Full text of Federal Reserve Bulletin : February 1994
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VOLUME 8 0 •
NUMBER 2 •
FEBRUARY 1994
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D . C .
PUBLICATIONS COMMITTEE
Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood • Donald L. Kohn
• J. Virgil Mattingly, Jr. • Michael J. Prell • Richard Spillenkothen • Edwin M. Truman
The Federal Reserve Bulletin is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions
expressed except in official statements and signed articles. It is assisted by the Economic Editing Section headed by S. Ellen Dykes, the Graphics
Center under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles.
Table of Contents
79 RESIDENTIAL LENDING TO LOW-INCOME
AND MINORITY FAMILIES: EVIDENCE
FROM THE 1992 HMDA DATA
In recent years, the access of lower-income
and minority households to mortgage credit
has drawn considerable attention, as more
information about mortgage lending has
become available under the Home Mortgage
Disclosure Act (HMDA). This article uses the
HMDA data to analyze patterns of loan applications and their disposition by the income,
race, or ethnicity of the applicant and by the
location of the property pertaining to the loan.
It also examines lending in different types of
neighborhoods, including those in central city
and in noncentral city locations, and describes
the role of mortgage originators and of institutions that purchase mortgages. Finally, it
reviews the use of HMDA data to monitor the
way institutions comply with laws pertaining
to fair lending, community reinvestment, and
affordable housing.
109 INDUSTRIAL PRODUCTION AND
CAPACITY UTILIZATION
Industrial production rose 0.9 percent in
November, following a revised gain of
0.7 percent in October. The recent strength in
output boosted the utilization of total industrial capacity 0.6 percentage point in November and 0.5 percentage point in October.
Capacity utilization in November stood at
83.0 percent.
In December, industrial production rose
0.7 percent. At 114.0 percent of its 1987 average, industrial production in December was
4.6 percent above its level a year earlier.
Reflecting the sustained strong growth in output, the utilization of total industrial capacity
rose 0.5 percentage point in December. Capac-
ity utilization at the end of 1993 stood at
83.5 percent, 2.5 percentage points above its
year-ago level but still below its most recent
1988-89 peak.
114 STATEMENT TO THE CONGRESS
J. Virgil Mattingly, General Counsel, Board of
Governors, testifies in connection with the
hearing into requests that Sheikh Zayed
al-Nahyan and two of his adult sons be
granted head-of-state immunity in connection
with pending civil litigation relating to the
acquisition of the First American banking
organization by the Bank of Credit and
Commerce International, S.A. (BCCI) and
briefly summarizes the BCCI matter and the
Board's enforcement actions relating to it,
before the House Committee on Banking,
Finance and Urban Affairs, December 9,1993.
118 ANNOUNCEMENTS
Appointment of new members to the Thrift
Institutions Advisory Council.
Amendments to Regulation A.
Amendments to Regulation B.
Amendments to the risk-based capital guidelines affecting the treatment of certain multifamily housing loans.
Proposal to assess charges for examinations of
U.S. branches, agencies, and representative
offices of foreign banks; proposal to amend
the risk-based capital guidelines for state
member banks and bank holding companies to
include in tier 1 capital net unrealized holding
gains and losses on securities available for
sale.
Change in Board staff.
120 MINUTES OF OF THE FEDERAL OPEN
MARKET COMMITTEE MEETING
At its meeting on November 16, 1993, the
Committee adopted a directive that called for
maintaining the existing degree of pressure on
reserve positions and that did not include a
presumption about the likely direction of any
adjustment to policy during the intermeeting
period. The directive stated 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 or slightly lesser
reserve restraint might be acceptable during
the intermeeting period. The reserve conditions associated with this directive were
expected to be consistent with modest growth
in M2 and M3 over coming months.
129 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 28,1993.
A3 GUIDE TO TABULAR PRESENTATION
A4 Domestic Financial Statistics
A45 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
A90 FEDERAL RESERVE BOARD
PUBLICATIONS
A92 MAPS OF THE FEDERAL RESERVE
SYSTEM
A94 FEDERAL RESERVE BANKS, BRANCHES,
AND OFFICES
Residential Lending to Low-Income
and Minority Families:
Evidencefromthe 1992 HMDA Data
Glenn B. Canner and Wayne Passmore, of the
Board's Division of Research and Statistics, and
Dolores S. Smith, of the Division of Consumer and
Community Affairs, prepared this article. Kim
Koenig, of the Division of Research and Statistics,
and Cyndi Johnson, Jeffrey Phipps, and Marilyn
Rhyne, of the Division of Information Resources
Management, provided assistance.
ryjc
Since 1976, the Home Mortgage Disclosure Act
(HMDA) has required most depository institutions
with offices in metropolitan areas to provide data
on the geographic location of the home purchase
and home improvement loans they originate or buy.
In recent years, as more information about mortgage lending has become available under HMDA,
the access of lower-income and minority households to mortgage credit has drawn considerable
attention and has stimulated initiatives in the private and public sectors to increase availability.
The expanded data have come about as the result
of legislative amendments in 1989 and 1991 that
increased the scope of the information that lenders
must collect and the coverage of lenders required
to report.1 Under HMDA, lenders now disclose
information on the disposition of home loan applications and on the race or national origin, gender,
and annual income of loan applicants and borrowers. They also disclose the type of secondary market purchaser for loans that are originated or bought
by the lender in the same year as the sale. Independent mortgage companies (firms not affiliated
with a depository institution) now are among the
lenders covered by the act; many of them are
1. The Financial Institutions Reform, Recovery and Enforcement Act of 1989 contains the 1989 amendments to HMDA; the
Federal Deposit Insurance Corporation Improvement Act of 1991
contains the 1991 amendments.
active lenders, often extending credit in dozens of
metropolitan areas.
This article uses the HMDA data to study developments in the mortgage market and continues the
analyses published in two previous Bulletin articles.2 It uses the 1992 data to analyze patterns of
loan applications and their disposition by the
income, race, or ethnicity of the applicant and by
the location of the property involved in the loan. It
examines lending in different types of neighborhoods, including those in central city and in noncentral city locations, and describes the role of
mortgage originators and of institutions that purchase mortgages. Finally, it reviews the use of
HMDA data to monitor the way institutions comply with laws pertaining to fair lending, community
reinvestment, and affordable housing.
SUMMARY OF THE FINDINGS FOR
1992
The HMDA data show that by far the most common type of home loan requested by consumers
during 1992 was for refinancing, which accounted
for more than half of all home loan applications.
Among loans used to purchase homes, die share of
loans insured by the Federal Housing Administration (FHA) dropped sharply from the previous year.
The drop probably resulted from the recent
increases in the costs to homebuyers of using FHAinsured loans and from the greater availability of
conventional loan products designed to reach lowand moderate-income homebuyers.
2. See Glenn B. Canner and Dolores S. Smith, "Home Mortgage
Disclosure Act: Expanded Data on Residential Lending," Federal
Reserve Bulletin, vol. 77 (November 1991), pp. 859-81; and Glenn
B. Canner and Dolores S. Smith, "Expanded HMDA Data on
Residential Lending: One Year Later," Federal Reserve Bulletin,
vol. 78 (November 1992), pp. 801-24.
80
Federal Reserve Bulletin • February 1994
Most applications in 1992 for home loans were
approved, particularly those to buy homes or to
refinance existing loans. The rates of denial varied
among applicants grouped by their income and
racial or ethnic characteristics (see the box "Denial
Rates for Home Loans, by Racial or Ethnic Characteristics of Applicants"). Differences in the distribution of applicants by income accounted for some
of the differences in loan disposition rates among
racial or ethnic groups, but other factors also
seemed to be important because white applicants in
all income groups had lower rates of denial than
black or Hispanic applicants. These disparities raise
the possibility of unlawful discrimination against
some minority applicants.
The HMDA data provide little information about
other factors that might explain differences in
denial rates among racial or ethnic groups. For
example, the data do not include detailed information about the financial circumstances of loan applicants or the characteristics of the properties that
applicants sought to purchase, refinance, or improve. When used in conjunction with other
information, however, the HMDA data facilitate
assessment by government agencies of lenders'
compliance with the fair lending laws.
The HMDA data show that the 1992 rates of
loan approval rose and rates of denial fell from
those of the previous year for black and for white
applicants for government-backed and for conventional home purchase loans. They show a large
increase in the number of conventional home purchase loans extended to low-income and to black
families. The types and quantities of home loans
extended in 1992 varied considerably across neighborhoods grouped by median family income, racial
or ethnic composition, and location (that is,
whether central city or noncentral city); differences
in the socioeconomic and housing characteristics of
neighborhoods offer possible explanations for these
lending patterns.
The HMDA data also shed light on the secondary market for mortgages. Institutions in the secondary mortgage market play a prominent role in
the U.S. housing market. Secondary market participants generally do not originate loans, but they do
specify the underwriting guidelines that loans must
meet to be eligible for purchase or securitization.
Two government-sponsored enterprises dominate
secondary market purchases in conventional mort
Denial Rates for Home Loans, by Racial or
Ethnic Characteristics of Applicants
The 1992 HMDA data show that rates of loan application denial vary by racial and ethnic characteristics.
For example, for conventional home purchase loans,
about 36 percent of black applicants, 27 percent of
Hispanic applicants, 16 percent of white applicants,
and 15 percent of Asian applicants were denied credit.
As discussed in detail in the text, many factors may
account for these differences.
Proportion of home loan applications denied, by
purpose of loan and characteristics of applicant, 1992
Percent
Racial or
ethnic
characteristic
of applicant
Asian/Pacific
Islander..
Black
White
Home purchase
Governmentbacked1
Conventional
13.5
23.8
18.5
12.8
15.3
35.9
27.3
15.9
Refinancing
Home
improvement
15.8
23.6
24.5
10.4
28.3
39.7
41.1
18.8
1. Loans backed by the Federal Housing Administration,
the Department of Veterans Affairs, or the Farmers Home
Administration.
SOURCE. Federal Financial Institutions Examination Council, Home
Mortgage Disclosure Act.
gage loans—the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan
Mortgage Corporation (Freddie Mac). Recent legislation directs both agencies to meet loan-purchase
targets for low-income and for central city borrowers. The HMDA data have limitations for
measuring Fannie Mae's and Freddie Mac's performance in helping to meet these affordable housing
goals. However, the data suggest that the mortgages purchased by other secondary market institutions in 1992 generally included higher proportions
of conventional home loans extended to lowerincome families and to families living in central
cities relative to the purchases by Fannie Mae and
Freddie Mac.
A BRIEF DESCRIPTION
OF THE 1992 HMDA DATA
In 1992, 9,073 home lenders submitted HMDA
data, including 5,468 commercial banks, 1,395 savings associations, 1,706 credit unions, and 504
Residential Lending to Low-Income and Minority Families: Evidence from the 1992 HMD A Data
1. Residential lending activity reported by financial
institutions covered by HMDA, 1981-92
Number
of
loans1
(millions)
Number of
reporting
institutions
Number of
disclosure
reports
1981
1982
1983
1984
1985
1986
1.28
1.13
1.71
1.86
1.98
2.83
8,094
8,258
8,050
8,491
9,072
8,898
10,945
11,357
10,970
11,799
12,567
12,329
1987
1988
1989
19902
1991
1992
3.42
3.39
3.13
6.59
7.89
12.01
9,431
9,319
9,203
9,332
9,358
9,073
13,033
13,919
14,154
24,041
25,934
28,782
Year
1. Before 1990, includes only loans originated by covered institutions;
beginning in 1990 (first year under revised reporting system), includes loans
originated and purchased, applications approved but not accepted by the
applicant, applications denied or withdrawn, and applications closed because
information was incomplete.
2. Revised from preliminary figures published in Glenn B. Canner and
Dolores S. Smith, "Home Mortgage Disclosure Act: Expanded Data on
Residential Lending," Federal Reserve Bulletin, vol. 77 (November 1991),
p. 861, to reflect corrections and the reporting of additional data.
SOURCE. FFIEC, Home Mortgage Disclosure Act.
mortgage companies, of which 224 were independent entities (table l). 3 The number of creditors
disclosing lending data fell about 3 percent from
1991, a decrease reflecting the effects of acquisitions, mergers, and failures.4 Nonetheless, total
reported loan applications and purchased loans
increased more than 50 percent, from 7.9 million to
12.0 million. (For information on how members of
the public can receive HMDA data, see the box
"Public Access to HMDA Data.")
In 1992, lenders covered by HMDA acted on
roughly 10.0 million home loan applications and
reported information on nearly 2.0 million loans
they purchased from other institutions. Of the
3.5 million applications for home purchase loans,
2.8 million (more than three-fourths) were for conventional mortgage loans (table 2). The remainder
were for government-backed credit—loans insured
or guaranteed by the Federal Housing Administra-
3. The commercial bank total includes some savings banks
whose primary federal regulator is the Federal Deposit Insurance
Corporation, and the savings association total comprises only institutions regulated by the Office of Thrift Supervision.
4. For 1992 and previous years, only mortgage companies with
$10 million or more in assets were required to report under the
HMDA. Since 1993, mortgage companies that make 100 or more
home purchase loans or refinancings of home purchase loans are
required to report, regardless of asset size.
81
Public Access to HMDA Data
V '.•V.'J
->Jr f.
t\i>
sT&ijSj
To make public access to HMDA data easier, the
Federal Financial Institutions Examination Council
(FFIEC) makes the data available for purchase in
several media. Facsimiles of disclosure reports for the
individual institutions and the aggregate reports for
each metropolitan statistical area (MSA) are available
in hard copy and on microfiche. The HMDA Loan/
Application Register (HMDA-LAR) records and
selected census data for each census tract in each MSA
are available on PC diskette, and those for the entire
nation are available on computer tape. In the near
future, disclosure statements and HMDA-LAR records
will be available on CD-ROM. The sociodemographic
data used to prepare the HMDA disclosure reports
include data from the 1980 and the 1990 decennial
Census of Population and Housing and annual estimates of the median four-person family income for
each MSA from the Department of Housing and
Urban Development; these data can also be obtained
from the FFIEC.
The FFIEC also makes available a series of reports
drawn from the HMDA data analysis system that has
been developed by the regulatory agencies to enhance
their fair lending enforcement and Community Reinvestment Act assessment efforts. These reports provide information about the lending activity of individual institutions in forms different from the standard
tables used for the disclosure statements. For instance,
one report provides information about the number and
dollar amount of loan applications and their disposition by census tract; it also displays a variety of
socioeconomic data for each census tract.
For information about the availability of data or to
request data from the FFIEC, contact the HMDA
Operations Unit, Mail Stop 502, Board of Governors
of the Federal Reserve System, Washington DC
20551. A copy of the HMDA data order form may
be obtained by calling the HMDA Assistance Line
(202) 452-2016.
tion (FHA), the Department of Veterans Affairs
(VA), or the Farmers Home Administration
(FmHA). (See the box "How HMDA Data Are
Collected and Distributed.")
Lending institutions specialize in different types
of loans (table 3). In 1992, depository institutions
originated about 60 percent of home loans of all
types; independent mortgage companies or the
mortgage company affiliates of depository institutions originated the rest. Home purchase loan orig-
82
2.
Federal Reserve Bulletin • February 1994
Number of applications for home loans, by purpose and type of loan, 19921
Number in thousands
Loans on
multifamily
dwellings
(five or more
families)
Loans on one- to four-family dwellings
Type
Home
purchase
FHA-insured
VA-guaranteed
FmHA-insured
Conventional
Total
Home
improvement
Refinancing
557.1
223.3
2.7
2,754.4
3,537.5
196.6
104.7
94.4
1.9
*
*
*
*
4,917.4
5,218.8
1,145.3
1,241.7
30.4
30.6
2,556.2
198.1
4,505.7
411.5
1,134.9
10.3
*
MEMO:
Conventional
Conforming2
Nonconforming
1. In this and subsequent tables, components may not sum to totals
because of rounding.
2. Loans less than $202,300 in size.
* Fewer than 500.
SOURCE. FFIEC, Home Mortgage Disclosure Act.
inations of all types were about evenly divided
between depositories and mortgage companies,
whereas almost three-fourths of the governmentbacked home purchase loans were originated by
mortgage companies (including those affiliated
with depositories). Depository institutions, excluding their mortgage company affiliates, were the
dominant source of home improvement and multifamily loans, with commercial banks providing
most of the home improvement loans and savings
associations providing the majority of multifamily
loans.
a mortgage. Applications for refinancing grew
almost 150 percent from the previous year, causing
the total number of home loan applications to
increase markedly. The substantial increase in
refinancing applications reflected lower mortgage
rates, the greater availability of no-fee loans, and
the more efficient processing of applications.5
In 1992, a decline in FHA activity from 1991
resulted in an increase in the conventional mortgage share of home purchase loan applications.
Applications for FHA-insured loans accounted for
15.7 percent of all applications for home purchase
APPLICATIONS
5. With a no-fee loan, the borrower incurs no out-of-pocket
expenses for either closing costs or discount points on the loan.
Such loans are often written with a higher interest rate to compensate the lender, and closing costs are frequently added to the
outstanding mortgage balance.
FOR HOME
LOANS
In 1992, by far the most common type of home
loan requested by consumers was for refinancing
3.
Home lending, by type and purpose of loan and by type of lender, 1992
Number of loans and percent distribution
Type of lender
Purpose of loan
Commercial bank
Number
621,514
Home purchase
FHA-insured
45,075
VA-guaranteed
19,958
FmHA-insured
662
Conventional
555,819
1,224,540
Home refinancing
563,764
Home improvement...
Multifamily2
7,603
All
2,417,421
Savings association
Mortgage company1
Total
Percent
Number
Percent
Number
Percent
Number
Percent
Number
Percent
25.2
11.2
12.2
39.6
29.3
31.0
71.2
38.4
33.5
544,438
59,419
23,637
477
460,905
1,041,712
81,532
9,943
1,677,625
22.1
14.8
14.5
28.5
24.3
26.4
10.3
50.3
23.2
34,570
782
2,079
2
31,707
136,320
84,969
509
256,368
1.4
0.2
1.3
0.1
1.7
3.5
10.7
2.6
3.6
1,263,301
296,730
117,646
531
848,394
1,542,863
61,773
1,730
2,869,667
51.3
73.8
72.0
31.8
44.7
39.1
7.8
8.7
39.7
2,463,823
402,006
163,320
1,672
1,8%,825
3,945,435
792,038
19,785
7,221,081
100
100
100
100
100
100
100
100
100
1. Includes independent mortgage companies and mortgage companies
affiliated with a commercial bank or savings association.
Credit union
2. Includes dwellings for five or more families,
SOURCE. FFIEC, Home Mortgage Disclosure Act.
Residential Lending to Low-Income and Minority Families: Evidence from the 1992 HMD A Data
83
loans compared with 20.4 percent in 1991. ConcurHow HMDA Data Are Collected
rently, the share of all home purchase loan originaand Distributed
tions insured by the FHA fell from 20.5 percent to
16.3 percent. Increases in the cost to homebuyers
Under the provisions of the Federal Reserve Board's
of using FHA-insured loans, along with the greater
Regulation C (Home Mortgage Disclosure), each
availability of conventional loan products for lowinstitution covered by HMDA completes and submits
and moderate-income homebuyers, may have
a HMDA Loan/Application Register (HMDA-LAR).
encouraged the shift. Still, tens of thousands of
The HMDA-LAR is a report form used to record data
households—particularly first-time homebuyers—
for each loan application acted on and for each loan
used the program to buy homes.6
purchased. It includes information on the race or
Homeowners infrequently use the FHA program,
national origin, gender, and annual income of the
compared with conventional loans, to refinance an
applicants or borrowers; the size of the loan; the
geographic location of the property; and the identity
existing mortgage. In 1992, applications for FHA
loans accounted for only 3.8 percent of the applica- I of the secondary market purchaser if the loan was
sold. Lenders send this report form to their respective
tions for refinancing loans. The small share of
federal supervisory agency, which then forwards the
refinancings insured by the FHA is not surprising
data to the Board for processing. (Institutions superbecause households that refinance often have suffivised by the National Credit Union Administration,
cient equity in their homes and have accumulated
the Comptroller of the Currency, or the Federal
enough other assets to cover the larger downDeposit Insurance Corporation submit data—
payment typically required for a conventional
beginning with HMDA data for 1993—directly to the
mortgage.
Federal
Reserve Board.) The Board, acting on behalf
M
In general, households with lower incomes are
of the Federal Financial Institutions Examination
more likely than households with higher incomes
Council (FFIEC) and the Department of Housing and
to use government-sponsored home loan programs,
Urban Development (HUD) produces, for each covered lender, a HMDA disclosure statement that
particularly those of the FHA and the FmHA. In
includes a report about the lender's activities for each
1992, one-third of applicants for home purchase m
m
metropolitan statistical area (MSA) in which the
loans with incomes below the median family
lender has an office. For 1992, disclosure statements
income for their metropolitan statistical area
consisted
of nearly 28,782 reports, an increase from
(MSA) applied for government-backed loans; in
the 25,934 prepared for 1991 (table 1). The Board
contrast, only 13 percent of applicants with
also produces aggregate reports describing overall
incomes greater than 120 percent of the median
lending activity by covered institutions in each MSA.
family income for their MSA applied for such
The public can obtain a copy of an individual
loans (table 4).
lender's disclosure statement from a central data
The greater reliance of lower-income households
depository (typically a library or an office of a local
government agency) located in the MSA where the
on government-backed loans reflects several faclender has offices or from the lender itself. The central
tors. The limits on the amount of FHA loan insurdata depositories also make the aggregate MSA
ance make these loans unavailable to households
reports available to the public.
seeking to buy more expensive properties, and the
low downpayment requirements make them particularly attractive to lower-income households and to
first-time homebuyers, who are likely to have fewer
Among racial groups, applicants who are black
financial resources for downpayments and closing
are more likely than other applicant groups to seek
costs.
government-backed home purchase loans. In 1992,
about 41 percent of the black applicants who
applied for a home purchase loan sought a
6. In 1992, approximately 49 percent of those who used section
government-backed
mortgage; the comparable fig203(b) FHA loans (the principal type of FHA single-family loan
ures for Hispanics, whites, and Asians were 31 perprogram) were first-time homebuyers. The proportion was even
higher in 1991, when 57 percent of the borrowers were first-time
cent, 21 percent, and 11 percent respectively.
homebuyers. See U.S. Department of Housing and Urban DevelopAs in previous years, the differences in the use of
ment, Characteristics of FHA Single-Family Mortgages:
Selected
Sections of the National Housing Act, 1991 and 1992.
government-backed home purchase loan programs
84
4.
Federal Reserve Bulletin • February 1994
Home loan applications, by purpose of loan, characteristics of applicant, and characteristics of census tract
in which property is located, 1992
Number and percent
Home purchase
Home refinancing
Government-backed
Applicant or census tract
characteristic
1
Home improvement
Conventional
Number
Percentage
distribution
Percentage
of group's
home
purchase
loans
Race or ethnic group
of applicant
American Indian/
Alaskan native
Asian/Pacific Islander . . .
Black
Hispanic
White
Other
Joint (white/minority) . . .
Total
3,809
11,641
80,553
52,277
583,931
2,353
23,432
757,996
.5
1.5
10.6
6.9
77.0
.3
3.1
100
Income of applicant
(percentage of
MSA median)2
Less than 80
80-99
100-120
More than 120
Total
214,841
127,128
97,795
158,962
598,726
Racial composition of
census tract (minorities
as percentage of
population)
Less than 10
10-19
20-49
50-79
80-100
Total
Number
Percentage
distribution
Percentage
of group's
home
purchase
loans
Number
Percentage
distribution
Number
Percentage
distribution
23.2
10.6
41.2
31.0
20.9
17.9
31.6
22.5
12,617
98,073
114,793
116,327
2,208,691
10,774
50,662
2,611,937
.5
3.8
4.4
4.5
84.6
.4
1.9
100
76.8
89.4
58.8
69.0
79.1
82.1
68.4
77.5
19,569
224,845
134,544
187,910
4,154,069
23,023
98,877
4,842,836
.4
4.6
2.8
3.9
85.8
.5
2.0
100
6,296
21,116
93,823
87,912
825,622
7,922
17,245
1,059,936
.6
2.0
8.9
8.3
77.9
.7
1.6
100
35.9
21.2
16.3
26.6
100
33.4
33.4
27.8
13.2
23.2
427,595
253,718
254,015
1,046,010
1,981,338
21.6
12.8
12.8
52.8
100
66.6
66.6
72.2
86.8
76.8
580,647
476,455
530,573
2,556,198
4,143,873
14.0
11.5
12.8
61.7
100
315,518
135,243
119,810
376,994
947,565
33.3
14.3
12.6
39.8
100
252,107
146,451
144,915
42,160
26,335
611,968
41.2
23.9
23.7
6.9
4.3
100
18.8
25.7
30.5
27.8
29.0
23.2
1,091,972
424,122
330,803
109,396
64,598
2,020,891
54.0
21.0
16.4
5.4
3.2
100
81.2
74.3
69.5
72.2
71.0
76.8
2,207,292
947,501
798,356
254,155
146,689
4,353,993
50.7
21.8
18.3
5.8
3.4
100
490,940
165,177
157,352
67,741
78,941
960,151
51.1
17.2
16.4
7.1
8.2
100
Income of census tract3
Low or moderate
Middle
Upper
Total
105,008
355,012
151,948
611,968
17.2
58.0
24.8
100
30.6
26.5
16.0
23.2
238,566
987,071
795,254
2,020,891
11.8
48.8
39.4
100
69.4
73.5
84.0
76.8
405,550
2,087,332
1,861,111
4,353,993
9.3
47.9
42.7
100
189,203
498,640
272,308
960,151
19.7
51.9
28.4
100
Location of census tract4
Central city
Noncentral city
Total
295,878
320,021
615,889
48.0
52.0
100
27.6
20.2
23.2
775,516
1,261,067
2,036,583
38.1
61.9
100
72.4
79.8
76.8
1,570,342
2,810,150
4,380,492
35.8
64.2
100
429,625
542,027
971,652
44.2
55.8
100
1. Loans backed by the Federal Housing Administration, the Department
of Veterans Affairs, and the Farmers Home Administration.
2. MSA median is median family income of the metropolitan statistical
area (MSA) in which the property related to the loan is located.
3. Census tracts are categorized by the median family income for the tract
relative to the median family income for the metropolitan statistical area
MSA in which the tract is located. Categories are defined as follows: Low
or moderate, median family income for census tract less than 80 percent of
median family income for MSA; Middle income, median family income
80 percent to 120 percent of MSA median; Upper income, median family
income more than 120 percent of MSA median.
4. Includes only census tracts located in MSAs.
SOURCE. FFIEC, Home Mortgage Disclosure Act.
by various racial groups reflected more than differences in income. For instance, among low-income
loan applicants, 53 percent of black applicants
sought FHA or VA loans compared with 40 percent
of Hispanic applicants, 31 percent of white applicants, and 22 percent of Asian applicants. One
possible explanation for this relatively greater reliance of black applicants on government-backed
programs is that black households, on average,
have smaller holdings of liquid assets compared
with those of other low-income households.7
The patterns of applications for refinancings by
the income and race or ethnic characteristics of the
applicants differed from those for home purchase
loans. Higher-income households accounted for
7. Board of Governors of the Federal Reserve System, Survey of
Consumer Finances (Board of Governors, various years).
Residential Lending to Low-Income and Minority Families: Evidence from the 1992 HMD A Data
85
62 percent of all refinancing applications and for
47 percent (calculated from table 4) of all applications for home purchase loans. Also, white applicants accounted for a higher proportion of refinancing applications than of home purchase loan
applications, reflecting the fact that, among homeowners with mortgages, most are white.
As noted earlier, lower-income and minority
applicants were more likely to request governmentbacked mortgages. Consistent with this pattern,
applicants who were seeking homes in lowor moderate-income neighborhoods requested
government-backed mortgage programs more often
than those seeking homes in upper-income neighborhoods. Requests for government-backed loans
also accounted for a higher share of all home
purchase loan applications in neighborhoods with
higher proportions of minority residents.
tion about the size of loan for which they are likely
to qualify. This information comes from several
sources, including real estate agents, who are
involved in most home purchase transactions, and
loan officers, who are often asked to prequalify
prospective homebuyers. Many applicants also
know from experience their likelihood of obtaining
a home loan and tailor their search for a home with
that information in mind. Finally, prospective
borrowers have an incentive to learn about prevailing standards for credit and to postpone an
application until they are likely to qualify because
they usually incur some upfront costs in filing an
application—to cover, at a minimum, a property
appraisal and a credit bureau report. These forms
of prescreening are not as prevalent for home
improvement applications, and the result is a higher
rate of loan denials.
THE DISPOSITION OF HOME LOAN
APPLICATIONS
Disposition Rates for Applicants Grouped by
Income, Race, or Ethnicity \'
The HMDA data show that lenders approve most
home loan applications (table 5).8 In 1992, lenders
approved nearly three-quarters of the applications
for home purchase loans and about 78 percent of
the applications for refinancings. A lower proportion, about two-thirds, of the applications for
home improvement and multifamily loans were
approved. Applications that were not approved may
have been denied by the lender or withdrawn or left
incomplete by the applicant. (Applicants who were
denied at one institution but later accepted by
another institution in the same year appear as both
a denial and an approval in the HMDA data.) In
general, relatively small proportions of the applications for home purchase and refinancing loans are
denied.
The high rates of approval for home purchase
loans are to be expected. Before filing an application, potential homebuyers often obtain informa-
Although most applications for home loans are
approved, the rates of approval and denial vary
among applicants grouped by their income and
racial or ethnic characteristics (table 6).
In 1992, about 81 percent of the applicants for
conventional home purchase loans whose incomes
placed them in the highest income group were
approved for loans, compared with 69 percent for
the lowest income group. A similar relation
between approval rates and applicant income has
been found for other types of home loans, including government-backed home purchase loans, refinancings, and home improvement loans.
Income can be expected to affect an applicant's
ability to qualify for a home purchase loan, but it is
just one element that lenders consider when evaluating creditworthiness. Other factors include the
amount of the loan requested, nonhousing debt,
assets available for downpayment and closing
costs, employment experience, and credit history.
On average, low-income households have fewer
assets and lower net worth and experience more
frequent employment disruptions than high-income
households; these factors combined with a low
income often result in higher loan denial rates.
Compared with Asian and white applicants,
greater proportions of black and Hispanic loan
8. The approval rate is the sum of the proportion of loans
originated from the pool of applications and the proportion of loans
approved but not accepted by the applicant. Applicants who do not
accept an approved loan may have decided not to complete the
transaction or may have applied for and accepted a loan from
another lender.
86
5.
Federal Reserve Bulletin • February 1994
Disposition of applications for home loans, by purpose and type of loan, 1992
Percentage distribution
Home purchase
Type
Approved Approved
and
but not
extended accepted
FHA-insured
VA-guaranteed . . .
FmHA-insured . . .
Conventional
Total
72.2
73.1
61.1
68.9
69.6
2.1
.6
.3
4.0
3.5
Refinancing
Withdrawn
File
closed
Total
14.9
14.0
26.3
17.8
17.2
9.3
10.6
10.2
8.1
8.4
1.5
1.7
2.1
1.2
1.3
100.0
100.0
100.0
100.0
100.0
* Less than 0.05 percent.
74.4
77.4
61.2
75.6
75.6
1.7
1.4
1.1
2.2
2.1
Denied
Withdrawn
File
closed
Total
7.4
6.3
20.1
12.7
12.4
12.8
12.2
16.5
8.3
8.5
3.7
2.7
1.1
1.2
1.4
100.0
100.0
100.0
100.0
100.0
SOURCE. FFIEC, Home Mortgage Disclosure Act.
applicants were turned down for mortgage credit in
1992. For conventional home purchase loans, about
36 percent of black applicants, 27 percent of Hispanic applicants, 15 percent of Asian applicants,
and 16 percent of white applicants were denied
credit. Consistent with these findings, the HMDA
data indicate that the rate of denial for conventional
home purchase loans generally increases as the
proportion of minority residents in a neighborhood
increases (table 7).
Differences in denial rates for applicants grouped
by race or ethnicity reflect a variety of factors,
including differences in the proportion of each
group with relatively low income. In 1992, 21 percent of the white applicants who applied for conventional home purchase loans had incomes that
were less than 80 percent of the median family
income for their MSA (data not shown in tables).
6.
Approved Approved
but not
and
extended accepted
Denied
The comparable percentages were roughly 37 percent for blacks, 28 percent for Hispanics, and
16 percent for Asians. Differences in the distribution of applicants by income account for some, but
clearly not all, of the differences in denial rates
among these groups. Within each income group,
white applicants for conventional home purchase
loans had lower rates of denial than black or Hispanic applicants (table 8).
The differences in denial rates between white
and black or Hispanic applicants have led some to
conclude that widespread racial discrimination
characterizes home lending. Although these disparities raise questions, the reasons for the differences
in denial rates are difficult to determine from the
HMDA data. The HMDA data provide little
information about the characteristics of the properties that applicants seek to purchase, refinance,
Disposition of home loan applications, by purpose of loan and characteristics of applicant, 1992
Percentage distribution
Home purchase
Applicant
characteristic
Government-backed
1
Conventional
Approved
Denied
Withdrawn
File closed
Total
Approved
Denied
Withdrawn
File closed
Total
Race or ethnic group
American Indian/
Alaskan native ..
Asian/Pacific Islander
Black
Hispanic
White
Other
Joint (white/minority)
68.6
74.0
63.4
68.0
77.3
69.8
74.5
17.5
13.5
23.8
18.5
12.8
16.0
14.8
11.7
11.1
10.8
11.3
8.7
11.7
9.6
2.2
1.4
2.0
2.2
1.3
2.5
1.1
100
100
100
100
100
100
100
63.5
72.5
55.1
61.5
75.6
67.1
72.6
26.6
15.3
35.9
27.3
15.9
21.0
17.6
8.7
10.7
7.7
9.5
7.6
10.2
8.6
1.2
1.6
1.3
1.7
1.0
1.7
1.2
100
100
100
100
100
100
100
Income (percentage of
MSA median)2
Less than 80
80-99
100-120
More than 120
74.8
79.7
80.1
79.5
15.4
11.4
10.9
10.7
8.4
7.7
7.9
8.6
1.4
1.2
1.1
1.1
100
100
100
100
68.9
77.5
79.5
80.5
23.3
14.4
12.2
10.2
6.9
7.2
7.4
8.2
.9
.9
.9
1.1
100
100
100
100
1. Loans backed by the Federal Housing Administration, the Department
of Veterans Affairs, and the Farmers Home Administration.
2. MSA median is median family income of the metropolitan statistical
area in which the property related to the loan is located.
SOURCE. F F I E C , H o m e M o r t g a g e D i s c l o s u r e Act.
Residential Lending to Low-Income and Minority Families: Evidence from the 1992 HMD A Data
87
5.—Continued
Multifamily dwellings
Home improvement
Type
Approved Approved
but not
and
extended accepted
FHA-insured
VA-guaranteed . . .
FmHA-insured . . .
Conventional
Total
40.3
80.9
50.6
65.7
63.8
7.8
1.2
*
3.1
3.5
Denied
Withdrawn
File
closed
Total
38.6
5.5
37.3
25.4
26.4
11.6
9.1
12.0
4.9
5.4
1.6
3.2
*
.8
.9
100.0
100.0
100.0
100.0
100.0
or improve or of loan applicants' financial
circumstances—their levels of debt, debt repayment records, employment experience, and other
factors pertinent to an assessment of credit risk—
and no information about the specific underwriting
standards used to evaluate each application.9 Thus,
the data are not a solid basis on which to assess the
fairness of the loan process. When used in conjunction with other information by government agencies, however, the HMDA data are valuable in
helping the agencies assess lenders' compliance
with the fair lending laws.
Differences in Disposition Rates for Home
Purchase Loans between 1991 and 1992
Denial rates for home purchase loan applications,
both conventional and government-backed, were
9. Under HMDA, lenders may report the reasons for credit
denials: Lenders most frequently cited applicants' credit history
problems and excessive debt levels relative to income.
Approved Approved
but not
and
extended accepted
75.3
66.7
19.0
64.7
64.7
1.2
*
*
3.0
3.0
Denied
Withdrawn
File
closed
Total
18.7
25.0
76.2
19.0
19.1
3.6
#
*
12.2
12.1
1.2
8.3
4.8
1.1
1.1
100.0
100.0
100.0
100.0
100.0
lower in 1992 than in 1991 (table 9).10 In 1992,
mortgage rates fell and home values were stable;
these and other developments contributed to the
decline.
Some lenders began making greater use of
affordable home loan programs sponsored by secondary market institutions. Lenders also initiated
special conventional mortgage lending programs to
help low- and moderate-income households, and
those seeking to buy homes in low- and moderateincome neighborhoods, qualify for credit. These
programs have often targeted prospective homebuyers with sufficient income to purchase a home
but with inadequate savings to make substantial
downpayments and pay closing costs.11 In some
10. Denial rates for refinancings dropped significantly, from
15.9 percent to 12.4 percent (data not shown in tables).
11. Some programs established by lenders also target households with few financial assets but keep the monthly payment
obligations within the borrower's reach by waiving the requirement
that private mortgage insurance be obtained for these low downpayment loans.
6.—Continued
Home refinancing
Home improvement
Applicant
characteristic
Approved
Denied
Withdrawn
File closed
Total
Approved
Denied
Withdrawn
File closed
Total
Race or ethnic group
American Indian/
Alaskan native
Asian/Pacific Islander
Black
Hispanic
White
Other
Joint (white/minority)
70.1
71.7
64.1
62.4
80.8
66.8
76.6
17.6
15.8
23.6
24.5
10.4
20.5
13.6
10.4
10.5
10.4
11.0
7.7
10.6
8.5
2.0
2.0
1.9
2.1
1.1
2.1
1.3
100
100
100
100
100
100
100
67.2
62.3
54.4
54.0
75.9
56.8
71.1
27.6
28.3
39.7
41.1
18.8
33.7
23.2
4.6
7.8
5.3
4.2
4.7
8.0
4.9
.6
1.7
.6
.7
.6
1.6
.8
100
100
100
100
100
100
100
Income (percentage of
MSA median)2
Less than 80
80-99
100-120
More than 120
73.5
79.0
80.3
80.2
17.0
12.5
11.4
10.8
8.5
7.5
7.4
7.9
1.1
1.0
1.0
1.1
100
100
100
100
59.4
67.4
70.5
73.5
35.0
27.0
23.7
20.1
5.0
5.0
5.2
5.5
.6
.6
.7
1.0
100
100
100
100
88
7.
Federal Reserve Bulletin • February 1994
Disposition of home loan applications, by purpose of loan and characteristics of census tract
in which property is located, 1992
Percentage distribution
Home purchase
Census tract
characteristic
Government-backed1
Conventional
Withdrawn
File closed
Total
Approved
Denied
Withdrawn
File closed
Total
11.7
13.9
19.1
21.1
11.0
7.6
8.5
10.1
10.8
12.3
1.2
1.4
1.8
2.1
2.4
100
100
100
100
100
80.7
76.1
71.2
65.7
60.5
11.4
13.7
17.7
22.8
27.5
7.0
8.8
9.6
9.9
10.2
.9
1.4
1.5
1.6
1.8
100
100
100
100
100
71.1
77.6
78.9
17.0
12.6
10.7
10.0
8.4
9.0
1.8
1.4
1.4
100
100
100
67.1
76.3
80.1
23.0
15.0
10.1
8.6
7.7
8.4
1.3
1.1
1.3
100
100
100
75.4
78.1
14.0
11.8
9.0
8.7
1.6
1.4
100
100
75.4
77.5
15.1
13.4
8.3
7.9
1.3
1.1
100
100
Approved
Denied
Racial composition
(minorities as percentage
of population)
Less than 10
10-19
20-49
50-79
80-100
80.2
78.3
74.3
68.0
64.2
Income 2
Low or moderate
Middle
Upper
Location of census tract3
Central city
Noncentral city
1. Loans backed by the Federal Housing Administration, the Department
of Veterans Affairs, and the Farmers Home Administration.
2. Census tracts are categorized by the median family income for the tract
relative to the median family income for the metropolitan statistical area
(MSA) in which the tract is located. Categories are defined as follows: Low
or moderate, median family income for census tract less than 80 percent of
median family income for MSA; Middle income, median family income
80 percent to 120 percent of MSA median; Upper income, median family
income more than 120 percent of MSA median.
3. Includes only census tracts located in MSAs.
SOURCE. FFIEC, Home Mortgage Disclosure Act.
programs, the traditional loan underwriting guidelines have been made more flexible. For example,
under the affordable housing programs sponsored
by Fannie Mae and Freddie Mac, the proportion of
the downpayment and closing costs that must come
from the applicant's own savings has been reduced,
and lenders may consider rent and utility payment
records in lieu of other credit history information.12
Evaluating the effect of these targeted loan programs on homeownership by low- and moderateincome households is difficult because many of the
programs have been operating only a short time.
Still, the HMDA data may indicate that these programs are having a positive effect. In particular, the
number of conventional home purchase loans
extended to applicants with incomes below the
median family income for their respective MSA
increased 27 percent from 1991 to 1992 (table 9,
memo item), compared with an increase of 10 percent for borrowers with incomes greater than
120 percent of the median family income.
From 1991 to 1992, the number of conventional
home loans extended to black borrowers increased
26 percent, whereas those to white borrowers
increased 21 percent and those to Hispanic and
Asian borrowers rose 8 percent and 6 percent
respectively. Within each racial or ethnic group, the
changes were largest among lower-income borrowers. For black borrowers whose incomes were
below the median, the increase was 34 percent; for
whites, 28 percent; for Hispanics, 25 percent; and
for Asians, 42 percent (data not shown in tables).
During the same period, rates of loan approval
rose and rates of loan denial fell for black and for
white applicants for both government-backed and
conventional home purchase loans. For example,
the denial rates nationwide for conventional home
purchase loans were 37.4 percent for blacks and
17.3 percent for whites in 1991, compared with
35.9 percent and 15.9 percent respectively in 1992.
In contrast, changes in the approval and denial
rates for Hispanic and Asian applicants were
mixed.
For low-income applicants, the approval rates
rose sharply and the denial rates fell for applications for both government-backed and conventional home purchase loans. For other income
12. Other changes in the underwriting guidelines pertain to the
treatment of nontaxable income and income from seasonal parttime or second jobs, income continuity and job stability, debt-toincome ratios, the appraiser's neighborhood and home improvement analyses, and the condition of the property.
Residential Lending to Low-Income and Minority Families: Evidence from the 1992 HMD A Data
89
7.—Continued
Home improvement
Home refinancing
Census tract
characteristic
Approved
Denied
Withdrawn
File closed
Total
Approved
Denied
Withdrawn
File closed
Total
Racial composition
(minorities as percentage
of population)
Less than 10
10-19
20-49
50-79
80-100
83.3
76.8
73.0
68.1
60.7
8.8
12.7
15.6
19.6
26.2
7.0
8.9
9.8
10.4
11.1
.9
1.6
1.7
1.8
2.1
100
100
100
100
100
74.4
67.8
61.4
54.2
46.9
20.5
25.3
31.1
38.5
45.7
4.6
5.8
6.2
6.0
6.2
.4
1.1
1.3
1.3
1.2
100
100
100
100
100
Income 2
Low or moderate
Middle
Upper
69.1
78.7
79.9
19.4
12.1
10.6
9.9
8.0
8.2
1.6
1.2
1.4
100
100
100
55.6
69.5
72.0
37.9
24.6
21.6
5.6
5.1
5.4
.9
.7
1.0
100
100
100
Location of census tract3
Central city
Noncentral city
76.5
79.4
13.2
11.5
8.8
7.9
1.5
1.2
100
100
63.9
70.4
29.7
23.8
5.5
5.1
.9
.8
100
100
groups, changes in the disposition rates of loan
applications were more modest.
teristics are often not important factors in determining the risk or profitability of loans.14
LENDING ACTIVITY IN NEIGHBORHOODS
WITH DIFFERENT
CHARACTERISTICS
Lending in Neighborhoods with Different
Median Incomes
Using the HMDA data, one can compare lending
activity across neighborhoods (that is, census
tracts) in MSAs grouped by their residents' median
family income and by racial or ethnic composition.
Comparisons of lending among neighborhoods in
the central city and noncentral city portions of
MSAs are also possible.13 Considerable caution
should be exercised in making comparisons.
Although the Bureau of the Census draws the
boundaries of census tracts to include relatively
homogenous populations, the residents of a given
census tract can and sometimes do differ considerably. Diversity across and within neighborhoods
influences the volume and types of lending that
flow to different communities. Once these variations are taken into account, analyses suggest that
neighborhood income and racial or ethnic charac-
13. For both census and HMDA data, if any portion of a census
tract falls within a central city boundary, the entire census tract is
considered to be located in a central city.
The 1992 HMDA data reveal that the types and
quantities of home loans extended by lenders vary
considerably across neighborhoods grouped by
their median family income, racial or ethnic composition, and central city or noncentral city location. The 1990 census information described in the
appendix provides possible explanations for these
variations.
Overall, roughly 10 percent of the home loans
extended by lenders covered by HMDA in 1992
went to borrowers in low- or moderate-income
neighborhoods; nearly half the loans went to borrowers in middle-income neighborhoods; and the
rest went to borrowers in upper-income neighborhoods (table 10). These differences closely match
the distribution of the home loan applications
received by lenders (data not shown in table). The
distribution of the dollar value of home loans and
of applications is more heavily skewed than the
14. Board of Governors of the Federal Reserve System, "Report
to the Congress on Community Development Lending by Depository Institutions" (Board of Governors, 1993).
90
Federal Reserve Bulletin • February 1994
Disposition of home loan applications, by purpose of loan and income and race of applicant, 1992
Percentage distribution
Home purchase
Applicant income and
Government-backed
2
Conventional
Approved
Denied
Withdrawn
File closed
Total
Approved
Denied
Withdrawn
File closed
Total
Less than 80
American Indian/
Alaskan native
Asian/Pacific Islander
Black
Hispanic
White
Other
Joint (white/minority)
69.9
74.7
63.9
69.1
78.2
70.7
73.2
16.9
14.0
24.1
18.6
13.1
17.0
16.6
11.2
10.0
10.0
10.3
7.6
9.8
9.2
2.0
1.3
2.1
1.9
1.1
2.5
1.1
100
100
100
100
100
100
100
63.5
72.6
54.6
58.8
71.7
59.8
65.0
28.0
17.5
36.0
31.8
21.1
30.3
27.3
7.6
8.7
8.0
7.9
6.5
8.8
6.8
.9
1.2
1.4
1.5
.7
1.1
1.0
100
100
100
100
100
100
100
80-99
American Indian/
Alaskan native
Asian/Pacific Islander
Black
Hispanic
White
Other
Joint (white/minority)
77.0
77.4
68.9
73.2
82.2
76.6
79.0
13.4
12.2
20.4
15.2
9.6
12.1
12.5
7.7
8.9
9.0
9.5
7.2
9.9
7.3
1.9
1.6
1.6
2.1
1.0
1.5
1.2
100
100
100
100
100
100
100
70.9
75.6
63.5
65.2
79.9
71.0
72.5
18.8
14.3
26.9
24.6
12.6
19.5
19.0
9.1
9.1
8.3
9.0
6.7
8.4
7.5
1.2
1.1
1.3
1.3
.8
1.1
.9
100
100
100
100
100
100
100
100-120
American Indian/
Alaskan native
Asian/Pacific Islander
Black
Hispanic
White
Other
Joint (white/minority)
75.5
79.5
69.2
72.7
82.5
79.7
78.5
13.8
9.8
20.3
15.2
9.2
9.8
12.5
8.9
9.9
9.0
10.3
7.3
7.3
8.3
1.8
.9
1.4
1.8
.9
3.2
.7
100
100
100
100
100
100
100
73.2
75.6
65.0
67.0
81.7
73.7
76.4
17.0
13.9
24.3
22.3
10.6
15.2
15.2
8.9
9.2
9.3
9.2
7.0
10.2
7.6
.8
1.2
1.4
1.5
.7
.9
.8
100
100
100
100
100
100
100
More than 120
American Indian/
Alaskan native
Asian/Pacific Islander
Black
Hispanic
White
Other
Joint (white/minority)
74.4
74.4
69.9
69.8
82.1
75.3
79.4
13.8
14.1
19.0
17.8
8.9
11.7
11.1
10.5
10.3
9.6
10.4
8.0
1.3
1.1
1.5
1.9
1.0
2.0
.8
100
100
100
100
100
100
100
75.9
73.5
68.1
68.2
82.5
72.8
78.3
12.9
14.2
21.1
19.9
8.8
15.1
11.8
9.8
10.8
9.3
10.3
7.8
10.4
8.7
1.4
1.5
1.6
1.6
1.0
1.7
1.1
100
100
100
100
100
100
100
11.0
8.7
1. Applicant income shown as percentage of the median family income of
the metropolitan statistical area in which the property related to the loan is
located.
2. Loans backed by the Federal Housing Administration, the Department
of Veterans Affairs, and the Farmers Home Administration.
SOURCE. FFIEC, Home Mortgage Disclosure Act.
number of home loans and applications toward
upper-income neighborhoods, reflecting factors that
include the higher average home values in these
neighborhoods.
The HMDA data also indicate that borrowers
who buy, refinance, or improve their homes tend to
have incomes that are higher than the incomes of
other residents of their neighborhoods (compare
table 10 with table A.1).15 Fbr example, in 1992
borrowers in low- and moderate-income neighborhoods had incomes equal to 101 percent of the
median family income of their MSA, whereas the
average income for all residents of these neighborhoods was 58 percent.
When all neighborhoods are grouped by income,
there are fewer low- and moderate-income neighborhoods than middle- or upper-income neighborhoods, and those low-income neighborhoods contain only about 26 percent of the housing units and
a similar percentage of the population residing in
metropolitan areas. Lower levels of lending in lowand moderate-income neighborhoods result partly
from the existence of fewer homes and people.
Also, the relatively small proportion of home loans
in these neighborhoods likely reflects the lower
incomes of residents and the smaller proportion of
owner-occupied housing units relative to other
neighborhoods.
15. For more detail on the distributions discussed in this section,
see the "Report to the Congress on Community Development
Lending."
91
Residential Lending to Low-Income and Minority Families: Evidence from the 1992 HMD A Data
8.—Continued
Home improvement
Home refinancing
Applicant income and
race or ethnic group1
Approved
Denied
Withdrawn
File closed
Total
Approved
Denied
Withdrawn
File closed
Total
Alaskan native
Asian/Pacific Islander
Black
Hispanic
White
Other
Joint (white/minority)
66.3
71.7
58.9
60.7
77.1
60.5
70.9
22.3
17.7
28.8
27.1
14.5
28.5
20.1
10.1
8.9
10.7
10.5
7.5
9.7
7.9
1.4
1.7
1.6
1.7
.9
1.4
1.1
100
100
100
100
100
100
100
62.3
50.6
49.7
49.8
69.9
48.7
63.3
33.5
41.4
44.4
45.8
25.4
43.5
32.0
3.8
6.2
5.4
3.7
4.3
6.3
4.2
.5
1.9
.5
.7
.4
1.4
.5
100
100
100
100
100
100
100
80-99
American Indian/
Alaskan native
Asian/Pacific Islander
Black
Hispanic
White
Other
Joint (white/minority)
70.6
73.8
64.0
63.5
82.1
66.1
76.8
18.1
15.7
23.9
24.4
10.4
22.3
14.6
9.5
9.1
10.4
10.3
6.7
10.1
7.6
1.7
1.5
1.7
1.7
.8
1.4
.9
100
100
100
100
100
100
100
70.8
58.5
55.1
52.7
76.5
55.6
68.6
24.9
33.4
39.0
42.5
18.8
35.9
26.7
3.7
6.9
5.2
4.1
4.2
6.8
4.0
.6
1.2
.7
.7
.4
1.7
.7
100
100
100
100
100
100
100
100-120
American Indian/
Alaskan native
Asian/Pacific Islander
Black
Hispanic
White
Other
Joint (white/minority)
70.8
74.2
64.7
64.6
83.0
69.9
77.7
17.3
14.9
23.2
23.6
9.5
19.4
13.5
10.6
9.3
10.5
10.1
6.7
9.1
7.6
1.3
1.6
1.5
1.7
.8
1.7
1.1
100
100
100
100
100
100
100
69.6
63.1
57.9
54.8
78.5
59.5
71.9
25.6
28.2
36.3
39.9
16.6
28.6
22.1
3.9
7.1
5.1
4.5
4.3
10.7
5.2
.9
1.6
.7
.8
.5
1.2
.7
100
100
100
100
100
100
100
More than 120
American Indian/
Alaskan native
Asian/Pacific Islander
Black
Hispanic
White
Other
Joint (white/minority)
71.9
72.2
66.5
64.6
82.5
70.9
78.0
16.2
15.4
22.0
23.0
9.2
17.8
12.7
10.1
10.3
9.9
10.5
7.3
9.6
8.2
1.8
2.1
1.6
1.9
.9
1.7
1.1
100
100
100
100
100
100
100
73.5
65.8
62.5
58.3
80.7
63.1
74.4
19.3
24.4
31.1
36.0
13.8
26.9
19.6
6.4
7.9
5.6
5.0
4.8
8.1
5.0
.8
1.8
.9
.7
.7
1.8
1.0
100
100
100
100
100
100
100
Differences in the types of loans extended are
also apparent across neighborhoods. Home
improvement loans are relatively more common in
low- and moderate-income neighborhoods, where
the housing units are, on average, older and probably in greater need of repair or modernization.
FHA-insured home purchase loans are also more
common, reflecting the low downpayment requirements, the relatively higher debt-to-income ratios
permitted by FHA underwriting standards, and the
limits placed on the size of loan that may be
insured. Home purchase loans extended to nonoccupant owners (frequently landlords) are also
more common, a finding consistent with the
high proportion of rental properties in low- and
moderate-income neighborhoods.
Median loan amounts across neighborhoods
reflect large differences in home values and the
different proportions of home improvement loans.
For example, in 1992 the median home loan in
low- and moderate-income neighborhoods equaled
$63,600, compared with $124,000 in upper-income
neighborhoods.16 The median 1990 home values in
these neighborhoods were $69,000 and $179,000
respectively (table 10). The high loan amounts
relative to housing values in low- and moderateincome neighborhoods, particularly given the prev-
16. To calculate the median value of home loans for a category
of neighborhoods, a median value was determined for each census
tract, and then the median values for census tracts in a group were
averaged. For home purchase loans in low- and moderate-income
neighborhoods, the median value was $60,100, and for highincome neighborhoods it was $115,200. Because these numbers are
similar to the median values for all loans, dropping home improvement loans and refinancings does not significantly affect the median
loan amount in a census tract.
92
9.
Federal Reserve Bulletin • February 1994
Changes in loan application disposition rates for home purchase loans between 1991 and 1992,
by characteristics of applicants
Percent
Type of home purchase loan
Applicant
characteristics
Government-backed
Approved
1
MEMO:
Conventional
Denied
Denied
Approved
Percentage change
in number
of conventional home
purchase loans
from 1991 to 1992
1991
1992
1991
1992
1991
1992
1991
1992
Total
71.7
74.1
17.6
14.7
71.2
72.9
18.9
17.8
17.1
Race or ethnic group
American Indian/
Alaskan native
Asian/Pacific Islander
Black
Hispanic
White
Other
Joint (white/minority)
64.2
79.8
61.4
68.4
74.3
68.7
74.0
68.6
74.0
63.4
68.0
77.3
69.8
74.5
22.1
12.5
26.4
18.9
16.3
16.3
15.9
17.5
13.5
23.8
18.5
12.8
16.0
14.8
62.9
72.8
53.7
61.7
73.7
67.7
71.9
63.5
72.5
55.1
61.5
75.6
67.1
72.6
27.0
14.9
37.4
26.5
17.3
19.6
17.5
26.6
15.3
35.9
27.3
15.9
21.0
17.6
13.8
5.6
25.9
7.6
20.5
-35.0
23.2
Income (percentage of
MSA median)2
Less than 80
80-99
100-120
More than 120
66.2
77.6
79.1
79.8
74.8
79.7
80.1
79.5
25.2
13.6
12.1
15.4
11.4
10.9
10.7
59.8
75.0
77.8
79.1
68.9
77.5
79.5
80.5
32.8
16.8
13.7
11.1
23.3
14.4
12.2
10.2
27.0
27.2
22.0
10.3
11.0
1. Loans backed by the Federal Housing Administration, the Department
of Veterans Affairs, and the Farmers Home Administration.
2. MSA median is median family income of the metropolitan statistical
area in which the property related to the loan is located.
SOURCE. FFIEC, Home Mortgage Disclosure Act.
alence of home improvement loans, may reflect a
lack of wealth among borrowers purchasing homes
in these neighborhoods and thus relatively smaller
downpayments on home purchase loans.
The distribution of borrowers by racial or ethnic
group also differs by neighborhood income groups.
Asian borrowers, like Asian residents, are more
uniformly spread across neighborhoods; both black
and Hispanic borrowers, like black and Hispanic
residents, are more concentrated in low- and
moderate-income neighborhoods. Regardless of
neighborhood income, however, lenders have
higher proportions of Asian borrowers relative to
the Asian population in the neighborhood groups
and lower proportions of black and Hispanic borrowers compared with the proportions of black and
Hispanic residents. These differences probably
reflect the relatively higher incomes of Asian
residents.
Residents of predominantly white neighborhoods
received 54 percent of the home loans granted, and
residents of neighborhoods whose minority population was between 10 and 50 percent of the total
population received the rest. The distribution of the
dollar value of home loans across neighborhoods
grouped by racial or ethnic composition is similar
to the distribution of the number of loans.
Predominantly minority neighborhoods contain
18 percent of the housing units and 20 percent of
the population in metropolitan areas; these relatively small proportions partly account for the low
percentage of all home loans extended in these
neighborhoods (compare tables 11 and A.2). The
relatively low proportion of home loans also
reflects the lower income of residents and the composition of the housing stock, which contains a
markedly higher proportion of rental units.
In neighborhoods grouped by racial or ethnic
composition, as in neighborhoods grouped by
income, borrowers who buy, refinance, or improve
their homes tend to have higher incomes than the
incomes of the other residents of their neighborhoods. For example, borrowers in predominantly
white neighborhoods had incomes equal to 136 percent of the median family income of their MSA,
compared with 115 percent for all residents of
Lending in Neighborhoods with Different
Racial or Ethnic Compositions
Overall, the 1992 HMDA data indicate that 8 percent of the home loans extended by lenders covered by HMDA were granted to borrowers in
predominantly minority neighborhoods (table 11).
Residential Lending to Low-Income and Minority Families: Evidence from the 1992 HMD A Data
10.
93
D i s t r i b u t i o n of l o a n s , b y n e i g h b o r h o o d i n c o m e , 1 9 9 2 1
Low or
moderate
income
Item
Number (in thousands)
578
Middle
income
Upper
income
2,834
2,425
Total
5,838
2
Distribution of loans (percentage of total)
Number
Dollar amount
Type of loan
Home purchase
Home improvement
Refinancings
Total
Distribution of home purchase loans by type
(percentage of total)
Conventional
FHA-insured
VA-guaranteed
Total
9.9
6.8
38.1
16.3
45.6
100.0
48.6
39.9
41.5
53.3
34.1
11.1
54.8
31.3
7.8
61.0
100.0
100.0
67.2
25.7
7.0
100.0
72.6
19.7
7.6
100.0
83.7
10.9
5.3
100.0
6.6
100.0
9.4
5.1
3.3
4.9
100.7
122.2
177.2
133.7
146.4
191.0
291.5
218.6
42.4
51.4
74.5
57.9
63.6
81.9
124.0
93.5
11.8
10.9
4.6
3.3
3.7
3.5
1.9
2.5
4.2
3.5
3.9
3.9
76.3
17.0
MEMO:
Extended to nonoccupant owners
Borrowers and loan characteristics
Median borrower income relative to MSA
median family income for all loans
Median loan amount relative to MSA
median family income for all loans 3 ...
Median borrower income for all loans
(thousands of dollars)3
Median loan amount for all loans
(thousands of dollars)3
Race or ethnic group of borrower
(percentage of the number of all loans)
Black
Hispanic
Asian
1. Census tracts are categorized by the median family income for the tract
relative to the median family income for the metropolitan statistical area
(MSA) in which the tract is located. Categories are defined as follows: Low
or moderate, median family income less than 80 percent of the median
family income for MSA; Middle income, median family income 80 percent
to 120 percent of MSA median; Upper income, median family income more
than 120 percent of MSA median.
2. Excludes multifamily loans.
3. Averaged across census tracts in category.
SOURCE. FFIEC, Home Mortgage Disclosure Act data.
these neighborhoods. Borrowers in predominantly
minority neighborhoods typically had incomes
equal to 112 percent of the median family MSA
income, compared with 66 percent for all residents
of these neighborhoods.
Matching the patterns found in low- and
moderate-income neighborhoods, the proportion of
home improvement loans granted is slightly higher,
and the proportion of home purchase loans slightly
lower, in predominantly minority neighborhoods.
Also, borrowers tend to rely more on FHAinsured loans, and loans to nonoccupant-owners
are more common in predominantly minority
neighborhoods.
central city locations and the rest to borrowers in
noncentral city locations (table 12). This lending
pattern closely matches the pattern of applications
received by lenders (data not shown in table).
Roughly half of the housing units in MSAs are
located in central cities, but the proportion of loans
extended in central cities is smaller. This difference
probably reflects the relatively higher proportions
of low-income families, unemployed individuals,
and renters in central cities.
The mix of loans used by borrowers in central
city locations is similar to that used by borrowers
in noncentral city locations with a couple of exceptions. Twenty percent of home purchase loans
granted in central cities were FHA-insured compared with 15 percent in noncentral cities. Also the
proportion of multifamily loans is higher in central
cities (data not shown in table), and partly reflects
these areas' higher proportion of multifamily and
rental houses.
Lending in Central City and Noncentral City
Locations
Of loans made to borrowers residing in MSAs,
roughly 38 percent were extended to borrowers in
94
Federal Reserve Bulletin • February 1994
12. Distribution of loans, by MSA location, 19921
11. Distribution of loans, by minority population
in census tracts, 19921
.
Item
Predominantly
white
Item
Number (in thousands) ...
Moderately
minority
3,155
Distribution of loans
(percentage of total)2
Number
Dollar amount
Type of loan
Home purchase
Home improvement . . .
Refinancings
Total
Distribution of home
purchase loans by type
(percentage of total)
Conventional
FHA-insured
VA-guaranteed
Total
Predominantly
minority
2,216
467
54.0
50.0
38.0
42.3
8.0
7.6
36.3
2.8
60.8
100.0
34.0
2.9
63.1
100.0
33.3
3.7
62.9
100.0
81.2
14.2
4.6
100.0
70.9
19.7
9.4
100.0
70.1
23.0
6.9
100.0
4.4
4.9
7.7
MEMO: Extended to
nonoccupant owners.
Borrowers and loan
characteristics
Median borrower income
relative to MSA
median family
income for all loans
(percent)
Median loan amount
relative to MSA
median family
income for all
loans3 (percent)
Median borrower income
for all loans
(thousands of
dollars)3
Median loan amount
for all loans
(thousands of
dollars)3
135.8
134.2
112.2
196.2
223.0
190.0
57.1
60.8
49.7
83.9
107.6
91.8
.9
.8
1.3
3.7
4.8
5.4
20.9
20.6
14.3
Race or ethnic group
of borrower (percentage
of the number of all loans)
Black
Hispanic
Asian
1. Census tracts are categorized by minority population as follows: Predominantly white, less than 10 percent minority population; Moderately
minority, 10 percent to 50 percent minority population; Predominantly
minority, more than 50 percent minority population.
2. Excludes multifamily loans.
3. Averaged across census tracts in category.
SOURCE. FFIEC, Home Mortgage Disclosure Act data.
Borrowers in central cities have relative incomes
that are similar to those of borrowers in noncentral
city areas. In contrast, residents in central cities
have relative incomes that are lower than those of
residents in noncentral city areas.
k-
ORIGINATORS
LOW-INCOME
:'
'
•
•
'
•
>'
. .
'
.
OF HOME LOANS FOR
AND MINORITY
BORROWERS
Depository institutions and their mortgage company affiliates extend proportionally more conven
Number (in thousands)
Central
city
2,193
Noncentral
city
3,644
Distribution of loans
(percentage of total)2
Dollar amount
Type of loan
Home purchase
Home improvement
Refinancings
Total
37.6
36.1
62.4
63.9
36.6
3.0
60.3
100.0
34.3
2.9
62.8
100.0
Distribution of home purchase
loans by type (percentage of total)
Conventional
FHA-insured
VA-guaranteed
Total
71.9
20.4
7.6
100.0
79.3
14.7
6.0
100.0
5.8
4.3
137.9
137.6
212.0
222.5
MEMO: Extended to nonoccupant
owners
Borrowers and loan characteristics
Median borrower income relative to
MSA median family income
for all loans (percent)
Median loan amount relative to
MSA median family income
for all loans3 (percent)
Median borrower income for all loans
(thousands of dollars)3
Median loan amount for all loans
(thousands of dollars)3
Race or ethnic group of borrower
(percentage of the number of all loans)
Black
55.4
59.4
86.7
97.6
5.4
5.1
4.1
2.4
3.2
3.8
1. Includes only census tracts in MSAs. If any portion of a census tract is
located within a central city boundary, the census tract is classified in the
central city category.
2. Excludes multifamily loans.
3. Averaged across census tracts in category.
SOURCE. FFIEC, Home Mortgage Disclosure Act data.
tional home purchase loans to low-income borrowers than do independent mortgage companies
(table 13). Twenty percent of the families receiving
conventional home purchase loans through depositories have low incomes, compared with 15 percent
of families receiving them from independent mortgage companies. The higher proportion may reflect
the use by depositories of more flexible underwriting standards. Generally, independent mortgage
companies follow the underwriting guidelines set
by secondary market institutions because they sell
most of their loans. Mortgage company affiliates of
depositories focus on selling loans in the secondary
market, but they sell to their affiliated depository
institutions as well. Depository institutions also sell
loans, but they often choose to hold them in portfolio, which gives depositories and their mortgage
company affiliates greater flexibility in underwriting standards.
Residential Lending to Low-Income and Minority Families: Evidence from the 1992 HMD A Data
On the other hand, depositories provide a smaller
proportion of home purchase and refinancing loans
to minorities than do independent mortgage companies. The higher origination by independent
mortgage companies reflects in part a greater proportion of loans to "joint" borrowers—that is,
households with one minority applicant and one
white applicant—and to Asian borrowers—
possibly a reflection of the fact that the independent mortgage companies reporting 1992 HMDA
data were more likely than depositories to have
originated loans in California, a state with a large
Asian population.
Somewhat surprisingly, government-backed
loans extended by depositories and those extended
by independent mortgage companies have distributions across income groups that are similar to the
distributions for conventional loans. About 38 percent of the government-backed loans originated by
depositories and their affiliates are to low-income
borrowers, compared with 32 percent of the loans
originated by independent mortgage companies.
One would have expected the distribution of FHA
and VA loans across income groups to be similar
for all lenders because the underwriting standards
are determined by the FHA or VA, not by the
originator. The greater proportion of low-income
borrowers among the government-backed home
purchase loans extended by depositories may
reflect other factors, such as the location of bank
branches in low-income communities or the effect
of depositories' being subject to the Community
Reinvestment Act (CRA).
HMDA DATA AND THE SUPERVISION
DEPOSITORY
INSTITUTIONS
13. Distribution of home loans, by type of loan,
characteristic of borrower, and type of lender, 1992
Percent
Depositories
Borrower
characteristic
Excluding
affiliated
mortgage
companies
Including
affiliated
mortgage
companies
Independent
mortgage
companies
Government-backed
home purchase loans1
Race or ethnic group
American Indian/
Alaskan native
Asian/Pacific Islander
Black
Hispanic
White
Other
Joint
Total
.4
1.3
8.2
6.0
80.9
.2
3.1
100
.4
1.2
9.2
5.2
80.8
.3
2.8
100
.5
2.0
8.7
8.1
76.8
.3
3.5
100
Income 2
(percentage of
MSA median)
Less than 80
80-99
100-120
More than 120
Total
35.3
21.5
16.2
27.1
100
35.7
21.8
16.5
26.0
100
32.2
21.7
17.3
28.8
100
Conventional home purchase loans
Race or ethnic group
American Indian/
Alaskan native
Asian/Pacific Islander
Black
White
Other
Joint
Total
.4
3.6
2.8
4.0
87.0
.3
1.8
100
.4
3.4
3.1
3.6
87.4
.3
1.8
100
.5
5.0
3.1
3.9
84.6
.4
2.3
100
Income2
(percentage of
MSA median)
Less than 80
80-99
100-120
More than 120
Total
20.1
12.9
12.9
54.0
100
20.0
13.1
13.1
53.8
100
15.2
11.9
13.4
59.5
100
Refinancings
OF
Although the HMDA data alone are not sufficient
for assessing the fairness of the mortgage lending
process or determining whether institutions have
violated the fair lending laws, they are a valuable
tool used extensively by the Federal Reserve and
other federal agencies in the enforcement of fair
lending laws. Because these agencies have access
to lenders' files on loan applications and to information about applicable credit standards, they can
overcome many of the limitations of the HMDA
data regarding the assessment of applicant creditworthiness and of property characteristics.
The Federal Reserve's program for enforcing
fair lending, like that of the other agencies, focuses
95
Race or ethnic group
American Indian/
Alaskan native
Asian/Pacific Islander
Black
Hispanic
White
Other
Joint
Total
.3
3.6
2.1
3.1
90.6
.3
1.9
100
.3
3.6
2.2
2.8
90.8
.4
1.8
100
.6
6.8
2.4
4.3
85.4
.5
2.5
100
Income2
(percentage of
MSA median)
Less than 80
80-99
100-120
More than 120
Total
14.7
12.0
13.2
60.0
100
13.9
11.9
13.2
61.0
100
10.1
10.1
12.3
67.5
100
1. Loans backed by the Federal Housing Administration, the Department
of Veterans Affairs, and Farmers Home Administration.
2. MSA median is median family income of the metropolitan statistical
area (MSA) in which the property related to the loan is located.
SOURCE. FFIEC; Home Mortgage Disclosure Act.
96
Federal Reserve Bulletin • February 1994
Educational Material on Fair Lending
As part of its consumer education program, the Board
distributes a brochure published by the FFIEC entitled
"Home Mortgage Lending and Equal Treatment." This
brochure identifies lending standards and practices that
may produce unintended discriminatory effects, and it
cautions lenders about their use. It focuses on race and
includes examples of subtle forms of discrimination, such
as unduly conservative appraisal practices in changing
neighborhoods; property standards like size and age that
may exclude homes in older neighborhoods; and unrealistically high minimum-loan amounts. The Board has published a pamphlet entitled "Home Mortgages: Understanding the Process and Your Right to Fair Lending."
This pamphlet informs consumers about the mortgage
application process and their rights under fair lending and
consumer protection laws.
The Federal Reserve Bank of Boston has published a
booklet entitled Closing the Gap: A Guide to Equal
Opportunity Lending. It addresses lending discrimination
and challenges lenders to reconsider every aspect of their
lending operations—from the hiring of loan officers to
the treatment and evaluation of applicants—to ensure
that loan decisions are not made on the basis of race or
ethnicity.
Through its Community Affairs program, the Federal
Reserve provides outreach services and educational and
on examining for compliance with fair lending
laws and more broadly on ensuring that credit is
made available to low- and moderate-income areas,
including areas with substantial minority populations. It involves an aggressive approach to investigating consumer complaints. It also extends to
providing consumer and creditor education and
gaining insight into the mortgage markets through
research (see the box "Educational Material on
Fair Lending").
Fair Lending
Enforcement
The Federal Reserve System's program of consumer compliance examinations began in 1977.
These examinations, carried out by specially
trained examiners, emphasize identifying potential
discrimination of the kind prohibited by the Equal
Credit Opportunity and Fair Housing acts. On average, the Reserve Banks examine about two-thirds
of all state member banks each year.
technical assistance to help financial institutions and the
public understand and address community development
and reinvestment issues. Community Affairs officials at
the Reserve Banks respond to requests for information
and assistance on the CRA, fair lending, and community
development. Efforts extend to working with banking
institutions and associations, governmental entities, businesses, and community groups to develop programs that
promote community development. Overall, efforts of
the Reserve Banks in Community Affairs involve about
a hundred programs a year with thousands of participants as a way of encouraging economic development
and ensuring fair lending.
To request copies of these publications, please contact
the following: for "Home Mortgage Lending and Equal
Treatment," the Division of Consumer and Community
Affairs, Mail Stop 198, Board of Governors of the Federal Reserve System, Washington, DC 20551; for "Home
Mortgages: Understanding the Process and Your Right to
Fair Lending," Publications Services, Mail Stop 127,
Board of Governors; for Closing the Gap: A Guide to
Equal Opportunity Lending, Publications, Federal
Reserve Bank of Boston, P.O. Box 2076, Boston, MA
02106-2076.
Procedures for fair lending enforcement focus
primarily on comparing the treatment of members
of a minority or protected class with other loan
applicants. Starting with a review of loan policies
and procedures and interviews with lending personnel, an examiner seeks to determine, among other
things, the bank's credit standards. Then, using a
sample of actual loan applicants, the examiner
judges whether bank personnel apply those standards uniformly in evaluating loan applications
from minorities, women, and others whom the fair
lending laws were designed to protect.
The examiner attempts to look at the same information the bank used to make its credit decision,
including credit history, income stability, and total
debt burden. If it appears that credit standards were
not followed or were not applied consistently, these
findings are discussed with bank management and
a more intensive investigation is undertaken. Violations discovered through any of these techniques
will result in correction by the institution, noti-
Residential Lending to Low-Income and Minority Families: Evidence from the 1992 HMD A Data
fication of the applicant, and referral of the matter to the Department of Justice or HUD when
appropriate.
Examiners also meet with members of the bank's
community, including private citizens and local
government officials who may have knowledge
about the credit concerns of their community.
Examiners thus can learn about public perceptions
of credit availability for minorities and low- and
moderate-income persons. These meetings may
suggest additional scrutiny of particular areas and
may provide insight into the way a bank is serving
its local community.
The Federal Reserve's consumer complaint program is another component of the enforcement of
the fair lending laws. Consumer complaints that
allege loan discrimination are investigated and may
prompt onsite review. Mortgage complaints may
also be referred to the Department of Housing and
Urban Development. As with the examinations program, considerable attention is given to ensuring
personal contact with complainants and making the
public aware of agency procedures.
A New Fair Lending Examination Tool
Because determining whether lenders are complying with fair lending laws is difficult for examiners,
even with these procedures, the Federal Reserve
has searched for better tools. In recent months, it
has been testing a computerized statistical model
for use in bank examinations and has shared it with
the otherfinancialregulators.
The new tool identifies potential problems
through statistical techniques but relies on examiner judgment for determinations of whether discrimination has actually taken place. It automates
the approach of onsite fair lending exams. First, the
examiners use HMDA data to identify institutions
that may require a more intensive review of their
mortgage lending decisions. This initial analysis is
done with a multivariate model of the institution's
decisions to accept or reject loan applicants based
on the limited information available from HMDA,
including the applicant's income, the amount of the
loan requested, the applicant's race and gender, and
the disposition of the application.
When the results of this evaluation show measurable differences among racial or ethnic groups or
97
between males and females that are not explained
by differences in income or the amount of the loan
requested, the system automatically selects a sample of applications to be reviewed more extensively. Examiners gather additional information
from loan application files, including data on the
value of the property being purchased and on the
applicant's credit history, debts, and employment
history. These data are analyzed in a more comprehensive multivariate statistical model to determine
whether they appear to explain the differences in
denial rates by race, ethnicity, or gender observed
in the initial analysis. The new system then pairs a
given applicant with one or several other applicants
(of different races or ethnic groups, for instance)
who have similar financial characteristics but who
experienced different outcomes on their loan
requests. After reviewing the loan files of the
selected pairings to determine what, if any, important factors were omitted in the statistical analysis,
examiners can discuss with bank management the
applications for which the credit decisions are suspect. If the bank appears to have discriminated,
various enforcement actions are possible, including
asking the Department of Justice to investigate
further.
Besides this "micro" use of the HMDA data, the
Federal Reserve analyzes the data with a computerized system that is also accessible to the
Federal Deposit Insurance Corporation and
the Office of the Comptroller of the Currency. The
system allows the data to be segmented by applicant and borrower characteristics, such as race,
gender, and income, or by geographic boundaries.
Examiners can thus quickly sort through vast
quantities of data, focus on data for specific lending markets, and draw comparisons, for example,
of an individual HMDA reporter's performance
against that of all lenders in the area. Through these
analyses, examiners can more readily determine
whether a bank is serving all segments of its
community.
The Federal Reserve has also developed the
ability to map by computer the geographic location
of a bank's loans and to integrate demographic information for the bank's local community. This type of analysis and presentation
increases an examiner's ability to assess a bank's
performance in helping to meet the credit needs of
its community.
98
Federal Reserve Bulletin • February 1994
14. Mortgage loans sold, by type of purchaser, characteristics of borrower, and characteristics of census tract
in which property is located, 1992
Number and percentage distribution
Borrower or census tract
characteristic
Federal National
Mortgage Assn.
Number
Percent
Government National
Mortgage Assn.
Federal Home Loan
Mortgage Assn.
Number
Number
Percent
Percent
Farmers Home
Admin.
Number
Percent
3,325
Percent
72,454
Total loans sold
1,790411
Race or ethnic group
of borrower
American Indian/
Alaskan native
Asian/Pacific Islander
Black
Hispanic
White
Other
Joint (white/minority)
Total
4,420
60,797
28,582
43,237
1,222,548
6,611
28,413
1,394,608
.3
4.4
2.0
3.1
87.7
.5
2.0
100
2,114
6,948
33,253
25,782
351,179
1,469
12,797
433,542
.5
1.6
7.7
5.9
81.0
.3
3.0
100
3,508
58,776
17,479
33,587
943,425
3,308
21,235
1,081,318
.3
5.4
1.6
3.1
87.2
.3
2.0
100
6
51
99
58
2,582
7
41
2,844
.2
1.8
3.5
2.0
90.8
.2
1.4
100
518
1,283
2,551
2,239
57,029
150
1,297
65,067
.8
2.0
3.9
3.4
87.6
.2
2.0
100
Income of borrower
(percentage
of MSA
median)1
Less than 80
80-99
100-120
More than 120
Total
150,860
154,425
177,436
751,077
1,233,798
12.2
12.5
14.4
60.8
100
98,778
65,806
54,112
102,681
321,377
30.7
20.5
16.8
40.0
100
123,059
112,393
129,676
559,735
924,893
13.3
12.2
14.0
60.5
100
588
306
290
1,028
2,212
26.6
13.8
13.1
46.5
100
11,717
7,152
7,376
29,959
56,204
20.8
12.7
13.1
53.3
100
Racial composition of
census tract (minorities as
percentage of population)
Less than 10
10-19
20-49
50-79
80-100
Total
812,812
320,308
248,664
73,047
33,161
1,487,992
54.6
21.5
16.7
4.9
2.2
100
283,005
162,303
153,246
40,525
24,070
663,149
42.7
24.5
23.1
6.1
3.6
100
579,355
224,545
186,830
55,433
23,638
1,069,801
54.2
21.0
17.5
5.2
2.2
100
1,669
483
362
85
36
2,635
63.3
18.3
13.7
3.2
1.4
100
35,298
13,134
8,997
2,174
1,393
60,996
57.9
21.5
14.8
3.6
2.3
100
Income of census tract2
Low or moderate
Middle
Upper
Total
105,761
710,455
671,773
1,487,989
7.1
47.7
45.1
100
96,697
391,156
175,296
663,149
14.6
59.0
26.4
100
80,359
521,862
467,580
1,069,801
7.5
48.8
43.7
100
255
1,376
1,004
2,635
9.7
52.2
38.1
100
5,681
30,085
25,230
60,996
9.3
49.3
41.4
100
518,572
969,494
1,488,066
34.8
65.2
100
298,074
365,108
663,182
44.9
55.1
100
376,686
693,165
1,069,851
35.2
64.8
100
715
1,944
2,659
26.9
73.1
100
22,404
38,599
61.003
36.7
63.3
inn
MSA location3
Central city
Noncentral city
Total
1,305,900
Number
836,396
1. MSA median is the median family income of the metropolitan statistical area (MSA) in which the property related to the loan is located.
2. Census tracts are categorized by the median family income for the tract
relative to the median family income for the MSA in which the tract is
located. Categories are defined as follows: Low or moderate, median family
income for census tract less than 80 percent of median family income for
MSA; Middle income, median family income 80 percent to 120 percent of
MSA median; Upper income, median family income more than 120 percent
of MSA median.
3. Included only census tracts located in MSAs.
SOURCE. FFIEC, Home Mortgage Disclosure Act.
PURCHASES OF HOME LOANS: THE ROLE
OF THE SECONDARY MORTGAGE
MARKETS
Secondary market participants generally do not
originate loans, but they do specify the underwriting guidelines that loans must meet to be eligible
for purchase or securitization. These guidelines and
related limitations on loan-size purchases vary
among secondary market participants; thus, for the
loans that these institutions purchase or securitize,
the characteristics of the borrowers and neighborhoods in which their properties are located can be
expected to differ.
The 1989 amendments to HMDA require lenders
in the primary market to report home loans that
they sell to secondary market purchasers if they
Institutions in the secondary mortgage market buy
and sell billions of dollars of mortgage loans or
securities backed by mortgage loans each year.
Some participants also guarantee payments on
pass-through securities issued against pools of residential mortgage loans. The secondary mortgage
market enables mortgage originators to raise new
funds. The originators sell assets that are otherwise
relatively illiquid and can then extend new loans or
use the funds for other purposes.
Residential Lending to Low-Income and Minority Families: Evidence from the 1992 HMD A Data
99
14.—Continued
Borrower or census tract
characteristic
Savings bank or
savings and loan association
Number
Percent
Life insurance
company
Number
Percent
Affiliate of
institution
Number
Percent
Percent
879,293
393,763
25,218
Number
Total loans sold
53,292
Race or ethnic group
of borrower
American Indian/
Alaskan native
Asian/Pacific Islander
Black
Hispanic
White
Other
Joint (white/minority)
Total
163
1,097
1,294
895
38,786
85
652
42,972
.4
2.6
3.0
2.1
90.5
.2
1.5
100
50
1,071
478
640
16,748
151
462
19,600
.3
5.5
2.4
3.3
85.4
.8
2.4
100
886
7,796
9,441
5,887
306,377
941
5,728
337,056
.3
2.3
2.8
1.7
90.9
.3
1.7
100
4,211
28,809
33,106
29,598
558,451
2,160
15,636
671,971
.6
4.3
4.9
4.4
83.1
.3
2.3
100
Income of borrower
(percentage of MSA
median)1
Less than 80
80-99
100-120
More than 120
Total
5,962
4,963
4,945
20,754
36,624
16.3
13.6
13.5
56.7
100
2,199
1,618
1,793
11,501
17,111
12.9
9.5
10.5
67.2
100
37,303
30,044
32,196
168,862
268,405
13.9
11.2
12.0
62.9
100
107,679
71,325
67,792
319,359
566,155
19.0
12.6
12.0
56.4
100
Racial composition of
census tract (minorities as
percentage of population)
Less than 10
10-19
20-49
50-79
80-100
Total
26,565
8,127
5,371
1,230
696
41,989
63.3
19.4
12.8
2.9
1.7
100
9,286
5,573
3,687
995
439
19,980
46.5
27.9
18.5
5.0
2.2
100
208,694
62,160
37,089
8,469
4,142
320,554
65.1
19.4
11.6
2.6
1.3
100
300,856
186,936
150,559
42,180
22,909
703,440
42.8
26.6
21.4
6.0
3.3
100
Income of census tract2
Low or moderate
Middle
Upper
Total
3,727
20,515
17,747
41,989
8.9
48.9
42.3
100
1,502
7,510
10,968
19,980
7.5
37.6
54.9
100
22,017
134,222
164,315
320,554
6.9
41.9
51.2
100
73,022
312,990
317,428
703,440
10.4
44.5
45.1
100
MSA location3
Central city
Noncentral city
Total
16,247
25,742
41,989
38.7
61.3
100
8,801
11,179
19,980
44.0
56.0
100
111,444
209,114
320,558
34.8
65.2
100
277,623
425,861
703,484
39.5
60.5
100
originated or purchased the loans during the same
year. The HMDA data are the only publicly available source of information on the characteristics of
borrowers whose loans are purchased by secondary
market institutions and of the neighborhoods in
which these borrowers reside.
Government-sponsored Enterprises
Three government-sponsored enterprises (GSEs)
dominate the secondary mortgage market—Fannie
Mae, Freddie Mac, and the Government National
Mortgage Association (Ginnie Mae). Fannie Mae
and Freddie Mac are publicly chartered private
entities; Ginnie Mae is a government agency. In
1992, the GSEs accounted for 74 percent of the
roughly 5.4 million loans sold in the secondary
market by lenders covered under HMDA (calculated from table 14). Other types of institutions—
such as pension funds, insurance companies, mortgage companies, and depository institutions—are
active secondary market participants. They buy the
same types of loans purchased by the GSEs and
provide an outlet for so-called jumbo loans—
conventional loans that exceed in size the maximum single-family mortgage that may be purchased by Fannie Mae or Freddie Mac (in 1992,
$202,300).17 These non-GSE institutions some-
17. The loan limit varies by the number of units in the property
and by geographic location. In 1992 the maximum loan limits for
single-family mortgages on properties with one to four units ranged
from $202,300 to $388,800 except in Alaska, Guam, and Hawaii,
where these limits were 50 percent higher.
100
Federal Reserve Bulletin • February 1994
times purchase other loans such as mobile home
loans, adjustable-rate mortgages, and loans that do
not conform to GSE standards or that the GSEs are
prohibited from purchasing.
Fannie Mae and Freddie Mac buy mainly conventional mortgage loans, convert them into securities, and sell the securities to investors such as
pension and mutual funds. But they also hold some
loans in portfolio.18 Ginnie Mae does not purchase
loans but guarantees the timely payment of principal and interest for privately issued securities
backed by FHA, FmHA, and VA loans.
Basic underwriting guidelines (for instance,
those applying to monthly debt-to-income and
maximum loan-to-value ratios) differ among the
secondary market participants. Fannie Mae and
Freddie Mac follow essentially the same guidelines, which they themselves set for the conventional loans they purchase. For Ginnie Mae, the
underwriting standards are established by HUD for
FHA-insured loans and by the VA for VAguaranteed loans.19
FHA and VA borrowers differ from conventional
loan borrowers because HUD and the VA generally
allow borrowers to have more debt relative to
income and to make smaller downpayments than
do conventional lenders. Also, HUD and the VA
have restrictions on the maximum size of loans
they will back and, on average, insure or guarantee
a higher proportion of smaller loans relative to
loans made by conventional lenders. In general,
borrowers whose loans are securitized by Ginnie
Mae have lower incomes, are more likely to be
from a minority group, and are more likely to
reside in a low- or moderate-income or minority
neighborhood than are borrowers whose loans are
sold to, or securitized by, Fannie Mae or Freddie
Mac. For example, in 1992 about half the loans
backed by Ginnie Mae were made to borrowers
with incomes less than the median family income
for their MSA, compared with about a quarter of
the loans backed by Fannie Mae and Freddie Mac
(table 14).
18. Their annual reports for calendar year 1992 indicate that
Fannie Mae's mortgage portfolio equaled 26 percent of its outstanding mortgage securities and mortgage holdings whereas Freddie
Mac's portfolio equaled 8 percent. However, Freddie Mac is currently expanding its portfolio at a faster rate than Fannie Mae.
19. Ginnie Mae also securitizes loans backed by the FmHA.
Because it is relatively small and few lenders covered by HMDA
report such loans, the FmHA program is not discussed here.
The underwriting standards used by purchasers
of mortgages other than the GSEs vary considerably.20 In general, these institutions purchase a
larger proportion of mortgages extended to borrowers with incomes below the median for their MSAs
than do Fannie Mae and Freddie Mac. The exceptions are life insurance companies, whose purchases include only 22 percent of mortgages from
families with incomes below the median family
income for their MSAs, and affiliates of institutions
whose purchases include about the same share of
mortgages to families with below-median incomes
as do Fannie Mae and Freddie Mac.
Using HMDA Data To Measure GSE
Achievements in Affordable Housing
One objective in the charters of Fannie Mae and
Freddie Mac is to promote the availability of mortgage credit to low- and moderate-income families.
HUD also sets annual goals for Fannie Mae and
Freddie Mac, as required by the Federal Housing
Enterprises Financial Safety and Soundness Act of
1992.21 The goals specify that a certain proportion
of their purchases be mortgages extended to lowand moderate-income families and to families
residing in central cities. Furthermore, the two
GSEs must purchase a set dollar amount of mortgages extended to families who reside in lowincome areas or who have very low incomes.22
As provided by the GSE legislation, HUD set
interim goals for 1993 and 1994; final goals will go
into effect after 1994. In 1993, 30 percent of the
20. The underwriting standards of these institutions are heavily
influenced by the credit-rating agencies that rate their securities.
The credit-rating agencies determine how much credit enhancement is required to earn an investment-grade rating; the level of the
required credit enhancement directly influences the cost to the
originator.
21. The goals are described in detail in Department of Housing
and Urban Development, Office of the Secretary, "Interim Housing
Goals for the Federal Home Loan Mortgage Corporation" and
"Interim Housing Goals for the Federal National Mortgage Association" (September 16,1993).
22. The last goal is referred to as the special affordable housing
goal. The performance of the GSEs in meeting the special affordable housing goal cannot be evaluated because the HMDA data do
not include many of the mortgages purchased by Fannie Mae and
Freddie Mac and because the special affordable housing goals are
stated in dollar amounts.
Residential Lending to Low-Income and Minority Families: Evidence from the 1992 HMD A Data
101
15. Distribution of conventional home purchase and refinancing loans, by type of secondary market purchaser,
income of borrower, type and size of loan, and MSA location, 19921
Percent
Loans of less than $202,300
(income of borrower as
percentage of MSA median)3
Type of secondary market
purchaser and loan2
MSA location4
Less
than 80
80-99
100-120
More
than 120
Total
Central
city
Noncentral
city
Total
Fannie Mae
Home purchase
Refinancing
Total
14.0
10.5
11.4
13.5
12.1
12.4
15.0
14.3
14.4
57.5
63.1
61.7
100
100
100
36.4
33.2
34.2
63.6
66.8
65.8
100
100
100
Freddie Mac
Home purchase
Refinancing
Total
14.5
10.5
11.3
12.1
13.2
14.6
14.3
14.3
57.7
63.1
62.0
100
100
100
37.1
34.5
35.2
62.9
65.5
64.8
100
100
100
Commercial bank
Home purchase
Refinancing
Total
17.4
11.2
12.6
13.0
11.4
14.0
14.2
14.2
55.6
63.2
61.5
100
100
100
42.4
34.5
38.0
57.6
65.5
62.0
100
100
100
15.0
10.9
11.9
15.0
13.3
16.3
15.1
15.4
53.7
61.2
59.5
100
100
100
42.8
33.8
37.6
57.2
66.2
62.4
100
100
100
13.4
6.6
8.1
13.5
10.6
11.3
19.3
14.1
53.8
70.2
66.5
100
100
100
46.8
40.9
43.5
53.2
59.1
56.5
100
100
100
Affiliate of institution
Home purchase
Refinancing
Total
23.9
10.9
14.2
13.8
12.1
12.5
13.1
13.9
13.7
49.3
63.1
59.6
100
100
100
42.6
32.7
36.4
57.4
67.3
63.6
100
100
100
Other purchaser
Home purchase
Refinancing
Total
26.5
10.0
15.7
15.3
13.5
14.1
13.9
44.7
64.3
57.5
100
100
100
42.8
38.7
40.9
57.2
61.3
59.1
100
100
100
19.5
12.3
14.2
13.9
12.5
14.2
14.2
14.2
52.4
61.0
58.8
100
100
100
37.3
33.6
34.7
62.7
66.4
65.3
100
100
100
12.3
11.8
Savings bank or S&L
Home purchase
Refinancing
Total
Life insurance company
Home purchase
Refinancing
Total
12.8
11.6
12.9
12.6
MEMO:
Primary market
Home purchase
Refinancing
Total
12.8
1. Excludes loans of less than $5,000, those with loan-to-income ratios
that exceed four, and loans to nonowner-occupants.
2. GNMA and FmHA are not included because they do not back conventional mortgage loans.
3. Census tracts are categorized by the median family income for the tract
relative to the median family income for the metropolitan statistical area
(MSA) in which the tract is located. Categories are defined as follows: Low
or moderate, median family income for census tract less than 80 percent of
median family income for MSA; Middle income, median family income
80 percent to 120 percent of MSA median; Upper income, median family
income more than 120 percent of MSA median.
4. Includes only census tracts located in MSAs.
dwelling units financed by mortgages purchased
by Fannie Mae had to be occupied by low- or
moderate-income families, and 28 percent of the
units financed had to be secured by properties in
central cities. For Freddie Mac, the respective
goals were 28 percent and 26 percent. In 1994,
both of these goals are set at 30 percent for the two
companies.
In assessing Fannie Mae's and Freddie Mac's
performance in meeting affordable housing goals,
HUD will use information collected by these companies on the mortgages they purchase. This information will provide much greater detail than the
HMDA data for the loans purchased; however, the
HMDA data provide information on both the
primary and the secondary mortgage markets in
metropolitan areas and thus will allow comparisons
that can be used to evaluate the difficulties and
opportunities that the GSEs encounter in attaining
these goals.
The HMDA data can be used to derive only
rough estimates of how close the GSEs are to
meeting the low-income and central city goals
because of substantial deficiencies in the data when
used for this purpose. Specifically, HMDA does not
require lenders to record the specific number of
102
Federal Reserve Bulletin • February 1994
dwelling units financed by a loan, and for some
mortgages it does not provide reliable data on the
income of the occupants of the property. For example, the HMDA data on mortgages extended for
rental properties do not include information about
the income of tenants. HUD will use estimates of
the income of tenants or the rents they pay to
calculate Fannie Mae's and Freddie Mac's performance. HMDA also excludes thousands of depository institutions that make mortgages but that have
no offices within an MSA; in 1992, it still excluded
independent mortgage companies that had less than
$10 million in assets. Finally, with regard to mortgages originated in central cities, HMDA classifies
all mortgages from a particular census tract as
being within the central city, even if only a portion
of the census tract is part of the central city. For
purposes of the GSEs' central city goal, HUD
counts only loans on properties that are in the
central city portions of census tracts.
According to calculations using only HMDA
data on owner-occupied properties, roughly 24 percent of the conventional home purchase and
refinancing loans purchased by Fannie Mae and
Freddie Mac were extended to borrowers with
incomes smaller than the median family income for
their MSA (table 15).23 In the primary market,
27 percent of the conventional home purchase
loans and refinancings for amounts less than
$202,300 were extended to borrowers with such
incomes.
Refinancings significantly influence the calculation of these 1992 market shares. Compared with
borrowers in the home purchase loan market, many
of whom are first-time homebuyers, a larger proportion of borrowers who refinance have high
incomes. First-time homebuyers generally have
lower incomes than homeowners who refinance an
23. These calculations excluded loans purchased by lenders in
the primary market, government-backed loans (which do not count
toward the goals), loans above the conforming, single-family loan
limits, loans to nonoccupant owners, home improvement loans
(which may not count toward the goals), conventional loans below
$5,000 (such loans are likely to be home improvement loans,
second mortgages, or home equity loans), and loans for which the
ratio of the loan amount to the borrower's income exceeded four. In
addition, H M D A data does not distinguish between first and second
homes; H U D considers only first homes in calculating the affordable housing goals. Including the second home mortgages in these
calculations may slightly understate the proportions of low-income
housing financed.
existing mortgage. Excluding refinancings, roughly
28 percent of Fannie Mae's and Freddie Mac's
purchases were mortgages extended to owneroccupant homebuyers with below-median incomes.
Borrowers with below-median incomes accounted
for about 33 percent of the conventional home
purchase loans made in the primary market.24
In 1992, because of the large volume of refinancings, Fannie Mae and Freddie Mac would have had
difficulty in meeting a low-income goal of 30 percent solely by purchasing single-family mortgages.
But even in "normal" years for refinancings, they
may have difficulty meeting the goal by purchasing
mostly single-family mortgages. The GSEs can
limit the influence of refinancings either by restricting their purchases of such loans or by expanding
the purchase of other loans.
In the future, to increase their share of loans
extended to borrowers with below-median incomes, Fannie Mae and Freddie Mac could follow
several strategies. Among these are acquiring a
larger share of new conventional loans extended to
these borrowers, purchasing seasoned loans to lowincome borrowers from portfolio lenders, and
expanding new mortgage programs with liberalized underwriting guidelines to compete with
government-backed and with depositories' portfolio loan programs. They could also focus more
on loans that finance rental properties. Relatively
more loans for rental properties are in lowerincome neighborhoods, where there are more renters (see table A.l and table 10). For 1992, roughly
4 percentage points would have been added to
Fannie Mae's and Freddie Mac's low-income ratios
had loans for rental properties been included in the
calculation.25 If, however, the GSEs pursue more
24. The home purchase loan market also includes mobile home
loans. Lower-income families are more likely to seek such loans,
suggesting one explanation for the share of low-income loans
purchased by the GSEs being less than the share of such loans in
the primary home purchase loan market. However, the importance
of the mobile home loan market is difficult to determine. Fannie
Mae and Freddie Mac can purchase only mobile home loans that
are secured by real property as determined under state law.
25. We estimated the number of rental units by taking the
number of loans secured by a rental property and multiplying it by
the number of units financed per loan. We used both two and three
units financed per loan secured by nonowner-occupied one- to
four-family properties; and for multifamily properties, we calculated the number of units by assuming that each unit required
Residential Lending to Low-Income and Minority Families: Evidence from the 1992 HMD A Data
extensive involvement in rental properties to meet
their goals, they may be undertaking greater risks
because this area of real estate lending is prone to
higher, and more difficult to predict, levels of credit
losses compared with mortgages secured by singlefamily, owner-occupied properties.
Unlike the low-income goals, the central city
goals appear to be met by Fannie Mae and Freddie
Mac, according to the HMDA data. In 1992, Fannie
Mae's proportion of central city purchases of conventional home purchase loans and refinancings
was about 34 percent and Freddie Mac's proportion
was about 35 percent—both approximating the
primary market's proportion of about 35 percent
(table 15).
Refinancings influence the overall proportion of
central city purchases somewhat because refinancings are disproportionately from borrowers in noncentral city locations. Excluding refinancings, Fannie Mae's share would have been about 36 percent
and Freddie Mac's about 37 percent, shares similar
to those in the primary market.
Although Fannie Mae and Freddie Mac appear to
easily meet their central city goals, other factors
suggest that these estimates may be too high. As
mentioned earlier, the HMDA data overstate the
share of all mortgages originated in central cities.
HMDA classifies all loans originated in a census
tract that is partially in a central city as a central
city loan. If all of these loans were instead classified as noncentral city loans, the ratios would drop
6-7 percentage points. Of course, the actual decline
would not be this extreme because some of the
loans from these "split" census tracts are in the
central cities and some are not.
HMDA's coverage of loans made in nonmetropolitan areas is limited, even though some institutions located in metropolitan areas make and report
nonmetropolitan loans, because it excludes most
institutions located in rural areas. Roughly 1420 percent of all mortgage originations are from
rural areas, suggesting that including these loans in
the central city calculations would lower the share
$50,000 of financing and that HMDA covers only one-half of
Fannie Mae's and Freddie Mac's multifamily units. We then estimated the number of low-income borrowers by assuming that the
number equaled the proportion of loans secured by rental properties
in low- or moderate-income census tracts plus the proportion
secured in middle-income census tracts.
103
of central city loans 4—6 percentage points.26 Also,
small mortgage companies that are not required to
report under HMDA may be more heavily concentrated in suburban or semirural areas.27 The effect
of omitting these companies' data from HMDA is
difficult to estimate, but including these purchases
would probably lower the estimates of the proportion of central city loans purchased by Fannie Mae
and Freddie Mac.
For the reasons cited earlier, the HMDA data are
not adequate when used for measuring Fannie
Mae's and Freddie Mac's performance in meeting
their goals. However, the comparison of their performance relative to that of other secondary market
institutions, as measured by the HMDA data, may
be informative because the limitations highlighted
above influence the calculations for all institutions.
The HMDA data suggest that secondary market
institutions other than Fannie Mae and Freddie
Mac generally have a somewhat higher proportion
of loans extended to lower-income families and to
families living in the central cities (table 15). This
relationship is most evident in the home purchase
loan market. Only life insurance companies seem
to finance a lower proportion of loans extended to
lower-income families, although they purchase a
higher proportion of loans from the central cities.
APPENDIX: CHARACTERISTICS OF
DIFFERENT GROUPS OF NEIGHBORHOODS
In 1992, lenders were required for the first time,
when identifying the location of the properties
26. The estimated range of the proportion of rural mortgage
originations is calculated from data in U.S. Department of Commerce, Economics and Statistics Administration, Bureau of the
Census and U.S. Department of Housing and Urban Development,
Office of Policy Development and Research, American Housing
Survey in the United States (Government Printing Office, biennually). The lower bound reflects the distribution of occupied housing
units across metropolitan and rural areas, whereas the upper bound
reflects the distribution of mortgage originations of all types in
1990 and part of 1991. An additional source of information suggests that the share of conventional home purchase loan originations in rural areas is roughly 14 percent. See Federal Housing
Finance Board, "Effect of Federal Home Loan Bank System District Banks on the Housing Finance System in Rural Areas"
(FHFB, April 23, 1993).
27. As mentioned earlier, institutions with less than $10 million
in assets were not required to report in 1992 or in earlier years.
Beginning in 1993, any nondepository institution that originated
more than 100 home purchase loans was required to report, and this
requirement may substantially increase the number of mortgage
companies reporting HMDA data.
104
Federal Reserve Bulletin • February 1994
A. 1. Characteristics of MSA census tracts, by income status1
Characteristic
Number of census tracts
Percent
Low or moderate
income
Middle
income
Upper
income
All MSA
census tracts
12,971
29.9
20,136
46.4
10,292
23.7
43,399
100.0
58.2
99.1
153.3
99.7
34.5
21.8
8.8
7.5
6.1
8.8
9.2
3.4
100.0
28.0
12.5
12.2
15.4
8.6
9.2
8.6
15.1
20.7
10.3
100.0
8.9
5.6
5.4
7.8
4.9
5.7
5.9
12.7
26.8
30.9
100.0
4.6
3.7
17.3
15.5
7.8
7.9
7.2
12.6
18.7
13.1
100.0
13.6
7.2
19.8
25.8
52.8
35.5
10.9
36.4
1.3
37.8
49.2
31.0
60.9
6.7
28.1
.2
19.2
24.9
22.6
69.1
5.9
23.9
.1
76.8
100.0
35.5
55.3
7.8
29.6
.5
10.6
24.1
11.9
20.6
10.2
10.4
6.3
6.0
100.0
68,839
68.4
2.0
8.8
8.2
24.9
17.6
16.5
10.5
11.4
100.0
102,728
103.8
.4
1.7
2.1
11.6
15.4
20.3
14.4
34.1
100.0
178,626
170.0
4.1
11.5
7.8
20.5
14.9
15.6
10.2
15.3
100.0
110,598
108.9
396.7
505.0
643.2
504.9
82.0
103.5
129.0
103.1
49.1
25.8
92.9
48.8
48.3
25.4
190.3
100.0
30.2
20.6
3.7
30.4
8.0
7.7
3.1
33.8
4.0
5.2
12.7
10.4
12.4
25.2
13.2
19.5
3.9
36.3
12.2
17.9
3.4
33.4
12.7
INCOME AND EMPLOYMENT2
Relative neighborhood income3
Distribution of families by annual
dollar income (percent)
Less than 15,000
15,000-24,999
25,000-29,999
30,000-34,999
35,000-39,999
40,000-49,999
50,000-74,999
75,000 or more
Total
Percentage of residents below poverty level
Unemployment rate (percent)
HOUSING
All units
Number (millions)
Percent
Renter-occupied (percent)2
In one- to four-family structures (percent)2
Vacancy rate, year-round residences (percent)2
Median age (years)2
Boarded-up (percent)2
Owner-occupied units2
Distribution by dollar value of property (percent)
Less than 20,000
20,000-39,999
40,000-49,999
50,000-74,999
75,000-99,999
100,000-149,999
150,000-199,999
200,000 or more
Total
Median value (dollars)
Median value as a percentage of median value for MSA ..
Renter-occupied units2
Median monthly rent (dollars)
Median monthly rent as a percentage of median value
for MSA
POPULATION
Total (millions)
Percent
Race or ethnic origin (percent)2
Black
Hispanic
Asian
Median age (years)2
Age 65 years or older (percent)2
Moved into census tract during 1989 or 1990 (percent)2 ..
20.9
1. Census tracts are categorized by the median family income for the tract
relative to the median family income for the metropolitan statistical area
(MSA) in which the tract is located. Categories are defined as follows: Low
or moderate, median family income for census tract less than 80 percent of
median family income for MSA; Middle income, median family income
80 percent to 120 percent of MSA median; Upper income, median family
income more than 120 percent of MSA median.
2. Figures are simple averages of the values for the census tracts in a
category; they are calculated by summing the values for all census tracts in
the category and dividing by the number of tracts in the category.
3. Median family income for census tracts as a percentage of MSA
median family income.
SOURCE. Derived from 1990 U.S. census data.
involved in the loan or loan application, to use the
1990 census tract boundaries in place of the 1980
tract boundaries. As a consequence, the loan and
application data may be matched with relatively
up-to-date census information on neighborhood
characteristics.28 The switch to the 1990 census
boundaries makes it difficult, however, to compare
28. The 1990 U.S. Census of Population and Housing reflects
circumstances at the time the survey was conducted in the spring of
Residential Lending to Low-Income and Minority Families: Evidence from the 1992 HMD A Data
the 1992 HMDA data with the lending information
reported for preceding years.
Neighborhoods with Different Incomes
A comparison of neighborhoods grouped by their
median family incomes reveals differences in population, housing, and employment characteristics.
To demonstrate these relationships, census tracts in
MSAs have been divided into three broad income
categories—low or moderate, middle, and upper
income based on the relationship between the
median family income of a census tract and the
median family income of the MSA in which it is
located.29
Nationwide, the low- or moderate-income neighborhoods have median family incomes that are, on
average, only 58.2 percent of the median family
income for their respective MSA (table A.l).
Although these neighborhoods exhibit some diversity in the incomes of their residents, on average
they have a high concentration of relatively poor
families and have relatively few families at the
highest income levels. Overall, 56 percent of the
families residing in low- or moderate-income
neighborhoods had 1989 incomes below $25,000,
and nearly 35 percent had 1989 incomes below
$15,000. These low levels of income are reflected
both in elevated poverty rates and in higher
unemployment—28 percent of the residents of
these neighborhoods had incomes that placed
them below the poverty level, and nationwide their
average unemployment rate was more than three
times the rate for residents of upper-income
neighborhoods.
1990, except for income information, which is based on 1989
year-end data. This section draws on material in the "Report to the
Congress on Community Development Lending."
29. Census tracts were classified in the following manner: Lowor moderate-income census tracts are those in which median family
income is less than 80 percent of the median family income for the
M S A in which the tract is located; middle-income census tracts are
those in which median family income is 80 to 120 percent of the
MSA median family income; and upper-income census tracts are
those in which median family income exceeds 120 percent of the
MSA median. Census tracts in each small county (total population
of 30,000 or less) are aggregated to create a small county total to be
consistent with the way HMDA data are reported. In all, eighty-six
small counties are included in the analysis shown in tables 10, 11,
and 12.
105
The differences in the income and employment
circumstances of households across groups of
neighborhoods partly account for the variation in
owner-occupancy rates. In low- or moderateincome neighborhoods, 53 percent of the housing
units in 1990 were rentals, a share nearly two and
one-half times that in upper-income neighborhoods. This difference is reflected in the composition of the housing stock: Whereas 69 percent of
the housing units in upper-income neighborhoods
were in structures housing one to four families,
only 36 percent of the units in low- or moderateincome neighborhoods were in such structures.
Low- or moderate-income neighborhoods, on average, had not only low owner-occupancy rates but
also high concentrations of residential properties
with relatively low market values. For example,
nearly 35 percent of the owner-occupied homes in
low- or moderate-income neighborhoods in 1990
were valued at less than $40,000, compared with
only 2 percent of the owner-occupied homes in
upper-income neighborhoods.30
Vacancy rates, the median age of housing units,
and the proportion of boarded-up units provide
insight into the condition of residential properties.
Vacancy rates in low- or moderate-income neighborhoods were, on average, nearly double those in
upper-income neighborhoods. The median age of
housing units also was substantially higher than in
upper-income neighborhoods. Finally, the proportion of housing units that were boarded up (a sign
of deterioration) was greater than that in either
moderate- or upper-income neighborhoods.
Besides the income, employment, housing, and
property condition characteristics identified thus
far, population characteristics differ across neighborhoods grouped by median family income. The
residents of low- or moderate-income neighborhoods in 1990 were, on average, more than 50 percent black or Hispanic. These minority groups
together accounted for only 9 percent of the population in upper-income neighborhoods. Asians, in
contrast, were relatively equally distributed across
neighborhoods, accounting for approximately
3-4 percent of the residents of both low- or
moderate- and upper-income neighborhoods.
30. Median monthly rents also reflect differences in the value of
residential properties across neighborhoods. The median rent in
low- or moderate-income neighborhoods in 1990 was $397,
whereas the median rent in high-income neighborhoods was $643.
106
Federal Reserve Bulletin • February 1994
A.2.
Characteristics of MSA census tracts, by minority population1
Moderately
minority
Predominantly
minority
17,939
41.3
15,964
36.8
9,496
21.9
115.3
102.3
65.8
10.2
13.7
7.7
8.2
7.9
14.3
21.9
16.1
100.0
7.0
4.7
15.5
15.4
7.8
7.9
7.3
12.7
19.1
14.2
100.0
12.3
6.2
33.4
19.1
7.9
7.1
5.9
9.3
11.7
5.6
100.0
28.4
13.5
32.4
42.2
23.6
68.6
6.5
28.0
.1
30.4
39.5
39.8
50.4
7.9
28.0
.3
14.1
18.3
50.7
38.3
10.0
35.2
1.5
2.2
8.9
7.5
22.6
17.8
17.8
10.3
12.9
100.0
108,908
127.1
3.1
9.9
7.1
19.5
14.2
15.0
10.5
20.7
100.0
126,932
110.9
9.6
19.7
9.8
17.7
10.5
12.2
9.7
10.7
100.0
86,335
71.3
514.3
534.9
436.9
111.4
104.5
85.1
Total (millions)
Percent
Race or ethnic origin (percent)2
Black
Hispanic
Asian
Median age (years)2
Age 65 years or older (percent)2
79.1
41.6
72.5
38.1
38.7
20.3
1.4
1.6
1.1
35.6
14.3
9.2
9.3
4.3
32.9
12.1
42.5
30.4
6.5
29.8
10.6
Moved into census tract during 1989 or 19902
16.7
25.0
21.6
Characteristic
Number of census tracts
Percent
Predominantly
white
INCOME AND EMPLOYMENT 2
Relative neighborhood income3
Distribution of families by annual dollar income (percent)
Less than 15,000
15,000-24,999
25,000-29,999
30,000-34,999
35,000-39,999
40,000-49,999
50,000-74,999
75,000 or more
Total
Percentage of residents below poverty level
Unemployment rate (percent)
HOUSING
All units
Number (millions)
Percent
Renter-occupied (percent)2
In one- to four-family structures (percent)2
Vacancy rate, year-round residences (percent)2
Median age (years)2
Boarded-up (percent)2
Owner-occupied units 2
Distribution by dollar value of property (percent)
Less than 20,000
20,000-39,999
40,000-49,999
50,000-74,999
75,000-99,999
100,000-149,999
150,000-199,999
200,000 or more
Total
Median value (dollars)
Median value as a percentage of median value for MSA
Renter-occupied units 2
Median monthly rent (dollars)
Median monthly rent as a percentage of median value
for MSA
POPULATION
1. Census tracts are categorized by minority population as follows: Predominantly white, less than 10 percent minority population; Moderately
minority, 10 percent to 50 percent minority population; Predominantly
minority, more than 50 percent minority population.
2. Figures are simple averages of the values for the census tracts in a
category; they are calculated by summing the values for all census tracts in
the category and dividing by the number of tracts in the category.
3. Median family income for census tracts as a percentage of MSA
median family income.
SOURCE. Derived from 1990 U.S. census data.
Neighborhoods with Different Racial or
Ethnic Compositions
reveal differences in socioeconomic and demographic status (table A.2). The residents of predominantly minority neighborhoods (defined here as
census tracts in which the minority population
exceeds half of the total population) typically have
As with neighborhood income, comparisons among
neighborhoods grouped by minority population
107
Residential Lending to Low-Income and Minority Families: Evidence from the 1992 HMD A Data
lower relative incomes than the residents of other
neighborhoods. On average, roughly one-third of
the families in predominantly minority neighborhoods had 1989 incomes below $15,000, and
28 percent of the residents had incomes below the
poverty level. In contrast, about one-tenth of the
families in predominantly white neighborhoods had
incomes below $15,000, and only 7 percent of the
residents had incomes below the poverty level.
This pattern is reversed at the opposite end of the
income scale: About 17 percent of the families in
predominantly minority neighborhoods had incomes above $50,000, compared with 38 percent of
the families in predominantly white neighborhoods.
Neighborhoods with large proportions of minority residents are also characterized by high unemployment rates. At the time of the 1990 census, the
average unemployment rate of residents of predominantly minority neighborhoods was 14 percent
compared with 5 percent for residents of predominantly white neighborhoods. Predominantly minority neighborhoods typically have lower owneroccupancy rates, higher vacancy rates, more
boarded-up properties, older homes, and a higher
proportion of lower-valued, owner-occupied
homes. These characteristics are most evident in
minority neighborhoods with large proportions of
black residents.
Central City Neighborhoods Compared with
Other Neighborhoods
The 1990 Census provides information that can be
used to describe the population, housing, and
employment characteristics of residents of MSAs
categorized by whether they reside in neighborhoods in the central city or in the noncentral city
portions. In turn, the 1992 HMDA data provide
information on the characteristics of the borrowers
and types of loans extended to households in central and in noncentral city locations.
The reader is cautioned that population and economic characteristics often vary greatly within the
neighborhoods of any particular central city or
noncentral city location. Moreover, central cities
differ in characteristics from each other, depending,
for instance, on the region of the country.
Central and noncentral city areas are nearly identical in total numbers of housing units. As of 1990,
A.3.
Characteristics of MSA census tracts, by central city
|j or noncentral city tracts 1 - p .
Characteristic
Number of census tracts
Percent
Central city
Noncentral
city
22,771
52.5
20,628
47.5
90.8
109.5
22.8
17.2
8.1
7.8
6.9
11.5
15.5
10.3
100.0
11.1
13.6
7.4
7.9
7.6
13.9
22.2
16.3
100.0
18.7
8.9
8.1
5.3
38.1
49.6
43.9
38.7
50.4
26.2
45.8
65.7
8.7
33.3
.8
6.8
25.5
.2
5.9
15.6
9.5
21.7
13.5
12.7
8.1
12.9
100.0
97,565
2.2
7.2
6.0
19.1
16.5
18.8
12.5
17.9
100.0
124,985
99.9
118.9
459.2
555.4
98.3
108.4
91.4
48.0
98.9
52.0
19.3
13.6
3.9
32.6
13.0
6.6
7.4
3.0
34.2
12.3
23.3
18.2
INCOME AND EMPLOYMENT2
Relative neighborhood income3 ..
Distribution of families by annual
dollar income (percent)
Less than 15,000
15,000-24,999
25,000-29,999
30,000-34,999
35,000-39,999
40,000-49,999
50,000-74,999
75,000 or more
Total
Percentage of residents below
poverty level
Unemployment rate (percent)
HOUSING
All units
Number (millions)
Percent
Renter-occupied (percent)2
In one- to four-family
structures (percent)2
Vacancy rate, year-round
residences (percent)2
Median age (years)2
Boarded-up (percent)2
Owner-occupied units 2
Distribution by dollar value
of property (percent)
Less than 20,000
20,000-39,999
40,000-49,999
50,000-74,999
75,000-99,999
100,000-149,999
150,000-199,999
200,000 or more
Total
Median value (dollars)
Median value as a percentage
of median value for MSA
2
Renter-occupied units
Median monthly rent (dollars)
Median monthly rent as a
percentage of median value
for MSA
POPULATION
Total (millions)
Percent
Race or ethnic origin (percent)2
Black
Hispanic
Asian
Median age (years)2
Age 65 years or older (percent)2 ..
Moved into census tract
during 1989 or 19902
1. Includes only census tracts in MSAs. If any portion of a census tract is
located within a central city boundary, the census tract is classified in the
central city category.
2. Figures are simple averages of the values for the census tracts in a
category; calculated by summing the values for all census tracts in the
category and dividing by the number of tracts in the category.
3. Median family income for census tracts as a percentage of MSA
median family income.
SOURCE, Derived from 1990 U.S. census data.
108
Federal Reserve Bulletin • February 1994
central cities had 38.1 million housing units, and
noncentral city neighborhoods had 38.7 million
units (table A.3). Nonetheless, census information
reveals significant differences, on average, in the
characteristics of central city and noncentral city
populations. The residents of central city areas had
median family incomes that averaged 91 percent of
the median family incomes of the MSAs in which
they are located. The residents of neighborhoods in
noncentral city areas, in contrast, had significantly
higher incomes on average. Both poverty and
unemployment rates reflect these differences: On
average, the poverty rate in central city areas was
18.7 percent in 1990, and the unemployment rate
was 8.9 percent; in contrast, for noncentral city
areas, these rates were 8.1 percent and 5.3 percent.
The housing characteristics of central city and
noncentral city areas also reflect the income and
employment circumstances of households. In central city areas, on average, 43.9 percent of the units
in 1990 were rentals, a rate nearly 70 percent
higher than that in noncentral city areas. Central
city neighborhoods also typically had higher
vacancy rates, older homes, and greater proportions
of boarded-up units.
Finally, central city and noncentral city areas are
substantially different in their racial or ethnic composition. In 1992, blacks and Hispanics accounted
for 32.9 percent of central city residents but only
14 percent of noncentral city residents.
•
109
Industrial Production and Capacity Utilization
for November and December 1993
Released for publication December 15
Industrial production rose 0.9 percent in November; the revised gain for October was 0.7 percent.
The growth in recent months has been led by sharp
increases in the motor vehicles and parts industry,
where the level of production rose 20 percent
between August and November. Excluding motor
vehicles and parts, industrial production grew
0.5 percent in November, with solid gains in the
output of construction supplies and information
processing equipment. At 113.2 percent of its 1987
Industrial production indexes
Twelve-month percent change
J
L
J
L
Materials
1988
Twelve-month percent change
Products
1990
1989
1992
1991
1993
1989
1988
1990
1992
1991
1993
Capacity and industrial production
Ratio scale, 1987 production = 100
— Total industry
Capacity
-
Ratio scale, 1987 production = 100
140
— Manufacturing
120
—
140
Capacity
—
100
Production
1
1
1
1
1
1
1
100
Production
80
1
1
1
1
1
1
1
1
1
1
1
80
1
Percent of capacity
1
1
1
1
Percent of capacity
Total industry
1981
1983
1985
1987
1989
1991
1993
1981
1983
1985
All series are seasonally adjusted. Latest series, December. Capacity is an index of potential industrial production.
120
1987
1989
1991
1993
110
Federal Reserve Bulletin • February 1994
Industrial production and capacity utilization, November 19931
Industrial production, index, 1987 = 100
Percentage change
Category
1993
Aug.
r
Sept.
r
19932
1
Sept.
r
Oct.
r
Oct.'
Nov. P
Aug.
113.2
.2
.4
.7
.1
.4
.8
Total
110.0
111.4
112.2
Previous estimate
110.9
111.4
112.2
Major market groups
Products, total3
Consumer goods
Business equipment
Construction supplies
Materials
110.3
107.8
137.6
98.7
112.2
110.7
107.9
139.3
99.3
112.6
111.4
109.1
140.4
99.6
113.4
112.4
110.0
142.3
100.8
114.3
.2
.1
.3
.3
.1
.3
.1
1.2
.6
.4
Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities
111.9
115.7
107.3
95.5
117.7
112.4
116.9
106.9
97.5
115.3
113.2
118.2
107.1
98.0
115.6
114.4
119.8
107.7
97.7
116.0
.3
.3
.3
-.9
.7
.4
1.0
-.4
2.1
-2.1
NOV.P
Nov. 1992
to
Nov. 1993
.9
4.4
.7
1.1
.8
.3
.7
.9
.8
1.3
1.1
.8
4.2
2.7
10.3
5.9
4.6
.7
1.1
.2
.5
.2
1.0
1.3
.6
-.3
.3
5.0
8.0
1.3
-.1
1.1
Capacity utilization, percent
1992
Average,
1967-92
Low,
1982
High,
1988-89
1993
Nov.
Aug.r
Sept.1
Oct.
NOV.P
Total
81.9
71.8
84.8
80.8
81.7
81.9
82.4
83.0
1.6
Manufacturing
Advanced processing
Primary processing .
Mining
Utilities
81.2
80.7
82.2
87.4
86.7
70.0
71.4
66.8
80.6
76.2
85.1
83.3
89.1
87.0
92.6
79.7
78.4
83.0
87.4
87.1
80.8
79.2
84.8
85.8
88.6
81.1
79.6
84.4
87.7
86.7
81.5
80.2
84.7
88.1
86.8
82.2
80.8
85.5
88.0
87.0
1.8
2.2
.9
-.8
1.1
1. Data seasonally adjusted or calculated from seasonally adjusted
monthly data.
2. Change from preceding month.
average, industrial production was 4.4 percent
above its level a year ago. The recent strength in
output boosted the utilization of total industrial
capacity 0.6 percentage point in November and
0.5 percentage point in October. Capacity utilization now stands at 83.0 percent, the highest rate
since August 1989 and more than 1.0 percentage
point above its 1967-92 average.
When analyzed by market group, the data show
that gains in motor vehicles have generated sharp
increases in the production of durable consumer
goods in each of the past three months. Excluding
autos and trucks, the level of production of consumer durables in November was about 2 percent
higher than in September, a margin reflecting net
gains in appliances, carpeting, and furniture. Production of consumer nondurables remained sluggish, however, advancing just 0.2 percent, and was
3. Contains components in addition to those shown,
r Revised,
p Preliminary.
only 0.5 percent higher than it was a year earlier.
Over the past year, the production of clothing has
been particularly weak.
The rapid expansion in the output of business
equipment over the past three months has been led
by gains in motor vehicles and computers. On
balance, output of the other components in this
market group has changed little since July; declines
in commercial aircraft and related equipment have
largely offset gains in other categories.
Among materials, the sharp rise in the output of
durables in the past three months has been spurred
by sizable increases in the production of semiconductors and motor vehicle parts. The production of nondurable goods materials increased
1.1 percent, largely because of a pickup in the
production of paper, paperboard, textiles, and
chemicals. Nevertheless, output of nondurable
Industrial Production and Capacity Utilization
goods was only slightly higher than in August. The
output of energy materials was about unchanged
last month.
When analyzed by industry group, the data show
that manufacturing output expanded 1.0 percent in
November and had a revised gain of 0.7 percent in
October. The output of durable goods manufacturers was up 1.3 percent, and the output of nondurable goods manufacturers rose 0.6 percent. The
utilization of manufacturing capacity increased
0.7 percentage point, to 82.2 percent, a level 1 percentage point above the 1967-92 average. The
utilization rate in advanced processing increased
0.6 percentage point, to 80.8 percent, a level about
equal to the 1967-92 average. The recent increase
for the advanced-processing group was concentrated in the motor vehicles and parts industry,
where utilization increased more than 5 percentage
points in each of the past two months; at 83.2 percent, the utilization rate in motor vehicles and parts
now stands nearly 8 percentage points above its
1967-92 average. The utilization rate in primary
processing increased 0.8 percentage point in
November, to 85.5 percent, a level more than
3.0 percentage points above the 1967-92 average.
Last month's increase was concentrated in lumber
products, paper and products, petroleum products,
and stone, clay, and glass products. At 91.7 percent
and 94.1 percent respectively, the November utilization rates in lumber and petroleum were each
nearly 9.0 percentage points above their 1967-92
averages.
The output at utilities rose 0.3 percent, and the
output of mines declined 0.3 percent.
Released for publication January 14
Industrial production rose 0.7 percent in December.
For the fourth quarter as a whole, total output
advanced at an annual rate of 7.5 percent. Continuing the pattern begun in September, December's
growth was boosted by developments in the motor
vehicles and parts industry, where production grew
4.9 percent for the month, and has increased
approximately 25 percent since August. Excluding
motor vehicles and parts, industrial production
grew 0.5 percent in December, about the same as
November's increase; this gain reflected continued
111
growth in the output of construction supplies, durable goods materials, and business equipment. At
114.0 percent of its 1987 average, industrial production in December was 4.6 percent above its
level a year ago. Reflecting the sustained strong
growth in output, the utilization of total industrial
capacity rose 0.5 percentage point in December
after having increased 0.7 percentage point in
November. Capacity utilization at the end of 1993
stood at 83.5 percent, 2.5 percentage points above
its year-ago level but still below its most recent
peak, which was in 1988-89.
When analyzed by market group, the data show
that the output of consumer goods was pushed up
by another sizable gain in automotive products.
However, the output of other consumer durable
goods, such as appliances, eased in December after
two months of strong growth. Despite last month's
decline, the production of consumer durables
excluding automotive products grew at an annual
rate of more than 6 percent during the fourth quarter. The output of nondurables remained sluggish:
The output of clothing and consumer paper products continued to be weak, and the production of
consumer fuels, mainly gasoline, declined sharply
last month.
The rapid expansion in the output of business
equipment since August continued in December,
led by strong gains in motor vehicles and computers. The production of most other categories of
business equipment, except commercial aircraft,
also increased.
Among materials, another sharp rise in the output of durables in December was driven largely by
sizable increases in the production of semiconductors and parts for motor vehicles. However, the
production of nondurable goods materials declined
slightly, as the output of chemical materials rose
but the output of paper materials declined. The
output of energy materials expanded 0.8 percent,
with coal, crude oil, and utilities production all up
noticeably. Nevertheless, production for this market group was down about 1 percent from its
December 1992 level.
When analyzed by industry group, the data show
that manufacturing output expanded 0.7 percent in
December after a gain of 1.1 percent in November.
Production by manufacturers of durable goods
grew 1.3 percent, with particularly strong increases
recorded by the iron and steel, nonelectrical
112
Federal Reserve Bulletin • February 1994
Industrial production and capacity utilization, December 1993
Industrial production, index, 1987=100
Percentage change
Category
1993
19932
Sept.r
Oct.'
Nov.'
Dec.p
114.0
Total
111.4
112.1
113.2
Previous estimate
111.4
112.2
113.2
Major market groups
Products, total3
Consumer goods . . .
Business equipment
Construction supplies
Materials
110.5
107.4
139.4
99.3
112.7
111.4
108.6
140.8
99.9
113.2
112.4
109.6
142.9
100.7
114.3
Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities
112.3
117.0
106.5
97.7
115.3
113.2
118.3
107.0
98.2
114.6
114.5
120.1
107.6
97.4
115.4
Sept.'
Nov.'
Oct.'
.3
.7
.9
.4
.7
.9
113.0
109.8
144.9
101.3
115.5
.2
-.4
1.4
.6
.5
.8
1.1
1.0
.6
.5
115.3
121.7
107.4
97.9
116.6
.4
1.1
-.7
2.3
-2.1
.8
1.1
.4
.6
-.6
Dec.p
.7
4.6
.9
.8
1.5
.8
.9
.5
.2
1.4
.6
1.1
4.4
2.1
11.8
7.2
5.0
1.1
1.5
.6
-.8
.8
.7
1.3
-.2
.5
1.0
5.6
8.8
1.3
-.4
-.1
MEMO
Capacity utilization, percent
1992
Average,
1967-92
Low,
1982
Dec. 1992
to
Dec. 1993
1993
High,
1988-89
Dec.
Sept.'
Oct.'
Nov.'
Dec.P
Capacity,
percentage
change,
Dec. 1992
to
Dec. 1993
Total
81.9
71.8
84.8
81.0
81.9
82.3
83.0
83.5
1.6
Manufacturing
Advanced processing
Primary processing .
Mining
Utilities
81.2
80.7
82.3
87.4
86.7
70.0
71.4
66.8
80.6
76.2
85.1
83.3
89.1
87.0
92.6
79.8
78.6
82.9
87.8
88.5
81.0
79.6
84.4
87.8
86.7
81.5
80.1
84.8
88.4
86.1
82.3
80.9
85.7
87.7
86.6
82.7
81.4
86.0
88.2
87.5
1.9
2.3
.9
-.8
1.1
1. Data seasonally adjusted or calculated from seasonally adjusted
monthly data.
2. Change from preceding month.
machinery, and motor vehicles and parts industries.
By contrast, output of nondurable goods manufacturers declined 0.2 percent on a broad front; food,
apparel, paper, printing and publishing, and petroleum all posted lower output for the month. The
output at utilities rose 1.0 percent, and the output of
mines increased 0.5 percent.
Manufacturing capacity utilization increased
0.4 percentage point in December to 82.7 percent.
Rising utilization in durable goods manufacturing
has accounted for all of the increase in the factory
utilization rate over the past two months. Increases
in utilization have been particularly sharp in primary metals and in motor vehicles and parts. By
contrast, the utilization rate in nondurables manufacturing declined 0.2 percentage point.
3. Contains components in addition to those shown,
r Revised,
p Preliminary.
Notice of Revised Indexes
Revised indexes of industrial production and rates
of capacity utilization will be published in the G. 17
(419) statistical release in February 1994. Revised
production statistics will begin in 1991 and revised
capacity utilization statistics will begin in 1990.
• The revisions to production primarily reflect
the incorporation of more comprehensive monthly
source data, review of the production factor coefficients, and updated seasonal factors.
• The revisions to capacity utilization will reflect
improved estimates of capital stocks and preliminary results from the Census Survey of Plant
Capacity for 1991 and 1992.
Industrial Production and Capacity Utilization
• Diskettes containing the revised data will be
available on the day of release from the Board of
Governors of the Federal Reserve System, Publications Services, at (202) 452-3245.
113
NOTE. This issue contains two releases on industrial
production and capacity utilization, the one for December 15, 1993 (November data) and the one for
January 14, 1994 (December data). The release for
February 1994 (containing January data) will appear
in the March issue.
114
Statement to the Congress
Statement by J. Virgil Mattingly, General Counsel, Board of Governors of the Federal Reserve
System, before the Committee on Banking, Finance and Urban Affairs, U.S. House of Representatives, December 9, 1993
I am pleased to appear today to testify in connection with the committee's hearing into recent
requests that Sheikh Zayed al-Nahyan and two of
his adult sons be granted head of state immunity
in connection with pending civil litigation. The
litigation relates to the acquisition of the First
American banking organization by the Bank of
Credit and Commerce International, S.A., and
its affiliates (collectively BCCI). Sheikh Zayed is
the President of the United Arab Emirates
(UAE) and the ruler of Abu Dhabi, one of the
emirates that make up the UAE.
FEDERAL RESERVE
ACTIONS RELATED
ENFORCEMENT
TO THE BCCI
At the outset, you have asked me to summarize
briefly the BCCI matter and the Board's enforcement actions relating to the BCCI. The irregular
and unlawful operations of the BCCI have been
described in detail at previous hearings before
this and other congressional committees. In
brief, before the BCCI closed in July 1991, it
operated banking offices in numerous countries
throughout the world but was not subject to
supervision as a consolidated organization in its
home country. This lack of consolidated supervision facilitated the BCCI's ability to carry out
fraudulent transactions by, for example, allowing
the manipulation of accounts through transfers of
funds among its affiliates.
Much evidence has now come to light disclosing a complex and massive fraud at the BCCI,
including mismanagement, substantial loan and
treasury account losses, misappropriation of
funds, unrecorded deposits, the creation and
manipulation of fictitious accounts to conceal
bank losses, and concealment from regulatory
authorities of the BCCI's true financial position.
The BCCI never received regulatory approval to
accept deposits from the general public in the
United States, although it did operate several
agencies here. However, evidence uncovered as
a result of formal investigations by the Federal
Reserve and other authorities shows that the
BCCI did engage in the United States in a
scheme to acquire controlling interests in U.S.
banking organizations without the required previous regulatory approval. The BCCI carried out
this scheme by causing persons financed by the
BCCI to acquire voting shares of banking organizations as the nominees of the BCCI. As a
result of this scheme, the BCCI acquired controlling interests in the Credit and Commerce American Holdings, N.V. (CCAH), the holding company established to acquire the First American
banks, which operated in Virginia, Maryland,
Washington, D.C., New York, and Tennessee,
as well as the Independence Bank in California
and the National Bank of Georgia.
A series of administrative enforcement actions
by the Federal Reserve Board have grown out of
the BCCI's unlawful acquisition of banking organizations in the United States. First, the Board
instituted actions against the BCCI itself and
related persons arising out of the First American
and National Bank of Georgia transactions. The
Board's charges were resolved as part of a comprehensive plea agreement that also resolved
parallel criminal prosecutions against the BCCI
brought by the Justice Department and the New
York County District Attorney. The BCCI pled
guilty to the criminal charges, and the BCCI's
U.S. assets, estimated at several hundred million
dollars, were forfeited to the United States.
Under the agreement, half of the forfeited assets
would then be paid to a worldwide victims' fund
to compensate innocent depositors. The BCCI
also consented to the Board's $200 million civil
115
money penalty, with the Board agreeing to stay
collection of the penalty in light of the asset
forfeiture. The plea agreement also incorporated
a requirement that the BCCI's interest in the
First American banks would be fully divested,
which has now been accomplished, and that the
proceeds from the sale of that interest would be
forfeited as an asset of the BCCI under the
agreement.
Federal Reserve enforcement actions were
also aimed at various persons who served as the
BCCI's senior management or as nominees of the
BCCI in acquiring and retaining control of U.S.
banking organizations. These persons include
Kamal Adham, a Saudi Arabian businessman
who was charged with acquiring and holding
shares of First American's holding company as a
nominee for the BCCI. Adham has paid a $10
million civil money penalty as well as $3 million
in reimbursement to cover investigative costs.
He has also been permanently barred from banking in the United States.
The second major BCCI-related enforcement
action by the Federal Reserve involves Ghaith
Pharaon, another Saudi businessman. This action seeks a civil money penalty of $37 million
and an order prohibiting Pharaon from the banking industry, primarily for his alleged participation in the BCCI's unlawful acquisition of the
Independence Bank. The Board's proceedings
against Pharaon are pending. To assure that any
possible civil money penalty assessed by the
Board can be collected, the Board has obtained a
federal district court order freezing Pharaon's
U.S. assets until administrative proceedings before the Board have been completed. Pharaon is
also facing three federal indictments and an indictment in New York County.
Of the other persons charged in this proceeding
and those of First American, five are now subject
to Board orders assessing penalties or banning
them from banking, including Agha Hasan Abedi,
the founder and president of the BCCI, and
Swaleh Naqvi, a principal officer of the organization. Actions seeking to impose similar sanctions
against three other persons are pending.
A third major enforcement action brought by
the Federal Reserve involves Clark Clifford and
Robert Altman, who, among other things, served
as counsel for the BCCI and the CCAH and as
senior management of the First American organization. The Board's case has been stayed pending a final decision on whether federal criminal
charges against these persons will be reinstated.
The fourth major BCCI-related action is
against Khalid bin Mahfouz, a Saudi banker, and
the bank his family owns in Saudi Arabia, who
are charged with unlawfully acquiring and holding a 28 percent block of shares of First American's holding company from 1986 through at
least 1990 without regulatory approval. The
Board's action seeks a $170 million civil money
penalty from Mahfouz. As a result of a federal
court asset freeze lawsuit, letters of credit, totaling $122 million, have been provided to the
Board in connection with the civil penalty proceeding. Mahfouz has also been indicted in the
County of New York.
INVOLVEMENT
OF THE RULING
ABU DHABI WITH THE BCCI
FAMILY
OF
The Abu Dhabi ruling family had substantial ownership interests in both the BCCI and the First
American organization. After the Board's August
1981 approval of the acquisition of the First American banks by CCAH, Sheikh Zayed and his
oldest son, Khalifa, became substantial investors
in the CCAH, each one holding about 10 percent
of its voting shares. Since the formation of the
CCAH, the Abu Dhabi Investment Authority
(ADIA) has separately owned between 6 percent
and 8 percent of voting shares of that company.
At this time, none of the Federal Reserve's
pending enforcement actions names the Abu
Dhabi ruling family or the ADIA; nor in any of
the actions brought by the Federal Reserve
against others has the Abu Dhabi ruling family or
ADIA been alleged to have served as BCCI
nominees in controlling the shares of First American's holding company.
The Federal Reserve has not, however, had
access to all of the evidence relating to the
ownership of CCAH shares by members of the
Abu Dhabi ruling family and related interests and
has requests outstanding for access to witnesses
and documents in Abu Dhabi. We are continuing
to pursue all relevant information relating to the
ownership of shares of the CCAH.
116
Federal Reserve Bulletin • February 1994
REQUESTS FOR HEAD OF STATE
IMMUNITY
BY SHEIKH ZAYED AND HIS SONS
Sheikh Zayed and his sons have moved to be
dismissed as defendants in a civil lawsuit brought
against them and several other BCCI-related
persons by the First American organization. The
lawsuit, filed in federal district court in Washington, D.C., seeks, among other things, damages
for injuries to the organization resulting from its
unlawful acquisition by the BCCI. As we understand, Sheikh Zayed asserts that, under the doctrine of head of state immunity, he, as the head of
state of the UAE, and his immediate family are
not subject to lawsuits in the United States. We
understand that the State Department has been
requested to express a view on whether head of
state immunity applies to Sheikh Zayed and his
sons.
Thus, the specific question as to whether head
of state immunity requires the dismissal of Sheikh
Zayed and his sons as defendants in the pending
civil suit is now before the federal district court
and the Department of State, which traditionally
speaks for the executive branch on questions of
immunity for foreign rulers. The Board is not a
party to the civil litigation and has not taken a
position on the head of state immunity issue. Staff
members of the State Department have solicited
the views of the Board's staff on the possible
effects on the Board's bank regulatory powers if
this immunity request was granted.
EFFECT OF GRANTING IMMUNITY
AB U DHABI R ULING FAMIL Y
TO THE
If, as a result of the Board's ongoing investigation into BCCI matters, a formal enforcement
action were to be taken against the ruler of Abu
Dhabi, it is very possible that the Board's ability
to prosecute such an action could be impaired if
immunity were granted. As we understand it, the
scope of head of state immunity has not been
precisely defined, but it is possible that such
immunity could be interpreted as affording complete protection against any type of civil action in
this country, including a regulatory enforcement
proceeding. Moreover, it is not clear whether the
grant of head of state immunity to the ruler would
cover his adult sons. We are not aware of any
situation in the past in which a bank regulatory
agency sought to take formal enforcement action
against a foreign head of state.
IMPACT OF IMMUNITY GRANT ON
REGULATION OF FOREIGN
GOVERNMENTOWNED BANKS
With regard to the more general question, a grant
of immunity to a head of state who owns or
controls a banking organization operating in the
United States could restrict the Board's ability to
ensure compliance with the banking laws. As
explained earlier, in such a case the grant of head
of state immunity could be interpreted as barring
the Board from taking any enforcement action
against a head of state who was a principal
shareholder of the organization. In addition, because of this potential limitation on the exercise
of an important regulatory tool, the issue of head
of state immunity would be a significant factor in
any application by a head of state to acquire a
U.S. bank unless there was an effective waiver of
immunity by the head of state.
Based on a review of available data, we are
unaware of any instance in which a person who
can be identified as a head of state, or as a
member of the household of a head of state, at
the present time owns 5 percent or more of the
shares of a bank with operations in the United
States. However, in shareholder lists required to
be filed with the Federal Reserve we do not
request that a head of state be identified as such,
so that we cannot say for certain that no head of
state currently owns shares of a bank doing
business here.
As this committee is aware, foreign government entities own several banking organizations
operating in the United States. The scope of the
immunity granted to a foreign government entity
in a civil action is governed by the Foreign
Sovereign Immunities Act (FSIA). That act does
not extend immunity to commercial activity by a
foreign state entity in the United States, which
we believe should include the acquisition and
control of U.S. banks or the conduct by a foreign
bank of activities in this country. Accordingly,
under this view of the FSIA, we believe that a
Statement
defense of sovereign immunity should not interfere with the effective regulation of the operations of foreign government owned banks in the
United States in the future. In this regard, the
defense of sovereign immunity has not been
raised in any of the enforcement actions taken to
date by the Board against foreign governmentowned banks.
CONCLUSION
Although questions as to the existence and scope
of immunity for the heads of foreign states or
to the Congress
117
foreign government entities are determined by
authorities other than the Federal Reserve, a
grant of head of state immunity to an person
controlling a banking organization with operations in the United States could possibly block
regulatory actions against the head of state to
enforce the banking laws. However, we are not
aware of any situation in the past when immunity
has restricted the exercise of regulatory powers
over foreign government-owned banking organizations, and possible problems related to immunity for foreign heads of state might be dealt with
in the future by requiring a waiver of such
•
immunity as a condition for approval.
118
Announcements
APPOINTMENT OF NEW MEMBERS TO THE
THRIFT INSTITUTIONS ADVISORY
COUNCIL
The Federal Reserve Board announced on December 8, 1993, the names of three new members of its
Thrift Institutions Advisory Council (TIAC) and
designated a new president and vice president of
the council for 1994.
The council is an advisory group composed of
twelve representatives from thrift institutions. The
Board established the panel in 1980, and it includes
representatives from savings and loans, 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.
Beatrice D'Agostino, Chairman, President, and
CEO of the New Jersey Savings Bank, Somerville,
New Jersey, will serve as president of the council
for 1994, and Charles John Koch, President and
CEO of Charter One Bank, F.S.B., Cleveland,
Ohio, will serve as vice president.
The three new members, named for two-year
terms beginning January 1,1994, are the following:
Malcolm E. Collier, Chairman and CEO, First Federal
Savings Bank, Lakewood, Colorado
Stephen D. Taylor, President and CEO, American
Savings of Florida, F.S.B., Miami, Florida
John M. Tippets, President and CEO, American
Airlines Employees Federal Credit Union, DallasFort Worth Airport, Texas.
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
Kerry Killinger, Chairman, President, and CEO,
Washington Mutual Savings Bank, Seattle, Washington
Robert McCarter, Chairman and CEO, New Bedford
Institution for Savings, New Bedford, Massachusetts
Nicholas W. Mitchell, Jr., President and CEO, Piedmont Federal Savings and Loan Association, WinstonSalem, North Carolina
Stephen W. Prough, President and CEO, Western
Financial Savings Bank, Irvine, California.
REGULATION
A:
AMENDMENTS
The Federal Reserve Board issued on December
16, 1993, amendments to Regulation A (Extensions of Credit by Federal Reserve Banks) to
implement section 142 of the Federal Deposit
Insurance Corporation Improvement Act of 1991
(FDICIA) regarding limits on Federal Reserve
Bank credit. The amendments were effective January 30, 1993.
Under section 142, after December 19, 1993, the
Board may be financially liable to the Federal
Deposit Insurance Corporation (FDIC) for certain
losses incurred by the insurance funds administered
by the FDIC. Section 142 amended section 10B of
the Federal Reserve Act to discourage advances
under that section to undercapitalized and critically
undercapitalized insured depository institutions.
The Congress was concerned that such advances
could lead to increased losses to the insurance
funds.
Besides making several technical and stylistic
changes to update and clarify the regulation, the
amendments accomplish the following:
• Place limitations on Federal Reserve Bank
credit to undercapitalized and critically undercapitalized insured depository institutions
• Describe the calculation of amounts that may
be payable to the FDIC
• Define undercapitalized and critically undercapitalized insured depository institutions
• Clarify the term "viable," as it applies to an
undercapitalized insured depository institution
• Provide for assessments of the Federal Reserve
Banks for amounts that the Board may be required
to pay the FDIC under section 142.
119
The revised regulation will guide the Federal
Reserve Banks in their dealings with undercapitalized and critically undercapitalized institutions and
will advise these institutions and their banking
supervisors of potential limitations on the availability of Federal Reserve Bank credit.
REGULATION
B:
AMENDMENTS
The Federal Reserve Board issued on December 10, 1993, amendments to its Regulation B
(Equal Credit Opportunity) regarding the right
of credit applicants to receive copies of appraisal
reports.
The amendments define the coverage of the
appraisal requirements to be loans secured by a lien
on a residential structure containing one to four
units. The regulation provides alternative methods
of compliance with the law. Creditors may choose
to automatically provide a copy of appraisal reports
to all applicants for covered loans. Or they may
choose to provide a copy upon the applicant's
request and be subject to other provisions in the
regulation. For creditors that do not automatically
provide copies of appraisal reports, the regulation
includes a requirement that applicants be notified
of the right to receive a copy and limits when
an applicant must request (and the creditor must
provide) it.
The Regulation B amendments implement and
clarify the amendments to the Equal Credit Opportunity Act contained in the Federal Deposit Insurance Corporation Improvement Act of 1991, which
took effect in December 1991. The amendments to
the regulation were effective December 14, 1993,
but compliance with the regulatory requirements is
optional until June 14, 1994.
RISK-BASED CAPITAL
AMENDMENTS
PROPOSED
ACTIONS
The Federal Reserve Board requested on December 10, 1993, public comment on a proposal to
assess charges for examinations of U.S. branches,
agencies, and representative offices of foreign
banks. Comments should be received by April 20,
1994.
The Federal Reserve Board also requested on
December 20, 1993, public comment on a proposal
to amend its risk-based capital guidelines for state
member banks and bank holding companies to
include in tier 1 capital net unrealized holding
gains and losses on securities available for sale.
This component of common stockholders' equity
was created by the Financial Accounting Standards
Board (FASB) Statement No. 115 "Accounting for
Certain Investments in Debt Equity Securities."
Comments were requested by January 21, 1994.
GUIDELINES:
The Federal Reserve Board announced on December 20, 1993, adoption of amendments to its riskbased capital guidelines affecting the treatment of
certain multifamily housing loans. This rule was
effective December 31, 1993.
The revised guidelines for state member banks
and bank holding companies lower the risk weight
from 100 percent to 50 percent for multifamily
housing loans that meet criteria specified in the
proposal. This change was directed by a provision
of section 618(b) of the Resolution Trust Corporation Refinancing, Restructuring, and Improvement
Act of 1991 (RTCRRIA).
In a separate action on December 16, 1993, the
Board approved a recommendation from the Federal Financial Institutions Examination Council to
seek public comment on a Notice of Proposed
Rulemaking and an advance Notice of Proposed
Rulemaking concerning the regulatory treatment of
recourse arrangements and direct credit substitutes,
which, to the extent that they apply to multifamily
housing loans, would if adopted also satisfy the
requirements of certain provisions of section 628(b)
of RTCCRIA. This notice will be issued at a later
date.
CHANGE IN BOARD
STAFF
Effective January 1, 1994, the Division of Banking
Supervision and Regulation assumed the responsibility for the National Information Center (NIC).
Concurrently, the NIC Function Office was established in the division. Also effective January 1,
1994, William Schneider transferred to the division
to continue as NIC Project Director.
•
120
Minutes of the
Federal Open Market Committee Meeting
of November 16,1993
A meeting of the Federal Open Market Committee
was held in the offices of the Board of Governors of the Federal Reserve System in Washington, D.C., on Tuesday, November 16, 1993, at
9:00 a.m.
Present:
Mr. Greenspan, Chairman
Mr. McDonough, Vice Chairman
Mr. Angell
Mr. Boehne
Mr. Keehn
Mr. Kelley
Mr. LaWare
Mr. Lindsey
Mr. McTeer
Mr. Mullins
Ms. Phillips
Mr. Stern
Messrs. Broaddus, Jordan, Forrestal, and Parry,
Alternate Members of the Federal Open
Market Committee
Mr. Winn, Assistant to the Board, Office of Board
Members, Board of Governors1
Mr. Ettin, Deputy Director, Division of Research
and Statistics, Board of Governors
Mr. Madigan, Associate Director, Division of
Monetary Affairs, Board of Governors
Mr. Stockton, Associate Director, Division of
Research and Statistics, Board of Governors
Ms. Low, Open Market Secretariat Assistant,
Division of Monetary Affairs, Board of
Governors
Mr. Beebe, Ms. Browne, Messrs. J. Davis, T. Davis,
Dewald, Goodfriend, and Ms. Tschinkel,
Senior Vice Presidents, Federal Reserve
Banks of San Francisco, Boston, Cleveland,
Kansas City, St. Louis, Richmond,
and Atlanta respectively
Mr. Guentner, Assistant Vice President, Federal
Reserve Bank of New York
Messrs. R. Davis, Lang, Lindsey, Promisel,
Rolnick, Rosenblum, Scheld, Siegman,
Simpson, and Slifman, Associate Economists
By unanimous vote, the minutes for the meeting
of the Federal Open Market Committee held on
September 21, 1993, were approved.
The Report of Examination of the System Open
Market Account, conducted by the Board's Division of Reserve Bank Operations and Payment
Systems as of the close of business on April 30,
1993, was accepted.
The Manager for Foreign Operations reported on
developments in foreign exchange markets during
the period since the September meeting. There
were no open market transactions in foreign currencies for the System account during this period, and
thus no vote was required of the Committee.
By unanimous vote, the Committee authorized
the renewal for further periods of one year of the
Ms. Lovett, Manager for Domestic Operations,
System Open Market Account
Mr. Fisher, Manager for Foreign Operations,
System Open Market Account
1. Attended portion of meeting on the review of F O M C practices with regard to recording and transcribing FOMC meeting
discussions and the release of information about such discussions.
Messrs. Hoenig, Melzer, and Syron, Presidents
of the Federal Reserve Banks of Kansas City,
St. Louis, and Boston respectively
Mr. Kohn, Secretary and Economist
Mr. Bernard, Deputy Secretary
Mr. Coyne, Assistant Secretary
Mr. Gillum, Assistant Secretary
Mr. Mattingly, General Counsel
Mr. Patrikis, Deputy General Counsel
Mr. Prell, Economist
Mr. Truman, Economist
121
System's reciprocal currency ("swap") arrangements with foreign central banks and the Bank for
International Settlements. The amounts and maturity dates of these arrangements are indicated in the
table that follows:
Foreign bank
Austrian National Bank
Bank of England
Bank of Japan
Bank of Mexico
Bank of Norway
Bank of Sweden
Swiss National Bank
Amounts
(millions of
dollars
equivalent)
250
3,000
5,000
700
250
300
4,000
Term
(months)
Maturity
dates
12
12/04/93
12/04/93
12/04/93
12/04/93
12/04/93
12/04/93
12/04/93
Bank for International
Settlements
Swiss francs
Other authorized European
currencies
600
12/04/93
1,250
12/04/93
National Bank of Belgium ...
Bank of Canada
National Bank of Denmark ..
Bank of France
German Federal Bank
Bank of Italy
Netherlands Bank
1,000
2,000
250
2,000
6,000
3,000
500
12/18/93
12/28/93
12/28/93
12/28/93
12/28/93
12/28/93
12/28/93
The Manager for Domestic Operations reported
on developments in domestic financial markets and
on System open market transactions in U.S. government securities and federal agency obligations
during the period September 21, 1993, through
November 15, 1993. By unanimous vote, the Committee ratified these transactions.
The Committee then turned to a discussion of the
economic and financial outlook and the formulation of monetary policy for the intermeeting period
ahead. A summary of the economic and financial
information available at the time of the meeting
and of the Committee's discussion is provided below, followed by the domestic policy directive that
was approved by the Committee and issued to the
Federal Reserve Bank of New York.
The information reviewed at this meeting suggested some strengthening in the expansion of
economic activity in recent months. Consumer
spending had picked up; housing activity was
quickening; and business spending for durable
equipment had continued to trend higher, though at
a reduced pace. Industrial production, particularly
manufacturing, and employment had posted solid
gains. At the same time, inflation had remained
muted, with consumer prices increasing moder-
ately on balance in recent months and producer
prices falling.
Total nonfarm payroll employment rose appreciably in September and October after declining
slightly in August. Although job gains were widespread in October, a large part of the increase was
in various business services, notably temporary
employment agencies. In other categories, construction employment registered its largest monthly
rise since last spring, and jobs in manufacturing
increased after seven months of declines. The civilian unemployment rate edged up to 6.8 percent in
October.
Industrial production rose sharply in October,
with manufacturing more than accounting for
the increase. Part of the gain in manufacturing
reflected a further rebound in the output of motor
vehicles and parts. Aside from motor vehicles,
however, the production of business equipment
was lifted by another surge in office and computing
equipment, and the output of consumer goods was
boosted by strength in furniture and appliances.
Utilization of total industrial capacity rose in
October, reaching a level last seen in the fourth
quarter of 1992.
Nominal retail sales were up substantially in
October after changing little in September. Sales in
October were boosted by a turnaround in spending
at automobile dealerships and by a surge at building materials and supply stores. Sales at other types
of retail outlets were mixed. Purchases at general
merchandise stores were brisk. However, sales at
apparel outlets and at furniture and appliance stores
edged down after rising strongly for several
months, and the increase in spending at gasoline
stations entirely reflected the effects of the new
federal gasoline tax on pump prices. Housing activity strengthened further in the third quarter. Starts
of single-family homes in August and September
were at their highest levels in almost five years;
starts of multifamily units also picked up in September, although construction activity in this sector
remained at a very low level. Sales of new and
existing homes moved up further in the third quarter and were especially strong in September.
Real business capital spending increased in the
third quarter at a considerably slower pace than
earlier in the year. The slowdown largely reflected
a smaller rise in spending for producers' durable
equipment, as reduced outlays for aircraft and
122
Federal Reserve Bulletin • February 1994
motor vehicles more than offset continued strong
gains in spending for computing equipment and
other capital goods. Nonresidential construction
was down slightly in the third quarter after a sizable advance over the first half of the year. Office
and industrial building activity appeared to
have bottomed out, but high vacancy rates and
declining property values continued to limit new
construction.
Business inventories climbed significantly further in September; for the third quarter as a whole,
however, stocks were accumulated at a somewhat
slower pace than in the first half of the year. At the
retail level, inventories rebounded in September
after declining on balance over July and August.
The ratio of inventories to sales for retailing edged
up in September but remained near the low end of
its range over the past year. Inventory accumulation in the wholesale sector slowed in September
after rising substantially in August; the inventoryto-sales ratio for this sector was unchanged at the
midpoint of its range over the past several years. In
manufacturing, stocks dropped in September after
changing little over the two previous months; with
factory shipments up, the stocks-to-shipments ratio
for manufacturing as a whole fell in September to
its lowest level in recent years.
The nominal U.S. merchandise trade deficit
declined further in August, but for July and August
combined the deficit was about the same as its
average rate for the second quarter. The value of
both exports and imports was slightly lower in
July-August than in the second quarter. The
decline in the value of exports primarily reflected
shortfalls in shipments of aircraft and automotive
products, and the drop in imports was associated
with reduced imports of oil and automotive products. Available data indicated that the performance
of the major foreign industrial economies continued to be mixed. Economic activity appeared to
have remained weak in Japan in the third quarter
and to have stagnated in western Germany after
increasing moderately in the second quarter. On the
other hand, the recessions in France and Italy
seemed to have bottomed out, and the economies
of Canada and the United Kingdom to have recovered somewhat further.
Producer prices for finished goods fell in October, retracing the small increase in September;
excluding the effects of higher prices for finished
foods and energy goods, producer prices were
down over the September-October period. Over
the twelve-month period ended in October, producer prices for nonfood, non-energy finished
goods were fractionally higher on balance, the lowest yearly increase on record for this index, which
was introduced in 1973. Consumer prices rose in
October after being unchanged in September, with
the increase partly reflecting the effect of the implementation of the new federal gasoline tax. For
nonfood, non-energy consumer items, the rise in
consumer prices over the twelve months ended in
October was considerably smaller than the rise
over the comparable period ended in October 1992.
Labor compensation costs did not show a comparable downtrend. The increase in hourly compensation for private industry workers in the third
quarter was about the same as in the second quarter. For the twelve months ended in September,
hourly compensation advanced slightly faster than
over the comparable year-earlier period.
At its meeting on September 21, 1993, the Committee adopted a directive that called for maintaining the existing degree of pressure on reserve positions and that did not include a presumption about
the likely direction of any adjustment to policy
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 or slightly lesser
reserve restraint might be acceptable during the
intermeeting period. The reserve conditions associated with this directive were expected to be consistent with modest growth of M2 and M3 over the
balance of the year.
Open market operations during the intermeeting
period were directed toward maintaining the existing degree of pressure on reserve positions. Adjustment plus seasonal borrowing averaged somewhat
above anticipated levels as a result of increased
demands for adjustment credit associated with
quarter-end pressures in financial markets and an
unexpected swing in the Treasury balance. The
federal funds rate remained close to 3 percent over
the period.
Most other interest rates were up somewhat over
the period since the Committee's September meeting. Treasury bill rates rose in part because of the
Minutes of the Federal Open Market Committee Meeting
Treasury's need to rely more heavily on bill issuance in a quarter containing a reduced schedule for
auctioning long-term debt. Intermediate- and longterm yields fell in the weeks following the September meeting and reached twenty-year lows. These
declines were more than reversed subsequently,
however, when investors interpreted incoming data
as suggesting stronger economic growth and credit
demands over the intermediate term and a somewhat greater likelihood of some tightening of
monetary policy. Most indexes of stock market
prices posted robust gains early in the intermeeting
period, but these gains subsequently were pared
back as interest rates moved higher.
In foreign exchange markets, the trade-weighted
value of the dollar in terms of the other G-10
currencies appreciated over the intermeeting
period. The strengthening of the dollar, and the
associated rise in U.S. long-term interest rates relative to foreign rates, reflected both more optimistic
expectations for growth in the United States and
more pessimistic assessments for the course of
economic activity in continental Europe and Japan.
M2 registered a relatively strong advance in September, but growth slowed again in October. The
September pickup partly reflected an unexpected
surge in the volatile overnight repurchase agreement (RP) component of M2. Ml also was strong,
but the total of time and savings deposits continued
to decline, apparently in large part because of the
persisting allure of capital market instruments.
Growth of M3 strengthened somewhat more than
M2 over the two months, reflecting a run-up in
institution-only money market funds. For the year
through October, M2 and M3 were estimated to
have grown at rates a little above the lower ends of
the Committee's ranges for the year. Total domestic nonfinancial debt expanded at a moderate rate in
recent months, and for the year through September
it was estimated to have increased at a rate in the
lower half of the Committee's monitoring range.
The staff projection prepared for this meeting
suggested that economic activity, after advancing
relatively strongly in the fourth quarter, would
expand moderately next year, about in line with the
potential rate of economic growth over time, and
thus would be associated with limited, if any, further reductions in margins of unemployed labor
and capital. Consumer spending, which had buoyed
growth recently, was expected to expand at the
123
same pace as incomes over the year ahead. In
addition,fiscalrestraint and uncertainty about other
government policies would continue to inhibit the
expansion, and a sluggish acceleration in foreign
industrial economies pointed to only modest
improvement in export demand. However, improving balance sheet positions and credit supply conditions were lifting an unusual constraint on spending, and the lower interest rates would encourage
further increases in business fixed investment and
housing construction. The continued slack in labor
and product markets, coupled with some tempering
of inflation expectations, was expected to foster
further reductions in wage and price inflation.
In the Committee's discussion of the economic
outlook, members commented that the economic
data and anecdotal reports received since the September meeting had tended to reinforce their earlier
forecasts that moderate economic expansion would
be sustained. After a sluggish performance in the
first half of the year, overall economic activity had
picked up somewhat more in the third quarter than
most members had anticipated, and available indicators of spending and production pointed to relatively robust economic growth in the current quarter. Looking ahead to 1994, the members expected
the expansion to slow somewhat from its apparent
pace over the closing months of this year. Fluctuations in the rate of quarterly GDP growth undoubtedly would occur, but the economy over the year
ahead was thought likely to continue on a trend of
moderate expansion averaging close to the economy's long-run potential or somewhat higher. Most
members saw the probability of a sharp deviation
in either direction from their current forecasts as
relatively remote, though a number also believed
that any deviation was more likely to be in the
direction of somewhat stronger rather than weaker
growth. In general, members expected core inflation to change little or to edge lower next year,
but a few saw some danger of marginally higher
inflation.
In their assessment of developments underlying
the economic outlook, members referred to indications in many areas of some strengthening in business conditions and in related business sentiment,
though economic activity clearly remained sluggish or even depressed in some parts of the country and overall business attitudes could still be
described as cautious. Current financial conditions,
124
Federal Reserve Bulletin • February 1994
including the strength in equity markets, reduced
intermediate- and long-term interest rates, and an
apparently improving availability of business credit
from financial institutions, provided a favorable
backdrop for further economic expansion. Moreover, businesses and households had made substantial progress in improving their financial positions.
These factors were seen as reducing downside risks
to the expansion. At the same time, while there
were signs of significant firming in the economic
expansion, a number of members observed that at
this point they did not see the usual indications of
any near-term intensification of inflationary pressures such as general increases in commodity
prices, lengthening delivery lead times along with
efforts to increase inventories, and strong growth of
credit. Indeed, the risks of an overheated and inflationary expansion in the near term seemed quite
limited in light of various constraints on the economy such as those associated with a restrictive
fiscal policy and the continuing weakness in key
export markets.
With regard to the outlook for specific sectors of
the economy, a step-up in consumer spending,
notably for motor vehicles and housing-related
durable goods, had contributed substantially to the
strengthening of the economic expansion. Indications of improving consumer confidence, reflected
in turn in the growing optimism expressed by business contacts regarding the outlook for holiday
sales, should help to sustain relatively ebullient
consumer spending through the year-end. Contacts
in the motor vehicles industry also appeared to be
relatively optimistic about the prospects for sales of
the new models. The outlook for the consumer
sector also was subject to some constraining influences. Growth in consumer spending had tended to
exceed the expansion in consumer incomes, and a
number of members questioned the extent to which
the acceleration in such spending was likely to
extend into the new year. The saving rate already
was near the low end of its historic range, at least
on the basis of current estimates, and was unlikely
to decline significantly, if at all. Much would
depend on consumers' outlook for employment and
incomes. Growing demands should eventually be
translated into faster employment gains, but at this
point business firms continued to resist adding to
their workforces despite increasing sales and many
firms were still announcing workforce reductions.
While net gains in employment, including growth
associated with increases in self-employment and
new business formations, were continuing, expansion in jobs and consumer incomes probably would
be at a moderate pace over the year ahead. Against
this background, members generally expected moderate growth in consumer spending to be maintained, but they did not see such spending as likely
to give extra impetus to growth in economic activity in 1994.
The members anticipated appreciable further
expansion in business investment spending, especially in the context of reduced interest rates,
improved business balance sheets, and ongoing
efforts to improve productivity. Growth in spending for business equipment probably would continue at a relatively vigorous pace, though perhaps
somewhat below the growth rates experienced in
recent quarters, and other investment activity
seemed poised to pick up. In this connection, several members reported that vacancy rates in commercial office buildings were declining in some
areas and while this development was not yet
being translated into appreciable new construction,
investment funds appeared to be flowing more
freely into commercial real estate. Clear indications of strengthening were observed in housing
construction in many parts of the country and the
outlook for such building activity seemed promising in the context of reduced mortgage rates and
improving consumer sentiment.
Fiscal policy developments, including the effects
on business attitudes of the uncertainties surrounding health care reform legislation, were likely to
continue to inhibit the expansion over the year
ahead. Some members again emphasized the negative effects that the ongoing retrenchment in
defense spending was having on local economies
as well as on the economy more generally. On the
taxation side, the rise in tax liabilities on higher
incomes could have an especially pronounced
effect during the early months of next year, given
the retroactive inclusion of 1993 incomes subject to
the new tax, but some members noted that the
increased tax payments probably had been widely
anticipated and the negative implications for the
economy might well be less than many observers
expected. Nonetheless, the overall posture of fiscal
policy and associated business concerns about the
cost implications of possible future legislation were
Minutes of the Federal Open Market Committee Meeting
likely to be an important factor tending to limit the
strength of the expansion.
Net exports were seen as another constraining
factor in the performance of the economy next
year. On the import side, even moderate expansion
in domestic economic activity was likely to stimulate appreciable further growth in U.S. demands
for foreign goods. At the same time, the prospects
for exports to a number of major industrial countries were not promising, at least for the nearer
term, given lagging economies in Europe and
Japan. In this connection, a number of members
referred to reports of weak export demand for
specific U.S. products and also noted that an
extended coal mining strike had cut supplies of
coal available for export and had induced some
domestic firms to turn to imports to help fill their
requirements. On the other hand, some markets for
U.S. exports, notably those in a number of East
Asian nations and some Latin American countries,
were likely to continue to experience considerable
growth, thereby mitigating an otherwise fairly
gloomy outlook for exports.
With regard to the outlook for inflation over the
year ahead, views did not vary greatly among the
members. They ranged from expectations of some
limited progress toward price stability to forecasts
of a marginal increase in the core rate of inflation.
Members who anticipated a relatively favorable
inflation performance tended to underscore the
likely persistence of appreciable slack in labor and
other production resources on the assumption that
growth in overall economic activity would remain
on a moderate trend in line with their forecasts.
Some also pointed to the absence of inflationary
pressures in most commodity markets, the persistence of intense competition in local markets across
the nation, and the outlook for relatively subdued
increases in labor costs in part because of ongoing
improvements in productivity. Other members gave
more emphasis to the possibility that the economic
expansion next year, especially if it turned out on
the high side of the range encompassing the members' current projections, was more likely to be
associated with some upward pressures on costs
and prices. In this connection, relatively rapid
growth in economic activity, should it persist into
the early part of next year, probably would trigger
attempts to raise prices and wages somewhat more
rapidly even in the context of some continuing
125
slack in overall capacity and labor utilization.
At this point, however, there were no significant
indications of accelerating inflation, and business contacts around the nation did not currently
see or seem to anticipate increasing inflationary
pressures.
In the Committee's discussion of policy for the
intermeeting period ahead, the members generally
agreed that despite various indications of a pickup
in economic growth, the underlying economic
situation and the outlook for inflation had not
changed sufficiently to warrant an adjustment in
monetary policy. Looking beyond the intermeeting
period, however, several members commented that
the Committee might well have to consider the
need to move from the currently stimulative stance
of monetary policy toward a more neutral policy
posture, should concerns about rising inflationary
pressures begin to be realized. The members recognized the desirability of taking early action to arrest
incipient inflationary pressures before they gathered strength, especially given the Committee's
commitment not just to resist greater inflation but
to foster sustained progress toward price stability.
In appropriate circumstances, a prompt policy
move also might allay market concerns about inflation with favorable implications for longer-term
interest rates and the performance of interestsensitive sectors of the economy. The members
acknowledged that current measures of inflation
and anecdotal reports from around the nation did
not on the whole suggest an intensification of inflation at this point. Moreover, the Committee had to
be wary of misleading signals that were inherent in
the saw-tooth pattern of typical economic expansions, and it needed to avoid a policy move that
would incur an unnecessary risk to the expansion,
given uncertainties about the degree to which
recent strength in spending would persist.
Most of the members concluded that on balance
current economic conditions warranted a steady
policy course and, in light of prevailing uncertainties, that it would be premature to anticipate any
particular policy change or its timing. As a consequence, the members also concluded that the currently unbiased instruction in the directive relating
to the direction of possible intermeeting policy
changes should be retained; in any case, significant
changes in the outlook requiring policy action were
viewed as unlikely in the relatively short period
126
Federal Reserve Bulletin • February 1994
until the next scheduled meeting on December 21.
One member expressed the differing view that a
less accommodative policy would be more consistent over time with the Committee's desire to foster
sustained economic expansion and progress toward
price stability. However, this member also felt that
a policy tightening move at this time might be seen
as a response to a stronger economy, rather than an
action that clearly was intended to underscore the
Committee's commitment to price stability and
therefore would elicit a favorable response in
intermediate- and long-term debt markets.
With regard to financial developments bearing
on the economic outlook and the potential need
to adjust monetary policy, members observed that
the broader money and credit aggregates had
strengthened somewhat since earlier in the year,
though to still relatively moderate growth rates.
Moreover, much of the acceleration in M2 and
M3 could be attributed to special or temporary
factors, and according to a staff analysis growth
in these aggregates was likely to revert to relatively slow rates in coming months, assuming
unchanged reserve conditions. At the same time,
growth in Ml and reserves had remained comparatively rapid and in one view such growth might
well be indicative of an overly stimulative monetary policy that would promote more inflation over
time or at least prove inconsistent with further
disinflation.
At the conclusion of the Committee's discussion,
all the members indicated their support of a directive that called for maintaining the existing degree
of pressure on reserve positions and that did not
include a presumption about the likely direction of
any adjustment to policy 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, the Committee decided that slightly
greater or slightly lesser reserve restraint might be
acceptable during the intermeeting period. The
reserve conditions contemplated at this meeting
were expected to be consistent with modest growth
in M2 and M3 over coming months.
At the conclusion of the meeting, the Federal
Reserve Bank of New York was authorized and
directed, until instructed otherwise by the Committee, to execute transactions in the System Account
in accordance with the following domestic policy
directive:
The information reviewed at this meeting suggests
some strengthening in the expansion of economic activity in recent months. Total nonfarm payroll employment
rose appreciably in September and October, while the
civilian unemployment rate edged up to 6.8 percent in
October. Industrial production increased sharply in October, partly reflecting a continuing rebound in the output
of motor vehicles. Retail sales were up substantially in
October after changing little in September. Housing
activity picked up further in the third quarter. The expansion of business capital spending has slowed from a
robust pace earlier in the year. The nominal U.S. merchandise trade deficit in July-August was about
unchanged from its average rate in the second quarter.
Consumer prices have increased moderately on balance
in recent months and producer prices have fallen.
Most interest rates have increased somewhat since
the Committee meeting on September 21. In foreign
exchange markets, the trade-weighted value of the dollar
in terms of the other G-10 currencies appreciated over
the intermeeting period.
Growth of M2 picked up slightly on balance in September and October, while M3 strengthened to a somewhat greater extent over the two months. For the year
through October, M2 and M3 are estimated to have
grown at rates a little above the lower end of the Committee's ranges for the year. Total domestic nonfinancial
debt has expanded at a moderate rate in recent months,
and for the year through August it is estimated to have
increased at a rate in the lower half of the Committee's
monitoring range.
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 in July
lowered the ranges it had established in February for
growth of M2 and M3 to ranges of 1 to 5 percent and
0 to 4 percent respectively, measured from the fourth
quarter of 1992 to the fourth quarter of 1993. The
Committee anticipated that developments contributing to
unusual velocity increases would persist over the balance of the year and that money growth within these
lower ranges would be consistent with its broad policy
objectives. The monitoring range for growth of total
domestic nonfinancial debt also was lowered to 4 to
8 percent for the year. For 1994, the Committee agreed
on tentative ranges for monetary growth, measured from
the fourth quarter of 1993 to the fourth quarter of 1994,
of 1 to 5 percent for M2 and 0 to 4 percent for M3. The
Committee provisionally set the monitoring range for
growth of total domestic nonfinancial debt at 4 to 8 percent for 1994. 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.
Minutes of the Federal Open Market Committee Meeting
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 or
slightly lesser reserve restraint might be acceptable in
the intermeeting period. The contemplated reserve conditions are expected to be consistent with modest growth
in M2 and M3 over coming months.
Votes for this action: Messrs. Greenspan, McDonough, Angell, Boehne, Keehn, Kelley, LaWare, Lindsey, McTeer, Mullins, Ms. Phillips, and Mr. Stern.
Votes against this action: None.
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 21, 1993.
Votes for this action: Messrs. Greenspan, McDonough, Angell, Boehne, Keehn, Kelley, LaWare, Lindsey, McTeer, Mullins, Ms. Phillips, and Mr. Stern.
Votes against this action: None.
RELEASE OF INFORMATION
ABOUT FOMC
MEETINGS
At this meeting the Committee considered a number of alternatives for releasing detailed information on its deliberations at past and future meetings.
Members emphasized that the most important consideration was the preservation of a deliberative
process that would enable the Committee to arrive
at the best possible monetary policy decisions.
Premature release of detailed information, such as
transcripts, would sharply curtail the Committee's
ability to freely discuss evolving economic and
financial trends and alternative policy responses.
Moreover, if full transcripts were subject to release
before many years had passed, much vital information obtained in confidence could not be discussed
in meetings and in any event probably would not
be made available by foreign central banks, business firms, and other sources.
127
The information for all past meetings and many
of the intermeeting telephone consultations was
contained in unedited transcripts that had been
preserved by the FOMC Secretariat since March
1976. Virtually all the tapes from which these
transcripts were typed had been reused to record
subsequent meetings, and very few tapes currently
existed for meetings before September 1993.
In the course of the Committee's discussion,
members observed that the purpose of the transcripts had been to assist the FOMC Secretariat in
the preparation of minutes that reported the economic and monetary policy discussions and were
released after the next meeting. As a result, the
transcripts for past meetings had never been edited
nor had they been checked by meeting participants
for accuracy. It was clear from even a casual
perusal that at times the transcripts failed for various reasons to convey an intelligible account of
members' comments, and on occasion they even
misstated the views that had been expressed. Moreover, most participants at these meetings had not
been aware until recently that the transcripts had
been preserved and that they could at some point
be made public. Their release at this time would
represent a sharp break with past practice and
would raise an issue of fairness to participants at
earlier meetings of the Committee.
The members generally agreed that their reservations about releasing the transcripts could be mitigated through appropriate safeguards such as withholding particularly sensitive materials and
providing for a considerable lapse of time after
Committee meetings. They noted in this connection that, while there was no legal requirement to
prepare transcripts, the substance of existing transcripts needed to be preserved in accordance with
the Federal Records Act. With regard to the manner in which the information might be made public,
the Committee considered several alternatives including making available the unedited transcripts
themselves, or lightly edited versions of the transcripts, or Memoranda of Discussion comparable
to those prepared for meetings before late March
1976. The members expressed varying preferences
among these alternatives. Some proposed that marginal notations be included with raw or edited
transcripts to provide staff explanations or interpretations of unclear or evidently mistranscribed comments. It was understood that preparation of edited
128
Federal Reserve Bulletin • February 1994
transcripts and especially Memoranda of Discussion would require a considerable amount of time
and effort before they would be ready for public
release. A majority favored the release of lightly
edited transcripts that would retain all substantive
comments but would allow for grammatical corrections, the smoothing of some sentences to facilitate
the understanding, and the correction of obvious
transcription errors. The editing would be patterned
after that done for congressional hearings; importantly, no changes would be made in the substance
or the intent of the speakers. Before release to the
public, particularly sensitive materials would be
redacted in accordance with the provisions of the
Freedom of Information Act. The Committee
agreed that the FOMC Secretariat should be given
responsibility for the editing process and that the
Committee itself would not undertake to review
these transcripts. It was noted in this respect that
many former members of the Committee were no
longer available to review their comments and that
in any event the passage of time would make it
impossible for members to recall precisely what
they had said or to verify many of their comments.
Accordingly, the edited transcripts could not be
regarded as official records of the Committee.
With respect to the interval between a meeting
and release of a lightly edited transcript, all of the
Committee members were concerned that the
absence of a substantial lag would seriously harm
the Committee's ongoing deliberative process.
Many also commented that the absence of a substantial lag would be unfair to meeting participants who had been unaware that their remarks
would be released and were unable to review the
transcripts for accuracy. Various members argued
for lags that ranged from three years to ten years or
more, but a majority felt that a five-year lag was
necessary to prevent harm to the Committee's
ongoing deliberations. The other members indicated that afive-yearlag was acceptable because it
represented a reasonable balance among the various
considerations.
At the conclusion of this discussion, the members agreed unanimously to authorize the preparation of lightly edited transcripts of past meetings
and available telephone conferences since late
March 1976 and to release such transcripts to the
public five years after the meetings, subject to the
redaction of especially sensitive materials as authorized by the Freedom of Information Act. It was
understood that the transcripts for the meetings
held during 1988 would be edited on a priority
basis and released as soon as possible. Providing
copies of unedited transcripts for all past meetings
and available conference calls to the Chairman or
staff of the House Banking Committee in response
to a request was not approved by the Committee.
The members reviewed various options for the
release of information about the Committee's deliberations at future meetings. These options included
continuing the preparation of the minutes in their
current form, which members regarded as providing a complete account of the substance of the
Committee's deliberations. Some urged that consideration be given to supplementing the minutes
with the prompt release after each meeting of information about Committee decisions. Among other
options considered were an expanded version of
the current minutes and the release, after an appropriate lag, of a lightly edited transcript or a Memorandum of Discussion for each meeting. The members concluded that the complexity of the issues
reflected in these alternatives warranted further
review by the Committee and accordingly a decision was deferred. It was agreed that the Committee would continue its discussion of these issues at
a special meeting during December.
•
129
Legal Developments
FINAL RULE—AMENDMENT
TO REGULATION
A
The Board of Governors is amending 12 C.F.R. Part
201, its Regulation A (Extensions of Credit by Federal
Reserve Banks) to implement section 142 of the Federal Deposit Insurance Corporation Improvement Act
of 1991 ("FDICIA"), which amends section 10B of the
Federal Reserve Act ("FRA") in order to discourage
advances, under that section, to undercapitalized and
critically undercapitalized depository institutions.
Effective January 30, 1994, 12 C.F.R. Part 201 is
amended as follows:
Part 201—Extensions of Credit by Federal
Reserve Banks (Regulation A)
1. The authority citation for part 201 is revised to read
as follows:
Authority: 12 U.S.C. 343 et seq. 347a, 347b, 347c,
347d, 348 et seq. 374, 374a and 461.
2. Sections 201.1 through 201.6 are revised and sections 201.7 through 201.9 are added to read as follows:
Section 201.1—Authority, scope and purpose.
(a) Authority and scope. This part is issued under the
authority of sections 10A, 10B, 13, 13A, and 19 of the
FRA (12 U.S.C. 347a, 347b, 343 et seq. 347c, 348
et seq. 374, 374a, and 461), other provisions of the
FRA, and section 7(b) of the International Banking
Act of 1978 (12 U.S.C. 347d) and relates to extensions
of credit by Federal Reserve Banks to depository
institutions and others.
(b) Purpose. This part establishes rules under which
Federal Reserve Banks may extend credit to depository institutions and others. Extending credit to depository institutions to accommodate commerce, industry, and agriculture is a principal function of
Federal Reserve Banks. While open market operations
are the primary means of affecting the overall supply
of reserves, the lending function of the Federal Reserve Banks is an effective method of supplying reserves to meet the particular credit needs of individual
depository institutions. The lending functions of the
Federal Reserve System are conducted with due re-
gard to the basic objectives of monetary policy and the
maintenance of a sound and orderly financial system.
Section 201.2—Definitions.
For purposes of this part, the following definitions
shall apply:
(a) Appropriate Federal banking agency has the same
meaning as in section 3 of the FDI Act (12 U.S.C.
1813(q)).
(b) Critically undercapitalized insured depository institution means any insured depository institution as
defined in section 3 of the FDI Act (12 U.S.C.
1813(c)(2)) that is deemed to be critically undercapitalized under section 38 of the FDI Act (12 U.S.C.
18310(b)(1)(E)) and the implementing regulations.
(c) (1) Depository institution means an institution that
maintains reservable transaction accounts or nonpersonal time deposits and is:
(i) An insured bank as defined in section 3 of the
FDI Act (12 U.S.C. 1813(h)) or a bank which is
eligible to make application to become an insured
bank under section 5 of such Act (12 U.S.C.
1815);
(ii) A mutual savings bank as defined in section 3
of the FDI Act (12 U.S.C. 1813(f)) or a bank
which is eligible to make application to become an
insured bank under section 5 of such Act
(12 U.S.C. 1815);
(iii) A savings bank as defined in section 3 of the
FDI Act (12 U.S.C. 1813(g)) or a bank which is
eligible to make application to become an insured
bank under section 5 of such Act (12 U.S.C.
1815);
(iv) An insured credit union as defined in section
101 of the Federal Credit Union Act (12 U.S.C.
1752(7)) or a credit union which is eligible to make
application to become an insured credit union
pursuant to section 201 of such Act (12 U.S.C.
1781);
(v) A member as defined in section 2 of the
Federal Home Loan Bank Act (12 U.S.C.
1422(4)); or
(vi) A savings association as defined in section 3
of the FDI Act (12 U.S.C. 1813(b)) which is an
insured depository institution as defined in section
3 of the Act (12 U.S.C. 1813(c)(2)) or is eligible to
130 Federal Reserve Bulletin • February 1994
apply to become an insured depository institution
under section 5 of the Act (12 U.S.C. 1815(a)).
(2) The term depository institution does not include
a financial institution that is not required to maintain
reserves under Regulation D (12 CFR Part 204)
because it is organized solely to do business with
other financial institutions, is owned primarily by
the financial institutions with which it does business,
and does not do business with the general public.
(d) Liquidation loss means the loss that any deposit
insurance fund in the FDIC would have incurred if the
FDIC had liquidated the institution:
(1) In the case of an undercapitalized insured depository institution, as of the end of the later of:
(i) Sixty days:
(A) In any 120-day period;
(B) During which the institution was an undercapitalized insured depository institution; and
(C) During which advances or discounts were
outstanding to the depository institution from
any Federal Reserve Bank; or
(ii) The 60 calendar day period following the
receipt by a Federal Reserve Bank of a written
certification from the Chairman of the Board of
Governors or the head of the appropriate Federal
banking agency that the institution is viable.
(2) In the case of a critically undercapitalized insured depository institution, as of the end of the
5-day period beginning on the date the institution
became a critically undercapitalized insured depository institution.
(e) Increased loss means the amount of loss to any
deposit insurance fund in the FDIC that exceeds the
liquidation loss due to:
(1) An advance under section 10B(l)(a) of the FRA
that is outstanding to an undercapitalized or critically undercapitalized insured depository institution
without payment having been demanded as of the
end of the periods specified in paragraphs (d)(1) and
(2) of this section; or
(2) An advance under section 10B(l)(a) of the Federal Reserve Act that is made after the end of such
periods.
(f) Excess loss means the lesser of the increased loss or
that portion of the increased loss equal to the lesser of:
(1) The loss the Board of Governors or any Federal
Reserve Bank would have incurred on the amount
by which advances under section 10B(l)(a) exceed
the amount of advances outstanding at the end of the
periods specified in paragraphs (d)(1) and (2) of this
section if those increased advances had been unsecured; or
(2) The interest received on the amount by which the
advances under section 10B(l)(a) exceed the
amount of advances outstanding, if any, at the end
of the periods specified in paragraphs (d)(1) and (2)
of this section.
(g) Transaction account and nonpersonal time deposit
have the meanings specified in Regulation D (12
C.F.R. Part 204).
(h) Undercapitalized insured depository institution
means any insured depository institution as defined in
section 3 of the FDI Act (12 U.S.C. 1813(c)(2)) that:
(1) Is not a critically undercapitalized insured depository institution; and
(2) (i) Is deemed to be undercapitalized under
section 38 of the FDI Act (12 U.S.C.
18310(b)(1)(C)) and the implementing regulations;
or
(ii) Has received from its appropriate Federal
banking agency a composite CAMEL rating of 5
under the Uniform Financial Institutions Rating
System (or an equivalent rating by its appropriate
Federal banking agency under a comparable rating system) as of the most recent examination of
such institution.
(i) Viable, with respect to a depository institution,
means that the Board of Governors or the appropriate Federal banking agency has determined,
giving due regard to the economic conditions and
circumstances in the market in which the institution operates, that the institution is not critically
undercapitalized, is not expected to become critically undercapitalized, and is not expected to be
placed in conservatorship or receivership. Although there are a number of criteria that may be
used to determine viability, the Board of Governors believes that ordinarily an undercapitalized
insured depository institution is viable if the appropriate Federal banking agency has accepted a
capital restoration plan for the depository institution under 12 U.S.C. 1831o(e)(2) and the depository institution is complying with that plan.
Section 201.3—Availability and terms.
(a) Adjustment credit. Federal Reserve Banks extend
adjustment credit on a short-term basis to depository
institutions to assist in meeting temporary requirements for funds or to cushion more persistent shortfalls of funds pending an orderly adjustment of a
borrowing institution's assets and liabilities. Such
credit generally is available only for appropriate purposes and after reasonable alternative sources of funds
have been fully used, including credit from special
industry lenders such as Federal Home Loan Banks,
the National Credit Union Administration's Central
Liquidity Facility, and corporate central credit unions.
Adjustment credit is usually granted at the basic
discount rate, but under certain circumstances a spe-
Legal Developments
cial rate or rates above the basic discount rate may be
applied.
(b) Seasonal credit. Federal Reserve Banks extend
seasonal credit for periods longer than those permitted
under adjustment credit to assist smaller depository
institutions in meeting regular needs for funds arising
from expected patterns of movement in their deposits
and loans. A special rate or rates at or above the basic
discount rate may be applied to seasonal credit.
(1) Seasonal credit is only available if:
(i) The depository institution's seasonal needs
exceed a threshold that the institution is expected
to meet from other sources of liquidity (this
threshold is calculated as certain percentages,
established by the Board of Governors, of the
institution's average total deposits in the preceding calendar year);
(ii) The Federal Reserve Bank is satisfied that the
institution's qualifying need for funds is seasonal
and will persist for at least four weeks; and
(iii) Similar assistance is not available from special
industry lenders.
(2) The Board may establish special terms for seasonal credit when depository institutions are experiencing unusual seasonal demands for credit in a
period of liquidity strain.
(c) Extended credit. Federal Reserve Banks extend
credit to depository institutions under extended credit
arrangements where similar assistance is not reasonably available from other sources, including special
industry lenders. Such credit may be provided where
there are exceptional circumstances or practices affecting a particular depository institution including
sustained deposit drains, impaired access to money
market funds, or sudden deterioration in loan repayment performance. Extended credit may also be provided to accommodate the needs of depository institutions, including those with longer term asset
portfolios, that may be experiencing difficulties adjusting to changing money market conditions over a longer
period, particularly at times of deposit disintermediation. A special rate or rates above the basic discount
rate may be applied to extended credit.
(d) Emergency credit for others. In unusual and exigent circumstances, a Federal Reserve Bank may,
after consultation with the Board of Governors, advance credit to individuals, partnerships, and corporations that are not depository institutions if, in the
judgment of the Federal Reserve Bank, credit is not
available from other sources and failure to obtain such
credit would adversely affect the economy. The rate
applicable to such credit will be above the highest rate
in effect for advances to depository institutions.
Where the collateral used to secure such credit consists of assets other than obligations of, or fully
131
guaranteed as to principal and interest by, the United
States or an agency thereof, an affirmative vote of five
or more members of the Board of Governors is required before credit may be extended.
Section 201.4—Limitations on availability and
assessments.
(a) Advances to or discounts for undercapitalized
insured depository institutions. A Federal Reserve
Bank may make or have outstanding advances to or
discounts for a depository institution that it knows to
be an undercapitalized insured depository institution,
only:
(1) If, in any 120-day period, advances or discounts
from any Federal Reserve Bank to that depository
institution are not outstanding for more than 60 days
during which the institution is an undercapitalized
insured depository institution; or
(2) During the 60 calendar days after the receipt of a
written certification from the Chairman of the Board
of Governors or the head of the appropriate Federal
banking agency that the borrowing depository institution is viable; or
(3) After consultation with the Board of Governors.1
(b) Advances to or discounts for critically undercapitalized insured depository institutions. A Federal Reserve Bank may make or have outstanding advances to
or discounts for a depository institution that it knows
to be a critically undercapitalized insured depository
institution only:
(1) During the 5-day period beginning on the date the
institution became a critically undercapitalized insured depository institution; or
(2) After consultation with the Board of Governors.2
(c) Assessments. The Board of Governors will assess
the Federal Reserve Banks for any amount that it pays
to the FDIC due to any excess loss. Each Federal
Reserve Bank shall be assessed that portion of the
amount that the Board of Governors pays to the FDIC
that is attributable to an extension of credit by that
Federal Reserve Bank, up to one percent of its capital
as reported at the beginning of the calendar year in
which the assessment is made. The Board of Governors will assess all of the Federal Reserve Banks for
the remainder of the amount it pays to the FDIC in the
ratio that the capital of each Federal Reserve Bank
bears to the total capital of all Federal Reserve Banks
at the beginning of the calendar year in which the
1. In unusual circumstances, when prior consultation with the
Board is not possible, a Federal Reserve Bank should consult with the
Board as soon as possible after extending credit that requires consultation under this paragraph.
2. See footnote 1 in section 201.4(a)(3).
132 Federal Reserve Bulletin • February 1994
assessment is made, provided, however, that if any
assessment exceeds 50 percent of the total capital and
surplus of all Federal Reserve Banks, whether to
distribute the excess over such 50 percent shall be
made at the discretion of the Board of Governors,
(d) Information. Before extending credit a Federal
Reserve Bank should ascertain if an institution is an
undercapitalized insured depository institution or a
critically undercapitalized insured depository institution.
Section 201.5—Advances and discounts.
(a) Federal Reserve Banks may lend to depository
institutions either through advances secured by acceptable collateral or through the discount of certain
types of paper. Credit extended by the Federal Reserve Banks generally takes the form of an advance.
(b) Federal Reserve Banks may make advances to any
depository institution if secured to the satisfaction of
the Federal Reserve Bank. Satisfactory collateral generally includes United States government and Federal
agency securities, and, if of acceptable quality, mortgage notes covering 1-4 family residences, State and
local government securities, and business, consumer
and other customer notes.
(c) If a Federal Reserve Bank concludes that a depository institution will be better accommodated by the
discount of paper than by an advance, it may discount
any paper endorsed by the depository institution that
meets the requirements specified in the FRA.
Section 201.6—General requirements.
(a) Credit for capital purposes. Federal Reserve credit
is not a substitute for capital.
(b) Compliance with law and regulation. All credit
extended under this part shall comply with applicable
requirements of law and of this part. Each Federal
Reserve Bank:
(1) Shall keep itself informed of the general character and amount of the loans and investments of
depository institutions with a view to ascertaining
whether undue use is being made of depository
institution credit for the speculative carrying of or
trading in securities, real estate, or commodities, or
for any other purpose inconsistent with the maintenance of sound credit conditions; and
(2) Shall consider such information in determining
whether to extend credit.
(c) Information. A Federal Reserve Bank shall require
any information it believes appropriate or desirable to
insure that paper tendered as collateral for advances or
for discount is acceptable and that the credit provided
is used in a manner consistent with this part.
(d) Indirect credit for others. No depository institution
shall act as the medium or agent of another depository
institution in receiving Federal Reserve credit except
with the permission of the Federal Reserve Bank
extending credit.
Section 201.7—Branches and agencies.
(a) Except as may be otherwise provided, this part
shall be applicable to United States branches and
agencies of foreign banks subject to reserve requirements under Regulation D (12 C.F.R. Part 204) in the
same manner and to the same extent as depository
institutions.
Section 201.8—Federal Intermediate Credit
Banks.
(a) A Federal Reserve Bank may discount for any
Federal Intermediate Credit Bank agricultural paper or
notes payable to and bearing the endorsement of the
Federal Intermediate Credit Bank that cover loans or
advances made under subsections (a) and (b) of section 2.3 of the Farm Credit Act of 1971 (12 U.S.C.
2074) and that are secured by paper eligible for discount by Federal Reserve Banks. Any paper so discounted shall have a period remaining to maturity at
the time of discount of not more than nine months.
Section 201.9—No obligation to make advances
or discounts.
(a) A Federal Reserve Bank shall have no obligation to
make, increase, renew, or extend any advance or
discount to any depository institution.
3. In sections 201.108 and 201.109, footnotes 1, la, 2,
and 3 are redesignated as footnotes 3, 4, 5, and 6,
respectively.
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; Capital
Adequacy Guidelines). The Board is amending its
risk-based capital guidelines for state member banks
and bank holding companies. This final rule implements section 618(b) of the Resolution Trust Corporation Refinancing, Restructuring, and Improvement Act
of 1991 and section 305(b)(1)(B) of the Federal Deposit
Insurance Corporation Improvement Act of 1991. The
effect of the final rule will be to permit state member
Legal Developments
banks and bank holding companies to lower from 100
percent to 50 percent the risk weight assigned to
certain multifamily housing loans.
Effective December 31, 1993, 12 C.F.R. Parts 208
and 225 are amended as follows:
Part 208—Membership of State Banking
Institutions in the Federal Reserve System
(Regulation H)
1. The authority citation for part 208 continues to read
as follows:
Authority: 12 U.S.C. 36, 248(a) and (c), 321-338, 461,
481-486, 601, 611, 1814, 18230), 1831o, 1831p-l, 39063909, 3310, 3331-3351; 15 U.S.C. 78b, 78o-4(c)(5), 78q,
78q-l, 78w, 781(b), 781(i), and 1781(g).
2. Appendix A to part 208 is amended by revising the
first paragraph of section III.C.3., and Category 3
Item 1. of Attachment III to read as follows:
Appendix A to Part 208—[Amended]
III. Procedures for Computing Weighted Risk
Assets and Off-Balance Sheet Items
C. Risk Weights
3. Category 3:50 percent. This category includes loans
fully secured by first liens34 on 1- to 4-family residential properties, either owner-occupied or rented, or on
multifamily residential properties,35 that meet certain
34. If a bank holds the first and junior liens(s) on a residential
property and no other party holds an intervening lien, the transaction
is treated as a single loan secured by a first lien for the purpose of
determining the loan-to-value ratio.
35. Loans that qualify as loans secured by 1- to 4-family residential
properties or multifamily residential properties are listed in the
instructions to the commercial bank Call Report. In addition, for
risk-based capital purposes, loans secured by 1- to 4-family residential
properties include loans to builders with substantial project equity for
the construction of 1- to 4-family residences that have been presold
under firm contracts to purchasers who have obtained firm commitments for permanent qualifying mortgage loans and have made
substantial earnest money deposits.
The instructions to the Call Report also discuss the treatment of
loans, including multifamily housing loans, that are sold subject to a
pro rata loss sharing arrangement. Such an arrangement should be
treated by the selling bank as sold (and excluded from balance sheet
assets) to the extent that the sales agreement provides for the
purchaser of the loan to share in any loss incurred on the loan on a pro
rata basis with the selling bank. In such a transaction, from the
standpoint of the selling bank, the portion of the loan that is treated as
sold is not subject to the risk-based capital standards. In connection
133
criteria.36 Loans included in this category must have
been made in accordance with prudent underwriting
standards;37 be performing in accordance with their
original terms; and not be 90 days or more past due or
carried in nonaccrual status. The following additional
criteria must also be applied to a loan secured by a
multifamily residential property that is included in this
category: all principal and interest payments on the
loan must have been made on time for at least the year
preceding placement in this category, or in the case
where the existing property owner is refinancing a loan
on that property, all principal and interest payments
on the loan being refinanced must have been made on
time for at least the year preceding placement in this
category; amortization of the principal and interest
must occur over a period of not more than 30 years and
the minimum original maturity for repayment of principal must not be less than 7 years; and the annual net
operating income (before debt service) generated by
the property during its most recent fiscal year must not
be less than 120 percent of the loan's current annual
debt service (115 percent if the loan is based on a
floating interest rate) or, in the case of a cooperative or
other not-for-profit housing project, the property must
generate sufficient cash flow to provide comparable
protection to the institution. Also included in this
category are privately-issued mortgage-backed securities provided that:
(1) The structure of the security meets the criteria
described in section 111(B)(3) above;
(2) If the security is backed by a pool of conventional mortgages, on 1- to 4-family residential or
multifamily residential properties, each underlying
mortgage meets the criteria described above in this
with sales of multifamily housing loans in which the purchaser of a
loan shares in any loss incurred on the loan with the selling institution
on other than a pro rata basis, these other loss sharing arrangements
are taken into account for purposes of determining the extent to which
such loans are treated by the selling bank as sold (and excluded from
balance sheet assets) under the risk-based capital framework in the
same manner as prescribed for reporting purposes in the instructions
to the Call Report.
36. Residential property loans that do not meet all the specified
criteria or that are made for the purpose of speculative property
development are placed in the 100 percent risk category.
37. Prudent underwriting standards include a conservative ratio of
the current loan balance to the value of the property. In the case of a
loan secured by multifamily residential property, the loan-to-value
ratio is not conservative if it exceeds 80 percent (75 percent if the loan
is based on a floating interest rate). Prudent underwriting standards
also dictate that a loan-to-value ratio used in the case of originating a
loan to acquire a property would not be deemed conservative unless
the value is based on the lower of the acquisition cost of the property
or appraised (or if appropriate, evaluated) value. Otherwise, the
loan-to-value ratio generally would be based upon the value of the
property as determined by the most current appraisal, or if appropriate, the most current evaluation. All appraisals must be made in a
manner consistent with the Federal banking agencies' real estate
appraisal regulations and guidelines and with the bank's own appraisal
guidelines.
134 Federal Reserve Bulletin • February 1994
section for eligibility for the 50 percent risk category
at the time the pool is originated;
(3) If the security is backed by privately-issued
mortgage-backed securities, each underlying security qualifies for the 50 percent risk category; and
(4) If the security is backed by a pool of multifamily
residential mortgages, principal and interest payments on the security are not 30 days or more past
due.
Privately-issued mortgage-backed securities that do
not meet these criteria or that do not qualify for a
lower risk weight are generally assigned to the
100 percent risk category.
Attachment III—Summary of Risk Weights and
Risk Categories for State Member Banks
Category 3: 50 Percent
1. Loans fully secured by first liens on 1- to 4-family
residential properties or on multifamily residential
properties that have been made in accordance with
prudent underwriting standards, that are performing in
accordance with their original terms, that are not past
due or in nonaccrual status, and that meet other
qualifying criteria, and certain privately-issued mortgage-backed securities representing indirect ownership of such loans. (Loans made for speculative purposes are excluded.)
Part 225—Bank Holding Companies and
Change in Bank Control (Regulation Y)
1. The authority citation for part 225 continues to read
as follows:
Authority: 12 U.S.C. 1817(j)(13), 1818, 1831i, 1831p-l,
1843(c)(8), 1844(b), 1972(1), 3106, 3108, 3907, 3909,
3310, and 3331-3351.
2. Appendix A to part 225 is amended by revising the
first paragraph of section III.C.3., footnote 48 in
section III.D.l., and Category 3 Item 1. of Attachment
III to read as follows:
Appendix A to Part 225—[Amended]
III. Procedures for Computing Weighted Risk
Assets and Off-Balance Sheet Items
C. Risk Weights
3. Category 3:50 percent. This category includes loans
fully secured by first liens37 on 1- to 4-family residential properties, either owner-occupied or rented, or on
multifamily residential properties,38 that meet certain
criteria.39 Loans included in this category must have
been made in accordance with prudent underwriting
standards;40 be performing in accordance with their
original terms; and not be 90 days or more past due or
carried in nonaccrual status. The following additional
criteria must also be applied to a loan secured by a
multifamily residential property that is included in this
category: all principal and interest payments on the
loan must have been made on time for at least the year
preceding placement in this category, or in the case
where the existing property owner is refinancing a loan
on that property, all principal and interest payments
on the loan being refinanced must have been made on
time for at least the year preceding placement in this
category; amortization of the principal and interest
must occur over a period of not more than 30 years and
the minimum original maturity for repayment of principal must not be less than 7 years; and the annual net
operating income (before debt service) generated by
37. If a banking organization holds the first and junior lien(s) on a
residential property and no other party holds an intervening lien, the
transaction is treated as a single loan secured by a first lien for the
purpose of determining the loan-to-value ratio.
38. Loans that qualify as loans secured by 1- to 4-family residential
properties or multifamily residential properties are listed in the
instructions to the FR Y-9C Report. In addition, for risk-based capital
purposes, loans secured by 1- to 4-family residential properties
include loans to builders with substantial project equity for the
construction of 1- to 4-family residences that have been presold under
firm contracts to purchasers who have obtained firm commitments for
permanent qualifying mortgage loans and have made substantial
earnest money deposits.
39. Residential property loans that do not meet all the specified
criteria or that are made for the purpose of speculative property
development are placed in the 100 percent risk category.
40. Prudent underwriting standards include a conservative ratio of
the current loan balance to the value of the property. In the case of a
loan secured by multifamily residential property, the loan-to-value
ratio is not conservative if it exceeds 80 percent (75 percent if the loan
is based on a floating interest rate). Prudent underwriting standards
also dictate that a loan-to-value ratio used in the case of originating a
loan to acquire a property would not be deemed conservative unless
the value is based on the lower of the acquisition cost of the property
or appraised (or if appropriate, evaluated) value. Otherwise, the
loan-to-value ratio generally would be based upon the value of the
property as determined by the most current appraisal, or if appropriate, the most current evaluation. All appraisals must be made in a
manner consistent with the Federal banking agencies' real estate
appraisal regulations and guidelines and with the banking organization's own appraisal guidelines.
Legal Developments
the property during its most recent fiscal year must not
be less than 120 percent of the loan's current annual
debt service (115 percent if the loan is based on a
floating interest rate) or, in the case of a cooperative or
other not-for-profit housing project, the property must
generate sufficient cash flow to provide comparable
protection to the institution. Also included in this
category are privately-issued mortgage-backed securities provided that:
(1) The structure of the security meets the criteria
described in section 111(B)(3) above;
(2) If the security is backed by a pool of conventional mortgages, on 1-to 4-family residential or
multifamily residential properties, each underlying
mortgage meets the criteria described above in this
section for eligibility for the 50 percent risk category
at the time the pool is originated;
(3) If the security is backed by privately-issued
mortgage-backed securities, each underlying security qualifies for the 50 percent risk category ; and
(4) If the security is backed by a pool of multifamily
residential mortgages, principal and interest payments on the security are not 30 days or more past
due.
Privately-issued mortgage-backed securities that do
not meet these criteria or that do not qualify for
a lower risk weight are generally assigned to the
100 percent risk category.
135
Attachment III—Summary of Risk Weights and
Risk Categories for Bank Holding Companies
Category 3: 50 Percent
1. Loans fully secured by first liens on 1 - t o 4-family
residential properties or on multifamily residential
properties that have been made in accordance with
prudent underwriting standards, that are performing in
accordance with their original terms, that are not past
due or in nonaccrual status, and that meet other
qualifying criteria, and certain privately-issued mortgage-backed securities representing indirect ownership of such loans. (Loans made for speculative purposes are excluded.)
FINAL RULE—AMENDMENT
TO RULES
REGARDING DELEGATION OF AUTHORITY
The Board of Governors is amending 12 C.F.R. Part
265, its Rules Regarding Delegation of Authority, for
determining inconsistencies between state and federal
laws to authorize the Director of the Division of
Consumer and Community Affairs to make such determinations for the Truth in Savings Act and Regulation DD.
Effective December 3, 1993, 12 C.F.R. Part 265 is
amended as follows:
D. Off-Balance Sheet Items
J
*
*
*48
Part 265—Rules Regarding Delegation of
Authority
1. The authority citation for Part 265 continues to read
as follows:
48. In regulatory reports and under GAAP, bank holding companies
are permitted to treat some asset sales with recourse as "true" sales.
For risk-based capital purposes, however, such assets sold with
recourse and reported as " t r u e " sales by bank holding companies are
converted at 100 percent and assigned to the risk category appropriate
to the underlying obligor or, if relevant the guarantor or nature of the
collateral, provided that the transactions meet the definition of assets
sold with recourse (including assets sold subject to pro rata and other
loss sharing arrangements), that is contained in the instructions to the
commercial bank Consolidated Reports of Condition and Income (Call
Report). This treatment applies to any assets, including the sale of
1 - t o 4-family and multifamily residential mortgages, sold with recourse. Accordingly, the entire amount of any assets transferred with
recourse that are not already included on the balance sheet, including
pools of 1- to 4-family residential mortgages, are to be converted at 100
percent and assigned to the risk category appropriate to the obligor, or
if relevant, the nature of any collateral or guarantees. The only
exception involves transfers of pools of residential mortgages that
have been made with insignificant recourse for which a liability or
specific non-capital reserve has been established and is maintained for
the maximum amount of possible loss under the recourse provision.
Authority: 12 U.S.C. 248(i) and (k).
2. Section 265.9 is amended by adding a new paragraph (c)(5) to read as follows:
Section 265.9—Functions delegated to the
Director of the Division of Consumer and
Community Affairs.
(5) Section 273 of the Truth in Savings Act
(12 U.S.C. 4312) and Regulation DD (12 C.F.R.
Part 230).
136 Federal Reserve Bulletin • February 1994
ORDERS ISSUED UNDER BANK
COMPANY ACT
HOLDING
Orders Issued Under Section 3 of the Bank
Holding Company Act
Credit International Bancshares, LTD.
Washington, D.C.
Order Approving the Acquisition of a Bank
Credit International Bancshares, LTD., Washington,
D.C. ("CIB"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC
Act"), has applied under section 3 of the BHC Act
(12 U.S.C. § 1842) to acquire all the voting shares of
Sequoia National Bank, Bethesda, Maryland ("Sequoia Bank"). 1 Sequoia Bank will be formed as successor to Sequoia Federal Savings Bank, Bethesda,
Maryland ("Sequoia Savings") by merger with Sequoia Bank pursuant to section 5(d)(2)(G) of the
Federal
Deposit
Insurance
Act
(12 U.S.C.
§ 1815(d)(2)(G)).2
Notice of the proposal, affording interested persons
an opportunity to submit comments, has been published (58 Federal Register 49,514 and 49,515 (1993)).
The time for filing comments has expired, and the
Board has considered the proposal and all comments
received in light of the factors set forth in section 3(c)
of the BHC Act.
CIB, with total consolidated assets of $51.1 million,
is the 15th largest commercial banking organization in
the District of Columbia, controlling approximately
$44.2 million in deposits, representing less than 1 percent of total deposits in commercial banking organiza-
1. In connection with the acquisition, SBI Voting Trust ("Trust"),
a voting trust formed for the purpose of preserving certain tax
benefits, has also filed notice pursuant to the Change in Bank Control
Act ("CIBC Act") (12 U.S.C. § 1817(j)) to acquire up to 52 percent of
the voting shares of CIB and thereby indirectly acquire Federal
Capital Bank, N.A., Washington, D.C. ("Federal Capital"), a wholly
owned subsidiary bank of CIB, and Sequoia Bank. Trust relates to the
shares of a single bank holding company, terminates within 25 years,
engages in no other activity except to hold and vote the shares of CIB
held in trust, and involves parties who are not participants in any
similar voting trust or related agreement with respect to any other
bank or nonbank business. See 1 F.R.R.S. 4-185.5. Accordingly,
Trust would not be considered a "company" within the meaning of
section 2(b) of the BHC Act. Based on all the facts of record, the
Board does not intend to disapprove the notice under the CIBC Act.
2. This provision of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 permits a savings association to convert
to a bank charter provided the resulting bank remains a Savings
Association Insurance Fund member. The Office of Thrift Supervision
has approved this conversion subject to other regulatory approval.
The Office of the Comptroller of the Currency has not yet acted on the
application. The Board's action in this case is conditioned on the
relevant companies' obtaining all necessary regulatory approvals for
this transaction.
tions in the District of Columbia.3 Sequoia Savings,
with assets of $95.3 million, is the 35th largest thrift
organization in Maryland, controlling approximately
$89 million in deposits, representing less than 1 percent of total deposits in thrift organizations in Maryland. Upon consummation of the proposal, CIB would
become the 43d largest commercial banking organization in Maryland, controlling approximately $89 million in deposits, representing less than 1 percent of the
total deposits in commercial banks in Maryland.
Douglas Amendment
Analysis
Section 3(d) of the BHC Act ("Douglas Amendment")
prohibits a bank holding company from acquiring a
bank outside of its home state 4 "unless the acquisition
of . . . a State bank by an out-of-State bank holding
company 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." 5 For
purposes of the Douglas Amendment, the home state
of CIB is the District of Columbia, and the home state
of Sequoia Savings is Maryland. The Board has previously determined that the interstate statutes of
Maryland and the District of Columbia permit acquisitions of institutions located in the respective states. 6
Based on the foregoing and the other facts of record,
the Board has determined that approval of this proposal is not prohibited by the Douglas Amendment. 7
Competitive
Considerations
CIB and Sequoia Savings compete directly in the
Washington, D.C., banking market.8 Upon consummation of this proposal, CIB would become the 61st
largest depository institution in the market, controlling
deposits of $64.4 million, representing less than 1 percent of total deposits in depository institutions in the
3. Asset and deposit data are as of September 30, 1993.
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. The
operations of a bank holding company are considered principally
conducted in that state in which the total deposits of such banking
subsidiaries are largest.
5. 12 U.S.C. § 1842(d).
6. See James Madison, Ltd., 73 Federal Reserve Bulletin 129(1987);
Maryland National Corporation, 73 Federal Reserve Bulletin 310
(1987).
7. See Md. Code Ann. Fin. Inst. § 5-1001 et seq.; D.C. Code Ann.
§ 26-801 et seq. The Maryland Bank Commissioner has indicated that
CIB's proposed acquisition is permitted by the relevant state banking
statute.
8. The Washington, D.C., banking market is defined as the Washington, D.C., Ranally Metropolitan Area, which is composed of the
District of Columbia and the surrounding suburban areas of Maryland
and Virginia.
Legal Developments
market.9 After considering the number of competitors
that would remain in the market and the relatively
small increase in concentration as measured by the
Herfindahl-Hirschman Index ("HHI"), 10 the Board
concludes that consummation of this proposal would
not result in a significantly adverse effect on competition in the Washington, D.C., banking market or any
other relevant banking market.
Based on all the facts of record, including all the
representations and commitments made in connection
with this proposal, the Board concludes that financial
and managerial resources and future prospects of CIB,
its subsidiaries and Sequoia Savings and the other
supervisory factors that the Board must consider
under section 3 of the BHC Act are consistent with
approval of this proposal. Considerations relating to
the convenience and needs of the communities to be
served are also consistent with approval.
Conclusion
Based upon the foregoing and all the facts of record,
including the commitments made in connection with
this proposal, the Board has determined that the
application should be, and hereby is, approved. The
Board's approval is specifically conditioned upon
compliance with all of the commitments made in
connection with this proposal, and upon receipt of all
required state and federal approvals. For the purpose
of this action, the commitments and conditions relied
upon by the Board in reaching its decision are deemed
to be conditions imposed in writing by the Board in
connection with its findings and decision, and, as such,
may be enforced in proceedings under applicable law.
9. When used in this context, depository institutions include commercial banks and savings associations. Market data are as of June 30,
1992. 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).
Because the deposits of Sequoia Savings will be transferred to a
commercial bank under the proposal, those deposits are included at
100 percent in the calculation of pro forma market share. See First
Banks, Inc., 76 Federal Reserve Bulletin 669, 670 n.9 (1990); Norwest
Corporation, 78 Federal Reserve Bulletin 452 (1992).
10. The HHI for the market is currently 933 and consummation of
the proposed transaction would not increase the HHI for this market.
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 less than 1000 is considered unconcentrated. The
Justice Department has informed the Board that a bank merger or
acquisition generally will not be challenged (in the absence of other
factors indicating anti-competitive effects) unless the post-merger
HHI is at least 1800 and the merger increases the HHI by 200 points.
The Justice Department has stated that the higher than normal HHI
thresholds for screening bank mergers for anti-competitive effects
implicitly recognize the competitive effect of limited-purpose lenders
and other non-depository financial entities.
137
The acquisition shall not be consummated before
the thirtieth calendar day following the effective date
of this order, or later than three months after the
effective date of this order, unless such period is
extended for good cause by the Board or by the
Federal Reserve Bank of Richmond, acting pursuant
to delegated authority.
By order of the Board of Governors, effective
December 20, 1993.
Voting for this action: Chairman Greenspan, Vice Chairman Mullins, and Governors Angell, Kelley, LaWare, Lindsey, and Phillips.
JENNIFER J . JOHNSON
Associate Secretary of the Board
One Valley Bancorp of West Virginia, Inc.
Charleston, West Virginia
Order Approving the Merger of Bank Holding
Companies
One Valley Bancorp of West Virginia, Inc., Charleston, West Virginia ("One Valley"), 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 merge with Mountaineer Bankshares of W. Va., Inc., Martinsburg ("Mountaineer"),
and thereby indirectly acquire Old National Bank,
Martinsburg; The Empire National Bank of Clarksburg, Clarksburg; City National Bank of Fairmont,
Fairmont; The Bank of Wadestown, Fairview; Mercantile Banking & Trust Company, Moundsville; and
The Bank of Cameron, Inc., Cameron, all in West
Virginia. One Valley also proposes to acquire Mountaineer's subsidiary bank holding company, Sunrise
Bancorp, Inc., Wheeling, and thereby indirectly acquire The Sunshine Bank of Wheeling, Wheeling, both
in West Virginia.1
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (57 Federal Register 59,267 (1993)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the factors set forth in section 3(c) of
the BHC Act.
One Valley is the second largest commercial banking organization in West Virginia, controlling deposits
1. In connection with this application, One Valley has obtained an
option to acquire 19.9 percent of the outstanding common stock of
Mountaineer and will file an application with the Board before
exercising this option.
138
Federal Reserve Bulletin • February 1994
of $2.3 billion, representing .14.2 percent of total commercial bank deposits in the state.2 Mountaineer is the
seventh largest commercial banking organization in
West Virginia, controlling deposits of $607 million,
representing 3.7 percent of total commercial bank
deposits in the state. Upon consummation of the
proposed transaction, One Valley would become the
largest commercial banking organization in West Virginia, controlling deposits of $2.9 billion, representing
17.9 percent of total commercial bank deposits in the
state.
Competitive Considerations
One Valley and Mountaineer compete directly in the
Martinsburg, Clarksburg, and Wheeling, West Virginia banking markets. In the Martinsburg banking
market,3 One Valley is the third largest of eight
commercial banking organizations, with deposits of
$129.9 million, representing 15.8 percent of total deposits in commercial banks in the market ("market
deposits"). 4 Mountaineer is the second largest commercial banking organization in the market, with deposits of $138.8 million, representing 16.9 percent of
market deposits. Upon consummation of the proposal,
One Valley would become the largest commercial
banking organization in the Martinsburg banking market, controlling deposits of $268.7 million, representing 32.7 percent of market deposits. The HerfindahlHirschman Index ("HHI") for the market would
increase by 534 points to 1950.5
A number of factors indicate that the increased level
of concentration in the Martinsburg banking market,
as measured by the HHI, tends to overstate the
competitive effect of this proposal. For example, upon
consummation of this proposal, seven commercial
banking organizations would continue to operate in the
Martinsburg banking market, including four of the ten
largest banking organizations in West Virginia. The
2. Unless otherwise indicated, deposit and market data are as of
June 30, 1993.
3. The Martinsburg banking market is approximated by Berkeley
and Jefferson Counties, except for the northern part of Berkeley
County.
4. No thrifts operate in the Martinsburg banking market.
5. Under the revised Department of Justice Merger Guidelines, 49
Federal Register 26,823 (June 29, 1984), a market in which the
post-merger HHI is above 1800 is considered to be highly concentrated. In such markets, the Justice Department is likely to challenge
a merger that increases the HHI by more than 50 points. The Justice
Department has informed the Board that a bank merger or acquisition
generally will not be challenged (in the absence of other factors
indicating anticompetitive effects) unless the post-merger HHI is at
least 1800 and the merger increases the HHI by more than 200 points.
The Justice Department has stated that the higher than normal HHI
thresholds for screening bank mergers for anticompetitive effects
implicitly recognize the competitive effect of limited-purpose lenders
and other non-depository financial entities.
Martinsburg banking market is also attractive to entry.
Although West Virginia, as a whole, experienced an
8 percent decline in population between 1980 and 1990,
the population in the Martinsburg banking market
increased by 24 percent.6 Deposits in the Martinsburg
banking market also have increased at a rate higher
than the statewide rate for deposit growth.7 The attractiveness of the Martinsburg banking market for
new entrants has been demonstrated by recent entry
into the market and the expansion activity of the
institutions that already operate in the market. For
example, since 1989, two large bank holding companies, including the largest in the state, have entered the
Martinsburg banking market through acquisition, and
in 1992, West Virginia's ninth largest bank holding
company entered the Martinsburg banking market
de novo. Between 1989 and 1993, the number of
branch locations increased by 48 percent, from 23 to
34. Finally, because West Virginia permits statewide
branching and acquisitions by out-of-state bank holding companies on a nationwide reciprocal basis, there
are numerous potential entrants to the Martinsburg
banking market.8
In addition, the unique geographic location of the
Martinsburg banking market provides readily available
and easily accessible banking services from out-ofmarket institutions. The Martinsburg banking market
is located in the eastern panhandle of West Virginia
bordered by Maryland and Virginia, and is in close
proximity to larger population clusters in both neighboring states.9 A significant portion of the daily work
force (approximately 19 percent) commutes to the
surrounding markets in which these population clusters are located.10 Moreover, a review of advertising
media in the market indicates that commercial and
consumer customers in the market are exposed to and
solicited by financial service providers from surrounding markets.11 Consequently, many businesses and
6. The population of Berkeley County increased 27 percent and the
population of Jefferson County increased 19 percent between 1980 and
1990.
7. The compound growth rate for total bank deposits in the market
in the past three years was 6.3 percent, compared to 4.8 percent for
MSAs in the state and 4.2 percent for non-MSA counties in West
Virginia.
8. W. Va. Code §§ 3IA-8-12, 31A-8A-7.
9. Martinsburg (population 14,000) is 19 miles south of Hagerstown
(population 35,900) and 33 miles west of Frederick (population
42,000), both in Maryland, and 22 miles north of Winchester, Virginia
(population 22,900).
10. Although there is substantial out-of-market commuting, the
level of commuting in any one direction is not sufficient to tie the
Martinsburg area to another market. See, e.g., Hartford National
Corporation, 73 Federal Reserve Bulletin 720 (1987). An additional
15 percent of the workforce commutes to the Washington, D.C.
banking market.
11. For example, five out-of-market depository institutions advertise in the local Martinsburg newspaper, and numerous out-of-market
Legal Developments
residents have convenient banking alternatives outside
the market, and these alternatives should substantially
mitigate any anticompetitive effects of the proposal.
In the Clarksburg and Wheeling markets,12 consummation of this proposal would not exceed the threshold
standards applied by the Board and set forth in the
Department of Justice Merger Guidelines. In addition,
numerous competitors would remain in these markets
after consummation of this proposal.13
In light of all facts of record, including the number of
competitors that would remain in these markets, the
number of potential entrants into these markets, and
the attractiveness to entry and unique geographic
characteristics of the Martinsburg banking market, the
Board concludes that consummation of this proposal is
not likely to have a significantly adverse effect on
competition or the concentration of banking resources
in the Martinsburg, Clarksburg or Wheeling banking
markets, or in any other relevant banking market.
Other Considerations
The Board concludes that the financial and managerial
resources and future prospects of One Valley, Mountaineer and their subsidiary banks are consistent with
approval. The Board also concludes that considerations relating to the convenience and needs of the
communities to be served, and the other supervisory
factors that the Board must consider under section 3 of
the BHC Act are consistent with approval of this
proposal.
Based on the facts of record, the Board has determined that the application should be, and hereby is,
approved. The Board's approval of this proposal is
expressly conditioned on compliance with the commitments made in connection with this application. The
commitments and conditions relied on by the Board in
reaching its decision are both deemed to be conditions
imposed in writing in connection with its findings and
decisions, and, as such, may be enforced in proceedings under applicable law.
depository institutions pay for a listing in the local telephone directory.
12. The Wheeling banking market is approximated by Marshall and
Ohio Counties in West Virginia, and the eastern third of Belmont
County in Ohio; the Clarksburg banking market is approximated by
Doddridge, Harrison and Taylor Counties in West Virginia.
13. In the Wheeling banking market, One Valley would become the
third largest depository institution, and the HHI would increase by 27
points to 974. In the Clarksburg banking market, One Valley would
become the second largest depository institution, and the HHI would
increase by 210 points to 1746. Market share data for the Wheeling
banking market are as of June 30, 1992 and are based on calculations
in which the deposits of thrift institutions are included at 50 percent.
The Board has regularly included thrift deposits in the calculation of
market share on a 50 percent weighted basis. See, e.g., First Hawaiian
Inc., 77 Federal Reserve Bulletin 52 (1991).
139
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 Richmond, acting pursuant
to delegated authority.
By order of the Board of Governors, effective
December 20, 1993.
Voting for this action: Chairman Greenspan, Vice Chairman Mullins, and Governors Angell, Kelley, LaWare, Lindsey, and Phillips.
J E N N I F E R J . JOHNSON
Associate Secretary of the Board
Orders Issued Under Section 4 of the Bank
Holding Company Act
Banc One Corporation
Columbus, Ohio
Order Approving Application to Conduct Certain
Data Processing Activities
Banc One Corporation, Columbus, Ohio ("Applicant"), a bank holding company within the meaning of
the Bank Holding Company Act ("BHC Act"), has
applied for the Board's approval under section 4(c)(8)
of the BHC Act (12 U.S.C. § 1843(c)(8)) and section
225.23(a) of Regulation Y (12 C.F.R. 225.23(a)) to
acquire all the voting shares of Croghan & Associates,
Inc., Boulder, Colorado ("Company"), and thereby to
engage de novo in certain data processing and data
transmission activities pursuant to section 225.25(b)(7)
of Regulation Y.
In particular, Applicant intends to operate, through
Company, a network for the processing and transmission of medical payment data between health care
providers (such as physicians, hospitals, and pharmacies) ("Providers") and entities responsible for providing medical benefits (such as health insurers, health
maintenance organizations, and preferred provider
organizations) ("Payers"). The network would operate in a manner similar to existing automated-tellermachine ("ATM") and point-of-sale ("POS") networks. In general, Providers would enter claims
information into the network with a request for payment, and Payers would authorize electronic fund
transfers in full or partial payment of the claims.
In addition, Company proposes to furnish Providers
and Payers with software for use in the medical
payments network, including claims adjudication software that would automate the determination of what
140 Federal Reserve Bulletin • February 1994
claims should be paid and the amount of each claim
that should be paid. Company also intends to provide
by-products of its data processing activities, including
statistical information derived from the data transmitted through the payment network, and to furnish
additional related services that may result from its
research and development efforts.1
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 33,443 (1993)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the factors set forth in section 4(c)(8)
of the BHC Act.
Applicant, with $75.4 billion in total consolidated
assets, is the eighth largest commercial banking organization in the United States, controlling $59.4 billion
in deposits.2 Applicant operates subsidiary banks in
Ohio, Kentucky, Indiana, Michigan, Illinois, Wisconsin, Texas, Colorado, Arizona, California, Utah, and
West Virginia, and engages directly and through its
subsidiaries in a broad range of banking and permissible nonbanking activities.
Closely Related to Banking Analysis
Section 4(c)(8) of the BHC Act provides that a bank
holding company may, with Board approval, engage in
any activity that the Board determines to be "so
closely related to banking or managing or controlling
banks as to be a proper incident thereto." An activity
may be deemed to be closely related to banking if it is
demonstrated that:
(1) Banks generally provide the proposed services;
or
(2) Banks generally provide services that are operationally or functionally so similar to the proposed
services as to equip them particularly well to provide the proposed services; or
(3) Banks generally provide services that are so
integrally related to the proposed services as to
require their provision in a specialized form.3
1. The Board has relied on Applicant's commitment to consult with
the Federal Reserve System before Company offers new data processing services or products not specifically discussed in the application to ensure that the activity will satisfy the criteria set forth in the
BHC Act and Regulation Y, and to allow the Federal Reserve System
an opportunity to consider whether a separate application should be
reviewed in any particular case.
2. Asset and deposit data are as of June 30, 1993.
3. See National Courier Association v. Board of Governors of the
Federal Reserve System, 516 F.2d 1229, 1237 (D.C. Cir. 1975). In
addition, the Board may consider any other basis that may demonstrate that the proposed activity has a reasonable or close connection
or relationship to banking or managing or controlling banks. See
Board Statement Regarding Regulation Y, 49 Federal Register 806
The Board has determined generally that certain data
processing activities are closely related to banking and
therefore permissible for bank holding companies under section 4(c)(8) of the BHC Act. Section
225.25(b)(7) of Regulation Y permits bank holding
companies to provide data processing and data transmission services, facilities (including software), data
bases, or access to such services, facilities, or data
bases by any technological means, so long as the data
to be processed or furnished are "financial, banking,
or economic" in nature.4 In addition, Regulation Y
provides that bank holding companies may engage in
incidental activities that are necessary to carry on an
activity that is closely related to banking. See
12 C.F.R. 225.21(a)(2). In the data processing context,
such incidental activities include the provision of
by-products of permissible data processing and data
transmission services, so long as such by-products are
not designed, or appreciably enhanced, for the purpose of marketability. See 12 C.F.R. 225.123(e)(2).
For analytical purposes, Applicant's proposal can
be viewed in three parts:
(1) The basic operation of a medical payments
network;
(2) The provision of claims adjudication software;
and
(3) The provision of statistical and other information
derived from the data flowing over the network.
(1) Basic Network Services. Under the medical
payments system proposed by Company, Payer organizations would issue to their members a medical
benefits card similar to a credit or debit card.5 Before
receiving health care services, a patient would present
this medical benefits card to the relevant Provider. The
Provider could then use the card to obtain access
through Company to a central database containing
information on patient eligibility, co-payment requirements, year-to-date deductible values, and other cov-
(1984); Securities Industry Association v. Board of Governors of the
Federal Reserve System, 468 U.S. 207, 210-211 n. 5 (1984).
4. Regulation Y also requires that the services be provided pursuant
to a written agreement, and places certain limitations on the facilities
and hardware provided with the data processing services. In particular, the facilities must be designed, marketed, and operated for the
processing and transmission of financial, banking, or economic data;
hardware must be provided only in conjunction with permissible
software; and general purpose hardware must not constitute more
than 30 percent of the cost of any packaged offering. See 12 C.F.R.
225.25(b)(7). Applicant has committed that Company will provide the
proposed services pursuant to a written agreement, and will provide
facilities and hardware within the limitations established by Regulation Y.
5. Company would perform embossing and encoding functions with
respect to these medical benefits cards. Applicant expects that medical benefits cards may be developed with debit or credit card features,
so that the cards could be used by consumers to obtain access to, and
authorize medical payments from, their banking or other accounts.
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erage data. After medical services are furnished, the
Provider would transmit claim information to the
relevant Payer through Company's medical payments
network. This claim information would include the
amount charged and a description of the services
rendered that is sufficient to allow the Payer to determine the eligibility of the claim and the amount that
should be paid. The Payer would then authorize electronic payment of the appropriate amount through
Company and participating financial institutions.
Throughout this process, Providers would be able to
ascertain the status of the claim and any related
payment.6
Company's primary activities would include the
routing and processing of medical payment transactions through direct connections between Company's
computer switch and Payer and Provider terminals.
Company also would perform the accounting functions
necessary to settle the payments processed through
the network, and would provide electronic transaction
and settlement reports to participating financial institutions, Providers, and Payers. In addition, Company
would provide other services analogous to functions
performed by the operator of an ATM or POS network, including switching, gateway, and terminal driving services. These functions represent the processing
of banking, financial, and economic data of the type
previously approved for bank holding companies.7
In addition to banking, financial, and economic
information, however, Company would process and
transmit medical treatment data sufficient to allow
Payers to make decisions regarding the legitimacy of a
claim and the appropriate degree of coverage. Similarly, when Providers obtain access to the coverage
information database, Company would transmit data
6. Alternative financial arrangements among Providers and Payers
— for example, pricing based on the number of patients treated by a
Provider, with payments to be made at regular intervals upon presentation of satisfactory documentation - also could be accommodated by
the proposed network.
7. Company also proposes to provide and maintain software and
hardware used in the medical payments network. The hardware
provided by Company would consist primarily of general purpose
hardware which, together with operating system, database and network access, and network processing software, would comprise the
basic operating environment for the medical payments network. The
software provided by Company for use in the network would be an
essential component in the operation of the medical payments system.
Applicant has stated that Company would provide hardware and
software only in accordance with the limitations established by
Regulation Y. System software would constitute general purpose
software and be considered part of the general purpose hardware of
the system, subject to the 30 percent limitation in Regulation Y. Other
software would include database and network access products, as well
as network processing software similar to that used in the operation of
ATM and POS networks. This software, together with the adjudication software discussed below, would be special purpose software
designed to carry out the billing, accounts payable, and electronic
fund transfer functions of the network.
141
relating to the terms of a particular Payer's medical
coverage contract and the extent to which specific
medical treatments would be covered by the patient's
insurance policy.
While such medical and coverage data are not
financial data, processing and transmitting this data
are essential components in the transmission and
processing of the medical payments and financial
information in the network. For example, the medical
data submitted by Providers as part of a claim (such as
descriptions of a patient's symptoms and of medical
procedures performed by the Provider) are necessary
to the Payer's decision to authorize an electronic funds
transfer payment.8 Similarly, a Payer must furnish
insurance policy coverage information to a Provider in
order to permit the Provider to calculate the payment
reasonably to be expected from the Payer and the
charges that should be allocated to the patient.
Moreover, the purpose of the data processing services rendered by Company in its operation of the
network would be to permit the electronic transfer of
funds from patient and Payer accounts to Provider
accounts. The Board also notes that banking organizations transmit and process similar incidental data
(though in less significant quantities) in connection
with bill-paying services provided to consumers and
accounts payable services rendered to corporate customers. In addition, the Office of the Comptroller of
the Currency ("OCC") has permitted national banks
to operate a medical payments network that processed
a somewhat more limited amount of non-financial
medical treatment and claims eligibility data.9 For the
foregoing reasons, the Board believes that Company's
processing and transmission of medical and coverage
data in connection with its operation of a payments
network are permissible as incidental activities.10
Accordingly, and on the basis of all the facts of
record, the Board has concluded that, although the
operation of a medical payments network would involve the processing and transmission of medical and
8. Applicant has represented that this medical data submitted by
Providers would include only information required to assess the
appropriateness, validity, and amount of a claim for payment, or
otherwise necessary to authorize payment for a claim, and that
Providers would not be transmitting data for general medical use.
9. For example, the proposal approved by the OCC did not appear
to include an adjudication mechanism (such as that discussed below)
that permits an immediate analysis and payment of claims that fall
within specifications set by the Payer. In many other respects,
however, the network considered by the OCC involved the transmission of non-financial data, including medical treatment data, such as
that at issue in this proposal. The OCC concluded that operation of the
network was a permissible activity because it constituted the provision of a data processing system in connection with electronic fund
transfers. See OCC Interpretive Letter No. 419 (February 16, 1988),
reprinted in Federal Banking Law Reporter (CCH) 1 85,643 (May 27,
1988).
10. See 12 C.F.R. 225.21(a)(2).
142
Federal Reserve Bulletin • February 1994
coverage data, as well as data of a financial, banking,
or economic nature, Company's proposed operation of
a medical payments network would constitute permissible data processing and data transmission activities
under the BHC Act.
(2) Adjudication Software. In addition to the software used in the basic operation of the medical payments network, Company proposes to provide claims
adjudication software to Payers. This software would
represent an electronic version of the basic rules of a
Payer's coverage contract, and would be designed for
the processing of routine claims. In general, the claims
adjudication software would automate a large portion
of the process by which a Payer determines the extent
to which a submitted claim should be paid.
Company would not make decisions or render advice as to what portions, if any, of the claims adjudication process should be automated for any particular
Payer, and each adjudication program developed by
Company would contain only the information necessary to process submitted claims. In addition, Company would not play any role in determining the extent
to which a claim would be covered: all parameters for
payment of insurance claims would be set by the
Payer, and questions, payment decisions, or disputes
about the extent of coverage would be handled by the
Payer (and not by Company).11
The claims adjudication process essentially involves
the interaction of financial and banking data (the
amount of a submitted claim and a request for an
electronic funds transfer) and medical and coverage
data (treatment information and the basic rules of a
Payer's coverage contract). Claims adjudication is a
central aspect of the authorization function in the
proposed network, and is necessary to the consummation of an electronic funds transfer. For these reasons,
claims adjudication is functionally similar to the payment authorization services rendered by operators of
ATM and POS networks to their financial institution
and other customers. In addition, the provision of
claims adjudication software is an integral part of the
accounts payable function Company proposes to provide to Payers.
Accordingly, the Board believes that the processing
of medical and coverage data involved in claims adjudication is an integral part of, and therefore necessary
to, the processing of related financial and banking
11. These limitations should ensure that Company does not become
engaged in the provision of insurance-related services or advice.
Company would only provide the electronic media and software for
adjudication and payment of benefits, and would not be engaged in
insurance agency activities or in the sale of medical insurance. In this
regard, Applicant has committed that Company would not conduct
any activity that would require it to be licensed as an insurance agent
or broker under state law.
information, and Company's processing of the underlying payment transactions. Hence, on the basis of all
the facts of record, the Board has concluded that
Company's provision of claims adjudication software
that processes such medical and coverage data is
permissible as an activity incidental to its provision of
software for the processing of banking and financial
data, and its operation of a medical payments network.12
(3) Electronic Data Interchange. Company also
proposes to furnish participants in the medical payments system with statistical and other data derived
from the information contained in Company's database.13 Each customer would have on-line access to all
the data it places in the system, and third parties
designated by a Payer or Provider also could receive
access to data owned by such customer.14 Applicant
has indicated that the information comprising the
database for these services would consist solely of
medical claims data necessary for the authorization of
payments, other data transmitted through Company's
network, and similar claims and payment information
provided to Company by actual and potential processing and adjudication customers.
The Board has stated that bank holding companies
may provide by-products of permissible data processing and data transmission activities, so long as
such by-products are not designed, or appreciably
enhanced, for the purpose of marketability. 12 C.F.R.
225.123(e)(2). The Board has indicated that by-products include data, software, or data processing techniques that may be applicable to the data processing
requirements of other industries. See Citicorp, 68
Federal Reserve Bulletin 505, 510-511 (1982).
Company expects that, in most instances, raw data
will be transmitted to a customer from the network's
central computer upon the customer's electronic request, without any intervention by Company personnel. The customer would then analyze the data to suit
its own particular needs. In some cases, however,
pursuant to a customer's instructions, Company may
perform limited selection, combination, and similar
functions upon raw data so that it can be transmitted to
12. See 12 C.F.R. 225.21(a)(2).
13. Applicant has stated that these electronic data interchange
services would be offered as part of a package of services purchased
by a Payer or Provider. Company also would make these services
available on an independent basis to potential customers of Company's network processing and claims adjudication services. Company would not, in any event, market these services to the general
public.
14. All data furnished by Company in rendering these services
would be formatted so that individual Providers and patients could not
be identified by persons not authorized to receive access to such
information. In addition, such data would be furnished only to the
extent permitted by relevant patient and other consent forms.
Legal Developments
the customer in a reorganized and more usable form.
Company also may design software that would enable
customers to perform similar reorganization functions
upon raw data. Company would not, however, render
advisory or consulting services in connection with the
provision or use of these electronic data interchange
capabilities, and would not engage in any scientific,
actuarial, or clinical research or analysis of the information contained in the database. Moreover, Company would not, under any circumstances, make data
available to the general public.
On the basis of all the facts of record, including the
limitations discussed in the application and the limitations discussed above, the Board has concluded that
the proposed electronic data interchange services
would constitute permissible by-products of Company's primary data processing activities, and that
such services are, therefore, permissible as an incidental activity.
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 those resources.15 Based
on all the facts of record, the Board has concluded that
financial and managerial considerations are consistent
with approval of this proposal.
In order to approve this application, the Board also
must determine that the performance of the proposed
activities by Applicant through Company "can reasonably be expected to produce benefits to the public . . .
that outweigh possible adverse effects, such as undue
concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking
practices." 12 U.S.C. § 1843(c)(8). The Board expects
that the participation of Company in the market for the
proposed data processing services would increase the
level of competition among providers of those services. The Board also anticipates that Company's
proposed activities would result in new products and
services, greater efficiencies, and increased convenience for consumers. In addition, there is no evidence
in the record that consummation of the proposed
activities would result in any significantly adverse
effects, such as undue concentration of resources,
decreased or unfair competition, conflicts of interests,
or unsound banking practices. Accordingly, the Board
concludes that the balance of the public interest fac15. See 12 C.F.R. 225.24. See also The Fuji Bank, Limited, 75
Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73
Federal Reserve Bulletin 155 (1987).
143
tors that it is required to consider under section 4(c)(8)
of the BHC Act is favorable.
Based on all the facts of record, the Board has
determined that the application should be, and hereby
is, approved. The Board's approval is specifically
conditioned on compliance with the commitments
made in connection with this application and with the
conditions referred to in this order. The Board's
determination also is subject to all the conditions set
forth in Regulation Y, including those in sections
225.4(d) and 225.23(b) of Regulation Y, and to the
Board's authority to require such modification or
termination of the activities of a bank holding company or any of its subsidiaries as the Board finds
necessary to ensure compliance with, and to prevent
evasion of, the provisions of the BHC Act and the
Board's regulations and orders issued thereunder. For
purposes of this action, these commitments and conditions are deemed to be conditions imposed in writing
by the Board in connection with its findings and
decision, and, as such, may be enforced in proceedings under applicable law.
This transaction shall not be consummated later
than three months after the effective date of this order,
unless such period is extended for good cause by the
Board or by the Federal Reserve Bank of Cleveland,
acting pursuant to delegated authority.
By order of the Board of Governors, effective
December 22, 1993.
Voting for this action: Chairman Greenspan, Vice Chairman Mullins, and Governors Kelley, Lindsey, and Phillips.
Absent and not voting: Governors Angell and LaWare.
JENNIFER J . JOHNSON
Associate Secretary of the Board
Creditanstalt-Bankverein
Vienna, Austria
Order Approving an Application to Engage in
Investment Advisory Services
Creditanstalt-Bankverein, Vienna, Austria ("Applicant"), a foreign bank subject to the provisions 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)) to engage de novo, through a joint venture, in investment
advisory activities pursuant to section 225.25(b)(4) of
Regulation Y (12 C.F.R. 225.25(b)(4)).1 Applicant pro-
1. Specifically, Company will:
144
Federal Reserve Bulletin • February 1994
poses to establish a limited partnership, Steinberg
Asset Management Company, L.P., New York, New
York ("Company"), between its wholly owned subsidiary Creditanstalt International Advisers Group,
Inc., New York, New York, and Steinberg Asset
Management Inc., New York, New York ("Coventurer"). Company will conduct the proposed activities
throughout the United States and abroad.
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 57,611 (1993)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the factors set forth in section 4(c)(8)
of the BHC Act.
Applicant, with total consolidated assets of
$48.4 billion, is the 97th largest banking organization in
the world.2 In the United States, Applicant operates a
branch in New York, New York, and representative
offices in Atlanta, Georgia, and San Francisco, California.3 Applicant also engages in permissible nonbanking activities in the United States and abroad.
The Board previously has determined by regulation
that providing investment advisory services is an
activity that is closely related to banking and permissible for bank holding companies under section 4(c)(8)
of the BHC Act.4 Applicant has stated that Company
will engage in these activities in accordance with the
Board's regulations.
In prior decisions, the Board has expressed concern
that joint ventures could potentially lead to a matrix of
relationships between co-venturers and their affiliates
that could break down the legally mandated separation
of banking and commerce, create the possibility of
conflicts of interests and other adverse effects that the
BHC Act was designed to prevent, or impair or give
the appearance of impairing the ability of the banking
organization to function effectively as an independent
and impartial provider of credit.5 Further, joint ventures must be carefully analyzed for any possible
(1) Serve as investment adviser (as defined in section 2(a)(20) of the
Investment Company Act of 1940, 15 U.S.C. § 80a-2(a)(20)) to an
investment company registered under that act, including sponsoring, organizing, and managing a closed-end investment company;
(2) Provide portfolio investment advice to any other person; and
(3) Furnish general economic information and advice, general
economic statistical forecasting services and industry studies. See
12 C.F.R. 225.25(b)(4)(ii),(iii), and (iv).
2. Asset data are as of June 30, 1993.
3. Under section 8(a) of the International Banking Act of 1978
(12 U.S.C. § 3106(a)), a foreign bank that operates a branch, agency,
or commercial lending company subsidiary in the United States is
subject to the BHC Act as if it were a bank holding company.
4. See 12 C.F.R. 225.25(b)(4).
5. See, e.g., The Fuji Bank, Limited, 75 Federal Reserve Bulletin
577 (1989); Amsterdam-Rotterdam Bank, N.V., 70 Federal Reserve
Bulletin 835 (1984).
adverse effects on competition and on the financial
condition of the banking organization involved in the
proposal.
Currently, Coventurer engages only in investment
advisory activities that are permissible for a bank
holding company.6 Applicant has committed to notify
the Board in the event Company, Coventurer, or any
of its affiliates, determines to engage in any securities
activity that is impermissible for a state member bank
under the Glass-Steagall Act or any other activity that
is impermissible under the BHC Act, and to seek
Board approval of Applicant's retention of its interest
in Company should such activities of Coventurer or its
affiliates be inconsistent with the Board's order approving this application. Based on these and other
commitments made by Applicant, the Board believes
that the structure of the joint venture in this case is
consistent with the provisions of section 4 of the BHC
Act and prior Board cases.
In order to approve this application, the Board also
is required to determine that the performance of the
proposed activities by Applicant can reasonably be
expected to produce benefits to the public that would
outweigh possible adverse effects under the proper
incident to banking standard of section 4(c)(8) of the
BHC Act.7
Under the framework established in this and prior
Board decisions, consummation of this proposal is not
likely to result in any significantly adverse effects,
such as an undue concentration of resources, decreased or unfair competition, conflicts of interests, or
unsound banking practices. Moreover, the Board has
determined that performance of the proposed activities by Applicant can reasonably be expected to produce public benefits that would outweigh any adverse
effects under the proper incident to banking standard
of section 4(c)(8) of the BHC Act.
In weighing these factors under section 4 of the
BHC Act, the Board considers the financial condition
and resources of Applicant and its subsidiaries and the
effect of the proposal on these resources. In this case,
the Board notes that Applicant meets the relevant
risk-based capital standards consistent with the Basle
Accord, and has capital equivalent to that which
would be required for United States banking organizations. In view of these and other facts of record, the
Board has determined that the financial factors are
consistent with approval of this application. The man-
6. See 12 C.F.R. 225.25(b)(4). In addition, Coventurer's affiliate,
Michael A. Steinberg & Company, Inc., New York, New York,
provides securities brokerage services which also are permissible for
bank holding companies under the BHC Act. See 12 C.F.R.
225.25(b)(15).
7. 12 U.S.C. § 1843(c)(8).
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agerial resources of Applicant and its subsidiaries also
are consistent with approval.
Based on the foregoing and all the facts of record,
the Board has determined to, and hereby does, approve the application subject to the terms and conditions set forth in this order, and in the Board regulations and orders noted above. The Board's
determination also is subject to all the terms and
conditions set forth in its Regulation Y, including
those in sections 225.4(d) and 225.23(b), and to the
Board's authority to require modification or termination of the activities of a bank holding company or any
of its subsidiaries as the Board finds necessary to
assure compliance with, and to prevent evasion of, the
provisions of the BHC Act, and the Board's regulations and orders issued thereunder. The Board's decision is specifically conditioned on compliance with all
the commitments made in this application, including
the commitments discussed in this order and the
conditions set forth in the Board orders noted above.
These commitments and conditions shall be deemed to
be conditions imposed in writing by the Board in
connection with its findings and decisions, and may be
enforced in proceedings under applicable law.
This transaction shall not be consummated later
than three months after the effective date of this order,
unless such period is extended for good cause by the
Board or by the Federal Reserve Bank of New York,
pursuant to delegated authority.
By order of the Board of Governors, effective
December 16, 1993.
Voting for this action: Vice Chairman Mullins and Governors Angell, Kelley, LaWare, Lindsey, and Phillips. Absent
and not voting: Chairman Greenspan.
J E N N I F E R J . JOHNSON
Associate Secretary of the Board
Crestar Financial Corporation
Richmond, Virginia
Crestar Bank
Richmond, Virginia
Order Approving Mergers of Savings Associations
with a Commercial Bank
Crestar Financial Corporation, Richmond, Virginia
("Crestar"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC
Act"), has applied under section 4(c)(8) of the BHC
Act (12 U.S.C. § 1843(c)(8)) and section 225.23 of the
Board's Regulation Y (12 C.F.R. 225.23) to acquire
Providence Savings and Loan Association, F.A., Vi
145
enna, Virginia ("Providence"). Crestar's subsidiary
bank, Crestar Bank, Richmond, Virginia ("Bank"), a
state member bank, has applied under section 18(c) of
the Federal Deposit Insurance Act ("FDI Act")
(12 U.S.C. § 1828(c)) ("Bank Merger Act") to acquire
Providence and Virginia Federal Savings Bank, Richmond, Virginia ("VFSB").
Crestar and Bank have also applied under section
5(d)(3) of the FDI Act (12 U.S.C. § 1815(d)(3)), as
amended by the Federal Deposit Insurance Corporation Improvement Act of 1991, Pub. L. No. 102-242,
§ 501, 105 Stat. 2236, 2388 (1991), to acquire Providence and VFSB,1 and Bank has applied to establish
branches at the present locations of Providence and
VFSB pursuant to section 9 of the Federal Reserve
Act (12 U.S.C. § 321 et seq.).2
Notice of the applications, affording interested persons an opportunity to submit comments, has been
published in accordance with the Bank Merger Act
and the Board's Rules of Procedure (12 C.F.R.
262.3(b)). Reports on the competitive effects of the
merger were requested from the United States Attorney General, the Office of the Comptroller of the
Currency, the Federal Deposit Insurance Corporation,
and the Office of Thrift Supervision. 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 the Bank Holding Company
Act, the Bank Merger Act, and the Federal Reserve
Act.
Crestar, with total consolidated assets of $13 billion,
operates subsidiary banks in Virginia, Maryland, and
the District of Columbia.3 Bank is the second largest
commercial banking organization in Virginia, controlling approximately $7.8 billion in deposits, representing 13.8 percent of total deposits in commercial banking organizations in the state. Providence is the 14th
largest thrift institution in Virginia, controlling deposits of $329.4 million, representing 3.3 percent of total
deposits in thrift institutions in the state. VFSB is the
fifth largest thrift institution in Virginia, controlling
approximately $552.8 million in deposits, representing
4.8 percent of total deposits in thrift institutions in the
state. Upon consummation of the proposed transaction, Crestar would remain the second largest commercial bank in Virginia, controlling approximately
1. Section 5(d)(3) of the FDI Act requires the Board to review any
proposed merger between a bank owned by a bank holding company
and a savings association, or branch of a savings association, in which
the resulting institution is insured by the Bank Insurance Fund, and in
reviewing these proposals, to follow the procedures and consider the
factors set forth in section 18(c) of the Bank Merger Act.
2. These branches are set forth in the Appendix. Providence will
close its branch in Maryland prior to consummation of the proposal.
3. Banking data are as of December 31, 1992.
146
Federal Reserve Bulletin • February 1994
$8.7 billion in deposits, representing 13.3 percent of
total deposits in commercial banks in the state.
Competitive Considerations
Crestar competes directly with VFSB in the Virginia
banking markets of Charlottesville, Newport NewsHampton, Richmond-Petersburg, and Staunton; and
with Providence in the Washington, D.C., Ranally
Metro Area ("Washington RMA"). Consummation of
this proposal would not exceed the Department of
Justice Merger Guidelines4 as applied to depository
institutions5 in any of these banking markets. Based on
all the facts of record, including the relatively small
increase in the market concentration and market
share,6 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 Virginia and Washington RMA banking
markets or any other relevant banking market.
Convenience and Needs Considerations
In analyzing the convenience and needs factor, the
Board has carefully considered comments submitted
by Hamler Development Co., Inc., Concord, Virginia
4. Under the revised Department of Justice Merger Guidelines,
49 Federal Register 26,823 (June 29, 1984), a market in which the
post-merger HHI is above 1800 is considered to be highly concentrated. In such markets, the Justice Department is likely to challenge
a merger that increases the HHI by more than 50 points. The Justice
Department has informed the Board that a bank merger or acquisition
generally will not be challenged (in the absence of other factors
indicating anticompetitive effects) unless the post-merger HHI is at
least 1800 and the merger increases the HHI by more than 200 points.
The Justice Department has stated that the higher than normal HHI
thresholds for screening bank mergers for anticompetitive effects
implicitly recognize the competitive effect of limited-purpose lenders
and other non-depository financial entities.
5. In this context, depository institutions include commercial banks,
savings banks, and savings associations. Market share data before
consummation are based on calculations in which the deposits of thrift
institutions are included at 50 percent. The Board previously has
indicated that thrift institutions have become, or have the potential to
become significant competitors of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); National City Corporation, 70 Federal Reserve Bulletin lAh (1984). Because the deposits of
Providence and VFSB would be transferred to a commercial bank
under this proposal, those deposits are included at 100 percent in the
calculation of pro forma market share. See Norwest Corporation, 78
Federal Reserve Bulletin 452 (1992); First Banks, Inc., 76 Federal
Reserve Bulletin 669 (1990).
6. Market data are as of June 30, 1992. Consummation of this
proposal would result in the following structural changes as measured
by the HHI and increases in Crestar's share of total deposits in
depository institutions in these banking markets ("market share"):
Charlottesville (HHI unchanged at 1989 points and 14.2 percent
market share); Newport News-Hampton (HHI increase by 48 points
to 1250 and 24.5 percent market share); Richmond-Petersburg (HHI
increase by 75 points to 1666 and 22.5 percent market share); Staunton
(HHI increase by 55 points to 1796 and 17.1 percent market share);
and Washington RMA (HHI increase by 6 points to 949 and 9.4
percent market share).
("Protestant"). Protestant alleges generally that Bank
discriminates against blacks in its lending activities,7
and in particular, practices illegal discrimination
against minorities and low-income individuals in a
lending program that includes participating financial
institutions and the City of Lynchburg and is sponsored by the United States Department of Housing and
Urban Development ("HUD"). 8 In assessing the impact of this proposal on the convenience and needs of
the communities to be served, the Board has considered Protestant's comments in light of Crestar's record
of performance under the Community Reinvestment
Act (12 U.S.C. § 2901 et seq.) ("CRA").
Initially, the Board notes that all of Crestar's subsidiary banks received "outstanding" or "satisfactory" ratings from their primary regulators in their most
recent examinations for CRA performance. In particular, Bank received an "outstanding" rating for CRA
performance from the Federal Reserve Bank of Richmond in May 1993.9 As part of this 1993 examination,
examiners reviewed denied and approved loan files
and conducted interviews with 27 loan officers to
ascertain compliance with regulatory requirements
when collecting information from loan applicants. Examiners found no evidence of illegal discrimination or
illegal credit practices at Bank.10
The Board also has previously reviewed Protestant's allegations of illegal discriminatory practices
relating to the administration of the HUD-sponsored
Community Development Block Grant program in
connection with applications filed by Crestar and
Central Fidelity Bank and, for the reasons more fully
stated in those orders, concluded that these allegations
did not warrant denial under the convenience and
needs factor.11 Subsequent to the Board's action on
those applications, HUD completed its investigation
7. Protestant believes that Bank's denial of a recent loan request by
Protestant's principal on financial considerations evidences Bank's
illegal discriminatory lending policies. The Board has considered this
allegation in its review of these applications.
8. Protestant also alleges that Crestar and other financial institutions
have illegally excluded the principal of Protestant from participation in
the loan program in retaliation for complaints about the administration
of the program.
9. The Statement of the Federal Financial Supervisory Agencies
Regarding the Community Reinvestment Act provides that a CRA
examination is an important and often controlling factor in the
consideration of an institution's CRA record, and that these reports
will be given great weight in the applications process. 54 Federal
Register 13,742, 13,745 (1989).
10. Examiners noted two isolated incidences of noncompliance with
consumer credit laws. In one case, Bank failed to notify a consumer of
adverse action on a loan and this error was corrected during the
examination. The other case involved failure to retain a record as
required under the Board's Regulation B. Examiners determined that
Bank's compliance policies were sufficient to prevent similar violations in the future.
11. Crestar Bank, 76 Federal Reserve Bulletin 879 (1990); Central
Fidelity Bank, 77 Federal Reserve Bulletin 675 (1991).
Legal Developments
of Protestant's allegations in November 1991. In a
formal written determination of compliance, HUD
concluded that the denial of a funding request by the
principal of Protestant as well as the administration of
the loan program was in compliance with the Housing
and Community Development Act of 1974.
In light of the foregoing and other facts of record,
the Board does not believe that Protestant's comments
warrant denial of these applications.12 In this regard,
the Board concludes on the basis of all the facts of
record that considerations relating to the convenience
and needs of the communities to be served, including
Crestar's record of performance under the CRA, are
consistent with approval.
Other Considerations
The Board has determined that the operation of a
savings association by a bank holding company is
closely related to banking for purposes of section
4(c)(8) of the BHC Act. 12 C.F.R. 225.25(b)(9). Crestar has committed to operate Providence in accordance with the Board's regulations and the record
does not indicate that consummation of this proposal
is likely to result in any significantly adverse effects,
such as undue concentration of resources, decreased
or unfair competition, conflicts of interest, or unsound
banking practices that are not likely to be outweighed
by the public benefits of this proposal. Accordingly,
the Board has determined that the balance of public
interest factors it must consider under section 4(c)(8)
of the BHC Act is favorable and consistent with
approval of the application.
The Board also concludes that the financial and
managerial resources and future prospects of Crestar,
Providence, and VFSB are consistent with approval of
this application. In addition, the Board also has considered the specific factors it must review under section 5(d)(3) of the FDI Act, and 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;
12. Protestant has characterized Bank's participation in one community development program as a pretense. The Board notes that
Bank's 1993 CRA examination concluded that the bank supports the
development or implementation of specific projects promoting community revitalization consistent with its size, financial condition and
local conditions. This examination also identifies a number of programs and activities as demonstrating Bank's involvement and commitment to local community organizations aside from the program
mentioned by Protestant.
147
(2) Crestar and Bank currently meet, and upon
consummation of the proposed transaction will continue to meet, all applicable capital standards; and
(3) The proposed transaction would comply with the
interstate provisions of the BHC Act if Providence
and VFSB were state banks that Crestar was applying to acquire directly. See 12 U.S.C. § 1815(d)(3).
The Board has also reviewed the factors it is required
to consider in applications for the establishment and
operation of branches under the Federal Reserve Act
and finds these factors to be consistent with approval.
Based on the foregoing and all the facts of record,
the Board has determined that these applications
should be, and hereby are, approved. The Board's
approval of these applications is conditioned upon
compliance by Crestar and Bank with the commitments made in connection with these applications. For
purposes of this action, the commitments and conditions relied on in reaching this decision are both
conditions imposed in writing by the Board and, as
such, may be enforced in proceedings under applicable
law.
The acquisitions by Bank may not be consummated
before the thirtieth calendar day following the effective
date of this Order, and this proposal may not be
consummated later than three months after the effective date of this order, unless such period is extended
by the Board or by the Federal Reserve Bank of
Richmond, acting pursuant to delegated authority.
By order of the Board of Governors, effective
December 22, 1993.
Voting for this action: Chairman Greenspan, Vice Chairman Mullins and Governors Kelley, Lindsey, and Phillips.
Absent and not voting: Governors Angell and La Ware.
J E N N I F E R J . JOHNSON
Associate Secretary of the Board
Appendix
Virginia Federal Savings Branch locations
10710 Midlothian Turnpike, Richmond, Virginia
1201 Emmet Street, Charlottesville, Virginia
1643 Seminole Trail, Charlottesville, Virginia
1011 East Main Street, Orange, Virginia
230 South Wayne Avenue, Waynesboro, Virginia
11601 Midlothian Turnpike, Midlothian, Virginia
14th and Lee Street, West Point, Virginia
1222 Richmond Road, Williamsburg, Virginia
550 East Marshall Street, Richmond, Virginia
14 North Laburnum Avenue, Richmond, Virginia
1624 Hull Street, Richmond, Virginia
148
Federal Reserve Bulletin • February 1994
5601 Patterson Avenue, Richmond, Virginia
5419 Lakeside Avenue, Richmond, Virginia
2613 Parham Avenue, Richmond, Virginia
Providence Savings and Loan Association, F.A.
Branch locations
6050A Burke Commons Road, Burke, Virginia
4377 Kevin Walker Drive, Dumfries, Virginia
10695 Braddock Road, Fairfax, Virginia
9845 Georgetown Pike, Great Falls, Virginia
1443 Chain Bridge Road, McLean, Virginia
527 Maple Avenue, East, Vienna, Virginia
231 S. Van Dorn Street, Alexandria, Virginia
3500 Mt. Vernon Avenue, Alexandria, Virginia
8702 Richmond Highway, Alexandria, Virginia
6116a Rose Hill Drive, Alexandria, Virginia
3101 Duke Street, Alexandria, Virginia
tion in the world.2 In the United States, Applicant
owns a state nonmember bank based in Los Angeles,
California; operates branches in New York, New York
and Chicago, Illinois; and maintains agencies in Los
Angeles, California, San Francisco, California, and
Atlanta, Georgia, as well as a loan production office in
Houston, Texas. In addition to these banking operations, Applicant owns several nonbanking subsidiaries
in the United States, including Company.3
Company is, and will continue to be, a broker-dealer
registered with the Securities and Exchange Commission ("SEC") and a member of the National Association of Securities Dealers, Inc. ("NASD"). Accordingly, Company is subject to the record-keeping,
reporting, fiduciary standards, and other requirements
of the Securities Exchange Act of 1934 (15 U.S.C.
§ 78a et seq.), the SEC, and the NASD. Company
currently engages in a variety of securities-related
activities.4
The Dai-Ichi Kangyo Bank, Limited
Tokyo,Japan
Order Approving Application to Engage in Certain
Nonbanking Activities
The Dai-Ichi Kangyo Bank, Limited, Tokyo, Japan
("Applicant"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC
Act"), has applied for the Board's approval under
section 4(c)(8) of the BHC Act (12 U.S.C.
§ 1843(c)(8)) and section 225.23(a) of the Board's
Regulation Y (12 C.F.R. 225.23(a)) to engage de novo,
through its wholly owned subsidiary, DKB Securities
Corporation, New York, New York ("Company"), in
the purchase and sale for its own account of certain
options and options on futures contracts with respect
to certain bank-eligible securities and money market
instruments, for purposes other than hedging.1 Company proposes to conduct these activities on a worldwide basis.
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 52,760 (1993)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the factors set forth in section 4(c)(8)
of the BHC Act.
Applicant, with total consolidated assets of approximately $484.1 billion, is the largest banking organiza-
1. In particular, Company proposes to trade the derivative instruments listed in Appendix A to this order. Company would hedge its
positions in these instruments by trading in the contracts listed in
Appendix B.
2. Asset and ranking data are as of March 31, 1993, and employ
exchange rates then in effect.
3. These nonbanking subsidiaries include, in addition to Company:
(1) DKB Financial Products, Inc., New York, New York, which is
engaged primarily in lending, leasing, financial advisory, loan marketing, and swap and swap derivative products activities, pursuant
to section 4(c)(8) of the BHC Act and sections 225.25(b)(1), (b)(4),
and (b)(5) of Regulation Y;
(2) DKB Financial Futures Corp., Chicago, Illinois ("DKB Futures"), which is engaged primarily in futures commission merchant
activities, pursuant to section 4(c)(8) of the BHC Act and section
225.25(b)(18) of Regulation Y; and
(3) The CIT Group Holdings, Inc., New York, New York, which is
engaged primarily in financing and leasing activities, pursuant to
section 4(c)(8) of the BHC Act and sections 225.25(b)(1) and (b)(5)
of Regulation Y. See The Dai-Ichi Kangyo Bank, Limited, 77
Federal Reserve Bulletin 670 (1991); The Dai-Ichi Kangyo Bank,
Limited, 76 Federal Reserve Bulletin 975 (1990); The Dai-Ichi
Kangyo Bank, Limited, 76 Federal Reserve Bulletin 75 (1990).
4. The activities that Company currently has authority to conduct
include:
(1) Underwriting and dealing in, to a limited extent, certain municipal revenue bonds, 1-4 family mortgage-backed securities, commercial paper, and consumer receivable-related securities;
(2) Underwriting and dealing in securities that state member banks
are authorized to underwrite and deal in under sections 5(c) and 16
of the Glass-Steagall Act (12 U.S.C. §§ 335 and 24(7)), pursuant to
section 225.25(b)(16) of Regulation Y (12 C.F.R. 225.25(b)(16));
(3) Providing securities brokerage and investment advisory services, on both a separate and combined basis, pursuant to sections
225.25(b)(4) and (b)(15) of Regulation Y (12 C.F.R. 225.25(b)(4) and
(b)(15));
(4) Acting as agent in the private placement of all types of securities,
and providing related advisory services;
(5) Buying and selling all types of securities on customer order as a
"riskless principal"; and
(6) Providing various types of financial and transaction advice to
financial and nonfinancial institutions.
See The Dai-Ichi Kangyo Bank, Limited, 77 Federal Reserve
Bulletin 184 (1991). In connection with its securities dealing business,
Company also trades in futures, options, and options on futures on
securities for hedging purposes.
Legal Developments
Closely Related to Banking Analysis
The Board previously has determined by order that
purchasing and selling exchange-traded and over-thecounter derivative instruments based on bank-eligible
securities and certain money market instruments, for
purposes other than hedging, is closely related to
banking. See Swiss Bank Corporation, 11 Federal
Reserve Bulletin 759 (1991) {"Swiss Bank").5 In this
case, as in Swiss Bank, the securities on which the
proposed instruments would be based are eligible to be
underwritten and dealt in by national banks and statechartered banks that are members of the Federal
Reserve System.6
Proper Incident to Banking Analysis
In order to approve the proposal, the Board must
determine that the proposed activities to be conducted
by Company "can reasonably be expected to produce
benefits to the public, such as greater convenience,
increased competition, or gains in efficiency, that
outweigh possible adverse effects, such as undue
concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking
practices." 12 U.S.C. § 1843(c)(8).
Applicant and Company have substantial experience in trading bank-eligible securities and related
derivative products. Company currently engages in a
significant volume of dealing in U.S. government
securities for its own account, and has broad experience in trading and monitoring bank-eligible securities
positions. Company has gained substantial experience
in trading derivative products based on bank-eligible
securities through its use of such instruments to reduce risks arising from its cash positions in U.S.
government securities and money market instruments.
Moreover, Applicant has extensive, worldwide experience in trading futures, options, and options on
futures contracts with respect to U.S. and Japanese
government securities and money market instruments.
The Board has carefully reviewed the operational,
accounting, and risk management policies and systems
proposed to be implemented by Company in conducting and monitoring the proposed activities. These
policies and systems are currently in place and have
been used in connection with Company's existing
5. The Board also has indicated that trading in such derivative
instruments for risk-reduction purposes is a permissible activity for
bank holding companies and their subsidiaries. See 12 C.F.R.
225.142.
6. See 12 U.S.C. § 24(7) and 335. The instruments proposed to be
traded by Company for purposes other than hedging, and the exchanges and markets on which these activities would be conducted,
are identical to those approved in Swiss Bank.
149
securities dealing business and related derivatives
activities, and should assist in minimizing the likelihood of significant losses that could result from the
activities that are the subject of this application.
For example, Company has instituted internal controls to restrict the credit risk, market risk, and operations risk associated with futures and options trading.
Company's board of directors has established a credit
committee that determines counterparty credit exposure limits. These credit risk limits are reviewed
periodically by the credit committee and board of
directors, and by Applicant's Credit Supervision Division in Tokyo. Broker selection procedures also are
established by the board of directors. Business cannot
begin with a new broker without the prior approval of
the credit committee, which reviews a potential broker's capital adequacy, general financial condition,
management, and other matters, and sets and periodically reviews dealing limits for each broker to minimize settlement risk. Applicant's Credit Supervision
Division reviews all brokers selected by Company.
Market risk is controlled by imposing limits on
Company's gross long and short positions for each
contract, and on gross and net positions (on a riskadjusted basis) for the portfolio as a whole. In addition, trading limits restrict each trader's authority to
open or close a position. These position and trading
limits are approved by Company's board of directors
and set forth in Company's Internal Rules for Trading.
Company's board of directors has established "loss
cut" rules, which apply to Company's trading activities as a whole. These rules, which are substantially
equivalent to stop loss limitations, are triggered whenever position losses reach specified limits, and require
that positions be liquidated or reduced to prevent the
accumulation of substantial losses in the portfolio.
Company has established both daily and monthly loss
cut rules. The Board also notes that Company would
use the instruments listed in Appendix B to hedge the
market risk resulting from the proposed activities.
Operations risk, similarly, is mitigated by comprehensive review and monitoring procedures, including
independent verification of trade data and compliance
with trading limits, as well as the hiring of experienced
operations staff and the implementation of detailed
recordkeeping procedures and systems. Monitoring
and enforcement of Company's risk management policies and procedures is facilitated by sophisticated
computer systems that report all positions and approximate profit and loss figures, as well as information
regarding compliance with credit, position, trading,
and loss cut limits, on a real-time basis.
Senior management and internal auditing personnel
will be closely involved with the conduct of the
proposed derivatives trading activities. As noted pre-
150 Federal Reserve Bulletin • February 1994
viously, the credit committee and board of directors,
as well as other members of senior management, play
a central role in establishing the parameters of the
trading operation, including with respect to setting
credit, position, and trading limits and loss cut rules,
and the selection and approval of brokers and counterparties. In addition, Company's chief trader will
oversee directly all of the proposed trading activities,
and will review all positions on a daily basis with
senior management. Company's computer systems
will generate daily reports of futures and options
positions for approval by senior management and
Company's chief compliance officer. The operations
staff will independently monitor all futures and options
transactions and counterparty exposure.
The Board also notes that Company intends to
engage in the proposed activities for a limited range of
purposes, and does not propose to trade in derivative
products trading for speculative purposes.7 The size of
the proposed derivatives trading operation appears
reasonable in relation to Company's government securities business. As a registered broker-dealer, Company will be required to comply with the SEC's net
capital rule.8 The Board has relied upon the fact that
Company's proposed loss cut limits and procedures
should help to ensure that any losses that might result
from the proposed activities are small in relation to the
total capital of Company and of Applicant.9
The Board also expects that Company's engaging in
the proposed activities de novo would enhance market
competition and provide greater convenience to Company's customers. Applicant also maintains that con7. Applicant has indicated that the proposed trading activities will
be integrated with Company's government securities trading operation, and will not function as an independent unit seeking separate
profits solely from the options and futures markets. Applicant also has
committed that Company will not act as a specialist or market-maker
with respect to these instruments.
8. See 15 C.F.R. 240.15c3-l.
9. Applicant engages in the United States in futures commission
merchant activities and related advisory services with respect to
certain of the instruments proposed to be traded by Company. In
order to minimize any potential conflicts of interests that could result
from the related activities of Company and DKB Futures, Applicant
has committed that DKB Futures will disclose to its customers its
alfiliate relationship with Company, and the fact that Company trades
futures, options, and options on futures contracts for its own account.
This disclosure will occur both at the beginning of the customer
relationship and upon confirmation of any order. In addition, Applicant has committed that DKB Futures will not share non-public
customer information with Company without the express written
consent of the customer, and that in any case in which DKB Futures
knowingly executes a transaction to which Company is a party, it will
make prior disclosure of that fact to its customer and obtain the
customer's prior consent to the arrangement. These commitments are
similar to commitments relied upon by the Board in similar previous
cases. See, e.g., The Long-Term Credit Bank of Japan, Limited, 79
Federal Reserve Bulletin 347, 348 n.13, n.14 (1993); The Sanwa Bank,
Limited, 77 Federal Reserve Bulletin 64, 67 n.12 (1991); The Hongkong and Shanghai Banking Corporation, et al., 76 Federal Reserve
Bulletin 770, 771 n.9, 772 n.10 (1990).
summation of the proposal would increase market
liquidity and enable Company to operate more efficiently in its government securities business.
On the basis of the foregoing and all the other facts
of record, the Board has concluded that the balance of
public interest factors it is required to consider under
section 4(c)(8) of the BHC Act is favorable, and
therefore that the proposed derivatives trading activities constitute a proper incident to banking within the
meaning of the BHC Act. In making this determination, the Board has considered the financial and managerial resources of Applicant and its subsidiaries,
including Company, and the effect of this proposal
upon such resources, and has concluded that these
factors are consistent with approval of this application.10 In this regard, the Board has noted that Applicant's capital ratios satisfy applicable risk-based standards established under the Basle Accord, and are
considered equivalent to the capital levels that would
be required of a U.S. banking organization. The Board
specifically has considered the size of the investment
expected to be required by this proposal, and the
projected volume of Company's proposed derivatives
trading activities, in relation to Applicant's consolidated capital.
Based on all the facts of record, including all the
representations and commitments made by Applicant
in this case, the Board has determined that the application should be, and hereby is, approved. The
Board's approval is specifically conditioned on compliance with all of the commitments made in connection with this application and with the conditions
referred to in this order. The Board's determination
also is subject to all of the conditions set forth in
Regulation Y, including those in sections 225.4(d) and
225.23(b) of Regulation Y, and to the Board's authority to require such modification or termination of the
activities of a bank holding company or any of its
subsidiaries as the Board finds necessary to ensure
compliance with, and to prevent evasion of, the provisions of the BHC Act and the Board's regulations
and orders issued thereunder. For purposes of this
action, these commitments and conditions are deemed
to be conditions imposed in writing by the Board in
connection with its findings and decision, and, as such,
may be enforced in proceedings under applicable law.
This transaction shall not be consummated later
than three months after the effective date of this order,
unless such period is extended for good cause by the
Board or by the Federal Reserve Bank of San Francisco, acting pursuant to delegated authority.
10. See 12 C.F.R. 225.24. See also The Fuji Bank, Limited, 75
Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73
Federal Reserve Bulletin 155 (1987).
Legal Developments
By order of the Board of Governors, effective
December 13, 1993.
Voting for this action: Vice Chairman Mullins and Governors Angell, Kelley, LaWare, Lindsey, and Phillips. Absent
and not voting: Chairman Greenspan.
J E N N I F E R J . JOHNSON
Associate Secretary of the Board
Chicago Board of Trade
U.S. Treasury Bond Futures
U.S. Treasury Two-Year, Five-Year, and Ten-Year
Note Futures
30-Day Interest Rate Futures
The Bond Buyer Municipal Bond Index Futures, and
Options thereon
Appendix A
Chicago Mercantile Exchange
Company proposes to trade for its own account in the
following derivative instruments traded on the following exchanges and markets:
Eurodollar Futures
U.S. Treasury Bill Futures
30-Day LIBOR Futures
Chicago Board of Trade
New York Commodities Exchange
Options on U.S. Treasury Bond Futures
Options on Two-Year, Five-Year, and Ten-Year U.S.
Treasury Note Futures
Five Year Treasury Note Futures
U.S. Two Year Treasury Note Futures
Chicago Mercantile Exchange
Options on Eurodollar Futures
Options on U.S. Treasury Bill Futures
Options on 30-day LIBOR Futures
Chicago Board Options Exchange
Options on 30-Year U.S. Treasury Bonds Specific
Issues
Options on 5-Year U.S. Treasury Notes Specific
Issues
Options on Short Term Treasury Index
Options on Long Term Treasury Index
New York Commodities Exchange
Options on Five Year Treasury Note Futures
London International Financial Futures Exchange
Options on Eurodollar Futures
Options on U.S. Treasury Bond Futures
151
London International Financial Futures Exchange
Eurodollar Futures
U.S. Treasury Bond Futures
Singapore International Monetary Exchange
Eurodollar Futures
J.P. Morgan & Co. Incorporated
New York, New York
Order Approving an Application to Engage in
Futures Commission Merchant Activities
J.P. Morgan & Co. Incorporated ("Applicant"), a
bank holding company within the meaning of the Bank
Holding Company Act ("BHC Act"), has applied
under section 4(c)(8) of the BHC Act (12 U.S.C.
§ 1843(c)(8)), and section 225.23 of the Board's Regulation Y (12 C.F.R. 225.23), to provide futures commission merchant ("FCM") execution, clearance, and
advisory services to unaffiliated customers with respect to futures and options on futures on non-financial commodities.1 Neither JPMFI nor JPMSI would
Over-the-Counter Market
Options on U.S. Treasury Bills, Notes, and Bonds
Appendix B
Company would hedge its positions in the contracts
listed in Appendix A through the purchase of the
following exchange-traded contracts:
1. Applicant proposes to conduct these FCM activities through two
wholly owned subsidiaries, J.P. Morgan Futures, Inc. ("JPMFI"),
and J.P. Morgan Securities, Inc. ("JPMSI"), both located in New
York, New York, and would conduct the proposed activities on the
New York Mercantile Exchange ("NYMEX"), and the Singapore
International Monetary Exchange Limited ("SIMEX"). Applicant
proposes initially to broker futures and options on futures on fuel oil,
gas oil, crude oil, heating oil, gasoline, propane, and natural gas. A
complete list of the proposed contracts is set forth in the Appendix.
Applicant must provide at least 20 days prior written notice to the
Federal Reserve System before:
152
Federal Reserve Bulletin • February 1994
trade in the proposed derivative instruments for their
own accounts for any purpose, or would trade in the
physical commodities themselves, except when necessary to assist in the orderly resolution of an account.2
JPMFI and JPMSI would provide the proposed FCM
services only to institutional customers and natural
persons whose individual net worth (or joint net worth
(i) Engaging in FCM activities with respect to additional exchange-traded derivative contracts on agricultural, energy, or
non-precious metal commodities (unless the Board has approved
the contracts for any other bank holding company under the BHC
Act) to assure that such contracts are comparable to previously
approved contracts; or
(ii) Becoming a clearing or non-clearing member of any commodities exchange that previously has been reviewed and approved
by the Board under the BHC Act.
Applicant must obtain Board approval before becoming a clearing
or non-clearing member of any commodities exchange that has not
been reviewed and approved by the Board under the BHC Act. JPMFI
and JPMSI may each conduct FCM activities through omnibus trading
accounts established in their own names with clearing members of
exchanges on which JPMFI or JPMSI would not themselves be
clearing members. 79 Federal Reserve Bulletin 723, 724 (1993)
("Northern Trust"). Applicant has committed that, with respect to
their omnibus account customers, JPMFI and JPMSI will employ the
same credit approval and risk management procedures developed for
their respective executing and clearing activities.
Applicant also proposes to provide execution-only and clearingonly services to customers pursuant to customer agreements and
"give-up agreements" that would afford the clearing FCM the right to
refuse to clear customer trades that the clearing FCM reasonably
deems unsuitable in light of market conditions or a customer's
financial situation or objectives. These activities have been approved
by the Board. See Northern Trust; The Sakura Bank, Limited, 79
Federal Reserve Bulletin 728 (1993) {"Sakura"). JPMFI and JPMSI
would each conduct its proposed execution-only and clearing-only
activities in a manner largely consistent with Northern Trust and
Sakura. In this regard, Applicant has committed that neither JPMFI
nor JPMSI will serve as the primary or qualifying clearing firm for any
unaffiliated parties.
Applicant's proposal, however, differs from the proposals approved
in Northern Trust and Sakura in some respects. JPMFI and JPMSI
will not subject their execution-only customers to the same formal
credit review procedures to which their execution-and-clearing and
clearing-only customers are subject, in view of the reduced credit
exposures and levels of risk that Applicant believes are involved in
execution-only activities compared to execution-and-clearing activities and clearing-only activities. Neither JPMFI nor JPMSI would
accept a client as an execution-only customer unless the company's
senior management is satisfied that the acceptance of the client as an
execution-only customer would not subject the company to unacceptable levels of credit risk based on:
(i) The market reputation of the client (or its advisor), or the
senior management's general knowledge of the creditworthiness
of the client; and
(ii) The market reputation of the client's give-up clearing firm.
The FCMs that would execute customer trades that JPMFI or
JPMSI would clear pursuant to give-up agreements would not
necessarily be independent from the customer.
2. In those circumstances when a customer defaults on a contract
after the contract expires and JPMFI or JPMSI is required to make or
take delivery of the underlying commodity, or where JPMFI or JPMSI
exercises its rights to liquidate a customer's account, the company is
permitted to take those actions necessary to mitigate its damages,
including acting for its own account in retendering or redelivering the
commodity, entering into an exchange-for-physical transaction, or
entering into an offsetting transaction in the cash market, provided
these or other appropriate actions are taken as soon as commercially
practicable.
with spouse) exceeds $1 million.3 Neither JPMFI nor
JPMSI would provide such services to retail brokerage
customers or locals. However, JPMFI and JPMSI
proposes to provide FCM execution, clearance, and
advisory services for non-financial commodity derivatives to market makers.4
Notice of the application, affording interested persons an opportunity to submit comments on the proposal, has been published (58 Federal Register 34,054,
51,349 (1993)). The time for filing comments has expired, and the Board has considered the application
and all comments received in light of the public
interest factors set forth in section 4(c)(8) of the BHC
Act.
Applicant, with total consolidated assets of
$129.3 billion, is the fifth largest commercial banking
organization in the United States, and engages directly
and through subsidiaries in a broad range of permissible nonbanking activities.5 JPMFI6 and JPMSI7 are
both FCMs registered with the CFTC, are both members of the NFA, and are, therefore, both subject to
the recordkeeping, reporting, fiduciary standards, and
other requirements of the Commodity Exchange Act
(7 U.S.C. § 1 et seq.), the CFTC, and the NFA. 8 In
3. Applicant anticipates that, following consummation of the proposal, a relatively small percentage of JPMFI's and JPMSI's respective businesses would be conducted on behalf of managed commodity
funds (or commodity pools), which are regulated and supervised by
the Commodity Futures Trading Commission ("CFTC") and the
National Futures Association ("NFA"). None of JPMFI's or JPMSI's
managed commodity fund customers would be owned or sponsored
by, or otherwise affiliated with, Applicant. Applicant, JPMFI, and
JPMSI will not act as a commodity pool operator without prior Board
approval. However, JPMFI and JPMSI may provide FCM investment
advisory services to commodity pools. Both JPMFI and JPMSI will
apply their credit approval procedures to their respective managed
commodity fund customers. Applicant has committed to provide the
Federal Reserve System with prior notice of any material change in
the characteristics of JPMFI's or JPMSI's customer base.
4. Applicant states that certain of its customers may become market
makers in new financial contracts in order to facilitate the introduction
of the contracts, or to assist in the ongoing trading of the contracts.
5. Data are as of September 30, 1993.
6. JPMFI, formerly Morgan Futures Corporation, is a clearing
member of the NYMEX, the SIMEX, the Commodity Exchange,
Inc., the Chicago Board of Trade, and the Chicago Mercantile
Exchange ("CME"), and is currently engaged in executing and
clearing on major commodities exchanges futures and options on
futures on financial commodities and certain broad-based and widely
traded stock and bond indices. See J.P. Morgan & Co. Incorporated,
71 Federal Reserve Bulletin 251 (1985); J.P. Morgan & Co. Incorporated, 70 Federal Reserve Bulletin 780 (1984); J.P. Morgan & Co.
Incorporated, 69 Federal Reserve Bulletin 733 (1983); J.P. Morgan &
Co. Incorporated, 68 Federal Reserve Bulletin 514 (1982).
7. JPMSI is currently engaged in limited bank-ineligible securities
underwriting and dealing activities permissible under section 20 of the
Glass-Steagall Act (12 U.S.C. § 377). See J.P. Morgan & Co. Incorporated, et al., 75 Federal Reserve Bulletin 192 (1989), ajfd sub nom.
Securities Industries Ass'n v. Board of Governors of the Federal
Reserve System, 900 F.2d 360 (D.C. Cir. 1990).
8. JPMSI is a member of the New York Stock Exchange Inc., the
American Stock Exchange Inc., and the Chicago Stock Exchange. In
connection with this proposal, Applicant intends to transfer to JPMSI
all of JPMFI's FCM activities except for JPMFI's clearing activities
Legal Developments
addition, JPMSI is, and will continue to be, a brokerdealer registered with the Securities and Exchange
Commission ("SEC"), and a member of the National
Association of Securities Dealers, Inc. ("NASD").
Accordingly, JPMSI is subject to the recordkeeping,
reporting, fiduciary standards, and other requirements
of the Securities Exchange Act of 1934 (15 U.S.C.
§ 78a et seq.), the SEC, and the NASD.
FCM Activities
The Board has determined that executing and clearing
futures and options on futures on non-financial commodities are activities closely related to banking for
purposes of the BHC Act, and thus activities permissible for bank holding companies.9 The Board also has
permitted bank holding companies to provide, on a
stand-alone basis, investment advice with respect to
trading futures and options on futures on non-financial
commodities.10 Moreover, the Board has allowed bank
holding companies to provide a combination of execution and clearing services and investment advisory
services in connection with executing and clearing
exchange-traded derivatives of financial commodities
(e.g., futures and options on futures on foreign exchange, bullion, government securities, and money
market instruments).11 Based on all the facts of record,
the Board has determined that the proposed activities,
including providing a combination of advisory services
regarding nonfinancial commodity derivatives and acting as an FCM in the execution and clearance of these
derivatives, are closely related to banking within the
meaning of section 4 of the BHC Act.
on the SIMEX and the CME. After the transfer, JPMSI would ofifer its
U.S. clients direct access to the overseas trading desks of Edge Act
subsidiaries of Morgan Guaranty Trust Company of New York
("Morgan Guaranty"). Employees of these Edge Act subsidiaries
would act as agent for JPMSI in selling derivative instruments, and
would become employees of JPMSI for the limited purpose of
permitting these employees to become registered with the Commodity
Futures Trading Commission in connection with this activity. These
employees would not sell securities in the U.S., and JPMSI would not
sponsor the employees to be licensed to sell securities in the U.S.
JPMSI also will utilize the GLOBEX trading system, an after-hours
international multi-exchange derivatives trading system. Because
JPMSI will not operate a 24-hour sales desk in the U.S., JPMSI will
pass its book of client GLOBEX orders to a London Edge Act
subsidiary of Morgan Guaranty, which will execute the GLOBEX
orders of JPMSI's U.S. customers.
9. See Bank of Montreal, 79 Federal Reserve Bulletin 1049 (1993).
10. See Swiss Bank Corporation, 77 Federal Reserve Bulletin 126
(1991).
11. See, e.g., Citicorp, 68 Federal Reserve Bulletin 776 (1982).
153
Financial Factors, Managerial Resources, and Other
Considerations
In order to approve this application, the Board must
determine 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. In this
regard, in every case under section 4 of the BHC Act,
the Board must consider the financial condition and
resources of the applicant and its subsidiaries and the
effect of the proposal on these resources.12 Based on
the facts of this case, the Board concludes that the
financial considerations are consistent with approval
of this application. The managerial resources of Applicant also are consistent with approval.
The Board expects that the de novo entry of Applicant into the market for the proposed services in the
United States would provide added convenience to
Applicant's customers, and would increase the level of
competition among existing providers of these services. To address the potential adverse effects of the
proposed activities, Applicant has committed to conduct the proposed activities subject to the same rules
and procedures imposed by the Board on FCM activities in derivatives of financial commodities.13 In addition, in order to minimize risks associated with the
delivery of non-financial commodities, Applicant has
committed to take a number of steps in the event one
of Company's customers has an open position in a
contract after the contract has expired, and the customer is unable or unwilling to make or take delivery.14
Based on the commitments made by Applicant
regarding its conduct of the proposed activities, the
limitations on the activities noted in this order, and all
the facts of record, the Board has determined that the
performance of the proposed activities by Applicant
could reasonably be expected to produce public benefits that would outweigh the possible adverse effects
12. 12 C.F.R. 225.24; The Fuji Bank, Limited, 75 Federal Reserve
Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal Reserve
Bulletin 155 (1987).
13. See 12 C.F.R. 225.25(b)(18). Applicant also has committed that
Company will not enter into any impermissible tying arrangements
with any lending affiliates, and that all customer trading positions of
JPMFI and JPMSI will be marked to market at least daily.
14. Among the steps Applicant will take are:
(1) retendering the commodity;
(2) offsetting the customer's open position through an exchange-forphysical transaction;
(3) offsetting the commodity in the cash market; and
(4) seeking to avoid delivery through some other mechanism. See
Bank of Montreal, 79 Federal Reserve Bulletin 1049, 1052 n.21
(1993).
154
Federal Reserve Bulletin • February 1994
under the proper incident to banking standard of
section 4(c)(8) of the BHC Act.
Based on the foregoing and all the facts of record,
the Board has determined to, and hereby does, approve the application subject to all the terms and
conditions set forth in this order, and in the above
noted Board regulations and orders that relate to these
activities.15 The Board's determination is also subject
to all of the terms and 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. The Board's decision is specifically conditioned on compliance with all of the commitments
made in this application, including the commitments
discussed in this order and the conditions set forth in
this order and in the above-noted Board regulations
and orders. These commitments and conditions shall
be deemed to be conditions imposed in writing by the
Board in connection with its findings and decisions,
and 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 New York,
pursuant to delegated authority.
By order of the Board of Governors, effective
December 23, 1993.
Voting for this action: Chairman Greenspan, Vice Chairman Mullins, and Governors Kelley, Lindsey, and Phillips.
Absent and not voting: Governors Angell and La Ware.
J E N N I F E R J . JOHNSON
Associate Secretary of the Board
Appendix
New York Mercantile Exchange:
Light Sweet Crude Oil futures
Options on Light Sweet Crude Oil futures
Sour Crude Oil futures
Gulf Coast Unleaded Gasoline futures
New York Harbor Unleaded Gasoline futures
15. The Board also considered Applicant's request for prior approval for certain foreign subsidiaries of Morgan Guaranty to market
the securities and underwriting services of JPMSI overseas. The
Board has approved this request by a separate letter.
Options on New York Harbor Unleaded Gasoline
futures
Heating Oil futures
Options on Heating Oil futures
Propane futures
Natural Gas futures
Options on Natural Gas futures
Singapore International Monetary Exchange
Limited:
High Sulphur Fuel Oil futures
Gas Oil futures
NationsBank Corporation
Charlotte, North Carolina
Order Approving Application to Engage in Certain
Nonbanking Activities
NationsBank Corporation, Charlotte, North Carolina
("NationsBank"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC
Act"), has applied under section 4(c)(8) of the BHC
Act (12 U.S.C. § 1843(c)(8)) and section 225.23(a) of
the Board's Regulation Y (12 C.F.R. 225.23(a)),
through its wholly owned subsidiary, Nations Financial Capital Corporation, Stamford, Connecticut
("Company"), to acquire substantially all the assets
and assume certain of the liabilities of US WEST
Financial Services, Inc., Stamford, Connecticut ("Financial Services"), and to engage in the following
nonbanking activities:
(1) Making, acquiring, and servicing loans and other
extensions of credit, pursuant to section 225.25(b)(1)
of Regulation Y;1
(2) Leasing personal and real property, pursuant to
sections 225.25(b)(5)(i) and (ii) of Regulation Y; and
(3) Credit-related insurance activities, pursuant to
sections 225.25(b)(8)(i) and (ii) of Regulation Y.
NationsBank proposes to conduct these activities
throughout the United States.
Notice of the application, affording interested persons an opportunity to submit comments on the pro1. In particular, NationsBank proposes that Company continue to
engage in the following lines of business currently conducted by
Financial Services: corporate finance; commercial real estate finance;
special industries finance; mortgage investments; consumer finance;
project finance; and portfolio management. In connection with these
activities, Financial Services also purchases and holds for investment
purposes various corporate debt and mortgage-backed securities.
NationsBank has stated that Company will not engage in any underwriting, dealing, brokerage, private placement, "riskless principal",
or similar activities with respect to such corporate and mortgagebacked securities.
Legal Developments
posal, has been published (58 Federal Register 47,457
(1993)). The time forfilingcomments 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.
NationsBank, with total consolidated assets of
$158 billion, is the third largest commercial banking
organization in the United States, and operates bank
subsidiaries in North Carolina, Texas, Georgia, Virginia, Maryland, the District of Columbia, Tennessee,
Kentucky, Florida, South Carolina, and Delaware.2
NationsBank engages through its subsidiaries in a
broad range of banking and permissible nonbanking
activities. Company is a newly established corporation
formed for the purpose of this transaction.3
The Board has previously determined by regulation
that, subject to the limitations established by Regulation Y, Company's proposed credit, leasing, and insurance activities are closely related to banking within
the meaning of the BHC Act, and therefore permissible for bank holding companies.4 NationsBank has
committed that these proposed activities will be conducted in conformity with the limitations established
by Regulation Y.5 Accordingly, the Board has concluded that these proposed activities are closely related to banking.6
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
2. Asset data are as of October 1, 1993.
3. Company currently has no assets or operations, and is owned by
NationsBank indirectly through Nations Financial Holding Corporation.
4. NationsBank has proposed that Company provide substantial
senior and subordinated debt financing to certain companies together
with warrants exercisable for up to 24.9 percent of the borrower's
voting shares. NationsBank has made a number of commitments
governing these investments, including that Company would own no
equity in any of these borrowers, and that the proposed subordinated
debt would not be convertible into equity. Company would have no
agreement to acquire the borrower, and would have no director or
employee interlocks with the borrower. In general, the warrants
would not be exercisable by Company without prior Board approval,
and could be transferred only in a manner approved by the Board. See
Policy Statement on Nonvoting Equity Investments by Bank Holding
Companies (12 C.F.R. 225.143). On the basis of these and other
limitations proposed by NationsBank, and all the facts of record, the
Board has determined that the structure and terms of the proposed
transactions appear consistent with the BHC Act.
5. See 12 C.F.R. 225.25(b)(1) (making, acquiring, and servicing
loans and other extensions of credit); 12 C.F.R 225.25(b)(5) (leasing of
real and personal property); and 12 C.F.R. 225.25(b)(8)(i) and (ii)
(certain credit-related insurance activities).
6. Certain of the assets proposed to be acquired from Financial
Services are not permissible for bank holding companies under section
4 of the BHC Act. In general, these impermissible assets consist of
stock, or unrestricted warrants exercisable for stock, representing
more than 5 percent of the voting shares of companies whose activities
are not closely related to banking. NationsBank has committed that
within two years following the date of this order, it will either dispose
of these assets or conform their terms and amounts to those permissible for bank holding companies.
155
resources of the applicant and its subsidiaries and the
effect of the transaction on those resources.7 Based on
all the facts of record, the Board has concluded that
financial and managerial considerations are consistent
with approval of this proposal.
In order to approve this application, the Board also
must determine that the performance of the proposed
activities by Company 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. In this
regard, the Board expects that Company's conduct of
the proposed activities would provide added convenience and services to NationsBank's customers. NationsBank also maintains that consummation of the
proposal would preserve the level of competition
among existing providers of these services, and would
increase the availability of credit, in markets currently
served by Financial Services. Moreover, 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.
Accordingly, the Board has concluded that the performance of the proposed activities by Company 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.
On the basis of the foregoing and all the facts of
record, including the commitments furnished by NationsBank, the Board has determined that the application should be, and hereby is, approved. The Board's
approval is specifically conditioned upon compliance
with the commitments made in connection with this
application and with the conditions referred to in this
order. The Board's determination also is subject to all
the terms and conditions set forth in Regulation Y,
including those in sections 225.4(d) and 225.23(b) of
Regulation Y, and to the Board's authority to require
such modification or termination of the activities of a
bank holding company or any of its subsidiaries as the
Board finds necessary to ensure compliance with, and
to prevent evasion of, the provisions of the BHC Act
and the Board's regulations and orders issued thereunder. For purposes of this action, these commitments
and conditions are deemed to be conditions imposed in
writing by the Board in connection with its findings
and decision, and, as such, may be enforced in proceedings under applicable law.
7. See 12 C.F.R. 225.24. See also The Fuji Bank, Limited, 75
Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73
Federal Reserve Bulletin 155 (1987).
156
Federal Reserve Bulletin • February 1994
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 Richmond,
acting pursuant to delegated authority.
By order of the Board of Governors, effective
December 6, 1993.
Voting for this action: Chairman Greenspan, Vice Chairman Mullins, and Governors Kelley, LaWare, Lindsey, and
Phillips. Absent and not voting: Governor Angell.
JENNIFER J . JOHNSON
Associate Secretary of the Board
Societe Generale
Paris, France
Order Approving an Application to Engage in
Full-Service Brokerage Activities and Dealing in
Government Obligations and Money Market
Instruments
Societe Generale, Paris, France ("Applicant"), a foreign bank subject to the provisions of the Bank Holding Company Act ("BHC Act"), has applied for the
Board's approval under section 4(c)(8) of the BHC Act
(12 U.S.C. § 1843(c)(8)) and section 225.23 of the
Board's Regulation Y (12 C.F.R. 225.23), to engage
de novo, domestically and internationally, through its
wholly owned indirect subsidiary, FIMAT Futures
USA, Inc., Chicago, Illinois ("Company"), 1 in the
following securities-related activities:
(1) Executing without clearing, executing and clearing, and providing investment advisory services
with regard to exchange-traded derivative securities, such as foreign currency options and stock
index options, that are subject to regulation by the
Securities and Exchange Commission ("SEC");
(2) Providing securities brokerage and investment
advisory services, both separately and on a combined basis, with respect to:
(a) Obligations of the United States government
and its agencies, general obligations of the
various states and their political subdivisions,
other exempted securities, and options thereon;
(b) Registered and unregistered securities issued by foreign governments that are full members of the Organization for Economic Cooperation and Development, and options thereon;
and
1. Company is wholly owned by FIMAT International, Paris,
France, a wholly owned subsidiary of Applicant. Company also
maintains an office in New York, New York.
(c) Over-the-counter securities, such as stock
index options and money market instrument
options, that are subject to regulation by the
SEC; and
(3) Buying and selling on the order of investors as a
"riskless principal" obligations of the United States
government, general obligations of the various
states and their political subdivisions, and other
obligations that state member banks of the Federal
Reserve System may be authorized to underwrite
and deal in under 12 U.S.C. § 24 and 335 ("bankeligible securities").2
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 32,135 (1993)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the public interest factors set forth in
section 4(c)(8) of the BHC Act.
Applicant, with total consolidated assets equivalent
to approximately $257.3 billion, is the 19th largest
bank in the world, and the fourth largest commercial
banking organization in France.3 In the United States,
Applicant operates branches in New York, New York,
Chicago, Illinois, and Los Angeles, California; an
agency in Dallas, Texas; and representative offices in
Houston, Texas, and San Francisco, California. Applicant engages, both directly and through subsidiaries, in a variety of permissible nonbanking activities in
the United States.
Company is a futures commission merchant registered with the Commodity Futures Trading Commission ("CFTC") and a member of the National Futures
Association ("NFA"), and is, therefore, subject to the
recordkeeping, reporting, fiduciary standards, and
other requirements of the Commodity Exchange Act
(7 U.S.C. § 1 et seq.), the CFTC, and the NFA.
Company also intends to register as a broker-dealer
with the Securities and Exchange Commission
("SEC"), and to seek admission to the National
Association of Securities Dealers Inc. ("NASD").
Upon such registration with the SEC and admission to
the NASD, Company would be subject to the recordkeeping, reporting, fiduciary standards, and other requirements of the Securities Exchange Act of 1934
(15 U.S.C. § 78a et seq.), the SEC, and the NASD.
2. Company's investment advisory services will be furnished primarily to financially sophisticated customers, including pension fund
managers, corporate treasurers, banks, insurance companies, offshore
and onshore investment companies, hedge funds, and other types of
institutional money managers.
3. Data are as of December 31, 1992.
Legal Developments
The Board previously has determined, by regulation, that the proposed activities are closely related to
banking under section 4(c)(8) of the BHC Act. The
execution, clearance, and brokerage of securities,
either on a stand-alone basis or in combination with
the provision of investment advisory services, is authorized by sections 225.25(b)(4) and (15) of Regulation Y (12 C.F.R. 225.25(b)(4) and (15)). Buying and
selling bank-eligible securities on the order of investors as a "riskless principal" is a permissible activity
pursuant to the dealing authority of section
225.25(b)(16)
of
Regulation
Y
(12 C.F.R.
225.25(b)(16)). Applicant has committed that Company will engage in the proposed activities in accordance with all the conditions and limitations placed on
those activities as set forth in Regulation Y.4
In order to approve this application, the Board also
must determine 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. Under the
framework established in Regulation Y and prior
Board 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. The Board expects that the de novo
entry of Applicant into the market for the proposed
services in the United States would provide added
convenience to Applicant's customers, and would
increase the level of competition among existing providers of these services. Accordingly, the Board has
determined that the performance of the proposed
activities by Applicant could reasonably be expected
to produce public benefits that would outweigh possible adverse effects under the proper incident to banking standard of section 4(c)(8) of the BHC Act.
On the basis of the foregoing and all the facts of
record, the Board has determined to, and hereby does,
approve the application subject to all the terms and
conditions set forth in this order. The Board's determination is also subject to all the terms and conditions
set forth in Regulation Y, including those in sections
225.4(d), 225.23(b), 225.25(b)(4), 225.25(b)(15) and
225.25(b)(16), 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 there-
4. Company does not propose to underwrite or act as a principal
with respect to bank-eligible securities.
157
under. The Board's decision is specifically conditioned
on compliance with all the commitments made in
connection with this application, including the commitments discussed in this order and the conditions set
forth in this order and in the above noted Board
regulations and orders. These commitments and conditions shall be deemed to be conditions imposed in
writing by the Board in connection with its findings
and decisions, and 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 New York
acting pursuant to delegated authority.
By order of the Board of Governors, effective
December 16, 1993.
Voting for this action: Vice Chairman Mullins and Governors Angell, Kelley, LaWare, Lindsey, and Phillips. Absent
and not voting: Chairman Greenspan.
J E N N I F E R J . JOHNSON
Associate Secretary of the Board
The Sumitomo Bank, Limited
Osaka, Japan
Order Approving an Application to Engage in
Foreign Exchange Advisory and Transactional
Activities
The Sumitomo Bank, Limited, Osaka, Japan ("Applicant"), a bank holding company within the meaning of
the Bank Holding Company Act ("BHC Act"), has
applied under section 4(c)(8) of the BHC Act
(12 U.S.C. § 1843(c)(8)), and section 225.23 of the
Board's Regulation Y (12 C.F.R. 225.23), to engage
through its wholly owned subsidiary, Sumitomo Bank
Capital Markets, Inc., New York, New York ("Company"), in providing foreign exchange advisory and
transactional services ("FX services") pursuant to
section 225.25(b)(17) of the Board's Regulation Y
(12 C.F.R. 225.25(b)(17)).i Company currently engages in commercial lending and personal and real
property leasing activities, brokers and deals in interest rate and currency swaps and swap-derivative products, and acts as a market maker in foreign currencies.
1. These services are providing, by any means, general information
and statistical forecasting with respect to foreign markets; advisory
services designed to assist customers in monitoring, evaluating, and
managing their foreign exchange exposures; and transactional services with respect to foreign exchange by arranging for "swaps"
among customers with complementary foreign exchange exposures
and for the execution of foreign exchange transactions.
158
Federal Reserve Bulletin • February 1994
Notice of the application, affording interested persons an opportunity to submit comments on the proposal, has been published (58 Federal Register 33,444
(1993)). The time for filing comments has expired, and
the Board has considered the application and all
comments received in light of the public interest
factors set forth in section 4(c)(8) of the BHC Act.
Applicant, with total consolidated assets of
$481.6 billion, is the third largest banking organization
in Japan and in the world.2 Applicant controls banks in
California and Hawaii, and operates branches in San
Francisco and Los Angeles, California; Chicago, Illinois; and New York, New York. Applicant also operates agencies in Atlanta, Georgia; and Houston,
Texas. Applicant engages directly and through subsidiaries in a broad range of permissible nonbanking
activities.
The Board has previously determined that FX services are closely related to banking. See 12 C.F.R.
225.25(b)(17). The Board also is required to determine
that the performance of the proposed activities by
Applicant "can reasonably be expected to produce
benefits to the public, such as greater convenience,
increased competition, or gains in efficiency, that
outweigh possible adverse effects, such as undue
concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking
practices." 12 U.S.C. § 1843(c)(8).
Section 225.25(b)(17) of the Board's Regulation Y
permits a bank holding company to provide FX
services as long as the bank holding company conducts these activities in a separate subsidiary that
does not take positions in foreign exchange. Company has already been permitted to take positions in
foreign exchange, to a limited extent, in connection
with its currency swap activities. In 1989, the Board
permitted Company to act as a principal and broker
in interest rate and currency swaps and swap-derivative products, and to provide advice to institutional
customers on interest rate and currency swaps and
swap derivative products. 3 As part of its approved
currency swap activities, Company takes positions in
foreign currency, either as part of a matched swap
transaction or for the purpose of hedging any unmatched positions pending a suitable match, but does
not enter into unmatched or unhedged swaps or
currency positions for speculative purposes. Thus,
under the proposal, Company would be providing
foreign exchange advisory services while having a
2. Asset and ranking data are as of March 31, 1993.
3. The Sumitomo Bank, Limited, 75 Federal Reserve Bulletin 582
(1989).
position in foreign exchange by virtue of these swap
activities.4
The Board has, in very limited circumstances, permitted the same nonbanking subsidiary simultaneously
to conduct foreign exchange advisory services and to
take positions for the company's own account. The
Board has been concerned in these cases about the
potential conflicts of interests that may arise when
these activities are combined.5
Sumitomo has made a number of commitments to
address the potential conflicts of interests in this
proposal. In particular, Sumitomo has committed that
Company will disclose to each of its FX services
customers the fact that Company may take positions in
foreign exchange and thus have an interest in the
course of action ultimately chosen by the customer.
Moreover, in any case in which Company has an
interest in a specific transaction as an intermediary or
principal, Company will advise its customer of that
fact before recommending participation in that transaction. Further, Company will offer its FX services
only to sophisticated customers who would be unlikely
to place undue reliance on investment advice received,
and who would be better able to detect investment
advice motivated by self-interest. These commitments
and limitations on the customer base are similar to
those relied on by the Board in previous cases.
The Board also notes that Company's positiontaking activities in foreign exchange are limited to the
circumstances required by its swap activities, and that
Company does not engage in taking positions for its
own account for speculative purposes. Company also
will not engage in direct execution of foreign exchange
transactions as part of its FX services.
Based on the foregoing and all the facts of record,
the Board believes that these commitments address
the potential conflicts of interests that may result from
Sumitomo's proposal.
In every case under section 4 of the BHC Act, the
Board also must consider the financial condition and
resources of the applicant and its subsidiaries and the
effect of the proposal on these resources.6 Based on
the facts of this case, the Board concludes that the
financial considerations are consistent with approval
of this application. The managerial resources of Applicant also are consistent with approval.
4. Company will itself execute foreign exchange transactions only
for the positions it takes in connection with its swap activities.
5. See Final Rule, 49 Federal Register 794, 816 (1984); Hongkong
and Shanghai Banking Corporation, 69 Federal Reserve Bulletin 221,
223 (1983). See also The Bank of Tokyo, Ltd., 76 Federal Reserve
Bulletin 654 (1990); NationsBank Corporation, 79 Federal Reserve
Bulletin 892 (1993).
6. 12 C.F.R. 225.24; The Fuji Bank, Limited, 75 Federal Reserve
Bulletin 94 (1989); Bayerische Vereinsbank AG, 11 Federal Reserve
Bulletin 155 (1987).
Legal Developments
Consummation of the proposal as a whole would
provide added convenience to Applicant's and Company's customers. In addition, the Board expects
that the de novo entry of Company into the market
for the proposed services would increase the level of
competition among providers of these services. Consummation of this proposal subject to the terms and
conditions discussed in this order is not likely to
result in any significantly adverse effects. 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 potential adverse effects under the
proper incident to banking standard of section 4(c)(8)
of the BHC Act.
Based on the foregoing and other facts of record,
and subject to the commitments made by Applicant,
the Board has determined that the balance of public
interest factors it is required to consider under section 4(c)(8) is favorable. Accordingly, the Board has
determined that the application should be, and
hereby is, approved. This determination is subject to
all of the terms and 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. The Board's decision is
also specifically conditioned on compliance with all
of the commitments made in connection with this
application, including the commitments discussed in
this order and the conditions set forth in this order
and in the above-noted Board regulations. These
commitments and conditions shall be deemed to be
conditions imposed in writing by the Board in connection with its findings and decisions, and, as such,
may be enforced in proceedings under applicable
law.
This transaction shall not be consummated later
than three months after the effective date of this order,
unless such period is extended for good cause by the
Board or by the Federal Reserve Bank of San Francisco, pursuant to delegated authority.
By order of the Board of Governors, effective
December 22, 1993.
Voting for this action: Chairman Greenspan, Vice Chairman Mullins, and Governors Kelley, Lindsey, and Phillips.
Absent and not voting: Governors Angell and LaWare.
Orders Issued Under Sections 3 and 4 of the
Bank Holding Company Act
First National Bank Shares, Ltd.
Great Bend, Kansas
Order Approving Acquisition of Bank Holding
Company and General Insurance Agencies
First National Bank Shares, Ltd., Great Bend, Kansas
("First National"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC
Act"), has applied under section 3(a)(3) of the BHC
Act (12 U.S.C. § 1842(a)(3)) to acquire all the voting
shares of The Home State Building, Inc., Lewis,
Kansas ("Home State"), and thereby indirectly acquire all the voting shares of Home State Bank,
Kinsley, Kansas ("Home State Bank"). As part of this
proposal, First National also has applied under section
4(c)(8) of the BHC Act (12 U.S.C. § 1843(cX8)) to
acquire Lewis Insurance Service, Inc., Lewis, Kansas
("Lewis Insurance"), and thereby to engage in general
insurance agency activities in a small town that has a
population not exceeding 5,000, pursuant to section
225.25(b)(8)(iii) of the Board's Regulation Y
(12 C.F.R. 225.25(b)(8)(iii)).
Notice of the applications, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 48,067 (1993)). The
time for filing comments has expired, and the Board
has considered the applications and all comments
received in light of the factors set forth in the BHC
Act.
First National operates one subsidiary bank in Kansas. The principal shareholder of First National controls another bank holding company, which operates a
subsidiary bank in Missouri (collectively, the "Burcham Chain"). The Burcham Chain is the 52d largest
commercial banking organization in Kansas, controlling deposits of $84.1 million, representing less than
1 percent of total deposits in commercial banks in the
state.1 Home State is the 287th largest commercial
banking organization in Kansas, controlling deposits
of $15.8 million, representing less than 1 percent of
total deposits in commercial banks in the state. Upon
consummation of the proposed transaction, the Burcham Chain would become the 41st largest commercial
banking organization in Kansas, controlling deposits
of $99.9 million, representing less than 1 percent of
total deposits in commercial banks in the state.
JENNIFER J . JOHNSON
Associate Secretary of the Board
159
1. State deposit data are as of June 30, 1993.
160 Federal Reserve Bulletin • February 1994
The Burcham Chain and Home State do not compete in any banking market.2 Based upon this and
other facts of record, the Board has concluded that
consummation of the proposal would not result in a
significantly adverse effect on competition in any
relevant banking market.
On the basis of all the facts of record, including the
applicant's representations and commitments, the
Board also has concluded that the financial and managerial resources and future prospects of First National, Home State, their respective subsidiary banks,
and affiliated organizations in the Burcham Chain, as
well as convenience and needs considerations and all
other supervisory factors the Board is required to
consider under section 3 of the BHC Act, also are
consistent with approval of this application.
As part of this proposal, First National also has
applied, under section 4(c)(8) of the BHC Act, to
acquire Lewis Insurance, and thereby to engage in
general insurance agency activities in a town with a
population not exceeding 5,000. The Board previously
has determined by regulation that the proposed insurance agency activities are closely related to banking
and permissible for bank holding companies under
section 4(c)(8) of the BHC Act.3 First National has
committed that it will conduct these activities subject
to the limitations in Regulation Y.
In order to approve the acquisition of Lewis Insurance under section 4(c)(8) of the BHC Act, the Board
also must find that the performance of the proposed
activities by First National "can reasonably be expected to produce benefits to the public . . . that
outweigh possible adverse effects, such as undue
concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking
practices." 12 U.S.C. § 1843(c)(8). The Board expects
that continuation of the services provided by Lewis
Insurance would maintain the level of competition
among insurance agencies in its market and provide a
convenient source of insurance agency services to the
public. In addition, there is no evidence in the record
that consummation of this proposal would result in any
significantly adverse effects, such as undue concentration of resources, decreased or unfair competition,
conflicts of interests, or unsound banking practices.
Accordingly, the Board has concluded that the balance
of the public interest factors it is required to consider
2. Home State Bank operates in Lewis, Kansas and Kinsley,
Kansas, in the Edwards County, Kansas banking market, which is
approximated by Edwards County, Kansas. The Burcham Chain's
bank subsidiaries operate in three banking markets, the Kansas City,
Missouri-Kansas market, the Barton County, Kansas market, and the
Pawnee County, Kansas market.
3. See 12 C.F.R. 225.25(b)(8)(iii)(A). See also 12 U.S.C.
§ 1843(c)(8)(C)(i).
under section 4(c)(8) of the BHC Act is favorable and
consistent with approval of these applications.
Based on the foregoing and other facts of record,
including the representations and commitments made
in this case, the Board has determined that the applications should be, and hereby are, approved. Approval is specifically conditioned upon compliance
with all of the commitments made in connection with
these applications and with the conditions noted in this
order. The determinations with respect to First National's nonbanking activities also are subject to the
conditions set forth in Regulation Y, including those in
sections 225.4(d) and 225.23(b) of Regulation Y, and to
the Board's authority to require such modification or
termination of the activities of a bank holding company or any of its subsidiaries as the Board finds
necessary to ensure compliance with, and to prevent
evasion of, the provisions of the BHC Act and the
Board's regulations and orders issued thereunder. The
commitments and conditions relied on by the Board in
reaching this decision are deemed to be conditions
imposed in writing by the Board in connection with its
findings and decision, and, as such, may be enforced in
proceedings under applicable law.
The acquisition of Home State shall not be consummated before the thirtieth calendar day after the effective date of this order, and the proposal shall not be
consummated later than three months after the effective date of this order, unless such period is extended
for good cause by the Board or by the Federal Reserve
Bank of Kansas City, acting pursuant to delegated
authority.
By order of the Board of Governors, effective
December 1, 1993.
Voting for this action: Chairman Greenspan, Vice Chairman Mullins, and Governors Angell, Kelley, and LaWare.
Absent and not voting: Governors Lindsey and Phillips.
J E N N I F E R J . JOHNSON
Associate Secretary of the Board
Norwest Corporation
Minneapolis, Minnesota
Order Approving Acquisition of a Bank Holding
Company
Norwest Corporation, Minneapolis, Minnesota ("Norwest"), a bank holding company within the meaning of
the Bank Holding Company Act ("BHC Act"), has
applied under section 3 of the BHC Act (12 U.S.C.
§ 1842) to acquire First United Bank Group, Inc.,
Legal Developments
Albuquerque, New Mexico ("First United"), and
thereby acquire First United's subsidiary bank holding
companies, United New Mexico Financial Corporation, Albuquerque, New Mexico ("UNMFC"), and
Ford Bank Group, Inc. ("FBG") and FBG's subsidiary, Ford Bank Group Holdings, Inc., both of Lubbock, Texas. Norwest also proposes to indirectly
acquire the subsidiary banks of both UNMFC and
FBG listed in the Appendix to this order.1
In addition, Norwest has applied under section
4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) to
acquire United New Mexico Trust Company, Albuquerque, New Mexico, and thereby engage in trust
company activities pursuant to section 225.25(b)(3) of
the Board's Regulation Y; and United New Mexico
Credit Life Insurance Company, Phoenix, Arizona,
and thereby engage as principal and agent in credit life
and credit accident and health insurance activities
directly related to extensions of credit by Norwest and
its subsidiaries pursuant to section 225.25(b)(8)(i) of
the Board's Regulation Y. Two Norwest subsidiaries
also propose to acquire assets from First United's
subsidiary banks and engage in the following nonbanking activities:
(1) Norwest Investment Services, Inc., to engage in
providing discount brokerage in combination with
investment advisory services ("full-service brokerage") together with incidental safekeeping services
pursuant to section 225.25(b)(15) of the Board's
Regulation Y;
(2) Norwest Investment Services, Inc., to act as
agent in the sale of variable-rate annuities pursuant
to section 225.25(b)(8)(vii) of the Board's Regulation Y;2 and
(3) Norwest Mortgage, Inc., to engage in mortgage
lending activities pursuant to section 225.25(b)(1) of
the Board's Regulation Y.
1. Norwest proposes to acquire First United and its subsidiaries
indirectly through a merger with its wholly owned subsidiary, GST
Company ("GST"), and GST also has applied pursuant to section 3 of
the BHC Act to become a bank holding company. In connection with
this proposal, Norwest also has requested Board approval to acquire
an option to purchase approximately 19.4 percent of the outstanding
common stock of First United, which will become moot upon consummation of this proposal.
2. The Board previously has determined that Norwest may engage
in general insurance agency activities, including the sale as agent of
annuities, pursuant to section 4(c)(8)(G) of the BHC Act ("Exemption
G"). Norwest Corporation, 76 Federal Reserve Bulletin 873 (1990).
This exemption, one of seven specific exemptions (A through G)
enacted by Title VI of the Garn-St Germain Depository Institutions
Act of 1982 to the Gam Act's general prohibition on insurance
activities by bank holding companies, authorizes those bank holding
companies that engaged in insurance agency activities prior to 1971
with prior Board approval, to engage, or control a company engaged
in insurance agency activities.
161
Notice of the applications, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 52,110 (1993)). The
time for filing comments has expired, and the Board
has considered all comments received in light of the
factors set forth in sections 3(c) and 4(c)(8) of the BHC
Act.3
Norwest, with total deposits of approximately
$28.0 billion, controls 86 banking subsidiaries in 13
states, but currently does not control any banks in
New Mexico or Texas.4 First United is the second
largest commercial banking organization in New Mexico, controlling deposits of $1.6 billion, representing
14.7 percent of the total deposits in commercial banks
in the state. First United is the 11th largest commercial
banking organization in Texas, controlling deposits of
$1.4 billion, representing less than 1 percent of the
total deposits in commercial banks in the state. Upon
consummation of this proposal, Norwest would become the second largest commercial banking organization in New Mexico, controlling 14.7 percent of the
total deposits in commercial banks in New Mexico and
the 11th largest commercial banking organization in
Texas, controlling less than 1 percent of the total
deposits in commercial banks in Texas.
Norwest and First United do not compete directly in
any relevant banking markets. Based on all the facts of
record, the Board concludes that the acquisition of
First United and its subsidiary holding companies and
banks by Norwest would not result in any significantly
adverse effects on competition in any relevant banking
market.
Douglas Amendment Analysis
Section 3(d) of the BHC Act, the Douglas Amendment, prohibits the Board from approving an application by a bank holding company to acquire control of
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."5 For purposes of the
Douglas Amendment, the home state of Norwest is
Minnesota.6
3. The Board has considered comments filed after the close of the
public comment period. Under the Board's rules, the Board may in its
discretion, take into account the substance of such comments.
12 C.F.R. 262.3(e).
4. State deposit data are as of June 30, 1993.
5. 12 U.S.C. § 1842(d).
6. A bank holding company's home state is that state in which the
operations of the bank holding company's banking subsidiaries were
principally conducted on July 1, 1966, or the date on which the
company became a bank holding company, whichever is later.
162 Federal Reserve Bulletin • February 1994
This proposal would represent the initial entry of a
Minnesota bank holding company into New Mexico
and Texas. The interstate banking laws of both New
Mexico7 and Texas8 specifically authorize the acquisition of banking organizations in these respective states
by out-of-state bank holding companies. In addition,
state banking officials in New Mexico and Texas have
confirmed that the proposed acquisitions are authorized by their respective state banking statutes. Based
on all facts of record, the Board concludes that approval of this proposal is not prohibited by the Douglas
Amendment. This conclusion is conditioned upon
Norwest's satisfying all state requirements.
Convenience and Needs Considerations
In connection with these applications, the Board received comments from the Community Reinvestment
and Development Taskforce, Albuquerque, New Mexico, expressing general concern about the acquisition
of the largest remaining independent banking chain in
New Mexico and Texas and the effect of the acquisition upon the access of local consumers to banking
services. The Board also received comments from the
Consumer Protection Division of the Office of the
Attorney General of Texas ("Texas CPD"), which
were adopted by reference by the Lubbock Hispanic
Chamber of Commerce ("COMA") and the League of
United Latin American Citizens ("LULAC") regarding the lending performance of FBG's subsidiary, First
National Bank of West Texas, Lubbock, Texas ("Texas Bank"), under the Community Reinvestment Act
("CRA"), 12 U.S.C. § 2901 et seq.
With regard to its activities in New Mexico, Norwest has committed to implement United New Mexico's recently announced five-year, 12 point Community Lending Initiative designed to assist in meeting
the financial service needs of all communities served in
New Mexico. This program, totaling $250 million, sets
statewide lending goals for home mortgages to low-
7. See N.M. Stat. Ann. § 58-26-1 et seq. (Michie 1992). New
Mexico's interstate banking laws permit out-of-state banks and bank
holding companies to acquire New Mexico banks or bank holding
companies, provided that the interstate acquisition does not result in
undue concentration of deposits totalling 40 percent or more of the
total deposits in all financial institutions in the state. As of June 30,
1992, the New Mexico banks to be acquired by Norwest had approximately 12.8 percent of the total deposits in all financial institutions in
the state.
8. See Tex. Code Ann. § 342-912. The Texas Interstate Banking
Act permits an out-of-state bank holding company to acquire control
of a Texas banking organization if certain conditions are met, including the limitation that the aggregate deposits of Texas banks controlled
by the out-of-state bank holding company may not exceed 25 percent
of the total deposits of all banks domiciled in Texas. As of June 30,
1993, the Texas banks subject to this proposal controlled less than one
percent of the total deposits of all banks domiciled in Texas.
income residents, small business, and federally insured student loans. This initiative also provides for
the funding of more ATMs in low- and moderateincome areas, two internal reviews of all denied loan
applications from low-income and minority customers,
and seminars on personal money management.
The Board has reviewed carefully the Home Mortgage Disclosure Act (12 U.S.C. et seq.) ("HMDA")
data reported by Texas Bank in the Lubbock MSA, in
light of the comments received. These data indicate
some weaknesses in the level of lending to low- and
moderate-income communities. In this regard, the
Board notes that Texas Bank received a "satisfactory" rating in its last examination for CRA performance
from its primary regulator, the Office of the Comptroller of the Currency ("OCC"), as of July 1991. The
OCC examiners found no evidence of prohibited discriminatory or other illegal credit practices during the
examination. The Board also notes that in order to
strengthen Texas Bank's lending performance, Norwest has committed to a 5-year/$20 million program
for mortgages to low- and moderate-income residents
served by Texas Bank. In addition, Norwest will offer
its Community Home Ownership Program to provide
mortgages to low- and moderate-income residents who
do not qualify for mortgage products that can be sold
in the secondary market. Norwest will also implement
its Community Marketing Initiative, which provides
contact with community members and groups to ascertain community needs and address the credit needs
identified. In light of all the information provided by
Norwest, the Texas CPD withdrew its comments.
Based on all the facts of record, including all comments received and Norwest's responses, the Board
concludes that the convenience and needs considerations are consistent with approval.9
9. The Board has carefully considered two requests for a public
hearing or meeting to permit communities in New Mexico to furnish
Norwest with information concerning the credit needs of those
communities. Section 3(b) of the BHC Act does not require the Board
to hold a public hearing or meeting on an application unless the
appropriate supervisory authority for the bank to be acquired makes a
timely written recommendation of denial of the application. In this
case, neither the New Mexico Director of the Financial Institutions
Division, nor the Texas Banking Commissioner, has recommended
denial of 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). In the
Board's view, all interested parties have had ample opportunity to
submit their views, and substantive written submissions have been
received. Moreover, commenters have indicated general disagreement regarding the appropriate conclusions to be drawn from the facts
of record, but have not identified facts that are in dispute and material
to the Board's decision. Based on all the facts of record, the Board has
determined that a public meeting or hearing is not necessary to clarify
the factual record in this application, or otherwise warranted in this
Legal Developments
Other Considerations
The Board also finds that the financial and managerial
resources and future prospects of Norwest, GST, First
United, and their respective subsidiaries, and other
supervisory factors the Board must consider under
section 3 of the BHC Act, are consistent with approval.
Norwest also has applied for approval to engage in
certain nonbanking activities pursuant to section 4 of
the BHC Act. As noted above, the Board previously
has determined that these activities are permissible for
bank holding companies under section 4(c)(8) of the
BHC Act and the Board's Regulation Y, and Norwest
proposes to conduct these activities in accordance
with the Board's regulations. The record in this case
indicates that there are numerous providers of these
nonbanking services, and there is no evidence in the
record to indicate that consummation of this proposal
is likely to result in any significantly adverse effects,
such as undue concentration of resources, decreased
or unfair competition, conflicts of interests, or unsound banking practices that would outweigh the
public benefits of this proposal. Accordingly, the
Board has determined that the balance of public interest factors it must consider under section 4(c)(8) of the
BHC Act is favorable and consistent with approval of
the acquisition of the nonbanking subsidiaries of First
United.
Conclusion
Based on the foregoing and other facts of record, the
Board has determined that the applications should be,
and hereby are, approved.10 The Board's approval is
specifically conditioned upon compliance with all the
commitments made by Norwest in connection with
these applications and with the conditions referred to
in this order, including satisfying all state requirements. The determinations as to the nonbanking activities are subject to all the conditions set forth in the
Board's Regulation Y, including those in sections
225.4(d) and 225.23(b)(3) (12 C.F.R. 225.4(d) and
225.23(b)(3)), and to the Board's authority to require
case, and the requests for a public hearing or meeting on these
applications are denied.
io. LULAC and COMA believe that Bank has an insufficient
number of Hispanics in upper level management positions at Bank.
Because Bank employs more than SO people and acts as an agent to
sell or redeem U.S. savings bonds and notes, it is required by
Treasury Department regulations to:
(1) File annual reports with the Equal Employment Opportunity
Commission; and
(2) Have in place a written affirmative action compliance program
which states its efforts and plans to achieve equal opportunity in the
employment, hiring, promotion, and separation of personnel.
163
such modification or termination of the activities of a
holding company or any of its subsidiaries as the
Board finds necessary to assure compliance with, or to
prevent evasions of, the provisions and purposes of
the BHC Act and the Board's regulations and orders
issued thereunder. For purposes of this action, the
commitments and conditions relied on in reaching this
decision shall be deemed to be conditions imposed in
writing by the Board and, as such, may be enforced in
proceedings under applicable law.
The acquisition of First United's subsidiary banks
shall not be consummated before the thirtieth calendar
day following the effective date of this order, and the
acquisition of First United's subsidiary banks and
nonbanking subsidiaries shall not be consummated
later than three months after the effective date of this
order, unless such period is extended for good cause
by the Federal Reserve Bank of Minneapolis, acting
pursuant to delegated authority.
By order of the Board of Governors, effective
December 13, 1993.
Voting for this action: Vice Chairman Mullins and Governors Angell, Kelley, LaWare, Lindsey, and Phillips. Absent
and not voting: Chairman Greenspan.
J E N N I F E R J . JOHNSON
Associate Secretary of the Board
Appendix
United New Mexico Financial Corporation
Subsidiary Banks
United New Mexico Bank (Alamogordo), Alamogordo, New Mexico
United New Mexico Bank (Albuquerque), Albuquerque, New Mexico
United New Mexico Bank (Carlsbad), Carlsbad, New
Mexico
United New Mexico Bank (Gallup), Gallup, New
Mexico
United New Mexico Bank, N.A. (Las Cruces), Las
Cruces, New Mexico
United New Mexico Bank (Lea County), Hobbs, New
Mexico
United New Mexico Bank (Mimbres Valley), Deming,
New Mexico
United New Mexico Bank, N.A. (Portales), Portales,
New Mexico
United New Mexico Bank (Roswell), Roswell, New
Mexico
United New Mexico Bank, N.A. (Socorro), Socorro,
New Mexico, and
164 Federal Reserve Bulletin • February 1994
United New Mexico Bank (Vaughn), Vaughn, New
Mexico
Ford Bank Group, Inc. Subsidiary Banks
First National Bank of Borger, Borger, Texas
First National Bank in Canyon, Canyon, Texas
First National Bank of West Texas, Lubbock, Texas
First National Bank of Plain view, Plain view, Texas
First National Bank of Central Texas, Waco, Texas
First State Bank, Crane, Texas,
Yoakum County State Bank, Denver City, Texas, and
First National Bank, Post, Post, Texas
Norwest Corporation
Minneapolis, Minnesota
Order Approving the Acquisition of a Bank Holding
Company
Norwest Corporation, Minneapolis, Minnesota ("Norwest"), a bank holding company within the meaning of
the Bank Holding Company Act ("BHC Act"), has
applied under section 3(a)(3) of the BHC Act
(12 U.S.C. § 1842(a)(3)) to acquire all the voting
shares of Lindeberg Financial Corporation ("Lindeberg"), and thereby indirectly acquire Forest Lake
State Bank ("Bank"), both of Forest Lake, Minnesota. Norwest also has applied, pursuant to section
4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)), and
section 225.23 of the Board's Regulation Y (12 C.F.R.
225.23) to acquire the mortgage origination operations
of Bank, and thereby engage in the making and servicing of loans pursuant to section 225.25(b)(1) of the
Board's Regulation Y (12 C.F.R. 225.25(b)(1)).
Notice of the applications, affording interested persons an opportunity to submit comments, has been
published (58 Federal Register 49,050 (1993)). The
time for filing comments has expired, and the Board
has considered the applications and all comments
received in light of the factors set forth in sections 3
and 4 of the BHC Act.
Norwest, with total consolidated assets of
$47.8 billion, operates 86 banking subsidiaries located
in 13 states.1 Norwest is the second largest commercial banking organization in Minnesota, controlling
approximately $9.9 billion in deposits, representing
22.4 percent of the deposits in commercial banks in the
state.2 Lindeberg, with total consolidated assets of
$58.2 million, is the 111th largest commercial banking
1. Asset data are as of June 30, 1993.
2. State data are as of June 30, 1993. Market data are as of June 30,
1992, but have been adjusted to reflect all subsequent mergers and
acquisitions through December 1, 1993.
organization in the state, controlling $51.7 million in
deposits, representing less than 1 percent of the deposits in commercial banks in the state. Upon consummation of the proposal, Norwest would remain the
second largest commercial banking organization in
Minnesota, controlling approximately $10 billion in
deposits, representing 22.5 percent of the total deposits in commercial banks in the state.
Competitive Considerations
Norwest and Lindeberg compete directly in the
Minneapolis-St. Paul banking market.3 Norwest is the
second largest commercial bank or thrift institution
("depository institution") in the market, controlling
deposits of $7.5 billion, representing 27.9 percent of
total deposits in depository institutions in the market
("market deposits").4 Lindeberg is the 44th largest
depository institution in Minnesota, controlling approximately $49.1 million in deposits, representing
less than 1 percent of total state commercial bank
deposits. Upon consummation of this proposal, Norwest would remain the second largest depository institution in the market, controlling deposits of
$7.5 billion, representing 28.1 percent of total market
deposits. The Herfindahl-Hirschman Index ("HHI")
would increase by approximately 10 points to 2037.5
The Board previously has indicated that merger
transactions in the Minneapolis-St. Paul banking market involving one of the two largest depository institutions in the market warrant close review because of
the size of these institutions relative to other market
3. The Minneapolis-St. Paul banking market is comprised of Anoka,
Hennepin, Ramsey, Washington, Carver, Scott, and Dakota Counties, and portions of Chisago, Le Sueur, Sherburne, and Wright
Counties in Minnesota, and the town of Hudson in St. Croix County,
Wisconsin.
4. 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).
Thus, the Board has regularly included thrift deposits in the calculation of market share on a 50 percent weighted basis. See, e.g.. First
Hawaiian Inc., 77 Federal Reserve Bulletin 52 (1991).
5. Under the revised Department of Justice Merger Guidelines, 49
Federal Register 26,823 (June 29, 1984), a market in which the
post-merger HHI is above 1800 is considered highly concentrated. In
such markets, the Justice Department is likely to challenge a merger
that increases the HHI by more than 50 points. The Justice Department has informed the Board that a bank merger or acquisition
generally will not be challenged (in the absence of other factors
indicating anti-competitive effects) unless the post-merger HHI is at
least 1800 and the merger increases the HHI by 200 points. The Justice
Department has stated that the higher than normal HHI thresholds for
screening bank mergers for anti-competitive effects implicitly recognize the competitive effects of limited-purpose lenders and other
non-depository financial entities.
Legal Developments
competitors.6 Even considering the effect on market
concentration in light of previous acquisitions by the
two largest depository organizations, this proposal is
not likely to have a significantly adverse competitive
effect in the market.
In this case, Lindeberg is one of the smaller depository organizations in the Minneapolis-St. Paul banking market, controlling less than 1 percent of market
deposits. In addition, the Board notes that 102 competitors would remain in the market, including 92
commercial banks and 10 thrifts, upon consummation
of this proposal.
The Minneapolis-St. Paul banking market is a major
urban area and is attractive for entry. Moreover, this
acquisition is not likely to affect the availability of
attractive entry points for potential entrants.7 In this
regard, the market has experienced both de novo entry
and entry by acquisition in recent years. For example,
seven commercial banking institutions, including two
banks chartered de novo in 1990, have entered the
market in the past ten years. One of the commercial
banking institutions that entered the market during this
period has become the fourth largest depository institution in the market.
As in other cases, the Board sought comments on
the application from the United States Attorney General, the General Deposit Insurance Corporation
("FDIC") and the Attorney General of the State of
Minnesota. The Attorney General, the FDIC and the
Minnesota Attorney General have not objected to
consummation of this proposal or indicated that the
proposal would have any significantly adverse competitive effects.
On the basis of all the facts of record, including the
number of competitors remaining in the market and
the size of Lindeberg, 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 Minneapolis-St. Paul
banking market or any other relevant banking market
in which Norwest and Lindeberg compete.
Other Considerations
The Board also concludes that the financial and managerial resources and future prospects of Norwest and
Lindeberg, and their respective subsidiaries, as well as
6. See First Bank System, Inc., 79 Federal Reserve Bulletin 50
(1993). In this regard, acquisitions by either of these two banking
organizations of a series of depository organizations with relatively
small market shares could, on a cumulative basis, lead to significant
anti-competitive effects.
7. The Minneapolis-St. Paul metropolitan area, with a population of
2.46 million, is the 16th largest in the United States according to 1990
Census data, and has increased 15.3 percent in population since 1980.
165
the convenience and needs of the communities to be
served and the other supervisory factors that the
Board must consider under section 3 of the BHC Act,
are consistent with approval.
Norwest also has applied, pursuant to section 4(c)(8)
of the BHC Act, to acquire the mortgage origination
activities of Bank. As noted above, the Board has
previously determined that these activities are closely
related to banking and generally permissible for bank
holding companies under section 4(c)(8) of the BHC
Act and the Board's Regulation Y (12 C.F.R.
225.25(b)(1)). Norwest proposes to conduct these activities in accordance with the Board's regulations.
In order to approve the acquisition of Bank's mortgage origination operations under section 4(c)(8) of the
BHC Act, the Board also must find that the performance of the proposed activities by Norwest "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). There are
numerous providers of mortgage lending services, and
this proposal would not have a significantly adverse
effect on the market for the nonbanking services. In
addition, there is no evidence in the record to indicate
that consummation of this proposal is likely to result in
any significantly adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices. Accordingly, the Board concludes that the
balance of the public interest factors that it is required
to consider under section 4(c)(8) of the BHC Act is
favorable, and consistent with approval of Norwest's
application to acquire Bank's mortgage origination
operations.
Conclusion
Based upon the foregoing and all the other facts of
record, including the commitments made by Norwest
in connection with these applications, the Board has
determined that the applications should be, and hereby
are, approved. The Board's approval is expressly
conditioned upon compliance with the commitments
made in connection with these applications. The
Board's determination with respect to Norwest's nonbanking activities is also subject to all of the conditions
contained in the Board's Regulation Y, including those
in sections 225.4(d) and 225.23(b) (12 C.F.R. 225.4(d)
and 225.23(b)), and to the Board's authority to require
such modification or termination of 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
166
Federal Reserve Bulletin • February 1994
and the Board's regulations and orders thereunder.
For purposes of this action, the commitments and
conditions relied upon by the Board in reaching its
decision are both conditions imposed in writing by the
Board and, as such, may be enforced in proceedings
under applicable law.
The banking acquisition shall not be consummated
before the thirtieth calendar day following the effective
date of this order, and all acquisitions 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 Minneapolis, acting pursuant to delegated
authority.
By order of the Board of Governors, effective
December 21, 1993.
Voting for this action: Chairman Greenspan, Vice Chairman Mullins, and Governors Lindsey and Phillips. Voting
against this action: Governors Angell, Kelley, and LaWare.
J E N N I F E R J . JOHNSON
Associate Secretary of the Board
Dissenting Statement of Governors Angell, Kelley,
and LaWare
We reaffirm the position we took in July 1993 when the
Board voted 4-3, to permit Norwest to acquire M&D
Holding Company.
ORDERS ISSUED UNDER BANK HOLDING
COMPANY ACT AMENDMENTS OF 1970
First Union Corporation
Charlotte, North Carolina
filing comments has expired, and the Board has considered the request and all comments received in light
of the Board's authority to grant exemptions to Section 106(b)'s tie-in prohibitions.1
First Union is the sixth largest banking organization
in the nation, controlling deposits of $52 billion.2 First
Union operates subsidiary banks in the District of
Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, and Virginia, and
engages directly and through subsidiaries in a broad
range of permissible nonbanking activities.
Section 106(b) generally prohibits a bank from varying the consideration for credit or other services on the
condition that the customer obtain some additional
service from the bank, its bank holding company, or
any other subsidiary of its bank holding company.
Section 106(b) provides that the Board may, by regulation or order, permit an exception to the tie-in
prohibitions where the Board determines that an exception will not be contrary to the purposes of the
section. The legislative history provides that the purpose of Section 106(b) is to prohibit anti-competitive
practices which require bank customers to accept or
provide some other service or product or refrain from
dealing with other parties in order to obtain the bank
product or service they desire.3 The legislative history
also indicates that the Board should exercise its exemptive authority selectively and that the Board
should continue to allow appropriate traditional banking practices based on sound economic analysis.4
In considering previous requests for an exemption,
the Board has reviewed a number of factors, including
whether the tied products are offered separately to
customers at market prices, and whether the bank
could impair the availability of the products or otherwise engage in unfair competition by tying the proposed products.5
Order Approving an Exemption from the Anti-Tying
Provisions
First Union Corporation, Charlotte, North Carolina
("First Union"), a bank holding company within the
meaning of the Bank Holding Company Act, has
requested that the Board grant an exemption from the
anti-tying provisions of the Bank Holding Company
Act Amendments of 1970 (12 U.S.C. § 1971) ("Section 106(b)") to permit First Union Brokerage Services, Inc., Charlotte, North Carolina ("Brokerage
Company"), to offer discounts on commissions for
brokerage services to customers who maintain a minimum balance in accounts at any First Union bank.
Notice of this request, affording interested persons
an opportunity to submit comments, has been published (58 Federal Register 59,073 (1993)). The time for
1. The Board received ten comments on this proposal, all in favor of
granting First Union's request.
2. Deposit data are as of June 30, 1993.
3. S. Rep. No. 1084, 91st Cong., 2d Sess. 17 (1970) ("Senate
Report").
4. Senate Report at 17 and 46.
5. In 1990, the Board granted an exemption to the tie-in prohibitions,
to permit subsidiary banks of Norwest Corporation, Minneapolis,
Minnesota ("Norwest"), and NCNB Corporation, Charlotte, North
Carolina ("NCNB"), to offer a price reduction on credit cards issued
to customers of their affiliated banks. See Norwest Corporation and
NCNB Corporation, 76 Federal Reserve Bulletin 702 (1990). In
granting this exception, the Board determined that neither Norwest
nor NCNB could exercise sufficient market power to impair competition in the tied product market for the traditional banking services,
and emphasized that the credit card and traditional banking products
offered as part of the arrangement were made available by the bank
holding companies separately at competitive prices. By subsequent
rulemaking, the Board made this exemption available to bank holding
companies generally. See 12 C.F.R. 225.4(d)(2).
Legal Developments
First Union proposes that Brokerage Company be
allowed to vary the consideration charged for brokerage services if a customer maintains a minimum
balance in accounts at any First Union bank.6 Brokerage Company is an operating subsidiary of First
Union National Bank of North Carolina, Charlotte,
North Carolina.
First Union contends that its proposal is not anticompetitive because the market for retail brokerage
services is national in scope and very competitive. In
this regard, First Union maintains that Brokerage
Company does not have enough market power in this
market to cause a lessening of competition by providing discounts on brokerage services to customers with
deposit relationships at a First Union bank. In addition, First Union argues that the proposal will not limit
the availability of products to consumers because the
brokerage services offered by Brokerage Company
and the deposit services offered by First Union's
subsidiary banks will be separately available to customers at competitive prices.
In determining whether the proposed exemption
would be consistent with Section 106(b), it is appropriate to consider the competitiveness of the relevant
retail brokerage market. In analyzing the potential
competitive effects of a proposal, the Board has
considered the availability of the tying product in its
relevant geographic market. The geographic market
for retail brokerage services — the tying product in
this case — is national in scope and highly competitive.7 In each of the states in which First Union
competes, there are at least 50 competing brokerage
firms, including major nationwide brokerage firms,
and other banks offering retail brokerage services.
Overall, First Union possesses a small market share
in the retail brokerage market.8
Therefore, it is unlikely that First Union will be able
to substantially lessen competition for brokerage services in a particular market. Similarly, First Union's
small market share in brokerage services and the
presence of many other competitors providing retail
brokerage services indicate that it is unlikely that, by
tying discounts on brokerage services to deposit services, First Union could exercise sufficient market
power to impair competition in the market for the
traditional banking services.
6. The proposed exemption would provide relief from section
106(b)(1), which prohibits banks from tying their own products, and
section 106(b)(2), which prohibits banks from tying their products with
those offered by affiliates. See 12 U.S.C. §§ 1972(1)(A) and (B).
7. See, e.g., BankAmerica Corporation, 69 Federal Reserve Bulletin 105, 110 (1983).
8. First Union states that its 1991 brokerage revenues represented
less than one-half of 1 percent of total nationwide brokerage revenues.
167
Under antitrust precedent, concerns over tying
arrangements are substantially reduced where the
buyer is free to take either product by itself even
though the seller may also offer the two items as a
unit at a single price.9 As noted above, First Union
will continue to offer brokerage services and deposit
services separately. Given the competitive nature of
the retail brokerage market, it is expected that First
Union will be required to offer these brokerage
services at competitive prices. There are no other
facts to suggest in this case that First Union has
sufficient market power to affect adversely the market or availability for the brokerage services through
its proposal to provide discounts.
For these reasons, the Board believes that the
requested exemption is not contrary to the purpose
of Section 106(b), and that granting the exemption
would be consistent with the legislative authorization
to permit exemptions for traditional banking services
on the basis of economic analysis. The Board, however, reserves the right to terminate the exemption in
the event that facts develop in the future that indicate
that the tying arrangement is resulting in anticompetitive practices and thus would be inconsistent with
the purpose of Section 106(b).
Based on the above, and all facts of record, the
Board has determined to grant an exemption to permit
Brokerage Company to offer discounts on commissions for brokerage services to customers who maintain a minimum balance in accounts at any First Union
bank on the conditions discussed above. This approval
is subject to the Board's authority to modify or terminate the exemption as set forth above and to all of the
conditions that may be imposed by the Board in
Regulation Y.
By order of the Board of Governors, effective
December 22, 1993.
Voting for this action: Chairman Greenspan, Vice Chairman Mullins, and Governors Kelley, LaWare, Lindsey, and
Phillips. Absent and not voting: Governor Angell.
WILLIAM W . WILES
Secretary of the Board
9. Northern Pacific R. Co. v. United States, 356 U.S. 1, 6, n.4
(1958).
168
Federal Reserve Bulletin • February 1994
ORDERS ISSUED UNDER BANK MERGER ACT
First Interstate Bank of California
Los Angeles, California
Order Approving the Merger of Banks
First Interstate Bank of California, Los Angeles, California ("First Interstate-California"), a state member
bank, has applied for the Board's approval under
section 18(c) of the Federal Deposit Insurance Act
(12 U.S.C. § 1828(c)) ("Bank Merger Act") to merge
with First State Bank of the Oaks, Thousand Oaks,
California ("Bank of the Oaks"), and establish
branches under section 9 of the Federal Reserve Act
(12 U.S.C. § 321).
Notice of this application, affording interested persons an opportunity to submit comments, has been
given in accordance with the Bank Merger Act and the
Board's Rules of Procedure (12 C.F.R. 262.3(b)). As
required by the Bank Merger Act, reports on the
competitive effects of the merger were requested from
the United States Attorney General, the Office of the
Comptroller of the Currency, and the Federal Deposit
Insurance Corporation ("FDIC"). The time for filing
comments has expired, and the Board has considered
the application and all comments received in light of
the factors set forth in the Bank Merger Act and
section 9 of the Federal Reserve Act.
First Interstate-California, with consolidated assets
of $20.1 billion,1 is the third largest commercial banking organization in California, controlling deposits of
$17.1 billion, representing approximately 7.2 percent
of total deposits in commercial banking organizations
in the state.2 Bank of the Oaks is the 131st largest
commercial banking organization in California, controlling deposits of $129 million, representing less than
1 percent of total deposits in commercial banking
organizations in the state. Upon consummation of this
proposal, First Interstate-California would remain the
third largest commercial banking organization in California, controlling deposits of $17.3 billion, representing approximately 7.3 percent of the total deposits in
commercial banking organizations in the state.
First Interstate-California and Bank of the Oaks
compete directly in the Los Angeles and Oxnard
banking markets.3 Upon consummation of this proposal, the Los Angeles banking market would remain
unconcentrated and the Oxnard banking market would
1. Asset data are as of September 30, 1993.
2. State deposit data are as of June 30, 1993.
3. The Los Angeles banking market is defined as the Los Angeles
Ranally Metropolitan Area, and the Oxnard banking market is defined
as the Oxnard Ranally Metropolitan Area.
remain moderately concentrated as measured by the
Herfindahl-Hirschman Index ("HHI"). 4 After considering the competition offered by other depository
institutions in the markets,5 the number of competitors
remaining in the respective markets, the relatively
small increase in market share and market concentration in the respective markets, and all other factors of
record, the Board concludes that consummation of the
proposal would not have a significantly adverse effect
on competition in any relevant banking market.
Convenience and Needs Considerations
In acting on an application to acquire a depository
institution under the Bank Merger Act, the Board must
consider the convenience and needs of the communities to be served, and take into account the records of
the relevant depository institutions under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.)
("CRA"). The CRA requires the federal financial
supervisory agencies to encourage financial institutions to help meet the credit needs of the local communities in which they operate, consistent with the
safe and sound operation of such institutions. To
accomplish this end, the CRA requires the appropriate
federal supervisory authority to "assess the institution's record of meeting the credit needs of its entire
community, including low- and moderate-income
neighborhoods, consistent with the safe and sound
operation of such institution," and to take that record
into account in its evaluation of these applications.6
In this regard, the Board has received comments
from the California Reinvestment Committee
("CRC") and an individual (collectively, "Protestants") critical of the efforts of First InterstateCalifornia and Bank of the Oaks to meet the credit and
banking needs of their communities. Protestants allege
4. Under the revised Department of Justice Merger Guidelines, 49
Federal Register 26,823 (June 29, 1984), a market in which the
post-merger HHI is below 1000 is considered unconcentrated, and a
market in which the post-merger HHI is between 1000 and 1800 is
considered moderately concentrated. The Justice Department has
informed the Board that a bank merger or acquisition generally will
not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the
merger increases the HHI by more than 200 points. The Justice
Department has stated that the higher than normal HHI thresholds for
screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limited-purpose lenders and other
non-depository financial institutions.
5. In this context, depository institutions include commercial banks,
savings banks, and savings associations. Market deposit data are as of
June 30, 1992, and are based on calculations in which the deposits of
thrift institutions are included at 50 percent. The Board previously has
indicated that thrift institutions have become, or have the potential to
become, significant competitors of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); National City Corporation, 70 Federal Reserve Bulletin 743 (1984).
6. 12 U.S.C. § 2903.
Legal Developments
generally that First Interstate-California and Bank of
the Oaks have not met the credit needs of minorities
and low- and moderate-income individuals, particularly in the Oxnard-Ventura metropolitan statistical
area ("MSA"). 7
In its consideration of the convenience and needs
factor, the Board has carefully reviewed the entire
record of CRA performance of First InterstateCalifornia and Bank of the Oaks; all comments received regarding this application, including the response of First Interstate-California to those comments; and all the other relevant facts of record, in
light of the CRA, the Board's regulations, and the
Statement of the Federal Financial Supervisory Agencies Regarding the Community Reinvestment Act
("Agency CRA Statement").®
Record of CRA
Performance
A. CRA Performance Examinations
The Agency CRA Statement provides that a CRA
examination is an important and often controlling
factor in the consideration of an institution's CRA
record, and that these reports will be given great
weight in the applications process.9 The Board notes
that First Interstate-California received a "satisfactory" rating from its primary federal regulator, the
Federal Reserve Bank of San Francisco, at its most
recent examination for CRA performance as of
August 10, 1992. In addition, Bank of the Oaks received a "satisfactory" rating from its primary regulator, the FDIC, at its most recent examination for
CRA performance as of April 23, 1992.10
B. Previous Review of First
Interstate-California's CRA Record
The Board recently reviewed the CRA performance
record of First Interstate-California in connection with
7. CRC alleges that First Interstate-California neglects home mortgage lending statewide, and that plans to expand its mortgage loan
portfolio have not increased the number of mortgage originations.
CRC also believes that Bank of the Oaks's efforts to extend credit and
services to minorities and low-income individuals are inadequate.
CRC has requested that First Interstate-California specify CRA products and outreach efforts, and commit to CRA goals in California, for
affordable housing development, community economic development,
and consumer needs.
8. 54 Federal Register 13,742 (1989).
9. 54 Federal Register 13,745 (1989).
10. Although Bank of the Oaks is an approved Small Business
Administration ("SBA") lender, it no longer actively markets SBAsponsored products. However, Bank of the Oaks continues to extend
credit to small businesses. As of June 30, 1993, the bank had
outstanding 191 small business loans totalling approximately
$13 million.
169
its applications to acquire California Republic Bank.11
This review included consideration of First
Interstate-California's record of lending in low- and
moderate-income and minority areas, community development activities, and other CRA programs and
policies in light of comments received from several
commenters, including CRC. For the reasons more
fully set forth in the First Interstate Order, the Board
concluded that the overall CRA performance record of
First Interstate-California was generally consistent
with approval.
C. Record of Lending in the Oxnard-Ventura
MSA
Protestants have alleged in this application that 1992
data required to be filed under the Home Mortgage
Disclosure Act (12 U.S.C. § 2801 et seq.) ("HMDA")
show that First Interstate-California and Bank of the
Oaks discriminate against borrowers located in lowand moderate-income and minority communities in the
Oxnard-Ventura MSA. These 1992 HMDA data reveal
mixed results. In some categories, First InterstateCalifornia's performance met or exceeded the performance of its peers. For example, the number of
mortgage applications received from minorities by
First Interstate-California in the Oxnard-Ventura
MSA, and the number of originations, increased substantially from 1991 to 1992.12 Furthermore, mortgage
loan approval and denial rates for African-Americans
and Asian-Americans in the Oxnard-Ventura MSA
were the same or better than the rates for whites in
1992.13
However, the 1992 HMDA data for both First
Interstate-California and Bank of the Oaks also indicate disparities in approvals and denials of loan applications for Hispanics and individuals residing in lowto moderate-income neighborhoods in the OxnardVentura MSA. Because all banks are obligated to
adopt and implement lending practices that ensure not
only safe and sound lending, but also equal access to
credit by creditworthy applicants regardless of race,
the Board is concerned when the record of an institution indicates disparities in lending to applicants in
low- and moderate-income and minority communities.
The Board recognizes, however, that HMDA data
11. See First Interstate Bancorp, 80 Federal Reserve Bulletin 40
(1994) ("First Interstate Order").
12. In 1992, First Interstate-California's mortgage lending to
African-Americans was proportional to their presence in the OxnardVentura MSA. During that year, the bank made 2 percent of its
mortgage loans to African-Americans (2 percent of the population of
the MSA).
13. In 19^2, the denial rate for African- and Asian-Americans in the
Oxnard-Ventura MSA was 17 percent, and the denial rate for whites
was 29 percent.
170
Federal Reserve Bulletin • February 1994
alone provide only a limited measure of any given
institution's lending in its community. The Board also
recognizes that HMDA data have limitations that
make the data an inadequate basis, absent other information, for conclusively determining whether an institution has engaged in illegal discrimination in making
lending decisions.
As noted in the First Interstate Order, First
Interstate-California's 1992 CRA performance examination found no evidence of any pattern or practice of
illegal discriminatory credit practices, or other practices designed to discourage credit applications. In this
regard, examiners noted that the bank continually
assesses its lending activity for HMDA-reportable
loans. In addition, in conducting its 1992 CRA examination of Bank of the Oaks, the FDIC reviewed
mortgage loans denied by the bank and found no
evidence of any pattern or practice of illegal discriminatory credit practices, or other practices designed to
discourage credit applications.
First Interstate-California also has committed to
steps to improve its mortgage lending in the OxnardVentura MSA. For example, First InterstateCalifornia will market all of its CRA-related programs
and products described in the First Interstate Order,
including three special mortgage programs and the
F.I.R.S.T. consumer loan program, to all segments of
its banking community in the Oxnard-Ventura MSA.
In addition, the bank has committed to make its
"second look" program for denied loans available to
customers in the Oxnard-Ventura MSA, and operate
its "mystery shopper" program in the Bank of the
Oaks branches being acquired to test for compliance
with fair lending laws.
On the basis of all the facts of record, including the
comments provided by Protestants, First InterstateCalifornia's response to those comments, and relevant
reports of examination, as well as the information and
commitments referenced in the First Interstate Order,
the Board concludes that convenience and needs considerations, including the records of performance under the CRA of First Interstate-California and Bank of
the Oaks, are consistent with approval of this application. The Board expects First Interstate-California to
implement fully all commitments made in connection
with this proposal, including its proposed CRA initiatives for the Oxnard-Ventura MSA, and to comply
with all the conditions and commitments discussed in
the First Interstate Order.
must consider under the Bank Merger Act and the
Federal Reserve Act, are consistent with approval of
this proposal.
Conclusion
Based on the foregoing and other facts of record, the
Board has determined that the application should be,
and hereby is, approved. The Board's approval is
specifically conditioned upon compliance with all the
commitments made by First Interstate-California in
connection with this application. This approval is
further subject to First Interstate obtaining the approval of the California Superintendent of Banks for
the proposed transaction under applicable state law.
For purposes of this action, the commitments and
conditions relied on in reaching this decision shall be
deemed to be conditions imposed in writing by the
Board and, as such, may be enforced in proceedings
under applicable law.
The acquisition of Bank of the Oaks 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 San Francisco acting pursuant to
delegated authority.
By order of the Board of Governors, effective
December 13, 1993.
Voting for this action: Vice Chairman Mullins and Governors Angell, Kelley, LaWare, Lindsey, and Phillips. Absent
and not voting: Chairman Greenspan.
JENNIFER J . JOHNSON
Associate Secretary of the Board
Fleet Bank of New York
Albany, New York
Order Approving Acquisition of Branches
Other Considerations
Fleet Bank of New York, Albany, New York ("Fleet
Bank"), a state member bank, has applied for the
Board's approval under the Bank Merger Act
(12 U.S.C. § 1828(c)) to acquire certain assets and
assume certain liabilities of 29 branches of Chemical
Bank, New York, New York ("Chemical Bank"), also
a state member bank. These branches are located
throughout upstate New York.1 Fleet Bank also has
applied for the Board's approval, pursuant to section 9
of the Federal Reserve Act (12 U.S.C. § 321), to
The financial and managerial resources and future
prospects of First Interstate-California and 'Bank of
the Oaks, and other supervisory factors the Board
1. The branch locations proposed to be acquired are listed in the
Appendix.
Legal Developments
establish and operate branch offices at each of these
locations.
Notice of the applications, affording interested persons an opportunity to submit comments, has been
published in accordance with the Bank Merger Act
and the Board's Rules of Procedure (12 C.F.R.
262.3(b)). As required by the Bank Merger Act, reports on the competitive effects of the proposal have
been requested from the United States Attorney General, the Office of the Comptroller of the Currency
("OCC"), and the Federal Deposit Insurance Corporation. The time for filing comments has expired, and
the Board has considered the applications and all the
comments received in light of the factors set forth in
the Bank Merger Act and the Federal Reserve Act.
On the basis of commercial bank deposits, Fleet
Bank, with total deposits of approximately $10.2 billion, is the seventh largest commercial bank in New
York.2 Chemical Bank, with total deposits of approximately $50.9 billion, is the largest commercial bank in
the state.
Competitive Considerations
Fleet Bank and Chemical Bank compete directly in six
banking markets in New York.3 In each of these
markets, the increase in the Herfindahl-Hirschman
Index ("HHI") would not exceed the thresholds set
forth in the Department of Justice's Revised Merger
Guidelines4 after considering the competition offered
by thrift institutions.5 In light of these facts, and after
considering the number of competitors remaining in
the markets, the small increases in market concentra-
2. State deposit data are as of June 30, 1993.
3. These markets are the Albany, Buffalo, Elmira-Corning, Olean,
Rochester, and Syracuse banking markets.
4. Under the revised Department of Justice Merger Guidelines, 49
Federal Register 26,823 (June 29, 1984), a market in which the
post-merger HHI is above 1800 is considered to be highly concentrated. In such markets, the Justice Department is likely to challenge
a merger that increases the HHI by more than 50 points. The Justice
Department has informed the Board that a bank merger or acquisition
generally will not be challenged (in the absence of other factors
indicating anti-competitive effects) unless the post-merger HHI is at
least 1800 and the merger or acquisition increases the HHI by at least
200 points. The Justice Department has stated that the higher than
normal threshold for an increase in HHI when screening bank mergers
and acquisitions for anti-competitive effects implicitly recognizes the
competitive effect of limited-purpose lenders and other non-depository financial entities. See Appendix B for the increases in concentration in these markets on a pro forma basis as measured by HHI.
5. 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). Thus, the Board has regularly included thrift
deposits in the calculation of market share on a 50 percent weighted
basis. See, e.g., First Hawaiian, Inc., 77 Federal Reserve Bulletin 52
(1991). In considering the competition offered by thrifts in all banking
markets in this case, thrift deposits are weighted at 50 percent.
171
tion,6 the attractiveness of these markets for entry by
new competitors, and the other facts of record, the
Board has concluded that consummation of the proposal would not result in a significantly adverse effect
on competition in any of these banking markets.
Based on all the facts of record in this case, the
Board concludes that consummation of the proposal
would not have a significantly adverse effect on competition or the concentration of banking resources in
any relevant banking market.
Convenience and Needs Considerations
In considering an application by a state member bank
to acquire another insured depository institution by
merger or to establish an additional branch, the Board
is required to consider the convenience and needs of
the communities to be served and to take into account
the record of performance of the state member bank
under the Community Reinvestment Act (12 U.S.C.
§ 2901 et seq.) ("CRA"). 7 The CRA requires the
federal financial supervisory agencies to encourage
financial institutions to help meet the credit needs of
the local communities in which they operate, consistent with the safe and sound operation of such institutions. To accomplish this end, the CRA requires the
appropriate federal supervisory authority to "assess
an institution's record of meeting the credit needs of
its entire community, including low- and moderateincome neighborhoods, consistent with the safe and
sound operation of the institution," and to take that
record into account in its evaluation of applications
under the Bank Merger Act and to establish domestic
branches.8
In this regard, the Board has considered comments
filed by an organization ("Protestant") that alleges
that Fleet Bank and Chemical Bank have failed to
meet the credit needs of the communities they serve,
based on 1991 HMDA data indicating disparities in the
rates of housing-related loan denials between minority
and non-minority applicants. Protestant also maintains
that allegations made in several pending lawsuits regarding improper mortgage lending practices by a
nonbanking mortgage affiliate of Fleet Bank raise
issues regarding the convenience and needs consider-
6. Upon consummation of this proposal, the HHI in these markets
would increase as follows: (1) Albany, 67 points to 1039; (2) Buffalo,
56 points to 2130; (3) Elmira-Corning, 26 points to 906; (4) Olean, 171
points to 1903; (5) Rochester, 56 points to 1179; and (6) Syracuse, 109
points to 1547.
7. See 12 U.S.C. §§ 321, 1828(c), 2902(3)(C), and 2903(2); see also
12 C.F.R. 208.5 and 208.9.
8. 12 U.S.C. § 2903.
172
Federal Reserve Bulletin • February 1994
ations in this proposal.9 The Board has carefully
reviewed the CRA performance records of Fleet Bank
and Chemical Bank, as well as Protestant's comments,
Fleet Bank's response, and all of the other relevant
facts, 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"). 10
Record of Performance
Under the CRA
A. CRA Performance Examination
The Agency CRA Statement provides that a CRA
examination is an important and often controlling
factor in the consideration of an institution's CRA
record and that these reports will be given great weight
in the applications process.11 In this case, the Board
notes that Fleet Bank received an "outstanding"
rating from its primary federal regulator, the Federal
Reserve Bank of New York, at its most recent examination for CRA performance as of December 16,
1991.12 Chemical Bank also received an "outstanding"
rating for CRA performance from the Federal Reserve
Bank of New York at its most recent examination for
CRA performance as of July 22, 1991.
B. Analysis of HMDA Data
The Board has carefully reviewed the 1991 and 1992
HMDA data reported by Fleet Bank and Chemical
Bank in light of Protestant's comments.13 These data
indicate that Fleet Bank and Chemical Bank have
9. Protestant requests that Fleet Bank and Chemical Bank be
required to conduct an audit of their minority lending practices and to
make certain commitments to improve their overall minority lending
records.
10. 54 Federal Register 13,742 (1989).
11. 54 Federal Register at 13,745.
12. On October 1, 1992, in an internal reorganization, Fleet Bank,
N.A., Buffalo, New York ("Buffalo Bank"), was merged into Fleet
Bank, with Fleet Bank the surviving entity. Buffalo Bank received a
"satisfactory" rating from its primary federal regulator, the OCC, as
of May 20, 1991, the date of its last examination for CRA performance
prior to the merger with Fleet Bank.
13. The actual data cited by Protestant in its comments relate to
Fleet Bank's affiliate bank, Fleet National Bank, Providence, Rhode
Island ("Fleet-RI"), which is a bank that is not involved in this merger
transaction. Although the 1991 Rhode Island data indicate some
disparities between rejection rates for minority applicants when
compared to non-minority applicants, the data also show that Fleet-RI
extended 16 percent of its loans in low- and moderate-income areas
and received and granted a higher percentage of housing-related loan
applications from minorities than did other lenders in its community.
Data in 1992 show some decrease in Fleet-RI's minority and lowincome lending, but the percentage of loans made to minority borrowers remained equal to the average of other lenders in its community.
In addition, Fleet-RI received an "outstanding" CRA performance
rating from its primary federal regulator, the OCC, at its most recent
examination as of October 29, 1990.
extended a significant number and percentage of
home mortgage loans in low- and moderate-income
neighborhoods. In certain areas, however, the data
for Fleet Bank reflect disparities in loan originations
and loan rejection rates for minority applicants when
compared to non-minority applicants. The Board is
concerned when the record of an institution indicates
disparities in lending to minority applicants, and
believes that all banks are obligated to ensure that
their lending practices are based on criteria that
assure not only safe and sound lending, but also
equal access to credit by creditworthy applicants
regardless of race. The Board recognizes, however,
that HMDA data alone provide only an incomplete
measure of an institution's lending in its community.
The Board also recognizes that HMDA data have
limitations that make the data an inadequate basis,
absent other information, for conclusively determining that an institution has engaged in illegal discrimination in making lending decisions.
The Board notes that the most recent examination
of Fleet Bank found no evidence of illegal discrimination or of credit practices that were inconsistent
with the substantive provisions of antidiscrimination
laws and regulations. In this regard, examiners noted
that Fleet Bank solicited credit applications from all
segments of its community, including low- and moderate-income neighborhoods, and that the board of
directors and senior management of Fleet Bank had
developed comprehensive written policies, procedures, training programs, and internal reviews to
ensure that the bank did not illegally discourage or
pre-screen applicants. The examination also found
that HMDA data indicated a reasonable penetration
of lending activity in low- and moderate-income
census tracts, that the bank's delineation of its
community was reasonable and did not arbitrarily
exclude any low- and moderate-income neighborhoods, and that its branches were reasonably accessible by, and all its products and services were
available to, all segments of its community.
Fleet Bank also has taken steps since its last CRA
examination to increase lending to minority and lowand moderate-income borrowers. For example, Fleet
Bank implemented a program in February 1992 requiring a senior consumer lending officer to review
all rejected minority HMDA loan applications, using
more flexible loan underwriting criteria. Since March
1992, Fleet Bank has convened focus groups among
minority customers and among minority branch officers, in order to identify unfilled minority credit and
service needs and improved methods of delivering
services to minority customers. HMDA data for 1992
reflect improvement in both the number of applications received from and the number of loans made to
Legal Developments
minorities by Fleet Bank.14 Fleet Bank also introduced a Community Revitalization Mortgage product, which provides mortgages with no closing fees
and reduced minimum down payments for low- and
moderate-income homebuyers in distressed areas.
The Board also has carefully reviewed Protestant's
comments regarding allegedly improper mortgage
lending practices, principally in Georgia by Fleet Finance, Inc. ("Fleet Finance"), a nonbanking financing
subsidiary of Fleet Financial Group, Inc., Providence,
Rhode Island ("Fleet") which is the parent holding
company of Fleet Bank.15 The Board notes that Fleet
has taken a number of steps to address the issues
raised by these allegations. For example, Fleet has
discontinued its practice of purchasing individual
third-party loans, except for packages in bulk from
regulated financial institutions or the Resolution Trust
Corporation, and has stopped financing home improvements. In addition, Fleet has made significant
changes in senior executive management at the holding company level and the subsidiary level, has reorganized reporting responsibilities under functional
lines, and has centralized decision making authority,
which appear to have improved the operations of its
mortgage subsidiaries. Fleet has also recently entered
into a substantial settlement agreement with the Georgia attorney general that has concluded a year-long
investigation by the attorney general into Fleet's mortgage lending practices in Georgia.16
On the basis of these and all the other facts of
record, including comments received and relevant
examination reports, the Board concludes that convenience and needs considerations, including the CRA
performance records of Fleet Bank and Chemical
Bank, are consistent with approval of these applications. The Board specifically retains jurisdiction and
full supervisory authority to take appropriate action in
14. For example, minority applications increased by 110 percent
between 1991 and 1992, while non-minority applications increased by
47 percent. Loans by Fleet Bank to minority borrowers increased
from 2.8 percent to 4.0 percent of all loans, while the average for all
lenders in its community declined from 5.2 percent to 4.5 percent.
15. Fleet has been sued in a number of cases in Georgia and other
states. Some of these cases, including a racial discrimination case in
Georgia and a mortgage escrow account overcharge case involving a
number of states, have been settled. In other cases, Fleet's practices
have been found to be consistent with applicable law. Cases that are
still pending against Fleet have not gone to trial.
16. Under the terms of this settlement, qualified borrowers are
entitled to compensatory damages, interest rate reductions, and
rebate of origination "points" in excess of 10 percent, and Fleet has
committed to fund $70 million in loans to low-income borrowers over
the next three to five years. Fleet has also agreed to certain limitations
on fees and interest charges for three years following the agreement.
In addition, Fleet has reached an agreement with the Massachusetts
Attorney General by establishing a $12 million mortgage program to
compensate Fleet borrowers in that state, and has established a
nationwide, 10-point program to permit refinancings by qualifying
borrowers from Fleet Finance.
173
the event that a court determines, or a subsequent
examination finds, that a subsidiary of Fleet has engaged in illegal activities or that Fleet's initiatives in
any of its subsidiaries prove to be inadequate. Fleet
Bank and Fleet are hereby directed to inform the
Board promptly of each material development in the
pending litigation, and of any future claims or lawsuits
involving similar allegations.
Other Considerations
The Board has considered the managerial factor in this
case in light of the recently completed examination of
Fleet Bank conducted by the Federal Reserve Bank of
New York and a full-scope inspection of Fleet conducted by the Federal Reserve Bank of Boston at the
request of the Board. In this regard, Fleet has taken
substantive steps to improve the operations of all of its
banking and nonbanking subsidiaries, including the
management reorganization and initiatives described
above as well as other modifications to its internal
controls, policies, training, and management information systems. While many of these changes are relatively recent and are still being implemented, the
Board also notes that this proposal represents a relatively small acquisition for Fleet. Based on all the facts
of record in this case, including the reforms initiated
by Fleet, the relative size of the acquisition, and the
results of examinations and inspections, the Board
concludes that managerial considerations are consistent with approval. Financial resources of Fleet and
Fleet Bank are satisfactory, and future prospects of
Fleet Bank and of Chemical Bank, and the other
supervisory factors the Board must consider under the
Bank Merger Act are also consistent with approval. In
addition, the Board has considered the factors it is
required to consider when approving applications for
the establishment of branches pursuant to section 9 of
the Federal Reserve Act, and finds those factors to be
consistent with approval.17
17. Protestant has requested that the Board hold a public meeting or
hearing on these applications. The Board is not required to hold a
public hearing in these applications under the Bank Merger Act or the
Federal Reserve Act. Under its rules, the Board may, in its discretion,
hold a public meeting or hearing on an application to clarify factual
issues related to the application and to provide an opportunity for
testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The
Board has carefully considered Protestant's request, and the written
comments submitted by Protestant. In the Board's view, interested
parties have had ample opportunity to submit and have submitted
substantial written comments that have been considered by the Board.
In light of the foregoing and all the facts of record, the Board has
determined that a public meeting or hearing is not necessary to clarify
the factual record in this application, or otherwise warranted in this
case. Accordingly, the request for a public meeting or hearing on these
applications is hereby denied.
174
Federal Reserve Bulletin • February 1994
Based on the foregoing and other facts of record, the
Board has determined that the application should be,
and hereby is, approved. The Board's approval is
specifically conditioned upon compliance by Fleet
Bank with all the commitments made in its applications. For purposes of this action, the commitments
discussed in this order shall be deemed to be conditions imposed in writing by the Board in connection
with its findings and decisions, and, as such, may be
enforced in proceedings under applicable law.
This transaction shall not be consummated before
the thirtieth calendar day following the effective date
of this order, or later than three months after the
effective date of this order, unless such period is
extended for good cause by the Board or by the
Federal Reserve Bank of New York, acting pursuant
to delegated authority.
By order of the Board of Governors, effective
December 23, 1993.
Voting for this action: Chairman Greenspan, Vice Chairman Mullins, and Governors Angell, Kelley, La Ware, and
Phillips. Voting against this action: Governor Lindsey.
JENNIFER J . JOHNSON
Associate Secretary of the Board
Appendix A
Locations of Chemical Bank branches to be
acquired by Fleet Bank:
(1) 1972 Albany-Schenectady Road, Albany,
New York
(2) 63 State Street, Albany, New York
(3) 999 Broadway, Buffalo, New York
(4) 420 East Main Street, Buffalo, New York
(5) 2690 Walden Avenue, Cheektowaga, New York
(6) Clifton Country Mall, Clifton Park, New York
(7) 360 Delaware Avenue, Delmar, New York
(8) 807 Fairport Road, East Rochester, New York
(9) 6600 Pittsford-Palmyra Road, Fairport, New York
(10) One Old Loudoun Road, Latham, New York
(11) 100 Main Street, Lockport, New York
(12) 500 Delaware Avenue, Olean, New York
(13) 1999 Ridge Road, Ontario, New York
(14) 7 Main Street, Portville, New York
(15) 3333 West Henrietta Road, Rochester, New York
(16) 2317 Lyell Avenue, Rochester, New York
(17) 183 East Main Street, Rochester, New York
(18) 1855 Monroe Avenue, Rochester, New York
(19) 3380 Monroe Avenue, Rochester, New York
(20) 1842 East Ridge Road, Rochester, New York
(21) 2450 Ridge Road, Rochester, New York
(22) 306 State Street, Schenectady, New York
(23) 100 Main Street, South Glen Falls, New York
(24) 361 South Salina Street, Syracuse, New York
(25) 1802 Teall Avenue, Syracuse, New York
(26) 1188 Niagara Falls Boulevard, Tonawanda,
New York
(27) 120 Hoosick Street, Troy, New York
(28) 964 Ridge Road, Webster, New York
(29) 5712 Main Street, Williamsville, New York
Appendix B
Banking markets in which the pro forma increase in
the HHI would not exceed the Department of
Justice's Revised Merger Guidelines:
(1) The Albany banking market is approximated by
Albany, Columbia, Fulton, Greene, Hamilton,
Montgomery, Rensselaer, Saratoga, Schenectady,
Schoharie, Warren, and Washington Counties in
New York. The HHI would increase by 67 points to
1039, and the market would become moderately
concentrated.
(2) The Buffalo banking market is approximated by
Erie and Niagara Counties in New York. The HHI
would increase by 56 points to 2130, and the market
would remain highly concentrated.
(3) The Elmira-Corning banking market is approximated by Chemung and Steuben Counties in New
York. The HHI would increase by 26 points to 906,
and the market would remain unconcentrated.
(4) The Olean banking market is approximated by
Allegany County (less the eastern and two northern
tiers of townships) and Cattaraugus County (less the
two western and northern tiers of townships) in New
York. The HHI would increase by 171 points to
1903, and the market would become highly concentrated.
(5) The Rochester banking market is approximated
by Genessee, Livingston, Monroe, Ontario, Orleans, Seneca, Wayne, Wyoming, and Yates Counties in New York. The HHI would increase by 56
points to 1179, and the market would remain moderately concentrated.
(6) The Syracuse banking market is approximated
by Cayuga, Cortland, Madison, Onondaga, and Oswego Counties in New York. The HHI would increase by 109 points to 1547, and the market would
remain moderately concentrated.
Dissenting Statement of Governor Lindsey
I dissent from the Board's action in this case because,
in my view, the record is not sufficient to demonstrate
that managerial factors support approval of this acquisition.
Legal Developments
The record in this case contains a number of allegations of improper practices by Fleet's nonbanking
subsidiaries and criticisms of other practices by Fleet.
These practices appear to have been possible because
of weak internal controls by management in a number
of areas. Fleet's management has recently taken steps
to change its policies and improve its internal controls
and supervision, including instituting training, compliance and reporting policies. However, in a number of
areas, including compliance procedures and practices,
the evidence indicates that Fleet has not fully implemented its corrective measures or that these measures
have not been in place for a sufficient period of time to
evaluate their effectiveness.
In reaching this conclusion I have carefully considered Fleet's announced remedial programs, its recently announced settlement of a year-long investigation by the Georgia Office of the Attorney General and
its efforts to resolve some of its outstanding litigation.
I believe that the applications process places more
importance on the corrective measures that have a
demonstrated record of preventing problems from
occurring rather than providing remedies for past
problems. I have also considered these steps in light of
a recent full-scope inspection of Fleet by the Federal
Reserve Bank of Boston.
In my view, the acquisition of 29 branches is a
significant expansion that should not be undertaken
without a clear record of effective steps to address
identified weaknesses of performance. Because this
record is not sufficient to date, in my weighing of the
evidence, I would deny this proposal.
December 23, 1993
West One Bank, Idaho
Boise, Idaho
Order Approving the Merger of Banks and the
Establishment of Branches
West One Bank, Idaho, Boise, Idaho ("Bank"), a
state member bank, has applied under section 18(c) of
the Federal Deposit Insurance Act (12 U.S.C.
§ 1828(c)) (the "Bank Merger Act") to acquire Idaho
State Bank, Glenns Ferry, Idaho ("Idaho Bank").
Bank also has applied under section 9 of the Federal
Reserve Act (12 U.S.C. § 321) to establish branches at
the locations where Idaho Bank currently operates
branches.
Notice of the applications, affording interested persons an opportunity to submit comments, has been
given in accordance with the Bank Merger Act and the
Board's Rules of Procedure (12 C.F.R. 262.3(b)). As
175
required by the Bank Merger Act, reports on the
competitive effects of the merger were requested from
the United States Attorney General, the Office of the
Comptroller of the Currency ("OCC"), and the Federal Deposit Insurance Corporation ("FDIC"). The
time for filing comments has expired, and the Board
has considered the applications and all comments
received in light of the factors set forth in the Bank
Merger Act and in section 9 of the Federal Reserve
Act.
Bank is the largest commercial banking organization
in Idaho, controlling deposits of $2.7 billion, representing approximately 35 percent of total deposits in
commercial banks in the state.1 Idaho Bank is the 14th
largest commercial banking organization in Idaho,
controlling deposits of $43.6 million, representing less
than 1 percent of total deposits in commercial banks in
the state. Upon consummation of this proposal, Bank
would remain the largest commercial banking organization in Idaho, controlling deposits of $2.8 billion,
representing approximately 35.6 percent of total deposits in commercial banks in the state.
Competitive Considerations
Under the Bank Merger Act, the Board is required to
consider the effects that a proposed merger would
have on competition.2 Bank and Idaho Bank compete
directly in five banking markets in Idaho: Mountain
Home, Boise, Payette-Ontario-Weiser, Blaine
County, and Twin Falls. In the Mountain Home
banking market,3 Bank is the second largest commercial bank or thrift institution ("depository institution"), controlling deposits of $25.4 million, representing 34.9 percent of total deposits in depository
institutions in the market ("market deposits"). 4
Idaho Bank is the fourth largest depository institution in the market, controlling deposits of $3.9 million, representing 5.4 percent of market deposits.
Upon consummation of this proposal, Bank would
remain the second largest depository institution and
the third largest financial institution in the Mountain
Home banking market, controlling deposits of
1. State deposit data are as of June 30, 1993.
2. See 12 U.S.C. § 1828(c)(5).
3. The Mountain Home banking market includes the towns of
Mountain Home and Grand View, Idaho.
4. Market data for the Mountain Home banking market are as of
June 30, 1993. 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).
Thus, the Board has regularly included thrift deposits in the calculation of market share on a 50 percent weighted basis. See, e.g., First
Hawaiian Inc., 77 Federal Reserve Bulletin 52 (1991).
176
Federal Reserve Bulletin • February 1994
$29.3 million, representing 40.3 percent of market
deposits. The Herfindahl-Hirschman Index ("HHI")
would increase 376 points to 3833.5
The Board believes that several factors indicate that
this increased level of concentration in the Mountain
Home banking market, as measured by the HHI,
overstates the competitive effects of this proposal. In
particular, Idaho Bank is a very weak competitor and
consummation of this proposal would have little effect
on actual competition in the Mountain Home banking
market. Idaho Bank has been the subject of state and
federal supervisory actions, and the bank currently
makes no loans in the market and does not employ a
loan officer to serve the market. Idaho Bank's presence in the market is limited to a single bank branch
with two tellers. The competitive effects of this proposal also are mitigated by the presence of a large
credit union in the Mountain Home banking market.
This credit union, the largest financial institution in the
Mountain Home banking market, is open for membership to almost all residents in the market.
The Board also has considered the public benefits of
the proposal on the convenience and needs of the
community to be served. Idaho Bank is the only
depository institution in Grand View, Idaho, and Bank
has committed to maintain the Grand View branch of
Idaho Bank as a full-service branch, employ a full-time
loan officer, and offer loans and a full range of other
banking services.
The Attorney General indicated that consummation
of this proposal would not have a significantly adverse
effect on competition in the Mountain Home banking
market or any other relevant banking market. Neither
the OCC nor the FDIC objected to consummation of
the proposal or indicated that the proposal would have
any significantly adverse competitive effects. Accordingly, based on all the facts of record, including the
number of mitigating competitive considerations and
benefit to the convenience and needs of the communities served, the Board concludes that consummation
of this proposal is not likely to result in any signifi-
5. Under the revised Department of Justice Merger Guidelines, 49
Federal Register 26,823 (June 29, 1984), a market in which the
post-merger HHI is between 1000 and 1800 is considered moderately
concentrated. A market in which the post-merger HHI is above 1800
is considered to be highly concentrated. In such markets, the Justice
Department is likely to challenge a merger that increases the HHI by
more than 50 points. The Justice Department has informed the Board
that a bank merger or acquisition generally will not be challenged (in
the absence of other factors indicating anti-competitive effects) unless
the post-merger HHI is at least 1800 and the merger or acquisition
increases the HHI by at least 200 points. The Justice Department has
stated that the higher than normal threshold for an increase in the HHI
when screening bank mergers and acquisitions for anti-competitive
effects implicitly recognizes the competitive effect of limited-purpose
lenders and other non-depository financial entities.
cantly adverse effect on competition in the Mountain
Home banking market.
In the Boise, Payette-Ontario-Weiser, Blaine
County, and Twin Falls banking markets, consummation would result in slight increases in the concentration of market deposits that do not exceed the Department of Justice Merger Guidelines.6 In addition,
numerous competitors would remain in all these markets. Based on all the facts of record, the Board
concludes that consummation of this proposal would
not result in significantly adverse effects on competition in these or any other relevant banking market.
Other Considerations
Based on all the facts of record, the Board concludes
that considerations relating to the financial and managerial resources and future prospects of Bank and
Idaho Bank, and the convenience and needs of the
community to be served,7 also are consistent with
approval of the applications filed by Bank under the
Bank Merger Act.
The Board also has reviewed the factors it is required to consider in applications for the establishment
and operation of branches under the Federal Reserve
Act.8 Based on all the facts of record, the Board
believes that these factors, including the financial
condition of Bank, the general character of its management, and the proposed exercise of corporate pow-
6. Market share data for the four remaining banking markets are as
of June 30, 1992. Upon consummation of this proposal, Bank would
become the largest of nine depository institutions in the Boise banking
market, controlling deposits of $902 million, representing 45 percent
of market deposits. The HHI would increase 37 points to 2764. Bank
would become the second largest of ten depository institutions in the
Payette-Ontario-Weiser banking market, controlling deposits of
$101 million, representing 24 percent of market deposits. The HHI
would increase 91 points to 1741. In the Blaine County banking
market, Bank would become the smallest of four depository institutions, controlling deposits of $11.5 million, representing 7 percent of
market deposits. The HHI would increase 18 points to 3115. Finally,
in the Twin Falls banking market, Bank would become the second
largest of nine depository institutions, controlling deposits of
$214 million, representing 28.1 percent of market deposits. The HHI
would increase 116 points to 2344.
7. The Board has received comments from an individual ("Protestant' ') who claims generally that Bank's acquisition of Idaho Bank will
result in the loss of a small bank that has been responsive to the credit
needs of the community, and replace it with a large institution whose
centralized decision making will not be responsive to community
credit needs. The Board notes that Bank received a satisfactory rating
for performance under the Community Reinvestment Act from the
Federal Reserve Bank of San Francisco in September 1993. In
addition, Bank has committed to expand the products and services
offered to customers of Idaho Bank, increase lending to customers of
Idaho Bank, and enhance the resulting institution's ability to service
the needs of its delineated community. Based on all facts of record,
the Board does not believe that Protestant's comments warrant denial
of this proposal.
8. See 12 U.S.C. § 322.
Legal Developments
ers, are consistent with approval and the purposes of
section 9 of the Federal Reserve Act.
Conclusion
Based on the foregoing and other facts of record, the
Board has determined that the applications should be,
and hereby are, approved. The Board's approval is
specifically conditioned upon compliance by Bank
with all the commitments made in connection with
these applications. For purposes of this action, these
commitments and conditions are both considered conditions imposed in writing by the Board in connection
with its findings and decisions, and, as such, may be
enforced in proceedings under applicable law.
This transaction shall not be consummated 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 San Francisco, acting pursuant to delegated authority.
By order of the Board of Governors, effective
December 20, 1993.
Voting for this action: Chairman Greenspan, Vice Chairman Mullins, and Governors Angell, Kelley, LaWare, Lindsey, and Phillips.
J E N N I F E R J . JOHNSON
Associate Secretary of the Board
ORDERS ISSUED UNDER FEDERAL RESERVE
ACT
Republic National Bank of New York
New York, New York
Order Granting Consent to Acquire Westpac (U.K.)
Limited, London, England, and Granting Approval
to Engage in Platinum and Palladium Dealing
Activities Abroad
Republic National Bank of New York ("Republic
Bank"), New York, New York, a national bank, has
applied under section 25 of the Federal Reserve Act
and section 211.5(c)(3) of the Board's Regulation K
(12 C.F.R. 211.5(c)(3)) for consent to acquire 100 percent of the shares of Westpac (U.K.) Limited
("WUKL"), London, England, thereby acquiring indirectly Mase Westpac Limited ("Mase Westpac"), a
U.K. bank wholly owned by WUKL, and for approval
to engage through Mase Westpac and its subsidiaries
177
in trading and dealing in gold, silver, platinum and
palladium, and in related activities.
Republic Bank is a subsidiary of Republic New
York Corporation, a bank holding company. Republic
New York Corporation is the 20th largest banking
organization in the United States, with consolidated
assets of $38 billion as of September 30, 1993.1 WUKL
had consolidated assets of approximately $1.5 billion
as of September 30, 1993. Republic Bank engages in,
among other lines of business, gold and silver dealing
and the provision of related depository services. Republic Bank proposes to acquire 100 percent of the
shares of WUKL through Republic Overseas Banks
Holding Corporation, a wholly owned operating subsidiary of RNB. WUKL's sole holding is its 100 percent interest in Mase Westpac, an authorized bank
licensed and supervised by the Bank of England.
Mase Westpac is one of the leading dealers in gold,
silver, platinum and palladium in world markets. Mase
Westpac deals and makes markets in these metals in
the spot and forward market, buys and sells options on
precious metals, and is one of the five members of the
London Gold Fixing, which twice daily sets the price
that is a leading reference point in gold transactions in
world markets.2 As part of its precious metals business, Mase Westpac also clears bullion transactions,
holds gold and silver for customers and counterparties, maintains deposits for customers and provides
loans, leases and consignment agreements relating to
gold and silver to gold and silver producers, fabricators and industrial users.
Mase Westpac and subsidiaries of Mase Westpac
are members of the New York Commodity Exchange
and the Sydney Futures Exchange, where they buy
and sell options on gold and platinum for their own
account and for the account of affiliates, in each case
solely for hedging purposes. In addition, Republic
Bank proposes to engage, through Mase Westpac and
its subsidiaries, in other activities permissible to U.S.
banking organizations under Regulation K, such as
foreign exchange trading, project financing, gold and
silver loans and leases, and extension of gold and
silver consignment arrangements.
Mase Westpac conducts its business from its London headquarters and through subsidiaries and representative offices in Australia and Hong Kong.3 In
1. Republic Bank had consolidated assets of $28.8 billion as of
September 30, 1993.
2. Mase Westpac also is a market-making member of The London
Bullion Market Association and a member of the London Platinum
and Palladium Market. Mase Westpac's activities in precious metals
are supervised and regulated by the Bank of England and the United
Kingdom's Securities and Futures Authority.
3. Mase Westpac Hong Kong Limited, Mase Westpac's direct
wholly owned Hong Kong subsidiary, makes a market in gold and
178
Federal Reserve Bulletin • February 1994
addition, Mase Westpac maintains a state licensed
branch in New York, New York, and does business
through a wholly owned subsidiary, Mase Westpac,
Inc. ("MWI"), a Delaware corporation based in New
York, New York. The New York branch of Mase
Westpac presently engages in precious metals trading
and precious-metals-related financing activities. MWI
currently holds a limited number of gold loans and
does not propose to solicit or make any other loans or
engage in any other activities. Republic Bank has
committed to the Board that it will terminate all of the
activities of MWI and Mase Westpac's New York
branch within six months of the proposed acquisition,
and that it will not reactivate MWI without the written
consent of the Board.4 Mase Westpac also operates a
representative office in Denver, which would be converted into a loan production office of Republic Bank
within three months of consummation of the acquisition.
The activities of trading or dealing in platinum and
palladium are not on the list of activities that the Board
has found to be usual in connection with the transaction of banking or financial operations abroad.
12 C.F.R. 211.5(d).5 In reviewing proposals by U.S.
banking organizations to engage in activities overseas,
the Board has recognized that local institutions in
other banking and financial systems are often permitted to engage in activities that have not been authorized for U.S. banking organizations under applicable
U.S. laws and regulations. In the Federal Reserve Act,
the Board has been granted authority to permit activities abroad that are generally not authorized in the
silver on a spot and forward basis. Mase Westpac also owns
91.3 percent of the shares of Mase Westpac Australia Limited ("Mase
Westpac Australia"), a limited liability company based in Sydney,
Australia, which trades precious metals for its own account, provides
quotes in gold and silver and buys and sells precious metals options.
Westpac Banking Corporation, WUKL's current owner, owns the
additional shares of Mase Westpac Australia, which will be transferred to Republic Bank or Republic Overseas Banks Holding Corporation in connection with the sale of WUKL. Mase Westpac Australia
holds a portfolio of gold loans to gold producers, markets precious
metals hedging facilities, and wholly owns Mase Westpac Australia
(NZ) Limited, which facilitates lending transactions between its
parent and New Zealand customers.
4. Section 211.5(b)(4) of Regulation K requires that United States
banking organizations divest themselves of their stakes in any foreign
subsidiary that engages directly or indirectly in any U.S. activity not
permissible to an Edge corporation, unless the Board authorizes
retention.
5. National banks are authorized to trade gold and silver in the spot,
forward and options markets for their own accounts, and such
activities are permissible abroad under Regulation K. 12 U.S.C. 24
(Seventh) expressly authorizes national banks to buy and sell 'coin
and bullion', which consistently has been read to include gold and
silver coin and bullion. The Office of the Comptroller of the Currency
("OCC") has determined that national banks may buy and sell options
on gold and silver for hedging purposes and for purposes of arbitrage.
See, e.g., OCC Interpretive Letter No. 494 (December 20, 1989).
United States for bank holding companies and subsidiaries of national banks. 12 U.S.C. § 601.
In the exercise of that authority, the Board has
adhered to the policy that the foreign activities it
authorizes should be of a banking or financial, as
opposed to commercial, nature, or that such activities
should be usual in connection with banking or other
financial operations abroad. The Board also may consider whether the conduct of the activity would enable
U.S. banking organizations to compete more effectively with foreign organizations in the provision of
banking and other financial services. In addition, the
Board takes into account whether the performance of
the activity by a U.S. banking organization overseas is
consistent with the prudent conduct and management
of the company's banking and nonbanking organizations. In this regard the Board takes into consideration
the risks inherent in the activity, especially whether
those risks are of a type and nature normally associated with banking or activities conducted by banks.
The Board also examines the effect of the activity on
the capital and managerial resources of the U.S.
banking organization.
The Board previously has approved trading and
dealing in platinum in the spot, forward, futures and
options markets in the U.K. by a subsidiary of a U.S.
bank.6 The Board's determination in that instance that
platinum dealing is financially-related and usual in
connection with the transaction of banking or other
financial operations in the United Kingdom applies
equally to this case.7
The Board has not previously approved palladium
trading outside the United States by either regulation
or order. Several factors indicate that trading in palladium is not functionally different from trading in
platinum. The markets for the two metals have much
in common. Platinum and palladium are members of
the same family of metals and generally trade in
tandem; precious metals counterparties view trading
in both metals as closely related. The London Platinum and Palladium Market ("LPPM"), a professional
association of which Mase Westpac is a marketmaking member, sets standards, prices and settlement
6. J.P. Morgan & Co. Incorporated, 76 Federal Reserve Bulletin
552 (1990) ("Morgan").
7. In making this determination in its Morgan order, the Board
noted functional similarities between platinum dealing and the permissible activities of dealing in gold and silver bullion, the fact that the
same types of participants are active in the gold, silver and platinum
markets, and the substantial involvement of banking organizations in
the U.K. platinum market. These factors remain unchanged in this
case. Moreover, since the issuance by the Board of the Morgan order,
the OCC has determined that national banks have the power to buy
and sell platinum coins and bullion for their own account and the
account of customers, thereby further establishing that platinum
trading is of a banking or financial nature. OCC Interpretive Letter
No. 553 (May 2, 1991).
Legal Developments
procedures for platinum and palladium alike, and
requires that any LPPM member that makes a market
in platinum also make a market in palladium. According to Republic Bank, just as in the gold, silver and
platinum markets, the predominant participants in the
palladium market are central banks, institutional investors and industrial users. U.K. banks also play a
major role in the palladium market, since six of the
nine market-making members of the LPPM are banks.
Finally, Republic Bank contends that its competitive
position in foreign precious metals markets would be
injured if Mase Westpac's palladium market-making
activities were required to be discontinued, because
the rules of the LPPM would then require Mase
Westpac to cease making a market in platinum as well.
Based on the foregoing and other facts of record, the
Board has determined that the palladium dealing and
related activities proposed by Republic Bank are
financially-related and usual in connection with the
transaction of banking or other financial operations in
the United Kingdom.
In assessing whether the risks of platinum dealing
were consistent with approval in the Morgan order,
the Board noted the applicant's experience in managing the related risks posed by bullion dealing, as well
as the applicant's proposed policies and procedures
for assessing and controlling the risks of platinum
dealing. As a major established dealer in bullion,
platinum and palladium, Mase Westpac has substantial
expertise and a record of success in managing the risks
associated with the trading of platinum and palladium.
Republic Bank, which also has expertise in trading
bullion under existing risk limitation and control policies of its own, has stated that it plans to integrate
Mase Westpac's operations into Republic Bank's existing risk management systems.
Republic Bank's investment in WUKL will be relatively minor in relation to Republic Bank's total capital. In view of the size of the investment, Republic
Bank's and Mase Westpac's experience in precious
metals trading and management of the associated
risks, and Republic Bank's plans to integrate Mase
Westpac into Republic Bank's existing risk management and monitoring systems, it does not appear that
the conduct of platinum and palladium trading and the
other activities proposed to be conducted would result
in undue risk to Republic Bank.
Based on the foregoing and other facts of record,
and the fact that the proposed acquisition would
enhance Republic Bank's ability to compete in the
precious metals markets outside the United States
through expanded global precious metals trading capability and Mase Westpac's membership in the London Gold Fixing, the Board has determined that the
proposed acquisition should be approved. The Board
179
has further determined on the basis of the record that
the conduct of the proposed activities is consistent
with the supervisory purposes of the Federal Reserve
Act. Accordingly, the application is approved. Approval of this application is specifically conditioned on
compliance by Republic Bank with the commitments
made in connection with this application. The commitments referred to above are conditions imposed in
writing by the Board in connection with its decision,
and may be enforced under applicable law against
Republic Bank and its affiliates.
By order of the Board of Governors, effective
December 22, 1993.
Voting for this action: Chairman Greenspan, Vice Chairman Mullins, and Governors Kelley, Lindsey, and Phillips.
Absent and not voting: Governors Angell and Laware.
JENNIFER J. JOHNSON
Associate Secretary of the Board
ORDERS ISSUED UNDER INTERNATIONAL
BANKING ACT
Banco de Chile
Santiago, Republic of Chile
Order Approving Establishment of an Agency
Banco de Chile ("Bank"), Santiago, Republic of
Chile, 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 Miami, Florida. 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
Miami, Florida (The Miami Herald, November 2,
1992). The time forfilingcomments has expired and no
public comments were received.
Bank is the largest private bank in Chile with
consolidated assets of $5.2 billion as of June 30, 1993.
The shares of Bank are widely held and are listed and
traded on the Santiago Stock Exchange. Bank is
authorized to provide a full range of banking services
and concentrates in corporate lending and trade finance.
Bank has six subsidiaries in Chile engaged in financial services, and has investments in four Chilean
180
Federal Reserve Bulletin • February 1994
servicing companies engaged in ATM network and
credit card administration and securities activities.
Bank maintains a federal branch in New York and a
representative office in Frankfurt, Germany.
Bank does not engage in nonbanking activities in the
United States and will remain a qualifying foreign
banking organization under Regulation K after establishing the proposed agency. 12 C.F.R. 211.23(b).
In order to approve an application by a foreign bank
to establish an agency in the United States, the IB A
and Regulation K require the Board to determine that
the foreign bank engages directly in the business of
banking outside of the United States and has furnished
to the Board the information it needs to assess adequately the application. The Board also must determine that each of the foreign bank applicant and any
foreign bank parent is subject to comprehensive supervision or regulation on a consolidated basis by its
home country supervisor. 12 U.S.C. § 3105(d)(2),
12 C.F.R. 211.24(c)(1). The IBA and Regulation K
also permit the Board to take into account additional
standards. 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R.
211.24(c)(2).
Bank engages directly in the business of banking
outside of the United States through its banking operations in Chile. Bank also has provided the Board with
the information necessary to assess the application
through submissions that address the relevant issues.
Regulation K provides that a foreign bank will be
considered to be subject to comprehensive supervision
or regulation on a consolidated basis if the Board
determines that the foreign bank is supervised and
regulated in such a manner that its home country
supervisor receives sufficient information on the
bank's worldwide operations, including its relationship to any affiliate, to assess the bank's overall
financial condition and its compliance with law and
regulation.1 12 C.F.R. 211.24(c)(1). In making its determination on this application, the Board considered
the following information.
1. In assessing this standard, the Board considers, among other
factors, the extent to which the home country supervisor:
(i) Ensures that the bank has adequate procedures for monitoring
and controlling its activities worldwide;
(ii) Obtains information on the condition of the bank and its
subsidiaries and offices through regular examination reports,
audit reports, or otherwise;
(iii) Obtains information on the dealings with and relationships
between the bank and its affiliates, both foreign and domestic;
(iv) Receives 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) Evaluates 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.
The Superintendency of Banks and Financial Institutions (the "Superintendency") is the primary supervisory authority for all banks in Chile and, as such, is
the home country supervisor of Bank. The Superintendency authorizes the creation of new banks through
issuance of licenses, and monitors the compliance of
existing banks with applicable laws and regulations. In
addition, approval of the Superintendency is required
for Chilean banks to complete mergers and acquisitions, to engage in new activities and to establish
operations outside of Chile. The Central Bank of Chile
exercises a supplementary role in supervising Chilean
banks through its control of reserve requirements,
interest rates, and foreign exchange. The Central Bank
consults with the Superintendency regarding the condition of Chilean banks and receives regulatory reports
submitted by banks to the Superintendency.
The Superintendency obtains information on Bank's
operations through on-site examinations and its review
of audit and financial reports submitted by Bank. The
Superintendency conducts targeted on-site examinations approximately once a year. These targeted examinations focus on specific areas of Bank's operations including accounting procedures, credit
processes, compliance with lending limits, conformity
with restrictions on insider transactions, internal controls, or policies and procedures for compliance with
applicable laws and regulations. Bank's asset quality
also is reviewed annually. In addition, the Superintendency conducts surprise on-site examinations as necessary. The Superintendency receives frequent and
comprehensive reports on Bank's condition and operations on both an unconsolidated and consolidated
basis. Bank is required annually to file financial statements audited by its external auditors.
In addition to the on-site reviews conducted by the
Superintendency, Bank's external auditors conduct
on-site reviews of Bank four times a year. Bank's
external auditors review Bank's electronic data processing and computer systems, internal controls, financial statements, tax accounting, and policies and
procedures.
With respect to Bank's internal methods of monitoring its worldwide operations, Bank relies on internal
audits and reporting requirements. As noted above,
the Superintendency reviews Bank's internal controls
during its examinations and Bank provides reports to
the Superintendency on the scope of its internal audits.
The Superintendency receives information and
monitors the condition of Bank's affiliates through
financial reporting requirements, coordination with
other regulatory authorities, and the imposition of
lending limits. Bank's financial leasing and financial
consulting subsidiaries, as well as the servicing com-
Legal Developments
panies in which it holds shares, are supervised by the
Superintendency. These companies provide periodic
financial reports to the Superintendency. The Superintendency of Securities and Insurance (the "Superintendency of Securities") supervises Bank's subsidiaries in mutual fund administration and the securities
brokerage business through annual examinations and
the review of regular financial reports. These subsidiaries are also subject to general regulations imposed
by the Superintendency. The Superintendencies of
Banks and of Securities are sister agencies under the
Chilean Ministry of Finance (the "Ministry"), and
engage in both formal and informal arrangements to
share supervisory information through the Ministry.
Chilean banking laws prohibit the extension of
credit to affiliates on terms more favorable than those
offered to third parties. Aggregate loans by Bank to
affiliates may not exceed five percent of Bank's total
paid-in capital and reserves. The Superintendency
receives a number of reports concerning transactions
and relationships between Bank and its affiliates.
Based on all of 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 by its home country
supervisor.
In considering this application, the Board also has
taken into account the additional standards set forth in
section 7 of the IB A. 12 U.S.C. § 3105(d)(3)-(4). Bank
has received the consent of its home country supervisor to establish the proposed agency. In addition,
subject to certain conditions, the Superintendency has
agreed to cooperate in providing the Board with information on Bank's operations.
Chile has not adopted the risk-based capital standards of the Basle Accord. Under Chilean law, Bank's
total liabilities may not exceed a specified multiple of
capital and reserves. Bank is in compliance with this
requirement. Bank has also provided capital information in a risk-based format and Bank's capital is in
excess of the minimum levels that would be required
by the Basle Accord and is considered equivalent to
capital that would be required of a U.S. banking
organization.
Managerial and other financial resources of Bank
are also considered consistent with approval.2 Bank,
which has a branch and representative office outside
Chile, appears to have the experience and capacity to
support the additional office in the United States. In
2. As a result of government intervention to deal with a financial
crisis in Chile in the 1980s, Bank is required to make payments to the
Central Bank under a subordinated commitment. Despite this requirement, Bank has maintained risk-based capital ratios consistent with
the Basle capital standards.
181
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
agency 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 not prohibited by law or regulation. The Board
has reviewed relevant provisions of Chilean law and
has communicated with the appropriate government
authorities concerning access to information. The
Board notes that Bank may not provide certain information without the consent of third parties. In this
regard, Bank has committed to cooperate with the
Board to obtain approvals or consents that may be
required for the Board to gain access to information
that the Board may request. 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 an
agency should be, and hereby is, approved. Should
any restrictions on access to information regarding 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 statutes, the Board may require
termination of any of Bank's direct or indirect activities in the United States. 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.3 The commitments and conditions referred to
above are conditions imposed in writing by the Board
in connection with its decision, and may be enforced in
proceedings under 12 U.S.C. § 1818 or 12 U.S.C.
§ 1847 against Bank, its offices and its affiliates.
3. The Board's authority to approve the establishment of the
proposed agency parallels the continuing authority of the State of
Florida Department of Banking and Finance to license offices of a
foreign bank. The Board's approval of this application does not
supplant the authority of the State of Florida, and its agent, the
Department of Banking and Finance, to license the proposed agency
of Bank in accordance with any terms or conditions that the Department of Banking and Finance may impose.
182
Federal Reserve Bulletin • February 1994
By order of the Board of Governors, effective
December 16, 1993.
Voting for this action: Vice Chairman Mullins and Governors Angell, Kelley, LaWare, Lindsey, and Phillips. Absent
and not voting: Chairman Greenspan.
JENNIFER J . JOHNSON
Associate Secretary of the Board
Dah Sing Bank, Ltd.
Hong Kong
Order Approving Establishment of a Branch
Dah Sing Bank, Ltd. ("Bank"), Hong Kong, 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 federally
licensed branch in Alhambra, 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 (StarNews, Pasadena, California, September 20, 1991). The
time forfilingcomments has expired and the Board has
considered the application and all comments received.
Bank, with assets of $2.3 billion as of June 30, 1993,
is the 18th largest bank in Hong Kong.1 Bank operates
34 branch offices in Hong Kong and controls eight
direct domestic subsidiaries engaged in banking, investment, real estate and insurance activities. Bank
also has one branch in the United States.
The proposed branch would engage in trade finance,
commercial mortgages, and provide letters of credit,
including advising and remittance, services for Bank's
Hong Kong operations. The proposed branch intends
to take wholesale deposits from both Hong Kong and
local customers, but would not take retail deposits.2
Bank, which currently operates a branch in San Francisco, California, does not engage in nonbanking activities in the United States and would continue to be
a qualifying foreign banking organization within the
1. Data are as of December 31, 1992, unless otherwise noted.
2. In accepting deposits the proposed branch would not acquire or
accept domestic retail deposits that require deposit insurance
(12 U.S.C. § 3104(c)). Bank also proposes to enter into an agreement
with the Federal Reserve to limit its deposit-taking to that permissible
for a corporation organized under section 25A of the Federal Reserve
Act (an Edge corporation). 12 U.S.C. § 611 et seq.
meaning of Regulation K after establishing the proposed branch (12 C.F.R. 211.23(b)).3
Bank has received approvals to establish the proposed branch from the Hong Kong Monetary Authority ("Monetary Authority") and the Office of the
Comptroller of the Currency ("OCC").
In order to approve an application by a foreign bank
to establish a branch in the United States, the IBA and
Regulation K require the Board to determine that the
foreign bank applicant engages directly in the business
of banking outside the United States, and has furnished to the Board the information it needs to assess
adequately the application. The Board must also determine that the foreign bank applicant is subject to
comprehensive supervision or regulation on a consolidated basis by its home country supervisors
(12 U.S.C. § 3105(d)(2); 12 C.F.R. 211.24(c)(1)). 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. 211.24(c)).
Bank engages directly in the business of banking
outside of the United States through its banking operations in Hong Kong. Bank also has provided the
Board with the information necessary to assess the
application through submissions that address the relevant issues.
Regulation K provides that a foreign bank will be
considered to be subject to comprehensive supervision
or regulation on a consolidated basis if the Board
determines that the bank is supervised and regulated in
such a manner that its home country supervisor receives sufficient information on the foreign bank's
worldwide operations, including the relationship of the
foreign bank to any affiliate, to assess the overall
financial condition of the foreign bank and its compliance with law and regulation (12 C.F.R. 211.24(c)(1)).4
3. Bank is a wholly owned subsidiary of Dah Sing Financial
Holdings Limited, Hong Kong ("DSFH"), a company that is traded
on the Hong Kong stock exchange. Dah Sing Investment Limited,
Bermuda ("DSI-Bermuda"), directly owns a 7.4 percent interest in
DSFH and indirectly controls an additional 24.4 percent through a
subsidiary, Dah Sing Investments Limited, Hong Kong. DSI-Bermuda and DSFH have no U.S. operations other than through Bank.
DSI-Bermuda is owned by David S. Y. Wong, who is chairman of both
DSFH and Bank. Other large shareholders of DSFH include Mitsui
Trust & Banking Company, Ltd., Japan, and Sumitomo Life Insurance Company, Japan, which own 17 percent and 8.5 percent,
respectively, of DSFH's shares.
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
Legal Developments
In making its determination under this standard, the
Board has considered the following information.
The Monetary Authority is Bank's primary supervisor. The Monetary Authority is authorized by law to
regulate the domestic and foreign activities of Hong
Kong licensed banks. The duties of the Monetary
Authority include licensing banks, enforcing the provisions of Hong Kong's banking laws, and conducting
examinations of banks and their overseas branches
and representative offices. In executing its responsibilities, the Monetary Authority normally conducts
annual examinations of Bank, which alternate between
off-site and on-site examinations.
The on-site examination includes evaluation of operations, performance, and financial condition. In assessing Bank's condition, examiners evaluate such
factors as credit quality, concentrations of credit,
adequacy of lending policies and credit administration
procedures, capital adequacy, earnings performance,
liquidity, adequacy of loan loss provisions, internal
controls, management, and compliance with laws and
regulations.
Periodic discussions are held with Bank's senior
management to discuss current performance, immediate prospects, and issues related to the overall financial market. Further, following the completion of
Bank's annual audit, the Monetary Authority holds
detailed discussions with the bank's external auditor
and bank management on prudential matters, including the results of the audit, adequacy of loan provisions, and compliance with the provisions of Hong
Kong banking law.
In addition to direct oversight through the examination process, the Monetary Authority receives frequent and comprehensive financial reports from Bank
on a worldwide consolidated basis. The Monetary
Authority is empowered to request an external auditor
to report on the accuracy of reports submitted and the
adequacy of the internal control systems for producing
the reports.
A number of enforcement powers are available to
the Monetary Authority to use in its supervision of
Hong Kong banks. The Monetary Authority may
require a bank to take corrective action to correct any
financial, operational or managerial deficiencies, appoint an outside advisor to the bank to effect necessary
changes, or in the extreme, assume control of the
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.
183
bank. Hong Kong law also provides for the imposition
of criminal penalties on bank directors and managers
resulting from a conviction of failure to comply accurately with reporting requirements.
The establishment of a foreign branch or representative office requires the prior approval of the Monetary Authority. The Monetary Authority evaluates the
adequacy and effectiveness of branch management,
the internal control systems of the branch, and procedures at the head office for monitoring and controlling
the branch. Every approved foreign branch is required
to make periodic reports to the Monetary Authority on
the functions and activities of the branch and to allow
examiners access to the branch's books and records.
With respect to monitoring of dealings and relationships with affiliates, the Monetary Authority is empowered to obtain any information on an associated or
affiliated company of a Hong Kong banking institution.
Hong Kong banking law limits Bank's transactions
with subsidiaries and affiliates. Bank is required to
report affiliate-related transactions to the Monetary
Authority quarterly.
The Monetary Authority generally evaluates the
financial position and performance of a a bank and its
financial subsidiaries on a consolidated basis. This
evaluation includes a review of capital adequacy, large
exposures, and concentration risks. In addition, where
a bank or banking group is part of a larger group which
may include non-bank parent or affiliated companies,
the Monetary Authority may seek wider voluntary
consolidated reporting, or seek sufficient information
to ensure that it understands the relationship between
the bank and the rest of the group.
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 by its home country
supervisor.
The Board has also taken into account the additional
standards set forth in section 7 of the IBA and Regulation K. (See 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R.
211.24(c)(2)). As noted above, Bank has received the
consent of the Monetary Authority to establish the
proposed branch. In addition, subject to certain conditions, the Monetary Authority may share information on Bank's operations with other supervisors,
including the Board.
Bank must comply with Hong Kong capital standards. Hong Kong has voluntarily subscribed to the
Basle Capital Accord ("Accord"). Bank's capital exceeds the minimum standards of the Accord and is
equivalent to capital that would be required of a U.S.
banking organization conducting similar banking activities. Managerial and other financial resources of Bank
are also considered consistent with approval, and
184
Federal Reserve Bulletin • February 1994
Bank appears to have the experience and capacity to
support the proposed branch. Bank has established
controls and procedures for its U.S. offices to ensure
compliance with U.S. law.
Bank and its parents have committed to make available to the Board such information on the operations
of Bank and any affiliate of Bank that the Board deems
necessary to determine and enforce compliance with
the IBA, the Bank Holding Company Act of 1956, as
amended, and other applicable Federal law, to the
extent not prohibited by law or regulation. The Board
has reviewed the restrictions on disclosure in relevant
jurisdictions in which Bank operates and has communicated with the Monetary Authority concerning access to information. The Board notes that Bank, and
certain of its affiliates, may not provide information
without the consent of third parties. Bank 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 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. If 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
compliance by Bank or its affiliates with applicable
Federal statutes, the Board may require termination of
any of Bank's direct or indirect activities in the United
States or, in the case of any such operation licensed by
the OCC, recommend termination of such operation.
Approval of this application is also specifically conditioned on compliance by Bank and its parent companies with the commitments made in connection with
this application, and with the conditions contained in
this order.5 The commitments and conditions referred
to above are conditions imposed in writing by the
Board in connection with its decision, and may be
enforced in proceedings under 12 U.S.C. § 1818 or
5. The Board's authority to approve the establishment of the
proposed branch office parallels the continuing authority of the OCC
to license offices of a foreign bank. The Board's approval of this
application does not supplant the authority of the OCC to license the
proposed branch office of Bank in accordance with any terms or
conditions that the OCC may impose.
12 U.S.C. § 1847 against Bank, including its offices
and its affiliates.
By order of the Board of Governors, effective
December 16, 1993.
Voting for this action: Vice Chairman Mullins and Governors Angell, Kelley, LaWare, Lindsey, and Phillips. Absent
and not voting: Chairman Greenspan.
J E N N I F E R J . JOHNSON
Associate Secretary of the Board
KorAm Bank
Seoul, Korea
Order Approving Establishment of a Branch
KorAm Bank ("Bank"), Seoul, Korea, 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 federally 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
(Los Angeles Times, October 13, 1992). The time for
filing comments has expired and the Board has considered the application and all comments received.
Bank, with assets of $7.5 billion,1 is the eighth
largest bank in Korea. Bank operates 53 branch offices
and has two affiliates in Korea.2
The proposed branch would limit its activities to
those that are incidental to international or foreign
business, including: deposit-taking from foreign governments and foreign persons, and internationally related credit activities, payments and collections, foreign exchange, and investment advisory activities.
Bank does not engage in nonbanking activities in the
United States and would be a qualifying foreign banking organization within the meaning of Regulation K
1. Financial data are as of June 30, 1993, unless otherwise noted.
2. As of December 31, 1992, Bank of America NT & SA ("BofA")
directly owned approximately 31 percent of Bank's shares. As of the
same date, a group of 11 Korean corporate shareholders held an
aggregate of 25 percent of Bank's stock, with the remaining 44 percent
held by the public and the employee shareholder association. In light
of BofA's ownership interest in Bank, Bank will limit the activities
conducted at the branch to those that are permissible for a corporation
organized under section 25A of the Federal Reserve Act (an Edge
corporation). 12 U.S.C. § 611 et seq.
Legal Developments
after establishing the proposed branch (12 C.F.R.
211.23(b)).
Bank has received approvals to establish the proposed branch from the Korean Ministry of Finance
("Ministry") and the Office of Bank Supervision and
Examination ("OBSE") of the Bank of Korea and has
applied for approval to the Office of the Comptroller of
the Currency ("OCC").
In order to approve an application by a foreign bank
to establish a branch in the United States, the IBA and
Regulation K require the Board to determine that the
foreign bank applicant engages directly in the business
of banking outside the United States, and has furnished the Board with the information it needs to
assess adequately the application. The Board also
must determine that the foreign bank applicant is
subject to comprehensive supervision or regulation on
a consolidated basis by its home country supervisors
(12 U.S.C. § 3105(d)(2); 12 C.F.R. 211.24(c)(1)). 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. 211.24(c)).
Bank engages directly in the business of banking
outside of the United States through its banking operations in Korea. Bank also has provided the Board
with the information necessary to assess the application through submissions that address the relevant
issues.
Regulation K provides that a foreign bank will be
considered to be subject to comprehensive supervision
or regulation on a consolidated basis if the Board
determines that the bank is supervised and regulated in
such a manner that its home country supervisor receives sufficient information on the foreign bank's
worldwide operations, including the relationship of the
foreign bank to any affiliate, to assess the overall
financial condition of the foreign bank and its compliance with law and regulation (12 C.F.R. 211.24(c)(1)).3
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.
185
In making its determination under this standard, the
Board has considered the following information.
Bank's primary supervisor is the OBSE, which
monitors Bank's compliance with all banking laws and
regulations and conducts examinations of Bank. In
addition, the Ministry has legal authority over Bank's
international operations, including the approval of the
establishment of foreign banking offices, promulgation
of regulations on those operations, reporting requirements, and examination of the international banking
operations. The OBSE and Ministry coordinate their
supervision of Bank; the Ministry has delegated its
examination authority for the international activities of
Bank to the OBSE.
The OBSE conducts special and regular on-site
examinations of Bank's operations. Special examinations dealing with specific matters and/or specific
branch offices, including foreign offices, are carried
out when determined necessary by the OBSE. Regular, unannounced examinations of Bank's head office
are conducted annually. These examinations normally
focus on asset quality, internal controls, the accuracy
of financial reports, and compliance with applicable
banking laws. In addition, each year approximately 10
percent of Bank's branches are randomly selected to
undergo an on-site examination. In connection with its
examination, the OBSE has the power to require
banking institutions to adjust the book value of their
assets, establish reserves against unsound assets, or
remove from the books any asset which, in its judgement, has no true value.
As previously indicated, examinations of Bank's
international operations are conducted by the OBSE
under the delegated authority of the Ministry. Foreign
offices of Korean banking institutions undergo regular
on-site examinations by the OBSE generally every two
years. The focus of these examinations generally parallels that of domestic branch examinations, with an
additional review of compliance with the banking laws
and regulations of the foreign jurisdiction in which
such offices are located. In the year when the OBSE
examination is not conducted, Bank's audit department conducts an audit of Bank's foreign offices. The
focus of the audit is determined in conjunction with
Bank's field audit program, which is submitted to the
Ministry annually.
The OBSE also reviews Bank's operations through
the periodic receipt of consolidated financial reports.
Bank is required to submit a balance sheet and a report
outlining its operations on a monthly basis; These
reports allow the OBSE to monitor Bank's capital,
liquidity and long- and short-term lending operations.
The OBSE may also require any other reports that it
deems necessary.
With respect to the monitoring of relationships with
186
Federal Reserve Bulletin • February 1994
affiliates, Bank must consolidate the financial statements of any subsidiaries in which it is the largest
shareholder. Further, Bank must obtain approval from
the OBSE to acquire 10 percent or more of a company's shares. The OBSE recognizes as an affiliate any
company that is 10 percent or more owned. Additionally, the OBSE reviews all extensions of credit to
affiliates.
A number of enforcement powers are available to
the OBSE in its supervision of Korean commercial
banks. The Bank of Korea may, upon recommendation of the OBSE, suspend bank officers who are
involved in willful violations of banking laws and
regulations, who decline to follow its orders and
instructions, or who otherwise hinder sound banking
operations, and may recommend their dismissal to the
bank's shareholders. Similarly, the Bank of Korea
may suspend a bank's operations or cancel its license
if the bank is in violation of relevant banking laws and
regulations, declines to follow its orders and instructions, or conducts unsound business.
The OBSE also may review information provided
through Bank's internal systems. Bank monitors its
own operations through internal audits that review
financial performance as well as compliance with
applicable banking laws and regulations. The proposed
Los Angeles branch will be under the direct supervision and control of Bank's international department.
The branch will file monthly, quarterly, semi-annual
and annual reports with the international department
and various other departments of the head office. As
previously indicated, Bank's audit department intends
to conduct regular on-site examinations of the proposed branch every other year, alternating with the
examination of the OBSE. The proposed branch also
will be audited once a year by an outside accounting
firm. Further, the branch will retain local counsel to
advise it on a continuing basis regarding regulatory
requirements. A senior member of the official staff of
the proposed branch will be designated as the compliance officer.
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 by its home country
supervisors.
The Board has also taken into account the additional
standards set forth in section 7 of the IBA and Regulation K. (See 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R.
211.24(c)(2)). As noted above, Bank has received the
consent of the Ministry and the OBSE to establish the
proposed federal branch. In addition, subject to certain conditions, the Ministry and the OBSE may share
information on Bank's operations with other supervisors, including the Board.
Bank must comply with risk-based capital standards
adopted by Korea. In addition, Bank's capital is in
excess of the minimum levels that would be required
by the Basle Capital Accord and is considered equivalent to capital that would be required of a U.S.
banking organization.4 Managerial and other financial
resources of Bank are also considered consistent with
approval, and Bank appears to have the experience
and capacity to support the proposed branch. Bank
has established controls and procedures for its U.S.
offices to ensure compliance with U.S. law.
Bank has committed to make available to the Board
such information on the operations of Bank and any
affiliate of Bank that the Board deems necessary to
determine and enforce compliance with the IBA, the
Bank Holding Company Act of 1956, as amended, and
other applicable Federal law, to the extent not prohibited by law or regulation. The Board has reviewed the
restrictions on disclosure in Korea and has communicated with certain government authorities concerning
access to information. The Board notes that Bank, and
certain of its affiliates may not provide information
without the consent of third parties. In this regard,
Bank 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 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 federal branch should be, and hereby is, approved. If 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
compliance by Bank or its affiliates with applicable
Federal statutes, the Board may require termination of
any of Bank's direct or indirect activities in the United
States or, in the case of any such operation licensed by
the OCC, recommend termination of such operation.
Approval of this application is also specifically conditioned on compliance by Bank with the commitments
made in connection with this application, and with the
4. The Bank of Korea has required Korean banks to meet transitional risk-based capital standards until January 1, 19%, when Korean
banks must be in conformance with the Basle minimum standards. For
the period of January 1, 1994 to December 31, 1995, Korean banks
must maintain a total risk-based capital ratio of at least 7.25 percent.
As noted above, Bank's capital exceeds levels required by the Basle
Capital Accord.
Legal Developments
conditions contained in this order.5 The commitments
and conditions referred to above are conditions imposed in writing by the Board in connection with its
decision, and may be enforced in proceedings under
12 U.S.C. § 1818 or 12 U.S.C. § 1847 against Bank,
including its offices and its affiliates.
By order of the Board of Governors, effective
December 22, 1993.
Voting for this action: Chairman Greenspan, Vice Chairman Mullins and Governors Kelley, Lindsey, and Phillips.
Absent and not voting: Governors Angell and LaWare.
J E N N I F E R J . JOHNSON
Associate Secretary of the Board
ACTIONS TAKEN UNDER THE FEDERAL
DEPOSIT
INSURANCE CORPORATION IMPROVEMENT
ACT
By the Board
Montgomery County Bancshares, Inc.
Little Rock, Arkansas
Order Approving Application to Acquire a Branch of
a Savings Bank
Montgomery County Bancshares, Inc., Little Rock,
Arkansas ("Montgomery"), a bank holding company
within the meaning of the Bank Holding Company Act
("BHC Act"), proposes to purchase certain assets and
assume certain liabilities of the Camden, Arkansas,
branch office of First Financial Bank, F.S.B., El
Dorado, Arkansas ("First Financial"), by merging the
office with Montgomery's wholly owned, nonmember,
state-chartered bank subsidiary, Union State Bank,
Junction City, Arkansas ("Union Bank"). Montgomery 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 (12 U.S.C.
§ 1815(d)(3) ("FDI Act")). Section 5(d)(3) of the FDI
Act requires the Board to review any proposed merger
between a bank owned by a bank holding company
and a savings association, or branch of a savings
association, in which the resulting institution is insured by the Bank Insurance Fund, and in reviewing
5. The Board's authority to approve the establishment of the
proposed branch office parallels the continuing authority of the OCC
to license offices of a foreign bank. The Board's approval of this
application does not supplant the authority of the OCC to license the
proposed branch office of Bank in accordance with any terms or
conditions that the OCC may impose.
187
these proposals, to follow the procedures and consider
the factors set forth in section 18(c) of the FDI Act
(12 U.S.C. § 1828(c) ("the Bank Merger Act")). 1 The
proposed transaction also is subject to review under
the Bank Merger Act by the Federal Deposit Insurance Corporation ("FDIC"), the primary banking
regulator for Union Bank.
Notice of the application, affording interested persons an opportunity to submit comments, has been
published in accordance with the Bank Merger Act
and the Board's Rules of Procedure (12 C.F.R.
262.3(b)). Reports on the competitive effects of the
merger were requested from the United States Attorney General, the Office of the Comptroller of the
Currency and the FDIC. The time for filing comments
has expired, and the Board has considered the application and all comments received in light of the factors
set forth in the Bank Merger Act and section 5(d) of
the FDI Act.
Montgomery is the 29th largest commercial banking
organization in Arkansas, controlling deposits of
$142.1 million, representing less than 1 percent of the
total deposits in commercial banking organizations in
the state.2 The Camden office of First Financial controls deposits of $9.2 million, representing less than
1 percent of the total deposits in thrift institutions in
the state. Upon consummation of the proposed transaction, Montgomery would remain the 29th largest
commercial banking organization in Arkansas, controlling deposits of $151.3 million, representing less
than 1 percent of the total deposits in commercial
banking organizations in the state.3 Montgomery and
First Financial do not compete directly in any relevant
banking market. Based on all the facts of record, the
Board concludes that consummation of this proposal
would not result in any significantly adverse effects on
competition or the concentration of banking resources
in any relevant banking market.
The Board also concludes that the financial and
managerial resources and future prospects of Montgomery and its subsidiary banks, the convenience and
needs of the communities to be served, and the other
factors that the Board must consider under the Bank
1. 12 U.S.C. § 1815(d)(3)(E). 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. State deposit data are as of June 30, 1992, and reflect the bank
holding company approvals and bank mergers through September
1993.
3. The deposits of the Camden office of First Financial would be
transferred to a commercial bank under this proposal, and these
deposits are included at 100 percent in the calculation of pro forma
state deposit share. See Norwest Corporation, 78 Federal Reserve
Bulletin 452 (1992); First Banks, Inc., 76 Federal Reserve Bulletin 669,
670 n.9 (1990).
188
Federal Reserve Bulletin • February 1994
Merger Act are consistent with approval. 4 Moreover,
the record in this case reflects 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) Montgomery and Union Bank currently meet and
upon consummation of the proposed transaction will
continue to meet, all applicable capital standards;
and
(3) The proposed transaction would comply with the
interstate banking provisions of the Bank Holding
Company Act (the "BHC Act") (12 U.S.C.
§ 1842(d)) if Union Bank were a state bank that
Montgomery was applying to acquire directly. See
12 U.S.C. § 1815(d)(3).
4. The Board has received a comment from an individual ("Protestant") alleging improper banking practices in connection with two
loans made by Montgomery's subsidiary banks to Protestant's former
husband. Protestant believes that a principal of Montgomery, who
also serves as a director of Union Bank, and another director of Union
Bank facilitated a loan by Union Bank based on an improper appraisal
and a loan by another Montgomery subsidiary bank based on Protestant's forged signature. The Board has carefully considered these
comments in light of all the facts of record, including Union Bank's
response to these allegations describing its appraisal and loan documentation procedures, and the assessment of management in relevant
reports of examination by the banks' primary regulator, the FDIC.
Based on this review, the Board does not believe that the Protestant's
comments warrant denial of this application. The Board also has
forwarded these comments to the FDIC for consideration.
ACTIONS
TAKEN
UNDER THE FEDERAL
Based on the foregoing and all the facts of record,
the Board has determined that this application should
be, and hereby is, approved. This approval is subject
to Union Bank's obtaining the required approval of the
FDIC for the proposed transaction under the Bank
Merger Act. The Board's approval also is specifically
conditioned upon compliance by Montgomery with all
the commitments made in connection with this application. The commitments and conditions relied on by
the Board in reaching this decision are both conditions
imposed in writing by the Board in connection with its
findings and decision, and as such may be enforced in
proceedings under applicable law.
This transaction shall not be consummated before
the thirtieth calendar day following the effective date
of this order, or later than three months after the
effective date of this order, unless such period is
extended for good cause by the Board or by the
Federal Reserve Bank of St. Louis, acting pursuant to
delegated authority.
By order of the Board of Governors, effective
December 1, 1993.
Voting for this action: Chairman Greenspan, Vice Chairman Mullins, and Governors Angell, Kelley, and LaWare.
Absent and not voting: Governors Lindsey and Phillips.
DEPOSIT INSURANCE
J E N N I F E R J . JOHNSON
Associate Secretary of the Board
CORPORATION
IMPROVEMENT
ACT OF
1991
By the Secretary
of the Board
Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of
Governors of the Federal Reserve System, Washington, D.C. 20551.
Bank Holding Company
Acquired
Thrift
First Interstate Bancorp,
Los Angeles, California
HomeFed Bank, F.A.,
San Diego, California
SunTrust Banks, Inc.,
Atlanta, Georgia
Andrew Jackson Savings
Bank,
Tallahassee, Florida
Acquiring
Bank(s)
First Interstate Bank
of California,
Los Angeles,
California
Sun Bank/
Tallahassee, N.A.,
Tallahassee,
Florida
Approval
Date
December 2, 1993
December 21, 1993
Legal Developments
189
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
Banco Santander, S.A.,
Santander, Spain
First Claiborne Holding
Company, Inc.,
Tazewell, Tennessee
Acquired
Thrift
Acquiring
Bank(s)
Approval
Date
Greenwich Federal
Savings and Loan
Association,
Greenwich, Connecticut
Jefferson Savings and
Loan Association of
Morristown,
Morristown, Tennessee
Union Trust
Company,
Stamford,
Connecticut
First Claiborne Bank,
Tazewell,
Tennessee
December 10, 1993
December 13, 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)
First Commercial Corporation,
Little Rock, Arkansas
Regional Investment Corporation,
Tallahassee, Florida
Bank(s)
Clinton Bancshares, Inc.,
Clinton, Arkansas
Sun Bank/Tallahassee, N.A.,
Tallahassee, Florida
Effective
Date
December 13, 1993
December 21, 1993
Section 4
Applicant(s)
Barnett Banks, Inc.,
Jacksonville, Florida
Keystone Financial, Inc.,
Harrisburg, Pennsylvania
National City Corporation,
Cleveland, Ohio
Bank(s)
Main America Capital, L.C.,
Atlanta, Georgia
Elmwood Bancorp, Inc.,
Media, Pennsylvania
CTI Logistics, Inc.,
Rah way, New Jersey
Effective
Date
December 2, 1993
December 2, 1993
December 23, 1993
190
Federal Reserve Bulletin • February 1994
Section 4—Continued
Applicant(s)
SunTrust Banks, Inc.,
Atlanta, Georgia
Effective
Date
Bank(s)
to engage in providing investment and
financial advice, arranging
commercial real estate equity
financing, and providing full-service
brokerage services
Regional Investment Corporation,
Tallahassee, Florida
SunTrust Banks, Inc.,
Atlanta, Georgia
December 15, 1993
December 21, 1993
Sections 3 and 4
Applicant(s)
First Bank System, Inc.,
Minneapolis, Minnesota
Effective
Date
Bank(s)
American Bancshares of Mankato,
Inc.,
Mankato, Minnesota
Eagle Insurance Agency, Inc.,
Amboy, Minnesota
December 21, 1993
APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY 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
Reserve
Bank
Effective
Date
Applicant(s)
Bank(s)
American National Bancshares of
Wichita, Inc.,
Wichita, Kansas
ANB Corporation,
Muncie, Indiana
Harper Bancshares, Inc.,
Harper, Kansas
Kansas City
December 7, 1993
Winchester
Bancorporation,
Winchester, Indiana
Chicago
December 21, 1993
Legal Developments
191
Section 3—Continued
Applicant(s)
Associated Banc-Corp, Inc.,
Green Bay, Wisconsin
Atlantic Community Bancorp,
Inc.,
Rocky Mount, North Carolina
BB&T Financial Corporation,
Wilson, North Carolina
B & P Bancorp, Incorporated,
Shepherdsville, Kentucky
Century South Banks, Inc.,
Dahlonega, Georgia
Citizens Holding Company,
Muskogee, Oklahoma
City National Bancshares, Inc.,
Guymon, Oklahoma
Coastal Bancshares, Inc.,
Pearland, Texas
Coastal Bancshares, Inc.,
Pearland, Texas
Dakota Bancshares, Inc.,
Mendota Heights, Minnesota
DFC Acquisition Corporation,
Two,
Kansas City, Missouri
First Financial Corporation,
Terre Haute, Indiana
First Lucedale Bancorp, Inc.,
Lucedale, Mississippi
Reserve
Bank
Bank(s)
Bay Lake Banc-Corp,
Kewaunee, Wisconsin
Community State Bank of
Algoma,
Algoma, Wisconsin
First Manitowoc Bancorp,
Inc.,
Manitowoc, Wisconsin
First Oak Brook
Bancshares, Inc.,
Oak Brook, Illinois
Unity Bank & Trust
Effective
Date
Chicago
December 6, 1993
Richmond
December 10, 1993
Richmond
December 1, 1993
St. Louis
December 6, 1993
Atlanta
December 15, 1993
Kansas City
December 8, 1993
Kansas City
December 23, 1993
Dallas
December 29, 1993
Dallas
December 29, 1993
Minneapolis
December 28, 1993
Kansas City
December 23, 1993
Chicago
December 6, 1993
Atlanta
December 22, 1993
Company,
Rocky Mount, North
Carolina
Home Savings Bank of
Albemarle, SSB,
Albemarle, North
Carolina
Pioneer Bancshares, Inc.,
Canmer, Kentucky
The Martin Bank,
Martin, Tennessee
DIGISOURCE, INC.,
Fayette ville, Arkansas
The City National Bank,
Buymon, Oklahoma
Gulf Coast Bancshares,
Inc.,
Alvin, Texas
The First National Bank,
Alvin, Texas
Pearland State Bank,
Pearland, Texas
Dakota County
Bancshares, Inc.,
Mendota Heights,
Minnesota
Preferred Shares of
Dickinson Financial
Corporation,
Kansas City, Missouri
First Marshall
Bancshares, Inc.,
Marshall, Illinois
First National Bank of
Lucedale,
Lucedale, Mississippi
192
Federal Reserve Bulletin • February 1994
Section 3—Continued
Applicant(s)
First National Security
Company,
DeQueen, Arkansas
Island Financial Corporation,
Bird Island, Minnesota
Latah Bancorporation, Inc.,
Latah, Washington
Lea County Bancshares, Inc.,
Hobbs, New Mexico
Lee County Bancshares, Inc.,
Marianna, Arkansas
Myers Bancshares, Inc.,
Alva, Oklahoma
Neosho Bancshares ESOP,
Neosho, Missouri
Neosho Bancshares, Inc.,
Neosho, Missouri
Northwest Wisconsin Bancorp,
Inc.,
Chippewa Falls, Wisconsin
Norwest Corporation,
Minneapolis, Minnesota
Peoples Financial Corp. of
Illinois, Inc.,
Kewanee, Illinois
Peotone Bancorp, Inc.,
Peotone, Illinois
Powhatan Point Community
Bancshares, Inc.,
Powhatan Point, Ohio
Security Corporation,
Duncan, Oklahoma
Southern Utah BanCorporation,
Cedar City, Utah
Southland Bank Corporation,
Butler, Georgia
Southwestern Bancorp, Inc.,
Sanderson, Texas
Reserve
Bank
Bank(s)
Effective
Date
First National Bancshares
of Hempstead County,
Inc.,
Hope, Arkansas
State Bank of Bird Island,
Bird Island, Minnesota
Bank of Latah,
Latah, Washington
Lea County State Bank,
Hobbs, New Mexico
The First National Bank
at Marianna,
Marianna, Arkansas
The Central National
Bank,
Alva, Oklahoma
DIGISOURCE, INC.,
Fayetteville, Arkansas
St. Louis
November 26, 1993
Minneapolis
November 30, 1993
San Francisco
November 22, 1993
Dallas
December 10, 1993
St. Louis
December 3, 1993
Kansas City
November 29, 1993
Kansas City
December 23, 1993
BCB Bancorp, Inc.,
Chippewa Falls,
Wisconsin
D.L. Bancshares, Inc.,
Detroit Lakes,
Minnesota
Bradford Bancorp, Inc.,
Bradford, Illinois
Minneapolis
December 7, 1993
Minneapolis
December 21, 1993
Chicago
November 24, 1993
Southwest Bancorp,
Inc.,
Worth, Illinois
The First National Bank
of Powhatan Point,
Powhatan Point, Ohio
Firstbank Holding
Company,
Marietta, Oklahoma
State Bank of Southern
Utah,
Cedar City, Utah
United Bank of Crawford,
Roberta, Georgia
Cross Plains Bankshares,
Inc.,
Cross Plains, Texas
Citizens State Bank,
Cross Plains, Texas
Chicago
December 10, 1993
Cleveland
December 20, 1993
Kansas City
November 29, 1993
San Francisco
December 16, 1993
Atlanta
December 1, 1993
Dallas
December 10, 1993
Legal Developments
193
Section 3—Continued
Applieant(s)
Sterling Bancorporation, Inc.,
Wilmington, Delaware
Sterling Bancshares, Inc.,
Houston, Texas
Sterling Bancshares, Inc.,
Houston, Texas
Sterling Bancorporation, Inc.
Wilmington, Delaware
Stockton Bancshares, Inc.,
Stockton, Kansas
St. Paul Bancshares, Inc.,
Phalen Park, Minnesota
Sun Financial Corporation,
Earth City, Missouri
Union Planters Corporation,
Memphis, Tennessee
Wesbanco, Inc.,
Wheeling, West Virginia
Reserve
Bank
Bank(s)
Guardian Bank of
Houston,
Houston, Texas
Guardian Bancshares,
Inc.,
Houston, Texas
Guardian Bank of
Houston,
Houston, Texas
Enterprise Bank-Houston,
Houston, Texas
Western Bancshares,
Inc.,
Stockton, Kansas
Berkley Agency, Inc.,
Stockton, Kansas
Dakota Bancshares, Inc.,
Mendota Heights,
Minnesota
Farmers State Bank of
Risco,
Risco, Missouri
First National Bancorp of
Shelbyville, Inc.,
Shelbyville, Tennessee
First Fidelity Bancorp,
Inc.,
Fairmont, West
Virginia
Effective
Date
Dallas
December 1, 1993
Dallas
December 1, 1993
Dallas
December 1, 1993
Kansas City
November 29, 1993
Minneapolis
December 28, 1993
St. Louis
December 21, 1993
St. Louis
December 20, 1993
Cleveland
December 7, 1993
Section 4
Applicant(s)
Banco Santander, S.A.,
Santander, Spain
The Bank of New York
Company, Inc.,
New York, New York
City Holding Company,
Charleston, West Virginia
Nonbanking
Activity/Company
Greenwich Financial
Corporation,
Greenwich, Connecticut
New York Equity Fund
1993 Limited
Partnership,
New York, New York
City Mortgage
Corporation,
McKee's Rock,
Pennsylvania
Reserve
Bank
Effective
Date
New York
December 10, 1993
New York
December 15, 1993
Richmond
December 29, 1993
194
Federal Reserve Bulletin • February 1994
Section 4—Continued
Applicant(s)
Compass Bancshares, Inc.,
Birmingham, Alabama
First Fidelity Bancorporation,
Lawrenceville, New Jersey
First Financial Bancorp,
Hamilton, Ohio
First Midwest Bancorp, Inc.,
Naperville, Illinois
Hawkeye Bancorporation,
Des Moines, Iowa
Keeco, Inc.,
Chicago, Illinois
Northland Insurance Agency,
Inc.,
Chicago, Illinois
Northern Illinois Financial
Corporation,
Wauconda, Illinois
Norwest Corporation,
Minneapolis, Minnesota
Prairieland Bancorp, Inc.,
Bushnell, Illinois
Security Richland
Bancorporation,
Miles City, Montana
Nonbanking
Activity/Company
First Performance
Interim, F.S.B.,
Jacksonville, Florida
Greenwich Financial
Corporation,
Greenwich, Connecticut
Highland Federal Savings
Bank,
Mariemont, Ohio
First Midwest Mortgage,
Inc.,
Joliet, Illinois
Centre Pointe Leasing
Co., Inc.,
West Des Moines, Iowa
American National Bank
and Trust Company of
Waukegan,
Waukegan, Illinois
American Suburban
Mortgage Corporation,
Waukegan, Illinois
Prosperity Mortgage
Company,
Fairfax, Virginia
Alfred E. Hempen
Accounting,
Hamilton, Illinois
to engage de novo in
providing investment or
financial advice
Reserve
Bank
Effective
Date
Atlanta
December 2, 1993
Philadelphia
December 10, 1993
Cleveland
December 22, 1993
Chicago
December 17, 1993
Chicago
December 21, 1993
Chicago
November 23, 1993
Minneapolis
November 18, 1993
Chicago
December 1, 1993
Minneapolis
December 29, 1993
Sections 3 and 4
Applicant(s)
Omega Financial Corporation,
State College, Pennsylvania
Nonbanking
Activity/Company
Penn Central Bancorp,
Huntingdon,
Pennsylvania
Penn Central Bancorp
Life Insurance
Company,
Phoenix, Arizona
Reserve
Bank
Philadelphia
Effective
Date
December 24, 1993
Legal Developments
195
APPLICATIONS APPROVED UNDER BANK MERGER ACT
By Federal Reserve
Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon
request to the Reserve Banks.
Applicant(s)
Compass Bank,
Birmingham, Alabama
First United Bank,
Boca Raton, Florida
Meridian Bank,
Reading, Pennsylvania
Reserve
Bank
Bank(s)
Compass Bank of
Calhoun County, N.A.,
Anniston, Alabama
New River Bank,
Oakland Park, Florida
The Grange National
Bank of Susquehanna
County,
New Milford,
Pennsylvania
Effective
Date
Atlanta
November 29, 1993
Atlanta
November 30, 1993
Philadelphia
December 24, 1993
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.
Board of Governors v. Oppegard, No. 93-3706 (8th
Cir., filed November 1, 1993). Appeal of district
court order ordering appellant Oppegard to comply
with prior order requiring compliance with Board
removal, prohibition, and civil money penalty order.
Scott v. Board of Governors, No. 930905843CV (Dist.
Ct., Salt Lake County, Utah, filed October 8, 1993).
Action against Board and others for damages and
injunctive relief for alleged constitutional and statutory violations caused by issuance of Federal Reserve notes.
Richardson v. Board of Governors, et al., No. 93-C
836A (D. Utah, filed August 30, 1993). Action
against Board and others for damages and injunctive
relief for alleged constitutional and statutory violations caused by issuance of Federal Reserve notes.
On September 20, 1993, the Board filed a motion to
dismiss.
First National Bank ofBellaire v. Board of Governors,
No. H-93-1708 (S.D. Texas, filed June 8, 1993).
Action to enjoin possible enforcement actions by
Board of Governors and other bank regulatory agencies. On September 23, 1993, the agencies filed a
motion to dismiss.
Kubany v. Board of Governors, et al., No. 93-1428 (D.
D.C., filed July 9, 1993). Action challenging Board
determination under the Freedom of Information
Act. The Board's motion to dismiss was filed on
October 15, 1993.
Bennett v. Greenspan, No. 93-1813 (D. D.C., filed
April 20, 1993). Employment discrimination action.
Amann v. Prudential Home Mortgage Co., et al., No.
93-10320 WD (D. Massachusetts, filed February 12,
1993). Action for fraud and breach of contract
arising out of a home mortgage. On April 17, 1993,
the Board filed a motion to dismiss.
Adams v. Greenspan, No. 93-0167 (D. D.C., filed
January 27,1993). Action by former employee under
the Civil Rights Act of 1964 and the Rehabilitation
Act of 1973 concerning termination of employment.
Sisti v. Board of Governors, No. 93-0033 (D. D.C.,
filed January 6, 1993). Challenge to Board staff
interpretation with respect to margin accounts. The
Board's motion to dismiss was granted on May 13,
1993. On June 3,1993, the petitioner filed a notice of
appeal. On October 14, 1993, the Court of Appeals
granted the Board's motion for summary affirmance.
U.S. Check v. Board of Governors, No. 92-2892 (D.
D.C., filed December 30, 1992). Challenge to partial
denial of request for information under the Freedom
of Information Act. Dismissed by stipulation on
November 9, 1993.
196
Federal Reserve Bulletin • February 1994
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 three of its officers and directors
for failure to comply with reporting requirements.
Petition for review denied November 30, 1993.
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 March 30, 1993, the
court granted the Board's motion to dismiss as to it,
and also dismissed certain claims against the Reserve Bank. On April 29, the plaintiffs filed an
amended complaint. The Board's motion to dismiss
the amended complaint was filed on May 17.
Zemel v. Board of Governors, No. 92-1056 (D. D.C.,
filed May 4, 1992). Age Discrimination in Employment Act case. The parties' cross-motions for summary judgment are pending.
Board of Governors v. Ghaith R. Pharaon, 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.
FINAL ENFORCEMENT DECISION ISSUED BY THE
BOARD OF GOVERNORS
by the Board of Governors of the Federal Reserve
System (the "Board") against individuals allegedly
affiliated with the Bank of Credit and Commerce
International ("BCCI") and its affiliates. All of the
parties — Ghaith R. Pharaon, Khalid bin Mahfouz,
and Board Enforcement Counsel — agree that the two
proceedings raise common legal issues relating to the
doctrine of disentitlement.1 The parties disagree, however, as to the most efficient means of addressing those
issues.
The cases are pending in different procedural stages
of the administrative adjudication process. The
Board's case against Ghaith R. Pharaon, in which the
Board seeks an order of prohibition and a civil money
penalty of $37 million, has already been the subject of
a decision by the presiding Administrative Law Judge
in this proceeding, Walter J. Alprin (the "ALJ"), in
which he granted Board Enforcement Counsel's motion for summary disposition against Pharaon based on
the doctrine of disentitlement. Following the ALJ's
referral of the record in that case to the Board for final
decision, Pharaon and Board Enforcement Counsel
filed exceptions to the ALJ's recommended decision
and Pharaon filed a motion to remand the record to the
ALJ for consideration of supplemental authority,
which the Board denied. Meanwhile, the Mahfouz
case, in which the Board seeks a civil money penalty
of $170 million, is not yet before the Board and is
currently the subject of Board Enforcement Counsel's
motion for summary disposition, which is pending
before the ALJ. The motions now before the Board
address the manner and sequence in which the Board
should consider the disentitlement issue common to
the two cases.
In the Matters of
Procedural Posture
Ghaith R. Pharaon,
and Kahlid Bin Mahfouz
Pharaon
Institution-Affiliated Parties of
BCCI Holdings (Luxembourg) S.A.,
Luxembourg, and the Bank of Credit
and Commerce International S.A.,
(Luxembourg)
Docket Nos. 91-037-E-I1, 91-037-CMP-I1,
91-043-E-I8, 92-074-CMP-I1
Order Denying Motions for Consolidation and Stay
and Setting Briefing Schedule
This is a procedural order addressing a number of
motions filed in two enforcement proceedings brought
On July 12, 1991 and July 29, 1991, the Board issued
Notices of Intent to Prohibit against Pharaon, relating
to Pharaon's alleged violations of law and regulation in
connection with a number of financial institutions. On
September 13, 1991, the Board issued an amended
Notice of Intent to Prohibit and issued a Notice of
Assessment of Civil Money Penalty against Pharaon,
imposing a $37 million civil money penalty. Pharaon
filed answers to the charges and requested a hearing as
to the civil money penalty assessment.
On July 20, 1993, the ALJ granted Board Enforcement Counsel's motion for summary disposition
1. Briefly stated, the doctrine of disentitlement states that a fugitive
from justice may not simultaneously flout legal procedures and seek
the benefit of such procedures.
Legal Developments
against Pharaon based on the doctrine of disentitlement and recommended that the Board's Final Decision impose civil money penalties in the amount originally assessed and issue an order of prohibition
against Pharaon. The record was thereupon referred to
the Board for the filing of any exceptions to the
recommended decision by the parties and for the
Board's final decision. Upon a joint motion by the
parties, the deadline for the filing of exceptions was
extended until September 20, 1993.
On August 20, 1993, Respondent Pharaon filed a
motion to remand the case to the ALJ to supplement
the record on the issue of disentitlement. The Board
denied that motion, ruling that the significance of the
cases raised by Pharaon could be addressed in the
context of briefing the exceptions to the recommended
decision. On September 24, 1993, Pharaon and Board
Enforcement Counsel filed exceptions to the Recommended Decision, and Pharaon filed the motion for
consolidation discussed below.
Mahfouz
On July 2, 1992, the Board issued a Notice of Assessment of Civil Money Penalties against Mahfouz, imposing civil money penalties in the amount of
$170 million against Mahfouz on the basis of alleged
violations of law and regulation in connection with
BCCI-affiliated institutions. Mahfouz answered the
charges and requested a hearing.
In the proceedings before the ALJ, Board Enforcement Counsel has filed a motion for summary disposition against Mahfouz on the basis of the doctrine of
disentitlement. On September 23, 1993, Mahfouz filed
with the ALJ an opposition to the motion for summary
disposition, and filed with the Board the motion for
consolidation discussed below.
Pending Motions
Pharaon's motion to consolidate the two cases for
purposes of resolving the disentitlement issue argues
simply that the common issue of disentitlement warrants consolidation;2 Pharaon does not suggest a
procedure for bringing about the requested consolidation. Mahfouz's corresponding motion supporting
consolidation of the two cases, argues that the Board
should not resolve the disentitlement issue without
considering its application in the factually and legally
2. The Uniform Rules of Practice and Procedure that control these
proceedings provide that the ALJ or the Board "may consolidate, for
some or all purposes, any two or more proceedings, if each such
proceeding involves . . . at least one common question of law or fact,
injustice." 12 C.F.R. 263.22(a)(1); 263.4.
197
distinct context presented by Mahfouz. In particular,
Mahfouz argues that he presents arguments not made
by Pharaon that should not be lost to Board consideration. Mahfouz suggests that, in order to make
consolidation possible, the Board should stay the
Pharaon proceeding, which would provide time for
the ALJ to resolve the Mahfouz motion for summary
disposition, and thus for Mahfouz to catch up with
Pharaon in the procedural process. Notwithstanding
his request for consolidation, Mahfouz seeks to file a
separate brief and to participate independently in
oral argument, if oral argument is granted, before the
Board.
On October 5, 1993, Board Enforcement Counsel
filed an opposition to the motion to stay the Pharaon
proceeding and the motions to consolidate, and instead moved that Mahfouz be stayed pending the
Board's disposition of Pharaon. Board Enforcement
Counsel agrees that the Board's authority to apply the
disentitlement doctrine is an issue common to both
cases, but argues that the efficiencies of consolidated
Board consideration of disentitlement would be outweighed by the factual and legal distinctions between
the two cases, and by the potential delay in the
resolution of Pharaon entailed by the time necessary
for the ALJ to resolve the motion for summary disposition in Mahfouz. Board Enforcement Counsel therefore argues that a Board stay of the ALJ's consideration of Mahfouz would enable the Board, through the
resolution of Pharaon, to provide the ALJ with guidance for his resolution of the summary disposition
motion in Mahfouz. Board Enforcement Counsel suggests that, even without consolidation, the Board
would have access to Mahfouz's arguments on disentitlement by consulting Mahfouz's opposition to the
motion for summary disposition before the ALJ;
Board Enforcement Counsel does not indicate, however, what status Mahfouz's arguments should have in
the Board's consideration when the case is not yet
before the Board.
Also on October 5, 1993, Board Enforcement Counsel filed a motion for leave to respond to Pharaon's
exceptions, arguing that Pharaon's exceptions had
raised a number of legal issues not specifically addressed in previous briefing. In light of the additional
period permitted Pharaon to file exceptions, Board
Enforcement Counsel requested that it be permitted
until November 30, 1993 to file its response.
On October 19, 1993, Pharaon filed a response,
stating that he had no objection to Board Enforcement
Counsel's request for an extension of time, so long as
such extension was limited to 60 days from thefilingof
Pharaon's exceptions, and so long as Pharaon was also
allowed 60 days to reply to Board Enforcement Counsel's response. Pharaon suggests that this extended
198
Federal Reserve Bulletin • February 1994
timetable supports his argument that consolidation of
the two proceedings would be practicable and efficient.
On October 29, 1993, Board Enforcement Counsel
filed a reply to Pharaon's response arguing that Pharaon is not inherently entitled under the procedural
rules to file a response to Board Enforcement Counsel's response, for which Board Enforcement Counsel
sought leave from the Board. Additionally, Board
Enforcement Counsel argues that Pharaon should not
be allowed 60 days to respond even if such leave were
granted.
Discussion
The Board believes that the administrative process
would best be served by the Board's consideration of
the issue of disentitlement after full briefing in both
proceedings.3 Board Enforcement Counsel's countervailing concern about potential delay in resolving
Pharaon is unsupported by any statement that such
delay would have any extraordinary consequences
that would outweigh the advantages of full briefing.
Nor is it clear in the present circumstances that
administrative economies strongly support a stay of
either Pharaon or Mahfouz.
Accordingly, the Board believes that the advantage of full briefing as to both Pharaon and Mahfouz
before the Board addresses the issue of disentitlement outweighs any other administrative consideration that is apparent at this time. While this goal
would best be served by a concurrent consideration
of the two cases by the Board, the cases need not be
formally consolidated, especially in light of their
factual, legal and procedural disparities. Instead, the
administrative process should continue in each proceeding, through the completion of briefing in Pharaon and resolution of the pending motion for sum3. The Board believes that procedural confusion would be avoided
by consideration of Mahfouz's arguments when the Mahfouz proceeding is properly before the Board, rather than by consulting a copy of
Mahfouz's arguments to the ALJ, as suggested by Board Enforcement
Counsel.
mary disposition in Mahfouz. The Board may then
take appropriate action to consider the cases concurrently, which may include the exercise of the Board's
discretion to defer consideration of the Pharaon
recommended decision, upon the completion of
briefing, pending the resolution of the Mahfouz motion for summary disposition.
Accordingly, the Board denies the motions for consolidation and also denies the motion for a stay of
either case at this time. Rather, briefing should be
completed as to both cases, and the ALJ should
complete his consideration of the motion for summary
disposition in Mahfouz.
The Board grants Board Enforcement Counsel's
motion for leave to file a response to Pharaon's exceptions, and, in view of the procedural uncertainty
created by the various cross-motions, extends the time
forfilingsuch response to January 31,1994. The Board
will treat Pharaon's October 19th filing as a motion for
leave to file a reply and will permit Pharaon to file such
a reply within 30 days of the filing of Board Enforcement Counsel's response.
So ordered, this sixth day of December, 1993.
Board of Governors of the
Federal Reserve System
WILLIAM W . WILES
Secretary of the Board
FINAL ENFORCEMENT ORDERS ISSUED BY THE
BOARD OF GOVERNORS
Berrien E. Moore
Beverly Hills, California
The Federal Reserve Board announced on December 20,1993, the issuance of a Consent Order Dismissing a Notice of Assessment of a Civil Money Penalty
against Berrien E. Moore, a former director of First
Pacific Bancorp, Inc., Beverly Hills, California.
Al
Financial and Business Statistics
WEEKLY REPORTING COMMERCIAL BANKS
CONTENTS
A3
Guide to Tabular
Domestic Financial
Presentation
Statistics
Assets and liabilities
A22 Large reporting banks
A24 Branches and agencies of foreign banks
MONEY STOCK AND BANK CREDIT
FINANCIAL MARKETS
A4
Reserves, money stock, liquid assets, and debt
measures
A5
Reserves of depository institutions, Reserve Bank
credit
Reserves and borrowings—Depository
institutions
Selected borrowings in immediately available
funds—Large member banks
A25 Commercial paper and bankers dollar
acceptances outstanding
A25 Prime rate charged by banks on short-term
business loans
A26 Interest rates—money and capital markets
A27 Stock market—Selected statistics
A6
A7
FEDERAL FINANCE
POLICY INSTRUMENTS
A8 Federal Reserve Bank interest rates
A9 Reserve requirements of depository institutions
A10 Federal Reserve open market transactions
FEDERAL RESERVE BANKS
A l l Condition and Federal Reserve note statements
A12 Maturity distribution of loan and security
holdings
A28
A29
A30
A30
Federal fiscal and financing operations
U.S. budget receipts and outlays
Federal debt subject to statutory limitation
Gross public debt of U.S. Treasury—Types
and ownership
A31 U.S. government securities
dealers—Transactions
A32 U.S. government securities dealers—Positions
and financing
A3 3 Federal and federally sponsored credit
agencies—Debt outstanding
MONETARY AND CREDIT AGGREGATES
A13 Aggregate reserves of depository institutions
and monetary base
A14 Money stock, liquid assets, and debt measures
A16 Deposit interest rates and amounts outstanding—
commercial and BIF-insured banks
A17 Bank debits and deposit turnover
A18 Loans and securities—All commercial banks
COMMERCIAL BANKING INSTITUTIONS
A19 Major nondeposit funds
A20 Assets and liabilities, Wednesday figures
SECURITIES MARKETS AND
CORPORATE FINANCE
A34 New security issues—Tax-exempt state and local
governments and corporations
A35 Open-end investment companies—Net sales
and assets
A35 Corporate profits and their distribution
A3 5 Nonfarm business expenditures on new
plant and equipment
A36 Domestic finance companies—Assets and
liabilities, and consumer, real estate, and business
credit
A2 Federal Reserve Bulletin • February 1994
Domestic Financial Statistics—Continued
REAL
ESTATE
A37 Mortgage markets
A38 Mortgage debt outstanding
CONSUMER INSTALLMENT
CREDIT
A39 Total outstanding
A39 Terms
FLOW OF FUNDS
A40
A42
A43
A44
A57 Selected U.S. liabilities to foreign official
institutions
Funds raised in U.S. credit markets
Summary of financial transactions
Summary of credit market debt outstanding
Summary of financial assets and liabilities
Domestic Nonfinancial Statistics
SELECTED
MEASURES
A45 Nonfinancial business activity—Selected
measures
A45 Labor force, employment, and unemployment
A46 Output, capacity, and capacity utilization
A47 Industrial production—Indexes and gross value
A49 Housing and construction
A50 Consumer and producer prices
A51 Gross domestic product and income
A52 Personal income and saving
International Statistics
SUMMARY
REPORTED BY BANKS
IN THE UNITED
STATES
A57
A58
A60
A61
Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A61 Banks' own claims on unaffiliated foreigners
A62 Claims on foreign countries—Combined
domestic offices and foreign branches
REPORTED BY NONBANKING
BUSINESS
ENTERPRISES IN THE UNITED STATES
A63 Liabilities to unaffiliated foreigners
A64 Claims on unaffiliated foreigners
SECURITIES HOLDINGS AND
TRANSACTIONS
A65 Foreign transactions in securities
A66 Marketable U.S. Treasury bonds and
notes—Foreign transactions
INTEREST AND EXCHANGE
RATES
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
STATISTICS
SPECIAL
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
TABLES
A70 Assets and liabilities of commercial banks,
September 30, 1993
A76 Terms of lending at commercial banks,
November 1993
A80 Assets and liabilities of U.S. branches and agencies
of foreign banks, September 3 0 , 1 9 9 3
A3
Guide to Tabular Presentation
SYMBOLS AND ABBREVIATIONS
c
e
n.a.
n.e.c.
P
r
*
0
ATS
BIF
CD
CMO
FFB
FHA
FHLBB
FHLMC
FmHA
FNMA
FSLIC
G-7
Corrected
Estimated
Not available
Not elsewhere classified
Preliminary
Revised (Notation appears on column heading
when about half of the figures in that column
are changed.)
Amounts insignificant in terms of the last decimal
place shown in the table (for example, less than
500,000 when the smallest unit given is millions)
Calculated to be zero
Cell not applicable
Automatic transfer service
Bank insurance fund
Certificate of deposit
Collateralized mortgage obligation
Federal Financing Bank
Federal Housing Administration
Federal Home Loan Bank Board
Federal Home Loan Mortgage Corporation
Farmers Home Administration
Federal National Mortgage Association
Federal Savings and Loan Insurance Corporation
Group of Seven
G-10
GNMA
GDP
HUD
IMF
IO
IPCs
IRA
MMDA
NOW
OCD
OPEC
OTS
PO
REIT
REMIC
RP
RTC
SAIF
SCO
SDR
SIC
SMSA
VA
Group of Ten
Government National Mortgage Association
Gross domestic product
Department of Housing and Urban
Development
International Monetary Fund
Interest only
Individuals, partnerships, and corporations
Individual retirement account
Money market deposit account
Negotiable order of withdrawal
Other checkable deposit
Organization of Petroleum Exporting Countries
Office of Thrift Supervision
Principal only
Real estate investment trust
Real estate mortgage investment conduit
Repurchase agreement
Resolution Trust Corporation
Savings Association Insurance Fund
Securitized credit obligation
Special drawing right
Standard Industrial Classification
Standard metropolitan statistical area
Veterans Administration
GENERAL 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
DomesticNonfinancialStatistics • February 1994
1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES
Percent annual rate of change, seasonally adjusted1
1992
1993
1993
Monetary or credit aggregate
Q4
1
2
3
4
5
6
7
8
9
Reserves of depository
Total
Required
Nonborrowed
Monetary base 3
Q2
Time and savings deposits
Commercial banks
Savings, including MMDAs
Small time
Large time 8,9
Thrift institutions
15
Savings, including MMDAs
Small time
16
17 Large time 8,9
12
13
14
Money market mutual funds
18 General purpose and broker-dealer
19 Institution-only
Aug.
Sept/
Oct/
Nov.
9.3
8.7
9.5
9.1
10.8
12.4
10.6
9.8
12.4
12.3
10.9
11.4
9.4
5.7
8.1
9.5
9.7
12.8
7.5
11.5
16.6
14.0
15.2
15.1
20.0
20.4
23.1
7.9
12.8
12.9
16.8
8.8
16.8
2.6
-.4
1.4
4.2 r
6.5
-1.9
-3.9
-2.4
4.0r
10.5
2.2
2.3
3.3
4.5r
12.9
3.2
1.3
1.3
5.7
13.3
1.9*
-,7r
-,8r
5.7 r
10.1
1.6
.9
13.6
4.1
3.8
-2.5
5.3
10.4
.7
2.1
2.9
3.7
10.4
4.2
4.2
n.a.
n.a.
-3.0
-15.0
-5.4
-14.0
— 1.4r
3.3
-1.1
-8.8
-3.2
-14.9
-2.2
-.1
2.4
-3.7
9.8
1.4
3.7
12.9
-17.2
-20.0
1.6
-7.9
-20.0
4.6
-7.9
.2
5.3
-10.7
-8.8
.8
-12.0
-19.1
6.9
-11.2
2.7
5.1
-8.5
-7.1
1.2
-9.8
3.1
8.2
-10.9
-6.2
8.7
-23.1
-10.8
-.2
-18.6
-15.5
,7r
-10.5
-10.1
2.9
-12.2
-7.0
2.5 r
-14.9
—3.8r
1.7
— 10.4r
-1.5'
1.1
-11.6
-1.9
.0
-13.9
.0
-.8
-12.2
-5.7
-4.2
-19.4
-10.2
-14.1
-.7
.5
-.6
-12.6
-1.1
-18.8
-10.5
-6.r
-6.5
5.0
1.8
15.5
12.6
.6
7.6
2.7r
10.4
2.4r
9.1
4.4
8.7r
4.3 r
7.1
4.6
-1.5
5.6
6.7
3.4r
1. Unless otherwise noted, rates of change are calculated from average
amounts outstanding during preceding month or quarter.
2. Figures incorporate adjustments for discontinuities, or "breaks," associated with regulatory changes in reserve requirements. (See also table 1.20.)
3. The seasonally adjusted, break-adjusted monetary base consists of (1)
seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally
adjusted currency component of the money stock, plus (3) (for all quarterly
reporters on the "Report of Transaction Accounts, Other Deposits, and Vault
Cash" and for all weekly reporters whose vault cash exceeds their required
reserves) the seasonally adjusted, break-adjusted difference between current vault
cash and the amount applied to satisfy current reserve requirements.
4. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the
vaults of depository institutions, (2) travelers checks of nonbank issuers, (3)
demand deposits at all commercial banks other than those owed to depository
institutions, the U.S. government, and foreign banks and official institutions, less
cash items in the process of collection and Federal Reserve float, and (4) other
checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW)
and automatic transfer service (ATS) accounts at depository institutions, credit
union share draft accounts, and demand deposits at thrift institutions. Seasonally
adjusted Ml is computed by summing currency, travelers checks, demand
deposits, and OCDs, each seasonally adjusted separately.
M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements
(RPs) issued by all depository institutions and overnight Eurodollars issued to
U.S. residents by foreign branches of U.S. banks worldwide, (2) savings (including MMDAs) and small time deposits (time deposits—including 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 M l .
M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of
$100,000 or more) issued by all depository institutions, (2) term Eurodollars held
by U.S. residents at foreign branches of U.S. banks worldwide and at all banking
offices in the United Kingdom and Canada, and (3) balances in both taxable and
July
25.8
25.3
27.1
12.6
components
Debt components*
20 Federal
21 Nonfederal
Q3r
institutions2
Concepts of money, liquid assets, and debt4
Ml
M2
M3
L
Nontrqnsaction
10 I n M 2 5
11 In M3 only 6
Ql
7.3 r
5.2 r
5.5 r
n.a.
n.a.
tax-exempt, institution-only money market funds. Excludes amounts held by
depository institutions, the U.S. government, money market funds, and foreign
banks and official institutions. Also excluded is the estimated amount of overnight
RPs and Eurodollars held by institution-only money market funds. Seasonally
adjusted M3 is computed by adjusting its non-M2 component as a whole and then
adding this result to seasonally adjusted M2.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper, and bankers acceptances, net of money
market fund holdings of these assets. Seasonally adjusted L is computed by
summing U.S. savings bonds, short-term Treasury securities, commercial paper,
and bankers acceptances, each seasonally adjusted separately, and then adding
this result to M3.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. Data are derived from the Federal
Reserve Board's flow of funds accounts. Data on debt of domestic nonfinancial
sectors are monthly averages, derived by averaging adjacent month-end levels.
Growth rates for debt reflect adjustments for discontinuities over time in the levels
of debt presented in other tables.
5. Sum of (1) overnight RPs and Eurodollars, (2) money market fund balances
(general purpose and broker-dealer), (3) savings deposits (including MMDAs),
and (4) small time deposits.
6. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S.
residents, and (4) money market fund balances (institution-only), less (5) a
consolidation adjustment that represents the estimated amount of overnight RPs
and Eurodollars held by institution-only money market funds. This sum is
seasonally adjusted as a whole.
7. Small time deposits—including retail RPs—are those issued in amounts of
less than $100,000. All IRA and Keogh account balances at commercial banks and
thrift institutions are subtracted from small time deposits.
8. Large time deposits are those issued in amounts of $100,000 or more,
excluding those booked at international banking facilities.
9. Large time deposits at commercial banks less those held by money market
funds, depository institutions, U.S. government and foreign banks and official
institutions.
Money Stock and Bank Credit
1.11
A5
RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT 1
Millions of dollars
Factor
Sept.
Average of
daily figures
Average of daily figures for week ending on date indicated
1993
1993
Oct.
Nov.
Oct. 13
Oct. 20
Oct. 27
Nov. 3
Nov. 10
Nov. 17
Nov. 24
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
U.S. government securities
2
Bought outright—System account
Held under repurchase agreements . . .
3
Federal agency obligations
4
Bought outright
Held under repurchase agreements . . .
5
Acceptances
6
Loans to depository institutions
7
Adjustment credit
8
Seasonal credit
9
Extended credit
10
Float
11
Other Federal Reserve assets
363,813
362,732r
367,052
362,813
363,884'
363,334r
361,713
364,760
366,428
370,370
320,040
4,891
320,632
2,759
326,769
2,535
320,883
2,291
320,567
3,695
321,263
2,621
320,334
2,658
327,065
0
327,122
1,366
327,755
5,177
4,835
539
0
4,782
390
0
4,732
206
0
4,803
316
0
4,795
535
0
4,754
323
0
4,734
341
0
4,734
0
0
4,734
121
0
4,734
450
0
273
236
0
366
32,633
11
196
0
608r
33,355r
19
72
0
723
31,996
10
218
0
756
33,537
19
202
0
518r
33,553
12
176
0
582'
33,602
15
127
0
611
32,893
39
82
0
87
32,752
2
71
0
788
32,223
10
65
0
889
31,290
12 Gold stock
13 Special drawing rights certificate account .
14 Treasury currency outstanding
11,056
8,018
21,839
11,056
8,018
21,898
11,054
8,018
21,958
11,056
8,018
21,885
11,056
8,018
21,899
11,056
8,018
21,913
11,055
8,018
21,927
11,054
8,018
21,941
11,054
8,018
21,955
11,054
8,018
21,969
351,130
378
353,183
385
356,688
371
353,925
387
354,077
387
352,887
383
353,224
378
355,236
373
356,845
370
357,247
368
9,633
230
5,512
288
5,607
434
5,179
209
5,755
272
5,130
406
5,989
378
5,059
611
5,605
520
5,971
220
6,117
329
6,260'
298
6,341
296
6,217
292
6,293r
303
6,356r
268
6,339
316
6,284
295
6,419
301
6,215
286
ABSORBING RESERVE FUNDS
15 Currency in circulation
16 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
17
Treasury
18
Foreign
19
Service-related balances and
adjustments
20
Other
21 Other Federal Reserve liabilities and
capital
22 Reserve balances with Federal
Reserve Banks 3
9,640
9,537
9,340
9,682
9,480
9,552
8,952
9,017
9,308
9,672
27,269
28,242r
29,005
27,881
28,290r
29,337'
27,137
28,898
28,088
31,433
Nov. 10
Nov. 17
Nov. 24
Wednesday figures
End-of-month figures
Sept.
Oct.
Nov.
Oct. 13
Oct. 20
Oct. 27
Nov. 3
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
U.S. government securities 2
Bought outright—System account .
Held under repurchase agreements
Federal agency obligations
Bought outright
Held under repurchase agreements
Acceptances
Loans to depository institutions
Adjustment credit
Seasonal credit
Extended credit
Float
Other Federal Reserve assets
369,447
360,143r
372,571
363,156
364,359'
361,787'
360,069
368,052
367,131
371,640
319,357
6,296
317,961
3,592
326,804
8,013
322,978
325
320,527
3,595
321,903
691
321,945
0
329,543
0
328,812
812
327,247
6,428
4,804
2,146
0
4,734
449
0
4,719
429
0
4,799
31
0
4,769
338
0
4,734
317
0
4,734
0
0
4,734
0
0
4,734
280
0
4,734
605
0
2,680
239
0
901
33,024
7
138
0
383r
32,878r
16
40
0
1,291
31,260
4
210
0
1,591
33,218
86
187
0
1,369*
33,487r
10
170
0
252'
33,709
14
98
0
641
32,637
6
73
0
912
32,785
1
67
0
1,571
30,854
22
62
0
1,115
31,427
12 Gold stock
13 Special drawing rights certificate account
14 Treasury currency outstanding
11,057
8,018
21,871
11,056
8,018
21,927
11,054
8,018
21,983
11,056
8,018
21,885
11,056
8,018
21,899
11,055
8,018
21,913
11,055
8,018
21,927
11,054
8,018
21,941
11,054
8,018
21,955
11,054
8,018
21,969
351,530
384
352,815
379
359,697
370
354,609
388
353,651
384
352,939
379
354,099
374
356,681
370
356,910
368
358,708
370
17,289
501
6,032
390
6,334
5%
5,234
309
4,879
272
5,030
484
5,273
442
5,732
542
6,705
239
5,328
231
6,105
306
6,339r
325
6,464
297
6,217
283
6,293 r
285
6,356'
279
6,339
241
6,284
304
6,419
300
6,215
281
ABSORBING RESERVE FUNDS
15 Currency in circulation
16 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
17
Treasury
18
Foreign
19
Service-related balances and
adjustments
20
Other
21 Other Federal Reserve liabilities and
capital
22 Reserve balances with Federal
Reserve Banks 3
9,687
24,591
8,879
25
^
9,561
9,358
9,291
9,380
8,797
9,143
9,331
9,514
30,309
27,717
30,277r
27,927 r
25,505
30,009
27,887
32,035
1. For amounts of cash held as reserves, see table 1.12.
2. Includes securities loaned—fully guaranteed by U.S. government securities
pledged with Federal Reserve Banks—and excludes securities sold and scheduled
to be bought back under matched sale-purchase transactions.
3. Excludes required clearing balances and adjustments to compensate for
float.
A6
DomesticNonfinancialStatistics • February 1994
1.12 RESERVES AND BORROWINGS
Depository Institutions1
Millions of dollars
Prorated monthly averages of biweekly averages
Reserve classification
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks 2
Total vault cash 3
Applied vault cash4
Surplus vault cash 5
Total reserves 6
Required reserves
i...
Excess reserve balances at Reserve Banks . . .
Total borrowings at Reserve Banks 8
Seasonal borrowings
Extended credit 9
1990
1991
1992
Dec.
Dec.
Dec.
May
June
July
Aug.
Sept.
Oct.
Nov.
30,237
31,789
28,884
2,905
59,120
57,456
1,664
326
76
23
26,659
32,510
28,872
3,638
55,532
54,553
979
192
38
1
25,368
34,535
31,172
3,364
56,540
55,385
1,155
124
18
1
25,968
33,462
30,133
3,329
56,101
55,104
996
121
84
0
26,462
34,106
30,776
3,330
57,238
56,328
911
181
142
0
26,562
34,535
31,189
3,347
57,750
56,661
1,089
244
210
0
26,564
34,516
31,203
3,313
57,767
56,815
952
352
234
0
27,274
35,217
31,863
3,355
59,136
58,046
1,090
428
236
0
28,297"
35,202
31,739
3,463
60,036r
58,947*
\JO&
285
192
0
29,017
35,705
32,278
3,426
61,295
60,195
1,100
89
75
0
1993
Biweekly averages of daily figures for weeks ending on date indicated
1993
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks 2
Total vault cash 3
Applied vault cash 4
Surplus vault cash
Total reserves 6
Required reserves
i ...
Excess reserve balances at Reserve Banks . . .
Total borrowings at Reserve Banks
Seasonal borrowings
Extended credit 9
Aug. 4
Aug. 18
Sept. 1
Sept. 15
Sept. 29
Oct. 13
Oct. 27
Nov. Kf
Nov. 24
Dec. 8
25,251
35,354
31,883
3,471
57,133
56,021
1,112
232
222
0
26,939
34,869
31,483
3,386
58,422
57,673
750
431
227
0
26,564
33,879
30,693
3,187
57,257
56,136
1,121
305
246
0
27,719
35,332
31,999
3,333
59,718
58,845
874
544
226
0
26,837
35,157
31,781
3,377
58,618
57,318
1,300
321
247
0
27,843
35,805
32,278
3,527
60,121
58,985
1,137
420
222
0
28,798r
34,338
30,946
3,393
59,744r
58,692r
l,052 r
205
189
0
28,017
36,266
32,767
3,499
60,784
59,722
1,062
132
105
0
29,742
34,944
31,566
3,378
61,308
60,205
1,102
74
68
0
28,995
36,544
33,125
3,419
62,120
60,963
1,157
56
43
0
1. Data in this table also appear in the Board's H.3 (502) weekly statistical
release. For ordering address, see inside front cover.
2. Excludes required clearing balances and adjustments to compensate for float
and includes other off-balance-sheet " a s - o f ' adjustments.
3. Total "lagged" vault cash held by depository institutions subject to reserve
requirements. Dates refer to the maintenance periods during which the vault cash
can be used to satisfy reserve requirements. The maintenance period for weekly
reporters ends sixteen days after the lagged computation period during which the
vault cash is held. Before Nov. 25,1992, the maintenance period ended thirty days
after the lagged computation period.
4. All vault cash held during the lagged computation period by "bound"
institutions (that is, those whose required reserves exceed their vault cash) plus
the amount of vault cash applied during the maintenance period by "nonbound"
institutions (that is, those whose vault cash exceeds their required reserves) to
satisfy current reserve requirements.
5. Total vault cash (line 2) less applied vault cash (line 3).
6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash
(line 3).
7. Total reserves (line 5) less required reserves (line 6).
8. Also includes adjustment credit.
9. Consists of borrowing at the discount window under the terms and conditions established for the extended credit program to help depository institutions
deal with sustained liquidity pressures. Because there is not the same need to
repay such borrowing promptly as with traditional short-term adjustment credit,
the money market impact of extended credit is similar to that of nonborrowed
reserves.
Money Stock and Bank Credit
1.13
SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS
A7
Large Banks1
Millions of dollars, averages of daily figures
1993, week ending Monday
Source and maturity
1
2
3
4
5
6
7
8
Federal funds purchased, repurchase agreements, and
other selected borrowings
From commercial banks in the United States
For one day or under continuing contract
For all other maturities
From other depository institutions, foreign banks and
official institutions, and U.S. government agencies
For one day or under continuing contract
For all other maturities
Repurchase agreements on U.S. government and federal
agency securities
Brokers and nonbank dealers in securities
For one day or under continuing contract
For all other maturities
All other customers
For one day or under continuing contract
For all other maturities
MEMO
Federal funds loans and resale agreements in
immediately available funds in maturities of one day or
under continuing contract
9 To commercial banks in the United States
10 To all other specified customers 2
Oct. 4
Oct. 11
Oct. 18
Oct. 25
Nov. 1
Nov. 8
Nov. 15
Nov. 22
Nov. 29
72,908
13,588
77,541
14,502
76,497
14,362
70,801
14,259
71,840
13,186
72,374
13,106
74,470
13,725
71,363
14,109
72,462
15,288
21,441r
22,441r
17,756
25,149
21,280
22,806
20,664
22,706
18,901
21,742
17,810
23,608
18,334
24,776
19,661
24,741
20,951
25,832
17,805
40,212
15,768
40,637
18,981
42,465
16,601
43,950
17,133
40,504
16,848
42,218
19,009
41,454
16,257
40,533
13,216
39,820
31,597
14,326
30,438
14,497
30,392
14,436
31,787
14,084
30,311
14,262
31,530
13,512
32,028
13,492
32,465
13,767
29,848
17,064
45,766
27,347
40,813
25,316
41,543
27,214
38,232
27,450
42,365
26,175
39,656
29,119
42,090
29,407
37,366
27,794
43,412
29,747
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
DomesticNonfinancialStatistics • February 1994
FEDERAL RESERVE BANK INTEREST RATES
Percent per year
Current and previous levels
Adjustment credit 1
Federal Reserve
Bank
On
1/6/94
Extended credit 3
Seasonal credit 2
Effective date
Previous rate
On
1/6/94
Boston
New York . . .
Philadelphia..
Cleveland
Richmond
Atlanta
7/2/92
7/2/92
7/2/92
7/6/92
7/2/92
7/2/92
3.5
3.10
Chicago
St. Louis
Minneapolis..
Kansas C i t y . .
Dallas
San Francisco
7/2/92
7/7/92
7/2/92
7/2/92
7/2/92
7/2/92
3.5
3.10
Effective date
Previous rate
On
1/6/94
1/6/94
1/6/94
1/6/94
1/6/94
1/6/94
1/6/94
3.10
3.60
1/6/94
1/6/94
1/6/94
1/6/94
1/6/94
1/6/94
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
11
12
12
13
13
13
12
11
11
10
10
11
12
13
Effective
1981—May
5
Nov.
7,
6
4
Dec.
1982—July 70
7,3
Aug. 7
3
16
77
30
Oct. 17,
n
Nov. 77
7.6
Dec. 14
15
17
13-14
14
13-14
13
12
F.R.
Bank
of
N.Y.
14
14
13
13
12
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
9
9
8.5
8.5
1985—May 70
74
7.5-8
7.5
7.5
7.5
1986—Mar. 7
10
Apr. 71
July 11
7-7.5
7
6.5-7
6
7
7
6.5
6
1984—Apr.
Previous rate
1/6/94
1/6/94
1/6/94
1/6/94
1/6/94
1/6/94
3.60
1/6/94
1/6/94
1/6/94
1/6/94
1/6/94
1/6/94
3.60
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
6.5
6.5
1989—Feb. 24
6.5-7
7
7
7
Effective date
27
1990—Dec. 19 . . . . .
1991—Feb.
Apr.
May
Sept.
Nov.
Dec.
1992—July
1
4
30
2
13
17
6
7
20
24
2
7
In effect Jan. 6, 1994
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
3.60
3.10
Effective date
6.5
6.5
6-6.5
6
5.5-6
5.5
5-5.5
5
4.5-5
4.5
3.5-4.5
3.5
6
6
5.5
5.5
5
5
4.5
4.5
3.5
3.5
3-3.5
3
3
3
3
3
ordinarily is charged on extended-credit loans outstanding less than thirty days;
however, at the discretion of the Federal Reserve Bank, this time period may be
shortened. Beyond this initial period, a flexible rate somewhat aoove rates on
market sources of funds is charged. The rate ordinarily is reestablished on the first
business day of each two-week reserve maintenance period, but it is never less
than the discount rate applicable to adjustment credit plus 50 basis points.
4. For earlier data, see the following publications of the Board of Governors:
Banking and Monetary Statistics, 1914-1941, and 1941-1970-, and the Annual
Statistical Digest, 1970-1979.
In 1980 and 1981, the Federal Reserve applied a surcharge to short-term
adjustment-credit borrowings by institutions with deposits of $500 million or more
that had borrowed in successive weeks or in more than four weeks in a calendar
quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7,
1980. A surcharge of 2 percent was reimposed on Nov. 17, 1980; the surcharge
was subsequently raised to 3 percent on Dec. 5, 1980, and to 4 percent on May 5,
1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981, and to 2
percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the
surcharge was changed from a calendar quarter to a moving thirteen-week period.
The surcharge was eliminated on Nov. 17, 1981.
Policy Instruments
A9
1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1
Requirement
Type of deposit 2
Net transaction accounts3
1 $0 million-$51.9 million
2 More than $51.9 million4
1. Required reserves must be held in the form of deposits with Federal Reserve
Banks or vault cash. Nonmember institutions may maintain reserve balances with
a Federal Reserve Bank indirectly on a pass-through basis with certain approved
institutions. For previous reserve requirements, see earlier editions of the Annual
Report or the Federal Reserve Bulletin. Under provisions of the Monetary
Control Act, depository institutions include commercial banks, mutual savings
banks, savings and loan associations, credit unions, agencies and branches of
foreign banks, and Edge Act corporations.
2. The Garn-St Germain Depository Institutions Act of 1982 (Public Law
97-320) requires that $2 million of reservable liabilities of each depository
institution be subject to a zero percent reserve requirement. The Board is to adjust
the amount of reservable liabilities subject to this zero percent reserve requirement each year for the succeeding calendar year by 80 percent of the percentage
increase in the total reservable liabilities of all depository institutions, measured
on an annual basis as of June 30. No corresponding adjustment is to be made in
the event of a decrease. On Dec. 21, 1993, the exemption was raised from $3.8
million to $4.0 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
Percentage of
deposits
Effective date
3
10
12/21/93
12/21/93
0
12/27/90
0
12/27/90
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. 21,
1993, for institutions reporting quarterly and weekly, the amount was increased
from $46.8 million to $51.9 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 1 Vl 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 IVi years
or more has been zero since Oct. 6, 1983.
For institutions that report quarterly, the reserve requirement on nonpersonal
time deposits with an original maturity of less than 1 Vi years was reduced from 3
percent to zero on Jan. 17, 1991.
6. The reserve requirement on Eurocurrency liabilities was reduced from 3
percent to zero in the same manner and on the same dates as was the reserve
requirement on nonpersonal time deposits with an original maturity of less than
1 Vi years (see note 4).
A10 Domestic Financial Statistics • February 1994
1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS 1
Millions of dollars
1993
Type of transaction
and maturity
1990
1991
1992
Apr.
May
June
July
Aug.
Sept.
Oct.
U.S. TREASURY SECURITIES
1
2
3
4
Outright transactions (excluding
transactions)
Treasury bills
Gross purchases
Gross sales
Exchanges
Redemptions
Others within one year
Gross purchases
Gross sales
Maturity shifts
Exchanges
Redemptions
One to five years
Gross purchases
Gross sales
Maturity shifts
Exchanges
Five to ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
More than ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
All maturities
Gross purchases
Gross sales
Redemptions
matched
24,739
7,291
241,086
4,400
20,158
120
277,314
1,000
14,714
1,628
308,699
1,600
121
0
30,124
0
349
0
26,610
0
7,280
0
24,821
0
0
0
35,943
0
902
0
27,775
0
366
0
31,128
0
1,396
0
25,783
468
425
0
25,638
-27,424
0
3,043
0
24,454
-28,090
1,000
1,096
0
36,662
-30,543
0
244
0
1,950
-1,100
0
0
0
4,108
-4,013
0
0
0
4,002
-2,152
0
0
0
0
0
0
100
0
1,497
-5,491
0
411
0
3,074
-1,861
0
0
0
913
-1,566
0
250
200
-21,770
25,410
6,583
0
-21,211
24,594
13,118
0
-34,478
25,811
2,490
0
-1,630
800
0
0
-3,652
3,245
0
0
-4,002
2,152
200
0
666
0
1,100
0
-834
3,866
2,400
0
-3,074
1,861
0
0
-31
1,566
0
100
-2,186
789
1,280
0
-2,037
2,894
2,818
0
-1,915
3,532
1,147
0
-320
300
0
0
-333
468
0
0
0
0
0
0
-666
0
500
0
-432
1,100
797
0
0
0
0
0
-882
0
0
0
-1,681
1,226
375
0
-1,209
600
2,333
0
-269
1,200
1,110
0
0
0
0
0
-123
300
0
0
0
0
0
0
0
0
100
0
-231
525
717
0
0
0
0
0
0
0
25,414
7,591
4,400
31,439
120
1,000
34,079
1,628
1,600
5,111
0
0
349
0
0
7,280
0
0
200
0
0
2,702
0
0
4,691
0
0
1,396
0
468
1,369,052
1,363,434
1,570,456
1,571,534
1,482,467
1,480,140
127,115
128,924
124,462
123,227
111,726
113,095
115,504
117,074
136,037
135,705
124,898
122,578
115,160
112,837
219,632
202,551
310,084
311,752
378,374
386,257
30,197
36,953
33,987
28,640
53,051
43,342
41,190
56,246
53,053
48,263
62,905
61,399
27,693
30,397
24,886
29,729
20,642
163
4,461
18,357
-13,286
7,160
3,878
-4,099
0
0
183
0
5
292
0
0
632
0
0
28
0
0
41
0
0
22
0
0
366
0
0
125
0
0
35
0
0
70
41,836
40,461
22,807
23,595
14,565
14,486
197
764
2,105
2,105
2,968
2,019
3,479
4,428
2,485
2,415
9,810
7,734
3,812
5,509
35 Net change in federal agency obligations
1,192
-1,085
-554
-595
-41
927
-1,315
-55
2,041
-1,767
36 Total net change in System Open Market
Account
26,078
28,644
20,089
-431
4,420
19,284
-14,601
7,105
5,919
-5,866
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Matched transactions
25 Gross sales
26 Gross purchases
Repurchase
agreements
27 Gross purchases
28 Gross sales
29 Net change in U.S. Treasury securities
FEDERAL AGENCY OBLIGATIONS
Outright transactions
30 Gross purchases
31 Gross sales
32 Redemptions
Repurchase
agreements
33 Gross purchases
34 Gross sales
1. Sales, redemptions, and negative figures reduce holdings of the System Open
Market Account; all other figures increase such holdings.
Federal Reserve Banks
1.18 FEDERAL RESERVE BANKS
All
Condition and Federal Reserve Note Statements1
Millions of dollars
Account
Oct. 27
Nov. 3
Wednesday
End of month
1993
1993
Nov. 10
Nov. 17
Nov. 24
Sept. 30
Oct. 31
Nov. 30
Consolidated condition statement
Assets
1 Gold certificate account
2 Special drawing rights certificate account
3
Loans
4 To depository institutions
5 Other
6 Acceptances held under repurchase agreements
Federal agency obligations
7 Bought outright
8 Held under repurchase agreements
11,055
8,018
401
11,055
8,018
403
11,054
8,018
402
11,054
8,018
401
11,054
8,018
389
11,057
8,018
378
11,056
8,018
406
11,054
8,018
372
180
0
0
111
0
0
78
0
0
67
0
0
83
0
0
2,918
0
0
145
0
0
55
0
0
4,734
317
4,734
0
4,734
0
4,734
280
4,734
605
4,804
2,146
4,734
449
4,719
429
322,594
321,945
329,543
329,624
333,675
325,653
321,553
334,817
10 Bought outright 2
11
Bills
1?
Notes
13
Bonds
14 Held under repurchase agreements
321,903
154,997
128,128
38,778
691
321,945
154,939
128,228
38,778
0
329,543
162,537
128,228
38,778
0
328,812
161,806
128,453
38,553
812
327,247
160,241
128,453
38,553
6,428
319,357
151,982
128,597
38,778
6,296
317,961
151,055
128,128
38,778
3,592
326,804
159,798
128,453
38,553
8,013
15 Total loans and securities
327,825
326,791
334,355
334,706
339,098
335,521
326,882
340,020
5,517
1,048
6,754
1,048
5,793
1,049
6,882
1,050
7,359
1,050
4,349
1,047
5,052
1,048
7,808
1,050
23,324
9,393
22,590
9,046
22,605
9,258
22,622
7,189
22,664
7,697
23,272
8,771
22,580
9,229
22,443
7,692
386,581
385,704
392,535
391,921
397,329
392,412
384,270
398,458
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
331,806
332,948
335,513
335,723
337,498
330,421
331,672
338,456
22 Total deposits
40,367
37,985
42,786
41,102
44,918
48,030
39,169
43,277
23 Depository institutions
24 U.S. Treasury—General account
25 Foreign—Official accounts
26
34,574
5,030
484
279
32,030
5,273
442
241
36,208
5,732
542
304
33,859
6,705
239
300
39,061
5,328
231
281
29,934
17,289
501
306
32,422
6,032
390
325
36,050
6,334
596
297
5,029
2,397
5,974
2,376
5,094
2,393
5,764
2,363
5,400
2,510
4,275
2,460
4,550
2,482
7,165
2,514
379,598
379,283
385,786
384,952
390,325
385,186
377,872
391,411
3,335
3,054
594
3,343
3,022
56
3,352
3,042
355
3,352
3,054
563
3,364
3,054
585
3,331
3,054
842
3,338
2,984
75
3,367
3,054
626
33 Total liabilities and capital accounts
386,581
385,704
392,535
391,921
397,329
392,412
384,270
398,458
MEMO
34 Marketable U.S. Treasury securities held in custody for
foreign and international accounts
334,033
334,929
337,191
346,024
344,746
330,479
333,735
346,718
21 Federal Reserve notes
27 Deferred credit items
^
28 Other liabilities and accrued dividends
29 Total liabiUties
CAPITAL ACCOUNTS
30 Capital paid in
31 Surplus
32 Other capital accounts
Federal Reserve note statement
35 Federal Reserve notes outstanding (issued to Banks)
36
LESS: Held by Federal Reserve Banks
37
Federal Reserve notes, net
38
39
40
41
Collateral held against notes, net:
Gold certificate account
Special drawing rights certificate account
Other eligible assets
U.S. Treasury and agency securities
42 Total collateral
397,288
65,482
331,806
398,769
65,821
332,948
401,179
65,667
335,513
403,185
67,461
335,723
404,902
67,404
337,498
395,420
64,999
330,421
397,576
65,904
331,672
405,827
67,371
338,456
11,055
8,018
0
312,732
11,055
8,018
0
313,876
11,054
8,018
0
316,440
11,054
8,018
0
316,651
11,054
8,018
0
318,426
11,057
8,018
0
311,346
11,056
8,018
0
312,599
11,054
8,018
0
319,384
331,806
332,948
335,513
335,723
337,498
330,421
331,672
338,456
1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly
statistical release. For ordering address, see inside front cover.
2. Includes securities loaned—fully guaranteed by U.S. Treasury securities
pledged with Federal Reserve Banks—and excludes securities sold and scheduled
to be bought back under matched sale-purchase transactions.
3. Valued monthly at market exchange rates.
4. Includes special investment account at the Federal Reserve Bank of Chicago
in Treasury bills maturing within ninety days.
5. Includes exchange-translation account reflecting the monthly revaluation at
market exchange rates of foreign exchange commitments.
A12
1.19
DomesticNonfinancialStatistics • February 1994
FEDERAL RESERVE BANKS
Maturity Distribution of Loan and Security Holding
Millions of dollars
Type of holding and maturity
Wednesday
End of month
1993
1993
Sept. 30
Oct. 29
83
2,918
145
56
81
2
0
2,793
125
0
71
75
0
31
25
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
329,543
329,624
333,675
319,357
317,961
326,804
19,812
78,865
102,389
75,743
21,623
31,111
20,360
77,974
100,643
76,083
23,651
30,913
20,102
78,341
104,584
76,083
23,651
30,913
4,423
76,689
109,686
74,942
22,505
31,111
3,625
85,863
100,828
74,911
21,623
31,111
6,211
84,677
104,601
76,750
23,651
30,913
4,734
4,734
5,014
5,339
4,804
4,734
4,719
0
756
1,104
2,139
594
142
0
756
1,104
2,139
594
142
560
476
1,104
2,139
594
142
885
476
1,104
2,139
594
142
220
550
1,102
2,187
599
142
104
651
1,105
2,139
594
142
290
498
1,127
2,074
589
142
Nov. 17
Nov. 24
78
68
17
61
0
66
2
0
0
0
0
0
0
0
0
0
322,594
321,945
8,532
85,486
100,930
74,911
21,623
31,111
21,283
71,110
101,076
75,743
21,623
31,111
16 Total federal agency obligations
5,051
Within fifteen days 1
Sixteen days to ninety days
Ninety-one days to one year
One year to five years
Five years to ten years
More than ten years
421
651
1,105
2,139
594
142
Oct. 27
Nov. 3
Nov. 10
1 Total loans
180
111
2 Within fifteen days 1
3 Sixteen days to ninety days
4 Ninety-one days to one year
170
10
0
40
71
0
5 Total acceptances
0
6 Within fifteen days 1
7 Sixteen days to ninety days
8 Ninety-one days to one year
0
0
0
9 Total U.S. Treasury securities
10
11
12
13
14
15
17
18
19
20
21
22
Within fifteen days 1
Sixteen days to ninety days
Ninety-one days to one year
One year to five years
Five years to ten years
More than ten years
1. Holdings under repurchase agreements are classified as maturing within
fifteen days in accordance with maximum maturity of the agreements.
Nov. 30
Monetary and Credit Aggregates
A13
1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE 1
Billions of dollars, averages of daily figures
1993
Item
1989
Dec.
1990
Dec.
1992
Dec.
1991
Dec.
Apr.
Total reserves 3
Nonborrowed reserves 4
Nonborrowed reserves plus extended credit 5
Required reserves
Monetary base 6
June
July'
Aug.
Sept.
Oct/
Nov.
57.57
57.32
57.32
56.48
370.98
58.03
57.68
57.68
57.08
374.53
58.84
58.41
58.41
57.75
379.26
59.82
59.53
59.53
58.73
381.77
60.46
60.37
60.37
59.36
384.57
Seasonally adjusted
ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS2
1
2
3
4
5
May
40.49
40.23
40.25
39.57
267.73
41.77
41.44
41.46
40.10
293.19
45.53
45.34
45.34
44.56
317.17
54.35
54.23
54.23
53.20
350.80
55.20
55.12
55.12
54.10
360.63
56.88
56.76
56.76
55.88
364.77
57.12
56.94
56.94
56.21
368.07
Not seasonally adjusted
6
7
8
9
10
Total reserves
Nonborrowed reserves
Nonborrowed reserves plus extended credit . .
Required reserves 8
Monetary base 9
41.77
41.51
41.53
40.85
271.18
43.07
42.74
42.77
41.40
296.68
46.98
46.78
46.78
46.00
321.07
56.06
55.93
55.93
54.90
354.55
56.37
56.29
56.29
55.27
361.64
55.88
55.76
55.76
54.88
364.08
56.96
56.78
56.78
56.05
368.73
57.42
57.17
57.17
56.33
372.02
57.38
57.03
57.03
56.43
374.10
58.69
58.26
58.26
57.60
377.75
59.53
59.24
59.24
58.44
380.82
60.72
60.63
60.63
59.62
384.28
62.81
62.54
62.56
61.89
292.55
.92
.27
59.12
58.80
58.82
57.46
313.70
1.66
.33
55.53
55.34
55.34
54.55
333.61
.98
.19
56.54
56.42
56.42
55.39
360.90
1.16
.12
56.54
56.47
56.47
55.45
368.18
1.10
.07
56.10
55.98
55.98
55.10
370.46
57.24
57.06
57.06
56.33
375.19
.91
.18
57.75
57.51
57.51
56.66
378.48
1.09
.24
57.77
57.42
57.42
56.82
380.53
.95
.35
59.14
58.71
58.71
58.05
384.25
1.09
.43
60.04
59.75
59.75
58.95
387.51
1.09
.29
61.30
61.21
61.21
60.20
391.11
1.10
.09
NOT ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS10
11
12
13
14
15
16
17
Total reserves 11
Nonborrowed reserves
Nonborrowed reserves plus extended credit . .
Required reserves
Monetary base 1 2
Excess reserves
Borrowings from the Federal Reserve
1. Latest monthly and biweekly figures are available from the Board's H.3 (502)
weekly statistical release. Historical data and estimates of the impact on required
reserves of changes in reserve requirements are available from the Monetary and
Reserves Projections Section, Division of Monetary Affairs, Board of Governors
of the Federal Reserve System, Washington, DC 20551.
2. Figures reflect adjustments for discontinuities, or " b r e a k s , " associated with
regulatory changes in reserve requirements. (See also table 1.10)
3. Seasonally adjusted, break-adjusted total reserves equal seasonally
adjusted, break-adjusted required reserves (line 4) plus excess reserves (line 16).
4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally
adjusted, break-adjusted total reserves (line 1) less total borrowings of depository
institutions from the Federal Reserve (line 17).
5. Extended credit consists of borrowing at the discount window under
the terms and conditions established for the extended credit program to help
depository institutions deal with sustained liquidity pressures. Because there is
not the same need to repay such borrowing promptly as with traditional shortterm adjustment credit, the money market impact of extended credit is similar to
that of nonborrowed reserves.
6. The seasonally adjusted, break-adjusted monetary base consists of (1)
seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally
adjusted currency component of the money stock, plus (3) (for all quarterly
reporters on the "Report of Transaction Accounts, Other Deposits and Vault
C a s h " and for all those weekly reporters whose vault cash exceeds their required
reserves) the seasonally adjusted, break-adjusted difference between current vault
cash and the amount applied to satisfy current reserve requirements.
7. Break-adjusted total reserves equal break-adjusted required reserves (line 9)
plus excess reserves (line 16).
8. To adjust required reserves for discontinuities that are due to regulatory
changes in reserve requirements, a multiplicative procedure is used to estimate
1.00
.12
what required reserves would have been in past periods had current reserve
requirements been in effect. Break-adjusted required reserves include required
reserves against transactions deposits and nonpersonal time and savings deposits
(but not reservable nondeposit liabilities).
9. The break-adjusted monetary base equals (1) break-adjusted total reserves
(line 6), plus (2) the (unadjusted) currency component of the money stock, plus (3)
(for all quarterly reporters on the "Report of Transaction Accounts, Other
Deposits and Vault C a s h " and for all those weekly reporters whose vault cash
exceeds their required reserves) the break-adjusted difference between current
vault cash and the amount applied to satisfy current reserve requirements.
10. Reflects actual reserve requirements, including those on nondeposit liabilities, with 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 C a s h " and for all
those weekly reporters whose vault cash exceeds their required reserves) the
difference between current vault cash and the amount applied to satisfy current
reserve requirements. Since the introduction of changes in reserve requirements
(CRR), currency and vault cash figures have been measured over the computation
periods ending on Mondays.
13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14).
A14
1.21
DomesticNonfinancialStatistics • February 1994
MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES 1
Billions of dollars, averages of daily figures
1993
1989
Dec.
Item
1990
Dec.
1991
Dec.
1992
Dec.
Aug.
Sept/
Oct/
Nov.
1,106.5
3,533.1
4,178.9
5,066.5
12,141.6
1,116.1
3.535.2
4.186.3
5,078.7
12,178.9
1.125.8
3,547.7
4.200.9
n.a.
n.a.
Seasonally adjusted
1
2
3
4
5
Measures2
Ml
M2
M3
L
Debt
6
7
8
9
MI components
Currency 3
.
Travelers checks 4
Demand deposits 5
Other checkable deposits 6
794.6
3,233.3
4,056.1
4,886.1
10,030.7
827.2
3.345.5
4,116.8
4.966.6
10,670.1
899.3
3,445.8
4,168.1
4,982.3
11,145.5r
1,026.6
3,494.8
4,162.5
5,039.5
11,721.l r
222.7
6.9
279.8
285.3
246.7
7.8
278.2
294.5
267.2
7.8
290.5
333.8
292.3
8.1
340.8
385.2
312.6
7.8
370.7
403.1
316.4
7.8
376.4
406.0
318.2
7.9
379.9
410.2
319.9
8.0
385.3
412.7
2,438.7
822.8
2,518.3
771.3
2,546.6
722.3
2,468.3
667.7
2,426.9r
644.5r
2,426.6
645.8
2,419.1
651.1
2,421.9
653.1
Commercial banks
12 Savings deposits, ircluding MMDAs
13 Small time deposits' . .
14 Large time deposits 10, 11
541.4
534.9
387.7
582.2
610.3
368.8
666.2
601.5
341.3
756.1
506.9
288.1
773.9
479.3
272.2
777.2
475.9
270.6
778.0
472.0
271.3
783.3
467.7
269.9
Thrift institutions
15 Savings deposits, iiuluding MMDAs
16 Small time deposits 9 .
17 Large time deposits
349.6
617.8
161.1
338.6
562.0
120.9
376.3
463.2
83.4
429.9
360.4
67.5
431.2
330.8r
63.2
431.6
327.6
63.1
431.6
323.8
63.1
431.3
320.5
62.8
Money market mutual funds
18 General purpose and broker-dealer .
19 Institution-only
317.4
108.8
350.5
135.9
363.9
182.1
342.3
202.3
334.2r
193.3
332.4
194.1
332.9
196.6
336.4
196.7
2,247.6
7,783.1
2,490.7
8,179.4
2,763.8
8,381.7r
3,068.4
8,652.7r
3,251.l r
8,837.3r
3,270.4
8,871.2
3,266.3
8,912.7
Nontransaction
10 In M2
11 In M3
components
Debt components
20 Federal debt
21 Nonfederal debt
:...
1,094.1
3,521. l r
4,165.6r
5,077.0?
12,088.3r
n.a.
n.a.
Not seasonally adjusted
22
23
24
25
26
Measures
Ml
M2
M3
L
Debt
27
28
29
30
Ml components
Currency 3
Travelers checks 4
Demand deposits 5
Other checkable deposits 6
811.5
3,245.1
4,066.4
4,906.0
10,026.5
843.7
3,357.0
4,126.3
4,988.0
10,667.7
916.4
3,457.9
4.178.1
5.004.2
ll,144.6 r
1,045.7
3,509.1
4,174.6
5,064.0
ll,722.0 r
1,087.7
3,513.9r
4,163.5r
5,064. r
12,051.7r
1,098.2
3,519.5
4,166.2
5,055.2
12,109.9
1,110.9
3,529.2
4,176.4
5,067.9
12,151.9
1,128.6
3,551.1
4,206.8
n.a.
n.a.
225.3
6.5
291.5
288.1
249.5
7.4
289.9
296.9
269.9
7.4
302.9
336.3
295.0
7.8
355.2
387.7
312.8
8.4
367.3
399.2
314.8'
8.2
372.9
402.4
317.3
8.0
380.8
404.8
319.8
7.7
390.5
410.5
2,433.6
821.3
2,513.2
769.3
2,541.5
720.1
2,463.4
665.5
2,426. l r
649.6r
2,421.2
646.7
2,418.3
647.2
2,422.5
655.7
Commercial banks
33 Savings deposits, including MMDAs
34 Small time deposits 9
35 Large time deposits 10 ' 11
543.0
533.8
386.9
580.1
610.5
367.7
663.3
602.0
340.1
752.3
507.7
287.1
774.5
479.4
273.3
775.0
476.6
271.0
776.1
473.2
270.5
782.4
468.4
269.7
Thrift institutions
36 Savings deposits, including MMDAs
37 Small time deposits
38 Large time deposits 10
347.4
616.2
162.0
337.3
562.1
120.6
374.7
463.6
83.1
427.8
360.9
67.3
431.5
SSO^
63.4
430.4
328.0
63.2
430.5
324.6
62.9
430.8
321.0
62.7
Money market mutual funds
39 General purpose and broker-dealer
40 Institution-only
315.7
109.1
348.4
136.2
361.5
182.4
340.0
202.4
331.5
193.3
329.7
190.7
329.9
192.4
334.6
197.1
Repurchase agreements and Eurodollars
41 Overnight
42 Term
77.5
178.4
74.7
158.3
76.3
130.1
74.7
126.2
78.3
140.4r
81.5
141.5
84.0
141.0
85.3
145.5
2,247.5
7,779.0
2,491.3
8,176.3
2,765.0
8,379.7r
3,069.8
8,652.2r
3,229.4
8,822.3r
3,251.9
8,857.9
Nontransaction
31 In M2
32 In M3 8
components
Debt components
43 Federal debt
44 Nonfederal debt
Footnotes appear on following page.
3.249.4
8.902.5 '
n.a.
n.a.
Monetary and Credit Aggregates
NOTES TO TABLE 1.21
1. Latest monthly and weekly figures are available from the Board's H.6 (508)
weekly statistical release. Historical data are available from the Money and
Reserves Projection Section, Division of Monetary Affairs, Board of Governors of
the Federal Reserve System, Washington, DC 20551.
2. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the
vaults of depository institutions, (2) travelers checks of nonbank issuers, (3)
demand deposits at all commercial banks other than those owed to depository
institutions, the U.S. government, and foreign banks and official institutions, less
cash items in the process of collection and Federal Reserve float, and (4), other
checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW)
and automatic transfer service (ATS) accounts at depository institutions, credit
union share draft accounts, and demand deposits at thrift institutions. Seasonally
adjusted Ml is computed by summing currency, travelers checks, demand
deposits, and OCDs, each seasonally adjusted separately.
M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements
(RPs) issued by all depository institutions and overnight Eurodollars issued to
U.S. residents by foreign branches of U.S. banks worldwide, (2) savings (including MMDAs) and small time deposits (time deposits—including retail RPs—in
amounts of less than $100,000), and (3) balances in both taxable and tax-exempt
general-purpose and broker-dealer money market funds. Excludes individual
retirement accounts (IRAs) and Keogh balances at depository institutions and
money market funds. Also excludes all balances held by U.S. commercial banks,
money market funds (general purpose and broker-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 M l .
M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of
$100,000 or more) issued by all depository institutions, (2) term Eurodollars held
by U.S. residents at foreign branches of U.S. banks worldwide and at all banking
offices in the United Kingdom and Canada, and (3) balances in both taxable and
tax-exempt, institution-only money market funds. Excludes amounts held by
depository institutions, the U.S. government, money market funds, and foreign
banks and official institutions. Also excluded is the estimated amount of overnight
RPs and Eurodollars held by institution-only money market funds. Seasonally
adjusted M3 is computed by adjusting its non-M2 component as a whole and then
adding this result to seasonally adjusted M2.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper, and bankers acceptances, net of money
A15
market fund holdings of these assets. Seasonally adjusted L is computed by
summing U.S. savings bonds, short-term Treasury securities, commercial paper,
and bankers acceptances, each seasonally adjusted separately, and then adding
this result to M3.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. Data are derived from the Federal
Reserve Board's flow of funds accounts. Debt data are based on monthly
averages. This sum is seasonally adjusted as a whole.
3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of
depository institutions.
4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. Travelers checks issued by depository institutions are included in
demand deposits.
5. Demand deposits at commercial banks and foreign-related institutions other
than those owed to depository institutions, the U.S. government, and foreign
banks and official institutions, less cash items in the process of collection and
Federal Reserve float.
6. Consists of NOW and ATS account balances at all depository institutions,
credit union share draft account balances, and demand deposits at thrift institutions.
7. Sum of (1) overnight RPs and overnight Eurodollars, (2) money market fund
balances (general purpose and broker-dealer), (3) savings deposits (including
MMDAs), and (4) small time deposits.
8. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S.
residents, and (4) money market ftind balances (institution-only), less (5) a
consolidation adjustment that represents the estimated amount of overnight RPs
and Eurodollars held by institution-only money market funds.
9. Small time deposits—including retail RPs—are those issued in amounts of
less than $100,000. All IRAs and Keogh accounts at commercial banks and thrift
institutions are subtracted from small time deposits.
10. Large time deposits are those issued in amounts of $100,000 or more,
excluding those booked at international banking facilities.
11. Large time deposits at commercial banks less those held by money market
funds, depository institutions, U.S. government, and foreign banks and official
institutions.
A16
DomesticNonfinancialStatistics • February 1994
1.22 DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING
Commercial and BIF-insured saving banks1
1993
Item
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct/
Nov.
Interest rates (annual effective yields)
INSURED COMMERCIAL BANKS
1 Negotiable order of withdrawal accounts . . .
2 Savings deposits
3.76
4.30
2.33
2.88
2.21
2.73
2.15
2.68
2.12
2.65
2.09
2.61
2.06
2.59
2.01
2.55
1.96
2.51
1.92
2.49
1.89
2.48
Interest-bearing time deposits with balances
of less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2Vi years
More than 2 Vi years
4.18
4.41
4.59
4.95
5.52
2.90
3.16
3.37
3.88
4.77
2.75
3.03
3.22
3.74
4.52
2.72
2.99
3.19
3.66
4.47
2.70
2.97
3.18
3.64
4.47
2.68
2.97
3.19
3.65
4.44
2.67
2.97
3.18
3.64
4.43
2.66
2.96
3.17
3.63
4.40
2.63
2.92
3.13
3.55
4.28
2.63
2.91
3.11
3.54
4.27
2.64
2.92
3.13
3.54
4.28
8 Negotiable order of withdrawal accounts . . .
9 Savings deposits 2
4.44
4.97
2.45
3.20
2.32
3.05
2.25
2.98
2.20
2.93
2.13
2.88
2.09
2.83
2.07
2.80
2.01
2.73
1.98
2.68
1.95
2.65
Interest-bearing time deposits with balances
of less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2V2 years
More than 2 Yi years
4.68
4.92
4.99
5.23
5.98
3.13
3.44
3.61
4.02
5.00
2.95
3.28
3.52
3.83
4.89
2.91
3.23
3.48
3.86
4.84
2.87
3.19
3.45
3.76
4.79
2.86
3.17
3.44
3.79
4.75
2.80
3.15
3.40
3.72
4.73
2.79
3.12
3.37
3.73
4.73
2.76
3.05
3.33
3.69
4.62
2.75
3.05
3.34
3.68
4.57
2.73
3.03
3.32
3.69
4.60
3
4
5
6
7
BIF-INSURED SAVINGS BANKS3
10
11
12
13
14
Amounts outstanding (millions of dollars)
INSURED COMMERCIAL BANKS
15 Negotiable order of withdrawal accounts . . .
16 Savings deposits 2
17
Personal
18
Nonpersonal
244,637
652,058
508,191
143,867
286,541
738,253
578,757
159,496
287,811
747,809
591,388
156,422
280,073
745,038
586,863
158,175
283,860
753,452
591,231
162,221
287,555
754,790
592,545
162,245
284,496
757,716
593,448
164,268
287,675
761,919
593,318
168,601
286,056
758,835
592,028
166,807
289,813
765,372
595,715
169,657
297,329
770,609
598,200
172,408
Interest-bearing time deposits with balances
of less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2 V4 years
More than 2 n years
47,094
158,605
209,672
171,721
158,078
38,474
127,831
163,098
152,977
169,708
35,459
125,630
158,173
147,798
177,558
34,675
122,136
156,957
146,830
178,657
33,213
119,096
157,559
144,330
179,761
31,743
114,846
156,549
144,804
179,297
30,803
112,497
156,431
143,605
180,983
30,017
109,603
155,074
141,377
181,762
30,384
108,574
152,501
139,406
184,414
30,022
108,504
149,758
139,042
183,790
29,730
109,228
147,334
139,315
180,972
147,266
147,350
148,515
147,463
146,450
146,523
146,1%
145,955
145,636
144,776
144,345
9,624
71,215
68,638
2,577
10,871
81,786
78,695
3,091
10,199
77,390
74,430
2,961
9,876
76,970
74,077
2,893
10,000
77,352
74,376
2,976
10,313
77,495
74,569
2,926
10,457
78,390
75,049
3,341
10,468
78,387
75,153
3,234
10,471
78,182
74,978
3,204
10,548
77,995
74,737
3,258
10,852
77,948
74,664
3,284
4,146
21,686
29,715
25,379
18,665
3,867
17,345
21,780
18,442
18,845
3,201
14,468
19,074
16,842
18,564
3,167
14,328
18,778
16,433
18,646
3,103
14,129
18,520
16,155
18,725
3,022
13,808
18,427
15,972
18,989
2,871
13,773
18,454
16,250
19,229
2,928
13,525
18,143
16,200
19,331
2,886
13,261
17,798
16,161
19,610
2,839
13,131
17,441
16,124
19,657
2,778
12,926
17,178
15,995
19,645
23,007
21,713
20,089
19,969
19,861
19,855
19,920
19,802
19,766
19,601
19,382
19
20
21
22
23
24 IRA/Keogh Flan deposits
BIF-INSURED SAVINGS BANKS3
25 Negotiable order of withdrawal accounts
26 Savings deposits 2
Personal
27
28
Nonpersonal
29
30
31
32
33
Interest-bearing time deposits with balances
of less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2Vi years
More than 2 w years
34 IRA/Keogh Plan accounts
1. BIF, Bank Insurance Fund. Data in this table also appear in the Board's H.6
(508) Special Supplementary Table monthly statistical release. For ordering
address, see inside front cover. Estimates are based on data collected by the
Federal Reserve System from a stratified random sample of about 460 commercial
banks and 80 savings banks on the last Wednesday of each period. Data are not
seasonally adjusted and include IRA/Keogh deposits and foriegn currency denominated deposits. Data exclude retail repurchase agreements and deposits held in
U.S. branches and agencies of foreign banks.
2. Includes personal and nonpersonal money market deposits.
3. BIF-insured savings banks include both mutual and federal savings banks.
Monetary and Credit Aggregates
1.23
All
BANK DEBITS A N D DEPOSIT TURNOVER 1
Debits are in billions of dollars; turnover is ratio of debits to deposits; monthly data are at annual rates
1993
Bank group, or type of customer
Apr.
DEBITS
Demand deposits3
1 All insured banks
2
Major New York City banks
3
Other banks
4 Other checkable deposits 4
5 Savings deposits (including MMDAs)
May
June
July r
Aug. r
Sept.
Seasonally adjusted
277,157.5
131,699.1
145,458.4
277,758.0
137,352.3
140,405.7
315,806.1
165,572.7
150,233.5
324,638.7
163,540.1
161,098.6
306,642.9
155,495.0
151,147.9
335,248.5
170,062.9
165,185.6
331,362.1
166,869.2
164,492.9
333,320.0
168,433.5
164,886.5
360,217.0
185,625.9
174,591.1
3,349.0
3,483.3
3,645.5
3,266.1
3,788.1
3,331.3
3,524.7
3,523.3
3,284.7
3,436.1
3,620.9
3,637.4
3,377.0
3,637.8
3,440.1
3,494.7
3,499.3
3,733.8
797.8
3,819.8
464.9
803.5
4,270.8
447.9
832.4
4,797.9
435.9
792.3
4,120.9
435.4
722.8
3,852.9
393.7
791.3
4,197.5
431.1
779.4
4,306.7
425.7
768.2
4,027.5
420.5
824.6
4,263.0
443.9
16.5
6.2
16.2
5.3
14.4
4.7
12.5
4.7
11.2
4.5
12.3
4.7
11.4
4.7
11.6
4.5
11.7
4.8
DEPOSIT TURNOVER
Demand deposits3
6 All insured banks
7
Major New York City banks
8
Other banks
9 Other checkable deposits 4
10 Savings deposits (including MMDAs)
DEBITS
Demand deposits3
11 All insured banks
12
Major New York City banks
13
Other banks
14 Other checkable deposits 4
15 Savings deposits (including MMDAs) 5
Not seasonally adjusted
277,290.5
131,784.7
145,505.8
277,715.4
137,307.2
140,408.3
315,808.2
165,595.0
150,213.3
324,530.2
161,923.2
162,607.0
306,746.1
154,606.6
152,139.5
345,368.7
176,874.8
168,493.9
333,304.1
168,018.4
165,285.7
342,912.1
174,674.7
168,237.4
347,887.1
179,869.7
168,017.4
3,346.7
3,483.0
3,645.6
3,267.7
3,788.1
3,329.0
3,741.6
3,741.3
3,201.0
3,445.0
3,645.9
3,758.1
3,301.6
3,648.1
3,379.2
3,532.3
3,502.1
3,539.6
798.2
3,825.9
465.0
803.4
4,274.3
447.9
832.5
4,803.5
436.0
787.0
4,108.4
436.0
738.2
3,948.9
404.2
818.3
4,412.6
441.1
779.0
4,280.6
425.3
803.4
4,307.8
435.5
798.6
4,196.6
427.8
16.4
6.2
16.2
5.3
14.4
4.7
12.8
5.0
11.1
4.5
12.5
4.9
11.3
4.8
11.5
4.6
11.8
4.6
DEPOSIT TURNOVER
Demand deposits3
16 All insured banks
17
Major New York City banks
18
Other banks
19 Other checkable deposits 4
20 Savings deposits (including MMDAs) 5
1. Historical tables containing revised data for earlier periods can be obtained
from the Banking and Money Market Statistics Section, Division of Monetary
Affairs, Board of Governors of the Federal Reserve System, Washington, DC
20551.
Data in this table also appear in the Board's G.6 (406) monthly statistical
release. For ordering address, see inside front cover.
2. Annual averages of monthly figures.
3. Represents accounts of individuals, partnerships, and corporations and of
states and political subdivisions.
4. Accounts authorized for negotiable orders of withdrawal (NOWs) and
accounts authorized for automatic transfer to demand deposits (ATSs).
5. Money market deposit accounts.
A18 Domestic Financial Statistics • February 1994
1.24 LOANS AND SECURITIES
All Commercial Banks 1
Billions of dollars, averages of Wednesday figures
1992
1993
Item
Dec.
Jan.
Feb.
Mar.
Apr.
May
June r
July r
Aug. r
Sept. r
Oct/
Nov.
Seasonally adjusted
2
1 Total loans, leases, and securities .
2,937.6
2,935.3
2,943.9
2,960.2
2,970.9
2,991.2
3,014.3
3,037.7
3,046.2
3,056.9
3,056.3
3,072.3
2 U.S. government securities
3 Other securities
4 Total loans and leases 2
5
Commercial and industrial . . . . .
6
Bankers acceptances h e l d 3 . . .
7
Other commercial and
industrial
8
U.S. addressees 4
9
Non-U.S. addressees 4
10 Real estate
11 Individual
12
Security
13 Nonbank financial
institutions
14 Agricultural
15
State and political
subdivisions
lb
Foreign banks
17
Foreign official institutions
18 Lease-financing receivables
19 All other loans
657.1
176.0
2,104.6
597.6
7.7
656.5
174.5
2,104.4
598.0
7.3
666.2
176.4
2,101.3
596.7
8.4
680.2
179.0
2,101.0
593.1
8.5
691.0
181.0
2,098.9
587.5
8.5
693.5
181.2
2,116.5
589.9
9.0
704.4
179.5
2,130.4
591.0
8.9
708.2
181.3
2,148.2
590.8
9.5
714.4
182.1
2,149.6
590.1
9.9
719.8
182.5
2,154.6
586.8
9.1
717.6
180.5
2,158.2
586.5
9.8
719.2
180.7
2,172.4
586.3
9.2
589.9
580.2
9.7
892.4
355.5
64.8
590.7
581.2
9.6
890.8
358.4
63.5
588.3
578.8
9.5
890.1
361.9
62.8
584.6
574.9
9.7
891.9
362.3
64.2
579.0
569.7
9.3
892.2
364.4
62.3
580.9
571.2
9.7
898.0
367.5
68.6
582.2
572.8
9.4
904.0
368.8
71.4
581.3
571.6
9.8
907.8
372.5
81.5
580.2
570.5
9.7
910.8
374.7
79.6
577.7
567.5
10.1
914.5
375.9
82.5
576.7
566.9
9.8
917.9
380.3
79.5
577.0
566.7
10.3
921.5
383.2
86.9
43.6
35.0
45.1
34.5
44.6
34.3
44.2
34.0
45.0
34.1
45.9
34.3
46.0
34.3
46.4
34.7
46.7
34.8
46.0
34.8
45.0
35.0
44.1
35.5
24.8
7.7
2.8
30.9
49.5
24.2
7.7
2.9
30.4
48.8
23.8
8.8
3.2
30.6
44.5
23.6
8.5
3.2
30.6
45.3
23.1
8.4
3.2
30.7
48.0
23.0
8.4
3.1
30.9
46.8
22.8
8.6
3.2
31.3
49.0
22.8
9.1
3.2
31.6
47.9
22.7
9.5
3.1
31.7
46.0
22.4
8.7
3.4
31.8
47.7
22.3
8.9
3.5
32.2
47.3
21.8
8.2
3.3
32.5
49.0
Not seasonally adjusted
2
20 Total loans, leases, and securities .
2,947.4
2,937.4
2,946.7
2,963.9
2,972.5
2,986.2
3,014.0
3,025.9
3,037.8
3,053.8
3,055.6
3,079.6
21 U.S. government securities
22 Other securities
23 Total loans and leases 2
24
Commercial and i n d u s t r i a l . . . . .
25
Bankers acceptances h e l d 3 . . .
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
Agricultural
33
34
State and political
subdivisions
35
Foreign banks
36
Foreign official institutions
37
Lease-financing receivables . . . .
38
All other loans
655.8
176.2
2,115.4
600.6
8.0
656.9
175.0
2,105.5
596.4
7.4
669.8
176.6
2,100.3
595.9
8.8
685.9
178.7
2,099.3
596.3
8.6
692.8
180.4
2,099.3
590.4
8.3
692.5
180.7
2,113.0
591.6
8.9
702.2
179.0
2,132.9
592.8
8.7
703.5
180.1
2,142.3
589.8
9.2
712.7
182.0
2,143.1
586.4
9.6
717.4
182.1
2,154.2
583.2
8.9
715.3
180.8
2,159.5
584.2
9.5
722.5
181.7
2,175.5
586.6
9.6
592.5
583.0
9.5
893.7
360.0
65.6
589.0
579.5
9.5
890.5
362.5
65.0
587.1
577.5
9.5
888.3
361.9
65.8
587.7
578.2
9.5
889.3
359.8
66.4
582.1
572.7
9.4
891.1
361.7
65.7
582.7
573.0
9.7
898.0
365.7
65.5
584.1
573.9
10.2
904.3
367.0
70.8
580.6
570.5
10.1
908.1
370.2
77.5
576.9
566.9
10.0
911.6
374.1
76.7
574.4
564.3
10.0
915.4
377.6
80.6
574.7
565.1
9.6
918.9
380.7
79.1
577.0
567.3
9.7
923.0
384.1
86.1
45.6
34.8
45.3
33.6
44.5
32.9
43.9
32.7
44.4
33.3
45.3
34.0
46.6
34.8
46.1
35.6
46.5
35.9
45.4
36.2
44.5
36.0
44.5
35.6
24.8
8.2
2.8
30.9
48.6
24.0
7.8
2.9
30.8
46.6
23.7
8.6
3.2
30.8
44.6
23.7
8.2
3.2
30.8
45.0
23.2
8.1
3.2
30.8
47.5
23.0
8.2
3.1
30.9
47.6
22.8
8.4
3.2
31.3
51.0
22.7
9.1
3.2
31.4
48.7
22.7
9.3
3.1
31.5
45.4
22.5
8.9
3.4
31.6
49.5
22.4
9.2
3.5
32.1
48.8
21.8
8.6
3.3
32.4
49.5
1. All commercial banks include domestically chartered insured banks, U.S.
branches and agencies of foreign banks, New York state investment companies
majority owned by foreign banks, and Edge Act and agreement corporations
owned by domestically chartered foreign banks. Data are prorated averages of
Wednesday estimates for domestically chartered and foreign related institutions,
based on weekly reports of a sample of domestically chartered insured banks and
large branches and agencies and quarterly reports of all domestically chartered
insured banks and all agencies, branches, investment companies, and Edge Act
and agreement corporation engaged in banking.
2. Adjusted to exclude loans to commercial banks in the United States.
3. Includes nonfinancial commercial paper held.
4. United States includes the fifty states and the District of Columbia.
Commercial Banking Institutions
A19
1.25 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS 1
Billions of dollars, monthly averages
1992
1993
Source of funds
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Seasonally adjusted
1 Total nondeposit funds 2
2 Net balances owed to related foreign offices 3 ..
3 Borrowings from other than commercial banks
in United States 4
4
Domestically chartered banks
Foreign-related banks
5
311.4
71.1
311.2
73.8
309.6
72.5
319.9
77.8
329.4
87.5
325.1
81.9
335.7
85.0
356. l r
100.0*
366.8*
114.1*
377.9*
118.8*
382.0
123.6
372.4
120.7
240.4
155.9
84.4
237.3
156.6
80.7
237.1
156.9
80.2
242.1
161.5
80.5
241.9
166.9
75.0
243.3
166.2
77.1
250.7
173.7
77.0
256.1
179.7*
76.4
252.7
177.3*
75.4*
259.1
181.7*
77.4
258.4
183.5*
75.0
251.7
178.3
73.4
Not seasonally adjusted
6 Total nondeposit funds 2
7 Net balances owed to related foreign offices 3 ..
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
13
Other 5
14
Foreign-related banks 6
MEMO
Gross large time deposits
15 Seasonally adjusted
16 Not seasonally adjusted
U.S. Treasury demand balances at
commercial banks8
17 Seasonally adjusted
18 Not seasonally adjusted
311.4
75.2
90.2
310.0
76.4
-15.8
92.3
313.9
74.4
-10.6
84.9
324.7
78.5
-7.0
85.5
325.6
84.6
-9.4
94.0
329.8
84.0
-9.7
93.7
334.7
83.1
-15.3
98.4
349.8*
96.7*
-15.2
112.0*
361.7*
110.4*
-13.6
124.0*
372.5*
116.4*
-11.2
127.7*
384.6
124.7
-5.1
129.9
378.6
122.4
-4.9
127.3
236.2
155.0
233.6
153.6
239.6
158.6
246.2
164.4
241.0
164.9
245.8
167.8
251.6
173.5
253.1
176.0
251.3
176.0*
256.1
180.3*
259.9
184.8
256.2
183.4
151.0
4.0
81.2
150.0
3.6
80.0
155.4
3.2
80.9
161.1
3.3
81.8
161.4
3.5
76.2
164.0
3.8
78.0
169.6
3.8
78.2
171.7
4.3
77.1
172.0
4.0
75.3
176.0
4.4
75.7
180.4*
4.5
75.0
178.7
4.7
72.8
366.5
365.5
359.9
358.0
358.4
358.0
355.7
356.5
355.0
354.2
356.3
357.9
352.6
354.1
344.6
344.3
339.7
340.8
335.5
335.8
335.5
334.6
336.4
336.2
20.4
19.5
25.6
33.1
23.6
29.5
18.8
17.4
24.2
20.3
19.1
20.3
26.1
26.5
30.1
25.6
29.4
23.8
24.2
28.6
16.7
17.2
16.0
12.8
1. Commercial banks are nationally and state-chartered banks in the fifty states
and the District of Columbia, agencies and branches of foreign banks, New York
State investment companies majority owned by foreign banks, and Edge Act and
agreement corporations owned by domestically chartered and foreign banks.
Data in this table also appear in the Board's G.10 (411) monthly statistical
release. For ordering address, see inside front cover.
2. Includes federal funds, repurchase agreements (RPs), and other borrowing
from nonbanks and net balances due to related foreign offices.
3. Reflects net positions of U.S. chartered banks, Edge Act corporations, and
U.S. branches and agencies of foreign banks with related foreign offices plus net
positions with own international banking facilities (IBFs).
4. Borrowings through any instrument, such as a promissory note or due bill,
given for the purpose of borrowing money for the banking business. This includes
borrowings from Federal Reserve Banks and from foreign banks, term federal
funds, loan RPs, and sales of participations in pooled loans.
5. Figures are based on averages of daily data reported weekly by approximately 120 large banks and on quarterly or annual data reported by other banks.
6. Figures are partly averages of daily data and partly averages of Wednesday
data.
7. Time deposits in denominations of $100,000 or more. Estimated averages of
daily data.
8. U.S. Treasury demand deposits and Treasury tax and loan notes at commercial banks. Averages of daily data.
A20
DomesticNonfinancialStatistics • February 1994
1.26
ASSETS AND LIABILITIES OF COMMERCIAL BANKS 1
Wednesday figures
Millions of dollars
1993
Account
Sept. 29*
Oct. 6 r
Oct. 13r
Oct. 20r
Oct. 27r
Nov. 3
Nov. 10
Nov. 17
Nov. 24
Assets
1 Loans and securities
2
Investment securities
3
U.S. government securities
4
Other
5
Trading account assets
6
U.S. government securities
7
Other securities
8
Other trading account assets
9
Total loans
10
Interbank loans
Loans excluding interbank
11
12
Commercial and industrial
n
Real estate
14
Revolving home equity
15
Other
16
Individual
17
All other
18 Total cash assets
19
Balances with Federal Reserve Banks
20
Cash in vault
21
Demand balances at U.S. depository institutions..
Cash items
22
Other cash assets
23
24 Other assets
3,205,072
849,498
683,746
165,752
47,421
31,096
2,948
13,378
2,308,153
150,768
2,157,386
584,334
916,874
74,801
842,073
379,889
276,289
220,118
31,652
33,969
31,403
83,898
39,195
273,410
3,203,673
854,827
688,753
166,074
42,653
27,439
2,885
12,328
2,306,194
149,995
2,156,199
583,457
918,278
74,681
843,597
379,061
275,403
209,555
29,304
31,655
29,464
80,257
38,875
282,595
3,214,958
854,479
688,357
166,123
43,659
28,088
2,948
12,622
2,316,820
158,597
2,158,222
582,816
920,4%
74,627
845,869
380,075
274,835
232,214
29,777
34,572
34,435
93,537
39,894
280,239
3,199,579
851,227
685,579
165,648
43,054
28,910
2,995
11,149
2,305,299
148,147
2,157,152
584,024
918,512
74,470
844,042
380,707
273,910
216,538
32,489
33,998
30,608
80,839
38,604
265,107
3,201,741
849,524
683,685
165,838
41,444
26,805
2,730
11,909
2,310,773
151,518
2,159,255
584,531
917,640
74,377
843,263
382,079
275,005
214,845
30,629
34,177
31,511
78,012
40,517
268,745
3,228,137
859,678
693,982
165,696
43,057
27,587
2,818
12,652
2,325,403
154,326
2,171,076
587,808
920,196
74,212
845,984
381,810
281,263
213,805
27,965
31,623
31,684
84,322
38,212
280,816
3,237,770
862,382
695,997
166,385
45,854
30,885
2,724
12,245
2,329,534
157,909
2,171,625
586,734
923,429
74,090
849,339
382,402
279,061
211,349
31,294
33,171
29,735
79,377
37,772
282,411
3,230,883
856,948
690,174
166,774
44,632
29,654
2,308
12,670
2,329,303
158,838
2,170,465
586,422
921,417
73,986
847,431
383,455
279,171
217,155
29,535
34,504
31,080
83,779
38,257
273,463
3,235,245
859,371
692,715
166,657
42,418
26,923
2,204
13,291
2,333,455
155,186
2,178,269
586,270
921,571
73,783
847,788
384,554
285,875
225,242
35,038
32,842
32,750
85,352
39,260
272,456
25 Total assets
3,698,600
3,695,822
3,727,411
3,681,224
3,685,330
3,722,759
3,731,530
3,721,501
3,732,942
2,492,245
792,163
3,290
38,927
749,946
765,288
606,826
327,968
533,538
35,278
498,260
377,311
2,516,545
804,398
2,981
37,859
763,559
777,195
606,434
328,517
510,731
12,636
498,095
371,995
2,533,747
822,074
2,915
44,460
774,700
778,583
605,601
327,489
529,184
11,849
517,335
366,920
2,492,925
793,005
3,218
38,993
750,795
770,516
603,724
325,680
517,562
9,730
507,832
372,816
2,488,091
788,025
3,034
39,637
745,354
771,004
601,919
327,143
510,814
12,942
497,872
388,688
2,535,472
821,467
3,319
40,510
777,638
781,784
602,232
329,989
507,175
6,381
500,794
381,652
2,527,714
813,052
3,173
38,626
771,253
784,719
600,820
329,124
520,280
9,368
510,912
383,246
2,528,280
819,499
2,915
40,652
775,933
780,420
599,335
329,026
506,987
5,871
501,116
386,766
2,528,312
821,125
5,123
41,651
774,352
776,081
599,273
331,833
523,230
7,026
516,204
384,588
3,403,095
3,399,271
3,429,851
3,383,303
3,387,593
3,424,299
3,431,240
3,422,033
3,436,130
295,506
296,552
297,560
297,921
297,738
298,460
300,290
299,468
296,812
ALL COMMERCIAL BANKING INSTITUTIONS2
26
27
28
29
30
31
32
33
34
35
36
37
Liabilities
Total deposits
Transaction accounts
Demand, U.S. government
Demand, depository institutions
Other demand and all checkable deposits
Savings deposits (excluding checkable)
Small time deposits
Time deposits over $100,000
Borrowings
Treasury tax and loan notes
Other
Other liabilities
38 Total liabilities
39 Residual (assets less liabilities) 3
Footnotes appear on following page.
Commercial Banking Institutions
1.26 ASSETS AND LIABILITIES OF COMMERCIAL BANKS 1
A21
Wednesday figures—Continued
Millions of dollars
1993
Account
Sept. 19
Oct. 6 r
Oct. 13r
Oct. 20 r
Oct. 27 r
Nov. 3
Nov. 10
Nov. 17
Nov. 24
Assets
40 Loans and securities
Investment securities
41
42
U.S. government securities
Other
43
44
Trading account assets
U . S . government securities
45
46
Other securities
47
Other trading account assets
Total loans
48
Interbank loans
49
50
Loans excluding interbank
51
Commercial and industrial
5?
Real estate
53
Revolving home equity
54
Other
55
S6
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
6?
63 Other assets
2,844,183
775,607
633,427
142,180
47,421
31,096
2,948
13,378
2,021,154
124,373
1,8%,782
432,024
869,363
74,801
794,562
379,889
215,505
192,534
30,983
33,933
29,892
80,604
17,122
184,074
2,852,289
780,644
638,115
142,529
42,653
27,439
2,885
12,328
2,028,993
129,480
1,899,513
431,531
870,653
74,681
795,972
379,061
218,268
182,918
28,844
31,621
28,018
77,337
17,098
191,476
2,861,000
779,197
636,523
142,674
43,659
28,088
2,948
12,622
2,038,145
134,363
1,903,782
431,367
873,076
74,627
798,449
380,075
219,265
205,317
28,944
34,534
32,836
90,830
18,173
192,609
2,840,835
776,054
633,389
142,665
43,054
28,910
2,995
11,149
2,021,727
122,343
1,899,384
432,406
871,058
74,470
7%,588
380,707
215,214
190,171
32,050
33,%2
29,118
77,826
17,215
180,989
2,839,025
773,285
630,908
142,377
41,444
26,805
2,730
11,909
2,024,2%
125,834
1,898,462
432,308
870,148
74,377
795,770
382,079
213,928
187,093
29,803
34,141
30,027
75,030
18,092
185,722
2,867,919
780,678
638,571
142,107
43,057
27,587
2,818
12,652
2,044,184
132,582
1,911,602
435,415
872,865
74,212
798,653
381,810
221,512
188,137
27,510
31,590
29,883
81,741
17,414
191,386
2,878,186
784,117
641,562
142,555
45,854
30,885
2,724
12,245
2,048,216
135,636
1,912,580
434,315
876,150
74,090
802,060
382,402
219,713
186,486
30,544
33,131
28,400
76,831
17,581
189,716
2,866,958
776,522
633,935
142,587
44,632
29,654
2,308
12,670
2,045,804
134,813
1,910,991
434,177
874,2%
73,986
800,310
383,455
219,063
192,407
29,059
34,468
29,739
81,613
17,529
181,914
2,870,429
781,703
638,072
143,630
42,418
26,923
2,204
13,291
2,046,308
131,846
1,914,462
433,448
874,313
73,783
800,530
384,554
222,147
200,032
34,335
32,805
31,505
82,973
18,415
179,264
64 Total assets
3,220,790
3,226,683
3,258,926
3,211,994
3,211,840
3,247,442
3,254,389
3,241,279
3,249,725
Liabilities
65
66
67
Demand, U.S. government
68
Demand, depository institutions
69
Other demand and all checkable deposits
70
Savings deposits (excluding checkable)
Small time deposits
71
Time deposits over $100,000
77
73 Borrowings
74
Treasury tax and loan notes
75
Other
76 Other liabilities
2,347,804
778,523
3,289
36,257
738,977
761,020
604,562
203,699
433,921
35,278
398,643
146,562
2,376,146
792,1%
2,980
35,234
753,982
772,870
604,177
206,904
408,340
12,636
395,704
148,647
2,394,358
810,278
2,914
41,914
765,450
774,105
603,331
206,645
425,640
11,849
413,791
144,369
2,353,714
780,980
3,218
36,631
741,132
766,131
601,479
205,124
416,959
9,730
407,229
146,401
2,349,106
777,020
3,033
37,210
736,777
766,531
599,636
205,919
414,916
12,942
401,974
153,081
2,392,583
808,785
3,318
37,953
767,514
777,318
599,983
206,497
404,635
6,381
398,254
154,766
2,385,678
801,612
3,173
36,138
762,301
780,263
598,579
205,224
419,135
9,368
409,767
152,288
2,385,621
808,108
2,915
37,997
767,1%
776,064
597,105
204,344
407,010
5,871
401,139
152,181
2,383,425
810,518
5,122
39,142
766,254
771,713
597,037
204,157
423,753
7,026
416,727
148,736
77 Total liabilities
2,928,286
2,933,133
2,964,367
2,917,074
2,917,103
2,951,984
2,957,101
2,944,813
2,955,914
295,459
297,288
2%,466
293,811
DOMESTICALLY CHARTERED COMMERCIAL BANKS4
78
Residual (assets less liabilities)
3
292,504
293,551
1. Excludes assets and liabilities of international banking facilities.
2. Includes insured domestically chartered commercial banks, agencies and
branches of foreign banks, Edge Act and agreement corporations, and New York
State investment corporations majority owned by foreign banks. Data are estimates
for the last Wednesday of the month based on a sample of weekly reporting
foreign-related and domestic institutions and quarter-end condition reports.
294,559
294,920
294,736
3. This balancing item is not intended as a measure of equity capital for use in
capital-adequacy analysis.
4. Includes all member banks and insured nonmember banks. Loans and
securities data are estimates for the last Wednesday of the month based on a
sample of weekly reporting banks and quarter-end condition reports.
A22
1.27
DomesticNonfinancialStatistics • February 1994
ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS
Millions of dollars, Wednesday figures
1993
Account
Sept. I f
Oct. 6 r
Oct. 13r
Oct. 201
Oct. 27 r
Nov. 3
Nov. 10
Nov. 17
Nov. 24
ASSETS
1 Cash and balances due from depository institutions
2 U.S. Treasury and government securities
Trading account
3
Investment account
4
Mortgage-backed securities 1
5
All others, by maturity
One year or less
6
One year through five years
7
More than five years
8
9 Other securities
10 Trading account
Investment account
11
State and political subdivisions, by maturity
12
One year or less
13
14
More than one year
Other bonds, corporate stocks, and securities
15
16 Other trading account assets
115,803
301,832
26,905
274,926
87,215
107,174
302,842
24,545
278,2%
87,234
119,498
302,852
25,236
277,617
86,762
113,622
301,583
26,114
275,469
85,774
109,344
297,684
24,095
273,589
85,422
107,851
301,586
24,577
277,009
86,336
107,550
305,802
27,724
278,079
86,070
112,738
299,371
26,038
273,332
84,588
118,322
298,788
24,175
274,612
87,603
48,300
71,234
68,177
56,276
2,629
53,647
19,997
3,761
16,235
33,650
13,265
48,389
71,522
71,152
56,982
2,621
54,361
19,916
3,818
16,097
34,445
12,216
48,721
71,552
70,583
57,083
2,684
54,399
19,945
3,794
16,151
34,454
12,509
49,126
71,780
68,790
57,350
2,731
54,619
20,065
3,825
16,240
34,553
11,038
48,330
72,639
67,198
56,595
2,467
54,129
20,123
3,845
16,279
34,005
11,798
48,567
72,986
69,121
56,520
2,558
53,962
20,038
3,842
16,196
33,924
12,541
50,294
72,970
68,745
56,506
2,463
54,042
20,122
3,885
16,236
33,921
12,134
50,175
71,273
67,296
56,141
2,098
54,043
20,151
3,808
16,343
33,892
12,560
48,310
71,725
66,975
56,599
1,994
54,604
20,222
3,857
16,366
34,382
13,179
Federal funds sold 2
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
Mother
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
87,630
52,340
29,664
5,626
995,485
272,386
2,826
269,560
268,000
1,560
403,3(5
43,653
359,662
193,187
36,826
13,413
2,416
20,997
19,251
5,791
13,457
1,481
24,621
25,169
2,032
35,619
957,833
169,453
85,571
49,047
30,738
5,786
996,022
271,700
2,913
268,787
267,360
1,426
405,090
43,633
361,457
192,885
38,568
13,459
2,878
22,232
17,863
5,836
13,270
1,452
24,063
25,294
2,000
35,200
958,822
175,111
92,519
54,425
32,962
5,132
999,886
271,482
3,378
268,103
266,678
1,425
407,176
43,602
363,575
193,523
40,802
14,731
4,159
21,912
17,644
5,843
13,380
1,436
23,304
25,296
1,999
35,208
962,679
175,240
78,896
42,952
30,365
5,579
998,241
271,962
3,388
268,574
267,061
1,513
404,639
43,476
361,163
194,856
39,449
15,108
2,827
21,514
17,882
5,657
13,319
1,553
23,476
25,450
1,980
35,175
961,086
167,797
82,894
48,218
29,723
4,953
9%,460
271,904
3,422
268,482
267,015
1,466
402,896
43,405
359,491
195,537
38,519
14,417
2,312
21,790
18,665
5,670
13,009
1,374
23,365
25,521
1,996
35,142
959,322
172,765
89,954
50,596
34,748
4,609
1,002,306
274,566
3,411
271,154
269,731
1,423
405,344
43,359
361,985
195,242
38,959
13,533
2,253
23,173
18,847
5,709
12,910
1,112
24,043
25,575
1,962
35,482
964,862
175,117
92,479
53,317
34,962
4,200
1,002,349
273,264
3,459
269,804
268,391
1,413
407,772
43,275
364,497
195,482
38,659
13,621
2,255
22,782
18,136
5,702
12,775
1,254
23,743
25,563
1,961
35,517
964,872
175,678
89,316
51,766
33,094
4,456
1,003,389
273,204
3,395
269,809
268,361
1,448
406,123
43,211
362,912
196,316
39,147
14,563
2,588
21,996
17,692
5,683
12,685
1,114
25,771
25,653
1,962
35,487
965,939
169,110
93,384
52,419
37,038
3,927
1,003,906
272,408
3,387
269,021
267,576
1,445
405,772
43,039
362,733
197,203
38,946
14,683
2,679
21,584
19,951
5,728
12,629
1,118
24,457
25,693
1,965
35,415
966,527
165,942
1,702,091
1,698,718
1,722,381
1,691,372
1,690,401
1,708,431
1,715,021
1,705,174
1,712,740
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45 Total assets
Footnotes appear on the following page.
Weekly Reporting Commercial Banks
1.27
A23
ASSETS A N D LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued
Millions of dollars, Wednesday figures
1993
Account
Oct. 6 r
Oct. 13r
Oct. 20*
1,103,316
290,238
236,870
53,368
8,664
2,163
22,333
5,567
556
14,085
117,086
695,992
673,937
22,055
18,184
1,991
1,547
333
....
1,116,852
288,451
240,318
48,134
8,136
1,691
21,757
4,860
566
11,124
121,929
706,472
684,663
21,809
17,840
2,212
1,444
312
1,128,746
302,515
250,511
52,004
8,432
1,663
26,721
5,312
661
9,215
120,211
706,019
684,140
21,879
17,831
2,235
1,482
331
1,101,981
285,469
233,961
51,508
9,063
1,957
22,454
5,292
618
12,124
119,0%
697,416
675,711
21,705
17,648
2,230
1,511
316
329,608
0
30,308
299,300
309,601
0
10,946
298,656
325,820
0
10,018
315,801
317,277
75
8,792
308,410
Sept. 29*
Nov. 3
Nov. 10
N o v . 17
Nov. 24
1,098,232
283,529
232,408
51,121
8,840
1,904
22,770
5,328
669
11,610
117,947
6%,756
675,038
21,718
17,611
2,245
1,544
317
1,122,826
293,765
243,289
50,476
9,442
1,944
23,152
5,130
637
10,171
123,845
705,216
683,876
21,340
17,319
2,224
1,491
306
1,119,609
292,648
242,2%
50,352
8,915
1,932
21,922
5,379
1,088
11,116
122,161
704,800
683,275
21,525
17,476
2,267
1,482
300
1,122,005
300,315
248,019
52,295
8,863
1,664
23,244
4,974
648
12,903
121,625
700,066
678,561
21,505
17,386
2,321
1,498
300
1,117,039
300,090
247,566
52,524
9,714
3,284
23,602
5,264
713
9,947
121,064
695,885
674,314
21,571
17,434
2,334
1,506
298
314,527
0
11,161
303,365
305,940
0
5,929
300,011
318,334
0
8,384
309,950
306,721
0
5,059
301,662
323,032
0
6,339
316,694
Oct.
ir
LIABILITIES
46 Deposits
47
Demand deposits
48
Individuals, partnerships, and corporations
49
Other holders
50
States and political subdivisions
51
U.S. government
52
Depository institutions in the United States
53
Banks in foreign countries
54
Foreign governments and official institutions
55
Certified and officers' checks
56
Transaction balances other than demand deposits
57
Nontransaction balances
58
Individuals, partnerships, and corporations
59
Other holders
60
States and political subdivisions
61
U.S. government
62
Depository institutions in the United States
Foreign governments, official institutions, and banks
63
64 Liabilities for borrowed money 5
65
Borrowings from Federal Reserve Banks
66
Treasury tax and loan notes
,
67
Other liabilities for borrowed money 6
68 Other liabilities (including subordinated notes and
debentures)
115,611
117,807
113,296
115,586
122,191
123,686
120,731
120,657
117,677
1,548,535
1,544,260
1,567,861
1,534,844
1,534,950
1,552,452
1,558,674
1,549,384
1,557,748
153,556
154,458
154,519
156,529
155,451
155,979
156,348
155,790
154,992
MEMO
Total loans and leases, gross, adjusted, plus securities 8 . . 1,388,734
96,651
Time deposits in amounts of $100,000 or more
828
Loans sold outright to affiliates 9
401
Commercial and industrial
427
Other
20,692
Foreign branch credit extended to U.S. residents 1 0
-9,645
Net owed to related institutions abroad
1,391,128
99,409
822
401
422
21,167
-11,121
1,395,694
99,096
821
401
420
21,600
-9,307
1,389,049
97,659
823
401
422
21,252
-5,158
1,382,795
98,358
812
393
418
21,908
-4,422
1,398,777
99,002
812
394
418
21,851
-10,835
1,402,332
97,882
805
388
417
21,981
-12,507
1,394,446
97,164
804
387
417
21,892
-7,521
1,398,754
97,006
849
3%
453
21,941
-5,263
69 Total liabilities
70 Residual (total assets less total liabilities) 7
71
72
73
74
75
76
77
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 N e w York City, can be obtained from the
Board's H.4.2 (504) weekly statistical release. For ordering address, see inside
front cover.
A24
1.28
DomesticNonfinancialStatistics • February 1994
LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS
Liabilities1
Assets and
Millions of dollars, Wednesday figures
1993
Account
Sept. 29
Oct. 6
Oct. 13
Oct. 20
Oct. 27
Nov. 3
Nov. 10
Nov. 17
N o v . 24
ASSETS
1 Cash and balances due from depository
institutions
2 U.S. Treasury and government agency
securities
3 Other securities
4 Federal funds sold 1
5
To commercial banks in the United States . . .
To others 2
6
7 Other loans and leases, gross
8
Commercial and industrial
Bankers acceptances and commercial
9
paper
All other
10
11
U . S . addressees
12
Non-U.S. addressees
Loans secured by real estate
13
14
T o financial institutions
15
Commercial banks in the United States..
Banks in foreign countries
16
Nonbank financial institutions
17
For purchasing and carrying securities . . . .
18
19
T o foreign governments and official
institutions
All other
20
21 Other assets (claims on nonrelated parties) . .
18,797
18,117
18,363
17,946
18,876
17,415
16,879
16,811
17,065
32,542
8,497
26,975
7,791
19,184
159,255
95,335
32,760
8,488
23,013
4,965
18,048
157,252
95,171
33,598
8,470
24,297
6,811
17,486
156,4%
95,135
33,780"^
8,284 r
26,878
7,439
19,439
157,138
95,114
34,081 r
8,444 r
29,237
7,550
21,687
156,706
95,229
35,776
8,494
24,640
5,728
18,913
158,164
95,363
35,175
8,591
25,281
5,%1
19,321
157,667
95,355
36,427
8,738
25,523
6,808
18,715
158,820
95,407
35,339
8,266
27,847
6,389
21,459
158,959
95,393
2,466
92,869
89,553
3,316
31,226
23,545
5,628
1,946
15,971
5,233
2,695
92,476
89,229
3,246
31,300
23,443
5,522
2,023
15,898
3,923
2,951
92,184
88,973
3,210
31,240
23,368
5,548
2,078
15,741
3,395
2,952
92,162
88,992
3,170
31,223
23,345
5,710
2,119
15,517
3,716
2,771
92,458
89,251
3,206
31,176
23,228
5,473
2,176
15,579
3,323
2,761
92,602
89,3%
3,206
31,083
22,571
5,383
2,025
15,163
5,154
2,618
92,737
89,413
3,325
31,065
22,660
5,493
1,958
15,208
4,711
2,528
92,879
89,5%
3,283
31,013
22,722
5,415
1,955
15,353
5,709
2,826
92,567
89,317
3,250
30,%2
22,499
5,450
2,021
15,028
6,132
497
3,419
32,466
476
2,940
30,942
464
2,895
31,089
454
3,285
30,322
423
3,327
31,416
471
3,521
32,187
469
3,407
32,612
495
3,474
31,647
474
3,499
32,334
302,511
296,875
296,322
296,755
299,419
300,675
301,910
303,905
305,879
93,056
5,706
90,006
4,947
89,691
4,776
89,748
4,929
90,607
4,406
92,187
5,163
92,173
4,611
92,749
4,546
94,370
4,207
4,260
1,445
87,350
3,809
1,138
85,059
3,758
1,018
84,915
3,875
1,055
84,819
3,497
909
86,201
3,745
1,418
87,025
3,564
1,047
87,562
3,437
1,110
88,203
3,352
855
90,163
60,570
26,780
58,581
26,478
58,053
26,862
57,943
26,876
57,939
28,262
58,633
28,391
58,858
28,703
59,755
28,448
62,383
27,780
76,345
38,009
78,929
43,348
79,180
41,478
77,095
42,936
72,845
37,863
78,087
40,031
76,509
37,427
75,561
39,571
75,276
37,579
12,027
25,982
38,336
11,931
31,416
35,581
12,427
29,051
37,701
9,033
33,903
34,159
9,993
27,870
34,983
11,776
28,255
38,056
9,739
27,688
39,082
14,427
25,144
35,990
8,946
28,633
37,6%
4,519
33,817
30,258
3,914
31,668
28,888
4,516
33,185
27,860
4,942
29,216
27,844
5,5%
29,386
28,039
5,022
33,035
28,464
5,804
33,278
29,039
5,517
30,473
29,305
6,052
31,645
28,769
38 Total liabilities 6
302,511
296,875
296,322
296,755
299,419
300,675
301,910
303,905
305,879
MEMO
39 Total loans (gross) and securities, adjusted . .
40 Net owed to related institutions abroad
213,850
78,872
211,025
72,749
210,502
75,582
212,931
79,661
215,445
87,269
215,%3
77,937
215,261
78,485
217,285
80,353
218,573
81,395
22 Total assets 3
LIABILITIES
23 Deposits or credit balances owed to other
than directly-related institutions
24 Demand deposits
25
Individuals, partnerships, and
corporations
Other
26
27 Nontransaction accounts
28
Individuals, partnerships, and
corporations
Other
29
30 Borrowings from other than directlyrelated institutions
31 Federal funds purchased
32
From commercial banks in the
United States
33
From others
34 Other liabilities for borrowed money
35
To commercial banks in the
United States
36
To others
37 Other liabilities to nonrelated parties
1. Includes securities purchased under agreements to resell.
2. Includes transactions with nonbank brokers and dealers in securities.
3. Includes net due from related institutions abroad for U.S. branches and
agencies of foreign banks having a net " d u e f r o m " position.
4. Includes other transaction deposits.
5. Includes securities sold under agreements to repurchase.
6. Includes net owed to related institutions abroad for U.S. branches and
agencies of foreign banks having a net " d u e t o " position.
7. Excludes loans to and federal funds transactions with commercial banks in
the United States.
Financial Markets
A25
1.32 COMMERCIAL PAPER A N D BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
Year ending December
1993
Item
1988
1989
1990
1991
1992
May
June
July
Aug.
Sept.
Oct.
Commercial paper (seasonally adjusted unless noted otherwise)
1 AO issuers.
Financial companies'
Dealer-placed paper2
Total
Bank-related (not seasonally
adjusted) 3
Directly placed paper4
Total
Bank-related (not seasonally
adjusted) 3
458,464
525,831
562,656
531,724
549,433
541,761
544,107
539,149
545,527
541,285
550,463
159,777
183,622
214,706
213,823
228,260
214,558
221,834
210,224
216,245
215,077
222,981
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
210,930
200,036
183,379
172,813
174,558
171,479
170,192
172,093
169,431
170,965
1,248
194,931
6 Nonfinancial companies 3
43,155
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
103,756
131,279
147,914
134,522
148,360
152,645
150,794
158,733
157,189
156,777
156,517
Bankers dollar acceptances (not seasonally adjusted) 6
7 Total
8
9
10
11
12
By holder
Accepting banks
Own bills
Bills bought from other banks
Federal Reserve Banks
Foreign correspondents
Others
By basis
13 Imports into United States
14 Exports from United States
15 All other
66,631
62,972
54,771
43,770
38,200
34,927
34,149
33,120
32,572
33,041
33,069
9,086
8,022
1,064
9,433
8,510
924
9,017
7,930
1,087
11,017
9,347
1,670
10,561
9,103
1,458
11,0%
9,786
1,310
11,568
10,236
1,333
11,422
10,140
1,282
12,416
10,709
1,707
12,522
10,679
1,843
12,332
10,886
1,446
1,493
56,052
1,066
52,473
918
44,836
1,739
31,014
1,276
26,364
690
23,141
613
21,%7
582
21,116
635
19,521
637
19,882
582
20,155
14,984
14,410
37,237
15,651
13,683
33,638
13,095
12,703
28,973
12,843
10,351
20,577
12,212
8,0%
17,893
10,274
7,809
16,844
10,066
7,650
16,433
10,149
7,673
15,299
10,422
7,534
14,616
10,773
7,460
14,808
10,810
7,101
15,158
1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales, personal, and mortgage financing; factoring, finance leasing, and other
business lending; insurance underwriting; and other investment activities.
2. Includes all financial-company paper sold by dealers in the open market.
3. Series were discontinued in January 1989.
4. As reported by financial companies that place their paper directly with
investors.
1.33 PRIME RATE CHARGED BY BANKS
5. Includes public utilities and firms engaged primarily in such activities as
communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.
6. Data on bankers dollar acceptances are gathered from approximately 100
institutions. The reporting group is revised every January.
7. In 1977 the Federal Reserve discontinued operations in bankers dollar
acceptances for its own account.
Short-Term Business Loans 1
Percent per year
Period
Rate
10.00
9.50
9.00
8.50
8.00
7.50
6.50
6.00
1991
1992
1993
Average
rate
8.46
6.25
6.00
1991Feb.
Mar.
Apr.
May .
June
July .
Aug.
Sept.
Oct. .
Nov.
Dec.
9.52
9.05
9.00
9.00
8.50
8.50
8.50
8.50
8.20
8.00
7.58
7.21
1. The prime rate is one of several base rates that banks use to price short-term
business loans. The table shows the date on which a new rate came to be the
predominant one quoted by a majority of the twenty-five largest banks by asset
Period
1992—Jan. ...
Feb. ..
Mar. ..
Apr. ..
May ...
June ..
July ...
Aug. ..
Sept. ..
Oct. ...
Nov. ..
Dec. ..
Average
rate
6.50
6.50
6.50
6.50
6.50
6.50
6.02
6.00
6.00
6.00
6.00
6.00
Period
1993—Jan.
Feb.
Mar.
Apr.
..
.
..
..
June ..
July ...
Aug. ..
Sept. ..
Oct. ...
Nov. ..
Dec.
size, based on the most recent Call Report. Data in this table also appear in the
Board's H.15 (519) weekly and G.13 (415) monthly statistical releases. For
ordering address, see inside front cover.
A26
1.35
DomesticNonfinancialStatistics • February 1994
INTEREST RATES
Money and Capital Markets
Averages, percent per year; figures are averages of business day data unless otherwise noted
1993
Item
1990
1991
1993, week ending
1992
Aug.
Sept.
Oct.
Nov.
Oct. 29
Nov. 5
Nov. 12
Nov. 19
Nov. 26
MONEY MARKET INSTRUMENTS
1 Federal funds 1,2,3
2 Discount window borrowing 2 ' 4
8.10
6.98
5.69
5.45
3.52
3.25
3.03
3.00
3.09
3.00
2.99
3.00
3.02
3.00
2.97
3.00
3.04
3.00
2.96
3.00
3.03
3.00
2.98
3.00
8.15
8.06
7.95
5.89
5.87
5.85
3.71
3.75
3.80
3.14
3.18
3.33
3.14
3.16
3.25
3.14
3.26
3.27
3.15
3.40
3.43
3.14
3.28
3.30
3.15
3.38
3.40
3.15
3.40
3.42
3.14
3.40
3.43
3.15
3.42
3.45
8.00
7.87
7.53
5.73
5.71
5.60
3.62
3.65
3.63
3.08
3.13
3.16
3.07
3.09
3.11
3.08
3.16
3.13
3.08
3.25
3.19
3.07
3.18
3.14
3.09
3.23
3.19
3.09
3.26
3.19
3.08
3.26
3.19
3.06
3.27
3.20
paper3,5,6
4
5
Commercial
1-month
3-month
6-month
6
7
8
Finance paper, directly
1-month
3-month
6-month
placed3,5,7
9
10
Bankers
acceptances3,5,8
3-month
6-month
7.93
7.80
5.70
5.67
3.62
3.67
3.10
3.23
3.07
3.17
3.19
3.19
3.29
3.32
3.24
3.24
3.31
3.32
3.30
3.33
3.28
3.31
3.29
3.31
11
12
13
Certificates qf deposit,
market3,9
1-month
3-month
6-month
8.15
8.15
8.17
5.82
5.83
5.91
3.64
3.68
3.76
3.09
3.14
3.32
3.09
3.12
3.24
3.09
3.24
3.25
3.11
3.35
3.39
3.10
3.29
3.30
3.11
3.36
3.39
3.10
3.36
3.39
3.09
3.33
3.36
3.09
3.36
3.40
8.16
5.86
3.70
3.14
3.08
3.26
3.36
3.29
3.35
3.38
3.34
3.38
7.50
7.46
7.35
5.38
5.44
5.52
3.43
3.54
3.71
3.02
3.14
3.30
2.95
3.06
3.22
3.02
3.12
3.25
3.10
3.26
3.42
3.06
3.18
3.32
3.08
3.25
3.40
3.10
3.25
3.39
3.11
3.25
3.42
3.12
3.27
3.46
7.51
7.47
7.36
5.42
5.49
5.54
3.45
3.57
3.75
3.05
3.17
3.30
2.96
3.06
3.27
3.04
3.13
3.25
3.12
3.27
3.43
3.08
3.19
n.a.
3.11
3.25
n.a.
3.11
3.28
n.a.
3.11
3.26
3.43
3.14
3.30
n.a.
7.89
8.16
8.26
8.37
8.52
8.55
n.a.
8.61
5.86
6.49
6.82
7.37
7.68
7.86
n.a.
8.14
3.89
4.77
5.30
6.19
6.63
7.01
n.a.
7.67
3.44
4.00
4.36
5.03
5.35
5.68
n.a.
6.32
3.36
3.85
4.17
4.73
5.08
5.36
n.a.
6.00
3.39
3.87
4.18
4.71
5.05
5.33
6.07
5.94
3.58
4.16
4.50
5.06
5.45
5.72
6.38
6.21
3.46
3.97
4.28
4.82
5.19
5.44
6.14
5.99
3.56
4.15
4.47
5.03
5.41
5.66
6.31
6.12
3.55
4.13
4.48
5.04
5.42
5.68
6.35
6.19
3.58
4.13
4.49
5.04
5.41
5.71
6.39
6.22
3.61
4.20
4.56
5.13
5.54
5.83
6.47
6.31
8.74
8.16
7.52
6.18
5.94
5.90
6.25
5.99
6.17
6.21
6.25
6.34
6.96
7.29
7.27
6.56
6.99
6.92
6.09
6.48
6.44
5.37
5.84
5.45
5.25
5.76
5.29
5.13
5.63
5.25
5.10
5.61
5.47
5.05
5.55
5.31
5.08
5.58
5.45
5.10
5.60
5.46
5.12
5.02
5.46
5.12
5.62
5.49
9.77
9.23
8.55
7.19
6.98
6.97
7.25
7.03
7.18
7.24
7.26
7.32
9.32
9.56
9.82
10.36
10.01
8.77
9.05
9.30
9.80
9.32
8.14
8.46
8.62
8.98
8.52
6.85
7.06
7.25
7.60
7.16
6.66
6.85
7.05
7.34
6.94
6.67
6.87
7.04
7.31
6.91
6.93
7.12
7.29
7.66
7.25
6.73
6.93
7.08
7.38
6.97
6.87
7.07
7.22
7.57
7.25
6.92
7.11
7.28
7.65
7.23
6.94
7.13
7.30
7.69
7.37
6.99
7.18
7.36
7.74
7.27
8.96
3.61
8.17
3.24
7.46
2.99
6.83
2.76
6.70
2.73
6.71
2.72
6.87
2.72
6.81
2.71
6.81
2.72
6.82
2.72
6.85
2.71
6.99
2.73
secondary
14 Eurodollar deposits, 3-month 3,10
18
19
20
U.S. Treasury bills
Secondary market ,5
3-month
6-month
1-year
Auction average ' '
3-month
6-month
1-year
21
22
23
24
25
26
27
28
Constant maturities12
1-year
2-year
3-year
5-year
7-year
10-year
20-year
30-year
15
16
17
U.S. TREASURY NOTES AND BONDS
Composite
29 More than 10 years (long-term)
STATE AND LOCAL NOTES AND BONDS
Moody's series13
30
31 Baa
32 Bond Buyer series 14
CORPORATE BONDS
33 Seasoned issues, all industries 15
Rating group
34
35 Aa
36 A
37
38 A-rated, recently offered utility bonds 16
MEMO
Dividend-price
ratio17
39 Preferred stocks
40 Common stocks
1. The daily effective federal funds rate is a weighted average of rates on
trades through New York brokers.
2. Weekly figures are averages of seven calendar days ending on Wednesday
of the current week; monthly figures include each calendar day in the month.
3. Annualized using a 360-day year or bank interest.
4. Rate for the Federal Reserve Bank of New York.
5. Quoted on a discount basis.
6. An average of offering rates on commercial paper placed by several leading
dealers for firms whose bond rating is AA or the equivalent.
7. An average of offering rates on paper directly placed by finance companies.
8. Representative closing yields for acceptances of the highest-rated money
center banks.
9. An average of dealer offering rates on nationally traded certificates of
deposit.
10. Bid rates for Eurodollar deposits at 11:00 a.m. London time. Data are for
indication purposes only.
11. Auction date for daily data; weekly and monthly averages computed on an
issue-date basis.
12. Yields on actively traded issues adjusted to constant maturities. Source:
U.S. Treasury.
13. General obligations based on Thursday figures; Moody's Investors Service.
14. General obligations only, with twenty years to maturity, issued by twenty
state and local governmental units of mixed quality. Based on figures for
Thursday.
15. Daily figures from Moody's Investors Service. Based on yields to maturity
on selected long-term bonds.
16. Compilation of the Federal Reserve. This series is an estimate of the yield
on recently offered, A-rated utility bonds with a thirty-year maturity and five
years of call protection. Weekly data are based on Friday quotations.
17. Standard & Poor's corporate series. Preferred stock ratio is based on a
sample of ten issues: four public utilities, four industrials, one financial, and one
transportation. Common stock ratio is based on the 500 stocks in the price index.
NOTE. Some of the data in this table also appear in the Board's H.15 (519)
weekly and G.13 (415) monthly statistical releases. For ordering address, see
inside front cover.
Financial Markets
1.36 STOCK MARKET
ATI
Selected Statistics
1993
Indicator
1990
1991
1992
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)
2 Industrial
3 Transportation
4
Utility
5 Finance
183.66
226.06
158.80
90.72
133.21
206.35
258.16
173.97
92.64
150.84
229.00
284.26
201.02
99.48
179.29
248.12
298.75
229.42
112.53
217.01
244.72
292.19
237.97
113.78
216.02
246.02
297.83
237.80
111.21
209.40
247.16
298.78
234.30
113.27
209.75
247.85
295.34
238.30
116.27
218.89
251.93
298.83
250.82
118.72
224.%
254.86
300.92
247.74
122.32
229.35
257.53
306.61
254.04
120.49
228.18
255.93
310.84
262.%
115.08
214.08
6 Standard & Poor's Corporation
(1941-43 = 10)
335.01
376.20
415.75
450.15
443.08
445.25
448.06
447.29
454.13
459.24
463.90
462.89
7 American Stock Exchange
(Aug. 31, 1973 = 50?
338.32
360.32
391.28
418.56
418.54
429.72
436.13
434.99
444.75
454.91
472.73
472.41
156,359
13,155
179,411
12,486
202,558
14,171
251,170
16,150
279,778
15,521
255,843
20,433
250,230
17,753
247,574
17,744
247,324
19,352
261,770
18,889
280,503
21,279
277,886
18,436
Volume of trading (thousands of shares)
8 New York Stock Exchange
9 American Stock Exchange
Customer financing (millions of dollars, end-of-period balances)
10 Margin credit at broker—dealers3
28,210
36,660
43,990
45,160
47,420
48,630
49,550
49,080
52,760
53,700
56,690
59,760
8,050
19,285
8,290
19,255
8,970
22,510
9,650
21,395
9,805
21,450
9,560
21,610
9,820
22,625
9,585
21,475
9,480
21,915
10,030
23,170
10,270
22,450
10,940
23,560
4
Free credit balances at brokers
11 Margin accounts 5
12 Cash accounts
Margin requirements (percent of market value and effective date) 5
13 Margin stocks
14 Convertible bonds
15 Short sales
Mar. 11, 1968
June 8, 1968
May 6, 1970
Dec. 6, 1971
Nov. 24, 1972
70
50
70
80
60
80
65
50
65
55
50
55
65
50
65
1. Effective July 1976, includes a new financial group, banks and insurance
companies. With this change the index includes 400 industrial stocks (formerly
425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40
financial.
2. On July 5,1983, the American Stock Exchange rebased its index, effectively
cutting previous readings in half.
3. Since July 1983, under the revised Regulation T, margin credit at brokerdealers has included credit extended against stocks, convertible bonds, stocks
acquired through the exercise of subscription rights, corporate bonds, and
government securities. Separate reporting of data for margin stocks, convertible
bonds, and subscription issues was discontinued in April 1984.
4. Free credit balances are amounts in accounts with no unfulfilled commitments to brokers and are subject to withdrawal by customers on demand.
5. New series since June 1984.
6. These requirements, stated in regulations adopted by the Board of Governors pursuant to the Securities Exchange Act of 1934, limit the amount of credit
that can be used to purchase and carry "margin securities" (as defined in the
regulations) when such credit is collateralized by securities. Margin requirements
Jan. 3, 1974
50
50
50
on securities other than options are the difference between the market value (100
percent) and the maximum loan value of collateral as prescribed by the Board.
Regulation T was adopted effective Oct. 15, 1934; Regulation U, effective May 1,
1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective Nov. 1,
1971.
On Jan. 1, 1977, the Board of Governors for the first time established in
Regulation T the initial margin required for writing options on securities, setting
it at 30 percent of the current market value of the stock underlying the option. On
Sept. 30, 1985, the Board changed the required initial margin, allowing it to be the
same as the option maintenance margin required by the appropriate exchange or
self-regulatory organization; such maintenance margin rules must be approved by
the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC
approved new maintenance margin rules, permitting margins to be the price of the
option plus 15 percent of the market value of the stock underlying the option.
Effective June 8, 1988, margins were set to be the price of the option plus 20
percent of the market value of the stock underlying the option (or 15 percent in the
case of stock-index options).
A28 Domestic Financial Statistics • February 1994
1.38
FEDERAL FISCAL A N D FINANCING OPERATIONS
Millions of dollars
Fiscal year
Calendar year
Type of account or operation
1993
1991
U.S. budget1
1 Receipts, total
2
On-budget
Off-budget
3
4 Outlays, total
5
On-budget
6
Off-budget
7 Surplus or deficit ( - ) , total
On-budget
8
9
Off-budget
Source of financing (total)
10 Borrowing from the public
11 Operating cash (decrease, or increase ( - ) ) . . .
12 Other
MEMO
13 Treasury operating balance (level, end of
period)
14
Federal Reserve Banks
15
Tax and loan accounts
1992
1993
July
Aug.
Sept.
Oct.
Nov.
1,054,264
760,380
293,885
1,323,785
1,082,098
241,687
-269,521
-321,719
52,198
1,090,453
788,027
302,426
1,380,794
1,128,455
252,339
-290,340
-340,428
50,087
l,153,147 r
841,213r
311,934
l,407,831 r
1,141,819*
266,012
-254,684 r
-300,605 1
45,922
128,566r
98,660r
29,906
117,467r
103,473r
13,994
11,099
-4,813
15,912
80,626r
57,139r
23,487
120,204r
96,238r
23,965
-39,577
-39,099
-478
86,734 r
62,053 r
24,681
109,812r
84,946 r
24,867
-23,078
-22,893
-186
127,469
98,609
28,860
118,904r
90,774 r
28,130
8,565 r
7,835 r
730
78,668 r
55,864 r
22,804
124,0901
100,568r
23,523
—45,422r
-44,704 r
-719
83,107
58,700
24,407
121,488
96,724
24,764
-38,381
-38,024
-357
276,802
-1,329
-5,952
310,918
-17,305
-3,273
248,619
6,283
-218r
24,757
-40,288
4,432
1,055
32,447
6,075
54,301
-12,652
-18,571
-9,346
-11,713
12,494r
4,255
33,646
7,521 r
71,028
-13,450
-19,197
41,484
7,928
33,556
58,789
24,586
34,203
52,506
17,289
35,217
60,588
28,386
32,202
28,141
5,818
22,324
40,793
7,975
32,818
52,506
17,289
35,217
18,860
6,032
12,828
32,310
6,334
25,977
1. In accordance with the Balanced Budget and Emergency Deficit Control Act
of 1985, all former off-budget entries are now presented on-budget. Federal
Financing Bank (FFB) activities are now shown as separate accounts under the
agencies that use the FFB to finance their programs. The act has also moved two
social security trust funds, (federal old-age survivors insurance and federal
disability insurance) off-budget. The Postal Service is included as an off-budget
item in the Monthly Treasury Statement beginning in 1990.
2. Includes special drawing rights (SDRs); reserve position on the U.S. quota
in the International Monetary Fund (IMF); loans to the IMF; other cash and
June
monetary assets; accrued interest payable to the public; allocations of SDRs;
deposit funds; miscellaneous liability (including checks outstanding) and asset
accounts; seigniorage; increment on gold; net gain or loss for U.S. currency
valuation adjustment; net gain or loss for IMF loan-valuation adjustment; and
profit on sale of gold.
SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of
Receipts and Outlays of the U.S. Government and Office of Management and
Budget, Budget of the U.S. Government.
Federal Finance
A29
1.39 U.S. BUDGET RECEIPTS A N D OUTLAYS 1
Millions of dollars
Calendar year
Fiscal year
1991
Source or type
1992
1993
1993
1992
1993
H2
HI
H2
HI
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
1
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
IS
16
17
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts 5
1,090,453
l,153,147 r
519,165
560,318
540,472
593,187 r
127,469
78,668 r
83,107
475,964
408,352
30
149,342
81,760
509,680
430,427
28
154,772
75,546
234,939
210,552
1
33,296
8,910
236,576
198,868
20
110,995
73,308
246,938
215,586r
10
39,288r
7,942 r
255,556
210,066
25
113,482
67,468
55,653
31,991
0
25,579
1,918
37,680
34,284
27
4,053
684
37,634
37,823
-27
1,945
2,107
117,951
17,680
131,548
14,027
54,016
8,649
61,682
9,403
58,022
7,219
69,044
7,198
25,909
1,398
4,269
2,111
2,855
647
413,689
428,300
186,839
224,569
192,599
227,177
37,768
30,828
34,683
385,491
396,939
175,802
208,110
180,758
208,776
36,908
29,440
31,525
24,421
23,410
4,788
20,604
26,556
4,805
3,306
8,721
2,317
20,434
14,070
2,389
3,988
9,397
2,445
16,270
16,074
2,326
4,231
413
447
0
1,046
343
0
2,773
385
45,569
17,359
11,143
26,459
48,057
18,802
12,577
18,21 l r
24,429
8,694
5,507
13,390
22,389
8,146
5,701
10,658
23,456
9,497
5,733
11,446
23,398
8,860
6,494
9,854 r
4,385
1,646
1,049
2,456
3,597
1,708
990
l,706 r
4,808
1,688
1,305
781
OUTLAYS
18 All types
19
20
21
22
7,3
24
National defense
International affairs
General science, space, and technology . . . .
Energy
Natural resources and environment
Agriculture
25
26
27
28
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and
social services
1,380,794
1,408,122
694,345
704,266
723,515
673,328
119,168
124,013
121,488
298,350
16,107
16,409
4,499
20,025
15,205
290,590
17,175
17,055
4,445
20,088
20,257
147,669
7,691
8,472
1,698
11,130
7,418
147,065
8,540
7,951
1,442
8,594
7,526
155,23l r
9,916
8,521
3,109
11,467
8,866
140,535
6,565
7,996
2,462
8,588
11,824
24,903
1,556
1,388
-276
1,907
205
24,281
4,732
1,421
424 r
1,911
1,442
22,990
1,964
1,522
510
2,784
2,237
10,118
33,333
6,838
-23,532
35,238
10,395
36,534
17,074
3,783
15,615
15,651
3,903
-7,697 r
18,425
4,464
-15,112
16,077
4,935
3,003
3,760
1,168
377
3,133
898
-1,361
3,248
930
45,250
48,872
21,114
23,767
21,110"
23,983
4,326
3,586
5,098
79 Health
30 Social security and Medicare
31 Income security
89,497
406,569
196,891
99,249
435,137
207,933
41,459
193,098
87,693
44,164
205,500
104,537
47,232
232,109
98,502r
49,882
195,933
108,559
9,080
36,697
15,6%
9,315
36,267
17,342
8,675
37,047
16,764
32
33
34
35
36
34,133
14,426
12,945
199,439
-39,280
35,715
14,983
13,039
198,870
-37,386
17,425
6,574
6,794
99,149
-20,436
15,597
7,435
5,050
100,161
-18,229
18,561
7,238
8,223
98,692r
-20,628
16,385
7,463
5,205
99,635
-17,035
3,010
1,415
1,712
15,440
-5,886r
2,819
1,011
640
17,082
-2,593
3,198
1,306
1,317
16,171
-2,910
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 1994.
A30 Domestic Financial Statistics • February 1994
1.40
FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars, end of month
1991
1992
1993
Item
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
1 Federal debt outstanding
3,683
3,820
3,897
4,001
4,083
4,196
4,250
4,373
n.a.
2 Public debt securities
3
Held by public
4
Held by agencies
3,665
2,746
920
3,802
2,833
969
3,881
2,918
964
3,985
2,977
1,008
4,065
3,048
1,016
4,177
3,129
1,048
4,231
3,188
1,043
4,352
3,252
1,100
4,412
n.a.
n.a.
18
18
0
19
19
0
16
16
0
16
16
0
18
18
0
19
19
0
20
20
0
21
21
0
5 Agency securities
6
Held by public
7
Held by agencies
June 30
Sept. 30
n.a.
n.a.
n.a.
3,569
3,707
3,784
3,891
3,973
4,086
4,140
4,256
4,316
9 Public debt securities
10 Other debt 1
3,569
0
3,706
0
3,783
0
3,890
0
3,972
0
4,085
0
4,139
0
4,256
0
4,315
0
MEMO
11 Statutory debt limit
4,145
4,145
4,145
4,145
4,145
4,145
4,145
4,370
4,900
8 Debt subject to statutory limit
1. Consists of guaranteed debt of U . S . Treasury and other federal agencies,
specified participation certificates, notes to international lending organizations,
and District of Columbia stadium bonds.
1.41
GROSS PUBLIC DEBT OF U.S. TREASURY
Billions of dollars, end of period
SOURCES. U . S . Department of the Treasury, Monthly Statement
Debt of the United States and Treasury Bulletin.
Types and Ownership
1992
Type and holder
1 Total gross public debt
2
3
4
5
6
7
8
9
10
11
12
13
14
By type
Interest-bearing
Marketable
Bills
Notes
Bonds
Nonmarketable 1
State and local government series
Foreign issues 2
Government
Public
Savings bonds and notes.
Government account series 3
Non-interest-bearing
By holder 4
15 U . S . Treasury and other federal agencies and trust funds,
16 Federal Reserve Banks
17 Private investors
18
Commercial banks
19
Money market funds
20
Insurance companies
21
Other companies
22
State and local treasuries
Individuals
23
Savings bonds
24
Other securities
25
Foreign and international 5
26
Other miscellaneous investors 6
1989
1990
1991
1993
1992
Q4
Q1
Q2
Q3
2,953.0
3,364.8
3,801.7
4,177.0
4,177.0
4,230.6
4,352.0
4,411.5
2,931.8
1,945.4
430.6
1,151.5
348.2
986.4
163.3
6.8
6.8
.0
115.7
695.6
21.2
3,362.0
2,195.8
527.4
1,265.2
388.2
1,166.2
160.8
43.5
43.5
.0
124.1
813.8
2.8
3,798.9
2,471.6
590.4
1,430.8
435.5
1,327.2
159.7
41.9
41.9
.0
135.9
959.2
2.8
4,173.9
2,754.1
657.7
1,608.9
472.5
1,419.8
153.5
37.4
37.4
.0
155.0
1,043.5
3.1
4,173.9
2,754.1
657.7
1,608.9
472.5
1,419.8
153.5
37.4
37.4
.0
155.0
1,043.5
3.1
4,227.6
2,807.1
659.9
1,652.1
480.2
1,420.5
151.6
37.0
37.0
.0
161.4
1,040.0
3.0
4,349.0
2,860.6
659.3
1,698.7
487.6
1,488.4
152.8
43.0
43.0
.0
164.4
1,097.8
2.9
4,408.6
2,904.9
658.4
1,734.2
497.4
1,503.7
149.5
42.5
42.5
.0
167.0
1,114.3
2.9
707.8
228.4
2,015.8
164.9
14.9
125.1
93.4
487.5
828.3
259.8
2,288.3
171.5
45.4
142.0
108.9
490.4
968.7
281.8
2,563.2
233.4
80.0
168.7
150.8
520.3
1,047.8
302.5
2,839.9
294.0
79.4
190.3
192.5
534.8
1,047.8
302.5
2,839.9
294.0
79.4
190.3
192.5
534.8
1,043.2
305.2
2,895.0
310.0
77.7
194.0
199.3
541.0
1,099.8
328.2
2,938.4
322.0
75.8
198.0
206.1
546.0
117.7
98.7
392.9
520.7
126.2
107.6
458.4
637.7
138.1
125.8
491.8
651.3
157.3
131.9
549.2
710.5
157.3
131.9
549.2
710.5
163.6
134.1
564.4
710.8
166.5
136.4
567.5
720.0
1. Includes (not shown separately) securities issued to the Rural Electrification
Administration, depository bonds, retirement plan bonds, and individual retirement bonds.
2. Nonmarketable series denominated in dollars, and series denominated in
foreign currency held by foreigners.
3. Held almost entirely by U.S. Treasury and other federal agencies and trust
funds.
4. Data for Federal Reserve Banks and U.S. government agencies and trust
funds are actual holdings; data for other groups are Treasury estimates.
of the Public
n.a.
5. Consists of investments of foreign balances and international accounts in the
United States.
6. Includes savings and loan associations, nonprofit institutions, credit unions,
mutual savings banks, corporate pension trust funds, dealers and brokers, certain
U.S. Treasury deposit accounts, and federally sponsored agencies.
SOURCES. U . S . Treasury Department, data by type of security, Monthly
Statement of the Public Debt of the United States; data by holder, Treasury
Bulletin.
Federal Finance
1.42
U.S. GOVERNMENT SECURITIES DEALERS
A31
Transactions1
Millions of dollars, daily averages
1993
1993, week ending
Item
42,655
38,764
42,744
51,270
53,746
44,817
41,957
39,036
28,250
21,467
57,840
57,604
26,402
20,347
54,168
50,175
28,310
22,687
65,570
44,918
33,080
20,215
47,477
41,248
25,872
17,198
50,258
52,676
24,315
15,981
10,069
724
623
9,740
719
470
10,066
641
541
8,236
729
381
10,661
919
379
11,375
783
410
28,624
2,648
22,128
2,706
18,318
2,879
16,417
3,161
29,575
3,192
26,082
2,675
18,801
3,220
88,243
92,246
106,704
125,465
127,051
139,173
115,343
119,989
1,548
8,865
1,588
12,217
1,414
11,401
1,442
9,779
1,461
7,484
1,409
14,319
1,752
11,686
1,855
10,269
70,834
54,247
60,419
66,660
75,491
71,032
75,879
70,197
68,058
10,488
11,575
10,095
10,654
9,517
19,056
10,002
13,433
9,487
11,418
9,787
12,093
7,937
18,449
10,206
17,071
10,713
11,752
39,177
43,380
39,668
44,651
35,833
39,342
50,523
39,718
26,974
27,557
49,496
48,286
26,328
22,996
44,600
43,354
25,444
19,347
47,456
51,469
25,102
19,735
35,606
35,824
20,179
15,049
35,563
35,115
24,573
18,073
8,361
512
650
8,633
661
653
9,959
734
567
10,687
864
689
10,199
684
759
9,803
860
441
18,926
3,079
20,594
3,259
20,760
2,863
16,316
3,273
16,412
3,107
114,310
119,952
106,845
117,580
1,554
9,462
1,466
9,745
1,487
10,260
1,751
8,015
69,638
70,534
65,574
7,968
12,544
8,481
14,108
9,773
13,364
Sept. 29
Oct. 6
Oct. 13
Oct. 20
Nov. 10
Nov. 24
Nov. 3
Sept.
Oct.
Nov. 17
Oct. 27
Aug.
IMMEDIATE TRANSACTIONS2
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
By type of security
U . S . Treasury securities
Bills
Coupon securities, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 to 15 years
15 years or more
Federal agency securities
Debt, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 years or more
Mortgage-backed
Pass-throughs
All others
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
FUTURES AND FORWARD
TRANSACTIONS
By type of deliverable security
U.S. Treasury securities
17 Bills
Coupon securities, by maturity
18
Less than 3.5 years
3.5 to 7.5 years
19
20
7.5 to 15 years
15 years or more
21
Federal agency securities
Debt, by maturity
22
Less than 3.5 years
3.5 to 7.5 years
23
24
7.5 years or more
Mortgage-backed
Pass-throughs
25
26
Others 3
1,906
2,504
2,445
1,980
2,817
2,301
2,446
2,247
2,484
4,965
1,792
1,568
2,264
2,062
3,398
14,008
2,254
2,220
3,040
13,177
1,603
1,530
3,153
11,266
1,406
1,359
2,626
11,387
1,140
1,279
1,976
8,669
1,613
1,276
2,513
8,064
1,469
1,384
2,963
10,784
2,049
1,906
4,374
14,608
1,728
1,967
4,211
15,775
2,166
2,048
4,309
12,137
2,244
1,759
4,022
11,879
2,920
2,640
4,388
13,554
80
124
35
150
90
30
47
112
33
271
47
6
25
65
56
45
117
7
26
176
47
60
77
5
111
122
71
147
132
18
6
111
30
69
48
9
24,157
2,093
26,532
1,955
26,410
2,283
22,621
1,917
25,431
1,963
33,701
2,044
23,164
2,346
23,489
2,668
29,155
2,333
38,228
1,996
24,226
1,333
19,934
2,664
1,205
739
982
2,758
1,768
852
863
3,645
1,956
699
610
1,782
1,484
903
724
3,564
1,395
467
337
1,556
1,685
1,017
659
1,519
2,158
542
600
1,956
2,324
769
776
1,935
2,199
744
666
1,943
2,178
572
526
2,104
2,024
434
793
1,560
2,4%
983
1,182
3,142
598
805
888
786
662
1,344
771
798
943
907
594
1,254
OPTIONS TRANSACTIONS5
27
28
29
30
31
By type of underlying security
U.S. Treasury, coupon
securities, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 to 15 years
15 years or more
Federal agency, mortgagebacked securities
Pass-throughs
1. Transactions are market purchases and sales of securities as reported to the
Federal Reserve Bank of New York by the U.S. government securities dealers on
its published list of primary dealers. Averages are based on the number of trading
days in the period. Immediate, forward, and futures transactions are reported at
principal value, which does not include accrued interest; options transactions are
reported at the face value of the underlying securities.
Dealers report cumulative transactions for each week ending Wednesday.
2. Transactions for immediate delivery include purchases or sales of securities
(other than mortgage-backed agency securities) for which delivery is scheduled in
five business days or less and "when-issued" securities that settle on the issue
date of offering. Transactions for immediate delivery of mortgage-backed agency
securities include purchases and sales for which delivery is scheduled in thirty business
days or less. Stripped securities are reported at market value by maturity of coupon or
corpus.
3. Includes such securities as collateralized mortgage obligations (CMOs), real
estate mortgage investment conduits (REMICs), interest-only securities (IOs),
and principal-only securities (POs).
4. Futures transactions are standardized agreements arranged on an exchange.
Forward transactions are agreements made m the over-the-counter market that
specify delayed delivery. All futures transactions are included regardless of time
to delivery. Forward contracts for U.S. Treasury securities and federal agency
debt securities are included when the time to delivery is more than five business
days. Forward contracts for mortgage-backed agency securities are included
when the time to delivery is more than thirty business days.
5. Options transactions are purchases or sales of put-and-call options, whether
arranged on an organized exchange or in the over-the-counter market, and include
options on futures contracts on U.S. Treasury and federal agency securities.
NOTE. In tables 1.42 and 1.43, " n . a . " indicates that data are not published
because of insufficient activity.
Data for several types of options transactions—U.S. Treasury securities, bills;
Federal agency securities, debt; and federal agency securities, mortgage-backed,
other than pass-throughs—are no longer available because activity is insufficient.
A32
1.43
DomesticNonfinancialStatistics • February 1994
U.S. GOVERNMENT SECURITIES DEALERS
Positions and Financing1
Millions of dollars
1993
1993, week ending
item
Aug.
Sept.
Oct.
Sept. 29
Oct. 6
Oct. 13
Oct. 20
Oct. 27
Nov. 3
Nov. 10
Nov. 17
Positions 2
NET IMMEDIATE POSITIONS3
By type of security
U.S. Treasury securities
1 Bills
Coupon securities, by maturity
2
Less than 3.5 years
3
3.5 to 7.5 years
4
7.5 to 15 years
5
15 years or more
Federal agency securities
Debt, by maturity
6
Less than 3.5 years
7
3.5 to 7.5 years
7.5 years or more
8
Mortgage-backed
9
Pass-throughs
10
All others
Other money market instruments
11
Certificates of deposit
12
Commercial paper
13
Bankers acceptances
8,508
6,161
2,561
1,608
4,052
2,934
7,825
-135
-4,788
18,547
21,360
7,631
-21,963
-1,200
6,931
1,901
-21,050
-3,312
10,167
-2,850
-22,479
-6,635
6,313
192
-18,010
-5,241
7,911
-4,939
-19,593
-7,181
8,386
-5,874
-20,281
-5,864
7,438
-4,445
-24,027
-6,536
5,749
2,257
-25,207
-7,454
4,552
-689
-23,275
-5,902
5,302
2
-26,574
488
4,827
-6,995
-26,279
379
2,802
9,611
2,899
3,783
9,784
3,289
4,083
11,014
3,363
4,497
10,882
3,619
4,085
10,855
3,523
4,420
10,062
3,576
4,728
9,762
3,164
4,711
12,899
3,243
4,220
11,900
3,257
4,321
10,798
3,124
4,025
7,513
3,187
4,107
44,748
24,588
53,317
31,825
52,587
37,476
52,459
34,529
43,411
38,881
56,529
37,808
55,381
36,261
58,632
35,656
43,983
40,005
50,417
37,504
50,861
33,304
3,251
7,093
1,135
2,705
7,530
1,103
3,363
6,459
1,287
2,545
5,800
1,242
3,903
7,186
1,307
3,558
6,399
1,515
2,937
5,908
1,441
3,178
6,089
1,021
3,280
7,082
1,056
3,424
7,327
1,505
3,125
6,036
1,463
-7,235
-4,347
4,571
-494
2,085
2,336
3,568
7,703
8,450
5,986
3,718
-1,741
3,649
6,921
-8,172
-1,829
933
8,185
-6,532
-617
2,585
10,436
-3,013
-1,177
-2
7,921
-3,979
-769
1,462
9,232
-4,511
-364
1,882
8,559
-4,069
-886
3,129
9,648
-3,325
-526
3,662
12,622
-8%
-407
2,943
13,402
-1,869
-472
2,638
11,828
-985
-532
1,465
10,312
-290
-18
11
36
107
-7
0
26
-111
26
32
-23
30
209
-123
-27
-68
-150
12
-120
-153
114
-14
-40
27
242
-77
-28
37
-50
-28
17
157
-15
-26,253
5,513
-198,937
-40,809
7,468
-214,188
-37,665
6,104
-225,160
-40,809
9,149
-205,128
-31,831
4,950
-221,167
-41,628
5,392
-220,504
-41,404
7,915
-221,134
-42,171
7,465
-241,630
-25,050
3,533
-217,517
-33,068
2,816
-237,362
-26,614
3,154
-228,654
FUTURES AND FORWARD POSITIONS5
14
15
16
17
18
19
20
21
22
23
24
By type of deliverable security
U.S. Treasury securities
Bills
Coupon securities, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 to 15 years
15 years or more
Federal agency securities
Debt, by maturity
Less than 3.5 years
3.5 to 7.5 years
7.5 years or more
Mortgage-backed
Pass-throughs
All others 4 ^
Certificates of deposit
Financing6
Reverse repurchase agreements
25 Overnight and continuing
26 Term
246,671
400,077
241,660
402,712
239,427
424,391
236,949
413,529
237,334
417,459
244,572
429,074
239,145
430,858
232,632
419,030
245,950
424,660
232,831
445,037
239,9%
401,001
Repurchase agreements
27 Overnight and continuing
28 Term
468,541
371,613
471,885
367,019
454,395
383,016
454,531
384,472
452,427
367,000
463,766
381,464
466,059
385,927
433,873
400,554
456,450
373,973
428,833
412,254
463,030
363,182
Securities borrowed
29 Overnight and continuing
30 Term
134,639
45,868
134,602
41,872
137,205
43,8%
126,246
41,533
132,134
42,157
137,014
43,025
139,900
44,555
137,071
46,045
140,664
43,118
135,791
45,346
137,065
45,019
Securities loaned
31 Overnight and continuing
32 Term
5,760
981
6,593
1,477
6,001
1,988
6,511
1,377
5,773
1,790
6,592
1,722
5,119
1,766
6,318
2,432
6,2%
2,360
5,204
3,074
6,175
2,390
Collateralized loans
33 Overnight and continuing
16,061
16,964
17,715
19,040
17,252
18,076
19,341
16,897
16,364
19,761
19,421
MEMO: Matched book 7
Reverse repurchase agreements
34 Overnight and continuing
35 Term
166,820
342,286
162,477
344,989
160,149
369,897
159,473
349,730
155,254
365,500
158,602
375,552
162,876
373,577
157,083
364,424
170,789
369,733
158,101
393,579
164,401
352,808
Repurchase agreements
36 Overnight and continuing
37 Term
224,196
274,942
216,545
269,078
233,628
285,759
207,614
282,135
218,940
275,941
233,250
289,399
239,395
286,175
232,512
290,968
248,183
284,275
223,626
318,972
237,721
266,354
1. Data for positions and financing are obtained from reports submitted to the
Federal Reserve Bank of New York by the U.S. government securities dealers on
its published list of primary dealers. Weekly figures are close-of-business Wednesday data; monthly figures are averages of weekly data.
2. Securities positions are reported at market value.
3. Net immediate positions include securities purchased or sold (other than
mortgage-backed agency securities) that have been delivered or are scheduled to
be delivered in five business days or less and "when-issued" securities that settle
on the issue date of offering. Net immediate positions of mortgage-backed agency
securities include securities purchased or sold that have been delivered or are
scheduled to be delivered in thirty business days or less.
4. Includes such securities as collateralized mortgage obligations (CMOs), real
estate mortgage investment conduits (REMICs), interest-only securities (IOs),
and principal-only securities (POs).
5. Futures positions reflect standardized agreements arranged on an exchange.
Forward positions reflect agreements made in the over-the-counter market that
delayed delivery. All futures positions are included regardless of time to
for specify
FRASER
Digitized
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 tile
time to delivery is more than thirty business days.
6. Overnight financing refers to agreements made on one business day that
mature on the next business day; continuing contracts are agreements that remain
in effect for more than one business day but have no specific maturity and can be
terminated without advance notice by either party; term agreements have a fixed
maturity of more than one business day .
7. Matched-book data reflect financial intermediation activity in which the
borrowing and lending transactions are matched. Matched-book data are included
in the financing breakdowns given above. The reverse repurchase and repurchase
numbers are not always equal because of the "matching" of securities of different
values or different types of collateralization.
NOTE. Data for futures and forward commercial paper and bankers acceptances and
for term financing of collateralized loans are no longer available because of insufficient
activity.
Federal Finance
1.44 FEDERAL A N D FEDERALLY SPONSORED CREDIT AGENCIES
A33
Debt Outstanding
Millions of dollars, end of period
1993
Agency
1989
1990
1991
1992
May
June
July
Aug.
Sept.
411,805
434,668
442,772
483,970
509,632
512,072
522,494
544,642
0
35,664
7
10,985
328
42,159
7
11,376
393
41,035
7
9,809
397
41,829
7
7,208
374
42,738
7
6,749
271
42,218
7
6,258
283
44,656
7
6,258
97
44,816
7
6,258
154
43,753
7
5,801
213
0
6,445
17,899
0
0
6,948
23,435
0
0
8,421
22,401
0
0
10,660
23,580
0
0
10,440
25,271
0
0
10,182
25,488
0
0
10,182
28,112
0
0
10,182
28,215
0
0
9,732
28,000
0
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 9
16
Financing Corporation 10
17
Farm Credit Financial Assistance Corporation 11
18
Resolution Funding Corporation 12
375,428
136,108
26,148
116,064
54,864
28,705
8,170
847
4,522
392,509
117,895
30,941
123,403
53,590
34,194
8,170
1,261
23,055
401,737
107,543
30,262
133,937
52,199
38,319
8,170
1,261
29,9%
442,141
114,733
29,631
166,300
51,910
39,650
8,170
1,261
29,9%
466,894
120,172
46,555
170,768
51,538
37,%7
8,170
1,261
29,9%
469,854
127,289
35,572
176,527
51,686
38,884
8,170
1,261
29,9%
477,838
125,448
42,291
180,730
51,698
37,801
8,170
1,261
29,9%
499,826
129,808
55,421
184,924
51,406
38,397
8,170
1,261
29,9%
0
132,651
52,702
195,786
51,636
38,795
8,170
1,261
29,9%
MEMO
19 Federal Financing Bank debt 13
134,873
179,083
185,576
154,994
137,215
132,953
132,307
128,616
129,329
10,979
6,195
4,880
16,519
0
11,370
6,698
4,850
14,055
0
9,803
8,201
4,820
10,725
0
7,202
10,440
4,790
6,975
0
6,743
10,440
4,790
6,575
0
6,252
10,182
4,790
6,575
0
6,252
10,182
4,790
6,575
0
6,252
10,182
4,790
6,325
0
5,795
9,732
4,790
6,325
0
53,311
19,265
23,724
52,324
18,890
70,8%
48,534
18,562
84,931
42,979
18,172
64,436
40,379
17,970
50,318
39,729
17,895
47,530
39,129
17,883
47,4%
38,619
17,897
44,551
38,619
17,653
46,415
1 Federal and federally sponsored agencies
2 Federal agencies
3
Defense Department 1
4
Export-Import Bank 2 ' 3
5
Federal Housing Administration
6
Government National Mortgage Association certificates of
participation 5
7
Postal Service 6
Tennessee Valley Authority
8
United States Railway Association
9
20
21
22
23
24
Lending to federal and federally sponsored
Export-Import Bank 3
Postal Service 6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association 6
Other lending14
25 Farmers Home Administration
26 Rural Electrification Administration
27 Other
agencies
1. Consists of mortgages assumed by the Defense Department between 1957
and 1963 under family housing and homeowners assistance programs.
2. Includes participation certificates reclassified as debt beginning Oct. 1,1976.
3. On-budget since Sept. 30, 1976.
4. Consists of debentures issued in payment of Federal Housing Administration
insurance claims. Once issued, these securities may be sold privately on the
securities market.
5. Certificates of participation issued before fiscal year 1969 by the Government
National Mortgage Association acting as trustee for the Farmers Home Administration, the Department of Health, Education, and Welfare, the Department of
Housing and Urban Development, the Small Business Administration, and the
Veterans' Administration.
6. Off-budget.
7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. Some data are estimated.
8. Excludes borrowing by the Farm Credit Financial Assistance Corporation,
shown on line 17.
9. Before late 1982, the Association obtained financing through the Federal
Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is
shown on line 22.
10. The Financing Corporation, established in August 1987 to recapitalize the
Federal Savings and Loan Insurance Corporation, undertook its first borrowing in
October 1987.
11. The Farm Credit Financial Assistance Corporation, established in January
1988 to provide assistance to the Farm Credit System, undertook its first
borrowing in July 1988.
12. The Resolution Funding Corporation, established by the Financial Institutions Reform, Recovery and Enforcement Act of 1989, undertook its first
borrowing in October 1989.
13. The FFB, which began operations in 1974, is authorized to purchase or sell
obligations issued, sold, or guaranteed by other federal agencies. Because F F B
incurs debt solely for the purpose of lending to other agencies, its debt is not
included in the main portion of the table in order to avoid double counting.
14. Includes FFB purchases of agency assets and guaranteed loans; the latter
are loans guaranteed by numerous agencies, with the amounts guaranteed by any
one agency generally being small. The Farmers Home Administration entry
consists exclusively of agency assets, whereas the Rural Electrification Administration entry consists of both agency assets and guaranteed loans.
A34
1.45
DomesticNonfinancialStatistics • February 1994
NEW SECURITY ISSUES
Tax-Exempt State and Local Governments
Millions of dollars
1993
Type of issue or issuer,
or use
1990
1 All issues, new and refunding 1
1991
1992
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
120,339
154,402
215,191
21,421
27,380
29,218
23,958
24,395
23,347
21,509
16,405
By type of issue
2 General obligation
i Revenue
39,610
81,295
55,100
99,302
78,611
136,580
8,272
13,149
9,452
17,928
8,415
20,803
7,713
16,245
6,065
18,330
5,455
17,892
7,398
14,111
6,077
10,328
By type of issuer
4
5 Special district or statutory authority 2
6 Municipality, county, or township
15,149
72,661
32,510
24,939
80,614
48,849
25,295
129,686
60,210
1,463
10,388
9,570
2,910
15,643
8,827
3,562
18,821
6,835
2,944
12,398
8,616
2,319
13,769
8,307
2,758
13,113
7,476
3,216
9,875
8,418
885
10,992
4,528
103,235
116,953
120,272
4,815
8,114
9,358
8,735
8,028
8,820
7,463
6,179
17,042
11,650
11,739
23,099
6,117
34,607
21,121
13,395
21,039
25,648
8,376
30,275
22,071
17,334
20,058
21,796
5,424
33,589
833
699
806
942
134
1,401
1,5%
813
955
1,756
601
2,393
2,208
772
1,629
2,073
1,042
1,634
1,723
653
922
1,555
429
3,453
1,883
1,062
1,646
681
212
2,544
1,886
789
1,255
2,199
329
2,362
547
304
593
1,764
518
3,737
1,416
979
687
604
673
1,820
7 Issues for new capital
By use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
8
9
10
11
12
13
1. Par amounts of long-term issues based on date of sale.
2. Includes school districts.
1.46
NEW SECURITY ISSUES
SOURCES. Securities Data Company beginning January 1993;
Dealer's Digest before then.
Investment
U.S. Corporations
Millions of dollars
1993
Type of issue, offering,
or issuer
1990
1991
1992
Mar.
1
Apr.
May
June
July
Aug/
Sept/
Oct.
r
340,049
465,243
559,449
56,265
40,654
43,121
65,599 r
49,68r
53,227
64,024
52,481
2 Bonds 2
299,884
389,822
471,125
47,427
34,403
34,423 r
55,805 r
39,891 r
43,960
53,374
41,946
By type of offering
3 Public, domestic
4 Private placement, domestic
5 Sold abroad
188,848
86,982
23,054
286,930
74,930
27,%2
377,681
65,853
27,591
42,223
n.a.
5,203
31,199
n.a.
3,204
31,094r
n.a.
3,329
51,208 r
n.a.
4,597
37,218 r
n.a.
2,673 r
40,161
n.a.
3,799
48,568
n.a.
4,806
39,537
n.a.
2,408
51,779
40,733
12,776
17,621
6,687
170,288
86,628
36,666
13,598
23,945
9,431
219,750
81,998
42,869
9,979
48,055
15,394
272,830
8,137
2,695
1,067
7,058
3,270
25,201
6,515
2,194
123
5,767
2,015
17,788
3,690
3,015
685
3,017 r
1,820
22,1%
8,397
2,505
948
5,874 r
2,473
35,608
2,448
5,442 r
605
5,662
2,331
23,403 r
6,132 r
2,331
723
3,264 r
2,979
28,531
4,006
1,916
288
5,113
2,237
39,814
2,794
6,294
1,416
2,230
2,826
26,387
12 Stocks 2
40,175
75,424
88,325
8,838
6,251
8,698
9,794
9,796 r
9,267
10,650
10,535
By type of offering
13 Public preferred
14 Common
15 Private placement 3
3,998
19,442
16,736
17,085
48,230
10,109
21,339
57,118
9,867
1,647
7,191
n.a.
702
5,549
n.a.
3,124
5,574
n.a.
876
8,918
n.a.
2,113
7,683 r
n.a.
3,319
5,948 r
n.a.
1,323
9,327
n.a.
2,549
7,986
n.a.
5,649
10,171
369
416
3,822
19,738
24,111
19,418
2,439
3,474
475
25,507
22,723
20,231
2,595
6,532
2,366
33,879
1,741
2,488
336
743
7
3,522
1,387
1,564
250
412
30
2,579
1,413
2,836
111
753
279
3,307
1,982
2,025
168
893
65
4,660
l,818 r
2,525 r
114
495
n.a.
4,844
1,961
l,457 r
466 r
582
115
4,675
2,274
2,242
153
873
248
4,658
2,121
1,842
128
1,103
18
5,286
1 All issues
6
7
8
9
10
11
16
17
18
19
20
21
By industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
By industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
1. Figures represent gross proceeds of issues maturing in more than one year;
they are the principal amount or number of units calculated by multiplying by the
offering price. Figures exclude secondary offerings, employee stock plans,
investment companies other than closed-end, intracorporate transactions, equities sold abroad, and Yankee bonds. Stock data include ownership securities
issued by limited partnerships.
2. Monthly data cover only public offerings.
3. Monthly data are not available.
SOURCES. IDD Information Services, Inc., Securities Data Company, and the
Board of Governors of the Federal Reserve System.
Securities Market and Corporate Finance
1.47
A35
Net Sales and Assets 1
OPEN-END INVESTMENT COMPANIES
Millions of dollars
1993
Item
1991
1992
Mar.
May
Apr.
June
July
Aug.
Sept. 1
Oct.
1 Sales of own shares 2
463,645
647,055
69,080
66,766
60,504
68,373
72,503
73,032
69,938
74,490
2 Redemptions of own shares
3 Net sales
342,547
121,098
447,140
199,915
47,414
21,666
46,518
20,248
38,752
21,759
46,923
21,650
44,922
27,581
46,382
26,650
49,270
20,667
47,203
27,287
4 Assets4
808,582
1,056,310
1,154,445
1,178,663
1,219,863
1,255,377
1,284,842
1,343,920
1,370,654
1,411,298
5 Cash 5
6 Other
60,292
748,290
73,999
982,311
81,536
1,072,910
87,140
1,091,523
85,677
1,134,186
84,177
1,171,200
93,345
1,191,497
92,771
1,251,149
96,848
1,273,807
103,642
1,307,656
1. Data on sales and redemptions exclude money market mutual funds but
include limited-maturity municipal bond funds. Data on asset positions exclude
both money market mutual funds and limited-maturity municipal bond funds.
2. Includes reinvestment of net income dividends. Excludes reinvestment of
capital gains distributions and share issue of conversions from one fund to another
in the same group.
3. Excludes sales and redemptions resulting from transfers of shares into or out
of money market mutual funds within the same fund family.
4. Market value at end of period, less current liabilities.
5. Includes all U.S. Treasury securities and other short-term debt securities.
SOURCE. Investment Company Institute. Data based on reports of membership,
which comprises substantially all open-end investment companies registered with
the Securities and Exchange Commission. Data reflect underwritings of new
companies.
1.48 CORPORATE PROFITS A N D THEIR DISTRIBUTION
Billions of dollars; quarterly data at seasonally adjusted annual rates
1991
Account
1990
1991
1993
1992
1992
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
380.6
365.7
138.7
227.1
153.5
73.6
369.5
362.3
129.8
232.5
137.4
95.2
407.2
395.4
146.3
249.1
150.5
98.6
378.8
373.5
133.4
240.1
133.9
106.1
409.9
404.3
147.0
257.3
138.0
119.3
411.7
409.5
153.0
256.5
146.1
110.4
367.5
357.9
130.1
227.8
155.2
72.7
439.5
409.9
155.0
254.9
162.9
92.0
432.1
419.8
160.9
258.9
167.5
91.4
458.1
445.6
173.3
272.3
168.5
103.9
468.5
443.8
169.5
274.3
169.7
104.6
7 Inventory valuation
8 Capital consumption adjustment
-11.0
25.9
4.9
2.2
-5.3
17.1
1.9
3.5
-4.6
10.2
-13.7
16.0
-7.8
17.4
4.9
24.7
-12.7
25.1
-12.2
24.7
1.0
23.8
SOURCE. U.S. Department of Commerce, Survey of Current
Business.
1.50 NONFARM BUSINESS EXPENDITURES New Plant and Equipment
Billions of dollars; quarterly data at seasonally adjusted annual rates
1992
Industry
1992
1993
1994
1993
19941
Q2
Q3
Q4
Ql
Q2
Q3
Q4
Ql1
1 Total nonfarm business
546.60
584.64
616.50
541.41
547.40
559.24
564.13
579.79
594.11
600.53
616.38
Manufacturing
2 Durable goods industries
3 Nondurable goods industries
73.32
100.69
81.49
97.97
84.93
101.34
74.07
97.91
72.09
100.77
73.30
103.56
79.11
95.94
80.88
96.21
81.99
100.18
83.99
99.53
87.50
98.72
Nonmanitfacturing
4 Mining
Transportation
5
Railroad
6
Air
7
Other
Public utilities
8
Electric
9
Gas and other
10 Commercial and other 2
8.88
10.13
10.84
9.20
8.98
8.47
8.89
9.10
11.14
11.37
10.83
6.67
8.93
7.04
6.20
6.83
9.34
6.21
4.45
10.25
6.32
9.65
7.19
6.70
9.69
7.52
7.04
7.60
6.97
6.00
7.30
9.17
6.00
6.54
9.04
5.91
6.92
8.88
6.90
6.57
10.26
6.32
4.64
10.53
48.22
23.99
268.84
51.82
23.17
297.69
57.00
24.42
317.05
48.35
24.29
264.46
48.17
24.01
269.46
49.57
24.50
278.24
49.92
23.59
284.21
50.51
24.04
297.46
52.74
22.88
303.47
54.11
22.19
305.61
54.16
23.62
320.06
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.
A36
1.51
DomesticNonfinancialStatistics • February 1994
DOMESTIC FINANCE COMPANIES
Assets and Liabilities1
Billions of dollars, end of period; not seasonally adjusted
1991
Account
1990
1991
1992
1993
1992
Q4
Q1
Q2
Q3
Q4
Ql
Q2
ASSETS
1 Accounts receivable, gross 2
2
Consumer
3
Business
4
Real estate
492.3
133.3
293.6
65.5
480.6
121.9
292.9
65.8
482.1
117.1
296.5
68.4
480.6
121.9
292.9
65.8
475.6
118.4
290.8
66.4
476.7
116.7
293.2
66.8
473.9
116.7
288.5
68.8
482.1
117.1
2%. 5
68.4
469.6
111.9
289.6
68.1
469.3
111.3
290.7
67.2
57.6
9.6
55.1
12.9
50.8
15.8
55.1
12.9
53.6
13.0
51.2
12.3
50.8
12.0
50.8
15.8
47.4
15.5
47.5
13.8
7 Accounts receivable, net
8 All other
425.1
113.9
412.6
149.0
415.5
150.6
412.6
149.0
409.0
145.5
413.2
139.4
411.1
146.5
415.5
150.6
406.6
155.0
408.0
156.6
9 Total assets
539.0
561.6
566.1
561.6
554.5
552.6
557.6
566.1
561.6
564.6
31.0
165.3
42.3
159.5
37.6
156.4
42.3
159.5
38.0
154.4
37.8
147.7
38.1
153.2
37.6
156.4
34.1
149.8
29.5
144.5
n.a.
n.a.
37.5
178.2
63.9
63.7
n.a.
n.a.
34.5
191.3
69.0
64.8
n.a.
n.a.
37.8
195.3
71.2
67.8
n.a.
n.a.
34.5
191.3
69.0
64.8
n.a.
n.a.
34.5
189.8
72.0
66.0
n.a.
n.a.
34.8
191.9
73.4
67.1
n.a.
n.a.
34.9
191.4
73.7
68.1
n.a.
n.a.
37.8
195.3
71.2
67.8
n.a.
n.a.
41.9
195.1
74.2
66.6
n.a.
n.a.
46.4
195.8
81.3
67.1
539.6
561.2
566.1
561.2
554.6
552.7
559.4
566.1
561.7
564.6
Aug.
Sept.
Oct.
5 LESS: Reserves for unearned income
6
Reserves for losses
LIABILITIES AND CAPITAL
10 Bank loans
11 Commercial paper
12
13
14
15
16
17
Debt
Other short-term
Long-term
Owed to parent
Not elsewhere classified
All other liabilities
Capital, surplus, and undivided profits
18 Total liabilities and capital
1. Includes finance company subsidiaries of bank holding companies but not of
retailers and banks. Data are amounts carried on the balance sheets of finance
companies; securitized pools are not shown, as they are not on the books.
2. Before deduction for unearned income and losses,
1.52 DOMESTIC FINANCE COMPANIES Consumer, Real Estate, and Business Credit1
Millions of dollars, amounts outstanding, end of period
1993
Type of credit
1990
1991
1992
May
June
July
Seasonally adjusted
1 Total
522,474
519,910
534,845
523,111
522,981
523,539
525,744
527,207
529,641
2 Consumer
3 Real estate 2
4 Business
160,468
65,147
2%,858
154,822
65,383
299,705
157,707
68,011
309,127
153,275
66,3%
303,440
152,979
67,223
302,778
153,228
67,426
302,885
153,420
67,216
305,109
154,707
66,871
305,629
156,314
67,317
306,010
Not seasonally adjusted
5 Total
6 Consumer
7
Motor vehicles ,
8
Other c o n s u m e r
9
Securitized motor vehicles 4 .
10
Securitized other consumer 4
11 Real estate 2
12 Business
13
Motor vehicles
14
Retail5....
15
Wholesale 6
16
Leasing
17
Equipment
18
Retail
19
Wholesale 6
20
Leasing
21
Other business
22
Securitized business assets 4 .
23
Retail
24
Wholesale
25
Leasing
525,888
523,192
538,158
524,180
526,818
523,389
521,094
524,333
529,198
161,360
75,045
58,213
19,837
8,265
65,509
299,019
92,125
26,454
33,573
32,098
137,654
31,968
11,101
94,585
63,773
5,467
667
3,281
1,519
155,713
63,415
58,522
23,166
10,610
65,760
301,719
90,613
22,957
31,216
36,440
141,399
30, %2
9,671
100,766
60,900
8,807
576
5,285
2,946
158,631
57,605
59,522
29,775
11,729
68,410
311,118
87,456
19,303
29,962
38,191
151,607
32,212
8,669
110,726
57,464
14,590
1,118
8,756
4,716
152,708
53,878
55,433
33,174
10,223
66,150
305,322
89,317
16,513
32,242
40,562
145,237
32,384
8,556
104,297
54,487
16,281
1,375
9,590
5,316
152,995
55,592
55,737
31,642
10,023
67,230
306,593
90,263
16,995
31,787
41,481
146,487
32,775
8,482
105,230
53,987
15,856
1,324
9,539
4,993
153,733
56,817
56,259
30,787
9,870
67,649
302,007
87,745
17,561
27,442
42,743
146,408
33,209
8,224
104,975
53,243
14,611
1,268
8,318
5,025
154,218
55,247
56,616
32,856
9,498
67,565
299,311
84,921
17,264
25,136
42,520
146,404
33,676
8,059
104,669
53,536
14,451
1,220
8,329
4,902
155,4%
55,057
57,588
33,549
9,302
67,212
301,625
85,415
17,761
25,458
42,1%
147,905
33,789
8,113
106,004
53,861
14,444
1,168
8,529
4,747
157,330
55,107
58,113
35,212
8,898
67,755
304,112
85,512
15,968
27,144
42,400
149,207
33,357
8,091
107,759
54,117
15,277
1,690
8,785
4,802
1. Includes finance company subsidiaries of bank holding companies but not of
retailers and banks. Data are before deductions for unearned income and losses.
Data in this table also appear in the Board's G.20 (422) monthly statistical release.
For ordering address, see inside front cover.
2. Includes all loans secured by liens on any type of real estate, for example,
first and junior mortgages and home equity loans.
3. Includes personal cash loans, mobile home loans, and loans to purchase other
types of consumer goods such as appliances, apparel, general merchandise, and
recreation vehicles.
4. Outstanding balances of pools upon which securities have been issued; these
FRASER
balances are no longer carried on the balance sheets of the loan originator.
Digitized for
5. Passenger car fleets and commercial land vehicles for which licenses are
required.
6. Credit arising from transactions between manufacturers and dealers, that is,
floor plan financing.
7. Includes loans on commercial accounts receivable, factored commercial
accounts, and receivable dealer capital; small loans used primarily for business or
farm purposes; and wholesale and lease paper for mobile homes, campers, and
travel trailers.
1.53 MORTGAGE MARKETS
Real Estate
A37
Sept.
Oct.
Nov.
Mortgages on New Homes
Millions of dollars except as noted
1993
Item
1990
1991
1992
May
June
July
Aug.
Terms and yields in primary and secondary markets
PRIMARY MARKETS
1
2
3
4
5
Terms1
Purchase price (thousands of dollars)
Amount of loan (thousands of dollars)
Loan-to-price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount) 2
Yield (percent per year)
6 Contract rate 1 ,
7 Effective rate 1 ,
8 Contract rate ( H U D series) 4
153.2
112.4
74.8
27.3
1.93
155.0
114.0
75.0
26.8
1.71
158.1
118.1
76.6
25.6
1.60
153.1
118.8
79.5
26.9
1.43
185.6
125.3
75.3
25.4
1.32
168.7
127.4
77.8
26.2
1.28
158.1
122.2
78.4
26.4
1.21
155.3
120.8
78.5
26.5
1.13
169.2
128.4
78.0
26.7
1.23
174.4
134.0
79.1
26.9
1.23
9.68
10.01
10.08
9.02
9.30
9.20
7.98
8.25
8.43
7.14
7.37
7.59
7.02
7.23
7.33
6.99
7.20
7.31
6.86
7.05
6.89
6.76
6.95
6.94
6.61
6.80
7.05
6.61
6.80
7.37
10.17
9.51
9.25
8.59
8.46
7.71
7.59
6.82
7.52
6.74
7.51
6.53
7.02
6.42
7.03
6.15
7.08
6.11
7.51
6.48
SECONDARY MARKETS
Yield (percent per year)
9 F H A mortgages (Section 203)5
10 G N M A securities 6
Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
11 Total
12
FHA/VA insured
13
Conventional
Mortgage transactions
14 Purchases
Mortgage
15 Issued'
16 To sell 8
commitments
(during
(during
113,329
21,028
92,302
122,837
21,702
101,135
142,833
22,168
120,664
166,849
22,691
144,158
171,232
22,656
148,576
174,674
22,761
151,913
177,992
22,834
155,158
180,057
22,810
157,247
182,524
22,978
159,546
185,463
23,334
162,129
23,959
37,202
75,905
7,526
9,131
7,854
8,176
8,866
8,780
8,979
23,689
5,270
40,010
7,608
74,970
10,493
7,791
30
8,697
323
7,760
458
8,581
2,585
9,814
0
7,515
0
11,144
0
20,419
547
19,871
24,131
484
23,283
29,959
408
29,552
39,960
325
39,635
42,477
319
42,158
43,119
314
42,805
44,396
324
44,072
46,858
323
46,536
50,108
321
49,787
52,933
324
52,610
75,517
73,817
99,965
92,478
191,125
179,208
18,842
17,532
21,529
18,968
19,700
18,631
19,636
18,008
18,372
16,230
18,658
15,985r
27,062
24,028
102,401
114,031
261,637
18,908
28,831
21,722
17,085
16,495
24,614
39,977
period)
period)
FEDERAL HOME LOAN MORTGAGE CORPORATION
Mortgage holdings (end of
17 Total
18
FHA/VA insured
19
Conventional
Mortgage transactions
20 Purchases
21 Sales
Mortgage commitments
22 Contracted
periodf
(during
(during
period)
periodf
1. Weighted averages based on sample surveys of mortgages originated by
major institutional lender groups for purchase of newly built homes; compiled by
the Federal Housing Finance Board in cooperation with the Federal Deposit
Insurance Corporation.
2. Includes all fees, commissions, discounts, and " p o i n t s " paid (by the
borrower or the seller) to obtain a loan.
3. Average effective interest rate on loans closed for purchase of newly built
homes, assuming prepayment at the end of ten years.
4. Average contract rate on new commitments for conventional first mortgages; from U.S. Department of Housing and Urban Development (HUD). Based
on transactions on the first day of the subsequent month.
5. Average gross yield on thirty-year, minimum-downpayment first mortgages insured by the Federal Housing Administration (FHA) for immediate
delivery in the private secondary market. Based on transactions on first day of
subsequent month.
6. Average net yields to investors on fully modified pass-through securities
backed by mortgages and guaranteed by the Government National Mortgage
Association (GNMA), assuming prepayment in twelve years on pools of thirtyyear mortgages insured by the Federal Housing Administration or guaranteed by
the Department of Veterans Affairs.
7. Does not include standby commitments issued, but includes standby commitments converted.
8. Includes participation loans as well as whole loans.
9. Includes conventional and government-underwritten loans. The Federal
Home Loan Mortgage Corporation's mortgage commitments and mortgage transactions include activity under mortgage securities swap programs, whereas the
corresponding data for F N M A exclude swap activity.
A38 Domestic Financial Statistics • February 1994
1.54 MORTGAGE DEBT OUTSTANDING 1
Millions of dollars, end of period
1992
Type of holder and property
1989
1990
1993
1991
Q3
Q4
Q1
Q2
Q3"
1 All holders
3,549,564 r
3,761,52^
3,923,371'
4,020,556*
4,042,926*
4,059,200*
4,099,621*
4,160,167
By type of property
2 One- to four-family residences
3 Multifamily residences
4 Commercial
5
2,408,402 r
306,517r
754,169*
80,476
2,615,435 r
309,369*
758,313*
78,408*
2,778,803*
306,410*
759,023*
79,136*
2,911,442*
301,975*
726,562*
80,577*
2,953,527*
294,976*
713,701*
80,722*
2,976,784*
293,578*
708,086*
80,752*
3,026,924*
290,609*
701,280*
80,808*
3,088,521
290,857
699,926
80,863
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
1,846,726
876,100
483,623
36,935
337,095
18,447
705,367
538,358
79,881
86,741
388
265,258
11,547
29,562
214,105
10,044
1,793,492
891,445
502,075
38,757
330,705
19,908
648,178
501,604
73,723
72,517
334
253,869
11,779
28,591
204,132
9,366
1,769,187*
894,513*
507,780*
38,024*
328,826*
19,882
627,972
489,622
69,791
68,235
324
246,702
11,441
27,770
198,269
9,222
1,753,045*
891,755*
507,497*
37,425*
326,853*
19,980*
617,163*
480,415*
70,608*
65,808*
332
244,128
11,316
27,466
196,100
9,246
1,765,052*
910,944*
526,800*
38,064*
325,485*
20,595*
612,379*
480,636*
68,325*
63,0%*
322*
241,729*
11,195*
27,174*
194,012*
9,348*
1,770,274
922,366
536,321
38,370
326,859
20,815
610,081
478,832
68,068
62,860
321
237,826
11,008
26,718
190,758
9,343
22 Federal and related agencies
23
Government National Mortgage Association
24
One- to four-family
25
Multifamily
26
Farmers Home Administration
27
One- to four-family
28
Multifamily
29
Commercial
30
Farm
Federal Housing and Veterans' Administrations
31
32
One- to four-family
33
Multifamily
34
Resolution Trust Corporation
35
One- to four-family
36
Multifamily
37
Commercial
38
Farm
39
Federal National Mortgage Association
40
One- to four-family
41
Multifamily
42
Federal Land Banks
43
One- to four-family
44
Farm
45
Federal Home Loan Mortgage Corporation
46
One- to four-family
47
Multifamily
197,778
23
23
0
41,176
18,422
9,054
4,443
9,257
6,087
2,875
3,212
0
0
0
0
0
99,001
90,575
8,426
29,640
1,210
28,430
21,851
18,248
3,603
239,003
20
20
0
41,439
18,527
9,640
4,690
8,582
8,801
3,593
5,208
32,600
15,800
8,064
8,736
0
104,870
94,323
10,547
29,416
1,838
27,577
21,857
19,185
2,672
266,146
19
19
0
41,713
18,4%
10,141
4,905
8,171
10,733
4,036
6,697
45,822
14,535
15,018
16,269
0
112,283
100,387
11,8%
28,767
1,693
27,074
26,809
24,125
2,684
277,485
27
27
0
41,671
17,292
10,468
5,072
8,839
11,768
4,531
7,236
37,099
12,614
11,130
13,356
0
126,476
113,407
13,069
28,815
1,695
27,119
31,629
29,039
2,591
286,263*
30
30
0
41,695
16,912
10,575
5,158
9,050
12,581
5,153
7,428
32,045
12,960
9,621
9,464
0
137,584
124,016
13,568
28,664*
1,687*
26,977*
33,665
31,032
2,633
287,182
45
37
8
41,630
18,149
10,235
4,934
8,313
13,027
5,631
7,3%
27,331
11,375
8,070
7,886
0
141,192
127,252
13,940
28,536
1,679
26,857
35,421
32,831
2,589
299,214
45
38
7
41,669
18,313
10,197
4,915
8,245
12,945
5,635
7,311
21,973
8,955
6,743
6,275
0
151,513
137,340
14,173
28,592
1,682
26,909
42,477
39,905
2,572
310,825
44
37
7
41,669
18,313
10,197
4,915
8,245
12,797
5,460
7,336
19,925
8,381
6,002
5,543
0
160,721
146,009
14,712
28,810
1,695
27,115
46,859
44,315
2,544
48 Mortgage pools or trusts 5
49
Government National Mortgage Association
50
One- to four-family
Multifamily
51
52
Federal Home Loan Mortgage Corporation
One- to four-family
53
54
Multifamily
55
Federal National Mortgage Association
56
One- to four-family
57
Multifamily
58
Farmers Home Administration
59
One- to four-family
60
Multifamily
61
Commercial
62
Farm
63
Private mortgage conduits
64
One- to four-family
65
Multifamily
66
Commercial
67
Farm
917,848
368,367
358,142
10,225
272,870
266,060
6,810
228,232
219,577
8,655
80
21
0
26
33
48,299
43,325
462
4,512
0
1,079,103
403,613
391,505
12,108
316,359
308,369
7,990
299,833
291,194
8,639
66
17
0
24
26
59,232
53,335
731
5,166
0
1,250,666
425,295
415,767
9,528
359,163
351,906
7,257
371,984
362,667
9,317
47
11
0
19
17
94,177
84,000
3,698
6,479
0
1,385,460
422,255
413,063
9,192
391,762
385,400
6,362
429,935
420,835
9,100
41
9
0
18
14
141,468
123,000
5,7%
12,673
0
1,425,546
419,516
410,675
8,841
407,514
401,525
5,989
444,979
435,979
9,000
38
8
0
17
13
153,499
132,000
6,305
15,194
0
1,461,612
421,514
412,798
8,716
420,932
415,279
5,654
457,316
448,483
8,833
44
10
0
18
16
161,805
137,000
6,662
18,143
0
1,472,844
413,166
404,425
8,741
422,882
417,646
5,236
465,220
456,645
8,575
45
10
0
19
16
171,532
145,000
7,410
19,121
0
1,513,024
415,076
405,%3
9,113
430,089
425,154
4,935
481,880
473,599
8,281
45
10
0
19
16
185,933
158,000
8,074
19,859
0
68 Individuals and others 6
69
One- to four-family
70
Multifamily
71
Commercial
72
Farm
502,401r
318,842r
84,272r
83,440*
15,846
529,104*
348,638*
85,969*
80,761*
13,737*
559,833*
367,633*
83,7%*
93,410*
14,994*
564,118*
375,072*
85,960*
88,090*
14,9%*
557,360*
367,031*
85,977*
88,344*
16,008*
562,511*
372,699*
86,083*
88,357*
15,372*
566,045
375,423
86,500
89,113
15,008
By type of holder
6 Major financial institutions
7
Commercial banks
8
One- to four-family
9
Multifamily
10
Commercial
11
Farm
12
Savings institutions
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
1. Based on data from various institutional and governmental sources; figures
for some quarters estimated in part by the Federal Reserve. Multifamily debt
refers to loans on structures of five or more units.
2. Includes loans held by nondeposit trust companies but not loans held by
bank trust departments.
3. Includes savings banks and savings and loan associations.
4. FmHA-guaranteed securities sold to the Federal Financing Bank were
reallocated from FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4
because of accounting changes by the Farmers Home Administration.
561,930*
372,708*
85,430*
88,538*
15,254*
5. Outstanding principaj balances of mortgage-backed securities insured or
guaranteed by the agency indicated.
6. Other holders include mortgage companies, real estate investment trusts,
state and local credit agencies, state and local retirement funds, noninsured
pension funds, credit unions, and finance companies.
SOURCES. Based on data from various institutional and government sources.
Separation of nonfarm mortgage debt by type of property, if not reported directly,
and interpolations and extrapolations, when required, are estimated mainly by the
Federal Reserve. Line 64, from Inside Mortgage Securities.
Consumer Installment Credit
1.55
A39
CONSUMER INSTALLMENT CREDIT 1
Millions of dollars, amounts outstanding, end of period
1993
Holder and type of credit
1990
1991
1992
May
June
July
Aug.
Sept. r
Oct.
Seasonally adjusted
1 Total
738,765
733,510
741,093
750,293
752,428
757,465
762,503
768,599
776,707
2 Automobile
3 Revolving
4 Other
284,739
222,552
231,474
260,898
243,564
229,048
259,627
254,299
227,167
264,007
262,690
223,596
265,388
263,338
223,701
267,468
266,938
223,058
268,784
270,753
222,967
270,676
273,703
224,220
274,616
276,854
225,238
Not seasonally adjusted
752,883
749,052
756,944
744,778
748,830
753,645
763,268
770,410
777,196
By major holder
Commercial banks
Finance companies
Credit unions
Retailers
Savings institutions
Gasoline companies
Pools of securitized assets 2 . .
347,087
133,258
93,057
43,464
52,164
4,822
79,030
340,713
121,937
92,681
39,832
45,965
4,362
103,562
331,869
117,127
97,641
42,079
43,461
4,365
120,402
333,415
109,311
103,019
38,681
39,210
4,486
116,656
335,592
111,330
104,781
38,813
37,250
4,567
116,497
339,948
83,820*
106,027
39,043
36,485
4,668
114,398
345,449
82,249*
108,095
39,688
35,919
4,728
117,525
349,699
112,645
109,687
39,842
34,985
4,574
118,978
353,296
113,220
110,830
40,310
34,251
4,599
120,690
By major type of credit*
13 Automobile
14
Commercial banks
15
Finance companies
16
Pools of securitized assets 2
284,903
124,913
75,045
24,620
261,219
112,666
63,415
28,915
259,964
109,743
57,605
33,878
262,860
112,700
53,878
36,431
265,345
114,901
55,592
34,701
267,646
116,729
56,817
33,673
270,495
118,535
55,247
35,569
273,317
120,574
55,057
36,149
276,681
122,178
55,107
37,630
17 Revolving
18
Commercial banks
19
Retailers
20
Gasoline companies
21
Pools of securitized assets 2
234,801
133,385
38,448
4,822
45,637
256,876
138,005
34,712
4,362
63,595
267,949
132,582
36,629
4,365
74,243
259,566
130,871
33,254
4,486
69,054
260,993
129,921
33,328
4,567
70,842
264,100
132,984
33,505
4,668
69,935
269,663
135,466
34,099
4,728
71,562
272,579
136,738
34,214
4,574
72,646
274,840
137,835
34,668
4,599
73,296
22 Other
23
Commercial banks
24
Finance companies
25
Retailers
26
Pools of securitized assets 2
233,178
88,789
58,213
5,016
8,773
230,957
90,042
58,522
5,120
11,052
229,031
89,544
59,522
5,450
12,281
222,352
89,844
55,433
5,427
11,171
222,491
90,770
55,737
5,485
10,954
221,899
90,235
56,259
5,538
10,790
223,109
91,448
56,616
5,589
10,394
224,514
92,387
57,588
5,628
10,183
225,675
93,283
58,113
5,642
9,764
5 Total
6
7
8
9
10
11
12
1. The Board's series on amounts of credit covers most short- and
intermediate-term credit extended to individuals that is scheduled to be repaid (or
has the option of repayment) in two or more installments.
Data in this table also appear in the Board's G.19 (421) monthly statistical
release. For ordering address, see inside front cover.
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.
1.56 TERMS OF CONSUMER INSTALLMENT CREDIT1
Percent per year except as noted
1993
Item
1990
1991
1992
Apr.
May
June
July
Aug.
Sept.
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
11.78
15.46
14.02
18.17
11.14
15.18
13.70
18.23
9.29
14.04
12.67
17.78
n.a.
n.a.
n.a.
n.a.
8.17
13.63
12.00
17.15
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
7.98
13.45
11.53
16.59
n.a.
n.a.
n.a.
n.a.
12.54
15.99
12.41
15.60
9.93
13.80
9.61
12.74
9.51
12.61
9.45
12.55
9.37
12.46
9.21
12.48
9.21
12.52
54.6
46.0
55.1
47.2
54.0
47.9
54.5
48.9
54.4
48.9
54.6
49.0
54.7
49.0
54.9
49.0
54.7
48.8
87
95
88
96
89
97
90
98
91
98
91
98
91
98
91
99
91
98
12,071
8,289
12,494
8,884
13,584
9,119
14,021
9,731
14,146
9,829
14,2%
9,912
14,430
9,9%
14,324
10,104
14,348
9,808
companies
OTHER TERMS3
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. The Board's series on amounts of credit covers most short- and intermediate-term credit extended to individuals that is scheduled to be repaid (or has the
option of repayment) in two or more installments. Data in this table also appear in
the Board's G.19 (421) monthly statistical release. For ordering address, see
inside front cover.
2. Data are available for only the second month of each quarter,
3. At auto finance companies,
n.a.
A40 Domestic Financial Statistics • February 1994
1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1
Billions of dollars; quarterly data at seasonally adjusted annual rates
1991
1988
1989
1990
1991
1992
1993
1992
Q4
Q1
Q2
Q3
' 0 4
Ql
r
Q2'
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors . .
752.6
723.0
631.0
475.5
582.4 r
411.4
603.3'
586.2 r
610.8 r
529.1'
399.3
667.5
By sector and instrument
2 U.S. government
Treasury securities
3
Agency issues and mortgages
4
155.1
137.7
17.4
146.4
144.7
1.6
246.9
238.7
8.2
278.2
292.0
-13.8
304.0
303.8
.2
272.5
268.7
3.8
323.8
335.0
-11.2
352.9
352.5
.4
299.1
290.1
9.0
240.1
237.4
2.7
229.6
226.4
3.2
348.2
344.1
4.1
5 Private
597.5
576.6
384.1
197.3
278.4 r
138.9
279.5 r
233.4 r
311.7 r
289.0'
169.7
319.2
6
7
8
9
10
11
12
13
14
15
16
By instrument
Tax-exempt obligations
Corporate bonds
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Consumer credit
Bank loans n.e.c
Commercial paper
Other loans
53.7
103.1
279.6
219.6
16.1
48.5
-4.6
50.1
44.7
11.9
54.3
65.3
73.8
269.1
212.5
12.0
47.3
-2.7
49.5
36.4
21.4
61.0
57.3
47.1
188.7
177.2
3.4
8.9
-.8
13.4
4.2
9.7
63.6
69.6
78.8
165.1
166.0
-2.5
.9
.7
-13.1
-46.8
-18.4
-37.8
65.7
67.3
121.l r
176.0
-11.1
-45.5
1.6r
9.3
-5.6r
8.6
12.0r
77.6
60.2
145.2
176.5
.2
-28.6
-2.9
-10.7
-53.7
-5.0
-74.9
68.0
76.3
185.4r
216.5
11.6
-46.9
4.2 r
-9.8
—47.3r
2.5
4.5 r
76.6
77.8
69.8 r
111.6
—25.7r
,8 r
-14.7
27.T
-2.6
-i.r
75.8
61.3
135.l r
203.3
-11.2r
—57.7r
.8 r
13.5
-24. lr
9.3
40.8 r
42.4
53.7
93^
172.8'
-27.9'
-51.6'
.6'
48.2
21.4'
25.4
62.4
75.0
100.2
128.4
-6.6
-21.7
.1
19.2
-39.7
-24.2
-23.0
67.2
64.9
134.5
176.2
-12.8
-29.1
.2
22.9
31.8
34.8
-37.0
17
18
19
20
21
22
By borrowing sector
Household
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
State and local government
300.1
248.4
-10.0
57.2
201.3
48.9
276.7
236.3
.5
49.4
186.5
63.5
207.7
121.9
1.8
19.4
100.7
54.5
168.4
-33.4
2.4
-24.5
-11.3
62.3
215.0 r
4.0 r
1.5r
—39.4r
41.8 r
59.4
193.8
-129.0
-4.6
-57.9
-66.5
74.0
199.2r
18.2r
4.3 r
—21.8r
35 .r
62.1
176.5 r
-io.r
3.6 r
—47.4r
33 .T
66.9
217.7 r
20.5 r
-,lr
—37.3r
S1.9
73.5
266.6'
-n.r
-1.6'
-51.C
39.9 r
35.1
137.4
-38.9
-2.5
-36.7
.3
71.2
215.8
34.5
3.4
-31.4
62.5
68.9
23 Foreign net borrowing in United States
24
Bonds
25
Bank loans n.e.c
Open market paper
26
27
U.S. government loans
6.4
6.9
-1.8
8.7
-7.5
10.2
4.9
-.1
13.1
-7.6
23.9
21.4
-2.9
12.3
-7.0
13.9
14.1
3.1
6.4
-9.8
24.2
17.3
2.3
5.2
-.6
34.3
18.5
6.5
14.9
-5.6
1.9
4.9
1.5
-8.0
3.6
57.7
21.9
14.1
27.8
-6.1
37.8
20.3
3.9
13.1
.5
-.6
22.2
-10.3
-12.1
-.4
50.3
75.6
1.6
-21.7
-5.3
26.8
30.4
6.5
-.6
-9.5
28 Total domestic plus foreign
759.0
733.1
654.9
489.4
606.6 r
445.6
605.3 r
644.0'
648.7 r
528.5'
449.5
694.2
Financial sectors
239.9
213.7
193.5
150.4
209.5 r
190.5
167.6
206.3'
294.4 r
169.6'
148.5
130.3
119.8
44.9
74.9
.0
149.5
25.2
124.3
.0
167.4
17.1
150.3
-.1
145.7
9.2
136.6
.0
155.8
40.3
115.6
.0
150.4
32.6
117.9
-.1
126.8
11.5
115.3
.0
195.2
48.3
146.9
.0
169.3
67.7
101.6
.0
131.8
33.6
98.4
-.1
165.8
32.2
133.6
.0
62.7
68.8
-6.1
.0
34 Private
35
Corporate bonds
Mortgages
36
Bank loans n.e.c
37
Open market paper
38
Loans from Federal Home Loan Banks
39
120.1
49.0
.3
-3.8
54.8
19.7
64.2
37.3
.5
6.0
31.3
-11.0
26.1
40.8
.4
1.1
8.6
-24.7
4.6
56.8
.8
17.1
-32.0
-38.0
53.7 r
58.4 r
.0
-4.8
-.7
.8
40.1
73.7
1.2
3.8
-9.9
-28.6
40.8
28.6
-.4
22.0
1.1
-10.4
ii.<y
59.1
,lr
-39.1
-14.8
5.8
i25.r
71.5 r
.3 r
i7.r
17.5
18.1
37.8'
74.2
.1'
- l ^
-6.5
-10.1
-17.3
59.9
.9
-21.2
-75.5
18.6
67.6
55.5
2.7
-5.9
-18.4
33.5
By borrowing sector
40 Government sponsored enterprises
41 Federally related mortgage pools
42 Private
Commercial banks
43
44
Bank affiliates
45
Funding corporations
46
Savings institutions
Credit unions
47
48
Life insurance companies
Finance companies
49
50
Mortgage companies
Real estate investment trusts (REITs)
51
Securitized credit obligation (SCO) issuers
52
44.9
74.9
120.1
-3.0
5.2
39.1
21.7
.0
.0
23.9
-6.2
1.8
37.6
25.2
124.3
64.2
-1.4
6.2
13.8
-15.1
.0
.0
27.4
3.0
1.3
28.9
17.0
150.3
26.1
-.7
-27.7
12.5
-30.2
.0
.0
24.0
-4.0
1.0
51.1
9.1
136.6
4.6
-11.7
-2.5
-13.6
-44.5
.0
.0
18.6
5.7
1.6
51.0
40.2
115.6
53 .r
8.8
2.3
1.6r
-6.7
.0
.0
-3.6
.1
.1
51.l r
32.5
117.9
40.1
-9.5
7.0
-14.0
-34.0
.0
.0
39.0
1.9
3.3
46.5
11.5
115.3
40.8
3.2
10.9
16.1
-18.3
.0
.0
-35.6
27.5
1.7
35.3
48.3
146.9
11.<r
5.5
-9.2
29.2 r
-5.4
.0
.0
-20.1
-35.3
1.3 r
45.0
67.7
101.6
125.l r
12.1
6.6
-i.r
11.2
.0
.2
21.2
14.4
2.0 r
65.0 r
33.5
98.4
37.8'
14.5
.8
-31.1'
-14.4
.1
-.2
19.9
-6.4
-4.r
59.2
32.2
133.6
-17.3
5.4
21.1
-54.2
7.9
.0
.1
-33.1
-10.4
-1.4
47.2
68.8
-6.1
67.6
10.1
1.3
7.2
17.7
.3
.6
-38.6
15.9
2.5
50.5
29 Total net borrowing by financial sectors
30
31
32
33
By instrument
U.S. government-related
Government-sponsored enterprises securities
Mortgage pool securities
Loans from U.S. government
Flow of Funds
A41
1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1—Continued
1991
Transaction category or sector
1988
1989
1990
1991
1993
1992
1992
Q4
Q1
Q2
Q3
Q4
Qlr
Q2r
All sectors
53 Total net borrowing, all sectors
998.8
946.8
848.4
639.8
816.0*
636.2
772.8r
850.2*
943.0*
698.1r
598.1
824.5
54
55
56
57
58
59
60
61
274.9
53.7
159.0
280.0
50.1
39.2
75.4
66.6
295.8
65.3
116.0
269.6
49.5
42.3
65.9
42.4
414.4
57.3
109.2
189.1
13.4
2.4
30.7
31.8
424.0
69.6
149.6
165.8
-13.1
-26.6
-44.0
-85.6
459.8
65.7
143.0*
121.1*
9.3
-8.1*
13.1
12.2*
423.0
77.6
152.4
146.5
-10.7
-43.4
.0
-109.3
450.6
68.0
109.7*
185.0*
-9.8
-23.9*
-4.5
-2.4*
548.1
76.6
158.8
69.8*
-14.7
2.8*
10.3
-1.4*
468.5
75.8
153.2*
135.4*
13.5
-2.5*
39.9
59.3*
372.0
42.4
150.1
94.0*
48.2
-8.8*
6.8
-6.7*
395.3
62.4
210.5
101.0
19.2
-59.3
-121.4
-9.7
410.9
67.2
150.9
137.3
22.9
32.4
15.8
-13.0
U.S. government securities
Tax-exempt securities
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans
External corporate equity funds raised in United States
62 Total net share issues
63 Mutual funds
64 All other
65 Nonfinancial corporations
66 Financial corporations
67 Foreign shares purchased in United States
-98.6
-59.6
22.2
210.6
282.5*
290.6
274.2*
264.1*
293.3'
298.4*
292.2
461.9
6.1
38.5
-104.7
-98.1
-129.5 -124.2
23.9
8.8
.9
17.2
67.9
-45.7
-63.0
9.9
7.4
150.5
60.1
18.3
11.2
30.7
206.7*
75.8*
26.8
18.4*
30.6
208.9
81.7
48.0
10.0
23.7
174.4
99.9*
46.0
24.8*
29.1
199.5*
64.6*
36.0
17.4*
11.2
235.2*
58.1*
11.0
12.3*
34.8
217.7*
80.7*
14.0
19.2*
47.5
240.9
51.2
9.0
10.3
31.9
357.5
104.4
26.0
28.1
50.3
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical
release, tables F.2 through F.5. For ordering address, see inside front cover.
A42 Domestic Financial Statistics • February 1994
1.58 SUMMARY OF FINANCIAL TRANSACTIONS1
Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates
1991
Transaction category or sector
1988
1989
1990
1991
1993
1992
1992
04
Ql
Q2
Q3
Q4
Ql*
Q2*
NET LENDING IN CREDIT MARKETS2
1 Total net lending in credit markets
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
Private domestic nonfinancial sectors
Households
Nonfarm noncorporate business
Nonfinancial corporate business
State and local governments
U.S. government
Foreign
Financial sectors
Government sponsored enterprises
Federally related mortgage pools
Monetary authority
Commercial banking
U.S. commercial banks
Foreign banking offices
Bank holding companies
Banks in U . S . affiliated areas
Private nonbank finance
Thrift institutions
Insurance
Life insurance companies
Other insurance companies
Private pension funds
State and local government retirement funds
Finance n.e.c
Finance companies
Mortgage companies
Mutual funds
Closed-end funds
Money market funds
Real estate investment trusts (REITs)
Brokers and dealers
Asset-backed securities (ABSs)
Bank personal trusts
998.8
946.8
848.4
639.8
816.0*
196.1
170.3
3.1
5.7
17.1
-10.6
108.6
704.8
33.2
74.9
10.5
156.5
126.4
29.4
-.1
.8
429.7
114.8
199.0
104.0
29.2
29.2
36.6
115.9
38.1
-7.4
11.9
19.8
10.7
.9
-8.2
35.9
14.3
122.6
78.6
-.7
13.6
31.1
-3.1
84.4
742.9
-4.1
124.3
-7.3
177.2
146.1
26.7
2.8
1.6
452.9
-86.6
257.4
101.8
29.7
81.1
44.7
282.2
32.0
6.1
23.8
6.3
67.1
.5
96.3
27.7
22.4
162.8
140.1
-1.7
-5.3
29.6
33.7
82.1
569.9
16.4
150.3
8.1
125.1
94.9
28.4
-2.8
4.5
270.0
-153.3
181.6
94.4
26.5
17.2
43.5
241.7
28.4
-8.0
41.4
.0
80.9
-.7
34.9
49.9
14.8
-16.1
-49.7
-4.2
4.3
33.5
10.5
25.6
619.8
14.2
136.6
31.1
84.3
39.2
48.5
-1.5
-1.9
353.7
-123.0
234.3
83.2
32.3
85.3
33.5
242.3
-12.1
11.4
90.3
15.2
30.1
-1.0
49.0
49.0
10.4
79.0*
50.2 r
-2.4
36.3
-5.0
-11.9
100.7*
648.2*
69.0*
115.6
27.9
94.8
69.8
16.5
5.6
2.9
341.0*
-59.9
164.5*
82.4
12.7
37.3*
32.2
236.3*
1.7
.1
123.7*
12.3
1.3
.4*
40.2
48.6
8.0
998.8
946.8
848.4
639.8
816.0*
636.2
4.0
.5
25.3
140.1
2.9
278.6
43.2
121.6
53.1
21.9
23.7
15.2
6.1
-104.7
3.0
89.6
5.3
-24.0
7.2
199.2
24.8
4.1
28.8
309.7
-16.5
284.8
6.1
100.4
13.9
90.1
77.8
-3.6
38.5
-98.1
15.6
59.4
2.0
-31.1
23.1
292.1
2.0
2.5
25.7
158.1
34.2
98.1
44.2
59.0
-65.7
70.3
-24.2
14.6
67.9
-45.7
3.5
32.1
-4.5
-35.5
21.5
98.2
-5.9
.0
25.7
358.8
-3.7
48.2
75.8
16.7
-60.8
41.2
-16.5
-8.2
150.5
60.1
51.4
-2.2
-8.5
-12.5
29.8
169.9
-1.6
-1.8
28.4
214.8*
49.0*
9.3
122.8*
-60.8
-80.0
3.9
33.6
-10.2
206.7*
75.8*
4.2
57.9
7.7
-10.7*
-7.5
196.4*
-5.0
.5
19.2
419.6
10.3
48.5
102.8
8.7
-108.8
30.5
23.8
-8.4
208.9
81.7
118.0
-16.3
-3.3
12.9
10.8
256.4
1,632.0
1,883.8
1,306.5
1.6
.8
-6.2
8.4
-3.2
-1.9
3.3
2.5
2.5
-13.1
2.0
8.1
.7
1.6
21.5*
-88.2
-5.5
-14.1
-.1
-3.0
-29.6
6.3
47.3
-.2
-4.4
32.4
2.3
-77.8
.2
1.6
-31.5
.5
-23.6
-.6
26.2
5.2
.4
-32.1
-.2
-4.0
31.1
6.7
-15.4*
-.1
16.6
66.7
.5
-7.6
1,614.8
1,928.2
1,351.0
772.8*
850.2*
943.0*
698.1*
598.1
824.5
-70.7
135.5*
-123.3
118.2*
-2.6
-3.9
25.1
11.0
44.2
-3.9
-20.0
15.2
41.3
96.5*
685.6
525.6*
24.9
92.7
117.9
115.3
16.9
28.5
120.4
85.1
56.9
76.3
64.9
-.5
7.1
.0
-1.5
2.2
405.5
204.1*
- 5 6 . 7 -105.0*
199.3
97.2*
24.6
73.7
28.9
28.8
135.0 -33.2*
10.8
27.8
263.0
211.9*
-28.0
-5.3
3.9
23.0
137.9
95.1
13.5
17.9
44.6
19.1
-1.9
-.7*
50.5
-2.4
44.2
33.0
-1.8
32.2
636.2
150.9*
109.6*
-2.7
36.8
7.2
-23.0
140.7*
581.7*
38.6
146.9
19.0
72.7
13.3
56.7
-.4
3.2
304.5*
-75.8*
185.4*
66.9
16.4
74.1*
28.0
194.9*
-16.0
-38.5
123.7*
9.4
3.8*
2.6
73.0
45.2
-8.4
-62.3*
-99.7*
-2.0
46.5
-7.1
-26.7
78.1*
953.9*
73.0
101.6
15.7
148.0
123.5
5.2
16.4
3.0
615.5*
-42.6*
217.8*
85.1
-2.8
99.9*
35.6
440.4*
4.0
28.9
156.9*
8.7
8.5*
-.3
180.3
62.6
-9.3
92.1*
72.5*
-1.0
36.9
-16.3
-13.1
87.5*
531.5*
71.7*
98.4
48.3
73.3
66.0
4.8
-.6
3.0
239.9*
-16.1*
157.8
103.7
8.3
8.4
37.4
98.2*
24.0
-12.8
119.2*
13.1
-26.1*
-.1
-90.2
53.6
17.3
-140.8
-124.7
-3.7
-1.8
-10.5
-24.1
73.2
689.8
14.6
133.6
44.5
86.4
100.4
-12.5
-4.3
2.9
410.7
-28.2
291.4
122.1
8.9
118.0
42.4
147.5
-34.0
-20.8
130.2
8.9
-65.0
2.9
79.5
46.7
-.9
-118.1
-134.6
-3.0
14.3
5.1
-27.8
89.5
880.9
144.1
-6.1
32.6
153.4
142.0
-.7
9.5
2.6
556.8
-17.1
175.5
108.0
10.6
11.1
45.9
398.3
-22.8
31.7
193.4
13.0
51.8
.8
66.7
49.4
14.4
850.2*
943.0*
698.1*
598.1
824.5
-8.5
5.1
.2
-7.7
27.3
29.8
257.4*
278.5*
51.1*
82.3*
174.1* -142.7*
200.4*
93.5*
-83.6
-37.8*
-52.9
-84.2
-22.4* -32.9*
89.6
-67.1
43.0
-14.2
235.2*
217.7*
80.7*
58.1*
82.8
5.5
57.8
37.5
6.5
9.9
4.0*
-33.2*
-55.4
-35.2
210.9*
209.0*
3.4
.3
51.4
340.7
17.7
-8.2
25.0
-158.9
1.9
-37.7
180.3
-18.8
240.9
51.2
39.7
27.3
9.6
3.6
-10.1
233.2
-3.5
.4
41.0
199.8
54.9
247.2
232.2
-54.2
-17.5
66.8
17.6
2.4
357.5
104.4
38.3
42.5
11.3
-7.2
35.8
355.1
1,798.4 1,367.6* 1,731.2* 2,057.7* 1,422.3*
1,598.7
2,302.0
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
55
Other financial sources
Official foreign exchange
Treasury currency and special drawing rights
Life insurance reserves
Pension fund reserves
Interbank claims
Deposits at financial institutions
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Foreign deposits
Mutual fund shares
Corporate equities
Security credit
Trade debt
Taxes payable
Noncorporate proprietors' equity
Investment in bank personal trusts
Miscellaneous
56 Total financial sources
Floats not included in assets ( - )
57 U . S . government checkable deposits
58 Other checkable deposits
59 Trade credit
60
61
62
63
64
Liabilities not identified as assets ( - )
Treasury currency
Interbank claims
Security repurchase agreements
Taxes payable
Miscellaneous
65 Total identified to sectors as assets
1. Data in this table also appear in the Board's Z . l (780) quarterly statistical
release, tables F.6 and F.7. For ordering address, see inside front cover.
1,501.3 1,644.7*
1,505.2 1,602.7*
772.8*
3.5
-6.5
.1
.3
33.8
22.7
129.0*
194.4*
25.7*
36.9*
-.7
6.3*
86.4
110.8*
-40.1
-81.8
-72.9 -109.9
26.7*
44.4
8.1
103.7
-43.2
-26.6
174.4
199.5*
64.6*
99.9*
-66.7
-4.9
79.8
56.5
8.5
6.1
-25.8*
12.3*
20.2
40.2
93.1*
272.6*
11.3
13.8
25.0
-9.5
2.0
11.3
4.4
-11.7
44.0*
-3.6
2.3
5.7
.1
-1.8
-21.8
6.2
-1.4
8.7
-.3*
8.2
-26.7
-7.6
-60.5*
-.2*
-18.2
84.1
7.0
-62.9*
-.2*
-5.3
43.5*
23.8
11.9*
-.1
-.6
23.4*
3.7
49.9*
-.2
9.3
155.2
-11.2
29.5
-.2
-.3
25.4
23.2
-31.0
1,830.2 1,404.4* 1,717.6* 1,947.4* 1,341.6*
1,439.5
2,271.5
2. Excludes corporate equities and mutual fund shares,
Flow of Funds
A43
1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING 1
Billions of dollars, end of period
1989
1990
1991
1993*
1992
1991
Transaction category or sector
1992
Q4
Q2
Ql
Q3
Q4
Ql
Q2
11,823.0
11,979.2
Nonfinancial sectors
1 Total credit market debt owed by
domestic nonfinancial sectors
10,054.3
10,692.0
By lending sector and instrument
2 U.S. government
3 Treasury securities
4
Agency issues and mortgages
2,251.2
2,227.0
24.2
2,498.1
2,465.8
32.4
2,776.4
2,757.8
18.6
3,080.3
3,061.6
18.8
2,776.4
2,757.8
18.6
2,859.7
2,844.0
15.8
2,923.3
2,907.4
15.9
2,998.9
2,980.7
18.1
3,080.3
3,061.6
18.8
3,140.2
3,120.6
19.6
3,201.2
3,180.6
20.6
5 Private
7,803.1
8,193.9
8,384.3
8,666.5r
8,384.3
8,429.4*
8,503.7*
8,581.5*
8,666.5*
8,682.9
8,777.9
11,160.6 11,746.9*
11,160.6 11,289.2* 11,427.0* 11,580.3* 11,746.9*
6
7
8
9
10
11
12
n
14
n
16
By instrument
Tax-exempt obligations
Corporate bonds
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Consumer credit
Bank loans n.e.c
Commercial paper
Other loans
1,004.7
961.1
3,512.8
2,380.5
304.3
747.6
80.5
799.5
750.8
107.1
667.0
1,062.1
1,008.2
3,715.4
2,580.6
305.5
750.8
78.4
813.0
747.8
116.9
730.6
1,131.6
1,086.9
3,880.4
2,746.6
303.0
751.7
79.1
799.9
701.0
98.5
685.9
1,197.3
1,154.2
4,001.9*
2,922.7*
291.9
706.5*
80.7*
809.2
695.6*
107.1
701.2*
1,131.6
1,086.9
3,880.4
2,746.6
303.0
751.7
79.1
799.9
701.0
98.5
685.9
1,145.5
1,106.0
3,918.1*
2,791.8*
305.9
740.3*
80.2*
777.6
685.5*
110.4
686.2*
1,163.7
1,125.4
3,941.5*
2,825.6*
301.7*
733.8
80.4*
776.9
694.0*
112.0
690.1*
1,186.4
1,140.8
3,979.7*
2,880.8*
298.9*
719.4
80.6*
784.5
686.2*
108.2
695.8*
1,197.3
1,154.2
4,001.9*
2,922.7*
291.9
706.5*
80.7*
809.2
695.6*
107.1
701.2*
1,210.0
1,172.9
4,017.9
2,945.8
290.3
701.1
80.8
793.7
683.0
114.6
690.8
1,225.7
1,189.2
4,057.6
2,996.0
287.1
693.8
80.8
802.3
691.9
125.0
686.2
17
18
19
20
21
22
By borrowing sector
Household
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
State and local government
3,371.4
3,615.7
134.4
1,199.6
2,281.7
816.1
3,594.8
3,728.5
134.9
1,219.0
2,374.6
870.5
3,762.7
3,688.7
134.8
1,192.3
2,361.6
932.8
3,978.0*
3,6%. 3*
136.3*
1,154.5*
2,405.5*
992.2
3,762.7
3,688.7
134.8
1,192.3
2,361.6
932.8
3,782.6
3,701.5*
133.6*
1,187.6*
2,380.3*
945.3
3,837.3*
3,705.4*
137.0*
1,177.3*
2,391.1*
961.0
3,900.0*
3,698.3*
137.9*
1,165.1*
2,395.3*
983.1
3,978.0*
3,696.3*
136.3*
1,154.5*
2,405.5*
992.2
3,982.2
3,693.6
133.5
1,144.2
2,415.9
1,007.1
4,046.8
3,708.0
136.8
1,138.3
2,432.9
1,023.2
261.2
285.1
298.9
313.8
298.9
288.7
304.7
312.9
313.8
324.8
333.1
94.1
21.4
63.0
82.7
115.4
18.5
75.3
75.8
129.5
21.6
81.8
66.0
146.9
23.9
77.7
65.4
129.5
21.6
81.8
66.0
130.8
22.0
70.5
65.5
136.2
25.5
77.4
65.6
141.3
26.5
80.7
64.4
146.9
23.9
77.7
65.4
165.8
24.3
72.3
62.5
173.4
25.9
72.1
61.7
10,315.5
10,977.1
12,147.9
12,312.3
23 Foreign credit market debt held in
United States
24
25
26
27
Bonds
Bank loans n.e.c
Open market paper
U.S. government loans
28 Total credit market debt owed by nonfinandal
sectors, domestic and foreign
11,459.5 12,060.7*
11,459.5 11,577.9* 11,731.8* 11,893.2* 12,060.7*
Financial sectors
29 Total credit market debt owed by
financial sectors
32
33
34
35
36
37
38
39
By instrument
U.S. government-related
Government-sponsored enterprises
securities
Mortgage pool securities
Loans from U.S. government
Private
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper
Loans from Federal Home Loan Banks
40
41
42
43
44
45
46
47
48
49
50
51
52
By borrowing sector
Government-sponsored enterprises
Federally related mortgage pools
Private financial sectors
Commercial banks
Bank affiliates
Funding corporations
Savings institutions
Credit unions
Life insurance companies
Finance companies
Mortgage companies
Real estate investment trusts (REITs)
Securitized credit obligation (SCO) issuers...
30
31
2,362.7
2,559.4
2,709.7
2,928.5*
2,709.7
2,751.2
2,805.7*
2,877.4*
2,928.5*
2,961.7
2,997.3
1,247.8
1,418.4
1,564.2
1,720.0
1,564.2
1,590.3
1,641.6
1,683.5
1,720.0
1,755.8
1,774.5
373.3
869.5
5.0
1,114.8
509.1
4.0
50.9
409.1
141.8
393.7
1,019.9
4.9
1,140.9
549.9
4.3
52.0
417.7
117.1
402.9
1,156.5
4.8
1,145.6
606.6
5.1
69.1
385.7
79.1
443.1
1,272.0
4.8
1,208.5*
665.0*
5.1
64.2
394.3
79.9
402.9
1,156.5
4.8
1,145.6
606.6
5.1
69.1
385.7
79.1
405.7
1,179.8
4.8
1,160.9
613.8
5.0
72.7
393.2
76.3
417.8
1,219.0
4.8
1,164.1*
628.6
5.0*
63.1
390.5
76.9
434.7
1,244.0
4.8
1,193.9*
646.4*
5.1*
67.5*
394.6
80.2
443.1
1,272.0
4.8
1,208.5*
665.0*
5.1
64.2
394.3
79.9
451.2
1,299.8
4.8
1,205.9
680.0
5.4
56.9
378.7
85.0
468.4
1,301.3
4.8
1,222.9
693.9
6.0
55.8
375.1
92.1
378.3
869.5
1,114.8
77.4
142.5
125.4
169.2
.0
.0
350.4
11.3
11.4
227.3
398.5
1,019.9
1,140.9
76.7
114.8
137.9
139.1
.0
.0
374.4
7.3
12.4
278.3
407.7
1,156.5
1,145.6
65.0
112.3
124.3
94.6
.0
.0
393.0
13.0
14.0
329.4
447.9
1,272.0
1,208.5*
73.8
114.6
135.2*
87.8
.0
.0
389.4
13.0
14.1
380.5*
407.7
1,156.5
1,145.6
65.0
112.3
124.3
94.6
.0
.0
393.0
13.0
14.0
329.4
410.5
1,179.8
1,160.9
63.8
115.0
137.6
89.8
.0
.0
382.2
19.8
14.4
338.2
422.6
1,219.0
1,164.1*
66.2
112.7
144.9*
87.6
.0
.0
377.4
11.0
14.8*
349.5
439.5
1,244.0
1,193.9*
69.0
114.4
143.0*
89.2
.0
.0
382.7
14.6
15.3*
365.7*
447.9
1,272.0
1,208.5*
73.8
114.6
135.2*
87.8
.0
.0
389.4
13.0
14.1
380.5*
456.0
1,299.8
1,205.9
73.1
119.9
127.1
90.3
.0
.0
379.1
10.4
13.7
392.3
473.2
1,301.3
1,222.9
76.6
120.2
128.9
93.4
.1
.2
369.8
14.4
14.4
404.9
15,109.5
15,309.6
4,891.2
1,210.0
2,018.7
4,023.3
793.7
764.3
565.5
843.0
4,970.9
1,225.7
2,056.4
4,063.7
802.3
773.6
572.2
844.8
All sectors
53 Total credit market debt, domestic and foreign..
54
55
56
57
58
59
60
61
U.S. government securities
Tax-exempt securities
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans
12,678.2
13,536.5
14,169.3 14,989.2*
3,494.1
1,004.7
1,564.3
3,516.8
799.5
823.0
579.2
896.5
3,911.7
1,062.1
1,673.5
3,719.7
813.0
818.3
609.9
928.4
4,795.5
1,197.3
1,966.1*
4,007.0*
809.2
783.7*
579.0
851.3*
1. Data in this table also appear in the Board's Z.l
release, tables L.2 through L.4. For ordering address,
4,335.7
1,131.6
1,823.1
3,885.5
799.9
791.7
565.9
835.8
(780) quarterly statistical
see inside front cover.
14,169.3 14,329.1* 14,537.5* 14,770.6* 14,989.2*
4,335.7
1,131.6
1,823.1
3,885.5
799.9
791.7
565.9
835.8
4,445.2
1,145.5
1,850.5
3,923.2*
777.6
780.2*
574.1
832.8*
4,560.1
1,163.7
1,890.2
3,946.6*
776.9
782.7*
579.9
837.4*
4,677.6
1,186.4
1,928.5*
3,984.8*
784.5
780.2*
583.6
845.1*
4,795.5
1,197.3
1,966.1*
4,007.0*
809.2
783.7*
579.0
851.3*
A44
DomesticNonfinancialStatistics • February 1994
1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1
Billions of dollars except as noted, end of period
1992
1991
Transaction category or sector
1989
1990
1991
1993*
1992
Q4
Q1
Q2
Q3
Q4
Q1
Q2
CREDIT MARKET DEBT OUTSTANDING2
1 Total credit market assets
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
Private domestic nonfinancial sectors
Households
Nonfarm noncorporate business
Nonfinancial corporate business
State and local governments
U.S. government
Foreign
Financial sectors
Government-sponsored enterprises
Federally related mortgage pools
Monetary authority
Commercial banking
U.S. commercial banks
Foreign banking offices
Bank holding companies
Banks in U . S . affiliated areas
Private nonbank finance
Thrift institutions
Insurance
Life insurance companies
Other insurance companies
Private pension funds
State and local government retirement f u n d s . . .
Finance n.e.c
Finance companies
Mortgage companies
Mutual funds
Closed-end funds
Money market funds
Real estate investment trusts (REITs)
Brokers and dealers
Asset-backed securities (ABSs)
Bank personal trusts
12,678.2
2,096.4
1,326.8
56.5
181.2
531.9
205.4
778.7
9,597.7
355.4
869.5
233.3
2,647.4
2,371.9
242.3
16.2
17.1
5,491.9
1,475.4
2,320.7
1,022.0
317.5
590.2
390.9
1,695.9
468.6
22.6
307.2
37.1
291.8
8.4
142.9
219.3
198.0
13,536.5 14,169.3 14,989.2 r
14,169.3 14,329.1* 14,537.5* 14,770.6* 14,989.2*
15,109.5
15,309.6
2,205.8 2,290.7 r
1,380.0 1,436.0*
50.7
48.3
180.1
216.4
595.1
590.0
247.0
235.1
936.2 l,031.1 r
10,780.3 11,432.2*
397.7
466.7*
1,156.5 1,272.0
272.5
300.4
2,856.8 2,951.6
2,506.0 2,575.7
319.2
335.8
17.5
11.9
19.7
22.5
6,0%.7 6,441.5*
1,197.3 1,140.9*
2,708.0 2,872.5*
1,199.6 1,282.0
376.3
389.0
692.7
730.0*
439.4
471.6
2,191.5 2,428.0*
484.9
486.6
25.9
26.1
450.5
574.2*
52.4
64.6
402.7
404.1
6.8
7.4
226.9
267.1
318.1
366.7
223.3
231.2
2,205.8 2,211.4* 2,233.1* 2,221.6* 2,290.7*
1,380.0 1,388.9* 1,395.2* 1,381.1* 1,436.0*
48.7
48.3
50.7
49.3
48.1
199.5
216.4
180.1
180.0
192.6
590.0
595.1
593.3
5%.6
592.9
251.2
239.2
235.1
247.0
246.3
960.4*
936.2
995.6* 1,015.1* 1,031.1*
10,780.3 10,906.0* 11,062.5* 11,294.7* 11,432.2*
466.7*
397.7
419.9
429.0
446.3
1,156.5 1,179.8
1,244.0
1,272.0
1,219.0
300.4
272.5
271.8
282.6
285.2
2,856.8 2,864.5 2,887.6 2,928.2
2,951.6
2,575.7
2,506.0 2,517.3 2,525.2
2,560.0
319.2
313.3
328.2
328.9
335.8
17.5
17.5
11.9
13.6
13.1
19.7
20.2
21.8
22.5
21.0
6,0%.7 6,170.1* 6,244.3* 6,391.0* 6,441.5*
1,197.3 1,172.0* 1,154.1* 1,145.1* 1,140.9*
2,708.0 2,736.6* 2,787.4* 2,841.7* 2,872.5*
1,199.6 1,222.3
1,243.6
1,264.7
1,282.0
376.3
383.5
387.6
386.9
389.0
692.7
684.4*
730.0*
702.9*
727.9*
439.4
446.3
453.3
462.2
471.6
2,191.5 2,261.5 2,302.8* 2,404.1* 2,428.0*
479.5
480.5
484.9
477.8
486.6
25.9
31.7
22.1
29.3
26.1
574.2*
450.5
478.8
510.2*
550.2*
52.4
56.8
59.2
61.3
64.6
402.7
408.2*
404.1
424.0
412.0*
6.8
7.5
7.4
7.4
6.8
226.9
267.1
226.3
244.6
289.6
366.7
318.1
326.3
337.6
353.3
223.3
231.3
229.2
226.9
231.2
2,247.6
1,405.4
47.0
208.6
586.5
229.5
1,040.9
11,591.6
464.1
1,299.8
303.6
2,960.9
2,594.6
326.7
16.4
23.3
6,563.2
1,131.2
2,950.2
1,317.3
391.2
759.5
482.2
2,481.8
473.7
20.9
611.4
66.9
404.5
8.1
287.0
378.4
231.0
2,200.2
1,348.0
46.3
216.3
589.6
223.4
1,063.3
11,822.8
499.2
1,301.3
318.2
3,003.2
2,633.8
327.1
18.4
23.9
6,700.9
1,128.0
2,999.2
1,349.5
393.8
762.2
493.7
2,573.6
473.5
28.8
659.9
70.1
404.0
8.3
303.6
390.7
234.6
13,536.5 14,169.3 14,989.2* 14,169.3 14,329.1* 14,537.5* 14,770.6* 14,989.2*
15,109.5
15,309.6
54.5
53.9
24.6
447.0
4,509.1
109.9
4,885.9
1,092.2
2,261.2
398.3
556.6
443.5
134.1
1,134.6
225.1
982.3
81.3
625.0
3,082.3
24.7
457.2
4,570.4
118.5
4,934.2
1,169.1
2,242.3
389.9
549.9
448.3
134.7
1,225.8
234.7
991.2
79.8
635.6
3,149.3
2,246.8
1,454.6
54.9
175.8
561.5
239.1
897.5
10,153.1
371.8
1,019.9
241.4
2,772.5
2,466.7
270.8
13.4
21.6
5,747.4
1,324.6
2,473.7
1,116.5
344.0
607.4
405.9
1,949.1
497.0
14.6
360.2
37.1
372.7
7.7
177.9
269.1
212.9
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
35 Total credit market debt
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
Other liabilities
Official foreign exchange
Treasury currency and special drawing rights
certificates
Life insurance reserves
Pension fund reserves
Interbank claims
Deposits at financial institutions
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Foreign deposits
Mutual fund shares
Security credit
Trade debt
Taxes payable
Investment in bank personal trusts
Miscellaneous
54 Total liabilities
12,678.2
53.6
61.3
55.4
23.8
354.3
3,356.1
32.4
4,736.7
888.6
2,277.4
603.4
428.1
396.5
142.8
566.2
133.9
904.2
81.8
503.2
2,591.1
26.3
380.0
3,400.3
64.0
4,836.8
932.8
2,336.3
537.7
498.4
372.3
159.4
602.1
137.4
936.4
77.4
509.9
2,732.4
26.3
405.7
4,056.5
65.2
4,885.2
1,008.5
2,353.0
476.9
539.6
355.8
151.3
813.9
188.9
926.7
68.9
5%.7
2,884.3
51.8
24.5
434.1
4,369.8*
114.0*
4,892.1
1,131.0
2,292.2
397.2
543.6
389.4
138.8
1,042.1*
217.3
984.7
76.6
619.1
3,056.2*
55.4
26.3
405.7
4,056.5
65.2
4,885.2
1,008.5
2,353.0
476.9
539.6
355.8
151.3
813.9
188.9
926.7
68.9
5%.7
2,884.3
52.7
26.3
414.2
4,048.2*
63.0*
4,878.6
984.3
2,351.3
459.2
572.0
367.0
144.7
860.4
194.6
938.0
73.1
612.9
2,899.7*
54.4
26.4
419.8
4,105.0*
68.5*
4,870.6*
1,032.9*
2,325.8
427.5
556.9*
393.5
133.9
924.4*
193.3
950.0
70.7
612.7
2,957.3*
55.4
26.5
426.7
4,228.5*
101.3*
4,909.3*
1,072.0*
2,303.7
418.4
552.9*
417.6
144.6
%5.6*
214.5
970.5
74.5
610.9
3,027.6*
51.8
24.5
434.1
4,369.8*
114.0*
4,892.1
1,131.0
2,292.2
397.2
543.6
389.4
138.8
1,042.1*
217.3
984.7
76.6
619.1
3,056.2*
26,015.5 27,300.7 29,143.0 30,871.4* 29,143.0 29,390.8* 29,790.7* 30,381.7* 30,871.4* 31,271.1 31,784.9
Financial assets not included in liabilities (+)
55 Gold and special drawing rights
56 Corporate equities
57 Household equity in noncorporate business
21.0
3,812.9
2,508.1
22.0
3,543.7
2,440.6
22.3
4,869.4
2,344.6
19.6
5,540.6
2,266.6*
22.3
4,869.4
2,344.6
22.0
4,925.6
2,351.4*
22.7
4,837.0
2,335.3*
23.2
4,995.4
2,313.9*
19.6
5,540.6
2,266.6*
19.8
5,721.3
2,237.6
20.0
5,741.9
2,237.4
Floats not included in assets ( - )
58 U.S. government checkable deposits
59 Other checkable deposits
60 Trade credit
6.1
26.5
-148.6
15.0
28.9
-146.0
3.8
30.9
-144.1
6.8
32.5
-121.9*
3.8
30.9
-144.1
.9
29.5
-142.7
1.4
32.6
-151.1
4.0
23.3
-144.2*
6.8
32.5
-121.9*
3.4
27.2
-132.1
3.5
29.6
-141.8
-4.3
-31.0
13.7
20.6
-210.7
-4.1
-32.0
-17.7
17.8
-213.4
-4.8
-4.2
-12.5
15.5
-254.6
-4.9*
-8.4
18.6
22.2*
-251.3*
-4.8
-4.2
-12.5
15.5
-254.6
-4.8*
-1.8
-4.8
7.3*
-280.6*
-4.9
-4.0
19.6
13.1*
-282.1*
-4.9*
-4.3
33.1*
18.1*
-267.7*
-4.9*
-8.4
18.6
22.2*
-251.3*
-5.0
-5.2
71.8
12.4
-279.4
-5.0
-3.9
82.4
21.9
-274.6
61
62
63
64
65
Liabilities not identified as assets ( - )
Treasury currency
Interbank claims
Security repurchase agreements
Taxes payable
Miscellaneous
66 Total identified to sectors as assets
32,685.1 33,658.6 36,749.2 39,004.7* 36,749.2 37,086.8* 37,361.0* 38,056.8* 39,004.7* 39,556.7 40,072.2
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical
release, tables L.6 and L.7. For ordering address, see inside front cover.
2. Excludes corporate equities and mutual fund shares,
Selected Measures
A45
2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures
Monthly data seasonally adjusted, and indexes 1987=100, except as noted
1993
Measure
1990
1991
1992
Mar.
Apr.
May
June
July
Aug. r
Sept.
Oct.
Nov.
1 Industrial production 1
106.0
104.1
106.5
110.1
110.4
110.2
110.5
110.8
111.0
111.4
112.2
113.2
Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
105.5
107.0
103.4
112.1
101.2
106.8
103.1
105.3
102.8
108.9
96.5
105.5
105.6
108.2
105.2
112.7
97.6
107.9
109.5
112.7
108.6
118.7
99.6
110.9
109.6
112.8
108.1
119.7
100.0
111.5
109.3
112.5
107.3
119.9
99.7
111.6
109.4
112.7
107.3
120.4
99.4
112.1
110.0
113.2
107.7
121.2
100.4
112.0
110.3
113.5
107.8
121.6
100.6
112.2
110.7
lM.O 1
107.9
122.8r
100.4r
112.6r
111.4r
115.0 r
109. l r
123.5 r
100.4r
113.4r
112.4
116.0
110.0
124.8
101.2
114.3
106.1
103.7
106.9
110.8
111.4
111.3
111.3
111.6
111.9
112.4r
113.2r
114.4
2
3
4
5
6
7
Industry groupings
8 Manufacturing
9 Capacity utilization, manufacturing
(percent) 2
r
82.2
81.1
77.8
78.8
80.6
80.9
80.7
80.6
80.7
80.8
81.1
81.5
95.3
89.7
96.8 r
94.0
94.0
91.0
104.0
98.0
99.0
101.0
103.0
105.0
11 Nonagricultural employment, total 4
Goods-producing, total
12
Manufacturing, total
13
Manufacturing, production workers . . .
14
15
Service-producing
16 Personal income, total
17
Wages and salary disbursements
18
Manufacturing
^
Disposable personal income
19
6
20 Retail sales
107.3
101.2
100.6
100.2
109.8
122.9
121.4
113.4
123.1
120.2
106.2
96.6
97.1
96.3
109.3
127.6
124.5
113.7
128.6
121.3
106.4
94.9
95.8
95.3
110.0
135.3
131.5
117.8
136.8
127.1
107.5
93.3
94.4
94.4
112.0
139.1
131.6
114.2
140.8
130.5
107.7
93.1
94.0
94.0
112.4
141.1
135.7
118.8
142.5
133.0
107.9
93.2
93.8
93.8
112.6
141.5
136.8
118.4
142.8
133.9
108.0
93.0
93.5
93.5
112.8
141.3
136.5
118.0
142.6
134.6
108.2
93.0
93.5
93.5
113.1
141.l r
137.2r
118.2
142.3r
135.2
108.2
92.8
93.3
93.2
113.1
142.9
138.2
118.6
144.1
136.2
108.4
92.8
93.2
93.2
113.4r
143.1
138.0
119.1
144.4r
136.5r
108.5
92.9
93.2
93.4 r
113.5
144.1
138.7
119.1
145.4
139.<F
108.7
93.2
93.4
93.7
113.7
145.0
139.2
119.9
146.4
139.5
Prices7
21 Consumer (1982-84= 100)
22 Producer finished goods (1982=100)
130.7
119.2
136.2
121.7
140.3
123.2
143.6
124.7
144.0
125.5
144.2
125.8
144.4
125.5
144.4
125.3
144.8
124.3
145.1
123.9
145.7
124.7
145.8
124.4
10 Construction contracts 3
1. A major revision of the industrial production index and the capacity
utilization rates was released in April 1990. See "Industrial Production: 1989
Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April
1990), pp. 187-204.
2. Ratio of index of production to index of capacity. Based on data from the
Federal Reserve, DRI McGraw-Hill, U.S. Department of Commerce, and other
sources.
3. Index of dollar value of total construction contracts, including residential,
nonresidential, and heavy engineering, from McGraw-Hill Information Systems
Company, F.W. Dodge Division.
4. Based on data from U.S. Department of Labor, Employment and Earnings.
Series covers employees only, excluding personnel in the armed forces.
5. Based on data from U.S. Department of Commerce, Survey of Current
Business.
2.11
6. Based on data from U.S. Department of Commerce, Survey of Current
Business.
7. Based on data not seasonally adjusted. Seasonally adjusted data for changes
in the price indexes can be obtained from the U.S. Department of Labor, Bureau
of Labor Statistics, Monthly Labor Review.
NOTE. Basic data (not indexes) for series mentioned in notes 4, 5,and 6, and
indexes for series mentioned in notes 3 and 7 can also be found in the Survey of
Current Business.
Figures for industrial production for the latest month are preliminary, and many
figures for the three months preceding the latest month have been revised. See
"Recent Developments in Industrial Capacity and Utilization," Federal Reserve
Bulletin, vol. 76 (June 1990), pp. 411-35. See also "Industrial Production Capacity
and Capacity Utilization since 1987," Federal Reserve Bulletin, vol. 79, (June
1993), pp. 590-605.
LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT
Thousands of persons; monthly data seasonally adjusted except as noted
1993
Category
1990
1991
1992
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
194,618
194,767
194,933
195,104
195,275
195,453
195,626
195,791
129,541
128,070
129,852
128,370
129,457
127,975
130,189
128,714
130,103
128,633
HOUSEHOLD SURVEY DATA
1 Noninstitutional population 1
1
189,686
191,329
193,142
7 Labor force
Civilian labor force
3
126,424
124,787
126,867
125,303
128,548
126,982
128,833
127,341
129,615
128,131
129,604
128,127
4
5
114,728
3,186
114,644
3,233
114,391
3,207
115,356
3,060
116,203
3,070
116,195
3,024
116,262
3,039
116,729
2,980
116,362
3,095
116,936
2,991
117,243
3,138
6,874
5.5
63,262
8,426
6.7
64,462
9,384
7.4
64,594
8,925
7.0
65,785
8,858
6.9
65,152
8,908
7.0
65,329
8,769
6.8
65,563
8,661
6.7
65,423
8,517
6.7
65,996
8,786
6.8
65,437
8,252
6.4
65,688
109,419
108,256
108,519
109,820
110,058
110,101
110,338
110,305
110,502r
110,649 r
110,857
17,718
592
4,593
5,690
25,902
6,602
30,381
18,827
r
17,710"'
595r
4,625
5,693 r
25,959 r
6,634
30,529"
18,904r
17,740
594
4,652
5,705
25,953
6,661
30,634
18,918
Nonagricultural industries
Agriculture
Unemployment
6
Number
7
Rate (percent of civilian labor force)
8 Not in labor force
ESTABLISHMENT SURVEY DATA
9 Nonagricultural payroll employment 3
10
11
17.
13
14
15
16
17
Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Finance
Service
Government
19,117
709
5,120
5,793
25,774
6,709
27,934
18,304
18,455
689
4,650
5,762
25,365
6,646
28,336
18,402
18,192
631
4,471
5,709
25,391
6,571
29,053
18,653
1. Persons sixteen years of age and older, including Resident Armed Forces.
Monthly figures are based on sample data collected during the calendar week that
contains the twelfth day; annual data are averages of monthly figures. By
definition, seasonality does not exist in population figures.
2. Includes self-employed, unpaid family, and domestic service workers.
3. Includes all full- and part-time employees who worked during, or received
17,863
600
4,517
5,720
25,758
6,585
29,977
18,800
17,827
602
4,577
5,719
25,827
6,588
30,099
18,819
17,771
5%
4,574
5,711
25,861
6,590
30,175
18,823
17,760
595
4,593
5,709
25,916
6,604
30,320
18,841
17,698
596
4,592 r
5,692 r
25,953 r
6,616 r
30,433 r
18,922r
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 Domestic Nonfinancial Statistics • February 1994
2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1
Seasonally adjusted
1992
1993
1992
1993
1992
1993
Series
Q4
Ql
Q2
Q3r
Output (1987=100)
Q4
Ql
Q3
Q2
Capacity (percent of 1987 output)
04
Ql
Q2
Q3 r
Capacity utilization rate (percent) 2
1 Total industry
108.3
109.7
110.4
111.1
134.2
134.8
135.3
135.9
80.7
81.4
81.6
2 Manufacturing
108.7
110.4
111.3
112.0
136.6
137.2
137.8
138.5
79.6
80.5
80.8
80.9
Primary processing 3
Advanced processing
104.7
110.6
106.4
112.3
107.2
113.2
107.8
114.0
126.6
141.3
126.8
142.1
127.1
142.9
127.4
143.7
82.7
78.3
83.9
79.0
84.3
79.2
84.6
79.3
5
6
7
8
9
10
11
12
13
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Nonelectrical machinery
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment .
110.8
98.5
101.5
105.0
96.7
132.4
124.0
111.4
113.6
99.7
105.0
109.1
99.3
137.1
127.1
120.6
114.8
97.3
104.8
109.1
98.8
144.2
129.6
117.6
116.0
100.0
105.8
111.7
97.7
150.1
133.7
111.5
142.6
112.5
125.0
129.9
118.2
162.1
152.6
154.5
143.4
112.6
124.9
129.8
118.1
163.7
154.1
155.8
144.1
112.7
124.9
130.0
117.9
165.5
155.7
156.8
144.9
112.9
124.9
130.1
117.7
167.3
157.3
157.7
77.7
87.6
81.2
80.8
81.8
81.7
81.2
72.1
79.2
88.5
84.1
84.1
84.1
83.8
82.5
77.4
79.7
86.3
83.9
84.0
83.8
87.1
83.2
75.0
80.1
88.6
84.7
85.8
83.0
89.7
85.0
70.7
97.7
95.7
93.2
91.3
135.8
135.7
135.5
135.4
72.0
70.5
68.8
67.5
14
15
16
17
18
19
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
106.1
105.2
107.9
116.9
106.6
104.2
106.5
106.2
110.0
116.9
111.7
104.2
107.0
106.1
113.1
118.3
113.1
103.9
107.0
106.8
112.1
118.8
111.9
103.1
129.1
116.7
122.1
143.5
128.8
116.2
129.6
116.9
122.5
144.4
129.5
115.9
130.1
117.1
122.9
145.4
130.5
115.7
130.6
117.3
123.3
146.3
131.5
115.4
82.1
90.1
88.4
81.4
82.8
89.7
82.2
90.8
89.8
80.9
86.2
89.9
82.3
90.6
92.0
81.4
86.7
89.8
82.0
91.0
90.9
81.2
85.1
89.3
97.9
114.7
114.3
96.5
116.0
115.2
97.2
113.8
114.7
96.4
116.7
117.4
112.0
131.8
128.5
111.7
132.2
129.0
111.5
132.5
129.4
111.3
132.9
129.9
87.4
87.1
89.0
86.3
87.8
89.3
87.2
85.9
88.6
86.7
87.8
90.4
1973
1975
Previous cycle 2
High
Low
High
3
4
20 Mining
21 Utilities
Electric
22
Low
Latest cycle 3
1992
Low
Nov.
High
81.8
1993
June
July
Aug/
Sept/
Oct/
Nov.P
Capacity utilization rate (percent) 2
1 Total industry
99.0
82.7
87.3
71.8
84.8
78.3
80.8
81.5
81.7
81.7
81.9
82.4
83.0
2 Manufacturing
99.0
82.7
87.3
70.0
85.1
76.6
79.7
80.6
80.7
80.8
81.1
81.5
82.2
Primary processing 3
Advanced processing 4
99.0
99.0
82.7
82.7
89.7
86.3
66.8
71.4
89.1
83.3
77.9
76.1
83.0
78.4
84.5
78.9
84.5
79.2
84.8
79.2
84.4
79.6
84.7
80.2
85.5
80.8
5
6
7
8
9
10
11
12
13
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Nonelectrical machinery
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment.
99.0
99.0
99.0
99.0
99.0
99.0
99.0
99.0
82.7
82.7
82.7
82.7
82.7
82.7
82.7
82.7
86.9
87.6
102.4
110.4
90.5
92.1
89.4
93.0
65.0
60.9
46.8
38.3
62.2
64.9
71.1
44.5
83.9
93.3
92.9
95.7
88.9
83.7
84.9
84.5
73.8
76.8
74.3
72.3
75.9
73.0
76.8
57.9
77.8
88.7
81.2
79.7
83.5
82.0
81.5
71.1
79.4
85.5
84.6
85.3
83.6
87.5
83.3
72.7
79.8
87.8
84.3
86.0
81.8
89.1
84.4
70.0
79.9
88.6
85.0
86.1
83.3
89.6
84.8
69.7
80.6
89.3
84.7
85.3
83.8
90.4
85.7
72.3
81.3
90.7
84.9
86.2
83.0
90.9
86.4
78.1
82.3
91.7
85.1
86.2
83.5
91.8
87.3
83.2
99.0
82.7
81.1
66.9
88.3
78.1
72.0
67.7
67.9
67.5
67.0
66.2
65.4
14
15
16
17
18
19
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
99.0
99.0
99.0
99.0
99.0
99.0
82.7
82.7
82.7
82.7
82.7
82.7
87.0
91.7
94.2
85.1
90.9
89.5
76.9
73.8
82.0
70.1
63.4
68.2
86.8
92.1
94.9
85.9
97.0
88.5
80.4
78.7
86.0
78.5
75.5
84.2
82.4
90.8
88.6
82.1
83.6
89.4
82.3
91.4
92.8
81.7
86.7
89.9
82.0
91.8
90.9
81.3
85.0
88.7
82.1
91.5
91.7
81.4
85.6
88.7
81.7
89.8
90.2
80.8
84.7
90.4
81.8
90.6
90.3
80.5
82.2
91.4
92.2
80.5
92.7
94.1
99.0
99.0
99.0
82.7
82.7
82.7
96.6
88.3
88.3
80.6
76.2
78.7
87.0
92.6
94.8
86.8
83.4
87.4
87.4
87.1
88.8
87.9
86.6
89.2
86.5
88.1
91.1
85.8
88.6
91.5
87.7
86.7
88.5
88.1
86.8
88.6
88.0
87.0
88.9
3
4
20 Mining
21 Utilities
22
Electric
1. Data in this table also appear in the Board's G.17 (419) monthly statistical
release. For ordering address, see inside front cover. For a detailed description of
the series, see "Recent Developments in Industrial Capacity and Utilization,"
Federal Reserve Bulletin, vol. 76 (June 1990), pp. 411-35. See also "Industrial
Production Capacity and Capacity Utilization Since 1987," Federal Reserve
Bulletin, vol. 79, (June 1993), pp. 590-605.
2. Capacity utilization is calculated as the ratio of the Federal Reserve's
seasonally adjusted index of industrial production to the corresponding index of
capacity.
3. Primary processing includes textiles; lumber; paper; industrial chemicals;
petroleum refining; rubber and plastics; stone, clay, and glass; and primary and
fabricated metals.
4. Advanced processing includes food, tobacco, apparel, furniture, printing,
chemical products such as drugs and toiletries, leather and products, machinery,
transportation equipment, instruments, miscellaneous manufacturing, and ordnance.
5. Monthly highs, 1978 through 1980; monthly lows, 1982.
6. Monthly highs, 1988-89; monthly lows, 1990-91.
Selected Measures
2.13 INDUSTRIAL PRODUCTION
Monthly data seasonally adjusted
Group
1987
proportion
A47
Indexes and Gross Value1
1993
1992
1992
avg.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug/
Sept/
Oct/
NOV.p
Index (1987 = 100)
MAJOR MARKETS
100.0
106.5
108.4
108.9
109.3
109.9
110.1
110.4
110.2
110.5
110.8
111.0
111.4
112.2
113.2
2 Products
3
Final products
4
Consumer goods, total
5
Durable consumer goods
Automotive products
6
7
Autos and trucks
8
Autos, consumer
Trucks, consumer
9
10
Auto parts and allied g o o d s . . .
Other
11
12
Appliances, A/C, and TV
13
Carpeting and furniture
14
Miscellaneous home goods . . .
15
Nondurable consumer goods
16
Foods and tobacco
Clothing
17
18
Chemical products
19
Paper products
20
Energy
Fuels
21
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
105.6
108.2
105.2
102.5
99.4
96.9
79.0
127.9
103.7
105.2
110.4
99.9
105.6
105.9
104.7
95.0
118.7
100.8
108.3
104.7
109.6
107.8
111.0
107.1
105.7
104.1
102.9
79.6
143.3
106.0
107.1
110.8
103.7
107.1
107.5
105.2
95.9
123.3
100.9
112.0
107.7
113.6
108.2
111.5
107.5
107.9
108.7
111.7
86.9
154.6
103.8
107.2
110.5
105.4
106.6
107.4
104.8
96.0
121.7
100.9
114.4
106.1
117.5
108.5
111.9
107.6
110.9
112.7
116.8
86.6
169.1
105.8
109.3
116.0
105.5
108.0
106.7
104.6
95.7
122.4
100.2
109.5
106.5
110.7
109.2
112.4
108.5
111.3
111.9
114.6
90.2
156.9
107.4
110.7
117.6
106.7
109.5
107.7
105.5
95.0
121.1
101.8
115.5
108.9
118.0
109.5
112.7
108.6
111.5
111.2
113.4
90.5
153.1
107.5
111.7
125.0
104.5
108.9
107.7
104.3
94.6
123.7
102.1
116.0
107.1
119.5
109.6
112.8
108.1
112.2
112.1
114.3
90.2
155.9
108.5
112.3
124.3
106.2
109.6
106.9
103.9
94.9
123.1
101.7
111.5
106.6
113.4
109.3
112.5
107.3
110.8
109.7
110.1
86.5
150.9
109.1
111.8
121.1
108.9
108.4
106.3
104.3
94.2
122.6
101.8
107.4
106.5
107.7
109.4
112.7
107.3
107.9
105.3
105.0
83.5
142.3
105.8
110.2
116.1
109.1
107.6
107.2
104.7
94.6
123.0
102.6
110.4
105.8
112.2
110.0
113.2
107.7
108.6
103.3
100.3
78.2
138.6
108.4
113.2
127.3
109.9
107.4
107.4
104.9
93.6
124.0
101.3
112.9
105.0
116.0
110.3
113.5
107.8
107.9
103.0
99.2
71.8
146.7
109.3
112.2
123.8
108.3
108.1
107.8
105.5
93.3
123.8
100.8
114.7
104.0
118.9
110.7
114.0
107.9
109.3
105.6
104.1
75.4
153.9
108.1
112.6
126.3
107.3
108.2
107.5
105.6
92.5
124.0
100.8
112.9
108.2
114.7
111.4
115.0
109.1
113.6
112.9
114.9
85.2
166.4
109.7
114.2
131.1
108.9
107.9
107.8
106.2
92.3
123.0
100.5
114.8
114.0
115.2
112.4
116.0
110.0
116.9
119.2
124.9
95.4
176.0
109.6
114.9
131.0
109.7
109.1
108.0
106.6
92.1
122.7
100.8
115.5
115.1
115.6
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
112.7
123.2
134.7
168.3
108.5
137.1
117.9
104.7
85.9
78.3
99.7
116.7
129.0
142.9
184.5
112.0
140.4
123.9
110.7
83.2
86.4
118.5
117.2
129.6
143.2
186.4
112.3
144.1
131.4
109.2
82.5
91.2
128.6
118.1
131.2
144.4
192.0
113.1
146.7
136.7
112.6
82.0
89.0
129.4
118.0
131.7
146.1
198.0
112.2
146.5
136.8
113.4
81.5
77.9
127.1
118.7
133.4
149.1
203.3
113.7
145.0
135.8
114.9
80.7
71.1
116.2
119.7
134.8
150.6
209.5
115.0
145.0
136.2
117.5
80.5
72.4
114.9
119.9
135.4
153.5
216.5
115.0
142.5
133.1
116.2
79.5
75.1
112.1
120.4
136.1
155.7
221.0
115.6
138.0
127.2
117.6
78.6
82.4
113.6
121.2
137.1
158.2
226.5
117.2
133.2
118.9
119.6
78.6
81.0
118.5
121.6
137.6
158.8
232.0
117.3
132.5
119.6
121.9
78.0
87.8
116.2
122.8
139.3
161.2
236.4
117.8
135.3
126.5
122.9
77.5
90.5
120.6
123.5
140.4
161.6
241.0
117.7
141.2
139.6
123.8
76.9
88.6
127.7
124.8
142.3
163.8
247.0
118.3
145.9
150.5
124.3
76.7
85.7
34
35
36
Intermediate products, total
Construction supplies
Business supplies
14.7
6.0
8.7
97.6
93.8
100.1
98.1
95.1
100.0
98.3
94.5
100.8
98.2
94.8
100.5
99.3
97.5
100.5
99.6
96.4
101.8
100.0
96.4
102.5
99.7
97.7
101.0
99.4
96.8
101.1
100.4
98.4
101.7
100.6
98.7
101.8
100.4
99.3
101.2
100.4
99.6
101.0
101.2
100.8
101.5
37 Materials
38
Durable goods materials
39
Durable consumer parts
Equipment parts
40
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
10.9
7.2
3.7
107.9
108.9
101.5
116.5
106.0
108.3
110.9
102.8
109.9
114.2
110.4
103.4
99.7
110.6
109.3
111.1
104.3
119.3
107.4
109.8
112.0
103.4
110.2
115.6
112.0
103.9
100.2
111.1
110.0
111.9
107.5
119.7
107.5
108.8
111.5
102.9
110.7
114.6
111.3
105.1
101.3
112.4
110.4
113.3
110.8
120.4
108.6
110.4
112.4
104.2
110.7
114.9
114.1
103.4
100.4
109.1
110.9
114.2
111.8
121.0
109.7
113.2
112.1
103.2
111.9
114.6
112.5
103.8
98.3
114.6
110.9
114.1
112.2
121.3
108.9
109.9
112.8
104.2
112.8
115.6
112.6
103.5
97.4
115.4
111.5
114.9
112.6
122.7
109.5
110.3
113.8
102.7
115.3
116.1
114.2
103.4
99.9
110.3
111.6
114.8
111.6
123.5
109.2
111.1
114.1
104.3
114.1
117.2
113.6
103.4
101.6
106.8
112.1
114.9
110.2
124.1
109.4
111.3
114.8
104.9
115.9
118.6
112.3
104.6
100.9
111.7
112.0
115.4
109.8
124.9
110.2
111.3
114.2
105.9
113.4
117.3
114.0
103.7
98.2
114.5
112.2
115.8
110.3
126.2
109.7
109.7
115.2
105.6
113.5
119.5
114.2
102.8
96.7
114.9
112.6
117.0
111.4
128.0
110.3
110.2
113.8
102.9
112.7
118.0
113.3
103.3
98.7
112.4
113.4
118.0
114.9
129.5
110.0
110.8
114.2
103.7
112.0
118.4
114.3
104.0
99.0
113.6
114.3
119.4
118.6
130.6
110.6
110.7
115.5
105.7
115.0
119.1
114.7
103.8
98.8
113.7
97.3
95.3
106.6
106.6
108.4
108.4
108.6
108.6
108.9
108.7
109.5
109.3
109.7
109.6
110.1
109.9
110.0
109.8
110.4
110.3
110.9
110.9
111.1
111.1
111.4
111.3
111.9
111.6
112.6
112.2
97.5
105.0
106.6
107.1
107.3
107.8
107.8
108.0
107.7
107.8
108.1
108.1
108.4
109.1
110.0
24.5
23.3
105.7
104.8
107.4
106.6
107.3
106.8
107.0
107.4
108.1
107.7
108.2
107.7
107.6
107.6
107.1
107.3
107.5
107.0
108.2
107.1
108.4
107.0
108.2
107.3
108.7
108.4
109.0
109.4
12.7
123.7
129.5
129.5
130.7
131.3
133.2
134.6
135.6
136.8
138.7
139.1
140.4
140.5
141.6
12.0
28.4
115.7
109.5
119.7
111.4
120.1
111.8
121.0
113.0
120.6
113.6
121.6
113.7
122.2
114.6
121.8
114.6
121.8
114.9
122.1
115.1
121.7
115.6
122.9
116.0
123.5
116.9
124.7
118.2
1 Total index
SPECIAL AGGREGATES
51 Total excluding autos and trucks
52 Total excluding motor vehicles and p a r t s . . .
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
A48
Domestic Nonfinancial Statistics • February 1994
2.13 INDUSTRIAL PRODUCTION
Group
SIC
code 2
1987
proportion
Indexes and Gross Value1—Continued
1992
1993
1992
avg.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug/
Sept/
Oct/
Nov."
Index (1987 = 100)
MAJOR INDUSTRIES
59 Total index
100.0
106.5
108.4
108.9
109.3
109.9
110.1
110.4
110.2
110.5
110.8
111.0
111.4
112.2
113.2
60 Manufacturing
61 Primary processing..
62 Advanced processing
84.3
27.1
57.1
106.9
103.8
108.3
108.9
105.1
110.7
109.2
105.0
111.3
109.9
105.8
111.9
110.5
106.9
112.2
110.8
106.4
112.9
111.4
107.1
113.4
111.3
107.1
113.3
111.3
107.5
113.0
111.6
107.6
113.5
111.9
108.0
113.7
112.4
107.6
114.7
113.2
108.1
115.6
114.4
109.2
116.8
63
64
65
66
Durable goods
Lumber and p r o d u c t s . . .
"'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
34
products
Industrial and commercial
machinery and
35
computer equipment .
Office and computing
357
machines
36
Electrical machinery
Transportation
37
equipment
Motor vehicles and
371
parts
Autos and light
trucks
Aerospace and miscellaneous transportation equipment... 372-6,9
38
Instruments
39
Miscellaneous
46.5
2.1
1.5
108.1
96.4
99.0
110.9
99.8
102.3
111.8
98.0
103.9
112.9
99.3
105.2
113.8
101.8
106.0
114.1
98.0
107.3
115.0
98.1
108.8
114.9
97.4
108.4
114.6
96.5
109.5
115.4
99.1
111.1
115.7
99.9
111.1
116.9
100.9
111.3
118.2
102.4
111.4
119.8
103.7
112.4
2.4
3.3
1.9
.1
1.4
96.0
101.1
104.7
101.2
96.1
97.6
101.6
103.6
102.8
98.7
98.0
102.4
107.4
104.6
95.7
97.0
102.8
107.0
103.4
97.1
98.9
108.0
112.9
105.9
101.4
98.6
104.2
107.6
102.0
99.4
99.8
104.4
108.4
102.6
98.9
99.6
104.2
108.1
105.1
98.9
100.5
105.7
110.9
106.8
98.5
100.8
105.3
111.9
108.2
96.3
100.9
106.2
112.1
106.2
98.0
102.4
105.8
111.1
105.3
98.6
101.3
106.1
112.3
106.7
97.6
102.6
106.3
112.3
5.4
96.7
97.6
97.8
99.8
99.7
100.3
101.4
100.6
100.1
101.2
101.0
101.1
101.6
102.2
8.5
124.8
132.8
133.8
135.0
136.7
139.6
142.8
144.2
145.4
148.5
149.9
151.8
153.1
155.2
2.3
6.9
168.3
119.8
184.5
124.4
186.4
124.8
192.0
125.8
198.0
127.1
203.3
128.5
209.5
129.0
216.5
129.7
221.0
130.1
226.5
132.3
232.0
133.5
236.4
135.4
241.0
136.9
247.0
138.7
9.9
102.6
103.6
106.3
108.4
107.8
106.9
106.9
105.5
102.6
100.8
100.4
102.1
106.1
109.5
4.8
104.8
109.9
116.2
120.9
120.7
120.1
120.4
118.1
114.3
110.1
110.0
114.3
123.7
132.0
2.2
101.4
105.4
114.4
118.2
117.8
116.9
117.5
113.1
108.2
102.8
104.0
109.2
120.8
131.7
5.1
5.1
1.3
100.6
104.2
109.7
97.7
103.6
111.4
97.1
103.3
111.8
96.7
103.0
110.9
95.8
102.2
111.9
94.6
103.3
112.6
94.2
102.6
114.3
93.7
102.5
113.1
91.8
102.5
112.1
92.0
102.8
112.3
91.3
101.3
112.5
90.6
101.8
114.3
89.5
101.2
113.6
88.4
100.5
114.3
Nondurable goods
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
Printing and publishing..
Chemicals and products.
Petroleum products
Rubber and plastic
products
Leather and products . . .
'20
21
22
23
26
27
28
29
37.8
8.8
1.0
1.8
2.3
3.6
6.5
8.8
1.3
105.4
106.0
99.2
104.7
92.3
108.2
95.0
115.0
102.0
106.4
106.4
101.9
106.0
92.9
108.2
94.2
117.7
103.9
106.0
106.2
96.1
106.0
92.7
108.3
94.7
116.7
103.4
106.4
105.9
100.5
106.9
93.1
108.6
94.7
116.8
103.2
106.4
106.9
99.3
106.2
92.5
110.4
94.0
116.2
104.7
106.6
106.7
92.4
105.4
92.1
111.1
94.7
117.6
104.7
106.9
106.7
90.2
104.2
92.0
113.1
95.6
117.8
104.3
106.9
106.7
92.1
106.9
91.2
112.1
94.7
118.1
103.6
107.2
107.1
89.1
107.1
91.1
114.2
94.5
119.1
103.9
107.0
107.2
91.5
107.7
90.7
112.0
93.8
118.7
102.5
107.3
107.8
92.7
107.4
90.6
113.1
93.4
119.1
102.4
106.9
107.7
94.6
105.4
89.5
111.3
93.7
118.5
104.3
107.1
108.3
95.9
106.4
89.1
111.6
93.6
118.4
106.9
107.7
108.6
95.9
107.4
88.9
114.0
93.9
118.6
108.4
30
31
3.2
.3
109.7
92.6
111.3
96.6
111.3
96.7
113.6
97.1
112.7
99.0
112.9
99.1
113.6
100.1
113.8
98.2
112.8
97.0
114.7
96.8
114.8
97.0
113.9
98.2
113.5
98.8
114.9
98.8
"lO
11,12
13
14
8.0
.3
1.2
5.8
.7
97.6
161.7
105.5
92.6
93.8
97.8
171.6
103.5
92.8
94.4
98.2
158.1
107.9
93.4
92.6
98.3
167.7
108.2
92.7
93.8
95.9
163.0
101.7
90.9
95.2
95.3
158.2
102.3
90.4
93.4
96.4
162.5
108.2
90.5
92.3
97.3
169.3
106.4
91.6
94.0
98.0
164.4
106.7
93.1
91.7
96.4
167.7
101.0
91.6
93.2
95.5
148.2
95.9
92.4
94.7
97.5
157.0
103.9
93.0
95.0
98.0
161.7
105.5
93.1
94.4
97.7
161.9
102.1
93.2
96.2
49i,3PT
492,3PT
7.7
6.1
1.6
112.0
111.6
113.2
114.7
114.1
117.3
116.8
116.4
118.2
112.8
112.9
112.4
117.5
116.5
121.4
117.8
116.3
123.3
114.4
114.5
113.9
112.1
114.0
104.9
114.9
115.6
112.2
116.9
118.1
112.4
117.7
118.9
113.3
115.3
115.1
116.0
115.6
115.4
116.4
116.0
115.8
116.4
79.5
107.0
108.8
108.8
109.3
109.8
110.2
110.8
110.9
111.1
111.7
112.0
112.3
112.6
113.3
81.9
105.1
106.7
107.0
107.6
108.0
108.1
108.6
108.3
108.1
108.3
108.5
108.9
109.6
110.6
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92 Mining
93 Metal
94 Coal
95 Oil and gas extraction
96
Stone and earth minerals . .
97 Utilities
98 Electric
99 Gas
98! 1
SPECIAL AGGREGATES
100 Manufacturing excluding
motor vehicles and
parts
101 Manufacturing excluding
office and computing
machines
Gross value (billions of 1987 dollars, annual rates)
MAJOR MARKETS
102 Products, total
1,707.0 1,806.4 1,846.7 1,857.5 1,864.9 1,880.2 1,880.3 1,882.8 1,872.6 1,873.2 1,877.4 1,879.3 1,890.0 1,913.4 1,938.1
103 Final
104 Consumer goods
105 Equipment
106 Intermediate
1,314.6 1,420.1 1,457.1 1,466.8 1,476.4 1,485.7 1,484.3 1,485.6 1,477.9 1,477.5 1,479.0 1,480.5 1,492.0 1,515.6 1,536.9
866.6
913.0
931.6
936.3
940.0 949.4
946.1
943.6 936.1
935.5
935.5
935.6
940.1
957.1
970.0
448.0
507.1
525.5
530.5
536.5
536.3
538.2
541.9
541.8
541.9
543.4
544.9
551.9
558.5
566.9
392.5
386.4
389.6
390.7
388.4
394.5
396.0
397.3
394.7
395.7
398.4
398.8
398.1
397.8
401.2
1. Data in this table also appear in the Board's G.17 (419) monthly statistical
release. For ordering address, see inside front cover.
A revision of the industrial production index and the capacity utilization rates
was released in May 1993. See "Industrial Production, Capacity, and Capacity
Utilization since 1987," Federal Reserve Bulletin, vol. 79 (June 1993), pp. 590-605.
2. Standard industrial classification.
Selected Measures
A49
2.14 HOUSING AND CONSTRUCTION
Monthlyfiguresat seasonally adjusted annual rates except as noted
1993
Item
1990
1991
1992
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.*
Sept.*
Oct.
Private residential real estate activity (thousands of units except as noted)
NEW UNITS
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 sold
of dollars)
16 Median
17 Average
...
1,111
794
317
1,193
895
298
711
449
262
1,308
966
342
188
949
754
195
1,014
840
174
606
434
173
1,091
838
253
171
1,095
911
184
1,200
1,030
169
612
473
140
1,158
964
194
210
1,157
972
185
1,171
1,051
120
641
506
135
1,136
980
156
267
1,141
957
184
1,180
1,036
144
641
508
133
1,241
1,049
192
262
1,034
871
163
1,124
987
137
635
502
133
1,108
995
113
247
1,101
925
176
1,206
1,059
147
637
506
131
1,222
1,075
147
241
1,121
919
202
1,248
1,107
141
645
515
130
1,129
987
142
230
1,115
925
190
1,248
1,079
169
649
517
132
1,158
987
171
237
1,162
977
185
1,232
1,064
168
658
527
131
1,088
947
141
241
1,242
1,015
227
1,328
1,183
145
662
534
128
1,256
1,078
178
245
1,271
1,047
224
1,371
1,166
205
679
544
135
1,167
1,037
130
251
1,304
1,097
207
1,378
1,214
164
687
554
133
1,239
1,070
169
261
535
321
507
284
610
265
603
266
597
268
602
270
689
271
629
274
641
274
647r
276
632
288
726
290
679
297
122.3
149.0
120.0
147.0
121.3
144.9
118.0
138.9
129.4
149.4
125.0
146.6
127.0
148.4
129.9
152.3
124.5
145.7
123.9*
143.4*
126.6
148.6
128.0
148.1
121.0
145.5
3,211
3,219
3,520
3,780
3,460
3,370
3,450
3,620
3,680
3,860
3,810
3,940
4,090
95.2
118.3
99.7
127.4
103.6
130.8
103.1
129.4
103.6
129.6
105.1
131.5
105.8
133.0
106.5
132.8
109.3
137.4
108.5
136.0
109.0
135.8
107.2
133.7
106.6
133.0
460,680
465,294
467,140
474,071
485,847
339,839
205,654
134,185
20,047
42,394
25,070
46,674
343,382
208,137
135,245
21,186
42,179
24,503
47,377
350,346
214,568
135,778
20,282
43,039
24,826
47,631
127,302
2,363
35,292
5,865
83,782
130,689
2,151
39,147
5,894
83,497
135,501
2,291
40,913
6,716
85,581
(thousands
EXISTING UNITS (one-family)
18 Number sold
Price of units sold
of dollars)
19 Median
20 Average
(thousands
Value of new construction (millions of dollars) 3
CONSTRUCTION
21 Total put in place
442,142
403,439
436,043
451,271
453,820
454,465
449,054
453,256
2.2 Private
23
Residential
Nonresidential
24
25
Industrial buildings
26
Commercial buildings
27
Other buildings
Public utilities and other
28
334,681
182,856
151,825
23,849
62,866
21,591
43,519
293,536
157,837
135,699
22,281
48,482
20,797
44,139
317,256
187,820
129,436
20,720
41,523
21,494
45,699
335,484
207,214
128,270
19,600
41,414
21,123
46,133
334,801
205,730
129,071
20,484
42,317
21,564
44,706
336,972
205,519
131,453
22,152
41,323
21,484
46,494
328,150
197,317
130,833
19,458
42,426
22,568
46,381
332,231
198,380
133,851
20,091
42,428
23,293
48,039
335,028
200,496
134,532
19,316
42,723
23,849
48,644
336,714
203,869
132,845
19,780
41,660
23,808
47,597
29 Public
30
Military
31
Highway
Conservation and d e v e l o p m e n t . . .
32
Other
33
107,461
2,664
32,108
4,557
68,132
109,900
1,837
32,026
4,861
71,176
118,784
2,502
34,929
5,918
75,435
115,786
2,621
30,648
5,732
76,785
119,019
2,703
33,009
6,688
76,619
117,493
2,586
33,413
7,112
74,382
120,904
2,533
34,534
5,875
77,962
121,025
2,393
34,320
6,019
78,293
125,652
2,234
37,649
6,103
79,666
128,581
2,386
37,056
6,017
83,122
1. Not at annual rates.
2. Not seasonally adjusted.
3. Recent data on value of new construction may not be strictly comparable
with data for previous periods because of changes by the Bureau of the Census in
its estimating techniques. For a description of these changes, see Construction
Reports (C-30-76-5), issued by the Census Bureau in July 1976.
SOURCE. Bureau of the Census estimates for all series except (1) mobile homes,
which are private, domestic shipments as reported by the Manufactured Housing
Institute and seasonally adjusted by the Census Bureau, and (2) sales and prices
of existing units, which are published by the National Association of Realtors. All
back and current figures are available from the originating agency. Permit
authorizations are those reported to the Census Bureau from 17,000 jurisdictions
beginning in 1984.
A50
Domestic Nonfinancial Statistics • February 1994
2.15 CONSUMER AND PRODUCER PRICES
Percentage changes based on seasonally adjusted data except as noted
Change from 12
months earlier
Item
Change from 3 months earlier
(annual rate)
1992
1992
Nov.
Change from 1 month earlier
Index
level,
Nov.
1993 1
19931
1993
1993
Nov.
Mar.
Dec.
June
Sept.
July
Aug.
Sept.
Oct.
Nov.
CONSUMER PRICES2
(1982-84=100)
1 All items
3.0
2.7
3.2
4.0
2.2
1.4
.1
.3
.0
.4
.2
145.8
2 Food
3 Energy items
4 All items less food and energy
5
Commodities
Services
6
1.5
2.7
3.4
2.5
3.9
2.6
-.8
3.1
1.6
3.7
1.4
1.9
3.8
1.5
4.7
2.6
3.1
4.3
4.6
4.4
1.4
-3.8
2.9
.6
4.1
1.7
-3.4
1.9
-.3
2.7
.0
.0
.1
.0
.2
.3
-.5
.3
.3
.3
.1
-.4
.1
-.4
.2
.6
1.9
.3
.3
.3
.4
-1.3
.3
.2
.3
141.9
103.7
153.9
136.4
163.9
7 Finished goods
8
Consumer foods
9
Consumer energy
10
Other consumer goods
11
Capital equipment
1.4
.3
.4
2.2
1.8
.3
2.7
-2.8
-.6
1.8
-.3
3.3
-10.2
1.2
.6
4.3
-1.6
16.6
3.2
4.4
.0
1.6
-3.0
.6
.3
-1.9
4.2
-7.4
-5.9
2.2
.0
-.2
.2
.7
.0
.0
.0
-.2
-.5
1.3
-.5
-.4
.0
.8
-2.7
.3
.2
124.4
126.7
76.2
137.5
132.5
Intermediate
materials
12 Excluding foods and feeds
13
Excluding energy
1.0
1.1
1.0
1.5
-2.1
-.3
5.7
4.7
.3
.0
-.3
.6
-.2
.0
.1
.0
-.1
.0
-.3
.1
116.3
124.1
Crude materials
14 Foods
15 Energy
16 Other
1.3
3.2
3.0
6.5
-9.8
11.3
5.1
-17.8
1.9
1.9
-10.1
24.3
-1.9
17.5
11.5
12.6
-26.5
-8.5
.1
-1.2
.0
-1.5
4.9
.9
3.8
-3.8
1.7
109.5
75.6
141.4
PRODUCER PRICES
(1982=100)
1. Not seasonally adjusted.
2. Figures for consumer prices are for all urban consumers and reflect a
rental-equivalence measure of homeownership.
.r
,4r
i.r
—7.3r
•7r
-.6
.5
-1.0*
— 1.6r
.2
.0
.2
1.8*
1.1*
-2.9*
SOURCE. U.S. Department of Labor, Bureau of Labor Statistics.
Selected Measures
A51
2.16 GROSS DOMESTIC PRODUCT AND INCOME
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1993
1992
Account
1990
1991
1992
Q3
Q4
Ql
Q2
Q3 r
GROSS DOMESTIC PRODUCT
5,546.1
5,722.9
6,038.5
6,059.5
6,194.4
6,261.6
6,327.6
6,395.9
3,761.2
468.2
1,229.2
2,063.8
3,906.4
457.8
1,257.9
2,190.7
4,139.9
497.3
1,300.9
2,341.6
4,157.1
500.9
1,305.7
2,350.5
4,256.2
516.6
1,331.7
2,407.9
4,296.2
515.3
1,335.3
2,445.5
4,359.9
531.6
1,344.8
2,483.4
4,419.1
541.9
1,352.4
2,524.8
808.9
802.0
586.7
201.6
385.1
215.3
736.9
745.5
555.9
182.6
373.3
189.6
796.5
789.1
565.5
172.6
392.9
223.6
802.2
792.5
569.2
170.8
398.4
223.3
833.3
821.3
579.5
171.1
408.3
241.8
874.1
839.5
594.7
172.4
422.2
244.9
874.1
861.0
619.1
177.6
441.6
241.9
884.0
876.3
624.9
179.1
445.8
251.3
6.9
3.8
-8.6
-8.6
7.3
2.3
9.7
4.4
12.0
9.5
34.6
33.0
13.1
16.8
7.7
22.6
-71.4
557.1
628.5
-19.6
601.5
621.1
-29.6
640.5
670.1
-38.8
641.1
679.9
-38.8
654.7
693.5
-48.3
651.3
699.6
-65.1
660.0
725.0
-71.9
653.2
725.1
17 Government purchases of goods and services
18
Federal
State and local
19
1,047.4
426.5
620.9
1,099.3
445.9
653.4
1,131.8
448.8
683.0
1,139.1
452.8
686.2
1,143.8
452.4
691.4
1,139.7
442.7
697.0
1,158.6
447.5
711.1
1,164.8
443.6
721.2
By major type of product
20 Final sales, total
21
Goods
Durable
22
23
Nondurable
24
Services
25
Structures
5,539.3
2,178.4
933.6
1,244.8
2,849.5
511.5
5,731.6
2,227.0
934.3
1,292.8
3,032.7
471.9
6,031.2
2,305.5
975.8
1,329.6
3,221.1
504.7
6,049.9
2,308.6
978.4
1,330.2
3,239.3
501.9
6,182.5
2,365.6
1,008.3
1,357.3
3,296.1
520.8
6,227.1
2,362.9
1,003.5
1,359.3
3,341.8
522.4
6,314.5
2,395.0
1,037.8
1,357.1
3,388.1
531.5
6,388.2
2,401.7
1,032.9
1,368.8
3,437.8
548.7
6.9
-2.1
9.0
-8.6
-12.9
4.3
7.3
2.1
5.3
9.7
5.7
4.0
12.0
-1.2
13.2
34.6
15.0
19.5
13.1
2.7
10.4
7.7
14.8
-7.2
4,897.3
4,861.4
4,986.3
4,998.2
5,068.3
5,078.2
5,102.1
5,138.3
30 Total
4,491.0
4,598.3
4,836.6
4,800.8
4,975.8
5,038.9
5,104.0
5,143.2
31 Compensation of employees
32
Wages and salaries
33
Government and government enterprises
34
Other
Supplement to wages and salaries
35
36
Employer contributions for social insurance
37
Other labor income
3,297.6
2,745.0
516.0
2,229.0
552.5
278.3
274.3
3,402.4
2,814.9
545.3
2,269.6
587.5
290.6
296.9
3,582.0
2,953.1
567.5
2,385.6
629.0
306.3
322.7
3,603.6
2,970.7
569.7
2,401.0
632.9
306.9
326.0
3,658.6
3,015.8
574.2
2,441.6
642.8
311.3
331.5
3,705.1
3,054.3
584.1
2,470.2
650.7
312.2
338.5
3,750.6
3,082.7
586.3
2,496.3
668.0
321.4
346.6
3,793.9
3,115.4
592.8
2,522.6
678.5
323.8
354.7
38 Proprietors' income 1
Business and professional
39
40
Farm 1
363.3
321.4
41.9
376.4
339.5
36.8
414.3
370.6
43.7
408.1
371.3
36.8
431.2
383.6
47.6
444.1
388.4
55.7
439.4
392.4
47.0
422.5
397.6
24.8
41 Rental income of persons 2
-14.2
-12.8
-8.9
-18.5
-1.2
7.5
12.7
13.7
42 Corporate profits 1
43
Profits before tax 3
44
Inventory valuation adjustment
45
Capital consumption adjustment
380.6
365.7
-11.0
25.9
369.5
362.3
4.9
2.2
407.2
395.4
-5.3
17.1
367.5
357.9
-7.8
17.4
439.5
409.9
4.9
24.7
432.1
419.8
-12.7
25.1
458.1
445.6
-12.2
24.7
468.5
443.8
1.0
23.8
46 Net interest
463.7
462.8
442.0
440.1
447.7
450.1
443.2
444.6
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
Residential structures
11
12
13
Change in business inventories
Nonfarm
14 Net exports of goods and services
15
Exports
16
Imports
26 Change in business inventories
27
Durable goods
28
Nondurable goods
MEMO
29 Total GDP in 1987 dollars
NATIONAL INCOME
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
Domestic Nonfinancial Statistics • February 1994
2.17 PERSONAL INCOME AND SAVING
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1993
1992
Account
1990
1991
1992
Q3
Q4
Q1
Q2
Q3R
5,139.8
5,328.3
5,254.7
5,373.2
5,412.7
3,115.4
769.4
581.5
714.4
1,038.8
592.8
354.7
422.5
397.6
24.8
13.7
159.0
695.7
918.5
439.4
PERSONAL INCOME AND SAVING
4,673.8
1 Total personal income
2 Wage and salary disbursements
3
Commodity-producing industries
Manufacturing
4
5
Distributive industries
6
Service industries
7
Government and government enterprises
8
9
10
11
12
13
14
15
16
17
Other labor income
Proprietors' income 1
Business and professional 1
Farm 1
Rental income of persons 2
Dividends
Personal interest income
Transfer payments
Old-age survivors, disability, and health insurance benefits . . .
LESS: Personal contributions for social insurance
18 EQUALS: Personal income
4,850.9
5,144.9
2,745.0
745.7
555.6
635.1
848.3
515.9
2,815.0
738.1
557.2
648.0
883.5
545.4
2,973.1
756.5
577.6
682.0
967.0
567.5
2,970.7
751.6
573.3
682.5
966.8
569.7
3,095.8
783.3
602.0
709.9
1,028.4
574.2
2,974.3
740.7
559.7
682.9
966.6
584.1
3,082.7
765.1
580.3
709.1
1,022.2
586.3
274.3
363.3
321.4
41.9
-14.2
144.4
698.2
687.6
352.0
296.9
376.4
339.5
36.8
-12.8
127.9
715.6
769.9
382.3
322.7
414.3
370.6
43.7
-8.9
140.4
694.3
858.4
413.9
326.0
408.1
371.3
36.8
-18.5
144.9
692.2
866.1
416.6
331.5
431.2
383.6
47.6
-1.2
152.3
694.5
877.4
420.8
338.5
444.1
388.4
55.7
7.5
157.0
695.4
894.4
433.1
346.6
439.4
392.4
47.0
12.7
157.8
693.1
905.5
435.0
224.9
237.8
249.3
249.8
253.3
256.6
264.5
266.8
4,673.8
4,850.9
5,144.9
5,139.8
5,328.3
5,254.7
5,373.2
5,412.7
623.3
620.4
644.8
642.8
670.7
657.1
681.0
689.0
20 EQUALS: Disposable personal income
4,050.5
4,230.5
4,500.2
4,497.0
4,657.6
4,597.5
4,692.2
4,723.7
21
LESS: Personal outlays
3,880.6
4,029.0
4,261.5
4,277.3
4,377.9
4,419.7
4,483.6
4,544.0
22 EQUALS: Personal saving
170.0
201.5
238.7
219.6
279.7
177.9
208.7
179.7
19,593.0
13,093.0
14,101.0
19,237.9
12,895.2
13,965.0
19,518.0
13,080.9
14,219.0
19,536.7
13,097.8
14,169.0
19,754.1
13,240.9
14,490.0
19,744.4
13,234.2
14,163.0
19,785.4
13,311.6
14,326.0
19,868.8
13,416.2
14,341.0
4.2
4.8
5.3
4.9
6.0
3.9
4.4
3.8
27 Gross saving
722.7
733.7
717.8
727.0
718.8
762.0
766.7
774.3
28 Gross private saving
861.1
929.9
986.9
1,016.5
969.4
1,024.8
988.3
988.7
29 Personal saving
30 Undistributed corporate profits 1
31 Corporate inventory valuation adjustment
170.0
88.5
-11.0
201.5
102.3
4.9
238.7
110.4
-5.3
219.6
82.3
-7.8
279.7
121.7
4.9
177.9
103.7
-12.7
208.7
116.3
-12.2
179.7
129.3
1.0
Capital consumption
32 Corporate
33 Noncorporate
368.2
234.5
383.2
242.8
396.6
261.3
410.3
304.3
396.5
251.5
402.2
261.0
405.2
258.1
414.0
265.7
Federal
State and local
-138.4
-163.5
25.1
-196.2
-203.4
7.3
-269.1
-276.3
7.2
-289.5
-290.7
1.2
-250.6
-264.2
13.5
-262.8
-263.5
.8
-221.5
-222.6
1.1
-214.4
-212.7
-1.7
37 Gross investment
730.4
743.3
741.4
742.7
750.9
796.5
778.7
787.6
38 Gross private domestic
39 Net foreign
808.9
-78.5
736.9
6.4
796.5
-55.1
802.2
-59.4
833.3
-82.4
874.1
-77.6
874.1
-95.4
884.0
-96.4
7.8
9.6
23.6
15.7
32.1
34.4
12.0
13.3
19
LESS: Personal tax and nontax payments
MEMO
Per capita (1987 dollars)
23 Gross domestic product
24 Personal consumption expenditures
25 Disposable personal income
26 Saving rate (percent)
GROSS SAVING
allowances
34 Government surplus, or deficit ( - ) , national income and
35
36
40 Statistical discrepancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
SOURCE. U.S. Department of Commerce, Survey of Current
Business.
Summary Statistics
3.10 U.S. INTERNATIONAL TRANSACTIONS
A53
Summary
Millions of dollars; quarterly data seasonally adjusted except as noted1
1993
1992
Item credits or debits
1 Balance on current account
2
Merchandise trade balance 2
Merchandise exports
3
4
Merchandise imports
Military transactions, net
5
6
Other service transactions, net
Investment income, net
7
8
U.S. government grants
9
U.S. government pensions and other transfers
10
Private remittances and other transfers
11 Change in U.S. government assets other than official
reserve assets, net (increase, - )
1990
1991
1992
Q3
Q4
Ql
Q2 r
Q3 P
-22,308
-29,309
111,530
-140,839
-145
14,769
-37
-3,242
-978
-3,366
-27,172
-34,384
113,118
-147,502
-226
14,685
47
-2,730
-979
-3,585
-27,986
-36,279
111,912
-148,191
-341
14,448
1,748
-2,970
-976
-3,616
-91,861
-109,033
389,303
-498,336
-7,834
38,485
20,348
-17,434
-2,934
-13,459
-8,324
-73,802
416,937
-490,739
-5,851
51,733
13,021
24,073
-3,461
-14,037
-66,400
—96,138
440,138
-536,276
-2,751
59,163
6,222
-14,688
-3,735
-14,473
-17,775
-27,612
109,493
-137,105
-617
15,898
1,703
-2,783
-940
-3,424
-23,687
-25,962
113,992
-139,954
-836
14,265
-806
-5,883
-846
-3,619
2,307
2,905
-1,609
-305
-737
535
-275
-86
12 Change in U.S. official reserve assets (increase, - )
Gold
13
14
Special drawing rights (SDRs)
15
Reserve position in International Monetary Fund
Foreign currencies
16
-2,158
0
-192
731
-2,697
5,763
0
-177
-367
6,307
3,901
0
2,316
-2,692
4,277
1,952
0
-173
-118
2,243
1,542
0
2,829
-2,685
1,398
-983
0
-140
-228
-615
822
0
-166
313
675
-545
17 Change in U.S. private assets abroad (increase, - )
18
Bank-reported claims
Nonbank-reported claims
19
20
U.S. purchases of foreign securities, net
U.S. direct investments abroad, net
21
-44,280
16,027
-4,433
-28,765
-27,109
-68,643
3,278
1,932
-44,740
-29,113
-53,253
24,948
4,551
-47,961
-34,791
-12,445
6,584
-3,214
-13,787
-2,028
-31,243
-3,481
1,132
-17,405
-11,489
-11,910
28,055
-4,774
-26,889
-8,302
-29,888
5,317
443
-24,098
-11,550
-43,331
7,547
22 Change in foreign official assets in United States (increase, +) . . .
U.S. Treasury securities
23
Other U.S. government obligations
24
Other U.S. government liabilities
25
26
Other U.S. liabilities reported by U.S. banks 3
27
Other foreign official assets 5
34,198
29,576
667
2,156
3,385
-1,586
17,564
14,846
1,301
1,542
-1,484
1,359
40,684
18,454
3,949
2,542
16,427
-688
-7,378
-323
912
864
-7,831
-1,000
5,931
-7,379
874
943
11,219
274
10,929
1,039
710
-395
8,171
1,404
17,699
5,668
1,082
396
9,454
1,099
19,646
18,808
1,545
1,322
-2,213
184
28 Change in foreign private assets in United States (increase, + ) . . .
29
U.S. bank-reported liabilities 3
30
U.S. nonbank-reported liabilities
Foreign private purchases of U.S. Treasury securities, net .
31
Foreign purchases of other U.S. securities, net
32
33
Foreign direct investments in United States, net
70,976
16,370
7,533
-2,534
1,592
48,015
65,875
-11,371
-699
18,826
35,144
23,975
88,895
18,609
741
36,893
30,274
2,378
33,828
23,647
1,553
4,870
2,730
1,028
32,914
-1,171
-2,717
21,232
12,478
3,092
14,789
-18,862
2,057
13,599
9,394
8,601
24,681
-1,381
1,361
-623
15,025
10,299
46,806
23,525
34 Allocation of special drawing rights
35 Discrepancy
36
Due to seasonal adjustment
37
Before seasonal adjustment
0
30,820
0
-15,140
0
-12,218
-15,140
-12,218
0
15,280
1,222
14,058
0
8,948
5,814
3,134
0
30,820
0
2,123
-6,754
8,877
14,133
681
13,452
0
5,495
-7,605
13,100
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)
-45,290
-5,588
3,995
17,411
1,875
-2,158
5,763
3,901
1,952
1,542
-983
822
-544
32,042
16,022
38,142
-8,242
4,988
11,324
17,303
18,324
1,707
-4,882
5,857
3,051
2,336
463
-916
-3,043
1. Seasonal factors are not calculated for lines 12-16,18-20, 22-34, and 38-40.
2. Data are on an international accounts basis. The data differ from the Census
basis data, shown in table 3.11, for reasons of coverage and timing. Military
exports are excluded from merchandise trade data and are included in line 5.
3. Reporting banks include all types of depository institution as well as some
brokers and dealers.
0
-118
-48
-378
4. Associated primarily with military sales contracts and other transactions
arranged with or through foreign official agencies.
5. Consists of investments in U.S. corporate stocks and in debt securities of
private corporations and state and local governments.
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis,
Survey of Current Business.
A54
3.11
International Statistics • February 1994
U.S. FOREIGN TRADE 1
Millions of dollars; monthly data seasonally adjusted
1993
Item
1990
1991
1992
• Apr.
1 Exports of domestic and foreign
merchandise, excluding grant-aid
shipments
2 General imports including merchandise
for immediate consumption
plus entries into bonded
warehouses
3 Trade balance
393,592
421,730
448,164
38,479
May
June
July
Aug.
Sept/
Oct."
38,930
37,639
37,109
38,050
38,885
40,110
495,311
488,453
532,665
48,660
47,306
49,698
47,534
48,097
49,506
50,566
-101,718
-66,723
-84,501
-10,182
-8,376
-12,058
-10,425
-10,047
-10,621
-10,455
1. Government and nongovernment shipments of merchandise between foreign
countries and the fifty states, including the District of Columbia, Puerto Rico, the
U.S. Virgin Islands, and U.S. Foreign Trade Zones. Data exclude (1) shipments
among the United States, Puerto Rico, the U.S. Virgin Islands, and other U.S.
affiliated insular areas, (2) shipments to U.S. Armed Forces and diplomatic
missions abroad for their own use, (3) U.S. goods returned to the United States by
its Armed Forces, (4) personal and household effects of travelers, and (5)
in-transit shipments. Data reflect the total arrival of merchandise from foreign
countries that immediately entered consumption channels, warehouses, or U.S.
Foreign Trade Zones (general imports). Import data are Customs value; export
data are F.A.S. value. Since 1990, data for U.S. exports to Canada have been
derived from import data compiled by Canada; similarly, in Canadian statistics,
Canadian exports to the United States are derived from import data compiled by
the United States. Since Jan. 1,1987, merchandise trade data have been released
forty-five days after the end of the month; the previous month is revised to reflect
late documents.
Data in this table differ from figures for merchandise trade shown in the U.S.
balance of payments accounts (table 3.10, lines 2 through 4) primarily for reasons
of coverage. For both exports and imports, a large part of the difference is the
treatment of military sales and purchases. The military sales to foreigners
(exports) and purchases from foreigners (imports) that are included in this table as
merchandise trade are shifted, in the balance of payments accounts, from
"merchandise trade" into the broader category "military transactions."
SOURCE. (U.S. Department of Commerce, Bureau of the Census), FT900, U.S.
Merchandise Trade.
3.12 U.S. RESERVE ASSETS
Millions of dollars, end of period
1993
1990
1991
1992
May
1 Total
2 Gold stock, including Exchange
Stabilization F u n d'
3 Special drawing rights 2,3
4 Reserve position in International
Monetary Fund
5 Foreign currencies
July
Aug.
Sept.
Oct.
Nov. p
83,316
77,719
71,323
76,711
73,968
74,139
75,231
75,835
74,550
74,042
11,058
10,989
11,057
11,240
11,056
8,503
11,053
9,147
11,057
8,987
11,057
8,905
11,057
9,133
11,057
9,203
11,056
9,038
11,054
9,091
9,076
52,193
9,488
45,934
11,759
40,005
12,195
44,316
11,926
41,998
12,083
42,094
12,118
42,923
12,101
43,474
11,908
42,548
11,827
42,070
1. Gold held "under earmark" at Federal Reserve Banks for foreign and
international accounts is not included in the gold stock of the United States; see
table 3.13, line 3. Gold stock is valued at $42.22 per fine troy ounce.
2. Special drawing rights (SDRs) are valued according to a technique adopted
by the International Monetary Fund (IMF) in July 1974. Values are based on a
weighted average of exchange rates for the currencies of member countries. From
July 1974 through December 1980, sixteen currencies were used; since January
1981, five currencies have been used. U.S. SDR holdings and reserve positions in
the IMF also have been valued on this basis since July 1974.
3. Includes allocations of SDRs by the International Monetary Fund on Jan. 1
of the year indicated, as follows: 1970—$867 million; 1971—$717 million; 1972—
$710 million; 1979—$1,139 million; 1980—$1,152 million; 1981—$1,093 million;
plus net transactions in SDRs.
4. Valued at current market exchange rates.
3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS 1
Millions of dollars, end of period
1993
Asset
1990
1991
1992
May
1 Deposits
Held in custody
2 U.S. Treasury securities 2
3 Earmarked gold 3
July
Aug.
Sept.
Oct.
Nov.'
369
968
205
193
286
284
357
501
390
596
278,499
13,387
281,107
13,303
314,481
13,686
345,060
12,854
343,672
12,829
343,378
12,756
356,671
12,686
358,860
12,562
358,975
12,464
373,864
12,381
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 in foreign and international accounts and valued at $42.22 per fine troy
ounce; not included in the gold stock of the United States.
Summary Statistics
3.14 FOREIGN BRANCHES OF U.S. BANKS
A55
Balance Sheet Data1
Millions of dollars, end of period
1993
Account
1990
1991
1992
May
Apr.
ASSETS
1 Total payable in any currency
July
Aug.
Sept.
Oct.
562,590
551,342
560,539
556,176
569,149
166,817
130,865
9,457
26,495
325,948
108,071
90,008
18,364
109,505
67,774
168,086
136,938
6,862
24,286
318,736
108,521
84,937
17,797
107,481
69,354
162,243
127,239
7,739
27,265
325,545
106,859
91,646
17,875
109,165
81,361
June
All foreign countries
556,925
548,999
542,545
544,497
548,893
2 Claims on United States
Parent bank
Other banks in United States
4
5
Nonbanks
6 Claims on foreigners
Other branches of parent bank
7
8
Banks
9
Public borrowers
Nonbank foreigners
10
11 Other assets
188,496
148,837
13,2%
26,363
312,449
135,003
72,602
17,555
87,289
55,980
176,487
137,695
12,884
25,908
303,934
111,729
81,970
18,652
91,583
68,578
166,798
132,275
9,703
24,820
318,071
123,256
82,190
20,756
91,869
57,676
164,652
129,121
10,830
24,701
316,001
109,966
86,940
18,577
100,518
63,844
162,355
127,126
9,169
26,060
321,065
111,314
88,188
18,251
103,312
65,473
176,025
141,024
9,498
25,503
316,533
111,708
85,972
18,183
100,670
70,032
163,793
127,474
8,993
27,326
316,989
105,095
88,648
17,687
105,559
70,560
12 Total payable in U.S. dollars
379,479
364,078
365,824
345,053
344,926
355,298
340,948
338,896
348,290
342,904
N Claims on United States
14
Parent bank
15
Other banks in United States
Nonbanks
16
17 Claims on foreigners
18
Other branches of parent bank
19
Banks
20
Public borrowers
Nonbank foreigners
21
22 Other assets
180,174
142, % 2
12,513
24,699
174,451
95,298
36,440
12,298
30,415
24,854
169,848
133,662
12,025
24,161
167,010
78,114
41,635
13,685
33,576
27,220
162,125
129,329
9,266
23,530
183,527
83,117
47,250
14,313
38,847
20,172
160,120
126,760
10,168
23,192
169,360
73,049
43,783
12,537
39,991
15,573
156,418
123,957
8,209
24,252
170,475
73,068
44,920
12,244
40,243
18,033
169,502
137,711
8,638
23,153
168,824
73,014
43,674
12,049
40,087
16,972
155,387
124,072
8,270
23,045
167,183
70,293
44,262
11,951
40,677
18,378
157,538
127,028
8,475
22,035
164,318
68,567
42,378
11,999
41,374
17,040
160,820
133,223
6,322
21,275
168,815
70,511
43,920
11,580
42,804
18,655
154,079
124,060
7,046
22,973
166,514
67,420
44,708
11,506
42,880
22,311
United Kingdom
23 Total payable in any currency
184,818
175,599
165,850
163,193
165,044
173,158
167,046
172,710
173,057
178,748
74 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
45,560
42,413
792
2,355
115,536
46,367
31,604
3,860
33,705
23,722
35,257
31,931
1,267
2,059
109,692
35,735
36,394
3,306
34,257
30,650
36,403
33,460
1,298
1,645
111,623
46,165
33,399
3,329
28,730
17,824
33,353
29,605
757
2,991
108,963
39,450
37,823
2,513
29,177
20,877
31,239
27,523
747
2,%9
111,830
41,458
37,282
2,420
30,670
21,975
37,038
33,059
1,006
2,973
109,528
40,130
36,848
2,342
30,208
26,592
34,032
29,184
808
4,040
107,799
37,164
38,543
2,341
29,751
25,215
35,491
30,612
877
4,002
114,150
39,778
40,332
2,606
31,434
23,069
34,053
30,776
631
2,646
115,203
40,613
40,277
2,171
32,142
23,801
30,865
26,458
1,010
3,397
116,809
40,545
44,103
2,147
30,014
31,074
34 Total payable in U.S. dollars
116,762
105,974
109,493
95,612
97,431
100,422
96,200
93,739
97,841
95,196
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
34,508
32,186
1,022
1,300
66,335
34,124
17,089
2,349
12,773
8,650
31,233
28,420
393
2,420
60,180
29,388
16,903
1,888
12,001
4,637
28,634
25,9%
326
2,312
61,742
30,753
17,073
1,808
12,108
7,055
34,110
31,265
533
2,312
60,479
30,287
16,658
1,804
11,730
5,833
30,573
27,580
300
2,693
58,944
27,814
17,590
1,744
11,7%
6,683
31,753
28,938
308
2,507
56,603
27,713
15,466
1,832
11,592
5,383
31,160
29,130
328
1,702
59,725
28,306
17,%7
1,614
11,838
6,956
27,731
24,756
430
2,545
59,385
27,478
18,910
1,613
11,384
8,080
35 Claims on United States
Parent bank
36
Other banks in United States
37
38
Nonbanks
39 Claims on foreigners
40
Other branches of parent bank
Banks
41
47
Public borrowers
43
Nonbank foreigners
44 Other assets
Bahamas and Cayman Islands
45 Total payable in any currency
162,316
168,512
147,422
144,654
142,872
148,982
140,580
140,172
147,385
146,834
46 Claims on United States
Parent bank
47
48
Other banks in United States
49
Nonbanks
50 Claims on foreigners
51
Other branches of parent bank
5?
Banks
53
Public borrowers
Nonbank foreigners
54
55 Other assets
112,989
77,873
11,869
23,247
41,356
13,416
16,310
5,807
5,823
7,971
115,430
81,706
10,907
22,817
45,229
11,098
20,174
7,161
6,7%
7,853
%,280
66,608
7,828
21,844
44,509
7,293
21,212
7,786
8,218
6,633
97,469
67,830
9,279
20,360
40,5%
6,873
17,816
6,690
9,217
6,589
94,894
66,170
7,184
21,540
41,378
6,999
18,527
6,527
9,325
6,600
102,109
74,023
7,651
20,435
40,437
7,009
18,117
6,334
8,977
6,436
93,736
66,363
7,477
19,8%
39,609
6,772
17,688
6,185
8,964
7,235
93,661
67,055
7,360
19,246
39,588
7,226
16,863
6,102
9,397
6,923
98,873
74,040
5,489
19,344
41,814
8,958
17,090
5,955
9,811
6,698
98,100
72,185
5,710
20,205
40,028
8,024
16,228
5,767
10,009
8,706
56 Total payable in U.S. dollars
158,390
163,957
142,861
140,146
138,202
143,900
136,025
135,698
142,831
142,273
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 1994
FOREIGN BRANCHES OF U.S. BANKS
Account
Balance Sheet Data1—Continued
1990
1992
Apr.
LIABILITIES
May
June
July
Aug.
Sept.
All foreign countries
57 Total payable in any currency
556,925
548,999
542,545
544,497
548,893
562,590
551,342
560,539
556,176
569,149
58 Negotiable certificates of deposit (CDs)
59 To United States
60
Parent bank
61
Other banks in United States
62
Nonbanks
18,060
189,412
138,748
7,463
43,201
16,284
198,307
136,431
13,260
48,616
10,032
189,444
134,339
12,182
42,923
13,748
176,747
119,752
11,952
45,043
14,348
175,442
117,207
14,062
44,173
14,154
186,374
129,486
13,514
43,374
14,568
174,089
120,953
10,440
42,6%
14,604
172,074
118,724
9,561
43,789
12,666
180,247
121,821
11,662
46,764
12,166
173,444
114,944
10,699
47,801
63 To foreigners
64
Other branches of parent bank . . .
65
Banks
66
Official institutions
67
Nonbank foreigners
68 Other liabilities
311,668
139,113
58,986
14,791
98,778
37,785
288,254
112,033
63,097
15,5%
97,528
46,154
309,704
125,160
62,189
19,731
102,624
33,365
316,661
113,845
68,381
21,326
113,109
37,341
322,140
115,189
69,323
22,271
115,357
36,%3
318,956
115,725
67,243
22,466
113,522
43,106
319,464
108,925
71,491
23,147
115,901
43,221
333,015
113,550
73,663
23,049
122,753
40,846
322,146
111,731
68,100
22,698
119,617
41,117
333,457
109,123
76,374
24,712
123,248
50,082
69 Total payable in U.S. dollars
383,522
370,710
368,773
344,532
344,319
357,116
342,287
339,344
347,387
343,930
70 Negotiable CDs
71 To United States
72
Parent bank
73
Other banks in United States
74
Nonbanks
14,094
175,654
130,510
6,052
39,092
11,909
185,472
129,669
11,707
44,0%
6,238
178,674
127,948
11,512
39,214
7,062
164,380
112,736
11,282
40,362
7,248
162,328
110,161
13,126
39,041
8,138
172,708
121,922
12,862
37,924
7,958
160,499
113,313
9,789
37,397
7,370
157,841
110,881
8,842
38,118
6,131
167,272
114,170
11,092
42,010
5,886
160,048
107,630
9,927
42,491
75 To foreigners
76
Other branches of parent bank . . .
77
Banks
78
Official institutions
79
Nonbank foreigners
80 Other liabilities
179,002
98,128
20,251
7,921
52,702
14,772
158,993
76,601
24,156
10,304
47,932
14,336
172,189
83,700
26,118
12,430
49,941
11,672
163,149
75,682
22,150
12,627
52,690
9,941
165,162
75,313
22,%9
12,653
54,227
9,581
166,130
75,783
23,440
12,951
53,956
10,140
163,567
72,900
23,631
12,868
54,168
10,263
165,055
72,467
24,522
12,031
56,035
9,078
163,701
72,358
23,799
10,720
56,824
10,283
162,150
68,776
24,252
11,416
57,706
15,846
United Kingdom
81 Total payable in any currency
...
184,818
175,599
165,850
163,193
165,044
173,158
167,046
172,710
173,057
178,748
82 Negotiable CDs
83 To United States
84
Parent bank
85
Other banks in United States .
86
Nonbanks
14,256
39,928
31,806
1,505
6,617
11,333
37,720
29,834
1,438
6,448
4,517
39,174
31,100
1,065
7,009
5,414
34,661
26,781
1,110
6,770
5,644
37,272
28,095
1,652
7,525
6,566
39,514
30,410
1,097
8,007
6,364
35,521
27,183
850
7,488
6,674
36,600
28,076
741
7,783
5,318
37,180
29,217
682
7,281
4,489
33,411
25,147
782
7,482
87 To foreigners
88
Other branches of parent bank
89
Banks
90
Official institutions
91
Nonbank foreigners
92 Other liabilities
108,531
36,709
25,126
8,361
38,335
22,103
98,167
30,054
25,541
9,670
32,902
28,379
107,176
35,983
25,231
12,090
33,872
14,983
108,670
33,545
26,082
12,342
36,701
14,448
106,834
31,437
27,184
11,752
36,461
15,294
106,725
32,275
25,848
12,139
36,463
20,353
105,949
28,408
28,504
11,885
37,152
19,212
112,121
30,534
29,039
11,575
40,973
17,315
112,534
31,578
28,064
12,425
40,467
18,025
117,614
31,921
31,183
13,269
41,241
23,234
93 Total payable in U.S. dollars
116,094
108,755
108,214
94,159
96,152
98,465
93,360
92,066
94,697
94,614
12,710
34,697
29,955
1,156
3,586
10,076
33,003
28,260
1,177
3,566
3,894
35,417
29,957
709
4,751
4,214
30,170
25,315
676
4,179
4,392
32,457
26,631
1,311
4,515
5,462
34,523
28,747
847
4,929
5,197
30,669
25,753
637
4,279
4,890
31,579
26,600
476
4,503
3,728
32,838
28,039
397
4,402
3,388
28,725
24,093
350
4,282
60,014
25,957
9,488
4,692
19,877
8,673
56,626
20,800
11,069
7,156
17,601
9,050
62,048
22,026
12,540
8,847
18,635
6,855
54,407
18,958
8,327
8,803
18,319
5,368
54,576
17,449
9,065
8,210
19,852
4,727
53,282
17,691
8,305
8,812
18,474
5,198
52,336
16,198
8,347
8,720
19,071
5,158
51,256
16,063
7,666
8,042
19,485
4,341
52,608
16,859
8,877
7,195
19,677
5,523
54,211
16,108
9,%7
7,399
20,737
8,290
94 Negotiable CDs
95 To United States
96
Parent bank
97
Other banks in United States .
98
Nonbanks
99 To foreigners
100
Other branches of parent bank
101
Banks
102
Official institutions
103
Nonbank foreigners
104 Other liabilities
Bahamas and Cayman Islands
105 Total payable in any currency
...
162,316
168,512
147,422
144,654
142,872
148,982
140,580
140,172
147,385
146,834
106 Negotiable CDs
107 To United States
108
Parent bank
109
Other banks in United States .
110
Nonbanks
646
114,738
74,941
4,526
35,271
1,173
130,058
79,394
10,231
40,433
1,350
111,861
67,347
10,445
34,069
1,692
106,575
60,033
10,291
36,251
1,812
102,825
57,132
11,220
34,473
1,535
109,238
64,608
11,567
33,063
1,562
101,036
59,352
8,603
33,081
1,307
99,418
58,031
7,791
33,5%
1,315
108,107
60,407
10,146
37,554
1,260
106,453
59,323
9,117
38,013
111 To foreigners
112
Other branches of parent bank
113
Banks
114
Official institutions
115
Nonbank foreigners
116 Other liabilities
44,444
24,715
5,588
622
13,519
2,488
35,200
17,388
5,662
572
11,578
2,081
32,556
15,169
6,422
805
10,160
1,655
34,888
17,500
6,288
913
10,187
1,499
36,220
18,652
6,159
1,064
10,345
2,015
36,621
18,944
6,417
1,031
10,229
1,588
35,973
18,164
6,9%
902
9,911
2,009
37,808
19,103
7,766
836
10,103
1,639
36,449
18,609
6,347
881
10,612
1,514
35,291
17,451
6,272
770
10,798
3,830
157,132
163,789
143,150
139,536
137,847
144,014
135,893
135,483
142,449
142,246
117 Total payable in U.S. dollars
Summary Statistics
3.15
A57
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1993
Item
1 Total 1
2
3
4
5
6
7
8
9
10
11
12
By type
Liabilities reported by banks in the United States .
U.S. Treasury bills and certificates
U.S. Treasury bonds and notes
Marketable
Nonmarketable
U.S. securities other than U.S. Treasury securities 5
By area
Europe 1
Canada
Latin America and Caribbean
Asia
Africa
Other countries 6
1991
1992
Apr.
May
July
Aug.
Sept. r
360,530
398,672
413,661
424,298
427,380
426,726
436,909'
445,746
38,3%
92,692
54,823
104,5%
62,814
113,293
69,199
120,194
72,533
119,860
67,154
128,837
68,767 r
136,488
70,276
139,638
203,677
4,858
20,907
210,553
4,532
24,168
205,302
5,432
26,820
201,878
5,417
27,610
201,118
5,451
28,418
1%,238
5,488
29,009
196,962
5,508
29,184
200,143
5,542
30,147
171,317
7,460
33,554
139,465
2,092
6,640
191,708
7,920
40,015
152,142
3,565
3,320
187,899
8,302
49,146
159,860
3,782
4,670
193,673
8,899
48,130
164,947
3,782
4,865
193,378
8,297
48,524
169,370
3,621
4,188
188,930
8,808
53,764
168,859
2,844
3,519
191,890*
8,075
55,283 r
174,898r
3,109
3,652
198,336
8,260
54,678
177,161
3,888
3,421
1. Includes the Bank for International Settlements.
2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, negotiable time certificates of deposit, and borrowings under repurchase agreements.
3. Includes nonmarketable certificates of indebtedness (including those payable
in foreign currencies through 1974) and Treasury bills issued to official institutions
of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes
bonds and notes payable in foreign currencies; zero coupon bonds are included at
current value.
5. Debt securities of U.S. government corporations and federally sponsored
agencies, and U.S. corporate stocks and bonds.
6. Includes countries in Oceania and Eastern Europe.
SOURCE. Based on Treasury Department data and on data reported to the
Treasury Department by banks (including Federal Reserve Banks) and securities
dealers in the United States and on the 1984 benchmark survey of foreign portfolio
investment in the United States.
3.16
Reported by Banks in the United States 1
LIABILITIES TO, AND CLAIMS ON, FOREIGNERS
Payable in Foreign Currencies
Millions of dollars, end of period
1993
1992
Item
1 Banks' liabilities
2 Banks' claims
3
Deposits
4
Other claims
5 Claims of banks' domestic customers
1989
67,835
65,127
20,491
44,636
3,507
1. Data on claims exclude foreign currencies held by U.S. monetary
authorities.
1990
70,477
66,7%
29,672
37,124
6,309
1991
75,129
73,195
26,192
47,003
3,398
Dec.
Mar.
June
Sept.
72,7%
62,789
24,240
38,549
4,432
80,999
64,057
24,928
39,129
2,625
74,697
55,161
23,449
31,712
3,234
80,479
58,884
22,852
36,032
2,640
2. Assets owned by customers of the reporting bank located in the United
States that represent claims on foreigners held by reporting banks for the accounts
of the domestic customers.
A58
3.17
International Statistics • February 1994
LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
Reported by Banks in the United States1
Millions of dollars, end of period
1993
Item
1990
1991
1992
Apr.
May
June
July
Aug. r
Sept. r
Oct.P
HOLDER AND TYPE OF LIABILITY
1 Total, all foreigners
759,634
756,066
811,371
792,760
793,584
821,035
817,600
843,154
858,661
859,706
2 Banks' own liabilities
Demand deposits
3
4
Time deposits
Other.
5
Own foreign offices
6
577,229
21,723
168,017
65,822
321,667
575,374
20,321
159,649
66,305
329,099
607,556
21,824
160,476
93,824
331,432
582,931
22,243
148,064
101,148
311,476
574,822
22,144
147,923
104,513
300,242
597,715
21,467
152,169
107,394
316,685
588,994
21,815
151,393
106,590
309,1%
606,529
21,503
152,976
116,406
315,644
614,511
25,394
153,672
113,063
322,382
609,852
22,020
158,928
129,498
299,406
182,405
96,796
180,692
110,734
203,815
127,644
209,829
138,014
218,762
144,129
223,320
144,059
228,606
153,359
236,625
161,827
244,150
165,146
249,854
164,365
17,578
68,031
18,664
51,294
21,974
54,197
21,539
50,276
24,515
50,118
30,056
49,205
26,477
48,770
27,643
47,155
30,878
48,126
37,858
47,631
5,918
4,540
36
1,050
3,455
8,981
6,827
43
2,714
4,070
9,350
6,951
46
3,214
3,691
10,731
5,834
33
1,687
4,114
8,934
6,481
35
2,989
3,457
9,330
6,270
19
3,607
2,644
9,387
6,197
29
2,920
3,248
12,365
8,671
37
2,882
5,752
11,358
7,944
21
4,062
3,861
10,984
6,780
71
2,968
3,741
1,378
364
2,154
1,730
2,399
1,908
4,897
4,461
2,453
1,883
3,060
2,320
3,190
2,635
3,694
3,418
3,414
3,199
4,204
3,566
1,014
0
424
0
486
5
433
3
564
6
740
0
549
6
276
0
215
0
638
0
119,303
34,910
1,924
14,359
18,628
131,088
34,411
2,626
16,504
15,281
159,419
51,058
1,274
17,823
31,961
176,107
59,393
1,361
19,166
38,866
189,393
63,575
1,386
21,682
40,507
192,393
62,791
2,204
19,408
41,179
195,991
61,752
1,557
18,626
41,569
205,255
62,195
1,321
18,050
42,824
209,914
63,675
1,951
20,537
41,187
206,164
60,966
2,121
14,885
43,960
84,393
79,424
96,677
92,692
108,361
104,5%
116,714
113,293
125,818
120,194
129,602
119,860
134,239
128,837
143,060
136,488
146,239
139,638
145,198
140,525
4,766
203
3,879
106
3,726
39
3,284
137
5,480
144
9,602
140
5,297
105
6,514
58
6,149
452
4,491
182
540,805
458,470
136,802
10,053
88,541
38,208
321,667
522,265
459,335
130,236
8,648
82,857
38,731
329,099
547,988
476,785
145,353
10,168
90,368
44,817
331,432
512,921
446,694
135,218
10,883
79,592
44,743
311,476
503,421
436,547
136,305
11,386
76,439
48,480
300,242
525,237
459,341
142,656
9,918
83,143
49,595
316,685
517,363
450,359
141,163
10,675
84,751
45,737
309,1%
528,549
462,7%
147,152
10,478
86,034
50,640
315,644
540,690
470,030
147,648
12,808
83,150
51,690
322,382
536,095
461,035
161,629
9,951
95,430
56,248
299,406
82,335
10,669
62,930
7,471
71,203
11,087
66,227
9,908
66,874
10,837
65,8%
10,546
67,004
10,627
65,753
11,327
70,660
11,794
75,060
10,046
5,341
66,325
5,694
49,765
7,555
52,561
7,349
48,970
7,397
48,640
7,741
47,609
9,049
47,328
8,760
45,666
12,688
46,178
19,402
45,612
93,608
79,309
9,711
64,067
5,530
93,732
74,801
9,004
57,574
8,223
94,614
72,762
10,336
49,071
13,355
93,001
71,010
9,966
47,619
13,425
91,836
68,219
9,337
46,813
12,069
94,075
69,313
9,326
46,011
13,976
94,859
70,686
9,554
45,0%
16,036
%,985
72,867
9,667
46,010
17,190
%,699
72,862
10,614
45,923
16,325
106,463
81,071
9,877
45,645
25,549
14,299
6,339
18,931
8,841
21,852
10,053
21,991
10,352
23,617
11,215
24,762
11,333
24,173
11,260
24,118
10,594
23,837
10,515
25,392
10,228
6,457
1,503
8,667
1,423
10,207
1,592
10,473
1,166
11,074
1,328
11,973
1,456
11,582
1,331
12,093
1,431
11,826
1,496
13,327
1,837
7,073
7,456
9,111
9,409
9,582
10,388
9,389
9,481
11,264
17,533
7 Banks' custodial liabilities 5
8
U.S. Treasury bills and certificates
Other negotiable and readily transferable
9
instruments
10
Other
11 Nonmonetary international and regional
organizations
12
Banks' own liabilities
13
Demand deposits
14
Time deposits
Other.
15
16
17
18
19
Banks' custodial liabilities 5
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments
Other
20 Official institutions 9
21
Banks' own liabilities
22
Demand deposits
Time deposits
23
24
Other.
25
26
27
28
Banks' custodial liabilities 5
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments 7
Other
29 Banks 1 0
30
Banks' own liabilities
31
Unaffiliated foreign banks
32
Demand deposits
33
Time deposits
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 7
Other
40 Other foreigners
41
Banks' own liabilities
Demand deposits
42
Time deposits
43
44
Other 3
45
46
47
48
Banks' custodial liabilities 5
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
instruments
Other
MEMO
49 Negotiable time certificates of deposit in custody for
foreigners
1. Reporting banks include all types of depository institution, as well as some
brokers and dealers.
2. Excludes negotiable time certificates of deposit, which are included in
"Other negotiable and readily transferable instruments."
3. Includes borrowing under repurchase agreements.
4. For U.S. banks, includes amounts owed to own foreign branches and foreign
subsidiaries consolidated in Consolidated Report of Condition filed with bank
regulatory agencies. For agencies, branches, and majority-owned subsidiaries of
foreign banks, consists principally of amounts owed to head office or parent
foreign bank, and foreign branches, agencies, or wholly owned subsidiaries of
head office or parent foreign bank.
5. Financial claims on residents of the United States, other than long-term
securities, held by or through reporting banks.
6. Includes nonmarketable certificates of indebtedness and Treasury bills
issued to official institutions of foreign countries.
7. Principally bankers acceptances, commercial paper, and negotiable time
certificates of deposit.
8. Principally the International Bank for Reconstruction and Development, the
Inter-American Development Bank, and the Asian Development Bank. Excludes
"holdings of dollars" of the International Monetary Fund.
9. Foreign central banks, foreign central governments, and the Bank for
International Settlements.
10. Excludes central banks, which are included in "Official institutions."
Bank-Reported Data
3.17
A59
LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued
1993
Item
1990
1991
1992
Apr.
May
June
July
Aug/
Sept.
Oct."
Area
1 Total, all foreigners
759,634
756,066
811,371
792,760
793,584
821,035
817,600
843,154 r
858,661*
859,706
2 Foreign countries
753,716
747,085
802,021
782,029
784,650
811,705
808,213
830,789*
847,303*
848,722
254,452
1,229
12,382
1,399
602
30,946
7,485
934
17,735
5,350
2,357
2,958
119
7,544
1,837
36,690
1,169
109,555
928
13,234
249,097
1,193
13,337
937
1,341
31,808
8,619
765
13,541
7,161
1,866
2,184
241
11,391
2,222
37,238
1,598
100,292
622
12,741
308,423
1,611
20,572
3,060
1,299
41,459
18,631
913
10,041
7,372
3,319
2,465
577
9,796
2,986
39,440
2,666
112,456
504
29,256
298,984
1,497
19,775
1,229
2,265
31,087
19,912
742
8,094
11,502
2,355
2,476
726
14,055
3,149
39,703
2,664
109,553
507
27,693
313,834
1,525
21,099
2,464
2,185
33,825
23,959
859
9,089
13,903
2,690
2,674
847
13,588
2,140
41,775
2,761
106,638
510
31,303
324,229
1,496
21,817
3,088
2,580
33,744
22,752
819
10,402
11,271
2,840
2,764
1,129
15,484
2,336
41,270
2,497
115,251
512
32,177
320,954
1,415
20,805
3,983
2,873
33,963
24,498
1,078
10,721
10,465
2,757
2,894
1,406
16,593
2,210
40,494
2,882
113,171
501
28,245
335,460*
1,614
23,345
3,023
2,667*
36,517*
22,199
1,122
11,426
10,854
2,833
3,015
2,254
17,207*
1,460
40,987
2,618
118,793
511
33,015*
340,427*
1,672*
23,635*
3,135
2,347
40,622
22,530
1,378
11,285*
11,429
2,901
3,180
2,229
20,495
3,475*
41,908*
2,553
116,258*
524
28,871*
357,905
1,808
24,641
5,084
2,712
43,033
22,818
1,366
10,623
13,370
2,7%
3,215
2,623
20,179
2,355
43,195
2,897
130,946
541
23,703
3 Europe
4
Austria
Belgium and Luxembourg
5
6
Denmark
7
Finland
8
France
9
Germany
10
Greece
Italy
11
Netherlands
12
Norway
13
14
Portugal
Russia
15
Spain
16
Sweden
17
Switzerland
18
19
Turkey
United Kingdom
20
Yugoslavia 11
21
Other Europe and former U.S.S.R. 1 2
22
20,349
21,605
22,746
22,303
21,331
20,051
22,264
23,917
25,142*
27,589
7.4 Latin America and Caribbean
Argentina
25
26
Bahamas
Bermuda
77
Brazil
78
79
British West Indies
Chile
30
31
Colombia
Cuba
32
33
Ecuador
34
Guatemala
35
Jamaica
Mexico
36
Netherlands Antilles
37
Panama
38
Peru
39
Uruguay
40
Venezuela
41
Other
42
332,997
7,365
107,386
2,822
5,834
147,321
3,145
4,492
11
1,379
1,541
257
16,650
7,357
4,574
1,294
2,520
12,271
6,779
345,529
7,753
100,622
3,178
5,704
163,620
3,283
4,661
2
1,232
1,594
231
19,957
5,592
4,695
1,249
2,096
13,181
6,879
317,236
9,477
82,288
7,079
5,584
153,035
3,035
4,580
3
993
1,377
371
19,456
5,205
4,177
1,080
1,955
11,387
6,154
317,876
11,066
81,763
6,135
5,466
148,628
3,480
4,360
2
923
1,352
293
24,896
4,537
4,135
1,070
1,775
11,517
6,478
303,630
11,339
80,333
5,297
5,339
138,996
3,520
4,338
2
956
1,323
289
23,351
3,813
4,054
977
1,742
11,644
6,317
312,692
11,289
80,715
6,074
4,936
147,753
3,552
4,405
3
924
1,397
341
22,296
4,059
3,749
979
1,775
12,242
6,203
311,963
14,120
73,414
6,969
5,425
147,618
3,934
4,464
5
889
1,304
341
24,117
4,159
3,747
891
1,775
12,373
6,418
313,275*
14,579
73,790
6,931
5,299
146,425*
3,5%
4,383
5
860
1,315
364
24,833*
5,413
3,657
898
1,822
12,782
6,323
322,863*
14,047
79,228*
7,169
5,268*
152,237*
3,867
3,988
6
819
1,253
375
24,414*
4,695*
3,743
903
1,734
12,868
6,249
310,128
14,307
75,754
8,016
5,044
142,746
3,949
3,020
7
861
1,301
376
24,243
5,281
3,547
869
1,714
12,851
6,242
43
136,844
120,462
143,561
131,117
134,032
143,229
143,117
147,517*
147,648*
141,361
2,421
11,246
12,754
1,233
1,238
2,767
67,076
2,287
1,585
1,443
15,829
16,965
2,626
11,491
14,269
2,418
1,463
2,015
47,069
2,587
2,449
2,252
15,752
16,071
3,202
8,379
18,509
1,396
1,480
3,775
58,466
3,337
2,275
5,582
21,446
15,714
3,527
8,884
16,353
989
1,464
3,765
51,204
3,584
2,785
4,967
19,687
13,908
3,008
8,790
15,832
1,341
1,861
3,163
54,462
3,922
2,458
5,377
19,272
14,546
2,885
9,618
15,890
1,315
2,132
2,764
62,784
3,842
2,933
5,233
20,327
13,506
2,728
9,991
16,193
1,053
1,688
2,790
62,226
4,298
3,1%
5,830
18,409
14,715
3,292
9,483*
15,621
1,211
1,582
2,729
67,999*
3,873
2,648
6,058
19,141
13,880
3,261
9,%9
16,388*
1,288
1,715
3,241
65,626*
4,356*
2,735
5,846*
17,255*
15,968*
3,280
9,799
16,387
1,254
1,507
5,424
60,194
3,892
2,192
6,446
14,681
16,305
4,630
1,425
104
228
53
1,110
1,710
4,825
1,621
79
228
31
1,082
1,784
5,884
2,472
76
190
19
1,346
1,781
6,441
2,938
151
246
14
1,294
1,798
6,477
2,922
144
198
16
1,368
1,829
6,475
2,784
119
265
15
1,332
1,960
5,680
1,880
138
172
25
1,417
2,048
5,649
2,018
78
233
20
1,279
2,021
6,127
2,457
86
275
16
1,281
2,012
6,179
2,220
87
367
15
1,271
2,219
63 Other
Australia
64
Other
65
4,444
3,807
637
5,567
4,464
1,103
4,171
3,047
1,124
5,308
4,056
1,252
5,346
4,449
897
5,029
4,078
951
4,235
3,253
982
4,971
3,890
1,081
5,0%
4,045
1,051
5,560
4,434
1,126
66 Nonmonetary international and regional
organizations
International 1 5
Latin American regional 16
Other regional 17
5,918
4,390
1,048
479
8,981
6,485
1,181
1,315
9,350
7,434
1,415
501
10,731
7,590
2,223
918
8,934
5,388
2,412
1,134
9,330
5,812
2,318
1,200
9,387
5,828
2,077
1,482
12,365*
8,367*
2,737
1,261
11,358*
7,628*
2,448
1,282
10,984
7,340
2,539
1,105
23 Canada
44
45
46
47
48
49
50
51
52
53
54
55
China
People's Republic of China
Republic of China (Taiwan)
Hong Kong
India
Indonesia
Israel
Japan
Korea (South)
Philippines
Thailand
Middle Eastern oil-exporting countries
Other
56
57
58
59
60
61
62
Egypt
Morocco
South Africa
Zaire
Oil-exporting countries 1 4
Other
67
68
69
11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia.
12. Includes the Bank for International Settlements and Eastern European
countries not listed in line 23. Since December 1992, includes all parts of the
former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia.
Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania.
13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
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 E u r o p e . "
A60
3.18
International Statistics • February 1994
BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United Statesi
Payable in U.S. Dollars
Millions of dollars, end of period
1993
Area and country
1990
1991
1992
Apr.
May
June
July
Aug.
Sept. r
Oct.P
1 Total, all foreigners
511,543
514,339
500,511
471,288
461,179
482,944
471,863
461,191r
477,526
465,126
2 Foreign countries
506,750
508,056
495,429
468,871
459,497
480,864
470,556
459,239"
475,147
463,8%
113,093
362
5,473
497
1,047
14,468
3,343
727
6,052
1,761
782
292
530
2,668
2,094
4,202
1,405
65,151
1,142
1,095
114,310
327
6,158
686
1,907
15,112
3,371
553
8,242
2,546
669
344
1,970
1,881
2,335
4,540
1,063
60,395
825
1,386
123,999
331
6,404
707
1,419
14,803
4,229
718
9,048
2,472
356
325
3,147
2,772
4,929
4,722
962
63,928
569
2,158
120,313
1,013
6,177
645
998
13,141
5,322
618
8,724
2,607
714
513
2,889
3,642
4,509
4,361
1,285
60,725
551
1,879
118,213
941
5,513
628
885
11,614
6,089
596
8,218
3,278
676
593
3,080
3,441
4,229
4,735
1,508
59,703
550
1,936
122,297
1,080
5,955
721
1,225
11,833
6,236
564
9,250
2,764
789
670
3,045
3,607
4,062
4,123
1,584
62,565
548
1,676
124,429
587
6,127
835
1,007
11,847
7,746
509
8,053
3,260
823
710
2,799
5,117
5,131
5,193
1,492
60,767
547
1,879
116,836
691
6,515
693
705
11,500
6,766
508
8,839
3,081
941
803
2,591
4,184
4,278
5,634
1,549
55,118
547
1,893
124,529
457
6,539
631
594
10,%3
7,994
629
8,985
3,433
841
787
2,547
3,652
4,619
5,216
1,418
62,786
542
1,8%
124,605
573
5,494
1,056
730
11,516
7,319
842
8,085
3,157
779
826
2,585
4,746
4,111
4,647
1,650
64,009
535
1,945
3 Europe
4
Austria
5
Belgium and Luxembourg
6
Denmark
7
Finland
8
France
9
Germany
10 Greece
Italy
11
12 Netherlands
13 Norway
14
Portugal
Russia
15
16
Spain
17
Sweden
18
Switzerland
19 Turkey
20
United Kingdom
Yugoslavia^
21
Other Europe and former U.S.S.R. 3
22
16,091
15,113
14,155
16,977
16,393
16,693
17,776
17,373
19,009
15,756
24 Latin America and Caribbean
25
Argentina
26
Bahamas
27
Bermuda
28
Brazil
29
British West Indies
30 Chile
Colombia
31
Cuba
32
33
Ecuador
Guatemala
34
35
Jamaica
Mexico
36
Netherlands Antilles
37
38
Panama
Peru
39
Uruguay
40
41
Venezuela
42
Other
231,506
6,967
76,525
4,056
17,995
88,565
3,271
2,587
0
1,387
191
238
14,851
7,998
1,471
663
786
2,571
1,384
246,137
5,869
87,138
2,270
11,894
107,846
2,805
2,425
0
1,053
228
158
16,567
1,207
1,560
739
599
2,516
1,263
218,133
4,958
60,868
5,934
10,774
101,523
3,397
2,750
0
884
262
162
14,997
1,379
4,654
730
936
2,525
1,400
202,149
3,931
59,418
5,609
10,815
88,975
3,552
2,786
0
807
269
161
15,534
1,971
2,491
691
787
2,495
1,857
197,039
3,942
56,188
3,089
10,710
89,853
3,718
2,876
0
770
256
165
14,967
2,354
2,440
675
778
2,542
1,716
212,620
4,066
59,979
4,319
12,319
97,306
3,675
2,847
1
771
266
184
15,279
3,011
2,549
657
904
2,803
1,684
208,231
4,841
56,833
8,578
10,842
91,566
3,898
2,886
0
732
240
182
15,685
3,172
2,532
651
807
3,001
1,785
207,554r
4,740
56,276r
7,122
10,927
93,116r
3,7%
2,916
0
739
256
181
15,652r
3,153
2,361
667
816
2,876
l,960 r
215,634
4,715
60,906
5,550
11,294
97,409
3,832
2,921
0
701
244
183
15,724
3,155
2,370
617
926
2,835
2,252
211,204
4,3%
60,839
8,929
11,671
88,772
3,856
2,953
0
707
259
175
16,121
3,339
2,491
635
926
2,815
2,320
43
138,722
125,262
131,857
122,414
120,983
122,134
112,8%
lll,196 r
109,098
105,499
620
1,952
10,648
655
933
774
90,699
5,766
1,247
1,573
10,749
13,106
747
2,087
9,617
441
952
860
84,807
6,048
1,910
1,713
8,284
7,796
906
2,046
9,673
529
1,189
820
79,189
6,180
2,145
1,867
18,559
8,754
1,388
1,670
9,215
549
1,432
1,057
71,681
7,048
1,645
1,794
17,909
7,026
881
1,561
10,420
489
1,386
814
71,908
7,152
1,521
1,763
17,937
5,151
1,898
1,840
9,747
438
1,503
777
71,327
7,428
1,402
1,865
17,437
6,472
860
1,549
10,637
470
1,282
733
62,501
7,587
1,357
2,006
16,946
6,968
638
1,585
9,390
442r
1,289
775
64,890"
7,245
1,250
2,018
15,912
5,762
700
1,593
11,153
573
1,329
747
60,263
7,098
1,143
2,146
14,251
8,102
772
1,674
9,638
621
1,268
752
60,307
7,123
1,168
2,151
13,580
6,445
56 Africa
57
Egypt
58
Morocco
59
South Africa
60
Zaire
61
Oil-exporting countries 5
62
Other
5,445
380
513
1,525
16
1,486
1,525
4,928
294
575
1,235
4
1,298
1,522
4,279
186
441
1,041
4
1,002
1,605
3,767
151
3%
924
3
1,128
1,165
3,661
151
420
803
3
1,144
1,140
3,812
177
416
748
3
1,156
1,312
3,856
148
437
742
4
1,232
1,293
3,902
168
443
705
4
1,224
1,358
4,023
176
454
713
3
1,206
1,471
3,911
160
433
663
3
1,179
1,473
63 Other
64
Australia
65
Other
1,892
1,413
479
2,306
1,665
641
3,006
2,262
744
3,251
2,635
616
3,208
2,534
674
3,308
2,574
734
3,368
2,443
925
2,378
1,847
531
2,854
2,419
435
2,921
2,401
520
66 Nonmonetary international and regional
organizations 6
4,793
6,283
5,082
2,417
1,682
2,080
1,307
1,952
2,379
1,230
23 Canada
44
45
46
47
48
49
50
51
52
53
54
55
China
People's Republic of China
Republic of China (Taiwan)
Hong Kong
India
Indonesia
Israel
Japan
Korea (South)
Philippines
Thailand
Middle Eastern oil-exporting countries 4
Other
1. Reporting banks include all types of depository institutions, as well as some
brokers and dealers.
2. Since December 1992, has excluded Bosnia, Croatia, and Slovenia.
3. Includes the Bank for International Settlements and Eastern European
countries not listed in line 23. Since December 1992, includes all parts of the
former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia.
Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania.
4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
5. Comprises Algeria, Gabon, Libya, and Nigeria.
6. Excludes the Bank for International Settlements, which is included in
"Other Western Europe."
Bank-Reported Data
3.19 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS
United States1
Payable in U.S. Dollars
Millions of dollars, end of period
A61
Reported by Banks in the
1993
Claim
1990
1991
1992
Apr.
May
June
471,288
30,390
287,119
97,747
47,816
49,931
56,032
461,179
29,601
282,587
94,727
47,327
47,400
54,264
482,944
29,409
298,972
93,965
46,273
47,692
60,598
July
Aug. r
471,863
32,579
280,120
92,865
44,823
48,042
66,299
461,191
30,287
275,299
94,018
45,490
48,528
61,587
Sept. r
518,807
1 Total
579,044
579,683
560,549
2 Banks' claims
Foreign public borrowers
3
4
Own foreign offices 2
Unaffiliated foreign banks
5
Deposits
6
Other
7
8
All other foreigners
511,543
41,900
304,315
117,272
65,253
52,019
48,056
514,339
37,126
318,800
116,602
69,018
47,584
41,811
500,511
31,376
304,623
109,643
61,277
48,366
54,869
67,501
14,375
65,344
15,280
60,038
15,452
49,883
12,960
41,333
37,125
31,454
23,488
18,475
11,792
12,939
13,132
13,435
13,463
MEMO
13 Customer liability on acceptances
13,628
8,974
8,670
8,121
8,189
14 Dollar deposits in banks abroad,
reported by nonbanking business
enterprises in the United States . . . .
44,638
42,936
36,073
9 Claims of banks' domestic c u s t o m e r s 3 . . .
Deposits
10
Negotiable and readily transferable
11
instruments 4
Outstanding collections and other
12
claims
532,827
33,016
33,840
29,687
3.20 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS
Payable in U.S. Dollars
Millions of dollars, end of period
1 Total
?.
3
4
5
6
7
8
9
10
11
17
13
14
15
16
17
18
19
By borrower
Maturity of one year or less
Foreign public borrowers
All other foreigners
Maturity of more than one year
Foreign public borrowers
All other foreigners
By area
Maturity of one year or less
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other 3
Maturity of more than one year
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other 3
1990
29,302 r
28,345
24,443
n.a.
Reported by Banks in the United States1
1993
1991
Dec.
Mar.
June
Sept."
238,123
206,903
195,302
195,560
182,873
183,236
189,870
178,346
23,916
154,430
59,776
36,014
23,762
165,985
19,305
146,680
40,918
22,269
18,649
162,573
21,050
141,523
32,729
15,859
16,870
163,775
17,809
145,966
31,785
13,279
18,506
152,673
21,210
131,463
30,200
12,220
17,980
154,617
17,943
136,674
28,619
11,252
17,367
162,071
21,221
140,850
27,799
10,498
17,301
53,913
5,910
53,003
57,755
3,225
4,541
49,184
5,450
49,782
53,258
3,040
5,272
51,835
6,444
43,597
51,059
2,549
7,089
53,707
6,0%
50,398
45,726
1,784
6,064
55,292
7,890
45,141
37,895
1,680
4,775
54,357
8,013
48,584
38,818
1,715
3,130
57,229
9,809
51,662
37,677
1,919
3,775
4,121
2,353
45,816
4,172
2,630
684
3,859
3,290
25,774
5,165
2,374
456
3,878
3,595
18,277
4,459
2,335
185
5,367
3,282
15,312
5,034
2,380
410
4,8%
3,117
14,567
5,054
2,130
436
4,561
2,875
13,850
4,794
2,050
489
4,433
2,573
13,544
4,760
2,046
443
1. Reporting banks include sill kinds of depository institutions besides commerrial banks, as well as some brokers and dealers.
465,126
31,329
268,660
92,373
43,816
48,557
72,764
41,281
9,343
1992
1989
477,526
31,926
286,883
96,167
44,671
51,496
62,550
foreign bank, and foreign branches, agencies, or wholly owned subsidiaries of
head office or parent foreign bank.
3. Assets held by reporting banks in the accounts of their domestic customers.
4. Principally negotiable time certificates of deposit and bankers acceptances.
5. Includes demand and time deposits and negotiable and nonnegotiable
certificates of deposit denominated in U.S. dollars issued by banks abroad. For
description of changes in data reported by nonbanks, see Federal Reserve
Bulletin, vol. 65 (July 1979), p. 550.
1. For banks' claims, data are monthly; for claims of banks' domestic customers, data are quarterly.
Reporting banks include all types of depository institution, as well as some
brokers and dealers.
2. For U.S. banks, includes amounts due from own foreign branches and
foreign subsidiaries consolidated in Consolidated Report of Condition filed with
bank regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists principally of amounts due from head office or parent
Maturity, by borrower and area 2
Oct."
2. Maturity is time remaining to maturity,
3. Includes nonmonetary international and regional organizations.
A62
3.21
International Statistics • February 1994
CLAIMS ON FOREIGN COUNTRIES
Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks1
Billions of dollars, end of period
1991
Area or country
1989
1992
1993
1990
Sept.
Dec.
Mar.
June
Sept.
Dec.
Mar.
June
Sept.*
340.9
320.1
338.4
343.6
351.7
359.4
346.0
347.6
363.0
377.6
389.0
152.9
6.3
11.7
10.5
7.4
3.1
2.0
7.1
67.2
5.4
32.3
132.2
5.9
10.4
10.6
5.0
3.0
2.2
4.4
60.9
5.9
24.0
135.0
5.8
11.1
9.7
4.5
3.0
2.1
3.9
65.6
5.8
23.5
137.6
6.0
8.3
5.6
4.7
1.9
3.4
68.5
5.8
22.6
130.9
5.3
10.0
8.4
5.4
4.3
2.0
3.2
64.8
6.5
21.1
136.2
6.2
11.9
8.8
8.0
3.3
1.9
4.6
65.9
6.7
18.7
137.4
6.2
15.3
10.9
6.4
3.7
2.2
5.2
61.8
6.7
18.9
133.9
5.6
15.3
9.3
6.5
2.8
2.3
4.8
61.3
6.6
19.3
143.6
6.1
13.6
9.9
6.7
3.7
3.0
5.3
66.3
8.6
20.4
149.8
7.0
14.0
10.8
7.6
3.7
2.5
4.7
73.5
8.1
17.9
153.0
7.1
12.3
12.4
8.0
3.7
2.5
5.6
74.9
9.7
16.9
13 Other industrialized countries
14 Austria
15 Denmark
16 Finland
17 Greece
18 Norway
19 Portugal
20
Spain
21
Turkey
22
Other Western Europe
23
South Africa
24
Australia
21.0
1.5
1.1
1.0
2.5
1.4
.4
7.1
1.2
1.0
2.0
1.6
22.9
1.4
1.1
.7
2.7
1.6
.6
8.3
1.7
1.2
1.8
1.8
22.1
1.0
.9
.6
2.3
1.4
.5
8.3
1.6
1.3
1.6
2.4
22.8
.6
.9
.7
2.6
1.4
.6
8.3
1.4
1.8
1.9
2.7
21.4
.8
.8
.8
2.3
1.5
.5
7.7
1.2
1.5
1.8
2.3
25.5
.8
1.3
.8
2.8
1.7
.5
10.1
1.5
2.0
1.7
2.3
25.1
.7
1.5
1.0
3.0
1.6
.5
9.8
1.5
1.5
1.7
2.3
24.0
1.2
.9
.7
3.0
1.2
.4
9.0
1.3
1.7
1.7
2.9
25.5
1.2
.8
.7
2.8
1.8
.7
9.5
1.4
2.0
1.6
2.9
27.2
1.3
1.0
.9
3.1
1.8
.9
10.5
2.1
1.7
1.3
2.5
26.0
.6
1.1
.6
3.2
2.1
1.0
9.3
2.1
2.2
1.2
2.8
25 OPEC 2
26
Ecuador
27
Venezuela
28
Indonesia
29
Middle East countries
30
African countries
17.1
1.3
7.0
2.0
5.0
1.7
12.8
1.0
5.0
2.7
2.5
1.7
15.6
.8
5.6
2.8
5.0
1.5
14.5
.7
5.4
2.7
4.2
1.5
15.8
.7
5.4
3.0
5.3
1.4
16.2
.7
5.3
3.0
5.9
1.4
15.9
.7
5.4
3.0
5.4
1.4
16.1
.6
5.2
3.0
6.2
1.1
16.8
.6
5.3
3.1
6.6
1.1
15.9
.6
5.6
3.1
5.4
1.1
14.9
.5
5.6
2.8
4.9
1.1
31 Non-OPEC developing countries
77.5
65.4
64.7
63.9
69.7
68.1
72.8
72.1
74.3
76.5
76.9
6.3
19.0
4.6
1.8
17.7
.6
2.8
5.0
14.4
3.5
1.8
13.0
.5
2.3
4.5
10.5
3.7
1.6
16.2
.4
1.9
4.8
9.6
3.6
1.7
15.5
.4
2.1
5.0
10.8
3.9
1.6
17.7
.4
2.2
5.1
10.6
4.0
1.6
16.3
.4
2.2
6.2
10.8
4.2
1.7
17.1
.5
2.5
6.6
10.8
4.4
1.8
16.0
.5
2.6
7.0
11.6
4.6
1.9
16.8
.4
2.6
6.6
12.3
4.6
1.9
16.7
.4
2.7
7.2
11.6
4.7
2.0
17.5
.3
2.6
1 Total
2 G-10 countries and Switzerland
3
Belgium and Luxembourg
4
France
5
Germany
6
Italy
Netherlands
7
8
Sweden
9
Switzerland
10
United Kingdom
11
Canada
12 Japan
11.0
32
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other
39
40
41
42
43
44
45
46
47
Asia
China
Peoples Republic of China
Republic of China (Taiwan)
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia 3
.3
4.5
3.1
.7
5.9
1.7
4.1
1.3
1.0
.2
3.5
3.3
.5
6.2
1.9
3.8
1.5
1.7
.4
4.1
2.8
.5
6.5
2.3
3.6
1.9
2.0
.3
4.1
3.0
.5
6.8
2.3
3.7
1.7
2.0
.3
4.8
3.6
.4
6.9
2.5
3.6
1.7
2.3
.3
4.6
3.8
.4
6.9
2.7
3.1
1.9
2.5
.3
5.0
3.6
.4
7.4
3.0
3.6
2.2
2.7
.7
5.2
3.2
.4
6.6
3.1
3.6
2.2
2.7
.6
5.3
3.1
.5
6.5
3.3
3.4
2.2
2.7
1.6
5.9
3.1
.4
6.9
3.7
2.9
2.4
2.6
.5
6.4
2.9
.4
6.5
4.1
2.6
2.8
3.0
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa 3
.4
.9
.0
1.0
.4
.8
.0
1.0
.4
.7
.0
.8
.4
.7
.0
.7
.3
.7
.0
.7
.5
.7
.0
.6
.3
.6
.0
.9
.2
.6
.0
1.0
.2
.5
.0
.8
.2
.6
.0
.9
.2
.6
.0
.8
52 Eastern Europe
53
Russia
54
Yugoslavia
55
Other
3.5
.7
1.6
1.3
2.3
.2
1.2
.9
1.8
.4
.8
.7
2.4
.9
.9
.7
2.9
1.4
.8
.6
3.0
1.7
.7
.6
3.1
1.8
.7
.7
3.1
1.9
.6
.6
2.9
1.7
.6
.7
3.2
1.9
.6
.7
3.0
1.7
.6
.7
56 Offshore banking centers
57
Bahamas
58
Bermuda
59
Cayman Islands and other British West Indies
60
Netherlands Antilles
61
Panama
62
Lebanon
63
Hong Kong
64
Singapore
65
Other 5
38.4
5.5
1.7
9.0
2.3
1.4
.1
11.3
7.0
.0
44.7
2.9
4.4
11.7
7.9
1.4
.1
9.7
6.6
.0
54.6
6.7
7.1
13.8
3.9
1.3
.1
14.0
7.7
.0
54.2
11.9
2.3
15.8
1.2
1.4
.1
14.4
7.1
.0
63.0
15.3
3.9
18.6
1.0
1.6
.1
14.0
8.5
.0
61.5
13.0
5.1
19.3
.8
1.9
.1
15.0
6.4
.0
54.6
9.0
3.8
16.9
.7
2.0
.1
15.2
6.8
.0
58.4
6.9
6.2
21.8
1.1
1.9
.1
13.8
6.5
.0
60.1
9.6
4.1
17.6
1.6
2.0
.1
16.7
8.4
.0
57.7
6.9
4.5
15.6
2.5
2.1
.1
16.8
9.3
.0
67.4
12.4
5.5
15.1
2.8
2.1
.1
19.0
10.4
.0
66 Miscellaneous and unallocated 6
30.5
39.9
44.4
48.0
47.8
48.6
36.8
39.7
39.5
47.3
47.6
1. The banking offices covered by these data are the U.S. offices and foreign
branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks.
Offices not covered include (1) U.S. agencies and branches of foreign banks, and
(2) foreign subsidiaries of U.S. banks. U.S. office data include other types of
U.S.-owned depository institutions as well as some types of brokers and dealers.
To minimize duplication, the data are adjusted to exclude the claims on foreign
branches held by a U.S. office or another foreign branch of the same banking
institution. The data in this table combine foreign branch claims in table 3.14 (the
sum of lines 7 through 10) with the claims of U.S. offices in table 3.18 (excluding
those held by agencies and branches of foreign banks and those constituting
claims on own foreign branches).
Since June 1984, reported claims held by foreign branches have been reduced
by an increase in the reporting threshold for "shell" branches from $50 million to
$150 million equivalent in total assets, the threshold now applicable to all
reporting branches.
2. Organization of Petroleum Exporting Countries, shown individually; other
members of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar,
Saudi Arabia, and United Arab Emirates); and Bahrain and Oman (not formally
members of OPEC).
3. Excludes Liberia.
4. Includes Canal Zone.
5. Foreign branch claims only.
6. Includes New Zealand, Liberia, and international and regional
organizations.
Nonbank-Reported Data
3.22
A63
LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in
the United States 1
Millions of dollars, end of period
1993
1992
Type of liability and area or country
1989
1990
1991
June
Sept.
Dec.
Mar.
1 Total
38,764
46,043
43,692
44,879
45,251
46,125
44,322
45,177
2 Payable in dollars
3 Payable in foreign currencies
33,973
4,791
40,786
5,257
38,117
5,575
39,243
5,636
38,480
6,771
37,499
8,626
36,623
7,699
37,064
8,113
By type
4 Financial liabilities
5
Payable in dollars
6
Payable in foreign currencies
17,879
14,035
3,844
21,066
16,979
4,087
22,055
17,760
4,295
22,813
18,407
4,406
22,823
17,503
5,320
24,061
17,092
6,969
22,804
16,178
6,626
23,071
16,348
6,723
7 Commercial liabilities
8
Trade payables
9
Advance receipts and other liabilities . . .
20,885
8,070
12,815
24,977
10,683
14,294
21,637
8,699
12,938
22,066
9,164
12,902
22,428
9,769
12,659
22,064
9,727
12,337
21,518
9,437
12,081
22,106
9,945
12,161
19,938
947
23,807
1,170
20,357
1,280
20,836
1,230
20,977
1,451
20,407
1,657
20,445
1,073
20,716
1,390
11,660
340
258
464
941
541
8,818
10,978
394
975
11,878
236
2,106
682
1,056
408
6,383
12,729
192
1,997
666
1,025
355
7,588
13,460
213
2,324
634
979
490
7,933
14,252
276
2,785
738
980
627
8,044
13,024
434
1,608
810
606
569
8,327
13,343
306
1,610
820
639
503
8,911
10
11
12
13
14
15
16
17
18
Payable in dollars
Payable in foreign currencies
By area or country
Financial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
621
1,081
545
6,357
19
Canada
610
229
292
308
362
345
516
576
20
21
22
23
24
25
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,357
157
17
4,153
371
724
6
4,230
406
114
8
3,088
7
4
3,503
353
114
10
2,352
0
3,160
5
4
4,404
537
114
6
3,144
7
4
3,592
230
115
18
2,528
12
5
3,565
359
114
19
2,382
12
6
3,624
509
114
18
2,307
13
5
27
28
29
Asia
Japan
Middle East oil-exporting countries
4,151
3,299
2
5,295
4,065
5
5,423
4,187
13
5,451
4,192
13
5,409
4,316
10
5,782
4,749
17
5,665
4,639
19
5,467
4,495
24
30
Africa
31
32
33
34
35
36
37
38
39
40
0
0
0
..
Oil-exporting countries
0
0
2
6
4
7
6
0
0
0
5
6
6
9,071
175
877
1,392
710
693
2,620
10,310
275
1,270
844
775
2,792
8,147
248
963
950
710
575
2,311
7,693
256
683
885
574
543
2,446
7,332
240
662
707
605
461
2,405
6,992
173
694
759
601
482
2,282
7,028
298
673
632
557
416
2,478
6,768
269
677
563
667
532
2,157
2
0
0
All other 4
Commercial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
1,218
1,124
1,261
1,014
1,115
1,109
1,114
923
998
41
42
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,224
41
308
100
27
323
164
1,672
12
538
145
30
475
130
1,355
3
310
219
107
307
94
1,704
13
493
230
108
378
168
409
218
73
480
279
1,493
3
325
121
85
326
125
1,619
6
312
211
57
446
130
1,912
18
437
238
87
544
167
48
49
50
Asia
Japan
Middle Eastern oil-exporting countries'
7,550
2,914
1,632
9,483
3,651
2,016
9,335
3,722
1,498
9,895
3,550
1,592
10,445
3,538
1,778
11,026
3,918
1,813
10,815
4,005
1,793
11,109
4,096
1,775
51
52
Africa
Oil-exporting countries
844
422
715
327
646
253
777
389
675
335
559
295
590
236
53
Other 4
1,071
1,013
951
764
574
729
339
1,030
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 1994
CLAIMS ON UNAFFILIATED FOREIGNERS
the United States 1
Reported by Nonbanking Business Enterprises in
Millions of dollars, end of period
1993
1992
Type, and area or country
1989
1990
1991
Mar.
June
Sept.
Dec.
Mar.
June p
1 Total
33,173
35,348
44,799
44,689
46,068
45,755
40,755
45,134
40,849
2 Payable in dollars
3 Payable in foreign currencies
30,773
2,400
32,760
2,589
42,238
2,561
42,057
2,632
43,069
2,999
42,795
2,960
38,247
2,508
42,405
2,729
37,797
3,052
By type
4 Financial claims
5
Deposits
6
Payable in dollars
7
Payable in foreign currencies
8
Other financial claims
9
Payable in dollars
10
Payable in foreign currencies
19,297
12,353
11,364
989
6,944
6,190
754
19,874
13,577
12,552
1,025
6,297
5,280
1,017
27,635
19,856
18,981
875
7,779
6,899
880
27,821
19,969
18,770
1,199
7,852
7,130
722
28,783
19,679
18,324
1,355
9,104
8,397
707
28,395
19,405
18,268
1,137
8,990
7,983
1,007
23,257
14,991
14,202
789
8,266
7,520
746
25,916
16,520
15,464
1,056
9,396
8,670
726
21,480
11,598
10,682
916
9,882
8,985
897
11 Commercial claims
12
Trade receivables
13
Advance payments and other claims
13,876
12,253
1,624
15,475
13,657
1,817
17,164
14,438
2,726
16,868
14,301
2,567
17,285
14,822
2,463
17,360
14,655
2,705
17,498
15,210
2,288
19,218
17,096
2,122
19,369
16,939
2,430
14
15
13,219
657
14,927
548
16,358
806
16,157
711
16,348
937
16,544
816
16,525
973
18,271
947
18,130
1,239
8,463
28
153
152
238
153
7,496
9,645
76
371
367
265
357
7,971
13,277
13
269
287
334
581
11,366
13,834
12
252
266
707
647
11,580
12,871
25
777
358
715
765
8,692
11,229
16
768
296
750
587
8,002
9,131
8
762
330
515
487
6,054
10,180
6
905
382
544
478
6,833
9,407
13
774
377
499
460
6,350
16
17
18
19
20
21
22
Payable in dollars
Payable in foreign currencies
By area or country
Financial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
23
Canada
1,904
2,934
2,642
2,694
2,545
2,281
1,704
2,107
1,758
24
25
26
27
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
8,020
1,890
7
224
5,486
94
20
6,201
1,090
3
68
4,635
177
25
10,634
784
8
351
9,016
212
40
10,244
493
12
346
8,965
212
34
12,001
538
12
331
10,699
244
32
13,731
1,212
65
589
11,422
239
26
11,032
638
40
686
9,196
286
29
9,611
320
79
592
8,159
235
23
6,612
697
258
590
4,558
270
24
31
32
33
Asia
Japan
Middle East oil-exporting countries
590
213
8
860
523
8
640
350
5
617
355
3
952
705
4
717
471
4
806
643
3
3,263
3,066
3
2,961
2,444
10
34
Africa
140
12
37
0
57
1
60
0
57
0
71
1
79
9
128
1
125
1
180
195
385
372
357
366
505
627
617
6,209
242
964
696
479
313
1,575
7,044
212
1,240
807
555
301
1,775
7,992
192
1,583
952
643
295
2,084
7,971
182
1,663
946
646
323
2,085
8,239
255
1,685
919
666
394
2,172
7,909
173
1,824
895
588
305
2,004
7,776
186
1,493
898
541
307
1,941
8,415
169
1,465
960
724
426
2,312
8,770
170
1,452
964
555
441
2,506
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
1,091
1,074
1,111
1,121
1,063
1,138
1,213
1,259
1,285
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,184
58
323
297
36
508
147
2,375
14
246
326
40
661
192
2,649
13
264
425
41
839
203
2,630
12
273
372
45
907
207
2,727
12
291
447
32
859
253
3,213
12
256
406
43
973
307
2,962
27
246
348
38
903
338
3,388
18
195
821
17
967
336
3,376
16
239
780
42
876
310
52
53
54
Asia
Japan
Middle Eastern oil-exporting countries'
3,570
1,199
518
4,127
1,460
460
4,592
1,900
621
4,368
1,796
635
4,499
1,798
609
4,314
1,774
513
4,649
1,812
679
5,295
2,122
756
5,029
1,824
659
55
56
Africa
Oil-exporting countries 3
429
108
488
67
427
95
424
75
428
73
439
60
549
78
454
75
507
97
57
Other 4
393
367
393
354
329
347
349
407
402
1. For a description of the changes in the international statistics tables, see
Federal Reserve Bulletin, vol. 65, (July 1979), p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
Securities Holdings and Transactions
3.24
A65
FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
1993
1993
Transaction and area or country
1991
1992
Jan.Oct.
Apr.
May
June
July
Aug.
Sept. r
Oct.P
32,326
27,840
U.S. corporate securities
STOCKS
211,207
200,116
221,426
226,548
254,328
240,801
25,123
25,454
23,094
22,308
24,310
23,467
24,441
25,046
26,133r
23,693
23,891
23,023
3 Net purchases or sales ( - )
11,091
-5,122
13,527
-331
786
843
-605
2,440 r
868
4,486
4 Foreign countries
10,522
-5,155
13,349
-339
790
815
-652
2,413 r
950
4,574
53
9
-63
-227
-131
-352
3,845
2,177
-134
4,255
1,179
153
174
-4,913
-1,350
-66
-262
168
-3,301
1,407
2,203
-88
-3,943
-3,598
10
169
6,458
-209
1,251
-19
2,442
1,628
-3,138
3,710
-375
6,633
2,657
37
24
-650
-154
137
32
280
-1,140
91
246
7
2
-530
-48
13
-619
-86
6
35
50
-689
-132
509
56
910
452
10
56
415
-66
99
-91
178
195
-532
72
-22
1,073
230
20
-211
-185
45
76
-452
369
-73
-1,400
413
-135
632
626
-49
72
670
-9
202
133
354
-204
-128
613r
-44
1,204
860
63
35
433
-152
112
69
-260
570
-596
139
10
977
1,016
3
-16
3,095
198
328
134
409
1,709
-324
1,245
-77
602
349
5
28
568
33
178
8
-4
28
47
27
-82
-88
153,096
125,637
214,922
175,737
227,175
177,924
20,817
15,765
19,325
15,514
24,091
16,825
22,738
20,730
22,288
16,481r
24,844
16,294
28,465
19,032
27,459
39,185
49,251
5,052
3,811
7,266
2,008
5,807 r
8,550
9,433
2,018
5,801
r
7,864
9,294
3,912
13
-419
219
-205
4,059
249
846
171
2,373
993
236
77
4,779
512
881
-518
203
3,566
95
1,727
375
2,256
1,574
47
15
686
139
1 Foreign purchases
2 Foreign sales
5
6
7
8
9
10
11
12
13
14
15
16
17
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Japan
Africa
Other countries
18 Nonmonetary international and
regional organizations
BONDS2
19 Foreign purchases
20 Foreign sales
21 Net purchases or sales ( - )
22 Foreign countries
23
24
25
26
27
28
29
30
31
32
33
34
35
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Japan
Africa
Other countries
36 Nonmonetary international and
regional organizations
27,590
38,069
48,804
5,073
3,843
7,229
13,112
847
1,577
482
656
8,931
1,623
2,672
1,787
8,459
5,767
52
-116
17,540
1,203
2,480
540
-579
12,526
237
9,300
3,166
7,545
-450
354
-73
18,355
2,091
1,144
-434
-576
15,052
1,280
10,162
2,442
15,346
8,016
1,032
187
1,616
508
815
108
-239
975
291
632
463
2,082
991
0
-11
360
595
228
-7
-219
-303
20
1,262
115
2,062
940
21
3
2,710
-12
-241
-134
-56
3,033
397
1,770
202
2,089
863
2
59
-1,001
-76
2
11
172
-1,214
218
901
147
1,382
890
224
147
2,102 r
64
-207
317
-327
l,84r
164
1,678
158
1,432
919
317
-50
-131
1,116
447
-21
-32
37
-10
6
Foreign securities
37 Stocks, net purchases or sales ( - ) 3
38
Foreign purchases
39
Foreign sales
40 Bonds, net purchases or sales ( - )
41
Foreign purchases
42
Foreign sales
-31,967
120,598
152,565
-14,828
330,311
345,139
-32,295
150,037
182,332
-19,585
486,238
505,823
-54,443
186,143
240,586
-54,419
650,422
704,841
-4,029
19,297
23,326
-2,913
55,766
58,679
-3,793
16,465
20,258
-545
58,771
59,316
-6,317
18,523
24,840
-7,528
70,377
77,905
-7,964
19,620
27,584
-10,633
68,769
79,402
-12,212 r
20,745r
32,95T
— l,046 r
75,84/
76,893 r
-5,119
21,501
26,620
-9,908
80,177
90,085
-6,517
24,758
31,275
-2,580
75,992
78,572
43 Net purchases or sales ( - ) , of stocks and bonds
-46,795
-51,880
-108,862
-6,942
-4,338
-13,845
-18,597
-13,258 r
-15,027
-9,097
r
-15,103
-9,446
-13,173
-1,309
1,945
-2,344
14
-236
-4,853
-1,003
-557
-2,006
14
-1,041
76
349
44 Foreign countries
-46,711
-55,216
-108,987
-7,221
-4,671
-13,907
-18,707
—13,312
45
46
47
48
49
50
-34,452
-7,004
759
-7,350
-9
1,345
-37,284
-6,635
-3,881
-6,654
-2
-760
-80,656
-13,541
-1,124
-10,694
-178
-2,794
-3,252
-818
-2,551
-531
-18
-51
-5,382
11
1,092
-185
-186
-21
-11,719
-1,277
421
-780
9
-561
-15,488
-2,557
-635
121
4
-152
- 10,543r
1,635
—l,127 r
-2,644r
7
-640
-84
3,336
125
279
333
62
NO
Europe
Canada
Latin America and Caribbean
Asia
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.
54
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 1994
MARKETABLE U.S. TREASURY BONDS AND NOTES
Foreign Transactions
Millions of dollars
1993
Country or area
1991
1993
1992
Jan.Oct.
Apr.
May
June
July
Aug.
Sept.
Oct.?
Transactions, net purchases or sales ( - ) during period 1
1 Estimated total
19,865
39,288
8,615
4,232
-1,159
-5,710
-1,531
13,980 -10,890*
2 Foreign countries
19,687
37,935
8,837
4,393
-877
-5,955
-1,144
14,368 - 10,748r
Europe
3
4
Belgium and Luxembourg
5
Germany
6
Netherlands
7
Sweden
8
Switzerland
9
United Kingdom
Other Europe and former U.S.S.R
10
11 Canada
8,663
523
-4,725
-3,735
-663
1,007
6,218
10,037
-3,019
19,625
1,985
2,076
-2,959
-804
488
24,184
-5,345
562
-1,973
1,261
-9,798
-532
1,311
-2,004
8,574
-785
9,048
1,518
-387
-1,382
731
-100
-719
2,659
716
1,386
-190
647
-3,3%
108
649
108
2,948
-1,254
522
1,473
86
-1,100
-393
673
888
2,147
-828
133
-1,539
505
-2,918
524
32
-223
1,455
-914
2,270
3,547
-218
305
-167
293
-74
3,787
-379
324
-5,917
207
1,209
137
53
-209
-8,201
887
-1,119
3,4%
-205
1,176
-506
47
448
829
1,707
-342
12 Latin America and Caribbean
Venezuela
13
Other Latin America and Caribbean
14
15
Netherlands Antilles
16
Japan
17
18 Africa
19 Other
10,285
10
4,179
6,097
3,367
-4,081
689
-298
-3,222
539
-1,956
-1,805
23,517
9,817
1,103
-3,650
-1,932
314
-4,828
2,582
4,757
10,760
1,006
-2,069
-2,020
74
1,0%
-3,190
3,813
3,324
67
-371
-3,880
152
-1,863
-2,169
2,994
3,291
-2
-321
-1,419
5
711
-2,135
-5,687
-301
81
-536
-333
2
510
-845
-2,587
-980
116
929
6,917
-7
1,178
5,746
3,755
3,561
292
-467
-3,311
32
-1,700
-1,643
—574r
-1,809
616
-443
3,701
-102
676
3,127
-2,009
156
74
161
178
-358
-72
1,353
1,018
533
-222
-1,276
615
-161
-228
16
-282
-318
-17
245
402
106
-387
-321
-21
-388
-698
30
— 142r
—99r
18
-1,135
-879
-23
19,687
1,190
18,4%
37,935
6,876
31,059
8,837
-8,787
17,624
4,393
2,709
1,684
-877
-3,424
2,547
-5,955
-760
-5,195
-1,144
-4,880
3,736
14,368 -10,748 r
724
3,181 r
13,644 -13,929*
5,081
1,623
3,458
-6,822
239
4,317
11
-8,914
4
114
-4
-1,070
0
-2,443
0
-1,261
0
20 Nonmonetary international and regional organizations
International
21
Latin American regional
22
MEMO
23 Foreign countries
24
Official institutions
Other foreign 2
25
Oil-exporting countries
26 Middle E a s t 2
27
1. Official and private transactions in marketable U.S. Treasury securities
having an original maturity of more than one year. Data are based on monthly
transactions reports. Excludes nonmarketable U.S. Treasury bonds and notes
held by official institutions of foreign countries.
-1,172
0
-980
0
3,946
5,081
-820
0
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
A67
3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS 1
Percent per year
Country
Country
Country
Percent
5.25
5.25
4.11
6.50
6.20
Austria..
Belgium .
Canada..
Denmark
France . .
Month
effective
Nov.
Dec.
Dec.
Nov.
Dec.
1993
1993
1993
1993
1993
Germany...
Italy
Japan
Netherlands
1. Rates shown are mainly those at which the central bank either discounts or
makes advances against eligible commercial paper or government securities for
commercial banks or brokers. For countries with more than one rate applicable to
such discounts or advances, the rate shown is the one at which it is understood
that the central bank transacts the largest proportion of its credit operations.
3.27
Rate on Dec. 31, 1993
Rate on Dec. 31, 1993
Rate on Dec. 31, 1993
Percent
Month
effective
5.75
8.0
1.75
5.0
Oct. 1993
Oct. 1993
Sept. 1993
Dec. 1993
Norway
Switzerland
United Kingdom
Percent
Month
effective
7.0
4.0
12.0
Oct. 1993
Dec. 1993
Sept. 1992
2. Since February 1981, the rate has been that at which the Bank of France
discounts Treasury bills for seven to ten days.
FOREIGN SHORT-TERM INTEREST RATES 1
Percent per year, averages of daily figures
1993
Type or country
g Italy
1991
5.86
11.47
9.07
9.15
8.01
9.19
9.49
12.04
9.30
7.33
1992
3.70
9.56
6.76
9.42
7.67
9.25
10.14
13.91
9.31
4.39
1993
3.18
5.88
5.14
7.17
4.79
6.74
8.31
10.10
8.11
2.96
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.
3.21
5.83
4.91
7.51
4.99
6.64
7.19
10.18
6.87
3.23
3.17
5.88
4.48
7.12
4.62
6.45
7.72
9.42
7.12
3.22
3.14
5.79
4.58
6.49
4.56
6.27
7.45
9.20
9.02
3.02
3.08
5.88
4.90
6.52
4.61
6.26
7.07
9.05
9.82
2.59
3.26
5.74
4.76
6.53
4.44
6.20
6.85
8.69
9.05
2.44
3.36
5.52
4.34
6.20
4.44
5.85
6.56
8.94
7.93
2.31
3.26
5.28
4.09
5.99
4.10
5.51
6.39
8.57
7.05
2.06
A68 International Statistics • February 1994
3.28 FOREIGN EXCHANGE RATES1
Currency units per dollar except as noted
1993
Country/currency unit
1
2
3
4
5
6
7
8
9
10
Australia/dollar 2
Austria/schilling
Belgium/franc
Canada/dollar
China, P.R./yuan
Denmark/krone
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
11
12
13
14
15
16
17
18
19
20
Hong Kong/dollar
India/rupee
Ireland/pound 2
Italy/lira
Japan/yen
Malaysia/ringgit
Netherlands/guilder
New Zealand/dollar 2
Norway/krone
Portugal/escudo
21
22
23
24
25
26
27
28
29
30
Singapore/dollar
South Africa/rand
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
United Kingdom/pound 2
MEMO
31 United States/dollar 3
1991
1992
1993
Aug.
Sept.
Oct.
Nov.
Dec.
77.872
11.686
34.195
1.1460
5.3337
6.4038
4.0521
5.6468
1.6610
182.63
73.521
10.992
32.148
1.2085
5.5206
6.0372
4.4865
5.2935
1.5618
190.81
67.993
11.639
34.581
1.2902
5.7795
6.4863
5.7251
5.6669
1.6545
229.64
67.788
12.071
35.483
1.2820
5.7756
6.6531
5.7852
5.8464
1.7157
234.77
67.736
11.920
35.985
1.3080
5.7906
6.8976
5.8315
5.9298
1.6944
237.64
65.167
11.402
34.847
1.3215
5.8015
6.6336
5.7868
5.6724
1.6219
232.56
66.100
11.540
35.674
1.3263
5.8013
6.6379
5.7554
5.7541
1.6405
237.93
66.465
11.958
36.227
1.3174
5.8086
6.7667
5.8143
5.9069
1.7005
243.43
67.364
12.025
35.694
1.3308
5.8210
6.7042
5.7602
5.8477
1.7105
245.51
7.7712
22.712
161.39
1,241.28
134.59
2.7503
1.8720
57.832
6.4912
144.77
7.7402
28.156
170.42
1,232.17
126.78
2.5463
1.7587
53.792
6.2142
135.07
7.7357
31.291
146.47
1,573.41
111.08
2.5738
1.8585
54.127
7.0979
161.08
7.7556
31.600
140.83
1,586.02
107.69
2.5672
1.9299
54.900
7.3179
167.87
7.7515
31.612
139.05
1,603.75
103.77
2.5514
1.9062
55.261
7.3579
173.27
7.7384
31.578
143.40
1,569.10
105.57
2.5475
1.8214
55.157
7.0829
166.28
7.7307
31.505
143.19
1,600.93
107.02
2.5478
1.8438
55.260
7.1755
169.60
7.7272
31.434
140.31
1,666.31
107.88
2.5548
1.9084
54.787
7.3882
173.93
7.7245
31.440
141.82
1,687.17
109.91
2.5737
1.9162
55.631
7.4211
174.58
1.7283
2.7633
736.73
104.01
41.200
6.0521
1.4356
26.759
25.528
176.74
1.6294
2.8524
784.58
102.38
44.013
5.8258
1.4064
25.160
25.411
176.63
1.6158
3.2729
805.75
127.48
48.205
7.7956
1.4781
26.416
25.333
150.16
1.6206
3.3518
809.58
134.93
48.643
7.9802
1.5147
26.682
25.331
149.55
1.6100
3.3660
811.94
138.51
48.750
8.0466
1.4966
26.950
25.191
149.14
1.5972
3.4135
811.84
130.54
48.854
8.0170
1.4182
26.931
25.196
152.48
1.5735
3.3924
813.45
132.18
48.954
8.0195
1.4432
26.865
25.269
150.23
1.5950
3.3680
809.79
137.27
49.187
8.2660
1.4969
26.884
25.382
148.08
1.5975
3.3788
812.57
140.42
49.322
8.3501
1.4634
26.768
25.460
149.13
89.84
86.61
93.18
94.59
94.32
92.07
93.29
1. Averages of certified noon buying rates in New York for cable transfers.
Data in this table also appear in the Board's G.S (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
July
95.47
95.73
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 1993
Anticipated schedule of release dates for periodic releases
Page
A78
SPECIAL TABLES—Quarterly Data Published Irregularly, with Latest Bulletin Reference
Title and Date
Issue
Page
Assets and liabilities of commercial banks
December 31, 1992
March 31, 1993
June 30, 1993
September 30, 1993
May
August
November
February
1993
1993
1993
1994
A70
A70
A70
A70
Terms of lending at commercial banks
February 1993
May 1993
August 1993
November 1993
May
August
November
February
1993
1993
1993
1994
A76
A76
A76
A76
Assets and liabilities of US. branches and agencies of foreign banks
December 31, 1992
March 31, 1993
June 30, 1993
September 30, 1993
May
August
November
February
1993
1993
1993
1994
A80
A80
A80
A80
Pro forma balance sheet and income statements for priced service
June 30, 1991
September 30, 1991
March 30, 1992
June 30, 1992
November
January
August
October
1991
1992
1992
1992
A80
A70
A80
A70
December
May
August
March
1991
1992
1992
1993
A79
A81
A83
A71
Assets and liabilities of life insurance companies
June 30, 1991
September 30, 1991
December 31, 1991
September 30, 1992
operations
A70
Special Tables • February 1994
4.20 DOMESTIC AND FOREIGN OFFICES Insured Commercial Bank Assets and Liabilities1
Consolidated Report of Condition, September 30, 1993
Millions of dollars except as noted
Banks with foreign offices 2
Item
1 Total assets 4
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
5
Currency and coin
6
Balances due from depository institutions in the United States
7
Balances due from banks in foreign countries and foreign central banks
8
Balances due from Federal Reserve Banks
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)
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
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
Banks with domestic
offices only 3
Total
Total
Foreign
Domestic
Over 100
Under 100
3,605,757
2,015,148
476,587
1,629,957
1,244,739
345,870
266,386
181,030
79,322
n.a.
n.a.
26,224
58,278
17,206
76,044
2,155
n.a.
n.a.
18,063
54,806
1,020
104,986
77,168
60,031
17,137
8,161
3,472
16,185
66,123
36,200
23,901
12,299
15,772
2,871
11,280
19.233
6,012
12,841
7,520
4
T
1
n.a.
1
•
n.a.
n.a.
2,987,563
1,555,350
812,242
346,454
n.a.
I1
n.a.
1
t
1,119,162
313,051
31,234
315,220
349,454
116,333
283,669
118,076
165,593
92,790
n.a.
n.a.
n.a.
n.a.
644,594
n.a.
n.a.
268,135
98,898
169,237
7,914
4,247
3,667
260,221
94,651
165,570
173,119
n.a.
75,108
n.a.
87,948
81,289
20,138
28,794
3,470
197
558
123
84,478
81,092
19,580
28,671
67,438
98,155
37,656
22,060
17,733
n.a.
17,314
n.a.
4,581
50,972
n.a.
13,572
5,786
3,713
2,109
36
7,786
2,407
26,387
23,086
6,302
1,683
851
832
1
4,619
0
123
21,578
1,062
294
10
284
0
769
2,407
26,264
1,508
5,240
1,389
841
548
0
3,851
2,038
20,022
328
5,741
3,104
1,972
1,148
16
2,637
136
4,564
n.a.
1,528
999
890
129
19
529
146,177
122,045
24,132
2,089,676
6,871
2,082,805
53,231
430
2,029,144
85,119
64,083
21,036
1,160,797
2,592
1,158,205
34,002
427
1,123,777
752
n.a.
n.a.
211,956
899
211,057
n.a.
n.a.
n.a.
84,368
n.a.
n.a.
948,842
1,693
947,148
n.a.
n.a.
n.a.
45,643
42,685
2,958
743,257
3,132
740,125
16,058
3
724,064
15,415
15,277
138
185,622
1,147
184,475
3,171
0
181,303
893,766
404,771
21,959
386,534
27,170
7,832
212,806
30,776
182,031
13,607
125,119
5,407
4,959
235
212
102,461
6,276
10,887
55,701
2,837
52,864
2,277
27,320
287
n.a.
n.a.
n.a.
T
37,676
n.a.
n.a.
n.a.
•
31,982
13,221
397
18,364
T
16,276
857
46
15,373
1
1
382,813
34,560
2,097
222,672
40,392
182,279
12,697
110,788
15,706
12,364
352
2,991
37,279
526,806
n.a.
n.a.
1,851
n.a.
n.a.
5,165
371,928
293,620
78,308
1,390
388
1,003
182
95,103
19,407
75,6%
867
8
859
4,983
276,826
274,213
2,612
524
380
144
12,252
124,779
124,311
468
358
n.a.
n.a.
19,862
30,099
n.a.
n.a.
102
n.a.
n.a.
400,556
142,041
258,514
181,678
73,066
108,613
21,732
n.a.
n.a.
159,946
n.a.
n.a.
188,855
67,308
121,547
30,022
1,668
28,355
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
22,657
1,800
20,857
133,375
n.a.
n.a.
n.a.
n.a.
12,293
1,190
11,103
122,891
24,345
98,546
n.a.
n.a.
332
213
119
52,144
22,520
29,624
n.a.
n.a.
11,961
977
10,984
70,747
1,825
68,922
20,653
48,269
9,199
565
8,634
9,360
49
9,311
2,186
7,125
1,165
45
1,120
1,124
n.a.
n.a.
n.a.
n.a.
67
68
69
70
71
72
73
74
75
35,709
112,912
54,691
20,236
3,246
14,401
n.a.
16,630
129,692
28,697
110,926
29,657
13,050
2,839
14,037
n.a.
9,903
98,356
3,361
70,181
25,336
40,519
n.a.
n.a.
n.a.
n.a.
53,108
n.a.
n.a.
6,513
1,814
19,273
5,861
378
348
n.a.
6,269
25,512
499
172
5,761
1,325
29
15
n.a.
458
5,825
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
49
50
51
52
53
54
55
56
57
58
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
Credit cards and related plans
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 Act and agreement subsidiaries, and IBFs . . .
Intangible assets
Other assets
I
T
1
T
1
4
T
1
n.a.
n.a.
n.a.
1
1
1
1
4
T
i
n.a.
1
1
T
Commercial Banks
All
4.20 DOMESTIC AND FOREIGN OFFICES Insured Commercial Bank Assets and Liabilities1—Continued
Consolidated Report of Condition, September 30, 1993
Millions of dollars except as noted
Banks with foreign offices 2
Item
Banks with doinestic
offices only
Total
Over 100
Foreign
Domestic
476,581
n.a.
1,483,246
n.a.
1,138,960
1,041,156
967,319
2,579
30,799
18,921
3,252
5,886
931
11,468
n.a.
1,008,724
940,960
1,660
46,086
8,126
4,561
219
72
7,039
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
96
Foreign governments and official institutions
97
Certified and official checks
98
All other
392,069
337,878
2,248
14,113
17,748
2,303
5,584
727
11,468
n.a.
311,803
278,695
1,282
17,548
5,836
1,179
186
38
7,039
n.a.
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
175,190
153,188
1,240
6,517
5,814
1,169
186
38
7,039
n.a.
696,920
662,265
378
28,538
2,290
436
1,853
3,382
33
Total
76 Total liabilities, limited-life preferred stock, and equity capital
3,605,757
2,015,148
77 Total liabilities 5
78
Limited-life preferred stock
3,319,152
4
1,868,431
2,675,745
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
All other®
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
1,363,716
21,376
n.a.
25,576
12,370
n.a.
n.a.
202,041
131,874
70,167
n.a.
133,282
14,097
34,306
n.a.
92,675
146,717
824
n.a.
n.a.
n.a.
47,864
3,839
n.a.
n.a.
n.a.
n.a.
201,217
n.a.
n.a.
28,314
85,418
10,258
n.a.
38,289
n.a.
n.a.
72,357
40,913
31,444
5,980
32,200
348
2,413
n.a.
16,938
105,778
614
170
444
62,648
23,338
16,420
982
588
66,445
16,089
13,482
3,211
15,438
239,046
129,616
190,831
76,356
13,238
107,361
757,509
10,271
176,460
136,921
296
84,505
2,708
134,091
833,533
907,595
723,203
n.a.
277,928
174,472
103,456
n.a.
167,358
14,461
36,756
n.a.
112,292
286,601
—
11,042
Footnotes appear at the end
of table 4.22
I
24,645
902
97,048
1
283,646
235,047
2,007
8,768
17,748
2,302
5,581
725
11,468
n.a.
649,087
629,441
331
16,686
1,173
90
1,083
949
302
14
288
204
n.a.
Quarterly averages
145 Total loans
146 Obligations (other than securities) of states and political subdivisions
in the United States
147 Transaction accounts in domestic offices (NOW accounts, automated transfer service
(ATS) accounts, and telephone and preauthorized transfer accounts)
Nontransaction accounts in domestic offices
148
Money market deposit accounts
149
Other savings deposits
150
Time certificates of deposit of $100,000 or more
151
All other time deposits
152 Number of banks
322,561
199,966
n.a.
Federal funds purchased and securities sold under agreements to repurchase
Federal fiinds 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 owed to own foreign offices, Edge Act and agreement subsidiaries, and IBFs
All other liabilities
Total equity capital 7
MEMO
Holdings of commercial paper included in total loans, gross
Total individual retirement (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
All negotiable order of withdrawal (NOW) accounts (including Super NOWs)
Total time and savings deposits
0
1,244,739
209
1
32
35
n.a.
12,455
9,046
110,249
136,090
243,775
129,639
81,452
213,876
176,892
135,770
83,323
302,101
2,845
Under 100
A72
4.21
Special Tables • February 1994
DOMESTIC OFFICES Insured Commercial Banks with Assets of $100 Million or More or With Foreign Offices1
Consolidated Report of Condition, September 30, 1993
Millions of dollars except as noted
Members
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 noldings of U.S. government-issued or guaranteed certificates of
participation in pools of residential mortgages
13
All other
14
Securities issued by states and political subdivisions in the United States
15
Other domestic debt securities
16
All holdings of private certificates of participation in pools of residential mortgages . .
17
All other domestic debt securities
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
Loans to 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 loans)
52 Loans to foreign governments and official institutions
53 Obligations (outer 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 Act and agreement subsidiaries, and IBFs
Remaining assets
Total
Total
National
State
2,874,696
2,252,286
1,733,493
518,793
171,109
83.932
29,436
23.933
6,343
27,466
140,685
74,260
24,080
15,963
4,735
21,646
110,396
57,391
19,550
13,155
4,163
16,137
30,289
16,870
4,530
2,808
571
5,510
2,481,958
1,920,270
1,506,868
413,402
664,674
212,726
331,163
505,227
156,539
259,732
377,459
121,101
192,449
127,768
35,438
67,283
151,916
179,248
57,236
50,731
4,445
46,286
1,836
10,981
4,493
2,813
1,696
16
6,488
124,722
135,010
39,762
39,972
3,673
36,299
1,351
7,872
2,117
1,331
792
6
5,754
90,781
101,668
28,054
28,366
2,854
25,512
1,144
6,345
1,788
1,176
617
5
4,558
33,941
33,342
11,707
11,606
818
10,787
207
1,526
330
156
175
130,011
42,685
2,958
1,692,098
4,825
1,687,273
109,364
28,998
1,630
1,308,816
3,137
1,305,679
84,695
24,774
1,332
1,047,035
2,321
1,044,713
24,669
4,224
298
261,782
816
260,966
769,347
61,730
9,928
435,478
71,168
364,310
26,304
235,907
17,323
587
3,203
17,235
573,069
46,053
5,871
333,449
55,269
278,180
18,555
169,142
14,368
330
3,035
11,664
464,470
37,237
4,903
271,071
44,785
226,285
14,961
136,298
11,451
244
1,684
10,088
108,599
8,816
968
62,378
10,483
51,895
3,593
32,844
2,917
85
1,351
1,576
401,605
398,524
3,081
328,598
325,813
2,785
263,297
261,003
2,294
65,301
64,810
491
881
525
271
632
361
237
476
216
233
156
145
4
348,802
67,308
121,547
1,874
258,605
46,502
75,103
1,846
211,916
42,568
59,304
871
46,688
3,934
15,800
975
21,160
1,542
19,618
78,233
22,839
55,394
17,219
1,273
15,946
72,800
21,420
51,380
12,649
892
11,757
48,490
11,183
37,308
4,570
382
4,189
24,309
10,237
14,072
31,849
10,479
53,108
211,150
26,650
9,857
45,952
181,474
21,398
7,169
17,319
109,061
5,252
2,688
28,633
72,414
1
1,197
Commercial Banks All
4.21
DOMESTIC OFFICES Insured Commercial Banks with Assets of $100 Million or More or With Foreign Offices1—Continued
Consolidated Report of Condition, September 30, 1993
Millions of dollars except as noted
Members
Item
Nonmembers
Total
Total
National
State
63 Total liabilities and equity capital
2,874,696
2,252,286
1,733,493
518,793
5
622,410
2,622,207
2,055,667
1,582,521
473,146
566,540
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
2,049,879
1,908,279
4,239
76,885
27,047
7,814
6,105
1,004
18,508
1,577,842
1,467,447
3,569
56,309
23,940
4,949
5,650
922
15,056
1,247,391
1,163,042
3,072
43,876
18,755
3,983
3,622
647
10,394
330,451
304,406
497
12,433
5,184
966
2,028
275
4,662
472,038
440,832
670
20,576
3,107
2,865
455
82
3,451
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
703,872
616,574
3,529
31,661
23,584
3,482
5,770
765
18,508
561,120
487,561
2,949
24,423
22,165
2,809
5,439
718
15,056
439,472
383,755
2,551
18,965
17,626
2,166
3,503
514
10,394
121,648
103,806
398
5,458
4,539
643
1,937
205
4,662
142,752
129,013
580
7,238
1,419
673
331
46
3,451
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
458,837
388,234
3,247
15,285
23,562
3,471
5,767
763
18,508
373,937
312,418
2,684
12,655
22,164
2,804
5,439
717
15,056
286,484
240,561
2,304
9,424
17,625
2,161
3,503
513
10,394
87,454
71,857
380
3,231
4,539
643
1,936
205
4,662
84,899
75,816
563
2,631
1,397
667
328
46
3,451
1,346,007
1,291,706
709
45,224
3,463
526
2,936
4,331
335
15
320
239
1,016,721
979,886
620
31,886
1,775
89
1,686
2,140
211
15
1%
203
807,918
779,286
521
24,911
1,130
60
1,070
1,817
119
15
105
133
208,803
200,600
99
6,975
645
29
616
323
91
0
91
70
329,286
311,819
90
13,338
1,688
438
1,250
2,191
124
0
124
36
273,574
40,913
31,444
34,294
117,618
10,606
2,413
38,289
133,822
231,542
30,535
20,060
31,662
89,710
9,985
1,723
28,371
113,203
160,775
25,738
15,669
20,609
61,949
7,259
1,415
26,062
83,122
70,767
4,797
4,390
11,053
27,761
2,726
308
2,309
30,081
42,032
10,378
11,385
2,632
27,908
621
690
9,918
20,618
252,489
196,620
150,972
45,647
55,870
1,032
129,093
39,427
29,902
4,193
405
100,172
27,282
20,534
2,883
385
80,846
22,025
16,985
2,649
20
19,327
5,257
3,549
234
627
28,921
12,145
9,368
1,310
25,709
17,651
14,336
3,315
8,058
415,506
266,537
487,158
160,861
15,946
241,452
1,591,043
329,983
200,894
360,142
112,697
13,006
185,110
1,203,904
262,287
150,050
295,078
93,357
7,146
151,238
960,907
67,6%
50,844
65,064
19,340
5,859
33,871
242,997
85,523
65,643
127,016
48,164
2,940
56,343
387,138
1,630,798
21,501
1,257,292
17,612
1,005,927
12,814
251,365
4,798
373,506
3,889
246,339
188,677
153,676
35,001
57,661
420,667
265,410
164,775
515,977
334,365
200,281
117,447
384,582
263,531
148,896
97,453
309,371
70,834
51,386
19,994
75,211
86,302
65,128
47,328
131,395
3,054
1,622
1,320
302
1,432
64 Total liabilities
97 Total nontransaction accounts
93 Individuals, partnerships, and corporations
94 U.S. government
95 States and political subdivisions in the United States
% Commercial banks in the United States
U.S. branches and agencies of foreign banks
97
98
Other commercial banks in the United States
99 Other depository institutions in the United States
100 Banks in foreign countries
Foreign branches of other U.S. banks
101
Other banks in foreign countries
102
103 Foreign governments and official institutions
104
105
106
107
108
109
110
111
112
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 owed to own foreign offices, Edge Act and agreement subsidiaries, and IBFs
Remaining liabilities
113 Total equity capital7
114
115
116
117
118
119
120
17,1
122
123
124
125
126
MEMO
Holdings of commercial paper included in total loans, gross
Total individual retirement (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 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
VI
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)
NO
131
137
133
Nontransaction accounts
Money market deposit accounts
Other savings deposits
Time certificates of deposits of $100,000 or more
All other time deposits
134 Number of banks
Footnotes appear at the end of table 4.22
A74
Special Tables • February 1994
4.22 DOMESTIC OFFICES Insured Commercial Bank Assets and Liabilities1
Consolidated Report of Condition, September 30, 1993
Millions of dollars except as noted
Members
Item
Total
National
State
3,220,566
2,383,483
1,833,028
550,454
190,342
32,859
26,373
131,110
148,311
25,377
15,220
107,713
116,316
20,551
12,240
83,525
31,995
4,827
2,980
24,188
2,798,181
2,039,811
1,597,356
442,455
781,007
636,680
74,551
57,267
4,582
52,686
12,509
5,492
3,703
1,825
35
7,017
145,425
57,962
3,096
1,877,720
5,972
1,871,748
550,367
452,949
45,849
42,988
3,740
39,248
8,581
2,512
1,697
828
13
6,069
115,699
35,298
1,666
1,377,329
3,584
1,373,745
412,782
342,438
32,701
30,733
2,903
27,830
6,910
2,119
1,486
645
11
4,791
89,335
29,391
1,355
1,097,894
2,655
1,095,239
137,585
110,511
13,148
12,255
837
11,418
1,671
393
211
184
2
1,278
26,364
5,907
310
279,435
929
278,506
871,808
68,006
20,816
491,179
74,005
417,174
28,580
263,227
610,735
48,437
9,271
354,243
56,424
297,818
19,415
179,369
492,250
38,936
7,537
286,296
45,553
240,743
15,612
143,869
118,485
9,501
1,734
67,947
10,871
57,076
3,803
35,500
21,400
37,097
431,704
984
17,940
18,179
340,391
664
13,544
15,126
271,882
503
4,3%
3,053
68,509
161
378,824
68,976
149,902
22,325
1,587
20,738
81,232
32,347
10,494
53,108
221,549
269,892
47,152
85,740
17,608
1,290
16,318
75,108
26,813
9,869
45,952
185,492
220,431
43,090
67,2%
12,954
902
12,051
49,674
21,530
7,177
17,319
112,180
49,461
4,061
18,444
4,654
387
4,267
25,434
5,283
2,692
28,633
73,312
48 Total liabilities and equity capital.
3,220,566
2,383,483
1,833,028
550,454
5
2,933,968
2,174,145
1,672,381
501,764
50 Total deposits
51
Individuals, partnerships, and corporations
52
U.S. government
53
States and political subdivisions in the United States
54
Commercial banks in the United States
55
Other depository institutions in the United States . . .
56
Certified and official checks
57
All other
2,353,185
2,186,923
4,632
96,626
28,213
9,167
20,474
7,151
1,693,028
1,573,702
3,736
63,197
24,592
5,331
15,881
6,589
1,334,900
1,243,908
3,205
49,311
18,948
4,240
11,015
4,273
358,128
329,794
531
13,885
5,644
1,091
4,866
2,316
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 o t h e r .
793,717
695,943
3,811
39,157
24,127
3,643
20,474
6,563
596,516
518,881
3,063
27,012
22,625
2,879
15,881
6,174
466,571
407,893
2,643
21,0%
17,680
2,223
11,015
4,021
129,946
110,988
420
5,917
4,944
656
4,866
2,154
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
AH other
501,916
426,498
3,515
17,148
24,100
3,624
20,474
6,558
391,470
327,818
2,795
13,308
22,620
2,873
15,881
6,173
299,530
252,242
2,393
9,%7
17,676
2,217
11,015
4,020
91,940
75,576
402
3,341
4,944
656
4,866
2,153
1,559,468
1,490,980
821
57,469
4,086
5,524
588
1,096,512
1,054,821
673
36,185
1,967
2,451
415
868,329
836,015
562
28,216
1,267
2,017
253
228,183
218,806
111
7,%9
700
435
162
1 Total assets4
2 Cash and balances due from depository institutions
3
Currency and coin
4
Non-interest-bearing balances due from commercial banks
5
Other
6 Total securities, loans, and lease-financing receivables (net of unearned income)
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Total securities, book value
U.S. Treasury securities and U.S. government agency and corporation obligations . .
Securities issued by states and political subdivisions in the United States
Other debt securities
All holdings of private certificates of participation in pools of residential mortgages
All other
Equity securities
Marketable
Investments in mutual funds
Other
LESS: Net unrealized loss
Other equity securities
Federal funds sold and securities purchased under agreements to resell 8
Federal ftinds 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)
Total loans, gross, by category
25 Loans secured by real estate
26
Construction and land development
27
Farmland
28
One- to four-family residential properties
29
Revolving, open-end loans, and extended under lines of credit.
30
All other loans
31
Multifamily (five or more) residential properties
32
Nonfarm nonresidential properties
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
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)
Credit cards and related plans
Other (includes single payment installment)
Obligations (other than securities) of states and political subdivisions in the United States
Taxable
Tax-exempt
All other loans
Lease-financing receivables
Customers' liability on acceptances outstanding
Net due from own foreign offices, Edge Act and agreement subsidiaries, and IBFs
Remaining assets
49 Total liabiUties
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 DOMESTIC OFFICES Insured Commercial Bank Assets and Liabilities1—Continued
Consolidated Report of Condition, September 30, 1993
Millions of dollars except as noted
Members
81
82
83
84
85
86
87
88
89
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 owed to own foreign offices, Edge Act and agreement subsidiaries, and IBFs
Remaining liabilities
90 Total equity capital 7
91
92
93
94
95
96
97
98
99
MEMO
Assets held in trading accounts
U.S. Treasury securities
U.S. government agency corporation obligations
Securities issued by states and political subdivisions in the United States
Other bonds, notes, and debentures
Certificates of deposit
Commercial paper
Bankers acceptances
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
Nonmembers
Total
Item
Total
National
State
277,104
42,598
33,289
34,612
119,494
10,622
2,450
38,289
136,501
233,047
31,273
20,827
31,772
90,324
9,997
1,735
28,371
114,242
161,734
26,131
16,235
20,691
62,429
7,267
1,421
26,062
83,939
71,313
5,141
4,592
11,081
27,895
2,730
313
2,309
30,303
44,057
11,325
12,461
2,840
29,170
625
716
9,918
22,259
286,598
209,338
160,647
48,691
77,260
42,505
20,786
5,753
1,841
1,420
1,633
37
2,880
7,324
40,889
20,363
5,554
1,760
1,392
1,483
37
2,713
7,319
22,950
10,166
4,489
1,043
912
1,033
37
1,643
3,392
17,939
10,197
1,065
717
480
450
0
1,070
3,928
1,616
423
198
81
28
150
0
167
5
146,342
40,086
30,534
4,759
106,465
27,509
20,749
3,076
85,663
22,202
17,155
2,800
20,802
5,307
3,595
276
39,877
12,577
9,785
1,682
25,775
17,673
14,354
3,319
8,102
453,481
306,613
5%,089
186,425
16,860
286,978
1,851,268
345,319
216,754
398,828
122,319
13,292
202,523
1,301,558
273,875
161,860
324,506
100,715
7,374
164,983
1,035,370
71,444
54,894
74,322
21,604
5,918
37,540
266,188
108,162
89,859
197,261
64,106
3,568
84,455
549,710
1,811,681
1,324,026
1,055,444
268,582
487,655
293,021
206,472
167,687
38,786
86,549
averages
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 March 31, 1984, the report of condition for commercial banks was
substantially revised. 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. (4) Banks with assets of less than $25 million are
excused from reporting certain detail items.
The notation " n . a . " indicates the lesser detail available from banks that don't
have 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
that have foreign offices.
All transactions between domestic and foreign offices of a bank are reported in
"net due f r o m " and " n e t due t o " lines. 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. " O v e r 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
458,424
304,990
189,822
626,044
349,539
215,944
126,908
423,445
275,003
160,576
104,686
338,907
74,536
55,369
22,223
84,537
108,885
89,046
62,914
202,600
11,042
4,351
3,384
967
6,691
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 file the
FFIEC 034 Call Report.)
4. Because the domestic portion of allowances for loan and lease losses and
allocated transfer risk reserves 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) do 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
under agreements to repurchase 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, components do not sum to totals.
A76 Special Tables • February 1994
4.23
TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 1-5, 19931
Commercial and Industrial Loans
Characteristic
Amount of
loans
(thousands
of dollars)
Average
size
(thousands
of dollars)
Weighted
average
maturity 2
Days
Loan rate (percent)
Standard
error 4
Loans
secured
by
collateral
(percent)
Loans
made
under
commitment
(percent)
Participation
loans
(percent)
.23
8.2
56.1
3.7
4.29
4.05
4.72
27.9
23.8
35.0
74.1
78.2
66.9
9.3
12.7
3.3
5.15
4.49
5.64
51.0
46.7
54.2
79.3
77.9
5.1
6.6
4.0
5.22
4.01
5.71
59.5
26.5
72.9
65.7
69.6
64.1
6.3
7.9
5.6
Weighted
average
effective 3
ALL BANKS
1 Overnight 6
11,933,295
7,287
2 One month or less (excluding
overnight)
3
Fixed rate
4
Floating rate
7,059,083
4,500,684
2,558,400
1,047
1,242
820
5 More than one month and less than
one year
Fixed rate
Floating rate
9,045,033
3,845,564
5,199,469
176
183
171
8 Demand 7
9
Fixed rate
10
Floating rate
16,267,448
4,714,349
11,553,099
322
880
256
11 Total short-term
44,304,860
402
4.65
38.9
67.2
5.8
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 or more
24,993,440
358,081
455,367
378,164
3,644,673
3,844,537
16,312,618
792
14
206
680
2,390
6,631
20,543
30
144
92
45
38
27
25
3.95
8.08
6.38
5.09
4.46
4.07
3.62
20.4
81.7
69.8
50.5
28.5
19.1
15.4
66.5
53.8
50.9
82.9
70.5
73.1
64.4
6.6
2.2
2.8
8.2
10.1
5.7
19 Floating rate (thousands of dollars).
20
1-99
21
100-499
22
500-999
23
1,000-4,999
24
5,000-9,999
25
10,000 or more
19,311,420
1,470,021
3,061,160
1,645,694
4,180,317
2,003,498
6,950,730
245
25
198
678
2,041
6,652
21,493
123
176
178
162
154
129
62
5.56
7.41
6.94
6.68
5.88
5.25
4.20
62.9
84.5
78.4
70.3
61.3
48.5
54.7
68.2
86.0
87.1
81.4
84.5
69.6
42.8
4.8
1.5
3.2
12.1
8.4
5.4
2.3
6
7
155
132
172
81.2
1.0
Months
26 Total long-term
6,034,383
246
5.60
60.5
77.4
7.0
27 Fixed rate (thousands of dollars) . .
28
1-99
29
100-499
30
500-999
31
1,000 or more
2,025,966
233,108
162,734
107,373
1,522,751
160
20
216
585
6,072
5.38
8.33
7.50
6.99
4.59
47.1
87.6
87.4
72.2
34.8
60.4
21.4
39.2
27.9
70.9
8.6
4.0
1.3
10.6
32 Floating rate (thousands of dollars)
33
1-99
34
100-499
35
500-999
36
1,000 or more
4,008,417
236,546
533,703
368,387
2,869,782
337
29
209
675
4,379
5.70
7.60
7.13
6.53
5.18
67.2
82.9
82.7
68.2
62.9
86.0
57.7
73.6
89.2
90.2
6.2
2.1
5.7
13.1
5.8
1.8
Loan rate (percent)
Days
Effective 3
Nominal 8
LOANS MADE BELOW PRIME10
37 Overnight 6
38 One month or less (excluding
overnight)
39 More than one month and less than
one vear
40 Demand 7
11,584,924
9,055
3.64
3.63
6.8
54.8
3.8
6,324,463
4,037
21
3.93
3.92
26.0
73.5
9.9
5,658,182
8,781,550
895
3,299
141
4.00
3.82
3.98
3.79
35.8
47.2
83.9
47.3
4.8
5.8
3.79
26.6
3.73
3.96
17.6
50.0
66.1
49.5
6.9
2.5
43.8
83.0
29.7
56.0
71.8
92.6
41 Total short-term
32,349,119
2,734
42 Fixed rate
43 Floating rate
23,384,896
8,964,223
3,587
1,687
3.74
3.99
5.7
Months
44 Total long-term
3,050,093
45 Fixed rate
46 Floating rate . .
1,410,961
1,639,132
Footnotes appear at the end of the table.
4.21
505
1,668
4.30
4.13
4.27
4.09
11.5
1.5
Financial Markets
4.23
TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 1-5, 1993—Continued
Commercial and industrial loans—Continued
Characteristic
Amount of
loans
(thousands
of dollars)
Average
size
(thousands
of dollars)
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)
LARGE BANKS
1 Overnight 6
9,196,233
6,870
3.80
9.1
56.7
4.0
2 One month or less (excluding
overnight)
3
Fixed rate
4
Floating rate
4,960,769
3,785,442
1,175,327
3,747
5,879
1,728
4.24
4.01
4.99
21.7
22.7
18.4
83.0
82.2
85.4
11.4
13.0
6.5
5 More than one month and less than
one year
Fixed rate
Floating rate
5,273,805
2,683,479
2,590,326
983
3,452
564
4.35
3.88
4.84
38.6
39.0
38.2
86.4
91.7
80.9
4.0
5.6
2.3
8 Demand 7
9
Fixed rate
10
Floating rate
11,378,666
3,812,506
7,566,161
649
3,061
464
4.88
3.93
5.36
58.3
24.9
75.2
56.3
68.2
50.4
6.2
9.7
4.4
11 Total short-term
30,809,474
1,205
4.36
34.4
65.9
6.0
12 Fixed rate (thousands of dollars)
13
1-99
14
100-499
15
500-999
16
1,000-4,999
17
5,000-9,999
18
10,000 or more
19,477,660
25,479
148,864
275,407
2,573,110
3,121,355
13,333,445
4,863
31
249
692
2,401
6,745
20,255
27
69
42
34
25
21
29
3.88
6.75
5.49
5.10
4.38
4.12
3.68
19.0
73.7
62.2
51.3
25.3
17.5
16.8
68.7
62.9
76.2
85.1
75.9
72.6
66.0
7.1
1.1
1.5
3.8
6.0
10.6
6.7
19 Floating rate (thousands of d o l l a r s ) . . .
20
1-99
21
100-499
22
500-999
23
1,000-4,999
24
5,000-9,999
25
10,000 or more
11,331,814
427,264
1,236,084
677,470
2,100,889
1,521,589
5,368,518
526
33
206
675
2,061
6,898
22,813
121
164
170
164
152
148
77
5.20
7.22
6.80
6.40
5.77
5.38
4.25
60.8
82.7
74.7
65.9
54.9
54.3
59.5
61.0
92.1
92.2
92.9
81.8
71.3
36.2
4.1
1.4
4.3
6.8
4.7
7.1
3.0
6
7
148
129
168
Months
26 Total long-term
3,402,384
1,043
5.20
50.4
89.0
9.4
27 Fixed rate (thousands of dollars)
28
1-99
29
100-499
30
500-999
31
1,000 or more
1,112,132
7,184
23,980
30,018
1,050,950
2,308
33
250
709
8,543
4.39
7.46
6.35
5.57
4.30
39.3
90.8
77.5
32.7
38.3
83.4
46.9
65.3
64.2
84.7
14.2
1.3
6.2
.0
14.8
32 Floating rate (thousands of dollars) . . .
33
1-99
34
100-499
35
500-999
36
1,000 or more
2,290,251
36,650
263,352
250,483
1,739,767
824
40
237
664
4,611
5.59
6.89
6.85
6.58
5.23
55.7
80.4
76.2
65.9
50.6
91.7
89.3
90.1
86.3
92.8
7.2
5.1
6.3
12.8
6.5
Loan rate (percent)
Days
Effective 3
Nominal 8
LOANS MADE BELOW PRIME10
37 Overnight 6
38 One month or less (excluding
overnight)
39 More than one month and less than
one vear
40 D e m a n d 7
8,849,116
8,559
3.71
3.69
7.4
55.0
4.2
4,535,379
5,998
19
3.91
3.90
20.1
83.1
12.2
4,210,816
7,227,232
4,545
5,381
142
3.78
3.77
3.77
3.74
31.4
52.7
87.0
39.2
3.9
6.8
41 Total short-term
24,822,544
6,114
42 Fixed rate
43 Floating rate
18,558,580
6,263,964
6,696
4,863
27.0
61.0
6.4
3.74
3.83
17.5
54.9
67.6
41.2
7.4
3.2
3.99
37.2
91.8
4.01
3.97
33.2
41.4
86.8
97.1
3.78
27
113
3.75
3.86
Months
44 Total long-term
1,908,765
4,766
45 Fixed rate
46 Floating rate . .
971,909
936,856
6,586
3,704
Footnotes appear at the end of the table.
39
4.02
4.00
16.0
2.4
All
A78
4.23
Special Tables • February 1994
TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 1-5, 1993 l —Continued
Commercial and industrial loans—Continued
Characteristic
Amount of
loans
(thousands
of dollars)
Average
size
(thousands
of dollars)
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
2,737,062
9,157
3.43
4.9
54.0
2.4
2 One month or less (excluding
overnight)
3
Fixed rate
4
Floating rate
2,098,314
715,242
1,383,072
387
240
567
4.42
4.28
4.49
42.4
29.6
49.0
53.1
56.9
51.2
4.2
11.3
.5
5 More than one month and less than
one year
Fixed rate
Floating rate
3,771,228
1,162,085
2,609,144
82
58
101
6.27
5.89
6.43
68.5
64.6
70.2
69.4
57.0
74.9
6.7
8.8
5.7
8 Demand 7
9
Fixed rate
10
Floating rate
4,888,782
901,843
3,986,939
148
219
138
6.01
4.35
6.38
62.1
33.4
68.6
87.6
75.6
90.3
6.4
.4
7.8
11 Total short-term
6
7
13,495,386
159
12 Fixed rate (thousands of dollars)
13
1-99
14
100-499
15
500-999
16
1,000-4,999
17
5,000-9,999
18
10,000 or more
5,515,780
332,602
306,503
102,757
1,071,563
723,182
2,979,173
200
13
190
651
2,361
19 Floating rate (thousands of dollars) . . .
20
1-99
21
100-499
22
500-999
23
1,000-4,999
24
5,000-9,999
25
10,000 or more
7,979,606
1,042,757
1,825,076
968,224
2,079,428
481,909
1,582,212
164
138
176
5.31
49.2
70.3
5.3
4.21
21,944
39
147
109
78
66
52
7
5.07
4.65
3.86
3.40
25.3
82.3
73.5
48.4
36.3
25.6
9.2
58.6
53.1
38.6
77.0
57.6
75.2
56.9
4.6
1.0
2.5
.0
13.7
8.3
140
23
194
680
2,020
5,981
17,966
124
178
180
161
155
85
43
6.07
7.49
7.03
6.88
5.99
4.85
4.02
65.7
85.2
80.9
73.5
67.8
30.2
38.7
78.5
83.5
83.7
73.3
87.1
64.1
65.2
5.8
1.6
2.4
15.8
6,182
8.18
6.81
1.2
12.1
.0
.0
Months
2,631,999
124
6.11
73.5
62.4
3.9
27 Fixed rate (thousands of dollars) . . .
28
1-99
29
100-499
30
500-999
31
1,000 or more
913,833
225,925
138,753
77,355
471,800
75
20
211
548
3,692
6.58
8.36
7.69
7.54
5.25
56.6
87.5
89.2
87.5
27.2
32.3
20.6
34.7
13.8
40.2
1.9
4.1
32 Floating rate (thousands of dollars).
33
1-99
34
100-499
35
500-999
36
1,000 or more
1,718,166
199,896
270,350
117,904
1,130,015
189
28
188
699
4,065
5.86
7.73
7.40
6.41
5.10
82.5
83.4
89.1
73.1
78.3
51.9
57.6
95.5
86.2
5.0
1.6
5.1
13.6
4.7
26 Total long-term
81.8
1.0
1.7
1.2
Loan rate (percent)
Days
Effective 3
Nominal 8
LOANS MADE BELOW PRIME10
37 Overnight 6
38 One month or less (excluding
overnight)
39 More than one month and less than
one vear
40 D e m a n d 7
2,735,808
11,144
3.43
3.41
4.9
54.0
2.4
1,789,084
2,208
25
3.99
3.96
41.0
49.4
3.9
1,447,366
1,554,317
268
1,179
137
4.65
4.04
4.61
4.03
48.5
21.5
74.9
85.2
7.5
1.3
41 Total short-term
7,526,575
968
3.92
3.90
25.3
63.4
3.5
42 Fixed rate
43 Floating rate
4,826,316
2,700,259
1,288
671
3.72
4.30
3.69
4.27
17.9
38.5
60.3
68.9
4.9
1.1
54.8
68.2
4.93
4.31
4.86
4.26
21.8
75.5
38.6
86.7
Months
44 Total long-term
1,141,328
45 Fixed rate
46 Floating rate . .
439,052
702,276
Footnotes appear at the end of the table.
166
963
.18
1.7
.2
Financial Markets
A79
4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 1-5, 1993—Continued
NOTES
1. The survey of terms of bank lending to business collects data on gross loan
extensions made during the first full business week in the mid-montn of each
quarter by a sample of 340 commercial banks of all sizes. A sample of 250 banks
reports loans to farmers. The sample data are blown up to estimate the lending
terms at all insured commercial banks during that week. The estimated terms of
bank lending are not intended for use in collecting the terms of loans extended
over the entire quarter or residing in the portfolios of those banks. Construction
and land development loans include both unsecure loans and loans secured by real
estate. Thus, some of the construction and land development loans would be
reported on the statement of condition as real estate loans and the remainder as
business loans. Mortgage loans, purchased loans, foreign loans, and loans of less
that $1,000 are excluded from the survey. As of September 30, assets of most of
the large banks were at least $7.0 billion. For all insured banks, total assets
averaged $275 million.
2. Average maturities are weighted by loan size; excludes demand loans.
3. Effective (compounded) annual interest rate calculated from the stated rate
and other terms of the loans and weighted by loan size.
4. The chances are about two out of three that the average rate shown would
differ by less than the amount of the standard error from the average rate that
would be found by a complete survey of lending at all banks.
5. The rate used to price the largest dollar volume of loans. Base pricing rates
include the prime rate (sometimes referred to as a 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 rate calculated from the stated
rate and other terms of the loans and weighted by loan size.
9. Calculated by weighting the prime rate reported by each bank by the volume
of loans reported by that bank, summing the results, and then averaging over all
reporting banks.
10. The proportion of loans made at rates below the prime may vary substantially from the proportion of such loans outstanding in banks' portfolios.
A80
Special Tables • February 1994
4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 19931
Millions of dollars, except as noted
All states 2
Item
Total
including
IBFs 3
New York
IBFs
only 3
Total
including
IBFs
Illinois
California
IBFs
only
Total
including
IBFs
IBFs
only
Total
including
IBFs
IBFs
only
682,830
299,987
520,854
238,155
73,124
33,838
53,768
20,349
2 Claims on nonrelated parties
3 Cash and balances due from depository institutions
4
Cash items in process of collection and unposted
debits
5
Currency and coin (U.S. and foreign)
6
Balances with depository institutions in United States . .
7
U.S. branches and agencies of other foreign banks
(including 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
Other banks in foreign countries and foreign central
11
banks
Balances with Federal Reserve Banks
12
604,516
138,882
179,113
112,666
453,929
118,047
145,630
93,228
67,759
7,495
14,803
6,981
53,431
11,930
13,954
11,675
3,128
24
91,480
0
n.a.
69,805
2,986
16
78,094
0
n.a.
57,409
10
2
5,276
0
n.a.
4,803
93
1
7,462
0
n.a.
7,314
85,973
67,415
73,179
55,123
4,995
4,722
7,334
7,304
5,508
2,390
4,915
2,286
281
81
128
10
43,821
748
42,861
665
36,599
574
35,819
491
2,183
97
2,178
97
4,366
74
4,361
74
43,072
429
42,197
n.a.
36,025
353
35,328
n.a.
2,086
25
2,081
n.a.
4,292
8
4,286
n.a.
13 Total securities and loans
373,190
55,279
256,062
42,589
54,219
6,854
36,315
2,000
87,859
31,476
13,885
n.a.
80,594
30,761
12,762
n.a.
3,894
334
662
n.a.
2,868
318
441
n.a.
1 Total assets4
14 Total securities, book value
15
U.S. Treasury
Obligations of U.S. government agencies and
16
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
Commercial banks in United States
70
21
Other
77 Total loans, gross
73
LESS: Unearned income on loans
24 EQUALS: Loans, net
Total loans, gross, by category
75 Real estate loans
26 Loans to depository institutions
Commercial banks in United States (including IBFs)
77
78
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
37
Foreign branches of U.S. banks
33
Other banks in foreign countries
34 Loans to other financial institutions
35 Commercial and industrial loans
36
U.S. addressees (domicile)
Non-U.S. addressees (domicile)
37
38 Acceptances of other banks
39
U.S. banks
Foreign banks
40
41 Loans to foreign governments and official institutions
(including foreign central banks)
42 Loans for purchasing or carrying securities (secured and
unsecured)
43 All other loans
539
122
n.a.
n.a.
19,021
n.a.
18,260
n.a.
37,361
13,885
31,573
12,762
3,021
662
2,428
441
41,814
13,985
4,564
23,265
5,153
3,381
45
1,727
39,721
12,534
4,326
22,862
4,636
3,064
45
1,527
1,058
718
44
296
482
282
0
200
649
517
31
101
0
0
0
0
285,455
123
285,332
41,402
7
41,395
175,550
81
175,469
29,832
5
29,827
50,345
20
50,325
6,193
1
6,192
33,456
10
33,446
1,559
0
1,559
47,576
40,634
17,385
14,622
2,763
416
26,366
8,617
8,393
224
24,880
29,718
11,918
9,943
1,975
172
18,734
5,552
5,380
171
14,858
5,774
3,663
3,528
135
202
4,407
2,427
2,389
38
4,522
2,006
1,495
978
516
40
1,031
609
609
0
2
23,246
257
22,989
21,083
0
17,749
179
17,570
777
2
17,798
242
17,556
18,107
0
13,182
173
13,009
637
0
2,111
11
2,101
943
0
1,980
6
1,974
12
0
512
0
512
1,415
0
422
0
422
17
158,744
140,244
18,500
880
368
512
10,510
259
10,251
12
0
12
88,504
75,650 *
12,854
594
328
266
7,481
232
7,249
2
0
2
28,189
25,780
2,409
120
8
112
1,468
12
1,456
0
0
0
24,197
23,439
757
4
0
4
428
0
428
0
0
0
4,562
3,078
3,431
2,600
136
103
220
44
6,533
5,444
119
124
6,232
4,083
119
86
149
176
0
0
80
1,013
0
0
50,630
15,219
11,207
4,012
6,015
n.a.
n.a.
n.a.
40,099
10,622
7,277
3,345
5,177
n.a.
n.a.
n.a.
4,987
3,336
2,974
362
485
n.a.
n.a.
n.a.
4,537
788
714
75
280
n.a.
n.a.
n.a.
35,411
78,314
6,015
120,874
29,477
66,925
5,177
92,524
1,651
5,364
485
19,036
3,749
337
280
6,395
78,314
n.a.
66,925
n.a.
5,364
n.a.
n.a.
120,874
52 Total liabilities 4
682,830
53 Liabilities to nonrelated parties
569,075
44 All other assets
Customers' liabilities on acceptances outstanding
45
46
U.S. addressees (domicile)
47
Non-U.S. addressees (domicile)
48
Other assets including other claims on nonrelated
parties
49 Net due from related depository institutions
50
Net due from head office and other related depository
institutions
51
Net due from establishing entity, head offices, and other
related depository institutions 5
337
n.a.
n.a.
6,395
33,838
53,768
20,349
33,346
30,431
15,090
n.a.
92,524
n.a.
19,036
299,987
520,854
238,155
73,124
275,891
464,814
221,620
58,198
U.S. Branches and Agencies
4.30
A81
ASSETS A N D LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 19931—Continued
Millions of dollars, except as noted
All states 2
Item
54 Total deposits and credit balances
55
Individuals, partnerships, and corporations
56
U.S. addressees (domicile)
57
Non-U.S. addressees (domicile)
58 Commercial banks in United States (including IBFs).
59
U.S. branches and agencies of other foreign banks
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)
68
Individuals, partnerships, and corporations
69
U.S. addressees (domicile)
70
Non-U .S. addressees (domicile)
71
Commercial banks in United States (including IBFs).
72
U.S. branches and agencies of other foreign banks
73
Other commercial banks in United States
74
Banks in foreign countries
75
Foreign branches of U.S. banks
76
Other banks in foreign countries
77
Foreign governments and official institutions
(including foreign central banks)
78
All other deposits and credit balances
79
Certified and official checks
80 Demand deposits (included in transaction accounts
and credit balances)
81
Individuals, partnerships, and corporations
82
U.S. addressees (domicile)
83
Non-U.S. addressees (domicile)
84
Commercial banks in United States (including IBFs).
85
U.S. branches and agencies of other foreign banks
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 Nontransaction 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 IBFs).
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 IBFs).
110
U.S. branches and agencies of other foreign banks
111
Other commercial banks in United States
112
Banks in foreign countries
113
Foreign branches of U.S. banks
114
Other banks in foreign countries
115
Foreign governments and official institutions
(including foreign central banks)
116 All other deposits and credit balances
Footnotes appear at end of table.
Total
excluding
IBFs 3
IBFs
only 3
New York
Total
excluding
IBFs
IBFs
only
Illinois
California
Total
excluding
IBFs
IBFs
only
5,354
433
141,063
101,051
87,448
13,603
23,574
12,795
10,778
7,283
2,582
4,700
204,074
11,896
174
11,722
62,357
56,125
6,232
109,305
3,945
105,361
124,683
86,730
79,130
7,600
22,468
12,246
10,222
6,916
2,581
4,335
187,114
7,583
173
7,409
57,742
51,956
5,786
103,081
3,723
99,357
4,522
4,185
2,472
1,713
80
43
37
46
2,879
5,563
713
20,340
175
2,559
5,347
663
18,583
125
185
6
20
0
46
9,124
6,772
5,043
1,729
159
22
137
990
3
987
7,576
5,526
4,443
1,083
154
20
133
816
3
814
289
218
165
52
2
382
107
713
321
97
663
7
6
20
8,532
6,271
4,872
1,399
154
18
136
953
3
950
7,283
5,302
4,359
944
150
16
133
781
3
779
236
171
136
35
356
85
713
306
81
663
131,939
94,279
82,406
11,874
23,414
12,773
10,641
6,293
2,580
3,713
2,496
5,456
0
433
2,039
1,874
164
2,032
130
1,901
851
0
Total
excluding
IBFs
4,684
3,919
2,847
1,072
674
471
203
81
0
81
2
1
7
339
328
321
7
0
0
0
1
0
1
0
2
37
0
37
325
314
307
7
37
0
0
0
1
0
1
1
0
1
37
0
7
2
20
7
117,107
81,204
74,687
6,517
22,315
12,226
10,089
6,100
2,579
3,521
4,233
3,967
2,306
1,661
78
43
35
9
4,345
3,591
2,526
1,065
673
471
203
80
9
80
2,238
5,250
179
0
1
1
0
0
0
0
204,074
11,896
174
11,722
62,357
56,125
6,232
109,305
3,945
105,361
187,114
7,583
173
7,409
57,742
51,956
5,786
103,081
3,723
99,357
20,340
175
18,583
125
5,354
433
0
433
2,039
1,874
164
2,032
130
1,901
851
0
A82
4.30
Special Tables • February 1994
ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 1993
Continued
Millions of dollars, except as noted
All states 2
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
Branch or agency liability on acceptances executed
130
and outstanding
Other liabilities to nonrelated parties
131
132 Net due to related depository institutions 5
Net owed to head office and other related depository
133
institutions
Net owed to establishing entity, head office, and other
134
related depository institutions
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
139
Predetermined interest rates
140
Floating interest rates
141 Commercial and industrial loans with remaining maturity
of more than one year
142
Predetermined interest rates
Floating interest rates
143
Total
including
IBFs 3
New York
IBFs
only3
Total
including
IBFs
California
Illinois
IBFs
only
Total
including
IBFs
IBFs
only
Total
including
IBFs
IBFs
only
66,116
14,915
12,600
38,600
112,126
11,716
3,526
168
8,023
55,006
53,833
9,768
8,405
35,661
63,125
7,480
1,234
57
6,189
22,616
7,933
3,630
2,723
1,581
35,986
2,468
1,718
68
681
25.053
3,948
1,442
1,375
1,132
10,784
1,629
543
27
1,060
6,732
39,146
9,333
22,266
2.237
15,133
5,697
4,629
1,051
18,173
1,914
14,538
901
4,143
1,278
2,724
265
29,813
32,185
1,422
30,764
40,794
20,028
30,274
1,371
28,902
2,466
9,436
17,600
706
16,895
30,392
3,578
15,844
685
15,159
2,143
16,260
10,376
603
9,773
7,436
13,637
10,270
598
9,672
245
2,865
3,929
83
3,846
2,712
2,459
3,929
83
3,846
79
45,697
5,094
36,059
4,410
4,402
472
4,466
181
15,916
29,781
n.a.
5,094
11,258
24,801
n.a.
4,410
3,337
1,066
n.a.
472
804
3,662
n.a.
181
23,337
5,260
113,754
24,096
56,040
16,535
14,926
113,754
n.a.
56,040
n.a.
14,926
n.a.
24,096
n.a.
16,535
n.a.
1,452
669
13
1,202
629
13
492
n.a.
492
106
4
0
23,337
n.a.
n.a.
5,260
46
26
2,478
1,776
476
53
94,939
59,987
34,952
50,918
31,288
19,630
17,209
10,656
6,552
15,345
11,567
3,778
63,804
21,643
42,161
n.a.
37,586
12,738
24,848
n.a.
10,981
4,107
6,874
n.a.
8,852
3,626
5,226
0
n. a.
U.S. Branches and Agencies
A83
4.30 ASSETS A N D LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 19931—Continued
Millions of dollars, except as noted
All states 2
Item
144 Components of total nontransaction accounts,
included in total deposits and credit balances of
nontransaction 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 3
New York
IBFs
only 3
t
123,025
89,668
t
27,219
n.a.
24,363
10,497
\
n.a.
*
8,994
Total
including
IBFs
Total
including
IBFs
Total
excluding
IBFs
IBFs
only
Total
excluding
IBFs
4,871
2,960
•
4,521
2,740
1
n.a.
»
1,395
n.a.
*
876
California
IBFs
only
Total
including
IBFs
IBFs
only
386
1,036
New York
IBFs
only
IBFs
only
Illinois
Total
including
IBFs
IBFs
only
89,086
13,973
81,525
12,822
3,991
679
2,8%
447
68,424
562
n.a.
33,068
264
n.a.
27,538
129
n.a.
0
6,057
51
n.a.
0
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." The 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. 11 tables are not strictly comparable because of differences in reporting panels
and in definitions of balance sheet items. IBF, international banking facility.
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). Since December 31, 1985, data for IBFs
have been 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 that no IBF data have been reported for that item, either because the
IBFs
only
137,141
99,425
All states 2
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 filed5
Total
excluding
IBFs
Illinois
California
0
0
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
owed to related banking institutions in the United States and in foreign countries
(see note 5). On the former monthly branch and agency report, available through
the G . l l statistical release, gross balances were included in total assets and total
liabilities. Therefore, total asset and total liability figures in this table are not
comparable to those in the G . l l tables.
5. Related depository institutions includes the foreign head office and other
U.S. and foreign branches and agencies of a bank, a 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, 22, 23
Assets and liabilities (See also Foreigners)
Banks, by classes, 20-23
Domestic finance companies, 36
Federal Reserve Banks, 11
Financial institutions, 28
Foreign banks, U.S. branches and agencies, 24, 80-83
Automobiles
Consumer installment credit, 39
Production, 47,48
BANKERS acceptances, 10, 23, 26
Bankers balances, 20-23, 80-83. (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 35
Rates, 26
Branch banks, 24, 55
Business activity, nonfinancial, 45
Business expenditures on new plant and equipment, 35
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 46
Capital accounts
Banks, by classes, 20, 71, 73, 75
Federal Reserve Banks, 11
Central banks, discount rates, 67
Certificates of deposit, 26
Commercial and industrial loans
Commercial banks, 18, 22, 70, 72, 74
Weekly reporting banks, 22-24
Commercial banks
Assets and liabilities, 20-23, 76-79
Commercial and industrial loans, 18, 20, 21, 22, 23, 24
Consumer loans held, by type and terms, 39, 70, 72, 74
Deposit interest rates of insured, 16
Loans sold outright, 22
Nondeposit funds, 19, 80-83
Number by classes, 71, 73,75
Real estate mortgages held, by holder and property, 38
Terms of lending, 76-79
Time and savings deposits, 4
Commercial paper, 25, 26, 36
Condition statements (See Assets and liabilities)
Construction, 45,49
Consumer installment credit, 39
Consumer prices, 45, 46
Consumption expenditures, 52, 53
Corporations
Nonfinancial, assets and liabilities, 35
Profits and their distribution, 35
Security issues, 34, 65
Cost of living (See Consumer prices)
Credit unions, 39
Currency and coin, 70, 72, 74
Currency in circulation, 5, 14
Customer credit, stock market, 27
DEBITS to deposit accounts, 17
Debt (See specific types of debt or securities)
Demand deposits
Banks, by classes, 20-24
Ownership by individuals, partnerships, and
corporations, 24
Turnover, 17
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, 20-23, 24
Federal Reserve Banks, 5,11
Interest rates, 16
Turnover, 17
Discount rates at Reserve Banks and at foreign central banks and
foreign countries (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 35
EMPLOYMENT, 45
Eurodollars, 26
FARM mortgage loans, 38
Federal agency obligations, 5, 10, 11, 12, 31, 32
Federal credit agencies, 33
Federal finance
Debt subject to statutory limitation, and types and ownership
of gross debt, 30
Receipts and outlays, 28, 29
Treasuryfinancingof surplus, or deficit, 28
Treasury operating balance, 28
Federal Financing Bank, 28, 33
Federal funds, 7, 19, 22, 23, 24, 26, 28
Federal Home Loan Banks, 33
Federal Home Loan Mortgage Corporation, 33, 37, 38
Federal Housing Administration, 33, 37, 38
Federal Land Banks, 38
Federal National Mortgage Association, 33, 37, 38
Federal Reserve Banks
Condition statement, 11
Discount rates (See Interest rates)
U.S. government securities held, 5, 11, 12, 30
Federal Reserve credit, 5,6, 11, 12
Federal Reserve notes, 11
Federally sponsored credit agencies, 33
Finance companies
Assets and liabilities, 36
Business credit, 36
Loans, 39
Paper, 25, 26
Financial institutions, loans to, 22, 23, 24
Float, 51
Flow of funds, 40, 42, 43,44
Foreign banks, assets and liabilities of U.S. branches and
agencies, 23, 24, 80-83
Foreign currency operations, 11
Foreign deposits in U.S. banks, 5,11, 22, 23
Foreign exchange rates, 68
Foreign trade, 54
A85
Foreigners
Claims on, 55, 57, 60, 61, 62, 64
Liabilities to, 23, 54, 55, 57, 58, 63, 65, 66
GOLD
Certificate account, 11
Stock, 5, 54
Government National Mortgage Association, 33, 37, 38
Gross domestic product, 51
HOUSING, new and existing units, 49
INCOME, personal and national, 45, 51, 52
Industrial production, 45, 47
Installment loans, 39
Insurance companies, 30, 38
Interest rates
Bonds, 26
Commercial banks, 76-79
Consumer installment credit, 39
Deposits, 16
Federal Reserve Banks, 8
Foreign central banks and foreign countries, 67
Money and capital markets, 26
Mortgages, 37
Prime rate, 25
International capital transactions of United States, 53-67
International organizations, 57, 58, 60, 63, 64
Inventories, 51
Investment companies, issues and assets, 35
Investments (See also specific types)
Banks, by classes, 20, 21, 22, 23, 24
Commercial banks, 4, 18, 20-23, 72
Federal Reserve Banks, 11, 12
Financial institutions, 38
LABOR force, 45
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 20-23
Commercial banks, 4, 18, 20-23, 70, 72, 74
Federal Reserve Banks, 5, 6, 8, 11, 12
Financial institutions, 38
Insured or guaranteed by United States, 37, 38
MANUFACTURING
Capacity utilization, 46
Production, 46,48
Margin requirements, 27
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 7
Reserve requirements, 9
Mining production, 48
Mobile homes shipped, 49
Monetary and credit aggregates, 4, 13
Money and capital market rates, 26
Money stock measures and components, 4, 14
Mortgages (See Real estate loans)
Mutual funds, 35
Mutual savings banks (See Thrift institutions)
NATIONAL defense outlays, 29
National income, 51
OPEN market transactions, 10
PERSONAL income, 52
Prices
Consumer and producer, 45, 50
Stock market, 27
Prime rate, 25
Producer prices, 45, 50
Production, 45, 47
Profits, corporate, 35
REAL estate loans
Banks, by classes, 18, 22, 23, 38, 72
Terms, yields, and activity, 37
Type of holder and property mortgaged, 38
Repurchase agreements, 7, 19, 22, 23, 24
Reserve requirements, 9
Reserves
Commercial banks, 20
Depository institutions, 4, 5, 6,13
Federal Reserve Banks, 11
U.S. reserve assets, 54
Residential mortgage loans, 37
Retail credit and retail sales, 39,40,45
SAVING
Flow of funds, 40, 42, 43, 44
National income accounts, 51
Savings and loan associations, 38, 39,40. (See also SAIF-insured
institutions)
Savings banks, 38, 39
Savings deposits (See Time and savings deposits)
Securities (See also specific types)
Federal and federally sponsored credit agencies, 33
Foreign transactions, 65
New issues, 34
Prices, 27
Special drawing rights, 5, 11, 53, 54
State and local governments
Deposits, 22, 23
Holdings of U.S. government securities, 30
New security issues, 34
Ownership of securities issued by, 22, 23
Rates on securities, 26
Stock market, selected statistics, 27
Stocks (See also Securities)
New issues, 34
Prices, 27
Student Loan Marketing Association, 33
TAX receipts, federal, 29
Thrift institutions, 4. (See also Credit unions and Savings and
loan associations)
Time and savings deposits, 4, 14, 16, 19, 20, 21, 22, 23, 24,
71,73, 75
Trade, foreign, 54
Treasury cash, Treasury currency, 5
Treasury deposits, 5, 11, 28
Treasury operating balance, 28
UNEMPLOYMENT, 45
U.S. government balances
Commercial bank holdings, 20, 21, 22, 23
Treasury deposits at Reserve Banks, 5, 11, 28
U.S. government securities
Bank holdings, 20-23, 24, 30
Dealer transactions, positions, and financing, 32
Federal Reserve Bank holdings, 5, 11,12, 30
Foreign and international holdings and
transactions, 11, 30, 66
Open market transactions, 10
Outstanding, by type and holder, 28, 30
Rates, 25
U.S. international transactions, 53-67
Utilities, production, 48
VETERANS Administration, 37, 38
WEEKLY reporting banks, 22-24
Wholesale (producer) prices, 45, 50
YIELDS (See Interest rates)
A86
Federal Reserve Board of Governors
and Official Staff
ALAN GREENSPAN, Chairman
DAVID W. MULLINS, JR., Vice Chairman
OFFICE OF BOARD
WAYNE D. ANGELL
EDWARD W. KELLEY, JR.
MEMBERS
JOSEPH R. COYNE, Assistant to the Board
DONALD J. WINN, Assistant to the Board
THEODORE E. ALLISON, Assistant to the Board for
Federal
Reserve System Affairs
LYNN S. Fox, 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
LEGAL
DIVISION OF INTERNATIONAL
FINANCE
EDWIN M . TRUMAN, Staff Director
LARRY J. PROMISEL, Senior Associate Director
CHARLES J. SIEGMAN, Senior Associate Director
D A L E 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 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
DIVISION OF RESEARCH AND STATISTICS
MICHAEL J. PRELL, Director
EDWARD C . ETTIN, Deputy Director
WILLIAM R . JONES, Associate Director
THOMAS D . SIMPSON, Associate Director
LAWRENCE SLIFMAN, Associate
OFFICE OF THE SECRETARY
WILLIAM W. WILES,
Secretary
JENNIFER J. JOHNSON, Associate
BARBARA R. LOWREY, Associate
Secretary
Secretary
DIVISION OF BANKING
SUPERVISION AND REGULATION
RICHARD SPILLENKOTHEN, Director
STEPHEN C . SCHEMERING, Deputy Director
D O N E . KLINE, Associate Director
WILLIAM A . RYBACK, Associate Director
FREDERICK M . STRUBLE, Associate Director
HERBERT A . BIERN, Deputy Associate Director
ROGER T. COLE, Deputy Associate Director
JAMES I. GARNER, Deputy Associate Director
HOWARD A . AMER, Assistant Director
GERALD A . EDWARDS, JR., Assistant Director
JAMES D . GOETZINGER, Assistant Director
STEPHEN M . HOFFMAN, JR., Assistant Director
LAURA M . HOMER, Assistant Director
JAMES V . HOUPT, Assistant Director
JACK P. JENNINGS, Assistant Director
MICHAEL G . MARTINSON, Assistant Director
RHOGER H PUGH, Assistant Director
SIDNEY M . SUSSAN, Assistant Director
MOLLY S . WASSOM, Assistant Director
WILLIAM SCHNEIDER, Project
National Information Center
Director,
Director
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 Director
JOHN J. MINGO, Senior Adviser
LEVON H . GARABEDIAN, Assistant Director
(Administration)
DAVID J. STOCKTON,
DIVISION OF MONETARY AFFAIRS
D O N A L D L . KOHN, Director
DAVID E . LINDSEY, Deputy Director
BRIAN F. MADIGAN, Associate Director
RICHARD D . PORTER, Deputy Associate Director
NORMAND R. V. BERNARD, Special Assistant to the Board
DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS
GRIFFITH L. GARWOOD,
Director
Associate Director
DOLORES S . SMITH, Associate Director
MAUREEN P. ENGLISH, Assistant Director
IRENE SHAWN MCNULTY, Assistant Director
G L E N N E . LONEY,
JOHN P. LAWARE
LAWRENCE B. LINDSEY
SUSAN M . PHILLIPS
OFFICE OF
STAFF DIRECTOR FOR MANAGEMENT
S . DAVID FROST, Staff Director
PORTIA W . THOMPSON, Equal Employment Opportunity
Programs Officer
DIVISION OF RESERVE BANK OPERATIONS
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 Director
JEFFREY C . MARQUARDT, Assistant Director
DIVISION OF HUMAN RESOURCES
MANAGEMENT
DAVID L . S H A N N O N , Director
JOHN R . WEIS, Associate Director
A N T H O N Y V. DIGIOIA, Assistant Director
JOSEPH H . HAYES, JR., Assistant Director
FRED HOROWITZ, Assistant Director
OFFICE OF THE CONTROLLER
GEORGE E . LIVINGSTON, Controller
STEPHEN J. CLARK, Assistant Controller (Programs and
Budgets)
DARRELL R . PAULEY, Assistant Controller (Finance)
DIVISION OF SUPPORT SERVICES
ROBERT E . FRAZIER, Director
GEORGE M . LOPEZ, Assistant Director
DAVID L . WILLIAMS, Assistant Director
DIVISION OF INFORMATION
RESOURCES
MANAGEMENT
STEPHEN R . MALPHRUS, Director
BRUCE M . BEARDSLEY, Deputy Director
MARIANNE M. EMERSON, Assistant
Po
Director
Assistant Director
RAYMOND H . MASSEY, Assistant Director
EDWARD T. MULRENIN, Assistant Director
DAY W . RADEBAUGH, JR., Assistant Director
ELIZABETH B . RIGGS, Assistant Director
RICHARD C . STEVENS, Assistant Director
K Y U N G KIM,
JOHN H. PARRISH, Assistant
Director
Assistant Director
YOUNG, Assistant Director
LOUISE L . ROSEMAN,
FLORENCE M .
OFFICE OF THE INSPECTOR
GENERAL
BRENT L. BOWEN, Inspector
General
DONALD L. ROBINSON, Assistant Inspector General
BARRY R. SNYDER, Assistant Inspector General
A88
Federal Reserve Bulletin • February 1994
Federal Open Market Committee
and Advisory Councils
FEDERAL OPEN MARKET
COMMITTEE
MEMBERS
A L A N GREENSPAN,
Chairman
WILLIAM J. MCDONOUGH,
Vice Chairman
WAYNE D . ANGELL
JERRY L . JORDAN
DAVID W . MULLINS, JR.
J. ALFRED BROADDUS, JR.
EDWARD W . KELLEY, JR.
SUSAN M . PHILLIPS
ROBERT P. FORRESTAL
JOHN P. LAWARE
ROBERT T. PARRY
LAWRENCE B . LINDSEY
ALTERNATE
THOMAS M . HOENIG
THOMAS C . MELZER
SILAS KEEHN
JAMES H . OLTMAN
MEMBERS
RICHARD F. SYRON
STAFF
DONALD L. KOHN, Secretary
NORMAND R.V. BERNARD,
and
Economist
Deputy Secretary
JOSEPH R. COYNE, Assistant
Secretary
GARY P. GILLUM, Assistant
Secretary
J. VIRGIL MATTINGLY, JR., General
Counsel
ERNEST T. PATRIKIS,
Deputy General Counsel
MICHAEL J. PRELL, Economist
EDWIN M . TRUMAN, Economist
RICHARD G. DAVIS, Associate
Economist
JOAN E. LOVETT,
RICHARD W. LANG, Associate
Economist
DAVID E. LINDSEY, Associate
Economist
LARRY J. PROMISEL, Associate
Economist
ARTHUR J. ROLNICK, Associate
Economist
HARVEY ROSENBLUM, Associate
Economist
KARL A. SCHELD, Associate
Economist
CHARLES J. SIEGMAN, Associate
Economist
THOMAS D. SIMPSON, Associate
Economist
LAWRENCE SLIFMAN, Associate
Economist
Manager for Domestic Operations, System Open Market Account
Manager for Foreign Operations, System Open Market Account
PETER R . FISHER,
FEDERAL ADVISORY
First District
Second District
ANTHONY P. TERRACCIANO, Third District
FRANK V. CAHOUET, Fourth District
RICHARD G . TILGHMAN, Fifth District
CHARLES E. RICE, Sixth District
MARSHALL
N.
COUNCIL
CARTER,
J. CARTER BACOT,
Seventh District
III, Eighth District
JOHN F. GRUNDHOFER, Ninth District
DAVID A . RISMILLER, Tenth District
CHARLES R . HRDLICKA, Eleventh District
RICHARD M . ROSENBERG, Twelfth District
EUGENE A . MILLER,
ANDREW
B.
CRAIG,
HERBERT V. PROCHNOW, Secretary
WILLIAM J. KORSVIK, Associate
Secretary
A89
CONSUMER ADVISORY
COUNCIL
Chicago, Illinois, Chairman
Tijeras, New Mexico, Vice Chairman
JEAN POGGE,
JAMES L . WEST,
BARRY A. ABBOTT, San Francisco, California
JOHN R. ADAMS, Philadelphia, Pennsylvania
JOHN
A.
BAKER,
Atlanta, Georgia
MULUGETTA BIRRU, Pittsburgh, Pennsylvania
St. Paul, Minnesota
Bronx, New York
New York, New York
Boston, Massachusetts
THOMAS L . HOUSTON, Dallas, Texas
KATHARINE W. MCKEE, Durham, North Carolina
GARY S. HATTEM,
RONALD HOMER,
DOUGLAS D . BLANKE,
EDMUND MIERZWINSKI, W a s h i n g t o n , D . C .
GENEVIEVE BROOKS,
ANNE B. SHLAY, Philadelphia, Pennsylvania
JOHN V. SKINNER, Irving, Texas
CATHY CLOUD, W a s h i n g t o n , D . C .
Orlando, Florida
Yelm, Washington
St. Louis, Missouri
J. SMITH, Kansas City, Missouri
N. SWANSON, Portland, Oregon
MICHAEL W. TIERNEY, Washington, D.C.
LORRAINE VAN ETTEN, Troy, Michigan
ALVIN J. COWANS,
REGINALD
MICHAEL D . EDWARDS,
LOWELL
MICHAEL FERRY,
ELIZABETH G. FLORES, Laredo, Texas
L. FREIBERG, New Orleans, Louisiana
Angeles, California
BONNIE GUITON, Charlottesville, Virginia
NORMA
GRACE W. WEINSTEIN, Englewood, N e w Jersey
LORI GAY, LOS
LILY K. YAO, Honolulu, Hawaii
ROBERT O. ZDENEK, Greenwich, Connecticut
THRIFT INSTITUTIONS ADVISORY
COUNCIL
BEATRICE D'AGOSTINO, Somerville, New Jersey, President
CHARLES JOHN KOCH,
Lakewood, Colorado
Minneapolis, Minnesota
PAUL L. ECKERT, Davenport, Iowa
GEORGE R . GLIGOREA, Sheridan, Wyoming
KERRY KILLINGER, Seattle, Washington
MALCOLM E . COLLIER,
WILLIAM
A.
COOPER,
Cleveland, Ohio, Vice President
New Bedford, Massachusetts
W. MITCHELL, JR., Winston-Salem, North Carolina
W. PROUGH, Irvine, California
ROBERT MCCARTER,
NICHOLAS
STEPHEN
STEPHEN D. TAYLOR, Miami, Florida
JOHN
M.
TIPPETS,
DFW Airport, Texas
A90
Federal Reserve Board Publications
For ordering assistance, write PUBLICATIONS SERVICES,
MS-127, Board of Governors of the Federal Reserve System,
Washington, DC 20551 or telephone (202) 452-3244 or FAX
(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, 1991-92.
FEDERAL RESERVE BULLETIN. Monthly. $25.00
per year or
$2.50 each in the United States, its possessions, Canada,
and Mexico. Elsewhere, $35.00 per year or $3.00 each.
A N N U A L STATISTICAL DIGEST: period covered, release date,
number of pages, and price.
1981
October 1982
239 pp.
$ 6.50
1982
December 1983
266 pp.
$ 7.50
October 1984
264 pp.
1983
$11.50
1984
October 1985
254 pp.
$12.50
1985
October 1986
$15.00
231 pp.
1986
November 1987
288 pp.
$15.00
1987
October 1988
272 pp.
$15.00
1988
November 1989
256 pp.
$25.00
1980-89
March 1991
712 pp.
$25.00
1990
November 1991
185 pp.
$25.00
1991
November 1992
215 pp.
$25.00
1992
December 1993
215 pp.
$25.00
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.
and other statutory provisions
affecting the Federal Reserve System, as amended through
August 1990. 646 pp. $10.00.
THE FEDERAL RESERVE ACT
REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM.
PERCENTAGE RATE TABLES (Truth in Lending—
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.
ANNUAL
GUIDE TO THE FLOW OF FUNDS ACCOUNTS. 6 7 2 p p .
each.
$8.50
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.
FEDERAL RESERVE REGULATORY SERVICE.
THE U . S . ECONOMY IN AN INTERDEPENDENT WORLD: A MULTICOUNTRY MODEL, May 1984. 590 pp. $14.50 each.
WELCOME TO THE FEDERAL RESERVE. March 1989. 14 pp.
INDUSTRIAL PRODUCTION—1986 EDITION. December 1986.
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 ANALYSIS 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?
Making Sense of Savings
When Your Home is on the Line: What You Should Know
About Home Equity Lines of Credit
A91
STAFF STUDIES: Only Summaries Printed in the
BULLETIN
Studies and papers on economic and financial subjects that are
of general interest. Requests to obtain single copies of the full
text or to be added to the mailing list for the series may be sent
to Publications Services.
Staff Studies 1-145 are out of print.
1 4 6 . THE ROLE OF THE PRIME RATE IN THE PRICING OF
BUSINESS LOANS BY COMMERCIAL BANKS, 1977-84, by
Thomas F. Brady. November 1985. 25 pp.
1 4 7 . REVISIONS IN THE MONETARY SERVICES (DIVISIA) INDEXES OF THE MONETARY AGGREGATES, by Helen T. Farr
and Deborah Johnson. December 1985. 42 pp.
1 4 8 . THE MACROECONOMIC AND SECTORAL EFFECTS OF THE
ECONOMIC RECOVERY TAX ACT: SOME SIMULATION
RESULTS, by Flint Bray ton and Peter B. Clark. December
1985. 17 pp.
1 6 1 . A REVIEW OF CORPORATE RESTRUCTURING ACTIVITY,
1980-90, by Margaret Hastings Pickering. May 1991.
21pp.
1 6 2 . EVIDENCE ON THE SIZE OF BANKING MARKETS FROM
MORTGAGE LOAN RATES IN TWENTY CITIES, b y S t e p h e n
A. Rhoades. February 1992. 11 pp.
1 6 3 . CLEARANCE AND SETTLEMENT IN U . S . SECURITIES MAR-
KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob,
Lauren Hargraves, Richard Mead, Jeff Stehm, and Mary
Ann Taylor. March 1992. 37 pp.
1 6 4 . THE 1 9 8 9 - 9 2 CREDIT CRUNCH FOR REAL ESTATE, b y
James T. Fergus and John L. Goodman, Jr. July 1993.
20 pp.
1 6 5 . THE DEMAND FOR TRADE CREDIT: A N INVESTIGATION OF
MOTIVES FOR TRADE CREDIT USE BY SMALL BUSINESSES,
by Gregory E. Elliehausen and John D. Wolken. September 1993. 18 pp.
1 6 6 . THE ECONOMICS OF THE PRIVATE PLACEMENT MARKET,
by Mark Carey, Stephen Prowse, John Rea, and Gregory
Udell. January 1994. I l l pp.
1 4 9 . THE OPERATING PERFORMANCE OF ACQUIRED FIRMS IN
BANKING BEFORE AND AFTER ACQUISITION, b y S t e p h e n
A. Rhoades. April 1986. 32 pp.
1 5 0 . STATISTICAL COST ACCOUNTING MODELS IN BANKING:
A REEXAMINATION AND AN APPLICATION, by John 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.
by Carolyn D. Davis and
Alice P. White. September 1987. 14 pp.
1 5 3 . STOCK MARKET VOLATILITY,
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.
155. THE FUNDING OF PRIVATE PENSION PLANS, by Mark 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, by Nellie Liang
and Donald Savage. February 1990. 12 pp.
1 6 0 . BANKING MARKETS AND THE USE OF FINANCIAL SERVICES BY SMALL AND MEDIUM-SIZED BUSINESSES, b y
Gregory E. Elliehausen and John D. Wolken. September
1990. 35 pp.
REPRINTS OF SELECTED BULLETIN ARTICLES
Some Bulletin articles are reprinted. The articles listed below
are those for which reprints are available. Most of the articles
reprinted do not exceed twelve pages. Limit often copies.
Recent Developments in the Bankers Acceptance Market. 1/86.
The Use of Cash and Transaction Accounts by American
Families. 2/86.
Financial Characteristics of High-Income Families. 3/86.
Prices, Profit Margins, and Exchange Rates. 6/86.
Agricultural Banks under Stress. 7/86.
Foreign Lending by Banks: A Guide to International and U.S.
Statistics. 10/86.
Recent Developments in Corporate Finance. 11/86.
Measuring the Foreign-Exchange Value of the Dollar. 6/87.
Changes in Consumer Installment Debt: Evidence from the
1983 and 1986 Surveys of Consumer Finances. 10/87.
Home Equity Lines of Credit. 6/88.
Mutual Recognition: Integration of the Financial Sector in the
European Community. 9/89.
The Activities of Japanese Banks in the United Kingdom and in
the United States, 1980-88. 2/90.
Industrial Production: 1989 Developments and Historical
Revision. 4/90.
Recent Developments in Industrial Capacity and Utilization.
6/90.
Developments Affecting the Profitability of Commercial Banks.
7/90.
Recent Developments in Corporate Finance. 8/90.
U.S. Exchange Rate Policy: Bretton Woods to Present. 11/90.
The Transmission Channels of Monetary Policy: How Have
They Changed? 12/90.
Changes in Family Finances from 1983 to 1989: Evidence from
the Survey of Consumer Finances. 1/92.
U.S. International Transactions in 1991. 5/92.
A92
Maps of the Federal Reserve System
BOSTON
7
-
• NEW YORK
CHICAGO •
CLEVILAND
I SAN FRANCISCO
10
• PHILADELPHIA
A
•
KANSAS C I T Y B
5
•
•
ATLANTA
DALLAS
HAWAII
LEGEND
Both pages
• Federal Reserve Bank city
• Board of Governors of the Federal
Reserve System, Washington, D.C.
Facing page
• Federal Reserve Branch city
— Branch boundary
NOTE
The Federal Reserve officially identifies Districts
by number and Reserve Bank city (shown on both
pages) and by letter (shown on the facing page).
In the 12th District, the Seattle Branch serves
Alaska, and the San Francisco Bank serves Hawaii.
The System serves commonwealths and territories as follows: the New York Bank serves the
Commonwealth of Puerto Rico and the U.S. Virgin
Islands; the San Francisco Bank serves American
Samoa, Guam, and the Commonwealth of the
Northern Mariana Islands. The Board of Governors
revised the branch boundaries of the System most
recently in December 1991.
A93
1-A
2-B
3-C
5-E
4-D
Baltimore^
Pittsburgh
wv.
d"
/
•Cinciinnati
Buffalo
CT
nj
^RI
BOSTON
ny
NEW YORK
6-F
7-G
• Nashville
TN o
RICHMOND
CLEVELAND
PHILADELPHIA
8-H
Birmingham
W1
)
MS
LA
OA
•
^
New Orleans
MO
•
ML
J ' *
Louisville
Detroit •
IA
L/TN
J -
. .
Jacksonville
^
• Memphis
IN
LM?S
Rock I
MS
Miami
ATLANTA
9-1
ST. LOUIS
CHICAGO
MT
1
I
• Hel«jna
1
m
MN
•
SD
WI
Ml
MINNEAPOLIS
10-J
WY
12-L
mKmat
- L
•
Omaha •
> iin
Denver
OklahomajCity
OK
KANSAS CITY
11-K
El Paso
Houston
San
• Jr
Antonio
DALLAS
#
• Los Angeles
SAN FRANCISCO
A94
Federal Reserve Banks, Branches,
and Offices
FEDERAL RESERVE BANK
Chairman
branch, or facility
Zip
Deputy Chairman
President
First Vice President
BOSTON*
02106
Jerome H. Grossman
Warren B. Rudman
Richard F. Syron
Cathy E. Minehan
NEW YORK*
10045
Maurice R. Greenberg
David A. Hamburg
14240 Joseph J. Castiglia
William J. McDonough
James H. Oltman
PHILADELPHIA
19105
Edward G. Boehne
William H. Stone, Jr.
CLEVELAND*
44101
Buffalo
Cincinnati
Pittsburgh
RICHMOND*
James M. Mead
Donald J. Kennedy
ATLANTA
James O. Aston
A. William Reynolds
G. Watts Humphrey, Jr.
45201 John N. Taylor, Jr.
15230 Robert P. Bozzone
Jerry L. Jordan
Sandra Pianalto
23219
J. Alfred Broaddus, Jr.
Jimmie R. Monhollon
Henry J. Faison
Claudine B. Malone
Baltimore
21203 Rebecca Hahn Windsor
Charlotte
28230 Harold D. Kingsmore
Culpeper Communications
and Records Center 22701
Leo Benatar
Hugh M. Brown
35283 Shelton E. Allred
32231 Samuel H. Vickers
33152 Dorothy C. Weaver
37203 Paula Lovell
70161 Jo Ann Slaydon
Robert P. Forrestal
Jack Guynn
CHICAGO*
60690
Silas Keehn
William C. Conrad
Detroit
48231
Richard G. Cline
Robert M. Healey
J. Michael Moore
ST. LOUIS
63166
Robert H. Quenon
John F. McDonnell
To be announced
To be announced
Sidney Wilson, Jr.
Thomas C. Melzer
James R. Bowen
Birmingham
Jacksonville
Miami
Nashville
New Orleans
Little Rock
Louisville
Memphis
MINNEAPOLIS
Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
SAN FRANCISCO
Los Angeles
Portland
Salt Lake City
Seattle
30303
72203
40232
38101
Gary H. Stern
Colleen K. Strand
64198
Burton A. Dole, Jr.
Herman Cain
Barbara B. Grogan
Ernest L. Holloway
Sheila Griffin
Thomas M. Hoenig
Henry R. Czerwinski
Cece Smith
Roger R. Hemminghaus
To be announced
To be announced
Erich Wendl
Robert D. McTeer, Jr.
Tony J. Salvaggio
75201
79999
77252
78295
94120 James A. Vohs
Judith M. Runstad
90051 Anita E. Landecker
97208 William A. Hilliard
84125 Gerald R. Sherratt
98124 George F. Russell, Jr.
Charles A. Cerino1
Harold J. Swart1
Ronald B. Duncan1
Walter A. Varvel1
John G. Stoides1
Donald E. Nelson1
FredR. Herr1
James D. Hawkins1
James T. Curry III
Melvyn K. Purcell
Robert J. Musso
Roby L. Sloan1
Karl W. Ashman
Howard Wells
John P. Baumgartner
55480 Gerald A. Rauenhorst
Jean D. Kinsey
59601 Lane Basso
80217
73125
68102
Vice President
in charge of branch
John D. Johnson
Kent M. Scott
David J. France
Harold L. Shewmaker
Sammie C. Clay
Robert Smith, HI1
Thomas H. Robertson
Robert T. Parry
Patrick K. Barron
John F. Moore1
E. Ronald Liggett1
Andrea P. Wolcott
Gordon Werkema1
•Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; East Rutherford, New Jersey 07016; Jericho,
New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311;
Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202.
1. Senior Vice President.
Publications of Interest
FEDERAL
RESERVE
CONSUMER
CREDIT
PUBLICATIONS
The Federal Reserve Board publishes a series of
pamphlets covering individual credit laws and topics,
as pictured below. The series includes such subjects
as how the Equal Credit Opportunity Act protects
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 127,
Board of Governors of the Federal Reserve System,
Washington, DC 20551. Multiple copies for classroom use are also available free of charge.
A guide io
A Consumer's
Guide to
Mortgage
Lock-Ins
Business
Credit
for Women,
Minorities, and
Small Businesses
Federal Reserve Statistical Releases
Available on the Commerce Department's
Economic Bulletin Board
The Board of Governors of the Federal Reserve
System makes some of its statistical releases available to the public through the U.S. Department of
Commerce's economic bulletin board. Computer
access to the releases can be obtained by sub-
scription. For further information regarding a
subscription to the economic bulletin board,
please call (202) 482-1986. The releases transmitted
to the economic bulletin board, on a regular basis,
are the following:
Reference
Number
Statistical release
Frequency of release
H.3
Aggregate Reserves
Weekly/Thursday
H.4.1
Factors Affecting Reserve Balances
Weekly/Thursday
H.6
Money Stock
Weekly/Thursday
H.8
Assets and Liabilities of Insured Domestically Chartered
and Foreign Related Banking Institutions
Weekly/Monday
H.10
Foreign Exchange Rates
Weekly/Monday
H.15
Selected Interest Rates
Weekly/Monday
G.5
Foreign Exchange Rates
Monthly/end of month
G.17
Industrial Production and Capacity Utilization
Monthly/midmonth
G.19
Consumer Installment Credit
Monthly/fifth business day
Z.7
Flow of Funds
Quarterly
Publications of Interest
FEDERAL RESERVE REGULATORY SERVICE
To promote public understanding of its regulatory
functions, the Board publishes the Federal Reserve
Regulatory Service, a three-volume looseleaf service
containing all Board regulations as well as related
statutes, interpretations, policy statements, rulings,
and staff opinions. For those with a more specialized
interest in the Board's regulations, parts of this service are published separately as handbooks pertaining
to monetary policy, securities credit, consumer affairs,
and the payment system.
These publications are designed to help those who
must frequently refer to the Board's regulatory materials. They are updated monthly, and each contains
citation indexes and a subject index.
The Monetary Policy and Reserve Requirements
Handbook contains Regulations A, D, and Q, plus
related materials.
The Securities Credit Transactions Handbook contains Regulations G, T, U, and X, dealing with extensions of credit for the purchase of securities, together
with related statutes, Board interpretations, rulings,
and staff opinions. Also included are the Board's list
of marginable OTC stocks and its list of foreign
margin stocks.
The Consumer and Community Affairs Handbook
contains Regulations B, C, E, M, Z, 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 127, 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.
@FedFRASER