Full text of Federal Reserve Bulletin : January 1988
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VOLUME 7 4 •
NUMBER 1 •
\
JANUARY 1988
FEDERAL RESERVE
^ a'
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D . C .
PUBLICATIONS COMMITTEE
Joseph R. Coyne, Chairman • Michael Bradfield • S. David Frost
• Griffith L. Garwood • Donald L. Kohn • Michael J. Prell • Edwin M. Truman
The FEDERAL RESERVE BULLETIN is issued monthly under the direction of the staff publications committee. This committee is responsible for
opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Section headed by Mendelle T.
Berenson, the Graphic Communications Section under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles.
Table of Contents
L
DEVELOPMENTS IN THE U.S.
FINANCIAL SYSTEM SINCE THE
MID-1970S
Some of the most profound financial
changes in U.S. history have occurred since
the end of 1976, including new kinds of
investment and credit arrangements that
have been accompanied by derivative instruments such as financial futures, options,
and swaps.
14
31
TREASURY AND FEDERAL
RESERVE
FOREIGN EXCHANGE
OPERATIONS
The dollar came under heavy downward
pressure in mid-August and again in October to close the three-month period under
review down 7 to 8 percent on balance
against major foreign currencies.
38
loans, before the Subcommittee on Consumer Affairs of the Senate Committee on
Banking, Housing, and Urban Affairs, November 18, 1987.
H. Robert Heller, Member, Board of Governors, discusses criminal misconduct and
insider abuse in our nation's financial institutions and says that significant progress
has been made in dealing with these problems, before the Subcommittee ori Commerce, Consumer and Monetary Affairs of
the House Committee on Government Operations, November 19, 1987.
ANNOUNCEMENTS
Announcement of 1988 fee schedules for
services provided by the Federal Reserve
Banks.
Amendment to Regulation Z.
18
20
INDUSTRIAL
PRODUCTION
Industrial production increased an estimated 0.6 percent in October.
Proposals affecting real estate investment
and development activites in a holding company framework.
STATEMENTS
Contract awarded for automated currencyprocessing equipment.
TO CONGRESS
Alan Greenspan, Chairman, Board of Governors, presents the views of the Board on
modernizing our financial system to adapt it
to the important changes in technology and
competition that have already transformed
financial markets here and abroad, before
the Subcommittee on Financial Institutions
Supervision, Regulation and Insurance of
the House Committee on Banking, Finance
and Urban Affairs, November 18, 1987.
27
Martha R. Seger, Member, Board of Governors, discusses the rapid expansion of
home equity lines of credit and says that the
Board shares with the Congress the goal
that consumers receive adequate information when they contract for home equity
40
RECORD OF FOLIC Y ACTIONS OF THE
FEDERAL OPEN MARKET
COMMITTEE
At its meeting on September 22, 1987, all of
the members of the Committee indicated
that they preferred or could accept a directive that called for maintaining the slightly
firmer degree of reserve pressure that had
been sought in recent weeks. With regard to
possible adjustments during the intermeeting period, the members indicated that
somewhat greater reserve restraint or
somewhat lesser reserve restraint would be
acceptable depending on developments relating to inflation, the strength of the business expansion, and the performance of the
dollar in foreign exchange markets, while
also taking account of the behavior of the
monetary aggregates. The contemplated
provision of reserves was expected to be
consistent with growth in M2 and M3 at
annual rates of around 4 percent and around
6 percent respectively, for the four-month
period from August to December. Growth
in Ml was expected to remain relatively
slow over the same period. Because of the
unusual uncertainty relating to the behavior
of Ml and in keeping with the decision not
to set a longer-run target for this aggregate,
the Committee decided to continue the
practice of not specifying a numerical expectation for its short-run growth. The
members agreed that the intermeeting range
for the federal funds rate should be raised
from 4 to 8 percent to 5 to 9 percent.
LEGAL
DEVELOPMENTS
Various bank holding company, bank service corporation, and bank merger orders;
and pending cases.
Ai
A3
A44
A53
FINANCIAL AND BUSINESS STATISTICS
Domestic Financial Statistics
Domestic Nonfinancial Statistics
International Statistics
A69 GUIDE TO TABULAR PRESENTATION,
STATISTICAL RELEASES, AND SPECIAL
TABLES
A76 BOARD OF GOVERNORS AND STAFF
A78 FEDERAL OPEN MARKET COMMITTEE
AND STAFF, ADVISORY COUNCILS
A80 FEDERAL RESERVE
PUBLICATIONS
BOARD
A83 INDEX TO STATISTICAL
TABLES
A85 FEDERAL RESERVE BANKS,
AND OFFICES
BRANCHES,
A86 MAP OF FEDERAL RESERVE
SYSTEM
Developments in the U.S. Financial System
since the Mid-1970s
Thomas D. Simpson, Associate Director, Division of Research and Statistics, prepared this
article. An earlier version of this article was
presented at a conference on The New Financial
System in Madrid, Spain, on October 8 and 9,
1987. The conference was organized by the Fundacion fondo para la Investigacion Economica y
Social and the Fondation Internationale des Sciences Humaines.
Since the mid-1970s, the United States has seen
some of the most profound financial change in its
history. New kinds of investment and credit
arrangements have proliferated at a bewildering
pace, accompanied by derivative instruments
such as financial futures, options, and swaps.
Underlying many of these developments has
been an economy buffeted by inflation and disinflation and by large fiscal and external deficits. At
the same time, competition in the financial marketplace has become more intense, the U.S.
financial system has become more integrated
with those abroad, and some parts of the financial system have been deregulated.
A perspective on this change can be gained by
examining the expansion of debt owed by domestic nonfinancial sectors, shown in table 1. Between 1976 and mid-1987, aggregate debt (line 6)
more than tripled, while the gross national product, a very rough index of the capacity to service
this debt, rose much less. As a consequence, the
ratio of debt to GNP, which had been relatively
stable for most of the postwar period before the
early 1980s, has climbed markedly in recent
years. Pacing the expansion in total debt has
been the indebtedness of the U.S. government
(line 1), which grew nearly %\V2 trillion over the
10!/2-year period, with the bulk of the expansion
occurring during the 1980s. The share of outstanding federal debt held by commercial banks
(line la) fell from about a fifth to only a little more
1. Debt owed by domestic nonfinancial sectors
Billions of dollars
Amount outstanding
Sector
1976:4
1. U.S. government (Treasury)
a. Held by commercial banks
b. Held by others
2. State and local governments
a. Held by commercial banks
b. Held by others
3. Nonfinancial corporations
a. Banks
b. Commercial paper
c. Corporate bonds
d. Other1
1987:2
515.8
105.7
409.1
233.5
99.8
145.6
586.2
171.3
11.0
277.2
127.2
1,873.9
194.4
1,679.5
535.1
127.0 e
408.1
1,767.8
526.5
67.9
714.6
458.8
787.6
2,834.7
322.5
32.8
289.7
851.7
243.9
118.0
125.9
529.4
78.4
2,509.7
1,094.4
67.0
982.4
2,704.6
719.3
317.6
401.7
1,724.2
261.1
7,930.8
1,843.7
136.1
4,457.1
177.9
MEMO
Equity (market value)
4. Farms and unincorporated
businesses
a. Bank loans
b. Mortgages and other
5. Households
a. Consumer debt
Owed to commercial banks
Owed to others
b. Home mortgages
c. Other debt
6. Total domestic nonfinancial debt . . .
MEMO
GNP
Debt as a percentage of GNP
1. Includes mortgages and industrial development bonds,
e Estimated.
than a tenth—implying a massive absorption by
the nonbank public, including foreign purchasers. The rise in state and local debt over this
period (line 2) was less dramatic, again with most
of it accumulated by nonbank holders.
The private sectors—households and nonfinancial businesses—also have been heavy borrowers, especially in recent years. Businesses
(line 3) have tapped commercial banks and the
bond market in volume; also of note is the sharp
rise in commercial paper, a nonbank source of
short-term funds used by a growing number of
firms.
Growth of household indebtedness (line 5),
including mortgages and consumer credit, also
2
Federal Reserve Bulletin • January 1988
has been substantial. A surge in revolving consumer credit—mostly at commercial banks—associated with a proliferation and growing use of
credit cards captured much attention around the
mid-1980s. The trillion-dollar-plus advance in
home mortgages (line 5b) has provided the raw
material for a growing array of mortgage securities; in addition, a portion of the buildup of
mortgage debt has reflected borrowing against
accumulated home equity, a type of credit that
has become popular of late while other forms of
household debt have been losing their tax deductibility.
Because this period of rapid debt expansion
also has been one of unrealized expectations and
severe hardship for many, certain parts of the
financial system, especially in the commercial
bank and thrift (or savings) sectors have experienced severe strains. These strains have been
evident in the earnings performance of the bank
and thrift industries, including massive losses by
many thrift institutions and impairment of the
industry's insurance fund. The financial system
has been responding to financial losses by developing new ways of shifting risk. A better understanding of trends in the U.S. financial system
over the past ten years can be gained by reviewing the overall economic and financial background.
measured by the consumer price index—picked
up in the late 1970s from already advanced
levels; reached a peak of about 13 percent in 1979
and 1980; and then fell off sharply. This inflationary experience profoundly affected the public's expectations of inflation, which were a primary factor in boosting interest rates in this
period and in influencing wage negotiations in the
labor markets. Many consumers borrowed large
sums, which they expected to repay in greatly
inflated dollars: real estate investments, which
had been performing well in the inflationary
setting, were especially favored. In the event,
after 1981, earnings and prices, including real
estate prices, grew much less rapidly than expected, placing debt-servicing strains on many
borrowers.
Fiscal deficits widened sharply in the early
1980s, reaching the $200 billion area (5 percent of
GNP) in the expansion years 1985 and 1986
(chart 2). The resulting pressures on financial
markets are widely thought to have contributed
to the dollar's strength over much of the first half
of the 1980s, and to a worsening current account
position (chart 2). The growing availability of
savings from abroad likely acted to limit upward
2. Current account deficit, federal deficit, and
exchange value of the U.S. dollar
Percent of GNP
ECONOMIC AND FINANCIAL
BACKGROUND
Federal deficit
A major feature of the economic setting over the
past decade or so has been the inflation-disinflation process. As chart 1 shows, inflation—as
Current account
_J
I
I
Index, March 1973 = 100
1. Consumer price index
Exchange value of the U.S. dollar 1
—
1. Growth from fourth quarter to fourth quarter, except for 1987,
when data shown are through the third quarter.
150
1. Index of weighted average exchange value of the U . S . dollar
against currencies of other Group of Ten countries plus Switzerland.
Weights are global trade from 1972 through 1976 for each of the G-10.
Developments in the U.S. Financial System since the Mid-1970s
movements in domestic interest rates. Foreign
sources of funds thus reduced the extent to
which interest-sensitive sectors of the economy,
such as housing and investment, were constrained by resource transfers necessitated by
large fiscal deficits. Conversely, export industries and those competing with imports bore
more of the burden of the adjustment, and
weaker earnings in these industries added to
debt-servicing strains.
The agricultural sector was particularly hard
hit. Prices paid to U.S. farmers over the first half
of the 1980s were depressed by the strong dollar
and enlarged supplies of non-U.S. producers.
Weak output prices contributed to the sharp
decline in farm income. Weaker income, together
with historically high interest rates over much of
this period, placed heavy debt-servicing strains
on farm borrowers and stress on many of their
creditors. A plunge in the value of farmland used
as collateral exacerbated the situation.
Energy producers, especially around the mid1980s, also were adversely affected by external
developments, in particular the decline in oil
prices. Although lower energy prices enabled the
incomes of many borrowers to stretch further,
energy producers experienced a sharp drop in
their earnings and in their ability to service their
debts. Owing to the geographic concentration of
the energy industry, this development contributed to a generalized weakness in the so-called
oil patch, most notably Texas.
BanklQaii$.to several heavily indebted developing countries also have soured. These countries have had difficulties servicing their external
debt because of weak markets for their exports,
high interest costs on these loans over much of
this period, and their macroeconomic and structural policies. While much progress has been
made by these countries as a group, interest
payments on some loans have been disrupted,
and banks in the United States and elsewhere
have made large provisions for losses on developing-country debt.
Meanwhile, debt growth in the household and
business sectors has greatly outpaced income in
recent years (chart 3), adding to concerns about
credit quality. The degree to which the surge in
household debt has strained the household sector
is somewhat uncertain because, in the aggregate,
3
3. Debt ratios
1970
1975
1980
1985
1987
it has for most of this period been accompanied
by a massive buildup of financial assets. Those
household units that have accumulated large
amounts of assets along with debt have built a
cushion in the event that debt-servicing strains
become excessive. The large buildup of debt in
the corporate sector has been associated with a
wave of mergers, acquisitions, and corporate
restructurings, in which equity has been retired
with the proceeds of debt issuance. Corporations
that have increased their leverage in this way are
viewed as more vulnerable to an earnings disruption, although many analysts believe that such
higher levels of corporate leveraging impose
more discipline on management to maximize
earnings from the corporation's assets and
thereby to enlarge the cash flow available for
debt service.
In reflection of the various debt strains, delinquency rates on bank loans have been very high
in recent years (table 2). In particular, farm loan
delinquencies have been on the order of 10
percent or higher. Delinquencies on commercial
and industrial loans, real estate loans, and consumer loans, while distinctly lower than on farm
loans, have been at historically high levels. Loan
charge-offs, which generally follow delinquencies, have risen considerably in recent years,
with increases evident in all major categories.
Downgradings of corporate debt in relation to
upgradings (chart 4) are another indicator of
credit quality in the business sector. Over the
1980s, the number of downgradings has been
very high. Indeed, in the economic expansion
since the 1981-82 recession, an unusually high
number of bonds have been downgraded in that
the number of downgradings typically falls as an
4
Federal Reserve Bulletin • January 1988
2. Delinquency rates at large insured commercial banks, by type of loan1
Delinquent loans as a percent of average amount outstanding, annual rate
19873
1986
19842
19832
Type of loan
Real estate loans
Commercial and
industrial loans ..
Consumer loans
Farm loans
Other loans in
domestic offices 4 .
Loans in foreign
offices
Total
19852
Q1
Q2
Q3
Q4
Q1
Q2
6.61
5.79
5.25
5.46
5.30
5.02
5.19
5.44
5.08
7.39
2.65
10.85
6.18
2.59
11.14
5.59
3.01
9.39
5.55
3.38
12.60
5.72
3.20
12.52
5.79
3.17
10.58
5.52
3.33
10.36
6.45
3.44
13.87
6.33
3.29
12.66
3.78
2.64
2.47
2.22
2.10
2.04
2.03
7.14
6.77
4.95
5.74
5.76
5.11
5.50
4.73
4.62
4.59
4.55
4.55
4.39
4.44
4.52
4.46
n.a.
5.82
n.a.
5.57
5.54
5.01
4.78
4.84
4.79
4.62
4.61
5.72
5.45
MEMO
Total for all banks —
1. Delinquent loans include nonaccrual loans, as well as those past
due 30 days or more and still accruing. These data are for banks with
at least $300 million in assets, except the last row, which is calculated
for all insured U.S.-chartered commercial banks.
2. Figures for 1983, 1984, and 1985 are averages of quarterly data.
3. Series break: Beginning in March 1987, banks report delinquent
loans in domestic offices and foreign offices on a consolidated basis.
Thus, loans previously reported for foreign offices are now included in
loans by type. Also, in contrast to earlier data, which are averages of
quarter ends, first-quarter data for 1987 are calculated on an end-ofquarter basis.
4. Beginning in 1987, includes other loans booked in foreign offices,
n.a. Not available.
expansion matures. In part, downgradings in
recent years have reflected the sharp rise in
corporate leveraging.
Overall, the period since the mid-1970s has
been one of greater interest rate risk. Interest
rate volatility increased greatly at the end of the
1970s—at a time of higher interest rates (chart
5)—an event widely associated with the Federal
Reserve's shift to a reserves-based operating
procedure in October 1979. The objective of the
operating procedure was to obtain tighter control
over the money stock in order to curb inflationary pressures more effectively. A by-product
of this change was more scope for movements in
short-term interest rates. As shown in table 3,
both short-term and long-term rates became
much more volatile beginning in late 1979 and
continuing through the early 1980s. Volatility
diminished subsequently, but it remains above that
of the 1970s. These events heightened the sensitivity of financial market participants to interest
rate risk, leading to many behavioral adaptations
and new financial products—including financial
futures and options. In particular, savings institutions that traditionally had raised short-term
funds to hold long-term assets sought various
ways to control and limit exposure to interest
rate risk; some did so through changes in portfo-
4. Changes in Moody's corporate bond ratings
5. Treasury rates1
Number
Downgrades
V
/
100
/
/
1
150
50
1
1
1
I
1975
1
1
1
1980
1
1
1
1
Data for 1987 plotted through the second quarter.
SOURCE. Moody's Investors Service.
1
1985
i
1987
i
1975
1980
1985
1987
1. Monthly data.
2. Before February 1977, data shown are for 20-year Treasury bonds.
Developments in the U.S. Financial System since the Mid-1970s
3. Interest rate volatility measured as the standard
deviation of daily c h a n g e
Basis points
Period
Treasury bills
(3-month)
Certificates of
deposit
(3-month)
Treasury bonds
(30-year)
1975-79 1 . . . .
1979-82 2 —
1982-87 3
7.1
28.9
8.1
6.0
32.4
8.9
2.7
14.4
8.0
1. September 1975 through August 1979 for 3-month bills and CDs.
For the 30-year bond, the period is September 1977 through August
1979.
2. October 1979 through September 1982.
3. October 1982 through September 1987.
lio management, including the use of interest rate
futures and other hedging instruments.
J< Other developments have had a significant
impact on the financial system since the mid1970s. The deregulation of deposit rates began in
mid-1978, when a new retail deposit instrument,
the six-month money market certificate, was
introduced with a regulatory rate ceiling that
adjusted with rates in the open market. In early
1980, the Congress enacted the Depository Institutions Deregulation and Monetary Control Act,
landmark legislation that mandated the removal
of all interest rate ceilings in an orderly fashion
by April 1986. In practice, rate ceilings were
taken off in stages, with the final measures occurring in early 1986. At present, banks are
prohibited from paying interest only on demand
deposits.
Asset quality problems of U.S. banks have
taken their toll on bank earnings, especially for
some institutions (chart 6). Earnings as a percentage of assets weakened over much of the
1980s, with the erosion being highly pronounced
at the poorer-performing institutions (the lowest
5
5 percent in earnings). In the thrift industry
(chart 7), earnings were depressed in the early
1980s by the adverse movement in interest margins accompanying the sharp rise in rate levels.
Subsequently, the top half of the industry has
recovered, while the poorer earners have slipped
dramatically. The bottom segment of the industry has created extraordinary difficulties for the
Federal Savings and Loan Insurance Corporation, which has recently required legislative action to provide more financial resources to deal
with insolvent institutions.
The earnings problems faced by U.S. banking
and thrift organizations added to their costs of
raising funds in the wholesale markets. Moreover, regulatory policy has shifted toward increased capital requirements for banks and thrift
institutions. As capital requirements have become more binding, banks and thrift institutions
have sought new ways of conducting business
without adding to their assets that are subject to
such requirements and have turned to so-called
off-balance-sheet activities and loan sales.
The increasing sophistication of borrowers and
lenders in the financial marketplace is another
important factor contributing to change in the
financial system. Against the backdrop of the
computer revolution and vast improvements in
telecommunications, investors have become
more aware of alternatives and more sensitized
to differentials in yields and risk, while borrowers have become more aware of alternative borrowing opportunities. Closely related to the
growing awareness of investment and borrowing
alternatives has been a rising level of competition
7. Dispersion of thrift institution earnings
Return on assets, percent
6. Dispersion of commercial bank earnings
Return on assets, percent
_
95th percentile
->
50th percentile
industry average
+
0
5th p e r c e n t i l e ' s ^
1
1975
1
1
1
1
1
1980
1
1
1
1
1
1985
2
1987
Annual data. For 1987, data are for the first half (annual rate).
Annual data for FSLIC-insured institutions. For 1987, data are for
the first quarter (annual rate).
6
Federal Reserve Bulletin • January 1988
in the financial marketplace. In the banking sector, foreign banks have gained a presence in U.S.
credit markets by establishing a large number of
banking offices, mainly in major money centers,
and have aggressively pursued U.S. customers
by emphasizing credit services and offering attractive terms. The number of branches and
agencies of foreign banks has more than tripled
over the past decade, while their share of the
loan market—especially business loans—has
climbed.
Access by businesses to the open markets has
improved over this period, most visibly in the
commercial paper market, which has expanded
several-fold from only about $10 billion outstanding in the mid-1970s. Many borrowers have entered this market, aided by bank credit lines
supporting their paper issuance or by bank standby letters of credit. Also, a growing number of
firms has been able to tap the bond market for
long-term credit as the high-yield or "junk b o n d "
market mushroomed in the mid-1980s.
RESPONSES OF THE
U.S. FINANCIAL
SYSTEM
Against the background of heightened interest
rate and credit risk and growing competition,
financial institutions and markets have responded in many ways, only some of which can
be highlighted in this article. Among the more
important have been the increasing reliance on
futures markets as a means of shifting risk,
generally more prompt adjustment of deposit and
loan rates to changes in open market rates,
off-balance-sheet activities and asset sales by
depositories, and securitization of credit.
Financial
Futures
Activity in financial futures and options has
soared since the introduction of these instruments in the 1970s. The number of contracts and
types of users of these so-called derivative instruments have expanded greatly, contributing to
the sharp rise in trading volume. A great deal of
attention has focused on the markets for financial
futures and options in the wake of the stock
market crash in October 1987. Public scrutiny
has centered on the possible contribution of
these instruments to market volatility—including
the collapse on October 19—while users of these
instruments have been reassessing the degree to
which they satisfy hedging needs, especially in
the event of extreme market turbulence.
Interest rate futures were introduced in 1976
and have figured prominently in efforts to shift
interest rate risk in the more volatile rate environment of the late 1970s and early 1980s. Interest rate futures are one means available to commercial banks and savings institutions to limit
their exposure to interest rate risk associated
with maturity mismatches, traditionally a more
serious problem for thrift institutions, which
have depended on short-term deposits to fund
long-term mortgages. Interest rate futures also
have been used by underwriters of credit market
instruments to limit their exposure to interest
rate risk while they are originating and distributing new issues. Perhaps the major users of interest rate futures, however, have been securities
dealers with large trading-account positions.
While many types of interest rate futures are
available, those on Treasury bills, Eurodollar
deposits, and Treasury bonds have come to
dominate the market. Because the correlation
between prices for these instruments and those
on other securities is less than perfect, market
participants using such futures contracts to cover
positions in other securities are left with some
risk, so-called basis risk. On occasion, hedgers
using contracts in these instruments, especially
futures on Treasury bonds, to cover positions in
other securities, such as mortgage securities,
have incurred appreciable losses owing to differential movements in prices.
Futures and options on stock indexes were
introduced around the time of the advance in
prices of equities in 1982. These instruments
enable market participants to shift the risk associated with generalized market price developments. To many investors, the availability of
futures and options has been viewed as a means
of protecting the value of a portfolio of securities,
so-called portfolio insurance, by selling a futures
contract or acquiring a put option on a stock
price index matching the securities actually held
by the investor. Thus, losses arising from a
market decline can be limited. Others have come
Developments in the U.S. Financial System since the Mid-1970s
to view the futures and options markets as a
low-cost means of participating in general advances or declines in markets; transactions costs
associated with positions in options and futures
typically have been lower than those for cash
positions. As a consequence, price movements
frequently occur in futures and options contracts
before they appear in the cash market; indeed,
many sophisticated arbitrage strategies have
been developed to profit from this disparity.
Particularly controversial have been computerdriven "program trading" strategies involving
the purchase or sale of a diversified basket of
stocks. Some believe that program trading, including arbitrage strategies, has contributed to
stock market volatility in recent years, especially
to the collapse in mid-October 1987. Studies have
been undertaken to examine the causes of that
collapse, with particular emphasis on the role of
portfolio insurance and arbitrage strategies. In
addition, difficulties in getting prompt execution
of orders in the cash market and the apparent
tendency for index futures to trade below comparable prices in the cash market at that time
have led to a reexamination of the use of index
futures and options for hedging or arbitrage by
many in the market.
In principle, financial futures and options have
enabled market participants to shift interest rate
and market risk toward economic units that may
be better positioned and more willing to absorb
it. As previously noted, the availability of financial futures and options probably has encouraged
more underwriting and trading, tending to enhance liquidity and affording borrowers greater
access to the markets. On the other hand, hedgers using these instruments still are left with the
risk that the price of the hedging instrument and
the underlying position being hedged can diverge, especially under turbulent market conditions. In addition, futures and options contracts
enable those who are ill-equipped to handle the
risk to engage more easily in speculation, with
adverse consequences for other participants as
well as for the functioning of the financial markets.
Pricing of Loans
and
Deposits
At commercial banks, the process of deregula
7
tion of retail deposit rates, together with competitive forces, has led to prompter adjustment of
deposit rates to movements in open market rates.
The resulting pressures on costs also have contributed to the faster adjustment of loan rates to
open market rates. This development has been
especially significant for small and medium-sized
banks. Larger banks traditionally have relied
more on wholesale funds and have long been
under more pressure to keep loan rates in alignment with those in the open market: their wholesale borrowing costs, primarily the rates on CDs
and federal funds, tend to move closely with
other open market rates, and their customers
tend to have better access to competing sources
of credit. Before the late 1970s, when the deregulation process began, deposit and loan rates at
small and medium-sized banks moved very little,
even when open market rates swung quite
sharply. Since deregulation began, such rates at
small- and medium-sized banks have become
more responsive to market developments.
The pricing of business loans also became
more directly tied to open market rates over this
period, especially at larger banks. Contributing
to the shift from the prime rate, an administered
rate, to an open market reference rate were
foreign banks that were seeking a market share in
the United States through their branches and
agencies. Today, business loan customers commonly have loan commitments with both prime
and open market base-rate options. In practice,
customers of the money center banks elect loans
with a money market reference rate more often
than they choose prime rate loans, as table 4
shows. In May 1987, only a fifth of business loans
extended by the very large money center banks
4. Pricing of business loan extensions at U.S. banks,
May 1987
Percent of loan extensions
Reference rate
Nine money
center banks
Other large
banks'
Other banks
Prime rate
Federal funds rate...
Other domestic
money market
rate
Foreign rate
Other
21.1
37.7
29.0
25.8
54.0
16.7
25.5
4.3
11.4
20.7
9.4
15.1
12.0
6.2
11.0
1. Banks with assets of about $5 billion or more.
8
Federal Reserve Bulletin • January 1988
were linked to the prime rate, while nearly twofifths were linked to the federal funds rate and
another one-fourth were tied to other domestic
money market rates, such as the CD or Treasury
bill rate. Loans linked to interest rates outside
the United States (including the LIBOR) and
priced in other ways represented only a small
fraction of the total. At other large banks, the
prime-based share is a little larger, and the openmarket-based share, smaller but still well above
that of a decade earlier. Most business loans
made by the smaller banks continue to be tied to
the prime, although market-based lending by
these institutions has become significant.
Meanwhile, some larger banks have sought to
use deregulated retail deposits as a means of
reducing their dependence on wholesale funds.
Retail deposits generally have been viewed as a
more stable source of funds than are wholesale or
managed liabilities, especially at a time when the
availability of funds in the wholesale market
appears to be sensitive to shifts in sentiment
about the strength of banking organizations.
Moreover, some institutions evidently have
viewed the substitution of core deposits for
wholesale funds as a means of lowering interest
costs over the long run; at times, banks have
used their freedom to set retail deposit rates to
bid aggressively for such balances, apparently
expecting to reduce their rates after an introductory period or roll them over at lower rates. For
example, the share of assets funded by retail core
deposits rose appreciably from a very low level
at large money center banks in late 1982, after a
major deregulatory measure that introduced the
money market deposit account, and it has subsequently edged higher.
Viewed somewhat differently, the concern
about the quality of large bank loan portfolios,
heightened since 1982 by events involving developing-country debt, has added to the premium
over open market rates that banks, some highly
vulnerable banks in particular, have had to pay
on wholesale deposits, while also adding to the
attractiveness of federally insured retail deposits.
The added premium that many banks now pay
has put upward pressure on bank costs, and
therefore more high-grade corporate borrowers
have gone directly to the open market for credit.
In essence, the attractiveness of credit offered by
banking organizations has fallen for many premium customers, as open market credit has
become relatively less costly to them.
Capital Requirements,
Standby
Credit, and Loan Sales
Letters
of
In the midst of the profound changes taking place
in the financial system, the capital requirements
on the large banks have been stiffened, in recognition of the increased risk exposure of these
banks and a desire to limit exposure of the
federal deposit insurance fund. Capital requirements for the large banks were tightened both
formally, by specifying a minimum primary capital ratio, and informally, through the examination and applications process. Because off-balance-sheet activities were initially excluded from
formal capital requirements, banks had an incentive to expand such activities in lieu of placing
loans on their books. In particular, standby letters of credit soared from about $40 billion in
1980 to almost $170 billion in 1985 (chart 8) .
Through a standby letter of credit (SLC), a bank
could support the commercial paper, notes, or
bonds of a customer without maintaining the
level of capital that would be required if the
customer's obligation had been booked as a loan.
The market regards the customer's obligation
backed by the SLC much as it regards the bank's
obligation, thereby securing the customer access
to markets on terms comparable with those for
the bank. This development has encouraged the
separation of the credit support function of commercial banks from the funding function. Since
1985, however, the volume of SLCs has leveled
off as regulators have increasingly taken SLCs
8. Standby letters of credit at all
insured commercial banks
Billions of dollars
—150
^
^ 1 0 0
50
—
1
1976
Quarterly data.
I
1
1980
I
1
1
1
1
1985
1
1987
Developments in the U.S. Financial System since the Mid-1970s
into account informally in the examination and
applications review processes, as the credit ratings of some banks deteriorated relative to their
top customers, and as support grew for a proposed risk-based capital standard that would
include such off-balance-sheet activities in the
formal computation of capital requirements. That
proposal took on an international dimension
when authorities of the United States and the
United Kingdom proposed common treatment of
capital standards and, subsequently, when other
nations became involved.
Larger banks also have increasingly originated
loans with a view to selling them or offering
participations. In this way, they can collect origination and servicing fees by advancing credit to
an established customer yet need not hold capital
against it, provided the buyer of the loan does not
have recourse to the bank in the event of default
(through a standby letter of credit or other guarantee). To date, banks—including foreign
banks—presumably with less binding capital requirements have bought a good portion of such
loans sold by large banks. This development
further unbundles the traditional banking relationship by separating the lending function, in
this case into origination and funding components. Although most of these asset sales have
taken the form of business loans, a few banks,
with the aid of investment bankers, have structured sales of automobile loans and other receivables, most notably credit card receivables, in
the form of pass-through participations in a pool
of such claims or bonds backed by receivables.
Adaptations
by Savings
Institutions
Savings institutions better appreciated the extent
of their vulnerability to interest rate risk in the
early 1980s after the rise in the level of interest
rates across the maturity spectrum. This increase
in interest rates quickly added to the cost of
funds at thrift institutions, predominantly for
shorter-term deposits, while returns on holdings
of fixed-rate mortgages did not register a compensating increase. Indeed, under these circumstances mortgage borrowers with relatively low
fixed rates became less inclined to prepay, leading to an even more sluggish upward adjustment
9
of asset returns to the new higher level of market
rates. As a consequence, savings institutions
incurred record losses in the early 1980s and
failures soared.
Many of the surviving institutions have devoted greater effort to managing interest rate
risk. These institutions and their supervisors now
follow more closely their exposure to interest
rate risk by monitoring gaps between the maturities of assets and liabilities. Several methods
have been used to shorten the repricing interval
on assets and to lengthen the repricing interval
on liabilities. One is the adjustable-rate mortgage
(ARM). Such mortgages typically have the same
maturity as the standard fixed-rate mortgage but
carry interest rates that adjust at regular intervals
to a benchmark rate. Commonly used benchmark
rates are the yield on one-year Treasury securities and a published measure of the cost of funds
to savings institutions. The share of conventional
mortgages with adjustable-rate features was onehalf or more of the total originated from mid-1983
to late 1985, a time when initial rates on these
mortgages were low compared with those on
fixed-rate mortgages. Borrowers nonetheless
continue to show a preference for fixed-rate
mortgages. Strong borrower interest in ARMs
has been evident only when rather large rate
differentials between ARMs and fixed-rate mortgages have prevailed, with such differentials enlarged at times by concessionary terms granted
by the lender in the first year of the mortgage.
Moreover, data on refinancings in 1986 and early
1987 indicate that many ARM borrowers are
quick to refinance with fixed-rate mortgage credit
when such rates fall markedly.
Another method used by savings institutions to
shorten the effective maturity of their assets is
the collateralized mortgage obligation (CMO).
The CMO is a multiclass pay-through bond secured by mortgages or mortgage securities. Repayments (including prepayments) are applied to
different classes of bondholders at different rates.
The CMO enables the cash flow from a pool of
mortgages, which is inherently uncertain because
of the prepayment option to be structured into
various broad maturity classes. Savings institutions have found the short maturity classes of
CMOs an attractive form in which to hold mortgage assets because such CMOs have effective
10 Federal Reserve Bulletin • January 1988
maturities more in line with maturities on deposit
liabilities and because they have yields that exceed those on highly liquid money market instruments. Recently, CMOs have been offered with
an adjustable-rate feature, further enhancing the
appeal to many thrift institutions. As noted below, CMO issuance has soared in recent years,
with savings institutions thought to be important
holders of the short maturity classes. In some
cases, thrift institutions retain the shorter maturity classes of CMOs that they themselves issue
while in others they acquire these classes from
other issuers.
Savings institutions also have attempted to
lengthen effective maturities of liabilities. A technique used by many savings institutions is the
interest rate swap, in which the thrift in effect
trades an adjustable-rate obligation—that is, a
regularly repriced obligation—for a fixed-rate
obligation. The overall swap market has grown
dramatically from virtually nothing in the early
1980s to several hundred billion dollars recently,
with savings institutions holding a significant
share of the fixed-rate component.
Savings institutions also compete aggressively
for longer-term retail deposits. In relation to
commercial banks they typically offer a larger
premium for time deposit balances than for more
liquid accounts and generally have been more
successful than commercial banks in attracting
time deposits, despite adverse publicity about
the
financial
condition
of
the
thrift
industry.
Another device recently developed by savings
institutions to reduce risk is the mortgage strip,
in which the interest flow from a pool of mortgages and the principal are divided and sold as
separate interest-only and principal-only securities. For the interest-only security, the average
length of the interest flow depends on the level of
interest rates. As interest rates fall and principal
prepayments pick up, cash flow on the interestonly security declines. Conversely, if interest
rates rise and prepayment activity slows, cash
flow on the interest-only security improves. As a
consequence, the interest-only security is
thought to be a hedge against a rise in market
rates for an institution with a maturity mismatch
in the form of more long-term assets than liabilities. Some thrift institutions reportedly have
acquired interest-only portions of mortgage pools
as a hedge.
Meanwhile, the savings industry has responded to maturity imbalances, higher capital
requirements, and borrower preferences for
fixed-rate mortgages by originating fixed-rate
mortgages for sale. In this way, thrift institutions
can meet customer demands for mortgages and
earn an origination and servicing fee while not
aggravating maturity mismatches or adding to
capital requirements. Fixed-rate mortgages are
sold to other depository institutions but most
often to the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC), two federally related agencies that play a central role in the
secondary mortgage market. These institutions
pool such mortgages and issue pass-throughs, by
which holders receive an undivided interest in
the pool. Savings institutions also swap mortgages for mortgage pass-through securities that
contain the mortgages sold. Pass-through securities are more liquid than the underlying mortgages and can be used as collateral for certain
kinds of borrowing. Another federal institution,
the Government National Mortgage Association
(GNMA), guarantees payments on pass-through
securities issued against pools of federally insured mortgage loans.
Securitization
The securitization of loans, another major recent
development in financial markets, has been most
evident for mortgages. The most prominent instrument is the mortgage pass-through security.
As chart 9 illustrates, mortgage pass-throughs
have grown from miniscule proportions of all
residential mortgage debt in the early 1970s to
about one-third, or $600 billion, in mid-1987. The
strong growth in mortgages in 1985 and 1986 and
borrower preference for fixed-rate mortgages
helped to boost pass-through volume substantially. Federally related mortgage
passthroughs—those guaranteed or issued by
GNMA, FNMA, and FHLMC—account for all
but a small portion of mortgage pass-throughs.
The standardization requirements for underlying
mortgages, the liquidity generated by the size of
Developments in the U.S. Financial System since the Mid-1970s
9. Home mortgage debt outstanding
Trillions of dollars
1. Pools include GNMA, FHLMC, and FNMA pass-throughs only.
the market, and the federal support of the pools
have led to their dominance in the market. Nevertheless, even though such securities are not
viewed as entailing much, if any, credit risk to
investors, they do embody a significant amount
of prepayment risk. As already noted, mortgage
prepayments tend to rise as mortgage rates fall—
reflecting refinancing of existing mortgages and
more turnover of homes—and to decline as mortgage rates increase; this relationship is a relatively loose one, however, and thus the slippages
add to prepayment uncertainty and risk. Consequently, mortgage pass-through yields contain a
premium over federal government securities,
with comparable expected maturities, that reflects such prepayment uncertainty. This premium tends to vary directly with interest rate
volatility.
Mortgage pass-through securities have become
the raw material for various derivative products.
These include the CMOs and interest-only and
principal-only obligations issued by private entities. Such instruments represent an alternative
for dealing with prepayments and prepayment
uncertainty. In view of the complexity of administering mortgage securities—such as assembling
and maintaining records on the underlying mortgages, principal and interest payments, and prepayments—the introduction of these instruments
and development of these markets have been
highly dependent on advances in computer and
information technology.
The concept of the pass-through subsequently
has been extended to other kinds of loans, mainly
automobile loans and credit card receivables.
The latter represent unsecured loans while the
former, like mortgages, are collateralized by the
automobiles being financed; letters of credit have
11
been used to enhance both types of passthroughs. Banks selling off such loans are able to
relieve some pressure on capital positions while
collecting origination and servicing fees. For
such consumer receivables, prepayment uncertainty is minimal, in part because the incentive to
prepay when interest rates change is relatively
small. At present, the amount of securitized
automobile and credit card receivables is rather
small, on the order of $15 billion, mostly in the
form of automobile securities. While banks have
been the only issuers of credit card pass-through
securities, automobile finance subsidiaries are
thought to have a larger share in the securitization of automobile paper.
The term "securitization" has been applied to
much more than pools of mortgages and consumer loans and their derivative instruments.
Some have viewed as securitization the sale of
business loans and the growing reliance on the
commercial paper market by firms that had been
heavily dependent on commercial banks; such
loans and paper may be enhanced by bank
standby letters of credit or loan commitments. In
addition, the growing ability of many lower-rated
firms to tap the bond market as an alternative to
long-term bank financing has been regarded as
securitization. Clearly, the wider availability of
information on such credits and in the case of
low-rated bonds, the recognition of the benefits
of diversification (including through mutual
funds), have reinforced the securitization trend.
Issuance of high-yield (or below-investmentgrade) bonds roughly doubled from mid-1985 to
mid-1987, at a time when investors also absorbed
a larger volume of bonds offered by investmentgrade issuers (see chart 10). The market for
10. Gross issuance of nonfinancial corporate bonds
1983
1985
Quarterly data, not seasonally adjusted.
1987
12
Federal Reserve Bulletin • January 1988
low-grade bonds, however, received a setback
following the mid-October stock market crash—
as investors evidently reassessed the prospects
for debt service in the event of an economic
slowdown or a less favorable climate for asset
sales—and the volume of offerings has fallen
markedly.
Whether
the
market
can
regain its earlier momentum remains an open
question.
As securitized assets work their way into investor portfolios and compete with traditional
securities, the linkage between interest rates on
loans that can be securitized and those on open
market instruments becomes tighter. Not only
does investor behavior directed toward maximizing yield—adjusted for credit, interest rate, and
prepayment risk—act to bring rates on loans that
can be securitized into line, but the originators of
loans and the underwriters of securitized assets
must keep a close eye on yields on competing
assets in investor portfolios when they make
loans or acquire them for securitization. Table 5
illustrates the tightening linkages between the
commitment rate on fixed-rate home loans and
the 10-year Treasury bond yield, a maturity that
is roughly comparable with the expected life of
30-year mortgages. The change in the mortgage
rate measured in basis points in the week following a change in the Treasury yield (standardized
to be a 10-basis-point change) has quadrupled
from the 1975-79 period to the 1986-87 period.
In the late 1970s, the short-run responsiveness of
mortgage rates was minimal: a change of only 2
basis points on average per each change of 10
basis points in Treasury yields. Responsiveness
picked up a little over the first half of the 1980s,
and in the past couple of years, with the surge in
the volume of mortgage pass-throughs, the
change in the mortgage rate climbed to more than
8 basis points on average per change of 10 basis
5. Change in mortgage rate in week after change in
10-year Treasury yield1
Basis points
1975-79
1980-82
1983-85
1986 87
~
2.0
3.2
4.0
82
1. The mortgage rate is the commitment rate on fixed-rate home
loans. Both rates are weekly averages; 1987 observations are through
mid-November.
points in the Treasury rate. In the spring of 1987,
at a time when bond prices plunged in close
association with a plunge in the dollar, stories
abounded of mortgage lenders adjusting their
rates daily, or even more frequently, in conjunction with developments in foreign exchange markets and domestic credit markets.
CONCLUSION
The financial system in the United States has
been affected greatly over the past decade or so
by drastic alterations in the economic setting.
Interest rates have swung widely over this period, in large part reflecting changing inflation
experience and expectations; in addition, interest
rates have come to be viewed as inherently more
volatile than was thought in the mid-1970s. While
the U.S. economy has been expanding steadily
since late 1982 and overall slack in resource
utilization has diminished, debt-servicing strains
on many borrowers have been substantial. These
strains have reflected not only a much-diminished rate of inflation, including that on real
estate acquired as an inflation hedge, but also a
depressed agricultural sector, weakness in the
energy sector, and other imbalances associated
with large fiscal deficits and a massive erosion in
the U.S. net export position. Bank lenders also
have been affected by the debt problems of some
developing countries.
The confluence of these events—resulting to
an important degree from disinflation, global
economic slack, and a strong dollar—clearly was
not envisioned by financial institutions and markets. Nevertheless, it has had a pronounced
effect on attitudes and behavior. Participants in
financial markets generally have become more
aware and sensitive to interest rate and credit
risk. Against this background, a growing array of
financial products have been developed to enable
financial institutions and others to adjust and
shift risk exposure to better suit their preferences
and absorption capacities. The degree to which
risk can be limited through derivative products,
however, has been called into question by events
surrounding the stock market crash in October
1987.
Developments in the U.S. Financial System since the Mid-1970s
Commercial banks and savings institutions
have experienced large loan losses, owing to the
concentration of debt-servicing strains on their
customers. Measures taken by these institutions
in recent years to limit risk exposure are expected to reduce their vulnerability to economic
shocks in the future. The growing use of hedging
instruments is one such development. However,
many of these instruments, especially those involving mortgages and their uncertain prepayments,
contain elements of risk that are not fully known
and may not be fully understood by all users.
The securitization of loans is another method
developed by depository institutions to manage
risk. Commercial banks and savings institutions
have been able to continue to originate and
service credit by selling loans, while avoiding
losses associated with changes in credit or interest rate risk, provided that these loans are not
sold with recourse to the originator. When recourse is provided, however, the capital positions of these institutions and their federal deposit insurance funds are exposed. Also of some
concern are the consequences for bank and thrift
portfolios of selling loans if they represent higher-quality credits. In these circumstances, the
average quality of loans remaining in the loan
portfolios could decline.
13
Federal exposure continues to be important in
the market for mortgage pass-through securities,
the largest area of securitization thus far. Indeed,
i f f t W ^ y j l f l l heightened concern about credit
quality and financial stability, investors §eem to
have sought the protection df a direct or indirect
federal credit enhancement. Nevertheless, many
investors are adding riskier securities to their
portfolios, such as below-investment-grade
bonds. The associated risks of borrower default
are thus passed directly to investor portfolios
rather than to the capital positions of banks and
thrift institutions.
These developments, by affecting the incidence of economic losses and the exposure of the
financial system, may influence spending behavior and the way the economy functions. Spending
behavior may change if economic losses are
absorbed directly into the public's portfolios
rather than being absorbed by the capital positions of banks and thrift institutions. More important, the securitization process has hastened
the effect of interest rate and credit market
developments on loan markets. Moreover, in this
era of tighter integration of U.S. financial markets
with those abroad, international influences on
domestic credit markets, including loan markets,
are growing.
•
!
14
Treasury and Federal Reserve
Foreign Exchange Operations
This quarterly report, covering the period August
through October 1987, provides information on
Treasury and System foreign exchange operations. It was prepared by Sam Y. Cross, Manager of Foreign Operations of the System Open
Market Account and Executive Vice President in
charge of the Foreign Group of the Federal
Reserve Bank of New York.1
The dollar came under heavy downward pressure
in mid-August and again in October to close the
three-month period under review down 7 to 8
percent on balance against major foreign currencies. There were three episodes of U.S. intervention in the exchange markets during this period.
The U.S. authorities intervened first to restrain
the dollar's rise in early August and then to
support the dollar in late August-early September and again in late October.
As the period opened, the dollar was extending
an advance that had begun in late spring. Market
participants had been impressed by official efforts to stabilize dollar rates earlier in the year,
both through heavy intervention and through
coordination of economic policies among the
major nations. The dollar had shown increasing
resilience to potentially adverse developments.
The U.S. external performance finally appeared
to be improving, with U.S. net exports in real
terms rising for three consecutive quarters. The
U.S. economy was relatively bouyant, with output and employment up significantly, especially
in the manufacturing sector. Thus market participants bid for dollar-denominated assets, believing that they offered attractive investment opportunities with limited exchange rate risk.
1. The charts for the report are available on request from
Publications Services, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551.
Meanwhile, the dollar benefited from developments abroad. Doubts persisted that the German
economy had shaken off the weakness so apparent early in the year. Disappointing figures for
German industrial production and employment
stood in sharp contrast with indicators from the
United States and Japan that pointed to a
brighter outlook. Against this background, there
were substantial long-term capital outflows from
Germany during the summer. Also, increasing
hostilities in the Persian Gulf raised the possibility of a disruption of oil shipments, which would
have greater adverse effects on Europe where oil
inventories stood at relative low levels. When, in
addition, reports of a violent riot in Mecca on
August 1 revived interest in the dollar as a safe
haven, the dollar rose abruptly. As it passed its
highs of March against the mark, market participants began to sense that the dollar might advance much further. The demand for dollars
became intense, and commercial and other interests began defensively to bid for dollars.
On August 4, with the dollar's rise against the
mark accelerating, the Trading Desk at the Federal Reserve Bank of New York intervened on
behalf of the U.S. authorities to resist the upward
pressure. In keeping with the Louvre accord, the
U.S. authorities continued to intervene to foster
greater exchange rate stability on subsequent
days, selling a total of $631 million against marks
by August 10. The intervention by the U.S.
authorities was undertaken in cooperation with
the authorities in Germany and other countries.
On August 11, the dollar touched a seven-month
high of DM1.9030 against the mark, up 2V4 percent from the end of July.
On August 14, the report of a U.S. trade deficit
of $15.7 billion for June brought into question the
view that the U.S. trade performance was on an
improving trend. Not only was the deficit larger
than in any previous month in 1987, but also
15
deterioration was pervasive, appearing in every
regional and commodity group. The exchange
market response to this disappointing news was
limited initially. Many market participants temporarily postponed selling dollars in the expectation that the resilience the dollar had shown to
negative news earlier in the summer would reappear, and that they could avoid taking any significant exchange rate loss. But a few days later,
when the dollar failed to show signs of renewed
buoyancy, heavy selling emerged as many market participants perceived that further postponement of dollar sales could expose them to substantial exchange rate risk. A decline in dollar
rates began. By early September the dollar had
declined to lows of ¥140.35 against the yen and
DM1.7880 against the mark, levels not seen since
late spring.
The dollar's decline was accompanied by a rise
in inflation expectations. Although there was
little evidence of a generalized increase in inflation, the U.S. economy was operating at relatively high levels of employment and capacity
utilization, and there were some signs of upward
pressure on materials prices. Against this background, some market participants worried that a
further dollar depreciation would quickly be reflected in price increases for a wide range of
imports and import-competing products. In these
circumstances, U.S. market interest rates, particularly at the long end of the market, moved
sharply upward. Some also argued that U.S.
interest rates would have to be higher to compensate investors for the risk that the dollar
might decline further.
In late August and early September, when
dollar rates moved toward levels that had not
been tested since the period of dollar weakness
of the late spring, the U.S. authorities intervened
on several occasions. The Desk purchased a total
of $389.5 million against Japanese yen on five
occasions between August 24 and September 2.
After the dollar moved through DM1.80 against
the mark on September 2, trading conditions
deteriorated briefly not only in the foreign exchange market but also in the domestic securities
markets, and the Desk purchased $50 million
against marks along with its continuing operations in yen. The Desk's operations in late August and early September were undertaken in
coordination with the Bank of Japan, the German
Bundesbank, and several other central banks.
The announcement of an increase of Vi percentage point in the Federal Reserve's discount
rate to 6 percent on September 4 helped to
interrupt the dollar's decline. This action, which
was undertaken to signal the intent of the Federal
Reserve "to deal effectively and in a timely way
with potential inflationary pressures," helped
reassure market participants. As the month progressed, the dollar benefited in addition from
further increases in U.S. market interest rates.
The dollar also firmed in anticipation of, and then
following, meetings in Washington late in September at which the Finance Ministers and Central Bank Governors of the Group of Seven (G-7)
reaffirmed their commitment to cooperate closely
to foster the stability of exchange rates around
current
levels.
News
that
President
Reagan would sign legislation mandating further
reductions in the U.S. fiscal deficit also encouraged the market's sense of progress in the G-7's
efforts to coordinate economic policies to promote the adjustment of external imbalances.
Against this background, demand for dollars
increased, particularly on the part of some foreign investors who reportedly bought dollars to
remove hedges on their U.S. investments, given
the renewed expectation that the dollar would
remain reasonably stable. Even the report on
September 11 of a U.S. trade deficit for July of
$16.5 billion had only a limited effect on exchange rates. By the beginning of October, the
dollar recovered to DM1.8500 against the mark
and ¥147.60 against the yen.
At the same time, however, market participants began to feel that, in view of the diminished
pressures on exchange rates, foreign monetary
authorities would place more emphasis on other
policy objectives. Officials of both the German
and Japanese central banks had for some time
been publicly emphasizing the importance of
responding promptly to a possible renewal of
inflationary pressures. In both countries, money
supply growth was well above official targets or
projections. In Japan, price rises in equity and
real estate markets were interpreted as indicating
excess liquidity and potential inflationary pressures. Moreover, in both countries the beneficial
effects of declining oil prices and currency appre-
16 Federal Reserve Bulletin • January 1988
ciation on domestic prices were wearing off, so
that price indexes were beginning to tilt upward.
Notwithstanding the continued disappointment
about economic growth in Germany, market participants expected the monetary authorities of
both countries to take advantage of any opportunity to absorb liquidity. As operators moved to
secure their funding needs, long-term interest
rates remained under upward pressure and shortterm interest rates started to rise as well. Then,
Japanese officials announced new curbs on commercial bank lending for the October-December
quarter; rumors began to circulate that the Bank
of Japan would soon raise its discount rate; and
Japan's long-term credit banks raised their prime
lending rate by more than had been expected. In
Germany, the key interest rate on the Bundesbank's repurchase agreements moved progressively to moderately higher levels, from 3.60
percent in mid-September to 3.85 percent by
mid-October, following sharp increases in shortterm money market rates.
As interest rates moved higher abroad, market
participants took the view that, given the commitment to exchange rate stability, interest rates
in the United States must move up at least as
much to maintain sufficient interest rate differentials. In this context, the announcement on October 14 of another large U.S. trade deficit for
August at first had a much more pronounced
impact on securities and equities markets than on
the exchange markets.
But over the following days, the exchange
markets grew more concerned about the lack of
adjustment in the U.S. trade performance and
perceived greater scope for a further downward
movement of the dollar. Then, comments by
Secretary of the Treasury Baker—to the effect
that surplus countries should not raise interest
rates in the expectation that U.S. interest rates
would surely follow, and that the Louvre framework could accomodate further currency adjustments—imparted new uncertainties to the markets. A press article asserting that Secretary
Baker wanted to see the dollar decline was
widely assumed to be true, despite his express
denial of its accuracy. In these circumstances,
some market participants questioned the depth of
international cooperation, and others speculated
that, in the context of the Louvre accord, the
1. Federal Reserve reciprocal currency arrangements
Millions of dollars
Institution
Amount of
facility,
October 31, 1987
Austrian National Bank
National Bank of Belgium
Bank of Canada
National Bank of Denmark
Bank of England
Bank of France
German Federal Bank
Bank of Italy
Bank of Japan
250
1,000
2,000
250
3,000
2,000
6,000
3,000
5,000
Bank of Mexico
Netherlands Bank
Bank of Norway
Bank of Sweden
Swiss National Bank
700
500
250
300
4,000
Bank for International
Settlements
Dollars against Swiss francs
Dollars against other authorized European
currencies
Total
600
1,250
30,100
authorities had decided to let the dollar depreciate to a lower level. Consequently, the dollar,
which had moved down to around the DM1.80
level in the days immediately following the release of the trade figures, moved decisively below this level during the weekend of October 17.
In the turmoil immediately surrounding the sharp
decline in world equity markets on October 19,
dollar rates moved without clear direction as
market participants positioned themselves defensively. The dollar then gained temporary support
from news that Secretary Baker and German
officials had met in Frankfurt and had agreed to
continue economic cooperation under the
Louvre agreement.
But soon strong downward pressure on the
dollar resumed. Press commentary about the
U.S.-German discussions in Frankfurt suggested
that an agreement had been reached on a lower
range for the dollar. In addition, all interest rates
in the United States fell sharply after the stock
market decline, as investors shifted back into
securities with fixed interest rates, particularly
Treasury bills and bonds. While interest rates
abroad also declined, they declined less than
U.S. interest rates so that interest rate differentials favoring the dollar contracted sharply. Later
on, pessimism about efforts to reduce the U.S.
fiscal deficit weighed on the dollar. Also, there
was widespread commentary in the press ques-
Treasury and Federal Reserve Foreign Exchange Operations
2. Net profits or losses ( - ) on U.S. Treasury and
Federal Reserve current foreign exchange
operations 1
Millions of dollars
Period
August 1, 1987October 31, 1987
Valuation profits and losses
on outstanding assets
and liabilities as of
October 31, 1987
Federal
Reserve
U.S. Treasury
Exchange
Stabilization
Fund
92.6
117.2
2,099.9
1,790.7
1. Data are on a value-date basis.
tioning the priority for the United States of
stabilizing exchange rates in view of concerns
that the stock market decline might seriously
weaken U.S. economic activity.
Selling pressure on the dollar became intense
on October 27 when the dollar declined below its
lows of last May against the mark. In order to
resist a further decline in the dollar-mark rate,
the Desk entered the market on behalf of the
U.S. authorities. While these operations for a
time stabilized the rate, the dollar again moved
sharply lower following commentary that the
U.S. authorities were prepared to allow the dollar to decline considerably further. Although the
U.S. Treasury denied that the remarks reflected
U.S. government policies, strong selling pressure
persisted, and the Desk continued to intervene,
operating in yen as well as in marks. Over the
three days, the U.S. authorities bought a total of
$395 million against marks and $65 million
against yen. These operations were conducted in
cooperation with the Bank of Japan, the German
Bundesbank, and other central banks. On October 29, the dollar traded as low as DM1.7220
against the mark, close to its previous all-time
low of eight years earlier, and ¥137.15 against
the yen, its lowest level in 40 years. The dollar
closed the period only slightly higher at
DM1.7275 and ¥138.30, down 7 percent and VA
percent respectively, from levels at the end of
July.
In summary, over the three months U.S. monetary authorities intervened both to sell and to
17
buy foreign currencies. They sold a total of
$899.5 million equivalent of German marks and
Japanese yen. The Treasury and Federal Reserve
intervened in equal amounts. The Treasury sold
$284.75 million equivalent of yen and $165.0
million equivalent of marks. The Federal Reserve sold $169.75 million equivalent of yen and
$280.0 million equivalent of German marks. In
the intervention activity early in the period, the
Federal Reserve and Treasury each bought
$315.5 million equivalent of German marks. The
Federal Reserve also bought from customers
$85.3 million equivalent of Japanese yen during
the period.
From August 1 through October 31, the Federal Reserve and the Treasury's Exchange Stabilization Fund (ESF) realized profits of $92.6
million and $117.2 million respectively. Valued at
exchange rates at the end of October, the valuation gains on outstanding foreign currency balances were $2,099.9 million for the Federal Reserve and $1,790.7 million for the Treasury's
ESF. These valuation gains represent the increase in the dollar value of outstanding currency
assets valued at end-of-period exchange rates
compared with the rates prevailing at the time the
foreign currencies were acquired.
The Federal Reserve and the ESF invest foreign currencies acquired in the market as a result
of their foreign operations in a variety of instruments that yield market-related rates of return
and that have a high degree of quality and
liquidity. Under the Monetary Control Act of
1980, the Federal Reserve is authorized to invest
in securities issued by foreign governments, and
as of October 31, 1987, $980.1 million equivalent
of its foreign currency holdings were invested in
such securities. In addition, the Treasury held
the equivalent of $2,473.5 million of its foreign
currency holdings in such securities as of the end
of October.
On October 30, the Treasury Department
through the ESF joined with several central
banks to provide a multilateral near-term credit
facility totaling $500 million for the Central Bank
of the Argentine Republic. The ESF's portion of
the facility was $200 million. No drawing was
made during the period under review.
18
Industrial Production
Released for publication
November
16
Industrial production increased 0.6 percent in
October, with more than half of the gain related
to an increase in production of motor vehicles.
Revised data now indicate that industrial production was unchanged in September; the total index
for August and July was not revised. At 131.7
percent of the 1977 average, total industrial pro-
duction in October was about 5 percent higher
than it was a year earlier.
In market groups, output of consumer goods
picked up again in October after little change in
September. Auto assemblies, which had been
noticeably depressed in August and September
to annual rates of about 6.0 million units, rose to
a rate of 7.3 million units in October. In additon,
assemblies of both light and heavyweight trucks
Ratio scale, 1 9 7 7 = 1 0 0
All series are seasonally adjusted. Latest figures: October.
19
1977 = 100
Percentage change from preceding month
1987
1987
Group
Sept.
Oct.
July
June
Aug.
Sept.
Oct.
Percentage
change,
Oct. 1986
to Oct
1987
Major market groups
Total industrial production
130.9
131.7
.7
1.2
.3
.0
.6
5.1
Products, total
Final products
Consumer goods
Durable
Nondurable
Business equipment...
Defense and space
Intermediate products...
Construction supplies.
Materials
139.7
138.4
128.4
118.1
132.3
146.6
191.3
144.2
132.4
118.8
141.0
139.9
129.9
122.1
132.8
148.4
192.1
144.6
132.4
119.0
.7
.5
-.1
-2.3
.7
1.8
-.3
1.1
1.8
.8
1.2
1.2
1.3
2.5
.9
1.0
.0
1.2
1.2
1.1
.2
.3
.2
.5
.2
-.1
.7
-.2
-.7
.4
.0
.1
-.6
-2.3
.0
.7
.7
-.4
.2
-.1
.9
1.1
1.2
3.3
.4
1.3
.4
.3
.0
.1
5.1
5.3
4.1
4.5
4.0
6.5
3.5
4.6
4.0
5.1
.0
.0
.0
.7
-1.4
.9
1.3
.3
.5
-.1
5.5
5.2
5.9
5.5
2.0
Major industry groups
135.7
133.6
138.6
101.0
Manufacturing
Durable
Nondurable
Mining
Utilities
136.8
135.3
139.0
101.5
110.8
111.0
.6
.4
.9
.0
-.2
1.2
1.2
1.1
.0
1.6
.1
.1
.1
1.1
1.2
NOTE. Indexes are seasonally adjusted.
increased sharply in October. However, production of home goods—especially furniture and
appliances—fell slightly after having dropped
sharply in the preceding month. The index for
home goods, which had risen rapidly in the last
part of 1986, has declined at an annual rate of
about V/2 percent during the first 10 months of
Total industrial production—Revisions
Estimates as shown last month and current estimates
Index (1977=100)
Month
July
August
September
October
Percentage change
from previous
months
Previous
Current
Previous
Current
130.6
131.0
131.2
130.6
131.0
130.9
131.7
1.1
.3
.2
...
1.2
.3
.0
.6
the year. Outside the consumer goods sector,
production of business equipment increased 1.3
percent further in October; so far this year,
production of business equipment has been rising
about VA percent at an annual rate. In October,
gains were widespread, with an especially large
increase in transit equipment, which includes
autos and trucks for business use. Among intermediate products, construction supplies were
unchanged during the month, but output of supplies for business rose 0.6 percent. Materials
output was little changed in October as a gain in
durables—mainly metals and parts for consumer
durable goods and equipment—was about offset
by declines in nondurable and energy materials.
In industry groups, manufacturing output rose
0.9 percent in October with a gain of 1.3 percent
in durables and a rise of 0.3 percent in nondurables. Mining output increased 0.5 percent, but
production by utilities edged down.
20
Statements to Congress
Statement by Alan Greenspan, Chairman, Board
of Governors of the Federal Reserve System,
before the Subcommittee on Financial Institutions Supervision, Regulation and Insurance of
the Committee on Banking, Finance and Urban
Affairs, U.S. House of Representatives,
November 18, 1987.
It is my pleasure today to present the Federal
Reserve Board's views on modernizing our financial system to adapt it to the important
changes in technology and competition that have
already transformed financial markets here and
abroad. You have set an agenda for a searching
inquiry into the proper organization and functions of depository institutions, and it is important that this work be completed promptly so that
the process of evolutionary development of our
financial system may go forward in an orderly
way. The foundation now being laid in this
committee and in the Senate Banking Committee
provides an historic opportunity to take a crucial
first step that can set our course for the future.
The Board has for some years taken the position that our laws regarding financial structure
need substantial revision. Developments have
significantly eroded the ability of the present
structure to sustain competition and safe and
sound financial institutions in a fair and equitable
way. It is essential that the Congress put in place
a new, more flexible framework.
Recently a great deal of attention has been
focused, properly we think, on revising the laws
that govern our financial structure. The aim of
these proposals is to permit the affiliation of a
broader variety of financial and commercial organizations with banks, while attempting to assure that affiliated banks are not adversely affected by this relationship. Much of this thinking
has now centered on a specific proposal by
Senate Banking Committee Chairman Proxmire
to permit the affiliation of banking organizations
with securities firms that is now prohibited by the
Glass-Steagall Act.
Our own analysis of the broader proposals
leads us to the conclusion that they have many
positive elements that deserve continuing attention, but that it would be appropriate at this time
to concentrate attention on the specific suggestion to repeal the Glass-Steagall Act. It is our
view that this action would respond effectively to
the marked changes that have taken place in the
financial marketplace here and abroad, and
would permit banks to operate in areas in which
they already have considerable experience and
expertise. Moreover, repeal of Glass-Steagall
would provide significant public benefits consistent with a manageable increase in risk. Accordingly, we would suggest that the attention of the
committee should focus on the Glass-Steagall
Act, and we recommend that this law should be
repealed insofar as it prevents bank holding
companies from being affiliated with firms engaged in securities underwriting and dealing activities. We prefer this comprehensive approach
to the piecemeal removal of restrictions on underwriting and dealing in specific types of securities such as revenue bonds or commercial paper. This limited approach would artificially
distort capital markets and prevent financial institutions from assuring benefits to customers by
maximizing their competitive advantage in particular markets.
A very persuasive case has been made for
adoption of the repeal proposal. It would allow
lower costs and expanded services for consumers of financial services through enhanced competition in an area in which additional competition would be highly desirable. It would
strengthen banking institutions, permitting them
to compete more effectively at home and abroad
in their natural markets for credit that have been
transformed by revolutionary developments in
computer and communications technology. It
could be expected to result in attracting more
21
equity capital to the banking industry when more
capital is needed. In sum, the securities activities
of banking organizations can provide important
public benefits without impairing the safety and
soundness of banks if they are conducted by
experienced managers, in adequately capitalized
companies, and in a framework that insulates the
bank from its securities affiliates.
In reaching these conclusions, we are guided
by the principles set down in the Bank Holding
Company Act of 1970, which requires the Board
to consider, in determining the appropriateness
of new activities for bank holding companies,
whether they will produce benefits to the public
such as greater convenience, increased competition, or gains in efficiency. It also asks us to
evaluate whether these gains may be outweighed
by possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking
practices.
These are the principles that the Congress has
set down to guide the evolution of the banking
system. They made good sense then and they
make good sense today. Over the years we have
interpreted these principles to be consistent with
our efforts to promote competitive and efficient
capital markets and to protect impartiality in the
granting of credit, to avoid the risk of systemic
failure of the insured depository system, and to
prevent the extension of the federal safety net to
nonbanking activities. In our view, achieving
these goals is fully consistent with permitting
bank holding companies to engage in securities
activities. In short, in my testimony today I will
explain why we believe that changes in the
Glass-Steagall Act will have major public benefits. I will also explain why we believe that with
the right structure and careful implementation,
the changes in the law that we support can be
accomplished without adverse effects.
The major public benefit of Glass-Steagall
modification would be lower customer costs and
increased availability of investment banking
services, both resulting from increased competition and the realization of possible economies of
scale and scope from coordinated provision of
commercial and investment banking services.
We believe that the entry of bank holding companies into securities underwriting would, in
fact, reduce underwriting spreads and, in the
process, lower financing costs to businesses large
and small, as well as to state and local governments. In addition, participation by bank holding
company subsidiaries in dealing in currently ineligible securities is likely to enhance secondary
market liquidity to the benefit of both issuers and
investors. These, we believe, are important public benefits that will assist in making our economy more efficient and competitive.
Studies of the market structure of investment
banking suggest that at least portions of this
industry are concentrated. The most recent evidence in this regard is provided in the September
report of the House Committee on Government
Operations, which presented data supporting its
conclusion that corporate securities underwriting
is highly concentrated. The five largest underwriters of commercial paper account for more
than 90 percent of the market; the five largest
underwriters of all domestic corporate debt account for almost 70 percent of the market; and
the five largest underwriters of public stock issues account for almost half of the market.
I would emphasize that concentration per se
need not lead to higher consumer costs because
the possibility that new firms will enter a market
may be sufficient to achieve competitive prices.
However, it is just in this regard that the GlassSteagall Act is particularly constraining because
bank holding companies with their existing expertise in many securities activities and their
broad financial skills and industry network more
generally would be the most likely potential
competitors of investment banks if not constrained by law.
It is also important to emphasize that the
changes in the Glass-Steagall Act that we support would be likely to yield cost savings in local
and regional corporate underwriting and dealing
markets. At a minimum, local and regional firms
would acquire access to capital markets that is
similar not only to the access now available to
large corporations, but also to that currently
available to municipalities whose general obligation bonds are underwritten by local banks.
Another area of substantial expected public
benefit is the encouragement of the free flow of
investment capital. Both we at the Board and the
Congress have stressed the importance of im-
22
Federal Reserve Bulletin • January 1988
proving the capital ratios of banking organizations, and it can reasonably be assumed that
expansion of banking organizations into securities markets would make them more attractive
investments. Equally important, banks and securities firms would be free to deploy their capital
over a wider range of activities designed to serve
the public better.
There is another important reason why the
Glass-Steagall Act should be changed. Developments in computer and communications technology have reduced the economic role of commercial banks and enhanced the function of
investment banking. These permanent and fundamental changes in the environment for conducting financial business cannot be halted by
statutory prohibitions, and the longer the law
refuses to recognize that fundamental and permanent changes have occurred the less relevant
it will be as a force for stability and competitive
fairness in our financial markets. Attempts to
hold the present structure in place will be defeated through the inevitable loopholes that innovation forced by competitive necessity will
develop, although there will be heavy costs in
terms of competitive fairness and respect for law
that are so critical to a safe and sound financial
system.
The significance of the technological developments to which I have referred is that the key
role of banks as financial intermediaries has been
undermined. The heart of financial intermediation is the ability to obtain and use information.
The high cost of gathering and using facts in the
past meant that banks and other intermediaries
could profit from their cumulative store of knowledge about borrowers by making significantly
more informed credit decisions than most other
market participants. These other market participants were thus obliged to permit depository
intermediaries to make credit decisions in financial markets and therefore allow bank credit to
substitute for what would otherwise be their own
direct acquisition of credit market instruments.
Computer and telecommunications technology
have altered this process dramatically. The real
cost of recording, transmitting, and processing
information has fallen sharply in recent years,
lowering the cost of information processing and
communication for banks. But it has also made it
possible for borrowers and lenders to deal with
each other more directly in an informed way.
On-line data bases, coupled with powerful computers and wide-ranging telecommunication facilities, can now provide potential investors with
virtually the same timely credit and market information that was once available only to the intermediaries.
These developments mean that investors are
increasingly able to make their own evaluations
of credit risk, to deal directly with borrowers,
and, especially with the increasing institutionalization of individuals' savings, creditors are in a
position to develop their own portfolios and
strategies to balance and hedge risk. Thus, the
franchise of bank intermediation, the core element of a bank's comparative advantage, and its
main contribution to the economic process—
credit evaluation and the diversification of risk—
have been made less valuable by this information
revolution. Examples of new financial products
that have resulted from this technological innovation and that challenge traditional bank loans
abound—the explosion in the use of commercial
paper, the rapid growth of mortgage-backed securities, and the recent development of consumer-loan-backed securities or consumer-receivable-related (CRR) securities. There are many
others. Our concern is that these real changes in
the way that providers of credit utilize financial
intermediaries have reduced the basic competitiveness of banks and that the trend toward direct
investor-borrower linkages will continue.
Banks, of course, have not stood still while
these vast changes were taking place around
them. Indeed, they have responded to the technological revolution by participating in it. Loan
guarantees and other off-balance-sheet arrangements, private placement of corporate debt,
commercial paper placement, loan participations
and sales, and interest rate and currency swaps
are examples. Similarly, the foreign offices of
U.S. banks and their foreign subsidiaries and
affiliates have been actively engaging abroad in a
wide variety of securities activities. These activities include securities that are ineligible in the
United States for banks to underwrite and deal,
such as corporate debt and equity. In the corporate debt market, for example, U.S. banks' foreign subsidiaries served lead roles in underwrit-
Statements to Congress
ings approaching $17 billion in 1986, or about 10
percent of the volume of such debt managed by
the 50 firms most active in the Eurosecurities
market last year. These and other essentially
investment banking activities have permitted
banks to continue to service those customers
seeking to rely increasingly on securities markets. Nevertheless, in their home market, banks
are sharply limited by the Glass-Steagall Act in
competing for the business of acting as intermediaries in the process of providing credit, in the
new financial environment a process that has
been transformed by technological change and
one that is a natural extension of the banking
business.
In short, the Congress should modify the financial structure to conform to these changes. If the
Congress does not act, but rather maintains the
existing barriers of the Glass-Steagall Act, banking organizations will continue to seek ways to
service customers who have increasingly direct
access to capital markets. But banking organizations are nearing the limits of their ability to act
within existing law; and spending real resources
to interpret outmoded law creatively is hardly
wise. Without the repeal of Glass-Steagall,
banks' share of credit markets is likely to decline—as it already has in our measures of shortand intermediate-term business credit. A soundly
structured change in the law will allow financial
markets to serve us better by lowering costs to
users while strengthening financial institutions
within a framework that will protect the financial
integrity of banks.
The basic principles that I outlined at the
outset require us to take into account not only
public benefits but also possible adverse effects,
including unsound banking practices, which
clearly include the concept of excessive risk,
conflicts of interest, impairment of competition,
and undue concentration of resources. These
concerns have been heightened by the unprecedented stock market decline that occurred on
October 19, 1987, and the subsequent market
volatility.
We had reached our decision to endorse repeal
of the Glass-Steagall Act before these events
occurred. When we made our decision, we had
very much in mind that there are risks involved
in underwriting and dealing in securities and we
23
decided that we would recommend the necessary
changes only because we believe that a framework can be put in place that can assure that the
potential risks from securities activities can be
effectively managed. The events since October
19 have not altered our view that it is both
necessary to proceed to modernize our financial
system and that it is possible to do so in a way
that will maintain the safety and soundness of
depository institutions.
The Congress adopted the Glass-Steagall Act
more than 50 years earlier because it believed
that banks had suffered serious losses as a result
of their participation in investment banking. The
Congress also thought that bank involvement in
the promotional aspects of the investment banking business would produce a variety of "subtle
hazards" to the banking system, such as conflicts
of interest and loss of public confidence. In
answer to these concerns we believe that experience has shown that the risks of investment
banking to depository institutions are containable, that the regulatory framework established
in the securities laws minimizes the impact of
conflicts of interest, that the federal safety net
implemented through deposit insurance and access to Federal Reserve credit will avoid the
potential for panic withdrawals from banks if
affiliated securities firms experience losses, and
that banks can be effectively insulated from their
securities affiliates through an appropriate structural framework.
Bank holding company examinations indicate
that U.S. banking organizations have generally
shown an ability to manage the inherent risks of
both their domestic and foreign securities activities in a prudent and responsible manner. Of all
the domestic bank failures in the 1980s, to our
knowledge none has been attributed to underwriting losses. Indeed, we are unaware of any
significant losses in recent years owing to underwriting of domestically eligible securities. For
that matter, research over the past 50 years
concludes, contrary to the Congress' view at the
time, that the securities activities of banks were
not a cause of the Great Depression and that
banks with securities affiliates did not fail in
proportionately greater numbers than banks
more generally.
The investment banking experience of U.S.
24
Federal Reserve Bulletin • January 1988
banking organizations in foreign markets has
been favorable, and their operations have been
generally profitable in the last decade or so. This
is not to say that there have been no problems. In
the mid-1970s some large U.S. banks encountered problems with their London merchant bank
subsidiaries in connection with venture capital
investments and the development of the Eurobond market. More recently, in the post-Big
Bang era, U.S. banks' securities affiliates and
subsidiaries have shared in the transitional difficulties that arose in the London securities market. All of these problems appear to have been in
the nature of "start-up" difficulties rather than
long-term safety and soundness concerns. In
these situations, and even in the perspective of
the unprecedented stock market decline, risks
have been contained and losses have been small
relative to the capital of the bank or the holding
company parent.
Finally, I would note that empirical studies
invariably find that underwriting and dealing are
riskier than the total portfolio of other banking
functions in the sense that the variability of
returns to securities activities exceeds that of the
returns to the combination of other banking
functions. It is also important to note, however,
that the average return to securities activities is
also usually found to exceed the average return
to the combination of other banking functions. In
addition, there is evidence of some potential for
limited diversification gains, or overall bank risk
reduction, for banks being allowed increased
securities powers.
The preliminary evidence on the limited effects
of recent stock market events on securities firms
reinforces several conclusions drawn previously.
First, while securities activities are clearly risky,
the risks can be managed prudently. Second,
securities activities of bank holding companies
should be monitored and supervised in such a
way as to control the risk to an affiliated bank.
Third, the events of recent weeks highlight
the need to have capital adequate to absorb
unexpected shocks and to maintain an institutional and legal structure that minimizes the
degree to which securities underwriting and
dealing risk could be passed to affiliated banks.
As I have stressed, such a system can be established. I would now like to turn to what we
see as the major elements of such a system.
Fundamental to our recommendation on
Glass-Steagall is the view that the safe and sound
operation of banks requires that securities activities involving significant risk be conducted behind walls designed to separate, insofar as possible, the bank from the risks associated with the
securities activities. Let me note at this point,
that some have argued that insulating walls cannot completely protect a bank from the risks of
its affiliates. Management has a natural incentive
in periods of stress to assist endangered components of what it sees as one entity, and depositors
are free to withdraw their funds from the bank if
they perceive—correctly or incorrectly—a threat
to the bank's safety from losses at affiliates. The
task before you is to reduce the risk, taking into
account public benefits relative to the risk, to
acceptable levels. This effort will require clear
rules and a firm expression of public policy that
corporate conduct that passes on the risks of
securities activities to insured depository institutions is unacceptable.
We see two major elements to an approach to
developing a practical insulating structure:
1. The holding company structure should be
used to institutionalize separation between a
bank and a securities affiliate.
2. The resulting institutional fire walls should
be strengthened by limiting transactions, particularly credit transactions, between the bank and
a securities affiliate.
First, we would take maximum advantage of
the legal doctrine of corporate separateness. Under this rule, a separately incorporated company
normally is not held liable for the actions of other
companies even if they are commonly owned or
there is a parent-subsidiary relationship. If effective separation can be achieved, a bank would
not be liable for the actions of its securities
affiliate and the benefits of the federal safety net
would not be conferred on the securities affiliate.
We believe that this goal is most effectively
achieved if securities activities take place in a
direct subsidiary of a holding company rather
than in a bank or a subsidiary of a bank. The
Board has long supported the holding company
framework as the most effective method of accomplishing separation, and it was with these
goals in mind that, in 1984, the Board joined the
Statements to Congress
Department of the Treasury in supporting legislation to use the holding company framework to
broaden the securities and other powers of affiliates of banks. The Board believes that the
holding company approach, reinforced by the
measures I will outline below, has several important advantages over other methods of expanding
the powers of banking organizations. First, any
losses that may be incurred by the securities
affiliate would not be reflected in the balance
sheets or income statements of the bank, as they
would under normal accounting rules if the bank
conducted the securities activities directly or
through a subsidiary of the bank. A bank affiliated with a securities firm through a holding
company structure thereby obtains the advantages of the holding company's diversification
into securities activities without the disadvantages that necessarily flow from the bank conducting the securities activities directly or
through a subsidiary of the bank.
Second, it is difficult, if not impossible from a
practical standpoint, for a bank to avoid assuming responsibility and liability for the obligations
of its direct subsidiaries. Experience has shown
that the direct ownership link between a bank
and its subsidiaries creates a powerful public
perception that the condition of the bank is tied
to the condition and financial success of its
subsidiaries.
Third, because of the direct ownership link
between the bank and its subsidiary, any breach
of insulating walls that may be constructed between the bank and its subsidiary would be more
likely to result in the loss of protection from the
legal doctrine of corporate separateness than
would the same breach in the wall between a
bank holding company and a securities affiliate.
This is simply a function of the fact that there is
no direct ownership link between the bank and
the securities affiliate.
Fourth, separation of a bank and an affiliated
securities firm through a holding company helps
promote competitive equity. Securities activities
that are conducted directly within a depository
institution or in a subsidiary of a depository
institution are much more likely to benefit from
association with the federal safety net through
increased public confidence in securities offerings made by the insured banks and their subsid
25
iaries than would be the case if these activities
were conducted in a holding company affiliate.
Similarly, the holding company technique
would be more effective in minimizing any competitive advantage banks would have in raising
funds because of their association with the federal
safety net and their ability to collect deposits.
The second major element of the separateness
structure is to assure that corporate separateness
fire walls are not impaired and that the risks of
securities activities are not passed on to an
affiliated bank. We suggest several measures to
accomplish this goal:
• Bank lending to, and purchase of assets
from, a securities affiliate should be prohibited.
• Banks should not be able to enhance the
creditworthiness of securities underwritten by a
securities affiliate through guarantees or other
techniques.
• Banks should not lend to issuers of securities
underwritten by a securities affiliate for the purpose of paying interest or principal on such
securities.
• Banks should not be able to lend to customers for the purpose of purchasing securities underwritten by a securities affiliate.
• Appropriate rules should limit interlocks between the officers and directors of banks and
those of affiliated securities firms.
• A securities affiliate should be required to
prominently disclose that its obligations or the
securities that it underwrites are not the obligations of any bank and are not insured by a federal
agency.
• A securities affiliate should be adequately
capitalized.
Under this approach, rules should be put in
place that will prevent use of the credit facilities
of the bank for the benefit of the securities
affiliate, and to this end, in constructing these
walls, a premium should be placed on arrangements that are simple, clear, and easy to apply,
and that will not be subject to erosion by interpretation.
It is with these principles in mind that we
approach one of the most important issues in
separating banks from their securities affiliates—
the question of whether a bank should be able to
lend to or purchase assets from its securities
affiliates. We considered that lending may be
26
Federal Reserve Bulletin • January 1988
appropriate as a way of taking maximum advantage of the synergies that can be achieved between a bank and securities affiliates to the
benefit of customers and that, as we have described here today, securities activities are the
natural extension of the credit facilities provided
by banks. We also considered that rules now
exist limiting the amount of credit that a bank can
provide to an affiliate and requiring that this
lending be at arms-length and adequately collateralized.
Nevertheless, our experience indicates that
these limitations, embodied in sections 23A and
23B of the Federal Reserve Act, do not work as
effectively as we would like and, because of their
complexity, are subject to avoidance by creative
interpretation, particularly in times of stress. On
the other hand, a prohibition on an affiliated
bank's loans to and purchases of assets from its
securities affiliate would sharply limit the transfer
of the risk of securities activities to the federal
safety net and would eliminate one of the key
factors viewed by the courts as justifying
"piercing the corporate veil" between the bank
and its nonbank affiliates— that operations of the
securities affiliate are financed and supported by
the resources of the affiliated bank. For these
reasons, and because of the desirability of having
a clear rule that is not subject to avoidance, we
decided to recommend to you that we have a
simple rule that banks should not be permitted to
lend to, or purchase assets from, their securities
affiliates. A securities affiliate would, however,
be free under our proposal, to borrow from its
holding company parent—an entity that is not
protected by the safety net.
A similar limitation was proposed in the recent
study by the House Government Operations
Committee. We would support only one very
limited exception to this rule. We propose allowing fully collateralized intraday borrowing by a
securities underwriter and dealer from an affiliated bank to support U.S. government and
agency securities clearing operations.
For similar reasons and as I have already
outlined, we would recommend that a bank
should not be able to guarantee or extend its
letter of credit, or otherwise support securities
issued by a securities affiliate. Allowing such
practices would not only raise the question of
competitive fairness, but also would permit a
transferring of the risks of securities activities to
the federal safety net. For the same reasons,
loans to customers for the purpose of buying
securities underwritten by a securities affiliate or
to a company whose securities have been underwritten by a securities affiliate for the purpose of
repaying interest or principal due on such securities should not be permitted. Prohibiting these
transactions will establish a sound fire wall.
Another major purpose of fire walls is to
prevent conflicts of interest that are competitively unfair and that can impair confidence in
banking institutions. As I mentioned, this problem is effectively dealt with by the disclosure
requirements and other provisions of the securities laws. The already built-in protection of these
laws should be strengthened by other provisions.
We would recommend that a securities affiliate
must disclose its relationship to an affiliated bank
and plainly state that the securities it sells are not
deposits and are not insured by a federal agency.
In addition, we should reinforce the requirements of existing law by providing that a securities affiliate cannot sell securities to an affiliated
bank or its trust accounts during an underwriting
period or 30 days thereafter or otherwise sell
securities to the bank or its trust accounts unless
the sale is at established market prices.
We would also recommend that neither banks
nor their securities affiliates be able to share
confidential customer information without the
customer's consent and that a bank cannot express an opinion on securities being sold by its
securities affiliate without disclosing that its affiliate is selling that security. As another step to
prevent conflicts of interest, we would suggest
that a securities affiliate could not sell securities
backed by loans originated by its affiliate bank
unless the securities are rated by an independent
rating organization.
We believe that the fire walls that are proposed
will substantially augment the existing insulation
of banks from affiliates that is now provided by
the Bank Holding Company Act. Besides these
measures, perhaps the best insulator is adequate
capital for both banks and securities affiliates.
Adequate authority should be provided to assure
that holding companies involving banks and securities activities should be adequately capital-
Statements to Congress
27
ized. In particular, investments by bank holding
companies in securities firms should not be permitted if the investment would cause the holding
company to fall below minimum capital requirements.
With these safeguards in place, we do not
believe it is necessary to prevent a bank and a
securities affiliate from jointly marketing banking
and securities products or from using a similar
corporate name. Here we believe that an analysis
of the trade-off between corporate separateness
on the one hand, and taking advantage of the
efficiency and convenience to customers that can
be achieved through coordinated marketing on
the other, indicates that the gains to separateness
would be small and the losses to efficiency would
be high. The requirement of separate names
would be artificial, particularly because securities law disclosure would, in any event, require
an affiliate to inform the users of its services of its
association with a banking enterprise. Similarly,
as I pointed out at the outset, the market for
securities is only an extension of the market for
other banking products and to deny a banking
organization the ability to sell both products
would lose much of the gains for the economy
that we seek to achieve through the association
between the two. Moreover, there would be no
competitive unfairness in this arrangement since
the broad relaxation of the Glass-Steagall requirements that we propose would enable securities firms to own banks as well as bank holding
companies to own securities affiliates.
The important point is whether these measures
would cause the risks of securities activities to be
passed on to banking institutions and to the
federal safety net. As I indicated, the Board
believes that the corporate separateness mea-
sures that we recommend should be put in place
to effectively deal with these problems.
The guidelines that the Congress has established for expansion of banking activities require
a concern for whether expansion of securities
powers will lead to a concentration of resources
in the securities or banking industries. We believe that repeal of Glass-Steagall should have
the opposite effect. As I have stressed today it
will increase the number of viable competitors in
both the banking and securities industries, enhancing competition in both. As a result, we
doubt that the Congress need go beyond the
requirements of the antitrust laws to anticipate a
problem with concentration of resources in the
emerging financial services industry. However,
because we see as one of the major advantages to
repeal to be an expected increase in competition,
and because we could understand anxieties that
this goal might be impaired by a combination of
the largest banking and securities firms, the
Board would not oppose a limited provision
aimed at preventing the largest banking and
securities organizations from consolidating.
We commend this committee for its active role
in considering one of the most important issues
that now faces our financial markets. We
strongly recommend that you adopt legislation to
repeal the Glass-Steagall Act and to put in its
place a new framework allowing the affiliation of
banking organizations and securities firms. We
urge you to allow the moratorium on banking
activities contained in Title II of the Competitive
Equality Banking Act (CEBA) to expire on
March 1, 1988, as the law now provides. We
believe that these measures will ensure a more
responsive, competitive, and safe financial
system.
•
Statement by Martha R. Seger, Member, Board
of Governors of the Federal Reserve System,
before the Subcommittee on Consumer Affairs of
the Committee on Banking, Housing, and Urban
Affairs, U.S. Senate, November 18, 1987.
attention lately. There has been a substantial
growth in this type of credit since 1984, with
outstanding balances totaling approximately $40
billion at the end of 1986. We believe that the
total may now be as high as $70 billion and could
reach $80 billion by year-end.
This rapid expansion in home equity lines is
probably attributable to several factors. For example, the plans have provided consumers con-
I appreciate the opportunity to appear before this
subcommittee to discuss home equity lines of
credit, a subject that has received increased
28
Federal Reserve Bulletin • January 1988
venient access to credit at interest rates that are
relatively low compared with other means of
financing consumer spending. Tax laws phasing
out the deductibility of interest for nonmortgage
consumer debt have made home equity loans
more desirable to tax-conscious borrowers. In
addition, competition among financial institutions to offer diverse financial services to their
customers has resulted in vigorous marketing of
home equity lines, often at low introductory
interest rates and discounted fees.
Recently, the Board and other bank regulatory
agencies changed the reporting requirements for
credit secured by real estate to provide more
complete and accurate information on household
borrowing through home equity lines of credit.
This change should provide more accurate information for an important segment of the market,
and enable us to better gauge the growth of this
type of credit and the effect it is having on other
consumer borrowing.
In addition, the Board has conducted consumer surveys this year to gather information
that will allow us to better understand consumer
usage of home equity lines of credit. These
surveys, which were conducted in March and
April of this year, included 1,300 families, 930 of
whom were homeowners. As of April 1987, 6
percent of the homeowners surveyed had established home equity lines of credit, and an additional 1 percent had applied for these credit lines.
The surveys indicated that consumer awareness
of home equity lines of credit is high. Eighty
percent of all the homeowners surveyed stated
that they were aware of the existence of such
credit plans, although a majority of the respondents who had not yet opened such credit accounts indicated no interest in establishing a
home equity credit line in the future.
The surveys also revealed that those homeowners who had established home equity lines
tended to have higher family incomes, more
equity in their homes, and were younger and
better educated than the average homeowner.
Besides these findings, the surveys showed that,
relative to other types of credit lines, home
equity accounts tended to be for larger amounts,
with the median size of an account approximately $25,000. The most common reasons given
for using home equity accounts were to pay off
other debts and to finance home improvements.
Forty-five percent of account holders had no
balances outstanding on their home equity lines,
while the median amount outstanding for account
holders with unpaid balances was $14,800.
During the past year, the Board has received
inquiries from financial institutions, trade associations, consumer groups, and the Congress concerning home equity lines of credit. Much of the
discussion has focused on the current disclosure
requirements for these loans, and whether these
requirements are adequate. In response to these
inquiries, the Board has been reviewing its current regulatory requirements, with the goal of
ensuring that consumers receive sufficient information before contracting for this type of credit.
POSSIBLE REGULATOR
Y ACTIONS
Since home equity programs are more complex
than other types of open-end credit plans and
pose a greater risk to consumers if they fail to
understand the terms and conditions of the plan,
the Board, like the Congress, is concerned about
whether the existing disclosure requirements under the Truth in Lending Act and Regulation Z
ensure that consumers receive adequate information about these types of loans when they contract for a particular plan.
During the past year, Board staff has been
considering the issue of home equity lending
within the context of Truth in Lending disclosure
requirements. The staff's analysis indicates that
the current regulatory requirements for open-end
credit may not adequately reflect the complexities that are present in most home equity programs. Specifically, the staff has focused on the
content, timing, and format of the disclosures
required under Regulation Z as possible candidates for regulatory change. At this time, our
staff is preparing a proposal that would amend
Regulation Z to address these issues and expects
to present their recommendations to the Board
within a few weeks. Although the review is still
in process, and neither the staff nor the Board
has made any firm decisions about what can and
should be done, I would like to share with you
some of the particular issues we have been
considering.
Statements
Under current requirements, when a home
equity plan is opened, a creditor need only give
general disclosures about how the finance charge
will be determined, what other charges will be
imposed, the security interest being taken, and
the consumer's billing rights. Creditors are not
required to disclose certain items, such as their
right to unilaterally change the terms and conditions of the plan, or the possibility that a balloon
payment may be required as part of the plan. It is
conceivable that Regulation Z could be amended
to require disclosure of these features. There also
may be a need to require more disclosures in
home equity line advertisements. A question
raised in this regard is whether disclosing a
payment term in an advertisement should require
disclosure of other material terms, such as the
annual percentage rate or fees to be charged
under the plan. In considering any additional
disclosure requirements, however, the Board is
guided by the principle that disclosures should
provide consumers with essential information,
without overloading them with less important
information or unnecessarily raising creditors'
compliance costs.
Another area that we have identified as one to
look into concerns the timing of disclosures.
Regulation Z currently permits open-end credit
disclosures to be given anytime before the first
transaction. In the case of home equity lines of
credit, therefore, consumers may not receive
disclosures about the terms and conditions of the
plan until closing. Since many home equity credit
plans involve large application fees and tend to
be more complex than other types of open-end
credit, an argument can be made for requiring
disclosure of the fees, terms, and conditions of
such plans at an earlier time in the credit process.
Finally, concern has been expressed that consumers may not fully understand the terms and
conditions of the programs. This concern may be
due, in part, to the complexity of these plans and
the fact that the underlying contracts could run
several pages in length. Currently, Regulation Z
does not require any special format for open-end
disclosures. As a result, in most cases, the disclosures given for these plans are not segregated
from the contractual provisions or highlighted in
any standard manner. We believe that consumers
should be alerted to the most important terms
to Congress
29
and conditions of the plans for which they contract. To the extent that the current regulatory
requirements fail to meet this goal, it might be
necessary to require that disclosures about these
plans be segregated from other information.
At this point, I would like to mention that at its
meeting in October 1987 the Board's Consumer
Advisory Council generally endorsed the idea of
requiring additional disclosures for home equity
lines in advertisements and in initial account
disclosure statements. The Council also supported the idea of requiring creditors to provide
disclosures for these loans at an earlier stage of
the credit-granting process than is currently required. In addition, Council members saw the
need to have these disclosures highlighted in a
manner that would alert consumers to material
information about the terms and conditions of
these programs.
LEGISLATIVE
PROPOSALS
The subcommittee has asked that we comment
on legislation concerning home equity lines that
was introduced in the House. H.R. 3011, which
was introduced by Congressman Price, would
amend the Truth in Lending Act to establish
additional disclosure and advertising requirements for open-end credit plans secured by the
consumer's dwelling. The bill would change the
requirements concerning the content, timing, and
format of the Truth in Lending disclosures that
are now required for home equity lines of credit.
Currently, the Truth in Lending Act and Regulation Z treat home equity lines of credit like other
types of open-end credit plans. As a result,
creditors only are required to give the disclosures
that I previously outlined. H.R. 3011 would
require creditors to give more extensive detailed
disclosures about home equity loans. For example, it would require more disclosures concerning
the annual percentage rate, including disclosure
of the maximum amount that the rate could
change in a one-year period, and if no limit exists
on annual rate increases, a statement to that
effect. The bill would also add an example, based
on an amount outstanding of $10,000 showing the
payment terms under the plan and would require
creditors to disclose their ability to unilaterally
30
Federal Reserve Bulletin • January 1988
change the terms and conditions of the plan.
These disclosures, among others, would generally have to be given at the time of application,
which is earlier than current requirements, and
would have to be segregated from other disclosures, which is also a departure from current
requirements. H.R. 3011 would also add a new
advertising section to the Truth in Lending Act
for home equity lines.
The Board generally supports the approach
taken in H.R. 3011 to require additional disclosures for home equity plans at an earlier stage of
the credit-granting process. The Board also believes that material information about these plans
should be presented in a manner that will alert
consumers to the most important information
about the cost of their credit transaction. To the
extent that H.R. 3011 addresses these concerns
about the content, timing, and format of disclosures given to consumers, the Board generally
favors the bill's intent.
H.R. 3468, which was introduced by Congressman Schumer, would also amend the Truth in
Lending Act to require additional disclosure and
advertising requirements for home equity loans.
The bill would require certain disclosures to be
given with each home equity application. For
example, creditors would have to disclose more
information about the annual percentage rate and
fees charged under a particular plan, as well as
provide more information about a plan's payment terms. Creditors would also have to give an
example of the periodic payments that would
have been required under the plan over a 15-year
period. The bill would also impose additional
disclosure requirements for advertisements of
home equity loans. Perhaps the most significant
feature of H.R. 3468, however, is the fact that it
would impose additional substantive requirements on home equity loans, such as prohibiting
the establishment of rate floors and payment
schedules that would permit interest-only payments, and prohibiting credit extensions in excess of 75 percent of a dwelling's fair market
value.
As I indicated in my comments on H.R. 3011,
the Board generally supports the idea of increased disclosures for home equity loans. To
the extent that H.R. 3468 would require creditors
to provide consumers with more information
about the cost of a credit transaction, the Board
would generally support this goal. The Board,
however, generally opposes the imposition of
substantive restrictions on a particular loan product absent sufficient evidence that such restrictions are necessary to prevent misleading or
abusive practices. At this time, we are unaware
of any evidence that such practices exist. Moreover, to the extent that imposing substantive
restrictions could affect a creditor's ability to
offer this type of loan product, consumers who
might otherwise enjoy the advantages that such a
product offers could be adversely affected. For
example, H.R. 3468 would prohibit plans that
allow interest-only payments, a feature that
might be attractive to consumers who prefer the
lower monthly payments offered by these plans
and who fully understand that a balloon payment
may result. In addition, the bill would prohibit
rate floors for home equity loans with a variable
rate feature. Such a restriction could adversely
affect a creditor's ability to offer a home equity
product, since creditors have fixed operating
costs that may necessitate their placing limits on
the minimum rate that can be offered to consumers. Moreover, prohibiting creditors from setting
rate floors may be ineffective since creditors may
be obliged to seek alternative sources of revenue
through increased fees and transaction charges,
or through the imposition of higher maximum
interest rates or greater interest rate margins.
The Board, therefore, urges the Congress not to
adopt legislation that might unnecessarily restrict
the offering of products that, in many cases,
benefit consumers, particularly absent sufficient
evidence that such restrictions are necessary to
prevent misleading or abusive practices.
CONCLUSION
I can assure you that the Federal Reserve Board
shares the goal that consumers receive adequate
information at a relevant stage of the creditgranting process when they contract for home
equity loans. We believe that it is particularly
important that consumers understand these programs since they may pose a greater risk because
of their complexity, the large credit lines gener-
Statements
to Congress
31
ally involved, and the possibility of losing one's
home. On the other hand, I want to urge the
Congress not to restrict the terms and conditions
of home equity programs without sufficient evi-
dence of a clear and unequivocal need for such
action.
We look forward to working with you on this
important subject.
•
Statement by H. Robert Heller, Member, Board
of Governors of the Federal Reserve
System,
before the Subcommittee
on Commerce, Consumer, and Monetary Affairs of the Committee
on Government Operations, U.S. House of Representatives, November 19, 1987.
which, of course, required substantial follow-up
efforts by the individual agencies, include the
following:
• The Working Group developed, and then
each of the banking agencies implemented, a
uniform criminal referral form for use by all
financial institutions subject to the regulatory
jurisdiction of the agencies. Based on our initial
experience in using this criminal referral form,
the Working Group recently reviewed and modified it to enhance its effectiveness.
• Each agency has developed, or is in the final
stages of developing, an automated system to
monitor and track criminal referral information
submitted to the agency by its examiners and the
financial institutions that it regulates. The statistical information that will be detailed later was
made possible by the use of the Federal Reserve's new computer system.
• The Department of Justice developed and
implemented the "significant" referral tracking
system. This system keeps track of all referrals
from the regulatory agencies that involve
amounts in excess of $200,000 or in which the
following occur: (1) a senior officer or director of
a financial institution is suspected or (2) there is
concern that an activity might undermine the
integrity of the supervisory process or have
systemic implications.
• Lists of contact persons with responsibilities
for criminal referral, investigation, and prosecution at each of the banking and criminal justice
agencies have been prepared and disseminated
throughout the regulatory agencies' staffs and
those of the FBI and the U.S. Attorneys' Offices.
• Examiner training has been greatly enhanced
through the expansion of the Examination Council's White Collar Crime course and joint FBI
and banking agency training courses that are held
throughout the country. I will discuss these initiatives in greater detail later in my testimony.
• The members of the Working Group are now
developing a series of uniform instructions for all
I welcome the opportunity to appear before you
on behalf of the Federal Reserve System to
discuss criminal misconduct and insider abuse in
our nation's financial institutions. Let me assure
you at the outset that the Federal Reserve shares
this committee's continuing interest in seeing
that necessary arrangements are in place to facilitate the effective detection, referral, and prosecution of white-collar crime involving financial
institutions, arrangements that we hope and expect will also help to prevent such crimes.
In my judgment, many positive steps have
already been taken by federal regulatory and law
enforcement agencies, in large measure in response to the recommendations of this committee, and I want to begin by reviewing them with
you. Thereafter, I intend to discuss what we have
learned from the data on criminal referral and
enforcement actions that we have been collecting
in the past couple of years and then to address
other questions that the committee raised in its
letter inviting me to appear here today.
ACTIONS
TAKEN TO DATE
Actions that have been taken to deal with criminal offenses that involve financial institutions in
large part have been set in motion through the
efforts of the Interagency Bank Fraud Enforcement Working Group, which is comprised of
representatives from each of the federal financial
institution regulatory agencies, the Department
of Justice, the Federal Bureau of Investigation,
and the Farm Credit Administration. The principal accomplishments of this Working Group,
32
Federal Reserve Bulletin • January 1988
agency examiners who are assigned to assist in
criminal investigations to better prepare them for
their duties.
• Guidelines for the Uniform Bank Bribery Act
were developed by the members of the Working
Group in compliance with recent legislation.
• With the encouragement of the Working
Group, the Department of Justice has made
white-collar crime involving financial institutions
a top priority for investigation and prosecution
by the FBI and the various Offices of the U.S.
Attorneys.
I believe this record demonstrates that the
Federal Reserve and the other regulatory and law
enforcement agencies have worked diligently
over the past few years to improve their abilities
to address the problems of criminal misconduct
and insider abuse. These efforts have led to a
dramatic increase in the number of cases—into
the thousands—that have been identified and
referred to the FBI for investigation, and, when
the evidence warrants, to the Offices of U.S.
Attorneys for prosecution. One important result
of the improvements in this process is that a
substantially larger number of criminal cases has
been investigated by the FBI. Despite the concerted efforts of the law enforcement agencies,
however, the very substantial increase in the
numbers of suspected criminal offenses that have
been detected and referred has led to the creation
of a tremendous backlog of cases to be processed
by the FBI and the Department of Justice. Thus,
much remains to be done before it can be said
that the problem of white-collar crime in our
financial institutions has been brought under
effective control, and that will no doubt require
the allocation of additional resources to the task,
particularly at the law enforcement agencies.
SCOPE AND NATURE OF PROBLEMS AT
STATE MEMBER BANKS AND BANK
HOLDING
COMPANIES
As I have indicated, the Federal Reserve has put
in place an automated system to track referrals
from state member banks and bank holding companies. I believe the committee will find of interest a review of this information. While its focus is
on information pertaining to state member banks
and bank holding companies, it will shed light on
the nature of the problems of criminal misconduct or insider abuse that are being encountered
by all regulatory and law enforcement agencies.
As is true for other agencies, our data for state
member banks and bank holding companies
show large increases in the volume of criminal
referrals. During the last few months of 1985
(when the new criminal referral form was introduced and in use for the first time), the Federal
Reserve received only 111 such referrals. But in
1986 the total number of referrals jumped to
1,154; and in the first half of 1987 alone, the
Federal Reserve received 1,044 such referrals. It
is also noteworthy that the number of "significant" referrals that were submitted by the Federal Reserve to the Fraud Section of the Criminal
Division of the Department of Justice has risen
from 18 in the latter part of 1985 to 49 in 1986 and
to 74 so far this year. About one-half of the
significant referrals involve insiders, such as officers and directors; and the other half, outsiders,
such as bank customers.
Cases of insider abuse that do not involve a
criminal offense but instead involve violations of
banking laws, rules, and regulations or unsafe or
unsound practices and are addressed by formal
enforcement actions on our part have also gone
up over this period. Moreover, in keeping with
our objective of focusing a greater part of our
efforts on ridding the system of individuals who
cause harm, an increasing percentage of our total
enforcement actions has been taken against people in their individual capacities rather than
against their banks and holding companies. For
example, the Federal Reserve staff between 1984
and the present date issued 38 suspension, removal, and prohibition orders, compared with
only three such actions in the period from 1980 to
1983.
While the statistics emphasize the growth that
has occurred in the number of problems of criminal misconduct and insider abuse, it is important
to put them in the proper perspective by providing a breakdown of their nature and the extent to
which they have affected banking organizations.
Our data show the following:
1. Out of the total of 2,300 referrals, 80 percent
related to alleged criminal misconduct involving
losses or potential losses of less than $10,000.
Statements to Congress
The vast majority of these small crime-related
referrals involved teller defalcations, credit card
fraud, and mysterious disappearances. An additional 16 percent pertained to losses in the
$10,000 to $200,000 range. Thus, "significant"
referrals, which either involve crimes in excess
of $200,000 or involve senior financial institution
insiders, accounted for about 5 percent of the
total.
2. The 2,300 referrals involving individuals
received by the Federal Reserve since the new
uniform criminal referral form was put into use in
August 1985 were submitted by 255 state member
banks and 29 bank holding companies. Or, put
differently, approximately 23 percent of all state
memuer banks and about one-half of 1 percent of
all bank holding companies filed criminal referrals during this period. I might note that the
relatively low incidence of referrals involving
bank holding companies reflects the fact that
banks, rather than bank holding companies, hold
the majority of liquid assets—particularly cash—
the object of many smaller criminal offenses.
3. Of the 37 state member banks that have
failed since 1984, a review of our records revealed that criminal misconduct was principally
responsible in 5 cases.
Assuming our statistics are generally representative of the experience of all agencies, their
implications are that the great majority of the
cases of criminal misconduct that have been
detected and referred to the FBI and Justice
Department have involved relatively small sums
of money that did not, in any material manner,
affect the safety or soundness of financial institutions. In addition, the great majority of state
member banks and bank holding companies have
not suffered from any instances of criminal misconduct. But, while the cases involving significant offenses constitute a relatively small proportion of all offenses detected, it is important to
remember that their absolute number appears to
have been growing rapidly and that criminal
misconduct and insider abuse have played a
significant role in the failure of some state member banks. Thus, there is obvious need to decisively address the problems.
We would emphasize to the committee that
such actions will require a heavy commitment of
resources. All referrals, large and small, must be
33
processed by the FBI and Offices of U.S. Attorneys, and such processing and the investigative
follow-up, we know from our own experience in
carrying out enforcement actions, place a large
burden on limited staff resources. As just one
example, in a very recent removal action undertaken by the Board, several staff lawyers worked
for a month preparing a suspension case, litigating the action in federal court (with the assistance
of a U.S. Attorney's Office) and finally negotiating a settlement of the matter. While the Board
successfully removed the individual from the
bank where he had caused great harm, the effort
placed a relatively extensive claim on our limited
resources. I am certain that the level of resources
needed to investigate and then prosecute an
individual under the criminal laws in just one
case must be at least as large—a matter that I am
sure representatives from the Department of
Justice can confirm.
Thus, it is clear that the FBI and the Justice
Department are facing a very difficult challenge.
We in the Federal Reserve are prepared to provide our assistance in helping to meet this challenge, and indeed have been providing such
assistance recently. For example, in one case
involving two bank holding companies, two insured banks, an insured federal savings bank,
and 10 insiders, the legal and examination staffs
of the Board and a Reserve Bank uncovered
extensive fraudulent schemes being directed by
the individuals through the bank holding companies. As a first step, our staff convened a meeting
with representatives from the state banking department, the Federal Home Loan Bank Board
(FHLBB), the Office of the Comptroller of the
Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) to coordinate civil enforcement actions, and then they worked with
the FBI and the U.S. Attorney to explain the
complex schemes, which have already lead to the
failure of the savings bank and substantial losses
to the several financial institutions, including a
Federal Land Bank. We expect indictments in
this case very shortly.
In another case, one of our most senior Reserve Bank examiners has been assigned, for the
past 18 months, to assist federal and state prosecutors in connection with the failures of several
state insured thrift associations. To date, the
34
Federal Reserve Bulletin • January 1988
state has won eight convictions of some of the
customers and officers and directors of the financial institutions, and extremely long prison sentences have been set as punishments in recognition of the serious nature of the crimes.
AREAS OF
CONCERN
The committee has asked me to comment on a
number of areas of concern. I will address several of these, but time and space limitations
prevent me from giving in-depth answers to each
of the questions you raised in your letter. We will
provide written responses to all questions not
fully covered in my formal remarks.
THE RIGHT TO FINANCIAL
AND RULE 6(e)
PRIVACY
ACT
The first area involves the Right to Financial
Privacy Act and Rule 6(e) of the Federal Rules of
Criminal Procedure. As Board staff reported to
the committee in response to your October 15
inquiries, we have not found the Right to Financial Privacy Act to be an impediment to the
criminal referral process from the point of view
of individual banks. Out of the 2,300 referrals
received at the Federal Reserve between August
1985 and June 1987, in only one case did a
referring bank fail to identify the name of a
suspect and in only five others did banks limit the
amount of information provided in their forms
because of perceived problems with the Right to
Financial Privacy Act.
The Right to Financial Privacy Act, however,
does place limitations and restrictions on the
banking agencies in their ability to transfer certain information to the FBI and the Department
of Justice. When Federal Reserve examiners find
information in the account records of a bank
customer that relate to criminal misconduct, the
examiners cannot freely provide the information
to the criminal justice agencies. We can, by law,
tell the OCC and the FDIC, but we cannot tell the
FBI without following the cumbersome notification procedures of the Right to Financial Privacy
Act.
A recent case demonstrates this problem. Federal Reserve examiners found extensive evidence of reciprocal loans between a state member bank and the officers and directors of several
other financial institutions in its area. Several
million dollars of poorly documented and apparently fraudulent loans were made by the bank's
president to the officers and directors of the other
banks and thrift associations in return for a like
amount of loans to the president and perhaps
other bank officers and directors. Our examiners
immediately contacted the FBI and the U.S.
Attorney in order to alert them to the problem;
but, we could not relay any account information
without the notification of the bank's insiders or
the issuance of a Grand Jury subpoena. Since
there was no sitting Grand Jury, the FBI could
not act quickly because the notification procedures would have alerted the wrongdoers and
had a negative impact on the investigation of the
fraudulent loans.
Interestingly, in connection with this matter,
the FBI could not provide information about an
important ongoing investigation of the bank's
president to us because of the limitations and
restrictions of Rule 6(e) of the Federal Rules of
Criminal Procedure. Because of these Grand
Jury secrecy rules, we had not been advised
about an extensive investigation of this individual's activities.
The committee should consider whether the
relevant laws need to be amended. With respect
to the Right to Financial Privacy Act, the staffs of
the banking agencies recently completed an interagency package of proposed amendments.
This legislative proposal was approved by the
Board of Governors a few weeks earlier and,
once it has been approved by the other agencies,
it will be submitted to the Congress by all of us.
Simply, the Right to Financial Privacy Act
amendments would permit the free transfer of
information that is lawfully in the hands of bank
examiners, such as through a bank examination,
to the criminal justice agencies.
AVAILABILITY
EXAMINATION
OF REPORTS
OF
The committee is also interested in the recent
proposed amendment to the Board's Rules Re-
Statements
garding Availability of Information that deals
with the release of reports of examination and
inspection of state member banks and bank holding companies to the bank's agents, such as
accountants or counsel. The proposed revision to
the Board's regulations in this area would permit
the routine release of such reports to a bank's or
holding company's agents, if certain procedures
are followed by the financial institutions and the
agents—procedures that are principally designed
to maintain the confidential nature of the reports
of examination and inspection prepared by the
Federal Reserve.
A final version of the regulation has not been
prepared by Board staff because they are still
examining public comments. It seems to me that
the final regulation should enable the accountants
of a financial institution to review the findings of
an examination during the course of an audit and
should make the release of the report as simple as
possible.
I am aware of the letter of October 9,1987, you
sent to us on this matter that recommended that
the regulatory agencies be required to make their
examination reports directly available to the auditors of a banking organization. I will make sure
that your position is given careful consideration
by the Board when it reviews this matter. I might
note in this connection that it is our experience
that almost all independent public accountants
request access to an institution's examination
reports and are routinely granted such access.
AUDITS
The Federal Reserve is well aware of the important role that auditors play in promoting the safe
and sound operation of banks. Their reports
provide needed information to managers and
directors of banking institutions and also to their
creditors and stockholders, thus facilitating the
influence that market discipline can exert on the
operation of institutions. Our examiners also
review the reports of auditors when they begin an
examination.
Most, if not all, banking organizations of medium and larger size, as well as a great many
smaller organizations, employ the service of outside auditors. Most of the very smallest organi-
to Congress
35
zations, on the other hand, rely on internal
auditors to provide needed reports to management and to the directors. While the Board
encourages the use of outside auditors, we are
reluctant to endorse a requirement that all organizations must have an outside audit, because of
the added costs that would impose on smaller
organizations and because, in general, we believe
internal audits can serve adequately the needs of
these smaller organizations. In cases in which
our examiners find internal audit systems to be
deficient, we instruct banks to improve them
and, under appropriate circumstances, to seek
outside audit assistance as well.
EXAMINER
LEVELS
TRAINING
AND
MANPOWER
Since the committee first started its examination
of the problems associated with criminal misconduct and insider abuse, the Federal Reserve, in
cooperation with the other banking agencies, the
FBI, and the Department of Justice, has greatly
expanded its training of examiners to enhance
their abilities to detect, refer, and, when necessary, assist criminal investigations and prosecutions. Between 1985 and this date, more than 25
training sessions of the joint FBI-banking agency
bank fraud course and the Examination Council's White Collar Crime course have been held.
The Federal Reserve has sent more than 100 of
its most senior examiners through these courses
and has provided very experienced examiners
and attorneys to teach them.
With regard to the level of the Federal Reserve's examiner manpower, I am pleased to
report that since the implementation of the Federal Reserve's enhanced supervision program
over the last two years, examiner levels have
increased substantially. We require the annual
examination of all state member banks and the
semiannual examination of all "problem" state
member banks. These additional resources, to
gether with cooperative alternative examination
arrangements we have with state banking agencies, have enabled us to meet our major examination goals.
36
Federal Reserve Bulletin • January 1988
INTERAGENCY SHARING OF INFORMATION
AND COORDINATION WITH LAW
ENFORCEMENT
AGENCIES
The Federal Reserve recognizes the great importance of sharing information with other regulatory agencies and in cooperating with and assisting law enforcement agencies to carry out their
duties. Since the Federal Reserve often takes
enforcement actions against bank holding companies with national and state nonmember bank
subsidiaries, it is particularly important that the
OCC and the FDIC be advised of these actions.
Likewise, information concerning all removal
and prohibition actions taken by the Board is
sent to each of the other federal financial institution supervisory agencies to ensure that the
individual subject to the Board's order does not
reenter the banking industry at another nonFederal Reserve supervised institution.
Information concerning criminal referrals is
shared with the other agencies on a periodic
basis. Our current system for the sharing of
information about all referrals received by the
Federal Reserve is not meant to be a long-term
solution to the problem of disseminating such
information among all of the banking and criminal justice agencies. We are awaiting the implementation of the FBI's Field Office Information
Management System, which is expected to keep
track of all criminal referrals submitted to each of
the banking agencies, correlate the information,
and highlight those repeat offenders who move
from one institution to another after having committed relatively small crimes.
Obviously, in making and following up on
criminal referrals, communication and cooperation among the agencies are vital. Our examination and supervisory staffs have worked closely
with the FBI and the Justice Department and are
not aware of any situations in which these agencies have been dissatisfied with the timeliness
and adequacy of information provided by the
Federal Reserve or our response to requests for
assistance. Within the Federal Reserve System,
it is our policy that all examiners make all
necessary referrals as soon as suspected criminal
activities are uncovered, rather than wait until
the conclusion of an examination. Moreover, the
work papers of our examiners are always main-
tained at their Reserve Banks and are available to
the criminal justice agencies upon request.
ROLE OF
DIRECTORS
The board of directors plays a critical role in
assuring that a banking organization is operated
in a safe and sound manner and is in full compliance with laws and regulations. For this reason,
it has long been a fundamental tenant of the law
and Federal Reserve policy that directors are
accountable for carrying out their legal and fiduciary responsibilities. We have also taken a number of steps to make sure that directors are
properly informed of the condition of their institutions. For example, in accordance with procedures that were implemented under the Board's
recently enhanced supervision program, a senior
official of a Reserve Bank meets with the board
of directors of all problem financial institutions
immediately following the conclusion of the Reserve Bank's examination. In addition, when
informal or formal enforcement action is necessary, the Federal Reserve requires each director
of the institution to sign the supervisory enforcement action.
Finally, upon completion of an examination or
inspection in which significant problems are uncovered, the Federal Reserve sends a summary
report to each director of the institution setting
forth in clear and precise language the nature and
severity of the bank's and bank holding company's weaknesses and the responsibilities of the
directors to take action to correct them.
We have also supported the FDIC in its efforts
to develop guidelines on the responsibility of
directors for overseeing the activities of their
institutions, and the Board recently approved
having the Federal Reserve join with the FDIC
and the OCC in issuing such guidelines. This
action underscores the Federal Reserve's view of
the critical importance of informed and responsible directors for the health of financial institutions.
CONCLUSION
To sum up, we recognize that insider abuse and
criminal misconduct are serious problems that
Statements to Congress
require a timely and effective response by regulators of depository institutions and criminal justice agencies. And, of course, it is also important
to stress the critical role of the directors of such
institutions in assuring that their institutions are
operated in a safe and sound manner and in full
compliance with laws and regulations. I believe
that it is fair to say that we have made significant
progress in dealing with these problems. The
steps I have outlined today have improved our
ability to identify and refer questionable activities in a timely fashion, and we have also
strengthened our ability to assist law enforcement agencies in investigating criminal activities.
The support and encouragement of this committee, it should be pointed out, have been important in our efforts to make these improvements.
37
Moreover, while we recognize that much has
been done, we also know that we have a considerable way to go before we can be fully satisfied
with our accomplishments.
Besides improving our ability to identify and
refer questionable practices, the actions we have
taken should have another benefit. Over time, we
believe that these actions as they are improved
and strengthened, together with our more frequent on-site examination schedule, will increase
the likelihood that perpetrators of questionable
acts will be caught. In the long run, it is our hope
that this deterrent effect will serve to discourage
or prevent the kinds of illegal or questionable
activities that this committee and the regulatory
agencies are working so hard to address.
•
38
Announcements
FEE SCHEDULES ANNOUNCED
FOR
SERVICES OF FEDERAL RESERVE
BANKS
The Federal Reserve Board announced on November 9, 1987, the 1988 fee schedules for services provided by the Reserve Banks. The majority of the 1988 fees are the same as those
currently imposed, and they become effective
January 1, 1988.
The fee schedules apply to check collection,
automated clearinghouse, wire transfer of funds
and net settlement, definitive safekeeping, noncash collection, and book-entry services for nonTreasury securities. Fee schedules for the check
collection service will be distributed by the Reserve Banks; fee schedules for the remaining
services are available from Publications Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551.
In 1988, total costs for priced services, including the Private Sector Adjustment Factor
(PSAF), are projected to be $647.1 million. Total
revenue is estimated at $658.8 million, resulting
in a recovery rate of 101.8 percent. However, the
recovery rate for wire transfers of funds and net
settlement services may be lower due to additional expenses associated with improving services and implementing new contingency backup
arrangements.
As a result of the Expedited Funds Availability
provision in the Competitive Equality Banking
Act, Reserve Banks will offer beginning September 1, 1988, new services to speed the return of
unpaid checks. The costs and revenues associated with these services are not included in the
1988 check collection fees.
At the same time, the Board approved the 1988
PSAF for Reserve Bank priced services of $76.2
million—an increase of 7.5 percent over the 1986
level. The PSAF is an allowance for the taxes
that would have been paid and the return on
capital that would have been provided had the
Federal Reserve's priced services been furnished
by a private business firm.
REGULATION
Z:
AMENDMENT
The Federal Reserve Board approved on November 6, 1987, a final rule that amends Regulation Z (Truth in Lending) to implement a provision of the Competitive Equality Banking Act of
1987 regarding adjustable-rate mortgage caps.
The amendment requires creditors that offer
adjustable-rate mortgages, for both open- and
closed-end credit, to set a limit on the maximum
interest rate that may be charged. Determination
of the maximum rate is within the creditor's
discretion.
The amendment applies only to closed-end
transactions (such as a traditional second mortgage) or open-end plans (such as home equity
lines of credit) entered into on or after December
9, 1987, the effective date of the law. Under the
amendment, creditors are required to specify in
their credit contracts the maximum interest rate
that may be imposed during the term of the
obligation.
PROPOSED
ACTIONS
The Federal Reserve Board requested comment
on proposals affecting real estate investment and
development activities in a holding company
framework. Comment was requested by December 4, 1987, on whether the Board, in evaluating
bank holding company proposals, should prohibit banks and savings banks in a holding company from engaging in real estate and development activities and whether these activities
should be confined to nonbank subsidiaries of
bank holding companies.
The Board also requests comment on (1)
39
whether member banks, not in a holding company system, should be subject to interaffiliate
lending restrictions and (2) whether the Board
should impose special capital requirements on
real estate subsidiaries of holding company
banks.
CONTRACT AWARDED FOR AUTOMATED
CURRENCY-PROCESSING
EQUIPMENT
The Federal Reserve announced on November
30, 1987, the award of a contract for the manufacture of new automated currency-processing
equipment that is expected to meet the nation's
needs through the rest of this century.
Acting on behalf of the 12 Federal Reserve
Banks, the Federal Reserve Bank of Cleveland
awarded the contract to Recognition Equipment,
Inc. of Irving, Texas, to provide a second-gener-
ation system that will replace current equipment.
The first unit is to be delivered in two years.
The $39.5 million contract was approved by
the Board of Governors. The equipment counts
and sorts currency, detects counterfeit, and destroys unfit currency by shredding. The increased speed of the second-generation equipment and the automation of functions previously
done by hand will contribute substantially to a
reduction in the cost of processing currency and
will increase the productivity of the cash operations areas in the Reserve Banks.
Among the expected advantages of the secondgeneration equipment are a reduction of 40 percent in labor costs; an increase of 20 percent in
output; improved accuracy, fitness, authentication detectors, and security; and reduction in the
size of shredded material to facilitate disposal.
The purchase is a major step in a continuing
effort by the Federal Reserve Banks to reduce
the cost of providing the public with fit currency.
40
Record of Policy Actions of the
Federal Open Market Committee
MEETING
HELD ON SEPTEMBER
Domestic
Policy
22,1987
Directive
The information reviewed at this meeting suggested that economic activity was expanding in
the current quarter at a pace similar to that in the
first half of the year. Output and employment
appeared to have registered solid gains in the
third quarter, with particular strength in the
industrial sector of the economy. On the spending side, outlays for consumption and business
equipment have risen noticeably this quarter, but
construction has been weak. Price advances
have eased in recent months after a sharp rise
earlier in the year, and wage increases have
remained subdued.
Industrial production rose further in August
after large gains in other recent months; the
August level was more than 7 percent (annual
rate) above the second-quarter average. Business
equipment and materials have been the strongest
components of industrial output in recent
months, but advances have been widespread
among major market groupings.
Nonfarm payroll employment increased again
in August; although the gain was half the size of
the July increase, the average change in the two
months was close to the pace of the first half of
the year. The average workweek also rose in
August and, coupled with the employment gains,
pushed up aggregate hours of production and
nonsupervisory workers significantly. Hiring remained strong in services, but employment leveled off in manufacturing after a large gain in
July. The unemployment rate was unchanged at
6.0 percent in August, about three-quarters of a
percentage point lower than at the beginning of
the year.
Retail sales have increased considerably in
recent months. Auto sales have been boosted by
end-of-model-year discounts and financing incentives. However, a considerable decrease in domestic car sales in the first ten days of September
suggested that the effectiveness of the incentive
programs might be waning. Retail spending on
consumer goods excluding autos and gasoline
continued to advance at a moderate pace in July
and August to a level slightly above the secondquarter average. Housing starts edged down to
an annual rate of 1.58 million units, as a decline
in single-family starts more than offset some
increase in multifamily construction. The run-up
in mortgage interest rates during April and May
has damped housing demand, as reflected in the
reduced pace of housing starts and sales in recent
months. Multifamily starts have remained close
to the average rate in the second quarter but
substantially below that recorded during the first
three months of the year. Business fixed investment appeared to be strengthening, particularly
for equipment. In July, shipments of nondefense
capital goods were 2Vi percent above the secondquarter average, and orders for these goods rose
substantially in recent months. Spending for nonresidential structures has continued to trend
lower, albeit at a slower rate than over the past
couple of years, partly because of renewed
strength in petroleum drilling. Inventories in midsummer appeared to be moderate in most segments of the nonfarm business sector. At auto
dealers, the quickened selling pace in August,
combined with scaled-back production, reduced
inventories to more comfortable levels. For retailers other than auto dealers, stocks increased
at a relatively slow rate, and the inventory-sales
ratio edged down in August. As a result of the
apparently conservative inventory stance in manufacturing, factory stocks have remained generally lean, with the July inventory-shipments ratio
near its lowest point in the current cycle.
Preliminary data suggested that the nominal
41
U.S. merchandise trade deficit was essentially
unchanged in July from its June level despite
substantial increases in the quantity and prices of
oil imports. However, the July deficit was larger
than the second-quarter average. In real terms,
the second-quarter deficit on goods in the GNP
accounts narrowed only slightly further because
a rebound in the quantity of oil and non-oil
imports largely offset a substantial rise in the
quantity of exports. The surplus on services in
the GNP accounts narrowed in real terms. The
average pace of economic growth in the major
foreign industrial economies increased in the
second quarter after a very weak first quarter. A
rebound in German GNP in the second quarter
reversed a first-quarter decline but left GNP no
higher than its third-quarter 1986 level. Real
GNP also resumed growing in the second quarter
in France and Italy, while real GNP in Canada
and the United Kingdom showed continued
strength. In Japan, real GNP did not grow in the
second quarter on average as a more rapid rise in
domestic demand was offset by the negative
contribution of the external sector; however,
industrial production picked up in June and July.
While cumulative surpluses in the trade and
current accounts of Japan and Germany for the
year to date remained at or near a record rate,
data for recent months indicate some adjustment,
especially for Japan.
Price increases have eased in recent months;
the CPI and PPI for finished goods both rose 0.2
percent in July, and the August PPI was unchanged. The deceleration in these price measures from the pace in the first half of the year
largely reflected a downturn in food prices and
smaller energy price increases. Producer prices
for finished foods fell sharply in August, and
although the effect of rising oil prices continued
to be evident, declines in both spot and contract
prices were likely to damp retail energy prices by
early autumn. Excluding food and energy, the
CPI rose in July at around the reduced pace of
the second quarter and the comparable PPI increased moderately over the first two months of
the current quarter.
At its meeting on August 18, the Committee
adopted a directive that called for maintaining
the existing degree of pressure on reserve positions. The members decided that somewhat
greater reserve restraint would, or slightly lesser
reserve restraint might, be acceptable depending
on indications of inflationary pressures, the
strength of the business expansion, developments in foreign exchange markets, as well as the
behavior of the monetary aggregates. M2 and M3
were expected to grow at annual rates of around
5 percent from June through September, while
growth in Ml was expected to pick up from the
much reduced pace of recent months. The intermeeting range for federal funds was left unchanged at 4 to 8 percent.
Total and nonborrowed reserves resumed expansion in August, primarily because of higher
levels of excess reserves. In the maintenance
period after the August meeting, federal funds
generally traded in a 6V2 to 63A percent range,
though the rate moved a bit higher around the
end of August when markets began to expect that
the System would tighten policy. In light of the
potential for greater inflation, associated in part
with weakness in the dollar, a decision was made
in early September to reduce marginally the
availability of reserves through open market operations. On September 4 the discount rate was
raised from 5V2 percent to 6 percent. After the
discount rate increase, federal funds traded
mainly in the 7 to 7lA percent area. In the two
maintenance periods completed since the August
meeting, adjustment plus seasonal borrowing
averaged about $530 million.
Other interest rates rose substantially over the
intermeeting period. Market interest rates moved
up early in the period amid pressures on the
dollar, concerns about inflation, and expectations of policy-firming actions by the Federal
Reserve. Rates rose further after the increase in
the discount rate, particularly short-term rates;
also, commercial banks raised the prime rate by
Vi percentage point. On balance, market rates
were up Vi to 3A percentage point over the
intermeeting period. Most stock price indexes
reached new highs in late August but subsequently retreated to levels 2Vi to 6 percent below
those at the time of the August meeting.
The weighted-average foreign exchange value
of the dollar in terms of the other G-10 currencies
declined about 2Vi percent in the weeks immediately following the August meeting. The main
factor in the dollar's depreciation appeared to be
42
Federal Reserve Bulletin • January 1988
greater pessimism about the pace of adjustment
of external imbalances, following the release of
U.S. merchandise trade data that were worse
than market participants had expected. Moreover, prospects for growth abroad relative to that
in the United States suggested only a limited
contribution from this source to external adjustment. The dollar rose somewhat later in the
period after the increase in the discount rate,
reducing its net decline over the intermeeting
period to about IV2 percent.
Growth in the monetary aggregates increased
in August from the sluggish pace of previous
months. The acceleration of M2 in August partly
reflected faster growth in its Ml component as
the runoff in demand deposits ended and the
growth of other checkable deposits accelerated
slightly. The strongest growth among nontransactions components of M2 occurred in RP liabilities at banks, which rose sharply in association
with a surge in acquisitions of Treasury securities
for trading accounts, and in money market mutual funds. Bolstered by the expansion in M2 and
by faster growth in managed liabilities, M3 expanded at a IV2 percent annual rate in August.
Over July and August the broader monetary
aggregates increased at annual rates of 4 to 5
percent, and for the year through August their
cumulative growth remained below the low ends
of their target ranges for 1987, with M2 substantially below its range.
The staff economic projections had changed
only marginally since the August FOMC meeting. Somewhat stronger growth was anticipated
over the near term, but real GNP still was
expected to expand at a moderate rate through
the end of 1988. Improvement in the external
sector was projected to provide substantial impetus for real growth as changes in the foreign
exchange value of the dollar boosted U.S. exports and damped import growth. In contrast,
growth in domestic spending would probably be
relatively subdued. Rising import prices associated with the fall in the value of the dollar were
likely to limit increases in real income and consumer spending; budgetary pressures probably
would constrain government purchases; and rising mortgage rates and high vacancy rates were
expected to damp construction activity. As in
previous forecasts, inflation was projected to
moderate in the second half of 1987, but to move
back up in 1988, reflecting pressures from rising
import prices. Moreover, with the civilian unemployment rate projected to edge lower, the
pickup in prices was expected to push up labor
costs and compensation gains next year.
In the Committee's discussion of the economic
situation and outlook, members commented that
current indicators of business activity were generally favorable and pointed on balance to continuing expansion at a moderate pace. A number
of members believed that any deviation from
current expectations was likely to be in the
direction of faster growth. However, some saw
factors in the outlook that would be likely to
restrain any potential for a substantially stronger
expansion, and one view stressed the vulnerability of the expansion to a slowdown. With regard
to the outlook for inflation, members noted that
developments in financial markets suggested
some buildup in inflationary expectations, but
they also stressed that there was no current
evidence of an upturn in broad measures of
inflation. Nonetheless, several expressed concern about the risks of some intensification in
price and wage pressures. Others saw greater
prospects that the rate of inflation might hold
around current levels or possibly decline.
In their discussion of specific developments
bearing on the outlook for domestic business
activity, members observed that key economic
indicators provided evidence of appreciable momentum in the business expansion. Individual
members also reported that local business conditions appeared to be strengthening in many parts
of the country, although recovery in some previously depressed areas or sectors of the economy
was still quite modest or tentative, with current
activity still well below earlier peaks. It was
suggested that the expansion could be characterized currently as better balanced than earlier,
with favorable implications for its sustainability.
At the same time, some members believed that
the risks of appreciably more rapid expansion
were relatively limited in the context of considerable progress in reducing the federal budget
deficit, restrained monetary expansion, and an
increased level of interest rates. Some members
also noted that increasing domestic demands and
the prospects for improvement in the foreign
Record of Policy Actions of the FOMC
trade balance had greatly reduced the odds of a
shortfall in the expansion from current expectations.
The members continued to view the very large
deficits in the federal budget and in the foreign
trade balance as issues of fundamental concern.
Although a great deal of progess had been made
in reducing the federal deficit in the current fiscal
year, the outlook for needed further progress was
uncertain. The trade deficit also had improved in
real terms, though not in nominal terms, over the
course of recent quarters. The members generally expected at least some progress to be made
on the latter basis as foreign trade patterns and
prices were adjusted over time to the reduced
value of the dollar in foreign exchange markets.
However, the timing and extent of such improvement remained subject to considerable uncertainty, and differing views were expressed regarding the most likely prospects for net exports
and the underlying pressures on the dollar. The
members agreed that the vigor of the domestic
expansion would depend to a substantial extent
on foreign trade developments. Some members
noted that with shrinking margins of excess capacity in labor markets, overall domestic demands would need to remain relatively moderate
to provide room for growth in export production;
in that regard continuing progress in reducing the
federal budget deficit was essential.
Turning to the outlook for inflation, members
commented that the sharp decline in unemployment this year together with anecdotal evidence
of labor shortages in many areas of the country
had not triggered any general increases in wage
rates thus far. Additionally, the members did not
see in recent indicators any evidence of an upturn in the general level of prices. However,
several expressed concern that the economy
might have reached the point where employment
and production levels would tend to be associated with stronger pressures on wages and
prices, particularly if the business expansion
proved to be more vigorous than was generally
anticipated. Of particular concern was the prospect that rising prices of internationally traded
goods could foster a more general increase in
domestic prices and lead to higher wages. Because such developments would reflect broader
and more permanent cost factors, the inflation
43
problem would become much more difficult for
policymakers. A number of other members saw a
lesser risk that inflation would intensify over the
period ahead. Highly competitive conditions
continued to characterize many markets, both
domestic and international, and businessmen
were persisting in their efforts to curb their costs
of production. It also was noted that a portion of
the gains in output and employment was occurring in previously depressed industries where the
availability of labor and other production resources was concentrated. In this view monetary
policy had been sufficiently tight, with relatively
low monetary growth, and in the context of a less
expansionary fiscal policy, the economy was not
seen as likely to generate excessive demand
pressures over the next several quarters.
At its meeting in July the Committee reviewed
the basic policy objectives that it had set in
February for growth of the monetary and debt
aggregates in 1987 and established tentative objectives for expansion of those aggregates in
1988. For the period from the fourth quarter of
1986 to the fourth quarter of 1987, the Committee
reaffirmed the ranges established in February
involving growth of 5Vi to 8V2 percent for both
M2 and M3. Given developments through midyear, the Committee agreed that growth in these
aggregates around the lower ends of their ranges
might be appropriate, depending on the circumstances. The monitoring range for expansion in
total domestic nonfinancial debt also was left
unchanged at 8 to 11 percent for 1987. For 1988
the Committee agreed on tentative reductions of
Vi percentage point to growth ranges of 5 to 8
percent for both M2 and M3. The Committee also
reduced the associated range for growth in total
domestic nonfinancial debt by Vi percentage
point to IVi to 10V2 percent for 1988. With
respect to Ml, the Committee decided at the July
meeting not to set a specific target for the remainder of 1987 or to establish a tentative range for
1988. It was understood that all the ranges for
1988 were provisional and that they would be
reviewed early next year in the light of intervening developments. The issues involved with establishing a target for Ml would be carefully
reappraised at the beginning of 1988.
In the Committee's discussion of policy implementation for the weeks immediately ahead,
44
Federal Reserve Bulletin • January 1988
most of the members indicated that they were in
favor of directing open market operations, at
least initially, toward achieving the increased
degree of reserve pressure that had been sought
in recent weeks. No change in policy would be
involved, given the decision in early September
to reduce the availability of reserves; however,
because implementation of that decision had not
yet been reflected in actual pressures on reserves
or in money markets, an unchanged policy at this
meeting would imply some slight firming from the
actual reserve conditions that had prevailed recently. A few members expressed a preference
for maintaining the existing degree of reserve
pressure. The members agreed that the differences in question were slight and that, against the
background of earlier policy-firming actions, significant further changes in policy were not desirable at this time. In the latter connection, some
members urged that particular caution be exercised in implementing policy following today's
meeting in order not to convey a misleading
impression of the System's policy intentions.
In reaching their decisions the members took
account of a staff analysis that suggested that
even without any increase in reserve pressures
money growth was likely to remain fairly subdued over the months ahead. This outlook reflected in large measure the expected effects on
money demand of the increase in market interest
rates associated in part with the decisions in
early September to achieve slightly firmer reserve conditions and to raise the discount rate. In
the circumstances, growth of M2 might continue
at about its average pace of recent months and on
a cumulative basis remain appreciably below the
Committee's range for the year. Growth in M3
might pick up marginally from its recent pace,
ending the year around the lower limit of its
range for 1987. Given its particular sensitivity to
interest rates, growth in Ml for the balance of the
year was expected to slow further from its considerably reduced pace thus far in 1987. The
members recognized that projections of monetary growth necessarily involved a wide range of
uncertainty. In particular, developments in the
months ahead would depend importantly on the
unknown extent to which holders of money assets would respond to the higher market interest
rates that had emerged and also on the extent to
which depository institutions would adjust their
offering rates on interest-bearing deposits. In
light of the uncertainties that were involved,
judgments about appropriate rates of monetary
growth would need to rely on accompanying
economic and financial developments.
With regard to possible adjustments in policy
implementation during the intermeeting period,
the members generally felt that there should be
no presumptions about the likely direction of
such adjustments, if any. A number of members
commented that, taking account of earlier policy
firming decisions, monetary policy was now appropriately positioned under the circumstances
that were most likely to prevail. While a few
members felt that the Committee should remain
especially alert to developments that might call
for somewhat firmer reserve conditions, others
did not want the directive to lean in the direction
of still further firming, given the slight initial
firming that was already contemplated. The
members generally agreed that in addition to
developments relating to the outlook for inflation, any reserve adjustments during the intermeeting period should give weight to ongoing
business developments and the performance of
the dollar in foreign exchange markets. In keeping with the Committee's usual approach, it also
was understood that any decision to alter reserve
objectives during the intermeeting period would
take account of the behavior of monetary aggregates.
The members generally supported a proposal
to raise the existing intermeeting range for the
federal funds rate by 1 percentage point to 5 to 9
percent. One member expressed concern that the
higher range might be misinterpreted as signaling
future firming action. Others pointed out, however, that the increase was a technical adjustment intended to take account of the rise in the
federal funds rate over the course of recent
weeks and to provide a more symmetrical range
around the current rate. By itself the increase
would have no significance for policy. The federal funds range provides a mechanism for initiating consultation of the Committee when its
boundaries are persistently exceeded.
At the conclusion of the Committee's discussion, all of the members indicated that they
preferred or could accept a directive that called
Record of Policy Actions of the FOMC
for maintaining the slightly firmer degree of reserve pressure that had been sought in recent
weeks. With regard to possible adjustments during the intermeeting period, the members indicated that somewhat greater reserve restraint or
somewhat lesser reserve restraint would be acceptable depending on developments relating to
inflation, the strength of the business expansion,
the performance of the dollar in foreign exchange
markets, while also taking account of the behavior of the monetary aggregates. The contemplated provision of reserves was expected to be
consistent with growth in M2 and M3 at annual
rates of around 4 percent and around 6 percent
respectively, for the four-month period from
August to December. Growth in Ml was expected to remain relatively slow over the same
period. Because of the unusual uncertainty relating to the behavior of Ml and in keeping with the
decision not to set a longer-run target for this
aggregate, the Committee decided to continue
the practice of not specifying a numerical expectation for its short-run growth. The members
agreed that the intermeeting range for the federal
funds rate should be raised from 4 to 8 percent to
5 to 9 percent.
At the conclusion of the meeting the following
domestic policy directive was issued to the Federal Reserve Bank of New York:
The information reviewed at this meeting suggests
on balance that economic activity is expanding in the
current quarter at a pace similar to that in the first half
of the year. Total nonfarm payroll employment rose
further in August after a large increase in July. The
civilian unemployment rate remained at 6.0 percent,
well below its level at the start of the year. Industrial
production increased further in August following large
gains in other recent months. Consumer spending,
bolstered by a rise in auto sales, posted a large
increase in August. Recent indicators of business
capital spending point to some strength, particularly in
equipment outlays. Housing starts fell in August to a
level a little below their average in other recent
months. Preliminary data suggest that the nominal
U.S. merchandise trade deficit was unchanged in July
from its June level but larger than the second-quarter
average. The rise in consumer and producer prices has
slowed in recent months, reflecting favorable price
developments in food and energy.
Growth of the monetary aggregates strengthened in
August, but for 1987 through August, expansion of
45
both M2 and M3 remained below the lower ends of the
ranges established by the Committee for the year;
growth in Ml has been at a much reduced pace in 1987.
Expansion in total domestic nonfinancial debt has
moderated this year. Interest rates have risen considerably since the meeting on August 18. On September
4, the Federal Reserve Board approved an increase in
the discount rate from 5l/z to 6 percent. In foreign
exchange markets, the trade-weigh ted value of the
dollar in terms of the other G-10 currencies has depreciated on balance since the latest meeting; some of the
decline in the dollar early in the intermeeting period
was later reversed.
The Federal Open Market Committee seeks monetary and financial conditions that will foster reasonable
price stability over time, promote growth in output on
a sustainable basis, and contribute to an improved
pattern of international transactions. In furtherance of
these objectives the Committee agreed at its meeting
in July to reaffirm the ranges established in February
for growth of 5V2 to 8V2 percent for both M2 and M3
measured from the fourth quarter of 1986 to the fourth
quarter of 1987. The Committee agreed that growth in
these aggregates around the lower ends of their ranges
may be appropriate in light of developments with
respect to velocity and signs of the potential for some
strengthening in underlying inflationary pressures,
provided that economic activity is expanding at an
acceptable pace. The monitoring range for growth in
total domestic nonfinancial debt set in February for the
the year was left unchanged at 8 to 11 percent.
For 1988, the Committee agreed on tentative ranges
of monetary growth, measured from the fourth quarter
of 1987 to the fourth quarter of 1988, of 5 to 8 percent
for both M2 and M3. The Committee provisionally set
the associated range for growth in total domestic
nonfinancial debt at IV2 to IOI/2 percent.
With respect to M l , the Committee recognized that,
based on experience, the behavior of that aggregate
must be judged in the light of other evidence relating to
economic activity and prices; fluctuations in Ml have
become much more sensitive in recent years to
changes in interest rates, among other factors. Because of this sensitivity, which has been reflected in a
sharp slowing of the decline in Ml velocity over the
first half of the year, the Committee again decided at
the July meeting not to establish a specific target for
growth in Ml over the remainder of 1987 and no
tentative range was set for 1988. The appropriateness
of changes in Ml this year will continue to be evaluated in the light of the behavior of its velocity, developments in the economy and financial markets, and
the nature of emerging price pressures. The Committee welcomes substantially slower growth of Ml in
1987 than in 1986 in the context of continuing economic expansion and some evidence of greater inflationary pressures. The Committee in reaching operational decisions over the balance of the year will take
account of growth in Ml in the light of circumstances
46
Federal Reserve Bulletin • January 1988
then prevailing. The issues involved with establishing
a target for Ml will be carefully appraised at the
beginning of 1988.
In the implementation of policy for the immediate
future, the Committee seeks to maintain the degree of
pressure on reserve positions sought in recent weeks.
Somewhat greater reserve restraint or somewhat
lesser reserve restraint would be acceptable depending
on indications of inflationary pressures, the strength of
the business expansion, developments in foreign exchange markets, as well as the behavior of the aggregates. This approach is expected to be consistent with
growth in M2 and M3 over the period from August
through December at annual rates of around 4 percent
and around 6 percent, respectively. Ml is expected to
continue to grow relatively slowly. The Chairman may
call for Committee consultation if it appears to the
Manager for Domestic Operations that reserve conditions during the period before the next meeting are
likely to be associated with a federal funds rate persistently outside a range of 5 to 9 percent.
Votes for this action: Messrs. Greenspan, Corrigan, Angell, Boehne, Boy kin, Heller, Kelley,
Keehn, Johnson, Ms. Seger, and Mr. Stern. Votes
against this action: None.
On every business day from October 19 to 30,
1987, the Committee conferred by telephone and
reviewed the extremely volatile conditions that
had developed in financial markets. The members agreed on the need for special flexibility in
open market operations during this period for
meeting the liquidity requirements of the economic and financial system. Such an approach to
policy implementation was deemed to be consistent with the directive adopted at the meeting on
September 22, but it was understood that policy
would have to be kept under particularly close
review.
47
Legal Developments
AMENDMENT
TO REGULATION
Z
The Board of Governors is amending 12 C.F.R. Part
226, its Regulation Z, by issuing a final rule to implement section 1204 of the Competitive Equality Banking Act of 1987 (Pub. L. No. 100-86, 101 State. 552).
Section 1204 provides that, effective December 9,
1987, any adjustable rate mortgage loan originated by
a creditor must include a limitation on the maximum
interest rate that may apply during the term of the
loan. The final rule, incorporating the new law into
Regulation Z, limits the scope of section 1204 to
dwelling-secured consumer credit, that is subject to
the Truth in Lending Act and Regulation Z, in which a
creditor may make interest rate changes during the
term of the credit obligation—whether those changes
are tied to an index or formula or are within the
creditor's discretion. The rule applies the statutory
requirement to both closed-end and open-end credit.
As a result, effective December 9, 1987, creditors are
required to set a lifetime maximum interest rate on all
credit obligations secured by a dwelling that require
variable-rate disclosures under Regulation Z, where
the interest rate may increase. In addition, creditors
offering open-end lines of credit secured by a dwelling
in which the creditor has the contractual right to
change the interest rate—the periodic rate and corresponding annual percentage rate—on an account are
also required to set a lifetime maximum interest rate
applicable during the plan. The rule applies only to
credit obligations entered into on or after December 9,
1987.
Creditors must specify the lifetime maximum rate of
interest that may be imposed on obligations subject to
section 1204 in their credit contracts (the instrument
signed by the consumer that imposes personal liability). Determination of the maximum rate is within the
creditor's discretion. Until October 1, 1988, compliance with section 1204—specifying the maximum
interest rate in credit contracts—meets the requirement in Regulation A that creditors disclose limitations on rate increases as part of the variable rate
disclosures for open-end credit plans and closed-end
credit transactions.
Effective December 9, 1987, the Board amends 12
C.F.R. Part 226 as follows:
Part 226—Truth
in
Lending
1. The authority citation for 12 C.F.R. Part 226 is
revised to read as follows:
Authority: Section 105, Truth in Lending Act, as
amended by section 605, Pub. L. 96-221, 94 Stat. 170
(15 U.S.C. 1604 et seq.)-, section 1204(c), Competitive
Equality Banking Act, Pub. L. 100-86, 101 Stat. 552.
2. Part 226 is amended by revising paragraphs 226.1(a),
(d)(4) and (e) to read as follows:
Subpart
A—General
Section 226.1—Authority, purpose, coverage,
organization, enforcement and liability.
(a) Authority: This regulation, known as Regulation Z,
is issued by the Board of Governors of the Federal
Reserve System to implement the federal Truth in
Lending and Fair Credit Billing Acts, which are contained in title I of the Consumer Credit Protection Act,
as amended (15 U.S.C. 1601 et seq.). This regulation
also implements title XII, section 1204 of the Competitive Equality Banking Act of 1987 (Pub. L. 100-86,
101 Stat. 552). Information-collection requirements
contained in this regulation have been approved by the
Office of Management and Budget under the provisions of 44 U.S.C. 3501 et seq. and have been assigned
OMB No. 7100-0199.
^^ * * *
(4) Subpart D contains rules on oral disclosures.
Spanish language disclosure in Puerto Rico, record
retention, effect on state laws, state exemptions,
and rate limitations.
(e) Enforcement and liability. Section 108 of the act
contains the administrative enforcement provisions.
Sections 112, 113, 130, 131, and 134 contain provisions
relating to liability for failure to comply with the
requirements of the act and the regulation. Section
48
Federal Reserve Bulletin • January 1988
1204(c) of Title XII of the Competitive Equality Banking Act of 1987, Pub. L. No. 100-86, 101 Stat. 552,
incorporates by reference administrative enforcement
and civil liability provisions of sections 108 and 130 of
the act.
3. A new section 226.30 is added to Subpart D to read
as follows:
Subpart
D—Miscellaneous
Section 226.30—Limitation on rates
A creditor shall include in any consumer credit contract secured by a dwelling and subject to the act and
this regulation the maximum interest rate that may be
imposed during the term of the obligation 5 0 when:
(a) In the case of closed-end credit, the annual percentage rate may increase after consummation, or
(b) In the case of open-end credit, the annual percentage rate may increase during the plan.
AMENDMENT
TO RULES
REGARDING
DELEGA TION OF A UTHORITY
The Secretary of the Board of Governors has approved technical amendments to 12 C.F.R. Part 265,
its Rules Regarding Delegation of Authority, to reflect
changes in titles of Board officials exercising delegated
authority.
Effective June 17, 1987, the Secretary of the Board
amends 12 C.F.R. Part 265 as follows:
Part 265—Rules
Authority
Regarding
Delegation
of
1. The authority citation for Part 265 continues to read
as follows:
Authority: Sec. ll(k), 38 Stat. 261 and 80 Stat. 1314
(12 U.S.C. 248(k).
2. The following sections are amended by removing
the words indicated below and inserting in their place
the words "Staff Director of the Division of Banking
Supervision and Regulation":
(a) Section 265.1a(a)(2): "Director of the Division of
Banking Supervision and Regulation";
50. Compliance with this section will constitute compliance with
the disclosure requirements on limitations on increases in footnote 12
to sections 226.6(a)(2) and 226.18(f)(2) until October 4, 1988.
(b) Sections 265.2(b)(10) and 265.2(f)(48): "Director of
Banking Supervision and Regulation" ;
(c) Section 265.2(f)(26): "Director of the Board's Division of Banking Supervision and Regulation".
3. The following sections are amended by removing
the words indicated below and inserting in their place
the words "directors and staff directors":
(a) Section 265.2(b)(ll): "directors";
(b) Section 265.2(c)(29): "Directors".
4. The introductory text of section 265.2(c) is revised
to read as follows:
(c) The Staff Director of the Division of Banking
Supervision and Regulation (or, in the Staff Director's
absence, the Acting Staff Director) is authorized:
5. Sections 265.2(c)(26), 265.2(c)(29), and 265.2(c)(34)
are amended by removing the word "Director", which
appears once in section (c)(26), once in section (c)(34),
and twice in section (c)(29), and inserting in its place
the words "Staff Director".
6. Section 265.2(g) is revised to read as follows:
(g) The Staff Director of the Division of International
Finance (or, in the Staff Director's absence, the Acting
Staff Director) is authorized, under the provisions of
the sixth paragraph of section 14 of the Federal Reserve Act (12 U.S.C. 358), to approve the establishment of foreign accounts with the Federal Reserve
Bank of New York.
ORDERS ISSUED UNDER BANK
HOLDING
COMPANY ACT AND BANK MERGER
ACT
Orders issued
Holding
Act
Under
Section
3 of the
Bank
CBTC Holding Company, Inc.
Paris, Tennessee
Order Approving
Company
Formation of a Bank
Holding
CBTC Holding Company, Inc., Paris, Tennessee
("Applicant"), has applied for the Board's approval
under section 3(a)(1) of the Bank Holding Company
Act, as amended (12 U.S.C. § 1842(a)(1)) ("BHC
Act"), to become a bank holding company by acquiring 100 percent of the voting shares of Commercial
Holding Company, Inc., Paris, Tennessee ("Company"), and thereby indirectly acquire control of
Commercial Bank and Trust Company, Paris, Tennessee ("Bank").
Legal Developments
Notice of the application, affording an opportunity
for interested persons to submit comments, has been
given in accordance with section 3(b) of the BHC Act
(12 U.S.C. § 1842(b)). The time for filing comments
has expired and the Board has considered the application and all comments received in light of the factors
set forth in section 3(c) of the BHC Act (12 U.S.C.
§ 1842(c)).
Applicant, a non-operating corporation with no subsidiaries, was organized for the purpose of becoming a
bank holding company by acquiring Company and
thereby indirectly acquiring Bank, which holds deposits of $110.3 million. 1 Upon acquisition of Bank,
Applicant would control the 45th largest bank in
Tennessee, representing .034 percent of total deposits
in commercial banks in the state.
Bank is the largest of three banking organizations in
the relevant market and holds 70 percent of the total
deposits in commercial banks in that market. 2 Principals of Applicant and Bank are not affiliated with any
other depository organizations in the market. Based
on the facts of record, consummation of the proposed
transaction would not result in any adverse effects
upon competition or increase concentration of banking
resources in any relevant area. Accordingly, the Board
concludes that competitive considerations under the
BHC Act are consistent with approval of the application.
Applicant will become a bank holding company by
acquiring control of Company. By the instant proposal, Applicant's principals propose to place acquisition debt in Applicant. The Board has previously
indicated that a bank holding company should serve as
a source of financial and managerial strength for its
subsidiary banks. 3 Although Applicant will incur debt
in connection with this proposal, it appears that Applicant will be able to service its debt, particularly in
view of Bank's favorable earnings record and sound
financial condition. In light of the above, the Board
views the financial and managerial resources of Applicant, Company, and Bank as consistent with approval.
Considerations relating to the convenience and needs
of the communities to be served are also consistent
with approval.
Based on the foregoing and other facts of record, the
Board has determined that the application should be,
and hereby is, approved. The transaction shall not be
consummated before the thirtieth calendar day following the effective date of this Order, or later than three
49
months after the effective date of this Order, unless
such period is extended for good cause by the Board or
the Federal Reserve Bank of St. Louis, acting pursuant to delegated authority.
By order of the Board of Governors, effective November 23, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, and Heller. Absent and not voting: Governors Angell and Kelley.
JAMES M C A F E E
[SEAL]
Associate
Secretary
of the
Board
Eastern Michigan Financial Corporation
Croswell, Michigan
Order Approving
Acquisition
of a Bank
Eastern Michigan Financial Corporation ("Eastern
Michigan"), Croswell, Michigan, a bank holding company within the meaning of the Bank Holding Company Act ("Act"), 12 U . S . C . § 1842 et seq., has
applied pursuant to section 3(a)(3) of the Act, 12
U.S.C. § 1843(a)(3), to acquire Sanilac County Bank,
Deckerville, Michigan ("Bank").
Notice of the application, affording interested persons an opportunity to submit comments, has been
given in accordance with section 3(b) of the Act, 52
Federal Register 30,251 (1987). The time for filing
comments has expired, and the Board has considered
the application and all comments received in light of
the factors set forth in section 3(c) of the Act.
Eastern Michigan is the 78th largest commercial
banking organization in Michigan, controlling deposits
of $56.6 million, representing 0.1 percent of total
deposits in commercial banking organizations in the
state. 1 Bank is the 118th largest commercial banking
organization in Michigan, controlling deposits of $35.4
million, representing less than one percent of total
deposits in commercial banking organizations in the
state. Upon consummation of this proposal, Eastern
Michigan would become the 47th largest commercial
banking organization in the state, controlling $92 million in deposits, representing less than one percent of
total deposits in commercial banking organizations in
the state. Consummation of the proposal would not
increase significantly the concentration of banking
resources in Michigan.
Eastern Michigan's subsidiary bank competes directly with Bank in the Sanilac County banking
1. All banking data are as of December 31, 1986.
2. The relevant banking'market is approximated by Henry County,
Tennessee.
3. See, CNB Bancorp, Danville, Illinois (73 FEDERAL RESERVE
BULLETIN 598 (1987)).
1. All banking data are as of June 30, 1986.
50
Federal Reserve Bulletin • January 1988
market. 2 Eastern Michigan is the second largest commercial banking organization in the market, with deposits of $44.2 million, representing 17.2 percent of
total deposits in commercial banks in the market.
Bank is the fourth largest commercial banking organization in the market, with $35.4 million in deposits,
representing 13.8 percent of total deposits in commercial banks in the market. Upon consummation of this
proposal, Eastern Michigan would remain the second
largest commercial banking organization in the market, with $79.6 million in deposits, representing 31.0
percent of the total commercial banking deposits in the
market. The market is considered highly concentrated,
with a four-firm concentration ratio of 82.3 percent.
The Herfindahl-Hirschman Index ("HHI") of the
market is 2142 and would increase by 475 points to
2617 upon consummation of this proposal. 3
Although consummation of this proposal would
eliminate existing competition between Eastern Michigan and Bank in the Sanilac County banking market,
numerous other commercial banks would continue to
operate in the market after consummation of this
proposal. In addition, the Board has considered the
presence of thrift institutions in the banking market in
its analysis of this proposal. The Board previously has
indicated that thrift institutions have become, or have
the potential to become, major competitors of commercial banks. 4 Thrift institutions already exert a
considerable competitive influence in the market as
providers of N O W accounts and consumer loans, and
many are engaged in the business of making commercial loans. Based upon the number, size, market share
and commercial lending activities of thrift institutions
in the market, the Board has concluded that thrift
institutions exert a significant competitive influence
2. The Sanilac County banking market is approximated by Sanilac
County, Michigan.
3. Under the revised Department of Justice Merger Guidelines (49
Federal Register 26,823 (June 29, 1984)), any market in which the
post-merger HHI is over 1800 is considered highly concentrated, and
the Department is likely to challenge a merger that increases the HHI
by more than 50 points unless other factors indicate that the merger
will not substantially lessen competition. The Department of Justice
has informed the Board that a bank merger or acquisition is not likely
to be challenged (in the absence of other factors indicating an
anticompetitive effect) unless the post-merger HHI is at least 1800 and
the merger increases the HHI by at least 200 points. The Justice
Department has stated that the higher than normal HHI thresholds for
screening bank acquisitions for anti-competitive effects implicitly
recognizes the competitive effects of limited purpose lenders and
other non-depository financial entities.
4. The Board has previously indicated that thrift institutions have
become, or have the potential to become, major competitors of
commercial banks. National City Corporation, 70 FEDERAL RESERVE
B U L L E T I N 7 4 3 ( 1 9 8 4 ) ; NCNB
Bancorporation,
7 0 FEDERAL RESERVE
BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL
RESERVE BULLETIN 802 (1983); and First Tennessee National Corporation,
6 9 F E D E R A L RESERVE B U L L E T I N 2 9 8 ( 1 9 8 3 ) .
that mitigates the anticompetitive effects of this proposal in the Sanilac County banking market. 5
In addition, Bank has faced severe financial and
managerial problems in recent years that have resulted
in a decline in Bank's ability to perform as a strong
competitor in the market. 6 Moreover, the Sanilac
County banking market is not an attractive market for
entry by an outside firm, having lagged behind similar
Michigan counties in terms of deposit and population
growth. Accordingly, in view of all of the facts of
record, the Board has determined that consummation
of this proposal would not have a significant adverse
effect on existing competition in the Sanilac County
banking market.
The financial and managerial resources of Eastern
Michigan and its subsidiary bank are consistent with
approval. The Board has considered the fact that Bank
has experienced some managerial and financial difficulties, and consummation of this proposal will improve the prospects of Bank by providing Bank with
the financial and managerial resources to continue to
serve the convenience and needs of the community.
Considerations relating to the convenience and needs
of the community to be served are also consistent with
approval.
Based on the foregoing and other facts of record, the
Board has determined that the application should be,
and hereby is, approved. The acquisition shall not be
consummated before the thirtieth calendar day following the effective date of this Order or later than three
months after the effective date of this Order, unless
such period is extended for good cause by the Board,
or by the Federal Reserve Bank of Chicago, acting
pursuant to delegated authority.
By order of the Board of Governors, effective November 23, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, and Heller. Absent and not voting: Governors Angell and Kelley.
JAMES M C A F E E
[SEAL]
Associate
Secretary
of the Board
5. If 50 percent of the deposits controlled by thrift institutions were
included in the calculation of market concentrations, Eastern Michigan and Bank would control 15.7 percent and 12.5 percent of total
market deposits, respectively. The HHI would increase by 393 points
to 2204 upon consummation of the proposal.
6. In this regard, the Michigan Department of Commerce has
opined that the "advantages offered by the proposed transaction far
outweigh the disadvantages created by the elimination of competition" in the market.
Legal Developments
Meridian Bancorp, Inc.
Reading, Pennsylvania
51
Meridian Bancorp, Inc., Reading, Pennsylvania ("Meridian"), a bank holding company within the meaning
of the Bank Holding Company Act (the "Act")
(12 U.S.C. § 1841 et seq.), has applied for the Board's
approval pursuant to section 3(a)(3) of the Act, to
acquire all of the voting shares of Delaware Trust
Company,
Wilmington,
Delaware
("Delaware
Trust").
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (52 Federal Register 27,460 (1987)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the factors set forth in section 3(c) of
the Act.
Section 3(d) of the Act (12 U.S.C. § 1842(d)), the
Douglas Amendment, prohibits the Board from approving an application by a bank holding company to
acquire control of any bank located outside of the bank
holding company's home state unless the acquisition is
"specifically authorized by the statute laws of the state
in which such bank is located, by language to that
effect and not merely by implication." 1
Meridian's home state is Pennsylvania and Delaware Trust's home state is Delaware. Effective January 1, 1988, the interstate banking statutes of Delaware
will authorize bank holding companies located in "eligible states" to acquire a Delaware bank with the
approval of the Delaware State Commissioner, provided the bank holding company's aggregate deposits
in all eligible states exceeds its aggregate deposits in
states not designated as eligible states. An "eligible
state" is defined as a state that authorizes the acquisition of banks in that state by a Delaware bank
holding company on substantially the same terms and
conditions, and is limited to Maryland, New Jersey,
Ohio, Pennsylvania, the District of Columbia, and
Virginia. 2
Effective August 24, 1986, Pennsylvania interstate
banking statutes authorize bank holding companies in
a region including Delaware, to acquire banks and
bank holding companies in Pennsylvania on terms and
conditions substantially similar to those imposed by
Delaware law. 3 In addition, Meridian's aggregate deposits in all eligible states exceeds its aggregate deposits in states not designated as eligible states. Based on
the foregoing, the Board has determined that, as of
January 1, 1988, the proposed acquisition is specifically authorized by the statute laws of Delaware and
thus Board approval is not prohibited by the Douglas
Amendment, subject to Applicant's obtaining the approval required pursuant to section 843(a) of the
Delaware Statutes. 4
Meridian is the fifth largest commercial banking
organization in Pennsylvania, controlling deposits of
$5.4 billion, representing 5.3 percent of the deposits in
commercial banking organizations in the state. 5 Delaware Trust is the third largest commercial banking
organization in Delaware, controlling deposits of
$951.8 million, representing 16 percent of the deposits
in the state. Consummation of this proposal would not
have any significant adverse effect upon the concentration of banking resources in either Pennsylvania or
Delaware.
Meridian and Delaware Trust do not compete directly in any banking market. Accordingly, consummation of this proposal would not result in any adverse
effect upon existing competition in any relevant banking market. The Board has also considered the effects
of the proposed acquisition on probable future competition in the markets in which Meridian or Delaware
Trust, but not both, compete. In light of the existence
of numerous potential entrants into the relevant banking markets, the Board has concluded that consummation of this proposal would not have any significant
adverse effect on probable future competition in any
relevant market.
The financial and managerial resources of Meridian,
its subsidiary banks, and Delaware Trust are considered satisfactory and consistent with approval. In
considering the convenience and needs of the communities to be served, the Board has taken into account
the records of Meridian and Delaware Trust under the
Community Reinvestment Act, 12 U.S.C. § 2901
et seq. ("CRA"). The CRA requires the Board, in its
evaluation of a bank holding company application, to
assess the record of an applicant in meeting the credit
needs of the entire community, including low- and
moderate-income neighborhoods, consistent with safe
1. A bank holding company's home state is the state in which the
operations of the bank holding company's subsidiary banks were
principally located on July 1, 1966, or on the date on which the
company became a bank holding company, whichever is later.
2. Del. Code Ann. tit. 5, § 841 et seq as added by The Delaware
Interstate Banking Act of 1987, 66 Del. Laws Ch. 32 (1987).
3. Pa. Stat. Ann. tit. 7, § 116 (Purdon Supp. 1987).
4. In addition to obtaining approval from the Delaware State
Commissioner, Meridian must obtain approval from the Pennsylvania
Department of Banking. Pa. Stat. Ann. 7 § 116(h).
5. State deposit data are as of December 31, 1986.
Order Approving Acquisition
of a Bank
52
Federal Reserve Bulletin • January 1988
and sound operation. The Board has received comments from the COLT Coalition, the Community
Development Coalition, Inc., and the Delaware Community Reinvestment Action Council (collectively
"Protestants"), organizations that represent low- and
moderate-income and minority individuals and groups
in Philadelphia and Delaware, regarding Meridian's
and Delaware Trust's CRA performances. Protestants
contend that Meridian's subsidiary, Meridian Bank,
Reading, Pennsylvania, and Delaware Trust have
failed to adequately assess the credit needs of low- and
moderate-income persons in their communities, and
that both Meridian Bank and Delaware Trust engage in
discriminatory credit practices.
In accordance with the Board's practice and procedures for handling protested applications, 6 the Board
reviewed the allegations made by the Protestants and
Meridian's response to the allegations. In an attempt
to resolve the concerns raised by the protests, Meridian has met privately with the Protestants on several
occasions to discuss the issues raised by the Protestants. Moreover, Meridian, the Community Development Coalition, Inc., and the Delaware Community
Reinvestment Action Council have announced that
they have reached an agreement in principle that
will resolve many of the issues raised by these protestants. Meridian anticipates that the preliminary agreement will be formalized, in writing, as soon as practicable.
Initially, the Board notes that Meridian Bank and
Delaware Trust have received satisfactory CRA assessments from their primary supervisory agencies.
Both Delaware Trust and Meridian Bank have a compliance officer and a specialist who monitor the banks'
compliance with CRA and other consumer laws. With
regard to Meridian Bank, the Board notes that although there is some disparity between real estate
credit extensions that the bank has made to low- to
moderate-income areas and other areas in Philadelphia, Meridian Bank has, overall, a favorable record in
meeting the credit needs of the communities it serves.
Meridian Bank actively ascertains the credit needs of
its communities by officer call programs and participating in a wide variety of community groups, and
offers a wide range of credit services. In particular,
Meridian Bank is especially active in providing credit
for 1-4 family residential housing, agricultural, and
small business lending throughout Pennsylvania.
With regard to Delaware Trust, the Board notes that
the bank is active in determining the needs of its
community by participating in a variety of community
groups and trade fairs. A review of Delaware Trust's
6.
See 12 C.F.R. § 262.25(c).
lending programs indicates that the bank does not
engage in discriminatory practices and is active in
lending to the low- to moderate-income segments of its
service areas in terms of real estate, student, and
commercial loans. In addition, Meridian has indicated
that Delaware Trust will enhance its service to its
community by advertising in a free local newspaper, as
part of its regular advertising activities, as well as by
advertising in Spanish.
Furthermore, Meridian has informed the Board of
its intentions to improve its CRA record by undertaking a number of specific measures, including the
following:
1. Develop a plan that addresses ways to meet credit
needs in low- and moderate-income areas of the
Philadelphia community and the prospective Wilmington community;
2. Increase awareness and marketing of special
credit programs that can be utilized by residents
who fall outside the bank's traditional lending criteria;
3. Relocate CRA statements in branch locations to
make them more accessible to the public;
4. Develop a mechanism for more effective monitoring of CRA-related efforts and needs across regions
in the bank's service area;
5. Expand participation in local reinvestment programs relative to residential real estate loans;
6. Expand the CRA statement to include special
credit programs currently being offered which enhance the afifordability of credit products;
7. Enhance training of branch personnel with respect to the disclosure requirements of the Home
Mortgage Disclosure Act; and
8. Adopt a Spanish CRA notice for use in Hispanic
communities in Reading and Philadelphia.
The Board expects that all these measures will be
implemented in a timely fashion.
In addition, the agreement in principle that has been
reached between the Community Development Coalition, Inc., the Delaware Community Reinvestment
Action Council and Meridian provides the following:
1. $700,000 is to be earmarked by Meridian and
Delaware Trust over a five-year period in Wilmington and Philadelphia for economic and community
development, and mortgage programs including
credit counseling;
2. Establishment of local advisory committees in
both cities to make recommendations to the banks
on specific economic development projects in their
respective communities. Those requests might include monies to be used in matching funds programs, specific projects, or projects tied to city and
state economic development programs;
Legal Developments
3. $10 million in loans to be made annually, on a
noncumulative basis, over a five-year period in lowand moderate-income areas in Delaware. The credit
will be in the form of residential mortgages, home
improvement and residential and community development loans, state and regional authority debt
issues, and loans to small businesses;
4. $2 million in loans to be made annually, on a
noncumulative basis, will be made available in Philadelphia over the same five-year period for similar
types of lending programs; and
5. The banks have agreed to place deposits up to
$750,000 into interest-bearing accounts of qualifying
community-based neighborhood credit unions in
Wilmington and Philadelphia to be used for small
loans to residents in those communities.
Based on the overall satisfactory CRA record of
Meridian Bank and Delaware Trust, and all the facts of
record, the Board concludes that convenience and
needs considerations in this case are consistent with
approval of the application. 7
Based on the foregoing and other facts of record, the
Board has determined that the application should be,
and hereby is, approved. The acquisition of Delaware
Trust shall not be consummated before the thirtieth
calendar day following the effective date of this Order,
or later than three months after the effective date
of this Order, unless such period is extended for
good cause by the Board or by the Federal Reserve
Bank of Philadelphia acting pursuant to delegated
authority.
By order of the Board of Governors, effective November 30, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Heller, and Kelley.
JAMES M C A F E E
[SEAL]
Associate
Secretary
of the Board
7. The Community Development Coalition, Inc., and the Delaware
Community Reinvestment Action Council requested that the Board
order a public meeting and public hearing. Under the Board's rules,
the Board may hold a public meeting or hearing on an application to
clarify factual issues related to the application and to provide an
opportunity for testimony, if appropriate. 12 C.F.R. §§ 262.3(d) and
262.25(d). In this case the Federal Reserve Bank of Philadelphia has
arranged private meetings for this purpose and the parties have
reached an agreement in principle regarding the CRA issues. Based on
this and other facts of record, the Board has determined that a public
meeting or hearing would serve no useful purpose. Accordingly, the
request for a public meeting or hearing is denied.
53
NBD Bancorp, Inc.
Detroit, Michigan
NBD Northern Corporation
Detroit, Michigan
Order Approving Acquisition of a Bank Holding
Company and Formation of a Bank Holding
Company
N B D Bancorp, Inc., Detroit, Michigan ( " N B D " ) , a
bank holding company within the meaning of the Bank
Holding Company Act of 1956, as amended ( " B H C
Act") (12 U . S . C . § 1841 et seq.), and its wholly owned
nonoperating subsidiary, N B D Northern Corporation,
Detroit, Michigan ( " N B D Northern") (together, "Applicants"), have applied for the Board's approval
under section 3 of the BHC Act (12 U . S . C . § 1842) to
merge N B D Northern with State National Corporation, Evanston, Illinois ("State National"), and
thereby acquire State National's two subsidiary
banks: State National Bank, Evanston, Illinois
("Evanston Bank"), and The Bank and Trust Company of Arlington Heights, Arlington Heights, Illinois
("Arlington Bank").
Notice of the applications, affording an opportunity
for interested persons to submit comments, has been
given in accordance with section 3(b) of the BHC Act.
The time for filing comments has expired, and the
Board has considered the applications and all comments received in light of the factors set forth in
section 3(c) of the B H C Act (12 U . S . C . § 1842(c)).
Section 3(d) of the BHC Act (12 U . S . C . § 1842(d)),
the Douglas Amendment, prohibits the Board from
approving an application by a bank holding company
to acquire a bank located outside of the bank holding
company's home state, unless the acquisition is specifically authorized by the statute laws of the state in
which such bank is located, by language to that effect
and not merely by implication. 1 N B D ' s home state is
Michigan. The Board has previously determined that
the statute laws of Illinois specifically authorize Michigan bank holding companies, such as N B D , to acquire
an Illinois bank or bank holding company. 2 Accordingly, approval of N B D ' s proposal is not barred by the
Douglas Amendment.
1. A bank holding company's home state for the purposes of the
Douglas Amendment is that state in which the total deposits of its
banking subsidiaries were largest on July 1, 1966, or on the date it
became a bank holding company, whichever date is later. 12 U.S.C. §
1842(d).
2. First America Bank Corporation, 73 FEDERAL RESERVE BULLETIN 1 7 5 ( 1 9 8 7 ) ; NBD
316 (1987).
Bancorp,
Inc.,
7 3 F E D E R A L RESERVE B U L L E T I N
54
Federal Reserve Bulletin • January 1988
NBD, with 33 subsidiary banks in Michigan, Illinois,
and Indiana, holds total domestic deposits of $14.2
billion. 3 N B D is the seventh largest commercial banking organization in Illinois with deposits of $1.6 billion,
representing 1.5 percent of the total deposits in commercial banks in that state. N B D Northern is a nonoperating subsidiary formed for the purpose of acquiring State National. State National, with 2 subsidiary
banks holding total domestic deposits of $563 million,
is the 27th largest commercial banking organization in
Illinois holding 0.5 percent of the total deposits in
commercial banks in that state. Upon consummation
of this proposal, N B D would become the fifth largest
commercial banking organization in Illinois holding 2.0
percent of the total deposits in commercial banks in
that state. Consummation of this proposal would not
have any significant adverse effects on the concentration of banking resources in Illinois.
N B D operates in the Chicago banking market, 4
where it is the fifth largest of 256 commercial banking
organizations, controlling 2.3 percent of total deposits
in commercial banks. State National also operates in
the Chicago market where it is the 18th largest commercial banking organization, controlling 0.9 percent
of total deposits in commercial banks. Upon consummation of this proposal, N B D would remain the fifth
largest commercial banking organization in the market, controlling 3.2 percent of total deposits in commercial banks.
The Chicago banking market is, and would continue
to be after consummation of the proposed acquisitions, an unconcentrated market. 5 In view of the
market shares and small increase in concentration
resulting from the proposal, the Board concludes that
consummation of these acquisitions would not have a
significant adverse effect on existing competition in the
Chicago banking market.
The financial and managerial resources of NBD, its
subsidiary banks, N B D Northern, Evanston Bank and
Arlington Bank are considered generally satisfactory
and consistent with approval of these applications.
In considering the convenience and needs of the
communities to be served, the Board has taken into
account the records of the subsidiary banks of N B D
and State National under the Community Reinvest-
3. All banking data are as of June 30, 1986.
4. The Chicago banking market is approximated by Cook, Lake,
and DuPage Counties, Illinois.
5. Consummation of the proposed transaction would increase the
market's Herfindahl-Hirschman Index ("HHI") by 4 points, from 777
to 781. The market is considered unconcentrated under the Department of Justice Merger Guidelines, 49 Federal Register 26,823 (1984),
and the increase in the HHI resulting from the transaction is not within
the parameters the Department of Justice has stated are likely to result
in its challenging the transaction.
ment Act ("CRA") (12 U.S.C. § 2901 et seq.).6 The
Board has received comments regarding the CRA
record of Evanston Bank from the Evanston Neighborhood Conference, a coalition of Evanston neighborhood and public interest groups (collectively,
"protestants"). 7 Protestants allege, inter alia, that
Evanston Bank has not met the credit needs of Evanston's low- and moderate-income and minority communities and has not taken adequate measures to
ascertain the credit needs of the community it serves.
In accordance with the Board's practice and procedure for handling protested applications, 8 the Board
has reviewed the protestants' allegations and the responses of Applicants and Evanston Bank. In an
attempt to resolve the concerns addressed in the
protest, the parties met on two occasions to discuss
the issues raised by protestants. The parties, however,
were unable to come to a resolution of their differences.
Initially, the Board notes that NBD's and State
National's subsidiary banks have received satisfactory
CRA assessments from their primary supervisory
agencies. Further, the Board has reviewed Evanston
Bank's lending record in Evanston's low- and moderate-income and minority neighborhoods and concludes
that Evanston Bank does not discriminate in its lending to such neighborhoods. 9
Evanston Bank has represented to protestants the
steps it will take to adequately ascertain and meet the
convenience and needs of the communities it serves.
In particular, Evanston Bank has stated its intent to
work with NBD's mortgage lending subsidiary to
provide FHA and VA financing which it does not
currently provide. Applicants have represented to the
Board that they will support and monitor Evanston
Bank's efforts to ascertain and meet the credit needs of
the Evanston community. Based on Applicants' and
Evanston Bank's representations, the overall satisfac-
6. The CRA requires the Board, in its evaluation of a bank holding
company application, to take into account the record of an applicant
in meeting the credit needs of the entire community, including lowand moderate-income neighborhoods, consistent with safe and sound
operation. 12 U.S.C. § 2903.
7. The comments submitted by the Evanston Neighborhood Conference were joined by several Aldermen of the City of Evanston and
several neighborhood associations.
8. See 12 C.F.R. § 262.25(c).
9. Only one of 19 census tracts in Evanston is considered low- and
moderate-income. Evanston Bank in 1984-86 made 5.4 percent of its
total home purchase loans in Evanston and 8.9 percent of its total
home improvement loans in Evanston in that census tract. Three
census tracts in Evanston are considered to be predominately minority. In those census tracts, Evanston Bank in 1984-86 made 23.6
percent of its total home purchase loans in Evanston and 30.4 percent
of its total home improvement loans. Accordingly, Evanston Bank's
lending in Evanston low- and moderate-income and predominately
minority census tracts has been proportionate with its lending in other
Evanston census tracts.
Legal Developments
tory CRA record of N B D ' s and State National's
subsidiary banks, and other facts of record, the Board
has determined that convenience and needs considerations are consistent with approval of these
applications. 10
Based on the foregoing and other facts of record, the
Board has determined that these applications should
be, and hereby are, approved. The transactions shall
not be consummated before the thirtieth calendar day
following the effective date of this Order or later than
three months after the effective date of this Order,
unless such period is extended for good cause by the
Board or the Federal Reserve Bank of Chicago, acting
pursuant to delegated authority.
By order of the Board of Governors, effective November 13, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Heller and Kelley.
JAMES M C A F E E
[SEAL]
Associate
Secretary
of the Board
Riley County Bancshares, Inc.
Riley, Kansas
Order Approving
Company
Formation
of a Bank
Holding
Riley County Bancshares, Inc., Riley, Kansas, has
applied for the Board's approval under section 3(a)(1)
of the Bank Holding Company Act of 1956, as
amended (the "Act") (12 U.S.C. § 1842(a)(1)), to
become a bank holding company by acquiring 97
percent of the outstanding voting shares of Riley State
Bank, Riley, Kansas ("Bank").
Notice of the application, affording opportunity for
interested persons to submit comments, has been
given in accordance with section 3(b) of the Act. The
time for filing comments has expired and the Board has
considered the application and all comments received
in light of the factors set forth in section 3(c) of the Act
(12 U . S . C . § 1842(c)).
10. Protestants have requested that the Board conduct a public
hearing to receive testimony on the issues presented by these applications. Under the Board's rules, the Board may hold a public hearing
on an application to clarify factual issues related to the application and
to provide an opportunity for testimony, if appropriate. 12 C.F.R.
§ 262.25(d). In the Board's view, the parties have had ample opportunity to present their arguments in writing and to respond to one
another's submissions. Based on Applicants' and Evanston Bank's
representations concerning Evanston Bank's future efforts to ascertain and meet the convenience and needs of Evanston, and other facts
of record, the Board has determined that a hearing will serve no useful
purpose. Accordingly, protestants' request for a public hearing is
denied.
55
Applicant is a nonoperating corporation formed to
acquire Bank. Bank is the 373rd largest commercial
banking organization in Kansas, with total deposits of
$13.3 million, representing 0.6 percent of the total
deposits in commercial banks in the state. 1 Consummation of the transaction would not result in an
increase in the concentration of banking resources in
Kansas.
Bank operates in the Riley County banking market, 2
where it is the fifth largest of seven commercial banks,
controlling 3.9 percent of total deposits in commercial
banks in the market. Principals of Applicant are not
affiliated with any other commercial banking organization in the market. Consummation of this proposal
would not result in any adverse effects upon competition or increase the concentration of banking resources in any relevant area. Accordingly, the Board
concludes that competitive considerations under the
Act are consistent with approval.
Applicant proposes to acquire Bank with existing
funds and borrow additional funds to make a capital
injection into Bank. The capital injection will improve
the condition of Bank and enhance its future prospects. Based upon the facts of record, including commitments made by Applicant and its principals in
connection with this application, the financial and
managerial resources and future prospects of Applicant and Bank are consistent with approval. Considerations relating to convenience and needs of the
community to be served also are consistent with
approval of the application.
Based on the foregoing and other facts of record, the
Board has determined that consummation of the transaction would be in the public interest and that the
application should be, and hereby is, approved. The
transaction shall not be consummated before the thirtieth calendar day following the effective date of this
Order, or later than three months 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 Kansas City, acting pursuant to delegated
authority.
By order of the Board of Governors, effective November 16, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, and Kelley. Absent and not voting:
Governor Heller.
JAMES M C A F E E
[SEAL]
Associate
Secretary
of the
Board
1. All banking data are as of December 31, 1985.
2. The Riley County banking market is defined as Riley County,
Kansas.
56
Federal Reserve Bulletin • January 1988
SouthTrust Corporation
Birmingham, Alabama
Order Approving
Companies
Acquisition
of Bank Holding
SouthTrust Corporation, Birmingham, Alabama, has
applied for the Board's approval under section 3(a)(3)
of the Bank Holding Company Act of 1956, as
amended ("BHC Act") (12 U.S.C. § 1841 et seq.), to
acquire the shares of Vista Banks, Inc. ("Vista"),
Ormond Beach, Florida, and its subsidiary banks,
Vista Bank of Volusia County, De Leon Springs,
Florida, and Vista Bank of Marion County, Belleview,
Florida; and to acquire Bank of Florida Corporation
("BFC"), St. Petersburg, Florida, and its bank subsidiary, Bank of Florida, St. Petersburg, Florida. 1
Notice of these applications, affording interested
persons an opportunity to submit comments, has been
published. The time for filing comments has expired,
and the Board has considered the applications and all
comments received, including comments submitted by
Neighborhood Services Inc., and the Greater Birmingham Ministries ("Protestants"), in light of the factors
set forth in section 3(c) of the BHC Act.
The Douglas Amendment to the BHC Act prohibits
the Board from approving an application by any bank
holding company to acquire a bank located outside of
the bank holding company's home state unless the
state law in which the target bank is located specifically authorizes such an acquisition. 12 U.S.C. §
1842(d). The Florida state law permits a bank holding
company located in the Southeastern region, which
includes Alabama, to acquire a Florida bank or bank
holding company provided that Florida bank holding
companies are permitted to acquire banks in the home
state of the acquiring bank holding company on a
reciprocal basis. 19 FLA. STAT. ANN. § 658.295(3)
(West 1984). Florida law also requires that the banking
organization to be acquired must have been in existence and continuously operating for more than two
years prior to the acquisition.
Effective July 1, 1987, Alabama state law permits a
bank holding company located in the Southern region,
including Florida, to acquire an Alabama bank or bank
holding company upon approval of an application by
the Alabama Superintendent of Banks. 4 ALA. CODE
§ 5-13A-3 (1986). Like Florida, Alabama state law
requires that the home state of the acquiring bank
holding company permit acquisitions of banks in that
1. BFC also owns Bank of Florida, N.A., Chiefland, Florida.
Applicant has committed to divest this bank prior to consummation of
this proposal.
state by Alabama bank holding companies on a reciprocal basis.
Based on its review of the relevant Florida and
Alabama statutes, the Board has determined that the
Alabama statute satisfies the conditions of the Florida
regional interstate banking statute and that Florida has
by statute expressly authorized an Alabama bank
holding company, such as Applicant, to acquire a
Florida bank or bank holding company, such as Vista
and BFC. In this regard, each of the banks to be
acquired in this case satisfies the longevity requirement in the Florida statute. The Office of the Florida
State Comptroller agrees that the Alabama statute
satisfies the reciprocity requirements of the Florida
interstate banking provisions. Accordingly, the Board
concludes that approval of Applicant's proposal to
acquire banks in Florida is authorized under Florida
law and is not barred by the Douglas Amendment.
Applicant, a multi-bank holding company controlling 27 banks throughout Alabama with total assets of
approximately $5.8 billion, is the second largest banking organization in Alabama. 2 Applicant currently
owns two bank subsidiaries, with total assets of approximately $111 million, in Florida.
Vista, with total assets of approximately $112.3
million, and BFC, with total assets of approximately
$120 million, are among the smaller commercial banking organizations in Florida, each controlling less than
one percent of total deposits in commercial banking
organizations in Florida. Upon consummation of the
proposal, Applicant would control less than one percent of the total deposits in commercial banking organizations in Florida. Based on the facts of this case,
the Board believes that consummation of the proposal
would have no significantly adverse effect on the
concentration of banking resources in Florida.
Vista Bank of Volusia County operates in the West
Volusia County banking market;3 Vista Bank of Marion County operates in the Marion County banking
market;4 and Bank of Florida operates in the Pinellas
County banking market. 5 Each of these banks is
among the smaller banking organizations in their respective markets, and neither of Applicant's Florida
bank subsidiaries operates in any of these three banking markets. Based on the facts of record in this case,
consummation of this proposal would not result in any
adverse effect upon existing or future competition, or
2. Banking data are as of June 30, 1987.
3. The West Volusia County banking market is comprised of the
cities of De Bary, De Land, Deltona, Orange City, Lake Helen and De
Leon Springs, Florida.
4. The Marion County banking market is approximated by Marion
County, Florida.
5. The Pinellas County banking market is approximated by Pinellas
County, Florida.
Legal Developments
increase the concentration of banking resources, in
any relevant market. Accordingly, the Board concludes that competitive factors are consistent with
approval.
The financial and managerial resources of Applicant
and Bank are considered satisfactory and consistent
with approval. In considering the convenience and
needs of the communities to be served, the Board has
taken into account Applicant's record under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.)
("CRA"). The CRA requires the Board, in its evaluation of a bank holding company application, to assess
the record of an applicant in meeting the credit needs
of the entire community, including low- to moderateincome neighborhoods, consistent with safe and sound
operation. The Board has received comments from the
Protestants, which represent low-income and minority
groups and individuals in Birmingham, Alabama, regarding the CRA record of Applicant and one of its
subsidiary banks, SouthTrust Bank of Alabama, N . A .
("Bank"), Birmingham, Alabama. Protestants contend that Applicant and Bank have failed to serve the
convenience and needs of low-income and minority
persons in the Birmingham area. 6
The Board has carefully reviewed the record of
Applicant and Bank in meeting the convenience and
needs of all segments of its community and the comments submitted by Protestants. The Board notes that
Applicant has received satisfactory CRA ratings at its
most recent examination in May, 1987. Bank and its
mortgage company subsidiary are active in making
home improvement loans in low- to moderate-income
areas of Birmingham, with 26 percent of their home
improvement loans originating in low- to moderateincome neighborhoods in 1986. Home improvement
loans by Bank accounted for nearly 50 percent of all
home improvement loans extended in predominantly
minority neighborhoods in Birmingham by commercial
banking organizations operating in this metropolitan
area in 1984 and 1985. Bank and its mortgage company
subsidiary have also participated in several community development projects to construct and renovate
housing in low- to moderate-income neighborhoods in
Birmingham. The Board also notes that Bank has
sought approval to open an additional branch office
that would serve primarily low-income neighborhoods
in Birmingham.
6. Protestants contend that Applicant has not done enough to help
meet the credit needs of low income and minority individuals in
Birmingham, particularly in the area of housing finance; that Applicant may be impeding the flow of credit to low-income and primarily
minority neighborhoods; that Applicant's participation in local development and redevelopment projects has not been adequate; and that
Applicant's CRA statement indicates that Applicant does not adequately assess the credit needs of the community.
57
Based on these and all of the other facts of record in
this case, the Board concludes that convenience and
needs considerations are consistent with approval of
these applications.
Based on the foregoing and other facts of record, the
Board has determined that the applications should be,
and hereby are, approved. The transaction shall not be
consummated before the thirtieth calendar day following the effective date of this Order, or later than three
months after the effective date of this Order, unless
such period is extended for good cause by the Board or
by the Federal Reserve Bank of Atlanta, acting pursuant to delegated authority.
By order of the Board of Governors, effective November 13, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Heller, and Kelley.
JAMES M C A F E E
[SEAL]
Associate
Secretary
of the
Board
Valley National Corporation
Phoenix, Arizona
Order Approving
the Acquisition
of a Bank
Valley National Corporation, Phoenix, Arizona
("Valley National"), a bank holding company within
the meaning of the Bank Holding Company Act (12
U.S.C. § 1841 et seq.) ("BHC Act"), has applied for
the Board's approval under section 3(a)(3) of the BHC
Act (12 U . S . C . § 1842(a)(3)) to acquire California
Valley Bank, Fresno, California ("Bank").
Notice of the application, affording an opportunity
for interested persons to submit comments, has been
given in accordance with section 3(b) of the BHC Act
(52 Federal Register 26,083 (1987)). The time for filing
comments has expired, and the Board has considered
the application and all comments received, including
comments in opposition to the application from the
PPEP Housing Development Corporation ("PPEP"),
Tucson, Arizona, and the Salt Lake Citizens Congress, Salt Lake City, Utah (collectively, the "Protestants"), in light of the factors set forth in section 3(c)
of the BHC Act (12 U . S . C . § 1842(c)).
Section 3(d) of the BHC Act, 12 U . S . C . § 1842(d),
the Douglas Amendment, prohibits the Board from
approving an application by a bank holding company
to acquire a bank located outside the holding company's home state, unless such acquisition is "specifically authorized by the statute laws of the state in
which such bank is located, by language to that effect
58
Federal Reserve Bulletin • January 1988
and not merely by implication." 1 The statute laws of
California authorize an out-of-state bank holding company, with the approval of the California Superintendent of Banks, to acquire a California bank or bank
holding company provided that the state laws of the
acquiring institution has substantial reciprocity with
California law and that the transaction will not have an
adverse effect on the public's convenience in
California. 2
The California Superintendent of Banks has found
that Arizona has an interstate banking statute that has
substantial reciprocity with California.3 Based on its
own review of the record, the Board has determined,
as required by the Douglas Amendment, that the
proposed acquisition is specifically authorized by the
statute laws of California, subject to Valley National's
obtaining the approval of the California Superintendent of Banks pursuant to section 3776 of California
Financial Code.
Valley National is the largest banking organization
in Arizona, operating one subsidiary bank with total
deposits of $9.2 billion, representing approximately
38.8 percent of the total deposits in commercial banks
in Arizona. 4 Valley National also operates commercial
banks in Utah. Bank is the 170th largest of 432
commercial banking organizations in California, controlling total deposits of $73.0 million, representing
less than 1 percent of total deposits in commercial
banks in California. Consummation of the proposal
would not have any significant adverse effect upon the
concentration of banking resources in Arizona or
California.
Valley National and Bank do not compete directly in
any banking market. Accordingly, consummation of
the proposal would not eliminate any significant existing competition in any relevant banking market. The
Board has also considered the effects of the proposed
acquisition on probable future competition in the markets in which Valley National or Bank, but not both,
compete. In light of the existence of numerous potential entrants into the relevant markets, the Board
concludes that consummation of the proposed transaction would not have any significant adverse effect on
probable future competition in any relevant banking
market.
1. A bank holding company's home state is the state in which the
operations of the bank holding company's subsidiary banks were
principally conducted on July 1, 1966, or the date on which the
company became a bank holding company, whichever is later. 12
U.S.C. § 1842(d). Valley National's home state is Arizona.
2. Cal. Financial Code § 3770 et seq. (West 1968 and Supp. 1987).
3. See December 23, 1986, letter to Valley National Corporation
from the California Superintendent of Banks.
4. All state banking data are as of December 31, 1986.
The financial and managerial resources of Valley
National, its subsidiaries, and Bank are considered
satisfactory and consistent with approval.
In considering the convenience and needs of the
communities to be served, the Board has also taken
into account the record of Valley National under the
Community Reinvestment Act (12 U.S.C. § 2901 et
seq.) ("CRA"). The CRA requires the Board, in its
evaluation of a bank holding company application, to
assess the record of an applicant in meeting the credit
needs of the entire community, including low- and
moderate-income neighborhoods, consistent with safe
and sound operation.
With regard to Valley National's CRA record, the
Board has considered the extensive comments from
both Salt Lake Citizens Congress and PPEP. Salt Lake
Citizens Congress requests that the Board not approve
the application until Valley National's Utah subsidiary, Valley Bank & Trust ("VB&T"), provides loans
to low- and moderate-income areas and cashes government checks for persons with valid identification.
PPEP requests that the Board not approve the application until Valley National's Arizona subsidiary, Valley National Bank ("VNB"), demonstrates that it is
meeting the credit needs of low- and moderate-income
residents in rural service areas and that Valley National has a satisfactory CRA performance in rural
service areas.
In accordance with the Board's practice and procedures for handling protested applications, 5 the Board
reviewed the CRA record of VB&T and VNB, the
allegations made by Protestants, and Valley National's
response. Valley National has met with Protestants in
an attempt to address their concerns. The parties,
however, were unable to come to a resolution of their
differences.
With regard to VB&T's performance, the Board
notes that the bank has a number of programs in place
that are monitored by an executive vice president who
reports directly to the President of VB&T. VB&T is
active in providing home purchase and home improvement loans to most of the low- and moderate-income
census tracts served by VB&T. In addition, the record
indicates that VB&T participates in several community development activities, including serving as an
SBA preferred lender, participating in a home improvement loan program initiated by a local development agency, investing in municipal bonds, supporting
Utah's guaranteed student loan program, and collaborating with many neighborhood groups.
The Board has also considered the CRA record of
VNB. A full-time CRA compliance officer monitors
5. See 12 C.F.R. § 265.25(c).
Legal Developments
the CRA activities of V N B and reports directly to an
officer of V N B who is a member of the executive
committee of V N B and the executive committee of
Valley National. V N B has an existing program to
ascertain community credit needs which involves using marketing and other surveys to determine the
credit needs of the communities it serves, as well as
having its officers and directors participate in a variety
of community organizations. VNB advertises its services through radio, television, print, and billboard
media; is active in providing mortgage and home
improvement loans; participates in F H A Title I lending programs; and has a CRA loan program designed
to offer extended-term loans to residents of federally
designated low- to-moderate-income level census
tracts.
With respect to the Protestants' assertions, a review
of V N B ' s loan portfolio indicates that there is a
reasonable distribution of loans between urban and
rural areas, given the fact that over 75 percent of the
state's population resides in Phoenix and Tucson. In
order to strengthen its CRA performance in certain
low- and moderate-income census tracts within the
Phoenix and Tuscon MS As, V N B has agreed to
strengthen its marketing and consumer education efforts in all segments of its service area. V N B will
expand throughout the state its special lending programs geared to low- and moderate-income persons,
especially in rural areas. Based on all the facts of
record, the Board concludes that the convenience and
needs of the communities to be served are consistent
with approval. 6
Based on the foregoing and other facts of record, the
Board has determined that the application should be,
and hereby is, approved, subject to the express condition that Valley National obtain the approval of the
California Superintendent of Banks pursuant to section 3776 of the California Financial Code. This transaction shall not be consummated before the thirtieth
6. PPEP has also requested the Board to order a public meeting or
hearing to receive public testimony on the issues presented by this
application. Although section 3(b) of the BHC Act does not require a
public meeting or formal hearing in this instance, the Board may, in
any case, order a public meeting or formal hearing. See 12 C.F.R. §
262.3(e). The Board's Rules of Procedure also provide that a public
meeting may be held to clarify factual issues related to an application
or to provide an opportunity for interested persons to testify. 12
C.F.R. § 262.25(d). However, in its request for a hearing or a meeting,
PPEP does not present any material questions of fact that are in
dispute. In accordance with the Board's guidelines, Valley National
and PPEP have met privately to discuss this application and have
exchanged extensive correspondence. In the Board's view, the parties
have had ample opportunity to present their arguments in writing and
to respond to one another's submissions. In light of these facts and
other facts of record, the Board has determined that a public hearing
or public meeting is not necessary to clarify the factual record in this
59
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 November 30, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Heller, and Kelley.
JAMES M C A F E E
[SEAL]
Orders Issued
Bank Holding
Associate
Secretary
Under Sections
Company
Act
of the
3 and 4 of
Board
the
Comerica Incorporated
Detroit, Michigan
Order Approving
the Acquisition
of a Bank
Comerica Incorporated, Detroit, Michigan ("Comerica"), a bank holding company within the meaning of
the Bank Holding Company Act of 1956, as amended
(the "Act") (12 U.S.C. § 1841 et seq.), has applied for
the Board's approval under section 3(a)(3) of the Act
(12 U.S.C. § 1842(a)(3)) to convert Comerica-Midwest, N . A . , Toledo, Ohio, to a full service bank
("Bank"). 1 Bank currently operates as a credit card
bank, pursuant to section 4(c)(8) of the Act (12 U . S . C .
§ 1843(c)(8)). 2
Notice of the applications, affording an opportunity
for interested persons to submit comments, has been
published (52 Federal Register 29,727 (1987)). The
time for filing comments has expired, and the Board
has considered the applications and all comments
received in light of the factors set forth in section 3(c)
of the Act (12 U . S . C . § 1842(c)).
Section 3(d) of the Act (12 U . S . C . § 1842(d)), the
Douglas Amendment, prohibits the Board from approving an application by a bank holding company to
acquire control of any bank located outside of the bank
holding company's home state unless the acquisition is
"specifically authorized by the statute laws of the
1. Comerica Bank-Detroit, a state member bank of the Federal
Reserve System, also has applied to establish an off-site electronic
facility at 445 State Street, Detroit, Michigan, pursuant to section 9 of
the Federal Reserve Act, 12 U.S.C. § 321.
2 . 6 9 F E D E R A L RESERVE B U L L E T I N 9 2 3 ( 1 9 8 3 ) .
A60 Federal Reserve Bulletin • January 1988
State in which such bank is located, by language to
that effect and not merely by implication." 3 Applicant's home state is Michigan. The statute laws of
Ohio authorize the acquisition of a bank or bank
holding company in Ohio by a bank holding company
located in a contiguous state, if the contiguous state
has a reciprocal agreement. 4 The Board has previously
determined that the Michigan and Ohio banking laws
are reciprocal and has allowed Ohio bank holding
companies to acquire Michigan banks. 5 Accordingly,
consummation of the proposal is not barred by section
3(d) of the Act.
Comerica is the second largest commercial banking
organization in Michigan, with deposits of $8.2 billion,
representing 13.2 percent of the total deposits in
commercial banks in the state. 6 Because Comerica
does not operate a full service bank in Ohio, consummation of this proposal would have no substantial
effect on the concentration of banking resources in
that state.
Bank will operate in the Toledo banking market. 7
Because Comerica currently does not operate in this
market, consummation of this proposal would have no
significant adverse effect on competition in this market.
The financial and managerial resources of Comerica
and its subsidiary banks are consistent with approval
of this application.
In considering the convenience and needs of the
communities to be served, the Board has taken into
account Comerica's record under the Community Reinvestment Act (12 U.S.C. § 2901 etseq.) ("CRA"), 8
and two individual comments ("Protestants") received from residents of Detroit, Michigan. The Protestants have requested that the Board not approve the
application until Comerica provides adequate assur-
3. A bank holding company's home state for purposes of the
Douglas Amendment is that state in which the total deposits of its
banking subsidiaries were the largest on July 1, 1966, or on the date it
became a bank holding company, whichever date is later. 12 U.S.C.
§ 1842(d).
4. Ohio Rev. Code Ann. § 1101.05 (Anderson 1986).
5. See Order approving the application by Ameritrust, Cleveland,
Ohio, and First Indiana Bancorp, Elkhart, Indiana, to acquire First
National Bank & Trust Company, Sturgis, Michigan. (Order by the
Federal Reserve Bank of Cleveland dated July 25, 1986).
6. Deposit data are as of December 31, 1986.
7. The Toledo banking market is defined as Lucas and Wood
Counties, except for the city of Fostoria, Fulton County, Ottawa
County, and Sandusky County, all in Ohio; and Whiteford, Bedford,
and Erie townships in Monroe County, Michigan.
8. The CRA requires the Board, in its evaluation of bank holding
company applications and applications for domestic branches of state
member banks, to assess the record of an applicant in meeting the
credit needs of the entire community, including low- and moderateincome neighborhoods consistent with safe and sound operation of the
bank.
ances that it will meet the convenience and needs of
the low- and moderate-income individuals within the
city limits of Detroit, an area that Comerica currently
services. Protestants allege that Comerica engages in a
pattern of racial discrimination in granting credit in
Detroit. The Protestants also request that the Board
order a public hearing, and use of discovery.
In accordance with the Board's practice and procedure for handling protested applications, 9 the Federal
Reserve Bank of Chicago encouraged the parties to
meet to clarify the issues under the CRA. The parties
met and were unable to come to a resolution of their
differences.
In response to the Protestants' comments, the
Board notes that Comerica's subsidiary banks, specifically its lead bank, Comerica Bank-Detroit, has received a satisfactory CRA assessment from the Board
during its most recent CRA examination. Comerica
has also informed the Board that Bank has instituted a
CRA Committee, which is composed of senior officers
from each business division of Bank, that will meet
regularly to monitor Bank's CRA compliance. The
CRA Committee will report directly to the Public
Responsibility Committee of Comerica's Board of
Directors.
Bank has a program in place to ascertain community
credit needs through the involvement of its officers in
several community and professional organizations.
Comerica also advertises its services through newspapers of general circulation, as well as through minority-owned publications, television, and local radio announcements. Bank is active in providing mortgage
and home improvement loans, in state and federal
housing programs. Moreover, there is no evidence in
the record to indicate that borrowers in low- to moderate-income neighborhoods were unjustifiably denied
credit.
Accordingly, based upon all the evidence, including
the programs and measures Comerica has undertaken
to serve the convenience and needs of the community,
including low- and moderate-income segments of that
community, the Board concludes that convenience
and needs considerations are consistent with approval
of these applications. 10 The Federal Reserve Bank of
Chicago will monitor Comerica's CRA program to
9. See 12 C.F.R. § 262.25(c).
10. Although section 3(b) of the Act does not require a formal
hearing in this instance, the Board may, in any case, order a formal or
informal hearing. In the Board's view, the parties have had ample
opportunity to present their arguments in writing and to respond to
one another's submissions. In light of these facts, the Board has
determined that a hearing would serve no useful purpose. Accordingly, Protestants' request for a public hearing is hereby denied.
Legal Developments
ensure compliance with the Community Reinvestment
Act.
Based on the foregoing and other facts of record, the
Board has determined that the applications should be,
and hereby are, approved. The conversion shall not
take place before the thirtieth calendar day following
the effective date of this Order, or later than three
months after the effective date of this Order, and the
proposed off-site automated teller machine should not
be established later than three months after the effective date of the 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 November 17, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, and Kelley. Absent and not voting:
Governor Heller.
JAMES M C A F E E
[SEAL]
Associate
Secretary
of the Board
Equimark Corporation
Pittsburgh, Pennsylvania
Order Approving
Company
the Acquisition
of a Bank
Holding
Equimark Corporation, Pittsburgh, Pennsylvania
("Equimark"), a bank holding company within
the meaning of the Bank Holding Company Act
(12 U.S.C. § 1841 et seq.) (the "BHC Act"), has
applied for the Board's approval under section 3(a)(3)
of the BHC Act (12 U . S . C . § 1842(a)(3)) to acquire
Liberty Financial Group, Inc., Horsham, Pennsylvania ("Liberty"), and thereby indirectly to acquire
Liberty Savings Bank, Horsham, Pennsylvania
("Liberty Bank"), an FDIC-insured savings bank. 1
Applicant has also applied under section 4(c)(8) of
the BHC Act (12 U.S.C. § 1843(c)(8)) to acquire
Liberty Service Corporation, Horsham, Pennsylvania
("LSC"), and thereby engage in the activities of
making, acquiring and servicing loans or other extensions of credit. These activities are authorized for
1. As an FDIC-insured institution, Bank would qualify as a "bank"
under section 2(c) of the BHC Act, as amended by section 101(a) of
the Competitive Equality Banking Act of 1987 ("CEBA"), Pub. L.
No. 100-86, 100 Stat. 552, 554 (1987) (to be codified at 12 U.S.C. §
1841(c)).
61
bank holding companies pursuant to the Board's Regulation Y (12 C.F.R. § 225.25(b)(1)).
Notice of the applications, affording interested persons an opportunity to submit comments, has been
published (52 Federal Register 37,013 (1987)). The
time for filing comments has expired, and the Board
has considered the applications and all comments
received in light of the factors set forth in sections 3(c)
and 4(c)(8) of the BHC Act.
Equimark is the eleventh largest commercial banking organization in Pennsylvania, with approximately
$2.1 billion in deposits, representing 2.0 percent of the
total deposits in commercial banking organizations in
the state. 2 Liberty is the 33rd largest commercial
banking organization in Pennsylvania, with deposits of
approximately $357.8 million, representing less than 1
percent of the total deposits in commercial banks in
the state. Upon consummation of the proposal, Equimark will become the tenth largest commercial banking organization in Pennsylvania, controlling deposits
of approximately $2.5 billion, representing 2.3 percent
of the total deposits in commercial banks in the state.
Equimark and Liberty compete in the Philadelphia/
Trenton banking market. 3 Equimark is the 29th largest
of 52 commercial banking organizations in the
market, 4 controlling less than 1 percent of the total
deposits in commercial banks in the market. Liberty is
the sixteenth largest commercial banking organization
in the market, controlling less than 1 percent of the
total deposits in commercial banks in the market.
Upon consummation of the proposal, Equimark would
become the thirteenth largest commercial banking
organization in the market, controlling 1.2 percent of
the total deposits in commercial banks in the market.
The Philadelphia/Trenton banking market is considered unconcentrated, with a Herfindahl-Hirschman
Index ("HHI") of 965. Upon consummation, the HHI
would increase by 1 point to 966. 5 Accordingly, the
Board concludes that consummation of the proposal
would not have a substantial adverse competitive
effect in the Philadelphia/Trenton banking market.
2. State banking data are as of March 31, 1987.
3. The Philadelphia/Trenton banking market is approximated by the
Pennsylvania Counties of Bucks, Chester, Delaware, Montgomery
and Philadelphia; and the New Jersey Counties of Burlington, Camden, Gloucester and Mercer.
4. Market banking data are as of June 30, 1986.
5. Under the revised Department of Justice Merger Guidelines (49
Federal Register 26,823 (June 29, 1984)), any market in which the
post-merger HHI is less than 1000 is considered unconcentrated and
the Department will not challenge a merger or acquisition resulting in
an HHI of less than 1000, except in extraordinary circumstances. The
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 at least 200 points.
A62 Federal Reserve Bulletin • January 1988
Based upon a review of all the facts of record, the
Board has determined that the financial and managerial resources of Equimark and Liberty are consistent
with approval. Considerations relating to the convenience and needs of the communities to be served also
are consistent with approval of this application.
Equimark has also applied, pursuant to section
4(c)(8) of the BHC Act, to acquire Liberty Bank's
nonbanking subsidiary, LSC, and engage in the activities of commercial and consumer finance. The markets for these activities have numerous competitors
and are regional or national in scope. Accordingly, the
Board concludes that this proposal would not have any
significant adverse effect upon competition in any
relevant market.
Liberty Bank engages, through LSC and its subsidiary, Wynnewood Plaza, Inc., in real estate investment and development activities authorized by state
law. Equimark has committed that, upon consummation, Liberty Bank will not engage directly or indirectly in real estate investment or development activities impermissible under the BHC Act, except to
complete its existing projects. Equimark has committed to complete these projects and divest of them
within two years of consummation of the proposal,
unless during such period Equimark receives approval
pursuant to an application under section 4(c)(8) of the
BHC Act to retain such activities, or the Board
otherwise determines that these activities are permissible under the BHC Act.
Liberty Bank's nonbanking subsidiary, Liberty Service Insurance Agency, Inc., although currently inactive, is authorized to engage in general insurance
activities that generally are impermissible for bank
holding companies. Equimark has committed that Liberty Service Insurance Agency, Inc. will remain inactive and will be dissolved as soon as practicable,
following consummation of the proposal.
Based on the foregoing and other facts of record, the
Board has determined that the applications should be,
and hereby are, approved. The acquisition of Liberty
shall not be consummated before the thirtieth calendar
day following the effective date of this Order, or later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of
Cleveland acting pursuant to delegated authority.
By order of the Board of Governors, effective November 30, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Heller, and Kelley.
JAMES M C A F E E
[SEAL]
Associate
Secretary
of the Board
Fleet Financial Group, Inc.
Providence, Rhode Island
Order Approving the Merger of Bank Holding
Companies and the Acquisition of Banking and
Nonbanking
Subsidiaries
Fleet Financial Group, Inc., Providence, Rhode Island
("Fleet"), a bank holding company within the meaning of the Bank Holding Company Act of 1956, as
amended (the "Act") (12 U . S . C . § 1841 et seq.), has
applied for the Board's approval under section 3 of the
Act (12 U . S . C . § 1842) to merge with Norstar Bancorp, Inc., Albany, N e w York ("Norstar"), and
thereby to acquire its subsidiary banks: Norstar Bank
of Upstate N e w York, Albany, N e w York; Norstar
Bank, N . A . , Buffalo, N e w York; LI Holding Company, and its subsidiary, Norstar Bank of Long Island,
Hempstead, N e w York; Norstar Bank of the Hudson
Valley, N . A . , Newburgh, N e w York; Norstar Bank of
Commerce, N e w York, N e w York; Norstar Bank of
Maine, Portland, Maine; Norstar Bank of Central N e w
York, Syracuse, N e w York; and United National
Bank, Callicoon, N e w York. 1
Fleet also seeks approval to acquire the successor to
the merger of its bank holding company subsidiary,
Merrill Bankshares Company, Bangor, Maine, with
Norstar Bankshare Association of Maine, Lewiston,
Maine. In conjunction with this application, The Merrill Trust Company, a state member bank, has applied
for the Board's approval under section 18(c) of the
Federal Deposit Insurance Act and section 9 of the
Federal Reserve Act (12 U . S . C . § 321) to merge with
Norstar Bank of Maine, Portland, Maine.
Fleet has also applied under section 4(c)(8) of the
Act (12 U.S.C. § 1843(c)(8)) to acquire the nonbanking subsidiaries of Norstar listed in Appendix A to this
Order.
Notice of the applications, affording interested persons an opportunity to submit comments, has been
published (52 Federal Register 29,435 (1987) and 52
Federal Register 31,814 (1987)). The time for filing
comments has expired, and the Board has considered
1. As a result of the merger, the resulting institution will operate
under the charter of Fleet and with the title Fleet/Norstar Financial
Group, Inc.
In connection with the transaction, Fleet and Norstar have granted
to each other an option to purchase up to 24.99 percent of the
outstanding common stock of their respective organizations. Applicant has also applied for approval to exercise its option if any of
several preconditions occur.
Fleet and Norstar individually own 4.9 percent of the voting capital
stock of Indian Head Banks, Inc., Nashua, New Hampshire. Fleet
and Norstar have committed to reduce the aggregate investment in
this company to below 5 percent prior to consummation of the
proposal.
Legal Developments
63
the applications and all comments received in light of
the factors set forth in sections 3(c) and 4(c)(8) of the
Act and the Bank Merger Act. 2
Fleet controls five banking subsidiaries located in
Rhode Island, Maine, Connecticut, and Massachusetts. Fleet is the largest commercial banking organization in Rhode Island, controlling deposits of $3.6
billion, representing 43.5 percent of the total deposits
in commercial banks in Rhode Island. 3 Fleet also is the
fifth largest commercial banking organization in
Maine, controlling deposits of $658.8 million, which
represents 13.0 percent of the total deposits in commercial banks in the state. Norstar operates seven
banking subsidiaries in New York and Maine. Norstar
is the tenth largest commercial banking organization in
New York, controlling deposits of $8.9 billion, representing 3.3 percent of the total deposits in commercial
banks in New York. Norstar is the fourth largest
commercial banking organization in Maine, controlling
deposits of $680.5 million, representing 13.4 percent of
the total deposits in commercial banks in Maine. Upon
consummation of the proposed acquisition and all
planned divestitures, Fleet would become the largest
commercial banking organization in Maine, and its
share of total deposits in commercial banks would
increase to $1.2 billion, representing approximately
24.0 percent of the deposits in that state. Consummation of this proposal would have no significant adverse
effect upon the concentration of commercial banking
resources in Maine.
bank holding company. 5 Under recently enacted legislation, Rhode Island will allow N e w York bank
holding companies to acquire Rhode Island banks after
January 1, 1988, on a reciprocal basis. The Office of
the New York Superintendent of Banks has informed
the Board that it has no objection to this proposal.
Moreover, the Board has previously determined that
Fleet's and Norstar's acquisitions in Maine were authorized by the Douglas Amendment. 6 Accordingly,
Fleet's proposal to acquire Norstar's New York and
Maine subsidiaries is not barred by the Douglas
Amendment.
Fleet currently owns two banks in Connecticut.
Under Connecticut law, Fleet, a N e w England bank
holding company authorized to make acquisitions in
Connecticut, ceases to be a New England bank holding company if it acquires subsidiary banks with their
principal places of business outside the N e w England
region. 7 Once a bank holding company ceases to be a
New England bank holding company, the Connecticut
Banking Commissioner is required to order the immediate divestiture of all Connecticut banking institutions. 8 The Connecticut Banking Commissioner has
informed the Board that Connecticut law would not
bar consummation of the proposal but that he would
thereafter be required by statute to order Fleet to
divest its Connecticut subsidiaries. Fleet has provided
to the Banking Commissioner a draft that addresses
the divestiture requirements to the satisfaction of the
Connecticut Banking Commissioner. 9
Section 3(d) of the Act (12 U.S.C. § 1842(d)), the
Douglas Amendment, prohibits the Board from approving an application by a bank holding company to
acquire control of any bank located outside of the
holding company's home state, unless such acquisition
is "specifically authorized by the statute laws of the
State in which [the] bank is located, by language to
that effect and not merely by implication." Fleet's
home state is Rhode Island. 4 The statute laws of New
York expressly authorize the acquisition of a banking
institution in New York by a bank holding company
that controls a bank located in another state, if that
state authorizes the acquisition of a financial institution in that state on a reciprocal basis by a New York
Unlike Connecticut law, Massachusetts law contains no express divestiture requirement. Accordingly,
the Board's authorization for Fleet's acquisition of its
Massachusetts banking subsidiaries continues unaffected by Fleet's proposed merger and acquisition of
banking subsidiaries located outside of the N e w England region.
Based on the foregoing and other facts of record, the
Board has determined that the proposed acquisition is
specifically authorized by the statute laws of N e w
York and Maine and is not inconsistent with the laws
of Connecticut and Massachusetts. Thus, Board approval of the proposal is not prohibited by the Douglas
Amendment.
2. The Board received one comment in opposition to this proposal
based on a customer's problem with a checking account in Fleet's
bank in Rhode Island. The Comptroller of the Currency currently is
investigating this complaint. In light of the facts in the record in this
case, the Board has determined that this comment does not warrant
denial of this application.
3. State deposit data are as of March 31, 1987, and market deposit
data are as of June 30, 1986.
4. A bank holding company's home state is that state in which the
operations of the bank holding company's banking subsidiaries were
principally conducted on July 1, 1966, or the date on which the
company became a bank holding company, whichever is later.
5. N.Y. Banking Law § 142-b (McKinney 1987).
6 . Fleet
Financial
Group,
Inc.,
7 0 F E D E R A L RESERVE B U L L E T I N
834 (1984) (Maine and Connecticut statutes); Norstar Bancorp Inc., 69
FEDERAL RESERVE BULLETIN 306 (1983). The Rhode Island Department of Business Regulation, Banking Division, has informed the
Board that the application raises no issues under Rhode Island law.
7. Conn. Gen. Stat. Ann. § 36-552(j) (West 1987). For purposes of
this provision, the N e w England region includes Connecticut, Maine,
Massachusetts, N e w Hampshire, Rhode Island, and Vermont.
8. Conn. Gen. Stat. Ann. § 36-553 (West 1987).
9. Fleet is required, of course, to comply with any divestiture
ordered by the Connecticut Banking Commissioner.
A64 Federal Reserve Bulletin • January 1988
Fleet and Norstar compete directly in the following
nine Maine banking markets: Bangor, Augusta, Farmington, Machias, Guilford, Calais, Lincoln, Millinocket, and Portland.
In the Bangor banking market, 10 Fleet is the largest
of six commercial banking organizations, controlling
$273.8 million in deposits, which represents 55.1 percent of the total deposits in that area. Norstar is the
second largest commercial banking organization in the
Bangor market, controlling $77.1 million in deposits,
which represents 15.5 percent of total deposits in
commercial banks in the market. The Bangor market is
highly concentrated, with the four largest commercial
banking organizations controlling 91.1 percent of the
deposits in commercial banks in this market. Upon
consummation of this proposal, Fleet would remain
the largest commercial banking organization, controlling $350.9 million in deposits, representing 70.6 percent of market share. The four-firm concentration ratio
in Bangor would increase 6 points to 97.1 percent and
the Herfindahl-Hirschman Index ("HHI") would increase by 1708 points to 5272. 11
In order to mitigate the adverse competitive effects
that would otherwise result from consummation of this
proposal, Fleet has committed to divest, on or before
consummation of the merger, three offices in the
Bangor market to a competitor that currently competes in this market. 12 In addition to Fleet's proposed
divestiture, the Board has considered the unusually
strong competition from the three state-chartered savings banks in the Bangor market. These factors and
other market characteristics substantially mitigate the
anticompetitive effects of the combination of Fleet and
Norstar in this market.
10. The Bangor banking market includes the Bangor Metropolitan
Statistical Area ("MSA") plus Alton, Amherst, Argyle, Bradford,
Bradley, Carmel, Charlestown, Clifton, Corinth/East Corinth, Dixmont, Etna, Greenbush, Greenfield, Hudson, LaGrange, Levant,
Milford, Newburgh and Stetson in Penobscot County; Bucksport,
Castine, Dedham, Orland, Otis and Verona in Hancock County; and
Frankfort, Prospect and Stockton Springs in Waldo County.
11. Under the revised Department of Justice Merger Guidelines, 49
Federal Register 26,823 (June 29, 1984), a market in which the
post-merger HHI is above 1800 is considered highly concentrated. In
such markets, the Department is likely to challenge a merger that
increases the HHI by more than 50 points. The 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 at least 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 limited-purpose lenders and other
non-depository financial entities.
12. The Board's Policy with regard to divestitures intended to
remedy the anticompetitive effects resulting from a merger or acquisition proposal requires that divestitures must occur on or before
consummation. Barnett Banks of Florida, Inc., 68 FEDERAL RESERVE
B U L L E T I N 1 9 0 ( 1 9 8 2 ) ; InterFirst
BULLETIN 243 (1982).
Corporation,
6 8 FEDERAL RESERVE
The Board previously has indicated that thrift institutions have become, or have the potential to become,
major competitors of commercial banks. 13 Thrift institutions already exert a considerable competitive influence in the market as providers of a wide array of
deposit and lending services to consumer and commercial customers. The three state-chartered savings
banks operating in the Bangor banking market are
sizable and provide substantial competition to the six
commercial banks in the market for a full range of
financial services. These thrifts control 45.8 percent of
the market's deposits and rank as the second, third,
and fourth largest depository institutions in the market.
Moreover, all three savings banks in the Bangor
market conduct a commercial banking business as
authorized under Maine law and offer a full range of
financial services. In particular, thrifts provide a full
array of commercial banking services in addition to
offering traditional thrift products. For example, the
ratio of commercial and industrial loans (other than
those secured by real estate) to total assets for thrifts
in the market is approximately 6.1 percent, well above
the 2.2 percent average for thrifts on a nationwide
basis. Moreover, the number of commercial demand
deposit accounts in the savings banks is significant.
Thrifts in the Bangor market have commercial lending officers and active commercial lending departments. A significant portion of small businesses in the
Bangor market recently secured financing from a savings bank located in the Bangor market. On the basis
of these factors, particularly the competition offered
by savings banks in the commercial market, the Board
finds that consummation of this proposal will not have
a signifcant effect on competition in this banking
market. 14
In the Augusta banking market, 15 Fleet is the second
13. National City Corporation, 70 FEDERAL RESERVE BULLETIN
743 (1984); The Chase Manhattan Corporation, 70 FEDERAL RESERVE
B U L L E T I N 5 2 9 ( 1 9 8 4 ) ; NCNB
Bancorporation,
7 0 F E D E R A L RESERVE
BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL
RESERVE BULLETIN 802 (1983); First Tennessee Corporation,
69
FEDERAL RESERVE B U L L E T I N 2 9 8 ( 1 9 8 3 ) .
14. The Board previously has indicated the appropriateness of
considering market factors in a specific market, including thrift
deposits at a level greater than 50 percent, when analyzing the
anticompetitive effects of a proposal. Hartford National
Corporation,
7 3 F E D E R A L RESERVE B U L L E T I N 7 2 0 ( 1 9 8 7 ) .
If 75 percent of the deposits controlled by thrift institutions in the
Bangor market were included with the proposed divestiture, Fleet
would rank first among banks and thrifts in the market, controlling a
combined 36.5 percent of the market's deposits. The HHI would
increase 200 points to 2128.
15. The Augusta banking market consists of Kennebec County plus
the Somerset County townships of Canaan, Fairfield and Smithfield;
the Waldo County townships of Freedom, Palermo, Thorndike, Troy
and Unity; the Lincoln County townships of Jefferson, Somerville,
and Whitefield; the Kennebec County townships of Hibbets Gore; and
the Knox County township of Washington.
Legal Developments
largest of six commercial banking organizations, controlling $106.0 million in deposits, which represents
24.3 percent of total deposits in commercial banks in
the market. Norstar is the third largest commercial
banking organization in Augusta, controlling $88.6
million in deposits, which represents 20.3 percent of
total deposits in commercial banks in that market. The
Augusta banking market is highly concentrated with
the four largest commercial banks controlling 92.0
percent of deposits in that area. Following acquisition
of Norstar, Fleet would be the largest commercial
banking organization in the market, controlling 44.6
percent of the deposits in commercial banks in the
market. The four-firm concentration ratio would increase by 7.3 points to 99.3 percent and the HHI for
the market would increase by 983 points to 3600. As in
the Bangor market, however, thrift institutions are
significant competitors in the market. Accordingly, on
the basis of thrift competition in the Augusta market,
the Board concludes that consummation of the proposal would not have a substantial adverse competitive effect in this banking market. 16
In the Farmington 17 and Machias 18 banking markets, Fleet would become the largest commercial
banking organization in the market upon consummation of the proposal. Each market is highly concentrated, with the four largest banks controlling 95.4 and
100 percent respectively of the deposits in commercial
banks in the market. In Guilford, 19 Fleet would be the
only commercial banking organization in the market.
In order to alleviate the anticompetitive effects that
would otherwise result from consummation of this
proposal, Fleet has committed to divest some of its or
Norstar's offices in these markets on or prior to the
proposed merger. These divestitures and the significant influence of thrift institutions in these markets
mitigate the anticompetitive effect of this proposal. 20
16. If thrift institutions are included in the analysis at 50 percent,
Fleet and Norstar would control 28.5 percent of the total market
deposits. The HHI would increase by 418 points to 1773.
17. The Farmington banking market consists of Livermore and
Livermore Falls in Androscoggin County; Avon, Carrabasset Valley,
Chesterville, Crockertown, Farmington, Freeman, Industry, Jay, Jerusalem, Kingfield, Madrid, Mount Abraham, N e w Sharon, N e w
Vineyard, Perkins, Phillips, Salem, Strong, Temple, Washington,
Weld and Wilton in Franklin County; and the township of N e w
Portland in Somerset County.
18. The Machias banking market is comprised of the southern
portion of Washington County.
19. The Guilford banking market consists of the southern portion of
Piscataquis County.
20. The following data indicates the market share and the change in
the HHI if 50 percent of the deposits controlled by thrift institutions
and the described divestitures were included in the calculation of
market concentration in these banking markets:
In the Farmington market, Fleet and Norstar would control 22.4
percent of the total market deposits. The HHI would increase by 207
points to 1941. However, Fleet proposes to divest to the most
commercially active thrift institution in Maine.
65
The adverse competitive effects of this proposal in
the Calais, Lincoln, and Millinocket markets are mitigated by Fleet's commitment to divest either its
offices or Norstar's offices in these markets prior to or
concurrent with consummation of the proposal. On the
basis of these divestiture commitments, the Board
concludes that consummation of the proposal would
have no significant adverse effect in any of these
banking markets.
In the Portland market, consummation of the proposal would result in an increase of less than 50 points
in the HHI and Fleet/Norstar would control less than
10 percent of the deposits in commercial banks in the
market. 21 Accordingly, the Board concludes that consummation of the proposal would have no significant
adverse effect in this market.
On the basis of the above facts and other facts of
record, the Board finds that consummation of Fleet's
proposal would not have a significant adverse effect on
existing competition in any relevant market. The
Board also has considered the effects of Fleet's proposal on probable future competition in markets in
which Fleet and Norstar do not both compete. In light
of the market concentration and the number of probable future entrants into the markets, the Board concludes that consummation of this proposal would not
have a significant adverse effect on probable future
competition in any relevant market.
The financial and managerial resources of Fleet and
Norstar are consistent with approval. N o additional
debt will be incurred in connection with the proposal.
In addition, Fleet's existing and pro forma consolidated capital levels are above the Board's minimum
guidelines and exceed peer group averages. 22 Considerations relating to the convenience and needs of the
communities to be served by Fleet's and Norstar's
subsidiary banks also are consistent with approval of
this application.
Fleet also has applied, pursuant to section 4(c)(8), to
acquire certain nonbanking subsidiaries of Norstar.
Fleet operates leasing, mortgage banking, discount
In the Machias market, Fleet and Norstar would control 19.0
percent of the total market deposits. The HHI would increase by 42
points to 2651.
In the Guilford market, Fleet and Norstar would control 46.9
percent of the total market deposits. The HHI would increase by 97
points to 3618. Fleet proposes to divest to a company that does not
currently operate in the market.
21. The Portland banking market consists of the Portland Ranally
Metropolitan Area ("RMA") plus Baldwin, Casco, Naples, Pownal,
and Sebago in Cumberland County; and Dayton, Hollis, Kennebunk,
Kennebunkport, Limington, Lyman, and North Kennebunkport in
York County.
22. Capital Adequacy Guidelines for Bank Holding Companies and
State Member Banks, 12 C.F.R. Part 225, Appendix A.
A66 Federal Reserve Bulletin • January 1988
brokerage services, and consumer and commercial
lending subsidiaries that directly compete with Norstar and its subsidiaries in these activities. Consummation of the proposal, however, would have a de
minimis effect on existing competition in each of
these markets and there are numerous competitors for
these services. Accordingly, the Board concludes
that the proposal would not have any significant adverse effect on existing or probable future competition
in any relevant market. Furthermore, there is no
evidence in the record to indicate that approval of this
proposal would result in undue concentration of resources, decreased or unfair competition, conflicts of
interest, unsound banking practices, or other adverse
effects on the public interest. Accordingly, the Board
has determined that the balance of public interest
factors it must consider under section 4(c)(8) of the
Act is favorable and consistent with approval of the
applications to acquire the nonbanking subsidiaries of
Norstar.
Based on the foregoing and other facts of record, the
Board has determined that the applications under
sections 3 and 4 of the Act and the Bank Merger Act
should be and hereby are approved, subject to Fleet's
commitments and divestiture proposals. This approval
is also subject to the condition that Fleet obtain all
required state approvals and comply with any required
divestitures under state law. The acquisition of Norstar shall not be consummated before the thirtieth
calendar day following the effective date of this Order,
or later than three months after the effective date of
this Order, unless such period is extended for good
cause by the Board or by the Federal Reserve Bank of
Boston, acting pursuant to delegated authority. The
determinations as to Fleet's nonbanking activities are
subject to all of the conditions contained in Regulation
Y, including those in sections 225.4(d) and 225.23(b)(3)
(12 C.F.R. §§ 225.4(d) and 225.23(b)(3)), and to the
Board's authority to require such modification or
termination of the activities of a holding company or
any of its subsidiaries as the Board finds necessary to
assure compliance with the provisions and purposes of
the Act and the Board's regulations and orders issued
thereunder, or to prevent evasion thereof.
By order of the Board of Governors, effective
November 9, 1987.
Voting for this action: Vice Chairman Johnson and Governors Seger and Heller. Voting against this action: Governor
Angell. Absent and not voting: Chairman Greenspan and
Governor Kelley.
JAMES M C A F E E
[SEAL]
Associate
Secretary
of the Board
APPENDIX
A
Nonbanking Subsidiaries To Be Acquired
Norstar Leasing Services, Inc., and thereby engage in
equipment leasing and certain commercial lending
activities; Norstar Auto Lease, Inc., and thereby
engage in automobile leasing; Norstar Investment Advisory Services, Inc., and thereby engage in activities
providing portfolio management, investment advice,
and consumer financial counseling; Norstar Trust
Company, and thereby engage in trust and financial
management services; Norstar Mortgage Corporation,
and thereby engage in residential mortgage loan origination and servicing and the provision of related
advisory services; Chapdelaine & Company Government Securities, Inc., and thereby engage in acting as
a broker of government securities on behalf of other
brokers who are principal dealers in such securities;
Norlife Reinsurance Company, and thereby engage in
acting as a reinsurer of credit life, credit accident and
health insurance and mortgage life and mortgage accident and health insurance sold in connection with
extensions of credit to consumers; Adams, McEntee
& Company, Inc., and thereby engage in the sale and
underwriting of state and municipal securities and
brokerage of certain mutual fund shares; Altman,
Brown & Everett, Inc., and thereby engage in actuarial and employee benefits consulting services; Norstar
Brokerage Corporation and its wholly owned subsidiary, N B Clearing Corporation, and thereby engage in
retail discount brokerage services; Norstar Data Services, Inc., and thereby provide data processing services to affiliates of parent company and, in the past,
to third persons; and Norstar Trust Company of Florida, N . A . , and thereby engage in general trust services. The Board has determined that these activities
are closely related to banking and permissible for bank
holding companies. 12 C.F.R. §§ 225.23(b)(1), (3),
(4), (5), (7), (8), (15), (16), (20) and the Board's Orders
dated June 19, 1985 and August 19, 1986.
Dissenting
Statement
of Governor
Angell
I believe this application raises serious questions concerning the sufficiency of the research data used in
analyzing the anticompetitive effects of mergers and
acquisitions especially in those markets with a small
number of financial competitors. Without adequate
empirical research, I am concerned that the Board will
approve transactions with substantial anticompetitive
effects especially in the areas of small business and
agricultural lending. I believe it is important for the
Board to determine the extent and nature of the
services that actually are provided by the competitors
Legal Developments
of banks in these markets, and I would encourage
applicants to provide this information in the future.
November 10, 1987
Orders Issued Under the Bank Merger Act
Valley Bank of Nevada
Las Vegas, Nevada
Order Approving
the Merger of Banks
Valley Bank of Nevada, Las Vegas, Nevada
("Valley"), the sole subsidiary of Valley Capital Corporation, Las Vegas, Nevada, a bank holding company within the meaning of the Bank Holding Company Act, has applied for the Board's approval under
the Bank Merger Act (12 U.S.C. § 1828(c)) to merge
with Security Bank of Nevada, Reno, Nevada ("Security"), under the charter and title of Valley.
Notice of this application, affording interested persons an opportunity to submit comments and views,
has been given in accordance with the Bank Merger
Act and the Board's Rules of Procedure (12 C.F.R.
§ 262.3(b)). As required by the Bank Merger Act,
reports of the competitive effects of the merger were
requested from the United States Attorney General,
the Comptroller of the Currency, and the Federal
Deposit Insurance Corporation. The time for filing
comments has expired and the Board has considered
the application and all comments received in light of
the factors and considerations set forth in the Bank
Merger Act.
Valley is the second largest of fifteen banking organizations in Nevada, controlling $1.3 billion in deposits, which represents 21.3 percent of the total deposits
in commercial banks in the state. 1 Security is the fifth
largest commercial banking organization in Nevada,
controlling $429.0 million in deposits, which represents 7.3 percent of the total deposits in commercial
banks in the state. Upon consummation of the proposed merger, Valley will remain the second largest
commercial banking organization in Nevada, controlling $1.7 billion in deposits, representing 28.6 percent
of total deposits in commercial banks in the state.
Consummation of this proposal would not have any
significant adverse effect on the concentration of banking resources in Nevada.
Valley and Security compete directly in the
Las Vegas, Douglas County, Reno and Carson City
banking markets. 2 In the Las Vegas banking
1. State deposit data are as of December 31, 1986.
2. Market data are as of June 30, 1986.
67
market, 3 Valley is the second largest of eleven commercial banking organizations, controlling $743.0 million in deposits, which represents 31.8 percent of total
deposits in commercial banks in the market. Security
is the seventh largest commercial banking organization
in the Las Vegas market, controlling $60 million in
deposits, which represents 2.6 percent of total deposits in commercial banks in the market. The Las Vegas
banking market is highly concentrated, with the four
largest commercial banks controlling 90.9 percent of
the total deposits in commercial banks in the market.
Following the proposed merger, Valley would remain
the second largest commercial banking organization in
the market, controlling 34.4 percent of total deposits in
commercial banks. The Las Vegas market would
remain highly concentrated and the HerfindahlHirschman Index ("HHI") 4 would increase by 163
points to 3175.
In the Douglas County banking market, 5 Valley is
the smallest of five commercial banking organizations,
controlling $8.0 million in deposits, which represents
5.2 percent of total deposits in commercial banks in
the market. Security is the fourth largest commercial
banking organization in the market, controlling $17.0
million in deposits, which represents 11.0 percent of
total deposits in commercial banks in the market. The
Douglas County banking market is highly concentrated, with the four largest commercial banks controlling 94.9 percent of total deposits in commercial banks
in the market. Following the proposed merger, Valley
would become the second largest commercial banking
organization in the market, controlling 16.2 percent of
total deposits in commercial banks. The Douglas
County market would remain highly concentrated, and
the HHI would increase by 114 points to 3745.
In the Reno banking market, 6 Valley is the third
largest of five commercial banking organizations, controlling $148 million in deposits, which represents 9.9
percent of total deposits in commercial banks in the
market. Security is the second largest commercial
3. The Las Vegas, Nevada banking market is approximated by the
Las Vegas Rand McNally Metropolitan Area ("RMA").
4. Under the revised Department of Justice Merger Guidelines (49
Federal Register 26,823 (1984)) a market in which the post-merger
HHI is over 1800 is considered concentrated. In such markets, the
Department is likely to challenge a merger that increases the HHI by
more than 50 points. The Department has informed the Board that a
bank merger or acquisition generally will not be challenged (in the
absence of other factors indicating anti-competitive effects) unless the
post-merger HHI is at least 1800 and the merger increases the HHI by
at least 200 points. The Justice Department has stated that the higher
than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of
limited purpose lenders and other non-depository financial entities.
5. The Douglas County banking market is approximated by Douglas County, Nevada.
6. The Reno, Nevada banking market is approximated by the Reno
RMA.
A68 Federal Reserve Bulletin • January 1988
banking organization in the Reno market, controlling
$237 million in deposits, which represents 15.8 percent
of total deposits in commercial banks in the market.
The Reno banking market is highly concentrated, with
the four largest commercial banks controlling 95.5
percent of total deposits in commercial banks in the
market. Following the proposed merger, Valley would
become the second largest commercial banking organization in the market, controlling 25.7 percent of total
deposits in commercial banks. The Reno market
would remain highly concentrated and the HHI would
increase by 313 points to 3871.
In the Carson City banking market, 7 Valley is the
second largest of six commercial banking organizations, controlling $71.0 million in deposits, which
represents 25.1 percent of the deposits in commercial
banks. Security is the third largest commercial banking organization in the market, controlling $39.0 million in deposits, which represents 13.9 percent of total
deposits in commercial banks in the market. The
Carson City market is highly concentrated, with the
four largest commercial banks controlling 87.6 percent
of total deposits there. Upon consummation of this
proposal, Valley would become the largest commercial banking organization in the market, controlling
$110.0 million in deposits, representing 39.0 percent of
the market share. The market would remain highly
concentrated, and the HHI would increase by 698
points to 3029.
Consummation of the proposed merger would eliminate some existing competition between Valley and
Security in all four markets in which these banks
compete. The Board notes, however, that several
other commercial banking organizations would continue to operate in each market after consummation of
Valley's proposal. In addition, the Board has considered the presence of thrift institutions in these markets
in its analysis of the proposal. Thrift institutions account for a significant percentage of the total deposits
in each of these banking markets. The Board previously has indicated that thrift institutions have become, or have the potential to become, major competitors of commercial banks. 8 Thrift institutions already
exert a considerable competitive influence in the market as providers of NOW accounts and consumer
loans, and many are engaged in the business of making
commercial loans. Based upon the number, size, mar-
ket shares and commercial lending activities of thrift
institutions in their markets, the Board has concluded
that thrift institutions exert a significant competitive
influence that mitigates the anti-competitive effects of
this proposal in all four banking markets. 9
On the basis of the above facts and other facts of
record, the Board concludes that consummation of
Valley's proposal would not have a significantly adverse effect on existing competition in any relevant
market.
The Board also has considered the effects of Valley's proposal on probable future competition in the
markets in which Valley and Security do not
compete. 1 0 In light of the attractiveness of a given
market for entry on a de novo basis, the Board
concludes that consummation of this proposal would
not have a significant adverse effect on probable future
competition in any relevant market.
The Board also has considered Valley's managerial
resources, particularly with regard to previous violations of the Currency and Foreign Transactions Reporting Act (31 U.S.C. § 5311 et seq.) ("CFTRA")
uncovered at Valley's report of examination in June
1985. When reporting violations were discovered, Valley initiated a comprehensive internal audit of CFTRA
compliance at each of its branch offices. 11 Valley also
undertook comprehensive remedial and preventative
9. The following data indicate the market share and the change in
the H H I if 50 percent of the deposits controlled by thrift institutions
were included in the calculation of market concentration after consummation of this proposal:
In the Las Vegas market, Valley and Security would control 19.7
percent and 1.6 percent of total market deposits, respectively, and the
H H I would increase by 63 points to 1639.
In the Douglas County market, Valley and Security would control
4.1 percent and 8.4 percent of total deposits, respectively, and the
H H I would increase by 34 points to 2415.
In the Reno County market, Valley and Security would control 7.6
percent and 12.1 percent of total market deposits, respectively, and
the H H I would increase by 182 points to 2530.
In addition to the market share that thrift institutions have in the
Carson City market, the Board notes that 70 percent of Valley's
deposits is represented by state government deposits. Valley's market
share in that market (25.1 percent) drops significantly if only individual, partnership and corporation ("IPC") deposits are included in the
analysis. The Board has previously determined that IPC deposits may
be the proper focus of the competitive analysis in mergers and
acquisitions in markets, such as those including state capitals, in
which government deposits constitute a relatively large share of total
deposits. See, for example, United Bank Corporation of New York, 66
FEDERAL RESERVE BULLETIN 6 1 ( 1 9 8 0 ) . B a s e d o n I P C d e p o s i t s o n l y ,
7. The Carson City, N e v a d a banking market is approximated by the
Carson City R M A .
8. National
City Corporation,
7 0 FEDERAL RESERVE BULLETIN 7 4 3
( 1 9 8 4 ) ; The Chase
Manhattan
Corporation,
7 0 FEDERAL RESERVE
BULLETIN 5 2 9 ( 1 9 8 4 ) ; NCNB
Bancorporation,
7 0 FEDERAL RESERVE
BULLETIN 225 (1984); General Bancshares
Corporation,
RESERVE BULLETIN 8 0 2 ( 1 9 8 3 ) ; First
Tennessee
FEDERAL RESERVE BULLETIN 2 9 8 ( 1 9 8 3 ) .
69 FEDERAL
Corporation,
69
and with the inclusion of the deposits of the market's four thrift
institutions included at 50 percent, Valley and Security would control
6.7 percent and 12.7 percent of total deposits, respectively, and the
HHI would increase by 168 points to 1711.
10. "Policy Statement of the Board of Governors of the Federal
Reserve System for Assessing Competitive Factors Under the Bank
Merger Act and the Bank Holding Company A c t , " 47 Federal
Register 9017 (March 3, 1982).
11. Based on a report of this audit, the Department of Treasury has
assessed $192,000 in civil money penalties against Valley.
Legal Developments
actions. It installed an updated computer software
package which aggregates cash transactions among all
of Valley's branches and also provides a mechanism
for centralized verification of currency transaction
reports. Valley also established CFTRA training for all
bank employees and included CFTRA compliance as a
topic in all officer continuing education programs. In
addition, Valley appointed a CFTRA compliance officer for each branch and charged its Audit Department with the ongoing assessment of the bank's exempt lists and currency transaction reports. The Board
has considered these measures as well as Valley's
improved CFTRA performance and its ongoing cooperation with all law enforcement and regulatory authorities. Based on these considerations, Valley's assurances, and all other facts of record, the Board
concludes that Valley's overall compliance with
CFTRA is satisfactory and that Valley's managerial
resources therefore are consistent with approval of
this proposal.
The financial resources of Valley and Security are
consistent with approval of this merger proposal. In
ORDERS
APPROVED
By Federal Reserve
UNDER
BANK
HOLDING
69
addition, considerations relating to the convenience
and needs of the communities to be served by Valley
and Security also are consistent with approval.
Based on the foregoing and all other facts of record,
and subject to Valley's assurances and commitments,
the Board has determined that this application under
the Bank Merger Act should be and hereby is approved. The merger of Security with Valley shall not
be consummated before the thirtieth calendar day
following the effective date of this Order or later than
three months after the effective date of this Order,
unless such period is extended for good cause by the
Board or by the Federal Reserve Bank of San Francisco, pursuant to delegated authority.
By order of the Board of Governors, effective November 30, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Heller, and Kelley.
JAMES M C A F E E
[SEAL]
COMPANY
Associate
Secretary
of the
Board
ACT
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
A & P Holding Co.,
North Branch, Minnesota
A T Acquisition Corporation,
Cleveland, Ohio
Ameritrust Corporation,
Cleveland, Ohio
Ameritrust Indiana Corporation,
Cleveland, Ohio
Bank(s)
Community National Bank,
North Branch, Minnesota
Midwest National Bank,
Indianapolis, Indiana
Midwest National Bank,
Indianapolis, Indiana
A T Acquisition Corporation,
Cleveland, Ohio
Reserve
Bank
Effective
date
Minneapolis
November 25, 1987
Cleveland
November 6, 1987
Cleveland
November 5, 1987
Cleveland
November 6, 1987
A70 Federal Reserve Bulletin • January 1988
Section 3—Continued
Applicant
Atlantic Bancorporation,
Voorhees, New Jersey
Bank of Montreal,
Montreal, Quebec, Canada
Bankmont Financial Corp.,
New York, N e w York
Harris Bankcorp, Inc.,
Chicago, Illinois
BankFirst Corp.,
McLean, Virginia
BCB Financial Services
Corporation,
Reading, Pennsylvania
BMR Bancorp, Inc.,
Atlanta, Georgia
Bankworcester Corporation,
Worcester, Massachusetts
Berthoud Bancorp Employee
Stock Ownership Plan,
Berthoud, Colorado
C & L Banking Corporation,
Bristol, Florida
CNB Bancorp, Inc.,
Danville, Illinois
Cardinal Bancshares, Inc.,
Lexington, Kentucky
Chillicothe Bancshares, Inc.,
Chillicothe, Missouri
Citizens Financial Corporation
Employee Stock Ownership
Plan and Trust,
Fort Atkinson, Wisconsin
Dublin Bancshares, Inc.,
Dublin, Texas
Eldorado Bancorp,
Tustin, California
Elkcorp., Inc.,
Clyde, Kansas
Embry Bankshares, Inc.,
Atlanta, Georgia
ENB Holding Company,
Escondido, California
F & M Financial Services
Corporation,
Menomonee Falls, Wisconsin
Fifth Third Bancorp,
Cincinnati, Ohio
1st American Bancorp, Inc.,
Boston, Massachusetts
Bank(s)
Reserve
Bank
Effective
date
Glendale Bank of Pennsylvania,
Philadelphia, Pennsylvania
Commercial State Bank,
Phoenix, Arizona
Philadelphia
November 16, 1987
Chicago
November 4, 1987
Bank First, N.A.,
McLean, Virginia
Berks County Bank (In
Organization),
Reading, Pennsylvania
Citizens Bank of Americus,
Americus, Georgia
Worcester County Institution for
Savings,
Worcester, Massachusetts
Berthoud Bancorp, Inc.,
Berthoud, Colorado
Richmond
November 10, 1987
Philadelphia
October 30, 1987
Atlanta
October 27, 1987
Boston
November 12, 1987
Kansas City
October 23, 1987
C & L Bank of Bristol,
Bristol, Florida
Lake Shore National Bank,
Danville, Illinois
Union Bank and Trust Company,
Irvine, Kentucky
Bosworth Bancshares, Inc.,
Chillicothe, Missouri
Citizens Financial Corporation,
Fort Atkinson, Wisconsin
Atlanta
November 13, 1987
Chicago
October 26, 1987
Cleveland
November 19, 1987
Kansas City
November 25, 1987
Chicago
November 25, 1987
Dallas
November 20, 1987
First National Bank of Dublin,
Dublin, Texas
American Merchant Bank,
Newport Beach, California
The Elk State Bank,
Clyde, Kansas
Embry National Bank,
Atlanta, Georgia
San Marcos National Bank,
San Marcos, California
Citizens Community Bankshares,
Inc.,
Wittenberg, Wisconsin
Firstbancorporation of Batesville,
Batesville, Indiana
1st American Bank for Savings,
Boston, Massachusetts
San Francisco November 24, 1987
Kansas City
October 21, 1987
Atlanta
October 29, 1987
San Francisco October 26, 1987
Chicago
October 28, 1987
Cleveland
November 6, 1987
Boston
November 19, 1987
Legal Developments
71
Section 3—Continued
.
Applicant
First Business Bancshares of
Kansas City, Inc.,
Kansas City, Missouri
First City, Inc.,
Memphis, Tennessee
First Empire State Corporation,
Buffalo, New York
First Financial Corporation,
Terre Haute, Indiana
First Mid-Illinois Bancshares,
Inc.,
Mattoon, Illinois
First National Cincinnati
Corporation,
Cincinnati, Ohio
First National Hayes Center
Corp.,
Hayes Center, Nebraska
First of America Bank
Corporation,
Kalamazoo, Michigan
First Peoples Financial
Corporation,
Haddon Township, New Jersey
First Security Corporation of
Kentucky,
Lexington, Kentucky
First Security Affiliates, Inc.,
Lexington, Kentucky
First Southern Bancorp, Inc.,
Stanford, Kentucky
First Sun Capital Corporation,
Columbia, South Carolina
First Union Corporation,
Charlotte, North Carolina
FMB Financial Holdings, Inc.,
Fayetteville, Georgia
FNB Financial Corp.,
Scottsville, Kentucky
FNB Financial Corporation,
McConnellsburg, Pennsylvania
Golden Bancshares, Inc.,
Golden, Illinois
„ , ,x
Bank(s)
Reserve
Bank
First Business Bank of Kansas City, Kansas City
National Association,
Kansas City, Missouri
First City, A Federal Savings Bank, St. Louis
Memphis, Tennessee
N e w York
The East New York Savings Bank,
New York, New York
Chicago
FSB Corporation,
Sullivan, Indiana
Chicago
Eagle Bank of Charleston,
Charleston, Illinois
Effective
date
November 25, 1987
November 2, 1987
October 30, 1987
November 13, 1987
November 20, 1987
First Sidney Banc Corp.,
Sidney, Ohio
Cleveland
October 28, 1987
American State Bank,
McCook, Nebraska
Kansas City
November 19, 1987
Erie Financial Corp.,
Monroe, Michigan
Chicago
November 23, 1987
First Bank of Philadelphia,
Philadelphia, Pennsylvania
Philadelphia
November 6, 1987
State Financial Bancshares, Inc.,
Richmond, Kentucky
Cleveland
November 25, 1987
Nabanco, Inc.,
Lancaster, Kentucky
Lincoln County National Bank,
Stanford, Kentucky
First State Bank of Wayne County,
Monticello, Kentucky
Columbia Bancorp, Inc.,
Columbia, South Carolina
Bank of Bellevue,
Nashville, Tennessee
Farmers and Merchants Bank,
Fayetteville, Georgia
Farmers National Bank,
Scottsville, Kentucky
The First National Bank of
McConnellsburg,
McConnellsburg, Pennsylvania
Golden State Bank,
Golden, Illinois
Cleveland
November 19, 1987
Richmond
November 6, 1987
Richmond
November 20, 1987
Atlanta
November 6, 1987
St. Louis
November 18, 1987
Philadelphia
October 26, 1987
St. Louis
November 4, 1987
A72 Federal Reserve Bulletin • January 1988
Section 3—Continued
Applicant
Gower Bancshares, Inc.,
Gower, Missouri
Heritage Enterprises II,
Fayetteville, Georgia
Intrex Financial Services, Inc.,
Lawrence, Massachusetts
Kanbanc, Inc.,
Shawnee Mission, Kansas
Laddonia State Bancshares, Inc.,
Laddonia, Missouri
Langdon Bank Holding Company,
Walhalla, North Dakota
Lincoln Financial Corporation,
Fort Wayne, Indiana
Linton Bancshares, Inc.,
Bismarck, North Dakota
Litchfield Bancshares Company,
Litchfield, Illinois
Magna Group, Inc.,
Belleville, Illinois
Magna Group, Inc.,
Belleville, Illinois
MCB Acquisition Company,
Belleville, Illinois
Marine Corporation,
Springfield, Illinois
Marion Bancshares Inc.,
Marion, Alabama
Maryville Bancshares, Inc.,
Chillicothe, Missouri
Merchants Bancshares, Inc.,
Bay St. Louis, Mississippi
Mid-Mo Bancshares, Inc.,
Auxvasse, Missouri
Minonk Bancshares, Inc.,
Minonk, Illinois
National Bancorp, Inc.,
Melrose Park, Illinois
Bank(s)
Farmers Bank of Gower,
Gower, Missouri
FMB Financial Holdings, Inc.,
Fayetteville, Georgia
Lawrence Savings Bank,
Lawrence, Massachusetts
Farmers State Bank of Walnut,
Walnut, Kansas
Laddonia State Bank,
Laddonia, Missouri
First Bank of Langdon,
Langdon, North Dakota
Harbor Country Banking
Corporation,
Three Oaks, Michigan
The First National Bank of Linton,
Linton, North Dakota
Litchfield National Bank,
Litchfield, Illinois
The First National Bank of Wood
River,
Wood River, Illinois
McLean County Bancshares, Inc.,
Bloomington, Illinois
Commercial Bancshares, Inc.,
Champaign, Illinois
Marion Bank & Trust Company,
Marion, Alabama
Savannah Bancshares, Inc.,
Chillicothe, Missouri
Merchants Bank & Trust Company,
Bay St. Louis, Mississippi
Security Bank of Auxvasse,
Auxvasse, Missouri
Washburn Bancshares, Inc.,
Washburn, Illinois
The American National Bank of
DeKalb,
DeKalb, Illinois
Kanabec State Bank,
New Bank of Mora,
Mora, Minnesota
Mora, Minnesota
North Arkansas Bancshares, Inc., First State Bank of Newport,
Newport, Arkansas
Jonesboro, Arkansas
Northern Financial, Inc.,
Presque Isle Bank,
Rogers City, Michigan
Rogers City, Michigan
Selin Corporation,
Northland Insurance Agency,
Chicago, Illinois
Inc., Chicago, Illinois
Reserve
Bank
Effective
date
Kansas City
November 19, 1987
Atlanta
November 6, 1987
Boston
November 12, 1987
Kansas City
November 25, 1987
St. Louis
November 2, 1987
Minneapolis
October 26, 1987
Chicago
November 17, 1987
Minneapolis
November 24, 1987
St. Louis
November 20, 1987
St. Louis
November 3, 1987
St. Louis
November 3, 1987
Chicago
October 22, 1987
Atlanta
October 30, 1987
Kansas City
November 25, 1987
Atlanta
October 23, 1987
St. Louis
October 23, 1987
Chicago
November 5, 1987
Chicago
November 20, 1987
Minneapolis
November 24, 1987
St. Louis
November 16, 1987
Chicago
November 12, 1987
Chicago
November 10, 1987
Legal Developments
73
Section 3—Continued
Applicant
Old National Bancorp,
Evansville, Indiana
Pikeville National Corporation,
Pikeville, Kentucky
Riggs National Corporation,
Washington, D.C.
Roseville Bankshares, Inc.,
Roseville, Illinois
Royal Bancshares, Inc.,
Farmers Branch, Texas
St. Croix Banco, Inc.,
New Richmond, Wisconsin
Polk County Banco, Inc.,
Balsam Lake, Wisconsin
Salem Bancorp, Inc.,
Salem, Kentucky
Sandy Spring Bancorp, Inc.,
Olney, Maryland
Security Bancshares of Marion
County, Inc.,
Springfield, Kentucky
Security Chicago Corp.,
Chicago, Illinois
Selin Corporation,
Chicago, Illinois
Shelby Bancshares, Inc.,
Bartlett, Tennessee
South Banking Company,
Alma, Georgia
SouthTrust Corporation,
Birmingham, Alabama
SouthTrust Corporation,
Birmingham, Alabama
The Summit Bancorporation,
Summit, New Jersey
Bank(s)
Farmers Bank & Trust Co.,
Madisonville, Kentucky
Commercial Bank of West Liberty,
West Liberty, Kentucky
The Riggs National Bank of
Maryland,
Rockville, Maryland
Roseville State Bank,
Roseville, Illinois
Centre National Bank-Farmers
Branch,
Farmers Branch, Texas
Stanley Bancorporation, Inc.,
Stanley, Wisconsin
Salem Bank, Inc.,
Salem, Kentucky
Sandy Spring National Bank of
Maryland,
Olney, Maryland
Peoples Bank,
Gravel Switch, Kentucky
OSWEGO BANCSHARES, INC.,
Oswego, Illinois
American National Bank,
South Chicago Heights, Illinois
American National Bank and Trust
Company of Waukegan,
Waukegan, Illinois
First National Bank of Crystal Lake,
Crystal Lake, Illinois
Gurnee National Bank,
Gurnee, Illinois
Wauconda National Bank and Trust
Company,
Wauconda, Illinois
Shelby Bank,
Bartlett, Tennessee
Georgia Peoples Bankshares,
Baxley, Georgia
First Bancshares, Inc.,
Marianna, Florida
Gulf/Bay Financial Corporation,
Tampa, Florida
Yardville National Bancorp,
Yardville, New Jersey
Reserve
Bank
Effective
date
St. Louis
November 20, 1987
Cleveland
November 6, 1987
Richmond
October 26, 1987
Chicago
November 20, 1987
Dallas
November 20, 1987
Minneapolis
November 19, 1987
St. Louis
November 10, 1987
Richmond
November 3, 1987
St. Louis
October 30, 1987
Chicago
November 19, 1987
Chicago
November 10, 1987
St. Louis
November 24, 1987
Atlanta
November 20, 1987
Atlanta
November 13, 1987
Atlanta
November 19, 1987
New York
October 30, 1987
A74 Federal Reserve Bulletin • January 1988
Section 3—Continued
Applicant
TJM Financial Corporation,
Lexington, Kentucky
Trustcorp, Inc.,
Toledo, Ohio
Trustcorp of Michigan, Inc.,
Adrian, Michigan
United Community Corporation,
Oklahoma City, Oklahoma
Bank(s)
First Farmers Bank and Trust Co.
Owenton, Kentucky
Ypsilanti Savings Bank,
Ypsilanti, Michigan
Kiamichi Bancshares, Inc.,
Hugo, Oklahoma
First Madill Bancorporation,
Madill, Oklahoma
First Prague Bancorporation, Inc.,
Prague, Oklahoma
Arbuckle Corporation, Inc.,
Sulphur, Oklahoma
Walhalla Bank Holding Company, Langdon BHC,
Langdon, North Dakota
Walhalla, North Dakota
The Washburn Bank,
Washburn Bancshares, Inc.,
Washburn, Illinois
Washburn, Illinois
McCreary Bancshares, Inc.,
Whitley City Bancshares, Inc.,
Whitley City, Kentucky
Whitley City, Kentucky
Reserve
Bank
Effective
date
St. Louis
November 10, 1987
Cleveland
November 16, 1987
Kansas City
October 27, 1987
Minneapolis
October 26, 1987
Chicago
November 5, 1987
Cleveland
November 5, 1987
Section 4
Applicant
Centerre Bancorporation,
St. Louis, Missouri
Cook Investment, Inc.,
Beatrice, Nebraska
Dakota Bankshares, Inc.
Fargo, North Dakota
First Bancorp of Tonkawa, Inc.,
Tonkawa, Oklahoma
First Bank System, Inc.,
Minneapolis, Minnesota
First Union Corporation,
Charlotte, North Carolina
Nonbanking Company/Activity
engage in the purchase, issuance
and servicing of consumer loans
through the issuance of credit
cards
establish Centerre Bank of Delaware,
New Castle, Delaware
Gage, Inc.,
Beatrice, Nebraska
provide data processing and data
transmission services, data bases,
and facilities that are for financial,
banking, and economic purposes
retain indirect control of Burton
Insurance Trust,
Tonkawa, Oklahoma
Erickson Agency, Inc.,
Minot, North Dakota
acquire certain assets of Ashley
Securities Corporation,
Naples, Florida
^Bank^
^cfote^
St. Louis
November 2, 1987
Kansas City
October 30, 1987
Minneapolis
October 23, 1987
Kansas City
October 28, 1987
Minneapolis
October 23, 1987
Richmond
November 10, 1987
Legal Developments
75
Section 4—Continued
Applicant
First Western Bancorporation,
La Jara, Colorado
Independent Bankshares, Inc.,
Abilene, Texas
Midwest Financial Group, Inc.
Peoria, Illinois
Republic Bancorp, Inc.,
Ann Arbor, Michigan
Security Pacific Corporation,
Los Angeles, California
SPC/RAB Acquisition
Corporation,
Los Angeles, California
Selin Corporation,
Chicago, Illinois
Signal Bancshares, Inc.,
West St. Paul, Minnesota
Sovran Financial Corporation,
Norfolk, Virginia
Nonbanking Company/Activity
^Bank^
^date^
continue to engage in general
insurance activities
First Independent Computers, Inc.,
Abilene, Texas
provide data processing and data
transmission services through a
joint venture with CCS Processing
Services, Inc.,
Maitland, Florida
Central Computing Company,
Decatur, Illinois
Mayflower Mortgage Corporation,
Plymouth, Michigan
retain certain insurance agency
activities of Rainier Mortgage
Company,
Seattle, Washington
Kansas City
November 13, 1987
Dallas
November 12, 1987
Chicago
October 29, 1987
Chicago
October 27, 1987
data processing and data
transmission services
certain assets of Hampton Agency,
Inc.,
Hampton, Minnesota
Dresser Leasing Corporation,
Pittsburgh, Pennsylvania
Chicago
November 10, 1987
Minneapolis
November 20, 1987
Richmond
October 26, 1987
San Francisco November 9, 1987
Sections 3 and 4
.
..
Cumberland Valley Bancshares,
Inc.,
Goodlettsville, Tennessee
First Cumberland Bank,
Madison, Tennessee
First National Agency, Inc., of
Cold Spring,
Cold Spring, Minnesota
Old Kent Financial Corporation,
Grand Rapids, Michigan
Banks/Nonbanking
Company/Activity
Reserve
Bank
Effective
date
Garrett Financial Services, Inc.,
Goodlettsville, Tennessee
Atlanta
November 16, 1987
First BancShares, Inc., of Cold
Spring,
Cold Spring, Minnesota
retain its general insurance agency
activities
First National Bank of Cold Spring,
Cold Spring, Minnesota
Illinois Regional Bancorp, Inc.,
Elmhurst, Illinois
Minneapolis
November 17, 1987
Chicago
October 29, 1987
A76 Federal Reserve Bulletin • January 1988
ORDERS ISSUED
UNDER BANK MERGER
Applicant
Bank One, Mansfield,
Mansfield, Ohio
Central Bank of the South,
Birmingham, Alabama
Chemical Bank Bay Area,
Bay City, Michigan
Citizens Trust and Savings Bank,
South Haven, Michigan
Comerica Bank—Detroit,
Detroit, Michigan
The Commercial Bank,
Bel Air, Maryland
First Community Bank—Adrian
Buckhannon, Inc.,
Buckhannon, West Virginia
Johnstown Bank and Trust
Company,
Johnstown, Pennsylvania
N e w c o Bank,
Ypsilanti, Michigan
Old Kent Bank and Trust
Company,
Grand Rapids, Michigan
Old Kent Bank and Trust
Company,
Grand Rapids, Michigan
Peoples Bank of Bloomington,
Bloomington, Illinois
State Bank of Freeport,
Freeport, Illinois
ACT
Bank(s)
Reserve
Bank
Effective
date
acquire certain assets and assume
certain liabilities of the Galion,
Ohio branch of Chase Bank of
Ohio,
Mentor, Ohio
Central Bank,
Cahaba Heights, Alabama
Chemical Bank Cass City,
Cass City, Michigan
CB Bank,
South Haven, Michigan
Comerica Bank—Livonia,
Livonia, Michigan
Comerica Bank—Metro East,
National Association,
Sterling Heights, Michigan
Comerica Bank—Metro West,
National Association,
Novi, Michigan
Comerica Bank—Southfield,
Southfield, Michigan
Comerica Bank—Troy,
Troy, Michigan
Comerica Bank—Warren, N . A . ,
Warren, Michigan
acquire three branches of Maryland
National Bank,
Baltimore, Maryland
First Community Bank, Inc.,
Princeton, West Virginia
Cleveland
November 4, 1987
Atlanta
October 23, 1987
Chicago
November 17, 1987
Chicago
November 9, 1987
Chicago
November 25, 1987
Richmond
October 23, 1987
Richmond
November 13, 1987
The First National Bank of
Avonmore,
Avonmore, Pennsylvania
Ypsilanti Savings Bank,
Ypsilanti, Michigan
Old Kent Bank of Greenville,
Greenville, Michigan
Old Kent Bank of Fremont,
Fremont, Michigan
Old Kent Bank of Kentwood,
Kentwood, Michigan
Philadelphia
November 6, 1987
Cleveland
November 16, 1987
Chicago
October 30, 1987
Chicago
November 12, 1987
The First National Bank of Normal,
Normal, Illinois
Rock City Bank,
Rock City, Illinois
Chicago
October 27, 1987
Chicago
November 19, 1987
Legal Developments
PENDING
CASES INVOLVING
THE BOARD
OF
GOVERNORS
This list of pending cases does not include suits against the Federal Reserve
Governors is not named a party.
National Association of Casualty and Surety Agents,
et al., v. Board of Governors, No. 87-1644 (D.C.
Cir., filed Nov. 4, 1987).
Teichgraeber v. Board of Governors, No. 87-2505-0
(D. Kan., filed Oct. 16, 1987).
Securities Industry Association v. Board of Governors, No. 87-4135 (2d Cir., filed Oct. 8, 1987).
Independent Insurance Agents of America, Inc. v.
Board of Governors, No. 87-4118 (2d Cir., filed
Sept. 17, 1987).
Citicorp v. Board of Governors, No. 87-1475 (D.C.
Cir., filed Sept. 9, 1987).
Securities Industry Association v. Board of Governors, No. 87-4115 (2d Cir., filed Sept. 9, 1987)
Board of Trade of the City of Chicago, et al. v. Board
of Governors, No. 87-2389 (7th Cir., filed Sept. 1,
1987).
Barrett v. Volcker, No. 87-2280 (D.D.C., filed August
17, 1987).
Northeast
Bancorp v. Board of Governors,
No.
87-1365 (D.C. Cir., filed July 31, 1987).
National Association of Casualty & Insurance Agents
v. Board of Governors, Nos. 87-1354, 87-1355 (D.C.
Cir., filed July 29, 1987).
The Chase Manhattan Corporation v. Board of Governors, No. 87-1333 (D.C. Cir., filed July 20, 1987).
Securities Industry Association v. Board of Governors, Nos. 87-4091, 87-4093, 87-4095 (2d Cir., filed
July 1 and July 15, 1987).
Lewis v. Board of Governors, Nos. 87-3455, 87-3545
(11th Cir., filed June 25, August 3, 1987).
Securities Industry Association v. Board of Governors, et al. No. 87-4041 and consolidated cases (2d
Cir., filed May 1, 1987).
Securities Industry Association v. Board of Governors, et al., No. 87-1169 (D.C. Cir., filed April 17,
1987).
Bankers Trust New York Corp. v. Board of Governors,
No. 87-1035 (D.C. Cir., filed Jan. 23, 1987).
77
Banks in which the Board of
Grimm v. Board of Governors, No. 87-4006 (2d Cir.,
filed Jan. 16, 1987).
Independent Insurance Agents of America, et al. v.
Board of Governors, Nos. 86-1572,1573,1576
(D.C.
Cir., filed Oct. 24, 1986).
of
Independent
Community
Bankers Association
South Dakota v. Board of Governors, No. 86-5373
(8th Cir., filed Oct. 3, 1986).
Jenkins v. Board of Governors, No. 86-1419 (D.C.
Cir., filed July 18, 1986).
Securities Industry Association v. Board of Governors, No. 86-1412 (D.C. Cir., filed July 14, 1986).
CBC, Inc. v. Board of Governors, No. 86-1001 (10th
Cir., filed Jan. 2, 1986).
Myers, et al. v. Federal Reserve Board, No. 85-1427
(D. Idaho, filed Nov. 18, 1985).
Souser, et al. v. Volcker, et al., No. 85-C-2370, et al.
(D. Colo., filed Nov. 1, 1985).
Podolak v. Volcker, No. C85-0456, et al. (D. Wyo.,
filed Oct. 28, 1985).
Kolb v. Wilkinson, et al., No. C85-4184 (N.D. Iowa,
filed Oct. 22, 1985).
Farmer v. Wilkinson, et al., No. 4-85-CIVIL-1448 (D.
Minn., filed Oct. 21, 1985).
Kurkowski v. Wilkinson, et al., No. CV-85-0-916 (D.
Neb., filed Oct. 16, 1985).
Alfson v. Wilkinson, et al., No. A l - 8 5 - 2 6 7 (D. N . D . ,
filed Oct. 8, 1985).
Independent
Community
Bankers Association
of
South Dakota v. Board of Governors, No. 84-1496
(D.C. Cir., filed Aug. 7, 1985).
Urwyler, et al. v. Internal Revenue Service, et al., No.
85-2877 (9th Cir., filed July 18, 1985).
Wight, et al. v. Internal Revenue Service, et al., No.
85-2826 (9th Cir., filed July 12, 1985).
Brown v. United States Congress,
et al., No.
84-2887-6(IG) (S.D. Cal., filed Dec. 7, 1984).
Melcher v. Federal Open Market Committee,
No.
86-5692 (D.C. Cir., filed Apr. 30, 1984).
A1
Financial and Business Statistics
CONTENTS
Domestic
WEEKLY REPORTING COMMERCIAL BANKS
Financial
Statistics
MONEY STOCK AND BANK CREDIT
Reserves, money stock, liquid assets, and debt
measures
A4 Reserves of depository institutions, Reserve
Bank credit
A5 Reserves and borrowings—Depository
institutions
A6 Selected borrowings in immediately available
funds—Large member banks
A19
A20
A21
A22
Assets and liabilities
All reporting banks
Banks in New York City
Branches and agencies of foreign banks
Gross demand deposits—individuals,
partnerships, and corporations
A3
POLICY INSTRUMENTS
A7
A8
A9
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 Bank debits and deposit turnover
A16 Loans and securities—All commercial banks
COMMERCIAL BANKING INSTITUTIONS
A17 Major nondeposit funds
A18 Assets and liabilities, last-Wednesday-of-month
series
FINANCIAL MARKETS
A23 Commercial paper and bankers dollar
acceptances outstanding
A23 Prime rate charged by banks on short-term
business loans
A24 Interest rates—money and capital markets
A25 Stock market—Selected statistics
A26 Selected financial institutions—Selected assets
and liabilities
FEDERAL FINANCE
A28
A29
A30
A30
Federal fiscal and financing operations
U.S. budget receipts and outlays
Federal debt subject to statutory limitation
Gross public debt of U.S. Treasury—Types and
ownership
A31 U.S. government securities dealers—
Transactions
A32 U.S. government securities dealers—Positions
and financing
A3 3 Federal and federally sponsored credit
agencies—Debt outstanding
SECURITIES MARKETS AND
CORPORATE FINANCE
A34 New security issues—State and local
governments and corporations
A35 Open-end investment companies—Net sales and
asset position
A35 Corporate profits and their distribution
A36 Nonfinancial corporations—Assets and
liabilities
A2
Federal Reserve Bulletin • January 1988
A36 Total nonfarm business expenditures on new
plant and equipment
A37 Domestic finance companies—Assets and
liabilities and business credit
A55 Foreign branches of U.S. banks—Balance sheet
data
A57 Selected U.S. liabilities to foreign official
institutions
REAL ESTATE
REPORTED BY BANKS IN THE UNITED STATES
A38 Mortgage markets
A39 Mortgage debt outstanding
A57
A58
A60
A61
CONSUMER INSTALLMENT CREDIT
A40 Total outstanding and net change
A41 Terms
FLOW OF FUNDS
Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A61 Banks' own claims on unaffiliated foreigners
A62 Claims on foreign countries—Combined
domestic offices and foreign branches
REPORTED BY NONBANKING BUSINESS
ENTERPRISES IN THE UNITED STATES
A42 Funds raised in U.S. credit markets
A43 Direct and indirect sources of funds to credit
markets
A63 Liabilities to unaffiliated foreigners
A64 Claims on unaffiliated foreigners
Domestic
SECURITIES HOLDINGS AND TRANSACTIONS
Nonfinancial
Statistics
SELECTED MEASURES
A44 Nonfinancial business activity—Selected
measures
A45 Labor force, employment, and unemployment
A46 Output, capacity, and capacity utilization
A47 Industrial production—Indexes and gross value
A49 Housing and construction
A50 Consumer and producer prices
A51 Gross national product and income
A52 Personal income and saving
International
Statistics
A65 Foreign transactions in securities
A66 Marketable U.S. Treasury bonds and notes—
Foreign transactions
INTEREST AND EXCHANGE RATES
A67 Discount rates of foreign central banks
A67 Foreign short-term interest rates
A68 Foreign exchange rates
A69 Guide to Tabular
Statistical Releases,
Tables
Presentation,
and Special
SUMMARY STATISTICS
SPECIAL TABLES
A53
A54
A54
A54
A70 Terms of lending at commercial banks,
August 3-7, 1987
U.S. international transactions—Summary
U.S. foreign trade
U.S. reserve assets
Foreign official assets held at Federal Reserve
Banks
Money Stock and Bank Credit
1.10
A3
RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES
Monetary and credit aggregates
(annual rates of change, seasonally adjusted in percent) 1
Item
Reserves of depository
1
2 Required
3 Nonborrowed
4 Monetary base
5
6
7
8
9
Concepts
Ml
M2
M3
L
Debt
of money,
Nontrqnsaction
10 In M2
11 In M3 only 6
1986
1987
1987
Q4
Ql
Q2
24.3
22.8
25.3
11.0
16.4
16.5
18.5
11.3
8.0
8.4
5.4
6.8
17.0
9.3
8.3
8.4
12.7 r
13.1
6.4
6.5
6.3
10.4 r
6.4
2.3
4.3 r
3.3'
8.3 r
6.7
4.3
4.1
6.9
.9'
12.4r
36.9
-10.7
.1
37.3
-4.9
9.7
23.2
-6.4
-7.0
27.3
-4.2
-9.5
Q3'
June
July'
Aug.'
Sept.'
Oct.
-1.6
-.5
-.4
4.7
-13.3
-15.9
-8.1
.5
-2.2
6.9
4.7
5.7
.1
6.3
6.5
-1.0
4.0
-7.2
5.0
13.7
7.1
13.9
11.9
.0
3.1
5.2
4.2
7.7
-10.4
.5
5.8'
4.1'
7.9
1.6
2.7
2.7
-1.6
6.0
5.6
6.5
7.7
7.9
8.1
.3
5.7
6.0
8.7
9.4
15.0
6.8
7.9
n.a.
n.a.
4.2
13.4
4.4
26.7'
3.1
2.6
6.9
12.4
7.5
7.2
4.0
11.8
24.1
-4.6
18.3
7.8
8.0
4.1
6.9
10.1
16.2
7.5
11.0
-4.6
9.5
6.6
.0
.0
6.2
-.4
-3.4
18.6
13.4
25.9
1.0
-8.4
7.1
10.1
10.7
12.6
9.6
8.9
2.0
12.5
9.6
8.5
12.1
13.5
-2.5
10.1
17.2
-9.9
12.8
29.4
1.9
7.3
1.3
8.8
7.9
10.8
6.5
10.3
9.7
n.a.
n.a.
10.4
institutions2
liquid assets,
and
*
debt4
components
Time and savings
deposits
Commercial banks
Savings 7
Small-denomination time®
Large-denomination time 9 , 1 0
Thrift institutions
15
Savings
16
Small-denomination time
17
Large-denomination time
12
13
14
Debt
components4
18 Federal
19 Nonfederal
20 Total loans and securities at commercial banks 11
11.7
13.0
8.8
1. Unless otherwise noted, rates of change are calculated from average
amounts outstanding in preceding month or quarter.
2. Figures incorporate adjustments for discontinuities associated with the
implementation of the Monetary Control Act and other regulatory changes to
reserve requirements. To adjust for discontinuities due to changes in reserve
requirements on reservable nondeposit liabilities, the sum of such required
reserves is subtracted from the actual series. Similarly, in adjusting for discontinuities in the monetary base, required clearing balances and adjustments to
compensate for float also are subtracted from the actual series.
3. The monetary base not adjusted for discontinuities consists of total
reserves plus required clearing balances and adjustments to compensate for float
at F e d e r i Reserve Banks plus the currency component of the money stock less
the amount of vault cash holdings of thrift institutions that is included in the
currency component of the money stock plus, for institutions not having required
reserve balances, the excess of current vault cash over the amount applied to
satisfy current reserve requirements. After the introduction of contemporaneous
reserve requirements (CRR), currency and vault cash figures are measured over
the weekly computation period ending Monday.
Before CRR, all components of the monetary base other than excess reserves
are seasonally adjusted as a whole, rather than by component, and excess
reserves are added on a not seasonally adjusted basis. After CRR, the seasonally
adjusted series consists of seasonally adjusted total reserves, which include
excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted
currency component of the money stock plus the remaining items seasonally
adjusted as a whole.
4. Composition of the money stock measures and debt is as follows:
M l : (1) currency outside the Treasury, Federal Reserve Banks, and the vaults
of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits
at all commercial banks other than those due to domestic banks, the U . S .
government, and foreign banks and official institutions less cash items in the
process of collection and Federal Reserve float; and (4) other checkable deposits
(OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer
service (ATS) accounts at depository institutions, credit union share draft
accounts, and demand deposits at thrift institutions. The currency and demand
deposit components exclude the estimated amount of vault cash and demand
deposits respectively held by thrift institutions to service their OCD liabilities.
M2: M l plus overnight (and continuing contract) repurchase agreements (RPs)
issued by all commercial banks and overnight Eurodollars issued to U.S. residents
by foreign branches of U.S. banks worldwide, Money Market Deposit Accounts
(MMDAs), savings and small-denomination time deposits (time deposits—including retail RPs—in amounts of less than $100,000), and balances in both taxable and
tax-exempt general purpose and broker/dealer money market mutual funds.
Excludes individual retirement accounts (IRA) and Keogh balances at depository
institutions and money market funds. Also excludes all balances held by U.S.
12.2
9.8 r
10.1
8.8
8.1
7.0
5.9 '
8.2
5.6
7.5
8.0
3.6'
commercial banks, money market funds (general purpose and broker/dealer),
foreign governments and commercial banks, and the U . S . government. Also
subtracted is a consolidation adjustment that represents the estimated amount of
demand deposits and vault cash held by thrift institutions to service their time and
savings deposits.
M3: M2 plus large-denomination time deposits and term RP liabilities (in
amounts of $100,000 or more) issued by commercial banks and thrift institutions,
term Eurodollars held by U.S. residents at foreign branches of U . S . banks
worldwide and at all banking offices in the United Kingdom and Canada, and
balances in both taxable and tax-exempt, institution-only money market mutual
funds. Excludes amounts held by depository institutions, the U . S . government,
money market funds, and foreign banks and official institutions. Also subtracted
is a consolidation adjustment that represents the estimated amount of overnight
RPs and Eurodollars held by institution-only money market mutual funds.
L: M3 plus the nonbank public holdings of U . S . savings bonds, short-term
Treasury securities, commercial paper and bankers acceptances, net of money
market mutual fund holdings of these assets.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U . S . government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. The source of data on domestic
nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt
data are based on monthly averages. Growth rates for debt reflect adjustments for
discontinuities over time in the levels of debt presented in other tables.
5. Sum of overnight RPs and Eurodollars, money market fund balances
(general purpose and broker/dealer), MMDAs, and savings and small time
deposits less the estimated amount of demand deposits and vault cash held by
thrift institutions to service their time and savings deposit liabilities.
6. Sum of large time deposits, term RPs, and Eurodollars of U . S . residents,
money market fund balances (institution-only), less a consolidation adjustment
that represents the estimated amount of overnight RPs and Eurodollars held by
institution-only money market mutual funds.
7. Excludes MMDAs.
8. Small-denomination time deposits—including retail RPs—are those issued
in amounts of less than $100,000. All IRA and Keogh accounts at commercial
banks and thrifts are subtracted from small time deposits.
9. Large-denomination time deposits are those issued in amounts of $100,000
or more, excluding those booked at international banking facilities.
10. Large-denomination time deposits at commercial banks less those held by
money market mutual funds, depository institutions, and foreign banks and
official institutions.
11. Changes calculated from figures shown in table 1.23.
A4
DomesticNonfinancialStatistics • January 1988
1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT
Millions of dollars
Monthly averages of
daily figures
Weekly averages of daily figures for week ending
1987
1987
Aug.
Sept.
Oct.
Sept. 16
Sept. 23
Sept. 30
Oct. 7
Oct. 14
231,606
206,708
206,187
521
7,764
7,623
141
0
630
702
15,802
11,068
5,018
17,930
240,591
241,841
236,459
251,912
241,835
237,908
214,298
211,468
2,830
8,399
7,623
776
0
956
774
16,164
11,068
5,018
17,981
214,787
210,822
3,965
8,747
7,601
1,146
0
959
751
16,597
11,084
5,018
18,028
211,026
211,026
0
7,623
7,623
0
0
1,026
770
16,014
11,068
5,018
17,977
223,407
214,425
8,982
10,013
7,623
2,390
0
976
822
16,694
11,068
5,018
17,987
214,861
211,713
3,148
8,558
7,623
935
0
1,197
877
16,717
11,068
5,018
17,997
211,909
211,909
0
7,623
7,623
0
0
1,193
877
16,305
11,079
5,018
18,004
216,805
471
217,718
459
218,734
470
218,742
458
217,459
460
216,549
459
3,409
237
10,585
248
8,828
259
4,207
255
21,647
198
1,937
331
1,930
390
2,029
402
1,908
371
Oct. 21
Oct. 28
236,547
242,444
248,500
210,880
210,880
0
7,623
7,623
0
0
902
707
16,435
11,086
5,018
18,018
215,059
210,168
4,891
8,860
7,607
1,253
0
1,111
879
16,535
11,086
5,018
18,032
220,197
210,726
9,471
10,165
7,567
2,598
0
751
494
16,893
11,086
5,018
18,046
217,420
464
218,958
475
219,087
472
218,978
469
14,355
263
5,341
287
3,281
208
12,191
251
13,822
298
1,965
376
1,999
484
2,070
447
1,943
350
1,926
385
1,960
391
SUPPLYING RESERVE F U N D S
1 Reserve Bank credit
2
U.S. government securities 1
3
Bought outright
4
Held under repurchase agreements..
5
Federal agency obligations
6
Bought outright
7
Held under repurchase agreements..
8
Acceptances
9
Loans
10
Float
11
Other Federal Reserve assets
12 Gold stock 2
13 Special drawing rights certificate account
14 Treasury currency outstanding
ABSORBING RESERVE F U N D S
15 Currency in circulation
16 Treasury cash holdings 2
Reserve Banks
17
Treasury
18
Foreign
19
Service-related balances and
adjustments
20
Other
21 Other Federal Reserve liabilities and
capital
22 Reserve balances with Federal
Reserve Banks 3
6,667
7,213
7,236
7,053
7,668
7,094
6,971
7,034
7,342
7,365
35,765
36,115
38,014
37,527
36,214
34,716
39,010
38,421
34,924
39,365
End-of-month figures
Wednesday figures
1987
1987
Aug.
Sept.
Oct.
Sept. 16
Sept. 23
Sept. 30
Oct. 7
Oct. 14
Oct. 21
Oct. 28
SUPPLYING RESERVE F U N D S
23 Reserve Bank credit
231,689
238,823
246,896
241,092
261,278
238,823
237,931
239,536
243,453
251,276
U.S. government securities 1
Bought outright
Held under repurchase a g r e e m e n t s . . . .
Federal agency obligations
Bought outright
Held under repurchase a g r e e m e n t s . . . .
Acceptances
Loans
Float
Other Federal Reserve assets
207,238
207,238
0
7,623
7,623
0
0
566
510
15,752
211,941
211,941
0
7,623
7,623
0
0
1,941
248
17,070
217,614
209,319
8,295
10,483
7,567
2,916
0
587
609
17,603
215,220
215,220
0
7,623
7,623
0
0
672
877
16,700
231,599
214,370
17,229
11,073
7,624
3,449
0
935
522
17,149
211,941
211,941
0
7,623
7,623
0
0
1,941
248
17,070
210,942
210,942
0
7,623
7,623
0
0
1,382
1,300
16,684
212,094
212,094
0
7,623
7,623
0
0
929
2,138
16,752
213,804
210,208
3,596
8,706
7,567
1,139
0
3,160
1,134
16,649
219,707
211,453
8,254
11,646
7,568
4,078
0
753
2,031
17,139
34 Gold stock 2
35 Special drawing rights certificate a c c o u n t . .
36 Treasury currency outstanding
11,068
5,018
17,956
11,075
5,018
18,006
11,085
5,018
18,058
11,068
5,018
17,986
11,068
5,018
17,996
11,075
5,018
18,006
11,085
5,018
18,016
11,086
5,018
18,030
11,085
5,018
18,044
11,085
5,018
18,058
216,471
463
216,776
460
219,842
467
218,365
460
217,010
459
216,776
460
218,176
473
219,523
472
219,053
472
219,427
468
3,763
295
9,120
456
8,898
236
9,479
282
25,657
218
9,120
456
2,816
220
3,745
200
14,323
221
14,324
301
1,709
284
1,706
419
1,733
477
1,718
503
1,719
324
1,706
419
1,705
372
1,714
348
1,713
309
1,732
371
24
25
26
27
28
29
30
31
32
33
ABSORBING RESERVE F U N D S
37 Currency in circulation
38 Treasury cash holdings 2
Deposits, other than reserve balances, with
Federal Reserve Banks
39
Treasury
40
Foreign
41
Service-related balances and
adjustments
42
Other
43 Other Federal Reserve liabilities and
capital
44 Reserve balances with Federal
Reserve Banks 3
6,964
6,663
7,950
7,180
7,996
6,663
6,948
6,884
7,076
7,167
35,782
37,321
41,454
37,177
41,976
37,321
41,338
40,783
34,436
41,647
1. Includes securities loaned—fully guaranteed by U.S. government securities
pledged with Federal Reserve Banks—and excludes any securities sold and
scheduled to be bought back under matched sale-purchase transactions.
2. Revised for periods between October 1986 and April 1987. At times during
this interval, outstanding gold certificates were inadvertently in excess of the gold
stock. Revised data not included in this table are available from the Division of
Research and Statistics, Banking Section.
3. Excludes required clearing balances and adjustments to compensate for
float.
NOTE. For amounts of currency and coin held as reserves, see table 1.12.
Money Stock and Bank Credit
1.12 RESERVES AND BORROWINGS
A5
Depository Institutions
Millions of dollars
Monthly averages 8
Reserve classification
1
2
3
4
5
6
7
8
9
10
1
Reserve balances with Reserve Banks
Total vault cash 2
Vault 3
Surplus 4
Total reserves 5
Required reserves
Excess reserve balances at Reserve Banks
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
Extended credit at Reserve Banks
1987
1984
1985
1986
Dec.
Dec.
Dec.
Mar.
Apr.
May
June
July
Aug.
Sept.
21,738
22,313
18,958
3,355
40,696
39,843
853
3,186
113
2,604
27,620
22,953
20,522
2,431
48,142
47,085
1,058
1,318
56
499
37,360
24,071
22,199
1,872
59,560
58,191
1,369
827
38
303
35,318
23,759
21,743
2,016
57,061
56,146
916
527
91
264
37,807
23,353
21,587
1,767
59,393
58,566
827
993
120
270
36,466
23,693
21,873
1,820
58,339
57,260
1,079
1,035
196
288
36,309
24,380
22,475
1,905
58,784
57,594
1,190
776
259
273
36,110
24,631
22,728
1,903
58,838
58,078
761
672
283
194
35,616
24,649
22,745
1,904
58,361
57,329
1,032
647
279
132
36,685
24,860
23,128
1,732
59,813
59,020
793
940
231
409
Biweekly averages of daily figures for weeks ending
1987
11
12
13
14
15
16
17
18
19
20
Reserve balances with Reserve Banks 1
Total vault cash 2
Vault'
Surplus 4 ..
Total reserves
Required reserves
Excess reserve balances at Reserve Banks 6
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
Extended credit at Reserve Banks
July 15
July 29
Aug. 12
Aug. 26
Sept. 9
Sept. 23
Oct. 7
Oct. 21
Nov. 4
Nov. 18"
37,083
24,238
22,470
1,769
59,553
59,081
472
696
271
261
35,221
25,029
23,002
2,027
58,223
57,240
983
652
294
133
35,850
24,306
22,439
1,867
58,289
57,488
801
564
289
120
35,173
25,074
23,115
1,959
58,288
57,116
1,173
719
286
128
36,294
24,288
22,446
1,842
58,740
57,546
1,194
647
241
173
36,866
25,146
23,475
1,672
60,340
59,825
515
1,001
226
531
36,826
25,026
23,313
1,713
60,139
59,306
833
1,195
230
469
36,672
26,183
24,410
1,773
61,082
60,115
967
1,007
183
482
38,324
25,174
23,464
1,710
61,788
60,256
1,532
677
169
390
37,558
25,188
23,623
1,565
61,181
60,665
516
561
125
334
1. Excludes required clearing balances and adjustments to compensate for
float.
2. Dates refer to the maintenance periods in which the vault cash can be used
to satisfy reserve requirements. Under contemporaneous reserve requirements,
maintenance periods end 30 days after the lagged computation periods in which
the balances are held.
3. Equal to all vault cash held during the lagged computation period by
institutions having required reserve balances at Federal Reserve Banks plus the
amount of vault cash equal to required reserves during the maintenance period at
institutions having no required reserve balances.
4. Total vault cash at institutions having no required reserve balances less the
amount of vault cash equal to their required reserves during the maintenance
period.
5. Total reserves not adjusted for discontinuities consist of reserve balances
with Federal Reserve Banks, which exclude required clearing balances and
adjustments to compensate for float, plus vault cash used to satisfy reserve
requirements. Such vault cash consists of all vault cash held during the lagged
computation period by institutions having required reserve balances at Federal
Reserve Banks plus the amount of vault cash equal to required reserves during the
maintenance period at institutions having no required reserve balances.
6. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy
reserve requirements less required reserves.
7. Extended credit consists of borrowing at the discount window under the
terms and conditions established for the extended credit program to help
depository institutions deal with sustained liquidity pressures. Because there is
not the same need to repay such borrowing promptly as there is with traditional
short-term adjustment credit, the money market impact of extended credit is
similar to that of nonborrowed reserves.
8. Before February 1984, data are prorated monthly averages of weekly
averages; beginning February 1984, data are prorated monthly averages of
biweekly averages.
NOTE. These data also appear in the Board's H.3 (502) release. For address, see
inside front cover.
A6
DomesticNonfinancialStatistics • January 1988
1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS
Large Member Banks1
Averages of daily figures, in millions of dollars
1987 week ending Monday
Maturity and source
1
2
3
4
5
6
7
8
Federal funds purchased, repurchase agreements,
and
other selected borrowing in immediately
available
funds
From commercial banks in the United States
For one day or under continuing contract
For all other maturities
From other depository institutions, foreign banks and
foreign official institutions, and United States government agencies
For one day or under continuing contract
For all other maturities
June 8
June 15
June 22
June 29
July 6
July 13
July 20
July 27
74,810
9,362
72,633
9,325
68,755
8,719
66,856
8,430
73,997
11,099
74,109
8,691
69,704
8,626
68,682
8,829
68,983
9,624
35,114
8,503
34,380
8,508
31,698
8,378
33,067
8,502
26,568
11,895
33,873
8,167
31,478
7,384
31,316
7,122
32,783
7,206
10,497
14,421
10,459
14,413
9,664
13,794
9,958
12,793
8,076
12,327
10,541
11,214
11,515
10,797
13,115
11,725
13,711
12,209
24,985
8,561
25,470
8,289
24,139
8,882
25,518
9,029
22,802
ll,456r
25,558
8,278'
26,375
8,373
26,482
8,363
27,082
8,123
28,156'
13,824'
25,759 r
14,086r
26,713''
14,672'
27,376'
12,656'
35,382'
13,031'
33,375'
13,702'
31,101
13,109
28,293
13,347
29,247
13,690
Repurchase agreements on U.S. government and federal
agency securities in immediately available funds
Brokers and nonbank dealers in securities
For one day or under continuing contract
For all other maturities
All other customers
For one day or under continuing contract
For all other maturities
MEMO: Federal funds loans and resale agreements in immediately available funds in maturities of one day or
under continuing contract
9 To commercial banks in the United States
10 To all other specified customers 2
1. Banks with assets of $1 billion or more as of Dec. 31, 1977.
Aug. 3
2. Brokers and nonbank dealers in securities; other depository institutions;
foreign banks and official institutions; and United States government agencies.
Policy Instruments
Al
1.14 FEDERAL RESERVE BANK INTEREST RATES
Percent per year
Current and previous levels
Extended Credit 2
Adjustment Credit
and
Seasonal Credit1
Federal Reserve
Bank
On
11/27/87
Effective
Date
6
9/9/87
9/4/87
9/4/87
9/4/87
9/5/87
9/4/87
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco . . .
6
After 30 days of Borrowing 3
First 30 days of Borrowing
Previous
Rate
On
11/27/87
Effective
Date
6
9/9/87
9/4/87
9/4/87
9/4/87
9/5/87
9/4/87
SVl
9/4/87
9/9/87
9/8/87
9/4/87
9/11/87
9/9/87
5W
9/4/87
9/9/87
9/8/87
9/4/87
9/11/87
9/9/87
6
Previous
Rate
On
11/27/87
Effective
Date
Previous
Rate
7.45
11/19/87
11/19/87
11/19/87
11/19/87
11/19/87
11/19/87
7.55
5Vi
IAS
SYi
11/19/87
11/19/87
11/19/87
11/19/87
11/19/87
11/19/87
Effective Date
11/5/87
11/5/87
11/5/87
11/5/87
11/5/87
11/5/87
11/5/87
11/5/87
11/5/87
11/5/87
11/5/87
11/5/87
7.55
Range of rates for adjustment credit in recent years 4
Effective date
In effect Dec. 31, 1977
1978—Jan.
9
20
May 11
12
July
3
10
Aug. 21
Sept. 22
Oct. 16
20
Nov. 1
3
1979—July 20
Aug. 17
20
Sept. 19
21
Oct. 8
10
Range (or
level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
6
6 - 6 Yi
6
6Y2
6Y2
7
7
6Yi
6Vi-7
1
7-7V4
7V4
73/4
8
8-8W
8 Vi
7V4
IV\
73/4
8
8W
8V2
8V5-9V4
9Vl
9Vi
9 Vi
10
10
10-10W
10VS
10W-11
11
11-12
12
10W
10W
11
11
12
12
Effective date
1980—July
28
29
Sept. 26
Nov. 17
Dec. 5
1981—May
Nov.
6
Dec.
1982—July
Aug.
' Oct.
Nov.
1980—Feb. 15
19
May 29
30
June 13
16
12-13
13
12-13
12
11-12
11
13
13
13
12
11
11
5
8
2
Dec.
4
20
23
2
3
16
27
30
12
13
22
26
14
15
17
1. Adjustment credit is available on a short-term basis to help depository
institutions meet temporary needs for funds that cannot be met through reasonable alternative sources. After May 19,1986, the highest rate established for loans
to depository institutions may be charged on adjustment credit loans of unusual
size that result from a major operating problem at the borrower's facility.
Seasonal credit is available to help smaller depository institutions meet regular,
seasonal needs for funds that cannot be met through special industry lenders and
that arise from a combination of expected patterns of movement in their deposits
and loans. A temporary simplified seasonal program was established on Mar. 8,
1985, and the interest rate was a fixed rate Vi percent above the rate on adjustment
credit. The program was re-established on Feb. 18, 1986 and again on Jan. 28,
1987; the rate may be either the same as that for adjustment credit or a fixed rate
Yi percent higher.
2. Extended credit is available to depository institutions, where similar assistance is not reasonably available from other sources, when exceptional circumstances or practices involve only a particular institution or when an institution is
experiencing difficulties adjusting to changing market conditions over a longer
period of time.
3. For extended-credit loans outstanding more than 30 days, a flexible rate
Range (or
level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
Effective date
Range (or
level)—
All F.R.
Banks
10-11
10
11
12
12-13
10
10
11
12
13
1984—Apr.
9
13
Nov. 21
26
Dec. 24
8V4-9
9
8Vi-9
9
9
8
8
13-14
14
13-14
13
12
14
14
13
13
12
1985—May 20
24
7W-8
11VS-12
11V4
11-llVi
11
10 Vi
lO-lOVi
10
9V4-10
9 Vi
9-9Vl
9
8W-9
8Vi>-9
8 Vi
11 Yi
11 Yi
11
11
10^
10
10
9 Yi
9 Yi
9
9
9
1986—Mar.
7
10
Apr. 21
July 11
Aug. 12
22
1987—Sept.
4
11
In effect November 27, 1987
%Yi
m
m
1-lVi
1
6Y1-I
m
1
1
6Vi
6
5W-6
5 Yi
6
5V?
5Vl-6
6
6
6
6
6
5Yi
m
8 Vi
somewhat above rates on market sources of funds ordinarily will be charged, but
in no case will the rate charged be less than the basic discount rate plus 50 basis
points. The flexible rate is re-established on the first business day of each
two-week reserve maintenance period. At the discretion of the Federal Reserve
Bank, the time period for which the basic discount rate is applied may be
shortened.
4. For earlier data, see the following publications of the Board of Governors:
Banking and Monetary Statistics, 1914-1941, and 1941-1970; Annual Statistical
Digest, 1970-1979.
In 1980 and 1981, the Federal Reserve applied a surcharge to short-term
adjustment credit borrowings by institutions with deposits of $500 million or more
that had borrowed in successive weeks or in more than 4 weeks in a calendar
quarter. A 3 percent surcharge was in effect from Mar. 17, 1980 through May 7,
1980. There was no surcharge until Nov. 17,1980, when a 2 percent surcharge was
adopted; the surcharge was subsequently raised to 3 percent on Dec. 5,1980, and
to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective
Sept. 22, 1981, and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981 the
formula for applying the surcharge was changed from a calendar quarter to a
moving 13-week period. The surcharge was eliminated on Nov. 17, 1981.
A8
DomesticNonfinancialStatistics • January 1988
1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1
Percent of deposits
Type of deposit, and
deposit interval
Net transaction
accounts*'4
$0 million-$40.5 million
Depository institution requirements
after implementation of the
Monetary Control Act
Percent of
deposits
Effective date
3
12
12/30/86
12/30/86
3
0
10/6/86
10/6/83
3
11/13/80
Nonpersonal time deposits
By original maturity
Eurocurrency
liabilities
1. Reserve requirements in effect on Dec. 31, 1987. Required reserves must be
held in the form of deposits with Federal Reserve Banks or vault cash.
Nonmembers may maintain reserve balances with a Federal Reserve Bank
indirectly on a pass-through basis with certain approved institutions. For previous
reserve requirements, see earlier editions of the Annual Report and of the
FEDERAL RESERVE BULLETIN. Under provisions of the Monetary Control Act,
depository institutions include commercial banks, mutual savings banks, savings
and loan associations, credit unions, agencies and branches of foreign banks, and
Edge corporations.
2. The Garn-St Germain Depository Institutions Act of 1982 (Public Law
97-320) requires that $2 million of reservable liabilities (transaction accounts,
nonpersonal time deposits, and Eurocurrency liabilities) of each depository
institution be subject to a zero percent reserve requirement. The Board is to adjust
the amount of reservable liabilities subject to this zero percent reserve requirement each year for the succeeding calendar year by 80 percent of the percentage
increase in the total reservable liabilities of all depository institutions, measured
on an annual basis as of June 30. N o corresponding adjustment is to be made in
the event of a decrease. On Dec. 29, 1987, the exemption was raised from $2.9
million to $3.2 million. In determining the reserve requirements of depository
institutions, the exemption shall apply in the following order: (1) net NOW
accounts (NOW accounts less allowable deductions); (2) net other transaction
accounts; and (3) nonpersonal time deposits or Eurocurrency liabilities starting
with those with the highest reserve ratio. With respect to NOW accounts and
other transaction accounts, the exemption applies only to such accounts that
would be subject to a 3 percent reserve requirement.
3. Transaction accounts include all deposits on which the account holder is
permitted to make withdrawals by negotiable or transferable instruments, payment orders of withdrawal, and telephone and preauthorized transfers in excess of
three per month for the purpose of making payments to third persons or others.
However, MMDAs and similar accounts subject to the rules that permit no more
than six preauthorized, automatic, or other transfers per month, of which no more
than three can be checks, are not transaction accounts (such accounts are savings
deposits subject to time deposit reserve requirements).
4. The Monetary Control Act of 1980 requires that the amount of transaction
accounts against which the 3 percent reserve requirement applies be modified
annually by 80 percent of the percentage increase in transaction accounts held by
all depository institutions, determined as of June 30 each year. Effective Dec. 29,
1987, the amount was increased from $36.7 million to $40.5 million.
5. In general, nonpersonal time deposits are time deposits, including savings
deposits, that are not transaction accounts and in which a beneficial interest is
held by a depositor that is not a natural person. Also included are certain
transferable time deposits held by natural persons and certain obligations issued
to depository institution offices located outside the United States. For details, see
section 204.2 of Regulation D.
Policy Instruments
A9
1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS 1
Millions of dollars
1987
Type of transaction
1984
1986
1985
Mar.
Apr.
May
June
July
Aug.
Sept.
U . S . T R E A S U R Y SECURITIES
Outright transactions (excluding
transactions)
1
2
J
4
matched
Treasury bills
Gross purchases
Gross sales
Exchange
Redemptions
20,036
8,557
0
7,700
22,214
4,118
0
3,500
22,602
2,502
0
1,000
1,062
0
0
0
4,226
653
0
0
1,697
0
0
0
575
22
0
0
575
912
0
4,572
499
0
0
0
4,528
0
0
3,657
1,126
0
16,354
1,349
0
19,763
190
0
18,673
0
0
1,762
1,232
0
1,375
0
0
4,063
535
0
1,715
0
0
1,437
0
0
2,723
443
300
1,500
-20,840
-17,717
0
-20,179
-522
0
-1,336
0
-1,812
0
0
-1,787
0
-917
0
-1,799
0
-613
0
10
11
12
13
1 to 5 years
Gross purchases
Gross sales
Maturity shift
Exchange
1,638
0
-13,709
16,039
2,185
0
-17,459
13,853
893
0
-17,058
16,984
0
0
-1,762
1,799
3,642
0
-1,373
522
0
-1,804
1,111
1,394
0
-1,715
1,812
0
200
-1,397
613
5
0
-2,122
1,612
2,551
0
-1,500
917
14
15
16
17
5 to 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
536
300
-2,371
2,750
458
100
-1,857
2,184
236
0
-1,620
2,050
0
0
0
0
914
0
-3
0
0
0
-2,259
150
312
0
0
0
0
0
-40
0
0
0
-601
100
619
0
0
0
18
19
20
21
Over 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
441
0
-275
2,052
293
0
-447
1,679
158
0
0
1,150
0
0
0
0
669
0
0
0
0
0
0
75
251
0
0
0
0
0
0
0
0
0
0
75
493
0
0
0
23,776
8,857
7,700
26,499
4,218
3,500
24,078
2,502
1,000
1,062
0
0
10,683
653
0
1,697
0
0
3,066
22
0
575
1,112
4,572
504
0
0
8,633
300
3,657
808,986
810,432
866,175
865,968
927,997
927,247
72,306
73,476
83,822
82,494
91,642
92,137
87,228
87,128
80,304
80,037
60,731
62,594
61,321
61,347
127,933
127,690
134,253
132,351
170,431
160,268
5,657
5,657
37,653
23,881
59,340
73,111
24,167
22,108
3,298
2,058
9,013
12,311
34,080
34,080
8,908
20,477
29,989
2,231
22,474
-11,580
5,002
-4,136
-931
4,702
0
0
256
0
0
162
0
0
398
0
0
0
0
0
37
0
0
*
0
0
0
0
0
59
0
0
0
0
0
0
11,509
11,328
22,183
20,877
31,142
30,522
897
897
9,265
5,908
16,071
19,428
3,907
2,910
929
996
2,369
3,298
7,174
7,174
-76
1,144
222
0
3,320
-3,357
997
-126
-929
0
36 Repurchase agreements, net
-418
0
0
0
0
0
0
0
0
0
37 Total net change in System Open Market
Account
8,414
21,621
30,211
2,231
25,794
-14,936
5,999
-4,262
-1,861
4,702
Others within 1 year
Gross purchases
Gross sales
7
Maturity shift
8
Exchange
Redemptions
9
5
6
All maturities
22 Gross purchases
2 i Gross sales
24 Redemptions
Matched
transactions
25 Gross sales
26 Gross purchases
0
*
2
Repurchase
agreements
27 Gross purchases
28 Gross sales
29 Net change in U.S. government securities
F E D E R A L A G E N C Y OBLIGATIONS
Outright
transactions
30 Gross purchases
31 Gross sales
32 Redemptions
Repurchase
agreements2
33 Gross purchases
34 Gross sales
35 Net change in federal agency obligations
BANKERS ACCEPTANCES
1. Sales, redemptions, and negative figures reduce holdings of the System Open
Market Account; all other figures increase such holdings. Details may not add to
totals because of rounding.
2. In July 1984 the Open Market Trading Desk discontinued accepting bankers
acceptances in repurchase agreements,
A10
DomesticNonfinancialStatistics • January 1988
1.18 FEDERAL RESERVE BANKS
Condition and Federal Reserve Note Statements1
Millions of dollars
Account
Sept. 30
Oct. 7
Wednesday
End of month
1987
1987
Oct. 14
Oct. 21
Oct. 28
Aug.
Sept.
Oct.
Consolidated condition statement
ASSETS
11,075
5,018
449
11,085
5,018
454
11,086
5,018
456
11,085
5,018
465
11,085
5,018
455
11,068
5,018
446
11,075
5,018
449
11,085
5,018
461
1,941
0
0
1,382
0
0
929
0
0
3,160
0
0
753
0
0
566
0
0
1,941
0
0
587
0
0
7,623
0
7,623
0
7,623
0
7,567
1,139
7,568
4,078
7,623
0
7,623
0
7,567
2,916
105,785
78,544
27,612
211,941
0
211,941
104,786
78,544
27,612
210,942
0
210,942
105,938
78,544
27,612
212,094
0
212,094
103,752
78,844
27,612
210,208
3,5%
213,804
104,998
78,844
27,611
211,453
8,254
219,707
104,888
75,252
27,098
207,238
0
207,238
105,785
78,544
27,612
211,941
0
211,941
102,863
78,844
27,612
209,319
8,295
217,614
221,505
219,947
220,646
225,670
232,106
215,427
221,505
228,684
6,287
688
7,758
693
11,716
696
7,777
696
7,870
694
5,025
686
7,532
688
7,197
698
8,038
8,344
8,044
7,947
8,059
7,997
8,065
7,888
8,071
8,374
8,244
6,822
8,038
8,344
8,268
8,637
261,404
260,946
265,674
266,664
273,673
252,736
262,649
270,048
199,680
201,089
202,422
201,943
202,292
199,424
199,680
202,712
39,027
9,120
456
419
43,043
2,816
220
372
42,497
3,745
200
348
36,149
14,323
221
309
43,379
14,324
301
371
37,491
3,763
295
284
39,027
9,120
456
419
43,187
8,898
236
477
49,022
46,451
46,790
51,002
58,375
41,833
49,022
52,798
6,039
2,386
6,458
2,626
9,578
2,540
6,643
2,725
5,839
2,807
4,515
2,280
7,284
2,386
6,588
3,134
257,127
256,624
261,330
262,313
269,313
248,052
258,372
265,232
2,009
1,873
395
2,009
1,873
440
2,012
1,873
459
2,015
1,873
463
2,017
1,873
470
1,984
1,874
826
2,009
1,873
395
2,019
1,873
924
33 Total liabilities and capital accounts
261,404
260,946
265,674
266,664
273,673
252,736
262,649
270,048
34 MEMO: Marketable U.S. Treasury securities held in
custody for foreign and international account
182,078
187,437
189,376
188,315
188,156
183,931
182,078
188,247
1 Gold certificate account
2 Special drawing rights certificate account
3
Loans
4
To depository institutions
5
Other
6 Acceptances held under repurchase agreements
Federal agency obligations
7
Bought outright
8
Held under repurchase agreements
U . S . Treasury securities
Bought outright
Bills
9
Notes
10
Bonds
11
Total bought outright 2
12
Held under repurchase agreements
13
14 Total U.S. Treasury securities
15 Total loans and securities
16 Items in process of collection
17 Bank premises
Other assets
Denominated in foreign currencies 3
18
19
All other 4
20 Total assets
LIABILITIES
21 Federal Reserve notes
Deposits
22
To depository institutions
23
U.S. Treasury—General account
Foreign—Official accounts
24
Other
25
26 Total deposits
77 Deferred credit items
28 Other liabilities and accrued dividends
29 Total liabilities
CAPITAL ACCOUNTS
30 Capital paid in
31 Surplus
32 Other capital accounts
Federal Reserve note statement
35 Federal Reserve notes outstanding issued to bank
36
LESS: Held by bank
Federal Reserve notes, net
37
Collateral held against notes net:
38
Gold certificate account
39
Special drawing rights certificate account
Other eligible assets
40
41
U . S . Treasury and agency securities
252,932
53,252
199,680
253,305
52,216
201,089
253,419
50,995
202,422
253,470
51,527
201,943
253,666
51,374
202,292
250,354
50,930
199,424
252,932
53,252
199,680
253,538
50,826
202,712
11,075
5,018
0
183,587
11,085
5,018
0
184,986
11,086
5,018
0
186,318
11,085
5,018
0
185,840
11,085
5,018
0
186,189
11,068
5,018
0
183,338
11,075
5,018
0
183,587
11,085
5,018
0
186,609
42 Total collateral
199,680
201,089
202,422
201,943
202,292
199,424
199,680
202,712
1. Some of these data also appear in the Board's H.4.1 (503) release. For
address, see inside front cover.
2. Includes securities loaned—fully guaranteed by U.S. Treasury securities
pledged with Federal Reserve Banks—and excludes securities sold and scheduled
to be bought back under matched sale-purchase transactions.
3. Valued monthly at market exchange rates.
4. Includes special investment account at the Federal Reserve Bank of Chicago
in Treasury bills maturing within 90 days.
5. Includes exchange-translation account reflecting the monthly revaluation at
market exchange rates of foreign-exchange commitments.
Federal Reserve Banks
1.19 FEDERAL RESERVE BANKS
All
Maturity Distribution of Loan and Security Holdings
Millions of dollars
Type and maturity groupings
Sept. 30
Oct. 7
Wednesday
End of month
1987
1987
Oct. 14
Oct. 21
Oct. 28
Aug. 31
Sept. 30
Oct. 30
1 Loans—Total
2
Within 15 days
3
16 days to 90 days
4
91 days to 1 year
1,941
1,878
61
2
1,382
1,282
98
2
929
836
93
0
3,160
3,122
38
0
753
715
38
0
566
466
100
0
1,941
1,878
61
2
587
525
62
0
5 Acceptances—Total
6
Within 15 days
7
16 days to 90 days
8
91 days to 1 year
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
211,941
12,767
49,795
67,296
42,435
14,819
24,829
210,942
7,861
52,544
68,454
42,435
14,819
24,829
212,094
10,594
50,961
68,456
42,435
14,819
24,829
213,804
13,269
49,702
68,727
42,513
14,764
24,829
219,707
19,528
51,179
66,894
42,513
14,764
24,829
207,238
8,671
53,685
65,878
40,467
14,201
24,336
211,941
12,767
49,795
67,296
42,435
14,819
24,829
217,614
13,609
51,679
70,220
42,513
14,764
24,829
7,623
359
602
1,446
3,615
1,321
280
7,623
145
751
1,511
3,615
1,371
230
7,623
101
746
1,476
3,673
1,396
231
8,706
1,324
606
1,546
3,603
1,411
216
11,646
4,218
757
1,474
3,574
1,407
216
7,623
315
726
1,353
3,663
1,286
280
7,623
359
602
1,446
3,615
1,321
280
10,483
3,056
757
1,474
3,574
1,407
215
9 U . S . Treasury securities—Total
10
Within 15 days 1
11
16 days to 80 days
12
91 days to 1 year
13
Over 1 year to 5 years
14
Over 5 years to 10 years
15
Over 10 years
16 Federal agency obligations—Total
17
Within 15 days 1
18
16 days to 90 days
19
91 days to 1 year
20
Over 1 year to 5 years
21
Over 5 years to 10 years
22
Over 10 years
1. Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements.
A12
DomesticNonfinancialStatistics • January 1988
1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE
Billions of dollars, averages of daily figures
1987
Item
1983
Dec.
1984
Dec.
1985
Dec.
1986
Dec.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Seasonally adjusted
A D J U S T E D FOR
C H A N G E S IN RESERVE REQUIREMENTS'
1 Total reserves 2
2
3
4
5
Nonborrowed reserves
Nonborrowed reserves plus extended credit 3
Required reserves
Monetary base
36.11
39.91
46.06
56.17
56.85
57.95
58.35
57.71
57.60
57.88
57.83
58.49
35.33
35.33
35.55
185.23
36.72
39.33
39.06
199.60
44.74
45.24
45.00
217.32
55.34
55.64
54.80
239.51
56.32
56.59
55.94
244.56
56.96
57.23
57.13
246.59
57.32
57.60
57.27
248.37
56.93
57.20
56.52
248.48
56.93
57.12
56.84
249.46
57.23
57.36
56.84
250.80
56.89
57.29'
57.03
251.85'
57.54
57.99
57.37
254.34
Not seasonally adjusted
6 Total reserves 2
7
8
9
10
Nonborrowed reserves
Nonborrowed reserves plus extended credit 3
Required reserves
Monetary base 4
36.81
40.94
47.24
57.64
56.07
58.37
57.30
57.63
57.74
57.39
57.50
58.03
36.04
36.04
36.25
188.50
37.75
40.35
40.08
202.70
45.92
46.42
46.18
220.82
56.81
57.11
56.27
243.63
55.54
55.80
55.15
241.92
57.38
57.65
57.54
246.07
56.26
56.55
56.22
246.83
56.85
57.12
56.43
249.29
57.07
57.27
56.98
251.42
56.74
56.88
56.36
251.42
56.56
56.96 r
56.70
251.6C
57.08
57.53
56.91
253.28
38.89
40.70
48.14
59.56
57.06
59.39
58.34
58.78
58.84
58.36
59.81 r
61.10
38.12
38.12
38.33
192.26
37.51
40.09
39.84
204.18
46.82
47.41
47.08
223.53
58.73
59.04
58.19
247.71
56.53
56.82
56.15
244.98
58.40
58.19
58.57
249.24
57.30
58.03
57.26
249.94
58.01
58.34
57.59
252.54
58.17
58.37
58.08
254.67
57.71
57.76
57.33
254.36
58.87 r
58.85
59.02
255.69
60.15
61.21
59.98
258.07
N O T A D J U S T E D FOR
C H A N G E S IN RESERVE REQUIREMENTS 5
11 Total reserves 2
12
13
14
15
Nonborrowed reserves
Nonborrowed reserves plus extended credit
Required reserves
Monetary base 4
1. Figures incorporate adjustments for discontinuities associated with the
implementation of the Monetary Control Act and other regulatory changes to
reserve requirements. To adjust for discontinuities due to changes in reserve
requirements on reservable nondeposit liabilities, the sum of such required
reserves is subtracted from the actual series. Similarly, in adjusting for
discontinuities in the monetary base, required clearing balances and adjustments
to compensate for float also are subtracted from the actual series.
2. Total reserves not adjusted for discontinuities consist of reserve balances
with Federal Reserve Banks, which exclude required clearing balances and
adjustments to compensate for float, plus vault cash held during the lagged
computation period by institutions having required reserve balances at Federal
Reserve Banks plus the amount of vault cash equal to required reserves during the
maintenance period at institutions having no required reserve balances.
3. Extended credit consists of borrowing at the discount window under the
terms and conditions established for the extended credit program to help
depository institutions deal with sustained liquidity pressures. Because there is
not the same need to repay such borrowing promptly as there is with traditional
short-term adjustment credit, the money market impact of extended credit is
similar to that of nonborrowed reserves.
4. The monetary base not adjusted for discontinuities consists of total reserves
plus required clearing balances and adjustments to compensate for float at Federal
Reserve Banks and the currency component of the money stock less the amount
of vault cash holdings of thrift institutions that is included in the currency
component of the money stock plus, for institutions not having required reserve
balances, the excess of current vault cash over the amount applied to satisfy
current reserve requirements. After the introduction of contemporaneous reserve
requirements (CRR), currency and vault cash figures are measured over the
weekly computation period ending Monday.
Before CRR, all components of the monetary base other than excess reserves
are seasonally adjusted as a whole, rather than by component, and excess
reserves are added on a not seasonally adjusted basis. After CRR, the seasonally
adjusted series consists of seasonally adjusted total reserves, which include
excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted
currency component of the money stock and the remaining items seasonally
adjusted as a whole.
5. Reflects actual reserve requirements, including those on nondeposit liabilities, with no adjustments to eliminate the effects of discontinuities associated with
implementation of the Monetary Control Act or other regulatory changes to
reserve requirements.
NOTE. Latest monthly and biweekly figures are available from the Board's
H.3(502) statistical release. Historical data and estimates of the impact on
required reserves of changes in reserve requirements are available from the
Banking Section, Division of Research and Statistics, Board of Governors of the
Federal Reserve System, Washington, D.C. 20551.
Monetary and Credit Aggregates
A13
1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES
Billions of dollars, averages of daily figures
1987
Item 1
1983
Dec.
1984
Dec.
1985
Dec.
1986
Dec.
June
July'
Aug/
Sept/
747.6
2,848.0
3,585.5
4,223.7
7,956.6
751.1
2,863.4
3,608.5
4,251.6
8,010.6
751.3
2,876.9
3,626.5
4,282.3
8,073.2
760.7
2,893.3
3,650.3
n.a.
n.a.
192.1
6.8
296.2
252.6
193.2
6.9
296.4
254.6
194.5
7.0
294.1
255.6
196.2
7.0
300.4
257.2
2,100.4
737.5
2,112.4
745.1
2,125.6
749.6
2,132.6
757.0
Seasonally adjusted
1 Ml
2 M2
M3
4 L
5 Debt
6
7
8
9
M l components
Currency 2
Travelers checks 3
Demand deposits
Other checkable deposits
526.9
2,184.6
2,692.8
3,154.6
5,195.5
557.5
2,369.1
2,985.4
3,528.1
5,932.9
627.0
2,569.5
3,205.2
3,837.6
6,746.9
148.3
4.9
242.3
131.4
158.5
5.2
248.3
145.5
170.6
5.9
272.2
178.3
1,657.7
508.2
1,811.5
616.3
1,942.5
635.7
730.5
2,801.2
3,492.2''
4,139.9
7,601.6'
183.5
6.4
308.3
232.2
10
11
Nontransactions components
In M2
In M3 only
12
13
Savings deposits 8
Commercial Banks
Thrift institutions
133.2
173.0
122.2
166.6
124.6
179.0
154.5
211.8
176.6
240.1
178.0
241.8
178.0
241.3
177.5
239.3
14
15
Small denomination time deposits 9
Commercial Banks
Thrift institutions
350.9
432.9
386.6
498.6
383.9
500.3
364.7
488.7
363.4
495.1
365.4
500.1
367.3
504.3
373.0
509.7
16
17
Money market mutual funds
General purpose and broker/dealer
Institution-only
138.2
43.2
167.5
62.7
176.5
65.1
207.6
84.1
209.8
83.4
212.8
83.4
216.5
80.7
219.3
81.6
18
19
Large denomination time deposits 1 0
Commercial Banks
Thrift institutions
230.0
96.2
269.6
147.3
284.1
152.1
291.8
155.3
313.7
151.4
313.7
153.1
313.6
155.3
317.1
159.1
20
21
Debt components
Federal debt
Nonfederal debt
1,170.8
4,024.6
1,365.3
4,567.6
1,584.3
5,162.6
1,888.6
6,068.0
1,902.5
6,108.1
1,912.9
6,160.3
n.a.
n.a.
751.5
2,855.1
3,585.3
4,223.9
7,933.1
749.4
2,861.5
3,604.0
4,248.2
7,989.0
749.4
2,869.7
3,621.3
4,277.1
8,057.1
757.7
2,889.3
3,646.0
n.a.
n.a.
2,070.7'
691^
1,803.9
5,797.8'
Not seasonally adjusted
22
73
24
25
26
Ml
M2
M3
L
538.3
2,191.6
2,702.4
3,163.1
5,189.7
570.3
2,378.3
2,997.2
3,538.8
5,927.1
641.0
2,580.5
3,218.4
3,849.4
6,740.7
150.6
4.6
251.0
132.2
160.8
4.9
257.2
147.4
173.1
5.5
282.0
180.4
186.2
6.0
319.5
235.0
193.8
7.7
298.6
251.4
194.1
7.9
294.8
252.6
194.3
7.6
293.3
254.3
195.9
7.0
299.8
255.0
1,653.3
510.8
1,808.0
618.9
1,939.5
637.9
2,068.2
692.8
2,103.6
730.2
2,112.1
742.5
2,120.2
751.6
2,131.6
756.7
746.5
2,814.7
3,507.5
4,153.3'
7,594.9
27
28
29
30
M l components
Currency
Travelers checks
Demand deposits 4
Other checkable deposits
31
32
Nontransactions components
M2 6
M3 only
33
34
Money market deposit accounts
Commercial Banks
Thrift institutions
230.4
148.5
267.4
150.0
332.5
180.7
379.0
192.4
365.3
182.9
364.1
179.6
362.5
176.8
359.1
173.6
35
36
Savings deposits 8
Commercial Banks
Thrift institutions
132.2
172.4
121.4
166.2
123.9
178.8
153.8
211.8
178.4
241.8
178.2
240.0
177.9
239.2
178.3
239.4
37
38
Small denomination time deposits 9
Commercial Banks
Thrift institutions
351.1
433.5
386.7
499.6
383.8
501.5
364.4
489.8
363.9
494.7
366.8
499.3
369.0
503.6
374.0
511.0
39
40
Money market mutual funds
General purpose and broker/dealer
Institution-only
138.2
43.2
167.5
62.7
176.5
65.1
207.6
84.1
209.8
83.4
212.8
83.4
216.5
80.7
219.3
81.6
41
42
Large denomination time deposits 1 0
Commercial Banks
Thrift institutions
231.6
96.3
271.2
147.3
285.6
151.9
293.2
154.9
310.4
150.7
313.1
153.2
314.9
155.7
318.3
159.5
43
44
Debt components
Federal debt
Nonfederal debt
1,170.2
4,019.5
1,364.7
4,562.4
1,583.7
5,156.9
1,803.3
5,791.6
1,872.4
6,060.7
1,887.4
6,101.6
1,899.9
6,157.2
For notes see following page.
n.a.
n.a.
A14
DomesticNonfinancialStatistics • January 1988
NOTES TO T A B L E 1.21
1. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults
of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits
at all commercial banks other than those due to domestic banks, the U.S.
government, and foreign banks and official institutions less cash items in the
process of collection and Federal Reserve float; and (4) other checkable deposits
(OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer
service (ATS) accounts at depository institutions, credit union share draft
accounts, and demand deposits at thrift institutions. The currency and demand
deposit components exclude the estimated amount of vault cash and demand
deposits respectively held by thrift institutions to service their OCD liabilities.
M2: M l plus overnight (and continuing contract) repurchase agreements (RPs)
issued by all commercial banks and overnight Eurodollars issued to U.S. residents
by foreign branches of U.S banks worldwide, MMDAs, savings and smalldenomination time deposits (time deposits—including retail RPs—in amounts of
less than $100,000), and balances in both taxable and tax-exempt general purpose
and broker/dealer money market mutual funds. Excludes individual retirement
accounts (IRA) and Keogh balances at depository institutions and money market
funds. Also excludes all balances held by U.S. commercial banks, money market
funds (general purpose and broker/dealer), foreign governments and commercial
banks, and the U.S. government. Also subtracted is a consolidation adjustment
that represents the estimated amount of demand deposits and vault cash held by
thrift institutions to service their time and savings deposits.
M3: M2 plus large-denomination time deposits and term RP liabilities (in
amounts of $100,000 or more) issued by commercial banks and thrift institutions,
term Eurodollars held by U.S. residents at foreign branches of U.S. banks
worldwide and at all banking offices in the United Kingdom and Canada, and
balances in both taxable and tax-exempt, institution-only money market mutual
funds. Excludes amounts held by depository institutions, the U.S. government,
money market funds, and foreign banks and official institutions. Also subtracted
is a consolidation adjustment that represents the estimated amount of overnight
RPs and Eurodollars held by institution-only money market mutual funds.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper and bankers acceptances, net of money
market mutual fund holdings of these assets.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. The source of data on domestic
nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt
data are based on monthly averages.
2. Currency outside the U.S. Treasury, Federal Reserve Banks, and, vaults of
commercial banks. Excludes the estimated amount of vault cash held by thrift
institutions to service their OCD liabilities.
3. Outstanding amount of U . S . dollar-denominated travelers checks of
nonbank issuers. Travelers checks issued by depository institutions are included
in demand deposits.
4. Demand deposits at commercial banks and foreign-related institutions other
than those due to domestic banks, the U.S. government, and foreign banks and
official institutions less cash items in the process of collection and Federal
Reserve float. Excludes the estimated amount of demand deposits held at
commercial banks by thrift institutions to service their OCD liabilities.
5. Consists of NOW and ATS balances at all depository institutions, credit
union share draft balances, and demand deposits at thrift institutions. Other
checkable deposits seasonally adjusted equals the difference between the seasonally adjusted sum of demand deposits plus OCD and seasonally adjusted demand
deposits. Included are all ceiling free "Super N O W s , " authorized by the
Depository Institutions Deregulation committee to be offered beginning Jan. 5,
1983.
6. Sum of overnight RPs and overnight Eurodollars, money market fund
balances (general purpose and broker/dealer), MMDAs, and savings and small
time deposits, less the consolidation adjustment that represents the estimated
amount of demand deposits and vault cash held by thrift institutions to service
their time and savings deposits liabilities.
7. Sum of large time deposits, term RPs, and term Eurodollars of U . S .
residents, money market fund balances (institution-only), less a consolidation
adjustment that represents the estimated amount of overnight RPs and Eurodollars held by institution-only money market funds.
8. Savings deposits exclude MMDAs.
9. Smnall-denomination time deposits—including retail RPs—are those issued
in amounts of less than $100,000. All individual retirement accounts (IRA) and
Keogh accounts at commercial banks and thrifts are subtracted from small time
deposits.
10. Large-denomination time deposits are those issued in amounts of $100,000
or more, excluding those booked at international banking facilities.
11. Large-denomination time deposits at commercial banks less those held by
money market mutual funds, depository institutions, and foreign banks and
official institutions.
NOTE: Latest monthly and weekly figures are available from the Board's H.6
(508) release. Historical data are available from the Banking Section, Division of
Research and Statistics, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551.
Monetary and Credit Aggregates
A15
1.22 BANK DEBITS AND DEPOSIT TURNOVER 1
Debits are shown in billions of dollars, turnover as ratio of debits to deposits. Monthly data are at annual rates.
1987
Bank group, or type of customer
1984 2 ''
19852''
1986 ''
Mar/
Apr/
May'
June'
July
Aug.
Seasonally adjusted
Demand deposits
1
All insured banks
2
Major N e w York City banks
3
Other banks
,
4 A T S - N O W accounts 4
5 Savings deposits
131,463.1
57,327.3
74,135.9
1,549.1
414.7
156,091.6
70,585.8
85,505.9
1,823.5
384.9
188,345.9
91,397.6
96,948.3
2,182.5
403.5
217,241.7
106,103.9
111,137.8
2,297.8
498.4
217,788.4
105,174.7
112,613.7
2,384.3
508.1
217,393.9
107,719.8
109,674.0
2,310.5
488.5
212,421.0
103,031.9
109,389.1
2,417.4
565.7
219,492.2
106,415.1
113,077.1
2,498.7
548.2
221,725.9
109,060.6
112,665.3
2,333.3
518.9
441.0
1,837.2
277.8
15.3
3.3
500.3
2,196.9
305.7
15.8
3.2
556.5
2,497.8
321.2
15.6
3.0
615.5
2,766.0
353.3
13.5
3.0
607.0
2,670.0
352.6
13.8
3.0
598.4
2,627.8
340.3
13.3
2.8
601.6
2,673.2
347.8
13.9
3.3
628.6
2,836.0
362.8
14.3
3.1
623.3
2,718.8
357.0
13.2
3.0
DEPOSIT TURNOVER
6
7
8
9
10
Demand deposits 3
All insured banks
Major N e w York City banks
Other banks
A T S - N O W accounts 4
Savings deposits
Not seasonally adjusted
Demand deposits 3
11
All insured banks
12
Major N e w York City banks
13
Other banks
14 A T S - N O W accounts 4
15 MMDA
16 Savings deposits
131,450.6
57,282.4
74,164.2
1,552.2
862.3
415.2
156,052.3
70,559.3
85,493.1
1,826.4
1,223.9
385.3
188,506.5
91,500.0
97,006.6
2,184.6
1,609.4
404.1
222,225.4
108,971.4
113,254.1
2,269.8
1,800.1
479.1
228,142.6
111,399.0
116,743.5
2,564.0
2,175.9
563.3
208,310.0
101,203.2
107,106.7
2,262.9
1,851.2
483.7
221,038.4
106,171.3
114,867.0
2,466.9
1,987.9
565.2
228,764.2
111,157.7
117,606.5
2,466.0
2,002.7
576.5
214,145.9
103,822.8
110,323.1
2,226.4
1,752.7
524.2
441.1
1,838.6
277.9
15.4
3.5
3.3
499.9
2,196.3
305.6
15.8
4.0
3.2
556.7
2,499.1
321.2
15.6
4.5
3.0
643.2
2,813.0
369.2
13.3
4.8
2.9
634.8
2,825.8
364.9
14.4
5.8
3.3
584.0
2,556.8
337.8
13.2
5.1
2.8
625.0
2,801.5
363.8
14.3
5.4
3.3
651.7
2,928.4
375.7
14.3
5.5
3.3
612.5
2,721.9
354.2
12.8
4.8
3.0
DEPOSIT TURNOVER
17
18
19
20
21
22
Demand deposits 3
All insured banks
Major N e w York City banks
Other banks
A T S - N O W accounts 4
MMDA
Savings deposits
1. These series have been revised to reflect new benchmark adjustments and
revised seasonal factors as well as some revisions of reported data. Historical
tables containing revised data for earlier periods may be obtained from the
Banking Section, Division of Monetary Affairs, Board of Governors of the
Federal Reserve System, Washington, D.C. 20551.
These data also appear on the Board's G.6 (406) release. For address, see inside
front cover.
2. Annual averages of monthly figures.
3. Represents accounts of individuals, partnerships, and corporations and of
states and political subdivisions.
4. Accounts authorized for negotiable orders of withdrawal (NOW) and accounts authorized for automatic transfer to demand deposits (ATS). ATS data are
available beginning December 1978.
5. Excludes ATS and NOW accounts, MMDA and special club accounts, such
as Christmas and vacation clubs.
6. Money market deposit accounts.
A16
DomesticNonfinancialStatistics • January 1988
1.23 LOANS AND SECURITIES
All Commercial Banks1
Billions of dollars; averages of Wednesday figures
1986
1987
r* *
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Seasonally adjusted
1 Total loans and securities 2
2 U . S . government securities
3 Other securities
4 Total loans and leases 2
5
Commercial and industrial . . . . .
6
Bankers acceptances held . . .
7
Other commercial and
industrial
8
U . S . addressees 4 ..
y
N o n - U . S . addressees
10
Real estate
a
Individual
12
Security
13
Nonbank financial
institutions
14
Agricultural
15
State and political
subdivisions
16
Foreign banks
Foreign official institutions
17
18
Lease financing receivables . . . .
19
All other loans
2,063.5
2,089.8
2,118.3
2,119.7
2,126.2
2,147.3
2,160.6
2,167.1
2,169.5
2,189.0
2,206.7
2,225.8
304.1
197.9
1,561.5
525.7
6.4
309.9
196.9
1,583.0
541.4
6.4
316.3
190.2
1,611.8
554.1
6.8
315.2
193.8
1,610.7
553.8
6.8
314.3
195.5
1,616.4
551.7
6.2
315.8
197.2
1,634.3
553.9
6.5
320.1
197.6
1,642.9
555.9
6.8
316.9
198.5
1,651.7
558.0
6.8
319.8
196.9
1,652.8
555.5
6.7
328.6
194.9
1,665.5
555.6
7.5
331.7 r
194.6 r
1,680.4
560.5 r
332.3
194.2
1,699.3
565.7
7.7
519.2
510.7
8.5
479.6
312.6
40.1
535.0
525.7
9.3
489.0
314.2
38.7
547.2
537.8
9.4
499.2
314.9
37.7
546.9
537.9
9.0
504.0
315.2
38.5
545.5
536.9
8.6
511.0
315.7
38.3
547.4
539.0
8.4
517.9
316.6
43.6
549.0
540.9
8.1
526.3
316.7
42.0
551.2
542.8
8.4
537.2
314.5
42.2
548.9
540.6
8.3
544.1
314.6
41.7
548.1
540.0
8.1
551.3
316.9
44.0
553.l r
545.0 r
8.1
556.2
318.9
45.0
558.0
550.0
7.9
564.3
320.4
45.4
34.9
32.2
35.2
31.8
35.7
31.4
34.7
30.8
35.0
30.0
35.4
29.8
35.4
29.9
33.9
29.9
31.9
30.0
30.9
30.2
30.8 r
30.2
31.5
30.4
58.7
10.0
5.9
22.0
39.9
57.9
10.4
5.8
22.2
36.4
57.8
10.6
5.9
22.1
42.4
57.2
10.3
6.1
22.2
38.0
57.0
9.7
6.7
22.3
38.9
56.0
9.9
6.7
22.6
41.9
55.2
9.9
5.8
22.9
43.1
54.4
10.3
5.3
23.1
42.9^
53.2
9.4
5.2
23.2
44.0
52.6
9.5
5.1
23.3
46.1
52.5 r
9.8
5.1
23.8
47.6
52.6
11.1
5.5
23.8
48.7
i.y
Not seasonally adjusted
20 Total loans and securities 2
2,064.2
2,105.2
2,123.7
2,121.6
2,127.8
2,148.4
2,157.9
2,166.8
2,164.5
2,180.5
2,204.2 r
2,216.1
21 U . S . government securities
22 Other securities
23 Total loans and leases 2
24
Commercial and industrial . . . . .
25
Bankers acceptances h e l d 3 . . .
26
Other commercial and
industrial
27
U . S . addressees 4 .
28
Non-U.S. addressees
29
Real estate
30
Individual
31
Security
32
Nonbank financial
institutions
33
Agricultural
34
State and political
subdivisions
35
Foreign banks
36
Foreign official institutions
J7
Lease financing receivables . . . .
38
All other loans
303.2
198.3
1,562.6
525.2
6.6
308.3
198.1
1,598.7
544.3
6.7
314.6
193.7
1,615.4
552.4
6.7
318.9
194.1
1,608.6
551.7
6.7
317.2
194.4
1,616.2
554.5
6.2
317.7
195.2
1,635.4
556.5
6.4
319.7
196.8
1,641.4
557.5
6.7
317.4
197.1
1,652.4
559.1
6.9
321.0
194.8
1,648.7
554.6
6.8
327.5
195.3
1,657.7
552.7
7.4
330.4 r
195.5
l,678.2 r
559.3
7.6'
328.4
194.8
1,692.9
563.0
7.5
518.5
509.5
9.1
480.7
313.7
40.4
537.6
528.8
8.8
489.9
317.8
41.0
545.8
537.1
8.7
499.3
317.9
39.4
545.0
536.3
8.7
503.1
314.7
37.5
548.3
539.9
8.4
509.8
313.3
38.6
550.0
541.6
8.4
516.7
314.4
45.1
550.8
542.5
8.3
525.4
314.8
42.0
552.3
543.7
8.6
536.8
313.2
43.0
547.8
539.0
8.8
544.3
313.5
40.9
545.3
536.8
8.5
551.5
316.7
41.5
551.7 r
543.3
8.4
557.3
319.8
43.4
555.5
547.2
8.3
565.3
321.4
43.8
35.4
32.3
36.3
31.5
35.7
30.7
33.8
29.9
33.8
29.1
34.8
29.1
34.9
29.7
33.9
30.3
31.9
30.7
31.1
31.0
31.5 r
31.1
31.7
31.1
58.7
10.1
5.9
21.8
38.5
57.9
10.9
5.8
22.2
41.2
57.8
10.7
5.9
22.4
43.1
57.2
10.5
6.1
22.4
41.5
57.0
9.7
6.7
22.5
41.2
56.0
9.5
6.7
22.7
43.9
55.2
9.6
5.8
22.9
43.6
54.4
10.0
5.3
23.2
43.2
53.2
9.4
5.2
23.1
42.0
52.6
9.3
5.1
23.2
42.9
52.5 r
10.0
5.1
23.6
44.6 r
52.6
11.1
5.5
23.5
43.9
1. These data also appear in the Board's G.7 (407) release.
2. Excludes loans to commercial banks in the United States.
3. Includes nonfinancial commercial paper held.
4. United States includes the 50 states and the District of Columbia.
Commercial Banking Institutions
All
1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS 1
Monthly averages, billions of dollars
1987
1986
Source
Total nondeposit funds
Seasonally adjusted
N o t seasonally adjusted
Federal funds, RPs, and other
borrowings from nonbanks 3
3
Seasonally adjusted
4
Not seasonally adjusted
5 Net balances due to foreign-related
institutions, not seasonally
adjusted
1
2
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July'
Aug.
Sept.
Oct.
145.3
146.9
146.5
146.6
155.2'
154.7'
159.6
162.3
164.1
166.5
160.9'
161.0'
169.6'
170.4'
165.8'
163.0'
158.8
155.6
165.6'
165.6'
176.9'
176.3'
175.8
174.8
167.2
168.7'
165.5'
165.7
171.0
170.5
171.6
174.3
170.4
172.7
171.3'
171.4
169.6
170.4
167.7
165.0
166.5
163.3
166.9'
167.0'
166.0'
165.3'
165.4
164.5
- l ^
-7.8
-1.3
10.9
10.4
-15.5
67.1
51.5
-22.2
66.4
44.2
-17.7
64.5
46.8
-11.8
64.3
52.5
-14.7
68.1
53.5
-21.9
-19.0
-15.7
-12.0
-6.3
-10.4'
-28.7
70.8
42.1
-30.6
73.3
42.7
-26.1
71.5
45.4
-23.8
68.3
44.5
-21.1
66.0
44.9
-23.0
70.5
47.5
6.9
68.8
75.6
11.5
70.9
82.5
10.4
75.1
85.5
98.1
99.7
98.5
98.6
101.1
100.6
23.2
15.3
21.2
19.2
343.2
343.9
345.6
347.0
.0'
MEMO
6 Domestically chartered banks' net
positions with own foreign
branches, not seasonally
adjusted 4
Gross due from balances
7
8
Gross due to balances
9 Foreign-related institutions' net
positions with directly related
institutions, not seasonally
adjusted
10
Gross due from balances
Gross due to balances
11
Security RP borrowings
Seasonally adjusted
12
Not seasonally adjusted
13
U . S . Treasury demand balances
Seasonally adjusted
14
Not seasonally adjusted
15
Time deposits, $100,000 or more 8
Seasonally adjusted
16
17
Not seasonally adjusted
13.6'
77.2'
90.8
14.5
77.2
91.7
16.4
77.5'
93.8
22.7
77.1
99.8
25.0
79.6
104.6
99.2
100.0
101.4'
98.7
102.5
99.4
105.2'
105.3'
108.6'
van.y
108.6
107.7
20.7
21.6
26.1
30.8
27.9
25.5
24.7
26.6
29.1
21.6
23.3
25.5
35.6
30.7
359.8
357.2
366.2
364.8
372.9
369.8
371.8
368.6
370^
370.2
370.5'
371.7'
377.8
379.0
14.8
71.1
85^
12.6'
72.7'
85.3
97.7
100.4
95.1
97.4
98.6
98.7
21.3
27.5
23.2
28.6
17.7
17.1
350.1
351.3
351.1
353.2
354.1
356.4
1. Commercial banks are those in the 50 states and the District of Columbia
with national or state charters plus agencies and branches of foreign banks. N e w
York investment companies majority owned by foreign banks, and Edge Act
corporations owned by domestically chartered and foreign banks.
2. Includes seasonally adjusted federal funds, RPs, and other borrowings from
nonbanks and not seasonally adjusted net Eurodollars.
3. Other borrowings are borrowings on any instrument, such as a promissory
note or due bill, given for the purpose of borrowing money for the banking
business. This includes borrowings from Federal Reserve Banks and from foreign
11.8
72.9'
84.7
-15.5
68.5
53.0
15.5'
75.5'
91.0
banks, term federal funds, overdrawn due from bank balances, loan RPs, and
participations in pooled loans.
4. Averages of daily figures for member and nonmember banks.
5. Averages of daily data.
6. Based on daily average data reported by 122 large banks.
7. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at
commercial banks. Averages of daily data.
8. Averages of Wednesday figures.
A18
DomesticNonfinancialStatistics • January 1988
1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS
Last-Wednesday-of-Month Series1
Billions of dollars
1986
1987
Account
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept/
Oct.
2,314.3
479.6
292.6
187.0
27.8
1,807.0
168.9
1,638.1
568.2
497.5
320.4
252.0
2,284.8
482.2
296.1
186.1
26.4
1,776.3
160.1
1,616.2
551.1
499.9
317.0
248.3
2,279.4
484.7
298.8
185.9
29.0
1.765.6
156.7
1,608.9
551.5
503.5
314.7
239.2
2,279.2
486.2
299.5
186.7
25.2
1,767.8
154.3
1,613.5
555.3
510.7
313.1
234.4
2,306.2
492.5
305.1
187.5
23.3
1,790.3
151.8
1,638.5
555.5
519.0
315.2
248.9
2,318.9
495.4
307.0
188.4
21.4
1,802.1
160.4
1,641.7
558.2
527.4
314.8
241.3
2,313.4
493.2
303.4
189.8
20.2
1,800.0
150.9
1,649.1
558.0
539.1
312.6
239.5
2,324.3
497.7
308.2
189.4
20.4
1,806.2
157.5
1,648.7
551.8
547.3
314.5
235.2
2,342.2
501.7
312.7
189.0
20.0
1,820.5
162.5
1,658.0
551.6
552.7
317.2
236.6
2,368.8
502.6
312.7
189.9
19.5
1,846.7
158.3
1,688.3
564.6
559.1
321.0
243.6
2,215.2
480.4
304.8
175.6
19.7
1,715.1
133.1
1,582.0
471.9
566.7
322.5
220.8
273.7
41.2
25.7
111.3
214.4
33.4
23.7
74.5
206.3
28.4
23.5
71.4
203.8
31.1
22.9
68.1
209.7
29.8
24.0
74.5
230.8
37.9
25.1
81.3
213.1
33.8
24.2
74.4
207.1
32.8
24.4
68.6
209.3
37.6
24.6
65.6
221.6
33.3
24.4
81.3
205.1
36.5
24.9
78.2
43.3
52.3
34.0
48.8
33.0
50.1
32.7
49.0
33.9
47.5
37.2
49.3
31.1
49.7
31.6
49.6
31.4
50.0
32.6
50.0
31.1
34.4
A L L COMMERCIAL B A N K I N G
INSTITUTIONS2
1 Loans and securities
2
Investment securities
3
U.S. government securities
4
Other
5
Trading account assets
6
Total loans
V
Interbank loans
8
Loans excluding interbank
9
Commercial and industrial
10
Real estate
11
Individual
12
All other
13 Total cash assets
14
Reserves with Federal Reserve Banks.
15
Cash in vault
16
Cash items in process of collection . . .
Demand balances at U.S. depository
17
institutions
Other cash assets
18
19 Other assets
224.8
201.3
201.1
202.1
204.0
208.7
203.8
189.0
190.7
200.6
131.1
20 Total assets/total liabilities and c a p i t a l . . . .
2,812.8
2,700.5
2,686.8
2,685.2
2,719.9
2,758.3
2,730.4
2,720.4
2,742.2
2,791.0
2,551.3
21
22
23
24
25
26
27
2,018.0
691.1
535.0
791.9
414.5
199.6
180.6
1,898.3
577.8
532.3
788.2
432.7
188.0
181.5
1,895.5
569.2
535.9
790.3
425.6
184.6
181.2
1,899.6
568.8
539.7
791.2
414.9
188.7
181.9
1,919.5
590.7
535.1
793.6
422.7
195.2
182.5
1,939.1
596.9
538.6
803.6
435.6
200.3
183.3
1,923.4
578.2
535.0
810.1
428.3
201.3
177.4
1,924.6
573.7
536.0
814.9
424.0
201.1
170.7
1,926.4
572.6
535.2
818.6
435.1
209.2
171.4
1,968.4
610.7
532.7
825.0
424.6
225.0
172.9
1,905.3
587.8
527.0
790.5
346.7
129.1
170.2
308.4
314.5
320.1
316.7
318.9
320.6
315.8
322.6
326.3
326.6
318.8
198.9
194.1
193.7
194.7
196.9
196.1
197.6
195.5
195.4
195.5
181.3
2,154.4
459.3
283.0
176.3
27.8
1,667.3
137.9
1,529.5
488.2
490.3
320.1
230.9
2,136.7
461.5
286.8
174.8
26.4
1,648.8
134.3
1,514.5
475.5
493.2
316.7
229.2
2,130.3
463.3
289.2
174.1
29.0
1,638.0
130.5
1,507.5
474.1
497.0
314.4
221.9
2,121.7
463.6
289.4
174.2
25.2
1,632.9
124.1
1,508.8
474.6
504.1
312.7
217.4
2,146.9
470.0
295.2
174.8
23.3
1,653.6
124.2
1,529.3
473.5
512.0
314.9
229.0
2,156.2
471.5
296.7
174.8
21.4
1,663.3
128.6
1,534.7
475.3
520.3
314.5
224.7
2,151.9
469.8
294.0
175.9
20.2
1,661.8
121.5
1,540.4
471.7
532.1
312.3
224.3
2,157.7
473.8
298.4
175.4
20.4
1,663.5
122.9
1,540.6
466.0
539.9
314.2
220.6
2,174.9
478.1
302.7
175.3
20.0
1,676.9
129.5
1,547.4
464.7
544.9
316.8
221.0
2,191.8
478.2
302.1
176.1
19.5
1,694.1
124.8
1,569.3
471.1
551.1
320.6
226.4
2,215.2
480.4
304.8
175.6
19.7
1,715.1
133.1
1,582.0
471.9
558.9
322.2
229.0
253.5
39.7
25.7
110.9
196.6
31.2
23.6
74.0
188.9
27.1
23.5
71.0
186.5
29.7
22.8
67.7
192.5
27.2
24.0
74.0
213.2
35.9
25.0
80.9
195.3
32.1
24.1
73.9
189.1
31.4
24.4
68.1
190.1
36.2
24.6
65.1
201.4
31.0
24.4
80.7
205.1
36.5
24.9
78.2
40.8
36.4
32.2
35.6
31.1
36.4
31.1
35.2
31.9
35.4
35.1
36.2
29.3
35.9
29.8
35.4
29.8
34.4
30.6
34.7
31.1
34.4
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
Residual (assets less liabilities)
MEMO
28 U.S. government securities (including
trading account)
29 Other securities (including trading account)
DOMESTICALLY C H A R T E R E D
COMMERCIAL B A N K S 3
30 Loans and securities
31
Investment securities
U.S. Treasury securities
32
33
Other
34
Trading account assets
Total loans
35
36
Interbank loans
37
Loans excluding interbank
38
Commercial and industrial
39
Real estate
40
Individual
All other
41
42 Total cash assets
43
Reserves with Federal Reserve Banks.
44
Cash in vault
45
Cash items in process of collection . . .
46
Demand balances at U.S. depository
institutions
47
Other cash assets
165.0
141.5
144.0
143.4
144.4
143.1
134.4
121.8
121.5
135.9
131.1
49 Total assets/liabilities and capital
2,572.8
2,474.8
2,463.2
2,451.5
2,483.8
2,512.5
2,481.5
2,468.7
2,486.5
2,529.1
2,551.3
50
51
52
53
54
55
56
1,957.0
682.2
533.0
741.8
322.9
115.5
177.5
1,840.8
569.4
530.3
741.1
341.7
114.0
178.3
1,838.2
561.3
533.9
743.0
336.1
110.8
178.1
1,840.7
560.5
537.7
742.5
319.1
113.0
178.8
1,857.1
582.2
533.1
741.8
328.2
119.1
179.4
1,876.5
588.4
536.6
751.4
337.1
118.8
180.2
1,861.5
569.7
533.0
758.8
328.6
117.1
174.3
1,863.9
565.6
533.9
764.4
321.1
116.1
167.6
1,864.7
564.3
533.0
767.3
335.8
117.6
168.3
1,906.3
602.0
530.6
773.7
326.5
126.5
169.8
1,905.3
587.8
527.0
790.5
346.7
129.1
170.2
48 Other assets
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
Residual (assets less liabilities)
1. Data have been revised because of benchmarking to new Call Reports and
new seasonal factors beginning July 1985. Back data are available from the
Banking Section. Board of Governors of the Federal Reserve System, Washington, D.C., 20551.
Figures are partly estimated. They include all bank-premises subsidiaries and
other significant majority-owned domestic subsidiaries. Loan and securities data
for domestically chartered commercial banks are estimates for the last Wednesday of the month based on a sample of weekly reporting banks and quarter-end
condition report data. Data for other banking institutions are estimates made for
the last Wednesday of the month based on a weekly reporting sample of
foreign-related institutions and quarter-end condition reports.
2. Commercial banking institutions include insured domestically chartered
commercial banks, branches and agencies of foreign banks, Edge Act and
Agreement corporations, and N e w York State foreign investment corporations.
3. Insured domestically chartered commercial banks include all member banks
and insured nonmember banks.
Weekly Reporting Commercial Banks
A19
1.26 ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of $1.4 Billion or More on
December 31, 1982, Assets and Liabilities
Millions of dollars, Wednesday figures
1987
Account
Sept. T
Sept. 9'
Sept. 16r
Sept. 23
r
Sept. 30r
Oct. 7
Oct. 14
Oct. 21
Oct. 28
97,724
110,655
106,601
104,115
104,707
100,228
117,582
98,119
110,800
1,004,227
1,006,962
1,009,732
1,012,246
1,015,438
1,009,371
1,011,601
1,030,019
1,025,503
3 U.S. Treasury and government agency
Trading acount
4
Investment account, by maturity
6
One year or less
Over one through five years
7
Over five years
8
9 Other securities
Trading account
10
Investment account
11
1?
States and political subdivisions, by maturity
13
One year or less
Over one year
14
IS
Other bonds, corporate stocks, and securities
16 Other trading account assets
116,822
13,257
103,564
17,103
46,993
39,468
67,924
3,050
64,875
49,550
5,492
44,058
15,324
3,330
119,128
14,088
105,040
17,101
47,951
39,987
67,384
2,720
64,664
49,422
5,436
43,986
15,243
3,250
117,293
13,307
103,986
17,064
47,795
39,128
67,264
2,960
64,304
49,087
5,155
43,932
15,217
2,856
117,401
14,236
103,165
16,948
47,322
38,895
67,256
3,083
64,173
48,976
5,129
43,846
15,197
2,927
115,655
13,860
101,796
16,980
45,412
39,403
68,199
2,930
65,269
48,807
5,163
43,644
16,462
2,694
114,569
13,222
101,347
16,936
44,922
39,490
67,189
2,361
64,828
48,345
5,184
43,161
16,483
3,177
113,784
12,405
101,378
17,019
44,795
39,564
67,098
2,390
64,708
48,294
5,189
43,105
16,414
3,137
115,461
14,775
100,686
16,740
44,151
39,794
67,015
2,470
64,546
48,178
5,109
43,068
16,368
2,804
116,726
13,977
102,748
16,028
45,184
41,536
67,564
2,645
64,919
48,212
5,120
43,092
16,707
3,024
17 Federal funds sold 1
18
To commercial banks
19
To nonbank brokers and dealers in securities
70
To others
71 Other loans and leases, gross
Other loans, gross
7?
73
Commercial and industrial
Bankers acceptances and commercial paper
74
75
All other
76
U . S . addressees
Non-U.S. addressees
27
65,531
36,142
21,310
8,079
789,894
770,375
269,578
2,359
267,218
264,114
3,104
64,744
39,639
18,246
6,858
791,776
772,236
269,688
2,372
267,315
264,249
3,066
66,609
39,414
19,212
7,983
795,026
775,533
271,293
2,346
268,948
265,861
3,087
69,426
41,139
20,748
7,539
794,536
774,999
272,221
2,179
270,042
267,032
3,010
65,828
40,156
17,585
8,086
802,053
782,846
275,452
2,168
273,284
270,354
2,930
64,936
40,267
17,098
7,572
798,384
779,155
274,473
2,203
272,270
269,148
3,122
66,166
40,702
18,094
7,369
800,329
781,124
274,095
2,348
271,746
268,776
2,970
74,333
46,976
19,449
7,907
809,252
790,000
273,657
2,234
271,423
268,428
2,994
69,364
41,389
19,416
8,560
807,762
788,472
275,123
2,404
272,720
269,690
3,030
78
79
30
31
234,302
143,007
49,592
21,897
5,019
22,676
15,678
5,604
31,496
2,912
18,206
19,519
4,726
34,548
750,619
118,602
234,890
143,083
51,075
22,508
5,510
23,057
14,626
5,634
31,455
2,781
19,004
19,540
4,739
34,581
752,456
119,930
236,317
143,290
50,086
21,176
5,606
23,304
16,406
5,620
31,517
2,777
18,226
19,493
4,726
34,590
755,710
116,917
236,629
143,550
48,180
21,033
4,586
22,560
16,111
5,625
31,486
2,843
18,353
19,537
4,755
34,545
755,236
115,991
237,063
143,209
48,925
20,560
4,757
23,608
17,089
5,712
31,686
2,841
20,868
19,206
4,716
34,276
763,061
126,716
239,253
142,857
47,728
20,236
4,515
22,977
16,130
5,744
31,738
2,830
18,402
19,229
4,691
34,194
759,499
123,766
240,040
142,928
50,160
21,446
5,696
23,019
14,994
5,725
31,622
2,938
18,622
19,206
4,713
34,200
761,416
122,693
240,590
143,179
50,491
22,322
5,296
22,873
22,089
5,681
31,449
2,881
19,982
19,252
4,714
34,132
770,406
123,987
240,583
143,669
51,581
22,751
5,566
23,264
18,088
5,645
31,322
2,997
19,462
19,291
4,737
34,200
768,825
126,758
1,220,553
1,237,546
1,233,250
1,232,351
1,246,862
1,233,366
1,251,876
1,252,125
1,263,061
225,016
175,618
6,022
1,530
24,642
6,536
1,189
9,479
62,351
525,982
489,182
25,678
777
9,536
809
243,481
0
9,252
234,229
86,432
226,271
175,704
5,098
2,476
26,808
6,833
984
8,367
62,916
525,084
488,297
25,652
832
9,496
806
258,354
787
8,634
248,932
87,228
227,180
174,713
5,761
4,771
24,588
7,162
935
9,250
62,428
524,854
488,185
25,478
813
9,587
790
255,511
161
23,448
231,902
85,842
214,715
166,684
5,731
2,873
21,277
6,103
1,026
11,021
59,809
524,514
487,580
25,729
631
9,758
817
259,749
330
22,009
237,409
96,107
240,176
185,413
6,165
3,113
27,326
6,872
973
10,313
60,364
526,443
488,792
25,824
816
10,226
786
247,201
1,148
21,129
224,924
94,698
216,205
168,924
4,862
2,748
23,745
6,118
840
8,968
62,050
531,057
493,347
25,527
802
10,562
819
254,729
980
19,312
234,437
90,701
237,498
185,413
4,999
1,918
27,651
7,291
976
9,250
61,455
530,669
493,074
25,693
811
10,289
802
253,656
580
18,870
234,206
89,317
225,552
176,610
5,490
1,410
25,272
6,654
966
9,150
60,995
532,822
495,671
25,662
620
10,082
786
262,588
2,720
22,928
236,940
91,014
230,413
178,260
5,335
2,077
24,378
7,174
922
12,267
60,103
533,817
496,316
25,569
795
10,347
790
263,678
275
22,857
240,546
95,943
1,143,262
1,159,853
1,155,814
1,154,894
1,168,883
1,154,742
1,172,595
1,172,971
1,183,954
77,290
77,693
77,435
77,457
77,979
78,624
79,281
79,154
79,107
985,463
797,386
163,917
1,739
1,201
537
228,807
984,134
794,372
162,866
1,692
1,159
533
228,941
988,459
801,045
163,376
1,661
1,150
511
227,946
989,373
801,790
164,695
1,720
1,224
495
226,343
993,713
807,164
165,016
1,731
1,243
488
227,123
987,753
802,817
168,973
1,760
1,249
511
227,240
988,366
804,348
168,518
1,835
1,333
503
227,168
999,567
814,287
170,013
1,843
1,333
510
226,879
1,000,300
812,987
171,715
1,780
1,271
510
224,998
1 Cash and balances due from depository institutions
2 Total loans, leases and securities, net
3?
33
34
35
36
37
38
39
40
41
4?
43
Real estate loans
To individuals for personal expenditures
To depository and financial institutions
Commercial banks in the United States
Banks in foreign countries
Nonbank depository and other financial institutions .
For purchasing and carrying securities
To finance agricultural production
To states and political subdivisions
T o foreign governments and official institutions
All other
Lease financing receivables
LESS: Unearned income
Loan and lease reserve
Other loans and leases, net
All other assets
44 Total assets
45 Demand deposits
46
Individuals, partnerships, and corporations
States and political subdivisions
47
48
U . S . government
49
Depository institutions in United States
50
Banks in foreign countries
51
Foreign governments and official institutions
57
Certified and officers' checks
53 Transaction balances other than demand deposits
54 Nontransaction balances
55
Individuals, partnerships and corporations
56
States and political subdivisions
57
U.S. government
58
Depository institutions in the United States
59
Foreign governments, official institutions and banks . . . .
60 Liabilities for borrowed money
Borrowings from Federal Reserve Banks
61
67
Treasury tax-and-loan notes
63
All other liabilities for borrowed money 2
64
Other liabilities and subordinated note and debentures . .
65 Total liabilities
66 Residual (total assets minus total liabilities) 3
MEMO
67
68
69
70
71
77
73
Total loans and leases (gross) and investments adjusted
Total loans and leases (gross) adjusted 4
Time deposits in amounts of $100,000 or more
Loans sold outright to affiliates—total 5
Commercial and industrial
Other
Nontransaction savings deposits (including MMDAs)
4
..
1. Includes securities purchased under agreements to resell.
2. Includes federal funds purchased and securities sold under agreements to
repurchase; for information on these liabilities at banks with assets of $1 billion or
more on Dec. 31, 1977, see table 1.13.
3. This is not a measure of equity capital for use in capital-adequacy analysis or
for other analytic uses.
4. Exclusive of loans and federal funds transactions with domestic commercial
banks.
5. Loans sold are those sold outright to a bank's own foreign branches,
nonconsolidated nonbank affiliates of the bank, the bank's holding company (if
not a bank), and nonconsolidated nonbank subsidiaries of the holding company.
A20
DomesticNonfinancialStatistics • January 1988
1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities
Millions of dollars, Wednesday figures except as noted
Sept. 2
1 Cash balances due from depository institutions
2 Total loans, leases and securities, net 1
Securities
3 U.S. Treasury and government agency 2
4
Trading account
5
Investment account, by maturity
One year or less
6
7
Over one through five years
Over five years
8
9 Other securities
10
Trading account 2
11
Investment account
12
States and political subdivisions, by maturity
13
One year or less
'.
14
Over one year
15
Other bonds, corporate stocks and securities
16 Other trading account assets
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
Loans and leases
Federal funds sold 3
To commercial banks
To nonbank brokers and dealers in securities
To others
Other loans and leases, gross
Other loans, gross
Commercial and industrial
Bankers acceptances and commercial paper
All other
U.S. addressees
Non-U.S. addressees
Real estate loans
To individuals for personal expenditures
To depository and financial institutions
Commercial banks in the United States
Banks in foreign countries
Nonbank depository and other financial institutions
For purchasing and carrying securities
To finance agricultural production
To states and political subdivisions
To foreign governments and official institutions
All other
Lease financing receivables
LESS: Unearned income
Loan and lease reserve
Other loans and leases, net
All other assets 4
44 Total assets
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
Deposits
Demand deposits
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Depository institutions in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Transaction balances other than demand deposits
(ATS, NOW, Super NOW, telephone transfers)
Nontransaction balances
Individuals, partnerships and corporations
States and political subdivisions
U.S. government
Depository institutions in the United States
Foreign governments, official institutions and banks
Liabilities for borrowed money
Borrowings from Federal Reserve Banks
Treasury tax-and-loan notes
All other liabilities for borrowed money
Other liabilities and subordinated note and debentures
...
...
65 Total liabilities
66 Residual (total assets minus total liabilities) 6
Sept. 9
Sept. 16
Sept. 23
Sept. 30
Oct. 7
Oct. 14
Oct. 21
Oct. 28
21,515
29,498
25,771
29,470
24,899'
25,586
32,338
23,613
31,405
215,139
215,157
215,393
219,799
218,796'
213,240
215,854
226,060
221,491
0
0
13,871
1,962
5,128
6,781
0
0
16,644
13,707
1,017
12,689
2,938
0
0
0
14,465
1,981
5,125
7,359
0
0
16,548
13,661
971
12,690
2,886
0
0
0
14,206
2,112
4,718
7,376
0
0
16,532
13,646
942
12,703
2,886
0
0
0
13,991
1,921
4,683
7,386
0
0
16,477
13,607
933
12,674
2,870
0
0
0
14,003
1,950
4,666
7,387
0
0
16,491
13,528
944
12,584
2,963
0
0
0
13,863
1,912
4,573
7,378
0
0
16,520
13,567
921
12,646
2,953
0
0
0
13,975
1,982
4,570
7,424
0
0
16,480
13,558
929
12,629
2,922
0
0
0
13,874
1,922
4,377
7,574
0
0
16,444
13,526
874
12,652
2,918
0
0
0
14,486
1,427
4,442
8,618
0
0
16,518
13,510
863
12,647
3,008
0
30,411
11,240
13,105
6,065
170,080
165,209
57,121
473
56,648
56,144
503
44,176
21,696
19,808
10,901
2,731
6,176
7,494
284
7,727
768
6,134
4,871
1,511
14,356
154,213
56,629
28,349
13,428
10,194
4,727
171,725
166,841
57,390
503
56,887
56,433
454
44,330
21,749
21,371
11,818
3,309
6,244
6,610
300
7,714
634
6,742
4,883
1,526
14,404
155,795
55,895
27,471
11,360
10,496
5,616
173,098
168,188
58,221
494
57,727
57,241
486
44,668
21,832
20,685
10,839
3,485
6,361
7,993
302
7,741
647
6,098
4,909
1,527
14,386
157,184
53,305
32,844
15,008
12,477
5,360
172,392
167,457
58,705
463
58,242
57,808
435
44,794
21,939
19,740
10,879
2,493
6,367
7,432
304
7,731
724
6,087
4,935
1,546
14,359
156,487
52,752
29,068
12,688
10,674
5,706
175,071'
170,585'
59,37c
475'
58,894'
58,474'
421
44,675
21,931'
20,409'
11,184'
2,710'
6,515
7,897
328
7,839
745
7,390
4,486
1,528
14,309'
159,234'
57,077'
26,783
11,713
9,736
5,335
171,781
167,287
58,976
496
58,480
57,882
598
44,752
21,964
19,568
10,876
2,516
6,176
6,986
320
7,847
734
6,139
4,494
1,532
14,176
156,074
57,030
27,532
11,369
11,359
4,804
173,630
169,170
59,111
550
58,561
58,084
477
44,680
22,075
21,499
11,697
3,480
6,321
6,585
323
7,821
797
6,278
4,460
1,547
14,217
157,865
56,632
32,036
14,353
12,364
5,319
179,406
174,951
58,055
456
57,599
57,138
462
44,677
22,155
21,863
12,267
3,286
6,310
12,041
324
7,781
747
7,306
4,456
1,552
14,149
163,705
59,526
28,582
11,572
11,472
5,538
177,641
173,148
59,197
441
58,756
58,249
507
44,457
22,214
22,955
12,609
3,498
6,849
8,839
337
7,737
855
6,556
4,493
1,560
14,176
161,905
60,634
293,283
300,550
294,470
302,021
300,772'
295,856
304,824
309,199
313,530
58,230
40,388
956
179
6,192
5,420
1,035
4,060
59,013
40,667
776
407
7,169
5,647
828
3,518
58,501
40,374
842
616
5,683
6,027
783
4,177
59,535
40,715
788
512
5,275
4,984
882
6,378
65,610'
44,795'
890
547
8,159'
5,642'
837'
4,740
55,632
37,682
831
476
6,845
4,991
699
4,108
62,241
43,303
766
269
6,588
6,170
844
4,300
61,314
42,725
861
196
7,187
5,532
843
3,971
66,510
44,896
991
314
7,040
5,773
788
6,709
8,146
100,360
91,566
6,696
47
1,658
392
67,833
0
2,185
65,648
36,371
8,196
99,921
91,162
6,695
59
1,603
401
75,446
0
2,124
73,321
35,544
8,183
100,493
91,774
6,660
48
1,619
392
68,936
0
5,566
63,370
36,085
7,909
99,342
90,623
6,664
49
1,609
398
71,111
0
5,720
65,391
41,810
8,012
99,769
91,017
6,686
53
1,629
383
64,145
410
4,736'
58,999'
40,614'
8,159
102,090
93,120
6,736
47
1,780
407
70,906
450
4,811
65,644
36,335
8,034
101,897
92,734
6,956
54
1,759
394
74,108
0
4,830
69,278
35,350
8,025
101,635
92,362
6,990
68
1,832
382
78,348
2,400
5,840
70,108
36,691
7,888
102,270
93,095
6,895
70
1,832
378
75,705
0
5,792
69,913
38,192
270,940
278,119
272,198
279,707
278,151'
273,123
281,630
286,013
290,565
22,344
22,430
22,271
22,315
22.62C
22,733
23,194
23,186
22,966
208,865
178,350
37,178
205,840
174,828
36,767
209,108
178,370
37,312
209,817
179,349
36,701
210,760'
180,266'
36,891
206,359
175,976
38,952
208,552
178,0%
38,628
215,141
184,823
38,832
213,046
182,042
38,751
MEMO
67 Total loans and leases (gross) and investments adjusted 1 ' 7
68 Total loans and leases (gross) adjusted
69 Time deposits in amounts of $100,000 or more
1. Excludes trading account securities.
2. Not available due to confidentiality.
3. Includes securities purchased under agreements to resell.
4. Includes trading account securities.
5. Includes federal funds purchased and securities sold under agreements to
repurchase.
6. Not a measure of equity capital for use in capital adequacy analysis or for
other analytic uses.
7. Exclusive of loans and federal funds transactions with domestic commercial
banks.
NOTE. These data also appear in the Board's H.4.2 (504) release. For address,
see inside front cover.
Weekly Reporting Commercial Banks
1.30 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS 1
Liabilities
A21
Assets and
Millions of dollars, Wednesday figures
1987
Account
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
Cash and due from depository institutions . . .
Total loans and securities
U . S . Treasury and govt, agency securities . . .
Other securities
Federal funds sold
To commercial banks in the United States .
To others
Other loans, gross
Commercial and industrial
Bankers acceptances and commercial
paper
All other
U.S. addressees
N o n - U . S . addressees
To financial institutions
Commercial banks in the United States..
Banks in foreign countries
Nonbank financial institutions
To foreign govts, and official institutions . .
For purchasing and carrying securities . . . .
All other
Other assets (claims on nonrelated parties) . .
Net due from related institutions
Total assets
Deposits or credit balances due to other
than directly related institutions
Transaction accounts and credit balances .
Individuals, partnerships, and
corporations
Other
Nontransaction accounts
Individuals, partnerships, and
corporations
Other
Borrowings from other than directly
related institutions
Federal funds purchased 5
From commercial banks in the
United States
From others
Other liabilities for borrowed money
To commercial banks in the
United States
To others
Other liablities to nonrelated parties
Net due to related institutions
Total liabilities
Sept. 2
Sept. 9
Sept. 16
Sept. 23
Sept. 30 r
Oct. 7
Oct. 14
Oct. 21
Oct. 28
9,187
93,941
7,425
7,913
7,472
6,090
1,382
71,131
46,454
10,762
96,792
7,204
7,915
8,891
7,271
1,620
72,782
47,598
10,253
98,290
7,391
7,914
8,078
6,206
1,872
74,907
49,447
10,248
99,592
7,970
7,860
9,224
7,296
1,927
74,539
49,183
11,738
99,614
7,318
8,029
7,196
5,691
1,505
77,070
50,165
9,864
97,165
7,389
8,019
7,298
5,858
1,440
74,459
49,018
9,451
98,710
7,330
7,958
9,041
7,744
1,297
74,382
48,871
9,800
101,124
7,441
7,853
10,787
8,900
1,887
75,043
49,487
9,695
101,145
6,946
7,753
12,234
10,399
1,835
74,212
49,415
3,834
42,620
40,248
2,371
15,222
11,340
986
2,896
355
2,379
6,721
27,887
17,145
148,160
3,986
43,612
41,114
2,498
15,204
11,280
1,042
2,881
424
2,805
6,750
27,771
15,632
150,958
4,116
45,331
42,913
2,418
15,748
11,850
1,079
2,818
356
2,765
6,592
27,718
16,690
152,950
3,951
45,232
42,825
2,407
16,047
11,986
1,138
2,923
342
2,184
6,783
28,140
16,138
154,120
3,827
46,338
43,912
2,426
16,769
12,521
1,340
2,908
385
2,876
6,875
28,787
14,893
155,032
3,876
45,142
42,756
2,386
16,485
12,230
1,196
3,059
395
1,685
6,876
28,690
15,746
151,466
3,996
44,875
42,468
2,407
16,336
11,994
1,299
3,042
409
1,750
7,016
28,487
15,414
152,063
3,912
45,575
43,150
2,425
15,798
11,292
1,465
3,041
387
2,505
6,866
28,872
15,940
155,736
3,916
45,499
43,120
2,379
15,360
11,304
1,117
2,938
385
2,287
6,766
28,513
14,019
153,372
43,044
3,360
43,744
3,658
43,601
3,394
44,098
3,536
43,652
3,644
42,133
3,193
42,504
3,433
42,285
3,337
42,811
3,531
2,129
1,231
39,684
2,302
1,356
40,086
2,163
1,230
40,207
2,114
1,422
40,562
2,029
1,616
40,007
2,217
976
38,941
2,045
1,388
39,071
2,215
1,121
38,949
1,984
1,547
39,280
32,244
7,440
32,569
7,517
32,788
7,419
33,323
7,238
32,399
7,608
31,663
7,278
31,840
7,231
31,880
7,069
32,118
7,163
53,897
25,347
53,023
24,419
56,222
26,872
54,777
25,092
55,302
25,328
56,947
27,613
55,804
26,372
58,085
28,002
53,854
25,454
12,817
12,530
28,549
13,103
11,315
28,604
14,356
12,516
29,349
12,190
12,902
29,684
13,630
11,698
29,974
14,839
12,774
29,334
15,082
11,289
29,432
16,902
11,101
30,082
16,093
9,361
28,400
22,368
6,181
31,132
20,088
148,160
22,452
6,152
31,489
22,702
150,958
22,283
7,066
31,264
21,863
152,950
22,975
6,710
32,646
22,599
154,120
23,674
6,300
32,498
23,580
155,032
23,001
6,332
32,674
19,711
151,466
22,971
6,461
32,563
21,191
152,063
23,297
6,785
32,929
22,437
155,736
22,054
6,345
33,127
23,580
153,372
76,511
61,172
78,241
63,121
80,234
64,929
80,310
64,481
81,402
66,054
79,077
63,669
78,972
63,685
80,932
65,638
79,442
64,742
MEMO
41 Total loans (gross) and securities adjusted
42 Total loans (gross) ajdusted 6
..
1. Effective Jan. 1, 1986, the reporting panel includes 65 U.S. branches and
agencies of foreign banks that include those branches and agencies with assets of
$750 million or more on June 30, 1980, plus those branches and agencies that had
reached the $750 million asset level on Dec. 31, 1984.
2. Includes securities purchased under agreements to resell.
3. Includes credit balances, demand deposits, and other checkable deposits.
4. Includes savings deposits, money market deposit accounts, and time deposits.
5. Includes securities sold under agreements to repurchase.
6. Exclusive of loans to and federal funds sold to commercial banks in the
United States.
A22
DomesticNonfinancialStatistics • January 1988
1.31 GROSS DEMAND DEPOSITS Individuals, Partnerships, and Corporations1
Billions of dollars, estimated daily-average balances, not seasonally adjusted
Commercial banks
1986
Type of holder
1982
Dec.
1983
Dec.
1984
Dec.
1987
Decj'4
June
Sept.
Dec.
Mar.
June
Sept.
1 All holders—Individuals, partnerships, and
corporations
291.8
293.5
302.7
321.0
322.4
333.6
363.6
335.9
340.2
n.a.
2
3
4
5
6
35.4
150.5
85.9
3.0
17.0
32.8
161.1
78.5
3.3
17.8
31.7
166.3
81.5
3.6
19.7
32.3
178.5
85.5
3.5
21.2
32.3
180.0
86.4
3.0
20.7
35.9
185.9
86.3
3.3
22.2
41.4
202.0
91.1
3.3
25.8
35.9
183.0
88.9
2.9
25.2
36.6
187.2
90.1
3.2
23.1
n.a.
n.a.
n.a.
n.a.
n.a.
Financial business
Nonfinancial business
Consumer
Foreign
Other
Weekly reporting banks
1986
1982
Dec.
7 All holders—Individuals, partnerships, and
corporations
8
9
10
11
12
Financial business
Nonfinancial business
Consumer
Foreign
Other
1983
Dec.
1987
1985
Dec. 3 ' 4
June
Sept.
Dec.
Mar.
June
Sept.
144.2
146.2
157.1
168.6
168.5
174.7
195.1
178.1
179.3
179.1
26.7
74.3
31.9
2.9
8.4
24.2
79.8
29.7
3.1
9.3
25.3
87.1
30.5
3.4
10.9
25.9
94.5
33.2
3.1
12.0
25.7
93.1
34.9
2.9
11.9
28.9
94.8
35.0
3.2
12.8
32.5
106.4
37.5
3.3
15.4
28.7
94.4
36.8
2.8
15.5
29.3
94.8
37.5
3.1
14.6
29.3
96.0
37.2
3.1
13.5
1. Figures include cash items in process of collection. Estimates of gross
deposits are based on reports supplied by a sample of commercial banks. Types
of depositors in each category are described in tne June 1971 BULLETIN, p. 456.
Figures may not add to totals because of rounding.
2. Beginning in March 1984, these data reflect a change in the panel of weekly
reporting banks, and are not comparable to earlier data. Estimates in billions of
dollars for December 1983 based on the new weekly reporting panel are: financial
business, 24.4; nonfinancial business, 80.9; consumer, 30.1; foreign, 3.1; other
9.5.
3. Beginning March 1985, financial business deposits and, by implication, total
gross demand deposits have been redefined to exclude demand deposits due to
1984
Dec. 2
thrift institutions. Historical data have not been revised. The estimated volume of
such deposits for December 1984 is $5.0 billion at all insured commercial banks
and $3.0 billion at weekly reporting banks.
4. Historical data back to March 1985 have been revised to account for
corrections of bank reporting errors. Historical data before March 1985 have not
been revised, and may contain reporting errors. Data for all commercial banks for
March 1985 were revised as follows (in billions of dollars): all holders, - . 3 ;
financial business, - . 8 ; nonfinancial business, - . 4 ; consumer, .9; foreign, .1;
other, - . 1 . Data for weekly reporting banks for March 1985 were revised as
follows (in billions of dollars): all holders, - . 1 ; financial business, - . 7 ;
nonfinancial business, - . 5 ; consumer, 1.1; foreign, .1; other, - . 2 .
Financial Markets
A23
1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
1987
1982
Dec.
1983
Dec.
1984
Dec.
1985
Dec.
1986
Dec.
Apr.
May
June
July
Aug.
Sept.
Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers
2
3
4
5
6
Financial companies 3
Dealer-placed
paper4
Total
Bank-related (not seasonally
adjusted)
Directly placed
paper
Total
Bank-related (not seasonally
adjusted)
Nonfinancial companies 6
166,436
187,658
237,586
300,899
331,016
346,769
354,249
348,741
348,247
352,737
358,828
34,605
44,455
56,485
78,443
100,207
103,957
105,397
108,691
107,709
110,714
115,570
2,516
2,441
2,035
1,602
2,265
2,307
2,429
2,430
2,311
2,404
2,590
84,393
97,042
110,543
135,504
152,385
163,421
169,225
161,921
162,185
163,620
166,169
32,034
47,437
35,566
46,161
42,105
70,558
44,778
86,952
40,860
78,424
48,604
79,391
48,401
79,627
47,862
78,129
46,354
78,353
45,487
78,403
46,815
77,089
Bankers dollar acceptances (not seasonally adjusted) 7
7 Total
8
9
10
11
12
13
Holder
Accepting banks
Own bills
Bills bought
Federal Reserve Banks
Own account
Foreign correspondents
Others
Basis
14 Imports into United States
15 Exports from United States
16 All other
79,543
78,309
78,364
68,413
64,974
66,752
67,790
69,622
68,495
68,645'
68,771
10,910
9,471
1,439
9,355
8,125
1,230
9,811
8,621
1,191
11,197
9,471
1,726
13,423
11,707
1,716
11,180
9,783
1,396
11,201
9,569
1,631
11,234
9,661
1,573
10,664
9,630
1,035
10,870'
9,905'
965
10,521
9,400
1,121
1,480
949
66,204
418
729
67,807
0
671
67,881
0
937
56,279
0
1,317
50,234
0
1,519
54,052
0
1,547
55,032
0
1,717
56,671
0
1,463
56,367
0
1,397
56,379'
0
1,467
56,784
17,683
16,328
45,531
15,649
16,880
45,781
17,845
16,305
44,214
15,147
13,204
40,062
14,670
12,960
37,344
15,116
13,836
37,838
15,361
14,028
38,401
16,179
14,161
39,281
17,431
14,659
36,405
17,087'
14,967'
36,590'
17,198
15,046
36,526
1. Effective Dec. 1, 1982, there was a break in the commercial paper series.
The key changes in the content of the data involved additions to the reporting
panel, the exclusion of broker or dealer placed borrowings under any master note
agreements from the reported data, and the reclassification of a large portion of
bank-related paper from dealer-placed to directly placed.
2. Correction of a previous misclassification of paper by a reporter has created
a break in the series beginning December 1983. The correction adds some paper
to nonfinancial and to dealer-placed financial paper.
3. Institutions engaged primarily in activities such as, but not limited to,
commercial savings, and mortgage banking; sales, personal, and mortgage financing; factoring, finance leasing, and other business lending; insurance underwriting; and other investment activities.
4. Includes all financial company paper sold by dealers in the open market.
5. As reported by financial companies that place their paper directly with
investors.
6. Includes public utilities and firms engaged primarily in such activities as
communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.
7. Beginning October 1984, the number of respondents in the bankers acceptance survey were reduced from 340 to 160 institutions—those with $50 million or
more in total acceptances. The new reporting group accounts for over 95 percent
of total acceptances activity.
1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans
Percent per annum
Rate
10.50
10.00
9.50
9.00
8.50
8.00
7.50
Effective Date
1987—Apr.
May
1
1
IS
Sept. 4
Oct. 7
??
Nov. s
Rate
7.75
8.00
8.25
8.75
9.25
9.00
8.75
NOTE. These data also appear in the Board's H.15 (519) release. For address,
see inside front cover.
Month
Average
rate
1985—Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
10.61
10.50
10.50
10.50
10.31
9.78
9.50
9.50
9.50
9.50
9.50
9.50
1986—Jan.
Feb.
Mar.
Apr.
May
June
9.50
9.50
9.10
8.83
8.50
8.50
Month
July
Aug.
Sept.
Oct.
Nov.
Dec.
1987—Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct..
Nov.
A24
DomesticNonfinancialStatistics • January 1988
1.35 INTEREST RATES Money and Capital Markets
Averages, percent per annum; weekly and monthly figures are averages of business day data unless otherwise noted.
1987
Instrument
1984
1985
1987, week ending
1986
July
Aug.
Sept.
Oct.
Oct. 2
Oct. 9
Oct. 16
Oct. 23
Oct. 30
M O N E Y MARKET RATES
1 Federal funds 1 ' 2
2 Discount widow borrowing 1,2,3
Commercial paper '
1-month
3
4
3-month
5
6-month
Finance paper, directly placed 4.
6
1-month
7
3-month
8
6-month
Bankers acceptances 5 , 6
9
3-month
10
6-month
Certificates of deposit, secondary market 7
11
1-month
U
3-month
13
6-month
14 Eurodollar deposits,, 3-month 8
U.S. Treasury bills
Secondary market 9
15
3-month
16
6-month
17
1-year
Auction average
18
3-month
19
6-month
20
1-year
10.22
8.80
8.10
7.69
6.80
6.33
6.58
5.50
6.73
5.50
7.22
5.95
7.29
6.00
7.56
6.00
7.43
6.00
7.59
6.00
7.37
6.00
7.03
6.00
10.05
10.10
10.16
7.94
7.95
8.01
6.62
6.49
6.39
6.57
6.65
6.72
6.62
6.71
6.81
7.26
7.37
7.55
7.38
7.89
7.96
7.45
7.64
7.82
7.52
8.02
8.13
7.86
8.55
8.64
7.26
7.82
7.90
6.95
7.33
7.35
9.97
9.73
9.65
7.91
7.77
7.75
6.58
6.38
6.31
6.53
6.48
6.35
6.56
6.49
6.34
7.20
7.08
6.90
7.28
7.40
7.17
7.41
7.30
7.12
7.48
7.45
7.25
7.83
8.04
7.63
7.05
7.25
7.14
6.83
7.03
6.80
10.14
10.19
7.92
7.96
6.39
6.29
6.59
6.65
6.64
6.75
7.31
7.48
7.85
7.92
7.63
7.81
8.04
8.17
8.59
8.66
7.73
7.79
7.25
7.24
10.17
10.37
10.68
10.73
7.97
8.05
8.25
8.28
6.61
6.52
6.51
6.71
6.60
6.70
6.87
6.87
6.63
6.75
7.02
6.91
7.25
7.37
7.74
7.51
7.39
8.02
8.19
8.29
7.46
7.80
8.11
7.79
7.53
8.19
8.41
8.24
7.81
8.73
8.95
8.69
7.32
7.90
8.05
8.81
6.96
7.42
7.50
7.73
9.52
9.76
9.92
7.48
7.65
7.81
5.98
6.03
6.08
5.69
5.76
6.24
6.04
6.15
6.54
6.40
6.64
7.11
6.13
6.69
7.05
6.62
6.86
7.30
6.65
7.08
7.50
6.98
7.52
7.70
5.70
6.33
6.72
5.17
5.93
6.30
9.57
9.80
9.94
7.49
7.66
7.81
5.97
6.02
6.07
5.78
5.86
6.22
6.00
6.14
6.52
6.32
6.57
6.74
6.40
6.86
6.89
6.59
6.83
7.32
6.49
6.96
n.a.
6.96
7.34
n.a.
6.84
7.21
n.a.
5.12
5.98
6.45
10.89
11.65
11.89
12.24
12.40
12.44
12.48
12.39
8.43
9.27
9.64
10.13
10.51
10.62
10.97
10.79
6.46
6.87
7.06
7.31
7.55
7.68
7.85
7.80
6.68
7.44
7.74
8.01
8.27
8.45
n.a.
8.64
7.03
7.75
8.03
8.32
8.59
8.76
n.a.
8.97
7.67
8.34
8.67
8.94
9.26
9.42
n.a.
9.59
7.59
8.40
8.75
9.08
9.37
9.52
n.a.
9.61
7.88
8.58
8.89
9.17
9.48
9.61
n.a.
9.75
8.10
8.83
9.10
9.39
9.65
9.78
n.a.
9.84
8.33
9.13
9.43
9.73
9.97
10.11
n.a.
10.13
7.22
8.09
8.54
8.90
9.23
9.36
n.a.
9.49
6.73
7.60
8.01
8.38
8.71
8.90
n.a.
9.05
11.99
10.75
8.14
8.70
8.97
9.58
9.61
9.72
9.82
10.10
9.49
9.07
9.61
10.38
10.10
8.60
9.58
9.11
6.95
7.76
7.32
7.18
8.37
7.72
7.24
8.31
7.81
7.66
8.67
8.26
7.90
8.85
8.70
7.85
8.70
8.53
7.95
8.85
8.66
8.45
9.40
9.17
7.65
8.70
8.72
7.60
8.60
n.a.
13.49
12.71
13.31
13.74
14.19
12.05
11.37
11.82
12.28
12.72
9.71
9.02
9.47
9.95
10.39
9.92
9.42
9.64
10.00
10.61
10.24
9.67
9.86
10.20
10.80
10.64
10.18
10.35
10.72
11.31
10.97
10.52
10.74
10.98
11.62
10.79
10.34
10.48
10.85
11.49
10.91
10.48
10.63
10.91
11.61
11.13
10.73
10.91
11.11
11.78
11.13
10.68
10.95
11.13
11.77
10.75
10.25
10.56
10.84
11.35
13.81
12.06
9.61
10.17
10.37
10.84
11.07
11.08
11.24
11.50
10.75
10.60
11.59
4.64
10.49
4.25
8.76
3.48
8.25
2.83
8.32
2.69
8.64
2.78
8.99
3.25
8.70
2.76
8.76
2.78
8.91
2.92
9.09
3.46
9.18
3.84
CAPITAL MARKET RATES
71
22
2.3
74
25
26
27
28
29
30
31
32
33
34
35
36
37
38
U.S. Treasury notes and bonds 1 1
Constant maturities
1-year
2-year
3-year
5-year
7-year
10-year
20-year
30-year
Composite
Over 10 years (long-term)
State and local notes and bonds
Moody's series 14
Aaa
Baa
Bond Buyer series 15
Corporate bonds
Seasoned issues 1 6
All industries
Aaa
Aa
A
Baa
A-rated, recently-offered utility
bonds 17
MEMO: Dividend/price ratio 18
39
Preferred stocks
Common stocks
40
1. Weekly and monthly figures are averages of all calendar days, where the
rate for a weekend or holiday is taken to be the rate prevailing on the preceding
business day. The daily rate is the average of the rates on a given day weighted by
the volume of transactions at these rates.
2. Weekly figures are averages for statement week ending Wednesday.
3. Rate for the Federal Reserve Bank of N e w York.
4. Unweighted average of offering rates quoted by at least five dealers (in the
case of commercial paper), or finance companies (in the case of finance paper).
Before November 1979, maturities for data shown are 30-59 days, 90-119 days,
and 120-179 days for commercial paper; and 30-59 days, 90-119 days, and
150-179 days for finance paper.
5. Yields are quoted on a bank-discount basis, rather than in an investment
yield basis (which would give a higher figure).
6. Dealer closing offered rates for top-rated banks. Most representative rate
(which may be, but need not be, the average of the rates quoted by the dealers).
7. Unweighted average of offered rates quoted by at least five dealers early in
the day.
8. Calendar week average. For indication purposes only.
9. Unweighted average of closing bid rates quoted by at least five dealers.
10. Rates are recorded in the week in which bills are issued. Beginning with the
Treasury bill auction held on Apr. 18, 1983, bidders were required to state the
percentage yield (on a bank discount basis) that they would accept to two decimal
places. Thus, average issuing rates in bill auctions will be reported using two
rather than three decimal places.
11. Yields are based on closing bid prices quoted by at least five dealers.
12. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields
are read from a yield curve at fixed maturities. Based on only recently issued,
actively traded securities.
13. Averages (to maturity or call) for all outstanding bonds neither due nor
callable in less than 10 years, including one very low yielding "flower" bond.
14. General obligations based on Thursday figures; Moody's Investors Service.
15. General obligations only, with 20 years to maturity, issued by 20 state and
local governmental units of mixed quality. Based on figures for Thursday.
16. Daily figures from Moody's Investors Service. Based on yields to maturity
on selected long-term bonds.
17. Compilation of the Federal Reserve. This series is an estimate of the yield
on recently-offered, A-rated utility bonds with a 30-year maturity and 5 years of
call protection. Weekly data are based on Friday quotations.
18. Standard and Poor's corporate series. Preferred stock ratio based on a
sample o f t e n issues: four public utilities, four industrials, one financial, and one
transportation. Common stock ratios on the 500 stocks in the price index.
NOTE. These data also appear in the Board's H.15 (519) and G.13 (415) releases.
For address, see inside front cover.
Financial Markets
1.36 STOCK MARKET
A25
Selected Statistics
1987
Indicator
1984
1985
1986
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Prices and trading (averages of daily figures)
Common stock prices
1 N e w York Stock Exchange
(Dec. 31, 1965 = 50)
2
Industrial
3
Transportation
4
Utility
5
Finance
6 Standard & Poor's Corporation (1941-43
= 10) 1
92.46
108.01
85.63
46.44
89.28
108.09
123.79
104.11
56.75
114.21
136.00
155.85
119.87
71.36
147.19
160.23
189.17
135.49
78.19
158.41
166.43
198.95
138.55
77.15
162.41
163.88
199.03
137.91
72.74
150.52
163.00
198.78
141.30
71.64
145.97
169.58
206.61
150.39
74.25
152.73
174.28
214.12
157.49
74.18
152.27
184.18
226.49
164.02
78.20
160.94
178.39
219.52
158.58
76.13
154.08
157.13
189.86
140.95
73.27
137.35
160.50
186.84
236.34
280.93
292.47
289.32
289.12
301.36
310.09
329.36
318.66
280.16
7 American Stock Exchange 2
(Aug. 31, 1973 = 50)
207.96
229.10
264.38
315.60
332.55
330.65
328.77
334.49
348.68
361.52
353.72
306.34
91,084
6,107
109,191
8,355
141,385
11,846
183,478
14,962
180,251
15,678
187,135
14,420
170,898
11,655
163,380
12,813
180,356
12,857
193,477
13,604
177,319
12,381
277,026
18,173
Volume of trading (thousands
8 N e w York Stock Exchange
9 American Stock Exchange
of
shares)
Customer financing (end-of-period balances, in millions of dollars)
10 Margin credit at broker-dealers 3
Free credit balances
11 Margin-account
12 Cash-account
at
22,470
28,390
36,840
35,740
38,080
39,820
38,890
38,420
40,250
41,640
44,170
38,250
1,755
10,215
2,715
12,840
4,880
19,000
4,470
17,325
4,730
17,370
4,660
17,285
4,355
16,985
3,680
15,405
4,095
15,930
4,240
16,195
4,270
15,895
8,415
18,455
brokers4
Margin requirements (percent of market value and effective date) 6
13 Margin stocks
14 Convertible bonds
15 Short sales
Mar. 11, 1968
June 5, 1968
May 6, 1970
Dec. 6, 1971
Nov. 24, 1972
Jan. 3, 1974
70
50
70
80
60
0
65
50
65
55
50
55
65
50
65
50
50
50
1. Effective July 1976, includes a new financial group, banks and insurance
companies. With this change the index includes 400 industrial stocks (formerly
425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40
financial.
2. Beginning July 5, 1983, the American Stock Exchange rebased its index
effectively cutting previous readings in half.
3. Beginning July 1983, under the revised Regulation T, margin credit at
broker-dealers includes credit extended against stocks, convertible bonds, stocks
acquired through exercise of subscription rights, corporate bonds, and government securities. Separate reporting of data for margin stocks, convertible bonds,
and subscription issues was discontinued in April 1984.
4. Free credit balances are in accounts with no unfulfilled commitments to the
brokers and are subject to withdrawal by customers on demand.
5. N e w series beginning June 1984.
6. These regulations, adopted by the Board of Governors pursuant to the
Securities Exchange Act of 1934, limit the amount of credit to purchase and carry
"margin securities" (as defined in the regulations) when such credit is
collateralized by securities. Margin requirements on securities other than options
are the difference between the market value (100 percent) and the maximum loan
value of collateral as prescribed by the Board. Regulation T was adopted effective
Oct. 15, 1934; Regulation U , effective May 1, 1936; Regulation G, effective Mar.
11,1968; and Regulation X, effective Nov. 1, 1971.
On Jan. 1, 1977, the Board of Governors for the first time established in
Regulation T the initial margin required for writing options on securities, setting
it at 30 percent of the current market-value of the stock underlying the option. On
Sept. 30,1985, the Board changed the required initial margin, allowing it to be the
same as the option maintenance margin required by the appropriate exchange or
self-regulatory organization; such maintenance margin rules must be approved by
the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC
approved new maintenance margin rules, permitting margins to be the price of the
option plus 15 percent of the market value of the stock underlying the option.
A26
DomesticNonfinancialStatistics • January 1988
1.37 SELECTED FINANCIAL INSTITUTIONS
Selected Assets and Liabilities
Millions of dollars, end of period
1987
1986
Account
1984
1985
Oct.
Nov.
Dec.
Jan.
Mar.
Feb.
Apr.
May
June
July
Aug.
Savings and loan associations
1 Assets
903,488
948,781
961,894
964,096
963,316
935,516
936,877
939,722' 944,291' 952,729' 949,058' 949,239'
955,254
123,257
142,700
251,769
129,340
132,733
261,869
128,856
135,884
263,782
129,279' 134,743'
138,727' 136,37c
266,407' 274,834'
141,030' 140,448' 140,711'
138,293 138,040' 138,447'
283,680' 285,395' 287,465'
143,881
137,280
292,682
2 Mortgage-backed securities . .
Cash and investment securities
4 Other
124,801
223,396
97,303
126,712
238,833
121,606
138,213
250,781
122,682
141,510
250,297
5 Liabilities and net worth
903,488
948,781
961,894
964,096
963,316
935,516
936,877
939,722' 944,291' 952,729' 949,058' 949,239'
955,254
721,759
153,373
75,552
77,821
19,773
722,276
152,173
75,671
76,502
21,823
722,601 716,830
158,175 165,881
76,469
77,857
81,706
88,024
18,958'
20,87C
717,298
178,553
79,546
98,966
21,848
40,606
40,601
6 Savings capital
7 Borrowed money
8
FHLBB
9
Other
10 Other
11 Net worth 2
725,045
125,666
64,207
61,459
17,944
750,071
138,798
73,888
64,910
19,045
742,747
152,567
75,295
77,272
23,255
740,066
156,920
75,626
81,294
24,078
741,081
159,742
80,194
79,548
20,071
34,833
41,064
43,326
43,034
42,423
40,040'
40,741'
718,662 715,659 761,391
171,277 175,073 174,153
78,583
79,188'
80,111'
92,694
95,99C
95,295'
22,631'
19,582'
20,68C
40.19C
38,635'
37,985'
37,534
FSLIC-insured federal savings banks
12 Assets
98,559
131,868
202,106
204,918
210,562
235,428
235,763
241,418' 246,277
253,007
264,099' 268,808'
272,081
13 Mortgages
14 Mortgage-backed securities
15 Other
57,429
9,949
10,971
72,355
15,676
11,723
110,826
27,516
18,697
112,117
28,324
19,266
113,638
29,766
19,034
136,770
33,570
15,769
136,489
34,634
16,060
138,882'
36,088'
16,605'
144,581'
39,371'
17,200
150,420' 152,880'
40,992' 42,712'
17,936'
17,557'
154,053
43,531
17,790
16 Liabilities and net worth
98,559
131,868
202,106
204,918
210,562
235,428
235,763
241,418' 246,277
253,007
264,099' 268,808'
272,081
17
18
19
20
71
22
79,572
12,798
7,515
5,283
1,903
4,286
103,462
19,323
10,510
8,813
2,732
6,351
152,834
33,430
17,382
16,048
5,330
10,511
154,447
33,937
17,863
16,074
5,652
10,883
157,872
37,329
19,897
17,432
4,263
11,098
176,741
40,614
20,730
19,884
5,304
12,774
178,676
39,777
20,226
19,551
5,480
13,151
178,672' 180,637
43,915
46,125
21,104
21,718
22,815'
24,407
5,265
5,547
13,564
13,978
182,802
49,896
22,788
27,108
6,044
14,272
189,998
53,214
24,486
28,753
5,983
14,884
193,890
53,700
24,981
28,654'
6,143
15,146'
194,853
55,641
25,546
30,095
6,455
15,135
Savings capital
Borrowed money
FHLBB
Other
Other
Net worth
140,854'
37.50C
17,034'
Savings banks
23 Assets
203,898
216,776
230,919
232,577
236,866
235,603
238,074
240,739
243,454
245,906
244,760
246,833
249,888
102,895
24,954
110,448
30,876
116,648
36,130
117,612
36,149
118,323
35,167
119,199
36,122
119,737
37,207
121,178
38,012
122,769
37,136
124,936
37,313
128,217
35,200
129,624
35,591
130,721
36,793
14,643
19,215
2,077
23,747
4,954
11,413
13,111
19,481
2,323
21,199
6,225
13,113
12,585
23,437
2,347
21,156
5,195
13,421
13,037
24,051
2,290
20,749
5,052
13,637
14,209
25,836
2,185
20,459
6,894
13,793
13,332
26,220
2,180
19,795
5,239
13,516
13,525
26,893
2,168
19,770
5,143
13,631
13,631
27,463
2,041
19,598
5,703
13,713
13,743
28,700
2,063
19,768
5,308
13,967
13,650
28,739
2,053
19,956
5,176
14,083
13,549
27,785
2,059
18,803
4,939
14,208
13,498
28,252
2,050
18,821
4,806
14,191
13,720
28,913
2,038
18,573
4,823
14,307
32 Liabilities
203,898
216,776
230,919
232,577
236,866
235,603
238,074
240,739
243,454
245,906
244,760
246,833
249,888
33 Deposits
34
Regular 3
35
Ordinary savings
Time
36
37
Other
38 Other liabilities
39 General reserve accounts
180,616
177,418
33,739
104,732
3,198
12,504
10,510
185,972
181,921
33,018
103,311
4,051
17,414
12,823
190,334
185,254
36,165
101,125
5,080
23,319
16,896
190,858
185,958
36,739
101,240
4,900
24,254
17,146
192,194
186,345
37,717
100,809
5,849
25,274
18,105
191,441
186,385
38,467
100,604
5,056
24,710
18,236
192,559
187,597
39,370
100,922
4,962
25,663
18,486
193,693
188,432
40,558
100,896
5,261
27,003
18,830
193,347
187,791
41,326
100,308
5,556
29,105
19,423
194,742
189,048
41,967
100,607
5,694
30,436
19,603
193,274
187,669
42,178
100,604
5,605
30,515
19,549
194,549
188,783
41,928
102,603
5,766
31,655
19,718
195,895
190,335
41,767
105,133
5,560
32,467
20,471
24
25
26
27
28
29
30
31
Loans
Mortgage
Other
Securities
U.S. government
Mortgage-backed securities . .
State and local government . .
Corporate and other
Cash
Other assets
Financial Markets
All
1.37—Continued
1986
Account
1984
1987
1985
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Credit unions 4
40 Total assets/liabilities and capital
93,036
118,010
143,662
145,653
147,726
149,383
149,751
153,253
154,549
156,086
160,644
41
42
63,205
29,831
77,861
40,149
93,257
50,405
94,638
51,015
95,483
52,243
96,801
52,586
96,753
52,998
98,799
54,454
99,751
54,798
100,153
55,933
104,150
56,494
62,561
42,337
20,224
84,348
57,539
26,809
73,513
47,933
25,580
105,963
70.926
35,037
83,388
53,434
29,954
130,483
86,158
44,325
84,635
53,877
30,758
131,778
87,009
44,769
86,137
55,304
30,833
134,327
87,954
46,373
85,984
55,313
30,671
135,907
89,717
46,130
85,651
54,912
30,739
136,441
89,485
46,956
86,101
55,118
30,983
138,810
91,042
47,768
87,089
55,740
31,349
140,014
92,012
48,002
87,765
55,952
31,813
141,635
97,189
49,248
90,912
58,432'
32,480
148,283
96,137
52,146
Federal
State
43 Loans outstanding
44
Federal
45
State
46 Savings
47
Federal
48
State
Life insurance companies
49 Assets
50
51
52
53
54
55
56
57
58
59
60
Securities
Government
United States 5
State and local
Foreign 6
Business
Bonds
Stocks
Mortgages
Real estate
Policy loans
Other assets
722,979
825,901
914,223' 925,475'
937,551
948,665
961,937
978,455
978,455
985,942
995,576
1,005,592
63,899
42,204
8,713
12,982
359,333
295,998
63,335
156,699
25,767
54,505
63,776
75,230
51,700
9,708
13,822
423,712
346,216
77,496
171,797
28,822
54,369
71,971
81,344'
83,736'
55,402'
57,533'
11,776'
11,988'
14,166'
14,215'
482,040' 490,091'
393,286' 399,986'
88,754'
90,105'
187,775' 190,243'
31,464'
31,759'
54,249'
54,222'
77,351'
75,424'
84,640
59,033
11,659
13,948
492,807
401,943
90,864
193,842
31,615
54,055
80,592
84,923
59,596
11,245
14,082
504,582
408,788
95,794
194,213
31,718
53,832
79,397
88,003
62,724
11,315
13,964
514,328
415,004
99,324
194,935
32,003
53,806
78,842
90,337
65,661
10,860
13,816
519,766
417,933
101,833
195,743
31,834
53,652
82,105
89,711
64,621
11,068
14,022
522,097
420,474
101,623
197,315
32,011
53,572
83,749
89,554
64,201
11,208
14,145
528,789
425,788
103,001
198,760
32,149
53,468
83,222
87,279
61,405
11,485
14,389
537,507
432,095
105,412
200,382
32,357
53,378
84,390
88,199
62,461
11,277
14,461
555,423
448,146
107,277
201,297
32,699
53,338
85,420
1. Holdings of stock of the Federal Home Loan Banks are in "other assets."
2. Includes net undistributed income accrued by most associations.
3. Excludes checking, club, and school accounts.
4. Data include all federally insured credit unions, both federal and state
chartered, serving natural persons.
5. Direct and guaranteed obligations. Excludes federal agency issues not
guaranteed, which are shown in the table under "Business" securities.
6. Issues of foreign governments and their subdivisions and bonds of the
International Bank for Reconstruction and Development.
NOTE: Savings and loan associations:
Estimates by the F H L B B for all
associations in the United States based on annual benchmarks for non-FSLICinsured associations and the experience of FSLIC-insured associations.
FSLIC-insured federal savings banks: Estimates by the F H L B B for federal
savings banks insured by the FSLIC and based on monthly reports of federally
insured institutions.
n a.
Savings banks: Estimates by the National Council of Savings Institutions for all
savings banks in the United States and for FDIC-insured savings banks that have
converted to federal savings banks.
Credit unions: Estimates by the National Credit Union Administration for
federally chartered and federally insured state-chartered credit unions serving
natural persons.
Life insurance companies: Estimates of the American Council of Life Insurance
for all life insurance companies in the United States. Annual figures are annualstatement asset values, with bonds carried on an amortized basis and stocks at
year-end market value. Adjustments for interest due and accrued and for
differences between market and book values are not made on each item separately
but are included, in total, in "other assets."
A28
DomesticNonfinancialStatistics • January 1988
1.38 FEDERAL FISCAL AND FINANCING OPERATIONS
Millions of dollars
Calendar year
Type of account or operation
U.S. budget1
1 Receipts, total
2
On-budget
3
Off-budget
4 Outlays, total
5
On-budget
6
Off-budget
7 Surplus, or deficit ( - ) , total
8
On-budget
9
Off-budget
10
11
12
Source of financing (total)
Borrowing from the public
Operating cash (decrease, or increase
Other
2
Fiscal
year
1985
734,057
547,886
186,171
946,316
769,509
176,807
-212,260
-221,623
9,363
Fiscal
year
1986
769,091
568,862
200,228
990,231 r
806,733'
183,498
-221,140'
-237,871'
16,731'
Fiscal
year
1987
854,143
640,741
213,402
1,002,147
808,315
193,832
-148,005
-167,575
19,570
1987
May
June
July
Aug.
47,691
30,205
17,486
83,435
66,389
17,046
-35,744
-36,184
440
82,945
64,222
18,723
83,366
66,221
17,145
-420
-1,998
1,578
64,223
47,880
16,343
86,491
70,806
15,685
-22,268
-22,926
658
60,213
43,511
16,703
81,940
65,071
16,869
-21,727
-21,561
-166
Sept.
92,410
73,755
18,656
77,140
60,497
16,643
15,270
13,257
2,013
Oct.
62,354
45,992
16,362
93,095
76,910
16,185
-30,741
-30,918
176
197,269
236,187
150,070
9,655
-3,103
33,060
-8,060
27,282
13,367
1,630
-14,324
-723
-5,052
2,986
22,638
-1,478
-6,966
-2,801
20,655
4,716
-3,219
-8,115
-13,800
6,590
-1,879
5,338
17,060
4,174
12,886
31,384
7,514
23,870
36,436
9,120
27,316
33,106
6,383
26,723
40,072
13,774
26,298
19,417
5,365
14,052
22,635
3,764
18,872
36,436
9,120
27,316
38,315
8,898
29,416
MEMO
13 Treasury operating balance (level, end of
period)
Federal Reserve Banks
Tax and loan accounts
14
15
1. In accordance with the Balanced Budget and Emergency Deficit Control Act
of 1985, all former off-budget entries are now presented on-budget. The Federal
Financing Bank (FFB) activities are now shown as separate accounts under the
agencies that use the FFB to finance their programs. The act has also moved two
social security trust funds (Federal old-age survivors insurance and Federal
disability insurance trust funds) off-budget.
2. Includes SDRs; reserve position on the U.S. quota in the IMF; loans to
international monetary fund; other cash and monetary assets; accrued interest
payable to the public; allocations of special drawing rights; deposit funds;
miscellaneous liability '(including checks outstanding) and asset accounts;
seigniorage; increment on gold; net gain/loss for U.S. currency valuation adjustment; net gain/loss for IMF valuation adjustment; and profit on the sale of gold.
Reflecting the change in Monthly Treasury Statement classification, Table 2,
monthly data as well as fiscal year data now include monetary assets other than
operating cash with "other", sources of financing, (line 12).
SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S.
Government" and the Budget of the U.S.
Government.
Federal Finance
A29
1.39 U.S. BUDGET RECEIPTS AND OUTLAYS
Millions of dollars
Calendar year
Source or type
Fiscal
year
1986
Fiscal
year
1987
1986
1985
1987
1987
H2
HI
H2
HI
Aug.
Sept.
Oct.
RECEIPTS
1
AH sources
2 Individual income taxes, net
3
Withheld
4
Presidential Election Campaign Fund
5
N o n withheld
6
Refunds
Corporation income taxes
7
Gross receipts
8
Refunds
9 Social insurance taxes and contributions,
net
Employment taxes and
10
contributions
11
Self-employment taxes and
contributions
12
Unemployment insurance
13
Other net receipts
769,091
854,143
364,790
394,345
387,524
447,282
60,213
92,410
62,354
348,959
314,803
36
105,994
71,873
392,557
322,463
33
142,957
72,896
169,987
155,725
6
22,295
8,038
169,444
153,919
31
78,981
63,488
183,156
164,071
4
27,733
8,652
205,157
156,760
30
112,421
64,052
26,884
25,008
1
3,108
1,233
39,797
24,569
0
17,127
1,899
32,429
30,122
1
3,563
1,256
80,442
17,298
102,859
18,933
36,528
7,751
41,946
9,557
42,108
8,230
52,396
10,881
2,549
983
21,636
1,129
3,633
1,778
283,901
303,318
128,017
156,714
134,006
163,519
25,712
25,403
22,177
255,062
273,185
116,276
139,706
122,246
146,696
21,447
23,788
20,797
11,840
24,098
4,742
13,987
25,418
4,715
985
9,281
2,458
10,581
14,674
2,333
1,338
9,328
2,429
12,020
14,514
2,310
0
3,912
354
1,590
1,246
368
0
950
430
32,919
13,327
6,958
19,884
32,510
15,032
7,493
19,307
18,470
6,354
3,323
9,861
15,944
6,369
3,487
10,002
15,947
7,282
3,649
9,605
15,845
7,129
3,818
10,299
2,698
1,370
587
1,396
2,808
1,278
587
2,032
2,574
1,317
608
1,392
18 All types
990,231
1,002,147
487,201 r
486,058 r
505,448 r
502,983'
81,940
77,140
93,095
19
20
21
22
73
24
National defense
International affairs
General science, space, and technology . . . .
Energy
Natural resources and environment
Agriculture
273,375
14,152
8,976
4,735
13,639
31,449
282,016
11,761
9,188
4,176
13,225
26,493
134,675
8,367
4,727
3,305
7,553
15,412
135,367
5,384
12,519
2,484
6,245
14,482
138,544
8,876
4,594
2,735
7,141
16,160
142,886'
4,374'
4,324
2,335
6,175'
11,824
24,387
146
823
341
1,075
1,336
22,132
1,712
860
-197
1,157
1,383
25,928
1,004
1,118
499
1,336
5,177
25
76
27
28
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, social
services
4,823
28,117
7,233
5,235
26,228
5,334
644
15,360
3,901
860
12,658
3,169
3,647
14,745
3,494
4,893
12,113
3,108
355
2,405
464
-547
2,505
-602
1,625
2,306
742
2,757
2,178
2,455
3,419
22,929'
8,788
3,332
23,425'
9,880
3,613
26,320
10,241
14
15
16
17
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts
OUTLAYS
79 Health
30 Social security and medicare
31 Income security
32
33
.34
35
36
37
Veterans benefits and services
Administration of justice
General government
General-purpose fiscal assistance
Net interest
Undistributed offsetting receipts 6
30,585
28,721
14,481
14,712
15,287'
14,182
35,935
268,921
119,796
39,968
282,473
123,499
17,237
129,037
59,457
17,872
135,214
60,786
18,795'
138,299 r
60,628'
20,318
142,864
62,248
26,356
6,603
6,104
6,431
136,008
-33,007
26,801
7,507
6,005
1,621
138,519
-36,622
14,527
3,212
3,634
3,391
67,448
-17,953
12,193
3,352
3,566
2,179
68,054
-17,193
14,447'
3,360
2,786
2,886'
65,816'
- 17,376'
12,264
3,626
3,344'
337'
70,110
-18,104'
1. Old-age, disability, and hospital insurance, and railroad retirement accounts.
2. Old-age. disability, and hospital insurance.
3. Federal employee retirement contributions and civil service retirement and
disability fund.
4. Deposits of earnings by Federal Reserve Banks and other miscellaneous
receipts.
1,121
634
598
62
13,064
-2,764
2,168
766
379
428
10,284
-4,106
3,645
674
-231
241
11,431
-2,688
5, Net interest function includes interest received by trust funds.
6. Consists of rents and royalties on the outer continental shelf and U.S.
government contributions for employee retirement.
SOURCES. U.S. Department of the Treasury, "Monthly Treasury Statement of
Receipts and Outlays of the U . S . Government," and the U . S . Office of Management and Budget, Budget of the U.S. Government, Fiscal Year 1988.
A30
Domestic Financial Statistics • January 1988
1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars
1986
1985
1987
Item
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
D e c . 31
Mar. 31
June 30
1,779.0
1,827.5
1,950.3
1,991.1
2,063.6
2,129.5
2,218.9
2,250.7
2,313.1
1,774.6
1,460.5
314.2
1,823.1
1,506.6
316.5
1,945.9
1,597.1
348.9
1,986.8
1,634.3
352.6
2,059.3
1,684.9
374.4
2,125.3
1,742.4
382.9
2,214.8
1,811.7
403.1
2,246.7
1,839.3
407.5
2,309.3
1,871.1
438.1
4.4
3.3
1.1
4.4
3.3
1.1
4.4
3.3
1.1
4.3
3.2
1.1
4.3
3.2
1.1
4.2
3.2
1.1
4.0
3.0
1.1
4.0
2.9
1.1
1,775.3
1,823.8
1,932.4
1,973.3
2,060.0
2,111.0
2,200.5
2,232.4
2,295.0
9 Public debt securities
10 Other debt 1
1,774.0
1.3
1,822.5
1.3
1,931.1
1.3
1,972.0
1.3
2,058.7
1.3
2,109.7
1.3
2,199.3
1.3
2,231.1
1.3
2,293.7
1.3
11 MEMO: Statutory debt limit
1,823.8
1,823.8
2,078.7
2,078.7
2,078.7
2,111.0
2,300.0
2,300.0
2,320.0
1 Federal debt outstanding
2 Public debt securities
3
Held by public
4
Held by agencies
5 A g e n c y securities
6
Held by public
7
Held by agencies
8 Debt subject to statutory limit
1. Includes guaranteed debt of Treasury and other federal agencies, specified
participation certificates, notes to international lending organizations, and District
of Columbia stadium bonds.
1.41 GROSS PUBLIC DEBT OF U.S. TREASURY
SOURCES. Treasury
United
States.
Bulletin
and Monthly
Statement
3.8
2.8 r
1.0 R
of the Public Debt
of the
Types and Ownership
Billions of dollars, end of period
1986
T y p e and holder
1 Total gross public debt
2
3
4
5
6
7
8
9
10
11
12
13
By type
Interest-bearing debt
Marketable
Bills
Notes
Bonds
Nonmarketable 1
State and local government series
Foreign issues
Government
Public
Savings bonds and n o t e s .
Government account series
14 Non-interest-bearing debt
1983
1984
1987
1985
Q3
Q4
Q1
Q2
1,410.7
1,663.0
1,945.9
2,214.8
2,125.3
2,214.8
2,246.7
2,309.3
1,400.9
1,050.9
343.8
573.4
133.7
350.0
36.7
10.4
10.4
.0
70.7
231.9
1,660.6
1,247.4
374.4
705.1
167.9
413.2
44.4
9.1
9.1
2,212.0
1,619.0
426.7
927.5
249.8
593.1
110.5
4.7
4.7
.0
90.6
386.9
2,122.7
1,564.3
410.7
896.9
241.7
558.4
102.4
4.1
4.1
.0
85.6
365.9
2,212.0
73.1
286.2
1,943.4
1,437.7
399.9
812.5
211.1
505.7
87.5
7.5
7.5
.0
78.1
332.2
426.7
927.5
249.8
593.1
110.5
4.7
4.7
.0
90.6
386.9
2,244.0
1,635.7
406.2
955.3
259.3
608.3
118.5
4.9
4.9
.0
93.0
391.4
2,306.7
1,659.0
391.0
984.4
268.6
647.7
125.4
5.1
5.1
.0
95.2
421.6
9.8
2.3
2.5
2.8
2.6
2.8
2.7
2.6
236.3
151.9
1,022.6
188.8
22.8
56.7
39.7
155.1
289.6
160.9
1,212.5
183.4
25.9
76.4
50.1
179.4
348.9
181.3
1,417.2
192.2
25.1
95.8
59.0
n.a.
403.1
211.3
1,602.0
232.1
28.6
106.9
68.8
382.9
190.8
1,553.3
212.5
24.9
100.9
65.7
403.1
211.3
1,602.0
232.1
28.6
106.9
68.8
n.a.
407.5
n.a.
1,641.4
232.0
18.8
n.a.
72.1
n.a.
438.1
212.3
1,657.7
237.1
20.6
n.a.
n.a.
n.a.
71.5
61.9
166.3
259.8
74.5
69.3
192.9
360.6
79.8
75.0
212.5
n.a.
92.3
65.6
251.5
87.1
68.7
253.2
n.a.
92.3
65.6
251.5
n.a.
94.7
63.3
260.4
n.a.
96.8
63.4
269.9
.0
1,619.0
4
By holder
15 U . S . government agencies and trust funds
16 Federal Reserve Banks
17 Private investors
18
Commercial banks
19
M o n e y market funds
20
Insurance c o m p a n i e s
21
Other companies
22
State and local Treasurys
Individuals
23
Savings bonds
24
Other securities
25
Foreign and international
26
Other miscellaneous investors
1. Includes (not s h o w n separately): Securities issued to the Rural Electrification Administration; depository bonds, retirement plan bonds, and individual
retirement bonds.
2. Nonmarketable dollar-denominated and foreign currency-denominated series held by foreigners.
3. Held almost entirely by U . S . Treasury agencies and trust funds.
4. Data for Federal R e s e r v e Banks and U . S . Treasury agencies and trust funds
are actual holdings; data for other groups are Treasury estimates.
5. Consists of investments of foreign and international accounts. E x c l u d e s
non-interest-bearing notes issued to the International Monetary Fund.
6. Includes savings and loan associations, nonprofit institutions, credit unions,
mutual savings banks, corporate pension trust funds, dealers and brokers, certain
U . S . Treasury deposit accounts, and federally-sponsored agencies.
SOURCES. Data by type of security, U . S . Treasury Department,
Monthly
Statement
of the Public Debt of the United States; data by holder.
Treasury
Bulletin.
Federal Finance
A31
Transaction1
1.42 U.S. GOVERNMENT SECURITIES DEALERS
Par value; averages of daily figures, in millions of dollars
1987
1987
1984
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Immediate delivery
U.S. Treasury securities
By maturity
Bills
Other within 1 year
1-5 years
5 - 1 0 years
Over 10 years
By type of customer
U . S . government securities
dealers
U . S . government securities
brokers
All others 3
Federal agency securities —
Certificates of deposit
Bankers acceptances
Commercial paper
Futures contracts
Treasury bills
Treasury coupons
Federal agency securities —
Forward transactions
U . S . Treasury securities
Federal agency securities —
1985
1986
Aug.
Sept.'
Oct.
Sept. 23
Sept. 3C
Oct. 7
Oct. 14
Oct. 21
Oct. 28
52,778
75,331
95,447
104,958'
108,185
138,937
88,093'
109,455
113,184
114,587
172,975
155,441
26,035
1,305
11,733
7,606
6,099
32,900
1,811
18,361
12,703
9,556
34,249
2,115
24,667
20,455
13,961
35,761
2,937
28,363
20,400'
17,497
35,683
2,992
27,377
25,973
16,160
41,000
4,405
41,107
34,061
18,365
25,521
2,809
20,543'
23,663
15,559
38,150
3,660
31,013
22,720
13,912
33,760
3,439
31,329
29,536
15,120
33,508
3,219
33,932
29,127
14,802
51,411
4,680
50,106
42,385
24,393
45,443
5,378
48,013
36,646
19,961
2,919
3,336
3,646
3,074
2,478
2,688
1,905
3,233
2,784
2,502
2,765
2,581
81,144
54,085
18,586
4,927
3,362
19,394
53,427
32,761'
15,312'
2,833
2,426
15,711
62,887
43,334
13,229
3,163
2,773
16,725
67,820
42,579
15,839
4,841
3,565
20,359
69,745
42,339
15,095
4,879
3,066
17,441
101,567
68,642
21,460
4,922
3,466
20,631
90,832
62,029
20,205
5,142
3,320
18,752
25,580
24,278
7,846
4,947
3,243
10,018
36,222
35,773
11,640
4,016
3,242
12,717
49,368
42,218
16,746
4,355
3,272
16,660
57,430'
43,778
16,079
3,475
2,765
15,606
63,814
41,240
15,797
3,234
2,799
16,155
6,947
4,533
264
5,561
6,085
252
3,311
7,175
16
2,786
8,953'
10
2,748
11,981
1
4,056
11,462
8
1,889
11,651'
0
2,926
9,647
0
1,756
9,413
0
2,575
11,834
0
7,183
13,892
2
4,072
11,876
30
1,364
2,843
1,283
3,857
1,876
7,830
1,697
8,448'
788
8,292
2,653
7,676
503'
8,437
1,369
6,146
2,502
5,877
1,229
8,602
4,475
9,783
2,084
7,054
1. Transactions are market purchases and sales of securities as reported to the
Federal Reserve Bank of N e w York by the U.S. government securities dealers on
its published list of primary dealers.
Averages for transactions are based on the number of trading days in the period.
The figures exclude allotments of, and exchanges for, new U.S. Treasury
securities, redemptions of called or matured securities, purchases or sales of
securities under repurchase agreement, reverse repurchase (resale), or similar
contracts.
2. Data for immediate transactions do not include forward transactions.
3. Includes, among others, all other dealers and brokers in commodities and
securities, nondealer departments of commercial banks, foreign banking agencies,
and the Federal Reserve System.
4. Futures contracts are standardized agreements arranged on an organized
exchange in which parties commit to purchase or sell securities for delivery at a
future date.
5. Forward transactions are agreements arranged in the over-the-counter
market in which securities are purchased (sold) for delivery after 5 business days
from the date of the transaction for Treasury securities (Treasury bills, notes, and
bonds) or after 30 days for mortgage-backed agency issues.
A32
1.43
DomesticNonfinancialStatistics • January 1988
U.S. GOVERNMENT SECURITIES DEALERS
Positions and Financing1
Averages of daily figures, in millions of dollars
1987
Item
1984
1985
1987
1986
Aug.
Sept/
Oct.
Sept. 30
Oct. 7
Oct. 14
Oct. 21
Oct. 28
Positions
Net immediate 2
U.S. Treasury securities
5,429
7,391
13,055
-10,684'
-23,337
-15,435
-28,447'
-20,140
-19,751
-18,222
-7,332
2
3
4
5
6
Bills
Other within 1 year
1-5 years
5 - 1 0 years
Over 10 years
5,500
63
2,159
-1,119
-1,174
10,075
1,050
5,154
-6,202
-2,686
12,723
3,699
9,297
-9,504
-3,161
5,586
461
-6,009
-5,718'
-5,004
2,404
-760
-10,137
-8,100
-6,745
7,257
-620
-4,931
-8,724
-8,418
-423
-825
-10,856'
-9,043'
-7,300
3,915
-796
-8,748
-7,571
-6,941
4,107
-819
-8,695
-7,293
-7,050
7,151
-679
-6,776
- 8,887
-9,030
12,428
-349
965
-10,335
-10,041
7
8
9
10
Federal agency securities
Certificates of deposit
Bankers acceptances
Commercial paper
Futures positions
Treasury bills
Treasury coupons
Federal agency securities
Forward positions
U.S. Treasury securities
Federal agency securities
15,294
7,369
3,874
3,788
22,860
9,192
4,586
5,570
33,066
10,533
5,535
8,087
33,311
7,862
3,444
5,800
33,679
7,968
3,016
6,388
34,002
7,537
2,879
7,426
33,326
7,859
2,799
5,821
32,164
7,618
3,243
6,170
34,849
7,466
2,760
6,154
36,157
7,223
2,282
7,317
34,242
7,714
2,950
9,299
-4,525
1,794
233
-7,322
4,465
-722
-18,062
3,489
-153
-2,013
6,275'
-95
-200
7,295
-96
2,489
8,812
-100
222
6,085'
-96
1,527
7,481
-96
2,319
8,8%
-96
3,825
10,051
-104
2,320
8,815
-105
-1,643
-9,205
-911
-9,420
-2,304
-11,909
-191
-21,797
228
-22,774
24(K
-21,092
933
-22,471
-220
-23,343
-1,580
-23,511
1,079
-22,871
1
11
12
13
14
15
-1,873
-22,436
Financing 3
Reverse repurchase agreements 4
Overnight and continuing
Term
Repurchase agreements
Overnight and continuing
18
19
Term
16
17
44,078
68,357
68,035
80,509
98,954
108,693
128,059
160,684
139,783
164,707
131,194
164,441
144,143
154,291
135,485
161,075
131,605
160,506
133,620
163,829
126,850
171,642
75,717
57,047
101,410
70,076
141,735
102,640
174,219
127,429
182,494
125,741
177,013
123,372
179,279
120,288
178,623
121,016
175,346
117,922
181,217
122,567
175,048
131,033
1. Data for dealer positions and sources of financing are obtained from reports
submitted to the Federal Reserve Bank of N e w York by the U.S. Treasury
securities dealers on its published list of primary dealers.
Data for positions are averages of daily figures, in terms of par value, based on
the number of trading days in the period. Positions are net amounts and are shown
on a commitment basis. Data for financing are in terms of actual amounts
borrowed or lent and are based on Wednesday figures.
2. Immediate positions are net amounts (in terms of par values) of securities
owned by nonbank dealer firms and dealer departments of commercial banks on
a commitment, that is, trade-date basis, including any such securities that have
been sold under agreements to repurchase (RPs). The maturities of some
repurchase agreements are sufficiently long, however, to suggest that the securities involved are not available for trading purposes. Immediate positions include
reverses to maturity, which are securities that were sold after having been
obtained under reverse repurchase agreements that mature on the same day as the
securities. Data for immediate positions do not include forward positions.
3. Figures cover financing involving U.S. Treasury and federal agency securities, negotiable CDs, bankers acceptances, and commercial paper.
4. Includes all reverse repurchase agreements, including those that have been
arranged to make delivery on short sales and those for which the securities
obtained have been used as collateral on borrowings, that is, matched agreements.
5. Includes both repurchase agreements undertaken to finance positions and
"matched book" repurchase agreements.
NOTE. Data on positions for the period May 1 to Sept. 30, 1986, are partially
estimated.
Federal Finance
1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES
A33
Debt Outstanding
Millions of dollars, end of period
1987
1984
Agency
1 Federal and federally sponsored agencies
2 Federal agencies
3
Defense Department 1
4
Export-Import Bank 2,3
5
Federal Housing Administration
6
Government National Mortgage Association participation
certificates
7
Postal Service 6
8
Tennessee Valley Authority
9
United States Railway Association
10 Federally sponsored agencies 7
11
Federal Home Loan Banks
12
Federal Home Loan Mortgage Corporation
13
Federal National Mortgage Association
14
Farm Credit Banks
15
Student Loan Marketing Association 8
1985
1986
Apr.
May
June
July
Aug.
Sept.
271,220
293,905
307,361
306,909
308,547
310,854
313,859
316,940
35,145
142
15,882
133
36,390
71
15,678
115
36,958
33
14,211
138
36,531
23
13,813
165
36,587
21
13,813
168
36,968
20
13,416
169
36,963
18
13,416
175
37,845
16
13,416
174
2,165
1,337
15,435
51
2,165
1,940
16,347
74
2,165
3,104
17,222
85
1,965
3,104
17,376
85
1,965
3,104
17,431
85
1,965
3,718
17,595
85
1,965
3,718
17,586
85
1,965
4,603
17,586
85
237,012
65,085
10,270
83,720
72,192
5,745
257,515
74,447
11,926
93,896
68,851
8,395
270,553
88,752
13,589
93,563
62,478
12,171
270,378
94,606
14,850
89,741
57,251
13,930
271,960
95,931
14,637
90,514
56,648
14,230
273,886
99,680
12,097
91,039
56,648
14,422
276,896
100,976
12,309
91,637
55,715
16,259
279,095
102,422
14,150
91,568
55,408
15,547
104,380
n.a.
92,618
55,276
16,389
145,217
153,373
157,510
157,177
157,331
157,506
157,302
158,117
n. a.
15,852
1,087
5,000
13,710
51
15,670
1,690
5,000
14,622
74
14,205
2,854
4,970
15,797
85
13,807
2,854
4,970
15,996
85
13,807
2,854
4,970
16,051
85
13,410
3,468
4,970
16,215
85
13,410
3,468
4,970
16,206
85
13,410
4,353
4,970
16,206
85
58,971
20,693
29,853
64,234
20,654
31,429
65,374
21,680
32,545
65,254
21,487
32,724
65,304
21,525
32,735
65,199
21,539
32,620
65,049
21,529
32,585
65,069
21,503
32,521
n a.
MEMO
16 Federal Financing Bank debt 9
Lending
17
18
19
20
21
to federal
and federally
sponsored
Export-Import Bank
Postal Service 6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association 6
Other
Lending10
22 Farmers Home Administration
23 Rural Electrification Administration
24 Other
1. Consists of mortgages assumed by the Defense Department between 1957
and 1963 under family housing and homeowners assistance programs.
2. includes participation certificates reclassified as debt beginning Oct. 1,1976.
3. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter.
4. Consists of debentures issued in payment of Federal Housing Administration
insurance claims. Once issued, these securities may be sold privately on the
securities market.
5. Certificates of participation issued before fiscal 1969 by the Government
National Mortgage Association acting as trustee for the Farmers Home Administration; Department of Health, Education, and Welfare; Department of Housing
and Urban Development; Small Business Administration; and the Veterans
Administration.
6. Off-budget.
n.a.
7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. Some data are estimated.
8. Before late 1981, the Association obtained financing through the Federal
Financing Bank (FFB).
9. The FFB, which began operations in 1974, is authorized to purchase or sell
obligations issued, sold, or guaranteed by other federal agencies. Since F F B
incurs debt solely for the purpose of lending to other agencies, its debt is not
included in the main portion of the table in order to avoid double counting.
10. Includes FFB purchases of agency assets and guaranteed loans; the latter
contain loans guaranteed by numerous agencies with the guarantees of any
particular agency being generally small. The Farmers Home Administration item
consists exclusively of agency assets, while the Rural Electrification Administration entry contains both agency assets and guaranteed loans.
A34
DomesticNonfinancialStatistics • January 1988
1.45 NEW SECURITY ISSUES
Millions of dollars
Tax-Exempt State and Local Governments
1987
Type of issue or issuer,
or use
1984
1
1985
1986
Mar.
Apr.
May
June
July
Aug.
Sept.'
Oct.
106,641
214,189
147,011
14,591
6,708
6,037
10,718
6,967
6,500
5,510
5,905
Type of issue
2 Genera] obligation
3 Revenue
26,485
80,156
52,622
161,567
46,346
100,664
3,853
10,738
3,363
3,345
2,872
3,165
3,329
7,389
2,238
4,729
1,975
4,525
1,755
3,755
1,213
4,691
Type of issuer
4 State
5 Special district and statutory authority 2
6 Municipalities, counties, townships
9,129
63,550
33,962
13,004
134,363
78,754
14,474
89,997
42,541
1,217
10,004
3,370
419
4,665
1,624
1,002
3,019
2,017
1,138
6,453
3,127
834
3,951
2,182
398
4,508
1,594
535
3,712
1,263
385
4,502
1,017
7 Issues for new capital, total
94,050
156,050
83,490
4,480
3,117
3,848
7,552
4,478
5,084
4,340
3,981
Use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
7,553
7,552
17,844
29,928
15,415
15,758
16,658
12,070
26,852
63,181
12,892
24,398
16,948
11,666
35,383
17,332
5,594
47,433
659
111
444
991
368
1,907
774
98
571
468
33
1,295
789
194
561
454
161
1,689
1,554
705
1,410
1,082
401
2,399
773
647
835
465
457
1,301
869
226
462
903
1,591
1,033
653
311
603
647
300
1,826
454
137
662
945
532
1,251
1 All issues, new and refunding
8
9
10
11
12
13
1. Par amounts of long-term issues based on date of sale.
2. Includes school districts beginning April 1986.
1.46 NEW SECURITY ISSUES
Millions of dollars
SOURCES. Securities Data Company beginning 1986. Public Securities Association for earlier data. This new data source began with the November BULLETIN.
U.S. Corporations
1987
Type of issue or issuer,
or use
1985
1986
Feb.
Apr.
May
July
Aug/
Sept.
1 All issues
155,741
r
239,015
423,726
27,048
37,953
23,735
19,969
28,445
27,394'
21,869
29,069
2 Bonds 2
133,113'
203,500
355,293
23,281
28,143
19,518
13,431
22,093
22,054'
17,666
23,449
Type of offering
3 Public, domestic
4 Private placement, domestic 3 .
5. Sold abroad
74,175''
36,324
22,613
119,559
46,195
37,781
231,936
80,761
42,596
20,274
n.a.
3,007
23,388
n.a.
4,755
17,634
n.a.
1,884
11,394
n.a.
2,037
20,564
n.a.
1,530
19,028'
n.a.
3,026
14,833'
n.a.
2,833
21,800
n.a.
1,649
Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
32,804
14,792
4,784
10,996
3,400
66,336'
63,973
17,066
6,020
13,649
10,832
91,958
91,548
40,124
9,971
31,426
16,659
165,564
4,253
1,884
176
2,715
410
13,844
7,180
4,261
521
794
710
14,678
2,734
1,683
168
1,370
175
13,389
5,035
754
21
572
138
6,912
4,104
2,061
2,091
205
13,632
5,552
1,037
343
1,654
119
13,350
3,337
1,281
296
1,533
856
10,358
3,506
1,479
25
1,652
930
15,857
12 Stocks 3
22,628
35,515
68,433
3,767
9,810
4,217
6,538
6,352
5,340
4,203'
5,620
Type
13 Preferred
14 Common
15 Private placement 3
4,118
18,510
6,505
29,010
11,514
50,316
6,603
905
2,862
n.a.
2,257
7,553
n.a.
526
3,691
n.a.
1,170
5,368
n.a.
1,202
5,150
n.a.
1,157
4,183
n.a.
906
3,297
n.a.
1,078
4,542
n.a.
4,054
6,277
589
1,624
419
9,665
5,700
9,149
1,544
1,966
978
16,178
15,027
10,617
2,427
4,020
1,825
34,517
814
437
191
509
9
1,807
2,016
2,366
299
907
57
4,165
653
2,203
230
297
18
816
1,066
1,516
3
374
200
3,379
1,438
1,353
492
329
199
2,541
1,046
879
379
472
294
2,270
370
996
948
681
11
522
75
3,383
6
7
8
9
10
11
16
17
18
19
20
21
Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
1. Figures which represent gross proceeds of issues maturing in more than one
year, are principal amount or number of units multiplied by offering price.
Excludes secondary offerings, employee stock plans, investment companies other
than closed-end, intracorporate transactions, equities sold abroad, and Yankee
bonds. Stock data include ownership securities issued by limited partnerships.
0
0
85
277
2,475
2. Monthly data include only public offerings.
3. Data are not available on a monthly basis.
SOURCES. IDD Information Services, Inc., U.S. Securities and Exchange
Commission and the Board of Governors of the Federal Reserve System.
Securities Market and Corporate Finance
1.47 OPEN-END INVESTMENT COMPANIES
A35
Net Sales and Asset Position
Millions of dollars
1987
1985
Item
1986
Feb.
Mar.
Apr.
May
June
July
Aug.'
Sept.
INVESTMENT COMPANIES1
1 Sales of own shares 2
222,670
411,751'
36,307
40,378
42,857
28,295
28,637
27,970
26,455
24,834
2 Redemptions of own shares 3
3 Net sales
132,440
90,230
239,394
172,357'
21,576
14,731
24,730
15,648
37,448
5,409
23,453
4,842
23,693
4,944
22,807
5,763
22,561
3,894
28,323
-3,489
4 Assets 4
251,695
424,156
490,643
506,752
502,487
500,634
516,866
531,022
539,171
521,007
6 Other
20,607
231,088
30,716
393,440
35,279
455,364
37,090
469,662
43,009
459,478
39,158
461,476
41,467
475,099
41,587
489,435
40,802
498,369
42,371
478,636
5. Also includes all U . S . government securities and other short-term debt
securities.
1. Excluding money market funds.
2. Includes reinvestment of investment income dividends. Excludes reinvestment of capital gains distributions and share issue of conversions from one fund
to another in the same group.
3. Excludes share redemption resulting from conversions from one fund to
another in the same group.
4. Market value at end of period, less current liabilities.
NOTE. Investment Company Institute data based on reports of members, which
comprise substantially all open-end investment companies registered with the
Securities and Exchange Commission. Data reflect newly formed companies after
their initial offering of securities.
1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1985
1984
Account
1985
1987
1986
1986
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
2
3
4
5
6
1 Corporate profits with inventory valuation and
capital consumption adjustment
Profits before tax
Profits tax liability
Profits after tax
Dividends
Undistributed profits
266.9
239.9
93.9
146.1
79.0
67.0
277.6
224.8
96.7
128.1
81.3
46.8
284.4
231.9
105.0
126.8
86.8
40.0
277.8
233.5
99.1
134.4
81.7
52.7
288.0
218.9
98.1
120.9
84.3
36.6
282.3
224.4
102.1
122.3
86.6
35.7
286.4
236.3
106.1
130.2
87.7
42.5
281.1
247.9
113.9
134.0
88.6
45.4
294.0
257.0
128.0
129.0
90.3
38.7
296.8
268.7
134.2
134.5
92.4
42.1
313.7
282.1
140.6
141.5
95.2
46.3
7 Inventory valuation
8 Capital consumption adjustment
-5.8
32.8
-.8
53.5
6.5
46.0
-9.8
54.2
17.8
51.3
11.3
46.7
6.0
44.0
-8.9
42.1
-11.3
48.2
-20.0
48.0
-16.1
47.7
SOURCE. Survey of Current Business
(Department of Commerce).
A36
DomesticNonfinancialStatistics • January 1988
Assets and Liabilities1
1.49 NONFINANCIAL CORPORATIONS
Billions of dollars, except for ratio
1985
Account
1980
1981
1982
1983
1986
1984
Ql
Q2
Q3
Q4
Ql
1,328.3
1,419.6
1,437.1
1,565.9
1,703.0
1,722.7
1,734.6
1,763.0
1,784.6
1,795.7
127.0
18.7
507.5
543.0
132.1
135.6
17.7
532.5
584.0
149.7
147.8
23.0
517.4
579.0
169.8
171.8
31.0
583.0
603.4
186.7
173.6
36.2
633.1
656.9
203.2
167.5
35.7
650.3
665.7
203.5
167.1
35.4
654.1
666.7
211.2
176.3
32.6
661.0
675.0
218.0
189.2
33.0
671.5
666.0
224.9
195.3
31.0
663.4
679.6
226.3
7 Current liabilities
890.6
971.3
986.0
1,059.6
1,163.6
1,174.1
1,182.9
1,211.9
1,233.6
1,222.3
8 Notes and accounts payable
9 Other
514.4
376.2
547.1
424.1
550.7
435.3
595.7
463.9
647.8
515.8
636.9
537.1
651.7
531.2
670.4
541.5
682.7
550.9
668.4
553.9
10 Net working capital
437.8
448.3
451.1
516.3
539.5
548.6
551.7
551.1
551.0
573.4
11 MEMO: Current ratio 2
1.492
1.462
1.459
1.487
1.464
1.467
1.466
1.455
1.447
1.469
1 Current assets
2
3
4
5
6
Cash
U . S . government securities
Notes and accounts receivable
Inventories
Other
1. For a description of this series, see "Working Capital of Nonfinancial
Corporations" in the July 1978 BULLETIN, pp. 533-37. Data are not currently
available after 1986:1.
2. Ratio of total current assets to total current liabilities.
SOURCE. Federal Trade Commission and Bureau of the Census,
1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment •
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1986
Industry
1 Total nonfarm business
Manufacturing
2 Durable goods industries
3 Nondurable goods industries
Nonmanufacturing
4 Mining
Transportation
5
Railroad
6
Air
7
Other
Public utilities
8
Electric
9
Gas and other
10 Commercial and other 2
1985
1986
Ql
Q2
Q3
Q4
Ql
Q2
Q3 1
Q4 1
387.13
379.47
389.07
380.04
376.21
375.50
386.09
374.23
377.65
398.04
406.37
73.27
80.21
69.14
73.56
71.23
75.17
68.71
76.39
68.56
73.62
69.42
70.01
69.87
74.20
70.47
70.18
68.76
72.03
73.24
77.23
72.44
81.22
15.88
11.22
10.75
13.13
11.29
10.14
10.31
10.31
11.02
11.06
10.60
7.08
4.79
6.15
6.66
6.26
5.89
6.29
6.70
6.52
6.50
6.53
5.47
6.70
5.87
5.83
7.02
5.78
6.01
6.41
6.84
6.25
5.55
7.46
5.97
5.77
5.72
6.19
6.79
6.62
7.05
7.05
7.02
6.88
36.11
12.71
150.93
33.91
12.47
160.38
31.96
12.56
167.89
34.25
12.92
156.14
33.77
12.66
157.91
33.81
12.00
161.31
33.78
12.34
166.08
30.85
12.75
160.70
31.13
12.35
164.69
32.93
12.66
170.46
32.95
12.49
175.70
• T r a d e and services are no longer being reported separately. They are included
in Commercial and other, line 10.
1. Anticipated by business.
1987
19871
2. "Other" consists of construction; wholesale and retail trade: finance and
insurance; personal and business services; and communication.
SOURCE. Survey of Current Business (Department of Commerce).
Securities
1.51 DOMESTIC FINANCE COMPANIES
Markets
and Corporate
Finance
A37
Assets and Liabilities
Billions of dollars, end of period
1986
Account
1983
1984
1987
1985
Ql
Q2
Q3
Q4
Ql
Q2
Q3
ASSETS
Accounts receivable, gross
1 Consumer
7 Business
Real estate
4
Total
83.3
113.4
20.5
217.3
89.9
137.8
23.8
251.5
113.4
158.3
28.9
300.6
117.2
165.9
29.9
312.9
125.1
167.7
30.8
323.6
137.1
161.0
32.1
330.2
136.5
174.8
33.7
345.0
133.9
182.8
35.1
351.8
rn.o'
189.0
36.9 r
363.9'
144.4
188.7
38.3
371.5
30.3
3.7
33.8
4.2
39.2
4.9
40.0
5.0
40.7
5.1
42.4
5.4
41.4
5.8
40.4
5.9
41.2
6.2
42.8
6.6
7 Accounts receivable, net
8 All other
183.2
34.4
213.5
35.7
256.5
45.3
268.0
48.8
277.8
48.8
282.4
59.9
297.8
57.9
305.5
59.0
316.5'
si.r
322.1
65.0
9 Total assets
217.6
249.2
301.9
316.8
326.6
342.3
355.6
364.5
374.2R
387.1
18.3
60.5
20.0
73.1
20.6
99.2
19.0
104.3
19.2
108.4
20.2
112.8
22.2
117.8
17.3
119.1
17.2
120.4'
16.2
123.5
Less:
Reserves for unearned income
6 Reserves for losses
LIABILITIES
10 Bank loans
11 Commercial paper
Debt
12
Other short-term
Long-term
13
14
All other liabilities
15 Capital, surplus, and undivided profits
16 Total liabilities and capital
r
11.1
67.7
31.2
28.9
12.9
77.2
34.5
31.5
12.5
93.1
40.9
35.7
13.4
101.0
42.3
36.7
15.4
105.2
40.1
38.4
16.0
109.8
44.1
39.4
17.2
115.6
43.4
39.4
21.6
118.4
46.3
41.8
24.4
121.5'
48.3'
42.3'
26.9
128.0
48.7
43.8
217.6
249.2
301.9
316.8
326.6
342.3
355.6
364.5
374.2'
387.1
NOTE. Components may not add to totals because of rounding.
1.52 DOMESTIC FINANCE COMPANIES
Business Credit
Millions of dollars, seasonally adjusted except as noted
Type
Accounts
receivable
outstanding
Sept. 30
19871
Changes in accounts receivable
Extensions
Repayments
1987
1987
1987
July
1 Total
2
3
4
5
6
7
8
9
10
Retail financing of installment sales
Automotive (commercial vehicles)
Business, industrial, and farm equipment
Wholesale financing
Automotive
Equipment
All other
Leasing
Automotive
Equipment
Loans on commercial accounts receivable and factored commercial accounts receivable
All other business credit
Sept.
July
Aug.
Sept.
July
Aug.
Sept.
188,711
3,403
1,400
1,754
29,883
29,862
30,294
26,480
28,282
28,540
32,181
24,070
879
502
1,206
65
-16
529
1,318
1,865
1,351
1,644
1,365
1,688
438
1,363
145
1,579
1,382
1,158
21,901
5,517
8,782
-173
94
127
-1,572
73
152
-1,029
-1
223
10,704
624
3,186
11,335
601
3,251
10,810
710
3,251
10,877
530
3,059
12,907
528
3,100
11,839
711
3,028
21,556
40,682
410
332
560
280
561
422
1,357
1,128
1,086
1,403
1,340
952
947
796
526
1,123
779
530
18,110
15,912
853
379
331
306
248
817
8,344
1,358
7,712
1,298
8,488
1,690
7,490
979
7,382
992
8,240
873
These data also appear in the Board's G.20 (422) release. For address, see
inside front cover.
Aug.
1. Not seasonally adjusted,
A38
DomesticNonfinancialStatistics • January 1988
1.53 MORTGAGE MARKETS
Millions of dollars; exceptions noted.
1987
1984
Item
1985
1986
Apr.
May
June
July
Aug.
Sept.
Oct.
Terms and yields in primary and secondary markets
PRIMARY M A R K E T S
1
2
3
4
5
6
Conventional mortgages on new homes
Terms
Purchase price (thousands of dollars)
Amount of loan (thousands of dollars)
Loan/price ratio (percent)
Maturity (years)
F e e s and charges (percent of loan amount) 2
Contract rate (percent per annum)
Yield (percent per
1 F H L B B series 3
8 H U D series 4
96.8
73.7
78.7
27.8
2.64
11.87
104.1
77.4
77.1
26.9
2.53
11.12
118.1
86.2
75.2
26.6
2.48
9.82
136.9
100.9
75.2
27.1
2.23
8.84
132.9
99.0
76.1
28.0
2.26
8.99
131.8
97.5
75.9
28.0
2.40
9.05
134.6
99.4
75.4
27.9
2.42
9.01
141.2
102.6
75.0
27.8
2.19
9.01
140.2
100.8
74.6
27.3
2.08
9.03
143.9
105.3
75.1
28.4
2.36
8.87
12.37
13.80
11.58
12.28
10.25
10.07
9.21
10.11
9.37
10.44
9.45
10.29
9.41
10.22
9.38
10.37
9.37
lO^'
9.26
n.a.
13.81
13.13
12.24
11.61
9.91
9.30
10.02
8.85
10.61
9.40
10.33
9.50
10.38
9.59
10.55
9.77
10.71 r
10.40
n.a.
10.53
year)
SECONDARY MARKETS
Yield (percent per year)
9 F H A mortgages ( H U D series)
10 G N M A securities 6
Activity in secondary markets
F E D E R A L N A T I O N A L M O R T G A G E ASSOCIATION
Mortgage holdings (end of
11 Total
12
FHA/VA-insured
13
Conventional
Mortgage transactions
14 Purchases
period)
(during
83,339
35,148
48,191
94,574
34,244
60,331
98,048
29,683
68,365
94,404
21,765
72,639
94,064
21,999
72,065
94,064
21,892
72,173
94,154
21,730
72,424
94,600
21,555
73,045
94,884
21,620
73,264
95,097
21,481
73,617
16,721
21,510
30,826
2,118
1,718
1,690
1,569
1,613
1,743
1,278
21,007
6,384
20,155
3,402
32,987
3,386
3,208
4,421
1,726
4,410
1,745
4,448
2,373
5,071
2,276
5,690
1,842
5,627
1,566
5,046
9,283
910
8,373
12,399
841
11,559
13,517
746
12,771
12,492
708
11,784
12,442
688
11,754
12,598
382
11,903
12,834
684
12,150
12,924 r
679"
12,245'
4
T
1
A
T
7,252
6,831
r
5,031
4,723 r
n.a.
n.a.
1
1
5,611
r
t
t
period)
Mortgage
commitments1
15 Contracted (during period)
16 Outstanding (end of period)
F E D E R A L H O M E L O A N MORTGAGE CORPORATION
Mortgage holdings (end of
17 Total
18
FHA/VA
19
Conventional
Mortgage transactions
20 Purchases
21 Sales
periodf
(during
Mortgage
commitments9
22 Contracted (during period)
period)
21,886
18,506
32,603
44,012
38,905
48,989
1. Weighted averages based on sample surveys of mortgages originated by
major institutional lender groups; compiled by the Federal Home Loan Bank
Board in cooperation with the Federal Deposit Insurance Corporation.
2. Includes all fees, commissions, discounts, and "points" paid (by the
borrower or the seller) to obtain a loan.
3. Average effective interest rates on loans closed, assuming prepayment at the
end of 10 years.
4. Average contract rates on new commitments for conventional first mortgages; from Department of Housing and Urban Development.
5. Average gross yields on 30-year, minimum-downpayment, Federal Housing
Administration-insured first mortgages for immediate delivery in the private
secondary market. Based on transactions on first day of subsequent month. Large
monthly movements in average yields may reflect market adjustments to changes
in maximum permissable contract rates.
103,474
100,236
110,855
9,777
9,848
8,408
7,995
7,767
7,182
7,864
7,447
7,330
4,506
|
6. Average net yields to investors on Government National Mortgage Association guaranteed, mortgage-backed, fully modified pass-through securities, assuming prepayment in 12 years on pools of 30-year FHA/VA mortgages carrying
the prevailing ceiling rate. Monthly figures are averages of Friday figures from the
Wall Street Journal.
1. Includes some multifamily and nonprofit hospital loan commitments in
addition to 1- to 4-family loan commitments accepted in F N M A ' s free market
auction system, and through the F N M A - G N M A tandem plans.
8. Includes participation as well as whole loans.
9. Includes conventional and government-underwritten loans. FHLMC's mortgage commitments and mortgage transactions include activity under mortgage/
securities swap programs, while the corresponding data for F N M A exclude swap
activity.
Real Estate
A39
1.54 MORTGAGE DEBT OUTSTANDING 1
Millions of dollars, end of period
1986
Type of holder, and type of property
1984
1985
1987
1986
Q3
Q4
Ql
Q2'
Q3'
1 All holders
2,035,238
2,269,173
2,566,734'
2,471,574
2,566,734 r
2,662,331'
2,754,471
2,827,622
2 1- to 4-family
3 Multifamily
4 Commercial
5
1,318,545
185,604
419,444
111,645
1,467,409
214,045
482,029
105,690
1,666,421'
246,984'
556,569'
96,760 r
1,607,799
237,661
526,535
99,579
1,666,421'
246,984'
556,569'
96,760'
1,712,109'
257,286'
599,384'
93,552'
1,778,306
266,383
617,627
92,155
1,830,432
272,757
633,167
91,266
1,269,702
379,498
196,163
20,264
152,894
10,177
1,390,394
429,196
213,434
23,373
181,032
11,357
1,507,289'
502,534
235,814
31,173
222,799
12,748
1,464,213
474,658
228,593
28,623
204,996
12,446
1,507,289'
502,534
235,814
31,173
222,799
12,748
1,560,403'
519,474'
243,518'
29,515'
233,234'
13,207'
1,607,771
544,381
255,672
30,496
244,385
13,828
1,646,764
563,553
264,983
30,995
253,261
14,314
709,718
528,791
75,567
104,896
464
156,699
14,120
18,938
111,175
12,466
23,787
760,499
554,301
89,739
115,771
688
171,797
12,381
19,894
127,670
11,852
28,902
777,312
558,412
97,059
121,236
605
193,842'
12,827 r
20,952'
149,111'
10,952 r
33,601
772,175
557,938
94,227
119,406
604
185,269
12,927
20,709
140,213
11,420
32,111
777,312
558,412
97,059
121,236
605
193,842'
12,827'
20,952'
149,111'
10,952'
33,601
810,099'
557,234'
103,791'
148,274'
800'
195,743'
12,903'
20,934'
151,420'
10,486'
35,087
826,110
569,594
105,871
149,842
803
200,382
12,745
21,663
155,611
10,363
36,898
840,251
580,605
107,629
151,213
804
204,632
12,745
21,863
159,811
10,213
38,328
158,993
2,301
585
1,716
1,276
213
119
497
447
166,928
1,473
539
934
733
183
113
159
278
203,800
889
47
842
48,421
21,625
7,608
8,446
10,742
159,505
887
48
839
457
132
57
115
153
203,800
889
47
842
48,421
21,625
7,608
8,446
10,742
199,509
687
46
641
48,203
21,390
7,710
8,463
10,640
196,514
667
45
622
48,085
21,157
7,808
8,553
10,567
191,561
654
44
610
42,978
18,111
7,903
6,592
10,372
4,816
2,048
2,768
87,940
82,175
5,765
52,261
3,074
49,187
10,399
9,654
745
4,920
2,254
2,666
98,282
91,966
6,316
47,498
2,798
44,700
14,022
11,881
2,141
5,047
2,386
2,661
97,895
90,718
7,177
39,984
2,353
37,631
11,564
10,010
1,554
4,966
2,331
2,635
97,717
90,508
7,209
42,119
2,478
39,641
13,359
11,127
2,232
5,047
2,386
2,661
97,895
90,718
7,177
39,984
2,353
37,631
11,564
10,010
1,554
5,177
2,447
2,730
95,140
88,106
7,034
37,362
2,198
35,164
12,940
11,774
1,166
5,268
2,531
2,737
94,064
87,013
7,051
35,833
2,108
33,725
12,597
11,172
1,425
5,175
2,435
2,740
94,884
87,901
6,983
34,930
2,055
32,875
12,940
11,570
1,370
44 Mortgage pools or trusts 6
45
Government National Mortgage Association
46
1- to 4-family
47
Multifamily
48
Federal Home Loan Mortgage Corporation
49
1- to 4-family
50
Multifamily
51
Federal National Mortgage Association
52
1- to 4-family
53
Multifamily
54
Farmers Home Administration
55
1- to 4-family
56
Multifamily
Commercial
57
Farm
58
332,057
179,981
175,589
4,392
70,822
70,253
569
36,215
35,965
250
45,039
21,813
5,841
7,559
9,826
415,042
212,145
207,198
4,947
100,387
99,515
872
54,987
54,036
951
47,523
22,186
6,675
8,190
10,472
529,763
260,869
255,132
5,737
171,372
166,667
4,705
97,174
95,791
1,383
348
142
0
132
74
522,721
241,230
235,664
5,566
146,871
143,734
3,137
86,359
85,171
1,188
48,261
21,782
7,353
8,409
10,717
529,763
260,869
255,132
5,737
171,372
166,667
4,705
97,174
95,791
1,383
348
142
0
132
74
571,705
277,386
271,065
6,321
186,295
180,602
5,693
107,673
106,068
1,605
351
154
0
127
70
612,340
290,444
283,357
7,087
200,284
194,238
6,046
121,270
119,617
1,653
342
149
0
126
67
641,239
302,016
294,647
7,369
208,350
201,786
6,564
130,540
128,770
1,770
333
144
0
124
65
59 Individuals and others 7
60
1- to 4-family
Multifamily
61
67
Commercial
Farm
63
274,486
154,315
48,670
42,423
29,078
2%, 809
165,835
55,424
49,207
26,343
325,882
180,896
66,133
54,845
24,008
325,135
183,255
63,886
53,396
24,598
325,882
180,896
66,133
54,845
24,008
330,714
179,517
70,146
57,866
23,185
337,846
182,010
73,924
59,110
22,802
348,058
186,308
76,961
62,166
22,623
6 Selected financial institutions
7
Commercial banks 2
8
1- to 4-family
9
Multifamily
10
Commercial
11
Farm
12
13
14
15
16
17
18
19
20
21
22
Savings institutions 3
1- to 4-family
Multifamily
Commercial
Farm
Life insurance companies
1- to 4-family
Multifamily
Commercial
Farm
Finance companies
23 Federal and related agencies
24
Government National Mortgage Association
25
1- to 4-family
26
Multifamily
Farmers Home Administration
27
1- to 4-family
28
29
Multifamily
30
Commercial
31
Farm
3?
33
34
35
36
37
38
39
40
41
42
43
Federal Housing and Veterans Administration
1- to 4-family
Multifamily
Federal National Mortgage Association
1- to 4-family
Multifamily
Federal Land Banks
1- to 4-family
Farm
Federal Home Loan Mortgage Corporation
1- to 4-family
Multifamily
1. Based on data from various institutional and governmental sources, with
some quarters estimated in part by the Federal Reserve. Multifamily debt refers
to loans on structures of five or more units.
2. Includes loans held by nondeposit trust companies but not bank trust
departments.
3. Includes savings banks and savings and loan associations. Beginning 1987:1,
data reported by FSLIC-insured institutions include loans in process and other
contra assets.
4. Assumed to be entirely 1- to 4-family loans.
5. FmHA-guaranteed securities sold to the Federal Financing Bank were
reallocated from FmHA mortgage pools to FmHA mortgage holdings in 1986: 4,
because of accounting changes by the Farmers Home Administration.
6. Outstanding principal balances of mortgage pools backing securities insured
or guaranteed by the agency indicated.
7. Other holders include mortgage companies, real estate investment trusts,
state and local credit agencies, state and local retirement funds, noninsured
pension funds, credit unions, and other U.S. agencies.
A40
DomesticNonfinancialStatistics • January 1988
1.55 CONSUMER INSTALLMENT CREDIT1-4 Total Outstanding, and Net Change, seasonally adjusted
Millions of dollars
1987
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug/
Sept.
Amounts outstanding (end of period)
1 Total
522,805
577,784
578,578
579,591
579,913
583,595
583,276
587,821
591,175
596,182
602,243
By major holder
Commercial banks
Finance companies
Credit unions
Retailers 3
Savings institutions
Gasoline companies
242,084
113,070
72,119
38,864
52,433
4,235
261,604
136,494
77,857
40,586
58,037
3,205
261,694
135,802
78,284
40,617
58,906
3,276
262,105
136,009
78,492
40,644
59,031
3,311
261,933
136,050
78,569
40,469
59,488
3,405
263,433
137,091
79,255
40,467
59,826
3,522
263,463
136,398
79,476
40,318
60,045
3,576
264,396
138,038
80,585
40,287
60,983
3,532
265,085
138,745
81,492
40,364
61,910
3,580
265,893
140,689
82,486
40,391
63,080
3,643
269,132
142,648
83,084
40,482
63,193
3,703
By major type of credit
8 Automobile
Commercial banks
y
Credit unions
10
11
Finance companies
12
Savings institutions
208,057
93,003
35,635
70,091
9,328
245,055
100,709
39,029
93,274
12,043
245,472
101,389
39,243
92,617
12,223
246,064
101,688
39,347
92,780
12,249
246,290
101,528
39,386
93,032
12,344
247,663
101,781
39,730
93,738
12,414
247,578
102,189
39,841
93,089
12,459
250,130
102,810
40,396
94,270
12,654
250,980
102,829
40,851
94,455
12,846
254,013
103,382
41,349
96,193
13,089
257,255
104,593
41,649
97,900
13,113
13 Revolving
Commercial banks
14
15
Retailers
16
Gasoline companies
Savings institutions
17
18
Credit unions
122,021
75,866
34,695
4,235
5,705
1,520
134,938
85,652
36,240
3,205
7,713
2,128
134,916
85,395
36,277
3,276
7,829
2,139
135,663
86,053
36,308
3,311
7,845
2,145
135,166
85,567
36,141
3,405
7,906
2,147
136,706
86,929
36,139
3,522
7,951
2,166
136,869
87,133
36,009
3,576
7,980
2,172
137,401
87,590
35,971
3,532
8,105
2,202
138,741
88,685
36,021
3,580
8,228
2,227
139,837
89,535
36,022
3,643
8,383
2,254
141,861
91,401
36,087
3,703
8,398
2,271
19 Mobile home
Commercial banks
20
Finance companies
21
22
Savings institutions
25,488
9,538
9,391
6,559
25,710
8,812
9,028
7,870
25,852
8,787
9,077
7,988
25,789
8,739
9,045
8,005
25,614
8,725
8,823
8,067
25,626
8,698
8,816
8,112
25,542
8,615
8,785
8,142
25,685
8,609
8,807
8,269
25,860
8,626
8,839
8,395
25,695
8,518
8,623
8,554
25,600
8,450
8,580
8,569
23 Other
Commercial banks
24
25
Finance companies
Credit unions
26
27
Retailers
28
Savings institutions
167,239
63,677
33,588
34,964
4,169
30,841
172,081
66,431
34,192
36,700
4,346
30,412
172,338
66,122
34,108
36,901
4,340
30,867
172,076
65,625
34,183
36,999
4,336
30,932
172,844
66,113
34,196
37,036
4,327
31,172
173,600
66,026
34,537
37,359
4,328
31,349
173,287
65,527
34,524
37,463
4,310
31,463
174,605
65,387
34,962
37,986
4,315
31,955
175,594
64,945
35,452
38,413
4,343
32,441
176,637
64,458
35,874
38,882
4,369
33,054
177,527
64,687
36,168
39,164
4,395
33,113
2
3
4
5
6
7
Net change (during period)
29 Total
76,622
54,979
794
1,013
322
3,682
-319
4,545
3,354
5,007
6,061
By major holder
Commercial banks
Finance companies
Credit unions
Retailers 3
Savings institutions
Gasoline companies
32,926
23,566
6,493
1,660
12,103
-126
19,520
23,424
5,738
1,722
5,604
-1,030
90
-692
427
31
869
71
411
207
208
27
125
35
-172
41
77
-175
457
94
1,500
1,041
686
-2
338
117
30
-693
221
-149
219
54
933
1,640
1,109
-31
938
-44
689
707
907
77
927
48
808
1,944
994
27
1,170
63
3,239
1,959
598
91
113
60
By major type of credit
36 Automobile
Commercial banks
37
Credit unions
38
39
Finance companies
40
Savings institutions
35,705
9,103
5,330
17,840
3,432
36,998
7,706
3,394
23,183
2,715
417
680
214
-657
180
592
299
104
163
26
226
-160
39
252
95
1,373
253
344
706
70
-85
408
111
-649
45
2,552
621
555
1,181
195
850
19
455
185
192
3,033
553
498
1,738
243
3,242
1,211
300
1,707
24
41 Revolving
Commercial banks
42
Retailers
43
44
Gasoline companies
Savings institutions
45
Credit unions
46
22,401
17,721
1,488
-126
2,771
547
12,917
9,786
1,545
-1,030
2,008
608
-22
-257
37
71
116
11
747
658
31
35
16
6
-497
-486
-167
94
61
2
1,540
1,362
-2
117
45
19
163
204
-130
54
29
6
532
457
-38
-44
125
30
1,340
1,095
50
48
123
25
1,096
850
1
63
155
27
2,024
1,866
65
60
15
17
47 Mobile home
Commercial banks
48
49
Finance companies
50
Savings institutions
778
-85
-405
1,268
222
-726
-363
1,311
142
-25
49
118
-63
-48
-32
17
-175
-14
-222
62
12
-27
-7
45
-84
-83
-31
30
143
-6
22
127
175
17
32
126
-165
-108
-216
159
-95
-68
-43
15
51 Other
Commercial banks
52
Finance companies
53
Credit unions
54
55
Retailers
Savings institutions
56
17,738
6,187
6,131
616
172
4,632
4,842
2,754
604
1,736
177
-429
257
-309
-84
201
-6
455
-262
-497
75
98
-4
65
768
488
13
37
-9
240
756
-87
341
323
1
177
-313
-499
-13
104
-18
114
1,318
-140
438
523
5
492
989
-442
490
427
28
486
1,043
-487
422
469
26
613
890
229
294
282
26
59
30
31
32
33
34
35
1. The Board's series cover most short- and intermediate-term credit extended to individuals that is scheduled to be repaid (or has the option of
repayment) in two or more installments.
2. More detail for finance companies is available in the G.20 statistical release,
3. Excludes 3 0 - d a y charge credit held by travel and entertainment companies,
4. All data have been revised.
Consumer Installment Credit
A41
1.56 TERMS OF CONSUMER INSTALLMENT CREDIT
Percent unless noted otherwise
1987
Item
1984
1985
1986
Mar.
Apr.
May
June
July
Aug.
Sept.
INTEREST R A T E S
1
2
3
4
5
6
Commercial banks 1
48-month new car 2
24-month personal
120-month mobile home 2
Credit card
Auto finance companies
N e w car
Used car
13.71
16.47
15.58
18.77
12.91
15.94
14.%
18.69
11.33
14.82
13.99
18.26
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
10.23
14.00
13.23
17.92
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
10.37
14.22
13.24
17.85
n.a.
n.a.
n.a.
n.a.
14.62
17.85
11.98
17.59
9.44
15.95
10.59
14.40
10.81
14.49
10.69
14.45
10.64
14.47
10.52
14.53
9.63
14.53
8.71
14.58
48.3
39.7
51.5
41.4
50.0
42.6
53.7
44.9
54.3
45.0
53.5
45.2
53.6
45.4
53.4
45.5
52.1
45.4
50.7
45.2
88
92
91
94
91
97
94
99
94
98
93
98
93
98
93
98
93
98
93
98
9,333
5,691
9,915
6,089
10,665
6,555
10,641
7,145
10,946
7,234
11,176
7,373
11,214
7,479
11,267
7,527
11,374
7,763
11,455
7,476
OTHER TERMS3
7
8
9
10
11
12
Maturity (months)
N e w car
Used car
Loan-to-value ratio
N e w car
Used car
Amount financed (dollars)
N e w car
Used car
1. Data for midmonth of quarter only.
2. Before 1983 the maturity for new car loans was 36 months, and for mobile
home loans was 84 months.
3. At auto finance companies.
NOTE. These data also appear in the Board's G.19 (421) release. For address,
see inside front cover.
A42
DomesticNonfinancialStatistics • January 1988
1.57 FUNDS RAISED IN U.S. CREDIT MARKETS
Billions of dollars; half-yearly data are at seasonally adjusted annual rates.
1985
1984
Transaction category, sector
1982
1983
1984
1985
1987
1986
1986
HI
H2
HI
HI
H2
H2
HI
Nonfinancial sectors
388.9
550.2
753.9
854.8
833.4
717.3
790.4
722.7
986.8
676.9
989.9
568.3
161.3
162.1
-.9
186.6
186.7
-.1
198.8
199.0
-.2
223.6
223.7
-.1
214.3
214.7
-.3
190.4
190.7
-.2
207.2
207.3
-.1
204.8
204.9
-.1
242.5
242.5
-.1
207.2
207.4
-.1
221.5
222.0
-.5
151.4
151.7
-.4
227.6
148.3
44.2
18.7
85.4
50.5
5.4
25.2
4.2
363.6
253.4
53.7
16.0
183.6
117.5
14.2
49.3
2.6
555.1
313.6
50.4
46.1
217.1
129.7
25.1
63.2
-.9
631.1
447.8
136.4
73.8
237.7
151.9
29.2
62.5
-6.0
619.0
445.0
35.4
121.7
298.0
199.4
33.0
73.9
-8.3
526.9
284.7
33.8
22.5
228.5
139.5
27.8
62.6
-1.4
583.3
342.5
67.0
69.8
205.7
119.9
22.4
63.8
-.4
518.0
350.4
67.0
62.2
221.2
139.2
25.0
59.5
-2.5
744.3
545.2
205.8
85.3
254.2
164.7
33.4
65.5
-9.5
469.6
363.4
-16.9
135.3
245.0
163.8
31.2
58.9
-8.9
768.4
546.7
87.7
108.1
350.9
234.9
34.8
88.9
-7.7
417.0
407.1
20.0
89.0
298.1
217.5
27.7
62.5
-9.6
79.3
19.3
50.4
-6.1
15.8
110.2
56.6
23.2
-.8
31.3
241.5
90.4
67.1
21.7
62.2
183.3
94.6
38.6
14.6
35.5
164.0
65.8
66.5
-9.3
41.0
242.2
94.7
71.2
26.6
49.7
240.8
86.2
63.0
16.8
74.7
167.5
95.3
21.0
14.4
36.8
199.1
93.9
56.2
14.8
34.2
106.2
71.0
12.2
-13.1
36.2
221.8
60.6
120.8
-5.5
45.9
9.9
15.7
-40.2
4.5
29.9
227.6
21.5
90.0
6.8
40.2
69.0
363.6
34.0
188.2
4.1
77.0
60.3
555.1
27.4
234.6
-.1
97.0
196.0
631.1
91.8
293.4
-13.9
93.1
166.7
619.0
46.4
279.9
-15.1
115.9
192.0
526.9
16.2
235.0
-.5
101.8
174.3
583.3
38.6
234.2
.4
92.2
217.8
518.0
56.3
259.8
-7.0
85.7
123.2
744.3
127.2
327.1
-20.8
100.5
210.3
469.6
3.1
232.8
-16.8
96.2
154.3
768.4
89.7
326.9
-13.3
135.5
229.7
417.0
28.6
224.0
-19.5
92.8
91.2
75 Foreign net borrowing in United States
76
77
Open market paper
78
U.S. government loans
29
16.0
6.6
-5.5
1.9
13.0
17.3
3.1
3.6
6.5
4.1
8.3
3.8
-6.6
6.2
5.0
1.2
3.8
-2.8
6.2
-6.0
9.0
2.6
-1.0
11.5
-4.0
36.1
1.3
-1.3
16.6
19.5
-19.4
6.3
-11.9
-4.3
-9.6
-5.8
5.5
-5.8
2.8
-8.2
8.2
2.1
.1
9.6
-3.7
21.5
6.2
1.5
19.1
-5.3
-3.5
-1.1
-3.5
3.9
-2.7
-12.6
-1.1
-3.5
-5.3
-2.8
30 Total domestic plus foreign
404.8
567.5
762.2
856.0
842.4
753.4
771.0
716.9
995.0
698.3
986.4
555.7
1 Total net borrowing by domestic nonfinancial sectors
By sector and
3
4
instrument
Treasury securities
5 Private domestic nonfinancial sectors
Debt capital instruments
6
7
Tax-exempt obligations
8
9
Home mortgages
10
11
Multifamily residential
17
13
14
15
16
17
18
Other debt instruments
19
70
71
77
73
24
By borrowing sector
State and local goveraments
Open market paper
Other
Corporate
Financial sectors
31 Total net borrowing by financial s e c t o r s . . .
By instrument
32 U . S . government related
Sponsored credit agency securities
33
34
Mortgage pool securities
35
Loans from U . S . government
36 Private financial sectors
37
Corporate bonds
38
Mortgages
39
Bank loans n.e.c
40
Open market paper
41
Loans from Federal Home Loan Banks
By sector
42 Sponsored credit agencies
43 Mortgage pools
44 Private financial sectors
45
Commercial banks
46
Bank affiliates
47
Savings and loan associations
48
Finance companies
49
REITs
50
CMO Issuers
90.3
99.3
151.9
199.0
291.1
153.0
150.7
175.1
222.8
238.8
343.4
317.5
64.9
14.9
49.5
.4
25.4
12.7
.1
1.9
9.9
.8
67.8
1.4
66.4
74.9
30.4
44.4
77.3
31.5
45.8
96.8
26.6
70.3
80.5
30.8
.4
.6
32.1
16.5
73.5
41.5
.4
.7
16.0
14.9
78.3
48.9
-.1
21.3
-7.0
77.0
36.2
.4
.7
24.1
15.7
174.3
13.2
161.4
-.4
116.8
68.7
.1
4.0
24.2
19.8
72.5
29.4
43.1
31.5
17.4
101.5
20.6
79.9
1.1
97.4
48.6
.1
2.6
32.0
14.2
2.3
14.6
12.5
106.3
14.6
89.5
2.2
116.5
48.3
.1
2.9
49.4
15.9
133.8
6.4
126.6
.8
105.0
70.9
.6
4.0
15.1
14.4
214.8
20.0
196.3
-1.5
128.6
66.5
-.5
4.0
33.4
25.2
180.2
7.8
171.8
.5
137.4
92.5
.2
-7.4
38.3
13.6
15.3
49.5
25.4
11.7
6.8
2.5
4.5
-.2
.2
1.4
66.4
31.5
5.0
12.1
-2.1
12.9
-.1
3.7
30.4
44.4
77.0
7.3
15.6
22.7
18.9
.1
12.4
21.7
79.9
97.4
-4.9
14.5
22.3
53.9
-.7
12.2
12.9
161.4
116.8
-3.6
4.6
29.3
50.2
-.3
36.7
29.4
43.1
80.5
19.8
20.4
22.0
8.2
.2
9.8
31.5
45.8
73.5
-5.3
10.8
23.3
29.6
.1
15.0
26.6
70.3
78.3
-4.7
10.2
14.2
49.7
-.6
9.5
16.8
89.5
116.5
-5.0
18.9
30.4
58.1
-.8
14.9
7.2
126.6
105.0
-2.7
-1.7
25.5
53.1
.6
30.2
18.5
196.3
128.6
-4.6
10.9
33.1
47.2
-1.3
43.3
8.3
171.8
137.4
4.4
21.6
30.7
27.2
-.2
53.7
*
*
All sectors
51 Total net borrowing
52
53
54
55
56
57
58
59
U.S. government securities ..
State and local obligations . . .
Corporate and foreign bonds .
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans
495.1
666.8
225.9
44.2
38.0
85.4
19.3
46.7
5.7
30.0
254.4
53.7
36.5
183.6
56.6
26.7
26.9
28.4
914.1
1,054.9
1,133.5
906.4
921.8
892.1
1,217.8
937.1
1,329.8
873.2
273.8
50.4
86.1
217.4
90.4
61.1
52.0
82.9
324.2
136.4
126.1
237.7
94.6
38.3
52.8
44.8
389.0
35.4
192.9
298.0
65.8
69.5
26.4
56.5
263.1
33.8
54.6
228.8
94.7
70.4
75.4
85.7
284.5
67.0
117.6
206.0
86.2
51.8
28.6
80.0
301.7
67.0
116.6
221.2
95.3
17.5
31.8
41.1
346.6
205.8
135.7
254.2
93.9
59.2
73.7
48.6
340.2
-16.9
212.4
245.6
71.0
17.7
21.0
46.1
437.8
87.7
173.5
350.4
60.6
121.3
31.7
66.9
331.0
20.0
180.5
298.3
15.7
-51.0
37.5
41.1
External corporate equity funds raised in United States
60 Total new share issues
25.8
61.8
-36.4
19.9
91.6
-47.9
-24.9
3.0
36.7
100.8
82.3
61.8
61
67
63
64
65
8.8
17.0
11.4
4.2
1.4
27.2
34.6
28.3
2.6
3.7
29.3
-65.7
-74.5
7.8
.9
85.7
-65.8
-81.5
12.0
3.7
163.3
-71.7
-80.8
8.3
.7
26.5
-74.4
-79.5
6.8
-1.6
32.2
-57.1
-69.4
8.8
3.5
64.2
-61.2
-75.5
11.2
3.1
107.1
-70.4
-87.5
12.8
4.3
155.5
-54.7
-68.7
7.5
6.6
171.1
-88.7
-92.7
9.1
-5.1
123.3
-61.5
-70.0
6.7
1.9
Mutual funds
All other
Nonfinancial corporations
Financial corporations
Foreign shares purchased in United States
Flow of Funds
A43
1.58 DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS
Billions of dollars, except as noted; half-yearly data are at seasonally adjusted annual rates.
1984
Transaction category, or sector
1 Total funds advanced in credit markets to domestic
nonfinancial sectors
2
3
4
5
6
By public agencies and foreign
Total net advances
U.S. government securities
Residential mortgages
F H L B advances to savings and loans
Other loans and securities
1982
1983
1984
1985
1985
1986
1987
1986
HI
H2
HI
H2
HI
H2
HI
388.9
550.2
753.9
854.8
833.4
717.3
790.4
722.7
986.8
676.9
989.9
568.3
114.9
22.3
61.0
.8
30.8
114.0
26.3
76.1
-7.0
18.6
157.6
39.3
56.5
15.7
46.2
202.3
47.1
94.6
14.2
46.3
317.3
84.8
158.5
19.8
54.2
132.7
27.6
55.5
16.5
33.2
182.5
51.0
57.4
14.9
59.2
195.8
50.3
88.6
12.5
44.4
208.7
43.9
100.7
15.9
48.2
264.1
74.0
123.8
14.4
52.0
370.6
95.6
193.2
25.2
56.5
241.3
46.3
164.9
13.6
16.5
7
8
9
10
Total advanced, by sector
U.S. government
Sponsored credit agencies
Monetary authorities
Foreign
15.9
65.5
9.8
23.7
9.7
69.8
10.9
23.7
17.1
74.3
8.4
57.9
16.8
101.5
21.6
62.3
9.5
175.5
30.2
102.1
7.5
73.3
12.0
39.8
26.6
75.2
4.8
75.9
25.1
96.4
27.5
46.8
8.4
106.7
15.8
77.8
10.8
128.2
13.2
111.9
8.2
222.8
47.2
92.3
-4.1
167.7
10.8
66.9
11
12
Agency and foreign borrowing not in line 1
Sponsored credit agencies and mortgage pools
Foreign
64.9
16.0
67.8
17.3
74.9
8.3
101.5
1.2
174.3
9.0
72.5
36.1
77.3
-19.4
96.8
-5.8
106.3
8.2
133.8
21.5
214.8
-3.5
180.2
-12.6
Private domestic funds
advanced
13 Total net advances
14
U . S . government securities
15
State and local obligations
Corporate and foreign bonds
16
Residential mortgages
17
Other mortgages and loans
18
LESS: Federal Home Loan Bank advances
19
354.8
203.6
44.2
14.7
-5.3
98.3
.8
521.3
228.1
53.7
14.5
55.0
162.4
-7.0
679.5
234.5
50.4
35.1
98.2
276.9
15.7
755.2
277.0
136.4
40.8
86.4
228.8
14.2
699.3
304.2
35.4
84.3
73.8
221.4
19.8
693.2
235.5
33.8
17.3
111.7
311.5
16.5
665.7
233.5
67.0
53.0
84.8
242.3
14.9
618.0
251.3
67.0
39.7
75.5
197.0
12.5
892.5
302.7
205.8
42.0
97.4
260.6
15.9
568.0
266.3
-16.9
100.8
71.3
161.0
14.4
830.6
342.2
87.7
67.8
76.4
281.8
25.2
494.6
284.7
20.0
61.6
80.3
61.6
13.6
Private financial
intermediation
20 Credit market funds advanced by private financial
institutions
Commercial banking
21
22
Savings institutions
Insurance and pension funds
23
Other finance
24
274.2
110.2
22.9
96.6
44.5
395.8
144.3
135.6
100.1
15.8
559.8
168.9
150.2
121.8
118.9
579.5
186.3
83.0
156.0
154.2
726.1
194.7
105.8
175.9
249.6
587.5
192.2
167.0
148.3
80.0
532.1
145.5
133.5
95.3
157.8
483.8
143.3
54.5
139.4
146.5
675.2
229.4
111.4
172.5
161.9
638.9
117.2
94.5
170.6
256.7
813.2
272.3
117.2
181.2
242.4
485.1
49.9
85.7
213.3
136.2
25 Sources of funds
26
Private domestic deposits and RPs
27
Credit market borrowing
274.2
196.2
25.4
395.8
215.4
31.5
559.8
316.9
77.0
579.5
213.2
97.4
726.1
272.8
116.8
587.5
280.2
80.5
532.1
353.5
73.5
483.8
191.4
78.3
675.2
235.0
116.5
638.9
252.2
105.0
813.2
293.4
128.6
485.1
15.1
137.4
52.6
-31.4
6.1
106.0
-28.1
148.9
16.3
-5.3
109.7
28.2
165.9
5.4
4.0
118.6
37.9
268.9
17.7
10.3
141.0
99.9
336.4
12.4
1.7
152.5
169.8
226.8
10.9
-2.8
162.5
56.1
105.1
-.1
10.8
74.6
19.7
214.1
21.3
13.9
118.6
60.3
323.6
14.2
6.6
163.4
139.4
281.7
12.3
-4.2
138.6
134.9
391.1
12.5
7.6
166.4
204.6
332.6
41.8
-4.4
234.4
60.8
106.0
68.5
25.0
-5.7
18.2
157.0
99.3
40.3
-11.6
12.0
17.0
196.7
123.6
30.4
5.2
9.3
28.1
273.2
145.3
47.6
11.8
43.9
24.6
90.1
43.4
-.8
34.4
-4.8
17.9
186.2
162.8
10.4
-26.4
15.6
23.8
207.1
84.3
50.4
36.9
3.0
32.5
212.5
156.2
14.8
15.4
3.5
22.6
333.9
134.5
80.4
8.2
84.2
26.6
34.1
37.4
-68.7
68.1
-16.3
13.6
146.1
49.4
67.2
.8
6.7
22.1
146.9
69.9
21.7
39.0
7.7
8.5
39 Deposits and currency
40
Currency
Checkable deposits
41
42
Small time and savings accounts
Money market fund shares
43
44
Large time deposits
45
Security RPs
46
Deposits in foreign countries
205.5
9.7
18.0
136.0
33.5
-2.4
11.1
-.4
232.8
14.3
28.6
215.7
-39.0
-8.4
18.5
3.1
320.4
8.6
27.9
150.1
49.0
84.9
5.0
-5.1
223.5
12.4
41.4
139.1
8.9
7.2
16.6
-2.1
293.2
14.4
97.7
122.5
43.8
-9.3
18.3
5.9
286.8
13.7
26.0
129.0
24.5
92.0
8.7
-7.1
354.0
3.6
29.8
171.2
73.4
77.9
1.2
-3.1
198.3
15.9
14.6
161.5
10.6
-7.6
12.2
-9.0
248.7
8.8
68.2
116.7
7.1
21.9
21.1
4.9
262.0
10.7
79.9
115.4
46.9
10.0
-.9
324.4
18.2
115.5
129.5
40.6
-18.7
26.5
12.8
10.2
10.0
-28.5
33.9
-4.6
1.5
12.7
-14.9
47 Total of credit market instruments, deposits and
currency
28
2.9
30
31
32
Other sources
Foreign funds
Treasury balances
Insurance and pension reserves
Other, net
Private domestic nonfinancial
investors
33 Direct lending in credit markets
34
U . S . government securities
35
State and local obligations
36
Corporate and foreign bonds
37
Open market paper
Other
38
*
*
311.5
389.9
517.1
496.7
383.3
473.0
561.1
410.7
582.6
296.0
470.5
157.1
Public holdings as percent of total
Private financial intermediation (in percent)
Total foreign funds
28.4
77.3
-7.7
20.1
75.9
40.0
20.7
82.4
63.3
23.6
76.7
80.1
37.7
103.8
114.5
17.6
84.7
50.7
23.7
79.9
75.8
27.3
78.3
68.1
21.0
75.6
92.0
37.8
112.5
124.2
37.6
97.9
104.9
43.4
98.1
108.7
MEMO: Corporate equities not included above
51 Total net issues
52
Mutual fund shares
Other equities
53
54 Acquisitions by financial institutions
55 Other net purchases
25.8
8.8
17.0
25.9
-.1
61.8
27.2
34.6
51.1
10.7
-36.4
29.3
-65.7
19.7
-56.1
19.9
85.7
-65.8
42.8
-22.9
91.6
163.5
-71.7
48.2
43.4
-47.9
26.5
-74.4
-.2
-47.7
-24.9
32.2
-57.1
39.7
-64.6
3.0
64.2
-61.2
58.8
-55.8
36.7
107.1
-70.4
26.8
10.0
100.8
155.5
-54.7
56.6
44.2
82.3
171.1
-88.7
39.7
42.6
61.8
123.3
-61.5
65.5
-3.6
48
49
50
N O T E S BY LINE N U M B E R
1. Line 1 of table 1.57.
2. Sum of lines 3 - 6 or 7-10.
6. Includes farm and commercial mortgages.
11. Credit market funds raised by federally sponsored credit agencies, and net
issues of federally related mortgage pool securities.
13. Line 1 less line 2 plus line 11 and 12. Also line 20 less line 27 plus line 33.
Also sum of lines 28 and 47 less lines 40 and 46.
18. Includes farm and commercial mortgages.
26. Line 39 less lines 40 and 46.
27. Excludes equity issues and investment company shares. Includes line 19.
29. Foreign deposits at commercial banks, bank borrowings from foreign
branches, and liabilities of foreign banking agencies to foreign affiliates, less
claims on forfeign affiliates and dedposits by banking in foreign banks.
30. Demand deposits and note balances at commercial banks.
31. Excludes net investment of these reserves in corporate equities.
32. Mainly retained earnings and net miscellaneous liabilities.
33. Line 13 less line 20 plus line 27.
34-38. Lines 14-18 less amounts acquired by private finance plus amounts
borrowed by private finance. Line 38 includes mortgages.
40. Mainly an offset to line 9.
47. Lines 33 plus 39, or line 13 less line 28 plus 40 and 46.
48. Line 2/line 1.
49. Line 20/line 13.
50. Sum of lines 10 and 29.
51. 53. Includes issues by financial institutions.
NOTE. Full statements for sectors and transaction types in flows and in amounts
outstanding may be obtained from Flow of Funds Section, Division of Research
and Statistics, Board of Governors of the Federal Reserve System, Washington,
D.C. 20551.
A44
Domestic Nonfinancial Statistics • January 1988
2.10 NONFINANCIAL BUSINESS ACTIVITY
Selected Measures1
1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted.
1987
Measure
1984
1985
1986
Feb.
Mar.
Apr.
May
June
July
Aug.'
Sept.'
Oct.
1 Industrial production
121.4
123.8
125.1
127.1
127.4
127.4
128.2
129.1
130.6
131.0
130.9
131.7
Market
groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
126.7
127.3
118.0
139.6
124.7
114.2
130.8
131.1
120.2
145.4
130.0
114.2
133.2
132.3
124.5
142.7
136.4
113.9
136.0
134.8
126.4
146.0
139.9
114.9
136.4
135.1
126.7
146.2
140.9
115.2
135.8
134.5
125.5
146.4
140.3
115.9
136.9
135.5
127.3
146.3
141.8
116.3
137.8
136.2
127.2
148.1
143.3
117.2
139.5'
137.9'
128.9'
149.7'
145.0'
118.5'
139.7
138.3
129.2
150.3
144.8
119.0
139.7
138.4
128.4
151.7
144.2
118.8
141.0
139.9
129.9
153.2
144.6
119.0
123.4
126.4
129.1
131.6
132.4
132.4
133.2
134.0
135.6'
135.7
135.7
136.8
80.5
82.0
80.1
80.2
79.8
78.5
80.0
78.7
80.3
78.7
80.2
79.1
80.4
79.3
80.8
79.8
81.5
80.6'
81.4
80.8
81.2
80.6
81.7
80.6
2
3
4
5
6
7
Industry
groupings
8 Manufacturing
Capacity utilization (percent) 2
Manufacturing
9
Industrial materials industries
10
11 Construction contracts (1982 = 100) 3
135.0
148.0
155.0
151.0
165.0
162.0
149.0
161.0
163.0
171.0
157.0
166.0
12
13
14
15
16
17
18
19
20
21
Nonagricultural employment, total 4
Goods-producing, total
Manufacturing, total
Manufacturing, p r o d u c t i o n - w o r k e r . . . .
Service-producing
Personal income, total
Wages and salary disbursements
Manufacturing
,
Disposable personal income
Retail sales
114.6
101.6
98.4
94.1
120.0
193.4
185.0
164.6
193.5
179.0
118.3
102.4
97.8
92.9
125.0
207.0
198.7
172.8
206.0
190.6
120.8
102.4
96.5
91.2
128.9
219.9
210.2
176.4
219.1
199.9
122.7
101.6
96.4
91.4
131.5
228.4
218.0
179.1
227.5
206.3
122.9
101.7
96.5
91.4
131.8
229.1
218.6
179.2
228.1
206.8
123.2
101.7
96.6
91.5
132.2
230.3
219.5
178.9
222.5
207.4
123.3
101.7
96.6
91.6
132.4
230.7
220.7
179.9
229.6
207.3
123.5
101.7
96.6
91.6
132.6
231.1
221.2
180.0
228.9
209.6
123.8
102.1
97.0
92.1
132.9
232.5
222.3
180.1
230.3
210.9
124.0
102.2
97.2
92.2
133.1
233.7
224.2
182.0
231.3
214.0
124.2
102.3
97.4
92.5
133.3
235.0
225.5
183.4
232.5
211.7
124.8
102.8
97.7
92.9
134.1
238.9
227.1
184.3
236.8
211.5
22
23
Prices 7
Consumer (1967 = 100)
Producer finished goods (1967 = 100) . . .
311.1
291.1
322.2
293.7
328.4
289.7 r
334.4
292.3
335.9
292.6
337.7
294.9
338.7
295.8
340.1
296.2'
340.8
297.8
342.7
297.2
344.4
296.7
345.3
298.2
1. A major revision of the industrial production index and the capacity
utilization rates was released in July 1985. See "A Revision of the Index of
Industrial Production" and accompanying tables that contain revised indexes
(1977=100) through December 1984 in the FEDERAL RESERVE BULLETIN, vol. 71
(July 1985), pp. 487-501. The revised indexes for January through June 1985 were
shown in the September BULLETIN.
2. Ratios of indexes of production to indexes of capacity. Based on data from
Federal Reserve, McGraw-Hill E c o n o m i c s Department, Department of Commerce, and other sources.
3. Index of dollar value of total construction contracts, including residential,
nonresidential and heavy engineering, from McGraw-Hill Information Systems
Company, F. W. D o d g e Division.
4. Based on data in Employment
and Earnings ( U . S . Department of Labor).
Series covers e m p l o y e e s only, excluding personnel in the Armed Forces.
5. Based on data in Survey of Current Business ( U . S . Department of Commerce).
6. Based on Bureau of Census data published in Survey of Current
Business.
7. Data without seasonal adjustment, as published in Monthly Labor
Review.
Seasonally adjusted data for changes in the price indexes may be obtained from
the Bureau of Labor Statistics, U . S . Department of Labor.
NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5,and 6,
and indexes for series mentioned in notes 3 and 7 may also be found in the Survey
of Current
Business.
Figures for industrial production for the last t w o months are preliminary and
estimated, respectively.
Selected Measures
A45
2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT
Thousands of persons; monthly data are seasonally adjusted. Exceptions noted.
1987
1984
Category
1985
1986
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
HOUSEHOLD SURVEY DATA
1 Noninstitutional population1
178,602
180,440
182,822
184,436
184,597
184,777
184,941
185,127
185,264
185,428
185,575
115,763
113,544
117,695
115,461
120,078
117,834
121,479
119,222
121,588
119,335
122,237
119,993
121,755
119,517
122,194
119,952
122,564
120,302
122,128
119,861
122,625
120,361
101,685
3,321
103,971
3,179
106,434
3,163
108,084
3,284
108,545
3,290
109,112
3,335
109,079
3,178
109,508
3,219
109,989
3,092
109,602
3,170
109,903
3,283
8,539
7.5
62,839
8,312
7.2
62,745
8,237
7.0
62,744
7,854
6.6
62,957
7,500
6.3
63,009
7,546
6.3
62,540
7,260
6.1
63,186
7,224
6.0
62,933
7,221
6.0
62,700
7,089
5.9
63,300
7,174
6.0
62,950
9 Nonagricultural payroll employment3
94,496
97,519
99,610
101,329
101,598
101,708
101,818
102,126
102,275r
102,396'
102,945
Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Finance
Service
Government
19,378
966
4,383
5,159
22,100
5,689
20,797
16,023
19,260
927
4,673
5,238
23,073
5,955
22,000
16,394
18,994
783
4,904
5,244
23,580
6,297
23,099
16,710
18,995
722
5,032
5,333
23,902
6,526
23,842
16,977
19,011
729
5,019
5,348
23,969
6,558
23,926
17,038
19,018
735
4,999
5,344
23,980
6,576
24,025
17,031
19,015
738
5,008
5,350
24,007
6,586
24,083
17,031
19,104
744
5,002
5,363
24,071
6,608
24,214
17,020
19,129'
751'
5,006R
5,377
24,063'
6,624R
24,279'
17,046'
19,174'
758'
4,978'
5,406'
24,132'
6,626
24,274'
17,048'
19,237
762
5,019
5,422
24,212
6,633
24,424
17,236
2 Labor force (including A r m e d Forces)
Civilian labor force
3
4
5
1
Nonagricultural industries
Agriculture
6
Number
Rate (percent of civilian labor force)
7
N
o
t
in labor f o r c e
8
ESTABLISHMENT SURVEY D A T A
10
11
17
13
14
IS
16
17
A46
2.12
Domestic Nonfinancial Statistics • January 1988
OUTPUT, CAPACITY, A N D CAPACITY
UTILIZATION
Seasonally adjusted
1986
1987
Q4
Ql
Q2
1986
Q3
Output (1977 = 100)
Q4
1987
Ql
Q2
1986
Q3
Q4
Capacity (percent of 1977 output)
1987
Ql
Q2
Q3
Utilization rate (percent)
1 Total industry
125.9
126.9
128.2
130.9
158.7
159.5
160.4
161.3
79.4
79.5
79.9
81.2
2 Mining
3 Utilities
96.9
109.1
98.8
108.1
99.0
108.3
100.0
110.1
130.8
137.3
130.4
137.7
129.7
138.3
129.0
138.8
74.1
79.4
75.8
78.5
76.3
78.3
77.5
79.3
4 Manufacturing
130.4
131.6
133.2
135.9
163.4
164.5
165.6
166.7
79.8
80.0
80.5
81.5
5 Primary processing
6 Advanced processing, .
113.4
140.6
114.3
142.0
116.1
143.5
119.1
146.1
137.5
179.1
138.2
180.3
139.0
181.6
139.8
182.9
82.5
78.5
82.7
78.7
83.5
79.0
85.2
79.9
7 Materials
8 Durable goods
9
Metal materials
10 Nondurable goods
Textile, paper, and chemical . . .
11
V
13
14 Energy materials
Previous cycle 1
High
Low
114.3
115.0
116.5
118.7
145.8
146.1
146.7
147.2
78.5
78.7
79.4
80.7
120.7
75.4
120.3
120.9
137.0
120.3
121.4
74.7
121.2
122.3
136.4
122.9
122.9
77.0
124.0
125.1
137.7
125.3
125.8
83.1
126.8
128.7
162.2
113.4
140.4
139.6
139.7
145.0
162.3
110.6
142.9
142.4
142.8
148.8
163.1
110.0
143.8
143.4
143.9
149.8
163.9
109.4
144.7
144.4
74.7
67.7
84.7
85.4
96.7
81.4
74.8
67.5
84.8
85.9
95.5
82.6
75.4
70.0
86.2
87.2
95.7
83.6
76.8
76.0
87.7
89.2
97.8
98.3
98.7
99.2
121.6
120.3
120.2
120.1
81.2
81.7
82.1
82.7
July'
Aug/
Sept/
Oct.
Latest cycle 2
High
Low
1986
Oct.
1987
Feb.
Mar.
Apr.
May
June
Capacity utilization rate (percent)
15 Total industry
88.6
72.1
86.9
69.5
79.1
79.7
79.7
79.6
79.9
80.3
81.1
81.2
81.0
81.3
16 Mining
17 Utilities
92.8
95.6
87.8
82.9
95.2
88.5
76.9
78.0
73.4
79.2
75.8
78.8
75.5
78.2
75.9
76.8
76.5
79.2
76.6
79.0
76.8
80.2
77.7
81.0
78.4
79.8
78.9
79.6
18 Manufacturing
87.7
69.9
86.5
68.0
79.5
80.0
80.3
80.2
80.4
80.8
81.5
81.4
81.2
81.7
19 Primary p r o c e s s i n g . . . .
20 Advanced processing..
91.9
86.0
68.3
71.1
89.1
85.1
65.1
69.5
81.6
80.1
82.4
79.0
83.1
79.1
83.5
78.7
83.2
79.2
84.0
79.2
85.4
79.8
85.4
79.7
84.9
79.5
85.3
80.2
21 Materials
92.0
70.5
89.1
68.5
77.9
78.7
78.7
79.1
79.3
79.8
80.6
80.8
80.6
80.6
22 Durable goods
23
Metal materials
91.8
99.2
64.4
67.1
89.8
93.6
60.9
45.7
74.2
76.9
74.7
67.8
75.2
68.7
75.0
68.8
75.1
69.7
75.9
71.5
76.5
73.9
76.5
77.3
76.1
77.1
76.5
78.0
24 Nondurable goods . . . .
91.1
66.7
88.1
70.7
84.1
84.6
84.8
86.5
86.2
86.1
88.4
88.5
88.7
88.2
92.8
98.4
92.5
64.8
70.6
64.4
89.4
97.3
87.9
68.8
79.9
63.5
84.7
94.9
81.2
85.4
95.6
82.3
85.8
94.6
82.2
87.5
95.1
83.9
87.1
95.7
83.9
87.1
96.3
83.1
90.0
100.5
85.1
90.4
99.9
86.1
90.5
99.1
86.6
89.9
•>6
11
28 Energy materials
94.6
86.9
94.0
82.3
80.4
81.9
80.8
81.3
82.1
82.8
82.4
83.2
83.0
82.7
25
Textile, paper, and
chemical
1. Monthly high 1973; monthly low 1975.
2. Monthly highs 1978 through 1980; monthly lows 1982.
NOTE. These data also appear in the Board's G.3 (402) release. For address, see
inside front cover.
Selected Measures
2.13
INDUSTRIAL PRODUCTION
I n d e x e s and G r o s s V a l u e
A47
A
Monthly data are seasonally adjusted
1987
1986
1977
Groups
1986
portion
AVG.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July r
Aug.
Sept.''
Oct. e
Index (1977 = 100)
MAJOR MARKET
100.00
125.0
125.3
126.0
126.7
126.5
127.2
127.3
127.4
128.4
129.1
130.6
131.0
130.9
131.7
57.72
44.77
25.52
19.25
12.94
42.28
133.2
132.3
124.5
142.7
136.4
113.9
134.0
132.7
124.7
143.3
138.7
113.3
134.5
133.1
125.6
143.1
139.2
114.3
135.0
133.7
127.2
142.2
139.7
115.2
134.9
133.6
126.8
142.8
139.1
115.2
136.1
135.0
127.5
144.9
139.7
115.1
136.2
135.0
127.5
145.0
140.4
115.2
137.2
134.5
126.6
144.9
139.9
116.2
137.2
135.8
128.2
145.8
142.1
116.3
137.8
136.2
127.2
148.1
143.3
117.2
139.5
137.9
128.9
149.7
145.0
118.5
139.7
138.3
129.2
150.3
144.8
119.0
139.7
138.4
128.4
151.7
144.2
118.8
141.0
139.9
129.9
153.2
144.6
119.0
6.89
2.98
1.79
1.16
.63
1.19
3.91
1.24
1.19
.96
1.71
116.2
115.1
112.9
97.3
141.8
118.4
117.1
139.5
141.6
125.8
96.0
116.3
112.7
107.7
91.9
137.1
120.1
119.0
142.6
144.3
128.8
96.5
118.4
114.6
107.6
92.3
136.0
125.2
121.2
148.1
150.0
131.1
96.3
121.5
117.7
115.6
99.5
145.6
120.8
124.4
153.2
155.1
132.0
99.4
120.0
117.6
117.9
94.3
161.9
117.1
121.9
146.9
148.9
129.1
99.8
122.4
123.5
125.2
105.3
162.1
121.0
121.6
145.2
146.7
130.8
99.3
121.2
121.2
121.6
100.9
159.9
120.5
121.2
142.9
143.8
131.3
99.8
118.1
115.7
111.5
91.8
148.1
121.9
119.9
137.7
139.2
133.5
99.4
120.2
118.0
113.1
91.0
154.2
125.3
121.8
142.2
142.3
133.3
100.7
117.4
114.9
107.9
87.4
146.0
125.4
119.3
133.4
133.4
132.3
101.8
120.4
117.5
112.3
86.4
160.4
125.3
122.5
141.7
142.6
134.1
102.2
120.9
118.0
112.4
76.8
178.4
126.4
123.2
147.1
145.5
130.8
101.6
118.1
114.0
107.2
79.1
122.1
123.4
122.2
94.7
124.I
121.3
141.7
140.5
130.8
101.2
125.3
121.0
141.6
19 Nondurable consumer goods
70
Consumer staples
Consumer foods and tobacco
71
Nonfood staples
77
73
Consumer chemical products
Consumer paper products
74
Consumer energy
75
Consumer fuel
76
Residential utilities
27
18.63
15.29
7.80
7.49
2.75
1.88
2.86
1.44
1.42
127.5
97.0
134.1
131.9
136.5
161.2
147.4
105.7
92.8
127.8
134.4
131.6
137.2
161.7
150.3
105.2
90.8
119.8
128.3
135.0
132.6
137.4
161.0
151.5
105.5
91.7
119.6
129.4
136.0
133.9
138.2
163.1
150.1
106.4
92.2
120.8
129.2
135.9
132.9
139.0
165.9
149.4
106.3
95.0
117.8
129.4
135.9
134.0
137.9
164.7
147.8
105.7
92.5
119.2
129.8
136.5
134.8
138.2
165.7
147.5
105.8
94.1
117.7
129.8
136.4
134.4
138.5
164.7
148.9
106.5
94.5
118.7
131.1
137.7
135.6
139.9
165.9
152.9
106.4
92.1
121.0
130.9
137.6
136.0
139.2
164.4
153.1
105.9
91.9
120.2
132.1
138.9
137.2
140.6
165.7
153.8
108.0
92.7
123.6
132.3
139.2
137.3
141.2
167.1
153.7
108.2
91.4
125.3
132.3
139.3
138.0
140.7
166.3
153.9
107.4
91.5
132.8
139.9
Equipment
78 Business and defense equipment
79
Business equipment
Construction, mining, and farm
30
31
Manufacturing
37
Power
33
Commercial
34
35
Defense and space equipment
18.01
14.34
2.08
3.27
1.27
5.22
2.49
3.67
147.1
138.6
59.8
112.0
81.6
214.6
109.2
180.3
148.4
139.1
58.0
112.7
80.5
215.4
111.8
184.6
148.1
138.6
56.6
109.6
79.5
217.3
110.7
184.9
147.0
137.1
58.2
108.8
80.2
213.7
108.9
185.8
147.7
138.1
57.2
110.1
79.6
215.9
109.5
185.2
150.1
140.8
56.8
111.5
81.2
218.4
117.4
186.5
150.1
140.8
58.1
110.9
81.7
219.7
114.0
186.6
150.0
140.8
58.6
111.1
82.4
220.9
110.4
186.1
150.8
141.7
61.2
111.5
84.0
222.0
110.1
186.5
153.2
144.2
63.0
117.2
84.0
226.7
105.4
188.6
154.4
145.6
65.0
120.4
81.8
227.9
106.1
188.7
154.6
145.5
66.0
120.9
83.3
227.4
104.5
190.1
155.7
146.6
66.2
120.9
82.8
230.0
105.2
191.3
157.3
148.4
66.4
121.7
83.3
230.9
112.7
192.1
5.95
6.99
5.67
1.31
124.7
146.4
150.6
128.3
126.3
149.3
154.1
128.8
126.8
149.7
153.7
132.4
127.9
149.8
154.3
130.3
128.3
148.3
153.3
126.8
128.4
149.4
154.1
128.8
128.5
150.5
155.2
130.3
127.3
150.5
155.5
129.0
128.3
153.8
158.2
135.0
131.5
153.4
158.5
131.1
133.1
155.2
160.5
132.3
132.2
155.5
160.3
135.0
132.4
154.2
159.3
132.0
132.4
20.50
4.92
5.94
9.64
4.64
119.7
98.5
153.9
109.4
80.0
119.2
97.0
153.5
109.4
78.8
120.4
98.0
154.5
110.7
82.1
120.7
98.8
154.2
111.2
80.3
120.5
99.0
154.0
110.8
79.2
121.5
100.0
155.6
111.5
80.3
121.8
98.9
155.8
112.6
80.8
122.2
96.2
157.1
114.1
81.8
121.6
95.2
156.0
113.9
81.9
124.0
99.2
158.3
115.5
83.6
125.2
98.5
159.3
117.7
86.6
125.3
99.3
159.4
117.7
90.2
125.0
98.8
159.3
117.2
89.8
125.8
99.3
160.4
118.0
10.09
118.3
120.3
120.2
123.2
123.2
122.5
122.8
125.4
125.3
124.1
127.6
128.1
128.7
128.1
7.53
1.52
1.55
4.46
2.57
118.9
110.6
132.1
117.1
116.5
121.3
114.3
133.5
119.5
117.5
121.0
115.6
134.2
118.5
117.6
124.7
116.1
140.2
122.3
118.5
125.0
116.5
137.9
123.4
118.0
123.6
115.8
136.7
121.8
119.0
124.0
118.5
134.7
122.1
119.2
126.9
125.0
137.4
125.0
121.1
126.5
129.6
117.8
145.4
128.1
122.0
130.4
117.0
145.0
130.0
121.1
131.0
117.8
144.2
130.9
130.4
137.4
125.0
122.0
125.1
111.9
139.0
124.9
120.9
11.69
7.57
4.12
99.9
105.5
89.6
96.9
102.7
86.2
98.7
104.8
87.6
98.8
105.1
87.3
98.9
104.1
89.4
97.6
102.6
88.5
97.0
101.5
88.9
97.5
102.3
88.7
99.3
103.6
91.4
99.4
104.0
91.0
99.0
102.5
92.5
99.9
103.8
92.8
99.6
103.7
92.2
99.3
1
Total index
Products
Final products
Consumer goods
4
Equipment
Intermediate products
6
7 Materials
7
Consumer
goods
8 Durable consumer goods
9
Automotive products
10
Autos and trucks
11
Autos, consumer
Trucks, consumer
1?
13
Auto parts and allied goods
14
Home goods
15
Appliances, A/C and TV
Appliances and TV
16
17
Carpeting and furniture
Miscellaneous home goods
18
Intermediate
products
36 Construction supplies
37 Business supplies
38
General business supplies
39
Commercial energy products
Materials
40 Durable goods materials
41
Durable consumer parts
47
Equipment parts
43
Durable materials n.e.c
44
Basic metal materials
45 Nondurable goods materials
46
Textile, paper, and chemical
47
48
49
50
Textile materials
Pulp and paper materials
Chemical materials
Miscellaneous nondurable materials . . .
51 Energy materials
57
Primary energy
Converted fuel materials
53
141.2
A48
2.13
Domestic Nonfinancial Statistics • January 1988
I N D U S T R I A L P R O D U C T I O N I n d e x e s and G r o s s V a l u e — C o n t i n u e d
Groups
SIC
code
1977
proportion
1987
1986
avg.
Oct.
Nov.
Dec
Jan.
Feb.
Mar.
Apr.
May
June
July'
Aug.
Sept. p
Oct.
Index (1977 = 100)
MAJOR INDUSTRY
15.79
9.83
5.96
84.21
35.11
49.10
103.4
99.6
109.6
129.1
130.9
127.9
100.9
%.2
108.6
129.7
131.2
128.6
102.0
97.5
109.6
130.1
131.7
129.0
101.6
97.1
109.0
131.3
133.4
129.7
102.6
99.4
108.0
130.7
132.7
129.3
102.4
98.8
108.5
131.6
132.9
130.8
101.9
98.3
107.9
132.4
133.7
131.5
101.4
98.6
106.0
132.4
134.6
130.9
103.1
99.2
109.6
133.2
135.7
131.4
103.0
99.2
109.4
134.0
136.9
132.0
103.7
99.2
111.2
135.6
138.5
133.5
104.9
100.3
112.5
135.7
138.6
133.7
10
11.12
13
14
.50
1.60
7.07
.66
124.2
94.7
113.9
70.9
123.6
89.2
123.9
71.1
129.8
89.6
123.2
76.2
125.4
89.8
122.5
74.1
136.4
91.2
116.1
73.6
131.7
90.9
122.1
71.2
122.3
92.4
123.8
65.7
121.9
93.1
125.4
71.7
127.2
92.1
127.6
70.7
128.8
91.8
128.5
71.4
127.9
91.8
130.7
79.2
130.5
92.2
130.0
133.3
92.5
129.6
1 Mining and utilities
2
Mining
3
Utilities
4 Manufacturing
5
Nondurable
6
Durable
104.8
101.0
111.0
135.7
138.6
133.6
105.0
101.5
110.8
136.8
139.0
135.3
7
8
9
10
Mining
Metal
Coal
Oil and gas extraction
Stone and earth minerals
11
12
13
14
15
Nondurable
manufactures
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
20
21
22
23
26
7.%
.62
2.29
2.79
3.15
133.6
%.6
113.2
103.6
136.4
133.7
98.2
110.2
103.9
138.8
135.3
%.4
112.2
103.8
139.6
136.7
93.4
113.4
104.9
141.1
134.6
89.9
109.2
106.1
139.7
136.4
99.9
110.8
106.5
139.9
137.3
101.1
112.6
105.4
139.9
136.0
99.6
116.6
105.3
140.5
137.4
106.6
115.7
106.4
141.3
137.7
107.0
117.2
107.7
142.6
138.5
138.8
139.4
118.3
109.7
148.8
119.5
107.8
148.9
119.3
16
17
18
19
20
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastic products
Leather and products
27
28
29
30
31
4.54
8.05
2.40
2.80
.53
163.4
133.0
92.1
153.3
61.3
164.4
133.3
92.4
154.2
59.4
164.8
132.3
92.5
155.2
61.0
166.4
135.7
93.5
157.1
60.2
166.3
136.4
95.6
155.3
58.9
164.4
135.7
91.6
156.2
59.8
167.6
135.3
92.1
158.6
59.4
169.2
137.3
94.0
160.5
60.2
171.4
138.1
92.6
162.2
61.4
174.1
139.3
92.3
165.4
60.8
174.0
140.8
94.1
167.2
59.2
174.1
142.0
93.1
165.6
61.3
173.9
142.4
93.4
164.2
60.2
24
25
32
2.30
1.27
2.72
123.4
146.7
120.2
124.6
145.4
117.3
130.3
145.6
118.7
133.5
148.8
119.4
128.5
143.5
121.9
129.6
145.0
118.8
128.9
149.9
119.8
127.8
148.2
120.6
130.3
150.5
117.2
131.1
153.9
117.9
132.8
156.2
118.8
131.1
153.1
116.7
130.9
153.3
116.6
33
331.2
34
35
36
5.33
3.49
6.46
9.54
7.15
75.8
63.4
107.4
141.9
166.5
73.1
61.0
108.9
145.0
167.3
75.5
63.5
108.3
144.5
167.9
73.4
61.3
109.6
144.8
170.4
72.8
59.5
108.4
143.4
170.4
75.1
62.3
108.3
145.5
171.0
77.0
65.4
110.5
148.5
168.5
76.1
65.0
109.9
150.4
168.4
77.0
65.7
108.5
149.7
171.1
78.8
68.3
81.4
70.9
85.1
155.3
172.5
110.1
156.4
173.5
111.1
151.8
170.5
84.8
75.5
109.9
154.1
174.0
84.5
111.1 111.1
37
371
9.13
5.25
125.8
110.9
127.6
110.3
126.9
109.1
126.8
109.7
129.0
112.0
132.7
117.7
132.2
116.5
127.8
109.8
129.4
112.0
126.5
107.4
127.6
109.4
128.0
109.1
125.8
105.8
132.0
115.7
72-6.9
38
39
3.87
2.66
1.46
146.1
141.3
99.3
151.2
139.1
100.0
151.1
139.3
100.9
150.1
140.2
103.8
151.9
139.5
101.6
153.0
142.0
101.6
153.4
140.3
103.9
152.3
142.8
101.4
153.1
142.1
101.9
152.4
144.5
101.2
152.3
143.8
100.5
153.7
146.1
100.4
153.0
144.8
100.5
154.1
146.2
4.17
122.2
124.0
124.4
122.6
121.6
122.3
123.6
122.3
128.8
128.8
131.0
132.6
130.1
Durable
manufactures
21 Lumber and products
22 Furniture and fixtures
23 Clay, glass, stone products
24
25
26
27
28
Primary metals
Iron and steel
Fabricated metal products
Nonelectrical machinery
Electrical machinery
29 Transportation equipment
30
Motor vehicles and parts
31
Aerospace and miscellaneous
transportation equipment . .
32 Instruments
33 Miscellaneous manufactures
Utilities
34 Electric
136.0
92.5
148.0
174.0
93.9
157.3
173.6
Gross value (billions of 1982 dollars, annual rates)
MAJOR MARKET
1,702.2 1,687.3 1,686.7 1,700.7 1,701.6 1,718.7 1.725.2 1,710.0 1,723.0 1,720.4 1.732.5 1,739.2 1,737.2 1,767.4
35 Products, total.
517.5
36 Final
37
Consumer goods.
38
Equipment
39 Intermediate
405.7 1,314.5
272.7
853.8
133.0
458.2
111.9
387.6
1,2%.9 1,2%.6 1,307.3
843.5
453.4
390.3
846.5
450.0
390.2
• A major revision of the industrial production index and the capacity
utilization rates was released in July 1985. See "A Revision of the Index of
Industrial Production" and accompanying tables that contain revised indexes
( 1 9 7 7 = 1 0 0 ) t h r o u g h D e c e m b e r 1 9 8 4 in t h e FEDERAL RESERVE B U L L E T I N , v o l . 7 1
857.1
450.2
393.4
1,310.9 1,329.2 1.330.3 1,316.5 1,324.7 1,320.1 1.326.6 1,333.9 1,334.4 1,360.7
860.0 865.3 868.1 857.1
862.8
855.1 863.2 865.6 860.1
876.1
450.9 463.9 462.2 459.4 461.9 465.0 463.5 468.3 474.3 484.7
390.7 389.5
394.9 393.6 398.4 400.3 405.9 405.3 402.8 406.6
(July 1985), pp. 487-501. The revised indexes for January through June 1985 were
shown in the September BULLETIN.
NOTE. These data also appear in the Board's G.12.3 (414) release. For address,
see inside front cover.
Selected Measures
A49
2.14 HOUSING AND CONSTRUCTION
Monthly figures are at seasonally adjusted annual rates except as noted.
1986
1984
Item
1985
1987
1986
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July'
Aug.'
Sept.
Private residential real estate activity (thousands of units)
N E W UNITS
1
Permits authorized
7
1-family
2-or-more-family
3
1,682
922
759
1,733
957
777
1,750
1,071
679
1,862
1,184
678
1,652
1,085
567
1,676
1,204
472
1,719
1,150
569
1,598
1,058
540
1,493
1,009
484
1,517
1,039
478
1,487
993
494
1,502
1,023
479
1,502
992
510
4 Started
5
1-family
6
2-or-more-family
1,749
1,084
665
1,742
1,072
669
1,805
1,179
626
1,813
1,233
580
1,816
1,253
563
1,838
1,303
535
1,730
1,211
519
1,643
1,208
435
1,606
1,130
476
1,586
1,088
498
1,598
1,143
455
1,585
1,111
474
1,648
1,186
462
7 Under construction, end of period 1 .
8
1-family
9
2-or-more-family
1,051
556
494
1,063
539
524
1,074
583
490
1,104
610
494
1,089
609
480
1,096
621
476
1,085
618
467
1,070
623
446
1,061
621
441
1,059
620
439
1,053
623
430
1,050
626
424
1,057
635
422
1,652
1,025
627
1,703
1,072
631
1,756
1,120
637
1,894
1,184
710
1,956
1,217
739
1,726
1,107
619
1,689
1,141
548
1,830
1,148
682
1,621
1,158
463
1,601
1,101
500
1,698
1,120
578
1,665
1,064
601
1,540
1,073
467
13 Mobile homes shipped
296
284
244
251
242
231
228
227
222
231
245
233
244
Merchant builder activity in
1-family units
14 Number sold
15 Number for sale, end of period
639
358
688
350
748
361
768
357
712
358
740
358
720
358
733
359
649
355
641
359
675
358
692
360
656
359
10 Completed
11
1-family
12
2-or-more-family
16
Price (thousands
Median
Units sold
17
Units sold
of
dollars)2
80.0
84.3
92.2
95.0
98.5
95.2
98.4
96.5
104.9
109.0
104.0
106.5
115.6
97.5
101.0
112.2
118.9
122.1
121.3
119.5
118.1
126.6
135.8
128.7
129.6
139.8
2,868
3,217
3,566
4,060
3,480
3,690
3,680
3,560
3,770
3,500
3,430
3,410
3,450
72.3
85.9
75.4
90.6
80.3
98.3
80.8
100.6
82.1
100.1
85.0
104.3
85.6
104.9
85.0
105.0
85.2
106.3
85.2
106.0
86.2
107.6
85.1
105.3
85.1
106.2
EXISTING U N I T S ( 1 - f a m i l y )
18 Number sold
Price of units sold (thousands of dollars)
19 Median
20 Average
Value of new construction 3 (millions of dollars)
CONSTRUCTION
21 Total put in place
328,643
355,995
388,815
380,175
384,716
401,644
388,303
396,222
396,680
397,191' 399,674
400,067
406,337
22 Private
23
Residential
24
Nonresidential, total
Buildings
Industrial
7S
76
Commercial
77
Other
Public utilities and other
28
270,978
153,849
117,129
291,665
158,475
133,190
316,589
187,147
129,442
306,826
181,682
125,144
310,170
187,813
122,357
326,453
203,115
123,338
312,203
190,812
121,391
320,483
199,523
120,960
321,414
195,871
125,543
324,256' 324,954
200,864 198,063
123,392' 126,891
328,180
199,440
128,740
329,711
200,733
128,978
13,746
39,357
12,547
51,479
15,769
51,315
12,619
53,487
13,747
48,592
13,216
53,887
13,207
54,809
14,231
42,897
12,094
50,881
14,755
44,627
12,112
53,071
14,776
43,379
11,354
52,285
15,143
42,609
11,492
50,924
14,950
43,594
13,376
53,224
14,926
44,017
13,023'
51,831'
14,769'
43,769'
12,953
52,768
15,338
45,832
13,568
53,404
14,875
46,893
13,790
53,493
15,586
46,109
57,662
2,839
18,772
4,654
31,397
64,326
3,283
21,756
4,746
34,541
72,225
3,919
23,360
4,668
40,278
73,348
4,313
21,935
4,954
42,146
74,546
4,100
23,508
5,155
41,783
75,191
2,806
23,260
4,883
44,242
76,100
3,893
23,575
4,792
43,840
75,739
3,403
22,673
5,551
44,112
75,266
4,397
22,607
4,839
43,423
72,917'
4,352
21,704
5,498
41,363'
74,720
4,316
23,167
5,295
41,942
71,887
3,961
21,132
5,096
41,698
76,626
4,030
23,800
4,866
43,930
29 Public
30
Military
31
Highway
32
Conservation and d e v e l o p m e n t . . .
Other
33
1. Not at annual rates.
2. Not seasonally adjusted.
3. Value of new construction data in recent periods may not be strictly
comparable with data in prior periods because of changes by the Bureau of the
Census in its estimating techniques. For a description of these changes see
Construction Reports ( C - 3 0 - 7 6 - 5 ) , issued by the Bureau in July 1976.
NOTE. Census Bureau estimates for all series except (1) mobile homes, which
are private, domestic shipments as reported by the Manufactured Housing
Institute and seasonally adjusted by the Census Bureau, and (2) sales and prices
of existing units, which are published by the National Association of Realtors. All
back and current figures are available from the originating agency. Permit
authorizations are those reported to the Census Bureau from 16,000 jurisdictions
beginning with 1978.
A50
Domestic Nonfinancial Statistics • January 1988
2.15 CONSUMER AND PRODUCER PRICES
Percentage changes based on seasonally adjusted data, except as noted
Change from 12
months earlier
Item
Change from 3 months earlier
(at annual rate)
1986
1986
Oct.
1987
Index
level
Oct.
1987
(1967
= 100) 1
1987
1987
Oct.
Dec.
C O N S U M E R PRICES
Change from 1 month earlier
Mar.
June'
Sept/
June'
July'
Aug.
Sept.
Oct
2
1 All items
2
3 Energy items
4 All items less food and energy
Commodities
6
Services
1.5
4.5
2.5
6.2
4.6
3.6
.4
.2
.5
.2
.4
345.3
4.5
-18.4
4.0
1.3
5.5
3.6
8.1
4.4
3.8
4.7
4.1
-9.9
3.7
1.4
5.1
2.5
26.1
5.2
5.1
5.3
6.5
7.9
4.0
3.8
3.8
1.4
5.0
3.7
3.0
4.2
.7
1.5
.2
.0
.2
-.2
.1
.3
.3
.4
.0
1.7
.4
.1
.5
.5
-.5
.2
.3
.1
.4
-.9
.5
.5
.5
335.3
376.7
346.1
275.6
422.6
-1.4
5.7
-36.9
3.0
2.1
2.6
.2
13.8
2.5
1.5
1.8
1.0
-12.5
4.4
3.4
4.3
-6.7
59.8
4.2
.4
3.9
12.7
5.5
-.2
1.2
2.7
-1.7
2.0
4.9
4.4
.2
.1
1.5
.1
-.1
.4
-.2
2.7
.3
.2
.0
-1.3
1.5
.3
.2
.3
1.1
-3.7
.6
.7
-.2
-.1
-1.0
.0
-.4
298.2
284.1
514.5
269.1
314.7
-4.2
.1
5.0
4.3
-1.2
1.2
7.8
3.3
5.7
4.6
4.6
5.0
.6
.5
.7
.5
.5
.3
.0
.5
.5
.9
325.9
317.8
4.6
-28.1
-1.7
1.1
13.2
23.9
-2.7
-.5
8.5
-10.3
50.0
15.9
34.8
11.4
31.9
-6.2
6.1
37.1
-1.4
1.5
3.9
-2.2
3.8
3.2
.1
.5
1.0
.5
-2.7
3.8
1.3
-1.7
4.1
237.7
604.9
300.1
PRODUCER PRICES
7 Finished goods
8
Consumer foods
9
Consumer energy
Other consumer goods
10
11
Capital equipment
12 Intermediate materials 3
13
Excluding energy
14
15
16
Crude materials
Foods
Energy
Other
1. Not seasonally adjusted.
2. Figures for consumer prices are those for all urban consumers and reflect a
rental equivalence measure of homeownership after 1982.
3. Excludes intermediate materials for food manufacturing and manufactured
animal feeds.
SOURCE. Bureau of Labor Statistics.
Selected Measures
A51
2.16 GROSS NATIONAL PRODUCT AND INCOME
Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates.
1986
Account
1984
1985
1987
1986
Q3
Q4
QL
Q2
Q3R
GROSS N A T I O N A L P R O D U C T
1
Total
3,772.2
4,010.3
4,235.0
4,265.9
4,288.1
4,377.7
4,445.1
4,520.5
2
3
4
5
By source
Personal consumption expenditures
Durable goods
Nondurable goods
Services
2,430.5
335.5
867.3
1,227.6
2,629.4
368.7
913.1
1,347.5
2,799.8
402.4
939.4
1,458.0
2,837.1
427.6
940.0
1,469.5
2,858.6
419.8
946.3
1,492.4
2,893.8
396.1
969.9
1,527.7
2,943.7
409.0
982.1
1,552.6
3,006.7
434.8
987.2
1,584.7
664.8
597.1
416.0
141.1
274.9
181.1
641.6
631.6
442.6
152.5
290.1
189.0
671.0
655.2
436.9
137.4
299.5
218.3
660.8
657.3
433.5
131.1
302.4
223.8
660.2
666.6
439.7
132.9
306.7
226.9
699.9
648.2
422.8
128.7
294.1
225.4
702.6
662.3
434.6
129.7
304.9
227.7
707.4
684.9
456.8
136.6
320.2
228.1
67.7
60.5
10.0
13.6
15.7
16.8
3.5
-.9
-6.4
5.1
51.6
48.7
40.3
27.3
22.5
8.6
-58.9
383.5
442.4
-79.2
369.9
449.2
-105.5
376.2
481.7
-110.5
376.6
487.1
-116.9
383.3
500.2
-112.2
397.3
509.5
-118.4
416.5
534.8
-119.8
434.6
554.4
735.9
310.5
425.3
818.6
353.9
464.7
869.7
366.2
503.5
878.5
371.2
507.3
886.3
368.6
517.7
896.2
366.9
529.3
917.1
379.6
537.6
926.1
378.8
547.3
3,704.5
1,581.3
681.5
899.9
1,813.9
376.9
4,000.3
1,637.9
704.3
933.6
1,969.2
403.1
4,219.3
1,693.8
726.8
967.0
2,116.2
425.0
4,262.4
1,703.6
735.8
967.8
2,136.6
425.7
4,294.6
1,698.9
737.3
961.6
2,160.0
429.3
4,326.0
1,738.7
747.0
991.7
2,212.0
426.9
4,404.8
1,763.5
756.7
1,006.8
2,252.2
429.4
4,497.9
1,794.9
780.6
1,014.3
2,289.7
435.8
67.7
40.2
27.5
10.0
7.3
2.7
15.7
4.8
10.9
3.5
-12.1
15.6
-6.4
-4.5
-1.9
51.6
35.2
16.5
40.3
22.1
18.2
22.5
-3.0
25.6
3,501.4
3,607.5
3,713.3
3,718.0
3,731.5
3,772.2
3,795.3
3,833.4
6
7
8
9
10
11
12
13
Gross private domestic investment
Fixed investment
Nonresidential
Structures
Producers' durable equipment
Residential structures
Change in business inventories
Nonfarm
14
15
16
Net exports of goods and services
Exports
Imports
17
18
19
Government purchases of goods and services
Federal
State and local
23
24
25
By major type of
Final sales, total
Goods
Durable
Nondurable
Services
Structures
26
27
28
Change in business inventories
Durable goods
Nondurable goods
70
71
??
product
29 MEMO
Total GNP in 1982 dollars
N A T I O N A L INCOME
30
31
32
33
34
35
36
37
Compensation of employees
Wages and salaries
Government and government enterprises
Other
Supplement to wages and salaries
Employer contributions for social insurance
Other labor income
38
39
40
Proprietors' income 1
Business and professional
Farm 1
41
Rental income of persons 2
1
3,028.6
3,229.9
3,422.0
3,438.7
3,471.0
3,548.3
3,593.3
3,654.2
2,213.9
1,838.8
346.1
1,492.5
375.1
192.2
182.9
2,370.8
1,974.7
372.3
1,602.6
396.1
203.8
192.3
2,504.9
2,089.1
394.8
1,694.3
415.8
214.7
201.1
2,515.1
2,097.9
397.7
1,700.2
417.2
214.9
202.3
2,552.0
2,128.5
403.8
1,724.7
423.5
219.1
204.4
2,589.9
2,163.3
412.2
1,751.1
426.6
220.0
206.7
2,623.4
2,191.4
418.1
1,773.3
432.0
222.5
209.5
2,663.8
2,226.8
424.2
1,802.6
437.0
225.9
211.1
234.5
204.0
30.5
257.3
227.6
29.7
289.8
252.6
37.2
292.5
256.2
36.3
297.8
261.2
36.6
320.9
269.7
51.3
323.1
275.8
47.3
321.4
282.1
39.3
8.5
9.0
16.7
17.2
18.4
20.0
18.9
17.3
277.6
224.8
-.7
53.5
284.4
231.9
6.5
46.0
286.4
236.3
6.0
44.0
281.1
247.9
-8.9
42.1
294.0
257.0
-11.3
48.2
296.8
268.7
-20.0
48.0
313.7
282.1
-16.1
47.7
315.3
326.1
327.5
321.7
323.6
331.1
338.0
42
43
44
45
Corporate profits
Profits before tax 3
Inventory valuation adjustment
Capital consumption adjustment
266.9
240.0
-5.8
32.7
46
Net interest
304.8
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. Survey of Current Business (Department of Commerce).
A52
Domestic Nonfinancial Statistics • January 1988
2.17 PERSONAL INCOME AND SAVING
Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted.
1987
1986
Account
1984
1985
1986
Q3
Q4
Ql
Q2
Q3 r
P E R S O N A L INCOME A N D S A V I N G
1 Total personal income
3,108.7
3,327.0
3,534.3
3,553.6
3,593.6
3,662.0
3,708.6
3,756.7
2 Wage and salary disbursements
3
Commodity-producing industries
4
Manufacturing
5
Distributive industries
6
Service industries
7
Government and government enterprises
1,838.6
577.6
439.1
442.8
472.1
346.1
1,974.9
609.2
460.9
473.0
520.4
372.3
2,089.1
623.3
470.5
497.1
573.9
394.8
2,097.9
622.8
470.0
498.6
578.8
397.7
2,128.5
628.4
474.5
504.7
591.6
403.8
2,163.3
632.9
477.2
511.5
606.7
412.2
2,191.4
635.0
479.0
518.9
619.3
418.1
2,226.6
641.5
484.9
526.6
634.3
424.2
182.9
234.5
204.0
30.5
8.5
75.5
444.7
456.6
235.7
192.3
257.3
227.6
29.7
9.0
76.3
476.5
489.7
253.4
201.1
289.8
252.6
37.2
16.7
81.2
497.6
518.3
269.2
202.3
292.5
256.2
36.3
17.2
82.1
498.1
523.6
272.4
204.4
297.8
261.2
36.6
18.4
82.9
496.8
526.6
273.5
206.7
320.9
269.7
51.3
20.0
84.5
499.8
533.7
278.0
209.5
323.1
275.8
47.3
18.9
86.3
506.3
541.5
282.3
211.1
321.4
282.1
39.3
17.3
88.7
516.6
545.7
284.4
8
9
10
11
12
13
14
15
16
17
Other labor income
Proprietors' income
Business and professional 1
Farm 1
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
132.7
148.9
159.6
160.1
161.8
166.7
168.4
170.7
3,108.7
3,327.0
3,534.3
3,553.6
3,593.6
3,662.0
3,708.6
3,756.7
440.2
485.9
512.2
515.3
532.0
536.1
578.0
565.6
20 EQUALS: Disposable personal income
2,668.6
2,841.1
3,022.1
3,038.2
3,061.6
3,125.9
3,130.6
3,191.1
21
LESS: Personal outlays
2,504.5
2,714.1
2,891.5
2,929.4
2,952.6
2,987.5
3,037.4
3,102.1
22 EQUALS: Personal saving
164.1
127.1
130.6
108.9
109.0
138.4
93.2
89.0
14,770.6
9,488.6
10,419.0
6.1
15,073.7
9,830.2
10,622.0
4.5
15,368.3
10,141.9
10,947.0
4.3
15,369.9
10,241.8
10,968.0
3.6
15,387.6
10,228.8
10,956.0
3.6
15,523.4
10,188.9
11,008.0
4.4
15,586.4
10,215.6
10,865.0
3.0
15,704.2
10,312.1
10,945.0
2.8
27 Gross saving
568.5
531.3
532.0
516.2
515.3
554.3
551.3
558.6
28
29
30
31
673.5
164.1
94.0
-5.8
664.2
127.1
99.6
-.7
679.8
130.6
92.6
6.5
660.4
108.9
92.6
6.0
653.4
109.0
78.5
-8.9
683.8
138.4
75.6
-11.3
639.9
93.2
70.1
-20.0
650.1
89.0
77.9
-16.1
254.5
160.9
269.1
168.5
282.8
173.8
284.3
174.6
289.3
176.6
291.8
178.0
294.5
182.1
297.8
185.3
-132.9
-196.0
63.1
-147.8
-204.7
56.8
-144.1
-203.7
59.6
-138.1
-188.7
50.6
-129.5
-170.5
41.0
-88.6
-139.2
50.6
-91.5
-137.2
45.7
19
LESS: Personal tax and nontax payments
MEMO
Per capita (1982 dollars)
23
Gross national product
24
Personal consumption expenditures
25
Disposable personal income
26 Saving rate (percent)
GROSS S A V I N G
Gross private saving
Personal saving
Undistributed corporate profits
Corporate inventory valuation adjustment
Capital consumption
32 Corporate
33 Noncorporate
allowances
34
Government surplus, or deficit ( - ) , national income and
36
State and local
-105.0
-169.6
64.6
37 Gross investment
573.9
525.7
527.1
510.1
503.7
552.1
548.1
547.6
664.8
-90.9
641.6
-115.9
671.0
-143.9
660.8
-150.7
660.2
-156.5
699.9
-147.7
702.6
-154.5
707.4
-159.8
5.4
-5.6
-4.9
-6.1
-11.6
-2.2
-3.1
-11.1
38 Gross private domestic
39 Net foreign
40 Statistical discripancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
SOURCE. Survey of Current Business
(Department of Commerce).
Summary Statistics
3.10
U.S. INTERNATIONAL TRANSACTIONS
A53
Summary
Millions of dollars; quarterly data are seasonally adjusted except as noted. 1
1986
Item credits or debits
1985
1984
9
10
Merchandise trade balance 2
Merchandise exports
Merchandise imports
Military transactions, net
Investment income, net
Other service transactions, net
Remittances, pensions, and other transfers
U.S. government grants (excluding military)
11 Change in U.S. government assets, other than official
reserve assets, net (increase, - )
Q3
Q4
Q1
Q2P
-116,394
-141,352
-33,755
-34,634
-36,583
-40,230
-37,977
-36,398
-36,784
-33,435
-41,097
-41,956
-112,522
219,900
-332,422
-1,942
18,490
1,138
-122,148
215,935
-338,083
-3,338
25,398
-1,005
-144,339
224,361
-368,700
-3,662
20,844
1,463
-33,651
56,928
-90,579
-1,054
4,587
530
-37,115
56,534
-93,649
-815
5,339
342
-38,595
57,021
-95,616
-495
4,492
759
-38,757
56,992
-95,749
-37
5,500
-387
-39,525
59,975
-99,500
111
1,608
-387
-3,637
-8,541
-4,079
-11,222
-3,885
-11,772
-918
-3,249
-875
-3,459
-1,151
-2,987
-1,017
-2,086
-913
-1,991
1 Balance on current account
2
Not seasonally adjusted
3
4
5
6
7
8
Q2
-5,476
-2,831
-1,920
-242
15
225
-182
12 Change in U.S. official reserve assets (increase, - )
13
Gold
14
Special drawing rights (SDRs)
15
Reserve position in International Monetary Fund
16
Foreign currencies
-3,130
-3,858
312
16
280
132
1,956
3,419
-979
-995
-1,156
-897
908
-3,869
-246
1,500
-942
-104
366
-246
163
508
-391
-31
283
-120
76
606
1,274
-171
335
3,255
17 Change in U.S. private assets abroad (increase, - ) 3
18
Bank-reported claims
19
Nonbank-reported claims
20
U.S. purchase of foreign securities, net
21
U.S. direct investments abroad, net 3
-13,685
-11,127
5,019
-4,756
-2,821
-24,711
-1,323
1,361
-7,481
-17,268
-94,374
-59,039
-3,986
-3,302
-28,047
-25,303
-14,734
-1,894
-1,149
-7,526
-23,304
-18,878
685
620
-5,731
-32,351
-31,800
170
3,113
-3,834
13,352
25,686
-1,163
-1,345
-9,826
-24,747
-20,195
23
24
25
26
27
22 Change in foreign official assets in the United States
(increase, + )
U.S. Treasury securities
Other U.S. government obligations
Other U.S. government liabilities
Other U.S. liabilities reported by U.S. banks
Other foreign official assets
2,987
4,690
13
586
555
-2,857
-1,140
-838
-301
823
645
-1,469
34,698
34,515
-1,214
1,723
554
15,568
14,538
-644
925
1,280
-531
15,551
12,167
-276
999
2,963
-302
1,003
4,572
-117
-607
-2,435
-410
13,953
12,145
-1,381
3,611
-360
9,389
11,082
256
-1,501
-135
-313
28 Change in foreign private assets in the United States
(increase, +) 3
29
U.S. bank-reported liabilities
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 the United States, net3
99,481
33,849
4,704
23,001
12,568
25,359
131,012
41,045
-450
20,433
50,962
19,022
178,689
77,350
-2,791
8,275
70,802
25,053
33,475
3,899
-1,553
3,705
22,888
4,536
54,040
30,360
57,428
34,604
1,035
-3,074
12,269
12,594
12,802
-13,614
1,761
-1,570
18,499
7,726
34 Allocation of SDRs
35 Discrepancy
36
Owing to seasonal adjustments
37
Statistical discrepancy in recorded data before seasonal
adjustment
0
0
0
0
0
-80
609
17,074
6,077
0
0
- 6 2
0
93"
-4,645
35,661
15,150
'-2,562
15,858
7,215
0
0
0
0
0
0
0
0
26,837
17,920
23,947
10,241
-2,044
-8,530
-4,153
11,750
3,904
-5,504
2,652
17,557
-1,987
26,837
23,947
-4,377
MEMO
Changes in official assets
U.S. official reserve assets (increase, - )
Foreign official assets in the United States (increase, +)
excluding line 25
40 Change in Organization of Petroleum Exporting Countries
official assets in the United States (part of line 22
above)
41 Transfers under military grant programs (excluded from
lines 4, 6, and 10 above)
38
39
-3,130
-3,858
312
16
280
132
1,956
3,419
2,401
-1,963
32,975
14,643
14,552
1,610
15,334
10,890
-4,504
-6,709
-8,508
-2,166
-3,023
-5,195
-2,626
153
46
101
11
19
53
26
1. Seasonal factors are not calculated for lines 6. 10, 12-16, 18-20, 22-34, and
38-41.
2. Data are on an international accounts (IA) basis. Differs from the Census
basis data, shown in table 3.11, for reasons of coverage and timing. Military
exports are excluded from merchandise data and are included in line 6.
3. Includes reinvested earnings.
4. Primarily associated with military sales contracts and other transactions
arranged with or through foreign official agencies.
5. Consists of investments in U.S. corporate stocks and in debt securities of
private corporations and state and local governments.
NOTE. Data are from Bureau of Economic Analysis, Survey of Current Business
(Department of Commerce).
A54
International Statistics • January 1988
3.11 U.S. FOREIGN TRADE1
Millions of dollars; monthly data are not seasonally adjusted.
1987
Item
1
EXPORTS of domestic and foreign
merchandise excluding grant-aid
shipments, f.a.s. value
2
G E N E R A L IMPORTS including
merchandise for immediate
consumption plus entries into
bonded warehouses, c.i.f. value . . . .
3
Trade balance
1984
223,976
1985
218,815
1986
226,808
Mar.
Apr.
May
June
July
Aug.
Sept.
21,776
20,496
20,784
21,126
21,008
20,222
20,986
346,364
352,463
382,964
34,694
33,459
34,822
36,838
37,483
35,905
35,062
-122,389
-133,648
-156,156
-12,918
-12,963
-14,039
-15,711
-16,475
-15,683
-14,076
1. The Census basis data differ from merchandise trade data shown in table
3.10, U.S. International Transactions Summary, for reasons of coverage and
timing. On the export side, the largest adjustment is the exclusion of military sales
(which are combined with other military transactions and reported separately in
the "service account" in table 3.10, line 6). On the import side, additions are made
for gold, ship purchases, imports of electricity from Canada, and other transac-
tions; military payments are excluded and shown separately as indicated above.
As of Jan. 1, 1987 census data are released 45 days after the end of the month.
Total exports and the trade balance reflect adjustments for undocumented exports
to Canada.
SOURCE. FT900 "Summary of U . S . Export and Import Merchandise Trade"
(Department of Commerce, Bureau of the Census).
3.12 U.S. RESERVE ASSETS
Millions of dollars, end of period
1987
Type
1984
1985
1986
Apr.
May
June
July
Aug.
Sept.
Oct."
1
Total
34,934
43,186
48,517
46,591
45,913
45,140
44,318
45,944
45,070
46,200
2
Gold stock, including Exchange Stabilization Fund 1
11,096
11,090
11,064
11,076
11,070
11,069
11,069
11,068
11,075
11,085
3
Special drawing rights2'3
5,641
7,293
8,395
8,879
8,904
8,856
8,813
9,174
9,078
9,373
4
Reserve position in International Monetary Fund 2
11,541
11,947
11,730
11,745
11,517
11,313
10,964
11,116
10,918
11,157
5
Foreign currencies 4
6,656
12,856
17,328
14,891
14,422
13,902
13,472
14,586
13,999
14,585
1. Gold held under earmark at Federal Reserve Banks for foreign and international accounts is not included in the gold stock of the United States; see table
3.13. Gold stock is valued at $42.22 per fine troy ounce.
2. Beginning July 1974, the IMF adopted a technique for valuing the SDR based
on a weighted average of exchange rates for the currencies of member countries.
From July 1974 through December 1980, 16 currencies were used; from January
1981, 5 currencies have been used. The U.S. SDR holdings and reserve position
in the IMF also are valued on this basis beginning July 1974.
3. Includes allocations by the International Monetary Fund of SDRs as follows:
$867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 million on Jan. 1,
1972; $1,139 million on Jan. 1, 1979; $1,152 million on Jan. 1, 1980; and $1,093
million on Jan. 1, 1981; plus transactions in SDRs.
4. Valued at current market exchange rates.
3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS
Millions of dollars, end of period
1987
Assets
1984
1985
1986
Apr.
1 Deposits
Assets held in custody
2 U.S. Treasury securities 1
3 Earmarked gold
June
July
Aug.
Sept.
Oct."
267
480
287
342
319
318
261
294
456
236
118,000
14,242
121,004
14,245
155,835
14,048
172,929
14,031
175,849
14,031
176,657
14,034
171,269
14,010
179,484
14,022
179,097
14,015
182,072
13,998
1. Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable U.S.
Treasury securities payable in dollars and in foreign currencies.
2. Earmarked gold is valued at $42.22 per fine troy ounce.
May
NOTE. Excludes deposits and U . S . Treasury securities held for international
and regional organizations. Earmarked gold is gold held for foreign and international accounts and is not included in the gold stock of the United States.
Summary Statistics
3.14 FOREIGN BRANCHES OF U.S. BANKS
A55
Balance Sheet Data1
Millions of dollars, end of period
1987
Mar.
Apr.
May
June
July
Aug.
Sept."
All foreign countries
1 Total, all currencies
2 Claims on United States
Parent bank
3
Other banks in United States
4
5
Nonbanks
6 Claims on foreigners
7
Other branches of parent bank
8
Banks
9
Public borrowers
10
Nonbank foreigners
453,656
458,012
456,628
457,180'
485,343'
487,598'
475,188'
470,391'
473,540'
489,838
113,393
78,109
13,664
21,620
320,162
95,184
100,397
23,343
101,238
119,706
87,201
13,057
19,448
315,676
91,399
102,960
23,478
97,839
114,563
83,492
13,685
17,386
312,955
96,281
105,237
23,706
87,731
112,163r
81,677
13,US'
17,373
310,927'
89,200
109,626'
22,666
89,435'
128,722'
94,444
15,366'
18,912
321,344'
93,669
114,997'
22,892
89,786'
127,009'
92,217
17,084'
17,708
328,280'
101,309
114,101'
23,295
89,575'
123,400'
89,395
16,021'
17,984
319,546'
101,232
107,747'
22,684
87,883'
123,687'
89,816
14,290'
19,581
314,078'
96,582
110,124'
21,412
85,96C
124,759'
89,981
14,682'
20,096
314,747'
97,988
108,088'
21,537
87,134'
137,048
101,618
15,890
19,540
318,766
103,553
108,418
21,205
85,590
20,101
22,630
29,110
34,090'
35,277'
32,309'
32,242'
32,626'
34,034'
34,024
12 Total payable in U.S. dollars
350,636
336,520
317,487
306,297'
329,457'
336,415'
329,499'
322,300'
322,286'
340,684
13 Claims on United States
14
Parent bank
15
Other banks in United States
Nonbanks
16
17 Claims on foreigners
Other branches of parent bank
18
19
Banks
20
Public borrowers
Nonbank foreigners
21
111,426
77,229
13,500
20,697
228,600
78,746
76,940
17,626
55,288
116,638
85,971
12,454
18,213
210,129
72,727
71,868
17,260
48,274
110,620
82,082
12,830
15,708
195,063
72,197
66,421
16,708
39,737
107,314'
79,817
11,976'
15,521
185,649'
63,983
66,043'
16,347
39,276'
122,932'
92,490
13,557'
16,885
192,360'
66,916
69,244'
16,639
39,561'
121,552'
90,182
15,448'
15,922
201,451'
75,014
69,525'
16,812
40,100'
118,411'
87,559
14,709'
16,143
198,465'
75,771
67,287'
16,271
39,136'
118,563'
87,802
12,781'
17,980
190,590'
72,515
65,673'
15,062
37,34C
118,964'
87,867
12,793'
18,304
189,958'
73,327
64,106'
15,115
37,410'
131,514
99,759
13,883
17,872
194,484
77,699
64,438
14,940
37,407
10,610
9,753
11,804
13,334'
14,165r
13,412'
12,623'
13,147'
13,364'
14,686
11 Other assets
22 Other assets
United Kingdom
23 Total, all currencies
144,385
148,599
140,917
145,486
149,998
154,371
146,678
149,760
148,039
149,836
24 Claims on United States
Parent bank
25
26
Other banks in United States
Nonbanks
27
28 Claims on foreigners
29
Other branches of parent bank
30
Banks
31
Public borrowers
Nonbank foreigners
32
27,675
21,862
1,429
4,384
111,828
37,953
37,443
5,334
31,098
33,157
26,970
1,106
5,081
110,217
31,576
39,250
5,644
33,747
24,599
19,085
1,612
3,902
109,508
33,422
39,468
4,990
31,628
28,503
23,303
1,288
3,912
109,297
28,782
42,537
4,897
33,081
31,001
25,315
1,564
4,122
111,113
29,936
42,961
4,964
33,252
34,427
28,935
1,507
3,985
112,997
33,412
41,241
5,234
33,110
30,859
25,944
1,194
3,721
107,407'
32,641
37,745'
4,684
32,337'
32,694
27,288
1,537
3,869
108,732
31,241
41,219
4,617
31,655
31,377
25,627
1,585
4,165
108,293
30,794
40,082
4,761
32,656
32,581
27,128
1,349
4,104
108,562
33,610
38,390
4,725
31,837
33 Other assets
34 Total payable in U.S. dollars
35 Claims on United States
Parent bank
36
37
Other banks in United States
Nonbanks
38
39 Claims on foreigners
40
Other branches of parent bank
41
Banks
4?
Public borrowers
Nonbank foreigners
43
44 Other assets
4,882
5,225
6,810
7,686
7,884
6,947
8,334
8,369
8,693
112,809
108,626
95,028
95,007
99,398
104,622
97,672
99,170
96,510
99,736
26,868
21,495
1,363
4,010
82,945
33,607
26,805
4,030
18,503
32,092
26,568
1,005
4,519
73,475
26,011
26,139
3,999
17,326
23,193
18,526
1,475
3,192
68,138
26,361
23,251
3,677
14,849
26,665
22,662
980
3,023
64,466
21,785
24,225
3,660
14,796
29,066
24,689
1,192
3,185
66,257
22,339
24,962
3,712
15,244
32,542
28,228
1,157
3,157
68,469
25,921
23,263
3,785
15,500
29,252
25,286
950
3,016
64,676
25,409
21,355
3,470
14,442
31,076
26,661
1,294
3,121
64,024
23,827
22,975
3,400
13,822
29,519
24,853
1,309
3,357
63,265
23,155
22,646
3,473
13,991
30,791
26,423
1,105
3,263
64,561
25,600
21,522
3,377
14,062
2,996
3,059
3,697
3,876
4,075
3,611
3,744
4,070
3,726
4,384
8,412'
Bahamas and Caymans
45 Total, all currencies
46 Claims on United States
Parent bank
47
48
Other banks in United States
49
Nonbanks
50 Claims on foreigners
Other branches of parent bank
51
Banks
52
53
Public borrowers
Nonbank foreigners
54
55 Other assets
56 Total payable in U.S. dollars
146,811
142,055
142,592
134,367'
146,954'
141,831'
142,170'
140,512'
139,986'
151,909
77,296
49,449
11,544
16,303
65,598
17,661
30,246
6,089
11,602
74,864
50,553
11,204
13,107
63,882
19,042
28,192
6,458
10,190
78,048
54,575
11,156
12,317
60,005
17,296
27,476
7,051
8,182
67,655'
44,502
10,924'
12,229
60,874'
16,529
28,673'
7,038
8,634'
78,902'
52,778
12,738'
13,386
62,293'
16,562
30,310'
7,247
8,174'
73,445
46,486
14,588'
12,371
63,089'
15,775
31,417'
7,304
8,593'
72,541
45,910
13,724'
12,907
65,280'
18,873
30,987'
7,025
8,395'
72,772
46,279
11,811'
14,682
63,027'
17,493
30,372'
7,046
8,116'
72,558
45,720
12,074'
14,764
62,336'
18,228
29,16c
6,873
8,075'
81,526
53,668
13,479
14,379
65,030
18,698
31,622
6,985
7,725
3,917
3,309
4,539
5,838'
5,759'
5,297'
4,349'
4,713'
5,092'
5,353
141,562
136,794
136,813
127,338'
138,962'
133,483'
135,323'
131,636'
130,985'
142,385
1. Beginning with June 1984 data, reported claims held by foreign branches
have been reduced by an increase in the reporting threshold for "shell" branches
from $50 million to $150 million equivalent in total assets, the threshold now
applicable to all reporting branches.
A56
3.14
International Statistics • January 1988
Continued
1987
Liability account
1985
1986
Mar.
Apr.
May
June
July
Aug.
Sept.''
All foreign countries
57 Total, all currencies
453,656
458,012
456,628
457,18C
485,343'
487,598'
475,188'
470,391'
473,54C
489,838
58 Negotiable CDs
59 To United States
Parent bank
60
61
Other banks in United States
Nonbanks
62
37,725
147,583
78,739
18,409
50,435
34,607
155,538
83,914
16,894
54,730
31,629
151,632
82,561
15,646
53,425
34,873
141,891'
71,183r
13,695
57,013'
33,155
152,875'
75,164'
16,913
60,798'
34,360
149,970'
74,644'
16,898
58,428'
31,776
150,115'
78,444'
16,575'
55,096'
32,993
143,434'
71,609'
14,982
56,843'
33,648
141,067'
73,677'
15,249'
52,141'
35,724
152,895
79,688
17,263
55,944
63 To foreigners
64
Other branches of parent bank
Banks
65
66
Official institutions
67
Nonbank foreigners
68 Other liabilities
247,907
93,909
78,203
20,281
55,514
20,441
245,939
89,529
76,814
19,520
60,076
21,928
253,775
95,146
77,809
17,835
62,985
19,592
260,635
88,276
84,543
20,591
67,225
19,781
278,022
94,590
92,704
21,293
69,435
21,291
284,307
101,774
90,333
23,058
69,142
18,961
274,061'
100,826
81,229'
22,264'
69,742
19,236'
274,407'
95,376
87,734
21,528
69,769'
19,557
278,888'
97,908
87,449
21,016
72,515'
19,937
280,643
103,921
85,512
20,116
71,094
20,576
69 Total payable in U.S. dollars
367,145
353,712
336,406
321,883'
340,584'
347,311'
340,985'
334,218'
333,673'
352,082
70 Negotiable CDs
71 To United States
Parent bank
72
Other banks in United States
73
74
Nonbanks
35,227
143,571
76,254
17,935
49,382
31,063
150,162
80,888
16,264
53,010
28,466
143,650
78,472
14,609
50,569
31,148
132,943'
66,052'
12,593
54,298'
29,505
141,641'
68,486'
15,455
57,70C
30,763
141,151'
70,159'
15,732
55,26C
27,929
141,667'
74,301'
15,363'
52,003'
28,781
134,731'
66,940'
13,872'
53,919'
29,634
132,061'
68,897'
14,046'
49,118'
31,120
142,844
74,411
15,846
52,587
75 To foreigners
76
Other branches of parent bank
Banks
77
78
Official institutions
79
Nonbank foreigners
80 Other liabilities
178,260
77,770
45,123
15,773
39,594
10,087
163,583
71,078
37,365
14,359
40,781
8,904
156,806
71,181
33,850
12,371
39,404
7,484
149,949
62,172
35,116
13,392
39,269
7,843
161,216
67,278
39,111
14,318
40,509
8,222
167,761
74,769
36,226
16,068
40,698
7,636
163,505'
74,202
31,812'
15,985'
41,506
7,884
162,766'
70,911
35,250
15,806
40,799'
7,940
163,728'
72,620
35,104
15,527
40,477'
8,250
169,284
77,985
35,202
14,209
41,888
8,834
United Kingdom
144,385
148,599
140,917
145,486
149,998
154,371
146,678
149,760
148,039
149,836
82 Negotiable CDs
83 To United States
84
Parent bank
85
Other banks in United States
86
Nonabnks
34,413
25,250
14,651
3,125
7,474
31,260
29,422
19,330
2,974
7,118
27,781
24,657
14,469
2,649
7,539
30,968
21,457
12,356
1,816
7,285
29,311
23,936
13,170
2,205
8,561
30,226
26,204
15,145
2,273
8,786
27,511
24,512
14,745
2,109
7,658
28,590
24,347
14,010
2,021
8,316
29,363
22,197
13,234
1,875
7,088
31,451
22,469
13,357
2,073
7,039
87 To foreigners
Other branches of parent bank
88
89
Banks
90
Official institutions
91
Nonbank foreigners
92 Other liabilities
77,424
21,631
30,436
10,154
15,203
7,298
78,525
23,389
28,581
9,676
16,879
9,392
79,498
25,036
30,877
6,836
16,749
8,981
83,699
21,780
35,538
7,827
18,554
9,362
87,381
22,421
37,562
8,871
18,527
9,370
89,760
26,367
35,282
10,004
18,107
8,181
86,041
25,350
32,036'
9,748'
18,907
8,614
87,942
23,572
35,647
9,241
19,482
8,881
87,750
23,379
34,414
9,670
20,287
8,729
86,806
26,094
31,681
10,387
18,644
9,110
81 Total all currencies
117,497
112,697
99,707
98,967
101,793
106,093
100,031
101,593
99,459
102,325
94 Negotiable CDs
95 To United States
96
Parent bank
97
Other banks in United States
Nonbanks
98
33,070
24,105
14,339
2,980
6,786
29,337
27,756
18,956
2,826
5,974
26,169
22,075
14,021
2,325
5,729
28,868
18,940
11,606
1,602
5,732
27,189
21,144
12,352
2,021
6,771
28,345
23,474
14,528
2,027
6,919
25,695
21,850
14,252
1,899
5,699
26,397
21,689
13,399
1,776
6,514
27,264
19,573
12,608
1,694
5,271
28,776
19,535
12,609
1,883
5,043
99 To foreigners
100
Other branches of parent bank
101
Banks
Official institutions
102
Nonbank foreigners
103
104 Other liabilities
56,923
18,294
18,356
8,871
11,402
3,399
51,980
18,493
14,344
7,661
11,482
3,624
48,138
17,951
15,203
4,934
10,050
3,325
47,531
14,471
18,027
4,924
10,109
3,628
49,708
14,367
19,498
5,786
10,057
3,752
51,116
18,430
15,555
7,214
9,917
3,158
49,089
17,654
13,566'
7,283'
10,586
3,397
50,294
16,171
16,330
7,203
10,590
3,213
49,484
15,565
15,767
7,872
10,280
3,138
50,379
17,994
14,359
8,060
9,966
3,635
93 Total payable in U.S. dollars
Bahamas and Caymans
105 Total, all currencies
146,811
142,055
142,592
134,367'
146,954'
141,831'
142,17c
140,512'
139,986'
151,909
106 Negotiable CDs
107 To United States
108
Parent bank
109
Other banks in United States
Nonbanks
110
615
102,955
47,162
13,938
41,855
610
103,813
44,811
12,778
46,224
847
105,248
48,648
11,715
44,885
813
99,090'
39,922'
10,568
48,60C
883
107,545'
43,40c
13,345
50,80c
1,092
101,695'
40,146'
13,175
48,374'
1,067
103,007'
43,58C
13,143
46,284'
1,119
99,24C
39,908'
11,966
47,366'
975
97,244'
41,046'
12,236'
43,962'
886
107,246
45,890
13,613
47,743
40,320
16,782
12,405
2,054
9,079
2,921
35,053
14,075
10,669
1,776
8,533
2,579
34,400
12,631
8,617
2,719
10,433
2,097
32,501
11,673
8,140
2,836
9,852
1,963
36,491
13,891
9,452
2,937
10,211
2,035
36,835
13,359
9,895
3,072
10,509
2,209
36,004
14,023
7,943
3,185
10,853
2,092
37,988'
14,803
9,395
3,263
10,527'
2,165
39,437'
16,465
9,514
2,935
10,523'
2,330
41,276
16,925
10,395
1,786
12,170
2,501
143,582
138,322
138,774
129,578'
140,974'
136,842'
137,763'
135,376'
134,354'
145,354
111 To foreigners
112
Other branches of parent bank
113
Banks
Official institutions
114
Nonbank foreigners
115
116 Other liabilities
117 Total payable in U.S. dollars
Summary Statistics
3.15
A57
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1987
Item
1 Total 1
2
3
4
5
6
7
8
9
10
11
12
1985
1986
178,380
By type
Liabilities reported by banks in the United States
U . S . Treasury bills and certificates 3
U . S . Treasury bonds and notes
Marketable
Nonmarketable
U . S . securities other than U . S . Treasury securities
By area
Western Europe 1
Canada
Latin America and Caribbean
Asia
Other countries 6
211,782
Mar.
Apr.
May
June
July
226,840
236,137
236,439
238,418
Aug.
Sept."
232,193 r
237,501''
239,020
r
29,465'
78,210
31,070
75,701
26,734
53,252
27,868
75,650
31,207
79,629
33,034
84,640
31,896
81,553
31,754
80,663
31,391
73,435
77,154
3,550
17,690
91,368
1,300
15,596
99,530
1,300
15,174
102,019
1,300
15,144
106,465
1,300
15,225
110,184
700
15,117
112,435
500
14,432
115,047
300
14,479
116,747
300
15,202
74,447
1,315
11,148
86,448
1,824
3,199
88,623
2,004
8,372
105,868
1,503
5,412
99,822
5,110
8,246
108,450
1,192
4,020
106,171
3,922
9,295
109,842
1,284
5,621
108,677
3,482
7,923
109,464
1,628
5,265
111,405
3,502
7,519
108,654
1,405
5,933
107,695 r
3,559
7,918 r
105,495
1,590
5,937
106,735'
4,189
8,710
109,484'
1,837
6,547
107,901
4,529
8,558
109,369
1,619
7,044
1. Includes the Bank for International Settlements.
2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, negotiable time certificates of deposit, and borrowings under repurchase agreements.
3. Includes nonmarketable certificates of indebtedness (including those payable in foreign currencies through 1974) and Treasury bills issued to official
institutions of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes
bonds and notes payable in foreign currencies.
5. Debt securities of U.S. government corporations and federally sponsored
agencies, and U.S. corporate stocks and bonds.
6. Includes countries in Oceania and Eastern Europe.
NOTE. Based on Treasury Department data and on data reported to the
Treasury Department by banks (including Federal Reserve Banks) and securities
dealers in the United States.
3.16 LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Banks in the United States
Payable in Foreign Currencies1
Millions of dollars, end of period
1986
Item
1 Banks' own liabilities
2 Banks' own claims
3
Deposits
4
Other claims
5 Claims of banks' domestic customers
1983
5,219
7,231
2,731
4,501
1,059
1. Data on claims exclude foreign currencies held by U.S. monetary authorities.
2. Assets owned by customers of the reporting bank located in the United
1984
8,586
11,984
4,998
6,986
569
1987
1985
15,368
16,294
8,437
7,857
580
Sept.
Dec.
Mar.
June'
29,528
24,134
13,241
10,893
1,589
29,556
25,920
13,923
11,997
2,507
36,905
32,613
14,077
18,536
2,012
36,083
32,884
10,935
21,949
889
States that represent claims on foreigners held by reporting banks for the accounts
of the domestic customers.
A58
International Statistics • January 1988
3.17 LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
Reported by Banks in the United States
Millions of dollars, end of period
1987
Holder and type of liability
1984
1985
Apr.
May
June
July
Aug.
1 All foreigners
407,306
435,726
539,238
531,086
553,980
557,735
541,039
542,849'
553,209
2 Banks' own liabilities
3
Demand deposits
4
Time deposits
5
Other.
6
Own foreign offices
306,898
19,571
110,413
26,268
150,646
341,070
21,107
117,278
29,305
173,381
406,075
23,788
131,691
41,462
209,134
395,976
22,282
125.109
44,424
204,162
413,735
22,350
131,794
47,986
211,605
417,889
23,223
132,973
47,718
213,975
401,903
23,219
133,186
41,512
203,986
409,547'
20,598'
134,209'
43,294'
211,446'
415,686
22,127
138,574
40,343
214,642
100,408
76,368
94,656
69,133
133,163
90,392
135.110
93,153
140,245
97,928
139,846
95,959
139,135
93,688
133,302
88,193
137,523
92,705
18,747
5,293
17,964
7,558
15,417
27,354
14,695
27,262
14,590
27,727
15,790
28,098
16,371
29,076
15,632
29,477
15,259
29,559
11 Nonmonetary international and regional
organizations
4,454
5,821
5,272
5,281
8,230
5,199
3,979
5,660'
4,945
12 Banks' own liabilities
13
Demand deposits
14
Time deposits 1
15
Other 2
2,014
254
1,267
493
2,621
85
2,067
469
3,423
199
1,158
3,901
246
1,227
2,428
6,636
334
3,094
3,207
3,535
106
944
2,486
2.489
72
967
1,451
2,081'
76'
584
1,420
2,111
46
816
1,249
16 Banks' custody liabilities 4
17
U.S. Treasury bills and certificates
18
Other negotiable and readily transferable
instruments 6
19
Other
2,440
916
3,200
1,736
1,849
259
1,379
154
1,594
428
1,664
440
1.490
266
3,579
2,339
2,834
1,635
1,524
1,464
1,590
1,225
1,152
14
1,224
0
1,224
0
1,240
0
1,193
6
20 Official institutions8
86,065
79,985
103,518
110,836
117,675
113,449
112,416
104,826'
107,675
21 Banks' own liabilities
22
Demand deposits
23
Time deposits
24
Other.
19,039
1,823
9,374
7,842
20,835
2,077
10,949
7,809
25,376
2,267
11,009
12,100
28,060
1,923
10,806
15,331
30,060
1,829
12,277
15,954
29,034
2,089
11,277
15,668
28,364
1,745
13,042
13,577
28,221'
1,711'
13,54c
12.97C
26,169
1,907
13,799
10,464
25 Banks' custody liabilities 4
<
26
U.S. Treasury bills and certificates 5
27
Other negotiable and readily transferable
instruments
28
Other
67,026
59,976
59,150
53,252
78,142
75,650
82,776
79,629
87,614
84,640
84,415
81,553
84,052
80,663
76,605
73,435
81,505
78,210
6,966
84
5,824
75
2,347
145
3,015
132
2,819
154
2,715
147
3,141
248
2,950
220
3,151
144
29 Banks 9
248,893
275,589
350,637
338,946
350,635
359,093
346,818
355,782'
361,405
30 Banks' own liabilities
31
Unaffiliated foreign banks
32
Demand deposits
33
Time deposits 1
34
Other.
35
Own foreign offices 3
225,368
74,722
10,556
47,095
17,071
150,646
252,723
79,341
10,271
49,510
19,561
173,381
310,400
101,266
10,303
64,516
26,447
209,134
299,990
95,828
9,503
62,138
24,187
204,162
311,654
100,049
9,782
64,296
25,970
211,605
319,495
105,520
10,808
67,725
26,986
213,975
305,679
101,693
10.298
67,097
24.299
203,986
313,948'
102,501'
8,588'
67,28C
26,634'
211,446'
320,244
105,602
9,911
69,916
25,775
214,642
36 Banks' custody liabilities 4
37
U.S. Treasury bills and certificates
38
Other negotiable and readily transferable
instruments
39
Other
23,525
11,448
22,866
9,832
40,237
9,984
38,956
9,759
38,981
9,545
39,598
9,774
41,139
9,066
41,834
9,142
41.161
9,100
7,236
4,841
6,040
6,994
5,165
25,089
4,171
25,026
4,090
25,346
4,213
25,611
5,611
26,462
5,850
26,841
5,320
26,742
40 Other foreigners
67,894
74,331
79,810
76,023
77,441
79,994
77,825
76,582'
79,184
41 Banks' own liabilities
42
Demand deposits
43
Time deposits
44
Other 2
60,477
6,938
52,678
861
64,892
8,673
54,752
1,467
66,876
11,019
54,099
1,757
64,025
10,609
50,938
2,479
65,385
10,404
52,126
2,854
65,825
10,220
53,027
2,578
65,371
11,104
52,081
2,185
65,298'
10,223'
52,805'
2,270
67.162
10,263
54,044
2,855
7,417
4,029
9,439
4,314
12,935
4,500
11,998
3,610
12,056
3,315
14,169
4,192
12,454
3,694
11,284
3,276
12,022
3,761
3,021
367
4,636
489
6,315
2,120
6,285
2,103
6,529
2,212
7,638
2,340
6,395
2,366
5,592
2,415
5,594
2,667
10,476
9,845
7,496
7,854
8,134
8,694
7,356
6,313
6,458
7 Banks' custody liabilities 4
8
U.S. Treasury bills and certificates 5
9
Other negotiable and readily transferable
instruments
10
Other
45 Banks' custody liabilities 4
46
U.S. Treasury bills and certificates
47
Other negotiable and readily transferable
instruments
48
Other
49 MEMO: Negotiable time certificates of deposit in
custody for foreigners
0
0
1. Excludes negotiable time certificates of deposit, which are included in
"Other negotiable and readily transferable instruments."
2. Includes borrowing under repurchase agreements.
3. U.S. banks: includes amounts due to own foreign branches and foreign
subsidiaries consolidated in "Consolidated Report of Condition" filed with bank
regulatory agencies. Agencies, branches, and majority-owned subsidiaries of
foreign banks: principally amounts due to head office or parent foreign bank, and
foreign branches, agencies or wholly owned subsidiaries of head office or parent
foreign bank.
4. Financial claims on residents of the United States, other than long-term
2,066
0
0
securities, held by or through reporting banks.
5. Includes nonmarketable certificates of indebtedness and Treasury bills
issued to official institutions of foreign countries.
6. Principally bankers acceptances, commercial paper, and negotiable time
certificates of deposit.
7. Principally the International Bank for Reconstruction and Development, and
the Inter-American and Asian Development Banks.
8. Foreign central banks and foreign central governments, and the Bank for
International Settlements.
9. Excludes central banks, which are included in "Official institutions."
Nonbank-Reported
Data
3.17 Continued
1987
Area and country
1984
1985
1986
Mar.
Apr.
May
June
July
Aug.
Sept."
1 Total
407,306
435,726
539,238
531,086
553,980
557,735
541,039
542,849'"
553,209
583,185
2 Foreign countries
402,852
429,905
533,965
525,806
545,750
552,536
537,059
537,190''
548,264
575,676
153,145
615
4,114
438
418
12,701
3,358
699
10,762
4,731
1,548
597
2,082
1,676
31,740
584
68,671
602
7,192
79
537
164,114
693
5,243
513
496
15,541
4,835
666
9,667
4,212
948
652
2,114
1,422
29,020
429
76,728
673
9,635
105
523
180,491
1,181
6,729
482
580
22,862
5,752
700
10,875
5,600
735
699
2,407
884
30,533
454
85,284
630
3,322
80
702
186,086
799
7,232
623
947
23,853
7,477
642
10,094
4,970
490
686
2,237
1,065
27,545
412
91,903
564
3,902
30
616
192,008
1,058
7,906
425
942
27,457
6,779
603
11,338
5,880
567
660
2,244
1,251
26,533
833
91,742
526
4,572
32
659
207,149
921
9,335
459
909
27,870
10,619
643
11,726
5,442
571
607
2,194
1,496
26,869
378
102,261
429
3,849
37
532
204,713
974
9,558
425
616
27,955
8,024
691
11,943
5,367
502
704
2,322
1,296
27,852
455
99,682
433
5,208
36
671
204,810'
795
9,154'
486
497'
25,481'
7,105'
667
10,032'
5,104'
562'
586
2,103'
1,235
24,735'
365
107,978'
459
6,282'
550
632'
208,225
1,066
9,755
576
545
26,995
7,666
636
7,671
5,457
593
700
2,267
1,411
28,351
514
106,946
491
5,888
45
650
213,978
1,276
10,495
597
512
27,864
6,267
690
8,411
6,106
661
684
2,542
1,627
27,323
405
109,776
519
7,563
51
610
3 Europe
4
Austria
5
Belgium-Luxembourg
6
Denmark
7
Finland
8
France
9
Germany
10
Greece
11
Italy
Netherlands
12
13
Norway
Portugal
14
15
Spain
16
Sweden
17
Switzerland
18
Turkey
19
United Kingdom
20
Yugoslavia
Other Western Europe 1
21
22
U.S.S.R
Other Eastern Europe
23
16,059
17,427
26,345
26,595
25,306
24,522
21,914
21,232'
22,556
26,250
153,381
4,394
56,897
2,370
5,275
36,773
2,001
2,514
10
1,092
896
183
12,303
4,220
6,951
1,266
1,394
10,545
4,297
167,856
6,032
57,657
2,765
5,373
42,674
2,049
3,104
11
1,239
1,071
122
14,060
4,875
7,514
1,167
1,552
11,922
4,668
209,184
4,757
73,619
2,922
4,325
70,919
2,054
4,285
7
1,236
1,123
136
13,745
4,916
6,886
1,163
1,537
10,439
5,114
196,521
4,730
62,978
2,294
3,702
70,438
2,061
4,275
6
1,015
1,083
230
13,256
5,650
6,695
1,063
1,642
10,368
5,035
207,228
4,412
72,102
2,181
3,619
69,426
2,255
4,353
6
1,045
1,165
149
15,104
5,797
7,111
1,086
1,533
10,592
5,289
204,694
4,786
69,428
2,594
3,960
70,354
2,034
4,289
6
1,093
1,167
189
13,955
5,171
7,341
1,095
1,507
10,292
5,432
195,058
4,795
66,325
2,172
3,673
65,297
1,972
4,363
8
1,121
1,123
158
13,857
5,183
7,131
1,137
1,504
10,164
5,078
199,107'
5,123
62,518'
2,317'
3,783'
72,229'
2,035
4,431
8
1,090
1,110
146
14,160'
5,291
6,988'
1,145
1,536
10,082'
5,105
200,389
5,246
62,392
2,285
3,965
71,645
2,560
4,449
7
1,101
1,086
171
14,547
5,338
7,323
1,200
1,607
10,285
5,181
214,681
4,675
71,556
2,298
4,383
78,157
2,248
4,187
7
1,098
1,073
156
14,264
5,218
7,1%
1,203
1,492
10,003
5,467
71,187
72,280
108,806
109,138
112,296
107,774
106,737
102,971'
106,969
110,139
1,153
4,990
6,581
507
1,033
1,268
21,640
1,730
1,383
1,257
16,804
12,841
1,607
7,786
8,067
712
1,466
1,601
23,077
1,665
1,140
1,358
14,523
9,276
1,476
18,902
9,390
674
1,547
1,892
47,410
1,141
1,866
1,119
12,352
11,036
1,947
20,107
9,184
512
1,415
1,670
49,166
1,119
1,740
1,248
11,572
9,459
1,889
19,461
9,367
527
1,460
1,305
53,381
1,178
1,427
1,118
11,363
9,821
1,842
17,333
9,365
569
1,243
1,084
50,434
1,343
1,312
1,180
10,860
11,209
1,737
16,346
9,122
714
1,774
1,229
49,494
1,397
1,222
1,144
11,448
11,111
1,744
16,436
8,595
572
1,404
928
46,722'
1,410
1,148
1,096'
11,676'
11,241'
2,011
15,377
9,012
902
1,541
1,036
49,871
1,388
1,208
1,186
12,676
10,761
1,755
15,197
8,342
771
1,435
1,115
51,936
1,622
1,111
1,118
14,039
11,697
57 Africa
Egypt
58
59
Morocco
60
South Africa
61
Zaire
Oil-exporting countries
62
Other Africa
63
3,396
647
118
328
153
1,189
961
4,883
1,363
163
388
163
1,494
1,312
4,021
706
92
270
74
1,519
1,360
3,486
775
99
184
40
1,106
1,281
3,732
871
101
288
39
1,212
1,221
4,003
1,052
86
198
74
1,267
1,326
3,759
1,011
106
188
58
1,111
1,286
4,018
1,113
75
229
64
1,275
1,262
4,197
1,162
74
227
69
1,331
1,335
4,012
1,118
81
199
81
1,178
1,356
64 Other countries
65
Australia
All other
66
5,684
5,300
384
3,347
2,779
568
5,118
4,196
922
3,980
3,023
957
5,181
4,293
888
4,394
3,589
805
4,878
4,113
765
5,052
4,333
718'
5,928
4,998
929
6,616
5,641
975
67 Nonmonetary international and regional organizations
International
Latin American regional
Other regional 5
4,454
3,747
587
120
5,821
4,806
894
121
5,272
4,086
1,033
154
5,281
4,294
783
204
8,230
6,966
845
420
5,199
3,717
994
488
3,979
2,577
1,047
356
5,660'
4,200'
1,075
384
4,945
3,432
1,070
443
7,509
5,792
1,126
591
24 Canada
25 Latin America and Caribbean
26
Argentina
27
Bahamas
28
Bermuda
29
Brazil
30
British West Indies
31
Chile
Colombia
32
33
Cuba
34
Ecuador
35
Guatemala
36
Jamaica
37
Mexico
38
Netherlands Antilles
39
Panama
40
Peru
41
Uruguay
42
Venezuela
43
Other Latin America and Caribbean
44
45
46
47
48
49
50
51
52
53
54
55
56
China
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea
Philippines
Thailand
Middle-East oil-exporting countries 3
Other Asia
68
69
70
1. Includes the Bank for International Settlements. Beginning April 1978, also
includes Eastern European countries not listed in line 23.
2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German
Democratic Republic, Hungary, Poland, and Romania.
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
5. Asian, African, Middle Eastern, and European regional organizations,
except the Bank for International Settlements, which is included in "Other
Western Europe."
A59
A60
International Statistics • January 1988
3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States
Payable in U.S. Dollars
Millions of dollars, end of period
1987
Area and country
1984
1985
1986
Mar.
Apr.
May
June
July'
Aug.
1 Total
400,162
401,608
444,265
417,290
439,509
438,135
432,208
423,424
426,159
2 Foreign countries
399,363
400,577
441,244
415,349
434,240
437,304
430,076
421,396
424,127
99,014
433
4,794
648
898
9,157
1,306
817
9,119
1,356
675
1,243
2,884
2,230
2,123
1,130
56,185
1,886
596
142
1,389
106,413
598
5,772
706
823
9,124
1,267
991
8,848
1,258
706
1,058
1,908
2,219
3,171
1,200
62,566
1,964
998
130
1,107
107,446
728
7,498
688
947
11,356
1,820
648
9,038
3,299
654
739
1,492
1,945
3,049
1,543
58,337
1,836
540
345
944
99,409
656
8,081
623
993
9,864
1,648
535
6,987
2,326
667
742
1,807
2,461
2,338
1,579
54,105
1,840
759
367
1,029
108,052
746
8,542
546
1,116
10,817
1,379
460
7,536
3,030
683
615
1,977
2,414
2,905
1,559
59,876
1,763
648
375
1,065
116,501
669
9,920
541
1,036
12,075
1,508
457
8,329
2,946
776
641
2,107
2,614
3,593
1,623
64,001
1,803
493
357
1,012
114,132
758
9,792
716
1,035
12,036
1,548
456
8,404
5,744
774
659
1,848
2,330
2,611
1,785
59,748
1,755
559
582
993
108,093
698
10,239
614
1,037
11,673
2,009
433
6,784
4,429
830
645
1,830
2,287
2,464
1,753
56,565
1,764
647
420
974
104,201
785
9,550
878
1,031
12,530
1,325
375
6,413
3,071
803
667
1,945
2,473
2,664
1,796
54,117
1,742
548
521
966
3 Europe
4
Austria
5
Belgium-Luxembourg
6
Denmark
7
Finland
8
France
9
Germany
10
Greece
11
Italy
12
Netherlands
13
Norway
14
Portugal
15
Spain
16
Sweden
17
Switzerland
18
Turkey
19
United Kingdom
20
Yugoslavia
21
Other Western Europe 1
22
U.S.S.R
23
Other Eastern Europe
24 Canada
16,109
16,482
20,958
19,807
20,177
19,294
18,450
18,596
18,441
25 Latin America and Caribbean
26
Argentina
27
Bahamas
28
Bermuda
29
Brazil
30
British West Indies
31
Chile
32
Colombia
33
Cuba
34
Ecuador
35
Guatemala 3
36
Jamaica
37
Mexico
38
Netherlands Antilles
39
Panama
40
Peru
41
Uruguay
42
Venezuela
Other Latin America and Caribbean
43
207,862
11,050
58,009
592
26,315
38,205
6,839
3,499
0
2,420
158
252
34,885
1,350
7,707
2,384
1,088
11,017
2,091
202,674
11,462
58,258
499
25,283
38,881
6,603
3,249
0
2,390
194
224
31,799
1,340
6,645
1,947
960
10,871
2,067
208,832
12,104
59,342
418
25,703
46,306
6,562
2,826
0
2,449
140
198
30,660
1,039
5,436
1,661
940
11,112
1,938
199,245
12,181
53,474
532
26,059
43,226
6,425
2,698
6
2,338
135
192
29,846
965
5,460
1,600
959
11,304
1,844
209,524
12,129
62,634
740
26,006
43,592
6,412
2,686
9
2,381
120
189
30,125
1,175
5,771
1,601
957
11,086
1,910
204,272
12,335
58,314
592
25,690
44,355
6,321
2,650
9
2,372
115
184
30,055
1,045
4,730
1,599
962
11,044
1,900
201,887
12,256
56,463
300
25,493
43,782
6,328
2,649
0
2,354
109
182
30,293
1,344
4,977
1,565
950
10,956
1,884
200,885
12,158
53,034
387
25,992
44,755
6,500
2,743
0
2,396
107
268
31,141
1,083
4,633
1,567
949
11,306
1,868
202,550
12,227
54,784
359
26,586
43,428
6,510
2,784
0
2,384
105
202
31,851
992
4,616
1,549
966
11,366
1,839
44 Asia
China
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea
Philippines
Thailand
Middle East oil-exporting countries
Other Asia
66,316
66,212
96,070
89,133
88,738
89,534
87,903
86,515
91,429
710
1,849
7,293
425
724
2,088
29,066
9,285
2,555
1,125
5,044
6,152
639
1,535
6,797
450
698
1,991
31,249
9,226
2,224
845
4,298
6,260
787
2,678
8,307
321
723
1,635
59,620
7,182
2,217
578
4,122
7,901
1,373
2,914
8,261
486
662
1,543
53,579
6,031
2,282
490
5,152
6,361
1,360
3,278
7,779
314
627
1,509
54,300
5,352
2,121
461
4,496
7,142
1,175
3,592
7,727
379
657
1,459
55,167
6,076
2,064
540
3,697
7,001
993
3,301
7,658
429
677
1,450
55,097
5,314
2,109
552
3,808
6,514
929
2,487
7,495
416
639
1,413
54,596
4,954
2,211
565
3,914
6,897
919
2,772
6,556
565
624
1,450
61,072
4,589
2,148
545
4,315
5,875
57 Africa
58
Egypt
59
Morocco
60
South Africa
61
Zaire
62
Oil-exporting countries
63
Other
6,615
728
583
2,795
18
842
1,649
5,407
721
575
1,942
20
630
1,520
4,650
567
598
1,550
28
694
1,213
4,871
618
584
1,558
42
861
1,209
4,800
574
565
1,578
41
801
1,241
4,876
585
566
1,598
43
840
1,246
4,707
599
563
1,506
39
818
1,184
4,705
572
568
1,479
38
866
1,182
4,739
586
603
1,497
35
862
1,156
64 Other countries
65
Australia
66
All other
3,447
2,769
678
3,390
2,413
978
3,289
1,944
1,345
2,884
1,992
892
2,949
2,065
884
2,828
1,897
931
2,996
1,980
1,016
2,601
1,693
908
2,766
1,686
1,080
800
1,030
3,021
1,941
5,268
830
2,132
2,029
2,032
45
46
47
48
49
50
51
52
53
54
55
56
67 Nonmonetary international and regional
organizations
1. Includes the Bank for International Settlements. Beginning April 1978, also
includes Eastern European countries not listed in line 23.
2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German
Democratic Republic, Hungary, Poland, and Romania.
3. Included in "Other Latin America and Caribbean" through March 1978.
4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
5. Comprises Algeria, Gabon, Libya, and Nigeria.
6. Excludes the Bank for International Settlements, which is included in
"Other Western Europe."
Nonbank-Reported
Data
3.19 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the
United States Payable in U.S. Dollars
Millions of dollars, end of period
1987
Type of claim
1984
1985
1986
Mar.
Apr.
May
June
Julyr
Aug.
Sept."
1 Total
433,078
430,489
478,187
448,730
439,509
438,135
465,267
423,424
426,159
445,492
2
3
4
5
6
7
8
400,162
62,237
156,216
124,932
49,226
75,706
56,777
401,608
60,507
174,261
116,654
48,372
68,282
50,185
444,265
64,112
211,615
122,715
57,484
65,232
45,823
417,290
64,029
191,620
117,503
54,121
63,382
44,138
439,509
66,942
207,042
120,926
57,450
63,476
44,599
438,135
62,788
203,682
127,155
61,659
65,495
44,511
432,208
63,512
199,273
125,148
60,447
64,701
44,275
423,424
64,778
189,797
123,888
59,655
64,233
44,961
426,159
64,782
196,581
121,735
56,831
64,904
43,061
445,492
66,149
210,247
126,151
60,220
65,931
42,945
32,916
3,380
28,881
3,335
33,922
4,413
31,439
3,400
33,059
3,474
23,805
19,332
24,044
20,551
21,384
5,732
6,214
5,465
7,488
8,202
37,103
28,487
25,631
25,449
40,714
38,102
42,129
43,575
40,203
40,627
n.a.
Banks' o w n claims on foreigners
Foreign public borrowers
O w n foreign offices
Unaffiliated foreign banks
Deposits
Other
All other foreigners
9 Claims of banks' domestic customers2 . . .
11 N e g o t i a b l e a n d readily transferable
12 O u t s t a n d i n g c o l l e c t i o n s and o t h e r
13 MEMO: C u s t o m e r liability o n
D o l l a r d e p o s i t s in b a n k s a b r o a d ,
reported by nonbanking business
e n t e r p r i s e s in the U n i t e d S t a t e s . . . .
23,731R
45,521
44,860
38,046R
3. P r i n c i p a l l y n e g o t i a b l e t i m e c e r t i f i c a t e s o f d e p o s i t a n d b a n k e r s a c c e p t a n c e s .
4. I n c l u d e s d e m a n d a n d t i m e d e p o s i t s a n d n e g o t i a b l e a n d n o n n e g o t i a b l e
certificates of deposit d e n o m i n a t e d in U . S . dollars issued by banks abroad. F o r
d e s c r i p t i o n o f c h a n g e s in data reported b y n o n b a n k s , s e e July 1979 BULLETIN, p.
550.
NOTE. B e g i n n i n g April 1978, data for b a n k s ' o w n c l a i m s are g i v e n o n a m o n t h l y
basis, but the data for claims o f b a n k s ' o w n d o m e s t i c c u s t o m e r s are available o n
a quarterly basis only.
1. U.S. banks:
includes amounts due from o w n foreign branches and foreign
s u b s i d i a r i e s c o n s o l i d a t e d i n " C o n s o l i d a t e d R e p o r t o f C o n d i t i o n " filed w i t h b a n k
r e g u l a t o r y a g e n c i e s . Agencies,
branches,
and majority-owned
subsidiaries
of
foreign
banks:
principally a m o u n t s due from head office or parent foreign bank,
and foreign branches, agencies, or wholly o w n e d subsidiaries of head office or
parent foreign bank.
2 . A s s e t s o w n e d b y c u s t o m e r s o f t h e r e p o r t i n g b a n k l o c a t e d in t h e U n i t e d
States that represent claims o n foreigners held by reporting banks for the account
o f their d o m e s t i c c u s t o m e r s .
3.20 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States
Payable in U.S. Dollars
Millions of dollars, end of period
1987
1986
Maturity; by borrower and area
1
7
3
4
5
6
7
8
9
10
11
17
13
14
15
16
17
18
19
By
borrower
Maturity of 1 year or less
Foreign public borrowers
All other foreigners
Maturity over 1 year1
Foreign public borrowers
All other foreigners
By
area
Maturity of 1 year or less1
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other2
Maturity of over 1 year
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other2
1. R e m a i n i n g t i m e t o m a t u r i t y .
1983
1984
1985
Sept.
Dec.
Mar.
Juner
243,715
243,952
227,903
225,119
231,433
226,760
235,320
176,158
24,039
152,120
67,557
32,521
35,036
167,858
23,912
143,947
76,094
38,695
37,399
160,824
26,302
134,522
67,078
34,512
32,567
155,610
22,528
133,083
69,509
38,350
31,159
159,790
24,723
135,068
71,643
39,898
31,745
155,239
23,496
131,743
71,521
40,718
30,803
166,260
23,290
142,970
69,060
39,465
29,594
56,117
6,211
73,660
34,403
4,199
1,569
58,498
6,028
62,791
33,504
4,442
2,593
56,585
6,401
63,328
27,966
3,753
2,791
59,664
6,204
58,363
26,444
3,090
1,845
61,346
5,845
56,174
29,291
2,882
4,252
58,001
5,559
54,321
30,969
3,148
3,240
68,141
5,552
55,326
30,875
2,980
3,385
13,576
1,857
43,888
4,850
2,286
1,101
9,605
1,882
56,144
5,323
2,033
1,107
7,634
1,805
50,674
4,502
1,538
926
7,237
1,930
54,149
3,978
1,479
736
6,851
1,930
56,415
4,120
1,539
787
6,764
1,873
56,540
4,151
1,630
564
6,422
1,631
55,524
3,340
1,522
621
2. I n c l u d e s n o n m o n e t a r y i n t e r n a t i o n a l a n d r e g i o n a l o r g a n i z a t i o n s .
A61
A62
International Statistics • January 1988
3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks1'2
Billions of dollars, end of period
1985
Area or country
1 Total
1984
1986
1987
1985
June
Sept.
Dec.
Mar.
June
Sept.
Dec.
Mar.
June
433.9
405.7
396.8
394.9
391.9
393.7
390.3
389.8
390.0
398.9'
388.0'
167.8
12.4
16.2
11.3
11.4
3.5
5.1
4.3
65.3
8.3
29.9
148.1
8.7
14.1
9.0
10.1
3.9
3.2
3.9
60.3
7.9
27.1
146.7
8.9
13.5
9.6
8.6
3.7
2.9
4.0
65.7
8.1
21.7
152.0
9.5
14.8
9.8
8.4
3.4
3.1
4.1
67.1
7.6
24.3
148.5
9.3
12.3
10.5
9.8
3.7
2.8
4.4
64.6
7.0
24.2
156.9
8.4
13.8
11.3
8.5
3.5
2.9
5.4
68.8
6.4
28.0
160.1
9.0
15.1
11.5
9.3
3.4
2.9
5.6
69.2
6.9
27.2
158.9
8.5
14.7
12.5
8.1
3.9
2.7
4.8
70.3
6.1
27.4
157.6
8.4
13.8
11.7
9.0
4.6
2.4
5.5
71.9
5.4
25.0
165.1'
9.1
13.4
12.8'
8.6
4.4
3.0
5.8
74.3
5.2
28.5
158.8'
8.5
12.6
11.3'
7.5
7.3
2.4
5.7
72.4
4.6
26.4
13 Other developed countries
14
Austria
Denmark
15
16
Finland
Greece
17
18
Norway
19
Portugal
20
Spain
21
Turkey
Other Western Europe
22
23
South Africa
24
Australia
36.0
1.9
3.4
2.4
2.8
3.3
1.5
7.1
1.7
1.8
4.7
5.4
33.6
1.6
2.2
1.9
2.9
3.0
1.4
6.5
1.9
1.7
4.5
6.0
32.3
1.6
1.9
1.8
2.9.
2.9
1.3
5.9
2.0
1.8
3.9
6.2
32.0
1.7
2.1
1.8
2.8
3.4
1.4
6.1
2.1
1.7
3.3
5.6
30.4
1.6
2.4
1.6
2.6
2.9
1.3
5.8
1.9
2.0
3.2
5.0
31.6
1.6
2.5
1.9
2.5
2.7
1.1
6.5
2.3
2.4
3.2
4.9
30.7
1.7
2.4
1.6
2.6
3.0
1.1
6.4
2.5
2.1
3.1
4.2
29.5
1.7
2.3
1.7
2.3
2.7
1.0
6.7
2.1
1.6
3.1
4.1
26.1
1.7
1.7
1.4
2.3
2.4
.8
5.8
2.0
1.4
3.1
3.5
26.0
1.9
1.7
1.4
2.1
2.2
.9
6.3
1.9
1.4
3.1
3.2
25.7
1.8'
1.6
1.5
2.0
2.2
.8
6.0
2.1
1.5
3.1
3.1
25 OPEC countries 3
26
Ecuador
27
Venezuela
28
Indonesia
29
Middle East countries
30
African countries
28.4
2.2
9.9
3.4
9.8
3.0
24.9
2.2
9.3
3.3
7.9
2.3
22.8
2.2
9.3.
3.1
6.1
2.2
22.7
2.2
9.0
3.1
6.2
2.3
21.6
2.1
8.9
3.0
5.5
2.0
20.7
2.2
8.7
3.3
4.7
1.8
20.6
2.1
8.8
3.0
5.0
1.7
20.0
2.2
8.7
2.8
4.6
1.7
19.6
2.2
8.6
2.5
4.5
1.7
20.4
2.1
8.7
2.4
5.5
1.7
19.2
2.1
8.7
2.2
4.5
1.7
110.8
111.8
110.0
107.8
105.1
103.9
102.0
100.0
99.7
100.2'
100.1'
Other Latin America
9.5
23.1
6.4
3.2
25.8
2.4
4.2
8.7
26.3
7.0
2.9
25.7
2.2
3.9
8.6
26.6
6.9
2.7
25.3
2.1
3.7
8.9
25.5
6.6
2.6
24.4
1.9
3.5
8.9
25.6
7.0
2.7
24.2
1.8
3.4
8.9
25.8
7.0
2.3
24.1
1.7
3.3
9.2
25.5
7.1
2.2
24.0
1.6
3.3
9.3
25.4
7.2
2.0
24.0
1.5
3.3
9.5
25.3
7.1
2.1
23.9
1.5
3.1
9.6
25.6
7.3
2.0
23.9
1.4
3.0
9.5
24.5
7.2
2.0
25.3
1.4
2.9'
39
40
41
42
43
44
45
46
47
Asia
China
Mainland
Taiwan
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia
.3
5.2
.9
1.9
11.2
2.8
6.1
2.2
1.0
.7
5.1
.9
1.8
10.6
2.7
6.0
1.8
1.1
.3
5.5
.9
2.3
10.0
2.8
6.0
1.6
.9
1.1
5.1
1.1
1.5
10.4
2.7
6.0
1.7
.9
.5
4.5
1.2
1.6
9.4
2.4
5.7
1.4
1.0
.6
4.3
1.2
1.3
9.5
2.2
5.6
1.3
.9
.6
3.7
1.3
1.6
8.7
2.0
5.7
1.1
.8
.6
4.3
1.3
1.4
7.3
2.1
5.4
1.0
.7
.4
4.9
1.2
1.5
6.7
2.1
5.4
.9
.7
.9
5.5
1.7
1.4
6.3
1.9
5.4
.9
.6
.6
6.6
1.7
1.3
5.6
1.7
5.4
.8
.8
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa 4
1.5
.8
.1
2.3
1.2
.8
.1
2.1
1.0
.8
.1
2.0
1.0
.9
.1
2.0
1.0
.9
.1
1.9
.9
.9
.1
1.9
.9
.9
.1
1.7
.7
.9
.1
1.6
.7
.9
.1
1.6
.6
.9
.1
1.4
.6
.9
.1
1.3
52 Eastern Europe
U.S.S.R
53
54
Yugoslavia
55
Other
5.3
.2
2.4
2.8
4.4
.1
2.3
2.0
4.3
.3
2.2
1.8
4.6
.2
2.4
1.9
4.2
.1
2.2
1.8
4.0
.3
2.0
1.7
4.0
.3
2.0
1.7
3.4
.1
1.9
1.4
3.2
.1
1.7
1.4
3.1
.1
1.6
1.3
3.4
.3
1.7
1.4
56 Offshore banking centers
57
Bahamas
58
Bermuda
Cayman Islands and other British West Indies
59
60
Netherlands Antilles
Panama
61
Lebanon
62
Hong Kong
63
64
Singapore
Others 6
65
68.9
21.7
.9
12.2
4.2
5.8
.1
13.8
10.3
.0
65.6
21.5
.9
11.8
3.4
6.7
.1
11.4
9.8
.0
63.9
21.1
.9
12.1
3.2
5.4
.1
11.4
9.7
.0
58.8
16.6
.8
12.3
2.3
6.1
.0
11.4
9.4
.0
65.4
21.4
.7
13.4
2.3
6.0
.1
11.5
9.9
.0
60.1
21.4
.7
11.4
2.3
4.4
.1
11.5
8.5
.0
56.2
17.1
.5
13.0
2.3
4.2
.1
9.5
9.3
.0
60.9
19.9
.4
13.2
1.9
5.1
.1
10.5
9.7
.0
64.0
22.3
.7
14.5
1.8
4.1
.1
11.2
9.4
.0
65.6
23.6
.8
13.6
1.7
5.4
.1
11.5
8.8
.0
62.7'
19.5'
.6
15.0
1.3
5.3
.1
12.5
8.4
.0
66 Miscellaneous and unallocated 7
16.8
17.3
16.9
17.3
16.9
16.4
16.8
17.2
19.8
18.6'
18.1'
2 G-10 countries and Switzerland
Belgium-Luxembourg
3
4
France
Germany
5
6
Italy
7
Netherlands
8
Sweden
9
Switzerland
10
United Kingdom
11
Canada
12
Japan
31 Non-OPEC developing countries
32
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
1. The banking offices covered by these data are the U.S. offices and foreign
branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks.
Offices not covered include (1) U.S. agencies and branches of foreign banks, and
(2) foreign subsidiaries of U . S . banks. To minimize duplication, the data are
adjusted to exclude the claims on foreign branches held by a U.S. office or
another foreign branch of the same banking institution. The data in this table
combine foreign branch claims in table 3.14 (the sum of lines 7 through 10) with the
claims of U.S. offices in table 3.18 (excluding those held by agencies and branches
of foreign banks and those constituting claims on own foreign branches).
2. Beginning with June 1984 data, reported claims held by foreign branches
have been reduced by an increase in the reporting threshold for "shell" branches
from $50 million to $150 million equivalent in total assets, the threshold now
applicable to all reporting branches.
3. This group comprises the Organization of Petroleum Exporting Countries
shown individually, other members of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait,
Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates), and Bahrain and
Oman (not formally members of OPEC).
4. Excludes Liberia.
5. Includes Canal Zone beginning December 1979.
6. Foreign branch claims only.
7. Includes N e w Zealand, Liberia, and international and regional organizations.
Nonbank-Reported
Data
A63
3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the
United States1
Millions of dollars, end of period
1986
1984
1983
Type, and area or country
1987
1985
June
Sept.
Dec.
Mar.
June
1 Total
25,346
29,357
27,685
25,126
26,117
25,478
27,020
28,646
2 Payable in dollars
3 Payable in foreign currencies
22,233
3,113
26,389
2,968
24,296
3,389
21,440
3,686
22,278
3,839
21,759
3,719
21,611
5,408
23,717
4,929
By type
4 Financial liabilities
5
Payable in dollars
6
Payable in foreign currencies
10,572
8,700
1,872
14,509
12,553
1,955
13,460
11,257
2,203
11,808
9,717
2,091
13,219
10,947
2,272
12,140
9,782
2,358
12,997
10,397
2,600
13,970
10,625
3,345
7 Commercial liabilities
8
Trade payables
9
Advance receipts and other liabilities . .
14,774
7,765
7,009
14,849
7,005
7,843
14,225
6,685
7,540
13,318
5,670
7,648
12,899
5,723
7,175
13,338
6,357
6,981
14,023
6,813
7,210
14,676
7,147
7,530
13,533
1,241
13,836
1,013
13,039
1,186
11,723
1,595
11,331
1,567
11,977
1,361
11,215
2,808
13,092
1,585
5,742
302
843
502
621
486
2,839
6,728
471
995
489
590
569
3,297
7,560
329
857
434
745
620
4,254
7,126
390
686
280
635
505
4,333
8,625
424
501
319
708
537
5,705
7,917
245
644
270
704
615
5,148
8,258
205
742
368
693
678
5,312
9,202
257
812
305
669
703
6,194
10
11
12
13
14
15
16
17
18
Payable in dollars
Payable in foreign currencies
By area or country
Financial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
19
Canada
764
863
839
367
362
399
431
907
20
21
22
23
24
25
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,596
751
13
32
1,041
213
124
5,086
1,926
13
35
2,103
367
137
3,184
1,123
4
29
1,843
15
3
2,463
854
14
27
1,426
30
3
2,283
842
4
28
1,291
18
5
1,964
614
4
32
1,163
22
3
2,369
669
0
26
1,545
30
3
1,747
398
0
22
1,223
29
5
27
28
29
Asia
Japan
Middle East oil-exporting countries
1,424
991
170
1,777
1,209
155
1,815
1,198
82
1,735
1,264
43
1,881
1,446
3
1,792
1,377
8
1,869
1,459
7
2,046
1,666
7
30
Africa
19
0
14
0
12
0
12
0
4
2
1
1
3
1
1
0
27
41
50
104
63
67
67
66
3,245
62
437
427
268
241
732
4,001
48
438
622
245
257
1,095
4,074
62
453
607
364
379
976
3,817
58
358
561
586
284
864
4,367
75
370
637
613
361
1,138
4,457
100
340
722
493
385
1,301
4,383
85
278
589
372
484
1,287
4,956
111
419
591
339
554
1,367
31
32
33
34
35
36
37
38
39
.
Oil-exporting countries
All other 4
Commercial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
.
40
Canada
1,841
1,975
1,449
1,367
1,312
1,389
1,350
1,250
41
42
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,473
1
67
44
6
585
432
1,871
7
114
124
32
586
636
1,088
12
77
58
44
430
212
1,242
10
294
45
35
235
488
846
37
172
43
45
197
207
873
32
129
59
48
211
215
1,075
28
296
81
88
182
223
1,025
13
244
87
64
154
202
48
49
50
Asia
Japan
Middle East oil-exporting countries •
6,741
1,247
4,178
5,285
1,256
2,372
6,046
1,799
2,829
5,273
2,100
1,985
4,807
2,136
1,492
5,020
2,047
1,668
5,681
2,437
1,931
5,839
2,517
1,842
51
52
Africa
.
Oil-exporting countries
553
167
588
233
587
238
567
215
585
176
622
196
520
170
523
166
53
All other 4
921
1,128
982
1,053
982
977
1,014
1,083
1. For a description of the changes in the International Statistics tables, see
July 1979 BULLETIN, p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
5. Revisions include a reclassification of transactions, which also affects the
totals for Asia and the grand totals.
A64
International Statistics • January 1988
3.23 CLAIMS ON UNAFFILIATED FOREIGNERS
United States1
Reported by Nonbanking Business Enterprises in the
Millions of dollars, end of period
1986
Type, and area or country
1984
1983
1987
1985
June
Sept.
Dec.
Mar.
June
1 Total
34,911
29,901
28,760
33,851
34,007
33,292
33,778
30,994
2 Payable in dollars
3 Payable in foreign currencies
31,815
3,096
27,304
2,597
26,457
2,302
31,669
2,182
31,302
2,706
30,771
2,521
30,716
3,062
27,897
3,097
By type
4 Financial claims
5
Deposits
6
Payable in dollars
Payable in foreign currencies
7
8
Other financial claims
9
Payable in dollars
10
Payable in foreign currencies
23,780
18,496
17,993
503
5,284
3,328
1,956
19,254
14,621
14,202
420
4,633
3,190
1,442
18,774
15,526
14,911
615
3,248
2,213
1,035
24,709
21,401
20,846
555
3,308
2,287
1,021
24,795
18,986
18,422
565
5,808
4,435
1,374
23,461
18,018
17,461
556
5,444
4,089
1,354
24,192
18,142
17,315
827
6,050
4,700
1,350
21,487
15,398
14,214
1,183
6,090
4,815
1,275
11 Commercial claims
12
Trade receivables
13
Advance payments and other claims
11,131
9,721
1,410
10,646
9,177
1,470
9,986
8,696
1,290
9,142
7,802
1,341
9,213
8,030
1,183
9,831
8,680
1,151
9,586
8,579
1,007
9,507
8,507
1,000
14
15
10,494
637
9,912
735
9,333
652
8,537
606
8,445
767
9,220
611
8,701
886
8,868
639
6,488
37
150
163
71
38
5,817
5,762
15
126
224
66
66
4,864
6,812
10
184
223
61
74
6,007
10,144
11
257
148
17
167
9,328
10,501
67
418
129
44
138
9,478
8,759
41
138
111
86
182
7,957
9,342
15
172
163
69
74
8,496
9,814
6
154
92
75
95
9,192
16
17
18
19
20
21
22
Payable in dollars
Payable in foreign currencies
By area or country
Financial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
23
Canada
24
25
26
27
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
31
32
33
5,989
3,988
3,260
4,422
3,970
4,063
3,873
3,329
10,234
4,771
102
53
4,206
293
134
8,216
3,306
6
100
4,043
215
125
7,846
2,698
6
78
4,571
180
48
9,258
3,315
17
75
5,402
176
42
9,438
2,807
19
105
6,060
173
40
9,208
2,624
6
73
6,078
174
24
9,548
3,945
3
71
5,128
164
23
7,486
2,572
6
103
4,296
167
22
Asia
Japan
Middle East oil-exporting countries 2
764
297
4
961
353
13
731
475
4
776
499
2
715
365
2
1,323
1,001
11
1,205
941
11
785
445
10
34
35
Africa
Oil-exporting countries 3
147
55
210
85
103
29
89
25
84
18
85
28
84
19
58
9
36
All other 4
159
117
21
20
86
22
140
16
3,670
135
459
349
334
317
809
3,801
165
440
374
335
271
1,063
3,533
175
426
346
284
284
898
3,304
131
391
418
230
228
674
3,385
126
415
405
184
233
853
3,665
133
395
441
200
215
926
3,612
143
411
444
163
193
1,012
3,715
135
431
524
174
186
984
37
38
39
40
41
42
43
Commercial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
44
Canada
829
1,021
1,023
965
950
919
909
897
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,695
8
190
493
7
884
272
2,052
8
115
214
7
583
206
1,753
13
93
206
6
510
157
1,611
24
148
193
29
323
181
1,687
29
132
207
23
316
192
1,880
28
158
236
48
391
224
1,797
11
130
211
22
415
157
1,741
14
126
198
14
316
183
52
53
54
Asia
Japan
Middle East oil-exporting countries 2
3,063
1,114
737
3,073
1,191
668
2,982
1,016
638
2,574
845
622
2,487
792
600
2,653
862
509
2,604
914
467
2,520
934
391
55
56
Africa
Oil-exporting countries
588
139
470
134
437
130
450
170
469
168
494
135
431
141
377
122
57
All other 4
286
229
257
237
234
220
233
256
1. For a description of the changes in the International Statistics tables, see
July 1979 BULLETIN, p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
Securities Holdings and Transactions
A65
3.24 FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
1987
Transactions, and area or country
1985
1987
1986
Jan.Sept.
Mar.
Apr.
May
June
July
Aug.
Sept."
U.S. corporate securities
STOCKS
81,995
77,054
148,101
129,382
191,343
167,835
23,064
18,001
20,735
17,390
19,632
15,956
18,682
17,054
23,645
21,883
24,774
24,554
22,468
19,435
3 Net purchases, or sales ( - )
4,941
18,719
23,508
5,063
3,345
3,676
1,628
1,763
220
3,033
4 Foreign countries
4,857
18,927
23,463
5,026
3,282
3,711
1,673
1,749
117
2,944
2,057
-438
730
-123
-75
1,665
356
1,718
238
296
24
168
9,559
459
341
936
1,560
4,826
817
3,030
976
3,876
297
373
10,004
1,787
-121
1,068
860
5,503
577
2,432
-1,398
11,069
111
668
1,841
656
19
69
177
783
343
372
-230
2,638
1
61
1,060
332
-101
124
306
211
252
36
21
1,790
59
65
1,474
123
118
120
351
670
48
363
-90
1,686
45
185
669
107
-155
232
-206
671
-238
290
-26
1,009
-30
-1
717
66
-96
153
-80
635
255
387
-913
1,290
-14
27
81
-69
28
135
-325
125
-21
188
-255
171
16
-63
1,305
-15
-12
79
-435
763
-46
157
135
1,242
20
132
84
-208
-45
37
62
-36
-45
14
102
90
18 Foreign purchases
19 Foreign sales
86,587
42,455
123,149
72,499
83,992
59,967
12,127
8,274
9,857
6,559
8,963
6,823
10,364
8,305
9,407
6,509"
7,015
5,592
8,647
4,839
20 Net purchases, or sales (—)
44,132
50,650
24,025
3,853
3,297
2,140
2,060
2,898"
1,423
3,809
21 Foreign countries
44,227
49,803
23,979
4,000
3,107
2,270
1,968
2,889"
1,582
3,769
22
23
24
25
26
27
28
29
30
31
32
33
40,047
210
2,001
222
3,987
32,762
190
498
-2,648
6,091
11
38
39,323
389
-251
387
4,529
33,902
548
1,468
-2,961
11,270
16
139
20,233
187
98
249
1,764
17,731
810
1,614
-482
1,824
-1
-19
3,607
81
198
69
558
2,941
190
65
-12
169
3
-22
2,833
-22
-121
47
50
2,809
161
123
62
-73
1
0
1,682
7
-29
38
182
1,544
23
254
59
252
7
-6
2,204
43
80
37
105
1,795
49
-4
-128
-169
8
8
2,346"
65
116
-65
247
1,913'
87
305
-166
300
1
15
1,647
26
-22
44
312
1,343
-8
46
-14
-93
-17
20
3,140
-37
-56
116
166
2,819
47
624
-87
52
-6
-1
-95
847
45
-147
190
-130
92
9
-159
40
Foreign purchases
2 Foreign sales
1
5
6
7
8
9
10
11
12
13
14
15
16
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Africa
Other countries
17 Nonmonetary international and
regional organizations
BONDS2
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Africa
Other countries
34 Nonmonetary international and
regional organizations
Foreign securities
35 Stocks, net purchases, or sales (—)
Foreign purchases
36
37
Foreign sales
-3,941
20,861
24,803
-1,912
48,787
50,699
-2,279
68,922
71,201
-785
7,015
7,799
-1,174
7,124
8,297
636
8,016
7,379
-257
8,778
9,035
-11
8,583
8,593
-375
8,672
9,047
451
8,655
8,204
38 Bonds, net purchases, or sales ( - )
39
Foreign purchases
40
Foreign sales
-3,999
81,216
85,214
-3,356
166,786
170,142
-1,320
150,277
151,598
-632
16,650
17,281
-581
19,020
19,601
-1,117
20,049
21,166
2,281
25,799
23,518
-586'
16,314'
16,900"
-263
12,306
12,569
-666
12,891
13,558
41 Net purchases, or sales ( - ) , of stocks and bonds
-7,940
-5,268
-3,599
-1,416
-1,755
-481
2,024
-597'
-637
-215
42 Foreign countries
-9,003
-6,352
-4,892
-1,683
-1,889
-499
1,980
-323"
-1,231
-504
43
44
45
46
47
48
-9,887
-1,686
1,797
659
75
38
-17,893
-875
3,484
10,858
52
-1,977
-8,879
-3,439
646
7,613
61
-893
-748
-226
-416
290
-1
-583
-2,704
-3
259
637
8
-86
-1,990
-418
204
1,692
20
-8
-31
-489
106
2,513
6
-124
-568
-596"
-62
1,079
5
-182
-918
-484
81
224
5
-140
-471
-263
-20
85
14
151
1,063
1,084
1,293
267
135
18
44
594
288
Europe
Canada
Latin America and Caribbean
Africa
Other countries
49 Nonmonetary international and
regional organizations
1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait,
Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States).
2. Includes state and local government securities, and securities of U.S.
government agencies and corporations. Also includes issues of new debt securi-
-274
ties sold abroad by U.S. corporations organized to finance direct investments
abroad.
A66
International Statistics • January 1988
3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES
Foreign Transactions
Millions of dollars
1987
Country or area
1985
1987
1986
Jan.Sept.
Mar.
Apr.
May
June
July
Aug.
Sept. p
Transactions, net purchases or sales ( - ) during period 1
1 Estimated total 2
29,208
20,117
18,535
7,040
-2,985
-281
12,279
878
1,110
808
2 Foreign countries 2
28,768
21,220
24,982
4,149
-1,405
3,731
8,646
3,680
2,787
989
4,303
476
1,917
269
976
773
-1,810
1,701
0
-188
17,056
349
7,670
1,283
132
329
4,681
2,613
0
881
17,268
659
10,337
-194
-5
3,354
230
2,909
-22
3,525
5,837
-35
2,141
-212
334
1,641
328
1,640
0
709
375
-35
1,106
-22
32
652
-1,089
-230
-40
703
1,695
4
1,417
352
-166
413
-524
198
1
37
3,640
58
1,534
111
-183
585
617
913
5
413
4,519
54
1,516
204
76
512
1,115
1,042
0
654
-1,007
366
780
-254
-153
-688
-431
-631
4
378
-919
-25
145
-49
-156
-99
-999
258
5
203
4,315
248
2,336
1,731
19,919
17,909
112
308
926
-95
1,129
-108
1,345
-22
-54
1,067
-2,366
177
-1,409
-1,133
6,139
2,371
-38
453
-62
102
-156
-8
-2,379
-2,457
12
32
-30
14
-176
133
-2,880
-2,561
-15
442
-381
11
-302
-90
2,136
-541
11
233
780
-17
-514
1,311
3,531
4,199
-18
300
-673
-4
15
-684
-671
-597
20
-168
-675
30
-49
-656
4,318
1,839
-24
-204
-29
55
-155
72
1,797
799
3
-67
442
-436
18
-1,102
-1,430
157
-6,449
-5,393
3
2,890
2,841
11
-1,580
-1,342
0
-4,013
-3,147
0
3,633
3,515
3
-2,802
-2,875
0
-1,677
-1,722
0
-181
111
-10
28,768
8,135
20,631
21,220
14,214
7,010
24,982
25,379
-398
4,149
5,852
-1,702
-1,405
2,489
-3,894
3,731
4,447
-715
8,646
3,719
4,927
3,680
2,251
1,428
2,787
2,612
175
989
1,700
-711
-1,547
7
-1,529
5
-1,858
19
225
17
-120
0
636
0
-857
1
112
0
329
0
-479
0
3 Europe 2
4
Belgium-Luxembourg
5
Germany 2
6
Netherlands
7
Sweden
8
Switzerland
United Kingdom
9
10
Other Western Europe
Eastern Europe
11
12 Canada
13
14
15
16
17
18
19
20
Latin America and Caribbean
Venezuela
Other Latin America and Caribbean
Netherlands Antilles
Asia
Japan
Africa
Mother
21 Nonmonetary international and regional organizations
22
International
Latin American regional
23
Memo
24 Foreign countries
Official institutions
25
26
Other foreign
27
28
Oil-exporting countries
Middle East 3
Africa 4
1. Estimated official and private transactions in marketable U.S. Treasury
securities with an original maturity of more than 1 year. Data are based on
monthly transactions reports. Excludes nonmarketable U.S. Treasury bonds and
notes held by official institutions of foreign countries.
2. Includes U.S. Treasury notes publicly issued to private foreign residents
denominated in foreign currencies.
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
Interest and Exchange Rates
A67
3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS
Percent per annum
Rate on Oct. 31, 1987
Rate on Oct. 31, 1987
Country
Rate on Oct. 31, 1987
Country
Percent
Month
effective
3.5
7.25
49.0
8.26
7.0
Jan. 1987
July 1987
Mar. 1981
Oct. 1987
Oct. 1983
Austria..
Belgium .
Brazil . . .
Canada..
Denmark
Country
France 1
Germany, Fed. Rep. of.
Italy
Japan
Netherlands
1. A s of the end of February 1981, the rate is that at which the Bank of France
discounts Treasury bills for 7 to 10 days.
2. Minimum lending rate suspended as of Aug. 20, 1981.
NOTE. Rates shown are mainly those at which the central bank either discounts
Percent
Month
effective
7.5
3.0
12.0
2.5
4.5
July 1987
Jan. 1987
Aug. 1987
Feb. 1987
Mar. 1986
Month
effective
Norway
Switzerland
United Kingdom 2
Venezuela
8.0
3.5
June 1983
Jan. 1987
8.0
Oct. 1985
or makes advances against eligible commercial paper and/or government commercial banks or brokers. For countries with more than one rate applicable to
such discounts or advances, the rate shown is the one at which it is understood the
central bank transacts the largest proportion of its credit operations.
3.27 FOREIGN SHORT-TERM INTEREST RATES
Percent per annum, averages of daily figures
1987
Country, or type
1
2
3
4
5
6
7
8
9
10
1984
1985
1986
Apr.
May
June
July
Aug.
Sept.
Oct.
Eurodollars
United Kingdom
Canada
Germany
Switzerland
10.75
9.91
11.29
5.96
4.35
8.27
12.16
9.64
5.40
4.92
6.70
10.87
9.18
4.58
4.19
6.73
9.72
7.62
3.85
3.65
7.25
8.79
8.22
3.73
3.63
7.11
8.85
8.40
3.67
3.77
6.87
9.17
8.61
3.83
3.60
6.91
9.95
9.11
3.93
3.55
7.51
10.12
9.32
3.98
3.51
8.29
9.92
9.12
4.70
4.03
Netherlands
France
Italy
Belgium
Japan
6.08
11.66
17.08
11.41
6.32
6.29
9.91
14.86
9.60
6.47
5.56
7.68
12.60
8.04
4.96
5.31
7.87
10.03
7.21
3.92
5.11
8.09
10.15
7.13
3.77
5.15
8.18
10.67
6.78
3.71
5.21
7.83
10.92
6.54
3.74
5.27
7.88
11.%
6.55
3.71
5.31
7.85
12.36
6.56
3.77
5.63
8.15
11.85
6.84
3.89
NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate.
A68
3.28
International Statistics • January 1988
FOREIGN EXCHANGE RATES
Currency units per dollar
1987
1984
Country/currency
1
2
3
4
5
6
Australia/dollar 1
Austria/schilling
Belgium/franc
Canada/dollar
China, P.R./yuan
Denmark/krone
7
8
9
10
11
12
13
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
Hong Kong/dollar
India/rupee..,
Ireland/pound
14
15
16
17
18
19
20
Italy/lira
Japan/yen
Malay sia/ringgit
Netherlands/guilder
N e w Zealand/dollar 1
Norway/krone
Portugal/escudo
21
22
23
24
25
26
27
28
29
30
Singapore/dollar
South Africa/rand 1
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
United Kingdom/point 1
1985
1986
May
June
July
Aug.
Sept.
Oct.
87.937
20.005
57.749
1.2953
2.3308
10.354
70.026
20.676
59.336
1.3658
2.9434
10.598
67.093
15.260
44.662
1.38%
3.4615
8.0954
71.42
12.574
37.091
1.3411
3.7314
6.7333
71.79
12.793
37.712
1.338
3.7314
6.8555
70.79
12.996
38.329
1.3262
3.7314
7.0179
70.72
13.041
38.528
1.3256
3.7314
7.1279
72.68
12.765
37.657
1.3154
3.7314
6.9893
71.12
12.674
37.494
1.3097
3.7314
6.9262
6.0007
8.7355
2.8454
112.73
7.8188
11.348
108.64
6.1971
8.9799
2.9419
138.40
. 7.7911
12.332
106.62
5.0721
6.9256
2.1704
139.93
7.8037
12.597
134.14
4.3604
5.9748
1.7881
133.35
7.8049
12.666
149.59
4.4281
6.0739
1.8189
136.06
7.8080
12.837
147.25
4.4882
6.1530
1.8482
139.313
7.8090
13.01
144.99
4.5017
6.1934
1.8553
140.63
7.8091
13.085
144.18
4.3954
6.0555
1.8134
138.40
7.8035
12.993
147.54
4.3570
6.0160
1.8006
138.61
7.8077
12.995
148.72
1756.10
237.45
2.3448
3.2083
57.837
8.1596
147.70
1908.90
238.47
2.4806
3.3184
49.752
8.5933
172.07
1491.16
168.35
2.5830
2.4484
52.456
7.3984
149.80
1290.80
140.48
2.4759
2.0154
57.639
6.6632
139.18
1316.50
144.55
2.5078
2.0490
58.686
6.7147
142.12
1337.%
150.29
2.5414
2.0814
59.644
6.7632
144.51
1344.18
147.33
2.5361
2.0903
58.923
6.7911
145.57
1310.86
143.29
2.5189
2.0413
63.352
6.6505
142.94
1302.58
143.32
2.5308
2.0267
64.031
6.6311
142.82
2.1325
69.534
807.91
160.78
25.428
8.2706
2.3500
39.633
23.582
133.66
2.2008
45.57
861.89
169.98
27.187
8.6031
2.4551
39.889
27.193
129.74
2.1782
43.952
884.61
140.04
27.933
7.1272
1.7979
37.837
26.314
146.77
2.1202
49.87
832.53
125.28
28.988
6.2606
1.4705
32.354
25.629
166.66
2.1176
49.41
818.39
126.33
29.171
6.3482
1.5085
31.226
25.779
162.88
2.1183
48.52
811.81
126.97
29.405
6.4466
1.5365
31.114
26.041
160.90
2.1082
48.16
811.87
125.57
29.643
6.4898
1.5364
30.290
25.926
159.96
2.0924
48.86
810.07
121.34
29.902
6.3844
1.5029
30.151
25.765
164.46
2.0891
48.79
808.47
118.60
30.347
6.3560
1.4940
30.036
25.783
166.20
138.19
143.01
112.22
%.05
97.78
99.36
99.43
97.23
MEMO
31 United States/dollar 2
1. Value in U.S. cents.
2. Index of weighted-average exchange value of U.S. dollar against the
currencies of 10 industrial countries. The weight for each of the 10 countries is the
1972-76 average world trade of that country divided by the average world trade of
all 10 countries combined. Series revised as of August 1978 (see FEDERAL
RESERVE B U L L E T I N , v o l . 6 4 , A u g u s t 1 9 7 8 , p . 7 0 0 ) .
%.65
3. Currency reform.
NOTE. Averages of certified noon buying rates in N e w York for cable transfers.
Data in this table also appear in the Board's G.5 (405) release. For address, see
inside front cover.
A69
Guide to Tabular Presentation,
Statistical Releases, and Special Tables
GUIDE TO TABULAR
Symbols and
c
e
p
r
*
PRESENTATION
Abbreviations
Corrected
Estimated
Preliminary
Revised (Notation appears on column heading when
about half of the figures in that column are changed.)
Amounts insignificant in terms of the last decimal place
shown in the table (for example, less than 500,000
when the smallest unit given is millions)
General
0
n.a.
n.e.c.
IPCs
REITs
RPs
SMSAs
....
Calculated to be zero
Not available
Not elsewhere classified
Individuals, partnerships, and corporations
Real estate investment trusts
Repurchase agreements
Standard metropolitan statistical areas
Cell not applicable
Information
Minus signs are used to indicate (1) a decrease, (2) a negative
figure, or (3) an outflow.
"U.S. government securities" may include guaranteed
issues of U.S. government agencies (the flow of funds figures
also include not fully guaranteed issues) as well as direct
STATISTICAL
obligations of the Treasury. "State and local government"
also includes municipalities, special districts, and other political subdivisions.
In some of the tables details do not add to totals because of
rounding.
RELEASES
List Published Semiannually,
with Latest Bulletin
Reference
Anticipated schedule of release dates for periodic releases
SPECIAL
Issue
December 1987
Page
A77
TABLES
Published Irregularly, with Latest Bulletin Reference
Assets and liabilities of commercial banks, June 30, 1986
Assets and liabilities of commercial banks, September 30, 1986
Assets and liabilities of commercial banks, December 31, 1986
Assets and liabilities of commercial banks, March 31, 1987
Assets and liabilities of U.S. branches and agencies of foreign banks, September 30, 1986
Assets and liabilities of U.S. branches and agencies of foreign banks, December 31, 1986
Assets and liabilities of U.S. branches and agencies of foreign banks, March 31, 1987
Assets and liabilities of U.S. branches and agencies of foreign banks, June 30, 1987
Terms of lending at commercial banks, November 1986
Terms of lending at commercial banks, February 1987
Terms of lending at commercial banks, May 1987
Terms of lending at commercial banks, August 1987
Pro forma balance sheet and income statements for priced service operations, June 30, 1987
Special tables begin on next page.
June
July
July
October
March
May
August
November
February
May
September
January
November
1987
1987
1987
1987
1987
1987
1987
1987
1987
1987
1987
1988
1987
A76
A70
A76
A70
A70
A76
A70
A70
A70
A70
A70
A70
A74
A70
4.23
Special Tables • January 1988
TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, August 3-7, 19871
A. Commercial and Industrial Loans 2
Characteristic
Amount of
loans
(thousands
of dollars)
Average
size
(thousands
of dollars)
Weighted
average
maturity3
Days
Loan rate (percent)
Weighted
average
effective 4
Standard
error5
Interquartile
range6
Loans
made
under
commitment
(percent)
Participation
loans
(percent)
ALL BANKS
15,529,996
8,127
*
7.53
.04
7.25-7.79
78.5
5.6
6,707,864
5,502,495
1,205,369
622
811
302
16
14
21
7.87
7.68
8.71
.16
.16
.15
7.25-8.12
7.19-7.93
7.76-9.66
81.9
81.7
82.7
7.0
6.7
8.4
10,387,888
5,400,259
4,987,630
138
151
127
119
74
167
8.81
8.54
9.09
.18
.23
.19
7.84-9.65
7.59-9.38
8.48-9.65
76.2
74.7
77.9
13.8
19.6
7.6
8 Demand 9
9
Fixed rate
10
Floating rate
11,085,901
1,099,847
9,986,053
234
442
222
*
*
*
8.79
7.55
8.93
.12
.17
.12
7.76-9.65
6.94-7.65
8.51-9.65
80.1
91.6
78.9
5.9
2.1
6.3
1 Overnight8
2 One month and under
3
Fixed rate
4
Floating rate
5 Over one month and under a year .
6
Fixed rate
7
Floating rate
11 Total short term
43,711,649
323
42
8.20
.15
7.36-8.75
78.9
7.8
12 Fixed rate (thousands of dollars)...
13
1-24
14
25-49
15
50-99
16
100-499
17
500-999
18
1000 and over
27,515,318
226,738
124,988
134,771
488,361
305,991
26,234,470
586
7
31
62
177
646
8,765
19
107
114
90
70
56
16
7.76
11.22
10.55
10.20
9.49
8.20
7.66
.12
.17
.22
.19
.18
.08
.06
7.26-7.97
10.25-12.19
9.84-11.57
9.57-10.94
8.42-10.47
7.58-8.64
7.25-7.89
78.9
19.0
30.4
24.6
46.9
77.9
80.5
8.4
.2
.1
.8
3.4
4.2
8.7
19 Floating rate (thousands of dollars)
20
1-24
21
25-49
22
50-99
23
100-499
24
500-999
25
1000 and over
16,196,331
413,423
496,363
770,480
2,936,644
1,385,636
10,193,785
184
10
34
65
198
666
4,253
138
144
134
143
175
164
120
8.96
10.32
10.19
9.94
9.53
9.22
8.57
.12
.10
.11
.07
.02
.05
.11
8.31-9.65
9.58-10.86
9.38-10.75
9.14-10.65
8.75-10.20
8.57-9.69
7.65-9.31
78.9
68.5
70.7
81.0
82.2
83.3
78.0
6.8
.9
4.8
4.1
5.6
7.4
7.7
Months
26 Total long term
4,107,851
226
52
8.78
.24
7.56-9.65
72.3
5.7
27 Fixed rate (thousands of dollars)...
28
1-99
29
100-499
30
500-999
31
1000 and over
1,631,886
124,599
68,226
133,674
1,305,388
209
18
206
598
7,515
57
50
54
45
59
8.68
12.11
10.41
9.49
8.18
.31
.34
.18
.62
.38
7.56-9.31
10.25-12.75
9.17-11.30
8.99-10.20
7.43-8.69
74.8
14.7
44.7
37.9
85.9
5.6
1.5
4.7
53.7
1.1
32 Floating rate (thousands of dollars)
33
1-99
34
100-499
35
500-999
36
1000 and over
2,475,965
191,560
358,589
120,155
1,805,660
239
24
193
661
5,039
48
41
51
47
48
8.84
10.54
10.14
9.24
8.38
.19
.18
.17
.13
.15
7.72-9.65
9.65-11.63
9.38-10.75
8.57-9.65
7.51-9.01
70.6
38.2
49.7
64.4
78.6
5.8
1.5
3.1
3.3
6.9
6.5
6.3
10.8
3.8
Loan rate (percent)
T»_. 11
Prime
rate
Days
Effective4
Nominal10
7.20
7.26
7.45
7.25
8.25
8.26
8.36
8.30
80.1
84.2
79.2
58.9
LOANS MADE BELOW PRIME12
Overnight8
One month and under
Over one month and under a year
Demand 9
14,789,118
5,581,887
4,314,622
3,416,337
9,862
3,995
974
1,796
14
102
*
7.47
7.53
7.70
7.47
41 Total short term
28,101,964
3,045
22
7.51
7.26
8.27
78.2
6.8
42 Fixed rate
43 Floating rate
23,810,304
4,291,661
3,880
1,389
14
120
7.49
7.62
7.24
7.37
8.26
8.33
80.9
63.0
6.8
6.9
37
38
39
40
Months
44 Total long term
1,942,217
1,752
46
7.65
7.46
8.31
90.1
5.4
45 Fixed rate
46 Floating rate . .
960,376
981,842
1,578
1,963
51
42
7.68
7.62
7.52
7.40
8.35
8.28
84.1
96.0
7.3
3.4
For notes see end of table.
Financial Markets
A71
4.23 Continued
A. Commercial and Industrial Loans
Characteristic
Amount of
loans
(thousands
of dollars)
Continued
Average
size
(thousands
of dollars)
Weighted
average
maturity3
Days
Loan rate (percent)
Weighted
average
effective 4
Standard
Interquartile
range 6
Loans
made
under
commitment
(percent)
Participation
loans
(percent)
Most
common
pricing
LARGE BANKS
1 Overnight8
*
13,559,929
10,061
7.50
.07
7.25-7.72
76.0
3.6
Fed funds
2 One month and under
3
Fixed rate
4
Floating rate
5,221,946
4,516,988
704,958
2,491
4,488
647
15
14
19
7.70
7.57
8.52
.10
.09
.20
7.19-7.93
7.17-7.87
7.62-9.49
83.1
82.9
84.8
6.0
6.4
3.4
Domestic
Domestic
Domestic
5 Over one month and under a year
6
Fixed rate
7
Floating rate
6,520,728
4,210,278
2,310,450
783
2,724
341
98
66
157
8.42
8.32
8.58
.11
.17
.21
7.59-9.11
7.59-8.94
7.89-9.17
82.7
82.1
83.7
17.2
22.1
8.4
Foreign
Foreign
Prime
8 Demand 9
9
Fixed rate
10
Floating rate
6,782,199
462,720
6,319,479
531
1,734
505
*
*
8.71
7.61
8.79
.21
.32
.22
7.63-9.65
7.37-7.57
7.83-9.65
75.9
90.3
74.9
4.0
4.4
3.9
Prime
Domestic
Prime
11 Total short term
32,084,802
1,307
29
7.98
.11
7.32-8.57
78.5
6.8
Fed funds
12 Fixed rate (thousands of dollars)
13
1-24
14
25-49
15
50-99
16
100-499
17
500-999
18
1000 and over
22,740,014
7,126
8,051
15,679
124,586
160,198
22,424,374
5,468
10
33
66
222
673
10,361
16
104
91
88
62
50
16
7.67
10.18
9.92
9.44
8.80
8.34
7.66
.09
.16
.43
.22
.11
.12
.09
7.25-7.89
9.38-11.02
9.58-10.67
9.04-10.11
8.21-9.58
7.65-8.65
7.25-7.86
78.8
32.0
21.4
39.6
63.1
83.7
78.9
7.6
5.1
1.2
2.0
2.6
3.0
7.7
Fed funds
Prime
Prime
Prime
Prime
Domestic
Fed funds
9,344,787
82,032
98,881
195,510
1,020,245
655,438
7,292,681
458
11
34
65
209
678
5,421
124
143
139
138
145
138
119
8.72
10.08
9.97
9.73
9.45
9.16
8.52
.18
.12
.13
.07
.02
.08
.20
7.81-9.58
9.20-10.75
9.11-10.75
9.11-10.20
8.60-9.96
8.57-9.66
7.57-9.14
77.9
83.0
82.0
83.2
86.7
84.8
75.7
5.0
.3
.7
1.1
2.9
6.7
5.3
Prime
Prime
Prime
Prime
Prime
Prime
Prime
19 Floating rate (thousands of dollars) . . .
20
1-24
21
25-49
22
50-99
23
100-499
24
500-999
25
1000 and over
*
Months
26 Total long term
2,752,198
1,450
52
8.28
.22
7.43-8.84
81.5
2.2
Domestic
27 Fixed rate (thousands of dollars)...
28
1-99
29
100-499
30
500-999
31
1000 and over
1,113,028
7,666
13,900
25,119
1,066,343
2,241
27
255
715
8,876
58
49
52
48
59
8.06
11.54
10.65
9.95
7.96
.29
.32
.24
1.17
.23
7.43-8.57
10.35-12.40
10.20-11.30
8.02-10.52
7.43-8.53
87.9
41.3
46.5
77.3
89.1
.0
1.0
.0
.0
.0
Foreign
Other
Domestic
Fed funds
Foreign
32 Floating rate (thousands of dollars)
33
1-99
34
100-499
35
500-999
36
1000 and over
1,639,170
24,517
77,910
58,101
1,478,642
1,169
34
226
643
6,201
47
40
47
52
47
8.42
10.19
9.59
9.19
8.30
.21
.28
.12
.22
.23
7.53-9.31
9.14-10.75
9.11-9.92
8.57-9.73
7.44-8.84
77.2
58.4
65.5
77.7
78.1
3.6
.2
4.8
.0
3.8
Domestic
Prime
Prime
Prime
Domestic
77.8
83.9
82.1
40.0
3.8
5.9
9.5
1.5
Loan rate (percent)
* 11
Prime rate
Days
Effective 4
Nominal 10
7.44
7.50
7.58
7.50
7.17
7.24
7.34
7.27
LOANS M A D E BELOW PRIME12
Overnight 8
One month and under
Over one month and under a year
Demand 9
12,854,344
4,635,102
3,376,213
2,280,917
11,398
5,903
5,819
4,426
14
92
41 Total short term
23,146,576
7,694
19
7.47
7.22
8.25
75.9
4.8
42 Fixed rate
43 Floating rate
19,910,195
3,236,381
8,559
4,745
12
115
7.46
7.56
7.20
7.32
8.25
8.25
79.4
54.2
4.9
4.6
37
38
39
40
*
8.25
8.25
8.25
8.25
Months
44 Total long term
1,664,677
7,236
46
7.58
7.40
8.25
93.7
0.3
45 Fixed rate
46 Floating rate . .
784,716
879,961
9,026
6,149
54
40
7.56
7.60
7.43
7.39
8.25
8.25
90.1
96.8
0.6
0.0
For notes see end of table.
A70
Special Tables • January 1988
4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, August 3-7, 1987'—Continued
A. Commercial and Industrial Loans — Continued 2
Characteristic
Amount of
loans
(thousands
of dollars)
Average
size
(thousands
of dollars)
Weighted
average
maturity3
Days
Loan rate (percent)
Weighted
average
effective 4
Standard
error5
Interquartile
range6
Loans
made
under
commitment
(percent)
Participation
loans
(percent)
OTHER BANKS
1 Overnight 8
1,970,067
2 One month and under
3
Fixed rate
4
Floating rate
1,485,918
985,508
500,410
171
170
172
18
14
24
8.45
8.18
8.97
7.57-8.81
7.50-8.24
8.04-9.66
77.7
76.6
79.7
10.7
8.3
15.5
5 Over one month and under a year .
6
Fixed rate
7
Floating rate
3,867,161
1,189,981
2,677,180
58
35
83
153
104
175
9.46
9.31
9.53
8.53-10.20
7.97-10.47
8.57-10.20
65.3
48.6
72.8
8.1
10.9
6.9
4,303,702
637,128
3,666,574
124
286
113
8.92
7.50
9.16
8.30-9.65
6.90-7.80
8.57-9.65
86.7
92.5
85.7
8.9
.4
10.4
8 Demand 9
9
Fixed rate
10
Floating rate
19.1
11,626,848
105
8.83
7.72-9.65
79.9
10.6
12 Fixed rate (thousands of dollars)...
13
1-24
14
25-49
15
50-99
16
100-499
17
500-999
18
1000 and over
4,775,304
219,611
116,937
119,092
363,775
145,793
3,810,096
112
6
31
62
165
618
4,597
34
107
116
90
73
63
20
8.17
11.26
10.60
10.30
9.73
8.04
7.70
7.39-8.19
10.25-12.19
9.84-11.57
9.58-11.20
8.51-10.97
7.56-8.60
7.33-7.96
79.5
12.4
18.6
31.0
22.7
41.4
71.6
90.2
.1
.1
.6
3.6
5.6
14.9
19 Floating rate (thousands of dollars)
20
1-24
21
25-49
22
50-99
23
100-499
24
500-999
25
1000 and over
6,851,544
331,391
397,482
574,970
1,916,399
730,198
2,901,104
101
9
34
65
192
655
2,758
151
144
133
145
187
180
122
9.29
10.38
10.25
10.01
9.57
9.27
8.72
8.57-9.92
9.65-10.97
9.58-10.75
9.38-10.75
8.84-10.20
8.57-9.92
8.10-9.58
80.2
65.0
67.9
80.3
79.8
81.9
83.5
9.4
1.1
5.9
5.2
7.0
8.0
13.6
11 Total short term
Months
1,355,652
83
9.80
8.87-10.53
53.5
12.9
27 Fixed rate (thousands of dollars)...
28
1-99
29
100-499
30
500-999
31
1000 and over
518,858
116,932
54,326
108,555
239,045
71
17
197
577
4,462
10.00
12.14
10.34
9.39
9.16
8.99-10.53
10.25-12.75
9.07-11.07
8.99-9.87
7.56-9.92
46.7
12.9
44.2
28.7
72.0
17.7
1.5
5.9
66.1
6.2
32 Floating rate (thousands of dollars)
33
1-99
34
100-499
35
500-999
36
1000 and over
836,795
167,043
280,679
62,054
327,018
93
23
185
679
2,727
9.68
10.59
10.30
9.29
8.75
8.77-10.52
9.65-11.85
9.65-10.75
8.57-9.65
7.81-9.38
57.8
35.2
45.3
51.9
81.2
10.0
1.6
2.6
6.5
21.2
26 Total long term
Loan rate (percent)
Days
Prime rate
Effective 4
Nominal
LOANS M A D E BELOW PRIME12
37
38
39
40
Overnight 8
One month and under
Over one month and under a year
Demand 9
41 Total short term
42 Fixed rate
43 Floating rate
1,934,775
946,784
938,409
1,135,420
5,203
1,546
244
819
4,955,388
797
3,900,108
1,055,280
1,023
438
15
136
23
133
7.67
7.67
8.13
7.40
7.39
7.40
7.85
7.23
8.25
8.29
8.75
8.40
95.4
85.7
68.7
96.8
24.5
8.2
15.3
8.3
7.70
7.44
8.39
88.8
15.9
7.67
7.80
7.42
7.54
8.34
8.57
8.21
7.72
7.95
7.49
16.5
14.0
Months
44 Total long term
277,541
316
45 Fixed rate
46 Floating rate
175,660
101,881
337
285
For notes see end of table.
8.70
68.9
8.81
8.51
57.1
89.0
37.6
33.2
Financial Markets
4.23
A73
Continued
B. Construction and Land Development Loans
Loan rate (percent)
Characteristic
Amount of
loans
(thousands
of dollars)
Average
size
(thousands
of dollars)
Weighted
average maturity
(months) 3
Weighted
average
effective 4
Standard
error 5
Interquartile
range 6
Loans made
under commitment
(percent)
Participation
loans
(percent)
ALL BANKS
1
Total
3,679,913
236
5
9.30
.11
8.75-9.65
88.4
16.0
2
Fixed rate (thousands of dollars)
1,944,077
40,789
40,700
63,707
36,819
1,762,062
327
12
34
71
175
11,236
3
6
18
9
9
2
9.23
11.04
11.12
10.56
10.13
9.08
.31
.25
.36
.50
.71
.26
8.75-9.28
10.47-12.13
10.47-12.03
10.47-10.97
10.47-10.78
8.75-9.28
92.0
41.6
31.6
12.7
81.7
97.6
6.8
36.8
14.2
11.3
5.2
5.8
1,735,836
50,856
52,673
68,682
306,440
1,257,185
180
10
36
72
200
3,256
8
8
7
10
13
7
9.38
10.35
9.85
10.01
9.55
9.25
.13
.12
.09
.10
.15
.15
8.57-9.92
9.66-10.75
9.42-10.24
9.65-10.75
9.11-10.20
8.57-9.92
84.4
84.3
89.5
78.9
62.6
89.8
26.3
1.6
1.9
3.6
19.7
31.2
621,561
218,765
2,839,587
63
177
626
9
5
4
9.75
9.65
9.18
.15
.12
.11
9.17-10.47
9.21-10.34
8.73-9.32
67.1
89.8
93.0
19.1
6.0
16.1
2,814,435
1,512
3
9.14
.14
8.73-9.32
95.0
16.6
1,753,481
1,510
1,054
*
5,094
11
37
*
2
9
11
*
9.07
10.20
9.99
*
.36
.18
.51
*
8.75-9.28
9.92-10.75
9.92-10.75
*
97.5
67.1
54.8
*
3,829
1,746,234
215
11,832
18
2
7.23
9.08
1.06
.34
1.13-10.75
8.75-9.28
71.8
97.6
5.9
4.7
.0
*
50.4
5.8
1,060,953
5,701
7,393
14,718
85,785
947,357
699
11
34
73
232
4,438
5
10
9
8
9
4
9.25
9.80
9.60
9.71
9.63
9.20
.18
.15
.09
.12
.13
.23
8.57-9.79
9.52-10.20
9.11-9.92
9.38-9.92
9.31-9.92
8.51-9.69
91.0
93.1
88.1
90.7
76.8
92.3
34.4
5.2
5.9
8.6
7.5
37.6
189,325
148,590
2,476,519
355
642
2,257
6
9.24
9.67
9.10
.20
.15
.16
8.12-9.65
9.21-10.34
8.73-9.28
97.1
96.4
94.8
14.7
4.2
17.5
865,478
63
12
9.83
.09
9.11-10.47
66.9
13.8
190,596
39,280
39,646
62,853
32,990
*
34
12
34
71
171
*
10
6
18
9
8
*
10.66
11.07
11.15
10.58
10.47
*
.21
.40
.18
.30
.22
*
10.47-10.97
10.47-12.13
10.47-12.03
10.47-10.97
10.47-10.78
*
41.4
40.6
30.9
12.0
82.9
*
14.6
38.0
14.6
11.2
.0
*
674,883
45,155
45,279
53,965
220,656
309,828
83
9
36
71
190
1,795
13
8
7
10
14
13
9.60
10.42
9.89
10.09
9.51
9.41
.20
.11
.13
.14
.29
.20
9.11-10.20
9.92-10.75
9.42-10.61
9.65-10.75
8.84-10.20
8.87-10.20
74.1
83.1
89.8
75.6
57.1
82.2
13.6
1.3
2.2
24.5
11.5
432,236
70,175
363,068
47
70
106
11
8
14
9.97
9.60
9.71
.16
.21
.08
9.58-10.65
8.59-10.20
9.11-10.20
53.9
75.8
80.6
21.1
10.0
6.0
4
5
6
7
8
9
10
1-24
25-49
50-99
100-499
500 and over
Floating rate (thousands of dollars) . . .
11
17
1-24
25-49
50-99
100-499
13
500 and over
By type of construction
14 Single family
IS Multifamily
16 Nonresidential
LARGE BANKS13
1 Total
2
3
4
5
6
7
8
9
10
Fixed rate (thousands of dollars)
1-24
25-49
50-99
100-499
500 and over
Floating rate (thousands of dollars) . . .
11
12
1-24
25-49
50-99
100-499
13
500 and over
By type of construction
14 Single family
IS Multifamily
1 6 Nonresidential
4
3
OTHER BANKS13
1 Total
2
3
4
s
6
7
8
9
Fixed rate (thousands of dollars)
1-24
25-49
50-99
100-499
500 and over
Floating rate (thousands of dollars) . . .
10
11
12
1-24
25-49
50-99
100-499
13
500 and over
By type of construction
14 Single family
IS Multifamily
1 6 Nonresidential
Note: 41.2 percent of construction and land development loans were priced
relative to the prime rate.
For notes see end of table,
*Fewer than 10 sample loans.
l.l
A74
Special Tables • January 1988
4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, August 3-7, 19871—Continued
C. Loans to Farmers13
Size class of loans (thousands)
Characteristic
All sizes
$1-9
$10-24
$25-49
$50-99
$250
$100-249
and over
ALL BANKS
Amount of loans (thousands of dollars)
Number of loans
i Weighted average maturity (months) 3
1
2
4
5
6
7
8
9
10
11
12
Weighted average interest rate (percent) 4
Standard error
Interquartile rante
By purpose of loan
Feeder livestock
Other livestock
Other current operating expenses
Farm machinery and equipment
Farm real estate
Other
Percentage of amount of loans
13 With floating rates
14 Made under commitment
15
16
17
18
19
20
By purpose of loan
Feeder livestock
Other livestock
Other current operating expenses
Farm machinery and equipment
Farm real estate
Other
$972,091
46,944
8.0
$113,363
33,550
7.0
$107,665
7,292
6.9
$96,060
2,797
7.3
$140,093
1,981
15.3
$162,069
989
8.6
$352,841
336
5.4
10.41
.57
9.50-11.33
11.54
.39
10.77-12.31
11.19
.26
10.34-12.13
11.09
.48
10.36-12.13
10.98
.41
10.52-11.83
10.59
.53
10.11-11.07
9.32
.79
8.60-10.38
9.92
11.05
10.82
10.77
10.88
9.77
11.88
12.25
11.40
11.39
11.59
12.04
11.42
12.04
11.19
10.22
11.76
10.24
11.19
10.27
11.21
*
*
11.19
11.95
10.63
*
*
10.56
*
8.93
*
10.83
*
*
10.08
*
*
11.57
10.79
9.93
9.00
55.9
59.9
52.2
46.9
55.9
50.6
65.7
51.8
55.2
47.2
45.4
52.3
59.6
77.7
29.6
3.8
46.8
2.8
2.6
14.4
14.7
4.3
68.4
6.4
1.2
5.1
10.9
6.4
69.2
2.1
3.2
8.1
20.8
2.4
57.5
*
*
36.8
7.0
30.7
*
*
17.7
*
45.2
*
54.4
*
*
32.9
*
*
8.6
11.8
19.3
19.8
$374,132
4,194
5.1
$8,197
2,050
5.3
$12,060
818
6.2
$16,781
483
6.4
$24,929
387
6.5
$43,127
296
7.8
$269,038
161
4.7
9.30
.55
8.60-10.20
10.53
.38
10.00-10.83
10.15
.16
9.58-10.74
10.02
.42
9.50-10.52
9.94
.35
9.24-10.47
9.92
.37
9.14-10.52
9.02
.74
8.60-9.84
8.98
9.40
9.84
10.28
10.19
9.05
10.35
10.54
10.46
11.09
11.86
10.47
9.94
*
9.99
10.46
9.98
*
*
10.13
*
10.03
8.79
*
10.16
*
*
9.81
*
*
9.81
*
*
9.75
*
*
10.18
10.08
9.97
9.87
8.73
59.6
93.2
90.5
82.4
91.8
85.3
92.2
84.7
95.3
91.8
90.0
91.7
47.0
94.7
42.5
3.0
32.5
.6
.9
20.5
9.7
1.4
68.0
5.2
3.2
12.6
15.2
*
19.3
7.5
53.7
*
*
22.2
*
27.2
*
50.5
#
60.6
*
*
46.7
*
*
44.2
*
*
25.6
*
*
16.3
14.8
22.6
19.7
21.2
$597,959
42,750
9.4
$105,166
31,500
7.1
$95,604
6,474
7.0
$79,279
2,313
7.4
$115,165
1,594
16.6
$118,942
693
8.8
*
*
*
11.11
.12
10.47-11.91
11.62
.10
10.79-12.31
11.32
.20
10.50-12.19
11.32
.22
10.52-12.17
11.20
.19
10.79-11.83
10.84
.37
10.21-11.80
*
*
#
11.09
11.77
11.18
10.82
10.99
10.64
11.96
12.29
11.47
11.41
*
11.69
*
11.42
*
11.32
*
11.31
*
*
*
11.44
*
*
*
10.93
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
LARGE B A N K S 1 3
1
2
3
Amount of loans (thousands of dollars)
Number of loans
Weighted average maturity (months) 3
4
5
6
Weighted average interest rate (percent) 4
Standard error
Interquartile rante 6
/
8
9
10
11
12
By purpose of loan
Feeder livestock
Other livestock
Other current operating expenses
Farm machinery and equipment
Farm real estate
Other
Percentage of amount of loans
13 With floating rates
14 Made under commitment
15
16
17
18
19
20
By purpose of loan
Feeder livestock
Other livestock
Other current operating expenses
Farm machinery and equipment
Farm real estate
Other
OTHER BANKS13
1
2
3
Amount of loans (thousands of dollars)
Number of loans
Weighted average maturity (months) 3
4
5
6
Weighted average interest rate (percent) 4
Standard error
Interquartile rante
/
8
9
10
11
12
By purpose of loan
Feeder livestock
Other livestock
Other current operating expenses
Farm machinery and equipment
Farm real estate
Other
For notes see end of table.
12.38
*Fewer than 10 sample loans.
Financial Markets
4.23
A75
Continued
C. Loans to Farmers 14 —Continued
Size class of loans (thousands)
Characteristic
Percentage of amount of loans
13 With floating rates
14 Made under commitment
15
16
17
18
19
20
By purpose of loan
Feeder livestock
Other livestock
Other current operating expenses
Farm machinery and equipment
Farm real estate
Other
All sizes
$1-9
$10-24
$25-49
$50-99
$100-249
53.6
39.1
49.2
44.2
51.3
46.3
60.0
44.8
46.5
37.6
29.2
38.0
21.6
4.3
55.7
4.1
3.6
10.6
15.1
4.5
68.4
6.5
10.3
*Fewer than 10 sample loans.
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 subsample of 250
banks also report 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 than $1,000 are excluded from the survey.
As of Dec. 31, 1985, assets of most of the large banks were at least $5.5 billion.
For all insured banks total assets averaged $165 million.
2. Beginning with the August 1986 survey respondent banks provide information on the type of base rate used to price each commercial and industrial loan
made during the survey week. This reporting change is reflected in the new
column on the most common base pricing rate in table A and footnote 13 from
table B.
3. Average maturities are weighted by loan size and exclude demand loans.
4. Effective (compounded) annual interest rates are calculated from the stated
rate and other terms of the loan and weighted by loan size.
5. The chances are about two out of three that the average rate shown would
*
4.5
$250
and over
*
*
21.1
*
39.9
*
*
*
70.3
58.3
27.2
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
differ by less than this amount from the average rate that would be found by a
complete survey of lending at all banks.
6. The interquartile range shows the interest rate range that encompasses the
middle 50 percent of the total dollar amount of loans made.
7. The most common base rate is that 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.
8. Overnight loans are loans that mature on the following business day.
9. Demand loans have no stated date of maturity.
10. Nominal (not compounded) annual interest rates are calculated from survey
data on the stated rate and other terms of the loan and weighted by loan size.
11. The prime rate reported by each bank is weighted by the volume of loans
extended and then averaged.
12. The proportion of loans made at rates below prime may vary substantially
from the proportion of such loans outstanding in banks' portfolios.
13. Among banks reporting loans to farmers (Table C), most "large banks"
(survey strata 1 to 3) had over $600 million in total assets, and most "other banks"
(survey strata 4 to 6) had total assets below $600 million.
The survey of terms of bank lending to farmers now includes loans secured by
farm real estate. In addition, the categories describing the purpose of farm loans
have now been expanded to include "purchase or improve farm real estate." In
previous surveys, the purpose of such loans was reported as "other."
A76
Federal Reserve Board of Governors
Chairman
J O H N S O N , Vice Chairman
ALAN GREENSPAN,
M A R T H A R . SEGER
MANUEL H .
WAYNE D . ANGELL
OFFICE OF BOARD
DIVISION
MEMBERS
JOSEPH R. COYNE, Assistant
DONALD J. WINN, Assistant
to the
to the
Board
Board
LYNN SMITH Fox, Special Assistant to the Board
BOB STAHLY MOORE, Special Assistant to the Board
OF INTERNATIONAL
E D W I N M . T R U M A N , Staff Director
LARRY J. PROMISEL, Senior Associate
CHARLES J. SIEGMAN, Senior Associate
D A V I D H . H O W A R D , Deputy Associate
ROBERT F. GEMMILL, Staff
LEGAL
DIVISION
MICHAEL BRADFIELD, General
Counsel
Deputy General Counsel
RICHARD M. ASHTON, Associate General Counsel
OLIVER IRELAND, Associate General Counsel
RICKI R. TIGERT, Assistant General Counsel
MARYELLEN A. BROWN, Assistant to the General Counsel
FINANCE
Director
Director
Director
Adviser
DONALD B . A D A M S , Assistant
Director
PETER HOOPER I I I , Assistant
Director
KAREN H . JOHNSON, Assistant
Director
RALPH W . SMITH, JR., Assistant
Director
J. VIRGIL MATTINGLY, JR.,
OFFICE OF THE
SECRETARY
DIVISION
OF RESEARCH
AND
MICHAEL J. PRELL, Director
E D W A R D C . E T T I N , Deputy Director
JARED J. ENZLER, Associate
Director
THOMAS D . SIMPSON, Associate
Director
LAWRENCE SLIFMAN, Associate
WILLIAM W . WILES,
Secretary
BARBARA R. LOWREY, Associate
JAMES MCAFEE, Associate
Secretary
Secretary
DIVISION OF CONSUMER
AND COMMUNITY
AFFAIRS
GRIFFITH L . GARWOOD,
Director
GLENN E . LONEY, Assistant
Director
ELLEN M A L A N D , Assistant
Director
DOLORES S . SMITH, Assistant
Director
WILLIAM TAYLOR, Staff Director
FRANKLIN D . DREYER, Deputy Director'
D O N E . K L I N E , Associate
Director
FREDERICK M . STRUBLE, Associate
Director
WILLIAM A . RYBACK, Deputy Associate
Director
STEPHEN C . SCHEMERING, Deputy Associate
Director
RICHARD SPILLENKOTHEN, Deputy Associate
Director
HERBERT A . BIERN, Assistant
Director
JOE M. CLEAVER, Assistant Director
ANTHONY CORNYN, Assistant
Director
JAMES I. GARNER, Assistant
Director
JAMES D . GOETZINGER, Assistant
Director
MICHAEL G . MARTINSON, Assistant
Director
ROBERT S . PLOTKIN, Assistant
Director
SIDNEY M . SUSS AN, Assistant
Director
LAURA M . HOMER, Securities Credit Officer
1. On loan from the Federal Reserve Bank of Chicago.
Director
ELEANOR J. STOCKWELL, Associate
Director
MARTHA BETHEA, Deputy Associate
Director
PETER A . TINSLEY, Deputy Associate
Director
MARK N . GREENE, Assistant
Director
MYRON L . K W A S T , Assistant
Director
SUSAN J. LEPPER, Assistant
Director
MARTHA S . SCANLON, Assistant
Director
D A V I D J. STOCKTON, Assistant
Director
JOYCE K . ZICKLER, Assistant
Director
LEVON H . GARABEDIAN, Assistant
Director
(Administration)
DIVISION
DIVISION OF BANKING
SUPERVISION AND
REGULATION
STATISTICS
OF MONETARY
AFFAIRS
DONALD L . K O H N , Director
D A V I D E . LINDSEY, Deputy Director
BRIAN F . M A D I G A N , Assistant
Director
RICHARD D . PORTER, Assistant
Director
NORMAND R.V. BERNARD, Special Assistant to the Board
OFFICE OF THE INSPECTOR
BRENT L. BOWEN, Inspector
GENERAL
General
All
and Official Staff
H . ROBERT H E L L E R
EDWARD W . KELLEY, JR.
OFFICE OF
STAFF DIRECTOR
FOR
OFFICE OF STAFF DIRECTOR FOR
FEDERAL RESERVE BANK
ACTIVITIES
MANAGEMENT
S . D A V I D FROST, Staff Director
E D W A R D T . M U L R E N I N , Assistant Staff Director
PORTIA W . THOMPSON, Equal Employment
Opportunity
Programs Officer
DIVISION
OF
DIVISION OF FEDERAL
BANK
OPERATIONS
PERSONNEL
CHARLES W . B E N N E T T , Assistant
Director
JACK D E N N I S , J R . , Assistant
Director
E A R L G . H A M I L T O N , Assistant
Director
CONTROLLER
GEORGE E . LIVINGSTON, Controller
STEPHEN J. CLARK, Assistant Controller
JOHN H. PARRISH, Assistant Director
LOUISE L . R O S E M A N , Assistant
Director
FLORENCE M . YOUNG,
(Programs
and Budgets)
DARRELL R . P A U L E Y ,
DIVISION
Assistant Controller (Finance)
OF SUPPORT
SERVICES
ROBERT E . FRAZIER, Director
GEORGE M . L O P E Z , Assistant
D A V I D L . W I L L I A M S , Assistant
Director
Director
OFFICE OF THE EXECUTIVE
INFORMATION RESOURCES
DIRECTOR FOR
MANAGEMENT
A L L E N E . B E U T E L , Executive Director
STEPHEN R . M A L P H R U S , Associate
Director
DIVISION
SYSTEMS
OF HARDWARE
AND
SOFTWARE
BRUCE M . B E A R D S L E Y , Director
THOMAS C . J U D D , Assistant
Director
ELIZABETH B . RIGGS, Assistant
Director
ROBERT J. Z E M E L , Assistant
Director
DIVISION OF APPLICATIONS
STATISTICAL
SERVICES
WILLIAM R . JONES, Director
D A Y W . R A D E B A U G H , Assistant
RICHARD C . S T E V E N S , Assistant
PATRICIA A . W E L C H , Assistant
DEVELOPMENT
Director
Director
Director
RESERVE
C L Y D E H . FARNSWORTH, J R . , Director
ELLIOTT C . M C E N T E E , Associate
Director
D A V I D L . R O B I N S O N , Associate
Director
C . WILLIAM SCHLEICHER, J R . , Associate
Director
D A V I D L . S H A N N O N , Director
JOHN R . W E I S , Assistant
Director
CHARLES W . W O O D , Assistant
Director
OFFICE OF THE
THEODORE E. ALLISON, Staff Director
AND
Adviser
A78
Federal Reserve Bulletin • January 1988
Federal Open Market Committee
FEDERAL
OPEN MARKET
COMMITTEE
MEMBERS
A L A N GREENSPAN,
Chairman
E . GERALD CORRIGAN,
W A Y N E D . ANGELL
E D W A R D G . BOEHNE
ROBERT H . BOYKIN
E D W A R D W . KELLEY, JR.
MARTHA R . SEGER
GARY H . STERN
H . ROBERT HELLER
M A N U E L H . JOHNSON
SILAS KEEHN
ALTERNATE
ROBERT P . BLACK
ROBERT T . PARRY
Vice Chairman
MEMBERS
ROBERT P. FORRESTAL
THOMAS M . TIMLEN
W . LEE HOSKINS
STAFF
DONALD L. KOHN, Secretary and Staff Adviser
NORMAND R . V . BERNARD, Assistant
ROSEMARY R . LONEY,
Deputy Assistant
MICHAEL BRADFIELD, General
ERNEST T . PATRIKIS,
E D W I N M . TRUMAN,
Secretary
Secretary
Counsel
Deputy General Counsel
Economist (International)
PETER FOUSEK, Associate
Economist
RICHARD W. LANG, Associate
Economist
PETER D . STERNLIGHT, Manager
SAM Y . CROSS, Manager for
FEDERAL ADVISORY
DAVID E. LINDSEY, Associate
Economist
MICHAEL J. PRELL, Associate
Economist
ARTHUR J. ROLNICK, Associate
Economist
HARVEY ROSENBLUM, Associate
Economist
KARL A . SCHELD, Associate
Economist
CHARLES J. SIEGMAN, Associate
Economist
THOMAS D. SIMPSON, Associate
Economist
for Domestic Operations, System Open Market Account
Foreign Operations, System Open Market Account
COUNCIL
JOHN G . MEDLIN JR.,
President
JULIEN L . MCCALL, Vice President
JOHN F . MCGILLICUDDY, D E W A L T H . A N K E N Y , JR., A N D F . PHILLIPS GILTNER,
JOHN P . L A WARE, First District
JOHN F. MCGILLICUDDY, Second District
SAMUEL A . MCCULLOUGH, Third District
JULIEN L . MCCALL, Fourth District
JOHN G . M E D L I N , JR., Fifth District
BENNETT A . BROWN, Sixth District
Directors
CHARLES T. FISHER, III, Seventh District
DONALD N. B R A N D I N , Eighth District
D E W A L T H . A N K E N Y , JR., Ninth District
F . PHILLIPS GILTNER, Tenth District
GERALD W . FRONTERHOUSE, Eleventh District
JOHN D. MANGELS, Twelfth District
HERBERT V . PROCHNOW, SECRETARY
WILLIAM J. KORSVIK, ASSOCIATE SECRETARY
A79
and Advisory Councils
CONSUMER
ADVISORY
COUNCIL
E D W A R D N . LANGE
STEVEN W . H A M M , Colui
E D W I N B . BROOKS, JR., Richmond, Virginia
JONATHAN A . BROWN, W a s h i n g t o n , D . C .
JUDITH N. BROWN, Edina, Minnesota
MICHAEL S. CASSIDY, New York, New York
THERESA FAITH CUMMINGS, Springfield, Illinois
RICHARD B. DOBY, Denver, Colorado
RICHARD H . F I N K , Washington, D.C.
NEIL J. FOGARTY, Jersey City, N e w Jersey
STEPHEN GARDNER, Dallas, Texas
KENNETH A . H A L L , Picayune, Mississippi
ELENA G . HANGGI, Little Rock, Arkansas
ROBERT J. HOBBS, Boston, Massachusetts
RAMON E. JOHNSON, Salt Lake City, Utah
ROBERT W. JOHNSON, West Lafayette, Indiana
THRIFT INSTITUTIONS
ADVISORY
Seattle, Washington, Chairman
ibia, South Carolina, Vice Chairman
JOHN
M.
KOLESAR,
Cleveland, Ohio
ALAN B. LERNER, Dallas, Texas
FRED S. MCCHESNEY, Chicago, Illinois
RICHARD L. D. MORSE, Manhattan, Kansas
HELEN E . NELSON, Mill Valley, California
SANDRA R. PARKER, Richmond, Virginia
JOSEPH L. PERKOWSKI, Centerville, Minnesota
BRENDA L. SCHNEIDER, Detroit, Michigan
JANE SHULL, Philadelphia, Pennsylvania
TED L. SPURLOCK, Dallas, Texas
MEL R. STILLER, Boston, Massachusetts
CHRISTOPHER J. SUMNER, Salt Lake City, Utah
E D W A R D J. WILLIAMS, Chicago, Illinois
MICHAEL ZOROYA, St. Louis, Missouri
COUNCIL
MICHAEL R. WISE, Denver, Colorado, President
JAMIE J. JACKSON, Houston, Texas, Vice President
GERALD M. CZARNECKI, Mobile, Alabama
JOHN C. DICUS, Topeka, Kansas
BETTY GREGG, Phoenix, Arizona
THOMAS A. K I N S T , Hoffman Estates,
RAY MARTIN, Los Angeles, California
DONALD F. MCCORMICK, Livingston, N e w Jersey
JANET
M.
PAVLISKA,
Arlington, Massachusetts
HERSCHEL ROSENTHAL, Miami, Florida
Illinois
Milwaukee, Wisconsin
GARY L. SIRMON, Walla Walla, Washington
WILLIAM G . SCHUETT,
A80
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KET INTERVENTION, by Donald B. Adams and Dale
W. Henderson. August 1983. 5 pp. Out of print.
145. SERVICE CHARGES AS A SOURCE OF BANK INCOME
A N D THEIR IMPACT ON CONSUMERS, by Glenn B .
127. U . S . EXPERIENCE WITH EXCHANGE MARKET INTERVENTION: JANUARY-MARCH 1 9 7 5 , by Margaret L .
Canner and Robert D. Kurtz. August 1985. 31 pp. Out
of print.
Greene. August 1984. 16 pp. Out of print.
128. U . S . EXPERIENCE WITH EXCHANGE MARKET INTERVENTION: SEPTEMBER 1977-DECEMBER 1 9 7 9 , b y M a r -
garet L. Greene. October 1984. 40 pp. Out of print.
129. U . S . EXPERIENCE WITH EXCHANGE MARKET INTERVENTION: OCTOBER 1980-OcTOBER 1 9 8 1 , by Margaret
L. Greene. August 1984. 36 pp.
130. EFFECTS OF EXCHANGE RATE VARIABILITY ON INTERNATIONAL TRADE AND OTHER ECONOMIC VARIABLES: A REVIEW OF THE LITERATURE, by Victoria S .
Farrell with Dean A. DeRosa and T. Ashby McCown.
January 1984. Out of print.
131. CALCULATIONS OF PROFITABILITY FOR U . S . D O L L A R DEUTSCHE MARK INTERVENTION, by Laurence R .
Jacobson. October 1983. 8 pp.
132. TIME-SERIES STUDIES OF THE RELATIONSHIP BETWEEN EXCHANGE RATES AND INTERVENTION: A
REVIEW OF THE TECHNIQUES AND LITERATURE, b y
Kenneth Rogoff. October 1983. 15 pp.
146. THE ROLE OF THE PRIME RATE IN THE PRICING OF
BUSINESS LOANS BY COMMERCIAL BANKS, 1977-84,
by Thomas F. Brady. November 1985. 25 pp.
147. REVISIONS IN THE MONETARY SERVICES (DIVISIA)
INDEXES OF THE MONETARY AGGREGATES, by Helen
T. Farr and Deborah Johnson. December 1985. 42 pp.
148. THE MACROECONOMIC A N D SECTORAL EFFECTS OF
THE ECONOMIC RECOVERY TAX ACT: SOME SIMULA-
TION RESULTS, by Flint Brayton and Peter B. Clark.
December 1985. 17 pp.
149. THE OPERATING PERFORMANCE OF ACQUIRED FIRMS
IN BANKING BEFORE A N D AFTER ACQUISITION, b y
Stephen A. Rhoades. April 1986. 32 pp.
150. STATISTICAL COST ACCOUNTING MODELS IN BANKING: A REEXAMINATION A N D AN APPLICATION, b y
John T. Rose and John D. Wolken. May 1986. 13 pp.
151. RESPONSES TO DEREGULATION: RETAIL DEPOSIT
PRICING FROM 1 9 8 3 THROUGH 1 9 8 5 , b y P a t r i c k I.
133. RELATIONSHIPS AMONG EXCHANGE RATES, INTERVENTION, A N D INTEREST RATES: A N EMPIRICAL IN-
Mahoney, Alice P. White, Paul F. O'Brien, and Mary
M. McLaughlin. January 1987. 30 pp.
VESTIGATION, by Bonnie E. Loopesko. November
1983. Out of print.
152. DETERMINANTS OF CORPORATE MERGER ACTIVITY: A
REVIEW OF THE LITERATURE, by Mark J. War-
134. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET
INTERVENTION: A REVIEW OF THE LITERATURE, b y
Ralph W. Tryon. October 1983. 14 pp. Out of print.
shawsky. April 1987. 18 pp.
153.
STOCK MARKET VOLATILITY, by Carolyn D. Davis
and Alice P. White. September 1987. 14 pp.
A82
154. T H E EFFECTS ON CONSUMERS A N D CREDITORS OF
PROPOSED CEILINGS ON CREDIT C A R D INTEREST
RATES, by Glenn B. Canner and James T. Fergus.
October 1987. 783 pp.
155. T H E F U N D I N G OF PRIVATE PENSION PLANS, by Mark
J. Warshawsky. November 1987. 25 pp.
REPRINTS OF BULLETIN
ARTICLES
Most of the articles reprinted do not exceed 12 pages.
Limit of 10 copies
Foreign Experience with Targets for Money Growth. 10/83.
Intervention in Foreign Exchange Markets: A Summary of
Ten Staff Studies. 11/83.
A Financial Perspective on Agriculture. 1/84.
Survey of Consumer Finances, 1983. 9/84.
Bank Lending to Developing Countries. 10/84.
Survey of Consumer Finances, 1983: A Second Report.
12/84.
Union Settlements and Aggregate Wage Behavior in the
1980s. 12/84.
The Thrift Industry in Transition. 3/85.
A Revision of the Index of Industrial Production. 7/85.
Financial Innovation and Deregulation in Foreign Industrial
Countries. 10/85.
Recent Developments in the Bankers Acceptance Market.
1/86.
The Use of Cash and Transaction Accounts by American
Families. 2/86.
Financial Characteristics of High-Income Families. 3/86.
Prices, Profit Margins, and Exchange Rates. 6/86.
Agricultural Banks under Stress. 7/86.
Foreign Lending by Banks: A Guide to International and
U.S. Statistics. 10/86.
Recent Developments in Corporate Finance. 11/86.
U.S. International Transactions in 1986. 5/87.
Measuring the Foreign-Exchange Value of the Dollar. 6/87.
Changes in Consumer Installment Debt: Evidence from the
1983 and 1986 Surveys of Consumer Finances. 10/87.
A83
Index to Statistical Tables
References are to pages A3-A75 although the prefix "A" is omitted in this index
ACCEPTANCES, bankers (See Bankers acceptances)
Agricultural loans, commercial banks, 19, 20, 74
Assets and liabilities (See also Foreigners)
Banks, by classes, 18-20
Domestic finance companies, 37
Federal Reserve Banks, 10
Financial institutions, 26
Foreign banks, U.S. branches and agencies, 21
Nonfinancial corporations, 36
Automobiles
Consumer installment credit, 40, 41
Production, 47, 48
BANKERS acceptances, 9, 23, 24
Bankers balances, 18-20 (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 34
Rates, 24
Branch banks, 21, 55
Business activity, nonfinancial, 44
Business expenditures on new plant and equipment, 36
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 46
Capital accounts
Banks, by classes, 18
Federal Reserve Banks, 10
Central banks, discount rates, 67
Certificates of deposit, 24
Commercial and industrial loans
Commercial banks, 16, 19, 70-72
Weekly reporting banks, 19-21
Commercial banks
Assets and liabilities, 18-20
Commercial and industrial loans, 16, 18, 19, 20, 21, 70-72
Consumer loans held, by type, and terms, 40, 41
Loans sold outright, 19
Nondeposit funds, 17
Real estate mortgages held, by holder and property, 39
Terms of Lending, 70-75
Time and savings deposits, 3
Commercial paper, 23, 24, 37
Condition statements (See Assets and liabilities)
Construction, 44, 49, 73
Consumer installment credit, 40, 41
Consumer prices, 44, 50
Consumption expenditures, 51, 52
Corporations
Nonfinancial, assets and liabilities, 36
Profits and their distribution, 35
Security issues, 34, 65
Cost of living (See Consumer prices)
Credit unions, 26, 40. (See also Thrift institutions)
Currency and coin, 18
Currency in circulation, 4, 13
Customer credit, stock market, 25
DEBITS to deposit accounts, 15
Debt (See specific types of debt or securities)
Demand deposits
Banks, by classes, 18-21
Demand deposits—Continued
Ownership by individuals, partnerships, and
corporations, 22
Turnover, 15
Depository institutions
Reserve requirements, 8
Reserves and related items, 3, 4, 5, 12
Deposits (See also specific types)
Banks, by classes, 3, 18-20, 21
Federal Reserve Banks, 4, 10
Turnover, 15
Discount rates at Reserve Banks and at foreign central
banks and foreign countries (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 35
EMPLOYMENT, 45
Eurodollars, 24
FARM mortgage loans, 39
Federal agency obligations, 4, 9, 10, 11, 31, 32
Federal credit agencies, 33
Federal finance
Debt subject to statutory limitation, and types and
ownership of gross debt, 30
Receipts and outlays, 28, 29
Treasury financing of surplus, or deficit, 28
Treasury operating balance, 28
Federal Financing Bank, 28, 33
Federal funds, 6, 17, 19, 20, 21, 24, 28
Federal Home Loan Banks, 33
Federal Home Loan Mortgage Corporation, 33, 38, 39
Federal Housing Administration, 33, 38, 39
Federal Land Banks, 39
Federal National Mortgage Association, 33, 38, 39
Federal Reserve Banks
Condition statement, 10
Discount rates (See Interest rates)
U.S. government securities held, 4, 10, 11, 30
Federal Reserve credit, 4, 5, 10, 11
Federal Reserve notes, 10
Federal Savings and Loan Insurance Corporation insured
institutions, 26
Federally sponsored credit agencies, 33
Finance companies
Assets and liabilities, 37
Business credit, 37
Loans, 40, 41
Paper, 23, 24
Financial institutions
Loans to, 19, 20, 21
Selected assets and liabilities, 26
Float, 4
Flow of funds, 42, 43
Foreign banks, assets and liabilities of U.S. branches and
agencies, 21
Foreign currency operations, 10
Foreign deposits in U.S. banks, 4, 10, 19, 20
Foreign exchange rates, 68
Foreign trade, 54
Foreigners
Claims on, 55, 57, 60, 61, 62, 64
Liabilities to, 20, 54, 55, 57, 58, 63, 65, 66
A84
GOLD
Certificate account, 10
Stock, 4, 54
Government National Mortgage Association, 33, 38, 39
Gross national product, 51
HOUSING, new and existing units, 49
INCOME, personal and national, 44, 51, 52
Industrial production, 44, 47
Installment loans, 40, 41
Insurance companies, 26, 30, 39
Interest rates
Bonds, 24
Commercial banks, 70-75
Consumer installment credit, 41
Federal Reserve Banks, 7
Foreign central banks and foreign countries, 67
Money and capital markets, 24
Mortgages, 38
Prime rate, 23
International capital transactions of United States, 53-67
International organizations, 57, 58, 60, 63, 64
Inventories, 51
Investment companies, issues and assets, 35
Investments (See also specific types)
Banks, by classes, 18, 19, 20, 21, 26
Commercial banks, 3, 16, 18-20, 39
Federal Reserve Banks, 10, 11
Financial institutions, 26, 39
LABOR force, 45
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 18-20
Commercial banks, 3, 16, 18-20, 70-75
Federal Reserve Banks, 4, 5, 7, 10, 11
Financial institutions, 26, 39
Insured or guaranteed by United States, 38, 39
MANUFACTURING
Capacity utilization, 46
Production, 46, 48
Margin requirements, 25
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 6
Reserve requirements, 8
Mining production, 48
Mobile homes shipped, 49
Monetary and credit aggregates, 3, 12
Money and capital market rates, 24
Money stock measures and components, 3, 13
Mortgages (See Real estate loans)
Mutual funds, 35
Mutual savings banks, (See Thrift institutions)
NATIONAL defense outlays, 29
National income, 51
OPEN market transactions, 9
PERSONAL income, 52
Prices
Consumer and producer, 44, 50
Stock market, 25
Prime rate, 23
Producer prices, 44, 50
Production, 44, 47
Profits, corporate, 35
REAL estate loans
Banks, by classes, 16, 19, 20, 39
Real estate loans—Continued
Financial institutions, 26
Terms, yields, and activity, 38
Type of holder and property mortgaged, 39
Repurchase agreements, 6, 17, 19, 20, 21
Reserve requirements, 8
Reserves
Commercial banks, 18
Depository institutions, 3, 4, 5, 12
Federal Reserve Banks, 10
U.S. reserve assets, 54
Residential mortgage loans, 38
Retail credit and retail sales, 40, 41, 44
SAVING
Flow of funds, 42, 43
National income accounts, 51
Savings and loan associations, 26, 39, 40, 42. (See also
Thrift institutions)
Savings banks , 26, 39, 40
Savings deposits (See Time and savings deposits)
Securities (See specific types)
Federal and federally sponsored credit agencies, 33
Foreign transactions, 65
New issues, 34
Prices, 25
Special drawing rights, 4, 10, 53, 54
State and local governments
Deposits, 19, 20
Holdings of U.S. government securities, 30
New security issues, 34
Ownership of securities issued by, 19, 20, 26
Rates on securities, 24
Stock market, selected statistics, 25
Stocks (See also Securities)
New issues, 34
Prices, 25
Student Loan Marketing Association, 33
TAX receipts, federal, 29
Thrift institutions, 3. (See also Credit unions and Savings
and loan associations)
Time and savings deposits, 3, 13, 17, 18, 19, 20, 21
Trade, foreign, 54
Treasury cash, Treasury currency, 4
Treasury deposits, 4, 10, 28
Treasury operating balance, 28
UNEMPLOYMENT, 45
U.S. government balances
Commercial bank holdings, 18, 19, 20
Treasury deposits at Reserve Banks, 4, 10, 28
U.S. government securities
Bank holdings, 18-20, 21, 30
Dealer transactions, positions, and financing, 32
Federal Reserve Bank holdings, 4, 10, 11, 30
Foreign and international holdings and transactions, 10,
30, 66
Open market transactions, 9
Outstanding, by type and holder, 26, 30
Rates, 24
U.S. international transactions, 53-67
Utilities, production, 48
VETERANS Administration, 38, 39
WEEKLY reporting banks, 19-21
Wholesale (producer) prices, 44, 50
YIELDS (See Interest rates)
A85
Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE BANK, Chairman
branch, or facility
Zip
Deputy Chairman
President
First Vice President
BOSTON*
02106
George N. Hatsopoulos
Richard N. Cooper
Frank E. Morris
Robert W. Eisenmenger
NEW YORK*
10045
John R. Opel
Virginia A. Dwyer
Mary Ann Lambertsen
E. Gerald Corrigan
Thomas M. Timlen
Buffalo
14240
John T. Keane
PHILADELPHIA
19105
Nevius M. Curtis
Peter A. Benoliel
Edward G. Boehne
William H. Stone, Jr.
CLEVELAND*
44101
Charles W. Parry
John R. Miller
Owen B. Butler
James E. Haas
W. Lee Hoskins
William H. Hendricks
Robert A. Georgine
Hanne Merriman
Gloria L. Johnson
Wallace J. Jorgenson
Robert P. Black
Jimmie R. Monhollon
Bradley Currey, Jr.
Larry L. Prince
Roy D. Terry
E. William Nash, Jr.
Sue McCourt Cobb
Condon S. Bush
Sharon A. Perlis
Robert P. Forrestal
Jack Guynn
Robert J. Day
Marcus Alexis
Richard T. Lindgren
Silas Keehn
Daniel M. Doyle
Robert L. Virgil, Jr.
H. Edwin Trusheim
James R. Rodgers
Raymond M. Burse
Katherine H. Smythe
Thomas C. Melzer
James R. Bowen
Michael W. Wright
John A. Rollwagen
Marcia S. Andersen
Gary H. Stern
Thomas E. Gainor
Irvine O. Hockaday, Jr.
Fred W. Lyons, Jr.
James C. Wilson
Patience S. Latting
Kenneth L. Morrison
Roger Guffey
Henry R. Czerwinski
Bobby R. Inman
Hugh G. Robinson
Mary Carmen Saucedo
Walter M. Mischer, Jr.
Robert F. McDermott
Robert H. Boykin
William H.Wallace
Robert F. Erburu
Carolyn S. Chambers
Richard C. Seaver
Paul E. Bragdon
Don M. Wheeler
Carol Nygren
Robert T. Parry
Carl E. Powell
Cincinnati
Pittsburgh
45201
15230
RICHMOND*
23219
Baltimore
21203
Charlotte
28230
Culpeper Communications
and Records Center 22701
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans
30303
35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
Memphis
72203
40232
38101
MINNEAPOLIS
55480
Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
59601
64198
80217
73125
68102
75222
79999
77252
78295
SAN FRANCISCO
94120
Los Angeles
Portland
Salt Lake City
Seattle
90051
97208
84125
98124
Vice President
in charge of branch
Charles A.Cerino1
Harold J. Swart1
Robert D. McTeer, Jr.1
Albert D. Tinkelenberg1
John G. Stoides1
Delmar Harrison1
Fred R. Herr1
James D. Hawkins1
Patrick K. Barron1
Donald E. Nelson
Henry H. Bourgaux
Roby L. Sloan1
John F. Breen
James E. Conrad
Paul I. Black, Jr.
Robert F. McNellis
Enis Alldredge, Jr.
William G. Evans
Robert D. Hamilton
Tony J. Salvaggio1
Sammie C. Clay
Robert Smith, III1
Thomas H. Robertson
John F. Hoover1
Thomas C. Warren2
Angelo S. Carella1
E. Ronald Liggett1
Gerald R. Kelly1
*Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, N e w Jersey 07016;
Jericho, N e w York 11753; Utica at Oriskany, N e w York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West
Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202.
1. Senior Vice President.
2. Executive Vice President.
A86
The Federal Reserve System
Boundaries of Federal Reserve Districts and Their Branch Territories
Aflrii 1914
LEGEND
— B o u n d a r i e s of Federal Reserve Districts
Boundaries of Federal Reserve Branch
Territories
®
Federal Reserve Bank Cities
*
Federal Reserve Branch Cities
Federal Reserve Bank Facility
Q
Board of Governors of the Federal Reserve
System
@FedFRASER