surrounding areas also are well informed on the practicable alternatives for banking services through commercial advertising. For example, the area's only daily newspaper, the Petoskey News-Review, is located in Petoskey and is widely distributed throughout Emmet and Charlevoix Counties. This paper regularly carries advertisements for banking services from all banking institutions in the area. 16 Local radio stations in Petoskey, Charlevoix, and Boyne City also broadcast banking advertisements from banks throughout the Petoskey banking market to consumers in Emmet and Charlevoix Coun- commuting patterns. For example, 14.4 percent of the labor force in Charlevoix County commuted to jobs in Emmet County in 1990. 14. East Jordan Iron Works (500 employees) and Dura Mechanical (300 employees) are located in East Jordan. Allied-Signal (486 employees) is located in Boyne City. 15. The Petoskey, Michigan Basic Trading Area is defined to include Emmet, Charlevoix, Cheboygan and Otsego Counties. Basic Trading Centers such as Petoskey are also viewed as serving their surrounding areas with various specialized services, such as medical care, entertainment, higher education, and a daily newspaper. 16. Charlevoix County accounts for 38 percent of this publication's circulation, with 16 percent within the city boundaries of Charlevoix. Data from the Circulation Department of the Petoskey News-Review indicate that the total circulation of the newspaper in Charlevoix, Boyne City, and East Jordan exceeds the estimated number of households in those cities. ties. In addition, the two telephone directories serving the region include listings of all banks and their branch locations identified in the Reserve Bank's study as being in the Petoskey banking market. Information regarding banking services and prices is widely disseminated throughout the market through these media outlets. Bankers interviewed by the Reserve Bank in Petoskey and surrounding towns, such as Boyne City, have confirmed that their institutions are in competition with banks in Charlevoix and attract customers from Charlevoix. For example, several Petoskey area bankers stated that they regularly reviewed the loan and deposit rates and operating hours of Charlevoix banks for comparability. A survey conducted by the Reserve Bank of banks in Petoskey, Charlevoix, and Boyne City showed that banks generally have comparable prices for their products and hours of operation. 17 Customers also have convenient access to a number of banking services throughout the Petoskey banking market through extensive ATM networks. For example, the two largest banking institutions in the market, NBD Bank and Old Kent Bank, are located in Petoskey and serve their Charlevoix customers through ATMs located in that town. Moreover, a banker in Boyne City stated that his bank is establishing a new branch near Charlevoix to serve its Charlevoix customers more efficiently. Data on the deposit and loan customers of CCSB and FSB, the subsidiary banks of CB Financial and FCC, also indicate that these banks serve areas that extend beyond the boundaries of Charlevoix County. For example, data from CB Financial's subsidiary bank indicate that more than 30 percent of its loan and deposit accounts are from areas outside Charlevoix, including Petoskey. Similar data for FCC's subsidiary bank indicate that approximately 25 percent of deposit accounts and over 13 percent of loan accounts are derived from outside the immediate Charlevoix area. A telephone survey of consumers and small businesses in Charlevoix and Emmet Counties conducted by the Reserve Bank indicate that a number of customers live in one town and obtain banking services in another town within the Petoskey banking market. 18 17. The survey reviewed a number of the products and the hours of operation for three banks in Petoskey, two banks in Charlevoix, and one bank in Boyne City. All banks surveyed had comparable rates for time deposits, money market deposit accounts, and commercial loans. In addition, all banks had extended hours on Friday and the same hours on Saturday. 18. This survey also indicated that individuals in Atwood (located in Antrim County) frequently travel to Charlevoix and East Jordan, that individuals in Burt Lake and Indian River (both located in Cheboygan County) routinely travel to Petoskey for work and shopping, and that residents of Pellston (located in Emmet County) are drawn to Petoskey for shopping more regularly than to the City of Cheboygan. Legal Developments For example, survey data revealed consumers who live in Charlevoix and bank in Petoskey, and businesses which are located in the City of Charlevoix and use banks located in Emmet County. Moreover, a business respondent located in Petoskey had accounts in a Charlevoix bank, and another business respondent indicated that it would look to Petoskey for banking services if it became dissatisfied with the services provided by its Charlevoix bank. After review of these data and the other facts of record, the Board believes that the record indicates that customers in Charlevoix reasonably can and do turn to providers of banking services throughout the Petoskey banking market. On this basis, the Board disagrees with the contention of RPC that the geographic market in this case should be limited to the City and Township of Charlevoix. Instead, based on all of the facts of record, the Board finds that the relevant geographic market in this case is the Petoskey banking market as defined above. Competitive Effects in the Petoskey Banking Market CB Financial is the fifth largest depository institution in the market, controlling deposits of $45 million, representing 7.9 percent of total deposits in depository institutions in the market. 19 FCC is the sixth largest depository institution in the market, controlling deposits of $36.3 million, representing 6.4 percent of total deposits in depository institutions in the market. Upon consummation, CB Financial would become the fourth largest depository institution in the market, controlling total deposits of $81.3 million, representing 14.3 percent of total deposits in depository institutions in the market. The Herfindahl-Hirschman Index ("HHI") would increase 101 points to a level of 1786.20 Accordingly, in light of the small increase in concentration, the number of competitors remaining in the market, 19. Market data are as of June 30, 1991. In this context, depository institutions include commercial banks and savings banks. Market share data are based on calculations in which the deposits of thrift institutions are included at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, major competitors of commercial banks. See Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). 20. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is between 1000 and 1800 is considered to be moderately concentrated. The Department of Justice has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by at least 200 points. The Justice Department has stated that the higher than normal HHI thresholds for screening bank mergers and acquisitions for anticompetitive effects implicitly recognizes the competitive effect of limited-purpose lenders and other non-depository financial entities. 121 and other facts of record, the Board concludes that consummation of the proposal is not likely to result in any significantly adverse effect on competition in any relevant banking market. The Board also concludes that the financial and managerial resources, supervisory factors, and future prospects of CB Financial and FCC are consistent with approval of this application. Convenience and Needs Considerations RPC has also alleged that this transaction is likely to have an adverse effect on the convenience and needs of the community, and has alleged that the performance under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA") of CB Financial and its subsidiary banks is deficient in a number of areas. Among its allegations, RPC raises concerns regarding the adequacy of certain aspects of the CRA program of CB Financial's lead bank, City Bank and Trust Company, Jackson, Michigan ("City Bank"), including allegations that CB Financial has not satisfactorily addressed the higher denial rate of mortgage loans by City Bank for minorities as opposed to whites based on City Bank's 1991 Home Mortgage Disclosure Act ("HMDA") statements, and that the mortgage lending record of City Bank does not compare satisfactorily with other banks in the community. RPC also challenges City Bank's methodology for defining its delineated community, and raises issues regarding City Bank's CRA compliance, and City Bank's corporate policies, including challenging the level of involvement of City Bank's CRA officer. In addition, RPC challenges City Bank's CRA self-assessment, community outreach, and marketing efforts, and questions whether the commitments made by CB Financial are too broad and vague to serve as effective goals for improving CRA performance. 21 21. RPC also contends in general that CB Financial's application does not discuss in detail how convenience and needs considerations would be addressed, and specifically claims that: (1) CCSB's CRA Statement has not been updated since 1989; (2) The public portion of CCSB's CRA file was not available for four business days; (3) CCSB did not have available current or accurate literature regarding its banking services in May 1992; and (4) CCSB has not been evaluated for CRA compliance since 1990. Other commenters maintain that the proposal would result in the elimination of local ownership of the target bank and thereby have a negative impact on the convenience and needs of customers in and around Charlevoix. The record indicates that the board of the bank resulting from the merger of CCSB and FSB will consist of persons who are familiar with the Charlevoix area from their experience on the boards of CCSB and FSB. In addition, senior management of the merged bank responsible for the day-to-day operations of the bank will be made up of current officers of CCSB and FSB who would continue to reside in the Charlevoix area. As a result, the Board believes there would be no loss of expertise or knowledge of special credit needs in the communities served. 122 Federal Reserve Bulletin • February 1993 In considering the convenience and needs of the communities to be served by these institutions, the Board has carefully reviewed the CRA performance record of CB Financial's subsidiary banks and FSB, as well as Protestants' comments and CB Financial's responses to those comments. The Board has considered the CRA performance in light of the CRA, the Board's regulations, and the Statement of the Federal Financial Supervisory Agencies Regarding the Community Reinvestment Act ("Agency CRA Statement"). 22 An important element of the analysis of CRA performance is the rating received by the institution following an examination of CRA performance and compliance by the institution's primary federal supervisor. The Board notes that CB Financial's lead bank, City Bank, received a satisfactory rating from its primary regulator, the Office of the Comptroller of the Currency, at its most recent CRA examination as of February 1989. CCSB received a CRA rating of "outstanding" from the Federal Deposit Insurance Corporation ("FDIC") as of May 1990, and City Bank, St. Johns, Michigan, received a CRA rating of "satisfactory" from the FDIC as of February 1991. The Agency CRA Statement provides that although CRA examination reports do not provide conclusive evidence of an institution's CRA record, these reports will be given great weight in the application process. The record in this case also indicates that CB Financial has in place the elements of an effective CRA program. CB Financial has assigned CRA compliance responsibilities to its Assistant Vice President and Legal Counsel, whose responsibility is to coordinate and monitor CRA compliance activities at all of CB Financial's subsidiary banks. This individual serves as CRA consultant and advisor to CCSB and City Bank. The board of directors of CCSB and City Bank annually review and are responsible for approving the CRA Statement for their respective banks. The CRA Statements of CCSB and City Bank indicate that, to assist in meeting the credit needs of the communities served, both banks offer a wide range of lending programs such as: student loans; loans guaranteed by the Small Business Administration and other federal, state, and local agencies; residential loans; and community development loans. Since 1989, City Bank has also offered rental rehabilitation loans, and loans under the Michigan State Housing Development Authority, and the Michigan Credit Certification Program to low- and moderate-income customers. CCSB and City Bank employ various methods of outreach to ascertain the credit needs of their entire 22. 54 Federal Register 13,742 (1989). communities. For example, CCSB maintains membership in the Charlevoix, Ellsworth and Central Lake Chambers of Commerce, and the Northern Lakes Economic Alliance. CCSB also participates in various charitable and non-profit community organizations such as the local United Funds and Little Traverse Conservancy, and officers and directors of CCSB are involved in community service clubs such as the Lions, Rotary, and Kiwanis. City Bank's outreach efforts include a customer call program in which bank officers contact area customers and non-customers to determine how the bank may better serve the credit needs of the community. A report of each call is prepared and delivered to the bank's business development officer, and the business development officer will refer the individual to the appropriate bank department. 23 The business development officer also discusses information from these contacts with City Bank's President or CRA Officer in order to improve the bank's efforts to assist in meeting ascertained credit needs. To date, the bank made approximately 1,400 business development calls. City Bank's ascertainment efforts also include memberships in the Albion Alliance, Albion Civic Foundation, Chamber of Commerce, Jackson Human Relations Commission, Jackson Venture Capital Forum, NAACP, and the United Way. In addition, City Bank's marketing activities include advertising in the Jackson Citizen Patriot, the area's major newspaper, as well as the Blazer News and Metroplex, two newspapers which target low-income and minority communities in the Jackson area. City Bank also advertises in local shoppers' newspapers, and has instituted a radio advertising program targeted towards low- and moderate-income areas. The 1991 HMDA data reported by City Bank indicates disparities in rates of housing-related loan applications, and in approvals and denials that vary by racial or ethnic group and income levels. Because all banks are obligated to ensure that their lending practices are based on criteria that assure not only safe and sound lending, but also assure equal access to credit by creditworthy applicants regardless of race, the Board is concerned when the record of an institution indicates disparities in lending to minority and lowand moderate-income applicants. The Board recognizes, however, that HMDA data alone provide only a limited measure of an institution's lending in its community. The Board also recognizes that HMDA data have limitations that make the data inadequate bases, absent other information, for conclusively determining 23. All inquiries concerning credit needs which are expressed to bank tellers are referred to the branch manager or officer, who will contact the business development officer. Legal Developments whether an institution has engaged in illegal discrimination on the basis of race or ethnicity in making lending decisions. The most recent examination for CRA compliance and performance conducted by the bank's primary regulator found no evidence of illegal discrimination at City Bank. HMDA data for 1991 also show that City Bank originated housing-related loans in 67 percent of the applications that it received from low- and moderate-income areas in Calhoun County, and in 63 percent of the applications that it received from low- and moderate-income areas in Jackson County. In addition, the percentage of home mortgage loan applications received by City Bank from minorities on average exceeds the percentage received by other lenders in the Jackson market. The bank receives twice as many mortgage loan applications as do other banking institutions in Jackson County. 24 City Bank's record for mortgage loan originations in low-income census tracts is also better than the average for other banking institutions in the Jackson market. The ratio of City Bank's mortgage loans made in low-income census tracts to its mortgage loans in high-income census tracts is higher than the comparable ratio for other banking institutions in the Jackson market. In order to monitor its lending activity to assure the uniform application of lending standards, monthly lending reports from the mortgage and consumer lending areas are reviewed by the bank's CRA Officer. These reports include information regarding application denials as well as loans originated.25 Periodically, the CRA Officer reviews his assessments with the bank's President and Chief Executive Officer. The Board also notes that other facets of City Bank's lending record reflect its commitment to serving lowand moderate-income areas. For example, City Bank represents that its underwriting criteria are no more stringent than standards employed by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation. In 1992, City Bank made eight rehabilitation loans totalling $69,000 through the Michigan State Housing Development Authority in conjunction with the Jackson Community Development programs. City Bank presently has 26 loans outstanding totalling $9.2 million outstanding under the Economic Development Bonds Program. In addition, City Bank originates loans under Small Business Administration programs, federal housing programs, and the Albion 24. City Bank receives 9 percent compared with 4.5 percent on average for other lenders. 25. These reports also cover information obtained from the two census tracts in Jackson County which have minority populations that exceed 50 percent and the four census tracts in the county in which the median income is less than 80 percent of the median income for the City of Jackson. 123 Commercial Revitalization Program. The bank also purchased a local financial development authority bond in the amount of $1.1 million to bring a new employer to Jackson County and thereby create over 150 jobs. City Bank is a founding member of the Jackson Affordable Housing Corporation ("JAHC"), a local non-profit organization designed to provide credit education and assistance to minority and low- and moderate-income families that seek to qualify for mortgage financing at a participating lending institution. In addition to being a participating lending institution, City Bank has provided technical and financial assistance to the organization. Moreover, City Bank has created a program entitled Credit Application Review Evaluation to provide credit counseling to low and moderate income groups. City Bank is also a sponsor of, and participant in, the Southside Self-Help Neighborhood Improvement Association's annual program, an event designed to provide credit and employment information to low- and moderate-income individuals in Jackson. City Bank also has taken steps to code its deposit and lending information by geographic area to allow the bank to assess more accurately the effectiveness of its CRA policies and programs, and expects to complete the project in early 1993. City Bank also provides basic checking services to the community it serves, including free checking to senior citizens, churches and church groups. In addition, the bank provides a reduced check cashing fee for non-customers who cash Michigan Department of Social Services checks at the bank. City Bank's delineated service area currently extends well beyond the Jackson MSA and includes all of Jackson County, 40 percent of Calhoun County and small portions of Eaton, Washtenaw, and Lenawee Counties. The Board notes that the bank's delineated community includes two minority and four low- to moderate-income census tracts in Jackson County, and one minority census tract in Calhoun County. City Bank made a small addition to its delineated community in 1992 after assessing lending patterns on the basis of the OCC's CRA regulations which permit a bank to rely on existing boundaries, including standard MSA or counties where its offices are located, and its effective lending area to delineate its service community. On the basis of the facts of record, the Board concludes that there is no evidence to suggest that City Bank's service area improperly excludes minority or low- and moderate-income census tracts. RPC's allegations that the transaction will not result in any defined improvement in services in the Charlevoix area are not supported by the record. CB Financial has informed the Board that FSB will offer no-charge checking and home equity-line loans, and 124 Federal Reserve Bulletin • February 1993 will adopt a program to encourage direct deposit of social security and/or pension benefits to address the deposit and credit needs of senior citizens. CB Financial will encourage FSB to evaluate and consider offering programs and services to address the deposit and credit needs of the small business community, such as: public seminars and presentations, seasonal lines of credit, short-term loans, revolving-credit arrangements, SB A loans, community-revitalization loans, merchant-credit-card programs, night deposit services, and expanded banking hours during the tourist season. CB Financial will also encourage FSB to consider programs to address the deposit and credit needs of low- to moderate-income families, such as: waiving service charges for the deposit of governmental checks, reducing service charges for cashing government checks, and making various home improvement loans (including FHA Title I home improvement loans, United Guaranty home improvement loans, neighborhood improvement loans, and rehabilitation loans on rental property). Moreover, CB Financial will encourage FSB to continue to offer competitive home mortgage loans and loans through the Michigan Mortgage Credit Certificate Program and the State of Michigan Housing Development Authority. The Board notes that upon consummation CB Financial intends to review the CRA plan of FSB and integrate that plan with the CRA plan of CCSB. CB Financial also plans to ensure that the CRA program of FSB identifies the needs of the Charlevoix community by contacting governmental and community leaders, representatives of small businesses, low- and moderate-income groups, senior citizen groups, and minority organizations to survey the credit and deposit needs of the community. CB Financial intends for FSB to identify and participate in governmental programs available to help meet the deposit and credit needs of the community, encourage and solicit public CRA input, and develop educational programs to inform segments of the community such as senior citizens and low-income families of the deposit and credit programs offered by the bank. CB Financial also intends that FSB implement regular education programs for bank employees to inform them of the goals and requirements of CRA compliance and to train them in addressing the credit and deposit needs of specialized groups such as small businesses, senior citizens, and low-income families. On the basis of these and other facts of record, including the satisfactory CRA performance records of the subsidiary banks of CB Financial and FSB, and the size of City Bank and the community that it serves, the Board concludes that considerations relating to the convenience and needs of the commu- nities to be served are consistent with approval of this application. Based on the foregoing and other facts of record, the Board has determined that the application should be, and hereby is, approved. 26 The Board's approval is expressly conditioned upon compliance with all of the commitments made by CB Financial in connection with this application. For the purpose of this action, these commitments and conditions will both be considered conditions imposed in writing and, as such, may be enforced in proceedings under applicable law. This 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 by the Federal Reserve Bank of Chicago, pursuant to delegated authority. By order of the Board of Governors, effective December 16, 1992. Voting for this action: Chairman Greenspan and Governors Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips. JENNIFER J . JOHNSON Associate Secretary of the Board Old National Bancorp Evansville, Indiana Order Approving Acquisition of a Bank Holding Company Old National Bancorp, Evansville, Indiana ("Old National"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has applied for the Board's approval under section 3 of the BHC Act (12 U.S.C. § 1842) to acquire all of the voting shares of City Financial Bancorp, Inc., Dan- 26. Several commenters have requested that the Board hold a public hearing to assess further facts surrounding the impact of this proposed acquisition on competition. The Board is not required under section 3 of the BHC Act to hold a public hearing unless the primary regulator for the bank to be acquired does not approve the proposal. In this case, the primary supervisor for the bank does not object to the proposal. Generally, under the Board's rules, the Board may, in its discretion, hold a public hearing or meeting on an application to clarify factual issues related to the application and to provide an opportunity for testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The Board has carefully considered these requests. In the Board's view, the parties have had ample opportunity to present submissions, and the Protestants have submitted substantial written comments that have been considered by the Board. In light of these facts, the Board has determined that a public meeting or hearing is not necessary to clarify the factual record in this application, or otherwise warranted in this case. Accordingly, the request for a public meeting or hearing on this application is hereby denied. Legal Developments ville, Illinois ("City Financial"), and thereby acquire City Financial's three subsidiary banks: The City National Bank of Danville, Danville, Illinois; The City National Bank of Hoopeston, Hoopeston, Illinois; and City Potomac Bank, Potomac, Illinois. Notice of the application, affording interested persons an opportunity to submit comments, has been published (57 Federal Register 42,586 (1992)). 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. Old National, with approximately $3.1 billion in consolidated assets, controls 17 banking subsidiaries in Indiana, Kentucky and Illinois. In Illinois, Old National is the 36th largest commercial banking organization, controlling deposits of $479.6 million, representing less than 1 percent of the total deposits in commercial banking organizations in the state. 1 City Financial is the 201st largest commercial banking organization, controlling deposits of $84.6 million, representing less than 1 percent of the total deposits in commercial banking organizations in Illinois. Upon consummation of the proposed transaction, Old National would become the 31st largest commercial banking organization in the state, controlling $564.2 million in deposits, representing less than 1 percent of total deposits in commercial banking organizations in the state. Section 3(d) of the BHC Act, the Douglas Amendment, prohibits the Board from approving an application by a bank holding company to acquire any bank located outside of the bank holding company's home state, unless such acquisition is "specifically authorized by the statute laws of the State in which such bank is located, by language to that effect and not merely by implication." 2 Old National, whose home state is Indiana for purposes of the Douglas Amendment, 3 seeks to acquire a bank in Illinois. The Illinois interstate banking statute expressly authorizes the acquisition by an out-of-state bank holding company of an Illinois bank, and the Board has previously determined that the interstate banking statute of Illinois permits the acquisition of Illinois banking organizations by Indiana banking organizations.4 Based on all the facts of record, the Board concludes that Old National's acquisition of City Financial complies with 1. State and market deposit data are as of June 30, 1991. 2. 12 U.S.C. § 1842(d). 3. 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. 4. See 111. Ann. Stat. ch. 17, para. 2510.01; Old National Bancorp, 74 Federal Reserve Bulletin 398 (1988). 125 the Illinois interstate banking statute, and that Board approval of this proposal is not prohibited by the Douglas Amendment. Approval of this proposal is conditioned upon Old National receiving all required state regulatory approvals. Old National and City Financial compete directly in the Danville, Illinois, banking market. 5 Old National is the largest commercial banking or thrift organization ("depository institution") in the market, controlling deposits of $168.1 million, representing 24.6 percent of total deposits held by depository institutions in the market. 6 City Financial is the fourth largest depository institution in the market, controlling deposits of $36.9 million, representing 5.4 percent of total deposits held by depository institutions in the market. Upon consummation of this proposal, Old National would control deposits of $205 million, representing 30 percent of deposits in the market. The Herfindahl-Hirschman Index ("HHI") for the market would increase by 265 points to 1866 upon consummation of the proposal. 7 A number of characteristics of the Danville banking market indicate that the increase in concentration levels as measured by the HHI for this market overstates the likely effect of this proposal on competition in this market. Upon consummation of this proposal, 8 commercial banks and 4 thrifts would remain as competitors of Old National in the market. The market is also attractive for entry, ranking second in population and fourth in total bank deposits among the 76 nonmetropolitan counties in Illinois. In addition, credit unions actively compete in the market. 8 After considering the competition offered by other depository institutions in the market, the number of competitors remaining in the market, the level of and the increase in market concentration, and other facts of 5. The Danville, Illinois, banking market is approximated by Vermillion County, Illinois, less Butler, Green and Sidell townships. 6. Market share data are based on calculations in which the deposits of thrift institutions are included at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). 7. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is above 1800 is considered to be highly concentrated. The Justice Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the postmerger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Justice Department has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limitedpurpose lenders and other non-depository financial entities. 8. Credit unions in the Danville market control approximately 12 percent of the deposits in commercial banks, thrifts, and credit unions in the market, which is well above the national average of approximately 5 percent. Two credit unions appear to be open to all, or nearly all, residents of Vermillion County, and another is open to all residents of the city of Danville. 126 Federal Reserve Bulletin • February 1993 record, the Board concludes that consummation of this proposal would not have a significantly adverse effect on competition or the concentration of banking resources in the Danville banking market or in any other relevant banking market. The financial and managerial resources and future prospects of Old National, City Financial, and their respective subsidiaries are consistent with approval of this proposal. Considerations relating to the convenience and needs of the communities to be served and the other factors the Board must consider under section 3 of the BHC Act are also consistent with approval of this proposal. Based on the foregoing and all the facts of record, including the commitments made by Old National in connection with this application, the Board has determined that the application should be, and hereby is, approved. The Board's approval of this proposal is specifically conditioned on compliance with the commitments made by Old National in connection with this application and with the conditions referenced in this Order. These commitments and conditions are both conditions imposed in writing by the Board, and, as such, may be enforced in proceedings under applicable law. The acquisition shall not be consummated before the thirtieth calendar day after the effective date of this Order, or later than three months after the effective date of this Order, unless such period is extended for good cause by the Board or by the Federal Reserve Bank of St. Louis, acting pursuant to delegated authority. By order of the Board of Governors, effective December 14, 1992. Voting for this action: Chairman Greenspan and Governors Mullins, Angell, Kelley, LaWare, and Phillips. Absent and not voting: Governor Lindsey. JENNIFER J . JOHNSON Associate Secretary of the Board United Missouri Bancshares, Inc. Kansas City, Missouri acquire their respective subsidiary banks ("Kansas Banks"): (1) M-L Bancshares, Inc., Wichita, Kansas, and thereby acquire Security State Bank of Great Bend, Great Bend, Kansas, and Russell State Bank, Russell, Kansas; (2) Highland Bancshares, Inc., Topeka, Kansas, and thereby acquire Highland Park Bank and Trust, Topeka, Kansas; (3) North Plaza Bancshares, Inc., Topeka, Kansas, and thereby acquire North Plaza Bank State Bank, Topeka, Kansas; (4) Bellcorp, Inc., Manhattan, Kansas, and thereby acquire Citizens Bank and Trust Co., Manhattan, Kansas; and (5) NBA Bankshares, Inc., Salina, Kansas, and thereby acquire The National Bank of America at Salina, Salina, Kansas. Upon consummation of the proposal, United Missouri proposes to merge the Kansas BHCs into its newly formed and wholly owned subsidiary, United Subsidiary, Inc., Kansas City, Missouri, which has applied under section 3(a)(1) of the BHC Act to become a bank holding company. Notice of the applications, affording interested persons an opportunity to submit comments, has been published (57 Federal Register 32,219 (1992)). The time for filing comments has expired, and the Board has considered the applications and all comments received in light of the factors set forth in section 3(c) of the BHC Act. United Missouri, with $5.3 billion in consolidated assets, controls 20 banks in Illinois, Missouri, Delaware, and Colorado. 1 Upon consummation of the proposal, United Missouri would become the fifth largest banking organization in Kansas, controlling deposits of $453 million, representing approximately 1.75 percent of the deposits in all depository institutions in the state. 2 Douglas Amendment Order Approving Acquisition of Banks and Formation of a Bank Holding Company Section 3(d) of the BHC Act, the Douglas Amendment, prohibits the Board from approving an application by a bank holding company to acquire any bank located outside the bank holding company's home United Missouri Bancshares, Inc., Kansas City, Missouri ("United Missouri"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has applied under section 3(a)(3) of the BHC Act (12 U.S.C. § 1842(a)(3)) to acquire all of the voting shares of the following unaffiliated bank holding companies ("Kansas BHCs"), and thereby indirectly 1. Asset data are as of June 30, 1992. 2. Deposit and market data as of December 31, 1991. Market share data are based on calculations in which the deposits of thrift institutions are included at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Legal Developments state, unless such acquisition is "specifically authorized by the statute laws of the State in which such bank is located, by language to that effect and not merely by implication." 3 For purposes of the Douglas Amendment, the home state of United Missouri is Missouri.4 The Kansas interstate banking statute expressly authorizes the acquisition by an out-of-state bank holding company, such as United Missouri, of Kansas banks, subject to certain conditions. 5 After careful review of the relevant statutes, and in light of the facts of record, the Board concludes that United Missouri's acquisition of Kansas banks complies with the Kansas interstate banking statute, and that Board approval of this proposal is not prohibited by the Douglas Amendment. Approval of this proposal is conditioned upon United Missouri's receiving all required state regulatory approvals. Competitive, Financial, Managerial and Supervisory Considerations United Missouri does not operate a banking subsidiary in Kansas. Based on all of the facts of record in this case, the Board concludes that consummation of this proposal would not have a significantly adverse effect on competition or the concentration of banking resources in any relevant banking market. The Board notes that United Missouri will raise additional capital to finance this acquisition, and that, upon consummation of the proposal, United Missouri's capital ratios will be well above the regulatory minimums. Based on these and other facts of record, the Board concludes that the financial and managerial resources and future prospects of United Missouri, its subsidiary banks, and the banks to be acquired under the proposal, and the other factors that the Board must consider under section 3 of the BHC Act, are consistent with approval of this proposal. 3. 12 U.S.C. § 1842(d). 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. Under Kansas's interstate banking statute, a bank holding company located in any state contiguous to Kansas, which would include Missouri, may acquire a Kansas bank or bank holding company if the laws of the state in which the acquiring bank holding company is located allow Kansas bank holding companies to acquire banks located in that state on terms that are substantially no more restrictive than those established under Kansas's statute. Kan. Stat. Ann. §§ 9-532, 9-535 (1991). Missouri has a comparable interstate banking statute. Mo. Ann. Stat. § 362.925 (Vernon Supp. 1992). Missouri and Kansas are signatories to a Cooperative Agreement dated May 4, 1992, stating that "the reciprocal provisions of the laws of Kansas and Missouri appear to be compatible and to permit interstate acquisitions of banks and bank holding companies between the two states." Under Kansas law, interstate bank acquisitions are limited to 12 percent of total state deposits in financial institutions. Kan. Stat. Ann. § 9-520 (1991). Under this proposal, United Missouri would acquire less than 2 percent of total deposits in Kansas. Convenience and Needs 127 Considerations In considering this application, the Board is required to take into account under the CRA the records of United Missouri, its subsidiary banks, the Kansas BHCs, and the Kansas Banks under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA"). In this regard, the Board has received comments from the Association of Community Organizations for Reform Now ("Protestant") criticizing the CRA performance of United Missouri and its lead bank, United Missouri Bank, N.A., Kansas City, Missouri ("Bank"). Protestant asserts that a review of the May 13, 1991, and September 8, 1992, CRA performance examinations conducted by Bank's primary regulator, the Office of the Comptroller of the Currency ("OCC"), indicates that Bank's CRA performance has been deficient. Protestant has challenged the satisfactory CRA rating assigned to Bank by the OCC, because it believes that Bank's CRA program, when compared to those of several competing financial institutions, should be stronger in light of Bank's size, financial condition and market share. Protestant asserts that Bank's efforts to ascertain community credit needs have been ineffective, that Bank does not have formal policies in place that would enable Bank management to properly evaluate Bank's progress under the CRA, and that Bank's limited outreach efforts have not resulted in the development of new products and services to address identified community credit needs. Protestant claims that an analysis of the types of credit Bank has offered and extended shows that Bank is not sufficiently meeting identified credit needs, such as financing for singleand multi-family housing and agricultural uses. Although Protestant acknowledges that Bank has been active in home-improvement lending in low-income communities, Protestant asserts that Bank's lending patterns in a number of credit products are not commensurate with Bank's market share in the low- and moderate-income and minority areas of East Kansas City, Missouri. Protestant also has criticized Bank's pattern of opening and closing branch offices. 6 Protestant believes that Bank does not have an adequate review process to ensure that its banking practices, including Bank's loan underwriting criteria, do not constitute discriminatory or other illegal credit practices. Protestant also asserts that Bank's partici- 6. Protestant states that all the branches Bank has opened in its service area over the last ten years have been in suburban or high-income areas, and that, during this period, a need for branch offices in low- and moderate-income and minority areas of East Kansas City has been exacerbated by the closing of other financial institutions that provided credit to consumers in this area. 128 Federal Reserve Bulletin • February 1993 pation in community-development activities has not helped it to address identified credit needs, including the need for financing for single- and multi-family housing and financing for commercial ventures in the low-income and minority areas in Bank's service area. Based on these and other allegations, Protestant believes that the OCC should have assigned Bank a rating of "substantial noncompliance" in meeting community credit needs at its 1991 and 1992 CRA examinations. Record of Performance Under the CRA A. CRA Performance Examination The Community Reinvestment Act provides that "[i]n connection with its examination of a financial institution, the appropriate Federal financial supervisory agency shall . . . assess the institution's record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of such institution" and "take such record into account in its evaluation of an application for a deposit facility by such institution." 7 The CRA and the Statement of the Federal Financial Supervisory Agencies Regarding the Community Reinvestment Act ("Agency CRA Statement") 8 indicate that a CRA examination is an important and often controlling factor in the consideration of an institution's CRA record and that these reports will be given great weight in the applications process. 9 The Board believes that the CRA examination record of Bank is of particular importance in assessing Bank's record of CRA performance in this case, because the OCC conducted a full-scope examination of Bank's record of performance under the CRA during the pendency of this application. This examination was prompted in part by the allegations made by Protestant, and was conducted with the information and allegations provided by Protestant. In addition, the OCC considered the comments that Protestant made in connection with the 1991 CRA performance examination of Bank, which also resulted in Bank achieving a satisfactory CRA performance rating. Bank's primary regulator, therefore, had the opportunity to, and did, within the last 30 days, consider Protestant's allegations in the context of a public, on-site examination of Bank's CRA performance. The OCC examination noted areas that require improvement in Bank's CRA performance, but concluded that Bank's overall CRA performance was satisfactory. In 7. 12 U.S.C. § 2903. 8. 54 Federal Register 13,742 (1989). 9. Id. at 13,745. connection with this examination, the OCC received certain commitments by Bank to take specific steps to address the areas noted in the examination that required improvement. While Protestant disagrees with the conclusions and judgments reached by the OCC, Protestant has not provided information that was unavailable to or not considered by the OCC in this recent examination. Thus, while Protestant and the OCC note weaknesses in Bank's CRA performance record, the Board believes that it must, in this case, give significant weight to the judgment of the Bank's primary supervisor that, in light of a full examination and the commitments made by Bank to correct its CRA deficiencies, the overall CRA performance of Bank is satisfactory. 10 B. Lending and Lending-Related Activities In Bank's most recent CRA examination, the OCC concluded that Bank's record of addressing community credit needs is satisfactory, that Bank's lending levels reflect some responsiveness to those needs, and that a substantial portion of Bank's loans are made to borrowers within Bank's community delineation. In this regard, the OCC noted that Bank's management seeks to address identified community credit needs by offering and originating a variety of loans, including, in particular, small business loans, home-improvement loans, and consumer loans. One of the pressing community credit needs at this time is small business loans, and the record indicates that Bank is making small business credit available throughout its communities. For example, Bank has originated over $6 million in Small Business Administration-guaranteed loans to approximately 50 local 10. The remaining United Missouri banks, with two exceptions, received either "satisfactory" or "outstanding" ratings from their primary supervisors in the most recent examinations of their CRA performance. United Missouri Bank of Monett, Monett, Missouri ("UMB-Monett"), received a "needs to improve" rating from the Federal Deposit Insurance Corporation ("FDIC") as of June 1990. The Board previously has determined that United Missouri is making satisfactory progress in improving the CRA performance of UMBMonett. In addition, United Missouri Bank, USA ("UMB-USA"), a credit card bank in New Castle, Delaware, received a "needs to improve" rating from the FDIC as of February 1991. UMB-USA has undertaken steps to improve this rating, including increased staff to address CRA performance and more outreach efforts by the bank's CRA officer. These two banks account for approximately 5 percent of the assets of United Missouri. All but one of the Kansas Banks to be acquired by United Missouri received "satisfactory" CRA ratings at their most recent examinations. Security State Bank, Great Bend, Kansas ("Security State"), representing less than 5 percent of United Missouri's pro forma assets, received a "needs to improve" rating from the FDIC as of February 14, 1991. Upon consummation of the proposed transaction, United Missouri has agreed to take certain specific steps to improve the deficient areas of Security State's CRA program, and to implement the types of CRA programs that have been or will be implemented at United Missouri's other subsidiary banks. Legal Developments businesses since May 1991, with approximately onethird of the dollar volume of those loans going to businesses in low- to moderate-income areas of the community. At present, Bank has a small business loan portfolio of approximately $200 million. With regard to home-improvement loans, the OCC noted that Bank is actively involved in a Missouri Housing Development Commission program to provide state-subsidized home-improvement loans. Bank also participates in the Federal Housing Authority's Title I program to provide federally guaranteed homeimprovement loans. Bank also originates subsidized home-improvement loans in connection with the Kansas City Power and Light Company's home weatherization program. The OCC determined that approximately 12 percent of loans originated by Bank during 1992 have been for consumer purposes, including home-improvement loans. The OCC found that Bank's lending levels for homepurchase loans have been satisfactory over the past two years. With respect to residential mortgage loans, the OCC noted that Bank's mortgage company affiliate participates in a program sponsored by the Rehabilitation Loan Corporation ("RLC") to provide affordable home loans to low- and moderate-income firsttime home buyers. Bank personnel also provide lending expertise to the RLC by prequalifying applicants for these loans. The mortgage company affiliate also offers an affordable home loan program in partnership with the City of Kansas City, Missouri. During the first three quarters of 1992, Bank's mortgage company affiliate has originated home-purchase loans totalling approximately $4 million, with approximately 30 percent of these loans made to borrowers residing in low- and moderate-income areas. C. Ascertainment and Marketing Although the OCC found some areas for improvement in this aspect of Bank's CRA performance, the OCC examination report noted that many of Bank's officers and employees are either active in or have regular contact with a large number of civic, neighborhood, religious, minority, fraternal, business, and real estate groups throughout the metropolitan Kansas City area. These groups represent different interests within the bank's delineated community. Bank's mortgage company affiliate also participates in the bank's ascertainment efforts. Senior officers of the mortgage company regularly consult and work with local realtors and local community development corporations regarding housing and lending issues. Bank also has a business development group that calls on existing and prospective commercial businesses, focusing on small- to medium-sized businesses. In addition, the bank has 129 ongoing contacts with, and receives referrals from, small business development centers located in its community. Bank markets its products and services through a variety of advertising activities, including direct mail, statement stuffers, brochures, lobby signs, billboards, neighborhood and regional newspapers, radio, and television. Bank advertises in all of its delineated communities, and advertises in both English and Spanish. Loan personnel also meet with neighborhood associations and realtor groups to provide information to individuals regarding Bank's home-improvement and home loan programs. In Bank's most recent CRA examination report, the OCC concluded that Bank has implemented an effective marketing program that communicates credit programs to the entire community. D. Corporate Policies Bank has in place some of the policies that contribute to an effective CRA program, as outlined in the Agency CRA Statement. For example, Bank's board of directors has adopted a detailed CRA statement, and Bank's board of directors has formed a committee of bank and holding company officers who are responsible for consumer compliance matters, including CRA compliance. Bank's CRA coordinator is responsible for documenting the bank's CRA activities, providing regular reports to management on such activities, and disseminating information within the bank regarding Bank's CRA responsibilities. The Board also notes that, in connection with Bank's most recent CRA examination by the OCC, United Missouri has committed to take a number of significant steps to strengthen all aspects of Bank's CRA programs, including the implementation of a more comprehensive CRA program. These commitments include the establishment of a board-level CRA committee, increased documentation for its CRA program, enhanced procedures for monitoring its marketing programs, procedures for CRA self-assessments, and improved procedures for ensuring compliance with applicable CRA regulations. Compliance with these commitments will be monitored through the OCC's examination process, and by the Board in its consideration of future applications, and Bank's progress in complying with all commitments regarding CRA performance will be carefully considered in connection with future applications by United Missouri to expand its deposit-taking facilities. E. Branch Locations Bank has 25 branches located throughout Jackson, Platte and Clay Counties in Missouri. The OCC found 130 Federal Reserve Bulletin • February 1993 that Bank's branches have convenient business hours and are reasonably accessible to all segments of its delineated community. In addition, the closure of any of Bank's branches is subject to a formal written policy requiring certain steps be taken to assess and minimize the potential adverse impact of closing a branch. Bank's management has also committed to conduct an annual review of the location and business hours of its branches. This review will include an evaluation of the appropriateness of services offered, and the accessibility of branch locations, to all segments of Bank's delineated community. F. Conclusion Regarding Convenience and Needs Factors The Board has carefully considered all of the facts of record, including the comments filed in this case, in reviewing Bank's CRA record under the BHC Act. Based on a review of the entire record of performance, including, in particular, the CRA performance examination of Bank recently concluded by the OCC, as well as the commitments provided by United Missouri and Bank, the CRA performance examinations of the other relevant banks, and the information provided by Protestant and United Missouri, the Board believes that the efforts of United Missouri, the Kansas BHCs, and their subsidiary banks to help meet the credit needs of all segments of the communities served by these banks, including low- and moderate-income areas, are, on balance, consistent with approval of these applications.11 Based on the foregoing, including the conditions and commitments described in this Order and those made in these applications, and all of the facts of record, the Board has determined that the applications should be, and hereby are, approved. The Board's approval is specifically conditioned upon compliance with all the commitments made by United Missouri in connection with these applications. All of the commitments and conditions relied upon by the Board in reaching its decision are both commitments imposed in writing by 11. Protestants have requested that the Board hold a public meeting or hearing on these applications. The Board is not required under the BHC Act to hold a public hearing or meeting in this case. Under the Board's rules, the Board may, in its discretion, hold a public hearing or meeting on an application to clarify factual issues related to the application, and to provide an opportunity for testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The Board has carefully considered this request. In the Board's view, interested parties have had a sufficient opportunity to present written submissions, and have submitted substantial written comments that have been considered by the Board. In light of this, the Board has determined that a public meeting or hearing is not necessary to clarify the factual record in these applications, or otherwise warranted in this case. Accordingly, the request for a public meeting or hearing on these applications is hereby denied. the Board in connection with its findings and decision, and may be enforced in proceedings under applicable laws. This approval is also conditioned upon United Missouri's receiving all necessary Federal and state approvals. 12 The transaction approved in this Order shall not be consummated before the thirtieth calendar day following the effective date of this Order, or later than three months after the effective date of this Order, unless such period is extended for good cause by the Federal Reserve Bank of Kansas City, pursuant to delegated authority. By order of the Board of Governors, effective December 22, 1992. Voting for this action: Chairman Greenspan and Governors Mullins, Kelley, La Ware, and Phillips. Voting against this action: Governor Lindsey. N o t participating in the consideration of this action: Governor Angell. JENNIFER J . JOHNSON Associate Secretary of the Board Dissenting Statement of Governor Lindsey The OCC's most recent CRA examination of United Missouri's lead bank noted a number of significant weaknesses in Bank's record of compliance. The OCC determined that the CRA performance record of Bank was nonetheless satisfactory, and received certain commitments made by United Missouri to address each of the noted deficiencies. I believe that the deficiencies noted in the public CRA examination in this case are significant, and that it is inappropriate for the Board to rely so heavily, in the applications process, on commitments regarding prospective behavior. I believe commitments to improve Bank's CRA performance are particularly inappropriate in this case because Bank has significant resources, represents a substantial part of United Missouri's assets, and has a well-established retail banking network in place. The Agency CRA Statement requires that the CRA policies of an applicant and its subsidiary banks should be in place and working well when an application is considered. In this case, I believe that the record indicates that Bank's CRA policies are not adequate. For these reasons, I would deny the application pending before the Board. December 22, 1992 12. In this regard, the Board notes that, on August 17, 1992, the State of Kansas Banking Board approved the applications filed by United Missouri under Kansas law to acquire the Kansas BHCs and thereby indirectly acquire the Kansas Banks. This state approval was conditioned upon United Missouri's obtaining all necessary Federal approvals. Legal Developments Orders Issued Under Section 4 of the Bank Holding Company Act The Dai-Ichi Kangyo Bank, Ltd. Tokyo,Japan Chemical Banking Corporation New York, New York Order Approving Application to Engage in Collection Agency Activities, and in Asset Management, Servicing, and Collection Activities The Dai-Ichi Kangyo Bank, Ltd., Tokyo, Japan ("DaiIchi"), and Chemical Banking Corporation, New York, New York ("Chemical") (collectively referred to as "Applicants"), both bank holding companies within the meaning of the Bank Holding Company Act ("BHC Act"), have applied under section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and section 225.23(a)(3) of the Board's Regulation Y (12 C.F.R. 225.23(a)(3)), to engage de novo in collection agency activities pursuant to section 225.25(b)(23) of the Board's Regulation Y through The CIT Group Holdings, Inc., New York, New York ("Holdings"), and in asset management, servicing, and collection activities through The CIT Group/Asset Management, Inc., Livingston, New Jersey ("CIT"). 1 Notice of the applications, affording interested persons an opportunity to submit comments, has been published (57 Federal Register 7589 and 43,229 (1992)). 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 4(c)(8) of the BHC Act. Dai-Ichi, with total consolidated assets equivalent to approximately $476.1 billion, is the largest banking organization in the world. 2 Dai-Ichi owns a bank subsidiary in Los Angeles, California; operates branches in Chicago, Illinois, and New York, New York; and operates agencies in Los Angeles, California; San Francisco, California; and Atlanta, Georgia. Dai-Ichi also engages in various nonbanking activities in the United States through a number of subsidiaries, including CIT. Chemical, with total consolidated assets of $138.8 billion, is the third largest banking organization in the United States. Chemical operates 25 subsidiary 1. Holdings is a joint venture in which Dai-Ichi and Chemical own 60 percent and 40 percent, respectively. CIT is a wholly owned subsidiary of Holdings. 2. Asset data are as of March 31, 1992. Ranking is as of December 31, 1991. 131 banks and engages directly and through subsidiaries, including CIT, in a variety of nonbanking activities.3 The Board has previously determined by regulation that the collection agency activities that Applicants propose to conduct are closely related to banking for purposes of section 4(c)(8) of the BHC Act. 4 Applicants propose to conduct these activities through Holdings in accordance with the Board's regulations. Accordingly, the Board concludes that the proposed collection agency activities are permissible for purposes of section 4(c)(8) of the BHC Act and section 225.25(b)(23) of the Board's Regulation Y. CIT will provide asset management services to the Resolution Trust Corporation ("RTC") and the Federal Deposit Insurance Corporation ("FDIC"). 5 In addition, CIT proposes to provide these services to unaffiliated third party investors that purchase pools of assets assembled by the RTC or the FDIC from troubled financial institutions, and generally to unaffiliated financial and non-financial institutions with troubled assets. Under the proposal, neither Applicants nor CIT would acquire an ownership interest in the assets that they manage or in the institutions for which they provide asset management services. In addition, CIT would not engage in providing real property management or real estate brokerage services as part of its proposed activities. 6 The Board has previously determined that, within certain parameters, providing asset management services for assets originated by financial institutions 7 and their bank holding company affiliates is an activity that is closely related to banking for purposes of the BHC Act. 8 Applicants have proposed to conduct all asset 3. Data for Chemical are as of September 30, 1992. 4. See 12 C.F.R. 225.25(b)(23). 5. Asset management encompasses the liquidation (or other disposition) of loans and their underlying collateral, including real estate and other assets acquired through foreclosure or in satisfaction of debts previously contracted ("DPC property"). Specific individual activities include: classifying and valuing loan portfolios; filing reviews of loan documentation; developing collection strategies; negotiating renewals, extensions, and restructuring agreements; initiating foreclosure, bankruptcy, and other legal proceedings, where appropriate; and developing and implementing market strategies for the sale or refinancing of individual loans and for the packaging and sale of whole or securitized loan portfolios. In addition, Applicants would conduct and review (either directly or through independent contractors) appraisals and environmental inspections; provide asset valuations; perform cash-flow and asset-review analyses; contract with and supervise independent property managers; and lease (either directly or through independent contractors) real estate and other DPC property. Applicants also would dispose of DPC property by developing and implementing marketing strategies for the sale of DPC property, either individually or packaged for investors or developers. 6. Applicants will contract with independent third parties to obtain these services for assets under the management of CIT. 7. Financial institutions include banks, savings associations, and credit unions. 8. See First Interstate Bancorp, 11 Federal Reserve Bulletin 334 (1991); Banc One Corporation, 11 Federal Reserve Bulletin 331 (1991); 132 Federal Reserve Bulletin • February 1993 management activities under the same terms, and subject to the same conditions as in previous Board Orders regarding this activity. 9 For example, Applicants have committed that they will not own the stock of, or be represented on the board of directors of, any unaffiliated institution for which CIT provides asset management services. In addition, Applicants have committed that CIT will not establish policies or procedures of general applicability for the institutions whose assets it manages, and that the services of CIT for unaffiliated institutions would be limited to asset management, servicing, and collection activities.10 Applicants propose to engage in asset management activities for assets originated by non-financial institutions as well as financial institutions.11 These assets, however, would be limited to the types of assets that a financial institution would have the authority to originate. 12 Accordingly, the Board believes that Applicants would have the expertise to engage in the management of these types of assets, regardless of the originating entity, and that the proposal is within the scope of the asset management approval in the Board's prior Orders. For these reasons, the Board concludes that Applicants' proposed activities are closely related to banking. The Board is also required to determine whether the performance of the proposed activity by Applicants is a proper incident to banking—that is, whether the proposed activity "can reasonably be expected to produce benefits, such as greater convenience, increased competition, or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices." 12 U.S.C. § 1843(c)(8). NCNB Corporation, 11 Federal Reserve Bulletin 124 (1991); First Florida Banks, Inc., 14 Federal Reserve Bulletin 111 (1988). 9. Id. 10. Applicants also would provide these services for a limited period of time. The Board notes that, while Applicants would manage assets on an ongoing basis, the owner of the assets would retain the right to make all final decisions regarding asset dispositions and to terminate Applicants as asset manager. 11. These assets include real estate; commercial, consumer and other loans; equipment leases; and extensions of credit. Non-financial institutions include pension funds, leasing companies, finance companies, and investment companies formed to engage in asset management activities. 12. These assets would include: equipment leases that conform to section 225.25(b)(5) of the Board's Regulation Y (12 C.F.R. 225.25(b)(5)); loans secured by equipment and equipment acquired through foreclosure or in satisfaction of such leases and loans; consumer loans financing manufactured housing, vessels, vehicles, and residences; asset-based commercial loans; factored accounts receivables; and collateral for the aforementioned types of loans acquired through foreclosure or in satisfaction of such loans. Prior approval of the Board would be required before providing asset management services in connection with pools of assets of the type impermissible for a financial institution to originate. Consummation of the proposal can reasonably be expected to result in public benefits. Applicants' proposal would facilitate the disposal of assets of financial institutions in receivership as well as financial and non-financial institutions with troubled financial assets. Moreover, the efficient disposition of such assets can reasonably be expected to produce benefits to the public. CIT will own no equity in the institutions for which it provides asset management services or in the assets it manages. Applicants' de novo entry into the market would increase competition for these services. Applicants have indicated that they may, in certain instances, seek approval to acquire institutions whose assets are being managed by CIT. In previous cases, the Board expressed concern that a bank holding company might obtain confidential information in the course of providing its asset management services that would provide the bank holding company with a competitive advantage over other institutions in the bidding process for the failed institution under management.13 The Board also noted that such information could give the managing bank holding company a competitive advantage over the ultimate acquiror of the failed institution in markets where they both compete. To address these concerns, Applicants have committed that they will establish and implement procedures to preserve the confidentiality of information obtained in the course of providing asset management services. 14 These procedures will prevent the use of information obtained by CIT through its asset management activities in the course of preparing any bid that Applicants may prepare to acquire an institution managed by CIT, and will prevent Applicants from competing unfairly against the winning bidder in the relevant market. There is no evidence in the record to indicate that consummation of these proposals is likely to result in any significantly adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices. The financial and managerial resources of Applicants and their subsidiaries are also consistent with approval. Accordingly, on the basis of all of the facts of record and commitments made by Applicants, the Board concludes that the public benefits that would result from approval of these applications outweigh the potential adverse effects, and that the public interest factors it must consider under section 4(c)(8) of the BHC Act are consistent with approval. 13. See, e.g., NCNB Corporation, 11 Federal Reserve Bulletin 124 (1991). 14. Applicants' procedures will be subject to review by the Federal Reserve System. Legal Developments Based upon the foregoing and all of the other facts of record, including commitments made by Applicants and conditions in this Order, the Board has determined that these applications should be, and hereby are, approved. The Board's approval is expressly conditioned upon compliance with all of the commitments made by Applicants in connection with these applications and the conditions referred to in this Order and the above-referenced Orders. For the purpose of this action, all of these commitments and conditions will be considered conditions imposed in writing and, as such, may be enforced in proceedings under applicable law. The Board's determination is also 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 a bank holding company or any of its subsidiaries as the Board finds necessary to assure compliance with, and to prevent evasion of, the provisions of the BHC Act and the Board's Regulations and Orders issued thereunder. These transactions shall not be consummated later than three months after the effective date of this Order, unless such period is extended for good cause by the Board or by the Federal Reserve Bank of San Francisco, acting pursuant to delegated authority. By order of the Board of Governors, effective December 21, 1992. Voting for this action: Chairman Greenspan and Governors Mullins, Angell, Kelley, La Ware, Lindsey, and Phillips. JENNIFER J . JOHNSON Associate Secretary of the Board Deutsche Bank AG Frankfurt, Federal Republic of Germany Order Approving Application to Retain the U.S Subsidiaries of Morgan Grenfell pic, London, England, and Thereby to Engage in Securities-Related Activities and Other Nonbanking Activities Deutsche Bank AG, Frankfurt, Federal Republic of Germany ("Applicant"), a foreign bank subject to the Bank Holding Company Act (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)), to retain all of the shares of Morgan Grenfell U.S. Holdings Incorporated ("Holdings"). Holdings owns all of the shares of the U.S. subsidiaries of Morgan Grenfell Group pic, a merchant bank located in London, England. In proposing to retain all of Holdings' shares, Applicant 133 would retain the shares of C.J. Lawrence, Inc. ("Company"), New York, New York, which engages in: (i) Underwriting and dealing in all types of debt and equity securities;1 (ii) Offering investment advice and securities brokerage services, separately and on a combined basis; (iii) Underwriting and dealing in securities which may be underwritten and dealt in by state member banks; (iv) Offering financial advisory services; (v) Engaging in the private placement of all types of securities as agent; and (vi) Buying and selling all types of securities on the order of investors as a "riskless principal." Applicant also proposes to retain indirectly Morgan Grenfell Finance, Incorporated ("Finance"), New York, New York, which acts as: (i) An originator and principal in interest rate swap transactions on a limited basis related to its own portfolio; (ii) An originator and principal with respect to certain interest rate risk-management products such as caps, floors and collars, as well as options on swaps ("swap derivative products"); (iii) A broker or agent with respect to the foregoing transactions and instruments and currency swaps and currency swap derivative products; and (iv) An advisor to institutional customers regarding financial strategies involving interest rate and currency swaps and swap derivative products. Applicant also proposes that Finance purchase and sell gold bullion for Finance's own account. 2 Applicant also has applied to retain indirectly Morgan Grenfell Capital Management Incorporated, New York, New York, which engages in offering portfolio investment advice. 3 1. Applicant has not proposed to underwrite or deal in securities issued by open-end investment companies and accordingly, may not do so without further application under section 4(c)(8) of the BHC Act. 2. Applicant proposes that Finance purchase and sell options, futures, and options on futures with respect to gold bullion in order to hedge its position in gold bullion in accordance with the Board's Policy Statement, Statement of policy concerning bank holding companies engaging in futures, forward and options contracts on U.S. Government and agency securities and money market instruments, 12 C.F.R. 225.142. 3. Company, Finance and Management are owned by Holdings. Holdings also controls Cyrus J. Lawrence Capital Holdings, Inc., New York, New York, which purchases investments in companies in accordance with the BHC Act. All of these entities are referred to collectively as "Companies." 134 Federal Reserve Bulletin • February 1993 Notice of the application, affording interested persons an opportunity to submit comments on the proposal, has been duly published (55 Federal Register 29,416 (1990)).4 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. Underwriting and Dealing in Bank-Ineligible Securities The Board has determined that, subject to the prudential framework of limitations established in previous decisions to address the potential for conflicts of interests, unsound banking practices, or other adverse effects, the proposed underwriting and dealing activities are so closely related to banking as to be proper incidents thereto within the meaning of section 4(c)(8) of the BHC Act. 5 The Board has also determined that 4. The Board received comments from the Investment Company Institute ("ICI"), a trade association representing the investment company industry. The ICI has protested the application to the extent that it could be read to permit: (1) Sponsoring, organizing, and managing three open-end funds; (2) Sponsoring, organizing, and managing closed-end funds, unless the fund is not "primarily or frequently engaged in the issuance, sale, and distribution of securities;" (3) Private placement of securities issued by investment companies that are advised or sponsored by Applicant or any of its bank or nonbank subsidiaries; (4) Providing discount or full service brokerage services with respect to securities issued by investment companies that are advised or sponsored by Applicant or any of its bank or nonbank subsidiaries; (5) Acting as riskless principal with respect to securities issued by investment companies that are advised or sponsored by Applicant or any of its bank or nonbank subsidiaries; (6)(i) Privately placing, (ii) offering discount or full-service brokerage, or (iii) acting as riskless principal with respect to securities issued by investment companies that are advised or sponsored by Applicant's bank affiliates or subsidiaries of its bank affiliates; and (7) The acquisition of securities representing interests in unit investment trusts sponsored by the Applicant or any of its bank or nonbank affiliates. As discussed throughout the Order, Applicant would conduct its activities involving investment companies in compliance with prior Board orders. Accordingly, the ICI's comments do not warrant denial of the proposal. 5. J.P. Morgan & Company Incorporated, The Chase Manhattan Corporation, Bankers Trust New York Corporation, Citicorp, and Security Pacific Corporation, 75 Federal Reserve Bulletin 192 (1989) ("J.P. Morgan & Company Incorporated, et al.")', Chemical New York Corporation, et ai, 73 Federal Reserve Bulletin 731 (1987); Citicorp, et ai, 73 Federal Reserve Bulletin 473 (1987), ajfd sub nom. Securities Industry Association v. Board of Governors of the Federal Reserve System, 839 F.2d 47 (2d Cir. 1988), cert, denied, 486 U.S. 1059 (1988); as modified by Order, dated September 21, 1989, 75 Federal Reserve Bulletin 751 (1989) ("Modification Order"), ajfd sub nom. Securities Industry Association v. Board of Governors of the Federal Reserve System, 900 F.2d 360 (D.C. Cir. 1990) (collectively, "section 20 orders"). In Canadian Imperial Bank of Commerce, The Royal Bank of Canada, Barclays PLC, and Barclays Bank PLC, 76 Federal Reserve Bulletin 158 (1990) ("Canadian Imperial, et al."), the Board consid- the conduct of these securities underwriting and dealing activities is consistent with section 20 of the Glass-Steagall Act, provided that the underwriting and dealing subsidiary derives no more than 10 percent of its total gross revenue from underwriting and dealing in bank-ineligible securities over any two-year period. 6 Applicant has committed that Company will conduct its underwriting and dealing activities with respect to bank-ineligible securities subject to the 10 percent revenue test established by the Board in its previous orders, and to the prudential limitations established by the Board in its Canadian Imperial, et al. order. 7 Applicant's proposal is broad enough to include underwriting and dealing in shares of closed-end investment companies and unit investment trusts (but not open-end investment companies, i.e., mutual funds). 8 Underwriting or dealing activities involving investment company securities under this Order must be conducted in accordance with the limitations contained in the existing provisions of Regulation Y authorizing bank holding companies to provide advisory activities to investment companies. In particular, Regulation Y provides that a bank holding company and its subsidiaries may not purchase for their own account, or engage directly or indirectly in the sale or distribution of, the securities of any investment company that the holding company advises or sponsors. 12 C.F.R. 225.125(g)(1), (h). This regulation applies to ered and approved applications by foreign banks to engage in underwriting and dealing in all types of debt and equity securities. In that order, the Board modified the prudential framework imposed in J.P. Morgan & Company Incorporated, et al., to account for the fact that the applicants were foreign banks that operate predominately outside the United States. The Board determined in those decisions to adjust the funding and certain operational requirements of the framework previously established for those activities in order to take into account principles of national treatment and the Board's policy not to extend U.S. bank supervisory standards extraterritorially. See also The Toronto-Dominion Bank, 76 Federal Reserve Bulletin 573 (1990); Canadian Imperial Bank of Commerce, 76 Federal Reserve Bulletin 548 (1990). The Board hereby adopts and incorporates herein by reference the reasoning and analysis from the section 20 orders except as that reasoning was specifically modified by the Canadian Imperial, et al. order, as well as the reasoning and analysis contained in the Canadian Imperial, et al. order. 6. Canadian Imperial, et al.; Modification Order; and J.P. Morgan & Company Incorporated, et al. 1. Compliance with the revenue limits shall be calculated in the manner set forth in J.P. Morgan & Company Incorporated, et al., 75 Federal Reserve Bulletin 192, 196-197 (1989). 8. At the time Applicant acquired Company, pursuant to the Board's grant of an exemption under section 4(c)(9) of the BHC Act, Company was involved in the distribution of open-end investment companies. Company has ceased this activity. The ICI protested the application to the extent that Company would sponsor, organize, or martage closed-end investment companies, unless such investment company was not "primarily or frequently engaged in the issuance, sale, and distribution of securities." If an investment company were engaged in such activities, it would not be considered to be a "closed-end" investment company. Accordingly, Applicant has not requested authority to engage in such activity. Legal Developments all types of investment companies, including unit investment trusts. Private Placement and "Riskless Activities Principal" The Board has previously determined that, subject to certain prudential limitations established to address the potential for conflicts of interests, unsound banking practices or other adverse effects, the proposed private placement and riskless principal activities are so closely related to banking as to be proper incidents thereto within the meaning of section 4(c)(8) of the BHC Act. 9 The Board has also previously determined that acting as agent in the private placement of securities and purchasing and selling securities on the order of investors as a "riskless principal" do not constitute underwriting and dealing in securities for purposes of section 20 of the Glass-Steagall Act, and that revenue derived from these activities is not subject to the 10 percent revenue limitation on ineligible securities underwriting and dealing.10 Applicant has committed that Company and Finance will conduct their private placement and "riskless principal" activities using the same methods and procedures, and subject to the same prudential limitations established by the Board in the Bankers Trust and the J.P. Morgan orders, as modified to reflect Applicant's status as a foreign bank, except as noted below. 11 Applicant has proposed to have its affiliated banks, branches, and agencies extend credit to an issuer whose debt securities have been placed by Company or Finance where the proceeds would be used to pay the principal amount of the debt securities at maturity. Applicant has committed that these extensions of credit will conform to the limitations set forth in the Board's decision in J.P. Morgan, including the requirement that a period of at least three years elapse from the time of the placement of the securities to the decision to extend credit; that Applicant maintain adequate documentation of these transactions and 9. J.P. Morgan & Company Incorporated, 76 Federal Reserve Bulletin 26 (1990) ("J.P. Morgan"); Bankers Trust New York Corporation, 75 Federal Reserve Bulletin 829 (1989) ("Bankers Trust"). 10. Id. The ICI has objected to Applicant's proposal to the extent that it could be construed to seek approval for Company to privately place securities of investment companies sponsored or advised by Applicant or its bank or nonbank affiliates. Applicant has not requested approval to place such securities. In addition, the ICI objected to Applicant's proposal to the extent that it could be construed to seek approval for Company to act as riskless principal with respect to securities of investment companies sponsored or advised by Applicant or its bank or nonbank affiliates. Applicant has not requested approval to act as riskless principal with respect to such securities. 11. See, e.g., The Toronto-Dominion Bank, 76 Federal Reserve Bulletin 573 (1990). 135 decisions; and that the extensions of credit meet prudent and objective standards as well as the standards set out in section 23B of the Federal Reserve Act. 12 The Federal Reserve Bank of New York will closely review loan documentation of Applicant's branches to ensure that an independent and thorough credit evaluation has been undertaken with respect to the participation of those institutions in these credit extensions to issuers of securities privately placed by an agent affiliated with those institutions. Applicant also has proposed to have Company place securities with Applicant or its nonbank subsidiaries consistent with the Board's decision in J.P. Morgan. In this regard, Applicant will establish both individual and aggregate limits on the investment by affiliates of Company and Finance in any particular issue of securities that is placed by Company or Finance and will establish appropriate internal policies, procedures, and limitations regarding the amount of securities of any particular issue placed by Company or Finance that may be purchased by Applicant and each of its nonbanking subsidiaries, individually and in the aggregate. 13 These policies and procedures, as well as the purchases themselves, will be reviewed by the Federal Reserve Bank of New York. Applicant has requested that Company be permitted to privately place unrated securities of affiliates or unrated securities representing assets of affiliates with individuals whose net worth exceeds $1 million. The Board has previously approved such placement with sophisticated institutions only. The Board believes that this modification would not result in significant adverse effects since these customers would be financially sophisticated with the expertise to evaluate independently the merits of the securities. 14 Accordingly, Company may place unrated securities of affiliates with individuals who fall within the definition of "institutional investor" in Regulation Y, that is, individuals whose net worth (or net worth with a spouse) exceeds $1 million. 12 C.F.R. 225.2(g). The Board has previously determined by regulation that full-service brokerage activities are permissible for bank holding companies under section 4(c)(8) of 12. 12 U.S.C. § 371c-l. 13. The limit established shall not exceed 50 percent of the issue being placed. Additionally, in the development of these policies and procedures, Company will incorporate, with respect to placements of securities, the limitation established by the Board in condition 12 of its J.P. Morgan & Company Incorporated et al. order regarding aggregate exposure of the holding company on a consolidated basis to any single customer whose securities are underwritten, dealt in, or placed by Company. 14. See, e.g., Banc One Corporation, 76 Federal Reserve Bulletin 756 (1990). 136 Federal Reserve Bulletin • February 1993 the BHC Act. 15 Applicant proposes that Company engage in these activities in accordance with all of the conditions set forth in Regulation Y. 16 In addition, Company will provide discretionary investment management services for institutional customers only, subject to the same terms and conditions as previously approved by the Board. 17 Financial Advisory Activities Applicant has proposed that Company engage in the following advisory activities: (1) Acting as a financial advisor by rendering advice with respect to arranging, structuring, financing, and negotiating domestic and international mergers, acquisition, divestitures, recapitalizations, joint ventures, leveraged buyouts, financing transactions and other corporate transactions for affiliated and unaffiliated financial and nonfinancial institutions and high net worth individuals, and to provide ancillary services or functions incidental to these activities; (2) Providing valuation services in connection with corporate transactions to affiliated and unaffiliated financial and nonfinancial institutions and high net worth individuals; (3) Providing fairness opinions in connection with corporate transactions to affiliated and unaffiliated financial and nonfinancial institutions and high net worth individuals; and (4) Providing financial feasibility studies,18 principally in the context of determining the financial attractiveness and feasibility of corporate transactions to corporations (collectively "financial advisory services"). The Board has previously approved these activities by regulation for bank holding companies. Applicant pro- 15. 12 C.F.R. 225.25(b)(4) and (15)(ii); 57 Federal Register 41,381 (1992). 16. When providing full-service brokerage with respect to ineligible securities that it holds as principal, Company will provide customers with disclosure statements as previously approved by the Board. See PNC Financial Corporation, 75 Federal Reserve Bulletin 396, 397 (1989). Specifically, Company will inform its customers at the commencement of the relationship that, as a general matter, Company may be a principal or may be engaged in underwriting with respect to, or may purchase from an affiliate, those securities for which brokerage and advisory services are provided. At the time any brokerage order is taken, the customer will be informed (usually orally) whether Company is acting as agent or principal with respect to a security. Confirmations sent to customers also will state whether Company is acting as agent or principal. 17. See J.P. Morgan & Co. Incorporated, 73 Federal Reserve Bulletin 810 (1987). 18. Feasibility studies do not include assisting management with planning or marketing for a given project or providing general operational or management advice. poses to conduct these activities in accordance with Regulation Y. 12 C.F.R. 225.25(b)(4)(vi). Swap Activities The Board has previously determined by order that the proposed swaps and swap derivative products activities are closely related to banking and permissible for bank holding companies within the meaning of section 4(c)(8) of the BHC Act. 19 The Board must also find that the proposed activities "can reasonably be expected to produce benefits to the public . . . that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices." 12 U.S.C. § 1843(c)(8). Finance appears to be capable of managing the risks associated with the proposed activities. Applicant's subsidiary, Morgan Grenfell pic, which has extensive experience in lending and financing services worldwide, has undertaken to provide credit screening for all potential counterparties of Finance through its credit desk services in London. In appropriate cases, Finance will obtain a letter of credit on behalf of, or collateral from, a counterparty. 20 In addition, Finance will establish separate credit risk exposure limits for each swap counterparty. Finance will monitor this exposure on an ongoing basis, in the aggregate and with respect to each counterparty. Senior management will be periodically informed of the potential risk to which Finance is exposed. In order to manage the risk associated with adverse changes in interest rates ("price risk"), Finance will match all the swaps and related instruments in which it is a principal and will hedge any unmatched positions pending a suitable match. Finance will not enter into unmatched or unhedged swaps for speculative purposes. Finance's management will set absolute limits on the level of risk to which its swap portfolio may be exposed. Finance's exposure to price risk will be monitored by both business management and internal auditing personnel to guarantee compliance with the risk limitations imposed by management. Auditing personnel will report directly to senior management to ensure that any violations of portfolio risk limitations are reported and corrected. With respect to the risk associated with the potential for differences between the floating rate indices on two matched or hedged swaps ("basis risk"), Finance's management will impose absolute limits on the aggre- 19. The Sumitomo Bank, Limited, 75 Federal Reserve Bulletin 582 (1989) ("Sumitomo Bank"). 20. Applicant has indicated that Morgan Grenfell pic may be the provider of the letter of credit. Legal Developments gate basis risk to which Finance's swaps portfolio may be exposed. If the level of risk threatens to exceed the limits at any time, Finance will actively seek to enter into matching transactions for its unmatched positions. Finance's internal auditing staff, together with management, will monitor compliance with the management-imposed basis risk limits.21 In order to minimize any possible conflicts of interest between Finance's role as a principal or broker in swap transactions and its role as advisor to potential counterparties, Finance will disclose to each customer the fact that Finance may have an interest as a counterparty, principal, or broker in the course of action ultimately chosen by the customer. Also, in any case in which Finance has an interest in a specific transaction as an intermediary or principal, Finance will advise its customer of that fact before recommending participation in that transaction. 22 In addition, Finance's advisory services will be offered only to sophisticated customers who would be unlikely to place undue reliance on investment advice received and better able to detect investment advice motivated by self-interest. In considering activities related to swap transactions, the Board has expressed its concerns regarding conflicts of interest and related adverse effects that, absent certain limitations, may be associated with financial advisory activities. In order to address these potential adverse effects, Applicant has committed that: (i) Finance's financial advisory activities will not encompass the performance of routine tasks or operations for a client on a daily or continuous basis; (ii) Disclosure will be made to each potential client of Finance that Finance is an affiliate of Applicant; (iii) Finance will not make available to Applicant or any of Applicant's subsidiaries confidential information received from Finance's clients, except with the client's consent; and (iv) Advice rendered by Finance on an explicit fee basis will be without regard to correspondent balances maintained by a client of Finance at Applicant or any of Applicant's depository subsidiaries. 21. In addition to rate and basis risk, the value of a swap option is subject to market expectations of the future direction and rate of change in interest rates, or volatility risk. Finance's management will impose absolute limits on the level of volatility risk to which Finance's swap portfolio may be exposed. 22. In any transaction in which Finance arranges a swap transaction between an affiliate and a third party, the third party will be informed that Finance is acting on behalf of an affiliate. 137 Financial Factors, Managerial Resources and Other Considerations In order to approve this application, the Board is required to determine that the performance of the proposed activities by Applicant "can reasonably be expected to produce benefits to the public . . . that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices." 12 U.S.C. § 1843(c)(8). The Board has reviewed the capitalization of both Applicant and Company in accordance with the standards set forth in the Canadian Imperial, et al. order, 23 and finds the capitalization of each to be consistent with approval of the proposal. In this regard, the Board notes that Applicant's capital ratios, both before and after deduction of investments in and unsecured loans to Company, are well above the minimum levels established in the risk-based capital guidelines adopted by the Basle Committee on Banking Regulation and Supervisory Practices, and that Applicant may be considered strongly capitalized. 24 Applicant is in good standing with its home country supervisor and the U.S. offices and subsidiaries of Applicant are in generally satisfactory condition. With respect to the capitalization of Company, approval of the requested activities is limited to a level consistent with the projections of position size and types of securities contained in the application. The Board has also determined that all other financial and managerial factors are consistent with the ability of Applicant to remain a source of strength to its U.S. banking operations. To approve the application, the Board must find that Applicant's performance of the activities would result in public benefits that outweigh potential adverse effects. In making this evaluation, the Board considered that Applicant, through Deutsche Bank Capital Corporation, New York, New York ("DBCC"), engages in securities activities in the United States that are not permissible for U.S. bank holding compa- 23. 76 Federal Reserve Bulletin at 161 (1990). 24. Consistent with the guidelines adopted in connection with the Report on Capital Equivalency, issued June 19, 1992, Applicant's capital was evaluated under the risk-based capital guidelines as administered by Applicant's home country, a signatory to the Basle Capital Accord. The Basle standard provides a common basis for evaluating the general equivalency of capital among banks from various countries. As noted in the Study, however, simply meeting the minimum capital standards does not automatically imply that the financial condition of a foreign bank applicant is consistent with approval of a particular application. The capital ratio necessary to obtain approval for full underwriting and dealing authority will be higher than the ratio required to conduct a low-risk activity. As noted, in this case, Applicant's ratios are well above the Basle minimum standards and are equivalent to those required of domestic applicants. 138 Federal Reserve Bulletin • February 1993 nies. 25 As a result, Applicant could conceivably gain an unfair competitive advantage over domestic bank holding companies by combining grandfathered securities and other activities with activities permissible under section 4(c)(8) of the BHC Act. This could occur if the grandfathered activities were used to support or enhance the section 4(c)(8) activities, or the 4(c)(8) activities were used to support or enhance the grandfathered activities, thus allowing Applicant to offer a wider array of services than is permissible for domestic bank holding companies. Moreover, the combination of the companies' underwriting, dealing, placement, and advisory activities could give rise to conflicts of interest. Applicant has, however, committed that DBCC26 and the Companies will remain completely separate and will not engage in any business with, or on behalf of, each other. Included within this commitment are a series of individual commitments, set forth as Appendix A to this order, designed to further the complete separation of DBCC from the U.S. operations of Morgan Grenfell. 27 These commitments are consistent with representations made in connection with prior Board decisions concerning the approval of section 4(c)(8) applications where the applicant also engaged in grandfathered activities under the IBA. 28 The commitments have been modified and expanded to reflect the nature of the activities of the U.S. operations of Morgan Grenfell. In light of these commitments, as 25. DBCC is a registered broker-dealer that engages in underwriting and dealing in all types of securities and in various other financial activities. Applicant has owned DBCC and has indirectly engaged in such activities since prior to July 26, 1978. Section 8(c)(1) of the International Banking Act of 1978 ("IBA") provides that any foreign bank that became subject to the IBA on its enactment may continue to engage in the United States in any activities in which it or an affiliate was engaged on July 26,1978. 12 U.S.C. § 3106(c)(1). Thus, Applicant is grandfathered under section 8(c)(1) of the IBA to retain its interest in DBCC and to continue to engage in securities activities, unless the Board, after notice and opportunity for a hearing, finds that the continuation of the activities would give rise to adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking practices in the United States. 26. For purposes of these commitments, "DBCC" refers to DBCC and any of its subsidiaries or affiliates operating in the United States under section 8(c)(1) of the IBA. 27. Applicant has proposed that a management official of its New York branch who is also a director of Company (as permitted pursuant to condition 13 of the Canadian Imperial, et al. order) also serve as a director of Deutsche Bank North American Holding Corp., the parent company of DBCC. The purpose of such interlock is to provide supervision and oversight in connection with Applicant's U.S. operations. The official would have no day-to-day responsibilities for the operations of DBCC or Company. The Board believes that such oversight is prudent and has determined that the proposal would not result in any adverse effects in light of the framework of conditions applicable to Company as a section 20 company and the further commitments made by Applicant to maintain the separation of all business of DBCC and Company. 28. Dresdner Bank AG, 75 Federal Reserve Bulletin 642 (1989); Bayerische Vereinsbank AG, 73 Federal Reserve Bulletin 155 (1987). well as the prudential framework governing Company as a section 20 subsidiary and the applicable legal restrictions under federal securities registration laws, the Board believes that Applicant would not gain an unfair competitive advantage in conducting the grandfathered activities, and that those activities would not give rise to conflicts of interest in connection with activities approved under section 4(c)(8) of the BHC Act. The Board received a comment from Mr. Steven Mizel ("Protestant") alleging that Applicant's retention of the subsidiaries of Morgan Grenfell pic would not reasonably be expected to produce benefits to the public. Protestant bases his assertion on claims that Applicant and Morgan Grenfell breached their fiduciary duties and tortiously interfered with Protestant's business. Protestant alleges that he had entered into an agreement with Company whereby they would offer financial advisory services to third parties. Protestant asserts that Applicant and its subsidiaries breached the contract, breached fiduciary duties, made fraudulent statements or were negligent in making statements, maliciously and wrongfully interfered with present and prospective business relations, and that Applicant aided and abetted the breach of fiduciary duties. There is a continuing lawsuit between Applicant and its subsidiaries and Protestant contesting the claims. Protestant has raised issues that the Board is not permitted to consider under section 4(c)(8) of the BHC Act. The Board does not adjudicate private contractual claims between parties, and Protestant's assertions will be considered in a court of law. Thus, Protestant has not raised any issue which would require denial of the application. 29 Protestant also alleges that the Board should not approve the application because competition in the finance industry would be diminished. While the acquisition does decrease the competition in the industry, there will continue to be a large number of competitors in the industry. Accordingly, the Board has determined that this comment does not require denial of the application. Protestant also alleges that the application is incomplete because it does not reflect an agreement to provide financial advisory services with Eric Gleacher. The Board notes, however, that Applicant has submitted a separate and independent application to perform financial advisory services in cooperation with Eric Gleacher & Co. Protestant further asserts 29. Protestant maintains that Company did not make disclosures required by the Board at the time Company was dealing with Protestant. At the time of the transactions, Company was not operating pursuant to section 4(c)(8) of the BHC Act, and thus not required to make the disclosures. Legal Developments that the Applicant has not been candid in its representations concerning its control over Morgan Grenfell and its subsidiaries, has requested that the Board extend the time for comment and conduct a full hearing into the facts, and require Applicant to amend the application.30 The Board believes that, because Applicant lawfully owns and controls the stock of Morgan Grenfell, having acquired such ownership pursuant to authorization from the Board, Applicant has the right to exercise control over its policies and procedures, provided that the control does not violate the law or commitments relied upon by the Board in permitting the acquisition. Under the framework established in this and prior decisions, approval of this proposal is not likely to result in any significant adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking practices. Approval of the proposal would allow Applicant to continue to provide greater efficiencies and convenience to its customers by permitting the continuation of the provision of a wider range of services by a single entity. Based on the foregoing and other facts of record, and subject to the commitments made by Applicant, the Board has determined that the performance of the proposed activities by Applicant can reasonably be expected to produce public benefits that would outweigh possible adverse effects under the proper incident to banking standard of section 4(c)(8) of the BHC Act. 3 i Accordingly, and for the reasons set forth in the section 20 orders and in Canadian Imperial, et al., the Board concludes that Applicant's proposal to engage 30. Protestant has requested that the Board hold a public hearing to assess further facts surrounding the application, and Applicant's conduct. Generally under the Board's rules, the Board may, in its discretion, hold a public hearing or meeting on an application to clarify factual issues related to the application and to provide an opportunity for testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The Board has carefully considered this request. In the Board's view, the parties have had ample opportunity to present submissions, and Protestant has submitted substantial written comments, some received after the close of the comment period, that have been considered by the Board. In light of these facts, the Board has determined that a public meeting or hearing is not either necessary to clarify the factual record in these applications, or otherwise warranted in this case. Accordingly, the request for a public meeting or hearing on this application and the request to extend formally the time for public comment are hereby denied. 31. Company may also purchase and sell for its own account futures, forwards, options, and options on futures contracts on ineligible securities, as incidents to the proposed ineligible securities underwriting and dealing activities. Any activity conducted as a necessary incident to the ineligible securities underwriting and dealing activities must be treated as part of the ineligible securities activity unless Company has received specific approval under section 4(c)(8) of the BHC Act to conduct the activity independently. Until such approval is obtained, any revenues from the incidental activity must be counted as ineligible revenue subject to the 10 percent gross revenue limitation set forth in the Modification Order. 139 through Company in the requested activities is consistent with the Glass-Steagall Act and 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, provided Applicant limits Company's activities as provided in the section 20 orders and in Canadian Imperial, et al. The application is hereby approved, subject to all the terms and conditions of those orders and this order. The Board's approval of this proposal extends only to activities conducted within the conditions of those orders and this order, including the Board's reservation of authority to establish additional limitations to ensure that Company's activities are consistent with safety and soundness, conflict of interest, and other relevant considerations under the BHC Act. Underwriting and dealing in any manner other than as approved in those orders is not within the scope of the Board's approval and is not authorized for Company. Company has established policies and procedures to ensure compliance with the requirements of this order, including computer, audit and accounting systems, internal risk management controls and the necessary operational and managerial infrastructure to comply with the requirements of this order. Accordingly, Company may engage in the requested debt and equity underwriting and dealing activities. 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 a bank holding company or any of its subsidiaries as the Board finds necessary to assure compliance with, and to prevent evasion of, the provisions of the BHC Act and the Board's regulations and orders issued thereunder. By order of the Board of Governors, effective December 17, 1992. Voting for this action: Chairman Greenspan and Governors Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips. JENNIFER J . JOHNSON Associate Secretary of the Board Appendix A List of Commitments Separating the Operations of DBCC and CJL Deutsche Bank commits that DBCC 1 1. For purpose of these commitments, "DBCC" is deemed to mean Deutsche Bank Capital Corporation and each of its subsidiaries and affiliates operating pursuant to section 8(c) of the International Banking Act of 1978, as amended. 140 Federal Reserve Bulletin • February 1993 and the Company2 will remain completely separate and will not engage in any business with, or on behalf of, each other. In addition and without limiting the foregoing commitment, Deutsche Bank has made the following specific commitments: (1) No director, officer or employee of DBCC will serve as an officer, director or employee of the Company, except that Deutsche Bank, for administrative and supervisory purposes, may authorize one person to serve as a director of CJL and the parent company of DBCC if the person is not involved in the day-to-day operations of the companies. (2) DBCC will not enter into any joint marketing efforts with the Company and will not solicit customers for the Company in the United States, nor will the Company solicit customers for DBCC in the United States. (3) The Company will not share fees, profits or customer information with, will not make customer referrals to, and will not engage in cross marketing with, DBCC, nor will the Company and DBCC share customer lists or nonpublic customer information. 3 (4) The Company will not provide investment advice on any securities issued by DBCC. (5) The Company will not provide investment advice to a customer with respect to securities being underwritten or privately placed by DBCC or in which DBCC makes a market, unless the Company: (i) Has conducted an independent analysis of such securities in the same manner and to the same extent as if the securities were not underwritten, placed, or dealt in by DBCC; (ii) Discloses the fact of the affiliation to its customer and the involvement of the affiliate with the securities, and; (iii) Obtains the customer's prior consent to the purchase or sale of such securities, provided that in those cases where obtaining such prior consent is impractical (e.g., if the customer is located outside the United States), the Company will obtain such consent as soon as practicable after the purchase or sale. Further, DBCC will follow the above procedures with respect to securities which are being underwritten or privately placed by Company, or in which Company makes a market. 2. For purposes of these commitments, "Company" is deemed to mean each of the U.S. subsidiaries of Morgan Grenfell. 3. DBCC and Company may exchange confidential customer information upon the specific request of a client, provided that the customer is informed, either orally or in writing, that Company and DBCC may not engage in any joint undertakings on behalf of the client. (6) The Company will not engage in promotional activities with respect to any distribution of securities being underwritten by DBCC. DBCC will not engage in promotional activities with respect to any distribution of securities being underwritten by Company. (7) DBCC will not distribute, within the United States, shares of any investment company advised by the Company. (8) DBCC will not sell or purchase securities or assets, either as a principal or a broker, to, from, or for any investment company advised by the Company, or otherwise perform for such an investment company any service that DBCC might have authority to provide under the IB A. (9) No employee of DBCC will serve as a portfolio manager of any investment company advised by the Company. (10) No officer, director or employee of DBCC will serve as a director of any open-end investment company advised by the Company. (11) DBCC will not acquire, either for its own account or as a fiduciary, any shares of any investment company advised by the Company. (12) Company, and its employees, officers, and directors, will abide by the commitments enumerated in numbers 7, 8, 9, 10, and 11, with respect to investment companies advised by DBCC. (13) The Company will disclose its relationship with DBCC and Applicant's subsidiaries and affiliates to each of the Company's customers to the full extent required by the U.S. securities laws. (14) The Company will have no arrangement with any person involved in distributing securities with regard to the Company's advice to its customers concerning such securities except, and only in the case of persons other than DBCC, to the extent such arrangements are permissible under U.S. securities laws and other applicable laws. (15) The Company will disclose to its customers with discretionary accounts that its affiliates may make a market in securities that it will purchase and sell for those customers, account and will obtain a written consent from such customers to the purchase or sale of securities from time to time by it for the portfolios of such customers to the extent required by the U.S. securities laws and other applicable laws such as ERISA. (16) Company will not participate in an underwriting or placement of securities if DBCC is participating in the underwriting or placement of the issuer's securities. (17) Company will not act as a market-maker, specialist, or perform similar activities with respect to securities which are being underwritten or dealt in Legal Developments by DBCC, and vice versa. Thus, Company will not underwrite the issuance of securities if DBCC is making a market in the securities, and vice versa. In addition, Company should not make a market in a security for which DBCC served as a market-maker within the preceding twelve months, and vice versa. (18) Company will not offer any services relating to interest rate and currency swaps and derivative products if DBCC is a counterparty or agent, and vice versa. Company will not enter into swaps or derivative products with DBCC, nor would either company utilize the services of the other when providing services to third parties. (19) Company will not provide any financial advisory services to a customer if DBCC is also advising the customer or a third party on the same or related manner. (20) There will be no joint undertakings between DBCC and Company. Huntington Bancshares Incorporated Columbus, Ohio Order Approving Application to Engage De novo in Underwriting and Dealing in Certain Bank-Ineligible Securities on a Limited Basis, and Other Securities-Related Activities Huntington Bancshares Incorporated, Columbus, Ohio ("Applicant"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has applied pursuant to section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and section 225.23(a)(3) of the Board's Regulation Y (12 C.F.R. 225.23(a)(3)), for approval to engage de novo through its wholly owned subsidiary, The Huntington Company, Columbus, Ohio ("Company"), in the following activities: (1) Underwriting and dealing in municipal revenue bonds (including public ownership industrial development bonds), mortgage-related securities, consumer-receivable-related securities, and commercial paper (hereinafter "bank- ineligible securities"); (2) Acting as agent in the private placement of all types of securities, including providing related advisory services; (3) Buying and selling securities on the order of investors as a "riskless principal"; (4) Providing securities brokerage services to institutional and retail customers, both separately and in combination with investment advisory services pursuant to section 225.25(b)(15) of the Board's Regulation Y (12 C.F.R. 225.25(b)(15)) (hereinafter "fullservice brokerage"); 141 (5) Providing investment advisory and financial advisory services pursuant to section 225.25(b)(4) of the Board's Regulation Y (12 C.F.R. 225.25(b)(4)); and (6) Underwriting and dealing in government obligations and money market instruments pursuant to section 225.25(b)(16) of the Board's Regulation Y (12 C.F.R. 225.25(b)(16)) (hereinafter "bank-eligible securities"). Notice of the application, affording interested persons an opportunity to submit comments, has been published (57 Federal Register 57,233 (1992)). The time for filing comments has expired, and the Board has considered the application and all comments received in light of the public interest factors set forth in section 4(c)(8) of the BHC Act. Applicant, with total consolidated assets of $13.5 billion, is the fourth largest commercial banking organization in Ohio.1 It operates eight banking subsidiaries in Ohio, Michigan, Indiana, Kentucky, and West Virginia, and engages in various nonbanking activities through eight nonbanking subsidiaries. The Board has previously determined by regulation that providing investment advisory and financial advisory services, full service brokerage services, and underwriting and dealing in government obligations and money market instruments are activities that are closely related to banking for purposes of section 4(c)(8) of the BHC Act. 2 Applicant proposes to conduct these activities through Company in accordance with the Board's regulations. 3 Underwriting and Dealing in Bank-Ineligible Securities The Board has determined that, subject to the prudential framework of limitations established in previous decisions to address the potential for conflicts of interests, unsound banking practices, or other adverse effects, the proposed underwriting and dealing activities are so closely related to banking as to be proper 1. Data are as of September 30, 1992. 2. See 12 C.F.R. 225.25(b)(4), (b)(15), and (b)(16). 3. When providing full-service brokerage with respect to bankineligible securities that it holds as principal, Company will provide customers with disclosure statements as previously approved by the Board. See PNC Financial Corporation, 75 Federal Reserve Bulletin 396, 397 (1989). Specifically, Company will inform its customers at the commencement of the relationship that, as a general matter, Company may be a principal or may be engaged in underwriting with respect to, or may purchase from an affiliate, those securities for which brokerage and advisory services are provided. At the time any brokerage order is taken, the customer will be informed (usually orally) whether Company is acting as agent or principal with respect to a security. Confirmations sent to customers also will state whether Company is acting as agent or principal. 142 Federal Reserve Bulletin • February 1993 incidents thereto within the meaning of section 4(c)(8) of the BHC Act. The Board also has determined that the conduct of these securities underwriting and dealing activities is consistent with section 20 of the Glass-Steagall Act, provided that the underwriting and dealing subsidiary derives no more than 10 percent of its total gross revenue from underwriting and dealing in bank-ineligible securities over any two-year period. 4 Applicant has committed that Company will conduct its underwriting and dealing activities with respect to bank-ineligible securities subject to the 10 percent revenue test established by the Board in previous Orders. 5 Private Placement and "Riskless Activities Principal" Private placement involves the placement of new securities with a limited number of sophisticated purchasers in a nonpublic offering. A financial intermediary in a private placement transaction acts solely as an agent of the issuer in soliciting purchasers, and does not purchase the securities and attempt to resell them. Securities that are privately placed are not subject to the registration requirements of the Securities Act of 1933, and are offered only to financially sophisticated institutions and individuals and not the public. Applicant will not privately place registered securities and will only place securities with customers who qualify as accredited investors. "Riskless principal" is the term used in the securities business to refer to a transaction in which a broker-dealer, after receiving an order to buy (or sell) a security from a customer, purchases (or sells) the security for its own account to offset a contemporaneous sale to (or purchase from) the customer. 6 "Risk- 4. See Citicorp, J.P. Morgan & Company Incorporated, and Bankers Trust New York Corporation, 73 Federal Reserve Bulletin 473 (1987) ("Citicorp/Morgan/Bankers Trust Order"), affd sub nom. Securities Industry Association v. Board of Governors of the Federal Reserve System, 839 F.2d 47 (2d Cir. 1988), cert, denied, 486 U.S. 1059 (1988), as modified by Order Approving Modifications to Section 20 Orders, 75 Federal Reserve Bulletin 751 (1989) ("Modification Order"). The 10 percent revenue limitation should be calculated in accordance with the method stated in J.P. Morgan & Company Incorporated, The Chase Manhattan Corporation, Bankers Trust New York Corporation, Citicorp, and Security Pacific Corporation, 75 Federal Reserve Bulletin 192, 196 (1989). 5. Company may also provide services that are necessary incidents to these approved activities. Any activity conducted as a necessary incident to the bank-ineligible securities activity must be treated as part of the bank-ineligible securities activity unless Company has received specific approval under section 4(c)(8) of the BHC Act to conduct the activity independently. Until such approval is obtained, any revenues from the incidental activity must be counted as ineligible revenue subject to the 10 percent gross revenue limit set forth in the CiticorplMorganlBankers Trust Order and the Modification Order. 6. See Securities and Exchange Commission Rule 10b-10, 17 C.F.R. 240.10b-10(a)(8)(i). less principal" transactions are understood in the industry to include only transactions in the secondary market. Thus, Applicant proposes that Company would not act as a "riskless principal" in selling securities at the order of a customer that is the issuer of the securities to be sold or in any transaction where Company has a contractual agreement to place the securities as agent of the issuer. Company also would not act as a "riskless principal" in any transaction involving a security for which it makes a market. The Board previously has determined by Order that, subject to certain prudential limitations that address the potential for conflicts of interests, unsound banking practices, or other adverse effects, the proposed private placement and riskless principal activities are so closely related to banking as to be a proper incident thereto within the meaning of section 4(c)(8) of the BHC Act. 7 The Board also has previously determined that acting as agent in the private placement of securities, and purchasing and selling securities on the order of investors as a "riskless principal" do not constitute underwriting and dealing in securities for purposes of section 20 of the Glass-Steagall Act, and that revenue derived from these activities is not subject to the 10 percent revenue limitation on bankineligible securities underwriting and dealing.8 Applicant has committed that Company will conduct its private placement and "riskless principal" activities using the same methods and procedures, and subject to the same prudential limitations established by the Board in the Bankers Trust II Order and the J.P. Morgan II Order, 9 including the comprehensive 7. See Bankers Trust New York Corporation, 75 Federal Reserve Bulletin 829 (1989) ("Bankers Trust II Order"). Applicant has also proposed, consistent with J.P. Morgan <fe Company Incorporated, 76 Federal Reserve Bulletin 26 (1990) {"J.P. Morgan II Order"), and subject to the limitations contained in that Order, that: (1) Applicant's nonbank subsidiaries be permitted to purchase securities privately placed by Company, and (2) Applicant and its subsidiaries other than Company be permitted to lend to an issuer for the purpose of repaying securities placed by Company. 8. See Bankers Trust II Order. 9. See J.P. Morgan II Order, 76 Federal Reserve Bulletin at 26; Bankers Trust II Order, 75 Federal Reserve Bulletin at 829. Among the prudential limitations detailed more fully in those Orders are that Company will maintain specific records that will clearly identify all "riskless principal" transactions, and Company will not engage in any "riskless principal" transactions for any securities carried in its inventory. When acting as a "riskless principal," Company will only engage in transactions in the secondary market, and not at the order of a customer that is the issuer of the securities to be sold, will not act as "riskless principal" in any transaction involving a security for which it makes a market, nor hold itself out as making a market in the securities that it buys and sells as a "riskless principal." Moreover, Company will not engage in "riskless principal" transactions on behalf of its foreign affiliates that engage in securities dealing activities outside the United States and will not act as "riskless principal" for registered investment company securities. In addition, Company will not act as a "riskless principal" with respect to any securities of investment companies that are advised by Applicant or any of its Legal Developments framework of restrictions designed to avoid potential conflicts of interest, unsound banking practices, and other adverse effects imposed by the Board in connection with underwriting and dealing in securities. Financial Factors, Managerial Resources, and Other Considerations In every case involving a nonbanking acquisition by a bank holding company under section 4 of the BHC Act, the Board considers the financial condition and resources of the applicant and its subsidiaries and the effect of the transaction on these resources. 10 Based on the facts of this case, the Board concludes that financial considerations are consistent with approval of this application. The managerial resources of Applicant also are consistent with approval. In order to approve this application, the Board is required to determine that the performance of the proposed activities by Applicant can reasonably be expected to produce public benefits that would outweigh adverse effects under the proper incident to banking standard of section 4(c)(8) of the BHC Act. Under the framework established in this Order and prior decisions, consummation of this proposal is not likely to result in any significant adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices. Consummation of the proposal would provide added convenience to Company's customers. In addition, the Board expects that the de novo entry of Company into the market for these services would increase the level of competition among providers of these services. Accordingly, the Board has determined that the performance of the proposed activities by Applicant can reasonably be expected to produce public benefits that would outweigh possible adverse effects under the proper incident to banking standard of section 4(c)(8) of the BHC Act. Based on all the facts of record, and subject to the commitments made by Applicant, as well as all of the terms and conditions set forth in this Order and in the above-noted Board Orders, the Board has determined that the application should be, and hereby is, approved. Approval of this proposal is specifically conditioned on compliance by Applicant and Company with the commitments made in connection with its affiliates. With regard to private placement activities, Company will not privately place registered investment company securities. Further, Company will not privately place any securities of investment companies that are advised by Applicant or any of its affiliates. 10. See 12 C.F.R. 225.25. See also The Fuji Bank, Limited, 75 Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal Reserve Bulletin 155, 156 (1987). 143 application, as supplemented, and with the conditions referenced in this Order. The Board's determination also is subject to all of the conditions set forth in Regulation Y, including those in sections 225.4(d) and 225.23(b), and to the Board's authority to require modification or termination of the activities of a bank holding company or any of its subsidiaries as the Board finds necessary to assure compliance with, and to prevent evasion of, the provisions of the BHC Act and the Board's regulations and Orders issued thereunder. In approving this transaction, the Board has relied upon all of the facts of record and all of the representations and commitments made by Applicant. The Board's action is expressly conditioned upon compliance with all of the commitments made by Applicant. For the purpose of this action, these commitments will be considered conditions imposed in writing and, as such, may be enforced in proceedings under applicable law. This transaction shall not be consummated later than three months after the effective date of this Order, unless such period is extended for good cause by the Board or by the Federal Reserve Bank of Cleveland pursuant to delegated authority. By order of the Board of Governors, effective December 21, 1992. Voting for this action: Chairman Greenspan and Governors Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips. JENNIFER J . JOHNSON Associate Secretary of the Board ORDERS ISSUED BANKING ACT UNDER INTERNATIONAL TaipeiBank Taipei City, Taiwan Order Approving Establishment of a Branch TaipeiBank, Taipei, Taiwan ("Bank"), a foreign bank within the meaning of the International Banking Act ("IB A"), has applied under section 7(d) of the IB A (12 U.S.C. § 3105(d)) to establish a state-licensed branch in Los Angeles, California. A foreign bank must obtain the approval of the Board to establish a branch, agency, commercial lending company, or representative office in the United States under the Foreign Bank Supervision Enhancement Act of 1991 ("FBSEA"), which amended the IBA. Notice of the application, affording interested persons an opportunity to submit comments, has been published in a newspaper of general circulation in 144 Federal Reserve Bulletin • February 1993 Los Angeles, California (Los Angeles Daily Journal, May 11, 1992). The time for filing comments has expired and no public comments were received. Bank was established in 1969 as a commercial bank owned by the Taipei Municipal Government ("Municipal Government"). 1 Bank is the eighth largest bank in Taiwan in terms of total assets, which at year end 1991 were $19.6 billion. Bank owns 30 percent of the shares of one Taiwanese subsidiary which concentrates its activities in Taiwan, and has one office outside of Taiwan, a state-licensed agency in New York, New York. Bank does not engage, directly or indirectly, in any nonbanking activities in the United States. Bank will remain a qualifying foreign banking organization under Regulation K after establishing the proposed branch (12 C.F.R. 211.24(a)). Under the IB A, in order to approve an application by a foreign bank to establish a branch in the United States, the Board must determine that the foreign bank: (1) Engages directly in the business of banking outside of the United States; (2) Has furnished to the Board the information it needs to assess adequately the application; and (3) Is subject to comprehensive supervision or regulation on a consolidated basis by its home country supervisor (12 U.S.C. § 3105(d)(2)). The Board may also take into account additional standards as set forth in the IBA (12 U.S.C. § 3105(d)(3)-(4)) and Regulation K (12 C.F.R. 211.25(c)). Bank engages directly in the business of banking outside of the United States through its extensive commercial banking operations in Taiwan. Bank also has provided the Board with the information necessary to assess the application through submissions that address the relevant issues. Bank is supervised and regulated by both the Ministry of Finance of Taiwan ("Ministry") and the Central Bank of China ("Central Bank"), which share responsibility for the supervision of Taiwanese banks. The Banking Law of Taiwan authorizes the Ministry to regulate and supervise commercial banks in Taiwan, including Bank. 2 The Ministry has delegated the authority to the Central Bank to act as the primary examiner of banks in Taiwan, in which capacity the Central Bank conducts mandatory annual examinations. 3 1. The Municipal Government owns 99.9 percent of Bank's shares. 2. With respect to banks, this authority permits the Ministry to, among other things, issue licenses, limit activities and expansion, conduct examinations, set minimum capital and liquidity ratios, limit credit extensions, restrict director interlocks, define qualifications for management, and take enforcement actions. 3. Bank receives additional oversight by its owner, the Municipal Government, and the Ministry of Audit of the Control Yuan, an Regulation K provides that a foreign bank will be considered to be subject to comprehensive supervision or regulation on a consolidated basis if the Board determines that the bank is supervised and regulated in such a manner that its home country supervisor receives sufficient information on the worldwide operations of Bank, including the relationship of Bank to any affiliate, to assess the overall financial condition of Bank and its compliance with law and regulation (12 C.F.R. 211.25(c)(1)).4 In making its determination under this standard on this application by Bank, the Board considered the following information. The Ministry and the Central Bank obtain information on the condition of Bank, its subsidiary, and its foreign office through regular examinations and periodic financial reports. The Central Bank performs mandatory annual on-site head office examinations, periodic office examinations, and, if warranted, targeted examinations of Bank. The Ministry coordinates examinations and takes corrective measures based on the examination reports. The annual examination of the head office of Bank specifically includes a review of both the international department and the foreign operations or offices of Bank. The review of the activities of Bank's foreign office includes scrutiny of host country examination reports, internal control and audit reports, and annual outside audit reports. The Ministry has also implemented annual on-site examinations of Bank's foreign office to supplement this review. The Ministry and Central Bank obtain information on the dealings and relationship between Bank and its subsidiary through reports to and examinations by the Central Bank and through the requirement that the Ministry approve investments in other companies. The Banking Law of Taiwan also imposes a prohibition on certain unsecured lending to companies in which a bank holds certain investments. Finally, if the Minis- auditor of government agencies. This oversight is secondary to supervision by the Ministry and the Central Bank. 4. In assessing this standard, the Board considers, among other factors, the extent to which the home country supervisors: (i) Ensure that the bank has adequate procedures for monitoring and controlling its activities worldwide; (ii) Obtain information on the condition of the bank and its subsidiaries and offices through regular examination reports, audit reports, or otherwise; (iii) Obtain information on the dealings with and relationship between the bank and its affiliates, both foreign and domestic; (iv) Receive from the bank financial reports that are consolidated on a worldwide basis, or comparable information that permits analysis of the bank's financial condition on a worldwide consolidated basis; (v) Evaluate prudential standards, such as capital adequacy and risk asset exposure, on a worldwide basis. These are indicia of comprehensive, consolidated supervision. No single factor is essential and other elements may inform the Board's determination. Legal Developments try or Central Bank determines that the subsidiary poses an undue risk to Bank or is engaging in unsafe or improper activities, the Ministry may require Bank to divest its interest in the subsidiary. Bank has no parent or sister affiliates. With respect to foreign offices, the Ministry must approve the establishment of such offices by Bank. The Ministry and the Central Bank have also required Bank to establish procedures under which an foreign office must obtain head office approval of certain transactions, undergo an annual internal audit, and document its transactions. The Central Bank evaluates the adequacy of these procedures and the records of approved transactions during the annual examination of Bank's head office. The Ministry also requires approval of any investment in a company, including Bank's minority shareholding in its subsidiary. The Ministry and the Central Bank also review financial information on the subsidiary that is incorporated in Bank's financial reports. Finally, the Ministry and Central Bank may review the corporate records of the subsidiary. The Ministry and the Central Bank evaluate prudential standards, such as capital adequacy and risk asset exposure, for Bank on a worldwide basis. The government of Taiwan incorporated the risk-based capital standards of the Basle Accord into its Banking Law in 1989, with variations that conform to local accounting practices and that apply to government-controlled banks. 5 The Ministry implemented these standards to restrict all dividends and other distributions by any Taiwanese bank that has a risk-weighted capital ratio of less than 8 percent. Based on all the facts of record, which include the information described above, the Board concludes that Bank is subject to comprehensive supervision and regulation on a consolidated basis. In considering this application, the Board has also taken into account the additional standards set forth in section 7 of the IBA (12 U.S.C. § 3105(d)(3)-(4)). As noted above, Bank has received the consent of its home country authorities to establish the proposed branch. In addition, the Ministry may share information on Bank's operations with other supervisors, including the Board. As noted, under local regulation, Bank must comply with the capital standards of the Basle Accord, as implemented by Taiwan. Bank's capital exceeds the 5. The Ministry has issued regulations that implement these standards. Generally, these regulations fall within the parameters of the Basle Accord, with the exception of one equity adjustment item that applies only to government-owned banks. This factor is not significant in this case, and Bank's capital can be considered equivalent to that required of a U.S. banking institution. 145 minimum standards and is equivalent to capital that would be required of a U.S. banking organization. Managerial and other financial resources of Bank are also considered consistent with approval. The proposed branch is Bank's second office in the United States, and Bank appears to have the experience and capacity to support this additional office. In addition, Bank has established controls and procedures for its U.S. offices to ensure compliance with U.S. law. Under the IBA, the proposed state-licensed branch may not engage in any type of activity that is not permissible for a federally-licensed branch without the Board's approval. Finally, Bank has committed that it will make available to the Board such information on the operations of Bank and any affiliate of Bank that the Board deems necessary to determine and enforce compliance with the IBA, the Bank Holding Company Act of 1956, as amended, and other applicable Federal law, to the extent permitted by law. The Board has reviewed relevant provisions of Taiwanese law and has communicated with the appropriate government authorities concerning access to information. Bank also has committed to cooperate with the Board to obtain any approvals or consents that may be needed to gain access to information that may be requested by the Board. In light of these commitments and other facts of record, and subject to the condition described below, the Board concludes that Bank has provided adequate assurances of access to any necessary information the Board may request. On the basis of all of the facts of record, and subject to the commitments made by Bank, as well as the terms and conditions set forth in this order, the Board has determined that Bank's application to establish a branch should be, and hereby is, approved. The Board may revoke such approval should any restrictions on access to information on the operations or activities of Bank and any of its affiliates subsequently interfere with the Board's ability to determine the safety and soundness of Bank's U.S. operations or the compliance by Bank or its affiliates with applicable Federal banking statutes. Approval of this application is also specifically conditioned on compliance by Bank with the commitments made in connection with this application, and with the conditions contained in this order. 6 The commitments and conditions referred to above are conditions imposed in writing by the Board 6. The Board's authority to approve the establishment of the proposed branch parallels the continuing authority of the State of California to license offices of a foreign bank. The Board's approval of this application does not supplant the authority of the State of California, and its agent, the California State Banking Department, to license the proposed branch of Bank in accordance with any terms or conditions that California State Banking Department may impose. 146 Federal Reserve Bulletin • February 1993 in connection with its decision, and may be enforced in proceedings under 12 U.S.C. § 1818 or 12 U.S.C. § 1847 against Bank, its office and its affiliates. By order of the Board of Governors, effective December 18, 1992. Voting for this action: Chairman Greenspan and Governors Angell, Kelley, La Ware, Lindsey, and Phillips. Absent and not voting: Governor Mullins. JENNIFER J . JOHNSON Associate Secretary of the Board United World Chinese Commercial Bank Taipei, Taiwan Order Approving Establishment of an Agency United World Chinese Commercial Bank, Taipei, Taiwan ("Bank"), a foreign bank within the meaning of the International Banking Act ("IBA"), has applied under section 7(d) of the IBA (12 U.S.C. § 3105(d)) to establish a state-licensed agency in Los Angeles, California. A foreign bank must obtain the approval of the Board to establish a branch, agency, commercial lending company, or representative office in the United States under the Foreign Bank Supervision Enhancement Act of 1991 ("FBSEA"), which amended the IBA. Notice of the application, affording interested persons an opportunity to submit comments, has been published in a newspaper of general circulation in Los Angeles, California (Los Angeles Times, April 18, 1992). The time for filing comments has expired and no public comments were received. Bank is a privately owned commercial bank that was established in 1975.1 Bank is the 11th largest bank in Taiwan, with assets of approximately $10 billion as of year end 1991. Upon establishment of the proposed agency, Bank will be a qualifying foreign banking organization under Regulation K (12 C.F.R. 211.24(a)). Bank owns three subsidiaries in Taiwan, and currently has no offices outside of Taiwan. Bank does not engage, directly or indirectly, in any banking or nonbanking activities in the United States. Under the IBA, in order to approve an application by a foreign bank to establish an agency in the United States, the Board must determine that the foreign bank: (1) Engages directly in the business of banking outside of the United States; 1. No one shareholder owns more than 10 percent of the shares of Bank, and each shareholder holds its interest in its separate capacity. (2) Has furnished to the Board the information it needs to assess adequately the application; and (3) Is subject to comprehensive supervision or regulation on a consolidated basis by its home country supervisor (12 U.S.C. § 3105(d)(2)). The Board may also take into account additional standards as set forth in the IBA (12 U.S.C. § 3105(d)(3)-(4)) and Regulation K (12 C.F.R. 211.25(c)). Bank engages directly in the business of banking outside of the United States through its extensive commercial banking operations in Taiwan. Bank also has provided the Board with the information necessary to assess the application through submissions that address the relevant issues. Bank is supervised and regulated by both the Ministry of Finance of Taiwan ("Ministry") and the Central Bank of China ("Central Bank"), which share responsibility for the supervision of Taiwanese banks. The Banking Law of Taiwan authorizes the Ministry to regulate and supervise banks in Taiwan, including Bank. 2 The Ministry has delegated to the Central Bank authority to act as the primary examiner of banks in Taiwan, in which capacity the Central Bank conducts mandatory annual examinations. Regulation K provides that a foreign bank will be considered to be subject to comprehensive supervision or regulation on a consolidated basis if the Board determines that the bank is supervised and regulated in such a manner that its home country supervisor receives sufficient information on the worldwide operations of Bank, including the relationship of Bank to any affiliate, to assess the overall financial condition of Bank and its compliance with law and regulation (12 C.F.R. 211.25(c)(1)).3 In making its determination on this application, the Board considered the following information. 2. With respect to banks, under this authority the Ministry issues licenses, limits activities and expansion, conducts examinations, sets minimum capital and liquidity ratios, limits credit extensions, restricts director interlocks, defines qualifications for management, and takes enforcement actions. 3. In assessing this standard, the Board considers, among other factors, the extent to which the home country supervisors: (i) Ensure that the bank has adequate procedures for monitoring and controlling its activities worldwide; (ii) Obtain information on the condition of the bank and its subsidiaries and offices through regular examination reports, audit reports, or otherwise; (iii) Obtain information on the dealings with and relationship between the bank and its affiliates, both foreign and domestic; (iv) Receive from the bank financial reports that are consolidated on a worldwide basis, or comparable information that permits analysis of the bank's financial condition on a worldwide consolidated basis; (v) Evaluate prudential standards, such as capital adequacy and risk asset exposure, on a worldwide basis. These are indicia of comprehensive, consolidated supervision. No single factor is essential and other elements may inform the Board's determination. Legal Developments The Ministry and the Central Bank obtain information on the condition of Bank and its subsidiaries and foreign offices through regular examinations and periodic financial reports. The Central Bank performs mandatory annual on-site head office examinations, biannual office examinations, and, if warranted, targeted examinations of Taiwanese banks, including Bank. The Ministry coordinates these examinations and takes corrective measures based on the examination reports. The annual examination of the head office of Bank specifically includes a review of the international department and the foreign operations or offices of Bank. The review of foreign office activities of Bank includes scrutiny of host country examination reports, internal control and audit reports, and annual outside audit reports. The Ministry also is implementing annual on-site examinations of foreign offices to supplement this review. The Ministry and Central Bank obtain information on the dealings and relationship between Bank and its subsidiaries through reports to and examinations by the Central Bank and through the requirement that the Ministry approve investments in other companies. The Banking Law of Taiwan also imposes a prohibition on certain unsecured lending to companies in which a bank holds certain investments. In addition, if the examination indicates that a subsidiary poses an undue risk to Bank or is engaging in unsafe or improper activities, the Ministry may compel divestiture of the subsidiary. Bank has no parent or sister affiliates. With respect to foreign offices, the Ministry must approve the establishment of such offices by Bank. The Ministry and the Central Bank have also required Bank to establish procedures under which a foreign office must obtain head office approval of certain transactions and must undergo an annual internal audit. The Central Bank evaluates the adequacy of these procedures and the records of approved transactions during the annual examination of Bank's head office. With respect to subsidiaries of Bank, the Ministry and the Central Bank ensure that Bank has adequate oversight procedures through the annual head office examination. Bank holds corporate records of its subsidiaries, which include financial information, at its head office. Examiners review these records during the annual examination. The Ministry and the Central Bank evaluate prudential standards, such as capital adequacy and risk asset exposure, for Bank on a worldwide basis. The government of Taiwan incorporated the risk-based capital standards of the Basle Accord into its Banking Law in 1989. The Ministry implemented these standards to restrict all dividends and other distributions by any 147 Taiwanese bank that has a risk-weighted capital ratio of less than 8 percent. Bank's accounting practices require consolidation of its majority-owned subsidiaries, which is reflected in its risk-weight calculations. Based on all the facts of record, the Board concludes that Bank is subject to comprehensive supervision and regulation on a consolidated basis. In considering this application, the Board has also taken into account the additional standards set forth in section 7 of the IBA (12 U.S.C. 3105(d)(3)-(4)). As noted above, Bank has received the consent of its home country authorities to establish the proposed agency. In addition, the Ministry may share information on Bank's operations with other supervisors, including the Board. As noted, under local regulation, Bank must comply with the capital standards of the Basle Accord, as implemented by Taiwan. Bank's capital exceeds the minimum standards and is equivalent to capital that would be required of a U.S. banking organization. Managerial and other financial resources of Bank are also considered consistent with approval. Although the proposed agency would be Bank's first office outside its home country, the purpose of the office is generally to serve the international banking needs of its customers, and Bank appears to have the experience and capacity to support this activity. Bank has established controls and procedures for the proposed agency to ensure compliance with U.S. law. Under the IBA, the proposed state-licensed branch may not engage in any type of activity that is not permissible for a federally-licensed branch without the Board's approval. Finally, Bank has committed that it will make available to the Board such information on the operations of Bank and any affiliate of Bank that the Board deems necessary to determine and enforce compliance with the IBA, the Bank Holding Company Act of 1956, as amended, and other applicable Federal law, to the extent permitted by law. The Board has reviewed relevant provisions of Taiwanese law and has communicated with the appropriate government authorities concerning access to information. Bank has committed to cooperate with the Board to obtain any approvals or consents that are needed to gain access to information that may be requested by the Board. In light these commitments and other facts of record, and subject to the condition described below, the Board concludes that Bank has provided adequate assurances of access to any necessary information the Board may request. On the basis of all of the facts of record, and subject to the commitments made by Bank, as well as the terms and conditions set forth in this order, the Board has determined that Bank's application to establish an 148 Federal Reserve Bulletin • February 1993 agency should be, and hereby is, approved. The Board may revoke such approval should any restrictions on access to information on the operations or activities of Bank and any of its affiliates subsequently interfere with the Board's ability to determine the safety and soundness of Bank's U.S. operations or the compliance by Bank or its affiliates with applicable federal banking statutes. Approval of this application is specifically conditioned on compliance by Bank with the commitments made in connection with this application, and with the conditions contained in this order. 4 The commitments and conditions referred to above are conditions imposed in writing by the Board in connection with its decision, and may be enforced in proceedings under 12 U.S.C. § 1818 or 12 U.S.C. § 1847 against Bank, its office and its affiliates. By order of the Board of Governors, effective December 18, 1992. Voting for this action: Chairman Greenspan and Governors Angell, Kelley, LaWare, Lindsey, and Phillips. Absent and not voting: Governor Mullins. JENNIFER J . JOHNSON Associate Secretary of the Board ACTIONS INSURANCE TAKEN UNDER CORPORATION THE FEDERAL IMPROVEMENT DEPOSIT ACT By the Board December 22, 1992 John H. Huffstutler, Esq. Assistant General Counsel BankAmerica Corporation Bank of America Center, Box 37,000 San Francisco, California 94137 BankAmerica has requested Board approval of this transaction pursuant to section 5(d)(3) of the Federal Deposit Insurance Act (12 U.S.C. § 1815(d)(3) ("FDI Act")), as amended by the Federal Deposit Insurance Corporation Improvement Act of 1991 (Pub. L. 102242, § 501, 105 Stat. 2236, 2388-2392 (1991)). Section 5(d)(3) of the FDI Act requires the Board to follow the procedures and consider the factors set forth in the Bank Merger Act (12 U.S.C. § 1828(c)). 12 U.S.C. § 1815(d)(3)(E).1 BankAmerica is the seventh largest commercial banking organization in Texas, controlling deposits of $4.2 billion, representing 2.9 percent of total deposits in commercial banking organizations in the state. First Gibraltar is the largest thrift organization in Texas, controlling deposits of $6.2 billion, representing 16.6 percent of total deposits in thrift institutions in the state. Upon consummation of the proposed transaction, BankAmerica would become the fourth largest commercial banking or thrift organization (together, "depository institutions") in Texas, controlling deposits of $10.6 billion, representing 6.9 percent of total deposits in depository institutions in the state. BankAmerica and First Gibraltar compete in the Cooke, Corpus Christi, Dallas, Fort Worth, Houston, Killeen-Temple MSA, San Antonio, Sherman-Denison and Wichita banking markets, all in Texas. In the Cooke banking market, 2 BankAmerica is the third largest of ten depository institutions, controlling deposits of $55.3 million, representing approximately 12.9 percent of total deposits in depository institutions in the market ("market deposits"). 3 First Gibraltar controls deposits of $89.0 million. With thrift deposits in the market weighted at 50 percent, 4 First Gibraltar is the fifth largest depository institution in the market, holding approximately 10.4 percent of market deposits. Upon consummation of this proposal, BankAmerica would control $144.3 million in deposits, representing approximately 30.5 percent of market deposits. 5 Dear Mr. Huffstutler: BankAmerica Corporation, San Francisco, California, ("BankAmerica"), has proposed to purchase certain assets and assume certain liabilities of First Gibraltar Bank, FSB, Irving, Texas ("First Gibraltar"), through BankAmerica's wholly owned bank subsidiary, Bank of America Texas, N.A., Houston, Texas, ("Bank"). 4. The Board's authority to approve the establishment of the proposed agency parallels the continuing authority of the State of California to license offices of a foreign bank. The Board's approval of this application does not supplant the authority of the State of California, and its agent, the California State Banking Department, to license the proposed agency of Bank in accordance with any terms or conditions that California State Banking Department may impose. 1. These factors include considerations relating to competition, financial and managerial resources, and future prospects of the existing and proposed institutions, and the convenience and needs of the communities to be served. 12 U.S.C. § 1828(c). 2. The Cooke banking market is approximated by Cooke County and the northern portion of Denton County, including the towns of Aubrey, Pilot Point and Sanger, all in Texas. 3. Deposit data are as of June 30, 1991. 4. See, e.g., First Hawaiian, Inc., 11 Federal Reserve Bulletin 52, 55 (1991); First Union Corporation, 76 Federal Reserve Bulletin 83,85 (1990). 5. Because the deposits of First Gibraltar would be transferred to a commercial bank under BankAmerica's proposal, those deposits are included at 100 percent after Bank's assumption of these deposits. See First Banks, Inc., 76 Federal Reserve Bulletin 669 , 670 n.9 (1990); Norwest Corporation, 78 Federal Reserve Bulletin 452 (1992). Legal Developments The Herfindahl-Hirschman Index ("HHI") for this market would increase by 432 points to 1947.6 Seven commercial banking organizations, including two other than Bank with market shares of over 20 percent, and two thrift institutions would continue to operate in the Cooke banking market following consummation of the proposal. In addition, Bank's branch in the Cooke banking market has suffered a substantial loss of deposits since Bank acquired the branch from a troubled thrift institution. 7 The Cooke banking market also has a number of features that make it attractive to entry, 8 and Texas allows interstate banking and intrastate branching, providing for a large number of potential entrants into the market. In light of the number and size of competitors remaining in the Cooke banking market, the market's attractiveness to entry, the number of potential entrants into the market, and other facts of record in this case, the Board concludes that consummation of this proposal would not have a significantly adverse effect on competition or the concentration of banking resources in the Cooke banking market. The Board also concludes that consummation of this proposal would not have a significantly adverse effect on competition in any of the other relevant banking markets. 9 6. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is above 1800 is deemed to be highly concentrated. In such markets, the Justice Department is likely to challenge a merger that increases the HHI by more than 50 points. However, the Justice Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Justice Department has stated that the higher-than-normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limited-purpose lenders and other non-depository financial institutions. 7. As of August 31, 1992, Bank's deposits in the Cooke banking market were $37.1 million, a decline of 18.7 percent since March 31, 1992. 8. Cooke County's population increased by 12.5 percent between 1980 and 1990 and is projected to grow 5.8 percent between 1990 and 1995. In addition, Denton County, the northern portion of which is in the Cooke banking market, had a population increase of 98.1 percent from 1980 to 1990 and is projected to grow 17.9 percent from 1990 to 1995. 9. In the Corpus Christi banking market, BankAmerica would become the third largest depository institution, holding 12.5 percent of market deposits, and the HHI would increase by 48 points to 954. BankAmerica would become the third largest depository institution in the Dallas banking market, holding 8.5 percent of market deposits, and the HHI would increase by 2 points to 1123. In the Fort Worth banking market, BankAmerica would become the second largest depository institution, holding 12.8 percent of market deposits, and the HHI would increase by 69 points to 774. BankAmerica would become the sixth largest depository institution in the Houston banking market, holding 6.3 percent of market deposits, and the HHI would decrease by 6 points to 762. In the Killeen-Temple MSA banking market, BankAmerica would become the tenth largest depository institution, holding 4.4 percent of market deposits, and the HHI would decrease by 11 points to 906. BankAmerica would become the third largest depository institution in the San Antonio banking market, 149 The Board is also required under section 5(d)(3) of the FDI Act to consider the effect of the proposal on the convenience and needs of the communities to be served. In considering the convenience and needs factor, the Board has considered all comments submitted to the Board in connection with this application, including comments submitted by the Association of Community Organizations for Reform Now ("ACORN"), Illinois chapter of ACORN, Michigan chapter of ACORN, City of West Hollywood, Communities for Accountable Reinvestment, Rainbow Bridge and California Reinvestment Committee (collectively, "Commenters"). Commenters generally allege that the proposed transaction is inconsistent with a finding that BankAmerica is satisfactorily meeting the convenience and needs of the communities it will serve because: (1) BankAmerica's lead bank, Bank of America National Trust and Savings Association, San Francisco, California ("Bank of America"), controls Bank's lending decisions, originates many of its loans, and uses products that are not suited to lowand moderate-income communities outside of California; (2) BankAmerica will not continue certain of First Gibraltar's lending programs; (3) BankAmerica has not abided by certain commitments that it made to community groups in connection with its recent application to acquire Security Pacific Corporation, San Francisco, California ("Security Pacific"); 10 and (4) BankAmerica discriminates11 on the basis of race in its lending in Arizona and California, 12 and has holding 11.1 percent of market deposits, and the HHI would increase by 22 points to 1103. In the Sherman-Denison banking market, BankAmerica would become the largest depository institution, holding 21.5 percent of market deposits, and the HHI would increase by 205 points to 1130. BankAmerica would become the fourth largest depository institution in the Wichita banking market, holding 10.2 percent of market deposits, and the HHI would increase by 14 points to 1072. 10. See BankAmerica Corporation, 78 Federal Reserve Bulletin 338 (1992). 11. One Commenter stated that BankAmerica had an inadequate record of hiring black executives. The Board believes that the adequacy of a group's representation at a bank is generally beyond the scope of factors that may be assessed by the Board under section 5(d)(3) of the FDI Act. 12. Commenters also allege that First Gibraltar discriminates on the basis of race in its lending in Texas and that BankAmerica has failed to provide data as required by the Home Mortgage Disclosure Act, 12 U.S.C. § 2801 ("HMDA"). BankAmerica has provided its 1991 HMDA data and other relevant data to ACORN and other community groups in a form required by the Board's regulations, 12 C.F.R. Part 203. Bank was not required to submit HMDA data for 1991, the last year for which HMDA data is available, because Bank was formed in May, 1991 through the acquisition of deposit accounts of failed thrifts. BankAmerica's HMDA data for 1991 is now publicly available. 150 Federal Reserve Bulletin • February 1993 contributed to disinvestment in low- and moderateincome communities in these states. 13 In assessing the impact of this proposal on the convenience and needs of communities in Texas, the Board has also considered the programs that BankAmerica has already put in place to serve community needs in Texas, and the programs that BankAmerica proposes to implement in Texas in connection with this acquisition. In addition, the Board has taken into account the past record of performance of the BankAmerica organization under the Community Reinvestment Act ("CRA") and its proposal to implement CRA programs at Bank. The Board notes that BankAmerica began operating in Texas in 1991 through the acquisition of the assets and liabilities of a failed bank and two failed savings associations. As a result of discussions with the Texas chapter of ACORN and other community groups, Bank is offering, through Bank of America, a special version of its Neighborhood Advantage Program called the Neighborhood Advantage Texas Homebuyer Program. 14 To begin immediate implementation of the Neighborhood Advantage Texas Homebuyer Program, BankAmerica has funded this program through extensions of credit by Bank of America using loan officers in Texas who accept and review residential real estate applications in Texas. These local loan officers review the applications under credit policies and procedures that take into account the characteristics of the Texas market. Credit review for loans in Texas includes a three-tier process whereby any Neighborhood Advantage or BASIC loan application that is declined by the line underwriter is reviewed by the credit administrator at the loan center. If the credit administrator also determines not to grant the loan, the loan is reviewed by the real estate or consumer lending manager in Texas in consultation with Bank's chief credit officer. BankAmerica intends to transfer funding and full responsi- 13. Commenters also state that the proposal is not in the public interest because BankAmerica will be taking advantage of prior federal subsidies that First Gibraltar has received. The Board notes that the terms of the proposed purchase and assumption transaction were negotiated on an arm's-length basis between two private parties and that BankAmerica is not receiving any federal assistance in connection with this proposal. 14. Under this program, special features are available to loan applicants who complete a mandatory 6 to 8 hours of homebuyer education, including expanded debt ratios; a waiver of the traditional two-month reserve for principal, interest, taxes and insurance; and acceptance of "fair" appraisal ratings for properties that might not otherwise qualify. Bank also offers a consumer loan program called BASIC that provides for direct extensions of credit for the purchase of used and new automobiles by low-income households. Bank has also indicated that it will provide a $5 million allocation for loans that do not meet Neighborhood Advantage guidelines, including requiring no private mortgage insurance on loans of up to 95 percent loan-to-value. bility for the Neighborhood Advantage Program to Bank in mid-1993.15 Bank offers a low-cost checking account called Limited Checking Account. 16 Bank has also agreed, subject to satisfactory credit review, to deposit $100,000 in the credit union of Common Ground, Dallas, Texas, which serves low-income residents of West and South Dallas. Bank also makes grants, through BankAmerica Foundation, to nonprofit organizations in Texas working to improve housing and economic conditions in the communities Bank serves. Bank has represented that its strategy following the proposed transaction will be to focus primarily on consumer and small business markets in Texas. In this regard, Bank would acquire approximately $700 million in Texas consumer loans from First Gibraltar. Following the proposed acquisition, BankAmerica will bring other resources to the communities that First Gibraltar currently serves. For example, Bank of America State Bank, Concord, California ("BA State Bank"), is planning to open an office in Texas to service referrals from Bank for special affordable housing, SB A and economic development financing.17 Bank has announced that following the acquisition of First Gibraltar, Bank will have a 10-year, $1 billion goal in CRA-related lending.18 The Board has also taken into account its recent review of the CRA performance of BankAmerica and all of its subsidiary banks, including those banks in Texas, California and Arizona, in connection with BankAmerica's acquisition of Security Pacific, which was approved by the Board in March of this year. In that case, the Board's review of the record of performance of BankAmerica was supplemented by four public hearings that the Board held in California, 15. BankAmerica has indicated that it is providing mortgage loans to Bank's Texas community through its lead bank in California because Bank was only recently established in connection with the acquisition of deposits and branches of failed Texas financial institutions and does not yet have the infrastructure to make such loans. BankAmerica expects to transfer all of its mortgage lending in Texas to Bank soon. 16. The account provides for a monthly service fee of $3.00, offers 10 free checks a month, and may be opened with a minimum of $25.00. 17. Bank has also represented that under its Branch Consolidation, Relocation and Closure Policy, it will not close a branch in a low-income community if Bank is the only provider of financial services in the community. Customers of branches located in lowincome neighborhoods will receive at least 90 days advance notice of branch consolidations and closures. 18. BankAmerica has indicated that Bank will not continue First Gibraltar's Community Homebuyer Program and Affordable Housing Program, which were offered in connection with First Gibraltar's membership in the Federal Home Loan Bank System ("FHLBS"). Following the acquisition, BankAmerica will not be a member of the FHLBS. However, BankAmerica has already begun implementing its own programs to provide mortgage lending to low- and moderateincome communities in Texas, including the Neighborhood Advantage Program, and has committed to implement that program fully in Texas through Bank. Legal Developments Washington and Arizona. The Board notes that Bank of America has received an "outstanding" rating for CRA performance from its primary regulator, the Office of the Comptroller of the Currency ("OCC"), in its most recent examination for CRA performance in October 1990. All of the other subsidiary banks of BankAmerica, including its subsidiary in Arizona, have received at least a "satisfactory" rating from their primary regulators in their most recent examinations for CRA performance. 19 First Gibraltar received an "outstanding" CRA rating from its primary regulatory, the Office of Thrift Supervision, in January 1991. In none of these examinations was any evidence of illegal discrimination found. BankAmerica has committed to implement its corporate CRA program at Bank following consummation of this proposal. 20 Protestants have raised questions regarding whether BankAmerica has fully implemented commitments it made to the Board regarding its CRA performance in connection with the acquisition earlier this year of Security Pacific. BankAmerica has taken a number of significant steps to comply with those commitments. For example, in California, Bank of America has established $90 million in special allocations for credit-worthy Neighborhood Advantage and/or minority applicants who do not meet the Neighborhood Advantage guidelines for mortgage loans. In addition, Bank of America is now offering financial incentives for loan officers to originate loans to creditworthy minority and low-income applicants, and now requires a three-step review process for all declined minority and low-income census tract mortgage loan applications. 21 Bank of America has represented that as a result of these and other efforts, 22 19. The OCC is currently conducting the first CRA examination of Bank. 20. Under the program, Bank's CRA program would be coordinated by its Community Development Officer. The Community Development Officer supervises a team of six Neighborhood Development Officers ("NDOs") throughout Texas. Four of the NDOs are black, while two are Hispanic. With the guidance of the NDOs, district managers, branch managers and other branch personnel make monthly calls to identified census tracts and neighborhoods to identify credit needs. This information is compiled and presented monthly to senior management and quarterly to the board of directors. 21. Bank of America has also replaced Security Pacific's checking account aimed at government assistance recipients with its own Limited Checking Account, available to all customers for $3.50 per month, and has represented that it stands ready to invest $200,000 in a new South Central Los Angeles Federal Community Development Credit Union when it becomes operational. Bank of America has also increased its marketing to low- and moderate-income and minority communities through a radio, newspaper and billboard campaign. Approximately one-third of Bank of America's branches are in low-income census tracts. 22. Bank of America has replaced Security Pacific's small business lending program with a new product, Advantage Business Credit, which includes loans and lines of credit of up to $50,000. In addition, Bank of America established a pool of $25.0 million for unsecured 151 its loans in low- and moderate-income areas have increased. 23 BankAmerica's banks in other states also have taken steps to comply with their commitments. For example, Bank of America Arizona, Phoenix, Arizona ("BA Arizona"), has made 265 loans totaling approximately $10.6 million to low-income individuals during the first six months of 199224 and offers the Neighborhood Advantage Program in four different forms. 25 In Washington state, Seattle-First National Bank, Seattle, Washington ("Seafirst"), has continued to support the Washington Housing Finance Commission ("WHFC") for multi-family and special needs housing loans by investing directly in tax credits through the Low Income Housing Tax Credit Program. 26 In Nevada, Valley Bank of Nevada, Las Vegas, Nevada, has recently completed negotiations with Nevada community coalitions regarding the expansion of the Neighborhood Advantage Program in Nevada, and is continuing its efforts to establish a branch in West Las Vegas, Nevada. 27 The Board believes that, during the eight months since its acquisition of Security Pacific, BankAmerica has demonstrated steady progress in fulfilling the commitments it made to the Board in connection with its application to acquire Security Pacific. The Board expects BankAmerica to fulfill all of the commitments it made to the Board including all of the steps and programs that BankAmerica committed to implement in connection with its acquisition of Security Pacific. The Federal Reserve System will continue to monitor carefully BankAmerica's efforts in this area. loans of up to $100,000 to merchants who suffered damages in the Los Angeles disturbances of April 29 and 30, 1992. To date, 487 loans totaling $21.9 million have been committed. 23. During the first six months of 1992, Bank of America made $562 million in loans to all low-income census tracts in California, as compared to $586 million for all of 1991, $482 million for 1989, and $165 million for 1988. 24. BankAmerica has represented that this figure does not include loans made to middle- and upper-income loan applicants who reside in predominately low-income zip code areas. BA Arizona extended during the first six months of 1992 approximately $2.4 million in loans under the SBA and other special small business loan programs and approximately $8.2 million in conventional small business loans of under $50,000. 25. These are: a geographically-based 90 percent loan-to-value loan product, a geographically-based 95 percent loan-to-value loan product, an income-based product at both 90 percent and 95 percent loan-to-value, and a downpayment assistance program. In addition, BA Arizona has offered, as a special promotion of its Neighborhood Advantage Program, to waive fees associated with the application, including credit report and appraisal fees, for loan applicants in low-income census tracts. 26. Seafirst has purchased $1.2 million in tax credits to date and has also lent $4 million through the WHFC's House Key '92 program for first time home buyers. Seafirst has provided $1.1 million in funds through WHFC's Small Tax Exempt Purchase Program. Seafirst also earlier this year announced a $2 million loan program for nonprofit organizations in the city of Tacoma. 27. Valley Bank of Nevada has also expanded its Homeless Check Cashing Program. 152 Federal Reserve Bulletin • February 1993 Based on these and other facts of record, the Board concludes that convenience and needs considerations, including the record of BankAmerica and Bank under the CRA, are consistent with approval of this application. 28 The Board also concludes that the financial and managerial resources and future prospects of BankAmerica and Bank are consistent with approval of this application. Moreover, the record in this case shows that: (1) The transaction will not result in the transfer of any federally insured depository institution's federal deposit insurance from one federal deposit insurance fund to the other; (2) BankAmerica and Bank currently meet, and upon consummation of the proposed transaction will continue to meet, all applicable capital standards; and (3) Since Bank is in Texas and is acquiring certain assets and assuming certain liabilities of a Texas federal savings bank, the proposed transaction would comply with the Douglas Amendment if First Gibraltar were a state bank that BankAmerica was applying to acquire directly. See 12 U.S.C. § 1815(d)(3). Based on the foregoing and all of the facts of record, the Board has determined that this application should be, and hereby is, approved. 29 This approval is subject to Bank obtaining the required approval of the appropriate Federal banking agency for the proposed merger under the Bank Merger Act. The Board's approval of this application also is conditioned upon BankAmerica's compliance with the commitments made in connection with this application. For purposes of this action, the commitments and conditions relied on in reaching this decision are both conditions imposed in writing by the Board and, as such, may be enforced in proceedings under applicable law. This approval is limited to the proposal presented to the Board by BankAmerica, and may not be construed as applying to any other transaction. This transaction may not be consummated before the thirtieth calendar day after the effective date of this letter, or later than three months after the effective date of this letter, unless such period is extended by the Board or the Federal Reserve Bank of San Francisco, acting pursuant to delegated authority. In connection with this provision, advice of the fact of consummation should be given in writing to the Reserve Bank. Very truly yours, 28. One Commenter requested that the Board reopen the public comment period to permit the consideration of Commenter's appeal under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, for certain portions of the application that were withheld from Commenter as confidential under the FOIA. In light of the fact that the comment period was previously extended two weeks in order to give Commenter an opportunity to submit comments, Commenter's delay in filing the appeal, and other facts of record, the Board has denied Commenter's request to reopen the public comment period. Commenters have requested that the Board hold a public hearing or meeting in this case. Neither section 5(d)(3) of the FDI Act nor the Bank Merger Act provide for or require the Board to hold a public meeting or public hearing on applications presented to the Board pursuant to these provisions. In evaluating this request, the Board has considered that Commenters have been provided an opportunity to submit written comments to the Board, and have in fact submitted substantial written comments. In addition, as noted above, the Board recently held four public meetings in California, Washington and Arizona to assess the performance of BankAmerica under the CRA. In light of these facts and all the facts of record, including relevant examination information, the Board believes that a public hearing or meeting is not warranted in this case, and has denied this request. JENNIFER J . JOHNSON Associate Secretary of the Board cc: Federal Reserve Bank of San Francisco Tom Hesselbrock, Federal Deposit Insurance Corporation Office of the Comptroller of the Currency Department of Justice 29. Voting for this action: Chairman Greenspan and Governors Angell, Kelley, LaWare, Lindsey, and Phillips. Absent and not voting: Governor Mullins. Legal Developments ACTIONS 1991 TAKEN UNDER THE FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT 153 ACT OF By the Director of the Division of Banking Supervision and Regulation and the General Counsel of the Board Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Bank Holding Company Acquired Thrift AmSouth Bancorporation, Birmingham, Alabama Secor Bank, F.S.B., Birmingham, Alabama Fifth Third Bancorp, Cincinnati, Ohio Home Savings of America, F.S.B., Irwindale, California Champion Federal Savings and Loan Association, Bloomington, Illinois First of America Bank Corporation, Kalamazoo, Michigan First Union Corporation, Charlotte, North Carolina Fishback Insurance Agency, Inc., Brookings, South Dakota Stichting Prioriteit ABN AMRO Holding, The Netherlands Stichting Administratiekantoor ABN AMRO Holding, The Netherlands ABN AMRO Holding, N.V., The Netherlands ABN AMRO Bank N.V., The Netherlands ABN AMRO North America, Inc., Chicago, Illinois LaSalle National Corporation, Chicago, Illinois Valley National Bancorp, Wayne, New Jersey Decatur Federal Savings and Loan Association, Decatur, Georgia Home Trust Savings and Loan Association, Vermillion, South Dakota LaSalle Talman Bank, Chicago, Illinois Mayflower Savings Bank, SLA, Livingston, New Jersey Surviving Bank(s) AmSouth Bank, N.A., Birmingham, Alabama Fifth Third Bank, Cincinnati, Ohio First of America Bank-McLean County, N.A., Bloomington, Illinois First Union National Bank of Georgia, Atlanta, Georgia First National Bank in Brookings, Brookings, South Dakota LaSalle Bank Northbrook, Northbrook, Illinois Valley National Bank, Passaic, New Jersey Approval Date December 17, 1992 December 8, 1992 December 4, 1992 December 2, 1992 December 18, 1992 December 22, 1992 December 23, 1992 154 Federal Reserve Bulletin • February 1993 APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Applicant(s) Effective Date Bank(s) Puget Sound Bancorp, Tacoma, Washington KeyCorp, Albany, New York December 17, 1992 Section 4 Applicant(s) Effective Date Bank(s) SouthTrust Corporation, Birmingham, Alabama Prime Bancshares, Inc., Decatur, Georgia December 18, 1992 Sections 3 and 4 Integra Financial Corporation, Pittsburgh, Pennsylvania APPLICATIONS APPROVED Effective Date Bank(s) Applicant(s) Equimark Corporation, Pittsburgh, Pennsylvania UNDER BANK HOLDING COMPANY December 1, 1992 ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Section 3 Applicant(s) Banc West, Inc., Edmond, Oklahoma BOI Financial Corp., Normal, Illinois Bank(s) Leedey Bancorporation, Inc., Leedey, Oklahoma Thomas Bancshares, Inc., Thomas, Oklahoma Bank of Illinois in Normal, Normal, Illinois Reserve Bank Effective Date Kansas City December 4, 1992 Chicago December 18, 1992 Legal Developments 155 Section 3—Continued Applicant(s) Button Gwinnett Bancorp, Inc., Snellville, Georgia CBI-Kansas, Inc., Kansas City, Missouri Centennial Bank Holdings, Inc., Denver, Colorado CNB Financial Corp., Canajoharie, New York Comerica Incorporated, Detroit, Michigan Commerce Bancshares, Inc., Kansas City, Missouri El Paso Bancshares, Inc., Monument, Colorado Farmers National Bancshares, Inc., Stafford, Kansas First Busey Corporation, Urbana, Illinois First Fabens Bancorporation, Inc., Fabens, Texas Fourth Financial Corporation, Wichita, Kansas Franklin Bancorp, Inc., Minneapolis, Minnesota GAB Bancorp, Jasper, Indiana Reserve Bank Bank(s) The Gwinnett Financial Corporation, Lawrenceville, Georgia Union Financial Corporation, Manhattan, Kansas Eaton Capital Corporation, Eaton, Colorado Colorado Industrial Bank, Eaton, Colorado Central National Bank, Canajoharie, Canajoharie, New York Sugar Creek National Bank, Sugar Land, Texas Manufacturers Bancorp, Inc., Leavenworth, Kansas First National Bank of Bonner Springs, Bonner Springs, Kansas Lenexa Bancorporation, Inc., Lenexa, Kansas Union Financial Corporation, Manhattan, Kansas Western Bank, Taos, New Mexico The Farmers National Bank, Stafford, Kansas Empire Capital Corporation, LeRoy, Illinois Bancshares of Ysleta, Inc., El Paso, Texas Bank of Ysleta, El Paso, Texas Southgate Banking Corporation, Prairie Village, Kansas Park Financial of St. Paul, Inc., St. Paul, Minnesota Unibancorp, Loogootee, Indiana Effective Date Atlanta December 15, 1992 Kansas City November 27, 1992 Kansas City December 21, 1992 New York December 1, 1992 Chicago December 3, 1992 Kansas City November 27, 1992 Kansas City November 30, 1992 Kansas City December 1, 1992 Chicago December 24, 1992 Dallas December 1, 1992 Kansas City December 21, 1992 Minneapolis December 24, 1992 St. Louis December 24, 1992 156 Federal Reserve Bulletin • February 1993 Section 3—Continued Applicant(s) Harlingen Bancshares, Inc., Harlingen, Texas HN Bancshares of Delaware, Inc., Wilmington, Delaware Norwest Corporation, Minneapolis, Minnesota Omnibank Corporation, River Rouge, Michigan Peoples Mid-Illinois Corporation, Bloomington, Illinois PMI Acquisition Corporation, Bloomington, Illinois Random Lake Bancorp., Limited, Random Lake, Wisconsin U B & T Holding Co., Abilene, Texas Union Planters Corporation, Memphis, Tennessee VSB Bancorp, Inc., Closter, New Jersey Reserve Bank Bank(s) Harlingen National Bancshares, Inc., Harlingen, Texas Harlingen National Bank, Harlingen, Texas Merchants & Miners Bancshares, Inc., Hibbing, Minnesota Omnibank, River Rouge, Michigan Lexington Bancshares, Inc., Lexington, Illinois Lexington Bancshares, Inc., Lexington, Illinois State Bank of Random Lake, Random Lake, Wisconsin United Bank & Trust, Abilene, Texas Bank of East Tennessee, Knoxville, Tennessee Valley Savings Bank, SLA, Closter, New Jersey Effective Date Dallas December 3, 1992 Minneapolis December 17, 1992 Chicago December 3, 1992 Chicago December 21, 1992 Chicago December 21, 1992 Chicago December 18, 1992 Dallas December 15, 1992 St. Louis December 1, 1992 New York December 1, 1992 Section 4 Applicant(s) Banc One Corporation, Columbus, Ohio PNC Financial Corp, Pittsburgh, Pennsylvania Society Corporation, Cleveland, Ohio Brooke Holdings, Inc., Jewell, Kansas Brooke Corporation, Jewell, Kansas Consolidated Holding Company, Oldham, South Dakota Nonbanking Activity/Company Reserve Bank Effective Date Electronic Payments Services, Inc., Wilmington, Delaware Cleveland November 30, 1992 Mid Kansas Insurance Agency, Inc., Wichita, Kansas Kansas City December 23, 1992 Farmers Investment Company, Olkham, South Dakota Minneapolis December 22, 1992 Legal Developments 157 Section 4—Continued Applicant(s) CoreStates Financial Corp, Philadelphia, Pennsylvania Credit Commercial de France, Paris, France Mellon Bank Corporation, Pittsburgh, Pennsylvania Credit Commercial de France S.A., Paris, France The First National Bank of Boston, Boston, Massachusetts First Tennessee National Corporation, Memphis, Tennessee First Union Corporation, Charlotte, North Carolina Mellon Bank Corporation, Pittsburgh, Pennsylvania Norwest Corporation, Minneapolis, Minnesota Norwest Corporation, Minneapolis, Minnesota Peoples Financial Services, Inc., Cookeville, Tennessee Society Corporation, Cleveland, Ohio Southern Bank Group, Inc., Roswell, Georgia Union Planters Corporation, Memphis, Tennessee Nonbanking Activity/Company Electronic Payment Services, Inc., Wilmington, Delaware CCF-Mellon Partners, Pittsburgh, Pennsylvania Pilgrim Baxter Grieg Framlington & Associates Ltd., Wayne, Pennsylvania BancBoston Leasing Services, Inc., Boston, Massachusetts Home Financial Corporation, Johnson City, Tennessee DFSoutheastern, Inc., Decatur, Georgia to engage in investment advisory activities Comprehensive Computer Solutions, Inc., Spring Valley, New York to engage de novo in community activities through its investment in limited partnerships that qualify for low-income tax credits under the Internal Revenue Code Citizens Federal Savings Bank, Rockwood, Tennessee First Federal Savings and Loan Association of Fort Myers, Fort Myers, Florida Eastside Bank and Trust Company, Snellville, Georgia SaveTrust Federal Savings Bank, Dyersburg, Tennessee Reserve Bank Effective Date Philadelphia November 30, 1992 New York December 11, 1992 New York December 18, 1992 Boston December 24, 1992 St. Louis December 9, 1992 Richmond December 2, 1992 Cleveland December 11, 1992 Minneapolis December 17, 1992 Minneapolis December 17, 1992 Atlanta December 17, 1992 Cleveland November 25, 1992 Atlanta December 18, 1992 St. Louis December 2, 1992 158 Federal Reserve Bulletin • February 1993 Section 4—Continued Applicant(s) Union Planters Corporation, Memphis, Tennessee U.S. Trust Corporation, New York , New York Wishek Bancorporation, Inc. Wishek, North Dakota APPLICATIONS APPROVED Nonbanking Activity/Company Security Trust Federal Savings and Loan Association, Knoxville, Tennessee Campbell, Cowperthwaite & Co., Inc., New York , New York to engage in direct lending to nonshareholders and noninsiders up to an aggregate amount of $250,000 UNDER BANK MERGER Reserve Bank Effective Date St. Louis December 2, 1992 New York December 1, 1992 Minneapolis November 25, 1992 ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Applicant(s) Bank of Neosho, Neosho, Missouri Belcaro Bank, Glendale, Colorado Community Bank and Trust Company, Forest City, Pennsylvania First United Bank, Aurora, Colorado Granby Bancshares, Inc., Neosho, Missouri Bank(s) Anderson State Bank, Anderson, Missouri Citizens State Bank, Granby, Missouri Denver Tec Bank, Denver, Colorado The Professional Bank of Colorado, Englewood, Colorado First National Bank of Nicholson, Nicholson, Pennsylvania The Bank of Parker, Parker, Colorado Anderson Bancshares, Inc., Neosho, Missouri Neosho Bancshares, Inc., Neosho, Missouri Reserve Bank Effective Date Kansas City December 16, 1992 Kansas City December 16, 1992 Philadelphia December 17, 1992 Kansas City December 23, 1992 Kansas City December 16, 1992 Legal Developments PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the Federal Reserve Banks in which the Board of Governors is not named a party. CBC, Inc. v. Board of Governors, No. 92-9572 (10th Cir., filed December 2, 1992). Petition for review of civil money penalty assessment against a bank holding company and its officers, directors, and shareholders, for failure to comply with reporting requirements. DLG Financial Corporation v. Board of Governors, No. 392 Civ. 2086-G (N.D. Texas, filed October 9, 1992). Action to enjoin the Board and the Federal Reserve Bank of Dallas from taking certain enforcement actions, and seeking money damages on a variety of tort and contract theories. On October 9, 1992, the court denied plaintiffs' motion for a temporary restraining order. On November 20, 1992, the Board filed a motion to dismiss. On December 17, 1992, plaintiffs filed an amended complaint. Castro v. Board of Governors, No. 92-1764 (D. District of Columbia, filed July 29, 1992). Freedom of Information Act case. On November 30, 1992, the action was dismissed on plaintiff's motion. Board of Governors v. bin Mahfouz, No. 92-CIV-5096 (S.D. New York, filed July 8, 1992). Action to freeze assets of individual pending administrative adjudication of civil money penalty assessment by the Board. On July 8, 1992, the court issued a temporary restraining order restraining the transfer or disposition of the individual's assets. On October 30, the parties filed a stipulation of dismissal without prejudice. Zemel v. Board of Governors, No. 92-1057 (D. District of Columbia, filed May 4, 1992). Age Discrimination in Employment Act case. Fields v. Board of Governors, No. 92-3920 (6th Cir., filed September 14, 1992). Federal Tort Claims Act complaint alleging misrepresentation during application process. The district court for the Northern District of Ohio granted the Board's motion to dismiss on August 10, 1992. On September 14, 1992, the plaintiff filed a notice of appeal. The action was voluntarily dismissed by plaintiff/appellant on December 18, 1992. State of Idaho, Department of Finance v. Board of Governors, No. 92-70107 (9th Cir., filed February 159 24, 1992). Petition for review of Board order returning without action a bank holding company application to relocate its subsidiary bank from Washington to Idaho. The Board's brief was filed on June 29, 1992. Oral argument was held October 6, 1992. In re Subpoena Served on the Board of Governors, Nos. 91-5427, 91-5428 (D.C. Cir., filed December 27, 1991). Appeal of order of district court, dated December 3, 1991, requiring the Board and the Office of the Comptroller of the Currency to produce confidential examination material to a private litigant. On June 26, 1992, the court of appeals affirmed the district court order in part, but held that the bank examination privilege was not waived by the agencies' provision of examination materials to the examined institution, and remanded for further consideration of the privilege issue. First Interstate BancSystem of Montana, Inc. v. Board of Governors, No. 91-1525 (D.C. Cir., filed November 1, 1991). Petition for review of Board's order denying on Community Reinvestment Act grounds the petitioner's application under section 3 of the Bank Holding Company Act to merge with Commerce BancShares of Wyoming, Inc. On December 14, 1992, the court granted the parties' joint motion to dismiss the case. Board of Governors v. Kemal Shoaib, No. CV 91-5152 (C.D. California, filed September 24, 1991). Action to freeze assets of individual pending administrative adjudication of civil money penalty assessment by the Board. On October 15, 1991, the court issued a preliminary injunction restraining the transfer or disposition of the individual's assets. Board of Governors v. Ghaith R. Pharaon, No. 91CIV-6250 (S.D. New York, filed September 17, 1991). Action to freeze assets of individual pending administrative adjudication of civil money penalty assessment by the Board. On September 17, 1991, the court issued an order temporarily restraining the transfer or disposition of the individual's assets. Fields v. Board of Governors, No. 3:91CV069 (N.D. Ohio, filed February 5, 1991). Appeal of denial of request for information under the Freedom of Information Act. The Board's motion for summary judgment was granted in part and its motion to dismiss was denied on June 23, 1992. 160 Federal Reserve Bulletin • February 1993 FINAL ENFORCEMENT DECISION ISSUED BY THE BOARD OF GOVERNORS United States of America Before the Board of Governors of the Federal Reserve System Washington, D.C. In the Matter of VIC SATHER & ASSOCIATES, INC. and PAUL C. HUFNAGLE, Docket Nos. 91-017-CMP-HC 91-017-CMP-I Respondents. Final Decision and Order This is an administrative civil money penalty action brought by the Board of Governors of the Federal Reserve System (the "Board") against Respondents Vic Sather & Associates, Inc. ("VSA"), a bank holding company in Bloomington, Minnesota, and its sole officer, sole director, and principal shareholder, Paul C. Hufnagle. On May 31, 1991, under the authority of 12 U.S.C. § 1847, the Board issued Notices of Assessment of Civil Money Penalties in the amounts of $50,000 against Hufnagle and $25,000 against VSA, alleging that the Respondents had repeatedly failed to file with the Board timely or accurate regulatory reports required by statute and regulation. The Respondents requested a hearing, which was held before Administrative Law Judge Paul J. Clerman (the "ALJ") on December 3, 1991, in Minneapolis. Following the hearing and the filing of post-hearing briefs by Respondents and by the Board's Enforcement Counsel, the ALJ issued a Recommended Decision finding that the allegations in the Notices had been established and that Respondents had in fact failed to file timely and accurate reports, that the failures were not excused, and that the failures constituted violations of the Bank Holding Company Act and Regulation Y. The ALJ recommended, however, that the penalties be assessed, not in the amounts sought by Enforcement Counsel, but at the lower amounts of $5,000 against VSA and $15,000 against Hufnagle. The ALJ based the lower recommended penalties upon his findings that VSA was in "extreme financial distress" and was being sold for the benefit of a creditor, that Respondents had not received pecuniary benefit from the violations, and that Hufnagle is unlikely to return to banking "soon", and therefore does not require a higher penalty to deter him from future violations. Recommended Decision ("RD") 15. Respondents have filed no exceptions to the Recommended Decision, and are therefore deemed to have waived objection to the Recommended Decision, Findings and Conclusions. Enforcement Counsel, on the other hand, has excepted to the lower recommended penalty amounts, arguing that the initial higher penalty assessments were fully justified by the evidence produced at the hearing. 1 Statutory and Regulatory Framework The Bank Holding Company Act of 1956 (the "BHC Act") charges the Board with exclusive authority to administer the BHC Act and to issue such orders and regulations as may be necessary to enable the Board to carry out the purposes of the Act and to prevent evasions thereof. 12 U.S.C. § 1844(b). The BHC Act also specifically authorizes the Board to require reports under oath from time to time to monitor compliance with the provisions of the BHC Act and its implementing regulations and orders. 12 U.S.C. § 1844(c). The Board's Regulation Y implements this authorization by requiring that each bank holding company furnish, in the manner and form prescribed by the Board, an annual report of the company's operations, and additional information and reports as required by the Board. 12 C.F.R. 225.5(b). The instructions on Federal Reserve Form FR Y-6 require each bank holding company to submit an annual report within 90 days of the end of the company's fiscal year (the "Y-6 Report"). The instructions for Federal Reserve Form FR Y-9SP require that any bank holding company with only one subsidiary bank and consolidated assets of less than $150 million file reports for the parent company on a semiannual basis, within 45 days of the last day of June and December each year (the "Y-9 Report"). Exhibit 10 at 1, 6. The instructions also require that the bank holding company's financial records be maintained in such a manner and scope so as to ensure that the reports can be prepared and filed in accordance with the instructions and "reflect a fair presentation of the bank holding company's financial condition and results of operations." Exhibit 10 at 4. 1. Enforcement Counsel also excepts on technical grounds to several details in the ALJ's recommended conclusions of law unrelated to the issue of the penalty amount. The Board adopts each of these exceptions as technical corrections. Legal Developments The BHC Act provides for civil money penalties of up to $25,000 per day against any company which violates, and any individual who participates in a violation of any provision of the Act or of any regulation or order implementing the Act. 12 U.S.C. § 1847(b)(1). The term "violates" is defined to include "any action, (alone or with another or others) for or toward causing, bringing about, participating in, counseling, or aiding and abetting a violation." 12 U.S.C. § 1847(b)(5). The BHC Act also prescribes a separate schedule of penalties, ranging from $2,000 to $1 million per day or one percent of the assets of the company (depending on the seriousness of the violation), for any company that fails to make, submit, or publish timely reports or information required by the Board, or which submits or publishes any false or misleading report or information. 12 U.S.C. § 1847(d)(l)-(3).2 In determining the amount of any civil money penalty, the Board takes into account the appropriateness of the penalty with respect to any of the statutorilyspecified mitigating factors established by the record: the size of financial resources and good faith of the company or person charged, the gravity of the violation, the history of previous violations, and such other matters as justice may require. 12 U.S.C. §§ 1847(b)(2), (d)(4); 1818(i)(2)(G). Findings of Fact and Conclusions of Law Upon review of the administrative record, the Board hereby adopts such of the recommended findings and conclusions of the ALJ as are not specifically modified herein as the final findings and conclusions of the Board, together with the ALJ's reasoning and citations to the record. For the reasons stated below, the Board adopts the ALJ's recommendations on the appropriate amount of the penalties, and assesses penalties in the amount of $15,000 against Hufnagle, and $5,000 against VSA. VSA is a bank holding company, registered with the Board under the BHC Act, that owns 90 percent of the stock of one subsidiary bank, Franklin State Bank of Franklin, Minnesota ("the Bank"). The consolidated asset size of VSA and the Bank totals about $8 million. At all times relevant to the proceeding, Hufnagle has been the sole officer and director and the principal 2. The ceiling for such violations is set at $2,000 per day for any company which violates reporting requirements if the company can establish that it "maintains procedures reasonably adapted to avoid any inadvertent error and, unintentionally and as a result of such an error" commits the violation, or that the company "inadvertently transmits or publishes any report which is minimally late." 12 U.S.C. § 1847(d)(1). The company bears the burden of proving that an error was inadvertent or that a report was inadvertently transmitted or published late. Id. 161 shareholder of VSA, and an officer and director of the Bank. Violations of Reporting Requirements The facts related to the violations are straightforward and for the most part not in dispute. It is uncontested that Hufnagle was responsible for VSA's compliance with reporting obligations and that, from 1986 until the initiation of this proceeding in 1991, VSA repeatedly failed to file required reports on time. 3 As a predicate for the penalties charged here, Enforcement Counsel emphasized the late filing of the Y-9 report for yearend 1989 and both the Y-6 and the Y-9 reports for year-end 1990.4 Besides being late, VSA's Y-6 and Y-9 reports for 1989 contained a number of mutually contradictory entries that could not be reconciled, indicating that one or both reports were inaccurate. RD Appendix E at 1. For example, short-term borrowing for the period, which should have been an identical entry on both forms, was stated to be $395,000 on the Y-9 and zero on the Y-6. Exhibits 5, 6; Transcript ("Tr"). 1-65. 5 At the hearing, Hufnagle conceded the inconsistencies, and could not identify which, if either, of the reports was accurate. Tr. 1-125. 6 This pattern of reporting violations was the subject of repeated criticisms by the Federal Reserve. The May 15, 1986 Report of Inspection of VSA, which was sent to VSA and to Hufnagle, stated that VSA's recordkeeping was poor and that its FR Y-6 Reports were consistently incomplete or inaccurate and noted this as a violation of Regulation Y. Exhibit 1 at 2-3. The Federal Reserve also sent a letter to Hufnagle on August 21, 1987, warning him that his habitual tardiness in submitting required reports, together with other deficiencies, could result in the assessment of civil money penalties. Exhibit 2. A 1988 Report of Inspection also criticized VSA's recordkeeping and 3. The Y-6 reports were filed late in each year from 1986 to 1990, and the Y-9 reports were filed late for year-end 1986 through 1990 as well as for mid-year 1987. RD 3-4. 4. The Y-9 report for the period ending December 31, 1989, due February 14, 1990, was filed on March 12, 1990, 26 days past due. Exhibit 5. Neither the Y-6 report nor the Y-9 report for year-end 1990 had been filed at the time that this case was initiated on May 31, 1991; subsequently, the Y-6, due March 31,1991, was filed on June 13,1991, and the Y-9, due February 14, 1991, was filed on July 2, 1991. RD Appendix E at 2. 5. Other examples include the entry for "cash" held by VSA as of 12-31-89, listed as $1,000 on the Y-9 Report and $22,600 on the Y-6. Tr. 1-64. The Y-9 listed 447,000 in liabilities as long-term, while the FR Y-6 stated that all of the borrowings were short-term. Tr. 1-65. There was no way for the Federal Reserve analysts to determine which, if either, of these figures was accurate. Tr. 1-65. 6. "Your Honor, we will not attempt to persuade the Court that these Y-9s and Y-6s mesh, because they don't." Counsel for Respondents, Tr. 1-125. 162 Federal Reserve Bulletin • February 1993 failure to comply with reporting requirements. Exhibit 3. Finally, a Federal Reserve letter of February 28, 1991, after the deadline for filing the 1990 Y-9 report had passed, again warned Hufnagle that his continued failure to file timely and accurate regulatory reports could result in the assessment of civil money penalties. Exhibit 7. The record shows that, during this period, Hufnagle on occasion "refused" to file reports under the terms required by the Board, including the use of accrualbased accounting, and the exclusion of estimated data. See, e.g., Exhibit 1 at 3; Exhibit 7. Hufnagle's Defenses7 The ALJ correctly rejected Hufnagle's argument that no penalty could be assessed against him as an individual on the ground that the BHC Act does not authorize penalties for reporting violations against individuals, but only against companies. Hufnagle's argument was based on the disparate wording of two BHC Act penalty provisions: the general penalty provision, which expressly covers violations by individuals, and a separate provision specifically for reporting violations, which does not expressly address individuals. The general civil money penalty provision authorizes a penalty of $25,000 per day against "[a]ny company which violates, and any individual who participates in a violation of, any provision of [the Act], or any regulation or order issued pursuant thereto." 12 U.S.C. § 1847(b)(1) (emphasis added). A separate provision of the BHC Act added by 1989 legislation,8 entitled "Penalty for failure to make reports", establishes a schedule of penalties specifically for different degrees of reporting violations by companies, but, unlike the general penalty provision cited above, does not specifically address violations by individuals. 12 U.S.C. § 1847(d). Hufnagle argued that the more specific reporting penalty provision provides the exclusive penalty mechanism for reporting violations, so that he, as an individual, is immune from penalty for participation in VSA's reporting violations. Hufnagle Brief 6-8. Under Hufnagle's theory, VSA bore the sole responsibility for filing reports and Hufnagle's responsibility for compliance runs only to VSA, and not to the Board. The Board adopts the ALJ's rejection of this argument and finds that individuals may be penalized under 7. While these defenses are technically not before the Board due to the Respondents' failure to file exceptions, the Board has reviewed the ALJ's rulings as to these arguments, and finds that the ALJ correctly rejected each of them. 8. The "Financial Institutions Reform, Recovery, and Enforcement Act of 1989" ("FIRREA"), Pub. L. 101-73, 103 Stat. 183 (1989). section 1847(b)(1) for their participation in reporting violations for which the companies are assessed under Section 1847(d). The plain meaning of the text of section 1847(b) authorizes penalties for any individual who "participates in" a statutory or regulatory violation, 9 and nothing in the text of section 1847(d) conflicts with or restricts that general authority. While it is not apparent why Congress established a separate schedule of penalties applicable only to reporting violations by companies, it is clear that Congress did not expressly withdraw the Board's section 1847(b) authority to penalize individuals for violations, including reporting violations. "[Legislative repeals by implication will not be recognized insofar as two statutes are capable of co-existence 'absent a clearly expressed congressional intention to the contrary.' " Astoria Federal Sav. & Loan Ass'n v. Solimino, 111 S.Ct. 2166, 2170 (1991) (quoting Morton v. Moncari, 417 U.S. 535, 551 (1974)). Hufnagle has adduced no legislative history to support his restrictive interpretation. Accordingly, there is no basis for interpreting the BHC Act as establishing a safe harbor for individuals responsible for reporting violations. The ALJ also properly rejected Hufnagle's arguments that the lateness and inaccuracy of VSA's reports should be excused because they were not "intentional", because the Respondents did not profit from the violations, and because the reporting violations did not deceive the Board or otherwise hinder the Board's regulatory function. Hufnagle Brief 3-6; RD 13. The ALJ correctly concluded that none of these arguments stated a cognizable legal defense to the existence of violations. RD 13. Reporting requirements are an affirmative obligation for bank holding companies and affiliated individuals and a fundamental aspect of the Board's responsibility for supervising bank holding companies. A failure to comply with those requirements constitutes a violation of law, irrespective of the individual's state of mind, pecuniary motive, or the relative harm caused to the Board. 10 The ALJ also properly rejected Hufnagle's argument that Federal Reserve staff had led him to believe that his reporting obligations would be satisfied by "good faith best efforts" to comply. The ALJ correctly ruled that the issue was immaterial, since the reporting requirements are not subject to informal 9. The reporting requirements are authorized by the BHC Act and implemented through Regulation Y and the Y-6 and Y-9 Forms and instructions that are adopted by Board order. Hufnagle controlled VSA's actions as the sole shareholder, officer, and director of VSA, and the person who signed, and in some cases, prepared, VSA's reports. Accordingly, Hufnagle plainly "participated in" a violation of statute, regulation, and order. 10. The ALJ also correctly noted, however, that these issues might be relevant to mitigating the size of the penalty. RD 13. Legal Developments waiver by Federal Reserve staff. RD 14. Furthermore, the ALJ found that no evidence supported Hufnagle's version of his interaction with Federal Reserve staff and that the Federal Reserve had repeatedly insisted in official communications that the reporting requirements must be satisfied. RD 14.11 Amount of the Penalties The primary issue before the Board is Enforcement Counsel's exception to the amount of the penalties recommended by the ALJ, a reduction from $50,000 to $15,000 against Hufnagle and from $25,000 to $5,000 against VSA. Enforcement Counsel has identified no specific flaws in the Recommended Decision that contributed to what Enforcement Counsel views as unduly low recommended penalty amounts. Upon review, the Board denies Enforcement Counsel's exceptions and adopts the amounts recommended by the ALJ. In so finding, however, the Board notes that the pattern of violations established in this case might, in a case presenting a different record as to mitigating factors, justify a significantly higher penalty. It is clear that the Board has statutory authority to assess penalties that exceed either the amounts set forth in the Notices of Assessment or the amounts recommended by the ALJ. The BHC Act provides for maximum penalties of $25,000 per day against Hufnagle, and of $20,000 per day against VSA, for reporting violations of this degree. 12 Here, the number of days that the violations were outstanding runs into the hundreds, 13 so that the total amount that could be assessed under the law far exceeds the amounts in contention here. The extremely large sums authorized by the BHC Act, however, may be ameliorated by the Act's requirement that the Board consider the appropriateness of the penalty with respect to mitigating factors: 11. The ALJ also correctly dismissed as "meritless" Hufnagle's argument that the Board is precluded from assessing penalties now because it did not do so earlier, and properly rejected the argument that Hufnagle's service in the Minnesota legislature excused him from reporting requirements. RD 14. 12. There is no question that VSA did not establish its entitlement to the lower $2000 per day penalty applicable to companies that commit inadvertent errors notwithstanding the maintenance of "procedures reasonably adapted to avoid any inadvertent error" or that is "minimally late" due to inadvertence. 12 U.S.C. § 1847(d)(1)(A),(B). Neither element is present here: The nonexistence of proper procedures was implicitly conceded by Hufnagle's argument that VSA lacked the resources to maintain proper reporting procedures; the reporting delinquencies at issue here, extending into weeks and months, do not qualify as "minimally late". 13. The Y-9 for year-end 1989 was filed 26 days late, and the Y-6 and Y-9 for year-end 1990 were each not filed until after the initiation of this proceeding, each month after deadline. Furthermore, the inconsistencies in the Y-6 and Y-9 filed in 1990 have never been corrected and remain outstanding. 163 (1) The size of the financial resources and good faith of the respondent; (2) The gravity of the violation; (3) The history of previous violations; and (4) Such other matters as justice may require. 12 U.S.C. § 1818(i)(2)(G); § 1847(b)(2), (d)(4). A weighing of these factors persuades the Board that the penalty amounts recommended by the ALJ are reasonable. Financial Resources The evidence produced at the hearing as to VSA's and Hufnagle's financial resources forms a reasonable basis for a downward adjustment of the original assessments against VSA and Hufnagle. The ALJ found that the financial evidence of record "leaves much to be desired but there is enough to convince this Judge that as a corporate entity [VSA] is in extreme financial distress, and that Hufnagle's financial posture, visa-vis his ownership of and interest in the holding company, is in a negative position." RD 15. The ALJ also found that Hufnagle severed his relationships with the Bank and with VSA shortly before the hearing and had executed an agreement and power of attorney empowering a creditor to sell VSA for the creditor's benefit. The ALJ found that VSA's sale "will likely yield no dollars at all to Hufnagle." RD 15.14 As evidence of Hufnagle's overall financial resources, Enforcement Counsel introduced a financial statement for Hufnagle as of December 21, 1988 that showed Hufnagle to have a net worth of $804,000. Exhibit 8. In response, Hufnagle produced at the hearing another financial statement, prepared for the hearing as of December 3, 1991, that purported to show that Hufnagle had a negative net worth of $607,000. Exhibit 15. The ALJ found Hufnagle's statement unworthy of credence in several respects, finding that the status of Hufnagle's financial relationships with his father, and the valuation of his residence were "far from clear". 15 RD 10-11, 15. Accordingly, the ALJ found that Hufnagle's overall financial condition could not be accurately determined from the record. Id.16 14. Indeed, since Hufnagle personally guaranteed VSA's loan, the creditor might be able to recover from Hufnagle any deficiency from the sale of VSA. Exhibit 12 at 1. 15. The ALJ noted that much of that negative net worth consisted of Hufnagle's debt to his father, which was never to be repaid but instead was to be deducted from Hufnagle's expected inheritance. RD 11. With that amount negated, and accepting Hufnagle's appraisal of his house as worth $380,000, Hufnagle submitted that his negative net worth was $77,000. RD 10-11. 16. Since financial resources are a mitigating factor under the statute, and since the evidence as to those resources is for the most 164 Federal Reserve Bulletin • February 1993 On this admittedly incomplete record, 17 the Board finds that the evidence tends to demonstrate that the Respondents' financial resources have declined so as to mitigate the original penalty amounts. While the ALJ was appropriately skeptical as to some of Hufnagle's claimed financial reverses, the ALJ reasonably credited other aspects of Hufnagle's straitened circumstances. The Board accordingly believes that the size of Respondents' financial resources warrants a lowering of the penalty amounts from those originally assessed. Good Faith The ALJ concluded, even though he found the violations unintentional and not a source of profit to respondents (see RD 13, 15), that ultimately the continuation of the violations displayed a lack of good faith. Recommended Conclusions of Law, RD Appendix E at 4-5. There is support for this conclusion in Hufnagle's pattern of resistance to compliance with the reporting requirements. Gravity of the Violations!Record of Previous Violations Reporting requirements are a fundamental component of the Board's responsibility for supervising bank holding companies. The filing of a late or inaccurate regulatory report impairs and delays the Federal Reserve's ability to assess accurately the condition of the bank holding company involved, and may affect the Board's ability to monitor the banking system generally. The pattern of violations in this case includes relatively minor violations that grew into a more serious pattern of repeated and longer reporting delinquencies. The Respondents' violations also include more severe violations such as inaccurate reports and the failure to maintain a recordkeeping system on which accurate reports could be based. The gravity and repetitive nature of these violations weigh in favor of significant penalties. Other Factors Required by Justice The ALJ observed that an assessment of a penalty under the BHC Act serves the purposes of deterring repeat violations by the Respondents (specific deter- part within the control of the respondent, the weakness of the record in this regard is properly chargeable to the Respondents. See Stanley v. Board of Governors, 940 F.2d 267, 274 (7th Cir. 1991) (Board does not bear full burden of proving financial resources). 17. The Board declines to remand the case for supplementation of the record in light of the difficulty of achieving precision on this issue, the absence of exceptions from the Respondents, and the absence of any suggestion of the utility of a remand by Enforcement Counsel. rence) and acting as a warning to other similar bank holding companies and individuals (general deterrence). RD 15. Since the ALJ found that Hufnagle's negative experience with VSA made it unlikely that he would "soon" involve himself with another bank holding company, the ALJ found that even the lower recommended penalty amounts would suffice to deter him from similar violations in the future. RD 15. The Board believes that the ALJ erred in finding that Hufnagle did not gain any pecuniary advantage from his past violations. RD 15. That finding overlooks Hufnagle's argument that it was financially infeasible for VSA to employ the personnel necessary to achieve compliance with the reporting requirements. Hufnagle Brief at 4. It is therefore clear that, by failing to devote the necessary resources to compliance, the Respondents saved expenses and therefore realized a pecuniary benefit. In part because the amount of that benefit cannot be determined on this record, the Board declines to revise the recommended penalty amounts. 18 The Board expects, however, that where the record shows that reporting violations have resulted from avoidance of the costs of filing timely reports, the amount of saved costs will be an important factor is assessing an appropriate penalty. See, e.g., In re CBC, Inc., No. 90-033-CMP, 79 Federal Reserve Bulletin , slip op. at 5-6 (Nov. 18, 1992). Upon consideration of all of the circumstances, especially including the Respondents' financial resources, and the ALJ's findings as to penalty amounts sufficient to achieve the goals of deterrence, the Board adopts the penalty amounts recommended by the ALJ. NOW, THEREFORE, IT IS HEREBY ORDERED, pursuant to sections 8(b) and (d) of the Bank Holding Company Act, as amended (12 U.S.C. § 1847(b),(d)), that the below-named respondents are hereby assessed, and shall forfeit and pay as hereinafter provided, civil money penalties in the amounts specified below: 1. VIC SATHER & ASSOCIATES is hereby assessed and shall forfeit and pay a civil money penalty in the amount of Five Thousand Dollars ($5,000); and 2. PAUL C. HUFNAGLE is hereby assessed and shall forfeit and pay a civil money penalty in the amount of Fifteen Thousand Dollars ($15,000). IT IS FURTHER ORDERED that payment of the assessed penalties set forth herein shall be made on or before the sixtieth day following the effective date of this Order, payable in full to the order of the Board of Governors of the Federal Reserve System, who shall make remittance of the same to the Treasury of the 18. As explained above, the Board does not find that a remand for supplementation of the record would be useful in this case. Legal Developments United States as required by statute. Payment of the assessed penalty shall be transmitted to: William W. Wiles, Secretary Board of Governors of the Federal Reserve System 20th and C Streets, N.W. Washington, D.C. 20551 By order of the Board of Governors, effective this 14th day of December, 1992. WILLIAM W . WILES Secretary of the Board FINAL ENFORCEMENT ORDERS ISSUED BY THE BOARD OF GOVERNORS The Blackshear Bank Blackshear, Georgia The Federal Reserve Board announced on December 29, 1992, the joint issuance of a Cease and Desist Order against the Blackshear Bank, Blackshear, Georgia, with the Department of Banking and Finance of the State of Georgia. The Farmers and Merchants Bank of Long Beach Long Beach, California The Federal Reserve Board announced on December 29,1992, the issuance of an Order of Assessment of a Civil Money Penalty against the Farmers and Merchants Bank of Long Beach, Long Beach, California. Greater Ohio River Company Columbus, Ohio The Federal Reserve Board announced on December 23, 1992, the issuance of an Order of Assessment of a Civil Money Penalty against Greater Ohio River Company, Columbus, Ohio. Industrial Bancshares, Inc. Kansas City, Kansas The Federal Reserve Board announced on December 21, 1992, the issuance of a Cease and Desist Order against Industrial Bancshares, Inc., Kansas City, Kansas. Mission Bancshares, Inc. Mission, Kansas The Federal Reserve Board announced on December 21, 1992, the issuance of a Cease and Desist Order against Mission Bancshares, Inc., Mission, Kansas. 165 One Security, Inc. Kansas City, Kansas The Federal Reserve Board announced on December 21, 1992, the issuance of a Cease and Desist Order against One Security, Inc., Kansas City, Kansas. Sandquist Corporation Deer Lodge, Montana The Federal Reserve Board announced on December 8, 1992, the issuance of Orders of Assessment of a Civil Money Penalty against Sandquist Corporation, Deer Lodge, Montana, and Kirk Sandquist, an institution-affiliated party of Sandquist Corporation. Valley View Bancshares, Inc. Overland Park, Kansas The Federal Reserve Board announced on December 21, 1992, the issuance of a Cease and Desist Order against Valley View Bancshares, Inc., Overland Park, Kansas. WRITTEN AGREEMENTS RESERVE BANKS APPROVED BY FEDERAL First Bank of Berne Berne, Indiana The Federal Reserve Board announced on December 8, 1992, the execution of a Written Agreement between the Federal Reserve Bank of Chicago and the First Bank of Berne, Berne, Indiana. Pitcairn Bancorp, Inc. Jenkintown, Pennsylvania The Federal Reserve Board announced on December 17, 1992, the execution of a Written Agreement between the Federal Reserve Bank of Philadelphia and Pitcairn Bancorp, Inc., and Pitcairn Private Bank, Jenkintown, Pennsylvania. United Bank Corporation of N e w York Downsville, N e w York The Federal Reserve Board announced on December 8, 1992, the execution of a Written Agreement between the Federal Reserve Bank of New York and United Bank Corporation of New York, Downsville, New York. A1 Financial and Business Statistics CONTENTS WEEKLY REPORTING COMMERCIAL A3 Guide to Tabular Presentation Domestic Financial Statistics BANKS Assets and liabilities A21 All reporting banks A23 Branches and agencies of foreign banks MONEY STOCK AND BANK CREDIT FINANCIAL A4 A24 Commercial paper and bankers dollar acceptances outstanding A24 Prime rate charged by banks on short-term business loans A25 Interest rates—money and capital markets A26 Stock market—Selected statistics A27 Selected financial institutions—Selected assets and liabilities A5 A6 A7 Reserves, money stock, liquid assets, and debt measures Reserves of depository institutions, Reserve Bank credit Reserves and borrowings—Depository institutions Selected borrowings in immediately available funds—Large member banks POLICY INSTRUMENTS FEDERAL A8 Federal Reserve Bank interest rates A9 Reserve requirements of depository institutions A10 Federal Reserve open market transactions FEDERAL RESERVE BANKS A l l Condition and Federal Reserve note statements A12 Maturity distribution of loan and security holdings MONETARY AND CREDIT INSTITUTIONS A18 Major nondeposit funds A19 Assets and liabilities, last-Wednesday-of-month series FINANCE A27 A28 A29 A29 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 A30 U.S. government securities dealers—Transactions A31 U.S. government securities dealers—Positions and financing A3 2 Federal and federally sponsored credit agencies—Debt outstanding AGGREGATES A13 Aggregate reserves of depository institutions and monetary base A14 Money stock, liquid assets, and debt measures A16 Bank debits and deposit turnover A17 Loans and securities—All commercial banks COMMERCIAL BANKING MARKETS SECURITIES MARKETS AND CORPORATE FINANCE A33 New security issues—State and local governments and corporations A34 Open-end investment companies—Net sales and asset position A34 Corporate profits and their distribution A34 Total nonfarm business expenditures on new plant and equipment A35 Domestic finance companies—Assets and liabilities and business credit 2 Federal Reserve Bulletin • February 1993 Domestic Financial Statistics—Continued A57 Selected U.S. liabilities to foreign official institutions REAL ESTATE A36 Mortgage markets A37 Mortgage debt outstanding REPORTED BY BANKS IN THE UNITED STATES CONSUMER INSTALLMENT CREDIT A51 A58 A60 A61 A3 8 Total outstanding and net change A3 8 Terms FLOW OF FUNDS A39 A41 A42 A43 Funds raised in U.S. credit markets Summary of financial transactions Summary of credit market debt outstanding Summary of financial assets and liabilities Domestic Nonfinancial Statistics Liabilities to and claims on foreigners Liabilities to foreigners Banks' own claims on foreigners Banks' own and domestic customers' claims on foreigners A61 Banks' own claims on unaffiliated foreigners A62 Claims on foreign countries—Combined domestic offices and foreign branches REPORTED BYNONBANKING BUSINESS ENTERPRISES IN THE UNITED STATES A63 Liabilities to unaffiliated foreigners A64 Claims on unaffiliated foreigners SELECTED MEASURES SECURITIES HOLDINGS AND TRANSACTIONS 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 domestic product and income A52 Personal income and saving A65 Foreign transactions in securities A66 Marketable U.S. Treasury bonds and notes—Foreign transactions International Statistics INTEREST AND EXCHANGE RATES A67 Discount rates of foreign central banks A67 Foreign short-term interest rates A68 Foreign exchange rates A69 Guide to Statistical Releases and Special Tables SUMMARY STATISTICS SPECIAL TABLES A53 A54 A54 A54 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 A70 Assets and liabilities of commercial banks, September 30, 1992 A76 Terms of lending at commercial banks, November 1992 A80 Assets and liabilities of U.S. branches and agencies of foreign banks, September 30, 1992 A3 Guide to Tabular Presentation SYMBOLS c e n.a. n.e.c. P r * 0 ATS CD CMO FFB FHA FHLBB FHLMC FmHA FNMA FSLIC G-7 G-10 GENERAL AND ABBREVIATIONS Corrected Estimated Not available Not elsewhere classified Preliminary Revised (Notation appears on column heading when about half of the figures in that column are changed.) Amounts insignificant in terms of the last decimal place shown in the table (for example,' less than 500,000 when the smallest unit given is millions) Calculated to be zero Cell not applicable Automatic transfer service Certificate of deposit Collateralized mortgage obligation Federal Financing Bank Federal Housing Administration Federal Home Loan Bank Board Federal Home Loan Mortgage Corporation Farmers Home Administration Federal National Mortgage Association Federal Savings and Loan Insurance Corporation Group of Seven Group of Ten GNMA GDP HUD IMF IO IPCs IRA MMDA NOW OCD OPEC OTS PO REIT REMIC RP RTC SAIF SCO SDR SIC SMSA VA Government National Mortgage Association Gross domestic product Department of Housing and Urban Development International Monetary Fund Interest only Individuals, partnerships, and corporations Individual retirement account Money market deposit account Negotiable order of withdrawal Other checkable deposit Organization of Petroleum Exporting Countries Office of Thrift Supervision Principal only Real estate investment trust Real estate mortgage investment conduit Repurchase agreement Resolution Trust Corporation Savings Association Insurance Fund Securitized credit obligation Special drawing right Standard Industrial Classification Standard metropolitan statistical area Veterans Administration INFORMATION In many of the tables, components do not sum to totals because of rounding. Minus signs are used to indicate (1) a decrease, (2) a negative figure, or (3) an outflow. "U.S. government securities" may include guaranteed issues of U.S. government agencies (the flow of funds figures also include not fully guaranteed issues) as well as direct obligations of the Treasury. "State and local government" also includes municipalities, special districts, and other political subdivisions. A4 Domestic Financial Statistics • February 1993 1.10 R E S E R V E S , M O N E Y STOCK, LIQUID ASSETS, A N D D E B T M E A S U R E S Percent annual rate of change, seasonally adjusted1 1992 1991 1992 Monetary and credit aggregate Reserves of depository 1 Total 2 Required 3 Nonborrowed 4 Monetary base 3 5 6 7 8 9 Q1 Q2 Q3 15.2 15.4 20.0 8.2 23.4 23.5 24.0 9.2 14.9 15.4 14.8 7.1 9.3 9.9 8.4 10.5 11.1 2.4 1.0 .2 3.9 16.5 4.2 2.2 1.5 4.3r 9.8 .4 — 1.3' .5 5.4' -.6 -5.4 -.1 -7.4 16.0 -8.4 -14.4 July Oct. Nov. Aug. Sept. 6.2 5.0 4.9 9.5 20.2 21.3 21.1 16.6 24.4 23.4 23.7 16.7 42.0 40.9 45.6 14.3 20.8 22.0 21.8 8.7 10.3 .2' -.1' 1.2 4.2' 11.1 -.9 -1.1 -1.8' 3.9* 15.7 3.3 3.9* 4.5' 3.9* 19.1 3.7' 2.0' 4.5' 3.3' 22.6 5.2' .4' 1.9 2.7 14.1 3.5 1.8 n.a. n.a. -3.0 -9.3 -3.6' -1.6' -5.4' -2.2' -1.4' 6.5' -2.3' -6.6' -1.7' -23.6' -.8 -6.6 19.1 -18.9 -18.2 12.0 -13.3 -14.8 10.0 -16.7' -16.0 9.5 -17.2' -23.6 13.4 -19.4' -10.2 16.7 -16.8' -16.7 14.7' -IS.C -25.4 10.3 -18.0 -9.4 10.2 -22.5 -36.5 22.4 -24.3 -29.7 18.8 -29.4 -36.7 8.4 -17.7' -17.1 5.5 -17.2' -5.2 9.2 -17.2' -22.4 10.8 -3.5 8.8 -26.6' -1.8' 10.1 -20.2 -24.7 -4.0 37.2 -.3 26.9 -4.0' 20.0 -8.2' 40.0 -12.2' 48.1 -6.8' 54.9 -17.2' .0 10.1' -64.1' 3.8 -12.3 11.5 1.5 10.0 2.5r 14.4' 2.5' 10.8' 10.0' 1.7' 9.7' 1.9 5.0 2.7' -1.4 4.1 n.a. n.a. institutions2 Concepts of money, liquid assets, and debt4 Ml M2 M3 L Debt Nontransaction 10 In M2' 11 In M3 only 6 Q4 components Time and savings deposits Commercial banks Savings, including MMDAs Small time Large time • Thrift institutions 15 Savings, including MMDAs 16 Small time 17 Large time • 12 13 14 Money market mutual funds 18 General purpose and broker-dealer 19 Institution-only Debt components4 20 Federal 21 Nonfederal 1. Unless otherwise noted, rates of change are calculated from average amounts outstanding during preceding month or quarter. 2. Figures incorporate adjustments for discontinuities, or "breaks," associated with regulatory changes in reserve requirements. (See also table 1.20.) 3. Seasonally adjusted, break-adjusted monetary base consists of (1) seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency component of the money stock, plus (3) (for all quarterly reporters on the "Report of Transaction Accounts, Other Deposits, and Vault Cash" and for all weekly reporters whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference between current vault cash and the amount applied to satisfy current reserve requirements. 4. Composition of the money stock measures and debt is as follows: Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) travelers checks of nonbank issuers; (3) demand deposits at all commercial banks other than those due to depository institutions, the U.S. government, and foreign banks and official institutions, less cash items in the process of collection and Federal Reserve float; and (4) other checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, credit union share draft accounts, and demand deposits at thrift institutions. Seasonally adjusted Ml is computed by summing currency, travelers checks, demand deposits, and OCDs, each seasonally adjusted separately. M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements (RPs) issued by all depository institutions and overnight Eurodollars issued to U.S. residents by foreign branches of U.S. banks worldwide, (2) savings (including MMDAs) and small time deposits (time deposits—including retail repurchase agreements (RPs)—in amounts of less than $100,000), and (3) balances in both taxable and tax-exempt general-purpose and broker-dealer money market funds. Excludes individual retirement accounts (IRAs) and Keogh balances at depository institutions and money market funds. Also excludes all balances held by U.S. commercial banks, money market funds (general purpose and broker-dealer), foreign governments and commercial banks, and the U.S. government. Seasonally adjusted M2 is computed by adjusting its non-Mi component as a whole and then adding this result to seasonally adjusted Ml. M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of $100,000 or more) issued by all depository institutions, (2) term Eurodollars held by U.S. residents at foreign branches of U.S. banks worldwide and at all banking offices in the United Kingdom and Canada, and (3) balances in both taxable and tax-exempt, institution-only money market funds. Excludes amounts held by depository institutions, the U.S. government, money market funds, and foreign banks and official institutions. Also excluded is the estimated amount of overnight RPs and Eurodollars held by institution-only money market funds. Seasonally adjusted M3 is computed by adjusting its non-M2 component as a whole and then adding this result to seasonally adjusted M2. L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury securities, commercial paper, and bankers acceptances, net of money market fund holdings of these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, short-term Treasury securities, commercial paper, and bankers acceptances, each seasonally adjusted separately, and then adding this result to M3. Debt: Debt of domestic nonfinancial sectors consists of outstanding creditmarket debt of the U.S. government, state and local governments, and private nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers acceptances, and other debt instruments. Data are derived from the Federal Reserve Board's flow of funds accounts. Data on debt of domestic nonfinancial sectors are monthly averages, derived by averaging adjacent month-end levels. Growth rates for debt reflect adjustments for discontinuities over time in the levels of debt presented in other tables. 5. Sum of (1) overnight RPs and Eurodollars, (2) money market fund balances (general purpose and broker-dealer), (3) MMDAs, and (4) savings and small time deposits. 6. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S. residents, and (4) money market fund balances (institution-only), less (5) a consolidation adjustment that represents the estimated amount of overnight RPs and Eurodollars held by institution-only money market funds. This sum is seasonally adjusted as a whole. 7. Small time deposits—including retail RPs—are those issued in amounts of less than $100,000. All IRA and Keogh account balances at commercial banks and thrift institutions are subtracted from small time deposits. 8. Large time deposits are those issued in amounts of $100,000 or more, excluding those booked at international banking facilities. 9. Large time deposits at commercial banks less those held by money market funds, depository institutions, and foreign banks and official institutions. Money Stock and Bank Credit 1.11 A5 R E S E R V E S OF DEPOSITORY INSTITUTIONS A N D R E S E R V E B A N K CREDIT 1 Millions of dollars Sept. Average of daily figures Average of daily figures for week ending on date indicated 1992 1992 Oct. Nov. Oct. 14 Oct. 21 Oct. 28 Nov. 4 Nov. 11 Nov. 18 Nov. 25 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding U.S. government securities 2 Bought outright—System account 3 Held under repurchase agreements . . . Federal agency obligations 4 Bought outright 5 Held under repurchase agreements . . . 6 Acceptances Loans to depository institutions 7 Adjustment credit 8 Seasonal credit 9 Extended credit 10 Float 11 Other Federal Reserve assets 12 Gold stock 13 Special drawing rights certificate account . 14 Treasury currency outstanding 325,915 321,292 r 327,922 323,092 321,295 320,855 323,446 326,698 327,866 329,972 280,746 6,452 282,073 858 288,434 2,640 282,037 1,924 282,160 361 281,906 1,147 285,693 0 285,068 4,306 286,364 4,402 291,828 2,092 5,538 293 0 5,534 69 0 5,534 145 0 5,534 153 0 5,534 29 0 5,534 78 0 5,534 0 0 5,534 288 0 5,534 177 0 5,534 122 0 94 192 0 541 32,059 29 115 0 572 32,041 81 39 0 574 30,475 58 127 0 994 32,265 9 103 0 948 32,152 37 86 0 2 32,066 21 63 0 935 31,200 5 43 0 295 31,160 49 39 0 624 30,677 153 34 0 333 29,876 11,059 10,018 21,324 11,059 10,018 21,380 11,059 10,018 21,441 11,060 10,018 21,370 11,059 10,018 21,384 11,059 10,018 21,398 11,060 10,018 21,412 11,059 10,018 21,426 11,059 10,018 21,440 11,059 10,018 21,454 318,628 530 320,241 518 324,550 504 321,085 525 321,007 516 319,968 509 320,860 505 323,149 501 324,972 500 325,634 495 11,390 309 4,946 330 5,617 284 4,555 293 4,675 271 5,191 402 5,622 457 5,250 382 5,184 247 5,787 199 5,773 290 5,782 286 5,898 293 5,703 276 5,742 269 5,832 265 6,039 304 5,729 294 6,006 301 5,756 284 ABSORBING RESERVE FUNDS 15 Currency in circulation 16 Treasury cash holdings Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 18 Foreign 19 Service-related balances and adjustments 20 Other 21 Other Federal Reserve liabilities and capital 22 Reserve balances with Federal Reserve Banks 8,507 8,108 7,834 8,180 8,132 8,242 7,435 7,533 7,887 8,177 22,890 23,540 r 25,460 24,922 23,145 22,921 24,714 26,364 25,286 26,169 End-of-month figures Sept. Oct. Wednesday figures Nov. Oct. 14 Oct. 21 Oct. 28 Nov. 4 Nov. 11 Nov. 18 Nov. 25 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding U.S. government securities 2 Bought outright—System account 3 Held under repurchase agreements . . . Federal agency obligations 4 Bought outright 5 Held under repurchase agreements . . . 6 Acceptances Loans to depository institutions 7 Adjustment credit 8 Seasonal credit 9 Extended credit 10 Float 11 Other Federal Reserve assets 336,583 320,055r 331,111 332,569 319,138 318,942 326,097 328,452 321,990 329,480 279,712 16,685 282,877 0 292,696 3,256 281,313 9,831 281,314 0 282,004 521 288,095 0 285,564 4,688 286,719 150 292,340 343 5,534 1,475 0 5,534 0 0 5,534 254 0 5,534 1,044 0 5,534 0 0 5,534 130 0 5,534 0 0 5,534 533 0 5,534 0 0 5,534 0 0 425 184 0 -227 32,796 11 70 0 500r 31,064 r 10 25 0 -24 29,360 190 119 0 1,485 33,054 20 % 0 335 31,838 28 75 0 -1,505 32,155 7 48 0 1,108 31,307 6 41 0 605 31,482 155 39 0 100 29,293 834 30 0 707 29,692 12 Gold stock 13 Special drawing rights certificate account . 14 Treasury currency outstanding 11,058 10,018 21,342 11,060 10,018 21,412 11,059 10,018 21,468 11,059 10,018 21,370 11,059 10,018 21,384 11,059 10,018 21,398 11,059 10,018 21,412 11,060 10,018 21,426 11,059 10,018 21,440 11,059 10,018 21,454 317,923 527 320,398 505 327,315 525 321,611 517 320,503 510 320,237 505 321,861 501 324,384 501 325,155 490 327,020 525 24,586 546 4,413 415 6,985 229 4,342 279 5,692 393 5,028 585 6,940 542 5,388 264 6,504 162 6,074 185 5,963 296 6,039"^ 317 6,066 296 5,703 300 5,742 254 5,832 298 6,039 280 5,729 304 6,006 288 5,756 278 ABSORBING RESERVE FUNDS 15 Currency in circulation 16 Treasury cash holdings Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 18 Foreign 19 Service-related balances and adjustments 20 Other 21 Other Federal Reserve liabilities and capital 22 Reserve balances with Federal Reserve Banks' 8,024 7,271 7,759 8,097 7,916 8,081 7,329 7,645 7,903 8,088 21,138 23,186 r 24,479 34,168 20,590 20,851 25,094 26,738 17,998 24,084 1. For amounts of cash held as reserves, see table 1.12. 2. Includes securities loaned—fully guaranteed by U.S. government securities pledged with Federal Reserve Banks—and excludes any securities sold and scheduled to be bought back under matched sale-purchase transactions. 3. Excludes required clearing balances and adjustments to compensate for float, A6 Domestic Financial Statistics • February 1993 1.12 R E S E R V E S A N D BORROWINGS Depository Institutions 1 Millions of dollars Prorated monthly averages of biweekly averages Reserve classification 1 2 3 4 5 6 7 8 9 10 Reserve balances with Reserve Banks Total vault cash Applied vault cash , Surplus vault cash Total reserves 6 Required reserves 1... Excess reserve balances at Reserve Banks . . . Total borrowings at Reserve Banks 8 Seasonal borrowings Extended credit 1989 1990 1991 Dec. Dec. Dec. May June July Aug. Sept. Oct. r Nov. 35,436 29,828 27,374 2,454 62,810 61,887 923 265 84 20 30,237 31,786 28,884 2,903 59,120 57,456 1,664 326 76 23 26,659 32,513 28,872 3,641 55,532 54,553 979 192 38 1 21,071 31,197 27,754 3,442 48,825 47,825 1,000 155 98 0 21,223 31,729 28,273 3,456 49,4% 48,584 913 229 149 0 21,206 32,145 28,617 3,528 49,823 48,857 965 284 203 0 21,272 32,457 28,890 3,567 50,162 49,227 935 251 223 0 22,627 32,343 28,894 3,448 51,521 50,527 994 287 193 0 23,626 32,991 29,510 3,481 53,136 52,062 1,074 143 114 0 25,459 32,626 29,205 3,422 54,664 53,620 1,043 104 40 0 1992 Biweekly averages of daily figures for weeks ending 1992 1 2 3 4 5 6 7 8 9 10 Reserve balances with Reserve Banks 2 Total vault cash 3 Applied vault cash , Surplus vault cash Total reserves 6 Required reserves Excess reserve balances at Reserve Banks . . . Total borrowings at Reserve Banks Seasonal borrowings Extended credit 9 Aug. 5 Aug. 19 Sept. 2 Sept. 16 Sept. 30 Oct. 14 Oct. 28 Nov. l l r Nov. 25 Dec. 9 21,264 31,613 28,105 3,508 49,369 48,447 922 241 222 0 21,515 32,687 29,166 3,521 50,681 49,856 825 249 221 0 20,991 32,541 28,896 3,645 49,887 48,820 1,067 258 226 0 23,439 31,625 28,438 3,187 51,876 51,081 795 321 187 0 22,048 33,033 29,351 3,682 51,399 50,217 1,182 259 196 0 23,810 32,929 29,438 3,491 53,248 52,099 1,149 185 146 0 23,031 33,333r 29,790 3,543r 52,821 51,750 1,071 118 95 0 25,535 31,688 28,539 3,150 54,074 53,346 728 66 53 0 25,730 33,446 29,117 4,329 54,846 53,485 1,361 138 37 0 24,533 32,397 30,917 1,480 55,450 54,604 845 95 22 0 1. Data in this table also appear in the Board's H.3 (502) weekly statistical release. For ordering address, see inside front cover. 2. Excludes required clearing balances and adjustments to compensate for float and includes other off-balance-sheet " a s - o f ' adjustments. 3. Total "lagged" vault cash held by depository institutions subject to reserve requirements. Dates refer to the maintenance periods during which the vault cash can be used to satisfy reserve requirements. Under contemporaneous reserve requirements, maintenance periods end thirty days after the lagged computation periods during which the balances are held. 4. All vault cash held during the lagged computation period by "bound" institutions (that is, those whose required reserves exceed their vault cash) plus the amount of vault cash applied during the maintenance period by "nonbound" institutions (that is, those whose vault cash exceeds their required reserves) to satisfy current reserve requirements. 5. Total vault cash (line 2) less applied vault cash (line 3). 6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash (line 3). 7. Total reserves (line 5) less required reserves (line 6). 8. Also includes adjustment credit. 9. Consists of borrowing at the discount window under the terms and conditions established for the extended credit program to help depository institutions deal with sustained liquidity pressures. Because there is not the same need to repay such borrowing promptly as there is with traditional short-term adjustment credit, the money market impact of extended credit is similar to that of nonborrowed reserves. Money Stock and Bank Credit 1.13 S E L E C T E D BORROWINGS IN IMMEDIATELY A V A I L A B L E F U N D S Al Large Banks 1 Millions of dollars, averages of daily figures 1992, week ending Monday Source and maturity 1 2 3 4 5 6 7 8 Federal funds purchased, repurchase agreements, and other selected borrowings From commercial banks in the United States For one day or under continuing contract For all other maturities From other depository institutions, foreign banks and official institutions, and U.S. government agencies For one day or under continuing contract For all other maturities Repurchase agreements on U.S. government and federal agency securities Brokers and nonbank dealers in securities For one day or under continuing contract For all other maturities All other customers For one day or under continuing contract For all other maturities Aug. 31 Sept. 7 Sept. 14 Sept. 21 Sept. 28 Oct. 5 Oct. 12 Oct. 19 Oct. 26 69,674 15,512 77,011 14,365 74,385 14,605 69,601r 13,869 64,186r 13,912r 76,088 13,207 73,095 14,234 74,222 14,254 67,637 14,797 17,874 19,493 19,902 20,735 17,075 21,184 16, n o 1 20,791 18,852r 21,305 17,985 19,541 16,750 18,368 22,663 17,428 23,327 18,688 15,305 16,977 14,459 15,956 14,299 17,202 12,182r 16,960 11,499" 17,490 11,433 17,827 11,333 18,663 14,483 18,780 13,088 20,594 r r 25,113 12,483 25,117 12,542 23,355 12,198 23,515 12,972r 23,437 13,256r 25,848 12,250 24,517 12,631 23,481 12,159 23,164 12,719 41,511 17,663 42,828 19,705 41,225 20,430 44,476r 22,495r 40,128r 21,141r 47,192 26,564 40,377 22,468 41,392 19,175 37,812 20,103 MEMO Federal funds loans and resale agreements in immediately available funds in maturities of one day or under continuing contract 9 To commercial banks in the United States 10 To all other specified customers 2 1. Banks with assets of $4 billion or more as of Dec. 31, 1988. Data in this table also appear in the Board's H.S (507) weekly statistical release. For ordering address, see inside front cover. 2. Brokers and nonbank dealers in securities, other depository institutions, foreign banks and official institutions, and U.S. government agencies. A8 1.14 Domestic Financial Statistics • February 1993 F E D E R A L R E S E R V E B A N K INTEREST RATES Percent per year Current and previous levels Adjustment credit 1 Federal Reserve Bank On . 12/31/92 Boston New York Philadelphia , , Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco . . . Seasonal credit 2 Effective date Previous rate On 12/31/92 7/2/92 7/2/92 7/2/92 7/6/92 7/2/92 7/2/92 3.5 3.20 3 7/2/92 7/7/92 7/2/92 7/2/92 7/2/92 7/2/92 3 3.5 3.20 Extended credit 3 Effective date Previous rate On 12/31/92 12/24/92 12/24/92 12/24/92 12/24/92 12/24/92 12/24/92 3.40 3.70 12/24/92 12/24/92 12/24/92 12/24/92 12/24/92 12/24/92 3.40 Range of rates for adjustment credit in recent years Effective date In effect Dec. 31, 1977 1978—Jan. May July Aug. Sept. Oct. Nov. 9 20 11 12 3 10 21 22 16 20 1 3 Range (or level)— All F.R. Banks 6 6-6.5 6.5 6.5-7 7 7-7.25 7.25 7.75 8 8-8.5 8.5 8.5-9.5 9.5 1979—July 20 Aug. 17 20 Sept. 19 21 Oct. 8 10 10 10-10.5 10.5 10.5-11 11 11-12 12 1980—Feb. 15 19 May 29 30 June 13 16 29 July 28 Sept. 26 Nov. 17 Dec. 5 12-13 13 12-13 12 11-12 11 10 10-11 11 12 12-13 F.R. Bank of N.Y. 6 6.5 6.5 7 7 7.25 7.25 7.75 8 8.5 8.5 9.5 9.5 10 10.5 10.5 11 U 12 12 13 13 13 12 11 11 10 10 11 12 13 Effective 1981-- M a y Nov. Dec. 5 ? 6 4 13-14 14 13-14 13 12 F.R. Bank of N.Y. 14 14 13 13 12 70 73 7 3 16 77 30 Oct. 1? n Nov. 2? 76 Dec. 14 15 17 11.5-12 11.5 11-11.5 11 10.5 10-10.5 10 9.5-10 9.5 9-9.5 9 8.5-9 8.5-9 8.5 11.5 11.5 11 11 10.5 10 10 9.5 9.5 9 9 9 8.5 8.5 9 n Nov. 71 76 Dec. 74 8.5-9 9 8.5-9 8.5 8 9 9 8.5 8.5 8 1985-—May —May 70 74 7.5-8 7.5 7.5 7.5 1986-—Mar. 7 10 Apr. 71 July 11 7-7.5 7 6.5-7 6 7 7 6.5 6 -July 1982--July Aug. 1984-—Apr. —Apr. Previous rate 12/24/92 12/24/92 12/24/92 12/24/92 12/24/92 12/24/92 3.90 3.70 12/24/92 12/24/92 12/24/92 12/24/92 12/24/92 12/24/92 3.90 4 Range (or level)— All F.R. Banks F.R. Bank of N.Y. 1986—Aug. 21 22 5.5-6 5.5 5.5 5.5 1987—Sept. 4 11 5.5-6 6 6 6 1988—Aug. 9 11 6-6.5 6.5 1989—Feb. 24 27 6.5-7 7 7 7 Effective date 1990—Dec. 19 1991—Feb. Apr. May Sept. Sept. Nov. Dec. 1992—July 6.5 6.5 1 4 30 2 13 17 6 7 20 24 6.65 6 5.5-6 5.5 5-5.5 5 4.5-5 4.5 3.5-4.5 3.5 6 6 5.5 5.5 5 5 4.5 4.5 3.5 3.5 2 7 3-3.5 3 3 3 3 3 In effect Dec. 31, 1992 1. Available on a short-term basis to help depository institutions meet temporary needs for funds that cannot be met through reasonable alternative sources. The highest rate established for loans to depository institutions may be charged on adjustment-credit loans of unusual size that result from a major operating problem at the borrower's facility. 2. Available to help relatively small depository institutions meet regular seasonal needs for funds that arise from a clear pattern of intrayearly movements in their deposits and loans and that cannot be met through special industry lenders. The discount rate on seasonal credit takes into account rates on market sources of funds and ordinarily is reestablished on the first business day of each two-week reserve maintenance period; however, it is never less than the discount rate applicable to adjustment credit. 3. May be made available to depository institutions when similar assistance is not reasonably available from other sources, including special industry lenders. Such credit may be provided when exceptional circumstances (including sustained deposit drains, impaired access to money market funds, or sudden deterioration in loan repayment performance) or practices involve only a particular institution, or to meet the needs of institutions experiencing difficulties adjusting to changing market conditions over a longer period (particularly at times of deposit disintermediation). The discount rate applicable to adjustment credit Range (or level)— All F.R. Banks Effective date ordinarily is charged on extended-credit loans outstanding less than thirty days; however, at the discretion of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a flexible rate somewhat above rates on market sources of funds is charged. The rate ordinarily is reestablished on the first business day of each two-week reserve maintenance period, but it is never less than the discount rate applicable to adjustment credit plus 50 basis points. 4. For earlier data, see the following publications of the Board of Governors: Banking and Monetary Statistics, 1914-1941, and 1941-1970; and the Annual Statistical Digest, 1970-1979. In 1980 and 1981, the Federal Reserve applied a surcharge to short-term adjustment-credit borrowings by institutions with deposits of $500 million or more that had borrowed in successive weeks or in more than four weeks in a calendar quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7, 1980. A surcharge of 2 percent was reimposed on Nov. 17, 1980; the surcharge was subsequendy raised to 3 percent on Dec. 5, 1980, and to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981, and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the surcharge was changed from a calendar quarter to a moving thirteen-week period. The surcharge was eliminated on Nov. 17, 1981. Policy Instruments 1.15 A9 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS 1 Type of deposit 2 Net transaction accounts 1 $0 million-$46.8 million... 2 More than $46.8 million . . 12/15/92 12/15/92 3 Nonpersonal time deposits ; 12/27/90 4 Eurocurrency liabilities6 .. 12/27/90 1. Required reserves must be held in the form of deposits with Federal Reserve Banks or vault cash. Nonmember institutions may maintain reserve balances with a Federal Reserve Bank indirectly on a pass-through basis with certain approved institutions. For previous reserve requirements, see earlier editions of the Annual Report or the Federal Reserve Bulletin. Under provisions of the Monetary Control Act, depository institutions include commercial banks, mutual savings banks, savings and loan associations, credit unions, agencies and branches of foreign banks, and Edge corporations. 2. The Garn-St Germain Depository Institutions Act of 1982 (Public Law 97-320) requires that $2 million of reservable liabilities of each depository institution be subject to a zero percent reserve requirement. The Board is to adjust the amount of reservable liabilities subject to this zero percent reserve requirement each year for the succeeding calendar year by 80 percent of the percentage increase in the total reservable liabilities of all depository institutions, measured on an annual basis as of June 30. No corresponding adjustment is to be made in the event of a decrease. On Dec. 15, 1992, the exemption was raised from $3.6 million to $3.8 million. The exemption applies in the following order: (1) net negotiable order of withdrawal (NOW) accounts (NOW accounts less allowable deductions); and (2) net other transaction accounts. The exemption applies only to accounts that would be subject to a 3 percent reserve requirement. 3. Include all deposits against which the account holder is permitted to make withdrawals by negotiable or transferable instruments, payment orders of withdrawal, and telephone and preauthorized transfers in excess of three per month for the purpose of making payments to third persons or others. However, money market deposit accounts (MMDAs) and similar accounts subject to the rules that permit no more than six preauthorized, automatic, or other transfers per month, of which no more than three may be checks, are not transaction accounts (such accounts are savings deposits). The Monetary Control Act of 1980 requires that the amount of transaction accounts against which the 3 percent reserve requirement applies be modified annually by 80 percent of the percentage change in transaction accounts held by all depository institutions, determined as of June 30 each year. Effective Dec. 15, 1992, for institutions reporting quarterly, and Dec. 24, 1992, for institutions reporting weekly, the amount was increased from $42.2 million to $46.8 million. 4. The reserve requirement was reduced from 12 percent to 10 percent on Apr. 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions that report quarterly. 5. For institutions that report weekly, the reserve requirement on nonpersonal time deposits with an original maturity of less than lVz years was reduced from 3 percent to IVi percent for the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that began Dec. 27, 1990. The reserve requirement on nonpersonal time deposits with an original maturity of 1 Vi years or more has been zero since Oct. 6, 1983. For institutions that report quarterly, the reserve requirement on nonpersonal time deposits with an original maturity of less than 1 Vi years was reduced from 3 percent to zero on Jan. 17, 1991. 6. The reserve requirement on Eurocurrency liabilities was reduced from 3 percent to zero in the same manner and on the same dates as were the reserve requirement on nonpersonal time deposits with an original maturity of less than 1 Vi years (see note 4). A10 1.17 Domestic Financial Statistics • February 1993 F E D E R A L R E S E R V E OPEN MARKET TRANSACTIONS 1 Millions of dollars 1992 Type of transaction 1989 1990 1991 Apr. May June July Aug. Sept. Oct. U . S . TREASURY SECURITIES Outright transactions (excluding transactions) 1 2 3 4 matched Treasury bills Gross purchases Gross sales Exchanges Redemptions 14,284 12,818 231,211 12,730 24,739 7,291 241,086 4,400 20,158 120 277,314 1,000 0 0 27,526 0 4,110 0 24,275 0 306 0 22,392 0 0 0 27,755 0 271 0 25,041 0 595 0 22,268 0 4,072 0 28,907 0 327 0 28,848 -25,783 500 425 0 25,638 -27,424 0 3,043 0 24,454 -28,090 1,000 0 0 1,100 -1,863 0 0 0 3,754 -5,225 0 0 0 2,152 -1,854 0 0 0 687 -1,669 0 0 0 5,415 -4,617 0 550 0 0 0 0 0 0 0 0 0 One to five years Gross purchases Gross sales Maturity shifts Exchanges 1,436 490 -25,534 23,250 250 200 -21,770 25,410 6,583 0 -21,211 24,594 0 0 -877 1,484 200 0 -2,113 4,311 2,278 0 -3,447 1,854 0 0 -216 1,478 400 0 -4,036 3,567 3,325 0 0 0 200 0 0 0 Five to ten years Gross purchases Gross sales 16 Maturity shifts IV Exchanges 287 29 -2,231 1,934 0 100 -2,186 789 1,280 0 -2,037 2,894 0 0 -223 379 0 0 -346 614 597 0 0 0 0 0 -471 191 0 0 -412 700 725 0 0 0 0 0 0 0 284 0 -1,086 600 0 0 -1,681 1,226 375 0 -1,209 600 0 0 0 0 0 0 0 300 655 0 0 0 0 0 0 0 195 0 0 350 731 0 0 0 0 0 0 0 16,617 13,337 13,230 25,414 7,591 4,400 31,439 120 1,000 0 0 0 4,310 0 0 3,836 0 0 0 0 0 866 0 0 5,927 0 0 4,272 0 0 1,323,480 1,326,542 1,369,052 1,363,434 1,570,456 1,571,534 125,999 128,149 118,972 117,524 126,977 129,216 127,051 126,137 104,873 102,575 116,331 115,579 116,024 114,917 129,518 132,688 219,632 202,551 310,084 311,752 18,432 20,237 38,777 38,533 10,792 11,036 12,224 12,224 39,484 31,868 68,697 59,628 18,698 35,383 -10,055 24,886 29,729 345 3,107 5,831 -914 6,184 14,244 -13,520 0 0 442 0 0 183 0 5 292 0 0 49 0 0 160 0 0 40 0 0 85 0 0 54 0 0 37 0 0 0 Repurchase agreements2 33 Gross purchases 34 Gross sales 38,835 40,411 41,836 40,461 22,807 23,595 224 224 1,281 1,281 402 402 94 94 601 548 3,222 1,800 1,778 3,253 35 Net change in federal agency obligations -2,018 1,192 -1,085 -49 -160 -40 -85 -1 1,385 -1,475 36 Total net change in System Open Market Account -12,073 26,078 28,644 295 2,946 5,791 -1,000 6,183 15,629 -14,995 Others within one year Gross purchases Gross sales '/ Maturity shifts 8 Exchanges y Redemptions 5 6 10 n 12 13 14 IS 18 19 20 21 More than ten years Gross purchases Gross sales Maturity shifts Exchanges All maturities Gross purchases Gross sales 24 Redemptions 22 23 Matched transactions Gross sales 26 Gross purchases 25 2 Repurchase agreements 21 Gross purchases 28 Gross sales 29 Net change in U.S. government securities F E D E R A L A G E N C Y OBLIGATIONS Outright transactions 30 Gross purchases 31 Gross sales 32 Redemptions 1. Sales, redemptions, and negative figures reduce holdings of the System Open Market Account; all other figures increase such holdings. 2. In July 1984 the Open Market Trading Desk discontinued accepting bankers acceptances in repurchase agreements. Federal Reserve Banks 1.18 FEDERAL RESERVE BANKS A11 Condition and Federal Reserve Note Statements 1 Millions of dollars Account Oct. 28 Nov. 4 Wednesday End of month 1992 1992 Nov. 11 Nov. 18 Nov. 25 Sept. 30 Oct. 31 Nov. 30 Consolidated condition statement ASSETS 1 Gold certificate account 2 Special drawing rights certificate account 3 Coin Loans 4 To depository institutions 5 Other 6 Acceptances held under repurchase agreements Federal agency obligations 7 Bought outright 8 Held under repurchase agreements 11,059 10,018 517 11,059 10,018 515 11,060 10,018 511 11,059 10,018 517 11,059 10,018 495 11,058 10,018 501 11,060 10,018 519 11,059 10,018 491 103 0 0 54 0 0 46 0 0 194 0 0 865 0 0 609 0 0 80 0 0 35 0 0 5,534 130 5,534 0 5,534 533 5,534 0 5,534 0 5,534 1,475 5,534 0 5,534 254 282,525 288,095 290,252 286,869 292,683 296,397 282,877 295,952 10 Bought outright 2 11 Bills 12 Notes 13 Bonds 14 Held under repurchase agreements 282,004 135,843 112,576 33,584 521 288,095 141,935 112,576 33,584 0 285,564 139,154 112,826 33,584 4,688 286,719 139,709 113,026 33,984 150 292,340 139,423 117,879 35,037 343 279,712 133,752 112,376 33,584 16,685 282,877 136,716 112,576 33,584 0 292,696 139,780 117,879 35,037 3,256 15 Total loans and securities 288,292 293,683 296,365 292,597 299,081 304,015 288,491 301,775 4,791 1,025 6,852 1,024 7,485 1,026 5,741 1,028 6,198 1,029 5,125 1,019 5,136 1,024 1,912 1,029 24,065 6,949 23,078 7,288 23,109 7,464 23,133 5,235 22,739 6,063 24,432 7,423 23,067 7,020 22,150 6,245 346,715 353,517 357,039 349,328 356,682 363,591 346,334 354,679 9 Total U.S. Treasury securities 16 Items in process of collection 17 Bank premises Other assets 18 Denominated in foreign currencies 19 All other 4 20 Total assets LIABILITIES 21 Federal Reserve notes 299,861 301,466 303,970 304,722 306,586 297,609 300,010 306,863 22 Total deposits 34,084 38,839 38,591 31,267 36,746 53,094 34,484 37,840 23 24 25 26 28,161 5,028 585 298 31,077 6,940 542 280 32,634 5,388 264 304 24,312 6,504 162 288 30,208 6,074 185 278 27,665 24,586 546 296 29,339 4,413 415 317 30,348 6,985 229 2% 4,689 1,752 5,883 1,763 6,832 1,788 5,436 1,776 5,263 1,860 4,865 1,840 4,568 1,805 2,216 1,894 340,386 347,950 351,182 343,201 350,455 357,408 340,868 348,814 3,006 2,652 671 3,040 2,500 26 3,021 2,586 250 3,022 2,626 478 3,028 2,629 571 2,977 2,652 555 3,040 2,419 8 3,028 2,546 291 346,715 353,517 357,039 349,328 356,682 363,591 346,334 354,679 284,546 292,965 297,628 292,312 285,278 283,556 293,014 285,765 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 33 Total liabilities and capital accounts MEMO 34 Marketable U.S. Treasury securities held in custody for foreign and international accounts Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Bank) 36 LESS: Held by Federal Reserve Bank 37 Federal Reserve notes, net 38 39 40 41 Collateral held against notes, net: Gold certificate account Special drawing rights certificate account Other eligible assets U.S. Treasury and agency securities 42 Total collateral 357,787 57,926 299,861 357,439 55,974 301,466 357,775 53,805 303,970 358,494 53,772 304,722 359,211 52,626 306,586 357,496 59,887 297,609 357,540 57,530 300,010 359,274 52,410 306,863 11,059 10,018 0 278,784 11,059 10,018 0 280,389 11,060 10,018 0 282,893 11,059 10,018 0 283,645 11,059 10,018 0 285,509 11,058 10,018 0 276,532 11,060 10,018 0 278,933 11,059 10,018 0 285,787 299,861 301,466 303,970 304,722 306,586 297,609 300,010 306,863 1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly statistical release. For ordering address, see inside front cover. 2. Includes securities loaned—fully guaranteed by U.S. Treasury securities pledged with Federal Reserve Banks—and excludes securities sold and scheduled to be bought back under matched sale-purchase transactions. 3. Valued monthly at market exchange rates. 4. Includes special investment account at the Federal Reserve Bank of Chicago in Treasury bills maturing within ninety days. 5. Includes exchange-translation account reflecting the monthly revaluation at market exchange rates of foreign-exchange commitments. A12 1.19 Domestic Financial Statistics • February 1993 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holding 1 Millions of dollars Type and maturity grouping Wednesday End of month 1992 1992 Oct. 28 Nov. 4 Nov. 11 Nov. 18 Nov. 25 Sept. 30 Oct. 30 Nov. 30 103 54 46 194 865 609 80 35 87 16 0 17 38 0 19 28 0 194 1 0 864 1 0 506 103 0 35 46 0 23 12 0 5 Total acceptances 0 0 0 0 0 0 0 0 6 7 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 1 Total loans 2 3 4 Within fifteen days Sixteen days to ninety days Ninety-one days to one year Within fifteen days Sixteen days to ninety days Ninety-one days to one year 282,525 288,095 290,252 286,869 292,683 296,397 282,877r 295,952 Within fifteen days 2 Sixteen days to ninety days Ninety-one days to one year One year to five years Five years to ten years More than ten years 11,667 67,250 90,336 69,627 17,014 26,631 20,224 61,392 93,864 68,970 17,014 26,631 16,936 66,809 93,643 69,220 17,014 26,631 14,311 69,135 91,877 67,062 17,627 26,858 10,493 69,694 95,504 70,383 18,803 27,805 24,468 67,062 91,423 69,648 17,165 26,631 3,203r 73,197r 93,205r 69,627r 17,014 26,631 8,620 75,398 95,569 69,757 18,803 27,805 16 Total federal agency obligations 5,664 5,534 6,067 5,534 5,534 7,009 5,534 5,788 Within fifteen days 2 Sixteen days to ninety days Ninety-one days to one year One year to five years Five years to ten years More than ten years 244 843 1,198 2,503 722 154 0 951 1,204 2,503 722 154 653 831 1,204 2,503 722 154 458 568 1,129 2,503 722 154 393 513 1,129 2,622 723 154 1,685 747 1,221 2,465 737 154 114 843 1,198 2,503 722 154 647 548 1,109 2,608 722 154 9 Total U.S. Treasury securities 10 11 12 13 14 15 17 18 19 20 21 22 1. Holdings under repurchase agreements are classified as maturing within fifteen days in accordance with maximum maturity of the agreements. Monetary and Credit Aggregates 1.20 A13 AGGREGATE R E S E R V E S OF DEPOSITORY INSTITUTIONS A N D M O N E T A R Y B A S E 1 Billions of dollars, averages of daily figures 1992 Item 1988 Dec. 1989 Dec. 1990 Dec. 1991 Dec. Apr. Total reserves 3 Nonborrowed reserves Nonborrowed reserves plus extended credit Required reserves Monetary base June July Aug. Sept. Oct. Nov. 49.49 49.21 49.21 48.52 332.26 50.32 50.07 50.07 49.39 336.87 51.35 53.14 51.06 53.00 51.06 53.00 50.35 52.07 341.55 345.61r 54.07 53.96 53.96 53.02 348.11 Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS 2 1 2 3 4 5 May 40.47 38.75 40.00 39.42 256.97 40.56 40.29 40.31 39.64 267.77 41.83 41.51 41.53 40.17 293.29 45.60 45.41 45.41 44.62 317.25 49.00 48.91 48.91 47.86 326.50 49.49 49.34 49.34 48.49 328.58 49.23 49.01 49.01 48.32 329.64 Not seasonally adjusted 6 7 8 9 10 Total reserves Nonborrowed reserves Nonborrowed reserves plus extended credit Required reserves Monetary base 41.65 39.93 41.17 40.60 260.41 41.77 41.51 41.53 40.85 271.18 43.07 42.74 42.77 41.40 296.68 46.98 46.78 46.78 46.00 321.07 50.02 49.93 49.93 48.88 327.45 48.62 48.47 48.47 47.62 328.37 49.25 49.02 49.02 48.33 330.94 49.52 49.24 49.24 48.56 334.09 49.81 49.56 49.56 48.88 336.59 51.11 52.66 50.83 52.52 52.52 50.83 50.12 51.59 340.11 343.66r 54.13 54.03 54.03 53.09 347.93 63.75 62.03 63.28 62.70 283.00 1.05 1.72 62.81 62.54 62.56 61.89 292.55 .92 .27 59.12 58.80 58.82 57.46 313.70 1.66 .33 55.53 55.34 55.34 54.55 333.61 .98 .19 50.46 50.37 50.37 49.32 332.69 1.14 .09 48.83 48.67 48.67 47.83 333.79 49.50 49.27 49.27 48.58 336.43 .91 .23 49.82 49.54 49.54 48.86 339.87 .97 .28 50.16 49.91 49.91 49.23 342.49 .94 .25 51.52 53.14 51.23 52.99 51.23 52.99 50.53 52.06 346.21 349.81r .99 1.07 .29 .14 54.66 54.56 54.56 53.62 354.26 1.04 .10 N O T ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS 11 12 13 14 15 16 17 Total reserves 11 Nonborrowed reserves ^ Nonborrowed reserves plus extended credit Required reserves Monetary base Excess reserves Borrowings from the Federal Reserve 1. Latest monthly and biweekly figures are available from the Board's H.3 (502) weekly statistical release. Historical data and estimates of the impact on required reserves of changes in reserve requirements are available from the Monetaiy and Reserves Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve System, Washington, DC 20551. 2. Figures reflect adjustments for discontinuities, or "breaks," associated with regulatory changes in reserve requirements. (See also table 1.10) 3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, break-adjusted required reserves (line 4) plus excess reserves (line 16). 4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted, break-adjusted total reserves (line 1) less total borrowings of depository institutions from the Federal Reserve (line 17). 5. Extended credit consists of borrowing at the discount window under the terms and conditions established for the extended credit program to help depository institutions deal with sustained liquidity pressures. Because there is not the same need to repay such borrowing promptly as there is with traditional short-term adjustment credit, the money market impact of extended credit is similar to that of nonborrowed reserves. 6. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency component of the money stock, plus (3) (for all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference between current vault cash and the amount applied to satisfy current reserve requirements. 7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) plus excess reserves (line 16). 8. To adjust required reserves for discontinuities that are due to regulatory changes in reserve requirements, a multiplicative procedure is used to estimate 1.00 .16 what required reserves would have been in past periods had current reserve requirements been in effect. Break-adjusted required reserves include required reserves against transactions deposits and nonpersonal time and savings deposits (but not reservable nondeposit liabilities). 9. The break-adjusted monetary base equals (1) break-adjusted total reserves (line 6), plus (2) the (unadjusted) currency component of the money stock, plus (3) (for all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all weekly reporters whose vault cash exceeds their required reserves) the break-adjusted difference between current vault cash and the amount applied to satisfy current reserve requirements. 10. Reflects actual reserve requirements, including those on nondeposit liabilities, with no adjustments to eliminate the effects of discontinuities associated with changes in reserve requirements. 11. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserve requirements. 12. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1) total reserves (line 11), plus (2) required clearing balances and adjustments to compensate for float at Federal Reserve Banks, plus (3) the currency component of the money stock, plus (4) (for all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters whose vault cash exceeds their required reserves) the difference between current vault cash and the amount applied to satisfy current reserve requirements. Since the introduction of changes in reserve requirements (CRR), currency and vault cash figures have been measured over the computation periods ending on Mondays. 13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14). A14 1.21 Domestic Financial Statistics • February 1993 M O N E Y STOCK, LIQUID A S S E T S , A N D D E B T M E A S U R E S 1 Billions of dollars, averages of daily figures Item 1988 Dec. 1992 1989 Dec. 1990 Dec. 1991 Dec. Aug/ Sept. Oct/ Nov. Seasonally adjusted Measures 1 Ml 786.9 3,071.1 3,923.1 4,677.1 9,326.3 794.1 3,227.3 4,059.8 4,890.6 10,076.7 826.1 3,339.0 4,114.6 4,965.2 10,751.3 898.1 3,439.8 4.171.0 4.988.1 11,201.3' 973.1 3.471.2 4.176.3 5,024.8 11,564.7 988.6 3,481.9 4,183.1r 5,043.8r 11,5%.5 r 1,007.2 3,497.0 4,184.4 5,051.7 11,622.4 1.019.0 3.507.1 4,190.7 n.a. n.a. 212.3 7.5 286.5 280.6 222.6 7.4 279.0 285.1 246.8 8.3 277.1 293.9 267.3 8.2 289.5 333.2 282.3 7.9 320.6 362.2 286.4 8.3 327.8 366.1 288.4 8.6 336.2 374.0 289.9 8.6 339.2 381.2 2,284.2 852.0 2,433.2 832.5 2,512.9 775.6 2,541.7 731.2 2,498.1 705.1 2,493.3r 701.2r 2,489.8 687.4 2,488.2 683.6 Commercial banks 12 Savings deposits, including MMDAs 13 Small time deposits'' 14 Large time deposits 10, 11 542.7 447.0 366.9 541.5 531.0 398.2 581.9 606.4 374.0 664.9 598.5 354.0 724.3 534.8 316.4 734.4 527.3r 312.0 743.4 519.4 305.4 749.8 511.6 303.0 Thrift institutions 15 Savings deposits, including MMDAs 16 Small time deposits 9 17 Large time deposits 10 383.5 585.9 174.3 349.7 617.5 161.1 338.8 562.3 120.9 377.7 464.5 83.1 421.3 393.1 68.2 425.1 387.9r 68.0 428.2 379.3 67.9 431.8 372.9 66.5 Money market mutual funds 18 General purpose and broker-dealer . 19 Institution-only 241.9 91.0 316.3 107.2 348.9 133.7 360.5 179.1 349.7 217.2 344.7r 217.2 347.6 205.6 348.7 203.5 2,101.5 7,224.8 2,249.5 7,827.2 2,493.4 8,258.0 2,764.8 8,436.5r 2,992.4 8,572.3 3,004.8r 8,591.7r 3,001.4 8,621.0 2 3 4 5 M2 M3 L Debt 6 7 8 9 Ml components Currency Travelers checks 4 Demand deposits Other checkable deposits 6 Nontrqnsaction 10 In M2 11 In M3 components Debt components 20 Federal debt 21 Nonfederal debt n.a. n.a. Not seasonally adjusted 2 22 23 24 25 26 Measures Ml M2 M3 L Debt 27 28 29 30 Ml components Currency Travelers checks 4 Demand deposits 5 Other checkable deposits 6 804.1 3,083.8 3,934.7 4,694.2 9,312.5 811.9 3,240.0 4,070.3 4,909.9 10,063.6 844.1 3,351.9 4,124.7 4,984.9 10,739.9 917.3 3.453.6 4.181.7 5,008.3 ll,191.4 r 970.6 3,470.2 4,179.0 5,018.4 11,526.6 983.0 3,473.3 4,174.2r 5,033.5r ll,569.0 r 1,001.2 3,492.3 4,174.9 5,040.5 11,600.5 1,021.9 3,510.5 4,192.8 n.a. n.a. 214.8 6.9 298.9 283.5 225.3 6.9 291.5 288.1 249.5 7.8 289.9 296.9 270.0 7.7 303.0 336.5 282.9 8.8 319.2 359.7 284.7 8.9 325.4 364.0r 287.0 8.7 336.0 369.5 290.1 8.3 343.4 380.1 2,279.7 850.8 2,428.1 830.3 2,507.8 772.8 2,536.3 728.0 2,499.6 708.8 2,490.3 700.9r 2,491.1 682.7 2,488.6 682.3 Commercial banks 33 Savings deposits, including MMDAs 34 Small time deposits . 35 Large time deposits 10 ' 11 543.8 446.0 365.9 543.0 529.5 397.1 580.0 606.3 373.0 662.4 598.7 352.8 726.2 534.5 318.0 733.4 527.0r 313.2 742.1 520.4 305.4 749.4 512.1 302.6 Thrift institutions 36 Savings deposits, including MMDAs 37 Small time deposits 38 Large time deposits 10 381.1 584.9 175.2 347.6 616.0 162.0 337.7 562.2 120.6 376.3 464.6 82.8 422.4 392.9 68.6 424.6r 387.6r 68.3 427.5 380.1 67.9 431.6 373.2 66.4 Money market mutual funds 39 General purpose and broker-dealer 40 Institution-only 240.8 91.4 314.6 107.8 346.8 134.4 358.1 180.3 348.0 213.8 343.5r 210.0 345.9 199.8 347.6 202.2 Repurchase agreements and eurodollars 41 Overnight 42 Term 83.2 227.4 77.5 178.5 74.7 158.3 76.2 127.7 75.8 124.1 74.2 123.7r 75.0 125.3 74.6 127.9 2,098.9 7,213.5 2,247.5 7,816.2 2,491.3 8,248.6 2,765.0 8,426.4r 2,970.3 8,556.3 2,993.9 8,575.0r 2,998.1 8,602.4 Nontrqnsaction 31 In M2; 32 In M3 8 components Debt components 43 Federal debt 44 Nonfederal debt For notes see following page. n.a. n.a. Monetary and Credit Aggregates NOTES TO TABLE 1.21 1. Latest monthly and weekly figures are available from the Board's H.6 (508) weekly statistical release. Historical data are available from the Money and Reserves Projection Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve System, Washington, DC 20551. 2. Composition of the money stock measures and debt is as follows: Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) travelers checks of nonbank issuers; (3) demand deposits at all commercial banks other than those due to depository institutions, the U.S. government, and foreign banks and official institutions, less cash items in the process of collection and Federal Reserve float; and (4), other checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, credit union share draft accounts, and demand deposits at thrift institutions. Seasonally adjusted Ml is computed by summing currency, travelers checks, demand deposits, and OCDs, each seasonally adjusted separately. M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements (RPs) issued by all depository institutions and overnight Eurodollars issued to U.S. residents by foreign branches of U.S. banks worldwide, (2) savings (including MMDAs) and small time deposits (time deposits—including retail RPs—in amounts of less than $100,000), and (3) balances in both taxable and tax-exempt general purpose and broker-dealer money market funds. Excludes individual retirement accounts (IRAs) and Keogh balances at depository institutions and money market funds. Also excludes all balances held by U.S. commercial banks, money market funds (general purpose and broker-dealer), foreign governments and commercial banks, and the U.S. government. Seasonally adjusted M2 is computed by adjusting its non-Mi component as a whole and then adding this result to seasonally adjusted Ml. M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of $100,000 or more) issued by all depository institutions, (2) term Eurodollars held by U.S. residents at foreign branches of U.S. banks worldwide and at all banking offices in the United Kingdom and Canada, and (3) balances in both taxable and tax-exempt, institution-only money market funds. Excludes amounts held by depository institutions, the U.S. government, money market funds, and foreign banks and official institutions. Also excluded is the estimated amount of overnight RPs and Eurodollars held by institution-only money market funds. Seasonally adjusted M3 is computed by adjusting its non-M2 component as a whole and then adding this result to seasonally adjusted M2. L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury securities, commercial paper, and bankers acceptances, net of money A15 market fund holdings of these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, short-term Treasury securities, commercial paper, and bankers acceptances, each seasonally adjusted separately, and then adding this result to M3. Debt: Debt of domestic nonfinancial sectors consists of outstanding credit market debt of the U.S. government, state and local governments, and private nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers acceptances, and other debt instruments. Data are derived from the Federal Reserve Board's flow of funds accounts. Debt data are based on monthly averages. This sum is seasonally adjusted as a whole. 3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of depository institutions. 4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. Travelers checks issued by depository institutions are included in demand deposits. 5. Demand deposits at commercial banks and foreign-related institutions other than those due to depository institutions, the U.S. government, and foreign banks and official institutions, less cash items in the process of collection and Federal Reserve float. 6. Consists of NOW and ATS account balances at all depository institutions, credit union share draft account balances, and demand deposits at thrift institutions. 7. Sum of (1) overnight RPs and overnight Eurodollars, (2) money market fund balances (general purpose and broker-dealer), (3) MMDAs, and (4) savings and small time deposits. 8. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S. residents, and (4) money market fund balances (institution-only), less a consolidation adjustment that represents the estimated amount of overnight RPs and Eurodollars held by institution-only money market funds. 9. Small time deposits—including retail RPs—are those issued in amounts of less than $100,000. All IRAs and Keogh accounts at commercial banks and thrift institutions are subtracted from small time deposits. 10. Large time deposits are those issued in amounts of $100,000 or more, excluding those booked at international banking facilities. 11. Large time deposits at commercial banks less those held by money market funds, depository institutions, and foreign banks and official institutions. A16 1.22 Domestic Financial Statistics • February 1993 B A N K DEBITS A N D DEPOSIT T U R N O V E R 1 Debits are in billions of dollars; turnover is ratio of debits to deposits; monthly data are at annual rates 1992 Bank group, or type of customer 19892 1990 2 1991 Apr. May June July Aug. Sept. Seasonally adjusted Demand deposits 1 All insured banks 2 Major New York City banks 3 Other banks 4 ATS-NOW accounts 4 5 Savings deposits 256,150.4 129,319.9 126,830.5 277,916.3 131,784.0 146,132.3 281,050.1 140,905.5 140,144.6 315,651.2 167,177.5 148,473.7 292,177.4 154,225.3 137,952.1 302,259.2 149,743.3 152,515.9 336,868.4 179,593.4 157,275.0 298,612.4 154,231.2 144,381.2 340,723.8 184,557.7 156,166.1 2,910.5 547.5 3,349.6 558.8 3,624.6 1,377.4 3,957.0 3,356.5 3,552.6 3,241.4 4,070.7 3,838.9 4,024.0 3,724.9 3,594.2 2,995.9 3,940.5 3,274.9 735.1 3,421.5 408.3 800.6 3,804.1 467.7 817.6 4,391.9 449.6 857.4 5,029.1 443.3 771.2 4,438.0 400.9 814.2 4,470.1 451.6 910.5 5,425.1 466.9 779.4 4,445.7 414.4 880.7 5,350.4 443.2 15.2 3.0 16.5 2.9 16.1 3.3 15.6 4.7 13.7 4.4 15.6 5.1 15.3 5.0 13.5 4.1 14.7 4.6 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 7 Major New York City banks 8 Other banks 9 ATS-NOW accounts 4 10 Savings deposits Not seasonally adjusted DEBITS TO Demand deposits3 11 All insured banks 12 Major New York City banks 13 Other banks 14 ATS-NOW accounts 4 15 MMDAs 6 16 Savings deposits 256,133.2 129,400.1 126,733.0 277,400.0 131,784.7 145,615.3 280,922.8 140,563.0 140,359.7 314,388.6 164,994.4 149,394.3 290,950.2 153,163.7 137,786.5 311,175.8 154,953.8 156,222.0 336,160.9 178,555.6 157,605.3 310,646.4 162,973.4 147,673.1 329,854.7 178,998.2 150,856.4 2,910.7 2,677.1 546.9 3,342.2 2,923.8 557.9 3,622.4 n.a 1,408.3 4,104.5 n.a 3,459.2 3,515.5 n.a 3,031.2 4,032.5 n.a 3,472.9 3,925.6 n.a 3,461.5 3,669.6 n.a 3,110.6 3,938.9 n.a 3,317.2 735.4 3,426.2 408.0 799.6 3,810.0 466.3 817.5 4,370.1 450.6 849.3 5,042.4 442.7 785.8 4,551.3 409.3 842.5 4,668.3 464.7 903.0 5,312.2 465.4 824.6 4,867.0 430.2 852.6 5,205.2 428.0 15.2 7.9 2.9 16.4 8.0 2.9 16.1 n.a 3.4 15.7 n.a 4.9 13.7 n.a 4.3 15.6 n.a 4.9 15.2 n.a 4.8 14.0 n.a 4.3 14.9 n.a 4.6 DEPOSIT TURNOVER Demand deposits3 17 All insured banks 18 Major New York City banks 19 Other banks 20 ATS-NOW accounts 4 21 MMDAs 6 22 Savings deposits 1. Historical tables containing revised data for earlier periods can be obtained from the Banking and Money Market Statistics Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve System, Washington, DC 20551. Data in this table also appear on the Board's G.6 (406) monthly statistical release. For ordering address, see inside front cover. 2. Annual averages of monthly figures. 3. Represents accounts of individuals, partnerships, and corporations and of states and political subdivisions. 4. Accounts authorized for negotiable orders of withdrawal (NOWs) and accounts authorized for automatic transfer to demand deposits (ATSs). 5. Excludes ATS and NOW accounts. 6. Money market deposit accounts. Commercial Banking Institutions 1.23 A17 All Commercial Banks 1 L O A N S A N D SECURITIES Billions of dollars, averages of Wednesday figures 1991 1992 Dec. Ian. r Feb. r Mar. r Apr/ May r June r July r Aug/ Sept/ Oct/ Nov. Seasonally adjusted 1 Total loans and securities 1 2 U.S. government securities i Other securities 4 Total loans and leases 5 Commercial and industrial . . . . . 6 Bankers acceptances h e l d 2 . . . 7 Other commercial and industrial 8 U.S. addressees 3 9 Non-U.S. addressees 10 Real estate 11 Individual 12 Security 13 Nonbank financial institutions 14 Agricultural 15 State and political subdivisions Foreign banks lb 17 Foreign official institutions 18 Lease-financing receivables 19 All other loans r 2,852.0 2,854.8 2,863.1 2,877.5 2,877.6 2,883.7 2,884.4 2,897.2 2,913.3 2,924.9 2,936.6 562.6 179.4r 2,096.6 r 618.0 r 7.3 566.2 179.7 2,106.1 617.3 7.2 571.2 180.5 2,103.1 613.2 7.2 579.5 178.1 2,105.5 610.9 6.9 592.3 178.5 2,106.7 609.2 6.5 601.7 177.1 2,098.8 607.3 6.6 611.7 175.5 2,096.5 604.7 6.1 619.5 177.8 2,087.1 603.1 6.7 634.1 178.1 2,085.1 600.7 6.5 639.1 178.0 2,096.2 602.9 6.3 646.2 178.9 2,099.8 603.3 7.3 653.6 177.9 2,105.0 606.0 7.7 610.7 r 603.3 r 7.4 873.1 363.5 54.5 610.1 603.7 6.5 873.5 363.1 59.4 606.0 599.5 6.5 877.5 363.6 57.1 603.9 597.3 6.7 879.4 362.2 60.4 602.7 595.8 6.9 881.4 360.7 64.9 600.7 593.5 7.1 882.6 358.9 61.6 598.6 591.7 7.0 881.2 359.0 63.9 596.4 588.8 7.6 878.9 358.6 60.7 594.2 586.8 7.4 878.4 357.2 62.5 596.6 588.9 7.6 882.6 356.5 66.2 596.0 588.0 8.1 887.1 355.2 65.7 598.3 590.3 8.0 889.5 354.6 64.4 40.6 34.0 40.8 33.7 42.6 33.5 43.7 34.3 42.7 34.4 43.0 34.3 42.0 34.8 40.7 34.8 41.8 35.3 44.3 35.3 44.3 35.0 45.1 34.7 29.1 7.4 2.4 31.7 42.4 28.0 7.2 2.3 31.5 49.2 28.1 6.7 2.1 31.6 47.1 28.0 6.5 2.1 31.5 46.5 27.7 6.5 2.0 31.6 45.6 27.2 6.9 2.0 31.7 43.3 26.8 7.5 2.0 32.0 42.4 26.4 7.8 2.1 31.0 43.1 26.0 7.1 2.1 30.7 43.3 26.0 7.9 2.1 30.8 41.6 25.5 7.2 2.1 30.6 43.8 25.2 6.8 2.5 30.5 45.8 2,838.7 Not seasonally adjusted 20 Total loans and securities 1 21 U.S. government securities 22 Other securities 23 Total loans and leases' 24 Commercial and industrial . . . . . 25 Bankers acceptances h e l d 2 . . . 26 Other commercial and industrial 27 U.S. addressees 28 Non-U.S. addressees 29 Real estate 30 Individual 31 Security 32 Nonbank financial institutions 33 Agricultural 34 State and political subdivisions Foreign banks 35 36 Foreign official institutions 37 Lease-financing receivables 38 All other loans r 2,848.8 2,857.4 2,864.0 2,876.6 2,873.1 2,884.6 2,876.7 2,893.7 2,912.5 2,927.4 2,942.2 558.6 r 179.7r 2,106.8 r 619.3 r 7.6 565.7 180.3 2,102.8 614.2 7.2 575.1 180.5 2,101.8 612.4 7.4 584.9 178.2 2,100.8 613.5 6.9 594.5 178.1 2,104.0 612.1 6.3 601.8 176.8 2,094.6 609.6 6.6 610.7 175.5 2,098.4 606.7 6.2 616.7 176.8 2,083.2 602.9 6.3 631.8 178.2 2,083.7 599.0 6.3 636.9 177.9 2,097.7 600.1 6.3 644.8 179.1 2,103.4 601.8 7.3 654.8 178.1 2,109.3 604.7 7.9 611.7 r 604.7 r 7.0 873.4 368.1 55.1 606.9 600.0 6.9 872.9 367.4 59.0 605.0 598.1 6.9 874.5 363.6 61.7 606.7 599.8 6.9 875.9 359.7 62.2 605.8 598.6 7.2 880.2 358.1 66.4 603.0 595.9 7.1 883.2 357.3 58.2 600.5 593.2 7.4 881.6 356.9 63.8 596.6 589.0 7.6 880.1 355.9 58.7 592.7 585.3 7.3 880.4 356.2 60.7 593.9 586.4 7.5 883.5 357.9 64.1 594.5 587.0 7.5 888.5 356.1 65.9 596.8 589.4 7.4 890.9 356.1 65.0 41.9 34.0 41.3 33.2 42.3 32.7 43.1 33.0 42.3 33.4 42.3 33.9 42.3 35.0 41.0 35.6 42.0 36.2 43.6 36.3 43.8 35.8 45.3 35.0 29.0 7.9 2.4 31.7 44.1 28.4 7.0 2.3 31.8 45.4 28.2 6.6 2.1 31.7 46.0 28.0 6.4 2.1 31.7 45.2 27.6 6.4 2.0 31.6 44.0 27.3 6.8 2.0 31.7 42.3 26.8 7.2 2.0 31.7 44.2 26.2 7.7 2.1 30.8 42.4 25.9 6.9 2.1 30.6 43.6 25.9 8.0 2.1 30.7 45.3 25.5 7.4 2.1 30.7 45.6 25.2 7.2 2.5 30.6 46.7 2,845.l 1. Adjusted to exclude loans to commercial banks in the United States. 2. Includes nonfinancial commercial paper held. 3. United States includes the fifty states and the District of Columbia. A18 1.24 Domestic Financial Statistics • February 1993 MAJOR N O N D E P O S I T F U N D S O F C O M M E R C I A L B A N K S 1 Billions of dollars, monthly averages 1991 1992 Source of funds Dec. Jan. Feb. Mar. Apr. May June r July r Aug. Sept. r Oct. r Nov. Seasonally adjusted 1 Total nondeposit funds 2 2 Net balances due to related foreign offices 3 . . . 3 Borrowings from other than commercial banks in United States 4 4 Domestically chartered banks 5 Foreign-related banks 281.4r 39.2 283. l r 43.4 286.8r 42.0 287.0* 45.1 290.0" 49.3 289.6* 54.2 292.0 60.2 292.4 61.8 297.8' 59.0r 304.7 61.9 304.2 65.4 308.2 68.7 242.3r 154.7r 87.5 239.6r 156.5r 83.1 244.8r 159.8r 84.9 241.9* 155.8r 86.1 240.7r 152.8r 87.9 235.4r 147.6r 87.8 231.9 144.3 87.5 230.6 142.8 87.7 238.9 149.1 89.8 242.8 150.8 91.9 238.7 151.9 86.8 239.5 150.7 88.7 Not seasonally adjusted 6 Total nondeposit funds 7 Net balances due to related foreign offices . . . 8 Domestically chartered banks 9 Foreign-related banks 10 Borrowings from other than commercial banks in United States 11 Domestically chartered banks 12 Federal funds and security RP borrowings Other 6 13 14 Foreign-related banks 279.7r 42.7 -3.8 46.5 279.0" 44.1 -4.6 48.7 287.4r 42.2 -.7 42.9 290.9* 45.5 -.7 46.3 287.2* 47.8 -5.0 52.9 295.4* 56.7 -4.3 60.9 293.5 59.8 -6.4 66.2 288.9 58.3 -7.0 65.3 294.9* 57.4* -9.3 66.6* 302.0 61.2 -11.0 72.3 305.5 64.7 -12.8 77.5 312.9 69.8 -11.7 81.4 236.9r 153.4r 234.9* 152.2* 245.2r 160.3r 245.4r 158.9* 239.4* 150.8* 238.8* 150.2* 233.7 144.5 230.6 141.4 237.5* 147.4 240.8 149.8 240.8 152.9 243.1 155.2 150.3r 3.1 83.5 148.8r 3.4 82.7 156.8r 3.5 84.9 155.7* 3.3 86.5 147.4* 3.4 88.5 146.4* 3.9 88.5 140.4 4.1 89.2 137.2 4.2 89.2 143.5 3.9 90.2 146.0 3.8 91.0 149.4 3.6 87.9 151.1 4.1 87.9 423.9 422.6 416.0 413.6 413.7 412.6 406.9 407.4 399.9 398.8 396.7 398.0 392.4 393.7 386.1 385.9 384.6 386.2 381.2 382.4 373.3 373.4 370.0 369.7 26.4 25.4 27.8 33.1 19.5 25.2 21.8 20.1 19.9 17.7 17.0 21.0 25.8 25.2 21.9 19.7 32.6 22.4 25.4 28.7 22.4 21.9 19.2 16.3 MEMO Gross large time deposits1 15 Seasonally adjusted 16 Not seasonally adjusted U.S. Treasury demand balances at commercial banks 17 Seasonally adjusted : 18 Not seasonally adjusted 1. Commercial banks are nationally and state-chartered banks in the fifty states and the District of Columbia, agencies and branches of foreign banks, New York investment companies majority owned by foreign banks, and Edge Act corporations owned by domestically chartered and foreign banks. Data in this table also appear in the Board's G.10 (411) release. For ordering address, see inside front cover. 2. Includes federal funds, repurchase agreements (RPs), and other borrowing from nonbanks and net balances due to related foreign offices. 3. Reflects net positions of U.S. chartered banks, Edge Act corporations, and U.S. branches and agencies of foreign banks with related foreign offices plus net positions with own International Banking Facilities (IBFs). 4. Borrowings through any instrument, such as a promissory note or due bill, given for the purpose of borrowing money for the banking business. This includes borrowings from Federal Reserve Banks and from foreign banks, term federal funds, loan RPs, and sales of participations in pooled loans. 5. Figures are based on averages of daily data reported weekly by approximately 120 large banks and quarterly or annual data reported by other banks. 6. Figures are partly averages of daily data and partly averages of Wednesday data. 7. Time deposits in denominations of $100,000 or more. Estimated averages of daily data. 8. U.S. Treasury demand deposits and Treasury tax-and-loan notes at commercial banks. Averages of daily data. Commercial Banking Institutions 1.25 A S S E T S A N D LIABILITIES OF COMMERCIAL B A N K S 1 A19 Wednesday figures Millions of dollars 1992 Account Sept. 30r Oct. 7 r Oct. 14r Oct. 21r Oct. 28r Nov. 4 Nov. 11 Nov. 18 Nov. 25 3,082,431 779,171 616,169 163,001 36,801 22,704 2,823 11,274 2,266,460 162,545 2,103,915 602,370 883,465 73,082 810,383 357,296 260,784 210,743 23,568 31,069 27,387 84,280 44,440 285,895 3,085,254 781,427 617,554 163,873 40,669 25,291 3,205 12,174 2,263,158 161,551 2,101,607 602,275 888,104 73,791 814,313 355,288 255,940 198,246 24,353 29,551 28,111 71,798 44,433 289,218 3,095,321 785,062 621,621 163,442 40,051 24,217 3,394 12,441 2,270,208 167,425 2,102,783 602,023 888,400 73,811 814,589 355,432 256,928 241,223 36,036 31,915 33,801 95,372 44,099 291,071 3,079,500 784,038 620,875 163,163 40,023 24,689 3,292 12,043 2,255,439 151,975 2,103,464 601,066 887,285 73,817 813,469 356,727 258,385 199,319 23,330 31,326 29,036 71,849 43,779 286,597 3,083,140 781,244 618,179 163,065 41,140 24,924 3,592 12,624 2,260,756 157,129 2,103,627 601,072 889,267 73,770 815,496 356,737 256,551 203,675 24,519 31,658 29,978 73,334 44,186 287,048 3,103,254 787,271 624,152 163,118 42,073 25,489 3,375 13,209 2,273,910 165,527 2,108,383 603,766 891,468 73,677 817,792 356,376 256,773 211,216 27,764 28,919 30,220 80,059 44,232 300,123 3,111,423 790,010 627,609 162,401 41,533 25,550 3,299 12,683 2,279,880 172,922 2,106,959 603,223 893,176 73,778 819,398 355,066 255,495 223,869 28,813 30,963 32,517 87,193 44,361 297,892 3,105,865 787,732 625,523 162,209 45,636 28,974 3,097 13,566 2,272,497 166,106 2,106,391 604,184 890,308 73,777 816,531 355,879 256,020 207,948 20,818 32,578 29,314 79,980 45,257 291,631 3,114,204 788,803 626,442 162,361 42,819 27,775 2,727 12,317 2,282,582 171,587 2,110,995 606,197 889,600 73,725 815,875 356,134 259,065 221,399 26,321 31,198 32,291 86,893 44,723 286,843 3,579,069 3,572,718 3,627,615 3,565,416 3,573,863 3,614,593 3,633,184 3,605,444 3,622,446 2,488,529 728,450 3,933 39,739 684,778 729,024 650,217 380,838 498,834 34,143 464,691 329,238 2,497,439 719,539 2,560 37,827 679,153 740,630 651,618 385,652 484,893 19,423 465,470 326,467 2,529,188 752,067 3,003 44,696 704,368 743,210 649,609 384,302 508,243 14,469 493,774 325,993 2,474,466 708,411 2,400 38,174 667,838 738,886 647,297 379,872 496,316 15,880 480,436 331,072 2,478,780 718,235 2,502 39,037 676,6% 738,839 645,007 376,699 491,593 16,221 475,372 339,965 2,517,869 747,585 3,394 40,103 704,088 747,952 643,982 378,349 499,145 8,097 491,048 332,668 2,523,261 752,638 2,445 42,239 707,954 751,315 642,109 377,199 513,754 18,701 495,053 331,197 2,495,559 734,583 2,821 38,682 693,079 744,349 640,038 376,590 500,918 6,924 493,994 344,768 2,515,270 754,848 4,288 43,536 707,025 743,563 638,816 378,044 491,657 6,964 484,693 350,016 3,316,600 3,308,799 3,363,423 3,301,855 3,310,337 3,349,682 3,368,211 3,341,245 3,356,943 262,469 263,919 264,192 263,561 263,526 264,911 264,973 264,199 265,503 ALL COMMERCIAL BANKING INSTITUTIONS 2 1 7 3 4 6 7 8 9 10 11 17 N 14 15 16 17 18 19 7.0 71 77 n 24 Assets Loans and securities Investment securities U.S. government securities Other Trading account assets U.S. government securities Other securities Other trading account assets Total loans Interbank loans Loans excluding interbank Commercial and industrial Real estate Revolving home equity Other Individual All other Total cash assets Balances with Federal Reserve Banks Cash in vault Demand balances at U.S. depository institutions.. Cash items Other cash assets Other assets 25 Total assets 76 77 28 79 30 31 37, 33 34 35 36 37 Liabilities Total deposits Transaction accounts Demand, U.S. government Demand, depository institutions Other demand and all checkable deposits Savings deposits (excluding checkable) Small time deposits Time deposits over $100,000 Borrowings Treasury tax and loan notes Other Other liabilities 38 Total liabilities 39 Residual (assets less liabilities)3 Footnotes appear on the following page. A20 1.25 Domestic Financial Statistics • February 1993 A S S E T S A N D LIABILITIES OF COMMERCIAL B A N K S 1 Wednesday figures—Continued Millions of dollars Account Sept. 30 r Oct. T Oct. 14r Oct. 21 r Oct. 28 r Nov. 4 Nov. 11 Nov. 18 Nov. 25 2,731,481 718,699 577,310 141,388 36,801 22,704 2,823 11,274 1,975,981 137,808 1,838,174 441,132 831,015 73,082 757,933 357,296 208,730 180,119 22,501 31,037 25,820 81,901 2,746,792 723,802 582,118 141,684 40,051 24,217 3,394 12,441 1,982,939 141,840 1,841,099 440,356 835,849 73,811 762,038 355,432 209,462 211,380 35,060 31,879 32,168 92,883 19,391 175,588 2,728,854 722,834 581,117 141,718 40,023 24,689 3,292 12,043 1,965,997 129,415 1,836,582 439,367 834,727 73,817 760,910 356,727 205,760 170,971 22,900 31,291 27,546 69,487 19,746 168,941 2,733,532 721,480 580,034 141,446 41,140 24,924 3,592 12,624 1,970,912 133,381 1,837,532 439,259 836,866 73,770 763,0% 356,737 204,669 175,091 23,783 31,622 28,511 70,801 20,373 171,364 2,754,932 726,237 584,583 141,654 42,073 25,489 3,375 13,209 1,986,623 144,322 1,842,301 441,480 838,852 73,677 765,176 356,376 205,593 183,804 27,364 28,885 28,755 77,884 20,894 177,747 2,756,749 727,887 586,516 141,371 41,533 25,550 3,299 12,683 1,987,329 146,729 1,840,601 440.761 840,540 73,778 766.762 355,066 204,234 196,393 2,750,033 726,243 584,664 141,579 45,636 28,974 3,097 13,566 1,978,154 139,071 1,839,083 440,321 837,678 73,777 763,901 355,879 205,205 179,712 20,345 32,542 27,956 77,686 176,162 2.743.145 720,952 579,060 141,891 40,669 25,291 3,205 12,174 1,981,524 140,924 1,840,600 440,666 835,657 73,791 761,866 355,288 208,990 168,781 23,946 29,516 26,691 69,402 19,225 171,221 169,115 2,754,546 726,755 585,404 141,351 42,819 27,775 2,727 12,317 1,984,972 143,686 1,841,286 441,699 836,941 73,725 763,216 356,134 206,512 193,261 25,643 31,162 30,935 84,582 20,966 168,802 3,087,762 3.083.146 3,133,760 3,068,765 3,079,988 3,116,483 3,130,146 3,098,860 3,116,610 2,330,548 717,040 3,932 36,974 676,135 724,163 647,564 241,781 363,159 34,143 329,016 135,159 2,339,989 708,472 2,559 35,278 670,635 735,868 648,968 246,681 352,190 19,423 332,767 130,621 2,371,981 740,945 3,002 42,161 695,782 738,355 646,956 245,725 370,917 14,469 356,448 130,244 2,318,252 697,728 2,399 35,723 659,606 733,960 644,656 241,908 360,725 15,880 344,845 129,800 2,319,916 707,324 2,502 36,568 668,254 734,117 642,382 236,093 364,954 2,363,986 742,098 2,443 39,837 699,817 746,441 639,499 235,949 373.398 18,701 354,697 131,362 2,336,475 724,219 348,733 135,166 2,358,732 736,827 3,393 37,407 696,027 743,133 641,368 237,405 363,333 8,097 355,236 133,080 36,323 685,075 739,619 637,451 235,186 366,520 6,924 359,5% 135,239 2,353,837 744,300 4,287 41,115 698,898 738,783 636,225 234,528 364,650 6,964 357,686 136,193 2,828,866 2,822,801 2,873,142 2,808,777 2,820,035 2,855,145 2,868,747 2,838,234 2,854,680 258,895 260,346 260,619 259,988 259,953 261,338 261.399 260,626 261,929 DOMESTICALLY CHARTERED COMMERCIAL BANKS 4 Assets 40 Loans and securities 41 Investment securities 42 U.S. government securities 43 Other 44 Trading account assets 45 U.S. government securities 46 Other securities 47 Other trading account assets 48 Total loans 49 Interbank loans 50 Loans excluding interbank 51 Commercial and industrial 52 Real estate 53 Revolving home equity 54 Other 55 Individual 56 All other 57 Total cash assets 58 Balances with Federal Reserve Banks 59 Cash in vault 60 Demand balances at U.S. depository institutions 61 Cash items 62 Other cash assets 63 Other assets 64 Total assets 65 66 67 68 69 70 71 72 73 74 75 76 Liabilities Total deposits Transaction accounts Demand, U.S. government Demand, depository institutions Other demand and all checkable deposits Savings deposits (excluding checkable) Small time deposits Time deposits over $100,000 Borrowings Treasury tax and loan notes Other Other liabilities 77 Total liabilities 78 Residual (assets less liabilities) 3 18,861 1. Excludes assets and liabilities of International Banking Facilities. 2. Includes insured domestically chartered commercial banks, agencies and branches of foreign banks, Edge Act and Agreement corporations, and New York State foreign investment corporations. Data are estimates for the last Wednesday of the month based on a sample of weekly reporting foreign-related and domestic institutions and quarter-end condition reports. 16,221 28,021 30,926 30,991 84,884 21,548 177,004 21,182 2,821 3. This balancing item is not intended as a measure of equity capital for use in capital adequacy analysis. 4. Includes all member banks and insured nonmember banks. Loans and securities data are estimates for the last Wednesday of the month based on a sample of weekly reporting banks and quarter-end condition reports. Weekly Reporting Commercial Banks 1.26 A21 A S S E T S A N D LIABILITIES OF L A R G E W E E K L Y REPORTING COMMERCIAL B A N K S Millions of dollars, Wednesday figures 1992 Account Sept. 30 Oct. 7* Oct. 14* Oct. 21* Oct. 28* Nov. 4 Nov. 11 Nov. 18 Nov. 25 ASSETS 1 Cash and balances due from depository institutions 2 U.S. Treasury and government securities 3 Trading account 4 Investment account 5 Mortgage-backed securities 1 All others, by maturity 6 One year or less 7 One year through five years 8 More than five years 9 Other securities 10 Trading account 11 Investment account 12 State and political subdivisions, by maturity N One year or less 14 More than 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 44 Federal funds sold2 To commercial banks in the United States To nonbank brokers and dealers To others 3 Other loans and leases, gross Commercial and industrial Bankers acceptances and commercial paper All other U.S. addressees Non-U.S. addressees Real estate loans Revolving, home equity All other To individuals for personal expenditures To financial institutions Commercial banks in the United States Banks in foreign countries Nonbank financial institutions For purchasing and carrying securities To finance agricultural production To states and political subdivisions To foreign governments and official institutions All other loans Lease-financing receivables LESS: Unearned income Loan and lease reserve Other loans and leases, net Other assets 45 Total assets Footnotes appear on the following page. 105,578r 268,067r 20,484 247,582r 79,193 97,992 267,039 20,632 246,408 78,910 130,352 266,938 20,951 245,987 78,787 99,768 267,738 22,406 245,332 79,957 103,566 267,627 22,236 245,390 80,587 108,701 271,276 22,714 248,562 81,130 115,382 272,236 23,108 249,128 81,048 105,484 274,025 26,016 248,008 79,697 114,899 273,052 25,0% 247,955 82,286 26,686 77,306* 64,398r 55,009 2,717 52,292 20,986 3,411 17,576 31,306 11,039 26,823 77,130 63,546 55,589 3,097 52,492 20,860 3,377 17,483 31,632 11,936 26,818 79,491 60,891 55,583 3,287 52,2% 20,759 3,255 17,504 31,537 12,204 26,661 78,587 60,127 55,452 3,185 52,267 20,763 3,253 17,510 31,504 11,808 27,730 77,608 59,466 55,255 3,485 51,770 20,754 3,252 17,503 31,016 12,389 27,639 76,981 62,811 55,607 3,270 52,337 20,634 3,220 17,414 31,703 12,974 28,115 77,436 62,528 55,465 3,1% 52,270 20,621 3,217 17,405 31,649 12,449 28,954 78,006 61,351 55,281 2,993 52,288 20,613 3,213 17,399 31,675 13,334 29,349 76,134 60,186 54,861 2,624 52,237 20,586 3,223 17,364 31,651 12,086 83,827 56,245 24,064 3,518 976,851r 277,980* l,591 r 276,390* 274,521* 1,869 396,795* 42,529* 354,265* 176,826* 38,281* 13,600* 2,9%* 21,685 15,937 6,262 15,616* 907 23,950* 24,298* 2,668 36,985* 937,199* 162,321* 87,255 54,951 26,651 5,653 974,798 278,089 1,586 276,503 274,787 1,716 400,006 43,056 356,950 176,088 37,302 13,642 2,031 21,629 14,602 6,194 15,420 923 21,844 24,332 2,693 36,940 935,165 157,466 89,053 59,267 24,323 5,462 978,595 278,397 1,778 276,619 274,646 1,973 399,303 43,081 356,222 176,160 38,116 13,960 2,272 21,884 17,369 6,1% 15,293 861 22,622 24,280 2,685 36,951 938,959 160,098 78,155 48,863 24,679 4,613 973,352 277,390 1,885 275,505 273,575 1,930 397,838 43,015 354,822 176,978 37,256 13,232 2,721 21,302 15,677 6,152 15,227 853 21,709 24,273 2,686 36,997 933,669 155,735 80,197 51,969 23,394 4,833 976,168 277,627 1,895 275,732 274,004 1,728 399,505 43,020 356,486 176,937 37,704 13,776 2,384 21,544 16,228 6,121 15,159 836 21,845 24,205 2,685 37,033 936,449 157,676 82,011 54,221 22,699 5,091 980,088 279,677 2,146 277,530 275,760 1,771 400,995 42,975 358,020 176,742 39,385 14,542 1,976 22,866 14,492 6,116 15,080 1,426 21,820 24,355 2,647 37,399 940,042 163,695 84,964 56,981 22,805 5,179 979,441 278,933 2,328 276,605 274,931 1,673 402,766 43,144 359,622 175,966 39,154 14,828 1,927 22,399 14,818 6,015 15,070 1,337 21,166 24,217 2,638 37,449 939,354 163,139 79,924 49,537 25,468 4,919 977,720 279,156 2,349 276,807 275,157 1,650 400,746 43,118 357,628 176,346 39,384 15,453 1,758 22,173 14,056 5,957 15,000 1,397 21,511 24,168 2,363 37,507 937,851 157,612 82,073 53,874 23,919 4,281 982,278 280,827 2,649 278,178 276,427 1,751 399,698 43,061 356,636 176,774 39,929 15,236 2,459 22,234 16,323 5,901 15,000 1,326 22,354 24,148 2,329 37,401 942,548 157,347 l,623,040r 1,612,442 1,653,186 1,602,325 1,613,159 1,634,305 1,642,990 1,623,511 1,636,867 A22 1.26 Domestic Financial Statistics • February 1993 A S S E T S A N D LIABILITIES OF LARGE W E E K L Y REPORTING COMMERCIAL BANKS—Continued Millions of dollars, Wednesday figures 1992 Account Sept. 30 Oct. 7 r Oct. 14r Oct. 21 r Oct. 28 r Nov. 4 Nov. 11 Nov. 18 N o v . 25 1,111,323r 265,697 r 215,279 r 50,418 8,484 2,359 21,854 6,524 934 10,263 106,683 738,943 r 713,306 r 25,637 r 21,721 r 1,787 1,826 304 1,116,133 254,295 208,837 45,458 7,786 1,564 21,388 5,210 652 8,857 108,737 753,101 726,715 26,386 22,139 2,135 1,809 303 1,139,363 279,313 226,091 53,223 8,215 1,801 26,725 5,423 576 10,483 107,208 752,841 726,144 26,698 22,373 2,137 1,883 304 1,100,247 249,898 203,142 46,757 8,320 1,439 22,028 4,825 671 9,473 106,781 743,567 716,930 26,637 22,282 2,139 1,903 314 1,102,562 255,454 206,645 48,809 8,245 1,471 22,579 5,488 699 10,328 110,515 736,594 710,087 26,507 22,189 2,133 1,868 318 1,123,989 264,307 214,955 49,352 9,032 2,070 22,800 5,144 882 9,424 116,118 743,564 716,627 26,936 22,236 2,355 2,036 310 1,126,347 268,261 219,426 48,835 8,406 1,471 24,533 5,127 718 8,580 114,698 743,389 716,508 26,880 22,136 2,363 2,069 312 1,109,473 260,881 212,106 48,775 8,481 1,703 22,130 5,000 698 10,763 113,443 735,149 708,176 26,973 22,279 2,385 1,993 316 1,123,883 275,826 221,763 54,063 9,867 2,677 25,783 5,714 682 9,339 113,745 734,312 707,490 26,822 22,065 2,354 2,088 316 271,049 r 380 28,973 241,696 r 260,794 0 15,211 245,583 278,714 166 11,437 267,111 267,409 0 12,340 255,069 271,319 0 13,195 258,124 271,436 0 6,605 264,830 278,776 0 15,769 263,007 272,522 125 5,187 267,210 271,604 783 5,149 265,672 LIABILITIES 46 Deposits 47 Demand deposits 48 Individuals, partnerships, and corporations 49 Other holders 50 States and political subdivisions 51 U.S. government 52 Depository institutions in the United States . . . 53 Banks in foreign countries 54 Foreign governments and official institutions . . 55 Certified and officers' checks 56 Transaction balances other than demand deposits 4 . 57 Nontransaction balances 58 Individuals, partnerships, and corporations 59 Other holders 60 States and political subdivisions 61 U.S. government 62 Depository institutions in the United States . . . 63 Foreign governments, official institutions, and banks . 64 Liabilities for borrowed money 5 65 Borrowings from Federal Reserve Banks 66 Treasury tax and loan notes 67 Other liabilities for borrowed money 68 Other liabilities (including subordinated notes and debentures) 69 Total liabilities 70 Residual (total assets less total liabilities) 7 106,83 r 101,784 101,021 100,537 105,684 104,173 102,714 106,564 107,309 l,489,203 r 1,478,711 1,519,097 1,468,193 1,479,565 1,499,597 1,507,837 1,488,559 1,502,796 133,837r 133,731 134,088 134,131 133,594 134,708 135,152 134,952 134,071 l,324,948 r 126,501 1,056 515 541 24,834 —11,33 l r 1,328,023 131,101 1,060 516 544 24,815 -11,404 1,329,144 130,302 1,034 492 542 24,683 -14,370 1,324,409 126,954 1,031 490 541 24,945 -13,428 1,325,890 121,524 1,023 484 539 25,033 -9,651 1,333,193 123,005 1,061 476 585 24,887 -15,530 1,332,746 121,893 1,060 477 583 24,919 -14,202 1,335,294 121,532 1,040 476 563 24,670 -13,777 1,335,241 121,719 1,014 465 549 25,001 -10,893 MEMO 71 72 73 74 75 76 77 Total loans and leases, gross, adjusted, plus securities' Time deposits in amounts of $100,000 or more Loans sold outright to affiliates 9 Commercial and industrial Other Foreign branch credit extended to U.S. residents 1 0 ... Net due to related institutions abroad 1. Includes certificates of participation, issued or guaranteed by agencies of the U.S. government, in pools of residential mortgages. 2. Includes securities purchased under agreements to resell. 3. Includes allocated transfer risk reserve. 4. Includes negotiable order of withdrawal accounts (NOWs), automatic transfer service (ATS), and telephone and preauthorized transfers of savings deposits. 5. Includes borrowings only from other than directly related institutions. 6. Includes federal funds purchased and securities sold under agreements to repurchase. 7. This balancing item is not intended as a measure of equity capital for use in capital-adequacy analysis. 8. Excludes loans to and federal funds transactions with commercial banks in the United States. 9. Affiliates include a bank's own foreign branches, nonconsolidated nonbank affiliates of the bank, the bank's holding company (if not a bank), and nonconsolidated nonbank subsidiaries of the holding company. 10. Credit extended by foreign branches of domestically chartered weekly reporting banks to nonbank U.S. residents. Consists mainly of commercial and industrial loans, but includes an unknown amount of credit extended to other than nonfinancial businesses. NOTE. Data that formerly appeared in table 1.28, Assets and Liabilities of Large Weekly Reporting Commercial Banks in New York City, can be obtained from the Board's H.4.2 (504) weekly statistical release. For ordering address, see inside front cover. Weekly Reporting 1.30 Commercial Banks L A R G E W E E K L Y REPORTING U . S . B R A N C H E S A N D A G E N C I E S OF FOREIGN B A N K S Liabilities 1 A23 Assets and Millions of dollars, Wednesday figures 1992 Account Sept. 30" 20 21 Cash and balances due from depository institutions U.S. Treasury and government agency securities Other securities Federal funds sold To commercial banks in the United States . . . Toothers 2 Other loans and leases, gross Commercial and industrial Bankers acceptances and commercial paper All other U.S. addressees Non-U.S. addressees Loans secured by real estate To financial institutions Commercial banks in the United States.. Banks in foreign countries Nonbank financial institutions For purchasing and carrying securities To foreign governments and official institutions All other Other assets (claims on nonrelated parties) .. 22 Total assets3 23 36 37 Deposits or credit balances due to other than directly related institutions Demand deposits Individuals, partnerships, and corporations Other Nontransaction accounts Individuals, partnerships, and corporations Other Borrowings from other than directly related institutions Federal funds purchased From commercial banks in the United States From others Other liabilities for borrowed money To commercial banks in the United States To others Other liabilities to nonrelated parties 38 Total liabilities6 1 2 3 4 5 6 7 8 9 10 11 1? N 14 IS 16 17 18 19 24 25 76 27 28 29 30 31 32 33 34 35 Oct. 7R Oct. 14R Oct. 21 R Oct. 28 Nov. 4 Nov. 11 Nov. 18 Nov. 25 20,738 19,919 20,186 19,129 18,468 18,513 19,050 18,980 24,494 8,385 22,132 6,828 15,303 161,434 97,032 24,261 8,530 17,517 4,557 12,960 160,177 97,264 24,904 8,437 19,843 7,197 12,646 161,588 97,299 25,067 8,309 22,614 5,419 17,195 160,338 97,318 24,040" 8,383R 20,966 5,632 15,333 162,213R 97,390" 24,947 8,307 20,230 4,647 15,582 161,280 97,682 25,916 8,130 22,959 7,089 15,870 162,078 97,792 25,767 7,%7 22,560 7,484 15,076 163,627 98,646 25,882 8,122 24,260 7,%2 16,298 164,107 99,033 2,666 94,366 91,372 2,994 34,725 22,797 5,649 2,604 14,544 4,629 3,230 94,034 91,099 2,934 34,730 22,469 5,920 2,262 14,287 3,405 3,068 94,231 91,321 2,910 34,799 22,198 6,034 2,178 13,985 4,952 2,904 94,415 91,521 2,894 34,804 22,587 5,849 2,174 14,565 3,387 2,813 94,577R 91,643R 2,934 34,699"" 23,424R 6,508R 2,216 14,700" 4,409 2,650 95,032 92,057 2,975 34,882 22,880 6,046 2,225 14,609 3,355 2,749 95,043 92,147 2,8% 34,895 23,358 6,276 2,122 14,960 3,509 2,837 95,808 92,858 2,951 34,891 23,686 6,435 2,079 15,172 3,816 2,695 %,338 93,410 2,927 34,910 23,877 6,320 2,266 15,291 3,829 377 1,875 30,113 371 1,939 29,965 374 1,966 28,530 378 1,863 28,964 374 L,917 R 29,736R 363 2,118 31,908 353 2,171 31,852 354 2,234 30,885 356 2,102 30,505 304,501 303,387 306,117 307,930 306,147R 308,838 311,999 314,273 313,793 99,172 4,397 99,222 3,928 99,393 3,741 99,992 3,606 102,346 3,705 102,280 3,614 102,228 3,689 102,670 3,658 104,805 3,817 3,428 969 94,775 3,144 784 95,294 2,993 748 95,652 2,894 712 96,386 2,879 826 98,641 2,898 716 98,666 2,976 713 98,539 2,976 681 99,012 3,074 743 100,988 68,638 26,136 69,191 26,103 69,982 25,670 68,973 27,413 70,551 28,090 71,297 27,370 70,462 28,077 70,502 28,511 72,072 28,916 94,626 48,022 92,541 49,771 95,784 52,039 94,567 45,579 88,288 41,264 94,723 46,807 97,909 48,966 93,730 44,681 88,545 41,874 17,050 30,972 46,604 17,072 32,699 42,770 16,079 35,960 43,745 11,498 34,081 48,988 11,898 29,366 47,024 13,640 33,167 47,915 15,198 33,768 48,943 12,870 31,811 49,049 14,521 27,353 46,672 9,811 36,793 30,368 9,327 33,444 29,837 10,106 33,640 28,810 9,958 39,030 28,938 10,67lr 36,353R 30,222R 9,537 38,378 30,917 9,552 39,391 32,258 10,683 38,367 30,303 10,272 36,399 30,874 304,501 303,387 306,117 307,930 306,147R 308,838 311,999 314,273 313,793 203,968 43,131 200,009 38,769 201,541 39,502 205,061 40,925 203,462R 43,778R 204,071 37,220 205,718 37,053 206,002 43,153 208,088 47,631 19,2% MEMO 39 40 Total loans (gross) and securities, adjusted .. Net due to related institutions abroad 1. Includes securities purchased under agreements to resell. 2. Includes transactions with nonbank brokers and dealers in securities. 3. Includes net due from related institutions abroad for U.S. branches and agencies of foreign banks having a net "due from" position. 4. Includes other transaction deposits. 5. Includes securities sold under agreements to repurchase. 6. Includes net to related institutions abroad for U.S. branches and agencies of foreign banks having a net "due t o " position. 7. Excludes loans to and federal funds transactions with commercial banks in the United States. A24 1.32 Domestic Financial Statistics • February 1993 COMMERCIAL PAPER A N D B A N K E R S DOLLAR A C C E P T A N C E S O U T S T A N D I N G Millions of dollars, end of period Year ending December 1992 Item 1987 1988 1989 1990 1991 May June July Aug. Sept. Oct. Commercial paper (seasonally adjusted unless noted otherwise) 1 AU issuers 2 3 4 5 Financial companies 1 Dealer-placed paper Total Bank-related (not seasonally adjusted) Directly placed paper Total Bank-related (not seasonally adjusted) 6 Nonfinancial companies 5 358,997 458,464 525,831 561,142 530,300 533,719 542,205 547,242 545,801 549,731 558,468 102,742 159,777 183,622 215,123 214,445 226,552 234,212 226,943 231,586 233,977 231,132 1,428 1,248 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 174,332 194,931 210,930 199,835 183,195 168,914 171,321 179,725 173,772 179,731 182,059 43,173 43,155 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 81,923 103,756 131,279 146,184 132,660 138,253 136,672 140,574 140,443 136,023 145,277 Bankers dollar acceptances (not seasonally adjusted) 6 7 Total 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 8 9 10 11 12 13 70,565 66,631 62,972 54,771 43,770 38,384 37,767 37,733 37,090 37,814 37,599 10,943 9,464 1,479 9,086 8,022 1,064 9,433 8,510 924 9,017 7,930 1,087 11,017 9,347 1,670 9,255 7,954 1,301 9,680 8,129 1,551 9,225 7,808 1,417 9,372 7,927 1,446 10,436 9,073 1,363 10,236 8,764 1,472 0 965 58,658 0 1,493 56,052 0 1,066 52,473 0 918 44,836 0 1,739 31,014 0 1,477 27,653 0 1,338 26,749 0 1,269 27,239 0 1,851 25,866 0 1,803 25,575 0 1,204 26,159 16,483 15,227 38,854 14,984 14,410 37,237 15,651 13,683 33,638 13,095 12,703 28,973 12,843 10,351 20,577 11,893 8,702 17,790 11,569 9,062 17,135 11,825 9,015 16,893 11,600 7,861 17,628 12,227 8,051 17,536 12,116 7,849 17,633 1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales, personal, and mortgage financing; factoring, finance leasing, and other business lending; insurance underwriting; and other investment activities. 2. Includes all financial-company paper sold by dealers in the open market. 3. Bank-related series were discontinued in January 1989. 4. As reported by financial companies that place their paper directly with investors. 5. Includes public utilities and firms engaged primarily in such activities as communications, construction, manufacturing, mining, wholesale and retail trade, transportation, and services. 1.33 6. Data on bankers acceptances are gathered from institutions whose acceptances total $100 million or more annually. The reporting group is revised every January. In January 1988, the group was reduced from 155 to 111 institutions. The current group, totaling approximately 100 institutions, accounts for more than 90 percent of total acceptances activity. PRIME RATE C H A R G E D BY B A N K S on Short-Term Business Loans 1 Percent per year Date of change 1990— Jan. Rate 1 8 10.50 10.00 1991— Jan. 2 Feb. 4 May 1 Sept. 13 . Nov. 6 Dec. 23 9.50 9.00 8.50 8.00 7.50 6.50 1992— July 6.00 2 Period Average rate 1990 1991 1992 10.01 8.46 6.25 1990- -Jan. . Feb. Mar. Apr. May . June July . Aug. Sept. Oct. . Nov. Dec. 10.11 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 1. Data in this table also appear in the Board's H.15 (519) weekly and G.13 (415) monthly statistical releases. For ordering address, see inside front cover. Period 1991—Jan. ... Feb. .. Mar. .. Apr. .. May ... June .. July ... Aug. .. Sept. .. Oct. ... Nov. .. Dec. .. Average rate 9.52 9.05 9.00 9.00 8.50 8.50 8.50 8.50 8.20 8.00 7.58 7.21 Period 1992—Jan. ... Feb. .. Mar. .. Apr. .. May ... June .. July ... Aug. .. Sept. .. Oct. ... Nov. .. Dec. .. Financial Markets 1.35 A25 INTEREST R A T E S Money and Capital Markets Averages, percent per year; weekly, monthly, and annual figures are averages of business day data unless otherwise noted 1992 Item 1989 1990 1992, week ending 1991 Aug. Sept. Oct. Nov. Oct. 30 Nov. 6 Nov. 13 Nov. 20 Nov. 27 MONEY MARKET INSTRUMENTS Federal funds 1-2-3 2 Discount window borrowing ' 1 Commercial 1-month 3-month 5 6-month 8.10 6.98 5.69 5.45 3.30 3.00 3.22 3.00 3.10 3.00 3.09 3.00 2.96 3.00 3.07 3.00 2.91 3.00 2.97 3.00 3.10 3.00 9.11 8.99 8.80 8.15 8.06 7.95 5.89 5.87 5.85 3.38 3.38 3.44 3.25 3.24 3.26 3.22 3.33 3.33 3.25 3.66 3.67 3.26 3.47 3.48 3.25 3.48 3.49 3.28 3.59 3.60 3.25 3.76 3.76 3.22 3.79 3.79 8.99 8.72 8.16 8.00 7.87 7.53 5.73 5.71 5.60 3.28 3.27 3.29 3.13 3.08 3.11 3.14 3.24 3.23 3.20 3.59 3.56 3.21 3.38 3.35 3.20 3.44 3.43 3.21 3.54 3.53 3.20 3.67 3.63 3.19 3.70 3.64 paper3,5,6 3 4 6 7 8 9.21 6.93 placed3-5-7 Finance paper, directly 1-month 3-month 6-month 9 10 Bankers acceptances*'5* 3-month 6-month 8.87 8.67 7.93 7.80 5.70 5.67 3.28 3.35 3.10 3.13 3.19 3.19 3.51 3.51 3.32 3.32 3.35 3.35 3.47 3.47 3.60 3.60 3.60 3.60 11 12 13 Certificates qf deposit, marker9 1-month 3-month 6-month 9.11 9.09 9.08 8.15 8.15 8.17 5.82 5.83 5.91 3.29 3.31 3.40 3.14 3.13 3.17 3.11 3.26 3.27 3.23 3.58 3.60 3.16 3.39 3.41 3.15 3.42 3.44 3.15 3.52 3.53 3.15 3.68 3.69 3.33 3.67 3.69 14 Eurodollar deposits, 3-month 3-10 9.16 8.16 5.86 3.33 3.15 3.30 3.67 3.46 3.46 3.61 3.79 3.78 8.11 8.03 7.92 7.50 7.46 7.35 5.38 5.44 5.52 3.13 3.21 3.33 2.91 2.96 3.06 2.86 3.04 3.17 3.13 3.34 3.52 2.94 3.19 3.36 3.03 3.23 3.42 3.08 3.30 3.47 3.16 3.37 3.56 3.24 3.43 3.60 8.12 8.04 7.91 7.51 7.47 7.36 5.42 5.49 5.54 3.14 3.23 3.28 2.97 3.01 3.02 2.84 2.98 3.12 3.14 3.35 3.61 2.97 3.22 n.a. 3.05 3.27 n.a. 3.10 3.31 n.a. 3.13 3.37 3.61 3.27 3.45 n.a. 8.53 8.57 8.55 8.50 8.52 8.49 8.45 7.89 8.16 8.26 8.37 8.52 8.55 8.61 5.86 6.49 6.82 7.37 7.68 7.86 8.14 3.47 4.19 4.72 5.60 6.12 6.59 7.39 3.18 3.89 4.42 5.38 5.96 6.42 7.34 3.30 4.08 4.64 5.60 6.15 6.59 7.53 3.68 4.58 5.14 6.04 6.49 6.87 7.61 3.50 4.35 4.93 5.85 6.34 6.78 7.63 3.58 4.44 5.03 5.96 6.47 6.90 7.69 3.64 4.51 5.09 6.00 6.48 6.88 7.64 3.73 4.64 5.17 6.05 6.48 6.84 7.54 3.76 4.69 5.24 6.12 6.52 6.86 7.56 8.58 8.74 8.16 7.19 7.08 7.26 7.43 7.39 7.47 7.44 7.39 7.41 7.00 7.40 7.23 6.% 7.29 7.27 6.56 6.99 6.92 5.67 6.03 6.16 5.92 6.27 6.25 6.10 6.51 6.41 6.05 6.46 6.36 6.21 6.64 6.62 6.13 6.56 6.51 6.08 6.49 6.38 6.05 6.46 6.28 6.05 6.46 6.26 9.66 9.77 9.23 8.29 8.26 8.41 8.51 8.51 8.56 8.55 8.46 8.47 9.26 9.46 9.74 10.18 9.32 9.56 9.82 10.36 8.77 9.05 9.30 9.80 7.95 8.21 8.34 8.65 7.92 8.17 8.31 8.62 7.99 8.32 8.49 8.84 8.10 8.40 8.58 8.% 8.07 8.41 8.58 8.96 8.11 8.46 8.64 9.02 8.14 8.44 8.62 9.00 8.07 8.35 8.52 8.91 8.06 8.36 8.54 8.91 37 A-rated, recently offered utility bonds 16 9.79 10.01 9.32 8.16 8.11 8.40 8.51 8.52 8.65 8.49 8.40 8.48 MEMO: Dividend-price ratio17 38 Preferred stocks 39 Common stocks 9.05 3.45 8.96 3.61 8.17 3.25 7.21 2.97 7.14 3.00 7.22 3.07 7.43 2.98 7.31 3.01 7.40 3.02 7.44 2.98 7.41 2.98 7.45 2.94 18 19 20 U.S. Treasury bills Secondary market • 3-month 6-month 1-year Auction average ' • 1 3-month 6-month 1-year 21 22 23 24 25 26 27 Constant maturities12 1-year 2-year 3-year 5-year 7-year 10-year 30-year 15 16 17 secondary U . S . TREASURY NOTES AND BONDS Composite 28 More than 10 years (long-term) STATE AND LOCAL NOTES AND BONDS Moody's series13 29 30 Baa 31 Bond Buyer series CORPORATE BONDS 32 Seasoned issues, all industries 15 33 34 35 36 Rating group Aaa Aa A Baa 1. The daily effective federal funds rate is a weighted average of rates on trades through New York brokers. 2. Weekly figures are averages of seven calendar days ending on Wednesday of the current week; monthly figures include each calendar day in the month. 3. Annualized using a 360-day year or bank interest. 4. Rate for the Federal Reserve Bank of New York. 5. Quoted on a discount basis. 6. An average of offering rates on commercial paper placed by several leading dealers for firms whose bond rating is AA or the equivalent. 7. An average of offering rates on paper directly placed by finance companies. 8. Representative closing yields for acceptances of the highest-rated money center banks. 9. An average of dealer offering rates on nationally traded certificates of deposit. 10. Bid rates for Eurodollar deposits at 11 a.m. London time. Data are for indication purposes only. 11. Auction date for daily data; weekly and monthly averages computed on an issue-date basis. 12. Yields on actively traded issues adjusted to constant maturities. Source: U.S. Treasury. 13. General obligations based on Thursday figures; Moody's Investors Service. 14. General obligations only, with twenty years to maturity, issued by twenty state and local governmental units of mixed quality. Based on figures for Thursday. 15. Daily figures from Moody's Investors Service. Based on yields to maturity on selected long-term bonds. 16. Compilation of the Federal Reserve. This series is an estimate of the yield on recently offered, A-rated utility bonds with a thirty-year maturity and five years of call protection. Weekly data are based on Friday quotations. 17. Standard 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 ordering address, see inside front cover. A26 1.36 Domestic Financial Statistics • February 1993 STOCK MARKET Selected Statistics 1992 Indicator 1989 1990 1991 Mar. Apr. May June July Aug. Sept. Oct. Nov. Prices and trading volume (averages of daily figures) Common stock prices <indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 7 180.13 228.04 174.90 94.33 162.01 183.66 226.06 158.80 90.72 133.21 206.35 258.16 173.97 92.64 150.84 225.21 282.36 204.09 94.15 173.49 224.55 281.60 201.28 94.92 171.05 228.55 285.17 207.88 98.24 175.89 224.68 279.54 202.02 97.23 174.82 228.17 281.90 198.36 101.18 180.96 230.07 284.44 191.31 103.41 180.47 230.13 285.76 191.61 102.26 178.27 226.97 279.70 192.30 101.62 181.36 232.84 287.80 204.63 101.13 189.27 6 Standard & Poor's Corporation (1941-43 = 10)1 323.05 335.01 376.20 407.36 407.41 414.81 408.27 415.05 417.93 418.48 412.50 422.84 7 American Stock Exchange (Aug. 31, 1973 = 50? 356.67 338.32 360.32 404.09 388.06 392.63 385.56 384.07 385.80 382.67 371.27 387.75 165,568 13,124 156,359 13,155 179,411 12,486 185,581 15,654 206,251 14,096 182,027 13,455 195,089 11,216 194,138 10,722 174,003 11,875 191,774 11,198 204,787 11,966 208,221 n.a. 4 5 Utility Volume of trading (thousands of shares) 8 9 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers 34,320 28,210 36,660 39,090 38,750 39,890 39,690 39,640 39,940 41,250 41,590 43,630 Free credit balances at brokers4 11 Margin accounts 12 Cash accounts 7,040 18,505 8,050 19,285 8,290 19,255 7,350 19,305 8,780 16,400 7,700 18,695 7,780 19,610 7,920 18,775 8,060 18,305 8,060 19,650 8,355 18,700 8,500 19,310 Margin requirements (percent of market value and effective date) 6 13 Margin stocks 14 Convertible bonds 15 Short sales Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 70 50 70 80 60 80 65 50 65 55 50 55 65 50 65 1. Effective July 1976, includes a new financial group, banks and insurance companies. With this change the index includes 400 industrial stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 financial. 2. On July 5, 1983, the American Stock Exchange rebased its index, effectively cutting previous readings in half. 3. Since July 1983, under the revised Regulation T, margin credit at brokerdealers has included credit extended against stocks, convertible bonds, stocks acquired through the exercise of subscription rights, corporate bonds, and government securities. Separate reporting of data for margin stocks, convertible bonds, and subscription issues was discontinued in April 1984. 4. Free credit balances are amounts in accounts with no unfulfilled commitments to brokers and are subject to withdrawal by customers on demand. 5. New series since June 1984. 6. These requirements, stated in regulations adopted by the Board of Governors pursuant to the Securities Exchange Act of 1934, limit the amount of credit that can be used to purchase and carry "margin securities" (as defined in the regulations) when such credit is collateralized by securities. Margin requirements Jan. 3, 1974 50 50 50 on securities other than options are the difference between the market value (100 percent) and the maximum loan value of collateral as prescribed by the Board. Regulation T was adopted effective Oct. 15, 1934; Regulation U, effective May 1, 1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective Nov. 1, 1971. On Jan. 1, 1977, the Board of Governors for the first time established in Regulation T the initial margin required for writing options on securities, setting it at 30 percent of the current market value of the stock underlying the option. On Sept. 30, 1985, the Board changed the required initial margin, allowing it to be the same as the option maintenance margin required by the appropriate exchange or self-regulatory organization; such maintenance margin rules must be approved by the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC approved new maintenance margin rules, permitting margins to be the price of the option plus 15 percent of the market value of the stock underlying the option. Effective June 8, 1988, margins were set to be the price of the option plus 20 percent of the market value of the stock underlying the option (or 15 percent in the case of stock-index options). Financial Markets 1.37 S E L E C T E D F I N A N C I A L INSTITUTIONS All Selected Assets and Liabilities Millions of dollars, end of period 1992 1991 Account 1989 1990 Dec. Jan. Mar. Feb. Apr. May June" July" Aug." Sept. SAIF-insured institutions 1 Assets 1,249,055 1,084,821 919,979 909,014 906,142 883,407 872,026 870,334 862,511 856,376 856,151 847,470 733,729 633,385 551,322 545,728 541,734 529,158 524,954r 521,911" 516,617 512,254 512,066 508,829 170,532 155,228 129,461 127,371 127,766 125,272 124,763 124,225 123,454 123,363 120,421 120,204 25,457 32,150 58,685 16,897 24,125 48,753 12,307 17,139 41,775 11,917 16,827 40,857 11,608 16,050 39,908 10,979 15,400 38,717 11,270 14,017 37,403 12,044 13,930 37,241 11,164 13,520 37,114 11,053 n.a. 36,742 2 Mortgages 3 Mortgage-backed securities 4 Contra-assets to mortgage assets 1 . 5 Commercial loans 6 Consumer loans Contra-assets to non7 mortgage loans 1 .. 8 Cash and investment securities 9 Other 2 10,959" 15,073 37,999" 11,120" 14,607 38,869" 949 946 912 912 970 120,763 63,030 119,384 62,845 120,220 62,319 124,140 60,960 120,249 60,044 856,376 856,151 847,470 676,140 109,036 62,359 46,677 18,569 52,630 672,354 110,109 62,225 47,884 20,522 53,166 667,009 110,014 64,105 45,909 18,083 52,365 3,592 1,939 1,239 1,314 1,115 -1,008 166,053 116,955 146,644 95,522 120,077 73,751 118,610 72,653 121,969 71,637 119,543 67,387 10 Liabilities and net worth . 1,249,055 1,084,821 919,979 909,014 906,142 883,407 872,026 870,334 862,511 945,656 252,230 124,577 127,653 27,556 23,612 835,4% 197,353 100,391 %,%2 21,332 30,640 731,937 121,923 65,842 56,081 17,560 48,559 721,099 119,915 62,642 57,273 18,941 49,009 717,026 118,554 63,138 55,416 21,329 49,233 703,811 110,031 62,628 47,403 18,295 51,271 689,777 111,262 62,268 48,994 18,883 52,103" 688,199 110,126 61,439 48,687 19,626 52,383" 682,535 108,943 62,760 46,183 17,751 52,283 11 12 13 14 15 16 Savings capital Borrowed money FHLBB Other Other Net worth NOTE. Components do not sum to totals because of rounding. Data for credit unions and life insurance companies have been deleted from this table. Starting in the December 1991 issue, data for life insurance companies are shown in a special table of quarterly data. SOURCE. Savings Association Insurance Fund (SAIF)-insured institutions: Estimates by the Office of Thrift Supervision (OTS) for all institutions insured by the SAIF and based on the OTS thrift institution Financial Report. 1. Contra-assets are credit-balance accounts that must be subtracted from the corresponding gross asset categories to yield net asset levels. Contra-assets to mortgage assets, mortgage loans, contracts, and pass-through securities—include loans in process, unearned discounts and deferred loan fees, valuation allowances for mortgages "held for sale," and specific reserves and other valuation allowances. Contra-assets to nonmortgage loans include loans in process, unearned discounts and deferred loan fees, and specific reserves and valuation allowances. 2. Includes holding of stock in Federal Home Loan Bank and finance leases plus interest. 1.38 980" 116,462 64,711 F E D E R A L F I S C A L A N D F I N A N C I N G OPERATIONS Millions of dollars Calendar year Fiscal year 1992 Type of account or operation 1990 U.S. budget1 1 Receipts, total On-budget 2 3 Off budget 4 Outlays, total 5 On-budget 6 Off budget 7 Surplus or deficit ( - ) , total 8 On-budget 9 Off budget Source of financing (total) 10 Borrowing from the public 11 Operating cash (decrease, or increase ( - ) ) . . . 12 Other 2 1991 1992 June July Aug. Sept. Oct. Nov. 1,031,308 749,654 281,654 1,251,766 1,026,701 225,064 -220,458 -277,047 56,590 1,054,265 760,382 293,883 1,323,757 1,082,072 241,685 -269,492 -321,690 52,198 1,091,692 789,266 302,426 1,381,895 1,129,337 252,559 -290,204 -340,071 49,867 120,920 91,438 29,482 117,137 102,329 14,808 3,783 -10,891 14,674 79,080 55,977 23,103 122,226 99,935 22,291 -43,146 -43,958 812 78,218 55,434 22,784 102,920 79,128 23,792 -24,702 -23,694 -1,008 118,344 92,813 25,531 112,943 86,709 26,235 5,400 6,104 -704 76,833 55,057 21,776 125,698 103,858 21,841 -48,865 -48,801 -65 74,635 51,221 23,414 107,365 83,446 23,919 -32,730 -32,225 -505 220,101 818 -461 276,802 -1,329 -5,981 310,918 -17,305 -3,409 22,318 -26,919 818 26,839 9,542 6,765 38,841 1,523 -15,662 9,853 -22,807 7,554 -1,552 39,420 10,997 61,969 -7,346 -21,893 40,155 7,638 32,517 41,484 7,928 33,556 58,789 24,586 34,203 47,047 13,630 33,417 37,505 6,923 30,581 35,982 6,232 29,749 58,789 24,586 34,203 19,369 4,413 14,956 26,715 6,985 19,729 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. Federal Financing Bank (FFB) activities are now shown as separate accounts under the agencies that use the FFB to finance their programs. The act also moved two social security trust funds (federal old-age survivors insurance and federal disability insurance) off budget. The Postal Service is included as an off-budget item in the Monthly Treasury Statement beginning in 1990. 2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets; accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous liability (including checks outstanding) and asset accounts; seigniorage; increment on gold; net gain or loss for U.S. currency valuation adjustment; net gain or loss for IMF loan-valuation adjustment; and profit on sale of gold. SOURCES. Monthly Treasury Statement of Receipts and Outlays of the U.S. Government (MTS) and the Budget of the U.S. Government. A28 1.39 Domestic Financial Statistics • February 1993 U.S. B U D G E T RECEIPTS A N D OUTLAYS1 Millions of dollars Fiscal year Source or type Calendar year 1990 1991 1992 1992 H2 HI H2 Sept. Oct. Nov. RECEIPTS 1 All sources 2 Individual income taxes, net 3 Withheld 4 Presidential Election Campaign Fund . 5 Nonwithheld 6 Refunds Corporation income taxes 7 Gross receipts 8 Refunds 9 Social insurance taxes and contributions, net 10 Employment taxes and contributions 11 Self-employment taxes and contributions 12 Unemployment insurance 13 Other net receipts 14 15 16 17 Excise taxes Customs deposits Estate and gift taxes Miscellaneous receipts 1,054,265 1,091,692 503,123 540,504 519,293 561,125 118,344 76,833 74,635 467,827 404,152 32 142,693 79,050 476,465 408,352 30 149,342 81,259 230,745 207,469 3 31,728 8,455 232,389 193,440 31 109,405 70,487 234,949 210,552 55,496 33,184 37,288 34,515 33,099 33,085 32,775 8,379" 237,052 198,868 19 112,328 74,163 24,161 1,850 3,583 809 1,775 1,760 113,599 15,513 117,951 17,680 54,044 7,603 58,903 7,904 54,016 8,649 61,681 9,402 21,365 1,469 4,291 2,194 2,312 833 3%,011 413,689 178,468 214,303 186,839 224,569 33,322 29,594 32,900 370,526 385,491 167,224 199,727 175,802 208,110 32,597 28,135 30,264 25,457 20,922 4,563 24,421 23,410 4,788 2,638 8,996 2,249 22,150 12,296 2,279 3,306 8,721 2,317 20,433 14,070 2,389 3,988 316 409 0 0 1,034 426 2,270 366 42,430 15,921 11,138 22,852 45,570 17,359 11,143 27,195 17,535 8,568 5,333 16,032 20,703 7,488 5,631 8,991 24,428 8,694 5,507 13,508 22,389 8,145 5,701 10,992 4,093 1,552 1,004 2,980 3,670 1,666 1,027 1,491 4,082 1,503 954 618 1 r 1 0 0 OUTLAYS 18 All types 1,323,757 1,381,895 647,461 632,153 694,474 705,068 112,943 125,698 107,365 19 20 21 22 23 24 National defense International affairs General science, space, and technology . Energy Natural resources and environment Agriculture 272,514 16,167 15,946 2,511 18,708 14,864 298,188 16,100 16,234 4,519 19,870 14,968 149,497 8,943 8,081 1,222 9,933 6,878 122,089 7,592 7,496 1,235 8,324 7,684 147,620" 7,660" 8,472" 1,593" 11,167" 7,388" 146,963 8,464 7,952 1,442 8,625 7,514 25,842 1,727 1,159 665 1,742 195 27,412 2,126 1,410 607 3,341 2,270 20,819 4,018 1,612 529 1,801 2,139 25 26 27 28 Commerce and housing credit Transportation Community and regional development . . Education, training, employment, and social services 75,639 31,531 7,432 9,752 33,747 7,924 37,491 3,939 17,992 14,748 3,552 36,595" 17,093" 3,783" 15,583 15,681 3,901 585 3,618 764 -2,262 2,933 1,028 -2,417 2,981 728 16,218 41,479 43,586 18,988 21,234 21,113" 23,224 2,233 3,797 3,882 29 Health 30 Social security and medicare 31 Income security 71,183 373,495 171,618 89,571 406,570 199,395 31,424 176,353 75,948 35,608 190,247 88,778 41,459" 193,156 87,948" 43,698 205,443 105,911 8,834 34,460 15,173 8,021 35,320 18,300 7,420 33,346 14,188 32 33 34 35 36 31,344 12,295 11,358 195,012 -39,356 33,973 14,481 12,874 199,422 -39,280 15,479 5,265 6,976 94,650 -19,829 14,326 6,187 5,212 98,556 -18,702 17,425 6,578" 6,822" 99,144" -20,435 15,597 7,438 5,538 100,324 -18,229 3,213 1,277 1,869 15,435 -5,847 4,078 1,121 2,529 16,463 -2,7% 1,743 1,277 106 16,148 -2,954 Veterans benefits and services Administration of justice General government Net interest 6 Undistributed offsetting receipts 1. Functional details do not sum to total outlays for calendar year data because revisions to monthly totals have not been distributed among functions. Fiscal year total for outlays does not correspond to calendar year data because revisions from the Budget have not been fully distributed across months. 2. Old-age, disability, and hospital insurance, and railroad retirement accounts. 3. Old-age, disability, and hospital insurance. 4. Federal employee retirement contributions and civil service retirement and disability fund. 5. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts. 6. Includes interest received by trust funds. 7. Consists of rents and royalties for the outer continental shelf and U.S. government contributions for employee retirement. SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of Receipts and Outlays of the U.S. Government, and the U.S. Office of Management and Budget, Budget of the U.S. Government, Fiscal Year 1993. Federal Finance 1.40 A29 F E D E R A L D E B T SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1991 1990 1992 Item Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 1 Federal debt outstanding 3,266 3,397 3,492 3,563 3,683 3,820 3,897 n.a. n.a. 2 Public debt securities Held by public 3 4 Held by agencies 3,233 2,438 796 3,365 2,537 828 3,465 2,598 867 3,538 2,643 895 3,665 2,746 920 3,802 2,833 969 3,881 2,918 964 3,985 n.a. n.a. 4,065 n.a. n.a. 33 33 0 33 32 0 27 26 0 25 25 0 18 18 0 19 19 0 16 16 0 n.a. n.a. n.a. n.a. n.a. n.a. 3,161 3,282 3,377 3,450 3,569 3,707 3,784 3,891 3,973 3,161 0 3,281 0 3,377 0 3,450 0 3,569 0 3,706 0 3,783 0 3,890 0 3,972 0 3,195 4,145 4,145 4,145 4,145 4,145 4,145 4,145 4,145 5 Agency securities 6 Held by public Held by agencies 7 8 Debt subject to statutory limit 9 Public debt securities 10 Other debt 1 June 30 Sept. 30 MEMO 11 Statutory debt limit 1. Consists of 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 D E B T OF U.S. T R E A S U R Y SOURCES. U.S. Treasury Department, Monthly Statement of the Public Debt of the United States and Treasury Bulletin. Types and Ownership Billions of dollars, end of period 1992 1991 Type and holder 1 Total gross public debt 2 3 4 5 6 7 8 9 10 11 12 n 14 By type Interest-bearing Marketable Bills Notes Bonds Nonmarketable 1 State and local government series Foreign issues Government Public Savings bonds and notes Government account series Non-interest-bearing Bx holder 4 15 U.S. Treasury and other federal agencies and trust funds 16 Federal Reserve Banks 17 Private investors 18 Commercial banks 19 Money market funds 20 Insurance companies Other companies 21 7.7 State and local treasuries Individuals 2,3 Savings bonds 74 Other securities 25 Foreign and international Other miscellaneous investors 6 26 1988 1990 1991 Q4 Ql Q2 Q3 2,684.4 2,953.0 3,364.8 3,801.7 3,801.7 3,881.3 3,984.7 4,064.6 2,663.1 1,821.3 414.0 1,083.6 308.9 841.8 151.5 6.6 6.6 .0 107.6 575.6 21.3 2,931.8 1,945.4 430.6 1,151.5 348.2 986.4 163.3 6.8 6.8 .0 115.7 695.6 21.2 3,362.0 2,195.8 527.4 1,265.2 388.2 1,166.2 160.8 43.5 43.5 .0 124.1 813.8 2.8 3,798.9 2,471.6 590.4 1,430.8 435.5 1,327.2 159.7 41.9 41.9 .0 135.9 959.2 2.8 3,798.9 2,471.6 590.4 1,430.8 435.5 1,327.2 159.7 41.9 41.9 .0 135.9 959.2 2.8 3,878.5 2,552.3 615.8 1,477.7 443.8 1,326.2 157.8 42.0 42.0 .0 139.9 956.1 2.8 3,981.8 2,605.1 618.2 1,517.6 454.3 1,376.7 161.9 38.7 38.7 .0 143.2 1,002.5 2.9 4,061.8 2,677.5 634.3 1,566.4 461.8 1,384.3 157.6 37.0 37.0 .0 148.3 1,011.0 2.8 589.2 238.4 1,858.5 184.9 11.8 118.6 87.1 471.6 707.8 228.4 2,015.8 164.9 14.9 125.1 93.4 487.5 828.3 259.8 2,288.3 171.5 45.4 142.0 108.9 490.4 968.7 281.8 2,563.2 233.9 80.0 172.9 150.8 498.8 968.7 281.8 2,563.2 233.9 80.0 172.9 150.8 498.8 963.7 267.6 2,664.0 240.0 84.8 175.0 166.0 500.0 n.a. n.a. 109.6 79.2 362.2 433.0 117.7 98.7 392.9 520.7 126.2 107.6 421.7 674.5 138.1 125.8 453.4 709.5 138.1 125.8 453.4 709.5 142.0 126.1 468.0 762.1 1. Includes (not shown separately) securities issued to the Rural Electrification Administration, depository bonds, retirement plan bonds, and individual retirement bonds. 2. Nonmarketable series denominated in dollars, and series denominated in foreign currency held by foreigners. 3. Held almost entirely by U.S. Treasury and other federal agencies and trust funds. 4. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual holdings; data for other groups are Treasury estimates. 1989 5. Consists of investments of foreign balances and international accounts in the United States. 6. Includes savings and loan associations, nonprofit institutions, credit unions, mutual savings banks, corporate pension trust funds, dealers and brokers, certain U.S. Treasury deposit accounts, and federally sponsored agencies. SOURCES. U.S. Treasury Department, data by type of security, Monthly Statement of the Public Debt of the United States; data by holder, the Treasury Bulletin. A30 1.42 Domestic Financial Statistics • February 1993 U.S. GOVERNMENT SECURITIES DEALERS Transactions 1 Millions of dollars, daily averages 1992, week ending Aug. Sept. Oct Sept. 30 Oct. 7 Oct. 14 Oct. 21 Oct. 28 Nov. 4 Nov. 11 Nov. 18 N o v . 25 IMMEDIATE TRANSACTIONS 2 By type of security U.S. Treasury securities 1 Bills Coupon securities, by maturity 2 Less than 3.5 years 3 3.5 to 7.5 years 4 7.5 to 15 years 5 15 years or more Federal agency securities Debt, maturing in 6 Less than 3.5 years 7 3.5 to 7.5 years 8 7.5 years or more Mortgage-backed 9 Pass-throughs 10 All o t h e r s T . 11 12 13 14 15 16 By type of counterparty Primary dealers and brokers U.S. Treasury securities Federal agency securities Debt Mortgage-backed Customers U.S. Treasury securities Federal agency securities Debt Mortgage-backed 41,374 46,771 r 44,531 53,581 43,627 51,994 40,457 38,757 43,157 48,055 45,248 36,672 22,295 r 16,539 41,727 37,760 20,476 14,240 49,532 45,749 20,425 14,672 41,634 40,488 20,177 13,329 46,668 49,037 22,875 15,904 45,459 44,527 20,041 14,548 51,612 45,359 22,779 16,667 54,712 46,134 17,469 12,291 46,690 39,983 16,570 12,805 55,239 32,844 21,160 14,747 58,383 44,604 21,250 19,200 4,343 684 536 4,979 588 803 4,824 r 718 1,040 6,471 654 1,069 4,534 1,067 950 3,566 532 695 5,528 598 1,330 5,194 679 1,267 5,378 619 661 4,642 562 862 5,850 444 818 12,787 3,951 13,673r 4,218 r 15,889" 3,232 ll,374 r 5,014 r 15,482 3,906 20,075 4,020 15,480 2,373 13,935 3,222 14,440 2,143 21,283 2,076 20,025 3,095 35,523 r 99,904 115,212 101,875 118,979 109,286 126,365 111,066 100,125 104,753 119,618 1,016 7,240 1,371 7,552 1,697 8,254 r 1,732 5,568 1,856 7,611 1,026 9,511 2,094 7,850 1,877 8,370 1,201 8,069 1,057 11,515 1,415 10,563 56,374 r 56,893 61,936 r 58,284 69,085 58,917 62,046 59,997 54,679 62,394 71,874 4,548 9,498 4,999 10,339 4,885 r 10,867r 6,463 10,820 4,696 11,777 3,767 14,585 5,362 10,004 5,263 8,787 5,457 8,513 5,009 11,845 5,6% 12,557 2,354 2,969 3,689 2,271 4,431 3,766 3,673 3,444 2,332 4,354 3,306 2,216 1,329 2,713 10,152 1,915 1,853 2,950 10,091 2,253 1,307 3,050 1,418 1,545 2,336 7,712 2,240 1,151 2,949 11,297 2,060 1,501 3,380 11,165 2,440 865 3,283 11,234 2,293 1,511 2,585 9,690 2,106 1,906 3,219 8,545 2,493 1,250 3,202 8,%3 2,444 2,019 3,818 10,917 67 66r 20 59 52 84 7 151 11 19 50 NA 21 32 68 32 65 127 20 201 102 23 185 50 11 22,966 1,862 16,206 1,754 15,725 1,363 16,5% 1,541 19,744 691 19,000 1,899 1,569 1,180 515 1,743 1,388 730 834 1,590 1,047 706 751 1,726 1,452 1,201 827 1,786 2,582 1,389 664 1,331 1,549 450 561 1,409 FUTURES AND FORWARD TRANSACTIONS 4 By type of deliverable security U.S. Treasury securities 17 Bills Coupon securities, by maturity 18 Less than 3.5 years 19 3.5 to 7.5 years 20 7.5 to 15 years 21 15 years or more Federal agency securities Debt, maturing in 22 Less than 3.5 years 23 3.5 to 7.5 years 24 7.5 years or more Mortgage-backed 25 Pass-throughs 26 Others OPTIONS TRANSACTIONS 27 28 29 30 31 81 147 44 10,612 11 6 15,902 2,832 16,571 2,476 17,846r 1,772 17,327 2,920 18,013 1,431 433 1,054 2,795 1,084 618 825 2,009 1,317 837r 742 r l,623 r 1,287 568 436 1,174 1,259 654 787 1,392 By type of underlying security U.S. Treasury, coupon securities, by maturity Less than 3.5 years 3.5 to 7.5 years 7.5 to 15 years 15 years or more Federal agency, mortgagebacked securities Pass-throughs 343 299 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. Immediate, forward, and futures transactions are reported at principal value, which does not include accrued interest; options transactions are reported at the face value of the underlying securities. Dealers report cumulative transactions for each week ending Wednesday. 2. Transactions for immediate delivery include purchases or sales of securities (other than mortgage-backed agency securities) for which delivery is scheduled in five business days or less and "when-issued" securities that settle on the issue date of offering. Transactions for immediate delivery of mortgage-backed agency securities include purchases and sales for which delivery is scheduled in thirty days or less. Stripped securities are reported at market value by maturity of coupon or corpus. 3. Includes such securities as collateralized mortgage obligations (CMOs), real estate mortgage investment conduits (REMICs), interest-only securities (iOs), and principal-only securities (POs). 2,218 5 211 377 4. Futures transactions are standardized agreements arranged on an exchange. Forward transactions are agreements made in the over-the-counter market that specify delayed delivery. All futures transactions are included regardless of time to delivery. Forward contracts for U.S. Treasury securities and federal agency debt securities are included when the time to delivery is more than five business days. Forward contracts for mortgage-backed agency securities are included when the time to delivery is more than thirty days. 5. Options transactions are purchases or sales of put-and-call options, whether arranged on an organized exchange or in the over-the-counter market, and include options on futures contracts on U.S. Treasury and federal agency securities. NOTE. In tables 1.42 and 1.43, " n . a . " indicates that data are not published because of insufficient activity. Data formerly shown under options transactions for U.S. Treasury securities, bills; Federal agency securities, debt; and mortgage-backed securities, other than pass-throughs are no longer available because of insufficient activity. Federal Finance 1.43 U.S. GOVERNMENT SECURITIES DEALERS A31 Positions and Financing 1 Millions of dollars 1992 1992, week ending Item Aug. Sept. Oct. Sept. 30 Oct. 7 Oct. 14 Oct. 21 Oct. 28 Nov. 4 Nov. 11 Nov. 18 Positions 2 N E T IMMEDIATE POSITIONS 3 1 2 3 4 5 6 7 8 9 10 11 12 13 By type of security U.S. Treasury securities Bills Coupon securities, by maturity Less than 3.5 years 3.5 to 7.5 years 7.5 to 15 years 15 years or more Federal agency securities Debt, maturing in Less than 3.5 years 3.5 to 7.5 years 7.5 years or more Mortgage-backed Pass-throughs All others Other money market instruments Certificates of deposit Commercial paper Bankers acceptances 8,264 14,539 11,475 14,507 13,176 13,663 12,162 8,814 7,010 18,995 16,273 -2,799 -10,045 -6,464 5,204 -1,572 -13,702 r -10,785 5,795 804 -13,685 r -13,207 6,617 2,004 -14,355 -13,701 6,647 4,193 -15,049 -14,535 6,%3 -303 -14,011 -12,729 8,356 -1,491 -15,442 -11,429 5,902 2,610 -11,986 -13,742 5,985 -3,377 -9,605 -14,128 4,893 1,837 -12,851 -7,500 3,918 -36 -15,583 -9,597 5,642 6,256 3,194 4,233 6,040 3,033 4,284r 6,685 2,955 4,190 4,688 3,102 3,806" 6,027 3,074 4,361 7,372 3,069 4,305 6,727 2,865 4,191 6,575 2,858 4,071 6,778 2,850 3,795 6,657 3,115 3,363 6,%3 3,262 3,406 30,749 23,366 29,518 27,455 32,278 26,559 18,616 31,859 28,245 26,362 39,763 26,100 32,132 25,901 33,058 27,055 22,742 28,469 32,924 27,048 35,699 24,480 3,734 5,542 978 3,852 6,389 1,053 3,501r 6,374 790 3,943 6,509 1,338 4,216 6,663 708 3,530 7,379 640 2,924 4,842 685 3,582 6,517 1,055 2,922 6,598 955 3,309 6,182 1,036 2,883 6,155 825 -6,189 -5,557 -2,336" -2,894 -7,586 -4,607 1,221 259 861 1,760 3,670 1,543 3,030 399 -7,645 1,448 2,078r 526 -4,380 731 2,286 2,882 -4,237 309 2,129 2,463 -4,025 711 3,074 2,999 -3,479 291 1,814 1,617 -4,468 261 2,455 2,453 -4,552 1,140 2,319 3,861 -4,668 1,950 1,075 4,274 -3,731 2,894 1,155 2,620 -2,929 1,683 3,408 2,459 -4,550 FUTURES AND FORWARD POSITIONS5 By type of deliverable security U.S. Treasury securities 14 Bills Coupon securities, by maturity 15 Less than 3.5 years 16 3.5 to 7.5 years 17 7.5 to 15 years 18 15 years or more Federal agency securities Debt, maturing in 19 Less than 3.5 years 3.5 to 7.5 years 20 21 7.5 years or more Mortgage-backed Pass-throughs 22 23 All others 24 Certificates of deposit 3 -2 -20 -10 -73 -44 134 -21 -1 -58 -98 -8 136 -69 8 361 -62 59 77 16 -44 -1 27 -30 47 -15 3 -49 53 -60 -77 36 20 -18,255 5,955 -251,401 -13,731 6,241 -242,241 -14,399 5,757 -172,555 -1,599 4,272 -230,805 -11,667 6,120 -203,358 -23,833 6,299 -180,858 -13,734 6,162 -159,387 -13,037 5,716 -149,955 -3,487 2,7% -164,770 -13,725 2,051 -145,399 -13,350 2,436 -119,575 Financing6 Reverse repurchase agreements 25 Overnight and continuing 26 Term 218,808 320,431 209,905 310,234 214,066 342,132 202,009 253,866 214,339 328,676 223,501 330,562 210,604 348,644 207,058 358,891 215,839 346,226 215,108 350,937 220,611 319,222 Repurchase agreements 27 Overnight and continuing 28 Term 361,098 300,209 369,411 285,332 383,324 317,708 351,100 234,258 379,870 299,232 399,164 303,155 388,641 322,762 373,574 343,621 364,770 322,515 373,293 324,063 390,803 299,795 Securities borrowed 29 Overnight and continuing 30 Term 97,726 40,171 100,438 42,957 101,102 44,528 92,827 40,774 97,890 43,698 100,174 43,066 104,332 44,878 101,570 47,240 102,129 42,728 102,475 44,206 107,833 42,295 Securities loaned 31 Overnight and continuing 32 Term 5,144r 1,4% 5,742 635 6,852 498 6,321 779 6,115 3,456 5,519 586 5,692 605 4,561 491 Collateralized loans 33 Overnight and continuing 5,791r 850" 6,163" 613 6,186" 1,269 19,635 17,750 17,160 18,419 17,536 16,833 16,527 18,243 15,992 15,387 16,502 MEMO: Matched book7 Reverse repurchase agreements 34 Overnight and continuing 35 Term 151,137 272,361 144,415 267,773 146,398 296,190 138,317 222,450 147,193 289,415 152,355 289,497 141,889 300,393 143,319 307,692 148,347 290,973 151,507 302,868 158,088 273,120 Repurchase agreements 36 Overnight and continuing 37 Term 182,822 229,511 188,263 215,9% 196,777 241,123 184,839 172,981 198,684 233,074 207,204 231,490 197,181 242,405 189,749 254,586 183,458 247,976 190,071 253,280 206,694 220,975 1. Data for positions and financing are obtained from reports submitted to the Federal Reserve Bank of New York by the U.S. government securities dealers on its published list of primary dealers. Weekly figures are close-of-business Wednesday data; monthly figures are averages of weekly data. 2. Securities positions are reported at market value. 3. Net immediate positions include securities purchased or sold (other than mortgage-backed agency securities) that have been delivered or are scheduled to be delivered in five business days or less and "when-issued" securities that settle on the issue date of offering. Net immediate positions of mortgage-backed agency securities include securities purchased or sold that have been delivered or are scheduled to be delivered in thirty days or less. 4. Includes such securities as collateralized mortgage obligations (CMOs), real estate mortgage investment conduits (REMICs), interest-only securities (IOs), and principal-only securities (POs). 5. Futures positions are standardized contracts arranged on an exchange. Forward positions reflect agreements made in the over-the-counter market that specify delayed delivery. All futures positions are included regardless of time to delivery. Forward contracts for U.S. Treasury securities and federal agency debt securities are included when the time to delivery is more than five business days. Forward contracts for mortgage-backed agency securities are included when the time to delivery is more than thirty days. 6. Overnight financing refers to agreements made on one business day that mature on the next business day; continuing contracts are agreements that remain in effect for more than one business day but have no specific maturity and can be terminated without advance notice by either party; term agreements have a fixed maturity of more than one business day. 7. Matched-book data reflect financial intermediation activity in which the borrowing and lending transactions are matched. Matched-book data are included in the financing breakdowns given above. The reverse repurchase and repurchase numbers are not always equal because of the "matching" of securities of different values or types of collateralization. NOTE. Data for futures and forward commercial paper and bankers acceptances and for term financing of collateralized loans are no longer available because of insufficient activity. A32 1.44 Domestic Financial Statistics • February 1993 F E D E R A L A N D F E D E R A L L Y S P O N S O R E D CREDIT A G E N C I E S Debt Outstanding Millions of dollars, end of period 1992 1988 Agency 1 Federal and federally sponsored agencies 2 Federal agencies 3 Defense Department' 4 Export-Import Bank 2,3 5 Federal Housing Administration 6 Government National Mortgage Association certificates of participation 7 Postal Service 8 Tennessee Valley Authority 9 United States Railway Association 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 8 15 Student Loan Marketing Association 16 Financing Corporation 10 17 Farm Credit Financial Assistance Corporation 18 Resolution Funding Corporation 1989 1990 1991 May June July Aug. Sept. 381,498 411,805 434,668 442,772 449,787r 457,662r 457,369" 464,773" 475,606 35,668 8 11,033 150 35,664 7 10,985 328 42,159 7 11,376 393 41,035 7 9,809 397 40,535 7 8,644 427 40,388 7 8,156 432 39,773 7 8,156 194 40,034 7 8,156 229 41,319 7 7,698 301 0 6,142 18,335 0 0 6,445 17,899 0 0 6,948 23,435 0 0 8,421 22,401 0 0 9,771 21,686 0 0 10,123 21,670 0 0 10,123 21,293 0 0 10,123 21,519 0 0 10,123 23,190 0 345,832r 135,836 22,797 105,459 53,127 22,073 5,850 690 0 375,428r 136,108 26,148 116,064 54,864 28,705 8,170 847 4,522 392,509 117,895 30,941 123,403 53,590 34,194 8,170 1,261 23,055 401,737 107,543 30,262 133,937 52,199 38,319 8,170 1,261 29,9% 409,252r 106,368 27,612 144,655 52,080 38,885 8,170 1,261 29,9% 417,274r 106,050 32,479 149,013 51,805 38,020 8,170 1,261 29,9% 417,596" 107,343 33,959 147,377 49,241 39,765 8,170 1,261 29,9% 424,739" 108,564 34,295 150,280 52,137 39,552 8,170 1,261 29,9% 434,287 110,830 36,750 155,232 52,734 38,830 8,170 1,261 29,9% 142,850 134,873 179,083 185,576 179,617 180,848 177,700 174,003 164,422 11,027 5,892 4,910 16,955 0 10,979 6,195 4,880 16,519 0 11,370 6,698 4,850 14,055 0 9,803 8,201 4,820 10,725 0 8,638 9,551 4,820 9,025 0 8,150 9,903 4,820 9,025 0 8,150 9,903 4,820 8,475 0 8,150 9,903 4,820 7,275 0 7,692 9,903 4,820 7,175 0 58,496 19,246 26,324 53,311 19,265 23,724 52,324 18,890 70,896 48,534 18,562 84,931 45,434 18,473 83,676 44,784 18,199 85,%7 43,209 18,227 84,916 43,009 18,238 82,608 42,979 18,143 73,710 MEMO 19 Federal Financing Bank debt 20 21 22 23 24 Lending to federal and federally sponsored Export-Import Bank Postal Service 6 Student Loan Marketing Association Tennessee Valley Authority United States Railway Association 6 Other lending14 25 Farmers Home Administration 26 Rural Electrification Administration 27 agencies 1. Consists of mortgages assumed by the Defense Department between 1957 and 1963 under family housing and homeowners assistance programs. 2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976. 3. On-budget since Sept. 30, 1976. 4. Consists of debentures issued in payment of Federal Housing Administration insurance claims. Once issued, these securities may be sold privately on the securities market. 5. Certificates of participation issued before fiscal year 1969 by the Government National Mortgage Association acting as trustee for the Farmers Home Administration, the Department of Health, Education, and Welfare, the Department of Housing and Urban Development, the Small Business Administration, and the Veterans' Administration. 6. Off-budget. 7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. Some data are estimated. g. Excludes borrowing by the Farm Credit Financial Assistance Corporation, shown on line 17. 9. Before late 1982, the Association obtained financing through the Federal Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is shown on line 22. 10. The Financing Corporation, established in August 1987 to recapitalize the Federal Savings and Loan Insurance Corporation, undertook its first borrowing in October 1987. 11. The Farm Credit Financial Assistance Corporation, established in January 1988 to provide assistance to the Farm Credit System, undertook its first borrowing in July 1988. 12. The Resolution Funding Corporation, established by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, undertook its first borrowing in October 1989. 13. The FFB, which began operations in 1974, is authorized to purchase or sell obligations issued, sold, or guaranteed by other federal agencies. Because FFB incurs debt solely for the purpose of lending to other agencies, its debt is not included in the main portion of the table in order to avoid double counting. 14. Includes FFB purchases of agency assets and guaranteed loans; the latter are loans guaranteed by numerous agencies, with the amounts guaranteed by any one agency generally being small. The Farmers Home Administration entry consists exclusively of agency assets, while the Rural Electrification Administration entry consists of both agency assets and guaranteed loans. Securities Market and Corporate Finance 1.45 N E W SECURITY I S S U E S A33 Tax-Exempt State and Local Governments Millions of dollars 1992 Type of issue or issuer, or use 1989 1 All issues, new and refunding1 113,646 1990 120,339 1991 Apr. May June July Aug. 154,402 16,922r 16,93? 24,084r 17,386r 19,774r i s ,t a w r r r 8,806 15,278r r 7,136 lo^tr r 7,005 12,769r r 7,461 ll,237 r 7,733 13,359r 5,203 8,930 Sept. Oct. Nov. 14,133 ii,wr By type of issue 2 General obligation 3 Revenue 35,774 77,873 39,610 81,295 55,100 99,302 5,251 ll,671 r 5,995 l O ^ By type of issuer 4 State 5 Special district or statutory authority 6 Municipality, county, or township 11,819 71,022 30,805 15,149 72,661 32,510 24,939 80,614 48,849 575 ll,583 r 4,764 1,165 11,03 l r 4,739 2,063 16,477r 5,544 2,836 10,040"^ 4,510 2,933r ll,203 r n.a. 1,710 ll,054 r 5,934 2,742 13,113r 5,237 n.a. n.a. n.a. 7 Issues for new capital 84,062 103,235 116,953 9,020 9,259 14,096 7,565 11,993 10,496 13,760 8,028 15,133 6,870 11,427 16,703 5,036 28,894 17,042 11,650 11,739 23,099 6,117 34,607 21,121 13,395 21,039 25,648 8,376 30,275 2,208 921 1,380 2,582 558 1,371 1,651 1,669 771 2,045 133 2,990 2,132 2,618 1,851 4,266 724 2,505 1,747 571 629 887 91 3,640 1,737 2,130 2,604 767 503 4,252 1,237 1,977 2,265 1,869 1,176 1,972 2,083 1,364 3,340 2,365 367 4,241 1,800 531 960 1,070 581 3,086 8 9 10 11 12 13 By use of proceeds Education Transportation Utilities and conservation Social welfare Industrial aid Other purposes 1. Par amounts of long-term issues based on date of sale. 2. Since 1986, has included school districts. 1.46 N E W SECURITY I S S U E S r SOURCES. Investment Dealer's Digest beginning April 1990. Securities Data/ Bond Buyer Municipal Data Base beginning 1986. Public Securities Association for earlier data. U . S . Corporations Millions of dollars 1992 Type of issue, offering, or issuer 1989 1990 1991 Mar. Apr. May June July Aug. Sept. Oct. 1 All issues1 377,836 339,052 465,389 38,303 28,948 44,947 47,985 46,170 36,855 42,917* 36,053 2 Bonds2 319,965 298,814 389,968 31,946 23,610 38,031 38,988 39,693 31,579 37,607* 29,087 By type of offering 3 Public, domestic 4 Private placement, domestic 5 Sold abroad 179,694 117,420 22,851 188,778 86,982 23,054 287,076 74,930 27,962 29,417 n.a. 2,529 22,236 n.a. 1,373 35,059 n.a. 2,972 35,960 n.a. 3,027 37,768 n.a. 1,924 28,325r n.a. 3,254 36,300 n.a. l,347 r 31,500 n.a. 2,000 74,736 50,268 10,221 18,611 9,276 156,853 51,779 40,719 12,776 17,621 6,687 169,231 86,627 36,681 13,598 23,949 9,431 219,682 8,955 3,670 641 1,896 725 16,060 4,170 2,351 140 3,462 1,205 12,282 6,046 2,472 621 3,041 1,590 24,261 7,263 1,630 899 4,251 1,028 23,916 5,509 3,476 766 6,909 2,081 20,951 4,720 2,230 393 4,401 1,053 18,783 5,884r 2,386r 677 5,218 1,156r 22,285 7,634 2,652 290 3,365 410 14,735 12 Stocks2 57,870 40,165 75,467 6,357 5,338 6,916 8,997 6,477 5,276 5,310 6,966 By type of offering 13 Public preferred 14 Common 15 Private placement 3 6,194 26,030 25,647 3,998 19,443 16,736 17,408 47,860 10,109 625 5,732 n.a. 334 5,004 n.a. 1,552 5,364 n.a. 2,916 6,081 n.a. 2,413 4,064 n.a. 1,148 4,129 n.a. 1,233 4,077 n.a. 2,901 4,065 n.a. 9,308 7,446 n.a. 3,090 n.a. 34,028 5,649 10,171 n.a. 416 n.a. 19,738 24,154 19,418 n.a. 3,474 n.a. 25,507 2,637 1,595 n.a. 704 n.a. 1,175 1,523 1,162 n.a. 577 n.a. 1,691 2,499 2,010 n.a. 826 n.a. 1,324 3,000 1,070 n.a. 610 n.a. 3,254 857 1,599 n.a. 564 n.a. 3,457 713 1,287 n.a. 921 n.a. 2,327 307 487 n.a. 595 n.a. 2,695 1,779 934 n.a. 359 n.a. 3,735 6 7 8 9 10 11 16 17 18 19 20 21 By industry group Manufacturing Commercial and miscellaneous Transportation Public utility Communication Real estate and financial By industry group Manufacturing Commercial and miscellaneous Transportation Public utility Communication Real estate and financial 1. Figures represent gross proceeds of issues maturing in more than one year; they are the principal amount or number of units calculated by multiplying by the offering price. Figures exclude secondary offerings, employee stock plans, investment companies other than closed-end, intracorporate transactions, equities sold abroad, and Yankee bonds. Stock data include ownership securities issued by limited partnerships. 2. Monthly data cover only public offerings. 3. Monthly data are not available. SOURCES. IDD Information Services, Inc., the Board of Governors of the Federal Reserve System, and, before 1989, the U.S. Securities and Exchange Commission. A34 1.47 DomesticNonfinancialStatistics • February 1993 O P E N - E N D I N V E S T M E N T COMPANIES Net Sales and Assets Millions of dollars 1992 Item 1 1990 1991 Mar. Apr. May June July Aug. Sept/ Oct. 1 Sales of own shares 2 344,420 464,488 50,462 52,309 48,127 51,457 54,915 50,627 50,039 52,196 2 Redemptions of own shares 3 Net sales 288,441 55,979 342,088 122,400 35,464 14,998 39,302 13,007 31,409 16,718 37,457 14,000 34,384 20,703 35,223 15,404 37,862 12,177 37,180 15,016 4 Assets 4 568,517 807,001 848,842 870,011 897,211 911,218 951,806 957,145 978,507 980,943 5 Cash 5 6 Other 48,638 519,875 60,937 746,064 64,216 781,626 67,632 802,379 67,270 829,941 69,508 841,710 72,732 879,074 77,245 879,900 76,498 902,009 75,702 905,241 1. Data on sales and redemptions exclude money market mutual funds but include limited-maturity municipal bond funds. Data on assets exclude both money market mutual funds and limited-maturity municipal bond funds. 2. Includes reinvestment of dividends. Excludes reinvestment of capital gains distributions. 3. Excludes sales and redemptions resulting from transfers of shares into or out of money market mutual funds within the same fund family. 1.48 4. Market value at end of period, less current liabilities. 5. Includes all U.S. Treasury securities and other short-term debt securities. SOURCE. Investment Company Institute. Data based on reports of membership, which comprises substantially all open-end investment companies registered with the Securities and Exchange Commission. Data reflect underwritings of new companies. CORPORATE PROFITS A N D THEIR DISTRIBUTION Billions of dollars; quarterly data at seasonally adjusted annual rates 1991 1990 Account 1989 1990 1992 1991 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 r 1 Profits with inventory valuation and capital consumption adjustment 2 Profits before taxes 3 Profits tax liability 4 Profits after taxes 5 Dividends 6 Undistributed profits 362.8 342.9 141.3 201.6 134.6 67.1 361.7 355.4 136.7 218.7 149.3 69.4 346.3 334.7 124.0 210.7 146.5 64.2 344.0 354.7 133.7 221.0 151.9 69.1 349.6 337.6 121.3 216.3 150.6 65.7 347.3 332.3 122.9 209.4 146.2 63.2 341.2 336.7 127.0 209.6 145.1 64.5 347.1 332.3 125.0 207.4 143.9 63.4 384.0 366.1 136.4 229.7 143.6 86.2 388.4 376.8 144.1 232.7 146.6 86.1 374.1 354.1 131.8 222.2 151.1 71.1 7 Inventory valuation 8 Capital consumption adjustment -17.5 37.4 -14.2 20.5 3.1 8.4 -21.2 10.5 6.7 5.3 9.9 5.1 -4.8 9.3 .7 14.1 -5.4 23.3 -15.5 27.0 -9.7 29.7 SOURCE. U.S. Department of Commerce, Survey of Current 1.50 Business. N O N F A R M B U S I N E S S E X P E N D I T U R E S on N e w Plant and Equipment Billions of dollars; quarterly data at seasonally adjusted annual rates 1991 Industry 1990 1991 1992 19921 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 1 1 Total nonfarm business 532.61 528.39 551.03 534.27 525.02 526.59 529.87 535.72 540.91 565.16 562.36 Manufacturing 2 Durable goods industries 3 Nondurable goods industries 82.58 110.04 77.64 105.17 75.70 101.72 80.99 109.84 79.31 107.20 74.94 102.55 76.40 102.66 74.19 99.79 74.26 97.52 76.10 106.69 78.25 102.86 9.88 10.02 9.21 9.94 10.08 10.09 9.99 8.87 9.18 9.76 9.01 6.40 8.87 6.20 5.95 10.17 6.54 6.74 9.58 7.34 5.68 10.89 6.41 6.25 9.95 6.67 6.32 9.61 6.63 5.44 10.41 6.45 6.65 8.86 6.37 6.50 9.75 7.27 7.08 9.60 7.77 6.74 10.12 7.95 44.10 23.11 241.43 43.76 22.82 246.32 48.85 23.85 268.05 43.62 23.40 243.51 43.09 22.00 240.46 43.27 23.25 249.94 44.75 22.67 251.11 46.06 22.75 262.17 48.45 24.19 263.80 50.16 24.37 273.62 50.74 24.11 272.59 Nonmanufacturing 4 Mining Transportation 5 Railroad 6 Air 7 Other Public utilities 8 Electric 9 Gas and other 10 Commercial and other 2 1. Figures are amounts anticipated by business. 2. " O t h e r " consists of construction, wholesale and retail trade, finance and insurance, personal and business services, and communication. SOURCE. U.S. Department of Commerce, Survey of Current Business. Securities Markets and Corporate Finance 1.51 DOMESTIC FINANCE COMPANIES A35 Assets and Liabilities Billions of dollars, end of period; not seasonally adjusted 1990 Account 1989 1990 1991 1992 1991 Q4 Ql Q2 Q3 Q4 Ql Q2 ASSETS 1 Accounts receivable, gross 1 2 Consumer 3 Business 4 Real estate 462.9 138.9 270.2 53.8 492.9 133.9 293.5 65.5 480.3 121.9 292.6 65.8 492.9 133.9 293.5 65.5 482.9 127.1 291.7 64.1 488.5 127.5 295.2 65.7 484.7 125.3 293.2 66.2 480.3 121.9 292.6 65.8 475.7 118.4 291.6 65.8 477.0 116.7 293.9 66.4 54.7 8.4 57.6 9.6 55.1 12.9 57.6 9.6 57.2 10.7 58.0 11.1 57.6 13.1 55.1 12.9 53.6 13.0 51.2 12.3 7 Accounts receivable, net 8 All other 399.8 102.6 425.7 113.9 412.3 149.0 425.7 113.9 415.0 118.7 419.3 122.8 414.1 136.4 412.3 149.0 409.1 145.5 413.6 139.4 9 Total assets 502.4 539.6 561.2 539.6 533.7 542.1 550.5 561.2 554.6 553.0 10 Bank loans 11 Commercial paper 27.0 160.7 31.0 165.3 42.3 159.5 31.0 165.3 35.6 155.5 36.9 156.1 39.6 156.8 42.3 159.5 38.0 154.4 37.8 147.7 Debt 12 Other short-term 13 Long-term 14 Owed to parent 15 Not elsewhere classified 16 All other liabilities 17 Capital, surplus, and undivided profits n.a. n.a. 35.2 162.7 61.5 55.2 n.a. n.a. 37.5 178.2 63.9 63.7 n.a. n.a. 34.5 191.3 69.0 64.8 n.a. n.a. 37.5 178.2 63.9 63.7 n.a. n.a. 32.4 182.4 64.3 63.4 n.a. n.a. 34.2 184.5 67.1 63.3 n.a. n.a. 36.5 185.0 68.8 63.8 n.a. n.a. 34.5 191.3 69.0 64.8 n.a. n.a. 34.5 189.8 72.0 66.0 n.a. n.a. 34.8 191.9 73.4 67.1 18 Total liabilities and capital 502.4 539.6 561.2 539.6 533.7 542.1 550.5 561.2 554.6 548.4 5 LESS: Reserves for unearned income 6 Reserves for losses LIABILITIES AND CAPITAL 1.52 DOMESTIC FINANCE COMPANIES Business Credit Outstanding1 Millions of dollars, end of period 1992 Type of credit 1989 1990 May June July Aug. Sept/ Oct. Seasonally Adjusted 1 Total 2 Consumer , 3 Real estate 2 4 Business 481,436 523,023 519,573 519,668 520,804 522,834 528,117 527,858 525,241 157,766 53,518 270,152 161,070 65,147 296,807 154,786 65,388 299,400 154,989 66,898 297,781 154,850 66,433 299,521 153,588 66,843 302,403 154,729 67,753 305,634 155,618 67,717 304,523 152,658 68,035 304,549 Not Seasonally Adjusted 5 6 Consumer 7 Motor vehicles 8 Other consumer 9 Securitized motor vehicles 10 Securitized other consumer 11 Real estate 12 Business 13 Motor vehicles 14 Retail 5 . 15 Wholesale 6 16 Leasing 17 Equipment 18 Retail 19 Wholesale 6 20 Leasing 21 Other business 22 Securitized business assets Retail 23 24 Wholesale 25 Leasing 484,566 526,441 522,853 520,682 524,587 522,686 523,448 524,999 524,782 158,542 84,126 54,732 13,690 5,994 53,781 272,243 90,416 29,505 34,093 26,818 122,246 29,828 6,452 85,966 57,560 n.a. 710 n.a. 1,311 161,965 75,045 58,818 19,837 8,265 65,509 298,967 92,072 26,401 33,573 32,098 137,654 31,968 11,101 94,585 63,774 5,467 667 3,281 1,519 155,677 63,413 58,488 23,166 10,610 65,764 301,412 90,319 22,507 31,216 36,596 141,399 30,962 9,671 100,766 60,887 8,807 576 5,285 2,946 154,414 59,399 56,740 26,529 11,746 66,650 299,618 88,585 20,143 30,893 37,549 143,431 31,569 9,116 102,746 59,291 8,311 196 5,147 2,968 154,859 60,056 56,634 26,195 11,974 66,437 303,291 90,075 20,674 30,505 38,896 145,994 32,610 9,194 104,190 57,586 9,636 178 5,231 4,227 154,099 60,400 56,568 25,392 11,739 67,065 301,522 87,686 21,086 27,158 39,443 145,787 32,370 9,128 104,289 59,099 8,951 170 4,649 4,132 155,529 60,393 56,782 26,852 11,503 68,104 299,815 85,745 20,743 n.a. 39,889 145,790 32,250 9,084 104,455 59,013 9,268 158 5,193 3,917 156,416 59,806 56,808 28,204 11,598 68,064 300,519 85,261 20,407 n.a. 39,506 147,319 31,571 8,994 106,754 58,493 9,447 152 5,378 3,917 153,650 59,290 55,412 27,823 11,124 68,477 302,656 86,747 20,763 n.a. 39,536 147,146 31,475 8,928 106,743 58,661 10,101 634 5,593 3,874 1. Includes finance company subsidiaries of bank holding companies but not of retailers and banks. Data are before deductions for unearned income and losses. Data in this table also appear in the Board's G.20 (422) monthly statistical release. For ordering address, see inside front cover. 2. Includes all loans secured by liens on any type of real estate, for example, first and junior mortgages and home equity loans. 3. Includes personal cash loans, mobile home loans, and loans to purchase other types of consumer goods such as appliances, apparel, general merchandise, and recreation vehicles. 4. Outstanding balances of pools upon which securities have been issued; these for FRASER balances are no longer carried on the balance sheets of the loan originator. Digitized 5. Passenger car fleets and commercial land vehicles for which licenses are required. 6. Credit arising from transactions between manufacturers and dealers, that is, floor plan financing. 7. includes loans on commercial accounts receivable, factored commercial accounts, and receivable dealer capital; small loans used primarily for business or farm purposes; and wholesale and lease paper for mobile homes, campers, and travel trailers. A36 1.53 DomesticNonfinancialStatistics • February 1993 MORTGAGE M A R K E T S Conventional Mortgages on N e w Homes Millions of dollars except as noted 1992 Item 1989 1990 1991 May June July Aug. Sept. Oct. Nov. Terms and yields in primary and secondary markets PRIMARY MARKETS 1 2 3 4 5 6 Terms1 Purchase price (thousands of dollars) Amount of loan (thousands of dollars) Loan-price ratio (percent) Maturity (years) Fees and charges (percent of loan amount) Contract rate (percent per year) Yield (percent per year) .' 7 OTS series 8 HUD series 4 159.6 117.0 74.5 28.1 2.06 9.76 153.2 112.4 74.8 27.3 1.93 9.68 155.0 114.0 75.0 26.8 1.71 9.02 158.7 119.7 77.3 26.4 1.69 8.30 154.4 116.1 77.3 25.0 1.57 8.15 173.5 132.6 77.5 26.4 1.19 7.81 148.4 113.6 78.7 24.8 1.62 7.72 146.0 109.3 77.0 25.7 1.52 7.68 159.2 119.7 77.3 25.2 1.42 7.65 165.4 117.3 75.3 24.9 1.54 7.81 10.11 10.21 10.01 10.08 9.30 9.20 8.59 8.66 8.43 8.42 8.00 8.14 8.00 8.01 7.93 7.95 7.90 8.29 8.07 8.38 10.24 9.71 10.17 9.51 9.25 8.59 8.66 8.00 8.56 7.90 8.12 7.63 8.08 7.28 8.06 7.31 8.29 7.53 8.54 7.90 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (HUD series) 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 Mortgage transactions (during period) 14 Purchases Mortgage commitments 15 Issued 8 16 To sell9 104,974 19,640 85,335 113,329 21,028 92,302 122,837 21,702 101.135 140,899 21,924 118,975 142,148 22,218 119,930 142,465 22,263 120,202 142,246 22,199 120,047 144,904 22,275 122,629 149,133 22,399 126,734 153,306 22,372 130,934 22,518 23,959 37,202 5,576 5,809 4,191 3,651 6,779 8,380 7,980 n.a. n.a. 23,689 5,270 40,010 7,608 4,392 1,695 4,662 1,831 4,663 807 6,053 10 8,880 148 8,195 0 6,084 237 20,105 590 19,516 20,419 547 19,871 24,131 484 23,283 28,710 432 28,278 28,621 426 28,195 28,510 419 28,091 29,367 376 28,990 31,629 371 31,259 32,995 365 32,630 n.a. n.a. n.a. 78,588 73,446 75,517 73,817 97,727 92,478 16,405 17,214 14,222 13,740 12,172 11,849 13,562 12,314 16,391 14,267 20,199 18,771 n.a. 18,782 88,519 102,401 114,031 13,334 19,114 26,488 14,212 17,132 27,380 n.a. (during period? FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)9 17 Total 18 FHA/VA-insured 19 Conventional Mortgage transactions (during period) 20 Purchases 21 Sales Mortgage commitments 22 Contracted 10 (during period) 1. Weighted averages based on sample surveys of mortgages originated by major institutional lender groups; compiled by the Federal Housing Finance Board in cooperation with the Federal Deposit Insurance Corporation. 2. Includes all fees, commissions, discounts, and "points" paid (by the borrower or the seller) to obtain a loan. 3. Average effective interest rates on loans closed, assuming prepayment at the end of ten years; from Office of Thrift Supervision (OTS). 4. Average contract rates on new commitments for conventional first mortgages; from U.S. Department of Housing and Urban Development (HUD). 5. Average gross yields on thirty-year, minimum-downpayment, first mortgages insured by the Federal Housing Administration (FHA) for immediate delivery in the private secondary market. Based on transactions on first day of subsequent month. Large monthly movements of average yields may reflect market adjustments to changes in maximum permissible contract rates. 6. Average net yields to investors on fully modified pass-through securities backed by mortgages and guaranteed by the Government National Mortgage Association (GNMA), assuming prepayment in twelve years on pools of thirtyyear mortgages insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs 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 one- to four-family loan commitments accepted in the Federal National Mortgage Association's (FNMA's) free market auction system, and through the FNMA-GNMA tandem plans. 8. Does not include standby commitments issued, but includes standby commitments converted. 9. Includes participation loans as well as whole loans. 10. Includes conventional and government-underwritten loans. The Federal Home Loan Mortgage Corporation's mortgage commitments and mortgage transactions include activity under mortgage securities swap programs, while the corresponding data for FNMA exclude swap activity. Real Estate A37 MORTGAGE D E B T O U T S T A N D I N G 1 1.54 Millions of dollars, end of period 1992 1991 Type of holder and property 1 All 2 3 4 5 holders By type of property One- to four-family residences Multifamily residences Commercial Farm By type of holder 6 Major financial institutions 7 Commercial banks 8 One- to four-family 9 Multifamily Commercial 10 11 Farm 12 Savings institutions 3 13 One- to four-family 14 Multifamily 15 Commercial 16 Farm 17 Life insurance companies 18 One- to four-family 19 Multifamily 20 Commercial 21 Farm Finance companies 4 1988 1989 1990 Q2 Q3 Q4 Ql Q2 P 3,275,697 3,561,685 3,807,306 3,898,924 3,912,518 3,927,396 3,971,687 3,999,102 2,203,973 292,590 693,888 85,247 2,432,222 304,612 740,826 84,025 2,649,436 310,619 763,281 83,969 2,726,425 315,404 773,315 83,779 2,758,976 308,047 762,330 83,165 2,781,078 308,844 754,300 83,173 2,833,365 308,510 746,902 82,910 2,873,755 301,007 740,760 83,579 1,831,472 674,003 334,367 33,912 290,254 15,470 924,606 671,722 110,775 141,433 676 232,863 11,164 24,560 187,549 9,590 1,931,537 767,069 389,632 38,876 321,906 16,656 910,254 669,220 106,014 134,370 650 254,214 12,231 26,907 205,472 9,604 1,914,315 844,826 455,931 37,015 334,648 17,231 801,628 600,154 91,806 109,168 500 267,861 13,005 28,979 215,121 10,756 1,898,492 871,416 476,363 37,564 339,450 18,039 755,403 570,015 86,483 98,457 448 271,674 11,743 30,006 219,204 10,721 1,860,710 870,937 478,851 36,398 337,365 18,323 719,679 547,799 81,883 89,595 402 270,094 11,720 29,962 218,179 10,233 1,846,910 876,284 486,572 37,424 333,852 18,436 705,367 538,358 79,881 86,741 388 265,258 11,547 29,562 214,105 10,044 1,825,983 880,377 492,910 37,710 330,837 18,919 682,338 524,536 77,166 80,278 358 263,269 11,214 29,693 212,865 9,497 1,807,045 884,598 496,518 38,314 330,229 19,538 660,547 509,397 74,837 75,969 345 261,900 11,087 29,745 211,913 9,155 37,846 45,476 48,777 48,972 50,658 51,567 50,573 55,933 23 Federal and related agencies 24 Government National Mortgage Association 25 One- to four-family 26 Multifamily 27 Farmers Home Administration 28 One- to four-family 29 Multifamily 30 Commercial 31 Farm 32 Federal Housing and Veterans' Administrations 33 One- to four-family 34 Multifamily 35 Federal National Mortgage Association 36 One- to four-family 37 Multifamily 38 Federal Land Banks 39 One- to four-family 40 Farm 41 Federal Home Loan Mortgage Corporation 42 One- to four-family 43 Multifamily 200,570 26 26 0 42,018 18.347 8,513 5,343 9,815 5,973 2,672 3,301 103,013 95,833 7,180 32,115 1,890 30,225 17,425 15,077 2,348 209,498 23 23 0 41,176 18,422 9,054 4,443 9,257 6,087 2,875 3,212 110,721 102,295 8,426 29,640 1,210 28,430 21,851 18,248 3,603 250,761 20 20 0 41,439 18,527 9,640 4,690 8,582 8,801 3,593 5,208 116,628 106,081 10,547 29,416 1,838 27,577 21,857 19,185 2,672 276,797 20 20 0 41,430 18,521 9,898 4,750 8,261 10,210 3,729 6,480 122,806 111,560 11,246 29,152 2,041 27,111 23,649 21,120 2,529 282,115 20 20 0 41,566 18,598 9,990 4,829 8,149 10,057 3,649 6,408 125,451 113,696 11,755 29,053 2,124 26,929 23,906 21,489 2,417 282,856 19 19 0 41,713 18,496 10,141 4,905 8,171 10,733 4,036 6,697 128,983 117,087 11,896 28,777 1,693 27,084 26,809 24,125 2,684 2%,664 19 19 0 41,791 18,488 10,270 4,961 8,072 11,332 4,254 7,078 136,506 124,137 12,369 28,776 1,693 27,083 28,895 26,182 2,713 297,618 23 23 0 41,628 17,718 10,356 4,998 8,557 11,798 4,124 7,674 142,148 129,392 12,756 28,775 1,693 27,082 28,621 26,001 2,620 44 Mortgage pools or trusts 6 Government National Mortgage Association 45 46 One- to four-family 47 Multifamily 48 Federal Home Loan Mortgage Corporation 49 One- to four-family 50 Multifamily 51 Federal National Mortgage Association 52 One- to four-family Multifamily , 53 54 Farmers Home Administration 55 One- to four-family 56 Multifamily Commercial 57 58 Farm 811,847 340,527 331,257 9,270 226,406 219,988 6,418 178,250 172,331 5,919 104 26 0 38 40 946,766 368,367 358,142 10,225 272,870 266,060 6,810 228,232 219,577 8,655 80 21 0 26 33 1,110,555 403,613 391,505 12,108 316,359 308,369 7,990 299,833 291,194 8,639 66 17 0 24 26 1,188,626 416,082 403,679 12,403 341,132 332,624 8,509 331,089 322,444 8,645 55 13 0 21 21 1,229,836 422,500 412,715 9,785 348,843 341,183 7,660 351,917 343,430 8,487 52 12 0 20 20 1,262,685 425,295 415,767 9,528 359,163 351,906 7,257 371,984 362,667 9,317 47 11 0 19 17 1,302,217 421,977 412,574 9,404 367,878 360,887 6,991 389,853 380,617 9,236 43 10 0 18 16 1,339,172 422,922 413,828 9,094 382,797 376,177 6,620 413,226 403,940 9,286 43 9 0 18 15 59 Individuals and others 7 60 One- to four-family 61 Multifamily 62 Commercial 63 Farm 431,808 262,713 80,394 69,270 19,431 473,884 297,050 82,830 74,609 19,395 531,674 333,532 87,950 90,894 19,298 535,009 333,256 87,002 95,573 19,178 539,858 336,711 87,351 96,687 19,109 534,945 330,062 87,440 98,409 19,034 546,823 340,561 86,975 100,321 18,966 555,267 348,631 86,390 101,358 18,887 22 1. Based on data from various institutional and governmental sources; figures for some quarters estimated in part by the Federal Reserve. Multifamily debt refers to loans on structures of five or more units. 2. Includes loans held by nondeposit trust companies but not loans held by bank trust departments. 3. Includes savings banks and savings and loan associations. Beginning 1987:1, data reported by institutions insured by the Federal Savings and Loan Insurance Corporation include loans in process and other contra-assets (credit balance accounts that must be subtracted from the corresponding gross asset categories to yield net asset levels). 4. Assumed to be entirely loans on one- to four-family residences. 5. Securities guaranteed by the Fanners Home Administration (FmHA) sold to the Federal Financing Bank were reallocated from F m H A mortgage pools to FmHA mortgage holdings in 1986:4 because of accounting changes by the F m H A . 6. Outstanding principal balances of mortgage-backed securities insured or guaranteed by the agency indicated. Includes private pools, which are not shown as a separate line item. 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. A38 DomesticNonfinancialStatistics • February 1993 1.55 C O N S U M E R I N S T A L L M E N T CREDIT Total Outstanding 1 Millions of dollars, amounts outstanding, end of period 1992 Holder and type of credit 1989 1990 1991 May June July Aug. Sept. r Oct. Seasonally adjusted 1 Total 716,825 735,338 727,799 722,928 722,919 721,820 720,664 722,104 722,317 2 Automobile 3 Revolving 4 Other 292,002 199,308 225,515 284,993 222,950 227,395 263,003 242,785 222,012 259,834 246,220 216,874 257,339 247,418 218,162 257.743 247,332 216.744 256,944 248,043 215,677 257,384 250,017 214,703 257,412 251,653 213,252 Not seasonally adjusted 5 Total 728,877 748,524 742,058 718,420 719,845 718,599 721,985 724,198 722,700 By major holder Commercial banks Finance companies Credit unions Retailers Savings institutions Gasoline companies Pools of securitized assets 2 . 342,770 138,858 93,114 44,154 57,253 3,935 48,793 347,087 133,863 93,057 44,822 46,969 4,822 77,904 339,565 121,901 92,254 44,030 40,315 4,362 99,631 324,791 116,138 91,605 37,824 36,224 4,193 107,645 324,171 116,690 92,340 37,438 35,782 4,360 109,064 323,899 117,002 91,778 37,219 35,552 4,506 108,643 323,866 117,175 92,270 38,791 35,378 4,542 109,963 324,046 116,650 92,698 38,778 35,069 4,499 112,458 324,424 114,702 92,941 39,299 34,681 4,452 112,201 By major type of credit3 13 Automobile 14 Commercial banks 15 Finance companies 16 Pools of securitized assets' 292,060 126,288 84,126 18,185 285,050 124,913 75,045 24,428 263,108 111,912 63,413 28,057 258,665 108,610 59,399 31,406 257,442 106,645 60,056 31,024 258,104 107,722 60,400 30,454 259,128 107,978 60,393 30,826 260,395 108,355 59,806 31,971 259,626 108,105 59,290 31,757 17 Revolving 18 Commercial banks 19 Retailers 20 Gasoline companies 21 Pools of securitized assets' 210,310 130,811 39,583 3,935 23,477 235,056 133,385 40,003 4,822 44,335 255,895 137,968 39,352 4,362 60,139 243,315 128,013 33,245 4,193 63,801 245,092 127,925 32,844 4,360 65,784 244,661 127,476 32,617 4,506 65,791 247,051 126,922 34,167 4,542 66,985 248,692 127,234 34,148 4,499 68,252 249,715 127,263 34,654 4,452 68,699 22 Other 23 Commercial banks 24 Finance companies 25 Retailers 26 Pools of securitized assets 2 226,507 85,671 54,732 4,571 7,131 228,418 88,789 58,818 4,819 9,141 223,055 89,685 58,488 4,678 11,435 216,440 88,168 56,739 4,579 12,438 217,311 89,601 56,634 4,594 12,256 215,834 88,701 56,602 4,602 12,398 215,806 88,966 56,782 4,624 12,152 215,111 88,457 56,844 4,630 12,235 213,359 89,056 55,412 4,645 11,745 6 7 8 9 10 11 12 1. The Board's series on amounts of credit covers most short- and intermediate-term credit extended to individuals that is scheduled to be repaid (or has the option of repayment) in two or more installments. Data in this table also appear in the Board's G.19 (421) monthly statistical release. For ordering address, see inside front cover. 1.56 2. Outstanding balances of pools upon which securities have been issued; these balances are no longer carried on the balance sheets of the loan originator. 3. Totals include estimates for certain holders for which only consumer credit totals are available. TERMS OF C O N S U M E R I N S T A L L M E N T CREDIT 1 Percent per year except as noted 1992 1990 Apr. May June July Aug. Sept. 9.52 14.28 17.97 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 9.15 13.94 12.57 17.66 n.a. n.a. n.a. n.a. Oct INTEREST RATES 1 2 3 4 Commercial banks2 48-month new car 24-month personal ^ 120-month mobile home Credit card Auto finance 5 New car 6 Used car companies 12.07 15.44 14.11 18.02 11.78 15.46 14.02 18.17 11.14 15.18 13.70 18.23 n.a. n.a. n.a. n.a. 12.62 16.18 12.54 15.99 12.41 15.60 10.84 14.14 10.67 14.01 10.24 13.89 9.94 13.67 13.49 8.65 13.44 54.2 46.6 54.6 46.0 55.1 47.2 54.5 47.8 54.7 47.9 54.4 48.0 54.4 48.0 53.6 47.9 53.3 47.7 12,001 7,954 12,071 8,289 12,494 13,208 8,905 13,373 9,247 13,369 9,201 13,570 9,293 13,745 9,238 13,889 8,402 12.82 OTHER TERMS 4 Maturity (months) 7 New car 8 Used car Loan-to-value 9 New car 10 Used car ratio Amount financed 11 New car 12 Used car (dollars) 1. Data in this table also appear in the Board's G.19 (421) monthly statistical release. For ordering address, see inside front cover. 2. Data are available for only the second month of each quarter. FRASER Digitized for 3. Before 1983 the maturity for new car loans was 36 months, and for mobile home loans was 84 months. 4. At auto finance companies. Flow of Funds 1.57 A39 F U N D S RAISED IN U.S. CREDIT MARKETS 1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1992 1991 Ql Q2 Q3 Q4 Ql" Q2" Q3 Nonfinancial sectors r 455.4 543.3r 405.6" 406.3" 667.5 535.1 379.9 278.2 292.0 -13.8 227.4 251.4 -24.0 276.7 282.9 -6.2 288.4 317.2 -28.8 320.4 316.6 3.8 368.9 380.1 -11.2 351.9 351.5 .4 193.4 184.4 9.0 85.9" 298.6 183.2 186.5 1 Total net borrowing by domestic nonfinancial sectors .. 721.2 775.8 740.8 665.0 452.7 By sector and instrument 2 U.S. government 3 Treasury securities 4 Agency issues and mortgages 143.9 142.4 1.5 155.1 137.7 17.4 146.4 144.7 1.6 246.9 238.7 8.2 5 Private 577.3 620.7 594.4 418.2 174.4r 228.0 266.6r 6 7 8 9 10 11 12 13 14 15 16 17 18 By instrument Debt capital instruments Tax-exempt obligations Corporate bonds Mortgages Home mortgages Multifamily residential Commercial Farm Other debt instruments Consumer credit Bank loans n.e.c Open market paper Other 487.2 83.5 78.8 325.0 235.3 24.4 71.6 -6.4 90.1 32.9 9.9 1.6 45.7 474.1 53.7 103.1 317.3 241.8 16.7 60.8 -2.1 146.6 50.1 41.0 11.9 43.6 441.8 65.0 73.8 303.0 245.3 16.4 42.7 -1.5 152.6 41.7 40.2 21.4 49.3 342.3 51.2 47.1 244.0 219.4 3.7 21.0 -.1 75.8 17.5 4.4 9.7 44.2 254.6r 45.8 78.8r 130.0 142.2 -2.0 -9.4 -.8 -80.2 -12.5 -33.4 -18.4 -15.8 296. l r 35.6 76.7 183.8r 153.0 6.3r 24.6r -.1 -68.0 -10.4 -15.0 -14.3 -28.3 329.9" 48.5 96.5 184.8r 158.1 12.5r 14.9" -.7 -63.3 -7.8 -34.5 -15.9 -5.2 182.0" 210.6" 53.5 45.5 81.7 60.3" 46.8" 104.8 122.4 135.1 -29.4" 2.7 -43.8" -33.1 -2.5 .0 - 6 4 . 8 -124.7 -24.0 -8.0 -18.2 -66.1 -36.3 -7.0 13.7 -43.6 312.9 52.0 76.3 184.7 209.6 -1.3 -22.6 -1.1 -14.4 3.1 -26.9 12.6 -3.2 218.4 73.0 77.5 67.9 121.6 -31.6 -24.9 2.7 -35.2 -12.4 -21.5 -3.4 2.1 196.4 52.3 61.3 82.8 147.2 -10.7 -54.7 1.1 -10.0 .4 -23.3 1.7 11.2 19 20 21 22 23 24 By borrowing sector State and local government Household Nonfinancial business Farm Nonfarm noncorporate Corporate 83.0 296.4 197.8 -10.6 65.3 143.1 48.9 318.6 253.1 -7.5 61.8 198.8 63.2 305.6 225.6 1.6 50.4 173.6 48.3 254.2 115.6 2.5 26.7 86.4 38.5 158.0 - 2 2 . lr .9 -23.6 ,6r 36.0 160.8 31.2r 3.9 13.2 14.0 38.6 188.8 39.2r 2.1 9.8 27.2r 37.6 41.9 136.1 146.3 -56.5" -102.4" -.3 -2.2 -65.9 -51.5 9.7" -48.7" 46.1 217.1 35.4 -1.6 -20.7 57.7 63.4 143.3 -23.4 7.1 -65.6 35.2 50.0 148.1 -11.7 2.4 -51.4 37.4 25 Foreign net borrowing in United States 26 Bonds 27 Bank loans n.e.c 28 Open market paper 29 U.S. government loans 6.2 7.4 -3.6 3.8 -1.4 6.4 6.9 -1.8 8.7 -7.5 10.2 4.9 -.1 13.1 -7.6 23.9 21.4 -2.9 12.3 -6.9 14.1 14.9 3.1 6.4 -10.2 63.1 11.1 8.1 46.7 -2.8 -63.2 10.6 -3.5 -51.9 -18.3 15.6 15.5 1.4 16.0 -17.2 41.0 22.3 6.5 14.9 -2.7 9.9 4.9 1.5 -7.8 11.4 55.9 22.8 14.1 27.7 -8.8 30.1 23.2 3.4 12.8 -9.3 30 Total domestic plus foreign 727.4 782.2 750.9 688.9 466.8r 518.5 480.1" 421.2" 447.3" 677.3 591.0 410.1 117.2" Financial sectors 31 Total net borrowing by financial sectors 259.0 211.4 220.1 187.1 139.2 108.9 104.0" 143.4" 200.5 108.9 218.4 246.2 By instrument U.S. government-related Sponsored-credit-agency securities Mortgage pool securities Loans from U.S. government 171.8 30.2 142.3 -.8 119.8 44.9 74.9 .0 151.0 25.2 125.8 .0 167.4 17.1 150.3 -.1 147.7 9.2 138.6 .0 154.6 13.1 141.5 .0 127.4 -29.7 157.1 .0 156.3 20.6 135.8 .0 152.7 32.6 120.1 -.1 126.8 11.5 115.3 .0 199.5 48.3 151.2 .0 152.9 62.3 90.6 .0 36 Private 37 Corporate bonds 38 Mortgages 39 Bank loans n.e.c 40 Open market paper 41 Loans from Federal Home Loan Banks 87.2 39.1 .4 -3.6 26.9 24.4 91.7 16.2 .3 .6 54.8 19.7 69.1 46.8 .0 1.9 31.3 -11.0 19.7 34.4 .3 1.2 8.6 -24.7 -8.6 57.7 .6 3.2 -32.0 -38.0 -45.7 41.4 • lr 1.0 -52.5 -35.8 -23.4" 72.4" .9" -2.9 -46.0 -47.7 -12.9" 29.5" -.2" 10.2 -16.7 -35.7 47.8 87.5 1.5 4.5 -12.7 -33.0 -17.9 -25.1 .9 8.2 7.6 -9.5 18.9 25.5 .1 3.9 -16.3 5.7 93.2 54.5 .1 5.5 11.8 21.3 By borrowing sector 42 Sponsored credit agencies 43 Mortgage pools 44 Private 45 Commercial banks 46 Bank affiliates 47 Savings and loan associations 48 Mutual savings banks 49 Finance companies 50 Real estate investment trusts (REITs) Securitized credit obligation (SCO) issuers 51 29.5 142.3 87.2 6.2 14.3 19.6 8.1 -.5 .4 39.1 44.9 74.9 91.7 -3.0 5.2 19.9 1.9 31.5 3.6 32.5 25.2 125.8 69.1 -1.4 6.2 -14.1 -1.4 59.7 -1.9 22.0 17.0 150.3 19.7 -1.1 -27.7 -29.9 -.5 35.6 -1.9 45.2 9.1 138.6 -8.6 -13.3 -2.5 -39.5 -3.5 14.5 .0 35.6 13.1 141.5 -45.7 -18.4 -9.3 -42.9 2.0 -10.3 .1 33.2 -29.7 157.1 -23.4" -11.7 -3.5 -48.7 -1.7 3.4 .1" 38.7 20.6 135.8 -12.9" -9.2 -6.8 -41.1 -5.5 12.2 -.9" 38.5 32.5 120.1 47.8 -14.1 9.6 -25.1 -8.7 52.9 .8 32.3 11.5 115.3 -17.9 7.2 2.7 -20.3 4.3 -39.0 4.6 22.5 48.3 151.2 18.9 .8 -8.2 2.7 .3 -20.9 .9 43.2 62.3 90.6 93.2 1.6 2.2 10.1 8.3 34.6 -.7 37.1 32 33 34 35 A40 DomesticNonfinancialStatistics • February 1993 1.57—Continued 1992 1991 Transaction category or sector 1987 1988 1989 1990 1991 Ql Q2 Q3 Q4 Qlr Q2r Q3 564.6r 647.7' 786.2 809.4 656.2 444.8 53.5 126.6r 46.5 -24.0 -6.7 -37.0 -39.1 473.2 45.5 170. l r 106.2 -8.0 -55.1 -4.9 -79.3 495.7 52.0 56.0 185.6 3.1 -17.2 12.4 -1.3 551.4 73.0 125.9 67.9 -12.4 -3.5 8.1 -1.0 346.4 52.3 139.0 82.9 .4 -14.3 26.3 23.3 All sectors 52 Total net borrowing, all sectors 986.4 993.6 971.0 876.0 606.0r 53 54 55 56 57 58 59 60 316.4 83.5 125.2 325.4 32.9 2.7 32.3 68.0 274.9 53.7 126.3 317.5 50.1 39.9 75.4 55.8 297.3 65.0 125.5 303.0 41.7 41.9 65.9 30.6 414.4 51.2 102.9 244.3 17.5 2.8 30.7 12.4 426.0 45.8 151.4r 130.6 -12.5 -27.1 -44.0 -64.2 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 627.4 584. l r 382.0 35.6 129.2 183.9 -10.4 -5.9 -20.2 -66.9 404.1 48.5 179.5r 185.8 -7.8 -40.9 -113.8 -71.2 External corporate equity funds raised in United States 61 Total net share issues 62 Mutual funds 63 All other 64 Nonfinancial corporations 65 Financial corporations 66 Foreign shares purchased in United States 7.1 -118.4 -65.7 22.1 198.8 112.4 182.3r 231.8r 268.9 271.7 281.5 305.3 70.2 -63.2 -75.5 14.5 -2.1 6.1 -124.5 -129.5 4.1 .9 38.5 -104.2 -124.2 2.7 17.2 67.9 -45.8 -63.0 9.8 7.4 150.5 48.3 18.3 -.1 30.2 98.1 14.3 -6.0 -6.7 27.0 125.6 56.7r 12.0 8.r 36.6 182.5 49.3 r 19.0 -3.8r 34.1 195.9 72.9 48.0 2.0 22.9 189.8 81.9 46.0 6.0 29.9 223.3 58.2 36.0 9.7 12.5 249.2 56.2 11.0 9.2 36.0 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables F.2 through F.5. For ordering address, see inside front cover. Flow of Funds 1.58 A41 SUMMARY OF FINANCIAL TRANSACTIONS 1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 1992 1991 Transaction category or sector 1987 1988 1989 1990 1991 Ql Q2 Q3 Q4 Ql* Q2* Q3 N E T LENDING IN CREDIT MARKETS 1 Total net lending in credit markets 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Private domestic nonfinancial sectors Households Nonfarm noncorporate business Nonfinancial corporate business State and local governments U.S. government Foreign Financial sectors Sponsored credit agencies Mortgage pools Monetary authority Commercial banking U.S. commercial banks Foreign banking offices Bank affiliates Banks in U.S. possession Private nonbank finance Thrift institutions Savings and loan associations Mutual savings banks Credit unions Insurance Life insurance companies Other insurance companies Private pension funds State and local government retirement funds Finance n.e.c Finance companies Mutual funds Money market funds Real estate investment trusts (REITs) Brokers and dealers Securitized credit obligation (SCOs) issuers 584.1* 564.6* 647.7* 786.2 809.4 656.2 49.4* 203.8 21.6r 190.5* 172.3 -13.7 r 13.3* 174.1* -1.4 -1.9* -1.8* -2.0 6.6 2oy -7.6* 29.0 45.4 26.2 16.3 -10.6 33.7 10.0 35.2 24.8 58.4 44.7 19.1 51.4 580.2 529.7 523.8* 317.4 16.4 14.2 27.4 -22.3 141.5 150.3 138.6 157.1 8.1 31.1 58.1 -4.0 125.4 114.4 84.0 34.7 95.2 77.0 38.9 6.4 28.4 42.2 48.5 33.7 -4.7 -2.8 -1.5 -2.6 4.5 -1.9 -.1 -2.8 279.9 261.8 182.3* 152.0 -151.9 -144.9 -188.3 -164.8 -143.9 -140.9 -179.8 -144.0 -16.5 -15.5 -11.7 -31.1 8.5 11.5 3.3 10.2 188.5 215.4 236.2 219.5 94.4 83.2 112.9 132.8 32.7 26.5 34.7 37.0 16.6 60.6 42.1 .7 51.0 48.5 37.0 49.0 134.4* 243.3 191.3 97.4 41.6 -13.1 -18.5 -14.5 41.4 44.0 90.3 75.3 80.9 30.1 134.2 -68.9 -.7 -.7 -1.6* -.1 -56.9 34.9 49.0 66.8 33.2 45.2 35.6 38.7 -135.3* -177.9* -1.6 32.2 12.1 -2.1 37.3 664.7* 33.7 135.8 48.1 82.4 26.5 56.7 2.4 -3.3 364.7* -176.8 -156.3 -30.8 10.3 254.5 73.8 36.8 110.5 33.4 287.0* -5.2 117.1 1.1 -.3* 135.8 38.5 -18.2* -64.4* -2.1 30.1 18.2 -17.9 71.0 612.9 17.8 120.1 22.3 104.3 45.6 61.3 -1.1 -1.5 348.3 -49.7 -83.3 11.5 22.2 151.4 13.2 32.1 89.2 17.0 246.5 -14.1 124.8 53.9 -.9 50.5 32.3 139.2 160.0 -1.9 -2.9 -16.1 13.9 88.4 544.7 93.0 115.3 33.2 98.9 91.9 .6 6.4 .0 204.4 -113.3 -137.9 7.6 17.0 120.4 80.6 33.1 -22.5 29.2 197.2 .8 105.3 61.8 -.7 7.5 22.5 73.5 47.6 -2.5 21.4 7.1 -25.1 142.5 618.4 39.9 151.2 9.8 58.4 .5 58.6 -.6 -.1 359.2 -81.6 -92.4 -7.4 18.3 192.9 92.5 22.2 51.9 26.3 247.9 -23.0 156.1 -20.9 2.6 89.8 43.2 -252.7 -276.4 -1.9 38.0 -12.3 -27.8 58.4 878.3 73.9 90.6 10.8 101.5 105.2 -2.7 -1.4 .4 601.5 -21.8 -14.5 -17.5 10.2 224.6 98.7 2.5 88.7 34.7 398.7 18.9 172.3 -16.3 2.6 184.0 37.1 584.1* 564.6* 647.7* 786.2 809.4 656.2 -4.8 .4 31.4* 197.9* -79.8* -75.4 7.9 -1.1 -63.0 -58.7 43.1 -3.6 125.6 56.7* 20.1 41.1* -11.5 -34.1 65.0* -15.5 -5.0 .4 .5 19.4 9.2* 339.6 232.5* 99.5* -36.8* 47.8* 27.3 114.4 104.5 -42.4 13.0 -78.1 -117.4 4.0 26.8 36.3 16.0 3.0 -5.0* 182.5 195.9 72.9 49.3* 82.4 120.7 47.5* -7.7* 13.0 -3.3 44.9 5.1 243.2* 52.3* 3.5 .1 21.2 145.9 48.8 93.2 89.0 -27.7 -81.3 106.1 15.5 -8.3 189.8 81.9 -70.0 82.6 -4.4 -24.6 124.5 -6.5 .3 30.3 185.5 27.4 -47.4 93.2 -88.5 -106.0 -38.3 136.7 -44.5 223.3 58.2 -4.3 45.5 14.2 12.5 298.9 2.5 .2 19.9 312.2 120.8 191.7 202.2 -73.3 -63.5 -13.0 135.4 4.0 249.2 56.2 73.6 42.1 -4.3 1.1 190.0 916.7* 1,507.3* 1,522.9* 1,478.7 1,647.2 1,911.4 23.9 -2.1 27.1* -73.1 -6.1 -4.0* 4.4 -13.3 14.7 -11.7 -17.5 -12.1 .4 -23.9 -6.5 -.3 -.2 28.4 20.8 76.2 36.9 23.4 2.0 9.3* -194.2* -.1 .2 44.0* 18.5 185.0* -.4 13.4 -41.1 -18.3 -78.0 -.1 -15.1 101.5 29.5 -64.4 -.3 -8.4 67.7 11.9 36.3 749.5* 1,564.2* 1,358.6* 1,597.2 1,637.2 1,834.3 876.0 606.0* 627.4 986.4 993.6 971.0 237.4 180.7 -5.6 18.5 43.9 -7.9 61.8 695.0 27.0 142.3 24.7 135.3 99.1 34.2 2.0 .1 365.8 136.9 93.5 25.6 17.8 153.5 91.7 39.5 -4.7 27.0 75.4 38.2 25.8 1.8 1.0 -30.6 39.1 226.2 198.9 3.1 5.7 18.6 -10.6 96.3 681.8 37.1 74.9 10.5 157.1 127.1 29.4 -.1 .7 402.2 119.0 87.4 15.3 16.3 186.2 103.8 29.2 18.1 35.1 96.9 49.2 11.9 10.7 .9 -8.2 32.5 209.6 179.5 -.8 12.9 17.9 -3.1 74.1 690.4 -.5 125.8 -7.3 176.8 145.7 26.7 2.8 1.6 395.7 -91.0 -93.9 -4.8 7.7 207.7 93.1 29.7 36.2 48.7 278.9 69.3 23.8 67.1 .5 96.3 22.0 986.4 993.6 971.0 876.0 606.0* 627.4 -9.7 .5 26.0 104.5 34.8 141.1 4.1r 76.3r 50.6 24.0 -10.9 -3.1 70.2 -63.2 -27.4 57.7 5.4 -60.9 241.2 4.0 .5 25.3 193.6 2.9 259.9 43.2 120.8 53.6 21.9 23.5 -3.1 6.1 -124.5 3.0 89.2 5.3 -31.2 222.3 24.8 4.1 28.8 221.4 -16.5 290.0 6.1 96.7 17.6 90.1 78.3 1.1 38.5 -104.2 15.6 60.0 2.0 -32.5 269.9 2.0 2.5 25.7 186.8 34.2 96.8 44.2 59.9 -66.7 70.3 -23.5 12.6 67.9 -45.8 3.5 44.1 -.5 -39.3 120.5 -5.9 .0 22.0 263.5r -5.0* 6i.r 75.8 16.7 -60.9 41.3 -16.4 4.6* 150.5 48.3 51.4 10.3* -9.1 — 1.4r 145.0* 1.5 -1.2 27.9* 284.1 -3.0* 244.8 76.2 97.3 15.1 193.0 -160.7 24.0 98.1 14.3 -17.5 -39.6* -34.8 -21.5* 219.6* 1,506.7 1,650.2 1,772.7 .0 .4 -8.5 1.6 .8 -.9 8.4 -3.2 .6 3.3 2.5 21.5 -.1 -4.0 -21.2 6.7 10.0 -.1 -3.0 -29.8 6.3 4.4 -.2 -4.4 23.9 2.3 -95.6 .2 1.6 -34.8 6.5 -13.8 1,523.4 1,670.7 1,841.0 RELATION OF LIABILITIES TO FINANCIAL ASSETS 35 Net flows through credit markets 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 Other financial sources Official foreign exchange Treasury currency and special drawing rights Life insurance reserves Pension fund reserves Interbank claims Deposits at financial institutions Checkable deposits and currency Small time and savings deposits Large time deposits Money market fund shares Security repurchase agreements Foreign deposits Mutual fund shares Corporate equities Security credit Trade debt Taxes payable Noncorporate proprietors' equity Miscellaneous 55 Total financial sources Floats not included in assets (-) 56 U.S. government checking deposits 57 Other checkable deposits 58 Trade credit 59 60 61 62 63 Liabilities not identified as assets ( - ) Treasury currency Interbank claims Security repurchase agreements Taxes payable Miscellaneous 64 Totals identified to sectors as assets I. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables F.6 and F.7. For ordering address, see inside front cover. 1,374.3 1,336.8* 1,400.3* -13.1 2.0 18.3* -18.8 13.3 9.8* -.6 -1.9 26.2 55.3 10.4* -115.4 7.4 -14.4 -29.9* -119.9* 1,387.5 1,316.1* 1,592.2* 15.6 3.0 40.5* 2. Excludes corporate equities and mutual fund shares. A42 1.59 DomesticNonfinancialStatistics • February 1993 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING 1 Billions of dollars, end of period 1991 Transaction category or sector 1988 1989 1990 1992 1991 Ql Q3 Q2 Q4 Ql Q2 Q3 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 9,316.3 10,087.1 10,760.8 11,210.8 10,832.3 10,960.3 11,082.5 11,210.8 11,336.7 11,464.8 11,583.6 By lending sector and instrument 2 U.S. government Treasury securities 3 4 Agency issues and mortgages 2,104.9 2,082.3 22.6 2,251.2 2,227.0 24.2 2,498.1 2,465.8 32.4 2,776.4 2,757.8 18.6 2,548.8 2,522.4 26.4 2,591.9 2,567.1 24.8 2,687.2 2,669.6 17.6 2,776.4 2,757.8 18.6 2,859.7 2,844.0 15.8 2.923.3 2.907.4 15.9 2,998.9 2,980.7 18.1 5 Private 7,211.4 7,835.9 8,262.6 8,434.5 8,283.5 8,368.3 8,395.3 8,434.5 8,477.0 8,541.5 8,584.8 6 7 8 9 10 11 12 13 14 15 16 17 18 By instrument Debt capital instruments Tax-exempt obligations Corporate bonds Mortgages Home mortgages Multifamily residential Commercial Farm Other debt instruments Consumer credit Bank loans n.e.c Open market paper Other 5,119.0 939.4 852.2 3,327.3 2,257.5 286.7 696.4 86.8 2,092.5 742.1 710.6 85.7 554.1 5,577.9 1.004.4 926.1 3.647.5 2,515.1 304.4 742.6 85.3 2,258.0 791.8 760.7 107.1 598.4 5,936.0 1.055.6 973.2 3,907.3 2,760.0 305.8 757.6 84.0 2.326.7 809.3 758.0 116.9 642.6 6,190.6 1,101.4 1.052.0 4,037.3 2.902.1 303.8 748.2 83.2 2,243.9 796.7 724.6 98.5 624.1 5.997.7 1,061.5 992.3 3.943.8 2.788.9 307.3 763.7 83.9 2,285.8 785.3 748.3 120.8 631.5 6,087.5 1,072.5 1.016.5 3.998.6 2,836.9 310.4 767.4 83.8 2,280.8 786.7 742.0 119.4 632.6 6.138.4 1,089.3 1,036.9 4,012.2 2.869.5 303.1 756.5 83.1 2,256.9 785.9 734.1 107.0 629.8 6,190.6 1,101.4 1.052.0 4,037.3 2.902.1 303.8 748.2 83.2 2,243.9 796.7 724.6 98.5 624.1 6,256.9 1,111.5 1,071.0 4.074.4 2.945.5 303.5 742.6 82.9 2,220.0 775.7 712.5 110.3 621.6 6,319.4 1,128.6 1.090.4 4.100.5 2.985.0 295.6 736.4 83.6 2.222.1 775.8 709.4 111.7 625.1 6,373.9 1.145.6 1.105.7 4,122.6 3,023.2 292.9 722.7 83.8 2,210.9 781.1 699.6 108.3 621.9 19 20 21 22 23 24 By borrowing sector State and local government Household Nonfinancial business Farm Nonfarm noncorporate Corporate 752.5 3,177.3 3,281.6 137.6 1,127.1 2,016.9 815.7 3.508.2 3,512.0 139.2 1,177.5 2.195.3 864.0 3,780.6 3,618.0 140.5 1,204.2 2,273.4 902.5 3,938.6 3,593.3 138.8 1,180.6 2,273.9 870.1 3,788.3 3.625.2 136.8 1,207.1 2.281.3 878.5 3,848.3 3,641.5 139.6 1,210.8 2,291.1 891.4 3,888.7 3,615.3 140.4 1,191.0 2,283.9 902.5 3,938.6 3,593.3 138.8 1,180.6 2,273.9 911.3 3.960.8 3.604.9 136.3 1,174.9 2,293.7 925.9 4,009.9 3,605.8 140.2 1,160.0 2,305.6 942.3 4,051.6 3,590.9 141.7 1,144.0 2,305.2 244.6 254.8 278.6 292.7 291.3 277.6 282.2 292.7 282.4 298.5 307.0 83.1 21.5 49.9 90.1 88.0 21.4 63.0 82.4 109.4 18.5 75.3 75.4 124.2 21.6 81.8 65.2 112.1 20.5 87.0 71.6 114.8 19.7 74.0 69.1 118.6 20.0 78.0 65.6 124.2 21.6 81.8 65.2 125.4 22.0 70.5 64.4 131.1 25.5 77.5 64.4 137.0 26.4 80.7 63.1 9,560.9 10,341.9 11,039.4 11,503.6 11,123.6 11,237.9 11,364.7 11,503.6 11,619.1 11,763.3 11,890.7 25 Foreign credit market debt held in United States 26 27 28 29 Bonds Bank loans n.e.c Open market paper U.S. government loans 30 Total credit market debt owed by nonfinancial sectors, domestic and foreign Financial sectors 31 Total credit market debt owed by financial sectors 2,082.9 2,333.0 2,524.2 2,667.8 2,546.3 2,571.4 2,608.2 2,667.8 2,686.9 2,739.9 2,802.6 By instrument U.S. government-related Sponsored credit-agency securities Mortgage pool securities Loans from U.S. government Private Corporate bonds Mortgages Bank loans n.e.c Open market paper Loans from Federal Home Loan Banks.., 1,098.4 348.1 745.3 5.0 984.6 415.1 3.4 35.6 377.7 152.8 1,249.3 373.3 871.0 5.0 1,083.7 491.9 3.4 37.5 409.1 141.8 1,418.4 393.7 1,019.9 4.9 1,105.8 528.2 4.2 38.6 417.7 117.1 1,566.2 402.9 1,158.5 4.8 1,101.6 590.2 4.8 41.8 385.7 79.1 1,452.1 397.0 1,050.3 4.9 1,094.1 545.4 4.2 36.5 400.9 107.0 1,482.8 389.6 1,088.4 4.9 1,088.6 562.2 4.5 37.0 390.1 94.7 1,524.4 394.7 1,124.8 4.9 1,083.9 569.5 4.4 39.0 387.0 83.9 1,566.2 402.9 1,158.5 4.8 1,101.6 590.2 4.8 41.8 385.7 79.1 1,592.9 405.7 1,182.4 4.8 1,094.0 578.2 5.0 41.6 392.9 76.3 1,641.6 417.8 1,219.0 4.8 1,098.3 583.2 5.0 43.7 389.5 76.9 1,682.2 433.4 1,244.0 4.8 1,120.4 597.0 5.1 44.5 393.7 80.2 By borrowing sector 42 Sponsored credit agencies 43 Mortgage pools 44 Private financial sectors 45 Commercial banks 46 Bank affiliates 47 Savings and loan associations 48 Mutual savings banks 49 Finance companies 50 Real estate investment trusts (REITs) 51 Securitized credit obligation (SCO) issuers 353.1 745.3 984.6 78.8 136.2 159.3 18.6 444.6 11.4 135.7 378.3 871.0 1,083.7 77.4 142.5 145.2 17.2 504.2 10.1 187.1 398.5 1,019.9 1.105.8 76.3 114.8 115.3 16.7 539.8 10.6 232.3 407.7 1,158.5 1,101.6 63.0 112.3 75.9 13.2 557.9 11.4 268.0 401.8 1,050.3 1,094.1 68.1 114.4 104.2 16.4 539.6 10.8 240.6 394.4 1,088.4 1,088.6 65.9 113.3 91.0 16.6 540.4 11.0 250.3 399.5 1,124.8 1,083.9 64.6 110.6 79.0 15.2 543.7 11.0 259.9 407.7 1,158.5 1,101.6 63.0 112.3 75.9 13.2 557.9 11.4 268.0 410.5 1,182.4 1,094.0 60.8 115.0 71.2 13.5 547.1 12.7 273.6 422.6 1,219.0 1,098.3 61.7 112.7 70.3 14.3 541.8 13.2 284.4 438.2 1,244.0 1,120.4 63.3 112.3 71.0 16.2 550.8 13.2 293.7 32 33 34 35 36 37 38 39 40 41 All sectors 52 Total credit market debt, domestic and foreign.. 53 54 55 56 57 58 59 60 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 11,643.9 12,674.9 13,563.6 14,171.3 13,669.9 13,809.2 13,973.0 14,171.3 14,306.0 14,503.3 14,693.3 3,198.3 939.4 1,350.4 3,330.7 742.1 767.7 513.4 801.9 3,495.6 1,004.4 1,506.0 3,650.9 791.8 819.6 579.2 827.5 3,911.7 1,055.6 1,610.7 3,911.5 809.3 815.1 609.9 839.9 4,337.7 1,101.4 1,766.4 4,042.1 796.7 788.0 565.9 773.2 3,996.1 1,061.5 1,649.9 3,948.1 785.3 805.3 608.8 814.9 4,069.8 1,072.5 1,693.5 4,003.1 786.7 798.7 583.6 801.4 4,206.7 1,089.3 1,725.0 4,016.7 785.9 793.2 572.0 784.2 4,337.7 1,101.4 1,766.4 4,042.1 796.7 788.0 565.9 773.2 4,447.8 1,111.5 1,774.6 4,079.4 775.7 776.1 573.7 767.1 4,560.1 1,128.6 1,804.7 4,105.5 775.8 778.7 578.7 771.2 4,676.2 1,145.6 1,839.7 4,127.6 781.1 770.4 582.6 770.0 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. Flow of Funds 1.60 A43 S U M M A R Y OF F I N A N C I A L A S S E T S A N D LIABILITIES 1 Billions of dollars except as noted, end of period 1991 Transaction category or sector 1988 1989 1990 1992 1991 Q1 Q2 Q3 Qlr Q2" Q3 14,171.3" 14,306.0 14,503.3 14,693.3 2,4%. 1 1,716.6 51.9 1%.2 531.4 250.2 859.3 10,700.4 419.9 1,182.4 271.8 2,860.6 2,514.0 313.3 13.6 19.7 5,965.8 1,161.8 771.1 213.4 177.2 2,750.5 1,224.3 387.0 657.6 481.6 2,053.6 641.0 480.3 423.1 6.8 228.8 273.6 2,487.1 1,690.9 51.3 210.7 534.2 245.2 894.9 10,876.1 429.0 1,219.0 282.6 2,882.9 2,521.9 328.2 13.1 19.7 6,062.6 1,143.0 748.8 211.6 182.6 2,801.0 1,249.8 392.5 670.5 488.2 2,118.6 641.6 520.4 413.5 7.5 251.2 284.4 2,456.8 1,665.7 50.8 211.0 529.4 237.8 909.5 11,089.1 445.6 1,244.0 285.2 2,908.9 2,550.0 326.6 12.5 19.8 6,205.3 1,137.5 743.2 207.2 187.1 2,856.2 1,273.5 393.1 692.7 4%.9 2,211.6 642.5 561.2 408.8 8.1 297.3 293.7 14,171.3" 14,306.0 14,503.3 14,693.3 Q4 CREDIT MARKET DEBT OUTSTANDING 2 1 Total credit market assets 2 Private domestic nonfinancial sectors 3 Households 4 Nonfarm noncorporate business 5 Nonfinancial corporate business 6 State and local governments 7 U.S. government 8 Foreign 9 Financial sectors 10 Sponsored credit agencies 11 Mortgage pools 12 Monetary authority 13 Commercial banking 14 U.S. commercial banks Foreign banking offices 15 16 Bank affiliates Banks in U.S. possession 17 Private nonbank finance 18 Thrift institutions 19 20 Savings and loan associations 21 Mutual savings banks 22 Credit unions Insurance 23 24 Life insurance companies 25 Other insurance companies 26 Private pension funds 27 State and local government retirement funds. Finance n.e.c 28 29 Finance companies 30 Mutual funds 31 Money market funds 32 Real estate investment trusts (REITs) Brokers and dealers 33 34 Securitized credit obligation (SCOs) issuers . 13,563.6 14,171.3r 13,669.9 11,643.9 12,674.9 2,185.5 1,485.1 57.2 167.4 475.8 213.2 653.2 8,592.0 367.7 745.3 240.6 2,476.3 2,231.9 215.6 13.4 15.4 4,762.1 1,572.0 1,184.2 240.6 147.2 1,932.6 920.0 287.9 358.5 366.2 1,257.5 559.2 283.4 224.7 7.8 46.7 135.7 2,440.5 1,710.1 56.4 180.3 493.7 205.1 734.2 9,295.1 367.2 871.0 233.3 2,643.9 2,368.4 242.3 16.2 17.1 5,179.7 1,484.9 1,088.9 241.1 154.9 2,140.3 1,013.1 317.5 394.7 414.9 1,554.5 617.1 307.2 291.8 8.4 142.9 187.1 11,643.9 12,674.9 27.1 53.6 61.3 19.8 325.5 2,755.0 46.9 4,354.7 882.8 2,169.2 596.9 338.0 325.0 42.8 478.3 118.3 838.4 79.8 2,312.0 23.8 354.3 3,210.5 32.4 4,644.6 888.6 2,265.4 615.4 428.1 403.2 43.9 566.2 133.9 903.9 81.8 2,508.3 26.3 380.0 3,303.0 64.0 4,741.4 932.8 2,325.3 548.7 498.4 379.7 56.6 602.1 137.4 938.0 81.4 2,678.8 2,644.2 2,490.8r 1,882.3 1,693.6" 55.0 53. r 186.9 207.9" 519.9 536.2 238.7 246.2 792.4 837.2" 9,888.3 10,597.2" 383.6 397.7 1,019.9 1,158.5 241.4 272.5 2,769.3 2,853.3 2,463.6 2,502.5 270.8 319.2 13.4 11.9 21.6 19.7 5,474.1 5,915.1" 1,335.5 1,190.6 945.1 804.2 227.1 211.5 163.4 174.9 2,329.1 2,723.8" 1,116.5 1,199.6 344.0 378.7 431.3 671.1" 437.4 474.3 1,809.4 2,000.7 658.7 645.6 360.2 450.5 372.7 402.8 7.7 7.0 177.9 226.9 232.3 268.0 13,809.2" 13,973.0 2,634.3" 2,653.8 2,648.2 2,490.8" 1,875.4" 1,882.1/ 1,875.5" 1,693.6" 53.1" 53.8" 53.3" 52.9 189.7" 174.5" 189.9" 207.9" 530.6 528.8 530.0 536.2 245.5 252.9 252.0 246.2 797.1 810.0 819.3 837.2" 9,992.9" 10,092.6" 10,253.3 10,597.2" 388.5 382.7 389.5 397.7 1,050.3 1,088.4 1,124.8 1,158.5 247.3 253.7 264.7 272.5 2,780.2 2,796.6 2,817.8 2,853.3 2,480.0 2,488.7 2,470.8 2,502.5 284.4 275.6 297.5 319.2 12.3 11.3 11.6 11.9 21.6 20.9 20.0 19.7 5,526./ 5,571.2" 5,656.5 5,915.1" 1,287.8 1,248.4 1,205.1 1,190.6 901.3 866.3 826.1 804.2 224.1 216.4 208.7 211.5 165.7 170.2 174.9 162.3 2,448.8 2,511.7 2,392.0 2,723.8" 1,148.5 1,183.7 1,201.4 1,199.6 361.4 352.2 370.7 378.7 441.8 442.0 469.6 671.1" 461.7 449.5 470.1 474.3 1,846.9" 1,874.0" 1,939.7 2,000.7 651.7 647.4 649.4 645.6 374.6 394.4 421.4 450.5 411.4 389.9 389.5 402.8 7.3" 7.3" 7.2 7.0 163.6 180.4 214.3 226.9 240.6 250.3 259.9 268.0 RELATION OF LIABILITIES TO FINANCIAL ASSETS 35 Total credit market debt 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Other liabilities Official foreign exchange Treasury currency and special drawing rights certificates Life insurance reserves Pension fund reserves Interbank claims Deposits at financial institutions Checkable deposits and currency Small time and savings deposits Large time deposits Money market fund shares Security repurchase agreements Foreign deposits Mutual fund shares Security credit Trade debt Taxes payable Miscellaneous 13,563.6 14,171.3" 13,669.9 55.4 13,809.2" 13,973.0 52.7 54.4 55.4 26.3 407.3 4,251.2 64.2 4,801.4 984.7 2,341.3 468.8 571.0 376.4 59.1 859.3 195.1 942.6 73.5 2,816.2 26.4 414.9 4,304.4 69.2 4,797.5 1,032.8 2,315.3 437.5 557.2 406.8 47.9 936.7 194.1 949.4 70.1 2,870.5 26.5 419.8 4,439.7 100.6 4,841.7 1,071.9 2,2%.4 425.5 553.2 445.7 48.9 1,013.4 212.4 976.2 72.2 2,929.0 26,577.2 28,585.4" 26,954.9" 27,125.9" 27,638.6" 28,585.4" 28,795.8 29,190.9 29,780.2 26.3 402.0 4,235.9" 63.9" 4,802.5" 1,008.5 2,342.0 487.9 539.6 363.4 61.2" 812.4 188.9 940.8" 72.2 2,813.7" 56.6 26.0 385.0 3,520.6 59.2" 4,776.4 905.1 2,355.3 553.1 551.7 348.6 62.6 661.6 132.5 903.5" 75.1 2,688.6" 53.6 26.1 392.3 3,555.8 35.8" 4,765.7 933.1 2,351.5 532.6 532.8 354.0 61.7 683.7 137.5 909.4" 65.8 2,691.0" 52.9 26.2 397.2 3,720.8 60.7" 4,769.5 948.3 2,339.7 517.1 533.1 368.9 62.4 744.2 158.1 935.3" 71.8 2,729.0" 55.4 26.3 402.0 4,235.9" 63.9" 4,802.5" 1,008.5 2,342.0 487.9 539.6 363.4 61.2" 812.4 188.9 940.8" 72.2 2,813.7" 22,999.5 25,188.3 Financial assets not included in liabilities (+) 54 Gold and special drawing rights 55 Corporate equities 56 Household equity in noncorporate business 40.0 3,141.6 2,373.1 40.3 3,819.7 2,524.9 41.3 3,506.6 2,449.4 41.6 4,630.0 2,372.5" 40.7 4,047.2 2,478.4 40.7 4,104.7 2,509.4" 41.1 4,338.5 2,495.9" 41.6 4,630.0 2,372.5" 41.3 4,739.7 2,381.4 41.5 4,678.8 2,362.6 23.2 4,832.4 2,335.6 Floats not included in assets ( - ) 57 U.S. government checking deposits 58 Other checkable deposits 59 Trade credit 5.9 29.6 -164.3 6.1 26.5 -159.7 15.0 28.9 -148.0 3.8" 30.9 -134.1" 5.2 26.7 -157.9" 8.3 29.9 -157.7" 19.8 23.6 -154.2" 3.8" 30.9 -134.1" .9 22.0 -133.3 1.4 20.1 -148.6 4.1 8.3 -154.3 -4.1 -28.5 -12.4 21.4 -134.6 -4.3 -31.0 11.5 20.6 -253.3 -4.1 -32.0 -23.3 21.8 -249.7 -4.8 -4.2 -12.9" 18.8 -451.6" -4.6 -15.5 -39.6 21.4 -262.4" -4.7 -9.9 -25.8 11.7 -244.5" -4.7 -4.7 -10.6 17.5 -303.2" -4.8 -4.2 -12.9" 18.8 -451.6" -4.9 -1.8 -10.1 16.6 -441.1 -4.9 -4.0 11.0 12.4 -441.2 -5.0 -7.4 32.9 9.4 -467.8 28,841.1 31,956.8 32,966.0 36,183.5" 33,947.9" 34,173.4" 34,930.5" 36,183.5" 36,510.0 36,827.5 37,551.1 53 Total liabilities 60 61 62 63 64 Liabilities not identified as assets ( - ) Treasury currency Interbank claims Security repurchase agreements Taxes payable Miscellaneous 65 Totals identified to sectors as assets 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables L.6 through L.7. For ordering address, see inside front cover. 2. Excludes corporate equities and mutual fund shares, A44 2.10 Domestic Nonfinancial Statistics • February 1993 NONFINANCIAL BUSINESS ACTIVITY Selected Measures Monthly data seasonally adjusted, 1987= 100 except as noted 1992 Measure 1989 1990 1991 Mar. Apr. May June July Aug." Sept." Oct." Nov. 1 Industrial production1 108.1 109.2 107.1 107.6 108.1 108.9 108.5 109.4 109.1 108.8 109.3 109.7 Market groupings Products, total Final, total Consumer goods Equipment Intermediate Materials 108.6 109.1 106.7 112.3 106.8 107.4 110.1 110.9 107.3 115.5 107.7 107.8 108.1 109.6 107.5 112.2 103.4 105.5 108.5 109.8 109.3 110.4 104.4 106.1 109.0 110.6 110.1 111.3 103.9 106.8 109.7 111.4 110.8 112.3 104.4 107.7 109.0 110.5 109.6 111.6 104.4 107.6 109.6 111.0 110.4 111.8 105.1 109.0 109.8 111.5 110.8 112.5 104.4 108.1 109.3 111.0 110.3 111.9 104.0 108.0 110.1 111.9 111.0 112.9 104.5 108.1 110.4 112.2 111.3 113.4 104.8 108.6 108.9 109.9 107.4 108.5 109.0 109.9 109.6 110.2 110.1 109.7 110.3 110.8 2 3 4 5 6 7 Industry groupings 8 Manufacturing 9 Capacity utilization, manufacturing (percent) 2 83.9 82.3 78.2 77.5 77.7 78.2 77.8 78.1 77.9 77.4 77.7 77.9 10 Construction contracts 3 105.2 95.3 89.6 r 96.0 93.0 86.0 90.0 89.0 90.0 89.0 104.0 n.a. 11 Nonagricultural employment, total 4 12 Goods-producing, total 13 Manufacturing, total 14 Manufacturing, production worker 15 Service-producing 16 Personal income, total 17 Wages and salary disbursements 18 Manufacturing 19 Disposable personal income 20 Retail sales 6 106.0 102.5 102.2 102.3 107.1 115.2 114.4 110.6 115.1 113.5 107.5 101.0 100.5 100.1 109.5 122.7 121.3 113.5 122.9 118.7 106.0 96.4 97.0 96.1 109.0" 127.0 124.4 113.6 128.0 119.8 105.9 95.2 96.1 95.7 109.3 131.8 128.0 114.6 133.8 123.1 106.0 95.2 96.1 95.7 109.5 131.9 127.8 115.0 133.8 123.5 106.2 95.3 96.1 95.7 109.6 132.4 128.6 115.5 134.2 124.1 106.1 95.0 95.9 95.4 109.6 132.5 128.5 115.1 134.4 124.0 106.3 94.9 95.9 95.5 109.9 132.7" 128.6" 115.3 134.4" 125.4 106.2 94.6 95.4 94.9 109.9 132.9 129.4 115.0 134.5 125.5 106.2 94.3 95.2 94.6 110.0 133.6 129.2 115.0 135.2 126.5 106.2 94.1 94.8 94.3 110.0 134.9 130.1 116.0 136.6 128.8 106.3 94.2 95.0 94.6 110.2 Prices7 21 Consumer (1982-84= 100) 22 Producer finished goods (1982=100) 124.0 113.6 130.7 119.2 136.2 121.7 139.3 122.2 139.5 122.4 139.7 123.2 140.2 123.9 140.5 123.7 140.9 123.5 141.3 123.3 141.8 124.3 142.0 123.9 1. A major revision of the industrial production index and the capacity utilization rates was released in April 1990. See "Industrial Production: 1989 Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. 2. Ratio of index of production to index of capacity. Based on data from the Federal Reserve, DRI McGraw-Hill, U.S. Department of Commerce, and other sources. 3. Index of dollar value of total construction contracts, including residential, nonresidential, and heavy engineering, from McGraw-Hill Information Systems Co., F.W. Dodge Division. 4. Based on data from U.S. Department of Labor, Employment and Earnings. Series covers employees only, excluding personnel in the armed forces. 5. Based on data from U.S. Department of Commerce, Survey of Current Business. n.a. n.a. 129.3 6. Based on data from U.S. Bureau of the Census, Survey of Current Business. 7. Based on data not seasonally adjusted. Seasonally adjusted data for changes in the price indexes can be obtained from the Bureau of Labor Statistics, U.S. Department of Labor, Monthly Labor Review. NOTE. Basic data (not indexes) for series mentioned in notes 4, 5,and 6, and indexes for series mentioned in notes 3 and 7 can also be found in the Survey of Current Business. Figures for industrial production for the latest month are preliminary, and many figures for the three months preceding the latest month have been revised. See "Recent Developments in Industrial Capacity and Utilization," Federal Reserve Bulletin, vol. 76 ( J u n e 1990), p p . 411-35. Selected Measures 2.11 A45 LABOR FORCE, EMPLOYMENT, A N D UNEMPLOYMENT Thousands of persons; monthly data seasonally adjusted except as noted 1992 Category 1989 1990 1991 Apr. May June July Aug. Sept. r Oct/ Nov. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 188,601 190,216 191,883 193,168 193,295 193,431 193,588 193,749 193,893 194,051 194,210 2 Labor force (including Armed Forces) 1 3 Civilian labor force Employment 4 Nonagncultural industries 5 Agriculture Unemployment 6 Number 7 Rate (percent of civilian labor force) 8 Not in labor force 126,077 123,869 126,954 124,787 127,421 125,303 128,830 126,830 129,148 127,160 129,525 127,549 129,498 127,532 129,3% 127,437 129,219 127,273 128,879 126,959 129,132 127,238 114,142 3,199 114,728 3,186 114,644 3,233 114,465 3,209 114,478 3,178 114,322 3,252 114,568 3,204 114,519 3,218 114,459 3,242 114,465 3,160 114,834 3,211 6,528 5.3 62,524 6,874 5.5 63,262 8,426 6.7 64,462 9,155 7.2 64,338 9,504 7.5 64,147 9,975 7.8 63,906 9,760 7.7 64,090 9,700 7.6 64,353 9,572 7.5 64,674 9,334 7.4 65,172 9,193 7.2 65,078 108,329 109,872 108,310 108,377 108,496 108,423 108,594 108,485 108,497 108,531 108,636 19,442 693 5,187 5,644 25,770 6,695 27,120 17,779 19,117 710 5,133 5,808 25,877 6,729 28,130 18,304 18,455 691 4,685 5,772 25,328 6,678 28,323 18,380 18,279 646 4,605 5,746 25,170 6,682 28,707 18,542 18,275 641 4,632 5,745 25,143 6,681 28,833 18,546 18,236 634 4,600 5,745 25,144 6,672 28,854 18,538 18,242 633 4,584 5,742 25,156 6,660 28,971 18,606 18,145 626 4,591 5,729 25,070 6,661 28,981 18,682 18,102 620 4,574 5,738 25,079 6,669 29,065 18,650 18,037 622 4,598 5,730 25,104 6,680 29,142 18,618 18,072 622 4,587 5,735 25,060 6,676 29,206 18,678 ESTABLISHMENT SURVEY DATA 9 Nonagncultural payroll employment3 10 11 12 13 14 15 16 17 Manufacturing Mining Contract construction Transportation and public utilities Trade Finance Service Government 1. Persons sixteen years of age and older. Monthly figures are based on sample data collected during the calendar week that contains the twelfth day; annual data are averages of monthly figures. By definition, seasonality does not exist in population figures. 2. Includes self-employed, unpaid family, and domestic service workers. 3. Includes all full- and part-time employees who worked during, or received pay for, the pay period that includes the twelfth day of the month; excludes proprietors, self-employed persons, household and unpaid family workers, and members of the armed forces. Data are adjusted to the March 1984 benchmark, and only seasonally adjusted data are available at this time. SOURCE. Based on data from U.S. Department of Labor, Employment and Earnings. A46 2.12 Domestic Nonfinancial Statistics • February 1993 OUTPUT, CAPACITY, A N D CAPACITY UTILIZATION 1 Seasonally adjusted 1991 Q4 1992 Ql Q2 1991 Q3r Output (1987=100) Q4 1992 Ql Q2 1991 Q4 Q3 Capacity (percent of 1987 output) 1992 Ql Q2 Q3 r Capacity utilization rate (percent) 1 Total industry 107.9 107.1 108.5 109.1 136.2 137.0 137.7 138.4 79.3 78.2 78.8 78.8 2 Manufacturing 108.6 108.0 109.5 110.0 138.9 139.7 140.6 141.4 78.2 77.3 77.9 77.8 3 4 Primary processing Advanced processing 104.1 110.7 104.0 109.9 105.4 111.4 106.4 111.7 128.8 143.5 129.3 144.6 129.6 145.6 129.9 146.7 80.8 77.1 80.5 76.0 81.3 76.5 81.9 76.2 5 6 Durable goods Lumber and products Primary metals Iron and steel Nonferrous Nonelectrical machinery Electrical machinery Motor vehicles and parts Aerospace and miscellaneous transportation equipment 107.7 95.1 102.5 103.2 101.4 122.7 110.4 97.0 106.6 98.5 102.2 103.8 100.0 122.1 110.5 91.7 108.4 96.7 101.7 101.6 101.7 125.7 111.8 100.5 108.8 98.3 104.0 104.6 103.1 128.8 112.5 98.1 142.8 125.7 129.3 134.5 121.9 162.8 146.6 135.6 143.7 125.9 129.1 134.1 122.1 164.3 147.9 136.2 144.4 126.1 128.3 132.7 122.2 165.9 149.1 136.7 145.2 126.3 127.5 131.2 122.3 167.4 150.4 137.2 75.4 75.7 79.2 76.7 83.2 75.4 75.3 71.5 74.2 78.2 79.2 77.4 81.9 74.3 74.7 67.3 75.0 76.7 79.2 76.6 83.3 75.8 75.0 73.5 74.9 77.9 81.5 79.7 84.3 76.9 74.8 71.5 102.8 99.3 96.8 94.9 139.6 140.4 140.9 141.5 73.7 70.8 68.7 67.1 Nondurable goods Textile mill products Paper and products Chemicals and products Plastics materials Petroleum products 109.7 104.1 107.4 113.0 126.2 107.1 109.8 104.3 105.8 113.6 124.4 107.7 110.9 106.2 106.7 116.8 129.7 109.2 111.5 106.4 108.2 117.9 132.4 106.9 133.8 118.3 118.7 142.3 146.1 121.4 134.8 118.8 119.3 143.4 148.7 121.4 135.6 119.2 119.9 144.3 150.5 121.5 136.5 119.7 120.5 145.1 152.2 121.6 82.0 88.0 90.5 79.4 86.4 88.2 81.5 87.9 88.7 79.2 83.7 88.7 81.7 89.0 89.0 81.0 86.2 89.9 81.7 88.9 89.8 81.2 87.0 87.9 99.7 109.4 111.6 97.9 107.0 109.7 98.9 107.4 110.3 99.4 109.0 112.7 114.7 129.2 125.2 114.7 129.5 125.6 114.7 129.8 126.0 114.8 130.1 126.4 87.0 84.7 89.1 85.3 82.6 87.3 86.2 82.7 87.6 86.6 83.8 89.2 Latest cycle 3 1991 July Aug. r Sept. r Oct/ NOV.P 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Mining 21 Utilities 22 Electric Previous cycle 2 High Low High Low Nov. 1992 Apr. May June Capacity utilization rate (percent) 1 Total industry 89.2 72.6 87.3 71.8 79.3 78.7 79.1 78.6 79.1 78.8 78.5 78.7 78.9 2 Manufacturing 88.9 70.8 87.3 70.0 78.2 77.7 78.2 77.8 78.1 77.9 77.4 77.7 77.9 3 4 Primary processing Advanced processing 92.2 87.5 68.9 72.0 89.7 86.3 66.8 71.4 80.8 77.1 81.1 76.3 81.5 76.8 81.4 76.3 82.7 76.2 81.7 76.3 81.3 75.9 81.6 76.2 82.4 76.2 5 6 Durable goods Lumber and products Primary metals Iron and steel Nonferrous Nonelectrical machinery Electrical machinery Motor vehicles and parts . . . . Aerospace and miscellaneous transportation equipment. 88.8 90.1 100.6 105.8 92.9 96.4 87.8 93.4 68.5 62.2 66.2 66.6 61.3 74.5 63.8 51.1 86.9 87.6 102.4 110.4 90.5 92.1 89.4 93.0 65.0 60.9 46.8 38.3 62.2 64.9 71.1 44.5 75.5 76.7 80.0 78.5 82.5 75.4 75.5 70.7 74.6 77.1 78.5 75.8 82.6 75.1 74.7 72.2 75.5 77.2 79.5 77.0 83.3 76.4 75.3 75.1 75.0 75.6 79.7 77.0 83.9 76.0 75.0 73.3 75.2 79.1 82.6 80.8 85.4 76.6 75.1 71.3 75.2 78.3 81.8 79.5 85.2 77.3 75.1 72.5 74.4 76.2 80.2 78.8 82.3 76.9 74.2 70.7 75.0 77.7 82.4 82.2 82.8 77.4 74.4 73.7 75.2 80.0 82.7 82.9 82.3 78.0 74.5 74.1 77.0 66.6 81.1 66.9 73.9 69.2 68.7 68.2 67.7 67.0 66.4 66.1 65.0 Nondurable goods Textile mill products Paper and products Chemicals and products Plastics materials Petroleum products 87.9 92.0 96.9 87.9 102.0 96.7 71.8 60.4 69.0 69.9 50.6 81.1 87.0 91.7 94.2 85.1 90.9 89.5 76.9 73.8 82.0 70.1 63.4 68.2 81.9 88.2 89.4 79.4 87.2 87.9 81.8 89.3 89.3 80.4 85.4 90.8 81.8 89.6 88.3 81.1 87.3 89.3 81.6 88.2 89.3 81.3 85.9 89.6 82.0 89.6 91.1 81.5 89.8 89.8 81.6 88.7 88.2 81.1 86 0 85.8 81.6 88.4 90.0 81.2 85 1 88.3 81.4 86.7 87.9 81.3 81.7 87.9 89.0 81.9 91.3 91.5 94.4 95.6 99.0 88.4 82.5 82.7 96.6 88.3 88.3 80.6 76.2 78.7 86.8 85.9 90.0 86.3 83.4 88.2 86.9 82.7 87.5 85.4 82.1 87.0 87.6 84.1 89.5 86.1 83.6 89.2 86.1 83.8 88.7 86.2 83.3 88.3 86.7 82.8 87.6 7 8 Y 10 11 12 13 14 15 16 17 IK 19 20 21 Utilities 22 Electric 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For ordering address, see inside front cover. For a detailed description of the series, see "Recent Developments in Industrial Capacity and Utilization," Federal Reserve Bulletin, vol. 76 (June 1990), pp. 411-35. 2. Monthly high, 1973; monthly low, 1975. 3. Monthly highs, 1978 through 1980; monthly lows, 1982. Selected Measures 2.13 A47 Indexes and Gross Value 1 INDUSTRIAL PRODUCTION Monthly data seasonally adjusted 1987 Group portion 1991 1992 1991 avg. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug/ Sept/ Oct/ Nov." Index (1987 = 100) MAJOR MARKETS 100.0 107.1 108.1 107.4 106.6 107.2 107.6 108.1 108.9 108.5 109.4 109.1 108.8 109.3 109.7 2 Products 3 Final products 4 Consumer goods, total 5 Durable consumer goods 6 Automotive products 7 Autos and trucks Autos, consumer 8 9 Trucks, consumer 10 Auto parts and allied g o o d s . . . 11 Other Appliances, A/C, and TV 12 13 Carpeting and furniture 14 Miscellaneous home goods . . . 15 Nondurable consumer goods 16 Foods and tobacco 17 Clothing 18 Chemical products 19 Paper products 20 Energy 21 Fuels Residential utilities 22 60.8 46.0 26.0 5.6 2.5 1.5 .9 .6 1.0 3.1 .8 .9 1.4 20.4 9.1 2.6 3.5 2.5 2.7 .7 2.0 108.1 109.6 107.5 102.3 97.8 90.2 84.6 99.6 109.3 105.8 99.5 99.4 113.4 109.0 106.7 93.5 115.8 123.6 108.5 103.5 110.4 109.0 110.6 110.0 106.0 103.6 99.0 89.8 114.5 110.5 108.0 102.3 101.6 115.2 111.1 108.1 96.5 117.9 126.4 112.0 103.6 115.1 108.4 109.9 109.1 104.6 101.3 96.7 88.2 111.0 108.2 107.2 98.9 101.5 115.5 110.3 107.0 96.2 118.0 126.8 109.3 104.3 111.2 107.5 108.7 108.1 101.3 94.2 84.3 79.1 93.0 109.1 106.9 99.6 101.1 114.7 110.0 107.3 95.0 118.1 126.8 106.8 103.8 108.0 108.1 109.4 108.8 105.3 101.6 94.3 84.8 110.2 112.6 108.3 102.9 102.4 115.0 109.8 107.4 95.2 118.3 124.7 106.4 103.5 107.5 108.5 109.8 109.3 106.2 103.6 95.7 81.9 118.8 115.5 108.3 103.5 102.5 114.7 110.2 107.8 95.1 119.4 124.6 107.0 103.7 108.2 109.0 110.6 110.1 107.9 106.5 102.5 93.1 118.3 112.5 109.1 103.4 104.4 115.2 110.7 107.6 95.3 120.8 125.1 108.9 105.1 110.3 109.7 111.4 110.8 111.1 110.6 107.8 98.6 123.3 114.8 111.5 107.4 105.9 117.3 110.7 107.7 96.4 121.4 124.3 107.2 104.0 108.4 109.0 110.5 109.6 109.2 108.0 104.0 97.6 114.8 114.0 110.2 106.2 103.2 116.9 109.7 107.2 95.5 121.6 121.7 104.8 104.4 105.0 109.6 111.0 110.4 108.6 106.6 100.5 92.3 114.3 115.7 110.3 102.3 103.8 118.8 110.8 108.6 96.8 121.5 121.9 107.4 105.3 108.2 109.8 111.5 110.8 109.2 106.8 100.6 87.2 123.1 116.2 111.1 110.6 103.6 116.1 111.2 110.1 95.0 122.0 121.8 106.2 99.0 108.9 109.3 111.0 110.3 106.9 104.5 98.2 88.1 115.1 114.1 108.7 108.3 99.9 114.6 111.3 108.7 95.4 123.8 124.3 106.3 103.5 107.3 110.1 111.9 111.0 108.6 108.9 105.9 88.5 135.1 113.4 108.3 103.8 100.9 115.5 111.7 109.4 94.2 124.8 124.1 107.2 108.4 106.8 110.4 112.2 111.3 108.9 109.2 107.2 89.4 137.1 112.1 108.7 103.5 102.2 115.8 112.0 109.6 94.9 126.2 123.5 106.8 107.9 106.4 23 24 25 26 27 28 29 30 31 32 33 Equipment Business equipment Information processing and related .. Office and computing Industrial Transit Autos and trucks Other Defense and space equipment Oil and gas well drilling Manufactured homes 20.0 13.9 5.6 1.9 4.0 2.5 1.2 1.9 5.4 .6 .2 112.2 121.5 131.5 155.5 108.0 126.8 88.6 113.6 91.1 93.3 85.5 111.4 121.8 133.4 157.8 104.2 130.5 96.5 113.8 88.8 78.1 87.0 110.9 121.4 134.0 159.1 102.3 129.5 96.1 114.1 88.1 75.8 87.9 109.4 119.9 134.1 160.6 100.7 124.2 84.9 113.1 86.7 71.8 98.4 110.2 121.0 134.6 162.4 101.3 129.2 94.7 112.2 86.2 73.9 99.7 110.4 121.5 136.0 164.9 101.3 128.9 95.0 112.2 85.6 76.2 98.7 111.3 123.0 137.9 168.2 101.7 131.7 101.3 113.2 84.7 79.2 100.7 112.3 124.5 139.2 170.5 103.4 133.3 105.6 115.0 84.2 79.2 100.3 111.6 124.1 140.4 174.0 102.9 131.8 101.7 111.5 83.6 74.6 97.1 111.8 124.4 141.9 178.0 103.4 128.7 98.1 112.2 82.7 78.6 112.0 112.5 125.9 143.5 182.0 102.7 132.6 101.3 114.4 81.8 75.0 106.1 111.9 125.3 143.4 184.0 101.9 130.3 99.1 115.6 81.0 74.4 111.2 112.9 126.7 145.8 187.0 102.2 132.2 105.6 115.5 80.5 80.2 119.9 113.4 127.4 147.1 190.0 102.9 131.5 107.7 116.4 79.7 85.2 123.5 34 35 36 Intermediate products, total Construction supplies Business supplies 14.7 6.0 8.7 103.4 96.0 108.4 103.9 95.9 109.4 103.8 95.0 110.0 103.9 95.5 109.9 104.0 96.0 109.6 104.4 96.7 109.7 103.9 96.5 109.0 104.4 97.8 109.0 104.4 97.2 109.4 105.1 98.6 109.7 104.4 98.5 108.5 104.0 96.8 109.0 104.5 97.8 109.1 104.8 98.4 109.2 37 Materials 38 Durable goods materials Durable consumer parts 39 40 Equipment parts 41 Other 42 Basic metal materials 43 Nondurable goods materials 44 Textile materials 45 Pulp and paper materials 46 Chemical materials 47 Other 48 Energy materials 49 Primary energy 50 Converted fuel materials 39.2 19.4 4.2 7.3 7.9 2.8 9.0 1.2 1.9 3.8 2.1 106.6 108.6 100.5 113.7 108.3 108.1 107.7 99.9 108.6 108.3 110.1 105.8 108.1 97.0 114.2 108.4 108.1 107.1 98.5 109.6 107.0 109.7 105.2 107.0 95.3 114.1 106.7 105.1 107.3 98.9 107.4 107.6 111.2 105.8 108.1 97.1 115.2 107.5 107.3 107.1 101.5 106.8 106.6 111.2 106.1 108.3 97.9 115.1 107.5 106.3 108.9 102.0 107.8 109.3 112.7 106.8 108.7 99.3 114.7 108.1 106.3 109.4 103.2 109.2 109.9 112.2 102.2 100.9 104.5 100.4 100.4 100.5 100.1 101.3 100.4 100.5 100.5 100.2 100.6 100.4 98.2 103.8 99.8 104.1 107.7 110.4 102.5 116.2 109.2 108.3 109.7 102.9 107.8 111.2 112.4 101.3 99.7 104.3 107.6 110.2 102.9 116.2 108.7 107.7 110.4 102.3 110.8 110.9 113.4 7.2 3.7 105.5 107.1 96.4 114.4 106.0 106.0 105.9 97.0 106.9 106.1 109.7 102.3 102.4 102.0 99.6 102.6 109.0 111.2 101.8 117.5 110.2 111.5 111.7 103.9 111.8 113.4 112.8 102.9 102.3 104.1 108.1 111.1 103.9 117.0 109.5 110.9 110.3 102.9 108.9 111.9 112.6 100.9 101.4 100.0 108.0 110.1 102.2 116.3 108.5 108.8 110.5 103.9 112.7 110.9 111.5 102.2 100.5 105.4 108.1 110.9 102.7 117.1 109.6 110.0 110.1 102.5 109.6 111.9 111.6 101.3 99.6 104.7 108.6 111.3 103.1 117.3 110.1 110.1 111.8 105.4 112.0 112.5 114.0 101.1 99.8 103.7 97.3 95.3 107.6 107.9 108.3 108.7 107.7 108.0 107.3 107.6 107.6 107.8 107.9 108.2 108.3 108.6 109.0 109.2 108.6 108.8 109.6 109.9 109.3 109.6 109.1 109.4 109.4 109.7 109.8 110.1 1 Total index 10.9 100.6 SPECIAL AGGREGATES 51 Total excluding autos and trucks 52 Total excluding motor vehicles and parts . . . 53 Total excluding office and computing machines 54 Consumer goods excluding autos and trucks 55 Consumer goods excluding energy 56 Business equipment excluding autos and trucks 57 Business equipment excluding office and computing equipment 58 Materials excluding energy 97.5 105.8 106.8 106.1 105.3 105.8 106.1 106.6 107.4 106.8 107.6 107.3 106.9 107.3 107.7 24.5 23.3 108.6 107.4 110.7 109.6 108.3 109.7 109.1 110.2 109.6 110.6 110.3 110.9 111.2 109.9 110.1 111.0 110.7 111.4 111.3 111.1 109.8 109.8 109.1 111.3 111.5 111.6 111.9 12.7 124.8 124.3 123.8 123.3 123.6 124.1 125.2 126.4 126.3 127.0 128.3 127.9 128.8 129.3 12.0 28.4 116.0 106.7 116.0 108.3 115.3 107.8 113.3 107.1 114.3 107.8 114.5 108.5 115.7 108.9 117.1 110.2 116.1 110.3 115.8 111.3 116.8 110.8 115.9 110.2 116.9 110.7 117.3 111.4 110.8 A48 Domestic Nonfinancial Statistics • February 1993 2.13—Continued „ roup SIC code 1987 proportion 1991 1992 1991 avg. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. r Sept. r Oct. r Nov. p Index (1987 = 100) MAJOR INDUSTRIES 1 Total index 100.0 107.1 108.1 107.4 106.6 107.2 107.6 108.1 108.9 108.S 109.4 109.1 108.8 109.3 109.7 84.4 26.7 57.7 107.4 102.4 109.8 108.6 104.1 110.7 108.1 103.5 110.3 107.4 103.6 109.2 108.1 103.9 110.0 108.5 104.5 110.3 109.0 105.0 110.8 109.9 105.6 111.9 109.6 105.6 111.4 110.2 107.3 111.6 110.1 106.2 112.0 109.7 105.7 111.5 110.3 106.2 112.2 110.8 107.3 112.5 Durable goods Lumber and products . . . "24 Furniture and fixtures . . . 25 Clay, glass, and stone products 32 Primary metals 33 Iron and steel 331,2 Raw steel Nonferrous 333-6,9 Fabricated metal products 34 Nonelectrical machinery. 35 Office and computing machines 357 Electrical machinery 36 Transportation equipment 37 Motor vehicles and parts 371 Autos and light trucks Aerospace and miscellaneous transportation equipment.. 372 - 6 , 9 Instruments 38 Miscellaneous 39 47.3 2.0 1.4 107.1 94.2 99.1 107.8 96.4 99.9 107.1 95.2 100.6 105.8 97.4 98.7 107.0 98.8 98.1 107.0 99.2 98.6 107.6 97.2 101.1 109.1 97.4 103.3 108.5 95.4 100.3 109.0 99.8 101.0 109.2 98.9 101.7 108.2 96.3 100.8 109.2 98.2 101.4 109.7 101.2 102.3 2.5 3.3 1.9 .1 1.4 94.9 99.5 98.0 97.3 101.5 92.8 103.5 105.6 99.1 100.5 93.0 101.3 101.7 97.6 100.8 92.8 102.5 105.0 103.3 98.9 94.6 102.7 103.7 102.7 101.2 95.0 101.4 102.5 98.8 99.9 95.6 100.9 100.9 99.9 100.9 96.7 102.0 102.2 98.5 101.8 96.6 102.1 101.8 101.5 102.5 97.1 105.6 106.4 105.3 104.4 96.4 104.3 104.4 101.9 104.2 96.0 102.0 103.0 99.8 100.6 96.8 104.7 107.1 101.7 101.3 96.9 104.8 107.6 103.4 100.8 5.4 8.6 100.4 123.5 101.8 122.8 101.2 121.9 99.7 121.4 100.5 121.9 100.0 122.9 100.6 124.1 102.2 126.7 102.2 126.4 102.6 127.8 102.5 129.3 101.4 129.1 102.0 130.4 102.9 131.7 2.5 8.6 155.5 110.1 157.8 110.7 159.1 110.6 160.5 110.0 162.4 110.7 164.9 110.9 168.2 111.0 170.5 112.3 174.0 112.2 178.0 112.6 182.0 113.0 184.0 111.9 187.0 112.5 190.0 113.0 Nondurable goods Foods Tobacco products Textile null products Apparel products Paper and products ., Printing and publishing . . Chemicals and products . Petroleum products Rubber and plastic products Leather and products . . . 2 Manufacturing 3 Primary processing 4 Advanced processing , 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Mining 35 Metal 36 Coal 37 Oil and gas extraction 38 Stone and earth minerals .. 39 Utilities 40 Electric 41 Gas 9.8 98.6 99.7 98.0 93.8 96.8 96.5 98.0 99.6 98.2 96.7 97.0 95.6 97.4 96.9 4.7 90.4 95.9 94.6 87.1 93.8 94.2 98.5 102.7 100.4 97.7 99.4 97.2 101.4 102.1 2.3 89.4 97.6 95.5 83.5 92.9 93.7 101.1 106.5 103.0 99.3 98.6 96.7 103.3 104.6 5.1 3.3 1.2 106.0 118.2 119.3 103.1 118.7 120.7 101.2 119.0 121.0 99.8 118.3 121.2 99.6 118.6 120.0 98.6 118.6 120.0 97.4 119.0 118.9 96.8 119.8 118.4 96.3 118.5 117.8 95.7 118.5 120.4 94.9 118.2 118.2 94.1 117.9 118.6 93.8 117.8 119.1 92.3 117.3 121.2 20 21 22 23 26 27 28 29 37.2 8.8 1.0 1.8 2.4 3.6 6.4 8.6 1.3 107.9 108.6 99.7 100.5 96.2 105.1 112.3 110.9 107.5 109.6 110.1 97.7 104.4 98.8 106.1 114.2 113.0 106.7 109.5 109.6 94.7 102.5 99.0 107.0 114.5 112.6 108.6 109.5 109.2 98.8 103.1 97.5 107.1 114.8 112.7 106.6 109.6 109.6 99.4 104.7 97.7 104.6 114.4 113.4 106.9 110.4 110.2 101.3 105.3 97.8 105.8 113.8 114.8 109.7 110.7 109.6 101.0 106.3 98.0 107.0 113.7 115.8 110.3 110.9 109.3 102.5 106.8 99.0 105.8 113.4 117.0 108.5 111.0 109.0 103.6 105.3 98.1 107.3 113.0 117.5 108.9 111.7 109.8 106.6 107.1 99.4 109.6 112.3 118.0 109.1 111.3 110.6 115.9 106.1 97.6 106.3 111.4 117.6 104.3 111.6 110.0 108.7 105.9 97.6 108.6 113.1 118.1 107.4 111.6 110.9 107.4 104.1 97.5 106.2 112.6 118.4 111.1 112.2 111.2 106.8 105.7 97.9 107.8 111.6 119.6 111.4 30 31 3.0 .3 110.0 88.1 112.6 84.3 113.0 83.2 113.2 83.0 114.0 81.4 115.4 82.9 116.5 84.1 117.1 86.2 117.3 86.2 118.5 87.1 119.0 84.8 117.6 85.8 118.6 86.1 119.7 88.3 "10 11,12 13 14 7.9 .3 1.2 5.7 .7 101.1 150.2 109.2 95.8 108.1 99.6 151.5 108.4 94.1 105.8 98.8 154.0 107.6 93.0 106.4 97.8 144.2 107.3 92.4 104.8 98.4 152.9 107.9 92.7 103.5 97.5 155.8 103.0 91.9 107.4 99.1 154.2 104.0 94.2 105.9 99.7 166.4 107.6 93.4 108.0 98.0 154.0 98.6 93.9 105.6 100.6 163.7 112.0 94.0 106.2 98.8 165.6 107.5 92.4 106.4 98.8 164.6 103.7 93.3 105.5 98.9 165.2 102.8 93.7 105.1 99.5 165.8 105.0 94.0 105.4 49i,3PT 492,3PT 7.6 6.0 1.6 109.2 112.8 96.0 111.0 112.7 104.7 107.9 109.9 100.5 106.8 109.3 97.5 106.4 109.0 96.9 107.7 110.7 96.7 108.2 111.0 97.7 107.3 110.2 96.6 106.7 109.7 95.3 109.3 113.0 95.4 108.8 112.7 94.1 109.1 112.3 97.4 108.6 111.8 96.6 107.9 111.0 96.5 79.8 108.4 109.3 108.9 108.6 108.9 109.3 109.6 110.3 110.1 110.9 110.7 110.4 110.8 111.3 82.0 106.0 107.1 106.6 105.8 106.5 106.8 107.2 108.1 107.6 108.2 108.0 107.4 108.0 108.4 SPECIAL AGGREGATES 42 Manufacturing excluding motor vehicles and parts 43 Manufacturing excluding office and computing machines Gross value (billions of 1982 dollars, annual rates) MAJOR MARKETS 44 Products, total 1,734.8 1,880.0 1,904.9 1,888.9 1,869.5 1,889.7 1,902.8 1,918.7 1,935.5 1,920.1 1,936.2 1,935.9 1,934.0 1,959.8 1,971.1 45 Final 46 Consumer goods 47 Equipment 48 Intermediate 1,350.9 1,481.8 1,504.1 1,488.0 1,468.7 1,490.8 1,501.5 1,518.2 1,532.1 1,519.1 1,530.4 1,532.8 1,532.7 1,556.8 1,565.8 833.4 879.8 902.2 894.5 877.6 890.2 896.2 905.6 912.4 901.3 909.3 905.3 905.4 921.4 925.2 517.5 602.0 593.5 591.1 601.8 600.6 605.3 612.7 619.7 617.8 621.0 627.5 627.3 635.4 640.5 384.0 398.2 401.0 400.8 400.7 398.9 401.2 400.5 403.4 401.1 405.8 403.1 401.3 403.0 405.4 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For ordering address, see inside front cover. A major revision of the industrial production index and the capacity utilization rates was released in April 1990. See "Industrial Production: 1989 Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. 2. Standard industrial classification, Selected Measures 2.14 A49 HOUSING A N D CONSTRUCTION Monthly figures at seasonally adjusted annual rates except as noted 1992 1989 Item 1990 1991 Jan. Feb. Mar. Apr. May June July Sept. Oct. 1,076 877 199 1,233 1,042 191 633 480 153 l,144 r 955r 189" 198 1,125 913 212 l,222 r l,051 r I71 r 638r 486r 152 1,121 936 185 219 1,139 959 180 1,224 1,086 138 642 493 149 1,161 980 181 226 Aug. Private residential real estate activity (thousands of units except as noted) N E W UNITS 1,339 932 407 1,376 1,003 373 850 535 315 1,423 1,026 396 198 1,111 794 317 1,193 895 298 711 449 262 1,308 966 342 188 949 754 195 1,014 840 174 606 434 173 1,091 838 253 171 1,106 913 193 1,180 989 191 640 466 174 1,043 838 205 192 1,146 946 200 1,257 1,109 148 629 464 165 1,097 908 189 197 1,094 907 187 1,340 1,068 272 657 482 175 1,127 975 152 197 1,058 873 185 1,086 933 153 655 484 171 1,067 889 178 199 1,054 879 175 1,196 1,019 177 653 484 169 1,204 1,011 193 189 1,032 872 160 1,147 999 148 643 483 160 1,184 982 202 194 1,080 879 201 1,100 956 144 628 476 152 1,229 1,019 210 211 650 365 535 321 507 283 667 281 627 269 555 277 546 274 554 272 583 272 616 271 625 270 669 268 600 267 120.4 148.3 122.3 149.0 120.0 147.0 120.0 144.2 117.2 144.8 120.0 144.8 120.0 145.0 113.0 146.0 124.5 146.6 118.0 137.7 123.0 144.6 119.0 142.3 125.0 152.6 18 Number sold 3,346 3,211 3,219 3,220 3,490 3,510 3,490 3,460 3,350 3,450 3,310 3,300 3,640 Price of units sold (thousands of dollarsr 19 Median 20 Average 92.9 118.0 95.2 118.3 99.7 127.4 102.4 130.5 102.8 128.8 104.0 130.2 103.3 130.6 102.5 130.6 105.1 133.7 102.7 132.2 104.6 132.2 103.4 131.0 103.4 129.4 1 2 3 4 5 6 7 8 9 10 11 12 13 Permits authorized One-family Two-or-more-family Started One-family Two-or-more-family Under construction at end of period 1 .. One-family Two-or-more-family Completed One-family Two-or-more-family Mobile homes shipped Merchant builder activity in one-family units 14 Number sold 15 Number for sale at end of period ... Price of units Sj)ld (thousands 16 Median 17 Average EXISTING UNITS ( o n e - f a m i l y ) Value of new construction (millions of dollars) 3 CONSTRUCTION 21 Total put in place 443,401 442,066 400,955 407,121 411,767 421,512 427,585 427,980 426,730 427,670 417,554 424,983 429,295 22 Private 23 Residential 24 Nonresidential, total 25 Industrial buildings 26 Commercial buildings Other buildings 27 28 Public utilities and other 345,327 196,551 148,776 20,412 65,496 19,683 43,185 334,153 182,856 151,297 23,849 62,866 21,591 42,991 290,707 157,837 132,870 22,281 48,482 20,797 41,310 292,540 169,548 122,992 21,258 41,196 19,751 40,787 294,758 169,772 124,986 21,651 41,591 20,630 41,114 301,142 172,660 128,482 23,721 42,108 21,479 41,174 309,832 182,644 127,188 21,335 40,712 21,409 43,732 306,999 182,892 124,107 21,008 39,643 21,993 41,463 312,182 184,630 127,552 20,285 43,310 21,991 41,966 307,880 182,871 125,009 20,513 39,847 22,290 42,359 300,295 181,340 118,955 17,845 37,057 21,521 42,532 306,091 183,192 122,899 18,947 39,271 22,038 42,643 309,856 187,352 122,504 18,258 39,338 22,197 42,711 98,071 3,520 28,837 5,009 60,705 107,909 2,664 31,154 4,607 69,484 110,247 1,837 29,918 4,958 73,534 114,581 2,039 30,221 5,480 76,841 117,009 2,206 32,744 5,283 76,776 120,370 2,548 30,895 6,197 80,730 117,753 2,329 31,447 5,818 78,159 120,981 2,668 32,633 5,767 79,913 114,548 2,503 31,496 5,889 74,660 119,790 2,275 32,605 5,829 79,081 117,259 2,153 33,292 5,302 76,512 118,892 2,477 34,313 6,350 75,752 119,439 2,071 31,931 7,611 77,826 29 Public 30 Military Highway 31 Conservation and development... 32 33 Other 1. Not at annual rates. 2. Not seasonally adjusted. 3. Recent data on value of new construction may not be strictly comparable with data for previous periods because of changes by the Census Bureau in its estimating techniques. For a description of these changes, see Construction Reports (C-30-76-5), issued by the Census Bureau in July 1976. SOURCE. 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 17,000 jurisdictions beginning in 1984. A50 2.15 Domestic Nonfinancial Statistics • February 1993 CONSUMER A N D PRODUCER PRICES Percentage changes based on seasonally adjusted data except as noted Change from 12 months earlier Item Change from 3 months earlier (annual rate) 1991 1991 Nov. Change from 1 month earlier Index level, Nov. 19921 19921 1992 1992 Nov. Dec. Mar. June Sept. July Aug. Sept. Oct. Nov. CONSUMER PRICES 2 (1982-84= 100) 1 All items 2 Food i Energy items 4 All items less food and energy 5 Commodities 6 Services 3.0 3.0 3.2 3.5 2.6 2.6 .1 .3 .2 .4 .2 142.0 1.6 -8.2 4.5 4.4 4.5 1.5 2.7 3.4 2.5 3.9 2.7 3.6 3.1 .6 4.3 1.5 -6.9 4.8 5.3 4.8 -1.2 12.5 2.8 2.1 2.9 4.7 .4 2.5 2.1 2.6 -.1 .3 .2 .2 .3 .9 -.2 .2 .2 .3 .4 .0 .2 .2 .1 .0 .5 .3 .6 .0 .8 .3 .1 .3 138.3 104.5 149.3 134.2 158.0 -.5 -1.6 -12.7 3.4 2.6 1.3 .2 .5 2.1 1.6 1.0 -1.0 -.5 2.4 1.9 1.0 .3 -7.0 3.6 3.5 3.3 -1.0 17.9 2.4 .9 1.6 3.6 -.5 1.2 .9 .0 -.2 — ,6r .2 .1 .7 -,3r -.1 ,2r .3 .4 .8 .2 .0 .1 .1 1.4 -.1 -.2 -.2 -.5 -1.5 .2 .1 123.9 123.3 78.5 138.2 130.0 -3.5 -1.0 1.1 1.0 -1.7 .0 .0 1.7 5.4 1.7 .3 1.0 .2r -.R .R .1 .0 .0 -.2 -.2 .0 115.4 122.2 -6.5 -22.0 -8.3 1.3 2.6 2.8 -4.9 5.3 -5.9 11.8 -26.6 15.0 1.9 51.5 4.8 -6.2 16.4 2.5 -1.8 i.r .9" .6 3.6 -.5 .6 -.5 -1.3 -.6 .6 -.9 102.8 83.3 126.8 .5 PRODUCER PRICES (1982=100) 7 Finished goods 8 Consumer foods 9 Consumer energy 10 Other consumer goods 11 Capital equipment Intermediate materials 12 Excluding foods and feeds 14 Excluding energy Crude materials 14 Foods 15 Energy 16 Other 1. Not seasonally adjusted. 2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence measure of homeownership. .R .R -.4 ,2r SOURCE. Bureau of Labor Statistics. Selected Measures 2.16 A51 GROSS DOMESTIC PRODUCT A N D INCOME Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1992 1991 Account 1989 1990 1991 Q3 Q4 Ql Q2 Q3r GROSS DOMESTIC PRODUCT 5,250.8 5,522.2 5,677.5 5,713.1 5,753.3 5,840.2 5,902.2 5,982.5 3,523.1 459.4 1,149.5 1,914.2 3,748.4 464.3 1,224.5 2,059.7 3,887.7 446.1 1,251.5 2,190.1 3,914.2 453.0 1,255.3 2,205.9 3,942.9 450.4 1,251.4 2,241.1 4,022.8 469.4 1,274.1 2,279.3 4,057.1 470.6 1,277.5 2,309.0 4,108.1 482.7 1,293.0 2,332.4 832.3 798.9 568.1 193.3 374.8 230.9 799.5 793.2 577.6 201.1 376.5 215.6 721.1 731.3 541.1 180.1 360.9 190.3 732.8 732.6 538.4 175.6 362.8 194.2 736.1 726.9 528.7 169.7 358.9 198.2 722.4 738.2 531.0 170.1 360.8 207.2 773.2 765.1 550.3 170.3 380.0 214.8 786.4 765.3 547.9 164.8 383.0 217.5 33.3 31.8 6.3 3.3 -10.2 -10.3 .2 -1.2 9.2 14.5 -15.8 -13.3 8.1 6.4 21.1 15.8 14 Net exports of goods and services 15 Exports 16 Imports -79.7 508.0 587.7 -68.9 557.0 625.9 -21.8 598.2 620.0 -27.1 602.3 629.5 -16.0 622.9 638.9 -8.1 628.1 636.2 -37.1 625.4 662.5 -34.9 639.5 674.4 17 Government purchases of goods and services 18 Federal 19 State and local 975.2 401.6 573.6 1,043.2 426.4 616.8 1,090.5 447.3 643.2 1,093.3 447.2 646.0 1,090.3 440.8 649.5 1,103.1 445.0 658.0 1,109.1 444.8 664.3 1,122.9 454.1 668.8 5,217.5 2,063.6 891.2 1,172.5 2,642.2 511.7 5,515.9 2,160.1 920.6 1,239.5 2,846.4 509.4 5,687.7 2,192.8 907.6 1,285.1 3,030.3 464.7 5,712.9 2,194.9 910.8 1,284.1 3,053.6 464.4 5,744.2 2,188.4 905.7 1,282.7 3,090.3 465.5 5,855.9 2,233.6 923.6 1,310.0 3,142.2 480.1 5,894.1 2,233.2 932.3 1,300.8 3,173.4 487.6 5,961.4 2,260.1 944.9 1,315.1 3,214.8 486.5 33.3 25.2 8.1 6.3 -.9 7.2 -10.2 -19.3 9.0 .2 -7.0 7.2 9.2 -8.1 17.3 -15.8 -19.3 3.5 8.1 9.5 -1.4 21.1 7.8 13.3 4,838.0 4,877.5 4,821.0 4,831.8 4,838.5 4,873.7 4,892.4 4,939.4 30 Total 4,249.5 4,468.3 4,544.2 4,555.4 4,599.1 4,679.4 4,716.5 4,714.3 31 Compensation of employees 32 Wages and salaries 33 Government and government enterprises 34 Other 35 Supplement to wages and salaries 36 Employer contributions for social insurance 37 Other labor income 3,100.2 2,586.4 478.5 2,107.9 513.8 261.9 251.9 3,291.2 2,742.9 514.8 2,228.0 548.4 277.4 271.0 3,390.8 2,812.2 543.5 2,268.7 578.7 290.4 288.3 3,407.0 2,824.4 544.3 2,280.0 582.6 292.0 290.6 3,433.8 2,845.0 546.4 2,298.6 588.7 293.7 295.0 3,476.3 2,877.6 554.6 2,323.0 598.7 299.4 299.2 3,506.3 2,901.3 561.4 2,339.9 605.0 301.5 303.6 3,529.8 2,919.3 564.0 2,355.3 610.5 302.6 307.9 38 Proprietors' income1 Business and professional1 39 40 Farm1 347.3 307.0 40.2 366.9 325.2 41.7 368.0 332.2 35.8 367.1 337.6 29.5 377.9 340.0 37.9 393.6 353.6 40.1 398.4 359.9 38.5 397.6 366.1 31.5 1 Total 2 3 4 5 By source Personal consumption expenditures Durable goods Nondurable goods Services 6 Gross private domestic investment 7 Fixed investment 8 Nonresidential 9 Structures 10 Producers' durable equipment 11 Residential structures 12 13 Change in business inventories Nonfarm Bx major type of product 20 Final sales, total Goods 21 Durable 22 23 Nondurable 24 Services 25 Structures 26 Change in business inventories 27 Durable goods 28 Nondurable goods MEMO 29 Total GDP in 1987 dollars NATIONAL INCOME 41 Rental income of persons 2 -13.5 -12.3 -10.4 -10.3 -6.6 -4.5 3.3 5.0 42 Corporate profits' Profits before tax 43 44 Inventory valuation adjustment 45 Capital consumption adjustment 362.8 342.9 -17.5 37.4 361.7 355.4 -14.2 20.5 346.3 334.7 3.1 8.4 341.2 336.7 -4.8 9.3 347.1 332.3 .7 14.1 384.0 366.1 -5.4 23.3 388.4 376.8 -15.5 27.0 370.4 350.5 -9.8 29.7 46 Net interest 452.7 460.7 449.5 450.5 446.9 430.0 420.0 411.5 1. With inventory valuation and capital consumption adjustments. 2. With capital consumption adjustment. 3. For after-tax profits, dividends, and the like, see table 1.48. SOURCE. U.S. Department of Commerce, Survey of Current Business. A52 2.17 Domestic Nonfinancial Statistics • February 1993 PERSONAL INCOME A N D SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1992 1991 Account 1989 1990 Q3 Q4 Ql Q2 Q3r PERSONAL INCOME AND SAVING I Total personal income 4,380.3 4,664.2 4,828.3 4,846.2 4,907.2 4,980.5 5,028.9 5,060.2 2 Wage and salary disbursements 3 Commodity-producing industries Manufacturing 4 5 Distributive industries Service industries 6 Government and government enterprises 7 2,586.4 724.2 542.2 607.0 776.8 478.5 2,742.8 745.6 556.1 634.6 847.8 514.8 2,812.2 737.4 556.9 647.4 883.9 543.6 2,824.4 738.8 559.0 651.1 890.2 544.3 2,845.0 741.5 563.9 652.9 904.3 546.4 2,877.6 736.8 559.9 660.9 925.3 554.6 2,901.3 743.1 564.7 662.9 933.9 561.4 2,919.3 741.3 564.2 666.9 947.2 564.0 14 Personal interest income 15 Transfer payments 16 Old-age survivors, disability, and health insurance benefits . . . 251.9 347.3 307.0 40.2 -13.5 126.5 668.2 625.0 325.1 271.0 366.9 325.2 41.7 -12.3 140.3 694.5 685.8 352.0 288.3 368.0 332.2 35.8 -10.4 137.0 700.6 771.1 382.0 290.6 367.1 337.6 29.5 -10.3 135.6 701.8 777.1 384.2 295.0 377.9 340.0 37.9 -6.6 134.3 703.3 799.8 390.6 299.2 393.6 353.6 40.1 -4.5 133.9 684.8 842.7 405.7 303.6 398.4 359.9 38.5 3.3 136.6 675.2 859.7 412.1 307.9 397.6 366.1 31.5 5.0 141.0 666.7 873.9 417.1 17 211.4 224.8 238.4 240.1 241.5 246.8 249.3 251.2 4,380.3 4,664.2 4,828.3 4,846.2 4,907.2 4,980.5 5,028.9 5,060.2 8 Other labor income 9 Proprietors' income 1 10 Business and professional 11 Farm 1 12 Rental income of persons* LESS: Personal contributions for social insurance 18 EQUALS: Personal income 593.3 621.3 618.7 618.6 622.3 619.6 617.1 629.4 20 EQUALS: Disposable personal income 3,787.0 4,042.9 4,209.6 4,227.6 4,284.9 4,360.9 4,411.8 4,430.9 21 LESS: Personal outlays 3,634.9 3,867.3 4,009.9 4,036.6 4,065.5 4,146.3 4,179.5 4,229.9 22 EQUALS: Personal saving 152.1 175.6 199.6 191.0 219.4 214.6 232.3 201.0 19,555.6 13,028.9 14,005.0 19,513.0 13,043.6 14,068.0 19,077.1 12,824.1 13,886.0 19,094.0 12,847.9 13,876.0 19,066.0 12,802.6 13,913.0 19,158.5 12,930.2 14,017.0 19,181.8 12,893.3 14,021.0 19,310.7 12,973.4 13,993.0 4.0 4.3 4.7 4.5 5.1 4.9 5.3 4.5 19 LESS: Personal tax and nontax payments MEMO Per c apita (1987 dollars) 23 Gross domestic product 24 Personal consumption expenditures 25 Disposable personal income 26 Saving rate (percent) GROSS SAVING 741.8 718.0 708.2 679.4 698.2 677.5 682.9 693.7 28 Gross private saving 819.4 854.1 901.5 884.9 934.8 950.1 968.1 986.5 29 Personal saving 30 Undistributed corporate profits 31 Corporate inventory valuation adjustment 152.1 86.9 -17.5 175.6 75.7 -14.2 199.6 75.8 3.1 191.0 69.0 -4.8 219.4 78.3 .7 214.6 104.0 -5.4 232.3 97.7 -15.5 201.0 87.7 -9.8 352.4 228.0 368.3 234.6 383.0 243.1 383.5 241.4 386.3 250.7 386.1 245.3 391.2 247.0 407.2 290.6 -77.5 -122.3 44.8 -136.1 -166.2 30.1 -193.3 -210.4 17.1 -205.6 -221.0 15.4 -236.6 -258.7 22.0 -272.6 -289.2 16.6 -285.2 -302.9 17.7 -292.8 -301.9 9.1 Capital consumption allowances 34 Government surplus, or deficit ( - ) , national income and 36 State and local 37 Gross investment 38 Gross private domestic 40 Statistical discrepancy 1. With inventory valuation and capital consumption adjustments. 2. With capital consumption adjustment. 742.9 723.4 730.1 709.9 714.6 706.5 713.8 735.4 832.3 -89.3 799.5 -76.1 721.1 9.0 732.8 -22.9 736.1 -21.5 722.4 -16.0 773.2 -59.4 786.4 -51.1 1.1 5.4 21.9 30.5 16.4 29.0 30.9 41.7 SOURCE. U.S. Department of Commerce, Survey of Current Business. Summary Statistics 3.10 U.S. INTERNATIONAL TRANSACTIONS A53 Summary Millions of dollars; quarterly data seasonally adjusted except as noted 1 1991 1 Balance on current account . Merchandise trade balance Merchandise exports Merchandise imports Military transactions, net Other service transactions, net Investment income, net U.S. government grants U.S. government pensions and other transfers Private remittances and other transfers -101,142 -115,668 361,697 -477,365 -6,837 32,604 14,366 -10,773 -2,517 -12,316 1992 Q3 Q4 Ql Q2r Q3P -5,903 -17,222 107,946 -125,168 -624 14,468 4,474 -2,620 -858 -3,521 -17,802 -24,558 107,464 -132,022 -623 13,261 1,930 -3,085 -1,146 -3,581 -14,238 -26,538 -137,350 -548 16,173 3,551 -2,490 -%9 -3,417 -90,428 -108,853 388,705 -497,558 -7,818 39,873 19,287 -17,597 -2,945 -12,374 -3,682 -73,436 415,%2 -489,398 -5,524 50,821 16,429 24,487 -3,462 -12,9% -11,087 -20,174 104,151 -124,325 -995 13,018 3,076 -1,986 -793 -3,233 -7,218 -18,539 107,851 -126,390 -540 13,676 2,458 78 -1,080 -3,271 110,812 11 Change in U.S. government assets other than official reserve assets, net (increase, - ) 1,271 2,304 3,397 3,180 -437 -38 -277 -385 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 -25,293 0 -535 471 -25,229 -2,158 0 -192 731 -2,697 5,763 0 -177 -367 6,307 3,877 0 6 -114 3,986 1,225 0 -23 17 1,232 -1,057 0 -172 111 -9% 1,464 0 1,952 0 -173 -118 2,243 17 Change in U.S. private assets abroad (increase, - ) . 18 Bank-reported claims3 19 Nonbank-reported claims 20 U.S. purchases of foreign securities, net 21 U.S. direct investments abroad, net -90,923 -51,255 11,398 -22,070 -28,9% -56,467 7,469 -2,477 -28,765 -32,694 -71,379 -4,753 5,526 -45,017 -27,135 -17,426 2,403 -298 -12,403 -7,128 -44,947 -23,219 1,269 -11,305 -11,692 -3,155 15,859 4,764 -8,703 -15,075 -1,150 10,943 3,137 -8,221 -7,009 -21,724 -440 8,489 149 1,383 146 4,976 1,835 33,908 29,576 667 18,407 15,815 1,301 1,600 3,385 -1,586 -1,668 4,115 5,624 474 654 -2,732 95 12,819 12,619 1,075 -344 -914 383 21,192 14,909 540 % 5,534 113 20,895 11,126 1,699 598 7,547 -75 -7,738 -323 912 875 -8,202 -1,000 205,205 63,382 5,565 29,618 38,767 67,873 65,471 16,370 4,906 -2,534 1,592 45,137 48,573 -13,677 -405 16,241 34,918 11,498 18,818 -2,629 -4,474 1,942 -828 4,551 -3,820 26,520 -551 1,141 10,286 10,333 5,311 25,024 19,945 29 36,110 23,465 725 1,408 4,832 5,680 5,364 3,076 -3,361 0 2,394 0 47,370 0 -1,078 2,394 47,370 -1,078 0 -1,478 -6,137 4,659 0 2,447 613 1,835 0 -8,410 4,023 -12,433 0 -29,650 410 -30,060 0 17,109 -7,680 24,789 -25,293 -2,158 5,763 3,877 1,225 -1,057 1,464 1,952 8,343 32,042 16,807 3,461 13,163 21,0% 20,297 -8,613 2,459 -2,125 3,061 22 Change in foreign official assets in United States (increase, +) 23 U.S. Treasury securities 24 Other U.S. government obligations 25 Other rtthor U.S. 1 I C government finurnnunl liabilities I i Q Ki Kl ^ 26 Other U.S. liabilities reported by U.S. banks3 27 Other foreign official assets 28 Change in foreign private assets in United States (increase, + ) . . 29 U.S. bank-reported liabilities3 30 U.S. nonbank-reported liabilities 31 Foreign private purchases of U.S. Treasury securities, net 32 Foreign purchases of other U.S. securities, net 33 Foreign direct investments in United States, net 34 Allocation of special drawing rights 35 Discrepancy 36 Due to seasonal adjustment 37 Before seasonal adjustment 1,866 1,359 8,508 1,575 -1,306 10,012 -168 1 1,631 -i4,103 -7,181 MEMO Changes in official assets 38 U.S. official reserve assets (increase, - ) 39 Foreign official assets in United States, excluding line 25 (increase, +) 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 1. Seasonal factors not calculated for lines 12-16, 18-20, 22-34, and 38-40. 2. Data are on an international accounts basis. The data differ from the Census basis data, shown in table 3.11, for reasons of coverage and timing. Military exports are excluded from merchandise trade data and are included in line 6. 3. Reporting banks include all types of depository institution as well as some brokers and dealers. -5,604 4. Associated primarily with military sales contracts and other transactions arranged with or through foreign official agencies. 5. Consists of investments in U.S. corporate stocks and in debt securities of private corporations and state and local governments. SOURCE. U.S. Department of Commerce, Survey of Current Business. A54 3.11 International Statistics • February 1993 U . S . FOREIGN TRADE 1 Millions of dollars; monthly data seasonally adjusted 1992 Item 1 Exports of domestic and foreign merchandise, (F.A.S. value), excluding grant-aid shipments 2 General imports (customs value), including merchandise for immediate consumption plus entries into bonded warehouses 3 Trade balance 1989 363,812 1990 393,592 1991 421,730 May r June r July r Aug/ Sept/ Oct." 36,406 35,718 38,165 37,806 35,799 37,882 39,185 473,211 495,311 487,129 43,494 42,903 44,957 45,127 44,796 46,459 46,218 -109,399 -101,718 -65,399 -7,088 -7,185 -6,792 -7,322 -8,997 -8,577 -7,032 1. The Census basis data differ from merchandise trade data shown in table 3.10, lines 3-5, U.S. International Transactions Summary, because of coverage and timing. On the export side, the largest difference is the exclusion of military sales (which are combined with other military transactions and reported separately in table 3.10, line 6). On the import side, this table includes imports of gold, ship purchases, imports of electricity from Canada, and other transactions; military payments are excluded and shown separately in table 3.10, line 6. Since 3.12 Apr. r Jan. 1, 1987, Census data have been released forty-five days after the end of the month; the previous month is revised to reflect late documents. Total exports and the trade balance reflect adjustments for undocumented exports to Canada. Components may not sum to totals because of rounding. SOURCE. FT900, Summary of U.S. Export and Import Merchandise Trade (U.S. Department of Commerce, Bureau of the Census). U.S. RESERVE ASSETS Millions of dollars, end of period 1992 Asset 1 Total 2 Gold stock, including Exchange Stabilization Fund 1 3 Special drawing rights 2,3 4 Reserve position in International Monetary Fund 5 Foreign currencies 4 1989 1990 1991 June July Aug. Sept. Oct. Nov. p 74,609 83,316 77,719 74,587 77,092 77,370 78,474 78,527 74,207 72,231 11,059 9,951 11,058 10,989 11,057 11,240 11,057 11,315 11,059 11,597 11,059 11,702 11,059 12,193 11,059 12,111 11,060 11,561 11,059 11,495 9,048 44,551 9,076 52,193 9,488 45,934 9,175 43,040 9,381 45,055 9,625 44,984 9,762 45,460 9,778 45,579 9,261 42,325 8,781 40,896 1. Gold held "under earmark" at Federal Reserve Banks for foreign and international accounts is not included in the gold stock of the United States; see table 3.13, line 3. Gold stock is valued at $42.22 per fine troy ounce. 2. Special drawing rights (SDRs) are valued according to a technique adopted by the International Monetary Fund (IMF) in July 1974. Values are based on a weighted average of exchange rates for the currencies of member countries. From July 1974 through December 1980, 16 currencies were used; since January 1981, 3.13 May 5 currencies have been used. U.S. SDR holdings and reserve positions in the IMF also have been valued on this basis since July 1974. 3. Includes allocations of SDRs by the International Monetary Fund on Jan. 1 of the year indicated, as follows: 1970—$867 million; 1971—$717 million; 1972— $710 million; 1979—$1,139 million; 1980—$1,152 million; 1981—$1,093 million; plus net transactions in SDRs. 4. Valued at current market exchange rates. FOREIGN OFFICIAL ASSETS H E L D AT F E D E R A L R E S E R V E B A N K S 1 Millions of dollars, end of period 1992 Asset 1989 1990 1991 May 1 Deposits Held in custody 2 U.S. Treasury securities 3 Earmarked gold July Aug. Sept. Oct. Nov. p 589 369 968 217 219 264 297 546 415 229 224,911 13,456 278,499 13,387 281,107 13,303 307,562 13,295 307,337 13,268 316,431 13,261 318,328 13,261 306,971 13,241 311,538 13,201 308,959 13,192 1. Excludes deposits and U.S. Treasury securities held for international and regional organizations. 2. Marketable U.S. Treasury bills, notes, and bonds and nonmarketable U.S. Treasury securities payable at face value in dollars or foreign currencies. June 3. Held for foreign and international accounts and valued at $42.22 per fine troy ounce; not included in the gold stock of the United States. Summary Statistics 3.14 FOREIGN BRANCHES OF U.S. BANKS A55 Balance Sheet Data 1 Millions of dollars, end of period 1992 Apr. May June July Aug. Sept. Oct. All foreign countries ASSETS 545,366 556,925 548,901 549,858 564,816 564,466 537,529 544,815r 544,437" 553,564 2 Claims on United States 3 Parent bank 4 Other banks in United States 5 Nonbanks 6 Claims on foreigners 7 Other branches of parent bank 8 Banks 9 Public borrowers 10 Nonbank foreigners 11 Other assets 198,835 157,092 17,042 24,701 300,575 113,810 90,703 16,456 79,606 45,956 188,496 148,837 13,296 26,363 312,449 135,003 72,602 17,555 87,289 55,980 176,301 137,509 12,884 25,908 303,934 111,729 81,970 18,652 91,583 68,666 177,992 143,790 9,993 24,209 302,916 111,140 83,673 18,743 89,360 68,950 182,554 145,974 11,640 24,940 314,569 115,407 86,029 19,194 93,939 67,693 183,933 147,626 10,418 25,889 311,990 115,398 84,534 20,162 91,8% 68,543 171,911 136,287 9,576 26,048 311,578 112,177 85,141 19,645 94,615 54,040 163,039" 128,267" 9,181 25,591" 321,631" 116,674 87,347" 20,423 97,187 60,145" 167,258 134,019 8,083 25,156 319,115" 118,105" 83,912 20,485 %,613 58,064 174,921 138,907 10,658 25,356 318,833 115,525 86,820 20,789 95,699 59,810 12 Total payable in U.S. dollars 382,498 379,479 363,941 364,748 370,290 369,561 349,145 340,819" 346,633" 363,443 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 20 Public borrowers 21 Nonbank foreigners 22 Other assets 191,184 152,294 16,386 22,504 169,690 82,949 48,396 10,961 27,384 21,624 180,174 142,962 12,513 24,699 174,451 95,298 36,440 12,298 30,415 24,854 169,662 133,476 12,025 24,161 167,010 78,114 41,635 13,685 33,576 27,269 173,337 141,264 9,255 22,818 162,%7 75,177 41,415 12,994 33,381 28,444 177,311 142,874 11,012 23,425 167,054 76,949 42,061 12,994 35,050 25,925 177,638 144,287 10,016 23,335 168,586 76,700 43,307 13,723 34,856 23,337 166,507 133,120 9,135 24,252 162,843 72,250 41,718 13,320 35,555 19,795 157,405" 124,737" 8,876 23,792" 161,500" 70,693 40,350" 13,661 36,7% 21,914" 161,302 130,346 7,476 23,480 166,360" 72,116" 42,281 13,%5 37,998 18,971 169,036 135,954 9,335 23,747 173,246 76,107 45,401 14,221 37,517 21,161 1 Total payable in any currency United Kingdom 23 Total payable in any currency 161,947 184,818 175,599 170,775 174,925 171,027 159,317 165,832 161,157 167,472 24 Claims on United States 25 Parent bank 26 Other banks in United States 27 Nonbanks 28 Claims on foreigners 29 Other branches of parent bank 30 Banks 31 Public borrowers 32 Nonbank foreigners 33 Other assets 39,212 35,847 1,058 2,307 107,657 37,728 36,159 3,293 30,477 15,078 45,560 42,413 792 2,355 115,536 46,367 31,604 3,860 33,705 23,722 35,257 31,931 1,267 2,059 109,692 35,735 36,394 3,306 34,257 30,650 35,451 32,379 1,228 1,844 104,467 34,061 36,126 3,108 31,172 30,857 37,369 34,433 970 1,966 107,795 35,331 37,548 3,165 31,751 29,761 38,0% 35,343 756 1,997 104,270 36,952 34,783 2,995 29,540 28,661 38,763 35,542 1,065 2,156 105,990 35,359 36,777 3,128 30,726 14,564 37,511 34,593 744 2,174 108,895 37,732 37,711 3,046 30,406 19,426 35,891 32,929 1,067 1,895 106,758 37,977 36,1% 3,371 29,214 18,508 39,460 36,262 1,400 1,798 109,851 40,530 37,121 3,698 28,502 18,161 34 Total payable in U.S. dollars 103,208 116,762 105,974 102,285 104,392 102,737 98,828 99,610 100,449 106,608 36,404 34,329 843 1,232 59,062 29,872 16,579 2,371 10,240 7,742 41,259 39,609 334 1,316 63,701 37,142 13,135 3,143 10,281 11,802 32,418 30,370 822 1,226 58,791 28,667 15,219 2,853 12,052 14,765 33,298 31,022 853 1,423 54,129 25,922 14,829 2,545 10,833 14,858 35,185 33,059 677 1,449 56,615 27,482 15,348 2,463 11,322 12,592 35,376 33,751 627 998 56,888 28,541 15,380 2,474 10,493 10,473 36,133 33,936 785 1,412 56,264 26,751 15,930 2,653 10,930 6,431 34,948 32,786 625 1,537 55,812 26,825 15,565 2,353 11,069 8,850 33,618 31,578 711 1,329 59,099 27,986 16,808 2,604 11,701 7,732 37,072 34,979 769 1,324 61,489 30,218 17,394 2,518 11,359 8,047 35 Claims on United States 36 Parent bank 37 Other banks in United States Nonbanks 38 39 Claims on foreigners 40 Other branches of parent bank 41 Banks 42 Public borrowers Nonbank foreigners 43 44 Other assets Bahamas and Cayman Islands 45 Total payable in any currency 176,006 162,316 168,326 162,871 167,139 168,963 153,691 144,089 145,450 153,853 46 Claims on United States 47 Parent bank 48 Other banks in United States 49 Nonbanks 50 Claims on foreigners 51 Other branches of parent bank 52 Banks 53 Public borrowers 54 Nonbank foreigners 55 Other assets 124,205 87,882 15,071 21,252 44,168 11,309 22,611 5,217 5,031 7,633 112,989 77,873 11,869 23,247 41,356 13,416 16,310 5,807 5,823 7,971 115,244 81,520 10,907 22,817 45,229 11,098 20,174 7,161 6,7% 7,853 112,080 82,823 8,115 21,142 41,929 10,156 18,406 6,332 7,035 8,862 115,633 84,041 9,729 21,863 42,828 9,311 19,658 6,459 7,400 8,678 114,467 83,316 9,118 22,033 45,600 9,392 21,548 7,084 7,576 8,8% 102,850 72,107 8,045 22,698 41,886 8,678 18,837 6,728 7,643 8,955 94,595 64,454 8,060 22,081 41,315 8,5% 17,570 7,125 8,024 8,179 %,750 68,209 6,562 21,979 41,712 7,753 18,412 7,102 8,445 6,988 102,619 72,185 8,174 22,260 42,514 7,287 19,680 7,120 8,427 8,720 56 Total payable in U.S. dollars 170,780 158,390 163,771 158,196 162,066 163,313 147,905 138,348 139,769 148,865 1. Since June 1984, reported claims held by foreign branches have been reduced by an increase in the reporting threshold for "shell" branches from $50 million to $150 million equivalent in total assets, the threshold now applicable to all reporting branches. A56 3.14 International Statistics • February 1993 FOREIGN BRANCHES OF U.S. B A N K S Balance Sheet Data 1 —Continued 1992 Account 1989 1990 1991 Apr. May July Aug. Sept. Oct. All foreign countries LIABILITIES 57 Total payable in any currency 545,366 556,925 548,901 549,858 564,816 564,466 537,529 544,815R 544,437* 553,564 58 Negotiable certificates of deposit (CDs) 59 To United States 60 Parent bank 61 Other banks in United States 62 Nonbanks 23,500 197,239 138,412 11,704 47,123 18,060 189,412 138,748 7,463 43,201 16,284 198,121 136,431 13,260 48,430 12,757 196,635 138,273 15,075 43,287 14,010 198,897 136,195 13,944 48,758 13,040 204,929 143,474 14,009 47,446 12,758 192,087 133,051 11,833 47,203 14,246 179,246r 126,825r 10,928r 41,493 12,389 185,071* 127,656 12,303 45,112* 12,054 188,549 132,639 12,254 43,656 63 To foreigners 64 Other branches of parent bank . . . 65 Banks 66 Official institutions 67 Nonbank foreigners 68 Other liabilities 296,850 119,591 76,452 16,750 84,057 27,777 311,668 139,113 58,986 14,791 98,778 37,785 288,254 112,033 63,097 15,596 97,528 46,242 2%,580 111,846 65,177 16,083 103,474 43,886 308,394 115,098 68,528 19,465 105,303 43,515 302,376 116,760 65,983 16,399 103,234 44,121 301,943 114,226 65,419 18,058 104,240 30,741 314,910* 120,349* 68,565* 18,241 107,755* 36,413* 311,539* 119,634* 68,537* 16,724* 106,644 35,438* 315,610 117,986 70,583 20,564 106,477 37,351 69 Total payable in U.S. dollars 396,613 383,522 370,561 365,920 373,679 374,506 354,666 346,377* 346,344* 366,383 70 Negotiable CDs 71 To United States 72 Parent bank 73 Other banks in United States 74 Nonbanks 19,619 187,286 132,563 10,519 44,204 14,094 175,654 130,510 6,052 39,092 11.909 185,286 129,669 11,707 43.910 8,470 185,533 131,844 14,217 39,472 9,643 187,438 130,007 12,840 44,591 8,475 192,792 136,273 13,251 43,268 8,531 179,395 125,647 10,816 42,932 8,755 166,377* 119,370* 9,835 37,172 7,628 170,774* 119,797 11,012 39,965* 6,709 175,561 125,130 11,381 39,050 75 To foreigners 76 Other branches of parent bank . . . 77 Banks 78 Official institutions 79 Nonbank foreigners 80 Other liabilities 176,460 87,636 30,537 9,873 48,414 13,248 •179,002 98,128 20,251 7,921 52,702 14,772 158,993 76,601 24,156 10,304 47,932 14,373 157,139 75,772 22,577 10,413 48,377 14,778 162,011 76,973 24,090 13,102 47,846 14,587 158,532 77,604 23,474 10,119 47,335 14,707 155,352 73,699 22,955 11,543 47,155 11,388 157,475* 74,037 22,973 10,713 49,752* 13,770* 155,001* 72,947* 22,822* 9,939* 49,293 12,941* 167,698 77,331 26,320 12,085 51,962 16,415 United Kingdom 81 Total payable in any currency . . 161,947 184,818 175,599 170,775 174,925 171,027 159,317 165,832 161,157 167,472 82 Negotiable CDs 83 To United States 84 Parent bank 85 Other banks in United States 86 Nonbanks 20,056 36,036 29,726 1,256 5,054 14,256 39,928 31,806 1,505 6,617 11,333 37,720 29,834 1,438 6,448 7,324 36,610 29,317 2,011 5,282 8,458 33,236 25,637 1,638 5,961 7,612 36,660 28,201 1,326 7,133 7,731 37,164 29,104 1,315 6,745 8,083 35,527 27,695 1,632 6,200 7,266 35,885 27,528 1,670 6,687 6,062 35,431 27,430 1,342 6,659 87 To foreigners 88 Other branches of parent bank 89 Banks 90 Official institutions 91 Nonbank foreigners 92 Other liabilities 92,307 27,397 29,780 8,551 26,579 13,548 108,531 36,709 25,126 8,361 38,335 22,103 98,167 30,054 25,541 9,670 32,902 28,379 99,804 28,239 27,046 9,539 34,980 27,037 106,603 30,429 27,549 12,732 35,893 26,628 100,340 31,464 25,315 10,167 33,394 26,415 100,738 30,205 25,155 11,091 34,287 13,684 104,892 31,234 26,435 10,699 36,524 17,330 101,082 29,839 25,823 9,131 36,289 16,924 109,314 33,663 28,892 11,675 35,084 16,665 93 Total payable in U.S. dollars . . . 108,178 116,094 108,755 100,799 102,783 101,901 97,565 99,092 95,642 106,117 94 Negotiable CDs 95 To United States % Parent bank 97 Other banks in United States 98 Nonbanks 18,143 33,056 28,812 1,065 3,179 12,710 34,697 29,955 1,156 3,586 10,076 33,003 28,260 1,177 3,566 6,136 32,510 27,904 1,796 2,810 6,967 28,936 24,435 1,184 3,317 5,750 32,300 26,720 1,084 4,496 6,139 32,178 27,351 857 3,970 5,890 30,357 25,873 1,088 3,3% 5,689 30,330 25,700 992 3,638 4,212 31,279 26,023 866 4,390 99 To foreigners 100 Other branches of parent bank 101 Banks 102 Official institutions 103 Nonbank foreigners 104 Other liabilities 50,517 18,384 12,244 5,454 14,435 6,462 60,014 25,957 9,488 4,692 19,877 8,673 56,626 20,800 11,069 7,156 17,601 9,050 52,625 18,136 9,435 6,998 18,056 9,528 57,489 19,497 10,799 9,915 17,278 9,391 54,262 20,918 9,848 7,049 16,447 9,589 52,894 18,634 9,399 7,808 17,053 6,354 54,381 18,983 9,289 6,956 19,153 8,464 51,677 17,747 9,112 6,156 18,662 7,946 61,510 22,058 12,067 8,130 19,255 9,116 Bahamas and Cayman Islands 105 Total payable in any currency .. 176,006 162,316 168,326 162,871 167,139 168,963 153,691 144,089 145,450 153,853 106 Negotiable CDs 107 To United States 108 Parent bank 109 Other banks in United States 110 Nonbanks 678 124,859 75,188 8,883 40,788 646 114,738 74,941 4,526 35,271 1,173 129,872 79,394 10,231 40,247 1,546 124,605 76,086 12,060 36,459 1,646 128,891 76,779 11,085 41,027 1,894 130,815 80,998 11,708 38,109 1,330 115,589 67,356 9,641 38,592 1,814 105,816 64,039 8,491 33,286 872 108,983* 63,140 9,6% 36,147* 1,394 113,894 69,207 10,275 34,412 47,382 23,414 8,823 1,097 14,048 3,087 44,444 24,715 5,588 622 13,519 2,488 35,200 17,388 5,662 572 11,578 2,081 34,899 16,933 6,009 736 11,221 1,821 35,021 16,842 6,346 731 11,102 1,581 34,637 16,799 6,075 770 10,993 1,617 35,136 17,668 6,390 862 10,216 1,636 34,878 17,315 6,242 935 10,386 1,581 34,037* 16,071 6,787 984* 10,195 1,558* 34,889 15,441 6,987 1,058 11,403 3,676 171,250 157,132 163,603 158,247 162,280 163,951 148,744 138,864 111 To foreigners 112 Other branches of parent bank 113 Banks 114 Official institutions 115 Nonbank foreigners 116 Other liabilities 117 Total payable in U.S. dollars 139,963 148,881 Summary Statistics 3.15 A57 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1992 Item 1 Total1 2 3 4 5 6 7 8 9 10 11 12 1990 1991 Apr. May June July Aug. Sept. Oct.P 344,529 360,546 385,572 394,709 401,795 404,052 406,557r 393,644r 405,250 By type Liabilities reported by banks in the United States U.S. Treasury bills and certificates U.S. Treasury bonds and notes Marketable Nonmarketable U.S. securities other than U.S. Treasury securities 39,880 79,424 38,412 92,692 44,583 102,968 47,471 111,224 51,421 109,278 48,883 114,781 52,078r 113,307 43,675r 113,634 60,773 104,2% 202,487 4,491 18,247 203,677 4,858 20,907 210,754 4,989 22,278 208,069 5,021 22,924 213,363 4,625 23,108 212,5% 4,582 23,210 213,293 4,476 23,403 208,810 4,505 23,020 211,810 4,473 23,898 By area Western Europe 1 Canada Latin America and Caribbean Asia Africa , Other countries 167,191 8,671 21,184 138,0% 1,434 7,955 168,365 7,460 33,554 139,465 2,092 9,608 179,239 7,855 39,130 148,573 2,392 8,381 185,416 9,347 39,732 149,062 2,792 8,358 191,214 9,302 39,433 150,215 3,265 8,364 194,351 9,876 39,146 150,047 3,218 7,412 195,947r 9,990 38,356 151,785r 2,860 7,617r 186,32ff 7,027 37,703 151,667r 3,360 7,565r 194,465 8,111 38,465 153,605 3,481 7,121 1. Includes the Bank for International Settlements. 2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, negotiable time certificates of deposit, and borrowings under repurchase agreements. 3. Includes nonmarketable certificates of indebtedness (including those payable in foreign currencies through 1974) and Treasury bills issued to official institutions of foreign countries. 4. Excludes notes issued to foreign official nonreserve agencies. Includes bonds and notes payable in foreign currencies; zero coupon bonds are included at current value. 3.16 5. Debt securities of U.S. government corporations and federally sponsored agencies, and U.S. corporate stocks and bonds. 6. Includes countries in Oceania and Eastern Europe. SOURCE. Based on Treasury Department data and on data reported to the Treasury Department by banks (including Federal Reserve Banks) and securities dealers in the United States and on the 1984 benchmark survey of foreign portfolio investment in the United States. LIABILITIES TO, A N D CLAIMS ON, FOREIGNERS Reported by Banks in the United States 1 Payable in Foreign Currencies Millions of dollars, end of period 1991 Item 1 Banks' liabilities 2 Banks' claims 3 Deposits 4 Other claims 5 Claims of banks' domestic customers 1988 74,980 68,983 25,100 43,884 364 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 1989 67,835 65,127 20,491 44,636 3,507 1992 1990 70,477 66,7% 29,672 37,124 6,309 Dec. Mar. June Sept. 75,129 73,318 26,192 47,126 3,274 67,874 60,844 23,269 37,575 2,862 70,764 58,968 23,462 35,506 4,428 85,166 73,185 29,419 43,766 3,908 States that represent claims on foreigners held by reporting banks for the accounts of the domestic customers. A58 3.17 International Statistics • February 1993 LIABILITIES TO FOREIGNERS Payable in U.S. dollars Reported by Banks in the United States' Millions of dollars, end of period 1989 Apr. May June July Aug. Sept. r Oct. HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 736,878 759,634 756,510 769,486 785,162 786,924 777,485 768,804 r 779,399 2 Banks' own liabilities 3 Demand deposits 4 Time deposits 5 Other 3 6 Own foreign offices 4 577,498 22,032 168,780 67,823 318,864 577,229 21,723 168,017 65,822 321,667 575,232 20,321 159,649 66,185 329,077 578,651 19,043 153,383 76,149 330,076 583,786 19,606 150,373 82,654 331,153 587,581 20,931 152,185 85,231 329,234 571,410 19,739 148,664 82,448 320,559 563,760 r 21,698 144,119" 86,301 r 311,642 585,424 22,474 143,762 82,119 337,069 159,380 91,100 182,405 %,796 181,278 110,734 190,835 120,924 201,376 130,392 199,343 128,672 206,075 135,579 205,044" 135,744 193,975 134,894 19,526 48,754 17,578 68,031 18,664 51,880 17,797 52,114 18,995 51,989 18,020 52,651 19,339 51,157 18,541 50,759" 18,814 40,267 4,894 3,279 % 8,981 6,827 43 2,714 4,070 10,291 8,408 29 1,819 6,560 11,313 9,358 46 2,520 6,792 12,771 10,548 40 3,788 6,720 11,281 12,584 9,477 927 2,255 5,918 4,540 36 1,050 3,455 2,630 6,826 10,554 7,917 24 2,521 5,372 1,616 197 1,378 364 2,154 1,730 1,883 1,442 1,955 1,461 2,223 1,687 3,129 2,602 3,107 2,654 2,637 1,991 1,417 2 1,014 0 424 0 441 0 494 0 534 2 527 0 453 0 646 0 113,481 31,108 2,1% 10,495 18,417 119,303 34,910 1,924 14,359 18,628 131,104 34,427 2,642 16,504 15,281 147,551 40.630 1,360 18.631 20,639 158,695 43,567 1,320 19,066 23,181 160,699 47,533 1,631 17,738 28,164 163,664 45,338 1,372 18,382 25,584 165,385" 48,526" 1,676 18,098" 28,752" 157,309 40,524 1,761 16,238 22,525. 82,373 76,985 84,393 79,424 %,677 92,692 106,921 102,968 115,128 111,224 113,166 109,278 118,326 114,781 116,859 113,307 116,785 113,634 5,028 361 4,766 203 3,879 106 3,812 141 3,717 187 3,602 286 3,459 86 3,466 86 2,922 229 515,275 454,273 135,409 10,279 90,557 34,573 318,864 540,805 458,470 136,802 10,053 88,541 38,208 321,667 522,424 459,177 130,100 8,632 82,857 38,611 329,077 522,084 456,309 126,233 8,753 79.632 37,848 330,076 527,455 460,919 129,766 9,229 77,098 43,439 331,153 526,472 459,710 130,476 9,705 80,170 40,601 329,234 514,723 448,111 127,552 8,442 77,382 41,728 320,559 502,079" 435,126" 123,484" 9,851 73,175" 40,458" 311,642 523,255 466,670 129,601 10,443 74,447 44,711 337,069 61,002 9,367 82,335 10,669 63,247 7,471 65,775 8,410 66,536 8,946 66,762 8,927 66,612 9,444 66,953 10,429 56,585 10,905 5,124 46,510 5,341 66,325 5,694 50,082 7,147 50,218 7,044 50,546 6,647 51,188 7,129 50,039 6,920 49,604 6,846 38,834 103,228 88,839 9,460 66,801 12,577 93,608 79,309 9,711 64,067 5,530 94,001 74,801 9,004 57,574 8,223 89,560 73,304 8,901 53,301 11,102 87,699 69,942 9,011 51,689 9,242 86,982 69,790 9,555 50,489 9,746 87,817 69,809 9,901 49,892 10,016 88,756" 70,631" 10,150 50,216" 10,265" 88,281 70,313 10,246 50,556 9,511 14,389 4,551 14,299 6,339 19,200 8,841 16,256 8,104 17,757 8,761 17,192 8,780 18,008 8,752 18,125" 9,354 17,%8 8,364 7,958 1,880 6,457 1,503 8,667 1,692 6,397 1,755 7,740 1,256 7,237 1,175 8,224 1,032 7,702 1,069" 8,400 1,204 7,203 7,073 7,456 7,624 7,642 7,351 6,976 7,279 6,964 7 Banks' custodial liabilities 5 8 U.S. Treasury bills and certificates 6 9 Other negotiable and readily transferable instruments 10 Other 11 Nonmonetary international and regional organizations 8 12 Banks' own liabilities 13 Demand deposits 14 Time deposits" 15 Other 3 . 16 17 18 19 5 Banks' custodial liabilities U.S. Treasury bills and certificates 6 Other negotiable and readily transferable instruments Other 9 20 Official institutions 21 Banks' own liabilities 22 Demand deposits 23 Time deposits 24 Other 3 25 26 27 28 Banks' custodial liabilities 5 U.S. Treasury bills and certificates 6 Other negotiable and readily transferable instruments Other 10 29 Banks 30 Banks' own liabilities 31 Unaffiliated foreign banks 32 Demand deposits 33 Time deposits* 34 Other 3 35 Own foreign offices 4 36 37 38 39 Banks' custodial liabilities 5 U.S. Treasury bills and certificates 6 Other negotiable and readily transferable instruments Other 40 Other foreigners 41 Banks' own liabilities 42 Demand deposits 43 Time deposits" 44 Other 3 45 46 47 48 Banks' custodial liabilities 5 U.S. Treasury bills and certificates 6 Other negotiable and readily transferable instruments Other 8,152 24 3,008 5,120 21 MEMO: 49 Negotiable time certificates of deposit in custody for foreigners 1. Reporting banks include all types of depository institution, as well as some brokers and dealers. 2. Excludes negotiable time certificates of deposit, which are included in " O t h e r negotiable and readily transferable instruments." 3. Includes borrowing under repurchase agreements. 4. For U.S. banks, includes amounts due to own foreign branches and foreign subsidiaries consolidated in Consolidated Report of Condition filed with bank regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists principally of amounts due to head office or parent foreign bank, and foreign branches, agencies, or wholly owned subsidiaries of head office or parent foreign bank. 5. Financial claims on residents of the United States, other than long-term securities, held by or through reporting banks. 6. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official institutions of foreign countries. 7. Principally bankers acceptances, commercial paper, and negotiable time certificates of deposit. 8. Principally the International Bank for Reconstruction and Development, the Inter-American Development Bank, and the Asian Development Bank. Excludes "holdings of dollars" of the International Monetary Fund. 9. Foreign central banks, foreign central governments, and the Bank for International Settlements. 10. Excludes central banks, which are included in "Official institutions." Bank-Reported Data A59 3.17—Continued 1992 Item 1989 1990 1991 Apr. May June July Aug. Sept. Oct." AREA 1 Total, all foreigners 736,878 759,634 756,510 769,486 785,162 786,924 777,485 768,804r 779,399' 777,655 2 Foreign countries 731,984 753,716 747,529 759,195 773,849 774,153 766,204 756,220' 768,845' 767,018 237,501 1,233 10,648 1,415 570 26,903 7,578 1,028 16,169 6,613 2,401 2,418 4,364 1,491 34,496 1,818 102,362 1,474 13,563 350 608 254,452 1,229 12,382 1,399 602 30,946 7,485 934 17,735 5,350 2,357 2,958 7,544 1,837 36,690 1,169 109,555 928 11,689 119 1,545 249,067 1,193 13,337 937 1,341 31,808 8,619 765 13,541 7,161 1,866 2,184 11,391 2,222 37,238 1,598 100,262 622 9,274 241 3,467 262,246 1,219 15,818 961 1,005 27,667 9,272 1,134 10,035 9,352 899 2,217 14,435 2,888 33,604 1,362 108,023 569 17,208 287 4,291 273,436 1,337 17,346 1,331 764 27,005 8,319 1,254 10,055 9,572 1,429 2,391 14,316 2,007 36,663 1,691 112,828 524 19,961 436 4,207 279,521 1,490 16,740 1,263 843 30,132 8,018 1,374 10,362 9,456 1,359 2,530 15,844 4,125 35,987 1,580 111,712 555 21,609 440 4,102 283,109 1,445 16,797 1,348 720 28,900 8,967 998 10,164 9,653 1,421 2,659 15,313 3,710 39,568 1,789 111,878 547 22,743 609 3,880 289,388' 1,427 18,449 1,329 976 29,456 11,032' 934 10,992 10,422 1,341 2,664 14,904 4,162 40,569' 2,021 111,521 554 21,872' 525 4,238 290,324' 1,456' 17,942 1,760 685 32,153' 14,739' 1,069 12,236 10,397 1,851 2,245 15,589 3,194' 39,314' 2,087 115,727' 567 12,867' 499 3,947 306,073 1,584 21,147 1,788 949 34,530 13,810 872 11,104 9,334 1,577 2,258 14,602 5,323 38,117 2,524 114,648 577 26,938 450 3,941 3 Europe 4 Austria 5 Belgium and Luxembourg 6 Denmark 7 Finland 8 France 9 Germany 10 Greece 11 Italy 12 Netherlands 13 Norway 14 Portugal 15 Spain 16 Sweden 17 Switzerland 18 Turkey 19 United Kingdom 20 Yugoslavia 21 Others in Western Europe 11 22 U.S.S.R Other Eastern Europe 23 18,865 20,349 21,605 20,500 22,556 20,358 22,350 20,410 22,668 21,378 25 Latin America and Caribbean 26 Argentina 27 Bahamas 28 Bermuda 29 Brazil 30 British West Indies 31 Chile 32 Colombia 33 Cuba 34 Ecuador 35 Guatemala 36 Jamaica 37 Mexico 38 Netherlands Antilles 39 Panama 40 Peru 41 Uruguay 42 Venezuela 43 Other 311,028 7,304 99,341 2,884 6,351 138,309 3,212 4,653 10 1,391 1,312 209 15,423 6,310 4,362 1,984 2,284 9,482 6,206 332,997 7,365 107,386 2,822 5,834 147,321 3,145 4,492 11 1,379 1,541 257 16,650 7,357 4,574 1,294 2,520 12,271 6,779 346,025 7,758 100,597 3,178 5,942 163,872 3,284 4,662 2 1,232 1,594 231 19,957 5,592 4,695 1,249 2,111 13,181 6,888 341,925 8,654 98,530 3,368 5,752 160,991 3,506 4,915 9 1,128 1,489 234 21,362 5,986 4,216 1,094 2,171 11,874 6,646 339,862 9,381 100,025 3,009 5,399 158,515 3,792 4,902 6 1,150 1,438 242 20,842 5,347 4,100 1,098 2,118 11,705 6,793 339,517 9,705 101,702 3,598 5,612 156,756 3,702 4,721 3 1,137 1,447 309 19,491 5,313 4,286 1,156 2,182 11,448 6,949 325,910 10,043 92,536 4,848 5,522 151,877 3,606 4,687 12 1,074 1,420 271 19,642 5,085 4,457 1,131 2,175 11,080 6,444 311,265' 9,397' 82,561 4,782 5,283' 148,450 3,393' 4,711 9 1,214 1,432 272 20,046 4,825 4,302 1,123 2,182' 10,802 6,481' 302,039' 9,065 69,073 4,255' 5,393 153,472 3,440 4,792' 33' 1,073 1,416 309 19,650 4,751 4,595 1,143 2,019 11,101 6,459 295,080 9,487 77,517 5,879 5,828 136,674 3,253 4,767 11 1,026 1,376 274 19,226 4,708 4,115 1,124 2,086 11,470 6,259 44 Asia China 45 People's Republic of China 46 Republic of China (Taiwan) 47 Hong Kong 48 India 49 Indonesia 50 Israel 51 Japan 52 Korea (South) 53 Philippines 54 Thailand 55 Middle Eastern oil-exporting countries 56 Other 156,201 136,844 120,440 125,187 128,083 124,549 124,894 125,214 144,134 134,241 1,773 19,588 12,416 780 1,281 1,243 81,184 3,215 1,766 2,093 13,370 17,491 2,421 11,246 12,754 1,233 1,238 2,767 67,076 2,287 1,585 1,443 15,829 16,965 2,626 11,491 14,269 2,418 1,463 2,015 47,047 2,587 2,449 2,252 15,752 16,071 2,753 10,471 16,125 1,792 1,109 3,791 47,337 3,016 2,266 3,147 18,614 14,766 2,364 10,265 17,885 1,671 1,133 3,432 46,183 3,132 1,630 6,990 18,297 15,101 2,378 9,985 16,980 1,715 1,387 2,976 44,265 2,839 1,813 4,586 18,983 16,642 2,292 10,277 16,840 1,567 1,256 2,850 45,815 3,288 1,994 4,017 19,828 14,870 2,508 10,362 17,775 1,480 958 2,620 45,682 3,644 1,920 4,624 18,938 14,703 2,480 17,991 1,372 1,507 2,613 64,64c 3,672' 2,028 4,517 19,977 13,907' 2,582 8,504 17,486 1,234 1,315 2,208 56,058 3,531 2,275 5,082 19,040 14,926 57 Africa 58 Egypt 59 Morocco 60 South Africa 61 Zaire 62 Oil-exporting countries 63 Other 3,824 686 78 206 86 1,121 1,648 4,630 1,425 104 228 53 1,110 1,710 4,825 1,621 79 228 31 1,082 1,784 4,864 1,610 88 188 27 1,277 1,674 5,430 2,001 77 399 26 1,257 1,670 5,810 2,540 87 248 29 1,232 1,674 5,516 2,324 85 269 17 1,211 1,610 5,314 2,143 93 275 24 1,090 1,689 5,592 2,243 100 190 14 1,339 1,706 5,843 2,598 98 240 24 1,201 1,682 64 Other 65 Australia 66 Other 4,564 3,867 697 4,444 3,807 637 5,567 4,464 1,103 4,473 3,575 898 4,482 3,211 1,271 4,398 3,192 1,206 4,425 3,066 1,359 4,629 3,322 1,307 4,088 2,927 1,161 4,403 2,987 1,416 67 Nonmonetary international and regional organizations International 15 Latin American regional Other regional 4,894 3,947 684 263 5,918 4,390 1,048 479 8,981 6,485 1,181 1,315 10,291 7,543 1,788 960 11,313 8,400 1,903 1,010 12,771 9,796 2,356 619 11,281 7,362 2,699 1,220 12,584 9,361 2,319 904 10,554' 7,458' 2,289' 807 10,637 7,590 2,139 908 24 Canada 68 69 70 11. Includes the Bank for International Settlements and Eastern European countries not listed in line 23. 12. Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania. 13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). 14. Comprises Algeria, Gabon, Libya, and Nigeria. 15. Principally the International Bank for Reconstruction and Development. Excludes "holdings of dollars" of the International Monetary Fund. 16. Principally the Inter-American Development Bank. 17. Asian, African, Middle Eastern, and European regional organizations, except the Bank for International Settlements, which is included in "Other Western Europe." A60 3.18 International Statistics • February 1993 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States 1 Payable in U.S. Dollars Millions of dollars, end of period Area and country 1989 1990 1991 Apr. May June July Aug. Sept/ 1 Total, all foreigners 534,492 511,543 514,318 506,854 504,682 511,951 503,051 479,602 2 Foreign countries 530,630 506,750 508,035 502,065 499,881 505,957 499,630 475,213 r 481,028 119,025 415 6,478 582 1,027 16,146 2,865 788 6,662 1,904 609 376 1,930 1,773 6,141 1,071 65,527 1,329 1,302 1,179 921 113,093 362 5,473 497 1,047 14,468 3,343 727 6,052 1,761 782 292 2,668 2,094 4,202 1,405 65,151 1,142 597 530 499 114,355 327 6,158 686 1,912 15,112 3,371 553 8,242 2,546 669 344 1,881 2,335 4,540 1,063 60,435 825 789 1,970 597 123,696 444 6,967 871 1,475 13,685 3,117 567 9,835 2,688 567 361 3,726 3,062 4,095 927 66,365 781 821 2,824 518 120,739 456 6,487 994 1,536 14,031 4,044 492 10,282 2,642 731 398 2,687 3,007 4,144 1,130 62,509 735 894 2,948 592 126,207 433 6,166 1,436 1,516 14,440 3,311 506 10,619 2,267 722 367 3,880 6,745 3,973 976 63,932 697 771 3,035 415 124,473 647 6,475 951 1,269 14,154 3,863 590 10,507 2,041 731 382 3,730 5,982 3,683 1,173 62.815 693 1,227 3,153 407 119,071" 606 6,324 901 1,081 13,011 4,707 619 9,876 2,075 707 387 2,590 6,567 r 3,934 l,002 r 58,826 r 678 l,356 r 3,280 544 117,178 341 7,504 1,007 1,299 15,004 4,074 606 9,487 1,980 639 383 3,304 5,494 3,112 984 56,421 674 1,216 3,199 450 3 Europe 4 Austria 5 Belgium and Luxembourg 6 Denmark 7 Finland 8 France 9 Germany 10 Greece 11 Italy 12 Netherlands 13 Norway 14 Portugal 15 Spain 16 Sweden 17 Switzerland 18 Turkey 19 United Kingdom 20 Yugoslavia 21 Others in Western Europe 2 22 U.S.S.R 23 Other Eastern Europe 24 Canada r 485,199 15,451 16,091 15,094 15,121 16,460 16,401 17,438 15,151r 15,902 25 Latin America and Caribbean 26 Argentina 27 Bahamas 28 Bermuda 29 Brazil 30 British West Indies 31 Chile 32 Colombia 33 Cuba 34 Ecuador 35 Guatemala 36 Jamaica 37 Mexico 38 Netherlands Antilles 39 Panama 40 Peru 41 Uruguay 42 Venezuela 43 Other 230,438 9,270 77,921 1,315 23,749 68,749 4,353 2,784 1 1,688 197 297 23,376 1,921 1,740 771 929 9,652 1,726 231,506 6,967 76,525 4,056 17,995 88,565 3,271 2,587 0 1,387 191 238 14,851 7,998 1,471 663 786 2,571 1,384 246,064 5,869 87,173 2,191 11,845 107,866 2,805 2,425 0 1,053 228 158 16,567 1,207 1,560 739 599 2,516 1,263 239,307 5,949 82,118 6,377 12,321 100,777 2,922 2,322 2 986 216 150 17,367 1,265 1,834 715 685 2,010 1,291 238,502 5,956 84,668 4,283 12,183 100,352 3,055 2,328 0 939 171 143 16,900 904 1,926 666 717 2,046 1,265 243,532 5,3% 83,141 4,951 12,020 106,676 3,227 2,304 0 936 173 150 16,455 920 2,199 719 765 2,215 1,285 234,119 5,614 74.816 6,099 12,186 104,188 3,118 2,398 0 950 167 151 16,331 941 2,025 708 749 2,360 1,318 217,549" 4,789 62,615 6,302 12,286 99,765 r 3,220" 2,322 0 949 189 150 16,541" 966 2,053 708 799 2,585 1,310" 210,251 4,560 58,502 3,567 11,308 99,239 3,320 2,475 0 920 237 160 17,290 1,045 1,945 732 921 2,654 1,376 44 Asia China 45 People's Republic of China 46 Republic of China (Taiwan) 47 Hong Kong 48 India 49 Indonesia 50 Israel 51 Japan 52 Korea (South) 53 Philippines 54 Thailand 55 Middle Eastern oil-exporting countries 56 Other 157,474 138,722 125,288 116,770 117,259 112,406 115,961 116,494" 130,599 634 2,776 11,128 621 651 813 111,300 5,323 1,344 1,140 10,149 11,594 620 1,952 10,648 655 933 774 90,699 5,766 1,247 1,573 10,749 13,106 747 2,087 9,617 441 952 860 84,833 6,048 1,910 1,713 8,284 7,796 660 2,008 8,520 504 1,055 837 72,116 6,218 1,690 1,618 14,562 6,982 729 1,808 9,127 475 1,132 874 74,430 5,7% 1,618 1,703 13,453 6,114 685 1,778 8,272 458 1,085 888 69,269 5,927 1,648 1,756 14,505 6,135 642 1,965 9,103 512 1,090 901 71,159 6,063 1,635 1,705 14,323 6,863 696 1,983" 8,010 528 920 71,459" 6,201 1,775 1,691" 14,783 7,340 636 2.054 10,082 499 1,089 800 83,191 6,247 1,852 1,795 14,613 7,741 57 Africa 58 Egypt 59 Morocco 60 South Africa 61 Zaire 62 Oil-exporting countries 63 Other 5,890 502 559 1,628 16 1,648 1,537 5,445 380 513 1,525 16 1,486 1,525 4,928 294 575 1,235 4 1,298 1,522 4,818 242 547 1,239 4 1,160 1,626 4,582 218 529 1,128 4 1,162 1,541 4,548 256 527 1,070 4 1,159 1,532 4,452 261 496 1,047 4 1,157 1,487 4,455 243 483 1,066 4 1,130 1,529 4,333 256 467 1.055 4 1,067 1,484 64 Other 65 Australia 66 Other 2,354 1,781 573 1,892 1,413 479 2,306 1,665 641 2,353 1,424 929 2,339 1,197 1,142 2,863 1,725 1,138 3,187 1,937 1,250 2,493 1,463 1,030 2,765 1,765 1,000 67 Nonmonetary international and regional organizations 3,862 4,793 6,283 4,789 4,801 5,994 3,421 4,389 4,171 1. Reporting banks include all types of depository institutions, as well as some brokers and dealers. 2. Includes the Bank for International Settlements and Eastern European countries not listed in line 23. 3. Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania. 1,108 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 E u r o p e . " Nonbank-Reported 3.19 Data BANKS' OWN A N D DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the United States 1 Payable in U.S. Dollars Millions of dollars, end of period 1992 Claim 1989 1990 1991 Apr. May 506,854 34,585 302,551 120,195 70,703 49,492 49,523 504,682 34,637 308,342 116,823 70,205 46,618 44,880 June July Aug. r 503,051 32,926 302,066 114,045 63,004 51,041 54,014 479,602 32,263 287,523 105,8% 56,294 49,602 53,920 Sept. r 1 Total 593,087 579,044 579,622 2 Banks' claims Foreign public borrowers 3 Own foreign offices 4 5 Unaffiliated foreign banks Deposits 6 Other 7 8 All other foreigners 534,492 60,511 296,011 134,885 78,185 56,700 43,085 511,543 41,900 304,315 117,272 65,253 52,019 48,056 514,318 37,130 318,894 116,569 69,168 47,401 41,725 58,594 13,019 67,501 14,375 65,304 15,240 53,646 17,098 66,786 15,348 30,983 41,333 37,125 24,240 38,258 14,592 11,792 12,939 12,308 13,180 12,899 13,628 8,974 7,571 8,507 45,767 44,638 38,888 9 Claims of banks' domestic customers 3 ... 11 Negotiable and readily transferable 12 Outstanding collections and other 565,597 511,951 35,946 314,613 112,048 63,678 48,370 49,344 Oct." 551,985 485,199 31,474 297,540 105,6% 54,321 51,375 50,489 493,358 32,030 297,630 112,090 60,881 51,209 51,608 MEMO: 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States . . . . 34,255 33,100 . 34,283r 32,757 33,010 n.a. foreign bank, and foreign branches, agencies, or wholly owned subsidiaries of head office or parent foreign bank. 3. Assets 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 Federal Reserve Bulletin, vol. 65 (July 1979), p. 550. 1. For banks' claims, data are monthly; for claims of banks' domestic customers, data are quarterly. Reporting banks include all types of depository institution, as well as some brokers and dealers. 2. For U.S. banks, includes amounts due from own foreign branches and foreign subsidiaries consolidated in Consolidated Report of Condition filed with bank regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists principally of amounts due from head office or parent 3.20 32,963 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States 1 Payable in U.S. Dollars Millions of dollars, end of period 1991 Maturity, by borrower and area 1988 1989 Dec. 1 Total 2 3 4 5 6 7 8 9 10 II 17 13 14 15 16 17 18 19 By borrower Maturity of one year or less Foreign public borrowers All other foreigners Maturity of more than one y e a r Foreign public borrowers All other foreigners By area n Maturity of one year or less* Europe Canada Latin America and Caribbean Asia Africa All other 3 Maturity of more than one y e a r Europe Canada Latin America and Caribbean Asia Africa All other 3 Mar. June Sept. p 233,184 238,123 206,903 195,187 194,219 1%,934 187,277 172,634 26,562 146,072 60,550 35,291 25,259 178,346 23,916 154,430 59,776 36,014 23,762 165,985 19,305 146,680 40,918 22,269 18,649 162,515 21,047 141,468 32,672 15,866 16,806 161,266 20,241 141,025 32,953 16,344 16,609 162,473 20,491 141,982 34,461 15,144 19,317 155,022 17,786 137,236 32,255 13,340 18,915 55,909 6,282 57,991 46,224 3,337 2,891 53,913 5,910 53,003 57,755 3,225 4,541 49,184 5,450 49,782 53,258 3,040 5,272 51,875 6,474 43,521 51,007 2,549 7,089 52,608 6,926 48,597 43,605 2,486 7,044 54,977 7,946 49,204 41,386 2,142 6,818 55,785 5,973 45,295 40,699 2,199 5,071 4,666 1,922 47,547 3,613 2,301 501 4,121 2,353 45,816 4,172 2,630 684 3,859 3,290 25,774 5,165 2,374 456 3,883 3,546 18,264 4,459 2,335 185 4,355 3,250 18,180 4,738 2,191 239 6,786 3,173 16,891 5,007 2,341 263 6,663 3,243 15,133 4,847 2,091 278 1. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers. 1992 1990 2. Maturity is time remaining to maturity, 3. Includes nonmonetary international and regional organizations. A61 A62 3.21 International Statistics • February 1993 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks 1 Billions of dollars, end of period 1990 Area or country 1 Total 1988 1991 1992 1989 Sept. Dec. Mar. June Sept. Dec. Mar. June Sept." 346.3 338.8 331.5 317.8 325.4 320.8 335.5 341.5 347.5 355.4 342.1 152.7 9.0 10.5 10.3 6.8 2.7 1.8 5.4 66.2 5.0 34.9 152.9 6.3 11.7 10.5 7.4 3.1 2.0 7.1 67.2 5.4 32.2 143.6 6.5 11.1 11.1 4.4 3.8 2.3 5.6 62.6 5.0 31.3 132.1 5.9 10.4 10.6 5.0 3.0 2.2 4.4 60.8 5.9 23.9 129.9 6.2 9.7 8.8 4.0 3.3 2.0 3.7 62.2 6.8 23.2 130.1 6.1 10.5 8.3 3.6 3.3 2.5 3.3 59.8 8.2 24.6 134.0 5.8 11.1 9.7 4.5 3.0 2.1 3.9 64.9 5.9 23.2 137.3 6.0 11.0 8.3 5.6 4.7 1.9 3.4 68.5 5.9 22.2 130.4 5.3 10.0 8.4 5.4 4.3 2.0 3.2 64.6 6.6 20.7 135.6 6.2 11.9 8.7 8.0 3.3 2.0 4.6 65.9 6.7 18.3 136.4 6.2 15.5 10.9 6.4 3.7 2.2 5.0 61.6 6.7 18.3 13 Other industrialized countries 14 Austria 15 Denmark lb Finland 11 Greece 18 Norway 19 Portugal 20 Spain 21 Turkey 22 Other Western Europe South Africa 2i 24 Australia 21.0 1.5 1.1 1.1 1.8 1.8 .4 6.2 1.5 1.3 2.4 1.8 20.7 1.5 1.1 1.0 2.5 1.4 .4 7.1 1.2 .7 2.0 1.6 23.0 1.6 1.1 .8 2.8 1.6 .6 8.4 1.6 .7 1.9 2.0 22.6 1.4 1.1 .7 2.7 1.6 .6 8.3 1.7 .9 1.8 1.8 23.1 1.4 .9 1.0 2.5 1.5 .6 9.0 1.7 .8 1.8 1.9 21.1 1.1 1.2 .8 2.4 1.5 .6 7.1 1.9 .9 1.8 2.0 21.7 1.0 .9 .7 2.3 1.4 .5 8.3 1.6 1.0 1.6 2.4 22.7 .6 .9 .7 2.6 1.4 .6 8.3 1.4 1.6 1.9 2.7 21.2 .8 .8 .8 2.3 1.5 .5 7.7 1.2 1.3 1.8 2.3 25.4 .8 1.3 .8 2.8 1.7 .5 10.1 1.5 1.9 1.7 2.3 24.9 .7 1.5 1.0 3.0 1.6 .5 9.8 1.5 1.4 1.7 2.3 25 OPEC 2 2b Ecuador 2/ Venezuela 28 Indonesia 29 Middle East countries 30 African countries 16.6 1.7 7.9 1.7 3.4 1.9 17.1 1.3 7.0 2.0 5.0 1.7 14.2 1.1 6.0 2.3 3.1 1.7 12.8 1.0 5.0 2.7 2.5 1.7 17.1 .9 5.1 2.8 6.6 1.6 14.0 .9 5.3 2.6 3.7 1.5 15.6 .8 5.6 2.8 5.0 1.5 14.6 .7 5.4 2.8 4.2 1.5 15.8 .7 5.4 3.0 5.3 1.4 16.2 .7 5.3 3.0 5.9 1.4 15.9 .7 5.4 3.0 5.4 1.4 31 Non-OPEC developing countries 85.3 77.5 67.1 65.4 66.4 65.0 65.0 64.3 70.6 68.8 73.8 9.0 22.4 5.6 2.1 18.8 .8 2.6 6.3 19.0 4.6 1.8 17.7 .6 2.8 5.0 15.4 3.6 1.8 12.8 .5 2.4 5.0 14.4 3.5 1.8 13.0 .5 2.3 4.7 13.9 3.6 1.7 13.7 .5 2.2 4.6 11.6 3.6 1.6 14.3 .5 2.0 4.5 10.5 3.7 1.6 16.2 .4 1.9 4.8 9.5 3.6 1.7 15.5 .4 2.1 5.0 10.8 3.9 1.6 18.2 .4 2.2 5.1 10.6 4.0 1.6 16.5 .4 2.2 6.2 10.8 4.2 1.7 17.7 .5 2.5 2 G-10 countries and Switzerland 3 Belgium and Luxembourg 4 France 5 Germany 6 Italy 1 Netherlands 8 Sweden 9 Switzerland 10 United Kingdom 11 Canada 12 Japan 32 33 34 35 36 3/ 38 Latin America Argentina Brazil Chile Colombia Mexico Peru Other 39 40 41 42 43 44 45 46 4/ Asia China Peoples Republic of China Republic of China (Taiwan) India Israel Korea (South) Malaysia Philippines Thailand Other Asia 3 .3 3.7 2.1 1.2 6.1 1.6 4.5 1.1 .9 .3 4.5 3.1 .7 5.9 1.7 4.1 1.3 1.0 .2 4.0 3.6 .6 6.2 1.8 3.9 1.5 1.6 .2 3.5 3.3 .5 6.2 1.9 3.8 1.5 1.7 .4 3.6 3.5 .5 6.8 2.0 3.7 1.6 2.1 .6 4.1 3.0 .5 6.9 2.1 3.7 1.7 2.3 .4 4.1 2.8 .5 6.5 2.3 3.6 1.9 2.3 .3 4.1 3.0 .5 6.8 2.3 3.7 , 1.7 2.4 .3 4.8 3.6 .4 6.9 2.5 3.6 1.7 2.7 .3 4.6 3.8 .4 6.9 2.7 3.0 1.9 3.1 .3 5.0 3.6 .4 7.4 3.0 3.3 2.2 3.3 48 49 50 51 Africa Egypt Morocco Zaire Other Africa 3 .4 .9 .0 1.1 .4 .9 .0 1.0 .4 .9 .0 .8 .4 .8 .0 1.0 .4 .8 .0 .8 .4 .7 .0 .8 .4 .7 .0 .8 .4 .7 .0 .7 .3 .7 .0 .7 .5 .7 .0 .6 .3 .6 .0 .9 52 Eastern Europe 53 U.S.S.R 54 Yugoslavia 55 Other 3.6 .7 1.8 1.1 3.5 .7 1.6 1.3 2.7 .4 1.3 1.1 2.3 .2 1.2 .9 2.1 .3 1.0 .8 2.1 .4 1.0 .7 1.8 .4 .8 .7 2.4 .9 .9 .7 2.9 1.4 .8 .6 3.0 1.7 .7 .6 3.1 1.8 .7 .7 56 Offshore banking centers il Bahamas 58 Bermuda 59 Cayman Islands and other British West Indies 60 Netherlands Antilles 61 Panama 4 62 Lebanon 63 Hong Kong 64 Singapore 65 Other 44.2 11.0 .9 12.9 1.0 2.5 .1 9.6 6.1 .0 36.6 5.5 1.7 9.0 2.3 1.4 .1 9.7 7.0 .0 42.6 8.9 4.5 9.3 2.2 1.5 .1 8.7 7.5 .0 42.5 2.8 4.4 11.5 7.9 1.4 .1 7.7 6.6 .0 50.1 8.4 4.4 14.1 1.1 1.5 .1 11.6 8.9 .0 48.3 6.8 4.2 14.9 1.4 1.3 .1 12.4 7.2 .0 52.4 6.7 7.1 13.8 3.5 1.3 .1 12.1 7.7 .0 51.9 12.0 2.2 15.9 1.2 1.3 .1 12.2 7.1 .0 58.5 14.1 3.9 17.4 1.0 1.3 .1 12.2 8.5 .0 56.9 12.1 5.1 18,0 .8 1.4 .1 13.0 6.4 .0 49.5 7.5 3.8 15.4 .7 1.6 1 12.9 7.4 .0 66 Miscellaneous and unallocated 6 22.6 30.3 38.1 39.8 36.4 39.9 44.6 48.2 48.0 49.1 38.3 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). Since June 1984, reported claims held by foreign branches have been reduced by an increase in the reporting threshold for "shell" branches from $50 million to $150 million equivalent in total assets, the threshold now applicable to all reporting branches. 2. Organization of Petroleum Exporting Countries, shown individually; other members of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates); and Bahrain and Oman (not formally members of OPEC). 3. Excludes Liberia. 4. Includes Canal Zone beginning December 1979. 5. Foreign branch claims only. 6. Includes New Zealand, Liberia, and international and regional organizations. Nonbank-Reported 3.22 Data A63 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States 1 Millions of dollars, end of period 1992 1991 Type and area or country 1988 1989 1990 Mar. June Sept. Dec. Mar. June 1 Total 32,952 38,764 44,988 41,787 40,472 41,916 41,505 43,495 44,215" 2 Payable in dollars 3 Payable in foreign currencies 27,335 5,617 33,973 4,791 39,791 5,197 37,211 4,576 36,003 4,469 37,210 4,706 36,225 5,280 38,174 5,321 37,522" 6,693 By type 4 Financial liabilities 5 Payable in dollars Payable in foreign currencies 6 14,507 10,608 3,900 17,879 14,035 3,844 20,010 15,984 4,026 18,606 15,266 3,340 18,260 14,947 3,313 20,350 16,675 3,675 20,242 16,242 4,000 21,664 17,566 4,098 22,043" 16,799" 5,244 18,445 6,505 11,940 16,727 1,717 20,885 8,070 12,815 19,938 947 24,977 10,683 14,294 23,807 1,170 23,181 8,793 14,388 21,945 1,236 22,212 8,569 13,644 21,056 1,157 21,566 8,313 13,253 20,535 1,031 21,263 8,310 12,953 19,983 1,280 21,831 8,914 12,917 20,608 1,223 22,172 9,500 12,672 20,723 1,449 9,962 289 359 699 880 1,033 6,533 11,660 340 258 464 941 541 8,818 10,346 394 700 621 1,081 516 6,395 9,559 335 632 561 1,036 517 5,810 9,634 355 556 658 1,026 484 5,932 11,403 397 1,747 652 1,050 468 6,521 10,814 217 1,593 649 1,056 360 6,294 12,071 174 1,997 636 1,025 355 6,977 13,091" 194 2,324 836 979 490" 7,392" 7 Commercial liabilities 8 Trade payables 9 Advance receipts and other liabilities 10 Payable in dollars 11 Payable in foreign currencies 12 13 14 15 16 17 18 By area or country Financial liabilities Europe Belgium and Luxembourg France Germany Netherlands Switzerland United Kingdom 19 Canada 388 610 229 278 293 305 267 283 20 21 22 23 24 25 26 Latin America and Caribbean Bahamas Bermuda Brazil British West Indies Mexico Venezuela 839 184 0 0 645 1 0 1,357 157 17 0 724 6 0 4,153 371 0 0 3,160 5 4 4,255 392 0 0 3,293 6 4 3,808 375 12 0 2,816 6 4 3,883 314 0 6 2,961 6 4 4,307 537 114 6 3,047 7 4 4,047 396 114 8 2,915 7 4 3,308" 343 114 10 2,167" 8 4 27 28 29 Asia Japan Middle East oil-exporting countries 3,312 2,563 3 4,151 3,299 2 4,872 3,637 5 4,510 3,432 1 4,515 3,339 4 4,755 3,605 19 4,796 3,557 13 5,168 3,906 13 5,218 4,122 10 30 Africa 2 0 2 0 2 0 2 0 9 7 3 2 6 4 7 6 0 0 4 100 409 2 2 1 52 88 89 7,319 158 455 1,699 587 417 2,079 9,071 175 877 1,392 710 693 2,620 10,310 275 1,218 1,270 844 775 2,792 9,666 261 1,203 1,383 729 661 2,755 8,607 245 1,185 1,040 729 580 2,289 8,084 225 992 911 751 492 2,217 7,808 248 830 944 709 488 2,310 7,491 256 671 878 574 482 2,444 7,131 240 659 691 605 400 2,404 1,217 1,124 1,261 1,251 1,208 1,011 990 1,094 1,077 1,672 12 538 145 30 475 130 1,589 14 494 216 35 343 129 1,619 5 504 180 49 358 119 1,512 14 450 211 46 291 102 1,352 3 310 219 107 304 94 1,701 13 493 230 108 375 168 1,803 8 409 212 73 475 279 31 32 33 34 35 36 37 38 39 40 Oil-exporting countries 3 All other 4 Commercial liabilities Europe Belgium and Luxembourg France Germany Netherlands Switzerland United Kingdom Canada 337 41 42 43 44 45 46 47 Latin America and Caribbean Bahamas Bermuda Brazil British West Indies Mexico Venezuela 1,090 49 286 95 34 217 114 1,224 41 308 100 27 323 164 48 49 50 Asia Japan Middle Eastern oil-exporting countries • 6,915 3,094 1,385 7,550 2,914 1,632 9,483 3,651 2,016 8,595 3,423 1,543 8,752 3,411 1,657 8,855 3,363 1,780 9,330 3,720 1,498 9,889 3,548 1,591 10,436 3,534 1,778 51 52 Africa Oil-exporting countries 576 202 886 339 844 422 617 211 596 226 836 357 713 327 644 253 775 389 53 Other 4 1,328 1,030 1,406 1,464 1,431 1,268 1,070 1,012 950 1. For a description of the changes in the international statistics tables, see Federal Reserve Bulletin, vol. 65, (July 1979), p. 550. 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). 3. Comprises Algeria, Gabon, Libya, and Nigeria. 4. Includes nonmonetary international and regional organizations. 5. Revisions include a reclassification of transactions, which also affects the totals for Asia and the grand totals. A64 3.23 International Statistics • February 1993 CLAIMS ON UNAFFILIATED FOREIGNERS the United States 1 Reported by Nonbanking Business Enterprises in Millions of dollars, end of period 1991 Type, and area or country 1989 1992 1990 Mar. June Sept. Dec. Mar. June 1 Total 33,805 33,173 35,365 35,578 37,124 38,345 42,386 41,746 41,659r 2 Payable in dollars 3 Payable in foreign currencies 31,425 2,381 30,773 2,400 32,777 2,589 33,279 2,299 35,037 2,087 35,982 2,363 39,829 2,557 39,135 2,611 38,693r 2,966r By type 4 Financial claims Deposits 5 6 Payable in dollars 7 Payable in foreign currencies Other financial claims 8 9 Payable in dollars 10 Payable in foreign currencies 21,640 15,643 14,544 1,099 5,997 5,220 777 19,297 12,353 11,364 989 6,944 6,190 754 19,891 13,727 12,552 1,175 6,164 5,297 866 19,746 13,115 12,052 1,063 6,631 5,960 671 20,904 12,576 11,758 817 8,328 7,656 673 22,566 16,227 15,182 1,045 6,339 5,641 698 25,320 17,177 16,253 924 8,143 7,322 821 25,029 16,819 15,626 1,193 8,210 7,521 689 24,606r 15,138r 13,795r l,343 r 9,468 r 8,799r 669r 11 Commercial claims 12 Trade receivables 13 Advance payments and other claims 14 Payable in dollars 15 Payable in foreign currencies 12,166 11,091 1,075 11,660 505 13,876 12,253 1,624 13,219 657 15,475 13,657 1,817 14,927 548 15,832 13,843 1,989 15,266 566 16,220 14,120 2,100 15,623 597 15,779 13,429 2,350 15,159 620 17,066 14,389 2,677 16,254 812 16,717 14,168 2,549 15,988 729 17,053 14,594 2,459 16,099 954 10,278 18 203 120 348 217 9,039 8,463 28 153 152 238 153 7,4% 9,651 76 371 367 265 357 7,971 10,640 86 208 312 380 422 9,016 11,875 74 271 298 429 433 10,222 13,131 76 255 434 420 580 10,997 13,523 13 312 342 385 591 11,226 14,083 12 277 290 727 682 11,507 13,173r 25 786 381 732 779 8,739* 16 17 18 19 20 21 22 By area or country Financial claims Europe Belgium and Luxembourg France Germany Netherlands Switzerland United Kingdom 23 Canada 2,325 1,904 2,934 1,929 2,017 2,172 2,674 2,744 2,534 r 24 25 26 27 28 29 30 Latin America and Caribbean Bahamas Bermuda Brazil British West Indies Mexico Venezuela 8,160 1,846 19 47 5,763 151 21 8,020 1,890 7 224 5,486 94 20 6,201 1,090 3 68 4,635 177 25 6,278 825 6 68 4,949 179 28 5,926 457 4 127 4,957 161 29 6,289 652 19 137 5,106 176 32 7,793 758 8 192 6,300 321 40 6,836 400 12 191 5,748 318 34 7,260r 523 12 181 6,018r 343 32 31 32 33 Asia Japan Middle East oil-exporting countries 2 .. 623 354 5 590 213 8 860 523 8 568 246 11 747 398 4 619 277 3 %2 385 5 1,009 423 3 1,280 712 4 34 Africa 106 10 140 12 37 0 62 3 64 1 61 1 57 1 60 0 57 0 148 180 207 269 275 294 311 297 302 5,181 189 672 669 212 344 1,324 6,209 242 964 6% 479 313 1,575 7,044 212 1,240 807 555 301 1,775 7,060 227 1,273 874 604 325 1,639 7,464 220 1,402 958 707 2% 1,817 6,884 190 1,330 858 641 258 1,807 7,865 192 1,539 934 643 295 2,078 7,809 181 1,552 929 645 327 2,069 8,027 252 1,551 905 661 399 2,160 35 36 37 38 39 40 41 42 43 44 Oil-exporting countries 3 All other 4 Commercial claims Europe Belgium and Luxembourg France Germany Netherlands Switzerland United Kingdom Canada 983 1,091 1,074 1,213 1,241 1,232 1,169 1,167 1,122 45 46 47 48 49 50 51 Latin America and Caribbean Bahamas Bermuda Brazil British West Indies Mexico Venezuela 2,241 36 230 299 22 461 227 2,184 58 323 297 36 508 147 2,375 14 246 326 40 661 192 2,334 15 231 327 49 653 181 2,433 16 247 309 43 710 195 2,494 8 255 385 37 741 1% 2,590 11 263 418 41 828 202 2,564 11 272 361 45 889 206 2,636 9 291 431 32 847 248 52 53 54 Asia Japan Middle Eastern oil-exporting countries' 2,993 946 453 3,570 1,199 518 4,127 1,460 460 4,357 1,816 498 4,201 1,645 501 4,282 1,808 4% 4,552 1,861 622 4,326 1,770 636 4,433 1,778 606 55 56 Africa Oil-exporting countries 3 435 122 429 108 488 67 394 68 428 63 431 80 418 95 417 75 419 70 333 393 367 474 454 456 472 434 416 57 Other 4 1. For a description of the changes in the international statistics tables, see Federal Reserve Bulletin, vol. 65, (July 1979), p. 550. 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). 3. Comprises Algeria, Gabon, Libya, and Nigeria. 4. Includes nonmonetary international and regional organizations. Securities Holdings and Transactions 3.24 A65 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1992 Transaction and area or country 1990 1991 Jan.Oct. Apr. May June July Aug. Sept. r Oct." 18,547 18,764 13,174 14,838 13,884 17,024 18,697 18,042 U.S. corporate securities STOCKS 1 Foreign purchases 2 Foreign sales 173,293 188,419 211,204 200,116 180,615 189,364 17,536 18,034 18,664 18,602 3 Net purchases or sales (—) -15,126 11,088 -8,749 -498 62 -1,012 -217 -1,664 -3,140 655 4 Foreign countries -15,197 10,520 -8,755 -531 27 -1,170 -234 -1,619 -3,049 658 -8,479 -1,234 -367 -397 -2,866 -2,980 886 -1,330 -2,435 -3,477 -2,891 -63 -298 50 9 -63 -227 -131 -354 3,845 2,177 -134 4,255 1,179 153 174 -6,816 -1,127 -266 -484 -38 -4,357 1,188 1,142 66 -4,422 -4,022 34 53 -730 -217 -48 -38 90 -334 412 45 -95 -158 -318 -1 -4 278 -121 149 76 122 -11 230 43 85 -557 -401 20 -72 -1,184 -148 -4 -217 -10 -691 74 -109 51 141 35 -1 -142 -964 10 -14 -14 -55 -741 131 -24 4 373 174 -7 253 -1,089 -46 -26 -54 -150 -652 -59 -24 -11 -442 -301 -1 7 -1,675 -234 -105 -107 -189 -868 -278 -90 136 -1,062 -96 14 -94 62 -92 -52 -42 -124 365 -226 239 -55 779 192 -22 -119 71 568 6 33 35 158 17 -45 -91 -3 118,764 102,047 153,096 125,634 176,593 142,821 16,722 11,666 17,539 13,222 16,691 12,407 18,343 16,311 19,785r 16,620 17,180 14,465 18,433 14,591 21 Net purchases or sales (—) 16,717 27,462 33,772 5,056 4,317 4,284 2,032 3,165r 2,715 3,842 22 Foreign countries 17,187 27,592 33,363 4,861 4,388 4,205 2,153 3,150" 2,580 3,793 23 24 25 26 27 28 29 30 31 32 33 34 35 10,079 373 -377 172 284 10,383 1,906 4,328 3 1,120 727 96 -344 13,115 847 1,577 482 656 8,933 1,623 2,672 1,787 8,459 5,767 52 -116 16,110 1,019 1,760 339 -358 11,884 -7 7,823 2,332 7,145 -488 56 -96 2,003 363 391 -122 -393 1,543 87 572 338 1,778 687 19 64 1,920 -45 67 123 -40 1,496 -68 1,022 455 1,088 324 6 -35 1,420 364 11 64 -53 847 -111 619 376 1,904 740 -6 3 1,029 161 -37 177 -13 760 67 676 239 231 -710 22 -111 l,516r -5 -13 22 -94 l,447 r -100 878 284 593r — 1,229" 1 -22 1,825 161 387 58 -51 1,320 48 548 -5 171 -590 -7 0 1,481 -2 -33 133 -23 1,067 198 885 314 967 470 -50 -2 -471 -131 409 195 -71 79 -121 135 49 5 6 7 8 9 10 11 12 13 14 15 16 17 Europe France Germany Netherlands Switzerland United Kingdom Canada Latin America and Caribbean Middle East' Other Asia Japan Africa Other countries 18 Nonmonetary international and regional organizations 16,525 17,537 BONDS 2 19 Foreign purchases 20 Foreign sales Europe France Germany Netherlands Switzerland United Kingdom Canada Latin America and Caribbean Middle East' Other Asia Japan Africa Other countries 36 Nonmonetary international and regional organizations 15 Foreign securities 37 Stocks, net purchases or sales ( - ) 38 Foreign purchases 39 Foreign sales 40 Bonds, net purchases or sales ( - ) 41 Foreign purchases 42 Foreign sales -9,205 122,641 131,846 -22,412 314,645 337,057 -31,967 120,598 152,565 -14,828 330,311 345,139 -23,968 125,208 149,176 -16,808 413,540 430,348 -2,295 11,336 13,631 -1,318 30,421 31,739 -913 13,871 14,784 -2,767 33,109 35,876 72 14,604 14,532 -1,626 40,145 41,771 -3,241 13,485 16,726 -4,747 43,226 47,973 -2,921 r 9,759" 12,680" 275" 45,929" 45,654" -2,849 13,647 16,4% -1,781 52,298 54,079 -4,144 12,424 16,568 -3,389 65,608 68,997 43 Net purchases or sales ( - ) , of stocks and bonds -31,617 -46,795 -40,776 -3,613 -3,680 -1,554 -7,988 —2,646" -4,630 -7,533 44 Foreign countries -28,943 -46,711 -44,085 -4,768 -3,706 -1,938 -8,847 -2,733" -4,651 -7,560 -8,443 -7,502 -8,854 -3,828 -137 -180 -34,452 -7,004 759 -7,350 -9 1,345 -29,374 -5,955 -1,607 -6,374 -87 -688 -2,972 -904 -845 122 9 -178 -163 -710 -1,278 -1,235 -99 -221 -1,437 -852 -556 372 7 528 -5,790 -2,212 1,622 -2,459 14 -22 -1,207" 207" -430" -1,375 11 61" -3,273 -142 82 -1,659 -13 354 -7,166 -975 387 784 -2 -588 -2,673 -84 3,309 1,155 26 384 859 21 27 45 46 47 48 49 50 Europe Canada Latin America and Caribbean Africa Other countries 51 Nonmonetary international and regional organizations 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). 2. Includes state and local government securities and securities of U.S. government agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. corporations organized to finance direct investments abroad. 87 3. In a July 1989 merger, the former stockholders of a U.S. company received $5,453 million in shares of the new combined U.K. company. This transaction is not reflected in the data. A66 3.25 International Statistics • February 1993 MARKETABLE U.S. TREASURY BONDS A N D NOTES Foreign Transactions Millions of dollars 1992 Country or area 1990 1991 Jan.Oct. Apr. May June July Aug. Sept. Oct." Transactions, net purchases or sales ( - ) during period1 1 Estimated total2 2 Foreign countries 2 3 Europe 2 4 Belgium ^nd Luxembourg 5 Germany" 6 Netherlands 7 Sweden 8 Switzerland2 9 United Kingdom 10 Other Western Europe 11 Eastern Europe 12 Canada 13 14 15 16 17 18 19 20 Latin America and Caribbean Venezuela Other Latin America and Caribbean Netherlands Antilles Asia Japan Africa Other 21 Nonmonetary international and regional organizations 22 International 23 Latin American regional 18,927 19,865 21,732 6,558 -7,924 14,448 -1,862 6,458r —6,042r 3,658 18,764 19,687 20,570 7,579 -6,945 11,758 -2,286 6,785r -6,251 4,465 18,455 10 5,880 1,077 1,152 112 -1,259 11,463 13 -4,627 8,663 523 -4,725 -3,735 -663 1,007 6,218 10,024 13 -3,019 9,258 1,640 2,762 -3,946 -1,128 -952 14,196 -3,746 432 1,748 3,207 21 441 -219 -123 10 2,820 257 0 185 -7,302 289 329 -338 -3 -579 -5,867 -1,099 -34 2,627 3,828 -49 824 227 372 3 1,664 587 200 47 -2,445 331 -829 -1,046 -26 -703 212 -581 197 2,520 3,450" 80 255 367 -1,289 -87 3,681r 428 15 900 -4,703 -25 900 -239 -843 292 -32 -4,761 5 -4,281 4,777 229 -8 -40 202 769 4,170 -544 -1 458 14,734 33 3,943 10,757 -10,952 -14,785 313 842 10,285 10 4,179 6,097 3,367 -4,081 689 -298 -6,057 501 -4,835 -1,723 18,445 4,179 984 -3,808 2,780 -124 3,723 -819 1,363 657 193 -149 -320 -196 -2,472 2,348 -2,406 1,085 40 416 3,589 -149 1,795 1,943 4,129 1,638 92 73 -2,869 216 -589 -2,4% 1,783 2,221 149 -1,424 -1,563 60 -758 -865 4,112r l,887 r 56 -170 -1,479 31 -2,537 1,027 4,005 2,448 59 148 -2,002 155 -3,315 1,158 1,522 -393 -37 -253 163 287 -2 178 -358 -72 1,162 980 465 -1,021 -762 74 -979 -747 -4 2,690 2,421 127 424 365 -68 18,764 23,218 -4,453 19,687 1,190 18,496 20,570 8,133 12,437 7,579 1,712 5,867 -6,945 -2,685 -4,260 11,758 5,294 6,464 -2,286 -767 -1,519 6,785r 697 6,088r -6,251 -4,483 -1,768 4,465 3,000 1,465 -387 0 -6,822 239 3,607 11 556 15 -3,061 0 947 -56 856 0 1,093 0 750 4 -69 0 -327 r — 133r —75 209" -31" 201 -807 -903 217 MEMO 24 Foreign countries" 25 Official institutions 26 Other foreign Oil-exportins countries 27 Middle East 3 28 Africa4 1. Official and private transactions in marketable U.S. Treasury securities having an original maturity of more than one year. Data are based on monthly transactions reports. Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign countries. 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). 3. Comprises Algeria, Gabon, Libya, and Nigeria. Interest and Exchange Rates 3.26 A67 D I S C O U N T RATES OF FOREIGN C E N T R A L B A N K S 1 Percent per year Rate on Dec. 31, 1992 Rate on Dec. 31, 1992 Percent Austria.. Belgium . Canada.. Denmark France .. 8.0 7.75 7.36 9.5 9.0 Country Month effective Oct. Oct. Dec. Dec. Dec. 1992 1992 1992 1991 1992 Percent 8.25 Germany... Italy Japan Netherlands 12.0 3.25 7.75 1. Rates shown are mainly those at which the central bank either discounts or makes advances against eligible commercial paper or government securities for commercial banks or brokers. For countries with more than one rate applicable to such discounts or advances, the rate shown is the one at which it is understood that the central bank transacts the largest proportion of its credit operations. 3.27 Rate on Dec. 31, 1992 Country Country Month effective Month effective Sept. 1992 Dec. 1992 July 1992 Oct. 1992 Norway Switzerland United Kingdom 17.0 6.0 12.0 Nov. 1992 Sept. 1992 Sept. 1992 2. Since Feb. 1981, the rate has been that at which the Bank of France discounts Treasury bills for seven to ten days. FOREIGN SHORT-TERM INTEREST RATES 1 Averages of daily figures, percent per year 1992 Type or country 1 "> 3 4 5 6 7 8 Italy 9 10 1990 8.16 14.73 13.00 8.41 8.71 8.57 10.20 12.11 9.70 7.75 1991 5.86 11.47 9.07 9.15 8.01 9.19 9.49 12.04 9.30 7.33 1992 3.71 9.57 6.76 9.42 7.68 9.26 10.14 13.91 9.31 4.39 1. Rates are for three-month interbank loans, with the following exceptions: Canada, finance company paper; Belgium, three-month Treasury bills; and Japan, CD rate. June July Aug. Sept. Oct. Nov. Dec. 3.87 9.94 6.03 9.66 9.04 9.45 9.98 13.38 9.50 4.60 3.40 10.10 5.58 9.69 8.67 9.50 10.11 15.54 9.54 4.32 3.33 10.27 5.15 9.79 8.09 9.73 10.27 15.27 9.71 3.87 3.15 9.86 5.33 9.37 7.20 9.23 10.51 17.54 9.44 3.89 3.30 8.23 7.57 8.85 6.28 8.63 10.82 15.52 8.70 3.85 3.67 7.16 7.63 8.84 6.44 8.66 9.58 14.38 8.64 3.77 3.51 7.12 7.96 8.93 6.16 8.57 10.74 13.65 8.65 3.76 A68 3.28 International Statistics • February 1993 FOREIGN EXCHANGE RATES 1 Currency units per dollar except as noted 1992 Country/currency unit 1990 1991 1992 July 1 2 3 4 5 6 7 8 9 10 Australia/dollar^ Austria/schilling Belgium/franc Canada/dollar China, P.R./yuan Denmark/krone Finland/markka France/franc Germany/deutsche mark Greece/drachma 11 12 13 14 15 16 17 18 19 20 Hong Kong/dollar India/rupee Ireland/pound Italy/lira Japan/yen Malaysia/ringgit Netherlands/guilder New Zealand/dollar 2 Norway/krone Portugal/escudo 21 22 23 24 25 26 27 28 29 30 Singapore/dollar South Africa/rand South Korea/won Spain/peseta Sri Lanka/rupee Sweden/krona Switzerland/franc Taiwan/dollar Thailand/baht United Kingdom/pound Aug. Sept. Oct. Nov. Dec. 78.069 11.331 33.424 1.1668 4.7921 6.1899 3.8300 5.4467 1.6166 158.59 77.872 11.686 34.195 1.1460 5.3337 6.4038 4.0521 5.6468 1.6610 182.63 73.540 10.990 32.143 1.2083 5.5195 6.0363 4.4835 5.2926 1.5616 190.71 74.507 10.500 30.717 1.1924 5.4564 5.7409 4.0803 5.0321 1.4914 182.89 72.479 10.199 29.824 1.1907 5.4417 5.5851 3.9773 4.9119 1.4475 179.12 72.255 10.214 29.917 1.2225 5.5048 5.6203 4.4764 4.9378 1.4514 182.70 71.481 10.436 30.581 1.2453 5.5486 5.7278 4.7096 5.0370 1.4851 192.50 68.984 11.168 32.661 1.2674 5.6134 6.1166 5.0615 5.3706 1.5875 206.48 68.974 11.130 32.545 1.2725 5.8106 6.1206 5.1444 5.3974 1.5822 209.48 7.7899 17.492 165.76 1,198.27 145.00 2.7057 1.8215 59.619 6.2541 142.70 7.7712 22.712 161.39 1,241.28 134.59 2.7503 1.8720 57.832 6.4912 144.77 7.7402 28.152 170.45 1,231.20 126.79 2.5460 1.7584 53.802 6.2112 135.02 7.7341 28.564 178.76 1,129.83 125.88 2.4999 1.6819 54.609 5.8581 126.24 7.7318 28.464 183.26 1,100.00 126.23 2.4977 1.6322 54.057 5.7120 124.98 7.7298 28.476 181.90 1,176.21 122.60 2.5029 1.6348 54.112 5.8116 127.86 7.7298 28.477 177.19 1,309.64 121.17 2.5044 1.6717 53.943 6.0562 132.33 7.7348 28.474 166.17 1,364.45 123.88 2.5227 1.7862 51.9% 6.4714 141.71 7.7416 28.979 166.71 1,412.38 124.04 2.5710 1.7788 51.570 6.6804 142.05 1.8134 2.5885 710.64 101.96 40.078 5.9231 1.3901 26.918 25.609 178.41 1.7283 2.7633 736.73 104.01 41.200 6.0521 1.4356 26.759 25.528 176.74 1.6293 2.8516 784.55 102.33 43.994 5.8208 1.4061 25.159 25.410 176.73 1.6142 2.7577 789.93 94.88 44.014 5.4084 1.3347 24.783 25.293 191.77 1.6077 2.7629 792.56 93.05 44.050 5.2745 1.2966 25.120 25.265 194.34 1.5988 2.8037 788.76 98.19 44.159 5.3685 1.2780 25.227 25.209 184.65 1.6081 2.8923 786.79 105.74 44.276 5.6006 1.3176 25.278 25.253 165.29 1.6338 2.9959 787.09 113.83 44.404 6.2528 1.4291 25.405 25.462 152.68 1.6397 3.0140 791.75 112.95 45.046 6.8903 1.4219 25.452 25.488 155.10 89.09 89.84 86.58 82.57 80.97 81.98 85.03 90.04 90.50 MEMO 31 United States/dollar 3 1. Averages of certified noon buying rates in New York for cable transfers. Data in this table also appear in the Board's G.5 (405) monthly statistical release. For ordering address, see inside front cover. 2. Value in U.S. cents. 3. Index of weighted-average exchange value of U.S. dollar against the currencies of ten industrial countries. The weight for each of the ten countries is the 1972-76 average world trade of that country divided by the average world trade of all ten countries combined. Series revised as of August 1978 (see Federal Reserve Bulletin, vol. 64, August 1978, p. 700). A69 Guide to Statistical Releases and Special Tables STATISTICAL RELEASES—List Published Semiannually, with Latest BULLETIN Reference Issue December 1992 Anticipated schedule of release dates for periodic releases SPECIAL TABLES—Quarterly Data Published Irregularly, with Latest BULLETIN Page A78 Reference Title and Date Issue Page Assets and liabilities of commercial banks December 31, 1991 March 31, 1992 June 30, 1992 September 30, 1992 May August November February 1992 1992 1992 1993 A70 A70 A70 A70 Terms of lending at commercial banks February 1992 May 1992 August 1992 November 1992 September September November February 1992 1992 1992 1993 A74 A78 A76 A76 Assets and liabilities of U.S. branches and agencies of foreign banks December 31, 1991 March 31, 1992 June 30, 1992 September 30, 1992 May September November February 1992 1992 1992 1993 A76 A82 A80 A80 Pro forma balance sheet and income statements for priced service operations June 30, 1991 September 30, 1991 March 30, 1992 June 30, 1992 November January August October 1991 1992 1992 1992 A80 A70 A80 A70 Assets and liabilities of life insurance companies June 30, 1991 September 30, 1991 December 31, 1991 December 1991 May 1992 August 1992 A79 A81 A83 Special tables follow. A70 4.20 Special Tables • February 1993 DOMESTIC A N D FOREIGN OFFICES Insured Commercial Bank Assets and Liabilities 1 Consolidated Report of Condition, September 30, 1992 Millions of dollars except as noted Banks with foreign offices 2 Banks with domestic offices only Total Item 1 Total assets4 2 Cash and balances due from depository institutions 3 Cash items in process of collection, unposted debits, and currency and coin 4 Cash items in process of collection and unposted debits Currency and coin 5 6 Balances due from depository institutions in the United States 7 Balances due from banks in foreign countries and foreign central banks Balances due from Federal Reserve Banks 8 Total Foreign Domestic Over 100 Under 100 3,460,013 1,916,854 448,717 1,551,633 1,185,437 357,723 264,387 182,463 75,014 n.a. n.a. 26,341 66,177 14,931 81,399 1,885 n.a. n.a. 17,723 61,536 255 101,064 73,128 57,106 16,023 8,619 4,641 14,676 61,930 33,306 21,590 11,716 16,234 2,045 10,345 19,994 4 T 1 n.a. 1 • 4 T 1 n.a. i • MEMO 9 Non-interest-bearing balances due from commercial banks in the United States (included in balances due from depository institutions in the United States) n.a. n.a. 2,873,676 1,487,255 n.a. 751,484 311,315 n.a. 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 All other 17 Securities issued by states and political subdivisions in the United States 18 Other domestic debt securities 19 All holdings of private certificates of participation in pools of residential mortgages 20 All other domestic debt securities 21 Foreign debt securities 22 Equity securities 23 Marketable 24 Investments in mutual funds 25 Other 26 LESS: Net unrealized loss 27 Other equity securities 29,550 12,943 7,946 1,063,329 323,092 281,765 319,798 120,371 %,449 n.a. n.a. 6,229 n.a. 585,665 n.a. n.a. 232,892 87,038 145,854 4,063 2,559 1,504 228,829 84,479 144,350 256,324 108,697 147,627 154,346 n.a. 71,574 n.a. 75,618 70,236 21,071 26,628 1,198 306 577 285 74,420 69,930 20,493 26,343 58,899 88,728 34,501 23,574 19,829 n.a. 16,002 n.a. 3,255 53,355 n.a. 12,524 6,183 4,335 1,907 59 6,341 1,796 24,832 24,776 5,947 2,143 1,295 851 3 3,805 0 285 23,395 1,230 340 30 310 0 890 1,796 24,547 1,381 4,718 1,803 1,264 542 3 2,915 1,309 22,264 335 5,065 2,945 2,072 902 29 2,120 150 6,259 n.a. 1,511 1,096 968 154 26 415 151,704 125,870 25,834 2,034,805 9,175 2,025,630 54,831 311 1,970,488 80,158 59,218 20,940 1,135,3% 3,519 1,131,877 35,785 311 1,095,782 348 n.a. n.a. 212,997 1,130 211,867 n.a. n.a. n.a. 79,810 n.a. n.a. 922,399 2,389 920,010 n.a. n.a. n.a. 54,559 49,839 4,720 708,%7 4,223 704,744 15,771 0 688,972 16,987 16,813 174 190,442 1,433 189,009 3,275 0 185,734 860,259 397,656 23,058 39,742 n.a. n.a. n.a. • 30,222 10,746 714 18,763 16,309 728 29 15,552 374,599 51,472 2,153 202,379 38,867 163,513 12,168 106,426 13,913 10,017 685 3,211 359,592 29,458 7,195 193,203 31,253 161,950 12,649 117,087 9,370 8,675 374 321 103,011 6,251 10,553 56,759 3,151 53,608 2,156 27,292 150 n.a. n.a. n.a. 36,598 536,367 n.a. n.a. 1,835 n.a. n.a. 5,198 377,267 299,079 78,189 1,402 374 1,028 353 98,207 22,531 75,676 947 7 940 4,845 279,060 276,548 2,513 455 367 88 11,383 127,201 126,718 484 287 n.a. n.a. 20,017 31,899 n.a. n.a. 145 n.a. n.a. 378,755 129,681 249,074 171,613 65,450 106,163 21,654 n.a. n.a. 149,959 n.a. n.a. 174,%7 62,3% 112,571 32,175 1,835 30,340 59 Obligations (other than securities) of states and political subdivisions in the United States (includes nonrated industrial development obligations) 60 Taxable 61 Tax-exempt 62 All other loans 63 Loans to foreign governments and official institutions 64 Other loans 65 Loans for purchasing and carrying securities 66 All other loans 26,376 1,985 24,391 119,788 n.a. n.a. n.a. n.a. 14,325 1,409 12,916 109,106 24,385 84,721 n.a. n.a. 291 156 135 48,103 23,486 24,617 n.a. n.a. 14,035 1,253 12,782 61,003 900 60,104 15,492 44,611 10,732 528 10,204 9,409 79 9,330 2,033 7,297 1,318 48 1,270 1,273 n.a. n.a. n.a. n.a. 67 68 69 70 71 72 73 74 75 35,085 88,610 52,896 28,537 3,576 16,374 n.a. 14,507 117,450 28,606 86,668 28,464 18,033 3,078 16,003 n.a. 8,664 86,227 4,076 48,498 24,530 38,049 n.a. n.a. n.a. n.a. 51,994 n.a. n.a. 6,025 1,785 18,550 8,568 432 354 n.a. 5,427 25,061 454 157 5,882 1,936 67 17 n.a. 416 6,162 28 29 30 31 32 33 34 35 36 Federal funds sold and securities purchased under agreements to resell Federal funds sold 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 37 Loans secured by real estate 38 Construction and land development 39 Farmland 40 One- to four-family residential properties 41 Revolving, open-end loans, extended under lines of credit 42 All other loans 43 Multifamily (five or more) residential properties 44 Nonfarm nonresidential properties 45 Loans to depository institutions 46 Commercial banks in the United States 47 Other depository institutions in the United States 48 Banks in foreign countries 4 T 1 n.a. 1 1 t 49 50 51 52 53 54 55 56 Loans to finance agricultural production and other loans to farmers Commercial and industrial loans U.S. addressees (domicile) Non-U.S. addressees (domicile) Acceptances of other banks U.S. banks Foreign banks Loans to individuals for household, family, and other personal expenditures (includes purchased paper) 57 Credit cards and related plans 58 Other (includes single payment and installment) Lease financing receivables Assets held in trading accounts 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 Intangible assets Other assets j 4 T 1 n.a. 1 1 i T 1 n.a. 1 1 ? i T 1 n.a. 1 1 • Commercial Banks A71 4.20—Continued Banks with foreign offices 2 Banks with domestic offices only Total Total Foreign Domestic Over 100 Under 10C 76 Total liabilities, limited-life preferred stock and equity capital ,460,013 1,916,854 n.a. n.a. 1,185,437 357,723 77 Total liabilities5 78 Limited-life preferred stock ,204,377 7 1,791,578 0 448,711 n.a. 1,426,363 n.a. 1,089,031 5 323,768 2 79 Total deposits 80 Individuals, partnerships, and corporations 81 U.S. government 82 States and political subdivisions in the United States 83 Commercial banks in the United States 84 Other depository institutions in the United States 85 Banks in foreign countries 86 Foreign governments and official institutions 87 Certified and official checks 88 Allother 6 ,627,921 1,336,385 1 n.a. I n.a. I 301,866 188,954 i 1 n.a. I 19,621 10,782 n.a. 975,732 911,437 1,710 43,577 8,054 4,328 137 n.a. 6,429 n.a. 315,804 290,934 499 19,800 1,269 1,274 n.a. 20,824 19,197 n.a. 1,034,519 955,917 4,113 33,092 20,345 3,252 6,931 59 9,665 n.a. 89 Total transaction accounts 90 Individuals, partnerships, and corporations 91 U.S. government 92 States and political subdivisions in the United States 93 Commercial banks in the United States 94 Other depository institutions in the United States 95 Banks in foreign countries % Foreign governments and official institutions 97 Certified and official checks 98 All other 349,225 295,692 2,301 12,846 18,612 2,592 6,559 957 9,665 n.a. 278,846 247,889 1,458 15,666 6,013 1,254 127 11 6,429 n.a. 87,677 77,513 400 6,989 608 164 n.a. n.a. 1,985 18 99 Demand deposits (included in total transaction accounts) 100 Individuals, partnerships, and corporations 101 U.S. government 102 States and political subdivisions in the United States 103 Commercial banks in the United States 104 Other depository institutions in the United States 105 Banks in foreign countries 106 Foreign governments and official institutions 107 Certified and official checks 108 All other 109 Total nontransaction accounts 110 Individuals, partnerships, and corporations 111 U.S. government 112 States and political subdivisions in the United States 113 Commercial banks in the United States 114 U.S. branches and agencies of foreign banks 115 Other commercial banks in the United States 116 Other depository institutions in the United States 117 Banks in foreign countries 118 Foreign branches of other U.S. banks 119 Other banks in foreign countries 120 Foreign governments and official institutions 121 All other 253,719 204,976 2,255 8,107 18,612 2,592 6,556 956 9,665 n.a. 685,295 660,225 1,811 20,246 1,733 104 1,629 660 372 53 319 247 n.a. 157,324 136,226 1,312 6,007 5,990 1,237 111 11 6,429 n.a. 696,886 663,548 252 27,911 2,041 124 1,917 3,074 10 6 4 49 n.a. 41,847 36,909 388 1,783 605 160 n.a. n.a. 1,985 17 228,126 213,422 99 12,811 661 n.a. n.a. 1,111 n.a. n.a. n.a. n.a. 24 122 123 124 125 126 127 128 129 130 131 Federal funds purchased and securities sold under agreements to repurchase — Federal funds purchased 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 All other liabilities Total equity capital 7 132 133 134 135 136 137 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 Money market deposit accounts (savings deposits; 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 AH negotiable order of withdrawal (NOW) accounts (including Super N O W s ) . . . Total time and savings deposits i 145 146 147 148 149 150 151 i \ 1,204 1,117 92,175 n.a. n.a. 249,032 163,473 85,559 n.a. 136,386 16,441 30,082 n.a. 110,472 255,629 181,121 124,427 56,694 n.a. 111,029 16,070 28,307 n.a. 91,196 125,275 418 n.a. n.a. n.a. 47,062 3,664 n.a. n.a. n.a. n.a. 180,704 n.a. n.a. 27,470 63,968 12,405 n.a. 31,502 n.a. n.a. 64,647 37,474 27,174 6,185 24,183 354 1,686 n.a. 16,242 96,401 3,264 1,572 1,692 387 1,173 17 89 n.a. 3,034 33,953 965 276 688 64,275 31,149 21,331 1,004 1,109 65,593 15,409 12,963 2,194 n.a. 18,470 615 577 507 20,327 235,231 117,949 210,792 102,902 18,421 94,736 780,800 10,769 173,043 121,242 310 89,226 3,168 119,542 818,408 71 40,101 37,090 121,670 28,262 1,003 44,485 273,957 895,924 695,298 186,387 14,407 10,564 n.a. 95,422 120,690 45,404 235,894 116,499 108,498 240,893 173,504 118,159 90,190 320,473 39,688 36,025 28,144 123,957 2,843 8,504 n a. n a. n a. Quarterly averages Total loans Obligations (other than securities) of states and political subdivisions in the United States Transaction accounts in domestic offices (NOW accounts, automated transfer service (ATS) accounts, and telephone and preauthorized transfer accounts) Nontransaction accounts in domestic offices Money market deposit accounts Other savings deposits Time certificates of deposit of $100,000 or more All other time deposits 152 Number of banks Footnotes appear at the end of table 4.22 1,985 41 n.a. MEMO 138 139 140 141 142 143 144 ! 11,562 215 n.a. n.a. A72 4.21 Special Tables • February 1993 DOMESTIC OFFICES, Insured Commercial Banks with Assets of $100 Million or more or with foreign offices 1 Consolidated Report of Condition, September 30, 1992 Millions of dollars except as noted Members Nonmembers Item 1 Total assets 4 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 Securities issued by states and political subdivisions in the United States 14 15 Other domestic debt securities 16 All holdings of private certificates of participation in pools of residential mortgages . . . 17 Allother 18 Foreign debt securities 19 Equity securities 20 Marketable 21 Investments in mutual funds 22 Other 23 LESS: Net unrealized loss 24 Other equity securities 25 Federal funds sold and securities purchased under agreements to resell 8 26 Federal funds sold 27 Securities purchased under agreements to resell 28 Total loans and lease financing receivables, gross 29 LESS: Unearned income on loans 30 Total loans and leases (net of unearned income) 31 32 33 34 35 36 37 38 39 40 41 42 Total loans, gross, by category Loans secured by real estate Construction and land development Farmland One- to four-family residential properties Revolving, open-end and extended under lines of credit All other loans Multifamily (five or more) residential properties Nonfarm nonresidential properties Commercial banks in the United States Other depository institutions in the United States Banks in foreign countries Finance agricultural production and other loans to farmers 43 Commercial and industrial loans 44 U.S. addressees (domicile) 45 Non-U.S. addressees (domicile) 46 Acceptances of other banks 9 47 U.S. banks 48 Foreign banks 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) 52 Loans to foreign governments and official institutions 53 Obligations (other than securities) of states and political subdivisions in the United States (includes nonrated industrial development obligations) 54 Taxable 55 Tax-exempt 56 Other loans 57 Loans for purchasing and carrying securities 58 All other loans 59 60 61 62 Lease financing receivables Customers' liability on acceptances outstanding Net due from own foreign offices, Edge and agreement subsidiaries, and IBFs Remaining assets Total National State 2,737,070 2,132,143 1,662,527 469,616 604,927 162,994 78,696 27,738 24,853 6,686 25,021 134,268 69,814 22,639 16,115 5,524 20,177 109,398 56,274 18,637 13,341 4,741 16,406 24,870 13,540 4,002 2,774 783 3,771 28,726 8,882 5,099 8,738 1,163 4,844 2,360,685 1,814,821 1,432,025 382,7% 545,864 601,563 193,176 291,977 454,882 142,177 227,925 343,612 110,276 172,607 111,270 31,901 55,318 146,681 50,998 64,052 133,319 158,658 54,995 49,917 3,105 46,812 1,716 9,783 4,747 3,337 1,443 33 5,036 107,870 120,055 39,458 37,589 2,586 35,003 1,144 6,589 2,246 1,630 629 13 4,343 84,699 87,908 28,450 25,916 2,241 23,674 1,070 5,294 1,843 1,374 480 11 3,451 23,170 32,147 11,008 11,673 345 11,328 74 1,295 403 256 149 2 893 25,449 38,603 15,537 12,328 519 11,809 572 3,193 2,501 1,707 814 20 692 134,369 49,839 4,720 1,631,365 6,612 1,624,754 107,615 31,262 3,719 1,256,933 4,609 1,252,324 81,345 27,273 3,049 1,010,422 3,354 1,007,068 26,270 3,989 670 246,511 1,254 245,256 26,754 18,577 1,001 374,433 2,003 372,430 734,190 80,930 9,349 395,582 70,120 325,462 24,817 223,513 18,692 1,059 3,532 16,228 548,898 61,692 5,638 300,760 53,653 247,107 17,241 163,567 13,808 898 3,241 10,824 450,850 51,362 4,797 247,183 44,034 203,148 13,782 133,726 10,402 817 1,455 9,711 98,048 10,330 842 53,577 9,619 43,959 3,459 29,841 3,406 82 1,786 1,113 185,292 19,238 3,710 94,822 16,467 78,355 7,576 59,946 4,885 160 290 5,404 406,262 403,265 2,9% 328,204 325,568 2,635 259,049 257,089 1,960 69,155 68,479 675 78,058 77,697 361 742 491 131 584 405 113 400 231 111 184 173 3 159 86 18 324,927 62,3% 112,571 978 239,741 43,380 69,723 946 197,798 40,238 56,781 808 41,943 3,142 12,942 138 85,186 19,016 42,848 32 24,767 1,781 22,986 69,434 17,525 51,908 20,183 1,485 18,698 64,200 16,172 48,027 14,864 1,228 13,636 43,642 9,054 34,588 5,319 257 5,062 20,557 7,118 13,439 4,583 2% 4,288 5,234 1,353 3,881 30,555 12,573 51,994 200,817 25,405 11,704 45,667 171,349 20,626 8,473 19,804 112,631 4,779 3,232 25,863 58,718 5,149 869 6,327 29,468 Commercial Banks A73 4.20—Continued Members Item Nonmembers Total Total National State 2,737,070 2,132,143 1,662,527 469,616 604,927 2,515,394 1,962,218 1,531,326 430,892 553,176 65 Total deposits 66 Individuals, partnerships, and corporations 67 U.S. government 68 States and political subdivisions in the United States 69 Commercial banks in the United States 70 Other depository institutions in the United States 71 Banks in foreign countries 72 Foreign governments and official institutions 73 Certified and official checks 2,010,251 1,867,354 5,823 76,669 28,400 7,580 7,068 1,263 16,095 1,543,738 1,431,672 5,106 56,050 25,334 4,990 6,618 1,179 12,790 1,237,575 1,150,181 4,398 45,610 19,821 3,765 4,008 791 9,002 306,163 281,491 709 10,440 5,513 1,225 2,609 388 3,788 466,513 435,682 717 20,620 3,066 2,590 450 84 3,305 74 Total transaction accounts 75 Individuals, partnerships, and corporations 76 U.S. government 77 States and political subdivisions in the United States 78 Commercial banks in the United States 79 Other depository institutions in the United States 80 Banks in foreign countries 81 Foreign governments and official institutions 82 Certified and official checks 628,071 543,581 3,759 28,512 24,625 3,846 6,686 967 16,095 498,736 427,049 3,110 22,452 22,867 3,170 6,373 924 12,790 397,866 343,185 2,582 18,251 18,058 2,347 3,841 600 9,002 100,870 83,864 528 4,200 4,810 824 2,532 323 3,788 129,335 116,532 649 6,060 1,757 675 313 44 3,305 83 Demand deposits (included in total transaction accounts) 84 Individuals, partnerships, and corporations 85 U.S. government 86 States and political subdivisions in the United States 87 Commercial banks in the United States 88 Other depository institutions in the United States 89 Banks in foreign countries 90 Foreign governments and official institutions 91 Certified and official checks 411,042 341,202 3,567 14,114 24,602 3,829 6,667 966 16,095 333,835 272,956 2,942 11,842 22,866 3,158 6,357 924 12,790 262,696 216,942 2,428 9,507 18,057 2,334 3,825 600 9,002 71,139 56,014 514 2,335 4,809 824 2,532 323 3,788 77,207 68,246 625 2,272 1,736 671 310 43 3,305 1,382,181 1,323,773 2,064 48,157 3,775 228 3,547 3,734 382 59 323 2% 1,045,003 1,004,623 1,996 33,598 2,466 86 2,380 1,819 244 58 186 256 839,710 806,996 1,816 27,358 1,763 76 1,687 1,418 167 56 112 191 205,293 197,627 181 6,239 703 11 692 401 77 2 75 65 337,178 319,150 68 14,560 1,308 141 1,167 1,915 137 1 137 40 104 Federal funds purchased and securities sold under agreements to repurchase 10 105 106 Securities sold under agreements to repurchase 107 Demand notes issued to the U.S. Treasury 108 109 Banks liability on acceptances executed and outstanding no Notes and debentures subordinated to deposits 111 Net due to own foreign offices, Edge and agreement subsidiaries, and IBFs 112 245,351 37,474 27,174 33,656 88,151 12,759 1,686 31,502 123,539 206,756 28,754 16,567 30,761 63,253 11,890 1,177 23,743 104,643 147,264 24,503 13,693 20,339 44,139 8,621 1,107 21,209 72,281 59,492 4,251 2,874 10,422 19,114 3,270 70 2,534 32,362 38,596 8,720 10,606 2,895 24,898 869 509 7,759 18,8% 113 Total equity capital7 221,675 169,925 131,200 38,724 51,751 1,797 129,868 46,558 34,294 3,198 550 100,059 33,820 24,611 1,701 550 80,867 28,030 20,753 1,528 0 19,192 5,790 3,858 173 1,247 29,809 12,738 9,683 1,498 63 Total liabilities and equity capital 3 64 Total liabilities 92 Total nontransaction accounts Individuals, partnerships, and corporations 93 94 U.S. government 95 States and political subdivisions in the United States 96 Commercial banks in the United States 97 U.S. branches and agencies of foreign banks 98 Other commercial banks in the United States 99 Other depository institutions in the United States 100 Banks in foreign countries 101 Foreign branches of other U.S. banks 102 Other banks in foreign countries 103 Foreign governments and official institutions MEMO 114 Holdings of commercial paper included in total loans, gross 115 Total individual retirement (IRA) and Keogh plan accounts 116 Total brokered deposits 117 Total brokered retail deposits 118 Issued in denominations of $100,000 or less 119 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 120 Money 121 12? 173 124 125 126 market deposit accounts (savings deposits; MMDAs) Other savings accounts 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 negotiable order of withdrawal (NOW) accounts (including Super NOWs) Total time and savings deposits Quarterly averages 177 128 Obligations (other than securities) of states and political subdivisions in the United States 179 Transaction accounts (NOW accounts, automated transfer service (ATS) accounts, and telephone preauthorized transfer accounts) Nontransaction accounts 130 131 137 133 Time certificates of deposits of $100,000 or more 134 Footnotes appear at the end of table 4.22 31,095 22,910 19,225 3,685 8,186 408,274 239,191 520,999 192,128 21,589 214,278 1,599,209 323,581 181,711 384,870 137,588 17,252 163,248 1,209,903 259,670 135,169 317,134 116,514 11,223 133,824 974,880 63,911 46,543 67,736 21,074 6,029 29,424 235,024 84,693 57,480 136,129 54,539 4,337 51,030 389,306 1,591,222 24,971 1,227,058 20,429 989,555 14,947 237,503 5,482 364,164 4,542 216,112 164,527 134,593 29,934 51,584 409,398 234,658 198,688 561,366 325,352 178,874 142,899 418,407 260,101 132,902 121,309 339,609 65,251 45,972 21,590 78,798 84,045 55,785 55,790 142,959 3,058 1,652 1,371 281 1,406 A74 4.22 Special Tables • February 1993 DOMESTIC OFFICES, Insured Commercial Bank Assets and Liabilities 1 Consolidated Report of Condition, September 30, 1992 Millions of dollars except as noted Members Nonmembers Item Total National State 3,094,792 2,270,023 1,769,235 500,788 824,769 182,988 31,142 27,119 124,728 142,164 23,958 15,206 103,001 115,556 19,672 12,133 83,751 26,608 4,285 3,073 19,250 40,824 7,184 11,913 21,727 2,687,052 1,940,443 1,529,141 411,303 746,608 721,934 581,602 70,997 58,041 3,255 54,786 11,294 5,843 4,305 1,597 59 5,451 151,356 66,651 4,894 1,821,807 8,045 1,813,762 502,184 408,699 45,126 41,087 2,639 38,448 7,272 2,655 2,022 655 22 4,617 114,877 38,465 3,779 1,328,551 5,169 1,323,383 381,376 313,880 32,814 28,831 2,279 26,552 5,852 2,199 1,714 504 19 3,653 86,850 32,738 3,088 1,064,699 3,784 1,060,914 120,807 94,819 12,312 12,256 360 11,896 1,420 455 307 151 3 964 28,027 5,726 690 263,853 1,385 262,468 219,751 172,903 25,871 16,954 616 16,338 4,022 3,188 2,283 942 37 834 36,478 28,187 1,116 493,256 2,876 490,380 837,201 87,181 19,901 452,341 73,271 379,070 26,973 250,804 587,315 64,187 8,929 322,176 55,005 267,172 18,049 173,973 479,760 53,204 7,413 263,114 44,971 218,143 14,388 141,641 107,555 10,983 1,516 59,062 10,034 49,029 3,661 32,332 249,886 22,994 10,972 130,164 18,266 111,898 8,924 76,832 23,433 36,245 438,160 888 17,998 17,474 341,111 633 12,715 14,993 268,605 438 5,282 2,481 72,506 195 5,435 18,772 97,049 255 357,101 64,231 142,911 26,085 1,829 24,256 71,685 31,009 12,590 51,994 212,162 252,175 44,166 81,373 20,638 1,503 19,135 65,638 25,570 11,716 45,667 175,699 207,401 40,902 65,721 15,229 1,243 13,986 44,790 20,768 8,481 19,804 116,057 44,774 3,264 15,652 5,410 261 5,149 20,848 4,802 3,235 25,863 59,642 104,926 20,065 61,538 5,447 325 5,121 6,047 5,440 874 6,327 36,463 48 Total liabilities and equity capital 3,094,792 2,270,023 1,769,235 500,788 824,769 49 Total liabilities3 2,839,162 2,087,247 1,628,107 459,140 751,915 1,665,531 1,544,117 5,303 63,128 26,111 5,436 13,627 7,808 1,331,933 1,237,402 4,551 51,286 20,150 4,097 9,644 4,802 333,598 306,715 752 11,841 5,961 1,339 3,983 3,006 660,524 614,171 1,019 33,342 3,558 3,418 4,453 564 1 Total assets4 2 Cash and balances due from depository institutions 3 Currency and coin Non-interest-bearing balances due from commercial banks 4 5 Other 6 Total securities, loans, and lease financing receivables (net of unearned income) 7 Total securities, book value 8 U.S. Treasury securities and U.S. government agency and corporation obligations 9 Securities issued by states and political subdivisions in the United States 10 Other debt securities 11 All holdings of private certificates of participation in pools of residential mortgages 12 All other 13 Equity securities 15 Investments in mutual funds 16 Other LESS: Net unrealized loss 17 18 Other equity securities 19 Federal funds sold and securities purchased under agreements to resell 20 Federal funds sold 21 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) Total loans, gross, by category 25 Loans secured by real estate 26 Construction and land development 28 29 30 31 32 One- to four-family residential properties Revolving, open-end loans, and extended under lines of credit All other loans Multifamily (five or more) residential properties Nonfarm nonresidential properties 33 34 35 36 37 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) 38 Credit cards and related plans 39 Other (includes single payment installment) 40 Obligations (other than securities) of states and political subdivisions in the United States 43 44 45 46 47 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 51 Individuals, partnerships, and corporations 53 54 55 56 57 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 2,326,055 2,158,288 6,322 96,469 29,669 8,854 18,080 8,372 58 Total transaction accounts 59 Individuals, partnerships, and corporations 60 U.S. government 61 States and political subdivisions in the United States 62 Commercial banks in the United States 63 Other depository institutions in the United States 64 Certified and official checks 65 All other 715,748 621,094 4,159 35,501 25,233 4,009 18,080 7,671 533,889 458,118 3,268 24,905 23,414 3,250 13,627 7,308 425,410 367,708 2,705 20,283 18,213 2,412 9,644 4,444 108,479 90,410 562 4,622 5,201 838 3,983 2,864 181,859 162,976 892 10,596 1,819 760 4,453 363 66 Demand deposits (included in total transaction accounts) 67 Individuals, partnerships, and corporations 68 U.S. government 69 States and political subdivisions in the United States 70 Commercial banks in the United States 71 Other depository institutions in the United States 72 Certified and official checks 73 All other 452,889 378,112 3,955 15,897 25,207 3,988 18,080 7,650 351,292 288,146 3,094 12,487 23,412 3,235 13,627 7,291 276,073 228,806 2,546 10,039 18,212 2,398 9,644 4,427 75,219 59,340 548 2,448 5,200 837 3,983 2,863 101,597 89,966 861 3,410 1,795 753 4,453 359 1,610,307 1,537,195 2,162 60,968 4,436 4,845 701 1,131,642 1,086,000 2,036 38,223 2,697 2,187 500 906,523 869,694 1,846 31,003 1,937 1,685 358 225,119 216,306 190 7,220 760 501 142 478,665 451,195 127 22,745 1,739 2,658 201 74 Total nontransaction accounts 75 Individuals, partnerships, and corporations 76 U.S. government 77 States and political subdivisions in the United States 78 Commercial banks in the United States 79 Other depository institutions in the United States 80 All other Commercial Banks A75 4.22—Continued Members Item 81 82 83 84 85 86 87 88 89 Nonmembers Total Federal funds purchased and securities sold under agreements to repurchase 10 Federal funds purchased 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 90 Total equity capital7 Total National State 248,615 39,046 28,865 34,043 89,324 12,776 1,775 31,502 126,573 208,290 29,585 17,271 30,899 63,657 11,902 1,1% 23,743 105,772 148,332 25,032 14,233 20,450 44,477 8,629 1,118 21,209 73,168 59,958 4,553 3,038 10,449 19,179 3,273 78 2,534 32,604 40,324 9,460 11,594 3,144 25,668 874 579 7,759 20,802 255,630 182,776 141,128 41,648 72,854 39,992 20,865 3,442 1,246 2,566 781 159 3,089 6,902 38,067 20,543 2,936 1,148 2,524 731 159 2,933 6,638 23,514 11,899 2,592 701 1,947 683 159 2,030 3,090 14,552 8,643 344 447 578 48 0 903 3,548 1,925 322 506 98 42 50 0 156 264 148,338 47,173 34,871 3,705 106,875 34,058 24,829 1,890 86,175 28,206 20,911 1,670 20,699 5,852 3,918 220 41,464 13,115 10,042 1,815 31,166 22,939 19,241 3,698 8,227 448,375 276,281 642,669 220,390 22,592 258,763 1,873,166 340,114 1%,422 428,940 148,595 17,571 180,475 1,314,239 272,468 146,274 351,249 125,056 11,476 147,646 1,055,860 67,646 50,148 77,690 23,540 6,094 32,829 258,378 108,261 79,859 213,729 71,795 5,021 78,287 558,927 1,777,609 1,297,132 1,042,689 254,443 480,478 261,516 182,098 148,672 33,426 79,418 449,085 270,683 226,832 685,323 341,724 193,137 153,870 463,255 272,809 143,732 129,836 374,351 68,915 49,405 24,034 88,904 107,362 77,546 72,%2 222,068 11,562 4,615 3,649 966 6,947 MEMO 91 Assets held in trading accounts" 92 U.S. Treasury securities 93 U.S. government agency corporation obligations 94 Securities issued by states and political subdivisions in the United States 95 Other bonds, notes, and debentures 96 Certificates of deposit 97 Commercial paper 98 Bankers acceptances 99 Other 100 Total individual retirement (IRA) and Keogh plan accounts 101 Total brokered deposits 102 Total brokered retail deposits 103 Issued in denominations of $100,000 or less 104 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 105 106 107 108 109 110 Ill Savings deposits Money market deposit accounts (savings deposits; 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 negotiable order of withdrawal (NOW) accounts (including Super NOWs) Total time and savings deposits Quarterly averages 112 Total loans 113 Transaction accounts (NOW accounts, automated transfer service (ATS) accounts, and telephone and preauthorized transfer accounts) Nontransaction accounts 114 Money market deposit accounts 115 Other savings deposits 116 Time certificates of deposit of $100,000 or more 117 All other time deposits 118 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 March 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 of more than $1 billion report additional items; (3) the domestic offices of banks with foreign offices report far less detail; and (4) banks with assets of less than $25 million have been excused from reporting certain detail items. 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 or the absence of detail on a fully consolidated basis for banks with foreign offices. All transactions between domestic and foreign offices of a bank are reported in "net due from" and "net due t o . " All other lines represent transactions with parties other than the domestic and foreign offices of each bank. Because 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. 2. Foreign offices include branches in foreign countries, Puerto Rico, and U.S. territories and possessions; subsidiaries in foreign countries; all offices of Edge Act and Agreement corporations wherever located and IBFs. 3. The "over 100" refers to banks whose assets, on June 30 of the preceding calendar year, were $100 million or more. (These banks file the FFIEC 032 or FFIEC 033 Call Report.) "Under 100" refers to banks whose assets, on June 30 of the preceding calendar year, were less than $100 million. (These banks filed the FFIEC 034 Call Report.) 4. Because 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) do not sum to the actual total (domestic). 5. Because 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 sum to the actual total (foreign). 6. The definition of "all other" varies by report form and therefore by column in this table. 7. Equity capital is not allocated between the domestic and foreign offices of banks with foreign offices. 8. Only the domestic portion of federal funds sold and securities purchased under agreements to resell are reported here; therefore, the components do not sum to totals. 9. "Acceptances of other banks" is not reported by domestic banks having less than $300 million in total assets; therefore the components do not sum to totals. 10. Only the domestic portion of federal funds purchased and securities sold are reported here; therefore the components do not sum to totals. 11. Components are reported only for banks with total assets of $1 billion or more; therefore the components do not sum to totals. A76 4.23 Special Tables • February 1993 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 2-6, 19921 A. Commercial and Industrial Loans Characteristic Amount of loans ($1,000) Average size ($1,000) Weighted average maturity 2 Days Loan rate (percent) Weighted average effective 3 Standard Loans secured by collateral (percent) Loans made under commitment (percent) Participation loans (percent) ALL BANKS 1 Overnight 6 11,489,659 7,587 2 One month and under (excluding overnight) Fixed rate 3 4 Floating rate 7,142,624 5,542,985 1,599,639 886 1,263 435 19 18 23 4.45 4.29 5.01 37.1 33.2 50.3 83.4 84.9 78.2 14.4 11.4 24.9 5 Over one month and under a year . 6 Fixed rate 7 Floating rate 9,564,119 2,918,977 6,645,142 177 142 197 152 127 163 5.53 5.02 5.76 46.0 43.3 47.2 84.6 71.7 90.3 12.2 9.6 13.3 8 Demand 7 Fixed rate 9 10 Floating rate 14,038,692 2,321,049 11,717,643 292 576 266 5.84 4.39 6.13 66.9 37.1 72.8 66.2 70.6 65.3 9.4 17.5 7.8 3.85 .22 5.5 11 Total short term 42,235,094 378 4.99 40.6 69.5 9.8 12 Fixed rate (thousands of dollars) .. 13 1-99 14 100-499 15 500-999 16 1,000-4,999 17 5,000-9,999 18 10,000 and over 22,271,296 387,457 326,703 414,140 3,836,634 3,989,303 13,317,060 732 15 200 673 2,304 6,695 21,214 24 150 94 113 48 20 13 4.17 8.64 6.27 4.67 4.58 4.12 3.87 21.0 79.3 59.3 37.5 30.1 15.8 16.7 65.0 34.2 54.1 64.7 73.2 65.7 63.5 .4 8.4 8.8 10.3 12.6 7.5 19 Floating rate (thousands of dollars) 20 1-99 21 100-499 22 500-999 23 1,000-4,999 24 5,000-9,999 25 10,000 and over 19,963,798 1,587,803 3,179,932 1,516,843 4,271,573 1,815,392 7,592,255 245 26 206 655 1,950 6,783 29,0% 136 163 182 157 157 131 99 5.91 7.53 7.06 6.71 6.37 5.44 4.79 62.5 83.7 79.3 72.9 57.8 45.7 55.6 74.7 85.8 85.6 93.3 82.3 73.8 59.9 11.0 2.4 8.2 14.8 13.0 11.0 12.1 Months 26 Total long term 4,575,958 178 6.36 62.6 74.4 27 Fixed rate (thousands of dollars) . . 28 1-99 29 100-499 30 500-999 31 1,000 and over 1,364,100 187,779 183,425 52,758 940,138 108 16 201 635 6,244 5.97 9.28 7.94 6.82 4.88 57.2 91.3 93.1 82.7 41.9 72.3 21.9 29.7 55.8 91.6 5.1 32 Floating rate (thousands of dollars) 33 1-99 34 100-499 35 500-999 36 1,000 and over 3,211,858 241,635 585,898 318,572 2,065,753 244 26 220 658 3,731 6.53 7.95 7.22 6.83 64.9 80.7 78.0 73.3 58.1 75.3 48.0 70.9 79.0 79.1 17.4 1.4 6.5 16.4 22.5 6.12 .2 4.5 3.0 6.4 Loan rate (percent) Days Effective3 Nominal8 LOANS MADE BELOW PRIME 10 37 Overnight 6 38 One month and under (excluding overnight) 39 Over one month and under a year 40 Demand 7 10,892,314 8,813 3.72 3.71 6.4 49.9 5.8 6,358,035 5,166,014 5,355,249 3,548 603 2,528 18 143 4.09 4.37 3.85 4.07 4.33 3.81 33.9 35.5 58.7 84.2 87.5 43.2 14.4 15.4 13.3 63.8 62.5 9.2 15.8 93.8 8.7 93.4 94.3 4.6 13.0 41 Total short term 27,771,612 2,025 39 3.95 3.93 28.2 42 43 Fixed rate Floating rate 20,283,305 7,488,307 2,510 1,330 22 118 3.89 4.12 3.87 4.08 54.2 44 Total long term 1,639,193 4.56 4.54 4.47 4.66 4.46 4.62 45 46 Fixed rate . . . Floating rate . For notes see end of table. 843,036 796,157 562 682 18.6 36.5 36.2 Financial Markets 4.23—Continued Characteristic Amount of loans ($1,000) Average size ($1,000) Weighted average maturity 2 Days Loans secured by collateral (percent) Loans made under commitment (percent) i.02 8.5 52.5 Loan rate (percent) Weighted average effective 3 Standard Participation loans (percent) LARGE BANKS 1 Overnight 6 7,827,426 8,359 2 One month and under (excluding overnight) 3 Fixed rate 4 Floating rate 5,435,273 4,402,529 1,032,744 3,694 5,438 1,561 18 17 20 4.24 4.18 4.53 37.7 33.8 54.0 90.4 89.4 94.4 9.4 8.6 12.9 5 Over one month and under a year . 6 Fixed rate 7 Floating rate 5,201,561 1,668,877 3,532,684 1,019 1,845 841 131 103 144 5.07 4.66 5.26 34.0 40.6 30.9 90.6 12.0 10.8 95.5 12.6 9,849,059 1,885,100 7,963,959 607 1,910 523 5.42 4.24 5.70 64.6 39.5 70.5 60.1 65.2 58.9 9.6 18.5 7.5 8 Demand 7 9 Fixed rate 10 Floating rate 80.1 11 Total short term 28,313,318 1,193 43 4.74 38.3 69.4 9.5 12 Fixed rate (thousands of dollars) . . 13 1-99 14 100-499 15 500-999 16 1,000-4,999 17 5,000-9,999 18 10,000 and over 15,782,557 18,635 119,890 235,365 2,676,567 2,9%,221 9,735,880 4,342 26 242 705 2,282 6,539 21,294 18 125 62 53 41 18 12 4.16 6.92 5.35 4.97 4.60 4.16 3.99 22.6 63.6 53.9 51.1 33.7 18.5 19.7 67.2 52.4 71.9 76.6 74.0 63.3 66.3 9.6 7.2 10.1 12.3 10.2 13.0 8.4 19 Floating rate (thousands of dollars) 20 1-99 21 100-499 22 500-999 23 1,000-4,999 24 5,000-9,999 25 10,000 and over 12,530,761 386,244 1,175,624 723,652 2,155,153 1,412,821 6,677,268 624 32 213 663 2,076 6,824 28,689 116 161 161 167 143 133 95 5.48 7.22 6.90 6.69 6.12 5.69 4.75 58.0 82.2 73.3 67.8 56.6 55.9 53.7 72.2 90.3 91.7 92.1 82.0 73.3 62.1 9.4 2.0 5.1 8.9 11.8 10.7 9.6 Months 26 Total long term 2,522,013 856 59.6 80.3 20.5 27 Fixed rate (thousands of dollars) . . 28 1-99 29 100-499 30 500-999 31 1,000 and over 550,868 7,153 30,815 21,723 491,177 1,065 25 256 701 5,857 5.64 8.47 7.08 5.88 5.50 64.9 86.3 79.1 65.5 63.7 82.5 23.8 56.6 71.6 85.5 11.1 .0 6.6 7.1 11.7 32 Floating rate (thousands of dollars) 33 1-99 34 100-499 35 500-999 36 1,000 and over 1,971,144 32,889 208,706 195,531 1,534,018 811 37 233 679 4,277 6.21 58.1 76.8 71.5 65.2 54.9 79.7 75.1 79.1 78.6 80.0 23.2 5.9 6.0 12.9 27.2 36.0 29.9 63.6 90.5 89.8 35.1 8.5 17.7 12.3 7.21 6.95 6.73 6.02 Loan rate (percent) Days Effective 3 Nominal 8 LOANS MADE BELOW PRIME 37 Overnight 6 38 One month and under (excluding overnight) 39 Over one month and under a year 40 Demand 7 7,231,550 8,158 5,102,905 3,129,538 4,679,703 6,200 4,165 4,716 41 Total short term 20,143,696 5,833 42 43 14,423,269 5,720,427 5,691 6,226 Fixed rate Floating rate 17 125 18 103 3.84 3.82 4.09 4.16 3.78 4.08 4.13 3.74 3.94 3.92 3.94 3.92 3.93 3.89 21.3 58.3 64.4 57.5 10.0 12.9 4.31 34.8 95.8 14.3 4.60 4.10 56.1 19.2 94.3 96.9 9.8 17.6 Months 44 Total long term 878,046 2,987 45 46 371,220 506,826 2,755 3,183 Fixed rate . . Floating rate For notes see end of table. 4.61 4.15 All A78 4.23 Special Tables • February 1993 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 2-6, 1992'—Continued Commercial and industrial loans—Continued Characteristic Amount of loans ($1,000) Average size ($1,000) Weighted average maturity 2 Days Loan rate (percent) Weighted average effective 3 Standard Loans secured by collateral (percent) Loans made under commitment (percent) Participation loans (percent) OTHER BANKS 1 Overnight 6 3,662,233 6,337 2 One month and under (excluding overnight) 3 Fixed rate 4 Floating rate 1,707,351 1,140,456 566,895 259 319 188 24 22 28 5.12 4.73 5.89 35.1 30.9 43.5 61.3 67.6 48.6 30.5 22.5 46.7 5 Over one month and under a year . 6 Fixed rate 7 Floating rate 4.362.558 1,250,101 3,112,458 89 64 106 177 160 184 6.09 5.50 6.32 60.4 46.9 65.8 77.5 60.4 84.4 12.4 4,189,633 435,949 3,753,684 132 143 131 6.82 5.03 7.03 72.4 26.8 77.7 80.4 93.7 78.8 9.0 13.4 8.5 7 8 Demand 9 Fixed rate 10 Floating rate 11 Total short term 3.51 .26 8.1 14.1 13,921,776 158 84 5.51 45.3 69.8 10.5 12 Fixed rate (thousands of dollars) . . 13 1-99 14 100-499 15 500-999 16 1,000-4,999 17 5,000-9,999 18 10,000 and over 6,488,739 368,821 206,813 178,775 1,160,067 993,082 3,581,180 242 15 182 635 2,359 7,216 20,998 38 151 106 171 61 28 13 4.21 8.73 16.9 6.7 7.4 4.1 10.5 7.5 8.6 59.4 33.3 43.8 49.1 71.4 73.1 55.9 19 Floating rate (thousands of dollars) 20 1-99 21 100-499 22 500-999 23 1,000-4,999 24 5,000-9,999 25 10,000 and over 7,433,037 1.201.559 2,004,308 793,191 2,116,421 402,571 914,987 121 160 163 188 152 172 126 114 6.65 7.62 7.15 6.74 6.63 4.58 5.12 70.1 84.2 82.8 77.5 59.1 10.0 69.2 78.8 84.3 82.0 94.5 82.6 75.4 44.2 13.8 2.5 10.0 20.2 14.3 12.1 30.8 25 202 648 1,836 6,644 32,454 80.1 6.81 62.4 19.7 4.27 4.52 3.99 3.55 21.8 .0 11.1 5.0 Months 26 Total long term 2,053,945 90 6.71 66.4 67.1 5.4 27 Fixed rate (thousands of dollars) . . 28 1-99 29 100-499 30 500-999 31 1,000 and over 813,232 180,626 152,611 31,035 448,960 67 16 193 595 6,730 6.19 9.31 8.11 7.48 4.20 52.0 91.5 96.0 94.8 18.1 65.3 21.9 24.3 44.8 98.2 .2 4.1 .0 .6 32 Floating rate (thousands of dollars) 33 1-99 34 100-499 35 50b-999 36 1,000 and over 1,240,714 208,746 377,192 123,041 531,735 116 24 213 628 2,727 7.04 8.06 7.37 6.98 6.42 75.8 81.3 81.5 86.0 67.3 68.3 43.7 66.4 79.5 76.8 1.1 8.2 .6 6.7 21.8 9.1 Loan rate (percent) Days Effective 3 Nominal 8 LOANS MADE BELOW PRIME 37 Overnight 6 38 One month and under (excluding overnight) 39 Over one month and under a year 40 Demand 7 3,660,764 10,472 1,255,130 2,036,476 675,546 1,295 261 600 23 170 4.08 4.69 4.37 4.03 4.65 4.34 25.3 44.2 24.1 41 Total short term 7,627,916 744 55 3.99 3.96 18.6 42 43 5,860,036 1,767,880 1,056 375 31 145 3.76 4.75 3.73 4.69 11.8 4.82 4.37 5.56 Fixed rate Floating rate 3.51 1.0 58.8 84.1 98.8 38.2 11.9 20.4 11.5 41.1 62.2 78.8 7.4 25.1 4.80 38.1 91.6 2.2 4.35 5.54 21.0 92.8 89.8 .5 4.9 Months 44 Total long term 761,147 321 45 46 471,816 289,331 346 287 Fixed rate . . Floating rate For notes see following page. 30 66.1 Financial Markets A79 NOTES TO TABLE 4.23 1. As of Sept. 30, 1990, assets of most of the large banks were at least $7.0 billion. For all insured banks, total assets averaged $275 million. 2. Average maturities are weighted by loan size and exclude demand loans. 3. Effective (compounded) annual interest rates are calculated from the stated rate and other terms of the loans and weighted by loan size. 4. The chances are about two out of three that the average rate shown would differ by less than this amount from the average rate that would be found by a complete survey of lending at all banks. 5. The most common base rate is that used to price the largest dollar volume of loans. Base pricing rates include the prime rate (sometimes referred to as a bank's "basic" or "reference" rate); the federal funds rate; domestic money market rates other than the federal funds rate; foreign money market rates; and other base rates not included in the foregoing classifications. 6. Overnight loans mature on the following business day. 7. Demand loans have no stated date of maturity. 8. Nominal (not compounded) annual interest rates are calculated from the stated rate and other terms of the loans and weighted by loan size. 9. The prime rate reported by each bank is weighted by the volume of loans extended and then averaged. 10. The proportion of loans made at rates below the prime may vary substantially from the proportion of such loans outstanding in banks' portfolios. A80 4.30 Special Tables • February 1993 ASSETS A N D LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 19921 Millions of dollars All states Item 1 Total assets4 Total including IBFs New York IBFs only Total including IBFs California Illinois IBFs only Total including IBFs IBFs only Total including IBFs IBFs only 697,952 292,061 525,316 232,626 79,302 33,687 56,747 17,569 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 .. / U.S. branches and agencies of other foreign banks (including IBFs) 8 Other depository institutions in United States (including IBFs) 9 Balances with banks in foreign countries and with foreign central banks 10 Foreign branches of U.S. banks II Other banks in foreign countries and foreign central banks 12 Balances with Federal Reserve Banks 605,746 139,621 186,894 109,734 446,673 119,549 155,197 91,408 73,853 6,850 13,836 6,206 56,536 11,963 13,799 11,438 2,310 23 80,269 0 n.a. 55,423 2,169 16 69,999 0 n.a. 46,285 15 2 4,124 0 n.a. 3,544 86 1 5,522 5,323 74,924 53,334 65,580 44,498 3,808 3,534 5,101 5,045 5,345 2,089 4,420 1,787 316 10 421 278 56,083 1,600 54,311 1,564 46,536 1,357 45,123 1,322 2,665 159 2,662 159 6,340 79 6,115 79 54,483 936 52,747 n.a. 45,179 829 43,801 n.a. 2,506 43 2,503 n.a. 6,261 15 6,036 n.a. 13 Total securities and loans 377,778 66,634 254,944 54,668 60,047 6,743 36,674 2,041 74,380 24,631 14,421 n.a. 68,769 24,495 13,535 n.a. 3,308 52 527 n.a. 1,908 36 327 n.a. 14 Total securities, book value 15 U.S. Treasury 16 Obligations of U.S. government agencies and corporations 17 Other bonds, notes, debentures, and corporate stock (including state and local securities) 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 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 27 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) 3/ 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 AH other loans 0 14,226 n.a. 13,737 n.a. 35,524 14,421 30,537 13,535 2,929 527 1,764 327 36,232 10,810 5,275 20,146 2,871 1,719 175 977 34,183 9,481 4,950 19,752 2,441 1,527 175 740 909 690 68 152 249 193 0 57 685 453 119 113 50 0 0 50 303,535 137 303,398 52,221 9 52,213 186,262 87 186,175 41,141 7 41,134 56,762 23 56,739 6,218 1 6,217 34,787 21 34,765 1,715 0 1,714 53,678 45,970 21,943 18,958 2,984 581 31,371 11,452 10,472 980 26,540 36,362 16,865 14,636 2,228 302 24,334 8,504 7,606 898 17,771 5,241 3,299 3,131 168 220 4,191 2,254 2,178 76 5,434 1,968 1,355 924 431 59 1,164 573 568 5 26 24,001 528 23,474 18,428 16 19,902 368 19,534 868 26 19,472 428 19,043 15,780 16 15,813 273 15,540 766 0 1,942 95 1,847 870 0 1,937 95 1,842 40 0 613 0 613 1,408 0 591 0 591 21 167,252 144,815 22,436 1,678 940 738 13,421 535 12,886 39 0 39 92,912 75,827 17,085 759 330 429 10,631 401 10,230 31 0 31 31,663 29,290 2,374 626 555 72 1,549 107 1,442 0 0 0 25,029 24,424 605 165 2 164 372 8 364 0 0 0 327 n.a. 109 n.a. 7,444 5,661 5,672 4,870 279 184 422 99 5,180 3,905 100 182 4,998 3,238 66 140 133 180 34 0 49 312 0 0 52,115 17,461 11,980 5,481 7,656 n.a. n.a. n.a. 37,998 11,940 7,304 4,636 6,680 n.a. n.a. n.a. 6,048 4,240 3,701 539 637 n.a. n.a. n.a. 7,214 969 867 103 270 n.a. 34,654 92,206 7,656 105,167 26,058 78,642 6,680 77,429 1,808 5,449 637 19,851 6,244 211 270 3,770 92,206 n.a. 78,642 n.a. 5,449 n.a. n.a. 105,167 n.a. 77,429 n.a. 19,851 n.a. 3,770 52 Total liabilities4 697,952 292,061 525,316 232,626 79,302 33,687 56,747 17,569 53 Liabilities to nonrelated parties 585,091 254,552 470,752 204,664 65,195 32,889 30,951 9,912 44 All other assets 45 Customers' liability on acceptances outstanding 46 U.S. addressees (domicile) 4/ Non-U.S. addressees (domicile) 48 Other assets including other claims on nonrelated parties 49 Net due from related depository institutions5 50 Net due from head office and other related depository institutions 51 Net due from establishing entity, head offices, and other related depository institutions 211 n.a. U.S. Branches and Agencies A81 4.30—Continued Millions of dollars All states 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 I B F s ) . . . 59 U.S. branches and agencies of other foreign banks .. 60 Other commercial banks in United States 61 Banks in foreign countries 62 Foreign branches of U.S. banks 63 Other banks in foreign countries 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) Individuals, partnerships, and corporations U.S. addressees (domicile) Non-U.S. addressees (domicile) Commercial banks in United States (including I B F s ) . . . U.S. branches and agencies of other foreign banks . . Other commercial banks in United States Banks in foreign countries Foreign branches of U.S. banks Other banks in foreign countries Foreign governments and official institutions (including foreign central banks) 78 All other deposits and credit balances 79 Certified and official checks 68 69 70 71 72 73 74 75 76 77 80 Demand deposits (included in transaction accounts and credit balances) Individuals, partnerships, and corporations 81 82 U.S. addressees (domicile) 83 Non-U.S. addressees (domicile) 84 Commercial banks in United States (including I B F ) s . . . 85 U.S. branches and agencies of other foreign banks . . 86 Other commercial banks in United States 87 Banks in foreign countries 88 Foreign branches of U.S. banks 89 Other banks in foreign countries 90 Foreign governments and official institutions (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) % Non-U.S. addressees (domicile) 97 Commercial banks in United States (including I B F s ) . . . 98 U.S. branches and agencies of other foreign banks . . 99 Other commercial banks in United States 100 Banks in foreign countries 101 Foreign branches of U.S. banks 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 I B F s ) . . . 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 IBFs only New York Illinois California Total excluding IBFs IBFs only Total excluding IBFs IBFs only Total excluding IBFs IBFs only 150,449 107,574 92,020 15,554 30,292 12,976 17,316 5,741 1,990 3,751 186,148 16,421 3,059 13,362 53,587 48,381 5,206 98,688 4,889 93,799 129,000 89,146 79,672 9,474 28,589 12,411 16,178 5,557 1,964 3,593 167,764 10,896 3,009 7,887 48,295 43,553 4,742 92,544 4,418 88,126 4,772 4,140 2,320 1,820 363 104 259 4 0 4 7,974 512 0 512 3,072 2,794 278 3,372 362 3,010 8,094 7,321 6,266 1,054 732 315 417 26 25 1 4,012 111 50 61 1,733 1,608 125 2,085 85 2,000 1,896 4,648 297 17,279 173 1,510 3,955 242 15,856 173 234 10 21 1,019 0 3 2 10 B3 0 8,038 5,792 4,295 1,497 462 66 396 1,069 2 1,067 6,280 4,592 3,656 936 177 16 160 947 1 945 539 218 182 35 282 48 234 4 0 4 344 329 323 6 0 0 0 1 0 1 319 98 297 243 80 242 4 10 21 2 1 10 6,960 5,408 4,144 1,265 110 17 92 841 2 839 5,768 4,461 3,589 872 106 16 90 724 1 723 208 178 155 22 1 0 0 4 0 4 332 317 312 5 0 0 0 1 0 1 n.a. n.a. n.a. 242 62 297 180 55 242 4 1 21 2 1 10 142,411 101,782 87,724 14,057 29,830 12,910 16,920 4,672 1,988 2,684 122,720 84,554 76,017 8,537 28,413 12,395 16,018 4,611 1,963 2,648 4,233 3,923 2,137 1,785 81 56 25 0 0 0 7,750 6,992 5,943 1,049 732 315 417 25 25 0 1,577 4,550 1,267 3,876 229 0 1 1 n.a. 186,148 16,421 3,059 13,362 53,587 48,381 5,206 98,688 4,889 93,799 17,279 173 n.a. 167,764 10,896 3,009 7,887 48,295 43,553 4,742 92,544 4,418 88,126 15,856 173 n.a. 7,974 512 0 512 3,072 2,794 278 3,372 362 3,010 1,019 0 n.a. n.a. 4,012 111 50 61 1,733 1,608 125 2,085 85 2,000 83 0 A82 4.30 Special Tables • February 1993 ASSETS A N D LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 1992'—Continued Millions of dollars All states Item 117 Federal funds purchased and securities sold under agreements to repurchase 118 U.S. branches and agencies of other foreign banks 119 Other commercial banks in United States 120 Other 121 Other borrowed money 122 Owed to nonrelated commercial banks in United States (including IBFs) 123 Owed to U.S. offices of nonrelated U.S. banks 124 Owed to U.S. branches and agencies of nonrelated foreign banks 125 Owed to nonrelated banks in foreign countries 126 Owed to foreign branches of nonrelated U.S. banks . . . 127 Owed to foreign offices of nonrelated foreign banks 128 Owed to others 129 All other liabilities 130 Branch or agency liability on acceptances executed and outstanding 141 Other liabilities to nonrelated parties 132 Net due to related depository institutions 5 143 Net due to head office and other related depository institutions 134 Net due to establishing entity, head office, and other related depository institutions Total including IBFs New York IBFs only Total including IBFs California Illinois IBFs only Total including IBFs IBFs only Total including IBFs IBFs only 79,205 14,247 17,150 47,809 118,585 13,219 2,146 310 10,764 49,200 66,376 10,316 12,766 43,294 70,378 10,175 1,003 90 9,082 21,457 8,848 2,974 3,061 2,812 37,541 1,543 855 155 533 22.848 3,638 864 1,200 1,575 8,662 1,459 288 65 1,106 4,292 41,024 13,649 18,465 2,063 17,921 8,200 4,170 703 18,121 3,554 12,380 1.215 3,539 1,378 1,594 85 27,375 29,809 1,987 27,822 47,753 16,403 27,952 1,845 26,107 2,783 9,721 16,447 788 15,658 36,010 3,467 14,775 666 14,109 2,512 14,567 10,484 1,035 9,448 8,936 11.165 10,368 1,035 9,333 100 2,161 2,533 129 2,404 2,589 1,509 2,533 129 2,404 164 50,703 5,985 37,234 5,268 6,060 524 6,544 149 19,490 31,214 n.a. 5,985 13,926 23,308 n.a. 5,268 4,248 1,812 n.a. 524 720 5,824 n.a. 149 25,796 7.657 112,861 37,509 54,564 27,962 14,107 112,861 n.a. 54,564 n.a. 14,107 n.a. 37,509 n.a. 27,962 n.a. 798 n.a. 798 25,7% n.a. n.a. 7,657 MEMO 135 Non-interest bearing balances with commercial banks in United States 136 Holding of commercial paper included in total loans 137 Holding of own acceptances included in commercial and industrial loans 138 Commercial and industrial loans with remaining maturity of one year or less 149 Predetermined interest rates 140 Floating interest rates 141 Commercial and industrial loans with remaining maturity of more than one year 142 Predetermined interest rates 143 Floating interest rates 1,358 1,532 0 1,068 1,345 0 127 136 0 82 27 3,692 2,713 607 101 99,165 61,221 37,944 52,422 30,188 22,234 19,703 12,585 7,118 15,465 11,608 3,857 68,086 23,023 45,064 n.a. 40,490 13,054 27,435 n.a. 11,960 3,614 8,347 n.a. 9,564 4,475 5,089 0 n.a. U.S. Branches and Agencies A83 4.30—Continued Millions of dollars New York All states 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 IBFs only t 148,897 111,809 24,413 All states 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 150 Number of reports filed6 74,900 77,120 573 IBFs only Total excluding IBFs IBFs only Total excluding IBFs 129,928 97,293 t 4,779 2,715 t 7,919 6,069 t n.a. 1,431 n.a. n.a. * 1,014 2 New York 14,344 n.a. 0 Total including IBFs 1 1,050 11,018 IBFs only 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 1 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 Total excluding IBFs 21,617 n.a. * 12,675 Illinois California IBFs only 1 419 Illinois California Total including IBFs IBFs only Total including IBFs IBFs only 69,287 13,440 3,471 547 1,744 324 43,070 268 n.a. n.a. 0 5,197 51 n.a. 0 0 27,468 133 IBFs only that no IBF data re 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 1 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. A84 Index to Statistical Tables References are to pages A3-A83 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Agricultural loans, commercial banks, 21, 22 Assets and liabilities (See also Foreigners) Banks, by classes, 19-22 Domestic finance companies, 35 Federal Reserve Banks, 11 Financial institutions, 27 Foreign banks, U.S. branches and agencies, 23, 80-83 Automobiles Consumer installment credit, 38 Production, 47, 48 BANKERS acceptances, 10, 24, 25 Bankers balances, 19-22, 80-83. (See also Foreigners) Bonds (See also U.S. government securities) New issues, 34 Rates, 25 Branch banks, 23, 55 Business activity, nonfinancial, 44 Business expenditures on new plant and equipment, 34 Business loans (See Commercial and industrial loans) CAPACITY utilization, 46 Capital accounts Banks, by classes, 19, 71, 73, 75 Federal Reserve Banks, 11 Central banks, discount rates, 67 Certificates of deposit, 25 Commercial and industrial loans Commercial banks, 17, 21, 70, 72, 74,76-79 Weekly reporting banks, 21-23 Commercial banks Assets and liabilities, 19-22, 76-79 Commercial and industrial loans, 17, 19, 20, 21, 22, 23 Consumer loans held, by type and terms, 38, 70, 72, 74 Loans sold outright, 21 Nondeposit funds, 18, 80-83 Number by classes, 71, 73, 75 Real estate mortgages held, by holder and property, 37 Terms of lending, 76-79 Time and savings deposits, 4 Commercial paper, 24, 25, 35 Condition statements (See Assets and liabilities) Construction, 44, 49 Consumer installment credit, 38 Consumer prices, 44, 46 Consumption expenditures, 52, 53 Corporations Nonfinancial, assets and liabilities, 34 Profits and their distribution, 34 Security issues, 33, 65 Cost of living (See Consumer prices) Credit unions, 38 Currency and coin, 70, 72, 74 Currency in circulation, 5, 14 Customer credit, stock market, 26 DEBITS to deposit accounts, 16 Debt (See specific types of debt or securities) Demand deposits Banks, by classes, 19-23, 71, 73, 75 Demand deposits—Continued Ownership by individuals, partnerships, and corporations, 23 Turnover, 16 Depository institutions Reserve requirements, 9 Reserves and related items, 4, 5, 6, 13, 71, 73, 75 Deposits (See also specific types) Banks, by classes, 4, 19-22, 23 Federal Reserve Banks, 5,11 Turnover, 16 Discount rates at Reserve Banks and at foreign central banks and foreign countries (See Interest rates) Discounts and advances by Reserve Banks (See Loans) Dividends, corporate, 34 EMPLOYMENT, 45 Eurodollars, 25 FARM mortgage loans, 37 Federal agency obligations, 5, 10, 11, 12, 30, 31 Federal credit agencies, 32 Federal finance Debt subject to statutory limitation, and types and ownership of gross debt, 29 Receipts and outlays, 27, 28 Treasury financing of surplus, or deficit, 27 Treasury operating balance, 27 Federal Financing Bank, 27, 32 Federal funds, 7, 18, 21, 22, 23, 25, 27 Federal Home Loan Banks, 32 Federal Home Loan Mortgage Corporation, 32, 36, 37 Federal Housing Administration, 32, 36, 37 Federal Land Banks, 37 Federal National Mortgage Association, 32, 36, 37 Federal Reserve Banks Condition statement, 11 Discount rates (See Interest rates) U.S. government securities held, 5, 11, 12, 29 Federal Reserve credit, 5, 6, 11, 12 Federal Reserve notes, 11 Federally sponsored credit agencies, 32 Finance companies Assets and liabilities, 35 Business credit, 35 Loans, 38 Paper, 24, 25 Financial institutions Loans to, 21, 22, 23 Selected assets and liabilities, 27 Float, 51 Flow of funds, 39, 41, 42, 43 Foreign banks, assets and liabilities of U.S. branches and agencies, 22, 23, 80-83 Foreign currency operations, 11 Foreign deposits in U.S. banks, 5, 11, 21, 22 Foreign exchange rates, 68 Foreign trade, 54 Foreigners Claims on, 55, 57, 60, 61, 62, 64 A85 Foreigners—Continued Liabilities to, 22, 54, 55, 57, 58, 63, 65,66 GOLD Certificate account, 11 Stock, 5, 54 Government National Mortgage Association, 32, 36, 37 Gross domestic product, 51 HOUSING, new and existing units, 49 INCOME, personal and national, 44, 51, 52 Industrial production, 44, 47 Installment loans, 38 Insurance companies, 29, 37 Interest rates Bonds, 25 Commercial banks, 76-79 Consumer installment credit, 38 Federal Reserve Banks, 8 Foreign central banks and foreign countries, 67 Money and capital markets, 25 Mortgages, 36 Prime rate, 24 International capital transactions of United States, 53-67 International organizations, 57, 58, 60, 63, 64 Inventories, 51 Investment companies, issues and assets, 34 Investments (See also specific types) Banks, by classes, 19, 20, 21, 22, 23, 27 Commercial banks, 4, 17, 19-22, 72 Federal Reserve Banks, 11,12 Financial institutions, 37 LABOR force, 45 Life insurance companies (See Insurance companies) Loans (See also specific types) Banks, by classes, 19-22 Commercial banks, 4, 17, 19-22, 70, 72, 74 Federal Reserve Banks, 5, 6, 8, 11, 12 Financial institutions, 27, 37 Insured or guaranteed by United States, 36, 37 MANUFACTURING Capacity utilization, 46 Production, 46, 48 Margin requirements, 26 Member banks (See also Depository institutions) Federal funds and repurchase agreements, 7 Reserve requirements, 9 Mining production, 48 Mobile homes shipped, 49 Monetary and credit aggregates, 4, 13 Money and capital market rates, 25 Money stock measures and components, 4, 14 Mortgages (See Real estate loans) Mutual funds, 34 Mutual savings banks (See Thrift institutions) NATIONAL defense outlays, 28 National income, 51 OPEN market transactions, 10 PERSONAL income, 52 Prices Consumer and producer, 44, 50 Stock market, 26 Prime rate, 24 Producer prices, 44, 50 Production, 44,47 Profits, corporate, 34 REAL estate loans Banks, by classes, 17, 21, 22, 37, 72 Financial institutions, 27 Terms, yields, and activity, 36 Type of holder and property mortgaged, 37 Repurchase agreements, 7, 18, 21, 22, 23 Reserve requirements, 9 Reserves Commercial banks, 19 Depository institutions, 4, 5, 6, 13 Federal Reserve Banks, 11 U.S. reserve assets, 54 Residential mortgage loans, 36 Retail credit and retail sales, 38, 39, 44 SAVING Flow of funds, 39,41,42, 43 National income accounts, 51 Savings and loan associations, 37, 38, 39. (See also SAIF-insured institutions) Savings Association Insurance Funds (SAIF) insured institutions, 27 Savings banks, 27, 37, 38 Savings deposits (See Time and savings deposits) Securities (See also specific types) Federal and federally sponsored credit agencies, 32 Foreign transactions, 65 New issues, 33 Prices, 26 Special drawing rights, 5, 11, 53, 54 State and local governments Deposits, 21, 22 Holdings of U.S. government securities, 29 New security issues, 33 Ownership of securities issued by, 21, 22 Rates on securities, 25 Stock market, selected statistics, 26 Stocks (See also Securities) New issues, 33 Prices, 26 Student Loan Marketing Association, 32 TAX receipts, federal, 28 Thrift institutions, 4. (See also Credit unions and Savings and loan associations) Time and savings deposits, 4, 14, 18, 19, 20, 21, 22, 23, 71, 73, 75 Trade, foreign, 54 Treasury cash, Treasury currency, 5 Treasury deposits, 5, 11, 27 Treasury operating balance, 27 UNEMPLOYMENT, 45 U.S. government balances Commercial bank holdings, 19, 20, 21, 22 Treasury deposits at Reserve Banks, 5, 11, 27 U.S. government securities Bank holdings, 19-22, 23, 29 Dealer transactions, positions, and financing, 31 Federal Reserve Bank holdings, 5, 11, 12, 29 Foreign and international holdings and transactions, 11, 29, 66 Open market transactions, 10 Outstanding, by type and holder, 27, 29 Rates, 24 U.S. international transactions, 53-67 Utilities, production, 48 VETERANS Administration, 36, 37 WEEKLY reporting banks, 21-23 Wholesale (producer) prices, 44, 50 YIELDS (See Interest rates) A86 Federal Reserve Board of Governors and Official Staff ALAN GREENSPAN, Chairman DAVID W. MULLINS, JR., Vice Chairman OFFICE OF BOARD MEMBERS JOSEPH R. COYNE, Assistant DONALD J. WINN, Assistant WAYNE D . ANGELL EDWARD W. KELLEY, JR. DIVISION OF INTERNATIONAL to the Board to the Board THEODORE E. ALLISON, Assistant to the Board for Federal Reserve System Affairs LYNN S. FOX, Special Assistant to the Board WINTHROP P. HAMBLEY, Special Assistant to the Board BOB STAHLY MOORE, Special Assistant to the Board DIANE E. WERNEKE, Special Assistant to the Board EDWIN M. TRUMAN, Staff LARRY J. PROMISEL, Senior Associate Director CHARLES J. SIEGMAN, Senior Associate Director DALE W. HENDERSON, Associate Director DAVID H. HOWARD, Senior Adviser DONALD B. ADAMS, Assistant Director PETER HOOPER III, Assistant Director KAREN H. JOHNSON, Assistant Director RALPH W. SMITH, JR., Assistant LEGAL FINANCE Director Director DIVISION J. VIRGIL MATTINGLY, JR., General Counsel SCOTT G. ALVAREZ, Associate General Counsel RICHARD M. ASHTON, Associate General Counsel OLIVER IRELAND, Associate General Counsel KATHLEEN M. O'DAY, Associate General Counsel MARYELLEN A. BROWN, Assistant to the General Counsel OFFICE OF THE SECRETARY WILLIAM W . WILES, Secretary JENNIFER J. JOHNSON, Associate Secretary BARBARA R. LOWREY, Associate Secretary ELLEN MALAND, Assistant Secretary DIVISION OF BANKING SUPERVISION AND REGULATION RICHARD SPILLENKOTHEN, Director STEPHEN C. SCHEMERING, Deputy DON E. KLINE, Associate Director Director WILLIAM A. RYBACK, Associate Director FREDERICK M. STRUBLE, Associate Director HERBERT A. BIERN, Deputy Associate Director ROGER T. COLE, Deputy Associate Director JAMES I. GARNER, Deputy Associate Director HOWARD A. AMER, Assistant Director GERALD A. EDWARDS, JR., Assistant Director JAMES D . GOETZINGER, Assistant Director LAURA M. HOMER, Assistant Director JAMES V. HOUPT, Assistant Director DIVISION OF RESEARCH AND MICHAEL J. PRELL, EDWARD C. ETTIN, Deputy Director WILLIAM R. JONES, Associate Director THOMAS D. SIMPSON, Associate Director LAWRENCE SLIFMAN, Associate Director DAVID J. STOCKTON, Associate Director MARTHA BETHEA, Deputy Associate Director PETER A. TINSLEY, Deputy Associate Director MYRON L. KWAST, Assistant Director PATRICK M. PARKINSON, Assistant Director MARTHA S. SCANLON, Assistant Director JOYCE K. ZICKLER, Assistant JOHN J. MINGO, Director Adviser LEVON H. GARABEDIAN, Assistant Director (Administration) DIVISION OF MONETARY DONALD L . KOHN, AFFAIRS Director DAVID E. LINDSEY, Deputy Director BRIAN F. MADIGAN, Assistant Director RICHARD D. PORTER, Assistant Director NORMAND R. V. BERNARD, Special Assistant to the Board DIVISION OF CONSUMER AND COMMUNITY AFFAIRS GRIFFITH L . GARWOOD, Director GLENN E. LONEY, Associate JACK P. JENNINGS, Assistant Director DOLORES S. SMITH, Associate MICHAEL G. MARTINSON, Assistant Director RHOGER H PUGH, Assistant Director SIDNEY M. SUSSAN, Assistant Director MOLLY S. WASSOM, Assistant Director MAUREEN P. ENGLISH, Assistant STATISTICS Director Director Director IRENE SHAWN M C N U L T Y , Assistant Director Director A87 SUSAN M . PHILLIPS JOHN P. LAWARE LAWRENCE B . LINDSEY OFFICE OF STAFF DIRECTOR FOR MANAGEMENT S. DAVID FROST, Staff Director WILLIAM SCHNEIDER, Special Assignment: Project Director, National Information Center PORTIA W. THOMPSON, Equal Employment Opportunity Programs Officer DIVISION OF RESERVE BANK AND PAYMENT SYSTEMS CLYDE H . FARNSWORTH, JR., Director DAVID L. ROBINSON, Deputy Director (Finance and Control) CHARLES W. BENNETT, Assistant Director JACK DENNIS, JR., Assistant Director EARL G. HAMILTON, Assistant DIVISION OF HUMAN MANAGEMENT DAVID L . S H A N N O N , RESOURCES Director Director Director Director LOUISE L. ROSEMAN, Assistant FLORENCE M . YOUNG, Assistant Director ANTHONY V. DIGIOIA, Assistant JOSEPH H. HAYES, JR., Assistant Director JEFFREY C. MARQUARDT, Assistant JOHN H. PARRISH, Assistant Director IOHN R. WEIS, Associate OPERATIONS Director Director OFFICE OF THE INSPECTOR GENERAL FRED HOROWITZ, Assistant Director BRENT L. BOWEN, Inspector OFFICE OF THE DONALD L. ROBINSON, Assistant Inspector General BARRY R. SNYDER, Assistant Inspector General CONTROLLER GEORGE E . LIVINGSTON, Controller STEPHEN J. CLARK, Assistant Controller (Programs and Budgets) DARRELL R. PAULEY, Assistant Controller (Finance) DIVISION OF SUPPORT ROBERT E . FRAZIER, SERVICES Director GEORGE M . LOPEZ, Assistant Director DAVID L. WILLIAMS, Assistant Director DIVISION OF INFORMATION MANAGEMENT STEPHEN R . MALPHRUS, RESOURCES Director BRUCE M. BEARDSLEY, Deputy Director MARIANNE M. EMERSON, Assistant Director Po KYUNG KIM, Assistant Director RAYMOND H. MASSEY, Assistant EDWARD T. MULRENIN, Assistant Director Director DAY W. RADEBAUGH, JR., Assistant Director ELIZABETH B. RIGGS, Assistant RICHARD C. STEVENS, Assistant Director Director General A88 Federal Reserve Bulletin • February 1993 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS A L A N GREENSPAN, E. GERALD CORRIGAN, Vice Chairman Chairman WAYNE D . ANGELL EDWARD W . KELLEY, JR. EDWARD G . BOEHNE JOHN R LAWARE SUSAN M . PHILLIPS SILAS KEEHN LAWRENCE B . LINDSEY GARY H . STERN DAVID W . MULLINS, JR. ROBERT D . MCTEER, JR. ALTERNATE J. ALFRED BROADDUS, JR. JERRY L . JORDAN ROBERT P. FORRESTAL JAMES H . OLTMAN MEMBERS ROBERT T. PARRY STAFF DONALD L. KOHN, Secretary and Economist NORMAND R.V. BERNARD, Deputy Secretary JOSEPH R. COYNE, Assistant Secretary GARY P. GILLUM, Assistant Secretary J. VIRGIL MATTINGLY, JR., General Counsel ERNEST T. PATRIKIS, Deputy General Counsel MICHAEL J. PRELL, Economist EDWIN M . TRUMAN, Economist JOHN M . DAVIS, Associate RICHARD G. DAVIS, Associate Economist THOMAS E. DAVIS, Associate Economist DAVID E. LINDSEY, Associate Economist ALICIA H. MUNNELL, Associate Economist LARRY J. PROMISEL, Associate Economist CHARLES J. SIEGMAN, Associate Economist THOMAS D. SIMPSON, Associate Economist DAVID J. STOCKTON, Associate Economist Economist WILLIAM J. MCDONOUGH, Manager of the System Open Market Account MARGARET L. GREENE, Deputy Manager for Foreign Operations JOAN E. LOVETT, Deputy Manager for Domestic Operations FEDERAL ADVISORY COUNCIL MARSHALL N. CARTER, First District CHARLES S. SANFORD, JR., Second District ANTHONY P. TERRACCIANO, Third District JOHN B. MCCOY, Fourth District EDWARD E. CRUTCHFIELD, JR., Fifth District E.B. ROBINSON, JR., Sixth District EUGENE A. MILLER, Seventh District ANDREW B. CRAIG, III, Eighth District JOHN F. GRUNDHOFER, Ninth District DAVID A. RISMILLER, Tenth District (Vacancy), Eleventh District RICHARD M. ROSENBERG, Twelfth District HERBERT V. PROCHNOW, WILLIAM J. KORSVIK, Associate Secretary Secretary CONSUMER ADVISORY COUNCIL DENNY D. DUMLER, Denver, Colorado, Chairman JEAN POGGE, Chicago, Illinois, Vice Chairman BARRY A . ABBOTT, S a n F r a n c i s c o , C a l i f o r n i a BONNIE GUITON, C h a r l o t t e s v i l l e , V i r g i n i a JOHN R . ADAMS, P h i l a d e l p h i a , P e n n s y l v a n i a JOYCE HARRIS, M a d i s o n , W i s c o n s i n JOHN A . BAKER, A t l a n t a , G e o r g i a GARY S . HATTEM, N e w Y o r k , N e w Y o r k VERONICA E . BARELA, D e n v e r , C o l o r a d o JULIA E . HILER, M a r i e t t a , G e o r g i a MULUGETTA BIRRU, P i t t s b u r g h , P e n n s y l v a n i a RONALD HOMER, B o s t o n , M a s s a c h u s e t t s DOUGLAS D . BLANKE, St. P a u l , M i n n e s o t a THOMAS L . HOUSTON, D a l l a s , T e x a s GENEVIEVE BROOKS, B r o n x , N e w Y o r k HENRY JARAMILLO, B e l e n , N e w M e x i c o TOYE L . BROWN, B o s t o n , M a s s a c h u s e t t s EDMUND MIERZWINSKI, W a s h i n g t o n , D . C . CATHY CLOUD, W a s h i n g t o n , D . C . JOHN V. SKINNER, I r v i n g , T e x a s MICHAEL D . EDWARDS, Y e l m , W a s h i n g t o n LOWELL N . SWANSON, P o r t l a n d , O r e g o n MICHAEL FERRY, St. L o u i s , M i s s o u r i MICHAEL W . TIERNEY, W a s h i n g t o n , D . C . NORMA L . FREIBERG, N e w O r l e a n s , L o u i s i a n a GRACE W . WEINSTEIN, E n g l e w o o d , N e w J e r s e y LORI GAY, Los Angeles, California JAMES L . WEST, T i j e r a s , N e w M e x i c o DONALD A . GLAS, H u t c h i n s o n , M i n n e s o t a ROBERT O . ZDENEK, W a s h i n g t o n , D . C . THRIFT INSTITUTIONS ADVISORY COUNCIL DANIEL C. ARNOLD, Houston, Texas, President BEATRICE D'AGOSTINO, Somerville, New Jersey, Vice President WILLIAM A . COOPER, M i n n e a p o l i s , M i n n e s o t a KERRY KILLINGER, S e a t t l e , W a s h i n g t o n PAUL L . ECKERT, D a v e n p o r t , I o w a CHARLES JOHN KOCH, C l e v e l a n d , O h i o GEORGE R . GLIGOREA, S h e r i d a n , W y o m i n g ROBERT MCCARTER, N e w B e d f o r d , M a s s a c h u s e t t s THOMAS J. HUGHES, M e r r i f i e l d , V i r g i n i a STEPHEN W . PROUGH, I r v i n e , C a l i f o r n i a RICHARD D . JACKSON, A t l a n t a , G e o r g i a THOMAS R . RICKETTS, T r o y , M i c h i g a n A90 Federal Reserve Board Publications For ordering assistance, write PUBLICATIONS SERVICES, MS-138, Board of Governors of the Federal Reserve System, Washington, D C 2 0 5 5 1 or t e l e p h o n e ( 2 0 2 ) 4 5 2 - 3 2 4 4 or F A X (202) 728-5886. When a charge is indicated, payment should accompany request and be made payable to the Board of Governors of the Federal Reserve System. Payment from foreign residents should be drawn on a U.S. bank. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNCTIONS. 1984. 120 pp. ANNUAL REPORT. ANNUAL REPORT: BUDGET REVIEW, 1 9 9 1 - 9 2 . FEDERAL RESERVE BULLETIN. M o n t h l y . $ 2 5 . 0 0 p e r y e a r or $2.50 each in the United States, its possessions, Canada, and Mexico. Elsewhere, $35.00 per year or $3.00 each. ANNUAL STATISTICAL DIGEST: period covered, release date, number of pages, and price. October 1982 $ 6.50 1981 239 pp. 1982 December 1983 266 pp. $ 7.50 October 1984 264 pp. $11.50 1983 1984 October 1985 254 pp. $12.50 1985 October 1986 231 pp. $15.00 $15.00 1986 November 1987 288 pp. 1987 October 1988 272 pp. $15.00 1988 November 1989 256 pp. $25.00 March 1991 712 pp. $25.00 1980-89 $25.00 1990 November 1991 185 pp. November 1992 215 pp. $25.00 1991 SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES OF CHARTS. Weekly. $30.00 per year or $.70 each in the United States, its possessions, Canada, and Mexico. Elsewhere, $35.00 per year or $.80 each. THE FEDERAL RESERVE ACT and other statutory provisions affecting the Federal Reserve System, as amended through August 1990. 646 pp. $10.00. REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM. A N N U A L PERCENTAGE RATE TABLES (Truth in L e n d i n g — Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each volume $2.25; 10 or more of same volume to one address, $2.00 each. Introduction to Flow of Funds. 1980. 68 pp. $1.50 each; 10 or more to one address, $1.25 each. Federal Reserve Regulatory Service. Looseleaf; updated at least monthly. (Requests must be prepaid.) Consumer and Community Affairs Handbook. $75.00 per year. Monetary Policy and Reserve Requirements Handbook. $75.00 per year. Securities Credit Transactions Handbook. $75.00 per year. The Payment System Handbook. $75.00 per year. Federal Reserve Regulatory Service. 3 vols. (Contains all four Handbooks plus substantial additional material.) $200.00 per year. Rates for subscribers outside the United States are as follows and include additional air mail costs: Federal Reserve Regulatory Service, $250.00 per year. Each Handbook, $90.00 per year. THE U . S . ECONOMY IN AN INTERDEPENDENT WORLD: A MULTICOUNTRY MODEL, M a y 1 9 8 4 . 5 9 0 p p . $ 1 4 . 5 0 e a c h . WELCOME TO THE FEDERAL RESERVE. M a r c h 1 9 8 9 . 1 4 pp. INDUSTRIAL PRODUCTION—1986 EDITION. D e c e m b e r 1 9 8 6 . 440 pp. $9.00 each. FINANCIAL FUTURES AND OPTIONS IN THE U . S . ECONOMY. December 1986. 264 pp. $10.00 each. FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALY- SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each. CONSUMER EDUCATION PAMPHLETS Short pamphlets suitable for classroom use. Multiple copies are available without charge. Consumer Handbook on Adjustable Rate Mortgages Consumer Handbook to Credit Protection Laws A Guide to Business Credit for Women, Minorities, and Small Businesses How to File A Consumer Credit Complaint Series on the Structure of the Federal Reserve System The Board of Governors of the Federal Reserve System The Federal Open Market Committee Federal Reserve Bank Board of Directors Federal Reserve Banks Organization and Advisory Committees A Consumer's Guide to Mortgage Lock-Ins A Consumer's Guide to Mortgage Settlement Costs A Consumer's Guide to Mortgage Refinancings Home Mortgages: Understanding the Process and Your Right to Fair Lending Making Deposits: When Will Your Money Be Available? When Your Home is on the Line: What You Should Know About Home Equity Lines of Credit A91 STAFF STUDIES: Summaries Only Printed in the Bulletin 1 6 0 . BANKING MARKETS AND THE USE OF FINANCIAL SERVICES BY SMALL AND MEDIUM-SIZED BUSINESSES, b y 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. 161. A Staff Studies 1-145 are out of print. 1 6 2 . EVIDENCE ON THE SIZE OF BANKING MARKETS FROM MORTGAGE LOAN RATES IN TWENTY CITIES, b y S t e p h e n 1 4 6 . THE ROLE OF THE PRIME RATE IN THE PRICING OF BUSINESS LOANS BY COMMERCIAL BANKS, 1 9 7 7 - 8 4 , b y 1 6 3 . CLEARANCE AND SETTLEMENT IN U . S . SECURITIES MAR- Gregory E. Elliehausen and John D. Wolken. September 1990. 35 pp. REVIEW OF CORPORATE RESTRUCTURING ACTIVITY, 1980-90, by Margaret Hastings Pickering. May 1991. 21 pp. A. Rhoades. February 1992. 11 pp. Thomas F. Brady. November 1985. 25 pp. 1 4 7 . REVISIONS IN THE MONETARY SERVICES (DIVISIA) INDEXES OF THE MONETARY AGGREGATES, b y H e l e n T. Farr KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob, Lauren Hargraves, Richard Mead, Jeff Stehm, and Mary Ann Taylor. March 1992. 37 pp. and Deborah Johnson. December 1985. 42 pp. 1 4 8 . THE MACROECONOMIC AND SECTORAL EFFECTS OF THE ECONOMIC RECOVERY TAX ACT: SOME SIMULATION RESULTS, by Flint Bray ton and Peter B. Clark. December 1985. 17 pp. 1 4 9 . THE OPERATING PERFORMANCE OF ACQUIRED FIRMS IN BANKING BEFORE AND AFTER ACQUISITION, b y S t e p h e n REPRINTS OF SELECTED Bulletin ARTICLES Some Bulletin articles are reprinted. The articles listed below are those for which reprints are available. Most of the articles reprinted do not exceed twelve pages. Limit of ten copies A. Rhoades. April 1986. 32 pp. 1 5 0 . STATISTICAL COST ACCOUNTING MODELS IN BANKING: A REEXAMINATION AND AN APPLICATION, b y J o h n T. Rose and John D. Wolken. May 1986. 13 pp. 1 5 1 . RESPONSES TO DEREGULATION: RETAIL DEPOSIT PRICING FROM 1983 THROUGH 1985, by Patrick I. Mahoney, Alice P. White, Paul F. O'Brien, and Mary M. McLaughlin. January 1987. 30 pp. 1 5 2 . DETERMINANTS OF CORPORATE MERGER ACTIVITY: A REVIEW OF THE LITERATURE, by Mark J. Warshawsky. April 1987. 18 pp. 1 5 3 . STOCK MARKET VOLATILITY, b y C a r o l y n D . D a v i s a n d Alice P. White. September 1987. 14 pp. 1 5 4 . T H E EFFECTS ON CONSUMERS AND CREDITORS OF PROPOSED CEILINGS ON CREDIT CARD INTEREST RATES, by Glenn B. Canner and James T. Fergus. October 1987. 26 pp. 1 5 5 . T H E FUNDING OF PRIVATE PENSION PLANS, b y M a r k J. Warshawsky. November 1987. 25 pp. 1 5 6 . INTERNATIONAL TRENDS FOR U . S . BANKS AND BANKING MARKETS, by James V. Houpt. May 1988. 47 pp. 1 5 7 . M 2 PER UNIT OF POTENTIAL G N P AS AN ANCHOR FOR THE PRICE LEVEL, by Jeffrey J. Hallman, Richard D. Porter, and David H. Small. April 1989. 28 pp. 1 5 8 . THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIREMENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE PRODUCTS, by Mark J. Warshawsky with the assistance of Dietrich Earnhart. September 1989. 23 pp. 1 5 9 . N E W DATA ON THE PERFORMANCE OF NONBANK SUBSIDIARIES OF BANK HOLDING COMPANIES, b y N e l l i e L i a n g and Donald Savage. February 1990. 12 pp. Recent Developments in the Bankers Acceptance Market. 1/86. The Use of Cash and Transaction Accounts by American Families. 2/86. Financial Characteristics of High-Income Families. 3/86. Prices, Profit Margins, and Exchange Rates. 6/86. Agricultural Banks under Stress. 7/86. Foreign Lending by Banks: A Guide to International and U.S. Statistics. 10/86. Recent Developments in Corporate Finance. 11/86. Measuring the Foreign-Exchange Value of the Dollar. 6/87. Changes in Consumer Installment Debt: Evidence from the 1983 and 1986 Surveys of Consumer Finances. 10/87. Home Equity Lines of Credit. 6/88. Mutual Recognition: Integration of the Financial Sector in the European Community. 9/89. The Activities of Japanese Banks in the United Kingdom and in the United States, 1980-88. 2/90. Industrial Production: 1989 Developments and Historical Revision. 4/90. Recent Developments in Industrial Capacity and Utilization. 6/90. Developments Affecting the Profitability of Commercial Banks. 7/90. Recent Developments in Corporate Finance. 8/90. U.S. Exchange Rate Policy: Bretton Woods to Present. 11/90. The Transmission Channels of Monetary Policy: How Have They Changed? 12/90. Changes in Family Finances from 1983 to 1989: Evidence from the Survey of Consumer Finances. 1/92. U.S. International Transactions in 1991. 5/92. A92 Maps of the Federal Reserve System LEGEND Both pages • Federal Reserve Bank city • Board of Governors of the Federal Reserve System, Washington, D.C. Facing page • Federal Reserve Branch city — Branch boundary NOTE The Federal Reserve officially identifies Districts by number and Reserve Bank city (shown on both pages) and by letter (shown on the facing page). In the 12th District, the Seattle Branch serves Alaska, and the San Francisco Bank serves Hawaii. The System serves commonwealths and territories as follows: the New York Bank serves the Commonwealth of Puerto Rico and the U.S. Virgin Islands; the San Francisco Bank serves American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands. The Board of Governors revised the branch boundaries of the System most recently in December 1991. A93 3-C 2-B 1-A NY ME - 1 < Buffalo / ^Jfr^ NJ 1 Pittsburjglr CT 1* NY N E W YORK WBfcinnati CLEVELAND PHILADELPHIA BOSTON 6 ~ F ^ Birmingham. » 7-G Nashville \ 3kw 5_E 4-D RICHMOND 8-H • ^ ^ # New?Orleans JacicKMiville ^ • CHICAGO ATLANTA MINNEAPOLIS ST. LOUIS ' Omaha* I-MO Okluhoma^City OK KANSAS (^ITY DALLAS Baltimore^ • HAWAN - V SAN FRANCISCO A94 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK branch, or facility Zip Chairman Deputy Chairman President First Vice President BOSTON* 02106 Jerome H. Grossman To be announced Richard F. Syron Cathy E. Minehan NEW YORK* 10045 Ellen V. Futter Maurice R. Greenberg Herbert L. Washington E. Gerald Corrigan James H. Oltman Buffalo 14240 James O. Aston PHILADELPHIA 19105 Jane G. Pepper James M. Mead Edward G. Boehne William H. Stone, Jr. CLEVELAND* 44101 Jerry L. Jordan Sandra Pianalto Cincinnati Pittsburgh 45201 15230 A. William Reynolds To be announced Marvin Rosenberg Robert P. Bozzone RICHMOND* 23219 Anne Marie Whittemore Henry J. Faison To be announced Anne M. Allen J. Alfred Broaddus, Jr. Jimmie R. Monhollon Edwin A. Huston Leo Benatar Donald E. Boomershine Joan D. Ruffier R. KirkLandon James R. Tuerff Lucimarian Roberts Robert P. Forrestal Jack Guynn Richard G. Cline Robert M. Healey J. Michael Moore Silas Keehn William C. Conrad Robert H. Quenon Janet McAfee Weakley To be announced To be announced To be announced Thomas C. Melzer James R. Bowen Delbert W. Johnson Gerald A. Rauenhorst James E. Jenks Gary H. Stern Thomas E. Gainor Burton A. Dole, Jr. Herman Cain Barbara B. Grogan Ernest L. Holloway Sheila Griffin Thomas M. Hoenig Henry R. Czerwinski Leo E. Linbeck, Jr. Cece Smith To be announced To be announced To be announced Robert D. McTeer, Jr. Tony J. Salvaggio James A. Vohs Judith M. Runstad Donald G. Phelps William A. Hilliard Gary G. Michael George F. Russell, Jr. Robert T. Parry Patrick K. Barron Baltimore 21203 Charlotte 28230 Culpeper Communications and Records Center 22701 ATLANTA Birmingham Jacksonville Miami Nashville New Orleans 30303 35283 32231 33152 37203 70161 CHICAGO* 60690 Detroit 48231 ST. LOUIS 63166 Little Rock Louisville Memphis 72203 40232 38101 MINNEAPOLIS 55480 Helena KANSAS CITY Denver Oklahoma City Omaha DALLAS El Paso Houston San Antonio 59601 64198 80217 73125 68102 75201 79999 77252 78295 SAN FRANCISCO 94120 Los Angeles Portland Salt Lake City Seattle 90051 97208 84125 98124 Vice President in charge of branch Charles A. Cerino1 Harold J. Swart1 Ronald B. Duncan 1 Walter A. Varvel1 John G. Stoides 1 Donald E. Nelson 1 Fred R. Herr1 James D. Hawkins 1 James T. Curry III Melvyn K. Purcell Robert J. Musso Roby L. Sloan 1 Karl W. Ashman Howard Wells John P. Baumgartner John D. Johnson Kent M. Scott David J. France Harold L. Shewmaker Sammie C. Clay Robert Smith, III1 Thomas H. Robertson John F. Moore 1 E. Ronald Liggett 1 Andrea P. Wolcott Gordon Werkema1 •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. Publications of Interest FEDERAL RESERVE CONSUMER CREDIT PUBUCATIONS The Federal Reserve Board publishes a series of pamphlets covering individual credit laws and topics, as pictured below. The series includes such subjects as how the Equal Credit Opportunity Act protects women against discrimination in their credit dealings, how to use a credit card, and how to resolve a billing error. The Board also publishes the Consumer Handbook to Credit Protection Laws, a complete guide to consumer credit protections. This forty-four-page booklet explains how to shop and obtain credit, how to maintain a good credit rating, and how to dispute unfair credit transactions. Three booklets on the mortgage process are also available: A Consumer's Guide to Mortgage Lock-Ins, A Consumer's Guide to Mortgage Refinancings, and A Consumer's Guide to Mortgage Settlement Costs. These booklets were prepared in conjunction with the Federal Home Loan Bank Board and in consultation with other federal agencies and trade and consumer groups. Copies of consumer publications are available free of charge from Publications Services, mail stop 138, Board of Governors of the Federal Reserve System, Washington, DC 20551. Multiple copies for classroom use are also available free of charge. Federal Reserve Statistical Releases Available on the Commerce Department's Economic Bulletin Board The Board of Governors of the Federal Reserve System makes some of its statistical releases available to the public through the U.S. Department of Commerce's economic bulletin board. Computer access to the releases can be obtained by sub- scription. For further information regarding a subscription to the economic bulletin board, please call 202-377-1986. The releases transmitted to the economic bulletin board, on a regular basis, are the following: Reference Number Statistical release Frequency of release H.3 Aggregate Reserves Weekly/Thursday H.4.1 Factors Affecting Reserve Balances Weekly/Thursday H.6 Money Stock Weekly/Thursday H.8 Assets and Liabilities of Insured Domestically Chartered and Foreign Related Banking Institutions Weekly/Monday H.10 Foreign Exchange Rates Weekly/Monday H.15 Selected Interest Rates Weekly/Monday G.5 Foreign Exchange Rates Monthly/end of month G.17 Industrial Production and Capacity Utilization Monthly/midmonth G.19 Consumer Installment Credit Monthly/fifth business day Z.7 Row of Funds Quarterly Publications of Interest FEDERAL RESERVE REGULATORY SERVICE To promote public understanding of its regulatory functions, the Board publishes the Federal Reserve Regulatory Service, a three-volume looseleaf service containing all Board regulations as well as related statutes, interpretations, policy statements, rulings, and staff opinions. For those with a more specialized interest in the Board's regulations, parts of this service are published separately as handbooks pertaining to monetary policy, securities credit, consumer affairs, and the payment system. These publications are designed to help those who must frequently refer to the Board's regulatory materials. They are updated monthly, and each contains citation indexes and a subject index. The Monetary Policy and Reserve Requirements Handbook contains Regulations A, D, and Q, plus related materials. The Securities Credit Transactions Handbook contains Regulations G, T, U, and X, dealing with extensions of credit for the purchase of securities, together with related statutes, Board interpretations, rulings, and staff opinions. Also included are the Board's list of marginable OTC stocks and its list of foreign margin stocks. The Consumer and Community Affairs Handbook contains Regulations B, C, E, M, Z, AA, and BB, and associated materials. The Payment System Handbook deals with expedited funds availability, check collection, wire transfers, and risk-reduction policy. It includes Regulation CC, Regulation J, the Expedited Funds Availability Act and related statutes, the official Board commentary on Regulation CC, and policy statements on risk reduction in the payment system. For domestic subscribers, the annual rate is $200 for the Federal Reserve Regulatory Service and $75 for each Handbook. For subscribers outside the United States, the price including additional air mail costs is $250 for the Service and $90 for each Handbook. All subscription requests must be accompanied by a check or money order payable to the Board of Governors of the Federal Reserve System. Orders should be addressed to Publications Services, mail stop 138, Board of Governors of the Federal Reserve System, Washington, DC 20551. U.S. MONETARY POLICY AND FINANCIAL MARKETS U.S. Monetary Policy and Financial Markets by AnnMarie Meulendyke offers an in-depth description of the way monetary policy is developed by the Federal Open Market Committee and the techniques employed to implement policy at the Open Market Trading Desk. Written from her perspective as a senior economist in the Open Market Function at the Federal Reserve Bank of New York, Ann-Marie Meulendyke describes the tools and the setting of policy, including many of the complexities that differentiate the process from simpler textbook models. Included is an account of a day at the Trading Desk, from morning information-gathering through daily decisionmaking and the execution of an open market operation. The book also places monetary policy in a broader context, examining first the evolution of Federal Reserve monetary policy procedures from their beginnings in 1914 to the end of the 1980s. It indicates how policy operates most directly through the banking system and the financial markets and describes key features of both. Finally, the book turns its attention to the transmittal of monetary policy actions to the U.S. economy and throughout the world. The book is $5.00 a copy for U.S. purchasers and $10.00 for purchasers outside the United States. Copies are available from the Public Information Department, Federal Reserve Bank of New York, 33 Liberty Street, New York, NY 10045. Checks must accompany orders and should be payable to the Federal Reserve Bank of New York in U.S. dollars.