Full text of Federal Reserve Bulletin : February 1997

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VOLUME 8 3 •

NUMBER 2 •

FEBRUARY 1 9 9 7

FEDERAL RESERVE

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D . C .
PUBLICATIONS COMMITTEE

Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood • Donald L. Kohn
• J. Virgil Mattingly, Jr. • Michael J. Prell • 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
67 INDUSTRIAL PRODUCTION AND CAPACITY
UTILIZATION: HISTORICAL REVISION AND
RECENT
DEVELOPMENTS

The Board has completed a revision of its measures of output, capacity, and capacity utilization
for the industrial sector. The primary feature of
the revision is a new formulation for aggregating
the indexes and utilization rates using weights
that are updated annually rather than every five
years. The new formulation has been used to
revise the output, capacity, and utilization rates
back to 1977. It provides more accurate current
estimates of developments in industrial production and capacity utilization and eliminates an
earlier, small overstatement of the growth trends
of production and capacity.
The revised indexes of industrial production
and capacity show slower growth, on average,
than the earlier estimates while the cyclical patterns of the revised measures are nearly the same
as before. Both from 1977 to 1987 and from 1987
to 1996, total industrial output grew at an average
pace of about 2.3 percent a year—about lA percentage point less than previously estimated. The
growth of industrial capacity was revised down
nearly as much; consequently, the rate of total
industrial capacity utilization was also revised
down only a fraction of a percentage point at the
end of 1996.
93 INDUSTRIAL PRODUCTION AND CAPACITY
UTILIZATION FOR DECEMBER
1996

Industrial production advanced 0.8 percent in
December, to 129.1 percent of its 1987 average,
after a similar gain in November. The utilization
of industrial capacity increased 0.4 percentage
point in December, to 83.8 percent, the highest
level since August 1995.
97

Increase in the amount of revenue that section
20 subsidiaries may derive from underwriting
and dealing in securities.
Adoption of a revised interagency uniform
financial institutions rating system.
Expansion of the Federal Reserve Board's audit
contract.
Final rule and proposed rule regarding Regulation D.
Adjustment of the dollar amount that triggers
additional disclosure for certain types of
mortgages.
Proposed revision to Regulation B; withdrawal
of a proposed amendment to Regulation B relating to the collection of data on race and other
information in credit transactions; proposed
revisions to Regulation C; proposed revisions to
Regulation M; extension of the time to receive
comments on proposed amendments to the
Board's margin regulations (Regulations G, T,
and U); proposal for a consumer information
study; and possible amendments to the Truth
in Lending Act and the Real Estate Settlement
Procedures Act.
Publication of the annual update of the directory
of community development investments by
banking organizations.
101 MINUTES OF THE FEDERAL OPEN
COMMITTEE MEETING HELD ON
NOVEMBER 13, 1996

MARKET

At its meeting on November 13, 1996, the Committee adopted a directive that called for maintaining the existing degree of pressure on reserve positions and retaining a bias toward the
possible firming of reserve conditions during the
intermeeting period.

ANNOUNCEMENTS

Resignation of Lawrence B. Lindsey as a member
of the Board of Governors.
Appointments of new members to the Thrift Institutions Advisory Council.



109 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 26, 1996.
A 3 GUIDE TO TABULAR

AND

STAFF

A 8 0 FEDERAL OPEN MARKET COMMITTEE
STAFF; ADVISORY
COUNCILS

AND

PRESENTATION
A.82 FEDERAL

A4 Domestic Financial Statistics
A42 Domestic Nonfinancial Statistics
A50 International Statistics
A 6 3 GUIDE TO STATISTICAL
SPECIAL TABLES

RELEASES

A 7 6 INDEX TO STATISTICAL

TABLES




A78 BOARD OF GOVERNORS

A84

AND

RESERVE

BOARD

MAPS OF THE FEDERAL

PUBLICATIONS

RESERVE

SYSTEM

A86 FEDERAL RESERVE BANKS, BRANCHES,
AND OFFICES

Industrial Production and Capacity Utilization:
Historical Revision and Recent Developments
Carol Corrado, Charles Gilbert, and Richard
Raddock, of the Board's Division of Research and
Statistics, prepared this article. Carly Kudon provided research assistance.
The Board of Governors of the Federal Reserve System has completed a revision of its measures of
output, capacity, and capacity utilization for the
industrial sector. The primary feature of the revision
is a new formulation for aggregating the indexes and
utilization rates using weights that are updated annually rather than every five years. The new formulation has been used to revise the output, capacity, and
utilization rates back to 1977. It provides more accurate current estimates of developments in industrial
production and capacity utilization and eliminates an
earlier, small overstatement of the growth trends of
production and capacity.
For 1992 and thereafter, the 264 individual industrial production (IP) series also incorporate additional
or updated statistics that are typically available for an
annual revision. Moreover, we added or altered
eleven production series to improve their market
classification, coverage, and reliability; some of these
improvements were made to pre-1992 figures,
depending on the availability of source data.
The industrial capacity indexes were reestimated
from 1977 onward to be consistent with the revised
IP series and updated measures of manufacturers'
capital input. The revisions to both production and
capacity indexes are, of course, reflected in the utilization ratio. Some additional small changes to aggregate capacity utilization rates were made from 1976
back to 1967 to improve their consistency with the
new formulation.
Besides the reformulation of aggregates, the annual
updating of all measures, and the improvement of
selected series, the revised production and capacity
indexes are now expressed as percentages of output
in 1992. This rebasing affects all series from their

NOTE. Other contributors to the revision and to this article include
the following: Ana Aizcorbe, William Cleveland, Christopher
Furgiuele, Michael Mohr, Cora Moyers, Gerald Storch, and Dixon
Tranum.




start date, which is 1919 for total IP, 1948 for manufacturing capacity, and 1967 for total industrial capacity. The Federal Reserve's accompanying statistics
for industrial electric power use, which begin in
1972, have also been rebased and revised to incorporate previously unavailable data.

REVISIONS TO OUTPUT,
UTILIZATION

CAPACITY,

AND

The revised indexes of industrial production and
capacity show slower growth, on average, than the
earlier estimates, whereas the cyclical patterns of the
revised measures are nearly the same as before
(chart 1). Both from 1977 to 1987 and from 1987 to
1.

Industrial production, capacity, and utilization, 1967-96

NOTE. Seasonally adjusted monthly data through December 1996.

68

1.

Federal Reserve Bulletin • February 1997

Revised growth rates of industrial production and capacity, and level of capacity utilization, 1967-96
Difference between revised and earlier growth rates
(percentage points)

Revised growth rate
(percent)

Item

Due to the new
formulation

Total
1967-77

1977-87

1987-96

1977-87

1987-96

1977-87

1987-96

Production
Total industrial
Manufacturing
Excluding computers

3.3
3.4
3.2

2.3
2.7
2.2

2.3
2.5
2.1

-.3
-.5
.1

-.2
-.3
-.1

-.3
-.5
-.1

-.2
-.3
-.1

Capacity
Total industrial
Manufacturing
Excluding computers

3.5
3.6
3.5

2.4
2.8
2.2

2.2
2.5
2.2

-.2
-.5
.1

-.2
-.3
-.1

-.4
-.6
-.1

-.1
-.2
-.1

Capacity utilization
(level, end of period)
Total industrial
Manufacturing
Excluding computers

83.9
83.3
83.3

82.7
82.7
82.9

83.2
82.2
82.0

-.1
-.2
-.1

-.2
-.1
.5

-.1
-.2
-.2

-.7
-.7
-.4

NOTE. Growth rates are calculated as the average percentage change in the
seasonally adjusted index from the fourth quarter of the first year specified to the
fourth quarter of the last year specified. For 1967 the calculations begin in the

third quarter, and for 1996 the calculations in the last column end in the second
quarter. The capacity utilization rates are for the fourth quarter of the last year
specified.

1996, total industrial output grew at an average pace
of about 2.3 percent per year—about lA percentage
point less than previously estimated (table 1). The
growth of industrial capacity was revised down
nearly as much; consequently, the rate of total industrial capacity utilization was revised down only a
fraction of a percentage point at the end of 1996. (See
the summary tables in appendix A for details of the
revised indexes.)
The downward revisions to production and capacity growth arise primarily from the introduction of
the new formulation for those measures, which tends
to reduce the influence of the fastest growing
industries—such as computers—on aggregate
growth. In particular, although the revised output and
capacity indexes now show slower growth for total

manufacturing, growth in manufacturing excluding
computers is reduced only a bit as a result of introducing the new formulation (table 1).
The revisions for 1992-96 not only incorporate the
new annual weighting formulation but also update
source data. In particular, data from the Annual Survey of Manufactures of the Bureau of the Census
account for most of the reduction of 1 percentage
point in the growth in manufacturing output in 1994
(table 2). Since 1992, growth in manufacturing has
averaged 3.8 percent a year, down 0.5 percentage
point from the earlier estimates.
The largest revisions of the production indexes by
market group—upward in consumer durable goods
and downward in business equipment—relate to the
treatment of computers; the downward revision in

2.

Revised growth rates of industrial production and capacity, and level of capacity utilization, 1992-96
Revised growth rate
(percent)

Item

Difference between revised and earlier growth rates
(percentage points)

1992-96

1994

1995

19%

1992-96

1994

1995

1996

Production
Total industrial
Manufacturing
Excluding computers

3.5
3.8
3.2

5.7
6.5
6.0

1.8
1.6
.7

3.7
4.0
3.1

-.4
-.5
-.2

-.9

-1.0
-.9

.2
.2
.5

-.8
-.8
-.1

Capacity
Total industrial
Manufacturing
Excluding computers

2.8
3.1
2.6

2.5
2.7
2.3

3.3
3.7
3.1

3.7
4.1
3.3

-.4
-.5
-.3

-.3
-.5
-.3

-.5
-.6
-.4

-.3
-.4
-.1

84.3
83.9
83.9

83.1
82.3
82.1

83.2
82.2
82.0

-.4
-.4
-.2

.2
.2
.5

-.2
-.1
.5

Capacity utilization
(level, end of period)
Total industrial
Manufacturing
Excluding computers

NOTE. Growth rates for 1992 to 1996 are calculated as the average percentage change in the seasonally adjusted index from the fourth quarter of 1992 to
the fourth quarter of 1996. Growth rates for years are calculated from the fourth




quarter of the previous year to the fourth quarter of the year specified. The
capacity utilization rates are for the last quarter of the year.

Industrial Production and Capacity Utilization: Historical Revision and Recent Developments

equipment reflects both the new formulation and the
reassignment of a portion of computer output (mainly
personal computers for home use) from business
equipment to consumer durable goods other than
automotive products (tables A.3 and A.5). Among
major industry groups, the large upward revisions in
semiconductors and electrical machinery relate to the
use of quality-adjusted price indexes for semiconductor components to develop new annual production
benchmarks (tables A.4 and A.6).
The slower overall trend growth in production is
reflected in the lower trend growth in the revised
estimate of manufacturing capacity, which is also
0.5 percentage point below the earlier estimate for
the period from 1992 to 1996. (The effect of revisions
of the production indexes on our capacity indexes is
described in the section on methods.) The rate of
manufacturing capacity utilization—the ratio of production to capacity—in the fourth quarter of 1996 is
only 0.1 percentage point lower than the earlier estimate. Like the earlier estimates, the revised ones
show that capacity utilization reached its most recent
high at the beginning of 1995 and that pressures on
industrial capacity have been lower since then.
Revisions to utilization rates are quite disparate
among industries (table A.7). Substantial upward
revisions in utilization in the fourth quarter of 1996
for miscellaneous manufacturing, apparel, aerospace and miscellaneous transportation equipment,
and electrical machinery including semiconductors
largely counterbalance the downward impact on utilization of the new annual weighting formulation and
lower utilization rates for motor vehicles and parts,
computers, and other industries.

INDUSTRIAL DEVELOPMENTS

IN THE 1990S

The industrial sector entered the 1990s operating at a
high level. Then, following the spike in oil prices that
accompanied Iraq's invasion of Kuwait in August
1989, a rather shallow six-month contraction ensued.
Output of durable manufactured goods fell 7 percent
to a trough in March 1991 and then surpassed its
previous peak in the fourth quarter of 1992, with
the completion of the gradual recovery from the
contraction.
During the four years since then, the industrial
sector, led by gains in durable manufacturing, has
continued to expand, with only a six-month pause
after January 1995. During this expansion phase,
output in durable manufacturing advanced at an
annual rate of 6 percent; output at utilities, roughly
2Vi percent; nondurable manufacturing, IV2 percent;



69

and mining, 1 percent (table A.6). Despite the continuing expansion, productivity advances and the
increased use of temporary employees have limited
the hiring of permanent employees in industry.
Employees on manufacturing payrolls numbered
18.3 million at the end of 1996, up only 200,000
since 1992 and down 1 million since the late 1980s.
Employment in nondurable manufacturing, where
production growth had been slow, declined in 1995
and 1996.
Production in the 1990s by Market Group
The output of durable consumer goods helped fuel
the recovery and expansion from the 1991 trough
until 1994, with strong gains in light trucks, automobiles, appliances, and personal computers (chart 2
and table A.5). Since then, real output of home computing equipment, adjusted for quality improvements,
has risen more than 30 percent per year, while output
of consumer durables other than personal computers
has flattened noticeably.
Assemblies of autos and light trucks hit a cyclical
low in early 1991, climbed at a double-digit rate
through early 1994, and then essentially flattened.
Domestic assemblies of light vehicles averaged about
11.7 million units annually from 1994 to 1996, while
total sales, including imports, averaged nearly 15 million units.
Underlying the overall trend in U.S. production of
light vehicles during the past decade were several
important developments: the growth of U.S. assembly
plants owned by Japanese manufacturers (transplants), which substantially cut imports of vehicles;
quality improvements that made American-built vehicles more competitive; and the shift in the composition of overall output to light trucks, especially sport
utility vehicles. Assemblies of light trucks in the
United States, which averaged 33/4 million units in
the late 1980s, reached 5XA million in the second half
of 1996; in contrast, automobile production has
trended down from 8 million units in 1985-86 to just
over 6 million units last year—despite the growth of
transplants.
In contrast to the substantial growth in the output
of consumer durables during the 1990s, the production of consumer nondurables grew at an annual
rate of only about 1 Vi percent. Significant disparities
in growth rates are apparent among the components
of this group. Newspaper circulation trended gradually downward. Production of clothing fell about
one-tenth in 1995 and early 1996 to a level near the
recession low of 1990-91. Foods and tobacco grew

70

2.

Federal Reserve Bulletin • February 1997

Industrial production by market groups, 1987-96
Index, 1992 = 100, ratio scale
Consumer goods

Intermediate products

J

1988

Index, 1992 = 100, ratio scale

L

1990

J

1992

J

L

1994

1996

L

1988

1990

1992

1994

1996

NOTE. Seasonally adjusted monthly data through December 1996.

slowly overall. But production of drugs and medicines and output of paper products for the home
exhibited strong growth.
The business equipment group lagged the cyclical
improvement in overall IP but has been a major
source of strength since early 1992. Led by a doubledigit annual rate of growth in the output index for
information processing and related equipment, the
output of business equipment advanced more than
one-third through the end of 1996. The qualityadjusted output of computers nearly quadrupled over
the period and accounted for more than one-third
of the growth in business equipment. Excluding computers, output of business equipment grew about
25 percent.
Growth in the industrial equipment group was
strong from early 1992 to mid-1995 and then flattened at a level that exceeded its 1989 cyclical peak
by about 15 percent; however, the output of construction equipment—the fastest growing component—
continued to rise in the second half of 1995 and 1996.
The output of the "other equipment" group, which
includes farm and service industry equipment and
office furniture, also grew rapidly in 1993 and 1994
and then paused before rising in the latter half of
1996 to a level about one-tenth above that preceding
the last recession.



Of the major subgroups within business equipment, only transit equipment exhibited practically no
net production growth from 1991 to early 1996 as
assemblies of business autos stagnated and the output
of commercial aircraft and parts dropped sharply,
particularly in 1993. Demand for business trucks
strengthened considerably early in the expansion, but
then in late 1995 and 1996, assemblies of heavy
trucks and trailers weakened significantly. The output
of transit equipment eventually pushed to new highs,
but not until 1996, with the strong recovery in production of commercial aircraft and parts.
The reductions in real federal investment in
defense and space equipment have cut the production
index for such equipment, which includes military
aircraft and parts, about one-third since mid-1989.
The decline, which was quite rapid from 1991
through 1995, is estimated to have eased in 1996.
The output of construction supplies, which dropped
more than one-tenth during the 1990-91 recession,
did not recover to prerecession levels until late 1993
and early 1994. The recovery was slowed by high
vacancy rates and the related weakness in the construction of multifamily residential buildings and
nonresidential structures, particularly office and
industrial buildings, that persisted into 1993. In contrast, single-family starts recovered much sooner and

Industrial Production and Capacity Utilization: Historical Revision and Recent Developments

more robustly. From the end of 1993 through late
1996, the output of construction supplies advanced at
an average annual rate of roughly 4 percent, despite a
decline in the first half of 1995 that was correlated
with a dip in housing starts.
The output of business supplies grew slowly in the
1990s. Although commercial and other sales of electric and gas utilities expanded solidly, output of paper
business supplies and agricultural chemicals grew
hardly at all, and newspaper advertising trended
sharply downward.
In the 1990s, the production of materials for further industrial processing grew more rapidly than the
output of finished goods. Producers of industrial
materials comprise a large, diverse group that
accounts for roughly 40 percent of total industrial
production. Durable goods materials, such as steel,
turbines, semiconductors, and parts used in computers, motor vehicles, and aircraft, account for more
than half of industrial materials. The output of
durable goods materials has increased more than
40 percent since the beginning of the decade. Not
surprisingly, computer parts and semiconductors led
the advance with double-digit annual growth rates.
The strength in the output of durable goods materials
was supported by gains since the 1990-91 recession
in the output of steel, motors, and other parts used to
make motor vehicles, appliances, and heavy equipment. However, the weakness in the aerospace industry was a restraining influence until recently.
In comparison with the gains in durable goods
industries, the growth in the production of nondurable goods materials and energy materials was anemic.
The downtrend in crude oil production, particularly
in Texas and Alaska, tended to offset recent gains in
the production and use of natural gas and coal.
Declines in the production of residual fuel oil, nuclear
materials, and coke similarly offset a moderate rate of
increase in the generation of electricity. Within nondurable goods materials, growth in textile, paper, and
chemical materials was quite slow on balance from
early 1989 until the third quarter of 1993 and then
grew strongly for a time, only to fall back in 1995.
From the start of the decade through late 1996, the
output of this group grew at an annual rate of only
IV2 percent. In this group, plastics resins, synthetic
rubber, and paperboard were relatively strong
performers.

Capacity and Utilization in the 1990s
So far in the 1990s, the rate of capacity utilization in
total industry has reached neither the extreme highs
nor the extreme lows of the 1970s and 1980s. This



71

moderation reflects an acceleration in the growth of
capacity as well as the relatively mild industrial
recession at the start of the decade and the temperate
pace of the expansion that has lasted nearly six years.
An acceleration in the growth of capacity in recent
years has accommodated this lengthy expansion without signs of substantial pressures on productive
capacity. The low in utilization, 78.1 percent,
occurred at the production trough in early 1991 and
was well above the previous low of 71.1 percent in
late 1982. Over the years of expansion after 1991,
utilization reached a high of 84.9 percent in late 1994
and early 1995 (table A.l). Although this level was
near the high recorded in the late 1980s, it was
noticeably below the cyclical highs of the 1970s.
Utilization eased in 1995 and ended 1996 at about
831/2 percent—still more than a percentage point
above the long-term average.
Within manufacturing, utilization rates in late 1996
were relatively high for industrial machinery and
equipment, especially computers, and for a number
of primary-processing industries including petroleum
refining, rubber and plastics products, fabricated
metal products, and primary metals, such as steel
(table A.7). By contrast, apparel products, printing
and publishing, and leather and products had utilization rates that were below their longer-run averages.
As the current expansion has continued, real
investment expenditures for industrial plant and
equipment have increased rapidly and contributed to
a faster rate of growth of capacity. The annual rate of
growth of manufacturing capacity roughly doubled,
from approximately 2 percent early in the decade to
more than 4 percent in 1996; in durable manufacturing, capacity growth tripled to more than 6 percent
(table A.8). High and rising rates of growth of capacity were, of course, most evident for computers and
semiconductors, but the acceleration was large even
for more slowly growing industries such as steel,
fabricated metals, and lumber. Growth in capacity in
nondurable manufacturing has remained low.
In mining, the long-term decline in capacity moderated as the drop in available drilling rigs, which
began in 1983, lessened substantially. Utilization in
oil and gas well drilling, although far below earlier
peaks, rose to its highest level since 1982. Recent
increases in offshore drilling also helped to maintain
reserves and offset the ongoing decline in oil and gas
extraction from aging oil fields. Capacity growth in
the rest of mining and in utilities was relatively
modest. Output growth at utilities exceeded capacity
growth over the past ten years; as a result, the excess
capacity that developed after the energy shocks in
the 1970s and early 1980s has essentially been
eliminated.

72

Federal Reserve Bulletin • February 1997

NEW AGGREGATION

METHODS

3.

Proportion of computer output in industrial production,
1977-96

As indicated, the most important improvement for
this revision is the introduction of new aggregation
methods from 1977 onward. As before, the contribution of an individual industry to total output or capacity is based on the value added by that industry. Now,
however, we update the value-added weights annually, rather than quinquennially, and keep them concurrent with production. The aggregation method for
IP, a version of the Fisher-ideal index formula, is
more firmly rooted in economic theory and eliminates a source of upward bias in the previous estimates. Some of the same issues are addressed in the
recent reformulation of the featured measure of real
output published by the U.S. Department of Commerce's Bureau of Economic Analysis (BEA).1
Measures of industrial output can be distorted if
the relative valuations of the component series are
out of date by even a few years. In order to minimize
this bias, for the revised production index, annual
weights are estimated through the most current
periods even though comprehensive data on value
added lag a few years. These estimates are developed
from related information on producer prices or, if
required, by statistical extrapolation.
The aggregation of capacity and capacity utilization is accomplished by a generalization of the
method introduced in the 1990 revision of those
series. The approach is discussed more fully in the
accompanying box, "Aggregation of Industrial Production and Capacity Utilization—A Technical
Note," which presents the algebraic formulations of
the new industrial production and capacity utilization
measures.

Percent

— 6
—

—7 5

.

/

f

—

—

/

J
*

1

J—

Earlier

1

1

1978

1

1

Revised

1

1

I

1984

1

1

1

i

1

1990

4

/

—

3

y ^ V / ^ —

2

—

i

i

i

i

i

1

1996

To represent the changing relative price and cost
structure of industries, the industrial production index
was previously built, for the most part, in five-year
chronological segments, each with value-added
weights drawn from the first year of the segment—
the year of the quinquennial Census of Manufactures,
the underlying data source for value added. Chaining
the segments together formed a continuous index
expressed as a percentage of output in a reference
year. Although the periodic introduction of new

weight years ensured that the IP index reflected the
evolution of relative prices over time, the weights of
very fast growing industries, such as computers,
became outdated quickly and caused output growth
to be overstated.
In general, a measure of real output based on
relative prices of a more recent year increases less
rapidly than a measure based on relative prices of an
earlier year. This characteristic result, which has long
been observed in the construction of index numbers,
exists because the goods for which output grows
rapidly tend to be those that are characterized by
declining relative prices and production costs.2 Economic theory suggests that the preferred measure of
output growth between two periods is a geometric
average of two indexes: one weighted according to
the relative price structure of the earlier period and
the second weighted according to the relative price
structure of the later period. This result is called a
Fisher-ideal index. Quantity measures derived as
Fisher-ideal indexes usually grow more slowly than
quantity measures derived using just the earlier period' s prices as weights. Even though the previous IP
index used a progression of valuation periods, it still
overstated output growth because it used prices of a
given year to weight quantities for some number of
subsequent years.
An example of how this bias was manifested in the
earlier index is illustrated by the pattern of the proportion of computer output in industrial production
(chart 3). During the interval between the censuses,

1. See J. Steven Landefeld and Robert P. Parker (with Jack E.
Triplett), "Preview of the Comprehensive Revision of the National
Income and Product Accounts: BEA's New Featured Measures of
Output and Prices," Survey of Current Business, vol. 75 (July 1995),
pp. 3 1 - 3 8 , and the references contained therein.

2. For example, see the discussion and results of the use of alternative weight years for industrial production in Kenneth Armitage and
Dixon A. Tranum, "Industrial Production: 1989 Developments and
Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990),
pp. 1 8 8 - 2 0 4 (especially pp. 2 0 1 - 0 3 ) .

Industrial

Production




Industrial Production and Capacity Utilization: Historical Revision and Recent Developments

the relative proportion of an industry in IP equaled its
base-period proportion multiplied by its growth since
the base year relative to the growth of total IP. Thus
the share of an industry grew (or declined) along with
its relative gain (or loss) in production, regardless of
relative price movements. Under the earlier aggregation method, with base-period weights fixed at 1977,
1982, 1987, and 1992, the current proportion of computer industry output grew in intervening years along
with its relative gain in production until a new weight
year was introduced. It would fall back with the
introduction of new weights because the industry's
value added, measured in current dollars, did not rise
nearly as steeply as did its real output. The revised
index eliminates the exaggerated saw-tooth pattern of
the computer share by updating the industry's valueadded proportion—and its implied relative price—
each year.3 With weights updated annually, an
industry's share fluctuates much less over time, but it
will rise, for example, when a relative increase in an
industry's real output is not offset by a proportionate
relative decline in its value added per unit of output.
The revised IP index is called an annually weighted
Fisher index. In the new formulation, the weights are
expressed as unit value added (a "price") to facilitate
the aggregation of IP as an annually weighted Fisher
index for the recent period. Generally, the unit valueadded measures track broad changes in corresponding producer prices and evolve considerably more
slowly than the corresponding real output (or than
value added itself, which contains both quantity and
price-cost elements).4 Therefore, even though the
value-added data are available only after a lag of
about two years (and sometimes longer), the weights
required for aggregating IP in the most recent period
can be (1) estimated from available data on producer
prices through the most recent year and (2) extrapo-

3. The IP index for computers was first benchmarked to an annual
index of real output derived using a hedonic price index for computers
in a revision published in April 1990 that affected data from 1977
onward. Although the total IP index and its major industry and market
subtotals before 1977 remain as previously formulated, total IP growth
before 1977 is not noticeably overstated from the effects of declines in
the relative price of computers for those years. The growth trend from
1967 to 1977 of manufacturing IP and of manufacturing IP excluding
computers was similar (table 1). Moreover, the results of this revision
suggest that aside from computers, from 1977 onward relative price
movements among components of the earlier IP index caused only
a small overstatement of the trend growth of overall industrial
production.
4. For example, for fourteen of the twenty two-digit industry
groups in manufacturing, more than 50 percent of the variance of the
change in value added is explained by the change in the IP index for
the industry, and, in simple regressions, the coefficient on the change
in IP is not significantly different from 1 for these fourteen industries.
The notable exceptions to this pattern are the food, petroleum, and
paper industries.




4.

73

R e l a t i v e unit v a l u e a d d e d in industrial p r o d u c t i o n ,
1977-96

1. Non-energy materials and non-energy products exclude computers and
semiconductors.

lated for the following year, given the persistence of
many relative price trends.
The relative unit value added of the combined
series for computers and semiconductors in total IP
declines about 13!/2 percent per year, on average,
from 1977 to 1987, and by more than 10 percent, on
average, since then. If the annual weights for IP were
not estimated through the current period and this
relative price of computers and semiconductors was
held fixed for three years rather than allowed to
continue its decline, the most recent IP estimates
would overstate growth by about Vi percentage point
at an annual rate. Within the index, aside from
computers and semiconductors, the basic trends in
relative unit value added for non-energy products,
non-energy materials, and total energy can also
diverge from one another at times (chart 4), and such
developments are reflected in the timely producer
price figures.
The new formulation for monthly IP is computationally more complex than the previous formulation:
Each month's computation involves weights from

74

Federal Reserve Bulletin • February 1997

Aggregation of Industrial Production and Capacity Utilization—A Technical Note
Industrial Production
An individual IP series, /„, represents a quantity of output
for a period n expressed relative to the quantity produced in
a reference period 0, that is, ln = (qjq,o). The previous
practice was to compute an IP aggregate, either the total
index or its major market and industry subtotals, I*, as a
weighted relative quantity,

uses averages of monthly output growth estimates weighted
by earlier and later year prices. Like the Bureau of Economic Analysis, which introduced this type of Fisher variant for its quarterly estimates of real GDP, the weights will
be updated in the middle of the year. A convenient way of
expressing this timing is that a monthly IP aggregate in
month m is computed with weights from the years containing the months (m - 6) and (m + 6).
The new formula for the growth of monthly IP in month
m is given by

£v
using value added, v, to indicate the relative importance of
the individual quantities. As a result, the IP index was
expressed as a value-added weighted sum of its components, 1* = Z/kh>, where w = v/Xv. The previous IP index
generally was built in five-year segments, with the initial
year of each segment used as the base year for weights; the
segments were linked together over time to form a continuous index expressed as a percentage of output in a reference
year.
The previous IP index was called a linked-Laspeyres
index. Consider that value-added weights have both quantity and price-cost elements. With v = q0p0, each segment of
the former IP index could also be expressed as the weighted
aggregate quantity,~Lqnp0/Tiq0p0.This is a Laspeyres quantity index, which shows changes in quantities with prices
held fixed at base-year values.
Laspeyres quantity measures usually overstate output
growth as one moves further from a base period. This
occurs because,
over time, the quantities that increase the
most tend to be those whose prices have increased, relatively, the least. As a result, the use of weights from an
earlier period increasingly exaggerates the relative importance of the fast growing components as time passes. Conversely, quantity measures derived from a Paasche index,
which is expressed as Xg„/?„/Z<70/?n and shows changes
in quantities with prices at current period values, usually
understate the output change.
Economic theory suggests that the preferred measure of
quantity change is a geometric average of a Laspeyres index
and a Paasche index. This result is called a Fisher-ideal
quantity index. Quantity measures derived as Fisher indexes
register increases (or decreases) that fall between those
derived from either a Laspeyres or a Paasche formulation.
The new formulation for aggregating industrial production is based on a Fisher index that updates the weights
every year (but not every month). Source data on value
added are available annually.
The "price" weights used in the new IP formulation are
annual unit value added, that is, value added (an annual
series in dollars) divided by an IP index for the year,
Py = VyHy. Technically, the new formulation for monthly IP
is a variant of the Fisher index described above in that it




Al ^m-\Py{m-6)

+

where the subscript, y{m), denotes "year containing month
m." The new total IP index, as well as its major market and
industry subtotals, are computed as the cumulative product
of a monthly series of these growth estimates from 1977
onward. The monthly estimates for each aggregate are
controlled so that their annual growth rates conform to the
growth rates of an annually weighted Fisher index derived
using annual data.
The revised monthly IP index and its major aggregates
are computed as annually weighted Fisher indexes even for
the most recent period. For the more recent estimates,
Federal Reserve extrapolations of the annual weights are
used.
With the more complex formulation of the new IP index,
the Federal Reserve will provide users with additional time
series representing the proportionate contribution of
changes in a component index to the change in the total
index. These statistics, which for a month are the average of
implicit value-added shares for the component in month
m - 1 based on earlier and later-year unit value added,
represent the linear term of a Taylor's series expansion of
the formula for monthly IP growth given above.

Capacity and Capacity Utilization
An individual capacity utilization series, Un, is a ratio of the
actual level of output to a sustainable maximum level of
output or capacity. The output figures are indexes of industrial production, and the related capacity series are derived
from survey data on utilization and capacity to provide an
integrated system of output, capacity, and utilization measures for the industrial sector.
The aggregation of capacity and capacity utilization rates
presents distinct issues in that they are constructed and
defined in relation to industrial production: Given that
Un = qjcn and that ln - qn/q0 is a production index, then
the capacity index, Cn, consistent with the production index
is cn/q0 = (qn/q0)/Un, or, Cn = In/Un. Given a production

Industrial Production and Capacity Utilization: Historical Revision and Recent Developments

75

Aggregation of Industrial Production and Capacity Utilization—Continued
aggregate, it is desirable to preserve this relationship for
related capacity and capacity utilization aggregates. That is,
we want C* =
or equivalently, U* =
to hold
after aggregation.
The revised utilization aggregates are given by

un =

,
I(v/£/n)

which expresses a utilization aggregate as the ratio of the
components' aggregate actual value added to their aggregate value added at capacity. This expression is implemented in terms of a production index for a year, that is,
with value added (an annual series in dollars) as PYIY, and
given that UY = IY/CY, then a utilization aggregate is calculated as

I

pyq

which is equivalent to the expression,

IPYC,
Thus, the aggregate utilization rates are equivalent to
capacity-weighted aggregates of individual utilization rates;
that is, they are a combination of component utilization
rates weighted by proportions that reflect the component's
share in the aggregate current value of production at
capacity.
With the weights for production now updated annually,
the utilization aggregates are now derived from component
measures annually. The new monthly capacity aggregates
are constructed in three steps: (1) utilization aggregates are
calculated on an annual basis through the most recent full
year; (2) the annual aggregate capacity is derived from the
corresponding production and utilization aggregates; (3) the
monthly capacity aggregate is obtained by interpolating
with an annually weighted Fisher index of its constituent
monthly capacity series. For the very recent period, since
the most recent full year, each monthly capacity aggregate
is extrapolated by this same Fisher index, adjusted by a
factor that accounts for the differences in their relative
growth rates.
Previously, the appropriate relationships for capacity utilization aggregates were exact only in each weight-base
year. When a new base year was introduced into the production and capacity measures, however, each utilization aggregate for the new base year was calculated with weights for
that year and the previous base year. The differences were




often sizable for aggregates that contained components with
divergent relative prices, such as computers or energy materials. As a result, the aggregate capacity indexes between
the two base years were then smoothly adjusted so that no
discontinuity in the utilization aggregate occurred.1
Just as using the ratio of a linked-Laspeyres IP index to a
linked-Laspeyres capacity index might distort aggregate
utilization, so using the ratio of a Fisher IP index to a Fisher
capacity index might produce a similar distortion. Consequently, the new capacity aggregates are not annually
weighted Fisher indexes of the individual capacity series. If
a capacity aggregate were to be formulated in a way similar to that of a production aggregate and if a utilization
aggregate were calculated as a ratio of the two separately
aggregated series, a noticeable distortion in this utilization
aggregate would occur if two conditions are present: (1) the
relative price of a component industry changes significantly,
and (2) the utilization rate of the component differs from the
average of the group.2 In general, only the direct aggregation of the individual proportional relationships preserves
the appropriate aggregate for capacity utilization.
The major advantage of the new procedure is that utilization rates through the current period are aggregated with
capacity proportions in current period values. Previously,
the more recent capacity proportions were valued in prices
of the most recent weight-base year, which could introduce
distortions in current measures of capacity utilization.3

1. See Richard D. Raddock, "Recent Developments in Industrial Capacity
and Utilization," Federal Reserve Bulletin vol. 76 (June 1990), pp. 411-35.
2. To illustrate the distortion that may result, consider a two-industry
example. One industry grows slowly, another industry, such as computers,
grows very fast and its unit value added is falling. If computer manufacturers
typically operate at a higher rate of utilization than does the other industry,
their share of overall capacity will be less than their share of actual production. The lower capacity share for computers implies a slower rate of growth
for the Fisher index of combined capacity than for the Fisher index of
combined production. Assume that the computer manufacturers produce
50 percent of the total value added (in current dollars) of the two industries
but maintain only 45 percent of the total capacity (also in current dollars). If
the actual and capacity output of computers in real terms were growing
20 percent per year (with no growth in nominal value added), and if the real
output and capacity of the other industry were not growing, the Fisher
production aggregate of the two industries would grow about 10 percent
per year (0.50 x 0.20 + 0.50 x 0.00), and the Fisher capacity aggregate
would grow about 9 percent per year (0.45 x 0.20 + 0.55 x 0.00). The
ratio of the Fisher IP index to the Fisher capacity index would increase by
1 percent every year, and the aggregate utilization rate would increase
without bound.
3. That is, the utilization aggregate for a month since the most recent
weight-base year was computed as the ratio of a linked-Laspeyres production
index to a linked-Laspeyres capacity index, which yielded,

ZP0cm
where P0 is unit value added in the base year.

76

Federal Reserve Bulletin • February 1997

two years. In addition, the unit value-added figures
have little intuitive meaning as weights. Users (and
estimators) of the former IP index always found its
aggregation to be more conveniently viewed in terms
of value-added shares rather than prices because the
contribution of a component index to the total index
was seen directly with value-added shares.
With the new Fisher formulation for IP, the growth
rate of the total index can still be viewed as a
value-added weighted sum of its components' growth
rates. Specifically, the growth of a component index
multiplied by its share of value added gives its
approximate contribution to the growth of the total
index (table A.9). To supplement the information on
value-added proportions for the previous year that are
shown in the statistical release, the Federal Reserve
now provides corresponding (and more exact)
monthly statistics representing the proportionate contribution of a monthly change in a component index
to the monthly change in the total index—for example, the computer share shown in chart 3. With the
additional statistics, many calculations frequently
performed by users of the former index are achieved
with the revised index in a similar fashion.5
This revision also updates the formulation used for
the supplementary series on the gross value of products leaving the industrial sector, which are expressed
in dollars. The industrial production data on gross
value of products, which cover the period since 1977,
continue to be aggregated from production indexes
for products using weights based on the market value
of production. (The materials series are excluded to
avoid double-counting.) Previously, they were combined with gross-product weights drawn entirely from
the year 1992. They are now derived as annually
weighted Fisher indexes, with gross-product weights
updated annually and expressed in 1992 dollars after
aggregation.

industry value added. Annual weights for the aggregation of gross value of products are derived from
estimates of the total market value of production. The
sources of these figures are the same as those used
for the periodic updating of weights for the earlier
measures.6
For the most part, source data on value added were
available through 1994 at the time the revision was
compiled (in late 1996). To construct output, capacity, and capacity utilization using the new formulations through the most recent period requires unit
value added for more recent years. For example, to
compute IP growth as an annually weighted Fisher
index for the second half of 1996 requires unit value
added for 1996 and 1997. The estimates for recent
periods were obtained in two steps. First, industry
producer prices from the Bureau of Labor Statistics,
which were available through the third quarter of
1996 at the time the revision was compiled, were
extrapolated to obtain annual averages for 1996 and

6. Annual value-added data are reported in the quinquennial Census of Manufactures and the Annual Survey of Manufactures of the
Bureau of the Census. Value added for electric and gas utilities are
computed from annual revenue and expense data reported by the
Department of Energy and the American Gas Association. Valueadded data for mining industries are available only every five years
from the Census of Mineral Industries. Estimates of unit value added
for intervening years are derived from related final product prices,
either a producer price index from the Department of Labor's Bureau
of Labor Statistics or a spot price for selected commodities such as
crude oil, gold, or silver. Annual data on the total value of production
(shipments plus inventory change, including the value of excise taxes)
required for the gross value of product aggregates are derived from
these same sources.

Data Availability
Annual Weights
Annual weights for the aggregation of IP and capacity utilization were derived from annual estimates of
5. An example of a typical calculation is as follows: Assume a
10 percent jump in the output of the motor vehicle and related
industries and that these IP components account for 5 percent of total
index points in value-added terms in the previous period. Then the
contribution of this development to the percentage change in total IP
for a given month is 0.05 x 0.10 = 0.005, or Vi percent for the month.
Current estimates and historical time series of the monthly proportions
(the 5 percent in the example) for IP components shown on tables 1
and 2 of the Federal Reserve's statistical release G.17 "Industrial
Production and Capacity Utilization" are available with the revised
index. (See box, "Data Availability.")




Files containing the revised data and the text and tables
from the supplement to the G.17 release, "Industrial
Production and Capacity Utilization: Historical Revision," are available on the Board's World Wide Web site
at http://www.bog.frb.fed.us. Files will also be available
through the Economic Bulletin Board of the Department
of Commerce; for information, call (202) 482-1986. Diskettes containing either historical data (through 1985) or
more recent data (1986 to those most recently published
in the G.17 release) are available from Publications Services, Board of Governors of the Federal Reserve System, Washington, DC 20551, or phone (202) 452-3245.
This article will be available on the Board's Web site
at (http://www.bog.frb.us/releases/G17/About.htm).

Industrial Production and Capacity Utilization: Historical Revision and Recent Developments

1997. Second, the unit value-added measures were
extrapolated based on these annual averages of industry producer prices. Later this year, the formulation
will require weights drawn from 1997 and 1998; at
that time source data through 1995 will be available,
and the same procedures will apply.

NEW METHODS
AND CAPACITY

FOR INDIVIDUAL
SERIES

PRODUCTION

The revision also incorporated improvements in the
composition of selected IP market aggregates and
enhancements to the structure of selected production
and capacity series. As part of the revision from 1992
onward, monthly source data for all IP series—
physical product data and measures of inputs to
production—were updated to reflect revisions by the
data providers and were adjusted by the Federal
Reserve to eliminate seasonal, calendar, and holiday
variation.7 The revised IP series reflect further adjustments of their annual averages to benchmark indexes
derived from more comprehensive and newly available annual source data.
The revision to the Federal Reserve capacity estimates incorporated revised measures of industry capital input and detailed data from the Census Bureau's
Survey of Plant Capacity for 1993 and 1994. No new
broad survey results on capacity utilization rates
beyond 1994 or on business investment plans beyond
those first reported for 1996 were available for this
revision. For the 1997 annual update, the Federal
Reserve will have new results from the Survey of
Plant Capacity for the fourth quarters of 1995 and
1996.

Modifications to Series
To improve the IP market aggregates, the portion of
the output of computer and office equipment
(SIC 357) designated as final product is now further
split from 1982 onward into production of consumer
goods, mainly personal computers for home use, and
business equipment. The split is accomplished with
expenditure data from the national income and product accounts. Formerly, all of the final product of the

7. For a summary of the Federal Reserve methods for seasonally
adjusting the source data used to construct the index of industrial
production, see Richard D. Raddock, "A Revision to Industrial Production and Capacity Utilization, 1991-95," Federal Reserve Bulletin, vol. 82 (January 1996), pp. 16-25 (especially pp. 23-24).




77

computer industry was assigned to business equipment. (As in the earlier index, the industry's semifinished product is allocated to the materials market
group.)
To improve coverage and reliability, monthly
source data for five IP series were modified. With
these changes, the monthly IP index now comprises
264 series for the period since 1992, and the proportion that is derived from physical product data rises
2 percentage points, in 1994 value-added terms, to
42 percent.
Portions of two equipment series, farm equipment
(SIC 352) and construction and mining equipment
(SIC 3531-3), which were based on input data, now
make up two new series derived from monthly production estimates reported in Stark's Off-Highway
Ledger. A weighted average of assemblies of combines and two types of tractors is the basis for the
new farm equipment series, which represents
SIC 3523. The remaining portion of the former series,
lawn and garden equipment (SIC 3524), is represented by production worker hours and, with this
revision, assigned to the consumer durable goods
market group. The new construction equipment
series, which represents SIC 3531, is constructed
using a weighted average of assemblies of crawlers,
wheel loaders, skid steer loaders, wheel tractors, and
other construction equipment. Production worker
hours are the basis for the remaining portion of the
former series, mining and oil and gas field equipment
(SIC 3532-3). The revised IP index incorporates
these new equipment series beginning in 1987.
Before the current revision, the monthly output of
original equipment parts for new motor vehicles, a
portion of the total motor vehicle parts industry
(SIC 3714), was represented by data on production
worker hours at parts plants and motor vehicle assemblies. The series from 1992 onward now derives from
monthly production estimates reported in Stark's
Component Ledger. The new series is constructed
using a weighted combination of gas engines, transmissions and axles (on-highway), and brakes. These
components cover more than 40 percent of the total
value of production in SIC 3714 and most of the
original-equipment parts subcomponent.
Production of medium and heavy trucks, formerly
a single component of business trucks, is now represented by separate series for medium-weight (gross
vehicle weight of 14,001-33,000 pounds) and for
heavy trucks (33,001 pounds and more) based on the
same monthly production figures as previously used
(Ward's Automotive Reports) in combination with
information on factory shipments by detailed weight
class reported by the American Automobile Manu-

78

Federal Reserve Bulletin • February 1997

facturers Association. Similarly, capacity series for
medium-weight trucks and another for heavy trucks
and trailers were developed from the same sources;
movements in the output of truck trailers are highly
correlated with the output of heavy trucks.
Output of stone, sand, and gravel mining
(SIC 141-2 and 144), formerly an input-based IP
series, is now derived from quarterly production data
reported by the Department of the Interior. These
data, which cover most of the output of this industry,
are interpolated to a monthly frequency and incorporated in the index beginning in 1992.

(SIC 3672-9) was benchmarked to an annual index
of real output that incorporated a quality-adjusted
price index for domestically produced integrated
microcircuits (the major product of SIC 3674, which
is the largest industry in the broader IP grouping).
Board staff constructed this index from detailed price
indexes for selected semiconductor components,
mainly memory and logic chips, developed by the
BEA as part of its recent comprehensive revision of
the national income and product accounts. The BEA
also revised its quality-adjusted price index for computers for that revision, and the IP benchmark index
for computers and office equipment incorporates
those results.

Updated Data and New Production
Benchmarks
Revised Estimates of Industrial
The regular updating of source data for industrial
production includes the introduction of annual data
from the Annual Survey of Manufactures for 1994
and selected Current Industrial Reports for 1995,
both published by the Bureau of the Census. Available annual data on mining for 1994 and 1995 from
the Department of the Interior were also introduced.
Individual IP series incorporate revisions to the
monthly indicators (either physical product data, production worker hours, or electric power usage) back
to 1992. Seasonal factors for electric power and most
physical product series were calculated on the basis
of data through mid-1996; for production-worker
hours and the unit counts of motor vehicle assemblies, seasonal factors were updated with data through
October 1996. Productivity relationships used to
extrapolate input-based IP series beyond 1994 or
1995 were updated using the revised output and input
data.
With this revision, the annual updating of the individual IP series for manufacturing from 1992 onward
reflects the incorporation of annual benchmarks of
real output that are formulated as annually weighted
Fisher indexes. While the vast majority of individual
series were not revised for the years from 1977 to
1991, the new or modified series described earlier
were adjusted to benchmarks formulated as annually
weighted Fisher indexes from the initial year of the
series. The sources for the basic data used to construct the new annual IP benchmarks in this revision
are the same as those used for calculating the earlier
benchmarks.
For this revision, the annual IP benchmark quantity
indexes for semiconductors and related components and for computers and office equipment
incorporate improvements from 1977 onward. The IP
index for semiconductors and related components



Capacity

The capacity utilization estimates fully incorporate
the more detailed data from the latest Census Survey
of Plant Capacity issued in September 1996, which
provided revised utilization rates for manufacturing
industries for the fourth quarters of 1989 to 1994.
Preliminary results through 1994 from the Census
survey had previously been incorporated in the Federal Reserve estimates of capacity and utilization.
Revised or newly available estimates of capacity in
physical volume (number of units, tons, barrels, and
so forth) for selected industries for 1992-96 are also
incorporated.
Measures of industry capital input, which are used
in estimating manufacturing capacity, were updated
with Federal Reserve estimates of manufacturers'
real net capital stocks that are now built from investment data expressed in chained 1992 dollars; formerly, the net capital stocks were derived from
investment flows in constant 1987 dollars.
Within manufacturing, those capacity indexes that
are derived from the Census survey and estimates of
capital input have been revised back to 1977; as a
result, capacity utilization rates for manufacturing
have been revised from January 1977 onward.8
Capacity growth and utilization rates for mining and
utilities have essentially been updated only in the
1990s, as have those manufacturing series derived
from capacity and output data in physical units.
After a revision of the industrial production
indexes, the individual capacity indexes must typically also be revised because capacity is calculated
from industrial production and survey data on utiliza8. Some additional small changes to aggregate capacity utilization
rates for the 1967-76 period were made to improve consistency with
the new estimates from 1977 onward.

Industrial Production and Capacity Utilization: Historical Revision and Recent Developments

5.

79

Change in manufacturing capacity and capital input,
1967-96

tion rates. For example, in this revision, the production index for semiconductors shows much faster
growth because of a change in the methodology of
measuring its output; consequently, the related capacity index (maximum output) had to be similarly
revised; otherwise, output growth far in excess of
capacity growth would yield a time series of implausible utilization rates. In many instances in manufacturing, we estimate a single capacity series to match a
number of the individual production series. In such
cases, the new annual weighting formulation affected
the estimated growth of production and was a factor
in the reestimation of individual capacity series. For
the most part, these are series derived from industrial
production, data on utilization rates from the Survey
of Plant Capacity, and Federal Reserve estimates of
capital input.
To construct an individual capacity index, we first
calculate preliminary, implied end-of-year indexes of
industrial capacity by dividing a production index by
a utilization rate obtained from a survey for that
end-of-year period. These ratios are expressed, like
the indexes of industrial production, as percentages
of production in a comparison base year, currently
1992, and they give the general level and trend of the
capacity estimates.9 The Federal Reserve's actual
capacity indexes combine these preliminary indexes
with information from alternative indicators of annual
capacity change; these alternatives include capacity
data in physical units and estimates of capital input.
In general, the actual capacity indexes are proportional to fitted values from regressions that reflect
both the trend growth of capacity implied by the
survey data and the annual changes of the alternative

indicator.10 Interpolating between the final end-ofyear capacity indexes produces a continuous monthly
time series.
The capital input measures, which reflect estimates
of the service flow derived from the net stocks of
productive tangible capital assets, were introduced in
capacity estimation methods last year for the period
from 1991 onward; as a result of the current revision
the capital input measures are now incorporated
in most manufacturing capacity series from 1977
onward.11 As a result, the annual changes in manufacturing capacity from 1977 onward are more strongly
correlated with changes in capital input than are the
annual changes in previous figures.
In general, the relationship between capacity and
capital input is variable over time and across indus-

9. Each implied capacity index number is an estimate of a sustainable maximum level of output expressed as a percentage of actual
output in 1992. Thus, if in December 1992 the production index is 100
and a related utilization rate from a survey is 80 percent, then the
implied capacity index is 100/0.8 = 125.
The capacity indexes capture the concept of sustainable practical
capacity, which is defined as the greatest level of output that a plant
can maintain within the framework of a realistic work schedule after
taking account of normal downtime and assuming sufficient availability of inputs to operate the machinery and equipment in place. Both
the questions asked in the broad Census survey and the narrower
surveys of selected industries are generally consistent with this definiton of capacity. The concept itself generally conforms to that of a
full-input point on a production function, with the qualification that
capacity represents a realistically sustainable maximum, rather than
some higher unsustainable short-term maximum. See Carol Corrado
and Joe Mattey, "Capacity Utilization," Journal of Economic Perspectives (forthcoming, Winter 1997).
In the absence of utilization rate information for an industry, which
is the case for a few series in mining, trends through peaks in
production are used to estimate capacity output for that industry.

10. Specifically, the regressions fit the logarithm of the ratio of the
capacity implied by the survey data to the alternative indicator by a
low-order polynominal or piece-wise linear function of time. See
Raddock, "A Revision to Industrial Production and Capacity Utilization, 1991-95," and "Recent Developments in Industrial Capacity and
Utilization."
11. We estimate capital input for manufacturing industries in three
steps. First, we prepare estimates of net capital stocks (by industry and
asset type) from investment data using a perpetual inventory model;
the methods used to derive the net stocks are described in Michael
Mohr and Charles Gilbert, "Capital Stock Estimates for Manufacturing Industries: Methods and Data," Federal Reserve Board, Industrial
Output Section, March 1996. Second, we develop annual estimates of
the implicit rental prices for each asset type and use these estimates to
create weights that describe the relative contribution made by each
asset to the total input of capital. Finally, we create the annual
estimates of capital input for each manufacturing capacity series by
aggregating across the real net stocks by asset type using a chain-type
quantity index that incorporates the weights created from the rental
prices.
Since last year's annual revision, the basic elements used to create
the capital input measures have been converted to use investment data
expressed in chained 1992 dollars; otherwise, we use the same procedures to derive capital input.




Percent

1968

1972

1976

1980

1984

1988

1992

1996

80

Federal Reserve Bulletin • February 1997

tries. For total manufacturing, capital input grew
more rapidly than capacity in the late 1970s and more
slowly after 1982 (chart 5). Capital expenditures on
pollution abatement equipment, which grew rapidly
in the late 1970s, are included in the net stocks used
to derive the capital input measures and can cause the
growth rates of capital input and capacity output to
differ. Similarly, the bunching of permanent plant
closings in some industries and the lengthening of the
workweek of capital in others in the 1980s can lead
to differences in the measures. In recent years, the
relatively fast growth of capacity output generally
represents continued gains in manufacturers' overall
productivity (output per unit of combined inputs,
including capital, labor, and materials) and an
increase in their rate of capital investment.
In compiling this revision of manufacturing capacity, every effort has been made to achieve continuity




with the unrevised estimates before 1977. The
McGraw-Hill/DRI survey was the primary determinant of the level of utilization series in manufacturing
from 1955 through the mid-1970s. Following previous practice, continuity is achieved by applying a
level adjustment to series whose data source changed
from the McGraw-Hill/DRI survey to the Census
survey to maintain consistency with the historical
levels based on the earlier survey. (The two surveys
overlapped for fourteen years.) Generally, utilization
rates from the Census survey, now the main source
for manufacturing utilization rates, were lower, on
average, than those of the discontinued McGraw-Hill/
DRI survey; thus Federal Reserve utilization rates for
major industry totals and subtotals differ from those
issued by the Census Bureau.

Industrial Production and Capacity Utilization: Historical Revision and Recent Developments

APPENDIX
A.l.

A: SUMMARY

TABLES PUBLISHED

IN THE G.17 SUPPLEMENT,

JANUARY 27,

81

1997

R e v i s e d data f o r industrial production, capacity, and utilization f o r total industry, 1 9 8 7 - 9 6
Seasonally adjusted data except as noted
Quarter
Year

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.
1

2

3

4

Annual
avg.1

Industrial production (percentage change)
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996

-.6
.1
.5
-.5
-.5
.0
.4
.3
.3
-.4

1.2
.3
-.8
.5
-.8
.7
.5
.5
-.2
1.3

.4
.0
.9
.5
-.9
.8
.1
.7
.1
-.5

.4
.6
.3
-.6
.3
.7
.3
.4
-.3
.9

.4
.1
-.6
.4
.8
.4
-.6
.6
.1
.4

.9
.0
-.2
.0
1.2
-.3
.2
.5
.2
.6

.1
.5
.4
.2
.1
-.4
-.2
.0
.8
.3

.6
.7
-1.0
-.1
.1
.7
.3
.5
.0
.0

-.1
-.4
-.2
.1
.9
.5
1.0
.1
.4
.1

1.3
.3
-.5
-.5
-.1
.8
.3
.6
-.4
.0

3
.7
.4
-1.3
-.1
.6
.5
.6
.2
.8

.6
.5
.5
-.6
-.6
.1
.7
.9
.1
.7

4.3
3.1
3.8
1.9
-8.2
1.1
3.7
6.2
3.9
1.6

6.7
3.0
.5
.8
1.3
6.7
.8
6.7
-.7
6.2

5.6
3.8
-4.4
.9
6.3
2.2
1.7
4.4
3.2
3.3

6.9
3.6
.0
-5.7
1.1
5.6
5.8
5.6
.8
3.8

4.6
4.4
1.8
-.2
-2.0
3.2
3.4
5.0
3.3
2.7

95.2
98.6
98.5
97.7
98.1
101.9
104.6
110.6
112.7
116.9

95.8
99.1
98.9
97.1
97.4
101.9
105.4
111.6
112.8
117.7

91.0
96.0
99.5
99.0
95.8
98.2
102.6
106.3
111.8
113.1

92.5
96.8
99.6
99.2
96.2
99.8
102.8
108.0
111.6
114.8

93.7
97.7
98.5
99.4
97.6
100.3
103.3
109.2
112.4
115.8

95.3
98.5
98.5
97.9
97.9
101.7
104.7
110.7
112.7
116.8

93.1
97.3
99.0
98.9
96.9
100.0
103.4
108.6
112.1
115.1

115.1
116.5
118.8
121.0
123.0
125.3
127.5
131.1
135.5
140.5

115.2
116.7
119.0
121.2
123.2
125.5
127.7
131.4
135.9
140.9

114.0
115.5
117.0
119.3
121.5
123.6
125.8
128.3
132.1
136.7

114.4
115.8
117.6
119.9
122.0
124.2
126.4
129.2
133.2
137.9

114.7
116.2
118.2
120.4
122.5
124.7
126.9
130.1
134.3
139.2

115.1
116.5
118.8
121.0
123.0
125.3
127.5
131.1
135.5
140.5

114.6
116.0
117.9
120.1
122.3
124.4
126.7
129.7
133.8
138.6

82.7
84.6
82.9
80.7
79.7
81.3
82.1
84.4
83.2
83.2

83.1
85.0
83.2
80.1
79.1
81.2
82.5
84.9
83.0
83.5

79.8
83.2
85.0
82.9
78.9
79.5
81.6
82.9
84.6
82.8

80.8
83.6
84.7
82.7
78.8
80.4
81.4
83.6
83.7
83.3

81.7
84.1
83.3
82.5
79.7
80.4
81.3
83.9
83.7
83.2

82.8
84.6
82.9
80.9
79.6
81.2
82.1
84.4
83.2
83.2

Industrial production (index)
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996

90.2
95.8
99.7
98.5
96.7
97.5
102.3
105.7
111.9
112.4

91.2
96.1
98.9
99.0
95.9
98.1
102.8
106.2
111.6
113.8

91.5
96.2
99.8
99.4
95.0
98.9
102.8
107.0
111.7
113.2

91.9
96.7
100.1
98.9
95.3
99.6
103.2
107.4
111.4
114.3

92.3
96.8
99.5
99.3
96.0
100.0
102.6
108.1
111.5
114.8

93.1
96.8
99.3
99.3
97.2
99.7
102.8
108.6
111.7
115.5

93.7
97.4
98.3
99.2
97.2
100.4
103.1
109.1
111.7
115.5

93.8
98.0
98.7
99.4
97.4
100.1
102.8
109.2
112.6
115.8

93.7
97.6
98.5
99.5
98.3
100.5
103.9
109.3
113.0
116.0

94.9
97.9
98.1
99.0
98.2
101.3
104.1
109.9
112.5
116.0

Capacity (index)
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996

113.9
115.3
116.8
119.2
121.4
123.3
125.7
128.0
131.8
136.3

114.0
115.5
117.0
119.3
121.5
123.6
125.8
128.3
132.1
136.7

114.1
115.6
117.2
119.5
121.7
123.8
126.0
128.6
132.5
137.1

114.3
115.7
117.4
119.7
121.9
124.0
126.2
128.9
132.8
137.5

114.4
115.8
117.6
119.9
122.0
124.2
126.4
129.2
133.2
137.9

114.5
115.9
117.8
120.0
122.2
124.4
126.6
129.5
133.6
138.4

114.6
116.0
118.0
120.2
122.4
124.6
126.7
129.8
134.0
138.8

114.7
116.2
118.2
120.4
122.5
124.7
126.9
130.1
134.3
139.2

114.8
116.3
118.4
120.6
122.7
124.9
127.1
130.5
134.7
139.6

115.0
116.4
118.6
120.8
122.8
125.1
127.3
130.8
135.1
140.0

Utilization (level, percent)
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996

79.1
83.1
85.3
82.6
79.6
79.0
81.4
82.6
84.9
82.4

80.0
83.3
84.5
82.9
78.9
79.4
81.7
82.8
84.5
83.2

80.2
83.2
85.1
83.2
78.1
79.9
81.6
83.2
84.3
82.6

80.5
83.6
85.2
82.6
78.2
80.4
81.7
83.3
83.9
83.1

80.7
83.6
84.6
82.8
78.7
80.6
81.2
83.7
83.7
83.2

81.3
83.5
84.3
82.7
79.5
80.2
81.2
83.9
83.6
83.5

81.8
84.0
83.3
82.5
79.5
80.6
81.3
84.1
83.4
83.2

NOTE. Monthly figures show the percentage change from the previous month;
quarterly figures show the change from the previous quarter at a compound
annual rate of growth. Estimates from October 1996 through December 1996 are
subject to further revision in the upcoming monthly releases. Production and
capacity indexes are expressed as percentages of output in 1992.




81.7
84.3
83.5
82.5
79.5
80.2
81.0
83.9
83.8
83.2

81.6
84.0
83.2
82.5
80.1
80.5
81.7
83.7
83.9
83.1

82.6
84.1
82.7
81.9
79.9
81.0
81.8
84.1
83.3
82.8

81.3
83.9
84.0
82.3
79.2
80.4
81.6 1
83.7
83.8
83.1

1. Annual averages of industrial production are calculated from not seasonally adjusted indexes.

82

Federal Reserve Bulletin • February 1997

A.2.

Revised data for industrial production, capacity, and utilization for manufacturing industries, 1987-96
Seasonally adjusted data except as noted
Quarter
Year

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Annual
avg.

Dec.

Industrial production (percentage change)
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996

-.8
-.2
.9
-.2
-.9
.2
.8
.1
.4
-.4

1.6
.4
-1.2
.9
-.7
.8
.3
.6
-.4
1.3

.2
-.1
.8
.3
-1.1
.9
.1
.9
.1
-.8

.5
1.0
.1
-.8
.3
.6
.5
.7
-.3
1.1

.3
-.1
-.7
.4
.7
.4
-.5
.7
-.1
.4

1.0
.0
.0
-.1
1.4
-.1
.0
.2
.2
.7

.7
.7
-1.1
.0
.2
.7
.3
.8
-.1
.5

-.2
.3
.4
.3
.2
-.3
-.3
.1
.7
.1

.1
.2
-.3
.0
1.1
.4
1.1
.2
.7
.2

1.3
.2
-.6
-.6
-.1
.7
.2
.7
-.4
.0

.5
1.0
.4
-1.3
-.2
.6
.5
.7
-.1
.6

.6
.6
.1
-.6
-.5
-.1
.8
.9
.1
1.0

5.0
2.4
4.3
2.9
-9.7
2.3
4.5
6.3
4.2
1.1

7.0
4.1
-.7
-.1
1.2
7.3
1.4
8.1
-1.4
6.3

5.5
3.7
-4.5
.8
7.8
2.8
1.2
5.0
2.6
5.0

7.6
5.2
-1.4
-6.3
1.7
5.1
6.2
6.7
1.0
3.7

5.3
4.7
1.9
-.5
-2.4
4.0
3.7
5.5
3.5
2.7

95.0
98.9
98.2
97.2
97.6
102.0
105.0
111.9
113.6
118.1

95.6
99.4
98.3
96.6
97.1
101.8
105.9
112.9
113.8
119.3

90.6
95.7
99.8
98.8
95.0
98.0
102.9
106.7
113.1
114.0

92.1
96.6
99.6
98.8
95.2
99.8
103.2
108.8
112.7
115.8

93.4
97.5
98.5
99.0
97.0
100.5
103.5
110.2
113.4
117.2

95.1
98.7
98.1
97.4
97.5
101.7
105.1
111.9
113.7
118.3

92.8
97.1
99.0
98.5
96.2
100.0
103.7
109.4
113.2
116.3

114.9
116.6
119.5
121.9
124.2
126.8
129.3
133.3
138.2
143.9

115.0
116.8
119.7
122.2
124.3
127.0
129.5
133.6
138.7
144.4

113.4
115.3
117.3
120.1
122.6
124.7
127.4
130.1
134.4
139.6

113.9
115.7
118.0
120.7
123.1
125.4
128.0
131.2
135.6
141.0

114.4
116.1
118.7
121.3
123.6
126.1
128.7
132.2
136.9
142.5

114.9
116.6
119.5
121.9
124.1
126.8
129.3
133.3
138.2
143.9

114.1
115.9
118.4
121.0
123.4
125.8
128.3
131.7
136.3
141.7

82.8
84.8
82.2
79.7
78.6
80.4
81.2
84.0
82.2
82.1

83.1
85.1
82.2
79.1
78.1
80.2
81.7
84.5
82.0
82.6

79.9
83.0
85.1
82.3
77.5
78.6
80.7
82.0
84.2
81.7

80.9
83.5
84.4
81.9
77.4
79.5
80.6
83.0
83.1
82.1

81.6
83.9
82.9
81.6
78.5
79.7
80.5
83.3
82.9
82.3

82.8
84.7
82.1
79.9
78.5
80.2
81.3
84.0
82.3
82.2

81.3
83.8
83.6
81.4
78.0
79.5
80.8
83.1
83.1
82.1

Industrial production (index)
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996

89.6
95.4
100.3
98.1
95.8
97.2
102.6
106.0
113.3
113.4

91.0
95.8
99.1
99.0
95.1
98.0
102.9
106.6
112.9
114.8

91.2
95.7
99.9
99.3
94.1
98.9
103.0
107.5
113.1
113.9

91.6
96.7
100.0
98.6
94.4
99.5
103.6
108.2
112.7
115.2

91.9
96.6
99.4
99.0
95.0
100.0
103.0
109.0
112.6
115.7

92.8
96.6
99.4
98.9
96.3
99.9
103.0
109.2
112.9
116.4

93.4
97.2
98.3
98.8
96.6
100.5
103.4
110.0
112.7
117.0

93.3
97.5
98.7
99.1
96.8
100.2
103.0
110.1
113.4
117.2

93.4
97.7
98.4
99.1
97.8
100.6
104.2
110.3
114.2
117.4

94.6
97.9
97.9
98.5
97.8
101.4
104.4
111.1
113.8
117.4

Capacity (index)
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996

113.2
115.1
117.0
119.9
122.4
124.5
127.2
129.8
134.0
139.1

113.4
115.3
117.3
120.1
122.6
124.7
127.4
130.1
134.4
139.6

113.6
115.4
117.5
120.3
122.7
125.0
127.6
130.5
134.8
140.1

113.8
115.5
117.8
120.5
122.9
125.2
127.8
130.8
135.2
140.5

113.9
115.7
118.0
120.7
123.1
125.4
128.0
131.2
135.6
141.0

114.1
115.8
118.3
120.9
123.3
125.7
128.2
131.5
136.0
141.5

114.2
116.0
118.5
121.1
123.5
125.9
128.4
131.9
136.5
142.0

114.4
116.1
118.7
121.3
123.6
126.1
128.6
132.2
136.9
142.5

114.6
116.3
119.0
121.5
123.8
126.3
128.9
132.6
137.3
142.9

114.7
116.5
119.2
121.7
124.0
126.5
129.1
132.9
137.8
143.4

Utilization (level, percent)
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996

79.1
82.9
85.7
81.8
78.2
78.1
80.7
81.6
84.6
81.5

80.2
83.1
84.5
82.4
77.6
78.6
80.8
81.9
84.0
82.2

NOTE. See notes to table A. 1.




80.3
82.9
85.0
82.6
76.6
79.1
80.7
82.4
83.9
81.3

80.6
83.7
84.9
81.8
76.8
79.5
81.0
82.7
83.4
82.0

80.7
83.5
84.2
82.0
77.2
79.7
80.5
83.1
83.0
82.0

81.4
83.4
84.1
81.8
78.1
79.5
80.4
83.0
83.0
82.3

81.8
83.8
83.0
81.6
78.2
79.9
80.5
83.4
82.6
82.4

81.5
84.0
83.1
81.7
78.3
79.5
80.1
83.3
82.9
82.3

81.5
84.0
82.7
81.5
79.0
79.7
80.9
83.2
83.2
82.1

82.5
84.1
82.1
80.9
78.9
80.1
80.9
83.6
82.6
81.8

Industrial Production and Capacity Utilization: Historical Revision and Recent Developments

A.3.

83

R e v i s e d g r o w t h rates o f industrial production, b y market group, 1 9 7 7 - 9 6

Series
1977-82
Total index
Products, total
Final products
Consumer goods
Durable
Automotive products
Other durable goods
Nondurable
Non-energy products
Energy products
Equipment, total
Business
Industrial
Information processing and related
Transit
Other
Defense and space
Intermediate products
Construction supplies
Business supplies
Materials
Durable
Nondurable
Energy
Aggregates, excluding computer
and office equipment
Total index
Business equipment

—

1982-87

1987-92

1992-96

1977-82

1982-87

1987-92

1992-96

.5

4.0

1.4

3.6

-J

-.1

-.1

-.4

1.2
1.6
-.2
-4.3
-7.5
-2.2
1.1
1.5
-.6

4.1
3.6
3.5
8.5
11.2
6.7
2.1
2.2
1.7

1.0
1.4
1.3
1.3
-.1
2.3
1.3
1.3
1.5

2.9
3.0
2.5
6.0
5.9
6.0
1.6
1.4
2.7

-.7
-.9
.0
.0
-.2
.1
-.1
-.1
-.1

-.6
-.8
.1
.7
-.5
1.6
-.1
-.1
-.1

-.2
-.3
.1
.7
-.3
1.4
.0
.0
-.1

-.6
-.6
.1
1.1
-1.0
2.8
-.2
-.2
-.2

3.9
2.6
-2.6
14.5
-1.2
-2.4
6.0

3.6
3.8
-1.7
9.1
4.0
3.2
10.1

1.5
3.3
1.0
4.8
5.8
.3
-3.2

4.0
6.1
6.1
9.4
.0
3.8
-6.3

-1.7
-2.5
.0
-3.7
-.4
-.1
.0

-1.7
-2.7
.0
-5.3
-.6
-.1
1.3

-.8
-1.0
-.2
-1.8
-.5
-.3
.1

-1.8
-2.0
1.0
-4.5
.1
-.7
.5

.0
-2.7
2.1

5.9
6.7
5.3

-.1
-.9
.3

2.3
4.0
1.2

.0
-.1
-.1

.0
.0
.0

.0
.1
-.1

-.5
-.3
-.6

-.5
-.6
-1.1
-.3

3.8
6.9
4.0
-.1

2.0
2.7
1.9
.8

4.7
7.6
1.5
1.0

.0
-.1
.0
-.2

.5
.6
.0
.1

.2
.3
.0
.0

.0
.2
-.5
.0

-.1
-.2

3.6
1.6

1.3
2.8

3.1
3.7

.0
-•

.3
-.1

.1
-.1

—•2

NOTE. Growth rates are calculated as the average annual percentage change
from the first to the last year indicated.




Difference between revised
and earlier growth rates
(percentage points)

Revised growth rate
(percent)

2

84

Federal Reserve Bulletin • February 1997

A.4.

R e v i s e d g r o w t h rates o f industrial production, b y industry group, 1 9 7 7 - 9 6

Series

Difference between revised
and earlier growth rates
(percentage points)

Revised growth rate
(percent)

SIC
code1
1977-82

1982-87

1987-92

1992-96

1977-82

1982-87

1987-92

1992-%

Total index

.5

4.0

1.4

3.6

-.5

-.1

-.1

-.4

Manufacturing

.3

5.2

1.5

3.9

-.6

-.3

-.1

-.4

-2.7
1.9

4.7
5.4

1.0
1.8

2.9
4.3

-.1
-.8

.0
-.5

.0
-.1

-.3
-.5

24
25
32

.0
-4.0
-.1
-3.1

6.2
8.3
6.2
4.5

1.7
-1.0
-.2
-.9

5.9
2.3
2.2
2.7

-1.1
.0
.0
-.1

-.4
.1
.0
.0

-.1
.0
.0
.0

-.5
-.8
-.7
.0

33
331,2
331pt
333-6,9
34
35
357
36

-7.5
-10.2
-9.8
-2.8
-2.1
3.1
33.4
6.3

4.0
3.5
3.5
4.6
3.7
5.5
23.9
7.9

.5
.9
.2
-.2
-.4
3.1
10.0
5.7

4.0
3.9
2.9
4.1
4.4
11.8
31.3
13.0

-.2
-.3
.0
.3
.0
-4.2
-1.6
.9

.2
.5
.0
.0
.0
-3.9
-4.5
2.3

.1
.0
.0
.2
-.2
-1.3
-1.6
1.4

-.1
-.4
.0
.2
.1
-1.6
-.9
1.8

3672-9

23.1

15.8

14.6

26.7

6.9

9.5

5.2

7.4

37
371
371pt

-2.6
-9.2
-8.4

8.8
10.8
12.6

.8
1.0
.3

1.4
6.0
5.6

-.1
-.1
-.2

-.3
-.4
-.1

-.1
-.4
-.1

-.7
-1.1
-.7

372-6
38
39

4.2
4.9
-1.6

7.4
4.2
1.8

.5
1.3
1.3

-3.8
.7
3.0

.0
.0
.0

-.1
.1
.1

.1
.1
.0

.1
-.8
-.7

20
21
22
23
26

.5
2.0
.6
-1.9
-.3
1.2

3.9
2.6
-.3
3.7
1.8
4.1

1.3
1.3
-.9
.8
-1.1
1.9

1.5
1.5
1.4
1.7
-.4
1.9

-.1
-.1
.0
.0
.0
.2

-.1
-.1
.0
.0
-.3
.0

.0
.0
-.1
.0
.0
.0

-.3
-.5
2.6
.5
.9
.1

27
28
29
30
31

3.2
-.4
-3.1
.3
-4.1

5.7
4.1
2.3
8.7
-7.2

-.5
2.8
.6
3.1
-2.3

-.3
2.1
1.6
4.8
-5.3

.0
.0
.0
-.1
.0

-.1
.0
.0
.0
.0

-.1
.1
.1
.0
.0

-.3
-1.0
-.3
-.3
-1.3

10
12
13
14

1.5
-2.2
3.7
1.5
-4.6

-1.7
2.5
1.8
-2.8
5.1

-.3
10.1
1.6
-1.5
-.2

.8
.4
1.4
.1
4.3

.0
.9
.0
-.3
.0

.1
-.3
.0
-.2
.3

-.1
-.3
.0
-.1
.0

-.1

491,493pt
492,493pt

.1
1.6
-3.2

1.7
3.1
-2.8

2.3
2.3
2.4

3.0
3.0
2.7

-.3
.0
-.6

-.1
.0
.3

.0
.0
-.1

-.1
.0
-.4

-.4

4.7

1.3

3.3

-.1

.2

.1

-.2

Primary processing
Advanced processing
Durable manufacturing
Lumber and products
Furniture and fixtures
Stone, clay, and glass products
Primary metals
Iron and steel
Raw steel
Nonferrous metals
Fabricated metal products
Industrial machinery and equipment
Computer and office equipment
Electrical machinery
Semiconductors and related
components
Transportation equipment
Motor vehicles and parts
Autos and light trucks
Aerospace and miscellaneous
transportation equipment
Instruments
Miscellaneous manufactures
Nondurable manufacturing
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
Mining
Metal mining
Coal mining
Oil and gas extraction
Stone and earth minerals
Utilities
Electric
Gas
Aggregate, excluding computer
and office equipment
Manufacturing

NOTE. Growth rates are calculated as the average annual percentage change
from the first to the last year indicated.
Primary-processing manufacturing includes textile mill products, paper and
products, industrial chemicals, synthetic materials, and fertilizers, petroleum
products, rubber and plastics products, lumber and products, primary metals,
fabricated metals, and stone, clay, and glass products. Advanced-processing
manufacturing includes foods, tobacco products, apparel products, printing and
publishing, chemical products and other agricultural chemicals, leather and




•'lytFs

.2
.1

.2
.3

products, furniture and fixtures, industrial and commercial machinery and
computer equipment, electrical machinery, transportation equipment, instruments, and miscellaneous manufactures.
1. Standard Industrial Classification; see Executive Office of the President,
Office of Management and Budget, Standard Industrial Classification Manual,
1987 (U.S. Government Printing Office, 1987).
pt Part of classification.

Industrial Production and Capacity Utilization: Historical Revision and Recent Developments

A.5.

85

R e v i s e d g r o w t h rates o f industrial production, b y major market group, 1 9 9 2 - 9 6

Market group

Total index
Final products
Consumer goods
Durable
Automotive products
Other durable goods
Nondurable
Non-energy products
Energy products
Equipment, total
Business
Industrial
Information processing and related
Transit
Other
Defense and space
Intermediate products
Construction supplies
Business supplies
Materials
Durable
Nondurable
Energy
Aggregates, excluding computer
and office equipment
Total index

1994

1995

1996

3.0

5.7

1.8

3.7

-.1

1.9
2.0
2.2
10.3
11.6
9.4
.1
-.4
3.4

4.3
4.3
3.9
6.6
5.7
7.2
3.2
4.4
-4.0

l.l
1.4
.7
1.1
-.9
2.5
.7
-.3
6.6

3.7
3.9
2.1
2.7
1.0
3.9
2.0
2.4
-.4

-.2
-.3
.3
.6
.3
1.1
.2
.2
.0

4.6
6.8
3.7
13.2
.8
3.4
-5.8

1.5
3.4
6.8
2.0
-2.1
9.6
-6.5

4.9
8.1
8.9
11.5
1.1
5.4
-8.0

2.4
4.6
7.3
12.2
-13.4
-.8
-8.2

6.9
8.0
-.2
11.2
21.6
2.4
-.9

-1.1
-1.4
-.7
-1.7
.3
-1.3
.0

3.3
3.7
3.1

1.8
5.8
-.5

4.3
6.6
3.0

.1
-.8
.7

3.1
5.9
1.3

3.9
6.5
2.4
.0

4.6
8.2
1.7
-.6

7.9
10.9
5.9
2.1

2.9
5.7
-2.3
.9

3.5
4.7

2.7
2.4

5.3
6.2

1.1
1.1

1992

1993

3.9
3.9
4.0
3.7
7.4
11.7
4.2
2.7
2.8
2.5

NOTE. Growth rates are calculated as the percentage change in the seasonally
adjusted index from the fourth quarter of the previous year to the fourth quarter
of the year specified.




Difference between revised
and earlier growth rates
(percentage points)

Revised growth rate
(percent)

1994

1995

1996

-.2

-.9

.2

-.8

-.6
-.6
.3
-.3
-2.8
2.2
.3
.2
.9

-1.3
-1.1
-.1
.5
-1.6
2.3
-.3
-.3
.0

.1
.0
.2
2.0
.3
3.2
-.3
-.5
.0

-.9
-1.3
.1
2.2
-1.0
4.8
-.5
-.2
-1.7

-2.0
-2.5
.9
-5.5
-2.9
-.4
.5

-2.6
-3.3
.3
-6.3
-1.4
-2.5
2.3

-.1
.1
3.8
-1.8
.8
2.8
.9

-3.0
-3.0
-.1
-6.2
5.3
-1.2
-2.1

.1
-.3
.4

-.8
-.2
-1.1

-2.0
-1.5
-2.3

.2
-.4
.7

.3
.6
.2

3.7
5.1
1.7
1.9

.2
.2
.1
.0

.4
1.0
-.6
-.2

-.2
-.3
-1.0
.3

.5
.4
.4
.8

-.7
-.3
-1.4
-1.2

2.9
4.4

.2
-.1

-.1
-1.1

-.8
-2.4

.5
2.3

-.2
.7

1992

1993

86

Federal Reserve Bulletin • February 1997

A.6.

R e v i s e d rates o f g r o w t h in industrial production, by major industry group, 1 9 9 2 - 9 6

Industry group

Difference between revised
and earlier growth rates
(percentage points)

Revised growth rate 2
(percent)

SIC
code1
1992

1993

1994

1995

Total index

3.9

3.0

5.7

1.8

3.7

Manufacturing

4.4

3.3

6.5

1.6

3.9
4.6

4.0
3.0

6.2
6.7

5.2
5.4
5.1
3.6

5.8
2.2
3.4
4.2

8.2
4.1
3.9
4.7

Primary processing ..
Advanced processing
Durable
Lumber and products
Furniture and fixtures
Stone, clay, and glass products

24
25
32

Primary metals
Iron and steel
Raw steel
Nonferrous
Fabricated metal products
Industrial machinery and equipment
Computer and office equipment ..
Electrical machinery
Semiconductors and related
components

491,3pt
492,3pt

-.2

-.9

.2

-.8

-.4

-1.1

.2

-.8

-.3
-.4

-.8
-1.1

.2
.3

-.4
-.9

-.3
-.4
.2
-.2

-.4
-1.7
-1.8
.0

-1.1
-1.6
-3.4
.7

.3
.1
2.0
-.6

-.9
.7
.4
-.3

.1
.2
-.3
.0
-1.0
-3.3
-1.2
3.2

-.3
-.1
-.2
-.5
.7
-.9
-6.6
.4

-1.4
-1.3
-.3
-1.5
.1
-.2
1.6
.9

.8
1.2
-.1
.0
.0
-.8
4.5
4.0

.8
-1.3
.8
3.4
.0
-5.2
-2.5
2.8

4.0

-i

-.9
2.8

2.6
4.7

-i

3.7
-.1
-1.7
-.5

5.6
2.5
3.2
2.4

-.9
-1.2
.6
-.7
.9
11.7
40.7
15.9

2.9
2.9
-1.9
2.9
3.2
10.0
38.1
7.2

8.9

4.6

8.4

10.4

7.9

5.4
-3.7
-.5
19.3
3.0
2.5

-.1
-.6
.3
.0
.2
.0

-.1
1.2
-2.1
-1.0
-.6
-.5

-2.0
-1.8
-.3
-1.9
-2.8
-3.6

.1
-.4
-.6
1.2
-.1
.3

-1.9
-6.0
-2.0
3.5
.2
.9

-.9
.8
-8.8
-5.5
-7.6
-2.6

2.2
2.1
2.3
2.0
-2.5
1.4

.3
.2
-1.5
.2
-.5
-.1

-.4
-1.0
3.3
.5
.9
-.3

-.9
-1.5
15.8
.9
1.2
.5

.1
.4
-2.7
.2
1.4
.4

-.3
.1
-3.6
.2
.3
-.6

-1.3
1.6
.4
-.5
-8.9

1.2
3.6
3.1
2.9
-3.4

.3
.5
.0
.3
-.1

-1.2
-.4
-.3
-.3
-1.2

-1.4
-2.4
-.9
-.9
-5.1

.6
-.8
.2
.0
.3

.5
-1.2
-.4
-.6
1.5

1.6
-3.0
8.9
-.3
7.0

-1.3
4.7
-.2
-2.5
.2

3.9
.1
4.1
4.1
5.6

.0
-.4
-.2
.2
-1.1

.2
-.3
-.1
.0
2.7

4
-.2
-.2
.4
.6

.5
-3.3
2.9
.5
-1.8

-.8
3.7
-6.2
-.2
.3

R
~-l
5^5 -1.2

6.5
5.3
10.9

.4
1.1
-2.1

-.1
.2
-1.0

.5
.1
1.6

-.3
.1
-1.2

.3
.2
.4

-1.2
-.6
-3.1

.2

-.2

-1.0

.4

-.1

-.3
2.2
-3.3
-.6
5.6

Aggregate, excluding computer
and office equipment
Manufacturing

i#li|
.7
•

NOTE. See notes to table A.4. Growth rates are calculated as the percentage
change in the seasonally adjusted index from the fourth quarter of the previous
year to the fourth quarter of the year specified.




1996

15.6

Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastics products
Leather and products

Utilities ..
Electric
Gas . . .

1995

1993

36.4

Nondurable
Foods
Tobacco products . . .
Textile mill products
Apparel products
Paper and products ..

.3
5.7
-.7
-.3
3.4

1994

1992

-6.1
-3.0
-3.3
-10.6
.5
.9

Transportation equipment
Motor vehicles and parts
Autos and light trucks
Aerospace and miscellaneous
Instruments
Miscellaneous

Mining
Metal mining
Coal mining
Oil and gas extraction ..
Stone and earth minerals

1996

3.1

9

1. Standard Industrial Classification, see table A.4, note 1.
pt Part of classification.

Industrial Production and Capacity Utilization: Historical Revision and Recent Developments

A.7.

87

R e v i s e d and earlier c a p a c i t y utilization rates, b y m a j o r industry group, 1 9 6 7 - 9 6

Item

Difference between revised
and earlier indexes
(percentage points)

Revised index
(percent of capacity)

SIC
code1
1967-95
avg.

1988-89
high

1990-91
low

1994:Q4

1995:Q4

1996:Q4

1994:Q4

82.0

85.3

78.1

84.4

83.2

83.2

-3

.2

-.2

81.1

85.7

76.6

84.0

82.3

82.2

-.3

.2

-.1

82.0
80.6

88.9
84.2

77.8
76.1

88.7
81.9

86.2
80.5

86.4
80.4

-.6
-.2

.1
.2

-.1
-.2

24
25
32

79.3
82.6
81.7
77.9

84.5
93.6
86.6
83.6

73.2
75.5
72.5
69.7

83.5
86.6
83.8
80.7

82.0
84.7
81.3
79.3

81.6
84.5
82.0
79.5

-.4
^t.O
-2.1
-.1

.3
-2.8
-.1
-.2

-.1
-2.6
.3
.0

Primary metals
Iron and steel
Raw steel
Nonferrous
Fabricated metal products
Industrial machinery and equipment
Computer and office equipment
Electrical machinery
Semiconductors and related
components

33
331,2
33 lpt
333-6,9
34
35
357
36

80.1
80.0
79.7
80.5
77.7
80.9
80.9
80.8

92.7
95.2
92.7
89.3
82.0
85.4
86.9
84.0

73.7
71.8
71.5
74.2
72.2
72.4
66.9
75.1

93.6
93.5
94.8
93.9
85.8
88.0
82.2
87.8

91.1
90.7
92.5
91.8
84.3
90.2
89.7
87.3

90.8
89.3
89.7
92.7
84.6
89.1
91.0
80.3

-1.7
-1.4
-.7
-1.9
1.0
.8
-.3
.1

-.7
-.2
-.8
-1.2
.5
2.1
1.1
1.7

-.1
-2.1
2.4
2.5
-.2
-1.2
-5.4
3.1

3672-9

79.4

81.0

75.5

87.3

88.2

78.6

1.9

2.2

4.7

Transportation equipment
Motor vehicles and parts
Autos and light trucks 2
Aerospace and miscellaneous
Instruments
Miscellaneous

37
371
37 lpt
372-6,9
38
39

76.0
76.6
75.7
82.1
75.1

85.8
89.1
92.2
87.3
81.4
79.0

68.5
55.9
53.3
79.2
77.2
71.7

76.0
82.5
85.1
68.1
77.2
78.0

69.4
74.7
77.7
62.5
77.6
77.6

72.2
69.5
76.0
75.7
79.9
78.5

-1.3
-2.5
-.1
.4
-.8
2.2

-1.6
-3.7
-2.6
1.4
-.2
4.3

-2.8
-7.6
-4.2
3.6
.7
6.7

20
22
23
26

83.5
83.1
85.6
81.4
89.3

87.3
85.4
90.4
85.1
93.5

80.7
82.7
77.7
75.5
85.0

84.7
82.5
92.2
86.3
93.1

82.6
81.5
83.6
77.5
89.0

82.9
81.7
83.3
74.5
88.8

-.1
-.4
1.6
5.1
-.8

.3
-.3
1.3
5.1
.8

-.1
-.5
1.0
4.5
1.4

27
28
29
30
31

86.2
79.6
85.8
84.5
81.7

91.7
86.2
88.5
89.6
83.3

79.6
79.3
85.1
77.4
76.1

82.3
79.2
91.2
93.5
78.6

81.4
78.9
91.7
91.0
73.0

82.8
79.0
94.3
92.1
71.5

3
-1.5
-1.6
-.3
-6.2

1.0
-1.8
-.6
.8
-6.2

1.4
-3.5
-.5
1.6
-5.7

10
12
13
14

87.3
77.9
87.0
88.3
84.9

86.8
89.4
91.5
86.6
89.1

86.1
79.9
83.4
87.5
79.4

88.7
84.5
84.4
89.8
92.7

88.0
87.7
84.9
88.3
91.2

91.8
86.8
87.6
92.9
94.5

-.6
.1
-2.2
-.4
2.4

.2
-2.6
1.9
.0
1.6

-.3
.6
-2.9
.0
2.5

491,3pt
492,3pt

87.1
88.9
82.3

92.6
95.0
85.0

83.4
87.1
67.1

86.4
89.1
77.2

90.4
91.8
85.2

88.9
90.5
82.8

-.6
-.4
-1.1

-1.1
-1.2
-.7

-2.8
-2.7
-3.0

82.1
81.1

85.4
85.8

78.2
76.8

84.5
84.1

83.0
82.1

83.0
81.9

-.2
-.1

.3
.5

.2
.5

Total index
Manufacturing
Primary processing
Advanced processing
Durable
Lumber and products
Furniture and fixtures
Stone, clay, and glass products

Nondurable
Foods
Textile mill products
Apparel products
Paper and products
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastics products
Leather and products
Mining
Metal mining
Coal mining
Oil and gas extraction
Stone and earth minerals
Utilities
Electric
Gas
Aggregates, excluding computer
and office equipment
Total index
Manufacturing

NOTE. The "high" columns refer to periods in which utilization generally
peaked; the "low" columns refer to recession years in which utilization generally bottomed out. The monthly highs and lows are specific to each series, and
all did not occur in the same month.




1995:Q4

1. Standard Industrial Classification; see table A.4, note 1.
2. Series begins in 1977.
pt Part of classification,

1996:Q4

88

A.8.

Federal Reserve Bulletin • February 1997

R e v i s e d g r o w t h rates o f capacity, b y m a j o r industry group, 1 9 9 2 - 9 6

Industry group

Difference between revised
and earlier growth rates
(percentage points)

Revised growth rate
(percent)

SIC
code
1992

1993

1994

1995

1996

1992

1993

1994

1995

1996

Total index

1.9

1.8

2.8

33

3.7

-.2

-.4

-3

-.4

-.3

Manufacturing

2.1

2.0

3.1

3.7

4.1

-.3

-.5

-.4

-.5

-.3

1.0
2.6

1.2
2.4

2.0
3.7

2.1
4.6

2.4
4.9

-.3
-.3

-.3
-.6

-.2
-.4

-.5
-.3

-.1
-.4

24
25
32

2.0
.1
.5
.1

2.5
.3
1.3
.1

4.1
2.4
1.4
.9

5.5
2.1
1.3
1.2

6.1
2.8
2.3
2.2

-.5
-.5
-.5
-.6

-.6
-.8
-.6
-.1

-.5
1.6
-.6
.0

-.5
-1.2
-.4
-.5

-.5
.4
-.1
-.5

Primary metals
Iron and steel
Raw steel
Nonferrous
Fabricated metal products
Industrial machinery and equipment
Computer and office equipment
Electrical machinery
Semiconductors and related
components

33
331,2
33 Ipt
333-6,9
34
35
357
36

-1.1
-2.3
-3.0
.5
-.1
3.8
14.4
6.5

-.1
-1.0
-4.2
.9
1.5
4.7
19.0
8.1

1.4
2.8
.9
-.3
1.5
6.3
22.8
11.7

1.8
1.9
3.1
1.6
2.7
9.0
29.0
16.6

3.3
4.5
1.1
1.8
2.9
11.4
36.1
16.5

.1
.0
.0
.2
-.4
-.3
.4
.1

.2
.0
.0
.4
.4
-1.1
.4
.8

-.5
.0
.0
-1.0
-.4
-2.4
-2.2
2.0

-.3
.0
.0
-.7
.5
-2.4
2.2
1.8

.2
.9
-2.8
-.6
.9
-1.1
6.8
.9

3672-9

15.9

20.6

27.3

35.1

29.7

1.8

8.0

9.0

10.0

4.2

Transportation equipment
Motor vehicles and parts
Autos and light trucks
Aerospace and miscellaneous
Instruments
Miscellaneous

37
371
371pt
372-6,9
38
39

1.4
3.2
.8
.1
1.1
1.5

.7
2.9
.0
-1.9
.5
1.5

3.0
7.5
5.5
-2.1
.2
1.4

2.8
7.2
5.9
-2.5
.0
1.4

1.3
3.4
1.8
-1.5
.0
1.4

-.6
-.5
-1.6
-.2
-.1
-3.4

-1.3
-1.6
-2.7
-1.1
-.4
-2.3

-.4
.9
-.3
-1.8
-.8
-2.4

.7
1.6
2.7
-.3
-.9
-2.5

-.3
-.6
.0
.2
-1.0
-2.5

20
22
23
26

2.2
2.6
1.7
.2
1.8

1.4
1.8
2.5
.5
2.3

1.8
2.0
3.5
.4
1.5

1.6
2.1
4.1
2.9
1.9

1.7
1.9
2.4
1.3
1.6

-.1
.4
-.8
-1.9
-.5

-.4
-.2
-.8
-2.1
.1

-.3
.0
.4
-.6
-.6

-.3
.4
.4
.8
-1.3

.1
.3
.6
.8
-1.2

27
28
29
30
31

.6
3.8
-1.5
3.8
-2.6

-.8
2.2
-.6
3.3
-2.1

-.1
3.0
1.9
4.3
-1.7

-.2
2.0
-.2
2.3
-1.9

-.5
3.5
.3
1.6
-1.4

-.3
-.1
-.3
-.4
.1

.0
-.4
.0
-.9
.1

-1.7
.7
1.6
-.4
.8

-.2
-.4
-.8
-1.2
.9

.0
.9
-.5
-1.5
1.0

10
12
13
14

-1.2
2.5
-.3
-1.8
.0

-.6
1.8
1.4
-1.6
1.9

.7
-1.5
4.3
-.2
1.0

-.4
.9
-.9
-.8
1.9

-.4
1.2
.8
-1.1
1.8

.0
.0
-1.2
.3
-.5

.4
.1
.3
.3
1.0

.8
-1.2
3.2
.4
-.5

-.4
-.1
-2.0
.0
-1.1

-.2
.2
-.2
-.2
-.7

491,3pt
492,3pt

1.4
1.5
.0

.8
1.4
.2

1.2
1.0
.4

1.8
2.2
.5

2.1
2.6
.7

.3
.0
.0

.2
.7
.0

.8
.6
-.1

.8
1.1
-.2

.7
1.0
-.3

1.7
1.9

1.5
1.7

2.5
2.7

2.8
3.1

3.0
3.3

-.2
-.3

-.3
-.4

-.1
-.3

-.2
-.3

-.1
-.1

Primary processing
Advanced processing
Durable
Lumber and products
Furniture and fixtures
Stone, clay, and glass products

Nondurable
Foods
Textile mill products
Apparel products
Paper and products
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastics products
Leather and products
Mining
Metal mining
Coal mining
Oil and gas extraction
Stone and earth minerals
Utilities
Electric
Gas
Aggregate, excluding computer
Manufacturing

NOTE. See notes to table A.4. Growth rates are calculated as the percentage
change in the seasonally adjusted index from the fourth quarter of the previous
year to the fourth quarter of the year specified.




pt Part of classification,

Industrial Production and Capacity Utilization: Historical Revision and Recent Developments

A.9.

89

Value added and annual proportions in industrial production, by industry groups, 1994-96
Revised

Previous
SIC
code1

Item

Total index

1992
valueadded
proportion

1994
IP
proportion

1995
IP
proportion

1992
valueadded
proportion

1994
IP
proportion

1995
IP
proportion

1996
IP
proportion

100.0

100.0

100.0

100.0

100.0

100.0

100.0

85.4

86.2

86.5

85.4

86.6

86.6

86.4

26.6
58.9

26.7
59.6

26.3
60.1

26.5
58.9

28.2
58.4

28.3
58.4

27.7
58.7

24
25
32

45.0
2.0
1.4
2.1

47.2
2.0
1.4
2.0

48.1
1.9
1.4
2.0

45.0
2.0
1.4
2.1

46.3
2.2
1.4
2.2

46.5
2.0
1.3
2.1

46.8
2.1
1.3
2.1

Primary metals
Iron and steel
Raw steel
Nonferrous
Fabricated metal products
Industrial machinery and equipment
Computer and office equipment
Electrical machinery
Semiconductors and related
components

33
331,2
331pt
333-6,9
34
35
357
36

3.1
1.7
.1
1.4
5.0
8.0
1.8
7.2

3.2
1.8
.1
1.4
5.1
9.2
2.5
8.2

3.2
1.8
.1
1.4
5.1
10.1
3.3
9.1

3.1
1.7
.1
1.4
5.0
8.0
1.8
7.3

3.6
2.0
.1
1.6
5.2
8.6
1.7
7.7

3.6
1.9
.1
1.7
5.3
9.1
2.1
8.3

3.5
1.9
.1
1.6
5.3
9.5
2.5
8.6

3672-9

2.6

3.3

4.0

2.6

4.2

4.6

4.8

Transportation equipment
Motor vehicles and parts
Autos and light trucks
Aerospace and miscellaneous
Instruments
Miscellaneous

37
371
37 lpt
372-6,9
38
39

9.5
4.8
2.5
4.7
5.4
1.3

9.5
5.7
3.0
3.8
5.0
1.4

9.1
5.6
2.9
3.5
4.9
1.3

9.5
4.9
2.6
4.6
5.4
1.3

9.3
5.4
2.7
3.8
5.0
1.3

8.6
5.1
2.4
3.5
4.8
1.3

8.4
4.8
2.3
3.6
4.7
1.3

20
21
22
23
26

40.5
9.4
1.6
1.8
2.2
3.6

39.1
9.1
1.4
1.8
2.1
3.6

38.3
9.0
1.4
1.7
1.9
3.5

40.4
9.4
1.6
1.8
2.2
3.6

40.3
9.3
1.2
1.8
2.1
3.7

40.2
9.3
1.2
1.7
1.9
3.7

39.5
9.4
1.2
1.6
1.8
3.3

27
28
29
30
31

6.8
9.9
1.4
3.5
.3

6.3
9.5
1.4
3.8
.2

6.1
9.5
1.3
3.7
.2

6.7
9.9
1.4
3.5
.3

6.6
10.0
1.6
3.8
.2

6.5
10.2
1.6
3.8
.2

6.5
10.1
1.8
3.8
.2

10
12
13
14

6.9
.5
1.0
4.8
.6

6.3
.4
1.0
4.4
.6

6.1
.4
1.0
4.2
.6

6.9
.5
1.0
4.8
.6

5.9
.5
.9
3.9
.6

5.6
.5
.9
3.7
.6

5.6
.4
.9
3.7
.6

491,3pt
492,3pt

7.7
6.1
1.6

7.4
5.9
1.5

7.4
5.9
1.5

7.7
6.2
1.6

7.5
5.9
1.6

7.7
6.0
1.7

8.0
6.3
1.8

Manufacturing
Primary processing
Advanced processing
Durable
Lumber and products
Furniture and fixtures
Stone, clay, and glass products

Nondurable
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastics products
Leather and products
Mining
Metal mining
Coal mining
Oil and gas extraction
Stone and earth minerals
Utilities
Electric
Gas

NOTE. The IP proportion data are estimates of the industries' relative contributions to overall IP growth in the following year. For example, a 1 percent
increase in durable goods manufacturing in 1997 would account for a 0.468 percent increase in total IP.

APPENDIX
DATA

B: REVISION

OF ELECTRIC

POWER

The Federal Reserve's monthly indexes of industrial
electric power use, which begin in 1972, have been
revised.12 The indexes are now expressed as percentages of electric power use in 1992; the previous
12. The electric power indexes appear in table 9 of the Federal
Reserve's monthly statistical release G.17, "Industrial Production and
Capacity Utilization."




1. Standard industrial classification; see table A.4, note 1.
pt Part of classification,

comparison base year was 1987. The revisions of the
electric power series stem from three sources: more
complete reports from utilities and some changes in
the Federal Reserve's utility reporting panel for
recent years; more accurate staff estimates of the
increase in the electricity generated by individual
manufacturing and mining firms for their operations
(cogeneration) that took place during the last half of
the 1980s; and adjustments of the detailed series on
purchased power consumption to annual benchmarks
derived from data published in the Annual Survey of

90

Federal Reserve Bulletin • February 1997

Manufactures (ASM) from 1972 to 1993. Compared
with the previously published data, the revised index
of total electric power use in manufacturing and
mining shows somewhat stronger growth since 1989
and a slightly greater decline from 1979 to 1982; the
overall pattern, however, is quite similar to previous
results (chart B.l). The revised cogeneration component grows noticeably faster (chart B.2).
Since 1971 the electric power data have been used
regularly to estimate key components of the monthly
industrial production index. Currently, forty-one individual monthly production series are derived from
electric power data, and these series represent 28 percent of the IP index in terms of its 1994 value-added
proportions (table B.l). Electricity is an integral input
to industrial production processes, with such diverse
uses as powering industrial machinery and materials
conversion processes to controlling lighting and climate. For these forty-one series, changes in electric
power use are generally closely linked to output
changes, a linkage that is primarily a reflection of
the variation in machine operation rates or materials
consumption that accompanies short-run adjustments
in production. In the current revision of industrial
production, the forty-one production series incorporate the revised electricity data from January 1992
onward.
The electric power data are also used to develop
productivity extrapolations after 1994 for production
series based on production-worker hours. In the
monthly estimation process for the index of production, electric power data continue to be used to review
output estimates made with physical product and
production-worker-hour data. Thus, the use of electric power series goes beyond the direct monthly
estimation of the forty-one series.

Description of Data Collected

B.l.

B.2.

Revised and earlier industrial electric power use,
1972-96

The respondents to the Federal Reserve's Monthly
Survey of Industrial Electricity Use report to the
Reserve Bank in their Federal Reserve District. The
survey consists of two voluntary reports: one for
electric utility companies and one for manufacturing
and mining firms that are cogenerators. The utilities
report their data in thousands of kilowatt-hours of
electric power sold to manufacturing and mining
establishments classified according to their SIC for
1987.13 Each utility reporter provides, on average,
sales data for 120 three-digit SIC industry groups.
Each cogenerator reports power used according to the
SIC grouping for its own plant.
Currently, 175 utilities and 186 cogenerating companies voluntarily participate in the monthly electric
power survey; the response rate for the combined
panel is about 95 percent. A comparison of the
kilowatt-hour sales reported by utilities to the Federal
Reserve with establishment reports in the 1994 ASM
indicates that the Board survey captured about 75 percent of the total sales by electric utilities to manufacturing establishments. Seventy-one new cogenerators
joined the FRB reporting panel in 1992, raising the
sample coverage from about 30 percent of cogener-

13. The reports are based on monthly meter readings, or billings,
and may not uniformly represent electric power use. However, a new
data collection procedure implemented in 1990 has allowed easier
detection of instances of billing for two months or of delayed reporting. The possibility of a systematic irregular relation of billing periods
(once corrected) to calendar months is generally rejected by the data; a
statistical analysis comparing electric power data with productionworker-hour data for seventy different SIC codes showed the reports
to be significantly more closely related for the same months than at
any lag.

Revised and earlier electric power cogeneration,
1982-96
Index, 1992 = 100, ratio scale

Revised

NOTE. Seasonally adjusted monthly data through November 1996.




NOTE. Seasonally adjusted monthly data through November 1996.

Industrial Production and Capacity Utilization: Historical Revision and Recent Developments

B. 1.

Industrial production series based on electric power
components as a proportion of total industrial
production, 1994
Percent
Series

Total
Job printing
Drugs and medicines
Office and computing equipment
Medical instruments
Soap and toiletries
Canned and frozen food
Metalworking machinery
Bakery products
Miscellaneous machinery
Metal stampings
Soft drinks

Proportion of
IP index in 1994
28.31
2.98
2.80
2.09
1.57
1.51
1.29
1.09
1.01
.99
.98
.88

Miscellaneous foods, n.e.c
General industrial equipment
Electrical industrial apparatus
Lighting and wiring products
Office furniture, fixtures, and miscellaneous
Household furniture
Miscellaneous rubber products
Concrete and plaster products
Miscellaneous chemical products
Hardware and tools

.81
.75
.68
.68
.65
.64
.60
.60
.59
.48

Computer parts
Iron and steel foundries
Miscellaneous stone and earth manufacturers
Metal services, wire products
Knit garments
Children's and miscellaneous garments
Agricultural chemicals, n.e.c
Bolts, fasteners
Electrical distribution equipment
Glass products

.45
.44
.39
.37
.36
.33
.32
.32
.30
.24

Paving and roofing materials

.19
.18
.17
.14
.13
.11
.07
.05
.03
.03

Wood products, n.e.c
Miscellaneous glassware
Miscellaneous primary metals
Plumbing fixtures
Wood containers
Leather and belting
Miscellaneous metal ores
Consumer glassware
n.e.c. Not elsewhere classified.

ated power to about 50 percent, judging from ASM
data. Altogether, the panel of utilities and cogenerators accounts for about 73 percent of total industrial
use of electric power in the United States.
Aspects of the Revision of Electric Power Data
The revised data incorporate more complete reports
that have been received from respondents since the
1995 annual update. The new figures incorporate a
more accurate classification of customer SIC codes
by the utility respondents and also some changes in
the reporting panel back to 1989. Although the effects
of these changes are generally small relative to U.S.
totals, the classification changes have improved the
recent figures by detailed industry classification.



91

The electric power database has been revised back
to 1982 to reflect the expansion of the cogenerator
panel. Data provided by new participants in the
cogenerator panel were incorporated in the revision
of the electric power indexes in July 1994, which
covered the period back to December 1991. The new
participants typically began cogenerating operations
after 1982 and contributed to the increase in cogeneration that took place in the last half of the 1980s.
Passage of the 1978 Public Utilities Regulatory Policies Act stimulated much of this increase. In this
revision, the staff estimated the likely effect of these
new reporters on cogeneration at the three-digit SIC
level for the years back to 1982 consistent with
aggregate data on cogeneration from the ASM. New
individual cogeneration series were prorated back
linearly to zero in January 1982, unless we had
specific information to indicate otherwise.
This revision introduced adjustments to annual
benchmarks for the monthly electric purchased power
series derived from ASM data at the three-digit SIC
level. The purpose of these adjustments was to
improve the accuracy of the Federal Reserve's historical data by detailed industry classification. The
overall index has always captured total industrial
power use quite well, judging from the ASM data,
but discrepancies at the three-digit level were
sizable.14
The benchmark adjustments to each Federal
Reserve series involved the following steps: (1) The
annual ASM series on purchased electric power was
indexed and then converted to a monthly series by
interpolating linearly between the annual index values. (2) The ratio of the ASM-Census monthly index
to the Federal Reserve monthly index was calculated.
(3) A centered, three-year average of the ratio was
determined, with the weights for computing the threeyear average tapered for twelve months at the beginning and end of the three-year period. (4) The
smoothed monthly ratios were multiplied by the
original Federal Reserve monthly index values to
obtain the final monthly index. This method of adjustment to benchmarks preserves the higher-frequency,
month-to-month changes in the Federal Reserve
series while ensuring that the longer-run trends in the
ASM data are reproduced.

14. Comparisons with Department of Energy (DOE) data on industrial sales of electricity by utilities are not useful because the industrial
classification used by DOE relates partly to size of establishment; it
includes large commercial and irrigation customers in the industrial
category, while frequently classifying small industrial customers as
commercial.

92

Federal Reserve Bulletin • February 1997

Results of the Revision
The revisions for major series are generally small
(table B.2). The largest users of electric power are the
chemicals, primary metals, and paper industries, followed by producers of food products, petroleum
products, transportation equipment, and rubber and
plastics products. Within chemicals, the inorganic
chemical and plastics materials industries are the
major consumers, and within primary metals, basic
steel and primary aluminum processing absorb large
amounts of electric power. Among these major industrial groups, the largest revisions since 1989 occur in
petroleum refining.
Two-digit SIC groups of series were seasonally
adjusted using a multivariate procedure that, in comparison with standard methods, yields seasonal factors that contain less noise and tend to be more stable
as new data are received.15 The standard deviation of

the monthly growth rates for total electric power use
is about 1.2 percentage points from 1973 to the
present; it is about 0.9 percentage point over that
period if recessions are excluded. The measurement
precision of the growth rates is largely determined by
the utility sample, which represents about 90 percent
of total combined sample coverage (utilities plus
cogenerators). A statistical analysis of the utility data
suggests that the standard deviation of the measurement error of growth rates for total power use is
0.5 percentage point. For cogenerators, the standard
deviation of the errors for sample growth rates is
larger, 1.9 percentage points, but has been reduced
from 3.0 percentage points, which was the standard
deviation before the 1992 expansion of the reporting
panel. These estimates of standard errors decline as
the period of the growth rate lengthens.
•

15. See Eric J. Bartelsman and William P. Cleveland, "Joint
Seasonal Adjustment of Economic Time Series," Finance and Economics Discussion Series No. 93-28 (Board of Governors of the
Federal Reserve System, August 1993).

B.2.

Revised growth rates pf electric power use, 1973-96

Series

Difference between revised
and earlier growth rates
(percentage points)

Revised growth rates
(percent)

Billions of
kilowatt hours
in 1992'
1973-79

1979-89

1989-96

1973-79

1979-89

1989-96

Total index

934.1

2.4

.5

1.3

-.1

.0

.1

Total utilities
Total cogeneration

835.3
98.8

2.6
-1.6

.5
1.0

1.2
2.4

-.2
2.8

-.1
1.7

.2
1.1

Total manufacturing
Durable manufacturing
Nondurable anufacturing
Mining

854.0
365.8
488.3
80.1

2.2
1.9
2.5
5.6

.6
.1
1.0
.4

1.3
.6
2.0
1.0

-.1
.1
-.2
-.2

.0
.0
-.1
.2

.2
.1
.2
.0

Two-digit industries
Chemicals and products
Primary metals
Paper and products
Food and kindred products
Petroleum products
Transportation equipment
Rubber and plastic products
Oil and gas extraction
Stone, clay, and glass products
Industrial machinery and equipment
Electrical machinery
Textile mill products

171.7
150.9
113.3
58.8
47.0
39.6
38.0
36.0
33.8
33.2
33.0
31.5

2.4
1.9
3.2
2.7
3.5
.4
4.8
3.1
2.7
3.1
1.4
.4

-.5
-1.8
2.7
2.4
1.9
2.0
3.0
.5
.0
1.8
1.6
1.0

1.5
-.6
1.6
2.6
2.9
.6
4.3
.2
1.0
.6
2.2
1.4

-.5
.3
.6
-.3
.1
.1
.0
.2
.0
.2
.1
.0

-.5
.1
.5
.0
1.3
.3
-.5
-.1
.1
-.1
-.3
.0

.0
.0
-.1
.1
1.5
.4
.0
.2
.0
-.2
.8
.1

31.4
19.8
18.6
17.3
13.7
12.8
12.7
8.2
6.0
4.5
1.5
1.0

2.1
2.3
9.3
2.2
2.3
4.5
7.6
-1.9
1.0
2.3
2.5
-2.1

1.4
2.0
.1
4.9
4.7
-.1
1.2
.7
3.3
1.0
1.9
-2.0

1.4
2.5
2.9
2.6
.8
1.4
-.2
.0
1.8
4.1
.5
-2.5

-.5
-2.2
-.3
-.7
.0
-.7
.1
-3.1
-1.0
-.6
2.3
-1.0

-.4
-1.2
1.0
-.2
.0
.2
-.3
-1.7
.2
-.1
2.4
-3.0

.2
-.1
-.5
-.1
1.3
-.4
.3
-.5
-.4
-.6
-3.0
-1.5

Fabricated metal products
Lumber and products
Metal mining
Printing and publishing
Instruments
Stone and earth minerals
Coal mining
Apparel products
Furniture and fixtures
Miscellaneous manufactures
Tobacco products
Leather and products

NOTE. Growth rates are calculated as the annual percentage change from the
first year to the last year indicated. The 1996 estimate is the average through
November.




1. Sold in 1992 to each category as reported by the Bureau of the Census,

93

Industrial Production and Capacity Utilization
for December 1996
Released for publication January 17
Industrial production advanced 0.8 percent in December after a similar gain in November. The output of
non-energy consumer goods, business equipment,
and non-energy materials advanced sharply. The
unseasonably mild weather in December caused a
large drop in the output of utilities, reducing the
growth rate of overall production about 0.3 percentage point. At 129.1 percent of its 1987 average, total

industrial production in December was 5.1 percent
higher than it was in December 1995. For the fourth
quarter as a whole, industrial production grew
4.1 percent at an annual rate after an increase of
4.5 percent in the third quarter; growth in the fourth
quarter was held down significantly by strike-related
losses in the motor vehicle industry. The utilization
of industrial capacity increased 0.4 percentage point
in December, to 83.8 percent, the highest level since
August 1995.

Industrial production indexes
Twelve-month percent change

Twelve-month percent change

Materials
_

Durable
manufacturing

Products

1990

1991

1992

1994

1993

1995

1996

1990

1992

1991

1993

1994

1995

1996

Capacity and industrial production
Ratio scale, 1987 production = 1 0 0

Ratio scale, 1987 production = 100
160
140

—

160
140

Manufacturing
Capacity

—
^

120

^

100

120
-

Production

80

I

I

I

I I

80
1

1

1

1

1

1

1

1

Percent of capacity

1982

1984

1986

1988

1990

1992

1994

1996

1

1

1

1

1

Percent of capacity

1982

1984

1986

All series are seasonally adjusted. Latest series, December. Capacity is an index of potential industrial production.




100

1988

1990

1992

1994

1996

94

Federal Reserve Bulletin • February 1997

Industrial production and capacity utilization, December 1996
Industrial production, index, 1987=100
Percentage change
1996

Category

19961

Dec. 1995
to
Dec. 1996

Sept. r

Oct/

Nov/

Dec.P

Sept.'

Oct/

Nov.'

Dec.P

Total

127.2

127.1

128.1

129.1

.2

-.1

.8

.8

5.1

Previous estimate

127.1

126.9

128.0

.1

-.2

.9

Major market groups
Products, total2
Consumer goods . . .
Business equipment
Construction supplies
Materials

123.1
116.8
172.0
115.4
133.4

123.1
116.7
172.5
113.8
133.1

124.4
118.2
174.6
115.2
133.8

125.2
118.7
176.6
115.8
135.1

.4
.3
.6
.8
-.1

.0
-.1
.3
-1.3
-.2

1.0
1.2
1.2
1.2
.5

.6
.5
1.1
.5
.9

5.1
2.6
11.5
4.8
5.2

Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities

129.6
142.3
115.6
101.9
125.4

129.5
141.5
116.2
102.0
125.5

130.4
142.8
116.7
102.7
128.4

131.8
144.7
117.6
104.0
124.1

.3
.0
.7
-.8
-.1

-.1
-.5
.5
.1
.1

.7
.9
.5
.6
2.3

1.1
1.3
.8
1.2
-3.3

5.6
7.3
3.4
5.9
-.8
MEMO

Capacity utilization, percent
1995
Average,
1967-96

Total

Low,
1982

High,
1988-89
Dec.

Sept. r

Oct/

Nov/

Dec.P

83.0

83.4

83.8

4.0

82.8
81.1
86.9
93.0
90.2

4.5
5.3
2.4
-.1
1.5

82.1

71.8

84.9

82.9

83.4
83.3

82.9

83.3

81.4
80.7
82.8
87.5
87.0

70.0
71.4
66.8
80.6
76.2

85.2
83.5
89.0
86.5
92.6

81.9
80.2
86.0
87.7
92.2

82.3
80.5
86.7
91.2
91.4

81.9
80.0
86.6
91.3
91.4

82.2
80.6
86.1
91.9
93.4

Previous estimate
Manufacturing
Advanced processing
Primary processing .
Mining
Utilities

NOTE. Data seasonally adjusted or calculated from seasonally adjusted
monthly data.
1. Change from preceding month.

When analyzed by market group, the data show
that the output of consumer goods advanced 0.5 percent, led by a 2.2 percent increase in the output of
durable consumer goods. A surge in the production
of appliances, which had been weak for several
months, contributed a substantial portion of the
increase in durable consumer goods. In addition, the
output of motor vehicles, which had rebounded in
November after the settlement of the strike at General
Motors, rose slightly further in December. The production of nondurable consumer goods was flat, held
down by a large decline in utility output for residential use. Excluding energy products, however, the
nondurable consumer goods sector marked its fourth
consecutive sizable monthly increase; the sector
(excluding energy products) had been quite sluggish
since the beginning of 1995. The recent strength has
been concentrated in foods and tobacco and in
chemicals.
The output of business equipment rose 1.1 percent
in December, nearly matching the 1.2 percent jump



1996

Capacity,
percentage
change,
Dec. 1995
to
Dec. 1996

2. Contains components in addition to those shown,
r Revised,
p Preliminary.

posted in November. The production of industrial
equipment, which had been weak for much of 1996,
increased sharply in December, and the output of
information processing equipment grew further.
The output of construction supplies rose 0.5 percent in December after an upward-revised increase of
1.2 percent in November. But with output quite weak
in October, growth in construction supplies for the
fourth quarter as a whole decelerated to a 3.5 percent
annual rate after a 9.6 percent gain in the third
quarter.
The output of materials increased 0.9 percent; the
production of durable and nondurable materials rose
sharply, but the output of energy materials declined.
Among durable materials, which advanced 1.6 percent, output grew sharply in the parts and materials
used primarily by the computer and motor vehicle
industries. The output of nondurable materials
increased 0.6 percent in December after a rise of
0.8 percent in November; advances in textile and
paper materials led the increase in both months. The

Industrial Production and Capacity Utilization

production of energy materials fell 0.6 percent, a
drop reflecting the unseasonably mild weather in
December.
When analyzed by industry group, the data
show that factory output rose 1.1 percent after a
revised increase of 0.7 percent in November; the
production of durable goods increased 1.3 percent,
while that of nondurable goods rose 0.8 percent.
Within the durable and nondurable groupings, most
major industries posted sizable gains. The only
industries in which production was little changed
were lumber, printing and publishing, and chemicals.
The output at mines rose again, but production at
utilities was sharply curtailed because of the mild
weather.
For the fourth quarter as a whole, factory output
advanced at a 4.1 percent annual rate. Production was
held down by strike-related disruptions in motor vehicles, which were mainly concentrated in October.
Production, outside of motor vehicles and parts, grew
at an annual rate of 5.8 percent in the fourth quarter,
up from its third-quarter rate of 5.1 percent. The
pickup in growth in this grouping reflected stronger
growth in nondurable manufacturing, particularly in
foods, textiles, and paper.
The factory operating rate increased 0.6 percentage
point, to 82.8 percent. The rate for advancedprocessing industries rose 0.5 percentage point, to
81.1 percent; the rate for primary-processing industries rose 0.8 percentage point, to 86.9 percent.
This release and the history for all published
series are available on the Internet at
http://www.bog.frb.fed.us, the Board of Governors
World Wide Web site.

REVISION OF INDUSTRIAL
CAPACITY
UTILIZATION

PRODUCTION

AND

The Federal Reserve will publish revisions of its
measures of industrial production (IP), capacity,
capacity utilization, and industrial use of electric
power on January 27, 1997. The revisions of IP,
capacity, and capacity utilization will incorporate
updated source data for recent years and will feature
a change in the method of aggregating the indexes.
From 1977 onward, the value-added proportions
used to weight individual series will be updated
annually rather than quinquennially. In addition, the
IP indexes and the capacity measures will be rebased
so that 1992 actual output equals 100. Capacity
utilization, the ratio of IP to capacity, will be recomputed on the basis of revised IP and capacity
measures.



95

The aggregate IP indexes will be constructed with
a superlative index formula similar to that introduced
by the Bureau of Economic Analysis as the featured
measure of real output in its January 1996 comprehensive revision of the National Income and Product
Accounts. At present, the aggregate IP indexes are
computed as linked Laspeyres indexes, with the
weights updated every five years. Because of the
rapid fall in the relative price of computers and
peripheral equipment, that periodic updating of
weights is too infrequent to provide reliable estimates
of current changes in output, capacity, and capacity
utilization. With the publication of the revision,
value-added proportions will be updated annually,
and the new index number formula will be applied to
all aggregates of IP, capacity, and gross value of
product.
For the most part, relative price movements
among the 260 individual components of the IP
index are likely to have little visible effect on total
IP. However, the more frequent updating of the
relative price of the output of the computer industry
could lower overall IP growth in some years as
much as Vi percentage point; in other years, the
updating of weights will have virtually no effect.
Because the new index number formula will slow
capacity growth as well as IP growth, the effect of the
reaggregation on overall capacity utilization should
be small.
The regular updating of source data for IP will
include the introduction of annual data from the 1994
Annual Survey of Manufactures and selected 1995
Current Industrial Reports of the Bureau of the Census. Available annual data on mining for 1994 and
1995 from the Department of the Interior will also be
introduced. Revisions to the monthly indicators for
each industry (physical product data, productionworker hours, or electric power usage) and revised
seasonal factors will be incorporated back to 1992. In
addition, the benchmark index for semiconductor output will be revised back to 1977 to reflect a hedonic
price index, similar in concept to what is used for the
computer industry.
The statistics on the industrial use of electric power
will be revised back to 1972. These revisions stem
from three basic sources. First, the new figures incorporate more complete reports received from utilities
for the past few years. Second, an updated panel of
reporters on cogeneration will be fully integrated into
our survey of electric power use. Third, the levels of
the monthly electric power series for manufacturing
industries will be benchmarked to indexes derived
from data published in the Census Bureau's annual
surveys and censuses of manufactures. These indexes

96

Federal Reserve Bulletin • February 1997

will also be revised so that 1992 electric power usage
equals 100.
More detail on the plans for this revision is available on the Internet at http://www.bog.frb.fed.us, the
Board's World Wide Web site. Once the revision is
published, the revised data will be available at that
site and on diskettes from the Board of Governors of
the Federal Reserve System, Publications Services,
202-452-3245. The revised data will also be available




through the Economic Bulletin Board of the Department of Commerce; for information about the Bulletin Board call 202-482-1986. In addition to the data
currently provided, the time series of implicit prices
necessary for a user to aggregate IP and capacity
under the new methodology will be provided. For
information on these revisions, call the Industrial
Output Section of the Board of Governors at
202-452-3151.
•

97

Announcements
LAWRENCE B. LINDSEY: RESIGNATION AS A
MEMBER OF THE BOARD OF GOVERNORS

Lawrence B. Lindsey on January 10, 1997,
announced his resignation as a member of the Board
of Governors of the Federal Reserve System, effective February 5. His letter of resignation was sent to
President Clinton yesterday.
Governor Lindsey will join the American Enterprise Institute in Washington as a Resident Scholar
and holder of the Arthur F. Burns Chair in Economics. He will also become Managing Director of Economic Strategies, an economic advisory service based
in New York City.
As is customary in such cases, Governor Lindsey
will not attend the meeting of the Federal Open
Market Committee that is scheduled for February 4
and 5.
Governor Lindsey served as a member of the
Board of Governors for more than five years, from
November 1991 to February 1997. Additionally, he
was Chairman of the Board of the Neighborhood
Reinvestment Corporation, a national public-private
community redevelopment organization, from 1993
until the effective date of his resignation from the
Federal Reserve.
Before joining the Board, Governor Lindsey was a
Special Assistant to the President for Policy Development during the Bush Administration. He is a former
professor of Economics at Harvard University and
also served three years on the staff of the Council of
Economic Advisers during the Reagan Administration where he was Senior Staff Economist for Tax
Policy.
Governor Lindsey was born on July 18, 1954, in
Peekskill, New York. He received his A.B. magna
cum laude from Bowdoin College and his master's
and Ph.D. in economics from Harvard University. He
is the author of The Growth Experiment: How the
New Tax Policy is Transforming the U.S. Economy
(New York: Basic Books, 1990) and has contributed
numerous articles to professional publications. His
honors and awards include the Distinguished Public
Service Award of the Boston Bar Association, 1994;
an honorary Juris Doctor Degree from Bowdoin College, 1993; selection as a Citicorp/Wriston Fellow




of the Manhattan Institute for Economic Research,
1988; and the Outstanding Doctoral Dissertation
Award from the National Tax Association, 1985.
Governor Lindsey, his wife Susan, son Troy, and
daughter Emily, reside in Clifton, Virginia.
A copy of his letter of resignation appears below.
January 9, 1997
The Honorable William Jefferson Clinton
The President of the United States
The White House
Washington, D.C. 20500
Dear Mr. President:
I hereby submit my resignation as a Member of the
Board of Governors of the Federal Reserve System effective February 5, 1997. Consequently, I will not be attending the Federal Open Market Committee meeting on February 4th and 5th.
It has been my honor and privilege to have served on
the Board of Governors for more than five years. During
that time, under the outstanding leadership of Chairman
Greenspan, the Federal Reserve has played an integral role
in the recapitalization and strengthening of the banking
system and has administered monetary policy in a manner
which has made our economic performance the envy of the
world.
My tenure at the Board has also allowed me, both as
Chairman of the Board's Community and Consumer
Affairs Committee and as Chairman of the Neighborhood
Reinvestment Corporation, to become actively involved in
the areas of community development and affordable housing. Frankly, this involvement has been one of the most
personally and intellectually enriching experiences of my
life, and the area has become one in which I expect I will
retain an abiding interest.
I have been most impressed with the talent, dedication,
and integrity of my colleagues at the Board. The ten men
and women with whom I have served during my tenure
have each brought exceptional insights, energy and skills
to the tasks at hand. The country has been fortunate to have
had the services of each of them. I therefore respectfully
suggest that in your search for a successor to my seat on
the Board, that you consider my colleagues, past and
present, as ideal models for the type of individual who will
be an asset to the Board.
Sincerely,

Lawrence B. Lindsey

98

Federal Reserve Bulletin • February 1997

APPOINTMENTS
OF NEW MEMBERS TO THE
THRIFT INSTITUTIONS ADVISORY
COUNCIL

The Federal Reserve Board announced on December 27, 1996, the names of seven new members of its
Thrift Institutions Advisory Council and designated a
new president and vice president of the council for
1997.
The council is an advisory group made up of
twelve representatives from thrift institutions. The
panel was established by the Board in 1980 and
includes representatives 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.
The new council president for 1997 is David F.
Holland, Chairman, President, and CEO, Boston
Federal Savings Bank, Burlington, Massachusetts.
The new vice president is Charles R. Rinehart, Chairman and CEO, Home Savings of America, FSB,
Irwindale, California.
The seven new members, named for two-year
terms beginning January 1, are the following:
David E.A. Carson, Chairman, President, and CEO,
People's Bank, Bridgeport, Connecticut
William A. Fitzgerald, Chairman and CEO,
Commercial Federal Bank, Omaha, Nebraska
Stephen D. Hailer, President and CEO,
North Akron Savings Association, Akron, Ohio
Edward J. Molnar, President and CEO, Harleysville
Savings Bank, Harleysville, Pennsylvania
Guy C. Pinkerton, Chairman, President, and CEO,
Washington Federal Savings & Loan Association,
Seattle, Washington
Terry R. West, President and CEO, JAX Navy Federal
Credit Union, Jacksonville, Florida
Frederick Willetts, III, President and CEO,
Cooperative Bank for Savings, Inc., SSB,
Wilmington, North Carolina

INCREASE IN THE AMOUNT OF REVENUE
THAT
SECTION 20 SUBSIDIARIES MAY DERIVE FROM
UNDERWRITING AND DEALING IN SECURITIES

The Federal Reserve Board announced on December 20, 1996, an increase in the amount of revenue
that a section 20 subsidiary may derive from under


writing and dealing in securities from 10 percent to
25 percent of its total revenue.
The increase is effective March 6, 1997. Section 20
subsidiaries will therefore be allowed to employ the
25 percent limit for the first quarter of 1997.
The revenue limit is designed to ensure that a
section 20 subsidiary will not be engaged principally
in underwriting and dealing in securities in violation
of section 20 of the Glass-Steagall Act.
Based on its experience in supervising these subsidiaries and developments in the securities markets
since the revenue limitation was adopted in 1987, the
Board concluded that a company earning 25 percent
or less of its revenue from underwriting and dealing
would not be engaged principally in that activity for
purposes of section 20.

ADOPTION OF A REVISED
INTERAGENCY
UNIFORM FINANCIAL INSTITUTIONS
RATING
SYSTEM

The Federal Reserve Board announced on December 24, 1996, adoption of a revised interagency Uniform Financial Institutions Rating System (UFIRS),
commonly known as the CAMEL rating system, to
include an increase in the emphasis on risk management processes and the addition of a sixth rating
component for sensitivity to market risk. The revised
rating system was effective January 1, 1997, for use
at examinations of state member banks.
The existing CAMEL rating system produces a
composite rating of an institution's overall condition
and performance by assessing five components,
which form the acronym CAMEL: capital adequacy,
asset quality, management administration, earnings,
and liquidity. The updated rating system will now be
referred to as the CAMELS rating system, to include
sensitivity to market risk.
The UFIRS is an internal supervisory tool used by
federal supervisory agencies represented on the Federal Financial Institutions Examination Council to
evaluate the soundness of financial institutions on a
uniform basis and to identify those institutions requiring special supervisory attention or concern.

EXPANSION OF THE FEDERAL
BOARD'S AUDIT
CONTRACT

RESERVE

The Federal Reserve Board said on December 17,
1996, that it had expanded its audit contract with
Coopers & Lybrand to include an annual financial
audit of each of the twelve Federal Reserve Banks.

Announcements

These audits by the independent outside auditor
will be in addition to the annual audit of the combined Reserve Bank financial statements that Coopers
& Lybrand has conducted since 1995.
The use of an outside accounting firm to audit all
twelve Reserve Banks was announced recently by
Chairman Alan Greenspan during a Washington,
D.C. speech.
Since 1995, Coopers & Lybrand has conducted
year-end audits of the combined Reserve Bank financial statements as well as of the individual financial
statements of two or three Reserve Banks each year.
The audit of the 1995 combined Reserve Bank financial statements represented the first such audit conducted by an independent accounting firm. Based on
the success of this program, the Board has decided to
extend the outside audit to all twelve Reserve Banks.
The Reserve Banks will continue to be audited by
each Bank's internal audit function and by the
Board's financial examiners. The General Accounting Office also conducts audits of the Reserve Banks.

REGULATION D: FINAL RULE AND PROPOSAL
The Federal Reserve Board announced on December 26, 1996, a final rule and notice of proposed
rulemaking designed to simplify and update the
Board's Regulation D (Reserve Requirements of
Depository Institutions) and to reduce regulatory burden. The final rule is effective April 1, 1997.
The final rule adopts an earlier proposed rule as it
was proposed and makes certain technical changes.
In general the final rule deletes transitional rules
relating to the expansion of reserve requirements to
nonmember depository institutions, the authorization
of NOW accounts nationwide, and other matters that
no longer have a significant effect. The final rule also
eliminates the transition rules for de novo institutions
and separate transition rules for "dissimilar"
mergers.
The proposed rule requests comment on a clarification of the definition of "savings deposit," consistent
with comments the Board received on the earlier
proposal, and conforming changes to the definition of
"transaction account." The proposed definitions also
incorporate existing staff interpretations. No substantive change is intended. Comments on the proposal
are requested by February 4, 1997.
The rules are in accordance with the Board's policy of regular review of its regulations and the
Board's review of its regulations under section 303 of
the Riegle Community Development and Regulatory
Improvement Act.



99

REGULATION Z: ADJUSTMENT OF THE DOLLAR
AMOUNT THAT TRIGGERS
ADDITIONAL
DISCLOSURE FOR CERTAIN TYPES OF
MORTGAGES

The Federal Reserve Board has published, under
Regulation Z (Truth in Lending) requirements, an
adjustment of the dollar amount that triggers additional disclosure for certain types of mortgages. The
adjustment is effective January 1, 1997.
The Board is required to adjust annually the total
amount of total points and fees paid by the borrower
that triggers additional disclosures under Truth in
Lending. The adjustment is based on the annual
percentage change in the consumer price index in
effect on June 1, 1996. In 1996 the base amount was
raised to $424.
This adjustment was made as a result of the Home
Ownership and Equity Protection Act of 1994, which
sets forth rules for creditors offering home-secured
loans with total points and fees payable by the consumer at or before loan consummation that exceed
the greater of $400 or 8 percent of the total loan
amount.

PROPOSED

ACTIONS

The Federal Reserve Board on December 23, 1996,
published for public comment proposed revisions to
its Regulation B (Equal Credit Opportunity). Comments were requested by January 31, 1997.
In addition, on December 23, 1996, the Board
withdrew a proposed amendment to Regulation B
relating to the collection of data on race and other
information in credit transactions. The proposed
amendments would have eliminated a rule that generally bars creditors from asking about sex, race, color,
religion, and national origin. Under the proposal,
creditors would have been allowed but not required
to collect this information for all types of nonmortgage credit applications. In withdrawing the proposal, the Board stated its belief that the issue was
one that is best left for the Congress to consider.
The Federal Reserve Board on December 17, 1996,
published for public comment proposed revisions to
its Regulation C (Home Mortgage Disclosure). Comments are requested by February 25, 1997.
The Federal Reserve Board on December 18, 1996,
requested comment on proposed revisions to Regulation M (Consumer Leasing) to implement amendments of the Consumer Leasing Act. Comments were
requested by February 7, 1997.

100

Federal Reserve Bulletin • February 1997

Also, on December 18, 1996, the Federal Reserve
Board announced a month-long extension of time to
receive public comments on proposed amendments to
its margin regulations (Regulations G, T, and U)
issued in response to the enactment of the National
Securities Markets Improvement Act. As a result of
the extension, comments were requested by January 31, 1997.
The Federal Reserve Board on December 23, 1996,
requested public comment on issues to be addressed
in a proposed consumer information study required
by the Economic Growth and Regulatory Paperwork
Reduction Act of 1996. Comments were requested by
January 31, 1997.
The Federal Reserve Board on December 24, 1996,
joined with the Department of Housing and Urban
Development in issuing a request for public comment
on possible amendments to the Truth in Lending Act
and the Real Estate Settlement Procedures Act. Comments were requested by January 31, 1997.

PUBLICATION OF THE ANNUAL DIRECTORY OF
COMMUNITY DEVELOPMENT INVESTMENTS BY
BANKING
ORGANIZATIONS

The Federal Reserve Board announced on December 23, 1996, the publication of its annual update of
the directory of community development investments
by banking organizations.




This year's directory has been expanded to include
a separate section featuring community development
investments by state member banks. Previous editions
included only bank holding company investments.
The directory consists of descriptive profiles of
more than 150 existing community development corporations (CDCs) and investments made by bank
holding companies and state member banks. These
profiles provide information on the amount of initial
capital invested by an institution, a description of the
community development projects or activities undertaken or planned, and contact persons who can provide additional information on the organization and
operation of the CDC or other community development investment activity.
In issuing the directory, the Board emphasized that
bank holding companies or state member banks that
are considering making community development
investments are encouraged to consult with staff
members of both Community Affairs and Applications at their District Federal Reserve Bank.
Single or multiple copies of the directory may be
obtained by contacting the Community Affairs offices
of the District Federal Reserve Banks. For further
information, contact the Division of Consumer and
Community Affairs, Board of Governors of the Federal Reserve System, Washington, DC 20551, or
phone (202) 452-3378.
•

101

Minutes of the
Federal Open Market Committee Meeting
Held on November 13,1996
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
Wednesday, November 13, 1996, at 9:00 a.m.
Present:
Mr. Greenspan, Chairman
Mr. McDonough, Vice Chairman
Mr. Boehne
Mr. Jordan
Mr. Kelley
Mr. Lindsey
Mr. McTeer
Mr. Meyer
Ms. Phillips
Ms. Rivlin
Mr. Stern
Ms. Yellen
Messrs. Broaddus, Guynn, Moskow, and Parry,
Alternate Members of the Federal
Open Market Committee
Messrs. Hoenig, Melzer, and Ms. Minehan,
Presidents of the Federal Reserve Banks of
Kansas City, St. Louis, and Boston respectively
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.

Bernard, Deputy Secretary
Coyne, Assistant Secretary
Gillum, Assistant Secretary
Mattingly, General Counsel
Prell, Economist
Truman, Economist

Messrs. Lang, Lindsey, Mishkin, Promisel,
Rolnick, Siegman, Simpson, Sniderman,
and Stockton, Associate Economists
Mr. Fisher, Manager, System Open Market Account
Mr. Ettin, Deputy Director, Division of Research and
Statistics, Board of Governors
Messrs. Madigan and Slifman, Associate Directors,
Divisions of Monetary Affairs and Research and
Statistics respectively, Board of Governors
Mr. Reinhart, Assistant Director, Division of
Monetary Affairs, Board of Governors
Ms. Low, Open Market Secretariat Assistant,
Division of Monetary Affairs, Board of
Governors




Mr. Moore, First Vice President, Federal Reserve
Bank of San Francisco
Ms. Browne, Messrs. Davis, Dewald, Eisenbeis,
Goodfriend, and Hunter, Senior Vice Presidents,
Federal Reserve Banks of Boston, Kansas City,
St. Louis, Atlanta, Richmond, and Chicago
respectively
Messrs. Cox and Judd, Vice Presidents, Federal
Reserve Banks of Dallas and San Francisco
respectively
Ms. Perelmuter, Assistant Vice President, Federal
Reserve Bank of New York

By unanimous vote, the minutes of the meeting of
the Federal Open Market Committee held on September 24, 1996, were approved.
The Manager of the System Open Market Account
reported on recent developments in foreign exchange
markets. There were no open market transactions in
foreign currencies for System account during the
period since the meeting on September 24, 1996, and
thus no vote was required by the Committee.
The Manager also reported on developments in
domestic financial markets and on System open market transactions in government securities and federal
agency obligations during the period September 24,
1996, through November 12, 1996. By unanimous
vote, the Committee ratified these transactions.
By unanimous vote, the Committee authorized the
renewal for an additional one-year period of the
System's reciprocal currency ("swap") arrangements
with foreign central banks and the Bank for International Settlements. The amounts and maturity dates
of the arrangements approved for renewal are shown
in the table below.
The Committee then turned to a discussion of the
economic and financial outlook and the implementation of monetary policy over 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.

102

Federal Reserve Bulletin • February 1997

Foreign bank

Austrian National Bank
Bank of England
Bank of Japan
Bank of Norway
Bank of Sweden
Swiss National Bank
Bank for International
Settlements:
Swiss francs
Other authorized
European currencies . . .
Bank of Mexico
Bank of Canada
National Bank of Belgium
National Bank of Denmark . . .
Bank of France
German Federal Bank
Bank of Italy
Netherlands Bank

Amount of
arrangement
(millions of
dollars
equivalent)
250
3,000
5,000
250
300
4,000

Term
(months)

Maturity
date

12

12/04/96
12/04/96
12/04/96
12/04/96
12/04/96
12/04/96

600

12/04/96

1,250
3,000
2,000
1,000
250
2,000
6,000
3,000
500

12/04/96
12/13/96
12/15/96
12/18/96
12/28/96
12/28/96
12/28/96
12/28/96
12/28/96

The information reviewed at this meeting suggested that the growth of economic activity slowed
substantially in the third quarter, and the limited
information available for the period since then indicated continued moderate expansion. A marked softening in the growth of consumer expenditures
accounted for much of the slowing in the third quarter, but slight weakening in housing demand, net
exports, and federal purchases of goods and services
also exerted retarding effects. On the other hand, a
sizable increase in inventory investment, greater
strength in business demand for durable equipment,
and an upturn in spending on nonresidential construction helped foster moderate further economic growth
in the third quarter. Employment posted sizable
increases over the third quarter and rose substantially
further in October, but on balance the gains were
somewhat below those recorded earlier in the year.
Industrial production had weakened somewhat
recently. Consumer price inflation had picked up this
year because of larger increases in food and energy
prices. Increases in labor compensation, though moderating in the third quarter, also had been somewhat
larger this year.
Private nonfarm payroll employment increased
considerably in October after a small rise in September; private payroll growth had moderated on balance
since midyear but nevertheless had remained substantial. In October, job gains were large in service
industries; construction employment registered
another moderate gain; and manufacturing payrolls
edged up after a sizable September loss. The civilian
unemployment rate in October was unchanged at
5.2 percent.
Industrial production appeared to have declined
appreciably in October after having grown briskly on



balance over earlier months of the year. Much of the
slackening in October resulted from work stoppages
in the motor vehicles industry, but the output of other
industries also apparently decreased slightly on balance. The drop in production was accompanied by a
slight decline in capacity utilization in manufacturing.
Total retail sales rose appreciably in September
after having changed little on net over July and
August; for the third quarter as a whole, total retail
sales edged higher after having expanded briskly in
the first half of the year. September sales totals were
boosted by strong spending at automotive dealers,
food stores, and nondurable goods outlets. However,
expenditures for furniture, appliances, and other nonauto durable goods fell, and apparel sales weakened a
little further. Housing starts declined in September
from the unusually high level recorded in August,
and permits moved lower for a second straight month.
Home sales were mixed, with sales of new homes
well sustained in September while those of existing
homes continued on a downtrend.
Growth of business fixed investment surged in the
third quarter. Outlays for durable equipment picked
up sharply, and new orders for business equipment
remained on an upward trend. Sales of computers and
communications equipment increased rapidly, but
demand for other capital goods was up only slightly
during the quarter. In the transportation sector, expenditures on motor vehicles and aircraft strengthened
while sales of heavy trucks continued to drift lower.
Spending on nonresidential structures more than
reversed a second-quarter decline; however, incoming data on contracts pointed to a continuation of the
pattern of somewhat slower growth recorded thus far
in 1996.
The pace of inventory investment picked up markedly after midyear, but inventory-sales ratios nonetheless remained relatively low. In manufacturing,
inventories rose moderately in the third quarter, more
than offsetting a small rundown in stocks in the
previous quarter; stock-shipments ratios for most
industries remained near the low end of their recent
ranges. In the wholesale sector, inventories declined
sharply in September after having edged down in the
previous two months, and the aggregate inventorysales ratio for the sector fell to the low end of its
range over recent years. At the retail level, substantial
inventory accumulation occurred over the JulyAugust period (latest data). Although stock-sales
ratios rose slightly, inventories remained relatively
well aligned with sales.
The nominal deficit on U.S. trade in goods and
services narrowed somewhat in August from a high
rate in July; however, for the two months combined,

Minutes of the Federal Open Market Committee

the deficit was considerably wider than its average
rate for the second quarter. Exports declined appreciably over the July-August period, with most of the
decrease occurring in nonmonetary gold and aircraft.
Imports rose only marginally on balance over the two
months. The limited available information suggested
that, on average, economic activity in the major foreign industrial countries expanded moderately in the
third quarter.
Consumer price inflation had picked up on balance
this year as a result of sizable increases in food and
energy prices. Over August and September, however,
increases in food prices were offset by a net decline
in energy prices, and overall consumer prices rose
more moderately. For the twelve months ended in
September, the advance in consumer prices of items
other than food and energy was a little smaller than it
had been over the previous twelve months. At the
producer level, price inflation also was moderate over
August and September despite appreciable increases
in the prices of food and energy items; producer
prices of items other than food and energy rose
considerably less over the twelve months ended in
September than they had over the previous twelve
months. Growth in the employment cost index for
private industry workers slowed considerably in the
third quarter after having trended up over the first two
quarters of the year; however, this measure of labor
compensation was up slightly over the twelve months
ended in September compared with the previous
twelve months. Average hourly earnings of production and nonsupervisory workers were unchanged in
October, but the twelve-month rise in this index
through October was a bit larger than the increase
over the previous twelve months.
At its meeting on September 24, 1996, the Committee adopted a directive that called for maintaining
the existing degree of pressure on reserve positions
but that included a bias toward the possible firming of
reserve conditions 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, somewhat greater reserve restraint
would be acceptable and slightly lesser reserve
restraint might be acceptable during the intermeeting
period. The reserve conditions associated with this
directive were expected to be consistent with moderate growth of M2 and M3 over coming months.
With incoming information continuing to suggest
moderate economic growth and subdued price inflation, open market operations during the intermeeting
period were directed toward maintaining the existing



103

degree of pressure on reserve positions, and the federal funds rate generally remained close to the level
expected with an unchanged policy stance. Market
participants had anticipated some tightening of monetary policy at the September 24 meeting, and the
announcement of an unchanged policy led to an
immediate decline in interest rates, with the larger
decreases occurring at the shorter end of the yield
curve. Interest rates, especially those at intermediate
and longer maturities, dropped further over the
remainder of the period in response to information
indicating that price and labor cost pressures were
lower than market participants had expected. Equity
markets responded to the declines in interest rates as
well as to favorable earnings reports, and most major
indexes reached record highs.
In foreign exchange markets, the trade-weighted
value of the dollar in terms of the other G-10 currencies depreciated slightly on balance over the intermeeting period. Interest rates in the foreign industrial
countries fell somewhat less on average than did U.S.
interest rates. The dollar changed little against the
German mark and most other major continental European currencies, but it rose against the yen as prospects for a significant supplemental budget package
in Japan waned in the aftermath of the recent elections in that country. The dollar declined against the
pound sterling in response to the release of favorable
data on the U.K. economy as well as an unexpected
increase in the Bank of England's minimum lending
rate.
M2 grew at a slower pace in September and October than it had over earlier months of the year; the
weaker expansion resulted from a continuing rapid
runoff in its liquid deposit components. Nonetheless,
M2 was estimated to have grown for the year through
October at a rate in the upper half of the Committee's
annual range. By contrast, M3 expanded at a substantially faster rate in September and October than it had
earlier in the year, reflecting a surge in its large time
deposit and other managed liability components to
meet business demand for bank loans. For the year
through October, M3 was estimated to have grown at
a rate around the top of its annual range. Total
domestic nonfinancial debt had expanded moderately
on balance over recent months and had remained in
the middle portion of its range.
The staff forecast prepared for this meeting suggested that the expansion would continue at a rate
close to, or perhaps a little above, the economy's
estimated growth potential. Consumer spending was
projected to rebound in the current quarter and subsequently to expand at a moderate pace in line with the
projected increase in disposable income; the favor-

104

Federal Reserve Bulletin • February 1997

able effect on household wealth of the rise that had
occurred in stock prices and the ample availability of
credit for most borrowers were expected to balance
continuing consumer concerns about the adequacy of
their savings and the restraining effect of high household debt burdens. Homebuilding was forecast to
decline slightly further in response to the previous
backup in residential mortgage rates but to stabilize
at a relatively high level in the context of continued
income growth and a generally favorable cash flow
affordability of home ownership. Business spending
on equipment and structures was projected to grow
less rapidly in light of the anticipated moderate
growth of sales and profits. On balance, the external
sector was expected to exert a small restraining influence on economic activity over the projection period.
A slight degree of fiscal restraint was anticipated over
the forecast horizon. Continued pressure on
resources, especially in labor markets, pointed to a
likely underlying tendency toward higher inflation
over the projection period; however, it was expected
that improved supply conditions in food and energy
markets, as well as planned technical changes, would
damp increases in the consumer price index relative
to the elevated 1996 rate.
In the Committee's discussion, members commented that most recent developments bearing on the
outlook for economic growth and inflation had been
favorable. The information on economic activity
since the September meeting had confirmed earlier
indications of appreciable slowing in the expansion
to a sustainable pace close to the economy's potential. The outlook remained subject, as usual, to considerable uncertainty, but many of the members
observed that underlying trends in key sectors of the
economy along with generally supportive financial
conditions seemed consistent with further moderate
economic expansion. In this regard, several focused
on what they saw as the promising prospects for a
rebound in the growth of consumer expenditures
following weak expansion in the third quarter; the
pickup would help sustain moderate economic
growth over the nearer term despite some anticipated
retrenchment in inventory accumulation. With respect
to the outlook for inflation, members emphasized that
despite widespread indications of tight labor markets,
the increase in wages had been muted and somewhat
less than anticipated, and there was no broad evidence of rising price inflation. Indeed, many major
measures of inflation had exhibited a slight downtrend since 1993. Looking ahead, views differed to
some extent regarding the most likely course for
inflation. Several members indicated that, while
recent developments were encouraging, they contin


ued to see the risks as tilted toward some rise, even
assuming that the expansion settled into a pattern of
growth near the economy's potential as they anticipated and resource utilization remained near current
levels; other members felt that the risks surrounding
the forecasts for both economic growth and price
inflation had become more evenly balanced, but more
evidence was needed before afirmjudgment could be
reached.
In their review of developments in key sectors of
the economy, members said that they anticipated a
pickup in consumer spending from its much reduced
rate of growth in the third quarter. While the factors
relating to the prospects for consumer expenditures
did not all point toward greater strength, members
tended to focus on those favoring an upturn. These
included persisting growth in employment and
incomes and clearly upbeat consumer sentiment as
evidenced by recent surveys and anecdotal reports.
Financial factors also seemed likely on balance to
accommodate continuing growth in consumer spending, in particular the marked increases that had
occurred in the value of stock holdings and a stillample availability of credit to most households. Supporting evidence included anecdotal reports from
retailers in a number of areas who were experiencing
sizable gains in sales and seemed optimistic about the
outlook for the upcoming holiday season. Among the
developments that would tend to limit growth in
consumer spending, members emphasized that the
level of consumer indebtedness had strained the
liquidity of many households. The growth of consumer credit was now exhibiting a moderating trend,
possibly pointing to restrained spending by many
households because of already heavy debt service
burdens and generally tightening credit standards for
consumer loans. Other negative factors cited in the
outlook for consumer expenditures were the possibility of a correction in the stock market and the probable satisfaction of much of the earlier pent-up
demand for consumer durables. In balancing these
conflicting influences, the members generally concluded that a pickup in the growth of consumer
spending to a moderate pace was a likely prospect for
this critical sector of the economy.
Business fixed investment was expected to provide
further but diminished impetus to the expansion. This
view took account of the continued availability of
debt and equity financing on favorable terms but also
of expectations of a more moderate growth trend in
sales and the substantial buildup that had already
occurred in stocks of equipment and structures. With
regard to the latter, some overbuilding of commercial
and other structures characterized conditions in a

Minutes of the Federal Open Market Committee

number of areas. Nonetheless, members reported considerable nonresidential building activity in several
parts of the country, and nationwide such activity was
expected to help sustain modest growth in overall
nonresidential construction in coming quarters.
Recent data, supported by anecdotal reports from
several though not all parts of the country, suggested
that residential building activity was slowing somewhat, apparently in lagged response to earlier
increases in mortgage interest rates. However, in the
context of the partial reversal recently of the previous
increases in mortgage rates and sustained growth in
employment and incomes, the housing sector was
viewed as likely to exert only a minor constraint on
overall economic activity over the forecast horizon.
Another somewhat negative factor in the outlook for
economic activity was the prospect of some widening
in the nation's trade deficit over the projection period.
Fiscal policy currently remained on a mildly
restrictive course, but the range of potential developments was especially wide, injecting an element of
considerable uncertainty in the economic outlook.
Legislation affecting the federal budget could have
marked beneficial or adverse effects not only directly
on spending and incomes but also on business and
consumer confidence and financial markets.
The growth of nonfarm business inventories in the
third quarter had exceeded earlier expectations, but
members commented that the sizable rise appeared to
have been largely voluntary and the overall level of
inventories was still historically low in relation to
sales. Against this background, inventory accumulation was likely to continue but at a slower pace in the
current quarter. Beyond the near term, inventory
investment was expected to become a more neutral
factor in the performance of the economy, given the
absence of incentives to build stocks relative to sales
in a period of moderate growth in projected demand.
The members recognized, however, that the prospective behavior of inventories remained subject to substantial uncertainties.
In their discussion of the outlook for inflation,
members again focused on developments in labor
markets and the extent to which rising cost pressures
in those markets might be passed through to higher
prices. The statistical and anecdotal information generally continued to point to tight labor markets and to
a somewhat faster rise in labor compensation costs
this year. Even so, the increases in such costs were
still falling short of those that would have been
anticipated on the basis of historical experience under
similar labor market conditions. Moreover, the
advance in the overall employment cost index in the
third quarter, while perhaps understated to some



105

extent, was appreciably below expectations. At the
same time, business firms generally were not raising
their prices sufficiently to compensate for faster
increases in their labor costs, to the extent that the
latter were occurring, evidently because of the persistence of intense competition in most markets. Indeed,
with the notable exception of the overall consumer
price index, the rate of inflation as measured by
various broad price indexes had tended to ease marginally or at worst to stabilize over the past two
years. Prices of farm commodities and industrial
materials had declined considerably recently.
Despite the recent encouraging reports on labor
compensation and prices, the members agreed that
the risks of rising inflation could not be dismissed,
and several continued to view slightly higher inflation as a likely if not inevitable prospect. Much
would depend, of course, on the strength of the
economic expansion and the associated degree of
pressure on resources, notably in labor markets which
appeared to have comparatively little slack in relation
to other producer resources. It was suggested in this
regard that restrained increases in labor compensation in comparison with historical experience probably were a transitory phenomenon, though one could
not predict when a more normal relationship would
re-emerge. A related concern was whether the tightness in labor markets would ease sufficiently and
quickly enough to prevent inflation pressures from
escalating significantly. Some members mentioned a
number of favorable factors in the outlook for inflation that tended to attenuate such concerns, such as
reduced pressures on food prices as a result of betterthan-expected harvests and improved supply conditions in markets for energy. Relatively restrained
monetary growth in recent months also was cited as a
development consistent with subdued inflationary
pressures. Moreover, the view was advanced that
recent developments in bond markets could be read
as suggesting some decrease in inflationary expectations. On balance, while the members expressed varying degrees of concern that tight labor markets and
attendant increases in wages might at some point lead
to rising price inflation, they agreed that there was
little or no evidence of such a development at this
point and the outlook was far from certain.
In the Committee's discussion of policy for the
intermeeting period ahead, all the members indicated
that they could support an unchanged policy stance
and the retention of a bias toward restraint in the
directive. The slowing of the expansion to a sustainable pace near the economy's growth potential and
the recent surprisingly favorable inflationary developments suggested lower risks of strengthening price

106

Federal Reserve Bulletin • February 1997

pressures and provided the Committee with a desirable opportunity to pause and observe further developments bearing on the course of economic activity
and inflation. Indeed, to the extent that inflation
expectations had declined recently, short-term interest rates, which had changed little in nominal terms,
had edged higher in real terms, implying slightly
greater monetary restraint and reducing the odds that
inflation would pick up.
With regard to possible adjustments to policy during the intermeeting period, all the members indicated that they could support a proposal to retain the
current bias toward restraint. Several viewed such a
bias as desirable because they continued to believe
that the risks remained tilted, at least to some extent,
toward rising inflation over time. In the circumstances, an asymmetric directive would best reflect
their views even if, as seemed likely, intermeeting
developments did not prompt a policy tightening
adjustment. Other members commented that a shift to
a symmetric directive might be viewed as more consistent with the apparently diminished inflationary
pressures. They agreed, however, that such a shift
would be premature in the currently uncertain environment and might signal, inaccurately, that the Federal Reserve was less concerned about the possibility
of a a modest upward trajectory in price inflation.
At the conclusion of the Committee's discussion,
all the members indicated that they supported a directive that called for maintaining the existing degree of
pressure on reserve positions and retaining a bias
toward the possible firming of reserve conditions
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 somewhat greater reserve restraint would be
acceptable and slightly lesser reserve restraint might
be acceptable during the intermeeting period. The
reserve conditions contemplated at this meeting were
expected to be consistent with moderate growth of
M2 and relatively strong expansion in M3 over coming months.
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 that
growth in economic activity slowed substantially in the
third quarter, and the limited available information indicates continued moderate expansion more recently. Private




nonfarm payroll employment increased appreciably on balance over September and October. The civilian unemployment rate remained at 5.2 percent in October. Industrial
production, which continued to rise in the third quarter,
appears to have declined in October owing in important
measure to work stoppages in the motor vehicles industry.
Total retail sales turned up in September after slumping
earlier in the summer. Housing starts fell in September
from the exceptionally high level registered in August.
Outlays for business equipment were strong in the third
quarter and new orders continued to trend upward; business spending on nonresidential structures posted a moderate advance. Inventory investment was substantial in the
third quarter, but inventory-sales ratios remained relatively
low. The nominal deficit on U.S. trade in goods and services widened considerably in July-August from its
average rate in the second quarter. Increases in labor compensation, though moderating in the third quarter, have
trended up this year; consumer price inflation also has
picked up this year, owing to larger increases in food and
energy prices.
Market interest rates have moved lower since the Committee meeting on September 24, 1996, with the largest
declines occurring in intermediate- and long-term maturities. In foreign exchange markets, the trade-weighted value
of the dollar in terms of the other G-10 currencies has
depreciated slightly over the intermeeting period.
Growth of M2 in September and October remained
below its pace in the first half of the year, while expansion
of M3 was substantially higher over those two months. For
the year through October, M2 is estimated to have grown at
a rate in the upper half of the Committee's annual range,
and M3 at a rate around the top of its range. Expansion in
total domestic nonfinancial debt has been moderate on
balance over recent months and has remained in the middle
portion of its 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
reaffirmed the ranges it had established in January for
growth of M2 and M3 of 1 to 5 percent and 2 to 6 percent
respectively, measured from the fourth quarter of 1995 to
the fourth quarter of 1996. The monitoring range for
growth of total domestic nonfinancial debt was maintained
at 3 to 7 percent for the year. For 1997 the Committee
agreed on a tentative basis to set the same ranges as in
1996 for growth of the monetary aggregages and debt,
measured from the fourth quarter of 1996 to the fourth
quarter of 1997. The behavior of the monetary aggregates
will continue to be evaluated in the light of progress
toward price level stability, movements in their velocities,
and developments in the economy and financial markets.
In the implementation of policy for the immediate future,
the Committee seeks to maintain the existing degree of
pressure on reserve positions. In the context of the Committee's long-run objectives for price stability and sustainable economic growth, and giving careful consideration to
economic, financial, and monetary developments, somewhat greater reserve restraint would or slightly lesser
reserve restraint might be acceptable in the intermeeting
period. The contemplated reserve conditions are expected
to be consistent with moderate growth in M2 and relatively
strong expansion in M3 over coming months.

Minutes of the Federal Open Market Committee

Votes for this action: Messrs.
Greenspan,
McDonough, Boehne, Jordan, Kelley, Lindsey, McTeer,
Meyer, Mses. Phillips, Rivlin, Mr. Stern, and Ms. Yellen.
Votes against this action: None.




107

It was agreed that the next meeting of the Committee would be held on Tuesday, December 17, 1996.
The meeting adjourned at 12:25 p.m.
Donald L. Kohn
Secretary

109

Legal Developments
FINAL RULE—AMENDMENT

TO REGULATION

D

The Board of Governors is amending 12 C.F.R. Part 204,
its Regulation D (Reserve Requirements of Depository
Institutions), issued pursuant to section 19 of the Federal
Reserve Act in order to simplify and update it and reduce
regulatory burden. The amendments to modernize Regulation D are in accordance with the Board's policy of regular
review of its regulations and the Board's review of its
regulations under section 303 of the Riegle Community
Development and Regulatory Improvement Act of 1994.
Effective April 1, 1997, 12 C.F.R. Part 204 is amended
as follows:

Part 204—Reserve Requirements of Depository
Institutions (Regulation D)
1. The authority citation for Part 204 continues to read as
follows:

The revisions are as follows:

Section 204.2—Definitions
(f)(1) Nonpersonal

time deposit * * *

(iii) A transferable time deposit. A time deposit is
transferable unless it contains a specific statement on
the certificate, instrument, passbook, statement or
other form representing the account that it is not
transferable. A time deposit that contains a specific
statement that it is not transferable is not regarded as
transferable even if the following transactions can be
effected: a pledge as collateral for a loan, a transaction
that occurs due to circumstances arising from death,
incompetency, marriage, divorce, attachment, or otherwise by operation of law or a transfer on the books
or records of the institution; and

Authority: 12 U.S.C. 248(a), 248(c), 371a, 461, 601, 611,
and 3105.
3. Section 204.3 is amended as follows:
2. Section 204.2 is amended as follows:
a. In paragraph (c)(l)(i) introductory text, the introductory
text of footnote 1 is amended by removing "before maturity" and adding in its place "during the period when an
early withdrawal penalty would otherwise be required under this part", removing "the" after "imposing" and adding in its place "an", removing "penalties" and adding in
its place "penalty", and footnote 2 is removed.
b. In paragraphs (c)(l)(iv)(C), (c)(l)(iv)(E), and (d)(2),
footnotes 3 through 5 are redesignated as footnotes 2
through 4, respectively, and footnote 6 is removed.
c. Paragraph (f)(l)(iii) is revised.
d. Paragraph (f)(l)(iv) is removed and paragraph (f)(l)(v)
is redesignated as paragraph (f)(l)(iv).
e. In newly redesignated paragraphs (f)(l)(iv)(C) and
(f)(l)(iv)(E), footnotes 7 and 8 are redesignated as footnotes 5 and 6, respectively.
f. Paragraph (f)(3) is removed and footnote 9 is removed.
g. In paragraph (h)(l)(ii)(A), footnote 10 is redesignated as
footnote 7 and is amended by removing "(1) that were
acquired before October 7, 1979, or (2)".
h. In paragraph (h)(2)(ii), footnote 11 is redesignated as
footnote 8 and is amended by revising "footnote 10" to
read "footnote 7".
i. In paragraph (t), footnote 12 is redesignated as footnote 9, and footnote reference 2 is redesignated as footnote reference 9.




a. Paragraph (a)(3)(i) is removed and the paragraph designation (a)(3)(ii) is removed.
b. Paragraph (f)(1) is revised.
c. In paragraphs (h)(1) and (h)(2), the words "required
clearing balance penalty-free band" are revised to read
"required charge-free band".
d. Paragraph (i)(l)(ii) is amended in the last sentence by
removing "in its operating circular" and adding in its place
"in its discretion."
e. Paragraph (i)(4)(ii) is amended by removing "penalties"
in the second sentence and "penalty" in the third sentence
and adding in their place "charges" and "charge," respectively.
f. Paragraph (i)(5)(iv) is removed.
The revisions are as follows:

Section 204.3—Computation and maintenance
(f) Deductions allowed in computing reserves. (1) In determining the reserve balance required under this part, the
amount of cash items in process of collection and balances subject to immediate withdrawal due from other
depository institutions located in the United States (including such amounts due from United States branches
and agencies of foreign banks and Edge and agreement

110

Federal Reserve Bulletin • February 1997

corporations) may be deducted from the amount of gross
transaction accounts. The amount that may be deducted
may not exceed the amount of gross transaction accounts.

7. Section 204.9 is amended by removing paragraph (b), by
redesignating paragraph (a)(1) and (a)(2) as paragraphs (a)
and (b), respectively.

4. Section 204.4 is revised to read as follows:

ORDERS ISSUED UNDER BANK HOLDING COMPANY ACT

Section 204.4—Transitional adjustments in mergers

Orders Issued Under Section 3 of the Bank Holding
Company Act

In cases of mergers and consolidations of depository institutions, the amount of reserves that shall be maintained by
the surviving institution shall be reduced by an amount
determined by multiplying the amount by which the required reserves during the computation period immediately
preceding the date of the merger (computed as if the
depository institutions had merged) exceeds the sum of the
actual required reserves of each depository institution during the same computation period, times the appropriate
percentage as specified in the following schedule:
Maintenance periods
occurring during
quarters following
merger or
consolidation
1
2
3
4
5

6
7
8 and succeeding

Percentage applied
to difference to
compute amount
to be subracted

87.5
75.0
62.5
50.0
37.5
25.0
12.5
0

5. Section 204.7 is amended in paragraph (a)(1) by removing "after application of the 2 percent carryover provided
in section 204.3(h)" and adding in its place "after application of the carryover provided in section 204.3(h)."
6. Section 204.8 is amended as follows:
a. In paragraph (a)(2)(i)(B)(5), footnotes 13 and 14 are
redesignated as footnotes 10 and 11, respectively.
b. In paragraph (a)(3)(v), footnotes 15 and 16 are redesignated as footnotes 12 and 13, respectively, and revised to
read as follows:

Section 204.8—International banking facilities
(a) Definitions. * * *

(3) * * *
^ ***12***13***

12. See footnote 10.
13. See footnote 11.




Community First Bankshares, Inc.
Fargo, North Dakota
Order Approving the Acquisition of a Bank Holding
Company
Community First Bankshares, Inc., Fargo, North Dakota
("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 3 of the
BHC Act (12 U.S.C. § 1842) to merge with Mountain
Parks Financial Corp. ("MPF"), and indirectly acquire
MPF's wholly owned subsidiary bank, Mountain Parks
Bank ("MP Bank"), both of Denver, Colorado.
Notice of this proposal, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 46,650 (1996)). 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 of the BHC Act.
Applicant, with total consolidated assets of $2.3 billion,
operates subsidiary banks in seven states.1 Applicant is the
fourteenth largest banking or thrift organization ("depository institution") in Colorado, controlling $401.1 million
in deposits, representing 1.2 percent of total deposits in
depository institutions in the state.2 MPF is the sixteenth
largest depository institution in Colorado, controlling
$361.7 million in deposits, representing 1.1 percent of total
deposits in depository institutions in Colorado. On consummation of this proposal, and taking into account proposed
divestitures, Applicant would become the eighth largest
depository institution in the state, controlling $644.2 million in deposits, representing 2 percent of total deposits in
depository institutions in Colorado.
Section 3(d) of the BHC Act, as amended by section 101
of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, allows the Board to approve an application by a bank holding company to acquire control of a
bank located in a state other than the home state of such
bank holding company, if certain conditions are met.3 For
purposes of the BHC Act, the Applicant's home state is
1. Asset data are as of June 30, 1996.
2. State deposit data are as of June 30, 1995, but are adjusted to take
into account mergers and acquisitions through October 31, 1996.
3. Pub. L. No. 103-328, 108 Stat. 2338 (1994). A bank holding
company's home state is the state in which the operations of the bank
holding company's banking subsidiaries were principally conducted

Legal Developments

North Dakota, and Applicant would acquire a bank in
Colorado. The conditions for an interstate acquisition under section 3(d) are met in this case.4 In view of all the
facts of record, the Board is permitted to approve this
proposal under section 3(d) of the BHC Act.
The BHC Act prohibits the Board from approving an
application under section 3 of the BHC Act if the proposal
would result in a monopoly, or if the proposal would
substantially lessen competition in any relevant market,
unless such anticompetitive effects are clearly outweighed
in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.5
Applicant and MPF compete in the Grand County banking market, the Summit County banking market, and the
Denver-Boulder banking market, all in Colorado.6 On consummation of this proposal, concentration would not significantly increase in the Denver-Boulder banking market.7
The Herfindahl-Hirschman Index ("HHI"), for the
Denver-Boulder banking market would increase by 1 point
to a level of 1057.8

on July 1, 1966, or the date on which the company became a bank
holding company, whichever is later.
4. See 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and
(B). Applicant is adequately capitalized and adequately managed. On
consummation of this proposal, Applicant and its affiliates would not
control more than 10 percent of the total amount of deposits of insured
depository institutions in the United States or more than the state limit
of 25 percent of the total amount of deposits in all federally insured
financial institutions in Colorado. There is no minimum age requirement for subsidiary banks acquired as a result of the purchase of a
Colorado bank holding company. Colo. Rev. Stats. § 11-6.4-103 (2),
(4) (Supp. 1996).
5. 12 U.S.C. § 1842(c).
6. The Grand County banking market is approximated by Grand
County, Colorado, and the Summit County banking market is approximated by Summit County, Colorado. The Denver-Boulder banking
market is approximated by the Denver RMA and the remaining
portions of Adams and Arapahoe Counties, Boulder County, and the
towns of Erie, Frederick, and Keensburg in Weld County.
7. Market data are as of June 30, 1995. Market deposit 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., 11 Federal
Reserve Bulletin 52 (1991).
8. 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 and a market in which the post-merger HHI is over 1800
is considered highly concentrated. The Justice Department has informed the Board that a bank merger or acquisition generally will not
be challenged (in the absence of other factors indicating anticompetitive effects) unless the 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 threshold for an
increase in the HHI when screening bank mergers and acquisitions for
anticompetitive effects implicitly recognizes the competitive effects of
limited-purpose lenders and other non-depository financial entities.




111

In order to mitigate the potential adverse competitive
effects of the proposal in the Grand County and Summit
County banking markets,9 Applicant has committed to
make divestitures in each of these banking markets.10 In
the Grand County banking market, Applicant proposes to
divest the Grandby, Colorado, branch of MP Bank to an
out-of-market acquirer. In the Summit County banking
market, Applicant proposes to divest its controlling interest
in Vail Banks, Inc., Vail, Colorado ("Vail Banks"), to Vail
Banks or to an out-of-market acquirer. After the divestiture
in the Grand County banking market, four competitors
would remain in the market, including a new competitor
controlling 24.8 percent of market deposits. The HHI
would increase by no more than 53 points to a level of
3142. After the divestiture in the Summit County banking
market, market concentration, as measured by the HHI,
would remain unchanged.11
In accordance with the BHC Act, the Board sought
comments from the Department of Justice on the competitive effects of the proposal in the relevant banking markets.
The Department of Justice has indicated that, subject to
completion of the proposed divestitures, consummation of
the proposal would not likely have any significantly adverse effect on competition in any relevant banking market,
and has not objected to consummation of the proposal. The
Office of the Comptroller of the Currency also has not
objected to the proposal.
Based on all the facts of record, and subject to Applicant's divestiture commitments, the Board concludes that
consummation of this proposal would not have a significantly adverse effect on competition or the concentration of
banking resources in any relevant banking market.
The Board has carefully reviewed the financial and managerial resources and future prospects of Applicant and
MPF in light of all the facts of record, including relevant
supervisory reports of examination. The Board also concludes that the financial and managerial resources and
future prospects of the institutions involved in this proposal, and considerations relating to the convenience and
9. Applicant would become the largest depository institution in both
banking markets, and would control deposits of $50.9 million (representing 69.4 percent of market deposits) in the Grand County banking
market, and $108.2 million of deposits (representing 55.9 percent of
market deposits), in the Summit County banking market. The HHI
would increase by 2261 points to a level of 5350 in the Grand County
banking market and by 1085 points to a level of 5069 in the Summit
County banking market.
10. Applicant has committed to execute a sales agreement to accomplish the divestitures before consummation of the proposal and to
complete the divestitures within 180 days of consummation. Applicant also has committed that, if it is unsuccessful in completing the
divestitures within 180 days of consummation, it will transfer all
interests necessary to effect the divestitures to an independent trustee
that is acceptable to the Board and that will be instructed to sell the
assets promptly. In addition, Applicant has committed to submit
executed trust agreements acceptable to the Board stating the terms of
the divestitures prior to consummation of the proposal.
11. Applicant currently owns 24.6 percent of the voting shares of
Vail Banks. Applicant acknowledged that its ownership of these
shares constituted a controlling interest for purposes of the BHC Act
when it acquired them in 1994.

112

Federal Reserve Bulletin • February 1997

needs of the communities to be served, are consistent with
approval of this application. The other supervisory factors
the Board must consider under section 3 of the BHC Act
also are consistent with approval.
Based on the foregoing and all other facts of record, the
Board has determined that the application should be, and
hereby is, approved. The Board's approval is expressly
conditioned on compliance by Applicant with its divestiture commitments and other commitments made in connection with this proposal. For purposes of this action, 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 MPF shall not be consummated before the fifteenth calendar day following the effective date
of this order, or later than three months following the
effective date of this order, unless such period is extended
for good cause by the Board or by the Federal Reserve
Bank of Minneapolis, acting pursuant to delegated authority.
By order of the Board of Governors, effective December 2, 1996.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Lindsey, Phillips, and Meyer. Absent and not
voting: Governor Yellen.
JENNIFER J. JOHNSON

Deputy Secretary of the Board

Country Bank Shares Corporation
Mount Horeb, Wisconsin
Order Approving the Acquisition of a Bank Holding
Company

Country Bank Shares Corporation, Mount Horeb, Wisconsin ("Country"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has
requested the Board's approval under section 3 of the BHC
Act (12 U.S.C. § 1842) to acquire all the voting shares of
Belleville Bancshares Corporation ("Belleville") and
thereby indirectly acquire Belleville State Bank ("Belleville Bank"), both of Belleville, Wisconsin.
Notice of the application, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 36,884 (1996)). 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.
Country is the 34th largest commercial banking organization in Wisconsin, controlling total deposits of approximately $206.3 million, representing less than 1 percent of
total deposits in commercial banking organizations in the




state.1 Belleville is the 213th largest commercial banking
organization in Wisconsin, controlling deposits of approximately $34.7 million, representing less than 1 percent of
total deposits in commercial banking organizations in the
state. On consummation of the proposal, Country would
become the 30th largest commercial banking organization
in Wisconsin, with approximately $241 million in deposits.
Competitive

Considerations

The BHC Act prohibits the Board from approving an
application under section 3 of the BHC Act if the proposal
would result in a monopoly, or would substantially lessen
competition in any relevant banking market, unless the
Board finds that the anticompetitive effects of the proposal
are clearly outweighed in the public interest by the probable effects of the proposal in meeting the convenience and
needs of the community to be served.
Country and Belleville compete directly in the Madison,
Wisconsin, banking market.2 Country operates the 11th
largest banking or thrift organization ("depository institution") in the Madison banking market, controlling deposits
of approximately $77.1 million, representing approximately 2 percent of total deposits in depository institutions
in the market ("market deposits").3 Belleville operates the
24th largest depository institution in the market, controlling deposits of approximately $34.7 million, representing
less than 1 percent of market deposits. On consummation
of this proposal, Country would become the ninth largest
depository institution in the Madison banking market, controlling deposits of $111.8 million, representing approximately 3 percent of market deposits. The market would
remain moderately concentrated, as measured by the
Herfindahl-Hirschman Index ("HHI"), 4 and numerous

1. State deposit data are as of June 30, 1995.
2. The Madison, Wisconsin, banking market is approximated by
Dane County except for the eastern tier of townships; and Dekorra,
Lowville, Otsego, Fountain, Prairie, Columbus, Hampden, Leeds,
Arlington, Lodi, and West Point townships in Columbia County, all in
Wisconsin.
3. Market data are as of June 30, 1995. 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., 11 Federal
Reserve Bulletin 52 (1991).
4. On consummation of this proposal, the HHI would increase
3 points to 1245. 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. 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 threshold for an increase in the
HHI when screening bank mergers and acquisitions for anticompeti-

Legal Developments

competitors would remain in this 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 on the concentration of banking
resources in the Madison banking market or any other
relevant banking market.
The Board also must consider the financial and managerial resources and future prospects of the companies and
banks involved, the convenience and needs of the community to be served, and certain other supervisory factors.
Supervisory Factors
The Board has carefully considered the financial and managerial resources and future prospects of Country, Belleville, and their respective subsidiaries,5 and other supervisory factors in light of all the facts of record. These facts
include supervisory reports of examination assessing the
financial and managerial resources of the organizations and
confidential information provided by Country.6 Based on

tive effects implicitly recognizes the competitive effects of limitedpurpose lenders and other non-depository financial entities.
5. The Board received comments alleging that two directors of
Country's lead subsidiary bank, State Bank of Mt. Horeb, Mount
Horeb, Wisconsin ("Mt. Horeb Bank"), have potential conflicts of
interest because they extend credit in their farm-related private businesses in Mount Horeb at a higher rate to borrowers who are unable to
obtain loans from Mt. Horeb Bank. The comments also contend that
Mt. Horeb Bank has been unwilling to restructure or consolidate
existing farm loans, has not honored its loan commitments, has treated
its customers poorly and unprofessionally, and has taken too long to
act on loan applications. Country denies the allegations made in the
comments, and, in particular, notes that all the extensions of credit
made by the two directors in their private businesses were to longstanding account holders on the same terms offered to other customers. In its evaluation of the managerial factors in this case, the Board
has considered the comments and recent reports of examination by the
bank's primary federal supervisor, the Federal Deposit Insurance
Corporation ("FDIC"), assessing the managerial resources and operations of Mt. Horeb Bank. Based on all the facts of record, including
confidential supervisory information provided by the FDIC, the Board
concludes that the comments do not warrant denial of the proposal.
6. One commenter contends that adverse managerial considerations
are raised by a preliminary ruling in 1994 in a lawsuit against a
director of Country based on his actions as a director of a manufacturing company. The lawsuit involved an attempt by the directors of the
manufacturing company to acquire control of the company through a
stock repurchase program. The case was settled without a final judgment by the court. In addition, the commenter maintains that this
director and two other principals of Belleville used unethical tactics to
encourage minority shareholders of the bank to sell their shares at
below-market prices in connection with the formation of Belleville as
a bank holding company in 1992. These allegations involve personal
offers made by a group of Belleville Bank shareholders to purchase
shares of other shareholders of the bank. The offers did not involve
bank funds or any corporate action by the bank. The shareholder
group members deny that they used unethical tactics to encourage
minority shareholders to sell their shares, and note that they informally consulted with four other members of the bank's board of
directors and representatives of two brokerage firms to determine the
fairness of the prices offered. The commenter also alleges that this
director continued to exercise influence over Belleville Bank's board
of directors after his resignation from the board in 1990 while he also
served as a director of Country. The Board has considered these
comments in light of relevant reports of examination and other super-




113

these and all the facts of record, the Board concludes that
all supervisory factors that the Board is required to consider under the BHC Act, including the financial and
managerial resources and future prospects of Country and
Belleville weigh in favor of approval of this proposal.7
Convenience and Needs Factor
The Board has long held that consideration of the convenience and needs factor includes a review of the relevant
depository institution's record of performance under the
Community Reinvestment Act (12U.S.C. § 2901 et seq.)
("CRA"). As provided in the CRA, the Board has evaluated this factor in light of examinations by the primary
federal supervisor of the CRA performance records of the
relevant institutions. The Board also has considered comments from the Wisconsin Rural Development Center, Inc.
("Protestant"), which maintain that Country's lead bank,
Mt. Horeb Bank, has not adequately assisted in meeting the
credit needs of small- to medium-sized family farmers,
small businesses, and low-income borrowers in its community. Protestant also contends that the bank's participation
in government-guaranteed programs has been minimal,
and that the bank is improperly reducing its agricultural
lending through more stringent underwriting criteria for
farm loans.
An institution's most recent CRA performance evaluation is a particularly important consideration in the applications process because it represents a detailed on-site evaluation of the institution's overall record of performance
under the CRA by its primary federal supervisor.8 The

visory information assessing the competence, experience, and integrity of Country's director and in light of the court's preliminary
findings and the final disposition of the cases noted. In addition, the
Board has carefully reviewed supervisory information regarding steps
taken by the Country director to ensure compliance with the interlock
prohibitions of the Depository Institution Management Interlocks Act
(12 U.S.C. § 3201) ("DIMIA") and the Board's Regulation L
(12 C.F.R. 212).
This commenter also notes that an attorney who provides legal
services to Country and Belleville, and who also is a minority shareholder of Country, was suspended from the practice of law for six
months by the Wisconsin Supreme Court for failing to account properly with his law firm for fees received from Country. Country states
that the attorney is one of a number of attorneys employed by these
organizations, owns less than 10 percent of the voting shares of
Country, and does not serve as an officer or director of either organization or their subsidiaries.
7. Two commenters state generally that Belleville's management
does not consider the interest of the minority shareholders of Belleville Bank, and a number of commenters contend that these shareholders have not received a fair return on their investment and would
not benefit from the proposal. Based on all the facts of record, the
Board concludes that these matters do not relate to factors specified in
the BHC Act and are therefore beyond the jurisdiction of the Board to
consider in reviewing applications under section 3 of the BHC Act.
See Western Bancshares, Inc. v. Board of Governors, 480 F.2d 749
(10th Cir. 1973).
8. The Board notes that 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

114

Federal Reserve Bulletin • February 1997

Board also takes into account information on an institution's lending activities that assist in meeting the credit
needs of low- and moderate-income neighborhoods, including programs and activities initiated since its most
recent CRA performance examination.
Country's four subsidiary banks received CRA performance ratings of "satisfactory" or "outstanding" in their
most recent evaluations for CRA performance by their
primary federal regulator, the FDIC. Country's lead bank,
Mt. Horeb Bank, received an "outstanding" rating for
CRA performance from the FDIC as of January 1996
("January 1996 Examination").9 Belleville Bank, received
a "satisfactory" rating for CRA performance from the
FDIC as of January 1995.
Mt. Horeb Bank is a small bank, with total assets of
approximately $88 million, and operates a main office and
one drive-in branch.10 It primarily makes residential real
estate loans, farm loans, commercial real estate loans, and
small business loans.11 As of the January 1996 Examination, approximately 23 percent of Mt. Horeb Bank's outstanding loans were for residential real estate purchase and
improvement, 20 percent for agricultural-related purposes,
20 percent for financing real estate construction and development, 18 percent for business purposes, and 10 percent
for consumer loans.12
The January 1996 examination characterized the bank's
loan-to-deposit ratio as strong and calculated the average
loan-to-deposit ratio as 79 percent from December 31,
1993, to September 30, 1995.13 A substantial majority of
Mt. Horeb Bank's loans, when measured either as a percentage of total number of loans or as a percentage of total
dollar amounts of loans, were within its assessment area.
Examiners also found that the bank had an excellent record
of originating loans among borrowers of different income

reports of these examinations will be given great weight in the
applications process. 54 Federal Register 13,742, 13,745 (1989).
9. Protestant asserts that the bank's rating is incorrect because
examiners did not have the information provided by Protestant's
comments to this proposal.
10. A subsidiary bank of a bank holding company is a small bank
for purposes of the new regulations jointly promulgated by the federal
financial supervisory agencies to implement the CRA if it had less
than $250 million in assets as of December 31 of either of the prior
two calendar years, and was an affiliate of a holding company that, as
of December 31 of either of the prior two calendar years, had total
banking and thrift assets of less than $1 billion. See 60 Federal
Register 22,156 (May 4, 1995). See also 12 C.F.R. 345.12(t).
11. For purposes of the new CRA regulation, a small business loan
is a commercial and industrial loan with an original amount of
$1 million or less, or a loan secured by nonfarm, nonresidential
property with an original amount of $1 million or less. See 12 C.F.R.
228.12(u).
12. Mt. Horeb Bank also sells loans on the secondary market. In
1995, the bank originated and sold 66 loans totalling $6.3 million.
Accounting for these loans would increase the residential real estate
lending to more than 50 percent.
13. Mt. Horeb Bank's average loan-to-deposit ratio was 79.1 percent in 1994 and 72.8 percent in 1995. The bank's average loan-todeposit ratio would increase to approximately 85 percent by accounting for its loans sold on the secondary market.




levels, especially low- and moderate-income ("LMI") borrowers, and to small businesses and small farms. The
January 1996 Examination considered the bank's loans to
be reasonably distributed throughout its assessment area.
Examiners reviewed loans made by the bank, including
consumer installment, single payment and real estaterelated loans, and rejected credit applications for compliance with applicable fair lending and other applicable
laws.14 The examiners concluded that loan denials appeared to be reasonable and supported, and they found no
violations of substantive provisions of anti-discrimination
laws and regulations.
As noted in the January 1996 Examination, Mt. Horeb
Bank actively engages in agricultural lending activities,
with agricultural lending constituting approximately
20 percent of the bank's outstanding loans. In addition, the
bank participates in government-sponsored loan programs
designed to assist farmers, including programs offered by
the Wisconsin Housing and Economic Development Authority CROP ("WHEDA/CROP") Fund15 and the Farmers Home Administration ("FmHA").16 In 1995, Mt. Horeb
Bank originated 12 WHEDA/CROP loans totalling
$172,000, and 7 FmHA loans totalling $744,000. The
bank's other lending activities included 5 Small Business
Administration loans totalling more than $266,000, and
financing for three centers that provide affordable housing
and care facilities to LMI elderly and disabled individuals.
The Board has carefully reviewed all the facts of record
in considering the CRA performance record of Bank, including information provided by Protestants, Country's
responses, and relevant reports of examination. Based on

14. The Board has carefully considered the results of the bank's
compliance examination in light of comments by a community organization contending that closing costs and charges on loan transactions
are not adequately disclosed.
15. Protestant criticizes Mt. Horeb Bank's participation in the
WHEDA/CROP Fund, contending that the bank refuses to restructure
program loans and makes poor credit decisions that result in a large
number of forbearances for program loans. Protestant also maintains
that Mt. Horeb Bank violated WHEDA/CROP interest payment rules
by underwriting loans on the basis of 360 days rather than 365 days,
and alleges that bank officials have threatened retaliation against any
borrower who publicizes these practices. Country has denied any
improper actions by bank officials in connection with the WHEDA/
CROP Fund. Under WHEDA/CROP guidelines, a participating bank
may submit a request for forbearance to prevent a default, and a
proposed repayment schedule for WHEDA's approval. In 1995,
Mt. Horeb Bank submitted forbearance requests for ten loans to
WHEDA. Two loans were paid in full before WHEDA considered the
forbearance requests and forbearances were granted for the remaining
eight loans. The Board has provided copies of Protestant's contentions
to WHEDA, and WHEDA staff informally has indicated that it does
not consider the number of loans submitted by the bank to be excessive, and characterized the interest payment rule violation as technical
in nature. The Board also has considered these comments in light of
confidential supervisory information provided by the FDIC, and has
concluded that these comments do not warrant denial of the proposal.
16. Protestant also argues that Mt. Horeb Bank's participation in the
FmHA program is inadequate. FmHA loans represent more than
15 percent of Mt. Horeb Bank's outstanding agricultural loans.

Legal Developments

this review, and for the reasons discussed above, the Board
concludes that convenience and needs considerations are
consistent with approval.17

Voting for this action: Chairman Greenspan and Governors Kelley,
Lindsey, Phillips, Yellen, and Meyer. Absent and not voting:
Vice Chair Rivlin.
JENNIFER J. JOHNSON

Conclusion
Based on the foregoing and all the facts of record, the
Board has determined that the application should be, and
hereby is, approved.18 The Board's approval is expressly
conditioned on Country's compliance with all the commitments made in connection with this application. The commitments and conditions relied on by the Board in reaching
this decision shall be 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 shall not be consummated before the
fifteenth calendar day following the effective date of this
order, or later than three months after the effective date of
this order, unless such period is extended for good cause by
the Board or by the Federal Reserve Bank of Chicago,
acting pursuant to delegated authority.
By order of the Board of Governors, effective December 9, 1996.

17. The Board also has considered comments from a number of area
residents objecting to the loss of a locally owned bank. The Board has
considered these comments in light of all the facts of record, including
the records of Country's subsidiary banks in assisting to meet the
credit needs of their communities.
18. Protestant also has requested a private meeting with the Federal
Reserve Bank of Chicago ("Reserve Bank") to discuss the issues
raised in Protestant's comments, but declined to meet with the Reserve Bank in the presence of Country. Although the Board's Rules of
Procedure permit System staff to arrange for a private meeting between a protestant and the applicant for the purposes of clarifying and
narrowing the issues and providing a forum for resolving differences,
this procedure does not authorize a private meeting with any one party
during the processing of an application. See 12 C.F.R. 262.25(c).
Protestant also has requested that the Board hold public hearings or
meetings to consider public testimony regarding the managerial and
the convenience and needs considerations in the proposal. Section 3(b) of the BHC Act does not require the Board to hold a public
hearing or meeting 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 FDIC nor the Wisconsin
Commissioner of Banking has recommended denial.
Under its rules, the Board may, in its discretion, hold a public
hearing or meeting on an application to clarify factual issues related to
the application and to provide an opportunity for testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The Board has carefully
considered Protestant's request in light of all the facts of record. In the
Board's view, Protestant has had ample opportunity to submit its
views and has, in fact, submitted materials that have been considered
by the Board in acting on the application. Protestant has not demonstrated why its written submissions do not adequately present its
allegations and what, if any, additional matters would be addressed in
a public hearing or meeting. Based on all the facts of record, the
Board has determined that a public hearing or meeting is not necessary to clarify the factual record and is not otherwise warranted in this
case. Accordingly, Protestant's request for public hearings or meetings on the application is denied.




115

Deputy Secretary of the Board

GB Bancorporation
San Diego, California
Order Approving Acquisition of Shares of a Bank
GB Bancorporation, San Diego, California ("GBB"), 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 up
to 24.9 percent of the voting shares of Pacific Commerce
Bank, Chula Vista, California ("Pacific Bank").
Notice of the application, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 52,947 (1996)). The time for filing
comments has expired, and the Board has considered the
application and all comments received in light of the
factors set forth in section 3 of the BHC Act.
GBB, with consolidated assets of approximately
$527 million, is the 37th largest commercial banking organization in California, controlling deposits of approximately $415 million, representing less than 1 percent of
total deposits in commercial banking organizations in the
state.1 Pacific Bank, with assets of approximately $59
million, is the 250th largest commercial banking organization in California, controlling approximately $43 million in
deposits, representing less than 1 percent of total deposits
in commercial banking organizations in the state.
Pacific Bank has objected to the proposal, contending
that it is not for sale and that management will oppose any
attempts by GBB to gain control of Pacific Bank.
The Board notes that the BHC Act does not bar GBB
from acquiring control of Pacific Bank, if it obtains prior
Board approval. As noted above, however, GBB would
acquire less than 25 percent of the voting shares of Pacific
Bank, and GBB does not propose to control Pacific Bank
without the prior approval of the Board. GBB also has
made a number of commitments that are similar to commitments previously relied on by the Board to determine that
an investing bank holding company would not exercise a
controlling influence over another bank holding company
or bank for purposes of the BHC Act.2 GBB has committed
not to exercise or attempt to exercise a controlling influence over the management or policies of Pacific Bank; not
to seek or accept representation on the board of directors of
Pacific Bank; not to challenge a nominee of management
for the board of directors of Pacific Bank; and not to have

1. Asset data are as of June 30, 1996. Deposit data are as of June 30,
1995, and reflect transactions through September 30, 1996.
2. See, e.g., Mansura Bancshares, Inc., 79 Federal Reserve Bulletin
37 (1993) {"Mansura"). The commitments provided by GBB are set
forth in the Appendix.

116

Federal Reserve Bulletin • February 1997

any representative of GBB serve as an officer, agent or
employee of Pacific Bank. GBB also has committed not to
attempt to influence the dividend policies, loan decisions,
personnel decisions, or operations of Pacific Bank; and not
to dispose or threaten to dispose of shares of Pacific Bank
in response to any action or non-action by the bank.
The Board has adequate supervisory authority to monitor
GBB's compliance with its commitments, and retains express authority to initiate a control proceeding against
GBB if facts presented later indicate that GBB or any of its
subsidiaries or affiliates in fact controls Pacific Bank for
purposes of the BHC Act. Based on these commitments
and all other facts of record, it is the Board's judgment
that, for purposes of the BHC Act, GBB would not acquire
control of Pacific Bank on consummation of the proposal.3
The Board has noted that one company need not acquire
control of another company in order substantially to lessen
competition between them, and that the specific facts of
each case will determine whether a minority investment
would have significant anticompetitive effects.4 GBB and
Pacific Bank compete directly in the San Diego, California,
banking market.5 As a combined organization, GBB would
remain the fourth largest commercial banking organization
in the market, controlling deposits of approximately
$443 million, representing 2.6 percent of total deposits in
commercial banks or thrift institutions in the market.6

3. The Board previously has indicated that the acquisition of less
than a controlling interest in a bank or bank holding company is not a
normal acquisition for a bank holding company. See, e.g., North Fork
Bancorporation, Inc., 81 Federal Reserve Bulletin 734 (1995) ("North
Fork")\ State Street Boston Corporation, 67 Federal Reserve Bulletin
862 (1981). Nonetheless, the requirement in section 3(a)(3) of the
BHC Act that the Board's approval be obtained before a bank holding
company acquires more than 5 percent of the voting shares of a bank
suggests that Congress contemplated the acquisition by bank holding
companies of between 5 and 25 percent of the voting shares of a bank
or a bank holding company. See 12U.S.C. § 1842(a)(3); 12 C.F.R.
225.11(c). Nothing in section 3(c) of the BHC Act, moreover, requires
the Board to deny an application solely because a bank holding
company proposes to acquire less than a controlling interest in a bank
or bank holding company. Accordingly, the Board previously has
approved the acquisition by a bank holding company of less than a
controlling interest in a bank or a bank holding company. See, e.g.,
North Fork (acquisition of 19.9 percent of the voting shares of a bank
holding company); Mansura (acquisition of 9.7 percent of the voting
shares of a bank holding company); and SunTrust Banks, Inc.,
76 Federal Reserve Bulletin 542 (1990) ("SunTrust") (acquisition of
up to 24.99 percent of the voting shares of a bank).
4. See, e.g., North Fork; Mansura; SunTrust. For example, the
acquisition of a substantial ownership interest in a competitor or a
potential competitor of the acquiring firm might alter the market
behavior of both firms in such a way as to weaken or eliminate
independent action at each organization and increase the likelihood of
cooperative operations. See Mansura at 38.
5. The San Diego banking market consists of the San Diego,
California, RMA.
6. Market share data are as of June 30, 1995, 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). Thus, the Board has regularly included thrift deposits in




Based on all the facts of record, including the increase in
market concentration as measured by the HerfindahlHirschman Index ("HHI")7 and the number of competitors
that would remain in the market, if GBB were to control
Pacific Bank, the elimination of competition between the
two entities would not substantially lessen competition in
the San Diego banking market or any other relevant banking market.
In light of all the facts of record, the Board concludes
that competitive considerations are consistent with approval. The financial and managerial resources and future
prospects of GBB and its subsidiaries and Pacific Bank
also are consistent with approval, as are considerations
related to the convenience and needs of the communities to
be served and other supervisory factors the Board must
consider under section 3 of the BHC Act.
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 expressly conditioned on
compliance by GBB with all the commitments made in
connection with this application, including the commitments discussed in this order. The commitments and conditions relied on by the Board in reaching this decision shall
be 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 transaction shall not be consummated before the
fifteenth 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 18, 1996.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Lindsey, Phillips, Yellen, and Meyer.
JENNIFER J. JOHNSON

Deputy Secretary of the Board

the calculation of market share on a 50-percent weighted basis. See,
e.g., First Hawaiian, Inc., 77 Federal Reserve Bulletin 52 (1991).
7. The HHI would increase 1 point to 1470. Under the revised
Department of Justice Merger Guidelines, 49 Federal Register 26,823
(June 29, 1984), a market in which the post-merger HHI is between
1000 and 1800 is considered to be moderately concentrated. The
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 recognizes the competitive effect of limitedpurpose lenders and other non-depository financial entities.

Legal Developments

Appendix
GBB commits that it will not, directly or indirectly, without the Board's prior approval:

(1) Take any action that would cause Pacific Bank or any
of its subsidiaries to become a subsidiary of GBB or any of
its subsidiaries;
(2) Acquire or retain shares of Pacific Bank that would
cause the combined interests of GBB and any of its subsidiaries and any of its officers, directors, principal shareholders, and affiliates to equal or exceed 25 percent of the
outstanding voting shares of Pacific Bank or any of its
subsidiaries;
(3) Seek or accept any representation on the board of
directors of Pacific Bank or any of its subsidiaries;
(4) Exercise or attempt to exercise a controlling influence
over the management or policies of Pacific Bank or any of
its subsidiaries;
(5) Have or seek to have any representative serve as an
officer, agent, or employee of Pacific Bank or any of its
subsidiaries;
(6) Propose a director or slate of directors in opposition to
a nominee or slate of nominees proposed by the management or board of directors of Pacific Bank or any of its
subsidiaries;
(7) Solicit or participate in soliciting proxies with respect
to any matter presented to the shareholders of Pacific Bank
or any of its subsidiaries;
(8) Attempt to influence the dividend policies or practices;
the investment, loan, or credit decisions or policies; the
pricing of services; personnel decisions; operating activities (including the location of any offices or branches or
their hours of operation, etc.); or any similar activities or
decisions of Pacific Bank or any of its subsidiaries;
(9) Enter into any other banking or nonbanking transactions with Pacific Bank or any of its subsidiaries, except
that GBB may establish and maintain deposit accounts
with Pacific Bank, provided that the aggregate balance of
all such deposit accounts does not exceed $500,000 and
that the accounts are maintained on substantially the same
terms as those prevailing for comparable accounts of persons unaffiliated with Pacific Bank or any of its subsidiaries; and
(10) Dispose or threaten to dispose of shares of Pacific
Bank or any of its subsidiaries in any manner as a condition of specific action or non-action by Pacific Bank or any
of its subsidiaries.

GB Bancorporation
San Diego, California

117

section 3 of the BHC Act (12 U.S.C. § 1842) to acquire up
to 24.9 percent of the voting shares of Rancho Vista
National Bank, Vista, California ("Rancho Bank").
Notice of the application, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 52,947 (1996)). The time for filing
comments has expired, and the Board has considered the
application and all comments received in light of the
factors set forth in section 3 of the BHC Act.
GBB, with consolidated assets of approximately
$527 million, is the 37th largest commercial banking organization in California, controlling deposits of approximately $415 million, representing less than 1 percent of
total deposits in commercial banking organizations in the
state.1 Rancho Bank, with assets of approximately $93
million, is the 172d largest commercial banking organization in California, controlling approximately $81 million in
deposits, representing less than 1 percent of total deposits
in commercial banking organizations in the state.
Rancho Bank has objected to the proposal, contending
that GBB intends to acquire control of the bank. Rancho
Bank also has asserted that the proposed investment would
cause experienced officers and employees to leave Rancho
Bank and create uncertainty about its long-term prospects,
thereby adversely affecting the bank's ability to compete
for and retain customers.
The Board notes that the BHC Act does not bar GBB
from acquiring control of Rancho Bank, if it obtains prior
Board approval. As noted above, however, GBB would
acquire less than 25 percent of the voting shares of Rancho
Bank, and GBB does not propose to control Rancho Bank
without the prior approval of the Board. GBB also has
made a number of commitments that are similar to commitments previously relied on by the Board to determine that
an investing bank holding company would not exercise a
controlling influence over another bank holding company
or bank for purposes of the BHC Act.2 GBB has committed
not to exercise or attempt to exercise a controlling influence over the management or policies of Rancho Bank; not
to seek or accept representation on the board of directors of
Rancho Bank; not to challenge a nominee of management
for the board of directors of Rancho Bank; and not to have
any representative of GBB serve as an officer, agent or
employee of Rancho Bank. GBB also has committed not to
attempt to influence the dividend policies, loan decisions,
personnel decisions, or operations of Rancho Bank; and
not to dispose or threaten to dispose of shares of Rancho
Bank in response to any action or non-action by the bank.
The Board has adequate supervisory authority to monitor
GBB's compliance with its commitments, and retains express authority to initiate a control proceeding against
GBB if facts presented later indicate that GBB or any of its

Order Approving Acquisition of Shares of a Bank
GB Bancorporation, San Diego, California ("GBB"), a
bank holding company within the meaning of the Bank
Holding Company Act ("BHC Act"), has applied under




1. Asset data are as of June 30, 1996. Deposit data are as of June 30,
1995, and reflect transactions through September 30, 1996.
2. See, e.g., Mansura Bancshares, Inc., 79 Federal Reserve Bulletin
37 (1993) ("Mansura"). The commitments provided by GBB are set
forth in the Appendix.

118

Federal Reserve Bulletin • February 1997

subsidiaries or affiliates in fact controls Rancho Bank for
purposes of the BHC Act.3 The Board notes that the bank's
managerial resources are adequate, and that management
of Rancho Bank has clearly expressed its intention to
remain independent. Based on these commitments and all
other facts of record, it is the Board's judgment that, for
purposes of the BHC Act, GBB would not acquire control
of Rancho Bank on consummation of the proposal.4
The Board has noted that one company need not acquire
control of another company in order substantially to lessen
competition between them, and that the specific facts of
each case will determine whether a minority investment
would have significant anticompetitive effects.5 GBB and
Rancho Bank compete directly in the Oceanside, California, banking market.6 As a combined organization, GBB
would become the fourth largest commercial banking organization in the market, controlling deposits of approxi-

3. Rancho Bank alleged that GBB's continued expression of interest
in acquiring Rancho Bank conflicts with the commitments made by
GBB, and that this alleged conflict raises adverse managerial considerations. GBB responded that its actions were intended only to explore
the feasibility of acquiring Rancho Bank through a transaction that
would be negotiated with the bank's board of directors. The Board
does not believe that such general expressions of interest violate the
commitments or the BHC Act's prohibition against exercising a
controlling influence over the management or policies of a banking
organization. Under the BHC Act and the Board's regulations, GBB
may not actually acquire ownership of, control, or vote shares of
Rancho Bank without the Board's prior approval. The Board also has
considered Rancho Bank's concerns in light of a review of the
managerial resources of GBB by the Federal Reserve Bank of
San Francisco in its most recent examination and management's
record for complying with applicable rules and regulations.
4. The Board previously has indicated that the acquisition of less
than a controlling interest in a bank or bank holding company is not a
normal acquisition for a bank holding company. See, e.g., North Fork
Bancorporation, Inc., 81 Federal Reserve Bulletin 734 (1995) ("North
Fork")\ State Street Boston Corporation, 67 Federal Reserve Bulletin
862 (1981). Nonetheless, the requirement in section 3(a)(3) of the
BHC Act that the Board's approval be obtained before a bank holding
company acquires more than 5 percent of the voting shares of a bank
suggests that Congress contemplated the acquisition by bank holding
companies of between 5 and 25 percent of the voting shares of a bank
or a bank holding company. See 12 U.S.C. § 1842(a)(3); 12 C.F.R.
225.11(c). Nothing in section 3(c) of the BHC Act, moreover, requires
the Board to deny an application solely because a bank holding
company proposes to acquire less than a controlling interest in a bank
or bank holding company. Accordingly, the Board previously has
approved the acquisition by a bank holding company of less than a
controlling interest in a bank or a bank holding company. See, e.g.,
North Fork (acquisition of 19.9 percent of the voting shares of a bank
holding company); Mansura (acquisition of 9.7 percent of the voting
shares of a bank holding company); and SunTrust Banks, Inc.,
76 Federal Reserve Bulletin 542 (1990) ("SunTrust") (acquisition of
up to 24.99 percent of the voting shares of a bank).
5. See, e.g., North Fork; Mansura; SunTrust. For example, the
acquisition of a substantial ownership interest in a competitor or a
potential competitor of the acquiring firm might alter the market
behavior of both firms in such a way as to weaken or eliminate
independent action at each organization and increase the likelihood of
cooperative operations. See Mansura at 38.
6. The Oceanside banking market consists of the Oceanside RMA
and the towns of Bonsall and Fallbrook, all in California.




mately $87 million, representing 6.4 percent of total deposits in commercial banks or thrift institutions in the market.7
Based on all the facts of record, including the increase in
market concentration as measured by the HerfindahlHirschman Index ("HHI")8 and the number of competitors
that would remain in the market, if GBB were to control
Rancho Bank, the elimination of competition between the
two entities would not substantially lessen competition in
the Oceanside banking market or any other relevant banking market.
In light of all the facts of record, the Board concludes
that competitive considerations are consistent with approval. The financial and managerial resources and future
prospects of GBB and its subsidiaries and Rancho Bank
also are consistent with approval, as are considerations
related to the convenience and needs of the communities to
be served and other supervisory factors the Board must
consider under section 3 of the BHC Act.
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 expressly conditioned on
compliance by GBB with all the commitments made in
connection with this application, including the commitments discussed in this order. The commitments and conditions relied on by the Board in reaching this decision shall
be 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 transaction shall not be consummated before the
fifteenth 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 18, 1996.

7. Market share data are as of June 30, 1995, 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). 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., 11 Federal Reserve Bulletin 52 (1991).
8. The HHI would increase 11 points to 1418. Under the revised
Department of Justice Merger Guidelines, 49 Federal Register 26,823
(June 29, 1984), a market in which the post-merger HHI is between
1000 and 1800 is considered to be moderately concentrated. The
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 recognizes the competitive effect of limitedpurpose lenders and other non-depository financial entities.

Legal Developments

Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Lindsey, Phillips, Yellen, and Meyer.

Ida Grove Banc shares, Inc.
Ida Grove, Iowa

JENNIFER J. JOHNSON

American Bancshares, Inc.
Holstein, Iowa

Deputy Secretary of the Board

119

Order Approving the Acquisition of a Bank Holding
Company

Appendix
GBB commits that it will not, directly or indirectly, without the Board's prior approval:

(1) Take any action that would cause Rancho Bank or any
of its subsidiaries to become a subsidiary of GBB or any of
its subsidiaries;
(2) Acquire or retain shares of Rancho Bank that would
cause the combined interests of GBB and any of its subsidiaries and any of its officers, directors, principal shareholders, and affiliates to equal or exceed 25 percent of the
outstanding voting shares of Rancho Bank or any of its
subsidiaries;
(3) Seek or accept any representation on the board of
directors of Rancho Bank or any of its subsidiaries;
(4) Exercise or attempt to exercise a controlling influence
over the management or policies of Rancho Bank or any of
its subsidiaries;
(5) Have or seek to have any representative serve as an
officer, agent, or employee of Rancho Bank or any of its
subsidiaries;
(6) Propose a director or slate of directors in opposition to
a nominee or slate of nominees proposed by the management or board of directors of Rancho Bank or any of its
subsidiaries;
(7) Solicit or participate in soliciting proxies with respect
to any matter presented to the shareholders of Rancho
Bank or any of its subsidiaries;
(8) Attempt to influence the dividend policies or practices;
the investment, loan, or credit decisions or policies; the
pricing of services; personnel decisions; operating activities (including the location of any offices or branches or
their hours of operation, etc.); or any similar activities or
decisions of Rancho Bank or any of its subsidiaries;
(9) Enter into any other banking or nonbanking transactions with Rancho Bank or any of its subsidiaries, except
that GBB may establish and maintain deposit accounts
with Rancho Bank, provided that the aggregate balance of
all such deposit accounts does not exceed $500,000 and
that the accounts are maintained on substantially the same
terms as those prevailing for comparable accounts of persons unaffiliated with Rancho Bank or any of its subsidiaries; and
(10) Dispose or threaten to dispose of shares of Rancho
Bank or any of its subsidiaries in any manner as a condition of specific action or non-action by Rancho Bank or
any of its subsidiaries.




Ida Grove Bancshares, Inc., Ida Grove, and American
Bancshares, Inc., Holstein ("American") (collectively "Ida
Grove"),1 bank holding companies within the meaning of
the Bank Holding Company Act ("BHC Act"), have applied for the Board's approval under section 3 of the BHC
Act (12 U.S.C. § 1842) to acquire all of the voting shares of
Pierson Bancorporation ("Pierson"), and thereby acquire
Farmers Savings Bank ("Farmers"), both of Pierson, and
all in Iowa.
Notice of the application, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 51,114 (1996)). The time for filing
comments has expired, and the Board has considered the
application and all comments received in light of the
factors set forth in section 3 of the BHC Act.
Ida Grove, with total consolidated assets of approximately $197 million, is the 29th largest commercial banking organization in Iowa, controlling deposits of approximately $174.6 million, representing less than 1 percent of
total deposits in commercial banking organizations in the
state.2 Pierson, with total consolidated assets of approximately $15.5 million, is the 364th largest commercial
banking organization in Iowa, controlling deposits of approximately $12.6 million, representing less than 1 percent
of total deposits in commercial banking organizations in
the state. On consummation of this proposal, Ida Grove
would become the 27th largest commercial banking organization in Iowa, controlling deposits of approximately
$187.2 million.
After the acquisition of Pierson, Ida Grove proposes to
effect a series of transactions which would result in its
subsidiary bank, Western Bank and Trust, Moville, Iowa
("Western Bank"), operating branches in Kingsley and
Pierson, Iowa.3 The Board has carefully reviewed comments that assert that the proposal, when viewed in its
entirety, would permit Ida Grove to evade state law branching restrictions. Iowa law generally prohibits the establishment of a de novo branch in a town that has an office of

1. Ida Grove Bancshares, Inc. owns approximately 80.1 percent of
the voting shares of American.
2. Asset and state deposit data are as of June 30, 1996.
3. Ida Grove has applied for the Board's approval to acquire
Pierson, and to merge Pierson into American. American would survive the merger and directly own all the voting shares of Farmers.
After these transactions, Ida Grove would cause Farmers to relocate
its main office to Kingsley and to establish a branch at its former
location in Pierson, both in Iowa. Farmers would then merge into
Western Bank, and Western Bank would operate branches in Kingsley
and Pierson, Iowa.

120

Federal Reserve Bulletin • February 1997

another bank.4 Each transaction proposed by Ida Grove is
separately authorized by state statute, and the overall transaction has been approved by the Iowa Department of
Banking.5 In this light, the Board concludes that the overall
transaction is not prohibited by state law. The Board also
notes that the first and only step in the overall transaction
requiring the Board's approval—the acquisition of Pierson
by Ida Grove—is clearly authorized by state law.6
Western Bank and Farmers compete directly in the Sioux
City, Iowa, banking market ("Sioux City banking market").7 On consummation of the proposal, Western Bank
would become the 15th largest commercial banking or
thrift organization ("depository organization") in the market, controlling deposits of approximately $13.8 million,
representing approximately 1 percent of total deposits in
depository organizations in the market ("market deposits").8 Concentration in the banking market, as measured
by the Herfindahl-Hirschman Index ("HHI"), would remain at a level of 1555, and numerous competitors would
remain in the market after consummation.9 Based on these

4. Section 524.1202 of the Iowa Code provides that a bank with
headquarters in one county may establish a branch in a town in the
same or a contiguous county if that town does not have an office of
another bank in operation. Iowa Code Ann. § 524.1202. Kingsley,
Pierson, and Moville are all located in the same or contiguous Iowa
counties.
5. A bank with headquarters in a contiguous county may relocate its
main office to another town. See Iowa Code Ann. § 524.312. Therefore, Farmers may relocate to Kingsley. Farmers also may operate a
branch office in Pierson, the town from which it relocated, because no
office of another bank is located in Pierson. See Iowa Code Ann.
§ 524.1202(1). Western Bank also may operate branches in Kingsley
and Pierson after its merger with Farmers because the Iowa branching
restrictions prohibiting the establishment of a branch office in a town
with an office of another bank do not apply to branches acquired in a
merger between banks located in the same or contiguous counties. See
Iowa Code Ann. § 524.1202(3).
6. Iowa Code Ann. § 524.1804.
7. The Sioux City banking market is approximated by Woodbury
County, excluding the townships of Lakeport, Sloan, Willow, and
Little Sioux; the townships of Garfield and Elkhorn in Plymouth
County, all in Iowa; and the Sioux City Rand McNally Area located in
South Dakota and Nebraska.
8. Market deposit data are as of June 30, 1995, and include data
from Western Bank, a newly formed bank subsidiary of Ida Grove, as
of November 29, 1996. 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., 11 Federal Reserve Bulletin 52 (1991).
9. 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 threshold for an increase in the HHI when screening bank mergers and




and all the facts of record, the Board has concluded that
consummation of this proposal would not have a significantly adverse effect on competition or the concentration of
banking resources in the Sioux City banking market or any
other relevant banking market.10
Based on all the facts of record, the Board also has
concluded that the financial and managerial resources11
and future prospects of Ida Grove, Pierson, and their respective subsidiaries, and all other supervisory factors that
the Board must consider under section 3 of the BHC Act,
are consistent with approval of this proposal.12
The Board also has considered the convenience and
needs of the communities to be served, including the
records of performance of the institutions involved under
the Community Reinvestment Act (12 U.S.C. § 2901
et seq.) ("CRA"). The Board notes that Farmers—the bank
being acquired in this case—received a "needs to improve" rating at its most recent examination for CRA
performance from its primary federal supervisor, the FDIC,
as of May 1996. Ida Grove has stated that it will implement
CRA policies and programs similar to those of Ida Grove's
acquisitions for anticompetitive effects implicitly recognizes the competitive effect of limited-purpose lenders and other non-depository
financial entities.
10. Two financial institutions ("Protestants") contend that numerous competitors serve the credit needs of Moville and Kingsley, Iowa,
both of which are in the Sioux City banking market, and that an
additional competitor could adversely affect the existing banks in
these "over-banked" towns. As noted above, Western Bank currently
operates in Moville and the proposal would not increase the number of
competitors in that town. The Board has previously concluded that the
BHC Act requires the Board to focus on whether a proposal would
substantially lessen competition or create a monopoly, and that the
de novo entry of a bank would have a positive effect on competition in
any banking market. See Wilson Bank Holding Company, 82 Federal
Reserve Bulletin 568 (1996). The Board concludes that the entry into
Kingsley by Ida Grove would enhance competition for banking services.
11. One protestant contends that a loan from Ida Grove to American
violates section 23A of the Federal Reserve Act (12 U.S.C. § 371c)
("Section 23A"). Section 23A imposes restrictions on loans between a
subsidiary bank and its affiliates, and by its terms would not apply to a
loan between affiliated bank holding companies.
12. Protestants allege that Ida Grove and its subsidiary banks are
and will be undercapitalized. In addition, Protestants contend that
Western Bank's pricing policies (interest rates paid on certificates of
deposits and charged for loans) will adversely affect Western Bank's
financial condition, thereby adversely affecting American's capacity
to retire the debt to be incurred in connection with the acquisition of
Pierson, and that these pricing policies constitute unfair competitive
practices. The Board has carefully reviewed these comments in light
of all facts of record, including the most recent reports of examination
assessing the managerial and financial resources of the relevant companies. The Board has consulted the Federal Deposit Insurance Corporation ("FDIC") on the effect of Western Bank's pricing policies on
the financial condition of the bank and on the FDIC's assessment of
the bank's current management. The Board notes that Ida Grove
would remain well-capitalized after consummation of this proposal
and would retire the proposal's acquisition debt in accordance with
the Board's guidelines. The Board also has reviewed the interest rates
offered under Wester Bank's pricing policies for evidence of predatory
pricing in light of pricing information nationwide and in the local
market where Western Bank competes. Based on all the facts of
record, the Board concludes that all the supervisory factors considered
under the BHC Act are consistent with approval.

Legal Developments

lead bank, United Bank of Iowa, Ida Grove, Iowa ("United
Bank"), after consummation of the proposal.13 United
Bank received an "outstanding" rating for CRA performance at its most recent examination for CRA performance by the FDIC as of March 1996. In addition, Western
Bank plans to advertise extensively in the community
through various media, as well as to implement a comprehensive officer calling program, to promote its credit products and services. Moreover, Western Bank will enter into
a regulatory compliance services agreement with United
Bank whereby experienced staff of United Bank will review and monitor compliance policies and procedures, and
train and consult with Western's staff on regulatory compliance issues, including the CRA. The Board expects that the
actions proposed by Ida Grove will address the deficiencies
in Farmers' record of performance, particularly in the types
and geographic distribution of its loans.
In light of these commitments, and based on all the facts
of record, the Board concludes that considerations relating
to the convenience and needs of the communities to be
served, including the CRA performance records of the
institutions involved, are consistent with approval.14 The
Board will review the effectiveness of these efforts in
future applications by Ida Grove to establish depository
facilities.
Based on all the facts of record, the Board has determined that this application should be, and hereby is, approved. The Board's approval is specifically conditioned
on compliance by Ida Grove with all the commitments
made in connection with the application and with the
conditions referenced in this order. 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.
The transaction shall not be consummated before the
fifteenth calendar day following the effective date of this
order, or later than three months after the effective date of
this order, unless such period is extended for good cause by
the Board or by the Federal Reserve Bank of Chicago,
acting pursuant to delegated authority.

13. As noted above, Farmers would be merged into Western Bank.
Although Western Bank has not been examined for CRA performance
by the FDIC, Ida Grove is initiating CRA policies and programs at
Western Bank that are similar to those of United Bank.
14. One depository institution argues that, because it has a satisfactory record of CRA performance in Kingsley, the convenience and
needs of the community are already being served. The CRA was not
intended to limit either the number of service providers or competition
in providing services to a community. Rather, the CRA recognizes the
responsibility of each depository institution in a community to help
meet the credit needs of the community. CRA performance ratings
evaluate the efforts of a particular institution in helping meet the credit
needs of the community, and do not reflect a judgment regarding
whether the community would benefit from additional services that
may be provided by other depository institutions. The Board, moreover, concludes that the steps proposed by Ida Grove to strengthen
Farmers' CRA performance will have a positive effect on serving the
overall credit needs of the community.




121

By order of the Board of Governors, effective December 20, 1996.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Lindsey, Phillips, and Meyer. Absent and not
voting: Governor Yellen.
JENNIFER J. JOHNSON

Deputy Secretary of the Board

JDOB Inc.
Sandstone, Minnesota
Order Approving Acquisition of a Bank
JDOB Inc., Sandstone, Minnesota ("JDOB"), a bank holding company within the meaning of the Bank Holding
Company Act ("BHC Act"), has applied for the Board's
approval under section 3 of the BHC Act (12 U.S.C.
§ 1842) to acquire Centennial National Bank ("Bank"),
Walker, Minnesota, a de novo nationally chartered bank.
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 53,746 (1996)). The time for filing
comments has expired, and the Board has considered the
application and all comments received in light of the
factors set forth in section 3 of the BHC Act.
JDOB is the 166st largest commercial banking organization in Minnesota, controlling deposits of approximately
$39.1 million, representing less than 1 percent of total
deposits in commercial banking organizations in the state.1
Bank's de novo entry into the Brainerd, Minnesota banking
market2 would enhance competition in that market. Based
on all the facts of record, the Board concludes that consummation of the proposal would not have any significantly
adverse effects on competition or the concentration of
banking resources in any relevant market.
The Board also has determined in light of all the facts of
record that financial and managerial resources and future
prospects of JDOB, its subsidiaries, and Bank, and considerations relating to the convenience and needs of the communities to be served, are consistent with approval of the
application, as are the other supervisory factors the Board
must consider under section 3 of the BHC Act.3

1. All banking data are as of June 30, 1996.
2. The Brainerd banking market consists of Crow Wing County and
portions of southern Cass County, all in Minnesota.
3. Comments by First National Bank of Walker, Walker, Minnesota
("First National"), contend that information in JDOB's application to
charter Bank, primarily financial data and projections, is incorrect. In
addition, First National maintains that Bank's proposed chief executive officer cannot effectively manage both Bank and another JDOB
subsidiary bank and that numerous financial institutions currently
serve the credit needs of the community. First National also has
asserted that the banking market cannot support an additional competitor. The Board has carefully reviewed these comments in light of all
the facts of record, including information from JDOB that substantiates its financial information, reports of examination assessing the
financial and managerial resources of JDOB and the Bank's effect on
those resources, and the "satisfactory" rating of JDOB's current

122

Federal Reserve Bulletin • February 1997

Based on the foregoing and all the facts of record, the
Board has determined that the application should be, and
hereby is, approved. The Board's approval of the proposal
is conditioned on compliance by JDOB with commitments
made in connection with the application. The commitments
and conditions relied on by the Board in reaching this
decision shall be 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 shall not be consummated before the
fifteenth calendar day following the effective date of this
order, or later than three months after the effective date of
this order, and Bank shall be open for business within six
months after the effective date of this order, unless such
periods are extended for good cause by the Board or the
Federal Reserve Bank of Minneapolis, acting pursuant to
delegated authority.
By order of the Board of Governors, effective December 20, 1996.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Lindsey, Phillips, and Meyer. Absent and not
voting: Governor Yellen.
JENNIFER J. JOHNSON

Deputy Secretary of the Board

Orders Issued Under Section 4 of the Bank Holding
Company Act
BancSecurity Corporation
Marshalltown, Iowa
Order Denying Acquisition of a Thrift Holding Company
BancSecurity Corporation, ("BancSecurity"), a bank holding company within the meaning of the Bank Holding
Company Act ("BHC Act"), has requested 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 acquire Marshalltown Financial Corporation ("MFC"), and MFC's wholly owned
thrift subsidiary, Marshalltown Savings Bank, FSB ("Savings"), all of Marshalltown, Iowa, and thereby to engage in
operating a savings association.

subsidiary bank at its most recent examination for Community Reinvestment Act performance by its primary federal supervisor, the Office
of the Comptroller of the Currency ("OCC"). The Board previously
has concluded that the BHC Act requires the Board to focus on
whether a proposal would substantially lessen competition or create a
monopoly and that the establishment of a de novo bank would have a
positive effect on competition in any banking market. See Wilson Bank
Holding Company, 82 Federal Reserve Bulletin 568 (1996). In addition, the OCC has reviewed First National's contentions and reaffirmed its preliminary determination to approve Bank's charter. For
these reasons, and based on all the facts of record, the Board concludes that all the factors required to be considered under the BHC
Act are consistent with approval.




Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 42,251 (1996)). The time for filing
comments has expired, and the Board has considered the
notice and all comments received in light of the factors set
forth in section 4(c)(8) of the BHC Act.
BancSecurity is the 12th largest depository institution in
Iowa, controlling deposits of $415 million, representing
approximately 1.1 percent of total deposits in depository
institutions in the state.1 MFC, with deposits of
$103 million, is the 57th largest depository institution in
the state, representing less than 1 percent of deposits in
depository institutions in the state. On consummation of
the proposal, BancSecurity would become the ninth largest
depository institution in Iowa, controlling total deposits of
$518 million, representing approximately 1.4 percent of
total deposits in depository institutions in the state.
The Board previously has determined by regulation that
the operation of a savings association by a bank holding
company is closely related to banking within the meaning
of section 4(c)(8) of the BHC Act. 12 C.F.R 225.25(b)(9).
Competitive

Considerations

Under section 4(c)(8) of the BHC Act, the Board is required to consider whether a 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.2 The Board
concludes that consummation of this proposal would result
in significantly adverse effects on competition in the relevant banking market. In reaching this conclusion, the Board
carefully considered the entire record, including information, analysis and arguments provided by BancSecurity.
The Board and the courts have found that the relevant
geographic banking market for analyzing the competitive
effects of a proposal must reflect commercial and banking
realities and should consist of the local area where the
depository institutions involved offer their services and
where local consumers can practicably turn for alternatives.3 In making a determination on the geographic market
in this case, the Board has considered worker commuting
patterns (as indicated by census data), shopping patterns
and other indicia of economic integration and the transmission of competitive forces among depository institutions,
and relevant banking data. In addition, the Board has
reviewed information from on-site investigations of the
area conducted by staff of the Board and the Federal

1. State deposit data are as of June 30, 1995. In this context,
depository institutions include commercial banks, savings banks, and
savings associations.
2. 12 U.S.C. § 1843(c)(8).
3. See St. Joseph Valley Bank, 68 Federal Reserve Bulletin 673
(1982). The key question to be considered in making this selection "is
not where the parties to the merger do business or even where they
compete, but where, within the area of competitive overlap, the effect
of the merger on competition will be direct and immediate." United
States v. Philadelphia Nat'l Bank, 374 U.S. at 357 (1963); United
States v. Phillipsburg Nat'I Bank, 399 U.S. 350 (1969).

Legal Developments

Reserve Bank of Chicago in connection with the proposal
("Federal Reserve Survey"), which included interviews
with bankers, consumers, and owners of small businesses
in Marshall County and adjacent areas.4
The Board has determined that the relevant market for
analyzing the competitive effects of this proposal is a rural
area in central Iowa approximated by Marshall County
plus the townships of Spring Creek, Carlton, Indian Village and Highland in Tama County ("Marshall County
banking market"). The Board also has concluded that the
relevant banking market does not include Howard, Toledo,
Tama and Columbia Townships in Tama County and Felix
and Clay Townships in southern Grundy County as proposed by BancSecurity.5
Banking data reveal that a very high proportion of deposits and loans of BancSecurity's subsidiary bank, Security
Bank, Marshalltown, Iowa ("Security Bank"), and Savings are received and originate from the Marshall County
banking market. Data provided by BancSecurity show that
approximately 96 percent of Security Bank's deposit
accounts and 94 percent of its loans, and approximately
78 percent of Savings's deposits and 95 percent of the
loans made by Savings, originated in the Marshall County
banking market.6 In contrast, approximately 2 percent of
Security Bank's deposit accounts and approximately
3 percent of its loans are from the portions of Tama County
not included in the banking market. In addition, Security
Bank received approximately 1 percent of its deposit accounts from and made approximately 2 percent of its loans
in Felix and Clay Townships in southern Grundy County.
Discussions with senior management of depository institutions in Marshall, Tama and Grundy Counties, moreover,
confirmed that competition among banking organizations
in different counties is limited. Banks in Marshall County
generally reported only a modest amount of business from
Tama County, mostly from the western townships that are
included in the Marshall County banking market. In addition, Marshall County banks that were located near the
border with Tama County reported that only 5 to 8 percent

4. BancSecurity objects to consideration by the Board of any
information or staff submissions that have not been provided to it
under the Freedom of Information Act ("FOIA"). Certain information
in the record has been withheld from BancSecurity as privileged from
disclosure under the FOIA. The Board notes that the rules regarding
access to information under the FOIA provide the appropriate framework for considering a challenge to confidential treatment accorded
staff's submissions and other information, and that BancSecurity's
challenge was reviewed under the FOIA and denied. The Board's
rules do not provide an applicant access to information that is otherwise exempt from disclosure under the FOIA. BancSecurity, moreover, has been provided all nonconfidential information in the record
of this notice.
5. During the processing of the notice, BancSecurity proposed
additional larger geographic areas as the relevant banking market. For
the reasons discussed in detail in this order, the Board concludes that
these alternative proposals would not constitute the relevant banking
market for considering the competitive effects of the proposed acquisition.
6. The data have been adjusted to exclude banking data from offices
of Security Bank in Jasper and Hardin Counties.




123

of their business originated in Tama County. On the other
hand, banks located in the eastern three quarters of Tama
County generally reported few or no accounts with Marshall County residents. Banks in Clay Township indicated
that they derived small to modest amounts of business in
Marshall and Tama Counties.7 The Federal Reserve Survey
also suggests that there is relatively little advertising by
area financial institutions outside their local communities.8
The Federal Reserve Survey of households and businesses in Marshall County indicated that Marshall County
consumers almost exclusively obtained banking services
from Marshall County depository institutions. Almost all
the transaction and savings accounts, and all the certificates
of deposit reported in a telephone survey of Marshall
County residents were in Marshall County depository institutions. In addition, 40 of the 47 consumer loans and 16 of
17 commercial and industrial loans to the Marshall County
participants in the telephone survey within the last five
years were from Marshall County depository institutions,
and none of the eight remaining consumer loans were from
depository institutions in either Tama or Grundy Counties.
An overwhelming majority of households and business
owners interviewed in Marshall County stated that they
would seek another Marshall County depository institution
if they became dissatisfied with their current institution.
Almost none of the respondents stated that they would
consider an institution in Tama or Grundy County.
Marshalltown, with a population of approximately
25,000 residents, is the largest town in the Marshall County
banking market. The communities surrounding Marshalltown, particularly those identified by BancSecurity as included in the relevant banking market, are small, offer few
incentives for regular travel to these areas by Marshall
County residents, and are not conveniently located to Marshalltown.9 Tama and Toledo, for example, have populations of approximately 2,700 and 2,400 residents, respectively, and are located approximately 20 miles from
Marshalltown. Travel time between the communities and

7. There are no banks in Felix Township.
8. All Marshall County banks advertise in the Marshalltown daily
newspaper that circulates primarily in Marshall County. The newspaper has few subscribers in Tama and Toledo in Tama County or Felix
and Clay Townships in southern Grundy County. Security Bank and
Savings are two of only three depository institutions with offices in
both Marshall and Tama counties. Security Bank's Tama County
branch advertises primarily in a local weekly newspaper in the town
where the branch is located. The Toledo branch of Savings advertises
primarily in a Tama weekly newspaper. Although Security Bank and
Savings also advertise on Marshalltown radio stations, these stations
broadcast over an area even larger than the extended area identified by
BancSecurity as the relevant banking market. For example, one Marshalltown station broadcasts over an area encompassing 25 Iowa
counties. Banking data also show little indication that the radio
advertising has been effective in generating customers from outside
the Marshall County banking market.
9. The Board notes that general survey data suggest that individuals
in households and small business owners have a strong preference for
purchasing basic banking services very close to where they live or
work, and that the data are similar in urban and rural markets.

124

Federal Reserve Bulletin • February 1997

Marshalltown is approximately 30 minutes.10 Clay and
Felix Townships in southern Grundy County have populations of approximately 1,500 and 300 residents, respectively, and are located approximately 15 miles from Marshalltown. Travel time between the communities and
Marshalltown is approximately 20 to 25 minutes.
Commuting data indicate that Marshall County residents
generally do not regularly travel outside of their county.11
In addition, except for the Tama County townships included in the Marshall County banking market, residents of
Tama County generally do not commute in large numbers
to Marshall County.12 Approximately 13 percent of the
work force residing in Tama County commute to Marshall
County, with more than half of these commuters traveling
from the four Tama County townships that are included in
the Marshall County banking market. Only 4.5 percent of
the Tama County work force commuting to Marshall
County resides in Howard, Toledo, Tama, and Columbia
Townships, that BancSecurity argues should be included
within the Marshall County banking market. A significant
percentage of the labor force from Felix and Clay Townships in southern Grundy County commute to Marshall
County. Other data, including interviews with Grundy
County banking officials, indicate, however, that banks in
these southern Grundy County townships do not consider
Marshall County banks to be significant competitors.
Moreover, even if these Grundy County townships were

10. BancSecurity maintains that designation of Tama and Marshall
Counties as a Rand-McNally basic trade area and the overlap of
school district boundaries between the Counties, among other things,
support its contention that the relevant banking market should be
larger. The Board notes that these delineations are made for purposes
not related to the competitive overlap between depository institutions
and that the facts of this case, including those noted above, indicate
that these delineations do not adequately reflect the area in which
competition for banking services is real and immediate. See Wyoming
Bancorporation v. Board of Governors, 729 F.2d 687 (1984).
11. Residents of Marshall County have one of the lowest rates of
commuting outside their county in Iowa. Only 9.5 percent of the
county's workers commute outside Marshall County for employment,
and only approximately 1.8 percent commute to Tama or Grundy
County.
12. BancSecurity states that 1990 census data understate the number
of commuters because the data do not fully reflect the 1,500 new jobs
created in the Marshalltown area in the last five years nor the large
number of retirement-age residents of Tama County who may travel to
the Marshalltown area for reasons other than employment. BancSecurity also argues that data from the Iowa Department of Transportation
show a high traffic flow on the main highways between Marshall and
Tama Counties and that, in a 1992 labor survey, many Tama County
residents reported that they would accept a daily commuting distance
of up to 60 miles. The Board has considered these data in light of all
the facts of record, including data that suggest that events since 1990
may have decreased the amount of commuting into Marshalltown. For
example, the data indicate that firms have exited or downsized in
Marshalltown, a number of workers from out of state have transferred
to Marshalltown in the case of the relocation of workers after a
corporate consolidation, and there have been increases in employment
opportunities in Tama County, such as the recent opening of a gambling casino in the Meskwaki Indian Settlement in southwest Tama
County and the expansion of several other companies in Tama County.




included in the market, the competitive effects of this
proposal still would be significantly adverse.13
The Federal Reserve Survey found that Marshalltown's
large number of retail shopping options provided a disincentive for Marshalltown residents to shop in neighboring
communities. In addition, on-site visits to communities
surrounding Marshall County did not lend support to
broadening the Marshall County banking market beyond
the previously identified westernmost townships in Tama
County on the basis of travel patterns for goods and
services. Basic services such as restaurants, clothing stores,
and medical and financial services were available in most
of the communities surrounding Marshall County.
Based on all the facts of record, and for the reasons
discussed above, the Board concludes that the Marshall
County banking market, an area that includes all of Marshall County and Spring Creek, Carlton, Indian Village,
and Highland Townships, in Tama County, is the appropriate geographic market for analyzing the competitive effects
of the proposal. The Board also concludes that Howard,
Toledo, Tama, and Columbia Townships in Tama County,
and Felix and Clay Townships in southern Grundy County,
should not be included in the relevant banking market.
Competitive Effects in the Marshall County Banking
Market
Security Bank and Savings compete in the Marshall
County banking market. Security Bank is the largest of
14 depository institutions in the market, controlling approximately $214 million of deposits and representing
almost 38 percent of the total deposits in the market
("market deposits").14 Savings is the third largest of the
14 depository institutions in the market, controlling deposits of approximately $87 million, representing 7.7 percent
of market deposits. On consummation, BancSecurity would
control total deposits of approximately $301 million, representing approximately 49.2 percent of market deposits.15

13. The Herfindahl-Hirschman Index would increase by 733 points
to 2623, and BancSecurity would control 45.3 percent of total deposits
in the market.
14. Market data are as of June 30, 1995, and are based on calculations that include the deposits of thrift institutions 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 743 (1984).
Because the deposits of Savings would be controlled by a commercial
banking organization after consummation of the proposal, those deposits are included at 100 percent in the calculation of BancSecurity's
pro forma market share. See Norwest Corporation, 78 Federal Reserve Bulletin 452 (1992); First Banks, Inc., 76 Federal Reserve
Bulletin 669 (1990).
15. BancSecurity contends that the methodology used to assess the
competitive effects in the market does not give sufficient weight to the
deposits of a thrift competitor in the market and gives too much
weight to the deposits acquired from Savings, which will continue to
be operated as a traditional thrift after consummation of the proposal.
The deposits controlled by the thrift competitor have not been given
full weight because it does not provide the full range of products and
services offered by commercial banks in the relevant market, particularly residential mortgages or commercial loans. The deposits of

Legal Developments

The market, as measured by the Herfindahl-Hirschman
Index ("HHI"), is already highly concentrated.16 Consummation of this proposal would cause the HHI to increase by
849 points to 3032. This increase in concentration would
significantly exceed the threshold levels in the Justice
Department merger guidelines.17
The Board notes that HHI thresholds are used as guidelines to help the Board, the Justice Department, and other
banking agencies identify cases in which a more detailed
competitive analysis is appropriate to ensure that the proposal would not have a significantly adverse effect on
competition in any relevant banking market. A proposal
that fails to pass the HHI market screen nevertheless may
be approved if other information indicates that the proposal
would not have a significantly adverse effect on competition.18 The Board has carefully considered BancSecurity's
contentions that consummation of the proposal would not
result in significantly adverse competitive effects because
BancSecurity and Savings do not provide the same types of
banking products and services other than residential mortgage loans and retail deposits19 and that a number of

Savings, however, have been included pro forma at 100 percent
because the deposits would directly enhance the capacity of BancSecurity to offer a full range of commercial banking products. Indeed,
in this case, BancSecurity characterizes as a public benefit of the
transaction the fact that Savings will be able to attract larger lending
transactions as a result of combined lending limits available through
loan participations with BancSecurity's banking subsidiaries. BancSecurity also has referred to public benefits from the availability of other
new banking services from Savings. In this light, the Board concludes
that its traditional methodology appropriately considers thrift deposits
in analyzing the competitive effect of the proposal.
16. Under the revised Department of Justice Merger Guidelines,
49 Federal Register 26,823 (1984), a market in which the post-merger
HHI is above 1800 is considered highly concentrated. The Justice
Department has informed the Board that a bank merger or acquisition
generally will not be challenged (in the absence of other factors
indicating anticompetitive effects) unless the 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 institutions.
17. The proposal also would significantly exceed the Justice Department Merger Guidelines under BancSecurity's delineation of the
relevant banking market by causing the HHI to increase 697 points to
2224. In addition, market share calculations based on BancSecurity's
contentions regarding the weight accorded deposits held by thrift
competitors in the Marshall County banking market also would significantly exceed the screening guidelines. If deposits of the thrift
competitor in the market were given full weight, the HHI would
increase 823 points to 2933, and BancSecurity would control
48.3 percent of market deposits. If the deposits controlled by Savings
were weighted at 50 percent pre- and post-merger, the HHI would
increase 578 points to 2761 and BancSecurity would control
45 percent of market deposits.
18. HHI calculations are based on deposit data that were assembled
before Tama State Bank moved its main office to Marshalltown in
September 1996. The Marshalltown office is a recently established
de novo office, and the bank has retained its office in Tama County.
The deposits of this institution, therefore, have not been included in
the HHI calculations.
19. Savings, a thrift institution, engages primarily in accepting
federally insured deposits and making residential mortgages. Security




125

considerations would mitigate any potential adverse competitive effect in any relevant banking market, including
the number of depository institution competitors remaining
in the banking market, the attractiveness of the banking
market to potential entrants and low regulatory barriers for
entry, and competition provided by credit unions and other
providers of financial services located within and outside
the banking market.
Security Bank and Savings compete directly in a number
of products, including residential mortgage loans, an individual product that is important to Marshall County banking market residents.20 Security Bank is the largest provider of residential mortgage loans in the market, with a
market share of approximately 36 percent. Savings is the
second largest provider, with approximately 25 percent of
the market. After consummation of the proposal, the concentration in the market for residential mortgage loans, as
measured by the HHI, would increase 1758 points to 3953
and BancSecurity would have a pro forma share of more
than 60 percent of the residential mortgage loan market.
This pro forma market share would be approximately five
times larger than the market share of the next largest
competitor, and 10 of the remaining competitors would
each control a market share of less than 5 percent.
Security Bank and Savings also compete directly with
respect to federally insured deposit accounts. Security
Bank is the largest provider of these accounts in the Marshall County banking market with a market share of approximately 34 percent. Savings is the third largest provider of these accounts with approximately a 14 percent
market share. After consummation of this proposal, concentration in the market for federally insured deposit accounts, as measured by the HHI, would increase 961 points
to 2933, and BancSecurity would have a pro forma share
of greater than 48 percent of the market.21 BancSecurity's
market share after consummation of the proposal would be
more than twice as large as the share of the next largest
competitor, more than five times as large as the third
largest competitor, and ten competitors would have market
shares of less than 5 percent.
The Board has carefully considered the mitigating effect
of the fact that 13 depository institutions would remain in
the market after consummation, including several banks
controlled by large bank holding companies, in light of
BancSecurity's pro forma share of market deposits. BancSecurity would control market deposits at least ten times
larger than market deposits controlled by all but two of the
remaining competitors. In addition, 10 of the 12 remaining
competitors would have less than 5 percent of deposits, and

Bank engages in a wide variety of banking products and services
including mortgage, commercial, agricultural, and consumer lending,
and deposit taking.
20. The analysis of the proposal's structural impact on residential
mortgage loans is based on call report mortgage data, discussions with
area bankers, and a telephone consumer survey of borrowing practices
by local residents.
21. This calculation is based on weighting thrift institutions in the
market at 100 percent.

126

Federal Reserve Bulletin • February 1997

nine of these competitors would have less than 3 percent of
deposits.22 BancSecurity's share of market deposits would
approximately equal the market shares of all other depository institutions combined, and would be more than twice
as large as the market share of its closest competitor. The
degree of disparity between the market shares of BancSecurity and its competitors significantly reduces the mitigating effect of the number of remaining competitors and
would permit BancSecurity to maintain a dominant market
position despite the presence of firms that may have overall
greater organizational resources.
The Board also notes that, although several large depository institutions have competed in the banking market for
a number of years, deposit market shares have been fairly
stable in the past five years, without significant encroachment on BancSecurity's market share by competitors. Between 1991 and 1994, for example, Security Bank continued to control more than twice the share of market deposits
as its next largest competitor.23 Data also indicate that
Security Bank currently has a dominant market share in
every lending category examined in the Federal Reserve
Survey.24 For certain types of credit, Security Bank's share
in the Marshall County banking market is two or three
times more than the share of the next largest provider.
These conditions have prevailed despite the entry into the
market of five banking organizations since 1994.25 Moreover, the Federal Reserve Survey found that residents
tended to form long-standing banking relationships with
local depository institutions that were not easily displaced
by depository institutions that did not have an established
record of serving the Marshall County community.
Although the Marshall County banking market has characteristics that make it attractive for entry,26 the barriers to
entry imposed by Iowa law on new entrants into a banking
22. In addition to the small market shares held by nearly all
remaining competitors, the Board notes that more than half of the
remaining firms are in small communities throughout Marshall
County.
23. BancSecurity indicates that Norwest Bancorp, Minneapolis,
Minnesota ("Norwest"), has increased its share of market deposits by
63 percent since entering the market through the acquisition of a
branch of a failed thrift institution in June 1994, has established a
second location in Marshalltown for the purpose of offering mortgage
and other loans as well as securities brokerage services, and has
announced plans to build a new bank facility in Marshalltown. The
Board notes, however, that Norwest controls less than 3 percent of the
deposits in the Marshall County banking market.
24. In addition to Security Bank's share of the market for federally
insured deposits, residential mortgage loans, and consumer loans,
Security Bank also controls approximately 44 percent of the market
for small commercial and industrial loans (loans in amounts of less
than $1 million) and approximately 57 percent of the market for all
commercial and industrial loans.
25. Recent entry by banking organizations appears to have contributed little to increasing competition in the banking market because
four of the five entrants have acquired existing banking offices. The
fifth entrant, Tama State Bank, relocated its headquarters from Tama
County to Marshalltown in September 1996.
26. Data indicate that population and deposits per banking office,
per capita income and growth in market deposits, and profitability of
banks in the banking market (as measured by the return on assets
(annualized)) are all above the average for Iowa's rural counties.




market substantially offset the mitigating elfect of this
consideration. Specifically, office protection laws restricting intrastate branching significantly limit the number of
potential competitors eligible to enter the Marshall County
banking market.27 Entry by acquisition of an existing financial institution is permissible; however, this proposal would
effectively eliminate MFC as an entry vehicle, and entry
through the acquisition of a competitor to BancSecurity
would not increase the number of competitors in this
market. Although interstate banking will be permitted in
Iowa after June 1, 1997, out-of-state banking organizations
will only be permitted to acquire an Iowa bank that has
operated for at least five years and will not be able to
establish de novo branches.28
BancSecurity contends that credit unions and other financial institutions in and outside the Marshall County
banking market exert a mitigating competitive influence. In
the aggregate, however, the four credit unions in the Marshall County banking market control less than 7 percent of
the market deposits. Three of the four credit unions control
small amounts of deposits and have restrictive membership
requirements. The largest credit union is open for membership to all residents of Marshall, Tama, Grundy, and Hardin
Counties, but offers a narrow product line that excludes
residential mortgages and commercial deposit and lending
services.29
In addition, as previously discussed, the Justice Department guidelines used to screen the competitive effects of
depository institution acquisitions implicitly take into account competition provided by credit unions and nondepository lenders in the banking market. Specifically, the
adoption of higher thresholds for screening bank mergers
recognizes that competition by nonbank sources not included in the calculation of the HHI may serve to mitigate
the adverse competitive impact of a merger.

27. See Iowa Code Ann. §§ 524.1202 & 524.1419. Iowa law would
permit a bank headquartered in a contiguous county to establish a new
branch in Marshall County only in towns that do not already have a
bank office in operation. De novo branching into the relevant banking
market would therefore be limited to eight very small towns, none of
which has a population in excess of 350. A bank headquartered in a
contiguous county could also relocate its home office into the market,
or a new bank could be established. (See Iowa Code Ann. §§ 524.312
& 524.301) However, the fixed costs of building a suitable facility,
hiring additional staff, advertising costs and other activities associated
with establishing a new headquarters make this option unrealistic for
many small banking firms. The establishment of a new bank would
involve costs similar to those of relocating an existing bank, but also
would include costs to meet the initial capital requirements and to gain
regulatory approval. Federal savings banks may branch without restriction under Iowa law and may act as an agent for their banking
affiliates under federal interstate banking law. However, this affects
only a small number of institutions and does not make the office
protection barriers any less significant for most potential competitors.
28. Iowa Code Ann. §§ 524.1205 & 524.1805.
29. If deposits controlled by this credit union were given the same
weight as thrift institutions in the banking market, the HHI would
increase 818 points to 2903 on consummation of the proposal. The
HHI for federally insured retail deposits would increase by 880 points
to 2705 under the proposal if deposits in this credit union were given
full weight.

Legal Developments

The Board concludes in light of all the facts of record,
including the Federal Reserve Survey, which indicates that
the overwhelming majority of retail and commercial customers in the Marshall County banking market obtain their
banking services from a local depository institution, that
out-of-market financial institutions, including institutions
providing electronic banking services, do not mitigate the
substantially adverse competitive effects of this proposal.30

competitive effects. Accordingly, the Board hereby denies
BancSecurity's notice under section 4(c)(8) of the BHC
Act.
By order of the Board of Governors, effective December 9, 1996.
Voting for this action: Chairman Greenspan and Governors Kelley,
Lindsey, Phillips, Yellen, and Meyer. Absent and not voting:
Vice Chair Rivlin.

Public Benefits
The Board has considered whether the potential benefits to
the public, such as greater convenience, increased competition, or gains in efficiency outweigh possible adverse effects of the proposal. BancSecurity has indicated that it
could expand the programs of Savings to include those
offered by BancSecurity to benefit the existing customers
of both institutions. BancSecurity also states that, through
the acquisition of Savings, it would be able to improve the
quality of services provided to the customers of both
institutions, and to increase the lending limits of the combined entity.
The requirement under section 4 of the BHC Act that the
Board must determine that public benefits from a proposal
can reasonably be expected to outweigh potential adverse
effects necessarily involves a balancing process that takes
into account the extent of the potential for adverse effects.
The Board notes that MFC and Savings are well-managed
organizations in satisfactory financial condition and that
Savings received a "satisfactory" rating from its primary
federal supervisor in its most recent evaluation for performance under the Community Reinvestment Act. For the
reasons discussed in this order, however, the effects on
competition in the Marshall County banking market are
substantially adverse. In light of these and all the facts of
record, the Board has concluded that the public benefits
resulting from potential costs savings, gains in efficiency or
greater convenience identified in the proposal are not sufficient, on balance, to outweigh the significantly adverse
effects on competition in the Marshall County banking
market.
For reasons noted above, and based on all of the facts of
record, the Board concludes that the proposed transaction
would have significantly adverse effects on the Marshall
County banking market. The Board also concludes that
considerations relating to public benefits, including financial and managerial resources of the institutions involved,
do not lend sufficient weight to outweigh these adverse

30. BancSecurity has noted the absence of any comments by the
Justice Department, any other federal regulator of financial institutions, or any competitor in the market about possible adverse competitive effects of this proposal. The BHC Act, however, charges the
Board with determining independently whether a particular proposal
can reasonably be expected to produce benefits to the public that
outweigh possible adverse effects, such as undue concentration of
resources or decreased or unfair competition. (12 U.S.C. § 1843(c)(8)).
In making its determinations, however, the Board carefully considers
the views provided to it by other agencies.




127

JENNIFER J. JOHNSON

Deputy Secretary of the Board

Bank of Montreal
Montreal, Canada
The Bank of Nova Scotia
Toronto, Canada
Canadian Imperial Bank of Commerce
Toronto, Canada
The Chase Manhattan Corporation
New York, New York
First Chicago NBD Corporation
Chicago, Illinois
National Bank of Canada
Montreal, Canada
Royal Bank of Canada
Montreal, Canada
The Toronto Dominion Bank
Toronto, Canada
Order Approving a Notice to Engage in Certain
Nonbanking Activities and Application to Become a
Member of the Federal Reserve System
Bank of Montreal, Montreal, Canada; The Bank of Nova
Scotia, Toronto, Canada; Canadian Imperial Bank of Commerce, Toronto, Canada; The Chase Manhattan Corporation, New York, New York; First Chicago NBD Corporation, Chicago, Illinois; National Bank of Canada, Montreal,
Canada; Royal Bank of Canada, Montreal, Canada; and
The Toronto Dominion Bank, Toronto, Canada (collectively, "Notificants"), bank holding companies within the
meaning of the Bank Holding Company Act ("BHC Act"),
have requested 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)
each to acquire up to 13.3 percent of the voting shares of
Multinet International Bank, New York, New York
("Multinet"). Notificants propose that Multinet, a de novo
uninsured state licensed trust company, would serve as a
clearinghouse for multilateral netting of foreign exchange

128

Federal Reserve Bulletin • February 1997

transactions. Multinet would provide the proposed services
to all qualifying participants worldwide.
In addition, Multinet has applied under section 9 of the
Federal Reserve Act to become a member of the Federal
Reserve System.1 As a state member bank, Multinet would
have an account at the Federal Reserve Bank of New York
("Reserve Bank") and would use Federal Reserve System
payment services to clear and settle U.S. dollar payments to
and from the clearinghouse.
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 39,660 (1996)). The time for filing
comments has expired, and the Board has considered the
notice and all comments received in light of the factors set
forth in section 4(c)(8) of the BHC Act and section 9 of the
Federal Reserve Act.
Notificants are large commercial banking organizations
headquartered in Canada and the United States. They engage directly and through subsidiaries in a broad range of
banking and permissible nonbanking activities in the
United States.
Proposed Activities
Multinet would address the risks inherent in foreign exchange clearing and settlement by establishing a clearinghouse for financial institutions that enter into foreign exchange contracts. Multinet would net spot and forward2
foreign exchange contracts between participants in the
clearinghouse, and condition payments to a participant
under a foreign exchange contract on strict compliance by
the participant with the clearinghouse rules. Those procedures would reduce the volume of settlement payments
among participants and have the potential to reduce significantly the credit, liquidity, and other risks and the transaction costs associated with clearing and settling foreign
exchange contracts.3
Multilateral netting would be achieved through the legal
technique of novation and substitution, whereby Multinet
would become the counterparty to each participant in every
contract accepted for netting and would receive payments
from and make payments to each participant in the proper

1. Multinet would not accept deposits and would not be insured by
the Federal Deposit Insurance Corporation. On August 21, 1996,
Multinet received an Organizational Certificate and conditional Authorization Certificate from the New York State Banking Department.
The Authorization Certificate is conditioned on Multinet's becoming a
member of the Federal Reserve System and addressing certain other
organizational and operational matters.
2. Forward contracts would have a maturity of not more than two
years.
3. Multinet also would provide bilateral netting services to subscribers outside the clearinghouse. Because Multinet would not be a party
to those transactions, its assets and the collateral pledged by participants in the clearinghouse would not be at risk with respect to the
transactions. Multinet has committed that it will not net or settle
obligations created by or through any other bilateral or multilateral
netting service without prior notice to the Federal Reserve System.




currencies.4 Multinet would charge participants a fee for
each trade that it cleared.
As a member of the Federal Reserve System, Multinet
would open an account with, and receive payment services
from, the Reserve Bank. Multinet would have access to
Fedwire to make and receive U.S. dollar payments, which,
among other things, would be used to conduct U.S. dollar
settlements and would have a book-entry securities account, which would be used to hold and manage U.S.
Treasury securities pledged by participants as collateral.5
Multinet's key service provider would be International
Clearing Systems, Inc. ("ICSI"), a wholly owned subsidiary of The Options Clearing Corporation ("Options Clearing"), both of Chicago, Illinois.6 ICSI would operate
VALUNET®, a proprietary netting, settlement, and risk
management software system developed and tested with
the direction and support of Options Clearing and currently
in use by ICSI to effect bilateral netting of foreign exchange contracts.7 In addition, two representatives of ICSI
would serve on Multinet's 12-member board of directors,
and one of ICSI's representatives also would serve on the
board's executive committee and risk management committee.8
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."9 Multinet proposes to engage in
trust company activities (including activities of a fiduciary,
agency, or custodial nature) related to the maintenance of

4. Operations are expected to begin in U.S. and Canadian dollars
only, with transactions in other currencies to be added thereafter.
Multinet has committed that it will not clear foreign exchange contracts in any additional currencies, and will not make any change in
the overall currency liquidity limit or level of available credit facilities
in any eligible currency, without prior notice to the Federal Reserve
System.
5. Multinet has committed that it will not incur any overdrafts in its
account at the Reserve Bank.
6. Options Clearing is a registered clearing agency that is owned by
several U.S. stock and commodity exchanges and regulated by the
Securities and Exchange Commission. Options Clearing is the largest
clearinghouse for options contracts in the world, and has developed
complex risk management and settlement techniques for the numerous
products it clears.
7. ICSI stalf would monitor participants' positions and submitted
contracts for compliance with Multinet's policies and procedures, and,
under the direction of Multinet staff, would make and receive all
settlement payments. ICSI staff also would help to assess the operational capabilities of potential and active participants, train applicants
in the use of VALUNET®, and provide participants with telephone
support.
8. Nine of the 10 other members of the board of directors would be
representatives of Notificants. The tenth member would be a representative of Multinet.
9. 12 U.S.C. § 1843(c)(8). Regulation Y also provides that bank
holding companies may engage in incidental activities that are necessary to carrv on an activity that is closely related to banking. See
12 C.F.R. 225.21(a)(2).

Legal Developments

the collateral pool to be pledged by participants; foreign
exchange transactions (through the substitution of Multinet
as the counterparty to both sides of every accepted contract); and processing and transmitting financial, banking,
and economic data. All these activities are permissible for
bank holding companies under section 4(c)(8) of the BHC
Act, and would be performed by Multinet in the manner
authorized by the Board.10
Proper Incident to Banking Analysis
In order to approve the proposal, the Board also must
determine that the proposed activities are a proper incident
to banking; that is, that the activity "can reasonably be
expected to produce benefits to the public, such as greater
convenience, increased competition, or gains in efficiency,
that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition,
conflicts of interests, or unsound banking practices."11 As
part of its evaluation of these factors, the Board has carefully reviewed the financial and managerial resources of
the Notificants and Multinet and the effect the proposed
transaction would have on these resources. Based on all the
facts of record, the financial and managerial12 resources of
the Notificants and Multinet are consistent with approval
of the proposal.
The Board also has reviewed the proposal in light of its
Policy Statement on Privately Operated Large-Dollar Mul-

10. Multinet would not be a bank, would not make loans or
investments, and would not accept deposits other than of funds
generated from trust activities that were not currently invested and
were properly secured, and would satisfy the other limitations of
Regulation Y with respect to trust company activities. See 12 C.F.R.
225.25(b)(3). Foreign exchange trading has been approved by the
Board by order. See The Hongkong and Shanghai Banking Corporation, 75 Federal Reserve Bulletin 217 (1989); The Long-Term Credit
Bank of Japan, Limited, 74 Federal Reserve Bulletin 573 (1988).
Multinet also would provide data processing and transmission services pursuant to a written agreement, and would observe certain
limitations on the facilities and hardware provided with its data
processing and transmission services, as required by Regulation Y.
See 12 C.F.R. 225.25(b)(7).
11.12 U.S.C. § 1843(c)(8).
12. Each of the Notificants would have a representative on the board
of directors of Multinet, who may be an officer or director of the
Notificant. Under the Depository Institution Management Interlocks
Act (12 U.S.C. § 3201 et seq.) ("Interlocks Act") and the Board's
Regulation L (12 C.F.R. Part 212), certain management interlocks
between depository institutions or depository holding companies, as
defined in the Interlocks Act, that are not affiliated for purposes of the
Interlocks Act are prohibited. The general purpose of the Interlocks
Act is to promote competition between depository institutions in the
provision of credit to the general public. See H.R. Rep. No. 95-1383,
at 14 (1978), reprinted in 1978 U.S.C.C.A.N. 9273, 9286. In view
thereof, the Board previously has determined that a management
interlock between a depository institution and a limited purpose trust
company that does not have the power to accept deposits or make
personal or commercial loans is not prohibited by the Interlocks Act.
See Letter from General Counsel to Charles M. Thompson, Esq.,
dated July 13, 1994; Letter from General Counsel to Mr. John A.
O'Conner, Jr., dated July 8, 1994.




129

tilateral Netting Systems ("Policy Statement").13 Multinet
would take multiple steps to control the risks inherent in its
operations, including imposing membership criteria on participants, evaluating all foreign exchange contracts before
acceptance on the basis of several risk-related criteria,
withholding payments due a defaulting participant, and
using a line of credit secured by withheld payments and the
securities pledged by participants to fund settlement payments when a participant defaults.
To address the risk that financially weak institutions or
institutions that lack experience in foreign exchange transactions would default or be unable to fulfill their obligations on a timely basis, Multinet would subject potential
and active participants to stringent and objective membership requirements, including minimum requirements with
respect to capital, credit rating, and experience in the
foreign exchange dealer market.14 Applicants also would
be required to complete successfully a trial period as a
subscriber to Multinet's bilateral netting service.15 Multinet would continue to monitor the performance of participants after they became members.
To address the risk to Multinet arising from the potential
default of a qualified participant, Multinet would establish
and continually update for each participant a series of
exposure measurements and collateral requirements based
on Multinet's expected loss if the participant failed to
perform on any of its outstanding foreign exchange contracts. Each contract submitted would be evaluated to
determine whether it would cause either party to the contract to exceed its exposure limits or collateral requirement.
Contracts that would cause any of the exposure limits to be
exceeded, or that required additional collateral that was not
timely provided, would not be accepted for netting.16 Participants also would be required to contribute collateral to
cover Multinet's estimated exposure to settlement losses in
the clearinghouse as a whole and to the risk that a settlement agent might fail to deliver a currency under Multinet's multi-currency line of credit. Multinet also would
monitor the risk profile of participants to identify possible
future limit violations or the need to call for additional
collateral.17

13. See 59 Federal Register 67,534 (December 29, 1994). The
Policy Statement also incorporates the minimum standards for multilateral netting systems set forth in the Report of the Committee on
Interbank Netting Schemes of the Central Banks of the Group of Ten
Countries.
14. Multinet has committed that it will not admit a foreign financial
institution as a member of the clearinghouse without prior notice to
the Federal Reserve System, unless the System has previously approved the admission to Multinet of the identical type of financial
institution from the same foreign country.
15. All Notificants have successfully completed this trial period.
16. Contracts that were not accepted would remain bilateral contracts and would be settled outside Multinet.
17. Multinet's credit exposure on accepted forward contracts would
be fully collateralized by U.S. government obligations, and additional
collateral would be required to cover the potential volatility of the
accepted forward contracts over five business days. Multinet also
would be authorized to close out a participant's forward contracts in
whole or in part to cover any collateral deficiencies resulting from

130

Federal Reserve Bulletin • February 1997

Multinet proposes to establish several standard clearinghouse techniques to control and allocate the risk associated
with the failure by a participant to settle on a timely basis
its payment obligations on accepted foreign exchange contracts. In general, if a participant failed to pay Multinet,
Multinet would withhold payments due the defaulting participant and use the withheld payments, along with securities in the collateral pool, to secure an advance under
Multinet's line of credit in the currencies and in the
amounts that the defaulting participant failed to deliver. As
currently structured, Multinet would use the loan to pay the
parties that performed their payment obligations to the
clearinghouse. In the event the collateral pool was drawn
down, participants would be required to replenish the pool
by pledging additional collateral. A participant's failure to
make a required pledge would constitute a default and
enable Multinet to withhold settlement payments due that
participant, thereby providing additional collateral to the
pool.18 Multinet would minimize its operating risk through
its reliance on the back-office support staff of ICSI and the
use of comprehensive disaster recovery facilities and procedures.
The risk management policies and procedures that Multinet proposes to implement in providing foreign exchange
clearinghouse services are consistent with the Board's Policy Statement. Based on all the facts of record, the Board
finds that the risk management policies and procedures are
consistent with approval of the proposal.
The risk management techniques of Multinet also can
reasonably be expected to produce notable public benefits
by increasing the reliability of clearing and settlement in
foreign exchange transactions. All participants would be
subject to clearinghouse standards concerning their financial condition and operational capabilities, their volume of
payments would be reduced, and the multi-party collateral,
loss-sharing, and credit arrangements would ensure prompt
payment to performing parties. Moreover, the proposal can
reasonably be expected to increase competition in the
provision of foreign exchange services. Multinet would be
the first clearinghouse for multilateral netting of foreign
exchange transactions in the United States and only the
second such clearinghouse in operation worldwide. By
increasing the availability of clearing and settlement services, these services should be available at lower cost and
to a larger number of financial institutions and their customers.
For these reasons, and in reliance on all the commitments made in connection with the proposal, the Board
changes in exchange rates or the value of the collateral or from the
maturation of accepted forward contracts and the shift of collateral to
the settlement collateral pool. Based on these collateral requirements,
the Board has determined that Multinet's credit exposure on forward
foreign exchange transactions would not be significant.
18. Multinet has committed that it will notify the Federal Reserve
System of all proposed changes to its rules and user manual, and that
it will provide the System with a copy of any final agreement or legal
opinion related to its netting and settlement services and related
collateral arrangements, or any amendment to such documents before
using or acting in reliance on such documents or amendments thereto.




concludes that the proposal can reasonably be expected to
produce public benefits that would outweigh the potential
of the proposal for adverse effects, if any, under the proper
incident to banking standard of section 4(c)(8) of the BHC
Act.
The Board also has considered the factors it is required
to consider when reviewing an application to become a
member bank under section 9 of the Federal Reserve Act.
Multinet has provided the Board with several commitments
intended to ensure that the Board would have adequate
enforcement authority over Multinet as an uninsured state
member bank.19 Based on all the facts of record, the Board
finds that Multinet's application for membership is consistent with approval.20
Conclusion
Based on all the facts of record, including all the commitments, stipulations, and representations made by the Notificants and Multinet, and subject to all the terms and conditions set forth in this order, the Board has determined that
the notices and the application should be, and hereby are,
approved. Approval of the notices and application is specifically conditioned on compliance by Notificants with the
commitments and stipulations made in connection with the
notices and application. The Board's determination also is
subject to all the terms and conditions set forth in Regulation Y, including those in section 225.7 and 225.23(g)
(12 C.F.R. 225.7 and 225.23(g)), 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 thereunder. The
Board's decision is specifically conditioned on compliance
with all the commitments, stipulations, and representations
made in the notices and application, including the commitments and conditions discussed in this order. The commitments, stipulations, representations, and conditions relied
on in reaching this decision shall be 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.
These activities shall not be commenced later than three
months after the effective date of this order, unless such
period is extended for good cause by the Board or by the
Federal Reserve Bank of Chicago or New York, pursuant
to delegated authority.
By order of the Board of Governors, effective December 4, 1996.

19. Multinet also has stipulated that it is subject to the supervisory,
examination, and enforcement powers of the Board under the BHC
Act as if it were a subsidiary of a bank holding company, and to the
supervisory, examination, and enforcement powers of the Board under
the Federal Deposit Insurance Act ("FDI Act") as if Multinet were an
insured depository institution for which the Board is the appropriate
Federal banking agency under the FDI Act.
20. See 12 U.S.C. § 322; 12 C.F.R. 208.5.

Legal Developments

Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Lindsey, Phillips, Yellen, and Meyer.
JENNIFER J. JOHNSON

Deputy Secretary of the Board

Barnett Banks, Inc.
Jacksonville, Florida
Crestar Financial Corporation
Richmond, Virginia
First Union Corporation
Charlotte, North Carolina
NationsBank Corporation
Charlotte, North Carolina
Southern National Corporation
Winston-Salem, North Carolina
Wachovia Corporation
Winston-Salem, North Carolina
Order Approving Notices to Conduct Certain Data
Processing and Other Nonbanking Activities
Barnett Banks, Inc., Jacksonville, Florida; Crestar Financial Corporation, Richmond, Virginia; First Union Corporation, Charlotte, North Carolina; NationsBank Corporation, Charlotte, North Carolina; Southern National
Corporation, Winston-Salem, North Carolina; and Wachovia Corporation, Winston-Salem, North Carolina (collectively, "Applicants"), bank holding companies within the
meaning of the Bank Holding Company Act ("BHC Act"),
have given notice 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 or retain control of 5 percent or more of the voting shares of Southeast
Switch, Inc., Maitland, Florida ("SES"), after its mergers
with Internet, Inc., Reston, Virginia ("Internet"), and Alabama Network, Inc., Birmingham, Alabama ("Alabama
Network").1
Currently, SES operates an electronic funds transfer
("EFT") network under the tradename HONOR, Internet
operates an EFT network under the tradename MOST, and
Alabama Network operates an EFT network under the
tradename ALERT. These EFT networks provide data processing and data transmission services to banks and retail
merchants who are members of their branded automated
teller machine ("ATM") and point of sale ("POS") networks.2 The combined entity ("Company") would engage

1. Applicants are the bank holding companies that would control
more than 5 percent of any class of Company's voting shares. Other
current shareholders of SES, Internet, and Alabama Network also
would own shares of Company after consummation of this proposal.
2. In general, an ATM network is an arrangement whereby more
than one ATM and more than one depository institution (or the




131

in certain nonbanking activities related to the operation of
ATM and POS networks, including various data processing
services, pursuant to section 225.25(b)(7) of Regulation Y
(12 C.F.R. 225.25(b)(7)).3 Applicants propose to conduct
these activities throughout the United States, Bermuda,
Canada, Mexico, Central America, and the Caribbean.
Notice of the proposals, alfording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 56,547, 58,882 (1996)). The time for
filing comments has expired, and the Board has considered
the notices and all comments received in light of the
factors set forth in section 4(c)(8) of the BHC Act. As in
other cases, the Board also sought comments from the
Department of Justice on the competitive effects of these
proposals. The Department of Justice conducted an investigation of the proposals and indicated that it had no objection to consummation of the proposed transactions.
Applicants are large commercial banking organizations
with headquarters in Florida, Virginia, and North Carolina,
and they engage directly and through subsidiaries in a
broad range of banking and permissible nonbanking activities in the United States.4
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." The Board previously has determined that all the activities proposed in these notices are
closely related to banking within the meaning of section 4(c)(8) of the BHC Act.5 Applicants would conduct
these activities in accordance with Regulation Y and previous Board decisions.
The Board also must consider whether the performance
of the proposed activities by Applicants through Company
"can reasonably be expected to produce benefits to the
public . . . that outweigh possible adverse effects, such as
undue concentration of resources, decreased or unfair com-

depository records of such institutions) are connected by electronic or
telecommunications means to one or more computers, processors, or
switches for the purpose of providing ATM services to retail customers of the institutions. POS terminals are generally located in the
establishments of merchants. They accept ATM or similar cards and,
using the ATM network or a parallel POS-only network, provide
access to the cardholder's account to transfer funds to the merchant's
account.
3. A list of Company's proposed data processing and transmission
activities is set forth in Appendix A. In connection with its EFTrelated data processing and transmission activities, Company also
would provide management consulting services to depository institutions for EFT-related activities pursuant to section 225.25(b)(l 1) of
Regulation Y (12 C.F.R. 225.25(b)(l 1)) and check verification services to retailers pursuant to section 225.25(b)(22) of Regulation Y
(12 C.F.R. 225.25(b)(22)), which permits a bank holding company to
engage in authorizing a subscribing merchant to accept personal
checks and purchasing from the merchant validly authorized checks
that are subsequently dishonored.
4. Asset and deposit information for each of the Applicants is set
forth in Appendix B.
5. See 12 C.F.R. 225.25(b)(7), (11), and (22); The Bank of New York
Company, Inc., et al., 80 Federal Reserve Bulletin 1107 (1994)
("Bank of NY Order").

132

Federal Reserve Bulletin • February 1997

petition, conflicts of interests, or unsound banking practices."6 As part of this consideration under section 4(c)(8)
of the BHC Act, the Board reviews the financial and
managerial resources of the Applicants and their subsidiaries, and any company to be acquired, and the effect of the
proposal on those resources.7 Based on all the facts of
record, the Board concludes that financial and managerial
considerations are consistent with approval of the proposals. In addition, there is no evidence in the record that the
proposals would result in conflicts of interests or unsound
banking practices.
Competitive

Considerations

The proposals would result in a joint venture between large
banking organizations that would operate the predominant
EFT network in a multi-state area in the southeastern
United States. The Board has considered whether the proposed joint venture would result in undue concentration of
resources or unfair competition under applicable principles
of antitrust law.
The Board previously has concluded that the economic
and market structure characteristics of the EFT industry
tend to favor establishing a dominant network to serve a
multi-state region.8 For example, network externalities,
such as the economies of ubiquity, appear to promote
consolidation of regional ATM networks.9 As a result,
dominant ATM networks have emerged in various geographic areas throughout the EFT industry.10 One recent
study indicates that the ten largest regional networks now
account for 80 percent of all regional ATM network transactions in the United States.11

6. See 12 U.S.C. § 1843(c)(8).
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).
8. Early ATM networks typically were composed of banks that used
their ATMs for dispensing cash, and were confined to branches in
local banking markets. The smaller ATM networks have tended to
consolidate in response to several factors, including increased consumer desire to obtain widespread access to their accounts, the rise of
interstate banking, the competitive advantage produced by economies
of scale, and the desire to undertake relevant and timely technology
research and development and thereby enhance the products available
from and through the network.
9. As an ATM network expands the number of its financial institution members and available ATMs, its value to network cardholders
increases due to the greater accessibility of their deposit accounts.
Similarly, as the number of cardholders increases, so does the number
of transactions and hence the economic return on ATM terminals in
the network. This increased economic return provides incentives for
banks to establish additional ATMs, thereby further enhancing the
network's value to cardholders. Accordingly, banks tend to place a
greater value on membership in a network as its membership expands.
10. Although the network in the proposals would become the
nation's largest regional EFT network in transaction volume, a number of other large networks would continue to operate both in Company's service area and elsewhere throughout the United States.
11. See McAndrews and Rob, "Shared Ownership and Pricing in a
Network Switch," 14 International Journal of Industrial Organization
727 (October 1996).




The proposed joint venture would provide services to
depository affiliates of the joint venture participants, including the Applicants, and to unaffiliated financial institutions under operating rules that promote open access to the
network, which are discussed in detail below. Accordingly,
smaller financial institutions would have the opportunity to
provide their customers with greater access to their deposit
accounts and thereby could compete with larger, multistate organizations for retail deposit funds without the
necessity of substantial investments in branch systems or
their own proprietary ATM networks. The operating rules
also promote competition between Company's network
and alternative providers of EFT-related services, including
national ATM and POS networks, other regional networks,
and third-party providers of EFT switching and processing
services, thereby encouraging price and other competition
for the services provided by the proposed network.
In addition, each of the Applicants would be free to
continue to operate its own proprietary network and to
participate in other national and regional networks while
participating in Company's network. Moreover, there is no
evidence in the record that this proposal would reduce
competition among Applicants, the other owners of Company, and other banking organizations as providers of
banking products and services. In particular, Company's
operating rules do not set prices that a member institution
must charge its retail customers for ATM or POS transactions. In this light, and based on all the facts of record, the
Board concludes that the proposal would not result in
adverse effects such as undue concentration of resources or
unfair competition.
The Board also has considered whether these proposals
would result in decreased competition. The Board and the
courts traditionally have considered the area of effective
competition between the merging parties in order to determine whether a particular merger transaction is likely to
decrease competition. This area of effective competition
has been defined by reference both to a line of commerce,
or product market, and to a geographic market.
The Board previously has identified three distinct products that may be offered by ATM networks:
(1) Network access (access to an ATM network identified by a common trademark or logo displayed on ATMs
and ATM cards);
(2) Network services (the switching and gateway functions for the network); and
(3) ATM processing (the data processing and telecommunications facilities used to operate, monitor, and support a bank's ATMs).12
HONOR provides all three services to its network members. In contrast, MOST and ALERT provide only network
access directly; network services and ATM processing are
provided to members of these networks through third par-

12. See Banc One Corporation,
492 (1995) {"EPS Order").

et al., 81 Federal Reserve

Bulletin

Legal Developments

ties.13 The relevant product market in which to examine the
competitive effects of this proposal, therefore, is the network access market.14
The Board previously has determined that the geographic market for network access is an area significantly
larger than local banking markets and has considered the
market area of an ATM network to consist of regions
comprising several states.15 In this case, the HONOR network operates primarily in the Southeast, in North Carolina, South Carolina, Georgia, and Florida ("HONOR core
states"), and is the predominant regional EFT network in
that area. MOST operates primarily in the Middle Atlantic,
in Maryland, Virginia, the District of Columbia, and Tennessee ("MOST core states"), and is the predominant
regional EFT network in that area. ALERT operates primarily in Alabama and is the predominant regional EFT
network in that state. On consummation of these proposals,
Company would provide network access in a region consisting of those states and adjacent states ("Southeast Region").
Although the three networks involved in this proposal
operate primarily in areas adjacent to one another, the
record also indicates that the MOST network has a notable
presence in the HONOR core states and that the HONOR
network maintains a notable presence both in the MOST
core states and in Alabama.16 There are a number of
considerations, however, that mitigate any decrease in existing or potential competition resulting from these proposals.
For example, the extent of geographic overlap among
HONOR, MOST, and ALERT results primarily from the
geographic expansion of a few member institutions, and
the record indicates that the EFT networks generally have
not actively competed for new members in each other's
core states.17 In addition, several other large regional networks, such as MAC and NYCE, currently operate in areas
adjacent to Company's proposed network. The Board believes that these regional networks would provide competitive constraints to the proposed network, and that their
existence may become increasingly significant as multistate banking organizations continue to expand geographi-

13. Several regional or national firms, such as Deluxe Data Systems
and Electronic Data Systems, offer network services and ATM processing services to unaffiliated networks and their members.
14. In considering network access for POS transactions, the Board
notes that there are a number of competitors in the market, including
two large national networks that have grown substantially in recent
years throughout the nation (VisaCheck and MasterMoney). Based on
all the facts of record, the Board concludes that the proposals would
not significantly affect competition in any market for POS-related
services.
15. See EPS Order at p. 494-95.
16. For example, HONOR operates 484 ATMs in Virginia, and
MOST operates 419 ATMs in North Carolina.
17. The record indicates that the overlap among these networks is
attributable primarily to (1) the membership of two large interstate
bank holding companies in both the HONOR and MOST networks,
and (2) the membership of a few large Alabama-based organizations
in both the ALERT and HONOR networks.




133

cally.18 Moreover, smaller networks and third-party processors will continue to operate EFT networks within the
Southeast Region, and to provide both direct and potential
competition for Company.19 Finally, national networks offer an attractive alternative to regional networks for some
financial institutions in the Southeast Region, and national
networks appear to be increasing their competitive pressure
on regional networks.20
The Board also believes that proposed operating rules
for Company, when taken together, facilitate competition
with national and other regional networks and with thirdparty service providers, and ensure access to the network
for all depository institutions.21 Applicants anticipate that
Company would continue the use of certain procompetitive
rules currently implemented by one or more of the constituent networks. For example, all depository institutions
would be permitted to participate in the network on a
nondiscriminatory basis and would be permitted to join
other regional networks and to co-brand their cards and
ATM terminals. The Board also notes that national network
transactions initiated at a terminal in Company's network
would not be required to be routed through Company's
switch. The combined entity, moreover, would allow the
use of third-party processors and would permit unbranded
subswitching22 of transactions subject only to a royalty fee
established to compensate Company for the use of its
brand.23

18. The record indicates that banking organizations tend to transport
regional ATM marks as they expand into new geographic areas.
19. For example, Publix Supermarkets Inc., operates an ATM network under the tradename PRESTO in Florida and Georgia, and First
Tennessee Bank operates an ATM network under the tradename
Money Belt in Tennessee, Virginia, Georgia, and Florida. Electronic
Data Systems, a large third-party processor, operates an ATM network
under the tradename MPACT in 14 states, including Mississippi and
Arkansas.
20. A number of smaller banks in the Southeast Region that are
members of a national network are not members of HONOR, MOST,
or ALERT. In addition, VISA operates a national EFT network under
the tradename PLUS, and recently has announced that it plans to
change the PLUS mark to VISA in order to generate greater brand
recognition in all regions of the country.
21. The Board previously has determined that ATM network operating rules are an important consideration in assessing the competitive
impact of a proposal under the section 4(c)(8) factors. See Bank of NY
Order; EPS Order. In addition, Company's corporate structure ensures
that its board of directors will represent a wide range of interests and
that Company policy will not be dominated by the organizations with
the largest shareholdings. Twenty-two members of the Company's
26-member board of directors will be appointed by the Company's
Class A shareholders, which are all financial institutions. The Class A
shareholders consist of both net issuers and net acquirers of network
transactions, vary in asset size of the organization, and are geographically diverse.
22. "Subswitching" refers to the switching of transactions between
members of the same regional network without accessing that network, and therefore without paying the network's switch fee. Generally, this is accomplished by routing the transaction through a thirdparty processor that provides ATM processing services for both
network members.
23. Applicants have stated that Company's proposed operating rules
would not be made final until the proposals are consummated. The
Board believes that the benefits of the five operating rules summarized

134

Federal Reserve Bulletin • February 1997

For those reasons, and based on all the facts of record,
the Board concludes that consummation of the proposals
would not have a significantly adverse effect on competition in any relevant market.
Public Benefits
Section 4(c)(8) of the BHC Act requires that, in order to
approve a proposal, the Board must determine that the
public benefits reasonably to be expected from the proposal would outweigh potential adverse effects. This is a
balancing process that takes into account the extent of the
potential for adverse effects, which, for the reasons indicated above, the Board does not believe to be significant in
this case.
Consumers would benefit from the added account availability and convenience resulting from the consummation
of these proposals. In particular, an ATM network with a
larger number of financial institution members and available ATMs has greater value to network cardholders, because they would have broader and more convenient access to their deposit accounts. In this case, the geographic
territory covered by a network in the Southeast Region
would expand significantly, and, accordingly, the benefits
to consumers in this area of the country would be enhanced, particularly as consumers travel increasingly and
business activity continues to grow.24
Furthermore, as noted above, the proposed joint venture
would offer services to all financial institutions, and smaller
financial institutions would have the opportunity to provide
their customers with greater access to their deposit accounts. Membership in Company's network would thereby
enable smaller financial institutions to compete with larger,
multi-state organizations for retail deposit funds without
the necessity of making substantial investments in branch
systems or their own proprietary ATM networks.
Consummation of these proposals would result in other
public benefits. For example, the proposal is expected to
produce economies of scale and reduce average costs for
the combined network.25 The Board expects that a portion

above are important considerations in its determination to approve
these proposals. Accordingly, Company must notify the Board if
Company does not adopt those operating rules substantially as proposed so the Board can determine whether the rules as adopted affect
the Board's consideration of the factors in this case.
24. See generally Schiller, "The Travel Market in the United States
and the Third District," Business Review of the Federal Reserve Bank
of Philadelphia, pages 11-21 (September-October 1996) (demonstrating increases in aggregate travel during the period from 1984 to
1994). Moreover, available evidence indicates that the benefits of
ubiquity have continued to grow over time as ATM networks have
consolidated. In particular, the number and percentage of interchange
transactions—in which consumers access their accounts through terminals not deployed by their own financial institutions—have increased markedly in recent years. See generally Bank Network News
(1988-1995).
25. The MOST and ALERT networks do not provide switching and
processing services directly to their members. HONOR provides
switching and processing services directly to its members and currently maintains some excess capacity in its system. The record




of these cost savings would be passed on to member
financial institutions, and to consumers, in the form of
lower fees. 26 The record also indicates that Company plans
to increase research and development expenditures over
the levels budgeted by the constituent networks in the past.
The broader ownership base of Company should improve
the probability of success for new products by increasing
the number of financial institutions that would be willing to
introduce these products to consumers in earlier stages of
development.
For the foregoing reasons, and after careful consideration of all the facts of record, the Board has concluded
that the balance of the public interest factors it must
consider under the proper incident to banking standard of
section 4(c)(8) of the BHC Act is favorable and consistent
with approval of these proposals.
Conclusion
Based on all the facts of record, the Board has determined
that the notices should be, and hereby are, approved. The
Board's approval is specifically conditioned on Applicants'
compliance with the commitments made in connection
with these notices and 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 225.7 and 225.23(g) of Regulation Y (12 C.F.R.
225.7 and 225.23(g)), 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, the 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

indicates that HONOR'S marginal costs to provide switching services
are substantially lower than the prices charged to MOST and ALERT
by a third-party provider of these services. Hence, increased transaction volume for the HONOR switch and the elimination of costs
attributable to the current outsourcing of services for MOST and
ALERT network transactions would be likely to allow Company to
realize economies of scale and to reduce average costs for the combined network. The transactional cost savings for Company could be
substantial, even after taking into account the added capital, conversion, and operating costs that would be incurred in expanding Company's network processing capacity and utilization.
The Board also notes that, due to the large market share of the third
party performing switching services for MOST and ALERT network
transactions, the conversion of transaction volume from the thirdparty switch to the HONOR switch could increase competition in this
product market.
26. See McAndrews, "Retail Pricing of ATM Network Services,"
Working Paper No. 96-4, April 1996, Federal Reserve Bank of
Philadelphia (indicating that network fees and consumer prices are
lower in larger EFT networks).

Legal Developments

the Federal Reserve Bank of Atlanta or the Federal Reserve Bank of Richmond, acting pursuant to delegated
authority.
By order of the Board of Governors, effective December 9, 1996.
Voting for this action: Chairman Greenspan and Governors Kelley,
Lindsey, Phillips, Yellen, and Meyer. Absent and not voting:
Vice Chair Rivlin.
JENNIFER J. JOHNSON

Deputy Secretary of the Board

Appendix A
List of Activities

(1) ATM access and network services;
(2) On-line and off-line POS access and network services;
(3) Point of banking services that will permit customers to
conduct transactions similar to those available at ATM
terminals with the help of a third party;
(4) Scrip services, in which a customer receives a voucher
(scrip) that is redeemable for cash at a retail register;
(5) Gateway services, by which Company will route transaction requests for participants between the Company's
network and other EFT networks;
(6) Group purchasing, in which Company will purchase
EFT-related supplies for the benefit of network participants;
(7) ATM terminal driving services, in which Company's
terminal driving data processing system will operate, monitor, and otherwise control ATMs for participating financial
institutions and other ATM owners;
(8) POS terminal driving services, in which Company's
POS terminal driving data processing system will operate,
monitor, and otherwise control POS terminals of customers
under contract with Company;
(9) Transaction authorization services;
(10) Card production, issuance, and related activities, including ordering and embossing cards, encoding information on cards, generating and assigning personal identification numbers, providing emergency card issuance services,
maintaining cardholder records, distributing marketing materials and notices, and providing special card handling and
related services;
(11) Electronic benefit transfer services;
(12) Automated clearinghouse processing services;
(13) Home banking and bill payment services;
(14) Proprietary ATM services for non-financial entities, in
which Company will provide all ATM services discussed
above to non-financial entities; and
(15) Private financial network services, in which Company
will provide telecommunication links between Company's
EFT processing systems and the data processing systems
of its customers.




135

Appendix B
Asset and Deposit Data as of June 30, 1996
Barnett Banks, Inc., with approximately $41.8 billion in
total consolidated assets, is the 13th largest commercial
banking organization in the United States, controlling
$34.6 billion in deposits. Barnett operates subsidiary banks
in Florida and Georgia.
Crestar Financial Corporation, with approximately
$18.5 billion in total consolidated assets, is the 40th largest
commercial banking organization in the United States,
controlling $11.7 billion in deposits. Crestar operates subsidiary banks in Virginia, Maryland, and the District of
Columbia.
First Union Corporation, with approximately $139.9 billion in total consolidated assets, is the sixth largest commercial banking organization in the United States, controlling $90 billion in deposits. First Union operates subsidiary
banks in Connecticut, Delaware, the District of Columbia,
Florida, Georgia, Maryland, North Carolina, Pennsylvania,
South Carolina, Tennessee, and Virginia.
NationsBank Corporation, with approximately $192.3 billion in total consolidated assets, is the fifth largest commercial banking organization in the United States, controlling
$98.4 billion in deposits. NationsBank operates subsidiary
banks in North Carolina, Delaware, the District of Columbia, Florida, Georgia, Kentucky, Maryland, New Mexico,
South Carolina, Tennessee, Texas, and Virginia.
Southern National Corporation, with approximately
$20.6 billion in total consolidated assets, is the 32d largest
commercial banking organization in the United States,
controlling $14.7 billion in deposits. Southern National
operates subsidiary banks in North Carolina, South Carolina, and Virginia.
Wachovia Corporation, with approximately $46 billion
in total consolidated assets, is the 31st largest commercial
banking organization in the United States, controlling
$25.1 billion in deposits. Wachovia operates subsidiary
banks in North Carolina, South Carolina, Georgia, and
Delaware.

Royal Bank of Canada
Montreal, Canada
Norwest Corporation
Minneapolis, Minnesota
Stichting Prioriteit ABN AMRO Holding
Stichting Administratiekantoor ABN AMRO Holding
ABN AMRO Holding N.V.
ABN AMRO Bank N.V.
All of Amsterdam, The Netherlands
ABN AMRO North America, Inc.
Chicago, Illinois

136

Federal Reserve Bulletin • February 1997

Order Approving Notices to Engage in Nonbanking
Activities

Royal Bank of Canada, Montreal, Canada, a foreign banking organization that is subject to the Bank Holding Company ("BHC") Act; Norwest Corporation, Minneapolis,
Minnesota; Stichting Prioriteit ABN AMRO Holding,
Stichting Administratiekantoor ABN AMRO Holding,
ABN AMRO Holding N.V., ABN AMRO Bank N.V., and
ABN AMRO North America, Inc., bank holding companies within the meaning of the BHC Act, have requested
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) each to acquire more than
5 percent of the voting interests in Integrion Financial
Network, LLC, White Plains, New York ("Integrion"),
and thereby engage in data processing and data transmission activities pursuant to section 225.25(b)(7) of the
Board's Regulation Y (12 C.F.R. 225.25(b)(7)).1
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 54,441 (1996)). The time for filing
comments has expired, and the Board has considered the
notice and all comments received in light of the factors set
forth in section 4(c)(8) of the BHC Act.
RBC, with total consolidated assets of approximately
$131.6 billion,2 is the largest commercial banking organization in Canada, and operates a branch in New York, New
York; agencies in Los Angeles, California, and Miami,
Florida; and a representative office in Chicago, Illinois.
Norwest, with total consolidated assets of $77.8 billion,3
is the 12th largest commercial banking organization in the
United States, and controls banks in Minnesota and
14 other states.
ABN AMRO, with total consolidated assets of
$339.4 billion, is the largest commercial banking organization in the Netherlands, and controls seven depository
institutions in Illinois and one commercial bank in New
York. ABN AMRO Bank N.V. also operates branches in
Boston, Massachusetts; Chicago, Illinois; New York, New
York; Pittsburgh, Pennsylvania; and Seattle, Washington;
and agencies in Atlanta, Georgia; Miami, Florida; Houston, Texas; and Los Angeles and San Francisco, California.
Each Notificant also engages in a number of nonbanking
activities in the United States.

1. Royal Bank of Canada ("RBC"), Norwest Corporation ("Norwest") and Stichting Prioriteit A B N AMRO Holding ("ABN
AMRO") and its subsidiaries listed above are hereafter collectively
referred to as "Notificants".
2. Except as otherwise noted, asset and ranking data are as of
December 31, 1995, and use exchange rates then in effect.
3. Asset and ranking data for Norwest are as of June 30, 1996.




Proposed

Activities

Integrion is a joint venture among Notificants, 12 national
banks, one savings and loan holding company,4 and Gemini Management Corporation, a subsidiary of International
Business Machines Corporation ("IBM"). Integrion will
design, develop, and operate a data processing and transmission system through which depository institutions and
their affiliates would make available home banking and
other financial services to their respective customers. Integrion will not itself provide home banking or other financial services. Instead, the data processing and data transmission system ("gateway") Integrion designs and
operates will serve as a switch or interface, electronically
connecting customers of member depository institutions
with the member depository institutions themselves.5
Customers would connect to Integrion's gateway, and
thus a member depository institution, using a variety of
devices, including personal computers ("PCs"), touchtone telephones, or other electronic communication devices.6 Once a customer is connected to the gateway, Integrion
would electronically route and connect the customer to the
appropriate member depository institution, using software
developed by Integrion that would facilitate communications between the customer's PC (or other device) and the
depository institution's hardware and software.7 In this
manner, the Integrion gateway will provide customers with
access to the menu of electronic banking and financial
services offered by their respective member depository
institutions, including remote banking services;8 bill-

4. The following national banks would become members of Integrion on consummation of the proposal: Bank of America NT & SA;
NationsBank, N.A.; KeyBank, N.A.; Bank One, Columbus, N.A.;
Mellon Bank, N.A.; Barnett Bank, N.A.; First Bank N.A.; PNC Bank,
N.A; Michigan National Bank; The First National Bank of Chicago;
Comerica Bank-Ann Arbor, N.A.; and Fleet National Bank. Each of
these national banks has applied to the Office of the Comptroller of the
Currency to invest in Integrion through an operating subsidiary of the
bank. Washington Mutual Inc., a savings and loan holding company,
also would become a member of Integrion and has provided notice of
its intent to invest in Integrion to the Office of Thrift Supervision.
5. Notificants do not currently anticipate that Integrion's facilities
would be used by member depository institutions to store customer
account data. Notificants do expect that Integrion would store limited
amounts of data related to transactions conducted through the gateway, such as information relating to bill payment instructions transmitted to member depository institutions. Integrion is permitted to store
and transmit data to the extent permissible under section 225.25(b)(7)
of the Board's Regulation Y. 12 C.F.R. 225.25(b)(7).
6. Customers using a PC may connect to the Integrion gateway
through dedicated, private communications networks; through personal financial software programs; or through the Internet.
7. Integrion has contracted with IBM to provide the telecommunications and data network infrastructure necessary for Integrion to electronically link member depository institutions with their customers.
Under this contract, communications between Integrion and member
depository institutions will be transmitted through an existing, proprietary IBM telecommunications and data network.
8. It is expected that the remote banking services offered by a
member depository institution would include the ability to gain access
to account information, transfer funds between accounts, obtain information on available loan or deposit products, apply for a loan,

Legal Developments

payment functions; and access to stock quotations.9
The proposed activities appear to be data processing and
transmission activities that are permissible for bank holding companies under section 4(c)(8) of the BHC Act and
section 225.25(b)(7) of the Board's Regulation Y. The
Board previously has determined by regulation that certain
data processing and transmission activities are closely related to banking and therefore permissible for bank holding
companies under section 4(c)(8) of the BHC Act. Regulation Y permits bank holding companies to provide data
processing and transmission services, facilities, data bases,
or access to such services, facilities, or data bases by any
technological means, if the data to be processed or furnished are financial, banking, or economic in nature.10
Regulation Y also provides that bank holding companies
may engage in incidental activities that are necessary to
carry on an activity that is closely related to banking.11
Internet Access
In addition to providing these services, Integrion's gateway
will provide customers of member depository institutions
with a means of connecting to the Internet, a nonproprietary computer network that contains significant
amounts of data that are not financial, banking, or economic in nature.12 As an accommodation to its member
depository institutions and their customers, Integrion proposes to provide an electronic link to an Internet access
provider.13

establish additional accounts, order checks, or communicate electronically with a customer service representative.
9. The individual banking and financial services that a customer
would be able to gain access to through Integrion's gateway would
depend on the products offered by the member depository institution.
Such products and services would be offered by the member depository institution in its own name, and would be displayed to the
customer using the graphics, logo, and service marks chosen and
developed by the depository institution. Thus, it would appear to
customers connecting to their depository institutions through the
Integrion gateway that they are connected directly to the depository
institution, and the data processing and transmission services provided
by Integrion would be essentially transparent to consumers.
10. See 12 C.F.R. 225.25(b)(7); see also Cardinal Bancshares, Inc.,
82 Federal Reserve Bulletin 674 (1996); and The Royal Bank of
Canada, 82 Federal Reserve Bulletin 363 (1996) (bank holding companies may provide data processing and transmission services to
financial institutions for purposes of allowing such institutions to offer
electronic banking, bill payment, and stock quotation services). Notificants must provide these financial data processing and transmission
services through Integrion in accordance with the limitations set forth
in section 225.25(b)(7) of Regulation Y.
11 .See 12 C.F.R. 225.21(a)(2).
12. Notificants must consult with the Federal Reserve System prior
to providing, through Integrion, data processing or transmission services to any non-depository organization, or providing access to
non-financial databases other than as described in this order, in order
to permit the System to determine whether such activities are permissible under section 4 of the BHC Act and Regulation Y.
13. Integrion could, for example, provide access to the Internet
through an electronic link to IBM's proprietary network, which maintains connections to a wide variety of public and proprietary databases
and computer networks, or to other Internet access providers.




137

The Board previously has permitted bank holding companies providing permissible data processing and transmission services to financial institutions to process and transmit a limited amount of nonfinancial data for such
institutions as an incidental activity.14 Notificants contend
that member depository institutions desire to offer Internet
access to their customers in order to make their package of
banking and financial services more marketable, and to
permit the institutions to compete more effectively with
nonbank financial service providers. Notificants have indicated that providing Internet access to customers of member depository institutions would constitute a small part of
Integrion's overall data processing and transmission activities,15 and would not require modification of the gateway's
capabilities or systems. In addition, as noted above, Integrion would provide Internet access only as an accommodation to its member depository institutions, which in turn
would offer Internet access to their customers only as part
of a broader package of banking or financial services. In
light of the foregoing, and based on all the facts of record,
the Board has concluded that Integrion's provision of Internet access to customers of its member depository institutions is incidental to its permissible data processing and
transmission activities.
Other Considerations
In order to approve this notice, the Board also must find
that the performance of the proposed activities by Integrion
"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."16 As part of the Board's evaluation of
these factors, the Board considers the financial and managerial resources of the notificants and their subsidiaries and
the effect the transaction would have on such resources.17
The Board notes that the capital ratios of Norwest and
ABN AMRO North America, Inc. meet applicable riskbased capital standards and that each of the foreign bank
Notificants maintains capital equivalent to the capital
levels that would be required of a U.S. banking organization. Based on all the facts of record, the Board has
concluded that financial and managerial considerations are
consistent with approval.

14. See BNCCORP, INC., 81 Federal Reserve Bulletin 295 (1995);
see also First National of Nebraska, Inc., 82 Federal Reserve Bulletin
82 (1996).
15. Notificants expect that less than 10 percent of Integrion's
revenues would be derived from providing Internet access to customers of member depository institutions. Notificants have committed that
Integrion will provide nonfinancial data processing and transmission
services in accordance with the limitations in Regulation Y and
relevant Board orders.
16. 12 U.S.C. § 1843(c)(8).
17. 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).

138

Federal Reserve Bulletin • February 1997

The Board believes that consummation of the proposal
would enhance consumer convenience by expanding the
availability of remote banking services and by making
these services available in new ways. Consummation of the
proposal would permit member depository institutions and
their affiliates to deliver remote banking services to their
customers more efficiently, and would establish a joint
venture that pools the resources of a number of banking
organizations for the purpose of developing data processing and transmission systems that would facilitate the
creation and distribution of additional remote banking
products that respond to consumer needs. In addition, the
communications gateway operated by Integrion would allow member depository institutions and their affiliates to
make existing remote banking services available to consumers through additional means, such as through personal
financial software programs, screen phones, and the public
Internet. There is no evidence in the record to indicate that
consummation of the proposal would result in any significantly adverse effects, such as undue concentration of
resources, decreased or unfair competition,18 conflicts of
interests, or unsound banking practices, that are not outweighed by the public benefits of this proposal.19 On the
basis of the foregoing and all the facts of record, the Board
has concluded that the public benefits reasonably to be
expected from Integrion's proposed activities outweigh
any possible adverse effects from the proposal, and, therefore, that the activities are a proper incident to banking
under section 4(c)(8) of the BHC Act.
Conclusion
Based on the foregoing and all the facts of record, including the commitments discussed in this order and all other
commitments and representations made by Notificants in
connection with the notices, and subject to the terms and
conditions set forth in this order, the Board has determined
that the notices should be, and hereby are, approved. The
Board's determination is subject to all the conditions set
forth in Regulation Y, including those in sections 225.7 and

18. The Board notes that, pursuant to the terms of Integrion's
charter, Notificants and other members of Integrion will remain free to
compete with each other and Integrion in the development and marketing of data processing and transmission networks similar to the
Integrion gateway, as well as remote banking and other financial
services.
19. In considering the public interest factors in this case, the Board
has carefully considered the measures that Integrion and member
financial institutions will take to protect the account data and other
financial information that will be transmitted through the gateway
from electronic interception, interference, or fraud. The Board previously has noted that the nature of the risks associated with providing
electronic banking services is not different from those associated
with more traditional forms of banking. See Cardinal Bancshares,
Inc., 82 Federal Reserve Bulletin 674, 676 (1996). Among other
security measures, Integrion and member depository institutions will
use log-in passwords and encryption procedures to attempt to maintain the privacy and integrity of data transmitted. In addition, as part
of its operations, Integrion will transmit data to member institutions
through a private communications network.




225.23(g) of Regulation Y (12 C.F.R. 225.7 and
225.23(g)), 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 Board's decision is specifically conditioned on Notificants' compliance
with the commitments made in connection with this notice
and the conditions discussed in this order. The commitments and conditions relied on in reaching this decision
shall be 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.
By order of the Board of Governors, effective December 2, 1996.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Lindsey, Phillips, and Meyer. Absent and not
voting: Governor Yellen.
JENNIFER J. JOHNSON

Deputy Secretary of the Board

Stichting Prioriteit ABN AMRO Holding
Stichting Administratiekantoor ABN AMRO
Holding
ABN AMRO Holding N.V.
ABN AMRO Bank N.V.
All of Amsterdam, The Netherlands
Order Approving Notice to Engage in Certain
Nonbanking Activities, Including Underwriting and
Dealing in All Types of Debt and Equity on a Limited
Basis, and Certain Other Securities- and
Derivatives-Related Activities
Stichting Prioriteit ABN AMRO Holding, Stichting Administratiekantoor ABN AMRO Holding, ABN AMRO
Holding N.V., and ABN AMRO Bank N.V., all of Amsterdam, The Netherlands (collectively, "Notificants"), bank
holding companies within the meaning of the Bank Holding Company ("BHC") Act, have requested 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 acquire all the voting securities of ChiCorp Inc., Chicago, Illinois ("ChiCorp"), and
thereby engage in a wide range of nonbanking activities,
including securities- and derivatives-related activities.
Notificants have applied to engage in the following
nonbanking activities throughout the United States, and
propose to provide the following services worldwide:
(1) Making, acquiring, and servicing loans and other
extensions of credit for their own account and for the
account of others, pursuant to section 225.25(b)(1) of
the Board's Regulation Y;

Legal Developments

(2) Providing various types of investment and financial
advisory services, pursuant to section 225.25(b)(4) of
Regulation Y;
(3) Leasing personal or real property or acting as agent,
broker, or adviser in leasing such property, pursuant to
section 225.25(b)(5) of Regulation Y;
(4) Operating an automated front-end securities order
entry system, and thereby providing to others data processing and data transmission services, facilities and
data bases, and access to such services, facilities and
data bases, for the processing, transmission or storage of
financial, banking, or economic data, pursuant to section 225.25(b)(7) of Regulation Y;
(5) Conducting discount and full-service brokerage activities, pursuant to section 225.25(b)(15) of Regulation Y;
(6) Underwriting and dealing in obligations of the United
States and other obligations that state member banks
may underwrite and deal in under 12 U.S.C. §§ 335
and 24(7) ("bank-eligible securities"), pursuant to section 225.25(b)(16) of Regulation Y;
(7) Acting as a futures commission merchant ("FCM")
for nonaffiliated persons in the execution and clearance
on major commodity exchanges of futures contracts and
options on futures contracts based on bullion, foreign
exchange, government securities, or certificates of deposit or other money market instruments that a bank
may buy or sell in the cash market for its own account,
and providing investment advice with respect to such
contracts as an FCM or a commodity trading advisor
("CTA"), pursuant to sections 225.25(b)(18) and (19) of
Regulation Y;
(8) Underwriting and dealing in, to a limited extent, all
types of debt and equity securities other than interests in
open-end investment companies ("bank-ineligible securities");
(9) Buying and selling all types of debt and equity
securities on the order of customers as a "riskless principal" and acting as agent in the private placement of all
types of debt and equity securities;
(10) Trading for their own account, for purposes other
than hedging, and for the account of customers in gold
and silver bullion, bars, rounds and coins, and platinum
and palladium coin and bullion;
(11) Trading for their own account in foreign exchange
spot, forward, futures, options, and options on futures
contracts, and providing transaction and advisory services to nonaffiliated customers with respect to such
foreign exchange-related instruments;
(12) Acting as an FCM for nonaffiliated persons in the
execution and clearance on major commodity exchanges
of futures and options on futures contracts based on
bonds or other debt instruments, certain commodities,
and stock, bond, or commodity indices, and providing
investment advice, including discretionary management
services, with respect to such contracts;
(13) Providing execution-only and clearing-only services for options on securities to institutional customers;




139

(14) Providing clearing-only services for futures and
options on futures contracts to, and serving as the primary clearing firm for, certain professional floor traders
on the Kansas City Board of Trade ("KCBOT") and the
Minneapolis Grain Exchange ("MGE"); and
(15) Providing brokerage services with respect to forward contracts for the delivery of certain financial and
nonfinancial commodities.
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 41,413 (1996)). The time for filing
comments has expired, and the Board has considered the
notice and all comments received in light of the factors set
forth in section 4(c)(8) of the BHC Act.
Stichting Prioriteit ABN AMRO Holding, with total
consolidated assets of $339.4 billion,1 is the largest commercial banking organization in the Netherlands. Notificants control seven depository institutions in Illinois and
one commercial bank in New York. ABN AMRO Bank
N.V. also operates branches in Boston, Massachusetts;
Chicago, Illinois; New York, New York; Pittsburgh, Pennsylvania; and Seattle, Washington; and agencies in Atlanta,
Georgia; Miami, Florida; Houston, Texas; and Los Angeles
and San Francisco, California.
ChiCorp and its principal subsidiary, The Chicago Corporation, Chicago, Illinois ("TCC"), engage worldwide in
a wide range of investment advisory, securities underwriting, and futures-related activities. Notificants propose to
merge TCC with and into Notificants' existing section 20
subsidiary, ABN AMRO Securities (USA) Inc., Chicago,
Illinois ("Company").2 TCC and Company are, and Company will continue to be, broker-dealers registered with the
Securities and Exchange Commission ("SEC") under the
Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.)
and a member of the National Association of Securities
Dealers ("NASD"). In addition, TCC is, and Company
would become, registered as an FCM and CTA with the
Commodity Futures Trading Commission ("CFTC") under the Commodity Exchange Act (7 U.S.C. § 1 et seq.)
and a member of the National Futures Association
("NFA"). Accordingly, Company will be subject to the
recordkeeping and reporting obligations, fiduciary standards, and other requirements of the Securities Exchange
Act, the Commodity Exchange Act, the SEC, CFTC,
NASD and NFA.
Activities Previously Approved by the Board
Activities Approved by Regulation—The Board previously
has determined by regulation that certain of the proposed
lending, investment and financial advisory, leasing, data
processing, securities brokerage, bank-eligible underwrit-

1. Asset and ranking data are as of December 31, 1995, and use
exchange rates then in effect.
2. See Stichting Prioriteit ABN AMRO Holding, 81 Federal Reserve
Bulletin 182 (1995).

140

Federal Reserve Bulletin • February 1997

ing and dealing, and FCM and futures advisory services are
so closely related to banking as to be proper incidents
thereto within the meaning of section 4(c)(8) of the BHC
Act.3 Except as discussed below, Notificants have committed that these activities will be conducted within the limitations established by Regulation Y and the Board's orders
related to these activities.
Bank-Ineligible Underwriting and Dealing Activities —
The Board has determined that, subject to the prudential
framework of limitations established in previous decisions
to address the potential for conflicts of interests, unsound
banking practices, or other adverse effects, the proposed
activities of underwriting and dealing in bank-ineligible
securities are so closely related to banking as to be a proper
incident thereto within the meaning of section 4(c)(8) of
the BHC Act.4 Notificants have committed that Company
will conduct the proposed underwriting and dealing activities using the same methods and procedures and subject to
the same prudential limitations established by the Board in
the Section 20 Orders.5
The Board also has determined that the conduct of these
securities underwriting and dealing activities is consistent
with section 20 of the Glass-Steagall Act (12 U.S.C.
§ 377), provided that the company engaged in the underwriting and dealing activities derives no more than 10
percent of its total gross revenue from underwriting and
dealing in bank-ineligible securities over any two-year

3. See 12 C.F.R. 225.25(b)(1), (4), (5), (7), (15), (18) and (19). As
part of its securities brokerage activities, Company would provide
execution-only and clearing-only services with respect to securities to
institutional customers. Company will provide clearing-only services
with respect to securities only if Company has the ability and the right
to reject a trade given to Company for clearance for any reason. As
discussed further below, the Board has separately considered Notificants' requests to provide clearing-only services to professional floor
traders and with respect to options on securities.
4. See Canadian Imperial Bank of Commerce, et al., 76 Federal
Reserve Bulletin 158 (1990); J.P. Morgan & Co. Incorporated, et al.,
75 Federal Reserve Bulletin 192 (1989), aff'd sub nom. Securities
Industry Ass'n v. Board of Governors of the Federal Reserve System,
900 F.2d 360 (D.C. Cir. 1990); Citicorp, et al., 73 Federal Reserve
Bulletin A13 (1987), aff'd sub nom. Securities Industry Ass'n v. Board
of Governors of the Federal Reserve System, 839 F.2d 47 (2d Cir.
1988), cert, denied, 486 U.S. 1059 (1988); as modified by Review of
Restrictions on Director, Officer and Employee Interlocks, CrossMarketing Activities, and the Purchase and Sale of Financial Assets
Between a Section 20 Subsidiary and an Affiliated Bank or Thrift,
82 Federal Reserve Bulletin 1113 (1996) (Order dated October 30,
1996) (collectively, "Section 20 Orders").
5. To address potential conflicts of interests arising from Company's
conduct of full-service brokerage activities along with underwriting
and dealing in bank-ineligible securities, Notificants have committed
that Company will inform its full-service brokerage customers at the
commencement of the relationship that, as a general matter, Company
may be a principal or may be engaged in underwriting with respect to,
or may purchase from an affiliate, those securities for which brokerage
and advisory services are provided. In addition, at the time any
brokerage order is taken, the customer will be informed (usually
orally) whether Company is acting as agent or principal with respect
to a security. Confirmations sent to customers also will state whether
Company is acting as agent or principal. See PNC Financial Corp.,
75 Federal Reserve Bulletin 396 (1989).




period.6 Notificants have committed that Company will
conduct its underwriting and dealing activities in bankineligible securities subject to the 10-percent revenue test.7
Private Placement and "Riskless Principal" Activities—
Private placement involves the placement of new issues of
securities with a limited number of sophisticated purchasers in a nonpublic offering. A financial intermediary in a
private placement transaction acts solely as an agent of the
issuer in soliciting purchasers and does not purchase the
securities and attempt to resell them. Securities that are
privately placed are not subject to the registration requirements of the Securities Act of 1933, and are offered only to
financially sophisticated institutions and individuals and
not to the public. Company will not privately place registered securities and will only place securities with customers that qualify as accredited investors.
"Riskless principal" is the term used in the securities
business to refer to a transaction in which a broker-dealer,
after receiving an order to buy (or sell) a security for a
customer, purchases (or sells) the security for its own
account to offset a contemporaneous sale to (or purchase
from) the customer.8 Riskless principal transactions are
understood in the industry to include only transactions in
the secondary market. Thus, Company would not act as a
riskless principal in selling bank-ineligible securities at the
order of a customer that is the issuer of the securities to be
sold, or in any transaction where Company has a contractual agreement to place the securities as agent of the issuer.
Company also would not act as a riskless principal in any
transaction involving a bank-ineligible security for which it
or an affiliate makes a market.
The Board has determined that, subject to the limitations
established by the Board in prior orders, the proposed
private placement and riskless principal activities are so
6. See Section 20 Orders. Compliance with the 10-percent revenue
limitation shall be calculated in accordance with the method stated in
the Section 20 Orders, as modified by the Order Approving Modifications to the Section 20 Orders, 75 Federal Reserve Bulletin 751
(1989); the Order Approving Modifications to the Section 20 Orders,
79 Federal Reserve Bulletin 226 (1993); the Supplement to Order
Approving Modifications to Section 20 Orders, 79 Federal Reserve
Bulletin 360 (1993); and 10 Percent Revenue Limit on Bank-Ineligible
Activities of Subsidiaries of Bank Holding Companies Engaged in
Underwriting and Dealing Securities, 82 Federal Reserve Bulletin
1008 (1996) (Order dated September 11, 1996) (collectively, "Modification Orders"). The Board notes that Notificants have not adopted
the Board's alternative indexed-revenue test to measure compliance
with the 10-percent limitation on bank-ineligible securities activities,
and, absent such election, Notificants will continue to employ the
Board's original 10-percent revenue test.
7. The Board also notes that Company may engage in activities that
are necessary incidents to the proposed underwriting and dealing
activities, provided that they are treated as part of the bank-ineligible
securities activities, unless Company has received specific approval
under section 4(c)(8) of the BHC Act to conduct the activities independently. Until such approval is obtained, any revenues from the incidental activities must be counted as ineligible revenues subject to the
10-percent revenue limitation.
8. See SEC Rule 10b-10(a)(8)(i) (17 C.F.R. 240.10b-10(a)(8)(i)).
The Board notes that Company, as a registered broker-dealer, must
conduct its riskless principal activities in accordance with the customer disclosure and other requirements of the federal securities laws.

Legal Developments

closely related to banking as to be a proper incident thereto
within the meaning of section 4(c)(8) of the BHC Act.9
The Board also has determined that acting as agent in the
private placement of securities, and purchasing and selling
securities on the order of investors as a riskless principal,
do not constitute underwriting and dealing in securities for
purposes of section 20 of the Glass-Steagall Act, and that
revenue derived from these activities is not subject to the
10-percent revenue limitation on bank-ineligible securities
underwriting and dealing.10
Notificants have committed that Company will conduct
its private placement activities using the same methods and
procedures and subject to the same prudential limitations
as those established by the Board in Bankers Trust and J.P.
Morgan,n including the comprehensive framework of restrictions imposed by the Board in connection with underwriting and dealing in bank-ineligible securities, which
were designed to avoid potential conflicts of interests,
unsound banking practices, and other adverse effects.12
Notificants also have committed that Company will conduct its riskless principal activities subject to the limitations previously established by the Board.13

9. See J.P. Morgan & Company Incorporated, 76 Federal Reserve
Bulletin 26 (1990) ("J.P. Morgan"); Bankers Trust New York Corporation, 75 Federal Reserve Bulletin 829 (1989) ("Bankers Trust").
10. See Bankers Trust.
11. Among the prudential limitations discussed more fully in Bankers Trust and J.P. Morgan are that Company will not privately place
open-end investment company securities or securities of investment
companies that are advised by Notificants or any of their affiliates. In
addition, Company will make no general solicitation or general advertising for securities it places.
12. Notificants have indicated that Company may purchase, for its
own account, a portion of the securities that it privately places.
Notificants have committed that if Company purchases for its own
account any securities that it privately places, Company will treat all
revenue derived from the placement transaction as bank-ineligible
revenue subject to the 10-percent limitation. Company also proposes
to act as principal or agent in the resale of privately placed securities
through transactions that would be exempt from registration under the
Securities Act of 1933, such as, for example, resales to qualified
institutional buyers pursuant to Rule 144A under the Securities Act of
1933. Notificants have committed that, if Company acts as principal
with respect to any portion of such an unregistered resale transaction,
Company will treat the revenue derived from the entire transaction as
part of Company's bank-ineligible revenues subject to the 10-percent
revenue limitation.
13. See The Bank of New York Company, Inc., 82 Federal Reserve
Bulletin 748 (1996). Neither Company nor its affiliates will hold
themselves out as making a market in the bank-ineligible securities
that Company buys and sells as riskless principal, or enter quotes for
specific bank-ineligible securities in any dealer quotation system in
connection with Company's riskless principal transactions, except that
Company and its affiliates may enter bid or ask quotations, or publish
"offering wanted" or "bid wanted" notices on trading systems other
than NASDAQ or an exchange, if Company or the affiliate does not
enter price quotations on different sides of the market for a particular
security for two business days. In other words, Company or its affiliate
must wait at least two business days after entering a "bid" quote on a
security before entering an "ask" quote on the same security and vice
versa. Company will not act as riskless principal for registered investment company securities or for any securities of investment companies that are advised by Notificants or its affiliates. In addition,
because Company proposes to provide riskless principal services in




141

General Partnership Activities — Company proposes to
assume TCC's role as general partner and investment adviser to several limited partnerships ("Partnerships") that
invest in assets that a bank holding company is permitted
to own. 14 The Board previously has permitted bank holding
companies to serve as general partner and investment adviser for unregistered limited partnerships that invest in
securities.15 Notificants have committed that the proposed
activities would be conducted in accordance with limitations contained in the BHC Act and in previous Board
decisions.16 Notificants have committed, for example, that
the Partnerships, together with Notificants and their affiliates, will not control more than 5 percent of any class of
voting securities of any issuer without prior Board approval.17 Notificants also have committed that no directors,
officers, or employees of Notificants or their affiliates will
serve as directors, officers, or employees of any issuer of
which the Partnerships, Notificants and their affiliates hold
more than 10 percent of the total equity.18
Precious Metal and Foreign Exchange Activities — Notificants propose that Company trade in gold and silver
combination with investment advisory services, Company will conduct its riskless principal activities in accordance with the limitations
established by the Board for the full-service brokerage activities of
bank holding companies. See 12 C.F.R. 225.25(b)(15)(ii).
14. The Partnerships would not register as investment companies
under the Investment Company Act of 1940 (15 U.S.C. § 80a-1
et seq ). Each Partnership would be limited to not more than
100 investors. As general partner, Notificants may provide certain
administrative and advisory services to the partnership, including
monitoring the development of the limited partnerships' investments
in the portfolio companies, issuing reports to limited partners, administering cash flow, and distributing dividends.
15. See Meridian Bancorp, Inc., 80 Federal Reserve Bulletin 736
(1994) ("Meridian").
16. See Meridian. The Partnerships will not invest in futures contracts or options on futures contracts on any financial or nonfinancial
commodity, or knowingly acquire debt securities that are in default at
the time of acquisition, without prior approval from the Federal
Reserve System. In addition, Notificants have committed that they
will consolidate the Partnerships with other subsidiaries of Notificant
for purposes of calculating Notificants' capital adequacy whenever
such information is required to be presented to the Board of Governors. In consolidating the capital ratios, Notificants will exclude the
limited partners' investments and an equal amount of assets from the
numerator and denominator, respectively.
17. Notificants also have committed that the Partnerships will not
control more than 25 percent of the total equity, including subordinated debt, of any issuer without prior Board approval. In furtherance
of the commitments, Notificants have committed that they will monitor, on a system-wide basis, the holdings of the Partnerships and all
other entities controlled by Notificants.
18. Company also proposes to serve as investment adviser with
discretionary voting authority for several trusts established for pension fund customers that invest in banks and bank holding companies
("Bank Trusts"). Notificants must obtain the Board's approval under
the BHC Act before Notificants acquire in the aggregate control of
more than 5 percent of the voting shares of any bank or bank holding
company. In this regard, Notificants have committed that, in the event
that shares held by the Bank Trusts would cause the aggregate
holdings of the Bank Trusts, Notificants and any Partnership to exceed
5 percent of any class of voting securities of a bank or bank holding
company, Company will irrevocably transfer the voting rights associated with the securities held by the Bank Trusts to an unaffiliated
corporate trustee.

142

Federal Reserve Bulletin • February 1997

bullion, bars, rounds, and coins, and platinum and palladium bullion and coins for its own account and for the
account of customers. Notificants also propose that Company trade for its own account in foreign exchange spot,
forward, futures, options and options on futures transactions, and provide execution and limited advisory services
with respect to such instruments to unaffiliated customers.
The Board previously has determined that the proposed
precious metals activities are closely related to banking
and permissible for bank holding companies under section 4(c)(8) of the BHC Act. 19 The Board also previously
has approved the proposed foreign exchange-related activities subject to certain limitations,20 and Notificants have
committed that Company will conduct its foreign
exchange-related activities in accordance with the limitations established by the Board.21
Additional FCM and CTA Activities — Notificants also
propose that Company act as an FCM for, and provide
advisory services to, unaffiliated persons in connection
with the purchase and sale of futures and options on futures
based on bonds or other debt instruments, certain commodities, or stock, bond or commodity indices.22 Company's
FCM activities would include engaging in execution-only,
clearing-only and omnibus account activities with respect
to futures and options on futures based on financial and
nonfinancial commodities, and providing discretionary
portfolio management services with respect to futures and
options on futures on financial and nonfinancial commodities.23 Company would provide these additional futuresrelated execution-only, clearing-only and discretionary
portfolio management services only to institutional custom-

19. See The Bessemer Group, Incorporated, 82 Federal Reserve
Bulletin 569 (1996) (palladium coin and bullion); Swiss Bank Corporation, 81 Federal Reserve Bulletin 185 (1995) (platinum coin and
bullion); Midland Bank PLC, 76 Federal Reserve Bulletin 860 (1990)
(gold and silver bullion and coin). Company may engage in metal
assaying, storage and transport activities as an incident to its precious
metal trading activities. See Westpac Banking Corporation, 73 Federal Reserve Bulletin 61 (1987).
20. The Long-Term Credit Bank of Japan, Limited, 79 Federal
Reserve Bulletin 347 (1993) ("LTCB").
21. See LTCB. Company's foreign exchange-related advisory services will be limited to discussions regarding current market conditions, and will not be provided on a separate fee basis. In addition,
Company will not recommend that a customer purchase or sell particular foreign exchange instruments or contracts.
22. Company proposes to provide FCM and related advisory services with respect to certain futures contracts and options on futures
contracts that are based on indices that track estimated losses to the
insurance industry from catastrophic events. Notificants have stated
that Company's execution and advisory services with respect to such
contracts will not require Company to register as an insurance agent or
broker in any state.
23. Notificants have committed that Company would provide these
services in accordance with the limitations previously established by
the Board. See Northern Trust Corporation, 79 Federal Reserve
Bulletin 723 (1993) ("Northern Trust")-, Bank of Montreal, 79 Federal Reserve Bulletin 1049 (1993) ("Bank of Montreal"); and J.P.
Morgan & Co. Incorporated, 80 Federal Reserve Bulletin 151 (1994)
("1994 J.P. Morgan Order").




ers24 and certain sophisticated non-institutional commercial hedger customers.25
The Board previously has determined that Company's
proposed futures-related execution, clearing and advisory
activities, including its proposed clearing-only activities,
are so closely related to banking as to be proper incidents
thereto, provided that the activities are conducted in conformity with certain limitations and conditions designed to,
inter alia, ensure that the activities are consistent with safe
and sound banking practices and mitigate potential conflicts of interests.26 Notificants have committed that Company will conduct these additional FCM and advisory

24. For purposes of determining whether an individual meets the
$1 million net worth requirement for an institutional customer in
Regulation Y, Notificants will consider a parent's net worth to include
accounts of the parent's minor children if the parent has discretionary
authority over the account or the selection of the account's investment
manager. Furthermore, Notificants will consider a grantor trust to be
an institutional customer if:
(i) The grantor is the trustee or fiduciary of the trust with
discretionary authority over the trust's assets, and
(ii) The net worth of the grantor, including grantor trusts over
which it retains discretionary authority, exceeds $1 million.
25. Notificants have stated that all non-institutional commercial
hedger customers would be engaged, or affiliated with a commercial
enterprise engaged, in producing, manufacturing, processing or merchandising products or providing services related to the commodities
underlying the futures and options on futures contracts in which the
customer trades. In addition, such customers would not be engaged in
executing their own trades on the floors of commodity exchanges.
Notificants have committed that Company will:
(i) Require its non-institutional commercial hedger customers to
state in writing that they would engage in "bona fide hedging
transactions" as defined by the CFTC (see 17 C.F.R. 1.3(z));
(ii) Establish an initial credit review process to determine whether
the proposed hedging activities of a non-institutional commercial
hedger customer were appropriate in light of the customer's net
worth and business activities;
(iii) Not permit a non-institutional commercial hedger customer
to trade in any commodities other than those that the customer
would trade to hedge risks that arise from its commercial activities; and
(iv) Establish a system to detect any unauthorized trading activity
by a non-institutional commercial hedger customer. See Societe
Generale, 81 Federal Reserve Bulletin 880 (1995) ("Societe
Generale").
26. See Northern Trust (clearing-only services for financial futures
and maintenance of omnibus accounts); Bank of Montreal (execution
and clearing and clearing-only services for nonfinancial futures); 1994
J.P. Morgan Order (execution and advisory services on nonfinancial
futures); Banque Nationale de Paris, 81 Federal Reserve Bulletin 386
(1995) ("BNP") (discretionary portfolio management services for
financial futures); CS Holding, 81 Federal Reserve Bulletin 803
(1995) ("CS Holding") (discretionary portfolio management services
for non-financial futures); Societe Generale (financial and nonfinancial futures execution, clearing-only, and advisory services for noninstitutional commercial hedger customers). Because non-institutional
commercial hedger customers have special expertise in commodityrelated transactions, the Board previously has noted that such customers are capable of detecting conflicts of interest or advice that is
motivated by the bank holding company's self-interest, and are unlikely to rely unduly on commodity-related investment advice provided by a bank holding company. See Societe Generale.

Legal Developments

activities in accordance with the limitations established by
the Board in previous cases.27
Notificants also propose that Company provide clearingonly services to, and serve as the primary clearing firm for,
certain professional floor traders on the KCBOT and MGE
with respect to the futures contracts and options on futures
contracts traded on such exchanges.28 The Board previously has determined that providing clearing services with
respect to exchange-traded securities, options, futures, and
options on futures contracts is closely related to banking
within the meaning of section 4(c)(8) of the BHC Act. 29 In
1991, however, the Board denied an application by Notificants to engage de novo in providing the proposed services
to market makers and other professional floor traders dealing for their own accounts.30 The Board's decision in the
1991 ABN AMRO Order was based on the Board's conclusion that, at the time of the application, the applicants had
not sufficiently demonstrated that the potential public benefit of the proposed activity outweighed the financial risks
associated with serving as the primary clearing firm for
professional floor traders.31
In the 1991 ABN AMRO Order, the Board recognized
that a company serving as the primary clearing firm for
professional floor traders may be exposed to significant
financial risks because the company generally would not
27. Company also proposes to provide clearing-only services to
unaffiliated customers with respect to options on securities. Options
on securities are treated as securities for purposes of the federal
securities laws, and the Board has treated options on securities as
securities for purposes of the Glass-Steagall Act. See 15 U.S.C.
§ 77b(l), § 78c(a)(10); Swiss Bank Corporation, 82 Federal Reserve
Bulletin 685 (1996). The Board previously has determined that providing clearing services with respect to exchange-traded securities, options, futures, and options on futures contracts is closely related to
banking within the meaning of section 4(c)(8) of the BHC Act. See
Stichting Prioriteit ABN AMRO Holding, 11 Federal Reserve Bulletin
189 (1991) ("1991 AMRO Order"); BNP; Northern Trust. Company
will provide clearing-only services with respect to options on securities only to institutional customers and pursuant to agreements that
permit Company the right to review and reject any trade presented to
it for clearance for any reason. These commitments are similar to
those relied on by the Board in previous cases in which the Board
determined that providing clearing-only services with respect to
exchange-traded futures and options on futures is a proper incident to
banking within the meaning of section 4(c)(8) of the BHC Act. See
Northern Trust; Bank of Montreal.
28. ChiCorp currently serves as the primary clearing firm for
17 professional floor traders on the KCBOT and 34 professional floor
traders on the MGE. Because the number of professional floor traders
on these exchanges may vary over time depending on trading volume
and other factors, Notificants have requested authority for Company to
act as the primary clearing firm for up to 20 professional floor traders
on the MGE and 40 professional floor traders on the MGE.
29. See 1991 ABN AMRO Order; BNP; and Northern Trust.
30. See 1991 ABN AMRO Order.
31. A primary clearing firm is obligated to accept and clear all
trades submitted by a professional floor trader, even if the trade was
initially presented to, and rejected by, another clearing firm. Once a
primary clearing firm clears a trade for a professional floor trader, the
firm becomes obligated to settle the trade in the event of a default by
the professional floor trader. Particular exchanges may refer to companies serving as a primary clearing firm by different titles. For example,
the Chicago Mercantile Exchange refers to firms providing primary
clearing services as qualifying clearing firms.




143

have the ability to reject an executed trade presented to it
for clearance, even where the company believes the trade
presents unacceptable risks in light of market conditions or
the traders' financial position. The Board also noted that, at
the time of the application, the applicants lacked appropriate operational systems to track and manage the intra-day
risks arising from the trading activities of the floor traders.
This lack of a mechanism to monitor intra-day trading
activities presented the possibility that a professional floor
trader could incur substantial losses through the trading of
options or futures contracts, which the applicants would be
obligated to clear and guarantee, before the applicants
could act to mitigate their credit risk exposure.
Since 1991, the Board and bank holding companies have
gained substantial experience with the conduct, methods,
procedures, and regulation of clearing-only activities. Also,
the Board has authorized bank holding companies to provide clearing-only services with respect to futures contracts
and options on futures contracts for customers other than
professional floor traders, subject to certain conditions
designed to assure that the bank holding companies have
the ability to manage the attendant financial risks.32 In
particular, the bank holding companies agreed to provide
the clearing-only services pursuant to "give-up" agreements that provide the bank holding companies the right to
refuse to accept for clearance any customer trade that the
bank holding company deems unsuitable in light of market
conditions or a customer's financial situation or objective.33 In addition, the bank holding companies agreed to
establish procedures to monitor the intra-day trading activities and risk exposure of their clearing-only customers.
The facts of record in this case indicate that TCC has,
and Company will have, sufficient risk management policies, procedures, and systems to permit Notificants and
Company to adequately monitor and control the risks,
including the intra-day risks, associated with Company's
proposal to serve as the primary clearing firm for a limited
number of professional floor traders on the KCBOT and
MGE.34 Specifically, TCC establishes trading, credit, margin, and exposure limits for each professional floor trader
for which it serves as the primary clearing firm.35 Adherence to these limits is monitored on an intra-day basis by
experienced TCC personnel who are physically present on

32. See Northern Trust; Bank of Montreal.
33. The Board also noted that the rules of the applicable exchanges
provided the bank holding companies with sufficient time to review an
executed trade before determining whether to accept the trade for
clearance.
34. The Board received comments supporting Notificants' proposal
to provide clearing-only activities for professional floor traders from
The Options Clearing Corporation, the Board of Trade Clearing
Corporation, and the Chicago Board of Trade ("Commenters"). The
Commenters asserted that approval of the proposal would increase
competition in the futures markets and would not result in adverse
effects in light of the risk management systems that are utilized by
major futures exchanges and their clearing members.
35. Notificants have stated that Company will adopt the risk management policies, procedures, and systems used by TCC in connection
with its primary clearing activities.

144

Federal Reserve Bulletin • February 1997

the floor of the KCBOT and MGE.36 These TCC personnel
visually monitor the trading activities of floor traders on
the exchanges and review trades submitted by the floor
traders for clearance.37 If a TCC employee determines that
a floor trader is exceeding the limits established by TCC, or
is otherwise engaged in questionable trading activities, the
employee has the ability to limit or halt the floor trader's
activities, require the floor trader to post additional margin,
partially or entirely liquidate the floor trader's positions, or
immediately revoke the floor traders membership on the
exchange.38 The managers of TCC's operations on the
KCBOT and MGE also personally guarantee TCC against
any losses that TCC may incur from serving as the primary
clearing firm for floor traders on the exchanges, which
provides such personnel with an incentive to closely monitor the trading activities of the floor traders. Notificants
have stated that Company will install an on-line risk management system that will provide personnel in Chicago,
Kansas City, and Minneapolis with intra-day data on the
trading activities of professional floor traders on the
KCBOT and MGE, and that will permit such personnel to
analyze Company's exposure to such trading activities on
an intra-day basis.
The Board notes that the type of risk management systems necessary to appropriately manage the risks arising
from a particular activity necessarily depends on the scope
and nature of the proposed activity. Company proposes to
serve as the primary clearing firm for a limited number of
professional floor traders on two exchanges. These exchanges have relatively small trading areas and volumes,
which permits personnel on the floors of the exchanges to
monitor trading activity on the exchanges. The Federal
Reserve Bank of Chicago ("Reserve Bank") conducted an
on-site review of the operational and managerial infrastructure maintained by TCC in Chicago, Kansas City, and

36. TCC has four risk management employees who monitor trading
on the KCBOT, and three risk management employees who monitor
trading at the MGE.
37. Trades on the KCBOT and MGE are not electronically submitted to the clearing firm or the exchange. Instead, trading cards for each
trade are submitted by each professional floor trader to its clearing
firm, which enters the trade into the exchange's clearing system. Both
the KCBOT and the MGE require that TCC collect the trading cards
from each floor trader at least once during each half hour period,
thereby providing TCC personnel with an opportunity to review the
intra-day trading activities of floor traders. KCBOT rules also require
that TCC enter all collected trades into the exchange's on-line clearing
system within 45 minutes of the end of the half-hour period during
which the trades were collected. The KCBOT's on-line clearing
system also permits TCC to monitor the trading activities of floor
traders, both individually and in the aggregate, on an intra-day basis,
and allows TCC to identify any potentially unmatched trades. Although the MGE does not operate an on-line clearing system, TCC
personnel maintain tally sheets that are updated every 30 minutes and
that reflect all trades submitted by each professional floor trader
throughout the day.
38. TCC risk management personnel in Chicago also electronically
receive trade information four times a day from the KCBOT and at the
end of the day from the MGE. Reports based on such data are
prepared by risk management personnel and reviewed daily by officers
in Chicago, Kansas City, and Minneapolis.




Minneapolis to monitor and control the financial risks
associated with TCC's primary clearing activities on the
KCBOT and MGE. Based on this review and other facts of
record, the Board concludes that TCC has the managerial
and operational resources and systems adequately to monitor and control the financial risks arising from its role as
primary clearing firm on the KCBOT and MGE.
The record in this case also indicates that Notificants'
proposal to assume the clearing-only activities of ChiCorp
on the KCBOT and MGE, within the framework discussed
in this order, can reasonably be expected to produce public
benefits that outweigh possible adverse effects. The Board
notes that the KCBOT and MGE are small exchanges with
relatively low transaction volumes, and that ChiCorp
serves as the primary clearing firm for a significant percentage of the professional floor traders on such exchanges.
Notificants' proposal would permit Company to continue
providing primary clearing services to the professional
floor traders on the KCBOT and MGE that are currently
customers of TCC.
In light of all the facts of record, including the limited
nature of Company's proposed clearing-only activities for
professional floor traders, the commitments provided by
Notificants, and the operational and managerial systems
that Company will have in place to monitor and control the
risks arising from the proposed activities, the Board has
concluded that the credit and other risk considerations
associated with the proposed clearing-only activities for
professional floor traders on the KCBOT and the MGE are
consistent with approval of this notice and that, therefore,
the proposed activity is a proper incident to banking within
the meaning of section 4(c)(8) of the BHC Act.39
Brokerage Services With Respect to Forward Contracts
Based on Certain Financial and Nonfinancial Commodities — Notificants propose that Company act as broker
with respect to forward contracts based on certain financial
and nonfinancial commodities. In this capacity, Company
would assist customers in arranging forward contracts with
third parties pursuant to which the customers would make
(or receive) delivery of financial and nonfinancial commodities on a future date.40 Company would act as a broker
only with respect to forward contracts that are based on

39. The Board notes that it has requested comment on whether the
list of permissible activities in Regulation Y should be amended to
permit bank holding companies to provide clearing-only services to
professional floor traders. See 61 Federal Register 47,242, 47,254
(1996) ("Regulation Y Proposal"). The Board will consider whether
to amend Regulation Y to permit bank holding companies in general
to provide clearing-only services to professional floor traders at the
time it considers the proposed amendments to Regulation Y.
The Board also has proposed in its revision of Regulation Y to
modify the conditions that govern certain other activities that TCC
currently conducts without restriction. Notificants have committed
that, during the one-year period following consummation of the proposal, Company will engage in these activities in accordance with the
limitations set forth in the Regulation Y Proposal and, thereafter, will
conduct these activities subject to the conditions adopted by the Board
in Regulation Y, as then in effect.
40. Because Company will act only as a broker, Company will not
itself be required to take physical delivery of the nonfinancial com-

Legal Developments

those financial and nonfinancial commodities that also
serve as the basis for an exchange-traded futures contract.41
Bank holding companies are permitted to act as a broker
in the execution and clearance of futures contracts and
options on futures contracts based on financial and nonfinancial commodities 42 As noted above, the forward contracts that Company proposes to broker would be based on
the same financial and nonfinancial commodities that underlie futures contracts that bank holding companies are
permitted to broker as an FCM. Bank holding companies
also are permitted to broker forward contracts on foreign
exchange and arrange swap transactions that are based on
nonfinancial commodities or indices of nonfinancial commodities 43 Accordingly, the Board has concluded that acting as a broker for forward contracts based on those
financial and nonfinancial commodities that underlie an
exchange-traded futures contract is a permissible activity
for bank holding companies under section 4(c)(8) of the
BHC Act. 44
Other Considerations
In order to approve this notice, the Board must determine
that the activities are a proper incident to banking, that is,
that the performance of the proposed activities "can reasonably be expected to produce benefits to the public . . .
that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition,
conflicts of interest, or unsound banking practices."45 As
part of its review of these factors, the Board considers the
financial and managerial resources of the notificant and its
subsidiaries and the effect the transaction would have on
such resources.46 The Board notes that Notificants' capital
ratios satisfy applicable risk-based standards under the
Basle Accord, and are considered equivalent to the capital
levels that would be required of a United States banking
organization. The Board also has reviewed the capitalization of Notificants and Company in accordance with the
standards set forth in the Section 20 Orders and finds the
capitalization of each to be consistent with approval.47 The

modities underlying the forward contracts that it arranges under any
circumstances.
41. Exchange-traded futures contracts may be based on a wide
variety of commodities, including precious metals, oil, cocoa or wool.
Banking regulators have not expressly permitted banks to engage in
the proposed activity. See OCC Interp. Ltr. No. 494, reprinted in
[1989-1990 Transfer Binder] Fed. Banking L. Rep. (CC) at U 83,083
(Dec. 20, 1989).
42. See Bank of Montreal, 79 Federal Reserve Bulletin 1049 (1993).
43. See 12 C.F.R. 225.25(b)(17); Swiss Bank Corporation, 81 Federal Reserve Bulletin 185 (1995).
44. See Bank of Montreal, 79 Federal Reserve Bulletin 1049 (1993);
Swiss Bank Corporation, 81 Federal Reserve Bulletin 185 (1995).
45. 12 U.S.C. § 1843(c)(8).
46. 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).
47. The Board notes that, as a registered broker-dealer, Company
must comply with the SEC's net capital rule. See 15 C.F.R.
240.15c3-l.




145

determination of the capitalization of Company is based on
all the facts of record, including Notificants' projections of
the volume of Company's underwriting and dealing activities in bank-ineligible securities.
In connection with this proposal, the Reserve Bank has
reviewed the operational and managerial infrastructure of
Company, including its computer, audit, and accounting
systems and internal risk management procedures and controls, with respect to the proposed underwriting and dealing in debt and equity securities, and has determined that
Company has established an adequate operational and managerial infrastructure to ensure compliance with the requirements of the Section 20 Orders. The Reserve Bank
also has reviewed the operational and managerial infrastructure of ChiCorp with respect to its provision of
clearing-only services to locals on the KCBOT and MGE,
including the policies, procedures, and systems that
ChiCorp has, and that Company will have, in place to
monitor and control the financial risks associated with such
activities. On the basis of the Reserve Bank's review, and
all the facts of record, the Board concludes that financial
and managerial considerations are consistent with approval
of this proposal.48
Consummation of the proposal can reasonably be expected to provide added convenience and services to Notificants' customers by offering them an expanded range of
products and services. Notificants also have stated that
consummation of the proposal would give ChiCorp access
to Notificants' worldwide customer base and contacts and
would permit ChiCorp and Company to compete more
effectively in the market for securities- and futures-related
services. There are numerous providers of the proposed
nonbanking services and, therefore, consummation of the
proposal would not significantly decrease competition in
any relevant market. The Board also believes that the
conduct of the proposed activities within the framework
established in this order, prior orders, and Regulation Y is
not likely to result in significantly adverse effects, such as
undue concentration of resources, decreased or unfair competition, or unsound banking practices. Accordingly, and
for the reasons set forth in this order and in the Section 20
Orders, the Board has concluded that Notificants' proposal
to engage in the proposed activities is consistent with the
Glass-Steagall Act, and that the proposed activities are so

48. The Board received a comment from an anonymous source
contending that ChiCorp has no minorities or women in senior management positions and requesting that the Board deny the proposal on
this basis. The Equal Employment Opportunity Commission
("EEOC") has jurisdiction to investigate and determine whether
companies are in compliance with federal equal employment laws.
The Board has noted that unsubstantiated allegations of improper
actions under a statute administered by another federal agency are
beyond the scope of the Board's review under the factors specified in
the BHC Act. On the other hand, substantiated improper actions may
be considered by the Board in light of all the facts of record of an
application under the factors in the BHC Act or in the context of the
Board's general supervisory authority over bank holding companies.
See Norwest Corporation, 82 Federal Reserve Bulletin 580, 582
(1996). The Board has referred the comment to the EEOC.

146

Federal Reserve Bulletin • February 1997

closely related to banking as to be proper incidents thereto
within the meaning of section 4(c)(8) of the BHC Act,
provided that Notificants limit Company's activities as
specified in this order and the Section 20 Orders, as modified by the Modification Orders.49
On the basis of all the facts of record, the Board has
determined to, and hereby does, approve this notice subject
to all the terms and conditions discussed in this order and
in the Section 20 Orders, as modified by the Modification
Orders. The Board's approval of this proposal extends only
to activities conducted within the limitations of those orders and this order, including the Board's reservation of
authority to establish additional limitations to ensure that
Company's activities are consistent with safety and soundness, avoiding conflicts of interests, and other relevant
considerations under the BHC Act. Underwriting and dealing in any manner other than as approved in this order and
the Section 20 Orders, as modified by the Modification
Orders, is not authorized for Company.
The Board's determination also is subject to all the terms
and conditions set forth in Regulation Y, including those in
sections 225.7 and 225.23(g) (12 C.F.R. 225.7 and
225.23(g)), 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 Notificants' compliance
with all the commitments made in connection with this
notice, including the commitments discussed in this order
and the conditions set forth in the Board regulations and
orders noted above. The 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 the
Reserve Bank, acting pursuant to delegated authority.
By order of the Board of Governors, effective December 11, 1996.
Voting for this action: Chairman Greenspan and Governors Kelley,
Phillips, Yellen, and Meyer. Absent and not voting: Vice Chair Rivlin
and Governor Lindsey.

Unidanmark A/S
Unibank A/S
Copenhagen, Denmark
Order Approving Notice to Engage in Nonbanking
Activities
Unidanmark A/S and its wholly owned subsidiary Unibank
A/S, both of Copenhagen, Denmark (collectively, "Notificants"), foreign banking organizations subject to the provisions of the Bank Holding Company Act ("BHC Act"),
have requested 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 retain their ownership of 100 percent of the voting
shares of Aros Securities Inc., New York, New York
("Aros"),1 and thereby engage in the following activities:
(1) Providing investment advisory services pursuant to
12 C.F.R. 225.25(b)(4);
(2) Providing discount and full-service securities brokerage services pursuant to 12 C.F.R. 225.25(b)(15); and
(3) Acting as agent in the private placement of all types
of securities, and buying and selling all types of securities on the order of customers as a "riskless principal"
through Company.2
Aros is registered as a broker-dealer with the Securities
and Exchange Commission ("SEC") under the Securities
Exchange Act of 1934 (15 U.S.C. § 78a et seq.) and is a
member of the National Association of Securities Dealers
("NASD"). Accordingly, Aros is subject to the recordkeeping and reporting obligations, fiduciary standards, and
other requirements of the Securities Exchange Act of 1934,
the SEC and the NASD.
Notice of this proposal, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 56,961 (1996)). The time for filing
comments has expired, and the Board has considered the
notice and all comments received in light of the factors set
forth in section 4(c)(8) of the BHC Act.
Unidanmark A/S, with total consolidated assets of approximately $45.9 billion, is the second largest banking
organization in Denmark.3 In the United States, Unibank A/S operates a branch in New York, New York.

JENNIFER J. JOHNSON

Deputy Secretary of the Board

49. ChiCorp's subsidiary, ChiCorp Insurance Agency, engages in
the sale as agent of insurance products, including annuities, in Illinois.
Notificants propose to transfer these activities to a subsidiary of
Notificants' thrift subsidiary, LaSalle Bank, F.S.B. ("LaSalle Bank"),
Chicago, Illinois, upon consummation of this proposal. The Board has
determined that LaSalle Bank is a Qualified Savings Association
within the meaning of section 4(i)(3) of the BHC Act and is, therefore,
entitled to engage in these types of insurance agency activities in
Illinois. See Stichting Prioriteit ABN AMRO Holding, 78 Federal
Reserve Bulletin 296 (1992).




1. Notificants previously received approval under section 4(c)(9) of
the BHC Act to retain temporarily their ownership interest in Aros.
See Letter dated August 14, 1996, from Jennifer J. Johnson, Deputy
Secretary of the Board, to Robert L. Tortoriello, Esq. ("4(c)(9) Approval Letter").
2. Aros also engages in certain securities underwriting and dealing
activities. Pursuant to the 4(c)(9) Approval Letter, Aros must discontinue such activities within six months of the date on which Notificants acquired control of Aros.
3. Asset and ranking data are as of December 31, 1995, and use
exchange rates then in effect.

Legal Developments

Activities Approved by Regulation
The Board previously has determined by regulation that
the proposed investment advisory and securities brokerage
activities are closely related to banking for purposes of
section 4(c)(8) of the BHC Act.4 Notificants propose to
conduct the activities in accordance with the Board's regulations and prior Board decisions relating to the activities.
Private Placement and "Riskless Principal"

Activities

Private placement involves the placement of new issues of
securities with a limited number of sophisticated purchasers in a nonpublic offering. A financial intermediary in a
private placement transaction acts solely as an agent of the
issuer in soliciting purchasers and does not purchase the
securities and attempt to resell them. Securities that are
privately placed are not subject to the registration requirements of the Securities Act of 1933, and are offered only to
financially sophisticated institutions and individuals and
not to the public. Aros will not privately place registered
securities and will only place securities with customers that
qualify as accredited investors.
"Riskless principal" is the term used in the securities
business to refer to a transaction in which a broker-dealer,
after receiving an order to buy (or sell) a security for a
customer, purchases (or sells) the security for its own
account to offset a contemporaneous sale to (or purchase
from) the customer.5 Riskless principal transactions are
understood in the industry to include only transactions in
the secondary market. Thus, Aros would not act as a
riskless principal in selling bank-ineligible securities at the
order of a customer that is the issuer of the securities to be
sold, or in any transaction where Aros has a contractual
agreement to place the securities as agent of the issuer.6
Aros also would not act as a riskless principal in any
transaction involving a bank-ineligible security for which it
or an affiliate makes a market.
The Board has determined that, subject to the limitations
established by the Board in prior orders, the proposed
private placement and riskless principal activities are so
closely related to banking as to be a proper incident thereto
within the meaning of section 4(c)(8) of the BHC Act.7
The Board also has determined that acting as agent in the
private placement of securities, and purchasing and selling
securities on the order of investors as a riskless principal,

4. See 12 C.F.R. 225.25(b)(4) and (15).
5. See SEC Rule 10b-10(a)(8)(i) (17 C.F.R. 240.10b-10(a)(8)(i)).
The Board notes that Aros, as a registered broker-dealer, must conduct
its riskless principal activities in accordance with the customer disclosure and other requirements of the federal securities laws.
6. "Bank-ineligible securities" refers to securities that state member
banks are not authorized to underwrite or deal in under 12 U.S.C.
§§ 335 and 24(7).
7. See J.P. Morgan & Company Incorporated, 76 Federal Reserve
Bulletin 26 (1990) ("J.P. Morgan"); Bankers Trust New York Corporation, 75 Federal Reserve Bulletin 829 (1989) ("Bankers Trust").




147

do not constitute underwriting and dealing in securities for
purposes of section 20 of the Glass-Steagall Act, and that
revenue derived from these activities is not subject to the
10-percent revenue limitation on bank-ineligible securities
underwriting and dealing.8
Notificants have committed that Aros will conduct its
private placement activities using the same methods and
procedures and subject to the same prudential limitations
as those established by the Board in Bankers Trust and J.P.
Morgan,9 including the comprehensive framework of restrictions imposed by the Board in connection with underwriting and dealing in bank-ineligible securities, which
were designed to avoid potential conflicts of interests,
unsound banking practices, and other adverse effects. Notificants also have committed that Aros will conduct its
riskless principal activities subject to the limitations previously established by the Board.10
Financial Factors, Managerial Resources, and Other
Considerations
Under the proper incident to banking standard of section
4(c)(8) of the BHC Act, in order to approve this notice, the
Board must determine that the performance of the proposed activities by Notificants can reasonably be expected
to produce public benefits that would outweigh possible
adverse effects. As part of the Board's evaluation of these
factors, the Board considers the financial and managerial
resources of the notificants and their subsidiaries and the
effect the transaction would have on such resources.11 The

8. See Bankers Trust.
9. Among the prudential limitations discussed more fully in Bankers
Trust and J.P. Morgan are that Aros will not privately place open-end
investment company securities or securities of investment companies
that are advised by Notificants or any of their affiliates. In addition,
Aros will make no general solicitation or general advertising for
securities it places.
10. See The Bank of New York Company, Inc., 82 Federal Reserve
Bulletin 748 (1996). Neither Aros nor its affiliates will hold themselves out as making a market in the bank-ineligible securities that
Aros buys and sells as riskless principal, or enter quotes for specific
bank-ineligible securities in any dealer quotation system in connection
with Aros' riskless principal transactions, except that Aros and its
affiliates may enter bid or ask quotations, or publish "offering wanted" or "bid wanted" notices on trading systems other than NASDAQ
or an exchange, if Aros or the affiliate does not enter price quotations
on different sides of the market for a particular security for two
business days. In other words, Aros or its affiliate must wait at least
two business days after entering a "bid" quote on a security before
entering an "ask" quote on the same security and vice versa. Aros
will not act as riskless principal for registered investment company
securities or for any securities of investment companies that are
advised by Notificants or their affiliates. In addition, because Aros
proposes to provide riskless principal services in combination with
investment advisory services, Aros will conduct its riskless principal
activities in accordance with the limitations established by the Board
for the full-service brokerage activities of bank holding companies.
See 12 C.F.R. 225.25(b)(15)(ii).
11. 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).

148

Federal Reserve Bulletin • February 1997

Board notes that Notificants' capital ratios satisfy applicable risk-based standards under the Basle Accord, and are
considered equivalent to the capital levels that would be
required of a United States banking organization. Based on
all the facts of record, the Board concludes that financial
and managerial factors are consistent with approval of the
proposal. There is no evidence in the record indicating that
consummation of this proposal is likely to result in significantly adverse effects, such as undue concentration of
resources, decreased or unfair competition, conflicts of
interest, or unsound banking practices. The Board expects,
moreover, that consummation of the proposal would provide added convenience to Notificants' customers and
would increase the level of competition among existing
providers of these services. The Board has determined,
therefore, that the performance of the proposed activities
by Notificants can reasonably be expected to produce public benefits that outweigh possible adverse effects under the
proper incident to banking standard of section 4(c)(8) of
the BHC Act.
Based on the foregoing and all the facts of record,
including the commitments discussed in this order and all
other commitments and representations made by Notificants in connection with this notice, and subject to the
terms and conditions set forth in this order, the Board has
determined that the notice should be, and hereby is, approved. The Board's determination is subject to all the
conditions set forth in Regulation Y, including those in
sections 225.7 and 225.23(g) of Regulation Y (12 C.F.R.
225.7 and 225.23(g)), 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 Notificants'
compliance with the commitments and representations
made in connection with this notice, including the commitments and conditions discussed in this order. The commitments, representations, and conditions relied on in reaching
this decision shall be deemed to be conditions imposed in
writing by the Board in connection with its findings and
decision 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 the
Federal Reserve Bank of New York, acting pursuant to
delegated authority.
By order of the Board of Governors, effective December 16, 1996.

Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Lindsey, Phillips, Yellen, and Meyer.




JENNIFER J. JOHNSON

Deputy Secretary of the Board-

Orders Issued Under Sections 3 and 4 of the Bank
Holding Company Act
NationsBank Corporation
Charlotte, North Carolina
NB Holdings Corporation
Charlotte, North Carolina
Order Approving the Merger of Bank Holding
Companies
NationsBank Corporation and NB Holdings Corporation,
both of Charlotte, North Carolina (collectively, "NationsBank"), bank holding companies within the meaning
of the Bank Holding Company Act ("BHC Act"), have
filed applications and notices under sections 3 and 4(c)(8)
of the BHC Act (12 U.S.C. §§ 1842 and 1843(c)(8)) to
acquire the banking and nonbanking subsidiaries of Boatmen's Bancshares, Inc., St. Louis, Missouri ("Boatmen's").1 NationsBank also has filed a notice under sections 211.4 and 211.5 of Regulation K (12 C.F.R. 211.4
and 211.5) to acquire Boatmen's Foreign Investment Company, an agreement corporation under section 25 of the
Federal Reserve Act (12 U.S.C. §§ 601-604a), also of
St. Louis, Missouri. Notice of the proposal, affording interested persons an opportunity to submit comments, has been
published (61 Federal Register 53,375 (1996)). The time
for filing comments has expired, and the Board has considered the applications and notices and all comments received in light of the factors set forth in the BHC Act, the
Federal Reserve Act, and regulations promulgated thereunder.
NationsBank, with total consolidated assets of approximately $192.3 billion, is the fifth largest commercial banking organization in the United States, controlling approximately 4.6 percent of total banking assets of insured
commercial banks ("total banking assets").2 Its subsidiary
banks operate in North Carolina, Delaware, the District of
Columbia, Florida, Georgia, Kentucky, Maryland, South
Carolina, Tennessee, Texas, and Virginia. NationsBank
also engages in a number of permissible nonbanking activities nationwide. Boatmen's, with total consolidated assets
of approximately $40.7 billion, is the 24th largest banking
organization in the United States. Boatmen's, which operates subsidiary banks in Missouri, Arkansas, Illinois, Iowa,
Kansas, New Mexico, Oklahoma, Tennessee, and Texas,

1. Boatmen's would merge with and into NB Holding Corporation,
a wholly owned subsidiary of NationsBank, with NB Holding as the
surviving corporation. Boatmen's subsidiary banks are listed in Appendix A, and Boatmen's nonbank subsidiaries are listed in Appendix B. NationsBank also has requested the Board's approval for an
option to purchase up to 19.9 percent of the voting shares of Boatmen's if certain events occur. The option would expire on consummation of the proposal.
2. State asset and banking data are as of June 1995, and consolidated asset data are as of June 30, 1996.

Legal Developments

controls approximately 1.1 percent of total banking assets
in the United States.
After consummation of the proposal, NationsBank
would become the fourth largest commercial banking organization in the United States, with total consolidated assets
of approximately $233 billion, and would control approximately 5.7 percent of total banking assets in the United
States. NationsBank would also control 5 percent of the
total deposits in banks and savings associations insured by
the Federal Deposit Insurance Corporation ("FDIC").
Interstate Analysis
Section 3(d) of the BHC Act, as amended by Section 101
of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, ("Riegle-Neal Act") allows the Board
to approve an application by a bank holding company to
acquire control of a bank located in a state other than the
home state of such bank holding company, if certain conditions are met. For purposes of the BHC Act, NationsBank's
home state is North Carolina.3 As noted above, Boatmen's
controls banks in Missouri, Arkansas, Illinois, Iowa, Kansas, New Mexico, Oklahoma, Tennessee, and Texas. The
conditions for an interstate acquisition enumerated in section 3(d) are met in this case.4 In view of all the facts of
record, the Board is permitted to approve this proposal
under section 3(d) of the BHC Act.5

3. Pub. L. No. 103-328, 108 Stat. 2338 (1994). A bank holding
company's home state is that state in which the operations of the bank
holding company's banking subsidiaries were principally conducted
on July 1, 1966, or the date on which the company became a bank
holding company, whichever is later.
4. 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and (B).
Comments from Inner City Press/Community on the Move, the MidSouth Peace and Justice Center of Memphis, Tennessee, and the
Statewide New Mexico Alliance (collectively, the "Coalition"), maintain that the proposal does not meet the conditions in section 3(d)
because NationsBank is not adequately managed and because
NationsBank would acquire a percentage of the insured deposits in
New Mexico and Missouri that exceed state law limits. Based on all
the facts of record, and for the reasons discussed in the order, the
Board concludes that NationsBank is adequately managed and adequately capitalized. In addition, on consummation of the proposal,
NationsBank and its affiliates would control less than 10 percent of the
total amount of deposits of insured depository institutions in the
United States, and less than 30 percent of the total amount of deposits
of insured depository institutions in any state in which Boatmen's
bank subsidiaries are currently located, including New Mexico, which
imposes a 40-percent deposit limitation. The Missouri Commissioner
of Finance has confirmed that the deposit limitation in Missouri law
does not apply to an initial acquisition by an out-of-state banking
organization and has approved the transaction. All the Boatmen's
banks to be acquired by NationsBank also would have been in
existence and have continuously operated for at least the minimum
period of time required under applicable state law. All other requirements of section 3(d) of the BHC Act would be met on consummation
of the proposal.
5. The Coalition also notes that a federal court has recently invalidated the relocation of the main office of a NationsBank's subsidiary
bank in Texas into New Mexico because the bank retained a branch at
its former Texas location. Ghiglieri v. Sun World, N.A. and Eugene
Ludwig, No. EP 96 CA 324 (W.D. Tex. 1996). The relocation had
been approved by the Office of the Comptroller of the Currency




Competitive

149

Considerations

Section 3 of the BHC Act prohibits the Board from approving any proposal that would result in a monopoly, or that
would substantially lessen competition for banking services in any relevant part of the country unless the Board
finds that the anticompetitive effects are outweighed in the
public interest by a proposal's effect on the convenience
and needs of the community. NationsBank and Boatmen's
compete directly in three banking markets in Tennessee
(Lawrence County, Memphis and Nashville) and in two
banking markets in Texas (El Paso and Austin).6 The
Board has carefully reviewed the competitive effects of the
proposal in these banking markets in light of all the facts of
record, including the number of competitors that would
remain in the markets, the characteristics of the markets,
the projected increase in the concentration of total deposits
in depository institutions7 in the markets ("market deposits") as measured by the Herfindahl-Hirschman Index
("HHI") under the Department of Justice Merger Guidelines ("DOJ Guidelines"),8 and commitments made by
NationsBank to divest certain branches. In evaluating the
competitive factors in this case, the Board also has considered carefully comments from the Coalition that assert that
the proposal would have a significantly adverse effect on
competition in the El Paso banking market.
Consummation of the proposal would not exceed the
threshold levels of market concentration, as measured by
the HHI, in the Memphis, Nashville, and Austin banking
markets.9 In order to mitigate the potential anticompetitive
effects of the proposal in the Lawrence County and El Paso

("OCC") under section 30 of the National Bank Act and the OCC has
appealed the court's decision. NationsBank will abide by the final
disposition of the matter by the courts.
6. The banking markets are described in Appendix C.
7. In this context, depository institutions include commercial banks,
savings banks, and savings associations. Market data used for the
table in Appendix C are as of June 30, 1995. Market concentration
calculations include deposits of thrift institutions at 50 percent. The
Board has previously 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 concentration on a 50-percent weighted
basis. See e.g., First Hawaiian, Inc., 11 Federal Reserve Bulletin 52
(1991).
8. Under the revised DOJ Guidelines, 49 Federal Register 26,823
(June 29, 1984), a market in which the post-merger HHI is less than
1000 is considered unconcentrated, and a market in which the postmerger 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.
9. The HHI would remain unchanged at a level of 1468 in the
Nashville banking market, increase 23 points to 1689 in the Memphis

150

Federal Reserve Bulletin • February 1997

banking markets, NationsBank has committed to divest all
the Boatmen's branches in Lawrence County and two
branches in El Paso.10
Although the HHI for the El Paso banking market would
increase 222 points to 2199 after the proposed divestitures,
the Board believes that a number of factors would mitigate
any potential anticompetitive effect. Ten commercial banking organizations, including three large multi-state banking
organizations, would remain in the market. Two of the
multi-state banking organizations together would control
more than 50 percent of the market deposits, and two
additional bank competitors would each control at least
5 percent of the market deposits. NationsBank would become the third largest competitor in the El Paso banking
market, controlling market deposits of approximately
23 percent. The market also has characteristics that make it
attractive for entry for out-of-market firms.11 Two banking
organizations have entered the market de novo since 1990,
and 14 commercial bank branches have opened or been
announced to open in the market since June 1995.
The Board sought comments from the United States
Attorney General, Department of Justice ("Attorney General"), the OCC, the FDIC, and the Office of Thrift Supervision ("OTS") on the competitive effects of this proposal.
The Attorney General advised the Board that consummation of the proposal would not likely have any significantly
adverse effects on competition in any relevant market. The
OTS, OCC and the FDIC also have not objected to consummation of the proposal. Based on all the facts of
record, and for the reasons discussed in this order, and after
carefully considering public comments on the competitive
factor, 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.12

banking market, and increase 69 points to 1055 in the Austin banking
market.
10. Nationsbank has committed to execute sales agreements for
each of the proposed divestitures prior to consummation of this
transaction, and to complete the divestiture within 180 days of consummation. NationsBank also has committed that, in the event it is
unsuccessful in completing these divestitures within 180 days of
consummation, it will transfer the unsold branches to an independent
trustee that is acceptable to the Board and that will be instructed to sell
the branches promptly. See Bankamerica Corporation, 78 Federal
Reserve Bulletin 338 (1992); United New Mexico Financial Corporation, 77 Federal Reserve Bulletin 484 (1991). NationsBank also has
committed to submit to the Board, before consummation of this
proposal, an executed trust agreement acceptable to the Board stating
the terms of these divestitures.
11. For example, the banking market's population and amount of
deposits have increased by 2.1 and 1.9 percent, respectively, from
1992 to 1995 in contrast to all other Texas metropolitan statistical
areas which averaged annual increases of 1.6 and 1.0 percent for
population and amount of deposits, respectively.
12. In analyzing the competitive effects of the proposal, the Board
considered the Coalition's contention, based in part on public statements by NationsBank officials and banking commentators, that NationsBank's policy of imposing a surcharge on ATM transactions by
non-customers would have adverse competitive effects by causing
customers of small banks to terminate their relationships with the




Other Factors under the BHC Act
The BHC Act also requires the Board to consider the
financial and managerial resources and future prospects of
the companies and banks involved in a proposal, the convenience and needs of the community to be served, and
certain other supervisory factors.

A. Supervisory Factors
The Board has carefully considered the financial and managerial resources of the companies and banks involved in
this proposal and the effect of the proposed acquisition on
the future prospects of these organizations, and other supervisory factors in light of the facts of record including the
views expressed by NationsBank and the commenters.13
The Board notes that NationsBank, Boatmen's, and their
subsidiary banks meet or exceed the "well capitalized"
thresholds and are expected to continue to do so after
consummation of the proposal.14 The Board also has re-

small banks and become customers of large banks with extensive
ATM networks, like NationsBank, to avoid the surcharge. The Board
notes that the practice of surcharging ATM transactions by noncustomers is fairly recent and limited data are available on the effect
of ATM surcharging on customer behavior. An analysis of deposit
data in Texas, although preliminary, does not support the Coalition's
contentions. Moreover, the Coalition provides no facts to show that
NationsBank has sufficient market power through its network of
ATMs to compete unfairly with smaller institutions in the market for
banking services. The Board notes that smaller banks may be able to
provide their customers with access to a large number of ATM
machines, through alternative regional and national networks or numerous convenient ATMs that do not have a surcharge. Based on all
the facts of record, the Board concludes that the record in this
proposal does not support the conclusion that NationsBank's ATM
surcharge policy would have a significantly adverse effect on competition or on the availability of ATM services to consumers.
13. The Coalition cites instances of litigation and administrative
regulatory actions regarding securities-related activities by NationsBank's securities brokerage subsidiary, NationsSecurities, including the sale and marketing of securities and the compensation paid to
bank employees for customer information. Some of these actions are
pending and no conclusions of wrongdoing have been reached. Other
cases have resulted in settlements with state regulatory agencies or
individuals in which NationsSecurities has taken corrective actions or
paid compensatory damages. NationsSecurities is a registered broker/
dealer subject to the jurisdiction of the Securities and Exchange
Commission ("SEC") and, as a wholly owned subsidiary of a national
bank, is subject to the supervision and jurisdiction of the OCC. The
Board has carefully reviewed the Coalition's comments in light of
confidential supervisory information from the OCC. The Board also
has provided the Coalition's allegations of improper securities trading
by Boatmen's officials to the SEC for consideration.
The Coalition also makes a number of allegations regarding the
business practices of Stephens, Inc., an Arkansas securities firm, and
its business relationships with NationsBank and Boatmen's. The Coalition objects to a fairness opinion on the proposal by Stephens, Inc.,
because that company owns approximately 2.5 percent of the stock of
Boatmen's. This interest was disclosed to NationsBank's shareholders, who must vote to approve the acquisition, in accordance with
applicable securities laws. Moreover, federal and state securities regulators have the authority to investigate and adjudicate any improper
actions by Stephens, Inc.
14. The Coalition asserts that NationsBank projects a decline in
capital as a result of the proposal and intends to rely on Boatmen's

Legal Developments

viewed the operational and management structure for NationsBank after it acquires Boatmen's.15 Based on all the
facts of record, including all comments that have been
received relating to these factors, and a review of relevant
reports of examination of the companies and the banks
involved in the proposal, the Board concludes that the
financial and managerial resources and future prospects of
the companies and banks concerned are consistent with
approval, as are the other supervisory factors that the
Board must consider under section 3 of the BHC Act.16

B. Convenience and Needs Considerations
The Board has carefully considered the effect of the proposed acquisition on the convenience and needs of the
community to be served in light of all the facts of record.
The Board notes that NationsBank provides a full range of
financial services, including commercial and retail banking
services, trust and investment management services, corporate and investment banking services, and international
banking services, through its bank and nonbank subsidiaries. NationsBank has stated that the acquisition would
result in an enhancement and expansion of the banking
services available in the markets currently served by Boatmen's. NationsBank also would provide the communities
served by Boatmen's with one of the larger retail branch
networks in the country, expanded access to services at

excess capital. The Coalition also notes that NationsBank was forced
to recognize a loss of $40 million in the first quarter of 1996 for losses
from its participation interest in a loan with other banks involving
fraudulent conduct by a borrower, and provides estimates for other
potential liabilities for NationsBank.
15. The Board has taken into account the Coalition's comments:
(1) Objecting to the replacement of Boatmen's senior management
by NationsBank officials,
(2) Criticizing NationsBank's management for a computer failure
in 1996 and for a retracted mail solicitation of home equity loans in
Texas,
(3) Challenging the effectiveness of its board of directors, and
(4) Citing reviews of NationsBank's operations in Nashville, Tennessee, and Charlotte, North Carolina, by the Department of Labor
("DOL"), and NationsBank's response to proposed DOL reviews
of NationsBank's operations in Tampa, Florida, and Columbia,
South Carolina.
The Coalition also cites pending lawsuits brought by former
NationsBank employees that have not adjudicated any improper actions by NationsBank. These comments have been carefully considered in light of all the facts of record, including confidential reports of
examination assessing the managerial resources of NationsBank, and
confidential information provided by the DOL.
16. The Board also has considered other comments relating to these
factors, including comments from a developer and investors criticizing NationsBank's involvement in a multi-family housing project and
from a trust beneficiary criticizing NationsBank's conduct as trustee.
These comments have been provided to the OCC, the primary federal
supervisor of the NationsBank subsidiaries involved, for consideration. Another commenter alleges that NationsBank's subsidiary bank
in Virginia has engaged in improper conduct in connection with a
community block grant program administered by the City of Lynchburg. For the reasons previously stated by the Board, the facts of
record do not support the commenter's allegations, and no new facts
are presented in this case. See NationsBank Corporation, 82 Federal
Reserve Bulletin 154(1996).




151

'ATMs, and special products such as bank-by-mail, PC
home banking, and bank-by-phone.
The Board also has long held that consideration of the
convenience and needs factor includes a review of the
records of the relevant depository institutions under the
Community Reinvestment Act (12 U.S.C. § 2901 et seq.)
("CRA"). The Board has received and considered comments from a number of commenters relating to the CRA
performance records of both institutions. Forty-six commenters have commended the assistance NationsBank and
Boatmen's provided in community redevelopment activities and have favorably noted the records of both organizations for reinvesting in their communities.17 These commenters generally asserted that the combined organization
would benefit all the communities to be served.
Fifteen commenters, including the Coalition ("Protestants"), criticized the CRA performance records of
NationsBank and Boatmen's.18 Protestants maintain that
the 1995 Home Mortgage Disclosure Act (12 U.S.C.
§ 2801 et seq.) ("HMDA") data and the record of branch
closings for both organizations support denial of the proposal. Protestants also contend that NationsBank's record
of CRA performance is deficient in a number of areas,
including activities involving housing-related and small
business lending, ascertainment and marketing, and community development.19
The Board has carefully considered the CRA performance records of both institutions in light of all the facts of
record and the comments received on the proposal.
NationsBank indicated that it intends to enhance Boatmen's community investment program by integrating it
with the NationsBank program. In this light, the Board has
given substantial consideration to the existing record of
NationsBank as reflected in CRA and supervisory examinations, and the current programs and policies of
NationsBank, of helping to serve the convenience and
needs of all its communities.
CRA Performance Examinations
As provided in the CRA, the Board has evaluated the
convenience and needs factor in light of examinations by
the primary federal supervisors of the CRA performance
records of the relevant institutions. An institution's most
recent CRA performance evaluation is a particularly important consideration in the applications process because it
represents a detailed on-site evaluation of the institutions's

17. These commenters included the ACORN Housing Corporation,
the Greater Washington Urban League, the NAACP, and the United
Way of Mid South.
18. These commenters included Vickers & Associates, representing
several community-based groups, Texas Community Reinvestment
Coalition and Corporation for Affordable Housing, and several individual commenters.
19. Several commenters questioned NationsBank's commitment to
community development based on their experiences in a redevelopment project in Texas.

152

Federal Reserve Bulletin • February 1997

overall record of performance under the CRA by its primary federal supervisor.20
All the NationsBank subsidiary banks in Virginia, North
Carolina, Georgia, Florida, Tennessee, and Texas, comprising approximately 96 percent of the organization's banking
assets, received "outstanding" ratings at the most recent
examinations of their CRA performance by their primary
federal supervisor, the OCC, as of July 1995.21 In addition,
all of Boatmen's subsidiary banks received "outstanding"
or "satisfactory" ratings for CRA performance at their
most recent examinations by their primary federal supervisors.22
Lending Performance Record of NationsBank
In general and Lead Bank. The Board has reviewed
the 1993, 1994, and 1995 HMDA data reported by
NationsBank's bank subsidiaries and NationsBanc Mortgage Corporation ("NBMC") in light of Protestants' comments. These data generally indicate that NationsBank has
improved its record of home mortgage lending in low- to
moderate-income ("LMI") census tracts and census tracts
with predominately minority residents ("minority census
tracts").23 NationsBank reports that its nationwide HMDA
data from 1992 and 1995 show an increase of approximately 36 percent in loans to individuals in LMI census
tracts and an increase of approximately 61 percent in loans
to individuals in minority census tracts.24 In addition, 1995

20. 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 reports of these
examinations will be given great weight in the applications process.
54 Federal Register 13,742 and 13,745 (1989).
21. The following mergers occurred after the examinations were
conducted:
(1) NationsBank, N.A (Carolinas), Charlotte, North Carolina and
NationsBank, N.A., Richmond, Virginia, merged to form NationsBank, N.A., Charlotte, North Carolina ("Lead Bank"); and
(2) NationsBank of Florida, N.A, Tampa, Florida, and NationsBank
of Georgia, N.A., Atlanta, Georgia, merged to form NationsBank,
N.A. (South), Atlanta, Georgia.
NationsBank of Texas, N.A., Dallas, Texas, and NationsBank of
Tennessee, N.A., Nashville, Tennessee, also received "outstanding"
ratings for CRA performance by the OCC in July 1995. NationsBank
of Delaware, N.A., Dover, Delaware, a limited purpose credit card
bank, and NationsBank of Kentucky, N.A., Hopkinsville, Kentucky,
received "satisfactory" CRA performance ratings in their most recent
CRA performance examinations by the OCC as of July 1995.
NationsBank also recently acquired Sun World, N.A., El Paso, Texas
("Sun World"), which has not been examined for CRA performance
by the OCC. Sun World's predecessor, Sun World Savings Bank,
F.S.B. received a CRA rating of "outstanding" from its primary
supervisor, the OTS at its most recent CRA performance examination.
22. The CRA performance ratings for Boatmen's subsidiary banks
are set forth in Appendix D.
23. NationsBank conducts most of its housing-related lending
through NBMC, a wholly owned subsidiary of NationsBank's subsidiary bank in Texas and the Board has considered HMDA data reported
by NBMC for areas served by NationsBank's bank subsidiaries.
24. During the same period, applications received from LMI census
tracts increased by approximately 67 percent and applications re-




HMDA data for communities served by Lead Bank indicate an increase in the number of loan applications received from, and loans extended to, minorities and individuals in LMI census tracts.25
The data for NationsBank, including NBMC, and Boatmen's also reflect some disparities in the rate of loan
originations, denials, and applications by racial group or
income level. The Board is concerned when the record of
an institution indicates such disparities, 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 assure equal access to credit by creditworthy applicants regardless of race. The Board recognizes,
however, that HMDA data alone provide an incomplete
measure of an institution's lending in its community because these data cover only a few categories of housingrelated lending and provide limited information about the
covered loans.26 HMDA data, therefore, have limitations
that make the data an inadequate basis, absent other information, for concluding that an institution has engaged in
illegal discrimination in lending.
In light of the limitations of HMDA data, the Board has
carefully reviewed other information, particularly examination reports that provide an on-site evaluation of compliance by NationsBank and Boatmen's with the fair lending
laws. The examinations of NationsBank's subsidiary
banks, which included a fair lending review of NBMC, and
Boatmen's subsidiary banks found no evidence of prohibited discrimination or other illegal credit practices at the
institutions. Examiners also found no evidence of practices
intended to discourage applications for the types of credit
listed in the banks' CRA statements.27
NationsBank also has taken a number of steps to increase lending by its subsidiary banks to LMI and minority
borrowers. NationsBank has implemented second and third
level reviews of declined loan applications from minorities
and LMI individuals to ensure that consistent loan decisions are made. Other corporate fair lending programs
include periodic reviews of underwriting guidelines and
procedures, regression modeling to test variances in credit
decisions, and on-going sensitivity and cultural diversity
training for all bank personnel. In addition, NationsBank's
corporate fair lending group provides a comprehensive

ceived from minority census tracts increased by approximately 98
percent.
25. Boatmen's HMDA data for 1994 and 1995 HMDA also generally indicate increases in housing-related lending in LMI and minority
census tracts, and Boatmen's origination rate for loans in LMI and
minority areas exceeded the average origination rates for all lending
institutions in the St. Louis, Missouri MSA.
26. These data, for example, do not provide a basis for an independent assessment of whether an applicant who was denied credit was,
in fact, creditworthy. Credit history problems and excessive debt
levels relative to income — reasons most frequently cited by a credit
denial — are not available from the HMDA data.
27. As part of its examination for compliance with fair lending laws
of the NationsBank's subsidiary banks and NBMC, the OCC selected
samples from a wide range of housing-related loan applications by
minority and non-minority borrowers for comparative analysis. The
review found no evidence of illegal credit discrimination.

Legal Developments

on-going review of bank performance in providing all
applicants fair access to credit.
NationsBank's senior management has developed extensive written policies, procedures and training programs to
help ensure that its bank and operating subsidiaries do not
illegally discourage or pre-screen applicants. According to
examiners, NationsBank regularly assesses the adequacy
of nondiscriminatory policies, procedures and training programs through internal reviews and management reporting
mechanisms. As part of its continuing evaluation of fair
lending practices and procedures, in 1994, NationsBank
contracted with an outside vendor to evaluate the treatment
of prospective applicants throughout its bank branch and
mortgage company offices.
NationsBank engages in a number of housing-related
and small business and small farm lending activities that
are designed to assist in meeting the credit needs of its
entire community.28 Examiners noted, for example, that
NationsBank has taken additional steps to assist in meeting
the housing-related credit needs of the LMI communities
within its banks' delineations. NBMC committed in mid1995 to provide incentive financing for qualified borrowers
with incomes of less than 80 percent of median household
incomes. Approximately 600 families took advantage of
the program in 1995, resulting in an aggregate loan volume
of $39.1 million. NBMC renewed and increased its commitment of below-market funds available in 1996 to
$240 million. Through September 7, 1996, more than
3,400 families have gained access to the below-market
interest rates to purchase a home. In December 1995,
NationsBank also established a partnership with the Neighborhood Assistance Corporation of America to provide
$500 million for home mortgages in LMI communities.
The program provides 100-percent financing, as well as
intensive individualized credit and homebuyer counseling,
and is being tested in Washington, D.C.; Baltimore, Maryland; Charlotte, North Carolina; and Atlanta, Georgia.
NationsBank also participates in programs designed to
meet the small business credit needs of its delineated
communities. NationsBank actively participates in
government-sponsored programs, such as those of the
Small Business Administration ("SBA") and various city
governments. In 1995, NationsBank made 743 SBA loans
totaling $102 million.29 NationsBank also helped establish
Small Business Resource Centers in four cities in partnership with the SBA and the Department of Commerce

28. Some Protestants contend that services provided by Boatmen's
subsidiary banks — particularly small business loans and other types
of business credit — will be diminished by the proposal because
NationsBank provides less autonomy in lending decisions to management of its subsidiary banks. The Board believes an institution's
performance should be assessed on the institution's actual record of
assisting to meet the credit needs of its entire community, and accordingly, in reviewing the proposal has focused on NationsBank's record
as discussed above.
29. NationsBank has been designated by the SBA as a "Preferred
Lender" or "Certified Lender" in every state in which its subsidiary
banks operate.




153

Minority Business Development Agency. 30 In 1995, NationsBank originated 5,473 loans for $2.5 billion to small
and minority-owned businesses located in LMI communities.31
NationsBank engages in a number of community development activities to help meet the credit needs of its
communities through its community development corporation, NationsBank Community Development Corporation
("NCDC"). Examiners commended NationsBank's high
level of participation in local development and redevelopment projects in the 1995 CRA examinations and noted
that NationsBank continues to pursue lending relationships
that promote the development and redevelopment of its
communities. The NCDC has invested $200 million for the
purpose of making housing available to LMI individuals
and families through partnerships with local community
organizations.
NationsBank also has implemented a Community Development Financial Institutions ("CDFI") initiative to provide capital to financial institutions that specialize in revitalizing neighborhoods. The program has two components:
(1) The CDFI will invest $15 million in development
banks and bank holding companies located in
NationsBank communities, and
(2) NationsBank will invest $10 million directly into
non-bank CDFI institutions such as community development credit unions, multi-bank community development
corporations, and loan funds.
The Board also has considered NationsBank's progress
under its Community Investment Program ("CIP"), a
10-year program to make a minimum of $10 billion of
community investment loans.32 Since the program began in

30. These centers provide loans, technical assistance, counseling
and access to innovative business technology for start-up and existing
businesses.
31. One commenter alleges that NationsBank illegally discriminates
against minority-owned businesses. The comments provided no facts
and are based on studies of NationsBank's HMDA data that have been
previously considered by the Board and found not to substantiate
allegations of illegal discrimination in NationsBank's mortgage lending. See NationsBank Corporation (Bank South) 82 Federal Reserve
Bulletin 172 (1996); NationsBank Corporation (CSF Holdings) 81
Federal Reserve Bulletin 1121 (1995). The Board also has considered
the commenter's objection to the discontinuance of Boatmen's plan to
increase lending to minority-owned small businesses in light of
NationsBank's record of small business lending.
32. Protestants criticize the program for improperly including automobile and debt consolidation loans. The types of loans under the CIP
included consumer loans as well as mortgages for single-family and
multi-family housing, purchase and rehabilitation mortgage loans,
home improvement loans, commercial real estate financing, and small
business loans to minority-owned businesses. The CRA requires the
federal banking agencies to encourage depository institutions to help
meet the credit needs of the community, and does not establish a
statutory preference for any specific type of credit. Protestants provide
no substantiation for their allegation that a significant portion of the
loans reported by NationsBank under the CIP charged usurious rates
of interest and relevant examinations of NationsBank do not substantiate this allegation.

154

Federal Reserve Bulletin • February 1997

1991, NationsBank has made CIP loans totalling $13 billion.
Lead Bank. The Lead Bank, which serves North Carolina, South Carolina, Maryland, Virginia, and the District
of Columbia, received credit applications from all segments of its communities, including LMI areas, and had a
reasonable geographic distribution of loans throughout its
communities, including LMI areas, according to the 1995
CRA performance examination ("Lead Bank Examination"). Examiners noted, in particular, that Lead Bank
effectively identifies potentially underserved areas and targets these areas for additional resources.
Examiners also noted that the bank offered a wide variety of credit and financial products and services to help
meet community needs. The Lead Bank Examination found
that the bank assisted in meeting housing-related credit
needs in its communities by originating loans with flexible
terms and underwriting standards through NBMC. In particular, Lead Bank originated 303 affordable mortgage
loans totalling $19 million in North Carolina, 451 affordable mortgage loans totalling $27 million in South Carolina, and 951 affordable mortgage loans totalling $90 million in Virginia, Maryland and Washington, D.C in 1994.
Lead Bank also continued its efforts to help meet the needs
of small businesses in its communities, including LMI
areas. In 1994, business loans in LMI areas totalled
$73 million in North Carolina, $38 million in South Carolina, and $287 million in Virginia, Maryland and Washington, D.C.
In other states. The Board also has considered Protestants' criticisms of NationsBank's lending record in Florida, Georgia, Kentucky, Tennessee and Texas in light of all
the facts of record. As noted above, except NationsBank's
subsidiary bank in Kentucky which received a "satisfactory" rating, all of NationsBank's subsidiary banks received
an "outstanding" rating from the OCC in their 1995 examinations for CRA performance.
The 1995 CRA performance examinations for the
NationsBank subsidiary banks in these states found that the
community delineations for the banks were generally reasonable and did not arbitrarily exclude any LMI neighborhoods. None of the banks was found to have engaged in
illegal credit practices or practices that discouraged applications for credit. Examiners also determined that the
banks' ascertainment efforts were generally effective, and
in some cases commendable, and that marketing activities
were adequate. The banks engaged in various lending
activities and community development programs to help
meet the credit needs of their communities, including LMI
neighborhoods. Examiners found that all these banks offered some type of program to support affordable housing
and small business lending in their communities, and that
all banks participated to some extent in federal and local
government-sponsored loan programs. The OCC's examinations, moreover, noted that these banks were actively
involved in community development lending programs.
Florida. The 1995 CRA performance examination for
NationsBank's subsidiary bank in Florida ("Florida Exam-




ination") found that the bank's lending activities reflected
a reasonable geographic distribution of applications received and loans made throughout its service communities.
Examiners concluded, for example, that the Florida bank
effectively provided residential and business real estate
loans to LMI individuals and in LMI geographies within its
communities after analyzing its total lending activity. In
addition, the bank actively participated in governmentsponsored loan programs for housing and small businesses
offered through the Federal Housing Authority ("FHA"),
Veterans Administration ("VA") and the SBA. Examiners
noted that SBA lending increased from 21 loans, totalling
approximately $3.3 million in 1993 to 42 loans, totalling
approximately $8.5 million in 1994.
The Florida Examination also considered the bank's
participation in state and local housing loan programs,
including the Broward County Housing Finance Authority
and the Florida Housing Finance Agency Single Family
Bond Program. The Florida bank's participation in local
development and redevelopment projects, particularly
within metropolitan markets, was characterized by examiners as very active. Examiners also noted that the bank's
participation through various national corporate and local
initiatives and partnerships often reflected a leadership
role. Community development projects cited in the examination included the Tampa Challenge Fund II, a lending
partnership with local organizations and the City of Tampa
for the construction and rehabilitation of single- and
multiple-family affordable housing in which the Florida
bank financed 24 projects totalling $1.1 million in 1994,
and the Keystone Challenge Fund, a program providing
purchase mortgages to LMI homeowners in which the
Florida bank made 18 loans totalling $1.3 million in 1994.
Georgia. In the 1995 CRA performance examination of
NationsBank's subsidiary bank in Georgia ("Georgia Examination"), examiners noted that the lending activities of
the bank in Georgia effectively reached LMI individuals
and geographies. For example, the Georgia bank participated in various community-based partnerships that resulted in the origination of 88 loans totalling $6.5 million
in 1994. The bank also increased the number of business
loans made in LMI areas of Georgia from $131 million in
1993 to $200 million in 1994. According to examiners, the
bank effectively identified potentially underserved areas
and targeted them for priority attention and additional
resources.
The Georgia Examination also found that the bank had
undertaken significant efforts to meet the credit needs of its
delineated community through the origination of loans for
residential mortgages, home improvement, small businesses, and small farms. The bank participated in governmentally insured, guaranteed, or subsidized loan programs
for housing and small business. Examiners noted that the
number of SBA-guaranteed loans originated by the Georgia bank almost doubled in number and dollar volume
from 1993 to 1994.
Kentucky. NationsBank's subsidiary bank in Kentucky is
its smallest bank representing less than 1 percent of

Legal Developments

NationsBank's total assets. The 1995 CRA performance
examination ("Kentucky Examination") found that the
number of mortgages made in LMI areas had increased
each year since 1992.33 Examiners also noted that the
bank's management identified potentially under served areas and focused efforts in these areas to assist in meeting
credit needs. The Kentucky Examination concluded that
the bank offered a wide variety of credit and financial
products and services to meet the needs of its delineated
community, including housing-related loans with flexible
terms and underwriting standards. In addition, the Kentucky bank assisted in meeting credit needs for affordable
housing through its participation in projects with the Kentucky Housing Corporation and the Affordable Home Ownership Program.
The Kentucky Examination also found that the bank
provided small business loans, including small businesses
in LMI areas. In 1994, the Kentucky bank originated
88 loans totalling $7.8 million to small businesses in its
delineated community, and offered loans guaranteed by the
SBA. The bank also actively engaged in agricultural lending, originating loans totalling $957 thousand in 1994.
Tennessee. NationsBank's subsidiary bank in Tennessee
received credit applications from all segments of its communities, including LMI areas and had a reasonable geographic distribution of its loans and applications throughout its delineated community, according to its 1995 CRA
performance examination ("Tennessee Examination"). Examiners also noted that the Tennessee bank had been
successful in its efforts to lend to LMI individuals.
The Tennessee Examination found that the bank assisted
in meeting housing-related credit needs in its community
by originating 477 loans with flexible terms and underwriting standards totalling $28 million through NBMC. 34 Examiners also noted that the bank originated loans totalling
$70 million to small businesses located in LMI areas in
1994. Agricultural lending for the Tennessee bank in 1994
totalled $12 million. In addition, the Tennessee bank actively participated in loans guaranteed by the SBA and
originated 40 SBA loans totalling $5.6 million in 1994.
Examiners also favorably noted the bank's participation
with the Tennessee Housing Development Agency in origination loans to LMI borrowers and a number of other
community development projects designed to serve the
credit needs of its community through housing-related and
small business loans.
Texas. The geographic distribution of loan and applications for NationsBank's subsidiary bank in Texas was
found to be reasonable in the 1995 CRA performance
examination of the bank ("Texas Examination") and indicated that the bank affirmatively solicited credit applications from all segments of its communities, particularly in

33. For example, 15.3 percent of bank's and mortgage company's
HMDA originations were in LMI areas in 1994, in comparison to
11.1 percent in 1993.
34. Eleven of the loans, totalling $605,000, were extended through a
partnership with a local community-based organization.




155

LMI neighborhoods. Overall, the bank made 87 percent of
its loans within its delineated communities in 1994 in
response to ascertained credit needs of the community. The
Texas bank participated in loans and loan pools with other
financial institutions, non-profit community development
organizations, public housing authorities, private developers, and other organizations that promote affordable rental
and owner-occupied housing for LMI consumers. The
bank, in conjunction with a community group providing
homebuyer education seminars, made 539 loans totalling
$31 million in 1994.35
The Texas Examination also noted that the bank made a
total of $375 million in small businesses within its delineated communities in 1994, and a total of $18 million in
agricultural-related loans in 1994, with $7 million of the
total originated in rural communities. In addition, the Texas
bank actively participated in community development and
redevelopment activities, particularly in the large urban
markets. Examiners noted that during 1993 and 1994, the
bank participated in 73 credit programs that focused on
helping to meet the credit needs of LMI consumers in the
areas of affordable mortgages, affordable multi-family
housing, and small business operations, including multifamily housing projects with NCDC. During 1994 and
1995, NationsBank provided more than $5 million in financing to the Parks at Wynne wood Partnership, a partnership formed to acquire and rehabilitate a 484-unit multifamily project in the Oak Cliff area of South Dallas.36
NationsBank and the Texas bank also provided more than
$6 million in financing to the Carlton Court Limited Partnership, a project designed to assist LMI individuals to buy
their first homes.
Branch Locations and Closings
Protestants have expressed concerns that branch closings
resulting from the proposal would have a materially adverse effect on the community, particularly in LMI neighborhoods. Protestants also contend that NationsBank's
branch closings to date have adversely affected LMI neighborhoods. The Board has carefully considered these comments in light of all the facts of record.
NationsBank states that it does not have a final branch
closing plan for branches of Boatmen's banks because of

35. Homebuyers completing the seminar received a 1 percent discount on the loan's rate of interest.
36. One commenter from Texas contends that NationsBank does not
assist LMI communities in Austin, Texas. The record indicates that
NationsBank has been involved in several affordable housing projects
in Austin, that include assisting a developer to purchase and renovate
properties in East Austin and assisting a community-based organization in the Dove Spring area to construct new properties. NationsBank
is also involved with the Austin Housing Authority and a local
community group in providing home buyer and ownership education
to the residents in LMI housing. In 1995, moreover, NationsBank's
percentage of total originations in Texas made to Hispanics
(16.7 percent) and in LMI areas (22.2 percent) exceeded the aggregate's percentage of originations to Hispanics (15.9 percent) and in
LMI areas (14.8 percent).

156

Federal Reserve Bulletin • February 1997

the number and the diversity of the markets in which the
NationsBank and Boatmen's banks operate. NationsBank
does not expect to have identified potential branch closures
before March 31, 1997. NationsBank indicates that it does
not intend to vacate any area currently served by Boatmen's, and notes that in past branch closures, it has consistently avoided any closings or consolidations that might
have an adverse effect on LMI areas. NationsBank also
projects, as a general matter, that any branch closings or
consolidations that might result from the proposed merger
would likely result from NationsBank and Boatmen's each
having branches in close proximity.
All NationsBank subsidiary banks are required to use the
corporate Banking Center Opening and Closing Policy in
closing a branch, and the Board expects that this policy
will be used for the branch closings resulting from the
proposal. Before a branch can be considered for closure,
the policy requires that the Community Investment Program manager for the appropriate state consider whether
the closing would have an adverse impact on the community served and what actions will be taken to minimize that
impact. This consideration would include the other financial institutions serving the area and the banking alternatives available to customers affected by the closure. The
Community Investment Program manager may also hold at
least one meeting with neighborhood leaders to assess the
impact of the closure, and implement appropriate suggestions from the meeting to minimize the impact of the
closure. All closings of branches serving LMI areas must
be approved by the Community Investment Program manager.
The OCC has reviewed this policy and found it to be
effective in enabling the NationsBank banks to provide
reasonable access to banking services in their communities. As part of the 1995 CRA performance examinations,
OCC examiners reviewed branches closed pursuant to the
policy. The OCC concluded that all of the NationsBank
subsidiary banks generally had good records of opening,
closing and relocating their offices while providing all
segments of the communities with reasonable access to
bank services.37 None of the 1995 CRA performance examinations noted any materially adverse effects on LMI neighborhoods from branch closings.
The Board notes that branch closings resulting from the
proposal will be assessed by the primary federal supervisor
for CRA performance of the bank closing the branch in
future CRA performance examinations. NationsBank also
is required to give at least 90 days written notice of all
branch closing subject to the Joint Agency Policy Statement on Branch Closings ("Joint Policy Statement").38

37. At the time of the examination, the Kentucky bank had not
opened or closed a branch office since the previous examination and
no other weaknesses were noted regarding branch closings. Examiners
considered the Kentucky bank's record in this regard to be adequate.
38. See 58 Federal Register 49,083 (1993) (interpreting section 42
of the Federal Deposit Insurance Act (12 U.S.C. § 1831r-l)). Under
these provisions, all insured depository institutions are required to
submit a notice of any proposed branch closing to the appropriate




In weighing the convenience and needs factor in this
application, the Board has taken into account the branch
closing policy of NationsBank and its record of closing
branches as reviewed by its primary supervisor in the
examination process. The Board also has considered that
this proposal involves an acquisition with little institutional
overlap. To permit the Board to monitor the potential effect
of branch closings that may result from this transaction,
NationsBank must provide a copy of its proposed branch
closures as soon as available to the Federal Reserve Bank
of Richmond ("Reserve Bank"), and notify the Reserve
Bank of any changes in the preliminary plan for closing
branches for a period of two years or until the depository
institution where the branch closings are proposed is examined by its primary federal supervisor for CRA performance, whichever period is shorter. For branches to be
closed in LMI census tracts, NationsBank's preliminary
plan should indicate the proximity to the closest
NationsBank branch and any steps NationsBank would
take to mitigate the impact of the branch closure. The
Board will also review branch closures resulting from the
proposal in future applications to expand the operations of
NationsBank's depository institutions.39
Other Aspects of NationsBank's CRA Performance
Fair lending law compliance. Protestants allege that
NationsBank's subsidiary banks, including NBMC, 40 and
NationsBank's nonbank lending subsidiaries have engaged
in lending practices that violate the fair lending laws.41

federal banking agency no later than 90 days before the date of closure
that contains:
(1) The identity of the branch to be closed and the proposed closing
date;
(2) A detailed statement of the reasons for the decision to close the
branch; and
(3) Statistical or other information supporting closure consistent
with the institution's written policy for branch closings.
39. The Board has considered Protestants' objection to certain lease
arrangements for Boatmen's branches that prohibit the leasing of the
property to another bank for a period of up to one year after the lease
is terminated. The Board does not believe such provisions warrant an
adverse finding under the convenience and needs or competitive
factors.
40. The Coalition maintains that NationsBank's subsidiary banks
illegally "steer" minority applicants to NationsBank's nonbank lending subsidiary, NationsCredit Corp. ("NationsCredit"), and cites
NationsBank's HMDA data, NationsBank's policy of compensating
bank employees for referrals that result in loans by NationsCredit, and
experiences of individual borrowers with the referral process. The
Coalition also contends that NationsBank's subsidiary banks and
NBMC illegally discriminate against African Americans, citing allegations in a recent law suit regarding NationsBank's lending in the
Washington, D.C. metropolitan area. The Board has provided a copy
of the Coalition's comments to the banks' primary federal supervisor,
the OCC, for consideration.
41. The Coalition contends that NationsBank's nonbank subsidiaries, NationsCredit and SunStar Acceptance Corp., have engaged in
deceptive trade practices and other improper lending activities, including an allegation that NationsCredit targets minority borrowers for
loans that have high rates of interest. The Coalition cites pending
lawsuits, a survey of housing-related loans in Fulton and DeKalb

Legal Developments

NationsBank denies Protestants' allegations and maintains
that it complies with fair lending laws and HMDA reporting requirements.
The Board has carefully considered the comments of
Protestants and NationsBank in light of all the facts of
record, including the OCC's fair lending examination findings and the NationsBank fair lending policies and procedures. As noted, these examinations found no evidence of
illegal discrimination by the banks or NBMC, and favorably commented on NationsBank's fair lending policies
and procedures to prevent illegal practices like prescreening. The Board also notes that NationsCredit has a
consumer compliance program in place. Staff of the program perform compliance reviews for NationsCredit and
work closely with the compliance group responsible for
overseeing the compliance program for the NationsBank
subsidiary banks. In addition, NationsBank's internal audit
department performs consumer compliance reviews of
NationsCredit. Moreover, the pending civil actions cited by
Protestants to support their allegations are in their preliminary stages and no conclusions of wrongdoing have been
made.42 The Board notes that the OCC and the Board
retain sufficient supervisory authority to take appropriate
action against NationsBank if a court determines, or an
examination finds, that NationsBank has engaged in illegal
activities. The Board also can take such findings into
account in considering future applications by NationsBank
to expand its operations.43
Outreach and Marketing Activities. Protestants maintain
that NationsBank's outreach and marketing efforts, particularly in Florida, Kentucky, Tennessee and Texas, are inadequate. The 1995 CRA performance examinations of the
NationsBank subsidiary banks, including the banks serving
the states identified by the Protestants, found multi-faceted
outreach and marketing programs for the development and
promotion of the banks' credit and special deposit-related
products. Examiners noted, for example, that NationsBank's ascertainment process was comprehensive and
effectively used contacts with government officials and
community organizations. The 1995 CRA performance

Counties in Georgia that shows a high percentage of loans by NationsCredit to minority borrowers, and the complaints of individual borrowers. The Coalition also alleges that NationsCredit improperly
classifies loans secured by real property as home equity loans to avoid
HMDA reporting requirements.
42. The Board has reviewed pending and past litigation against
NationsBank. The pending proceedings will provide injured parties
with an adequate remedy if the allegations of improper practices by
NationsBank can be sustained. Other law suits have been concluded
with injured parties receiving a settlement or an award of compensatory damages in some cases.
43. Protestants have requested that, prior to acting on this proposal,
the Board conduct an on-site examination of NationsBank's nonbank
lending subsidiaries for the purpose of examining their compliance
with fair lending laws. In light of all the facts of record, the Board
concludes that such an examination is not warranted. The complaint
by an individual identified in the Coalition's comments has been
forwarded to the OCC, the primary supervisor of NationsBank N.A.
(South), Atlanta, Georgia, and also will be reviewed by the Reserve
Bank as a consumer complaint.




157

examinations also found that these outreach efforts supported the development of innovative products and services. According to the examinations, management officials regularly monitored ascertainment efforts to determine
if unmet credit needs existed and to what extent new credit
products should be considered.
Members of the communities served by NationsBank's
subsidiary banks are informed of the banks' credit and
other banking products through a variety of local media,
including newspapers, radio and television stations, and
publications that have a predominately minority readership. For example, NationsBank's subsidiary bank in Florida and Texas use Spanish-language marketing materials in
larger cities with large Hispanic populations. NationsBank
also works with approximately 300 community-based organizations to provide education seminars to customers on
such topics as operating a small business, purchasing a
home, and money management skills for high school students. In addition, NationsBank's subsidiary banks, including its banks in Tennessee and Kentucky, hosted community "loan day" programs primarily in LMI areas.44 The
banks also used direct mail advertising to promote credit
products in LMI communities.
Conclusion on Convenience and Needs

Considerations

The Board has carefully considered all the facts of record,
including the comments received from all commenters and
responses to those comments and the CRA performance
records of the subsidiary banks of NationsBank and Boatmen's, including relevant reports of examination from their
primary federal supervisors.45 Based on a review of the
entire record, the Board concludes that convenience and
needs considerations, including the CRA records of performance of both organizations' subsidiary banks, are consistent with approval of this proposal 46

44. These events offered credit education sessions, information on
credit and deposit products, and free access to credit reports.
45. Protestants allege that consummation of this proposal could
result in significant job losses, particularly in Memphis, Tennessee.
The convenience and needs factor has been consistently interpreted by
the federal banking agencies, the courts, and Congress to relate to the
effect of a proposal on the availability and quality of banking services
in the community. In this light, the Board previously has concluded
that the effect of a proposed acquisition on employment in a community is not among the factors included in the BHC Act. See Wells
Fargo & Company, 82 Federal Reserve Bulletin 445, 457 (1996).
46. The Board has carefully reviewed Protestants' comments contending that NationsBank's checking and ATM fees adversely affect
LMI individuals. As discussed above, NationsBank provides a full
range of credit products and banking services that assist in meeting the
credit and banking needs of LMI individuals and these products
include a low-fee checking account for LMI customers that allow a
certain number of free withdrawals per month. In addition, there is no
evidence in the record that the fees charged by NationsBank are based
on any factor that would be prohibited under law. NationsBank has
indicated that after consummation of this proposal it will continue to
offer Boatmen's low-fee checking account as well as a low-fee checking product currently offered by NationsBank. Although the Board has
recognized that banks help serve the banking needs of their communities by making basic services available at nominal or no charge, the

158

Federal Reserve Bulletin • February 1997

Nonbanking Activities
NationsBank also has given notice under section 4(c)(8) of
the BHC Act to acquire the nonbanking subsidiaries of
Boatmen's listed in Appendix B and thereby engage in the
described nonbanking activities. Section 4(c)(8) of the
BHC Act provides that a bank holding company may, with
the Board's 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." The Board previously has determined by regulation or
order, subject to certain prudential limitations, that each of
the activities described in Appendix B is closely related to
banking within the meaning of section 4(c)(8) of the BHC
Act.47 NationsBank has provided the Board with all the
commitments the Board obtained in other cases in which it
has approved an application by a bank holding company to
engage in these activities in accordance with the Board's
regulations and prior orders.
In order to approve this proposal, the Board also must
determine that the performance of the proposed activities
are a proper incident to banking, that is that the proposed
transaction "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."48 As part of the Board's evaluation of these
factors, the Board considers the financial and managerial
resources of the notificant and its subsidiaries and the effect
the transaction would have on such resources.49 As noted
above, based on all the facts of record, the Board has
concluded that financial and managerial considerations are
consistent with approval of these notices.
The Board also has carefully considered the competitive
effects of the proposed acquisition of the nonbanking companies and, in so doing, has considered the comments
submitted by the Coalition regarding the competitive effects of the proposed acquisition. The Board believes that
the markets for these nonbanking services, in each case,
are unconcentrated, and notes that there are numerous
providers of these services. As a result, consummation of
this proposal would have a de minimis effect on competition for these services. Based on all the facts of record, the
Board concludes that the proposal is not likely to result in
decreased or unfair competition, conflicts of interests, unsound banking practices, undue concentration of resources,
or other adverse effects.
The Board expects, moreover, that the acquisition of
Boatmen's by NationsBank would provide added convenience to Boatmen's customers and the public. As noted,

CRA does not impose any limitation on the fees or surcharges for
services.
47. See e.g. Boatmen's Corporation, 74 Federal Reserve Bulletin
706 (1988); 80 Federal Reserve Bulletin 448 (1994).
48. See 12 U.S.C. § 1843(c)(8).
49. 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).




NationsBank will provide enhanced products and services
to the communities served by Boatmen's. NationsBank
also indicates that the proposal would result in efficiencies
through integration of certain of NationsBank's and Boatmen's back office operations and the sharing and pooling
of expertise and other resources resulting in benefits to the
customers of both organizations. Accordingly, based on all
the facts of record, the Board has determined that the
proposal can reasonably be expected to produce public
benefits that outweigh any adverse effects under the proper
incident to banking standard of section 4(c)(8) of the BHC
Act. The Board also concludes that all the factors required
to be considered under the Federal Reserve Act and the
Board's Regulation K are consistent with the acquisition of
Boatmen's Foreign Investment Company.
Conclusion
The Board has considered all the issues raised in public
comments filed in connection with this proposal in light of
the factors that the Board is required to consider under the
BHC Act. Based on the foregoing and all the facts of
record, the Board has determined that this transaction
should be, and hereby is, approved.50 The Board's approval
of this proposal is specifically conditioned on compliance
by NationsBank with all the commitments made in connec-

50. Several Protestants have requested that the Board hold a public
hearing or meeting on the proposal. Protestants contend that a hearing
is necessary to provide community groups and consumers in various
states an opportunity to comment on the applications and notices and
to provide additional information for the record. Section 3(b) of the
BHC Act does not require the Board to hold a public hearing 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, the Board has not received such a
recommendation from any state or federal supervisory authority. The
Board's rules also provide for a hearing on notices under section 4 of
the BHC Act if there are disputed issues of material fact that cannot be
resolved in some other manner. See 12 C.F.R. 225.23(g). Protestant
have not identified any disputes of material fact relating to the section 4 notice by NationsBank to acquire Boatmen's savings association.
Under the Board's rules, the Board may also, in its discretion, hold
a public hearing or meeting on an application or notice to clarify
factual issues related to the notice and to provide an opportunity for
testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The
Board has carefully considered these requests in light of all the facts
of record. In the Board's view, Protestants have had ample opportunity to submit their views, and have, in fact, provided numerous
submissions that have been considered by the Board in acting on this
proposal. Protestants' requests fail to demonstrate why their substantial written submissions do not adequately present their allegations.
After a careful review of all the facts of record, the Board concludes
that Protestants' requests dispute the weight that should be accorded
to, and the conclusions that may be drawn from, the existing facts of
record, but do not identify any genuine dispute about facts that are
material to the Board's decision. Based on all the facts of record, the
Board has determined that a public hearing or meeting is not necessary to clarify the factual record in the proposal, and is not otherwise
warranted in this case. Accordingly, the requests for a public hearing
or meeting on the proposal are denied.

Legal Developments

tion with this proposal and the conditions in this order.51
The Board's determination on the proposed nonbanking
activities also is subject to all the conditions set forth in
Regulation Y, including those in sections 225.7 and
225.23(b)(3) 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
shall be 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 Boatmen's subsidiary banks may not
be consummated before the fifteenth calendar day after 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 Reserve Bank, acting pursuant to delegated
authority.
By order of the Board of Governors, effective December 16, 1996.
Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and
Governors Kelley, Lindsey, Phillips, Yellen, and Meyer.

159

(6) Boatmen's National Bank of Newark, Newark
(7) Boatmen's National Bank of North Central Arkansas,
Bull Shoals
(8) Boatmen's National Bank of Northwest Arkansas,
Fayetteville
(9) Boatmen's National Bank of Pine Bluff, Pine Bluff
(10) Boatmen's National Bank of Russellville, Russellville
(11) Boatmen's National Bank of South Arkansas, Camden
Banks in Illinois
(1) Boatmen's Bank of Quincy, Quincy
(2) Boatmen's Bank of South Central Illinois,
Mount Vernon
(3) Boatmen's National Bank of Central Illinois, Hillsboro
(4) Boatmen's National Bank of Coles County, Charleston
(5) Boatmen's Bank of Franklin County, Benton
Banks in Iowa
(1) Boatmen's Bank of Fort Dodge, Fort Dodge
(2) Boatmen's Bank of North Iowa, Mason City
(3) Boatmen's National Bank of Northwest Iowa, Spencer
(4) Boatmen's Bank Iowa, National Association,
Des Moines
Bank in Kansas

JENNIFER J. JOHNSON

Deputy Secretary of the Board

(1) Bank IV, National Association, Wichita

Appendix A

Banks in Missouri

Bank Subsidiaries of Boatmen's to be Acquired by
NationsBank Banks in Arkansas

(1) Boatmen's Bank of Marshall, Marshall
(2) Boatmen's Bank of Mid Missouri, Columbia
(3) Boatmen's Bank of Pulaski County, Richland
(4) Boatmen's Bank of Southern Missouri, Springfield
(5) Boatmen's Bank of Southwest Missouri, Carthage
(6) Boatmen's Bank of Troy, Troy
(7) Boatmen's Bank of Vandalia, Vandalia
(8) Boatmen's First National Bank of Kansas City,
Kansas City
(9) Boatmen's First National Bank of West Plains,
West Plains
(10) Boatmen's National Bank of Boonville, Boonville
(11) Boatmen's National Bank of Cape Girardeau,
Cape Girardeau
(12) Boatmen's National Bank of Lebanon, Lebanon
(13) The Boatmen's National Bank of St. Louis, St. Louis
(14) Boatmen's Osage Bank, Butler
(15) Boatmen's River Valley Bank, Lexington
(16) Boatmen's Bank of Kennett, Kennett
(17) Boatmen's Bank Rolla, Rolla

(1)
(2)
(3)
(4)
(5)

Boatmen's
Boatmen's
Boatmen's
Boatmen's
Boatmen's

Bank of Northeast Arkansas, Jonesboro
National Bank of Arkansas, Little Rock
National Bank of Batesville, Batesville
National Bank of Conway, Conway
National Bank of Hot Springs, Hot Springs

51. Several Protestants have requested that the Board delay action
on, or extend the public comment period for, the proposal in order that
more information could be considered. Protestants contend that NationsBank has not sufficiently responded to requests for additional
information or the issues raised by the Protestants. Protestants also
maintain that they have not had sufficient time to review and comment
on all the information submitted in connection with these applications
and notices. The Board is required under the BHC Act to act on
applications and notices within specified time periods. The Board
notes, moreover, that the Protestants and NationsBank have had a
reasonable opportunity to comment as provided under the Board's
application processing procedures and have, in fact, submitted voluminous comments that have been carefully considered by the Board.
Based on all the facts of record, and for the reasons discussed above,
the Board concludes that the record is sufficient to act on the proposal
at this time, and that delay or denial of the proposal on the grounds of
informational insufficiency is not warranted.




Banks in New Mexico
(1) Boatmen's Credit Card Bank, Albuquerque
(2) Sunwest Bank of Albuquerque, National Association,
Albuquerque

160

Federal Reserve Bulletin • February 1997

(3) Sunwest Bank of Clovis, National Association, Clovis
(4) Sunwest Bank of Farmington, Farmington
(5) Sunwest Bank of Gallup, Gallup
(6) Sunwest Bank of Grant County, Silver City
(7) Sunwest Bank of Hobbs, National Association, Hobbs
(8) Sunwest Bank of Las Cruces, National Association,
Las Cruces
(9) Sunwest Bank of Raton, National Association, Raton
(10) Sunwest Bank of Rio Arriba, National Association,
Espanola
(11) Sunwest Bank of Roswell, National Association,
Roswell
(12) Sunwest Bank of Santa Fe, Santa Fe
Bank in Oklahoma
(1) Boatmen's National Bank of Oklahoma, Tulsa
Bank in Tennessee
(1) Boatmen's Bank of Tennessee, Memphis
Banks in Texas
(1)
National
Bank El
of Austin,
(2) Boatmen's
Sunwest Bank
of El Paso,
Paso Austin
(3) Boatmen's First National Bank of Amarillo, Amarillo

Appendix B

Nonbank Subsidiaries of Boatmen's and Their Activities:
(1) Boatmen's Trust Company, St. Louis, Missouri, Boatmen's Trust Company of Arkansas, Little Rock, Arkansas,
Boatmen's Trust Company of Illinois, Belleville, Illinois,
Boatmen's Trust Company of Oklahoma, Oklahoma City,
Oklahoma, Boatmen's Trust Company of Texas, Amarillo,
Texas: corporate trust, pension, and personal trust administration pursuant to section 225.25(b)(3) of Regulation Y;
(2) Boatmen's Trust Company of Kansas, Overland Park,
Kansas: pension administration activities pursuant to section 225.25(b)(3) of Regulation Y;
(3) Union Realty and Securities Company, St. Louis, Missouri: holding certain real estate in a fiduciary capacity for
the customers of its parent, Boatmen's Trust Company, in
connection with the parent's trust activities pursuant to
section 225.25(b)(3) of Regulation Y;
(4) Superior Federal Bank, F.S.B., Fort Smith, Arkansas:
traditional thrift activities pursuant to section 225.25(b)(9)
of Regulation Y;
(5) Fourth Investment Advisors, Inc., Tulsa, Oklahoma:
providing portfolio investment advice to third parties pursuant to section 225.25(b)(4) of Regulation Y;
(6) Boatmen's Community Development Corporation,
St. Louis, Missouri: providing community development
lending and equity investments in all states in which Boat-




men's has subsidiary banks, pursuant to section
225.25(b)(6) of Regulation Y;
(7) Bank IV Community Development Corporation, Wichita, Kansas: providing loans to and making equity investments in corporations or projects designed primarily
to promote community welfare pursuant to section 225.25(b)(6) of Regulation Y;
(8) Bank IV Affordable Housing Corporation, Wichita,
Kansas: acting as a special limited partner in an investment
designed primarily to promote community welfare pursuant to section 225.25(b)(6) of Regulation Y;
(9) Boatmen's Life Insurance Company, St. Louis, Missouri: underwriting credit insurance sold in connection
with loans made by certain affiliated banks and reinsuring
credit life and credit accident and health insurance underwritten by third party insurance companies in connection
with loans made by certain affiliated banks pursuant to
section 225.25(b)(8)(i) of Regulation Y;
(10) Fourth Financial Insurance Company, Wichita, Kansas: reinsuring credit life and credit accident and health
insurance underwritten by third party insurers in connection with loans made by certain affiliated banks pursuant to
section 225.25(b)(8)(i) of Regulation Y;
(11) Arch Reinsurance Company, LTD, Georgetown,
Grand Cayman: reinsuring various operating insurance policies underwritten by third party insurers for the benefit of
the applicant and its affiliates; and reinsuring credit insurance products underwritten by third party insurers and sold
by affiliates pursuant to section 225.25(b)(8)(i) of Regulation Y;
(12) Consumers Protective Life Insurance Company, Little
Rock, Arkansas: underwriting credit insurance sold in connection with loans made by its Arkansas banking affiliates
pursuant to section 225.25(b)(8)(i) of Regulation Y;
(13) Southwest Protective Life Insurance Company, Fort
Smith, Arkansas: reinsuring credit life insurance underwritten by third party insurers in connection with loans made
by its affiliated thrift pursuant to section 225.25(b)(8)(i) of
Regulation Y;
(14) Boatmen's Insurance Agency, Inc., St. Louis, Missouri: sale of credit insurance directly related to extensions
of credit by its affiliated banks, and direct mail solicitation
of accidental death and dismemberment insurance to the
applicant's deposit and loan customers pursuant to section
225.25(b)(8)(i) of Regulation Y; and
(15) River City Capital Management, Inc., St. Louis, Missouri: acting as a general partner for certain limited partnerships that would be exempt from registration as investment
companies under the Investment Company Act of 1940
(15 U.S.C. § 80a-1) (See Meridian Bancorp, Inc., 80
Federal Reserve Bulletin 736 (1994).

Appendix C
Local banking markets where the bank subsidiaries
NationsBank and Boatmen s compete:

of

Legal Developments

(1) Lawrence County, Tennessee banking market — approximated by Lawrence County, Tennessee.
(2) Memphis, Tennessee banking market — approximated
by Shelby, Tipton and Fayette Counties in Tennessee;
Crittendon County, Arkansas; and De Soto and Tate Counties in Mississippi.
(3) Nashville, Tennessee banking market — approximated
by Cheatham, Davidson, Robertson, Rutherford, Sumner,

Williamson and Wilson Counties, plus the town of Spring
Hill in Maury County, all in Tennessee.
(4) El Paso, Texas banking market — approximated by
El Paso County, Texas, and a portion of Dona Ana County,
New Mexico.
(5) Austin, Texas banking market — approximated by
Williamson, Travis, Hayes, Caldwell and Bastrop Counties, all in Texas.

Appendix D
Boatmen's CRA Performance Examination Rating
Boatmen's Subsidiary Banks
Boatmen's National Bank of Batesville,
Batesville, Arkansas
Boatmen's National Bank of North Central Arkansas,
Bull Shoals, Arkansas
Boatmen's National Bank of South Arkansas,
Camden, Arkansas
Boatmen's National Bank of Conway,
Conway, Arkansas
Boatmen's National Bank of North West Arkansas,
Fayetteville, Arkansas
Superior Federal Bank, FSB,
Fort Smith, Arkansas
Boatmen's National Bank of Hot Springs,
Hot Springs, Arkansas
Boatmen's Bank of Northeast Arkansas,
Jonesboro, Arkansas
Boatmen's National Bank of Arkansas,
Little Rock, Arkansas
Boatmen's National Bank of Newark,
Newark, Arkansas
Boatmen's National Bank of Pine Bluff,
Pine Bluff, Arkansas
Boatmen's National Bank of Russellville,
Russellville, Arkansas
Boatmen's Bank of Franklin County,
Benton, Illinois
Boatmen's National Bank of Coles County,
Charleston, Illinois
Boatmen's National Bank of Central Illinois,
Hillsboro, Illinois
Boatmen's Bank of S. Central Illinois,
Mount Vernon, Illinois
Boatmen's Bank of Quincy,
Quincy, Illinois
Boatmen's Bank Iowa, N.A.,
Des Moines, Iowa
Boatmen's Bank of Fort Dodge,
Fort Dodge, Iowa
Boatmen's Bank of North Iowa,
Mason City, Iowa
Boatmen's National Bank of Northwest Iowa,
Spencer, Iowa
Bank IV N.A.,
Wichita, Kansas
Boatmen's National Bank of Boonville,
Boonville, Missouri
Boatmen's Osage Bank,
Butler, Missouri




161

CRA rating

Date

Outstanding

4/29/96

Outstanding

4/1/96

Outstanding

4/29/96

Outstanding

4/29/96

Outstanding

5/6/96

Outstanding

8/8/94

Outstanding

4/15/96

Satisfactory

2/13/95

Outstanding

4/8/96

Outstanding

5/6/96

Outstanding

4/29/96

Outstanding

4/22/96

Satisfactory

11/28/94

Satisfactory

9/27/94

Satisfactory

9/12/94

Outstanding

1/3/94

Outstanding

2/4/94

Outstanding

9/6/94

Outstanding

4/24/95

Outstanding

7/15/96

Satisfactory

7/25/94

Outstanding

3/13/95

Satisfactory

10/3/94

Outstanding

12/30/94

162

Federal Reserve Bulletin • February 1997

Appendix D—(continued)
Boatmen's Subsidiary Banks
Boatmen's National Bank of Cape Girardeau,
Cape Girardeau, Missouri
Boatmen's Bank of Southwest Missouri,
Carthage, Missouri
Boatmen's Bank of Mid Missouri,
Boatmen's First National Bank of Kansas,
Kansas City, Missouri
Boatmen's Bank of Kennett,

CRA rating

Date

Satisfactory

4/4/94

Outstanding

9/5/95

Outstanding

12/12/94

Outstanding

1/18/94

Satisfactory

4/1/96

Satisfactory

8/15/94

Outstanding

1/19/96

Outstanding

8/16/94

Outstanding

9/5/95

Outstanding

8/8/94

Outstanding

2/26/96

Outstanding

10/18/95

Satisfactory

4/3/95

Satisfactory

1/10/95

Satisfactory

9/12/94

Satisfactory

8/19/94

Outstanding

4/4/94

Outstanding

3/31/94

Satisfactory

3/31/94

Satisfactory

3/8/96

Satisfactory

1/12/96

Satisfactory

4/11/94

Satisfactory

4/18/94

Outstanding

3/31/94

Satisfactory

3/31/94

Outstanding

11/25/94

Outstanding

4/24/95

Satisfactory

9/12/95

Outstanding

12/12/94

Satisfactory

5/16/94

Satisfactory

10/14/94

Outstanding

7/8/96

Boatmen's National Bank of Lebanon,
Boatmen's River Valley Bank,
Lexington, Missouri
Boatmen's Bank of Marshall,
Boatmen's Bank of Pulaski County,
Boatmen's Bank Rolla,
The Boatmen's National Bank of St. Louis,
Boatmen's Bank of Southern Missouri,
Springfield, Missouri
Boatmen's Bank of Troy,
Boatmen's Bank of Vandalia,
Vandalia, Missouri
Boatmen's First National Bank of West Plains,
West Plains, Missouri
Boatmen's Credit Card Bank,
Albuquerque, New Mexico
Sunwest Bank of Albuquerque, N.A.,
Albuquerque, New Mexico
Sunwest Bank of Clovis, N.A.,
Clovis, New Mexico
Sunwest Bank of Rio Arriba, N.A.,
Espanola, New Mexico
Sunwest Bank of Farmington,
Farmington, New Mexico
Sunwest Bank of Gallup,
Gallup, New Mexico
Sunwest Bank of Hobbs, N.A.,
Hobbs, New Mexico
Sunwest Bank of Las Cruces, N.A.,
Las Cruces, New Mexico
Sunwest Bank of Raton, N.A.,
Raton, New Mexico
Sunwest Bank of Roswell, N.A.,
Roswell, New Mexico
Sunwest Bank of Santa Fe,
Santa Fe, New Mexico
Sunwest Bank,
Silver City, New Mexico
Boatmen's National Bank of Oklahoma,
Tulsa, Oklahoma
Boatmen's Bank of Tennessee,
Memphis, Tennessee
Boatmen's First National Bank of Amarillo,
Amarillo, Texas
Boatmen's National Bank of Austin,
Austin, Texas
Sunwest Bank of El Paso,
El Paso, Texas




Legal Developments

163

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)

Bank(s)

Effective Date

Compass Bancshares, Inc.,
Birmingham, Alabama
Compass Banks of Texas, Inc.,
Birmingham, Alabama
Compass Bancorporation of Texas, Inc.
Wilmington, Delaware

Greater Brazos Valley Bancorp, Inc.,
College Station, Texas
Greater Brazos Valley Delaware Bancorp,
Inc.,
Dover, Delaware
Commerce National Bank,
College Station, Texas

December 4, 1996

By Federal Reserve

Banks

Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to
the Reserve Banks.

Section 3
Applicant(s)

Bank(s)

Reserve Bank

Effective Date

1st Floyd Bankshares, Inc.
Rome, Georgia
ABC Bancorp,
Moultrie, Georgia

1st Floyd Bank,
Rome, Georgia
M&F Financial Corporation,
Donalsonville, Georgia
Merchants & Farmers Bank,
Donalsonville, Georgia
First National Bancorp of Columbia,
Inc.,
Columbia, Kentucky
First National Bank of Columbia,
Columbia, Kentucky
Berthoud Bancorp, Inc.,
Berthoud, Colorado

Atlanta

November 27, 1996

Atlanta

December 13, 1996

St. Louis

December 6, 1996

Kansas City

December 19, 1996

Thomson Holdings, Inc.,
Centerville, South Dakota

Minneapolis

December 12, 1996

Park Cities Bancshares, Inc.,
Dallas, Texas
Brighton Commerce Bank,
Clinton Township, Michigan
Community FirstBank of Charleston,
Charleston, South Carolina

Kansas City

December 9, 1996

Chicago

November 27, 1996

Richmond

December 23, 1996

Albany Bancorp, Inc.,
Albany, Kentucky

Berthoud Bancorp Employee Stock
Ownership Plan,
Berthoud, Colorado
Bluestem Bank Holding Company,
L.L.C.,
Sioux Falls, South Dakota
BOK Financial Corporation,
Tulsa, Oklahoma
Capitol Bancorp, Limited,
Lansing, Michigan
Carolina Financial Corporation,
Charleston, South Carolina




164

Federal Reserve Bulletin • February 1997

Section 3—Continued
Applicant(s)

Bank(s)

Reserve Bank

Effective Date

Central Texas Bankshare Holdings,
Inc.,
Columbus, Texas
Colorado County Investment
Holdings, Inc.,
Wilmington, Delaware
Citizens Bancorp, Inc.,
Newport, Kentucky
City National Corporation,
Beverly Hills, California

Hill Bancshares Holdings, Inc.,
Weimar, Texas
Hill Bancshares, Inc.,
Wilmington, Delaware
Hill Bank & Trust Company,
Weimar, Texas
Citizens Bank of Campbell County,
Newport, Kentucky
Ventura County National Bancorp,
Oxnard, California
Ventura County National Bank,
Oxnard, California
Frontier Bank, N.A.,
La Palma, California
County National Bank,
Glen Burnie, Maryland
BMC Bancshares, Inc.,
Mt. Carmel, Illinois
Bank of Mt. Carmel,
Mt. Carmel, Illinois
Jefferson Bancorp, Inc.,
Miami Beach, Florida
Jefferson Bank of Florida,
Miami Beach, Florida
Salin Bank and Trust Company,
Indianapolis, Indiana
Corpus Christi Bancshares,
Corpus Christi, Texas
C.S.B.C.C., Inc.,
Wilmington, Delaware
Citizens State Bank,
Corpus Christi, Texas
Deerwood Bancorporation, Inc.,
Deerwood, Minnesota
First National Bank of Deerwood,
Deerwood, Minnesota
The First State Bank,
Jasper, Texas

Dallas

December 26, 1996

Cleveland

November 29, 1996

San Francisco

December 3, 1996

Richmond

December 4, 1996

St. Louis

December 17, 1996

Atlanta

December 13, 1996

Chicago

November 27, 1996

Dallas

December 5, 1996

Minneapolis

November 27, 1996

Dallas

December 3, 1996

Chicago

November 22, 1996

Chicago

November 22, 1996

Chicago

December 10, 1996

CN Bancorp, Inc.,
Glen Burnie, Maryland
CNB Bancshares, Inc.,
Evansville, Indiana

The Colonial BancGroup, Inc.,
Montgomery, Alabama

Columbus Bancorp, Inc.,
Indianapolis, Indiana
Cullen/Frost Bankers, Inc.,
San Antonio, Texas
The New Galveston Company,
Wilmington, Delaware

Deerwood Bancshares, Inc.,
Deerwood, Minnesota

Diboll State Bancshares, Inc.,
Diboll, Texas
Diboll State Bancshares of
Delaware, Inc.,
Wilmington, Delaware
F&M Bancorporation,
Kaukauna, Wisconsin
F&M Merger Corporation,
Kaukauna, Wisconsin
F&M Bancorporation,
Kaukauna, Wisconsin
FBOP Corporation,
Oak Park, Illinois




East Troy Bancshares, Inc.,
East Troy, Wisconsin
State Bank of East Troy,
East Troy, Wisconsin
Green County Bank,
Brodhead, Wisconsin
SDNB Financial Corp.,
San Diego, California
San Diego National Bank,
San Diego, California

Legal Developments

165

Section 3—Continued
Applicant(s)

Bank(s)

Reserve Bank

Effective Date

First American Corporation,
Nashville, Tennessee

Hartsville Bancshares, Inc.,
Hartsville, Tennessee
CommunityFIRST Bank,
Hartsville, Tennessee
First National Bank,
Mineola, Texas
First National Bank of Anthony,
Anthony, Kansas
FNB Company of Delaware,
Wilmington, Delaware
The First National Bank of Livingston,
Livingston, Texas
The First National Bank of Livingston,
Livingston, Texas
Forrest City Bank, FSB,
Forrest City, Arkansas
The Citizens Bank of Forsyth County,
Cumming, Georgia
State Bank of Fredonia,
Fredonia, Kansas
State Bank of Lonsdale,
Lonsdale, Minnesota
Great Basin Bank of Nevada,
Elko, Nevada
Fredonia State Bancshares, Inc.,
Fredonia, Kansas
First National Bancshares of Scott City,
Ltd.,
Scott City, Kansas
Bank of Little Chute,
Little Chute, Wisconsin
B and K Bancorporation, Inc.,
West Des Moines, Iowa
Liberty Bank & Trust,
Bloomfield, Iowa
Winnebago County Bancorporation,
West Des Moines, Iowa
Liberty Bank and Trust,
Forest City, Iowa
L.B.T. Bancorporation,
West Des Moines, Iowa
Liberty Bank & Trust,
Lake Mills, Iowa
First Liberty Bancorp.,
West Des Moines, Iowa
Liberty Bank & Trust,
Mason City, Iowa
BW3 Bancorporation,
West Des Moines, Iowa
Liberty Bank & Trust, N.A.,
Pocahontas, Iowa

Atlanta

December 12, 1996

Dallas

December 17, 1996

Kansas City

December 4, 1996

Dallas

December 13, 1996

Dallas

December 13, 1996

St. Louis

November 27, 1996

Atlanta

November 25, 1996

Kansas City

November 22, 1996

Minneapolis

November 21, 1996

San Francisco

December 24, 1996

Kansas City

November 29, 1996

Kansas City

December 20, 1996

Chicago

December 13, 1996

Chicago

December 2, 1996

First Mineola, Inc.,
Mineola, Texas
First SCK Financial Corporation,
Anthony, Kansas
FNB Company,
Livingston, Texas

FNB Company of Delaware,
Wilmington, Delaware
Forrest City Financial Corporation,
Forrest City, Arkansas
Forsyth Bancshares, Inc.,
Cumming, Georgia
Fredonia State Bankshares, Inc.,
Fredonia, Kansas
Frandsen Financial Corporation,
Forest Lake, Minnesota
Great Basin Financial Corporation,
Elko, Nevada
Haviland Bancshares, Inc.,
Haviland, Kansas
Hoeme Family Partnership,
Scott City, Kansas
Independent Bancorp, Limited,
Little Chute, Wisconsin
Liberty Financial Corporation,
West Des Moines, Iowa




166

Federal Reserve Bulletin • February 1997

Section 3—Continued
Applicant(s)

Bank(s)

Reserve Bank

Effective Date

Liberty Financial Corporation,
West Des Moines, Iowa—
Continued

I.S.B. Bancorporation, Inc.,
West Des Moines, Iowa
Liberty Bank & Trust,
Woodbine, Iowa
A.B.C. Bancorporation, Inc.,
Tucson, Arizona
Liberty Bank & Trust,
Tucson, Arizona
Heritage Bank,
Loose Creek, Missouri
MainCorp Intermediate Holding
Company,
Wilmington, Delaware
ROSB Bancorp, Inc.,
Red Oak, Texas
MainBank,
Red Oak, Texas
ROSB Bancorp, Inc.,
Red Oak, Texas
MainBank,
Red Oak, Texas
Southern Colorado Bank Holding
Company,
Pagosa Springs, Colorado
First City Bancshares, Inc. of
Springfield, Missouri,
Springfield, Missouri
First City National Bank,
Springfield, Missouri
Metrobank - Illinois, N.A.,
East Moline, Illinois
NAB Bank,
Chicago, Illinois
Hiawatha Bancshares, Inc.,
Hager City, Wisconsin
Glenwood Bancshares, Inc.,
Glenwood City, Wisconsin
National Bank of Iowa,
Denison, Iowa
Pennwood Savings Bank,
Pittsburgh, Pennsylvania
Mattoon State Bank,
Mattoon, Wisconsin
Bank of Dwight,
Dwight, Illinois
South Hillsborough Community Bank,
Apollo Beach, Florida
Columbus Bancorp, Inc.,
Indianapolis, Indiana
Security Bank of Amory,
Amory, Mississippi

Chicago

December 2, 1996

St. Louis

December 10, 1996

Dallas

November 26, 1996

Dallas

November 26, 1996

Kansas City

December 4, 1996

St. Louis

November 26, 1996

Chicago

December 23, 1996

Chicago

December 9, 1996

Minneapolis

December 16, 1996

Chicago

December 18, 1996

Cleveland

November 27, 1996

Chicago

December 13, 1996

Chicago

December 10, 1996

Cleveland

December 4, 1996

Chicago

November 27, 1996

St. Louis

December 20, 1996

Linn Holding Company, Inc.,
Linn, Missouri
MainBancorp, Inc.,
Austin, Texas

MainCorp Intermediate Holding
Company, Inc.,
Wilmington, Delaware
Mancos Bancorporation, Inc.,
Mancos, Colorado
Mark Twain Bancshares, Inc.,
St. Louis, Missouri

Metrocorp, Inc.,
East Moline, Illinois
New Asia Bancorp, Inc.,
Chicago, Illinois
The Oskey Limited Partnership,
Mesa, Arizona

Panhandle Aviation, Inc.,
Clarinda, Iowa
Pennwood Bancorp, Inc.,
Pittsburgh, Pennsylvania
Pineries Bankshares, Inc.,
Stevens Point, Wisconsin
Pontiac Bancorp, Inc.,
Pontiac, Illinois
Provident Bancorp, Inc.,
Cincinnati, Ohio
Salin Bancshares, Inc.,
Indianapolis, Indiana
Security Bancshares, Inc.,
Amory, Mississippi




Legal Developments

167

Section 3—Continued
Applicant(s)

Bank(s)

Reserve Bank

Effective Date

South Central Bancshares, Inc.
Russellville, Kentucky

Hopkins Bancorp, Inc.,
Wickliffe, Kentucky
Citizens State Bank,
Wickliffe, Kentucky
South Coast Thrift and Loan
Association,
Irvine, California
State Bank & Trust Company,
Harrodsburg, Kentucky
B.M.J. Financial Corp.,
Bordentown, New Jersey
The Bank of Mid-Jersey,
Bordentown, New Jersey
Rock Valley State Bank,
Rock Valley, Iowa

St. Louis

November 22, 1996

San Francisco

December 9, 1996

St. Louis

December 19, 1996

New York

December 6, 1996

Chicago

December 19, 1996

Boston

December 2, 1996

New York

December 20, 1996

Minneapolis

December 18, 1996

Chicago

December 4, 1996

South Coast Bancorp, Inc.,
Irvine, California
State Financial Services, Inc.,
Harrodsburg, Kentucky
Summit Bancorp.,
Princeton, New Jersey
Summit Bank,
Hackensack, New Jersey
Two Rivers Bank Holding
Company,
Rock Valley, Iowa
UST Corp.,
Boston, Massachusetts
U.S. Trust Corporation,
New York, New York
Walker Ban Co.,
Walker, Minnesota
Wintrust Financial Corporation,
Lake Forest, Illinois

Walden Bancorp, Inc.,
Acton, Massachusetts
U.S. Trust Company of New Jersey,
Princeton, New Jersey
Pequot Area Bancorporation, Inc.,
Pequot Lakes, Minnesota
Barrington Bank & Trust Company,
N.A.,
Barrington, Illinois

Section 4
Applicant(s)

Nonbanking Activity/Company

Reserve Bank

Effective Date

Campello Bancorp,
Brockton, Massachusetts
Cattail Bancshares, Inc.,
Atwater, Minnesota
First Citizens BancShares, Inc.,
Raleigh, North Carolina
The Fuji Bank, Limited,
Tokyo,Japan
FW Financial, Inc./First Western
Bancorp, Inc.,
Huron, South Dakota
Heartland Financial USA, Inc.,
Dubuque, Iowa

Cody Services Corporation,
Brockton, Massachusetts
To engage de novo in making and
servicing loans
Atlantic States Bank,
Raleigh, North Carolina
Heller Financial, Inc.,
Chicago, Illinois
FW Insurance Agency,
Atkinson, Nebraska

Boston

December 3, 1996

Minneapolis

November 26, 1996

Richmond

December 4, 1996

New York

December 18, 1996

Minneapolis

November 22, 1996

Tri-State Community Credit
Corporation,
Dubuque, Iowa
Mountain Bank,
Whitefish, Montana

Chicago

December 20, 1996

Minneapolis

December 17, 1996

MidAmerica Financial Corporation,
Newport, Minnesota

Minneapolis

December 6, 1996

JS Investments, Limited Partnership,
Billings, Montana
Nbar5, Limited Partnership,
Ranchester, Wyoming
First Interstate BancSystems of
Montana,
Billings, Montana
MidAmerica Bancshares, Inc.,
Newport, Minnesota




168

Federal Reserve Bulletin • February 1997

Section 4—Continued
Applicant(s)

Nonbanking Activity/Company

Reserve Bank

Effective Date

Mid Am, Inc.,
Bowling Green, Ohio
The Mitsubishi Trust and Banking
Corporation,
Tokyo,Japan
National Commerce Bancorporation,
Memphis, Tennessee
Norwest Corporation,
Minneapolis, Minnesota
Norwest Corporation,
Minneapolis, Minnesota
Peoples Bancorp Inc.,
Marietta, Ohio
Provident Bancorp, Inc.,
Cincinnati, Ohio

Mid Am Private Trust, N.A.,
Cincinnati, Ohio
Spectrum Capital, Ltd.,
New York, New York

Cleveland

December 11, 1996

New York

December 16, 1996

J & S Leasing, Inc.,
Knoxville, Tennessee
Advance Mortgage,
Chesapeake, Virginia
Mortgage One,
Canton, Ohio
Russell Federal Savings Bank,
Russell, Kentucky
Information Leasing Corporation,
Cincinnati, Ohio
Procurement Alternatives Corporation,
Cincinnati, Ohio
To engage de novo through a wholly
owned subsidiary in certain activities
related to making and servicing loans
CFG, Citizens Capital, Inc.,
Boston, Massachusetts

St. Louis

December 24, 1996

Minneapolis

December 3, 1996

Minneapolis

December 4, 1996

Cleveland

November 27, 1996

Cleveland

November 22, 1996

New York

November 22, 1996

Boston

December 4, 1996

Fidelity Financial Bankshares
Corporation,
Richmond, Virginia
Fidelity Federal Savings Bank,
Richmond, Virginia

Richmond

December 16, 1996

Applicant(s)

Nonbanking Activity/Company

Reserve Bank

Effective Date

Louisville Development Bancorp,
Inc.,
Louisville, Kentucky

Louisville Community Development
Bank,
Louisville, Kentucky
Louisville Real Estate Development
Company,
Louisville, Kentucky
Homeland Bankshares Corporation,
Waterloo, Iowa
Homeland Savings Bank, FSB,
Des Moines, Iowa
Homeland Trust Company,
Des Moines, Iowa
Homeland Student Loan Company,
West Des Moines, Iowa

St. Louis

December 11, 1996

St. Louis

December 17, 1996

Royal Bank of Canada,
Montreal, Quebec, Canada
The Royal Bank of Scotland Group
pic,
Edinburgh, Scotland
The Royal Bank of Scotland pic,
Edinburgh, Scotland
The Governor and Company of the
Bank of Ireland,
Dublin, Ireland
Citizens Financial Group, Inc.,
Providence, Rhode Island
Southern National Corporation,
Winston-Salem, North Carolina
BB&T Financial Corporation of
Virginia,
Winston-Salem, North Carolina

Sections 3 and 4

Magna Group, Inc.,
St. Louis, Missouri
HBC Acquisition Sub, Inc.,
St. Louis, Missouri




Legal Developments

169

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)

Bank(s)

Reserve Bank

Effective Date

The Citizens Banking Company,
Sandusky, Ohio
FCNB Bank,
Frederick, Maryland
Mercantile Bank of Lawrence,
Lawrence, Kansas
Summit Bank,
Hackensack, New Jersey
Tehama County Bank,
Red Bluff, California

EST National Bank,
Elyria, Ohio
Elkridge Bank,
Elkridge,Maryland
Mercantile Bank,
Overland Park, Kansas
The Bank of Mid-Jersey,
Bordentown, New Jersey
Wells Fargo Bank, N.A.,
San Francisco, California

Cleveland

December 24, 1996

Richmond

December 11, 1996

Kansas City

December 2, 1996

New York

December 6, 1996

San Francisco

December 11, 1996

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.
The New Mexico Alliance v. Board of Governors, No. 9 6 9552 (10th Cir., filed December 24, 1996). Petition for
review of a Board order dated December 16, 1996, approving the acquisition by NationsBank Corporation and NB
Holdings Corporation, both of Charlotte, North Carolina, of
Boatmen's Bancshares, Inc., St. Louis, Missouri. Also on
December 24, 1996, petitioners moved for an emergency
stay of the Board's order.
Artis v. Greenspan, No. 1:96CV02619 (D.D.C., filed November 19, 1996). Employment discrimination action. On December 20, 1996, the Board moved to dismiss the action.
First Baird Bancshares, Inc. v. Board of Governors, No.
96-1426 (D.C. Cir., filed November 18, 1996). Petition for
review of Board order dated November 6, 1996, approving
applications of First Commercial Corporation, Little Rock,
Arkansas, Arvest Bank Group, Inc., Bentonville, Arkansas,
and TRH Bank Group, Inc., Norman, Oklahoma, to acquire
all the shares of The Oklahoma National Bank of Duncan,
Duncan, Oklahoma. On November 20, 1996, the Court
denied petitioners' motion for a stay.
Snyder v. Board of Governors, No. 96-1403 (D.C. Cir., filed
October 23, 1996). Petition for review of Board order dated
September 11, 1996, prohibiting John K. Snyder and
Donald E. Hedrick from further participation in the banking
industry. On November 21, 1996, the Board moved to
dismiss the petition.
American Bankers Insurance Group, Inc. v. Board of Governors, No. 96-CV-2383-EGS (D.D.C., filed October 16,
1996). Action seeking declaratory and injunctive relief invalidating a new regulation issued by the Board under the
Truth in Lending Act relating to treatment of fees for debt




cancellation agreements. On October 18, 1996, the district
court denied plaintiffs' motion for a temporary restraining
order. A hearing on the motion for preliminary and permanent injunctive relief is set for February 10, 1997.
Clifford v. Board of Governors, No. 96-1342 (D.C. Cir., filed
September 17, 1996). Petition for review of Board order
dated August 21, 1996, denying petitioners' motion to
dismiss enforcement action against them. On November 4,
1996, the Board filed a motion to dismiss the petition.
Artis v. Greenspan, No. 96-CV-02105 (D. D.C., filed September 11, 1996). Class complaint alleging race discrimination
in employment. On December 20, 1996, the Board moved
to dismiss the action.
Leuthe v. Board of Governors, No. 96-5725 (E.D. Pa., filed
August 16, 1996). Action against the Board and other
Federal banking agencies challenging the constitutionality
of the Office of Financial Institution Adjudication.
Long v. Board of Governors, No. 96-9526 (10th Cir., filed
July 31, 1996). Petition for review of Board order dated
July 2, 1996, assessing a civil money penalty and cease and
desist order for violations of the Bank Holding Company
Act. The Board's brief in opposition to the petition was
filed November 27, 1996.
Board of Governors v. Interamericas Investments, Ltd., No.
96-7108 (D.C. Cir., filed June 14, 1996). Appeal of district
court ruling granting, in part, the Board's application to
enforce an adminstrative investigatory subpoena for documents and testimony. On November 15, 1996, the court
dismissed the action on appellants' motion.
Interamericas Investments, Ltd. v. Board of Governors, No.
96-60326 (5th Cir., filed May 8, 1996). Petition for review
of order imposing civil money penalties and cease and
desist order in enforcement case. Petitioners' brief was filed
on July 26, 1996, and the Board's brief was filed on
September 27, 1996. On August 20, petitioners' motion for

170

Federal Reserve Bulletin • February 1997

a stay of the Board's orders pending judicial review was
denied by the Court of Appeals.
Kuntz v. Board of Governors, No. 96-1079 (D.C. Cir., filed
March 7, 1996). Petition for review of a Board order dated
February 7, 1996, approving applications by The Fifth
Third Bank, Cincinnati, Ohio, and The Firth Third Bank of
Columbus, Columbus, Ohio, to acquire certain assets and
assume certain liabilities of 25 branches of NBD Bank,
Columbus, Ohio. Petitioner has moved to consolidate the
case with Kuntz v. Board of Governors, No. 95-1495. On
April 8, 1996, the Board filed a motion to dismiss the
action.
Henderson v. Board of Governors, No. 96-1054 (D.C. Cir.,
filed February 16, 1996). Petition for review of a Board
order dated January 17, 1996, approving the merger of First
Citizens BancShares, Inc., Raleigh, North Carolina, with
Allied Bank Capital, Inc., Sanford, North Carolina. Petitioners' motion for a stay was denied on March 7, 1996.
Following briefing on the merits of the petition, petitioners
filed a motion for voluntary dismissal on December 19,
1996.
Research Triangle Institute v. Board of Governors, No.
1:96CV00102 (M.D.N.C., filed February 12, 1996). Contract dispute. On May 3, 1996, the Board filed a motion to
dismiss the action.
Inner City Press/Community on the Move v. Board of Governors, No. 96-4008 (2nd Cir., filed January 19, 1996). Petition for review of a Board order dated January 5, 1996,
approving the applications and notices by Chemical Banking Corporation to merge with The Chase Manhattan Corporation, both of New York, New York, and by Chemical
Bank to merge with The Chase Manhattan Bank, N.A., both
of New York, New York. Petitioners' motion for an emergency stay of the transaction was denied following oral
argument on March 26, 1996. The Board's brief on the
merits was filed July 8, 1996. The case has been consolidated for oral argument and decision with Lee v. Board of
Governors, No. 95^1134 (2d Cir.); oral argument is scheduled for January 13, 1997.
Kuntz v. Board of Governors, No. 95-1495 (D.C. Cir., filed
September 21, 1995). Petition for review of Board order
dated August 23, 1995, approving the applications of The
Fifth Third Bank, Cincinnati, Ohio, to acquire certain assets
and assume certain liabilities of 12 branches of PNC Bank,
Ohio, N.A., Cincinnati, Ohio, and to establish certain
branches. The Board's motion to dismiss was filed on
October 26, 1995.
Lee v. Board of Governors, No. 9 5 ^ 1 3 4 (2nd Cir., filed
August 22, 1995). Petition for review of Board orders dated
July 24,1995, approving certain steps of a corporate reorganization of U.S. Trust Corporation, New York, New York,
and the acquisition of U.S. Trust by Chase Manhattan
Corporation, New York, New York. On September 12,
1995, the court denied petitioners' motion for an emergency
stay of the Board's orders. The Board's brief was filed on
April 16, 1996. Oral argument, consolidated with Inner City
Press/Community on the Move v. Board of Governors, is
scheduled for January 13, 1996.




Beckman v. Greenspan, No. 95-35473 (9th Cir., filed May 4,
1995). Appeal of dismissal of action against Board and
others seeking damages for alleged violations of constitutional and common law rights. The appellants' brief was
filed on June 23, 1995; the Board's brief was filed on
July 12, 1995.
Money Station, Inc. v. Board of Governors, No. 95-1182
(D.C. Cir., filed March 30, 1995). Petition for review of a
Board order dated March 1, 1995, approving notices by
Bank One Corporation, Columbus, Ohio; CoreStates Financial Corp., Philadelphia, Pennsylvania; PNC Bank Corp.,
Pittsburgh, Pennsylvania; and KeyCorp, Cleveland, Ohio,
to acquire certain data processing assets of National City
Corporation, Cleveland, Ohio, through a joint venture subsidiary. On April 23, 1996, the court vacated the Board's
order. On July 31, 1996, the full court granted the Board's
suggestion for rehearing en banc, and vacated the April 23
panel decision. On December 19, 1996, the parties filed a
stipulation of voluntary dismissal. In re Subpoena Duces
Tecum, Misc. No. 95-06 (D.D.C., filed January 6, 1995).
Action to enforce subpoena seeking pre-decisional supervisory documents sought in connection with an action by
Bank of New England Corporation's trustee in bankruptcy
against the Federal Deposit Insurance Corporation. The
Board filed its opposition on January 20, 1995. Oral argument on the motion was held July 14, 1995.
Board of Governors v. Pharaon, No. 91-CIV-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 ORDERS ISSUED BY THE BOARD
OF GOVERNORS

Banco Latino C.A., S.A.C.A.
Caracas, Venezuela
The Federal Reserve Board announced on December 4,
1996, the issuance of an Amended Cease and Desist Order
against Banco Latino C.A., S.A.C.A., Caracas, Venezuela,
and Banco Latino International, Miami, Florida.

Nir Kantor
New York, New York
The Federal Reserve Board announced on December 23,
1996, the issuance of an Order of Prohibition against Nir
Kantor, a former officer and institution-affiliated party of
BT Securities Corporation, New York, New York, a nonbank subsidiary of Bankers Trust New York Corporation,
New York, New York, a registered bank holding corporation.

Legal Developments

171

George T. Wittman
New York, New York

Written Agreement dated December 9, 1994—terminated
December 9, 1996.

The Federal Reserve Board announced on December 11,
1996, the issuance of an Order of Prohibition against
George T. Wittman, a former private banking account
officer and institution-affiliated party of the New York
Branch of Banque Indosuez, Paris, France.

Ronald E. Bond, Former President
and Chairman of American State Bancshares,
Inc.
Broken Bow, Oklahoma

TERMINATION OF ENFORCEMENT ACTIONS

Written Agreement dated April 24, 1992—terminated December 9, 1996.

The Federal Reserve Board announced on December 13,
1996, the termination of the following enforcement actions:
Bankers Trust New York Corporation
Bankers Trust Company
BT Securities Corporation
New York, New York




Northern Bancorp, Inc.
Woburn, Massachusetts
and James J. Mawn and Robert L. McCrensky
Written Agreement dated February 15, 1996—terminated
November 6, 1996.

A1

Financial and Business Statistics
A3

GUIDE TO TABULAR

DOMESTIC FINANCIAL STATISTICS

Money Stock and Bank Credit
A4
A5
A6
A6

Reserves, money stock, liquid assets, and debt
measures
Reserves of depository institutions, Reserve Bank
credit
Reserves and borrowings—Depository
institutions
Selected borrowings in immediately available
funds—Large member banks

Policy Instruments
A7
A8
A9

Federal Finance

PRESENTATION

Federal Reserve Bank interest rates
Reserve requirements of depository institutions
Federal Reserve open market transactions

Federal Reserve Banks
A10 Condition and Federal Reserve note statements
A l l Maturity distribution of loan and security
holdings

Monetary and Credit Aggregates
A12 Aggregate reserves of depository institutions
and monetary base
A13 Money stock, liquid assets, and debt measures
A15 Deposit interest rates and amounts outstanding—
commercial and BIF-insured banks

A25
A26
All
All

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
A28 U.S. government securities
dealers—Transactions
A29 U.S. government securities dealers—
Positions and financing
A30 Federal and federally sponsored credit
agencies—Debt outstanding

Securities Markets and Corporate Finance
A31 New security issues—Tax-exempt state and local
governments and corporations
A3 2 Open-end investment companies—Net sales
and assets
A32 Corporate profits and their distribution
A33 Domestic finance companies—Assets and
liabilities, and consumer, real estate, and business
credit

Real Estate
A34 Mortgage markets
A35 Mortgage debt outstanding

Consumer Credit
A36 Total outstanding
A36 Terms

Flow of Funds
Commercial Banking Institutions—
Assets and Liabilities
A16
A17
A18
A19
A20

All commercial banks
Domestically chartered commercial banks
Large domestically chartered commercial banks
Small domestically chartered commercial banks
Foreign-related institutions

A37
A39
A40
A41

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
Financial Markets
A22 Commercial paper and bankers dollar
acceptances outstanding
A22 Prime rate charged by banks on short-term
business loans
A23 Interest rates—money and capital markets
A24 Stock market—Selected statistics



A42 Nonfinancial business activity—
Selected measures
A42 Labor force, employment, and unemployment
A43 Output, capacity, and capacity utilization
A44 Industrial production—Indexes and gross value
A46 Housing and construction
A47 Consumer and producer prices

2

Federal Reserve Bulletin • February 1997

DOMESTIC NONFINANCIAL
CONTINUED

STATISTICS-

Selected Measures—Continued
A48 Gross domestic product and income
A49 Personal income and saving

INTERNATIONAL

STATISTICS

Summary Statistics
A50
A51
A51
A51

U.S. international transactions—Summary
U.S. foreign trade
U.S. reserve assets
Foreign official assets held at Federal Reserve
Banks
A52 Selected U.S. liabilities to foreign official
institutions

Reported by Banks in the United States
A52
A53
A55
A56

Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A56 Banks' own claims on unaffiliated foreigners
A57 Claims on foreign countries—
Combined domestic offices and foreign branches




Reported by Nonbanking Business
Enterprises in the United States
A58 Liabilities to unaffiliated foreigners
A59 Claims on unaffiliated foreigners

Securities Holdings and Transactions
A60 Foreign transactions in securities
A61 Marketable U.S. Treasury bonds and
notes—Foreign transactions

Interest and Exchange Rates
A61 Discount rates of foreign central banks
A61 Foreign short-term interest rates
A62 Foreign exchange rates

A63 GUIDE TO STATISTICAL RELEASES
SPECIAL TABLES

AND

A64 Pro forma balance sheet and income statements
for priced service operations, September 30, 1996
A68 Terms of lending at commercial banks,
November 4 - 8 , 1996
A72 Assets and liabilities of U.S. branches and agencies
of foreign banks, September 30, 1996

A76 INDEX TO STATISTICAL

TABLES

A3

Guide to Tabular Presentation
SYMBOLS AND
c
e
n.a.
n.e.c.
p
r
*
0
ATS
BIF
CD
CMO
FFB
FHA
FHLBB
FHLMC
FmHA
FNMA
FSLIC
G-7

GENERAL

ABBREVIATIONS

Corrected
Estimated
Not available
Not elsewhere classified
Preliminary
Revised (Notation appears on column heading
when about half of the figures in that column
are changed.)
Amounts insignificant in terms of the last decimal
place shown in the table (for example, less than
500,000 when the smallest unit given is millions)
Calculated to be zero
Cell not applicable
Automatic transfer service
Bank insurance fund
Certificate of deposit
Collateralized mortgage obligation
Federal Financing Bank
Federal Housing Administration
Federal Home Loan Bank Board
Federal Home Loan Mortgage Corporation
Farmers Home Administration
Federal National Mortgage Association
Federal Savings and Loan Insurance Corporation
Group of Seven

G-10
GNMA
GDP
HUD
IMF
IO
IPCs
IRA
MMDA
MSA
NOW
OCD
OPEC
OTS
PO
REIT
REMIC
RP
RTC
SAIF
SCO
SDR
SIC
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
Metropolitan statistical area
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
Department of Veterans Affairs

INFORMATION

In many of the tables, components do not sum to totals because of
rounding.
Minus signs are used to indicate (1) a decrease, (2) a negative
figure, or (3) an outflow.
"U.S. government securities" may include guaranteed issues
of U.S. government agencies (the flow of funds figures also




include not fully guaranteed issues) as well as direct obligations of the Treasury. "State and local government" also includes municipalities, special districts, and other political
subdivisions.

A4

Domestic Financial Statistics • February 1997

1.10

RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES
Percent annual rate of change, seasonally adjusted 1
1995

1996

1996

Monetary or credit aggregate
Q4

Q1

Q2

Q3

July

Aug.

Sept.

Oct.r

Nov.

-21.1
-23.3
-22.0
4.5

-28.4
-27.9
-26.7
3.5

-6.7
-7.5
-5.0
5.8

1
2
3
4

Reserves of depository institutions2
Total
Required
Nonborrowed
Monetary base3

-6.9
-7.7
-6.4
2.7

-7.9
-8.5
-6.5
1.5

-6.4
-5.7
-7.6
2.2

-16.4
-16.6
-17.6
5.9

-20.3
-18.8
-20.0
7.6

-20.9
-19.0
-20.3
6.3

5
6
7
8
9

Concepts of money, liquid assets, and debt4
Ml
M2
M3
L
Debt

-5.1
4.1
4.6
6.0
4.7

-2.7
5.7
7.1
5.0
5.0

-.7
3.8
5.5
5.7
5.6

-7.0
2.7
4.4r
4.8
5.0r

-9.1
1.6
2.8
3.3r
5.9r

-9.9
3.8r
4.9r
6.6r
4.5r

-8.7
3.3r
7.2r
8.3r
3.8r

-16.8
2.9
8.6
3.9
4.6

.1
7.1
6.6
n.a.
n.a.

8.4
6.8

9.4
12.7

5.7
12.4

6.9r
10.7

6.2
13'

9.5r
9.3r

8.3r
21.8r

10.9
29.8

9.9
5.0

13.1
4.8
19.5

22.6
2.5
8.0

12.7
-2.9
17.6

11.5
3.7r
16.8

9.6
5.4
16.3

17.5
6.2r
10.0

10.2
6.2r
21.4

17.4
5.6
49.6

16.7
8.0
16.9

-2.8
4.9
8.4

-.3
-2.3
6.4

8.1
-3.2
-3.0

-.2
— .6'
8.5

-.7
-2.7
12.7

-4.9
3.8r
9.4

-1.0
3.4r
18.8

3.3
6.8
13.8

-2.6
2.0
9.1

16.9
10.3

13.3
27.9

9.4
8.7

13.6
18.6

13.1
16.8

14.9
20.4

17.4
25.7

14.5
7.3

14.8
13.2

-12.7
-6.7

3.4
17.0

16.3
7.4

-4.2
-.3

-11.1
-17.2

-5.6
7.5

19.4
21.1

13.6
56.0

-17.1
-23.3

3.0
5.8

4.7
5.9

4.5
4.6r

1.0
4.8r

3.7
4.9

n.a.
n.a.

Nontransaction
10 In M2 5
11 In M3 only6

components

Time and savings deposits
Commercial banks
Savings, including MMDAs
Small time7
Large time 8 ' 9
Thrift institutions
15
Savings, including MMDAs
16
Small time7
17
Large time8

12
13
14

Money market mutual funds
18 Retail
19 Institution-only
Repurchase agreements and Eurodollars
20 Repurchase agreements10
21 Eurodollars10
Debt components4
22 Federal
23 Nonfederal

2.3
5.5r

1. Unless otherwise noted, rates of change are calculated from average amounts outstanding during preceding month or quarter.
2. Figures incorporate adjustments for discontinuities, or "breaks," associated with
regulatory changes in reserve requirements. (See also table 1.20.)
3. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally
adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency
component of the money stock, plus (3) (for all quarterly reporters on the "Report of
Transaction Accounts, Other Deposits and Vault Cash" and for all weekly reporters whose
vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference
between current vault cash and the amount applied to satisfy current reserve requirements.
4. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of
depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all
commercial banks other than those owed to depository institutions, the U.S. government, and
foreign banks and official institutions, less cash items in the process of collection and Federal
Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of
withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions,
credit union share draft accounts, and demand deposits at thrift institutions. Seasonally
adjusted Ml is computed by summing currency, travelers checks, demand deposits, and
OCDs, each seasonally adjusted separately.
M2: Ml plus (1) savings (including MMDAs), (2) small-denomination time deposits (time
deposits—including retail RPs—in amounts of less than $100,000), and (3) balances in retail
money market mutual funds (money funds with minimum initial investments of less than
$50,000). Excludes individual retirement accounts (IRAs) and Keogh balances at depository
institutions and money market funds. Seasonally adjusted M2 is calculated by summing
savings deposits, small-denomination time deposits, and retail money fund balances, each
seasonally adjusted separately, and adding this result to seasonally adjusted Ml.
M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more), (2)
balances in institutional money funds (money funds with minimum initial investments of
$50,000 or more), (3) RP liabilities (overnight and term) issued by all depository institutions,
and (4) Eurodollars (overnight and term) held by U.S. residents at foreign branches of U.S.
banks worldwide and at all banking offices in the United Kingdom and Canada. Excludes




3.8
5.5r

6.0
5.8r

4
|

amounts held by depository institutions, the U.S. government, money market funds, and
foreign banks and official institutions. Seasonally adjusted M3 is calculated by summing large
time deposits, institutional money fund balances, RP liabilities, and Eurodollars, each
seasonally adjusted separately, and 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: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial
sectors—the federal sector (U.S. government, not including government-sponsored enterprises or federally related mortgage pools) and the nonfederal sectors (state and local
governments, households and nonprofit organizations, nonfinancial corporate and nonfarm
noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and
corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data,
which are derived from the Federal Reserve Board's flow of funds accounts, are breakadjusted (that is, discontinuities in the data have been smoothed into the series) and
month-averaged (that is, the data have been derived by averaging adjacent month-end levels).
5. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail
money fund balances, each seasonally adjusted separately.
6. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities
(overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and
term) of U.S. addressees, each seasonally adjusted separately.
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, the U.S. government, and foreign banks and official institutions.
10. Includes both overnight and term.

Money Stock and Bank Credit A5
1.11

RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT 1
Millions of dollars
Average of
daily figures

Average of daily figures for week ending on date indicated

Oct. 16

Sept.

Oct. 23

Oct. 30

Nov. 6

Nov. 13

Nov. 20

SUPPLYING RESERVE FUNDS

1 Reserve Bank credit outstanding
U.S. government securities2
2
Bought outright—System account
3
Held under repurchase agreements
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements
6
Acceptances
Loans to depository institutions
7
Adjustment credit
8
Seasonal credit
9
Extended credit
10
Float
11
Other Federal Reserve assets
12 Gold stock
13 Special drawing rights certificate account
14 Treasury currency outstanding

427,377

426,254r

427,779

425,131'

428,123

429,842

387,118
4,540

386,942
3,042

392,296
3,219

387,116
3,945

387,020
3,634

386,640
2,251

386,486
4,904

393,581
429

2,319
824

2,289
1,434

2,245
967

2,309
1,624

2,288
1,782

2,249
1,652

2,247
1,874

2,247
228

0

0

95
310

50
212

77
105

158
213

4
197

5
181

9
126

109

63
106

595
31,577

704r
31,580r

789
31,155

907
31,638

1,136
31,718

402r
31,751'

504
31,972

1,260
31,981

799
30,489

11,050
9,718
24,739

11,049
9,718
24,800

11,049
9,718
24,862

11,049
9,718
24,794

11,049
9,718
24,808

11,049
9,718
24,822

11,049
9,718
24,836

11,049
9,718
24,850

11,049
9,718
24,864

431,635
282

432,734
287

436,949
276

433,891
292

433,263
281

432,201
281

433,764
280

436,538
277

437,167
275

6,139
176
6,379
357
14,088
13,828

5,064
174
6,655r
373
13,883
12,651r

4,939
169
6,896
352
14,263
12,637

4,885
178
6,799
381
13,834
13,211

5,414
166
6,659
358
14,139
13,075

5,228
182
6,666'
378
14,146
11,637'

5,013
170
7,004
370
14,060
13,064

4,905
166
6,794
359
14,152
12,268

5,039
173
6,774
364
14,457
13,550

0
0

0

0

0

0

0
0

0
0

0

0

0

0

0

393,796
3,982

0

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'

Wednesday figures

End-of-month figures
Sept.

Oct. 30

Nov. 6

Nov. 13

SUPPLYING RESERVE FUNDS

1 Reserve Bank credit outstanding
U.S. government securities
2
Bought outright—System account
3
Held under repurchase agreements
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements
6
Acceptances
Loans to depository institutions
7
Adjustment credit
8
Seasonal credit
9
Extended credit
10
Float
11
Other Federal Reserve assets
12 Gold stock
13 Special drawing rights certificate account
14 Treasury currency outstanding

437,679

437,240

427,170

434,727

426,869'

433,040

383,910
7,014

385,087
7,830

392,662
7,548

387,055
1,255

386,616
9,332

387,585
2,680

387,367
7,270

393,765

393,430
8,475

2,309
1,338

2,247
2,970

2,237
2,763

2,309
824

2,260
2,897

2,247
2,120

2,247
2,375

2,247

2,247
1,725

1,360
294

6
157

111
76

704
205

12
189

5
180

3

110
0

372
99

640
31,302

312r
31,994r

0

17
112

951
30,892

3,395
31,422

981
32,440

100'
31,952'

1,352
32,316

4,295
32,113

1,158
30,173

11,050
9,718
24,766

11,049
9,718
24,836

11,049
9,718
24,892

11,049
9,718
24,794

11,049
9,718
24,808

11,049
9,718
24,822

11,049
9,718
24,836

11,049
9,718
24,850

11,049
9,718
24,864

430,394
286

433,238
281

440,914
273

434,677
281

433,308
281

433,379
281

435,668
278

437,994
276

437,742
272

7,700
265
6,539
368
13,744
14,406

5,897
176
7,004'
363
14,066
15,181'

4,857
170
7,110
292
14,219
15,064

3,594
165
6,799
366
13,660
13,190

5,337
168
6,659
364
13,937
20,249

5,388
165
6,666'
330
13,884
12,366'

5,774
166
7,004
362
13,866
15,526

4,512
169
6,794
346
13,964
14,111

5,119
183
6,774
366
14,212
18,644

428,168

0
0

0
0

0
0

0

0

0
0

0

0

0

0
0
0

0
0

ABSORBING RESERVE F U N D S

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'

1. Amounts of cash held as reserves are shown in table 1.12, line 2.
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.

Nov. 27

A6

Domestic Financial Statistics • February 1997

t.12

RESERVES AND BORROWINGS

Depository Institutions1

Millions of dollars
Prorated monthly averages of biweekly averages
1993

1994

1995

Dec.

Dec.

Dec.

May

June

July

Aug.

Sept.

Oct.

Nov.

29,374
36,818
33,484
3,334
62,858
61,795
1,063
82
31
0

24,658
40,378
36,682
3,696
61,340
60,172
1,168
209
100
0

20,440
42,088
37,460
4,628
57,900
56,622
1,278
257
40
0

16,753
41,146
36.382
4,764
53,135
52,275
860
127
105
0

16,590
41,979
37,095
4,883
53,686
52,535
1,150
386
192
0

15,392
42,773
37,451
5,322
52,843
51,778
1,065
368
284
0

14,761
42,517
36,880
5,637
51,642
50,681
961
334
309
0

13,688
43,639
37,309
6,330
50,997
49,959
1,038
368
306
0

12,800r
42,913
36,749r
6,164
49,550r
48,556r
994
287
212
0

12,881
42,737
36,854
5,883
49,735
48,715
1,021
214
109
0

Reserve classification

1
2
3
4
5
6
7
8
9
10

Reserve balances with Reserve Banks2
Total vault cash3
Applied vault cash 4
Surplus vault cash 5
Total reserves6
'
Required reserves
Excess reserve balances at Reserve Banks7
Total borrowings at Reserve Banks8
Seasonal borrowings
Extended credit9

1996

Biweekly averages of daily figures for two week periods ending on dates indicated
1996

1
2
3
4
5
6
7
8
9
10

Reserve balances with Reserve Banks2
Total vault cash3
Applied vault cash 4
Surplus vault cash 5
Total reserves6
Required reserves
Excess reserve balances at Reserve Banks7
Total borrowings at Reserve Banks8
Seasonal borrowings
Extended credit9

July 31

Aug. 14

Aug. 28

Sept. 11

Sept. 25

Oct. 9

Oct. 23

Nov. 6 r

Nov. 20

Dec. 4

14,448
43,492
37,740
5,752
52,188
50,964
1,223
442
304
0

14,940
43,326
37,604
5,722
52,544
51,514
1,029
306
290
0

14,613
41,604
36,114
5,490
50,726
49,835
891
349
328
0

14,623
43,007
37,083
5,924
51,705
50,741
964
394
308
0

13,324
44,028
37,505
6,523
50,829
49,745
1,084
335
317
0

12,653
43,941
37,258
6,683
49,911
48,839
1,072
402
274
0

13,141
42,196
36,267
5,929
49,408
48,470
938
286
205
0

12,371
43,013
37,021
5,992
49,392
48,388
1,004
161
154
0

12,914
42,497
36,768
5,729
49,682
48,678
1,004
143
108
0

13,143
42,908
36,874
6,034
50,017
48,963
1,054
346
86
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. Data are not break-adjusted or seasonally adjusted.
2. Excludes required clearing balances and adjustments to compensate for float and
includes other off-balance-sheet "as-of' 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 may 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.

1.13

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 effect of extended credit is
similar to that of nonborrowed reserves.

SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS

Large Banks1

Millions of dollars, averages of daily figures
1996, 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

Sept. 30

Oct. 7

Oct. 14

Oct. 21

Oct. 28

Nov. 4

Nov. 11

Nov. 18

Nov. 25

71,817
15,154

73,330
15,306

72,201
16,965

72,887
16,168

71,752r
16,576

83,017
15,678

85,282
15,144

86,493
15,001

81,974
15,895

15,419
19,277

15,857
19,255

19,483
17,812

15,192
18,432

14,466
19,023

18,374
18,015

21,104
18,894

18,616
18,894

17,421
18,976

17,772
36,037

17,002
36,853

16,570
37,152

18,957
35,978

17,104
36,034

18,184
34,934

18,228
34,302

20,466
32,556

18,998
32,243

40,007
13,730

40,916
14,084

42,297
14,588

41,575
14,137

41,046
14,134

41,867
14,024

41,395
13,878

43,135
13,525

41,956
13,461

64,758
23,324

62,470
23,066

59,218
23,302

62,154
24,890

62,229r
22,879

70,222
24,108

69,818
23,756

72,489
25,456

70,607
22,362

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 customers2

1. Banks with assets of $4 billion or more as of Dec. 31, 1988.
Data in this table also appear in the Board's H.5 (507) weekly statistical release. For
ordering address, see inside front cover.




2. Brokers and nonbank dealers in securities, other depository institutions, foreign banks
and official institutions, and U.S. government agencies,

Policy Instruments
1.14

A7

FEDERAL RESERVE BANK INTEREST RATES
Percent per year
Current and previous levels
Adjustment credit1

Federal Reserve
Bank

Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta

On
1/3/97

Extended credit'

Effective date

Previous rate

On
1/3/97

Effective date

Previous rate

On
1/3/97

Effective date

Previous rate

2/1/96
1/31/96
1/31/96
1/31/96
2/1/96
1/31/96

5.25

5.40

1/2/97

5.35

5.90

1/2/97

5.85

5.25

5.40

1/2/97

5.35

5.90

1/2/97

5.85

5.00

Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

Seasonal credit2

2/1/96
2/5/96
1/31/96
2/1/96
1/31/96
1/31/96

5.00

Range of rates for adjustment credit in recent years4
Range (or
level)—All
F.R. Banks

F.R. Bank
of
N.Y.

9
20
11
12
3
10
21
22
16
20
1
3

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

6.5
6.5
7
7
7.25
7.25
7.75
8
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
July 28
29
Sept. 26
Nov. 17
Dec. 5
8
1981—May 5

12-13
13
12-13
12
11-12

In effect Dec. 31, 1977
1978—Jan.
May
July
Aug.
Sept.
Oct.
Nov.

11

10-11
10
11
12
12-13
13
13-14
14

10
10.5
10.5

Effective date

F.R. Bank
of
N.Y.

1981—Nov. 2
6
Dec. 4

13-14
13
12

1982—July 20
23
Aug. 2
3
16
27
30
Oct. 12
13
Nov. 22
26
Dec. 14

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
13
Nov. 21
26
Dec. 24

8.5-9
9
8.5-9
8.5
8

9
9
8.5
8.5
8

1985—May 20
24

7.5-8
7.5

7.5
7.5

1986—Mar. 7
10
Apr. 21
23.
July 11
Aug. 21
22

7-7.5
7
6.5-7
6.5
6
5.5-6
5.5

7
7
6.5
6.5
6
5.5
5.5

1987—Sept. 4

5.5-6
6

6
6

15

17

13
13
12

Effective date

Range (or
level)—All
F.R. Banks

F.R. Bank
of
N.Y.

1988—Aug. 9
11

6-6.5
6.5

6.5
6.5

1989—Feb. 24
27

6.5-7
7

7
7

1990—Dec. 19
1991—Feb.

1
4
Apr. 30
May 2
Sept. 13
17
Nov. 6
7
Dec. 20
24

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

11

11
12
12
13
13
13
12
11
11

10
10
11

12

13
13
14
14

1984—Apr.

1992—July

2
7

3-3.5
3

3
3

1994—May 17
18
Aug. 16
18
Nov. 15
17

3-3.5
3.5
3.5-4
4
4-4.75
4.75

3.5
3.5
4
4
4.75
4.75

1
9

4.75-5.25
5.25

5.25
5.25

1996—Jan. 31
Feb. 5

5.00-5.25
5.00

5.00
5.00

5.00

5.00

1995—Feb.

In effect Jan. 3, 1997
11

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 charged by 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 ordinarily is
charged on extended-credit loans outstanding less than thirty days; however, at the discretion




Range (or
level)—All
F.R. Banks

of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a
flexible rate somewhat above rates charged 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, 19701979.
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.

A8

Domestic Financial Statistics • February 1997

1.15

RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS 1
Requirement
Type of deposit
Percentage of
deposits

1

Net transaction accounts2
$0 million-$49.3 million 3

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 the Monetary Control Act of 1980, 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. Transaction accounts include all deposits against which the account holder is permitted
to make withdrawals by negotiable or transferable instruments, payment orders of withdrawal, or telephone or preauthorized transfers for the purpose of making payments to third
persons or others. However, accounts subject to the rules that permit no more than six
preauthorized, automatic, or other transfers per month (of which no more than three may be
by check, draft, debit card, or similar order payable directly to third parties) are savings
deposits, not transaction accounts.
3. 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 of each year. Effective with the reserve maintenance period beginning January 2,
1997, for depository institutions that report weekly, and with the period beginning January 16,
1997, for institutions that report quarterly, the amount was decreased from $52.0 million to
$49.3 million.
Under the Garn-St Germain Depository Institutions Act of 1982, the Board adjusts the
amount of reservable liabilities subject to a zero percent reserve requirement each year for the




Effective date

3
10

1/2/97
1/2/97

0

12/27/90

0

12/27/90

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 made in the event of a decrease. The exemption applies only to
accounts that would be subject to a 3 percent reserve requirement. Effective with the reserve
maintenance period beginning January 2, 1997, for depository institutions that report weekly,
and with the period beginning January 16, 1997, for institutions that report quarterly, the
exemption was raised from $4.3 million to $4.4 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 1 /2 years was reduced from 3 percent to 1 Vi percent for
the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that
began Dec. 27, 1990. 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.
The reserve requirement on nonpersonal time deposits with an original maturity of l ' / i
years or more has been zero since Oct. 6, 1983.
6. The reserve requirement on Eurocurrency liabilities was reduced from 3 percent to zero
in the same manner and on the same dates as the reserve requirement on nonpersonal time
deposits with an original maturity of less than 1 Vi years (see note 5).

Policy Instruments

A9

1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS 1
M i l l i o n s o f dollars

1996
Type of transaction
and maturity

1993

1994

1995
Apr.

May

June

July

Aug.

Sept.

Oct.

U.S. TREASURY SECURITIES

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24

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

Matched
transactions
25 Gross purchases
26 Gross sales
Repurchase
agreements
27 Gross purchases
28 Gross sales
29 Net change in U.S. Treasury securities

17,717
0
332,229
0

17,484
0
376,277
0

10,932
0
398,487
900

88
0
32,218
0

0
0
40,467
0

3,311
0
31,726
0

0
0
32,368
0

0
0
34,271
0

0
0
32,791
0

0
0
38,661
0

1,223
0
31,368
-36,582
0

1,238
0
0
-21,444
0

390
0
0
0
0

35
0
3,511
-4,824
787

0
0
5,107
-5,448
0

0
0
0
0
0

0
0
2,807
-4,415
0

1,240
0
2,780
-3,580
0

0
0
2,371
-2,890
0

0
0
1,623
-1,770
0

10,350
0
-27,140
0

9,168
0
-6,004
17,801

4,966
0
0
0

1,899
0
-3,511
4,824

0
0
-4,049
3,748

0
0
0
0

0
0
-2,807
3,694

1,279
0
-1,409
1,780

0
0
-2,371
2,890

0
0
-1,623
1,395

4,168
0
0
0

3,818
0
-3,145
2,903

1,239
0
0
0

479
0
0
0

0
0
-1,058
1,700

0
0
0
0

0
0
0
721

297
0
-1,371
900

0
0
0
0

0
0
0
375

3,457
0
0
0

3,606
0
-918
775

3,122
0
0
0

1,065
0
0
0

0
0
0
0

0
0
0
0

0
0
0
0

900
0
0
900

0
0
0
0

0
0
0
0

36,915
0
767

35,314
0
2,337

20,649
0
2,376

3,566
0
787

0
0
0

3,311
0
0

0
0
0

3,716
0
0

0
0
0

0
0
0

1,475,941
1,475,085

1,700,836
1,701,309

2,197,736
2,202,030

253,482
251,510

259,135
259,595

248,534
249,277

267,438
268,975

265,397
264,536

234,992
238,036

268,304
267,128

475,447
470,723

309,276
311,898

331,694
328,497

46,449R
50,345

30,688
24,984R

43,048
41,666

46,151
37,779

45,202
56,286

36,014
33,374

33,836
33,020

41,729

29,882

17,175

854R

5,244R

3,950

6,836

-6,508

-404

1,993

0
0
774

0
0
1,002

0
0
1,303

0
0
82

0
0
16

0
0
40

0
0
52

0
0
0

0
0
27

0
0
63

35,063
34,669

52,696
52,696

36,851
36,776

2,372
3,372

5,722
4,372

4,113R
6,488

3,145
2,863

8,500
7,544

4,536
4,436

12,683
11,051

-380

-1,002

-1,228

-1,082

FEDERAL AGENCY OBLIGATIONS
Outright transactions
30 Gross purchases
31 Gross sales
32 Redemptions
Repurchase
agreements
33 Gross purchases
34 Gross sales
35 Net change in federal agency obligations
36 Total net change in System Open Market A c c o u n t . . .

41,348

28,880

15,948

1. Sales, redemptions, and negative figures reduce holdings of the System Open Market
Account; all other figures increase such holdings.




—228

1,334
r

6,578

r

—2,415R

231

956

73

1,569

l,535 r

7,066

-5,552

-331

3,562

A10
1.18

Domestic Financial Statistics • February 1997
FEDERAL RESERVE BANKS

Condition and Federal Reserve Note Statements1

Millions of dollars

Account
Oct. 30

Nov. 6

Wednesday

End of month

1996

1996

Nov. 13

Nov. 20

Nov. 27

Sept. 30

Oct. 31

Nov. 30

Consolidated condition statement

ASSETS

1 Gold certificate account
2 Special drawing rights certificate account
3 Coin
Loans
4 To depository institutions
5 Other
6 Acceptances held under repurchase agreements
Federal agency obligations
7 Bought outright
8 Held under repurchase agreements

11,049
9,718
616

11,049
9,718
618

11,049
9,718
623

11,049
9,718
624

11,049
9,718
619

11,050
9,718
596

11,049
9,718
621

11,049
9,718
621

185
0
0

113
0
0

129
0
0

471
0
0

93
0
0

1,654
0
0

162
0
0

188
0
0

2,247
2,120

2,247
2,375

2,247
0

2,247
1,725

2,237
2,323

2,309
1,338

2,247
2,970

2,237
2,763

390,265

394,637

393,765

401,905

398,755

390,924

392,917

400,210

10 Bought outright2
11
Bills
12
Notes
13
Bonds
14 Held under repurchase agreements

387,585
187,325
152,392
47,869
2,680

387,367
187,106
152,392
47,869
7,270

393,765
193,504
152,392
47,869
0

393,430
193,169
150,922
49,339
8,475

392,767
192,507
150,922
49,339
5,988

383,910
183,650
152,392
47,869
7,014

385,087
184,826
152,392
47,869
7,830

392,662
192,401
150,922
49,339
7,548

15 Total loans and securities

394,817

399,372

396,140

406,347

403,407

396,226

398,296

405,397

6,458
1,214

7,748
1,216

13,208
1,217

7,000
1,221

6,682
1,221

2,521
1,207

5,646
1,215

3,609
1,221

19,518
11,352

19,518
11,707

19,526
11,464

19,534
9,488

19,542
10,013

19,484
10,679

19,511
11,442

19,338
10,332

454,742

460,946

462,945

464,981

462,251

451,481

457,498

461,286

9 Total U.S. Treasury securities

16 Items in process of collection
17 Bank premises
Other assets
18 Denominated in foreign currencies
19 All other4
20 Total assets
LIABILITIES

409,453

411,728

414,042

413,774

416,966

406,510

409,304

416,915

22 Total deposits

25,923

29,303

26,084

31,042

25,309

29,331

29,754

27,450

23
24
25
26

20,041
5,388
165
330

23,001
5,774
166
362

21,057
4,512
169
346

25,376
5,119
183
366

20,158
4,688
164
299

20,997
7,700
265
368

23,317
5,897
176
363

22,131
4,857
170
292

5,482
4,475

6,050
4,443

8,855
4,467

5,954
4,709

5,811
4,666

1,897
4,515

4,375
4,598

2,702
4,730

445,333

451,523

453,448

455,479

452,752

442,252

448,031

451,796

4,565
3,860
984

4,577
3,860
986

4,577
3,860
1,059

4,581
3,860
1,061

4,587
3,860
1,052

4,535
3,958
736

4,565
3,860
1,042

4,587
3,860
1,043

454,742

460,946

462,945

464,981

462,251

451,481

457,498

461,286

596,136

600,971

603,941

607,563

610,668

590,730

600,425

614,599

21 Federal Reserve notes

Depository institutions
U.S. Treasury—General account
Foreign—Official accounts
Other

27 Deferred credit items
28 Other liabilities and accrued dividends
29 Total liabilities
CAPITAL A C C O U N T S

30 Capital paid in
31 Surplus
32 Other capital accounts
33 Total liabilities and capital accounts

MEMO

34 Marketable U.S. Treasury securities held in custody for
foreign and international accounts

Federal Reserve note statement
35 Federal Reserve notes outstanding (issued to Banks)
36
LESS: Held by Federal Reserve Banks
37
Federal Reserve notes, net
38
39
40
41

Collateral held against notes, net
Gold certificate account
Special drawing rights certificate account
Other eligible assets
U.S. Treasury and agency securities

42 Total collateral

530,439
120,986
409,453

530,703
118,975
411,728

530,522
116,479
414,042

530,248
116,474
413,774

529,445
112,479
416,966

533,392
126,882
406,510

530,917
121,613
409,304

529,197
112,282
416,915

11,049
9,718
0
388,686

11,049
9,718
0
390,960

11,049
9,718
0
393,275

11,049
9,718
0
393,007

11,049
9,718
0
396,199

11,050
9,718
0
385,742

11,049
9,718
0
388,537

11,049
9,718
0
396,148

409,453

411,728

414,042

413,774

416,966

406,510

409,304

416,915

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.

Federal Reserve Banks
1.19

FEDERAL RESERVE BANKS

All

Maturity Distribution of Loan and Security Holding

Millions of dollars

Type of holding and maturity

Wednesday

End of month

1996

1996
Nov. 20

Nov. 27

Sept. 30

Oct. 31

Nov. 30

129

471

93

1,654

186

188

38
91

464
7

87
6

1,508
145

171
15

140
48

394,637

393,765

401,905

398,755

383,910

385,087

392,662

27,714
83,344
113,893
95,303
34,028
40,356

18,010
93,258
112,810
95,303
34,028
40,356

18,434
91,814
120,133
95,917
33,782
41,826

21,270
85,628
120,333
95,917
33,782
41,826

7,494
91,276
115,601
95,531
33,653
40,356

11,135
83,090
121,176
95,302
34,028
40,356

7,741
92,763
120,633
95,917
33,782
41,826

4,367

4,622

2,247

3,972

4,560

2,309

2,247

2,237

2,274
806
275
520
467
25

2,375
967
268
520
467
25

10
957
268
520
467
25

2,062
630
268
520
467
25

2,662
644
242
520
467
25

335
566
477
440
467
25

154
806
275
520
467
25

339
644
242
520
467
25

Oct. 30

Nov. 6

Nov. 13

1 Total loans

185

113

2 Within fifteen days1
3 Sixteen days to ninety days

167
18

22
91

390,265
18,935
88,745
113,426
94,775
34,028
40,356

11 Total federal agency obligations
12
13
14
15
16
17

4 Total U.S. Treasury securities
5
6
7
8
9
10

Within fifteen days'
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

Within fifteen days'
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.




NOTE. Total acceptances data have been deleted from this table because data are no longer
available.

A12
1.20

Domestic Financial Statistics • February 1997
AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE 1
Billions of dollars, averages of daily figures
1996
Item

1992
Dec.

1993
Dec.

1994
Dec.

1995
Dec.
Apr.

Total reserves 3
Nonborrowed reserves 4
Nonborrowed reserves plus extended credit 5
Required reserves
Monetary base 6

June

July

Aug.

Sept.

Oct. r

Nov.

53.20
52.83
52.83
52.13
441.88

52.27
51.94
51.94
51.31
444.20

51.35
50.98
50.98
50.31
445.86

50.14
49.85
49.85
49.14
447.16

49.85
49.64
49.64
48.83
449.30

Seasonally adjusted

A D J U S T E D FOR
C H A N G E S IN R E S E R V E R E Q U I R E M E N T S 2

1
2
3
4
5

May

54.37
54.24
54.24
53.21
351.24

60.52
60.44
60.44
59.46
386.88

59.36
59.16
59.16
58.20
418.72

56.36
56.11
56.11
55.09
435.01

55.18
55.09
55.09
54.06
436.64

54.23
54.10
54.10
53.37
437.01

54.11
53.73
53.73
52.96
439.09

Not seasonally adjusted
6
7
8
9
10

Total reserves 7
Nonborrowed reserves
Nonborrowed reserves plus extended credit 5
Required reserves 8
Monetary base 9

56.06
55.93
55.93
54.90
354.55

62.37
62.29
62.29
61.31
390.59

61.13
60.92
60.92
59.96
422.51

58.02
57.76
57.76
56.74
439.03

56.00
55.90
55.90
54.88
437.12

53.29
53.16
53.16
52.43
436.13

53.87
53.48
53.48
52.72
439.89

53.05
52.69
52.69
51.99
443.22

51.88
51.55
51.55
50.92
444.58

51.27
50.90
50.90
50.23
445.53

49.85
49.56
49.56
48.85
445.41

50.06
49.85
49.85
49.04
449.23

56.54
56.42
56.42
55.39
360.90
1.16
.12

62.86
62.78
62.78
61.80
397.62
1.06
.08

61.34
61.13
61.13
60.17
427.25
1.17
.21

57.90
57.64
57.64
56.62
444.45
1.28
.26

55.87
55.78
55.78
54.75
442.96
1.12
.09

53.14
53.01
53.01
52.28
442.17
.86
.13

53.69
53.30
53.30
52.54
445.95
1.15
.39

52.84
52.48
52.48
51.78
449.29
1.07
.37

51.64
51.31
51.31
50.68
450.77
.96
.33

51.00
50.63
50.63
49.96
451.70
1.04
.37

49.55
49.26
49.26
48.56
451.88
.99
.29

49.74
49.52
49.52
48.72
455.87
1.02
.21

N O T ADJUSTED FOR
CHANGES IN R E S E R V E R E Q U I R E M E N T S 1 0

11
12
13
14
15
16
17

Total reserves"
Nonborrowed reserves
Nonborrowed reserves plus extended credit 5
Required reserves
Monetary base 12
Excess reserves 13
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 starting in 1959 and estimates of the elfect on required
reserves of changes in reserve requirements are available from the Money and Reserves
Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve
System, Washington, DC 20551.
2. Figures reflect adjustments for discontinuities, or "breaks," associated with regulatory
changes in reserve requirements. (See also table 1.10.)
3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, breakadjusted 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 short-term adjustment credit, the money market effect
of extended credit is similar to that of nonborrowed reserves.
6. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally
adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency
component of the money stock, plus (3) (for all quarterly reporters on the "Report of
Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters
whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted
difference between current vault cash and the amount applied to satisfy current reserve
requirements.
7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) plus excess
reserves (line 16).




8. To adjust required reserves for discontinuities that are due to regulatory changes in
reserve requirements, a multiplicative procedure is used to estimate what required reserves
would have been in past periods had current reserve requirements been in effect. Breakadjusted required reserves include required reserves against transactions deposits and nonpersonal time and savings deposits (but not reservable nondeposit liabilities).
9. The break-adjusted monetary base equals (1) break-adjusted total reserves (line 6), plus
(2) the (unadjusted) currency component of the money stock, plus (3) (for all quarterly
reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all
those weekly reporters whose vault cash exceeds their required reserves) the break-adjusted
difference between current vault cash and the amount applied to satisfy current reserve
requirements.
10. Reflects actual reserve requirements, including those on nondeposit liabilities, with no
adjustments to eliminate the effects of discontinuities associated with regulatory changes in
reserve requirements.
11. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserve
requirements.
12. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1) total
reserves (line 11), plus (2) required clearing balances and adjustments to compensate for float
at Federal Reserve Banks, plus (3) the currency component of the money stock, plus (4) (for
all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault
Cash" and for all those weekly reporters whose vault cash exceeds their required reserves) the
difference between current vault cash and the amount applied to satisfy current reserve
requirements. Since the introduction of contemporaneous reserve requirements in February
1984, 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).

Monetary and Credit Aggregates
1.21

A13

MONEY STOCK, LIQUID ASSETS, A N D DEBT MEASURES 1
Billions of dollars, averages of daily figures
1996
Item

1992
Dec.

1993
Dec.

1994
Dec.

1995
Dec.
Aug.

Sept.

Oct.'

Nov.

1,091.1
3,764.7'
4,780.6'
5,922.8'
14,414.3'

1,075.8
3,773.7
4,814.7
5,942.0
14,469.8

1,075.9
3,796.0
4,841.3
n.a.
n.a.

Seasonally adjusted
Measures2
1,128.6
3,494.0
4,249.6
5,164.5
12,506.5r

1,148.7
3,509.2
4,319.2
5,302.9
13,148.4r

1,124.9
3,657.4
4,572.4
5,681.9
13,866.9r

1,099.1
3,754.4 r
4,752.1'
5,881.9 r
14,368.9'

292.9
8.1
339.1
384.2

322.4
7.9
384.3
414.0

354.9
8.5
382.4
402.9

373.2
8.9
389.8
353.0

385.0
8.4
407.3
298.4

387.5
8.4
405.3
290.0

390.3
8.5
396.1
280.9

392.6
8.6
400.6
274.1

2,414.3
748.5

2,365.4
755.6

2,360.5
810.0

2,532.6
914.9

2,655.3'
997.7

2,673.6'
1,015.8'

2,697.9
1,041.0

2,720.1
1,045.3

Commercial banks
12 Savings deposits, including MMDAs
13 Small time deposits 9
14 Large time deposits •

754.1
509.3
286.5

785.0
470.3
272.2

751.9
505.3
298.3

775.0
578.3
342.1

857.2
580.6'
375.3

864.5
583.6'
382.0

877.0
586.3
397.8

889.2
590.2
403.4

Thrift institutions
15 Savings deposits, including MMDAs
16 Small time deposits 9
17 Large time deposits 10

433.0
361.9
67.1

433.8
317.6
61.5

397.0
318.2
64.8

359.5
359.4
75.1

367.1
352.8'
76.8

366.8
353.8'
78.0

367.8
355.8
78.9

367.0
356.4
79.5

Money market mutual funds
18 Retail
19 Institution-only

356.0
199.8

358.7
197.9

388.1
183.7

460.3
227.2

497.7
257.2

504.9
262.7

511.0
264.3

517.3
267.2

Repurchase agreements and Eurodollars
20 Repurchase agreements
21 Eurodollars 12

128.1
66.9

157.5
66.3

180.9
82.3

179.4
91.1

191.6
96.8

194.7
98.5

196.9
103.1

194.1
101.1

3,064.3
8,816.4 r

3,323.3
9,183.1'

3,492.2
9,656.2 r

3,638.8
10,228.1'

3,743.4
10,625.5'

3,746.5'
10,667.8'

3,758.2
10,711.6

n.a.
n.a.

1,024.4
3,438.7
4,187.1
5,075.6
1 l,880.7 r

2
3
4
5

M2
M3
L
Debt

6
7
8
9

Ml components
Currency 3
Travelers checks 4
Demand deposits 5
Other checkable deposits 6

Nontransaction
10 In M2 7
11 In M3 only 8

components

Debt components
22 Federal debt
23 Nonfederal debt

Not seasonally adjusted
Measures2
1,046.0
3,455.1
4,205.1
5,102.9
ll,882.3 r

1,153.7
3,514.1
4,271.2
5,194.1
12,508.5r

1,174.2
3,529.6
4,340.9
5,332.3
13,150.0r

1,150.7
3,677.1
4,593.4
5,711.4
13,867.4r

1,095.0
3,758.4'
4,758.2'
5,885.1'
14,317.9'

1,088.6
3,761.8'
4,775.4'
5,907.5'
14,377.1'

1,075.2
3,769.4
4,815.5
5,933.3
14,434.3

1,083.7
3,801.9
4,855.4
n.a.
n.a.

295.0
7.8
354.4
388.9

324.8
7.6
401.8
419.4

357.5
8.1
400.1
408.4

376.1
8.5
407.9
358.1

385.9
9.0
404.9
295.2

386.8
8.8
404.5
288.4

389.0
8.6
399.1
278.5

392.8
8.4
408.3
274.1

2,409.1
750.0

2,360.4
757.1

2,355.4
811.4

2,526.4
916.3

2,663.4'
999.8

2,673.2'
1,013.6

2,694.2
1,046.1

2,718.2
1,053.6

Commercial banks
35 Savings deposits, including MMDAs
36 Small time deposits 9
37 Large time deposits 10, 11

752.9
507.8
286.0

784.3
468.2
272.0

751.6
502.3
298.1

775.0
574.3
342.0

860.3
582.0'
376.1

866.9
583.6'
382.7

878.9
585.4
400.9

892.9
587.1
407.0

Thrift institutions
38 Savings deposits, including MMDAs
39 Small time deposits 9
40 Large time deposits 10

432.4
360.9
67.0

433.4
316.1
61.5

396.9
316.3
64.8

359.5
356.9
75.1

368.4
353.6'
76.9

367.8
353.8'
78.1

368.6
355.3
79.5

368.5
354.6
80.2

Money market mutual funds
41 Retail
42 Institution-only

355.1
201.1

358.3
199.4

388.2
185.5

460.6
229.4

499.1
256.9

501.1
258.0

506.0
262.6

515.2
269.9

Repurchase agreements and Eurodollars
43 Repurchase agreements 12
44 Eurodollars' 2

127.2
68.7

156.6
67.6

179.6
83.4

178.0
91.9

192.7
97.2

195.7
99.0

198.8
104.3

193.6
102.8

3,069.8
8,812.5 r

3,329.5
9,179.0 r

3,499.0
9,651.0 r

3,645.9
10,221.4r

3,736.1
10,641.1'

3,740.9
10,693.4

25 M2
28 Debt
29
30
31
32

Ml components
Currency 3
Travelers checks 4
Demand deposits
Other checkable deposits 6

Nontransaction
33 In M2 7
34 In M3 only 8

components

Debt components
45 Federal debt
46 Nonfederal debt
Footnotes appear on following page.




3,730.9
10,587.0'

n.a.
n.a.

A14

Domestic Financial Statistics • February 1997

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 starting in 1959 are available from the Money and Reserves
Projections 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:
M l : (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) savings deposits (including MMDAs), (2) small-denomination time
deposits (time deposits—including retail RPs—in amounts of less than $100,000), and (3)
balances in retail money market mutual funds (money funds with minimum initial investments of less than $50,000). Excludes individual retirement accounts (IRAs) and Keogh
balances at depository institutions and money market funds. Seasonally adjusted M2 is
calculated by summing savings deposits, small-denomination time deposits, and retail money
fund balances, each seasonally adjusted separately, and adding this result to seasonally
adjusted M l .
M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more)
issued by all depository institutions, (2) balances in institutional money funds (money funds
with minimum initial investments of $50,000 or more), (3) RP liabilities (overnight and term)
issued by all depository institutions, and (4) Eurodollars (overnight and term) held by U.S.
residents at foreign branches of U.S. banks worldwide and at all banking offices in the United
Kingdom and Canada. Excludes amounts held by depository institutions, the U.S. government, money market funds, and foreign banks and official institutions. Seasonally adjusted
M3 is calculated by summing large time deposits, institutional money fund balances, RP
liabilities, and Eurodollars, each seasonally adjusted separately, and 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: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial
sectors—the federal sector (U.S. government, not including government-sponsored enterprises or federally related mortgage pools) and the nonfederal sectors (state and local
governments, households and nonprofit organizations, nonfinancial corporate and nonfarm
noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and
corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data,
which are derived from the Federal Reserve Board's flow of funds accounts, are breakadjusted (that is, discontinuities in the data have been smoothed into the series) and
month-averaged (that is, the data have been derived by averaging adjacent month-end levels).
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) savings deposits (including MMDAs), (2) small time deposits, and (3) retail
money fund balances.
8. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities
(overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and
term) of U.S. addressees.
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, the U.S. government, and foreign banks and official institutions.
12. Includes both overnight and term.

Monetary and Credit Aggregates
1.22

A15

Commercial and BIF-insured saving banks1

DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING

1996
1994

1995

Dec.

Dec.
Mar.

Apr.

May

June

July

Aug.

Sept. r

Oct. r

Nov.

Interest rates (annual effective yields) 2

INSURED COMMERCIAL B A N K S

1 Negotiable order of withdrawal accounts
2 Savings deposits 3

3
4
5
6
7

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 x/2 years
More than 2vl years

1.96
2.92

1.91
3.10

1.85
2.91

1.88
2.91

1.88
2.89

1.89
2.87

1.90
2.88

1.91
2.86

1.90
2.84

1.91
2.85

1.98
2.85

3.79
4.44
5.12
5.74
6.30

4.10
4.68
5.02
5.17
5.40

4.02
4.49
4.83
4.94
5.19

4.01
4.51
4.86
5.03
5.28

4.03
4.51
4.88
5.10
5.36

4.08
4.55
4.95
5.18
5.46

4.13
4.59
5.00
5.25
5.50

4.17
4.60
5.00
5.25
5.50

4.11
4.61
5.04
5.29
5.54

4.11
4.60
5.02
5.27
5.52

4.10
4.60
4.99
5.23
5.48

1.94
2.87

1.91
2.98

1.83
2.86

1.84
2.85

1.81
2.84

1.80
2.86

1.81
2.88

1.81
2.86

1.84
2.84

1.90
2.80

1.92
2.82

3.80
4.89
5.52
6.09
6.43

4.43
4.95
5.18
5.33
5.46

4.37
4.76
4.89
5.15
5.24

4.42
4.77
4.91
5.23
5.32

4.49
4.83
4.96
5.26
5.38

4.54
4.91
5.02
5.35
5.51

4.64
5.01
5.09
5.41
5.60

4.64
5.06
5.26
5.59
5.80

4.59
5.11
5.33
5.61
5.82

4.64
5.08
5.32
5.60
5.79

4.67
5.03
5.29
5.56
5.76

B I F - I N S U R E D SAVINGS B A N K S 4

8 Negotiable order of withdrawal accounts
9 Savings deposits 3

10
11
12
13
14

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 years
More than 2 Y2 years

Amounts outstanding (millions of dollars)

INSURED C O M M E R C I A L B A N K S

15 Negotiable order of withdrawal accounts
16 Savings deposits 3
17
Personal
18
Nonpersonal

19
20
21
22
23

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 2V5 years
More than 2V5 years

24 IRA and Keogh plan deposits

304,896
737,068
580,438
156,630

248,417
776,466
615,113
161,353

218,500
827,561
661,686
165,875

228,551
805,419
639,848
165,572

208,570
839,319
668,788
170,531

201,037
838,385
667,802
170,583

204,980
835,033
662,465
172,568

190,696
860,719
683,081
177,638

190,033
852,336
675,576
176,759

188,803
859,524
680,596
178,928

167,497
896,645
712,581
184,064

32,265
96,650
163,062
164,395
192,712

32,170
93,941
183,834
208,601
199,002

35,426
97,230
186,206
209,051
199,267

34,117
96,168
190,297
208,571
198,236

30,383
95,911
193,821
208,932
198,922

31,483
94,654
194,900
209,390
198,935

31,690
93,941
197,108
208,906
198,224

32,907
91,235
200,038
209,618
199,755

32,695
91,167
200,008
211,234
198,324

32,428
91,195
199,397
213,012
199,126

32,482
92,530
201,278
214,033
198,596

144,155

150,546

151,517

151,396

151,652

151,690

150,873

151,048

151,309

151,276

151,363

11,175
70,082
67,159
2,923

11,918
68,643
65,366
3,277

11,671
67,215
64,152
3,063

11,461
66,729
63,486
3,243

11,715
67,630
64,121
3,510

11,255
66,938
63,642
3,296

10,889
66,854
63,557
3,296

10,682
67,431
63,927
3,504

9,838
67,980
64,425
3,555

9,938
67,975
64,326
3,649

9,710
68,102
64,135
3,967

2,144
11,361
18,391
17,787
21,293

2,001
12,140
25,686
27,482
22,866

2,145
13,499
26,577
25,959
22,671

2,182
13,931
27,305
25,704
22,547

2,349
13,955
28,121
25,444
22,661

2,229
13,725
27,950
25,513
22,593

2,368
13,587
28,506
26,132
22,563

2,316
13,440
29,339
26,199
22,477

2,540
13,474
29,383
27,192
22,348

2,503
13,300
29,659
28,063
22,156

2,405
13,088
29,316
28,573
21,822

19,013

21,321

20,766

20,697

20,683

21,116

21,051

21,052

21,002

20,983

20,627

B I F - I N S U R E D SAVINGS B A N K S 4

25 Negotiable order of withdrawal accounts
26 Savings deposits 3
27
Personal
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 Vi years

34 IRA and 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 425 commercial banks and 75 savings banks on the last day
of each month. Data are not seasonally adjusted and include IRA and Keogh deposits and
foreign currency-denominated deposits. Data exclude retail repurchase agreements and deposits held in U.S. branches and agencies of foreign banks.




2. As of October 31, 1994, interest rate data for NOW accounts and savings deposits
reflect a series break caused by a change in the survey used to collect these data.
3. Includes personal and nonpersonal money market deposits.
4. Includes both mutual and federal savings banks.

A16
1.26

Domestic Financial Statistics • February 1997
COMMERCIAL BANKS IN THE UNITED STATES

Assets and Liabilities'

A. All commercial banks
Billions of dollars

Monthly averages
Account

1995
Nov.

Wednesday figures

1996
May

June

July

Aug.

1996
Sept.

Oct.'

Nov.

Nov. 6

Nov. 13

Nov. 20

Nov. 27

Seasonally adjusted

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2 . . .
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security 3
Other loans and leases
Interbank loans
Cash assets 4
Other assets 5

16 Total assets 6
17
18
19
20
21
22
23
24
25
26

Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities

27 Total liabilities
28 Residual (assets less liabilities)7

3,598.8'
999.1
714.1
285.0
2,599.7'
713.6
l,077.0r
78.8
998.2r
490.7r
86.3
232.1
193.7
216.1
220.0

3,674.2r
996.6'
713.2
283.4r
2,677.6r
735.3
l,100.3r
79.6r
l,020.6r
504.7r
82.0
255.3
210.7
219.5
230.6

3,681.3'
989./
708.5
281.3'
2,691.6'
738.5
1,103.7'
79.3
1,0245'
510.3'
81.5
257.6
208.4
217.2
240.5

4,172.1r

4^78.0r

4^90.1r

2,648.1
768.7
1,879.4
423.2
1,456.2
674.1r
291.5r
382.6
264.4
222.9

2,712.3
755.1
1,957.2
438.6
1,518.6
722.0'
307.4'
414.6
256.9
219.7

2,721.1
750.0
1,971.2
444.2
1,527.0
713.4'
303.5'
409.9
257.2
226.4

3,809.?

3,910.8'

362.6'

367.2'

3,687.7'
983./
707.6
276.1'
2,704.0'
743.0
1,105.8'
19.9
1,0(25.9
513.5'
79.1
262.6
197.3
219.1
250.0

3,678.0'
972.3'
701.3
271.0'
2,705.8'
744.4
l,112.Cf
80.6'
1,031.4'
514^
72.7
261.7
198.3
221.8
255.6

3,692.6
966.5'
702.2
264.3'
2,726.1'
759.0
1,113.6'
81.2'
1,032.4'
518.7'
73.4
261.3
205.0
220.0
258.5

3,720.4
968.4
700.8
267.6
2,752.0
770.2
1,115.8
82.4
1,033.4
518.7
78.6
268.8
199.6
222.3
251.2

3,747.9
986.2
705.4
280.8
2,761.7
774.8
1,119.0
83.5
1,035.5
519.6
78.7
269.6
213.0
231.3
261.7

3,734.7
982.3
705.9
276.4
2,752.4
770.7
1,114.7
82.9
1,031.7
519.5
78.3
269.2
213.0
227.7
253.6

3,740.9
980.4
703.2
277.2
2,760.5
773.7
1,115.2
83.0
1,032.2
518.4
81.7
271.6
210.4
242.1
263.8

3,734.4
982.2
703.6
278.5
2,752.3
772.4
1,120.5
83.6
1,036.9
520.1
72.4
266.9
214.7
223.5
259.3

3,777.3
997.2
709.7
287.5
2,780.1
780.1
1,123.9
83.9
1,039.9
519.8
84.3
272.0
215.4
235.4
264.2

4J96J'

43185'

4335.6

4396.1

4371.2

4399.5

4374.2

4,434.7

2,732.2
741.9
1,990.3
453.9
1,536.4
706.3'
295.4'
410.9
253.6
218.7

2,753.2
734.1
2,019.1
460.5
1,558.7
718.2'
300.4'
417.8
244.4
218.6

2,777.5
725.6
2,051.9
471.5
1,580.4
719.2'
303.9
415.3
248.9
218.6

2,810.6
719.6
2,091.0
487.3
1,603.7
683.4
294.8
388.7
243.8
238.3

2,846.7
723.0
2,123.7
493.6
1,630.0
697.9
298.1
399.8
236.4
252.8

2,828.5
717.7
2,110.8
489.9
1,620.9
686.9
292.3
394.6
246.9
248.5

2,850.9
729.3
2,121.6
492.4
1,629.2
693.9
290.1
403.8
241.4
254.3

2,815.1
703.0
2,112.1
490.9
1,621.2
705.8
305.3
400.5
243.9
246.9

2,880.6
746.8
2,133.9
497.4
1,636.5
713.8
308.5
405.3
216.4
2515

3,918.1r

34>10JF

3,934.4'

3,964.3'

3,976J

4,033.8

4,010.8

4,040.5

4,011.9

4,0683

372.1'

385.8'

361.8'

354.2'

359.5

362.3

360.4

359.0

362.3

366.4

Not seasonally adjusted

29
30
31
32
33
34
3b
36
3/
38
39
40
41
42
43

Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit 2 . . .
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security 3
Other loans and leases
Interbank loans
Cash assets 4
Other assets 5

44 Total assets 6
45
46
47
48
49
50
51
52
53
54

Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities

55 Total liabilities
56 Residual (assets less liabilities)

7

3,604.9'
997.8
712.4
285.4
2,607.2r
711.9
l,082.7r
79.2
1,003.4'
491.6'
87.7
233.3
197.0
220.1
219.4

3,671.8'
1,001.7'
714.0
287.7'
2,670.1'
740.8
1,097.2'
79.5'
1,017.7'
503.0F
77.9
251.2
204.3
216.9
231.4

3,678.4'
991.1'
708.6
282.5'
2,687.3'
741.4
1,102.3'
79.2
1,023.1'
506.6
79.5
257.5
204.5
215.1
240.1

3,680.9'
980.7'
705.4
275.3'
2,700.2'
744.1
1,105.6'
80^
1,025.6'
510.8'
76.6
263.1
194.5
216.8
250.8

3,677.1'
976.5'
704.5
272.0'
2,700.7'
741.1
1,111.5'
80.8'
1,030.7'
515.1'
70.8
262.2
192.9
212.3
257.5

3,6% .5'
969.2'
703.7
265.5'
2,727.3'
754.0
1,115.5'
81.7'
1,033.8'
519.91
73.1
264.9
199.5
220.9
259.8

3,719.3
967.7
700.1
267.6
2,751.6
765.7
1,118.9
83.0
1,035.8
519.2
76.9
271.0
197.8
223.1
251.5

3,746.9
978.4
704.1
274.3
2,768.5
772.9
1,124.7
84.0
1,040.8
520.4
79.2
271.2
215.9
235.7
260.2

3,740.4
977.4
705.8
271.5
2,763.0
769.7
1,121.0
83.5
1,037.5
519.9
80.9
271.6
214.2
220.9
255.0

3,739.9
973.9
702.7
271.2
2,766.0
770.4
1,122.0
83.5
1,038.5
518.8
81.7
273.1
216.7
252.4
263.9

3,733.1
975.1
702.1
273.0
2,758.0
771.5
1,125.4
84.1
1,041.3
520.5
72.7
267.8
214.8
227.3
254.6

3,769.8
985.1
706.1
279.1
2,784.7
778.6
1,128.9
84.3
1,044.6
521.2
83.4
272.6
214.2
242.7
261.7

4,184.8

4^673'

4^80.9r

4,285.8'

4^823'

4318^

4334.0

4,400.7

4372^

4,415.0

4371.8

4,430.5

2,664.1
782.3
1,881.8
424.2
1,457.6
681.9r
294.6r
387.4
263.3
224.9

2,702.0
742.8
1,959.3
444.0
1,515.3
717.3
303.8
413.5
259.1
222.3

2,717.9
743.5
1,974.4
444.1
1,530.4
721.9'
305.5'
416.4
249.5
227.1

2,725.3
734.8
1,990.5
451.7
1,538.8
715.0'
293.5'
421.5
251.8
218.2

2,740.9
720.4
2,020.5
459.7
1,560.8
1095'
289.2'
420.3
243.4
218.1

2,776.8
724.7
2,052.1
470.2
1,581.9
711.5'
288.5'
423.0
245.1
218.7

2,808.3
717.9
2,090.4
485.5
1,604.9
674.1
284.8
389.3
245.2
238.3

2,861.4
734.7
2,126.6
495.1
1,631.6
692.0
298.4
393.6
233.7
252.8

2,840.3
721.0
2,119.3
491.5
1,627.8
685.9
292.9
393.0
236.6
248.5

2,875.9
747.6
2,128.3
493.4
1,634.9
690.4
295.5
394.9
236.3
254.3

2,827.0
713.6
2,113.3
492.1
1,621.2
693.1
298.1
395.0
237.7
246.9

2,885.3
755.2
2,130.1
499.5
1,630.6
699.8
302.1
397.6
229.4
257.5

3,834.1r

3,900.8'

3,916^

3,9103'

3JMJf

3^52.1'

3,965.9

4,039.8

4,011.4

4,056.9

4,004.7

4,071.9

350.6r

366.5'

364J'

ms

370.5'

366.8'

368.1

361.0

361.2

358.1

367.1

358.6

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

68.3

71.4

70.3

68.4

70.2

74.7

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

58.2

60.4

60.4

57.0

59.2

63.0

MEMO

57 Revaluation gains on off-balance-sheet
items8
58 Revaluation losses on off-balancesheet items8
Footnotes appear on page A21.




Commercial Banking Institutions—Assets and Liabilities
1.26

COMMERCIAL BANKS IN THE UNITED STATES

A17

Assets and Liabilities 1 —Continued

B. Domestically chartered commercial banks
Billions of dollars
Wednesday figures

Monthly averages
1995

Account

1996

1996

Nov.

May

June

July

Aug.

Sept.

Oct.'

Nov.

Nov. 6

Nov. 13

Nov. 20

Nov. 27

Seasonally adjusted
Assets
1 Bank credit
2
Securities in bank credit
US. government securities
3
4
Other securities
Loans and leases in bank credit2
6
Commercial and industrial
Real estate
7
Revolving home equity
8
9
Other
in
Consumer
n
Security 3
Other loans and leases
12
13 Interbank loans
14 Cash assets 4
15 Other assets 5

3,159.7'
854.9
647.1
207.8
2,304.8r
534.6
l,040.3r
78.8r
961.5r
490.7'
53.6
185.6
168.8
185.9
173.7

3,215.0'
845.7
635.4
210.3
2,369.3r
548.2
l,066.8r
79.6'
987.2r
504.7r
50.7
198.9
187.4
193.2
187.6

3,215.3r
838.1
629.4
208.7
2,377.1'
548.4
l,070.6r
192'
991.3r
510.3r
46.8
201.0
184.1
191.4
200.7

3,221.7'
836.2
628.3
207.9
2,385.5'
550.6
l,072.7r
79.8'
992.9'
513.5'
45.9
202.8
178.0
191.3
210.9

3,213.4'
823.7
620.2
203.5
2,389.7'
552.7
1 m<?
80.5'
998.4'
514^
41.9
201.2
181.4
194.0
215.5

3,228.7'
822.5
619.9
202.6
2,406.2'
560.5
1,080.8'
81.2
999.6'
518.7'
44.1
202.1
185.5
192.2
220.2

3,237.1
821.5
618.4
203.2
2,415.5
563.2
1,082.4
82.3
1,000.0
518.7
43.8
207.5
181.1
193.6
218.2

3,243.7
822.0
617.1
204.9
2,421.7
564.3
1,085.6
83.5
1,002.1
519.6
43.1
209.2
192.6
200.6
226.4

3,238.4
822.3
619.9
202.4
2,416.1
562.8
1,081.1
82.9
998.2
519.5
44.0
208.7
191.8
197.7
219.3

3,239.8
819.7
616.4
203.4
2,420.1
563.1
1,081.8
83.0
998.9
518.4
45.8
211.1
189.1
211.4
228.0

3,236.4
820.3
616.0
204.3
2,416.1
562.7
1,087.1
83.6
1,003.5
520.1
39.3
206.9
191.7
193.3
225.1

3,258.0
826.1
617.4
208.7
2,432.0
567.4
1,090.4
83.9
1,006.5
519.8
43.4
210.9
199.3
204.3
228.6

16 Total assets 6

3,631.6r

3,726.4r

3,734.4r

3,744^

3,746.8'

3,769.0r

3,7723

3,805.8

3,789.6

3,810.8

3,789.1

3,832.6

2,479.2
759.1
1,720.1
267.5
1,452.7
566. l r
259^
306.2
89.8
141.3

2,539.9
744.3
1,795.6
279.4
1,516.2
585.7r
270.3r
315.4
88.8
147.5

2,549.5
739.3
1,810.2
283.2
1,527.0
583.2r
270.7r
312.5
80.6
157.1

2,552.4
731.3
1,821.1
287.1
1,534.0
581.4'
264.6'
316.9
78.0
151.4

2,572.8
723.7
1,849.0
292.1
1,557.0
586.5'
264.9'
321.6
73.9
153.1

2,591.8
716.1
1,875.7
297.6
1,578.1
597.4'
270.3'
327.1
74.0
153.1

2,605.0
709.0
1,896.0
295.4
1,600.6
567.7
260.8
306.9
78.7
165.8

2,640.2
712.3
1,927.9
300.4
1,627.6
571.6
261.0
310.6
69.6
172.8

2,624.4
706.3
1,918.1
298.9
1,619.3
568.9
259.2
309.7
71.1
170.8

2,647.4
718.8
1,928.6
301.0
1,627.5
567.1
256.4
310.6
71.2
175.8

2,611.5
692.6
1,918.9
299.8
1,619.1
584.3
271.7
312.7
71.6
168.1

2,670.5
736.4
1,934.1
300.6
1,633.6
574.3
261.8
312.5
65.5
174.8

3,276.4

3,361.8

3,370.4r

33633 r

33863 r

3,416.3'

3,417^

3,454.2

3,4353

3,461.5

3,435.5

3/485.1

355. l r

364.5

363.9r

381.3'

360.5'

352.7'

355.1

351.5

354.3

349.3'

353.6

347.5

17
18
19
20
21
22
?3
24
25
26

Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities

27 Total liabilities
28 Residual (assets less liabilities)

7

Not seasonally adjusted

29
30
31
32
33
34
35
36
37
38
39
40
41
42
43

Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security 3
Other loans and leases
Interbank loans
Cash assets 4
Other assets'

44 Total assets 6
45
46
47
48
49
50
51
52
53
54

Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities

55 Total liabilities
56 Residual (assets less liabilities)

7

3,169.4r
855.7
646.1
209.6
2,313.7r
533.6
l,045.7r
79.2r
966.5r
491.6r
55.5
187.3
172.8
190.3
172.4

3,215.4r
849.0
637.0
212.0
2,366.4r
553.6
1,063.91
19.5'
984.4r
503.0r
49.6
196.3
180.8
191.0
187.9

3,215.5r
841.4
630.6
210.8
2,374. l r
550.9
l,069.2r
19.2'
990.ff
506.6
47.0
200.4
182.1
188.6
200.5

3,213.9'
832.3
626.3
206.0
2,381.6'
550.6
1,072.6'
80.0
992.7'
510.8'
44.6
203.0
175.3
188.6
212.2

3,210.2'
825.8
622.1
203.6
2,384.4r
548.5
1,078.4'
80.8
997.6'
515.1'
41.0
201.5
176.5
183.8
216.4

3,231.2'
824.0
622.0
202.0
2,407.2'
556.3
1,082.6'
81.7
1,000.9'
519.9'
44.0
204.5
179.4
192.2
221.3

3,239.2
819.8
618.3
201.5
2,419.4
560.7
1,085.5
83.0
1,002.5
519.2
44.0
210.0
177.9
194.0
218.7

3,250.6
820.4
616.9
203.5
2,430.2
563.2
1,091.1
83.9
1,007.2
520.4
44.5
211.0
196.1
205.4
224.5

3,248.4
822.0
620.4
201.5
2,426.4
562.6
1,087.2
83.5
1,003.8
519.9
45.8
210.9
195.3
191.6
220.1

3,246.5
818.3
616.1
202.2
2,428.1
561.6
1,088.5
83.5
1,005.0
518.8
46.4
212.9
195.3
221.8
227.7

3,243.1
818.9
615.5
203.4
2,424.2
562.4
1,091.8
84.0
1,007.7
520.5
41.2
208.4
193.8
197.3
220.0

3,261.7
822.4
616.0
206.4
2,439.3
566.0
1,095.2
84.3
1,010.9
521.2
45.0
211.8
196.9
212.0
225.4

3,648_3r

3,718.1

3,729.5r

3,732.9r

3,729.4r

3,766J r

3,772.4

3,818.8

3,797.6

3333.7

3,796.5

3,838.4

2,494.2
772.6
1,721.6
267.2
1,454.4
576.3'
263.3r
313.0
88.4
142.9

2,528.2
732.7
1,795.5
282.7
1,512.8
584.2r
268.7
315.5
93.8
149.0

2,544.1
733.1
1,811.0
283.1
1,528.0
587.4r
270.91
316.5
79.3
157.5

2,547.8
724.1
1,823.6
287.2
1,536.4
584.4'
261.2'
323.1
76.9
151.4

2,562.1
710.2
1,852.0
293.4
1,558.5
575.9'
254.1'
321.8
72.2
151.7

2,591.1
714.5
1,876.6
296.9
1,579.6
58 Iff
255.0'
332.9
70.8
153.0

2,604.4
707.1
1,897.3
294.9
1,602.5
560.9
253.0
307.9
77.9
165.8

2,652.9
723.9
1,929.0
300.0
1,629.1
569.4
261.9
307.5
67.9
172.8

2,634.5
709.7
1,924.8
299.3
1,625.5
567.9
260.7
307.2
67.8
170.8

2,669.9
736.8
1,933.1
300.5
1,632.6
567.4
261.3
306.1
67.6
175.8

2,621.5
703.0
1,918.5
299.6
1,618.9
575.8
265.5
310.3
69.3
168.1

2,673.1
744.7
1,928.4
300.1
1,628.3
568.9
257.6
311.3
68.6
174.8

330

3,355.1

3368.4 r

3,360.4r

3,361.9r

3,402.8'

3,409.1

3,463.1

3,441.0

3,480.7

3,434.7

3,485.4

346.5

363.0

361.2'

372.5

367.5'

363.4'

363.3

355.8

356.6

353.0

361.8

353.0

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

32.4

33.1

32.1

31.5

32.6

35.0

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

28.9
236.3

28.9
238.3

29.1
237.9

27.0
235.5

27.9
239.3

30.6
239.6

r

MEMO

57 Revaluation gains on off-balance-sheet
items 8
58 Revaluation losses on off-balancesheet items8
59 Mortgage-backed securities 9
Footnotes appear on page A21.




A18
1.26

Domestic Financial Statistics • February 1997
COMMERCIAL BANKS IN THE UNITED STATES

Assets and Liabilities 1 —Continued

C. Large domestically chartered commercial banks
Billions of dollars
Monthly averages
Account

1995
Nov.

Wednesday figures

1996
May

June

July

Aug.

1996
Sept.

Oct.

Nov.

Nov. 6

Nov. 13

Nov. 20

Nov. 27

Seasonally adjusted

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

Assets
Bank credit
Securities in bank credit
U.S. government securities
Trading account
Investment account
Other securities
Trading account
Investment account
State and local government. .
Other
Loans and leases in bank credit2 . . .
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security3
State and local government
All other
Interbank loans
Cash assets4
Other assets5

23 Total assets6
24
25
26
27
28
29
30
31
32
33

Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities

34 Total liabilities
35 Residual (assets less liabilities)7

l,820.3r
453.0
323.1
21.0
302.2
129.9
59.1
70.7
22.0
48.7
l,367.2r
368.5
554.8r
52.6r
502.2r
271.7r
48.2
11.6
112.4
114.9
123.9
123.4

1,826.1r
434.1
303.9
21.5
282.4
130.2
59.9
70.3
21.0
49.3
1,392.0"
374.0
558.2r
52.9"
505.3r
278.6r
45.4
11.2
124.6
135.2
127.0
138.9

l,816.1r
425.4
296.5
20.9
275.6
128.9
58.4
70.5
20.6
49.9
1,390.6'
372.7
557.2'
52.5'
504.7'
282.0'
41.5
11.1
126.1
131.8
124.7
150.1

1,810.3"
421.3
293.3
20.8
272.5
128.0
59.6
68.3
20.6
47.7
1,389.0"
373.4
553.9"
52.9"
501.1"
282.5"
40.8
11.2
127.3
129.8
126.7
155.0

1,793.0"
408.6
285.1
19.5
265.6
123.5
57.7
65.8
20.5
45.3
1,384.4"
373.5
554.8"
53.0"
501.8"
282.8"
36.8
11.1
125.4
131.8
128.3
159.1

1,800.8"
406.7
284.2
20.6
263.6
122.5
57.1
65.4
20.3
45.1
1,394.1"
379.3
553.5"
53.2"
500.3"
285.3"
38.9
10.8
126.3
133.9
127.1
162.1

1,803.5"
406.3
284.0
21.3
262.7
122.3
55.7
66.6
20.2
46.4
1,397.1"
380.8"
551.6"
53.3"
498.3"
282.5"
38.7
10.8
132.6
130.1
127.6"
159.2"

1,804.9
408.8
284.7
21.8
263.0
124.0
57.8
66.2
20.2
46.0
1,396.1
380.5
551.5
53.9
497.6
282.2
37.8
11.1
132.9
137.8
133.2
164.7

1,803.8
408.7
287.1
23.1
264.0
121.6
56.0
65.5
20.2
45.4
1,395.2
379.6
549.7
53.6
496.1
283.2
38.7
11.0
133.0
137.0
131.8
160.3

1,802.3
405.5
283.2
21.1
262.1
122.3
56.6
65.7
20.3
45.4
1,396.8
379.5
548.7
53.5
495.2
282.2
40.5
11.0
134.9
134.5
141.1
166.3

1,798.2
407.7
284.2
20.3
263.9
123.5
57.1
66.4
20.3
46.1
1,390.5
379.3
552.1
54.1
498.0
282.6
34.1
11.1
131.3
139.0
129.7
164.1

1,814.7
413.2
285.4
22.4
262.9
127.8
61.0
66.9
20.1
46.8
1,401.5
382.8
554.1
54.3
499.8
281.5
37.9
11.1
134.1
142.8
134.7
164.5

2,146.1""

2,191.0r

2,1863'

2,184.9"

2,175.4'

2,187.2'

2,183.6'

2343

2,196.5

2,207.8

2,194.7

2,220.5

l,293.4r
425.9
867.5
125.4
742.1
428.2r
182.6r
245.6
84.2
112.9

1,331.8
416.7
915.1
130.4
784.7
435.2r
186.2r
248.9
84.0
118.3

1,332.2
409.9
922.3
134.3
788.0
427.3'
185.5'
241.8
75.2
128.8

1,336.6
407.9
928.7
136.3
792.4
417.2"
184.4"
232.9
72.2
122.3

1,340.6
399.7
940.9
139.3
801.6
415.5"
182.3"
233.2
69.5
124.9

1,344.8
390.2"
954.7
145.3
809.3
426.7'
185.9"
240.8
68.2
126.5

1,350.8"
384.9
965.9
151.9
814.0
402.8"
172.9"
229.9
75.4
141.0"

1,361.6
384.7
976.9
153.8
823.0
408.6
176.5
232.1
67.3
149.2

1,355.6
382.9
972.7
153.7
819.0
406.2
174.7
231.5
68.9
146.9

1,363.3
388.2
975.1
155.0
820.0
404.5
173.3
231.2
69.0
152.7

1,346.8
372.5
974.3
153.1
821.2
419.9
184.6
235.3
69.2
143.5

1,378.9
400.0
978.9
153.2
825.7
410.3
176.1
234.2
62.9
151.6

1,918.6"

1,9693'

1,963.6"

1,9483'

1,950.5'

1,966.2'

1,970.0"

1,986.7

1,977.5

1,989.4

1,979.5

2,003.7

227.4r

221.7r

222.7'

236.6"

224.9"

221.0'

213.7"

217.7

219.0

218.4

215.2

216.8

Not seasonally adjusted

36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57

Assets
Bank credit
Securities in bank credit
U.S. government securities
Trading account
Investment acount
Other securities
Trading account
Investment account
State and local government. .
Other
Loans and leases in bank credit2 . . .
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security3
State and local government
All other
Interbank loans
Cash assets4
Other assets5

58 Total assets6
59
60
61
62
63
64
65
66
67
68

Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From nonbanks in the U.S
Net due to related foreign offices
Other liabilities

69 Total liabilities
70 Residual (assets less liabilities)7

l,828.5r
456.0
324.6
22.0
302.6
131.4
59.8
71.6
22.2
49.5
l,372.6r
368.2
557.6r
53.0r
504.7r
• 272.0r
49.8
11.6
113.3
114.2
126.0
122.6

l,825.2r
435.2
303.6
21.3
282.3
131.6
61.7
69.9
21.1
48.8
1,390.0"
377.6
556. l r
52.8r
503.3r
277.3r
44.5
11.2
123.2
131.7
125.4
139.4

1,814.4"
426.4
295.4
19.6
275.8
131.0
61.1
69.9
20.7
49.2
1,387.9"
373.8
556.0"
52.4"
503.6"
279.6"
41.8
11.1
125.6
132.9
123.6
151.1

1,802.6"
418.0
291.7
19.9
271.8
126.4
58.7
67.7
20.3
47.4
1,384.6"
373.2
553.7"
52.9"
500.9"
280.1"
39.7
11.2
126.6
129.6
124.4
156.4

1,790.8'
412.1
288.4
20.9
267.5
123.7
57.8
65.9
20.3
45.6
1,378.7"
370.6
554.4"
53.2"
501.2"
282.5"
35.9
11.2
124.2
127.6
120.5
159.7

1,800.0"
408.4
286.4
21.0
265.4
122.0
56.2
65.8
20.3
45.5
1,391.6"
376.2
553.7'
53.5"
500.2"
284.9"
38.8
10.9
127.0
129.3
127.3
162.5

1,804.4"
406.6
285.9
22.0
263.9
120.6
53.5
67.1
20.2
46.9
1,397.8"
379.2
552.9"
53.8"
499.1"
282.5"
38.9
10.9
133.5
126.0
127.3"
159.2"

1,810.4
409.0
286.5
22.7
263.8
122.5
55.4
67.1
20.3
46.8
1,401.4
380.3
554.5
54.3
500.2
282.5
38.9
11.1
134.0
137.0
135.7
163.4

1,811.8
410.2
289.4
23.8
265.6
120.7
54.4
66.4
20.2
46.2
1,401.6
380.1
553.1
54.0
499.1
283.2
40.1
11.0
134.1
134.3
125.6
160.2

1,807.5
406.0
284.9
22.3
262.6
121.1
54.6
66.5
20.4
46.1
1,401.5
378.8
552.5
53.9
498.6
282.4
40.8
11.0
136.0
136.1
148.0
165.4

1,803.9
408.5
286.1
22.0
264.1
122.4
55.0
67.4
20.4
47.0
1,395.4
379.7
554.4
54.5
500.0
282.4
35.7
11.1
132.1
136.5
131.3
160.9

1,816.7
410.6
285.5
22.3
263.2
125.1
57.3
67.8
20.3
47.6
1,406.0
382.2
556.3
54.6
501.7
282.0
39.5
11.2
134.8
139.5
139.6
163.1

2,154.7r

2,185.4r

2,185.5'

2,176.4"

2,161.8'

2,182.2"

2,1803"

239.9

2,195.4

2,220.4

2,196.1

2,222.5

1,302.1
433.9
868.2r
125.1
743.1
436.3r
185.6r
250.6r
83.0
114.6

1,323.9
408.8
915.1
132.8
782.3
431.6r
183.8r
247.7
89.2
120.1

1,330.4
407.0
923.5
134.3
789.1
430. l r
184.9"
245.2
74.1
129.2

1,333.2
402.4
930.9
136.7
794.2"
422.8"
183.7"
239.1
71.2
122.5"

1,333.9
389.9
944.0
140.8
803.1
410.6"
176.5"
234.1
67.8
123.5

1,344.8"
390.2
954.6
144.6
810.0
420.5"
175.5"
245.0
65.0
126.2

1,348.1
382.3
965.8
151.0
814.8
398.3"
168.2"
230.1
74.5
141.0"

1,368.8
391.7
977.1
153.5
823.6
407.3
177.9
229.4
65.8
149.2

1,357.8
380.9
976.9
153.8
823.1
407.5
177.1
230.3
65.6
146.9

1,377.7
399.8
977.8
154.4
823.4
405.9
177.8
228.1
65.3
152.7

1,352.6
379.6
973.0
152.8
820.2
413.7
181.2
232.5
67.0
143.5

1,381.3
407.1
974.2
153.0
821.3
404.6
172.9
231.7
66.3
151.6

1,936.1/

l,964.8r

1,963.9"

1,949.8"

1,935.8"

1,956.4'

1,962.0"

1,991.1

1,977.7

2,001.6

1,976.9

2,003.8

218.8r

220.6r

221.6"

226.6"

226.0"

225.8"

218.4"

218.8

217.7

218.8

219.3

218.7

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

33.7

34.5

32.1

31.5

32.6

35.0

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

28.9
186.1

28.9
187.5

29.1
187.2

27.0
184.9

27.9
188.4

30.6
188.6

MEMO

71 Revaluation gains on off-balance-sheet
items8
72 Revaluation losses on off-balancesheet items8
73 Mortgage-backed securities9


http://fraser.stlouisfed.org/
Footnotes appear on page A21.
Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets
1.26

COMMERCIAL BANKS IN THE UNITED STATES

and Liabilities

A19

Assets and Liabilities'—Continued

D. Small domestically chartered commercial banks
Billions of dollars
Wednesday figures

Monthly averages
Account

Nov.

1996

1996

1995
May

June

July

Aug.

Sept.

Oct.

Nov.

Nov. 6

Nov. 13

Nov. 20

Nov. 27

Seasonally adjusted

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security3
Other loans and leases
Interbank loans
Cash assets4
Other assets5

16 Total assets6
17
18
19
20
21
22
23
24
25
26

Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities

27 Total liabilities
28 Residual (assets less liabilities)7

1,339.4
401.9
323.9
77.9
937.6
166.1
485.5
26.2
459.3
219.0
5.4
61.6
53.8
61.9
50.3

1,388.9
411.6
331.4
80.1
977.3
174.2
508.6
26.7
481.9
226.1
5.3
63.2
52.2
66.2
48.7

1,399.2
412.7
332.9
79.8
986.5
175.7
513.3
26.7
486.6
228.3
5.3
63.9
52.3
66.7
50.6

1,411.4
415.0
335.0
80.0
996.4
177.2
518.8
27.0
491.8
231.0
5.1
64.3
48.2
64.7
55.9

1,420.4
415.1
335.1
80.0
1.005.3
179.2
524.0
27.5
496.5
232.1
5.2
64.8
49.7
65.7
56.4

1,427.9
415.8
335.8
80.0
1,012.1
181.2
527.3
27.9
499.4
233.4
5.2
65.0
51.6
65.1
58.1

1,433.6
415.2
334.3
80.9
1,018.4
182.3
530.7
29.0
501.7
236.2
5.1
64.1
51.1
66.0
59.1

1,438.8
413.2
332.4
80.9
1,025.6
183.8
534.1
29.6
504.5
237.3
5.3
65.1
54.8
67.3
61.7

1,434.6
413.6
332.8
80.8
1,020.9
183.1
531.4
29.3
502.1
236.4
5.3
64.7
54.8
65.8
59.0

1,437.6
414.2
333.2
81.0
1,023.4
183.6
533.1
29.4
503.7
236.2
5.3
65.2
54.5
70.3
61.7

1,438.2
412.6
331.8
80.8
1,025.6
183.5
535.0
29.5
505.4
237.6
5.2
64.4
52.7
63.6
61.0

1,443.4
412.9
332.0
80.9
1,030.5
184.6
536.3
29.6
506.7
238.4
5.5
65.7
56.5
69.6
64.1

1,485.5

1,535.4

1,548.0

1,559.6

1,571.4

1,581.8

1,588.6

1,601.4

1,593.1

1,603.0

1,594.4

1,612.2

1,185.8
333.2
852.7
142.1
710.5
137.9
77.3
60.6
5.6
28.5

1,208.1
327.6
880.5
149.0
731.5
150.5
84.0
66.5
4.7
29.2

1,217.2
329.4
887.9
148.9
739.0
155.9
85.3
70.7
5.4
28.3

1,215.8
323.4
892.4
150.7
741.6
164.2
80.2
84.0
5.8
29.1

1,232.2
324.1
908.1
152.8
755.4
171.0
82.6
88.4
4.4
28.2

1,247.0
325.9
921.1
152.3
768.8
170.7
84.4
86.3
5.8
26.6

1,254.2
324.1
930.1
143.5
786.6
165.0
87.9
77.0
3.3
24.7

1,278.6
327.6
951.1
146.6
804.5
163.0
84.5
78.5
2.3
23.6

1,268.8
323.4
945.4
145.1
800.3
162.7
84.5
78.2
2.3
24.0

1,284.1
330.6
953.5
146.0
807.5
162.6
83.1
79.5
2.3
23.2

1,264.7
320.0
944.7
146.8
797.9
164.4
87.1
77.3
2.3
24.5

1,291.6
336.4
955.2
147.3
807.9
164.0
85.7
78.3
2.6
23.2

1,357.8

1,392.6

1,406.8

1,414.9

1,435.7

1,450.1

1,447.2

1,467.6

1,457.8

1,472.1

1,456.0

1,481.4

127.7

142.8

141.2

144.7

135.6

131.7

141.4

133.9

135.3

130.9

138.4

130.7

Not seasonally adjusted

29
30
31
32
33
34
35
36
37
38
39
40
41
42
43

Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security3
Other loans and leases
Interbank loans
Cash assets4
Other assets5

44 Total assets6
45
46
47
48
49
50
51
52
53
54

Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities

55 Total liabilities
56 Residual (assets less liabilities)

7

1,340.9
399.7
321.5
78.2
941.1
165.4
488.1
26.3
461.8
219.6
5.7
62.4
58.6
64.3
49.8

1,390.2
413.8
333.5
80.3
976.4
176.0
507.8
26.7
481.1
225.7
5.1
61.9
49.1
65.6
48.5

1,401.1
415.0
335.3
79.8
986.1
177.1
513.2
26.8
486.4
227.0
5.2
63.7
49.2
65.0
49.4

1,411.3
414.3
334.6
79.6
997.0
177.3
518.9
27.1
491.8
230.7
4.9
65.2
45.7
64.2
55.8

1,419.4
413.6
333.7
79.9
1,005.8
177.9
524.0
27.6
496.5
232.6
5.1
66.1
49.0
63.3
56.7

1,431.2
415.6
335.6
80.1
1,015.6
180.1
528.8
28.1
500.7
234.9
5.1
66.6
50.1
64.9
58.8

1,434.8
413.2
332.4
80.8
1,021.6
181.6
532.6
29.2
503.4
236.7
5.1
65.7
52.0
66.7
59.6

1,440.2
411.4
330.4
81.0
1,028.8
182.9
536.6
29.7
507.0
237.8
5.6
65.8
59.1
69.7
61.1

1,436.6
411.8
331.0
80.8
1,024.8
182.4
534.1
29.4
504.6
236.7
5.6
65.9
61.0
65.9
59.9

1,439.0
412.4
331.2
81.1
1,026.6
182.7
535.9
29.5
506.4
236.4
5.5
66.0
59.2
73.9
62.3

1,439.2
410.4
329.4
81.0
1,028.8
182.7
537.3
29.6
507.7
238.1
5.4
65.3
57.3
66.0
59.1

1,445.0
411.8
330.5
81.3
1,033.2
183.8
538.9
29.7
509.2
239.2
5.5
65.9
57.4
72.4
62.3

1,493.6

1,532.8

1,544.0

1,556.5

1,567.6

1,584.0

1,592.0

1,608.9

1,6022

1,613.2

1,600.4

1,615.9

1,192.1
338.6
853.5
142.2
711.3
140.0
77.7
62.3
5.4
28.3

1,204.2
323.8
880.4
149.8
730.5
152.6
84.9
67.7
4.6
28.9

1,213.7
326.1
887.6
148.8
738.8
157.3
86.0
71.3
5.2
28.3

1,214.5
321.8
892.8
150.5
742.3
161.6
77.5
84.0
5.7
28.9

1,228.2
320.2
908.0
152.6
755.4
165.3
77.6
87.7
4.4
28.2

1,246.3
324.3
922.0
152.4
769.7
167.4
79.6
87.9
5.9
26.8

1,256.3
324.8
931.5
143.8
787.7
162.7
84.8
77.8
3.4
24.7

1,284.1
332.2
951.9
146.5
805.4
162.1
84.0
78.1
2.2
23.6

1,276.7
328.8
947.8
145.4
802.4
160.4
83.5
76.9
2.3
24.0

1,292.3
337.0
955.3
146.1
809.2
161.5
83.5
77.9
2.2
23.2

1,268.9
323.4
945.5
146.8
798.7
162.1
84.3
77.8
2.3
24.5

1,291.8
337.6
954.2
147.2
807.0
164.3
84.7
79.6
2.2
23.2

1,365.9

1,390.3

1,404.5

1,410.6

1,426.1

1,446.4

1,447.1

1,472.0

1,4633

1,479.1

1,457.8

1,481.6

141.5

137.5

145.0

136.9

138.9

134.1

142.5

134.4

n.a.

n.a.

50.3

50.8

50.7

50.5

50.9

51.0

127.7

142.4

139.6

145.8

n.a.

n.a.

n.a.

n.a.

MEMO

57 Mortgage-backed securities9
Footnotes appear on page A21.




A20
1.26

Domestic Financial Statistics • February 1997
COMMERCIAL BANKS IN THE UNITED STATES

Assets and Liabilities 1 —Continued

E. Foreign-related institutions
Billions of dollars
Monthly averages
Account

1995

Nov.

Wednesday figures

1996

May

June

July

Aug.

1996

Sept.

Oct.

Nov.

Nov. 6

Nov. 13

Nov. 20

Nov. 27

Seasonally adjusted

1
2
3
4
5
6
7
8
9
10
11
12

Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2 . . .
Commercial and industrial
Real estate
Security3
Other loans and leases
Interbank loans
Cash assets4
Other assets5

13 Total assets

14
15
16
17
18
19
20
21
22
23

6

Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities

24 Total liabilities
25 Residual (assets less liabilities)

7

439.1
144.2
67.1
77.2
294.9
179.0
36.7
32.7
46.5
25.0
30.2
46.2

459.2R
150.^
77.8
73.0R
308.3
187.2
33.5
31.3
56.423.3
26.3
42.9

466.1'
151.6'
79.0
72.5'
314.5
190.0
33.2
34.7
56.5
24.3
25.7
39.8

466.0'
147.4'
79.3
68.2'
318.5
192.4
33.1
33.2
59.8
19.3
27.7
39.1

464.7'
148.6'
81.1
67.5'
316.1
191.7
33.1
30.8
60.5
16.9
27.8
40.2

463.9'

540.5

551./

555.8'

552.0'

168.9
9.7
159.3
155.7
3.6
108.0
31.6
76.4
174.6
81.5

172.4
10.8
161.7
159.2
2.5
136.3
37.1
99.2
168.1
72.2

171.7
10.7
161.0
161.0
0.0
130.2
32.7
97.5
176.6
69.2

533.0

549.0

7.5

2.7R

I44.ff

146.9r

82.3
61.7'
319.8
198.5
32.8
29.3
59.2
19.6
27.8
38.3

82.5
64.4
336.4
207.0'
33.4'
34.8
61.2
18.5
28.7
33.0

504.2
164.2
88.3
75.9
340.0
210.5
33.4
35.6
60.4
20.4
30.7
35.2

496.3
160.0
86.0
74.0
336.3
207.9
33.6
34.3
60.5
21.2
30.0
34.3

501.1
160.7
86.8
73.8
340.4
210.6
33.4
35.9
60.5
21.4
30.7
35.7

498.0
161.9
87.7
74.2
336.1
209.6
33.5
33.0
60.0
23.0
30.2
34.2

519.3
171.1
92.4
78.8
348.2
212.7
33.5
40.9
61.1
16.1
31.2
35.6

549.5'

549.5'

563.4r

590.3

581.7

588.7

585.1

602.0

179.8
10.6
169.2
166.8
2.4
124.9
30.8
94.0
175.6
67.3

180.5
10.3
170.1
168.4
1.7
131.7
35.5
96.2
170.5
65.5

185.8
9.6
176.2
173.8
2.3
121.8
33.6
88.2
174.9
65.5

205.7'
10.7
195.0
191.9
3.1
115.7
33.9
81.8'
165.1
72.6

206.5
10.7
195.7
193.3
2.5
126.3
37.1
89.2
166.8
80.0

204.1
11.5
192.7
191.0
1.6
118.0
33.1
84.9
175.7
77.7

203.5
10.5
193.0
191.3
1.7
126.9
33.7
93.2
170.2
78.4

203.6
10.5
193.2
191.1
2.1
121.5
33.7
87.8
172.4
78.8

210.1
10.4
199.7
196.8
2.9
139.5
46.7
92.8
151.0
82.7

547.7

547.5

548.2

548.0

559.0

579.6

575.5

579.0

576.4

583.2

8.1'

4.5'

1.3'

1.4'

4.4'

10.8

6.1

9.7

8.8

18.8

496.3
158.0
87.2
21.8
65.4
70.8
51.7
19.1
338.3
209.7
33.6
34.7
60.3
19.8
30.3
35.7

492.0
155.4
85.4
20.6
64.8
70.0
50.8
19.1
336.7
207.1
33.8
35.1
60.7
18.9
29.3
34.9

493.4
155.6
86.6
20.5
66.0
69.0
49.9
19.1
337.8
208.8
33.5
35.3
60.2
21.4
30.5
36.1

489.9
156.2
86.6
21.4
65.2
69.6
50.5
19.0
333.7
209.2
33.6
31.5
59.4
21.0
29.9
34.6

508.2
162.7
90.1
24.3
65.8
72.7
53.7
18.9
345.4
212.6
33.7
38.4
60.7
17.3
30.6
36.2

483.3'

Not seasonally adjusted
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41

Assets
Bank credit
Securities in bank credit
U.S. government securities
Trading account
Investment account
Other securities
Trading account
Investment account
Loans and leases in bank credit2 . . .
Commercial and industrial
Real estate
Security3
Other loans and leases
Interbank loans
Cash assets4
Other assets5

42 Total assets6

43
44
45
46
47
48
49
50
51
52

Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities

53 Total liabilities
54 Residual (assets less liabilities)1

435.5
142.1
66.?

456.4R
152.7R
77.0

462.9'
149.7'
78.0

467.0'
148.4'
79.0

467.0'
150.7'
82.4

465.4'
145.2'
81.7

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

293.5
178.4
36.9
32.2
46.0
24.2
29.8
47.0

303.7
187.1
33.3
28.3
54.9
23.4
25.9
43.5

313.2
190.5
33.1
32.5
57.1
22.4
26.6
39.6

318.7
193.5
33.0
32.0
60.1
19.2
28.2
38.6

316.3
192.6
33.1
29.8
60.7
16.4
28.5
41.1

320.2
197.7
33.0
29.1
60.4
20.2
28.7
38.5

480.0
147.9
81.8
18.6
63.2
66.1
47.8'
18.4'
332.1
204.9'
33.4'
32.9
60.9
19.8
29.1
32.8

536.5

5492'

551.4r

553.0r

552.9r

552.6r

561.6

581.9

574.9

5813

575.3

592.1

169.9
9.7
160.2
156.9
3.2
105.6
31.3
74.4
174.8
81.9

173.9
10.1
163.8
161.3
2.4
133.2
35.1
98.1
165.3
73.3

173.8
10.4
163.4
161.0
2.4
134.4
34.5
99.9
170.2
69.7

177.5
10.6
166.9
164.5
2.4
130.6
32.2
98.4
175.0
66.8

178.8
10.3
168.5
166.3
2.3
133.6
35.1
98.5
171.2
66.4

185.7
10.2
175.5
173.2
2.3
123.6
33.5
90.1
174.3
65.7

203.9
10.8
193.0
190.6
2.5
113.2
31.8
81.4
167.2
72.6

208.4
10.8
197.6
195.1
2.5
122.6
36.5
86.1
165.7
80.0

205.8
11.3
194.5
192.2
2.3
118.0
32.3
85.8
168.8
77.7

206.0
10.8
195.2
192.9
2.3
123.0
34.2
88.9
168.7
78.4

205.4
10.6
194.8
192.5
2.3
117.3
32.6
84.7
168.4
78.8

212.1
10.5
201.7
199.3
2.3
130.9
44.6
86.3
160.9
82.7

5323

545.7

548.1

549.9

549.9

549.2

556.9"

4.2

3.5'

3.3'

3.1'

3.0'

3.4'

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

n.a.
n.a.

75.8

75.7R

71.7'

69.3'

68.3'

63.5'

576.7

5703

576.2

570.0

586.6

4.7

5.2

4.6

5.1

5.3

5.5

MEMO
55 Revaluation gains on off-balance-sheet

items8

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

35.9

38.4

38.1

36.9

37.6

39.7

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

29.3

31.5

31.4

30.0

31.3

32.4

56 Revaluation losses on off-balance-

sheet items8

Footnotes appear on page A21.




Commercial Banking Institutions—Assets

and Liabilities

A21

NOTES TO TABLE 1.26
NOTE. Tables 1.26, 1.27, and 1.28 have been revised to reflect changes in the Board's H.8
statistical release, "Assets and Liabilities of Commercial Banks in the United States." Table
1.27, "Assets and Liabilities of Large Weekly Reporting Commercial Banks," and table 1.28,
"Large Weekly Reporting U.S. Branches and Agencies of Foreign Banks," are no longer
being published in the Bulletin. Instead, abbreviated balance sheets for both large and small
domestically chartered banks have been included in table 1.26, parts C and D. Data are both
merger-adjusted and break-adjusted. In addition, data from large weekly reporting U.S.
branches and agencies of foreign banks have been replaced by balance sheet estimates of all
foreign-related institutions and are included in table 1.26, part E. These data are breakadjusted.
The not-seasonally-adjusted data for all tables now contain additional balance sheet items,
which were available as of October 2, 1996.
1. Covers the following types of institutions in the fifty states and the District of
Columbia: domestically chartered commercial banks that submit a weekly report of condition
(large domestic); other domestically chartered commercial banks (small domestic); branches
and agencies of foreign banks, and Edge Act and agreement corporations (foreign-related
institutions). Excludes International Banking Facilities. Data are Wednesday values or pro
rata averages of Wednesday values. Large domestic banks constitute a universe; data for
small domestic banks and foreign-related institutions are estimates based on weekly samples
and on quarter-end condition reports. Data are adjusted for breaks caused by reclassifications
of assets and liabilities.
The data for large and small domestic banks presented on pp. A18 and A19 are adjusted to
remove the estimated effects of mergers between these two groups. The adjustment for
mergers changes past levels to make them comparable with current levels. Estimated




quantities of balance sheet items acquired in mergers are removed from past data for the bank
group that contained the acquired bank and put into past data for the group containing the
acquiring bank. Balance sheet data for acquired banks are obtained from Call Reports, and a
ratio procedure is used to adjust past levels.
2. Excludes federal funds sold to, reverse RPs with, and loans made to commercial banks
in the United States, all of which are included in "Interbank loans."
3. Consists of reverse RPs with brokers and dealers and loans to purchase and carry
securities.
4. Includes vault cash, cash items in process of collection, balances due from depository
institutions, and balances due from Federal Reserve Banks.
5. Excludes the due-from position with related foreign offices, which is included in "Net
due to related foreign offices."
6. Excludes unearned income, reserves for losses on loans and leases, and reserves for
transfer risk. Loans are reported gross of these items.
7. This balancing item is not intended as a measure of equity capital for use in capital
adequacy analysis. On a seasonally adjusted basis this item reflects any differences in the
seasonal patterns estimated for total assets and total liabilities.
8. Fair value of derivative contracts (interest rate, foreign exchange rate, other commodity
and equity contracts) in a gain/loss position, as determined under FASB Interpretation No. 39.
9. Includes mortgage-backed securities issued by U.S. government agencies, U.S.
government-sponsored enterprises, and private entities.

A22
1.32

DomesticNonfinancialStatistics • February 1997
COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
Year ending December

1996

Item
1991
Dec.

1992
Dec.

1993
Dec.

1994
Dec.

1995
Dec.

May

June

July

Aug.

Sept.

Oct.

Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers

528,832

545,619

555,075

595,382

674,904

719,069

731,027

734,73L R

753,276'

757,155 R

757,718

Financial companies'
2
Dealer-placed paper 2 , total.
3
Directly placed paper 3 , total

212,999
182,463

226,456
171,605

218,947
180,389

223,038
207,701

275,815
210,829

301,670
221,463

310,524
223,236

317,426'
222,583

329,026
230,318

336,833'
226,599

349,288
225,977

4 Nonfinancial companies4

133,370

147,558

155,739

164,643

188,260

195,936

197,267

194,722

193,932'

193,724

182,454

Bankers dollar acceptances (not seasonally adjusted)5
5 Total
6
7
8
9
10

By holder
Accepting banks
Own bills
Bills bought from other banks
Federal Reserve Banks6
Foreign correspondents
Others

By basis
11 Imports into United States
12 Exports from United States
13 All other

43,770

38,194

32,348

29,835

11,017
9,347
1,670

10,555
9,097
1,458

12,421
10,707
1,714

11,783
10,462
1,321

1,739
31,014

1,276
26,364

725
19,202

410
17,642

12,843
10,351
20,577

12,209
8,096
17,890

10,217
7,293
14,838

10,062
6,355
13,417

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. As reported by financial companies that place their paper directly with investors.
4. Includes public utilities and firms engaged primarily in such activities as communications, construction, manufacturing, mining, wholesale and retail trade, transportation, and
services.

1.33

PRIME RATE CHARGED BY BANKS

29,242

n a.

5. Data on bankers dollar acceptances are gathered from approximately 100 institutions.
The reporting group is revised every January. Beginning January 1995, data for Bankers
dollar acceptances are reported annually in September.
6. In 1977 the Federal Reserve discontinued operations in bankers dollar acceptances for
its own account.

Short-Term Business Loans'

Percent per year
Average
rate

Date of change
24
19
17
16
15

6.25
6.75
7.25
7.75
8.50

1995—Feb. 1
July 7
Dec. 20

9.00
8.75
8.50

1994—Mar.
Apr.
May
Aug.
Nov.

1996—Feb.

1

1994
1995
1996

7.15
8.83
8.27

1994—Jan. .
Feb.
Mar.
Apr.
May
June
July .
Aug.
Sept.
Oct. .
Nov.
Dec.

6.00
6.00
6.06

6.45
6.99
7.25
7.25
7.51
7.75
7.75
8.15
8.50

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 size, based on the most recent Call




Average
rate
1995—Jan. .
Feb.
Mar.
Apr.
May
June
July .
Aug.
Sepl
Oct. .
Nov.
Dec.

8.50
9.00
9.00
9.00
9.00
9.00
8.80
8.75
8.75
8.75
8.75
8.65

1996—Jan. .
Feb.
Mar.
Apr.
May
June
July .
Aug.
Sept.
Oct. .
Nov.
Dec.

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,

Financial Markets
1.35

INTEREST RATES

A23

Money and Capital Markets

Percent per year; figures are averages of business day data unless otherwise noted
1996
Item

1993

1994

1996, week ending

1995
Aug.

Sept.

Oct.

Nov.

Nov. 1

Nov. 8

Nov. 15

Nov. 22

Nov. 29

MONEY MARKET INSTRUMENTS

1 Federal funds1,2,3
2 Discount window borrowing •

3.02
3.00

4.21
3.60

5.83
5.21

5.22
5.00

5.30
5.00

5.24
5.00

5.31
5.00

5.27
5.00

5.32
5.00

5.21
5.00

5.41
5.00

5.30
5.00

3
4
5

Commercial paper3,5'6
1-month
3-month
6-month

3.17
3.22
3.30

4.43
4.66
4.93

5.93
5.93
5.93

5.39
5.42
5.51

5.45
5.52
5.66

5.37
5.43
5.45

5.39
5.41
5.40

5.37
5.42
5.42

5.38
5.41
5.41

5.39
5.41
5.40

5.40
5.41
5.39

5.42
5.42
5.40

6
7
8

Finance paper, directly placed3,5,7
1-month
3-month
6-month

3.12
3.16
3.15

4.33
4.53
4.56

5.81
5.78
5.68

5.28
5.31
5.33

5.33
5.38
5.40

5.25
5.31
5.28

5.25
5.29
5.23

5.25
5.31
5.26

5.26
5.29
5.23

5.26
5.29
5.22

5.25
5.28
5.23

5.24
5.29
5.22

9
10

Bankers acceptances3,5,8
3-month
6-month

3.13
3.21

4.56
4.83

5.81
5.80

5.32
5.40

5.39
5.51

5.32
5.36

5.29
5.29

5.30
5.32

5.30
5.29

5.30
5.29

5.28
5.28

5.29
5.30

11
12
13

Certificates of deposit, secondary market3,9
1-month
3-month
6-month

3.11
3.17
3.28

4.38
4.63
4.96

5.87
5.92
5.98

5.32
5.40
5.57

5.38
5.51
5.71

5.28
5.41
5.51

5.30
5.38
5.43

5.28
5.39
5.46

5.28
5.38
5.44

5.29
5.37
5.43

5.30
5.38
5.43

5.34
5.38
5.43

3.18

4.63

5.93

5.41

5.49

5.41

5.38

5.38

5.38

5.38

5.38

5.38

3.00
3.12
3.29

4.25
4.64
5.02

5.49
5.56
5.60

5.05
5.13
5.35

5.09
5.24
5.50

4.99
5.11
5.25

5.03
5.07
5.14

5.03
5.10
5.18

5.03
5.08
5.15

5.03
5.07
5.13

5.03
5.06
5.13

5.02
5.06
5.13

3.02
3.14
3.33

4.29
4.66
5.02

5.51
5.59
5.69

5.09
5.17
5.36

5.15
5.29
5.57

5.01
5.12
5.34

5.03
5.07
5.20

5.04
5.15
n.a.

5.04
5.08
n.a.

5.02
5.07
5.20

5.03
5.07
n.a.

5.03
5.07
n.a.

3.43
4.05
4.44
5.14
5.54
5.87
6.29
6.59

5.32
5.94
6.27
6.69
6.91
7.09
7.49
7.37

5.94
6.15
6.25
6.38
6.50
6.57
6.95
6.88

5.67
6.03
6.21
6.39
6.52
6.64
6.97
6.84

5.83
6.23
6.41
6.60
6.73
6.83
7.17
7.03

5.55
5.91
6.08
6.27
6.42
6.53
6.90
6.81

5.42
5.70
5.82
5.97
6.10
6.20
6.58
6.48

5.48
5.81
5.97
6.15
6.29
6.42
6.79
6.71

5.44
5.76
5.89
6.05
6.17
6.30
6.66
6.57

5.41
5.70
5.81
5.97
6.08
6.18
6.56
6.45

5.42
5.68
5.79
5.94
6.06
6.16
6.53
6.43

5.41
5.65
5.75
5.90
6.03
6.12
6.51
6.41

6.45

7.41

6.93

6.94

7.13

6.87

6.55

6.76

6.63

6.53

6.51

6.49

5.38
5.83
5.60

5.77
6.17
6.18

5.80
6.10
5.95

5.64
5.85
5.76

5.57
5.79
5.87

5.52
5.73
5.72

5.43
5.69
5.59

5.53
5.70
5.70

5.52
5.66
5.67

5.39
5.71
5.60

5.41
5.70
5.55

5.41
5.70
5.54

7.54

8.26

7.83

7.76

7.95

7.68

7.41

7.58

7.48

7.38

7.36

7.37

7.22
7.40
7.58
7.93
7.46

7.97
8.15
8.28
8.63
8.29

7.59
7.72
7.83
8.20
7.86

7.46
7.63
7.77
8.18
7.87

7.66
7.82
7.95
8.35
8.06

7.39
7.58
7.70
8.07
7.83

7.10
7.31
7.41
7.79
7.54

7.28
7.48
7.59
7.96
7.73

7.18
7.38
7.49
7.86
7.59

7.08
7.28
7.38
7.75
7.52

7.05
7.26
7.37
7.75
7.48

7.06
7.27
7.38
7.75
7.42

2.78

2.82

2.56

2.22

2.20

2.11

2.01

2.11

2.04

2.03

2.00

1.97

14 Eurodollar deposits, 3-month 310

18
19
20

U.S. Treasury bills
Secondary market3,5
3-month
6-month
1-year
Auction average3,5,11
3-month
6-month
1-year

21
22
23
24
25
26
27
28

Constant maturities'2
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 series14
CORPORATE BONDS

33 Seasoned issues, all industries15
34
35
36
37
38

Rating group
Aaa
Aa
A
Baa
A-rated, recently offered utility bonds15
MEMO

Dividend—price ratio
39 Common stocks

1. The daily effective federal funds rate is a weighted average of rates on trades through
New York brokers.
2. Weekly figures are averages of seven calendar days ending on Wednesday of the
current week; monthly figures include each calendar day in the month.
3. Annualized using a 360-day year for 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 approximately 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. Department of the Treasury.
13. General obligation bonds based on Thursday figures; Moody's Investors Service.
14. State and local government general obligation bonds maturing in twenty years are used
in compiling this index. The twenty-bond index has a rating roughly equivalent to Moodys'
A1 rating. Based on Thursday figures.
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. 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.

A24
1.36

DomesticNonfinancialStatistics • February 1997
STOCK MARKET

Selected Statistics
1996

Indicator

1994

1993

1995
Apr.

Mar.

May

June

July

Aug.

Sept.

Oct.

Nov.

Prices and trading volume (averages of daily figures)1
Common stock prices (indexes)
1 New York Stock Exchange
(Dec. 31, 1965 = 50)
2
Industrial
3
Transportation
4
Utility
5
Finance

249.71
300.10
242.68
114.55
216.55

254.16
315.32
247.17
104.96
209.75

291.18
367.40
270.14
110.64
238.48

346.73
439.55
324.77
122.83
290.44

347.50
441.99
326.42
122.44
287.92

354.84
452.63
334.66
124.86
290.43

358.32
458.30
331.57
123.60
294.42

345.06
438.58
316.57
122.66
287.89

354.59
444.91
321.61
122.37
302.95

360.96
459.69
323.12
121.12
308.16

373.54
473.98
332.80
130.04
324.42

388.75
490.60
348.32
135.88
345.30

6 Standard & Poor's Corporation
(1941-43 = 10)2

451.63

460.42

541.72

647.07

647.17

661.23

668.50

644.06

662.68

674.88

701.46

735.67

7 American Stock Exchange
(Aug. 31, 1973 = 50)

438.77

449.49

498.13

565.69

580.60

600.93

591.99

550.16

554.88

564.87

574.46

583.21

263,374
18,188

290,652
17,951

345,729
20,387

426,198
22,988

419,941
24,886

404,184
28,127

392,413
23,903

398,245
21,281

333,343
17,916

400,951
19,449

420,835
18,780

443,521
22,151

Volume of trading (thousands of shares)
8 New Yoric Stock Exchange
9 American Stock Exchange

Customer financing (millions of dollars, end-of-period balances)
10 Margin credit at broker-dealers 4

60,310

61,160

76,680

78,308

81,170

86,100

87,160

79,860

82,980

89300

88,740

91,680

Free credit balances at brokeri5
11 Margin accounts6
12 Cash accounts

12,360
27,715

14,095
28,870

16,250
34,340

15,770
33,113

15,780
33,100

16,890
33,760

16,800
33,775

17,700
32,935

17,520
32,680

17,940
35,360

19,890
36,610

20,020
36,650

Margin requirements (percent of market value and effective date)7

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. Daily data on prices are available upon request to the Board of Governors. For ordering
address, see inside front cover.
2. In July 1976 a financial group, composed of banks and insurance companies, was added
to the group of stocks on which the index is based. The index is now based on 400 industrial
stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and
40 financial.
3. On July 5, 1983, the American Stock Exchange rebased its index, effectively cutting
previous readings in half.
4. Since July 1983, under the revised Regulation T, margin credit at broker-dealers 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.
5. Free credit balances are amounts in accounts with no unfulfilled commitments to
brokers and are subject to withdrawal by customers on demand.




Jan. 3, 1974
50
50
50

6. Series initiated in June 1984.
7. Margin 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 on securities are the difference between the
market value (i00 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.

Federal Finance
1.38

A25

FEDERAL FISCAL AND FINANCING OPERATIONS
Millions of dollars
Fiscal year

Calendar year

Type of account or operation

1996
1993

1994

1995
June

U.S. budget1
1 Receipts, total
On-budget
2
3
Off-budget
4 Outlays, total
5
On-budget
Off-budget
6
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 2

July

Aug.

Sept.

Oct.

Nov.

99,996
71,505
28,491
141,828
113,840
27,987
-41,831
-42,335
504

157,668
125,806
31,862
122,243
90,253
31,989
35,426
35,553
-127

100,056r
74,044r
26,012
140,315r
113,690r
26,625
-40,259
-39,646
-613

97,917
70,086
27,831
135,795
106,395
29,400
-37,878
-36,309
-1,569

1,153,535
841,601
311,934
1,408,675
1,142,088
266,587
-255,140
-300,487
45,347

1,257,737
922,711
335,026
1,460,841
1,181,469
279,372
-203,104
-258,758
55,654

1,355,213
1,004,134
351,079
1,519,133
1,230,469
288,664
-163,920
-226,335
62,415

151,995
116,794
35,201
117,655
103,997
13,657
34,340
12,797
21,544

103,893
75,282
28,611
130,749
104,214
26,535
-26,856
-28,932 •
2,076

248,619
6,283
238

185,344
16,564
1,196

171,288
-2,007
-5,361

-8,619
-33,519
7,798

29,098
1,262
-3,504

16,160
23,705
1,966

-5,892
-31,159
1,625

15,588
18,592
6,079

45,459
-673
-6,908

52,506
17,289
35,217

35,942
6,848
29,094

37,949
8,620
29,329

38,033
7,701
30,332

36,771
6,836
29,936

13,066
5,149
7,917

44,225
7,700
36,525

25,633
5,897
19,736

26,306
4,857
21,449

MEMO

13 Treasury operating balance (level, end of
period)
14 Federal Reserve Banks
15 Tax and loan accounts

1. Since 1990, off-budget items have been the social security trust funds (federal old-age
survivors insurance and federal disability insurance) and the U.S. Postal Service.
2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the
International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets;
accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous
liability (including checks outstanding) and asset accounts; seigniorage; increment on gold;




net gain or loss for U.S. currency valuation adjustment; net gain or loss for IMF loanvaluation adjustment; and profit on sale of gold.
SOURCE. Monthly totals: U.S. Department of the Treasury, Monthly Treasury Statement of
Receipts and Outlays of the U.S. Government; fiscal year totals: U.S. Office of Management
and Budget, Budget of the U.S. Government.

A26
1.39

DomesticNonfinancialStatistics • February 1997
U.S. BUDGET RECEIPTS A N D OUTLAYS 1
Millions of dollars
Fiscal year

Calendar year

Source or type

1994
1994

1995

1996

1996

1995
H2

HI

H2

HI

Sept.

Oct.

Nov.

RECEIPTS

1 All sources
2 Individual income taxes, net
3
Withheld
4
Nonwithheld
5
Refunds
Corporation income taxes
6
Gross receipts
7
Refunds
8 Social insurance taxes and contributions, net . . .
9
Employment taxes and contributions2
10
Unemployment insurance
11
Other net receipts3
12
13
14
15

Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts4

1,257,737

1,355,213

625,781

711,003

656,865

767,099

157,668

100,056r

97,917

543,055
459,699
160,433
77,077

590,244
499,927
175,855
85,538

273,315
240,063
42,029
8,787

307,498
251,398
132,001
75,959

292,393
256,916
45,521
10,058

347,285
264,177
162,782
79,735

68,672
39,537
30,629
1,495

54,000
48,866
5,639
505

46,338
46,989
2,003
2,656

154,205
13,820
461,475
428,810
28,004
4,661

174,422
17,418
484,473
451,045
28,878
4,550

78,393
7,747
220,140
206,615
11,177
2,349

92,132
10,399
261,837
241,557
18,001
2,279

88,302
7,518
224,269
211,323
10,702
2,247

96,480
9,704
277,767
257,446
18,068
2,254

36,378
1,274
43,372
42,817
206
348

5,654
4,792
36,104
34,428
1,330
346

3,522
1,183
39,952
36,967
2,574
411

55,225
20,099
15,225
22,274

57,484
19,301
14,763
31,944

30,178
11,041
7,067
13,395

27,452
8,848
7,425
16,211

30,014
9,849
7,718
11,839

25,682
8,731
8,775
12,087

5,315
1,604
1,698
1,902

3,923
1,432
1,547
2,187r

4,678
1,219
1,394
1,997

1,460,841

1,519,133

752,378

761,289

752,856

OUTLAYS

16 All types

785,368r

122,243r

140,315r

135,795

r

132,600
8,074
8,897
1,355
10,238
71

19,738
1,007
1,689
563
1,913
3,309

22,284
4,112
1,447
-207
1,758
2,347

24,911
814
1,586
-96
1,888
1,405

1,559
3,537
1,191

-167
3,870
1,247

-4,535
3,386
990

17
18
19
20
21
22

National defense
International affairs
General science, space, and technology
Energy
Natural resources and environment
Agriculture

281,642
17,083
16,227
5,219
21,064
15,046

272,066
16,434
16,724
4,936
22,105
9,773

141,885
11,889
7,604
2,923
11,911
7,623

135,648
4,797
8,611
2,358
10,273
4,039

132,886
6,908
7,970
1,992
11,384
3,072

23
24
25
26

Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and
social services

-5,118
38,066
10,454

-14,441
39,350
10,641

-4,042
21,835
6,283

-13,471
18,193
5,073

-3,941
20,725
5,570r

-6,861
18,291
5,237

46,307

54,263

27,450

25,893

26,295

26,137

5,082

4,176

4,973

27 Health
28 Social security and Medicare
29 Income security

107,122
464,312
214,031

115,418
495,701
220,449

54,147
236,817
101,806

59,057
251,975
117,190

57,112r
251,387r
104,760

59,957
264,649
121,032

10,004
41,693
13,664

10,378
45,420
18,544

10,060
45,936
19,714

30
31
32
33
34

37,642
15,256
11,303
202,957
-37,772

37,938
16,223
13,835
232,173
-44,455

19,761
7,753
7,355
109,434
-20,066

19,269
8,051
5,796
116,169
-17,631

18,687
8,092'
7,602
119,349
-26,995

18,164
9,021
4,641
120,579
-16,716

1,641
1,382
1,548
19,243
-6,522

3,336
1,311
l,763 r
21,472
-2,777

5,156
1,897
200
20,144
-2,635

Veterans benefits and services
Administration of justice
General government
Net interest5
Undistributed offsetting receipts6

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 receipts and
outlays do 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. Federal employee retirement contributions and civil service retirement and
disability fund.




4. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts.
5. Includes interest received by trust funds.
6. Rents and royalties for the outer continental shelf, U.S. government contributions for
employee retirement, and certain asset sales.
SOURCE. Fiscal year totals: U.S. Office of Management and Budget, Budget of the U.S.
Government, Fiscal Year 1997; monthly and half-year totals: U.S. Department of the Treasury, Monthly Treasury Statement of Receipts and Outlays of the U.S. Government.

Federal Finance
1.40

A27

FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars, end of month
1994

1996

1995

Item
Mar. 31

June 30

Sept. 30

5,001

5,017

5,153

5,197

5,260

4,974
3,653
1,321

4,989
3,684
1,305

5,118
3,764
1,354

5,161
3,739
1,422

5,225

28
28
0

36
28
8

36
28
8

Dec. 31

1 Federal debt outstanding

4,721

4,827

4,891

4,978

2 Public debt securities
3
Held by public
4
Held by agencies

4,693
3,480
1,213

4,800
3,543
1,257

4,864
3,610
1,255

4,951
3,635
1,317

29
29
0

27
27
0

27
26
0

27
27
0

27
27
0

5 Agency securities
6
Held by public
7
Held by agencies
8 Debt subject to statutory limit
9 Public debt securities
10 Other debt1

Mar. 31

Dec. 31

Sept. 30

June 30

Sept. 30

n.a.
n.a.
35

n.a.
n.a.

4,605

4,711

4,775

4,861

4,885

4,900

5,030

5,073

5,137

4,605
0

4,711
0

4,774
0

4,861
0

4,885
0

4,900
0

5,030
0

5,073
0

5,137
0

4,900

4,900

4,900

4,900

4,900

4,900

5,500

5,500

5,500

MEMO

11 Statutory debt limit

1. Consists of guaranteed debt of US. 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

SOURCE. US. Department of the Treasury, Monthly Statement of the Public Debt of the
United States and Treasury Bulletin.

Types and Ownership

Billions of dollars, end of period
1995

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
Nonmarketable1
State and local government series
Foreign issues2
Government
Public
Savings bonds and notes
Government account series3
Non-interest-bearing

By holder 4
15 U.S. Treasury and other federal agencies and trust funds
16 Federal Reserve Banks
17 Private investors
18
Commercial banks
19
Money market funds
20
Insurance companies
21
Other companies
22
State and local treasuries5,6
Individuals
23
Savings bonds
24
Other securities
25
Foreign and international7
26
Other miscellaneous investors6'8

1992

1994

1996

1995
Q4

Q1

Q2

Q3

4,177.0

4,535.7

4,800.2

4,988.7

4,988.7

5,117.8

5,161.1

5,224.8

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

4,532.3
2,989.5
714.6
1,764.0
495.9
1,542.9
149.5
43.5
43.5
.0
169.4
1,150.0
3.4

4,769.2
3,126.0
733.8
1,867.0
510.3
1,643.1
132.6
42.5
42.5
.0
177.8
1,259.8
31.0

4,964.4
3,307.2
760.7
2,010.3
521.2
1,657.2
104.5
40.8
40.8
.0
181.9
1,299.6
24.3

4,964.4
3,307.2
760.7
2,010.3
521.2
1,657.2
104.5
40.8
40.8
.0
181.9
1,299.6
24.3

5,083.0
3,375.1
811.9
2,014.1
534.1
1,707.9
96.5
40.4
40.4
.0
183.0
1,357.7
34.8

5,126.8
3,348.4
773.6
2,025.8
534.1
1,778.3
97.8
37.8
37.8
.0
183.8
1,428.5
34.3

5,220.8
3,418.4
761.2
2,05 8.7
543.5
1,802.4
95.7
37.5
37.5
.0
184.2
1,454.7
4.0

1,047.8
302.5
2,839.9
294.4
79.7
192.5
563.3

1,153.5
334.2
3,047.4
322.2
80.8
234.5
213.0
605.9

1,257.1
374.1
3,168.0
290.1
67.6
240.1
226.5
483.4

1,304.5
391.0
3,294.9
278.3
71.3
250.8
228.8
352.2

1,304.5
391.0
3,294.9
278.3
71.3
250.8
228.8
352.2

1,353.8
381.0
3,382.8
283.8
87.3
256.0
229.0
336.8

1,422.4
391.0
3,347.3
285.0
82.2
258.0
230.9
340.0

157.3
131.9
549.7
673.5

171.9
137.9
623.0
658.3

180.5
150.7
688.7
840.5

185.0
162.7
862.1
903.7

185.0
162.7

185.8
161.4
930.2
912.5

186.5
161.1
958.6
845.0

197.5

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.
5. Includes state and local pension funds.
6. In March 1996, in a redefinition of series, fully defeased debt backed by nonmarketable
federal securities was removed from "Other miscellaneous investors" and added to "State and
local treasuries." The data shown here have been revised accordingly.




1993

862.1
903.7

n a.

7. Consists of investments of foreign balances and international accounts in the United
States.
8. 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.
SOURCE. U.S. Treasury Department, data by type of security, Monthly Statement of the
Public Deb! of the United States; data by holder, Treasury Bulletin.

A28
1.42

DomesticNonfinancialStatistics • February 1997
U.S. GOVERNMENT SECURITIES DEALERS

Transactions1

Millions of dollars, daily averages
1996, week ending

1996
Item
Sept.

Oct.

45,218

53,964

91,717
44,894
33,593
35,793

101,720
47,945
33,559
39,470

106,811
713
13,496
75,018
32,880
22,297

Aug.

Oct. 2

Oct. 9

46,500

50,819

43,084

99,043
53,211
30,349
40,500

105,597
51,999
36,011
37,357

97,239
60,188
29,336
63,617

118,528
796
13,533

114,131
848
14,927

116,513
905
11,272

116,899
926
23,807

85,100
32,763
25,937

84,624
29,502
25,573

91,902
35,106
26,084

83,613
28,410
39,810

Oct. 23

Oct. 30

57,220

43,664

41,575

50,868

60,104

47,856

38,613

90,604
48,211
30,898
36,951

104,279
45,365
30,713
29,804

98,278
56,383
28,210
29,510

106,346
64,128
30,770
53,829

100,651
68,880
30,724
63,146

113,446
57,284
35,444
38,702

90,343
62,421
33,916
26,757

111,875
865
13,631

110,756
833
11,755

113,359
719
10,505

125,283
991
20,994

130,624
689
21,535

123,412
753
13,792

107,387
887
12,031

84,161
30,033
23,319

82,552
29,881
18,049

82,877
27,491
19,005

96,059
29,779
32,835

99,011
30,035
41,611

95,173
34,692
24,909

83,991
33,029
14,726

Oct. 16

Nov. 6

Nov. 13

Nov. 20

Nov. 27

OUTRIGHT TRANSACTIONS 2

1
2
3
4
5

By type of security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed

By type of counterparty
With interdealer broker
U.S. Treasury
Federal agency
Mortgage-backed
With other
9
U.S. Treasury
10 Federal agency
11 Mortgage-backed
6
7
8

FUTURES TRANSACTIONS 3

12
13
14
15
16

By type of deliverable security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed

429

428

96

0

0

189

28

78

159

75

156

209

1,649
11,373
0
0

1,710
14,057
0
0

1,029
11,938
0
0

1,286
13,306
0
0

1,095
12,559
0
0

832
11,173
0
0

975
9,707
0
0

1,063
13,339
0
0

1,064
13,309
0
0

826
16,479
0
0

1,310
13,479
0
0

2,215
15,278
0
0

OPTIONS TRANSACTIONS 4

17
18
19
20
21

By type of underlying security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed

0

0

0

0

0

0

0

0

0

0

0

0

2,194
4,408
0
848

3,555
3,924
0
1,132

3,143
4,548
0
1,113

3,341
3,942
0
2,728

3,890
5,439
0
1,263

3,825
4,785
0
592

1,659
3,774
0
1,160

3,114
4,319
0
719

3,850
5,374
0
945

2,238
6,661
0
1,399

1,872
4,620
0
608

1,643
3,583
0
729

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. Monthly averages are based on the number of trading days in the month.
Transactions are assumed evenly distributed among the trading days of the report week.
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. Outright transactions include immediate and forward transactions. Immediate delivery
refers to purchases or sales of securities (other than mortgage-backed federal 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 mortgagebacked agency securities include purchases and sales for which delivery is scheduled in thirty business
days or less. Stripped securities arereportedat market value by maturity of coupon or corpus.




Forward transactions are agreements made in the over-the-counter market that specify
delayed 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.
3. Futures transactions are standardized agreements arranged on an exchange. All futures
transactions are included regardless of time to delivery.
4. 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, "n.a." indicates that data are not published because of insufficient activity.
Major changes in the report form filed by primary dealers induced a break in the dealer data
series as of the week ending July 6, 1994.

Federal Finance
1.43

U.S. GOVERNMENT SECURITIES DEALERS

A29

Positions and Financing1

Millions of dollars
1996
Aug.

1996, week ending

Sept.

Oct.

Oct. 2

Oct. 9

Oct. 16

Oct. 23

Oct. 30

Nov. 6

Nov. 13

Nov. 20

Positions2
NET OUTRIGHT POSITIONS 3

By type of security
1 U.S. Treasury bills
Coupon securities, by maturity
2
Five years or less
3 More than five years
4 Federal agency
5 Mortgage-backed

13,673

4,530

607

-5,285

-4,184

4,113

3,209

1,006

383

12,706

11,838

-3,839
-14,771
22,836
36,468

-3,592
-21,281
20,899
36,981

384
-17,347
25,339
39,361

-1,272
-22,724
23,845
38,786

-1,113
-18,641
26,331
37,679

-6,003
-16,180
21,897
39,210

6,925
-15,453
27,301
39,250

557
-17,883
26,197
40,855

11,898
-15,199
25,729
43,646

961
-17,666
27,827
44,320

9,466
-19.061
22,520
41,239

-4,401

-963

-1,315

-622

-935

-1,311

-1,447

-1,707

-1,720

-1,959

-1,831

-473
-19,325
0
0

1,741
-7,520
0
0

667
-10,401
0
0

632
-8,577
0
0

1,009
-10,030
0
0

1,423
-8,214
0
0

268
-11,002
0
0

86
-12,170
0
0

-90
-15,377
0
0

-367
-14,422
0
0

-2,319
-18,630
0
0

NET FUTURES POSITIONS 4

By type of deliverable security
6 U.S. Treasury bills
Coupon securities, by maturity
7
Five years or less
More than five years
8
9 Federal agency
10 Mortgage-backed
NET OPTIONS POSITIONS

11
12
13
14
15

By type of deliverable security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed

0

0

0

0

0

0

0

0

0

0

0

-647
2,759
0
2,003

-992
-1,021
0
1,620

-1,261
-1,433
0
2,343

-1,275
-858
0
1,629

-785
-518
0
2,172

-1,678
-685
0
2,025

-2,554
-2,424
0
2,605

50
-2,325
0
2,914

-1,765
-1,050
0
1,376

-2,591
-432
0
1,174

-1,853
1,189
0
2,088

Financing5
Reverse repurchase agreements
16 Overnight and continuing
17 Term

280,269
480,446

269,777
450,345

253,416
501,087

276,218
450,007

240,183
498,531

270,797
475,818

246,917
512,144

248,408
527,486

259,323
535,831

258,190
542,617

287,053
433,133

Securities borrowed
18 Overnight and continuing
19 Term

179,112
67,680

187,938
66,776

182,236
74,103

184,764
73,646

184,142
75,365

184,313
72,697

179,717
74,481

180,066
73,923

182,134
74,647

189,731
73,361

196,070
64,746

4,034
78

4,067
59

3,778
41

4,090
43

4,047
47

4,151
31

3,406
31

3,467
39

3,429
146

3,456
147

3,908
108

Repurchase agreements
22 Overnight and continuing
23 Term

577,973r
429,700

566,786'
391,841

572,193
445,809

585,714'
387,463

562,918
434,487

580,508
421,972

571,109
459,694

568,125
478,488

587,925
482,670

589,545
491,467

606,286
387,544

Securities loaned
24 Overnight and continuing
25 Term

4,210
3,541

3,864
3,567

3,860
3,566

3,993
3,572

3,136
n.a.

4,166
n.a.

3,951
n.a.

4,104
n.a.

4,172
3,553

3,468
3,664

3,364
n.a.

Securities pledged
26 Overnight and continuing
27 Term

41,671
5,795

44,798
6,752

43,365
6,843

45,498
7,305

43,289
6,981

44,173
6,975

42,334
6,839

42,919
6,364

44,317
7,406

48,605
7,487

52,942
1,405

Collateralized loans
28 Overnight and continuing
29 Term
30 Total

n.a.
n.a.
19,828'

n.a.
n.a.
14,912'

n.a.
n.a.
13,787

n.a.
n.a.
13,576'

n.a.
n.a.
12,649

n.a.
n.a.
13,721

n.a.
n.a.
14,382

n.a.
n.a.
14,113

n.a.
n.a.
16,203

n.a.
n.a.
15,259

n.a.
n.a.
15,037

MEMO: Matched book6
Securities in
31 Overnight and continuing
32 Term

278,385
476,457

263,184
446,548

252,532
498,543

265,784
453,206

244,183
496,432

263,374
476,050

249,688
506,764

248,308
523,420

258,048
529,751

257,765
532,284

287,100
427,813

Securities out
33 Overnight and continuing
34 Term

369,423'
384,256

359,468'
349,869

362,320
398,155

382,992'
347,930

361,544
386,457

377,223
375,578

355,610
409,703

347,735
430,485

371,154
431,378

373,086
439,326

379,899
337,720

Securities received as pledge
20 Overnight and continuing
21 Term

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. Positions for calendar
days of the report week are assumed to be constant. Monthly averages are based on the
number of calendar days in the month.
2. Securities positions are reported at market value.
3. Net outright positions include immediate and forward positions. 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 for
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.
Forward positions reflect agreements made in the over-the-counter market that specify
delayed 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.




4. Futures positions reflect standardized agreements arranged on an exchange. All futures
positions are included regardless of time to delivery.
5. 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. Financing
data are reported in terms of actual funds paid or received, including accrued interest.
6. 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, "n.a." indicates that data are not published because of insufficient activity.
Major changes in the report form filed by primary dealers induced a break in the dealer data
series as of the week ending July 6, 1994.

A30
1.44

DomesticNonfinancialStatistics • February 1997
FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES

Debt Outstanding

Millions of dollars, end of period
1996
Agency

1 Federal and federally sponsored agencies
2 Federal agencies
3
Defense Department'
4
Export-Import Bank2'3
5
Federal Housing Administration4
Government National Mortgage Association certificates of
6
participation5
7
Postal Service6
8
Tennessee Valley Authority
United States Railway Association6
9
10 Federally sponsored agencies7
11
Federal Home Loan Banks
12
Federal Home Loan Mortgage Corporation
Federal National Mortgage Association
13
14
Farm Credit Banks8
15
Student Loan Marketing Association 9
Financing Corporation10
16
17
Farm Credit Financial Assistance Corporation"
18
Resolution Funding Corporation12

1992

1993

1994

1995
May

June

July

483,970

570,711

738,928

844,611

868,599

879,355

41,829
7
7,208
374

45,193
6
5,315
255

39,186
6
3,455
116

37,347
6
2,050
97

31,029
6
2,015
56

31,448
6
1,853
62

30,939
6
1,853
62

n.a.
10,660
23,580
n.a.

n.a.
9,732
29,885
n.a.

n.a.
8,073
27,536
n.a.

n.a.
5,765
29,429
n.a.

n.a.
n.a.
28,952
n.a.

n.a.
n.a.
29,465
n.a.

n.a.
n.a.
28,956
n.a.

442,141
114,733
29,631
166,300
51,910
39,650
8,170
1,261
29,996

523,452
139,512
49,993
201,112
53,123
39,784
8,170
1,261
29,996

699,742
205,817
93,279
257,230
53,175
50,335
8,170
1,261
29,996

807,264
243.194
119,961
299,174
57,379
47,529
8,170
1,261
29,996

837,570
243,389
141,248
305,050
61,197
46,735
8,170
1,261
29,996

847,807
249,240
143,363
308,385
62,182
44,718
8,170
1,261
29,996

854,461
251,169
146,534
310,503
60,294
46,053
8,170
1,261
29,996

154,994

128,187

103,817

78,681

64,931

63,654

62,233

7,202
10,440
4,790
6,975
n.a.

5,309
9,732
4,760
6,325
n.a.

3,449
8,073
n.a.
3,200
n.a.

2,044
5,765
n.a.
3,200
n.a.

2,009
n.a.
n.a.
n.a.
n.a.

1,847
n.a.
n.a.
n.a.
n.a.

1,847
n.a.
n.a.
n.a.
n.a.

42,979
18,172
64,436

38,619
17,578
45,864

33,719
17,392
37,984

21,015
17,144
29,513

21,015
16,944
24,964

20,625
16,952
24,230

19,575
16,844
23,967

Aug.

Sept.

n a.

n a.

861,564
253,847
148,729
312,374
60,219
46,459
8,170
1,261
29,996

866,071
254,920
146,954
319,153
60,126
44,962
8,170
1,261
29,996

n.a.

n.a.

n.a.

MEMO

19 Federal Financing Bank debt 13
20
21
22
23
24

Lending to federal and federally sponsored agencies
Export-Import Bank3
Postal Service6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association6

Other lending14
25 Farmers Home Administration
26 Rural Electrification Administration
27 Other

1. Consists of mortgages assumed by the Defense Department between 1957 and 1963
under family housing and homeowners assistance programs.
2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976.
3. On-budget since Sept. 30, 1976.
4. Consists of debentures issued in payment of Federal Housing Administration insurance
claims. Once issued, these securities may be sold privately on the securities market.
5. Certificates of participation issued before fiscal year 1969 by the Government National
Mortgage Association acting as trustee for the 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. Includes
Federal Agricultural Mortgage Corporation: therefore details do not sum to total. Some data
are estimated.
8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, which is
shown on line 17.
9. Before late 1982, the association obtained financing through the Federal Financing Bank
(FFB). Borrowing excludes that obtained from the FFB, which is shown on line 22.




10. The Financing Corporation, established in August 1987 to recapitalize the Federal
Savings and Loan Insurance Corporation, undertook its first borrowing in October 1987.
11. The Farm Credit Financial Assistance Corporation, established in January 1988 to
provide assistance to the Farm Credit System, undertook its first borrowing in July 1988.
12. The Resolution Funding Corporation, established by the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989, undertook its first borrowing in October 1989.
13. The FFB, which began operations in 1974, is authorized to purchase or sell obligations
issued, sold, or guaranteed by other federal agencies. Because FFB incurs debt solely for the
purpose of lending to other agencies, its debt is not included in the main portion of the table 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.

Securities Market and Corporate Finance
1.45

NEW SECURITY ISSUES

A31

Tax-Exempt State and Local Governments

Millions of dollars
1996
Type of issue or issuer,
or use

1993

1994

1995
Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

1 All issues, new and refunding1

279,945

153,950

145,657

13,673

15,647

17,496

11,819

12,502

11,635

16,296

12,453

By type of issue
2 General obligation
3 Revenue

90,599
189,346

54,404
99,546

56,980
88,677

5,145
8,528

5,491
10,156

6,709
10,787

4,158
7,661

4,104
8,398

3,488
8,147

5,610
10,686

4,777
7,676

By type of issuer
4 State
5 Special district or statutory authority2
6 Municipality, county, or township

27,999
178,714
73,232

19,186
95,896
38,868

14,665
93,500
37,492

818
10,097
2,758

2,803
10,313
2,531

1,038
10,722
5,736

672
7,597
3,550

1,180
8,432
2,890

870
8,096
2,669

1,912
10,435
3,949

1,247
7,719
3,487

91,434

105,972

102,390

9,767

9,468

14,193

8,817

7,133

7,840

11,928

8,039

16,831
9,167
12,014
13,837
6,862
32,723

21,267
10,836
10,192
20,289
8,161
35,227

23,964
11,890
9,618
19,566
6,581
30,771

2,241
964
613
1,796
618
3,535

2,840
799
1,375
1,633
382
2,439

3,396
1,400
972
3,086
610
4,729

2,200
580
693
2,589
392
2,363

2,320
622
409
2,412
271
1,099

1,521
846
785
2,041
581
2,066

2,656
2,897
1,388
1,450
520
3,017

1,515
1,158
1,082
2,017
451
1,816

beginning

January

7 Issues for new capital
8
9
10
11
12
13

By use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes

1. Par amounts of long-term issues based on date of sale.
2. Includes school districts.

1.46

NEW SECURITY ISSUES

SOURCE. Securities Data
Dealer's Digest before then.

Company

1990;

Investment

U.S. Corporations

Millions of dollars
1996
Type of issue, offering,
or issuer

1 All issues'
2 Bonds

2

By type of offering
3 Public, domestic
4 Private placement, domestic3
5 Sold abroad
6
7
8
9
10
11

By industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial

12 Stocks2
By type of offering
13 Public preferred
14 Common
15 Private placement3
16
17
18
19
20
21

By industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial

1993

1994

1995
Apr.

May

June

Julyr

Aug/

Sept.r

Oct.

769,088

583,240

n a.

55,792

49,030r

69,220

67,072

40,066

44,102

59,564

58,892

646,634

498,039

n a.

48,363

36,334r

55,814

54,158

32,632

38,499

53,049

46,400

487,029
121,226
38,379

365,222
76,065
56,755

408,806
n a.
76,910

41,526
n.a.
6,837

30,574
n.a.
5,759

46,745
n.a.
9,069

45,157
n.a.
9,001

26,506
n.a.
6,126

32,548
n.a.
5,952

43,831
n.a.
9,218

38,400
n.a.
8,000

88,160
58,559
10,816
56,330
31,950
400,820

43,423
40,735
6,867
13,322
13,340
380,352

42,950
37,139
5,727
11,974
18,158
369,769

3,435
3,803
137
788
2,253
37,948

2,503
2,664r
120
444
724
29,879

5,887
4,933
819
691
1,097
42,386

6,009
4,272
906
1,144
2,231
39,597

4,066
2,720
525
1,046
647
23,628

2,882
2,611
293
129
1,450
31,135

4,030
3,170
620
229
829
44,171

6,763
4,862
436
1,299
1,000
32,040

122,454

85,155

n.a.

7,430r

12,705r

13,437r

12,935

7,649

5,678

6,553

12,492

18,897
82,657
20,900

12,570
47,828
24,800

10,964
57,809

967
6,463r
n.a.

2,000
10,705r
n.a.

1,660
11,111'
n.a.

3,309
9,626
n.a.

1,779
5,870
n.a.

1,164
4,514
n.a.

1,890
4,663
n.a.

3,855
8,637
n.a.

22,271
25,761
2,237
7,050
3,439
61,004

17,798
15,713
2,203
2,214
494
46,733

2,051
3,597
232
319
100
1,130

3,982
4,125
37
149
144
4,267r

3,294
5,103
322
297
1,205
3,216r

2,653
6,629
197
569
837
2,050

1,740
2,732
104
299
1,083
1,690

1,007
2,087
143
306
51
2,085

781
2,995
0
276
0
2,501

1,535
5,686
37
100
526
4,609

n.a.

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 closedend, intracorporate transactions, equities sold abroad, and Yankee bonds. Stock data include
ownership securities issued by limited partnerships.




Mar.

2. Monthly data cover only public offerings.
3. Monthly data are not available.
SOURCE. Beginning July 1993, Securities Data Company and the Board of Governors of
the Federal Reserve System.

A32
1.47

DomesticNonfinancialStatistics • February 1997
OPEN-END INVESTMENT COMPANIES

Net Sales and Assets 1

Millions of dollars
1996
Item

1994

1995
Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

1 Sales of own shares2

841,286

871,415

93,856

101,310

96,501

88,115

93,053

86,225

84,171

92,730

2 Redemptions of own shares
3 Net sales3

699,823
141,463

699,497
171,918

65,748
28,108

81,005
20,305

69,419
27,082

69,072
19,044

76,485
16,568

64,993
21,232

65,601
18,570

72,537
20,193

4 Assets4

1,550,490

2,067,337

2,212,517

2,293,491

2,356,307

2,363,024

2,297,216

2,366,030

2,474,339

2,517,049

5 Cash5
6 Other

121,296
1,429,195

142,572
1,924,765

142,697
2,069,820

148,777
2,144,713

145,554
2,201,752

144,275
2,218,749

148,647
2,147,337

155,129
2,210,901

156,689
2,317,651

149,937
2,367,112

1. Data on sales and redemptions exclude money market mutual funds but include
limited-maturity municipal bond funds. Data on asset positions exclude both money market
mutual funds and limited-maturity municipal bond funds.
2. Includes reinvestment of net income dividends. Excludes reinvestment of capital gains
distributions and share issue of conversions from one fund to another in the same group.
3. Excludes sales and redemptions resulting from transfers of shares into or out of money
market mutual funds within the same fund family.

1.48

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 newly formed companies after their
initial offering of securities.

CORPORATE PROFITS AND THEIR DISTRIBUTION
Billions of dollars; quarterly data at seasonally adjusted annual rates
1994
Account

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
7 Inventory valuation
8 Capital consumption adjustment

1993

1995

1996

1995
Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

464.4
464.3
163.8
300.5
197.3
103.2

529.5
531.2
195.3
335.9
211.0
124.8

586.6
598.9
218.7
380.2
227.4
152.8

570.9
572.4
213.5
358.8
218.5
140.3

560.0
594.5
217.3
377.2
221.7
155.5

562.3
589.6
214.2
375.3
224.6
150.8

612.5
607.2
224.5
382.8
228.5
154.3

611.8
604.2
218.7
385.5
234.7
150.8

645.1
642.2
233.4
408.8
239.9
168.9

655.8
644.6
236.4
408.1
243.1
165.1

661.2
635.6
233.4
402.2
245.2
156.9

-6.6
6.7

-13.3
11.6

-28.1
15.9

-22.8
21.3

-51.9
17.4

-42.3
15.0

-9.3
14.6

-8.8
16.5

-17.4
20.4

-11.0
22.3

2.0r
23.6r

SOURCE. U.S. Department of Commerce, Survey of Current Business.




1994

Securities Markets and Corporate Finance
1.51

DOMESTIC FINANCE COMPANIES

A33

Assets and Liabilities1

Billions of dollars, end of period; not seasonally adjusted
1994
Account

1994

1993

1995

1996

1995
Q4

Ql

Q2

Q3

Q4

Ql

Q2 r

ASSETS

1 Accounts receivable, gross2
2
Consumer
Business
3
4
Real estate

482.8
116.5
294.6
71.7

551.0
134.8
337.6
78.5

614.6
152.0
375.9
86.6

551.0
134.8
337.6
78.5

568.5
135.8
351.9
80.8

586.9
141.7
361.8
83.4

594.7
146.2
362.4
86.1

614.6
152.0
375.9
86.6

621.8
151.9
380.9
89.1

631.4
154.6
383.7
93.1

50.7
11.2

55.0
12.4

63.2
14.1

55.0
12.4

58.9
12.9

62.1
13.7

61.2
13.8

63.2
14.1

61.5
14.2

59.6
14.1

7 Accounts receivable, net
8 All other

420.9
170.9

483.5
183.4

537.3
210.7

483.5
183.4

496.7
194.6

511.1
198.1

519.7
198.1

537.3
210.7

546.1
212.8

557.7
216.1

9 Total assets

591.8

666.9

748.0

666.9

691.4

709.2

717.8

748.0

758.9

773.8

25.3
159.2

21.2
184.6

23.1
184.5

21.2
184.6

21.0
181.3

21.5
181.3

21.8
178.0

23.1
184.5

23.5
184.8

26.2
186.9

42.7
206.0
87.1
71.4

51.0
235.0
99.5
75.7

62.3
284.7
106.2
87.2

51.0
235.0
99.5
75.7

52.5
254.4
102.5
79.7

57.5
264.4
102.1
82.5

59.0
272.1
102.4
84.4

62.3
284.7
106.2
87.2

62.3
291.4
105.7
91.1

68.4
301.3
100.1
90.9

591.8

666.9

748.0

666.9

691.4

709.2

717.8

748.0

758.9

773.8

5 LESS: Reserves for unearned income
Reserves for losses
6

LIABILITIES AND CAPITAL

10 Bank loans
11 Commercial paper
12
13
14
15

Debt
Owed to parent
Not elsewhere classified
All other liabilities
Capital, surplus, and undivided profits

16 Total liabilities and capital

1. Includes finance company subsidiaries of bank holding companies but not of retailers
and banks. Data are amounts carried on the balance sheets of finance companies; securitized
pools are not shown, as they are not on the books.

1.52

DOMESTIC FINANCE COMPANIES

2. Before deduction for unearned income and losses,

Consumer, Real Estate, and Business Credit1

Millions of dollars, amounts outstanding, end of period
1996r
Type of credit

1995
May

June

July

Aug.

Sept.

Oct.

Seasonally adjusted

1 Total

546,103

615,618

691,616

710,367

724,193

729,091

737,289

737,152

744,842

2 Consumer
3 Real estate2
4 Business

160,227
72,043
313,833

176,085
78,910
360,624

198,861
87,077
405,678

207,027
90,180
413,160

209,856
96,644
417,694

211,332
97,023
420,736

210,907
99,806
426,576

210,948
100,317
425,887

210,477
103,457
430,908

Not seasonally adjusted

5 Total
6 Consumer
Motor vehicles
7
Other consumer3
8
Securitized motor vehicles4
9
10
Securitized other consumer4
11 Real estate2
12 Business
Motor vehicles
13
14
Retail loans5
Wholesale loans6
15
Leases
16
Equipment
17
Loans7
18
Leases
19
Other business8
20
Securitized
business assets4
21
Retail loans
22
Wholesale loans
23
24
Leases

550,751

620,975

697,340

712,429

727,257

722,399

730,923

733,230

743,656

162,770
56,057
60,396
36,024
10,293
71,727
316,254
95,173
18,091
31,148
45,934
145,452
43,514
101,938
53,997
21,632
2,869
10,584
8,179

178,999
61,609
73,221
31,897
12,272
78,479
363,497
118,197
21,514
35,037
61,646
157,953
49,358
108,595
61,495
25,852
4,494
14,826
6,532

202,101
70,061
81,988
33,633
16,419
86,606
408,633
133,277
25,304
36,427
71,546
177,297
59,109
118,188
65,363
32,696
4,723
21,327
6,646

205,678
74,327
80,435
31,435
19,481
90,182
416,569
134,196
27,151
31,360
75,685
178,151
57,327
120,824
68,112
36,110
4,790
25,028
6,292

209,367
74,936
79,474
34,529
20,428
95,803
422,087
136,757
29,033
32,095
75,629
184,396
58,788
125,608
64,987
35,947
4,688
24,868
6,391

209,309
75,736
79,112
33,731
20,730
97,276
415,814
133,325
28,649
26,888
77,788
183,119
57,216
125,903
64,397
34,973
4,613
23,988
6,372

210,148
74,433
78,928
34,636
22,151
100,295
420,480
135,063
28,404
28,188
78,471
182,816
55,528
127,288
68,367
34,234
4,700
23,151
6,383

211,788
76,333
78,451
32,807
24,197
100,182
421,260
138,615
28,875
30,294
79,446
181,111
56,132
124,979
67,290
34,244
4,600
23,170
6,474

210,987
75,916
77,527
32,565
24,979
103,709
428,960
140,057
29,072
30,982
80,003
177,677
56,703
120,974
74,255
36,971
4,650
23,183
9,138

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 balances
are no longer carried on the balance sheets of the loan originator.




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. Beginning with the June 1996 data, retail and wholesale business equipment loans have
been combined and are no longer separately available.
8. 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.

A34
1.53

DomesticNonfinancialStatistics • February 1997
MORTGAGE MARKETS

Mortgages on New Homes

Millions of dollars except as noted
1996
Item

1993

1994

1995
May

June

July

Aug.

Sept.

Oct.

Nov.

Terms and yields in primary and secondary markets
PRIMARY MARKETS

1
2
3
4
5

Terms'
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'
7 Effective rate1,3
8 Contract rate (HUD series)4

163.1
123.0
78.0
26.1
1.30

170.4
130.8
78.8
27.5
1.29

175.8
134.5
78.6
27.7
1.21

179.5
137.6
79.3
27.2
1.16

180.1
139.4
78.7
25.8
1.31

194.0
144.2
76.2
26.7
1.25

184.8
141.1
77.7
27.2
1.38

187.1
141.7
77.2
27.7
1.28

183.9
139.0
77.7
27.4
1.11

188.1
143.3
78.0
27.4
1.19

7.03
7.24
7.37

7.26
7.47
8.58

7.65
7.85
8.05

7.61
7.80
8.34

7.75
8.05
8.37

7.80
8.01
8.28

7.85
8.08
8.45

7.77
7.98
8.23

7.76
7.95
8.01

7.60
7.80
7.73

7.46
6.65

8.68
7.96

8.18
7.57

8.57
7.81

8.55
7.91

8.56
7.84

8.58
7.68

8.56
7.85

8.00
7.53

8.14
7.19

SECONDARY MARKETS

Yield (percent per year)
9 FHA mortgages (Section 203)5
10 GNMA securities

Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION

Mortgage holdings (end of period)
11 Total

190,861
23,857
167,004

222,057
27,558
194,499

253,511
28,762
224,749

267,330
30,442
236,888

270,042
30,936
239,106

272,458
30,830
241,628

275,133
30,803
244,330

278,003
30,840
247,163

279,544
30,815
248,729

283,835
30,744
253,091

14 Mortgage transactions purchased (during period)

92,037

62,389

56,598

6,720

5,421

5,345

5,360

5,353

4,235

6,805

Mortgage commitments (during period)
15 Issued7
16 To sell8

92,537
5,097

54,038
1,820

56,092
360

5,228
13

5,280
0

5,036
0

5,673
0

4,264
53

5,199
0

6,533
0

55,012
321
54,691

72,693
276
72,416

107,424
267
107,157

121,058
212
120,846

123,806
209
123,597

125,574
205
125,369

127,345
201
127,144

129,426
197
129,229

132,260
195
132,065

135,270
195
135,075

Mortgage transactions (during period)
20 Purchases
21 Sales

229,242
208,723

124,697
117,110

98,470
85,877

12,385
11,904

10,266
9,969

9,934
9,496

9,643
8,994

8,687
8,167

9,538
8,797

9,198
8,456

22 Mortgage commitments contracted (during period)9

274,599

136,067

118,659

11,075

11,164

10,626

8,992

9,315

8,214

9,032

12

F H A / V A insured

13

Conventional

FEDERAL HOME LOAN MORTGAGE CORPORATION

Mortgage holdings (end of period)8
17 Total
18

F H A / V A insured

19

Conventional

1. Weighted averages based on sample surveys of mortgages originated by major institutional lender groups for purchase of newly built homes; compiled by the Federal Housing
Finance Board in cooperation with the Federal Deposit Insurance Corporation.
2. Includes all fees, commissions, discounts, and "points" paid (by the borrower or the
seller) to obtain a loan.
3. Average effective interest rate on loans closed for purchase of newly built homes,
assuming prepayment at the end of ten years.
4. Average contract rate on new commitments for conventional first mortgages; from U.S.
Department of Housing and Urban Development (HUD). Based on transactions on the first
day of the subsequent month.
5. Average gross yield on thirty-year, minimum-downpayment first mortgages insured
by the Federal Housing Administration (FHA) for immediate delivery in the private
secondary market. Based on transactions on first day of subsequent month.




6. Average net yields to investors on fully modified pass-through securities backed by
mortgages and guaranteed by the Government National Mortgage Association (GNMA),
assuming prepayment in twelve years on pools of thirty-year 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 FNMA
exclude swap activity.

Real Estate
1.54

A3 5

MORTGAGE DEBT OUTSTANDING 1
Millions of dollars, end of period
1996

1995
Type of holder and property

1992

1994

1993

Q3

Q4

Q1

Q2

Q3P

1 All holders

4,091,827

4,266,932'

4,472,718'

4,657,899'

4,706,615'

4,781,996'

4,869,404

4,949,067

By type of property
2 One- to four-family residences
3 Multifamily residences
4 Nonfarm, nonresidential
5

3,036,251
274,234
700,604
80,738

3,225,545r
270,824r
689,365'
81,198'

3,429,424'
275,705'
684,618'
82,971

3,587,143'
284,201'
702,202'
84,352

3,626,329'
287,994'
707,673'
84,620

3,689,189'
291,893'
715,696'
85,217'

3,757,694
296,974
728,193
86,543

3,824,932
301,129
735,659
87,347

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

1,768,093'
940,595'
556,660'
38,657'
324,413'
20,866'
598,437'
470,000'
67,367'
60,765'
305
229,061
9,458
25,814
184,305
9,484

1,815,845'
1,004,322'
611,391'
39,360'
331,004'
22,567
596,191'
477,626'
64,343'
53,933'
289
215,332
7,910
24,306
173,539
9,577

1,895,350'
1,072,844'
661,907'
42,894'
344,219'
23,824
604,614
488,869'
63,605'
51,849'
291
217,892
7,701
24,638
175,910
9,643

1,888,970'
1,080,366'
663,614'
43,842'
349,081'
23,829
596,789
482,351'
61,988'
52,162'
288
211,815
7,476
23,920
170,783
9,636

1,901,524'
1,087,207'
665,935'
44,700'
352,641'
23,931
602,631'
489,634'
60,540'
52,155'
302'
211,686
7,472
23,906
170,681
9,627

1,925,040
1,099,585
670,735
45,127
359,162
24,561
612,889
499,021
60,809
52,739
320
212,565
7,503
24,007
171,402
9,653

1,951,812
1,112,970
676,753
45,753
365,640
24,825
627,999
513,133
61,444
53,102
320
210,842
7,440
23,802
169,944
9,656

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
0
0
0
0
0
137,584
124,016
13,568
28,664
1,687
26,977
33,665
31,032
2,633

327,014
22
15
7
41,386
15,303
10,940
5,406
9,739
12,215
5,364
6,851
17,284
7,203
5,327
4,754
0
14,112
2,367
1,426
10,319
0
166,642
151,310
15,332
28,460
1,675
26,785
46,892
44,345
2,547

319,327
6
6
0
41,781
13,826
11,319
5,670
10,966
10,964
4,753
6,211
10,428
5,200
2,859
2,369
0
7,821
1,049
1,595
5,177
0
178,059
162,160
15,899
28,555
1,671
26,885
41,712
38,882
2,830

314,353
2
2
0
41,858
12,914
11,557
6,096
11,291
9,535
4,918
4,617
4,889
2,299
1,420
1,170
0
5,015
618
722
3,674
0
182,229
166,393
15,836
28,151
1,656
26,495
42,673
39,239
3,434

313,760
2
2
0
41,791
12,643
11,617
6,248
11,282
9,809
5,180
4,629
1,864
691
647
525
0
4,303
492
428
3,383
0
183,782
168,122
15,660
28,428
1,673
26,755
43,781
39,929
3,852

312,950
2
2
0
41,594
12,327
11,636
6,365
11,266
8,439
4,228
4,211
0
0
0
0
0
5,553
839
1,099'
3,616'
0
183,531
167,895
15,636
28,891
1,700
27,191
44,939
40,877
4,062

314,694
2
2
0
41,547
11,982
11,645
6,552
11,369
8,052
3,861
4,191
0
0
0
0
0
5,016
840
955
3,221
0
186,041
170,572
15,469
29,362
1,728
27,634
44,674
40,477
4,197

311,697
2
2
0
41,575
11,630
11,652
6,681
11,613
6,627
3,190
3,438
0
0
0
0
0
4,025
675
766
2,584
0
185,221
170,083
15,138
29,579
1,740
27,839
44,668
40,304
4,364

1,433,183
419,516
410,675
8,841
407,514
401,525
5,989
444,979
435,979
9,000
38
8
0
17
13
161,136
139,637
6,305
15,194
0

1,562,925
414,066
404,864
9,202
447,147
442,612
4,535
495,525
486,804
8,721
28
5
0
13
10
206,159
171,988
8,701
25,469
0

1,717,991
450,934
441,198
9,736
490,851
487,725
3,126
530,343
520,763
9,580
19
3
0
9
7
245,844
194,145
14,925
36,774
0

1,795,041
463,654
453,114
10,540
503,370
500,417
2,953
559,585
548,400
11,185
12
2
0
5
5
268,420
207,679
18,903
41,838
0

1,853,607'
472,292'
461,447'
10,845
515,051
512,238
2,813
582,959
569,724
13,235
11
2
0
5
4
283,294
214,635
21,279
47,380
0

1,894,686'
475,829'
464,650'
11,179
524,327
521,722
2,605
599,546
585,527
14,019
10
1
0
5
4
294,974
219,392
24,477
51,104
0

1,946,135
485,441
473,950
11,491
536,671
534,238
2,433
621,285
606,271
15,014
9
1
0
4
4
302,729
221,380
26,809
54,541
0

1,987,981
497,248
485,303
11,945
545,608
543,341
2,267
636,362
619,869
16,493
7
0
0
4
3
308,756
224,280
28,141
56,336
0

603,194
447,795
64,688
75,441
15,270

608,901'
455,572'
65,398'
73,922'
14,009

619,555'
461,117'
69,615'
76,142'
12,681

653,155'
491,015'
71,896'
77,441'
12,804

650,279'
486,111'
73,239'
78,105'
12,824

672,835'
506,987'
73,823'
79,129'
12,896

683,535
515,134
74,826
80,573
13,002

697,576
527,190
75,926
81,369
13,091

By type of holder
6 Major financial institutions
7
Commercial banks2
8
One- to four-family
9
Multifamily
10
Nonfarm, nonresidential
11
Farm
12
Savings institutions3
Oneto four-family
13
14
Multifamily
Nonfarm,
nonresidential
15
16
Farm
17
Life insurance companies
18
One- to four-family
19
Multifamily
Nonfarm, nonresidential
20
21
Farm
22 Federal and related agencies
Government National Mortgage Association
23
24
One- to four-family
Multifamily
25
Farmers Home Administration
26
27
One- to four-family
Multifamily
28
Nonfarm, nonresidential
29
30
Farm
31
Federal Housing and Veterans' Administrations
32
One- to four-family
Multifamily
33
34
Resolution Trust Corporation
35
One- to four-family
Multifamily
36
37
Nonfarm, nonresidential
38
Farm
Federal Deposit Insurance Corporation
39
One- to four-family
40
41
Multifamily
42
Nonfarm, nonresidential
43
Farm
44
Federal National Mortgage Association
45
One- to four-family
Multifamily
46
47
Federal Land Banks
One- to four-family
48
49
Farm
50
Federal Home Loan Mortgage Corporation
51
One- to four-family
52
Multifamily
53 Mortgage pools or trusts5
54
Government National Mortgage Association
One- to four-family
55
Multifamily
56
57
Federal Home Loan Mortgage Corporation
58
One- to four-family
Multifamily
59
60
Federal National Mortgage Association
61
One- to four-family
Multifamily
62
63
Farmers Home Administration
64
One- to four-family
Multifamily
65
Nonfarm, nonresidential
66
67
Farm
68
Private mortgage conduits
69
One- to four-family 6
70
Multifamily
Nonfarm, nonresidential
71
Farm
72
73 Individuals and others7
74
One- to four-family
Multifamily
75
76
Nonfarm, nonresidential
77

1. 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.
5. Outstanding principal balances of mortgage-backed securities insured or guaranteed by
the agency indicated.




6. Includes securitized home equity loans.
7. Other holders include mortgage companies, real estate investment trusts, state and local
credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and
finance companies.
SOURCE. 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 for some quarters, are estimated in part by the Federal Reserve.
Line 69 from Inside Mortgage Securities and other sources.

A36
1.55

DomesticNonfinancialStatistics • February 1997
CONSUMER CREDIT1
Millions of dollars, amounts outstanding, end of period
1996
Holder and type of credit

1993

1994

1995
May

June

July

Aug.

Sept.'

Oct.

Seasonally adjusted
1 Total

844,118

966,457

1,103,296

1,150,801'

1,158,118'

1,170,605'

1,176,426"

1,175,663

1,177,935

2 Automobile
3 Revolving
4 Other2

279,786
287,011
277,321

317,182
339,337
309,939

350,848
413,894
338,554

362,298
443,451
345,052'

367,039
445,104
345,974'

373,026'
452,097
345,482'

373,087
454,625
348,714'

373,633
455,369
346,662

373,573
456,880
347,482

Not seasonally adjusted
863,924

990,247

1,131,881

l,141,032 r

1,150,954'

1,160,848'

l,173,254 r

1,179,680

1,179,684

By major holder
Commercial banks
Finance companies
Credit unions
Savings institutions
Nonfinancial business3
Pools of securitized assets4

399,683
116,453
101,634
37,855
77,229
131,070

462,923
134,830
119,594
38,468
86,621
147,811

507,753
152,624
131,939
40,106
85,061
214,398

504,865'
155,893
134,562
41,617
74,638
229,457

507,587'
155,864
136,055
41,089
72,018
238,341

511,084'
157,102'
138,249
42,100
71,148
241,165

517,697'
155,579'
140,635
42,200
71,021
246,122'

517,753
156,956
141,968
43,000
68,570
251,433

518,196
153,443
143,723
43,800
67,926
252,596

By major type of credit
12 Automobile
13
Commercial banks
14
Finance companies
13
Pools of securitized assets4

281,538
122,000
56,057
39,561

319,715
141,895
61,609
36,376

354,055
149,094
70,626
44,411

359,614
150,524
74,327
41,180

365,552
152,921
74,286
44,694

371,849'
154,639
75,736'
45,100

374,535
155,984
74,433
45,589

377,047
155,443
76,333
45,177

377,837
155,643
75,916
44,555

16 Revolving
17
Commercial banks
18
Nonfinancial business3
19
Pools of securitized assets4

302,201
149,920
50,125
80,242

357,307
182,021
56,790
96,130

435,674
210,298
53,525
147,934

437,581
203,432
45,182
164,509

440,229
204,049
42,574
168,844

445,715
207,926
41,715
170,966

451,664
211,026
41,258
174,026

455,303
213,809
38,816
177,406

456,368
214,638
38,105
178,101

20 Other
21
Commercial banks
22
Finance companies
23
Nonfinancial business3
24
Pools of securitized assets4

280,185
127,763
60,396
27,104
11,267

313,225
139,007
73,221
29,831
15,305

342,152
148,361
81,998
31,536
22,053

343,837'
150,909'
81,566
29,456
23,768

345,173'
150,617'
81,578
29,444
24,803

343,284'
148,519'
81,366'
29,433
25,099

347,055'
150,687'
81,146'
29,763
26,507'

347,330
148,501
80,623
29,754
28,850

345,479
147,915
77,527
29,821
29,940

5 Total
6
/
8
9
1U
11

1. The Board's series on amounts of credit covers most short- and intermediate-term credit
extended to individuals. Data in this table also appear in the Board's G.19 (421) monthly
statistical release. For ordering address, see inside front cover.
2. Comprises mobile home loans and all other loans that are not included in automobile or
revolving credit, such as loans for education, boats, trailers, or vacations. These loans may be
secured or unsecured.

1.56

3. Includes retailers and gasoline companies.
4. Outstanding balances of pools upon which securities have been issued; these balances
are no longer carried on the balance sheets of the loan originator.
5. Totals include estimates for certain holders for which only consumer credit totals are
available.

TERMS OF CONSUMER CREDIT 1
Percent per year except as noted
1996
Item

1993

1994

1995
Apr.

May

June

July

Aug.

Sept.

Oct.

INTEREST R A T E S

Commercial banks2
1 48-month new car
2 24-month personal

8.09
13.47

8.12
13.19

9.57
13.94

n.a.
n.a.

8.93
13.52

n.a.
n.a.

n.a.
n.a.

9.11
13.37

n.a.

n.a.

Credit card plan
3 All accounts
4 Accounts assessed interest

n.a.
n.a.

15.69
15.77

16.02
15.79

n.a.
n.a.

15.44
15.41

n.a.
n.a.

n.a.
n.a.

15.65
15.64

n.a.

n.a.

9.48
12.79

9.79
13.49

11.19
14.48

9.64
13.26

9.37
13.49

9.53
13.62

9.81
13.77

10.49
13.92

10.52
13.87

10.40
13.75

54.5
48.8

54.0
50.2

54.1
52.2

51.5
51.8

50.8
51.7

50.4
51.6

50.5
51.7

51.4
51.3

51.9
51.0

52.5
51.1

91
98

92
99

92
99

91
99

91
99

91
100

91
100

92
100

91
100

89
101

14,332
9,875

15,375
10,709

16,210
11,590

16,605
12,024

16,686
12,233

16,854
12,249

16,926
12,242

16,927
12,132

17,182
12,108

17,435
12,326

Auto finance companies
5 New car
6 Used car
OTHER TERMS

Maturity (months)
1 New car
8 Used car
Loan-to-value ratio
9 New car
10 Used car
Amount financed (dollars)
11 New car
12 Used car

3

1. The Board's series on amounts of credit covers most short- and intermediate-term credit
extended to individuals. 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,

Flow of Funds
1.57

A37

FUNDS RAISED IN U.S. CREDIT MARKETS1
Billions of dollars; quarterly data at seasonally adjusted annual rates
1994

1996'

1995'

Transaction category or sector
Q4

Ql

Q2

Q3

Q4

Ql

Q2

Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors....

481.7

543.0

627.0r

621.2r

720.41"

656.5r

845.7

866.0

578.7

591.4

874.5

693.7

By sector and instrument
2 Federal government
3 Treasury securities
4
Budget agency securities and mortgages

278.2
292.0
-13.8

304.0
303.8
.2

256.1
248.3
7.8

155.9
155.7
.2

144.4
142.9
1.5

166.8
172.5
-5.7

247.8
249.0
-1.2

184.7
183.1
1.6

86.0
85.6
.4

59.3
54.1
5.1

239.9
242.2
-2.3

62.4
60.2
2.2

5 Nonfederal

203.5

239.0

370.9'

465.4 r

576.0r

489.7 r

597.9

681.3

492.7

532.1

634.6

631.3

6
7
8
9
in
ii
17.
n
14
ii
16

By instrument
Commercial paper
Municipal securities
Corporate bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Consumer credit

-18.4
87.8
78.8
-40.9
-48.5
158.4
173.6
-5.5
-10.0
.4
-13.7

8.6
30.5
67.6
-13.7
10.1
130.9
187.6
-10.4
-47.8
1.4
5.0

10.0
74.8
75.2
3.6r
-9.4r
155.2'
185.8r
-6.0
-25.0
.5
61.5

21.4
-29.3
23.3
73.2r
54.4
196.0r
203,9r
1.7r
-11.3 r
1.8
126.3

18.1
-44.2 r
73.3
99.6
59.0r
228.6r
196.9'
10.5'
19.5'
1.6
141.6

35.3'
-53.5
6.2
77.9'
67.0'
214.4'
220.5'
-3.8'
-3.7'
1.4
142.5'

6.0
-54.9
53.0
145.5
82.5
228.2
209.9
6.6
10.0
1.7
137.6

34.3
-2.2
98.4
99.1
57.3
239.5
190.8
10.9
36.1
1.7
155.0

18.1
-107.2
59.8
75.3
35.2
255.0
227.9
11.3
13.7
2.2
156.4

14.1
-12.6
82.0
78.5
61.0
191.7
159.1
13.3
18.2
1.1
117.5

30.1
-14.2
60.9
29.8
32.9
363.6
319.1
13.8
28.4
2.4
131.5

10.7
36.9
71.5
78.8
26.9
318.7
248.8
18.4
46.1
5.3
87.8

17
18
19
20
?1
22

By borrowing sector
Household
Nonfinancial business
Corporate
Nonfarm noncorporate
Farm
State and local government

183.8
-61.9
-53.0
-11.0
2.1
81.6

198.3
19.5
34.1
-16.0
1.3
21.1

255.9r
52.7r
46.5
4.2
2.0
62.3

372.4r
136.4r
121.7r
11.9'
2.8
-43.4

383.1'
241.5'
205.1'
34.8'
1.6
-48.6'

405.5'
152.4'
133.9'
19.3'
-.8
-68.2

382.3
269.8
230.4
38.5
.8
-54.2

389.9
300.4
268.3
29.1
3.0
-9.0

424.6
178.4
140.5
34.4
3.5
-110.3

335.6
217.4
181.3
37.1
-1.0
-20.9

461.0
186.2
139.8
46.3
.1
-12.5

398.4
202.7
158.4
37.2
7.1
30.1

23 Foreign net borrowing in United States
?4
Open market paper
75
Bonds
26
Bank loans n.e.c
Other loans and advances
27

14.8
6.4
15.0
3.1
-9.8

23.7
5.2
16.8
2.3
-.6

70.4
-9.0
82.9
.7
-4.2

-15.3
-27.3
12.2
1.4
-1.6

69.5
13.6
48.3
8.5
-.8

44.7'
s.o'
39.1
-.5
1.1

67.1
43.2
13.9
8.1
1.9

45.5
-8.7
51.2
5.6
-2.6

88.3
23.7
55.2
8.2
1.3

76.9
-3.9
72.7
11.9
-3.9

49.2
-8.4
47.9
8.7
1.1

36.6
9.6
11.1
15.1
.7

28 Total domestic plus foreign

496.5

566.7

697.4r

606.0r

789.9r

701.2'

912.8

911.4

667.0

668.3

923.7

730.3

155.6

240.0

292.2

r

r

145.7
9.2
136.6
.0

155.8
40.3
115.6
.0

165.3r
80.6
84.7r
.0

9.8
-32.0
69.9
8.8
-37.3
.5

84.2
-.7
82.7
2.2
-.6
.6

-13.2
-44.7
.0
.0
9.1
136.6
54.0
17.7
-2.4
1.2
3.7
-6.5

10.0
-7.0
.0
.0
40.2
115.6
58.5
-1.6
8.0
.3
2.7
13.2

Financial sectors
29 Total net borrowing by financial sectors
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51

By instrument
U.S. government-related
Government-sponsored enterprise securities
Mortgage pool securities
Loans from U.S. government
Open market paper
Corporate bonds
Bank loans n.e.c
Other loans and advances
Mortgages
By borrowing sector
Commercial banking
Savings institutions
Credit unions
Life insurance companies
Government-sponsored enterprises
Federally related mortgage pools
Issuers of asset-backed securities (ABSs)
Finance companies
Mortgage companies
Real estate investment trusts (REITs)
Brokers and dealers
Funding corporations




446.7'

534.2

267.7

439.9

507.0

572.0

330-3

687.5

287.5r
176.9
115.4r
-4.8

205.1
106.9
98.2
.0

316.1
249.0
67.1
.0

86.7
62.9
23.8
.0

196.5
127.2
69.3
.0

227.7
101.5
126.2
.0

309.5
136.1
173.4
.0

143.8
37.4
106.5
.0

302.0
132.9
169.1
.0

126.9
-6.2
120.1
-13.0
22.4
3.6

179.2
41.6
117.5
-12.3
22.6
9.8

241.6'
42.6
184.7'
5.5
3.4
5.3

218.1
86.5
84.9
3.7
38.1
4.9

181.0
37.6
167.6
-5.0
-24.5
5.2

243.4
33.9
182.3
20.7
1.3
5.2

279.3
43.7
217.6
7.9
4.9
5.2

262.5
55.1
171.6
-1.8
32.0
5.6

186.5
17.8
143.8
24.9
-5.5
5.5

385.5
105.7
201.8
23.6
48.6
5.8

13.4
11.3
.2
.2
80.6
84.7r
83.3
.2
.0
3.4
12.0
2.9

20.1
12.8
.2
.3
172.1
115.4r
68.5
50.2
-11.5
13.7
.5
24.2

22.5
2.6
-.1
-.1
106.9
98.2
132.3'
51.6
.4
5.4
-5.0
32.0

20.7
36.1
.2
1.3
249.0
67.1
62.8
53.0
1.1
6.3
19.3
17.2

21.7
-18.9
-.3
.0
62.9
23.8
67.6
80.2
-7.4
5.2
-29.5
62.5

39.0
-7.2
-.1
.1
127.2
69.3
113.2
52.0
14.8
5.2
-.1
26.4

38.9
5.1
.1
-.1
101.5
126.2
164.8
19.8
4.0
5.2
2.1
39.4

-9.7
31.5
.0
-.4
136.1
173.4
183.5
54.3
-10.0
6.0
7.7
-.4

-32.6
11.0
-.1
2.5
37.4
106.5
132.8
47.1
20.0
5.9
-31.8
31.6

40.1
42.1
-.2
.3
132.9
169.1
128.2
68.4
16.0
6.5
13.2
70.9

466.7

A38

DomesticNonfinancialStatistics • February 1997

1.57

FUNDS RAISED IN U.S. CREDIT MARKETS 1 —Continued
1995r

1994
Transaction category or sector

1991

1992

1993

1994

1996'

1995
Q4

QL

Q2

Q3

Q4

QL

Q2

All sectors
52 Total net borrowing, all sectors

652.1

806.6r

989.6r

l,072.7 r

l,236.5 r

l,235.4 r

1,180.5

1,351.3

1,174.0

1,240.3

1,254.0

1,417.8

53
54
55
56
57
58
59
60

-44.0
424.0
87.8
163.6
-29.1
-95.6
158.9
-13.7

13.1
459.8
30.5
167.1
-9.3
8.9
131.5
5.0

-5.1
421.4r
74.8
278.2
-8.6r
8.7r
158.8r
61.5

35.7
448.1'
-29.3
153.0
62.3r
70.7r
205.8r
126.3

74.3
349.5
-44.2 r
306.3r
113.5
61.6r
233.9r
141.6

126.9'
482.9
-53.5
130.1
81.1'
106.2'
219.3'
142.5'

86.8
334.5
-54.9
234.5
148.7
59.8
233.4
137.6

59.5
381.1
-2.2
331.9
125.4
56.0
244.7
155.0

85.5
313.7
-107.2
332.5
91.4
41.3
260.3
156.4

65.3
368.8
-12.6
326.3
88.6
89.2
197.2
117.5

39.5
383.7
-14.2
252.5
63.3
28.6
369.1
131.5

126.0
364.4
36.9
284.5
117.5
76.2
324.5
87.8

Open market paper
U.S. government securities
Municipal securities
Corporate and foreign bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Consumer credit

Funds raised through mutual funds and corporate equities
61 Total net issues

224.1r

312.5r

453.6 r

152.2r

155.3r

-83.6'

50.1

147.0

196.8

227.3

295.6

416.5

62 Corporate equities
63
Nonfinancial corporations
64
Financial corporations
65
Foreign shares purchased by U.S. residents
66 Mutual funds

76.9r
18.3
28.0r
30.7
147.2

103.4r
27.0
44.0r
32.4
209.1

129.9r
21.3
45.2r
63.4
323.7

23.3r
-44.9
20. l r
48.1
128.9

- 18.6r
-73.8r
4.5r
50.7
173.9

-68.4'
-118.0
12.2'
37.4
-15.2

-34.0
-60.0
9.6
16.4
84.1

-18.0
-71.3
12.5
40.8
165.0

-5.2
-92.8
-.6
88.2
202.0

-17.2
-71.2
-3.5
57.4
244.5

8.0
-85.2
3.4
89.8
287.6

65.3
-16.0
11.7
69.7
351.2

1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables
F.2 through F.5. For ordering address, see inside front cover.




Flow of Funds
1.58

A39

SUMMARY OF FINANCIAL TRANSACTIONS1
Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates
1994
Transaction category or sector

1991

1992

1993

1994

1996'

1995

1995
Q4

Ql

Q2

Q3

Q4

Ql

Q2

NET LENDING IN CREDIT MARKETS2
1 Total net lending in credit markets
2 Domestic nonfederal nonfinancial sectors
Households
Nonfinancial corporate business
4
Nonfarm noncorporate business
5
State and local governments
6
7 Federal government
8 Rest of the world
9 Financial sectors
Monetary authority
10
Commercial banking
11
U.S. chartered banks
12
Foreign banking offices in United States
13
Bank holding companies
14
Banks in U.S. affiliated areas
15
16
Savings institutions
Credit unions
17
18
Bank personal trusts and estates
Life insurance companies
19
Other insurance companies
20
Private pension funds
21
State and local government retirement funds
22
Money market mutual funds
23
Mutual funds
24
Closed-end funds
25
Government sponsored enterprises
26
Federally related mortgage pools
27
Asset-backed securities issuers (ABSs)
28
Finance companies
29
Mortgage companies
30
Real estate investment trusts (REITs)
31
Brokers and dealers
32
Funding corporations
33

652.1

806.6'

989.6'

1,072.7"

1,236.5'

1,235.4"

1,180.5'

1,351.3"

1,174.0"

1,240.3"

1,254.0

1,417.8

113.7'
38.0'
30.7
-5.3
50.3'
10.5
13.3
514.6'
31.1
80.8
35.7
48.5
-1.5
-1.9
-158.9
12.8
10.0
86.5
30.0
35.4
33.8'
32.7
80.1
12.8
15.1
136.6
50.0
-9.2
11.2
-.7
17.5
7.0r

105.3'
98.5"
27.8
-.1
-20.9'
— 11.9
98.4
614.9"
27.9
95.3
69.5
16.5
5.6
3.7
-79.0
17.7
8.0
78.5
6.7
41.1
5.9"
4.7
126.2
18.2
68.8
115.6
53.7
7.5
.1
1.1
-1.3
18.2"

77.1"
65.2"
9.1
-1.1"
3.9"
-18.4
129.3"
801.6"
36.2
142.2
149.6
-9.8
.0
2.4
-23.3"
21.7
9.5
100.9
27.7
45.9
21.1"
20.4
159.5
14.4"
88.6"
84.7"
80.8
-9.0
.0
.6
14.8
-34.9

248.4"
293.3"
49.6
.2"
-94.8"
-24.2
132.3"
716.2"
31.5
163.4
148.1
11.2
.9
3.3
6.7"
28.1
7.1
66.4"
24.9
47.0
30.7"
30.0
-7.1
-3.3"
120.6"
115.4"
61.9
68.2
-22.9
4.7
-44.2
-12.7"

-101.0'
32.7"
-6.0"
.3"
-127.9"
-21.5"
272.7"
1,086.4"
12.7
265.9
186.5
75.4
-.3
4.2
-7.5
16.2
-18.8
99.1'
21.5
61.3
22.7"
86.5
52.5
13.3"
88.9
98.2
112.1
64.2
-3.4
1.8
90.1
9.2"

248.8"
362.7"
52.0"
.3"
-166.2"
-24.3
207.2"
803.8"
25.5
179.8
178.4
-4.5
-2.4
8.3
5.6
24.9
1.4
77.0"
30.4
74.7
44.6"
52.8
-78.6
.7"
171.1'
67.1
42.6
80.7
2.1
.2
-8.0
9.1"

9.1'
155.1"
-41.7"
.3"
-104.5"
-13.1
249.9"
934.6"
18.4
333.0
178.7
153.5
-1.5
2.4
17.8"
11.6
-10.8
134.9"
20.8
58.9
62.9"
56.4
-13.4
8.4"
22.2"
23.8
55.5
85.1
-14.4
1.8
30.5
31.2"

-161.5"
-117.3"
37.7"
.3"
-82.2"
-24.2
322.2"
1,214.8"
16.7
319.4
222.4
86.6
5.3
5.2
-11.7"
22.8
-20.6
135.5
20.9
57.2
4.9"
134.4
23.4
15.1"
93.0
69.3
100.9
67.2
29.9
1.8
146.2
-11.4"

-67.7"
189.3"
-53.1"
.3"
-204.2"
-24.3"
361.0"
905.0"
-4.1
244.8
227.0
25.6
-9.6
1.8
32.2"
11.0
-23.7
72.9
21.9
50.5
2.6"
30.0
58.0
16.7"
50.0
126.2
154.4
50.8
7.3
1.8
-1.8
3.5"

-183.9"
-96.4"
33.0"
.3"
-120.8"
-24.4"
157.6"
1,291.0"
19.7
166.2
118.1
36.1
4.6
7.4
-68.4
19.5
-20.2
53.2"
22.3
78.5
20.2"
125.1
141.9
13.2"
190.5
173.4"
137.4
53.7
-36.4
1.9
185.6
13.7"

-74.9
12.4
-4.4
.4
-83.3
-20.7
341.1
1,008.5
16.9
121.7
80.5
44.2
-5.1
2.1
34.1
22.1
-18.1
48.7
23.6
82.6
58.7
175.0
67.5
10.9
39.4
106.5
113.0
40.9
47.9
1.9
-109.0
124.1

212.0
184.9
53.9
.4
-27.3
-15.2
268.2
952.8
9.4
190.1
125.5
57.5
5.3
1.7
45.2
34.8
-12.3
2.4
23.7
127.5
50.0
18.4
63.7
9.8
127.8
169.1
118.1
38.9
-17.3
1.7
-72.0
23.8

652.1

806.6"

989.6"

1,072.7'

1,236.5"

1,235.4"

1,180.5"

1,351.3"

1,174.0"

1,240.3"

1,254.0

1,417.8

-5.9
.0
.0
-26.5
-3.4
86.3
1.5
-58.5
41.6
-16.5
76.9"
147.2
31.0
51.4
25.9R
201.6'
-7.4
16.1
.5
262.3'

-1.6
—2.0
.2
-3.5
49.4
113.5
-57.2
-73.2
4.5
43.1
103.4"
209.1
46.6
4.6
28.0"
241.9"
9.7
-7.1
16.7
264.9"

.8
.0
.4
-18.5
50.5
117.3
-70.3
-23.5
20.2
71.2
129.9"
323.7
52.4"
61.4
36.0"
250.5"
5.2
1.6
19.7"
353.4"

-5.8
.0
.7
54.0
89.7
-9.7
-40.0
19.6
43.3
78.3
23.3'
128.9
114.0"
-.1
34.5"
251.9"
3.2
18.8
25.9"
268.0"

8.8
2.2
.6
33.5
10.0"
-12.8
96.5
65.6
142.3
110.7
-18.6"
173.9
96.3"
26.7
44.9"
240.3"
1.3
-47.7
41.3"
501.3"

-8.6
.0
.7
106.4
108.5
-37.3
-42.7
36.2
81.1
48.5
-68.4"
-15.2
148.0"
32.7
23.2"
298.5"
4.1
11.9
19.6"
381.8"

17.8
.0
.7
34.6
-22.3
31.3
29.8
108.8
74.2
172.5
-34.0"
84.1
85.0"
-5.4
50.7"
271.8"
12.0
-44.3
41.7"
320.9"

10.3
.0
.7
110.8
-4.8"
100.2
95.6
74.4
221.1
115.6
-18.0"
165.0
80.7"
30.1
57.6"
290.4'
1.0
-45.6
39.9"
422.2"

9.0
8.6
.8
-29.5
-13.5"
-113.1
145.6
80.2
122.9
95.0
-5.2"
202.0
129.3"
32.3
33.1"
211.2"
2.4
-63.9
45.3"
426.5"

-1.9
.0
.0
18.2
80.6"
-69.3
114.9
-.9
151.1
59.8
-17.2"
244.5
90.1"
49.7
38.3"
187.8"
-10.2
-37.1
38.3"
835.5"

-.9
.0
.0
85.0
-89.2
43.3
212.5
55.1
244.0
-19.1
8.0
287.6
62.7
120.6
20.1
258.4
5.6
-47.3
38.1
570.0

1.6
.0
.0
.9
-52.1
4.5
-4.6
83.5
4.1
117.7
65.3
351.2
126.8
-37.7
42.8
287.4
6.6
-20.2
23.4
279.0

1,476.4'

1,797.5'

2,371.5"

2,171.3'

2,753.7"

2,364.5"

2,410.5"

3,098.7"

2,492.9"

3,012.5"

3,108.6

2,697.9

-.6
-24.0
26.2
-10.7"
-2.2
-13.2"

-.2
-2.8
-4.9
4.1"
11.9
-32.2"

-.2
-7.0
4.2
34.2"
11.1
-139.7"

-.2
44.9
-2.7
32.4"
8.6
-106.0"

-.5
27.2"
-3.1
2.8"
8.7
-7.5"

-.2
64.8
3.5
89.0"
-.2
-36.8"

-.2
41.6
-.4
68.9"
-7.5
-251.4"

-.4
101.5"
-.9
-52.4"
31.0
15.1"

-.3
-55.7
12.3
26.6"
9.3
-34.8"

-1.0
21.5"
-23.6
-31.9"
2.2
241.0"

-1.1
61.4
10.9
-34.5
-23.2
-198.1

-1.0
23.6
-26.9
82.5
24.9
-259.5

-13.1
4.5
36.1

.7
1.6
11.3

-1.5
-1.3
-4.0"

-4.8
-2.8
-3.1"

-6.0
-3.8
-23.3'

-17.1
-2.3
-61.2"

4.6
-3.6
48.9"

-18.6
-3.8
30.0"

3.8
-3.2
-46.7"

-13.8
-4.7
-125.5"

8.6
-3.8
43.1

-10.5
-4.2
25.6

2,475.6"

2,205.1"

2,759.2"

2,325.0"

2,509.6"

2,997.1"

2,581.6"

2,948.4"

3,245.2

2,843.3

RELATION OF LIABILITIES
TO FINANCIAL ASSETS
34 Net flows through credit markets
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54

Other financial sources
Official foreign exchange
Special drawing rights certificates
Treasury currency
Foreign deposits
Net interbank transactions
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Corporate equities
Mutual fund shares
Trade payables
Security credit
Life insurance reserves
Pension fund reserves
Taxes payable
Investment in bank personal trusts
Noncorporate proprietors' equity
Miscellaneous

55 Total financial sources
56
57
58
59
60
61

Liabilities not identified as assets (—)
Treasury currency
Foreign deposits
Net interbank liabilities
Security repurchase agreements
Taxes payable
Miscellaneous

Floats not included in assets (—)
62 Federal government checkable deposits
63 Other checkable deposits
64 Trade credit
65 Total identified to sectors as assets

1,473.3"

1,808.1"

1. Data in this table also appear in the Board's Z. 1 (780) quarterly statistical release, tables
F.6 and F.7. For ordering address, see inside front cover.




2. Excludes corporate equities and mutual fund shares.

A40
1.59

DomesticNonfinancialStatistics • February 1997
SUMMARY OF CREDIT MARKET DEBT OUTSTANDING 1
Billions of dollars, end of period
1994
tyyz

1995

1996'

iyyj
Q4

Qi

Q2

Q3

Q4

Ql

Q2

Nonfinancial sectors
1 Total credit market debt owed by
domestic nonfinancial sectors

ll,894.6 r

12,536.4r

13,163.8"

13,884.2"

13,163.8"

13,339.7"

13,547.7"

13,700.5"

13,884.2"

14,080.4

14,228.8

By sector and instrument
2 Federal government
3
Treasury securities
4
Budget agencv securities and mortgages

3,080.3
3,061.6
18.8

3,336.5
3,309.9
26.6

3,492.3
3,465.6
26.7

3,636.7
3,608.5
28.2

3,492.3
3,465.6
26.7

3,557.9
3,531.5
26.4

3,583.5
3,556.7
26.8

3,603.4
3,576.5
26.9

3,636.7
3,608.5
28.2

3,717.2
3,689.6
27.6

3,693.8
3,665.5
28.2

5 Nonfederal

8,814.2

9,199.9'

9,671.5'

10,247.5'

9,671.5'

9,781.8'

9,964.2'

10,097.1'

10,247.5'

10,363.2

10,535.0

6
7
8
y
10
11
12
13
14
15
16

By instrument
Commercial paper
Municipal securities and loans
Corporate bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Consumer credit

107.1
1,302.8
1,154.5
672.2
686.5
4,088.7
3,037.4
272.5
698.1
80.7
802.4

117.8
1,377.5
1,229.7
675.9'
677.1'
4,258.0'
3,225.5'
267.9'
683.4
81.2
863.9

139.2
1,348.2
1,253.0
749.0
737.8'
4,454.0'
3,429.4'
269.5'
672.1'
83.0
990.2

157.4
1,304.0'
1,326.3
848.6'
796.8'
4,682.6
3,626.3'
280.1'
691.6'
84.6
1,131.9

139.2
1,348.2
1,253.0
749.0
737.8'
4,454.0'
3,429.4'
269.5'
672.1'
83.0
990.2

149.8
1,335.4
1,266.3
782.7'
762.6'
4,494.1'
3,465.0'
271.2'
674.6'
83.4
990.9

162.9
1,331.7
1,290.9
810.7'
776.9'
4,560.3'
3,519.0'
273.9'
683.6'
83.8
1,030.8

163.3
1,308.2'
1,305.8
824.3'
782.1'
4,635.2
3,587.1'
276.7'
687.0'
84.4
1,078.2

157.4
1,304.0'
1,326.3
848.6'
796.8'
4,682.6
3,626.3'
280.1'
691.6'
84.6
1,131.9

174.2
1,302.0
1,341.5
853.9
809.3
4,756.6
3,689.2
283.5
698.7
85.2
1,125.8

181.7
1,307.8
1,359.4
876.8
815.7
4,842.5
3,757.7
288.1
710.2
86.5
1,151.0

17
18
19
20
21
22

By borrowing sector
Households
Nonfinancial business
Corporate
Nonfarm noncorporate
Farm
State and local government

4,021.5r
3,696.8
2,437.6
1,122.9
136.3
1,095.9

4,279.7'
3,761.9'
2,496.5
1,127.1'
138.3
1,158.2

4,651.8'
3,904.9'
2,624.8'
1,139.0'
141.2
1,114.8

5,034.9'
4,146.4'
2,829.9'
1,173.8'
142.7
1,066.2'

4,651.8'
3,904.9'
2,624.8'
1,139.0'
141.2
1,114.8

4,696.9'
3,982.8'
2,695.4'
1,148.5'
138.9
1,102.2

4,801.4'
4,066.0'
2,767.3'
1,155.9'
142.8
1,096.8

4,925.9'
4,098.8'
2,790.0'
1,164.0'
144.8
1,072.4'

5,034.9'
4,146.4'
2,829.9'
1,173.8'
142.7
1,066.2'

5,094.8
4,203.8
2,878.3
1,185.2
140.3
1,064.6

5,203.3
4,263.0
2,923.0
1,194.7
145.3
1,068.7

23 Foreign credit market debt held in
United States

315.2

385.6

370.4

439.9

370.4

385.7

396.8

419.8

439.9

450.8

459.6

24
23
26
'27

77.7
147.2
23.9
66.4

68.7
230.1
24.6
62.1

41.4
242.3
26.1
60.6

55.0
290.6
34.6
59.7

41.4
242.3
26.1
60.6

50.9
245.8
28.2
60.8

48.1
258.6
29.6
60.5

55.8
272.4
31.6
60.0

55.0
290.6
34.6
59.7

51.5
302.5
36.8
60.0

53.4
305.3
40.5
60.4

Commercial paper
Bonds
Bank loans n.e.c
Other loans and advances

28 Total credit market debt owed by nonfinancial
sectors, domestic and foreign

12,209.8r

12,921.9'

13,534.2"

14,324.1"

13,534.2"

13,725.4"

13,944.5"

14,120.3"

14,324.1"

14,531.2

14,688.4

Financial sectors
29 Total credit market debt owed by
financial sectors

3,025.0

3,322.6"

3,794.6

4,243.9"

3,794.6

3,861.5

3,971.9

4,096.3

4,243.9"

4,324.7

4,496.6

30
31
32
33
34
33
36
37
38
39

By instrument
Federal government-related
Government-sponsored enterprises securities
Mortgage pool securities
Loans from U.S. government
Private
Open maiket paper
Corporate bonds
Bank loans n.e.c
Other loans and advances
Mortgages

1,720.0
443.1
1,272.0
4.8
1,305.1
394.3
738.4
80.5
86.6
5.4

1,885.2'
523.7
1,356.8'
4.8
1,437.4
393.5
858.5
67.6
108.9
8.9

2,172.7
700.6
1,472.1
.0
1,621.9
442.8
973.5
55.3
131.6
18.7

2,377.8'
807.5
1,570.3
.0
1,866.0'
488.0
1,158.2'
60.8
135.0
24.0

2,172.7
700.6
1,472.1
.0
1,621.9
442.8
973.5
55.3
131.6
18.7

2,196.2
716.3
1,479.9
.0
1,665.3
454.1
1,012.3
53.4
125.4
20.0

2,247.1
748.1
1,499.0
.0
1,724.8
462.8
1,056.4
58.4
125.7
21.3

2,300.1
773.5
1,526.6
.0
1,796.2
473.6
1,112.6'
60.3
127.0
22.6

2,377.8'
807.5
1,570.3
.0
1,866.0'
488.0
1,158.2'
60.8
135.0
24.0

2,416.6
816.9
1,599.7
.0
1,908.1
491.9
1,190.8
66.4
133.6
25.4

2,493.5
850.1
1,643.4
.0
2,003.1
518.5
1,239.8
72.2
145.8
26.9

40
41
42
43
44
45
46
47
48
49
30
31
32

By borrowing sector
Commercial banks
Bank holding companies
Savings institutions
Credit unions
Life insurance companies
Government-sponsored enterprises
Federally related mortgage pools
Issuers of asset-backed securities (ABSs)
Brokers and dealers
Finance companies
Mortgage companies
Real estate investment trusts (REITs)
Funding corporations

80.0
114.6
88.4
.0
.0
447.9
1,272.0
404.3
21.7
390.4
30.2
13.9
161.6

84.6
123.4
99.6
.2
.2
528.5
1,356.8'
487.6
33.7
390.5
30.2
17.4
169.9

94.5
133.6
112.4
.5
.6
700.6
1,472.1
556.1
34.3
440.7
18.7
31.1
199.3

102.6
148.0
115.0
.4
.5
807.5
1,570.3
688.4'
29.3
492.3
19.1
36.5
233.9

94.5
133.6
112.4
.5
.6
700.6
1,472.1
556.1
34.3
440.7
18.7
31.1
199.3

95.0
137.7
107.7
.4
.6
716.3
1,479.9
570.0
26.9
456.7
16.9
32.4
221.1

99.9
142.9
105.9
.3
.6
748.1
1,499.0
596.8
26.8
467.2
20.6
33.7
230.0

102.0
150.3'
107.2
.4
.6
773.5
1,526.6
639.8'
27.4
471.9
21.6
35.0
239.9

102.6
148.0
115.0
.4
.5
807.5
1,570.3
688.4'
29.3
492.3
19.1
36.5
233.9

100.5
141.3
117.8
.4
1.1
816.9
1,599.7
718.2
21.4
499.8
24.1
38.0
245.6

103.6
148.4
128.3
.3
1.2
850.1
1,643.4
748.9
24.6
514.4
28.1
39.6
265.6

All sectors

53 Total credit market debt, domestic and foreign....
54
35
56
37
38
39
60
61

Open maiket paper
U.S. government securities
Municipal securities
Corporate and foreign bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Consumer credit

15,234.8"

16,244.5'

17,328.8"

18,568.0"

17,328.8"

17,586.9"

17,916.3"

18,216.6"

18,568.0"

18,855.9

19,185.0

579.0
4,795.5
1,302.8
2,040.1
776.6
844.2
4,094.1
802.4

580.0
5,216.9'
1,377.5
2,318.3
768.0'
852.9'
4,266.9'
863.9

623.5
5,665.0
1,348.2
2,468.8
830.4
929.9'
4,472.7'
990.2

700.4
6,014.6
1,304.0'
2,775.1'
943.9
991.5'
4,706.6'
1,131.9

623.5
5,665.0
1,348.2
2,468.8
830.4
929.9'
4,472.7'
990.2

654.7
5,754.1
1,335.4
2,524.4
864.3'
948.8'
4,514.2'
990.9

673.8
5,830.6
1,331.7
2,605.9
898.7'
963.2'
4,581.6
1,030.8

692.7
5,903.5
1,308.2'
2,690.8'
916.2'
969.1'
4,657.9'
1,078.2

700.4
6,014.6
1,304.0'
2,775.1'
943.9
991.5'
4,706.6'
1,131.9

717.6
6,133.8
1,302.0
2,834.9
957.0
1,002.9
4,782.0
1,125.8

753.6
6,187.2
1,307.8
2,904.6
989.6
1,021.8
4,869.4
1,151.0

1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables
L.2 through L.4. For ordering address, see inside front cover.




Flow of Funds
1.60

A41

SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1
Billions of dollars except as noted, end of period
1994
Transaction category or sector

1992

1993

1994

1996'

1995

1995
Q4

Q1

Q2

Q3

Q4

Q1

Q2

CREDIT MARKET DEBT OUTSTANDING 2

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

Domestic nonfederal nonfinancial sectors
Households
Nonfinancial corporate business
Nonfarm noncorporate business
State and local governments
Federal government
Rest of the world
Financial sectors
Monetary authority
Commercial banking
U.S. chartered banks
Foreign banking offices in United States
Bank holding companies
Banks in U.S. affiliated areas
Savings institutions
Credit unions
Bank personal trusts and estates
Life insurance companies
Other insurance companies
Private pension funds
State and local government retirement funds
Money market mutual funds
Mutual funds
Closed-end funds
Government-sponsored enterprises
Federally related mortgage pools
Asset-backed securities issuers (ABSs)
Finance companies
Mortgage companies
Real estate investment trusts (REITs)
Brokers and dealers
Funding corporations

15,234.8r

16,244.5r

17,328.8'

18,568.0'

17,328.8'

17,586.9'

17,916.3'

18,216.6'

18,568.0'

18,855.9

19,185.0

2,688.8r
l,635.0 r
257.8
38.1
757.9r
236. l r
1,023.0
ll,286.9 r
300.4
2,948.6
2,571.9
335.8
17.5
23.4
937.4
197.1
231.5
1,309.1
389.4
571.7
402.3r
408.6
566.4
67.7
457.8
1,272.0
378.0
496.4
60.5
8.1
122.7
161.3r

2,758.7r
l,688.5 r
271.5
37.0r
761.7r
231.7
l,147.8 r
12,106.3'
336.7
3,090.8
2,721.5
326.0
17.5
25.8
914.1'
218.7
240.9
1,420.6
422.7
617.6
423,4r
429.0
725.9
82.0r
546.4r
l,356.8 r
458.8
482.8
60.4
8.6
137.5
132.5r

3,037.4'
2,012.2'
321.1
37.2'
666.9'
207.5'
1,254.7'
12,829.1'
368.2
3,254.3
2,869.6
337.1
18.4
29.2
920.8'
246.8
248.0
1,487.1'
446.4
664.6
454.1'
459.0
718.8
78.7'
667.0'
1,472.1
520.7
551.0
37.5
13.3
93.3
127.5'

2,901.2'
2,009.6'
315.1'
37.5'
539.0'
186.1'
1,561.8'
13,918.9'
380.8
3,520.1
3,056.1
412.6
18.0
33.4
913.3
263.0
229.2
1,586.2
468.7
725.9
476.8'
545.5
771.3
92.0'
756.0
1,570.3
632.7
615.2
34.1
15.1
183.4
139.3'

3,037.4'
2,012.2'
321.1
37.2'
666.9'
207.5'
1,254.7'
12,829.1'
368.2
3,254.3
2,869.6
337.1
18.4
29.2
920.8'
246.8
248.0
1,487.1'
446.4
664.6
454.1'
459.0
718.8
78.7'
667.0'
1,472.1
520.7
551.0
37.5
13.3
93.3
127.5'

3,001.7'
2,033.1'
292.6
37.3'
638.7'
204.2
1,324.0'
13,057.1'
367.1
3,327.8
2,906.5
373.6
18.0
29.8
925.3
248.1
245.3
1,523.1
451.9
679.3
469.4'
480.6
719.3
80.8'
671.9
1,479.9
531.5
568.5
33.9
13.8
101.0
138.6'

2,950.9'
1,987.9'
303.5'
37.3'
622.1'
198.2
1,402.1'
13,365.2'
375.7
3,410.1
2,963.7
396.0
19.3
31.1
922.4
255.0
240.2
1,557.1
457.3
693.6
470.9'
508.0
724.8
84.6'
695.9
1,499.0
555.2
586.9
41.4
14.2
137.5
135.5'

2,953.4'
2,055.5'
290.6'
37.4'
569.9'
192.2
1,493.4'
13,577.6'
370.6
3,473.2
3,023.7
401.1
16.9
31.5
930.4
258.5
234.2
1,575.5
463.0
706.2
470.6'
505.7
739.2
88.7'
708.4
1,526.6
595.7
594.7
43.2
14.7
137.0
141.4'

2,901.2'
2,009.6'
315.1'
37.5'
539.0'
186.1'
1,561.8'
13,918.9'
380.8
3,520.1
3,056.1
412.6
18.0
33.4
913.3
263.0
229.2
1,586.2
468.7
725.9
476.8'
545.5
771.3
92.0'
756.0
1,570.3
632.7
615.2
34.1
15.1
183.4
139.3'

2,857.8
2,013.0
291.3
37.6
515.9
180.8
1,653.6
14,163.8
379.6
3,541.6
3,068.8
422.2
16.8
33.9
921.8
267.0
224.7
1,600.5
474.5
746.5
491.1
595.6
792.4
94.8
765.2
1,599.7
657.6
621.7
46.1
15.6
156.2
171.8

2,882.4
2,023.4
307.9
37.7
513.4
177.0
1,718.2
14,407.3
386.3
3,590.8
3,101.3
437.1
18.1
34.3
933.1
276.9
221.6
1,601.0
480.2
778.4
504.0
594.7
807.9
97.2
797.8
1,643.4
685.7
632.6
41.7
16.1
138.2
179.6

15,234.8r

16,244.5r

17,328.8'

18,568.0'

17,328.8'

17,586.9'

17,916.3'

18,216.6'

18,568.0'

18,855.9

19,185.0

51.8
8.0
16.5
267.7
138.5
1,134.4
2,293.5
415.2
539.5
399.9
992.5
217.7
434.8r
4,225.4r
995.1
79.7
660.6
4,784.5r

53.4
8.0
17.0
271.8
189.3
1,251.7
2,223.2
391.7
559.6
471.1
1,375.4
279.0
470.8r
4,638.5'
l,048.2 r
84.9
691.3
5,173.0'

53.2
8.0
17.6
324.6
280.0
1,242.0
2,183.3
411.2
602.9
549.4
1,477.3
279.0
505.3'
4,846.9'
1,162.2'
88.0
699.4
5,436.9'

63.7
10.2
18.2
361.4
290.7'
1,229.3
2,279.7
476.9
745.3
660.1
1,852.8
305.6
550.2'
5,567.1'
1,258.5'
89.3
767.4
5,839.8'

53.2
8.0
17.6
324.6
280.0
1,242.0
2,183.3
411.2
602.9
549.4
1,477.3
279.0
505.3'
4,846.9'
1,162.2'
88.0
699.4
5,436.9'

64.1
8.0
17.8
333.3
272.8
1,193.7
2,200.2
441.2
634.0
603.4
1,553.3
269.5
518.0'
5,030.8'
1,155.1'
719.7
5,516> !

67.1
8.0
18.0
361.0
265.9
1,246.2
2,222.6
456.3
678.5
629.3
1,661.0
277.9
532.4'
5,224.2'
1,177.5'
89.2
739.7
5,574.1'

65.1
10.2
18.2
353.6
267.2'
1,200.3
2,255.8
477.5
702.7
655.5
1,782.0
286.2
540.6'
5,439.5'
1,211.1'
91.9
758.6
5,684.4'

63.7
10.2
18.2
361.4
290.7'
1,229.3
2,279.7
476.9
745.3
660.1
1,852.8
305.6
550.2'
5,567.1'
1,258.5'
89.3
767.4
5,839.8'

62.1
10.2
18.2
382.7
266,3
1,183.3
2,342.3
493.6
816.9
666.2
1,994.3
326.9
555.2
5,749.7
1,246.0
94.3
781.6
5,974.4

61.4
10.2
18.2
382.9
249.9
1,212.3
2,340.1
511.1
809.5
692.1
2,130.6
318.6
565.9
5,897.7
1,278.6
90.3
790.9
5,988.9

32,890.0r

35,442.4'

37,496.2'

40,934.0'

37,496.2'

38,2i;.' r

39,145.2'

40,017.0'

40,934.0'

41,820.1

42,534.3

19.6
5,456.8r
2,460. l r

20.1
6,280.0'
2,495.5'

21.1
6,263.3'
2,587.5'

22.1
8,389.9'
2,699.6'

21.1
6,263.3'
2,587.5'

6,797.5'
2,a.7.? r

22.9
7,348.4'
2,641.1'

22.1
7,972.4'
2,655.0'

22.1
8,389.9'
2,699.6'

22.1
8,875.8
2,736.1

22.0
9,170.9
2,758.3

-4.9
217.6
-9.3
41.9r
25.2
-698.8 r

-5.1
232.6
-4.7
76.1'
26.8
-816.7'

-5.4
278.7
-6.5
108.5'
35.4'
-876.0'

-5.8
309.0'
-9.0
111.2'
44.1'
-911.7'

-5.4
278.7
-6.5
108.5'
35.4'
-876.0'

-5.4
289.1
-2.7
130.7'
20.5'
-877.2'

-5.5
314.5
-2.9
110.2'
35.9'
-830.6'

-5.6
300.6
.1
131.2'
39.1'
-793.8'

-5.8
309.0'
-9.0
111.2'
44.1'
-911.7'

-6.1
324.4
-2.6
106.7
23.9
-981.8

-6.3
330.3
-8.0
118.2
38.0
-1,057.0

6.8
42.0
-251.1

5.6
40.7
-248.0'

3.4
38.0
-252.0'

3.1
34.2
-275.4'

3.4
38.0
-252.0'

4.2
33.3
-295.1'

2.0
35.7
-306.2'

.6
27.3
-330.0'

3.1
34.2
-275.4'

.0
29.6
-326.5

-3.4
31.8
-336.2

41,457.1'

44,930.6'

47,044.0'

52,745.9'

47,044.0'

48,342.6'

49,804.6'

51,297.2'

52,745.9'

54,286.6

55,378.2

RELATION OF LIABILITIES
TO FINANCIAL ASSETS

34 Total credit market debt
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52

Other liabilities
Official foreign exchange
Special drawing rights certificates
Treasury currency
Foreign deposits
Net interbank liabilities
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Mutual fund shares
Security credit
Life insurance reserves
Pension fund reserves
Trade payables
Taxes payable
Investment in bank personal trusts
Miscellaneous

53 Total liabilities
Financial assets not included in liabilities (+)
54 Gold and special drawing rights
55 Coiporate equities
56 Household equity in noncorporate business
57
58
59
60
61
62

Liabilities not identified as assets ( - )
Treasury currency
Foreign deposits
Net interbank transactions
Security repurchase agreements
Taxes payable
Miscellaneous

Floats not included in assets (—)
63 Federal government checkable deposits
64 Other checkable deposits
65 Trade credit
66 Total identified to sectors as assets

1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables
L.6 and L.7. For ordering address, see inside front cover.




94.3

22 7

2. Excludes corporate equities and mutual fund shares.

A42
2.10

Domestic Nonfinancial Statistics • February 1997
NONFINANCIAL BUSINESS ACTIVITY

Selected Measures

Monthly data seasonally adjusted, and indexes 1 9 8 7 = 1 0 0 , except as noted
1996
Measure

1994

1993

1995
Mar.

Apr.

May

June

July

Aug.'

Sept.'

Oct.'

Nov.

1 Industrial production1

111.5

118.1

121.9

123.6

124.5

125.4

126.4

126.3

126.9

127.1

126.9

128.0

Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials

110.0
112.7
109.5
117.5
101.8
113.8

115.6
118.3
113.7
125.3
107.3
122.0

118.3
121.4
115.1
131.4
109.0
127.4

120.0
123.4
115.3
136.5
109.6
129.1

120.8
124.8
115.9
139.2
108.6
130.3

121.3
125.1
116.3
139.2
110.1
131.6

122.3
126.0
116.8
140.8
111.3
132.6

122.5
126.7
117.3
142.0
109.9
132.1

122.7
126.5
116.5
142.8
111.2
133.5

123.0
126.7
116.6
143.0
111.9
133.5

123.0
126.7
116.3
143.7
111.7
132.9

124.1
128.2
117.8
145.2
111.9
133.9

112.3

119.7

123.9

125.2

126.5

127.4

128.5

129.0

129.2

129.6

129.4

130.4

80.6

83.3

83.0

81.3

81.9

82.1

82.6

82.5

82.4

82.3

81.9

82.2

10 Construction contracts3

105.2'

114.3r

118.4r

127.0

130.0

129.0'

126.0r

128.0'

131.0

124.0

115.0

n.a.

11 Nonagricultural employment, total4
12
Goods-producing, total
13
Manufacturing, total
14
Manufacturing, production workers
Service-producing
15
16 Personal income, total
Wages and salary disbursements
17
18
Manufacturing
Disposable personal income5
19
20 Retail sales5

108.6
94.6
95.1
95.3
113.1
141.3
136.0
119.3
142.4
134.7

112.0
96.9
96.4
97.5
116.8
148.4
142.6
124.9
149.3
144.8

115.0
98.1
97.2
98.7
120.3
157.7
150.9
130.4
158.2
152.2

116.5
98.1
96.2
97.4
122.4
163.5
156.7
131.8
163.7
159.3

116.6
98.1
96.2
97.5
122.6
164.3
157.5
134.4
162.8
159.1

117.0
98.3
96.3
97.5
123.0
165.2
158.3
135.1
165.1
160.4

117.2
98.4
96.3
97.5
123.3
166.6
160.3
135.8
166.4
159.4

117.5
98.3
96.2
97.4
123.6
166.7'
159.8'
135.8
166.5
159.6

117.8
98.5
96.3
97.5
123.9
167.7
161.1
136.9
167.4
159.6

117.8
98.3
96.0
97.2
124.0
168.6
162.2
136.7
168.2
160.7

118.0
98.4
96.1
97.3
124.2
168.7
162.0
136.7
168.4
161.3

118.1
98.5
96.1
97.4
124.3
169.6
163.0
137.4
169.2
160.7

Prices6
21 Consumer (1982-84=100)
22 Producer finished goods (1982=100)

144.5
124.7

148.2
125.5

152.4
127.9

155.7
130.1

156.3
130.6

156.6
131.1

156.7
131.7

157.0
131.5

157.3
131.9

157.8
131.6

158.3
132.5

158.6
132.5

2
3
4
5
6
7

Industry groupings
8 Manufacturing
9 Capacity utilization, manufacturing (percent)2. .

1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For
the ordering address, see the inside front cover. The latest historical revision of the industrial
production index and the capacity utilization rates was released in November 1995. See "A
Revision to Industrial Production and Capacity Utilization, 1991-95," Federal Reserve
Bulletin, vol. 82 (January 1996), pp. 16—25. For a detailed description of the industrial
production index, 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.

2.11

5. Based on data from U.S. Department of Commerce, Survey of Current Business.
6. 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 and 5, and indexes for series
mentioned in notes 3 and 6, 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
1996
Category

1993

1994

1995
Apr.

May

June

July

Aug.

Sept.'

Oct.'

Nov.

HOUSEHOLD SURVEY DATA 1

1 Civilian labor force2
Employment
2
Nonagricultural industries3
Agriculture
3
Unemployment
Number
4
Rate (percent of civilian labor force)
5

129,200

131,056

132,304

133,361

133,910

133,669

134,181

133,885

134,340

134,574

134,818

117,144
3,115

119,651
3,409

121,460
3,440

122,726
3,368

122,971
3,491

123,228
3,382

123,382
3,502

123,635
3,421

123,833
3,535

124,169
3,457

124,242
3,355

8,940

6.9

7,996
6.1

7,404
5.6

7,266
5.4

7,448
5.6

7,060
5.3

7,297
5.4

6,830
5.1

6,971
5.2

6,948
5.2

7,221
5.4

110,730

114,172

117,203

118,922

119,332

119,537

119,772

120,052

120,050

120,274

120,392

18,075
610

18,321
601
4,986
5,993
26,670
6,896
31,579
19,128

18,468
580
5,158
6,165
27,585
6,830
33,107
19,310

18,283
573
5,353
6.294
27,965
6,942

18,303
576
5,384
6,309
28,052
6,964
34,285
19,459

18.298
575
5,401
6,329
28,143
6,967
34,378
19.446

18,267
570
5,427
6,333
28,256
6,987
34,448
19,484

18,291
570
5,437
6,342
28,275
6,999
34,532
19,606

18,241
567
5,449
6,337
28,321
7,009
34,607
19,519

18,250
566
5,461
6,337
28,429
7,025
34,695
19,511

18,259
565
5,475
6,349
28,449
7,041
34,765
19,489

ESTABLISHMENT SURVEY DATA

6 Nonagricultural payroll employment4
7 Manufacturing

8
9
10
11
12
13
14

Mining
Contract construction
Transportation and public utilities
Trade
Finance
Service
Government

4,668
5,829
25,755
6,757
30,197

18,841

1. Beginning January 1994, reflects redesign of current population survey and population
controls from the 1990 census.
2. 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.
3. Includes self-employed, unpaid family, and domestic service workers.




34,117

19,395

4. Includes all full- and part-time employees who worked during, or received pay for, the
pay period that includes the twelfth day of the month; excludes proprietors, self-employed
persons, household and unpaid family workers, and members of the armed forces. Data are
adjusted to the March 1992 benchmark, and only seasonally adjusted data are available at this
time.
SOURCE. Based on data from U.S. Department of Labor, Employment and Earnings.

Selected Measures
2.12

A43

OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1
Seasonally adjusted
1996

1995

1996

1995

1996

1995

Series
Q4

Ql

Q3 r

Q2

Q4

Ql

Q2

Q3

Capacity (percent of 1987 output)

Output (1987=100)

Q4

Ql

Q2

Q3 r

Capacity utilization rate (percent)2

1 Total industry

122.5

123.4

125.4

126.8

147.7

149.1

150.6

152.0

82.9

82.8

83.3

83.4

2 Manufacturing

124.6

125.3

127.5

129.3

151.9

153.5

155.1

156.8

82.0

81.6

82.2

82.4

Primary processing3
Advanced processing

117.1
128.1

116.7
129.4

118.6
131.7

120.1
133.6

136.1
159.5

136.9
161.5

137.8
163.5

138.6
165.6

86.1
80.3

85.2
80.1

86.1
80.5

86.7
80.7

5
6
7
8
9
10
11
12
13

Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Industrial machinery and equipment
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment

134.2
105.8
118.8
121.3
115.3
186.8
182.9
140.5

136.0
104.6
118.9
122.6
113.8
195.3
186.3
132.6

139.5
108.9
119.6
122.7
115.3
201.8
189.0
145.9

142.0
108.5
120.0
123.7
115.1
209.1
190.3
150.9

164.2
120.9
129.5
133.5
124.0
212.0
213.9
179.2

166.7
121.7
130.3
134.4
124.8
218.1
221.8
181.3

169.4
122.4
131.4
135.7
125.5
224.5
229.9
182.9

172.1
123.1
132.4
137.0
126.3
231.2
238.3
184.6

81.7
87.5
91.8
90.9
93.0
88.1
85.5
78.4

81.6
85.9
91.2
91.2
91.2
89.5
84.0
73.2

82.4
89.0
91.0
90.4
91.8
89.9
82.2
79.8

82.5
88.1
90.6
90.3
91.1
90.4
79.8
81.8

79.0

84.0

85.8

88.2

129.3

128.6

128.1

127.6

61.1

65.3

67.0

69.2

14
15
16
17
18
19

Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products

113.9
109.4
118.1
126.4
123.1
107.7

113.5
106.4
114.6
126.9
126.9
109.7

114.2
109.4
119.3
127.3
132.2
110.0

115.2
110.5
120.0
129.7
134.4
110.9

138.4
132.8
133.9
156.5
137.1
116.6

139.0
133.7
134.9
157.5
138.6
116.8

139.6
134.2
135.8
158.5
139.9
117.1

140.1
134.8
136.8
159.5
141.1
117.3

82.3
82.4
88.2
80.7
89.7
92.4

81.7
79.6
85.0
80.6
91.6
93.9

81.8
81.5
87.8
80.3
94.6
93.9

82.2
82.0
87.7
81.3
95.2
94.5

98.2
124.1
123.7

98.7
126.7
126.4

101.2
127.1
127.0

102.1
124.0
124.0

111.9
135.6
133.0

111.9
136.0
133.4

111.8
136.5
133.9

111.8
137.0
134.5

87.8
91.5
93.1

88.2
93.2
94.8

90.5
93.1
94.8

91.3
90.5
92.3

1973

1975

Previous cycle5

High

Low

High

3
4

20 Mining
21 Utilities
22
Electric

Low

Latest cycle6
High

Low

1996

1995
Nov.

June

July

Aug/

Sept/

Oct.

Nov.p

83.3

Capacity utilization rate (percent)2
1 Total industry

89.2

72.6

87.3

71.8

84.9

78.0

83.0

83.7

83.4

83.5

83.3

82.9

2 Manufacturing

88.9

70.8

87.3

70.0

85.2

76.6

82.0

82.6

82.5

82.4

82.3

81.9

82.2

92.2
87.5

68.9
72.0

89.7
86.3

66.8
71.4

89.0
83.5

77.9
76.1

86.0
80.3

86.8
80.8

86.6
80.8

86.6
80.6

86.8
80.5

86.4
80.0

86.2
80.6

Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Industrial machinery and
equipment
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment

88.8
90.1
100.6
105.8
92.9

68.5
62.2
66.2
66.6
61.3

86.9
87.6
102.4
110.4
90.5

65.0
60.9
46.8
38.3
62.2

84.0
93.3
92.8
95.7
88.7

73.7
76.1
74.2
72.0
75.2

81.8
86.7
93.3
94.5
91.8

82.9
90.2
91.9
91.2
92.7

82.6
87.4
89.8
89.9
89.7

82.6
88.6
90.7
90.6
90.8

82.3
88.4
91.4
90.3
92.9

81.4
87.2
91.7
92.4
90.7

81.9
87.6
90.0
89.7
90.3

96.4
87.8
93.4

74.5
63.8
51.1

92.1
89.4
93.0

64.9
71.1
44.5

84.0
84.9
85.1

71.8
77.0
56.6

88.0
85.8
78.5

90.6
82.1
81.1

89.9
80.7
83.9

91.1
79.8
81.4

90.3
78.9
79.9

90.0
77.7
74.4

90.0
77.3
78.8

77.0

66.6

81.1

66.9

88.4

78.8

60.1

67.1

68.4

69.1

70.0

71.2

72.6

Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products

87.9
92.0
96.9
87.9
102.0
96.7

71.8
60.4
69.0
69.9
50.6
81.1

87.0
91.7
94.2
85.1
90.9
89.5

76.9
73.8
82.0
70.1
63.4
68.2

86.7
92.1
94.8
85.9
97.0
88.5

80.3
78.8
86.7
79.0
74.8
84.6

82.2
82.0
86.8
80.5
90.3
92.1

82.0
82.7
87.7
80.7
95.8
94.2

82.3
83.5
89.1
81.4
94.7
93.4

82.0
81.7
86.9
81.0
94.9
95.1

82.3
80.8
87.1
81.4
96.1
95.2

82.5
81.5
85.8
82.0

82.6
81.9
86.4
82.0

96.0

93.9

94.4
95.6
99.0

88.4
82.5
82.7

96.6
88.3
88.3

80.6
76.2
78.7

86.5
92.6
94.8

86.1
83.1
86.7

87.9
92.5
93.0

91.9
92.6
94.5

90.3
89.6
91.4

91.9
91.6
93.5

91.9
90.4
91.9

91.3
90.6
91.8

91.3
92.7
94.0

3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

Primary processing3
Advanced processing

20 Mining
?1 Utilities
22 Electric

1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For
the ordering address, see the inside front cover. The latest historical revision of the industrial
production index and the capacity utilization rates was released in November 1995. See "A
Revision to Industrial Production and Capacity Utilization, 1991-95," Federal Reserve
Bulletin, vol. 82 (January 1996), pp. 16—25. For a detailed description of the industrial
production index, see "Industrial Production: 1989 Developments and Historical Revision,"
Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204.
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; synthetic
materials; fertilizer materials; petroleum products; rubber and plastics; stone, clay, and glass;
primary metals; and fabricated metals.
4. Advanced processing includes foods; tobacco; apparel; furniture and fixtures; printing
and publishing; chemical products such as drugs and toiletries; agricultural chemicals; leather
and products; machinery; transportation equipment; instruments; and miscellaneous manufactures.
5. Monthly highs, 1978-80; monthly lows, 1982.
6. Monthly highs, 1988-89; monthly lows, 1990-91.

A44
2.13

Domestic Nonfinancial Statistics • February 1997
INDUSTRIAL PRODUCTION

Indexes and Gross Value1

Monthly data seasonally adjusted

roup

1992
proportion

1995

1996

1995
avg.
Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.r

Sept.r

Oct.

Nov.p

Index (1987 = 100)
MAJOR MARKETS

1 Total index

100.0

121.9

122.6

122.8

122.5

124.2

123.6

124.5

125.4

126.4

126.3

126.9

127.1

126.9

128.0

2 Products
3
Final products
4
Consumer goods, total
3
Durable consumer goods
6
Automotive products
/
Autos and trucks
8
Autos, consumer
y
Trucks, consumer
1U
Auto parts and allied goods
ii
Other
12
Appliances, televisions, and air
conditioners
U
Carpeting and furniture
14
Miscellaneous home goods
13
Nondurable consumer goods
16
Foods and tobacco
1/
Clothing
18
Chemical products
iy
Paper products
2U
Energy
21
Fuels
22
Residential utilities

60.6
46.3
28.6
5.6
2.5
1.6
.9
.7
.9
3.0

118.3
121.4
115.1
124.2
130.7
131.4
103.1
181.7
127.8
118.6

118.8
121.9
115.9
124.9
130.5
129.8
100.2
182.8
130.2
119.9

119.2
122.1
115.7
126.3
132.8
132.1
99.5
190.6
132.7
120.5

118.6
121.9
114.6
120.3
125.9
124.1
92.8
180.4
128.1
115.5

120.7
124.5
116.6
125.1
133.1
133.5
99.7
194.4
130.7
118.1

120.0
123.4
115.3
119.3
120.3
111.1
77.0
173.1
137.2
118.5

120.8
124.8
115.9
125.5
133.5
135.9
104.1
192.7
127.2
118.5

121.3
125.1
116.3
126.2
134.1
135.4
106.2
187.3
129.9
119.3

122.3
126.0
116.8
130.4
138.4
138.9
110.4
189.2
136.0
123.4

122.5
126.7
117.3
131.2
143.4
149.6
116.1
209.3
129.3
120.5

122.7
126.5
116.5
127.5
137.5
140.9
110.7
194.7
128.8
118.7

123.0
126.7
116.6
126.5
135.9
136.4
107.3
188.0
133.4
118.2

123.0
126.7
116.3
122.3
127.8
125.9
91.6
188.1
130.0
117.5

124.1
128.2
117.8
125.3
135.0
136.5
104.0
194.8
130.5
116.8

.7
.8
1.5
23.0
10.3
2.4
4.5
2.9
2.9
.9
2.1

135.5
105.8
118.2
112.9
111.3
94.8
131.3
106.6
116.5
108.8
119.6

145.3
104.1
117.6
113.8
110.9
91.5
135.0
108.4
121.1
108.2
126.6

141.9
107.4
118.3
113.2
110.6
89.7
136.5
106.3
119.5
108.6
124.1

132.2
101.1
116.2
113.3
110.6
88.2
138.1
104.9
121.0
108.6
126.1

137.5
103.4
117.7
114.5
112.0
90.3
138.1
106.0
122.6
111.8
127.2

138.3
105.7
116.9
114.4
112.3
88.9
136.7
105.8
123.9
112.2
128.8

139.7
104.4
117.1
113.6
112.2
88.8
133.8
106.1
121.8
111.5
126.2

138.9
106.0
118.2
114.0
112.0
89.2
135.2
107.2
121.8
111.7
126.0

151.4
109.4
118.7
113.5
111.7
88.5
134.5
106.3
121.6
111.6
125.7

145.4
104.6
118.4
114.0
112.1
88.5
137.8
108.2
117.4
111.1
120.0

137.6
105.8
117.6
113.8
111.4
88.7
136.8
108.5
119.7
112.2
122.9

135.9
106.3
117.0
114.2
112.3
88.3
138.4
108.6
117.8
111.3
120.5

135.9
105.5
116.0
114.9
112.6
89.0
139.9
109.0
119.1
113.8
121.2

134.1
106.3
114.9
116.0
113.9
88.5
140.4
109.6
122.4
111.6
126.9

23
24
23
26

Equipment
Business equipment
Information processing and related
Computer and office equipment
Industrial
Transit
Autos and trucks
Other
Defense and space equipment
Oil and gas well drilling
Manufactured homes

17.7
13.7
5.7
1.4
4.0
2.6
1.2
1.4
3.3
.6
.2

131.4
155.7
198.1
373.5
127.5
136.3
140.1
123.2
65.9
87.1
152.7

131.4
156.9
208.1
417.8
129.1
119.6
134.2
121.4
62.9
83.1
161.8

132.3
158.4
209.4
431.7
129.5
124.5
135.3
121.7
62.0
83.8
164.4

133.7
160.5
213.3
442.9
129.6
128.1
129.1
122.1
61.6
85.1
158.1

137.3
164.8
220.5
463.3
131.3
133.2
136.0
123.5
63.1
89.7
157.8

136.5
162.7
221.6
476.0
130.3
121.2
113.6
122.5
64.2
96.3
168.2

139.2
166.3
224.9
491.1
129.9
136.1
140.0
122.1
64.0
100.6
170.7

139.2
166.0
226.2
505.0
129.4
133.4
138.2
121.1
64.3
104.3
170.4

140.8
168.6
232.0
522.0
128.2
136.9
141.9
123.3
63.7
102.3
172.4

142.0
170.3
233.4
540.0
128.0
144.2
151.8
123.3
64.5
99.1
164.8

142.8
171.1
236.5
553.5
128.9
141.1
143.3
121.9
65.0
99.9
173.7

143.0
171.8
239.2
565.0
128.3
140.7
138.4
121.7
64.7
96.2
172.3

143.7
173.0
242.8
574.7
128.6
137.7
129.2
124.0
64.2
94.4
171.5

145.2
175.2
244.4
585.1
128.8
145.4
139.5
125.4
64.1
93.9

Intermediate products, total
Construction supplies
Business supplies

14.3
5.3
9.0

109.0
108.2
109.6

109.3
108.7
109.9

110.1
110.5
110.0

108.5
107.2
109.6

109.3
109.3
109.5

109.6
111.5
108.6

108.6
109.2
108.4

110.1
111.0
109.6

111.3
113.9
109.8

109.9
112.0
108.7

111.2
114.4
109.3

111.9
115.6
109.7

111.7
114.3
110.2

111.9
114.7
110.3

37 Materials
38
Durable goods materials
Durable consumer parts
40
Equipment parts
41
Other
42
Basic metal materials
43
Nondurable goods materials
44
Textile materials
43
Paper materials
46
Chemical materials
47
Other
48
Energy materials
4Y
Primary energy
30
Converted fuel materials

39.4
20.8
4.0
7.5
9.2
3.1
8.9
1.1
1.8
3.9
2.1
9.7
6.3
3.3

127.4
141.5
138.5
163.0
126.2
125.7
119.8
109.2
120.5
124.4
116.5
106.6
101.9
116.0

128.4
145.3
140.1
171.0
127.9
128.1
116.6
104.8
114.3
122.7
114.1
105.7
100.8
115.4

128.4
144.8
139.3
170.8
127.2
126.6
117.4
103.3
115.2
121.9
118.9
106.0
101.0
116.2

128.5
145.8
140.6
171.7
128.2
125.7
115.7
100.3
113.4
121.8
115.2
105.9
100.6
116.6

129.4
147.3
141.1
176.3
127.8
123.7
116.1
101.8
113.4
121.3
117.1
106.1
101.3
115.5

129.1
145.5
132.5
176.8
127.4
124.4
116.3
103.0
113.7
121.6
116.4
108.2
103.9
116.7

130.3
147.3
142.1
177.2
126.8
123.7
118.8
104.9
118.9
123.6
117.8
107.0
103.1
114.9

131.6
148.8
143.5
179.0
128.1
123.9
120.0
106.2
118.7
125.8
118.2
108.1
102.7
118.9

132.6
150.5
148.3
180.9
128.2
125.1
120.1
106.3
115.2
126.8
119.7
108.7
103.7
118.7

132.1
150.3
147.6
181.1
127.9
123.5
121.1
108.2
120.9
127.0
117.5
106.3
101.3
116.2

133.5
152.3
150.9
183.0
129.5
124.8
119.9
106.8
119.0
127.0
115.0
108.4
103.2
118.7

133.5
152.2
149.7
183.0
129.7
126.3
120.5
105.4
116.8
128.0
118.4
108.2
103.0
118.5

132.9
151.1
143.9
183.2
129.7
127.4
120.9
107.0
118.2
129.7
114.8
107.9
102.3
119.0

133.9
152.5
147.9
185.4
129.5
125.7
120.8
106.8
118.9
128.7
115.8
109.0
103.1
120.7

97.2
95.2

121.5
120.9

122.3
121.7

122.5
121.9

122.4
121.9

123.8
123.3

123.9
123.7

124.1
123.5

125.0
124.4

126.0
125.2

125.6
124.9

126.5
125.7

126.8
126.1

126.9
126.3

127.7
127.1

98.2
27.0
25.7

118.2
114.0
114.9

118.4
115.0
115.3

118.5
114.7
115.3

118.0
114.0
113.9

119.5
115.5
115.9

118.7
115.6
114.3

119.5
114.6
115.2

120.2
115.1
115.7

121.1
115.4
116.3

120.8
115.2
117.3

121.2
114.9
116.1

121.3
115.3
116.5

121.0
115.7
116.0

122.0
116.6
117.3

12.5

157.0

159.0

160.5

163.5

167.5

167.5

168.7

168.6

171.1

172.0

173.7

175.0

177.3

178.6

12.2
29.7

133.0
134.9

130.8
136.6

131.3
136.4

132.6
136.6

135.5
137.8

132.3
136.6

134.8
138.6

133.5
140.0

134.9
141.2

135.2
141.4

134.9
142.4

134.8
142.5

135.3
141.9

136.7
142.9

27

28
29
30
31
32
33
34
33

36

3Y

SPECIAL AGGREGATES

51 Total excluding autos and trucks
32 Total excluding motor vehicles and parts
33 Total excluding computer and office
equipment
34 Consumer goods excluding autos and trucks .
33 Consumer goods excluding energy
36 Business equipment excluding autos and
trucks
57 Business equipment excluding computer and
office equipment
38 Materials excluding energy




Selected Measures
2.13

INDUSTRIAL PRODUCTION

Group

Indexes and Gross Value 1 —Continued
1992
proportion

SIC
code

A45

1995
avg.
Apr.

May

July

Aug/

Sept/

Oct,

Index (1987 = 100)
MAJOR INDUSTRIES

100.0

121.9

122.6

122.8

122.5

124.2

123.6

124.5

125.4

126.4

126.3

126.9

127.1

126.9

128.0

85.4
26.6
58.9

123.9
117.6
126.8

124.5
117.1
128.0

124.8
117.3
128.4

124.5
116.7
128.2

126.2
116.3
131.0

125.2
117.1
129.0

126.5
117.5
130.8

127.4
118.5
131.5

128.5
119.7
132.7

129.0
119.8
133.3

129.2
120.0
133.6

129.6
120.6
133.9

129.4
120.3
133.7

130.4
120.1
135.3

"'24
25

45.0
2.0
1.4

132.5
104.5
111.6

134.3
104.8
109.8

134.8
106.9
109.3

134.9
103.1
109.3

137.5
103.3
110.5

135.6
107.5
107.7

138.3
108.4
108.9

139.1
107.7
112.1

141.1
110.6
111.9

141.5
107.4
109.8

142.2
109.0
110.7

142.4
109.0
111.2

141.7
107.8
113.0

143.3
108.4
113.5

32
33
331,2
331PT
333-6,9
34

2.1
3.1
1.7
.1
1.4
5.0

104.1
119.2
122.4
114.7
114.8
113.9

104.9
120.8
126.1
116.4
113.8
114.5

104.3
120.0
122.7
118.0
116.2
115.0

105.5
121.5
128.1
113.9
113.0
115.6

104.1
117.1
119.5
112.5
113.6
117.0

102.9
118.0
120.2
114.9
114.8
116.1

103.6
119.2
122.9
112.9
114.2
115.5

105.0
118.6
121.0
113.2
115.1
116.7

105.8
121.0
124.2
115.7
116.6
117.3

108.8
118.6
122.8
112.9
113.0
117.2

107.0
120.1
124.1
114.5
114.6
118.1

108.4
121.4
124.1
114.3
117.5
118.6

108.1
122.1
127.4
111.9
115.1
117.6

108.1
120.1
124.1
110.9
114.8
118.3

59 Total index
60 Manufacturing
61 Primary processing
62 Advanced processing
63
64
65
66

35

8.0

177.8

186.5

190.1

191.9

196.1

197.8

199.0

201.2

205.2

205.8

210.5

210.9

212.4

214.5

357
36
37
371
371PT

1.8
7.2
9.5
4.8
2.5

373.5
174.9
113.3
141.9
131.3

417.8
183.6
108.6
140.7
129.6

431.7
182.8
109.7
141.2
131.5

442.9
182.4
108.3
135.5
123.5

463.3
188.7
112.1
141.1
132.8

476.0
187.9
103.1
121.3
109.9

491.1
187.3
114.6
144.3
135.5

505.0
188.8
114.6
144.7
135.3

522.0
191.0
116.6
148.7
138.9

540.0
190.1
120.3
154.5
149.4

553.5
190.2
118.7
150.3
140.9

565.0
190.5
118.0
148.0
136.4

574.7
189.7
113.9
138.2
125.2

585.1
191.0
119.0
146.9
136.3

79
80

Durable goods
Lumber and products
Furniture and fixtures
Stone, clay, and glass
products
Primary metals
Iron and steel
Raw steel
Nonferrous
Fabricated metal products.. .
Industrial machinery and
equipment
Computer and office
equipment
Electrical machinery
Transportation equipment. . .
Motor vehicles and parts .
Autos and light tracks .
Aerospace and
miscellaneous
transportation
equipment
Instruments
Miscellaneous

372-6,9
38
39

4.7
5.4
1.3

85.8
110.7
122.7

77.7
111.5
123.3

79.4
109.7
123.5

82.2
111.0
122.1

84.2
113.4
124.0

85.7
112.9
124.0

86.0
112.8
122.6

85.7
112.4
123.0

85.8
113.7
124.4

87.3
112.3
124.1

88.2
113.6
124.0

89.2
113.3
124.0

90.6
114.5
123.8

92.2
114.7
124.0

81
82
83
84
85
86
87
88
89
90
91

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
30
31

40.5
9.4
1.6
1.8
2.2
3.6
6.8
9.9
1.4
3.5
.3

114.3
115.3
90.2
112.6
95.7
119.8
99.4
125.0
108.3
139.4
81.3

113.7
114.8
88.9
108.9
92.4
116.2
99.3
126.0
107.4
140.3
78.2

113.8
114.8
88.4
108.3
91.5
118.2
98.8
126.5
108.9
139.3
76.8

113.1
114.8
87.1
104.1
89.2
114.9
97.9
127.1
108.9
139.0
75.6

113.8
116.0
90.9
106.2
90.9
113.5
98.7
127.1
110.2
139.7
77.1

113.6
115.6
92.6
109.0
89.7
115.5
96.7
126.5
109.9
140.5
76.7

113.5
115.4
94.6
108.2
90.4
118.9
96.3
126.0
109.7
137.6
76.2

114.4
115.6
91.9
108.8
90.8
119.5
97.7
127.7
109.8
140.7
75.6

114.6
115.1
93.0
111.1
90.9
119.4
97.2
128.1
110.3
142.4
76.3

115.2
115.8
90.8
112.4
90.1
121.5
97.2
129.7
109.5
142.3
75.4

114.8
114.6
92.1
110.1
90.6
118.9
97.4
129.2
111.5
144.3
74.8

115.5
115.6
92.9
109.0
90.1
119.5
98.3
130.1
111.8
144.7
74.9

115.8
116.5
91.2
110.2
89.7
117.9
99.1
131.5
112.8
142.8
74.9

116.1
117.5
93.5
110.8
88.4
119.0
99.1
131.7
110.4
142.5
75.3

"lO
12
13
14

6.9
.5
1.0
4.8
.6

99.9
169.3
112.9
91.9
112.3

98.3
175.9
109.5
90.1
110.9

98.1
172.8
108.5
90.1
112.4

97.1
159.5
103.3
90.8
108.9

98.0
157.1
108.0
90.2
117.2

101.1
166.1
114.8
92.6
117.4

100.4
158.3
109.5
93.3
115.6

100.5
161.6
111.9
93.2
112.7

102.8
161.3
113.2
95.5
118.0

100.9
168.2
107.1
94.1
114.6

102.7
168.3
120.8
93.8
116.2

102.7
170.6
120.5
93.6
116.9

102.0
170.6
118.9
92.9
117.6

102.1
168.8
116.3
93.7
116.9

491.493PT
492.493PT

7.7
6.1
1.6

122.0
122.1
121.7

125.4
123.6
132.5

125.1
123.9
129.9

125.6
125.5
125.6

126.6
126.6
126.3

128.0
127.1
131.5

126.4
125.7
128.9

128.4
128.7
127.5

126.6
126.7
125.8

122.6
122.7
122.1

125.6
125.7
124.9

123.9
123.7
124.7

124.4
123.7
126.7

127.4
126.9
129.7

80.6

122.8

123.6

123.9

123.9

125.4

125.4

125.5

126.3

127.3

127.4

127.9

128.5

128.9

129.4

119.5

119.6

119.3

120.7

122.3

122.5

122.5

122.8

122.4

123.3

67
68
69
70
71
72
73
74
75
76
77
78

92 Mining
93 Metal
94 Coal
95 Oil and gas extraction
96 Stone and earth minerals
97 Utilities
98 Electric
99 Gas
SPECIAL AGGREGATES

100 Manufacturing excluding motor
vehicles and parts
101 Manufacturing excluding office
and computing machines . . .

83.7

119.7

119.5

120.7

121.3

Gross value (billions of 1992 dollars, annual rates)

MAJOR MARKETS
102 Products, total

2,002.9

2,245.6

2,255.8

2,265.7

2,248.9

2,293.1

2,269.5

2,300.3

2,307.8

2,327.6

2,334.3

2,332.3

2,333.3

2,326.8

2,354.0

103 Final
104
Consumer goods
Equipment
105
106 Intermediate

1,552.2
1,033.4
518.8
450.7

1,748.7
1,130.5
618.3
496.9

1,756.8
1,139.3
617.5
499.0

1,761.9
1,139.0
622.9
503.8

1,753.0
1,124.7
628.4
495.9

1,794.2
1,148.4
645.8
498.8

1,766.8
1,129.5
637.3
502.7

1,801.5
1,144.9
656.6
498.8

1,804.4
1,147.2
657.1
503.4

1,817.1
1,151.5
665.6
510.5

1,831.0
1,156.4
674.7
503.3

1,823.1
1,146.7
676.4
509.2

1,820.2
1,142.8
677.5
513.1

1,816.0
1,137.9
678.0
510.8

1,842.8
1,154.2
688.6
511.3

1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For
the ordering address, see the inside front cover. The latest historical revision of the industrial
production index and the capacity utilization rates was released in November 1995. See "A
Revision to Industrial Production and Capacity Utilization, 1991-95," Federal Reserve




Bulletin, vol. 82 (January 1996), pp. 16-25. For a detailed description of the industrial
production index, see "Industrial Production: 1989 Developments and Historical Revision,"
Federal Reserve Bulletin, vol. 76, (April 1990), pp. 187-204.
2. Standard industrial classification.

A46
2.14

Domestic Nonfinancial Statistics • February 1997
HOUSING AND CONSTRUCTION
Monthly figures at seasonally adjusted annual rates except as noted
1996
Item

1993

1994

1995
Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.r

Sept.r

Oct.

Private residential real estate activity (thousands of units except as noted)
NEW UNITS

1,199
987
213
1,288
1,126
162
680
543
137
1,193
1,040
153
254

1.372
1.068
303
1,457
1.198
259
762
558
204
1.347
1.160
187
304

1,332
997
335
1,354
1,076
278
776
547
229
1,313
1,066
247
340

1,378
1,056
322
1,453
1,146
307
803
569
234
1,403
1,113
290
352

1,417
1,087
330
1,514
1,183
331
800
565
235
1,328
1,052
276
341

1,423
1,097
326
1,439
1,163
276
816
581
235
1,391
1,112
279
364

1,459
1,115
344
1,511
1,209
302
826
591
235
1,350
1,073
277
378

1,452
1,098
354
1,478
1,144
334
826
590
236
1,408
1,120
288
369

1,415
1,085
330
1,490
1,209
281
829
596
233
1,418
1,128
290
372

1,457
1,073
384
1,470
1,150
320
823
592
231
1,447
1,145
302
372

1,423
1,078
345
1,533
1,239
294
820
593
227
1,445
1,151
294
369

1,399
1,040
359
1,461
1,138
323
829
594
235
1,369
1,112
257
373

1,362
1,011
351
1,386
1,082
304
828
591
237
1,360
1,112
248
369

666
293

670
337

665
372

743
370

784
355

713
368

740
369

734
362

733
356

780r
353r

819
346

782
333

714
336

126.1
147.6

130.4
153.7

133.4
157.6

131.9
155.3

139.4
163.7

137.0
162.1

140.0
170.0

136.4
163.3

140.0
166.5

144.2r
168.4r

136.9
157.7

138.1
168.4

140.0
165.3

18 Number sold

3,800

3,946

3,801

3,720

3,940

4,200

4,200

4,280

4,160

4,150

4,140

4,030

3,970

Price of units sold (thousands
of dollars)2
19 Median
20 Average

106.5
133.1

109.6
136.4

112.2
138.4

114.8
141.2

114.0
138.7

115.7
140.1

116.5
141.9

117.6
144.4

122.9
150.2

121.5
149.6

122.3
149.9

117.8
144.7

116.4
143.2

1
2
3
4
5
6
7
8
9
10
11
12
13

Permits authorized
One-family
Two-family or more
Started
One-family
Two-family or more
Under construction at end of period1
One-family
Two-family or more
Completed
One-family
Two-family or more
Mobile homes shipped

Merchant builder activity in
one-family units
14 Number sold
15 Number for sale at end of period1
Price of units sold (thousands
of dollars)2
16 Median
17 Average
EXISTING UNITS (one-family)

Value of new construction (millions of dollars)3
CONSTRUCTION

21 Total put in place

482,737

527,063

547,079

558,952

544,577

556,983

564,623

558,481

563,122

558,613

563,959

570,994

581,157

22 Private
23
Residential
24
Nonresidential
25
Industrial buildings
26
Commercial buildings
27
Other buildings
28
Public utilities and other

362,587
210,455
152,132
26,482
53,375
26,219
46,056

400,007
238,873
161,134
28,947
59,728
26,961
45,498

410,197
236,598
173,599
32,301
67,528
26,923
46,847

418,896
242,474
176,422
32,495
66,475
28,103
49,349

411,248
238,558
172,690
30,792
66,461
27,470
47,967

419,726
245,881
173,845
30,593
65,503
27,884
49,865

424,233
248,013
176,220
30,285
67,565
27,457
50,913

418,120
247,486
170,634
27,310
65,834
27,723
49,767

423,106
246,909
176,197
28,755
69,280
28,533
49,629

418,578
244,618
173,960
28,599
68,005
28,443
48,913

426,024
245,712
180,312
27,082
71,921
29,677
51,632

427,069
245,739
181,330
29,656
70,546
29,727
51,401

431,052
243,851
187,201
33,077
74,436
30,802
48,886

29 Public
30
Military
31
Highway
32
Conservation and development
33
Other

120,151
2,454
34,342
5,908
77,447

127,056
2,319
37,673
6,370
80,694

136,884
3,005
38,161
6,389
89,329

140,056
3,554
39,444
5,352
91,706

133,329
3,982
40,956
5,455
82,936

137,257
3,126
39,527
5,811
88,793

140,390
3,168
39,454
5,956
91,812

140,361
3,020
37,715
5,756
93,870

140,016
3,140
38,308
6,004
92,564

140,035
3,041
39,310
5,498
92,186

137,935
2,300
36,581
5,641
93,413

143,925
2,588
40,657
5,451
95,229

150,105
3,082
41,675
5,605
99,743

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 19,000 jurisdictions beginning in 1994.

Selected Measures
2.15

A47

CONSUMER AND PRODUCER PRICES
Percentage changes based on seasonally adjusted data except as noted
Change from 3 months earlier
(annual rate)

Change from 12
months earlier
Item

Index
level,
Nov.
1996'

1996

1996

1995
1995
Nov.

Change from 1 month earlier

1996
Nov.
Dec.

Mar.

June

Sept.

July

Aug.

Sept.

Oct.

Nov.

CONSUMER PRICES2

(1982-84=100)
1 All items
7

3 Energy items
4 All items less food and energy
Commodities
6
Services

2.6

3.3

2.4

4.0

3.1

2.6

.3

.1

.3

.3

.3

158.6

2.8
-2.7
3.0
1.7
3.6

4.4
8.1
2.6
1.1
3.2

1.9
1.9
2.2
1.7
2.5

3.2
15.8
3.5
2.6
3.4

4.6
8.4
2.2
-.3
3.9

5.3
-3.9
2.7
.9
3.2

.5
-.4
.3
.0
.3

.4
-.6
.1
-.1
.2

.5
.0
.3
.4
.2

.6
.7
.2
.1
.3

.3
1.2
.2
.1
.2

155.9
111.1
167.2
142.2
181.4

2.1
3.3
-3.2
2.9
2.6

3.0
3.7
12.9
.8
.3

4.4
4.4
10.8
3.4
2.9

2.5
.6
17.8
-.3
.0

2.2
5.9
-.5
2.2
.6

1.8
5.2
1.0
.8
1.2

-.1
-,6r

.3
,9r
,6r

-.R

.R
,OR

.2
.2
.2
.2
.3

.4
.8
1.9
-.1
-.4

.4
-.1
2.3
.0
.3

132.5
135.9
84.9
144.9
138.7

3.3
4.0

.4
-1.2

-.6
-2.9

-1.0
-3.5

.0
.0

.3
-.3

-,3r
-.3

.2
.1

.2
.1

.1
-.1

.3
.1

125.8
133.8

13.7
-1.4
-1.2

3.2
30.5
-6.5

20.8
33.9
-18.4

-4.1
52.8
-10.6

60.1
-14.1
-8.8

-7.3
21.7
-2.6

-.1'
-1.0r
,5r

-3.8
.6
.6

-2.7
1.5
.3

-1.9
7.7
-.3

117.9
89.1
151.6

PRODUCER PRICES

(1982 = 100)
7 Finished goods
8
Consumer foods
9
Consumer energy
10
Other consumer goods
11
Capital equipment
Intermediate materials
12 Excluding foods and feeds
13 Excluding energy
Crude materials
14 Foods
15 Energy
16 Other

1. Not seasonally adjusted.
2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence
measure of homeownership.




.R

,0r

2.1'
5.4r
— 1.7r

SOURCE. U.S. Department of Labor, Bureau of Labor Statistics.

A48
2.16

Domestic Nonfinancial Statistics • February 1997
GROSS DOMESTIC PRODUCT AND INCOME
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1995
Account

1993

1994

1996

1995
Q3

Q4

Ql

Q2

Q3 r

GROSS DOMESTIC PRODUCT

1 Total

6,553.0

6,935.7

7,253.8

7,309.8

7,350.6

7,426.8

7,545.1

7,616.3

4,454.1
530.7
1,368.9
2,554.6

4,700.9
580.9
1,429.7
2,690.3

4,924.9
606.4
1,485.9
2,832.6

4,957.9
615.8
1,491.2
2,850.9

4,990.5
612.8
1,494.2
2,883.5

5,060.5
625.2
1,522.1
2,913.2

5,139.4
637.6
1,544.7
2,957.1

5,165.4
630.5
1,546.5
2,988.5

871.1
850.5
598.8
171.8
427.0
251.7

1,014.4
954.9
667.2
180.2
487.0
287.7

1,065.3
1,028.2
738.5
199.7
538.8
289.8

1,074.8
1,036.6
746.3
202.5
543.8
290.3

1,064.0
1,046.2
749.7
204.0
545.7
296.5

1,068.9
1,070.7
769.0
208.4
560.6
301.7

1,096.0
1,088.0
773.8
207.4
566.3
314.2

1,156.2
1,119.6
807.0
213.5
593.5
312.6

20.6
26.8

59.5
48.0

37.0
39.6

38.2
41.5

17.8
19.9

-1.7
2.7

8.0
11.3

36.6
35.4

-62.7
657.8
720.5

-94.4
719.1
813.5

-94.7
807.4
902.0

-87.6
819.0
906.6

-67.2
837.0
904.2

-86.3
839.5
925.8

-99.2
850.0
949.2

-120.2
844.3
964.5

17 Government consumption expenditures and gross investment
18
Federal
State and local
19

1,290.4
522.6
767.8

1,314.7
516.4
798.4

1,358.3
516.6
841.7

1,364.6
516.8
847.7

1,363.4
507.7
855.7

1,383.7
518.6
865.1

1,408.8
529.6
879.2

1,414.8
525.5
889.3

By major type of product
20 Final sales, total
21
Goods
22
Durable
23
Nondurable
24
Services
25
Structures

6,532.4
2,401.4
1,014.3
1,387.2
3,584.0
547.0

6,876.2
2,534.4
1,086.2
1,448.3
3,746.5
595.3

7,216.7
2,662.2
1,147.3
1,515.0
3,926.9
627.6

7,271.5
2,688.8
1,167.2
1,521.6
3,950.2
632.6

7,332.8
2,698.0
1,166.4
1,531.7
3,992.4
642.3

7,428.6
2,749.3
1,192.1
1,557.1
4,027.9
651.4

7,537.1
2,782.0
1,219.1
1,562.9
4,087.0
668.0

7,579.6
2,785.0
1,225.5
1,559.5
4,122.0
672.6

20.6
15.7
4.9

59.5
31.9
27.7

37.0
34.9
2.2

38.2
29.2
9.1

17.8
27.3
-9.4

-1.7
12.3
-14.0

8.0
9.9
-1.9

36.6
34.7
2.0

6,386.4

6,608.7

6,742.9

6,776.4

6,780.7

6,814.3

6,892.6

6,928.4

30 Total

5,195.3

5,501.6

5,813.5

5,861.4

5,927.4

6,015.3

6,118.7

6,203.0

31 Compensation of employees
32
Wages and salaries
Government and government enterprises
33
Other
34
Supplement to wages and salaries
35
Employer contributions for social insurance
36
Other labor income
37

3,809.5
3,095.3
584.2
2,511.1
714.2
333.3
380.9

4,009.8
3,257.3
602.5
2,654.8
752.4
350.2
402.2

4,222.7
3,433.2
621.7
2,811.5
789.5
365.5
424.0

4,247.7
3,454.0
624.1
2,829.9
793.7
367.8
425.9

4,301.1
3,501.1
626.9
2,874.2
800.1
369.8
430.2

4,344.3
3,540.2
634.0
2,906.1
804.1
375.0
429.1

4,420.9
3,606.5
638.9
2,967.5
814.4
380.4
434.0

4,482.9
3,659.6
644.6
3,015.1
823.3
384.6
438.6

420.0
388.1
32.0

450.9
415.9
35.0

478.3
449.3
29.0

479.6
451.5
28.1

486.7
454.9
31.8

499.5
461.1
38.4

515.2
469.4
45.8

526.3
474.6
51.8

By source
Personal consumption expenditures
Durable goods
Nondurable goods
Services

2
3
4
5

6 Gross private domestic investment
Fixed investment
7
8
Nonresidential
Structures
9
10
Producers' durable equipment
11
Residential structures
12
13

Change in business inventories
Nonfarm

14 Net exports of goods and services
Exports
lb
Imports
16

26 Change in business inventories
Durable goods
27
28
Nondurable goods
MEMO

29 Total GDP in chained 1992 dollars
N A T I O N A L INCOME

38 Proprietors' income'
39
Business and professional'
Farm1
40
41 Rental income of persons2

102.5

116.6

122.2

120.9

125.8

126.9

124.5

127.0

42 Corporate profits'
Profits tefore tax3
43
44
Inventory valuation adjustment
Capital consumption adjustment
45

464.4
464.3
-6.6
6.7

529.5
531.2
-13.3
11.6

586.6
598.9
-28.1
15.9

612.5
607.2
-9.3
14.6

611.8
604.2
-8.8
16.5

645.1
642.2
-17.4
20.4

655.8
644.6
-11.0
22.3

661.2
635.6
2.0
23.6

46 Net interest

398.9

394.9

403.6

400.7

401.9

399.5

402.3

405.6

1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.




3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. U.S. Department of Commerce, Survey of Current Business.

Selected Measures
2.17

A49

PERSONAL INCOME AND SAVING
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1996

1995
1993

Account

1994

1995
Q3

Q4

Ql

Q2

Q3'

PERSONAL INCOME AND SAVING

1 Total personal income

5,480.1

5,753.1

6,115.1

6,146.9

6,234.5

6,308.5

6,412.4

6,501.4

2 Wage and salary disbursements
Commodity-producing industries
3
4
Manufacturing
Distributive industries
6
Service industries
7
Government and government enterprises

3,090.7
781.3
593.1
698.4
1,026.7
584.2

3,241.8
824.9
621.1
739.2
1,075.2
602.5

3,430.6
863.5
648.4
783.7
1,161.6
621.7

3,451.2
866.7
650.1
789.3
1,171.1
624.1

3,500.2
873.9
654.7
800.7
1,198.6
626.9

3,538.2
878.7
654.8
810.5
1,215.1
634.0

3,606.5
900.3
671.8
822.3
1,244.9
638.9

3,659.6
911.0
678.5
832.4
1,271.6
644.6

380.9
420.0
388.1
32.0
102.5
186.8
648.1
910.7
444.4

402.2
450.9
415.9
35.0
116.6
199.6
663.7
956.3
472.9

424.0
478.3
449.3
29.0
122.2
214.8
717.1
1,022.6
507.4

425.9
479.6
451.5
28.1
120.9
215.8
719.9
1,029.9
510.7

430.2
486.7
454.9
31.8
125.8
221.7
727.2
1,041.4
516.1

429.1
499.5
461.1
38.4
126.9
226.6
« 726.1
1,063.0
529.9

434.0
515.2
469.4
45.8
124.5
229.3
733.1
1,075.6
536.3

438.6
526.3
474.6
51.8
127.0
231.5
742.9
1,085.1
541.7

8
9
in
n
12
13
14
11
16
17

»

Other labor income
Proprietors' income1
Business and professional1
Farm1
Rental income of persons
Dividends
Personal interest income
Transfer payments
Old age survivors, disability, and health insurance benefits
LESS: Personal contributions for social insurance

18 EQUALS: Personal income

259.6

278.1

294.5

296.2

298.8

301.0

305.8

309.7

5,480.1

5,753.1

6,115.1

6,146.9

6,234.5

6,308.5

6,412.4

6,501.4

689.9

731.4

794.3

798.4

807.2

824.9

870.6

872.5

20 EQUALS: Disposable personal income

4,790.2

5,021.7

5,320.8

5,348.5

5,427.3

5,483.5

5,541.8

5,628.9

21

LESS: Personal outlays

4,575.8

4,832.3

5,071.5

5,106.6

5,144.7

5,218.1

5,300.7

5,329.8

22 EQUALS: Personal saving

214.4

189.4

249.3

241.9

282.6

265.4

241.1

299.1

24,734.3
16,806.7
18,078.0

25,349.8
17,158.4'
18,330.0

25,628.7'
17,399.5'
18,799.0

25,726.7
17,453.8'
18,829.0

25,684.5
17,459.9'
18,986.0

25,753.3
17,570.2
19,041.0

25,990.0
17,675.7
19,063.0

26,066.2
17,657.9
19,242.0

4.5

3.8

4.7

4.5

5.2

4.8

4.3

5.3

27 Gross saving

935.5

1,056.3

1,151.8

1,168.6

1,220.6

1,217.9

1,244.5

1,314.0

28 Gross private saving

962.4

1,006.7

1,071.8

1,085.9

1,138.9

1,133.8

1,121.6

1,196.1

29 Personal saving
3n Undistributed corporate profits'
31 Corporate inventory valuation adjustment

214.4
103.3
-6.6

189.4
123.2
-13.3

249.3
140.6
-28.1

241.9
159.6
-9.3

282.6
158.4
-8.8

265.4
171.8
-17.4

241.1
176.3
-11.0

299.1
182.5
2.0

Capital consumption allowances
32 Corporate
33 Noncorporate

417.0
223.1

441.0
237.7

454.0
225.2

456.9
224.7

463.6
233.4

465.6
229.1

471.0
233.2

477.2
237.4

-26.9
-187.4
68.2
-255.6
160.5
65.6
94.9

49.6
-119.6
70.6
-190.2
169.2
69.4
99.7

80.0
-87.9
73.8
-161.7
167.9
72.9
95.0

82.7
-84.6
73.8
-158.5
167.3
73.4
93.9

81.7
-80.7
73.8
-154.5
162.4
74.3
88.1

84.1
-82.0
73.2
-155.2
166.1
75.1
91.0

122.9
-54.1
72.6
-126.7
177.0
76.0
101.0

117.8
-48.4
72.3
-120.8
166.3
77.1
89.2

41 Gross investment

993.5

1,090.4

1,150.9

1,161.5

1,173.9

1,167.9

1,187.0

1,215.9

42 Gross private domestic investment
43 Gross government investment
44 Net foreign investment

871.1
210.6
-88.2

1,014.4
212.3
-136.4

1,065.3
221.9
-136.3

1,074.8
224.7
-138.1

1,064.0
220.1
-110.2

1,068.9
228.8
-129.9

1,096.0
235.1
-144.2

1,156.2
234.2
-174.6

58.0

34.1

-.9

-7.1

-46.7

-50.0

-57.5

-98.1

19

LESS: Personal tax and nontax payments

MEMO

Per capita (chained 1992 dollars)
23 Gross domestic product
24 Personal consumption expenditures
25 Disposable personal income
26 Saving rate (percent)
G R O S S SAVING

34 Gross government saving
35
Federal
36
Consumption of fixed capital
37
Current surplus or deficit ( - ) , national accounts
38
State and local
39
Consumption of fixed capital
40
Current surplus or deficit (—), national accounts

45 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.

A50
3.10

International Statistics • February 1997
U.S. INTERNATIONAL TRANSACTIONS

Summary

Millions of dollars; quarterly data seasonally adjusted except as noted1
1995
Item credits or debits

1 Balance on current account
2 Merchandise trade balance2
3
Merchandise exports
4
Merchandise imports
Military transactions, net
6 Other service transactions, net
7 Investment income, net
8 U.S. government grants
9
U.S. government pensions and other transfers
10 Private remittances and other transfers
11 Change in U.S. government assets other than official
reserve assets, net (increase, - )
12 Change in U.S. official reserve assets (increase, —)
13 Gold
14 Special drawing rights (SDRs)
15 Reserve position in International Monetary Fund
16 Foreign currencies
17 Change in U.S. private assets abroad (increase, - )
18 Bank-reported claims3
19 Nonbank-reported claims
20
U.S. purchases of foreign securities, net
21
U.S. direct investments abroad, net
22 Change in foreign official assets in United States (increase, +)
23
U.S. Treasury securities
24 Other U.S. government obligations
23
Other U.S. government liabilities4
26
Other U.S. liabilities reported by U.S. banks3
27
Other foreign official assets5
28 Change in foreign private assets in United States (increase, +)
29
U.S. bank-reported liabilities3
30 U.S. nonbank-reported liabilities
31
Foreign private purchases of U.S. Treasury securities, net
32 Foreign purchases of other U.S. securities, net
33 Foreign direct investments in United States, net
34 Allocation of special drawing rights
33 Discrepancy
36
Due to seasonal adjustment
37
Before seasonal adjustment
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)

1993

-99,936 r
-132,609
456,832
-589,441
2,757r
59,69 l r
9,742
-16,823
-4,081
-16,736

1994

-148,405
-166,121
502,463
-668,584
3,270r
59,779
-4,159 r
-15,816
-4,544
-19,506

-148,154 r
-173,424
575,940
-749,364
3,477r
64,776r
-8,016 r
-10,959
-3,420
-20,696

Q3

Q4

Ql

Q2

Q3P

-37,688
-42,548
144,984
-187,532
1,120
17,093
-4,361
-2,933
-964
-5,095

-30,435
-38,026
149,422
-187,448
978
17,657
-1,890
-2,799
-731
-5,624

-34,869
-42,730
150,028
-192,758
490r
18,014
262
-4,259
-960
-5,685

-40,210
-46,996
153,095
-200,091
726
17,694
-2,264
-2,364
-1,029
-5,976

-47,961
-51,593
149,937
-201,530
710
17,049
-4,705
-2,502
-1,034
-5,886

-342

-341

-280

252

-199

-152

-353

72

-1,379
0
-537
-44
-797

5,346
0
-441
494
5,293

-9,742
0
-808
-2,466
-6,468

-1,893
0
362
-991
-1,264

191
0
-147
-163
501

17
0
-199
-849
1,065

-523
0
-133
-220
-170

7,489
0
848
-183
6,824

-192,889 r
29,947
1,581
-146,253
—78,164r

-155,700 r
-8,161
-32,804
-60,270
-54,465 r

-297,834
-69,146
-34,219
-98,960
-95,509

-37,954
8,476
7,500
-35,839
-18,091

-98,206
-7,272
-14,278
-32,539
-44,117

-68,615
1,714
-12,707
-34,420
-23,202

-49,850
-74
-3,374
-20,200
-26,202

-62,237
-32,482

72,153
48,952
4,062
1,713
14,841
2,585

40,253
30,745
6,077
2,344
3,560
-2,473

109,757
68,813
3,734
1,082
32,862
3,266

39,186
20,489
518
-71
18,478
-228

11,369
12,984
764
1,249
-3,908
280

52,021
55,600
52
-156
-3,264
-211

13,566
-3,384
1,258
220
14,187
1,285

23,642
25,335
1,217
755
-2,080
-1,585

178,843
20,859
10,489
24,381
80,092
43,022

245,123
111,842
-7,710
34,225
57,006
49,760

314,705
25,283
34,578
99,340
95,268
60,236

79,630
-21,542
6,945
37,269
31,971
24,987

87,860
32,765
11,272
1,734
27,321
14,768

47,450
-35,571
6,506
11,832
35,993
28,690

86,983
1,925
7,296
31,212
29,122
17,428

100,357
265

0
43,550

0
13,724

0
31,548

43,550

13,724

31,548

0
-41,533
-7,407
-34,126

0
29,420
1,153
28,267

0
4,148
6,279
-2,131

0
-9,613
-801
-8,812

0
-21,362
-8,699
-12,663

-21,314
-8,441

41,982
32,961
25,149

-1,379

5,346

-9,742

-1,893

191

17

-523

7,489

70,440

37,909

108,675

39,257

10,120

52,177

13,346

22,887

-3,717

-1,529

3,959

6,147

-1,435

-992

5,555

5,347

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 institutions as well as some brokers and
dealers.




1996

1995

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.

Summary Statistics
3.11

A51

U.S. FOREIGN TRADE 1
Millions of dollars; monthly data seasonally adjusted
1996
Item

1993

1994

1995
Apr.r

Mayr

June r

Julyr

Aug/

Sept.

Oct.p

1 Goods and services, balance
2
Merchandise
3
Services

-72,037
-132,607
60,570

-104,381
-166,123
61,742

-105,064
-173,424
68,360

-9,528
-15,584
6,056

-10,677
-16,791
6,114

-8,370
-14,620
6,250

-11,755
-17,492
5,737

-10,493
-16,423
5,930

-11,437
-17,524
6,087

-7,986
-14,089
6,103

4 Goods and services, exports
5
Merchandise
Services
6

642,953
456,834
186,119

698,301
502,462
195,839

786,529
575,939
210,590

69,154
50,741
18,413

70,120
51,384
18,736

69,726
50,972
18,754

67,249
48,779
18,470

69,679
51,095
18,584

68,839
50,297
18,542

71,735
52,893
18,842

7 Goods and services, imports
8
Merchandise
9
Services

-714,990
-589,441
-125,549

-802,682
-668,585
-134,097

-891,593
-749,363
-142,230

-78,682
-66,325
-12,357

-80,797
-68,175
-12,622

-78,096
-65,592
-12,504

-79,004
-66,271
-12,733

-80,172
-67,518
-12,654

-80,276
-67,821
-12,455

-79,721
-66,982
-12,739

1. Data show monthly values consistent with quarterly figures in the U.S. balance of
payments accounts.

3.12

SOURCE. FT900, U.S. Department of Commerce, Bureau of the Census and Bureau of
Economic Analysis.

U.S. RESERVE ASSETS
Millions of dollars, end of period
1996
Asset

1 Total
2 Gold stock, including Exchange
Stabilization Fund1
3 Special drawing rights2,3
4 Reserve position in International Monetary
Fund2
5 Foreign currencies4

1993

1994

1995
Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.p

73,442

74,335

85,832

83,710

83,468

83,455

85,099

76,781

75,509

75,558

75,444

11,053
9,039

11,051
10,039

11,050
11,037

11,052
10,963

11,051
11,037

11,050
11,046

11,050
11,216

11,050
10,307

11,050
10,177

11,049
10,226

11,049
10,386

11,818
41,532

12,030
41,215

14,649
49,096

15,117
46,578

15,227
46,153

15,282
46,077

15,665
47,168

15,597
39,827

15,421
38,861

15,517
38,765

1,516
38,493

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.

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.

3.13

FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS 1
Millions of dollars, end of period
1996
Asset

1993

1994

1995
Apr.

1 Deposits
Held in custody
2 U.S. Treasury securities2
3 Earmarked gold3

June

July

Aug.

Sept.

Oct.

Nov.p

386

250

386

166

160

182

166

171

265

176

170

379,394
12,327

441,866
12,033

522,170
11,702

573,924
11,445

578,608
11,339

572,839
11,296

580,277
11,273

590,367
11,217

609,801
11,210

619,987
11,204

634,165
11,198

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, in each case measured at face (not market) value.




May

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.

A52
3.15

International Statistics • February 1997
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1996
Item

1 Total1
2
3
4
5
6
7
8
9
10
11
12

By type
Liabilities reported by banks in the United States
U.S. Treasury bills and certificates3
U.S. Treasury bonds and notes
Marketable
Nonmarketable4
U.S. securities other than U.S. Treasury securities5
By area
Europe1
Canada
Latin America and Caribbean
Asia
Africa
Other countries

1994

1995
May

June

July

Aug.

Sept.

Oct.p

520,934

630,867

687,239

689,733

696,373

699,496

703,876

719,561

722,708

73,386
139,571

107,343
168,534

111,032
186,638

104,941
188,321

118,247
187,171

113,416
186,061

111,035
189,726

116,332
182,122

109,942
186,180

254,059
6,109
47,809

293,691
6,491
54,808

327,988
6,238
55,343

334,470
5,903
56,098

327,822
5,941
57,192

337,451
5,980
56,588

341,038
6,018
56,059

358,226
6,057
56,824

363,063
5,890
57,633

215,374
17,235
41,492
236,824
4,180
5,827

222,406
19,473
66,720
310,966
6,296
5,004

241,089
20,878
71,381
341,148
7,388
5,353

244,222
21,670
68,043
343,206
7,173
5,417

245,368
21,250
70,142
346,103
6,997
6,511

245,406
20,153
67,990
350,747
6,910
8,288

246,761
21,662
69,076
354,266
6,722
5,387

246,343
21,351
69,338
369,474
6,944
6,109

246,543
21,764
70,477
371,218
6,587
6,117

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 and Treasury bills issued to official
institutions of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes current value of
zero-coupon Treasury bond issues to foreign governments as follows: Mexico, beginning
March 1988, 20-year maturity issue and beginning March 1990, 30-year maturity issue;

3.16

Apr.

LIABILITIES TO, AND CLAIMS ON, FOREIGNERS
Payable in Foreign Currencies

Venezuela, beginning December 1990, 30-year maturity issue; Argentina, beginning April
1993, 30-year maturity issue.
5. Debt securities of U.S. government corporations and federally sponsored agencies, and
U.S. corporate stocks and bonds.
SOURCE. Based on U.S. Department of the Treasury data and on data reported to the
department by banks (including Federal Reserve Banks) and securities dealers in the United
States, and on the 1989 benchmark survey of foreign portfolio investment in the United
States.

Reported by Banks in the United States1

Millions of dollars, end of period
1995
Item

1 Banks' liabilities
2 Banks' claims
3
Deposits
4
Other claims
5 Claims of banks' domestic customers2

1992

72,796
62,799
24,240
38,559
4,432

1. Data on claims exclude foreign currencies held by U.S. monetary authorities.




1993

78,259
62,017
20,993
41,024
12,854

1996

1994

89,308
60,711
19,661
41,050
10,878

Dec.

Mar.

June

Sept.

109,647
74,015
22,696
51,319
6,145

107,514
69,159
22,208
46,951
6,353

111,651
65,864
20,876
44,988
7,464

111,112
68,129
23,865
44,264
7,130

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.

Bank-Reported
3.17

LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
Millions of dollars, end of period

Data

A53

Reported by Banks in the United States1

1996
Item

1993

1994

1995
Apr.

May

June

July

Aug.

Sept.

Oct.''

BY HOLDER AND TYPE OF LIABILITY

1 Total, all foreigners

926,672

1,015,076

1,099,790

1,100,589

1,096,031

1,097,866

1,088,880

l,076,137 r

1,091,268

1,118,829

2 Banks' own liabilities
3
Demand deposits
4
Time deposits2
Other3
6
Own foreign offices4

626,919
21,569
175,106
111,971
318,273

718,671
23,386
186,512
113,215
395,558

753,652
24,448
192,702
139,965
396,537

735,749
23,962
191,999
146,589
373,199

723,534
23,325
181,016
144,051
375,142

731,335
27,364
189,699
149,070
365,202

720,280
24,989
193,413
144,504
357,374

703,807r
23,147r
196,722r
128,989r
354,949'

724,182
25,505
192,466
148,503
357,708

753,053
23,866
197,092
146,331
385,764

299,753
176,739

296,405
162,938

346,138
197,355

364,840
217,106

372,497
220,823

366,531
218,608

368,600
217,548

372,330r
219,949

367,086
212,478

365,776
214,609

36,289
86,725

42,539
90,928

52,250
96,533

44,823
102,911

49,655
102,019

51,463
96,460

56,345
94,707

55,552
96,829'

57,702
96,906

53,149
98,018

10,936
5,639
15
2,780
2,844

8,606
8,176
29
3,298
4,849

11,039
10,347
21
4,656
5,670

11,311
10,485
28
4,024
6,433

11,994
11,207
34
3,442
7,731

12,158
10,914
123
4,052
6,739

11,742
10,545
22
3,747
6,776

12,675
12,084
49
4,738
7,297

14,443
13,843
26
5,441
8,376

16,109
15,278
66
5,935
9,277

5,297
4,275

430
281

692
350

826
426

787
376

1,244
874

1,197
865

591
345

600
399

831
600

1,022
0

149
0

341
1

400
0

390
21

370
0

330
2

246
0

201
0

231
0

220,821
64,144
1,600
21,653
40,891

212,957
59,935
1,564
23,511
34,860

275,877
83,396
2,098
30,716
50,582

297,670
91,617
1,679
36,652
53,286

293,262
81,909
1,504
32,671
47,734

305,418
91,914
2,211
38,929
50,774

299,477
83,783
2,211
36,841
44,731

300,761
81,463
1,459
37,737'
42,267'

298,454
85,973
2,049
34,921
49,003

296,122
83,651
1,316
35,569
46,766

156,677
151,100

153,022
139,571

192,481
168,534

206,053
186,638

211,353
188,321

213,504
187,171

215,694
186,061

219,298
189,726

212,481
182,122

212,471
186,180

5,482
95

13,245
206

23,603
344

19,065
350

22,661
371

25,835
498

29,262
371

29,281
291

30,051
308

25,085
1,206

592,171
478,755
160,482
9,718
105,262
45,502
318,273

678,612
563,697
168,139
10,633
111,171
46,335
395,558

691,661
568,083
171,546
11,758
103,623
56,165
396,537

665,516
537,453
164,254
11,468
96,238
56,548
373,199

662,376
533,059
157,917
10,663
89,120
58,134
375,142

654,325
530,625
165,423
12,380
90,717
62,326
365,202

646,706
525,543
168,169
11,809
95,353
61,007
357,374

636,859'
512,126'
157,177'
11,116'
95,004
51,057
354,949'

650,808
526,023
168,315
12,764
91,893
63,658
357,708

678,268
553,852
168,088
11,156
96,153
60,779
385,764

113,416
10,712

114,915
11,264

123,578
15,872

128,063
16,801

129,317
17,584

123,700
18,241

121,163
18,091

124,733'
18,670

124,785
18,556

124,416
16,865

17,020
85,684

14,506
89,145

13,035
94,671

10,814
100,448

11,775
99,958

11,021
94,438

10,359
92,713

10,864
95,199'

11,298
94,931

12,455
95,096

102,744
78,381
10,236
45,411
22,734

114,901
86,863
11,160
48,532
27,171

121,213
91,826
10,571
53,707
27,548

126,092
96,194
10,787
55,085
30,322

128,399
97,359
11,124
55,783
30,452

125,965
97,882
12,650
56,001
29,231

130,955
100,409
10,947
57,472
31,990

125,842'
98,134'
10,523'
59,243'
28,368

127,563
98,343
10,666
60,211
27,466

128,330
100,272
11,328
59,435
29,509

24,363
10,652

28,038
11,822

29,387
12,599

29,898
13,241

31,040
14,542

28,083
12,322

30,546
12,531

27,708
11,208

29,220
11,401

28,058
10,964

12,765
946

14,639
1,577

15,271
1,517

14,544
2,113

14,829
1,669

14,237
1,524

16,394
1,621

15,161
1,339

16,152
1,667

15,378
1,716

17,567

17,895

9,103

8,306

9,284

9,580

7,922

8,276

10,466

10,761

7 Banks' custodial liabilities5
8
U.S. Treasury bills and certificates6
9
Other negotiable and readily transferable
instruments7
10
Other
8

11 Nonmonetary international and regional organizations ...
12
Banks' own liabilities
13
Demand deposits
14
Time deposits2
Other 3
15
16
17
18
19

Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
9

20 Official institutions
Banks' own liabilities
21
22
Demand deposits
23
Time deposits2
24
Other3
25
26
27
28

Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
10

29 Banks
30
Banks' own liabilities
Unaffiliated foreign banks
31
32
Demand deposits
33
Time deposits2
34
Other 3
Own foreign offices4
35
36
37
38
39

Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other

40 Other foreigners
Banks' own liabilities
41
42
Demand deposits
43
Time deposits2
44
Other3
45
46
47
48

Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
MEMO

49 Negotiable time certificates of deposit in custody for
foreigners

1. Reporting banks include all types of depository institutions as well as some brokers and
dealers. Excludes bonds and notes of maturities longer than one year.
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 quarterly Consolidated Reports of Condition filed with bank regulatory
agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists
principally of amounts owed to the head office or parent foreign bank, and to foreign
branches, agencies, or wholly owned subsidiaries of the 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 for foreign customers.




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 InterAmerican 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."

A54
3.17

International Statistics • February 1997
LIABILITIES TO FOREIGNERS Reported by Banks in the United States'—Continued
1996
Apr.

May

July

Aug.

Sept.

Oct.p

AREA

50 Total, all foreigners

926,672

1,015,076

1,099,790

1,100,589

1,096,031

1,097,866

1,088,880

1,076,137 R

L,091,268 R

1,118,829

51 Foreign countries

915,736

1,006,470

1,088,751

1,089,278

1,084,037

1,085,708

1,077,138

L,063,462 R

L,076,825 R

1,102,720

52 Europe
53
Austria
54
Belgium and Luxembourg
55
Denmark
56
Finland
57
France
58
Germany
59
Greece
60
Italy
61
Netherlands
62
Norway
63
Portugal
64
Russia
65
Spain
66
Sweden
67
Switzerland
68
Turkey
69
United Kingdom
70
Yugoslavia"
71
Other Europe and other former U.S.S.R.12

377,911
1,917
28,670
4,517
1,872
40,316
26,685
1,519
11,759
16,096
2,966
3,366
2,511
20,496
2,738
41,560
3,227
133,993
372
33,331

390,949
3,588
21,877
2,884
1,436
44,365
27,109
1,400
10,885
16,033
2,338
2,846
2,726
14,675
3,094
40,724
3,341
163,813
245
27,770

362,958
3,537
24,842
2,921
2,831
39,218
24,035
2,014
10,868
13,745
1,394
2,761
7,948
10,011
3,246
43,625
4,124
139,272
177
26,389

375,522
3,477
27,572
2,787
2,203
41,300
24,854
1,714
10,172
12,394
915
2,529
8,796
19,547
3,943
36,803
4,453
146,627
145
25,291

367,739
3,624
25,955
2,645
2,188
39,636
23,950
1,665
11,039
12,575
828
1,858
7,259
19,004
2,410
37,097
4,669
146,335
146
24,856

363,744
3,209
20,856
2,796
1,589
40,585
25,876
1,690
12,103
12,159
1,388
1,401
6,938
20,314
2,693
39,006
4,926
143,780
217
22,218

356,714
3,002
22,093
2,871
1,200
36,344
24,375
1,811
12,785
11,863
1,435
1,784
6,047
19,366
2,738
39,626
5,619
138,486
208
25,061

356,226r
4,683
25,155
2,501
1,113
37,365r
23,128
1,722
12,552
11,460
1,556
1,328
4,988
17,505
1,592
39,073
7,272
137,086
207
25,940

351,205r
6,017
22,482r
2,652
812
37,102r
23,599
l,854 r
12,509
9,626
1,622
1,473
4,76 l r
20,359
1,815
42,225
7,992
133,305r
214
20,786r

370,791
6,796
23,124
1,802
1,509
41,059
23,510
1,678
12,793
11,913
1,552
1,388
5,602
17,665
1,424
32,541
8,019
157,764
216
20,436

20,235

24,768

30,468

31,283

33,176

33,391

28,811

30,727r

33,199

35,153

362,238
14,477
73,820
8,117
5,301
193,699
3,183
3,171
33
880
1,207
410
28,019
4,686
3,582
929
1,611
12,786
6,327

423,847
17,203
104,014
8,424
9,145
229,599
3,127
4,615
13
875
1,121
529
12,227
5,217
4,551
900
1,597
13,986
6,704

440,212
12,235
94,991
4,897
23,797
239,083
2,826
3,659
8
1,314
1,275
481
24,560
4,672
4,265
974
1,836
11,808
7,531

430,878
14,116
85,749
4,262
20,222
239,169
2,883
3,726
13
1,264
1,085
516
23,328
5,272
3,887
1,081
1,748
14,242
8,315

433,023
11,649
86,278
4,998
20,105
243,260
2,868
3,393
8
1,283
1,073
550
23,212
4,722
3,846
1,064
1,757
14,645
8,312

432,709
13,579
85,227
4,312
25,902
234,391
2,921
3,642
10
1,301
1,073
534
24,775
5,162
3,878
1,013
1,769
14,899
8,321

437,682
12,501
93,324
4,205
23,183
233,128
2,833
3,329
10
1,405
1,092
562
26,314
5,531
3,852
1,029
1,836
15,261
8,287

424,128r
13,320
87,994r
4,150
24,518
227,03 l r
2,462
3,263
14
1,433
1,176
625
24,401
3,614
3,994
1,077
1,799
15,029
8,228r

433,524r
11,989
86,625r
4,880
23,817r
233,782r
3,205
2,889
33
1,449
1,181
623
26,811
5,289r
3,950
936
1,751
15,596
8,718r

443,731
11,490
101,007
4,910
24,283
229,072
2,767
2,968
17
1,383
1,207
580
27,682
5,077
4,060
1,016
1,846
16,375
7,991

144,527

154,346

240,698

237,708

235,910

239,289

236,781

238,567r

243,697r

239,224

4,011
10,627
17,132
1,114
1,986
4,435
61,466
4,913
2,035
6.137
15,822
14,849

10,066
9,844
17,104
2,338
1,587
5,157
62,981
5,124
2,714
6,466
15,494
15,471

33,750
11,714
20,303
3,373
2,708
4,041
109,193
5,749
3,089
12,279
15,582
18,917

25,861
14,953
18,378
3,752
2,627
5,420
111,635
5,900
2,467
12,905
14,895
18,915

24,857
14,598
18,606
3,938
2,374
5,090
111,500
5,703
2,897
13,387
14,234
18,726

25,483
16,621
18,227
4,012
2,316
5,168
113,800
6,674
2,970
12,253
13,379
18,386

28,587
16,100
17,775
3,954
2,561
4,444
112,783
5,620
3,041
11,713
12,947
17,256

34,224
14,768r
19,454r
4,012
2,161
4,364
109,312r
5,406r
2,539
10,691
13,891
17,745

32,068
15,715r
17,938r
3,793
2,204
4,134
112,579r
5,908r
3,429
11,759
14,715
19,455

26,999
15,441
17,063
3,709
2,436
7,162
112,624
5,545
3,191
11,972
12,802
20,280

105 Africa
106
Egypt
Morocco
107
108
South Africa
109
Zaire
110
Oil-exporting countries14
111
Other

6,633
2,208
99
451
12
1,303
2,560

6,524
1,879
97
433
9
1,343
2,763

7,641
2,136
104
739
10
1,797
2,855

7,832
2,002
114
1,001
8
1,904
2,803

7,404
1,873
113
745
16
1,887
2,770

7,509
1,831
115
666
6
2,013
2,878

7,558
2,114
133
648
13
1,928
2,722

7,259
1,920
121
632
6
2,075
2,505

7,440r
1,894
78
482
6
2,051
2,929'

7,058
1,904
74
435
11
1,940
2,694

112 Other
113
Australia
114
Other

4,192
3,308
884

6,036
5,142
894

6,774
5,647
1,127

6,055
4,895
1,160

6,785
5,757
1,028

9,066
7,981
1,085

9,592
8,387
1,205

6,555
5,516
1,039

7,760r
5,522
2,238r

6,763
4,786
1,977

10,936
6,851
3,218
867

8,606
7,537
613
456

11,039
9,300
893
846

11,311
9,967
482
862

11,994
10,572
649
773

12,158
10,824
527
807

11,742
10,303
831
608

12,675
10,988
1,024
663

14,443r
12,761r
1,193
489r

16,109
14,331
1,304
474

72 Canada
73 Latin America and Caribbean
74
Argentina
75
Bahamas
76
Bermuda
77
Brazil
78
British West Indies
79
Chile
80
Colombia
81
Cuba
82
Ecuador
83
Guatemala
84
Jamaica
85
Mexico
86
Netherlands Antilles
87
Panama
88
Peru
89
Uruguay
90
Venezuela
91
Other
92 Asia
China
93
Mainland
94
Taiwan
95
Hong Kong
96
India
97
Indonesia
98
Israel
99
Japan
100
Korea (South)
101
Philippines
102
Thailand
103
Middle Eastern oil-exporting countries13
104
Other

115 Nonmonetary international and regional organizations.. .
116
International15
117
Latin American regional16
118
Other regional17

11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia.
12. Includes the Bank for International Settlements. Since December 1992, has
included all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia.
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 Europe."

Bank-Reported
3.18

Data

A55

BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1
Payable in U.S. Dollars
Millions of dollars, end of period
1996
Area or country

1993

1994

1995
Apr.

May

June

July

Aug.

Sept.

Oct.P

1 Total, all foreigners

488,497

483,270

532,751

527,801

519,789

536,239

545,132

547,054r

545,003

563,271

2 Foreign countries

486,092

478,679

530,820

525,085

516,295

533,210

543,018

545,022r

543,297

560,206

123,741
412
6,532
382
594
11,822
7,724
691
8,834
3,063
396
834
2,310
3,717
4,254
6,605
1,301
62,013
473
1,784

123,408
692
6,738
1,129
512
12,146
7,608
604
6,043
2,959
504
938
973
3,530
4,098
5,746
878
66,874
265
1,171

132,150
565
7,624
403
1,055
15,033
9,263
469
5,370
5,346
665
888
660
2,166
2,080
7,474
803
67,784
147
4,355

135,493
1,213
8,688
543
1,305
11,604
8,647
622
5,702
6,346
793
889
741
5,092
3,534
6,370
973
68,999
208
3,224

134,459
1,212
8,711
482
1,282
11,954
8,099
554
6,172
5,618
933
813
482
3,158
2,526
8,713
873
69,557
204
3,116

146,180
1,088
6,921
432
1,013
11,768
11,831
563
5,721
6,546
1,243
704
440
2,519
2,799
12,145
933
75,813
164
3,537

143,640
1,128
7,021
319
1,629
10,571
9,497
527
6,023
6,360
1,397
667
514
3,340
2,802
9,520
912
78,098
159
3,156

150,30 r
849r
7,018
230
1,296
1 l,571 r
7,559
433
6,625r
6,565
1,342
548
794
3,073r
2,726'
9,266 r
l,044 r
85,601r
87
3,674r

155,676
988
6,903
408
1,350
12,079
8,670
397
5,870
6,956
1,199
484
1,135
4,152
2,976
10,930
1,083
86,127
87
3,882

165,604
1,197
6,828
480
1,068
12,792
8,546
426
5,003
7,390
1,617
517
1,413
3,885
2,919
16,110
962
89,931
118
4,402

3 Europe
4
Austria
Belgium and Luxembourg
5
Denmark
6
Finland
7
France
8
Germany
9
10
Greece
Italy
11
Netherlands
12
Norway
13
14
Portugal
Russia
15
Spain
16
Sweden
17
Switzerland
18
19
Turkey
United Kingdom
20
Yugoslavia2
21
Other Europe and other former U.S.S.R.3
22
23 Canada

18,617

18,490

20,874

22,061

20,885

22,246

23,985

25,136

25,335

23,051

24 Latin America and Caribbean
Argentina
25
Bahamas
26
27
Bermuda
Brazil
28
British West Indies
29
Chile
30
Colombia
31
Cuba
32
Ecuador
33
Guatemala
34
Jamaica
35
Mexico
36
Netherlands Antilles
37
Panama
38
Peru
39
Uruguay
40
41
Venezuela
Other
42

225,238
4,474
63,353
8,901
11,848
99,319
3,643
3,181
0
681
288
195
15,879
2,683
2,894
657
969
2,910
3,363

223,523
5,844
66,410
8,481
9,583
95,741
3,820
4,004
0
682
366
258
17,749
1,396
2,198
997
503
1,831
3,660

256,992
6,439
58,818
5,741
13,297
123,924
5,024
4,550
0
825
457
323
18,028
9,229
3,008
1,829
466
1,661
3,373

246,364
6,187
55,497
5,031
14,164
118,609
4,587
4,512
0
951
473
335
17,066
8,728
2,488
2,018
578
1,377
3,763

238,235
6,037
56,383
2,993
14,186
110,780
4,350
4,511
0
936
461
345
16,877
8,674
2,592
2,112
602
1,279
5,117

239,874
6,448
60,608
3,620
15,076
102,669
4,388
4,538
0
962
452
359
16,820
12,888
2,567
2,395
623
1,390
4,071

253,372
6,598
59,627
3,590
15,197
100,886
4,321
4,512
0
897
463
346
16,975
29,224
2,216
2,568
589
1,402
3,961

249,697r
7,062
62,297r
3,052
15,155
99,363r
4,174 r
4,725 r
0
932
476
335
17,544r
23,713
2,21 r
2,463
562r
1,728
3,905

240,454
7,077
61,825
3,640
15,222
102,182
4,388
4,723
0
965
507
339
17,701
11,207
2,143
2,541
530
1,513
3,951

243,448
7,042
61,748
4,398
15,417
106,104
4,278
4,811
0
957
546
362
17,742
9,406
2,271
2,563
547
1,636
3,620

43

111,775

107,079

115,569

115,037

116,490

118,374

115,425

113,950r

113,606

120,119

2,271
2,625
10,828
589
1,527
826
60,032
7,539
1,410
2,170
15,115
6,843

836
1,448
9,161
994
1,470
688
59,151
10,286
662
2,902
13,748
5,733

1,023
1,713
12,915
1,846
1,696
739
61,461
14,089
1,350
2,612
9,639
6,486

3,405
1,626
15,339
1,787
1,539
642
54,627
17,250
779
2,970
7,252
7,821

2,857
1,514
14,745
1,786
1,563
615
54,613
18,424
838
3,015
8,976
7,544

2,141
1,490
15,997
1,794
1,562
620
54,005
19,261
1,298
3,194
8,348
8,664

1,344
1,301
13,822
1,785
1,744
658
53,454
18,644
1,274
2,824
9,480
9,095

2,033
l,023 r
12,466'
2,118
l,572 r
667
54,584r
17,667
l,216 r
2,864r
9,489
8,251

1,700
1,696
13,886
1,975
1,653
576
52,308
17,516
1,267
2,705
10,111
8,213

1,420
1,305
12,975
2,190
1,577
1,017
59,343
17,032
1,347
2,699
11,372
7,842

56 Africa
57
Egypt
Morocco
58
South Africa
59
Zaire
60
Oil-exporting countries5
61
Other
62

3,861
196
481
633
4
1,129
1,418

3,050
225
429
671
2
856
867

2,768
210
514
465
1
552
1,026

2,767
225
594
493
1
501
953

2,715
217
628
468
1
478
923

2,741
198
639
515
1
474
914

2,605
216
602
441
1
470
875

2,735
221
577
512
11
462
952

2,757
241
565
572
1
429
949

2,638
204
543
614
1
414
862

63 Other
64
Australia
Other
65

2,860
2,037
823

3,129
2,186
943

2,467
1,622
845

3,363
2,620
743

3,511
2,333
1,178

3,795
2,513
1,282

3,991
3,172
819

3,203r
2,593r
610

5,469
3,784
1,685

5,346
3,798
1,548

66 Nonmonetary international and regional organizations6 . . .

2,405

4,591

1,931

2,716

3,494

3,029

2,114

2,032

1,706

3,065

44
45
46
47
48
49
50
51
52
53
54
55

China
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea (South)
Philippines
Thailand
Middle Eastern oil-exporting countries4
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. Since December 1992, has included all
parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia.




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 Europe."

A56
3.19

International Statistics • February 1997
BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS
Payable in U.S. Dollars

Reported by Banks in the United States1

Millions of dollars, end of period
1996
Type of claim

1995

1993

Apr.

May

527,801
26,254
299,438
101,183
37,662
63,521
100,926

519,789
22,208
301,887
98,364
35,588
62,776
97,330

June

July

Aug.

545,132
20,238
298,847
108,753
36,145
72,608
117,294

547,054r
18,882
300,210r
11 l,834 r
39,338
72,496r
116,128r

Sept.

1 Total

575,818

599,549

655,518

2 Banks' claims
3
Foreign public borrowers
4
Own foreign offices2
5
Unaffiliated foreign banks
6
Deposits
7
Other
8
All other foreigners

488,497
29,228
285,510
100,865
49,892
50,973
72,894

483,270
23,416
283,183
109,228
59,250
49,978
67,443

532,751
22,522
307,509
101,410
37,658
63,752
101,310

87,321
41,734

116,279
64,829

122,767
58,519

125,077
71,441

143,593
80,695

31,186

36,008

44,161

37,331

46,491

14,401

15,442

20,087

16,305

16,407

7,920

8,427

8,410

9,335

9,393

29,150

32,796

30,717

9 Claims of banks' domestic customers3
10
Deposits
11
Negotiable and readily transferable
instruments4
12
Outstanding collections and other
claims

661,316
536,239
22,950
307,792
105,348
33,998
71,350
100,149

Oct.p

688,596
545,003
22,722
311,862
109,305
35,212
74,093
101,114

563,271
24,919
330,249
108,717
36,160
72,557
99,386

MEMO

13 Customer liability on acceptances
14 Dollar deposits in banks abroad, reported by
nonbanking business enterprises in the
United States5

32,384

1. For banks' claims, data are monthly; for claims of banks' domestic customers, data are
for quarter ending with month indicated.
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 quarterly Consolidated Reports of Condition filed with bank regulatory
agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists

3.20

34,258

31,136

32,270

33,262

33,527

39,578

principally of amounts due from the head office or parent foreign bank, and from foreign
branches, agencies, or wholly owned subsidiaries of the 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, bankers acceptances, and commercial
paper.
5. Includes demand and time deposits and negotiable and nonnegotiable certificates of
deposit denominated in U.S. dollars issued by banks abroad.

BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS
Payable in U.S. Dollars

Reported by Banks in the United States1

Millions of dollars, end of period
1995
Maturity, by borrower and area2

1 Total
2
3
4
5
6
7

8
9
10
11
12
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 other3
Maturity of more than one year
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other3

1992

1993

Dec.

Mar.

June

Sept.p

195,119

202,566

200,070

225,141

233,558

228,494

231,334

163,325
17,813
145,512
31,794
13,266
18,528

172,662
17,828
154,834
29,904
10,874
19,030

168,359
15,435
152,924
31,711
7,838
23,873

178,785
15,015
163,770
46,356
7,506
38,850

193,742
19,567
174,175
39,816
8,104
31,712

185,976
14,847
171,129
42,518
8,130
34,388

187,375
15,526
171,849
43,959
6,922
37,037

53,300
6,091
50,376
45,709
1,784
6,065

57,413
7,727
60,490
41,418
1,820
3,794

55,770
6,690
58,877
39,851
1,376
5,795

55,622
6,771
72,396
40,312
1,295
2,389

57,988
5,473
84,240
40,317
1,326
4,398

57,157
6,810
78,490
38,282
1,279
3,958

57,093
8,803
79,707
37,177
1,320
3,275

5,367
3,287
15,312
5,038
2,380
410

5,310
2,581
14,025
5,606
1,935
447

4,203
3,505
15,717
5,318
1,583
1,385

4,995
2,731
27,845
8,052
1,447
1,286

6,833
2,563
19,525
8,490
1,474
931

8,191
3,689
19,519
9,088
1,435
596

7,137
3,533
21,218
9,940
1,349
782

1. Reporting banks include all types of depository institutions as well as some brokers and
dealers.




1996

1994

2. Maturity is time remaining until maturity.
3. Includes nonmonetary international and regional organizations.

Bank-Reported
3.21

CLAIMS ON FOREIGN COUNTRIES

Data

A57

Held by U.S. and Foreign Offices of U.S. Banks1

Billions of dollars, end of period
1994
Area or country

1 Total

1992

1995

1996

iy93
Sept.

Dec.

Mar.

June

Sept.

Dec.

Mar.

June

Sept.p

344.7

407.7

486.4

497.4

543.1

528.8

531.3

551.9

573.6

607.8

610.1

131.3
.0
15.3
9.1
6.5
.0
2.3
4.8
59.7
6.3
18.8

161.8
7.4
12.0
12.6
7.7
4.7
2.7
5.9
84.3
6.9
17.6

182.6
9.6
20.7
24.0
11.6
3.4
2.6
5.5
78.4
10.2
16.5

190.6
7.0
19.1
24.7
11.8
3.6
2.7
5.1
85.8
10.0
20.7

211.5
10.2
19.9
31.2
10.6
3.5
3.1
5.7
90.1
10.8
26.2

204.4
9.4
19.9
30.0
10.7
4.3
3.1
6.2
87.1
11.3
22.7

200.0
10.7
18.0
27.5
12.6
4.4
2.9
6.6
80.3
13.0
24.0

206.0
13.6
19.4
27.3
11.5
3.7
2.7
6.7
82.4
10.3
28.5

202.6
11.0
17.9
31.5
13.2
3.0
3.3
5.2
84.8
9.7
22.9

222.3
7.9
18.0
31.4
14.9
4.7
2.7
6.3
101.6
11.1
23.8

235.2
11.8
17.6
36.0
16.4
6.3
3.0
6.3
101.4
13.7
22.8

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

24.0
1.2
.9
.7
3.0
1.2
.4
8.9
1.3
1.7
1.7
2.9

25.6
.4
1.0
.4
3.2
1.7
.8
9.9
2.1
2.6
1.1
2.3

42.6
1.0
1.0
.8
4.3
1.6
1.0
14.0
1.8
1.0
1.2
15.0

45.2
1.1
1.3
.9
4.5
2.0
1.2
13.6
1.6
2.7
1.0
15.4

44.1
.9
1.7
1.1
4.9
2.4
1.0
14.1
1.4
2.5
1.5
12.6

43.3
.7
1.1
.5
5.0
1.8
1.2
13.3
1.4
2.6
1.4
14.3

50.2
1.2
1.8
.7
5.1
2.3
1.9
13.3
2.0
3.0
1.3
17.4

50.2
.9
2.6
.8
5.7
3.2
1.3
11.6
1.9
4.7
1.2
16.4

61.3
1.3
3.4
.7
5.6
2.1
1.6
17.5
2.0
3.8
1.7
21.7

55.5
1.2
3.3
.6
5.6
2.3
1.6
13.6
2.2
3.4
2.0
19.7

63.7
1.0
1.8
.6
6.1
3.0
1.4
17.3
2.8
4.8
1.9
22.9

25 OPEC 2
26
Ecuador
27
Venezuela
28
Indonesia
29
Middle East countries
30
African countries

15.8
.6
5.2
2.7
6.2
1.1

17.4
.5
5.1
3.3
7.4
1.2

21.7
.4
3.9
3.3
13.0
1.1

23.9
.5
3.7
3.8
15.0
.9

19.5
.5
3.5
4.0
10.7
.7

20.3
.7
3.5
4.1
11.4
.6

22.4
.7
3.0
4.4
13.6
.6

22.1
.7
2.7
4.8
13.3
.6

21.2
.8
2.9
4.7
12.3
.6

20.1
.9
2.3
4.9
11.5
.5

19.4
1.0
2.3
5.5
10.1
.4

31 Non-OPEC developing countries

2 G-10 countries and Switzerland
3
Belgium and Luxembourg
4
France
5
Germany
6
Italy
7
Netherlands
8
Sweden
9
Switzerland
10
United Kingdom
11
Canada
12
Japan

72.6

83.1

93.2

96.0

98.5

103.6

104.0

112.6

118.1

126.1

125.6

32
33
34
35
36
37
38

Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other

6.6
10.8
4.4
1.8
16.0
.5
2.6

7.7
12.0
4.7
2.1
17.8
.4
3.1

10.5
9.3
5.5
2.4
19.8
.6
2.8

11.2
8.4
6.1
2.6
18.4
.5
2.7

11.4
9.2
6.4
2.6
17.9
.6
2.4

12.3
10.0
7.1
2.6
17.6
.8
2.6

10.9
13.6
6.4
2.9
16.3
.7
2.6

12.9
13.7
6.8
2.9
17.3
.8
2.8

12.7
18.3
6.4
2.9
16.1
.9
3.1

14.1
21.7
6.7
2.8
15.4
1.2
3.1

16.2
18.1
6.7
3.1
16.4
1.4
2.9

39
40
41
42
43
44
45
46
47

Asia
China
Mainland
Taiwan
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia

.7
5.2
3.2
.4
6.6
3.1
3.6
2.2
3.1

2.0
7.3
3.2
.5
6.7
4.4
3.1
3.1
3.1

1.0
6.9
3.9
.4
14.4
3.9
2.9
3.5
3.4

1.1
9.2
4.2
.4
16.2
3.1
3.3
2.1
4.7

1.1
8.5
3.8
.6
16.9
3.9
3.0
3.3
4.9

1.4
9.0
4.0
.7
18.7
4.1
3.6
3.8
3.5

1.7
9.0
4.4
.5
18.0
4.3
3.3
3.9
3.7

1.8
9.4
4.4
.5
19.1
4.4
4.1
4.9
4.5

3.3
9.7
4.7
.5
19.4
4.7
3.9
5.2
4.3

2.9
9.8
4.2
.6
21.8
5.0
4.7
5.4
4.7

2.6
10.3
ND
.5
21.8
5.1
5.4
4.7
4.1

48
49
50
51

Africa
Egypt
Morocco
Zaire
Other Africa 3

.2
.6
.0
1.0

.4
.7
.0
.8

.3
.7
.0
.9

.3
.6
.0
.8

.4
.6
.0
.7

.4
.9
.0
.6

.4
.9
.0
.8

.4
.7
.0
.9

.5
.7
.0
.8

.5
.8
.0
.8

.6
.7
.0
1.0

3.1
1.9
.6
.6

3.2
1.6
.6
.9

3.0
1.1
.5
1.5

2.7
.8
.5
1.4

2.3
.7
.4
1.2

1.8
.4
.3
1.0

3.4
.6
.4
2.3

4.2
1.0
.3
2.8

6.2
1.4
.3
4.5

5.0
1.0
.3
3.7

5.4
1.8
.3
3.3

56 Offshore banking centers
57
Bahamas
58
Bermuda
59
Cayman Islands and other British West Indies
60
Netherlands Antilles
61
Panama6
62
Lebanon
63
Hong Kong
64
Singapore
65
Other'

58.1
6.9
6.2
21.5
1.1
1.9

73.0
10.9
8.9
18.0
2.6
2.4

77.2
13.8
6.0
21.5
1.7
1.9

72.2
10.2
8.4
20.8
1.3
1.3

84.8
12.5
8.7
19.8
.9
1.1

82.7
8.4
8.4
24.2
2.4
1.3

86.9
12.6
6.1
24.3
5.5
1.3

99.2
11.0
6.3
32.2
9.9
1.4

101.5
13.9
5.3
28.7
10.7
1.6

106.0
17.3
4.1
26.0
13.0
1.7

106.1
14.8
4.0
32.1
11.5
1.7

13*9
6.5
.0

18/7
11.2
.1

20.3
11.8
.0

19^9
10.1
.1

22^5
19.2
.0

23 J
14.8
.0

23.1
13.3
.1

25^1
13.1
.1

25.1
15.4
.1

21.8
15.9
.1

26.4
15.4
.1

66 Miscellaneous and unallocated8

39.7

43.4

65.8

66.7

82.2

72.3

64.0

57.3

62.2

72.3

54.3

52 Eastern Europe
53
Russia4
54
Yugoslavia5
55
Other

1. The banking offices covered by these data include U.S. offices and foreign branches of
U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not covered
include U.S. agencies and branches of foreign banks. Beginning March 1994, the data include
large foreign subsidiaries of U.S. banks. The data also include other types of U.S. depository
institutions as well as some types of brokers and dealers. To eliminate 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.
These data are on a gross claims basis and do not necessarily reflect the ultimate country
risk or exposure of U.S. banks. More complete data on the country risk exposure of U.S. banks
are available in the quarterly Country Exposure Lending Survey published by the Federal
Financial Institutions Examination Council.




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. Beginning March 1994 includes Namibia.
4. As of December 1992, excludes other republics of the former Soviet Union.
5. As of December 1992, excludes Croatia, Bosnia and Hercegovinia, and Slovenia.
6. Includes Canal Zone.
7. Foreign branch claims only.
8. Includes New Zealand, Liberia, and international and regional organizations.

A58

International Statistics • February 1997

3.22

LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in
the United States
Millions of dollars, end of period
1995
Type of liability, and area or country

1992

1993

1996

1994
Mar.

June

Sept.

Dec.

Mar.

June

1 Total

45,511

50,597

54^09

50,187

49,973

47,673

46,448

49,907

48,990

2 Payable in dollars
3 Payable in foreign currencies

37,456
8,055

38,728
11,869

38,298
16,011

35,903
14,284

34,281
15,692

33,908
13,765

33,903
12,545

36,273
13,634

35,385
13,605

By type
4 Financial liabilities
Payable in dollars
6
Payable in foreign currencies

23,841
16,960
6,881

29,226
18,545
10,681

32,954
18,818
14,136

29,775
16,704
13,071

29,282
15,028
14,254

26,237
13,872
12,365

24,241
12,903
11,338

26,570
13,831
12,739

24,844
12,212
12,632

7 Commercial liabilities
8
Trade payables
y
Advance receipts and other liabilities

21,670
9,566
12,104

21,371
8,802
12,569

21,355
10,005
11,350

20,412
9,844
10,568

20,691
10,527
10,164

21,436
10,061
11,375

22,207
11,013
11,194

23,337
10,815
12,522

24,146
11,081
13,065

10
11

Payable in dollars
Payable in foreign currencies

20,496
1,174

20,183
1,188

19,480
1,875

19,199
1,213

19,253
1,438

20,036
1,400

21,000
1,207

22,442
895

23,173
973

12
13
14
13
16
17
18

By area or country
Financial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

13,387
414
1,623
889
606
569
8,610

18,810
175
2,539
975
534
634
13,332

21,703
495
1,727
1,961
552
688
15,543

17,541
612
2,046
1,755
633
883
10,764

18,223
778
1,101
1,589
530
1,056
12,138

16,401
347
1,365
1,670
474
948
10,518

15,622
369
999
1,974
466
895
10,138

16,950
483
1,679
2,161
479
1,260
10,246

16,434
498
1,011
1,850
444
1,156
10,790

19

Canada

544

859

629

1,817

893

797

632

1,166

951

20
21
22
23
24
2b
26

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

4,053
379
114
19
2,850
12
6

3,359
1,148
0
18
1,533
17
5

2,034
101
80
207
998
0
5

2,065
135
149
58
1,068
10
5

1,950
81
138
58
1,030
3
4

1,904
79
144
111
930
3
3

1,783
59
147
57
866
12
2

1,876
78
126
57
946
16
2

969
31
28
8
826
11
1

27
28
'29

Asia
Japan
Middle Eastern oil-exporting countries1

5,818
4,750
19

5,956
4,887
23

8,403
7,314
35

8,156
7,182
27

8,023
7,141
25

6,947
6,308
25

5,988
5,436
27

6,390
5,980
26

6,351
6,051
26

30
31

Africa
Oil-exporting countries2

6
0

133
123

135
123

156
122

151
122

149
122

150
122

131
122

72
61

33

109

50

40

42

39

66

57

67

7,398
298
700
729
535
350
2,505

6,827
239
655
684
688
375
2,039

6,773
241
728
604
722
327
2,444

6,642
271
642
482
536
327
2,848

6,776
311
504
556
448
432
2,902

7,263
349
528
660
566
255
3,351

7,700
331
481
767
500
413
3,568

8,425
370
648
867
659
428
3,525

7,916
326
678
839
617
516
3,266

32
33
34
33
36
37
38
3y

All other

3

Commercial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

40

Canada

1,002

879

1,037

1,235

1,146

1,219

1,040

959

998

41
42
43
44
43
46
47

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

1,533
3
307
209
33
457
142

1,658
21
350
214
27
481
123

1,857
19
345
161
23
574
276

1,368
8
260
96
29
356
273

1,836
3
397
107
12
420
204

1,607
1
219
143
5
357
175

1,740
1
205
98
56
416
221

2,110
28
570
128
10
468
243

2,301
35
509
119
10
475
283

10,594
3,612
1,889

10,980
4,314
1,534

10,741
4,555
1,576

10,151
4,110
1,787

9,978
3,531
1,790

10,275
3,475
1,647

10,421
3,315
1,912

10,474
3,725
1,747

11,389
3,943
1,784

48
49
30

Japan
Middle Eastern oil-exporting countries

51
32

Africa
Oil-exporting countries2

568
309

453
167

428
256

463
248

481
252

589
241

619
254

708
254

924
435

53

Other3

575

574

519

553

474

483

687

661

618

1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).




2. Comprises Algeria, Gabon, Libya, and Nigeria.
3. Includes nonmonetary international and regional organizations.

Nonbank-Reported
3.23

CLAIMS ON UNAFFILIATED FOREIGNERS
the United States

Data

A59

Reported by Nonbanking Business Enterprises in

Millions of dollars, end of period
1995
Type of claim, and area or country

1992

1993

1996

1994
Mar.

June

Sept.

Dec.

Mar.

June

1 Total

45,073

49,159

57,888

52,218

58,051

53,424

52,509

55,406r

58,845

2 Payable in dollars
3 Payable in foreign currencies

42,281
2,792

45,161
3,998

53,805
4,083

48,425
3,793

54,138
3,913

49,696
3,728

48,711
3,798

51,007r
4,399

54,000
4,845

By type
4 Financial claims
Deposits
5
Payable in dollars
6
Payable in foreign currencies
7
Other financial claims
8
Payable in dollars
9
Payable in foreign currencies
10

26,509
17,695
16,872
823
8,814
7,890
924

27,771
15,717
15,182
535
12,054
10,862
1,192

33,897
18,507
18,026
481
15,390
14,306
1,084

29,606
17,115
16,458
657
12,491
11,275
1,216

34,574
22,046
21,351
695
12,528
11,370
1,158

29,891
17,974
17,393
581
11,917
10,689
1,228

27,398
15,133
14,654
479
12,265
10,976
1,289

30,772r
17,595
17,044
551
13,177r
ll,290 r
1,887

33,994
18,364
17,926
438
15,630
13,233
2,397

11 Commercial claims
Trade receivables
12
Advance payments and other claims
13

18,564
16,007
2,557

21,388
18,425
2,963

23,991
21,158
2,833

22,612
20,415
2,197

23,477
21,326
2,151

23,533
21,409
2,124

25,111
22,998
2,113

24,634
22,123
2,511

24,851
22,276
2,575

14
15

Payable in dollars
Payable in foreign currencies

17,519
1,045

19,117
2,271

21,473
2,518

20,692
1,920

21,417
2,060

21,614
1,919

23,081
2,030

22,673
1,961

22,841
2,010

16
17
18
19
20
21
22

By area or country
Financial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

9,331
8
764
326
515
490
6,252

7,299
134
826
526
502
530
3,585

7,936
86
800
540
429
523
4,649

7,630
146
808
527
606
490
4,040

7,927
155
730
356
601
514
4,790

7,840
160
753
301
522
530
4,924

7,609
193
803
436
517
498
4,303

8,929
159
1,015
320
486
470
5,568

9,241
151
679
296
488
461
6,169

23

Canada

24
25
26
27
28
29
30

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

31
32
33
34
35
36
37
38
39
40
41
42
43

Japan
Middle Eastern oil-exporting countries'
Africa
Oil-exporting countries2
All other3
Commercial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

1,833

2,032

3,581

3,848

3,705

3,526

2,851

5,269

4,773

13,893
778
40
686
11,747
445
29

16,224
1,336
125
654
12,699
872
161

19,536
2,424
27
520
15,228
723
35

16,109
940
37
528
13,531
583
27

21,159
2,355
85
502
17,013
635
27

15,345
1,552
35
851
11,816
487
50

14,500
1,965
81
830
10,393
554
32

13,827r
1,538
77
1,019
10,100r
461
40

17,644
2,168
84
1,242
13,024
392
23

864
668
3

1,657
892
3

1,871
953
141

1,504
621
4

1,235
471
3

2,160
1,404
4

1,579
871
3

1,890
1,171
13

1,571
852
9

83
9

99
1

373
0

141
9

138
9

188
6

276
5

277
5

197
5

505

460

600

374

410

832

583

580

568

8,451
189
1,537
933
552
362
2,094

9,105
184
1,947
1,018
423
432
2,377

9,540
213
1,881
1,027
311
557
2,556

8,947
199
1,790
977
324
556
2,388

9,200
218
1,669
1,023
341
612
2,469

8,862
224
1,706
997
338
438
2,479

9,824
231
1,830
1,070
452
520
2,656

9,776
247
1,803
1,410
442
579
2,607

9,812
239
1,658
1,335
481
602
2,651

44

Canada

1,286

1,781

1,988

2,010

2,003

1,971

1,951

2,045

2,074

45
46
47
48
49
50
51

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

3,043
28
255
357
40
924
345

3,274
11
182
460
71
990
293

4,117
9
234
612
83
1,243
348

4,140
17
208
695
55
1,106
295

4,370
21
210
777
83
1,109
319

4,359
26
245
745
66
1,026
325

4,364
30
272
898
79
993
285

4,151
30
273
809
106
870
308

4,340
28
264
837
103
1,021
313

4,866
1,903
693

6,014
2,275
704

6,982
2,655
708

6,200
1,911
689

6,516
2,011
707

6,826
1,998
775

7,312
1,870
974

7,100
2,010
1,024

6,883
1,877
879

52
53
54

Japan
Middle Eastern oil-exporting countries'

55
56

Africa
Oil-exporting countries2

554
78

493
72

454
67

468
71

478
60

544
74

654
87

667
107

688
83

57

Other3

364

721

910

847

910

971

1,006

895

1,054

1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).




2. Comprises Algeria, Gabon, Libya, and Nigeria.
3. Includes nonmonetary international and regional organizations.

A60
3.24

International Statistics • February 1997
FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
1996
Transaction, and area or country

1994

1996

1995
Jan.Oct.

Apr.

May

June

July

Aug.

Sept.

Oct.P

49,488
52,142

46,136
44,071

42,599
42,550

57,754
56,699

U.S. corporate securities
STOCKS
1 Foreign purchases
2 Foreign sales

350,593
348,716

462,950
451,710

501,065
490,146

53,047
48,774

57,552
56,068

43,374
42,361

3 Net purchases, or sales ( - )

1,877

11,240

10,919

4,273

1,484

1,013

-2,654

2,065

49

1,055

4 Foreign countries

1,867

11,445

10,961

4,129

1,479

1,013

-2,653

2,051

75

1,061

6,714
-201
2,110
2,251
-30
840
-1,160
-2,111
-1,142
-1,234
1,162
29
771

4,912
-1,099
-1,837
3,507
-2,283
8,066
-1,517
5,814
-337
2,503
-2,725
2
68

6,505
-1,042
1,127
1,386
2,494
1,974
1,526
3,653
-1,538
871
550
-68
12

1,429
-336
174
237
618
345
52
808
-6
1,852
1,446
31
-37

-446
-306
-30
-66
-140
229
-394
1,298
-261
1,380
73
6
-104

-308
-339
218
129
78
-416
81
42
-114
1,359
802
-4
-43

-386
-188
363
124
615
-1,490
31
-1,077
-15
-1,347
-611
33
108

3,310
-209
83
219
538
2,551
-250
1,046
-179
-1,642
-791
-33
-201

200
-109
-85
-13
-123
475
191
252
-153
-575
104
-6
166

447
-219
116
-132
144
909
742
-605
15
511
313
5
-54

10

-205

-42

144

5

0

-1

14

-26

-6

289,586
229,665

293,533
206,951

331,196
227,177

24,130
18,705

34,789
24,094

35,008
25,688

27,727
17,458

32,333r
20,901r

37,407r
23,858r

40,431
29,988

21 Net purchases, or sales ( - )

59,921

86,582

104,019

5,425

10,695

9,320

10,269

ll,432 r

13,549r

10,443

22 Foreign countries

59,036

87,036

103,838

5,394

10,690

9,305

10,152

ll,453 r

13,551r

10,458

23 Europe
24
France
23
Germany
26
Netherlands
27
Switzerland
28
United Kingdom
29 Canada
30 Latin America and Caribbean
31 Middle East1
32 Other Asia
33
Japan
34 Africa
33 Other countries

37,065
242
657
3,322
1,055
31,642
2,958
5,442
771
12,153
5,486
-7
654

70,318
1,143
5,938
1,463
494
57,591
2,569
6,141
1,869
5,659
2,250
234
246

64,154
4,828
4,915
1,759
1,044
45,480
3,404
17,770
712
17,737
10,054
389
-328

3,922
785
721
-52
-144
2,239
359
60
122
1,094
135
49
-212

7,114
113
891
371
178
4,217
952
1,166
205
1,279
537
107
-133

4,876
326
53
233
3,706
314
770
218
3,140
1,912
50
-63

6,267
334
255
442
258
4,566
514
1,811
205
1,186
905
31
138

6,184r
169
626r
146
125r
4,305r
474
1,272
201
3,243
2,583
17
62

8,350'
565
381
244
403
6,23 l r
122
1,144
65
3,681
1,963
109
80

6,321
713
-260
93
59
5,358
181
2,964
211
787
1,037
45
-51

885

-454

181

31

5

15

117

5 Europe
6
France
7
Germany
8
Netherlands
9
Switzerland
10
United Kingdom
11 Canada
12 Latin America and Caribbean
13 Middle East1
14 Other Asia
15
Japan
16 Africa
17 Other countries
18 Nonmonetary international and
regional organizations
BONDS2
19 Foreign purchases
20 Foreign sales

36 Nonmonetary international and
regional organizations

1

-21

-2

-15

Foreign securities
37 Stocks, net purchases, or sales (—)
38
Foreign purchases
39
Foreign sales
40 Bonds, net purchases, or sales (—)
41
Foreign purchases
42
Foreign sales
43 Net purchases, or sales (—), of stocks and bonds

-48,071
386,106
434,177
-9,224
848,368
857,592
....

-50,291
345,540
395,831
-48,545
889,471
938,016

-48,525
368,009
416,534
-33,411
914,352
947,763

-6,706
37,764
44,470
-153
81,256
81,409

-3,167
43,515
46,682
-527
82,453
82,980

-7,527
36,728
44,255
-1,887
82,907
84,794

-3,639
37,643
41,282
-3,396
80,703
84,099

-1,142
34,016
35,158
-5,215
84,448
89,663

-1,733
31,195
32,928
—4,430r
113,087r
117,517r

-2,128
40,088
42,216
-5,777
116,314
122,091

-57,295

-98,836

-81,936

-6,859

-3,694

-9,414

-7,035

-6,357

—6,163r

-7,905

44 Foreign countries

-57,815

-98,031

-81,044

-6,802

-3,585

—9,361

-7,098

-6,215

—5,637r

-7,927

45
46
47
48
49
30
31

-3,516
-7,475
-18,334
-24,275
-17,427
-467
-3,748

-48,125
-7,952
-7,634
-34,056
-25,072
-327
63

-41,455
-3,347
-9,679
-22,791
-7,514
-1,450
-2,322

-1,949
614
-1,190
-4,094
-950
-14
-169

1,271
-231
-2,044
-2,260
-921
-32
-289

-8,356
-472
975
-1,401
-1,229
-116
9

-4,460
829
-2,181
-1,174
231
-53
-59

-5,298
856
-1,415
-1,016
486
-25
683

-5,505 r
222
-1,277
971
2,456
-49

-6,030
-574
1,069
-819
656
-468
-1,105

520

-805

-892

-57

-109

-53

63

-142

—526r

Europe
Canada
Latin America and Caribbean
Japan
Africa
Other countries

52 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).




1

22

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.

Securities Holdings and Transactions!Interest and Exchange Rates
3.25

MARKETABLE U.S. TREASURY BONDS AND NOTES

A61

Foreign Transactions1

Millions of dollars; net purchases, or sales (—) during period
1996

1996
1994

Area or country

1995
Jan.—
Oct.

Apr.

May

June

July

Aug.

Sept.

Oct.p

13,781

21,439

1 Total estimated

78,801

134,074

169,702

15,751

13,8%

8,648

47,825

11,868

2 Foreign countries

78,637

133,552

171,495

17,126

13,658

9,459

48,261

11,832

13,938

20,902
10,512
-320
2,813
-423
169
-599
7,641
1,231
-1,708

3
4
5
6
7
8
9
10
11

Europe
Belgium and Luxembourg
Germany
Netherlands
Sweden
Switzerland
United Kingdom
Other Europe and former U.S.S.R
Canada

1?
13
14
15
16
17
18
19

Latin America and Caribbean
Venezuela
Other Latin America and Caribbean
Netherlands Antilles
Japan
Africa
Other

20 Nonmonetary international and regional organizations
?1
International
22
Latin American regional

38,542
1,098
5,709
1,254
794
481
23,365
5,841
3,491

50,000
591
6,136
1,891
358
-472
34,778
6,718
252

88,878
780
13,124
-2,113
2,369
1,051
51,940
21,727
3,552

8,712
399
1,833
-2,137
286
1,329
6,070
932
1,766

7,290
-153
1,674
-757
342
555
2,987
2,642
-669

5,734
221
1,196
1,067
-29
-842
5,190
-1,069
-139

18,137
-39
1,233
694
322
395
10,911
4,621
1,714

6,751
73
467
-237
-282
-730
7,271
189
-1,140

11,906
489
-264
116
431
718
6,779
3,637
-37

-10,383
-319
-20,493
10,429
47,317
29,793
240
-570

48,609
-2
25,152
23,459
32,319
16,863
1,464
908

-2,600
-213
5,013
-7,400
78,865
32,237
1,099
1,701

1,993
4
3,865
-1,876
4,478
2,382
250
-73

-1,167
-39
-2,195
1,067
8,216
4,565
-48
36

1,524
13
-4,434
5,945
2,919
879
22
-601

23,991
16
986
22,989
4,183
2,225
-31
267

-491
146
3,088
-3,725
6,359
2,920
163
190

-19,359
-45
-1,547
-17,767
20,776
4,938
30
622

1,473
-29
920
582
9,457
6,197
-13
1,181

164
526
-154

522
92
261

-1,793
-1,017
-1,029

-1,375
-414
-1,008

238
-9
9

-811
-747
7

-436
-395
-3

36
-287
347

-157
-52
-90

537
338
-4

78,637
41,822
36,815

133,552
39,632
93,920

171,495
69,372
102,123

17,126
8,253
8,873

13,658
6,482
7,176

9,459
-6,648
16,107

48,261
9,629
38,632

11,832
3,587
8,245

13,938
17,188
-3,250

20,902
4,837
16,065

-38
0

3,075
2

7,616
1

863
0

2,172

793

-219
0

323

4,969

-1,876
0

MEMO

23 Foreign countries
74
Official institutions
Other foreign
25
Oil-exporting countries
? 6 Middle East

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.

3.26

1

-1

-1

1

2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.

DISCOUNT RATES OF FOREIGN CENTRAL BANKS 1
Percent per year, averages of daily figures
Rate on Dec. 31, 1996

Rate on Dec. 31, 1996
Country

Country
Month
effective
2.5
2.5
3.25
3.25
3.15

Austria.. .
Belgium. .
Canada..,
Denmark .
France ..

Apr.
Apr.
Nov.
Apr.
Nov.

1996
1995
1996
1996
1996

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

2.5
7.5
.5
2.5
1.0

Germany . . .
Italy
Japan
Netherlands .
Switzerland .

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 RATES1
Percent per year, averages of daily figures
1996
Type or country

1
2
3
4
5
6
7
8
9
10

Eurodollars
United Kingdom
Canada
Germany
Switzerland
Netherlands
France
Italy
Belgium
Japan

1994

4.63
5.45
5.57
5.25
4.03
5.09
5.72
8.45
5.65
2.24

1995

5.93
6.63
7.14
4.43
2.94
4.30
6.43
10.43
4.73
1.20

1996

5.38
5.99
4.49
3.21
1.92
2.91
3.81
8.79
3.19
.58

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.

5.46
5.80
4.87
3.29
2.53
2.81
3.85
8.73
3.23
.57

5.49
5.69
4.76
3.29
2.52
2.99
3.73
8.72
3.29
.67

5.41
5.72
4.30
3.20
2.21
2.90
3.84
8.77
3.21
.62

5.49
5.75
4.10
3.02
1.82
2.70
3.63
8.42
3.04
.53

5.41
5.93
3.54
3.04
1.56
2.82
3.39
7.99
3.02
.52

Nov.
5.38
6.27
3.05
3.09
1.80
2.92
3.35
7.40
3.03
.51

Dec.
5.43
6.31
3.16
3.13
1.99
2.99
3.33
7.22
3.01
.51

A62
3.28

International Statistics • February 1997
FOREIGN EXCHANGE RATES1
Currency units per dollar except as noted

Country/currency unit

1994

1
2
3
4
5
6
7
8
9
10

Australia/dollar^
Austria/schilling
Belgium/franc
Canada/dollar
China, P.R./yuan
Denmark/krone
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma

242.50

11
12
13
14
15
16
17
18
19
20

Hong Kong/dollar
India/rupee
Ireland/pound2
Italy/lira
Japan/yen
Malay sia/ringgit
Netherlands/guilder,. . .
New Zealand/dollar 2 .. .
Norway/krone
Portugai/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/pound2

73.161
11.409
33.426
1.3664
8.6404
6.3561
5.2340
5.5459

July

Aug.

Sept.

78.305
10.435
30.553
1.3722
8.3379
5.7327
4.4793
5.0636
1.4826
237.00

79.279
10.610
31.056
1.3694
8.3341
5.8057
4.5421
5.1307
1.5080
239.67

79.179
10.748
31.471
1.3508
8.3299
5.8576
4.5694
5.1652
1.5277
239.76

79.684
10.640
31.172
1.3381
8.3294
5.8053
4.5512
5.1156
1.5118
238.38

7.7345
35.800

7.7328
35.870
160.96
1,520.48
109.93
2.5009
1.6905
69.640
6.4613
153.99

7.7322
35.804
160.83
1,523.82
112.41
2.5074
1.7141
70.071
6.4810
154.28

7.7323
35.892
166.45
1,513.66
112.30
2.5234
1.6958
70.975
6.3554
152.83

1.4086
4.5489
822.40
127.11
56.050
6.6427
1.2343
27.500
25.407
155.93

1.4124
4.5799
828.24
128.60
57.016
6.6006
1.2586
27.532
25.474
158.63

1.4025
4.6577
830.56
127.28
56.987
6.6269
1.2752
27.522
25.459
166.23

74.073
10.076
29.472
1.3725
8.3700
5.5999
4.3763
4.9864
1.4321
231.68

78.283
10.589
30.968
1.3638
8.3395
5.8009
4.5948
5.1158
1.5049
240.82

78.974
10.576
30.947
1.3697
8.3409
5.8014
4.5812
5.0881
1.5025
237.65

7.7290
31.394
149.69
1,611.49
102.18
2.6237
1.8190
59.358
7.0553
165.93

7.7357
32.418
160.35
1,629.45
93.96
2.5073
1.6044
65.625
6.3355
149.88

7.7345
35.510
159.95
1,542.76
108.78
2.5154
1.6863
68.765
6.4594
154.28

7.7379
35.667
160.31
1,526.82
109.19
2.4915
1.6862
69.001
6.4465
154.56

1.5275
3.5526
806.93
133.88
49.170
7.7161
1.3667
26.465
25.161
153.19

1.4171
3.6284
772.69
124.64
51.047
7.1406

1.4100
4.3042
805.00

1.4160
4.3963
813.03
126.96
55.293
6.6394
1.2320
27.573
25.355
155.30

1.6216

1.1812

26.495
24.921
157.85

126.68

55.289
6.7082
1.2361
27.468
25.359
156.07

161.08

1,516.62
107.87
2.4933
1.6633
68.860
6.4153
152.27
1.4124
4.5289
817.52
125.72
55.603
6.6211

1.2029
27.496
25.289
154.99

MEMO

31 United States/dollar 3 ...
1. Averages of certified noon buying rates in New York for cable transfers. Data in this
table also appear in the Board's G.5 (405) monthly statistical release. For ordering address,
see inside front cover.
2. Value in U.S. cents.
revised




3. Index of weighted-average exchange value of U.S. dollar against the currencies of ten
industrial countries. The weight for each of the ten countries is the 1972-76 average world
trade of that country divided by the average world trade of all ten countries combined. Series
as of August 1978 (see Federal Reserve Bulletin, vol. 64 (August 1978), p. 700).

A63

Guide to Statistical Releases and Special Tables
STATISTICAL RELEASES—List Published Semiannually,

with Latest Bulletin Reference

Anticipated schedule of release dates for periodic releases

Issue
December 1996

Page
A72

Issue

Page

SPECIAL TABLES—Data Published Irregularly, with Latest Bulletin Reference
Title and Date
Assets and liabilities of commercial banks
March 31, 1994
June 30, 1994
September 30, 1994
December 31, 1994

November
November
November
November

1996
1996
1996
1996

A64
A68
A72
A76

March 31, 1995
June 30, 1995
September 30, 1995
December 31, 1995

November
November
November
November

1996
1996
1996
1996

A80
A84
A88
A92

March 31, 1996
June 30, 1996
September 30, 1996

November 1996
November 1996
February 1997

A96
A100
A64

Terms of lending at commercial banks
February 1996
May 1996
August 1996
November 1996

May
August
November
February

1996
1996
1996
1997

A68
A64
A104
A68

Assets and liabilities of U.S. branches and agencies of foreign banks
December 31, 1995
March 31, 1996
June 30, 1996
September 30, 1996

May
September
November
February

1996
1996
1996
1997

A72
A64
A108
A72

January
July
October
January

1996
1996
1996
1997

A68
A64
A64
A64

December
May
August
March

1991
1992
1992
1993

A79
A81
A83
A71

September 1995
September 1996

A68
A68

Pro forma balance sheet and income statements for priced service
September 30, 1995
March 31, 1996
June 30, 1996
September 30, 1996
Assets and liabilities of life insurance
June 30, 1991
September 30, 1991
December 31, 1991
September 30, 1992

operations

companies

Residential lending reported under the Home Mortgage Disclosure Act
1994
1995




A64
4.20

Special Tables • February 1997
DOMESTIC A N D FOREIGN OFFICES Insured Commercial Bank Assets and Liabilities
Consolidated Report of Condition, September 30, 1996
Millions of dollars except as noted
Banks with domestic
offices only2

Banks with foreign offices'
Item

1 Total assets3
2 Cash and balances due from depository institutions
Cash items in process of collection, unposted debits, and currency and coin. . .
3
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

To al
Total

Foreign

Domestic

Over 100

Under 100

4,430,564

2,710,109

692,175

2,113,600

1,408,495

311,960

304,648

216,521
111,426
n.a.
n.a.
25,556
66,550
12,990

74,932
2,601
n.a .
n.s .
11,634
60,524
173

141,589
108,825
85,536
23,289
13,921
6,026
12,817

72,282
41,534
28,567
12,967
18,674
4,136
7,938

15,845

n.a.

I1
n.a.
I

*

MEMO

9 Non-interest-bearing balances due from commercial banks in the United States
(included in balances due from depository institutions in the United States)

10,753

15,294

6,402

10 Total securities, held-to-maturity (amortized cost) and available-for-sale (fair value)
11
U.S. Treasury securities
12
U.S. government agency and corporation obligations (excludes mortgage-backed
securities)
13
Issued by U.S. government agencies
14
Issued by U.S. government-sponsored agencies
15
Securities issued by states and political subdivisions in the United States
16
General obligations
17
Revenue obligations
18
Industrial development and similar obligations
19
Mortgage-backed securities (MBS)
20
Pass-through securities
21
Guaranteed by GNMA
77
Issued by FNMA and FHLMC
23
Privately issued
24
Other mortgage-backed securities (includes CMOs, REMICs, and stripped MBS)
25
Issued or guaranteed by FNMA, FHLMC or GNMA
26
Collateralized by MBS issued or guaranteed by FNMA, FHLMC, or GNMA
77
All other mortgage-backed securities
7.8
Other debt securities
79
Other domestic debt securities
30
Foreign debt securities
31
Investments in mutual funds
32
33
Other equity securities with readily determinable fair value
34
All other equity securities

790,459
179,979

364,013
75,657

44,006
1,207

320,007
74,450

333,727
79,320

92,719
25,002

125,230
5,776
119,454
73,299
54,861
17,783
655
325,027
213,740
71,596
139,540
2,604
111,286
8 J,053
3,165
19,069
66,562
n.a.
n.a.
20,362
2,286
4,671
13,405

26,927
2,458
24,468
19,765
13,960
5,504
301
175,046
118,595
46,464
70,378
1,752
56,452
41,922
1,453
13,077
54,937
14,655
40,281
11,682
908
3,428
7,346

113
n.£i.
n.<i.
162
n.<i.
n.a.
n. i.
3,892
3, 868
n.a.
n. i.
15
24
0
n.a.
n. i.
37,385
670
36,715
1,247
74
506
666

26,814
n.a.
n.a.
19,603
n.a.
n.a.
n.a.
171,154
114,726
n.a.
n.a.
1,737
56,428
41,922
n.a.
n.a.
17,552
13,985
3,567
10,435
833
2,922
6,680

66,994
2,211
64,783
38,796
30,071
8,438
287
131,435
83,711
21,688
61,241
782
47,723
40,438
1,446
5,840
9,868
9,297
571
7,315
1,007
1,145
5,163

31,310
1,107
30,203
14,738
10,830
3,841
67
18,546
11,435
3,444
7,920
70
7,112
6,694
265
152
1,757
n.a.
n.a.
1,365
371
98
895

35 Federal funds sold and securities purchased under agreements to resell
36
37
Securities purchased under agreements to resell

157,162
141,190
15,971

108,999
96,060
12,940

931
n. a.
n. i.

108,068
n.a.
n.a.

36,560
33,644
2,916

11,602
11,487
115

38 Total loans- and lease-financing receivables, gross
39
LESS: Unearned income on loans
40 Total loans and leases (net of unearned income)
41
LESS: Allowance for loan and lease losses
47
LESS: Allocated transferriskreserves
43 EQUALS: Total loans and leases, net

2,727,140
5,028
2,722,112
53,455
32
2,668,625

1,628,790
2,151
1,626,639
33,899
32
1,592,708

303,794
1,028
302,766
n. i.
n. i.
n. a.

1,324,996
1,123
1,323,872
n.a.
n.a.
n.a.

915,637
2,058
913,579
16,837
0
896,743

182,713
819
181,894
2,719
0
179,174

44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63

1,107,569

545,165
f

26,827

459,864
36,530
10,827
251,678
30,807
220,871
16,858
143,969
7,879
7,267
420
191
15,609
147,086
146,553
533
183
n.a.
n.a.

102,541
7,811
11,398
53,098
2,642
50,456
2,254
27,980
212
n.a.
n.a.
n.a.
19,378
30,066
n.a.
n.a.
84
n.a.
n.a.

Loans secured by real estate
Construction and land development
One- to four-family residential properties
Revolving, open-end loans, extended under lines of credit
All other loans
Multifamily (five or more) residential properties
Nonfarm nonresidential properties
Loans to depository institutions
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
Commercial and industrial loans
U.S. addressees (domicile)
Non-U.S. addressees (domicile)
Acceptances of other banks
U.S. banks
Loans to individuals for household, family, and other personal expenditures (includes

64
Credit cards and related plans
Other (includes single payment and installment)
65
66 Obligations (other than securities) of states and political subdivisions in the United States
(includes nonrated industrial development obligations)
67
68
Loans to foreign governments and official institutions
69
70
Loans for purchasing and carrying securities
All other loans (excludes consumer loans)
71
72
73
74
75
76
77
78
79
80

Assets held in trading accounts
Premises and fixed assets (including capitalized leases)
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




n.a.

n.a.

T
103,252
n.a.
n.a.
n.a.
41,880
694,872
n.a.
n.a.
1,562
n.a.
n.a.

95,161
46,866
6,314
41,981
6,894
517,720
406,787
110,933
1,294
224
1,071

39,128
1,497
157
37,474
33
135,450
28,752
106,698
863
0
863

518,337
29,339
2,599
330,112
48,924
281,188
18,659
137,628
56,034
45,369
6,158
4,507
6,534
382,270
378,035
4,235
431
224
207

545,859
219,848
326,011

261,584
95,849
165,735

32,449
n.a.
n.a.

229,135
n.a.
n.a.

256,332
122,340
133,992

27,943
1,658
26,284

18,253
142,411
n.a.
n.a.
n.a.
n.a.
71,480

9.725
131,844
11,132
120,712
n.a.
n.a.
59,403

33
64,773
9,601
55,172
n.a.
n a.
3,912

9,692
67,071
1,531
65,540
16,094
49,446
55,491

7,596
9,679
31
9,648
1,796
7,852
11,410

932
888
n.a.
n.a.
n.a.
n.a.
667

228,642
63,076
5,566
5,386
19,531
n.a.
43,401
144,068

227,613
36,529
3,142
4,957
19,243
n.a.
30,145
106,241

f
1
n.a.
1
t
31,718
n.a.
n.a.

957
20,997
1,910
404
267
n.a.
12,511
32,136

1
5,550
515
26
20
n.a.
745
5,691

n.a.
1

1
n.a.
1
1

•

n.a.

;

n.a.

Commercial Banks
4.20

A65

DOMESTIC AND FOREIGN OFFICES Insured Commercial Bank Assets and Liabilities—Continued
Consolidated Report of Condition, September 30, 1996
Millions of dollars except as noted
Banks with domestic
offices only2

Banks with foreign offices'

Total

Foreign

Domestic

Over 100

Under 10C

SI Total liabilities, limited-life preferred stock, and equity capital

,430,564

2,710,109

n.a.

n.a.

1,408,495

311,960

82 Total liabilities

,061,869

2,503,225

692,174

1,906,717

1,279,246

279,398

83 Total deposits
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
92
Residual4

,073,672
734,854
n.a.
n a.
53,922
n a.
n a.
n. a.
17,601
267,296

1,756,485
1,514,312
n.a.
n. a.
46,677
n.a.
91,184
36,278
9,109
58,926

450,856
291,416
n. a.
n.a.
28,744
n.a.
85,319
35,356
889
9,131

1,305,630
1,222,896
5,473
39,503
17,933
2,958
5,864
922
8,220
n.a.

1,047,940
975,359
1,696
52,046
6,365
3,228
232
31
6,777
n.a.

269,246
245,183
349
19,858
880
1,242
n.a.
n.a.
1,716
19

409,559
357,567
2,565
14,567
17,933
2,277
5,864
567
8,220
n.a.

278,854
246,551
1,400
16,566
6,365
961
232
2
6,777
n.a.

77,771
68,142
240
7,201
351
107
n.a.
n.a.
1,716
15

351,034
304,373
2,521
9,285
17,932
2,276
5,862
565
8,220
n.a.

183,270
162,241
1,347
5,383
6,333
954
232
2
6,777
n.a.

39,869
35,863
229
1,593
351
104
n.a.
n.a.
1,716
14

896,070
865,329
2,908
24,937
1,610
0
0
681
251
0
0
355
n.a.

769,086
728,808
296
35,480
2,042
0
0
2,267
165
0
0
28
n.a.

191,475
177,041
109
12,657
529
n.a.
n.a.
1,135
n.a.
n.a.
n.a.
n.a.
5

215,468
n.a.
n.a.
28,228
n.a.
132,632
14,162
n.a.
63,949
n.a.

90,774
61,077
29,697
5,108
154
108,526
268
4,413
n.a.
22,064

3,642
2,025
1,617
252
0
3,331
20
22
n.a.
2,883

129,245

32,562

129
69,986
27,739
21,408
1,583

609
66,098
20,225
17,923
3,089

n.a.
15,139
1,080
1,024
802

19,825
331,507
149,793
267,844
131,156
15,770
58,113

14,834
180,209
130,878
335,523
119,728
2,748
93,692

222
27,397
29,225
103,627
30,363
863
36,966

2,838

6,545

93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135

Total transaction accounts
Individuals, partnerships, and corporations
U.S. government
States and political subdivisions in the United States
Commercial banks in the United States
Other depository institutions in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and official checks
Residual4
Demand deposits (included in total transaction accounts)
Individuals, partnerships, and corporations
U.S. government
States and political subdivisions in the United States
Commercial banks in the United States
Other depository institutions in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and official checks
Residual4

n.a.

n a.

n a.

Total nontransaction accounts
Individuals, partnerships, and corporations
U.S. government
States and political subdivisions in the United States
Commercial banks in the United States
U.S. branches and agencies of foreign banks
Other commercial banks in the United States
Other depository institutions in the United States
Banks in foreign countries
Foreign branches of other U.S. banks
Other banks in foreign countries
Foreign governments and official institutions
Residual
Federal funds purchased and securities sold under agreements to repurchase
Federal funds purchased
Securities sold under agreements to repurchase
Demand notes issued to the U.S. Treasury
Trading liabilities
Other borrowed money
Banks' liability on acceptances executed and outstanding
Notes and debentures subordinated to deposits
Net due to own foreign offices, Edge Act and agreement subsidiaries, and IBFs
All other liabilities

136 Total equity capital

310,623
227,750
82,873
33,589
130,540
320,379
19,570
4 3,273
n.a.
125,223

216,207
164,648
51,559
28,228
130,386
208,522
19,282
43,837
n.a.
100,276

739
n.a.
n.a.
0
n.a.
75,890
5,120
n a.
n.a.
n.a.

368,141

206,334

n a.

MEMO

137 Holdings of commercial paper included in total loans, gross
138 Total individual retirement (IRA) and Keogh plan accounts
139 Total brokered deposits
140
Fully insured brokered deposits
141
Issued in denominations of less than $100,000
142
Issued in denominations of $100,000, or in denominations greater than $100,000 and
participated out by the broker in shares of $100,000 or less
143 Money market deposit accounts (MMDAs)
144 Other savings deposits (excluding MMDAs)
145 Total time deposits of less than $100,000
146 Time certificates of deposit of $100,000 or more
147 Open-account time deposits of $100,000 or more
148 All negotiable order of withdrawal (NOW) accounts
149 Number of banks
Footnotes appear at the end of table 4.22




169

n a.

9,567

n a.

184

39

n a.

n.a.

n.a.

A66
4.22

Special Tables • February 1997
DOMESTIC OFFICES Insured Commercial Bank Assets and Liabilities
Consolidated Report of Condition, September 30, 1996
Millions of dollars except as noted
Members
Item

1
2 Cash and balances due from depository institutions
3 Total securities, held-to-maturity (amortized cost) and available-for-sale (fair value)
4
U.S. Treasury securities
5
U.S. government agency and corporation obligations (excludes mortgage-backed securities)
A Securities issued by states and political subdivisions in the United States
7
Mortgage-backed securities (MBS)
8
Pass-through securities
9
Issued or guaranteed by FNMA, FHLMC, or GNMA
10
Other pass-through securities
11
Other mortgage-backed securities (includes CMOs, REMICs, and stripped MBS)
12
Issued or guaranteed by FNMA, FHLMC, or GNMA
All other mortgage-backed securities
13
14
Other debt securities
15
Equity securities
16
Investments in mutual funds
17
Other equity securities with readily determinable fair values
18
All other equity securities
19 Federal funds sold and securities purchased under agreements to resell

Nonmembers

Total
Total

National

State

3,834,055

2,967,931

2,182,583

785,348

229,716

187,247

143,546

43,701

42,470

426,446
104,322
98,304
53,534
149,981
95,146
94,294
852
54,835
47,131
7,704
11,625
8,680
1,379
1,243
6,058

232,680
53,580
48,005
27,897
91,659
59,500
58,916
584
32,158
27,597
4,562
6,211
5,327
686
516
4,125

175,496
38,197
36,155
20,146
71,644
46,539
46,167
372
25,105
21,941
3,164
5,137
4,217
559
420
3,238

57,184
15,383
11,850
7,751
20,014
12,961
12,749
212
7,053
5,656
1,397
1,075
1,110
127
96
887

193,766
50,742
50,298
25,637
58,322
35,646
35,378
268
22,677
19,534
3,142
5,414
3,353
693
727
1,933

866,124

156,230

129,953

87,340

42,613

26,277

2,423,345
4,000
2,419,345

1,873,096
2,286
1,870,811

1,449,334
1,721
1,447,613

423,763
565
423,198

550,249
1,714
548,535

1,080,742
73,680
24,825
634,889
82,373
552,516
37,771
309,577
64,125
41,521
559,423
699

791,839
49,409
11,695
486,514
66,851
419,664
26,976
217,245
60,238
21,050
462,492
439

618,447
38,100
9,036
379,800
53,923
325,878
20,651
170,860
53,124
16,793
339,545
198

173,392
11,309
2,659
106,714
12,928
93,786
6,325
46,385
7,115
4,258
122,947
241

288,903
24,272
13,130
148,374
15,523
132,852
10,795
92,332
3,886
20,471
96,931
260

513,410
18,220
77,638
67,568

390,207
14,783
72,067
59,982

322,966
11,361
43,441
43,460

67,240
3,422
28,626
16,522

123,203
3,437
5,571
7,586

31,718
570,600

29,320
517,921

9,502
319,087

19,818
198,834

2,398
52,678

41 Total liabilities

3,465,361

2,684,177

1,976,330

707,847

781,184

42 Total deposits
43
Individuals, partnerships, and corporations
44
U.S. government
45
States and political subdivisions in the United States
46
Commercial banks in the United States
47
Other depository institutions in the United States
48
Certified and official checks
49
Banks in foreign countries, foreign governments, and foreign official institutions

2,622,816
2,443,438
7,518
111,408
25,178
7,427
16,712
7,068

1,960,101
1,831,072
6,484
73,604
22,874
4,559
12,402
6,528

1,492,034
1,397,413
5,635
52,238
18,265
3,730
9,463
3,362

468,066
433,659
849
21,365
4,608
828
2,939
3,166

662,716
612,365
1,034
37,804
2,304
2,869
4,310
540

766,185
672,259
4,205
38,334
24,649
3,345
16,712
6,681

587,218
513,924
3,447
25,872
22,680
2,720
12,402
6,173

445,290
390,868
2,680
18,986
18,130
2,154
9,463
3,010

141,928
123,056
767
6,887
4,550
566
2,939
3,163

178,967
158,335
757
12,462
1,969
625
4,310
508

574,173
502,477
4,097
16,261
24,615
3,335
16,712
6,675

464,947
404,969
3,377
12,664
22,652
2,714
12,402
6,170

353,723
309,050
2,616
9,336
18,102
2,149
9,463
3,008

111,225
95,919
761
3,328
4,550
566
2,939
3,162

109,225
97,509
720
3,597
1,963
620
4,310
506

1,856,632
1,771,178
3,313
73,074
4,180
4,083
387

1,372,883
1,317,148
3,037
47,731
2,419
1,839
355

1,046,744
1,006,546
2,955
33,252
1,847
1,577
352

326,139
310,603
83
14,479
572
262
4

483,749
454,030
276
25,342
1,761
2,244
32

20 Total loans- and lease-financing receivables, gross
21
LESS: Unearned income on loans
22 Total loans and leases (net of unearned income)
Total loans and leases, gross, by category
Loans secured by real estate
Construction and land development
Farmland
One- to four-family residential properties
Revolving, open-end loans, extended under lines of credit
All other loans
Multifamily (five or more) residential properties
Nonfarm nonresidential properties
Loans to depository institutions
Loans to finance agricultural production and other loans to farmers
Commercial and industrial loans
Acceptances of other banks
Loans to individuals for household, family, and other personal expenditures
(includes purchased paper)
36 Obligations (other than securities) of states and political subdivisions in the United States
37 All other loans
38 Lease-financing receivables

23
24
25
26
27
28
29
30
31
32
33
34
35

39 Net due from own foreign offices, Edge Act and agreement subsidiaries, and IBFs
40 Remaining assets

50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72

Total transaction accounts
Individuals, partnerships, and corporations
U.S. government
States and political subdivisions in the United States
Commercial banks in the United States
Other depository institutions in the United States
Certified and official checks
Banks in foreign countries, foreign governments, and foreign official institutions
Demand deposits (included in total transaction accounts)
Individuals, partnerships, and corporations
U.S. government
States and political subdivisions in the United States
Commercial banks in the United States
Other depository institutions in the United States
Certified and official checks
Banks in foreign countries, foreign governments, and foreign official institutions
Total nontransaction accounts
Individuals, partnerships, and corporations
U.S. government
States and political subdivisions in the United States
Commercial banks in the United States
Other depository institutions in the United States
Banks in foreign countries, foreign governments, and foreign official institutions




Commercial Banks
4.22

A67

DOMESTIC OFFICES Insured Commercial Bank Assets and Liabilities—Continued
Consolidated Report of Condition, September 30, 1996
Millions of dollars except as noted
Members
Item

Nonmembers

Total
Total

73
74
75
76
77
78

Federal funds purchased and securities sold under agreements to repurchase
Demand notes issued to the U.S. Treasury
Other borrowed money
Banks liability on acceptances executed and outstanding
Net due to own foreign offices, Edge Act and agreement subsidiaries, and IBFs
Remaining liabilities

National

State

309,884
33,589
244,490
14,449
63,949
176,184

264,819
31,198
197,336
14,192
56,637
159,894

179,592
16,795
148,946
9,753
39,531
89,679

85,228
14,403
48,390
4,439
17,105
70,215

45,065
2,391
47,154
257
7,312
16,290

67,563
16,136
1,462
681
3,204
2,905
936
202
1,324
6,579

67,051
16,065
1,389
669
3,163
2,903
936
83
1,271
6,503

28,991
7,590
1,326
490
524
1,268
476
83
861
1,692

38,059
8,476
63
179
2,639
1,634
460

512
70
73
12
41
2

0

119
53
76

MEMO

79 Trading assets at large banks5
80 U.S. Treasury securities (domestic offices)
81
U.S. government agency corporation obligations
82
Securities issued by states and political subdivisions in the United States
83 Mortgage-backed securities
84
Other debt securities
85
Certificates of deposit
86
Commercial paper
87 Bankers acceptances
88
Other trading assets
89 Revaluation gains on interest rate, foreign exchange rate, and other commodity and
equity contracts
90 Total individual retirement (IRA) and Keogh plan accounts
91 Total brokered deposits
92 Fully insured brokered deposits
93
Issued in denominations of less than $100,000
94
Issued in denominations of $100,000, or in denominations greater than $100,000 and
participated out by the broker in shares of $100,000 or less
95
96
97
98
99
100

Money market deposit accounts (MMDAs)
Other savings deposits
Total time deposits of less than $100,000
Time certificates of deposit of $100,000 or more
Open-account time deposits of $100,000 or more
All negotiable order of withdrawal (NOW) accounts

101 Number of banks
NOTE. 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.
1. All transactions between domestic and foreign offices of a bank are reported in "net due
from" and "net due to" 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.
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.




410
4,811

0

34,134

34,068

14,681

19,387

67

151,223
49,045
40,354
5,474

112,298
34,554
28,658
3,261

87,544
23,517
19,518
2,732

24,755
11,037
9,140
529

38,925
14,490
11,696
2,213

34,880

25,397

16,786

8,612

9,483

539,113
309,896
706,994
281,247
19,382
188,771

441,245
234,497
486,888
193,808
16,445
120,440

342,527
173,990
381,527
142,542
6,158
90,010

98,718
60,507
105,361
51,266
10,287
30,430

97,868
75,399
220,106
87,439
2,937
68,331

9,567

3,756

2,736

1,020

5,811

2. "Over 100" refers to banks whose assets, on June 30 of the preceding calendar year,
were $100 million or more. (These banks file the FFIEC 032 or FFIEC 033 Call Report.)
"Under 100" refers to banks whose assets, on June 30 of the preceding calendar year, were
less than $100 million. (These banks file the FFIEC 034 Call Report.)
3. 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).
4. "Residual" equals the sum of the "n.a." categories listed above it.
5. Components of "Trading assets at large banks" are reported only by banks with either
total assets of $1 billion or more or with $2 billion or more in the par/notional amount of their
off-balance-sheet derivative contracts.

A68
4.23

Special Tables • February 1997
TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 4 - 8 , 1996 1
Commercial and industrial loans

Type and maturity
of loan

Amount of
loans
(thousands of
dollars)

Average size
(thousands of
dollars)

Weighted
average
maturity2
Days

Loan rate (percent)
Weighted
average
effective3

Loans
secured
by
collateral
(percent)

Loans made
under
commitment
(percent)

Participation loans
(percent)

6.59
6.51
6.87

25.7
24.5
29.9

82.4
84.0
76.7

4.1
4.6
2.4

7.34
6.76
7.88

41.3
34.8
47.3

73.2
87.4

7.4
6.4
8.4

7.12
6.08
7.55

54.0
17.3
69.1

47.1
34.5
52.3

4.3
9.0
2.3

A L L BANKS

1 Overnight6

13,304,593

8,497

2 One month or less (excluding overnight)
3
Fixed rate
4
Floating rate

10,262,769
7,995,944
2,266,825

2,120

5 More than one month and less than one
year
6
Fixed rate
7
Floating rate

14,157,764
6,770,883
7,386,881

446
158

8 Demand7
9
Fixed rate
10
Floating rate

15,505,243
4,537,462
10,967,780

335
1,307
256

11 Total short-term

53,230,369

454

6.81

34.9

62.4

4.5

12 Fixed rate (thousands of dollars)
13
1-99
14
100-499
15
500-999
16
1,000-4,999
17
5,000-9,999
18
10,000 or more

30,576,040
311,474
498,120
577,104
5,015,362
4,562,943
19,611,038

1,284
18
227
684
2,424
6,584
20,671

35
145
98
69
43
39
28

6.35
9.44
7.99
7.11

22.1

82.4
68.7
50.2
36.3
27.4
14.3

61.2
48.5
70.7
90.8
83.5
75.1
51.4

4.7
.5
5.6
11.7
6.7
6.5
3.7

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

22,654,329
1,819,191
3,587,920
1,620,539
4,102,794
1,892,784
9,631,101

242
26
203
652
2,030
6,435
25,067

127
189
189
158
144
123

7.43
9.61
9.10

52.2
81.4
75.2
65.7
56.7
41.4
36.1

64.0
89.4
91.1
91.3
86.0
72.0
33.6

1,383
622
228

156
115
194

82

6.62

6.48
6.13

8.68

7.75
7.00
6.13

4.1
1.6

4.7
7.1
6.8

5.2
2.5

26 Total long-term

9,632,757

365

7.47

48.5

85.7

27 Fixed rate (thousands of dollars)..
28
1-99
29
100-499
30
500-999
31
1,000 or more

2,417,060
186,783
263,407
128,072
1,838,798

237
22
230
675
5,073

7.02
9.78
7.74
6.46

48.3
93.5
84.2
53.8
38.2

79.2
34.8
56.6
66.1
87.9

32 Floating rate (thousands of dollars)
33
1-99
34
100-499
35
500-999
36
1,000 or more

7.215.697
312,251
977,084
683,664
5.242.698

446
33
218
662
4,664

7.62
9.65
8.94
8.38
7.16

48.5
84.1
77.7
68.3
38.4

87.8
73.9
87.3
89.3
88.5

5.3
3.0
8.7

8.62

6.9
.1

4.5
4.1
8.1

8.1

4.4

Loan rate (percent)

Days
Effective

Nomina]

5.99
6.42

5.82
6.22

12.0
24.0

44.7
82.7

1.9
4.2

6.50
6.10

6.32
5.94

27.7
41.8

76.9
28.4

7.4
4.6

LOANS M A D E BELOW P R I M E 1 0

37 Overnight6
38 One month or less (excluding overnight)
39 More than one month and less than one
year
40 Demand7

13,120,081
9,656,535

9,378
3,091

9,903,311
10,369,576

1,087
2,470

41 Total short-term

43,049,503

2,414

42 Fixed rate
43 Floating rate

29,494,417
13,555,086

3,370
1,493

44 Total long-term

6,070,261

1,382

45 Fixed rate
46 Floating rate . . .

1,761,341
4,308,919

867
1,826

Footnotes appear at the end of the table.




16

140

6.05

56.7

6.24
6.21

6.06
6.03

19.9
37.7

6.15

6.03
6.43

35.7
37.5

60.5
48.4

4.8
3.4

86.4

6.62

84.2
87.2

5.8
3.6

Financial Markets
4.23

A69

TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 4-8, 1996'—Continued
Commercial and industrial loans—Continued

Type and maturity
of loan

Amount of
loans
(thousands of
dollars)

Average size
(thousands of
dollars)

Weighted
average
maturity2
Days

Loan rate (percent)

Loans
secured
by
collateral
(percent)

Loans made
under
commitment
(percent)

6.52
6.49
6.62

21.9
21.4
23.7

84.8
88.7
70.2

3.7
4.5

7.01

29.6
24.9
34.7

77.7
69.3
87.1

8.0
7.3

7.37
6.83
6.00
7.24

50.1
14.0
67.4

39.2
31.6
42.8

3.8
9.3

Weighted
average
effective3

Participation loans
(percent)

Most
common
base pricing
rate5

LARGE BANKS

1 Overnight6

10,602,656

9,084

2 One month or less (excluding overnight)
3
Fixed rate
4
Floating rate

7,889,654
6,221,170
1,668,485

2,973
4,640
1,271

5 More than one month and less than one
year
Fixed rate
Floating rate

9,534,855
4,999,923
4,534,932

697
3,542
370

8 Demand7
9
Fixed rate
10
Floating rate

13,274,880
4,313,017
8,961,863

556
2,856
401

11 Total short-term

41,302,046

998

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

24,140,171
32,927
223,947
401,703
3,628,599
3,743,786
16,109,210

4,550
35
243
676
2,407
20,438

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

17,161,874
728,436
1,876,112
980,147
2,903,653
1,566,562
9,106,965

476
31
205
658
2,065
6,427
26,177

26 Total long-term

7,212,327

6
7

6,668

142
98
191

6.68

.6

8.8

1.1

Foreign
Foreign
Prime
Other
Other
Fed funds
Other

6.62

30.2

58.0

30
109
70
61
36
39
25

6.32
8.25
7.43
7.13
6.69
6.46
6.16

18.2

60.0

5.3

88.5
62.4
46.3
31.4
25.3

86.9
90.3
91.7

2.1

111

7.03
9.44
8.96
8.65
7.67
6.89
6.09

189
184
162
145
117
79

Other
Other
Domestic

6.2

9.0

82.2

6.2

12.1

72.1
50.9

7.9
4.4

47.1
78.4
74.3
64.5
55.2
38.6
36.0

55.2
90.9
91.8
91.0
84.1
67.4
29.7

3.0
1.0
4.8
6.5
4.3
1.7

2.6

Other
Other
Other
Foreign
Other
Other
Other
Prime
Prime
Prime
Prime
Prime
Domestic
Fed funds

968

7.32

90.8

4.9

Foreign

44.3
87.4
80.8
74.0
40.7

85.1
62.7
77.0
81.4
85.9

8.0
.5
10.9
5.2

Domestic
Other
Domestic
Domestic
Domestic

44.3
76.0
68.9

92.2
90.2
96.1
91.8
91.8

4.1
3.8
3.5

Foreign
Prime
Prime
Prime
Foreign

43.1
85.3

2.3
3.8

8.25
8.25

27 Fixed rate (thousands of dollars). .
28
1-99
29
100-499
30
500-999
31
1,000 or more

1,487,513
16,127
62,169
66,195
1,343,022

1,269
30
219
723
5,192

6.89
9.39
8.93
7.63
6.73

32 Floating rate (thousands of dollars)
33
1-99
34
100-499
35
500-999
36
1,000 or more

5,724,814
93,873
540,932
493,393
4,596,616

911
40
234
671
5,042

7.43
9.28
8.73
8.42
7.13

61.1

39.0

8.1

6.8
6.8

Loan rate (percent)
Days
Effective

Nominal

6.02

5.84

L O A N S M A D E BELOW P R I M E 1 "

37 Overnight6
38 One month or less (excluding overnight)
39 More than one month and less than one
year
40 Demand'

10,429,145
7,550,779

10,084
4,783

7,577,371
9,769,211

3,191
3,247

41 Total short-term

35,326,506

4,418

6.19

42 Fixed rate
43 Floating rate

23,522,669
11,803,837

5,682
3,061

44 Total long-term

4,861,395

2,980

45 Fixed rate
46 Floating rate . . .

1,124,587
3,736,809

2,753
3,056

Footnotes appear at the end of the table.




10.7

16

6.40

6.21

21.1

129

6.47
6.01

6.30
5.85

40.0

72.7
24.2

7.5
3.9

8.25
8.25

6.25

6.07
5.91

16.5
36.0

59.0
41.7

5.3
1.9

8.25
8.25

6.22

6.10
6.43

35.8
38.2

84.0
90.7

5.0
2.0

20.0

8.25

6.63

A70
4.23

Special Tables • February 1997
TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 4-8, 1996'—Continued
Commercial and industrial loans—Continued

Type and maturity
of loan

Amount of
loans
(thousands of
dollars)

Average size
(thousands of
dollars)

Weighted
average
maturity2
Days

Loan rate (percent)

Loans
secured
by
collateral
(percent)

Loans made
under
commitment
(percent)

Participation loans
(percent)

38.5
35.7
47.0

74.3
67.4
94.8

5.6
5.0
7.4

8.04
6.98
8.69

65.5

86.5
84.4
87.9

6.2

77.1
80.4

94.6
90.2
95.0

7.1
1.8
7.7

77.6

4.8

65.8
43.9
54.6
88.7

2.5
.3
5.2
18.0
8.1

Weighted
average
effective3

OTHER BANKS

1 Overnight6

2,701,937

2 One month or less (excluding overnight)
3
Fixed rate
4
Floating rate

2,373,115
1,774,775
598,340

498
730
256

5 More than one month and less than one
year
6
Fixed rate
7
Floating rate

4,622,909
1,770,959
2,851,949

95
128
82

2,230,363
224,446
2,005,917

100
114

8.83
7.66
8.97

11,928,323

157

7.46

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

6,435,869
278,547
274,173
175,401
1,386,763
819,157
3,501,829

348
17
216
702
2,469
6,227
21,819

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

5,492,454
1,090,755
1,711,808
640,391
1,199,141
326,222
524,137

96
23
200
643
1,948
6,473
14,436

26 Total long-term

2,420,429

27 Fixed rate (thousands of dollars)..
28
1-99
29
100-499
30
500-999
31
1,000 or more

929,546
170,655
201,238
61,877
495,776

32 Floating rate (thousands of dollars)
33
1-99
34
100-499
35
500-999
36
1,000 or more

1,490,883
218,377
436,152
190,271
646,083

8 Demand7
9
Fixed rate
10
Floating rate
11 Total short-term

6.82

6.57
7.56
185
163
199

62.6

67.2

76.8

3.8
7.6

51.4

52
147
116
87
59
38
40

6.45
9.59
8.45
7.06
6.44
6.58
5.98

68.1

193
154
143
147
123

8.65
9.72
9.24
8.73
7.95
7.50
6.77

128
103

37.1
81.7
73.9
59.0
49.1
36.8
24.9

86.8

89.1
53.6

.0

7.6

83.4
76.2
67.5
60.4
54.5
36.5

91.3
88.4
90.4
91.7
90.7
94.1
100.0

7.92

60.8

70.5

54.6
94.1
85.2
32.1
31.5

69.9
32.1
50.4
49.8
93.3

5.0

234
630
4,778

7.21
9.82
8.52
7.86
5.70

150
30
201
642
3,041

8.37
9.81
9.20
8.29
7.34

64.6
87.6
88.7
86.9
34.1

70.9
66.9
76.4
82.9
65.1

9.9
2.6
11.2
11.5
11.1

21

.0
2.0

6.9
10.5
7.5
10.0
16.5

.1
2.6
2.8

7.9

Loan rate (percent)
Days

LOANS M A D E BELOW P R I M E 1 0

37 Overnight6
38 One month or less (excluding overnight)
39 More than one month and less than one
year
40 Demand7

2,690,936
2,105,756

7,378
1,362

2,325,941
600,366

345
505

41 Total short-term

7,722,998

42 Fixed rate
43 Floating rate

5,971,748
1,751,249

44 Total long-term

1,208,865

45 Fixed rate
46 Floating rate . . .

636,754
572,111

Footnotes appear at the end of the table.




17
176

5.90
6.48

5.73
6.29

17.3
34.8

50.9
73.3

.0
5.9

6.57
7.63

6.40
7.39

53.0
70.2

90.7
95.7

7.1
16.2

6.19
7.08

6.02
6.86

33.4
49.1

66.3
93.6

13.1

6.30

6.15

34.3

6.04
6.59

5.89
6.44

35.7
32.8

84.7
64.3

7.3
13.5

63

,295
335

392
503

48
131

2.6

Financial Markets

4.23

A71

TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 4-8, 1996'—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-month 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 unsecured 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 December 31, 1995, assets of most of the large banks were at least $7.0 billion.
Median total assets for all insured banks were roughly $62.0 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.

A72
4.30

Special Tables • February 1997
ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 19961—Continued
Millions of dollars except as noted
All states2
Item-

1 Total assets4

Total
including
IBFs 3

IBFs
only3

New York
Total
including
IBFs

California

Illinois

IBFs
only

Total
including
IBFs

IBFs
only

Total
including
IBFs

IBFs
only

781,232

288,698

603,513

240,630

67,127

25,124

63,820

13,906

2 Claims on nonrelated parties
3 Cash and balances due from depository institutions
4
Cash items in process of collection and unposted debits
Currency and coin (U.S. and foreign)
5
Balances with depository institutions in United States
6
U.S. branches and agencies of other foreign banks
7
(including IBFs)
Other depository institutions in United States (including IBFs)
8
Balances with banks in foreign countries and with foreign central
y
banks
Foreign branches of U.S. banks
10
Other banks in foreign countries and foreign central banks
n
Balances with Federal Reserve Banks
12

687,091
114,293
2,517
23
66,553

139,615
85,073
0
n.a.
44,579

525,413
102,485
2,402
16
60,420

117,562
75,479
0
n.a.
40,252

63,083
3,086
8
2
2,231

9,291
2,337
0
n.a.
1,539

58,326
6,746
57
1
3,104

7,568
5,987
0
n.a.
2,436

61,180
5,373

42,562
2,016

55,798
4,623

38,256
1,996

1,824
407

1,539
0

2,974
130

2,416
20

44,730
978
43,752
470

40,494
862
39,633
n.a.

39,263
813
38,450
384

35,227
720
34,508
n.a.

814
0
814
31

798
0
798
n.a.

3,570
132
3,439
15

3,551
132
3,419
n.a.

13 Total securities and loans

447,946

46,038

312,758

34,514

55,453

6,386

42,888

1,440

14 Total securities, book value
15
U.S. Treasury
Obligations of U.S. government agencies and corporations
16
Other bonds, notes, debentures, and corporate stock (including state
17
and local securities)
18
Securities of foreign governmental units
All Other
19

105,791
32,264
30,196

8,971
n.a.
n.a.

97,702
31,019
29,643

7,812
n.a.
n.a.

3,549
590
365

702
n.a.
n.a.

3,798
501
48

436
n.a.
n.a.

43,331
13,448
29,883

8,971
3,862
5,108

37,040
12,170
24,870

7,812
3,368
4,444

2,595
670
1,925

702
256
446

3,248
512
2,737

436
218
218

38,182
10,784
5,845
21,553

5,864
4,274
101
1,490

34,194
9,866
5,217
19,111

5,412
4,131
101
1,180

839
388
179
272

283
138
0
145

2,474
283
205
1,986

0
0
0
0

342,331
176
342,155

37,082
15
37,067

215,169
112
215,057

26,712
10
26,702

51,950
47
51,903

5,686
2
5,684

39,096
6
39,090

1,004
0
1,004

31,487
34,282
12,512
11,154
1,358
16
21,754
536
21,218
41,850

207
21,529
6,627
6,433
194
0
14,902
351
14,551
682

19,580
22,299
7,885
6,807
1,078
16
14,399
449
13,950
34,475

57
13,987
4,225
4,046
179
0
9,763
335
9,428
455

8,515
6,061
3,840
3,734
106
0
2,222
10
2,212
2,464

148
4,147
2,184
2,179
5
0
1,963
10
1,953
78

1,609
979
442
326
116
0
537
0
537
4,129

0
597
172
162
10
0
425
0
425
57

37 Commercial and industrial loans
U.S. addressees (domicile)
38
Non-U.S. addressees (domicile)
39
40 Acceptances of other banks
U.S. banks
41
42
Foreign banks
43 Loans to foreign governments and official institutions (including
foreign central banks)
44 Loans for purchasing or carrying securities (secured and unsecured) . . .
45 All other loans

214.372
185,746
28,626
591
41
550

12,346
444
11,902
90
0
90

122,045
101,652
20,392
240
9
231

9,983
408
9,575
89
0
89

34,119
31,458
2,661
112
5
106

1,275
35
1,240
0
0
0

30,276
28,745
1,531
190
14
176

343
0
343
0
0
0

3,592
8,226
6,245

1,975
50
179

3,138
8,058
3,684

1,903
50
162

164
65
417

39
0
0

63
41
1,805

7
0
0

Lease financing receivables (net of unearned income)
U.S. addressees (domicile)
Non-U.S. addressees (domicile)
Trading assets
All other assets
Customers' liabilities on acceptances outstanding
U.S. addressees (domicile)
Non-U.S. addressees (domicile)
Other assets including other claims on nonrelated parties
Net due from related depository institutions5
Net due from head office and other related depository institutions 5 ...
Net due from establishing entity, head offices, and other related
depository institutions5

1,687
1,263
424
51,830
34,840
8,134
6,098
2,036
26,706
94,141
94,141

25
0
25
124
2,515
n.a.
n.a.
n.a.
2,515
149,083
n.a.

1,650
1,226
424
47,219
28,757
5,227
3,612
1,615
23,530
78,100
78,100

25
0
25
118
2,038
n.a.
n.a.
n.a.
2,038
123,068
n.a.

32
32
0
204
3,501
2,225
2,042
183
1,276
4,044
4,044

0
0
0
3
282
n.a.
n.a.
n.a.
282
15,833

4
4
0
4,405
1,813
417
319
97
1,396
5,494
5,494

0
0
0
3
137

20 Federal funds sold and securities purchased under agreements to
resell
U.S. branches and agencies of other foreign banks
Commercial banks in United States
Other

21
22
23

24 Total loans, gross
25
LESS: Unearned income on loans
EQUALS: Loans, net
26
Total loans, gross, by category
27 Real estate loans
28 Loans to depository institutions
Commercial banks in United States (including IBFs)
29
30
U.S. branches and agencies of other foreign banks
31
Other commercial banks in United States
Other depository institutions in United States (including IBFs)
32
33
Banks in foreign countries
34
Foreign branches of U.S. banks
Other banks in foreign countries
35
36 Loans to other financial institutions

46
47
48
49
50
51
52
53
54
55
56
57

137
6,339
n.a.

n.a.

149,083

n.a.

123,068

n.a.

15,833

n.a.

6,339

58 Total liabilities4

781,232

288,698

603,513

240,630

67,127

25,124

63,820

13,906

59 Liabilities to nonrelated parties

642,929

268,903

546,470

225,533

41,347

24,270

35,611

10,785




U.S. Branches and Agencies
4.30

A73

ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 19961—Continued
Millions of dollars except as noted
All states2
Item

60 Total deposits and credit balances
Individuals, partnerships, and corporations
61
67
U.S. addressees (domicile)
63
Non-U.S. addressees (domicile)
64
Commercial banks in United States (including IBFs)
65
U.S. branches and agencies of other foreign banks
66
Other commercial banks in United States
67
Banks in foreign countries
68
Foreign branches of U.S. banks
Other banks in foreign countries
69
70
Foreign governments and official institutions
(including foreign central banks)
All other deposits and credit balances
71
72
Certified and official checks
73 Transaction accounts and credit balances (excluding IBFs)
74
Individuals, partnerships, and corporations
75
U.S. addressees (domicile)
76
Non-U.S. addressees (domicile)
77
Commercial banks in United States (including IBFs)
78
U.S. branches and agencies of other foreign banks
79
Other commercial banks in United States
Banks in foreign countries
80
Foreign branches of U.S. banks
81
82
Other banks in foreign countries
Foreign governments and official institutions
83
(including foreign central banks)
84
All other deposits and credit balances
Certified and official checks
85
86 Demand deposits (included in transaction accounts
and credit balances)
87 Individuals, partnerships, and corporations
88
U.S. addressees (domicile)
89
Non-U.S. addressees (domicile)
Commercial banks in United States (including IBFs)
90
91
U.S. branches and agencies of other foreign banks
Other commercial banks in United States
92
Banks in foreign countries
93
94
Foreign branches of U.S. banks
Other banks in foreign countries
95
96
Foreign governments and official institutions
(including foreign central banks)
97
All other deposits and credit balances
Certified and official checks
98
99 Nontransaction accounts (including MMDAs, excluding IBFs)
100 Individuals, partnerships, and corporations
101
U.S. addressees (domicile)
102
Non-U.S. addressees (domicile)
103 Commercial banks in United States (including IBFs)
104
U.S. branches and agencies of other foreign banks
Other commercial banks in United States
105
106 Banks in foreign countries
107
Foreign branches of U.S. banks
Other banks in foreign countries
108
109 Foreign governments and official institutions
(including foreign central banks)
110 All other deposits and credit balances
111 IBF deposit liabilities
112 Individuals, partnerships, and corporations
U.S. addressees (domicile)
113
114
Non-U.S. addressees (domicile)
115 Commercial banks in United States (including IBFs)
116
U.S. branches and agencies of other foreign banks
Other commercial banks in United States
117
118 Banks in foreign countries
Foreign branches of U.S. banks
119
Other banks in foreign countries
120
121 Foreign governments and official institutions
(including foreign central banks)
122 All other deposits and credit balances
Footnotes appear at end of table.




Total
excluding
IBFs3

IBFs
only3

California

New York

Illinois

Total
excluding
IBFs

IBFs
only

Total
excluding
IBFs

IBFs
only

Total
excluding
IBFs

IBFs
only

189,762
138,893
123,481
15,411
26,135
15,835
10,300
9,667
3,441
6,226

205,631
15,110
399
14,711
44,381
41,018
3,364
110,968
4,189
106,779

161,544
114,322
105,114
9,208
23,973
14,717
9,255
8,978
3,165
5,813

189,274
10,326
398
9,928
42,522
39,426
3,096
104,287
3,729
100,558

6,723
5,407
3,773
1,633
756
326
430
333
175
158

4,553
68
0
668
1,003
80
123
2,019
131
1,8 88

12,979
11,195
10,518
676
1,241
713
529
175
100
75

5,841
155
0
155
663
572
91
3,529
319
3,210

4,795
10,028
245

35,150
22

4,419
9,649
203

32,118
21

206
5
17

862
0

2
359
7

1,493
1

8,121
6,165
4,352
1,813
105
31
74
1,059
55
1,004

6,500
4,822
3,723
1,099
100
30
70
879
54
824

357
306
204
102
2
0
2
23
0
23

352
335
332
3
0
0
0
7
0
7

420
127
245

386
111
203

5
5
17

2
2
7

7,683
5,810
4,225
1,585
96
31
65
1,032
55
977

6,316
4,704
3,673
1,031
93
30
63
853
54
798

288
241
158
83
0
0
0
22
0
22

341
324
321
3
0
0
0
7
0
7

n a.

n.a.

n.a.

403
97
245

380
83
203

4
4
17

2
2
7

181,641
132,728
119,129
13,598
26,031
15,804
10,227
8 608
3,385
5,222

155,044
109,500
101,392
8,109
23,873
14,687
9,186
8,099
3,110
4,989

6,366
5,101
3,570
1,531
754
326
428
310
175
135

12,627
10,860
10,186
673
1,241
713
529
169
100
69

4,374
9,901

4,033
9,538

201
0

0
357

n a.

205,631
15,110
399
14,711
44,381
41,018
3,364
110,968
4,189
106,779
35,150
22

n.a.

189,274
10,326
398
9,928
42,522
39,426
3,096
104,287
3,729
100,558
32,118
21

n a.

4,553
668
0
668
1,003
! 80
123
2,019
131
1,1 88
862
0

n a.

n.a.

5,841
155
0
155
663
572
91
3,529
319
3,210
1,493
1

A74
4.30

Special Tables • February 1997
ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 19961—Continued
Millions of dollars except as noted
All states2
Item

123 Federal funds purchased and securities sold under agreements to
repurchase
17,4 U.S. branches and agencies of other foreign banks
175 Other commercial banks in United States
176 Other
127 Other borrowed money
128 Owed to nonrelated commercial banks in United States (including
IBFs)
129 Owed to U.S. offices of nonrelated U.S. banks
no
Owed to U.S. branches and agencies of nonrelated
foreign banks
n i Owed to nonrelated banks in foreign countries
n?
Owed to foreign branches of nonrelated U.S. banks
m
Owed to foreign offices of nonrelated foreign banks
134 Owed to others

Total
including
IBFs3

New York

IBFs
only3

California

Illinois

Total
including
IBFs

IBFs
only

Total
including
IBFs

IBFs
only

Total
including
IBFs

IBFs
only

81,047
11,369
11,137
58,540
92,672

16,855
3,810
1,406
11,640
43,428

70,455
8,035
7,409
55,010
58,918

12,935
1,953
223
10,759
20,734

4,520
2,210
1,813
496
22,196

1,819
1,553
113
154
17,641

5,366
931
1,752
2,683
7,850

1,672
176
1,070
426
3,189

24,718
7,211

11,643
1,006

12,419
4,365

4,578
330

9,048
1,896

5,697
600

1,842
532

799
10

17,507
33,399
1,589
31,810
34,555

10,638
29,010
1,334
27,676
2,775

8,054
18,001
681
17,320
28,497

4,248
13,865
465
13,400
2,291

7,152
11,886
732
11,153
1,262

5,096
11,746
704
11,042
199

1,309
2,340
148
2,192
3,668

789
2,335
148
2,187
55

135 All other liabilities
136 Branch or agency liability on acceptances executed and
outstanding
137 Trading liabilities
138 Other liabilities to nonrelated parties

73,817

2, )88

66,280

2,591

3,356

258

3,575

84

8,491
41,146
24,179

n.a.
76
2,912

5,471
38,823
21,986

n.a.
71
2,520

2,302
180
875

3
255

419
2,140
1,016

n.a.
3
81

139 Net due to related depository institutions5
140 Net owed to head office and other related depository institutions5.. .
141 Net owed to establishing entity, head office, and other related
depository institutions5

138,303
138,303

19,795
n a.

57,043
57,043

15,097
n.a.

25,780
25,780

854
n.a.

28,209
28,209

3,121
n.a.

n.a.

19,795

n.a.

15,097

n.a.

n.a.

3,121

n.a.

854

MEMO

142 Non-interest-bearing balances with commercial banks
in United States
143 Holding of commercial paper included in total loans
144 Holding of own acceptances included in commercial and
industrial loans
145 Commercial and industrial loans with remaining maturity of one year
or less
146 Predetermined interest rates
147 Floating interest rates
148 Commercial and industrial loans with remaining maturity of more
than one year
149 Predetermined interest rates
150 Floating interest rates




1,179
897

0

828
695

0

0

173
17

80
174

4,471

3,460

885

52

122,777
73,264
49,513

69,733
42,806
26,928

19,348
10,561
8,786

19,043
12,924
6,119

90,684
20,367
70,317

n.a.

52,037
12,274
39,763

n a.

14,621
2,768
11,854

n.a.

10,936
3,468
7,468

0

n.a.

U.S. Branches and Agencies
4.30

A75

ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 19961—Continued
Millions of dollars except as noted
All states2
Item

151 Components of total nontransaction accounts,
included in total deposits and credit balances of
nontransaction accounts, including IBFs
152 Time CDs in denominations of $100,000 or more
153 Other time deposits in denominations of $100,000
or more
154 Time CDs in denominations of $100,000 or more
with remaining maturity of more than 12 months

Total
excluding
IBFs3

IBFs
only3

184,323
144,265
33,317
6,741

Total
excluding
IBFs

California

IBFs
only

t
I

158,764
123,224

Total
excluding
IBFs

29,476
6,063
New York

IBFs
only

Total
including
IBFs

IBFs
only

49,341
491

n.a.
0

27,691
243

n.a.
0

Illinois

IBFs
only

t
I

6,468
4,754

n.a.

Total
including
IBFs

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 monthly statistical release G.l 1, 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.
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,




t
1

n.a.

All states2

155 Immediately available funds with a maturity greater than one day
included in other borrowed money
156 Number of reports filed6

New York

Total
excluding
IBFs

12,494
10,206

n.a.
1,281
432

2,119

t
1

n.a.

169

California

IBFs
only

Illinois

Total
including
IBFs

IBFs
only

Total
including
IBFs

IBFs
only

16,877
109

n.a.
0

3,039
40

n.a.
0

either because the item is not an eligible IBF asset or liability or because that level of detail is
not reported for IBFs. From December 1981 through September 1985, IBF data were
included in all applicable items reported.
4. Total assets and total liabilities include net balances, if any, due from or 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. 11 monthly 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. 11 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 majorityowned 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.

A76

Index to Statistical Tables
References are to pages A3-A75 although the prefix 'A" is omitted in this index
ACCEPTANCES, bankers (See Bankers acceptances)
Assets and liabilities (See also Foreigners)
Banks, by classes, 16—21
Domestic finance companies, 33
Federal Reserve Banks, 10
Foreign banks, U.S. branches and agencies, 72-75
Foreign-related institutions, 20
Automobiles
Consumer credit, 36
Production, 44, 45
BANKERS acceptances, 10, 11, 23
Bankers balances, 16-21, 72-75. (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 31
Rates, 23
Business activity, nonfinancial, 42
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 43
Capital accounts
Banks, by classes, 16-21, 64-67
Federal Reserve Banks, 10
Central banks, discount rates, 61
Certificates of deposit, 23
Commercial and industrial loans
Commercial banks, 16-21, 64-67
Weekly reporting banks, 16-21
Commercial banks
Assets and liabilities, 16-21, 64-67
Commercial and industrial loans, 16-21
Consumer loans held, by type and terms, 36, 64-67
Deposit interest rates of insured, 15
Number by classes, 64—67
Real estate mortgages held, by holder and property, 35
Terms of lending, 68-71
Time and savings deposits, 4
Commercial paper, 22, 23, 33
Condition statements (See Assets and liabilities)
Construction, 42, 46
Consumer credit, 36
Consumer prices, 42
Consumption expenditures, 49, 50
Corporations
Profits and their distribution, 32
Security issues, 31, 61
Cost of living (See Consumer prices)
Credit unions, 36
Currency in circulation, 5, 13
Customer credit, stock market, 24

EMPLOYMENT, 42
Eurodollars, 23
FARM mortgage loans, 35
Federal agency obligations, 5, 9, 10, 11, 28, 29
Federal credit agencies, 30
Federal finance
Debt subject to statutory limitation, and types and ownership
of gross debt, 27
Receipts and outlays, 25, 26
Treasury financing of surplus, or deficit, 25
Treasury operating balance, 25
Federal Financing Bank, 30
Federal funds, 6, 23, 25
Federal Home Loan Banks, 30
Federal Home Loan Mortgage Corporation, 30, 34, 35
Federal Housing Administration, 30, 34, 35
Federal Land Banks, 35
Federal National Mortgage Association, 30, 34, 35
Federal Reserve Banks
Condition statement, 10
Discount rates (See Interest rates)
U.S. government securities held, 5, 10, 11, 27
Federal Reserve credit, 5,6, 10, 11
Federal Reserve notes, 10
Federally sponsored credit agencies, 30
Finance companies
Assets and liabilities, 33
Business credit, 33
Loans, 36
Paper, 22, 23
Float, 5
Flow of funds, 37-41
Foreign banks, assets and liabilities of U.S. branches and
agencies, 72-75
Foreign currency operations, 10
Foreign deposits in U.S. banks, 5
Foreign exchange rates, 62
Foreign-related institutions, 20
Foreign trade, 51
Foreigners
Claims on, 52, 55, 56, 57, 59
Liabilities to, 51, 52, 53, 58, 60, 61
GOLD
Certificate account, 10
Stock, 5, 51
Government National Mortgage Association, 30, 34, 35
Gross domestic product, 48
HOUSING, new and existing units, 46

DEBT (See specific types of debt or securities)
Demand deposits
Banks, by classes, 16-21
Depository institutions
Reserve requirements, 8
Reserves and related items, 4, 5, 6, 12, 64—67
Deposits (See also specific types)
Banks, by classes, 4, 16-21
Federal Reserve Banks, 5, 10
Interest rates, 15
Discount rates at Reserve Banks and at foreign central banks and
foreign countries (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 32




INCOME, personal and national, 42, 48, 49
Industrial production, 42, 44
Insurance companies, 27, 35
Interest rates
Bonds, 23
Commercial banks, 68-71
Consumer credit, 36
Deposits, 15
Federal Reserve Banks, 7
Foreign central banks and foreign countries, 61
Money and capital markets, 23
Mortgages, 34
Prime rate, 22

A77

International capital transactions of United States, 50-61
International organizations, 52, 53, 55, 58, 59
Inventories, 48
Investment companies, issues and assets, 32
Investments (See also specific types)
Banks, by classes, 16—21
Commercial banks, 4, 16-21
Federal Reserve Banks, 10, 11
Financial institutions, 35
LABOR force, 42
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 16—21
Commercial banks, 16-21, 64-67
Federal Reserve Banks, 5, 6, 7, 10, 11
Financial institutions, 35
Insured or guaranteed by United States, 34, 35
MANUFACTURING
Capacity utilization, 43
Production, 43, 45
Margin requirements, 24
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 6
Reserve requirements, 8
Mining production, 45
Mobile homes shipped, 46
Monetary and credit aggregates, 4, 12
Money and capital market rates, 23
Money stock measures and components, 4, 13
Mortgages (See Real estate loans)
Mutual funds, 32
Mutual savings banks (See Thrift institutions)
NATIONAL defense outlays, 26
National income, 48
OPEN market transactions, 9
PERSONAL income, 49
Prices
Consumer and producer, 42, 47
Stock market, 24
Prime rate, 22
Producer prices, 42, 47
Production, 42, 44
Profits, corporate, 32
REAL estate loans
Banks, by classes, 16-21, 35
Terms, yields, and activity, 34
Type of holder and property mortgaged, 35
Repurchase agreements, 6
Reserve requirements, 8
Reserves
Commercial banks, 16-21
Depository institutions, 4, 5, 6, 12




Reserves—continued
Federal Reserve Banks, 10
U.S. reserve assets, 51
Residential mortgage loans, 34
Retail credit and retail sales, 36, 42
SAVING
Flow of funds, 37-41
National income accounts, 48
Savings institutions, 35, 36, 37
Savings deposits (See Time and savings deposits)
Securities (See also specific types)
Federal and federally sponsored credit agencies, 30
Foreign transactions, 60
New issues, 31
Prices, 24
Special drawing rights, 5, 10, 50, 51
State and local governments
Holdings of U.S. government securities, 27
New security issues, 31
Rates on securities, 23
Stock market, selected statistics, 24
Stocks (See also Securities)
New issues, 31
Prices, 24
Student Loan Marketing Association, 30
TAX
federal,
26 also Credit unions and Savings
Thriftreceipts,
institutions,
4. (See
institutions)
Time and savings deposits, 4, 13, 15, 64-67
Trade, foreign, 51
Treasury cash, Treasury currency, 5
Treasury deposits, 5, 10, 25
Treasury operating balance, 25
UNEMPLOYMENT, 42
U.S. government balances
Commercial bank holdings, 16-21
Treasury deposits at Reserve Banks, 5, 10, 25
U.S. government securities
Bank holdings, 16-21, 27
Dealer transactions, positions, and financing, 29
Federal Reserve Bank holdings, 5, 10, 11, 27
Foreign and international holdings and
transactions, 10, 27, 61
Open market transactions, 9
Outstanding, by type and holder, 27, 28
Rates, 23
U.S. international transactions, 50-62
Utilities, production, 45
VETERANS Administration, 34, 35
WEEKLY reporting banks, 16-21
Wholesale (producer) prices, 42, 47
YIELDS (See Interest rates)

A78

Federal Reserve Board of Governors
and Official Staff
A L A N GREENSPAN,

Chairman

ALICE M. RIVLIN, Vice Chair

EDWARD W . KELLEY, JR.
LAWRENCE B . LINDSEY

OFFICE OF BOARD MEMBERS

DIVISION

JOSEPH R. COYNE, Assistant
DONALD J. WINN, Assistant

EDWIN M . TRUMAN, Staff

to the Board
to the Board

THEODORE E. ALLISON, Assistant to the Board for Federal
Reserve System Affairs
LYNN S. FOX, Deputy Congressional Liaison
WINTHROP P. HAMBLEY, Special Assistant to the Board
BOB STAHLY MOORE, Special Assistant to the Board
DIANE E. WERNEKE, Special Assistant to the Board
PORTIA W. THOMPSON, Equal Employment Opportunity
Programs Adviser

OF INTERNATIONAL

LARRY J. PROMISEL, Senior Associate Director
CHARLES J. SIEGMAN, Senior Associate Director
DALE W. HENDERSON, Associate Director
DAVID H. HOWARD, Senior
Adviser
DONALD B. ADAMS, Assistant
Director
THOMAS A. CONNORS, Assistant
Director
PETER HOOPER III, Assistant
Director

KAREN H. JOHNSON, Assistant Director
CATHERINE L. MANN, Assistant Director
RALPH W. SMITH, JR., Assistant

LEGAL

DIVISION

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
ROBERT DEV. FRIERSON, Assistant General Counsel
KATHERINE H. WHEATLEY, Assistant General Counsel

OFFICE OF THE

SECRETARY

WILLIAM W . WILES,

Secretary

JENNIFER J. JOHNSON, Deputy Secretary
BARBARA R. LOWREY, Associate Secretary and Ombudsman
DIVISION OF BANKING
SUPERVISION AND
REGULATION
RICHARD SPILLENKOTHEN,

Director

STEPHEN C. SCHEMERING, Deputy
Director
WILLIAM A. RYBACK, 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
STEPHEN M . HOFFMAN, JR., Assistant
Director
JAMES V. HOUPT, Assistant
Director

JACK P. JENNINGS, Assistant




OF RESEARCH

MICHAEL J. PRELL,

Director

AND

STATISTICS

Director

EDWARD C. ETTIN, Deputy

Director

DAVID J. STOCKTON, Deputy

Director

MARTHA BETHEA, Associate
Director
Director
WILLIAM R. JONES, Associate
MYRON L. KWAST, Associate
Director
PATRICK M . PARKINSON, Associate
Director
THOMAS D . SIMPSON, Associate
Director

LAWRENCE SLIFMAN, Associate Director
MARTHA S. SCANLON, Deputy Associate Director
PETER A. TINSLEY, Deputy Associate Director
DAVID S. JONES, Assistant
Director
STEPHEN A . RHOADES, Assistant
Director
CHARLES S. STRUCKMEYER, Assistant
Director
ALICE PATRICIA WHITE, Assistant

JOYCE K. ZICKLER, Assistant
JOHN J. MINGO, Senior
G L E N N B . CANNER,

DIVISION

Adviser
Adviser

OF MONETARY

DONALD L . KOHN,

Director

Director

AFFAIRS

Director

DAVID E. LINDSEY, Deputy Director
BRIAN F. MADIGAN, Associate Director
RICHARD D. PORTER, Deputy Associate Director
VINCENT R. REINHART, Assistant

Director

NORMAND R.V. BERNARD, Special Assistant to the Board

Director

MICHAEL G. MARTINSON, Assistant
Director
RHOGER H PUGH, Assistant
Director
SIDNEY M. SUSSAN, Assistant
Director
MOLLY S. WASSOM, Assistant
Director
WILLIAM SCHNEIDER, Project
Director,

National Information

FINANCE

Director

Center

DIVISION OF CONSUMER
AND COMMUNITY
AFFAIRS
GRIFFITH L . GARWOOD,

Director

GLENN E. LONEY, Associate
Director
DOLORES S. SMITH, Associate
Director
MAUREEN P. ENGLISH, Assistant
Director
IRENE SHAWN M C N U L T Y , Assistant

Director

A79

SUSAN M . PHILLIPS
JANET L . YELLEN

LAURENCE H . MEYER

OFFICE OF
STAFF DIRECTOR

DIVISION OF RESERVE BANK OPERATIONS
FOR MANAGEMENT

S. DAVID FROST, Staff
Director
SHEILA CLARK, EEO Programs

DAVID L . S H A N N O N ,

Director

JOSEPH H. HAYES, JR., Assistant

OFFICE

OF THE

Director

Director

CONTROLLER

OF SUPPORT

ROBERT E . FRAZIER,

SERVICES

Director

GEORGE M. LOPEZ, Assistant

Director

DAVID L. WILLIAMS, Assistant

Director

DIVISION OF INFORMATION RESOURCES
MANAGEMENT
STEPHEN R . MALPHRUS,

Director

MARIANNE M. EMERSON, Assistant Director
Po KYUNG KIM, Assistant Director
RAYMOND H. MASSEY, Assistant
EDWARD T. MULRENIN, Assistant

Director
Director

DAY W. RADABAUGH, JR., Assistant
ELIZABETH B. RIGGS, Assistant
RICHARD C. STEVENS, Assistant




JOHN H. PARRISH, Assistant

Director

Director

Director
Director

Director

Director

FLORENCE M. YOUNG, Assistant

Director

OFFICE OF THE INSPECTOR
BRENT L. BOWEN, Inspector

Controller

STEPHEN J. CLARK, Assistant Controller (Programs and Budgets)
DARRELL R. PAULEY, Assistant Controller (Finance)
DIVISION

LOUISE L. ROSEMAN, Associate
Director
CHARLES W. BENNETT, Assistant
Director
JACK DENNIS, JR., Assistant
Director
JEFFREY C. MARQUARDT, Assistant

Director

GEORGE E . LIVINGSTON,

Director

DAVID L. ROBINSON, Deputy Director (Finance and Control)

EARL G. HAMILTON, Assistant

Director

FRED HOROWITZ, Assistant

SYSTEMS

CLYDE H . FARNSWORTH, JR.,

DIVISION OF HUMAN RESOURCES
MANAGEMENT
JOHN R. WEIS, Associate

AND PAYMENT

GENERAL

General

DONALD L. ROBINSON, Assistant Inspector General
BARRY R. SNYDER, Assistant Inspector General

A80

Federal Reserve Bulletin • February 1997

Federal Open Market Committee
and Advisory Councils
FEDERAL OPEN MARKET

COMMITTEE
MEMBERS

A L A N GREENSPAN,

WILLIAM J. MCDONOUGH, Vice Chairman

Chairman

J. ALFRED BROADDUS, JR.

LAWRENCE B . LINDSEY

SUSAN M . PHILLIPS

JACK G U Y N N

LAURENCE H . MEYER

ALICE M . RIVLIN

EDWARD W . KELLEY, JR.

MICHAEL H . MOSKOW

JANET L . YELLEN

ROBERT T. PARRY

ALTERNATE MEMBERS
THOMAS M . HOENIG

THOMAS C . MELZER

JERRY L . JORDAN

CATHY E . MINEHAN

ERNEST T. PATRIKIS

STAFF
DONALD L. KOHN, Secretary and
Economist
NORMAND R.V. BERNARD, Deputy
Secretary
JOSEPH R. COYNE, Assistant
Secretary
GARY P. GILLUM, Assistant
Secretary
J. VIRGIL MATTINGLY, JR., General
Counsel

ROBERT A. EISENBEIS, Associate
Economist
MARVIN S. GOODFRIEND, Associate
Economist
WILLIAM C. HUNTER, Associate
Economist
DAVID E. LINDSEY, Associate
Economist

THOMAS C. BAXTER, JR., Deputy General Counsel

LARRY J. PROMISEL, Associate
CHARLES J. SIEGMAN, Associate

Economist
Economist

LAWRENCE SLIFMAN, Associate

Economist

DAVID J. STOCKTON, Associate

Economist

MICHAEL J. PRELL,
EDWIN M . TRUMAN,

JACK BEEBE, Associate

FREDERIC S. MISHKIN, Associate

Economist
Economist

Economist

Economist

PETER R. FISHER, Manager, System Open Market Account

FEDERAL ADVISORY

COUNCIL

ROGER L. FITZSIMONDS, Seventh District
THOMAS H. JACOBSEN, Eighth District
RICHARD M. KOVACEVICH, Ninth District
CHARLES E. NELSON, Tenth District
CHARLES T. DOYLE, Eleventh District
WILLIAM F. ZUENDT, Twelfth District

WILLIAM M. CROZIER, JR., First District
WALTER V. SHIPLEY, Second District
WALTER E. DALLER, JR., Third District

ROBERT W. GILLESPIE, Fourth District
KENNETH D. LEWIS, Fifth District
STEPHEN A. HANSEL, Sixth District




HERBERT V. PROCHNOW, Secretary
JAMES ANNABLE,
WILLIAM J. KORSVIK,

Emeritus

Co-Secretary
Co-Secretary

A81

CONSUMER ADVISORY

COUNCIL

JULIA W . SEWARD, Richmond,
WILLIAM N . L U N D , Augusta,

Virginia
Maine

RICHARD S . AMADOR, LOS A n g e l e s , C a l i f o r n i a

ERROL T. LOUIS, B r o o k l y n , N e w Y o r k

WAYNE-KENT A . BRADSHAW, L o s A n g e l e s , C a l i f o r n i a

PAUL E . MULLINGS, M c L e a n , V i r g i n i a

THOMAS R . BUTLER, R i v e r w o o d s , I l l i n o i s

CAROL PARRY, N e w Y o r k , N e w Y o r k

ROBERT A . COOK, C r o f t o n , M a r y l a n d

PHILIP PRICE, JR., P h i l a d e l p h i a , P e n n s y l v a n i a

HERIBERTO FLORES, S p r i n g f i e l d , M a s s a c h u s e t t s

RONALD A . PRILL, M i n n e a p o l i s , M i n n e s o t a

EMANUEL FREEMAN, P h i l a d e l p h i a , P e n n s y l v a n i a

LISA RICE, T o l e d o , O h i o

DAVID C . FYNN, C l e v e l a n d , O h i o

JOHN R . RINES, D e t r o i t , M i c h i g a n

ROBERT G . GREER, H o u s t o n , T e x a s

SISTER MARILYN ROSS, O m a h a , N e b r a s k a

KENNETH R. HARNEY, Chevy Chase, Maryland

MARGOT SAUNDERS, W a s h i n g t o n , D . C .

GAIL K. HILLEBRAND, S a n F r a n c i s c o , C a l i f o r n i a

GAIL SMALL, Lame Deer, Montana

TERRY JORDE, Cando, North Dakota

YVONNE S . SPARKS, St. L o u i s , M i s s o u r i

FRANCINE C . JUSTA, N e w Y o r k , N e w York

GREGORY D . SQUIRES, M i l w a u k e e , W i s c o n s i n

JANET C . KOEHLER, J a c k s o n v i l l e , F l o r i d a

GEORGE P. SURGEON, C h i c a g o , I l l i n o i s

EUGENE I. LEHRMANN, M a d i s o n , W i s c o n s i n

THEODORE J. WYSOCKI, JR., C h i c a g o , I l l i n o i s

THRIFT INSTITUTIONS

ADVISORY

COUNCIL

DAVID F. HOLLAND, Burlington, Massachusetts, President
CHARLES R. RINEHART, Irwindale, California, Vice President

BARRY C . BURKHOLDER, H o u s t o n , T e x a s

STEPHEN D . HAILER, A k r o n , O h i o

DAVID E . A . CARSON, B r i d g e p o r t , C o n n e c t i c u t

EDWARD J. MOLNAR, H a r l e y s v i l l e , P e n n s y l v a n i a

MICHAEL T. CROWLEY, JR., M i l w a u k e e , W i s c o n s i n

GUY C. PINKERTON, Seattle, Washington

DOUGLAS A . FERRARO, E n g l e w o o d , C o l o r a d o

TERRY R . WEST, J a c k s o n v i l l e , F l o r i d a

WILLIAM A . FITZGERALD, O m a h a , N e b r a s k a

FREDERICK WILLETTS, III, Wilmington, North Carolina




A82

Federal Reserve Board Publications
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Washington, DC 20551 or telephone (202) 452-3244 or FAX
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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. Four vols. (Contains all
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Rates for subscribers outside the United States are as follows
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1994. 157 pp.
ANNUAL REPORT.
ANNUAL REPORT: BUDGET REVIEW, 1 9 9 5 - 9 6 .

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.
ANNUAL STATISTICAL DIGEST: period covered, release date, number of pages, and price.
October 1982
1981
239 pp.
$ 6.50
1982
December 1983
266 pp.
$ 7.50
October 1984
264 pp.
$11.50
1983
1984
October 1985
254 pp.
$12.50
1985
October 1986
231 pp.
$15.00
1986
November 1987
288 pp.
$15.00
October 1988
272 pp.
1987
$15.00
November 1989
256 pp.
$25.00
1988
712 pp.
$25.00
1980-89
March 1991
1990
November 1991
185 pp.
$25.00
November 1992
215 pp.
$25.00
1991
1992
December 1993
215 pp.
$25.00
December 1994
281 pp.
$25.00
1993
1994
December 1995
190 pp.
$25.00
404 pp.
$25.00
November 1996
1990-95

SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES OF

CHARTS. Weekly. $30.00 per year or $.70 each in the United
States, its possessions, Canada, and Mexico. Elsewhere,
$35.00 per year or $.80 each.
THE FEDERAL RESERVE ACT and other statutory provisions affecting the Federal Reserve System, as amended through August
1990. 646 pp. $10.00.
REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM.
ANNUAL

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.
GUIDE TO THE FLOW OF FUNDS ACCOUNTS. 6 7 2 pp. $ 8 . 5 0 e a c h .
FEDERAL RESERVE REGULATORY SERVICE. L o o s e - l e a f ; u p d a t e d

monthly. (Requests must be prepaid.)




COMPUTERS. Diskettes; updated monthly.
Standalone PC. $300 per year.
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Network, maximum 100 concurrent users. $3,000 per year.
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THE U . S . ECONOMY IN AN INTERDEPENDENT WORLD: A MULTI-

COUNTRY MODEL, May 1984. 590 pp. $14.50 each.
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 ANALY-

SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each.

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
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
How to File a Consumer Complaint
Making Deposits: When Will Your Money Be Available?
Making Sense of Savings
SHOP: The Card You Pick Can Save You Money
Welcome to the Federal Reserve
When Your Home is on the Line: What You Should Know
About Home Equity Lines of Credit

A83

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.

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

1989-92

CREDIT CRUNCH

FOR REAL ESTATE,

by

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, b y

Staff Studies 1-157 are out of print.

Gregory E. Elliehausen and John D. Wolken. September
1 9 9 3 . 18 pp.

1 5 8 . THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIREMENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE

1 6 6 . THE ECONOMICS OF THE PRIVATE PLACEMENT MARKET, b y

PRODUCTS, by Mark J. Warshawsky with the assistance of
Dietrich Earnhart. September 1989. 23 pp.

Mark Carey, Stephen Prowse, John Rea, and Gregory Udell.
January 1994. I l l pp.

1 5 9 . N E W DATA ON THE PERFORMANCE OF NONBANK SUBSIDIARIES OF BANK HOLDING COMPANIES, b y N e l l i e L i a n g a n d

1 6 7 . A SUMMARY OF MERGER PERFORMANCE STUDIES IN BANKING, 1 9 8 0 - 9 3 , AND AN ASSESSMENT OF THE "OPERATING
PERFORMANCE" AND "EVENT STUDY" METHODOLOGIES,

Donald Savage. February 1990. 12 pp.
1 6 0 . BANKING MARKETS AND THE USE OF FINANCIAL SERVICES BY SMALL AND MEDIUM-SIZED BUSINESSES, b y

Gregory E. Elliehausen and John D. Wolken. September
1 9 9 0 . 3 5 pp.
161. A

REVIEW

OF CORPORATE

RESTRUCTURING

ACTIVITY,

1980-90, by Margaret Hastings Pickering. May 1991.
21 pp.
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.




by Stephen A. Rhoades. July 1994. 37 pp.
1 6 8 . THE ECONOMICS OF THE PRIVATE EQUITY MARKET,

by

George W. Fenn, Nellie Liang, and Stephen Prowse. November 1 9 9 5 . 6 9 pp.
1 6 9 . BANK MERGERS AND INDUSTRYWIDE STRUCTURE, 1 9 8 0 - 9 4 ,

by Stephen A. Rhoades. February 1996. 32 pp.

A84

Maps of the Federal Reserve System

MINHMPOUSN

O

BOSTON

mm

12

CMOMM

10

K A N S A S C I T Y *

•
4

3 -,INewYork
Q

„
CLEVELAND

-

.

-

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M

S T * L O U I S

PHILADELPHIA

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6 •

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ALASKA
HAWAII

LEGEND

Both pages
•

Federal Reserve Bank city

•

Board of Governors of the Federal
Reserve System, Washington, D.C.

Facing

page

• Federal Reserve Branch city
— Branch boundary

NOTE

The Federal 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 February 1996.

A85

1-A

2-B

3-C

4-D

5-E
Baltimore

V I F /
!

\I

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m

Buffalo

€T

CT

V A H

m

/

wv
# € M o t t e

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BOSTON

NEW YORK

PHILADELPHIA

6-F

RICHMOND

7-G

8-H

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Birmingham

/

Wl

W

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IA

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New Orleans

•Memphis

a.
IN

-M

Miami
ATLANTA

ST. LOUIS

CHICAGO

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MINNEAPOLIS
12-L

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A86

Federal Reserve Banks, Branches,
and Offices
FEDERAL RESERVE BANK
Zip
branch, or facility

Chairman
Deputy Chairman

President
First Vice President

BOSTON*

02106

William C. Brainard
Frederick J. Mancheski

Cathy E. Minehan
Paul M. Connolly

NEW YORK*

10045

John C. Whitehead
Thomas W. Jones
Bal Dixit

William J. McDonough
Ernest T. Patrikis

Buffalo

14240

PHILADELPHIA

19105

Donald J. Kennedy
Joan Carter

Edward G. Boehne
William H. Stone, Jr.

CLEVELAND*

44101

Jerry L. Jordan
Sandra Pianalto

Cincinnati
Pittsburgh

45201
15230

G. Watts Humphrey, Jr.
David H. Hoag
To be announced
To be announced

RICHMOND*

23219

J. Alfred Broaddus, Jr.
Walter A. Varvel

Baltimore
Charlotte

21203
28230

Claudine B. Malone
Robert L. Strickland
To be announced
To be announced
Hugh M. Brown
David R. Jones
To be announced
To be announced
To be announced
To be announced
To be announced

Jack Guynn
Patrick K. Barron

Lester H. McKeever, Jr.
Arthur C. Martinez
To be announced

Michael H. Moskow
William C. Conrad

John F. McDonnell
Susan S. Elliott
To be announced
To be announced
To be announced

Thomas C. Melzer
W. LeGrande Rives

Jean D. Kinsey
David A. Koch
To be announced

Gary H. Stern
Colleen K. Strand

A. Drue Jennings
Jo Marie Dancik
To be announced
To be announced
To be announced

Thomas M. Hoenig
Richard K. Rasdall

Roger R. Hemminghaus
Cece Smith
To be announced
To be announced
To be announced

Robert D. McTeer, Jr.
Helen E. Holcomb

Judith M. Runstad
Gary G. Michael
To be announced
To be announced
To be announced
To be announced

Robert T. Parry
John F. Moore

ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans

30303
35283
32231
33152
37203
70161

CHICAGO*

60690

Detroit

48231

ST. LOUIS

63166

Little Rock
Louisville
Memphis

72203
40232
38101

MINNEAPOLIS

55480

Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
SAN FRANCISCO . . . .
Los Angeles
Portland
Salt Lake City
Seattle

59601
64198
80217
73125
68102
75201
79999
77252
78295
94120
90051
97208
84125
98124

Vice President
in charge of branch

Carl W. Turnipseed1

Charles A. Cerino1
Harold J. Swart1

William J. Tignanelli1
Dan M. Bechter1
James M. Mckee
FredR. Herr1
James D. Hawkins1
James T. Curry III
Melvyn K. Purcell
Robert J. Musso

David R. Allardice1

Robert A. Hopkins
Thomas A. Boone
Martha L. Perine

John D. Johnson

Carl M. Gambs1
Kelly J. Dubbert
Bradley C. Cloverdyke

Sammie C. Clay
Robert Smith, III1
James L. Stull 1

Mark L. Mullinix 1
Raymond H. Laurence1
Andrea P. Wolcott
Gordon R. G. Werkema2

•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; Milwaukee, Wisconsin 53202; and Peoria, Illinois 61607.
1. Senior Vice President.
2. Executive Vice President




Federal Reserve Statistical Releases
Available on the Commerce Department's
Economic Bulletin Board
The Board of Governors of the Federal Reserve System makes some of its statistical releases available to
the public through the U.S. Department of Commerce's economic bulletin board. Computer access
to the releases can be obtained by subscription.

For further information regarding a subscription to
the economic bulletin board, please call (202) 4821986. 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. 1

Flow of Funds

Quarterly




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.
Three booklets on the mortgage process are 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. 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.




Shop . . . The Card You Pick Can Save You Money is
designed to help consumers comparison shop when
looking for a credit card. It contains the results of the
Federal Reserve Board's survey of the terms of credit
card plans offered by credit card issuers throughout the
United States. Because the terms can affect the amount
an individual pays for using a credit card, the booklet
lists the annual percentage rate (APR), annual fee, grace
period, type of pricing (fixed or variable rate), and a
telephone number for each card issuer surveyed.
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 to

A Consumer's
Quids to
Mortgage
Lock-ins

Business
Credit
for
Women,
Minorities, arid
Small B u s i n e s s e s

SHOP

m
The Card You Pick
Can S a v e You Money

Publications of Interest
FEDERAL RESERVE REGULATORY

SERVICE

To promote public understanding of its regulatory functions, the Board publishes the Federal Reserve Regulatory Service, a four-volume loose-leaf 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, BB, and DD,
and associated materials.

GUIDE TO THE FLOW OF FUNDS

ACCOUNTS

A recent Federal Reserve publication, Guide to the Flow
of Funds Accounts, explains in detail how the U.S.
financial flow accounts are prepared. The accounts,
which are compiled by the Division of Research and
Statistics, are published in the Board's quarterly Z.l
statistical release, "Row of Funds Accounts, Flows and
Outstandings." The Guide updates and replaces Introduction to Flow of Funds, published in 1980.
The 670-page Guide begins with an explanation of
the organization and uses of the flow of funds accounts
and their relationship to the national income and
product accounts prepared by the U.S. Department of
Commerce. Also discussed are the individual data
series that make up the accounts and such proce-




The Payment System Handbook deals with expedited
funds availability, check collection, wire transfers, and
risk-reduction policy. It includes Regulations CC, J, and
EE, related statutes and commentaries, 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.
The Federal Reserve Regulatory Service is also available on diskette for use on personal computers. For a
standalone PC, the annual subscription fee is $300. For
network subscriptions, the annual fee is $300 for 1 concurrent user, $750 for a maximum of 10 concurrent
users, $2,000 for a maximum of 50 concurrent users,
and $3,000 for a maximum of 100 concurrent users.
Subscribers outside the United States should add $50
to cover additional airmail costs. For further information, call (202) 452-3244.
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.

dures as seasonal adjustment, extrapolation, and
interpolation.
The balance of the Guide contains explanatory tables
corresponding to the tables of financial flows data that
appeared in the September 1992 Z.l release. These
tables give, for each data series, the source of the data or
the methods of calculation, along with annual data for
1991 that were published in the September 1992 release.
Guide to the Flow of Funds Accounts is available for
$8.50 per copy from Publications Services, Board of
Governors of the Federal Reserve System, Washington,
DC 20551. Orders must include a check or money order,
in U.S. dollars, made payable to the Board of Governors
of the Federal Reserve System.